UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
AMENDMENT NO. 1
X Annual report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934 for the fiscal year ended December 31, 2004
Transition report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934
Commission file number 1-11848
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact name of registrant as specified in its charter)
MISSOURI 43-1627032
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1370 TIMBERLAKE MANOR PARKWAY, CHESTERFIELD, MISSOURI 63017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (636) 736-7439
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
---------------------------------------- ------------------------
Common Stock, par value $0.01 New York Stock Exchange
Trust Preferred Income Equity Redeemable
Securities (PIERS sm) Units New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes X No ___
The aggregate market value of the stock held by non-affiliates of the
registrant, based upon the closing sale price of the Common Stock on June 30,
2004, as reported on the New York Stock Exchange was approximately $1.2 billion.
As of January 31, 2005, Registrant had outstanding 62,497,915 shares of common
stock.
EXPLANATORY NOTE
RGA is filing this Form 10-K/A to amend Part III of the Annual Report filed on
Form 10-K for the fiscal year ended December 31, 2004, which was previously
filed with the Securities and Exchange Commission on March 3, 2005 (the "Form
10-K"), to include information that was to be incorporated by reference from its
definitive proxy statement in connection with its annual meeting pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended ("Exchange
Act"). RGA is amending and restating in their entirety Items 10, 11, 12, 13 and
14 of Part III of its Form 10-K. In addition, the cover page and the list of
exhibits of the Form 10-K have been updated and amended.
In connection with the filing of this Form 10-K/A and pursuant to Rules 12b-15,
13a-14(a) and 13a-14(b) under Exchange Act, RGA is including currently dated
certifications. Except as described above, no other amendments are being made to
the Form 10-K. This Form 10-K/A does not reflect events occurring after the
filing of Form 10-K or modify or update the disclosure contained therein in any
way other than as required to reflect the amendments discussed above.
2
REINSURANCE GROUP OF AMERICA, INCORPORATED
AMENDMENT NO. 1 TO FORM 10-K
YEAR ENDED DECEMBER 31, 2004
INDEX
ITEM PAGE
NUMBER OF THIS FORM
------ ------------
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.................................. 4
11. EXECUTIVE COMPENSATION.............................................................. 9
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS...................................... 14
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................................... 18
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.............................................. 20
3
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Board of Directors is divided into three classes, each of which
generally consists of either two or three directors, with terms of office ending
in successive years. William A. Peck, M.D., retired from the Board on May 26,
2004, and William J. Bartlett was elected to fill the vacancy created by Dr.
Peck's retirement. Stuart G. Nagler retired from the Board on July 23, 2004, and
the Board has not filled the vacancy. Currently, the Board has eight directors,
with two vacancies. Certain information with respect to the directors is
included below. Each of the directors has served in his or her principal
occupation for the last five fiscal years, unless otherwise noted.
SERVED AS
DIRECTORS DIRECTOR
--------- SINCE
---------
CURRENT TERM ENDS IN 2005:
J. Cliff Eason, 57 1993
Retired President of Southwestern Bell Telephone, SBC Communications, Inc. ("SBC"), a
position he held from September 2000 through January 2001. He served as President,
Network Services, of 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.
2002
Joseph A. Reali, 52
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.
CURRENT TERM ENDS IN 2007:
William J. Bartlett, 55 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
4
(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.
2002
Alan C. Henderson, 59
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.
1993
A. Greig Woodring, 53
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.
CURRENT TERM ENDS IN 2006:
1997
Stuart I. Greenbaum, 68
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., 49 2003
President, Institutional Business of Metropolitan Life, Executive Vice
President and Chief Investment Officer of MetLife and Metropolitan Life
from July 2003 to March 2005, prior to which he was a Senior Vice
President of Metropolitan Life for more than five years.
Lisa M. Weber, 42 2003
President, Individual Business of Metropolitan Life since June 2004. Ms. Weber was
Senior Executive Vice President and Chief Administrative Officer of MetLife and
Metropolitan Life from June 2001 to June 2004. 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.
5
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held a total of four regular and three special
meetings during 2004. Each incumbent director attended at least 75% of the
meetings of the Board and committees on which he or she served during 2004. 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 2004, and consisted of Messrs.
Greenbaum (Chairman), Eason, Henderson, Peck (until his retirement May 26), and
Bartlett (elected to the Committee July 23). 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, 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 website does not constitute a part of
this Annual Report on Form 10-K.
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 six times during 2004 and consisted of
Messrs. Eason (Chairman), Greenbaum, Henderson, Peck (until his retirement May
26), and Bartlett (elected to the Committee July 23). 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 website does
not constitute a part of this Annual Report on Form 10-K. 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 five times in 2004, and consisted of
Messrs. Peck (Chairman and member until his retirement May 26, 2004), Eason,
Greenbaum, Henderson (elected as Chairman effective May 26, 2004) and Bartlett
(elected to the Committee July 23). 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
6
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 website does not
constitute a part of this Annual Report on Form 10-K. 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.
EXECUTIVE OFFICERS
The following is certain additional information concerning each
executive officer of the Company who is not also a director. With the exception
of Messrs. Schuster and Watson, each individual holds the same position at RGA,
Reinsurance Company of Missouri, Incorporated ("RCM"), and RGA Reinsurance
Company ("RGA Re").
David B. Atkinson, 51, became President and Chief Executive Officer of
RGA Reinsurance Company in January 1998. Mr. Atkinson has served as Executive
Vice President and Chief Operating Officer of RGA since January 1997. He served
as Executive Vice President and Chief Operating Officer, U.S. operations from
1994 to 1996, and Executive Vice President and Chief Financial Officer from 1993
to 1994. Prior to the formation of RGA, Mr. Atkinson served as Reinsurance
Operations Vice President of General American. Mr. Atkinson joined General
American in 1987 as Second Vice President and was promoted to Vice President
later the same year. Prior to joining General American, he served as Vice
President and Actuary of Atlas Life Insurance Company from 1981 to 1987, as
Chief Actuarial Consultant at Cybertek Computer Products from 1979 to 1981, and
in a variety of actuarial positions with Occidental Life Insurance Company of
California from 1975 to 1979. Mr. Atkinson also serves as a director and officer
of several RGA subsidiaries.
Todd C. Larson, 41, is Senior Vice President, Controller and Treasurer.
Prior to joining the Company in 1995, Mr. Larson was Assistant Controller at
Northwestern Mutual Life Insurance Company from 1994 through 1995 and prior to
that position was an accountant for KPMG LLP. Mr. Larson also serves as a
director and officer of several RGA subsidiaries.
Jack B. Lay, 50, is Executive Vice President and Chief Financial
Officer. Prior to joining the Company in 1994, Mr. Lay served as Second Vice
President and Associate Controller at General American. In that position, he was
responsible for all external financial reporting as well as merger and
acquisition support. Before joining General American in 1991, Mr. Lay was a
partner in the financial services practice with the St. Louis office of KPMG
LLP. Mr. Lay also serves as a director and officer of several RGA subsidiaries.
Paul A. Schuster, 50, is Executive Vice President, U.S. Division. He
served as Senior Vice President, U.S. Division from January 1997 to December
1998. Mr. Schuster was Reinsurance Actuarial Vice President in 1995 and Senior
Vice President & Chief Actuary of the Company in 1996. Prior to the formation of
RGA, Mr. Schuster served as Second Vice President and Reinsurance Actuary of
General American. Prior to joining General American in 1991, he served as Vice
President and Assistant Director of Reinsurance Operations of the ITT Lyndon
Insurance Group from 1988 to 1991 and in a variety of actuarial positions with
General Reassurance Corporation from 1976 to 1988. Mr. Schuster also serves as a
director and officer of several RGA subsidiaries.
James E. Sherman, 51, is Executive Vice President, General Counsel and
Secretary of the Company. Prior to joining the Company in 2001, Mr. Sherman
served as Associate General Counsel of General American Life Insurance Company
from 1995 until 2000. Mr. Sherman also serves as an officer of several RGA
subsidiaries.
Graham S. Watson, 55, is Executive Vice President, International and
Chief Marketing Officer of RGA, and Chief Executive Officer of RGA International
Corporation. Upon joining RGA in 1996, Mr. Watson was President and CEO of RGA
Australia. Prior to joining RGA in 1996, Mr. Watson was the President and CEO of
Intercedent Limited in Canada and has held various positions of increasing
responsibility for other life insurance companies. Mr. Watson also serves as a
director and officer of several RGA subsidiaries.
A. Greig Woodring, 53, President and Chief Executive Officer of the
Company. Mr. Woodring also is an executive officer of General American Life
Insurance Company ("General American"). He headed General American's reinsurance
business from 1986 until the Company's formation in December 1992. He also
serves as a director and officer of a number of subsidiaries of the Company.
7
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 2004.
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, chief
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. Each of the three Codes described above is
available on the Company's website at www.rgare.com. The website does not
constitute a part of this Annual Report on Form 10-K.
Also available on the Company's website are the following other items:
Corporate Governance Guidelines, Audit Committee Charter, Compensation Committee
Charter, and Nominating and Corporate Governance Committee Charter (collectively
"Governance Documents").
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).
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.
Additional information with respect to Directors and Executive Officers
of the Company is incorporated by reference to the Proxy Statement under the
captions "Nominees and Continuing Directors", "Committees and Meetings of the
Board of Directors", and "Section 16(a) Beneficial Ownership Reporting
Compliance." The Proxy Statement will be filed pursuant to Regulation 14A within
120 days of the end of the Company's fiscal year.
8
Item 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning
the compensation awarded or paid to, or earned by, the Chief Executive Officer
and each of the other four most highly compensated named executive officers of
the Company during 2004.
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
--------------------------- ----------------------------------------------
SECURITIES ALL OTHER
BONUS ($) RESTRICTED UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) (2)(3) STOCK ($) OPTIONS(#) (4) ($) (5)
--------------------------- ---- ------------- --------- ---------- -------------- -------------
A. Greig Woodring 2004 $639,923 $617,836 34,335 $64,030
President and Chief 2003 560,000 1,011,000 -- 82,081 42,775
Executive Officer 2002 560,000 759,077 -- 70,197 29,124
David B. Atkinson 2004 $412,307 $229,956 14,580 $44,164
Executive Vice President and 2003 380,000 460,162 -- 34,811 24,883
Chief Operating Officer 2002 378,154 288,029 -- 28,831 26,766
Jack B. Lay 2004 $339,615 $281,556 12,150 $35,438
Executive Vice President and 2003 307,115 266,500 -- 27,025 26,209
Chief Financial Officer 2002 287,308 180,018 -- 19,195 17,605
Paul A. Schuster 2004 $338,077 $281,556 12,150 $30,662
Executive Vice President, U.S. 2003 295,192 258,000 -- 25,192 20,006
Operations 2002 273,462 223,000 -- 20,762 15,956
Graham Watson 2004 $390,000 $386,558 12,150 $6,864
Executive Vice President, 2003 250,000 533,618 -- 45,495 5,975
International and Chief 2002 232,692 416,349 -- 17,236 4,331
Marketing Officer
------------------------
(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 $613,480 for Mr. Woodring, $225,600 for Mr.
Atkinson, $277,200 for Mr. Lay, $277,200 for Mr. Schuster, and $354,900
for Mr. Watson for 2004. 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 $4,356
for 2004 and $3,000 for 2003 and 2002. The amounts shown for Mr. Watson
for 2003 and 2002 also include a Canadian production bonus of $300,366
and $258,797, respectively (see "Executive Compensation - Other
Employment Arrangements"); and for 2004, 2003, and 2002, $31,658,
$20,739, and $16,538, 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 and 2002, the value of the following number of
performance shares granted in February 2004 and March 2003,
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 and 7,946 performance shares; Mr. Atkinson - 2,628
and 3,235 performance shares; Mr. Lay - 1,930 and 2,093 performance
shares; Mr. Schuster - 1,868 and 1,951 performance shares; and Mr.
Watson - 1,557 and 1,667 performance shares.
(4) See "Executive Compensation - Option/Performance Share Grants in Last
Fiscal Year."
(5) For Messrs. Woodring, Atkinson, Lay, and Schuster, amount includes
contributions made by RGA Re in 2004, 2003, and 2002 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.
9
EQUITY INCENTIVE 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 Compensation Committee terminated awards under the Executive
Performance Share Plan in February 2004. The following table sets forth certain
information concerning grants of options and restricted stock made during 2004
to the named executive officers pursuant to the Flexible Stock Plan.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF SECURITIES GRANTED TO EXERCISE AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS & EMPLOYEES OR OF STOCK PRICE APPRECIATION
PERFORMANCE SHARES IN BASE PRICE EXPIRATION FOR OPTION TERM (3)
NAME GRANTED (#)(1) FISCAL YEAR ($/SH)(2) DATE 5%($) 10% ($)
----------------- -------------------- ----------- ---------- ---------- --------- ----------
A. Greig Woodring 34,335 options 11.1% $39.61 1/28/2014 $855,303 $2,167,505
David B. Atkinson 14,580 options 4.7% $39.61 1/28/2014 $363,195 $ 920,408
Jack B. Lay 12,150 options 4.0% $39.61 1/28/2014 $302,663 $ 767,007
Paul A. Schuster 12,150 options 4.0% $39.61 1/28/2014 $302,663 $ 767,007
Graham Watson 12,150 options 4.0% $39.61 1/28/2014 $302,663 $ 767,007
-----------------------
(1) The options become exercisable in 25% increments on each of December 31,
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 2004.
(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
2004.
(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.
10
LONG TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
The Compensation Committee approved the grant of a target award of
performance-contingent restricted stock on January 28, 2004. 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.
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK PRICE
-BASED PLANS
----------------------------------------------
NUMBER OF SHARES,
UNITS OR OTHER PERFORMANCE OR OTHER PERIOD
NAME RIGHTS (#) UNTIL MATURATION OR PAYOUT THRESHOLD (#) TARGET (#) MAXIMUM (#)
----------------- ---------------- --------------------------- ------------- ---------- -----------
A. Greig Woodring 14,490 3 years 0 14,490 28,980
David B. Atkinson 6,150 3 years 0 6,150 12,300
Jack B. Lay 5,130 3 years 0 5,130 10,260
Paul A. Schuster 5,130 3 years 0 5,130 10,260
Graham Watson 7,000 3 years 0 7,000 14,000
11
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 and performance shares during
2004 and the value of unexercised options at December 31, 2004.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED ON VALUE DECEMBER 31, 2004 (2) DECEMBER 31, 2004 (3)
NAME EXERCISE (#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------ ------------------------- -------------- ------------------------- -------------------------
A. Greig Woodring 0 options $0 218,576 / 178,874 $4,625,923 / $3,140,382
16,678 performance shares $669,621
David B. Atkinson 38,598 options $879,735 74,550 / 77,291 $1,443,292 / $1,370,205
7,186 performance shares $288,504
Jack B. Lay 4,697 options $144,940 67,278 / 56,798 $1,366,292 / $995,061
5,620 performance shares $225,653
Paul A. Schuster 9,000 options $231,588 55,216 / 55,425 $1,085,202 / $961,514
8,512 performance shares $341,770
Graham Watson 0 options $0 83,924 / 69,518 $1,823,861 / $1,270,025
2,058 performance shares $82,633
---------------------
(1) Value realized for performance shares represents the entire value of the
individual's vested and unvested performance share balance, which was
paid in May 2004, following the decision by the Compensation Committee
not to make further awards of performance shares under the Executive
Performance Share Plan. The Company previously reported the value of the
performance shares, determined based on the closing price of the
Company's common stock on the date of the award, under the "Annual
Compensation - Bonus" column in the Summary Compensation Table for the
year in which the individual earned the performance shares.
(2) The Company granted stock options to senior management, including each
of the named executive officers, in January 2005. The 2005 option
grants, which are not currently exercisable, are not reflected in the
table.
(3) Represents the difference between the December 31, 2004 closing price of
the Company's Common Stock ($48.45) 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 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:
12
Age on January 1 of the Plan Year Percentage of Final Percentage of Excess
in Which the Year of Service is Average Annual Compensation
Earned Compensation Credited 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 $87,900 for 2004.
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, 2004, 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, $344,631; Mr. Atkinson, $120,524; Mr.
Lay, $58,096, and Mr. Schuster, $56,411. 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.
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."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2004 the Compensation Committee was comprised of Messrs. Eason
(Chairman), Bartlett, Greenbaum, Henderson, and Peck. 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.
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 2004, this group of directors consisted of
Messrs. Nagler, Reali, Launer, and Woodring, 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, who receives an annual retainer fee of
$32,000), and are paid $1,200 for each Board meeting attended in person, $600
for each telephonic Board meeting attended, $750 for each committee meeting
attended in person (except the committee chairman, who is paid $1,200
13
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). During 2004, the group of Non-Employee Directors
consisted of Messrs. Bartlett, 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 1,200
shares of restricted stock, which vest one-third per year for three years. On
January 28, 2004, each of Messrs. Eason, Greenbaum, and Henderson were granted
1,200 shares of restricted stock. On that same date, Dr. Peck was granted a
pro-rated award of 500 shares of restricted stock. Upon his election to the
Board on May 26, 2004, Mr. Bartlett was granted a pro-rated award of 700 shares
of restricted stock. The grants made on January 28, 2004 will fully vest on
January 28, 2007.
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 1,600 shares of restricted stock.
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.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS
OWNERSHIP OF SHARES OF RGA
The following table sets forth, as of February 1, 2005, 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 of the Company, (ii) each
executive officer of the Company named in the Summary Compensation Table
contained in Item 11 above, and (iii) all directors and executive officers as a
group.
14
AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER (2) BENEFICIAL OWNERSHIP (1) CLASS (2)
----------------------------------------------------------- ------------------------ ----------
SIGNIFICANT SHAREHOLDERS:
MetLife, Inc. 32,243,539 (3) 51.6%
One Madison Avenue
New York, New York 10010
Wellington Management Company, LLP 5,274,034 (4) 8.5%
75 State Street
Boston, Massachusetts 02109
Kayne Anderson Rudnick Investment Management, LLC 4,340,067 (5) 6.9%
1800 Avenue of the Stars, Second Floor
Los Angeles, California 90067
Neuberger Berman, LLC. 3,314,960 (6) 5.3%
605 Third Ave.
New York, New York 10158
DIRECTORS AND NAMED EXECUTIVE OFFICERS:
A. Greig Woodring, Director, President and Chief Executive 316,486 (7) *
Officer (3)
William J. Bartlett, Director 1,900 (8) *
J. Cliff Eason, Director 15,150 (9) *
Stuart Greenbaum, Director 21,033 (10) *
Alan C. Henderson, Director 9,396 (11) *
Leland C. Launer, Jr., Director (3) -- (12) **
Joseph A. Reali, Director (3) -- (12) **
Lisa M. Weber, Director (3) -- (12) **
David B. Atkinson, Executive Vice President and Chief 135,519 (13) *
Operating Officer
Jack B. Lay, Executive Vice President and Chief Financial *
Officer 95,720 (14)
Paul A. Schuster, Executive Vice President, U.S. Operations *
89,088 (15)
Graham Watson, Executive Vice President and Chief Marketing 74,311 (16) *
Officer
All directors and executive officers 807,489 (17) 1.28%
as a group (14 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, Metropolitan Life Insurance Company, General American Life
Insurance Company and GenAmerica Finance, LLC contained in a Schedule
13D filed with the Securities and
15
Exchange Commission on December 3, 1999, as amended. Each of the
filing companies shares voting and dispositive power with each other.
Mr. Woodring is an executive officer of General American Life
Insurance Company. Mr. Launer and Ms. Weber are executive officers of
MetLife, and Mr. Reali is a senior officer of MetLife. These
individuals disclaim beneficial ownership of the shares beneficially
owned by MetLife and its subsidiaries.
(4) As reported on a Schedule 13G/A filed February 14, 2005. 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 4,223,973 shares
and shared dispositive power of 5,244,634 shares.
(5) As reported on a Schedule 13G filed February 4, 2005. 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) As reported on a Schedule 13G/A filed February 14, 2005, as amended by
Amendment No. 1 to Schedule 13G filed February 17, 2005, Neuberger
Berman, Inc. the holding company for an investment adviser and a
registered broker-dealer. Shares are owned by several accounts managed
by Neuberger Berman and its subsidiaries. Neuberger Berman has sole
voting power over 2,377,310 shares and shared dispositive power over
all of its shares.
(7) Mr. Woodring is an executive officer of General American Life
Insurance Company. Mr. Woodring disclaims beneficial ownership of the
shares beneficially owned by MetLife and its subsidiaries. Includes
272,369 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.
(8) Includes 1,900 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.
(9) Includes 10,500 shares of Common Stock subject to stock options that
are exercisable within 60 days. Also includes 2,400 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.
(10) Includes 17,933 shares of Common Stock subject to stock options that
are exercisable within 60 days. Also includes 2,400 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.
(11) Includes 6,000 shares of common stock subject to stock options that
are exercisable within 60 days. Also includes 2,400 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.
(12) Ms. Weber and Mr. Launer are executive officers, and Mr. Reali is a
senior officer, of MetLife. Each of them disclaims beneficial
ownership of the shares beneficially owned by MetLife and its
subsidiaries.
(13) Includes 98,971 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.
(14) Includes 84,175 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.
(15) Includes 71,464 shares of Common Stock subject to stock options that
are exercisable within 60 days, and 17,624 shares for which Mr.
Schuster shares voting and investment power with his spouse.
(16) Includes 39,459 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.
(17) Includes a total of 647,196 shares of Common Stock subject to stock
options that are exercisable within 60 days; and 37,196 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.
16
OWNERSHIP OF SHARES OF METLIFE
The following table sets forth, as of February 1, 2005, 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 of
the Company; (ii) each executive officer of the Company named in the Summary
Compensation Table contained in Item 11 above; and (iii) all directors and
executive officers as a group.
BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1) PERCENT OF
---------------- --------------------------------------------- CLASS
Direct Indirect(2) ----------
----------- -----------
Leland C. Launer, Jr., Director 102,462(3) 48(4) *
Joseph A. Reali, Director 86,363(5) 170(6) *
Lisa M. Weber, Director 258,909(7) 1,782(8) *
A. Greig Woodring, Director, President & CEO 90 -- *
David B. Atkinson, EVP and COO 200(9) -- *
Jack B. Lay, EVP and CFO 200(9) -- *
Paul A. Schuster, EVP 200(9) -- *
All directors and executive officers as a group 448,824(10) 2,000 *
(14 persons)
*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 87,543 shares of MetLife common stock subject to stock
options that are exercisable within 60 days and 14,919 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 72,491 shares of MetLife common stock subject to stock
options that are exercisable within 60 days, and 10,872 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 231,643 shares of MetLife common stock subject to stock
options that are exercisable within 60 days and 27,266 deferred share
units payable in shares of MetLife common stock under MetLife's
Deferred Compensation Plan for Officers.
(8) Includes 1,772 shares held in MetLife's Savings and Investment Plan,
which may vote the shares if no voting instruction is provided to the
plan trustee.
(9) Includes 200 shares of MetLife common stock subject to stock options
that are exercisable within 60 days.
(10) Includes a total of 392,677 shares of MetLife common stock subject to
stock options that are exercisable within 60 days and 53,057 deferred
share units payable in shares of MetLife common stock under MetLife's
Deferred Compensation Plan for Officers.
17
EQUITY COMPENSATION PLAN
The following table summarizes information regarding securities
authorized for issuance under equity compensation plans:
Number of securities to be Number of securities
issued upon exercise of Weighted-average exercise remaining available for
outstanding options, price of outstanding future issuance under equity
Plan category warrants and rights options, warrants and rights compensation plans
------------- ------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security
holders 2,808,578 (1) $29.89(2)(3) 1,904,740 (4)
Equity compensation plans
not approved by security
holders -- -- --
Total 2,808,578 $29.89 1,904,740
(1) Includes the number of securities to be issued upon exercises under
the following plans: Flexible Stock Plan - 2,721,519; Flexible Stock
Plan for Directors - 65,299; and Phantom Stock Plan for Directors -
21,760
(2) Does not include 128,693 performance contingent units to be issued
under the Flexible Stock Plan or 21,760 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
Company common stock 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 ($29.86) and Flexible Stock Plan
for Directors ($31.00).
(4) Includes the number of securities remaining available for future
issuance under the following plans: Flexible Stock Plan - 1,746,500;
Flexible Stock Plan for Directors - 113,959; and Phantom Stock Plan
for Directors - 44,281.
Item 13. 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 51.6% of all outstanding shares as of January 31, 2005.
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 $164.4 million in 2004, $157.9
million in 2003, and $172.8 million in 2002. The net premiums reflect the net
business assumed from and ceded to such affiliates of MetLife, Inc. The pre-tax
income on this business was approximately $36.5 million in 2004, $19.4 million
in 2003, and $23.3 million in 2002. Our 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.
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 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 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
18
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.
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 legal, corporate risk management and corporate travel
services. The cost of these services was approximately $1.0 million in 2004,
$1.0 million in 2003 and $1.2 million in 2002.
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 $385,000 in 2004 and $400,000 in 2003. No
payments were made under this agreement in 2002.
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 $3.5 million in 2004, $3.2 million in
2003 and $400,000 in 2002.
Miscellaneous. On November 13, 2003, MetLife and certain of its
affiliates completed the purchase of 3,000,000 shares of the Company's 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.
19
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Aggregate fees billed to the Company for the fiscal years ending
December 31, 2004 and 2003, 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
2004 2003
Audit Fees (a) $2,668,194 $1,422,662
Audit-Related Fees (b) 93,500 97,343
---------- ----------
Total Audit and Audit-Related Fees 2,761,694 1,520,005
Tax Fees (c) 570,100 142,843
All Other Fees 0 0
---------- ----------
Total Fees $3,331,794 $1,662,848
========== ==========
(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.
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Reinsurance Group of America, Incorporated.
By: /s/ A. Greig Woodring
---------------------------------------
A. Greig Woodring
President and Chief Executive Officer
Date: March 18, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities indicated on March 18, 2005.
Signatures Title
---------------------------------------------------- -----------------------------------
/s/ Leland C. Launer, Jr. March 18, 2005 * Chairman of the Board and Director
----------------------------------------------------
Leland C. Launer, Jr.
/s/ A. Greig Woodring March 18, 2005 President, Chief Executive Officer,
---------------------------------------------------- and Director
A. Greig Woodring (Principal Executive Officer)
/s/ William J. Bartlett March 18, 2005 * Director
----------------------------------------------------
William J. Bartlett
/s/ J. Cliff Eason March 18, 2005 * Director
----------------------------------------------------
J. Cliff Eason
/s/ Stuart I. Greenbaum March 18, 2005 * Director
----------------------------------------------------
Stuart I. Greenbaum
/s/ Alan C. Henderson March 18, 2005 * Director
----------------------------------------------------
Alan C. Henderson
/s/ Joseph A. Reali March 18, 2005 * Director
----------------------------------------------------
Joseph A. Reali
/s/ Lisa M. Weber March 18, 2005 * Director
----------------------------------------------------
Lisa M. Weber
/s/ Jack B. Lay March 18, 2005 Executive Vice President and Chief
---------------------------------------------------- Financial Officer (Principal Financial
Jack B. Lay and Accounting Officer)
* By: /s/ Jack B. Lay March 18, 2005
------------------------------------------------
Jack B. Lay Attorney-in-fact
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INDEX TO EXHIBITS
Exhibit
Number Description
------- ---------------------------------------------------------------------------------------------------
2.1 Reinsurance Agreement dated as of December 31, 1992 between General
American Life Insurance Company ("General American") and General
American Life Reinsurance Company of Canada ("RGA Canada"),
incorporated by reference to Exhibit 2.1 to Amendment No. 1 to
Registration Statement on Form S-1 (File No. 33-58960), filed on
April 14, 1993
2.2 Retrocession Agreement dated as of July 1, 1990 between General
American and The National Reinsurance Company of Canada, as amended
between RGA Canada and General American on December 31, 1992"),
incorporated by reference to Exhibit 2.2 Amendment No. 1 to
Registration Statement on Form S-1 (File No. 33-58960), filed on
April 14, 1993
2.3 Reinsurance Agreement dated as of January 1, 1993 between RGA
Reinsurance Company ("RGA Reinsurance", formerly "Saint Louis
Reinsurance Company") and General American"), incorporated by
reference to Exhibit 2.3 to Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-58960), filed on April 14, 1993
2.4 Master Agreement by and between Allianz Life Insurance of North
America and RGA Reinsurance Company, incorporated by reference to
Exhibit 2.1 to Current Report on Form 8-K filed on October 9, 2003
(File no. 1-11848)
2.5 Life Coinsurance Retrocession Agreement by and between Allianz Life
Insurance of North America and RGA Reinsurance Company, incorporated
by reference to Exhibit 2.2 to Current Report on Form 8-K filed on
October 9, 2003 (File no. 1-11848)
3.1 Restated Articles of Incorporation, incorporated by reference to
Exhibit 3.1 of Current Report on Form 8-K filed June 30, 2004
3.2 Bylaws of RGA, as amended, incorporated by reference to Exhibit 3.2
of Quarterly Report on Form 10-Q filed August 6, 2004
4.1 Form of Specimen Certificate for Common Stock of RGA, incorporated
by reference to Exhibit 4.1 to Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-58960), filed on April 14, 1993
4.6 Form of Unit Agreement among the Company and the Trust, as Issuers
and The Bank of New York, as Agent, Warrant Agent and Property
Trustee, incorporated by reference to Exhibit 4.1 to Registration
Statement on Form 8-A12B (File No.1-11848) filed on December 18,
2001
4.7 Form of Global Unit Certificate, incorporated by reference to
Exhibit A of Exhibit 4.6 of this Report, incorporated by reference
to Registration Statement on Form 8-A12B (File No. 1-11848) filed on
December 18, 2001
4.8 Form of Warrant Agreement between the Company and the Bank of New
York, as Warrant Agent, incorporated by reference to Exhibit 4.3 to
Registration Statement on Form 8-A12B (File No. 1-11848) filed on
December 18, 2001
4.9 Form of Warrant Certificate, incorporated by reference to Exhibit A
of Exhibit 4.8 of this Report
4.10 Trust Agreement of RGA Capital Trust I, incorporated by reference to
Exhibit 4.11 to the Registration Statements on Form S-3 (File Nos.
333-55304, 333-55304-01 and 333-55304-02), filed on February 9,
2001, as amended (the "Original S-3")
22
4.11 Form of Amended and Restated Trust Agreement of RGA Capital Trust I,
incorporated by reference to Exhibit 4.7 to Registration Statement
on Form 8-A12B (File No. 1-11848) filed on December 18, 2001
4.12 Form of Preferred Security Certificate for the Trust, included as
Exhibit A to Exhibit 4.11 to this Report
4.13 Form of Remarketing Agreement between the Company, as Guarantor, and
The Bank of New York, as Guarantee Trustee, incorporated by
reference to Exhibit 4.12 to Registration Statement on Form 8-A12B
(File No. 1-11848) filed on December 18, 2001
4.14 Form of Junior Subordinated Indenture, incorporated by reference to
Exhibit 4.3 of the Original S-3
4.15 Form of First Supplemental Junior Subordinated Indenture between the
Company and The Bank of New York, as Trustee, incorporated by
reference to Exhibit 4.10 to Registration Statement on Form 8-A12B
(File No. 1-11848) filed on December 18, 2001
4.16 Form of Guarantee Agreement between the Company, as Guarantor, and
The Bank of New York, as Guarantee Trustee, incorporated by
reference to Exhibit 4.11 to Registration Statement on Form 8-A12B
(File No. 1-11848) filed on December 18, 2001
4.17 Form of Senior Indenture between Reinsurance Group of America,
Incorporated and The Bank of New York, as Trustee, incorporated by
reference to Exhibit 4.1 to the Original S-3
4.18 Form of First Supplemental Indenture between Reinsurance Group of
America, Incorporated and The Bank of New York, as Trustee, relating
to the 6 - 3/4 Senior Notes Due 2011, incorporated by reference to
Exhibit 4.8 to Form 8-K dated December 12, 2001 (File No. 1-11848),
filed December 18, 2001
10.1 Marketing Agreement dated as of January 1, 1993 between RGA
Reinsurance and General American, incorporated by reference to
Exhibit 10.1 to Amendment No. 2 to Registration Statement Form S-1
(File No. 33-58960), filed on April 29, 1993
10.2 Administrative Services Agreement dated as of January 1, 1993
between RGA and General American, incorporated by reference to
Exhibit 10.5 to Amendment No. 2 to Registration Statement Form S-1
(File No. 33-58960), filed on April 29, 1993
10.3 Management Agreement dated as of January 1, 1993 between RGA Canada
and General American, incorporated by reference to Exhibit 10.7 to
Amendment No. 1 to Registration Statement on Form S-1 (File No.
33-58960), filed on April 14, 1993 *
10.4 Standard Form of General American Automatic Agreement, incorporated
by reference to Exhibit 10.11 to Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-58960), filed on April 14, 1993
10.5 Standard Form of General American Facultative Agreement,
incorporated by reference to Exhibit 10.12 to Amendment No. 1 to
Registration Statement on Form S-1 (File No. 33-58960), filed on
April 14, 1993
10.6 Standard Form of General American Automatic and Facultative YRT
Agreement, incorporated by reference to Exhibit 10.13 to Amendment
No. 1 to Registration Statement on Form S-1 (File No. 33-58960),
filed on April 14, 1993
10.7 RGA Reinsurance Management Incentive Plan, as amended and restated
effective January 1, 2003 incorporated by reference to Proxy
Statement on Schedule 14A for the annual meeting of shareholders on
May 28, 2003, filed on April 10, 2003*
10.8 RGA Reinsurance Management Deferred Compensation Plan (ended January
1, 1995), incorporated by reference to Exhibit 10.18 to Amendment
No. 1 to Registration Statement on Form S-1 (File No. 33-58960),
filed on April 14, 1993 *
23
10.9 RGA Reinsurance Executive Deferred Compensation Plan (ended January
1, 1995), incorporated by reference to Exhibit 10.19 to Amendment
No. 1 to Registration Statement on Form S-1 (File No. 33-58960),
filed on April 14, 1993*
10.10 RGA Reinsurance Executive Supplemental Retirement Plan (ended
January 1, 1995), incorporated by reference to Exhibit 10.20 to
Amendment No. 1 to Registration Statement on Form S-1 (File No.
33-58960), filed on April 14, 1993*
10.11 RGA Reinsurance Augmented Benefit Plan (ended January 1, 1995),
incorporated by reference to Exhibit 10.21 to Amendment No. 1 to
Registration Statement on Form S-1 (File No. 33-58960), filed on
April 14, 1993*
10.12 RGA Flexible Stock Plan as amended and restated effective July 1,
1998, incorporated by reference to Form 10-K for the period ended
December 31, 2003 (File No. 1-11848), filed on March 12, 2004, at
the corresponding exhibit*
10.13 Amendment effective as of May 24, 2000 to the RGA Flexible Stock
Plan, as amended and restated July 1, 1998, incorporated by
reference to Exhibit 10.13 to Form 10-K for the period ended
December 31, 2003 (File No. 1-11848), filed on March 12, 2004*
10.14 Second Amendment effective as of May 28, 2003 to the RGA Flexible
Stock Plan, as amended and restated July 1, 1998, incorporated by
reference to Exhibit 10.14 to Form 10-K for the period ended
December 31, 2003 (File No. 1-11848), filed on March 12, 2004*
10.15 Third Amendment effective as of May 26, 2004 to the RGA Flexible
Stock Plan as amended and restated July 1, 1998, incorporated by
reference to Exhibit 10.1 to Form 10-Q for the period ended June 30,
2004 (File No. 1-11848), filed on August 6, 2004
10.16 Form of Directors' Indemnification Agreement, incorporated by
reference to Exhibit 10.23 to Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-58960), filed on April 14, 1993*
10.17 RGA Executive Performance Share Plan as amended and restated
effective November 1, 1996, incorporated by reference to Exhibit
10.17 to Form 10-K for the year ended December 31, 1996 (File No.
1-11848) filed on March 24, 1997*
10.18 RGA Flexible Stock Plan for Directors, as amended and restated
effective May 28, 2003, incorporated by reference to Proxy Statement
on Schedule 14A for the annual meeting of shareholders on May 28,
2003, filed on April 10, 2003*
10.19 RGA Flexible Stock Plan for Directors, as amended effective January
1, 2003, incorporated by reference to Proxy Statement on Schedule
14A for the annual meeting of shareholders on May 28, 2003, filed on
April 10, 2003*
10.20 Restricted Stock Award to A. Greig Woodring dated January 28, 1998,
incorporated by reference to Exhibit 10.27 to Form 10-Q/A Amendment
No. 1 for the quarter ended March 31, 1998 (File No. 1-11848) filed
on May 14, 1998*
10.21 First Amended and Restated Credit Agreement dated as of May 23, 2003
between RGA, as borrower, the financial institutions listed on the
signature pages thereof, The Bank of New York, as Administrative
Agent, Bank of America, N.A. and Fleet National Bank, as
Co-Syndication Agents, and Key Bank National Association, as
Documentation Agent, incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K dated May 23, 2003 (File No. 1-11848),
filed June 2, 2003
10.22 Amendment No. 1 dated as of October 10, 2003 to First Amended and
Restated Credit Agreement dated as of May 23, 2003 between RGA, as
borrower, the financial institutions listed on the signature pages
thereof, The
24
Bank of New York, as Administrative Agent, Bank of America, N.A. and
Fleet National Bank, as Co-Syndication Agents, and Key Bank National
Association, as Documentation Agent**
10.23 Amendment No. 2 dated as of February 25, 2005 to First Amended and
Restated Credit Agreement dated as of May 23, 2003 between RGA, as
borrower, the financial institutions listed on the signature pages
thereof, The Bank of New York, as Administrative Agent, Bank of
America, N.A. and Fleet National Bank, as Co-Syndication Agents, and
Key Bank National Association, as Documentation Agent**
10.24 Administrative Services Agreement, effective as of January 1, 1997,
by and between RGA Reinsurance and General American, incorporated by
reference to Exhibit 10.24 to Current Report on Form 8-K dated
September 24, 2001 (File No. 1-11848), filed September 24, 2001
10.25 Form of Reinsurance Group of America, Incorporated Flexible Stock
Plan Non-Qualified Stock Option Agreement, incorporated by reference
to Exhibit 10.1 to Current Report on Form 8-K dated September 10,
2004 (File No. 1-11848), filed September 10, 2004*
10.26 Form of Reinsurance Group of America, Incorporated Flexible Stock
Plan Performance Contingent Restricted Stock Agreement, incorporated
by reference to Exhibit 10.2 to Current Report on Form 8-K dated
September 10, 2004 (File No. 1-11848), filed September 10, 2004*
10.27 Registration Rights agreement dated as of November 24, 2003 between
RGA, MetLife Inc., Metropolitan Life Insurance Company, Equity
Intermediary Company, and General American, incorporated by
reference to Exhibit 10.1 to Form 8-K dated November 24, 2003 (File
No. 1-11848), filed December 3, 2003
10.28 Directors' Compensation Summary Sheet* **
10.29 Summary of the salaries for the named executive officers of the
Registrant* **
21.1 Subsidiaries of RGA**
23.1 Consent of Deloitte & Touche LLP**
24.1 Powers of Attorney for Ms. Weber and Messrs. Bartlett, Eason,
Greenbaum, Henderson, Launer, and Reali**
31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002**
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002**
* Represents a management contract or compensatory plan or arrangement required
to be filed as an exhibit to this form pursuant to Item 15(c) of this Report.
** Previously filed with, and incorporated herein by reference from, the Annual
Report on Form 10-K filed by the Company on March 3, 2005 at the corresponding
exhibit number.
25