SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 11-K
X Annual Report Pursuant to Section 15(d) of the
--- Securities Exchange Act of 1934 (Fee Required)
or
Transition Report Pursuant to Section 15(d) of
--- the Securities Exchange Act of 1934(no fee required)
for the transition period from to .
--------- ----------
For the fiscal year ended December 31, 2000
Commission file number 1-10898
------------------------------
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
THE ST. PAUL COMPANIES, INC.
385 WASHINGTON STREET
ST. PAUL MINNESOTA 55102
(Full title of the Plan and address of the Plan)
------------------------------
THE ST. PAUL COMPANIES, INC.
385 WASHINGTON STREET
ST. PAUL, MINNESOTA 55102
(Name and address of principal executive
offices of the issuer of the securities)
-------------------------------
REQUIRED INFORMATION
--------------------
The St. Paul Companies, Inc. Savings Plus Plan (the "Plan") is subject
to the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and for purposes of satisfying the
requirements of Form 11-K has included for filing herewith the Plan
financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA.
Financial Statements and Schedules Page
---------------------------------- ----
Independent Auditors' Report . . . . . . . . . . . 3
Statements of Net Assets Available
for Plan Benefits . . . . . . . . . . . . . . . . 4
Statements of Changes in Net Assets
Available for Plan Benefits . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . 6-14
Form 5500, Schedule H, Part 4i
Schedule of Assets Held for Investment Purposes . 15
INDEPENDENT AUDITORS' REPORT
------------------------------
The Plan Administrative Committee and Plan Participants
The St. Paul Companies, Inc. Savings Plus Plan:
We have audited the accompanying statements of net assets
available for plan benefits of The St. Paul Companies, Inc.
Savings Plus Plan (the Plan) as of December 31, 2000 and 1999,
and the related statements of changes in net assets available for
plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's administrator.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of The St. Paul Companies, Inc.
Savings Plus Plan as of December 31, 2000 and 1999, and the
changes in the net assets available for plan benefits for the
years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedule of assets held for investment purposes is
presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is
supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibilty of the Plan's
adminstrator. The supplemental schedule has been subjected to
the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements
taken as a whole.
/s/ KPMG LLP
--------
KPMG LLP
Minneapolis, Minnesota
June 1, 2001
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2000 and 1999
2000 1999
------------ ------------
Assets:
Investments:
Common stock of The St.Paul
Companies, Inc. $ 94,186,945 * $ 76,240,708 *
Fidelity U.S. Bond Index Fund 77,441,617 * 83,914,534 *
Fidelity Puritan Fund 78,222,716 * 96,999,929 *
Fidelity U.S. Equity Index
Commingled Pool 97,463,785 * 120,599,493 *
Fidelity Blue Chip Growth Fund 176,210,368 * 216,859,354 *
F&G Life Insurance Company
Investment Contract 35,216,208 38,811,736 *
Fidelity Diversified International
Fund 30,390,259 26,960,985
Fidelity Retirement Money Market
Portfolio 27,217,912 22,125,891
Fidelity Equity-Income Fund 33,401,315 29,123,270
Franklin Small Cap Growth Fund A 41,780,253 * 26,228,507
Neuberger Berman Genesis Fund 10,592,708 4,759,129
Participant loans 16,619,071 21,149,606
Short-term investments 2,017,399 3,307,755
------------ ------------
Total investments 720,760,556 767,080,897
Receivables:
Accrued dividends 470,763 595,056
Other 545,238 854,181
------------ ------------
Total assets 721,776,557 768,530,134
------------ ------------
Liabilities:
Forfeitures and other 437,194 432,822
------------ ------------
Total liabilities 437,194 432,822
------------ ------------
Net assets available for plan benefits $721,339,363 $768,097,312
============ ============
*Investment represents 5 percent or more of the Plan's net assets
available for plan benefits.
See accompanying notes to financial statements.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years Ended December 31, 2000 and 1999
2000 1999
----------- -----------
Additions:
Additions to net assets attributed to:
Contributions:
Participating companies
(salary conversion) $33,489,815 $38,853,018
Employer 581,182 -
Investment income:
Interest 4,851,298 5,115,557
Dividends 27,245,322 29,152,843
Net (depreciation)appreciation in
fair value of investments (7,421,305) 61,092,090
----------- -----------
Total investment income 24,675,315 95,360,490
Transfers from other plans 33,961,023 235,327,712
----------- -----------
Total additions 92,707,335 369,541,220
----------- -----------
Deductions:
Deductions from net assets attributed to:
Retirement and termination
Distribution benefits and withdrawals:
Paid to participants in cash 107,464,895 88,147,941
Common stock distributed,
at market value 3,106,771 2,488,832
Forfeitures 163,570 205,260
Administrative expenses 126,312 108,815
Transfers to other plans 28,603,736 -
----------- -----------
Total deductions 139,465,284 90,950,848
----------- -----------
Net (decrease) increase (46,757,949) 278,590,372
Net assets available for plan benefits:
Beginning of year 768,097,312 489,506,940
----------- -----------
End of year $721,339,363 $768,097,312
=========== ===========
See accompanying notes to financial statements.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
Note 1 Description of the Plan
General Provisions
------------------
The St. Paul Companies, Inc. Savings Plus Plan (the Plan) is a
defined contribution plan which provides retirement and other
benefits to eligible employees of participating companies. The St.
Paul Companies, Inc. (the Company) and its subsidiaries, St. Paul
Fire and Marine Insurance Company, St. Paul Reinsurance Management
Corporation and Fidelity and Guaranty Life Insurance Company (F&G
Life), Management Science Associates, Inc. and The MMI Group, Inc.
currently participate in the Plan. The Company has appointed the
Administrative Committee as the Plan Administrator and the Benefit
Plans Investment Committee as the delegated authority for management
and control of the assets of the Plan (including the designation of
investment funds). Fidelity Management Trust Company is the trustee
for the trust maintained in connection with the Plan.
The following brief description of the Plan is provided for general
information purposes. Participants should refer to the Plan document
and the employee benefits program manual for more complete
information.
Participation, Vesting and Forfeitures
--------------------------------------
All employees of participating companies, as defined by the Plan, are
eligible to participate immediately upon employment. Participants
are 100% vested in their contributions and related earnings.
Participants become vested in pre-1999 Company contributions at the
rate of 20% after two years of service, increasing 20% per year of
additional service and are 100% vested after six years of service.
Participants are immediately vested in post-1998 Company
contributions. Nonvested Company contributions are forfeited by
terminating participants. Forfeitures can be used to restore
accounts, pay Plan administrative expenses or offset Company
contributions or salary conversion contributions. Upon termination
of the Plan or change in control of the Company, participant account
balances would vest in full.
Merger
------
On April 18, 2000, the Company completed a merger with the MMI
Companies, Inc. and subsidiaries, and effective July 1, 2000 the MMI
Companies, Inc. Savings & Profit Sharing Plan (401(k)), was merged
into the Plan.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 1 Description of the Plan (continued)
Contributions
-------------
Participants elect to have their employer make salary conversion
(pretax) contributions to the Plan on their behalf under Section
401(k) of the Internal Revenue Code. Salary conversion contributions
are currently limited to 15% of employees' annual base salary to an
annual maximum of $10,500.
Participating companies make matching contributions of one dollar for
every dollar of participant salary conversion contributions up to 4%
of their base salary. This matching contribution is made in the form
of The St. Paul Companies, Inc. Preferred Stock and is invested in
The St. Paul Companies, Inc. Stock Ownership Plan.
A company contribution of approximately $581 thousand was made to the
Plan on July 18, 2000 by the MMI Companies, Inc., which was related
to employee contributions made to the MMI Companies, Inc. Savings and
Profit Sharing Plan (401(k)) through June 30, 2000.
Investment Funds
----------------
The Plan currently calls for the maintenance of eleven separate
investment funds as described below:
St. Paul Common Stock Fund
--------------------------
The St. Paul Common Stock Fund is invested in shares of common stock
of The St. Paul Companies, Inc., up to a maximum of 10% of the
Company's outstanding common stock, with a small portion held in
short-term investments.
F&G Life Stable Interest Fund
-----------------------------
The F&G Life Stable Interest Fund, first available in 1999, is
invested in an investment contract with Fidelity & Guaranty Life
Insurance Company which preserves principal and also provides a fixed
interest rate which is determined each year. Neither principal nor
interest under this contract is guaranteed or insured by the U.S.
Government.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 1 Description of the Plan (continued)
Investment Funds (continued)
----------------------------
Fidelity U.S. Bond Index Fund
-----------------------------
The Fidelity U.S. Bond Index Fund is an income mutual fund
which invests in investment-grade debt securities with
maturities of at least one year, including U.S. Treasury and
U.S. government securities, corporate bonds, asset-backed and
mortgage-backed securities and U.S. dollar-denominated foreign
securities.
Fidelity Puritan Fund
---------------------
The Fidelity Puritan Fund is a balanced mutual fund which invests in
high-yielding U.S. and foreign securities, including those in
emerging markets which may involve additional risks, common and
preferred stocks, and bonds of any quality or maturity.
Fidelity U.S. Equity Index Commingled Pool
------------------------------------------
The Fidelity U.S. Equity Index Commingled Pool is a commingled pool,
managed by Fidelity Management Trust Company, which invests primarily
in common stocks of the 500 companies that make up the S&P 500 and
attempts to match the investment performance of the Standard & Poor's
500 Composite Stock Index (S&P 500).
Fidelity Blue Chip Growth Fund
------------------------------
The Fidelity Blue Chip Growth Fund is a growth mutual fund which
invests primarily in common stocks of well-known and established
companies. Normally at least 65 percent of the fund's total assets
are invested in the common stock of blue chip companies.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 1 Description of the Plan (continued)
Investment Funds (continued)
----------------------------
Fidelity Diversified International Fund
---------------------------------------
The Fidelity Diversified International Fund is a growth mutual fund
which invests primarily in stocks of companies located outside the
United States that are included in the Morgan Stanley EAFE Index.
The fund looks for stocks that are undervalued compared to industry
norms in their countries.
Fidelity Retirement Money Market Portfolio
------------------------------------------
The Fidelity Retirement Money Market Portfolio is a money market
mutual fund which invests in high quality, short-term, U.S. dollar
denominated money market securities of domestic and foreign issuers.
Investments include short-term corporate obligations, U.S. government
obligations and certificates of deposit. An investment in this
portfolio is not guaranteed or insured by the U.S. government.
Fidelity Equity-Income Fund
---------------------------
The Fidelity Equity-Income Fund is a growth and income mutual fund
which invests primarily in income producing securities, such as
common and preferred stocks. The Fund may also invest in bonds for
income. The fund generally avoids securities issued by companies
without proven earnings or credit.
Franklin Small Cap Growth Fund A
--------------------------------
The Franklin Small Cap Growth Fund A is a growth mutual fund which
invests primarily in common stock of companies which have market
capitalizations of less than $1.5 billion at the time of investment.
The fund tries to keep at least one-third of its assets in stocks of
companies with market capitalizations of $550 million or less.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 1 Description of the Plan (continued)
Investment Funds (continued)
----------------------------
Neuberger Berman Genesis Fund
-----------------------------
The Neuberger Berman Genesis Fund is a growth mutual fund which
invests primarily in common stocks of small-cap companies which have
market capitalizations of $750 million or less. The portfolio looks
for growth potential by investing in strong companies with solid
performance histories and a proven management team.
Allocation
----------
Participants may elect to have their participating Company salary
conversion and Company supplemental match contributions invested in
these funds in 1% multiples as they choose and may also transfer
their balances daily within these funds.
Investment Income
-----------------
Investment income is allocated daily to participant accounts on the
basis of each participant's respective share of the assets of each
applicable fund.
Distributions
-------------
Distribution of benefits from the Plan is made upon retirement,
permanent total disability, death or employment termination.
Distributions from the Company Stock Fund may be made either in
shares of common stock of The St. Paul Companies, Inc., cash or any
combination thereof at the discretion of the participant.
Distributions are based on a participant's share of the market value
of the assets in the applicable funds when the distribution occurs.
Participants are permitted withdrawals from their share of Company
match and salary conversion contributions for financial hardship
reasons, as defined by the Plan.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 1 Description of the Plan (continued)
Participant Loans
-----------------
Participants may request to receive as a loan from the Plan up to 50%
of their vested account balance subject to a minimum of $500 and a
maximum of $50,000. Loans are made at current prime interest rate
plus 1/2% and must be repaid by payroll deduction over a maximum
period of five years (ten years if the loan is designated as a
primary residence loan). Participants pay a $75.00 set-up fee for
each loan.
Tax Status
----------
The Internal Revenue Service has issued a determination letter
stating that the Plan qualifies under Section 401(a) of the Internal
Revenue Code and that the trust created thereunder is exempt from
federal income taxes under Section 501(a) of the Internal Revenue
Code. Since the receipt of the determination letter, certain Plan
amendments have been made. It is the opinion of the Company that the
Plan continues to qualify under Section 401(a) of the Internal
Revenue Code.
Company match contributions invested in the Plan and salary
conversion contributions invested in the Plan for participants by
their employers are not taxed to the participant until received as a
distribution from the Plan. Any appreciation of shares of common
stock of The St. Paul Companies, Inc. distributed to a participant is
not taxed until the participant disposes of such shares. Under
certain circumstances a distribution may be subject to excise taxes
of 10% in addition to normal income tax.
Plan loans to participants are generally not considered taxable
income.
Taxes on rollover transfers are deferred until the rollover amounts
are received as a distribution from the Plan.
Plan Termination
----------------
Although the Company expects to continue the Plan indefinitely, it
has reserved the right to terminate the Plan at any time. Upon such
termination, the Plan administrator would direct the Plan trustee to
distribute participant account balances. Upon termination of the
Plan or change in control of the Company, participant account
balances would vest in full.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 2 Significant Accounting Policies
The accompanying Plan financial statements are presented on the
accrual basis of accounting.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from those
estimates.
The investment in common stock of The St. Paul Companies, Inc. and
in shares or units of investment funds are carried at market value,
based on published market quotations. Realized gains or losses on
sales of these investments and the change in unrealized appreciation
or depreciation in market value of these investments are presented in
total in the statements of changes in net assets available for plan
benefits. The average cost method is used to determine cost of
shares sold or distributed. Purchases and sales of investments are
recorded on a trade date basis. Dividends are recorded on the ex-
dividend date.
Participant loans are carried at unpaid principal amounts plus
accrued interest.
Money market fund and short-term investments are carried at cost plus
accrued interest, which approximates market value. The benefit-
responsive investment contract is valued at contract value (see Note
4).
A portion of the administration expenses of the Plan is paid by the
Company and are not reflected in the accompanying financial
statements. Plan administrative expenses paid by the Plan are paid
out of forfeitures. Plan forfeitures are used to restore accounts,
pay administrative expenses, offset company matching contributions or
salary conversion contributions.
In Sept. 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of
Certain Defined Contribution Plan Investments and Other Disclosure
Matters (SOP 99-3). SOP 99-3 simplifies the disclosure for certain
investments and is effective for plan years ending after Dec. 15,
1999. The Plan adopted SOP 99-3 during the Plan year ended Dec. 31,
1999.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 3 Plan Amendment
The Plan was amended effective as of Dec. 13, 1999, to provide each
participant who becomes an employee of Metropolitan Property &
Casualty Insurance Company (Metropolitan) on Jan. 1, 2000 pursuant to
the terms of the Stock and Asset Purchase Agreement dated as of July
12, 1999 between St. Paul Fire and Marine Insurance Company and
Metropolitan, shall be entitled to elect to have his entire vested
account balance (including any outstanding loans) transferred to the
MetLife Savings and Investment Plan in a voluntary trust-to-trust
transfer meeting the requirements of Treas. Reg. Section 1.411(d)-
4(Q&A-3)(b). On Feb. 14, 2000, the Plan transferred $28.6 million to
the MetLife Savings and Investment Plan in a voluntary trust-to-trust
transfer elected by certain participants who became employees of
MetLife or its affiliate, on Jan. 1, 2000.
Note 4 Investment Contract
In 1999, the Plan entered into a benefit-responsive investment
contract with F&G Life, represented by the investment in the F&G
Life Stable Interest Fund. F&G Life maintains the contributions in
a general account. The account is credited with earnings on the
underlying investments and charged for participant withdrawals and
administrative expenses. The contract is included in the financial
statements at contract value as reported to the Plan by F&G Life.
Contract value represents contributions made under the contract,
plus earnings, less participant withdrawals and administrative
expenses. Participants may ordinarily direct the withdrawal or
transfer of all or a portion of their investment at contract value.
There are no reserves against contract value for credit risk of the
contract issuer or otherwise. The average yield and crediting
interest rate was 5.35 percent for 2000 and 1999. The crediting
interest rate is reset annually based on projections of the
investment returns for the forthcoming year, but may not be less
than 4 percent.
Note 5 Transfers from Other Plans
The Plan allows for rollover transfers to be made to the Plan by
employees of participating companies. These rollover transfers are
lump-sum distributions from other tax-qualified plans of previous
employers which participants elect to have invested in the Plan within
sixty days of receipt. On July 1, 2000 the MMI Companies, Inc.
Savings & Profit Sharing Plan (401(k)), transferred approximately
$29.9 million into the Plan. On Jan.1, 1999 the USF&G Corporation
Capital Accumulation Plan transferred approximately $229.5 million
into the Plan.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
December 31, 2000 and 1999
Note 6 Party-in-Interest Transactions
Transactions resulting in Plan assets being transferred to or used by
a related party are prohibited under the Employee Retirement Income
Security Act of 1974 (ERISA) unless a specific exemption applied.
Fidelity Management Trust Company (Fidelity) is a party-in-interest
as defined by ERISA as a result of being trustee of the Plan.
Fidelity invests Plan assets in their short-term investment fund.
The Plan engages in transactions involving the F&G Life benefit-
responsive investment contract. F&G Life, a subsidiary of the
Company, is a party-in-interest with respect to the plan. The Plan
also engages in transactions involving the acquisition or disposition
of common stock and the short-term pool of The St. Paul Companies,
Inc., a party-in-interest with respect to the Plan. These
transactions are covered by an exemption from the "prohibited
transactions" provisions of ERISA and the Internal Revenue Code.
Note 7 Subsequent Event
On April 26, 2001, the Company announced that St. Paul Fire & Marine
Insurance Co. had signed a definitive agreement to sell F&G Life, a
participating company in, and party-in-interest with respect to, the
Plan. The sale is expected to close in the third quarter of 2001.
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Schedule 1
Form 5500, Schedule H, Part 4i-Schedule of Assets Held for Investment
Purposes
December 31, 2000
Description of Current
Identity of Issue Investment Cost Value**
-------------------------- ------------------- ---------- -----------
*The St. Paul Companies, 1,734,167 no par
Inc. common shares $41,108,823 $94,186,945
*Fidelity U.S. Bond Index 7,312,712 mutual
Fund fund shares 78,244,715 77,441,617
*Fidelity Puritan Fund 4,154,154 mutual
fund shares 81,087,118 78,222,716
*Fidelity U.S. Equity
Index Commingled Pool 2,544,082 pool
units 78,710,050 97,463,785
*Fidelity Blue Chip Growth 3,419,569 mutual
Fund fund shares 164,929,657 176,210,368
*Fidelity Diversified 1,385,153 mutual
International Fund fund shares 28,645,823 30,390,259
*Fidelity Retirement Money 27,217,912 mutual
Market Portfolio fund shares 27,217,912 27,217,912
*Fidelity Equity-Income 625,142 mutual
Fund fund shares 33,626,984 33,401,315
*F&G Life Stable Interest Investment contract,
Fund 5.35% adjusted
annually, no
maturity date 35,216,208 35,216,208
Franklin Small Cap Growth 1,062,300 mutual
Fund A fund shares 41,474,024 41,780,253
Neuberger Berman Genesis 567,365 mutual
Fund fund shares 9,266,290 10,592,708
Participant loans 8.25% to 10.00%,
maximum 5 years 16,619,071 16,619,071
Short-term investments:
*St. Paul Short-Term Pool 6.578%, due on demand 40,622 40,622
*Fidelity Institutional
Cash Portfolio 6.530%, due on demand 1,976,777 1,976,777
----------- -----------
Total short-term investments 2,017,399 2,017,399
----------- -----------
Total investments $638,164,074 $720,760,556
=========== ===========
*Party-in-interest
**For ERISA reporting purposes current value is equal to market value,
except for participant loans, which are equal to unpaid principal plus
accrued interest.
See accompanying independent auditors' report.
SIGNATURE
---------
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
June 19, 2001 THE ST. PAUL COMPANIES, INC.
SAVINGS PLUS PLAN
(The Plan)
By /s/ John P. Clifford
------------------------
John P. Clifford Jr.
Vice President, Performance
and Reward Systems
Member of the Administrative
Committee for The St. Paul
Companies, Inc. Savings Plus
Plan