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, 2004
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 26, 2004, 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 26, 2003 will be entitled to vote, for the
following purposes:
1. To elect three directors for terms expiring in
2007;
2. To approve an amendment to the Company's Second
Restated Articles of Incorporation (the "Articles
of Incorporation") to increase the number of
authorized shares of common stock;
3. To approve an amendment to delete Section D and
renumber Section E of Articles of Incorporation;
4. To approve an amendment to Section A of Article
Six of the Articles of Incorporation regarding
the number of directors;
5. To approve amendments to Sections C of Article Six
and Section B of Article Nine of the Articles of
Incorporation regarding advance notice of nominations
and proposals;
6. To approve an amendment to add new Article
Thirteen to the Articles of Incorporation
regarding limitations on the liability of
directors;
7. To authorize the sale of certain types of
securities from time to time to MetLife, Inc.,
the beneficial owner of a majority of the
Company's common shares, or affiliates of
MetLife, Inc.;
8. To approve an amendment to the Company's Flexible
Stock Plan; and
9. 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 E. 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 26, 2004
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 at 2:00 p.m. May 26, 2004, 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, 2004.
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 26, 2004 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
62,240,834 shares of Common Stock were outstanding and entitled to be voted
at such meeting, with approximately 91 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, 2003 accompanies this proxy statement.
1
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 2007, or until their respective successors have been elected and
have qualified. Proxies cannot be voted for a greater number of persons than
the number of nominees named.
NOMINEES AND CONTINUING DIRECTORS
The Board of Directors is divided into three classes, each of which
generally contains either three or four directors, with the terms of office
of each class ending in successive years. Mary Ann Brown left the Board in
June 2003 following her resignation from employment with Metropolitan Life
Insurance Company ("Metropolitan Life"), a subsidiary of MetLife, Inc.
("MetLife"). On October 22, 2003, the Board appointed Leland C. Launer, Jr.
to fill the vacancy created by Ms. Brown's resignation. At that meeting the
Board also appointed Lisa M. Weber as a director, effective November 1,
2003. Mr. Launer and Ms. Weber are employees and officers of MetLife and its
various subsidiaries, and both directorships are in the class of directors
with terms expiring in 2006. The Company's Corporate Governance Guidelines
provide that a director may not stand for election after his or her 70th
birthday. Accordingly, William A. Peck, M.D., who has attained age 70, will
retire from the Board on the date of the Annual Meeting of Shareholders. The
Board is nominating William J. Bartlett to fill the vacancy created by Dr.
Peck's retirement. The Board has nine directors and one vacancy, and the
Nominating and Corporate Governance Committee currently is evaluating
director candidates to fill the vacancy. 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.
Should any one or more of the nominees be unable or for good cause
is 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. With the exception of
Mr. Bartlett, 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.
SERVED AS
---------
DIRECTOR
--------
DIRECTORS SINCE
--------- -----
TO BE ELECTED AS DIRECTORS FOR TERMS ENDING 2007:
WILLIAM J. BARTLETT, 54 --
Retired partner, Ernst & Young Australia. Mr. Bartlett was an
accountant and consultant with Ernst & Young for over 35 years and
advised numerous clients in the global insurance industry. Mr. Bartlett
was appointed a partner of Ernst & Young in Sydney, Australia in July
1980, a position he held until his retirement in June 2003. He served
as chairman of the firm's global insurance practice from 1991 to 2000,
and was chairman of the Australian insurance practice group from 1989
to 1998. He holds several professional memberships in Australia (ACPA
and FCA), South Africa (SA), and the United Kingdom (FCMA).
2
ALAN C. HENDERSON, 58 2002
Retired President and Chief Executive Officer of RehabCare Group, Inc.
from June 1998 until June 2003. 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 was a director of RehabCare Group, Inc. from June
1998 to December 2003, Angelica Corporation from March 2001 to June
2003, and General American Capital Corp., a registered investment
company, from October 1989 to April 2003.
A. GREIG WOODRING, 52 1993
President and Chief Executive Officer of the Company since 1993.
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 2006:
STUART I. GREENBAUM, 67 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 First Oak Brook Bancshares, Inc. and Noble International,
Ltd.
LELAND C. LAUNER JR., 48 2003
Executive Vice President and Chief Investment Officer of MetLife and
Metropolitan Life since July 2003, prior to which he was a Senior Vice
President of Metropolitan Life for more than five years.
LISA M. WEBER, 41 2003
Senior Executive Vice President and Chief Administrative Officer of
MetLife and Metropolitan Life since June 2001. She was Executive Vice
President of MetLife and Metropolitan Life from December 1999 to June
2001 and was head of Human Resources of Metropolitan Life from March
1998 to December 2003. Ms. Weber was a Senior Vice President of MetLife
from September 1999 to November 1999 and Senior Vice President of
Metropolitan Life from March 1998 to November 1999. Previously, she was
Senior Vice President of Human Resources of PaineWebber Group
Incorporated, where she was employed for ten years.
3
TO CONTINUE IN OFFICE UNTIL 2005:
J. CLIFF EASON, 56 1993
Retired President of Southwestern Bell Telephone, SBC Communications,
Inc. ("SBC"), a position he held from September 2000 through January
2002. 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 2002.
STEWART G. NAGLER, 61 2002
Vice Chairman of the Board of MetLife since September 1999, and served
as Chief Financial Officer of MetLife from September 1999 to December
2003. He has been Vice Chairman of the Board of Metropolitan Life since
July 1998 and served as Chief Financial Officer of that company from
April 1993 to December 2003. He is a Fellow of the Society of
Actuaries, a Trustee of the Boys & Girls Clubs of America, and Chair of
the Board of Polytechnic University of New York. He received a
bachelor's degree in mathematics, summa cum laude, from Polytechnic
University. Mr. Nagler has been a Director of MetLife since August 1999
and a Director of Metropolitan Life since 1997. Mr. Nagler has
announced his planned retirement from the Boards of Directors of
MetLife and Metropolitan Life, effective in 2004, and his planned
retirement from the Company's Board of Directors effective at the same
time.
JOSEPH A. REALI, 51 2002
Senior Vice President and Tax Director of Metropolitan Life since 1999.
Mr. Reali has served as the liaison with RGA since July 2002. 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.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held a total of four regular and one special
meetings during 2003. Each incumbent director attended at least 75% of the
meetings of the Board and committees on which he or she served during 2003.
The Board of Directors has an Audit Committee, a Compensation Committee, and
a Nominating and Corporate Governance Committee.
4
AUDIT COMMITTEE
The Audit Committee met eight times in 2003, and consisted of
Messrs. Greenbaum (Chairman), Eason, Henderson and Peck. The Audit Committee
is directly responsible for the appointment compensation, retention and
oversight of the work of the Company's independent auditor. The Committee
oversees the Company's accounting and financial reporting processes, the
adequacy of the Company's internal control over financial reporting and of
its disclosure controls and procedures, and the integrity of its financial
statements, pre-approves all audit and non-audit services to be provided by
the independent auditor, reviews reports concerning significant legal and
regulatory matters, and reviews the performance of the Company's internal
audit function. The Committee also discusses the Company's filings on Forms
10-K and 10-Q and the financial information in those filings. The Audit
Committee works closely with management as well as the Company's independent
auditor and internal auditor. A more detailed description of the role and
responsibilities of the Audit Committee is set forth in a written charter,
adopted by the Board of Directors. In March 2004, the Audit Committee
recommended, and the Board approved, a revised charter a copy of which is
attached as Exhibit A to this Proxy Statement. The Audit Committee charter
also is available on the Company's website (www.rgare.com). The Audit
Committee has established procedures for the receipt, retention, and
treatment of complaints regarding accounting, internal accounting controls,
or auditing matters. Please see the discussion of Policies on Communications
under "Shareholder Communications with the Board of Directors." The Policies
on Communications also is available on the Company's website.
The Board of Directors has determined, in its judgment, that all of
the members of the Audit Committee are independent within the meaning of SEC
regulations and the listing standards of the New York Stock Exchange
("NYSE"). The Board of Directors has determined, in its judgment, that
Messrs. Greenbaum and Henderson are qualified as audit committee financial
experts within the meaning of SEC regulations and the Board has determined
that each of them has accounting and related financial management expertise
within the meaning of the listing standards of the NYSE. The Audit Committee
Charter provides that members of the Audit Committee may not simultaneously
serve on the audit committee of more than two other public companies.
COMPENSATION COMMITTEE
The Compensation Committee met seven times during 2003 and
consisted of Messrs. Eason (Chairman), Greenbaum, Peck, and Reali. This
Committee establishes and oversees the Company's general compensation
policies, reviews the performance and compensation of the CEO, and reviews
and determines compensation for other executives and employees. The
Committee also produces an annual report on executive compensation for
inclusion in the Company's proxy statement. A more detailed description of
the role and responsibilities of the Compensation Committee is set forth in
a written charter adopted by the Board of Directors, which is available on
the Company's website (www.rgare.com). Mr. Reali resigned from the Committee
on January 28, 2004. The Board of Directors has determined, in its judgment,
that, all of the Committee's members were independent within the meaning of
the listing standards of the NYSE.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating Committee (renamed the Nominating and Corporate
Governance Committee on March 8, 2004) met once in 2003, and consisted of
Messrs. Peck (Chairman), Eason, Greenbaum, and Reali. This Committee is
responsible for developing and implementing policies and practices relating
to corporate governance, including reviewing and monitoring implementation
of the Company's Corporate Governance Guidelines. In addition, the Committee
identifies individuals qualified to become members of the Board, consistent
with the criteria established by the Board; develops and reviews background
information on candidates for the Board; and makes recommendations to the
Board regarding such candidates. The Committee also will prepare and
supervise the Board's annual review of director independence and the
performance self-evaluations to be conducted by the Board and Committees.
5
A more detailed description of the role and responsibilities of the
Compensation Committee is set forth in a written charter adopted by the
Board of Directors, which is available on the Company's website
(www.rgare.com). Mr. Reali resigned from the Committee on January 28, 2004.
The Board of Directors has determined, in its judgment, that all of the
Committee's members are independent within the meaning of the listing
standards of the NYSE. Shareholders wishing to propose nominees to the
Committee for consideration should notify in writing the Secretary of the
Company in accordance with the process described in "Shareholder Nominations
and Proposals." The Secretary will inform the members of the Committee of
such nominees.
DIRECTOR COMPENSATION
Directors who also serve as officers of the Company, MetLife 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. At various times during 2003, this group of directors consisted
of Messrs. Nagler, Reali, Launer, and Woodring, and Ms. Brown and Ms. Weber.
Directors who are not employees of the Company, MetLife or any subsidiaries
of such companies ("Non-Employee Directors") are paid an annual retainer fee
of $24,000 (except the chair of the Audit Committee - see below), 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 for each
committee meeting attended) and $375 for each telephonic committee meeting
attended (except the committee chairman, who is paid $600 for each committee
meeting attended). Effective February 12, 2003, the annual retainer fee for
the chair of the Audit Committee was increased $8,000 to $32,000. During
2003, the group of Non-Employee Directors consisted of Messrs. Eason,
Greenbaum, Henderson and Peck. 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
($32,000 for the chair of the Audit Committee), $12,000 is paid in shares of
the Company's Common Stock on the date of the regular Board meeting in
January of each year, and the balance of $12,000 ($20,000 for the chair of
the Audit Committee) is paid in cash. Also on the date of the regular Board
meeting in January, 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
option vests one year from the date of grant. On January 29, 2003, each of
Messrs. Eason, Greenbaum, Henderson and Peck were awarded an option to
purchase 3,000 shares of Common Stock at an exercise price of $27.29 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.
The Chairman of the Board (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 regular Board
meeting in January, with the balance paid in cash. 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.
Non-Employee Directors may elect to receive phantom shares in lieu
of their annual retainer (including the stock portion) and meeting fees. A
phantom 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.
Phantom 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 phantom
shares.
All such stock and options are issued pursuant to the Flexible Stock
Plan for Directors, which was adopted effective January 1, 1997. At the
annual meeting held May 28, 2003, the shareholders approved the Amended and
Restated Flexible Stock Plan for Directors. Phantom shares are granted under
the Phantom Stock Plan for Directors, which was adopted April 13, 1994. At
the annual meeting held May 28, 2003, the shareholders approved an amendment
to the Phantom Stock Plan for Directors.
6
CORPORATE GOVERNANCE
The Company has adopted an Employee Code of Business Conduct and
Ethics (the "Employee Code"), a Directors' Code of Conduct (the "Directors'
Code"), and a Financial Management Code of Professional Conduct (the
"Financial Management Code"). The Employee Code applies to all employees and
officers of the Company and its subsidiaries. The Directors' Code applies to
directors of the Company and its subsidiaries. The Financial Management Code
applies to the Company's chief executive officer, chief financial officer,
corporate controller, primary financial officers in each business unit, and
all professionals in finance and finance-related departments. The Company
intends to satisfy its disclosure obligations under Item 10 of Form 8-K by
posting on its website information about amendments to, or waivers from, a
provision of the Financial Management Code that applies to the Company's
chief executive officer, chief financial officer, and corporate controller.
In March 2004, the Board of Directors adopted Corporate Governance
Guidelines, a revised Audit Committee Charter, charters for the Compensation
Committee and Nominating and Corporate Governance Committee, and Policies on
Communications (collectively "Governance Documents"). The Codes and
Governance Documents referenced above are available on the Company's website
at www.rgare.com. The Company will provide without charge upon written or
oral request, a copy of any of the Codes of Conduct or Governance Documents.
Requests should be directed to Investor Relations, Reinsurance Group of
America, Incorporated, 1370 Timberlake Manor Parkway, Chesterfield, MO 63017
by electronic mail (investrelations@rgare.com) or by telephone
(636-736-7243).
DIRECTOR INDEPENDENCE
In accordance with the Corporate Governance Guidelines, the Board
undertook a review of director independence in March 2004. During this
review, the Board received a report noting that there were no transactions
or relationships between any of Messrs. Bartlett, Eason, Greenbaum,
Henderson, or Dr. Peck, or any member of their immediate family, and the
Company and its subsidiaries and affiliates. The purpose of this review was
to determine whether any of these five directors had a material relationship
with the Company that would preclude such director from being independent
under the listing standards of the NYSE or the Company's Corporate
Governance Guidelines.
As a result of this review, the Board affirmatively determined, in
its judgment, that each of the five directors named above are independent of
the Company and its management under the applicable standards. Messrs.
Nagler, Launer, Reali and Ms. Weber are considered non-independent directors
because of their status as senior executives or officers of MetLife or its
subsidiaries and affiliates. Mr. Woodring is a non-independent director
because he is Chief Executive Officer of the Company.
CONTROLLED COMPANY EXEMPTION
The listing standards of the NYSE require listed companies to have
a Board of Directors that have a majority of independent directors. There is
an exemption from this requirement for "controlled companies," which means a
company of which more than 50% of the voting power is held by an individual,
a group or another company. Controlled companies need not comply with the
requirement to have a majority of independent directors or Compensation and
Nominating and Corporate Governance Committees composed entirely of
independent directors. MetLife beneficially owns approximately 52% of the
Company's outstanding shares. Accordingly, the Company is a "controlled
company" under the NYSE listing standards. The Company is relying on the
controlled company exemption in connection with the requirement to have a
majority of independent directors. However, the Company has chosen not to
rely on the exemption for the Compensation and Nominating and Corporate
Governance Committees and, as of January 28, 2004, the Board has determined
that, in its judgment, those two Committees were composed entirely of
independent directors.
7
OTHER MATTERS
In March 2004, the Board named Mr. Nagler as the presiding
director, whose primary responsibility is to preside over periodic executive
sessions of the Board in which the management director (Mr. Woodring) does
not participate. In March 2004, the Board adopted a Policies on
Communications, which describes the methods for interested parties to
communicate directly with the presiding director or with the non-management
directors. The Policies on Communications is available on the Company's
website.
SECURITIES OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
OWNERSHIP OF SHARES OF RGA
--------------------------
The following table sets forth, as of February 1, 2004, 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 OF
BENEFICIAL OWNER(2) BENEFICIAL OWNERSHIP(1) CLASS(2)
-------------------- ----------------------- --------
SIGNIFICANT SHAREHOLDERS:
MetLife, Inc. 32,243,539(3) 51.9%
One Madison Avenue
New York, New York 10010
Wellington Management Company, LLP 5,990,945(4) 9.6%
75 State Street
Boston, Massachusetts 02109
Kayne Anderson Rudnick Investment Management, LLC 4,460,429(5) 7.2%
1800 Avenue of the Stars, Second Floor
Los Angeles, California 90067
DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS:
A. Greig Woodring, Director, President and Chief 262,693(6) *
Executive Officer(3)
William J. Bartlett, Director Nominee -- **
J. Cliff Eason, Director 21,383(7) *
Stuart Greenbaum, Director 19,580(8) *
Alan C. Henderson, Director 7,943(9) *
Leland C. Launer, Jr., Director (3) -- **
Stewart G. Nagler, Chairman (3) 1,000 *
William A. Peck, M. D., Director 15,583(10) *
Joseph A. Reali, Director -- **
Lisa M. Weber, Director (3) -- **
David B. Atkinson, Executive Vice President and Chief 152,641(11) *
Operating Officer
Jack B. Lay, Executive Vice President and Chief Financial 80,323(12) *
Officer
Paul A. Schuster, Executive Vice President, U.S. Operations 72,823(13) *
8
AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER(2) BENEFICIAL OWNERSHIP(1) CLASS(2)
-------------------- ----------------------- --------
Graham Watson, Executive Vice President and Chief Marketing 91,891(14) *
Officer
Andre St-Amour, Retired Executive Vice President and Chief 5,250(15) *
International Operating Officer
All directors and executive officers 779,315(16) 1.24%
as a group (16 persons)
* Less than one percent.
** Not applicable.
(1) Unless otherwise indicated, each named person has sole voting and
investment power over the shares listed as beneficially owned.
(2) For purposes of this table, "beneficial ownership" is determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), pursuant to which a person or group of
persons is deemed to have "beneficial ownership" of any shares of
common stock that such person has the right to acquire within 60 days.
For computing the percentage of the class of securities held by each
person or group of persons named above, any shares which such person or
persons has the right to acquire within 60 days (as well as the shares
of common stock underlying fully vested stock options) are deemed to be
outstanding for the purposes of computing the percentage ownership of
such person or group but are not deemed to be outstanding for the
purposes of computing the percentage ownership of any other person or
group.
(3) The amount in the table reflects the total beneficial ownership of
MetLife and certain of its affiliates. Mr. Woodring is an executive
officer of GenAmerica Financial Corporation ("GenAmerica") and General
American. Messrs. Nagler and Launer, and Ms. Weber, are executive
officers of MetLife. These individuals disclaim beneficial ownership of
the shares beneficially owned by MetLife and its subsidiaries.
(4) As reported on a Schedule 13G filed February 12, 2004. 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 4,660,537 shares and
shared dispositive power of 5,990,945 shares.
(5) As reported on a Schedule 13G filed February 10, 2004. Kayne Anderson
Rudnick Investment Management, LLC ("KAR"), is an investment advisor.
Shares are owned by several accounts managed, with discretion to
purchase or sell securities, by KAR, none of which has beneficial
ownership of more than five percent of the Company's outstanding
shares. KAR has sole voting and dispositive power for all of the shares
reported.
(6) Includes 218,576 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.
(7) Includes 17,933 shares of Common Stock subject to stock options that
are exercisable within 60 days. Also includes 1,200 restricted shares
of Common Stock that are subject to forfeiture in accordance with the
terms of the specific grant, as to which Mr. Eason has no investment
power.
(8) Includes 17,933 shares of Common Stock subject to stock options that
are exercisable within 60 days. Also includes 1,200 restricted shares
of Common Stock that are subject to forfeiture in accordance with the
terms of the specific grant, as to which Mr. Greenbaum has no
investment power.
(9) Includes 6,000 shares of common stock subject to stock options that are
exercisable within 60 days. Also includes 1,200 restricted shares of
Common Stock that are subject to forfeiture in accordance with the
terms of the specific grant, as to which Mr. Henderson has no
investment power.
(10) Includes 13,433 shares of common stock subject to stock options that
are exercisable within 60 days. Also includes 1,200 restricted shares
of Common Stock that are subject to forfeiture in accordance with the
terms of the specific grant, as to which Dr. Peck has no investment
power.
(11) Includes 113,148 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.
(12) Includes 71,975 shares of Common Stock subject to stock options that
are exercisable within 60 days and 1,800 shares for which he shares
voting and investment power with his 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.
(13) Includes 64,216 shares of Common Stock subject to stock options that
are exercisable within 60 days.
(14) Includes 83,924 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.
9
(15) The Ownership table includes stock ownership information for all
persons named in the Summary Compensation Table. Effective June 30,
2003, Mr. St-Amour retired as an executive officer of the Company;
however, he is included in the Summary Compensation Table and other
tables in this proxy statement in accordance with Securities and
Exchange Commission ("SEC") rules.
(16) Includes a total of 655,343 shares of Common Stock subject to stock
options that are exercisable within 60 days; and 32,896 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 1, 2004, certain
information with respect to the following individuals to the extent they own
shares of common stock of MetLife, the Company's parent: (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.
PERCENT OF
----------
BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1) CLASS
---------------- -------------------------------------------- -----
Direct Indirect (2)
------ ------------
Stewart G. Nagler, Chairman 243,946(3) 419 *
Leland C. Launer, Jr., Director 52,101(4) 38 *
Joseph A. Reali, Director 52,525(5) 170(6) *
Lisa M. Weber, Director 145,342(7) 1,766(8) *
A. Greig Woodring, Director, President & CEO 90 -- *
All directors and executive officers as a group
(16 persons) 494,004 2,393 *
*Less than one percent.
(1) Unless otherwise indicated, each named person has sole voting and
investment power over the shares listed as beneficially owned.
(2) Unless otherwise noted, represents shares held through the MetLife
Policyholder Trust, which has sole voting power over such shares.
(3) Includes 201,368 shares of MetLife common stock subject to stock
options that are exercisable within 60 days, 32,390 deferred share
units payable in shares of MetLife common stock under MetLife's
Deferred Compensation Plan for Officers, and 10,188 share equivalent
units payable in cash under MetLife's Auxiliary Savings and Investment
Plan.
(4) Includes 45,086 shares of MetLife common stock subject to stock options
that are exercisable within 60 days and 7,015 deferred share units
payable in shares of MetLife common stock under MetLife's Deferred
Compensation Plan for Officers.
(5) Includes 43,152 shares of MetLife common stock subject to stock options
that are exercisable within 60 days, and 6,373 deferred share units
payable in shares of MetLife common stock under MetLife's Deferred
Compensation Plan for Officers.
(6) Includes 10 shares jointly held with Mr. Reali's spouse, Madelyn Reali,
with whom Mr. Reali shares investment power.
(7) Includes 129,851 shares of MetLife common stock subject to stock
options that are exercisable within 60 days and 15,491 deferred share
units payable in shares of MetLife common stock under MetLife's
Deferred Compensation Plan for Officers.
(8) Includes 10 shares held through the MetLife Policyholder Trust, which
has sole voting power over such shares, and 1,756 shares held in
MetLife's Savings and Investment Plan, which may vote the shares if no
voting instruction is provided to the plan trustee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 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 SEC and the
NYSE. 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
10
officers, and greater than 10% beneficial owners complied with all filing
requirements applicable to them with respect to transactions during 2003.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee was composed during 2003 of
three non-employee directors and one director who is an employee of MetLife.
The Committee establishes and oversees the Company's general compensation
policies, reviews the performance and compensation of the CEO, and reviews
compensation for others executives and employees. RGA Reinsurance Company
("RGA Re"), a wholly owned indirect subsidiary of the Company, employs all
of the Company's "executive officers" (the seven officers who were reporting
persons for purposes of Section 16 of the Exchange Act on December 31, 2003)
except for Andre St-Amour who, prior to his retirement in June 2003, was
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 comparable companies, including
publicly held insurance and reinsurance companies. In February 2003, based
upon an analysis of executive compensation performed late the prior year,
the Committee approved salary increases for the executive officers that
averaged 4.9%. Increases to the salaries of executive officers approved by
the Committee are intended to bring compensation to a more appropriate level
for those positions, based on market data. The Committee also reviewed the
performance of Mr. Woodring and the Company during 2002. Based upon that
review, and the Committee's plans to adopt a new compensation arrangement
for the 2004 year, the Committee kept Mr. Woodring's salary and target bonus
percentage at their then existing levels for 2003.
MANAGEMENT INCENTIVE PLAN
-------------------------
All of the Company's executive officers participate in the
Management Incentive Plan ("MIP"), which provides incentive compensation
based on a Participant's individual performance as well as their division's
and the Company's achievements. The Company's results are measured primarily
on annual operating earnings (net income from continuing operations less
realized capital gains and losses and certain other non-operating items) per
share and secondarily on annual consolidated revenues; divisional results
are based on 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 certain levels, as determined in advance
by the Committee, 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 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. In the
U.S. plan, performance shares vested 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 vested 100% on December 15
of the third calendar year following the year in which they were 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
11
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 2004, the Committee determined the MIP awards for 2003.
The Company's revenue growth and operating earnings in fiscal 2003 exceeded
and reached, respectively, the amounts for maximum bonus awards under the
Management Incentive Plan. Based on consolidated results, the average cash
bonus award under the MIP to executive officers was approximately 38% of
total compensation (salary, cash bonus and cash value of 2003 performance
shares). Mr. Woodring's cash bonus award under the MIP, which is based
solely on Company results for 2003, was $728,000, or approximately 46% of
his total compensation for the year. The average payment in the form of
performance shares to executive officers was approximately 15% of total
compensation for 2003. Mr. Woodring received 6,974 performance shares for
2003, which were valued at $280,000 based on the market value of RGA Common
Stock on the date of grant in February 2004.
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 exceeded its targets for revenue growth and operating
earnings in fiscal 2003. Based on these results, in January 2004 the Board
of Directors approved a profit sharing award of 6.0%. 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 $29,775 for 2003.
FLEXIBLE STOCK 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 2003, in accordance with grant
guidelines, the Committee awarded a total of 723,654 options for Common
Stock, including 234,759 to the Company's executive officers. Mr. Woodring
was awarded 82,081 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 February 2004, in order to further align the interests of the
Company's management and its shareholders, the Committee revised the
executive stock ownership guidelines initially adopted in October 1996. The
revised guidelines increase the market value of the Company's shares that
executives should seek to hold, based on a multiple of the executive's base
salary, as follows: the CEO (four times), Executive Vice Presidents (three
times) and Senior Vice Presidents (two times). The market value of shares
includes only those shares of common stock and restricted shares that are
directly or beneficially owned by the executive. Executives who are subject
to the guidelines must retain the net proceeds (net of taxes and exercise
cost) of any stock option exercises until they satisfy their respective
stock ownership requirement.
12
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.
THE COMPENSATION COMMITTEE
J. Cliff Eason, Chairman Stuart Greenbaum William
A. Peck, M.D. Joseph A. Reali
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 named
executive officers of the Company during 2003. Mr. St-Amour retired as an
executive officer of the Company on June 30, 2003; however, he is included
in the Summary Compensation Table in accordance with SEC rules.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
------------------- -----------------------------
SECURITIES ALL OTHER
RESTRICTED UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS ($)(2)(3) STOCK($) OPTIONS(#)(4) ($)(5)
--------------------------- ---- ------------ --------------- ---------- ------------- ------------
A. Greig Woodring 2003 $560,000 $1,011,000 -- 82,081 $42,775
President and Chief 2002 560,000 759,077 -- 70,197 29,124
Executive Officer 2001 550,919 175,710 -- 67,086 161,866
David B. Atkinson 2003 $380,000 $460,162 -- 34,811 $24,883
Executive Vice President and 2002 378,154 288,029 -- 28,831 26,766
Chief Operating Officer 2001 365,231 77,694 -- 29,350 77,524
Jack B. Lay 2003 $307,115 $266,500 -- 27,025 $26,209
Executive Vice President and 2002 287,308 180,018 -- 19,195 17,605
Chief Financial Officer 2001 242,692 28,513 -- 19,287 35,767
Paul A. Schuster 2003 $295,192 $258,000 -- 25,192 $20,006
Executive Vice President, U.S. 2002 273,462 223,000 -- 20,762 15,956
Operations 2001 257,308 45,299 -- 18,029 32,259
Graham Watson 2003 $250,000 $533,618 -- 45,495 $5,975
EVP, International and Chief 2002 232,692 416,349 -- 17,236 4,331
Marketing Officer - RGA; 2001 218,769 241,788 -- 17,778 4,274
CEO, RGA International Corp.
Andre St-Amour (6) 2003 $157,500 $27,563 -- 28,857 $5,975
Retired former EVP - RGA; 2002 312,692 236,274 -- 23,504 4,331
President, RGA Life 2001 290,769 62,298 -- 20,126 4,274
Reinsurance Company of Canada
--------
(1) For Messrs. Woodring, Atkinson, Lay 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
(MIP), which bonus totaled
13
$728,000 for Mr. Woodring, $351,653 for Mr. Atkinson, $186,000 for Mr. Lay,
$180,000 for Mr. Schuster, $150,000 for Mr. Watson, and $27,563 for Mr.
St-Amour for 2003. 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, Lay and Schuster, which totaled $3,000
for 2003 and 2002, and $531 for 2001. The amounts shown for Mr. Watson
for 2003, 2002, and 2001 also include: (i) a Canadian production bonus
of $300,366, $258,797, and $201,903, respectively (see "Executive
Compensation - Other Employment Arrangements"); and (ii) $20,739,
$16,538, and $3,337, respectively, paid in lieu of an award under the
RGA Re Profit Sharing Plan, in which Mr. Watson is not eligible to
participate.
(3) Includes, in 2003, 2002, and 2001, the value of the following number of
performance shares granted in February 2004, March 2003, and February
2002, respectively, pursuant to the Executive Performance Share Plan
based on the closing price of the Company's Common Stock on the date of
award: Mr. Woodring - 6,974, 7,946, and 1,969 performance shares; Mr.
Atkinson - 2,628, 3,235, and 776 performance shares; Mr. Lay - 1,930,
2,093, and 431 performance shares; Mr. Schuster - 1,868, 1,951, and 466
performance shares; Mr. Watson - 1,557, 1,667, and 387 performance
shares; and Mr. St-Amour - 0, 2,682 and 633 performance shares. See
"Executive Compensation - Option/Performance Share Grants in Last
Fiscal Year."
(4) See "Executive Compensation - Option/Performance Share Grants in Last
Fiscal Year."
(5) For Messrs. Woodring, Atkinson, Lay, and Schuster, amounts represent
contributions made by RGA Re in 2003, 2002, and 2001 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. Watson and St-Amour represent contributions
made to their accounts by RGA Canada under its Retirement Plan.
(6) Mr. St-Amour retired on June 30, 2003. On July 18, 2003, Mr. St-Amour
was elected Chairman of the Board of RGA Life Reinsurance Company of
Canada
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 2003.
OPTION/PERFORMANCE SHARE GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------
POTENTIAL REALIZABLE VALUE
--------------------------
NUMBER OF SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES
-------------------- ---------- -----------------------
UNDERLYING OPTIONS & GRANTED TO EXERCISE OR OF STOCK PRICE APPRECIATION
-------------------- ---------- ----------- ---------------------------
PERFORMANCE SHARES EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM(4)
------------------ ------------ ---------- ---------- ------------------
NAME GRANTED (#)(1)(2) FISCAL YEAR ($/SH)(3) DATE 5%($) 10%($)
---- ----------------- ----------- --------- ---- ----- ------
A. Greig Woodring 82,081 options 11.3% $27.29 1/29/2013 $1,408,718 $3,569,968
6,974 performance shares 17.4% $40.15 N/A $176,094 $446,258
David B. Atkinson 34,811 options 4.8% $27.29 1/29/2013 $597,445 $1,514,043
2,628 performance shares 6.6% $40.15 N/A $66,357 $168,162
Jack B. Lay 27,025 options 3.7% $27.29 1/29/2013 $463,817 $1,175,405
1,930 performance shares 4.8% $40.15 N/A $48,733 $123,498
Paul A. Schuster 25,192 options 3.5% $27.29 1/29/2013 $432,359 $1,095,681
1,868 performance shares 4.7% $40.15 N/A $47,167 $119,531
Graham Watson 45,495 options 6.3% $27.29 1/29/2013 $780,810 $1,978,725
1,557 performance shares 3.9% $40.15 N/A $39,314 $99,630
Andre St-Amour 28,857 options 4.0% $27.29 1/29/2013 $495,259 $1,255,084
0 performance shares N/A N/A N/A N/A N/A
--------
(1) The options become exercisable in 20% increments on each of January 1,
2004, 2005, 2006, 2007 and 2008. 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
2003.
(2) Performance share grants shown were approved in February 2004, but are
included as 2003 grants because they comprise a part of the officers'
2003 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
14
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 granted to
Messrs. Woodring, Atkinson, Lay and Schuster vest in one-third
increments on each of December 31, 2004, 2005 and 2006, and performance
shares awarded to Mr. Watson, who is a Canadian citizen, vest in full
on December 15, 2006. 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.
(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 2003. For performance shares, amount
represents the closing price of the Common Stock on the date of grant
in February 2004.
(4) The dollar amounts under these columns are the result of calculations
at the 5% and 10% rates set by the SEC and therefore are not intended
to forecast possible future appreciation, if any, of the Company's
stock price.
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 and performance shares
during 2003 and the value of unexercised options and performance shares at
December 31, 2003.
AGGREGATED OPTION/PERFORMANCE SHARE EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/PERFORMANCE SHARE VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS &
SHARES ACQUIRED ON VALUE OPTIONS & PERFORMANCE SHARES PERFORMANCE SHARES
------------------ ------ AT DECEMBER 31, 2003(1) AT DECEMBER 31, 2003(2)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------
A. Greig Woodring 96,534 options $1,621,378 159,732 / 203,383 options $1,917,825 / $1,986,823
11,101 performance shares $325,902 3,743 / 12,935 performance shares $144,667 / $499,938
David B. Atkinson 121,680 options $1,731,305 85,696 / 90,163 options $1,040,332 / $894,635
14,376 performance shares $519,243 2,140 / 5,045 performance shares $82,711 / $194,989
Jack B. Lay 0 options $0 53,010 / 63,613 options $645,645 / $635,636
0 performance shares $0 2,149 / 3,471 performance shares $83,059 / $134,154
Paul A. Schuster 27,513 options $172,437 46,094 / 61,397 options $534,128 / $605,415
0 performance shares $0 5,187 / 3,326 performance shares $200,478 / $128,550
Graham Watson 0 options $0 62,182 / 79,110 options $783,569 / $818,438
278 performance shares $10,273 0 / 3,615 performance shares $0 / $139,720
Andre St-Amour (3) 61,200 options $489,541 0 / 0 options $0 / $0
315 performance shares $11,649 0 / 3,321 performance shares $0 / $128,357
--------
(1) The Company granted stock options to senior management, including each
of the named executive officers, in January 2004. The 2004 option
grants, 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."
(2) In the case of stock options, represents the difference between the
December 31, 2003 closing price of the Company's Common Stock ($38.65)
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, 2003 closing price multiplied by the number
of performance shares.
(3) The information in the table for Mr. St-Amour reflects only those
options and performance shares exercised prior to his retirement June
30, 2003. In accordance with the terms of his option grants, the
options would be forfeited unless exercised within 90 days after
retirement. Following his retirement, Mr. St-Amour exercised his
remaining vested options and did not hold any options at year-end.
RETIREMENT PLANS
Certain of the Company's employees participate in the RGA
Performance Pension Plan (the "Pension Plan"), a qualified defined benefit
plan. Certain of the Company's employees also participate in the RGA
Reinsurance Company Augmented Benefit Plan (the "RGA Augmented Plan"), a
non-qualified plan under which eligible employees are entitled to additional
retirement benefits not paid under the
15
Pension Plan and the RGA Profit Sharing Plan due to Internal Revenue Code
limits on the amount of benefits that may accrue and be paid under the
Pension Plan and the RGA Profit Sharing Plan.
Messrs. Woodring, Atkinson, Lay and Schuster participate in the
Pension Plan and the RGA Augmented Plan. The monthly benefit payable for
life at age 65 for each individual is the sum of (a) and (b) below:
(a) The sum of (1) 1.05% of Final Average Monthly Compensation
multiplied by the number of years of service earned as of December
31, 1995, plus (2) .65% of the excess, if any, of Final Average
Monthly Compensation minus one-twelfth of the Social Security
Maximum Wage Average, multiplied by the number of years of service
earned as of December 31, 1995; plus
(b) The actuarial equivalent of a lump sum benefit equal
to the sum of the amounts determined below for each full year of
service completed after December 31, 1995:
Age on January 1 of the Plan Year in Percentage of Final Average Percentage of Excess
Which the Year of Service is Earned Annual Compensation Credited Compensation Credited
Up to 35 2% 1%
35 - 44 4% 2%
45 - 54 6% 3%
55 or over 8% 4%
Social Security Maximum Wage Average means the average of the
Social Security Wage Bases in effect for each calendar year during the
35-year period ending with the calendar year in which a participant attains
the Social Security retirement age. Social Security Wage Base means the
maximum amount of compensation that may be considered wages for FICA tax, or
$87,000 for 2003. Breakpoint means 60% of the Social Security Wage Base
raised to the next highest $100 increment. Excess Compensation means the
excess, if any, of Final Average Annual Compensation minus the Breakpoint.
Final Average Annual Compensation means the highest average Benefit Salary
for the five consecutive years during the preceding ten years. Benefit
Salary means actual base salary, eligible bonuses and pre-tax salary
deferrals made to the profit sharing plan or a cafeteria plan and the CODA
portion of the profit sharing award. Final Average Monthly Compensation is
one-twelfth of Final Average Annual Compensation.
As of December 31, 2003, the estimated annual benefits payable upon
retirement at normal retirement age of 65 for Messrs. Woodring, Atkinson,
Lay and Schuster are as follows: Mr. Woodring, $282,855; Mr. Atkinson,
$98,530; Mr. Lay, $46,927, and Mr. Schuster, $44,824. Messrs. St-Amour and
Mr. Watson are not eligible to participate in the Pension Plan or the RGA
Augmented Plan. Mr. St-Amour (until his retirement) and Mr. Watson
participate in pension plans sponsored by the governments of Quebec and
Canada, respectively.
Payment of the specified retirement benefits is contingent upon
continuation of the plans in their present form until the officer retires.
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. The frozen annual
benefit payable upon retirement at age 65 is $36,719 for Mr. Woodring and
$7,770 for Mr. Atkinson. Retirement benefits under the RGA Supplemental Plan
are payable at age 65 in the form of a 15-year certain life annuity, with no
direct or indirect integration with Social Security benefits.
16
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. See "Executive Compensation - Summary Compensation
Table."
PERFORMANCE GRAPH
Set forth below is a graph for the Company's Common Stock for the
period beginning December 31, 1998 and ending December 31, 2003. 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 LIFE & HEALTH INSURANCE INDEX
[GRAPH]
*$100 invested on December 31, 1998 in stock or index-including reinvestment
of dividends. Fiscal year ending December 31.
17
Cumulative Total Return
------------------------------------------------------------------------------
12/98 12/99 12/00 12/01 12/02 12/03
----- ----- ----- ----- ----- -----
Reinsurance Group Of America,
Incorporated 100.00 59.79 77.15 72.83 59.75 85.90
S & P 500 100.00 121.04 110.02 96.95 75.52 97.18
S & P Life & Health Insurance 100.00 85.97 97.84 90.28 75.63 96.12
Copyright(C)2002, Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. All rights reserved.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2003 the Compensation Committee was comprised of
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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MetLife and its subsidiaries, including GenAmerica and General
American, are the beneficial owners of approximately 52% of the Company's
outstanding stock. Messrs. Nagler and Launer, and Ms. Weber, are executive
officers of MetLife. General American and MetLife have historically provided
RGA and RGA Re with certain limited administrative services, such as legal,
corporate risk management and corporate travel services. The cost of these
services in 2003 was approximately $1.0 million.
The Company has direct policies and reinsurance agreements with
MetLife and certain of its subsidiaries. The Company reflected net premiums
pursuant to these agreements of approximately $157.9 million in 2003. The
net premiums reflect the net of business assumed from and ceded to MetLife
and its subsidiaries.
RGA Re has a product license and service agreement with MetLife.
Under this agreement, RGA has licensed the use of its electronic
underwriting product to MetLife and provides Internet hosting services,
installation and modification services for the product. Payments under this
agreement from MetLife in 2003 were approximately $3.2 million.
Effective January 1, 1997, General American entered into an
Administrative Services Agreement with RGA Re whereby General American
provides services necessary to handle the policy and treaty administration
functions for certain bank owned life insurance (BOLI) policies. RGA Re paid
General American $400,000 under the agreement in 2003.
On November 13, 2003, MetLife and certain of its affiliates
completed the purchase of 3,000,000 shares of Common Stock having a total
purchase price of $109,950,000 in connection with an underwritten public
offering of 12, 075,000 shares of Common Stock by the Company at a public
offering price of $36.65 per share. The Company received gross proceeds of
$427,575,000, net of underwriting discounts but excluding other offering
expenses.
On November 24, 2003, the Company, MetLife, Metropolitan Life,
General American and Equity Intermediary Company entered into a registration
rights agreement, which supersedes existing agreements with General American
and Equity Intermediary Company. Under the terms of this agreement, until
such time as MetLife and its affiliates (other than directors and officers
of MetLife and its affiliates and certain fiduciary accounts) and their
permitted transferees no longer own in excess of 5% of the Company's
outstanding shares of common stock, if the Company proposes to register any
of its securities under the
18
Securities Act of 1933, as amended (the "Securities Act"), for its own
account or the account of any of its shareholders, then MetLife and its
affiliates (other than directors and officers of MetLife and its affiliates
and certain fiduciary accounts), or their respective transferees, are
entitled, subject to certain limitations and conditions, to notice of such
registration and are entitled, subject to certain conditions and
limitations, to include registrable shares therein, including shares
currently owned by them and shares acquired by them in the future. The
underwriters of any such offering have the right to limit the number of
shares to be included in such registration and, to the extent that it does
not exercise its "piggyback" rights in connection with a future public
offering of the Company's common stock, or of securities convertible into or
exchangeable or exercisable for such common stock, MetLife has agreed to
enter into customary lock-up agreements for a period from the two days prior
to and 180 days following the effective date of such registration, upon the
reasonable request of the managing underwriters of such offering and subject
to certain exceptions.
In addition, until such time as MetLife, its affiliates (other than
directors and officers of MetLife and its affiliates) and its permitted
transferees no longer own 10% of the Company's common stock and can sell all
of their shares pursuant to an available exemption from registration, the
Company may be required, at its expense, to prepare and file a registration
statement under the Securities Act if it is requested to do so by MetLife
within 30 days of such request. The Company is required to use its
reasonable best efforts to cause such registration to become effective and
to keep such registration statement effective until the shares included in
such registration have been sold, subject to certain conditions and
limitations. The Company may suspend a registration for up to 30 days once,
or may request that MetLife similarly suspend its sales under an effective
shelf registration up to two times in any two-year period, under certain
conditions. The Company has agreed not to sell any shares of its common
stock, or any securities convertible into or exchangeable or exercisable for
its common stock, from the two days prior to and 180 days following the
effective date of any such underwritten demand registration, subject to the
discretion of the managing underwriter of such future offering. The Company
is not obligated to effect more than six such demand registrations.
EQUITY COMPENSATION PLAN INFORMATION
The following table presents Equity Compensation Plan information
as of December 31, 2003:
--------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES TO BE
ISSUED UPON WEIGHTED-AVERAGE
EXERCISE OF EXERCISE PRICE OF NUMBER OF SECURITIES
OUTSTANDING OUTSTANDING REMAINING AVAILABLE FOR
OPTIONS, WARRANTS OPTIONS, WARRANTS ISSUANCE UNDER EQUITY
AND RIGHTS AND RIGHTS COMPENSATION PLANS
PLAN CATEGORY (a) (b) (c)
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
EQUITY COMPENSATION PLANS
APPROVED BY SECURITY
HOLDERS 2,718,848(1) $28.34(2) 2,187,625(3)
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
EQUITY COMPENSATION PLANS
NOT APPROVED BY SECURITY
HOLDERS -- -- --
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
TOTAL 2,718,848 $28.34(2)(4) 2,187,625
--------------------------------------------------------------------------------------------------
19
(1) Includes the number of securities to be issued upon exercises under the
following plans: Flexible Stock Plan - 2,607,805; Flexible Stock Plan
for Directors - 86,848; and Phantom Stock Plan for Directors - 24,195.
(2) Does not include the 24,195 phantom units to be issued under the
Phantom Stock Plan for Directors because those securities do not have
an exercise price (i.e., a phantom unit is a hypothetical share of
Common Stock of the Company with a value equal to the fair market value
of the Common Stock).
(3) Includes the number of securities remaining available for future
issuance under the following plans: Flexible Stock Plan - 2,015,799;
Flexible Stock Plan for Directors - 119,888; and Phantom Stock Plan for
Directors - 51,938. The Flexible Stock Plan (for employees) includes a
provision that increases the number of authorized shares by five
percent of the number then allocated on January 1 of each year;
however, Item 8 of this proxy statement seeks approval to eliminate
that provision from the Plan.
(4) Reflects the blended weighted-average exercise price of outstanding
options under the Flexible Stock Plan ($28.26) and Flexible Stock Plan
for Directors ($30.67).
ITEM 2 - AMENDMENT TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The second item to be acted upon at the Annual Meeting is a proposal
to amend the Company's Second Restated Articles of Incorporation to increase
the number of authorized shares of common stock from 75,000,000 shares to
140,000,000 shares. Pursuant to this proposal, Section A of Article Three of
the Company's Second Restated Articles of Incorporation will be amended in
its entirety to read as follows:
A. Class and Number of Shares. The aggregate number, class and par
--------------------------
value, if any, of shares which the Corporation shall have authority
to issue is 150,000,000 shares, consisting of 140,000,000 shares of
Common Stock, par value $.01 per share, and 10,000,000 shares of
Preferred Stock, par value $.01 per share ($1,500,000.00 aggregate
total).
As of February 1, 2004, the Company had 63,128,273 shares of common
stock issued, 62,173,471 of which were outstanding, and 8,323,253 shares of
common stock issuable upon exercise of outstanding options under the
Company's equity incentive plans and warrants issued in connection with the
Company's Preferred Income Equity Redeemable Securities Units. No shares of
preferred stock are outstanding, and there are no present plans for the
issuance of any such shares. While the Company currently does not have any
plans to issue additional common stock, other than pursuant to its equity
incentive plans or upon the exercise of the warrants currently outstanding,
the Board of Directors considers the proposed increase in the number of
authorized shares of common stock desirable as it would give the Company
flexibility to issue common stock in connection with possible future stock
dividends and splits, acquisitions, financings, employee benefits and for
other general corporate purposes. Without an increase in the number of
authorized shares of common stock, the number of shares available for
issuance may be insufficient to consummate one or more of the above
transactions.
Approving an increase in the number of shares of common stock
available for issuance will enable the Company to take advantage of market
conditions and favorable opportunities at the time one of the transactions
described above occurs, without the expense and delay incidental to holding
a special shareholders meeting to obtain shareholder approval of an
amendment to the Company's Second Restated Articles of Incorporation. As a
result, the Board of Directors is proposing an amendment to the Second
Restated Articles of Incorporation to increase the number of shares of
common stock available for issuance from 75,000,000 to 140,000,000.
Authorized but unissued common stock may be issued from time to time for any
purpose without further action of the shareholders, except as may be
required by applicable law or the listing requirements of the NYSE, on which
the common stock is listed. The Company currently has no plans to issue the
newly authorized shares of common stock.
Each additional share of common stock authorized by the amendment to
the Second Restated Articles of Incorporation described in this proposal
would have the same rights and privileges as, and will be identical in all
respects with, each share of common stock currently authorized. The newly
authorized shares of common stock will not affect the rights, such as voting
and liquidation rights, of the shares of common stock currently outstanding.
Holders of common stock have no preemptive rights to purchase or subscribe
for any stock or other securities.
20
An increase in the authorized shares of stock could, under certain
circumstances, have an anti-takeover effect by, for example, allowing
issuance of stock that would dilute the stock ownership of a person seeking
to effect a change in the composition of the Board of Directors or
contemplating a tender offer or other transaction for the combination of the
Company with another company. However, this proposal to amend the Second
Restated Articles of Incorporation is not in response to any effort of which
the Company is aware to accumulate the Company's stock or obtain control of
the Company, nor is it a part of a plan by management to recommend a series
of similar amendments to the Board of Directors and shareholders. Except for
the amendment contemplated by Item 5, the Board of Directors does not
presently contemplate recommending the adoption of any other amendments to
the Second Restated Articles of Incorporation which could be construed to
affect the ability of third parties to take over or change control of the
Company.
If the amendment to the Second Restated Articles of Incorporation is
approved by the shareholders of the Company, the Board of Directors intends
to prepare and file Articles of Amendment to the Second Restated Articles of
Incorporation in accordance with the amendment, which will become effective
immediately upon acceptance of the filing by the Secretary of State of
Missouri.
VOTE REQUIRED
The vote required to approve this Item 2 is a majority of the
outstanding common stock entitled to vote. As a holder of common stock,
MetLife is entitled to vote on this proposal. MetLife beneficially owns and
has shared voting power with respect to approximately 52% of the Company's
outstanding shares. MetLife has informed the Company that it intends to vote
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 amendment to the Second
Restated Articles of Incorporation and recommends that shareholders vote FOR
the proposal.
ITEMS 3, 4 AND 5 - AMENDMENTS TO THE SECOND RESTATED ARTICLES OF
INCORPORATION TO MAKE CERTAIN CLARIFYING CHANGES
The third, fourth and fifth items to be acted upon at the Annual
Meeting are proposals to amend the Company's Second Restated Articles of
Incorporation to make certain clarifying changes. The proposed amendments
would eliminate references to Non-Voting Common Stock; clarify the current
number of directors which constitute the Board of Directors; and eliminate
from the Second Restated Articles of Incorporation the shareholder
nomination and proposal requirements which the Company would thereupon
further amend and include in the Company's Bylaws.
Attached as Exhibit B to this proxy statement is a copy of the
Company's Second Restated Articles of Incorporation showing the amendments
proposed for approval by the shareholders as described in these Items 3, 4
and 5, as well as the amendments proposed in Item 2 and Item 6.
ITEM 3: AMENDMENT TO ARTICLE THREE OF THE SECOND RESTATED ARTICLES OF
INCORPORATION
The primary purpose of the amendment to Article Three is to
eliminate references to non-voting common stock. In 1998, the Company sold
7,417,500 shares of non-voting common stock, after split, which were traded
on the NYSE under the symbol RGA.A. This non-voting class of stock was
subsequently converted into voting common shares at a 0.97 conversion rate
upon shareholder approval at a special meeting held September 14, 1999. As a
result, no shares of non-voting common stock remain authorized for issuance.
Item 3 is a proposal to approve the following resolution approving
an amendment to Article Three of the Company's Second Restated Articles of
Incorporation which will be offered at the meeting:
21
RESOLVED, that Section D of Article Three to the Second
Restated Articles of Incorporation be deleted in its entirety and
that Section E of Article Six be renumbered accordingly.
ITEM 4: AMENDMENT TO SECTION A OF ARTICLE SIX OF THE SECOND RESTATED ARTICLES
OF INCORPORATION
The purpose of the amendment to Section A of Article Six is to
update the number of directors of the Company. The Second Restated Articles
of Incorporation set the number of directors on the Board of Directors at
nine. Pursuant to the Company's Bylaws, the number of directors on the Board
of Directors has been changed from the date on which the Second Restated
Articles of Incorporation was filed with the Secretary of State of Missouri,
and the number is currently set at ten.
Item 4 is a proposal to approve the following resolutions approving
an amendment to Article Six of the Company's Second Restated Articles of
Incorporation which will be offered at the meeting:
RESOLVED, that the first sentence of Section A of Article
Six be deleted in its entirety and replaced with the following:
"The number of directors to constitute the Board of Directors of
the Corporation is ten."
ITEM 5: AMENDMENTS TO SECTION C OF ARTICLE SIX AND SECTION B OF ARTICLE NINE
OF THE SECOND RESTATED ARTICLES OF INCORPORATION
The changes to Section C of Article Six and Section B of Article
Nine are intended to eliminate the shareholder nomination and proposal
requirements that the Company plans to further amend and include in the
Company's Bylaws. Among other things, Section C of Article Six specifies the
process by which shareholders may nominate persons for the election as a
director and the information that must be provided by shareholders in
connection with a nomination. Similarly, Section B of Article Nine specifies
the process by which shareholders may make proposals to be considered at the
Company's annual meeting of shareholders. Section C of Article Six and
Section B of Article Nine currently specifies that, in order for a
shareholder to nominate a person for the election as a director or for a
shareholder proposal to be properly brought before the annual meeting, the
shareholder must provide the Company with timely notice. Under the Company's
Second Restated Articles of Incorporation, notice is considered timely for
purposes of shareholder nominations and proposals only if received by the
Company not less than 60 nor more than 90 days prior to the Company's next
annual meeting.
If Item 5 is approved, the Company plans to amend its Bylaws to,
among other things, include the shareholder nomination and proposal
requirements. Under the amended Bylaws, in order for a shareholder to
nominate a candidate for director, timely notice of the nomination must be
given to and received by the Company in advance of the meeting. Ordinarily,
such notice must be given and received not less than 90 nor more than 120
days before the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, then such notice must be given by the shareholder and
received by the Company not earlier than 120 days prior to such annual
meeting and not later than the close of business on the later of the 90th
day prior to such annual meeting or the 10th day following the day on which
public announcement of such meeting is first made. In certain cases, notice
may be delivered and received later if the number of directors to be elected
to the Board of Directors is increased. Under the amended Bylaws, the
shareholder submitting the notice of nomination must describe various
matters, including the name, age and business and residential addresses of
each proposed nominee, his or her occupation, number of shares held, a
description of any arrangements or understandings between the shareholder
and the proposed nominee and certain other information.
In order for a shareholder to bring other business before a
shareholder meeting, timely notice must be given to and received by the
Company within the time limits described above. Such notice must include a
description of the proposed business (which must otherwise be a proper
subject for action by the
22
shareholders), the reasons therefor and other matters which will be
specified in the Company's amended Bylaws. The Board of Directors or the
presiding officer at the 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.
In the case of special meetings of shareholders, only such business
will be conducted, and only such proposals will be acted upon, as are
brought pursuant to the Company's notice of meeting. Nominations for
election to the Board of Directors may be made by any shareholder who
complies with the notice and other requirements of the amended Bylaws.
In the event the Company calls a special meeting of shareholders to
elect one or more directors, any shareholder may nominate a candidate, if
such notice from such shareholder is given and received not earlier than 120
days prior to such special meeting and not later than the close of business
on the later of the 90th day prior to such special meeting or the 10th day
following the day on which public announcement of such meeting and/or of the
nominees proposed by the Company is first made. The notice from such
shareholder must also include the same information described above.
Proposals of other business may be considered at a special meeting requested
in accordance with the amended Bylaws only if the requesting shareholders
give and the Company receives a notice containing the same information as
required for an annual meeting at the time the meeting is requested.
The time limits described above also apply in determining whether
notice is timely for purposes of Rule 14a-4(c)(1) under the Exchange Act
relating to exercise of discretionary voting authority, and are separate
from and in addition to the SEC's requirements that a shareholder must meet
to have a proposal included in the Company's proxy statement for an annual
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.
As proposed, the shareholder and proposal requirements to be
included in the Company's Bylaws will, among other things, provide that
notice will be considered timely if received by the Company not less than 90
nor more than 120 days prior to the Company's next annual meeting and to
include these requirements. The Company believes the shareholder nomination
and proposal requirements are more appropriately addressed in its Bylaws,
which can be amended by the Board of Directors without the delay and expense
associated with seeking shareholder approval. Additionally, the Company
believes that the changes to the notice provisions discussed above are
consistent with the existing proxy rules of the SEC.
Future changes in the notice requirements for shareholder
nominations and proposals could, under certain circumstances, have an
anti-takeover effect by, for example, making it more difficult for a person
seeking to effect a change in the composition of the Board of Directors.
However, this proposal to amend the Second Restated Articles of
Incorporation is not in response to any effort of which the Company is aware
to obtain control of the Company, nor is it a part of a plan by management
to recommend a series of similar amendments to the Board of Directors and
shareholders. Except for the amendment contemplated by Item 2, the Board of
Directors does not presently contemplate recommending the adoption of any
other amendments to the Second Restated Articles of Incorporation which
could be construed to affect the ability of third parties to take over or
change control of the Company.
Item 5 is a proposal to approve the following resolutions approving
amendments to Section C of Article Six and Section B of Article Nine of the
Company's Second Restated Articles of Incorporation which will be offered at
the meeting:
RESOLVED, FURTHER, that Section C of Article Six be
deleted in its entirety and that Section D of Article Six be
renumbered accordingly; and
RESOLVED, FURTHER, that Section B of Article Nine be
deleted in its entirety and replaced with the following:
23
"B. Annual Meetings. At any annual meetings of shareholders only
---------------
such business shall be conducted, and only such proposals shall be
acted upon, as shall have been properly brought before the meeting
pursuant to the Bylaws of the Corporation."
If the amendments to the Second Restated Articles of Incorporation
are approved by the shareholders of the Company, the Board of Directors
intends to prepare and file Articles of Amendment to the Second Restated
Articles of Incorporation in accordance with the amendment, which will
become effective immediately upon acceptance of the filing by the Secretary
of State of Missouri.
VOTE REQUIRED
The vote required to approve Item 3 is a majority of the
outstanding common stock entitled to vote. The vote required to approve
Items 4 and 5 is 85% of the common stock entitled to vote. As a holder of
common stock, MetLife is entitled to vote on these proposals. MetLife
beneficially owns and has shared voting power with respect to approximately
52% of the Company's outstanding shares. MetLife has informed the Company
that it intends to vote for these Items 3, 4 and 5; therefore, approval of
Item 3 by the shareholders is assured.
RECOMMENDATION OF THE BOARD
The Board of Directors has approved the amendments to the Second
Restated Articles of Incorporation and recommends that shareholders vote FOR
the proposals.
ITEM 6 - AMENDMENT TO THE SECOND RESTATED ARTICLES OF INCORPORATION
TO LIMIT THE LIABILITY OF DIRECTORS
The sixth item to be acted upon at the Annual Meeting is a proposal
to amend the Company's Second Restated Articles of Incorporation to add a
provision concerning the liability of directors authorized by the Missouri
General and Business Corporations Law. The proposed provision would limit
the personal liability of directors for monetary damages under the
circumstances permitted by the law.
BACKGROUND
Since the 1980s, there has been a significant increase in claims,
suits and other proceedings seeking to impose liability on directors of
publicly held corporations. At the outset of this period, there was a
decrease in the availability of directors and officers liability insurance
to protect against such liability as well as reductions in the scope of such
insurance coverage. While this market has since stabilized and improved, in
any event, the cost of such coverage can be high. In recruiting new
directors, there is a concern that qualified persons might be reluctant to
serve as directors because of the liability exposure and the risk of
substantial personal expense incurred in defending lawsuits, many of which
are without merit but which are typically costly to defend. In view of the
costs and uncertainties of litigation in general, it is often deemed prudent
to settle such proceedings in which claims against a director are made.
Settlement amounts, even if immaterial to the corporation involved and minor
compared to the enormous amounts frequently claimed, often easily exceed the
personal assets of most individual director defendants. As a result, an
individual director might rationally conclude that potential exposure to the
costs and risks of proceedings in which he or she may become involved
outweighs any benefit from serving as a director of a public corporation.
This is particularly true for directors who are not also officers or
employees of the corporation concerned.
The Missouri legislature in 2000 adopted a statute, R.S.Mo. Section
351.055(9), allowing a Missouri corporation, such as the Company, with
shareholder approval, to amend its Articles of Incorporation to eliminate or
limit the personal liability of directors to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a
director. However, under the law no such provision may eliminate or limit
the liability of a director (a) for any breach of the director's duty of
24
loyalty to the corporation or its shareholders, (b) for acts or omissions
not in subjective good faith or which involve intentional misconduct or a
knowing violation of law, (c) pursuant to provisions of the law which make
directors personally liable for unlawful dividends, or (d) for any
transaction from which the director derived an improper personal benefit.
REASONS FOR THE PROPOSAL
Although the Company believes it has been able to recruit and
retain qualified directors, the Board of Directors believes all appropriate
steps should be taken to protect directors against personal liability so
that qualified persons will continue to be willing to serve as directors of
the Company. Also, the Board of Directors believes that directors can best
exercise their business judgment in the interests of the Company if that
judgment does not subject their personal assets to claims simply because
others, with the benefit of hindsight, disagree with the directors' business
judgment.
Accordingly, the Board of Directors is seeking shareholder approval
to amend the Company's Second Restated Articles of Incorporation to add a
new Article Thirteen that would eliminate directors' liability to the
fullest extent permitted by Missouri law. The Company's directors are
already indemnified to the fullest extent permitted by law pursuant to the
Company's Second Restated Articles of Incorporation and Bylaws. By so
limiting director liability, new Article Thirteen will supplement existing
indemnification rights of directors under the Company's Second Restated
Articles of Incorporation and Bylaws.
The Company believes that new Article Thirteen will be effective to
limit the financial liability of directors for certain breaches of their
duties as directors. However, Article Thirteen would not change the duties
of a director. Thus, Article Thirteen would have no effect on the
availability of equitable remedies such as injunction or rescission based
upon a director's breach of his or her duties. Also, new Article Thirteen
will only affect the monetary liability of directors to the Company and its
shareholders.
Moreover, liabilities which may arise out of director conduct
occurring prior to the adoption of new Article Thirteen would not be
affected. In addition, Article Thirteen would apply only to claims against
directors arising out of that person's role as a director, and would not
apply (if such person is also an officer) to liabilities arising out of that
person's role as an officer or in any other capacity other than as a
director.
New Article Thirteen is intended to provide the Company's directors
with the maximum protection afforded by Missouri law. Thus, if future
changes in the law permit further limitation of a director's liability, such
changes would become automatically effective under Article Thirteen.
The Company has not received any notice of any claim or proceeding
to which the new Article Thirteen might apply. In fact, no such action has
ever been brought against a director. In addition, the amendment is not
being proposed in response to any specific resignation, threat of
resignation or refusal to serve by any director or potential director.
The Board of Directors and management recognize that if the
proposed amendment is adopted, its principal effect would be that the
shareholders of the Company will be giving up potential future rights of
action against directors for some breaches of duty. It should be noted that
the Board of Directors has a personal interest in having the shareholders
approve the proposed amendment, to the potential detriment of the Company
and its shareholders. However, given the potential liabilities which face
the directors of publicly held corporations, the Board of Directors believes
that the proposed amendment is in the best interests of the Company and its
shareholders since it should protect the Company's ability to continue to
attract and retain qualified directors and will reduce the Company's
monetary exposure under its indemnification obligations to directors.
25
AMENDMENT TO THE SECOND RESTATED ARTICLES OF INCORPORATION
Accordingly, the following resolution will be offered at the
meeting:
RESOLVED, that a new Article Thirteen be added to the
Restated Articles of Incorporation of the Company, as follows:
"ARTICLE THIRTEEN
EXCULPATION
The liability of the Corporation's directors to the
Corporation or any of its shareholders for monetary damages for
breach of fiduciary duty as a director shall be eliminated to the
fullest extent permitted under the Missouri General and Business
Corporation Law. Any repeal or modification of this Article
Thirteen by the shareholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification with respect to
acts or omissions occurring prior to such repeal or modification."
If the amendment to the Second Restated Articles of Incorporation
is approved by the shareholders of the Company, the Board of Directors
intends to prepare and file Articles of Amendment to the Second Restated
Articles of Incorporation in accordance with the amendment, which will
become effective immediately upon acceptance of the filing by the Secretary
of State of Missouri.
VOTE REQUIRED
The vote required to approve this Item 6 is a majority of the
outstanding common stock entitled to vote. As a holder of common stock,
MetLife is entitled to vote on this proposal. MetLife beneficially owns and
has shared voting power with respect to approximately 52% of the Company's
outstanding shares. MetLife has informed the Company that it intends to vote
for this Item 6; therefore, approval of this Item 6 by the shareholders is
assured.
RECOMMENDATION OF THE BOARD
The Board of Directors has approved the amendment to the Second
Restated Articles of Incorporation and recommends that shareholders vote FOR
the proposal.
ITEM 7 - SALE OF SECURITIES TO METLIFE OR ITS AFFILIATES
The seventh 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,
purchase contracts, units, convertible debt, or other securities convertible
into or exercisable for common stock or preferred stock ("Equity
Securities"), from time to time to MetLife 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 all or a part of its
relative ownership percentage in the Company if it so desired. 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 52% of the total common stock).
26
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 the issuance of up to $800 million of Equity Securities which has
become effective. In November 2003, the Company completed the offering of
approximately $427,575,000 (net of underwriters discount), or 12,075,000
shares, of common stock pursuant to this registration statement, of which
MetLife and its affiliates purchased $109,950,000, or 3,000,000 shares, of
common stock. 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 of February 1, 2004, the Company's authorized capital stock
consists of 75,000,000 shares of common stock and 10,000,000 shares of
preferred stock. If the shareholders approve the amendment to the Company's
Second Restated Articles of Incorporation at the Annual Meeting, the
Company's authorized capital stock will consist of 140,000,000 shares of
common stock and 10,000,000 shares of preferred stock. See "Item 1 -
Amendment to Articles of Incorporation." 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 represent
an interest in shares of a series of preferred stock deposited under a
deposit agreement by 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 purchase contracts, units, 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. Although the Board of Directors has not committed
to issue any Equity Securities to MetLife, 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.
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 based 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.
27
Key Employees. Maintenance of control by MetLife may allow key
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. The Company may be better able to attract joint venture and
marketing partners if 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 is 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 this Item 7 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 be 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 a
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 7 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 7. Such a committee will include directors who are
not affiliated with MetLife.
28
Shareholders should note that the pricing of preferred stock,
depository shares, purchase contracts, units, 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 purchase contracts, units or 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 to MetLife, it cannot identify the uses of any
proceeds from any sale of such shares. 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, purchase
contracts, units, 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.
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 differs from those of other shareholders. For
more information regarding the relationships between the Company and
MetLife, see "Certain Relationships and Related Party Transactions."
29
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 7 is a majority of the
outstanding common stock represented in person or by proxy at the Annual
Meeting and entitled to vote. Under the NYSE rules, the matter must also
receive the affirmative vote of a majority of the votes cast on the matter,
provided that the total votes cast represent more than 50% of the shares
entitled to vote. As a holder of common stock, MetLife is entitled to vote
on this proposal. MetLife beneficially owns and has shared voting power with
respect to approximately 52% of the Company's outstanding shares. MetLife
has informed the Company that it intends to vote for this Item 7; therefore,
approval of this Item 7 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.
ITEM 8 - AMENDMENT TO THE FLEXIBLE STOCK PLAN
The eighth item to be acted upon at the Annual Meeting is a
proposal to approve an amendment to the Company's Flexible Stock Plan
("Plan") to eliminate the "evergreen" provision in the Plan that provides
for an automatic increase of 5% each year in the total number of authorized
shares available for issuance under the Plan. The NYSE has enacted rules
relating to equity compensation plans that require, among other things, that
"formula plans" have a term of ten years or less. The Plan is considered a
"formula plan" for purposes of the NYSE's rules, however, the Plan does not
have a term of ten years or
30
less. Instead of changing the term of the Plan, the Company decided to amend
the Plan to remove the 5% "evergreen" feature.
The Board of Directors originally adopted the Plan in February 1993
and, on March 31, 1993, the shareholders of the Company approved the Plan.
The Plan was amended and restated effective July 1, 1998. On May 24, 2000
and again on May 28, 2003, the Company's shareholders approved amendments to
the Plan that increased the number of shares under the Plan for which
options, stock appreciation rights, restricted stock, performance shares and
other stock based awards are granted. The proposed amendment to the Plan is
subject to shareholder approval.
The Plan provides for the grant of stock options and other
stock-based awards to officers and key employees of the Company and its
subsidiaries, employees and owners of entities that are not affiliates of
the Company but that have a direct or indirect ownership interest in the
Company or in which the Company has a direct or indirect ownership interest,
individuals who are employed by or owners of client companies or suppliers
of the Company, and individuals who are employed by or owners of companies
that render services to the Company (collectively, the "Participants"). As
of February 1, 2004, approximately 97 employees were eligible to participate
in the Plan, and 228 individuals have received awards under the Plan.
Under the Plan, a maximum of 6,260,077 shares are presently
authorized for issuance from treasury stock or authorized but unissued
shares. As of February 1, 2004, options to purchase 2,607,802 shares of
common stock were granted to Participants and outstanding under the Plan,
1,636,473 shares have been exercised by or awarded to Participants, and
2,015,802 shares are available for future grants. Under the amended Plan,
the total number of shares authorized for issuance will no longer
automatically increase each year by 5% of the number then allocated.
Pursuant to this proposal, Section 3.l of the Plan will be amended in its
entirety to read as follows:
3.1 Number of Shares. The number of Shares which may be issued or
----------------
sold or for which Options, SARs or Performance Shares may be
granted under the Plan shall be 6,260,077 Shares. Such Shares may
be authorized but unissued Shares, Shares held in the treasury, or
both.
Presently, the total number of shares represented by options
granted and outstanding and shares available for future grants (if
ultimately issued) represent approximately 6.8% of the Company's current
shares outstanding. The amendment will not change this percentage.
The principal features of the Plan, as amended, are described
below. This description is subject to and qualified in its entirety by the
full text of the Plan, which was filed as Exhibit 10.12 to the Company's
Form 10-K for the year ended December 31, 2003 (filed with the SEC on March
12, 2004), and incorporated herein by reference. The Form 10-K and exhibits
are available through the Company's website (www.rgare.com) or at the SEC's
website (www.sec.gov).
DESCRIPTION OF THE PLAN
The Plan provides for benefits to be awarded to eligible
Participants in the form of stock options, stock appreciation rights,
restricted stock, performance shares, cash awards and other stock based
awards. If any benefit expires or is terminated, cancelled or forfeited, the
shares covered by such benefit will be added back to the shares available
for use under the Plan.
If the stock of the Company is changed by reason of any stock
dividend, spin-off, split-up, spin-out, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares, then the
number and class of shares available for benefits, the number of shares
subject to any outstanding benefits and the price thereof will be
appropriately adjusted.
31
The Compensation Committee of the Board of Directors administers
the Plan (the "Committee"). As of January 28, 2004, the Committee consists
of four outside directors of the Company. The Committee, by majority action,
is authorized to determine the individuals to whom the benefits will be
granted, the type and amount of such benefits and the terms of the benefit
grants, as well as to interpret the Plan and to make all other
determinations necessary or advisable for the administration of the Plan to
the extent not contrary to the provisions of the Plan. The Committee makes
its determinations under the Plan based upon the recommendations of the
Chief Executive Officer and management of the Company, information made
available to the Committee and the Committee's judgment as to the best
interests of the Company and its shareholders. In certain circumstances, the
Committee may delegate all or any part of its authority under the Plan to
Company employees or another committee.
Under the Plan, the Committee may award: (a) stock options
exercisable into shares of the Company's common stock which may or may not
qualify as incentive stock options within the meaning of Section 422 of the
Internal Revenue Code, as amended; (b) stock appreciation rights; (c)
restricted shares of the Company's common stock; (d) performance shares, (e)
cash awards, and (f) other stock based awards and benefits. As provided in
the Plan, the Committee has complete discretion to determine the type and
number of benefits granted to any Participant and the terms and conditions
that attach to each grant. Such terms and conditions are not necessarily
uniform among different Participants. The receipt by a Participant of one
type of grant under the Plan does not entitle the Participant to receipt of
any other type of grant. Payment for shares of common stock purchased upon
exercise of any option or any other benefit granted under the Plan that
requires payment by a Participant to the Company will be made in cash, or
with the consent of the Committee, by the tender of shares of common stock
having a fair market value equal to the purchase price, or in other
property, rights and credits, to the extent permitted by law, or any
combination of the foregoing.
Stock Options. The Committee may grant stock options, which entitle
the Participant to purchase the Company's common stock at a price
established by the Committee, and that price will not be less than the Fair
Market Value of the Company's common stock on the date of the grant. "Fair
Market Value" means the closing price of shares on the NYSE on a given date.
The Committee determines the term of the stock options, including the times
and conditions under which the options become exercisable. The maximum
number of shares with respect to which incentive stock options are issuable
under the Plan is 150,000 shares. The maximum number of shares with respect
to which options may be granted to any participant in any one-year period
may not exceed 200,000 shares. For purposes of the preceding sentence,
shares of common stock covered by an option that is cancelled will count
against the maximum number of shares that may be granted to any Participant
in any one-year period, and if the exercise price under an option is
reduced, the transaction will be treated as a cancellation of the option and
a grant of a new option.
Stock Appreciation Rights ("SARs"). The Committee may grant SARs,
which gives the Participant a right to receive payment in an amount equal to
the appreciation, if any, in the Fair Market Value of a share from the date
of the grant to the date of its payment. Such payment is made in cash, in
common stock or in any combination of cash and common stock, as the
Committee may determine. The maximum number of SARs that may be granted to
any participant in any one-year period is 15,000. For purposes of the
preceding sentence, any SARs that are cancelled will count against the
maximum number of SARs that may be granted to any Participant in any
one-year period and if the fair market value of a share on which
appreciation under a SAR is calculated is reduced, the transaction will be
treated as a cancellation of the SAR and the grant of a new SAR.
Restricted Stock. The Committee may grant benefits under the Plan
in the form of Restricted Stock. Shares of Restricted Stock are issued and
delivered at the time of the grant but are subject to forfeiture as provided
in the grantee's individual agreement. The grantee is entitled to full
voting and dividend rights with respect to all shares of Restricted Stock
from the date of grant, but cannot transfer such shares until all
restrictions have been satisfied. Grants are made at a per share cost equal
to the par value.
32
Performance Shares. Performance Shares are the right of an
individual to whom a grant of such shares is made to receive shares or cash
equal to the Fair Market Value of such shares at a future date in accordance
with the terms of such grant. Generally, such right is based upon the
attainment of targeted profit and/or performance objectives.
Cash Awards. Cash Awards are benefits payable in cash. The
Committee may grant Cash Awards at such times and in such amounts as it
deems appropriate.
Other Stock Based Awards. An Other Stock Based Award is an award
that is valued in whole or in part by reference to, or is otherwise based
on, Company common stock.
In the event of a "change in control" (as defined below) the
Committee may provide such protection as it deems necessary to maintain a
Participant's rights. The Committee may, among other things, (i) accelerate
the exercise or realization of any benefit, (ii) purchase a benefit upon the
Participant's request for cash equal to the amount which could have been
attained upon the exercise or realization of the benefit had it been
currently exercisable or payable, (iii) adjust the benefit as the Committee
deems appropriate, and (iv) cause the benefit to be assumed by the surviving
corporation. A "change of control" generally means (i) the acquisition,
without the approval of the Board, by any person or entity, other than the
Company and certain related entities, of more than 20% of the outstanding
shares of common stock through a tender offer, exchange offer or otherwise;
(ii) the liquidation or dissolution of the Company following a sale or other
disposition of all or substantially all of its assets; (iii) a merger or
consolidation involving the Company which results in the Company not being
the surviving parent corporation; or (iv) a change in the majority of the
member of the Board of Directors during any two-year period not approved by
at least two-thirds of the Directors who were members at the beginning of
the two-year period.
The Plan will remain in effect until terminated by the Board of
Directors. The Board, in its sole discretion, may terminate the Plan at any
time and from time to time may amend or modify the Plan. However, the Board
may not amend the Plan, without obtaining shareholder approval in a manner
(i) which would cause options which are intended to qualify as incentive
stock options to fail to qualify, (ii) which would cause the Plan to fail to
meet the requirements of Rule 16b-3 of the Exchange Act, or (iii) which
would violate applicable law. No amendment, modification or termination of
the Plan will adversely affect a Participant's right to any benefit granted
under the Plan prior to such amendment or termination.
BENEFITS GRANTED UNDER THE PLAN
Non-qualified stock options and restricted stock are the only forms
of benefits that have been granted under the Plan. The following table
summarizes the options and restricted shares granted for each of the
enumerated categories of individuals from the first grant under the Plan on
May 4, 1993 through December 31, 2003.
33
STOCK OPTIONS AND RESTRICTED STOCK GRANTED AND OUTSTANDING
FLEXIBLE STOCK PLAN
TOTAL OPTIONS
TOTAL OPTIONS WEIGHTED AVG. OUTSTANDING TOTAL RESTRICTED
NAME AND POSITION GRANTED EXERCISE PRICE (AS OF 12/31/03) SHARES GRANTED
-------------------------------- ------------- -------------- ---------------- ----------------
A. Greig Woodring 658,149 $21.80 363,115 15,000
President and CEO
David B. Atkinson 387,539 $18.75 175,859 6,548
Executive Vice President and COO
Jack B. Lay 147,323 $25.11 116,623 6,548
Executive Vice President and CFO
Paul A. Schuster, 197,554 $21.83 107,491 --
Executive Vice President,
U.S. Operations
Graham S. Watson 141,292 $27.31 141,292 --
EVP, International, and Chief
Marketing Officer
Executive Officer Group 1,618,551 $22.14 987,542 28,096
Non-Executive Officer Employee 2,906,281 $23.70 1,620,263 --
Group
Non-Executive Director Group -- -- -- --
Total 4,524,832 $23.14 2,607,805 28,096
On March 1, 2004, the last reported sale price of the Company's
common stock on the NYSE was $40.49.
FEDERAL INCOME TAX CONSEQUENCES
Stock Options. No income will be realized by a Participant on the
grant of a stock option, and the Company will not be entitled to a deduction
at such time. If a Participant exercises an incentive stock option and does
not dispose of the shares acquired within two years from the date of the
grant, or within one year from the date of exercise of the option, no income
will be realized by the Participant at the time of exercise. The Company
will not be entitled to a deduction by reason of the exercise.
If a Participant disposes of the shares acquired pursuant to an
incentive stock option within two years from the date of grant of the option
or within one year from the date of exercise of the option, the Participant
will realize ordinary income at the time of disposition which will equal the
excess, if any, of the lesser of (a) the amount realized on the disposition,
or (b) the Fair Market Value of the shares on the
34
date of exercise, over the Participant's basis in the shares. The Company
generally will be entitled to a deduction in an amount equal to such income
in the year of the disqualifying disposition.
Upon the exercise of a non-qualified option, the excess, if any, of
the Fair Market Value of the stock on the date of exercise over the purchase
price is ordinary income to the holder as of the date of exercise. The
Company generally will be entitled to a deduction equal to such excess
amount in the year of exercise.
SARs. No income will be realized by a Participant upon the grant of
a SAR, and the Company will not be entitled to a deduction at such time.
Upon the exercise of a SAR, the excess, if any, of the Fair Market Value of
the stock on the date of exercise over the Fair Market Value of the stock on
the date of grant is ordinary income to the holder as of the date of
exercise. The Company generally will be entitled to a deduction equal to
such excess amount in the year of exercise.
Restricted Stock. Unless a timely Section 83(b) election is made,
as described in the following paragraph, a Participant generally will not
recognize taxable income upon the grant of restricted stock because the
restricted stock generally will be nontransferable and subject to a
substantial risk of forfeiture. A Participant will recognize ordinary income
when the restrictions that impose a substantial risk of forfeiture of the
shares of common stock or the transfer restrictions (collectively, the
"Restrictions") lapse. The amount recognized will be equal to the difference
between the fair market value of the shares at the time the Restrictions
lapse and the original purchase price paid for the shares, if any. The
ordinary income recognized by a Participant with respect to restricted stock
will be subject to applicable tax withholding by the Company. If a timely
Section 83(b) election has not been made, any dividends received with
respect to common stock subject to the Restrictions will be treated as
additional compensation income and not as dividend income.
A Participant may election, pursuant to Section 83(b) of the
Internal Revenue Code ("Code"), to recognize as ordinary income the fair
market value of the restricted stock upon grant, notwithstanding that the
restricted stock would otherwise not be includable in gross income at that
time. If the election is made within 30 days of the date of grant, then the
Participant would include in gross income an amount equal to the difference
between the fair market value of the restricted stock on the date of grant
and the purchase price paid for the restricted stock, if any. Any change in
the value of the shares after the date of grant will be taxed as a capital
gain or capital loss only if and when the shares are disposed of by the
Participant. If the Section 83(b) election is made, the Participant's
holding period for capital gains begins just after the date of grant.
The Section 83(b) election is irrevocable. If a Section 83(b)
election is made and the Participant then forfeits the restricted stock, the
Participant may not deduct as a loss the amount previously included in gross
income. A Participant's tax basis in shares of restricted stock received
will be equal to the sum of the amount (if any) the Participant paid for the
common stock and the amount of ordinary income recognized by the Participant
as a result of making Section 83(b) election or upon the lapse of the
Restrictions. Unless a Section 83(b) election is made, the Participant's
holding period for the shares for purposes of determining gain or loss on a
subsequent sale will begin on the date the Restrictions on the shares lapse.
In general, the Company will be entitled to a deduction at the same time,
and in an amount equal to, the ordinary income recognized by a Participant
with respect to shares of restricted stock. If, subsequent to the lapse of
the Restrictions on the shares, the Participant sells the shares, the
difference, if any, between the amount realized from the sale and the tax
basis in the shares of the Participant will be taxed as a capital gain or
capital loss.
Performance Shares. A Participant generally will not recognize
taxable income upon the grant of performance shares. Instead, a Participant
will recognize as ordinary income, and the Company will have as a
corresponding deduction, any cash delivered and the fair market value of any
common stock delivered in payment of an amount due under the performance
share award. The ordinary income the Participant recognizes will be subject
to applicable tax withholding by the Company.
35
Upon selling any shares of common stock received by a Participant
in payment of an amount due under a performance share award, the Participant
generally will recognize a capital gain or loss in an amount equal to the
difference between the sale price of the shares of common stock and the
Participant's tax basis in the shares of common stock.
Cash Awards. Awards payable in cash are includable in the
Participant's gross income when paid and deductible by the Company when paid
or accrued.
Other Stock Based Awards. The tax consequences associated with any
other stock based awards will vary depending on the specific terms of the
award, including whether the award has a readily ascertainable fair market
value, whether or not the award is subject to forfeiture provisions or
restrictions on transfer, the nature of the property to be received by the
Participant under the award, the applicable holding period and the
Participant's tax basis.
The foregoing statement is only a summary of certain federal income
tax consequences of the Flexible Stock Plan and is based on the Company's
understanding of present federal tax laws and regulations.
VOTE REQUIRED
The vote required to approve this Item 8 is a majority of the
outstanding common stock represented in person or by proxy at the Annual
Meeting and entitled to vote. Under the NYSE rules, the matter must also
receive the affirmative vote of a majority of the votes cast on the matter,
provided that the total votes cast represent more than 50% of the shares
entitled to vote. As a holder of common stock, MetLife is entitled to vote
on this proposal. MetLife beneficially owns and has shared voting power with
respect to approximately 52% of the Company's outstanding shares. MetLife
has informed the Company that it intends to vote for this Item 8; therefore,
approval of this Item 8 by the shareholders is assured.
RECOMMENDATION OF THE BOARD
The Board of Directors has approved the proposal regarding
amendment to the Company's Flexible Stock Plan and recommends that
shareholders vote FOR the proposal.
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 2004 Annual Meeting is required to elect
directors under Item 1, to approve Items 7 and 8, and to act on any other
matters properly brought before the meeting (other than the other specified
proposals). The affirmative vote of the holders of a majority of the shares
of the Company's Common Stock entitled to vote is required to approve Items
2, 3 and 6. The affirmative vote of the holders of 85% of the shares of the
Company's Common Stock entitled to vote which are present in person or
represented by proxy at the 2004 Annual Meeting is required to approve Items
4 and 5. Voting results will be disclosed in the Company's Form 10-Q for the
period ending June 30, 2004. 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 "abstain" or
which 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 (i.e., a "broker non-vote"), 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
FOR each of Items 2 through 8, and in the discretion of the persons named as
proxies on such other business as may properly come before the meeting.
36
As of February 1, 2004, MetLife beneficially owned approximately
52% of the shares of RGA Common Stock entitled to vote at the meeting.
MetLife has indicated its intention to vote its shares FOR each of the
proposals to be voted upon at the meeting, and the vote of MetLife will be
sufficient to approve Items 1 through 3 and 6 through 8.
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
Deloitte & Touche LLP ("Deloitte") was the Company's independent
auditing firm for the fiscal year ended December 31, 2003, and the Company
expects to select this firm again for the year ending December 31, 2004. A
representative of Deloitte is expected to be present at the 2004 Annual
Meeting to respond to appropriate questions and to make a statement if he or
she so desires.
PRINCIPAL ACCOUNTING FIRM FEES
Aggregate fees billed to the Company for the fiscal years ending
December 31, 2003 and 2002, by the Company's principal accounting firm,
Deloitte & Touche, LLP, the member firms of Deloitte Touche Tohmatsu, and
their respective affiliates (collectively, the "Deloitte Entities") are as
follows:
FISCAL YEAR
2003 2002
Audit Fees (a) $1,422,622 $889,854
Audit Related Fees (b) 97,343 22,500
---------- ----------
Total audit and audit-related fees 1,520,005 912,354
Tax Fees (c) 142,843 169,960
All Other Fees 0 0
---------- ----------
Total Fees $1,662,848 $1,082,314
========== ==========
(a) Includes fees for the audit of the Company's and its subsidiaries annual
financial statements, reviews of the Company's quarterly financial
statements, comfort letters, statutory and regulatory audits, consents and
other services related to SEC matters.
(b) Includes fees for services rendered by the Deloitte Entities for matters
such as employee benefit plan audits, consultations concerning financial
accounting and reporting standards and assistance with internal control
reporting requirements.
(c) Includes fees for tax services rendered by the Deloitte Entities, such
as consultation related to tax planning and compliance.
All audit related services, tax services and other services were
pre-approved by the Audit Committee, which concluded that the provision of
such services by the Deloitte Entities was compatible with the maintenance
of that firm's independence in the conduct of its auditing functions. The
Audit Committee has adopted a Pre-Approval Policy which provides for
pre-approval of audit, audit-related and tax services on an annual basis
and, in addition, individual engagements anticipated to exceed
pre-established thresholds must be separately approved. The policy
authorizes the Committee to delegate to one or more of its members
pre-approval authority with respect to permitted services.
37
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,
2003, for filing with the SEC.
THE AUDIT COMMITTEE
Stuart Greenbaum, Chairman
J. Cliff Eason
Alan C. Henderson
William A. Peck, M.D.
SHAREHOLDER NOMINATIONS AND PROPOSALS
As described in the Company's Corporate Governance Guidelines, the
Nominating and Corporate Governance Committee will consider shareholder
nominations for Directors that meet the notification, timeliness, consent
and information requirements of the Company's Articles of Incorporation. The
Committee makes no distinctions in evaluating nominees for positions on the
Board based on whether or not a nominee is recommended by a shareholder,
provided that the procedures with respect to nominations referred to above
are followed. Potential candidates for nomination as Director candidates
must provide written information about their qualifications and participate
in interviews conducted by individual Board members, including the Chairs of
the Audit or Nominating and Governance Committees. Candidates are evaluated
using the criteria adopted by the Board to determine their qualifications
based on the information supplied by the candidates and information obtained
from other sources. The Committee will recommend candidates for election as
Director of the Company only if the Committee determines, in its judgment,
that they have the following specific, minimum qualifications which have
been recommended by the Nominating and Governance Committee to, and approved
by, the Board:
o Financial Literacy. Such person should be "financially
literate" as such qualification is interpreted by the Board
of Directors in its business judgment.
o Leadership Experience. Such person should possess significant
leadership experience, such as experience in business,
finance/accounting, law, education or government, and shall
possess qualities reflecting a proven record of
accomplishment and ability to work with others.
38
o Commitment to the Company's Values. Such person shall be
committed to promoting the financial success of the Company
and preserving and enhancing the Company's business and
ethical reputation, as embodied in its Codes of Conduct.
o Absence of Conflicting Commitments. Such person should not
have commitments that would conflict with the time
commitments of a Director of the Company.
o Reputation and Integrity. Such person shall be of high repute
and recognized integrity and not have been convicted in a
criminal proceeding (excluding traffic violations and other
minor offenses). Such person shall not have been found in a
civil proceeding to have violated any federal or state
securities or commodities law, and shall not be subject to
any court or regulatory order or decree limiting his or her
business activity, including in connection with the purchase
or sale of any security or commodity.
o Other Factors. Such person shall have other characteristics
considered appropriate for membership on the Board of
Directors, including an understanding of marketing and
finance, sound business judgment, significant experience and
accomplishments and educational background.
In March 2004, the Nominating and Corporate Governance Committee
approved the inclusion of William J. Bartlett as a Director Nominee on the
2004 Proxy Statement and Card. At the beginning of the Committee's search
process, Mr. Woodring, the Company's CEO, suggested Mr. Bartlett as a
potential director candidate. The management of MetLife, the Company's
principal shareholder, suggested Mr. Launer and Ms. Weber as director
candidates.
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 Amended and Restated Articles
of Incorporation, including such information as name, address, occupation,
and number of shares held. Item 5 of this Proxy Statement proposes an
amendment to the Company's Articles of Incorporation to, among other things,
move the shareholder nomination and proposal requirements to the Bylaws and,
among other things, change the 60 and 90 periods described above to 90 and
120 days, respectively, before the first anniversary of the preceding year's
annual meeting. See "Item 5: Amendments to Section C of Article Six and
Section B of Article Nine of the Second Restated Articles of Incorporation."
Shareholder proposals submitted under the process prescribed by the
SEC (in Rule 14a-8 of the Exchange Act) for presentation at the 2005 Annual
Meeting must be received by the Company by December 13, 2004 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 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 Amended and 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 SEC relating to the exercise of
discretionary
39
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.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors has adopted Policies on Communications,
which describe the process for shareholders to communicate with the Board.
The Policies on Communications are available on the Company's website at
www.rgare.com. The Company does not have a policy with regard to attendance
by Directors at the annual meeting of shareholders. Two directors attended
the 2003 annual meeting of shareholders.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries
such as brokers to satisfy delivery requirements for proxy statements with
respect to two or more shareholders sharing the same address by delivering a
single proxy statement addressed to those shareholders. This process, which
is commonly referred to as "householding," potentially provides extra
convenience for shareholders and cost savings for companies. Some brokers
household proxy materials, delivering a single proxy statement to multiple
shareholders sharing an address unless contrary instructions have been
received from the affected shareholders. Once you have received notice from
your broker that they will be householding materials to your address,
householding will continue until you are notified otherwise or until you
revoke your consent. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate proxy statement or if
your household currently receives multiple copies and would like to
participate in householding in the future, please notify your broker.
40
EXHIBIT A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
REINSURANCE GROUP OF AMERICA, INCORPORATED
ROLE OF THE AUDIT COMMITTEE
The Audit Committee is appointed by the Board of Directors to perform the
functions the Committee is required by law and regulation to perform and to
assist the Board in fulfilling its responsibility to oversee:
o the Company's accounting and financial reporting processes and the
integrity of its financial statements;
o the audits of the Company's financial statements;
o the adequacy of the Company's internal control over financial
reporting;
o the Company's compliance with legal and regulatory requirements;
o the qualifications and independence of the Company's independent
auditor, in respect of which the Committee shall have direct
responsibility for the appointment, retention and oversight of the
work of the Company's independent auditor; and
o the performance of the Company's internal audit function and
independent auditor.
QUALIFICATIONS AND APPOINTMENT OF AUDIT COMMITTEE MEMBERS
On the recommendation of the Nominating and Governance Committee, the Board
of Directors shall appoint the members of the Audit Committee, having
determined their qualifications, and shall appoint, or ratify the
appointment of the Chair of the Committee. Audit Committee members shall
serve at the pleasure of the Board of Directors and for such term or terms
as the Board may determine.
COMMITTEE MEMBERSHIP
The Audit Committee shall consist of no fewer than three members. The
members of the Audit Committee shall meet the director and audit committee
member independence and experience requirements of the New York Stock
Exchange and Rule 10A-3 of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations of the Securities and Exchange
Commission (the "Commission").
Audit Committee members may not simultaneously serve on the audit committees
of more than two other public companies.
Each member of the Audit Committee should be financially literate, as such
qualification is interpreted by the Board of Directors in its business
judgment; provided, however, that if any member of the Audit Committee is
not financially literate when appointed to the Committee, then he or she
must become financially literate within a reasonable time after appointment.
At least one member of the Audit Committee:
o shall have been determined by the Board of Directors to have
accounting or related financial management expertise, as the Board
of Directors interprets such qualification in its business
judgment; and
o shall be determined by the Board of Directors to be an "audit
committee financial expert," as such term is defined by the
Commission in Item 401(h) of Regulation S-K.
1
AUDIT COMMITTEE AUTHORITY AND RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee shall:
o have sole and direct authority and responsibility to appoint
(subject to shareholder ratification where appropriate),
terminate, approve the compensation and terms of engagement of,
and oversee the work of any registered public accounting firm that
is employed by the Company as its independent auditor to issue an
opinion on its financial statements; and, in connection therewith,
the Committee shall be responsible for resolving any disagreements
between management and the Company's independent auditor
concerning issues related to financial reporting;
o review and approve procedures for the receipt, retention, and
treatment of complaints received by the Company regarding
accounting, internal accounting controls, or auditing matters and
for the confidential, anonymous submission by employees of the
Company of concerns regarding questionable accounting or auditing
matters;
o have authority to engage independent counsel and other advisers,
as it determines necessary to carry out its duties, and the
Company shall provide appropriate funding, as determined by the
Committee, for payment of compensation to the Company's
independent auditor for rendering or issuing an audit report and
to any advisers engaged by the Committee, and for payment of
administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties; and
o in accordance with the pre-approval policy adopted by the
Committee, pre-approve all audit and, subject to Section 10A(i) of
the Exchange Act and rules promulgated thereunder, permitted
non-audit services (including the fees and terms thereof) provided
by the independent auditor to the Company and its subsidiaries.
With respect to the Company's internal control over financial reporting, the
Audit Committee shall;
o review and discuss with management, the internal auditor and the
independent auditor management's reports evaluating the adequacy
and effectiveness of the Company's internal control over financial
reporting, including any significant deficiencies or material
weaknesses in the design or operation of internal control over
financial reporting that could adversely affect the Company's
ability to record, process, summarize and report financial data;
o review and discuss with management, the internal auditor and the
independent auditor, the independent auditor's reports concerning
the adequacy of the Company's internal control over financial
reporting; and
o review and discuss with management, the internal auditor and the
independent auditor management's reports concerning the prevention
and detection of fraud against the Company and its subsidiaries,
including reports of any fraud, whether or not material, that
involves management or other employees who have a significant role
in the Company's internal control over financial reporting.
With respect to the Company's financial statements and disclosures of
financial information, the Audit Committee shall:
o discuss with the independent auditor, and with the internal
auditor, in each case without the presence of management if deemed
appropriate, (a) the audit process, any problems or difficulties
encountered in the course of the performance of the audit,
including any restrictions on the independent auditor's activities
or access to requested information imposed by management, and
management's response thereto, and any significant disagreements
with management; and (b) the Company's internal control over
financial reporting, and the budget, staffing and quality of the
Company's internal audit function, including any "management" or
"internal control" letter issued or proposed to be issued by such
auditor to the Company, and management's response thereto;
o discuss with management, the internal auditor and the independent
auditor the quality and the acceptability of the Company's
accounting policies and any significant changes to the Company's
2
auditing and accounting principles and practices suggested by the
independent auditor, internal audit personnel or management;
o discuss with the independent auditor how the Company's accounting
policies compare with those in the industry and all alternative
treatments of financial information within accounting principles
generally acceptable within the United States that have been
discussed with management;
o review and discuss with management, the internal auditor and the
independent auditor:
o significant issues regarding accounting and auditing
principles and practices and financial statement
presentations, including critical accounting policies and
estimates, any significant changes in the Company's
selection or application of accounting principles and any
significant issues that may have been raised by
management, the internal auditor or the independent
auditor as to the adequacy of the Company's internal
control over financial reporting, and any special audit
steps adopted in light of material control deficiencies;
o analyses prepared by management, the internal auditor
and/or the independent auditor setting forth significant
financial reporting issues and judgments made in
connection with the preparation of the financial
statements; and
o the effect of regulatory and accounting initiatives on the
financial statements;
o review any material financial or other arrangements of the Company
that do not appear on the Company's financial statements, any
reports by management, the internal auditor or the independent
auditor regarding any such arrangements of the Company that do not
appear on the Company's financial statements, and any transactions
or courses of dealing with third parties that are significant in
size or involve terms or other aspects that differ from those that
would likely be negotiated with independent parties, and that are
relevant to an understanding of the Company's financial
statements;
o review management's reports evaluating the effectiveness of the
Company's disclosure controls and procedures in assuring that
material information required to be disclosed in the Company's
periodic reports filed with the Commission is reported to
management, appropriately processed and summarized by management
and reflected in such reports filed with the Commission within the
specified time periods;
o discuss with management the Company's practices regarding earnings
press releases as well as the provision of financial information
and earnings guidance by management to analysts and rating
agencies;
o discuss with management, the internal auditor and the independent
auditor:
o the Company's quarterly reports on Form 10-Q and the
interim financial information contained therein, including
the Company's disclosures under "Management's Discussion
and Analysis of Financial Condition and Results of
Operations," or authorize the Chair of the Committee to
discuss the foregoing with management, the internal
auditor and the independent auditor and make a report
thereon to the full Committee, prior to the filing of such
quarterly reports with the Commission;
o the audited financial statements to be included in the
Company's annual reports on Form 10-K, including the
Company's disclosures under "Management's Discussion and
Analysis of Financial Condition and Results of
Operations," prior to the filing of such reports with the
Commission and discuss with the independent auditor the
matters required to be discussed by Statement of Auditing
Standards No. 61; and
o based on its discussions with management, the internal auditor and
the independent auditor and upon the receipt of an opinion of the
Company's independent auditor on the Company's financial
statements, in form and content satisfactory to the Committee,
determine whether to recommend to the Board of Directors that the
Company's audited financial statements be included in the
Company's Annual Reports on Form 10-K for filing with the
Commission.
The Audit Committee also shall:
o review the scope, plans and results of the internal and external
audits of the Company and its financial statements;
3
o periodically discuss the Company's guidelines and policies with
respect to the process by which the Company undertakes risk
assessment and risk management;
o review with management, the internal auditor and the independent
auditor any correspondence with regulators or governmental
agencies and any employee complaints or published reports that are
brought to its attention that raise material issues regarding the
Company's financial statements or accounting polices;
o receive reports from the Company's general counsel concerning any
significant legal and regulatory matters;
o review the Company's policies on ethical business conduct, and
receive reports concerning the monitoring of compliance with such
policies;
o receive reports concerning executive officers' expenses and
perquisites and compliance with the Company's policies and
procedures relating to expense reimbursement;
o meet at least four times a year or more frequently as
circumstances may require;
o meet regularly in executive session separately with the Company's
independent auditor, internal auditor, and management;
o exercise such other powers and perform such other duties and
responsibilities as are incidental to the purposes, duties and
responsibilities specified herein and as may from time to time be
delegated to the Committee by the Board of Directors; and
o make regular reports to the Board of Directors about the
Committee's activities.
AUDIT COMMITTEE'S RELATIONSHIP WITH THE COMPANY'S INDEPENDENT AUDITOR
The Company's independent auditor shall make reports directly to the Audit
Committee and be accountable to the Audit Committee.
The Company's independent auditor shall periodically and at least annually
submit to the Committee a formal written statement delineating all
relationships between the independent auditor and the Company. Based on such
statements, the Audit Committee shall discuss with the independent auditor
any disclosed relationships or services that might affect the independent
auditor's objectivity and independence. The Committee also shall consider
whether the independent auditor's provision of non-audit services to the
Company is compatible with the maintenance of the auditor's independence.
At least annually, the independent auditor shall provide a report to the
Audit Committee describing the firm's internal quality-control procedures,
any material issues raised by the most recent internal quality-control
review, or peer review, of the firm, or by any inquiry or investigation by
governmental or professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the firm, and any
steps taken to deal with any such issues.
The Audit Committee shall review the foregoing report and the independent
auditor's work and evaluate the independent auditor's qualifications,
performance and independence, including a review and evaluation of the lead
partner on the independent auditor's engagement with the Company, and
present its conclusions to the Board of Directors and, if so determined by
the Committee, recommend that the Board of Directors take additional action
to satisfy itself of the qualifications, performance and independence of the
independent auditor.
The Audit Committee shall assure the regular rotation of the audit
engagement team partners to the extent that such rotation is required by
law.
The Audit Committee shall review and approve the Company's hiring of
individuals who attained the position of manager or above with the
independent auditor and who were engaged on the Company's account.
4
AUDIT COMMITTEE'S RELATIONSHIP WITH THE COMPANY'S INTERNAL AUDITOR
The Company's internal shall make reports directly to the Audit Committee
and be accountable to the Audit Committee.
The Audit Committee shall review the budget, staffing and quality of the
Company's internal audit function and the appointment and termination of
senior internal audit personnel.
The Audit Committee shall review all significant reports to management
prepared by internal audit personnel.
LIMITATION ON AUDIT COMMITTEE'S ROLE
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements and
disclosures are complete and accurate and are in accordance with generally
accepted accounting principles and applicable rules and regulations. These
are the responsibilities of management and the independent auditor.
Accordingly, in carrying out its oversight responsibilities, the Audit
Committee does not provide any expert or special assurance as to the
Company's financial statements; nor does it provide any professional
certification as to the independent auditor's work.
AUDIT COMMITTEE REPORT TO SHAREHOLDERS
Annually, the Committee shall cause to be included in the Company's proxy
statements the report of the Committee to the Company's shareholders as
required by Commission regulations.
Annual Evaluation of the Committee's Performance
Annually, the Board shall conduct an evaluation of the Committee's
performance.
Adopted March 8, 2004
5
EXHIBIT B
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
REINSURANCE GROUP OF AMERICA, INCORPORATED
ARTICLE ONE
NAME
The name of the corporation (hereinafter referred to as the
"Corporation") is: Reinsurance Group of America, Incorporated.
ARTICLE TWO
REGISTERED OFFICE AND AGENT
The address, including street and number, if any, of the
Corporation's registered office in this state is 1370 Timberlake Manor
Parkway, Chesterfield, Missouri 63017-6039. The name of its initial agent at
such address is James E. Sherman.
ARTICLE THREE
CAPITAL STOCK
A. Class and Number of Shares. The aggregate number, class
--------------------------
and par value, if any, of shares which the Corporation shall have authority
to issue is 150,000,000 shares, consisting of 140,000,000 shares of Common
Stock, par value $.01 per share, and 10,000,000 shares of Preferred Stock,
par value $.01 per share ($1,500,000.00 aggregate total).
B. Voting Rights of the Common Stock. Each holder of the
---------------------------------
Common Stock shall be entitled to one vote per share of Common Stock on all
matters to be voted on by the shareholders.
C. Issuance of Preferred Stock, Rights and Preferences
---------------------------------------------------
Thereof.
-------
1. The Preferred Stock may be issued from time to
time in one or more series, with such voting powers, full or limited, or no
voting powers, and such designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions thereof, as shall be stated in the resolution or
resolutions providing for the issuance of such stock adopted from time to
time by the Board of Directors. Without limiting the generality of the
foregoing, in the resolution or resolutions providing for the issuance of
such shares of each particular series of Preferred Stock, subject to the
requirements of the laws of the State of Missouri, the Board of Directors is
also expressly authorized:
(a) To fix the distinctive serial designation of
the shares of the series;
(b) To fix the consideration for which the shares
of the series are to be issued;
(c) To fix the rate or amount per annum,
if any, at which the holders of the shares of the series shall be entitled
to receive dividends, the dates on which and the conditions under which
dividends shall be payable, whether dividends shall be cumulative or
noncumulative, and if cumulative, the date or dates from which dividends
shall be cumulative;
1
(d) To fix the price or prices at which,
the times during which, and the other terms, if any, upon which the shares
of the series may be redeemed;
(e) To fix the rights, if any, which the
holders of shares of the series have in the event of dissolution or upon
distribution of the assets of the Corporation;
(f) From time to time to include additional shares
of Preferred Stock which the Corporation is authorized to issue in the series;
(g) To determine whether or not the shares of the
series shall be made convertible into or exchangeable for other securities
of the Corporation, including shares of the Common Stock of the Corporation
or shares of any other series of the Preferred Stock of the Corporation, now
or hereafter authorized, or any new class of Preferred Stock of the
Corporation hereafter authorized, the price or prices or the rate or rates
at which conversion or exchange may be made, and the terms and conditions
upon which the conversion or exchange rate shall be exercised;
(h) To determine if a sinking fund shall
be provided for the purchase or redemption of shares of the series and, if
so, to fix the terms and the amount or amounts of the sinking fund; and
(i) To fix the other preferences and rights,
privileges and restrictions applicable to the series as may be permitted
by law.
D. Series A Junior Participating Preferred Stock.
---------------------------------------------
A series of the class of authorized preferred stock, par
value $.01 per share, of the Corporation is hereby created having the
designation and number of shares thereof and the voting powers, preferences
and relative, participating, optional and other special rights of the shares
of such series, and the qualifications, limitations and restrictions
thereof, as are set forth in that certain Certificate of Designation of the
Corporation, filed on April 28, 1993, and reproduced without change and
attached hereto as Exhibit A.
ARTICLE FOUR
ADDITIONAL PROVISIONS REGARDING
CERTAIN SHAREHOLDER RIGHTS
A. Preemptive Rights. All preemptive rights of
-----------------
shareholders are hereby denied, so that no stock or other security of the
Corporation shall carry with it and no holder or owner of any share or
shares of stock or other security or securities of the Corporation shall
have any preferential or preemptive right to acquire additional shares of
stock or any other security of the Corporation.
B. Cumulative Voting. All cumulative voting rights are
-----------------
hereby denied, so that none of the Common Stock, the Preferred Stock or any
other security of the Corporation shall carry with it and no holder or owner
of any Common Stock, Preferred Stock or any other security shall have any
right to cumulative voting in the election of directors or for any other
purpose.
ARTICLE FIVE
INCORPORATOR
The name and place of residence of the incorporator is:
Donna J. Holsten
6140 Wanda
St. Louis, Missouri 63116
2
ARTICLE SIX
DIRECTORS
A. Number and Classes of Directors. The number of
-------------------------------
directors to constitute the initial Board of Directors of the Corporation is
ten. Thereafter, the number of directors shall be fixed by, or in the manner
provided in, the Bylaws of the Corporation. The Board of Directors shall be
divided into three classes, as nearly equal in number as possible, with the
mode of such classification to be provided for in the Bylaws of the
Corporation. Directors other than certain Directors elected to the initial
Board of Directors shall be elected to hold office for a term of three
years, with the term of office of one class expiring each year. As used in
these Articles of Incorporation, the term "entire Board of Directors" means
the total number of Directors fixed by, or in accordance with, these
Articles of Incorporation or the Bylaws of the Corporation.
B. Removal of Directors. Subject to the rights, if any, of
--------------------
the holders of any class of capital stock of the Corporation (other than the
Common Stock) then outstanding, (1) any Director, or the entire Board of
Directors, may be removed from office at any time prior to the expiration of
his term of office only for cause and only by the affirmative vote of the
holders of record of outstanding shares representing at least 85% of all of
the then outstanding shares of capital stock of the Corporation then
entitled to vote generally in the election of Directors, voting together as
a single class at a special meeting of shareholders called expressly for
that purpose (such vote being in addition to any required class or other
vote); and (2) any Director may be removed from office by the affirmative
vote of a majority of the entire Board of Directors at any time prior to the
expiration of his term of office, as provided by law, in the event that the
Director fails to meet any qualifications stated in the Bylaws for election
as a Director or in the event that the Director is in breach of any
agreement between the Director and the Corporation relating to the
Director's service as a Director or employee of the Corporation.
C. Vacancies. Subject to the rights, if any, of the
---------
holders of any class of capital stock of the Corporation (other than the
Common Stock) then outstanding, any vacancies in the Board of Directors
which occur for any reason prior to the expiration of the term of office of
the class in which the vacancy occurs, including vacancies which occur by
reason of an increase in the number of Directors, shall be filled only by
the Board of Directors, acting by the affirmative vote of a majority of the
remaining Directors then in office (although less than a quorum).
ARTICLE SEVEN
DURATION
The duration of the Corporation is perpetual.
ARTICLE EIGHT
PURPOSES
The Corporation is formed for the following purposes:
1. To purchase, take, receive, subscribe or otherwise
acquire, own, hold, use, employ, sell, mortgage, loan, pledge, or otherwise
dispose of, and otherwise deal in and with the shares or other interests in,
or obligations of, other domestic and foreign corporations, associations,
partnerships or individuals;
2. To be a general or limited partner in any general or
limited partnership;
3. To take such actions and transact such other business
as are incidental to and connected with the purposes set forth above; and
4. To do anything permitted of corporations pursuant to
the provisions of The General and Business Corporation Law of Missouri, as
amended from time to time.
3
ARTICLE NINE
SHAREHOLDERS' MEETINGS
A. Special Meetings. A special meeting of the shareholders
----------------
may be called only by the Board of Directors pursuant to a resolution
adopted by the affirmative vote of a majority of the entire Board of
Directors or by the Chairman of the Board of Directors or the President.
Only such business shall be conducted, and only such proposals shall be
acted upon, as are specified in the call of any special meeting of
shareholders.
B. Annual Meetings. At any annual meeting of shareholders
---------------
only such business shall be conducted, and only such proposals shall be
acted upon, as shall have been properly brought before the meeting pursuant
to the Bylaws of the Corporation.
C. Action by Written Consent. Any action required or
-------------------------
permitted to be taken by the shareholders of the Corporation may, if
otherwise allowed by law, be taken without a meeting of shareholders only if
consents in writing, setting forth the action so taken, are signed by all of
the shareholders entitled to vote with respect to the subject matter
thereof.
ARTICLE TEN
AMENDMENT OF BYLAWS
The Bylaws of the Corporation may be amended, altered,
changed or repealed, and a provision or provisions inconsistent with the
provisions of the Bylaws as they exist from time to time may be adopted,
only by the majority of the entire Board of Directors.
ARTICLE ELEVEN
AMENDMENT OF ARTICLES OF INCORPORATION
The Corporation reserves the right to amend, alter, change
or repeal any provision contained in these Articles of Incorporation in the
manner now or hereafter prescribed by law, and all rights and powers
conferred herein on the shareholders, directors and officers of the
Corporation are subject to this reserved power; provided, that (in addition
to any required class or other vote) the affirmative vote of the holders of
record of outstanding shares representing at least 85% of all of the
outstanding shares of capital stock of the Corporation then entitled to vote
generally in the election of Directors, voting together as a single class,
shall be required to amend, alter, change or repeal, or adopt any provision
or provisions inconsistent with, Articles Four, Six, Nine, Ten, Twelve, or
this Article Eleven of these Articles of Incorporation.
ARTICLE TWELVE
INDEMNIFICATION AND RELATED MATTERS
A. Actions Involving Directors and Officers. The
----------------------------------------
Corporation shall indemnify each person (other than a party plaintiff suing
on his own behalf or in the right of the Corporation) who at any time is
serving or has served as a director or officer of the Corporation against
any claim, liability or expense incurred as a result of this service, or as
a result of any other service on behalf of the Corporation, or service at
the request of the Corporation as a director, officer, employee, member or
agent of another corporation, partnership, joint venture, trust, trade or
industry association or other enterprise (whether incorporated or
unincorporated, for-profit or not-for-profit), to the maximum extent
permitted by law. Without limiting the generality of the foregoing, the
Corporation shall indemnify any such person who was or is a party (other
than a party plaintiff suing on his own behalf or in the right of the
Corporation), or
4
is threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, but not limited to, an action by or in the right
of the Corporation) by reason of such service against expenses (including,
without limitation, attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding.
B. Actions Involving Employees or Agents.
-------------------------------------
1. The Corporation may, if it deems appropriate and as may
be permitted by this Article, indemnify any person (other than a party
plaintiff suing on his own behalf or in right of the Corporation) who at any
time is serving or has served as an employee or agent of the Corporation
against any claim, liability or expense incurred as a result of such service
or as a result of any other service on behalf of the Corporation, or service
at the request of the Corporation as a director, officer, employee, member
or agent of another corporation, partnership, joint venture, trust, trade or
industry association or other enterprise (whether incorporated or
unincorporated, for-profit or not-for-profit), to the maximum extent
permitted by law or to such lesser extent as the Corporation, in its
discretion, may deem appropriate. Without limiting the generality of the
foregoing, the Corporation may indemnify any such person who was or is a
party (other than a party plaintiff suing on his own behalf or in the right
of the Corporation), or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, but not limited to, an action by
or in the right of the Corporation) by reason of such service against
expenses (including, without limitation, attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding.
2. To the extent that an employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section B(1) of this Article, or
in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the action, suit or preceding.
C. Determination of Right to Indemnification in Certain
----------------------------------------------------
Circumstances. Any indemnification required under Section A of this Article
-------------
or authorized by the Corporation in a specific case pursuant to Section B of
this Article (unless ordered by a court) shall be made by the Corporation
unless a determination is made reasonably and promptly that indemnification
of the director, officer, employee or agent is not proper under the
circumstances because he has not met the applicable standard of conduct set
forth in or established pursuant to this Article. Such determination shall
be made (1) by the Board of Directors by a majority vote of a quorum
consisting of Directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or even if obtainable
a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or (3) by majority vote of the shareholders; provided
that no such determination shall preclude an action brought in an
appropriate court to challenge such determination.
D. Advance Payment of Expenses. Expenses incurred by a
---------------------------
person who is or was a director or officer of the Corporation in defending a
civil or criminal action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of an action, suit or
proceeding, and expenses incurred by a person who is or was an employee or
agent of the Corporation in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by or at the
direction of the Board of Directors, in either case upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in or pursuant
to this Article.
E. Not Exclusive Right. The indemnification provided by
-------------------
this Article shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled, whether
5
under the Bylaws of the Corporation or any statute, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
an official capacity and as to action in another capacity while holding such
office.
F. Indemnification Agreements Authorized. Without limiting
-------------------------------------
the other provisions of this Article, the Corporation is authorized from
time to time, without further action by the shareholders of the Corporation,
to enter into agreements with any director, officer, employee or agent of
the Corporation providing such rights of indemnification as the Corporation
may deem appropriate, up to the maximum extent permitted by law. Any
agreement entered into by the Corporation with a director may be authorized
by the other directors, and such authorization shall not be invalid on the
basis that similar agreements may have been or may thereafter be entered
into with other directors.
G. Standard of Conduct. Except as may otherwise be
-------------------
permitted by law, no person shall be indemnified pursuant to this Article
(including without limitation pursuant to any agreement entered into
pursuant to Section F of this Article) from or on account of such person's
conduct which is finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct. The Corporation may (but need
not) adopt a more restrictive standard of conduct with respect to the
indemnification of any employee or agent of the Corporation.
H. Insurance. The Corporation may purchase and maintain
---------
insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or who is or was otherwise serving on
behalf or at the request of the Corporation against any claim, liability or
expense asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of
this Article.
I. Certain Definitions. For the purposes of this Article:
-------------------
1. Any director or officer of the Corporation who shall
serve as a director, officer or employee of any other corporation,
partnership, joint venture, trust or other enterprise of which the
Corporation, directly or indirectly, is or was the owner of 20% or more of
either the outstanding equity interests or the outstanding voting stock (or
comparable interests), shall be deemed to be so serving at the request of
the Corporation, unless the Board of Directors of the Corporation shall
determine otherwise. In all other instances where any person shall serve as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise of which the Corporation is or was
a shareholder or creditor, or in which it is or was otherwise interested, if
it is not otherwise established that such person is or was serving as a
director, officer, employee or agent at the request of the Corporation, the
Board of Directors of the Corporation may determine whether such service is
or was at the request of the Corporation, and it shall not be necessary to
show any actual or prior request for such service.
2. References to a corporation include all constituent
corporations absorbed in a consolidation or merger as well as the resulting
or surviving corporation so that any person who is or was a director,
officer, employee or agent of a constituent corporation or is or was serving
at the request of a constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this
Article with respect to the resulting or surviving corporation as he would
if he had served the resulting or surviving corporation in the same
capacity.
3. The term "other enterprise" shall include, without
limitation, employee benefit plans and voting or taking action with respect
to stock or other assets therein; the term "serving at the request of the
corporation" shall include, without limitation, any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, a director, officer, employee or agent with respect to
any employee benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have satisfied any standard of care required by or
pursuant to
6
this Article in connection with such plan; the term "fines" shall include,
without limitation, any excise taxes assessed on a person with respect to an
employee benefit plan and shall also include any damages (including treble
damages) and any other civil penalties.
J. Survival. Any indemnification rights provided pursuant
--------
to this Article shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person. Notwithstanding any
other provision in these Articles of Incorporation, any indemnification
rights arising under or granted pursuant to this Article shall survive
amendment or repeal of this Article with respect to any acts or omissions
occurring prior to the effective time of such amendment or repeal and
persons to whom such indemnification rights are given shall be entitled to
rely upon such indemnification rights with respect to such acts or omissions
as a binding contract with the Corporation.
K. Liability of the Directors. It is the intention of the
--------------------------
Corporation to limit the liability of the directors of the Corporation, in
their capacity as such, whether to the Corporation, its shareholders or
otherwise, to the fullest extent permitted by law. Consequently, should The
General and Business Corporation Law of Missouri or any other applicable law
be amended or adopted hereafter so as to permit the elimination or
limitation of such liability, the liability of the directors of the
Corporation shall be so eliminated or limited without the need for amendment
of these Articles or further action on the part of the shareholders of the
Corporation.
ARTICLE THIRTEEN
EXCULPATION
The liability of the Corporation's directors to the Corporation or any of
its shareholders for monetary damages for breach of fiduciary duty as a
director shall be eliminated to the fullest extent permitted under the
Missouri General and Business Corporation Law. Any repeal or modification of
this Article Thirteen by the shareholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification with respect to acts or
omissions occurring prior to such repeal or modification.
EXHIBIT A
Series A Junior Participating Preferred Stock
---------------------------------------------
1. Designation and Amount.
----------------------
There shall be a series of the Preferred Stock which shall
be designated as the "Series A Junior Participating Preferred Stock," par
value $.01 per share, and the number of shares constituting such series
shall be Five Hundred Thousand (500,000). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series A Junior
Participating Preferred Stock to a number less than that of the shares then
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities
issued by the Company.
2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares
of any series of preferred stock of the Company ranking prior and superior
to the Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of Common Stock, par value
$.01 per share of the Company (the "Common Stock"), and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on any regular quarterly dividend payment date as
shall be established by the Board of Directors (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first
7
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$l.00 or (b) subject to the provision for adjustment hereinafter set forth,
l00 times the aggregate per share amount of all cash dividends, and l00
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior Participating Preferred
Stock. In the event the Company shall at any time after April 13, 1993 (the
"Rights Declaration Date") declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case
the amount to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may, in accordance with applicable law, fix a record date
for the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than such number of
days prior to the date fixed for the payment thereof as may be allowed by
applicable law.
3. Voting Rights.
-------------
The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating
Preferred Stock shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Company. In the event the
Company shall at any time after the Rights Declaration Date declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
8
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes
to which holders of shares of Series A Junior Participating Preferred Stock
were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the
Company's Articles of Restatement or by law, the holders of shares of Series
A Junior Participating Preferred Stock, the holders of shares of Common
Stock, and the holders of shares of any other capital stock of the Company
having general voting rights, shall vote together as one class on all
matters submitted to a vote of stockholders of the Company.
(C) Except as otherwise set forth herein or in
the Company's Articles of Restatement, and except as otherwise provided by
law, holders of Series A Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
4. Certain Restrictions.
--------------------
(A) Whenever dividends or distributions payable
on the Series A Junior Participating Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make
any other distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, except dividends paid ratably
on the Series A Junior Participating Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) except as permitted in Section 4(A)(iv) below,
redeem or purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred
Stock, provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior Participating
Preferred Stock; and
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred Stock,
or any shares of stock ranking on a parity with the Series A Junior
Participating Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any subsidiary
of the Company to purchase or otherwise acquire for consideration any shares
of stock of the Company unless the Company
9
could, under paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
5. Reacquired Shares.
-----------------
Any shares of Series A Junior Participating Preferred
Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. The Company shall cause all such shares upon their cancellation to
be authorized but unissued shares of Preferred Stock which may be reissued
as part of a new series of Preferred Stock, subject to the conditions and
restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Company, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares
of Series A Junior Participating Preferred Stock shall have received $100.00
per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Junior Participating
Preferred Stock, unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock dividends, and
subdivisions, combinations and consolidations with respect to the Common
Stock) (such number in clause (ii) being referred to as the "Adjustment
Number"). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such Series A Junior
Participating Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Junior Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. In the event there are not sufficient assets available to
permit payment in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(C) In the event the Company shall at any time
after the Rights Declaration Date declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
7. Consolidation, Merger, etc.
--------------------------
In case the Company shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock
are exchanged for or changed into other stock or securities, cash and/or any
other property, then in any such case the shares of Series A Junior
10
Participating Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Company shall at any time after the Rights
Declaration Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Junior Participating Preferred Stock shall
be adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that are outstanding immediately prior to such event.
8. Redemption.
----------
The shares of Series A Junior Participating Preferred
Stock shall not be redeemable.
9. Ranking.
-------
The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Company's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. Fractional Shares.
-----------------
Series A Junior Participating Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
11
Please / /
Mark Here
for Address
Change or
Comments
SEE REVERSE SIDE
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
1. ELECTION OF DIRECTORS
01 William J. Bartlett
02 Alan C. Henderson
03 A. Greig Woodring
FOR all nominees WITHHOLD AUTHORITY
listed (except as marked to vote for all
to the contrary) nominees listed
/ / / /
(INSTRUCTION: to withhold authority to vote for any individual nominee, strike
a line through the nominee's name on the list above.)
2. Approval of an amendment to Section A of Article FOR AGAINST ABSTAIN
Three of the Second Restated Articles of / / / / / /
Incorporation.
3. Approval of an amendment to delete Section D from FOR AGAINST ABSTAIN
Article Three of the Second Restated Articles of / / / / / /
Incorporation.
4. Approval of an amendment to Section A of Article FOR AGAINST ABSTAIN
Six of the Second Restated Articles of / / / / / /
Incorporation.
5. Approval of amendments to Section C of Article Six FOR AGAINST ABSTAIN
and Section B of Article Nine of the Second / / / / / /
Restated Articles of Incorporation.
6. Approval of an amendment to add new Article Thirteen FOR AGAINST ABSTAIN
to the Second Restated Articles of Incorporation. / / / / / /
7. Authorization to sell certain types of securities FOR AGAINST ABSTAIN
from time to time to MetLife, Inc. or affiliates / / / / / /
of MetLife, Inc.
FOR AGAINST ABSTAIN
8. Approval of an amendment to the Flexible Stock Plan. / / / / / /
The undersigned hereby
acknowledges receipt of the
Notice of the 2004 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 Items 1 through 8.
Dated: , 2004
---------------------
---------------------------------
Signature
---------------------------------
Signature if held jointly
PLEASE SIGN AS REGISTERED AND
RETURN PROMPTLY TO: If Stock is owned in joint names,
REINSURANCE GROUP OF AMERICA, INCORPORATED, both owners must sign. If address
MIDTOWN STATION, PO BOX 870, at left is incorrect, please
NEW YORK, NY 10138 write in the correct information.
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 11:59 PM EASTERN TIME
THE DAY PRIOR TO ANNUAL MEETING DAY.
YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE NAMED PROXIES
TO VOTE YOUR SHARES IN THE SAME MANNER
AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
--------------------------------------
INTERNET
http://www.eproxy.com/rga
Use the Internet to vote your proxy.
Have your proxy card in hand when
you access the web site.
--------------------------------------
OR
--------------------------------------
TELEPHONE
1-800-435-6710
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in hand when you call.
--------------------------------------
OR
--------------------------------------
MAIL
Mark, sign and date
your proxy card
and
return it in the
enclosed postage-paid
envelope.
--------------------------------------
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
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 26,
2004, 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.
---------------------------------------------------------------------------
ADDRESS CHANGE/COMMENTS (MARK THE CORRESPONDING BOX ON THE REVERSE SIDE)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
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FOLD AND DETACH HERE
April 12, 2004
Dear Shareholder:
We invite you to attend the 2004 Annual Meeting of Stockholders of
Reinsurance Group of America, Incorporated, to be held on May 26, 2004 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.
APPENDIX
Page 17 of the proxy statement contains a Performance Graph. The
information contained within the graph is presented in a tabular format
immediately following the graph.