-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LT6XdpyCY490CRpx+dXj73gT9L1cfRO6lGnwXGE8DeUPnw0eNHfqTiPutcxl0aZR cqhLB3dVgTuLof/sT5RNqQ== /in/edgar/work/20000627/0000073952-00-000013/0000073952-00-000013.txt : 20000920 0000073952-00-000013.hdr.sgml : 20000920 ACCESSION NUMBER: 0000073952-00-000013 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO CASUALTY CORP CENTRAL INDEX KEY: 0000073952 STANDARD INDUSTRIAL CLASSIFICATION: [6331 ] IRS NUMBER: 310783294 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-05544 FILM NUMBER: 661233 BUSINESS ADDRESS: STREET 1: 136 N THIRD ST CITY: HAMILTON STATE: OH ZIP: 45025 BUSINESS PHONE: 5138673000 MAIL ADDRESS: STREET 1: 136 N THIRD ST CITY: HAMILTON STATE: OH ZIP: 45025 11-K 1 0001.txt ============================================================================== 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 For the fiscal year ended December 31, 1999 OR / / TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------ ------ Commission File No. 333-69895 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEE SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: OHIO CASUALTY CORPORATION 9450 SEWARD ROAD FAIRFIELD, OH 45014 Page 1 of 19 ============================================================================== REQUIRED INFORMATION The Ohio Casualty Insurance Company Employee Savings Plan ("Plan") is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements of net assets available for the benefits of the Plan as of December 31, 1999 and 1998, and the changes in net assets available for benefits for the year ended December 31, 1999, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein by this reference. The following exhibit is being filed herewith: Exhibit No. Description - ----------- ----------- 23 Independent Accountant's Consent 2 SIGNATURES 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. THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEE SAVINGS PLAN By: The Ohio Casualty Insurance Company Employee Savings Plan Retirement Committee June 27, 2000 /s/Elizabeth M. Riczko ------------------------------------------ Elizabeth M. Riczko, Senior Vice President (on behalf of Registrant and as Principal Accounting Officer) 3 APPENDIX 1 THE OHIO CASUALTY EMPLOYEE SAVINGS PLAN FINANCIAL STATEMENTS OF NET ASSETS AVAILABLE FOR THE BENEFITS OF THE PLAN AS OF DECEMBER 31, 1999 AND 1998, AND THE CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1999, SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1999 AND INDEPENDENT ACCOUNTANT'S REPORT. 4 THE OHIO CASUALTY EMPLOYEE SAVINGS PLAN TABLE OF CONTENTS - ------------------------------------------------------------------------------ Pages ----- Report of Independent Accountants..................................... 6 Financial Statements: Statements of Net Assets Available for Plan Benefits by Fund Information as of December 31, 1999 and 1998........ 7-8 Statement of Changes in Net Assets Available for Plan Benefits by Fund Information for the year ended December 31, 1999 .......................................... 9-10 Notes to the Financial Statements............................. 11-16 Supplement Schedules: Line 27A-Schedule of Assets Held for Investment Purposes at December 31, 1999 ....................................... 17 Line 27D-Schedule of Reportable Transactions for the year ended December 31, 1999 ....................... 18 Consent of Independent Accountants ................................... 19 5 Report of Independent Accountants To the Retirement Committee of The Ohio Casualty Insurance Company Employee Savings Plan In our opinion, the accompanying statements of net assets available for the benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of The Ohio Casualty Insurance Company Employee Savings Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets available for benefits for the year ended 1999 in conformity with accounting principles generally accepted in the United States. 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 of these statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) Assets Held for Investment Purposes and (2) 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. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules 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/ PricewaterhouseCoopers LLP June 16, 2000 6 THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND INFORMATION as of December 31, 1999
---------------------------------------------------------- Fund C Fund D Fund E Fund F ----------- ----------- --------------- ----------- CT&T FDS Montag Vanguard Company Interest & Caldwell Balanced Stock Income Growth Fund Index Fund ----------- ----------- --------------- ------------ Assets: Investments, at fair value: Cash and cash equivalents $ - $ 1,000 $ - $ - Ohio Casualty Corporation common stock 38,073,201 Group annuity contracts 37,265,007 CT&T FDS Montag & Caldwell Growth Fund 9,717,796 Vanguard Balanced Index Fund 10,247,518 ICAP FDS Equity Portfolio Vanguard Institutional Index Fund T. Rowe Price Small-Cap Stock Fund Loans to participants ------------ ------------ --------------- ------------ Subtotal 38,073,201 37,266,007 9,717,796 10,247,518 Accrued Interest 1,025 119,154 382 2,356 Receivable from sale of securities 1,118,099 ------------ ------------ --------------- ------------ Total assets 39,192,325 37,385,161 9,718,178 10,249,874 Liabilities: Cash overdraft (1,215,629) Miscellaneous payable (34) (110) (60) ------------ ------------ --------------- ------------ Total liabilities (1,215,663) (110) - (60) ------------ ------------ --------------- ------------ Net assets available for plan benefits $37,976,662 $37,385,051 $9,718,178 $10,249,814 ============ ============ =============== ============
------------------------------------------------------------------------ Fund G Fund H Fund I ------------ ------------- ------------- Vanguard T. Rowe Price ICAP FDS Institutional Small-Cap Equity Fund Index Fund Stock Fund Loan Fund Total ----------- ------------- ------------- ---------- ------------- Assets: Investments, at fair value: Cash and cash equivalents $ - $ 1,000 $ - $ - $ 2,000 Ohio Casualty Corporation common stock 38,073,201 Group annuity contracts 37,265,007 CT&T FDS Montag & Caldwell Growth Fund 9,717,796 Vanguard Balanced Index Fund 10,247,518 ICAP FDS Equity Portfolio 6,586,166 6,586,166 Vanguard Institutional Index Fund 26,533,908 26,533,908 T. Rowe Price Small-Cap Stock Fund 3,949,564 3,949,564 Loans to participants 2,522,184 2,522,184 ----------- ------------- ------------- ---------- ------------- Subtotal 6,586,166 26,534,908 3,949,564 2,522,184 $134,897,344 Accrued Interest 4,351 55 3,949 131,272 Receivable from sale of securities 1,118,099 ----------- ------------- ------------- ---------- ------------- Total assets 6,590,517 26,534,963 3,953,513 2,522,184 136,146,715 Liabilities: Cash overdraft (1,215,629) Miscellaneous payable (32) (47) (6) (289) ----------- ------------- ------------- ---------- ------------- Total liabilities (32) (47) (6) - (1,215,918) ----------- ------------- ------------- ---------- ------------- Net assets available for plan benefits $6,590,485 $26,534,916 $3,953,507 $2,522,184 $134,930,797 =========== ============= ============= ========== ==============
The accompanying notes are an integral part of the financial statements. 7 THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND INFORMATION as of December 31, 1998
--------------------------------------------------------- Fund C Fund D Fund E Fund F ------------ ----------- ----------- ------------ Dodge & Cox Company Interest Dodge & Cox Balanced Stock Income Bond Fund Fund ------------ ------------ ----------- ------------ Assets: Investments, at fair value: Cash and cash equivalents $ 55,968 $ 13,457 $ 999 $ 1,165 Ohio Casualty Corporation common stock 57,515,780 Group annuity contracts 25,811,570 Dodge & Cox Bond Fund 2,912,794 Dodge & Cox Balanced Fund 14,342,445 Dodge & Cox Stock Fund Vanguard Index 500 Stock PBHG Growth Fund Loans to participants ------------ ------------ ----------- ------------ Subtotal 57,571,748 25,825,027 2,913,793 14,343,610 Contributions receivable - participants 417 59 594 Accrued Interest 1,037 136,269 5 Due (to) from other funds 547,159 13,067 56,732 ------------ ------------ ----------- ------------ Total assets 57,573,202 26,508,455 2,926,924 14,400,936 Liabilities: Miscellaneous payable (55) ------------ ------------ ----------- ------------ Total liabilities - (55) - - ------------ ------------ ----------- ------------ Net assets available for plan benefits $57,573,202 $26,508,400 $2,926,924 $14,400,936 ============ ============ =========== ============
------------------------------------------------------------------------- Fund G Fund H Fund I ------------ ----------- ------------ ----------- ------------ Vanguard Dodge & Cox Index 500 PBHG Growth Stock Fund Stock Fund Fund Loan Fund Total ------------ ------------ ------------ ----------- ------------- Assets: Investments, at fair value: Cash and cash equivalents $ 1,000 $ 1,000 $ 1,360 $ - $ 74,949 Ohio Casualty Corporation common stock 57,515,780 Group annuity contracts 25,811,570 Dodge & Cox Bond Fund 2,912,794 Dodge & Cox Balanced Fund 14,342,445 Dodge & Cox Stock Fund 15,734,711 15,734,711 Vanguard Index 500 Stock 19,832,490 19,832,490 PBHG Growth Fund 8,791,150 8,791,150 Loans to participants 2,890,485 2,890,485 ------------ ------------ ------------ ----------- ------------- Subtotal 15,735,711 19,833,490 8,792,510 2,890,485 147,906,374 Contributions receivable - participants 924 746 65 2,805 Accrued Interest 3 5 3 137,322 Due (to) from other funds (276,587) (186,560) (153,811) - ------------ ------------ ------------ ----------- ------------- Total assets 15,460,051 19,647,681 8,638,767 2,890,485 148,046,501 Liabilities: Miscellaneous payable (1,085) (1,140) ------------ ------------ ------------ ----------- ------------- Total liabilities - (1,085) - - (1,140) ------------ ------------ ------------ ----------- ------------- Net assets available for plan benefits $15,460,051 $19,646,596 $8,638,767 $2,890,485 $148,045,361 =========== ============ ============ =========== =============
The accompanying notes are an integral part of the financial statements. 8 THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND INFORMATION for the year ended December 31, 1999
----------------------------------------------------------- Fund C Fund D Fund E ------------- ----------- ----------- --------------- CT&T FDS Montag Company Interest Dodge & Cox & Caldwell Stock Income Bond Fund Growth Fund ------------- ----------- ----------- --------------- Net appreciation (depreciation) in fair value of investments $(11,614,280) $ - $ (185,869) - Investment income: Interest 7,742 1,505,493 445 Dividends 2,313,865 159,234 ------------- ----------- ------------ --------------- Increase (decrease) from investments (9,292,673) 1,505,493 (26,190) - Contributions: Participants 54,444 1,473,718 364,220 Employer 2,993,485 ------------- ----------- ----------- --------------- Total contributions 3,047,929 1,473,718 364,220 - Benefits and withdrawals (12,726,112) (8,669,541) (622,898) Administrative expenses (356) (66,283) (4) Election of redistribution among funds (see Note 1) (249,661) 14,849,566 (2,272,031) 9,718,178 Interfund transfers (375,667) 1,783,698 (370,021) ------------- ----------- ----------- --------------- Increase (decrease) in net assets (19,596,540) 10,876,651 (2,926,924) 9,718,178 Net assets available for plan benefits: Beginning of year 57,573,202 26,508,400 2,926,924 - ------------- ----------- ----------- --------------- End of year $ 37,976,662 $37,385,051 $ - $9,718,178 ============= =========== =========== ===============
----------------------------------------------------------- Fund F Fund G -------------- ----------- ------------ ------------ Dodge & Cox Vanguard Balanced Balanced Dodge & Cox ICAP FDS Fund Index Fund Stock Fund Equity Fund ------------- ----------- ------------ ------------- Net appreciation (depreciation) in fair value of investments $ 1,001,547 $ - $ 2,553,818 $ - Investment income: Interest 2,395 4,502 Dividends 590,836 347,806 ------------- ------------ ------------ ------------- Increase (decrease) from investments 1,594,778 - 2,906,126 - Contributions: Participants 1,591,543 2,111,464 Employer ------------- ------------ ------------ ------------- Total contributions 1,591,543 - 2,111,464 - Benefits and withdrawals (2,659,763) (3,588,640) Administrative expenses (2) (7) Election of redistribution among funds (see Note 1) (14,108,678) 10,249,814 (16,580,818) 6,590,485 Interfund transfers (818,814) (308,176) ------------- ------------ ------------ ------------- Increase (decrease) in net assets (14,400,936) 10,249,814 (15,460,051) 6,590,485 Net assets available for plan benefits: Beginning of year 14,400,936 - 15,460,051 - ------------- ------------ ------------ ------------- End of year $ - $10,249,814 $ - $6,590,485 ============= ============ ============ =============
The accompanying notes are an integral part of the financial statements. 9 THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND INFORMATION for the year ended December 31, 1999
----------------------------------------------------------- Fund H Fund I ------------- ------------- ------------- ------------- Vanguard Vanguard T. Rowe Price Index 500 Institutional PBHG Growth Small-Cap Stock Fund Index Fund Fund Stock Fund ------------- ------------- ------------- ------------- Net appreciation (depreciation) in fair value of investments $ 2,896,149 $ 1,031,483 $ 6,626,095 $ - Investment income: Interest 192 55 4,062 Dividends 182,262 84,028 ------------- ------------- ------------- ------------- Increase (decrease) from investments 3,078,603 1,115,566 6,630,157 - Contributions: Participants 2,855,857 122,545 1,287,254 Employer ------------- ------------- ------------- ------------- Total contributions 2,855,857 122,545 1,287,254 - Benefits and withdrawals (3,489,362) (284,469) (1,377,552) Administrative expenses (9) (6) Election of redistribution among funds (see Note 1) (23,297,369) 25,216,688 (14,069,681) 3,953,507 Interfund transfers 1,205,684 364,586 (1,108,939) ------------- ------------- ------------- ------------- Increase (decrease) in net assets (19,646,596) 26,534,916 (8,638,767) 3,953,507 Net assets available for plan benefits: Beginning of year 19,646,596 8,638,767 ------------- ------------- ------------- ------------- End of year $ - $26,534,916 $ - $3,953,507 ============= ============= ============= =============
------------------------------ Loan Fund Total ------------- -------------- Net appreciation (depreciation) in fair value of investments $ - $ 2,308,943 Investment income: Interest 226,628 1,751,514 Dividends 3,678,031 ------------- -------------- Increase (decrease) from investments 226,628 7,738,488 Contributions: Participants 9,861,045 Employer 2,993,485 ------------- -------------- Total contributions - 12,854,530 Benefits and withdrawals (222,578) (33,640,915) Administrative expenses (66,667) Election of redistribution among funds (see Note 1) - Interfund transfers (372,351) - ------------- -------------- Increase (decrease) in net assets (368,301) (13,114,564) Net assets available for plan benefits: Beginning of year 2,890,485 148,045,361 ------------- -------------- End of year $2,522,184 $134,930,797 ============= ==============
The accompanying notes are an integral part of the financial statements. 10 THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEES SAVINGS PLAN NOTES TO THE FINANCIAL STATEMENTS 1. PLAN DESCRIPTION: The following description of The Ohio Casualty Insurance Company Employee Savings Plan (the Plan) provides only general information. Reference should be made to the Plan Agreement and The Ohio Casualty Employee Benefits Manual for a complete description of the Plan. a. GENERAL: The Plan, which is subject to provisions of the Employees Retirement Income Security Act of 1974 (ERISA), is a defined contribution plan covering all eligible employees of the Company who have elected to participate. Effective January 1, 1999, the Ohio Casualty Corporation Stock Fund (Fund C) was converted to an Employee Stock Ownership Plan, or ESOP, to allow participants to elect to receive directly the payment of dividends on their proportional shares of Ohio Casualty Stock in the Employee Savings Plan rather than reinvesting them in the plan. Fund C will consist of two subaccounts, an "ESOP Subaccount" and a "nonESOP Subaccount". The ESOP Subaccount will consist of all monies invested in Company Stock that are attributable to Company Contributions, Post-Tax Contributions and Pre-Tax Contributions made in Plan Years before the current Plan Year and Rollover Contributions reduced by any amounts that were transferred out of the ESOP Subaccount to the nonESOP portion of the Plan in accordance with the Plan Agreement. On January 1 of each Plan Year, all amounts then held in Fund C within the nonESOP Subaccount are transferred to the ESOP Subaccount. Effective July 1, 1998, the Plan was amended to include the following changes: - The Plan's eligibility requirements for participants was changed to 18 years of age without any service requirement. Previously the eligibility requirement was 21 years of age with 1 year of service. - The employee contribution maximum per year was increased from 16% to 22% of the employees' pay. - Participants will become immediately 100% vested in the value of the Ohio Casualty Insurance Company (the Company) matching contributions made on their behalf. This was changed from a gradual vesting period with 100% vesting occurring after 5 years of service or 2 years of Plan participation. - The Company's supplemental match, which was based on the Company's loss and expense ratio, was eliminated. 11 NOTES TO THE FINANCIAL STATEMENTS 1. CONTINUED: Effective January 1, 2000, the Plan was amended to eliminate four existing funds and add four new funds. The funds eliminated include the Dodge & Cox Bond Fund, the Dodge & Cox Balanced Fund, the Dodge & Cox Stock Fund, and the PBHG Growth Fund. The new funds include the CT&T FDS Montag & Caldwell Growth Fund (Fund E), the Vanguard Balanced Index Fund (Fund F), the ICAP FDS Equity Fund (Fund G), and the T. Rowe Price Small-Cap Stock Fund Index (Fund I). The reallocation from the eliminated funds to new or existing funds took place at the markets' close on December 31, 1999. b. CONTRIBUTIONS: Participants may contribute between 1-22% of their gross salary, either before or after-tax. The Company will match 50% of the first 6% of compensation that a participant contributes to the Plan. Effective July 1, 1998, employees are 100% vested in the value of their contributions and their investment earnings, as well as 100% vested in the value of the Company contributions and their investment earnings. Prior to July 1, 1998, Company contributions were fully vested after 5 years of service or 2 years of participation in the Plan. c. PARTICIPANT ACCOUNTS: Each participant's account is credited with the participant's contributions, the participant's share of the Company's contributions and an allocation of fund earnings. Allocations of fund earnings are based on participant's account balances, as defined by the Plan. The participant is entitled to their fully vested account balance. d. INVESTMENT OPTIONS: Participants direct the investment of their contributions. The prospectuses for these investment options describe the funds as follows: - Company Fund (Ohio Casualty Stock) - Funds are invested in Ohio Casualty Corporation Stock. - Interest Income (Cash Equivalents; Collective Trust Funds) - Funds are invested in guaranteed interest contracts, bank investment contracts and short-term government money market investments for current income preservation while maintaining high liquidity. - Dodge & Cox Bond Fund (Fixed Income Fund) - Funds are invested in a diversified portfolio of fixed-income securities, including U.S. government bonds, investment-grade securities, CD's and commercial paper for a high and stable rate of current income with long-term preservation of capital. (DISCONTINUED EFFECTIVE JANUARY 1, 2000) - Montag & Caldwell Fund (Large Cap Growth Equity Fund) - Funds are invested primarily in common stocks and convertible securities for long-term capital appreciation, and secondarily, current income. (NEW FUND EFFECTIVE JANUARY 1, 2000) 12 NOTES TO THE FINANCIAL STATEMENTS 1. CONTINUED: - Dodge & Cox Balanced Fund (Equity Growth & Income Fund) - Funds are invested in common stock and fixed-income securities for regular income, conservation of principal, and an opportunity for long-term growth of principal and income. (DISCONTINUED EFFECTIVE JANUARY 1, 2000) - Vanguard Balanced Index Fund (Balanced Index) - Funds are invested in equities and fixed-income securities for current income together with growth of income and capital over time. (NEW FUND EFFECTIVE JANUARY 1, 2000) - Dodge & Cox Stock Fund (Growth & Income Fund) - Funds are invested in the common stock, preferred stocks and securities convertible into common stock of well-established companies with long-term growth of principal and income. (DISCONTINUED EFFECTIVE JANUARY 1, 2000) - ICAP Large-Cap Value Equity Fund (Large-Cap Value Equity) - Funds are invested in stocks of large and mid capitalization companies for a superior total return. (NEW FUND EFFECTIVE JANUARY 1, 2000) - Vanguard Institutional Index Fund - Funds are generally invested in stocks, seeking investment results that correspond with the price and yield performance of the Standard & Poors' (S&P) 500 Index. (FORMERLY THE VANGUARD INDEX 500 STOCK FUND) - PBGH Growth Fund - Funds are invested primarily in common stock that possess the potential to appreciate significantly and attain strong growth in earnings. (DISCONTINUED EFFECTIVE JANUARY 1, 2000) - T. Rowe Price Small-Cap Equity Fund (Small-Cap Equity Fund) - Provides long-term capital growth by investing primarily in stocks of small to mid-size companies. (NEW EFFECTIVE JANUARY 1, 2000) e. FUND TRANSFERS: During 1999, the Plan was amended to allow the transfer of the assets from the Vanguard Index 500 Fund (Fund H) to the Vanguard Institutional Index Fund (Fund H). The Vanguard Institutional Index Fund provides the same investment objective as the Vanguard Index 500 Fund, while incurring lower operating expenses. On December 31, 1999, the investments in the Dodge & Cox Bond Fund, the Dodge & Cox Balanced Fund, the Dodge & Cox Stock Fund, and the PBGH Growth Fund were liquidated and reinvested to the fund of the participants' choice. Participants who had not instructed the Company to transfer their balances in the liquidated funds had any balance remaining automatically transferred on their behalf to the Interest Income Fund (Fund D). 13 NOTES TO THE FINANCIAL STATEMENTS 1. CONTINUED: f. BENEFIT PAYMENTS: Benefits are payable to employees upon termination of employment, retirement, disability retirement, death, in-service withdrawals, or for financial hardship as defined by the Internal Revenue Service. 2. ACCOUNTING POLICIES: a. BASIS OF ACCOUNTING: The Plan's policy is to prepare its financial statements on the accrual basis of accounting in accordance with generally accepted accounting principles. b. INVESTMENTS: Investments in bonds, notes, and stocks are valued at quoted market prices. Mutual funds are valued at net asset value. The group annuity contracts and investment contracts are valued at contract value as they are considered to be fully benefit-responsive. The crediting interest rates for the contracts were 6.23% and 6.35% as of December 31, 1999 and 1998, respectively. The fair value of the contract approximates contract value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded as earned. Dividend income is recorded on the ex-dividend date. The Plan presents in the statement of changes in net assets available for plan benefits by fund information the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. c. CONTRIBUTIONS: Contributions from participants and the Company are recorded in the month the Company makes payroll deductions from plan participants. d. BENEFIT PAYMENTS: Benefits are recorded by the Trustee when paid. e. ADMINISTRATIVE EXPENSES: Certain costs of administering the Plan are paid by the Company. These costs totaled $317,373 and $307,214 for the years ended December 31, 1999 and 1998, respectively. f. USE OF ESTIMATES: 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. 14 NOTES TO THE FINANCIAL STATEMENTS 3. PLAN TERMINATION: Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event of plan termination, the net assets will be distributed to participants and beneficiaries in proportion to their respective account balances. 4. TAX STATUS: The Plan received a favorable determination letter dated December 16, 1998, from the Internal Revenue Service indicating that the Plan is exempt from federal income taxes. The Plan has been amended subsequently; however, the Company believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 5. INVESTMENTS: The following investments represent 5% or more of the Plan's net assets:
FAIR VALUE ------------------------------ DECEMBER 31, DECEMBER 31, 1999 1998 ------------------------------ FUND C: Ohio Casualty Corporation, common stock $38,073,201 $57,515,780 FUND D: LaSalle National Trust, N.A., collective investment Contract 37,265,007 25,811,570 FUND E: CT&T FDS Montag & Caldwell Growth Fund 9,717,796 - FUND F: Dodge and Cox Balanced Fund (Liquidated 12/31/99) - 14,342,445 Vanguard Balanced Index Fund 10,247,518 - FUND G: Dodge and Cox Stock Fund (Liquidated 12/31/99) - 15,734,711 FUND H: Vanguard Institutional Index Fund (replaced Vanguard Index 500 Stock Fund 12/14/99) 26,533,908 19,832,490 FUND I: PBHG Growth Fund (Liquidated 12/31/99) - 8,791,150
15 NOTES TO THE FINANCIAL STATEMENTS 6. LOANS RECEIVABLE - PARTICIPANTS: Participants are permitted to borrow from the trust using their vested account balance as collateral. The minimum loan amount is $1,000 and the maximum loan amount is the lessor of $50,000 reduced by the participants' highest outstanding aggregate balance of loans from the Plan during the previous twelve (12) months, the total value of the employee's before-tax and after-tax accounts, or 50% of the vested value of the participants' accounts. Interest is charged at Chase Manhattan Bank's prime commercial rate plus 1%. Repayments of the loan are arranged through payroll deductions which may be specified up to 130 biweekly payments (five years). At December 31, 1999 there were 620 individual loans outstanding, maturing between January 2000 through December 2004, with interest rates ranging from 8.75% to 10.00%. 7. BENEFITS PAYABLE: Participant benefits and withdrawals payable were $2,002,797 and $2,127,656 as of December 31, 1999 and 1998, respectively, and are included in net assets available for plan benefits. Such amounts are reported as liabilities on Form 5500 filed with the Department of Labor. 16 THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEE SAVINGS PLAN LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES at December 31, 1999
Investments Units/Share Cost Fair Value - --------------------------------------------- ------------- ----------- ----------- Cash & Cash Equivalents 2,000 $ 2,000 $ 2,000 Company Stock 2,370,316 31,111,794 38,073,201 Interest Income 37,265,007 37,265,007 37,265,007 CT&T FDS Montag & Caldwell Growth Fund 277,651 9,717,796 9,717,796 ICAP FDS Inc Equity Portfolio 152,670 6,586,166 6,586,166 T. Rowe Price Small-Cap Stock Fund Index 173,227 3,949,564 3,949,564 Vanguard Balanced Index Fund Inc 506,801 10,247,518 10,247,518 Vanguard Institutional Index Fund 197,999 25,594,250 26,533,908 Loans to Participants, with interest rates ranging from 8.75% to 10% and maturity dates of 2000 through 2004 - 2,522,184 ---------------------------- Total Investments $124,474,095 $134,897,344 ============================
17 THE OHIO CASUALTY INSURANCE COMPANY EMPLOYEE SAVINGS PLAN LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS (SERIES OF TRANSACTIONS EXCEEDING 5% OF PLAN ASSETS) Year Ended December 31, 1999
Purchases Dispositions ------------------------ ---------------------------------------- Number of Number of Gain Fund Transactions Cost Transactions Proceeds (Loss) - ---------------------------------- ------------ ----------- ------------ ----------- ----------- Chase EOD Bank Liquidity 161 $42,050,802 156 $22,017,204 $ - Chase Bank Domestic Liquidity Fund 8 14,244,352 8 14,244,353 - Company Stock 37 6,090,891 7 2,529,195 792,552 Interest Income 44 20,801,224 32 9,347,786 - Dodge & Cox Stock Fund 48 4,211,324 26 22,406,713 4,716,791 Dodge & Cox Balanced Fund 46 3,357,989 24 18,701,981 2,321,295 CT&T FDS Montag & Caldwell Growth Fund 1 9,717,796 0 - - PBHG FDS Income Growth Fund 32 1,987,417 32 17,404,658 7,146,365 Vanguard Balanced Index Fund Inc 1 10,247,518 0 - - Vanguard Index TR 500 Portfolio 43 4,873,085 22 27,601,726 10,160,770 Vanguard Institutional Index Fund 7 25,895,724 2 393,299 91,825
18 EX-23 2 0002.txt CONSENT OF INDEPENDENT ACCOUNTANTS Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS ---------------------------------- We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-69895 and 333-87413) of Ohio Casualty Corporation of our report dated June 16, 2000 relating to the financial statements of Ohio Casualty Insurance Company Employee Savings Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Cincinnati, Ohio June 26, 2000 19 -----END PRIVACY-ENHANCED MESSAGE-----