<PAGE>
==============================================================================
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
For the fiscal year ended December 31, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------ ------
Commission File No. 333-69895
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
OHIO CASUALTY CORPORATION
9450 SEWARD ROAD
FAIRFIELD, OH 45014
Page 1 of 19
==============================================================================
<PAGE>
REQUIRED INFORMATION
The Ohio Casualty Insurance Company Employee Savings Plan ("Plan") is subject
to the Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore,
in lieu of the requirements of Items 1-3 of Form 11-K, the financial
statements of net assets available for the benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for
benefits for the year ended December 31, 1999, which have been prepared in
accordance with the financial reporting requirements of ERISA, are attached
hereto as Appendix 1 and incorporated herein by this reference.
The following exhibit is being filed herewith:
Exhibit No. Description
----------- -----------
23 Independent Accountant's Consent
2
<PAGE>
SIGNATURES
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.
THE OHIO CASUALTY INSURANCE
COMPANY EMPLOYEE SAVINGS PLAN
By: The Ohio Casualty Insurance Company Employee Savings Plan Retirement
Committee
June 27, 2000 /s/Elizabeth M. Riczko
------------------------------------------
Elizabeth M. Riczko, Senior Vice President
(on behalf of Registrant and as Principal
Accounting Officer)
3
<PAGE>
APPENDIX 1
THE OHIO CASUALTY EMPLOYEE SAVINGS PLAN
FINANCIAL STATEMENTS OF NET ASSETS AVAILABLE FOR THE BENEFITS OF THE PLAN AS
OF DECEMBER 31, 1999 AND 1998, AND THE CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1999, SUPPLEMENTAL SCHEDULES AS OF
AND FOR THE YEAR ENDED DECEMBER 31, 1999 AND INDEPENDENT ACCOUNTANT'S REPORT.
4
<PAGE>
THE OHIO CASUALTY EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
------------------------------------------------------------------------------
Pages
-----
Report of Independent Accountants..................................... 6
Financial Statements:
Statements of Net Assets Available for Plan Benefits
by Fund Information as of December 31, 1999 and 1998........ 7-8
Statement of Changes in Net Assets Available for
Plan Benefits by Fund Information for the year ended
December 31, 1999 .......................................... 9-10
Notes to the Financial Statements............................. 11-16
Supplement Schedules:
Line 27A-Schedule of Assets Held for Investment Purposes
at December 31, 1999 ....................................... 17
Line 27D-Schedule of Reportable Transactions
for the year ended December 31, 1999 ....................... 18
Consent of Independent Accountants ................................... 19
5
<PAGE>
Report of Independent Accountants
To the Retirement Committee of
The Ohio Casualty Insurance Company
Employee Savings Plan
In our opinion, the accompanying statements of net assets available for the
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of The Ohio Casualty Insurance Company Employee Savings Plan
(the "Plan") at December 31, 1999 and 1998, and the changes in net assets
available for benefits for the year ended 1999 in conformity with accounting
principles generally accepted in the United States. These financial
statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with auditing standards generally accepted in the United States, which
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, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1)
Assets Held for Investment Purposes and (2) Reportable Transactions are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements but are 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. These
supplemental schedules are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
June 16, 2000
6
<PAGE>
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND INFORMATION
as of December 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------
Fund C Fund D Fund E Fund F
----------- ----------- --------------- -----------
CT&T FDS Montag Vanguard
Company Interest & Caldwell Balanced
Stock Income Growth Fund Index Fund
----------- ----------- --------------- ------------
<S> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Cash and cash equivalents $ - $ 1,000 $ - $ -
Ohio Casualty Corporation common stock 38,073,201
Group annuity contracts 37,265,007
CT&T FDS Montag & Caldwell Growth Fund 9,717,796
Vanguard Balanced Index Fund 10,247,518
ICAP FDS Equity Portfolio
Vanguard Institutional Index Fund
T. Rowe Price Small-Cap Stock Fund
Loans to participants
------------ ------------ --------------- ------------
Subtotal 38,073,201 37,266,007 9,717,796 10,247,518
Accrued Interest 1,025 119,154 382 2,356
Receivable from sale of securities 1,118,099
------------ ------------ --------------- ------------
Total assets 39,192,325 37,385,161 9,718,178 10,249,874
Liabilities:
Cash overdraft (1,215,629)
Miscellaneous payable (34) (110) (60)
------------ ------------ --------------- ------------
Total liabilities (1,215,663) (110) - (60)
------------ ------------ --------------- ------------
Net assets available for plan
benefits $37,976,662 $37,385,051 $9,718,178 $10,249,814
============ ============ =============== ============
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Fund G Fund H Fund I
------------ ------------- -------------
Vanguard T. Rowe Price
ICAP FDS Institutional Small-Cap
Equity Fund Index Fund Stock Fund Loan Fund Total
----------- ------------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Cash and cash equivalents $ - $ 1,000 $ - $ - $ 2,000
Ohio Casualty Corporation common stock 38,073,201
Group annuity contracts 37,265,007
CT&T FDS Montag & Caldwell Growth Fund 9,717,796
Vanguard Balanced Index Fund 10,247,518
ICAP FDS Equity Portfolio 6,586,166 6,586,166
Vanguard Institutional Index Fund 26,533,908 26,533,908
T. Rowe Price Small-Cap Stock Fund 3,949,564 3,949,564
Loans to participants 2,522,184 2,522,184
----------- ------------- ------------- ---------- -------------
Subtotal 6,586,166 26,534,908 3,949,564 2,522,184 $134,897,344
Accrued Interest 4,351 55 3,949 131,272
Receivable from sale of securities 1,118,099
----------- ------------- ------------- ---------- -------------
Total assets 6,590,517 26,534,963 3,953,513 2,522,184 136,146,715
Liabilities:
Cash overdraft (1,215,629)
Miscellaneous payable (32) (47) (6) (289)
----------- ------------- ------------- ---------- -------------
Total liabilities (32) (47) (6) - (1,215,918)
----------- ------------- ------------- ---------- -------------
Net assets available for plan
benefits $6,590,485 $26,534,916 $3,953,507 $2,522,184 $134,930,797
=========== ============= ============= ========== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND INFORMATION
as of December 31, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------
Fund C Fund D Fund E Fund F
------------ ----------- ----------- ------------
Dodge & Cox
Company Interest Dodge & Cox Balanced
Stock Income Bond Fund Fund
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Cash and cash equivalents $ 55,968 $ 13,457 $ 999 $ 1,165
Ohio Casualty Corporation common stock 57,515,780
Group annuity contracts 25,811,570
Dodge & Cox Bond Fund 2,912,794
Dodge & Cox Balanced Fund 14,342,445
Dodge & Cox Stock Fund
Vanguard Index 500 Stock
PBHG Growth Fund
Loans to participants
------------ ------------ ----------- ------------
Subtotal 57,571,748 25,825,027 2,913,793 14,343,610
Contributions receivable - participants 417 59 594
Accrued Interest 1,037 136,269 5
Due (to) from other funds 547,159 13,067 56,732
------------ ------------ ----------- ------------
Total assets 57,573,202 26,508,455 2,926,924 14,400,936
Liabilities:
Miscellaneous payable (55)
------------ ------------ ----------- ------------
Total liabilities - (55) - -
------------ ------------ ----------- ------------
Net assets available for plan benefits $57,573,202 $26,508,400 $2,926,924 $14,400,936
============ ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Fund G Fund H Fund I
------------ ----------- ------------ ----------- ------------
Vanguard
Dodge & Cox Index 500 PBHG Growth
Stock Fund Stock Fund Fund Loan Fund Total
------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Cash and cash equivalents $ 1,000 $ 1,000 $ 1,360 $ - $ 74,949
Ohio Casualty Corporation common stock 57,515,780
Group annuity contracts 25,811,570
Dodge & Cox Bond Fund 2,912,794
Dodge & Cox Balanced Fund 14,342,445
Dodge & Cox Stock Fund 15,734,711 15,734,711
Vanguard Index 500 Stock 19,832,490 19,832,490
PBHG Growth Fund 8,791,150 8,791,150
Loans to participants 2,890,485 2,890,485
------------ ------------ ------------ ----------- -------------
Subtotal 15,735,711 19,833,490 8,792,510 2,890,485 147,906,374
Contributions receivable - participants 924 746 65 2,805
Accrued Interest 3 5 3 137,322
Due (to) from other funds (276,587) (186,560) (153,811) -
------------ ------------ ------------ ----------- -------------
Total assets 15,460,051 19,647,681 8,638,767 2,890,485 148,046,501
Liabilities:
Miscellaneous payable (1,085) (1,140)
------------ ------------ ------------ ----------- -------------
Total liabilities - (1,085) - - (1,140)
------------ ------------ ------------ ----------- -------------
Net assets available for plan benefits $15,460,051 $19,646,596 $8,638,767 $2,890,485 $148,045,361
=========== ============ ============ =========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
INFORMATION
for the year ended December 31, 1999
<TABLE>
<CAPTION>
-----------------------------------------------------------
Fund C Fund D Fund E
------------- ----------- ----------- ---------------
CT&T FDS Montag
Company Interest Dodge & Cox & Caldwell
Stock Income Bond Fund Growth Fund
------------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
Net appreciation (depreciation) in fair
value of investments $(11,614,280) $ - $ (185,869) -
Investment income:
Interest 7,742 1,505,493 445
Dividends 2,313,865 159,234
------------- ----------- ------------ ---------------
Increase (decrease) from investments (9,292,673) 1,505,493 (26,190) -
Contributions:
Participants 54,444 1,473,718 364,220
Employer 2,993,485
------------- ----------- ----------- ---------------
Total contributions 3,047,929 1,473,718 364,220 -
Benefits and withdrawals (12,726,112) (8,669,541) (622,898)
Administrative expenses (356) (66,283) (4)
Election of redistribution among funds
(see Note 1) (249,661) 14,849,566 (2,272,031) 9,718,178
Interfund transfers (375,667) 1,783,698 (370,021)
------------- ----------- ----------- ---------------
Increase (decrease) in net assets (19,596,540) 10,876,651 (2,926,924) 9,718,178
Net assets available for plan benefits:
Beginning of year 57,573,202 26,508,400 2,926,924 -
------------- ----------- ----------- ---------------
End of year $ 37,976,662 $37,385,051 $ - $9,718,178
============= =========== =========== ===============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
Fund F Fund G
-------------- ----------- ------------ ------------
Dodge & Cox Vanguard
Balanced Balanced Dodge & Cox ICAP FDS
Fund Index Fund Stock Fund Equity Fund
------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Net appreciation (depreciation) in fair
value of investments $ 1,001,547 $ - $ 2,553,818 $ -
Investment income:
Interest 2,395 4,502
Dividends 590,836 347,806
------------- ------------ ------------ -------------
Increase (decrease) from investments 1,594,778 - 2,906,126 -
Contributions:
Participants 1,591,543 2,111,464
Employer
------------- ------------ ------------ -------------
Total contributions 1,591,543 - 2,111,464 -
Benefits and withdrawals (2,659,763) (3,588,640)
Administrative expenses (2) (7)
Election of redistribution among funds
(see Note 1) (14,108,678) 10,249,814 (16,580,818) 6,590,485
Interfund transfers (818,814) (308,176)
------------- ------------ ------------ -------------
Increase (decrease) in net assets (14,400,936) 10,249,814 (15,460,051) 6,590,485
Net assets available for plan benefits:
Beginning of year 14,400,936 - 15,460,051 -
------------- ------------ ------------ -------------
End of year $ - $10,249,814 $ - $6,590,485
============= ============ ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
INFORMATION
for the year ended December 31, 1999
<TABLE>
<CAPTION>
-----------------------------------------------------------
Fund H Fund I
------------- ------------- ------------- -------------
Vanguard Vanguard T. Rowe Price
Index 500 Institutional PBHG Growth Small-Cap
Stock Fund Index Fund Fund Stock Fund
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net appreciation (depreciation) in fair
value of investments $ 2,896,149 $ 1,031,483 $ 6,626,095 $ -
Investment income:
Interest 192 55 4,062
Dividends 182,262 84,028
------------- ------------- ------------- -------------
Increase (decrease) from investments 3,078,603 1,115,566 6,630,157 -
Contributions:
Participants 2,855,857 122,545 1,287,254
Employer
------------- ------------- ------------- -------------
Total contributions 2,855,857 122,545 1,287,254 -
Benefits and withdrawals (3,489,362) (284,469) (1,377,552)
Administrative expenses (9) (6)
Election of redistribution among funds
(see Note 1) (23,297,369) 25,216,688 (14,069,681) 3,953,507
Interfund transfers 1,205,684 364,586 (1,108,939)
------------- ------------- ------------- -------------
Increase (decrease) in net assets (19,646,596) 26,534,916 (8,638,767) 3,953,507
Net assets available for plan benefits:
Beginning of year 19,646,596 8,638,767
------------- ------------- ------------- -------------
End of year $ - $26,534,916 $ - $3,953,507
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
------------------------------
Loan Fund Total
------------- --------------
<S> <C> <C>
Net appreciation (depreciation) in fair
value of investments $ - $ 2,308,943
Investment income:
Interest 226,628 1,751,514
Dividends 3,678,031
------------- --------------
Increase (decrease) from investments 226,628 7,738,488
Contributions:
Participants 9,861,045
Employer 2,993,485
------------- --------------
Total contributions - 12,854,530
Benefits and withdrawals (222,578) (33,640,915)
Administrative expenses (66,667)
Election of redistribution among funds
(see Note 1) -
Interfund transfers (372,351) -
------------- --------------
Increase (decrease) in net assets (368,301) (13,114,564)
Net assets available for plan benefits:
Beginning of year 2,890,485 148,045,361
------------- --------------
End of year $2,522,184 $134,930,797
============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
1. PLAN DESCRIPTION:
The following description of The Ohio Casualty Insurance Company
Employee Savings Plan (the Plan) provides only general information.
Reference should be made to the Plan Agreement and The Ohio Casualty
Employee Benefits Manual for a complete description of the Plan.
a. GENERAL: The Plan, which is subject to provisions of the Employees
Retirement Income Security Act of 1974 (ERISA), is a defined
contribution plan covering all eligible employees of the Company who
have elected to participate.
Effective January 1, 1999, the Ohio Casualty Corporation Stock Fund
(Fund C) was converted to an Employee Stock Ownership Plan, or ESOP,
to allow participants to elect to receive directly the payment of
dividends on their proportional shares of Ohio Casualty Stock in the
Employee Savings Plan rather than reinvesting them in the plan. Fund
C will consist of two subaccounts, an "ESOP Subaccount" and a "nonESOP
Subaccount". The ESOP Subaccount will consist of all monies invested
in Company Stock that are attributable to Company Contributions,
Post-Tax Contributions and Pre-Tax Contributions made in Plan Years
before the current Plan Year and Rollover Contributions reduced by
any amounts that were transferred out of the ESOP Subaccount to the
nonESOP portion of the Plan in accordance with the Plan Agreement.
On January 1 of each Plan Year, all amounts then held in Fund C
within the nonESOP Subaccount are transferred to the ESOP Subaccount.
Effective July 1, 1998, the Plan was amended to include the following
changes:
- The Plan's eligibility requirements for participants was changed
to 18 years of age without any service requirement. Previously
the eligibility requirement was 21 years of age with 1 year of
service.
- The employee contribution maximum per year was increased from 16%
to 22% of the employees' pay.
- Participants will become immediately 100% vested in the value of
the Ohio Casualty Insurance Company (the Company) matching
contributions made on their behalf. This was changed from a
gradual vesting period with 100% vesting occurring after 5 years
of service or 2 years of Plan participation.
- The Company's supplemental match, which was based on the Company's
loss and expense ratio, was eliminated.
11
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
1. CONTINUED:
Effective January 1, 2000, the Plan was amended to eliminate four
existing funds and add four new funds. The funds eliminated include
the Dodge & Cox Bond Fund, the Dodge & Cox Balanced Fund, the Dodge &
Cox Stock Fund, and the PBHG Growth Fund. The new funds include the
CT&T FDS Montag & Caldwell Growth Fund (Fund E), the Vanguard Balanced
Index Fund (Fund F), the ICAP FDS Equity Fund (Fund G), and the T. Rowe
Price Small-Cap Stock Fund Index (Fund I). The reallocation from the
eliminated funds to new or existing funds took place at the markets'
close on December 31, 1999.
b. CONTRIBUTIONS: Participants may contribute between 1-22% of their
gross salary, either before or after-tax. The Company will match
50% of the first 6% of compensation that a participant contributes to
the Plan. Effective July 1, 1998, employees are 100% vested in the
value of their contributions and their investment earnings, as well
as 100% vested in the value of the Company contributions and their
investment earnings. Prior to July 1, 1998, Company contributions
were fully vested after 5 years of service or 2 years of
participation in the Plan.
c. PARTICIPANT ACCOUNTS: Each participant's account is credited with the
participant's contributions, the participant's share of the Company's
contributions and an allocation of fund earnings. Allocations of
fund earnings are based on participant's account balances, as defined
by the Plan. The participant is entitled to their fully vested
account balance.
d. INVESTMENT OPTIONS: Participants direct the investment of their
contributions. The prospectuses for these investment options describe
the funds as follows:
- Company Fund (Ohio Casualty Stock) - Funds are invested in Ohio
Casualty Corporation Stock.
- Interest Income (Cash Equivalents; Collective Trust Funds) - Funds
are invested in guaranteed interest contracts, bank investment
contracts and short-term government money market investments for
current income preservation while maintaining high liquidity.
- Dodge & Cox Bond Fund (Fixed Income Fund) - Funds are invested in
a diversified portfolio of fixed-income securities, including U.S.
government bonds, investment-grade securities, CD's and
commercial paper for a high and stable rate of current income
with long-term preservation of capital. (DISCONTINUED EFFECTIVE
JANUARY 1, 2000)
- Montag & Caldwell Fund (Large Cap Growth Equity Fund) - Funds are
invested primarily in common stocks and convertible securities for
long-term capital appreciation, and secondarily, current income.
(NEW FUND EFFECTIVE JANUARY 1, 2000)
12
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
1. CONTINUED:
- Dodge & Cox Balanced Fund (Equity Growth & Income Fund) - Funds
are invested in common stock and fixed-income securities for
regular income, conservation of principal, and an opportunity
for long-term growth of principal and income. (DISCONTINUED
EFFECTIVE JANUARY 1, 2000)
- Vanguard Balanced Index Fund (Balanced Index) - Funds are
invested in equities and fixed-income securities for current
income together with growth of income and capital over time.
(NEW FUND EFFECTIVE JANUARY 1, 2000)
- Dodge & Cox Stock Fund (Growth & Income Fund) - Funds are
invested in the common stock, preferred stocks and securities
convertible into common stock of well-established companies
with long-term growth of principal and income. (DISCONTINUED
EFFECTIVE JANUARY 1, 2000)
- ICAP Large-Cap Value Equity Fund (Large-Cap Value Equity) - Funds
are invested in stocks of large and mid capitalization companies
for a superior total return. (NEW FUND EFFECTIVE JANUARY 1, 2000)
- Vanguard Institutional Index Fund - Funds are generally invested
in stocks, seeking investment results that correspond with the
price and yield performance of the Standard & Poors' (S&P) 500
Index. (FORMERLY THE VANGUARD INDEX 500 STOCK FUND)
- PBGH Growth Fund - Funds are invested primarily in common stock
that possess the potential to appreciate significantly and
attain strong growth in earnings. (DISCONTINUED EFFECTIVE
JANUARY 1, 2000)
- T. Rowe Price Small-Cap Equity Fund (Small-Cap Equity Fund) -
Provides long-term capital growth by investing primarily in
stocks of small to mid-size companies. (NEW EFFECTIVE JANUARY
1, 2000)
e. FUND TRANSFERS: During 1999, the Plan was amended to allow the
transfer of the assets from the Vanguard Index 500 Fund (Fund H) to
the Vanguard Institutional Index Fund (Fund H). The Vanguard
Institutional Index Fund provides the same investment objective as
the Vanguard Index 500 Fund, while incurring lower operating
expenses.
On December 31, 1999, the investments in the Dodge & Cox Bond Fund,
the Dodge & Cox Balanced Fund, the Dodge & Cox Stock Fund, and the
PBGH Growth Fund were liquidated and reinvested to the fund of the
participants' choice. Participants who had not instructed the
Company to transfer their balances in the liquidated funds had any
balance remaining automatically transferred on their behalf to the
Interest Income Fund (Fund D).
13
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
1. CONTINUED:
f. BENEFIT PAYMENTS: Benefits are payable to employees upon termination
of employment, retirement, disability retirement, death, in-service
withdrawals, or for financial hardship as defined by the Internal
Revenue Service.
2. ACCOUNTING POLICIES:
a. BASIS OF ACCOUNTING: The Plan's policy is to prepare its financial
statements on the accrual basis of accounting in accordance with
generally accepted accounting principles.
b. INVESTMENTS: Investments in bonds, notes, and stocks are valued at
quoted market prices. Mutual funds are valued at net asset value.
The group annuity contracts and investment contracts are valued at
contract value as they are considered to be fully benefit-responsive.
The crediting interest rates for the contracts were 6.23% and 6.35%
as of December 31, 1999 and 1998, respectively. The fair value of
the contract approximates contract value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded as earned. Dividend income is recorded
on the ex-dividend date.
The Plan presents in the statement of changes in net assets available
for plan benefits by fund information the net appreciation
(depreciation) in the fair value of its investments, which consists
of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments.
c. CONTRIBUTIONS: Contributions from participants and the Company are
recorded in the month the Company makes payroll deductions from plan
participants.
d. BENEFIT PAYMENTS: Benefits are recorded by the Trustee when paid.
e. ADMINISTRATIVE EXPENSES: Certain costs of administering the Plan are
paid by the Company. These costs totaled $317,373 and $307,214 for
the years ended December 31, 1999 and 1998, respectively.
f. USE OF ESTIMATES: 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 and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
14
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
3. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions set forth in ERISA. In the
event of plan termination, the net assets will be distributed to
participants and beneficiaries in proportion to their respective account
balances.
4. TAX STATUS:
The Plan received a favorable determination letter dated December 16,
1998, from the Internal Revenue Service indicating that the Plan is
exempt from federal income taxes. The Plan has been amended subsequently;
however, the Company believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal
Revenue Code. Therefore, no provision for income taxes has been included
in the Plan's financial statements.
5. INVESTMENTS:
The following investments represent 5% or more of the Plan's net assets:
<TABLE>
<CAPTION>
FAIR VALUE
------------------------------
DECEMBER 31, DECEMBER 31,
1999 1998
------------------------------
<S> <C> <C>
FUND C:
Ohio Casualty Corporation, common stock $38,073,201 $57,515,780
FUND D:
LaSalle National Trust, N.A., collective
investment Contract 37,265,007 25,811,570
FUND E:
CT&T FDS Montag & Caldwell Growth Fund 9,717,796 -
FUND F:
Dodge and Cox Balanced Fund (Liquidated
12/31/99) - 14,342,445
Vanguard Balanced Index Fund 10,247,518 -
FUND G:
Dodge and Cox Stock Fund (Liquidated
12/31/99) - 15,734,711
FUND H:
Vanguard Institutional Index Fund
(replaced Vanguard Index 500 Stock Fund
12/14/99) 26,533,908 19,832,490
FUND I:
PBHG Growth Fund (Liquidated 12/31/99) - 8,791,150
</TABLE>
15
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
6. LOANS RECEIVABLE - PARTICIPANTS:
Participants are permitted to borrow from the trust using their vested
account balance as collateral. The minimum loan amount is $1,000 and the
maximum loan amount is the lessor of $50,000 reduced by the participants'
highest outstanding aggregate balance of loans from the Plan during the
previous twelve (12) months, the total value of the employee's before-tax
and after-tax accounts, or 50% of the vested value of the participants'
accounts. Interest is charged at Chase Manhattan Bank's prime commercial
rate plus 1%. Repayments of the loan are arranged through payroll
deductions which may be specified up to 130 biweekly payments (five
years). At December 31, 1999 there were 620 individual loans outstanding,
maturing between January 2000 through December 2004, with interest rates
ranging from 8.75% to 10.00%.
7. BENEFITS PAYABLE:
Participant benefits and withdrawals payable were $2,002,797 and
$2,127,656 as of December 31, 1999 and 1998, respectively, and are
included in net assets available for plan benefits. Such amounts are
reported as liabilities on Form 5500 filed with the Department of Labor.
16
<PAGE>
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEE SAVINGS PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
at December 31, 1999
<TABLE>
<CAPTION>
Investments Units/Share Cost Fair Value
--------------------------------------------- ------------- ----------- -----------
<S> <C> <C> <C>
Cash & Cash Equivalents 2,000 $ 2,000 $ 2,000
Company Stock 2,370,316 31,111,794 38,073,201
Interest Income 37,265,007 37,265,007 37,265,007
CT&T FDS Montag & Caldwell Growth Fund 277,651 9,717,796 9,717,796
ICAP FDS Inc Equity Portfolio 152,670 6,586,166 6,586,166
T. Rowe Price Small-Cap Stock Fund Index 173,227 3,949,564 3,949,564
Vanguard Balanced Index Fund Inc 506,801 10,247,518 10,247,518
Vanguard Institutional Index Fund 197,999 25,594,250 26,533,908
Loans to Participants, with interest rates
ranging from 8.75% to 10% and maturity dates
of 2000 through 2004 - 2,522,184
----------------------------
Total Investments $124,474,095 $134,897,344
============================
</TABLE>
17
<PAGE>
THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEE SAVINGS PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
(SERIES OF TRANSACTIONS EXCEEDING 5% OF PLAN ASSETS)
Year Ended December 31, 1999
<TABLE>
<CAPTION>
Purchases Dispositions
------------------------ ----------------------------------------
Number of Number of Gain
Fund Transactions Cost Transactions Proceeds (Loss)
---------------------------------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Chase EOD Bank Liquidity 161 $42,050,802 156 $22,017,204 $ -
Chase Bank Domestic Liquidity Fund 8 14,244,352 8 14,244,353 -
Company Stock 37 6,090,891 7 2,529,195 792,552
Interest Income 44 20,801,224 32 9,347,786 -
Dodge & Cox Stock Fund 48 4,211,324 26 22,406,713 4,716,791
Dodge & Cox Balanced Fund 46 3,357,989 24 18,701,981 2,321,295
CT&T FDS Montag & Caldwell
Growth Fund 1 9,717,796 0 - -
PBHG FDS Income Growth Fund 32 1,987,417 32 17,404,658 7,146,365
Vanguard Balanced Index Fund Inc 1 10,247,518 0 - -
Vanguard Index TR 500 Portfolio 43 4,873,085 22 27,601,726 10,160,770
Vanguard Institutional Index Fund 7 25,895,724 2 393,299 91,825
</TABLE>
18
