Travelers 2004 Annual Report Download - page 188

THE ST. PAUL TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
13. INCENTIVE PLANS, Continued
common stock received in the Citigroup Distribution on the Citigroup restricted shares, were equal to the value
of the cancelled Citigroup restricted share awards.
Information with respect to restricted stock and deferred stock awards is as follows:
2004 2003 2002
New shares granted ........................................... 1,668,862 947,233 —
SPC assumed awards April 1, 2004 ............................... 237,592 — —
Replacement grants at August 20, 2002 ............................ — — 1,435,226
Weighted average fair value per share at issuance .................... $ 37.03 $ 37.26 $ 39.94
In addition, the St. Paul Travelers Deferred Compensation Plan for Non-Employee Directors and legacy
SPC and TPC directors’ plans allow deferred receipt of shares of common stock (deferred stock) to a future
distribution date or upon termination of a director’s service. The after-tax compensation cost associated with this
plan was not significant in 2004, 2003 and 2002.
Unearned compensation expense is recognized as a charge to income ratably over the vesting period. The
after-tax compensation cost charged to earnings for these restricted stock and deferred stock awards was $26
million, $17 million and $17 million for the years ended December 31, 2004, 2003 and 2002, respectively.
Other Incentive Plans
In addition to the Company’s equity-based compensation plans discussed above, Nuveen Investments has an
equity-based compensation plan in which awards are granted in Nuveen Investments’ publicly traded common
stock. The after-tax compensation cost associated with these awards included in the Company’s earnings was
approximately $9 million.
14. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS
Prior to December 31, 2004, both TPC and SPC sponsored qualified non-contributory defined benefit
pension plans. On December 31, 2004, the qualified noncontributory defined benefit pension plans of TPC and
SPC were merged to form one plan. The Company sponsors the merged plan, which covers substantially all
employees and provides benefits under a cash balance formula, except that employees satisfying certain age and
service requirements remain covered by a prior final pay formulas. In addition, the Company and TPC sponsor
nonqualified defined benefit pension plans which cover certain highly-compensated employees and also sponsor
postretirement health and life insurance benefit plans for employees satisfying certain age and service
requirements and for certain retirees. Prior to the August 20, 2002 Citigroup Distribution, substantially similar
benefits were provided to TPC employees through plans sponsored by Citigroup.
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