UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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THE ST. PAUL TRAVELERS COMPANIES, INC.
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(Name of Registrant as Specified In Its Charter)
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[ST. PAUL TRAVELERS LOGO]
385 Washington Street
St. Paul, MN 55102-1396
651-310-7911 TEL
www.stpaultravelers.com
April 25, 2005
Dear Shareholder:
This letter is to inform you that the table on page 24 of the Proxy Statement
for the May 3, 2005 Annual Meeting of the Shareholders of The St. Paul
Travelers Companies, Inc. incorrectly reported the percentages of options
granted to the five named executives, relative to the total options granted to
all employees in 2004.
The table entitled "Option Grants in 2004" should have been reported as
follows:
OPTION GRANTS IN 2004
Individual Grants
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% of Total
Options
Securities Underlying Granted to Exercise or Grant Date
Options Employees Base Price Expiration Present Value
Name Granted (Number)(1) in 2004 ($/Share) Date ($)(2)
--------------------- ---------------------- --------------------- ------------ --------------- ---------------
Initial Reload Initial Reload
J.S. Fishman 500,000 -- 10.20% -- $42.88 2/2/2014 $6,726,998
R. I. Lipp -- -- -- -- -- -- --
T.M. Miller 100,000 -- 2.04% -- $42.88 2/2/2014 $1,345,400
J. S. Benet 64,096 -- 1.31% -- $42.55 4/27/2014 $ 877,543
-- 36 -- 0.001% $40.87 11/2/2008 $ 216
W. H. Heyman 100,000 -- 2.04% -- $42.88 2/2/2014 $1,345,400
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(1) The stock options granted to Messrs. Fishman, Miller and Heyman were
granted on February 2, 2004, and vest in 25% consecutive annual
increments beginning one year from the date of grant. The initial
options granted to Mr. Benet were granted on April 27, 2004, and vest
50% after two years from the date of grant and 25% on each of the
third and fourth anniversaries of the grant date. The options granted
to Messrs. Fishman, Miller and Heyman will become immediately vested
and exercisable in full upon a Change of Control (as defined in the
1994 St. Paul Stock Plan described above); however, the Merger did
not constitute a Change of Control for purposes of this option grant.
(2) The "grant date present value" numbers in the table were derived by
application of a variation of the Black-Scholes option pricing model.
The following assumptions were used in employing the model.
- Stock price volatility was calculated using the average
historical volatility of the common stock of an industry peer
group over the estimated option life based on the mid-month of
the option grant.
- The risk-free interest rate for each option grant was the
interpolated market yield for the mid-month of the option grant
on a Treasury bill with a term identical to the subject
estimated option life, as reported by the Federal Reserve.
- The dividend yield was based upon the Company's 2004 annual
dividend rate which was assumed to be constant over the life of
the option.
- For initial options, which vest over a four year period,
exercise was assumed to occur approximately five to seven years
after the date of grant, based on the assumption that exercise
would occur evenly throughout the period between the vesting
date and the expiration date.
- For the reload option granted to Mr. Benet, which vests six
months after the date of grant, exercise was assumed to occur
approximately one to three years after the grant date, based on
the assumption that exercise would occur evenly throughout the
period between the vesting date and expiration date.
Sincerely,
/s/ Bruce A. Backberg
Bruce A. Backberg
Senior Vice President &
Corporate Secretary