UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 (S) 240.14a-11(c) or (S) 240.14a-12
PartnerRe Ltd.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[_] 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:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
PROXY STATEMENT
PARTNERRE LTD.
Chesney House
96 Pitts Bay Road
Pembroke HM 08, Bermuda
-----------------
ANNUAL GENERAL MEETING -- May 21, 2002
To the Shareholders of PartnerRe Ltd.:
You are cordially invited to attend the Annual General Meeting of your
Company to be held at 2:30 p.m. on Tuesday, May 21, 2002 at the Company's head
office at Chesney House, 96 Pitts Bay Road, Pembroke, Bermuda.
A report on the current affairs of the Company will be presented at the
meeting and shareholders will have an opportunity for questions and comments.
It is earnestly requested that you complete, sign, date and mail the
enclosed proxy card in the enclosed business reply envelope or vote
electronically via the Internet or telephone whether or not you plan to attend
the Annual General Meeting. See "Voting Via the Internet or By Telephone" in
the Proxy Statement for more details.
Prompt return of your proxy card will reduce the cost of further mailings
and other follow-up work. You may revoke your voted proxy at any time prior to
the meeting or vote in person if you attend the meeting.
We are grateful for your assistance and express our appreciation in advance.
Sincerely yours,
/s/ David T. McLaughlin
David T. McLaughlin
Chairman of the Board of Directors
April 1, 2002
IMPORTANT: PLEASE MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE OR VOTE
ELECTRONICALLY VIA THE INTERNET OR TELEPHONE. THE MEETING DATE IS
MAY 21, 2002.
PARTNERRE LTD.
Chesney House
96 Pitts Bay Road
Pembroke HM 08, Bermuda
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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held on May 21, 2002
-----------------
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders of
PartnerRe Ltd. (the "Company") will be held at the Company's head office at 96
Pitts Bay Road, Pembroke, Bermuda, on Tuesday, May 21, 2002, at 2:30 p.m. local
time, for the following purposes:
1. To elect three (3) directors to hold office until the annual general
meeting of shareholders in the year 2005 or until their respective
successors have been duly elected;
2. To approve an increase in the authorized share capital of the Company
from US$120,000,000 to US$ 150,000,000 by the creation of 30,000,000
undesignated shares, par value US$1.00 per share;
3. To re-appoint Deloitte & Touche, independent auditors, as the
Company's auditors for the ensuing period ending with the 2003 annual
general meeting and to refer the determination of auditors' remuneration to
the Board of Directors; and
4. To consider and take action with respect to such other matters as may
properly come before the Annual General Meeting or any adjournment or
adjournments thereof.
The Board of Directors has fixed the close of business on March 22, 2002 as
the record date for the determination of shareholders entitled to notice of,
and to vote at, the Annual General Meeting.
All shareholders are cordially invited to attend the Annual General Meeting.
By order of the Board of Directors
/s/ Christine E. Patton
Christine E. Patton
Secretary
Pembroke, Bermuda
April 1, 2002
PROXY STATEMENT
PARTNERRE LTD.
Annual General Meeting of Shareholders
May 21, 2002
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of PartnerRe Ltd. (the "Company") of proxies
from holders of the Company's common shares, par value $1.00 per share (the
"Common Shares"). The proxies will be voted at the Annual General Meeting of
Shareholders to be held on May 21, 2002 at 2:30 p.m. local time, at Chesney
House, 96 Pitts Bay Road, Pembroke, Bermuda, and at any adjournment or
adjournments thereof (the "Annual Meeting").
The mailing address of the Company is Chesney House, 96 Pitts Bay Road,
Pembroke HM 08, Bermuda, (telephone 1-441-292-0888). The Notice of Annual
General Meeting of Shareholders, the Proxy Statement and the accompanying Proxy
were first transmitted to shareholders of the Company on or about April 1, 2002.
The Board has fixed the close of business on March 22, 2002 as the record
date (the "Record Date") for determining the shareholders of the Company
entitled to receive notice of, and to vote at, the Annual Meeting. At the close
of business on the Record Date, an aggregate of 50,239,670 Common Shares were
issued and outstanding, each share entitling the holder thereof to one vote on
each matter to be voted upon at the Annual Meeting, except that if a person
(other than Swiss Reinsurance Company and its affiliates) constructively or
beneficially, directly or indirectly, owns more than 9.9% of the voting power
of the outstanding Common Shares, the voting rights with respect to such shares
will be limited, in the aggregate, to voting power of 9.9%, pursuant to a
formula specified in the Company's Bye-laws. The presence, in person or by
proxy, of the holders of a majority of the outstanding Common Shares (without
regard to the limitation on voting referred to above) is necessary to
constitute a quorum for the transaction of business at the Annual Meeting.
Proxies will be solicited initially by mail. Further solicitation may be made
by directors, officers and employees of the Company personally, by telephone or
otherwise, but such persons will not be specifically compensated for such
services. Banks, brokers, nominees and other custodians and fiduciaries will be
reimbursed for their reasonable out-of-pocket expenses in forwarding soliciting
material to their principals, the beneficial owners of Common Shares.
At the Annual Meeting, shareholders of the Company will be asked to (i)
elect three directors to serve on the Board until the annual general meeting of
shareholders in the year 2005; (ii) approve an increase in the authorized share
capital of the Company from US$120,000,000 to US$150,000,000 by the creation of
30,000,000 undesignated shares, par value US1.00 per share and (iii) re-appoint
Deloitte & Touche, independent auditors, as the Company's auditors for the
ensuing period ending with the 2003 annual general meeting and to refer the
determination of the auditors' remuneration to the Board of Directors.
Shareholders may also be asked to consider and take action with respect to
such other matters as may properly come before the Annual Meeting.
All matters referenced in this proxy statement upon which shareholders are
called to vote will be decided by a simple majority of votes cast. A hand vote
will be taken unless a poll is requested pursuant to the Company's Bye-laws.
A copy of the Company's Annual Report for the year ended December 31, 2001
is being mailed to shareholders together with this Proxy Statement. The
financial statements of the Company for the year ended December 31, 2001
contained in the Annual Report and the Management's Discussion and Analysis of
Financial Condition and Results of Operations for the year ended December 31,
2001 are specifically incorporated herein by reference and made a part hereof.
1
SOLICITATION AND REVOCATION
PROXIES IN THE FORM ENCLOSED ARE SOLICITED BY, OR ON BEHALF OF, THE BOARD OF
DIRECTORS OF THE COMPANY. THE PERSONS NAMED IN THE FORM OF PROXY HAVE BEEN
DESIGNATED AS PROXIES BY THE BOARD OF DIRECTORS. Such persons designated as
proxies are the Chairman of the Board of Directors and the President and Chief
Executive Officer of the Company. A shareholder desiring to appoint some other
person to represent him at the Annual Meeting may do so either by inserting
such person's name in the blank space provided in the enclosed Form of Proxy,
or by completing another form of proxy and, in either case, delivering the
completed Proxy to the Secretary of the Company at the address indicated above,
before the time of the Annual Meeting. It is the responsibility of the
shareholder appointing some other person to represent him to inform such person
of this appointment.
Common Shares represented at the Annual Meeting by a properly executed and
returned Proxy will be voted at the Annual Meeting in accordance with
instructions noted thereon, or if no instructions are noted, the Proxy will be
voted in favor of the proposals set forth in the Notice of Annual Meeting. If a
shareholder appoints a person other than the persons named in the Form of Proxy
to represent him, such person will vote the shares in respect of which he is
appointed proxy holder in accordance with the directions of the shareholder
appointing him. A submitted Proxy is revocable by a shareholder at any time
prior to its being voted provided that such shareholder gives oral or written
notice to the Secretary of the Company at or prior to the Annual Meeting that
such shareholder intends to vote in person or by submitting a subsequently
dated Proxy. Attendance at the Annual Meeting by a shareholder who has given a
Proxy shall not in and of itself constitute a revocation of such Proxy.
Proxies will be solicited initially by mail. Further solicitation may be
made by directors, officers and employees of the Company personally, by
telephone or otherwise, but such persons will not be specifically compensated
for such services. Banks, brokers, nominees and other custodians and
fiduciaries will be reimbursed for their reasonable out-of-pocket expenses in
forwarding soliciting material to their principals, the beneficial owners of
Common Shares. The costs of soliciting proxies will be borne by the Company. It
is estimated that these costs will be nominal.
VOTING VIA THE INTERNET OR BY TELEPHONE
Shareholders voting via the Internet should understand that there may be
costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies, that must be borne by the shareholder.
There are separate Internet and telephone voting arrangements depending upon
whether shares are registered in your name or in the name of a bank or broker.
Shares Registered Directly in the Name of the Shareholder
Shareholders with shares registered with EquiServe, the Company's transfer
agent, may vote electronically by calling 1-877-779-8683 and entering the
control number located on your proxy card and following the recorded
instructions. To vote on the Internet, shareholders should go to the site
http://www.eproxyvote.com/pre and enter the control number located on their
proxy card and follow the instructions provided.
Shares Registered in the Name of a Brokerage firm or Bank
If your shares are held through a bank or broker you may also be eligible to
vote your shares electronically. Simply follow the instructions on your voting
form, using either the toll-free telephone number or the Internet address that
is listed.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
The table below sets forth the beneficial ownership of Common Shares by all
persons who beneficially own 5% or more of the Common Shares and by all
directors and certain executive officers of the Company as of March 15, 2002.
Amount and
Nature of Percent
Beneficial of
Name and Address of Beneficial Owner Ownership(1) Class(1)
------------------------------------ ------------ --------
Swiss Reinsurance Company........................ 14,603,969(2) 26.93%
50-60 Mythenquai
8022 Zurich, Switzerland
Janus Capital Corporation........................ 3,500,275(3) 6.97%
100 Fillmore Street
Denver, Colorado, U.S.A.
Delaware Management Holdings Co. Inc............. 2,682,436(4) 5.34%
One Commerce Square,
2005 Market St.
Philadelphia, Pennsylvania, U. S. A
Pimco Equity Advisors LLC........................ 2,627,500(5) 5.24%
888 San Clemente Drive, Suite 100
Newport Beach, California, U.S.A
Name of Beneficial Owner
------------------------
Patrick Thiele................................... 27,506(6) *
Albert Benchimol................................. 60,259(7) *
Bruno Meyenhofer................................. -- (8) --
Graham J. Dimmock................................ 114,000(9) *
Scott D. Moore................................... 203,927(10) *
David T. McLaughlin.............................. 76,296(11) *
Robert M. Baylis................................. 18,673(12) *
Jan H. Holsboer.................................. 16,336(13) *
Robert B. Horton................................. 33,567(14) *
Walter B. Kielholz............................... -- (15) --
Jean-Paul Montupet............................... -- (16) --
John Rollwagen................................... 9,000(17) *
Remy Sautter..................................... -- (18) --
Lucio Stanca..................................... 30,000(19) *
All directors and executive officers (15 persons) 595,814 1.13 %
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* Denotes beneficial ownership of less than 1%
(1) Assumes the exercise of 1,355,746 Class B Warrants, as defined below.
Class B Warrants vested in November 1997 and further vesting of Class B
Warrants will not occur. The Class B Warrants are exercisable through
November 2004 at an exercise price per Common Share of $17. Upon the
closing of the initial public offering on November 4, 1993, Class A
Warrants to purchase 10,168,093 Common Shares were issued to private
investors (the "Class A Warrants"). Class B Warrants to purchase up to
6,778,728 Common Shares were issued to Swiss Reinsurance Company ("Swiss
Re") and Head & Company L.L.C. on November 4, 1993 (the "Class B
Warrants"), of these only 1,355,746 remain outstanding and exercisable.
(2) Based on a report on Schedule 13D filed by Swiss Re and certain affiliates
with the U.S. Securities and Exchange Commission on December 18, 2001,
Swiss Re beneficially owns 14,603,969 Common Shares, including (i)
13,296,324 Common Shares owned by Swiss Re Capital Management (Bermuda)
Ltd., a
3
wholly-owned subsidiary of Swiss Re, (ii) 677,873 Common Shares issuable
upon the exercise of vested Class B Warrants owned by Swiss Re Capital
Management (Bermuda) Ltd., (iii) 541,772 Common Shares owned by European
Reinsurance Company of Zurich, a wholly-owned subsidiary of Swiss Re, and
(iv) 88,000 Common Shares issuable upon the exercise of options owned
directly by Swiss Re.
(3) Based on a report on Schedule 13G filed by Janus Capital Corporation and
Thomas H. Bailey ("Janus") with the U.S. Securities and Exchange
Commission on February 11, 2002, Janus has sole dispositive power of
3,500,275 Common Shares.
(4) Based on a report on Schedule 13G filed by Delaware Management Holdings
Co. Inc. ("Delaware Mgmt.") with the U.S. Securities and Exchange
Commission on February 7, 2002, Delaware Mgmt. has sole dispositive power
of 2,682,436 Common Shares.
(5) Based on a report on Schedule 13G filed by Pimco Equity Advisors LLC
("Pimco") with the U.S. Securities and Exchange Commission on February
13/, 2002, Pimco has sole dispositive power of 2,627,500 Common Shares. /
(6) Mr. Thiele holds options to purchase 138,914 Common Shares, 14,539 of
which are currently exercisable. In addition Mr. Thiele has been granted
10,000 shares of restricted stock, which vest in December 2004, and he has
acquired 467 Common Shares under the Company's Employee Share Purchase
Plan.
(7) Mr. Benchimol holds options to purchase 121,750 Common Shares, 60,000 of
which are currently exercisable. In addition Mr. Benchimol acquired 259
Common Shares under the Company's Employee Share Purchase Plan.
(8) Mr. Meyenhofer holds options to purchase 122,050 Common Shares, none of
which are currently exercisable.
(9) Mr. Dimmock holds options to purchase 157,225 Common Shares, 106,000 of
which are currently exercisable.
(10) Mr. Moore holds options to purchase 267,177 Common Shares, 189,427 of
which are currently exercisable.
(11) Mr. McLaughlin's holding includes options to purchase 65,710 Common
Shares, all of which are exercisable.
(12) Mr. Baylis' holding includes options to purchase 16,000 Common Shares, all
of which are exercisable.
(13) Mr. Holsboer's holding includes options to purchase 16,000 Common Shares,
all of which are exercisable.
(14) Mr. Horton's holding includes options to purchase 14,000 Common Shares,
all of which are exercisable.
(15) The Company has been advised that in accordance with the terms of Mr.
Kielholz' employment with Swiss Re, all Common Shares and options to
purchase Common Shares received as part of his director's compensation
have been transferred to Swiss Re.
(16) Mr. Montupet was appointed to the Board in February 2002 and he has no
beneficial ownership of Common Shares.
(17) Mr. Rollwagen's holding includes options to purchase 8,000 Common Shares,
all of which are exercisable.
(18) Mr. Sautter was appointed to the Board in November 2001 and he has no
beneficial ownership of Common Shares.
(19) Mr. Stanca holds options to purchase 30,000 Common Shares, all of which
are exercisable.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10 percent of a
registered class of the Company's equity securities, to file with the SEC and
the New York Stock Exchange, initial reports of ownership and reports of
changes in beneficial ownership of such equity securities of the Company. To
the Company's knowledge, based upon the reports filed and written
representations that no other reports were required, during the fiscal year
ended December 31, 2001, no director or executive officer of the Company failed
to file on a timely basis reports required by Section 16(a).
4
ELECTION OF DIRECTORS
The Board of Directors of the Company presently consists of ten members. At
the Annual Meeting, three directors will be elected to hold office for
three-year terms until the annual general meeting in the year 2005 or until
their successors have been elected. The Proxy will be voted in accordance with
the directions thereon or, if no directions are indicated, for election of the
three nominees named below whose election has been proposed and recommended by
the Board of Directors. If any nominee shall, prior to the Annual Meeting,
become unavailable for election as a director, the persons named in the
accompanying Proxy will vote for such nominee, if any, in their discretion as
may be recommended by the Board of Directors, or the Board of Directors may
reduce the number of directors to eliminate the vacancy. The presence, in
person or by proxy, of a majority of the outstanding Common Shares is required
for a quorum for the election of directors at the Annual Meeting but if a
quorum should not be present, the Annual Meeting may be adjourned from time to
time until a quorum is obtained. Election of directors at the Annual Meeting
will be decided by a simple majority of votes cast.
Nominees
The respective ages, business experience and directorships in other
companies of the three nominees for election are set forth below. All of the
nominees are currently directors of the Company. Mr. Horton was elected at the
1999 Annual Meeting. Messrs. Thiele and Sautter were appointed by the Board of
Directors effective December 1, 2000 and November 20, 2001, respectively, and
are being nominated for election by shareholders for the first time at the
Annual Meeting. If elected, all three nominees will serve a three-year term.
Name Age
---- ---
Robert B. Horton............................... 62
Remy Sautter................................... 56
Patrick Thiele................................. 51
Robert B. Horton has served as a director of the Company since November 8,
1993 and is Chairman of the Company's Finance Committee and a member of the
Company's Governance Committee. Mr. Horton was Chairman of Railtrack plc from
February 2, 1993 until July 21, 1999. Mr. Horton served as Chairman and Chief
Executive Officer of The British Petroleum Company from March 1990 until June
1992 and as Deputy Chairman from 1988 to 1990. From 1986 to 1989, Mr. Horton
served as Chairman and Chief Executive Officer of Standard Oil. Mr. Horton is
also a director of Emerson Electric Company and Premier Farnell plc.
Mr. Remy Sautter was appointed to the Board in November 2001. Mr. Sautter is
Chairman and Chief Executive Officer of RTL Radio, France. From July 1996 to
June 2000 Mr. Sautter was President and Chief Executive Officer of CLT-UFA
Group. From 1985 to 1996 Mr. Sautter was Vice-Chairman and Managing Director of
RTL Radio, France and in 1989 he was appointed as Managing Director in charge
of CLT radio activities. Mr. Sautter is also a Chairman of the Board of Channel
5, UK and serves as a director of M6 Television (Paris) and WANADOO (Paris) and
is on the Board of Advisors of Duke Street Capital (London).
Patrick A. Thiele joined the Company on December 1, 2000 as President and
Chief Executive Officer. Mr. Thiele was appointed to the Board effective
December 1, 2000, and is a member of the Company's Finance Committee. Mr.
Thiele was employed by CGNU from 1999 to 2000 and served as Managing Director,
Group Office. From 1978 to 1998 Mr. Thiele was employed by The St. Paul
Companies and served as President and Chief Executive Officer of the worldwide
insurance operations from 1996 to 1998. Prior to that, Mr. Thiele was Chief
Financial Officer from 1991 to 1996. Mr. Thiele was also a member of the Board
of Directors of The St. Paul Companies and John Nuveen & Co., its investment
subsidiary. Mr. Thiele is also a director of the Wenger Corporation and the
University of Wisconsin's Graduate School of Business and is on the Board of
Overseers of the School of Risk Management and Actuarial Science, St. John's
Campus, New York.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE THREE
DIRECTORS NAMED ABOVE.
5
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The table below sets forth the names, ages and titles of the persons who
were directors of the Company (in addition to Messrs. Horton, Sautter and
Thiele) and executive officers of the Company as of March 15, 2002.
Name Age Position
---- --- --------
Albert Benchimol...... 44 Executive Vice President & Chief Financial Officer
Graham J. Dimmock..... 52 Deputy Chief Executive Officer, PartnerRe Global
Bruno Meyenhofer...... 53 Chief Executive Officer, PartnerRe Global
Scott D. Moore........ 49 Chief Executive Officer, PartnerRe US
Mark Pabst............ 56 Executive Vice President, Corporate Affairs
David McLaughlin (1).. 69 Chairman of the Board of Directors
Robert M. Baylis (2).. 63 Director
Jan H. Holsboer (3)... 55 Director
Walter B. Kielholz (4) 52 Director
Jean-Paul Montupet.... 54 Director
John Rollwagen (5).... 61 Director
Lucio Stanca (6)...... 60 Director
- --------
(1) Chairman of the Company's Governance Committee and Member of the Company's
Audit Committee.
(2) Chairman of the Company's Audit Committee and Member of the Company's Human
Resources Committee.
(3) Member of the Company's Audit and Finance Committees.
(4) Member of the Company's Governance and Human Resources Committees.
(5) Vice Chairman of the Company's Human Resources Committee and Member of the
Company's Finance Committee and Audit Committee.
(6) Chairman of the Company's Human Resources Committee and Member of the
Company's Governance Committee.
Albert A. Benchimol joined the Company on April 1, 2000 as Executive Vice
President and Chief Financial Officer. Mr. Benchimol was employed by Reliance
Group Holdings, Inc. from 1989 to 2000. He served as Senior Vice President and
Treasurer from 1998 to 2000 and as Vice President and Treasurer from 1994 to
1998. From 1989 to 1994, Mr. Benchimol served as Vice President and Assistant
Treasurer. Prior to that, Mr. Benchimol was employed by Bank of Montreal from
1982 to 1989. In June 2001, Reliance Group Holdings filed for protection under
Chapter 11 of the U.S. Bankruptcy Code.
Graham J. Dimmock joined the Company on February 17, 1996 as Executive Vice
President and has been in the PartnerRe Paris office since April 30, 1998.
Effective February 2002 Mr. Dimmock was appointed as Deputy Chief Executive
Officer, PartnerRe Global and he also serves as Director General of PartnerRe
SA. Mr. Dimmock was employed by Employers Re Ltd. (London) from 1991 to 1996,
where he served as Managing Director responsible for reinsurance operations.
Prior to that, Mr. Dimmock was head of property underwriting and marketing for
Swiss Reinsurance Company (U.K.) Limited.
Bruno Meyenhofer joined the Group on January 1, 1999 as Executive Vice
President upon the acquisition of the reinsurance operations of Winterthur
Insurance Company and became the Chief Operating Officer, Global Reinsurance
Operations on April 1, 1999. Effective February 2002 Mr. Meyenhofer was
appointed as Chief Executive Officer, PartnerRe Global. Mr. Meyenhofer was a
member of the Group Executive Board of Winterthur Insurance Company from 1997
to 1998 responsible for reinsurance operations and Group Risk management and
prior thereto was Senior Vice President, Reinsurance for Winterthur Insurance
Company from 1993.
Scott D. Moore joined the Company on December 11, 1993 and in 1998 became
the President and Chief Executive Officer of PartnerRe US prior to which he was
Executive Vice President and Chief Financial Officer
6
of the Company. Mr. Moore was employed by Crum & Forster Insurance from March 1
to December 10, 1993 as Senior Vice President and Chief Financial Officer, and
from June 1991 to February 1993 he served as Senior Vice President and Chief
Financial Officer of Skandia America Corporation. From 1978 to 1991, Mr. Moore
was employed by Coopers & Lybrand, where he was an insurance industry
specialist partner. Mr. Moore is also a director of American Credit Indemnity
Company.
Mark Pabst joined the Company on July 16, 2001 as Executive Vice President,
Corporate Affairs. From 1992 until 2001 Mr. Pabst was President of St. Paul
International and from 1988 to 1992 he was employed by St. Paul Companies Inc.
as Senior Vice President, Human Resources. Prior to joining the St. Paul
Companies, Mr. Pabst was employed as the Managing Director of Human Resources
at MCorp from 1982 until 1988.
David T. McLaughlin has served as Chairman of the Board since November 8,
1993 and is Chairman of the Company's Governance Committee and a member of the
Company's Audit Committee. Mr. McLaughlin was President and Chief Executive
Officer of the Aspen Institute from 1987 until July 1997. From 1981 to 1987,
Mr. McLaughlin was President of Dartmouth College, and from 1977 to 1981 he was
Chairman of the Toro Company. Mr. McLaughlin is Chairman of Orion Safety
Products and in June 2001 was appointed Chairman of the American Red Cross. Mr.
McLaughlin is also a director of Viacom Inc.
Robert M. Baylis has served as a director since May 19, 2000 and is the
Chairman of the Company's Audit Committee and a member of the Company's Human
Resource Committee. He is the retired Vice Chairman of CS First Boston, a
position he held until 1996, and prior to his retirement was Chairman and Chief
Executive Officer of CS First Boston Pacific Inc. Mr. Baylis is a Director of
Credit Suisse First Boston (USA) Inc., New York Life Insurance Company, Host
Marriott Corporation, Covance Inc., and Gildan Activewear, Inc. He is an
overseer of the University of Pennsylvania Museum and a director of the
International Forum, an executive education program of the Wharton School. Mr.
Baylis is a member of the Advisory Council of the Economics Department of
Princeton University and is also a member of the New York Society of Security
Analysts and the National Association of Business Economists.
Jan H. Holsboer has served as a director since May 19, 2000 and is a member
of both the Company's Audit Committee and Finance Committee. Mr. Holsboer was a
member of the Executive Board ING/Nationale-Nederlanden and was primarily
responsible for International Operations from 1990 to 1999. From 1997 to 1999
Mr. Holsboer was Chairman of the Executive Committee of the Financial Services
International of ING Bank for all retail insurance, bank and asset management
products outside the Benelux, including all reinsurance activities. During this
period Mr. Holsboer was also a member of the Executive Committee of ING Bank.
Mr. Holsboer has been a member of the Geneva Association since 1986. He served
as President from 1993 to 1999 and as Honorary President from 2000. Mr.
Holsboer was also a Board member of the International Insurance Society from
1994 to 1999.
Walter B. Kielholz has served as a director of the Company since August 26,
1993 and is a member of both the Company's Governance Committee and Human
Resources Committee. Mr. Kielholz has been a member of the Executive Board of
Swiss Re since 1994 and has been the Chief Executive Officer since 1997. Mr.
Kielholz has been a member of Swiss Re general management since 1993. From 1991
he was a Senior Vice President of Swiss Re. He joined Swiss Re in 1989 as a
member of management. From 1986 to 1988, Mr. Kielholz was a Vice President of
Credit Suisse.
Mr. John A. Rollwagen has served as a director since May 22, 2001. He is
Vice Chairman of the Company's Human Resources Committee and a member of the
Company's Finance Committee and Audit Committee. He has served as a principal
of Quatris Fund, an affiliate fund of St. Paul Venture Capital since October
2000 and from 1993 he has been an investor and business advisor specializing in
information technology. From 1975 until 1993 Mr. Rollwagen was Chairman and
Chief Executive Officer of Cray Research, Inc. Mr. Rollwagen is a director of
Computer Network Technology Inc., Lexar Media, Diva Systems, and Unlimited
Scale Inc. and serves on the Board of Minnesota Public Radio.
7
Mr. Jean-Paul Montupet was appointed to the Board in February 2002. Mr.
Montupet is Executive Vice President and Advisory Director of Emerson Electric
Co. Over his twelve years with Emerson, Mr. Montupet has held various positions
of responsibility, including Chairman of Emerson Asia-Pacific in 1994. He is
currently responsible for Emerson's Industrial Automation Business. From 1982
to 1989 Mr. Montupet was a Member of the Board and Director of North American
Operations of Leroy Somer. Mr. Montupet is also Chairman of the Board of
Governors of NEMA (National Electrical Manufacturers Association).
Mr. Lucio Stanca has served as director of the Company since May 12, 1998
and is the Chairman of the Company's Human Resources Committee and a member of
the Company's Governance Committee. In July 2001 Mr. Stanca was appointed as
Minister of Innovation and Technology in the Italian Government. Mr. Stanca was
Executive Chairman of IBM EMEA (Europe, Middle East and Africa) from 1994 until
his retirement from the Company in 2001. From 1991 until 1994 Mr. Stanca was
Chairman and Chief Executive Officer of IBM SEMEA (South Europe, Middle East
and Africa). Mr. Stanca worked with IBM in both Europe and the USA from 1968.
Mr. Stanca is also a director of FILA and the Bocconi University in Milan.
The Company's Board of Directors is divided into three classes as follows:
the first class, whose term expires at the 2003 annual general meeting of the
Company's shareholders, is comprised of Walter B. Kielholz, Jan H. Holsboer and
Robert M. Baylis. The second class, whose term expires at the 2004 annual
general meeting of the Company's shareholders, is comprised of David T.
McLaughlin, John A. Rollwagen, Lucio Stanca and Jean-Paul Montupet. The third
class, whose term expires at the 2002 annual general meeting of the Company's
shareholders, is comprised of Robert B. Horton, Remy Sautter and Patrick A.
Thiele. If elected, Messrs. Horton, Sautter and Thiele will serve as a class of
directors whose term will expire at the 2005 annual general meeting of
shareholders.
Board of Directors' Meetings and Committees
The Board of Directors has standing Governance, Audit, Human Resources and
Finance Committees.
The Governance Committee was established in February 2001 to oversee all
aspects of Board governance. It advises the Board of Directors with respect to
its organisation, the selection and recommendation of new Directors, committee
structure, director compensation, Board performance and objectives, the
performance and compensation of the Chief Executive Officer (CEO), CEO
succession planning and the nomination of the Chairman of the Board. The
Chairman of the Governance Committee is the non- Executive Chairman of the
Board and all Committee members are non-executive directors of the Company. The
Governance Committee met three times in 2001.
The Finance Committee was established in February 2001 as a combination of
the former Risk Management and Investment Committees. It advises the Board with
respect to the Company's overall risk tolerance and the manner in which the
Company's capital is exposed to losses through reinsurance and investment
activities. It monitors and approves the Company's catastrophe exposure and
levels of retrocession and reviews the Company's reserving policy. In regard to
investment activities, it reviews the Company's asset allocation policy and
investment guidelines and monitors investment performance against agreed
benchmarks. It also oversees the Company's balance sheet and capital management
policies including new capital raising, capital allocation, dividend payments
and capital expenditure. The Finance Committee met three times in 2001. The
former Risk Management and Investment Committees met once in 2001.
The Audit Committee oversees the financial reporting process and the
internal control structure of the Company on behalf of the Board and
establishes standards for review of the Company's compliance with applicable
accounting and regulatory requirements. The Audit Committee, comprising
independent members of the Board, meets with management and with the Company's
independent auditors to review matters relating to
8
the quality of financial reporting and internal accounting control, including
the nature, extent and results of their audits, and otherwise maintains
communications between the Company's independent auditors and the Board of
Directors. The Audit Committee met four times in 2001.
The Human Resources Committee (formerly known as the Compensation Committee)
oversees all human resources philosophy, policy and administration for the
Company. It reviews and approves all salary and incentive payments for
executive officers (in conjunction with the Governance Committee for the Chief
Executive Officer) and recommends to the Board all stock related compensation
for executive officers. The Committee is also responsible for all forms of
noncurrent monetary compensation, including the administration of the 1993
PartnerRe Ltd. Stock Option Plan, the Employee Incentive Plan, the Employee
Share Purchase Plan and the defined contribution pension plans. It is also
responsible for management continuity and reviews all executive officer
appointments. The Human Resources Committee met four times in 2001.
The Board of Directors held ten meetings in 2001 and each Director attended
at least 80% of the Board meetings and of the meetings held by all committees
of the Board of which such Director was a member.
In 2001 the Risk Management Committee consisted of Jan H. Holsboer, Walter
Kielholz, and Patrick Thiele and the Investment Committee consisted of Robert
B. Horton, Robert M. Baylis and Frederick Whittemore. The newly formed Finance
Committee consisted of Robert B. Horton, Jan H. Holsboer, John Rollwagen and
Patrick Thiele. The Audit Committee consisted of David T. McLaughlin, Robert M.
Baylis, John Rollwagen and Jan H. Holsboer. The Human Resources Committee
consisted of Robert Baylis, Lucio Stanca, John Rollwagen and Walter Kielholz.
The Governance Committee consisted of David T. McLaughlin, Robert B. Horton,
Lucio Stanca and Walter Kielholz.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is party to agreements with Swiss Re, of which Walter B.
Kielholz is Chief Executive Officer, and its affiliates. Swiss Re and certain
of its affiliates receive fees from the Company pursuant to certain agreements
with the Company, as described below.
Agreements with Swiss Re and Affiliates
The Company and its affiliates utilize, in the conduct of their business,
certain underwriting services and licensed technology provided by Swiss Re and
its affiliates, pursuant to various service agreements including the
Underwriting Services and Cooperation Agreement. Fees incurred pursuant to such
agreements include fixed fees for access to technology and database resources.
The Agreement became effective January 1, 1997 and was amended in 1998 to
provide services to the Company's affiliates. The Agreement contains a
provision that allows Swiss Re or the Company to terminate the Underwriting
Services and Cooperation Agreement upon a change of control of the Company (as
defined in the Underwriting Services and Cooperation Agreement). The fees paid
to Swiss Re and its affiliates under this Agreement for the year ended December
31, 2001 aggregated US$0.1 million.
In connection with the acquisition of PartnerRe SA (formerly known as SAFR
or SAFR PartnerRe), Swiss Re entered into a Standstill Agreement with the
Company dated July 10, 1997, pursuant to which Swiss Re's ownership and voting
rights in the Company are limited to 30% of the voting power of the voting
stock and voting stock equivalents of the Company. In connection with the
acquisition of PartnerRe SA the Company granted Swiss Re registration rights
for that portion of the Common Shares of the Company issued to Swiss Re in
connection with the acquisition of PartnerRe SA that was not previously subject
to registration rights.
In the normal course of its underwriting activities, the Company and certain
subsidiaries entered into reinsurance contracts (assumed and ceded) with Swiss
Re and certain members of the Swiss Re Group. Included
9
in the Company's 2001 consolidated results were assumed and ceded premiums of
$15.3 million and $1.7 million, respectively, losses and loss expenses,
including policy benefits for life contracts, of $8.9 million, loss recoveries
of $11.5 million and assumed and ceded acquisition costs of $5.7 million and
$0.5 million respectively. At December 31, 2001 there were reinsurance balances
receivable and recoverable from members of the Swiss Re Group aggregating $26.8
million, unpaid losses and loss expenses, including benefits for life contracts
of $20.1 million and funds held under reinsurance treaties of $0.3 million
under these agreements.
Investment Advisory Agreements
The Company is party to Investment Advisory Agreements with Swiss Re. Under
the Investment Advisory Agreements Swiss Re manages portions of the Company's
portfolio of investment securities subject to the Company's investment
guidelines and other restrictions. Pursuant to the terms of the Investment
Advisory Agreement, the Company pays fees to Swiss Re. In 2001, the Company
incurred expenses pursuant to the Investment Advisory Agreement totaling $0.9
million. See Note 9 to the Consolidated Financial Statements.
The Company believes that the terms of such transactions were no less
favorable to the Company than could have been obtained from third parties that
were not affiliated with the Company. Transactions involving Swiss Re, or their
affiliates, on the one hand, and the Company, on the other hand, require
approval by a majority vote of the disinterested members of the Company's Board
of Directors.
EXECUTIVE COMPENSATION
Human Resources Committee Report on Executive Compensation
Executive Compensation Policy
The Company's compensation policies for all executive officers, which
comprise the named executive officers, are formulated and administered by the
Human Resources Committee of the Board of Directors, composed of Lucio Stanca,
John Rollwagen, Robert Baylis and Walter Kielholz. The Human Resources
Committee also administers the 1993 Stock Option Plan, the Employee Incentive
Plan and the defined contribution pension plans. The Company's compensation
strategy is to align compensation with performance by emphasizing variable pay
over base salary with an appropriate mix of annual and long-term incentives.
The Committee elected to recommend payment of incentive bonuses and stock
option grants based on evaluations of Company, unit and individual performance
against predetermined objectives. An important element of the Company's
compensation philosophy is to link its executives' compensation with the
interests of shareholders. In determining the level of executive compensation,
the Company also considers whether the compensation is competitive with
similarly situated executives of competitors and peer companies. The level of
compensation for a given position will be benchmarked annually against
positions of comparable responsibility and function within a peer group of
companies. The Committee may from time to time engage outside advisors to
assist in the evaluation and design of compensation programs.
Each of Messrs. Thiele, Benchimol, Dimmock, Moore and Meyenhofer has an
employment agreement (described below) with the Company. The base salary
component of each executive's compensation is, pursuant to the terms of each
employment agreement, subject to annual review by the Human Resources
Committee. The Human Resources Committee may make discretionary increases in
the base salary based on the executive's contribution to the Company and
competitive market considerations. In addition, under the terms of each
employment agreement the Human Resources Committee may award annual cash
bonuses to the executive and longer-term incentive awards in the form of stock
options.
Options under the Stock Option Plan and Employee Incentive Plan are granted
at an exercise price equal to the fair market value of the Common Shares on the
date of grant. The Human Resources Committee believes that
10
grants of stock options at fair market value are an effective means of aligning
an executive's compensation with the interests of shareholders, since the value
of such options is tied directly to increases in the market value of the Common
Shares. Compensation and stock option information for each of the executive
officers of the Company is provided in the tables that follow.
Chief Executive Officer's Compensation
The base salary component of compensation for Mr. Thiele, President and
Chief Executive Officer of the Company, for the year ended December 31, 2001
was $650,000. Mr. Thiele's base salary is subject to a joint annual review by
the Human Resources Committee and the Governance Committee. For the year ended
December 31, 2001 Mr. Thiele was awarded an annual incentive bonus of $735,313,
which he elected to take in the form of 60% cash and 40% stock options. In
determining Mr. Thiele's total compensation for the year the Human Resources
Committee considered the Company's performance against plan and Mr. Thiele's
individual performance against pre-determined objectives.
Mr. Thiele is entitled to participate in the long-term incentive plan of the
Company with stock option grants to be awarded at the annual discretion of the
Human Resources Committee.
The Human Resources Committee believes that stock options are an important
part of Mr. Thiele's long-term compensation in that they provide a strong
incentive to increase shareholder value.
Human Resources Committee
Lucio Stanca
John Rollwagen
Robert Baylis
Walter Kielholz
11
The following tables summarize compensation paid and certain information
regarding options granted to the Company's principal executive officers for the
years ended December 31, 2001, 2000 and 1999.
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
--------------------------------------- ---------------------
Number of
Securities
Underlying
Other Annual Restricted Options All Other
Name and Principal Position Year Salary Bonus Compensation (1) Stock (2) Granted Compensation (3)
--------------------------- ---- -------- -------- ---------------- ---------- ---------- ----------------
Patrick A. Thiele, President & Chief Executive
Officer & Director (4)....................... 2001 $650,004 $735,313 $194,092 54,375 $101,897
2000 $108,333 $ 0 $ 12,000 10,000 70,000 $ 8,125
Albert Benchimol, Executive Vice President &
Chief Financial Officer (5).................. 2001 $386,250 $340,160 $184,611 -- 21,750 $ 61,588
2000 $272,125 $282,000 $137,920 100,000 $184,953
Graham J. Dimmock, Deputy Chief Executive
Officer, PartnerRe Global (6)................ 2001 $286,376 $214,600 $ 5,400 -- 15,225 $ 83,294
2000 $281,587 $196,650 $ 5,147 30,000 $ 72,608
1999 $313,046 $162,801 $ 8,217 -- 30,000 $123,164
Bruno Meyenhofer, Chief Executive Officer,
PartnerRe Global (7)......................... 2001 $329,027 $360,000 $ -- 21,750 $ 35,316
2000 $305,652 $291,000 $ -- -- 54,800 $ 53,990
1999 $300,330 $250,275 $ -- 45,500 $ 33,946
Scott D. Moore, Chief Executive Officer,
PartnerRe U.S................................ 2001 $386,250 $421,200 $ 0 -- 21,750 $ 53,015
2000 $363,750 $333,750 $ 80,000 50,000 $ 53,472
1999 $330,000 $275,000 $120,000 -- 50,000 $ 50,108
- --------
(1) Mr. Thiele received a housing allowance of $ 183,750 in 2001 and $12,000 in
2000. Mr. Benchimol received a housing allowance of $180,000 in 2001 and
$97,500 in 2000. Mr. Moore received a housing allowance of $0 in 2001,
$80,000 in 2000, and $120,000 in 1999. Mr. Thiele received a car allowance
of $9,592 in 2001 and $0 in 2000. Mr. Benchimol received a car allowance of
$3,561 in 2001 and $40,420 in 2000. Mr. Dimmock received a car allowance of
$5,400 (paid in Euro and converted at exchange rate of EUR 1.1099/USD) in
2001, $5,147 in 2000 and $8,217 in 1999. In 2001 the Company paid Club
membership fees for Mr. Thiele of $750 and for Mr. Benchimol of $1,050.
(2) Mr. Thiele was granted restricted stock on December 4, 2000. The value of
restricted stock is based on the market price of $ 54.50 on the date of the
grant.
(3) Pension contributions were made to a defined contribution plan in 2001 for
the benefit of Mr. Thiele of $101,897, for the benefit of Mr. Benchimol of
$61,588 for the benefit of Mr. Dimmock of $50,485 (paid in Euro and
converted at exchange rate of EUR 1.1099/USD), for the benefit of Mr.
Meyenhofer of $35,316 (paid in Swiss Francs and converted at exchange rate
of CHF 1.6868/USD) and for the benefit of Mr. Moore of $46,205 which
included long-term disability and life insurance cover. Mr. Moore received
tax services, which were paid by the Company of $6,810. The Company paid in
2001 to Mr. Dimmock tuition fees for his children of $28,674 (paid in Euro
and converted at exchange rate of EUR 1.1099/USD) and tax services of
$4,135 (paid in Euro and converted at exchange rate of EUR 1.1099/USD).
(4) Mr. Thiele joined the Company on December 1, 2000. In accordance with his
employment contract, Mr. Thiele has elected to receive 40% of his 2001
annual bonus in the form of stock options and each option was valued at
$20.23. All options granted as part of Mr. Thiele's annual incentive bonus
vest immediately.
(5) Mr. Benchimol joined the Company on April 1, 2000.
(6) Mr. Dimmock's salary and bonus for 2001 was paid in Euro and was EUR
317,856 and EUR 238,190 respectively. In 2000 Mr. Dimmock's salary and
bonus was paid in French Francs and was FRF 2,004,961 and FFR 1,000,000
respectively.
(7) Mr. Meyenhofer's salary and bonus for 2001 was paid in Swiss Francs and was
CHF 555,003 and CHF 590,240 respectively. In 2000 Mr. Meyenhofer's salary
and bonus was paid in Swiss Francs and was CHF 517,500 and CHF 375,000
respectively.
12
Option Grants in Last Fiscal Year
Percent Potential Realizable Value
of Total at
Number of Options Assumed Annual Rates of
Securities Granted to Exercise Stock Price Appreciation
Underlying Employees Price per For Option Term
Options in Fiscal Common Expiration --------------------------
Name Granted (1) Year Share Date 5% 10%
---- ----------- ---------- --------- ------------- ---------- ----------
Graham J. Dimmock 30,000 6% $51.39 Feb. 27, 2011 $ 969,567 $2,457,073
Scott D. Moore... 50,000 10% $51.39 Feb. 27, 2011 $1,615,913 $4,095,042
- --------
(1) Options were granted under the Stock Option Plan with an exercise price
equal to the market value of the Company's Common Shares on the date of
grant. The Options granted to Messrs. Dimmock and Moore were granted on
February 27, 2001 and twenty per cent of the options vested on the date of
grant and 20% vest on each anniversary date thereafter until 2005.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options Options
Shares at Fiscal at Fiscal
Acquired Year-End Year-End
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable(1)
---- -------- -------- ------------- ----------------
Patrick Thiele....... -- -- 0/ $ 0/
70,000 $ 23,333
Albert Benchimol..... -- -- 40,000/ $ 937,500/
60,000 $ 1,406,250
Graham J. Dimmock.... -- -- 82,000/ $1,094,780/
60,000 $ 630,600
Bruno Meyenhofer/(2)/ -- -- 0/ $ 0/
100,300 $ 1,698,400
Scott D. Moore....... 157,427/ $3,457,774/
-- -- 88,000 $ 948,377
- --------
(1) Calculated based upon a price of $54.00 per share of the Company's Common
Shares at December 31, 2001.
(2) The options granted to Mr. Meyenhofer are subject to a block on exercise
for a period of four years from the date of grant.
13
Compensation of Directors
Directors who are employees of the Company or its subsidiaries are not paid
any fees or additional compensation for services as members of the Company's
Board of Directors or any committee thereof. For 2001, non-employee directors
each received fees of $35,000, which could be allocated to cash or Common
Shares, at the Director's election. The Common Shares ("Directors' Shares"), if
chosen, are granted under the Company's 1993 Non-Employee Director's Stock Plan
(the "Director's Plan"), as described below. Mr. McLaughlin, the Chairman of
the Board, received an additional $90,000 in 2001 for serving as the Chairman
of the Company with an additional $15,000 paid to Orion Safety Products, a
company owned by Mr. McLaughlin, in compensation for expenses such as office
supplies, administrative support and office rental relating to the performance
of Mr. McLaughlin's duties to the Company. Directors' fees are reviewed
annually to take into account inflation, the overall financial performance and
business prospects of the Company and peer group competitive data. A deferral
plan permits directors to defer all or a portion of their cash compensation.
All directors are reimbursed for travel and other related expenses incurred in
attending meetings of the Board of Directors or committees thereof.
The Directors' Shares granted under the Director's Plan are fully vested
when granted. Directors' Shares granted under the Director's Plan are
nontransferable, except with the consent of two-thirds of the Board of
Directors of the Company, for six months after grant. Directors' Shares granted
under the Director's Plan to directors who are employees of Swiss Re are
subsequently transferred to Swiss Re pursuant to an arrangement between Swiss
Re and its employees.
Each director also receives as compensation an automatic annual award of
options to purchase 8,000 Common Shares at an exercise price per Common Share
equal to the market price per Common Share on the date of the award. In
addition, Mr. McLaughlin receives an award of options equal to $10,000 (based
on the market price of the Common Shares on the date of the annual
shareholders' meeting) to purchase Common Shares for services as Chairman.
A total of 800,000 Common Shares may be issued under the Director's Plan.
The Director's Plan may be amended or terminated by the Company at any time,
in whole or in part. However, any amendment for which shareholder approval is
required by law will not be effective until such approval has been attained.
Unless terminated earlier, the Director's Plan expires on October 27, 2003, the
tenth anniversary of its adoption by the Board, and no further Directors Shares
or Options may be granted thereunder after such date.
The Company is party to agreements with Swiss Re, of which Walter B.
Kielholz is Chief Executive Officer, and its affiliates. Swiss Re and certain
of their affiliates receives fees from the Company pursuant to certain
agreements with the Company. See "Certain Relationships and Related
Transactions."
Employment, Severance and Change in Control Agreements
The Company has entered into an employment agreement with Patrick Thiele to
serve as the President and Chief Executive Officer of the Company. The
agreement was amended by the Board of Directors in February 2002 and details of
the amendments have been filed with the Securities and Exchange Commission. Mr.
Thiele's compensation under the revised employment agreement includes (i) an
annual base salary which is subject to review annually for increase at the
discretion of the Human Resources Committee of the Board of Directors, (ii) an
annual bonus determined by the Human Resources Committee of the Board of
Directors but for guidance purposes, the target bonus would be 125% of Base
Salary split as to a grant of options and cash or 100% in cash, depending on
the wishes of Mr. Thiele, (iii) eligibility to participate in the Stock Option
Plans of the Company and (iv) pension, welfare and fringe benefits.
14
Mr. Thiele is entitled to receive reimbursement from the Company of expenses
incurred in connection with, among other things, maintaining a residence in
Bermuda and promoting the business of the Company, including expenses for
travel and entertainment and living expenses while away from home on business
or in the service of the Company. The employment agreement has no fixed term.
In the event of a Change of Control in the Company, Mr. Thiele is entitled to
receive two years of the last base salary and bonus equal to two times the
target rate of bonus in the year when the Date of Termination occurs.
In the event of termination of Mr. Thiele's employment by the Company
without cause or by Mr. Thiele for good reason, Mr. Thiele will receive his
then current base salary for a period of one year and all options granted to
him under the Plans which remain unvested shall immediately vest and will
remain exercisable for one year after the date of termination. Mr. Thiele will
also retain the housing allowance and provision of a motor vehicle in Bermuda
shall continue until the earlier of the date Mr. Thiele leaves Bermuda or 3
months after the Date of Termination. A pro rata bonus for the fiscal year in
which the Employee leaves the Company will also be paid to Mr. Thiele. Any
accrued salary and benefits will also be paid to Mr. Thiele.
The Company has entered into an employment agreement with Albert Benchimol
to serve as Executive Vice President and Chief Financial Officer of the
Company. The employment agreement has an initial term of three years from the
effective date of the agreement, which was April 1, 2000. Mr. Benchimol's
compensation under the agreement includes (i) an annual salary which is subject
to review annually for increase at the discretion of the Human Resources
Committee of the Board of Directors of the Company, (ii) an annual bonus
determined by the Human Resources Committee of the Board of Directors, (iii)
participation in a long-term incentive compensation plan of the Company, such
awards to be granted at the discretion of the Human Resources Committee of the
Board of Directors and (iv) pension, welfare and fringe benefits. Mr. Benchimol
is entitled to receive reimbursement from the Company of expenses incurred in
connection with, among other things, maintaining a residence in Bermuda and
promoting the business of the Company, including expenses for travel and
entertainment and living expenses while away from home on business or in the
service of the Company. In the event of a Change of Control in the Company,
then Mr. Benchimol is entitled to receive two years of the last base salary and
bonus equal to two times the target rate of bonus for Mr. Benchimol in the year
when the Date of Termination occurs. In the event of termination of Mr.
Benchimol's employment by the Company without cause or by Mr. Benchimol for
good reason, Mr. Benchimol will receive compensation and benefits in accordance
with the same formula as Mr. Thiele.
The Company has an employment agreement with Graham J. Dimmock to serve as
Executive Vice President of the Company. With effect from February 2002, Mr.
Dimmock was appointed as Deputy Chief Executive Officer, PartnerRe Global. The
employment agreement of Mr. Dimmock, who is located in the Paris office of the
Company, will continue unless terminated by either party upon one-year notice.
Mr. Dimmock's compensation under the employment agreement includes (i) an
annual base salary which is subject to review annually for increase at the
discretion of the Human Resources Committee of the Board of Directors, (ii) an
annual bonus determined by the Human Resources Committee of the Board of
Directors and (iii) pension, welfare and fringe benefits.
The Company has an employment agreement with Scott D. Moore to serve as
Senior Vice President and Chief Financial Officer of the Company. Mr. Moore
relocated to New York in October 1998 and became President and Chief Executive
Officer of PartnerRe US. The basic terms of employment of Mr. Moore as outlined
below remain unchanged. The employment agreement remains in force unless the
Company or Mr. Moore provides prior written notice of termination of at least
twelve months. Mr. Moore's compensation under the employment agreement includes
(i) an annual base salary which is subject to review annually for increase at
the discretion of the Human Resources Committee of the Board of Directors, (ii)
an annual bonus determined by the Human Resources Committee of the Board of
Directors, and (iii) pension, welfare and fringe benefits. In the event of
termination of Mr. Moore's employment by the Company without cause or by
15
Mr. Moore for good reason, Mr. Moore shall receive his then current base salary
for the remaining term of the agreement, but in no event less than 12 months
base salary and a bonus equal to his prior year annual bonus, and all options
granted to him which remain unvested will immediately vest and remain
exercisable for 90 days after the date of termination.
The Company has entered into an employment agreement with Bruno Meyenhofer
to serve as Executive Vice President of the Company. In February 2002 Mr.
Meyenhofer was appointed as Chief Executive Officer, PartnerRe Global. The
employment agreement is open ended in time and provides for Mr. Meyenhofer to
be awarded a base salary and to be entitled to receive an annual bonus based on
performance. Mr. Meyenhofer will also be entitled to participate in the
long-term incentive award plan of the Company.
Messrs. Dimmock, Moore and Meyenhofer are entitled to benefits similar to
those granted to Mr. Benchimol in the event of termination of employment in
connection with a Change of Control of the Company.
Human Resources Committee Interlocks and Insider Participation
The members of the Company's Human Resources Committee are Lucio Stanca,
John Rollwagen, Robert Baylis and Walter Kielholz, none of who is an executive
officer or employee of the Company or any of its subsidiaries. Mr. Kielholz is
Chief Executive Officer of Swiss Re. The Company is party to agreements with
Swiss Re and its affiliates and Swiss Re and certain of their affiliates
receives fees from the Company pursuant to certain agreements with the Company.
See "Certain Relationships and Related Transactions."
PROPOSAL TO APPROVE AN INCREASE IN THE AUTHORIZED SHARE CAPITAL OF THE COMPANY
The Board of Directors proposes and recommends that the shareholders approve
an increase in the authorized share capital of the Company from US$120,000,000
to US$150,000,000 by the creation of 30,000,000 undesignated shares of par
value US$1.00 each. The Board of Directors may designate and authorize for
issue the shares of such undesignated share capital as they deem advisable from
time to time.
Pursuant to the Company's Memorandum of Association, the authorized share
capital of the Company currently consists of US$120,000,000, divided into
100,000,000 Common Shares of par value US$1.00 each, 14,000,000 Preferred
Shares of par value US$1.00 each and 6,000,000 undesignated shares of par value
US$1.00 each. At December 31, 2001 all of the 14,000,000 shares designated as
Preferred Shares were in issue and 50,164,250 of the shares designated as
Common Shares were in issue.
In December of 2001, the Company filed a Shelf Registration Statement
allowing for the issuance of up to US$600,000,000 of securities. The current
authorized and unissued share capital limits the type of securities that could
be issued if and when the Company decides to draw down on the Shelf
Registration.
The Board of Directors of the Company believes that the ability to issue
different forms of securities enhances the Company's corporate financing
opportunities. The increase in the authorized share capital will increase
flexibility when considering future investment opportunities and acquisitions
of other companies and will enhance the effectiveness of the Company's capital
management and structuring in connection with such things as employee benefit
plans, stock dividends and other corporate purposes.
If approved by the shareholders of the Company, the increase in authorized
share capital of the Company will be reflected in a Certificate of Deposit of
Memorandum of Increase of Share Capital that will be attached to and will form
part of the Company's Memorandum of Association.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE INCREASE IN THE
AUTHORIZED SHARE CAPITAL OF THE COMPANY FROM US$120,000,000 TO US$150,000,000
BY THE CREATION OF 30,000,000 UNDESIGNATED SHARES PAR VALUE US$1.00 PER SHARE.
16
Performance Graph
The graph set forth below compares the cumulative shareholder return,
including reinvestment of dividends, on the Company's Common Shares to such
return for Standard & Poor's ("S&P") 500 Composite Stock Price Index and S&P's
Property-Casualty Industry Group Stock Price Index for the period commencing
with the effective date of the initial public offering of the Company's Common
Shares on October 28, 1993 and ending on December 31, 2001, assuming $100 was
invested on October 28, 1993. Each measurement point on the graph below
represents the cumulative shareholder return as measured by the last sale price
at the end of each year during the period from October 28, 1993 through
December 31, 2001. As depicted in the graph below, during this period the
cumulative total shareholder return on the Company's stock was 219.02%, the
cumulative total return for the S&P 500 Composite Stock Price Index was 185.18%
and the cumulative total return for the S&P Property-Casualty Industry Group
Stock Price Index was 125.32%.
[CHART]
Annual S&P 500 S&P Property-Casualty
Composite Stock Industry Group Stock
PartnerRe Ltd. Price Index Price Index
-------------- --------------- ---------------------
Oct-93 (1) 100 100 100
Dec-93 108.75 100.245 94.483
Dec-94 105.78 101.603 98.976
Dec-95 142.749 139.65 133.844
Dec-96 179.999 171.628 163.377
Dec-97 249.952 228.815 232.947
Dec-98 251.217 294.073 211.772
Dec-99 183.114 355.874 153.65
Dec-00 352.74 323.456 244.157
Dec-01 319.018 285.182 225.323
17
Audit Committee Disclosure
The Audit Committee of the Company advises shareholders that the four
members of the Audit Committee are independent members of the board in that
none of the members has been an employee for the last five years and none of
the members or entities to which they belong has transacted significant
business of any kind with the Company in the past five years as determined by
the Board of Directors of the Company.
Each member of the Audit Committee is financially literate, with the
Chairman of the Committee, Mr. Robert Baylis, being a qualified Chartered
Financial Analyst and having held very senior positions at the banking and
investment operation, CS First Boston since 1993. Mr. McLaughlin, who is a
member of the audit committee, presided over the Aspen Institute, which is an
organisation providing specifically for the advancement of business people in
the global community for many years and has had business exposure on many
Boards including Viacom Inc. (formerly CBS) and Atlas Air. Mr. Holsboer was a
senior executive of the ING/Nationale-Nederlanden from 1990 to 1999 and served
as a member of the Executive Committee of ING Bank. Mr. Rollwagen is the
Principal of Quatris Fund and he has been an investor and business advisor
specializing in information technology since 1993.
The Audit Committee Charter of the Company, which has been in place since
1993, was amended to accommodate the new rules adopted by the SEC and by the
New York Stock Exchange and was adopted by the Board on May 19, 2000. It was
subsequently amended in August 2001 and the amended Charter is appended to this
Proxy Statement. The Audit Committee Charter outlines the scope of
responsibilities of the Committee. The Charter also addresses the choice of
independent Auditors and their selection, evaluation and if necessary,
replacement. The Charter states that the Audit Committee is responsible for
overseeing auditor independence. The Audit Committee Charter will be reviewed
annually by the Board.
The fees billed to the Company by the external auditors, Deloitte & Touche,
the member firms of Deloitte Touche Tohmatsu, and their respective affiliates
for the fiscal year 2001 were:
Audit Fees.................................................... $1,110,620
Financial Information Systems Design And Implementation
Fees........................................................ $ 0
Other Fees
Actuarial Support............................. $1,173,123
Audit Related (a)............................. $ 509,713
Tax Consultation.............................. $ 74,250
Other......................................... $ 2,940
----------
Total Other Fees.......................................... $1,760,026
-----
(a) Includes fees for consents, reviews of and required procedures related
to filings and registration statements, internal control reviews and
fees for the audit of company's employee benefit plans.
The Audit Committee has reviewed and discussed with the independent auditors
their judgments as to the quality of the Company's accounting principles and
such other matters as are required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees) as amended.
The Audit Committee has discussed with the independent auditors whether the
auditors' provision of non-audit related services is compatible with
maintaining the auditors' independence from management and the Company and has
received from the independent auditors written disclosures required by the
Independence Standards Board, Standard No. 1.
18
The Audit Committee has reviewed and discussed the audited financial
statements with management and with the independent auditors of the Company,
Deloitte & Touche. Based on such reviews and discussions the Audit Committee
has recommended to the Board that the audited financial statements be included
in the Company's Annual Report on Form 10-K.
Audit Committee
Robert M. Baylis
Jan H. Holsboer
David T. McLaughlin
John A. Rollwagen
19
REAPPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors proposes and recommends that the shareholders
reappoint the firm of Deloitte & Touche to serve as independent auditors of the
Company until the 2003 annual general meeting. Deloitte & Touche has served as
the Company's independent auditors from the Company's inception in August 1993
to the present. A representative of Deloitte & Touche will attend the Annual
Meeting and will have an opportunity to make a statement, if he or she desires
to do so, and to respond to appropriate questions. Shareholders at the Annual
Meeting will also be asked to vote to refer the determination of the auditors'
remuneration to the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE REAPPOINTMENT OF DELOITTE
& TOUCHE AS THE COMPANY'S INDEPENDENT AUDITORS UNTIL THE 2003 ANNUAL GENERAL
MEETING AND THE REFERRAL TO THE BOARD OF DIRECTORS OF THE DETERMINATION OF THE
AUDITORS' REMUNERATION.
MISCELLANEOUS
The Company will bear all of the costs of the solicitation of proxies for
use at the Annual Meeting. In addition to the use of the mails, proxies may be
solicited by a personal interview, telephone and telegram by directors,
officers and employees of the Company, who will undertake such activities
without additional compensation. Banks, brokerage houses and other
institutions, nominees or fiduciaries will be requested to forward the proxy
materials to the beneficial owners of the Common Shares held of record by such
persons and entities and will be reimbursed for their reasonable expenses
incurred in connection with forwarding such material.
Shareholders who do not expect to attend in person are urged to sign, date
and return the enclosed proxy in the envelope provided. In order to avoid
unnecessary expense, we ask your cooperation in mailing your proxy promptly, no
matter how large or how small your holdings.
At the date of this Proxy Statement, management has no knowledge of any
business, other than that described herein, which will be presented for
consideration at the Annual Meeting. In the event any other business is
properly presented at the Annual Meeting, it is intended that the persons named
in the enclosed proxy will have authority to vote such proxy in accordance with
their judgment on such business.
Copies of Form 10-K Annual Report
The Company will furnish, without charge, a copy of its annual report on
Form 10-K for the year ending December 31, 2001, filed with the Securities and
Exchange Commission, to each person solicited hereunder who mails a written
request therefor to the Chief Financial Officer, PartnerRe Ltd., Chesney House,
96 Pitts Bay Road, Pembroke HM08, Bermuda. Such requests may also be made by
placing a telephone call to 1-441-292-0888. The Company will also furnish, upon
payment of a reasonable fee to cover reproduction and mailing expenses, a copy
of all exhibits to such annual report on Form 10-K.
20
Appendix A
PartnerRe Ltd.
AUDIT COMMITTEE CHARTER
AUDIT COMMITTEE MISSION STATEMENT
The Audit Committee has been established to oversee the financial reporting
process and the internal control structure on behalf of the board of directors
and shareholders. The Audit Committee will comprise at least three members of
the board of directors, each of whom will be independent directors in that they
are independent of management and of the original sponsors of the Company and
free from any relationship that, in the opinion of the board of directors,
would interfere with the exercise of independent judgment as a committee
member. The Audit Committee will meet regularly with management and the outside
auditors and report on their activities to the full board of directors. In this
regard, the Audit Committee will provide the outside auditors normal and ready
access to the board of directors, as necessary, and will serve as an informed
voice on the board of directors in support of financial and accounting matters.
RESPONSIBILITIES OF THE AUDIT COMMITTEE
The Audit Committee's duties and responsibilities include, but are not
limited to, the following:
. Review this Audit Charter annually.
. Review and approve the annual accounts.
. Review the adequacy of the Company's system of internal control.
. Review the recommendations of management with regard to the appointment of
independent auditors and recommend to the Board the appointment of
independent auditors.
. Review Internal Audit Policy with Internal Auditor.
. Review Group Compliance with Internal Auditor.
. Review and approve the independent auditors' proposed audit scope and
approach.
. Review the performance of the independent auditors and recommend to the
Board their fee arrangements.
. Meet periodically with the independent auditors and conduct a post audit
review of the financial statements and audit findings, including any
significant suggestions for improvements provided to management by the
independent auditors.
. Review management's adoption (with the concurrence of the external
auditors) of new accounting policies or changes in accounting policies and
recommend these to the Board.
. Review management's monitoring of compliance with regulatory matters.
. Review, with management (and the Company's counsel), any legal matters
that could have a significant impact on the company's financial statements
and bring these matters to the attention of the Board.
. Review the findings of any examinations by regulatory agencies, such as
the Securities and Exchange Commission or insurance regulatory authorities.
. Review the approved Reserving Policy and ensure actual procedure follows
policy.
. Review compliance with reinsurance underwriting guidelines.
. Review the internal procedures in the underwriting area.
. Review Internal Audit presentations which are made by management to the
Committee.
A-1
. Review of related party relationships and where necessary ensure
disclosure of related party transactions.
. Ensure that a review of senior management expenses occurs on an annual
basis for approval by the Board.
. Perform other oversight functions as requested by the board of directors.
. Selecting, evaluating and, if necessary, replacing the outside auditors.
PROCEDURES FOR THE AUDIT COMMITTEE
The audit committee will meet at least four times per year in conjunction
with regularly scheduled board of directors meetings and will have a
Chairperson and a Secretary.
. The Board of Directors will:
- --Approve the Audit Committee members
- --Appoint an Audit Committee Chairman
. The Chairperson will:
- --Conduct quarterly communication with the outside auditors regarding the
quarterly review to be completed by the auditors and management
(together and or separately). Such review will address:
--the results of the quarterly outside auditors review.
- --material weaknesses, if any.
- --reportable conditions identified by the outside auditors during their review.
- --Conduct all Audit Committee meetings.
- --Ensure all matters before the Audit Committee are addressed and adequately
resolved.
- --Report to the full board of directors on Audit Committee activities, findings
and recommendations.
- --Receive from outside auditors a written statement outlining relationships
between the outside auditors and the Company.
- --Actively engage in dialogue with the outside auditors with respect to any
disclosed relationships.
- --Oversee the independence of the outside auditors.
. The Secretary will:
- --Prepare and circulate Audit Committee meeting agendas.
- --Prepare and circulate minutes of all Audit Committee meetings.
. Resource for this Committee will be the Internal Auditor and the CFO.
. The outside auditors will:
- --Perform quarterly reviews of the interim financial statements included in the
Company's 10-Q.
- --Discuss with the Audit Committee Chairman various aspects of their quarterly
review prior to the release of the 10-Q.
A-2
REPORTING TO THE BOARD OF DIRECTORS
Based on the information, opinions and assurances provided by the outside
auditors and senior management of the Company, the Audit Committee will report
on the following to the board of directors:
. The outside auditors are satisfied with the scope of their audit of the
financial statements and the system of accounting and internal control of
the Company.
. The outside auditors have been given the full cooperation of management
and staff of the Company in discharging their responsibilities.
. In the opinion of the outside auditors and management, the financial
statements present fairly, in all material respects, the financial
positions and results of operations of the company.
. The outside auditors and management of the Company are not aware of any
illegal or improper activities or transactions or any violations of any
applicable laws or code of business conduct.
. The audited financial statements of the Company have been examined and
approved by the Audit Committee and are submitted to the board of
directors with a recommendation for approval.
. Confirm the independence of the external auditors to the Board.
. Report on the adequacy of the controls and compliance in the Company.
. While the Audit Committee has the responsibility and power set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are
complete and accurate and are in accordance with generally accepted
accounting principles. This is the responsibility of management and the
outside auditors. Nor is it the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and
the outside auditors or to assure compliance with laws and regulations and
the Company's policies generally.
The Committee will keep the full board apprised of policy matters in an open
and informative manner.
A-3