UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
| (Mark | One) |
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2011
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 000-19289
| A. | Full title of the plan and address of the plan, if different from that of the issuer named below: |
State Auto Insurance Companies
Amended and Restated
Directors Deferred Compensation Plan
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
State Auto Financial Corporation
518 East Broad Street
Columbus, Ohio 43215-3976
REQUIRED INFORMATION
See the accompanying financial statements for the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan as of December 31, 2011 and 2010, and for the years ended December 31, 2011, 2010 and 2009.
SIGNATURES
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.
| State Auto Insurance Companies Amended and Restated Directors | ||||||||
| By: | /s/ Steven E. English | |||||||
| Steven E. English | ||||||||
| Chief Financial Officer | ||||||||
| By: | /s/ James A. Yano | |||||||
| James A. Yano | ||||||||
| Vice President, Secretary and General Counsel | ||||||||
Date: March 28, 2012
| Page | ||||
| 1 | ||||
| Audited Financial Statements: |
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| 2 | ||||
| 3 | ||||
| 4 – 17 | ||||
Report of Independent Registered Public Accounting Firm
Board of Directors
State Auto Financial Corporation
We have audited the accompanying statements of net assets available for benefits of the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan (the Plan), as of December 31, 2011 and 2010, and the related statements of changes in net assets available for benefits for the years ended December 31, 2011, 2010 and 2009. 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 in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. 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 benefits of the Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the years ended December 31, 2011, 2010 and 2009 in conformity with accounting principles generally accepted in the United States of America.
| /s/ Clark, Schaefer, Hackett & Co. |
March 28, 2012
Columbus, Ohio
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Statements of Net Assets Available for Benefits
| December 31 | ||||||||
| 2011 | 2010 | |||||||
| Assets |
||||||||
| Investments, at fair value: |
||||||||
| Shares of registered investment companies (cost $3,282,409 and $2,302,250, respectively) |
$ | 3,135,407 | $ | 2,432,485 | ||||
| Interest-bearing cash |
9,437 | 9,436 | ||||||
| Affiliated Stock (cost $315,791 and $304,549, respectively) |
261,271 | 322,013 | ||||||
|
|
|
|
|
|||||
| Total investments |
3,406,115 | 2,763,934 | ||||||
| Net assets available for benefits |
$ | 3,406,115 | $ | 2,763,934 | ||||
|
|
|
|
|
|||||
See accompanying notes.
2
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Statements of Changes in Net Assets Available for Benefits
| Year Ended December 31 | ||||||||||||
| 2011 | 2010 | 2009 | ||||||||||
| Investment income (loss): |
||||||||||||
| Dividends |
$ | 107,836 | 68,455 | 39,632 | ||||||||
| Unrealized (loss) gain |
(349,221 | ) | (62,149 | ) | 470,380 | |||||||
| Realized gain (loss) |
58,863 | 306,404 | (123,251 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total investment income (loss) |
(182,522 | ) | 312,710 | 386,761 | ||||||||
| Contributions: |
||||||||||||
| Participant |
490,750 | 307,055 | 137,502 | |||||||||
| Company |
343,770 | 315,000 | 315,000 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total contributions |
834,520 | 622,055 | 452,502 | |||||||||
| Deductions: |
||||||||||||
| Benefit payments |
9,817 | 9,080 | 4,844 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total deductions |
9,817 | 9,080 | 4,844 | |||||||||
| Net increase |
642,181 | 925,685 | 834,419 | |||||||||
| Net assets available for benefits: |
||||||||||||
| Beginning of year |
2,763,934 | 1,838,249 | 1,003,830 | |||||||||
| End of year |
$ | 3,406,115 | 2,763,934 | 1,838,249 | ||||||||
|
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|
|
|
|
|
|||||||
See accompanying notes.
3
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements
December 31, 2011
1. Description of the Plan
Organization
The State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan (the “Plan”) became effective on August 1, 1995, was amended and restated in its entirety effective as of March 1, 2001, and was further amended effective as of December 1, 2005 (First Amendment), January 1, 2009 (Second and Third Amendments), and November 1, 2010 (Fourth Amendment). The Plan provides members of the Boards of Directors of State Automobile Mutual Insurance Company (“State Auto Mutual”) and its affiliates (collectively, the “Company” or the “State Auto Insurance Companies”) a retirement savings plan in which to defer the payment of director and committee meeting fees.
In 2010, the Plan was amended to include, among other things, the following change:
| • | For participants who are members of the Board of Directors of State Auto Financial Corporation (“STFC”), an affiliate of State Auto Mutual, a fund comprised of STFC common stock (“Affiliated Stock”) was added as an investment option under the Plan. |
In 2009, the Plan was amended to include, among other things, the following changes:
| • | A requirement was added that a participant must provide at least 30 days advance written notice to the Company of his or her intention to retire and receive retirement benefits under the Plan. |
| • | A provision was added to provide that an additional annual cash contribution be made by the Company to each of the members of the Board of Directors of State Auto Mutual in the amount of $35,000, or such lesser or greater amount as determined by the Company, at its discretion. |
| • | Provisions were added to bring the Plan into compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated thereunder. |
The benefits provided to participants under the Plan are paid from the Company’s general assets. The Plan is intended to be an unfunded Plan for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”) and is, therefore, exempt from certain ERISA requirements. Each participant’s right to benefits under the Plan are equivalent to the rights of any unsecured creditor of the Company.
Participants must enroll within 30 days after becoming eligible to participate. For subsequent years, participants must enroll prior to the beginning of each new plan year.
Contributions
Participants are permitted to defer on a pre-tax basis (a) from 10% to 100% of his or her director fees in the calendar year and/or (b) 0% or 100% of committee meeting fees in the calendar year. In addition, for each of the members of the Board of Directors of State Auto Mutual, State Auto Mutual makes an annual cash contribution in the amount of $35,000, or such lesser or greater amount as determined at State Auto Mutual’s discretion.
Vesting
Each participant is fully vested in his or her contributions and any State Auto Mutual discretionary contributions.
Participant Accounts
Investment funds available under the Plan are merely devices used to calculate gains and losses on the amounts deferred by Plan participants. No participant has any rights or interests in any particular funds, securities or property of the Company or the trust described in Note 6, or in any investment vehicle in which deferrals are deemed to be invested, by virtue of any investment election. Each deferral account, however, is credited or charged in accordance with the Plan with gains and losses as if the participant in fact had made a corresponding actual investment. The Directors of STFC have the option to purchase Affiliated Stock.
4
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
Payment of Benefits
The balance of each deferral account will be distributed upon retirement or termination of a participant from the Board of Directors of the Company. Payments will be made in cash and paid in 60 or 120 monthly installments, except for amounts deferred and fully vested prior to December 31, 2004, which can be distributed in alternative payment options as elected by the participant. The Company must receive at least 30 days written notice of the participant’s intention to retire and receive retirement benefits.
2. Significant Accounting Policies
Basis of Presentation
The accounting records of the Plan are maintained in conformity with U.S. generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Valuation of Investments and Related Investment Income
The investments of the Plan consist of shares of registered investment companies, interest-bearing cash, and Affiliated Stock. The Plan’s investments are stated at fair value. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. See Note 3 for discussion on fair value measurements.
Investment income, including appreciation and depreciation in fair value of investments, is allocated to participant accounts daily based upon the ratio of each participant’s account to the total fund balance. Dividend income is recorded on the ex-dividend date. Realized gains and losses on the sale of securities are determined based on the average cost method.
Benefit Payments
Benefit payments are recognized when paid.
Administrative Expenses
Administrative expenses are paid by the Company.
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the Plan’s statements of net assets available for benefits.
Adoption of New Accounting Pronouncements
Improving Disclosures about Fair Value Measurements
In January 2010, Financial Accounting Standards Board (“FASB”) issued guidance to improve the disclosures related to fair value measurements. The guidance requires the information in the reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements to be presented separately on a gross basis, rather than as one net number. We adopted this guidance effective January 1, 2011. The adoption of the new guidance had no effect on the Plan’s financial statements.
5
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
In January 2010, the FASB issued guidance to improve the disclosures related to fair value measurements. The new guidance requires expanded fair value disclosures, including the reasons for significant transfers between Level 1 and Level 2 and the amount of significant transfers into each level disclosed separately from transfers out of each level. For Level 3 fair value measurements, information in the reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements shall be presented separately on a gross basis, rather than as one net number. In addition, clarification is provided about existing disclosure requirements, such as presenting fair value measurement disclosures for each class of assets and liabilities that are determined based on their nature and risk characteristics and their placement in the fair value hierarchy (that is, Level 1, 2, or 3), as opposed to each major category of assets and liabilities, as required in the previous guidance. Disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements are required for fair value measurement that fall in either Level 2 or Level 3. The Company adopted this new guidance effective January 1, 2010, except for the gross presentation of purchases, sales, issuances and settlements in the Level 3 reconciliation, which is effective for annual and interim reporting periods beginning after December 15, 2010. The adoption of the new guidance effective January 1, 2010 had no effect on the Plan’s financial statements.
3. Fair Value Measurements
Below is the fair value hierarchy that categorizes into three levels the inputs to valuation techniques that are used to measure fair value:
| • | Level 1 includes observable inputs which reflect quoted prices for identical assets or liabilities in active markets at the measurement date. |
| • | Level 2 includes observable inputs for assets or liabilities other than quoted prices included in Level 1, and it includes valuation techniques which use prices for similar assets and liabilities. |
| • | Level 3 includes unobservable inputs which reflect the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). |
The following is a description of the valuation methods used for assets measured at fair value.
| • | Registered investment companies: Registered investment companies are public investment vehicles valued using net asset value (“NAV”) provided by the administrator of the mutual fund. The NAV is an unadjusted quoted price on an active market and classified within Level 1 of the fair value hierarchy. |
| • | Interest-bearing cash: The carrying value approximates fair value and is classified within Level 1 of the fair value hierarchy. |
| • | Affiliated Stock: The fair value is based on the unadjusted closing price reported on the active market on which the security is traded and is classified within Level 1 of the fair value hierarchy. |
6
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
The following tables reflect the Plan’s investments within the fair value hierarchy at December 31, 2011 and 2010:
| 2011 | Total | Quoted prices in active markets for identical assets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
||||||||||||
| Registered investment companies: |
||||||||||||||||
| Large cap equity investments |
$ | 706,569 | 706,569 | — | — | |||||||||||
| Mid cap equity investments |
98,285 | 98,285 | — | — | ||||||||||||
| International equity investments |
677,150 | 677,150 | — | — | ||||||||||||
| Blended fund investments |
954,494 | 954,494 | — | — | ||||||||||||
| Income bond investments |
698,909 | 698,909 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total registered investment companies |
3,135,407 | 3,135,407 | — | — | ||||||||||||
| Interest-bearing cash |
9,437 | 9,437 | — | — | ||||||||||||
| Affiliated Stock |
261,271 | 261,271 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investments |
$ | 3,406,115 | 3,406,115 | — | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 2010 | Total | Quoted prices in active markets for identical assets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
||||||||||||
| Registered investment companies: |
||||||||||||||||
| Large cap equity investments |
$ | 530,471 | 530,471 | — | — | |||||||||||
| Mid cap equity investments |
28,252 | 28,252 | — | — | ||||||||||||
| International equity investments |
673,912 | 673,912 | — | — | ||||||||||||
| Blended fund investments |
738,358 | 738,358 | — | — | ||||||||||||
| Income bond investments |
461,492 | 461,492 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total registered investment companies |
2,432,485 | 2,432,485 | — | — | ||||||||||||
| Interest-bearing cash |
9,436 | 9,436 | — | — | ||||||||||||
| Affiliated Stock |
322,013 | 322,013 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investments |
$ | 2,763,934 | 2,763,934 | — | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
7
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
4. Participant Accounts
Participant balances for all funds are maintained in shares. Share values are determined on a periodic basis. At December 31, 2011 and 2010, there were 15 and 13 participants in the Plan, respectively, with contributions in one or more of the following funds. The total number of participants in the Plan is less than the sum of the number of participants set forth in the following table because each participant may make contributions to more than one fund. The total number of shares and share values as of December 31, 2011 and 2010, by fund, were as follows:
2011
Investment Options
| Total Number of Shares |
Net Asset Share Value |
Number of Participants |
||||||||||
| Registered Investment Company |
||||||||||||
| Calamos Growth Inst |
5,023 | 50.85 | 3 | |||||||||
| FID Contrafund K |
3,414 | 67.41 | 4 | |||||||||
| FID Diversified Intl K |
18,289 | 25.48 | 4 | |||||||||
| FID Freedom K 2005 |
7,647 | 11.98 | 2 | |||||||||
| FID Freedom K 2010 |
15,707 | 12.10 | 2 | |||||||||
| FID Freedom K 2015 |
28,963 | 12.13 | 5 | |||||||||
| FID Freedom K 2020 |
19,159 | 12.43 | 3 | |||||||||
| FID Freedom K 2025 |
6,700 | 12.44 | 1 | |||||||||
| FID Intermed Bond |
17,724 | 10.88 | 3 | |||||||||
| Harbor Intl Inst |
4,026 | 52.45 | 4 | |||||||||
| JPM Mid Cap Value IS |
3,082 | 23.75 | 3 | |||||||||
| MFS Value R4 |
1,656 | 22.38 | 1 | |||||||||
| PIM Total RT Inst |
46,557 | 10.87 | 3 | |||||||||
| Spartan US EQ Index |
4,134 | 44.49 | 3 | |||||||||
| VANG Mid Cap IDX |
891 | 28.13 | 1 | |||||||||
|
|
|
|||||||||||
| Total Registered Investment Company |
182,972 | |||||||||||
| Interest Bearing Cash |
||||||||||||
| Fidelity US Govt Bond |
9,437 | 1.00 | 1 | |||||||||
|
|
|
|||||||||||
| Total Interest Bearing Cash |
9,437 | |||||||||||
| Affiliated Stock |
||||||||||||
| State Auto Financial Corporation |
19,225 | 13.59 | 1 | |||||||||
|
|
|
|||||||||||
| Total Affiliated Stock |
19,225 | |||||||||||
|
|
|
|||||||||||
| Total Investments |
211,634 | |||||||||||
|
|
|
|||||||||||
8
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
2010
Investment Options
| Total Number of Shares |
Net Asset Share Value |
Number of Participants |
||||||||||
| Registered Investment Company |
||||||||||||
| Calamos Growth A |
5,015 | 53.38 | 2 | |||||||||
| FID Contrafund K |
2,283 | 67.70 | 2 | |||||||||
| FID Diversified Intl K |
15,088 | 30.12 | 3 | |||||||||
| FID Freedom K 2005 |
8,119 | 12.44 | 2 | |||||||||
| FID Freedom K 2010 |
12,323 | 12.68 | 2 | |||||||||
| FID Freedom K 2015 |
30,169 | 12.72 | 4 | |||||||||
| FID Freedom K 2020 |
7,380 | 13.19 | 1 | |||||||||
| FID Intermed Bond |
5,863 | 10.55 | 2 | |||||||||
| Harbor Intl Inst |
3,625 | 60.55 | 2 | |||||||||
| JPM Mid Cap Value A |
1,049 | 23.13 | 2 | |||||||||
| PIM Total RT Inst |
36,833 | 10.85 | 3 | |||||||||
| Spartan US EQ Index |
2,432 | 44.48 | 1 | |||||||||
| VANG Mid Cap IDX |
197 | 20.31 | 1 | |||||||||
|
|
|
|||||||||||
| Total Registered Investment Company |
130,376 | |||||||||||
| Interest Bearing Cash |
||||||||||||
| Fidelity US Govt Bond |
9,436 | 1.00 | 1 | |||||||||
|
|
|
|||||||||||
| Total Interest Bearing Cash |
9,436 | |||||||||||
| Affiliated Stock |
||||||||||||
| State Auto Financial Corporation |
18,485 | 17.42 | 1 | |||||||||
|
|
|
|||||||||||
| Total Affiliated Stock |
18,485 | |||||||||||
|
|
|
|||||||||||
| Total Investments |
158,297 | |||||||||||
|
|
|
|||||||||||
9
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
5. Investments
The Plan’s investments and related changes at December 31, 2011, 2010 and 2009 and for the years then ended were as follows:
| 2011 | Number of Shares |
Fair Value | Dividends | Realized Gain (loss) |
Unrealized Gain (loss) |
Contributions | Benefit Payments |
|||||||||||||||||||||
| Registered Investment Companies |
||||||||||||||||||||||||||||
| ABF Small Cap Val Inst |
— | $ | — | $ | — | $ | 143 | $ | — | $ | — | $ | — | |||||||||||||||
| ABF Small Cap Val INV |
— | — | — | (2,794 | ) | — | — | — | ||||||||||||||||||||
| Baron Growth |
— | — | — | (1,109 | ) | — | — | — | ||||||||||||||||||||
| Baron Growth Inst |
— | — | — | 202 | — | — | — | |||||||||||||||||||||
| Calamos Growth A |
— | — | — | 56,343 | (69,449 | ) | 9,750 | — | ||||||||||||||||||||
| Calamos Growth Inst |
5,023 | 255,400 | 10,361 | — | (22,569 | ) | 3,250 | — | ||||||||||||||||||||
| FID Contrafund K |
3,414 | 230,160 | 868 | — | (3,296 | ) | 48,000 | — | ||||||||||||||||||||
| FID Diversified Intl K |
18,289 | 465,993 | 9,851 | — | (81,295 | ) | 83,000 | — | ||||||||||||||||||||
| FID Freedom K 2005 |
7,647 | 91,617 | 3,864 | 28 | (3,458 | ) | — | (9,817 | ) | |||||||||||||||||||
| FID Freedom K 2010 |
15,707 | 190,059 | 8,552 | — | (9,753 | ) | 35,000 | — | ||||||||||||||||||||
| FID Freedom K 2015 |
28,963 | 351,326 | 17,892 | 4,758 | (20,217 | ) | 142,195 | — | ||||||||||||||||||||
| FID Freedom K 2020 |
19,159 | 238,143 | 11,069 | (1,042 | ) | (16,953 | ) | 120,625 | — | |||||||||||||||||||
| FID Freedom K 2025 |
6,700 | 83,350 | 3,667 | — | (7,317 | ) | 87,000 | — | ||||||||||||||||||||
| FID Intermed Bond |
17,724 | 192,840 | 3,097 | — | 2,947 | 55,000 | — | |||||||||||||||||||||
| Harbor Intl Inst |
4,026 | 211,157 | 5,162 | (3,133 | ) | (34,653 | ) | 30,500 | — | |||||||||||||||||||
| JPM Mid Cap Value A |
— | — | — | 6,647 | (6,580 | ) | 36,000 | — | ||||||||||||||||||||
| JPM Mid Cap Value IS |
3,082 | 73,202 | 859 | — | 16 | 12,000 | — | |||||||||||||||||||||
| MFS Value Fund A |
— | — | 297 | (3,455 | ) | — | — | — | ||||||||||||||||||||
| MFS Value R4 |
1,656 | 37,070 | 240 | — | (12 | ) | — | — | ||||||||||||||||||||
| PIM Total RT Inst |
46,557 | 506,068 | 17,400 | 1,756 | (2,318 | ) | 150,000 | — | ||||||||||||||||||||
| Spartan US EQ Index |
4,134 | 183,939 | 3,080 | — | (369 | ) | — | — | ||||||||||||||||||||
| VANG Mid Cap IDX INV |
— | — | — | 519 | (200 | ) | — | — | ||||||||||||||||||||
| VANG Mid Cap IDX SIG |
891 | 25,083 | 334 | — | (1,761 | ) | 22,200 | — | ||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Registered Investment Companies |
182,972 | 3,135,407 | 96,593 | 58,863 | (277,237 | ) | 834,520 | (9,817 | ) | |||||||||||||||||||
| Interest Bearing Cash |
||||||||||||||||||||||||||||
| Fidelity US Govt Bond |
9,437 | 9,437 | 1 | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Interest Bearing Cash |
9,437 | 9,437 | 1 | — | — | — | — | |||||||||||||||||||||
| Affiliated Stock |
||||||||||||||||||||||||||||
| State Auto Financial Corporation |
19,225 | 261,271 | 11,242 | — | (71,984 | ) | — | — | ||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Affiliated Stock |
19,225 | 261,271 | 11,242 | — | (71,984 | ) | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Assets Held For Investment |
211,634 | $ | 3,406,115 | $ | 107,836 | $ | 58,863 | $ | (349,221 | ) | $ | 834,520 | $ | (9,817 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
10
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
| 2010 | Number of Shares |
Fair Value | Dividends | Realized Gain (loss) |
Unrealized Gain (loss) |
Contributions | Benefit Payments |
|||||||||||||||||||||
| Registered Investment Companies |
||||||||||||||||||||||||||||
| Calamos Growth A |
5,015 | $ | 267,713 | $ | — | $ | 41,747 | $ | 32,041 | $ | 63,604 | $ | — | |||||||||||||||
| FID Contrafund |
— | — | 163 | 32,802 | (16,434 | ) | 20,625 | — | ||||||||||||||||||||
| FID Contrafund K |
2,283 | 154,589 | 894 | — | 4,343 | 6,875 | — | |||||||||||||||||||||
| FID Diversified Intl |
— | — | — | 94,805 | (56,895 | ) | 46,250 | — | ||||||||||||||||||||
| FID Diversified Intl K |
15,088 | 454,437 | 8,999 | (320 | ) | 1,544 | 20,040 | — | ||||||||||||||||||||
| FID Freedom 2005 |
— | — | 630 | 23,502 | (15,051 | ) | 35,000 | (7,489 | ) | |||||||||||||||||||
| FID Freedom 2010 |
— | — | 895 | 21,712 | (11,049 | ) | 35,000 | — | ||||||||||||||||||||
| FID Freedom 2015 |
— | — | 2,048 | 55,864 | (28,933 | ) | 106,250 | — | ||||||||||||||||||||
| FID Freedom 2020 |
— | — | 459 | 27,214 | (20,912 | ) | 36,250 | — | ||||||||||||||||||||
| FID Freedom K 2005 |
8,119 | 101,000 | 1,857 | 6 | 84 | — | (1,591 | ) | ||||||||||||||||||||
| FID Freedom K 2010 |
12,323 | 156,260 | 2,914 | — | 612 | — | — | |||||||||||||||||||||
| FID Freedom K 2015 |
30,169 | 383,753 | 7,425 | — | 1,808 | 2,500 | — | |||||||||||||||||||||
| FID Freedom K 2020 |
7,380 | 97,345 | 1,825 | — | 1,105 | 6,250 | — | |||||||||||||||||||||
| FID Freedom K 2025 |
— | — | — | 243 | — | 10,000 | — | |||||||||||||||||||||
| FID Intermed Bond |
5,863 | 61,852 | 1,210 | — | 844 | 39,438 | — | |||||||||||||||||||||
| Harbor Intl Inst |
3,625 | 219,476 | 3,114 | — | 15,879 | 17,500 | — | |||||||||||||||||||||
| JPM Mid Cap Value A |
1,049 | 24,260 | 187 | — | 3,366 | 6,875 | — | |||||||||||||||||||||
| PIM Total RT Inst |
36,833 | 399,639 | 32,107 | 8,829 | (3,887 | ) | 136,063 | — | ||||||||||||||||||||
| Spartan US EQ Index |
2,432 | 108,169 | 1,796 | — | 11,722 | 29,785 | — | |||||||||||||||||||||
| VANG Mid Cap IDX |
197 | 3,992 | 41 | — | 200 | 3,750 | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Registered Investment Companies |
130,376 | 2,432,485 | 66,564 | 306,404 | (79,613 | ) | 622,055 | (9,080 | ) | |||||||||||||||||||
| Interest Bearing Cash |
||||||||||||||||||||||||||||
| Fidelity US Govt Bond |
9,436 | 9,436 | 2 | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Interest Bearing Cash |
9,436 | 9,436 | 2 | — | — | — | — | |||||||||||||||||||||
| Affiliated Stock |
||||||||||||||||||||||||||||
| State Auto Financial Corporation |
18,485 | 322,013 | 1,889 | — | 17,464 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Affiliated Stock |
18,485 | 322,013 | 1,889 | — | 17,464 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Assets Held For Investment |
158,297 | $ | 2,763,934 | $ | 68,455 | $ | 306,404 | $ | (62,149 | ) | $ | 622,055 | $ | (9,080 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
11
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
| 2009 | Number of Shares |
Fair Value | Dividends | Realized Gain (loss) |
Unrealized Gain (loss) |
Contributions | Benefit Payments |
|||||||||||||||||||||
| Registered Investment Companies |
||||||||||||||||||||||||||||
| Calamos Growth A |
7,672 | $ | 341,105 | $ | — | $ | (55,830 | ) | $ | 163,161 | $ | 64,375 | $ | — | ||||||||||||||
| FID Contrafund |
1,807 | 105,321 | 357 | (9,920 | ) | 33,383 | — | — | ||||||||||||||||||||
| FID Diversified Intl |
14,710 | 411,892 | 5,057 | (62,523 | ) | 154,197 | 37,500 | — | ||||||||||||||||||||
| FID Freedom 2005 |
12,368 | 124,050 | 3,618 | 2,769 | 16,310 | 35,000 | (4,844 | ) | ||||||||||||||||||||
| FID Freedom 2010 |
6,889 | 86,176 | 2,758 | 5,245 | 12,317 | 70,000 | — | |||||||||||||||||||||
| FID Freedom 2015 |
20,805 | 216,789 | 6,208 | 3,732 | 30,271 | 87,500 | — | |||||||||||||||||||||
| FID Freedom 2020 |
10,641 | 133,549 | 3,790 | 2,193 | 21,435 | 52,500 | — | |||||||||||||||||||||
| FID Intermed Bond |
997 | 10,117 | 290 | — | 764 | 9,063 | — | |||||||||||||||||||||
| JPM Mid Cap Value A |
729 | 13,833 | 197 | (7,919 | ) | 10,581 | — | — | ||||||||||||||||||||
| PIM Total RT Inst |
29,733 | 321,117 | 16,274 | 2,481 | 12,828 | 69,688 | — | |||||||||||||||||||||
| Spartan US EQ Index |
1,645 | 64,866 | 1,048 | (3,479 | ) | 15,133 | 26,876 | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Registered Investment Companies |
107,996 | 1,828,815 | 39,597 | (123,251 | ) | 470,380 | 452,502 | (4,844 | ) | |||||||||||||||||||
| Interest Bearing Cash |
||||||||||||||||||||||||||||
| Fidelity US Govt Bond |
9,434 | 9,434 | 35 | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Interest Bearing Cash |
9,434 | 9,434 | 35 | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Assets Held For Investment |
117,430 | $ | 1,838,249 | $ | 39,632 | $ | (123,251 | ) | $ | 470,380 | $ | 452,502 | $ | (4,844 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
12
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
The Plan’s unrealized appreciation (depreciation) at December 31, 2011, 2010, and 2009, were as follows:
| Unrealized Gain (loss) |
||||||||||||
| Beginning Balance | Net Change | Ending Balance | ||||||||||
| 2009 |
$ | (260,532 | ) | 470,380 | 209,848 | |||||||
| 2010 |
$ | 209,848 | (62,149 | ) | 147,699 | |||||||
| 2011 |
$ | 147,699 | (349,221 | ) | (201,522 | ) | ||||||
13
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
The Plan’s net realized gains and losses were as follows for the years ended December 31, 2011, 2010 and 2009:
| 2011 | Aggregate Proceeds |
Cost | Net Realized Gains (Losses) |
|||||||||
| Investment Options |
||||||||||||
| ABF Small Cap Val Inst |
$ | 22,349 | 22,206 | 143 | ||||||||
| ABF Small Cap Val INV |
22,206 | 25,000 | (2,794 | ) | ||||||||
| Baron Growth |
23,891 | 25,000 | (1,109 | ) | ||||||||
| Baron Growth Inst |
24,093 | 23,891 | 202 | |||||||||
| Calamos Growth A |
264,358 | 208,015 | 56,343 | |||||||||
| FID Freedom K 2005 |
9,817 | 9,789 | 28 | |||||||||
| FID Freedom K 2015 |
177,056 | 172,298 | 4,758 | |||||||||
| FID Freedom K 2020 |
22,902 | 23,944 | (1,042 | ) | ||||||||
| Harbor Intl Inst |
47,594 | 50,727 | (3,133 | ) | ||||||||
| JPM Mid Cap Value A |
60,327 | 53,680 | 6,647 | |||||||||
| MFS Value Fund A |
36,842 | 40,297 | (3,455 | ) | ||||||||
| PIM Total RT Inst |
143,060 | 141,304 | 1,756 | |||||||||
| VANG Mid Cap IDX INV |
4,310 | 3,791 | 519 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total |
$ | 858,805 | 799,942 | 58,863 | ||||||||
|
|
|
|
|
|
|
|||||||
14
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
| 2010 | Aggregate Proceeds |
Cost | Net Realized Gains (Losses) |
|||||||||
| Investment Options |
||||||||||||
| Calamos Growth A |
$ | 206,149 | 164,402 | 41,747 | ||||||||
| FID Contrafund |
142,477 | 109,675 | 32,802 | |||||||||
| FID Diversified Intl |
516,051 | 421,246 | 94,805 | |||||||||
| FID Diversified Intl K |
90,087 | 90,407 | (320 | ) | ||||||||
| FID Freedom 2005 |
168,132 | 144,630 | 23,502 | |||||||||
| FID Freedom 2010 |
152,734 | 131,022 | 21,712 | |||||||||
| FID Freedom 2015 |
372,019 | 316,155 | 55,864 | |||||||||
| FID Freedom 2020 |
176,560 | 149,346 | 27,214 | |||||||||
| FID Freedom K 2005 |
1,591 | 1,585 | 6 | |||||||||
| FID Freedom K 2025 |
10,243 | 10,000 | 243 | |||||||||
| PIM Total RT Inst |
100,000 | 91,171 | 8,829 | |||||||||
| Spartan US EQ Index |
(941 | ) | (941 | ) | — | |||||||
|
|
|
|
|
|
|
|||||||
| Total |
$ | 1,935,102 | 1,628,698 | 306,404 | ||||||||
|
|
|
|
|
|
|
|||||||
15
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
| 2009 | Aggregate Proceeds |
Cost | Net Realized Gains (Losses) |
|||||||||
| Investment Options |
||||||||||||
| Calamos Growth A |
$ | 231,854 | 287,684 | (55,830 | ) | |||||||
| FID Contrafund |
23,523 | 33,443 | (9,920 | ) | ||||||||
| FID Diversified Intl |
205,168 | 267,691 | (62,523 | ) | ||||||||
| FID Freedom 2005 |
121,189 | 118,420 | 2,769 | |||||||||
| FID Freedom 2010 |
157,176 | 151,931 | 5,245 | |||||||||
| FID Freedom 2015 |
193,353 | 189,621 | 3,732 | |||||||||
| FID Freedom 2020 |
115,946 | 113,753 | 2,193 | |||||||||
| Fidelity US Govt Bond |
29,812 | 29,812 | — | |||||||||
| JPM Mid Cap Value A |
11,775 | 19,694 | (7,919 | ) | ||||||||
| PIM Total RT Inst |
352,659 | 350,178 | 2,481 | |||||||||
| Spartan US EQ Index |
50,367 | 53,846 | (3,479 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total |
$ | 1,492,822 | 1,616,073 | (123,251 | ) | |||||||
|
|
|
|
|
|
|
|||||||
16
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2011
6. Trust
The Company maintains a trust to provide a source of funds to assist the Company in meeting its obligations under the Plan. The rights of participants and their beneficiaries under the Plan are merely unsecured contractual rights against the Company and its participating subsidiaries. Participants and beneficiaries have no preferred claim on, or any beneficial ownership interest in, any assets of the trust. All assets of the trust are subject to the claims of the general creditors of the Company and its participating subsidiaries under Federal and state law should the Company and its participating subsidiaries become unable to pay their debts as they become due or become subject to Federal bankruptcy proceedings.
7. Related Party
The Plan invests in shares of registered investment companies managed by Fidelity Management Trust Company, custodian of the Plan. Beginning in 2010, members of the Board of Directors of STFC may also invest in Affiliated Stock.
8. Tax Status
The Plan is not, and is not intended to be, qualified under Section 401 of the Code. Consequently, an application for a favorable determination has not been filed with the Internal Revenue Service. The Plan does not have a tax filing requirement with the Internal Revenue Service, and therefore, no liability (or asset) or disclosure is included in the Plan’s financial statements.
Deferred amounts are subject to FICA and Medicare taxes and most local income taxes at the time of the deferral. Deferred amounts (and the earnings thereon) are not subject to Federal and most state income taxes until distributed from the Plan. Such distributions and the related taxes are the responsibility of the participants.
9. Right to Terminate
The Company may terminate the Plan at any time and for any reason. Following termination of the Plan, no additional deferrals may be made, but all existing participant accounts will continue to be administered in accordance with the Plan, unless the Company elects to accelerate distribution of all Plan accounts in accordance with Section 409A of the Code.
17
EXHIBIT INDEX
| EXHIBIT NO. | DESCRIPTION OF EXHIBIT | |
| 1 | Consent of Independent Registered Public Accounting Firm. | |