<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 (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, 1996
Commission file number 0-3021
------------------------------
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)
-------------------------------
<PAGE>
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 With Fund Information 5-6
Notes to Financial Statements . . . . . . . . . . . 7-19
Schedule of Assets Held for Investment Purposes . . 20
Schedule of Reportable Transactions . . . . . . . . 21
<PAGE>
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, 1996 and 1995,
and the related statements of changes in net assets available for
plan benefits with fund information for the years then ended.
These financial statements are the responsibility of the Plan
administrator. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. 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 at December 31, 1996 and 1995, and the changes
in the net assets available for plan benefits for the years then
ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental
schedules of assets held for investment purposes and 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. The fund
information in the statement of changes in net assets available
for plan benefits is presented for purposes of additional
analysis rather than to present the changes in net assets
available for plan benefits of each fund. The supplemental
schedules and fund information 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/ KPMG PEAT MARWICK LLP
---------------------
KPMG PEAT MARWICK LLP
Minneapolis, Minnesota
June 13, 1997
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1996 and 1995
1996 1995
------------ ------------
Assets:
Investments:
Common stock of The St.Paul
Companies, Inc. $ 58,068,532 $ 52,739,954
Interest income contracts 25,430,965 60,675,735
Fidelity Intermediate Bond Fund 77,342,203 48,104,725
Vanguard Wellesley Income Fund 44,220,420 37,548,151
Vanguard Institutional Index Fund 59,021,057 -
Mellon Stock Fund - 41,707,494
Twentieth Century Ultra Fund 66,938,124 53,453,607
Fidelity International Growth Fund 7,749,917 4,185,257
Vanguard Money Market Reserves Fund 10,368,734 4,540,856
Participant loans 21,195,009 19,307,119
Short-term investments 1,976,568 2,329,763
------------ ------------
Total investments 372,311,529 324,592,661
Receivables:
Company contributions 986,800 1,107,600
Accrued dividends 435,252 379,253
------------ ------------
Total assets 373,733,581 326,079,514
------------ ------------
Liabilities:
Cash overdraft 1,508,896 944,821
Forfeitures and other 11,770 34,235
------------ ------------
Total liabilities 1,520,666 979,056
------------ ------------
Net assets available for plan benefits $372,212,915 $325,100,458
============ ============
See accompanying notes to financial statements.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Statements of Changes in Net Assets Available for Plan Benefits With
Fund Information
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Company Stock Income Balanced Diversified Aggressive
Fund Fund Fund Fund Fund
------------- --------- ---------- ----------- ----------
<S>
Contributions:
Participating companies <C> <C> <C> <C> <C>
(salary conversion) $3,682,138 $4,365,274 $3,352,522 $3,970,045 $6,549,957
Company supplemental match - - - - -
---------- ---------- ---------- ---------- ----------
Total contributions 3,682,138 4,365,274 3,352,522 3,970,045 6,549,957
---------- ---------- ---------- ---------- ----------
Investment income:
Interest - 2,481,408 - - -
Dividends 1,745,190 4,180,174 3,509,228 2,090,951 3,763,205
Realized and unrealized
investment gains (loss) 3,164,745 (1,844,029) 229,013 8,215,019 4,046,528
---------- ---------- ---------- ---------- ----------
Total investment income 4,909,935 4,817,553 3,738,241 10,305,970 7,809,733
Transfers from other plans 1,227,476 1,012,771 1,787,004 2,280,651 2,781,391
---------- ---------- ---------- ---------- ----------
Total additions 9,819,549 10,195,598 8,877,767 16,556,666 17,141,081
---------- ---------- ---------- ---------- ----------
Retirement and termination
distribution benefits and
withdrawals:
Paid to participants
in cash 2,838,812 8,341,575 1,978,185 2,714,935 3,299,578
Common stock distributed,
at market value 54,514 - - - -
Forfeitures and other - - - - -
---------- ---------- ---------- ---------- ----------
Total deductions 2,893,326 8,341,575 1,978,185 2,714,935 3,299,578
---------- ---------- ---------- ---------- ----------
Net increase prior to
interfund transfers 6,926,223 1,854,023 6,899,582 13,841,731 13,841,503
Interfund transfers (1,597,645) (7,861,315) (227,313) 3,471,832 (356,986)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) 5,328,578 (6,007,292) 6,672,269 17,313,563 13,484,517
Net assets available for plan
benefits:
Beginning of year 52,739,954 108,780,460 37,548,151 41,707,494 53,453,607
---------- ----------- ---------- ---------- ----------
End of year $58,068,532 $102,773,168 $44,220,420 $59,021,057 $66,938,124
========== =========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International Stable Participant Other
Fund Fund Loans Unallocated Total
------------ ---------- ----------- ----------- -----------
<S>
Contributions:
Participating companies <C> <C> <C> <C> <C>
(salary conversion) $902,875 $524,525 $ - $ - $23,347,336
Company supplemental match - - - 986,643 986,643
---------- ---------- ---------- --------- ----------
Total contributions 902,875 524,525 - 986,643 24,333,979
---------- ---------- ---------- --------- ----------
Investment income:
Interest - 330,782 1,628,547 156,336 4,597,073
Dividends 244,188 - - - 15,532,936
Realized and unrealized
investment gains (loss) 496,031 - - - 14,307,307
---------- ---------- ---------- --------- ----------
Total investment income 740,219 330,782 1,628,547 156,336 34,437,316
Transfers from other plans 650,067 770,528 - - 10,509,888
---------- ---------- ---------- --------- ----------
Total additions 2,293,161 1,625,835 1,628,547 1,142,979 69,281,183
---------- ---------- ---------- --------- ----------
Retirement and termination
distribution benefits and
withdrawals:
Paid to participants
in cash 273,163 1,521,885 1,021,577 - 21,989,710
Common stock distributed,
at market value - - - - 54,514
Forfeitures and other - - - 124,502 124,502
---------- ---------- ---------- --------- ----------
Total deductions 273,163 1,521,885 1,021,577 124,502 22,168,726
---------- ---------- ---------- --------- ----------
Net increase prior to
interfund transfers 2,019,998 103,950 606,970 1,018,477 47,112,457
Interfund transfers 1,544,662 5,723,928 1,280,920 (1,978,083) -
---------- ---------- ---------- --------- ----------
Net increase (decrease) 3,564,660 5,827,878 1,887,890 (959,606) 47,112,457
Net assets available for plan
benefits:
Beginning of year 4,185,257 4,540,856 19,307,119 2,837,560 325,100,458
---------- ---------- ---------- --------- -----------
End of year $7,749,917 $10,368,734 $21,195,009 $1,877,954 $372,212,915
========== ========== ========== ========= ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Statements of Changes in Net Assets Available for Plan Benefits With
Fund Information
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Company Stock Income Balanced Diversified Aggressive
Fund Fund Fund Fund Fund
------------- -------- -------- ----------- -----------
<S>
Contributions:
Participating companies <C> <C> <C> <C> <C>
(salary conversion) $3,410,850 $4,962,764 $3,215,050 $3,243,210 $5,707,700
Company supplemental match - - - - -
---------- ---------- ---------- ---------- ----------
Total contributions 3,410,850 4,962,764 3,215,050 3,243,210 5,707,700
---------- ---------- ---------- ---------- ----------
Investment income:
Interest - 3,898,471 - - -
Dividends 1,492,263 2,862,162 2,413,689 962,613 2,497,598
Realized and unrealized
investment gains 10,326,218 2,469,393 5,578,589 9,631,089 11,065,734
---------- ---------- ---------- ---------- ----------
Total investment income 11,818,481 9,230,026 7,992,278 10,593,702 13,563,332
Transfers from other plans 941,803 1,086,772 979,671 1,096,639 1,382,563
---------- ---------- ---------- ---------- ----------
Total additions 16,171,134 15,279,562 12,186,999 14,933,551 20,653,595
---------- ---------- ---------- ---------- ----------
Retirement and termination
distribution benefits
and withdrawals:
Paid to participants
in cash 3,932,544 9,635,604 1,756,854 2,263,925 2,201,184
Common stock distributed,
at market value 96,280 - - - -
Forfeitures and other - - - - -
---------- ---------- ---------- ---------- ----------
Total deductions 4,028,824 9,635,604 1,756,854 2,263,925 2,201,184
---------- ---------- ---------- ---------- ----------
Net increase prior to
interfund transfers 12,142,310 5,643,958 10,430,145 12,669,626 18,452,411
Interfund transfers (615,942) (7,204,199) 457,788 2,144,077 1,309,429
---------- ---------- ---------- ---------- ----------
Net increase (decrease) 11,526,368 (1,560,241) 10,887,933 14,813,703 19,761,840
Net assets available for plan
benefits:
Beginning of year 41,213,586 110,340,701 26,660,218 26,893,791 33,691,767
---------- ----------- ---------- ---------- ----------
End of year $52,739,954 $108,780,460 $37,548,151 $41,707,494 $53,453,607
========== =========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International Stable Participant Other
Fund Fund Loans Unallocated Total
------------- --------- ----------- ----------- --------
<S>
Contributions:
Participating companies <C> <C> <C> <C> <C>
(salary conversion) $703,336 $367,938 $ - $ - $21,610,848
Company supplemental match - - - 1,137,217 1,137,217
---------- ---------- ---------- ---------- ----------
Total contributions 703,336 367,938 - 1,137,217 22,748,065
---------- ---------- ---------- ---------- ----------
Investment income:
Interest - 191,523 1,409,086 177,546 5,676,626
Dividends 132,568 - - - 10,360,893
Realized and unrealized
investment gains 267,534 - - - 39,338,557
---------- ---------- ---------- ---------- ----------
Total investment income 400,102 191,523 1,409,086 177,546 55,376,076
Transfers from other plans 188,187 605,238 - - 6,280,873
---------- ---------- ---------- ---------- ----------
Total additions 1,291,625 1,164,699 1,409,086 1,314,763 84,405,014
---------- ---------- ---------- ---------- ----------
Retirement and termination
distribution benefits
and withdrawals:
Paid to participants
in cash 80,232 724,253 974,274 - 21,568,870
Common stock distributed,
at market value - - - - 96,280
Forfeitures and other - - - 208,316 208,316
---------- ---------- ---------- ---------- ----------
Total deductions 80,232 724,253 974,274 208,316 21,873,466
---------- ---------- ---------- ---------- ----------
Net increase prior to
interfund transfers 1,211,393 440,446 434,812 1,106,447 62,531,548
Interfund transfers 721,653 4,100,410 275,681 (1,188,897) -
---------- ---------- ---------- ---------- ----------
Net increase (decrease) 1,933,046 4,540,856 710,493 (82,450) 62,531,548
Net assets available for plan
benefits:
Beginning of year 2,252,211 - 18,596,626 2,920,010 262,568,910
---------- ---------- ---------- ---------- -----------
End of year $4,185,257 $4,540,856 $19,307,119 $2,837,560 $325,100,458
========== ========== ========== ========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements
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.
As of December 31, 1996, The St. Paul Companies, Inc.
(the Company) and its subsidiaries, St. Paul Fire and
Marine Insurance Company, The St. Paul Insurance
Company of Illinois, Minet Re North America, Inc.,
The Swett & Crawford Group Inc., Minet Settlement Services,
Inc., St. Paul Reinsurance Management Corporation, Seaboard
Surety Company, Minet, Inc., and Economy Fire & Casualty
Company participated in the Plan. Minet Re North America,
Inc., The Swett & Crawford Group, Inc., Minet Settlement
Services, Inc. and Minet, Inc. each withdrew from the Plan
effective May 16, 1997 pursuant to the sale of Minet Holdings,
Inc. and its subsidiaries by the Company. Until mid-1996,
the Company, as Plan administrator, exercised all fiduciary
responsibility with respect to the admistration of the Plan
and managed and controlled the Plan assets. In mid-1996, the
Company appointed the Admistrative Committee as the Plan
administrator and the Investment Committee to which the Company
has delegated authority over the management and control of
the assets of the Plan (including the designation of
investment funds). State Street Bank and Trust Co. 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 on the Jan. 1 or July 1
following their employment date. Participants are 100% vested
in their contributions and related earnings. Participants
become vested in 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.
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.
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 10% of
employees' annual base salary.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 1 Description of the Plan (continued)
Contributions (continued)
-------------------------
Participating companies made matching contributions of 50 cents
for every dollar of participant salary conversion contributions
up to 6% of their base salary until June 30, 1990. Beginning
July 1, 1990 the matching contributions to the Plan were
replaced with contributions to The St. Paul Companies, Inc.
Savings Plus Preferred Stock Ownership Plan of 60 cents for
every dollar of participant salary conversion contributions up
to 6% of salary.
Employees of Economy Fire & Casualty Company who do
not participate in the Company's stock ownership plan
are eligible for a Company supplemental match contribution
of $1.00 for every dollar of salary conversion contributions up
to 6% of salary. The supplemental match contribution is made
to the Plan annually after Dec. 31, for those participants
employed on that date.
Investment Funds
----------------
The Plan currently calls for the maintenance of seven separate
investment funds as described below:
Company Stock Fund
------------------
The Company Stock Fund is to be 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.
Income Fund
-----------
The Income Fund is to be invested in an investment fund which
invests in fixed income securities to earn a high level of
current income while minimizing risk of principal.
In 1994, the Plan administrator directed that new monies
invested in the Income Fund and proceeds from maturing
contracts of this fund be invested in the Fidelity Intermediate
Bond Fund, a mutual fund which invests in investment-grade
fixed income obligations of three- to ten-year maturities,
managed by Fidelity Management and Research, Inc.
Prior to 1994, the Income Fund invested in interest income
contracts issued by banks or insurance companies. The Plan
administrator selected interest income contracts offered by
various companies for the Income Fund as listed in Note 4.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 1 Description of the Plan (continued)
Investment Funds (continued)
----------------------------
Balanced Fund
-------------
The Balanced Fund is to be invested in an investment fund which
invests in common stock, corporate and government fixed income
securities and cash equivalents.
The Investment Committee has selected the Vanguard Wellesley
Income Fund, a mutual fund which is a member of The Vanguard
Group of Investment Companies, as the underlying investment for
the Balanced Fund.
Diversified Fund
----------------
The Diversified Fund is to be invested in an investment fund
which invests primarily in common stocks and attempts to match
the investment performance of the Standard & Poor's 500
Composite Stock Index.
Effective June 30, 1996, the Plan administrator selected the
Vanguard Institutional Index Fund, a common stock mutual fund of
the Vanguard Group of Investment Companies, as the
underlying investment for the Diversified Fund.
The Plan administrator had selected the Mellon Stock Fund, a
stock trust managed by Mellon Capital Management Corporation, a
subsidiary of Mellon Bank, as the underlying investment for the
Diversified Fund prior to June 30, 1996.
Aggressive Fund
---------------
The Aggressive Fund is to be invested in an investment fund
which invests in common stocks of companies that commonly are
considered emerging or high growth corporations.
The Investment Committee has selected the Twentieth Century
Ultra Fund, a common stock mutual fund of Twentieth Century
Investors, Inc. as the underlying investment for the
Aggressive Fund.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 1 Description of the Plan (continued)
Investment Funds (continued)
----------------------------
International Fund
------------------
The International Fund is to be invested in an investment fund
which invests in common stocks and fixed income securities of
foreign companies.
The Investment Committee has selected the Fidelity International
Growth Fund, an international mutual fund managed by Fidelity
Management and Research, Inc. as the underlying investment for
the International Fund.
Stable Fund
-----------
The Stable Fund is to be invested in an investment fund which
invests in money market instruments with one year or less
maturities.
The Investment Committee has selected the Vanguard Money Market
Reserves Fund, a money market mutual fund which is a member of
The Vanguard Group of Investment Companies, as the underlying
investment for the Stable Fund.
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.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 1 Description of the Plan (continued)
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.
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.
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% or 15% 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.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 1 Description of the Plan (continued)
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.
Note 2 Significant Accounting Policies
The accompanying Plan financial statements are presented on an
accrual basis.
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 additions and deductions during the
reported period. 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 with fund
information. 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.
The investment in interest income contracts is carried at the
contract value of contributions made plus interest at the
contract rate less withdrawals for benefits paid.
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.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 2 Significant Accounting Policies (continued)
A portion of administrative expenses of the Plan is paid by the
Company and not reflected in the accompanying financial
statements. Plan administrative expenses paid by the Plan are
paid out of forfeitures and interest from the controlled
disbursement account maintained by State Street Bank and Trust
Company and are shown as forfeitures and other in the
accompanying statements of changes in net assets available
for plan benefits with fund information. Plan forfeitures are
used to restore accounts, pay administrative expenses, offset
company matching contributions or salary conversion contributions.
Certain amounts in the 1995 financial statements have been
reclassified to conform to the 1996 presentation.
Note 3 Investment in Common Stock of The St. Paul Companies, Inc.
Information regarding the Plan's investment in common stock of
The St. Paul Companies, Inc. follows:
December 31,
----------------------------
1996 1995
----------- -----------
Number of shares owned 990,508 948,134
Percent of total shares
outstanding 1% 1%
Market value per share $ 58.63 $ 55.63
Average cost per share 28.13 23.66
Total cost of shares
owned $27,862,612 $22,435,092
Unrealized appreciation 30,205,920 30,304,862
----------- -----------
Total market value
of shares owned $58,068,532 $52,739,954
=========== ===========
Dividend income for
the year $ 1,745,190 $ 1,492,263
=========== ===========
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, Continued
Note 4 Investment in Interest Income Contracts
Information regarding the carrying value of the Plan's
investment in interest income contracts follows. The average
annual yield on the interest income contracts was 6.02% in 1996
and 6.30% in 1995:
December 31,
-------------------------
Company Contract Terms 1996 1995
---------------- ------------------ ----------- -----------
John Hancock -Deposit of first
Life Insurance half 1993 cash flow
and 50% of first
half 1993 contract
payments
-5.74% annual
interest rate
-Repayment on
June 30, 1997 $12,668,427 $11,980,733
Provident Life -Deposit second
and Accident half 1993 cash
Insurance flow and contract
payments
-5.72% annual
interest rate
-Repayment on
Dec. 31, 1997 12,762,538 12,072,018
Protective Life -Deposit 50% of
Insurance first half 1993
contract payments
-6.48% annual
interest rate
-Repayment on
Dec. 31, 1996 - 10,770,117
New York Life -Deposit of 1992
Insurance contract payments
and 1992 net cash
flow
-6.4% annual
interest rate
-Repayment of 50%
on Jan. 2, 1996
and balance on
July 1, 1996 - 25,852,867
----------- -----------
Total carrying value $25,430,965 $60,675,735
=========== ===========
Interest income for the year $ 2,481,408 $ 3,898,471
=========== ===========
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, Continued
Note 4 Investment in Interest Income Contracts (continued)
The estimated fair value of the interest income contracts is
based on current interest rates available on fixed income
securities in the market that have terms similar to the Plan's
interest income contracts. Information regarding the
estimated fair value of each interest income contract follows:
December 31,
--------------------------
Contract Company 1996 1995
----------------------- ----------- -----------
John Hancock Life
Insurance $12,680,335 $12,038,241
Provident Life and
Accident Insurance 12,754,242 12,133,585
Protective Life
Insurance - 10,878,895
New York Life Insurance - 25,916,207
----------- -----------
Total estimated fair
value $25,434,577 $60,966,928
=========== ===========
Note 5 Investment in Fidelity Intermediate Bond Fund
Information regarding the Plan's investment in shares of the
Fidelity Intermediate Bond Fund follows:
December 31,
--------------------------
1996 1995
----------- ---------
Number of shares owned 7,672,838 4,621,011
Market value per share $ 10.08 $ 10.41
Average cost per share 10.12 10.09
Total cost of shares
owned $77,638,705 $46,613,227
Unrealized appreciation
(depreciation) (296,502) 1,491,498
----------- -----------
Total market value of
shares owned $77,342,203 $48,104,725
=========== ===========
Dividend income for the
year $ 4,180,174 $ 2,862,162
=========== ===========
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 6 Investment in Vanguard Wellesley Income Fund
Information regarding the Plan's investment in shares of the
Vanguard Wellesley Income Fund follows:
December 31,
---------------------------
1996 1995
----------- -----------
Number of shares owned 2,156,042 1,836,990
Market value per share $ 20.51 $ 20.44
Average cost per share 18.43 17.88
Total cost of shares
owned $39,730,675 $32,845,886
Unrealized appreciation 4,489,745 4,702,265
----------- -----------
Total market value of
shares owned $44,220,420 $37,548,151
=========== ===========
Dividend income for
the year $ 3,509,228 $ 2,413,689
=========== ===========
Note 7 Investment in Vanguard Institutional Index Fund and Mellon
Stock Fund
Information regarding the Plan's investment in shares of the
Vanguard Institutional Index Fund follows:
December 31,
--------------------------
1996 1995
----------- -----------
Number of shares owned 857,117 -
Market value per share $ 68.86 -
Average cost per share 63.21 -
Total cost of shares owned $54,175,093 -
Unrealized appreciation 4,845,964
------------ ----------
Total Market value of shares
owned $59,021,057 -
=========== ===========
Dividend income for the year $ 1,510,086 -
=========== ===========
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 7 Investment in Vanguard Institutional Index Fund and Mellon
Stock Fund (continued)
Information regarding the Plan's investment in units of the
Mellon Stock Fund follows:
December 31,
--------------------------
1996 1995
----------- -----------
Daily Opening Stock Index Fund
Number of units owned - 275,190
Market value per unit - $ 151.56
Average cost per unit - 118.91
Cost of units owned - $32,724,151
Unrealized appreciation - 8,983,343
----------- -----------
Market value of units owned - $41,707,494
=========== ===========
Dividend income for the year $ 580,865 $ 962,613
=========== ===========
Effective June 30, 1996, the investment in the Mellon Stock
Fund was sold and reinvested in the Vanguard Institutional
Index Fund.
Note 8 Investment in Twentieth Century Ultra Fund
Information regarding the Plan's investment in shares of the
Twentieth Century Ultra Fund follows:
December 31,
---------------------------
1996 1995
----------- -----------
Number of shares owned 2,382,988 2,047,247
Market value per share $ 28.09 $ 26.11
Average cost per share 21.78 19.86
Total cost of shares owned $51,900,311 $40,662,955
Unrealized appreciation 15,037,813 12,790,652
----------- -----------
Total market value of shares
owned $66,938,124 $53,453,607
=========== ===========
Dividend income for the year $ 3,763,205 $ 2,497,598
=========== ===========
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 9 Investment in Fidelity International Growth Fund
Information regarding the Plan's investment in shares of the
Fidelity International Growth Fund follows:
December 31,
---------------------------
1996 1995
---------- ----------
Number of shares owned 396,415 233,162
Market value per share $ 19.55 $ 17.95
Average cost per share 18.10 17.43
Total cost of shares owned $7,174,779 $4,063,611
Unrealized appreciation 575,138 121,646
---------- ----------
Total market value of shares
owned $7,749,917 $4,185,257
========== ==========
Dividend income for the year $ 244,188 $ 132,568
========== ==========
Note 10 Realized and unrealized investment gains (losses)
The Plan's net realized and unrealized gains (losses) from
investments owned, purchased or sold during the years
indicated are summarized by investment as follows:
Investment 1996 1995
----------------------------- ------------ -------------
Common stock of The St. Paul
Companies, Inc. $ 3,164,745 $10,326,218
Fidelity Intermediate Bond Fund (1,844,029) 2,469,393
Vanguard Wellesley Income Fund 229,013 5,578,589
Vanguard Institutional Index Fund 4,927,342 -
Mellon Stock Fund 3,287,677 9,631,089
Twentieth Century Ultra Fund 4,046,528 11,065,734
Fidelity International Growth
Fund 496,031 267,534
------------ ------------
Total $14,307,307 $39,338,557
============ ============
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Notes to Financial Statements, continued
Note 11 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.
The Plan also allows for annual diversification transfers to be
made to the Plan by certain participants of The St. Paul Companies,
Inc. Employee Stock Ownership Plan (ESOP). These diversification
transfers are cash amounts which ESOP participants elect to have
invested in the Plan rather than receive as diversification
distributions.
The following is a summary of these transfers to the Plan in 1996
and 1995:
1996 1995
---------- ----------
Rollover transfers $10,119,577 $5,958,789
ESOP diversification transfers 390,311 322,084
---------- ----------
Total transfers from other
plans $10,509,888 $6,280,873
========== ==========
Note 12 Party-in-Interest Transactions
Transactions resulting in Plan assets being transferred to or used
by a related party are prohibited under the Pension Reform Act
(the Act) unless a specific exemption applied. State Street Bank
and Trust Company (State Street), is a party-in-interest as defined by
the Act as a result of being trustee of the Plan. State Street is
investing Plan assets in its short-term investment fund. 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.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Schedule 1
Item 27a-Schedule of Assets Held for Investment Purposes
Investments at End of Plan Year
December 31, 1996
Description of Current
Identity of Issue Investment Cost Value**
- -------------------------- ------------------- ---------- -----------
*The St. Paul Companies, Common stock, no
Inc. par value,
990,508 shares $27,862,612 $58,068,532
Interest income contracts:
John Hancock Life
Insurance 5.74%, due 6/30/97 12,668,427 12,668,427
Provident Life and
Accident Insurance 5.72%, due 12/31/97 12,762,538 12,762,538
---------- -----------
25,430,965 25,430,965
---------- -----------
Fidelity Intermediate 7,672,838 mutual
Bond Fund fund shares 77,638,705 77,342,203
Vanguard Wellesley Income 2,156,042 mutual
Fund fund shares 39,730,675 44,220,420
Vanguard Institutional 857,117 mutual fund
Index Fund shares 54,175,093 59,021,057
Twentieth Century Ultra 2,382,988 mutual
Fund fund shares 51,900,311 66,938,124
Fidelity International 396,415 mutual fund
Growth Fund shares 7,174,779 7,749,917
Vanguard Money Market 5.28%, money market
Reserves Fund fund 10,368,734 10,368,734
Participant loans Prime plus 1/2%,
maximum 5 years 21,195,009 21,195,009
Short-term investments:
*St. Paul Short-Term
Pool 5.40%, due on demand 32,449 32,449
*State Street Bank &
Trust Fund 5.38%, due on demand 1,944,119 1,944,119
---------- -----------
1,976,568 1,976,568
---------- -----------
Total investments $317,453,451 $372,311,529
=========== ===========
*Party-in-interest
**For ERISA reporting purposes current value is equal to market value,
except for interest income contracts, which are equal to
contributions made plus accrued interest at the contract rate
less withdrawals for benefits paid and participant loans, which
are equal to unpaid principal plus accrued interest.
See accompanying independent auditors' report.
<PAGE>
THE ST. PAUL COMPANIES, INC. SAVINGS PLUS PLAN
Schedule 2
Item 27d-Schedule of Reportable Transactions*
Year Ended December 31, 1996
Current
Identity of Party Value of the
Involved/ Asset on Net
Description of Purchase Selling Cost of Transaction Gain or
Asset Price Price the Asset** Date (Loss)
- ------------------ --------- --------- --------- --------- --------
New York Life
Insurance/
Interest Income
Contract:
Withdrawals $26,260,110 $26,260,110 $26,260,110 $ -
Fidelity
Intermediate
Bond Fund/
Mutual
Fund Shares:
Purchases $50,161,782 50,161,782 50,161,782 -
Withdrawals 18,902,369 19,360,957 18,902,369 (458,588)
Vanguard
Institutional
Index Fund/
Mutual
Fund Shares:
Purchases 56,208,653 56,208,653 56,208,653 -
Mellon Stock Fund/
Stock Fund Units:
Withdrawals 48,075,971 44,788,294 48,075,971 3,287,677
*No expense incurred with transactions
**For ERISA reporting purposes cost is equal to the market value as of the
beginning of the year, except for interest income contracts, which are equal
to contributions made plus accrued interest at the contract rate less
withdrawals for benefits paid. For assets purchased and sold during the
year the cost is equal to the purchase price.
See accompanying independent auditors' report.
<PAGE>
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 25, 1997 THE ST. PAUL COMPANIES, INC.
SAVINGS PLUS PLAN
(The Plan)
By /s/ John P. Clifford Jr.
------------------------
John P. Clifford Jr.
Human Resources Benefits and
Compensation Officer
Member of the Administrative
Committee for The St. Paul
Companies, Inc. Savings Plus
Plan
