Filed pursuant to Rule 424(b)(5)
Registration No. 333-74104
333-74104-01
333-74104-02
(Pursuant to Rule 429, also
Registration No. 333-55304
333-55304-01
333-55304-02)
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 3, 2001)
$200,000,000
(RGA LOGO)
6 3/4% SENIOR NOTES DUE 2011
- --------------------------------------------------------------------------------
This is an offering by Reinsurance Group of America, Incorporated of
$200,000,000 of its 6 3/4% Senior Notes due 2011. Interest is payable on the
notes on June 15 and December 15 of each year, commencing June 15, 2002.
The notes will not be subject to redemption or any sinking fund payments.
The notes will be our senior unsecured obligations.
INVESTING IN THE NOTES INVOLVES RISKS. RISK FACTORS BEGIN ON PAGE 5 OF THE
ATTACHED PROSPECTUS.
<Table>
<Caption>
PER NOTE TOTAL
-------- -----
Public Offering Price....................................... 99.922% $199,844,000
Underwriting Commissions.................................... 0.650% $ 1,300,000
Proceeds to RGA (before expenses)........................... 99.272% $198,544,000
</Table>
Plus accrued distributions from December 19, 2001, if any.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The underwriters expect to deliver the notes on or about December 19, 2001.
- --------------------------------------------------------------------------------
BANC OF AMERICA SECURITIES LLC LEHMAN BROTHERS
BNY CAPITAL MARKETS, INC.
FLEET SECURITIES, INC.
A.G. EDWARDS & SONS, INC.
DECEMBER 12, 2001
---------------------
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of the notes that we are offering
and other matters relating to us and our financial condition. The second part is
the attached prospectus, which gives more general information about securities
we may offer from time to time, some of which does not apply to the notes we are
offering. The description of the terms of the notes contained in this prospectus
supplement supplements the description under the "Description of Debt Securities
of RGA" in the attached prospectus, and to the extent it is inconsistent with
that description, the information in this prospectus supplement replaces the
information in the attached prospectus. Generally, when we refer to the
prospectus, we are referring to both parts of this document combined. If the
description of the notes in the prospectus supplement differs from the
description of the notes in the accompanying base prospectus, you should rely on
the information in this prospectus supplement.
When we use the terms "RGA," "we," "us" or "our" in this prospectus
supplement, we mean Reinsurance Group of America, Incorporated and its
subsidiaries, on a consolidated basis, unless we state or the context implies
otherwise.
You should rely only on the information provided or incorporated by
reference in this prospectus supplement and the attached prospectus. We have
not, and the underwriters have not, authorized anyone to provide you with
different or additional information. If anyone provides you with different or
inconsistent information, you should not rely on it. This document may only be
used where it is legal to sell these securities.
Certain jurisdictions may restrict the distribution of these documents and
the offering of the notes. We require persons receiving these documents to
inform themselves about and to observe any such restrictions. We have not taken
any action that would permit an offering of the notes or the distribution of
these documents in any jurisdiction that requires such action.
TABLE OF CONTENTS
<Table>
<Caption>
PROSPECTUS SUPPLEMENT PAGE
- --------------------- ----
About this Prospectus Supplement...... i
Cautionary Statement Regarding
Forward-Looking Statements.......... ii
Prospectus Supplement Summary......... S-1
Use of Proceeds....................... S-7
Capitalization........................ S-8
Selected Consolidated Financial
Information......................... S-9
Ratios of Earnings to Fixed Charges... S-10
Description of the Notes.............. S-11
Underwriting.......................... S-17
Legal Matters......................... S-19
</Table>
<Table>
<Caption>
PROSPECTUS PAGE
- ---------- ----
About this Prospectus................. 2
Where You Can Find More Information... 3
Incorporation of Certain Documents by
Reference........................... 3
Risk Factors.......................... 5
Cautionary Statement Regarding
Forward-Looking Statements.......... 10
Information about RGA................. 11
Information about the RGA Trusts...... 12
Use of Proceeds....................... 13
Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed
Charges and Preference Dividends.... 14
Description of Debt Securities of
RGA................................. 14
Description of Capital Stock of RGA... 28
Description of Depositary Shares of
RGA................................. 37
Description of Warrants and Warrant
Units of RGA........................ 40
Description of Stock Purchase
Contracts and Stock Purchase Units
of RGA.............................. 41
Description of Preferred Securities of
the RGA Trusts...................... 42
Description of the Preferred
Securities Guarantees of RGA........ 45
Effect of Obligations under the Junior
Subordinated Debt Securities and the
Preferred Securities Guarantees..... 48
Plan of Distribution.................. 49
Legal Matters......................... 51
Experts............................... 51
</Table>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and the attached prospectus contain and
incorporate by reference a number of forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 relating to,
among others:
- projections of our earnings, revenues, income or loss, or capital
expenditures;
- our plans for future operations and financing needs or plans; and
- assumptions relating to the foregoing.
The words "intend," "expect," "project," "estimate," "predict," "anticipate,"
"should," "believe" and other similar expressions also are intended to identify
forward-looking statements.
These forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Future events
and actual results, performance and achievements could differ materially from
those set forth in, contemplated by or underlying the forward-looking
statements.
ii
Important factors that could cause actual results to differ materially from
estimates or forecasts contained in the forward-looking statements include,
among others:
- market conditions and the timing of sales of investment securities;
- regulatory action taken by the New York or Missouri Departments of
Insurance with respect to Metropolitan Life Insurance Company, which we
refer to as "MetLife," GenAmerica Financial Corporation, which we refer
to as "GenAmerica," or us and our subsidiaries;
- changes in the financial strength and credit ratings of RGA and our
subsidiaries and of MetLife and its affiliates and the effect of such
changes on our future results of operations and financial condition;
- material changes in mortality and claims experience;
- competitive factors and competitors' responses to our initiatives;
- general economic conditions affecting the demand for insurance and
reinsurance in our current and planned markets;
- successful execution of our entry into new markets;
- successful development and introduction of new products;
- the stability of governments and economies in the markets in which we
operate;
- fluctuations in U.S. and foreign interest rates and securities and real
estate markets;
- the success of our clients;
- changes in laws, regulations and accounting standards applicable to us
and our subsidiaries; and
- other risks and uncertainties described in this document and in our other
filings with the SEC.
If one or more of these risks or uncertainties materializes, or if
underlying assumptions prove incorrect, actual outcomes may vary materially from
those indicated.
You should not place undue reliance on those statements, which speak only
as of the date on which they are made. We may not update these forward-looking
statements, even though our situation may change in the future, unless we are
obligated under the federal securities laws to update and disclose material
developments related to previously disclosed information. We qualify all of our
forward-looking statements by these cautionary statements.
iii
PROSPECTUS SUPPLEMENT SUMMARY
The following summary highlights selected information contained elsewhere
in this prospectus supplement and the attached prospectus and does not contain
all the information you will need in making your investment decision. You should
read carefully this entire prospectus supplement, the attached prospectus and
the documents incorporated by reference in them. Our principal subsidiaries are
RGA Reinsurance Company, which we refer to as "RGA Reinsurance," RGA Life
Reinsurance Company of Canada, which we refer to as "RGA Canada" and RGA
Reinsurance Company (Barbados) Ltd., which we refer to as "RGA Barbados."
RGA
We, through our operating subsidiaries, are one of the largest life
reinsurers in North America. At September 30, 2001, we had assets of $6.5
billion, stockholders' equity of $918.5 million and assumed reinsurance in force
of $585.8 billion. We have five main operational segments segregated primarily
by geographic region: United States, Canada, Latin America, Asia Pacific, and
other international operations. Our core United States and Canadian life
reinsurance business serves as the platform for our business strategy of further
expansion into selected domestic and international markets.
Reinsurance is an arrangement under which an insurance company, the
"reinsurer," agrees to indemnify another insurance company, the "ceding
company," for all or a portion of the insurance risks underwritten by the ceding
company. Reinsurance is designed to:
- reduce the net liability on individual risks, thereby enabling the ceding
company to increase the volume of business it can underwrite, as well as
to increase the maximum risk it can underwrite on a single life or risk;
- stabilize operating results by leveling fluctuations in the ceding
company's loss experience;
- assist the ceding company to meet applicable regulatory requirements; and
- enhance the ceding company's financial strength and surplus position.
Reinsurance may be written on a facultative basis or an automatic treaty
basis. Facultative reinsurance is individually underwritten by the reinsurer for
each policy to be reinsured, with the pricing and other terms established at the
time the policy is underwritten based upon rates negotiated in advance. An
automatic reinsurance treaty provides that the ceding company will cede risks to
a reinsurer on specified blocks of business where the underlying policies meet
the ceding company's underwriting criteria. In contrast to facultative
reinsurance, the reinsurer does not approve each individual risk. Automatic
reinsurance treaties generally provide that the reinsurer will be liable for a
portion of the risk associated with the specified policies written by the ceding
company. Automatic reinsurance treaties specify the ceding company's binding
limit, which is the maximum amount of risk on a given life that can be ceded
automatically and that the reinsurer must accept. The binding limit may be
stated either as a multiple of the ceding company's retention, as a stated
dollar amount or a pro rata percentage of the insured amount.
Our approach to North America -- the United States and Canadian markets,
which represented approximately 74% and 13% of net premiums in 2000,
respectively, and approximately 73% and 11% for the first nine months of 2001,
respectively -- has been to:
- focus on large, high quality life insurers as clients;
- provide quality facultative underwriting and competitive automatic
reinsurance capacity; and
- deliver responsive and flexible service to our clients.
We believe we are one of the largest facultative life reinsurers in North
America. We conduct business with the majority of the largest U.S. and Canadian
life insurance companies, with no single non-affiliated client representing more
than 10% of 2000 consolidated gross premiums.
S-1
We have also developed our capacity and expertise in non-traditional
reinsurance, which includes asset-intensive products and financial reinsurance.
In 2000 and the first nine months of 2001, our North American non-traditional
reinsurance business earned $19.3 million and $16.7 million, respectively, or
approximately 11% and 17%, respectively, of income before income taxes and
minority interest (excluding the discontinued accident and health operations).
Our non-traditional business currently includes reinsurance of corporate-owned
life insurance and annuities.
We use our underwriting expertise and industry knowledge as we expand into
selected international markets. Our operations outside North America currently
include Latin America, Asia Pacific, and other select international locations,
primarily the United Kingdom and South Africa. The Latin American operations,
which represented approximately 5% of net premiums in 2000 and 4% of net
premiums for the first nine months of 2001, include traditional reinsurance,
reinsurance of privatized pension products primarily in Argentina, and direct
life insurance through a subsidiary in Argentina. Since 1999, we have reduced
our participation in the reinsurance of privatized pension contracts in
Argentina, and in June 2001, we did not renew insurance treaties associated with
this business. We have completed an analysis and review of the privatized
pension business and will record a charge during the fourth quarter, as
described below under "-- Recent Developments." Asia Pacific operations, which
represented approximately 7% of net premiums in 2000 and for the first nine
months of 2001, provide primarily traditional life reinsurance through RGA
Reinsurance Company of Australia, Limited and RGA Reinsurance. Other
international operations, which represented approximately 2% of net premiums in
2000 and 5% of net premiums for the first nine months of 2001, include
traditional reinsurance business from Europe and South Africa, in addition to
other markets being developed by us.
RGA Reinsurance has an "AA" claims paying rating from Standard & Poor's
Ratings Service Inc., an "A1" claims paying rating from Moody's Investors
Service and an "A+" claims paying rating from A.M. Best and Company, Inc. The
S&P, Moody's and A.M. Best claims paying ratings are based upon an insurance
company's ability to pay policyholder obligations and are not directed toward
the protection of investors.
RGA was formed on December 31, 1992. Through a predecessor, we have been
engaged in the business of life reinsurance since 1973. Our executive office is
located at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017-6039, and
our telephone number is (636) 736-7000.
INDUSTRY TRENDS
We believe that the following trends in the insurance industry are
increasing the demand for life reinsurance.
Outsourcing of Mortality. Life reinsurance penetration of life insurance
in force has been increasing over the last several years. We believe this trend
reflects increased use by life insurance companies of reinsurance to manage
capital and mortality risk and to develop competitive products.
Increased Capital Sensitivity. Regulatory environment and competitive
business pressures are causing life insurers to reinsure as a means to:
- manage risk-based capital by shifting mortality and other risks to
reinsurers;
- release capital to pursue new businesses; and
- unlock the capital supporting, and value embedded in, non-core product
lines.
Consolidation and Reorganization Within the Industry. The number of merger
and acquisition transactions within the U.S. life insurance industry has
increased in recent years. We believe that U.S. reorganizations of life
insurers, such as demutualizations, and international consolidation will
continue. As reinsurance products are increasingly used to facilitate these
transactions and manage risk, we expect demand for our products to continue.
S-2
Changing Demographics of Insured Populations. The aging of the population
in North America is increasing demand for financial products among "baby
boomers" who are concerned about protecting their peak income stream and are
considering retirement and estate planning. We believe that this trend is likely
to result in continuing demand for annuity products and life insurance policies,
larger face amounts of life insurance policies and higher mortality risk taken
by life insurers, all of which should cause insurers to seek reinsurance
products.
BUSINESS STRATEGY
We continue to follow a two-part business strategy to capitalize on
industry trends.
Continue Growth of Core North American Business. Our strategy includes
continuing to grow each of the following components of our North American
operations:
- Facultative Reinsurance. We intend to maintain a leading position as a
facultative underwriter in North America by emphasizing our underwriting
standards, prompt response on quotes, competitive pricing, capacity and
flexibility in meeting customer needs.
- Automatic Reinsurance. We intend to expand our presence in the North
American automatic reinsurance market by using our mortality expertise
and breadth of products and services to gain additional market share.
- In Force Block Reinsurance. We anticipate opportunities to grow our
business by reinsuring "in force block" insurance, as insurers seek to
exit various non-core businesses and increase financial flexibility in
order to, among other things, redeploy capital and pursue merger and
acquisition activity.
Continue Expansion Into Selected Markets. Our strategy includes building
upon the expertise and relationships developed from our core North American
business platform to continue our expansion into selected markets, including:
- Non-Traditional Reinsurance. We intend to continue leveraging our
existing client relationships and reinsurance expertise to create
customized non-traditional reinsurance products and solutions. Industry
trends, particularly the increased pace of consolidation and
reorganization among life insurance companies and changes in product
distribution, are expected to create growth opportunities for
non-traditional reinsurance.
- Other International. Management believes that international markets
offer opportunities for growth, and we intend to capitalize on this
opportunity by establishing a presence in selected markets. We use our
reinsurance expertise, facultative underwriting abilities and market
knowledge as we continue to enter mature and emerging insurance markets.
METLIFE OWNERSHIP AND REINSURANCE RELATIONSHIPS
On January 6, 2000, MetLife acquired 100% of GenAmerica Financial
Corporation, including its beneficial ownership of RGA shares, which was
approximately 48% at December 31, 1999. This acquisition, together with a
private placement of approximately 4.8 million shares of our common stock
completed in November 1999, made MetLife our majority shareholder, with
beneficial ownership of approximately 58.4% of all outstanding shares as of
September 30, 2001.
We have reinsurance agreements with MetLife and some of its subsidiaries.
As of December 31, 2000, we had assets and liabilities related to these
agreements totaling $103.3 million and $114.1 million, respectively. Under these
agreements, we reflected net premiums of approximately $144.0 million, $130.3
million, and $111.5 million in 2000, 1999 and 1998, respectively. The net
premiums reflect the net of business assumed from and ceded to MetLife and its
subsidiaries, including GenAmerica. The pre-tax gain (loss) on this business was
approximately $17.8 million, ($31.0) million, and $17.7 million in 2000, 1999
and 1998, respectively.
S-3
MetLife does not, and will not, have any obligations with respect to the
notes.
For more information about our corporate structure and relationship with
MetLife, see "Business -- Overview" and "-- Corporate Structure" and "Certain
Relationships and Related Transactions" in our Annual Report on Form 10-K, as
amended on Form 10-K/A, for the year ended December 31, 2000, which is
incorporated by reference in the attached prospectus.
RECENT DEVELOPMENTS
ARGENTINE PENSION BUSINESS
On October 25, 2001, we announced that we were reviewing the recent
experience of our reinsurance of Argentina's privatized pension program, which
we refer to as the "AFJP business," and that several aspects of the pension fund
claims flow were not developing as was contemplated when the reinsurance
programs were initially priced. As a result, we will add to reserves and record
a charge during the fourth quarter of $35 million, on a pre-tax basis. We
established these reserves based on assumptions concerning the run-off of the
remaining AFJP business and current market conditions. We believe the resultant
reserve levels will be adequate to cover the run-off of that business. If,
however, our assumptions prove incorrect or market conditions change, we may
need to establish additional reserves. In addition, subsequent to September 30,
2001, we sold substantially all our remaining Argentine-based bond investments
supporting the privatized pension reinsurance, resulting in a pre-tax realized
investment loss of $4.2 million.
ACCIDENT AND HEALTH ARBITRATION
Since April of 2000, RGA Reinsurance has been involved in a dispute with a
ceding company involving certain quota share reinsurance agreements covering
first dollar medical insurance policies in our discontinued accident and health
business. The dispute was subsequently referred to an arbitration panel pursuant
to the terms of these reinsurance agreements. Recently, the arbitration panel
issued its final award, which requires RGA Reinsurance to make a payment to the
ceding company. RGA Reinsurance will incur a charge, after utilization of
existing reserves, of approximately $10.0 million on a pre-tax basis in the
fourth quarter of 2001 relating to the arbitration.
INVESTMENTS IN SECURITIES OF ENRON CORP. AND ITS AFFILIATES
As of December 5, 2001, we held $10.0 million par value (book value of
$8.92 million) of notes issued by Enron Corp., which recently filed for
bankruptcy. As of December 5, 2001, the Enron bonds had a quoted market value of
$2.6 million. Additionally, until December 3, 2001, we held $2.5 million par
value (book value is the same) of bonds issued by an Enron affiliate, and the
sale of the bonds resulted in a pre-tax loss of $2.2 million.
S-4
THE OFFERING
SECURITIES OFFERED............ $200,000,000 aggregate principal amount of
6 3/4% Senior Notes due December 15, 2011.
INTEREST RATE................. The notes will bear interest at the rate of
6 3/4% per year, payable semiannually on June
15 and December 15, commencing June 15, 2002.
MATURITY DATE................. December 15, 2011.
RANKING....................... The notes will be senior unsecured obligations
of RGA and will rank equally in right of
payment with all of our current and future
other senior debt of RGA. The notes will be
effectively subordinated to any debt that is
secured by assets of RGA to the extent of the
value of these assets, unless the notes are
also secured by these assets. In addition,
because RGA is a holding company, the notes
will be effectively subordinated to the current
and future indebtedness, other liabilities and
preferred stock of our subsidiaries held by
third parties. As of September 30, 2001, after
giving effect to this offering and the Trust
PIERS units offering described below, the notes
would have:
- ranked equally with $318.2 million of our
senior unsecured indebtedness; and
- ranked junior to $5.3 billion of liabilities
of our subsidiaries.
CERTAIN COVENANTS............. The indenture under which we will issue the
notes will contain covenants that, among other
things, restrict RGA's ability to incur
indebtedness secured by a lien on the voting
stock of any restricted subsidiary, limit RGA's
ability to issue or otherwise dispose of shares
of capital stock of any restricted subsidiary
and limit RGA's ability to consolidate with or
merge into, or transfer substantially all of
its assets to, another corporation. The
covenants are subject to important exceptions.
OPTIONAL REDEMPTION........... None.
SINKING FUND.................. None.
USE OF PROCEEDS............... We anticipate that we will use the net proceeds
from the offering of the notes to repay a $75.0
million term loan we borrowed from MetLife and
approximately $120.0 million of outstanding
revolving borrowings under our $140.0 million
credit agreement with a bank syndicate led by
The Bank of New York.
FORM AND DENOMINATION......... The Depository Trust Company, which we refer to
as "DTC," will act as securities depositary for
the notes. The notes will be issued only as
fully registered, global securities registered
in the name of DTC or its nominee for credit to
an account of a direct or indirect participant
in DTC. The notes will be issued in
denominations of U.S. $1,000 and integral
multiples thereof.
RISK FACTORS.................. Investing in the senior notes involves risks.
See "Risk Factors" beginning on page 5 of the
attached prospectus.
S-5
TRUST PIERS UNITS OFFERING
Prior to the completion of this offering, we are planning to sell 4.5
million of our Trust Preferred Income Equity Redeemable Securities (PIERS*)
units, which are units consisting of a trust preferred security and a warrant to
purchase shares of our common stock. We expect the sale of the Trust PIERS units
will result in gross proceeds before expenses to us of approximately $218.2
million, assuming the underwriters' over-allotment option to acquire an
additional $33.75 million of units is not exercised. This offering is
conditioned on the Trust PIERS units offering, which means that we may not
complete this offering without first completing the Trust PIERS units offering.
- ---------------
* "Preferred Income Equity Redeemable Securities(SM)" and "PIERS(SM)" are
service marks owned by Lehman Brothers Inc.
S-6
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the notes will be
approximately $198.4 million, after deducting the underwriters' discounts and
commissions and estimated offering expenses. We anticipate that we will use the
net proceeds from this offering to repay a $75.0 million term loan we borrowed
from MetLife, and approximately $120.0 million of outstanding revolving
borrowings under our $140.0 million credit agreement with The Bank of New York,
Bank of America, N.A., Fleet National Bank, Royal Bank of Canada and Mellon
Bank, N.A., as lenders. Upon repayment of outstanding borrowings under the
credit agreement, our borrowing capacity will be restored and we will have broad
discretion over the use of any funds we subsequently borrow under this credit
agreement.
We summarize below the outstanding debt that we intend to repay from the
net proceeds of the offering of the senior notes, assuming that the offering had
closed on September 30, 2001, and the related interest rates and maturities:
- We had an outstanding $75.0 million term loan under the term loan
agreement dated as of March 1, 2001 with MetLife Credit Corp., a
subsidiary of MetLife, our majority shareholder. The term loan accrues
interest at 75.5 basis points over the 30-day "AA" rated financial
discount rate, which equaled 2.705% as of December 3, 2001, and matures
on June 30, 2004. The term loan was entered into on March 1, 2001, and
the proceeds of the loan were used to refinance a $75.0 million term loan
note in favor of General American, a subsidiary of MetLife, issued in
connection with a June 1, 1999 term loan agreement between us and General
American.
- We had outstanding approximately $120.0 million in revolving credit loans
under a credit agreement with The Bank of New York, Bank of America,
N.A., Fleet National Bank, Royal Bank of Canada and Mellon Bank, N.A., as
lenders. Borrowings under this credit agreement accrue interest at LIBOR
plus 62.5 basis points, which equaled 2.75% annually as of December 1,
2001, and mature on May 24, 2003. The proceeds of these loans were used
for general corporate purposes.
In addition, we estimate that the proceeds less expenses from the sale of
the Trust PIERS units will be approximately $217.7 million (or $250.5 million if
the underwriters' option to purchase additional units to cover any
over-allotments is exercised in full), after deducting the underwriters'
discounts and commissions and estimated offering expenses. We anticipate that we
will use the net proceeds from the offering of the units for general corporate
purposes. As a result, we will retain broad discretion over the use of the net
proceeds of the offerings.
Pending the use of the net proceeds from both offerings, we intend to
invest the net proceeds in short-term, interest-bearing, investment-grade
securities.
Affiliates of some of these lenders will act as agents and trustees in the
various agreements we enter into in connection with the Trust PIERS units and
their components.
S-7
CAPITALIZATION
We present in the table below the capitalization of RGA and its
subsidiaries:
- on an actual consolidated basis as of September 30, 2001;
- as adjusted to give effect to this offering; and
- as further adjusted to give effect to this offering and the contemplated
offering of $225.0 million of Trust PIERS units (and assuming no exercise
of the underwriters' over-allotment option).
The adjusted columns give effect to the application of the net proceeds
from the offerings as described under "Use of Proceeds" in this prospectus
supplement. You should read this table in conjunction with the consolidated
financial statements of RGA and the notes relating to them which are contained
in our Annual Report on Form 10-K for the year ended December 31, 2000 and our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001, June 30,
2001 and September 30, 2001, each of which are incorporated by reference in the
attached prospectus.
<Table>
<Caption>
SEPTEMBER 30, 2001
-----------------------------------
ACTUAL AS AS FURTHER
(UNAUDITED) ADJUSTED ADJUSTED
----------- -------- ----------
($ IN MILLIONS)
LONG-TERM DEBT:
Borrowings under $140 million credit agreement..... $ 120.0 $ -- $ --
Other net borrowings............................... 23.2 23.2 23.2
Term loan due 2004(1).............................. 75.0 -- --
7.25% senior notes due 2006........................ 100.0 100.0 100.0
6.75% senior notes due 2011........................ -- 200.0 200.0
-------- -------- --------
Total long-term debt....................... 318.2 323.2 323.2
5.75% Cumulative Trust Preferred Securities(2)..... -- -- 158.1
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share;
10,000,000 shares authorized; no shares issued
or outstanding.................................. -- -- --
Common stock, par value $.01 per share; 75,000,000
shares authorized, 51,053,273 shares issued at
September 30, 2001.............................. 0.5 0.5 0.5
Warrants(2)........................................ -- -- 66.9
Additional paid-in capital......................... 612.8 612.8 612.8
Retained earnings.................................. 400.4 400.4 400.4
Accumulated other comprehensive income............. (57.9) (57.9) (57.9)
Treasury stock..................................... (37.3) (37.3) (37.3)
-------- -------- --------
Total stockholders' equity................. 918.5 918.5 985.4
-------- -------- --------
Total capitalization....................... $1,236.7 $1,241.7 $1,466.7
======== ======== ========
</Table>
- ---------------
(1) Owed to a subsidiary of MetLife.
(2) Each Trust PIERS unit consists of a 5.75% cumulative trust preferred
security, stated liquidation amount $50 per security, and a warrant to
purchase shares of our common stock at an exercise price of $50 per warrant
at maturity, subject to adjustment.
S-8
SELECTED CONSOLIDATED FINANCIAL INFORMATION
We present in the table below our selected consolidated financial data and
other data which should be read in conjunction with and is qualified in its
entirety by reference to "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and unaudited consolidated financial statements and the related notes which are
contained in our Annual Report on Form 10-K for the year ended December 31, 2000
and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001,
June 30, 2001 and September 30, 2001, each of which are incorporated by
reference in the attached prospectus. The selected consolidated financial data
for the fiscal years ended December 31, 1996, 1997, 1998 and 1999 have been
derived from our financial statements which have been audited by KPMG Peat
Marwick LLP. The selected consolidated financial data for the fiscal year ended
December 31, 2000 have been derived from our financial statements which have
been audited by Deloitte & Touche LLP. The selected consolidated financial data
for the nine months ended September 30, 2000 and September 30, 2001 have been
derived from our unaudited consolidated financial statements. In the opinion of
our management, the unaudited information reflects all adjustments (consisting
only of normal and recurring adjustments) necessary for a fair presentation of
the results for those periods. Results for the nine months ended September 30,
2001 are not necessarily indicative of the results to be expected for the full
fiscal year.
<Table>
<Caption>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AND OPERATING DATA)
INCOME STATEMENT DATA:
Revenues:
Net premiums.......................... $ 617.7 $ 744.8 $1,016.4 $1,315.6 $1,404.1 $ 991.1 $1,179.7
Investment income, net of related
expenses............................ 135.8 187.1 301.8 340.3 326.5 238.4 251.1
Realized capital (losses) gains....... 0.9 0.3 3.1 (75.3) (28.7) (18.3) (35.4)
Other income.......................... 16.8 46.0 23.2 26.5 23.8 12.6 21.9
-------- -------- -------- -------- -------- -------- --------
Total revenue.................. 771.2 978.2 1,344.5 1,607.1 1,725.7 1,223.8 1,417.3
Benefits and expenses:
Claims and other policy benefits...... 463.5 569.1 797.9 1,067.1 1,103.6 776.3 954.7
Interest credited..................... 54.7 92.3 153.2 153.1 104.8 74.6 79.6
Policy acquisition costs and other
insurance expenses.................. 118.1 148.1 188.5 218.3 243.5 171.3 203.9
Other expenses........................ 37.5 47.5 58.0 64.5 80.9 59.2 66.9
Interest expense...................... 6.2 7.8 8.8 11.0 17.6 12.4 13.7
-------- -------- -------- -------- -------- -------- --------
Total benefits and expenses.... 680.0 864.8 1,206.4 1,514.0 1,550.4 1,093.8 1,318.8
Income from continuing operations before
income taxes and minority interest.... 91.2 113.4 138.1 93.1 175.3 130.0 98.5
Provision for income taxes.............. 33.1 40.4 49.1 39.1 69.2 52.7 37.4
-------- -------- -------- -------- -------- -------- --------
Income from continuing operations before
minority interest..................... 58.1 73.0 89.0 54.0 106.1 77.3 61.1
Minority interest in earnings (losses)
of consolidated subsidiaries.......... 0.3 0.4 (0.7) 1.0 0.3 0.6 --
-------- -------- -------- -------- -------- -------- --------
Income from continuing operations....... 57.8 72.6 89.7 53.0 105.8 76.7 61.1
Discontinued operations:
Loss from discontinued accident and
health operations, net of income
taxes................................. (2.7) (18.0) (27.6) (12.1) (28.1) (8.3) --
-------- -------- -------- -------- -------- -------- --------
Net income............................ $ 55.1 $ 54.6 $ 62.1 $ 40.9 $ 77.7 $ 68.4 $ 61.1
======== ======== ======== ======== ======== ======== ========
</Table>
S-9
<Table>
<Caption>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AND OPERATING DATA)
BASIC EARNINGS PER SHARE:
Continuing operations................... $ 1.53 $ 1.91 $ 2.11 $ 1.16 $ 2.14 $ 1.55 $ 1.24
Discontinued operations................. (0.08) (0.47) (0.61) (0.27) (0.57) (0.17) --
-------- -------- -------- -------- -------- -------- --------
1.45 1.44 1.50 0.89 1.57 1.38 1.24
DILUTED EARNINGS PER SHARE:
Continuing operations................... $ 1.52 $ 1.89 $ 2.08 $ 1.15 $ 2.12 $ 1.53 $ 1.22
Discontinued operations................. (0.08) (0.47) (0.60) (0.27) (0.56) (0.16) --
-------- -------- -------- -------- -------- -------- --------
Net income.............................. 1.44 1.42 1.48 0.88 1.56 1.37 1.22
Weighted average diluted shares (in
millions)............................. 38.1 38.4 42.6 46.2 49.9 50.0 49.9
Dividends per share on common stock..... 0.13 0.15 0.17 0.22 0.24 0.18 0.18
</Table>
<Table>
<Caption>
DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
BALANCE SHEET DATA:
Total investments....................... $2,272.0 $3,634.0 $5,129.6 $3,811.9 $4,560.2 $4,377.4 $4,747.6
Total assets............................ 2,893.7 4,673.6 6,318.6 5,123.7 6,061.9 5,922.2 6,505.4
Policy liabilities...................... 2,068.6 3,558.7 5,053.1 3,998.1 4,617.7 4,531.5 4,962.4
Total long-term debt.................... 106.5 106.8 108.0 184.0 272.3 262.1 318.2
Stockholders' equity.................... 425.6 499.3 748.5 732.9 862.9 829.6 918.5
Stockholders' equity per share.......... $ 11.14 $ 13.21 $ 16.52 $ 14.68 $ 17.51 $ 16.84 $ 18.57
OTHER FINANCIAL DATA (IN BILLIONS)
Assumed ordinary life reinsurance
business in force..................... $ 168.3 $ 227.3 $ 330.6 $ 446.9 $ 545.9 $ 494.3 $ 585.8
Assumed new business production......... 37.9 75.9 125.0 164.9 161.1 94.5 114.4
</Table>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of earnings to fixed charges and
earnings to fixed charges, including interest credited under reinsurance
contracts, for the periods indicated (1) on an actual basis, (2) on a pro forma
basis to give effect to this offering, and (3) on an adjusted pro forma basis to
give effect to this offering and our planned $225.0 million Trust PIERS units
offering, assuming the underwriters' over-allotment option to acquire an
additional $33.75 million of units is not exercised. For purposes of computing
the consolidated ratio of earnings to fixed charges, earnings consist of net
earnings from continuing operations adjusted for the provision for income taxes,
minority interest and fixed charges. Fixed charges consist of interest and
discount on all indebtedness, distribution requirements of wholly-owned
subsidiary trust preferred securities and one-third of annual rentals, which we
believe is a reasonable approximation of the interest factor of such rentals.
<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30,
2001
---------------------------------
YEARS ENDED DECEMBER 31, ADJUSTED ADJUSTED
---------------------------------- PRO FORMA PRO FORMA PRO
1996 1997 1998 1999 2000 2000 2000 HISTORICAL PRO FORMA FORMA
---- ---- ---- ---- ---- --------- --------- ---------- --------- --------
Ratio of earnings to fixed
charges.................... 13.8 13.9 15.2 8.5(1) 9.9 7.9 5.1 7.4 6.1 4.0
Ratio of earnings to exceed
charges including interest
credited under reinsurances
contracts.................. 2.5 2.1 1.8 1.6(1) 2.4 2.3 2.1 2.0 2.0 1.8
</Table>
- ---------------
(1) Coverage ratio in 1999 is lower than other annual periods presented due to
the inclusion of $75.3 million of net realized investment losses primarily
associated with the recapture of one block of business by General American
Life Insurance Company.
S-10
DESCRIPTION OF THE NOTES
We summarize below the material provisions of the notes and the indenture
and supplemental indenture under which we will issue the notes. We urge you to
read these documents in their entirety because they, and not this description,
will define your rights as holders of the notes. You may request copies of these
documents from us at our address set forth under "Incorporation of Certain
Documents by Reference" in the attached prospectus. The following description of
the terms of the notes supplements the description under "Description of Debt
Securities of RGA" at page 14 in the attached prospectus and to the extent that
it is inconsistent with that description, the information in this prospectus
supplement replaces the description of the general terms and provisions of the
debt securities set forth in the attached prospectus. In this section, when we
refer to "RGA," "we," "us" or "our," we mean Reinsurance Group of America,
Incorporated only and not Reinsurance Group of America, Incorporated and its
consolidated subsidiaries.
We will issue the notes under the senior indenture dated as of December 19,
2001, supplemented by a supplemental senior indenture dated as of December 19,
2001, in each case, between us and The Bank of New York, as trustee, which we
refer to collectively as the "indenture." The original indenture is filed as an
exhibit to the registration statement of which the attached prospectus forms a
part, and we will file the supplemental indenture as an exhibit to a Current
Report on Form 8-K, which will be incorporated by reference in the attached
prospectus. Certain terms of the notes are defined in the indenture and those
made part of the indenture by reference to the Trust Indenture Act of 1939.
PRINCIPAL, MATURITY AND INTEREST
We will initially issue $200.0 million aggregate principal amount of the
notes. The notes will mature on December 15, 2011.
Interest on the notes will accrue at the rate of 6 3/4% per year and will
be payable semiannually on June 15 and December 15 of each year, commencing on
June 15, 2002. Interest on the notes will accrue from their issue date, or if
interest has already been paid, from the date it was most recently paid. We will
make each interest payment on the notes to the holders of record on the
immediately preceding June 1 and December 1. Interest on the notes will be
computed on the basis of a 360-day year of twelve 30-day months. Principal of
and interest on the notes will be payable, and the notes will be exchangeable
and transfers thereof will be registrable, at the corporate trust office or
agency of The Bank of New York located at 101 Barclay Street, New York, New York
10286.
The notes will be issued only in registered form, without coupons and in
denominations of U.S. $1,000 and integral multiples thereof. The notes may be
transferred or exchanged without service charges, other than any tax or other
governmental charge imposed in connection with such transfer or exchange. We
have initially appointed The Bank of New York as the trustee, registrar and
paying agent for the notes.
We may from time to time, without the consent of the existing holders,
create and issue further notes having the same terms and conditions as the notes
being offered hereby in all respects, except for issue date, issue price and, if
applicable, the first payment of interest thereon. Additional notes issued in
this manner will be consolidated with, and will form a single series with, the
previously outstanding notes.
RANKING
The notes:
- will be our senior unsecured obligations;
- will rank senior to all of our existing and future subordinated debt; and
- will rank equally in right of payment with all our existing and future
senior unsecured debt, including our 7.25% Senior Notes due 2006.
S-11
The indenture will not preclude our subsidiaries from issuing secured or
unsecured indebtedness. If RGA issues secured indebtedness, to the extent the
security granted consists of voting stock in restricted subsidiaries, the
indenture will require the notes to rank equally as to security. However, to the
extent the security consists of other assets, the indenture will not provide
corresponding protection for the notes. Therefore, indebtedness issued by our
subsidiaries or indebtedness issued by us secured by assets other than voting
stock of restricted subsidiaries may be paid ahead of the notes in the event of
our or our subsidiaries' insolvency.
Because RGA is a holding company, its principal assets consist of the stock
of its insurance company subsidiaries, and, absent any additional capital
raising or borrowing, its principal cash flow would be derived from dividends
and other distributions or loans from its insurance company subsidiaries.
Therefore, RGA's ability to service its debt, including the notes, would be
dependent upon the earnings of these subsidiaries and their ability to
distribute those earnings as dividends or make loans or other payments to RGA.
In addition, regulatory restrictions may limit these payments. Our insurance
company subsidiaries are subject to various state statutory and regulatory
restrictions, applicable to insurance companies generally, that limit the amount
of cash dividends, loans and advances that those subsidiaries may pay to us. See
"Business -- Corporate Structure," "-- Regulation" and "-- Restrictions on
Dividends and Distributions" in our Annual Report on Form 10-K for the year
ended December 31, 2000 which is incorporated by reference in the attached
prospectus.
As a result of RGA being a holding company, the notes will be structurally
subordinated to all of its subsidiaries' existing and future obligations. RGA
only has a stockholder's claim in the assets of its subsidiaries. This
stockholder's claim is junior to claims that creditors of RGA's subsidiaries
have against those subsidiaries. Holders of the notes will only be creditors of
RGA, and such holders will not be creditors of RGA's subsidiaries, where most of
RGA's consolidated assets are located. All of RGA's subsidiaries' existing and
future liabilities, including any claims of trade creditors, claims under
reinsurance contracts, debt obligations, other liabilities and preferred
stockholders, will be effectively senior to the notes. As of September 30, 2001,
the total liabilities of our subsidiaries were approximately $5.3 billion. See
"Business -- Default or Liquidation" in our Annual Report on Form 10-K for the
year ended December 31, 2000 and "Risk Factors -- Our ability to pay principal,
interest and/or dividends on offered securities is limited" in the attached
prospectus.
REDEMPTION
The notes may not be redeemed prior to maturity.
SINKING FUND
There will be no sinking fund for the notes.
COVENANTS OF RGA
The indenture will not contain any provisions which will restrict us from
incurring, assuming or becoming liable with respect to any indebtedness or other
obligations, whether secured or unsecured, or from paying dividends or making
other distributions on our capital stock or purchasing or redeeming our capital
stock. The indenture also will not contain any financial ratios or specified
levels of net worth or liquidity to which we must adhere. In addition, the
indenture will not contain any provision which would require that we repurchase
or redeem or otherwise modify the terms of any of the notes upon a change in
control or other events involving RGA which may adversely affect the
creditworthiness of the notes.
S-12
The indenture will contain, among others, the following covenants, which
use some defined terms, whose meanings we provide below:
LIMITATIONS ON LIENS
We will not, and will not permit any Subsidiary to, incur, issue, assume or
guaranty any indebtedness if such indebtedness is secured by a mortgage, pledge
of, lien on, security interest in or other encumbrance upon any shares of Voting
Stock of any Restricted Subsidiary, whether that Voting Stock is now owned or is
hereafter acquired, without providing that the notes (together with, if we shall
so determine, any other indebtedness or obligations of RGA or any Subsidiary
ranking equally with the notes and then existing or thereafter created) shall be
secured equally and ratably with, or prior to, that indebtedness. The indenture
excepts from this limitation secured debt which we or our Subsidiaries may
incur, issue, assume, guarantee or permit to exist up to 10% of the value of our
Consolidated Tangible Net Worth.
The foregoing limitation on liens will not apply to:
(1) indebtedness secured by a pledge of, lien on or security interest
in any shares of Voting Stock of any corporation if such pledge, lien or
security interest is made or granted prior to or at the time such
corporation becomes a Restricted Subsidiary; provided that such pledge,
lien or security interest was not created in anticipation of the transfer
of such shares of Voting Stock to us or our Subsidiaries;
(2) liens or security interests securing indebtedness of a Restricted
Subsidiary to us or another Restricted Subsidiary; or
(3) the extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien or security
interest referred to in the foregoing clauses (1) and (2) but only if the
principal amount of indebtedness secured by the liens or security interests
immediately prior thereto is not increased and the lien or security
interest is not extended to other property.
LIMITATIONS ON ISSUANCE OR DISPOSITION OF STOCK OF RESTRICTED SUBSIDIARIES
We will not, nor will we permit any Restricted Subsidiary to, issue, sell,
assign, transfer or otherwise dispose of any shares of capital stock (other than
non-voting preferred stock) of any Restricted Subsidiary (or of any Subsidiary
having direct or indirect control of any Restricted Subsidiary), except, subject
to the covenant relating to "Limitation on Consolidation, Merger, Conveyance,
Sale of Assets and Other Transfers" discussed below, for:
(1) director's qualifying shares;
(2) a sale, assignment, transfer or other disposition of any capital
stock of any Restricted Subsidiary (or of any Subsidiary having direct or
indirect control of any Restricted Subsidiary) to us or to one or more
Restricted Subsidiaries;
(3) a sale, assignment, transfer or other disposition of all or part
of the capital stock of any Restricted Subsidiary (or of any Subsidiary
having direct or indirect control of any Restricted Subsidiary) for
consideration which is at least equal to the fair value of such capital
stock as determined by our board of directors acting in good faith;
(4) the issuance, sale, assignment, transfer or other disposition made
in compliance with an order of a court or regulatory authority of competent
jurisdiction, other than an order issued at the request of RGA or any
Restricted Subsidiary; or
(5) issuance for consideration which is at least equal to fair value
as determined by our board of directors acting in good faith.
S-13
LIMITATION ON CONSOLIDATION, MERGER, CONVEYANCE, SALE OF ASSETS AND OTHER
TRANSFERS
We will not consolidate with or merge with or into or wind up into, whether
or not we are the surviving corporation, or sell, assign, convey, transfer or
lease our properties and assets substantially as an entirety to any person,
unless:
(1) the surviving corporation or other person is organized and
existing under the laws of the United States or one of the 50 states, any
U.S. territory or the District of Columbia;
(2) the surviving corporation or other person assumes the obligation
to pay the principal of, and premium, if any, and interest on the notes,
and to perform or observe all covenants under the indenture; and
(3) immediately after the transaction, there is no event of default
under the indenture.
Upon the consolidation, merger or sale, the successor corporation formed by the
consolidation, or into which we are merged or to which the sale is made, will
succeed to, and be substituted for us under the indenture.
No quantitative or other established meaning has been given to the phrase
"all or substantially all" by courts that have interpreted this phrase in
various contexts. In interpreting this phrase, courts, among other things, make
a subjective determination as to the portion of assets conveyed, considering
such factors as the value of assets conveyed, the proportion of an entity's
income derived from the assets conveyed and the significance of those assets to
the ongoing business of the entity. Due to that uncertainty, it may be difficult
for holders of the notes to ascertain whether a viable claim exists under the
indenture with respect to any given transaction.
We will not be required pursuant to the indenture to repurchase the notes,
in whole or in part, with the proceeds of any sale, transfer or other
disposition of any shares of capital stock of any Restricted Subsidiary (or of
any Subsidiary having direct or indirect control of any Restricted Subsidiary).
Furthermore, the indenture will not provide for any restrictions on our use of
any such proceeds.
CERTAIN DEFINITIONS
We provide below certain defined terms which are used in the covenants
above and which will be used in the indenture. You should refer to the indenture
for a full disclosure of all of these terms.
"Consolidated Tangible Net Worth" means the total stockholders' equity
appearing on RGA's most recent publicly filed consolidated balance sheet
prepared in accordance with generally accepted accounting principles less
intangible assets such as goodwill, trademarks, tradenames, patents and
unamortized debt discount and expense.
"Restricted Subsidiary" means:
(1) any Significant Subsidiary of RGA existing on the date of the
indenture;
(2) any Subsidiary of RGA, organized or acquired after the date of the
indenture which is a Significant Subsidiary; and
(3) an Unrestricted Subsidiary which is reclassified as a Restricted
Subsidiary by a resolution adopted by the board of directors of RGA.
"Significant Subsidiary" means a Subsidiary, including its direct and
indirect Subsidiaries, which meets any of the following conditions (in each case
determined in accordance with generally accepted accounting principles):
(1) RGA's and its other Subsidiaries' investment in and advances to
the Subsidiary exceed 10% of the total assets of RGA and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year;
S-14
(2) RGA's and its other Subsidiaries' proportionate share of the total
assets, after inter-company eliminations, of the Subsidiary exceeds 10% of
the total assets of RGA and its Subsidiaries consolidated as of the end of
the most recently completed fiscal year; or
(3) RGA's and its other Subsidiaries' equity interest in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceed 10% of such income of RGA and its Subsidiaries consolidated for the
most recently completely fiscal year.
"Subsidiary" means a corporation more than 50% of the outstanding Voting
Stock of which is owned, directly or indirectly, by RGA, one or more
Subsidiaries, or RGA and one or more Subsidiaries.
"Unrestricted Subsidiary" means any Subsidiary which is not a Restricted
Subsidiary.
"Voting Stock" means capital stock, the holders of which have general
voting power under ordinary circumstances to elect at least a majority of the
board of directors of a corporation, provided that, for the purposes of this
definition, capital stock which by a resolution adopted by the board of
directors of RGA carries only the right to vote conditioned on the happening of
an event shall not be considered voting stock whether or not such event shall
have happened.
EVENTS OF DEFAULT
The event of default provisions of the indenture will apply to the notes.
You should refer to the description of the events of defaults and the related
remedies of the holders of notes and the trustee under "Description of Debt
Securities of RGA -- Events of Default" in the attached prospectus.
The notes will also provide that (A) any failure by RGA or any subsidiary
to pay indebtedness in an aggregate principal amount exceeding $25,000,000 at
the later of final maturity or upon expiration of any applicable period of grace
with respect to that principal amount, and the failure to pay shall not have
been cured by RGA within 30 days after such failure, or (B) an acceleration of
the maturity of any indebtedness of RGA or any subsidiary, in excess of
$25,000,000, if such failure to pay is not discharged or such acceleration is
not annulled within 15 days after due notice, will constitute an event of
default with respect to the notes.
DEFEASANCE; SATISFACTION AND DISCHARGE
The defeasance, satisfaction and discharge provisions of the indenture will
apply to the notes. You should refer to the description of these provisions
under "Description of Debt Securities of RGA -- Defeasance; Satisfaction and
Discharge" in the attached prospectus.
DEPOSITARY
The notes initially sold to the underwriters will be represented by one or
more fully registered global notes deposited with, or on behalf of, DTC and
registered in the name of Cede & Co., as nominee of DTC.
DTC has advised us and the underwriters as follows: it is a limited-purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities for its participants and to facilitate the clearance
and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's direct participants include securities brokers and dealers
(including the underwriters), banks, trust companies, clearing corporations, and
certain other organizations, some of whom (and/or their representatives) own
DTC. Access to DTC's book-entry system is also available to other indirect
participants, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a
S-15
participant, either directly or indirectly. We understand that DTC agrees with
and represents to its direct participants that it will administer its book-entry
system in accordance with its rules and by-laws and requirements of law.
Principal and interest payments on notes registered in the name of or held
by DTC or its nominee will be made by the trustee to DTC or its nominee, as the
case may be, as the registered holder of the global note representing the notes.
Under the terms of the indenture, we and the trustee will treat the persons in
whose names the notes are registered as the owners thereof for the purpose of
receiving payments and for all other purposes whatsoever. Therefore, neither we
nor the trustee have any direct responsibility or liability for the payment of
these amounts to beneficial owners of notes. DTC has advised us and the trustee
that its current practice is to credit the accounts of participants with such
payments in amounts proportionate to their interests in such amounts as shown in
the records of DTC, unless DTC has reason to believe that it will not receive
payment on such date. Payments by direct and indirect participants to beneficial
owners of a global note will be governed by standing instructions and customary
practices and will be the responsibility of the direct and indirect
participants.
We and the underwriters understand that DTC will take any action permitted
to be taken by an owner or holder of notes only at the direction of one or more
participants to whose account with DTC those holders' notes are credited.
Additionally, we and the underwriters understand that DTC will take such actions
with respect to any percentage of the beneficial interest of holders who hold
notes through participants only at the direction of and on behalf of
participants whose account holders include undivided interests that satisfy any
such percentage and that DTC may take conflicting actions with respect to other
undivided interests to the extent that such actions are taken on behalf of
participants whose account holders include such undivided interests.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable.
REPORTS
We must file with the trustee copies of our annual reports and the
information and other documents which we may be required to file with the SEC
under Section 13 or Section 15(d) of the Securities Exchange Act of 1934. These
documents must be filed with the trustee within 15 days after they are required
to be filed with the SEC. We must also file with the trustee and the SEC, in
accordance with rules and regulations prescribed from time to time by the SEC,
additional information, documents and reports with respect to compliance by RGA
with the conditions and covenants of the indenture, as may be required from time
to time by such rules and regulations.
RIGHTS AND DUTIES OF THE TRUSTEE
The holders of a majority in principal amount of outstanding notes may
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or other power conferred on the
trustee. The trustee may decline to follow that direction if it would involve
the trustee in personal liability or would be illegal. During a default, the
trustee is required to exercise the standard of care and skill that a prudent
man would exercise under the circumstances in the conduct of his own affairs.
The trustee is entitled, in the absence of bad faith on its part, to rely
on an officer's certificate before taking action under the indenture.
S-16
UNDERWRITING
Banc of America Securities LLC, Lehman Brothers Inc. and the other
underwriters listed below have agreed severally, subject to the terms and
conditions of the underwriting agreement, to purchase from us, and we have
agreed to sell to the underwriters, the principal amount of the notes set forth
opposite their names below:
<Table>
<Caption>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
- ----------- ----------------
Banc of America Securities LLC.............................. $ 50,000,000
Lehman Brothers Inc. ....................................... 50,000,000
BNY Capital Markets, Inc.................................... 33,334,000
Fleet Securities, Inc. ..................................... 33,333,000
A.G. Edwards & Sons, Inc.................................... 33,333,000
------------
$200,000,000
============
</Table>
The underwriting agreement provides that the underwriters' obligations to
purchase the notes depends on the satisfaction of the conditions contained in
the underwriting agreement, including:
- the underwriters must purchase all of the notes if they purchases any of
them, other than those covered by the over-allotment option described
below;
- the representations and warranties made by us to the underwriters are
true;
- there is no material change in the financial markets; and
- we deliver customary closing documents to the underwriter.
The underwriters propose to offer the notes directly to the public at the
public offering price on the cover of this prospectus supplement and to selected
dealers at such offering price less a selling concession not in excess of 0.40%
of the principal amount of the notes. The underwriters may allow, and the
selected dealers may re-allow, a discount from the concession not in excess of
0.20% of the principal amount of the notes to other dealers. After the initial
offering of the notes, the underwriters may change the public offering price,
the concession to selected dealers and the reallowance to other dealers.
The following table summarizes the underwriting discounts and commissions
we will pay to the underwriters. The underwriting fee is the difference between
the initial price to the public and the amount the underwriters pay us for the
notes.
<Table>
Per note.................................................... $6.50
Total....................................................... $1,300,000
</Table>
The expenses of this offering, excluding underwriting discounts and cash
summarized in the table above, that are payable by us are estimated to be
approximately $0.2 million.
The notes are new securities for which there is currently no market. The
underwriters have advised RGA that they presently intend to make a market in the
notes as permitted by applicable laws and regulations. The underwriters are not
obligated to make a market in the notes, however, and they may discontinue this
market making at any time in its sole discretion. Accordingly, RGA cannot assure
investors that there will be adequate liquidity or adequate trading markets for
the notes.
A prospectus supplement and attached prospectus in electronic format may be
made available on the Internet sites or through other online services maintained
by one or more of the underwriters or by their affiliates. In those cases,
prospective investors may view offering terms online and, depending upon the
particular underwriter, prospective investors may be allowed to place orders
online. The underwriters may agree with us to allocate a specific number of
notes for sale to online brokerage account holders. Any such allocation for
online distributions will be made by the underwriters on the same basis as other
allocations.
S-17
Other than the prospectus supplement and attached prospectus in electronic
format, the information on any underwriter's web site and any information
contained in any other web site maintained by an underwriter is not part of the
prospectus supplement, attached prospectus or the registration statement of
which the prospectus supplement and attached prospectus form a part, has not
been approved and/or endorsed by us or any underwriter in its capacity as
underwriter and should not be relied upon by investors.
This prospectus supplement and the attached prospectus are not, and under
no circumstances are to be construed as, an advertisement or a public offering
of notes in Canada or any province or territory thereof. Any offer or sale of
notes in Canada will be made only under an exemption from the requirements to
file a prospectus supplement or prospectus and an exemption from the dealer
registration requirement in the relevant province or territory of Canada in
which such offer or sale is made.
Each of the underwriters has represented and agreed that:
- other than in connection with the offering, it has not offered or sold
and, during the period ending six months after the closing date, it will
not offer or sell any notes to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their business, or otherwise, in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995 (as amended);
- it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 (the "Act") (and, after they come into force,
all applicable provisions of the Financial Services and Markets Act 2000,
the "FSMA") with respect to anything done by it in relation to the notes
in, from or otherwise involving the United Kingdom; and
- it has only issued or passed on and will only issue or pass on in the
United Kingdom before the repeal of Section 57 of the Act, any document
received by it in connection with the issue, offer, and sale of the notes
to a person who is of a kind described in Article 11(3) of the Act
(Investment Advertisements) (Exemptions) Order 1996 (as amended) or is a
person to whom such document may otherwise lawfully be issued or passed
on. After the repeal of Section 57 of the Act it will only communicate or
cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the FSMA) in
connection with the issue or sale of such notes in circumstances in which
Section 21(1) of the FSMA does not apply to RGA.
RGA has agreed to indemnify the underwriters against liabilities relating
to the offering, including liabilities under the Securities Act of 1933, and to
contribute to payments that the underwriters may be required to make for these
liabilities.
Immediately prior to the completion of this offering, we are planning to
sell $225.0 million of our Trust PIERS units. The underwriters have an
over-allotment option to purchase up to an additional $33.75 million of Trust
PIERS units. This offering is conditioned on the Trust PIERS units offering,
which means that we may not complete this offering without first completing the
Trust PIERS units offering.
The underwriters and their affiliates have, provided, from time to time,
and may continue to provide, investment banking, financial and other services to
us and our majority shareholder, MetLife, for which we have paid, and intend to
pay, them customary fees. In particular, affiliates of Banc of America
Securities LLC, BNY Capital Markets, Inc. and Fleet Securities, Inc., which are
acting as underwriters in this offering, are lenders under our $140 million
credit agreement and will receive a portion of the net proceeds of this offering
which we intend to use to repay our borrowings under that credit agreement. This
offering is being conducted pursuant to NASD Conduct Rule 2710(c)(8). In
addition, Lehman Brothers Inc. and Banc of America Securities LLC are acting as
underwriters for the Trust PIERS units offering.
S-18
It is expected that delivery of the notes will be made on or about December
19, 2001, which will be the fifth business day in the United States following
the date of this prospectus supplement ("T+5"). Under Rule 15c6-1 under the
Exchange Act, trades in the secondary market generally are required to settle in
three business days, unless the parties to the trade expressly agree otherwise.
Accordingly, purchasers who wish to trade notes prior to December 14, 2001 will
be required, by virtue of the fact that the notes initially will settle in T+5,
to specify an alternate settlement cycle at the time of any trade to prevent a
failed settlement.
LEGAL MATTERS
The validity of the notes will be passed upon for RGA by James E. Sherman,
Esq., General Counsel and Secretary of RGA, and Bryan Cave LLP, St. Louis,
Missouri. Simpson Thacher & Bartlett, New York, New York, will pass upon the
validity of the notes for the underwriters. Simpson Thacher & Bartlett will rely
upon the opinion of Mr. Sherman and Bryan Cave LLP as to certain matters of
Missouri law. Mr. Sherman is paid a salary by RGA, is a participant in various
employee benefit plans offered by RGA to employees of RGA generally and owns and
has options to purchase shares of RGA common stock. John C. Danforth, a partner
of Bryan Cave LLP, is on the board of directors of MetLife and two of its
subsidiaries, General American Life Insurance Company and GenAmerica Financial
Corporation, which are, collectively, our majority shareholder.
S-19
PROSPECTUS
$950,000,000
REINSURANCE GROUP OF AMERICA, INCORPORATED
Debt Securities, Preferred Stock, Depositary Shares, Common Stock,
Stock Purchase Contracts, Stock Purchase Units and Warrants
RGA CAPITAL TRUST I
RGA CAPITAL TRUST II
Preferred Securities Fully, Irrevocably and Unconditionally Guaranteed
on a Subordinated Basis as described in this Document by
Reinsurance Group Of America, Incorporated
------------------------
Reinsurance Group of America, Incorporated and RGA Capital Trust I and RGA
Capital Trust II may offer up to $950,000,000 of the securities listed above, or
units consisting of any two or more of such securities, from time to time.
When RGA, RGA Capital Trust I or RGA Capital Trust II decides to sell a
particular series of securities, we will prepare a prospectus supplement
describing those securities. You should read this prospectus and any prospectus
supplement carefully before you invest.
INVESTING IN THESE SECURITIES INVOLVES RISKS. CONSIDER CAREFULLY THE RISK
FACTORS BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
RGA, RGA Capital Trust I or RGA Capital Trust II may offer securities
through underwriting syndicates managed or co-managed by one or more
underwriters, or directly to purchasers. The prospectus supplement for each
offering of securities will describe in detail the plan of distribution for that
offering. For general information about the distribution of securities, please
see "Plan of Distribution" in this prospectus.
RGA's common stock is listed on the New York Stock Exchange under the
symbol "RGA."
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this prospectus is December 3, 2001
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we and RGA Capital
Trust I and RGA Capital Trust II, which we refer to as the "RGA trusts," filed
with the Securities and Exchange Commission, which we refer to as the "SEC,"
utilizing a "shelf" registration process. Under this shelf process, we may, from
time to time, sell any combination of the securities described in this
prospectus in one or more offerings up to a total amount of $950,000,000 or the
equivalent of this amount in foreign currencies or foreign currency units.
You should rely only on the information provided in this prospectus and in
any prospectus supplement, including the information incorporated by reference.
We have not authorized anyone to provide you with different information. You
should not assume that the information in this prospectus, or any supplement to
this prospectus, is accurate at any date other than the date indicated on the
cover page of these documents.
TABLE OF CONTENTS
<Table>
About This Prospectus....................................... 2
Where You Can Find More Information......................... 3
Incorporation of Certain Documents by Reference............. 3
Risk Factors................................................ 5
Cautionary Statement Regarding Forward-Looking Statements... 10
Information About RGA....................................... 11
Information about the RGA Trusts............................ 12
Use of Proceeds............................................. 13
Ratio of Earnings to Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preference Dividends........... 14
Description of Debt Securities of RGA....................... 14
Description of Capital Stock of RGA......................... 28
Description of Depositary Shares of RGA..................... 37
Description of Warrants and Warrant Units of RGA............ 40
Description of Stock Purchase Contracts and Stock Purchase
Units of RGA.............................................. 41
Description of Preferred Securities of the RGA Trusts....... 42
Description of the Preferred Securities Guarantees of RGA... 45
Effect of Obligations Under the Junior Subordinated Debt
Securities and the Preferred Securities Guarantees........ 48
Plan of Distribution........................................ 49
Legal Matters............................................... 51
Experts..................................................... 51
</Table>
2
WHERE YOU CAN FIND MORE INFORMATION
RGA is subject to the informational requirements of the Securities Exchange
Act of 1934. As a result, RGA files annual, quarterly and special reports, proxy
statements and other information with the SEC. Because our common stock trades
on the New York Stock Exchange under the symbol "RGA," those materials can also
be inspected and copied at the offices of that organization. Here are ways you
can review and obtain copies of this information:
<Table>
<Caption>
WHAT IS AVAILABLE WHERE TO GET IT
- ----------------- ---------------
Paper copies of information................... SEC's Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549
The New York Stock Exchange
20 Broad Street
New York, New York 10005
On-line information, free of charge........... SEC's Internet website at http://www.sec.gov
Information about the SEC's Public Reference
Rooms....................................... Call the SEC at 1-800-SEC-0330
</Table>
We and the RGA trusts have filed with the SEC a registration statement
under the Securities Act that registers the distribution of these securities.
The registration statement, including the attached exhibits and schedules,
contains additional relevant information about us and the securities. The rules
and regulations of the SEC allow us to omit certain information included in the
registration statement from this prospectus. You can get a copy of the
registration statement, at prescribed rates, from the sources listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this prospectus, except
for any information that is superseded by other information that is included in
or incorporated by reference into this document.
This prospectus incorporates by reference the documents listed below that
we have previously filed with the SEC (File No. 1-11848). These documents
contain important information about us.
- Our Annual Report on Form 10-K and Amendment No. 1 on Form 10-K/A for the
year ended December 31, 2000.
- Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001,
June 30, 2001 and September 30, 2001.
- Our Current Report on Form 8-K, filed September 24, 2001.
- The description of our common stock contained in our Registration
Statement on Form 8-A dated April 6, 1993, as amended by Amendment No. 1
on Form 8-A/A dated April 27, 1993, including any amendments or reports
filed for the purpose of updating such description.
- The description of our preferred stock purchase rights contained in our
Registration Statement on Form 8-A dated April 6, 1993, as amended by
Amendment No. 1 to Form 8-A/A dated April 27, 1993, and as further
supplemented on Form 8-A dated May 4, 1998, including amendments or
reports filed for the purpose of updating such description.
We incorporate by reference any additional documents that we may file with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 (other than those made
3
pursuant to Item 9 of Form 8-K) between November 28, 2001, the date we first
filed the registration statement to which this prospectus relates, and the
termination of the offering of the securities. These documents may include
periodic reports, like Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K, as well as Proxy Statements. Any material
that we subsequently file with the SEC will automatically update and replace the
information previously filed with the SEC.
You can obtain any of the documents incorporated by reference in this
prospectus from the SEC on its web site (http://www.sec.gov). You can also
obtain these documents from us, without charge (other than exhibits, unless the
exhibits are specifically incorporated by reference), by requesting them in
writing or by telephone at the following address:
Reinsurance Group of America, Incorporated
1370 Timberlake Manor Parkway
Chesterfield, Missouri 63017-6039
Attention: Jack B. Lay
Executive Vice President and Chief Financial Officer
(636) 736-7000
4
RISK FACTORS
Investing in securities offered by this prospectus involves certain risks.
Any of the following risks could materially adversely affect our business,
results of operations, or financial condition and could result in a loss of your
investment.
WE ARE CONTROLLED BY METLIFE, AND THE INTERESTS OF METLIFE MAY DIFFER FROM THE
INTERESTS OF RGA AND ITS SECURITYHOLDERS.
Metropolitan Life Insurance Company, which we refer to as "MetLife,"
beneficially owned approximately 58.4% of our outstanding common stock, as of
September 30, 2001, and several individuals employed by or associated with
MetLife hold seats on our board of directors. MetLife has the power, because of
the voting power of the shares of common stock beneficially held by it, to elect
our board of directors, and to substantially influence business combination
transactions. For financial reporting purposes, MetLife will include its share
of our net income or loss in its consolidated financial statements. Our board of
directors, including members who are also affiliated with MetLife, may consider
not only the short-term and long-term impact of operating decisions on us, but
also the impact of such decisions on MetLife and its affiliates.
OUR ABILITY TO PAY PRINCIPAL, INTEREST AND/OR DIVIDENDS ON OFFERED SECURITIES IS
LIMITED.
We are a holding company, with our principal assets consisting of the stock
of our insurance company subsidiaries. Our ability to pay principal and interest
on any debt securities or dividends on any preferred or common stock depends
significantly on the ability of our insurance company subsidiaries, our
principal sources of cash flow, to declare and distribute dividends. Regulatory
restrictions may limit these payments. Our insurance company subsidiaries are
subject to various state statutory and regulatory restrictions, applicable to
insurance companies generally, that limit the amount of cash dividends, loans
and advances that those subsidiaries may pay to us. We indirectly own our
principal operating subsidiary, RGA Reinsurance Company, which we refer to as
"RGA Reinsurance," through Reinsurance Company of Missouri, Incorporated, which
we refer to as "RCM." Both RCM and RGA Reinsurance are organized under Missouri
insurance law, which permits the payment of dividends or distributions which,
together with dividends or distributions paid during the preceding twelve
months, do not exceed the greater of:
- 10% of statutory capital and surplus as of the preceding December 31; or
- statutory net gain from operations for the preceding calendar year.
Any proposed dividend in excess of this amount is considered an
"extraordinary dividend" and may not be paid until it has been approved, or a
30-day waiting period has passed during which it has not been disapproved, by
the Missouri Director of Insurance. RCM's allowable dividend without prior
approval for 2001 is approximately $49.3 million pursuant to this calculation.
RGA Reinsurance's allowable dividend without prior approval for 2001 is
approximately $80.6 million pursuant to this calculation. Dividends may be paid
only to the extent the insurer has unassigned surplus, as opposed to contributed
surplus. As of December 31, 2000, which is the current determinative date for
regulatory purposes, RCM and RGA Reinsurance had unassigned surplus of
approximately $38.9 million and $67.1 million, respectively. RGA is unable to
predict the unassigned surplus amounts for RGA Reinsurance and RCM as of
December 31, 2001, which will be the date for determining the allowable dividend
in 2002 without prior approval. For example, any significant reinsurance
transactions that occur in the fourth quarter of 2001 could have an impact on
the unassigned surplus of RGA Reinsurance and RCM. Because RCM is our direct
subsidiary and RGA Reinsurance is a subsidiary of RCM, any dividends paid by RGA
Reinsurance would be paid to RCM. Our ability to make payments on debt
securities or to pay dividends on capital stock will depend on the ability of
RCM to pay dividends to us. As a result, without prior approval of the Missouri
Director of Insurance, we may only receive the allowable dividend for RCM, even
though the allowable dividend which could be paid to RCM by RGA Reinsurance is
currently a higher amount.
5
In contrast to Missouri law, the Model Insurance Holding Company Act of the
National Association of Insurance Commissioners defines an "extraordinary
dividend" as a dividend which exceeds the lesser of the two amounts described
above. We are unable to predict when or in what form Missouri will enact a new
measure for extraordinary dividends, and we cannot assure you that more
stringent restrictions will not be adopted from time to time in other
jurisdictions in which our insurance subsidiaries are domiciled, which could,
under certain circumstances, significantly reduce dividends or other amounts
payable to us by our subsidiaries unless they obtain approval from insurance
regulatory authorities.
RGA Life Reinsurance Company of Canada, which we refer to as "RGA Canada"
and which is our second largest operating subsidiary, is limited in its ability
to pay dividends by the Canadian Minimum Continuing Capital and Surplus
Requirements. As of June 30, 2001, the maximum amount available for dividends
from RGA Canada was $31.3 million.
In the event of the insolvency, liquidation, reorganization, dissolution or
other winding-up of one of our insurance subsidiaries, all creditors of that
subsidiary, including holders of life and health insurance policies, would be
entitled to payment in full out of the assets of such subsidiary before we, as
shareholder, would be entitled to any payment. Our subsidiaries would have to
pay their direct creditors in full before our creditors, including holders of
any offered securities, could receive any payment from the assets of such
subsidiaries.
A DOWNGRADE IN THE RATINGS OF OUR INSURANCE SUBSIDIARIES OR METLIFE OR ITS
AFFILIATES COULD ADVERSELY AFFECT OUR ABILITY TO COMPETE.
Ratings are an important factor in our competitive position. Rating
organizations periodically review the financial performance and condition of
insurers, including our insurance subsidiaries. Rating organizations assign
ratings based upon several factors. While most of the factors considered relate
to the rated company, some of the factors relate to general economic conditions
and circumstances outside the rated company's control. RGA Reinsurance and RGA
Canada are rated "A+" by A.M. Best. Additionally, RGA Reinsurance maintains
ratings from Standard & Poor's and Moody's Investor Services. Standard & Poor's
has assigned RGA Reinsurance a financial strength rating of "AA" and Moody's has
assigned RGA Reinsurance a rating of "A1". Our ratings were downgraded in August
1999 due to downgrades in the ratings of our parent, General American Life
Insurance Company. MetLife completed its acquisition of General American in
January 2000, at which time our ratings were upgraded. We do not have any
subsidiaries that are rated by A.M. Best as less than "very good" or its
equivalent by other leading rating organizations. A downgrade in the ratings of
our insurance subsidiaries could adversely affect their ability to sell
products, retain existing business, and compete for attractive acquisition
opportunities. These ratings are based on an insurance company's ability to pay
policyholder obligations and are not directed toward the protection of
investors.
In addition, we believe that the ratings agencies strongly consider the
ratings of a parent company when assigning a rating to a subsidiary of that
company. Accordingly, we believe a ratings downgrade of MetLife or its
affiliates could have a negative impact on our ratings and our ability to
conduct business.
WE COULD BE FORCED TO SELL INVESTMENTS AT A LOSS TO COVER POLICYHOLDER
WITHDRAWALS OR RECAPTURES OF REINSURANCE TREATIES.
Some of the products offered by our insurance company customers allow
policyholders and contractholders to withdraw their funds under defined
circumstances. Our insurance subsidiaries manage their liabilities and configure
their investment portfolios so as to provide and maintain sufficient liquidity
to support anticipated withdrawal demands and contract benefits and maturities
under reinsurance treaties with these customers. While our insurance
subsidiaries own a significant amount of liquid assets, a portion of their
assets are relatively illiquid. Unanticipated withdrawal or surrender activity
could, under some circumstances, require our insurance subsidiaries to dispose
of assets on unfavorable terms, which could have an adverse effect on us.
Reinsurance agreements may provide for recapture rights on the part of our
insurance company customers. Recapture rights permit these customers to reassume
all or a portion of the
6
risk formerly ceded to us after an agreed upon time, usually 10 years, subject
to various conditions. Recapture of business previously ceded does not affect
premiums ceded prior to the recapture, but may result in immediate payments to
our insurance company customers and a charge for unrecoverable deferred
acquisition costs. Under some circumstances, payments to our insurance company
customers could require our insurance subsidiaries to dispose of assets on
unfavorable terms.
OUR INSURANCE SUBSIDIARIES ARE HIGHLY REGULATED, AND CHANGES IN THESE
REGULATIONS COULD NEGATIVELY AFFECT OUR BUSINESS.
Our insurance subsidiaries are subject to government regulation in each of
the jurisdictions in which they are licensed or authorized to do business.
Governmental agencies have broad administrative power to regulate many aspects
of the insurance business, which may include premium rates, marketing practices,
advertising, policy forms, and capital adequacy. These agencies are concerned
primarily with the protection of policyholders rather than shareholders or
holders of debt securities. Moreover, insurance laws and regulations, among
other things, establish minimum capital requirements and limit the amount of
dividends, tax distributions, and other payments our insurance subsidiaries can
make without prior regulatory approval, and impose restrictions on the amount
and type of investments we may hold. The State of Missouri also regulates RGA as
an insurance holding company.
Recently, insurance regulators have increased their scrutiny of the
insurance regulatory framework in the United States and some state legislatures
have considered or enacted laws that alter, and in many cases increase, state
authority to regulate insurance holding companies. In light of recent
legislative developments, the National Association of Insurance Commissioners,
which we refer to as the "NAIC," and state insurance regulators have begun
re-examining existing laws and regulations, specifically focusing on insurance
company investments and solvency issues, guidelines imposing minimum capital
requirements based on business levels and asset mix, interpretations of existing
laws, the development of new laws, the implementation of nonstatutory
guidelines, and the definition of extraordinary dividends. We cannot predict the
effect that any NAIC recommendations or proposed or future legislation or rule
making in the United States or elsewhere may have on our financial condition or
operations.
IF OUR RISK MANAGEMENT OR INVESTMENT STRATEGY IS NOT SUCCESSFUL, WE COULD SUFFER
UNEXPECTED LOSSES.
Risk management and the success of our investment strategy are crucial to
the success of our business. In particular, we structure our investments to
match our anticipated liabilities under reinsurance treaties. If our
calculations with respect to these reinsurance liabilities are incorrect, or if
we improperly structure our investments to match such liabilities, we could be
forced to liquidate investments prior to maturity at a significant loss.
Our investment guidelines also permit us to invest up to 5% of our
investment portfolio in below-investment grade fixed income securities. While
any investment carries some risk, the risks associated with lower-rated
securities are greater than the risks associated with investment grade
securities. The risk of loss of principal or interest through default is greater
because lower-rated securities are usually unsecured and are often subordinated
to an issuer's other obligations. Additionally, the issuers of these securities
frequently have high debt levels and are thus more sensitive to difficult
economic conditions, individual corporate developments and rising interest rates
which could impair an issuer's capacity or willingness to meet its financial
commitment on such lower-rated securities. As a result, the market price of
these securities may be quite volatile, and the risk of loss is greater.
The success of any investment activity is affected by general economic
conditions, which may adversely affect the markets for interest-rate-sensitive
securities and equity securities, including the level and volatility of interest
rates and the extent and timing of investor participation in such markets.
Unexpected volatility or illiquidity in the markets in which we directly or
indirectly hold positions could adversely affect us.
7
RECENT AND PROPOSED TAX LAW CHANGES OR A PROLONGED ECONOMIC DOWNTURN COULD
REDUCE THE DEMAND FOR SOME INSURANCE PRODUCTS, WHICH COULD ADVERSELY AFFECT OUR
BUSINESS.
Under the Internal Revenue Code of 1986, income tax payable by
policyholders on investment earnings is deferred during the accumulation period
of some life insurance and annuity products. To the extent that the Internal
Revenue Code is revised to reduce the tax-deferred status of life insurance and
annuity products, or to increase the tax-deferred status of competing products,
all life insurance companies would be adversely affected with respect to their
ability to sell such products, and, depending on grandfathering provisions, the
surrenders of existing annuity contracts and life insurance policies. In
addition, life insurance products are often used to fund estate tax obligations.
Congress has adopted legislation to reduce, and ultimately eliminate, the estate
tax. Under this legislation, our life insurance company customers will face
reduced demand for some of their life insurance products, which in turn could
negatively affect our reinsurance business. We cannot predict what future tax
initiatives may be proposed and enacted which could affect us.
In addition, a general economic downturn or a downturn in the equity and
other capital markets could adversely affect the market for many annuity and
life insurance products. Because we obtain substantially all of our revenues
through reinsurance arrangements that cover a portfolio of life insurance
products, as well as annuities, our business would be harmed if the market for
annuities or life insurance were adversely affected. In addition, the market for
annuity reinsurance products is currently not well developed, and we cannot
assure you that such market will develop in the future.
WE ARE EXPOSED TO FOREIGN CURRENCY RISK.
We have foreign currency risk on business conducted and investments in
foreign currencies to the extent that the exchange rates of the foreign
currencies are subject to adverse change over time. Approximately 25% of our
premiums, 25% of our pre-tax earnings from operations, and 27% of our fixed
maturity investments were denominated in currencies other than the U.S. dollar
as of September 30, 2001. Fluctuations in exchange rates can negatively or
positively impact premiums and earnings. We hold fixed-maturity investments
denominated in foreign currencies as a natural hedge against liabilities based
in those currencies. We generally do not hedge the foreign currency exposure
associated with our net investments in foreign subsidiaries due to the long-term
nature of these investments. During 2000, we incurred a foreign currency loss of
$4.7 million associated with the sale of our Chilean operations. We cannot
predict whether exchange rate fluctuations will significantly harm our
operations or financial results in the future.
INTEREST-RATE FLUCTUATIONS COULD NEGATIVELY AFFECT THE INCOME WE DERIVE FROM THE
DIFFERENCE BETWEEN THE INTEREST RATES WE EARN ON OUR INVESTMENTS AND INTEREST WE
PAY UNDER OUR REINSURANCE CONTRACTS.
Significant changes in interest rates expose reinsurance companies to the
risk of not earning income or experiencing losses based on the difference
between the interest rates earned on investments and the credited interest rates
paid on outstanding reinsurance contracts.
Both rising and declining interest rates can negatively affect the income
we derive from these interest rate spreads. During periods of falling interest
rates, our investment earnings will be lower because interest earnings on some
of our fixed maturity securities will likely have declined in parallel with
market interest rates. Additionally, new investments in fixed maturity
securities will likely bear lower interest rates. We may not be able to fully
offset the decline in investment earnings with lower crediting rates on our
reinsurance contracts that have cash values. During periods of rising interest
rates, we may be contractually obligated to increase the crediting rates on our
reinsurance contracts that have cash values. However, we may not have the
ability to immediately acquire investments with interest rates sufficient to
offset the increased crediting rates on our reinsurance contracts. While we
develop and maintain asset/ liability management programs and procedures
designed to reduce the volatility of our income when interest rates are rising
or falling, we cannot assure you that changes in interest rates will not affect
our interest rate spreads.
8
Changes in interest rates may also affect our business in other ways. Lower
interest rates may result in lower sales of certain insurance and investment
products of our customers, which would reduce the demand for our reinsurance of
these products.
WE OPERATE IN A HIGHLY COMPETITIVE INDUSTRY, WHICH COULD LIMIT OUR ABILITY TO
GAIN OR MAINTAIN OUR POSITION IN THE INDUSTRY.
The reinsurance industry is highly competitive, and we encounter
significant competition in all lines of business from other reinsurance
companies, as well as competition from other providers of financial services.
Our competitors vary by geographic market. We believe our primary competitors
are Transamerica Occidental Life Insurance Company, Swiss Re, ING Re, Lincoln
National Corporation and Munich Reinsurance Company. Swiss Re recently acquired
the reinsurance operations of Lincoln National. Many of our competitors have
greater financial resources than we do. Our ability to compete depends on, among
other things, our ability to maintain strong financial strength ratings from
rating agencies, pricing and other terms and conditions of reinsurance
agreements, and our reputation, service, and experience in the types of business
that we underwrite. However, competition from other insurers could adversely
affect our competitive position.
Our target market is large life insurers. We compete based on the strength
of our underwriting operations, insights on mortality trends based on our large
book of business, and responsive service. We believe our quick response time to
client requests for individual underwriting quotes and our underwriting
expertise are important elements to our strategy and lead to other business
opportunities with our clients. We are currently transplanting our strategy in
North America to other international locations and expect to support our North
American clients as they expand internationally. Our business will be adversely
affected if we are unable to maintain these competitive advantages or if our
international strategy is not successful.
WE DEPEND ON THE PERFORMANCE OF OTHERS, AND THEIR FAILURE TO PERFORM IN A
SATISFACTORY MANNER WOULD NEGATIVELY AFFECT US.
In the normal course of business, we seek to limit our exposure to losses
from our reinsurance contracts by ceding a portion of the reinsurance to other
insurance enterprises or reinsurers. We cannot assure you that these insurance
enterprises, or reinsurers, will be able to fulfill their obligations to us. We
are also subject to the risk that our clients will be unable to fulfill their
obligations to us under our reinsurance agreements with them.
We use the services of third-party investment managers to manage a majority
of our investment portfolio. We rely on these investment managers to provide
investment advice and execute investment transactions that are within our
investment policy guidelines. Poor performance on the part of our outside
investment managers could have an adverse effect on our financial performance.
As with all financial services companies, our ability to conduct business
depends on consumer confidence in the industry and our financial strength.
Actions of competitors, and financial difficulties of other companies in the
industry, could undermine consumer confidence and harm our reputation.
INADEQUATE RISK ANALYSIS AND UNDERWRITING MAY HAVE AN ADVERSE EFFECT ON OUR
FINANCIAL RESULTS.
We have developed risk analysis and underwriting guidelines, policies, and
procedures with the objective of controlling the quality of the business as well
as the pricing of the risk we are assuming. Among other things, these processes
rely heavily on our own underwriting and information provided to us from, and
underwriting by, our insurance company customers, our analysis of mortality
trends and the rate at which policies for which we are at risk lapse, and our
understanding of medical impairments and their impact on mortality. To the
extent these processes are inadequate or are based on inadequate information,
the premiums we receive for the risks we assume may not be sufficient to cover
our claims.
9
RECENT TERRORIST ATTACKS AND RELATED EVENTS MAY ADVERSELY AFFECT OUR BUSINESS
AND RESULTS OF OPERATIONS.
The terrorist attacks on the United States and ensuing events may have a
continuing negative impact on our business. The Company believes its reinsurance
programs, including its catastrophe coverage, which is with two carriers, will
limit its net losses in individual life claims relating to the September 11,
2001 terrorist attacks to the amount reflected as of September 30, 2001.
However, no assurance can be given as to the extent of claims development or
recoverability of any such claims, particularly in light of the magnitude and
unprecedented nature of the terrorist attacks of September 11, 2001.
OUR OBLIGATIONS TO PAY CLAIMS, INCLUDING SETTLEMENTS OR AWARDS, ON CLOSED OR
DISCONTINUED LINES OF BUSINESS MAY EXCEED THE RESERVES WE HAVE ESTABLISHED TO
COVER SUCH CLAIMS AND MAY REQUIRE US TO ESTABLISH ADDITIONAL RESERVES, WHICH
WOULD REDUCE OUR NET INCOME.
In 1994, we entered the reinsurance market for the privatized pension
program in Argentina, which we refer to as the "AFJP business." Although we
ceased renewal of AFJP business treaties and no longer write AFJP business, we
must continue to pay claims that develop during the run-off of the remaining
treaties. Benefits paid to claimants under the AFJP business are indexed to the
returns of the underlying pension funds. Because of higher than expected claims
levels, on October 25, 2001 we announced that we expect to establish additional
reserves for the AFJP business in the range of $25 to $35 million in the fourth
quarter of 2001. If the amount of claims resulting from this closed line of
business exceeds our current estimates, we may establish additional reserves.
As of December 31, 1998, we formally reported our accident and health
division as a discontinued operation. The accident and health operation was
placed into run-off, and all treaties were terminated at the earliest possible
date. The nature of the underlying risks is such that the claims may take years
to reach the reinsurers involved. Accordingly, we expect to pay claims out of
existing reserves over a number of years as the level of business diminishes. We
are a party to several disputes relating to the accident and health operation,
some of which are currently in arbitration or may be subject to arbitration in
the future. We have established reserves for these treaties based upon our
estimates of the expected claims, including settlement or arbitration outcomes.
In a few cases, however, we are unable to determine our potential liability, if
any, because of insufficient claims information. If the amount of claims,
including awards or settlements, resulting from this discontinued line of
business exceeds our current reserves, we may establish additional reserves.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document contains or incorporates by reference a number of
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 relating to, among others:
- projections of our earnings, revenues, income or loss, or capital
expenditures;
- our plans for future operations and financing needs or plans; and
- assumptions relating to the foregoing.
The words "intend," "expect," "project," "estimate," "predict,"
"anticipate," "should," "believe" and other similar expressions also are
intended to identify forward-looking statements.
These forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Future events
and actual results, performance and achievements could differ materially from
those set forth in, contemplated by or underlying the forward-looking
statements.
10
Important factors that could cause actual results to differ materially from
estimates or forecasts contained in the forward-looking statements include,
among others:
- market conditions and the timing of sales of investment securities;
- regulatory action taken by the New York or Missouri Departments of
Insurance with respect to MetLife or GenAmerica or us and our
subsidiaries;
- changes in the financial strength and credit ratings of RGA and our
subsidiaries and of MetLife and its affiliates and the effect of such
changes on our future results of operations and financial condition;
- material changes in mortality and claims experience;
- competitive factors and competitors' responses to our initiatives;
- general economic conditions affecting the demand for insurance and
reinsurance in our current and planned markets;
- successful execution of our entry into new markets;
- successful development and introduction of new products;
- the stability of governments and economies in the markets in which we
operate;
- fluctuations in U.S. and foreign interest rates and securities and real
estate markets;
- the success of our clients;
- changes in laws, regulations and accounting standards applicable to us
and our subsidiaries; and
- other risks and uncertainties described in this document and in our
other filings with the SEC.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual outcomes may vary materially from
those indicated.
You should not place undue reliance on those statements, which speak only
as of the date on which they are made. We may not update these forward-looking
statements, even though our situation may change in the future, unless we are
obligated under the federal securities laws to update and disclose material
developments related to previously disclosed information. We qualify all of our
forward-looking statements by these cautionary statements.
INFORMATION ABOUT RGA
We are an insurance holding company that was formed on December 31, 1992.
Through our operating subsidiaries, we are primarily engaged in life reinsurance
in North America and select international locations. In addition, we provide
reinsurance of non-traditional business including asset-intensive products and
financial reinsurance. Through a predecessor, we have been engaged in the
business of life reinsurance since 1973. As of September 30, 2001, we had
approximately $6.5 billion in consolidated assets.
Reinsurance is an arrangement under which an insurance company, the
"reinsurer," agrees to indemnify another insurance company, the "ceding
company," for all or a portion of the insurance risks underwritten by the ceding
company. Reinsurance is designed to:
- reduce the net liability on individual risks, thereby enabling the
ceding company to increase the volume of business it can underwrite, as
well as increase the maximum risk it can underwrite on a single life or
risk;
- stabilize operating result by leveling fluctuations in the ceding
company's loss experience;
- assist the ceding company to meet applicable regulatory requirements;
and
- enhance the ceding company's financial strength and surplus position.
11
We are a holding company, the principal assets of which consist of the
common stock of our principal operating subsidiaries, RGA Reinsurance and RGA
Canada, as well as investments in several other subsidiaries.
We have five main operational segments segregated primarily by geographic
region: U.S., Canada, Latin America, Asia Pacific, and other international
operations. The U.S. operations provide traditional life reinsurance and
non-traditional reinsurance to domestic clients. Non-traditional business
includes asset-intensive and financial reinsurance. Asset-intensive products
include reinsurance of bank-owned life insurance and reinsurance of annuities.
The Canada operations provide insurers with traditional reinsurance as well as
assistance with capital management activity. The Latin America operations
include direct life insurance through a subsidiary in Argentina and traditional
reinsurance and reinsurance of privatized pension products in Argentina. The
Asia Pacific operations provide primarily traditional life reinsurance. Other
international operations include traditional life reinsurance from Western
Europe and South Africa.
On January 6, 2000, Metropolitan Life Insurance Company acquired 100% of
GenAmerica Corporation, including its beneficial ownership of RGA shares (which
was approximately 48% at December 31, 1999). This acquisition, together with a
private placement of approximately 4.8 million shares of our common stock
completed in November 1999, made MetLife our majority shareholder, with
beneficial ownership of approximately 58.4% of all outstanding shares as of
September 30, 2001.
Our executive office is located at 1370 Timberlake Manor Parkway,
Chesterfield, Missouri 63017-6039, and its telephone number is (636) 736-7000.
In this prospectus, "we," "us," "our," the "Company" and "RGA" refer to
Reinsurance Group of America, Incorporated.
This prospectus provides you with a general description of the securities
we and the RGA trusts may offer. Each time we or either of the RGA trusts sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. We will file each prospectus
supplement with the SEC. The prospectus supplement may also add, update or
supplement information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information" on page 3.
INFORMATION ABOUT THE RGA TRUSTS
Each of the RGA trusts is a statutory business trust formed under Delaware
law. Each RGA trust exists for the exclusive purposes of:
- issuing and selling its preferred securities and common securities;
- using the proceeds from the sale of its preferred securities and common
securities to acquire RGA's junior subordinated debt securities; and
- engaging in only those other activities that are related to those
purposes.
All of the common securities of each trust will be directly or indirectly
owned by RGA. The common securities will rank equally, and payments will be made
proportionally, with the preferred securities. However, if an event of default
under the amended and restated trust agreement of the respective RGA trust has
occurred and is continuing, the cash distributions and liquidation, redemption
and other amounts payable on the common securities will be subordinated to the
preferred securities in right of payment. We will directly or indirectly acquire
common securities in an amount equal to at least 3% of the total capital of each
RGA trust. The preferred securities will represent the remaining 97% of such
trusts' capital.
RGA will guarantee the preferred securities of each RGA trust as described
later in this prospectus.
Unless otherwise specified in the applicable prospectus supplement, each
RGA trust has a term of up to 55 years but may terminate earlier, as provided in
its amended and restated trust agreement. Each
12
RGA trust's business and affairs will be conducted by the trustees appointed by
us. According to the amended and restated trust agreement of each RGA trust, as
the holder of all of the common securities of an RGA trust, we can increase or
decrease the number of trustees of each trust, subject to the requirement under
Delaware law that there be a trustee in the State of Delaware and to the
provisions of the Trust Indenture Act of 1939. The amended and restated trust
agreement will set forth the duties and obligations of the trustees. A majority
of the trustees of each RGA trust will be employees or officers of or persons
who are affiliated with RGA, whom we refer to as "administrative trustees."
One trustee of each RGA trust will be an institution, which we refer to as
the "property trustee," that is not affiliated with RGA and has a minimum amount
of combined capital and surplus of not less than $50,000,000, which will act as
property trustee and as indenture trustee for the purposes of compliance with
the provisions of the Trust Indenture Act of 1939, under the terms of the
applicable prospectus supplement. Unless otherwise indicated in the applicable
prospectus supplement, the property trustee will maintain exclusive control of a
segregated, non-interest bearing "payment account" established with The Bank of
New York to hold all payments made on the junior subordinated debt securities
for the benefit of the holders of the trust securities of each RGA trust. In
addition, unless the property trustee maintains a principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
one trustee of each RGA trust will be an institution having a principal place of
business in, or a natural person resident of, the State of Delaware, which we
refer to as the "Delaware trustee." As the direct or indirect holder of all of
the common securities, RGA will be entitled to appoint, remove or replace any
of, or increase or reduce the number of, the trustees of each RGA trust, except
that if an event of default under the junior subordinated indenture has occurred
and is continuing, only the holders of preferred securities may remove the
Delaware trustee or the property trustee. RGA will pay all fees and expenses
related to the RGA trust and the offering of the preferred securities and the
common securities.
Unless otherwise specified in the applicable prospectus supplement, the
property trustee for each RGA trust will be The Bank of New York. Unless
otherwise specified in the applicable prospectus supplement, the Delaware
trustee for each RGA trust will be The Bank of New York (Delaware), an affiliate
of The Bank of New York, and its address in the state of Delaware is White Clay
Center, Route 273, Newark, Delaware 19771. The principal place of business of
each RGA trust is c/o Reinsurance Group of America, Incorporated, 1370
Timberlake Manor Parkway, Chesterfield, Missouri 63017-6039, telephone (636)
736-7000.
The RGA trusts will not have separate financial statements. The statements
would not be material to holders of the preferred securities because the trusts
will not have any independent operations. Each of the trusts exists solely for
the reasons provided in the amended and restated trust agreement and summarized
above. Unless otherwise provided in the applicable prospectus supplement, RGA
will pay all fees and expenses related to each RGA trust and the offering of its
preferred securities, including the fees and expenses of the trustee.
USE OF PROCEEDS
Except as otherwise described in a prospectus supplement, the proceeds from
the sale by any RGA trust of any preferred securities, together with any capital
contributed in respect of common securities, will be loaned to RGA in exchange
for RGA's junior subordinated debt securities. Unless otherwise stated in the
prospectus supplement, we will use borrowings from the trusts, and the net
proceeds from the sale of any other securities offered by RGA, for general
corporate purposes. Such general corporate purposes may include, but are not
limited to, repayments of our indebtedness or the indebtedness of our
subsidiaries. Pending such use, the proceeds may be invested temporarily in
short-term marketable securities. The prospectus supplement relating to an
offering will contain a more detailed description of the use of proceeds of any
specific offering of securities.
13
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS
The following table sets forth RGA's ratios of earnings to fixed charges
and earnings to fixed charges, including interest credited under reinsurance
contracts, for the periods indicated. For purposes of computing the consolidated
ratio of earnings to fixed charges, earnings consist of net earnings from
continuing operations adjusted for the provision for income taxes, minority
interest and fixed charges. Fixed charges consist of interest and discount on
all indebtedness and one-third of annual rentals, which we believe is a
reasonable approximation of the interest factor of such rentals. We have not
paid a preference security dividend for any of the periods presented, and
accordingly have not separately shown the ratio of earnings to combined fixed
charges and preference dividends for these periods.
<Table>
<Caption>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
---------------------------------- SEPTEMBER 30,
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- -------------
Ratio of earnings to fixed charges.......... 13.8 13.9 15.2 8.5(1) 9.9 7.4
Ratio of earnings to fixed charges including
interest credited under reinsurance
contracts................................. 2.5 2.1 1.8 1.6(1) 2.4 2.0
</Table>
- ---------------
(1) Coverage ratio in 1999 is lower than other annual periods presented due to
the inclusion of $75.3 million of net realized investment losses primarily
associated with the recapture of one block of business by General American
Life Insurance Company.
DESCRIPTION OF DEBT SECURITIES OF RGA
The following description of the terms of the debt securities sets forth
the material terms and provisions of the debt securities to which any prospectus
supplement may relate. The particular terms of the debt securities offered by
any prospectus supplement and the extent, if any, to which such general
provisions may apply to the debt securities so offered will be described in the
prospectus supplement relating to such debt securities. The debt securities will
be either our senior debt securities or subordinated debt securities, or our
junior subordinated debt securities issued in connection with the issuance by an
RGA trust of its trust preferred securities.
THE INDENTURES
The senior debt securities will be issued in one or more series under a
senior indenture, to be entered into by us with a financial institution as
trustee. The subordinated debt securities will be issued in one or more series
under a subordinated indenture, to be entered into by us with a financial
institution as trustee. The junior subordinated debt securities will be issued
in one or more series under a junior subordinated indenture, to be entered into
by us with The Bank of New York, as trustee. The statements herein relating to
the debt securities and the indentures are summaries and are subject to the
detailed provisions of the applicable indenture. Each of the indentures will be
subject to and governed by the Trust Indenture Act of 1939. The description of
the indentures set forth below assumes that we have entered into the indentures.
We will execute the senior indenture or the subordinated indenture, as
applicable, when and if we issue senior or subordinated debt securities. We will
execute the junior subordinated indenture when and if we issue junior
subordinated debt securities in connection with the issuance by an RGA trust of
its preferred securities. See "Description of Preferred Securities of the RGA
Trusts" below. The descriptions below do not restate the indentures and do not
contain all the information you may find useful. We urge you to read the
indentures because they, and not the summaries, define your rights as a holder
of our debt securities. If you would like to read the indentures, they are on
file with the SEC, as described under "Where You Can Find More Information"
beginning on page 3. Whenever we refer to particular sections or defined terms
in an indenture, those sections and definitions are incorporated by reference.
14
GENERAL
The indentures do not limit the aggregate amount of debt securities which
we may issue. We may issue debt securities under the indentures up to the
aggregate principal amount authorized by our board of directors from time to
time. Except as may be described in a prospectus supplement, the indentures will
not limit the amount of other secured or unsecured debt that we may incur or
issue.
The debt securities will be our unsecured general obligations. The senior
debt securities will rank with all our other unsecured and unsubordinated
obligations. Unless otherwise specified in the applicable prospectus supplement,
the subordinated debt securities will be subordinated and junior in right of
payment to the extent and in the manner set forth in the subordinated indenture
to all our present and future senior indebtedness. Unless otherwise specified in
the applicable prospectus supplement, the junior subordinated debt securities
that we may issue to one of the RGA trusts will be subordinated and junior in
right of payment to the extent and in the manner set forth in the junior
subordinated indenture to all our present and future indebtedness, including any
senior and subordinated debt securities issued under the senior or subordinated
indenture. See "-- Subordination under the Subordinated Indenture and the Junior
Subordinated Indenture." The indentures will provide that the debt securities
may be issued from time to time in one or more series. We may authorize the
issuance and provide for the terms of a series of debt securities pursuant to a
supplemental indenture.
We are a holding company. As a result, we rely primarily on dividends or
other payments from our principal operating subsidiaries, RGA Reinsurance and
RGA Canada, to pay principal and interest on our outstanding debt obligations,
and to make dividend distributions on our capital stock. We can also utilize
investment securities maintained in our portfolio for these payments. The
principal source of funds for RGA Reinsurance and RGA Canada comes from current
operations.
Applicable insurance regulatory and other legal restrictions limit the
amount of dividends and other payments our subsidiaries can make to us. Our
subsidiaries have no obligation to guarantee or otherwise pay amounts due under
the debt securities. Therefore, the debt securities will be effectively
subordinated to all indebtedness and other liabilities and commitments of our
subsidiaries, including claims under reinsurance contracts, debt obligations and
other liabilities incurred in the ordinary course of business. As of September
30, 2001, our subsidiaries had approximately $24.1 million of outstanding
long-term debt. We will disclose material changes to this amount in any
prospectus supplement relating to an offering of our debt securities. In the
event of a default on any debt securities, the holders of the debt securities
will have no right to proceed against the assets of any insurance subsidiary. If
the subsidiary were to be liquidated, the liquidation would be conducted under
the laws of the applicable jurisdiction. Our right to receive distributions of
assets in any liquidation of a subsidiary would be subordinated to the claims of
the subsidiary's creditors, except to the extent any claims of ours as a
creditor would be recognized. Any recognized claims of ours would be
subordinated to any prior security interest held by any other creditors of the
subsidiary and obligations of the subsidiary that are senior to those owing to
us.
The applicable prospectus supplement relating to the particular series of
debt securities will describe specific terms of the debt securities offered
thereby, including, where applicable:
(1) the specific designation of such debt securities;
(2) any limit upon the aggregate principal amount of such debt securities;
(3) the date or dates on which the principal of and premium, if any, on
such debt securities will mature or the method of determining such date or
dates;
(4) the rate or rates, which may be fixed, variable or zero, at which such
debt securities will bear interest, if any, or the method of calculating such
rate or rates;
(5) the date or dates from which interest, if any, will accrue or the
method by which such date or dates will be determined;
15
(6) the date or dates on which interest, if any, will be payable and the
record date or dates therefor and whether we may elect to extend or defer such
interest payment dates;
(7) the place or places where principal of, premium, if any, and interest,
if any, on such debt securities may be redeemed, in whole or in part, at our
option;
(8) our obligation, if any, to redeem or purchase such debt securities
pursuant to any sinking fund or analogous provisions or upon the happening of a
specified event and the period or periods within which, the price or prices at
which and the other terms and conditions upon which, such debt securities will
be redeemed or purchased, in whole or in part, pursuant to such obligations;
(9) the denominations in which such debt securities are authorized to be
issued;
(10) the currency or currency unit for which such debt securities may be
purchased or in which debt securities may be denominated or the currency or
currencies, including currency unit or units, in which principal of, premium, if
any, and interest, if any, on such debt securities will be payable and whether
we or the holders of any such debt securities may elect to receive payments in
respect of such debt securities in a currency or currency unit other than that
in which such debt securities are stated to be payable;
(11) if the amount of payments of principal of and premium, if any, or
interest, if any, on such debt securities may be determined with reference to an
index based on a currency or currencies other than that in which such debt
securities are stated to be payable, the manner in which such amount shall be
determined;
(12) if the amount of payments of principal of and premium, if any, or
interest, if any, on such debt securities may be determined with reference to
changes in the prices of particular securities or commodities or otherwise by
application of a formula, the manner in which such amount shall be determined;
(13) if other than the entire principal amount, the portion of the
principal amount of such debt securities which will be payable upon declaration
of the acceleration of the maturity of such securities or the method by which
such portion shall be determined;
(14) the person to whom any interest on any such debt security shall be
payable if other than the person in whose name such debt security is registered
on the applicable record date;
(15) any addition to, or modification or deletion of, any term of
subordination, event of default or covenant of RGA specified in the indenture
with respect to such debt securities;
(16) the application, if any, of such means of defeasance as may be
specified for such debt securities;
(17) the terms, if any, upon which the holders may convert or exchange such
debt securities into or for our common or preferred stock or other securities or
property;
(18) in the case of the subordinated and junior subordinated debt
securities, provisions relating to any modification of the subordination
provisions described elsewhere in this prospectus; and
(19) whether the provisions relating to extension or deferral of interest
payment dates described in this prospectus will apply to the debt securities;
(20) any other special terms pertaining to such debt securities. (Section
3.1 of each indenture).
Unless otherwise specified in the applicable prospectus supplement, the
debt securities will not be listed on any securities exchange.
None of our shareholders, officers or directors, past, present or future,
will have any personal liability in respect of our obligations under the
indenture or the debt securities on account of that status. (Section 1.14 of
each indenture).
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FORM AND DENOMINATIONS
Unless otherwise specified in the applicable prospectus supplement, debt
securities will be issued only in fully registered form, without coupons, and
will be denominated in U.S. dollars issued only in denominations of U.S. $1,000
and any integral multiple thereof. (Section 3.2 of each indenture).
GLOBAL DEBT SECURITIES
Unless otherwise specified in a prospectus supplement for a particular
series of debt securities, each series of debt securities will be issued in
whole or in part in global form that will be deposited with, or on behalf of, a
depositary identified in the prospectus supplement relating to that series.
Global securities will be registered in the name of the depositary, which will
be the sole direct holder of the global securities. Any person wishing to own a
debt security must do so indirectly through an account with a broker, bank or
other financial institution that, in turn, has an account with the depositary.
Special Investor Considerations for Global Securities. Our obligations with
respect to the debt securities, as well as the obligations of each trustee, run
only to persons who are registered holders of debt securities. For example, once
we make payment to the registered holder, we have no further responsibility for
that payment even if the recipient is legally required to pass the payment along
to an individual investor but fails to do so. As an indirect holder, an
investor's rights relating to a global security will be governed by the account
rules of the investor's financial institution and of the depositary, as well as
general laws relating to transfers of debt securities.
An investor should be aware that when debt securities are issued in the
form of global securities:
- the investor cannot have debt securities registered in his or her own
name;
- the investor cannot receive physical certificates for his or her debt
securities;
- the investor must look to his or her bank or brokerage firm for payments
on the debt securities and protection of his or her legal rights
relating to the debt securities;
- the investor may not be able to sell interests in the debt securities to
some insurance or other institutions that are required by law to hold
the physical certificates of debt that they own;
- the depositary's policies will govern payments, transfers, exchanges and
other matters relating to the investor's interest in the global
security; and
- the depositary will usually require that interests in a global security
be purchased or sold within its system using same-day funds.
Neither we nor the trustees have any responsibility for any aspect of the
depositary's actions or for its records of ownership interests in the global
security, and neither we nor the trustees supervise the depositary in any way.
Special Situations When the Global Security Will Be Terminated. In a few
special situations described below, the global security will terminate, and
interests in the global security will be exchanged for physical certificates
representing debt securities. After that exchange, the investor may choose
whether to hold debt securities directly or indirectly through an account at the
investor's bank or brokerage firm. In that event, investors must consult their
banks or brokers to find out how to have their interests in debt securities
transferred to their own names so that they may become direct holders.
The special situations where a global security is terminated are:
- when the depositary notifies us that it is unwilling, unable or no
longer qualified to continue as depositary, unless a replacement is
named;
- when an event of default on the debt securities has occurred and has not
been cured; or
- when and if we decide to terminate a global security. (Section 3.4 of
each indenture).
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A prospectus supplement may list situations for terminating a global
security that would apply only to a particular series of debt securities. When a
global security terminates, the depositary, and not us or one of the trustees,
is responsible for deciding the names of the institutions that will be the
initial direct holders.
ORIGINAL ISSUE DISCOUNT SECURITIES
Debt securities may be sold at a substantial discount below their stated
principal amount and may bear no interest or interest at a rate which at the
time of issuance is below market rates. Important federal income tax
consequences and special considerations applicable to any such debt securities
will be described in the applicable prospectus supplement.
INDEXED SECURITIES
If the amount of payments of principal of, and premium, if any, or any
interest on, debt securities of any series is determined with reference to any
type of index or formula or changes in prices of particular securities or
commodities, the federal income tax consequences, specific terms and other
information with respect to such debt securities and such index or formula and
securities or commodities will be described in the applicable prospectus
supplement.
FOREIGN CURRENCIES
If the principal of, and premium, if any, or any interest on, debt
securities of any series are payable in a foreign or composite currency, the
restrictions, elections, federal income tax consequences, specific terms and
other information with respect to such debt securities and such currency will be
described in the applicable prospectus supplement.
OPTIONAL REDEMPTION, PREPAYMENT OR CONVERSION IN CERTAIN EVENTS
The prospectus supplement relating to a particular series of debt
securities which provides for the optional redemption, prepayment or conversion
of such debt securities on the occurrence of certain events, such as a change of
control of RGA, will provide:
(1) a discussion of the effects that such provisions may have in deterring
certain mergers, tender offers or other takeover attempts, as well as any
possible adverse effect on the market price of RGA's securities or the ability
to obtain additional financing in the future;
(2) a statement that RGA will comply with any applicable provisions of the
requirements of Rule 14e-1 under the Securities Exchange Act of 1934 and any
other applicable securities laws in connection with any optional redemption,
prepayment or conversion provisions and any related offers by RGA, including, if
such debt securities are convertible, Rule 13e-4;
(3) a disclosure as to whether the securities will be subject to any
sinking fund or similar provision, and a description of any such provision;
(4) a disclosure of any cross-defaults in other indebtedness which may
result as a consequence of the occurrence of certain events so that the payments
on such debt securities would be effectively subordinated;
(5) a disclosure of the effect of any failure to repurchase under the
applicable indenture, including in the event of a change of control of RGA;
(6) a disclosure of any risk that sufficient funds may not be available at
the time of any event resulting in a repurchase obligation; and
(7) a discussion of any definition of "change of control" contained in the
applicable indenture.
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PAYMENT
Unless otherwise indicated in the applicable prospectus supplement,
payments in respect of the debt securities will be made in the designated
currency at the office or agency of RGA maintained for that purpose as RGA may
designate from time to time, except that, at the option of RGA, interest
payments, if any, on debt securities in registered form may be made by checks
mailed to the holders of debt securities entitled thereto at their registered
addresses. (Section 3.7 of each indenture).
PAYMENT OF INTEREST WITH RESPECT TO REGISTERED DEBT SECURITIES
Unless otherwise indicated in an applicable prospectus supplement, payment
of any installment of interest on debt securities in registered form will be
made to the person in whose name such debt security is registered at the close
of business on the regular record date for such interest. (Section 3.7 of each
indenture).
TRANSFER AND EXCHANGE
Unless otherwise indicated in the applicable prospectus supplement, debt
securities in registered form will be transferable or exchangeable at the agency
of RGA maintained for such purpose as designated by RGA from time to time. Debt
securities may be transferred or exchanged without service charge, other than
any tax or other governmental charge imposed in connection with such transfer or
exchange. (Section 3.5 of each indenture).
CONSOLIDATION, MERGER, CONVEYANCE, SALE OF ASSETS AND OTHER TRANSFERS
We may not consolidate with or merge with or into or wind up into, whether
or not we are the surviving corporation, or sell, assign, convey, transfer or
lease our properties and assets substantially as an entirety to any person,
unless:
- the surviving corporation or other person is organized and existing
under the laws of the United States or one of the 50 states, any U.S.
territory or the District of Columbia, and assumes the obligation to pay
the principal of, and premium, if any, and interest on all the debt
securities and coupons, if any, and to perform or observe all covenants
of each indenture; and
- immediately after the transaction, there is no event of default under
each indenture. (Section 10.1 of each indenture).
Upon the consolidation, merger or sale, the successor corporation formed by
the consolidation, or into which we are merged or to which the sale is made,
will succeed to, and be substituted for us under each indenture. (Section 10.2
of each indenture).
Unless a prospectus supplement relating to a particular series of debt
securities provides otherwise, the indenture and the terms of the debt
securities will not contain any covenants designed to afford holders of any debt
securities protection in a highly leveraged or other transaction involving us,
whether or not resulting in a change of control, which may adversely affect
holders of the debt securities.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
If indicated in the applicable prospectus supplement, we will have the
right, as long as no event of default under the applicable series of debt
securities has occurred and is continuing, at any time and from time to time
during the term of the series of debt securities to defer the payment of
interest on one or more series of debt securities for the number of consecutive
interest payment periods specified in the applicable prospectus supplement,
subject to the terms, conditions and covenants, if any, specified in the
prospectus supplement, provided that no extension period may extend beyond the
stated maturity of the debt securities. Material United States federal income
tax consequences and special considerations applicable to these debt securities
will be described in the applicable prospectus supplement. Unless otherwise
indicated in the applicable prospectus supplement, at the end of the extension
period, we will
19
pay all interest then accrued and unpaid together with interest on accrued and
unpaid interest compounded semiannually at the rate specified for the debt
securities to the extent permitted by applicable law. However, unless otherwise
indicated in the applicable prospectus supplement, during the extension period
neither we nor any of our subsidiaries may:
- declare or pay dividends on, make distributions regarding, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of
our capital stock, other than:
(1) purchases of our capital stock in connection with any employee or
agent benefit plans or the satisfaction of our obligations under any
contract or security outstanding on the date of the event requiring
us to purchase capital stock,
(2) in connection with the reclassifications of any class or series of
our capital stock, or the exchange or conversion of one class or
series of our capital stock for or into another class or series of
our capital stock,
(3) the purchase of fractional interests in shares of our capital stock
in connection with the conversion or exchange provisions of that
capital stock or the security being converted or exchanged,
(4) dividends or distributions in our capital stock, or rights to
acquire capital stock, or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock, or
(5) redemptions or repurchases of any rights outstanding under our
shareholder rights plan;
- make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by us that rank equally
with or junior to the debt securities;
- make any guarantee payments regarding the foregoing, other than payments
under our guarantee of the preferred securities of any RGA trust; or
- redeem, purchase or acquire less than all of the junior subordinated
debt securities or any preferred securities of an RGA trust.
Prior to the termination of any extension period, as long as no event of
default under the applicable indenture has occurred and is continuing, we may
further defer payments of interest, subject to the above limitations set forth
in this section, by extending the interest payment period; provided, however,
that, the extension period, including all previous and further extensions, may
not extend beyond the maturity of the debt securities.
Upon the termination of any extension period and the payment of all amounts
then due, we may commence a new extension period, subject to the terms set forth
in this section. No interest during an extension period, except at the end of
the extension period, will be due and payable, but we may prepay at any time all
or any portion of the interest accrued during an extension period. We do not
currently intend to exercise our right to defer payments of interest by
extending the interest payment period on the debt securities. In the case of our
junior subordinated debt securities, if the property trustee is the sole holder
of such debt securities, we will give the administrative trustees and the
property trustee notice of our selection of an extension period one business day
before the earlier of (1) the date distributions on the preferred securities are
payable or (2) the date the administrative trustees are required to give notice
to the New York Stock Exchange, or other applicable self-regulatory
organization, or to holders of the preferred securities of the record or payment
date of the distribution. The administrative trustees will give notice of our
selection of the extension period to the holders of the preferred securities. If
the property trustee is not the sole holder of such debt securities, or in the
case of the senior and subordinated debt securities, we will give the holders of
these debt securities notice of our selection of an extension period ten
business days before the earlier of (1) the interest payment date or (2) the
date upon which we are required to give notice to the New York Stock Exchange,
or other applicable self-regulatory organization, or to holders of such debt
securities of the record or payment date of the related interest payment.
20
(Article XVII of the senior indenture; Article XVIII of the subordinated and
junior subordinated indentures).
MODIFICATION OR AMENDMENT OF THE INDENTURES
Supplemental Indentures Without Consent of Holders. Without the consent of
any holders, we and the trustee may enter into one or supplemental indentures
for certain purposes, including:
(1) to evidence the succession of another corporation to our rights and the
assumption by such successor of our covenants contained in each indenture;
(2) to add to our covenants for the benefit of all or any series of debt
securities, or to surrender any of our rights or powers;
(3) to add any additional events of default;
(4) to add or change any provisions to permit or facilitate the issuance of
debt securities of any series in uncertificated or bearer form;
(5) to change or eliminate any provisions, as long as any such change or
elimination is effective only when there are no outstanding debt securities of
any series created before the execution of such supplemental indenture which is
entitled to the benefit of the provisions being changed or eliminated;
(6) to provide security for or guarantee of the debt securities;
(7) to supplement any of the provisions to permit or facilitate the
defeasance and discharge of any series of debt securities in accordance with
such indenture as long as such action does not adversely affect the interests of
the holders of the debt securities in any material respect;
(8) to establish the form or terms of debt securities in accordance with
each indenture;
(9) to provide for the acceptance of the appointment of a successor trustee
for any series of debt securities or to provide for or facilitate the
administration of the trusts under the indenture by more than one trustee;
(10) to cure any ambiguity, to correct or supplement any provision of any
indenture which may be defective or inconsistent with any other provision, to
eliminate any conflict with the Trust Indenture Act or to make any other
provisions with respect to matters or questions arising under such indenture
which are not inconsistent with any provision of the indenture, as long as the
additional provisions do not adversely affect the interests of the holders in
any material respect; or
(11) in the case of the subordinated and the junior subordinated
indentures, to modify the subordination provisions thereof, except in a manner
which would be adverse to the holders of subordinated or junior subordinated
debt securities of any series then outstanding. (Section 11.1 of each such
indenture).
Supplemental Indentures With Consent of Holders. If we receive the consent
of the holders of at least a majority in principal amount of the outstanding
debt securities of each series affected, we may enter into supplemental
indentures with the trustee for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of each indenture or
of modifying in any manner the rights of the holders under the indenture of such
debt securities and coupons, if any. As long as any of the preferred securities
of an RGA trust remain outstanding, no modification of the related junior
subordinated indenture may be made that requires the consent of the holders of
the related junior subordinated debt securities, no termination of the related
junior subordinated indenture may occur, and no waiver of any event of default
under the related junior subordinated indenture may be effective, without the
prior consent of the holders of a majority of the aggregate liquidation amount
of the preferred securities of such RGA trust.
21
However, unless we receive the consent of all of the affected holders, we
may not enter into supplemental indentures that would, with respect to the debt
securities of such holders:
(1) conflict with the required provisions of the Trust Indenture Act;
(2) except as described in any prospectus supplement:
- change the stated maturity of the principal of, or installment of
interest, if any, on, any debt security,
- reduce the principal amount thereof or the interest thereon or any
premium payable upon redemption thereof; however, a requirement to
offer to repurchase debt securities will not be deemed a redemption
for this purpose,
- change the stated maturity of or reduce the amount of any payment to
be made with respect to any coupon,
- change the currency or currencies in which the principal of, and
premium, if any, or interest on such debt security is denominated or
payable,
- reduce the amount of the principal of a discount security that would
be due and payable upon a declaration of acceleration of the maturity
thereof or reduce the amount of, or postpone the date fixed for, any
payment under any sinking fund or analogous provisions for any debt
security,
- impair the right to institute suit for the enforcement of any payment
on or after the stated maturity thereof, or, in the case of
redemption, on or after the redemption date,
- limit our obligation to maintain a paying agency outside the United
States for payment on bearer securities, or
- adversely affect the right to convert any debt security into shares of
our common stock if so provided;
(3) reduce the requirement for majority approval of supplemental
indentures, or for waiver of compliance with certain provisions of either
indenture or certain defaults; or
(4) modify any provisions of either indenture relating to waiver of past
defaults with respect to that series, except to increase any such percentage or
to provide that certain other provisions of such indenture cannot be modified or
waived without the consent of the holders of each such debt security of each
series affected thereby. (Section 11.2 of each indenture).
It is not necessary for holders of the debt securities to approve the
particular form of any proposed supplemental indenture, but it is sufficient if
the holders approve the substance thereof. (Section 11.2 of each indenture).
A supplemental indenture which changes or eliminates any covenant or other
provision of the indenture to which it relates with respect to one or more
particular series of debt securities and coupons, if any, or which modifies the
rights of the holders of debt securities or any coupons of such series with
respect to such covenant or other provision, will be deemed not to affect the
rights under such indenture of the holders of debt securities and coupons, if
any, of any other series. (Section 11.2 of each indenture).
SUBORDINATION UNDER THE SUBORDINATED INDENTURE AND THE JUNIOR SUBORDINATED
INDENTURE
In the subordinated and junior subordinated indentures, RGA has covenanted
and agreed that any subordinated or junior subordinated debt securities issued
thereunder are subordinated and junior in right of payment to all present and
future senior indebtedness to the extent provided in the subordinated indenture.
(Section 17.1 of the subordinated and junior subordinated indentures). Unless
otherwise indicated in the applicable prospectus supplement, the subordinated
and junior subordinated indentures
22
define the term "senior indebtedness" with respect to each respective series of
subordinated and junior subordinated debt securities, to mean the principal,
premium, if any, and interest on:
- all indebtedness of RGA, whether outstanding on the date of the issuance
of subordinated debt securities or thereafter created, incurred or
assumed, which is for money borrowed, or which is evidenced by a note or
similar instrument given in connection with the acquisition of any
business, properties or assets, including securities;
- any indebtedness of others of the kinds described in the preceding
clause for the payment of which RGA is responsible or liable as
guarantor or otherwise; and
- amendments, renewals, extensions and refundings of any such
indebtedness.
In the case of the junior subordinated indenture, unless otherwise indicated in
the applicable prospectus supplement, senior indebtedness also includes all
subordinated debt securities issued under the subordinated indenture. The senior
indebtedness will continue to be senior indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of the senior indebtedness or extension or
renewal of the senior indebtedness. Unless otherwise indicated in the applicable
prospectus supplement, notwithstanding anything to the contrary in the
foregoing, senior indebtedness will not include (A) indebtedness incurred for
the purchase of goods or materials or for services obtained in the ordinary
course of business and (B) any indebtedness which by its terms is expressly made
pari passu, or equal in rank and payment, with or subordinated to the applicable
debt securities. (Section 17.2 of the subordinated and junior subordinated
indentures).
Unless otherwise indicated in the applicable prospectus supplement, no
direct or indirect payment, in cash, property or securities, by set-off or
otherwise, shall be made or agreed to be made on account of the subordinated or
junior subordinated debt securities or interest thereon or in respect of any
repayment, redemption, retirement, purchase or other acquisition of subordinated
debt securities, if:
- RGA defaults in the payment of any principal, or premium, if any, or
interest on any senior indebtedness, whether at maturity or at a date
fixed for prepayment or declaration or otherwise; or
- an event of default occurs with respect to any senior indebtedness
permitting the holders to accelerate the maturity and written notice of
such event of default, requesting that payments on subordinated or junior
subordinated debt securities cease, is given to RGA by the holders of
senior indebtedness,
unless and until such default in payment or event of default has been cured or
waived or ceases to exist. Unless otherwise indicated in the applicable
prospectus supplement, the foregoing limitations will also apply to payments in
respect of the junior subordinated debt securities in the case of an event of
default under the subordinated indebtedness (Section 17.4 of the subordinated
and junior subordinated indentures).
Unless otherwise indicated in the applicable prospectus supplement, all
present and future senior indebtedness, which shall include subordinated
indebtedness in the case of our junior subordinated debt securities, including,
without limitation, interest accruing after the commencement of any proceeding
described below, assignment or marshaling of assets, shall first be paid in full
before any payment or distribution, whether in cash, securities or other
property, shall be made by RGA on account of subordinated or junior subordinated
debt securities in the event of:
- any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to RGA,
its creditors or its property;
- any proceeding for the liquidation, dissolution or other winding-up of
RGA, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings;
- any assignment by RGA for the benefit of creditors; or
- any other marshaling of the assets of RGA.
23
Unless otherwise indicated in the applicable prospectus supplement, in any
such event, payments or distributions which would otherwise be made on
subordinated or junior subordinated debt securities will generally be paid to
the holders of senior indebtedness, or their representatives, in accordance with
the priorities existing among these creditors at that time until the senior
indebtedness is paid in full. Unless otherwise indicated in the applicable
prospectus supplement, if the payments or distributions on subordinated or
junior subordinated debt securities are in the form of RGA's securities or those
of any other corporation under a plan of reorganization or readjustment and are
subordinated to outstanding senior indebtedness and to any securities issued
with respect to such senior indebtedness under a plan of reorganization or
readjustment, they will be made to the holders of the subordinated debt
securities and then, if any amounts remain, to the holders of the junior
subordinated debt securities. (Section 17.3 of the subordinated and junior
subordinated indentures). No present or future holder of any senior indebtedness
will be prejudiced in the right to enforce the subordination of subordinated or
junior subordinated debt securities by any act or failure to act on the part of
RGA. (Section 17.9 of the subordinated and junior subordinated indentures).
Senior indebtedness will only be deemed to have been paid in full if the
holders of such indebtedness have received cash, securities or other property
which is equal to the amount of the outstanding senior indebtedness. After
payment in full of all present and future senior indebtedness, holders of
subordinated debt securities will be subrogated to the rights of any holders of
senior indebtedness to receive any further payments or distributions that are
applicable to the senior indebtedness until all the subordinated debt securities
are paid in full. In matters between holders of subordinated debt securities and
any other type of RGA's creditors, any payments or distributions that would
otherwise be paid to holders of senior debt securities and that are made to
holders of subordinated debt securities because of this subrogation will be
deemed a payment by RGA on account of senior indebtedness and not on account of
subordinated debt securities. (Section 17.7 of the subordinated and junior
subordinated indentures).
Subordinated indebtedness will only be deemed to have been paid in full if
the holders of such indebtedness have received cash, securities or other
property which is equal to the amount of the outstanding subordinated
indebtedness. After payment in full of all present and future subordinated
indebtedness, holders of junior subordinated debt securities will be subrogated
to the rights of any holders of subordinated indebtedness to receive any further
payments or distributions that are applicable to the subordinated indebtedness
until all the junior subordinated debt securities are paid in full. In matters
between holders of junior subordinated debt securities and any other type of
RGA's creditors, any payments or distributions that would otherwise be paid to
holders of subordinated debt securities and that are made to holders of junior
subordinated debt securities because of this subrogation will be deemed a
payment by RGA on account of subordinated indebtedness and not on account of
junior subordinated debt securities. (Section 17.7 of the junior subordinated
indenture).
The subordinated and junior subordinated indentures provide that the
foregoing subordination provisions may be changed, except in a manner which
would be adverse to the holders of subordinated or junior subordinated debt
securities of any series then outstanding. (Sections 11.1 and 11.2 of the
subordinated and junior subordinated indentures). The prospectus supplement
relating to such subordinated or junior subordinated debt securities would
describe any such change.
If this prospectus is being delivered in connection with the offering of a
series of subordinated or junior subordinated debt securities, the accompanying
prospectus supplement or information incorporated by reference will set forth
the approximate amount of indebtedness senior to such subordinated or junior
subordinated indebtedness outstanding as of a recent date. The subordinated and
junior subordinated indentures place no limitation on the amount of additional
senior indebtedness that may be incurred by RGA. RGA expects from time to time
to incur additional indebtedness constituting senior indebtedness. At September
30, 2001, RGA had approximately $318.2 million of long-term indebtedness,
including $24.1 million of outstanding long-term indebtedness of our
subsidiaries. The indebtedness of our subsidiaries would effectively rank senior
to all of RGA's senior, subordinated and junior subordinated debt securities.
The remaining $294.1 million of our outstanding long-term indebtedness would
rank equally with the senior debt securities and prior in right of payment to
the subordinated and junior subordinated
24
debt securities. At September 30, 2001, RGA had no debt which would rank equal
to or junior in right of payment to the subordinated or junior subordinated debt
securities.
EVENTS OF DEFAULT
An event of default with respect to any series of debt securities issued
under each of the indentures means:
- default for 30 days in the payment of any interest upon any debt
security or any payment with respect to the coupons, if any, of such
series when it becomes due and payable, except where we have properly
deferred the interest, if applicable;
- default in the payment of the principal of, and premium, if any, on, any
debt security of such series when due;
- default in the deposit of any sinking fund payment when due by the terms
of a debt security of such series;
- default for 90 days after we receive notice as provided in the
applicable indenture in the performance of any covenant or breach of any
warranty in the indenture governing that series;
- certain events of bankruptcy, insolvency or receivership, or, with
respect to the junior subordinated debt securities, the dissolution of
the RGA trust; or
- any other events which we specify for that series, which will be
indicated in the prospectus supplement for that series. (Section 5.1 of
each indenture).
Within 90 days after a default in respect of any series of debt securities,
the trustee, or property trustee, if applicable, must give to the holders of
such series notice of all uncured and unwaived defaults by us known to it.
However, except in the case of default in payment, the trustee may withhold such
notice if it determines that such withholding is in the interest of such
holders. (Section 6.2 of each indenture).
If an event of default occurs in respect of any outstanding series of debt
securities, the trustee of the senior or subordinated indentures, the property
trustee under the junior subordinated indenture or the holders of at least 25%
in principal amount of the outstanding debt securities of that series may
declare the principal amount, or, if the debt securities of that series are
original issue discount securities or indexed securities, such portion of the
principal amount as may be specified in the terms of those securities, of all of
the debt securities of that series to be due and payable immediately by written
notice thereof to us, and to the trustee or property trustee, if applicable, if
given by the holders of the debt securities. However, with respect to any debt
securities issued under the subordinated or junior subordinated indenture, the
payment of principal and interest on such debt securities shall remain
subordinated to the extent provided in Article XVII of the subordinated and
junior subordinated indentures. In addition, at any time after such a
declaration of acceleration but before a judgment or decree for payment of the
money due has been obtained, the holders of a majority in principal amount of
outstanding debt securities of that series may, subject to specified conditions,
rescind and annul such acceleration if all events of default, other than the
non-payment of accelerated principal, or premium, if any, or interest on debt
securities of such series have been cured or waived as provided in the
indenture. (Section 5.2 of each indenture).
The holders of a majority in principal amount of the outstanding debt
securities of a series, on behalf of the holders of all debt securities of that
series, may waive any past default and its consequences, except that they may
not waive an uncured default in payment or a default which cannot be waived
without the consent of the holders of all outstanding securities of that series.
(Section 5.13 of each indenture).
Within four months after the close of each fiscal year, we must file with
the trustee a statement, signed by specified officers, stating whether or not
such officers have knowledge of any default under the
25
indenture and, if so, specifying each such default and the nature and status of
each such default. (Section 12.2 of each indenture).
Subject to provisions in the applicable indenture relating to its duties in
case of default, the trustee, or property trustee, if applicable, is not
required to take action at the request of any holders of debt securities, unless
such holders have offered to the trustee reasonable security or indemnity.
(Section 6.3 of each indenture).
Subject to such indemnification requirements and other limitations set
forth in the applicable indenture, if any event of default has occurred, the
holders of a majority in principal amount of the outstanding debt securities of
any series may direct the time, method and place of conducting proceedings for
remedies available to the trustee, or exercising any trust or power conferred on
the trustee, in respect of such series. (Section 5.12 of each indenture).
DEFEASANCE; SATISFACTION AND DISCHARGE
Legal or Covenant Defeasance. Each indenture provides that we may be
discharged from our obligations in respect of the debt securities of any series,
as described below. These provisions will apply to any registered securities
that are denominated and payable only in U.S. dollars, unless otherwise
specified in a prospectus supplement. The prospectus supplement will describe
any defeasance provisions that apply to other types of debt securities. (Section
15.1 of each indenture).
At our option, we may choose either one of the following alternatives:
- We may elect to be discharged from any and all of our obligations in
respect of the debt securities of any series, except for, among other
things, certain obligations to register the transfer or exchange of debt
securities of such series, to replace stolen, lost or mutilated debt
securities of such series, and to maintain paying agencies and certain
provisions relating to the treatment of funds held by the trustee for
defeasance. We refer to this as "legal defeasance."
- Alternatively, we may omit to comply with the covenants described under
the heading "-- Consolidation, Merger, Conveyance, Sale of Assets and
Other Transfers" and any additional covenants which may be set forth in
the applicable prospectus supplement, and any omission to comply with
those covenants will not constitute a default or an event of default
with respect to the debt securities of that series. We refer to this as
"covenant defeasance."
In either case, we will be so discharged upon the deposit with the trustee,
in trust, of money and/or U.S. Government Obligations that, through the payment
of interest and principal in accordance with their terms, will provide money in
an amount sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay and discharge each installment of
principal, including any mandatory sinking fund payments, premium, if any, and
interest on the debt securities of that series on the stated maturity of those
payments in accordance with the terms of the indenture and those debt
securities.
This discharge may occur only if, among other things, we have delivered to
the trustee an opinion of counsel or Internal Revenue Service ruling to the
effect that the holders of the debt securities of that series will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of the
defeasance. (Section 15.2 of each indenture).
In addition, with respect to the subordinated and junior subordinated
indentures, in order to be discharged, no event or condition shall exist that,
pursuant to certain provisions described under "-- Subordination under the
Subordinated Indenture and the Junior Subordinated Indenture" above, would
prevent us from making payments of principal of, and premium, if any, and
interest on subordinated or junior subordinated debt securities and coupons at
the date of the irrevocable deposit referred to above. (Section 15.2 of the
subordinated and junior subordinated indentures).
Covenant Defeasance and Events of Default. In the event we exercise our
option to effect covenant defeasance with respect to any series of debt
securities and the debt securities of that series are declared due and payable
because of the occurrence of any event of default, the amount of money and/or
26
U.S. Government Obligations on deposit with the trustee will be sufficient to
pay amounts due on the debt securities of that series at the time of their
stated maturity but may not be sufficient to pay amounts due on the debt
securities of that series at the time of the acceleration resulting from the
event of default. However, we will remain liable for those payments.
"U.S. Government Obligations" means securities which are (1) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (2) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and will also include a depository receipt issued
by a bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that, except as required by law, such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt. (Section 15.2 of each indenture).
We may exercise our legal defeasance option even if we have already
exercised our covenant defeasance option.
There may be additional provisions relating to defeasance which we will
describe in the prospectus supplement. (Section 15.1 of each indenture).
CONVERSION OR EXCHANGE
Any series of the senior or subordinated debt securities may be convertible
or exchangeable into common or preferred stock or other debt securities
registered under the registration statement relating to this prospectus. The
specific terms and conditions on which such debt securities may be so converted
or exchanged will be set forth in the applicable prospectus supplement. Those
terms may include the conversion or exchange price, provisions for conversion or
exchange, either mandatory, at the option of the holder, or at our option,
whether we have an option to convert debt securities into cash, rather than
common stock, and provisions under which the number of shares of common or
preferred stock or other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the
applicable prospectus supplement. (Section 16.1 of each indenture).
GOVERNING LAW
The indentures and the debt securities will be governed by, and construed
in accordance with, the internal laws of the State of New York. (Section 1.11 of
each indenture).
REGARDING THE TRUSTEE
We will designate the trustee under the senior and subordinated indentures
in a prospectus supplement. Unless otherwise specified in the applicable
prospectus supplement, The Bank of New York will be the trustee under the junior
subordinated indenture relating to the junior subordinated debt securities which
may be offered to the RGA trusts. From time to time, we may enter into banking
or other relationships with any of such trustees or their affiliates.
There may be more than one trustee under each indenture, each with respect
to one or more series of debt securities. (Section 1.1 of each indenture). Any
trustee may resign or be removed with respect to one or more series of debt
securities, and a successor trustee may be appointed to act with respect to such
series. (Section 6.10 of each indenture).
If two or more persons are acting as trustee with respect to different
series of debt securities, each trustee will be a trustee of a trust under the
indenture separate from the trust administered by any other such trustee. Except
as otherwise indicated in this prospectus, any action to be taken by the trustee
may
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be taken by each such trustee with respect to, and only with respect to, the one
or more series of debt securities for which it is trustee under the indenture.
(Section 6.1 of each indenture).
DESCRIPTION OF CAPITAL STOCK OF RGA
The following is a summary of the material terms of our capital stock and
the provisions of our Second Restated Articles of Incorporation, bylaws and
rights agreement. It also summarizes some relevant provisions of the Missouri
General and Business Corporation Law, which we refer to as Missouri law. Since
the terms of our articles of incorporation, bylaws and rights agreement, and
Missouri law, are more detailed than the general information provided below, you
should only rely on the actual provisions of those documents and Missouri law.
If you would like to read those documents, they are on file with the SEC, as
described under the heading "Where You Can Find More Information" beginning on
page 3.
GENERAL
Our authorized capital stock consists of 75,000,000 shares of common stock,
par value $0.01 per share, and 10,000,000 shares of preferred stock, par value
$0.01 per share.
COMMON STOCK
All of our outstanding shares of common stock are fully paid and
nonassessable. Subject to the prior rights of the holders of any shares of
preferred stock which later may be issued and outstanding, holders of common
stock are entitled to receive dividends as and when declared by us out of
legally available funds, and, if we liquidate, dissolve, or wind up RGA, to
share ratably in all remaining assets after we pay liabilities. Each holder of
common stock is entitled to one vote for each share held of record on all
matters presented to a vote of shareholders, including the election of
directors. Holders of common stock have no cumulative voting rights or
preemptive rights to purchase or subscribe for any stock or other securities and
there are no conversion rights or redemption or sinking fund provisions for the
common stock.
We may issue additional shares of authorized common stock without
shareholder approval, subject to applicable rules of the New York Stock
Exchange. At our annual meeting of shareholders on May 23, 2001, our
shareholders, including MetLife, adopted a proposal authorizing our board of
directors to approve, during the three years following the date of the
shareholder meeting, any sales to MetLife or its affiliates of our equity
securities, including our common stock or other securities convertible into or
exercisable for our common stock, in which the number of shares will not exceed
the number of shares that would enable MetLife to maintain its then current
ownership percentage of our common stock. Any such sale would be on
substantially the same terms as a sale to unaffiliated third parties. The
shareholder approval was obtained to comply with applicable New York Stock
Exchange rules regarding issuances of common equity to a substantial shareholder
such as MetLife.
Mellon Investor Services LLC, Ridgefield Park, New Jersey is the registrar
and transfer agent for our common stock. Our common stock is listed on the New
York Stock Exchange under the symbol "RGA."
PREFERRED STOCK
Our articles of incorporation vests our board of directors with authority
to issue up to 10,000,000 shares of preferred stock from time to time in one or
more series, with such voting powers, full or limited, or no voting powers, and
such designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as may
be adopted by the resolution or resolutions providing for the issuance of such
stock adopted from time to time by the board of directors. Our board of
directors is expressly authorized to fix or determine:
- the specific designation of the shares of the series;
- the consideration for which the shares of the series are to be issued;
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- the rate and times at which, and the conditions under which, dividends
will be payable on shares of that series, and the status of those
dividends as cumulative or non-cumulative and as participating or
non-participating;
- the price or prices, times, terms and conditions, if any, upon which the
shares of the series may be redeemed;
- the rights, if any, which the holders of shares of the series have in
the event of dissolution or upon distribution of our assets;
- from time to time, whether to include the additional shares of preferred
stock which we are authorized to issue in the series;
- whether or not the shares of the series are convertible into or
exchangeable for other securities of RGA, including shares of our common
stock or shares of any other series of our preferred stock, the price or
prices or the rate or rates at which conversion or exchange may be made,
and the terms and conditions upon which the conversion or exchange right
may be exercised;
- if a sinking fund will be provided for the purchase or redemption of
shares of the series and, if so, to fix the terms and the amount or
amounts of the sinking fund; and
- any other preferences and rights, privileges and restrictions applicable
to the series as may be permitted by law.
All shares of the same series of preferred stock will be identical and of
equal rank except as to the times from which cumulative dividends, if any, on
those shares will be cumulative. The shares of different series may differ,
including as to rank, as may be provided in our articles of incorporation, or as
may be fixed by our board of directors as described above. We may from time to
time amend our articles of incorporation to increase or decrease the number of
authorized shares of preferred stock.
The material terms of any series of preferred stock being offered by us
will be described in the prospectus supplement relating to that series of
preferred stock. If so indicated in the prospectus supplement and if permitted
by the articles of incorporation and by law, the terms of any such series may
differ from the terms set forth below. That prospectus supplement may not
restate the amendment to our articles of incorporation or the board resolution
that establishes a particular series of preferred stock in its entirety. We urge
you to read that amendment or board resolution because it, and not the
description in the prospectus supplement, will define your rights as a holder of
preferred stock. The certificate of amendment to our articles of incorporation
or board resolution will be filed with the Secretary of State of the State of
Missouri and with the SEC.
Dividend Rights. The preferred stock will be preferred as to payment of
dividends over our common stock or any other stock ranking junior to the
preferred stock as to dividends. Before any dividends or distributions on our
common stock or stock of junior rank, other than dividends or distributions
payable in common stock, are declared and set apart for payment or paid, the
holders of shares of each series of preferred stock will be entitled to receive
dividends when, as and if declared by our board of directors. We will pay those
dividends either in cash, shares of common stock or preferred stock or
otherwise, at the rate and on the date or dates indicated in the applicable
prospectus supplement. With respect to each series of preferred stock, the
dividends on each share of that series will be cumulative from the date of issue
of the share unless some other date is set forth in the prospectus supplement
relating to the series. Accruals of dividends will not bear interest.
Rights upon Liquidation. The preferred stock will be preferred over common
stock, or any other stock ranking junior to the preferred stock with respect to
distribution of assets, as to our assets so that the holders of each series of
preferred stock will be entitled to be paid, upon voluntary or involuntary
liquidation, dissolution or winding up and before any distribution is made to
the holders of common stock or stock of junior rank, the amount set forth in the
applicable prospectus supplement. However, in this case the holders of preferred
stock will not be entitled to any other or further payment. If upon any
liquidation, dissolution or winding up our net assets are insufficient to permit
the payment in full of the
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respective amounts to which the holders of all outstanding preferred stock are
entitled, our entire remaining net assets will be distributed among the holders
of each series of preferred stock in an amount proportional to the full amounts
to which the holders of each series are entitled.
Redemption. All shares of any series of preferred stock will be redeemable
to the extent set forth in the prospectus supplement relating to the series.
Conversion or Exchange. Shares of any series of preferred stock will be
convertible into or exchangeable for shares of common stock or preferred stock
or other securities to the extent set forth in the applicable prospectus
supplement.
Preemptive Rights. No holder of shares of any series of preferred stock
will have any preemptive or preferential rights to subscribe to or purchase
shares of any class or series of stock, now or hereafter authorized, or any
securities convertible into, or warrants or other evidences of optional rights
to purchase or subscribe to, shares of any series, now or hereafter authorized.
Voting Rights. Except as indicated in the applicable prospectus
supplement, the holders of preferred stock will be entitled to one vote for each
share of preferred stock held by them on all matters properly presented to
shareholders. The holders of common stock and the holders of all series of
preferred stock will vote together as one class. In addition, currently under
Missouri law, even if shares of a particular class or series of stock are not
otherwise entitled to a vote on any matters submitted to the shareholders,
amendments to the articles of incorporation which adversely affect those shares
require a vote of the class or series of which such shares are a part, including
amendments which would:
- increase or decrease the aggregate number or par value of authorized
shares of the class or series;
- create a new class of shares having rights and preferences prior or
superior to the shares of the class or series;
- increase the rights and preferences, or the number of authorized shares,
of any class having rights and preferences prior to or superior to the
rights of the class or series; or
- alter or change the powers, preferences or special rights of the shares
of such class or series so as to affect such shares adversely.
Most of our operations are conducted through our subsidiaries, and thus our
ability to pay dividends on any series of preferred stock is dependent on their
financial condition, results of operations, cash requirements and other related
factors. Our subsidiaries are also subject to restrictions on dividends and
other distributions contained under applicable insurance laws and related
regulations.
Depending upon the rights of holders of the preferred stock, an issuance of
preferred stock could adversely affect holders of common stock by delaying or
preventing a change of control of RGA, making removal of the management of RGA
difficult, or restricting the payment of dividends and other distributions to
the holders of common stock. Except as otherwise contemplated by our shareholder
rights plan described below, we presently have no intention to issue any shares
of preferred stock.
As described under "Description of Depositary Shares of RGA," we may, at
our option, elect to offer depositary shares evidenced by depositary receipts,
each representing an interest, to be specified in the applicable prospectus
supplement for the particular series of the preferred stock, in a share of the
particular series of the preferred stock issued and deposited with a preferred
stock depositary. All shares of preferred stock offered by this prospectus, or
issuable upon conversion, exchange or exercise of securities, will, when issued,
be fully paid and non-assessable.
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
We may issue additional shares of common stock or preferred stock without
shareholder approval, subject to applicable rules of the New York Stock
Exchange, for a variety of corporate purposes, including raising additional
capital, corporate acquisitions, and employee benefit plans. The existence of
unissued and unreserved common and preferred stock may enable us to issue shares
to persons who are friendly to
30
current management, which could discourage an attempt to obtain control of RGA
through a merger, tender offer, proxy contest, or otherwise, and protect the
continuity of management and possibly deprive you of opportunities to sell your
shares at prices higher than the prevailing market prices. We could also use
additional shares to dilute the stock ownership of persons seeking to obtain
control of RGA pursuant to the operation of the rights plan or otherwise. See
also "-- Certain Charter and Bylaw Provisions" below.
RIGHTS PLAN
Under our shareholder rights plan, we authorized the issuance of one
preferred stock purchase right for each outstanding share of common stock. The
rights agreement, as amended, between RGA and Mellon Investor Services LLC, as
rights agent, contains the terms of the shareholder rights plan. Since the terms
of our shareholder rights plan are more extensive than the general summary
information we are providing, you should only rely on the actual provisions of
the rights agreement. If you would like to read the rights agreement, it is on
file with the SEC or you may request a copy from us.
Exercisability of Rights
Under the rights agreement, one right attaches to each outstanding share of
our common stock and, when exercisable, entitles the registered holder to
purchase from us one two hundred twenty fifth (1/225th) of a share of Series A
preferred stock at an initial purchase price of $130 per one one-hundredth
(1/100th) of a share, subject to customary antidilution adjustments. For a
description of the terms of the Series A preferred stock. See "Description of
Capital Stock -- Series A Preferred Stock" below.
The rights will not become exercisable until the earlier of:
- 10 business days following a public announcement that a person or group,
other than GenAmerica, MetLife and certain related persons, has become
the beneficial owner of securities representing 20% or more of the
voting power of common stock;
- 10 business days after we first determine that a person or group, other
than GenAmerica, MetLife and certain related persons, has become the
beneficial owner of securities representing 20% or more of the voting
power of our common stock; or
- 10 business days, or such later date as we may determine, following the
commencement of, or the announcement of an intention to commence, a
tender offer or exchange offer that would result in a person or group,
other than GenAmerica, MetLife and certain related persons, becoming the
beneficial owner of securities representing 20% or more of the voting
power of our common stock (or such later date as our board of directors
may determine, but in no event later than the date that any person or
group actually becomes such an owner).
Additionally, at any time a person or a group, other than GenAmerica,
MetLife and certain related persons, has become the beneficial owner of
securities representing 20% or more of the voting power of our common stock, and
RGA has registered the securities subject to the rights under the Securities Act
of 1933, the flip-in features of the rights or, at the discretion of our board
of directors, the exchange features of the rights, may be exercised by any
holder, except for such person or group. A summary description of each of these
features follows:
"Flip In" Feature
In the event a person or group, other than GenAmerica, MetLife and certain
related persons, becomes the beneficial owner of securities representing 20% or
more of the voting power of our common stock, each holder of a right, except for
such person or group, will have the right to acquire, upon exercise of the
right, instead of one two hundred twenty fifth (1/225th) of a share of Series A
preferred stock, shares of our common stock having a value equal to twice the
exercise price of the right. For example, if we assume that the initial purchase
price of $130 per one one-hundredth (1/100th) of a share of Series A preferred
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stock is in effect on the date that the flip-in feature of the right is
exercised, any holder of a right, except for the person or group that has become
the beneficial owner of securities representing 20% or more of the voting power
of our common stock, can exercise nine of his or her rights by paying us $520 in
order to receive from us shares of our common stock having a value equal to
$1,040.
"Exchange" Feature
At any time after a person or group, other than GenAmerica, MetLife and
certain related persons, becomes the beneficial owner of securities representing
20% or more, but less than 50%, of the voting power of our common stock, our
board of directors may, at its option exchange all or some of the rights held by
holders of our common stock, except for those held by such person or group, for
our common stock at an exchange ratio of one share of common stock per right,
and cash instead of fractional shares, if any.
Use of this exchange feature means that eligible rights holders would not
have to pay a purchase price before receiving shares of our common stock.
"Flip Over" Feature
In the event we are acquired in a merger or other business combination
transaction or 50% or more of the assets or earning power of us and our
subsidiaries, taken as a whole, are sold, each holder of a right, except for a
person or group, other than GenAmerica, MetLife and certain related persons,
that is the beneficial owner of securities representing 20% or more of the
voting power of our common stock, will have the right to receive, upon exercise
of the right, the number of shares of the acquiring company's capital stock with
the greatest voting power having a value equal to two times the exercise price
of three rights.
Redemption of Rights
At any time before the earlier to occur of:
- public disclosure that a person or group, other than GenAmerica, MetLife
and certain related persons, has become the beneficial owner of
securities representing 20% or more of the voting power of our common
stock; or
- our determination that a person or group, other than GenAmerica, MetLife
and certain related persons, has become the beneficial owner of
securities representing 20% or more of the voting power of our common
stock,
our board of directors may redeem all the rights at a redemption price of
$0.0067 per right, subject to adjustment. The right to exercise the rights, as
described above under "-- Exercisability of Rights," will terminate upon
redemption, and at such time, the holders of the rights will have the right to
receive only the redemption price for each right held.
Amendment of Rights Agreement
At any time before a person or group, other than GenAmerica, MetLife and
certain related persons, has become the beneficial owner of securities
representing 20% or more of the voting power of our common stock, we may amend
any or all of the terms of the rights and the rights agreement without your
consent. However, if at any time after a person or group, other than GenAmerica,
MetLife and certain related persons, beneficially owns securities representing
20% or more, or such lower percentage as may be amended in the rights agreement,
of the voting power of our common stock, our board of directors may not adopt
amendments to the rights agreement that adversely affect the interests of
holders of the rights.
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Termination of Rights
If not previously exercised, the rights will expire on April 15, 2003,
unless we earlier redeem or exchange the rights or extend the final expiration
date.
Anti-takeover Effects
The rights have certain anti-takeover effects. Once the rights have become
exercisable, the rights will cause substantial dilution to a person or group
that attempts to acquire or merge with us in certain circumstances. Accordingly,
the existence of the rights may deter potential acquirors from making a takeover
proposal or tender offer. The rights should not interfere with any merger or
other business combination approved by our board of directors because we may
redeem the rights as described above and because a transaction approved by our
board of directors would not cause the rights to become exercisable.
SERIES A PREFERRED STOCK
In connection with the creation of the rights, as described above, our
board has authorized the issuance of 500,000 shares of preferred stock as Series
A junior participating preferred stock.
We have designed the dividend, liquidation, voting and redemption features
of the Series A preferred stock so that the value of one two hundred twenty
fifth (1/225th) of a share of Series A preferred stock approximates the value of
one share of common stock. Shares of Series A preferred stock may only be
purchased after the rights have become exercisable, and each share of the Series
A preferred stock:
- is nonredeemable and junior to all other series of preferred stock,
unless otherwise provided in the terms of those series of preferred
stock;
- will have a preferential dividend in an amount equal to the greater of
$1.00 and 225 times any dividend declared on each share of common stock;
- in the event of liquidation, will entitle its holder to (1) receive a
preferred liquidation payment equal to $100, plus the amount of any
accrued and unpaid dividends, and (2) following payment of a specified
amount to the holders of the common stock, to participate in any further
distributions of the RGA's remaining assets;
- will have 225 votes, voting together with our common stock and any other
capital stock with general voting rights; and
- in the event of any merger, consolidation or other transaction in which
shares of common stock are converted or exchanged, will be entitled to
receive 225 times the amount and type of consideration received per
share of common stock.
The rights of the Series A preferred stock as to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
CERTAIN CHARTER AND BYLAW PROVISIONS
Our articles of incorporation and bylaws:
- provide for a classified board of directors;
- limit the right of shareholders to remove directors or change the size
of the board of directors;
- limit the right of shareholders to fill vacancies on the board of
directors;
- limit the right of shareholders to act by written consent and to call a
special meeting of shareholders or propose other actions;
- require a higher percentage of shareholders than would otherwise be
required to amend, alter, change, or repeal the provisions of our
articles of incorporation and bylaws; and
- provide that the bylaws may be amended only by the majority vote of the
board of directors.
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Shareholders will not be able to amend the bylaws without first amending
the articles of incorporation. These provisions may discourage certain types of
transactions that involve an actual or threatened change of control of RGA.
Since the terms of our articles of incorporation and bylaws may differ from the
general information we are providing, you should only rely on the actual
provisions of our articles of incorporation and bylaws. If you would like to
read our articles of incorporation and bylaws, they are on file with the SEC or
you may request a copy from us.
Size of Board
Our articles of incorporation provide that the number of directors to
constitute the board of directors is ten, and hereafter the number of directors
will be fixed from time to time as provided in our bylaws. Our bylaws provide
for a board of directors of at least three directors and permit the board of
directors to increase the number of directors. In accordance with our bylaws,
our board of directors has fixed the number of directors at ten. One of our
directors, William P. Stiritz, resigned in October 2001, creating one vacancy on
our board. Our articles of incorporation further provide that our bylaws may be
amended only by majority vote of our entire board of directors.
Election of Directors
In order for one of our shareholders to nominate a candidate for director,
our articles of incorporation require that such shareholder give timely notice
to us in advance of the meeting. Ordinarily, the shareholder must give notice
not less than 60 days nor more than 90 days before the meeting, but if we give
less than 70 days' notice of the meeting, then the shareholder must give notice
within ten days after we mail notice of the meeting or make a public disclosure
of the meeting. The notice must describe various matters regarding the nominee,
including the nominee's name, address, occupation, and shares held. Our articles
of incorporation do not permit cumulative voting in the election of directors.
Accordingly, the holders of a majority of the then outstanding shares of common
stock can elect all the directors of the class then being elected at that
meeting of shareholders.
Classified Board
Our articles of incorporation and bylaws provide that our board will be
divided into three classes, with the classes to be as nearly equal in number as
possible, and that one class shall be elected each year and serve for a
three-year term.
Removal of Directors
Missouri law provides that, unless a corporation's articles of
incorporation provide otherwise, the holders of a majority of the corporation's
voting stock may remove any director from office. Our articles of incorporation
provide that shareholders may remove a director only "for cause" and with the
approval of the holders of 85% of RGA's voting stock.
Filling Vacancies
Missouri law further provides that, unless a corporation's articles of
incorporation or bylaws provide otherwise, all vacancies on a corporation's
board of directors, including any vacancies resulting from an increase in the
number of directors, may be filled by the vote of a majority of the remaining
directors even if that number is less than a quorum. Our articles of
incorporation provide that, subject to the rights, if any, of the holders of any
class of preferred stock then outstanding and except as described below, only
the vote of a majority of the remaining directors may fill vacancies.
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Limitations on Shareholder Action by Written Consent
As required by Missouri law, our bylaws provide that any action by written
consent of shareholders in lieu of a meeting must be unanimous.
Limitations on Calling Shareholder Meetings
Under our articles of incorporation shareholders may not call special
meetings of shareholders or require our board to call a special meeting of
shareholders, and only a majority of our entire board of directors, our chairman
of the board or our President may call a special meeting of shareholders.
Limitations on Proposals of Other Business
In order for a shareholder to bring a proposal before a shareholder
meeting, our articles of incorporation require that the shareholder give timely
notice to us in advance of the meeting. Ordinarily, the shareholder must give
notice at least 60 days but not more than 90 days before the meeting, but if we
give less than 70 days' notice of the meeting, then the shareholder must give
notice within ten days after we mail notice of the meeting or make other public
disclosure of the meeting. The notice must include a description of the
proposal, the reasons for the proposal, and other specified matters.
Our board may reject any proposals that have not followed these procedures
or that are not a proper subject for shareholder action in accordance with the
provisions of applicable law.
Anti-Takeover Effects of Provisions
The classification of directors, the inability to vote shares cumulatively,
the advance notice requirements for nominations, and the provisions in our
articles of incorporation that limit the ability of shareholders to increase the
size of our board or to remove directors and that permit the remaining directors
to fill any vacancies on our board make it more difficult for shareholders to
change the composition of our board. As a result, at least two annual meetings
of shareholders may be required for the shareholders to change a majority of the
directors, whether or not a change in our board would benefit RGA and its
shareholders and whether or not a majority of our shareholders believes that the
change would be desirable.
The provision of our bylaws which requires unanimity for shareholder action
by written consent gives all our shareholders entitled to vote on a proposed
action the opportunity to participate in the action and prevents the holders of
a majority of the voting power of RGA from using the written consent procedure
to take shareholder action. The bylaw provision requiring advance notice of
other proposals may make it more difficult for shareholders to take action
opposed by the board. Moreover, a shareholder cannot force a shareholder
consideration of a proposal over the opposition of our board of directors by
calling a special meeting of shareholders.
These provisions make it more difficult and time-consuming to obtain
majority control of our board of directors or otherwise bring a matter before
shareholders without our board's consent, and thus reduce the vulnerability of
RGA to an unsolicited takeover proposal. These provisions enable RGA to develop
its business in a manner which will foster its long-term growth, by reducing to
the extent practicable the threat of a takeover not in the best interests of RGA
and its shareholders and the potential disruption entailed by the threat. On the
other hand, these provisions may adversely affect the ability of shareholders to
influence the governance of RGA and the possibility that shareholders would
receive a premium above market price for their securities from a potential
acquirer who is unfriendly to management.
MISSOURI STATUTORY PROVISIONS
Missouri law also contains certain provisions which may have an
anti-takeover effect and otherwise discourage third parties from effecting
transactions with us, including control share acquisition and business
combination statutes.
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Business Combination Statute
Missouri law contains a "business combination statute" which restricts
certain "business combinations" between us and an "interested shareholder," or
affiliates of the interested shareholder, for a period of five years after the
date of the transaction in which the person becomes an interested shareholder,
unless either such transaction or the interested shareholder's acquisition of
stock is approved by our board on or before the date the interested shareholder
obtains such status.
The statute also prohibits business combinations after the five-year period
following the transaction in which the person becomes an interested shareholder
unless the business combination or purchase of stock prior to becoming an
interested shareholder is approved by our board prior to the date the interested
shareholder obtains such status.
The statute also provides that, after the expiration of such five year
period, business combinations are prohibited unless:
- the holders of a majority of the outstanding voting stock, other than
the stock owned by the interested shareholder, approve the business
combination; or
- the business combination satisfies certain detailed fairness and
procedural requirements.
A "business combination" includes a merger or consolidation, some sales,
leases, exchanges, pledges and similar dispositions of corporate assets or stock
and any reclassifications or recapitalizations that increase the proportionate
voting power of the interested shareholder. An "interested shareholder"
generally means any person who, together with his or her affiliates and
associates, owns or controls 20% or more of the outstanding shares of the
corporation's voting stock.
A Missouri corporation may opt out of coverage by the business combination
statute by including a provision to that effect in its governing corporate
documents. We have not done so. However, our board of directors adopted a
resolution approving the acquisition of beneficial ownership by MetLife as an
"interested shareholder," thereby rendering the statute inapplicable to MetLife.
The business combination statute may make it more difficult for a 20%
beneficial owner to effect other transactions with us and may encourage persons
that seek to acquire us to negotiate with our board prior to acquiring a 20%
interest. It is possible that such a provision could make it more difficult to
accomplish a transaction which shareholders may otherwise deem to be in their
best interest.
Control Share Acquisition Statute
Missouri also has a "control share acquisition statute." This statute may
limit the rights of a shareholder to vote some or all of his shares. A
shareholder whose acquisition of shares results in that shareholder having
voting power, when added to the shares previously held by him, to exercise or
direct the exercise of more than a specified percentage of our outstanding stock
(beginning at 20%), will lose the right to vote some or all of his shares in
excess of such percentage unless the shareholders approve the acquisition of
such shares.
In order for the shareholders to grant approval, the acquiring shareholder
must meet certain disclosure requirements specified in the statute. In addition,
a majority of the outstanding voting shares, as determined before the
acquisition, must approve the acquisition. Furthermore, a majority of the
outstanding voting shares, as determined after the acquisition, but excluding
shares held by the acquiring shareholder or employee directors and officers,
must approve the acquisition.
Not all acquisitions of shares constitute control share acquisitions. The
following acquisitions do not constitute control share acquisitions:
- good faith gifts;
- transfers in accordance with wills;
- purchases made in connection with an issuance by us;
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- purchases by any compensation or benefit plan;
- the conversion of debt securities;
- mergers involving us which satisfy the other requirements of the General
and Business Corporation Law of Missouri;
- transactions with a person who owned a majority of our voting power
within the prior year, or
- purchases from a person who previously satisfied the requirements of the
control share statute, so long as the acquiring person does not have
voting power after the ownership in a different ownership range than the
selling shareholder.
A Missouri corporation may opt out of coverage by the control share
acquisition statute by including a provision to that effect in its governing
corporate documents. We recently amended our bylaws to opt out of the control
share acquisition statute.
Take-Over Bid Disclosure Statute
Missouri's "take-over bid disclosure statute" requires that, under some
circumstances, before making a tender offer that would result in the offeror
acquiring control of us, the offeror must file certain disclosure materials with
the Commissioner of the Missouri Department of Securities.
Insurance Holding Companies Act
We are regulated in Missouri as an insurance holding company. Under the
Missouri Insurance Holding Companies Act and related regulations, the
acquisition of control of a domestic insurer must receive prior approval by the
Missouri Department of Insurance. Missouri law provides that a transaction will
be approved if the Department of Insurance finds that the transaction would,
among other things, not violate the law or be contrary to the interests of the
insureds of any participating domestic insurance corporations. The Department of
Insurance may approve any proposed change of control subject to conditions.
DESCRIPTION OF DEPOSITARY SHARES OF RGA
The description of any deposit agreement and any related depositary shares
and depositary receipts in this prospectus and in any prospectus supplement of
certain provisions are summaries of the material provisions of that deposit
agreement and of the depositary shares and depositary receipts. These
descriptions do not restate those agreements and do not contain all of the
information that you may find useful. We urge you to read the applicable
agreements because they, and not the summaries, define your rights as a holder
of the depositary shares. For more information, please review the form of
deposit agreement and form of depositary receipts relating to each series of the
preferred stock, which will be filed with the SEC promptly after the offering of
that series of preferred stock and will be available as described under the
heading "Where You Can Find More Information" on page 3.
GENERAL
We may elect to have shares of preferred stock represented by depositary
shares. The shares of any series of the preferred stock underlying the
depositary shares will be deposited under a separate deposit agreement between
us and a bank or trust company we select. The prospectus supplement relating to
a series of depositary shares will set forth the name and address of this
preferred stock depositary. Subject to the terms of the deposit agreement, each
owner of a depositary share will be entitled, proportionately, to all the
rights, preferences and privileges of the preferred stock represented by such
depositary share, including dividend, voting, redemption, conversion, exchange
and liquidation rights.
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The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the preferred stock
described in the applicable prospectus supplement.
A holder of depositary shares will be entitled to receive the shares of
preferred stock, but only in whole shares of preferred stock, underlying those
depositary shares. If the depositary receipts delivered by the holder evidence a
number of depositary shares in excess of the whole number of shares of preferred
stock to be withdrawn, the depositary will deliver to that holder at the same
time a new depositary receipt for the excess number of depositary shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The preferred stock depositary will distribute all cash dividends or other
cash distributions in respect of the series of preferred stock represented by
the depositary shares to the record holders of depositary receipts in
proportion, to the extent possible, to the number of depositary shares owned by
those holders. The depositary, however, will distribute only the amount that can
be distributed without attributing to any depositary share a fraction of one
cent, and any undistributed balance will be added to and treated as part of the
next sum received by the depositary for distribution to record holders of
depositary receipts then outstanding.
If there is a distribution other than in cash in respect of the preferred
stock, the preferred stock depositary will distribute property received by it to
the record holders of depositary receipts in proportion, insofar as possible, to
the number of depositary shares owned by those holders, unless the preferred
stock depositary determines that it is not feasible to make such a distribution.
In that case, the preferred stock depositary may, with our approval, adopt any
method that it deems equitable and practicable to effect the distribution,
including a public or private sale of the property and distribution of the net
proceeds from the sale to the holders.
The amount distributed in any of the above cases will be reduced by any
amount we or the preferred stock depositary are required to withhold on account
of taxes.
CONVERSION AND EXCHANGE
If any series of preferred stock underlying the depositary shares is
subject to provisions relating to its conversion or exchange as set forth in an
applicable prospectus supplement, each record holder of depositary receipts will
have the right or obligation to convert or exchange the depositary shares
evidenced by the depositary receipts pursuant to those provisions.
REDEMPTION OF DEPOSITARY SHARES
If any series of preferred stock underlying the depositary shares is
subject to redemption, the depositary shares will be redeemed from the proceeds
received by the preferred stock depositary resulting from the redemption, in
whole or in part, of the preferred stock held by the preferred stock depositary.
Whenever we redeem a share of preferred stock held by the preferred stock
depositary, the preferred stock depositary will redeem as of the same redemption
date a proportionate number of depositary shares representing the shares of
preferred stock that were redeemed. The redemption price per depositary share
will be equal to the aggregate redemption price payable with respect to the
number of shares of preferred stock underlying the depositary shares. If fewer
than all the depositary shares are to be redeemed, the depositary shares to be
redeemed will be selected by lot or proportionately as we may determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
redemption price. Any funds that we deposit with the preferred stock depositary
relating to depositary shares which are not redeemed by the holders of the
depositary shares will be returned to us after a period of two years from the
date the funds are deposited by us.
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VOTING
Upon receipt of notice of any meeting at which the holders of any shares of
preferred stock underlying the depositary shares are entitled to vote, the
preferred stock depositary will mail the information contained in the notice to
the record holders of the depositary receipts. Each record holder of the
depositary receipts on the record date, which will be the same date as the
record date for the preferred stock, may then instruct the preferred stock
depositary as to the exercise of the voting rights pertaining to the number of
shares of preferred stock underlying that holder's depositary shares. The
preferred stock depositary will try to vote the number of shares of preferred
stock underlying the depositary shares in accordance with the instructions, and
we will agree to take all reasonable action which the preferred stock depositary
deems necessary to enable the preferred stock depositary to do so. The preferred
stock depositary will abstain from voting the preferred stock to the extent that
it does not receive specific written instructions from holders of depositary
receipts representing the preferred stock.
RECORD DATE
Subject to the provisions of the deposit agreement, whenever
- any cash dividend or other cash distribution becomes payable,
- any distribution other than cash is made,
- any rights, preferences or privileges are offered with respect to the
preferred stock,
- the preferred stock depositary receives notice of any meeting at which
holders of preferred stock are entitled to vote or of which holders of
preferred stock are entitled to notice, or
- the preferred stock depositary receives notice of the mandatory
conversion of or any election by us to call for the redemption of any
preferred stock,
the preferred stock depositary will in each instance fix a record date, which
will be the same as the record date for the preferred stock, for the
determination of the holders of depositary receipts:
- who will be entitled to receive dividend, distribution, rights,
preferences or privileges or the net proceeds of any sale, or
- who will be entitled to give instructions for the exercise of voting
rights at any such meeting or to receive notice of the meeting or the
redemption or conversion.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of depositary receipts at the principal office of the
preferred stock depositary, upon payment of any unpaid amount due the preferred
stock depositary, and subject to the terms of the deposit agreement, the owner
of the depositary shares evidenced by the depositary receipts is entitled to
delivery of the number of whole shares of preferred stock and all money and
other property, if any, represented by the depositary shares. Partial shares of
preferred stock will not be issued. If the depositary receipts delivered by the
holder evidence a number of depositary shares in excess of the number of
depositary shares representing the number of whole shares of preferred stock to
be withdrawn, the preferred stock depositary will deliver to the holder at the
same time a new depositary receipt evidencing the excess number of depositary
shares. Holders of preferred stock that are withdrawn will not be entitled to
deposit the shares that have been withdrawn under the deposit agreement or to
receive depositary receipts.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
We and the preferred stock depositary may at any time agree to amend the
form of depositary receipt and any provision of the deposit agreement. However,
any amendment that materially and adversely alters the rights of holders of
depositary shares will not be effective unless the amendment has been approved
by the holders of at least a majority of the depositary shares then outstanding.
The deposit agreement may be terminated by us or by the preferred stock
depositary only if all outstanding shares have been redeemed or
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if a final distribution in respect of the underlying preferred stock has been
made to the holders of the depositary shares in connection with the liquidation,
dissolution or winding up of us.
CHARGES OF PREFERRED STOCK DEPOSITARY
We will pay all charges of the preferred stock depositary including charges
in connection with the initial deposit of the preferred stock, the initial
issuance of the depositary receipts, the distribution of information to the
holders of depositary receipts with respect to matters on which preference stock
is entitled to vote, withdrawals of the preferred stock by the holders of
depositary receipts or redemption or conversion of the preferred stock, except
for taxes (including transfer taxes, if any) and other governmental charges and
any other charges expressly provided in the deposit agreement to be at the
expense of holders of depositary receipts or persons depositing preferred stock.
MISCELLANEOUS
Neither we nor the preferred stock depositary will be liable if either of
us is prevented or delayed by law or any circumstance beyond our control in
performing any obligations under the deposit agreement. The obligations of the
preferred stock depositary under the deposit agreement are limited to performing
its duties under the agreement without negligence or bad faith. Our obligations
under the deposit agreement are limited to performing our duties in good faith.
Neither we nor the preferred stock depositary is obligated to prosecute or
defend any legal proceeding in respect of any depositary shares or preferred
stock unless satisfactory indemnity is furnished. We and the preferred stock
depositary may rely on advice of or information from counsel, accountants or
other persons that they believe to be competent and on documents that they
believe to be genuine.
The preferred stock depositary may resign at any time or be removed by us,
effective upon the acceptance by its successor of its appointment. If we have
not appointed a successor preferred stock depositary and the successor
depositary has not accepted its appointment within 60 days after the preferred
stock depositary delivered a resignation notice to us, the preferred stock
depositary may terminate the deposit agreement. See "-- Amendment and
Termination of the Deposit Agreement" above.
DESCRIPTION OF WARRANTS AND WARRANT UNITS OF RGA
We may issue warrants to purchase debt securities, common stock, preferred
stock or other securities. We may issue warrants independently or as part of a
unit with other securities, including, without limitation, preferred securities
issued by the RGA trusts. Warrants sold with other securities as a unit may be
attached to or separate from the other securities. We will issue warrants under
one or more warrant agreements between us and a warrant agent that we will name
in the applicable prospectus supplement.
The prospectus supplement relating to any warrants we are offering will
include specific terms relating to the offering, including a description of any
other securities sold together with the warrants. These terms will include some
or all of the following:
- the title of the warrants;
- the aggregate number of warrants offered;
- the price or prices at which the warrants will be issued;
- the currency or currencies, including composite currencies, in which the
prices of the warrants may be payable;
- the designation, number and terms of the debt securities, common stock,
preferred stock or other securities or rights, including rights to
receive payment in cash or securities based on the value, rate or price
of one or more specified commodities, currencies or indices, purchasable
upon exercise of the warrants and procedures by which those numbers may
be adjusted;
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- the exercise price of the warrants and the currency or currencies,
including composite currencies, in which such price is payable;
- the dates or periods during which the warrants are exercisable;
- the designation and terms of any securities with which the warrants are
issued as a unit;
- if the warrants are issued as a unit with another security, the date on
and after which the warrants and the other security will be separately
transferable;
- if the exercise price is not payable in U.S. dollars, the foreign
currency, currency unit or composite currency in which the exercise
price is denominated;
- any minimum or maximum amount of warrants that may be exercised at any
one time;
- any terms relating to the modification of the warrants; and
- any other terms of the warrants, including terms, procedures and
limitations relating to the transferability, exchange, exercise or
redemption of the warrants.
Warrants issued for securities other than our debt securities, common stock
or preferred stock will not be exercisable until at least one year from the date
of sale of the warrant.
The applicable prospectus supplement will describe the specific terms of
any warrant units.
The descriptions of the warrant agreements in this prospectus and in any
prospectus supplement are summaries of the material provisions of the applicable
agreements. These descriptions do not restate those agreements in their entirety
and do not contain all of the information that you may find useful. We urge you
to read the applicable agreements because they, and not the summaries, define
your rights as holders of the warrants or any warrant units. For more
information, please review the form of the relevant agreements, which will be
filed with the SEC promptly after the offering of warrants or warrant units and
will be available as described under the heading "Where You Can Find More
Information" above.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS OF RGA
As may be specified in a prospectus supplement, we may issue stock purchase
contracts obligating holders to purchase from us, and us to sell to the holders,
a number of shares of our common stock, preferred stock or depositary shares at
a future date or dates. The stock purchase contracts may require us to make
periodic payments to the holders of stock purchase contracts. These payments may
be unsecured or prefunded on some basis to be specified in the applicable
prospectus supplement. The stock purchase contracts may be issued separately or
as part of stock purchase units consisting of a stock purchase contract and an
underlying security that is pledged by the holder of a stock purchase contract
to secure its obligations under the stock purchase contract.
The prospectus supplement relating to any stock purchase contracts or stock
purchase units we are offering will specify the material terms of the stock
purchase contracts, the stock purchase units and any applicable pledge or
depository arrangements, including one or more of the following:
- The stated amount that a holder will be obligated to pay under the stock
purchase contract in order to purchase our common stock, preferred stock
or depositary shares, or the formula by which such amount shall be
determined.
- The settlement date or dates on which the holder will be obligated to
purchase shares of our common stock, preferred stock or depositary
shares. The prospectus supplement will specify whether the occurrence of
any events may cause the settlement date to occur on an earlier date and
the terms on which an early settlement would occur.
- The events, if any, that will cause our obligations and the obligations
of the holder under the stock purchase contract to terminate.
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- The settlement rate, which is a number that, when multiplied by the
stated amount of a stock purchase contract, determines the number of
shares of our common stock, preferred stock or depositary shares that we
will be obligated to sell and a holder will be obligated to purchase
under that stock purchase contract upon payment of the stated amount of
that stock purchase contract. The settlement rate may be determined by
the application of a formula specified in the prospectus supplement. If
a formula is specified, it may be based on the market price of our
common stock, preferred stock or depositary shares over a specified
period or it may be used on some other reference statistic.
- Whether the stock purchase contracts will be issued separately or as
part of stock purchase units consisting of a stock purchase contract and
an underlying security with an aggregate principal amount equal to the
stated amount. Any underlying securities will be pledged by the holder
to secure its obligations under a stock purchase contract.
- The type of underlying security, if any, that is pledged by the holder
to secure its obligations under a stock purchase contract. Underlying
securities may be our debt securities, depositary shares, preferred
securities, or debt obligations, or trust preferred securities of an RGA
trust.
- The terms of the pledge arrangement relating to any underlying
securities, including the terms on which distributions or payments of
interest and principal on any underlying securities will be retained by
a collateral agent, delivered to us or be distributed to the holder.
- The amount of the contract fee, if any, that may be payable by us to the
holder or by the holder to us, the date or dates on which the contract
fee will be payable and the extent to which we or the holder, as
applicable, may defer payment of the contract fee on those payment
dates. The contract fee may be calculated as a percentage of the stated
amount of the stock purchase contract or otherwise.
The descriptions of the stock purchase contracts, stock purchase units and
any applicable underlying security or pledge or depository arrangements in this
prospectus and in any prospectus supplement are summaries of the material
provisions of the applicable agreements. These descriptions do not restate those
agreements in their entirety. We urge you to read the applicable agreements
because they, and not the summaries, define your rights as holders of the stock
purchase contracts or stock purchase units. We will make copies of the relevant
agreements available as described under the heading "Where You Can Find More
Information" above.
DESCRIPTION OF PREFERRED SECURITIES OF THE RGA TRUSTS
Each RGA trust may issue, from time to time, one series of preferred
securities having terms described in the prospectus supplement. Preferred
securities may be issued either independently or as part of a unit with other
securities, including, without limitation, warrants to purchase common stock of
RGA. Preferred securities sold with other securities as a unit may be attached
to or separate from the other securities. The proceeds from the sale of each
trust's preferred and common securities will be used by such trust to purchase a
series of junior subordinated debt securities issued by RGA. The junior
subordinated debt securities will be held in trust by the trust's property
trustee for the benefit of the holders of such preferred and common securities.
Each amended and restated trust agreement has been or will be qualified as an
indenture under the Trust Indenture Act. The property trustee for each trust,
The Bank of New York, an independent trustee, will act as indenture trustee for
the preferred securities for purposes of compliance with the provisions of the
Trust Indenture Act. The preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights, maturity date or dates
and the other preferred, deferred or other special rights or restrictions as are
established by the administrative trustees in accordance with the applicable
amended and restated trust agreement or as are set forth in the amended and
restated trust agreement or made part of the amended and restated trust
agreement by the Trust Indenture Act. Such terms, rights and restrictions will
mirror the terms of the junior subordinated debt securities held by the
applicable trust and will be described in the applicable prospectus supplement.
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The prospectus supplement relating to the preferred securities of the
applicable RGA trust will provide specific terms, including:
- the distinctive designation of the preferred securities;
- the number of preferred securities issuable by the RGA trust;
- the annual distribution rate, or method of determining the rate, for
preferred securities issued by the RGA trust and the date or dates upon
which distributions will be payable; provided, however, that
distributions on the preferred securities will, subject to any deferral
provisions and any provisions for payment of defaulted distributions, be
payable on a quarterly basis to holders of the preferred securities as
of a record date in each quarter during which the preferred securities
are outstanding and any provisions relating to the resetting or
adjustment of the distribution rate;
- any right of the RGA trust to defer quarterly distributions on the
preferred securities as a result of an interest deferral right exercised
by us on the junior subordinated debt securities held by the RGA trust;
- whether distributions on preferred securities will be cumulative, and,
in the case of preferred securities having cumulative distribution
rights, the date or dates or method of determining the date or dates
from which distributions on preferred securities will be cumulative;
- the amount or amounts which will be paid out of the assets of the RGA
trust to the holders of preferred securities upon voluntary or
involuntary dissolution, winding-up or termination of the RGA trust;
- the obligation or option, if any, of the RGA trust to purchase or redeem
preferred securities and the price or prices at which, the period or
periods within which, and the terms and conditions upon which preferred
securities will be purchased or redeemed, in whole or in part, under
this obligation or option with the redemption price or formula for
determining the redemption price to be specified in the applicable
prospectus supplement;
- the voting rights, if any, of preferred securities in addition to those
required by law, including the number of votes per preferred security
and any requirement for the approval by the holders of preferred
securities as a condition to specified action or amendments to the
amended and restated trust agreement;
- the terms and conditions, if any, upon which junior subordinated debt
securities held by the RGA trust may be distributed to holders of
preferred securities;
- whether such preferred securities are convertible into our common stock,
and the terms of any such conversion, including whether we have the
option to convert such preferred securities into cash instead of common
stock;
- the title or designation and terms of any securities with which the
preferred securities are issued as a unit; and
- any other relevant terms, rights, preferences, privileges, limitations
or restrictions of preferred securities consistent with the amended and
restated trust agreement or applicable law.
All preferred securities offered by the prospectus will be guaranteed by us
to the extent set forth below under "Description of the Preferred Securities
Guarantees of RGA." The guarantee issued by us to each RGA trust, when taken
together with our obligations under the junior subordinated debt securities
issued to any RGA trust and under the applicable indenture and any applicable
supplemental indentures, and our obligations under each amended and restated
trust agreement, including the obligation to pay expenses of each RGA trust,
will provide a full and unconditional guarantee by us of amounts due on the
preferred securities issued by each RGA trust. The payment terms of the
preferred securities will be the same as the junior subordinated debt securities
issued to the applicable RGA trust by us.
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Each amended and restated trust agreement authorizes the administrative
trustees to issue on behalf of the applicable trust one series of common
securities having terms, including distributions, redemption, voting and
liquidation rights, and restrictions that are established by the administrative
trustees in accordance with the amended and restated trust agreement or that are
otherwise set forth in the amended and restated trust agreement. The terms of
the common securities issued by each RGA trust will be substantially identical
to the terms of the preferred securities issued by the RGA trust. The common
securities will rank equally, and payments will be made proportionately, with
the preferred securities of that trust. However, if an event of default under
the amended and restated trust agreement of the RGA trust has occurred and is
continuing, the cash distributions and liquidation, redemption and other amounts
payable on the common securities will be subordinated to the preferred
securities in right of payment. The common securities will also carry the right
to vote and to appoint, remove or replace any of the trustees of the RGA trust.
RGA will own, directly or indirectly, all of the common securities of each RGA
trust.
The financial statements of any RGA trust that issues preferred securities
will be reflected in our consolidated financial statements with the preferred
securities shown as company-obligated mandatorily-redeemable preferred
securities of a subsidiary trust under "minority interest." We will include in a
footnote to our audited financial statements, statements that the applicable RGA
trust is wholly-owned by us and that the sole asset of the RGA trust is the
junior subordinated debt securities, indicating the principal amount, interest
rate and maturity date of the junior subordinated debt securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If an event of default occurs, and is continuing, under the amended and
restated trust agreement of either RGA trust, the holders of the preferred
securities of that trust may rely on the property trustee to enforce its rights
as a holder of the subordinated debt securities against RGA. Additionally, those
who together hold a majority of the aggregate stated liquidation amount of an
RGA trust's preferred securities will have the right to:
- direct the time, method and place of conducting any proceeding for any
remedy available to the property trustee; or
- direct the exercise of any trust or power that the property trustee
holds under the amended and restated trust agreement, including the
right to direct the property trustee to exercise the remedies available
to it as a holder of the junior subordinated debt securities.
If such a default occurs and the event is attributable to RGA's failure to
pay interest or principal on the junior subordinated debt securities when due,
including any payment on redemption, and this debt payment failure is
continuing, a preferred securities holder of the trust may directly institute a
proceeding for the enforcement of this payment. Such a proceeding will be
limited, however, to enforcing the payment of this principal or interest only up
to the value of the aggregate liquidation amount of the holder's preferred
securities as determined after the due date specified in the applicable series
of junior subordinated debt securities. RGA will be subrogated to the holder's
rights under the applicable amended and restated trust agreement to the extent
of any payment it makes to the holder in connection with such a direct action,
and RGA may setoff against any such payment that it makes under the applicable
preferred securities guarantee.
The descriptions of the preferred securities in this prospectus and any
prospectus supplement are summaries of the material provisions of the applicable
amended and restated trust agreement. These descriptions do not restate those
agreements in their entirety. We urge you to read the applicable amended and
restated trust agreement because it, and not the summaries, defines your rights
as holders of the preferred securities. For more information, please review the
form of the applicable agreements, which will be filed with the SEC promptly
after the offering of preferred securities and will be available as described
under the heading "Where You Can Find More Information" above.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES OF RGA
Set forth below is a summary of information concerning the guarantees that
will be executed and delivered by us for the benefit of the holders, from time
to time, of preferred securities. Summaries of any other terms of any guarantee
that are issued will be set forth in the applicable prospectus supplement. Each
guarantee has been or will be qualified as an indenture under the Trust
Indenture Act. Unless otherwise specified in the applicable prospectus
supplement, The Bank of New York will act as the preferred securities guarantee
trustee. The terms of each guarantee will be set forth in the guarantee and will
include the terms made part of the guarantee by the Trust Indenture Act and will
be available as described under the heading "Where You Can Find More
Information" above. The following is a summary of the material terms of the
guarantees. You should refer to the provisions of the form of guarantee, a copy
of which has been or will be filed as an exhibit to the registration statement
of which this prospectus is a part, and the Trust Indenture Act. Each guarantee
will be held by the preferred securities guarantee trustee for the benefit of
the holders of the preferred securities of the applicable RGA trust.
Unless otherwise specified in the applicable prospectus supplement, we will
agree, to the extent set forth in each guarantee, to pay in full to the holders
of the preferred securities, the payments and distributions to be made with
respect to the preferred securities, except to the extent paid by the applicable
RGA trust, as and when due, regardless of any defense, right of set-off or
counterclaim which the RGA trust may have or assert. The following payments or
distributions with respect to the preferred securities, to the extent not paid
by the RGA trust and to the extent that such RGA trust has funds available for
these payments or distributions, will be subject to the guarantee:
- any accrued and unpaid distributions that are required to be paid on the
preferred securities;
- the redemption price for any preferred securities called for redemption
by the RGA trust; and
- upon a voluntary or involuntary dissolution, winding-up or termination
of the RGA trust, other than in connection with the distribution of
junior subordinated debt securities to the holders of preferred
securities in exchange for preferred securities or the redemption of all
of the preferred securities upon maturity or redemption of the
subordinated debt securities, the lesser of
(i) the sum of the liquidation amount and all accrued and unpaid
distributions on the preferred securities to the date of payment,
or
(ii) the amount of assets of the RGA trust remaining for distribution to
holders of the preferred securities in liquidation of the RGA
trust.
We may satisfy our obligation to make a guarantee payment by making a
direct payment of the required amounts to the holders of preferred securities or
by causing the applicable RGA trust to pay the amounts to the holders.
Each guarantee will not apply to any payment of distributions except to the
extent the applicable RGA trust has funds available to make the payment. If we
do not make interest or principal payments on the junior subordinated debt
securities purchased by the RGA trust, the RGA trust will not pay distributions
on the preferred securities issued by the RGA trust and will not have funds
available to make the payments.
COVENANTS OF RGA
Unless otherwise specified in the applicable prospectus supplement, in each
guarantee of the payment obligations of an RGA trust with respect to preferred
securities, we will covenant that, so long as any preferred securities issued by
the RGA trust remain outstanding, if there has occurred any event which would
constitute an event of default under the guarantee or under the amended and
restated trust agreement of the RGA trust, then we will not:
- declare or pay any dividend on, make any other distributions on, or
redeem, purchase, acquire or make a liquidation payment regarding, any
of our capital stock, except:
(1) purchases or acquisitions of our capital stock in connection with
the satisfaction of our obligations under any employee or agent
benefit plans or the satisfaction of our obligations
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under any contract or security outstanding on the date of the event
requiring us to purchase our capital stock;
(2) as a result of a reclassification of our capital stock or the
exchange or conversion of one class or series of our capital stock
for another class or series of our capital stock;
(3) the purchase of fractional interests in shares of our capital stock
in connection with the conversion or exchange provisions of our
capital stock or the security being converted or exchanged;
(4) dividends or distributions in our capital stock, or rights to
acquire our capital stock, or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock; or
(5) redemptions or repurchases of any rights outstanding under a
shareholder rights plan;
- make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by us which rank junior
to the subordinated debt securities issued to the applicable RGA trust;
and
- make any guarantee payments regarding the foregoing, other than under a
guarantee of the payment obligations of an RGA trust with respect to
preferred securities.
MODIFICATION OF THE GUARANTEES; ASSIGNMENT
Except for any changes that do not adversely affect the rights of holders
of preferred securities, in which case no consent of the holders will be
required, each guarantee of the payment obligations of an RGA trust with respect
to preferred securities may be amended only with the prior approval of the
holders of at least a majority in aggregate liquidation amount of the
outstanding preferred securities of the RGA trust. The manner of obtaining any
approval of holders of the preferred securities will be set forth in an
accompanying prospectus supplement. All guarantees and agreements contained in a
guarantee of the obligations of an RGA trust with respect to preferred
securities will bind the successors, assigns, receivers, trustees and
representatives of RGA and will inure to the benefit of the holders of the
preferred securities of the applicable RGA trust then outstanding.
EVENTS OF DEFAULT
An event of default under a preferred securities guarantee will occur upon
our failure to perform any of our payment or other obligations under the
guarantee. The holders of a majority in aggregate liquidation amount of the
preferred securities to which the preferred securities guarantee relates will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the preferred securities guarantee trustee with
respect to the guarantee or to direct the exercise of any trust or power
conferred upon the preferred securities guarantee trustee under the guarantee.
If we have failed to make a guarantee payment under a guarantee, a record
holder of preferred securities to which the guarantee relates may directly
institute a proceeding against us for enforcement of the guarantee for the
payment to the record holder of the preferred securities to which the guarantee
relates of the principal of or interest on the applicable subordinated debt
securities on or after the respective due dates specified in the junior
subordinated debt securities, and the amount of the payment will be based on the
holder's proportionate share of the amount due and owing on all of the preferred
securities to which the guarantee relates. We have waived any right or remedy to
require that any action be brought first against the applicable RGA trust or any
other person or entity before proceeding directly against us. The record holder
in the case of the issuance of one or more global preferred securities
certificates will be The Depository Trust Company, or its nominee, acting at the
direction of the beneficial owners of the preferred securities.
46
We will be required to provide annually to the preferred securities
guarantee trustee a statement as to the performance of our obligations under
each outstanding preferred securities guarantee and as to any default in our
performance.
TERMINATION
Each preferred securities guarantee will terminate as to the preferred
securities issued by the applicable RGA trust:
- upon full payment of the redemption price of all preferred securities of
the RGA trust;
- upon distribution of the junior subordinated debt securities held by the
RGA trust to the holders of all of the preferred securities of the RGA
trust; or
- upon full payment of the amounts payable in accordance with the amended
and restated trust agreement of the RGA trust upon termination and
liquidation of the RGA trust.
Each preferred securities guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of preferred
securities issued by the applicable RGA trust must restore payment of any sums
paid under the preferred securities or the preferred securities guarantee.
STATUS OF THE GUARANTEES
The preferred securities guarantees will constitute our unsecured
obligations and, unless otherwise indicated in an applicable prospectus
supplement, will rank as follows:
- subordinated and junior in right of payment to all of RGA's present and
future liabilities, including subordinated debt securities issued under
RGA's subordinated indenture and described above under "Description of
Debt Securities of RGA -- Subordination under the Subordinated Indenture
and the Junior Subordinated Indenture," except those liabilities made
equivalent by their terms;
- equivalently with:
(1) the most senior preferred or preference stock now or hereafter
issued by us and with any guarantee now or hereafter entered into by
us in respect of any preferred or preference stock of any of our
affiliates;
(2) the applicable junior subordinated debt securities; and
(3) any other liabilities or obligations made equivalent by their terms;
and
- senior to our common stock and any preferred or preference stock or
other liabilities made equivalent or subordinate by their terms.
The terms of the preferred securities provide that each holder of preferred
securities by acceptance of the preferred securities agrees to the subordination
provisions and other terms of our guarantee relating to the preferred
securities.
Each preferred securities guarantee will constitute a guarantee of payment
and not of collection. This means that the guaranteed party may institute a
legal proceeding directly against us to enforce its rights under the guarantee
without instituting a legal proceeding against any other person or entity.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE
The preferred securities guarantee trustee, before the occurrence of a
default under a preferred securities guarantee, undertakes to perform only the
duties that are specifically set forth in the guarantee and, after a default
under a guarantee, will exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to this
provision, the preferred securities guarantee trustee is under no obligation to
exercise any of the powers vested in it by a preferred securities
47
guarantee at the request of any holder of preferred securities to which the
guarantee relates unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred by the preferred securities
guarantee trustee in exercising any of its powers; but the foregoing shall not
relieve the trustee, upon the occurrence of an event of default under such
guarantee, from exercising the rights and powers vested in it by such guarantee.
EXPENSE AGREEMENT
We will, pursuant to an agreement as to expenses and liabilities entered
into by us and each RGA trust under its amended and restated trust agreement,
irrevocably and unconditionally guarantee to each person or entity to whom the
trust becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the trust, other than obligations of the trust to pay to the
holders of the preferred securities or other similar interests in the trust the
amounts due to the holders pursuant to the terms of the preferred securities or
other similar interests, as the case may be. Third party creditors of the trust
may proceed directly against us under the expense agreement, regardless of
whether they had notice of the expense agreement.
GOVERNING LAW
The preferred securities guarantees will be governed by and construed in
accordance with the internal laws of the State of New York.
EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES
AND THE PREFERRED SECURITIES GUARANTEES
As set forth in the amended and restated trust agreements of each RGA
trust, the sole purpose of the RGA trusts is to issue the preferred securities
and common securities evidencing undivided beneficial interests in the assets of
each of the trusts, and to invest the proceeds from such issuance and sale in
RGA's junior subordinated debt securities.
As long as payments of interest and other payments are made when due on the
junior subordinated debt securities held by the RGA trusts, such payments will
be sufficient to cover distributions and payments due on the preferred
securities and common securities because of the following factors:
- the aggregate principal amount of such junior subordinated debt
securities will be equal to the sum of the aggregate stated liquidation
amount of the preferred securities and common securities;
- the interest rate and the interest and other payment dates on such
junior subordinated debt securities will match the distribution rate and
distribution and other payment dates for the preferred securities;
- RGA shall pay, and the trusts shall not be obligated to pay, directly or
indirectly, all costs, expenses, debt, and obligations of the trusts,
other than with respect to the preferred securities and common
securities; and
- the amended and restated trust agreement of each trust will further
provide that the trustees shall not take or cause or permit the trust
to, among other things, engage in any activity that is not consistent
with the purposes of the applicable trust.
Payments of distributions, to the extent funds for such payments are
available, and other payments due on the preferred securities, to the extent
funds for such payments are available, are guaranteed by RGA as and to the
extent set forth under "Description of the Preferred Securities Guarantees of
RGA." If RGA does not make interest payments on the junior subordinated debt
securities purchased by the applicable trust, it is expected that the applicable
trust will not have sufficient funds to pay distributions on the preferred
securities and the preferred securities guarantee will not apply, since the
preferred securities guarantee covers the payment of distributions and other
payments on the preferred securities only if and to the extent that RGA has made
a payment of interest or principal on the junior subordinated debt
48
securities held by the applicable trust as its sole asset. However, the
preferred securities guarantee, when taken together with RGA's obligations under
the junior subordinated debt securities and the junior subordinated indenture
and its obligations under the respective amended and restated trust agreements,
including its obligations to pay costs, expenses, debts and liabilities of the
trust, other than with respect to the preferred securities and common
securities, provide a full and unconditional guarantee, on a subordinated basis,
by RGA of amounts due on the preferred securities.
If RGA fails to make interest or other payments on the junior subordinated
debt securities when due, taking account of any extension period, the amended
and restated trust agreement provide a mechanism whereby the holders of the
preferred securities affected thereby, using the procedures described in any
accompanying prospectus supplement, may direct the property trustee to enforce
its rights under the junior subordinated debt securities. If a debt payment
failure has occurred and is continuing, a holder of preferred securities may
institute a direct action for payment after the respective due date specified in
the junior subordinated debt securities. In connection with such direct action,
RGA will be subrogated to the rights of such holder of preferred securities
under the amended and restated trust agreement to the extent of any payment made
by RGA to such holder of preferred securities in such direct action. RGA, under
the guarantee, acknowledges that the guarantee trustee shall enforce the
guarantee on behalf of the holders of the preferred securities. If RGA fails to
make payments under the guarantee, the guarantee provides a mechanism whereby
the holders of the preferred securities may direct the trustee to enforce its
rights thereunder. Any holder of preferred securities may institute a legal
proceeding directly against RGA to enforce the guarantee trustee's rights under
the guarantee without first instituting a legal proceeding against the trust,
the guarantee trustee, or any other person or entity.
RGA and each of the RGA trusts believe that the above mechanisms and
obligations, taken together, provide a full and unconditional guarantee by RGA
on a subordinated basis of payments due on the preferred securities. See
"Description of the Preferred Securities Guarantees of RGA."
Upon any voluntary or involuntary termination, winding-up or liquidation of
an RGA trust involving the liquidation of the junior subordinated debt
securities, the holders of the preferred securities will be entitled to receive,
out of assets held by such RGA trust, the liquidation distribution in cash. Upon
our voluntary or involuntary liquidation or bankruptcy, the property trustee, as
holder of the junior subordinated debt securities, would be a subordinated
creditor of ours. Therefore, the property trustee would be subordinated in right
of payment to all of our senior and subordinated debt, but is entitled to
receive payment in full of principal and interest before any of our shareholders
receive payments or distributions. Since we are the guarantor under the
preferred securities guarantees and have agreed to pay for all costs, expenses
and liabilities of the RGA trusts other than the obligations of the trusts to
pay to holders of the preferred securities the amounts due to the holders
pursuant to the terms of the preferred securities, the positions of a holder of
the preferred securities and a holder the junior subordinated debt securities
relative to our other creditors and to our shareholders in the event of
liquidation or bankruptcy are expected to be substantially the same.
PLAN OF DISTRIBUTION
We or any RGA trust may sell any of the securities being offered by this
prospectus in any one or more of the following ways from time to time:
- through agents;
- to or through underwriters;
- through dealers; and
- directly by us to purchasers.
The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
49
Agents designated by us or the applicable RGA trust may solicit offers to
purchase the securities from time to time. The prospectus supplement will name
any such agent involved in the offer or sale of the securities and will set
forth any commissions payable by us or the applicable RGA trust to such agent.
Unless otherwise indicated in such prospectus supplement, any such agent will be
acting on a reasonable best efforts basis for the period of its appointment. Any
such agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the securities so offered and sold.
If the securities are sold by means of an underwritten offering, we and the
applicable RGA trust will execute an underwriting agreement with an underwriter
or underwriters at the time an agreement for such sale is reached. A prospectus
supplement will be used by the underwriters to make resales of the securities to
the public and will set forth the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transaction, including commissions, discounts and any other compensation of the
underwriters and dealers, if any. If underwriters are utilized in the sale of
the securities, the securities will be acquired by the underwriters for their
own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriter at the time of sale. The securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters or directly by the managing underwriters. If any
underwriter or underwriters are utilized in the sale of the securities, unless
otherwise indicated in the prospectus supplement, the underwriting agreement
will provide that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters will be obligated to purchase all
such securities if any are purchased.
If a dealer is utilized in the sale of the securities, we or the applicable
RGA trust will sell such securities to the dealer as principal. The dealer may
then resell such securities to the public at varying prices to be determined by
such dealer at the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act, of the securities so
offered and sold. The prospectus supplement will set forth the name of the
dealer and the terms of the transaction.
We or the applicable RGA trust may directly solicit offers to purchase the
securities and may sell such securities directly to institutional investors or
others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The prospectus supplement
will describe the terms of any such sales.
We or the applicable RGA trust may determine the price or other terms of
the securities offered under this prospectus by use of an electronic auction. We
will describe how any auction will determine the price or any other terms, how
potential investors may participate in the auction and nature of the
underwriters' obligations in the related supplement to this prospectus.
Agents, underwriters and dealers may be entitled under relevant agreements
with us or the applicable RGA trust to indemnification by us or the applicable
RGA trust against certain liabilities, including liabilities under the
Securities Act, or to any contribution with respect to payments which such
agents, underwriters and dealers may be required to make.
Each series of securities will be a new issue with no established trading
market, other than the common stock which is listed on the New York Stock
Exchange. Any common stock sold pursuant to a prospectus supplement will be
listed on such exchange, subject to official notice of issuance. We may elect to
list any series of debt securities, preferred stock, depositary shares,
warrants, stock purchase contracts or stock purchase units on an exchange, and
the applicable RGA trust may elect to list any series of preferred securities on
an exchange, but neither we nor the trusts will be obligated to do so. It is
possible that one or more underwriters may make a market in a series of the
securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, we can give no assurance as to the
liquidity of the trading market for the securities.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, us and our subsidiaries or an RGA
trust in the ordinary course of business.
50
The securities may also be offered and sold, if so indicated in the
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms, which we refer to as "remarketing firms," acting as
principals for their own accounts or as agents for us or the applicable RGA
trust. The prospectus supplement will identify any remarketing firm and will
describe the terms of its agreement, if any, with us or the applicable RGA trust
and its compensation. Remarketing firms may be deemed to be underwriters, as
such term is defined in the Securities Act, in connection with the securities
remarketed thereby. Under agreements which may be entered into with us or the
applicable RGA trust, we or the applicable RGA trust may be required to provide
indemnification or contribution to remarketing firms against certain civil
liabilities, including liabilities under the Securities Act. Remarketing firms
may also be customers of, engage in transactions with or perform services for us
and our subsidiaries or an RGA trust in the ordinary course of business.
If so indicated in the applicable prospectus supplement, we or the
applicable RGA trust may authorize agents, underwriters or dealers to solicit
offers by certain institutions to purchase the securities from us or the
applicable RGA trust at the public offering prices set forth in the applicable
prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date or dates. The applicable prospectus
supplement will indicate the commission to be paid to underwriters, dealers and
agents soliciting purchases of the securities pursuant to contracts accepted by
us or the applicable RGA trust.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, James
E. Sherman, Esq., General Counsel and Secretary of RGA, will issue an opinion
about the legality of the common stock, preferred stock, depositary shares,
warrants, stock purchase contracts and stock purchase units of RGA under
Missouri law, and Bryan Cave LLP, St. Louis, Missouri, will issue an opinion
about the legality of the debt securities of RGA and the preferred securities
guarantees of RGA. Mr. Sherman is paid a salary by RGA, is a participant in
various employee benefit plans offered by RGA to employees of RGA generally and
owns and has options to purchase shares of RGA common stock. John C. Danforth, a
partner of Bryan Cave LLP, is on the Board of Directors of MetLife and two of
its subsidiaries, General American Life Insurance Company and GenAmerica
Financial Corporation, which are, collectively, our majority shareholder. Unless
otherwise indicated in the applicable prospectus supplement, Richards, Layton &
Finger, P.A., our special Delaware counsel, will issue an opinion about the
legality of the trust preferred securities.
EXPERTS
The consolidated financial statements and the related financial statement
schedules as of and for the year ended December 31, 2000 incorporated in this
prospectus by reference from RGA's Annual Report on Form 10-K for the year ended
December 31, 2000 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
The consolidated financial statements and the related financial statement
schedules as of December 31, 1999, and for the two-year period ended December
31, 1999, included or incorporated by reference in RGA's Annual Report on Form
10-K for the year ended December 31, 2000, incorporated by reference in this
prospectus, have been incorporated by reference herein in reliance on the
reports of KPMG LLP, given on the authority of that firm as experts in
accounting and auditing.
51
$200,000,000
[RGA LOGO]
6 3/4% SENIOR NOTES DUE 2011
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PROSPECTUS SUPPLEMENT
DECEMBER 12, 2001
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BANC OF AMERICA SECURITIES LLC
LEHMAN BROTHERS
BNY CAPITAL MARKETS, INC.
FLEET SECURITIES, INC.
A.G. EDWARDS & SONS, INC.
LOGO