Travelers 2013 Annual Report Download - page 230

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. SHAREHOLDERS’ EQUITY AND DIVIDEND AVAILABILITY (Continued)
Subsequent to this amendment of the Company’s Articles of Incorporation, the Company filed a shelf
registration statement with the Securities and Exchange Commission in June 2013 pursuant to which it
may publicly sell securities, including the new preferred stock, from time to time. The new shelf
registration statement replaced the Company’s prior shelf registration statement.
In May 2011, the Company’s board of directors authorized the redemption of the Company’s
preferred stock held by The Travelers 401(k) Savings Plan (the Savings Plan) and gave notice of that
redemption to the appropriate fiduciaries of the Savings Plan. Following a fiduciary review, the Savings
Plan exercised its right to convert each preferred share into eight shares of the Company’s common
stock. As a result, all preferred shares outstanding on June 7, 2011 (190,083 shares) were converted
into a total of 1.52 million shares of the Company’s common stock.
Common Stock
The Company is governed by the Minnesota Business Corporation Act. All authorized shares of
voting common stock have no par value. Shares of common stock reacquired are considered authorized
and unissued shares.
Treasury Stock
The Company’s board of directors has approved common share repurchase authorizations under
which repurchases may be made from time to time in the open market, pursuant to pre-set trading
plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private
transactions or otherwise. The authorizations do not have a stated expiration date. The timing and
actual number of shares to be repurchased in the future will depend on a variety of factors, including
the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels
commensurate with the Company’s desired ratings from independent rating agencies, funding of the
Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries, legal
requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions
and related financings), market conditions and other factors. In October 2013, the board of directors
approved a share repurchase authorization that added an additional $5.0 billion of repurchase capacity.
The following table summarizes repurchase activity in 2013 and remaining repurchase capacity at
December 31, 2013.
Number of Remaining capacity
Quarterly Period Ending shares Cost of shares Average price paid under share repurchase
(in millions, except per share amounts) purchased repurchased per share authorization
March 31, 2013 ................. 3.7 $ 300 $81.01 $1,859
June 30, 2013 .................. 3.6 300 82.99 1,559
September 30, 2013 .............. 9.7 800 82.21 759
December 31, 2013 .............. 11.4 1,000 88.10 4,759
Total ....................... 28.4 $2,400 84.51 4,759
The Company’s Amended and Restated 2004 Stock Incentive Plan provides settlement alternatives
to employees in which the Company retains shares to cover tax withholding costs and exercise costs.
During the years ended December 31, 2013 and 2012, the Company acquired $61 million and
$55 million, respectively, of its common stock under this plan.
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