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, 2006
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 Company's offices located at 1370
Timberlake Manor Parkway, St. Louis, Missouri on May 24, 2006, 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 24, 2006 will be entitled to vote,
for the following purposes:
1. To elect three directors for terms expiring in 2009; and
2. To transact such other business as may properly come
before the meeting.
REINSURANCE GROUP OF AMERICA, INCORPORATED
By
/s/ James E. Sherman /s/ Leland C. Launer, Jr.
James E. Sherman Leland C. Launer, Jr.,
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 24, 2006
AT RGA'S OFFICES IN 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 24, 2006, 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, 2006.
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 24, 2006 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
61,174,302 shares of Common Stock were outstanding and entitled to be voted
at such meeting, with approximately 75 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, 2005 accompanies this proxy statement.
2
The Board of Directors of the Company makes the solicitation of
this proxy. 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 2009, 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 two or three directors, with the terms of office
of each class ending in successive years. Lisa M. Weber resigned from the
Board on January 25, 2006. In anticipation of Ms. Weber's departure from the
Board, the management of MetLife, Inc. ("MetLife"), the Company's principal
shareholder, suggested Georgette A. Piligian as a director candidate to fill
the vacancy created by Ms. Weber's resignation. Following consideration of
the candidate by the Nominating and Corporate Governance Committee, on
January 26, 2006, the Board elected Ms. Piligian to fill the vacancy.
Currently, the Board has eight directors, with two vacancies.
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. 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 nominees
for election to the Board.
SERVED AS
---------
DIRECTOR
--------
DIRECTORS SINCE
--------- ---------
TO BE ELECTED AS DIRECTORS FOR TERMS ENDING 2009:
STUART I. GREENBAUM, 69 1997
Professor at the John M. Olin School of Business at Washington
University since July 2005. Mr. Greenbaum served as Dean of the Olin
School of Business from July 1995 to July 2005. Prior to joining the
Olin School of Business, 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 also
is a director of First Oak Brook Bancshares, Inc.
3
LELAND C. LAUNER JR., 50 2003
President, Institutional Business of Metropolitan Life Insurance
Company ("Metropolitan Life") since March 2005. Mr. Launer was
Executive Vice President and Chief Investment Officer of MetLife
and Metropolitan Life from July 2003 to March 2005. Prior to that
he was a Senior Vice President of Metropolitan Life for more than
five years.
GEORGETTE A. PILIGIAN, 41 2006
Senior Vice President & Chief Information Officer, Institutional
Business, Metropolitan Life since February 2006. Ms. Piligian was
Vice President and Chief Information Officer, Corporate Systems,
Metropolitan Life from September 2002 to February 2006. She was Vice
President, Institutional Application Development, Metropolitan Life
from August 1999 to September 2002. She joined Metropolitan Life in
1987.
TO CONTINUE IN OFFICE UNTIL 2008:
J. CLIFF EASON, 58 1993
Retired President and CEO of Southwestern Bell Telephone, SBC
Communications, Inc. ("SBC"), a position he held from September 2000
through January 2001. He served as President, Network Services, SBC
from October 1999 through September 2000; President, SBC
International of SBC, from March 1998 until October 1999; President
and CEO of Southwestern Bell Telephone Company ("SWBTC") from
February 1996 until March 1998; President and CEO of Southwestern
Bell Communications, Inc. from July 1995 through February 1996;
President of Network Services of SWBTC from July 1993 through June
1995; and President of Southwestern Bell Telephone Company of the
Midwest from 1992 to 1993. He held various other positions with
Southwestern Bell Communications, Inc. and its subsidiaries prior to
1992, including President of Metromedia Paging from 1991 to 1992.
Mr. Eason was a director of Williams Communications Group, Inc.
until his retirement in January 2001.
JOSEPH A. REALI, 53 2002
Senior Vice President and Tax Director of Metropolitan Life since
1999. Mr. Reali has served as the MetLife 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 serves as Counsel and Secretary of the
Metropolitan Life Foundation.
TO CONTINUE IN OFFICE UNTIL 2007:
WILLIAM J. BARTLETT, 56 2004
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
(CASA), and the United Kingdom (FCMA). Mr. Bartlett is a member of
the Australian Life Insurance Actuarial Standards Board and is a
consultant to the Australian Financial Reporting Council on Auditor
Independence.
4
ALAN C. HENDERSON, 60 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, 54 1993
President and Chief Executive Officer of the Company since 1993. He
headed the reinsurance business at General American Life Insurance
Company ("General American") 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.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held a total of four regular and three
special meetings during 2005. Each incumbent director attended at least 75%
of the meetings of the Board and committees on which he or she served during
2005. The Board of Directors has an Audit Committee, a Compensation
Committee, and a Nominating and Corporate Governance Committee.
AUDIT COMMITTEE
The Audit Committee met eight times in 2005, and consisted of
Messrs. Bartlett (Chairman effective May 1, 2005), Eason, Greenbaum, and
Henderson. 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 reviews and 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, which 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. Bartlett, 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.
5
COMPENSATION COMMITTEE
The Compensation Committee met five times during 2005 and consisted
of Messrs. Henderson (Chairman effective May 1, 2005), Bartlett, Eason, and
Greenbaum. 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). 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.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee met three times
in 2005, and consisted of Messrs. Greenbaum (Chairman effective May 1,
2005), Bartlett, Eason, and Henderson. 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 of self-evaluations to be conducted by the Board and Committees.
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). 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. During 2005 this group of directors consisted of
Messrs. Launer, Reali, and Woodring, and Ms. Weber. Effective January 1,
2005, 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 $50,000 (except the chair of the Audit Committee, who
receives an annual retainer fee of $62,000, and the chair of any other
Committee, who receives an annual retainer fee of $58,000). Non-Employee
Directors are paid $3,000 for each Board and Committee meeting attended in
person, and $1,500 for participating in a telephonic Board or Committee
meeting. A Non-Employee Director serving as Chairman of the Board receives
an annual retainer of $83,000, is paid $4,000 for each Board meeting
attended in person and $2,000 for participating in a telephonic Board
meeting, and receives an annual grant of 1,600 shares of stock. The Company
also reimburses directors for out-of-pocket expenses incurred in connection
with attending Board and Committee meetings. Mr. Bartlett also serves as a
director of the Company's Australian holding and operating companies, and
receives an annual retainer of AUS$50,000 for those services.
During 2005, the group of Non-Employee Directors consisted of
Messrs. Bartlett, Eason, Greenbaum and Henderson. Each Non-Employee Director
is granted 1,200 shares of stock annually. In 2004 and 2005, the annual
grant consisted of 1,200 shares of restricted stock which vest one-third per
year for three years. On January 27, 2005, each of Messrs. Bartlett, Eason,
Greenbaum and Henderson were granted 1,200 shares of restricted stock, which
will fully vest on January 1, 2008.
6
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 amended and restated at the annual
meeting held May 28, 2003. Phantom shares are granted under the Phantom
Stock Plan for Directors, which was last amended at the annual meeting held
May 28, 2003.
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 5.05 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, Missouri
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 February 2006. During this
review, the Board received a report noting that there were no transactions
or relationships between any of Messrs. Bartlett, Eason, Greenbaum, or
Henderson, 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 those 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 four directors named above are independent of
the Company and its management under the applicable standards. Messrs.
Launer and Reali, and Ms. Weber and Ms. Piligian, 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.
7
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. As of February 1, 2006, MetLife beneficially owns
approximately 52.8% of the Company's outstanding shares; therefore, the
Company qualifies as a "controlled company" under the NYSE listing
standards. The Company relies 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
February 21, 2006, the Board determined that, in its judgment, those two
Committees were composed entirely of independent directors.
OTHER MATTERS
In February 2006, the Board designated Mr. Launer to continue 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
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.
8
SECURITIES OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
OWNERSHIP OF SHARES OF RGA
--------------------------
The following table sets forth, as of February 1, 2006, 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.
One Madison Avenue
New York, New York 10010 32,243,539(3) 52.8%
Neuberger Berman, LLC.
605 Third Ave.
New York, New York 10158 4,641,633(4) 7.6%
Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109 3,824,762(5) 6.3%
DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS:
A. Greig Woodring, Director, President and Chief
Executive Officer 369,942(6) *
William J. Bartlett, Director 1,900(7) *
J. Cliff Eason, Director 15,150(8) *
Stuart Greenbaum, Director 21,033(9) *
Alan C. Henderson, Director 9,396(10) *
Leland C. Launer, Jr., Director (3) -- **
Joseph A. Reali, Director (3) -- **
Georgette A. Piligian, Director (3) -- **
David B. Atkinson, Executive Vice President and Chief
Operating Officer 157,762(11) *
Jack B. Lay, Executive Vice President and Chief Financial
Officer 111,859(12) *
Paul A. Schuster, Executive Vice President, U.S. Operations 105,062(13) *
Graham Watson, Executive Vice President and Chief Marketing
Officer 93,450(14) *
All directors and executive officers
as a group (14 persons) 938,040(15) 1.52%
--------
* Less than one percent.
** Not applicable.
9
(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, Metropolitan Life, GenAmerica Finance, LLC, and General
American Life Insurance Company and contained in a Schedule 13D filed
with the Securities and Exchange Commission on December 3, 1999, as
amended. Each of the filing companies shares voting and dispositive
power with each other. Mr. Launer is an executive officer, and Mr.
Reali and Ms. Piligian are senior officers, of MetLife. Each of them
disclaims beneficial ownership of the shares beneficially owned by
MetLife and its subsidiaries.
(4) As reported on a Schedule 13G/A filed February 15, 2006, Neuberger
Berman, Inc. is the holding company for an investment adviser and a
registered broker-dealer. Shares are owned by several accounts managed
by Neuberger Berman, Inc. and its subsidiaries. Neuberger Berman, Inc.
has sole voting power over 3,439,038 shares and shared dispositive
power over all of its shares.
(5) As reported on a Schedule 13G/A filed February 14, 2006. Wellington
Management Company, LLP ("WMC") is an investment adviser. Shares are
owned of record by clients of WMC, none of which is known to have
beneficial ownership of more than five percent of the Company's
outstanding shares. WMC has shared voting power of 2,777,520 shares and
shared dispositive power of 3,824,762 shares.
(6) Includes 324,825 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 1,034 restricted shares of Common Stock that are subject to
forfeiture in accordance with the terms of the specific grant, as to
which Mr. Bartlett has no investment power.
(8) Includes 10,500 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.
(9) 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.
(10) 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.
(11) Includes 121,214 shares of Common Stock subject to stock options that are
exercisable within 60 days. 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 100,314 shares of Common Stock subject to stock options that
are exercisable within 60 days and 4,997 shares for which Mr. Lay
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 87,298 shares of Common Stock subject to stock options that
are exercisable within 60 days, and 17,764 shares for which Mr.
Schuster shares voting and investment power with his spouse.
(14) Includes 58,598 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.
(15) Includes a total of 772,506 shares of Common Stock subject to stock
options that are exercisable within 60 days; and 32,730 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.
10
OWNERSHIP OF SHARES OF METLIFE
------------------------------
The following table sets forth, as of February 1, 2006, 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)
------ ------------
Leland C. Launer, Jr., Director 131,945(3) 48(4) *
Joseph A. Reali, Director 103,250(5) 170(6) *
Georgette A. Piligian, Director 46,994(7) 20(8) *
A. Greig Woodring, Director, President & CEO 90 -- *
Jack B. Lay, EVP and CFO 200(9) --
Paul A. Schuster, EVP 200(9) --
All directors and executive officers as a group
(14 persons) 282,679(10) 238 *
*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 111,975 shares of MetLife common stock subject to stock
options that are exercisable within 60 days and 19,970 deferred
share units payable in shares of MetLife common stock under
MetLife's Deferred Compensation Plan for Officers.
(4) Includes 38 shares beneficially owned by Mr. Launer and 10 shares
beneficially owned by his spouse.
(5) Includes 86,887 shares of MetLife common stock subject to stock
options that are exercisable within 60 days, and 13,363 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 with whom
Mr. Reali shares investment power.
(7) Includes 42,443 shares of MetLife common stock subject to stock
options that are exercisable within 60 days and 4,551 deferred share
units payable in shares of MetLife common stock under MetLife's
Deferred Compensation Plan for Officers.
(8) Includes 20 shares jointly held with Ms. Piligian's spouse, with
whom she shares investment power.
(9) Includes 200 shares of MetLife common stock subject to stock options
that are exercisable within 60 days.
(10) Includes a total of 241,705 shares of MetLife common stock subject
to stock options that are exercisable within 60 days and 37,884
deferred share units payable in shares of MetLife common stock under
MetLife's Deferred Compensation Plan for Officers.
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 officers, and greater
than 10% beneficial owners complied with all filing requirements applicable
to them with respect to transactions during 2005.
11
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee was composed during 2005 of
four non-employee directors. The Committee establishes and oversees the
Company's general compensation policies, reviews the performance and
compensation of the CEO, and reviews compensation for other 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, 2005) except for Graham Watson, who is
employed by RGA International Corporation.
EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES
------------------------------------------------
The Company's total compensation philosophy, as endorsed by the
Compensation Committee, is designed to:
o provide competitive total compensation opportunities that will
attract, retain and motivate high-performing executives;
o align the compensation plans to the Company's business strategies;
o reinforce the Company's pay for performance culture by making a
significant portion of compensation variable and based on company,
business unit and individual performance; and
o align the financial interests of the Company's executives and its
shareholders through stock-based incentives and by building
executive ownership in the Company.
In forming its recommendations on the Company's overall compensation
program, the Compensation Committee has from time to time engaged an
independent consulting firm to provide advice about competitive compensation
practices and determine how the Company's executive compensation compares to
that of other comparable companies, including publicly held insurance and
reinsurance companies.
BASE SALARIES
-------------
In February 2005, based upon an analysis of executive compensation,
the Committee approved salary increases for the executive officers that
averaged 5.0%. 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 2005. Based upon that
review, the Committee increased Mr. Woodring's salary by 5.0%, to $657,000.
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.
12
In February 2006, the Committee determined the MIP awards for 2005.
The Company's revenue growth in fiscal 2005 exceeded the amount for minimum
bonus awards, under that performance measure of the MIP formula, but did not
reach the amount for target bonus awards. The Company's operating earnings
in fiscal 2005 did not reach the amount for minimum bonus awards, under that
measure of the MIP formula. Based on consolidated results, the average cash
bonus award under the MIP to executive officers was approximately 12.5% of
their total compensation (salary and cash bonus). Mr. Woodring's cash bonus
award under the MIP, which is based solely on Company results for 2005, was
$86,829, or approximately 12% of his total compensation for the year.
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.
As stated above, the Company exceeded the minimum amount for
revenue growth but did not meet the minimum amount for operating earnings in
fiscal 2005. Based on these results, in January 2006 the Board of Directors
approved a profit sharing award of 0.50%. Mr. Woodring, who participates in
the profit sharing program, received a profit sharing award of $6,335 for
2005.
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 2005 the Committee awarded a total of
291,100 options for Common Stock, including 81,788 to the Company's
executive officers. The Committee also approved awards of 125,512
performance contingent restricted stock ("PCRS"), which are restricted
shares that are converted to shares of Common Stock contingent upon
achievement of specified goals at the end of a 3-year performance period
that began on January 1, 2005 and will end on December 31, 2007. The awards
were made pursuant to the terms of the Flexible Stock Plan and an award
agreement. Mr. Woodring was awarded 29,492 options and 12,446 PCRS.
The Compensation Committee has established as performance goals for
the award of PCRS annual operating earnings (net income from continuing
operations less realized capital gains and losses and certain other
non-operating items) per share and annual consolidated revenues. The
Compensation Committee also sets award levels with a minimum level of
performance that must be met before any award to the individual can be made,
a target and a maximum. If the Company does not meet certain performance
goals, the PCRS awards will not be made, and if the Company exceeds those
performance goals, the award can be as much as 200% of the targeted award
opportunity. The awards are contingent upon the recipient's employment
status at the end of the 3-year performance period. Incentive awards 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 incentive awards as an important means of aligning the
economic interests of management and shareholders.
13
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.
PERQUISITES
-----------
The Company does not provide executive officers or their families
with perquisites such as planes, cars, or apartments, and does not reimburse
executive officers or any of its employees for personal-benefit perquisites
such as club dues or other social memberships. Executive officers and
employees may seek reimbursement for business related expenses in accordance
with the Company's business expense reimbursement policy.
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
Alan C. Henderson, Chairman
William J. Bartlett
J. Cliff Eason
Stuart I. Greenbaum
14
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 2005.
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 2005 $653,423 $87,354 -- 29,492 $16,310
President and Chief 2004 639,923 617,836 34,335 64,030
Executive Officer 2003 560,000 1,011,000 -- 82,081 42,775
David B. Atkinson 2005 $412,799 $47,196 -- 12,640 $27,043
Executive Vice President and 2004 412,307 229,956 14,580 44,164
Chief Operating Officer 2003 380,000 460,162 -- 34,811 24,883
Jack B. Lay 2005 $343,269 $39,607 -- 10,533 $24,604
Executive Vice President and 2004 339,615 281,556 12,150 35,438
Chief Financial Officer 2003 307,115 266,500 -- 27,025 26,209
Paul A. Schuster 2005 $343,269 $39,607 -- 10,533 $20,577
Executive Vice President, U.S. 2004 338,077 281,556 12,150 30,662
Operations 2003 295,192 258,000 -- 25,192 20,006
Graham Watson 2005 $410,000 $54,140 -- 10,533 $7,746
EVP, International and Chief 2004 390,000 386,558 12,150 6,864
Marketing Officer - RGA; 2003 250,000 533,618 -- 45,495 5,975
CEO, RGA International Corp.
------------------------
(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. Mr. Watson is not a U.S. citizen, and
is not eligible to participate in such plan.
(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 $86,829 for Mr. Woodring,
$46,671for Mr. Atkinson, $39,082 for Mr. Lay, $39,082 for Mr. Schuster,
and $50,315 for Mr. Watson for 2005. 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 $525 for 2005, $4,356 for 2004 and $3,000 for 2003. The amount
shown for Mr. Watson for 2003 also includes a Canadian production bonus
of $300,366 (see "Executive Compensation - Other Employment
Arrangements"); and for 2005, 2004, and 2003, $3,825, $31,658, and
$20,739, 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, the value of the following number of performance
shares granted in February 2004 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 performance shares; Mr.
Atkinson - 2,628 performance shares; Mr. Lay - 1,930 performance
shares; Mr. Schuster - 1,868 performance shares; and Mr. Watson - 1,557
performance shares. In February 2004, the Compensation Committee
decided not to make further awards of performance shares under the
Executive Performance Share Plan, therefore, the 2005 and 2004 bonus
amounts do not include any value relating to performance shares.
(4) See "Executive Compensation - Option Grants in Last Fiscal Year."
(5) For Messrs. Woodring, Atkinson, Lay, and Schuster, amount includes
contributions made by RGA Re in 2005, 2004, and 2003, to the officers'
accounts in the RGA Re Profit Sharing Plan and the RGA Re Augmented
Benefit Plan. Amounts for Mr. Watson represent contributions made to
his account by RGA Canada under its Retirement Plan.
15
EQUITY INCENTIVE GRANTS IN LAST FISCAL YEAR
Stock Options. 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 following table
sets forth certain information concerning grants of stock options made
during 2005 to the named executive officers pursuant to the Flexible Stock
Plan.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
--------------------------
AT ASSUMED ANNUAL RATES
-----------------------
% OF TOTAL OF STOCK PRICE APPRECIATION
---------- ---------------------------
NUMBER OF SECURITIES GRANTED TO EXERCISE OR FOR OPTION TERM(3)
-------------------- ---------- ----------- ------------------
UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
------------------ ------------ ----------- ----------
NAME GRANTED (#)(1) FISCAL YEAR ($/SH)(2) DATE 5%($) 10%($)
---- -------------- ----------- --------- ---- ----- ------
A. Greig Woodring 29,492 options 10.1% $47.47 1/27/2015 $880,443 $2,231,216
David B. Atkinson 12,640 options 4.3% $47.47 1/27/2015 $377,350 $956,279
Jack B. Lay 10,533 options 3.6% $47.47 1/27/2015 $314,448 $796,874
Paul A. Schuster 10,533 options 3.6% $47.47 1/27/2015 $314,448 $796,874
Graham Watson 10,533 options 3.6% $47.47 1/27/2015 $314,448 $796,874
(1) The options become exercisable in 25% increments on each of December
31, 2006, 2007, 2008 and 2009. 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
2005.
(2) 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 2005.
(3) 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.
Long-Term Incentive Awards. The Compensation Committee approved the
grant of a target award of performance contingent restricted stock on
January 27, 2005. The awards were made pursuant to the terms of the Flexible
Stock Plan and an award agreement. The Compensation Committee has
established as performance goals annual operating earnings (net income from
continuing operations less realized capital gains and losses and certain
other non-operating items) per share and annual consolidated revenues. The
Compensation Committee also sets award levels with a minimum level of
performance that must be met before any award to the individual can be made,
a target and a maximum. If the Company does not meet certain performance
goals, the awards will not be made, and if the Company exceeds those
performance goals, the award can be as much as 200% of the targeted award
opportunity. The awards are contingent upon the recipient being in the
Company's employ at the end of the 3-year performance period. The following
table shows information with respect to performance contingent restricted
stock awards that were granted during the past fiscal year to the named
executive officers.
16
LONG TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
----------------------------------------
PRICE-BASED PLANS
-----------------
NUMBER OF SHARES, PERFORMANCE OR OTHER PERIOD
NAME UNITS OR OTHER RIGHTS(#) UNTIL MATURATION OR PAYOUT THRESHOLD(#) TARGET(#) MAXIMUM(#)
---- ------------------------ --------------------------- ------------ --------- ----------
A. Greig Woodring 12,446 3 years 6,223 12,446 24,892
David B. Atkinson 5,334 3 years 2,667 5,334 10,668
Jack B. Lay 4,445 3 years 2,223 4,445 8,890
Paul A. Schuster 4,445 3 years 2,223 4,445 8,890
Graham Watson 7,000 3 years 3,500 7,000 14,000
AGGREGATED OPTION/PERFORMANCE SHARE EXERCISES AND FISCAL YEAR-END OPTION VALUES
The table below provides certain information for each of the named
executive officers concerning exercises of options during 2005 and the value
of unexercised options at December 31, 2005.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED ON VALUE DECEMBER 31, 2005 (1) DECEMBER 31, 2005 (2)
NAME EXERCISE (#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------ ----------- ------------------------- -------------------------
A. Greig Woodring 0 options $0 280,952 / 145,990 $5,588,188 / $1,912,430
David B. Atkinson 0 options $0 102,616 / 61,865 $1,903,900 / $808,493
Jack B. Lay 0 options $0 87,212 / 47,397 $1,678,611 / $600,184
Paul A. Schuster 0 options $0 74,501 / 46,673 $1,390,326 / $583,103
Graham Watson 64,085 options $1,516,056 42,496 / 57,394 $656,362 / $809,202
---------------------
(1) The Company granted stock options to senior management, including each
of the named executive officers, in January 2005. The 2006 option
grants, which are not currently exercisable, are not reflected in the
table.
(2) Represents the difference between the December 31, 2005 closing price
of the Company's Common Stock ($47.76) and the exercise price of the
option, multiplied by the number of shares underlying the option.
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
17
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
$90,000 for 2005. 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, 2005, 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, $392,212; Mr. Atkinson,
$133,195; Mr. Lay, $72,877, and Mr. Schuster, $71,790. Mr. Watson is not
eligible to participate in the Pension Plan or the RGA Augmented Plan,
however, he participates 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.
18
OTHER EMPLOYMENT ARRANGEMENTS
The Company agreed to pay Mr. Watson a production bonus through
December 31, 2003, 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, 2000 and ending December 31, 2005. 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]
Cumulative Total Return
-------------------------------------------------------------------
12/00 12/01 12/02 12/03 12/04 12/05
----- ----- ----- ----- ----- -----
Reinsurance Group of America,
Incorporated 100.00 94.39 77.44 111.34 140.49 139.60
S & P 500 100.00 88.12 68.64 88.33 97.94 102.75
S & P Life & Health Insurance 100.00 92.27 77.29 98.23 119.98 147.00
Copyright (C) 2002, Standard & Poor's, a division of The McGraw-Hill Companies, Inc. All rights reserved.
19
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2005 the Compensation Committee was comprised of Messrs.
Henderson, Bartlett, Eason, and Greenbaum. 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
On January 6, 2000, MetLife acquired 100% of GenAmerica Financial
Corporation (the Company's predecessor parent), including its beneficial
ownership of RGA shares, which was approximately 48% at December 31, 1999.
This acquisition, together with direct investments in the Company in 1999,
2002 and 2003, made MetLife the Company's majority shareholder with
beneficial ownership of approximately 52.8% of all outstanding shares as of
February 1, 2006. Currently, three of the Company's eight directors are
officers of MetLife.
Reinsurance Business. The Company has direct policies and
reinsurance agreements with MetLife and certain of its affiliates. Under
these agreements, the Company had net premiums of approximately $226.7
million in 2005, $164.4 million in 2004, and $157.9 million in 2003. The net
premiums reflect the net business assumed from and ceded to such affiliates
of MetLife. The pre-tax income on this business was approximately $14.7
million in 2005, $36.5 million in 2004, and $19.4 million in 2003. The
reinsurance treaties with MetLife are generally terminable by either party
on 90 days written notice, but only with respect to future new business;
existing business generally is not terminable, unless the underlying
policies terminate or are recaptured. Under these treaties, MetLife is
permitted to reassume all or a portion of the risk formerly ceded us after
an agreed-upon period of time or in some cases due to changes in our
financial condition or ratings. Recapture of business previously ceded does
not affect premiums ceded prior to the recapture of such business, but would
reduce premiums in subsequent periods.
Registration Rights. On November 24, 2003, the Company, MetLife,
Metropolitan Life, General American and Equity Intermediary Company, which
is now dissolved, entered into a registration rights agreement, which
superseded then existing agreements with General American and Equity
Intermediary Company. Under the terms of the agreement, MetLife and its
affiliates were entitled, subject to certain limitations and conditions, to
"piggyback" and demand registration rights and the Company was required to
bear certain expenses associated with the registration of any shares held by
MetLife or its affiliates. In March 2005, the Company registered the shares
held by MetLife on a Form S-3 registration statement. The Company paid a
registration fee to the SEC of approximately $173,200 in connection with the
registration, and incurred certain other legal and accounting expenses to
register the shares. Although the MetLife shares are now registered, various
other provisions of the agreement remain operable.
Administrative Services. General American Life Insurance Company,
which is referred to as "General American," and MetLife have historically
provided the Company and its subsidiary, RGA Reinsurance, with certain
limited administrative services, such as corporate risk management and
corporate travel services. The cost of these services was approximately $1.7
million in 2005, $1.0 million in 2004, and $1.0 million in 2003.
Effective January 1, 1997, General American entered into an
Administrative Services agreement with RGA Reinsurance whereby General
American provides services necessary to handle the policy and treaty
administration functions for certain bank-owned life insurance policies. RGA
Reinsurance paid General American approximately $30,000 in 2005, $385,000 in
2004 and $400,000 in 2003.
20
Product License Agreement. RGA Reinsurance has a product license
and service agreement with MetLife, which is terminable by either party on
30 days notice. Under this agreement, the Company has licensed the use of
its electronic underwriting product to MetLife and provides Internet hosting
services, installation and modification services for the product. Revenue
under this agreement from MetLife was approximately $1.6 million in 2005,
$3.5 million in 2004, and $3.2 million in 2003.
EQUITY COMPENSATION PLAN INFORMATION
The following table presents Equity Compensation Plan information
as of December 31, 2005:
-----------------------------------------------------------------------------------------------
NUMBER OF SECURITIES NUMBER OF SECURITIES
TO BE ISSUED UPON WEIGHTED-AVERAGE REMAINING AVAILABLE
EXERCISE OF EXERCISE PRICE OF FOR ISSUANCE UNDER
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, EQUITY COMPENSATION
WARRANTS AND RIGHTS WARRANTS AND RIGHTS PLANS
PLAN CATEGORY (a) (b) (c)
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EQUITY COMPENSATION
PLANS APPROVED BY
SECURITY HOLDERS 3,073,955(1) $31.90(2)(3) 1,278,158(4)
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EQUITY COMPENSATION
PLANS NOT APPROVED BY
SECURITY HOLDERS -- -- --
-----------------------------------------------------------------------------------------------
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TOTAL 3,073,955 $31.90(2)(3) 1,278,158
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(1) Includes the number of securities to be issued upon exercises under the
following plans: Flexible Stock Plan - 3,001,346; Flexible Stock Plan
for Directors - 47,366; and Phantom Stock Plan for Directors - 25,243.
(2) Does not include 249,959 performance contingent units to be issued
under the Flexible Stock Plan, or 25,243 phantom units to be issued
under the Phantom Stock Plan for Directors because those securities do
not have an exercise price (i.e., a 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) Reflects the blended weighted-average exercise price of outstanding
options under the Flexible Stock Plan ($31.92) and Flexible Stock Plan
for Directors ($31.18).
(4) Includes the number of securities remaining available for future
issuance under the following plans: Flexible Stock Plan - 1,133,892;
Flexible Stock Plan for Directors - 108,653; and Phantom Stock Plan for
Directors - 35,613.
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 2006 Annual Meeting is required to elect
directors under Item 1 and to act on any other matters properly brought
before the meeting (other than the other specified proposals). Voting
results will be disclosed in the Company's Form 10-Q for the period ending
June 30, 2006. 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 in the discretion of
the persons named as proxies on such other business as may properly come
before the meeting.
21
As of February 1, 2006, MetLife beneficially owned approximately
52.8% 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 Item 1.
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, 2005, and the Company
expects to select this firm again for the year ending December 31, 2006. A
representative of Deloitte is expected to be present at the 2006 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, 2005 and 2004, 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
2005 2004
Audit Fees (a) $3,250,971 $2,668,194
Audit Related Fees (b) 412,762 93,500
---------- ----------
Total audit and audit-related fees 3,663,733 2,761,694
Tax Fees (c) 231,399 570,100
All Other Fees 0 0
---------- ----------
Total Fees $3,895,132 $3,331,794
========== ==========
(a) Includes fees for the audit of the Company's and its subsidiaries annual
financial statements, reviews of the Company's quarterly financial
statements, and Sarbanes-Oxley Section 404 attestation.
(b) Includes fees for services rendered by the Deloitte Entities for matters
such as employee benefit plan audits, assistance with internal control
reporting requirements, and services associated with SEC registration
statements, periodic reports and securities offerings.
(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.
22
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,
2005, for filing with the SEC.
THE AUDIT COMMITTEE
William J. Bartlett, Chairman
J. Cliff Eason
Stuart I. Greenbaum
Alan C. Henderson
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 that 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.
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.
23
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 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.
Shareholder proposals submitted under the process prescribed by the
SEC (in Rule 14a-8 of the Exchange Act) for presentation at the 2006 Annual
Meeting must be received by the Company by December 13, 2006 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 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.
24
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. None of the
non-management directors attended the 2005 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.
25
Please
Mark Here / /
for Address
Change or
Comments
SEE REVERSE SIDE
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
1. ELECTION OF DIRECTORS
01 Stuart I. Greenbaum
02 Leland C. Launer, Jr.
03 Georgette A. Piligian
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.)
PLEASE SIGN AS REGISTERED AND RETURN PROMPTLY TO:
REINSURANCE GROUP OF AMERICA, INCORPORATED, MIDTOWN STATION, PO BOX 870,
NEW YORK, NY 10138
The undersigned hereby acknowledges receipt of the Notice of the
2006 Annual Meeting of Stockholders and the accompanying Proxy
Statement.
This proxy will be voted as specified. If no specification is made, this
proxy will be voted FOR Item 1.
Dated:__________________________________________________________, 2006
______________________________________________________________________
Signature
______________________________________________________________________
Signature if held jointly
If Stock is owned in joint names, both owners must sign. If address at
left is incorrect, please write in the correct information.
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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 TELEPHONE MAIL
http://www.proxyvoting.com/rga 1-866-540-5760
Use the internet to vote your proxy. Use any touch-tone telephone to Mark, sign and date
Have your proxy card in hand when OR vote your proxy. Have your proxy OR your proxy card
you access the web site. card in hand when you call. 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, James E. Sherman and
William L. Hutton, or any 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 24, 2006, commencing at 2:00 p.m., St. Louis
time, at the Company's offices at 1370 Timberlake Manor Parkway, St. Louis,
Missouri, and at any and all adjournments and postponements of said meeting,
and to vote all the shares of Common Stock of the Company standing on the
books of the Company in the name of the undersigned as specified and in
their discretion on such other business as may properly come before the
meeting.
PLEASE COMPLETE, SIGN AND DATE OTHER SIDE AND RETURN PROMPTLY.
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ADDRESS CHANGE/COMMENTS (MARK THE CORRESPONDING BOX ON THE REVERSE SIDE)
------------------------------------------------------------------------
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FOLD AND DETACH HERE
April 12, 2006
Dear Shareholder:
We invite you to attend the 2006 Annual Meeting of Stockholders of
Reinsurance Group of America, Incorporated, to be held on May 24, 2006 at
the Company's offices at 1370 Timberlake Manor Parkway, 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 19 of the proxy statement contains a Performance Graph. The
information contained within the graph is presented in a tabular format
immediately following the graph.