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St Paul Capital LLC, et al. – ‘424B4’ on 5/10/95

As of: Wednesday, 5/10/95 · Accession #: 912057-95-3447 · File #s: 33-58491, -01

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/10/95  St Paul Capital LLC               424B4                  1:303K                                   Merrill Corp/FA
          St Paul Companies Inc/MN

Prospectus — Rule 424(b)(4)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B4       Prospectus                                            76    424K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Additional Dividends Additional Interest Adjustment of Conversion Price Amendments and Assignment Available Information Book-Entry-Only Issuance -- The Depository Trust Company Business Capitalization Certain Covenants of The St. Paul Certain Federal Income Tax Considerations Certain St. Paul Charter and Bylaws Provisions Consolidation, Merger or Sale of Assets Conversion Price Adjustments -- General Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of The St. Paul Conversion Rights Description of Depositary Shares Description of Securities Offered Description of St. Paul Capital Stock Description of St. Paul Series C Convertible Preferred Stock Description of the Convertible Subordinated Debentures Description of the Guarantee Dividends Events of Default Exchange of Preferred Securities for St. Paul Stock Experts Expiration of Conversion Rights General Incorporation of Certain Documents by Reference Index of Defined Terms Interest Investment banking-asset management Investment Considerations Liquidation Rights Market Prices of St. Paul Common Stock Modification of the Indenture Offering, The Optional Exchange for Depositary Shares Option to Defer Interest Payments Option to Defer Payment of Dividends Overview of Results Potential Deferral of Interest Payments Preferred Securities Prospectus Summary Ratio of Earnings to Fixed Charges of the Company Redemption Selected Financial and Operating Data Special Event Distribution St. Paul Capital St. Paul's Dividend Policy, The Subordinate Obligations Under Guarantee and Convertible Subordinated Debentures Subordination Tax Consequences of Deferral of Interest Payments on Convertible Subordinated Debentures The offering The St. Paul's Dividend Policy Underwriting Use of Proceeds Validity of the Securities Voting Rights
1	1st Page - Filing Submission
5	Available Information
6	Incorporation of Certain Documents by Reference
7	Prospectus Summary
9	The offering
18	Investment Considerations
"	Subordinate Obligations Under Guarantee and Convertible Subordinated Debentures
"	Option to Defer Payment of Dividends
19	Tax Consequences of Deferral of Interest Payments on Convertible Subordinated Debentures
"	Expiration of Conversion Rights
20	Use of Proceeds
"	Ratio of Earnings to Fixed Charges of the Company
21	Capitalization
22	Market Prices of St. Paul Common Stock
"	The St. Paul's Dividend Policy
23	Selected Financial and Operating Data
24	Overview of Results
"	Underwriting
25	Investment banking-asset management
29	Business
36	St. Paul Capital
"	Description of Securities Offered
37	Preferred Securities
"	General
"	Dividends
38	Additional Dividends
39	Conversion Rights
41	Conversion Price Adjustments -- General
"	Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of The St. Paul
44	Optional Exchange for Depositary Shares
45	Redemption
46	Special Event Distribution
47	Liquidation Rights
48	Voting Rights
50	Book-Entry-Only Issuance -- The Depository Trust Company
52	Description of St. Paul Series C Convertible Preferred Stock
53	Description of Depositary Shares
56	Description of the Guarantee
57	Certain Covenants of The St. Paul
58	Subordination
"	Amendments and Assignment
"	Consolidation, Merger or Sale of Assets
59	Description of the Convertible Subordinated Debentures
"	Interest
"	Option to Defer Interest Payments
60	Additional Interest
63	Events of Default
65	Modification of the Indenture
66	Description of St. Paul Capital Stock
67	Certain St. Paul Charter and Bylaws Provisions
68	Certain Federal Income Tax Considerations
69	Potential Deferral of Interest Payments
"	Exchange of Preferred Securities for St. Paul Stock
70	Adjustment of Conversion Price
72	Validity of the Securities
"	Experts
73	Index of Defined Terms

424B4 1st Page of 76 TOC ↑Top Previous Next ↓Bottom Just 1st
3,600,000 PREFERRED SECURITIES

[LOGO] ST. PAUL CAPITAL L.L.C.
6% CONVERTIBLE MONTHLY INCOME PREFERRED SECURITIES
(CONVERTIBLE MIPS-SM-*)
(LIQUIDATION PREFERENCE $50 PER SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY, AND CONVERTIBLE INTO
COMMON STOCK OF,
THE ST. PAUL COMPANIES, INC.
---------

The 6% convertible monthly income preferred securities (the "Preferred
Securities") representing preferred limited liability company interests offered
hereby are being issued by St. Paul Capital L.L.C. ("St. Paul Capital"), a
Delaware limited liability company. All of the common limited liability company
interests of St. Paul Capital (the "Common Securities") are owned directly or
indirectly by The St. Paul Companies, Inc., a Minnesota corporation ("The St.
Paul" or the "Company"). St. Paul Capital was formed solely for the purpose of
issuing securities and investing the proceeds from the issuance thereof in debt
securities of The St. Paul. The proceeds from the offering of the Preferred
Securities will be used by St. Paul Capital to purchase from The St. Paul its 6%
Convertible Subordinated Debentures due 2025 (the "Convertible Subordinated
Debentures") having the terms described herein.

Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions from St. Paul Capital at an annual rate of 6% of the
liquidation preference of $50 per Preferred Security, accruing from the date of
original issuance and payable monthly in arrears on the last day of each
calendar month of each year, commencing May 31, 1995 ("dividends"). See
"Description of Securities Offered -- Preferred Securities -- Dividends". The
preferred limited liability company interests represented by the Preferred
Securities will have a preference with respect to cash distributions and amounts
payable on liquidation over the Common Securities owned directly or indirectly
by The St. Paul.
(CONTINUED ON NEXT PAGE)
------------------

SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN MATERIAL RISKS
TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE PREFERRED SECURITIES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE
PREFERRED SECURITIES AND THE CONVERTIBLE SUBORDINATED DEBENTURES MAY BE DEFERRED
AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES.
----------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------

[Enlarge/Download Table]

PROCEEDS TO
INITIAL PUBLIC UNDERWRITING ST. PAUL CAPITAL
OFFERING PRICE COMMISSION (1) (2)(3)
--------------------- --------------------- ---------------------

Per Preferred Security.......................... $ 50.00 (2) $ 50.00
Total(4)........................................ $180,000,000 (2) $180,000,000
<FN>
--------------------------
(1) St. Paul Capital and The St. Paul have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting".
(2) In view of the fact that the proceeds of the sale of the Preferred
Securities will ultimately be used by St. Paul Capital to purchase
convertible subordinated debentures of The St. Paul, the Underwriting
Agreement provides that The St. Paul will pay to the Underwriters, as
compensation ("Underwriters' Compensation"), $1.125 per Preferred Security
(or $4,050,000 in the aggregate). See "Underwriting".
(3) Expenses of the offering which are payable by The St. Paul are estimated to
be $410,000.
(4) St. Paul Capital and The St. Paul have granted the Underwriters an option
for 30 days to purchase up to an additional 540,000 Preferred Securities at
the initial public offering price per Preferred Security solely to cover
over-allotments. The St. Paul will pay to the Underwriters, as
Underwriters' Compensation, $1.125 per Preferred Security purchased
pursuant to this option. If such option is exercised in full, the total
initial public offering price, underwriting commission and proceeds to St.
Paul Capital will be $207,000,000, $4,657,500, and $207,000,000,
respectively. See "Underwriting".

----------------

The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company on or about May 16, 1995.
--------------------------
* MIPS is a service mark of Goldman, Sachs & Co.

GOLDMAN, SACHS & CO. J.P. MORGAN SECURITIES INC.
---------

The date of this Prospectus is May 9, 1995.

424B4 2nd Page of 76 TOC 1st Previous Next ↓Bottom Just 2nd
(CONTINUED FROM PREVIOUS PAGE)

In the event of the liquidation of St. Paul Capital, holders of the
Preferred Securities will be entitled to receive for each Preferred Security a
liquidation preference of $50 plus accumulated and unpaid dividends to the date
of payment, subject to certain limitations. See "Description of Securities
Offered -- Preferred Securities -- Liquidation Rights".

Each Preferred Security is convertible in the manner described herein at the
option of the holder, at any time prior to the Conversion Expiration Date (as
hereinafter defined), into shares of Common Stock, without par value, of The St.
Paul ("St. Paul Common Stock") at the rate of 0.8475 shares of St. Paul Common
Stock for each Preferred Security (equivalent to a conversion price of $59 per
share of St. Paul Common Stock), subject to adjustment in certain circumstances.
Whenever The St. Paul issues shares of St. Paul Common Stock upon conversion of
Preferred Securities, The St. Paul will issue, together with each share of St.
Paul Common Stock, under the circumstances described herein, one Stock Purchase
Right (each, a "Stock Purchase Right") entitling the holder thereof, under
certain circumstances, to purchase shares of Series A Junior Participating
Preferred Stock, without par value, of The St. Paul. See "Description of
Securities Offered -- Preferred Securities -- Conversion Rights" and
"Description of St. Paul Capital Stock". The last reported sale price of St.
Paul Common Stock, which is listed under the symbol "SPC" on the New York Stock
Exchange ("NYSE"), on May 9, 1995 was $48 3/8 per share. See "Market Prices of
St. Paul Common Stock". On and after May 31, 1999, St. Paul Capital may, at its
option, cause the conversion rights of holders of the Preferred Securities to
expire. St. Paul Capital may exercise this option only if for 20 trading days
within any period of 30 consecutive trading days, including the last trading day
of such period, the Current Market Price (as defined herein) of St. Paul Common
Stock exceeds 120% of the conversion price of the Preferred Securities, subject
to adjustment in certain circumstances. In order to exercise its conversion
expiration option, St. Paul Capital must issue a press release announcing the
date upon which conversion rights will expire (the "Conversion Expiration
Date"), prior to the opening of business on the second trading day after a
period in which the condition in the preceding sentence has been met, but in no
event prior to May 31, 1999. The Conversion Expiration Date shall be a date not
less than 30 and not more than 60 days following the date of the press release
described above. See "Description of Securities Offered -- Preferred Securities
-- Conversion Rights".

The Preferred Securities are also subject to exchange in the manner
described herein, in whole but not in part, into depositary shares (the
"Depositary Shares"), each representing ownership of 1/100th of a share of
Series C Cumulative Convertible Preferred Stock, without par value (liquidation
preference $5000 per share), of The St. Paul ("St. Paul Series C Convertible
Preferred Stock"), deposited with the Depositary (as defined herein) upon a vote
of the holders of a majority of the aggregate liquidation preference of all
outstanding Preferred Securities following the failure of holders of Preferred
Securities to receive dividends in full for 15 consecutive months (including any
such failure caused by the deferral of interest payments on the Convertible
Subordinated Debentures). Each Depositary Share will entitle the holder thereof
to all proportional rights and preferences of the St. Paul Series C Convertible
Preferred Stock (including dividend, voting, conversion and liquidation rights
and preferences). The St. Paul Series C Convertible Preferred Stock will have
dividend and conversion features substantially similar to those of the Preferred
Securities (adjusted proportionately per Depositary Share) but will not be
subject to mandatory redemption. See "Description of Securities Offered --
Preferred Securities -- Optional Exchange for Depositary Shares", "--
Description of St. Paul Series C Convertible Preferred Stock" and "--
Description of Depositary Shares".

In the event that, at any time after the Conversion Expiration Date, less
than 5% of the Preferred Securities remain outstanding, such Preferred
Securities shall be redeemable at the option of St. Paul Capital, in whole but
not in part, at a redemption price equal to the liquidation preference for such
Preferred Securities plus accumulated and unpaid dividends (whether or not
earned or declared). The Preferred Securities have no maturity date, although
they are subject to mandatory redemption upon the

424B4 3rd Page of 76 TOC 1st Previous Next ↓Bottom Just 3rd
repayment at maturity or as a result of acceleration of the Convertible
Subordinated Debentures and St. Paul Capital is subject to dissolution in the
event of a Special Event (as defined herein), as described below. See
"Description of Securities Offered -- Preferred Securities -- Redemption".

Under certain circumstances following the occurrence of a Special Event, The
St. Paul may cause St. Paul Capital to be dissolved and cause the Convertible
Subordinated Debentures to be distributed to the holders of the Preferred
Securities. If Convertible Subordinated Debentures are so distributed, The St.
Paul will use its best efforts to have such Convertible Subordinated Debentures
listed on the same exchange on which the Preferred Securities are then listed.
See "Description of Securities Offered -- Preferred Securities -- Special Event
Distribution" and "-- Description of the Convertible Subordinated Debentures".

The St. Paul will irrevocably and unconditionally guarantee, on a
subordinated basis and to the extent set forth herein, the payment of dividends
by St. Paul Capital on the Preferred Securities (but only if and to the extent
declared from funds of St. Paul Capital legally available therefor), the
redemption price (including all accumulated and unpaid dividends) payable with
respect to the Preferred Securities and payments on liquidation with respect to
the Preferred Securities (but only to the extent of the assets of St. Paul
Capital available for distribution to holders of the Preferred Securities) (the
"Guarantee"). The Guarantee will be unsecured, will be subordinate to all other
liabilities of The St. Paul and will rank PARI PASSU (I.E., on a parity) with
the most senior preferred or preference stock now or hereafter issued by The St.
Paul. Given such subordination, if The St. Paul is unable to make timely
payments on the Convertible Subordinated Debentures, there is a substantial
likelihood that it would also be unable to make timely payments on the
Guarantee. See "Description of Securities Offered -- Description of the
Guarantee".

St. Paul Capital's ability to pay amounts due on the Preferred Securities is
solely dependent upon The St. Paul's ability to make payments on the Convertible
Subordinated Debentures. Interest payment periods on the Convertible
Subordinated Debentures are monthly but may be extended by The St. Paul for up
to 60 months (a "deferral of interest payments"), in which event monthly
dividend payments on the Preferred Securities by St. Paul Capital would be
deferred (but would continue to compound monthly). Prior to the end of any such
deferral of interest payments, The St. Paul may further defer interest payments,
provided that all such deferrals may not exceed 60 months in the aggregate, and
provided further that no such deferral may extend the stated maturity date of
the Convertible Subordinated Debentures. After The St. Paul has paid all accrued
and unpaid interest (including compound interest) following a deferral of
interest payments, it may again defer interest payments for up to 60 months,
subject to the preceding sentence. At the end of such deferral of interest
payments, The St. Paul is required to pay all accrued and unpaid interest
(including compound interest) and upon such repayment St. Paul Capital would be
able to pay all accumulated and unpaid dividends on the Preferred Securities
(including Additional Dividends, as defined herein). If The St. Paul does not
make interest payments on the Convertible Subordinated Debentures, St. Paul
Capital would not be able to declare or pay dividends on the Preferred
Securities. The Guarantee is a full and unconditional guarantee from the time of
its issuance, but does not apply to any payment of dividends unless and until
such dividends are declared. The failure of holders of the Preferred Securities
to receive dividends in full for 15 consecutive months (including any such
failure caused by a deferral of interest payments on the Convertible
Subordinated Debentures) would trigger the right of such holders to obtain
Depositary Shares representing St. Paul Series C Convertible Preferred Stock in
the manner described herein. See "Description of Securities Offered -- Preferred
Securities -- Dividends -- Description of the Guarantee" and "-- Description of
the Convertible Subordinated Debentures".

The Convertible Subordinated Debentures are subordinate in right of payment
to all Senior Indebtedness (as defined under "Description of Securities Offered
-- Description of the Convertible Subordinated Debentures -- Subordination") of
The St. Paul. As of March 31, 1995, The St. Paul had approximately $628 million
of indebtedness constituting Senior Indebtedness and no indebtedness or other
obligations that would rank equally with the Convertible Subordinated
Debentures. The Convertible Subordinated Debentures will not be guaranteed by
St. Paul Capital Holdings, Inc.

424B4 4th Page of 76 TOC 1st Previous Next ↓Bottom Just 4th
The Preferred Securities have been approved for listing on the NYSE, subject
to notice of issuance, under the symbol "SPC pfM".

The Preferred Securities will be represented by a global certificate or
certificates registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Preferred Securities will be shown on,
and transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described herein, Preferred Securities in
certificated form will not be issued in exchange for the global certificate or
certificates. See "Description of Securities Offered -- Preferred Securities --
Book-Entry-Only Issuance -- The Depository Trust Company".

--------------

FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE FOR THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.

--------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED
SECURITIES OFFERED HEREBY AND ST. PAUL COMMON STOCK AT LEVELS ABOVE THOSE WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON
THE NYSE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

424B4 5th Page of 76 TOC 1st Previous Next ↓Bottom Just 5th
AVAILABLE INFORMATION

The St. Paul is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by The St. Paul may be inspected and copied at the
public reference facilities maintained by the Commission in Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Seven World Trade Center, 7th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials may be obtained upon written request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, such material may also be inspected and
copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.

The St. Paul and St. Paul Capital have filed with the Commission a
registration statement on Form S-3 (together with all amendments and exhibits,
the "Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby made
to the Registration Statement.

No separate financial statements of St. Paul Capital have been included
herein. The St. Paul and St. Paul Capital do not consider that such financial
statements would be material to holders of Preferred Securities as St. Paul
Capital is a newly organized special purpose entity, has no operating history
and no independent operations and is not engaged in, and does not propose to
engage in, any activity other than as described under "St. Paul Capital".
Further, The St. Paul believes that financial statements of St. Paul Capital are
not material to the holders of the Preferred Securities as the Preferred
Securities have been structured to provide a guarantee by The St. Paul of the
Preferred Securities such that the holders of the Preferred Securities with
respect to the payment of dividends and amounts upon liquidation, dissolution
and winding-up are at least in the same position VIS-A-VIS the assets of The St.
Paul as a preferred stockholder of The St. Paul. See "St. Paul Capital" and
"Description of Securities Offered -- Preferred Securities", "-- Description of
the Guarantee" and "-- Description of the Convertible Subordinated Debentures".
The St. Paul beneficially owns directly or indirectly all of the Common
Securities of St. Paul Capital. The preferred limited liability company
interests represented by the Preferred Securities will have a preference with
respect to cash distributions and amounts payable on liquidation over the Common
Securities owned directly or indirectly by The St. Paul.

Each holder of Preferred Securities will be furnished annually with The St.
Paul's Annual Report to Shareholders, containing audited consolidated financial
statements of The St. Paul, as soon as such report is available after the end of
The St. Paul's fiscal year.

424B4 6th Page of 76 TOC 1st Previous Next ↓Bottom Just 6th
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission pursuant to the Exchange
Act are incorporated herein by reference:

1. The St. Paul's Annual Report on Form 10-K for the year ended
December 31, 1994.

2. The St. Paul's Current Report on Form 8-K, dated January 24, 1995.

3. The description of the Preferred Securities contained in St. Paul
Capital's Registration Statement on Form 8-A, dated April 21, 1995.

4. The descriptions of the St. Paul Common Stock and Stock Purchase
Rights contained in The St. Paul's Registration Statements on Form 8-A, each
dated October 17, 1991.

All documents filed by The St. Paul with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering described herein shall hereby be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained herein or in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

The St. Paul will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference into this
Prospectus, other than exhibits to such information (unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
directed to The St. Paul Companies, Inc., 385 Washington Street, St. Paul,
Minnesota 55102, Attention: Bruce A. Backberg, Vice President and Corporate
Secretary, telephone (612) 221-7911.

424B4 7th Page of 76 TOC 1st Previous Next ↓Bottom Just 7th
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS (INCLUDING THE NOTES THERETO)
APPEARING ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS
OTHERWISE SPECIFIED, REFERENCES HEREIN TO THE "COMPANY" OR "THE ST. PAUL" REFER
TO THE ST. PAUL COMPANIES, INC. AND ITS CONSOLIDATED SUBSIDIARIES. PROSPECTIVE
INVESTORS SHOULD CAREFULLY READ THE ENTIRE PROSPECTUS.

THE ST. PAUL COMPANIES, INC.

The St. Paul is a management company principally engaged, through its
subsidiaries, in three industry segments: property-liability insurance
underwriting (primarily through its wholly-owned subsidiary, St. Paul Fire and
Marine Insurance Company), insurance brokerage (primarily through its brokerage
subsidiary, Minet) and investment banking-asset management (through its 77%
stake in The John Nuveen Company). As a management company, The St. Paul
oversees the operations of its subsidiaries and provides them with capital,
management and administrative services. According to "Fortune" magazine's most
recent rankings, in terms of total assets, The St. Paul was the 25th largest
diversified financial company in the United States at December 31, 1993. At
March 23, 1995, The St. Paul and its subsidiaries employed approximately 12,900
persons.

The Company's principal executive offices are located at 385 Washington
Street, St. Paul, Minnesota 55102, and its telephone number is (612) 221-7911.

ST. PAUL CAPITAL L.L.C.

St. Paul Capital is a limited liability company formed under the laws of
Delaware and is managed by The St. Paul and The St. Paul's wholly-owned
subsidiary St. Paul Capital Holdings, Inc. ("St. Paul Holdings" and,
collectively with The St. Paul, the "Managing Members"). The Managing Members
own all of the Common Securities of St. Paul Capital. The Common Securities are
nontransferable and are and will be beneficially owned directly or indirectly by
the Company. The Managing Members are the sole members of St. Paul Capital and
are also the only managers of St. Paul Capital. St. Paul Capital's principal
executive offices are located at 385 Washington Street, St. Paul, Minnesota
55102, telephone: (612) 221-7911. The principal executive offices of the
Managing Members are located at 385 Washington Street, St. Paul, Minnesota
55102, telephone: (612) 221-7911.

Pursuant to St. Paul Capital's Amended and Restated Limited Liability
Company Agreement (the "L.L.C. Agreement"), the Managing Members have unlimited
liability for the debts, obligations and liabilities of St. Paul Capital in the
same manner as a general partner of a Delaware limited partnership (which does
not include obligations to holders of Preferred Securities in their capacity as
such). The holders of Preferred Securities will not be generally liable for the
debts, obligations or liabilities of St. Paul Capital solely by reason of being
a member of St. Paul Capital (subject to their obligation to repay any funds
wrongfully distributed to them).

St. Paul Capital exists exclusively for the purposes of issuing its
Preferred Securities and Common Securities and investing the proceeds thereof,
together with substantially all the capital contributed by the Managing Members
in respect of the Common Securities, in the Convertible Subordinated Debentures,
and may engage in no other activities now or in the future. The payment by St.
Paul Capital of dividends due on the Preferred Securities is solely dependent on
its receipt of interest payments on the Convertible Subordinated Debentures. To
the extent that aggregate interest payments on the Convertible Subordinated
Debentures exceed aggregate dividends on the Preferred Securities and such
dividends have been paid in full, St. Paul Capital may at times have excess
funds, which shall be distributed to the Company.

424B4 8th Page of 76 TOC 1st Previous Next ↓Bottom Just 8th
SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN MATERIAL RISKS
TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE PREFERRED SECURITIES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE
PREFERRED SECURITIES AND THE CONVERTIBLE SUBORDINATED DEBENTURES MAY BE DEFERRED
AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES.

[GRAPHIC]

1. ST. PAUL CAPITAL. The issuer of the Preferred Securities is a special
purpose Delaware limited liability company formed by The St. Paul and its
wholly-owned subsidiary St. Paul Holdings for the exclusive purposes of issuing
the Preferred Securities (which will constitute all of St. Paul Capital's
preferred limited liability company interests) and investing the proceeds
thereof, together with substantially all the capital contributed by the Managing
Members in respect of the Common Securities, in the Convertible Subordinated
Debentures. The Managing Members will own 100% of the Common Securities of St.
Paul Capital. St. Paul Capital will be taxed as a partnership for federal income
tax purposes.

2. PREFERRED SECURITIES. The Preferred Securities issued by St. Paul Capital
are preferred limited liability company interests that are convertible into St.
Paul Common Stock. Distributions on Preferred Securities are not eligible for
the dividends received deduction for federal income tax purposes.

3. PREFERRED SECURITIES PROCEEDS INVESTED IN CONVERTIBLE SUBORDINATED
DEBENTURES OF THE ST. PAUL. Proceeds of Preferred Securities will be used by St.
Paul Capital to purchase Convertible Subordinated Debentures of The St. Paul
having a maturity of 30 years from date of issue and the same economic terms as
the Preferred Securities. The St. Paul may elect to defer interest payments on
the Convertible Subordinated Debentures for up to 60 months, but only if The St.
Paul neither declares nor pays any dividends on its capital stock during such
deferral period. If The St. Paul defers interest payments on the Convertible
Subordinated Debentures, St. Paul Capital would be unable to pay dividends on
the Preferred Securities. The Convertible Subordinated Debentures are not
guaranteed by St. Paul Holdings.

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4. REPAYMENT OF CONVERTIBLE SUBORDINATED DEBENTURES. The St. Paul repays the
Convertible Subordinated Debentures in cash or the Convertible Subordinated
Debentures are converted into St. Paul Common Stock.

5. OWNERSHIP OF COMMON SECURITIES AND GUARANTEE. The Managing Members own
100% of the Common Securities of St. Paul Capital. The St. Paul guarantees, on
an unsecured and subordinated basis, (a) the payment of dividends (but only if
and to the extent declared from funds legally available therefor) on the
Preferred Securities, (b) the payment of the redemption price payable with
respect to the Preferred Securities (but only to the extent that funds of St.
Paul Capital are legally available therefor) and (c) payments on liquidation
with respect to the Preferred Securities (but only to the extent that assets of
St. Paul Capital are available for distribution to holders of Preferred
Securities).

THE OFFERING

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Securities Offered................ 3,600,000 of St. Paul Capital's 6% Convertible Monthly
Income Preferred Securities, liquidation preference $50
per security. Additionally, St. Paul Capital and The St.
Paul have granted the Underwriters an option for 30 days
to purchase up to an additional 540,000 Preferred
Securities at the initial public offering price solely
to cover over-allotments, if any.
Dividends......................... Dividends on the Preferred Securities will be cumulative
from the date of original issuance of the Preferred
Securities and will be payable at the annual rate of 6%
of the liquidation preference of $50 per Preferred
Security. Dividends will be paid monthly in arrears on
the last day of each calendar month, commencing May 31,
1995. The proceeds from the offering of the Preferred
Securities will be invested in the Convertible Sub-
ordinated Debentures. Interest payment periods on the
Convertible Subordinated Debentures are monthly but may
be extended from time to time by The St. Paul for up to
60 months, in which event St. Paul Capital would be
unable to make monthly dividend payments on the
Preferred Securities during the period of any such
extension. During such period, interest on the
Convertible Subordinated Debentures will compound
monthly and Additional Dividends (as defined below) will
continue to accumulate on the Preferred Securities.
Selection of such an extended interest payment period is
referred to herein as a "deferral of interest payments".
"Additional Dividends", as used herein, means amounts
payable upon any dividend arrearages on the Preferred
Securities in order to provide, in effect, monthly
compounding on such dividend arrearages. See "Dividend
Deferral Provisions" below. The failure of holders of
the Preferred Securities to receive dividends in full
(including arrearages) for 15 consecutive months would
trigger the right of such holders to obtain depositary
shares (the "Depositary Shares"), each representing
1/100th of a share of Series C Cumulative Convertible
Preferred Stock, without par value, of The St. Paul
(liquidation preference $5000 per share) ("St. Paul
Series C Convertible Preferred Stock"), upon the
affirmative vote or written consent of the holders of a
majority of

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the aggregate liquidation preference of the outstanding
Preferred Securities, as described below under "Optional
Exchange for Depositary Shares". See "Investment
Considerations -- Option to Defer Payment of Dividends,"
"Investment Considerations -- Tax Consequences of
Deferral of Interest Payments on Convertible
Subordinated Debentures," "Description of Securities
Offered -- Description of the Convertible Subordinated
Debentures -- Option to Defer Interest Payments" and
"Description of Securities Offered -- Preferred
Securities -- Optional Exchange for Depositary Shares".
Dividend Deferral Provisions...... The St. Paul has the right, at any time and from time to
time, to defer interest payments on the Convertible
Subordinated Debentures. Monthly dividends on the
Preferred Securities would be deferred by St. Paul
Capital (but would continue to accrue Additional
Dividends) during any such deferral of interest pay-
ments. The St. Paul will have the right during any such
deferral of interest payments to make partial payments
of interest and at the end of such periods may pay all
interest then accrued and unpaid (together with compound
interest). Upon a partial payment of interest by The St.
Paul, St. Paul Capital may pay partial PRO RATA
dividends to holders of Preferred Securities, and upon
the payment of all accrued and unpaid interest on the
Convertible Subordinated Debentures, may pay in full all
accumulated and unpaid dividends (including Additional
Dividends). Prior to the end of such deferral of
interest payments, The St. Paul may further defer
interest payments, provided that all such deferrals may
not exceed 60 months in the aggregate nor extend beyond
the stated maturity of the Convertible Subordinated
Debentures. After The St. Paul has paid all accrued and
unpaid interest (including compound interest) following
a deferral of interest payments, it may again defer
interest payments for up to 60 months, subject to the
preceding sentence. St. Paul Capital will give written
notice of The St. Paul's deferral of interest payments
to the holders of Preferred Securities no later than the
last date on which it would be required to notify the
NYSE of the record or payment date of the related
dividend, which is currently 10 days prior to such
record or payment date. See "Investment Considerations
-- Option to Defer Payment of Dividends," "Description
of Securities Offered -- Preferred Securities --
Dividends" and "Description of Securities Offered --
Description of the Convertible Subordinated Debentures
-- Option to Defer Interest Payments". Should a deferral
of interest payments occur, St. Paul Capital, except in
very limited circumstances, will continue to accrue
income for United States income tax purposes, which will
be allocated to holders of Preferred Securities in
advance of any corresponding cash distribution. See
"Investment Considerations -- Tax Consequences of
Deferral of Interest Payments on Convertible
Subordinated Debentures" and "Certain Federal Income Tax
Considerations -- Potential Deferral of Interest
Payment".

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Liquidation Preference............ $50 per Preferred Security, plus an amount equal to any
accumulated and unpaid dividends (whether or not earned
or declared).
Conversion into St. Paul Common
Stock............................ Each Preferred Security is convertible in the manner
described below at the option of the holder, at any time
prior to the Conversion Expiration Date (as defined
below), into shares of St. Paul Common Stock, without
par value (the "St. Paul Common Stock"), at the rate of
0.8475 shares of St. Paul Common Stock for each
Preferred Security (equivalent to a conversion price of
$59 per share of St. Paul Common Stock). Such con-
version price will be subject to adjustment in certain
circumstances, including the payment or distribution by
The St. Paul of certain types of dividends,
distributions or other payments to holders of St. Paul
Common Stock; subdivisions and combinations of St. Paul
Common Stock; and certain payments in respect of tender
or exchange offers for St. Paul Common Stock. Such
conversion price will also be subject to adjustment in
the event that The St. Paul is a party to certain
transactions (including, without limitation, certain
mergers, consolidations, sales of all or substantially
all of the assets of The St. Paul, recapitalizations or
reclassifications of St. Paul Common Stock or any
compulsory share exchange) as a result of which shares
of St. Paul Common Stock are converted into the right ro
receive securities, cash or other property. See
"Description of Securities Offered -- Preferred
Securities -- Conversion Rights -- Conversion Price
Adjustments -- General" and " -- Conversion Price
Adjustments -- Merger, Consolidation or Sale of Assets
of The St. Paul".
A holder of a Preferred Security wishing to exercise its
conversion right shall surrender such Preferred
Security, together with an irrevocable conversion
notice, to the Conversion Agent (as defined herein)
acting on behalf of the holders of Preferred Securities,
which shall exchange the Preferred Security for a
portion of the Convertible Subordinated Debentures held
by St. Paul Capital and immediately convert such
Convertible Subordinated Debentures and any accrued and
unpaid interest thereon into St. Paul Common Stock. A
holder of Preferred Securities should not recognize gain
or loss upon the exchange through the Conversion Agent
of Preferred Securities for a proportionate share of the
Convertible Subordinated Debentures held by St. Paul
Capital. Except to the extent attributable to accrued
but unpaid interest on the Convertible Subordinated
Debentures, a holder should not recognize gain or loss
upon the exchange through the Conversion Agent of
Convertible Subordinated Debentures for St. Paul Common
Stock. See "Certain Federal Income Tax Considerations --
Exchange of Preferred Securities for St. Paul Stock". On
and after May 31, 1999, and provided that St. Paul
Capital is current in the payment of dividends on the
Preferred Securities, St. Paul Capital may, at its
option, cause the conversion rights of holders of the
Preferred Securities to expire. St. Paul Capital may
exercise this

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option only if for 20 trading days within any period of
30 consecutive trading days, including the last trading
day of such period, the Current Market Price (as herein
defined) of St. Paul Common Stock exceeds 120% of the
conversion price of the Preferred Securities, subject to
adjustment in certain circumstances. In order to
exercise its conversion expiration option, St. Paul
Capital must issue a press release for publication on
the Dow Jones News Service announcing the Conversion
Expiration Date prior to the opening of business on the
second trading day after a period in which the condition
in the preceding sentence has been met, but in no event
prior to May 31, 1999. The press release shall announce
the Conversion Expiration Date and provide the current
conversion price and Current Market Price of the
Preferred Securities, in each case as of the close of
business on the trading day next preceding the date of
the press release. Written notice containing the same
information set forth in the press release will be sent
by first-class mail to each holder of Preferred
Securities not more than four business days after
issuance of the press release. The Conversion Expiration
Date shall be a date not less than 30 and not more than
60 days following the date of such press release or, if
St. Paul Capital has not exercised its conversion
expiration option, the earlier of the date of an
Exchange Election referred to below under "Optional
Exchange for Depositary Shares" or two business days
prior to the scheduled date for the mandatory redemption
of the Preferred Securities. See "Description of
Securities Offered -- Preferred Securities -- Conversion
Rights".
Whenever The St. Paul issues shares of Common Stock upon
conversion of Preferred Securities, The St. Paul will
issue, together with each such share of Common Stock,
one Stock Purchase Right (as defined herein) entitling
the holder thereof, under certain circumstances, to
purchase Series A Preferred Stock of The St. Paul (or
other securities in lieu thereof) pursuant to the
Shareholder Protection Rights Agreement, dated as of
December 4, 1989, as amended (the "Rights Agreement"),
between The St. Paul and First Chicago Trust Company of
New York, as Rights Agent. The Stock Purchase Rights
will expire on December 19, 1999, subject to extension
to December 18, 2002 under certain circumstances or
earlier redemption by The St. Paul.
Redemption........................ If at any time following the Conversion Expiration Date,
less than 5% of the Preferred Securities remain
outstanding, such Preferred Securities shall be
redeemable at the option of St. Paul Capital, as a whole
but not in part, at a redemption price of $50 per
Preferred Security together with accumulated and unpaid
dividends (whether or not earned or declared) (the
"Redemption Price"). The Preferred Securities have no
maturity date, although they are subject to mandatory
redemption upon the repayment at maturity (on May 31,
2025) or as a result of acceleration of the Convertible
Subordinated Debentures. See "Description of Securities
Offered -- Description of the

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Convertible Subordinated Debentures -- Events of
Default". The Preferred Securities are not otherwise
redeemable for any reason, including in the event that
St. Paul Capital should become subject to federal or
state taxation. To the extent that such taxation or
other events cause St. Paul Capital to have insufficient
funds to pay full dividends on the Preferred Securi-
ties, the holders will have available to them the
exchange option described below. Upon the occurrence of
certain Tax Events (as defined herein) St. Paul Capital
may be dissolved and the Convertible Subordinated
Debentures distributed to holders of the Preferred
Securities. See "-- Special Event Distribution".
Special Event Distribution........ Upon the occurrence of a Tax Event (as defined herein),
the Managing Members may, and upon the occurrence of an
Investment Company Event (as defined herein) the
Managing Members shall, dissolve St. Paul Capital and,
after satisfaction of liabilities to creditors of St.
Paul Capital as required by applicable law, cause the
Convertible Subordinated Debentures to be distributed to
the holders of the Preferred Securities in connection
with the liquidation of St. Paul Capital. In the case of
a Special Event that is a Tax Event (as defined herein),
however, the Managing Members may elect not to dissolve
St. Paul Capital and to cause the Preferred Securities
to remain outstanding. See "Description of Securities
Offered -- Preferred Securities -- Special Event
Distribution" and "-- Description of the Convertible
Subordinated Debentures".
Optional Exchange for Depositary
Shares........................... Upon the failure of holders of the Preferred Securities
to receive, for 15 consecutive months, the full amount
of dividend payments (including any arrearages and
including any such failure caused by a deferral of
interest payments on the Convertible Subordinated
Debentures) the holders of a majority of the aggregate
liquidation preference of Preferred Securities then out-
standing, voting as a class at a special meeting of
members called for such purpose or by written consent,
may, at their option, direct the Conversion Agent to
exchange all (but not less than all) of the Preferred
Securities for Convertible Subordinated Debentures held
by St. Paul Capital, and to immediately exchange the
Convertible Subordinated Debentures and any accrued and
unpaid interest thereon on behalf of such holders for
Depositary Shares, each representing a 1/100th interest
in a
share of St. Paul Series C Convertible Preferred Stock
at the Exchange Price (as defined under "Description of
Securities Offered -- Preferred Securities --
Dividends"). Each Depositary Share will entitle the
holder thereof to a proportionate share in all rights
and preferences of the St. Paul Series C Convertible
Preferred Stock (including dividend, voting, conversion
and liquidation rights and preferences). The St. Paul
Series C Convertible Preferred Stock will have dividend,
conversion and other terms substantially similar to the
terms of the Preferred Securities (adjusted
proportionately per Depositary Share), except

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that, among other things, the holders of St. Paul Series
C Convertible Preferred Stock will have the right to
elect two additional directors of The St. Paul whenever
dividends on the St. Paul Series C Convertible Preferred
Stock are in arrears for 18 months (including for this
purpose any arrearage with respect to the Preferred
Securities) and the St. Paul Series C Convertible
Preferred Stock will not be subject to mandatory
redemption. A holder of Preferred Securities should not
recognize gain or loss upon the exchange through the
Conversion Agent of Preferred Securities for a
proportionate share of the Convertible Subordinated
Debentures held by St. Paul Capital. Except to the
extent attributable to accrued but unpaid interest on
the Convertible Subordinated Debentures, a holder should
not recognize gain or loss upon the exchange through the
Conversion Agent of Convertible Subordinated Debentures
for Depository Shares. See "Certain Federal Income Tax
Considerations -- Exchange of Preferred Securities for
St. Paul Stock". If the Preferred Securities are
exchanged for Depositary Shares, The St. Paul will use
its best efforts to have the Depositary Shares listed on
the NYSE or any other exchange on which the Preferred
Securities may then be listed. See "Description of
Securities Offered -- Description of St. Paul Series C
Convertible Preferred Stock" and "Description of
Securities Offered -- Description of Depositary Shares"
for a description of the principal terms of the St. Paul
Series C Convertible Preferred Stock and the Depositary
Shares, respectively.
Guarantee......................... Pursuant to a Guarantee Agreement (the "Guarantee"), The
St. Paul will irrevocably and unconditionally agree, on
a subordinated basis, to guarantee the payment in full
of (a) the dividends (including any Additional Dividends
thereon) payable by St. Paul Capital on the Preferred
Securities, if and to the extent declared from funds of
St. Paul Capital legally available therefor, (b) the
redemption price (including all accumulated and unpaid
dividends) of the Preferred Securities, to the extent
funds of St. Paul Capital are legally available
therefor, and (c) payments on liquidation with respect
to the Preferred Securities, to the extent the assets of
St. Paul Capital are available for distribution to
holders of the Preferred Securities. A holder of
Preferred Securities may enforce The St. Paul's
obligations under the Guarantee directly against The St.
Paul, and The St. Paul waives any right to require that
an action be brought against St. Paul Capital or any
other person before proceeding against The St. Paul. The
Guarantee will be unsecured and will be subordinated to
all liabilities of The St. Paul and will rank PARI PASSU
(I.E., on a parity) with the most senior preferred
shares hereafter issued by The St. Paul and PARI PASSU
with any guarantee now or hereafter entered into by The
St. Paul in respect of any preferred or preference stock
of any affiliate of The St. Paul. On the bankruptcy,
liquidation or winding-up of The St. Paul, its
obligations under the Guarantee will rank junior to all
its other liabilities and, therefore, funds may not be
available for payment under the Guarantee. See
"Investment Considerations --

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Subordinate Obligations Under Guarantee and Convertible
Subordinated Debentures," "Investment Considerations --
Dependence on Subordinated Debenture Payments" and
"Description of Securities Offered -- Description of the
Guarantee".
Voting Rights..................... Generally, holders of the Preferred Securities will not
have any voting rights. However, upon an Event of
Default under the Convertible Subordinated Debentures
(as described under "Description of Securities Offered
-- Description of the Convertible Subordinated
Debentures -- Events of Default"), a failure by St. Paul
Capital to pay dividends in full (including any
arrearages) on the Preferred Securities for 15
consecutive months (including any such failure caused by
a deferral by The St. Paul of interest payments on the
Convertible Subordinated Debentures) or a default by The
St. Paul under the Guarantee, the holders of the
Preferred Securities will be entitled to appoint and
authorize a special trustee (the "Special Trustee") to
enforce St. Paul Capital's rights under the Convertible
Subordinated Debentures, enforce The St. Paul's
obligations under the Guarantee and, to the extent
permitted by law, declare and pay dividends on the
Preferred Securities to the extent funds are legally
available therefor. The St. Paul has agreed to execute
and deliver such documents as may be necessary or
appropriate for the Special Trustee to enforce such
rights and obligations. In addition, if for any reason
(including a deferral by The St. Paul of interest
payments on the Convertible Subordinated Debentures)
holders of Preferred Securities fail to receive, for 15
consecutive months, the full amount of dividend payments
(including any arrearages), the holders of the Preferred
Securities will be entitled to call a special meeting of
members for the purpose of deciding whether to exchange
all Preferred Securities then outstanding for Depositary
Shares, as described above under "Optional Exchange for
Depositary Shares". See "Description of Securities
Offered -- Preferred Securities -- Dividends".
Use of Proceeds................... The proceeds to be received by St. Paul Capital from the
sale of the Preferred Securities will be invested in the
Convertible Subordinated Debentures of The St. Paul,
which, after paying the expenses associated with this
Offering, will use such funds for general corporate
purposes, which may include possible acquisitions and
the reduction of short-term indebtedness. Pending such
use, the net proceeds may be temporarily invested in
short-term debt obligations. See "Use of Proceeds".
Convertible Subordinated
Debentures....................... The Convertible Subordinated Debentures will have a
maturity of 30 years and will bear interest at the rate
of 6% per annum, payable monthly in arrears. The St.
Paul has the right to select an interest payment period
or periods longer than one month (during which period or
periods interest will compound monthly), provided that
any such deferral of interest payments will not

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exceed 60 months and provided further that a deferral of
interest payments may not extend the stated maturity of
the Convertible Subordinated Debentures. Accordingly,
dividend payments on the Preferred Securities may not be
deferred beyond the stated maturity of the Convertible
Subordinated Debentures. If The St. Paul defers interest
payments longer than one month, it will be prohibited
from paying dividends on any of its capital stock and
making certain other restricted payments until monthly
interest payments are resumed and all accumulated and
unpaid interest (including any interest payable to
effect monthly compounding) on the Convertible
Subordinated Debentures is brought current. The St. Paul
will have the right to make partial payments of such
interest during a deferral of interest payments. The
failure by The St. Paul to make interest payments during
a deferral of interest payments would not constitute a
default or an event of default under The St. Paul's
currently outstanding indebtedness. The Convertible
Subordinated Debentures are convertible into shares of
St. Paul Common Stock at the option of the holders
thereof and are exchangeable for Depositary Shares
representing St. Paul Series C Convertible Preferred
Stock as described above under "Optional Exchange for
Depositary Shares". St. Paul Capital will covenant not
to convert Convertible Subordinated Debentures except
pursuant to a notice of conversion delivered to the
Conversion Agent by a holder of Preferred Securities.
The payment of the principal and interest on the
Convertible Subordinated Debentures will be subordinate
in right of payment to all Senior Indebtedness (as
defined under "Description of Securities Offered --
Description of the Convertible Subordinated Debentures
-- Subordination") of The St. Paul. As of March 31,
1995, The St. Paul had $628 million of indebtedness
constituting Senior Indebtedness and no indebtedness or
other obligations that would rank equally with the
Convertible Subordinated Debentures. See "Investment
Considerations -- Subordinate Obligations Under
Guarantee and Convertible Subordinated Debentures" and
"Investment Considerations -- Dependence on Subordinated
Debenture Payments". The Convertible Subordinated
Debentures will not be guaranteed by St. Paul Holdings.
While the Preferred Securities are outstanding, St. Paul
Capital will not have the ability to amend the Indenture
(as defined below) or the terms of the Convertible
Subordinated Debentures in a way that adversely affects
the holders of the Preferred Securities, or to waive an
event of default under the Indenture without the consent
of holders of 66 2/3% in aggregate liquidation
preference of the Preferred Securities then outstanding.
See "Description of Securities Offered -- Description of
the Convertible Subordinated Debentures -- Modification
of Indenture".

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SUMMARY FINANCIAL AND OPERATING DATA

The selected data presented below under the captions "Income Statement Data"
and "Balance Sheet Data" for, and as of the end of, each of the years in the
five-year period ended December 31, 1994, are derived from the consolidated
financial statements of the Company, which consolidated financial statements
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants. The consolidated financial statements as of December 31, 1994 and
1993, and for each of the years in the three-year period ended December 31,
1994, and the report thereon, are incorporated by reference elsewhere in this
prospectus. The information presented below under the caption "Underwriting
Operations" is unaudited. The financial data for the three months ended March
31, 1995 and 1994, respectively, have been derived from the Company's unaudited
consolidated financial statements, which, in the opinion of management, include
all adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the results of operations and financial position for the periods
and as of the dates presented. The results of operations for the three months
ended March 31, 1995 may not be indicative of results for the entire fiscal
year. The table should be read in conjunction with "Overview of Results" and the
consolidated financial statements and the notes thereto incorporated by
reference in this Prospectus. Numbers of shares and per share figures reflect a
two-for-one stock split in June 1994.

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THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------------ ---------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

INCOME STATEMENT DATA:
Premiums earned......................... $ 946,070 $ 845,402 $ 3,412,081 $ 3,178,338 $ 3,143,246 $ 3,146,238 $ 2,893,959
Net investment income................... 186,389 168,408 694,594 661,106 666,374 675,604 669,989
Insurance brokerage fees and
commissions............................ 67,061 66,450 303,152 283,680 280,836 284,702 256,354
Investment banking-asset management..... 53,616 53,598 211,789 241,730 218,825 175,610 126,607
Realized gains(1)....................... 2,977 21,783 41,974 58,254 155,735 38,008 9,864
Other................................... 11,346 8,134 37,695 37,064 33,676 31,538 48,464
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total revenues...................... 1,267,459 1,163,775 4,701,285 4,460,172 4,498,692 4,351,700 4,005,237
----------- ----------- ----------- ----------- ----------- ----------- -----------
Insurance losses and loss adjustment
expenses............................... 680,439 667,688 2,461,698 2,303,738 2,690,046 2,365,569 2,119,776
Policy acquisition, operating and
administrative expenses(2)............. 427,296 404,269 1,636,428 1,593,063 1,998,156 1,422,511 1,352,034
Interest expense........................ 11,578 9,815 39,581 40,765 35,553 35,559 29,522
Income tax expense...................... 37,550 17,566 120,750 94,997 7,458 122,999 112,635
Cumulative net benefit of accounting
changes, net of taxes.................. 0 0 0 0 76,483 0 0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)................... $ 110,596 $ 64,437 $ 442,828 $ 427,609 $ (156,038) $ 405,062 $ 391,270
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Fully diluted net income (loss) per
common share........................... $1.23 $0.71 $4.93 $4.73 $(1.94) $4.50 $4.16
Cash dividends declared per common
share.................................. $0.40 $0.375 $1.50 $1.40 $1.36 $1.30 $1.20
BALANCE SHEET DATA:
Total assets............................ $17,651,999 $16,741,009 $17,495,820 $17,149,196 $15,392,054 $14,744,717 $13,907,293
Total debt.............................. 628,178 584,737 622,624 639,729 566,717 486,779 473,829
Change in unrealized appreciation of
investments, net of taxes(3)........... 185,960 (311,937) (574,896) 525,175 (23,815) 55,093 (67,558)
Common shareholders' equity............. 3,008,801 2,690,833 2,732,934 3,005,128 2,202,499 2,532,841 2,196,371
Book value per common share............. 35.67 32.02 32.46 35.47 26.18 29.78 26.00
Number of common shares outstanding..... 84,341,306 84,041,142 84,202,417 84,714,676 84,118,554 85,042,484 84,468,058
UNDERWRITING OPERATIONS:
GAAP underwriting result................ $ (15,452) $ (83,057) $ (113,008) $ (150,255) $ (566,886) $ (163,782) $ (120,730)
Statutory combined ratio:(4)............
Loss and loss expense ratio........... 71.9 79.0 72.1 72.5 85.6 75.2 73.2
Underwriting expense ratio............ 30.4 31.2 30.2 32.0 32.2 29.4 30.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Combined ratio........................ 102.3 110.2 102.3 104.5 117.8 104.6 103.2
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Combined ratio including policyholders'
dividends.............................. 102.4 110.2 102.3 104.7 118.2 105.0 104.2
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
<FN>
----------------------------------------
(1) 1992 realized gains include $98 million from the sale of a minority
interest in The John Nuveen Company.
(2) 1992 operating and administrative expenses include a $365 million
write-down of the goodwill associated with the Company's investment in
Minet.
(3) The change for 1993 includes an increase of $502 million due to the
adoption of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities".
(4) The combined ratio is not derived from the audited consolidated financial
statements.

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INVESTMENT CONSIDERATIONS

PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES SHOULD CAREFULLY REVIEW THE
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND SHOULD PARTICULARLY
CONSIDER THE FOLLOWING MATTERS:

SUBORDINATE OBLIGATIONS UNDER GUARANTEE AND CONVERTIBLE SUBORDINATED DEBENTURES

The St. Paul's obligations under the Convertible Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness of The St.
Paul. The St. Paul's obligations under the Guarantee are subordinate to all
liabilities of The St. Paul and will rank PARI PASSU (I.E., on a parity) with
the most senior preferred shares hereafter issued by The St. Paul and PARI PASSU
with any guarantee now or hereafter entered into by The St. Paul in respect of
any preferred or preference stock of any affiliate of The St. Paul. There are no
terms of the Preferred Securities, the Convertible Subordinated Debentures or
the Guarantee that limit The St. Paul's ability to incur additional
indebtedness, including indebtedness that ranks senior to the Convertible
Subordinated Debentures and the Guarantee, or the ability of its subsidiaries to
incur additional indebtedness.

The Guarantee is a full and unconditional guarantee of payment to the
holders of the Preferred Securities of accumulated and unpaid monthly dividends
declared by St. Paul Capital from funds legally available therefor, amounts
payable on redemption out of funds legally available therefor, and the amounts
available for distribution to holders of Preferred Securities on liquidation of
St. Paul Capital. In each case, payments on the Preferred Securities are covered
by the Guarantee only to the extent that St. Paul Capital has funds on hand
legally available therefor and such payments do not otherwise violate applicable
law. If The St. Paul were to default on its obligation to pay interest or
amounts payable on redemption or maturity of the Convertible Subordinated
Debentures, St. Paul Capital would lack legally available funds for the payment
of dividends or amounts payable on redemption of the Preferred Securities, and
in such event holders of the Preferred Securities would not be able to rely upon
the Guarantee for payment of such amounts. On the bankruptcy, liquidation or
winding-up of The St. Paul, its obligations under the Guarantee would rank
junior to all of its liabilities and, therefore, funds might not be available in
such circumstances for payment pursuant to the Guarantee. The Convertible
Subordinated Debentures are not guaranteed by St. Paul Holdings. See
"Description of Securities Offered -- Description of the Guarantee" and
"Description of Securities Offered -- Description of the Convertible
Subordinated Debentures -- Subordination".

DEPENDENCE ON CONVERTIBLE SUBORDINATED DEBENTURE PAYMENTS

St. Paul Capital's ability to pay amounts due on the Preferred Securities is
solely dependent upon The St. Paul's ability to make payments on the Convertible
Subordinated Debentures as and when required. Since The St. Paul is also the
Guarantor of the Preferred Securities, in the event that St. Paul Capital were
unable to make payments on the Preferred Securities as and when required, there
is a substantial likelihood that The St. Paul would be unable to make payments
on the Guarantee as and when required.

OPTION TO DEFER PAYMENT OF DIVIDENDS

The St. Paul has the right to extend interest payment periods on the
Convertible Subordinated Debentures for up to 60 months, and, as a consequence,
monthly dividends on the Preferred Securities would be deferred (but Additional
Dividends will continue to accumulate monthly) by St. Paul Capital during any
such deferral of interest payments. In the event that The St. Paul exercises
this right, neither The St. Paul nor any direct or indirect majority-owned
subsidiary of The St. Paul (excluding The John Nuveen Company ("Nuveen") and
Nuveen's consolidated subsidiaries) shall declare or pay any dividend on, or
redeem, purchase, otherwise acquire or make a liquidation payment with respect
to, any of its common or preferred stock or make any guarantee payment with
respect to the foregoing (other than payments under the Guarantee or dividend or
guarantee payments to The St. Paul from a direct or indirect majority-owned
subsidiary), during any such deferral period and until all dividend arrearages
have been paid in full. No deferral of interest payments may extend the stated
maturity of the Convertible Subordinated Debentures. See "Description of
Securities Offered -- Description of the Convertible Subordinated Debentures --
Option to Defer Interest Payments".

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TAX CONSEQUENCES OF DEFERRAL OF INTEREST PAYMENTS ON CONVERTIBLE SUBORDINATED
DEBENTURES

Should a deferral of interest payments occur, St. Paul Capital, except in
very limited circumstances, will continue to accrue income for United States
federal income tax purposes which will be allocated to holders of record of
Preferred Securities in advance of any corresponding cash distribution. As a
result, such holders will include such interest in gross income for United
States federal income tax purposes in advance of the receipt of cash and will
not receive the cash related to such income if such a holder disposes of its
Preferred Securities prior to the record date for payment of dividends. See
"Certain Federal Income Tax Considerations -- Potential Deferral of Interest
Payment".

TAX CONSEQUENCES OF AN EXCHANGE FOR DEPOSITARY SHARES

In the event that a deferral of interest payments or the failure to pay
interest continues for more than 15 months, the holders of a majority of the
aggregate liquidation preference of the Preferred Securities then outstanding
may cause the exchange of all of the Preferred Securities for Depositary Shares
representing interests in St. Paul Series C Convertible Preferred Stock at the
Exchange Price. For a discussion of the taxation of such an exchange to holders,
including the possibility that holders who exchange their Preferred Securities
for Depositary Shares will be subject to additional income tax to the extent
accrued but unpaid interest on the Convertible Subordinated Debentures is
converted into accumulated and unpaid dividends on the St. Paul Series C
Convertible Preferred Stock represented by Depositary Shares received in
exchange for the Preferred Securities, see "Certain Federal Income Tax
Considerations -- Exchange of Preferred Securities for St. Paul Stock".

EXPIRATION OF CONVERSION RIGHTS

On and after May 31, 1999, St. Paul Capital may, subject to certain
conditions, at its option, cause the conversion rights of holders of Preferred
Securities to expire, provided that St. Paul Capital is current in the payment
of dividends on the Preferred Securities and the Current Market Price (as
defined herein) of St. Paul Common Stock exceeds 120% of the conversion price of
the Preferred Securities for a specified period. See "Description of Securities
Offered -- Preferred Securities -- Expiration of Conversion Rights".

UNCERTAINTY OF DEDUCTIBILITY OF INTEREST ON THE CONVERTIBLE SUBORDINATED
DEBENTURES

The offering of the Preferred Securities and the issuance of the related
Convertible Subordinated Debentures is a relatively novel type of financing
transaction. The Company's ability to deduct the interest on the Convertible
Subordinated Debentures depends upon whether the Convertible Subordinated
Debentures are characterized as debt instruments for federal income tax
purposes, taking all the relevant facts and circumstances into account. The
Company believes that the Convertible Subordinated Debentures are debt
instruments for federal income tax purposes and that interest on the Convertible
Subordinated Debentures will, therefore, be deductible by the Company. There is
no clear authority on the appropriate characterization for federal income tax
purposes of instruments such as the Convertible Subordinated Debentures when
they are issued in connection with an offering of securities such as the
Preferred Securities. If the interest on the Convertible Subordinated Debentures
is not deductible by the Company, the Company would have significant additional
income tax liabilities. Nondeductability of such interest would constitute a Tax
Event. Upon the occurrence of a Tax Event, the Managing Members may cause St.
Paul Capital to be dissolved and cause the Convertible Subordinated Debentures
to be distributed to the holders of the Preferred Securities in connection with
the liquidation of St. Paul Capital. See "Description of Securities Offered --
Preferred Securities -- Special Event Distribution" and "-- Description of the
Convertible Subordinated Debentures".

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USE OF PROCEEDS

St. Paul Capital will invest the proceeds from the Offering in the
Convertible Subordinated Debentures. The St. Paul, after payment of the
Underwriters' Compensation and other expenses of the Offering, will use the net
proceeds of $180,000,000 ($207,000,000 if the Underwriters' over-allotment
option is exercised in full) from the sale of the Convertible Subordinated
Debentures to St. Paul Capital for general corporate purposes, which may include
possible acquisitions and the reduction of outstanding commercial paper bearing
interest at rates ranging between 6% and 7%. Pending such use, the net proceeds
may be temporarily invested in short-term debt obligations.

RATIO OF EARNINGS TO FIXED CHARGES OF THE COMPANY

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THREE MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
------------------------ ---------------------------------------------------------------
1995 1994 1994 1993 1992(1) 1991 1990
----- ----- ----- ----- ----------- ----- -----

Ratio of earnings to fixed charges..... 9.49 5.69 9.99 8.96 -- 9.06 9.26
Ratio of earnings to combined fixed
charges and preferred stock
dividends............................. 7.53 4.51 7.73 6.99 -- 7.06 7.19
<FN>
------------------------
(1) The 1992 loss was inadequate to cover "fixed charges" by $229.6 million,
and "combined fixed charges and preferred stock dividends" by $248.0
million.

Earnings consist of income before income taxes plus fixed charges, net of
capitalized interest. Fixed charges consist of interest expense before reduction
for capitalized interest and one-third of rental expense, which is considered to
be representative of an interest factor.

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CAPITALIZATION

The following table sets forth the debt and capitalization of The St. Paul
at March 31, 1995, and as adjusted to reflect the consummation of the offering
made hereby, assuming no exercise of the Underwriters' over-allotment option.
The table should be read in conjunction with the consolidated financial
statements of The St. Paul incorporated by reference herein. See "Use of
Proceeds," "Selected Financial and Operating Data," and "Description of
Securities Offered -- Preferred Securities".

[Enlarge/Download Table]

MARCH 31, 1995
------------------------
ACTUAL AS ADJUSTED
---------- ------------
(DOLLARS IN THOUSANDS)

Commercial paper................................................. $ 284,119 $ 284,119
Medium-term notes................................................ 204,434 204,434
9 3/8% notes..................................................... 99,974 99,974
Guaranteed ESOP debt............................................. 33,334 33,334
Pound sterling loan notes........................................ 6,317 6,317
---------- ------------
Total debt................................................... 628,178 628,178
---------- ------------
Company-obligated minority interest in St. Paul Capital (holding
$180 million principal amount Convertible Subordinated
Debentures)..................................................... -- 180,000
Preferred Stock:
Series B convertible preferred stock, 1,450,000 shares
authorized; 1,012,496 shares issued and outstanding............. 145,709 145,709
Guaranteed obligation -- PSOP.................................... (137,589) (137,589)
---------- ------------
Net convertible preferred stock.............................. 8,120 8,120
---------- ------------
Common shareholders' equity:
Common stock, without par value, 240,000,000 shares authorized;
84,202,417 shares issued and outstanding........................ 449,863 449,863
Retained earnings................................................ 2,436,682 2,436,682
Guaranteed obligation -- ESOP.................................... (40,627) (40,627)
Unrealized appreciation of investments........................... 199,908 199,908
Unrealized loss on foreign currency translation.................. (37,025) (37,025)
---------- ------------
Total common shareholders' equity............................ 3,008,801 3,008,801
---------- ------------
Total capitalization......................................... $3,645,099 $3,825,099
---------- ------------
---------- ------------

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MARKET PRICES OF ST. PAUL COMMON STOCK

St. Paul Common Stock is traded on the NYSE under the symbol "SPC". At May
1, 1995, there were 7,647 holders of record of St. Paul Common Stock and
84,373,672 shares outstanding. The following table sets forth the high and low
sale prices for St. Paul Common Stock, as reported by the NYSE, for the periods
indicated. All amounts presented reflect the effect of a two-for-one stock split
in 1994.

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CASH
DIVIDEND
CALENDAR YEAR HIGH LOW DECLARED
--------------------------------------------------------------- ------- ------- -----------

1993:
1st Quarter.................................................. $41 5/8 $37 3/4 $ .35
2nd Quarter.................................................. 41 7/16 39 1/4 .35
3rd Quarter.................................................. 46 11/16 40 5/16 .35
4th Quarter.................................................. 48 1/2 43 1/4 .35
1994:
1st Quarter.................................................. $44 3/8 $38 13/16 $ .375
2nd Quarter.................................................. 41 11/16 37 7/8 .375
3rd Quarter.................................................. 44 1/2 39 1/2 .375
4th Quarter.................................................. 45 1/8 40 .375
1995:
1st Quarter.................................................. $51 $43 1/2 $ .40
2nd Quarter (through May 1).................................. 51 7/8 47 3/4 --

Cash dividends paid in 1993 and 1994 were $1.39 per share and $1.48 per
share, respectively. For the price of the St. Paul Common Stock as of a recent
date, see the cover page of this Prospectus.

THE ST. PAUL'S DIVIDEND POLICY

The St. Paul paid a cash dividend of $.40 per share for the first quarter of
1995 and has declared a cash dividend of $.40 per share for the second quarter
of 1995. The St. Paul paid a cash dividend of $.375 per share in respect of each
quarter of 1994. All amounts have been adjusted to reflect a two-for-one stock
split in 1994. The levels of future payments will be determined by The St.
Paul's Board of Directors based on such considerations as the level of earnings
from operations, capital requirements and the financial condition and prospects
of The St. Paul. The St. Paul and its majority-owned subsidiaries would also be
prohibited from paying dividends on St. Paul Common Stock at any time during a
deferral of interest payments with respect to the Convertible Subordinated
Debentures, when there is an Event of Default (as defined under "Description of
Securities Offered -- Description of the Convertible Subordinated Debentures --
Events of Default") under the Convertible Subordinated Debentures or when The
St. Paul has failed to make a payment required under the Guarantee. See
"Description of Securities Offered -- Description of the Guarantee -- Certain
Covenants of The St. Paul".

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SELECTED FINANCIAL AND OPERATING DATA

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INCOME STATEMENT DATA:
Premiums earned......................... $ 946,070 $ 845,402 $ 3,412,081 $ 3,178,338 $ 3,143,246 $ 3,146,238 $ 2,893,959
Net investment income................... 186,389 168,408 694,594 661,106 666,374 675,604 669,989
Insurance brokerage fees and
commissions............................ 67,061 66,450 303,152 283,680 280,836 284,702 256,354
Investment banking-asset management..... 53,616 53,598 211,789 241,730 218,825 175,610 126,607
Realized gains(1)....................... 2,977 21,783 41,974 58,254 155,735 38,008 9,864
Other................................... 11,346 8,134 37,695 37,064 33,676 31,538 48,464
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total revenues...................... 1,267,459 1,163,775 4,701,285 4,460,172 4,498,692 4,351,700 4,005,237
----------- ----------- ----------- ----------- ----------- ----------- -----------
Insurance losses and loss adjustment
expenses............................... 680,439 667,688 2,461,698 2,303,738 2,690,046 2,365,569 2,119,776
Policy acquisition, operating and
administrative expenses(2)............. 427,296 404,269 1,636,428 1,593,063 1,998,156 1,422,511 1,352,034
Interest expense........................ 11,578 9,815 39,581 40,765 35,553 35,559 29,522
Income tax expense...................... 37,550 17,566 120,750 94,997 7,458 122,999 112,635
Cumulative net benefit of accounting
changes, net of taxes.................. 0 0 0 0 76,483 0 0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)................... $ 110,596 $ 64,437 $ 442,828 $ 427,609 $ (156,038) $ 405,062 $ 391,270
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Fully diluted net income (loss) per
common share........................... $1.23 $0.71 $4.93 $4.73 $(1.94) $4.50 $4.16
Cash dividends declared per common
share.................................. $0.40 $0.375 $1.50 $1.40 $1.36 $1.30 $1.20
BALANCE SHEET DATA:
Total assets............................ $17,651,999 $16,741,009 $17,495,820 $17,149,196 $15,392,054 $14,744,717 $13,907,293
Total debt.............................. 628,178 584,737 622,624 639,729 566,717 486,779 473,829
Change in unrealized appreciation of
investments, net of taxes(3)........... 185,960 (311,937) (574,896) 525,175 (23,815) 55,093 (67,558)
Common shareholders' equity............. 3,008,801 2,690,833 2,732,934 3,005,128 2,202,499 2,532,841 2,196,371
Book value per common share............. 35.67 32.02 32.46 35.47 26.18 29.78 26.00
Number of common shares outstanding..... 84,341,306 84,041,142 84,202,417 84,714,676 84,118,554 85,042,484 84,468,058
UNDERWRITING OPERATIONS:
GAAP underwriting result................ $ (15,452) $ (83,057) $ (113,008) $ (150,255) $ (566,886) $ (163,782) $ (120,730)
Statutory combined ratio:(4)............
Loss and loss expense ratio........... 71.9 79.0 72.1 72.5 85.6 75.2 73.2
Underwriting expense ratio............ 30.4 31.2 30.2 32.0 32.2 29.4 30.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Combined ratio........................ 102.3 110.2 102.3 104.5 117.8 104.6 103.2
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Combined ratio including policyholders'
dividends.............................. 102.4 110.2 102.3 104.7 118.2 105.0 104.2
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
<FN>
------------------------------
(1) 1992 realized gains include $98 million from the sale of a minority
interest in The John Nuveen Company.
(2) 1992 operating and administrative expenses include a $365 million
write-down of the goodwill associated with the Company's investment in
Minet.
(3) The change for 1993 includes an increase of $502 million due to the
adoption of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities".
(4) The combined ratio is not derived from the audited consolidated financial
statements.

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OVERVIEW OF RESULTS

THREE MONTHS ENDED MARCH 31, 1995 AND 1994

The Company's consolidated net income for the first three months of 1995 was
$110.6 million compared with net income of $64.4 million in the first quarter of
1994. The improvement over 1994 occurred in the Company's underwriting segment
and was largely the result of a $73.6 million decline in pretax catastrophe
losses. The Company's insurance brokerage results deteriorated compared with the
first quarter of 1994, while investment banking-asset management earnings
improved slightly over those in the same period of 1994.

The Company's operating earnings, which exclude after-tax realized gains,
were $108.5 million, or $1.20 per share, in the first quarter of 1995, compared
with operating earnings of $49.6 million, or $.55 per share, in the first three
months of 1994.

Consolidated revenues of $1.3 billion for the first quarter of 1995
increased 9% over 1994 first quarter revenues of $1.2 billion. An increase in
insurance premiums earned was the primary factor in the growth over 1994.
Insurance brokerage and investment banking-asset management revenues in the
first quarter of 1995 were essentially level with those in the same period of
1994.

The St. Paul's consolidated assets at March 31, 1995 totaled $17.7 billion,
and common shareholders' equity was $3.0 billion. The comparable totals at
December 31, 1994 were $17.5 billion and $2.7 billion, respectively. The
increase in shareholders' equity resulted from the Company's first quarter
earnings and a $161.4 million increase (net of taxes) in the unrealized
appreciation of the Company's fixed maturities portfolio since the end of 1994.

UNDERWRITING

Consolidated written premiums of $916.4 million in the first quarter of 1995
were 14% higher than first quarter 1994 premiums of $804.6 million. Premium
volume in the Company's Reinsurance underwriting operation was nearly double the
comparable 1994 total, primarily due to favorable market conditions, additions
of business resulting from the Company's October 1994 acquisition of a book of
property-liability reinsurance business from a subsidiary of CIGNA Corporation
and a change in estimated premiums in the first quarter of 1994 made in the
ordinary course of business. Commercial written premiums grew 21% over the first
quarter of 1994, driven by new business in several classes of commercial
coverages. Medical Services written premiums declined 18% from the first quarter
of 1994 due primarily to a change in policy terms from six months to one year
for much of the physicians and surgeons segment of the business.

The consolidated GAAP underwriting loss of $15.5 million in the first
quarter of 1995 was a significant improvement over the first quarter 1994 loss
of $83.1 million. Pretax catastrophe losses in the first quarter of 1995 were
$16.1 million, compared with catastrophe losses of $89.7 million in the first
quarter of 1994, which were driven by an earthquake in California and winter
storms on the East Coast.

Pretax earnings in the underwriting segment totaled $160.2 million in the
first quarter of 1995, compared with $88.5 million in the first three months of
1994, reflecting the improved underwriting results and a $13.9 million increase
in investment income. Total fixed maturity investments in the underwriting
segment have increased by nearly $390 million in the last twelve months. The
average yield on taxable fixed maturities purchased in the first quarter of 1995
was 8.5%, compared with 6.4% in the first quarter of 1994. Taxable fixed
maturities have constituted the majority of the Company's investment pruchases
for the last several years.

INSURANCE BROKERAGE

Minet incurred a pretax loss of $14.6 million in the first quarter of 1995,
compared with a pretax loss of $9.0 million in the first quarter of 1994.
Minet's brokerage fees and commissions in the first quarter were level with the
same period in 1994; however, total expenses increased $7.5 million in 1995.
Salary and related expenses increased $4.9 million, a 9% increase over the level
in the first quarter of 1994,

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primarily due to Minet's ongoing effort to develop new business opportunities
through the expansion of its specialty broker staff. Minet's first quarter
revenues are generally lower than revenues in the remaining three quarters of
the year due to the timing of account renewals.

INVESTMENT BANKING-ASSET MANAGEMENT

The St. Paul's 77% portion of The John Nuveen Company's first quarter pretax
earnings was $19.4 million, compared with $17.3 million in the first quarter of
1994. Asset management fees declined slightly compared with the first quarter of
1994, but underwriting and distribution revenues increased by $5.1 million due
to inventory positioning profits resulting from more favorable market conditions
in 1995. Total assets under management of $31.2 billion at March 31, 1995 were
virtually level with the same time in 1994. However, managed assets grew by $1.5
billion since year-end 1994, primarily due to an increase in the underlying
value of fund investments.

YEARS ENDED DECEMBER 31, 1994 AND 1993

In 1994, a year marked by highly competitive market conditions in the
property-liability insurance industry, the Company achieved its best
underwriting result since 1988 and recorded its second consecutive year of
record earnings. The primary contributor to pretax earnings in 1994 was the
underwriting segment, where fundamental improvements in underwriting performance
offset catastrophe losses that were the third-worst in the Company's history.
The St. Paul's insurance brokerage operation, Minet continued to make progress
in realigning its business structure, while a difficult market environment
resulted in a decline in the earnings for Nuveen after its record results in the
prior year.

Net income of $443 million in 1994 was the highest annual total in the
Company's history, surpassing 1993's previous record of $428 million. Net income
in 1993 included an income tax benefit of $15 million, or $0.17 per share,
resulting from the impact of an increase in the statutory federal tax rate on
The St. Paul's deferred tax asset.

The Company's operating earnings, which exclude after-tax realized
investment gains, were $414 million in 1994, compared with earnings of $387
million in 1993 and a loss of $334 million in 1992.

Consolidated revenues increased 5% in 1994 to $4.7 billion from $4.5 billion
in 1993, as increases in premiums earned, net investment income and insurance
brokerage fees and commissions more than offset declines in investment
banking-asset management revenues and realized gains.

The St. Paul's consolidated assets totaled $17.5 billion at the end of 1994,
compared with total assets of $17.1 billion at year-end 1993. A $1.2 billion
underlying increase in total assets was partially offset by an $848 million
decline in unrealized appreciation on the Company's fixed maturity portfolio,
due to rising interest rates in 1994. The St. Paul adopted Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," as of December 31, 1993, and began
recording its fixed maturity portfolio at estimated market value on the balance
sheet. At that time, with interest rates at a 20-year low, the market value of
that portfolio exceeded its amortized cost by $763 million. The year-end 1994
market value was $85 million below amortized cost. The adoption of SFAS No. 115
had no effect on net income.

UNDERWRITING

Consolidated written premiums of $3.6 billion in 1994 grew 14% over 1993
premiums of $3.2 billion. Premium growth was centered in The St. Paul's Personal
& Business Insurance operation, which included the results of Economy Fire &
Casualty Company ("Economy"), acquired in August 1993, for a full twelve months,
and in the Reinsurance operation, as a result of price increases, higher
retentions and new business.

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The following table sets forth The St. Paul's consolidated GAAP underwriting
results and combined ratios for the years ended December 31, 1994, 1993 and
1992, respectively, and the quarters ended March 31, 1995 and 1994,
respectively, and illustrates fundamental underwriting performance after
factoring out the impact of catastrophes in each such period.

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THREE MONTHS
ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
-------------------- -------------------------------
1995 1994 1994 1993 1992
--------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS)

Actual:
GAAP underwriting results....................... $ (15) $ (83) $ (113) $ (150) $ (567)
Combined ratio.................................. 102.3 110.2 102.3 104.5 117.8
Adjustment:
Catastrophe losses.............................. $ (16) $ (90) $ (105) $ (62) $ (305)
Impact on combined ratio........................ 1.7 10.6 3.1 1.9 9.7
--------- --------- --------- --------- ---------
Excluding catastrophe losses:
GAAP underwriting loss.......................... $ 1 $ 7 $ (8) $ (88) $ (262)
Combined ratio.................................. 100.6 99.6 99.2 102.6 108.1
--------- --------- --------- --------- ---------

In 1994, an earthquake in California, winter ice storms and summer hail
storms resulted in increased catastrophe losses over 1993, a year in which major
catastrophes were relatively few. Hurricane Andrew was the most significant
catastrophe in 1992, severely impacting results in the underwriting segment.

The St. Paul's Reinsurance and Specialized Commercial operations have been
the primary contributors to the improvement in noncatastrophe underwriting
performance since 1992. In both operations, The St. Paul has undertaken a
variety of pricing and underwriting actions designed to reduce the volatility of
underwriting results and further improve the quality of the book of business.
The Company's successful efforts to restrain expense growth throughout the
underwriting segment have also played a major role in improved underwriting
results. The St. Paul's underwriting expense ratio improved 1.8 points in 1994
to 30.2 from 32.0 in 1993, due to improved organizational efficiency and the
acquisition of Economy. The Company continued to restructure its principal
insurance underwriting subsidiary St. Paul Fire and Marine Insurance Company in
1994, an effort that began in 1993 with the goal of creating a more efficient
and customer-focused organization by streamlining the processes through which
The St. Paul acquires business and provides service to customers. In 1993, the
Company recorded restructuring charges of $21 million, primarily consisting of
severance and relocation expenses. The St. Paul incurred no additional
restructuring charges in 1994.

Pretax earnings in the underwriting segment of $561 million increased 11%
over 1993 pretax income of $507 million, reflecting improved underwriting
results and increased investment income. Pretax investment income totaled $675
million in 1994, compared with $646 million and $642 million in 1993 and 1992,
respectively. The increase in 1994 reflected the inclusion of Economy for a full
year. For several years prior to 1994, investment income levels were stagnant
due to a sustained period of falling interest rates.

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The following table summarizes written premiums, underwriting results and
combined ratios for each of The St. Paul's underwriting operations for the last
three years and for the first quarters of 1995 and 1994. Figures are on GAAP
basis, except for combined ratios, which are not derived from the GAAP financial
statements. Several reclassifications have been made to the 1993 and 1992
information to conform to the 1994 presentation.

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UNDERWRITING RESULTS BY OPERATION
THREE MONTHS YEAR ENDED
% OF 1994 ENDED MARCH 31, DECEMBER 31,
WRITTEN ------------------------ -------------------------------
PREMIUMS 1995(1) 1994(1) 1994 1993 1992
-------------- ----------- ----------- --------- --------- ---------
(DOLLARS IN MILLIONS)

Specialized Commercial
Written premiums................. 30% $ 284 $ 263 $ 1,086 $ 1,000 $ 1,058
Underwriting result.............. $ (20) $ (34) $ (89) $ (116) $ (244)
Combined ratio................... 106.7 110.4 107.1 111.9 123.2
----------- ----------- --------- --------- ---------
Personal & Business Insurance
Written premiums................. 21% $ 151 $ 144 $ 747 $ 486 $ 350
Underwriting result.............. $ (7) $ (11) $ (35) $ (29) $ (63)
Combined ratio................... 104.5 107.5 104.6 105.8 117.7
----------- ----------- --------- --------- ---------
Medical Services
Written premiums................. 19% $ 136 $ 165 $ 690 $ 710 $ 712
Underwriting result.............. $ 26 $ 34 $ 118 $ 133 $ 152
Combined ratio................... 85.2 80.5 80.3 80.0 78.6
----------- ----------- --------- --------- ---------
Commercial
Written premiums................. 11% $ 146 $ 121 $ 418 $ 380 $ 499
Underwriting result.............. $ (4) $ (34) $ (54) $ (58) $ (123)
Combined ratio................... 102.6 128.1 112.6 115.4 123.9
----------- ----------- --------- --------- ---------
Total Fire and Marine
Written premiums............... 81% $ 717 $ 693 $ 2,941 $ 2,576 $ 2,619
Underwriting result............ $ (5) $ (45) $ (60) $ (70) $ (278)
Combined ratio................. 101.1 105.6 101.0 102.6 110.5
----------- ----------- --------- --------- ---------
Reinsurance
Written premiums................. 14% $ 156 $ 81 $ 513 $ 431 $ 343
Underwriting result.............. $ (5) $ (29) $ (22) $ (18) $ (241)
Combined ratio................... 104.5 134.3 105.1 103.1 166.3
----------- ----------- --------- --------- ---------
International
Written premiums................. 5% $ 43 $ 31 $ 169 $ 172 $ 180
Underwriting result.............. $ (5) $ (9) $ (31) $ (62) $ (48)
Combined ratio................... 113.5 128.9 117.6 135.9 132.1
----------- ----------- --------- --------- ---------
Total
Written premiums............... 100% $ 916 $ 805 $ 3,623 $ 3,179 $ 3,142
Underwriting result............ $ (15) $ (83) $ (113) $ (150) $ (567)
Combined ratio:
Loss and loss expense
ratio....................... 71.9 79.0 72.1 72.5 85.6
Underwriting expense ratio... 30.4 31.2 30.2 32.0 32.2
----------- ----------- --------- --------- ---------
Combined ratio............... 102.3 110.2 102.3 104.5 117.8
----------- ----------- --------- --------- ---------
Combined ratio including
policyholders' dividends...... 102.4 110.2 102.3 104.7 118.2
----------- ----------- --------- --------- ---------

------------------------
(1) During the first quarter of 1995, the commercial underwriting operations of
Personal & Business Insurance ($27 million in written premiums) were
transferred to Commercial. This included the commercial package line of
business and commercial business written by Economy Fire & Casualty. First
quarter 1994 was reclassified to reflect this new presentation. However, the
annual information for the years 1994, 1993 and 1992 has not been
reclassified to reflect this change.

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INSURANCE BROKERAGE

The St. Paul's insurance brokerage subsidiary, Minet, provides insurance and
reinsurance broking and risk advisory services for major corporations and large
professional organizations worldwide. In recent years, Minet's operating results
have been negatively impacted by excess capacity in worldwide insurance markets
and the increasing trend away from commissions and toward fees as a basis of
determining prices for services performed. Minet's pretax loss of $10 million in
1994 represented a slight improvement over 1993 losses of $13 million. Brokerage
fees and commissions increased 7% to $316 million in 1994, reflecting growth in
Minet's reinsurance and wholesale brokerage operations and additional revenues
contributed by several newly acquired specialty brokerage firms. Expenses
increased in 1994 as a result of the expansion of retail specialty broking
teams.

INVESTMENT BANKING-ASSET MANAGEMENT

Nuveen, in which The St. Paul held a 77% interest at December 31, 1994
comprises The St. Paul's investment banking-asset management segment. Nuveen
markets tax-exempt open-end and closed-end (exchange-traded) managed fund shares
and provides investment advice to and administers the business affairs of its
family of managed funds. Nuveen also underwrites and trades municipal bonds and
tax-exempt unit investment trusts ("UITs") and provides pricing and surveillance
services to its UITs. Rising interest rates, declining municipal new issue
volume and increased investor uncertainty resulting from the increase in
interest rates caused Nuveen's total revenues to decline 10% in 1994 to $220
million from $246 million in 1993. Revenues in 1992 were $221 million.
Investment advisory fees earned on managed assets increased slightly over 1993.
Distribution revenues fell by $23 million, or 70%, from 1993 due to the decline
in the value of municipal bonds and interests in UITs held for future sale and
the decline in new investment product sales in 1994. The increase in 1993
revenues resulted primarily from growth in asset management fees. Total assets
under management fell to $29.7 billion at the end of 1994, compared with $32.7
billion at the end of 1993 and $27.3 billion at the end of 1992.

Nuveen's pretax earnings in 1994 of $95 million were the third highest in
its history. Earnings in 1993 and 1992 were $112 million and $98 million,
respectively. The St. Paul's consolidated results include Nuveen's earnings to
the extent of the Company's ownership percentage. The St. Paul's portion of
Nuveen's earnings in each of those years was $72 million, $83 million and $82
million, respectively.

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BUSINESS

GENERAL DESCRIPTION

The St. Paul is incorporated as a general business corporation under the
laws of the State of Minnesota. The St. Paul Companies, Inc. and its
subsidiaries comprise one of the oldest insurance organizations in the United
States, dating back to 1853. The St. Paul is a management company principally
engaged, through its subsidiaries, in three industry segments:
property-liability insurance underwriting (primarily through St. Paul Fire and
Marine Insurance Company), insurance brokerage (primarily through The St. Paul's
brokerage subsidiary, Minet) and investment banking-asset management (through
the Company's 77 percent stake in Nuveen). As a management company, The St. Paul
oversees the operations of its subsidiaries and provides them with capital,
management and administrative services. According to "Fortune" magazine's most
recent rankings, in terms of total assets, The St. Paul was the 25th largest
diversified financial company in the United States at December 31, 1993. At
March 23, 1995, The St. Paul and its subsidiaries employed approximately 12,900
persons.

The St. Paul's primary business is insurance underwriting, which accounted
for 88% of consolidated revenues in 1994. Insurance brokerage and investment
banking-asset management operations accounted for 7% and 5% of consolidated
revenues, respectively, in 1994. The St. Paul conducts its business in highly
competitive markets and The St. Paul's results can be affected by many factors,
including seasonal trends in premium volume and the size, number and timing of
catastrophe losses. As a result, net income, operating earnings and consolidated
revenues can vary significantly from period to period and interim results may
not necessarily be representative of the full year results of operations.

The St. Paul depends primarily on dividends from its subsidiaries to pay
dividends to its shareholders, service its debt and pay expenses. Various state
laws and regulations limit the amount of dividends The St. Paul may receive from
St. Paul Fire and Marine Insurance Company. In 1995, approximately $312 million
will be available for dividends free from such restrictions. During 1994, The
St. Paul received cash dividends of approximately $201 million from St. Paul
Fire and Marine Insurance Company.

The following table lists the sources of The St. Paul's consolidated
revenues for each of the last three years:

[Enlarge/Download Table]

PERCENTAGE OF
CONSOLIDATED REVENUES
----------------------------------
1994 1993 1992
---------- ---------- ----------

INSURANCE UNDERWRITING OPERATIONS:
Fire and Marine:
Specialized Commercial......................................... 21.6% 22.7% 23.4%
Personal & Business............................................ 15.7 10.9 7.6
Medical Services............................................... 13.6 15.4 16.0
Commercial..................................................... 8.1 9.4 12.0
----- ----- -----
Total Fire and Marine........................................ 59.0 58.4 59.0
REINSURANCE.................................................... 10.3 8.9 8.0
INTERNATIONAL.................................................. 3.3 4.0 2.9
Net Investment Income.......................................... 14.4 14.5 14.3
Realized Investment Gains...................................... 0.7 1.1 1.3
Other.......................................................... 0.6 0.7 0.5
----- ----- -----
Total Insurance Underwriting................................. 88.3 87.6 86.0
INSURANCE BROKERAGE.............................................. 7.4 7.2 7.3
INVESTMENT BANKING -- ASSET MANAGEMENT........................... 4.7 5.5 4.9
Parent Company and Eliminations.................................. (0.4) (0.3) 1.8
----- ----- -----
Total........................................................ 100.0% 100.0% 100.0%
----- ----- -----
----- ----- -----

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INSURANCE UNDERWRITING OPERATIONS

The St. Paul's insurance underwriting business is conducted through three
principal operations. The St. Paul conducts its U.S. direct insurance
underwriting operations under the name St. Paul Fire and Marine ("Fire and
Marine"). Fire and Marine underwrites property and liability insurance and
provides insurance-related products and services to commercial, professional and
individual customers throughout the United States. The St. Paul's reinsurance
business operates under the name St. Paul Re, which underwrites reinsurance for
North American and international insurance companies. The St. Paul's
International Underwriting division offers primary property- liability insurance
coverages in the United Kingdom and in other selected international markets,
primarily Canada and Western Europe.

The primary sources of the underwriting operations' revenues are premiums
earned from insurance and reinsurance policies and income earned from the
investment portfolio. According to the most recent industry statistics published
in "Best's Review" with respect to property-liability insurers doing business in
the United States, The St. Paul's underwriting operations ranked 15th on the
basis of 1993 written premiums. The insurance underwriting business is generally
characterized by mature markets, numerous market participants, and intense price
and other competition. These industry factors, which are expected to continue,
make it difficult for the Company to achieve premium growth.

SPECIALIZED COMMERCIAL

This is the largest of Fire and Marine's operations, based on written
premiums, and includes a number of individual underwriting operations organized
according to market segments or along product lines. Specialized Commercial, in
general, provides coverage for damage to the customer's property (fire, inland
marine and auto), liability for bodily injury or damage to the property of
others (general liability, auto liability and excess), workers' compensation
insurance, and various professional liability coverages. Operations serving
particular market segments consist of the following: Construction, Technology,
Financial Services, National Accounts (large businesses), and Public Sector
Services (government entities). The following operations are organized along
specific product lines: The Surety operation underwrites surety bonds, primarily
for construction contractors, which guarantee that third parties will be
indemnified against the nonperformance of contractual obligations. Based on
estimated 1994 premium data, Fire and Marine's surety operation is the
second-largest underwriter of surety bonds in the United States. The Ocean
Marine operation provides a variety of property and liability insurance related
to ocean and inland waterways traffic, including cargo and hull property
protection. The Professional Liability operation markets errors and omissions
coverage for lawyers, insurance agents and other nonmedical professionals,
including directors and officers. The Surplus Lines operation underwrites
products liability insurance, umbrella and excess liability coverages, property
insurance for high-risk classes of business, and coverages for unique, sometimes
one-of-a-kind risks. The Special Property operation provides property insurance
programs for large commercial accounts.

Specialized Commercial also includes the results of Fire and Marine's
participation in insurance pools and associations, which provide specialized
underwriting skills and risk management services for the classes of business
that they underwrite. These pools and associations serve to increase the
underwriting capacity of the participating companies for insurance policies
where the concentration of risk is so high or the amount so large that a single
company could not prudently accept the entire risk.

Management's strategies for 1995 vary among specialty areas, based on
expected market conditions. In Ocean Marine, Surplus Lines, and Public Sector
Services, The St. Paul expects moderate growth as a result of current favorable
market conditions. In the Financial Services, Professional Liability and
Technology sectors, efforts will focus on developing new products that offer
innovative coverages and superior service, while in the Construction, Surety and
National Accounts sectors, The St. Paul's objective will be to deliver
high-quality loss control and claim service and innovative coverage options to
customers; the Company does not expect significant growth in these areas.

PERSONAL & BUSINESS INSURANCE

This operation provides property and liability insurance coverages for
individuals and small-business owners. For individuals, a variety of monoline
and package policies are offered to protect personal

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property such as homes, automobiles and boats, as well as to provide coverage
for personal liability. For small-business owners, Personal & Business Insurance
markets general commercial property and liability coverages for offices,
retailers and family restaurants. Economy, a personal insurance underwriter, is
included in this operation and is in the process of being fully integrated into
Fire and Marine's existing personal insurance operations. The personal and small
commercial market environment is becoming increasingly competitive, making
significant premium growth unlikely. Consequently, management's focus in 1995
will be on improving operating efficiency, including further integrating Economy
with The St. Paul's other personal lines operations, while maintaining high
customer satisfaction. The Company intends to lower its expense ratio in this
sector as a result of reduced headcount and improved operating efficiencies.

MEDICAL SERVICES

Medical Services underwrites professional liability, property and general
liability insurance for the health care industry delivery system. Fire and
Marine is the largest medical liability insurer in the United States, with
premium volume representing approximately 12% of the United States market in
1993 based on premium data published in "Best's Review". While Medical Services
premium volume declined slightly in 1994, underwriting profit exceeded $100
million for the fifth consecutive year. The Company has identified objectives in
several areas: increasing physicians and surgeons professional liability market
share in states where Medical Services has either not offered this coverage or
has not focused on developing significant market share; continued expansion in
the long-term care industry; and opportunities arising from the consolidations,
mergers and acquisitions that mark the current evolving health care delivery
system. Premium volume in 1995 is expected to be comparable to that in 1994, and
The St. Paul expects Medical Services to continue to make a strong profit
contribution in 1995.

COMMERCIAL

Fire and Marine's Commercial underwriting operation offers property and
liability insurance to midsize commercial enterprises. Coverages marketed
include package, general liability, umbrella and excess liability, commercial
auto and fire, inland marine and workers' compensation. Commercial premiums
increased approximately 10% in 1994, and the underwriting loss declined slightly
from 1993. Commercial will continue to pursue new business while seeking to
maintain its underwriting discipline. After the recent restructuring of this
operation, the Company's objective is to maintain a favorable loss ratio and to
reduce the expense ratio, thereby improving results in this line. Due to market
conditions, The St. Paul does not anticipate significant premium growth in the
Commercial line.

REINSURANCE

St. Paul Re underwrites reinsurance in both domestic and international
insurance markets (referred to as "assumed reinsurance"). Reinsurance is an
agreement between insurance companies to transfer risks. According to data
published by the Reinsurance Association of America, St. Paul Re ranked as the
eighth largest U.S. reinsurance underwriter based on written premium volume for
the first nine months of 1994. The Company expects additional premium growth as
a result of its agreement in late 1994 to purchase the book of international
property-liability reinsurance from a reinsurance underwriting subsidiary of the
CIGNA Corporation. Management intends to achieve growth without sacrificing
pricing adequacy by targeting certain specific initiatives. A significant
contributor to premium growth in 1995 will be accounts taken on as a result of
the purchase of the international book of business from CIGNA. The opportunity
for new and renewal accounts offered by this book fits well with St. Paul Re's
strategy to expand the scope and characteristics of its international business.

INTERNATIONAL UNDERWRITING

The International Underwriting operation includes primary insurance written
outside the United States, mainly the United Kingdom, Canada, Spain and the
Republic of Ireland. It also includes insurance written for foreign operations
of multinational corporations based in the United States, and insurance written
to cover exposures in the United States for foreign-based companies. This
operation offers a range of commercial and personal lines products and services
tailored to meet the unique needs of customers located outside the United
States. The Company's plan includes expanding by product line

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and geographically, especially in Europe. In Canada, International will pursue
several specialty niche markets. In the United Kingdom, new business initiatives
will focus on specific customer groups in both the commercial and personal
market sectors. The reduction of underwriting losses for mature operations is an
objective, along with new product introduction. Significant premium growth is
not anticipated in 1995.

PRINCIPAL MARKETS AND METHODS OF DISTRIBUTION

Fire and Marine's business is produced primarily through approximately 6,300
independent insurance agencies and national insurance brokers. Fire and Marine
maintains 12 regional offices in major cities throughout the United States and
90 additional service offices in the United States to respond to the needs of
agents, brokers and policyholders.

INSURANCE BROKERAGE OPERATIONS

The St. Paul's insurance brokerage segment, Minet, provides insurance and
reinsurance broking and risk advisory services for major corporations and large
professional organizations worldwide. According to the most recent rankings in
terms of total 1993 revenues by "Business Insurance," Minet is the tenth largest
international insurance brokerage organization in the world. Based in London,
Minet has 131 offices throughout North America, Europe, Africa, Asia and
Australia.

Minet operates through six business units, each focusing on distinct client
groups. GLOBAL PROFESSIONAL SERVICES provides insurance brokerage services to
the world's largest accounting firms, as well as law firms, law societies and
insurance companies. INTERNATIONAL RETAIL serves clients in Asia, Africa,
Australia and Europe. Retail brokers act on behalf of organizations such as
corporations and partnerships by providing risk management services and
procuring insurance coverages. INTERNATIONAL BROKING, through its wholesale
broking operations, provides access to Lloyd's of London and other markets for
the purpose of assembling underwriting capacity for specialized insurance
programs for clients throughout the world. Wholesale brokers act on behalf of
retail brokers by procuring specialty insurance coverages. Minet's NORTH
AMERICAN operations include retail brokerage and advisory services for
professional clients and major industrial and service corporations. This
business unit includes Minet's U.S. wholesale brokerage network, Swett &
Crawford, which, according to the most recent rankings in terms of total 1993
revenues by "Business Insurance", is the largest wholesale insurance broker in
the United States. REINSURANCE provides facultative and treaty intermediary
services to insurance companies throughout the world. MINET RISK SERVICES
provides consulting and actuarial services to clients worldwide, and also
provides management services to captive insurance companies.

Minet in recent years has expanded the scope of its specialty brokerage
operations by acquiring several small, specialized brokers throughout the world
to complement its existing worldwide client base and market network. The focus
will remain on developing new business opportunities in specialty market niches
where Minet has the expertise to offer value-added services. Minet will continue
to form new specialty broker teams and selectively pursue acquisitions that
complement existing operations. Expense containment initiatives will remain a
vital component of the Company's efforts toward achieving profitability. The
intense competition that has characterized the insurance brokerage industry for
many years will make it difficult for Minet to increase revenues in 1995.

INVESTMENT BANKING -- ASSET MANAGEMENT OPERATIONS

Nuveen is The St. Paul's investment banking-asset management subsidiary. The
St. Paul and St. Paul Fire and Marine Insurance Company currently hold a
combined 77% interest in Nuveen after selling a minority interest by means of an
initial public offering in 1992. Through John Nuveen & Co. Incorporated, a
wholly-owned subsidiary, Nuveen markets tax-exempt, open-end and closed-end
(exchange-traded) managed funds. Nuveen also underwrites and trades municipal
bonds and tax-exempt UITs. Nuveen markets its funds and UITs to individuals
through registered representatives associated with unaffiliated national and
regional broker-dealers and other financial organizations. Through its Municipal
Finance Department, the firm also serves state and local governments and their
authorities by financing community projects through both negotiated and
competitive financings.

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Nuveen Advisory Corp., a wholly-owned subsidiary of John Nuveen & Co.
Incorporated, is investment adviser to the Nuveen-sponsored open-end mutual
funds and exchange-traded funds. Nuveen Institutional Advisory Corp., also a
wholly-owned subsidiary, is investment adviser to other Nuveen-sponsored
exchange-traded funds and also provides investment management services to trust
funds established by public utilities for the decommissioning of nuclear power
plants.

As the leading sponsor of tax-free UITs, Nuveen currently sponsors trusts
with assets of $16.8 billion in 50 different national, state and insured
portfolios. Nuveen also manages 21 tax-free, open-end mutual funds and money
market funds with net assets of approximately $6 billion in national, state,
insured and money market portfolios. In addition, Nuveen manages 70
exchange-traded funds with approximately $24 billion in net assets, which are
traded on national stock exchanges. Nuveen has its principal office in Chicago
and maintains regional sales offices in other cities across the United States.

Nuveen is a recognized market leader in municipal investing. The Company
expects that assets under management will begin to grow again as the volatility
in the municipal market subsides. Material growth is not expected to occur until
such time as Nuveen begins to offer successful new investment products once
again.

INVESTMENTS
Investments are an integral part of The St. Paul's insurance business. The
following table shows the composition and carrying value of The St. Paul's
investment portfolio for the last three years, followed by more information
about each of the major investment classes.

[Enlarge/Download Table]

DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(DOLLARS IN MILLIONS)

Fixed maturities(1)..................................... $ 8,829 $ 9,148 $ 7,722
Equities................................................ 531 549 494
Real estate............................................. 528 489 435
Venture capital......................................... 330 298 231
Short-term investments.................................. 898 725 639
Other investments....................................... 47 47 56
--------- --------- ---------
Total investments................................... $ 11,163 $ 11,256 $ 9,577
--------- --------- ---------
--------- --------- ---------
<FN>
------------------------
(1) The carrying values for 1994 and 1993 represent market value. The amortized
costs for 1994 and 1993 were $8.9 billion and $8.4 billion, respectively.
The carrying value for 1992 is stated at amortized cost.

FIXED MATURITIES

Fixed maturities constituted 79% of The St. Paul's investment portfolio at
December 31, 1994. The St. Paul determines the mix of its investment in taxable
and tax-exempt securities based on its current and projected tax position and
the relationship between taxable and tax-exempt investment yields. As of
December 31, 1994, taxable bonds accounted for 55% of total fixed maturities, up
from 51% in 1993. Fixed maturity purchases in 1994 were predominantly
intermediate-term, investment-grade taxable securities. Beginning December 31,
1993, the fixed maturities portfolio was carried on The St. Paul's balance sheet
at estimated market value, with unrealized appreciation and depreciation (net of
taxes) recorded in common shareholders' equity. At December 31, 1994, the pretax
unrealized depreciation on the portfolio totaled $85 million.

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The fixed maturities portfolio is managed conservatively to provide
reasonable return while limiting exposure to risks. Approximately 95% of the
fixed maturities portfolio is rated at investment grade levels (I.E., BBB or
better). Nonrated securities comprise the remainder of the portfolio. Most of
these are nonrated municipal bonds which, in management's view, would be
considered of investment-grade quality if rated.

EQUITIES

Equity holdings comprised 5% of The St. Paul's investments at December 31,
1994, and consist of a diversified portfolio of common stocks, which are held
with the primary objective of achieving capital appreciation. This portfolio
provided $21 million of realized investment gains and $13 million of dividend
income in 1994, and its carrying value at December 31, 1994 included $30 million
of unrealized appreciation.

REAL ESTATE

The St. Paul's real estate holdings, which comprised 5% of total investments
at December 31, 1994, consist primarily of a diversified portfolio of commercial
office and warehouse buildings distributed throughout the United States. This
portfolio produced $28 million of pretax investment income in 1994. The St. Paul
does not invest in real estate mortgages.

VENTURE CAPITAL

Securities of small to medium-size companies spanning a variety of
industries comprised The St. Paul's investments in venture capital, which
accounted for 3% of total investments at December 31, 1994. These investments
are in the form of limited partnership interests or direct equity investments,
and their carrying value at December 31, 1994 included $69 million of unrealized
appreciation.

OTHER INVESTMENTS

The St. Paul's portfolio also includes short-term securities and other
miscellaneous investments, which in the aggregate comprised 8% of total
investments at December 31, 1994.

LOSS RESERVES

Loss reserves are The St. Paul's largest liability. Reserves are established
on an undiscounted basis and reflect the Company's estimates of the total losses
and loss adjustment expenses it will ultimately have to pay under insurance and
reinsurance policies. These include losses that have been incurred but not yet
settled, and losses that have been incurred but not yet reported.

Reserve estimates reflect such variables as past loss experience, social
trends in damage awards, changes in judicial interpretation of legal liability
and policy coverages, and inflation. The St. Paul takes into account not only
monetary increases in the cost of what it insures, but also changes in societal
factors that influence jury verdicts and case law and, in turn, claim costs.

Due to the nature of many insurance coverages offered, which involve claims
that may not be settled for many years after they are incurred, subjective
judgments as to the Company's ultimate exposure to losses are an integral and
necessary component of the loss reserving process. Reserves are continually
reviewed, using a variety of statistical and actuarial techniques to analyze
current claim costs, frequency and severity data, and prevailing economic,
social and legal factors. Previously established reserves are adjusted as loss
experience develops and new information becomes available. These adjustments are
reflected in the financial results for the periods in which they were made.
Management believes that the reserves currently established for losses and Loss
Adjustment Expenses ("LAE") are adequate to cover their eventual costs.

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The following table presents a reconciliation of beginning and ending loss
reserves for 1994, 1993 and 1992.

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(DOLLARS IN MILLIONS)

Loss and LAE reserves at beginning of year, as
reported............................................... $ 9,185 $ 8,813 $ 8,246
Less reinsurance recoverables on unpaid losses at
beginning of year...................................... (1,545) (1,606) (1,558)
--------- --------- ---------
Net loss and LAE reserves at beginning of year........ 7,640 7,207 6,688
Economy reserves at acquisition......................... -- 280 --
Provision for losses and LAE for claims incurred:
Current year.......................................... 2,790 2,527 2,941
Prior years........................................... (328) (223) (251)
--------- --------- ---------
Total incurred...................................... 2,462 2,304 2,690
Losses and LAE payments for claims incurred:
Current year.......................................... (667) (580) (708)
Prior years........................................... (1,566) (1,547) (1,452)
--------- --------- ---------
Total paid.......................................... (2,233) (2,127) (2,160)
Unrealized foreign exchange loss (gain)................. 21 (24) (11)
--------- --------- ---------
Net loss and LAE reserves at end of year............ 7,890 7,640 7,207
Plus reinsurance recoverables on unpaid losses at end of
year................................................... 1,533 1,545 1,606
--------- --------- ---------
Loss and LAE reserves at end of year, as reported... $ 9,423 $ 9,185 $ 8,813
--------- --------- ---------
--------- --------- ---------

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ST. PAUL CAPITAL

St. Paul Capital is a limited liability company formed under the laws of
Delaware and is managed by The St. Paul and The St. Paul's wholly-owned
subsidiary St. Paul Holdings. The Managing Members own all of the Common
Securities of St. Paul Capital. The Common Securities are nontransferable and
are and will be beneficially owned directly or indirectly by the Company. The
Managing Members are the sole members of St. Paul Capital and are also the only
managers of St. Paul Capital. St. Paul Capital's principal executive offices are
located at 385 Washington Street, St. Paul, Minnesota 55102, telephone: (612)
221-7911. The principal executive offices of the Managing Members are located at
385 Washington Street, St. Paul, Minnesota 55102, telephone: (612) 221-7911.

Pursuant to the L.L.C. Agreement, the members of St. Paul Capital that own
Common Securities have unlimited liability for the debts, obligations and
liabilities of St. Paul Capital in the same manner as a general partner of a
Delaware limited partnership (which do not include obligations to holders of
Preferred Securities in their capacity as such). The holders of Preferred
Securities will not be generally liable for the debts, obligations or
liabilities of St. Paul Capital solely by reason of being a member of St. Paul
Capital. (subject to their obligation to repay any funds wrongfully distributed
to them).

St. Paul Capital exists for the sole purpose of issuing its Preferred
Securities and investing the proceeds thereof, together with substantially all
the capital contributed by the Managing Members in respect of the Common
Securities, in the Convertible Subordinated Debentures, and may engage in no
other activities now or in the future. The payment by St. Paul Capital of
dividends due on the Preferred Securities is solely dependent on its receipt of
interest payments on the Convertible Subordinated Debentures. To the extent that
aggregate interest payments on the Convertible Subordinated Debentures exceed
aggregate dividends on the Preferred Securities and such dividends have been
paid in full, St. Paul Capital may at times have excess funds, which shall be
distributed to the Company.

DESCRIPTION OF SECURITIES OFFERED

The securities offered hereby are 6% Convertible Monthly Income Preferred
Securities of St. Paul Capital with a liquidation preference of $50 per
security. The Preferred Securities are convertible at any time prior to the
Conversion Expiration Date, at the option of the holder and in the manner
described herein, into shares of St. Paul Common Stock at an initial conversion
rate of 0.8475 shares of St. Paul Common Stock for each Preferred Security
(equivalent to a conversion price of $59 per share of St. Paul Common Stock),
subject to adjustment in certain circumstances. The Preferred Securities are
guaranteed, to the extent described herein, by The St. Paul as to dividends, the
Redemption Price and cash and other distributions payable on liquidation. In
certain circumstances, the holders of a majority of the aggregate liquidation
preference of the Preferred Securities then outstanding can direct the
Conversion Agent to exchange all of the Preferred Securities for all of the
Convertible Subordinated Debentures and immediately thereafter to exchange the
Convertible Subordinated Debentures and any accrued and unpaid interest thereon,
on behalf of such holders, for Depositary Shares, each representing a 1/100th
interest in a share of St. Paul Series C Convertible Preferred Stock.

The following is a description of the material terms of the Preferred
Securities; the St. Paul Series C Convertible Preferred Stock and the Depositary
Shares representing such stock for which the Preferred Securities may be
exchanged; the Guarantee pursuant to which The St. Paul will guarantee, to the
extent described therein, certain payments with respect to the Preferred
Securities; the Convertible Subordinated Debentures and the Indenture pursuant
to which the Convertible Subordinated Debentures will be issued (the
"Indenture"); and the St. Paul Common Stock into which the Preferred Securities
may be converted.

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PREFERRED SECURITIES

THE FOLLOWING SUMMARY OF THE PRINCIPAL TERMS AND PROVISIONS OF THE PREFERRED
SECURITIES DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT TO, AND QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO, THE L.L.C. AGREEMENT, THE FORM OF WHICH HAS BEEN
FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A
PART.

GENERAL

All of the Common Securities of St. Paul Capital are and will be
beneficially owned directly or indirectly by The St. Paul at all times while the
Preferred Securities are outstanding. The L.L.C. Agreement authorizes and
creates the Preferred Securities, which represent preferred limited liability
company interests in St. Paul Capital. The preferred limited liability company
interests represented by the Preferred Securities will have a preference with
respect to cash distributions and amounts payable on the dissolution, winding up
or termination of St. Paul Capital over the Common Securities of St. Paul
Capital. The Preferred Securities, as preferred limited liability company
interests, do not have a par value. The L.L.C. Agreement does not permit the
issuance of other limited liability company interests without the prior approval
of holders of not less than 66 2/3% of the aggregate liquidation preference of
the Preferred Securities then outstanding.

Holders of Preferred Securities will have no preemptive rights.

St. Paul Capital is and will be managed by the Managing Members at all times
while the Preferred Securities are outstanding and the Managing Members are and
will be the sole members of St. Paul Capital which are managers of St Paul
Capital. Except in connection with the appointment of a Special Trustee (as
described below under "-- Voting Rights"), holders of the Preferred Securities
will not have the right to remove or replace the Managing Members.

DIVIDENDS

Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions from St. Paul Capital, accruing from the date of original
issuance and payable monthly in arrears on the last day of each calendar month
of each year, commencing May 31, 1995 ("dividends"). The dividends payable on
each Preferred Security will be fixed at a rate per annum of $3, or 6% of the
liquidation preference of $50. The amount of dividends payable for any period
will be computed on the basis of twelve 30-day months and a 360-day year and,
for any period shorter than a full month, will be computed on the basis of the
actual number of days elapsed in such period. Payment of dividends is limited to
the funds held by St. Paul Capital and legally available for distribution. See
"-- Description of the Convertible Subordinated Debentures -- Interest" and "--
Description of the Guarantee -- General".

Dividends on the Preferred Securities must be declared monthly and paid on
the last day of each calendar month to the extent that St. Paul Capital has
funds legally available for the payment of such dividends and cash on hand
sufficient to make such payments. St. Paul Capital's ability to pay dividends on
the Preferred Securities is solely dependent upon The St. Paul's payment of
interest on the Convertible Subordinated Debentures in which St. Paul Capital
will invest the proceeds from the offering made hereby. If The St. Paul defers
interest payments on the Convertible Subordinated Debentures or otherwise fails
to make interest payments on the Convertible Subordinated Debentures, St. Paul
Capital would not have sufficient funds to pay dividends on the Preferred
Securities and therefore would not make such payments. The payment of dividends
(if and to the extent declared) is guaranteed by The St. Paul as and to the
extent set forth under "-- Description of the Guarantee". The Guarantee is a
full and unconditional guarantee from the time of its issuance, but does not
apply to any payment of dividends unless and until such dividends are declared.
If The St. Paul were to default on its obligation to pay interest or amounts
payable on redemption or maturity of the Convertible Subordinated Debentures,
St. Paul Capital would lack legally available funds for the payment of dividends
or amounts payable on redemption of the Preferred Securities, and in such event
holders of the Preferred Securities would not be able to rely upon the Guarantee
for payment of such amounts. See "Investment Considerations -- Subordinate
Obligations Under Guarantee and Convertible Subordinated Debentures".

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The St. Paul has the right under the Indenture to defer, from time to time,
interest payments on the Convertible Subordinated Debentures for up to 60
months. Monthly dividends on the Preferred Securities would be deferred (but
Additional Dividends would continue to accumulate monthly) by St. Paul Capital
during any such deferral of interest payments. St. Paul Capital will give
written notice of The St. Paul's deferral of interest payments to the holders of
Preferred Securities no later than the last date on which it would be required
to notify the NYSE of the record or payment date of the related dividend, which
is currently 10 days prior to such record or payment date. See "Investment
Considerations -- Option to Defer Payment of Dividends," "Description of
Securities Offered -- Preferred Securities -- Additional Dividends" and "--
Description of the Convertible Subordinated Debentures -- Option to Defer
Interest Payments". Any failure by The St. Paul to make interest payments on the
Convertible Subordinated Debentures in the absence of a deferral would
constitute an Event of Default under the Indenture. The failure of holders of
Preferred Securities to receive dividends on the Preferred Securities in full
(including arrearages) for 15 consecutive months (including any such failure
caused by a deferral of interest payments on the Convertible Subordinated
Debentures) would trigger the right of holders of a majority of the aggregate
liquidation preference of the Preferred Securities then outstanding, voting as a
class at a special meeting of members called for such purpose or by written
consent, to direct the conversion and exchange agent for the Preferred
Securities (the "Conversion Agent") to exchange all of the Preferred Securities
then outstanding for Convertible Subordinated Debentures, and immediately
thereafter, to exchange such Convertible Subordinated Debentures and any accrued
and unpaid interest thereon, on behalf of the holders, for Depositary Shares,
each representing 1/100th of a share of St. Paul Series C Convertible Preferred
Stock, at the Exchange Price. "Exchange Price" means one Depositary Share for
each $50 principal amount of Convertible Subordinated Debentures (which rate of
exchange is equivalent to each of (i) one Depositary Share for each Preferred
Security, (ii) one share of St. Paul Series C Convertible Preferred Stock for
each $5,000 principal amount of Convertible Subordinated Debentures and (iii)
one share of St. Paul Series C Convertible Preferred Stock for each 100
Preferred Securities). See "-- Optional Exchange for Depositary Shares".

Dividends declared on the Preferred Securities will be payable to the
holders thereof as they appear on the books and records of St. Paul Capital on
the relevant record dates, which will be one Business Day (as defined below)
prior to the relevant payment dates. Subject to any applicable laws and
regulations and the L.L.C. Agreement, each such payment will be made as
described under "-- Book-Entry-Only Issuance -- The Depository Trust Company"
below. In the event that any date on which dividends are payable on the
Preferred Securities is not a Business Day, then payment of the dividend payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay). If such
Business Day is in the next succeeding calendar year, however, the payment will
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. A "Business Day" means any day other
than a day on which banking institutions in The City of New York are authorized
or required by law or executive order to close.

ADDITIONAL DIVIDENDS

St. Paul Capital shall be required to declare and pay additional dividends
on the Preferred Securities upon any dividend arrearages in respect of the
Preferred Securities in order to provide, in effect, monthly compounding on such
dividend arrearages at a rate of 6% per annum compounded monthly and such
Additional Dividends shall accumulate. The amounts payable to effect such
monthly compounding on dividend arrearages in respect of the Preferred
Securities are referred to herein as "Additional Dividends".

CERTAIN RESTRICTIONS ON ST. PAUL CAPITAL

If accumulated and unpaid dividends have not been paid in full on the
Preferred Securities, St. Paul Capital may not:

(i) pay, declare or set aside for payment, any dividends or other
distributions on any other limited liability company interests, including
the Common Securities; or

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(ii) redeem, purchase, or otherwise acquire any other limited liability
company interests, including the Common Securities;

until, in each case, such time as all accumulated and unpaid dividends on all of
the Preferred Securities, including any Additional Dividends thereon, shall have
been paid in full for all dividend periods terminating on or prior to the date
of such payment or the date of such redemption, purchase, or acquisition, as the
case may be.

If accumulated and unpaid dividends have been paid in full on the Preferred
Securities for all prior whole dividend periods, then holders of Preferred
Securities will not be entitled to receive or share in any dividends paid,
declared or set aside for payment on any other limited liability company
interest in St. Paul Capital, including the Common Securities.

St. Paul Capital may not issue any other limited liability company interests
without the approval of holders of not less than 66 2/3 in liquidation
preference of the outstanding Preferred Securities. In addition, The St. Paul
has covenanted in the Guarantee and the Indenture to maintain direct or indirect
ownership of 100% of the outstanding Common Securities of St. Paul Capital. See
"Description of the Guarantee -- Certain Covenants of The St. Paul" and
"Description of the Convertible Subordinated Debentures -- Certain Covenants of
The St. Paul". St. Paul Capital does not intend to issue Common Securities to
persons other than the Managing Members. Other than Common Securities issued or
to be issued to the Managing Members and the Preferred Securities offered
hereby, St. Paul Capital does not intend to create or issue additional limited
liability company interests.

CONVERSION RIGHTS

GENERAL. The Preferred Securities will be convertible at any time prior to
the Conversion Expiration Date, at the option of the holder thereof and in the
manner described below, into shares of St. Paul Common Stock at an initial
conversion rate of 0.8475 shares of St. Paul Common Stock for each Preferred
Security (equivalent to a conversion price of $59 per share of St. Paul Common
Stock), subject to adjustment as described below under "-- Conversion Price
Adjustments". The Preferred Securities will not be convertible by or at the
option of The St. Paul or St. Paul Capital. Whenever The St. Paul issues shares
of St. Paul Common Stock upon conversion of Preferred Securities, The St. Paul
will issue, together with each such share of St. Paul Common Stock, one Stock
Purchase Right, whether or not such Stock Purchase Rights shall be exercisable
at such time, but only if such Stock Purchase Rights are issued and outstanding
and held by other holders of St. Paul Common Stock (or are evidenced by
outstanding share certificates representing Common Stock) at such time and have
not expired or been redeemed. The Stock Purchase Rights will expire on December
19, 1999, subject to extension to December 18, 2002 under certain circumstances
or earlier redemption by The St. Paul. The Rights Agreement provides that, until
the Stock Purchase Rights become exercisable pursuant to the terms of the Rights
Agreement, the Stock Purchase Rights will be transferred with and only with the
St. Paul Common Stock. Until the time the Stock Purchase Rights become
exercisable -- at which time the separate certificates representing the Stock
Purchase Rights will be mailed to holders of record of the St. Paul Common Stock
-- the Stock Purchase Rights will be evidenced by the certificates representing
the related shares of St. Paul Common Stock.

A holder of a Preferred Security wishing to exercise its conversion right
shall surrender such Preferred Security, together with an irrevocable conversion
notice, to the Conversion Agent which shall, on behalf of such holder, exchange
the Preferred Security for a portion of the Convertible Subordinated Debentures
held by St. Paul Capital and immediately convert such Convertible Subordinated
Debentures and any accrued and unpaid interest thereon into St. Paul Common
Stock. The St. Paul's delivery upon conversion of the fixed number of shares of
St. Paul Common Stock into which the Convertible Subordinated Debentures are
convertible (together with the cash payment, if any, in lieu of fractional
shares) shall be deemed to be the payment in full of the principal amount at
maturity of the portion of Convertible Subordinated Debentures so converted and
any unpaid interest accrued on such Convertible Subordinated Debentures at the
time of such conversion. For a discussion of the taxation of such an exchange to
holders, including the possibility that holders who exchange their Preferred
Securities for

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St. Paul Common Stock may be subject to additional income tax to the extent
accrued but unpaid interest on the Convertible Subordinated Debentures is
converted into accumulated and unpaid dividends on the St. Paul Common Stock
received upon conversion of the Preferred Securities, see "Certain Federal
Income Tax Considerations -- Exchange of Preferred Securities for St. Paul
Stock". Holders may obtain copies of the required form of the conversion notice
from the Conversion Agent. Conversion rights will terminate at the close of
business on the Conversion Expiration Date.

Holders of Preferred Securities on a dividend payment record date will be
entitled to receive the dividend payable on such securities on the corresponding
dividend payment date notwithstanding the conversion of such Preferred
Securities on or after such dividend payment record date and on or prior to such
dividend payment date. Except as provided in the immediately preceding sentence,
St. Paul Capital will make no payment or allowance for accumulated and unpaid
dividends, whether or not in arrears, on converted Preferred Securities. The St.
Paul will make no payment or allowance for dividends on the shares of St. Paul
Common Stock issued upon such conversion. Each conversion will be deemed to have
been effected immediately prior to the close of business on the day on which
notice was received by St. Paul Capital.

No fractional shares of St. Paul Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid in cash.

EXPIRATION OF CONVERSION RIGHTS. On and after May 31, 1999 and provided St.
Paul Capital is current in the payment of dividends on the Preferred Securities,
including any Additional Dividends thereon, St. Paul Capital may, at its option,
cause the conversion rights of holders of Preferred Securities to expire. St.
Paul Capital may exercise this option only if for 20 trading days within any
period of 30 consecutive trading days, including the last trading day of such
period, the Current Market Price of St. Paul Common Stock exceeds 120% of the
conversion price of the Preferred Securities, subject to adjustment in certain
circumstances. In order to exercise its conversion expiration option, St. Paul
Capital must issue a press release for publication on the Dow Jones News Service
announcing the Conversion Expiration Date prior to the opening of business on
the second trading day after a period in which the condition in the preceding
sentence has been met, but in no event prior to May 31, 1999. The press release
shall announce the Conversion Expiration Date and provide the current conversion
price and Current Market Price of St. Paul Common Stock, in each case as of the
close of business on the trading day next preceding the date of the press
release.

Written notice of the expiration of Conversion Rights containing the same
information set forth in the press release will be sent by first-class mail to
the holders of the Preferred Securities not more than four Business Days after
St. Paul Capital issues the press release. The Conversion Expiration Date will
be a date selected by St. Paul Capital not less than 30 nor more than 60 days
after the date on which St. Paul Capital issues the press release announcing its
intention to terminate conversion rights of Preferred Security holders. In the
event that St. Paul Capital does not exercise its conversion expiration option,
the Conversion Expiration Date with respect to the Preferred Securities will be
the earlier of the date of an Exchange Election referred to below under "--
Optional Exchange for Depositary Shares," and two Business Days preceding the
date set for mandatory redemption of the Preferred Securities.

The term "Current Market Price" of St. Paul Common Stock for any day means
the last reported sale price, regular way on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the NYSE Consolidated
Transaction Tape, or, if the St. Paul Common Stock is not listed or admitted to
trading on the NYSE on such day, on the principal national securities exchange
on which the St. Paul Common Stock is listed or admitted to trading, if the St.
Paul Common Stock is listed on a national securities exchange, or the National
Market System of the National Association of Securities Dealers, Inc., or, if
the St. Paul Common Stock is not quoted or admitted to trading on such quotation
system, on the principal quotation system on which the St. Paul Common Stock may
be listed or admitted to trading or quoted, or, if not listed or admitted to
trading or quoted on any national securities exchange or quotation system, the
average of the closing bid and asked prices of the St. Paul Common Stock in the
over-the-counter market on the

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day in question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or, if not so available in such
manner, as furnished by any NYSE member firm selected from time to time by the
Board of Directors of The St. Paul for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Board of Directors.

CONVERSION PRICE ADJUSTMENTS -- GENERAL. The conversion price will be
subject to adjustment in certain events including, without duplication: (i) the
payment of dividends (and other distributions) payable exclusively in St. Paul
Common Stock on any class of capital stock of The St. Paul; (ii) the issuance to
all holders of St. Paul Common Stock of rights or warrants entitling holders of
such rights or warrants to subscribe for or purchase St. Paul Common Stock at
less than the Current Market Price; (iii) subdivisions and combinations of St.
Paul Common Stock; (iv) the payment of dividends (and other distributions) to
all holders of St. Paul Common Stock consisting of evidences of indebtedness of
The St. Paul, securities or capital stock, cash, or assets (including
securities, but excluding those rights, warrants, dividends, and distributions
referred to in clause (iii) and dividends and distributions paid exclusively in
cash); (v) the payment of dividends (and other distributions) on St. Paul Common
Stock paid exclusively in cash, excluding (A) cash dividends that do not exceed
the per share amount of the immediately preceding regular cash dividend (as
adjusted to reflect any of the events referred to in clauses (i) through (vi) of
this sentence), and (B) cash dividends if the annualized per share amount
thereof does not exceed 15% of the last sale price of St. Paul Common Stock, as
reported on the NYSE Consolidated Transaction Tape, on the trading day
immediately preceding the date of declaration of such dividend; and (vi) payment
in respect of a tender or exchange offer (other than an odd-lot offer) by The
St. Paul or any subsidiary of The St. Paul for St. Paul Common Stock in excess
of 10% of the Current Market Price of St. Paul Common Stock on the trading day
next succeeding the last date tenders or exchanges may be made pursuant to such
tender or exchange offer.

The St. Paul from time to time may reduce the conversion price by any amount
selected by The St. Paul for any period of at least 20 days, in which case The
St. Paul shall give at least 15 days' notice of such reduction. The St. Paul
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of St. Paul Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See "Certain Federal Income Tax
Considerations -- Adjustment of Conversion Price".

No adjustment of the conversion price will be made upon the issuance of any
shares of St. Paul Common Stock pursuant to any present or future plan providing
for the reinvestment of dividends or interest payable on securities of The St.
Paul and the investment of additional optional amounts in shares of St. Paul
Common Stock under any such plan, or the issuance of any shares of St. Paul
Common Stock or options or rights to purchase such shares pursuant to any
present or future employee benefit plan or program of The St. Paul or pursuant
to any option, warrant, right, or exercisable, exchangeable or convertible
security outstanding as of the date the Preferred Securities were first
designated. There shall also be no adjustment of the conversion price in case of
the issuance of any St. Paul Common Stock (or securities convertible into or
exchangeable for St. Paul Common Stock), except as specifically described above.
If any action would require adjustment of the conversion price pursuant to more
than one of the anti-dilution provisions, only one adjustment shall be made and
such adjustment shall be the amount of adjustment that results in the highest
absolute value to holders of the Preferred Securities. No adjustment in the
conversion price will be required unless such adjustment would require an
increase or decrease of at least 1% of the conversion price, but any adjustment
that would otherwise be required to be made shall be carried forward and taken
into account in any subsequent adjustment.

CONVERSION PRICE ADJUSTMENTS -- MERGER, CONSOLIDATION OR SALE OF ASSETS OF
THE ST. PAUL. In the event that The St. Paul is a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the assets of The St. Paul, recapitalization or
reclassification of St. Paul Common Stock or any compulsory share exchange (each
of the foregoing being referred to as a "Transaction")), in each case, as a
result of which shares of St. Paul Common Stock shall be converted into the
right (i) in the case of any Transaction other than a Transaction involving a
Common Stock

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Fundamental Change (as defined below), to receive securities, cash or other
property, each Preferred Security shall thereafter be convertible into the kind
and amount of securities, cash and other property receivable upon the
consummation of such Transaction by a holder of that number of shares of St.
Paul Common Stock into which a Preferred Security was convertible immediately
prior to such Transaction, or (ii) in the case of a Transaction involving a
Common Stock Fundamental Change, to receive common stock of the kind received by
holders of St. Paul Common Stock (but in each case after giving effect to any
adjustment discussed below relating to a Fundamental Change if such Transaction
constitutes a Fundamental Change). The holders of Preferred Securities will have
no voting rights with respect to any Transaction described in this section.

In the event of a Fundamental Change (as defined below), then the conversion
price in effect will be adjusted immediately after such Fundamental Change as
described below. In addition, in the event of a Common Stock Fundamental Change,
each Preferred Security shall be convertible solely into common stock of the
kind received by holders of St. Paul Common Stock as a result of such Common
Stock Fundamental Change.

In the event of a Fundamental Change, the conversion price will be adjusted
immediately after such Fundamental Change:

(i) in the case of a Non-Stock Fundamental Change (as defined below),
the conversion price of the Preferred Security will thereupon become the
lower of (A) the conversion price in effect immediately prior to such
Non-Stock Fundamental Change, but after giving effect to any other prior
adjustments, and (B) the result obtained by multiplying the greater of the
Applicable Price (as defined below) or the then applicable Reference Market
Price (as defined below) by a fraction of which the numerator will be $50
and the denominator will be an amount per Preferred Security determined by
the Managing Members in their sole discretion, after consultation with an
investment banking firm, to be the equivalent of the hypothetical redemption
price that would have been applicable if the Preferred Securities had been
redeemable during such period; and

(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Preferred Securities in effect immediately prior to such Common
Stock Fundamental Change, but after giving effect to any other prior
adjustments, will thereupon be adjusted by multiplying such conversion price
by a fraction of which the numerator will be the Purchaser Stock Price (as
defined below) and the denominator will be the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental Change in which (A)
100% of the value of the consideration received by a holder of St. Paul
Common Stock is common stock of the successor, acquiror, or other third
party (and cash, if any, is paid only with respect to any fractional
interests in such common stock resulting from such Common Stock Fundamental
Change) and (B) all of the St. Paul Common Stock will have been exchanged
for, converted into, or acquired for common stock (and cash with respect to
fractional interests) of the successor, acquiror, or other third party, the
conversion price of the Preferred Securities in effect immediately prior to
such Common Stock Fundamental Change will thereupon be adjusted by
multiplying such conversion price by a fraction of which the numerator will
be one and the denominator will be the number of shares of common stock of
the successor, acquiror, or other third party received by a holder of one
share of St. Paul Common Stock as a result of such Common Stock Fundamental
Change.

In the absence of the provisions of the L.L.C. Agreement which provide for
an adjustment to the conversion price in the event of a Fundamental Change, in
the case of a Transaction each Preferred Security would become convertible into
the securities, cash, or property receivable by a holder of the number of shares
of St. Paul Common Stock into which such Preferred Security was convertible
immediately prior to such Transaction. This change could substantially lessen or
eliminate the value of the conversion privilege associated with the Preferred
Securities. For example, if The St. Paul were acquired in a cash merger, each
Preferred Security would become convertible solely into cash and would no longer
be convertible into securities whose value would vary depending on the future
prospects of The St. Paul and other factors.

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The foregoing conversion price adjustments are designed, in transactions
involving a Fundamental Change where all or substantially all the St. Paul
Common Stock is converted into securities, cash, or property and not more than
50% of the value received by the holders of St. Paul Common Stock consists of
stock listed or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the National Market System of the National
Association of Securities Dealers, Inc. (E.G., a Non-Stock Fundamental Change,
as defined below), to increase the securities, cash, or property into which each
Preferred Security is convertible.

In a Non-Stock Fundamental Change transaction where the initial value
received per share of St. Paul Common Stock (measured as described in the
definition of Applicable Price below) is lower than the then applicable
conversion price of a Preferred Security but greater than or equal to the
"Reference Market Price" (initially $32.25, but subject to adjustment in certain
events as described below), the conversion price will be adjusted as described
above with the effect that each Preferred Security will be convertible into
securities, cash or property of the same type received by the holders of St.
Paul Common Stock in the transaction but in an amount per Preferred Security
determined by The St. Paul in its sole discretion, after consultation with an
investment banking firm, to be the equivalent of the hypothetical redemption
price that would have been applicable if the Preferred Securities had been
redeemable during such period.

In a Non-Stock Fundamental Change transaction where the initial value
received per share of St. Paul Common Stock (measured as described in the
definition of Applicable Price) is lower than both the Applicable Conversion
Price of a Preferred Security and the Reference Market Price, the conversion
price will be adjusted as described above but calculated as though such initial
value had been the Reference Market Price.

In a transaction involving a Fundamental Change where all or substantially
all the St. Paul Common Stock is converted into securities, cash, or property
and more than 50% of the value received by the holders of St. Paul Common Stock
consists of listed or National Market System traded common stock (E.G., a Common
Stock Fundamental Change, as defined below), the foregoing adjustments are
designed to provide in effect that (a) where St. Paul Common Stock is converted
partly into such common stock and partly into other securities, cash, or
property, each Preferred Security will be convertible solely into a number of
shares of such common stock determined so that the initial value of such shares
(measured as described in the definition of "Purchaser Stock Price" below)
equals the value of the shares of St. Paul Common Stock into which such
Preferred Security was convertible immediately before the transaction (measured
as aforesaid) and (b) where St. Paul Common Stock is converted solely into such
common stock, each Preferred Security will be convertible into the same number
of shares of such common stock receivable by a holder of the number of shares of
St. Paul Common Stock into which such Preferred Security was convertible
immediately before such transaction.

The term "Applicable Price" means (i) in the case of a Non-Stock Fundamental
Change in which the holders of the St. Paul Common Stock receive only cash, the
amount of cash received by the holder of one share of St. Paul Common Stock and
(ii) in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the Closing Prices for the St. Paul Common
Stock during the ten trading days prior to and including the record date for the
determination of the holders of St. Paul Common Stock entitled to receive such
securities, cash, or other property in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change or, if there is no such
record date, the date upon which the holders of the St. Paul Common Stock shall
have the right to receive such securities, cash, or other property (such record
date or distribution date being hereinafter referred to as the "Entitlement
Date"), in each case as adjusted in good faith by The St. Paul to appropriately
reflect any of the events referred to in clauses (i) through (vi) of the first
paragraph under "-- Conversion Price Adjustments -- General".

The term "Closing Price" means on any day the reported last sale price on
such day or in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NYSE Consolidated Transaction
Tape or, if the stock is not listed or admitted to trading on such

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Exchange, on the principal national securities exchange on which such stock is
listed or admitted to trading or if not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked prices as
furnished by any NYSE member firm, selected by the Managing Members for that
purpose.

The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of The St. Paul) of the consideration received by holders of St. Paul
Common Stock consists of common stock that for each of the ten consecutive
trading days prior to the Entitlement Date has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the National Market System of the National Association of
Securities Dealers, Inc.; provided, however, that a Fundamental Change shall not
be a Common Stock Fundamental Change unless either (i) The St. Paul continues to
exist after the occurrence of such Fundamental Change and the outstanding
Preferred Securities continue to exist as outstanding Preferred Securities or
(ii) not later than the occurrence of such Fundamental Change, the outstanding
Preferred Securities are converted into or exchanged for shares of convertible
preferred stock of an entity succeeding to the business of The St. Paul, which
convertible preferred stock has powers, preferences, and relative,
participating, optional, or other rights, and qualifications, limitations, and
restrictions, substantially similar to those of the Preferred Securities.

The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the St. Paul Common Stock shall be exchanged for, converted into, acquired for,
or constitute solely the right to receive securities, cash, or other property
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization, or
otherwise), provided, that, in the case of a plan involving more than one such
transaction or event, for purposes of adjustment of the conversion price of the
Preferred Securities, such Fundamental Change shall be deemed to have occurred
when substantially all of the St. Paul Common Stock has been exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash, or other property, but the adjustment shall be based upon the
highest weighed average per share consideration that a holder of St. Paul Common
Stock could have received in connection with such transactions or events as a
result of which more than 50% of the St. Paul Common Stock was so exchanged.

The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.

The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
The St. Paul to appropriately reflect any of the events referred to in clauses
(i) through (vi) of the first paragraph under "-- Conversion Price Adjustments
-- General".

The term "Reference Market Price" shall initially mean $32.25 (which is an
amount equal to 66 2/3% of the reported last sale price for the St. Paul Common
Stock on the NYSE Consolidated Transaction Tape on May 9, 1995), and in the
event of any adjustment to the conversion price other than as a result of a
Non-Stock Fundamental Change, the Reference Market Price shall also be adjusted
so that the ratio of the Reference Market Price to the conversion price after
giving effect to any such adjustment shall always be the same as the ratio of
$32.25 to the initial conversion price of the Preferred Securities.

OPTIONAL EXCHANGE FOR DEPOSITARY SHARES

Upon the occurrence of an Exchange Event (as defined below), the holders of
a majority of the aggregate liquidation preference of Preferred Securities then
outstanding, voting as a class at a special meeting of members called for such
purpose or by written consent, may, at their option, direct the Conversion Agent
to exchange all (but not less than all) of the Preferred Securities for
Convertible Subordinated Debentures and to immediately exchange such Convertible
Subordinated Debentures and any accrued and unpaid interest thereon, on behalf
of such holders, for Depositary Shares, each

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representing ownership of a 1/100th of a share of St. Paul Series C Convertible
Preferred Stock at the Exchange Price. If the Preferred Securities are exchanged
for Depositary Shares, the L.L.C. Agreement provides that The St. Paul will use
its best efforts to have the Depositary Shares listed on the NYSE or other
exchange on which the Preferred Securities may then be listed.

Each Depositary Share will entitle the holder thereof to all proportional
rights and preferences of the St. Paul Series C Convertible Preferred Stock
(including dividend, voting, conversion, redemption and liquidation rights and
preferences). The St. Paul Series C Convertible Preferred Stock issued upon any
such exchange will have terms substantially similar to the terms of the
Preferred Securities (adjusted proportionately per Depositary Share), except
that, among other things, the holders of St. Paul Series C Convertible Preferred
Stock will have the right to elect two additional directors of The St. Paul
whenever dividends on the St. Paul Series C Convertible Preferred Stock are in
arrears for 18 months (including for this purpose any arrearage with respect to
the Preferred Securities) and will not be subject to mandatory redemption. See
"-- Description of St. Paul Series C Convertible Preferred Stock" and "--
Description of Depositary Shares". The terms of the St. Paul Series C
Convertible Preferred Stock provide that all accumulated and unpaid dividends
(including any Additional Dividends) on the Preferred Securities that are not
paid at the time of making an Exchange Election shall be treated as accumulated
and unpaid dividends on the St. Paul Series C Convertible Preferred Stock. See
"-- Description of St. Paul Series C Convertible Preferred Stock". For a
discussion of the taxation of such an exchange to holders, including the
possibility that holders who exchange their Preferred Securities for Depositary
Shares representing St. Paul Series C Convertible Preferred Stock may be subject
to additional income tax to the extent accrued but unpaid interest on the
Convertible Subordinated Debentures is converted into accumulated and unpaid
dividends on the St. Paul Series C Convertible Preferred Stock represented by
the Depositary Shares received in exchange for the Preferred Securities, see
"Certain Federal Income Tax Considerations -- Exchange of Preferred Securities
for St. Paul Stock".

The failure of holders of Preferred Securities to receive, for 15
consecutive months, the full amount of dividend payments (including arrearages)
on the Preferred Securities, including any such failure caused by a deferral of
interest payments on the Convertible Subordinated Debentures, will constitute an
"Exchange Event". As soon as practicable, but in no event later than 30 days
after the occurrence of an Exchange Event, the Managing Members will, upon not
less than 15 days' written notice by first-class mail to the holders of
Preferred Securities, convene a meeting of such holders (an "Exchange Election
Meeting") for the purpose of acting on the matter of whether to cause the
Conversion Agent to exchange all Preferred Securities then outstanding for
Depositary Shares representing St. Paul Series C Convertible Preferred Stock in
the manner described above. If the Managing Members fail to convene such
Exchange Election Meeting within such 30-day period, the holders of at least 10%
of the outstanding Preferred Securities will be entitled to convene such
Exchange Election Meeting. Upon the affirmative vote of the holders of Preferred
Securities representing not less than a majority of the aggregate liquidation
preference of the Preferred Securities then outstanding at an Exchange Election
Meeting or, in the absence of such meeting, upon receipt by St. Paul Capital of
written consents signed by the holders of a majority of the aggregate
liquidation preference of the outstanding Preferred Securities, an election to
exchange all outstanding Preferred Securities on the basis described above (an
"Exchange Election") will be deemed to have been made.

Holders of Preferred Securities, by purchasing such Preferred Securities,
will be deemed to have agreed to be bound by these optional exchange provisions
in regard to the exchange of such Preferred Securities for Depositary Shares
representing St. Paul Series C Convertible Preferred Stock on the terms
described above.

REDEMPTION

If at any time following the Conversion Expiration Date, less than 5% of the
Preferred Securities offered hereby remain outstanding, such Preferred
Securities shall be redeemable at the option of St. Paul Capital, in whole but
not in part, from time to time, upon not fewer than 30 nor more than 60 days'

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prior notice, at a redemption price of $50 per Preferred Security together with
accumulated and unpaid dividends (whether or not earned or declared), including
any Additional Dividends (the "Redemption Price").

Upon repayment by The St. Paul of the Convertible Subordinated Debentures,
including as a result of the acceleration of the Convertible Subordinated
Debentures upon the occurrence of an "Event of Default" described under "--
Description of the Convertible Subordinated Debentures -- Events of Default",
the Preferred Securities shall be subject to mandatory redemption, in whole but
not in part, by St. Paul Capital and the proceeds from such repayment will be
applied to redeem the Preferred Securities at the Redemption Price. In the case
of such acceleration, the Preferred Securities will only be redeemed when
repayment of the Convertible Subordinated Debentures has actually been received
by St. Paul Capital. The Preferred Securities are not otherwise redeemable for
any reason, including in the event that St. Paul Capital should become subject
to federal or state taxation. To the extent that such taxation or other events
cause St. Paul Capital to have insufficient funds to pay full dividends on the
Preferred Securities, the holders will have available to them the exchange
option described above. Upon the occurrence of certain Tax Events (as defined
herein), however, St. Paul Capital may be dissolved and the Convertible
Subordinated Debentures distributed to holders of Preferred Securities. See "--
Special Event Dissolution".

SPECIAL EVENT DISTRIBUTION

If a Tax Event (as defined below) shall occur and be continuing, the
Managing Members may, and if an Investment Company Event (as defined below, and
collectively with a Tax Event, "Special Events") shall occur and be continuing,
the Managing Members shall, dissolve St. Paul Capital and, after satisfaction of
liabilities to creditors of St. Paul Capital as required by applicable law,
cause the Convertible Subordinated Debentures to be distributed to the holders
of the Preferred Securities in liquidation of St. Paul Capital, in the manner
described below, provided that The St. Paul has reasonably determined that
holders will not recognize gain or loss for United States federal income tax
purposes as a result of such distribution. In the case of a Tax Event, however,
the Managing Members may elect not to dissolve St. Paul Capital and to cause the
Preferred Securities to remain outstanding.

"Tax Event" means that the Managing Members shall have obtained an opinion
of nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to or change in an interpretation or application of
such laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after
such date) or (c) any interpretation or pronouncement that provides for a
position with respect to such laws or regulations that differs from the
generally accepted position on the date of issuance of the Preferred Securities,
which amendment or change is effective or such interpretation or pronouncement
is announced on or after the date of issuance of the Preferred Securities, there
is a substantial risk that (i) St. Paul Capital is taxable as a corporation for
United States federal income tax purposes or is otherwise subject to United
States federal income tax with respect to interest received on the Convertible
Subordinated Debentures, (ii) interest payable by The St. Paul to St. Paul
Capital on the Convertible Subordinated Debentures will not be deductible for
United States federal income tax purposes or (iii) St. Paul Capital is subject
to more than a DE MINIMIS amount of other taxes, duties or other governmental
charges.

"Investment Company Event" means the occurrence of a change in law or
regulation or a change in official interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that St. Paul Capital is or
will be considered an "investment company" which is required to be registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), which
Change in 1940 Act Law becomes effective on or after the date of issuance of the
Preferred Securities; provided, that no Investment Company Event shall be deemed
to have occurred if the Managing Members obtain a written opinion of nationally
recognized independent counsel experienced in practice under the 1940 Act to the
effect that The St. Paul or St. Paul

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Capital has taken reasonable measures, in its discretion, to avoid such Change
in 1940 Act Law so that in the opinion of such counsel, notwithstanding such
Change in 1940 Act Law, St. Paul Capital is not required to be registered as an
"investment company" within the meaning of the 1940 Act.

Following the dissolution of St. Paul Capital in connection with a Special
Event and the satisfaction of liabilities to creditors of St. Paul Capital as
required by applicable law, St. Paul Capital will, on a date fixed by the
Managing Members within 90 days following the occurrence of such Special Event,
distribute to each holder of Preferred Securities, in respect of each Preferred
Security, Convertible Subordinated Debentures having a principal amount equal to
$50. In addition, all accumulated and unpaid dividends (including Additional
Dividends) on the Preferred Securities that are not paid at the time of such
dissolution shall be treated as accrued and unpaid interest on the Convertible
Subordinated Debentures. The Indenture does not provide for the modification of
the terms of the Convertible Subordinated Debentures in connection with a
Special Event. After the date of such distribution, (i) the Preferred Securities
will no longer be deemed to be outstanding, (ii) the holders of Preferred
Securities shall cease to be members of St. Paul Capital; (iii) DTC or its
nominee, as the record holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Convertible
Subordinated Debentures to be delivered upon such distribution and (iv) any
certificates representing Preferred Securities not held by DTC or its nominee
will be deemed to represent Convertible Subordinated Debentures having a
principal amount equal to the aggregate of the stated liquidation preference of,
and the accumulated and unpaid dividends on, such Preferred Securities until
such certificates are presented to The St. Paul or its agent for transfer or
reissuance. The Indenture provides that if Convertible Subordinated Debentures
are so distributed, The St. Paul will use its best efforts to have such
Convertible Subordinated Debentures listed on the NYSE or other exchange on
which the Preferred Securities may then be listed.

LIQUIDATION RIGHTS

In the event of any voluntary or involuntary liquidation, dissolution, or
winding-up of St. Paul Capital, the holders of Preferred Securities at the time
outstanding will be entitled to receive a liquidation preference of $50 per
Preferred Security plus all accumulated and unpaid dividends (whether or not
earned or declared), including any Additional Dividends thereon, to the date of
payment (the "Liquidation Distribution") out of the assets of St. Paul Capital
legally available for distribution to members prior to any distribution by St.
Paul Capital on its other limited liability company interests, including the
Common Securities.

If, upon any liquidation of St. Paul Capital, the holders of Preferred
Securities are paid in full the aggregate Liquidation Distribution to which they
are entitled, then such holders will not be entitled to receive or share in any
other assets of St. Paul Capital thereafter available for distribution to any
other holders of limited liability company interests in St. Paul Capital,
including the Common Securities.

Pursuant to the L.L.C. Agreement, St. Paul Capital shall be dissolved and
its affairs shall be wound up upon the earliest to occur of: (i) the expiration
of the period fixed for the life of St. Paul Capital; (ii) the bankruptcy,
retirement, resignation, expulsion, dissolution, winding up or liquidation of
either Managing Member; (iii) the election of the Managing Members, with the
approval of the holders of 66 2/3% of the Preferred Securities; (iv) the entry
of a judicial decree of dissolution; (v) the election of the Managing Members in
connection with a Special Event; (vi) the redemption of all outstanding
Preferred Securities; or (vii) upon the written consent of all members of St.
Paul Capital.

MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE ST. PAUL AND ST. PAUL CAPITAL

The St. Paul may not merge or consolidate with or into another entity or
permit another entity to merge or consolidate with or into it, and may not be
replaced by, or convey, transfer or lease all or substantially all of its
properties and assets to another entity unless (i) at the time of such
transaction, no Event of Default (as defined in the Indenture) shall have
occurred and be continuing, or would occur as a result of such transaction, (ii)
the survivor of such merger or consolidation or the entity to which The St.

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Paul's assets are sold, transferred or leased is an entity organized under the
laws of the United States or any state thereof, such entity (if other than The
St. Paul) becomes a party of the L.L.C. Agreement and becomes a Managing Member,
assumes all of The St. Paul's obligations under the L.L.C. Agreement, and such
entity has a net worth equal to at least 10% of the total capital contributions
to St. Paul Capital, (iii) prior to such transaction, The St. Paul obtains an
opinion of nationally recognized independent counsel experienced in such matters
to the effect that St. Paul Capital will continue to be classified as a
partnership for federal income tax purposes after such transaction and (iv) in
the case of any sale, transfer or lease of all or substantially all of the The
St. Paul's assets that includes St. Paul's interest in St. Paul Capital, The St.
Paul has obtained the consent to the transaction of holders of not less than
66 2/3% of the aggregate liquidation preference of the Preferred Securities then
outstanding.

St. Paul Capital may not consolidate, merge with or into, or be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to any entity, except as described below. St. Paul Capital may, (i) in
order to avoid federal income tax or 1940 Act consequences adverse to The St.
Paul or St. Paul Capital or to the holders of the Preferred Securities, without
the consent of the holders of the Preferred Securities, or (ii) with the prior
approval of holders of not less than 66 2/3 of the Preferred Securities then
outstanding, consolidate, merge with or into, or be replaced by a limited
liability company, limited partnership or trust organized as such under the laws
of any state of the United States of America; PROVIDED, that (i) such successor
entity either (x) expressly assumes all of the obligations of St. Paul Capital
under the Preferred Securities or (y) substitutes for the Preferred Securities
other securities having substantially the same terms as the Preferred Securities
(the "Successor Securities") so long as the Successor Securities rank, with
respect to participation in the profits or assets of the successor entity, at
least as high as the Preferred Securities rank with respect to participation in
the profits or assets of St. Paul Capital, (ii) The St. Paul expressly
acknowledges such successor entity as the holder of the Convertible Subordinated
Debentures, (iii) such merger, consolidation, or replacement does not cause the
Preferred Securities (or any Successor Securities) to be delisted by any
national securities exchange or other organization on which the Preferred
Securities are then listed, (iv) such merger, consolidation or replacement does
not cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation or replacement does not adversely affect the powers,
preferences and other special rights of the holders of the Preferred Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the holders' interest in the new entity), (vi) prior
to such merger, consolidation or replacement The St. Paul has received an
opinion of nationally recognized independent counsel to St. Paul Capital
experienced in such matters to the effect that (w) such transaction will not
cause The St. Paul, St. Paul Capital or such successor entity to become an
"investment company" required to be registered under the 1940 Act, (x) holders
of the Preferred Securities will not recognize any gain or loss for federal
income tax purposes as a result of such transaction, (y) such successor entity
will not be treated as an association taxable as a corporation for federal
income tax purposes and (z) such transaction will not adversely affect the
limited liability of holders of the Preferred Securities.

VOTING RIGHTS

Except as provided below and under "-- Description of the Guarantee --
Amendments and Assignment," "-- Description of the Convertible Subordinated
Debentures -- Modification of the Indenture" and as otherwise required by law
and provided by the L.L.C. Agreement, the holders of the Preferred Securities
will have no voting rights.

If (i) St. Paul Capital fails to pay dividends in full (including any
arrearages) on the Preferred Securities for 15 consecutive months (including any
such failure caused by a determination by The St. Paul to defer interest
payments on the Convertible Subordinated Debentures as described under "--
Description of the Convertible Subordinated Debentures -- Option to Defer
Interest Payments"); (ii) an Event of Default (as defined under "-- Description
of the Convertible Subordinated Debentures -- Events of Default") occurs and is
continuing with respect to the Convertible Subordinated Debentures; or (iii) The
St. Paul is in default under any of its payment obligations under the Guarantee
(as described

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under "-- Description of the Guarantee"), then the holders of the Preferred
Securities will be entitled to appoint and authorize a Special Trustee to
enforce St. Paul Capital's rights under the Convertible Subordinated Debentures,
enforce the rights of the holders of Preferred Securities under the Guarantee
and, to the extent permitted by law, declare and pay dividends on the Preferred
Securities. For purposes of determining whether St. Paul Capital has failed to
pay dividends in full for 15 consecutive months, dividends shall be deemed to
remain in arrears, notwithstanding any partial payments in respect thereof,
until all accumulated and unpaid dividends have been or contemporaneously are
paid. Not later than 30 days after such right to appoint a Special Trustee
arises and upon not less than 15 days' written notice by first-class mail to the
holders of Preferred Securities, the Managing Members will convene a meeting to
elect a Special Trustee. If the Managing Members fail to convene such meeting
within such 30-day period, the holders of 10% of the aggregate liquidation
preference of the Preferred Securities then outstanding will be entitled to
convene such meeting. In the event that, at any such meeting, holders of less
than a majority in aggregate liquidation preference of Preferred Securities
entitled to vote for the appointment of a Special Trustee vote for such
appointment, no Special Trustee shall be appointed. Any Special Trustee so
appointed shall vacate office immediately if St. Paul Capital (or The St. Paul
pursuant to the Guarantee) shall have paid in full all accumulated and unpaid
dividends (and any Additional Dividends) on the Preferred Securities or such
Event of Default or default, as the case may be, shall have been cured.
Notwithstanding the appointment of any such Special Trustee, The St. Paul will
retain all rights as obligor under the Convertible Subordinated Debentures,
including the right to defer interest payments as provided under "-- Description
of the Convertible Subordinated Debentures -- Option to Defer Interest
Payments", and any such deferral would not constitute a default under the
Indenture or enable a holder of Preferred Securities to require the payment of a
dividend that has not theretofore been declared.

In furtherance of the foregoing, and without limiting the powers of any
Special Trustee so appointed and for the avoidance of any doubt concerning the
powers of the Special Trustee, any Special Trustee, in its own name, in the name
of St. Paul Capital, in the name of any holder of Preferred Securities or
otherwise, may institute or cause to be instituted a proceeding, including,
without limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce St. Paul Capital's or any holder's rights
directly against The St. Paul to the same extent as St. Paul Capital or any
holder and on behalf of St. Paul Capital or any holder, and may prosecute such
proceeding to judgment or final decree, and enforce the same against The St.
Paul and collect, out of the property, wherever situated, of The St. Paul the
monies adjudged or decreed to be payable in the manner provided by law.

If any proposed amendment to the L.L.C. Agreement provides for, or the
Managing Members otherwise propose to effect, (x) any action that would
materially adversely affect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the L.L.C. Agreement or
otherwise (including, without limitation, the authorization or issuance of any
additional limited liability company interests in St. Paul Capital), or (y) the
dissolution, winding-up or termination of St. Paul Capital (other than in
connection with the exchange of Depositary Shares representing St. Paul Series C
Convertible Preferred Stock for Preferred Securities upon the occurrence of an
Exchange Event or as described under "-- Merger, Consolidation or Sale of Assets
of St. Paul Capital"), then the holders of outstanding Preferred Securities will
be entitled to vote on such amendment or action of the Managing Members (but not
on any other amendment or action), and such amendment or action shall not be
effective except with the approval of the holders of at least 66 2/3% or more of
the aggregate liquidation preference of the Preferred Securities then
outstanding; PROVIDED, HOWEVER, that no such approval shall be required if the
dissolution, winding-up or termination of St. Paul Capital is proposed or
initiated pursuant to the L.L.C. Agreement.

The rights attached to the Preferred Securities will be deemed to be
materially adversely affected by the creation or issue of, and a vote of the
holders of Preferred Securities will be required for the creation or issue of,
any limited liability company interests in St. Paul Capital other than the
interests represented by the Preferred Securities and the interests of the
Managing Members.

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So long as any Convertible Subordinated Debentures are held by St. Paul
Capital, the Managing Members shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Special Trustee or
exercising any trust or power conferred on the Special Trustee with respect to
the Convertible Subordinated Debentures, (ii) waive any past default, which is
waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Convertible Subordinated Debentures
shall be due and payable, (iv) consent to any amendment, modification or
termination of the Convertible Subordinated Debentures or of the Indenture
without, in each case, obtaining the prior approval of the holders of at least
66 2/3% or more of the aggregate liquidation preference of the Preferred
Securities then outstanding, PROVIDED, HOWEVER, that where a consent under the
Indenture would require the consent of each holder affected thereby, no such
consent shall be given by the Managing Members without the prior consent of each
holder of the Preferred Securities. The Managing Members shall not revoke any
action previously authorized or approved by a vote of holders of Preferred
Securities, without the approval of holders of Preferred Securities representing
66 2/3% or more of the aggregate liquidation preference of the Preferred
Securities then outstanding. The Managing Members shall notify all holders of
Preferred Securities of any notice of default received from the Trustee with
respect to the Convertible Subordinated Debentures.

Any required approval of holders of Preferred Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. St. Paul Capital will cause a notice of any meeting at which holders of
Preferred Securities are entitled to vote, or of any matter upon which action by
written consent of such holders is to be taken, to be mailed to each holder of
record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any matter on which such holders are entitled
to vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.

BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY

DTC will act as securities depositary for the Preferred Securities. The
information in this section concerning DTC and DTC's book-entry system is based
upon information obtained from DTC. The Preferred Securities will be issued only
as fully-registered securities registered in the name of Cede & Co. (as nominee
for DTC). One or more fully-registered global Preferred Security certificates
will be issued, representing in the aggregate the total number of Preferred
Securities, and will be deposited with DTC.

DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). Access to
the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants").

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Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
a Preferred Security (a "Beneficial Owner") is in turn to be recorded on the
Direct or Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in Preferred Securities are to be accomplished
by entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Preferred Securities, except upon a resignation of DTC,
upon the occurrence of an Event of Default under the Convertible Subordinated
Debentures or upon a decision by St. Paul Capital to discontinue the book-entry
system for the Preferred Securities.

DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.

Redemption notices with respect to the Preferred Securities shall be sent to
Cede & Co.

Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to St. Paul Capital as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Preferred Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).

Dividend payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, St. Paul Capital or The St. Paul, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of dividends to DTC is the responsibility of St. Paul Capital,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.

Except as provided herein, a Beneficial Owner in a global Preferred Security
will not be entitled to receive physical delivery of Preferred Securities.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Preferred Securities.

DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
St. Paul Capital. Under such circumstances, in the event that a successor
securities depositary is not obtained, certificates representing the Preferred
Securities will be printed and delivered. If an Event of Default occurs under
the Convertible Subordinated Debentures or if St. Paul Capital decides to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary), certificates representing the Preferred Securities will
be printed and delivered.

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TRANSFER AGENT, REGISTRAR AND PAYING, CONVERSION AND EXCHANGE AGENT

The Chase Manhattan Bank (National Association) will act as Transfer Agent,
Registrar and Paying, Conversion and Exchange Agent for the Preferred
Securities.

Registration of transfers of Preferred Securities will be affected without
charge by or on behalf of St. Paul Capital, but upon payment (with the giving of
such indemnity as St. Paul Capital may require) in respect of any tax or other
government charges which may be imposed in relation to it.

DESCRIPTION OF ST. PAUL SERIES C CONVERTIBLE PREFERRED STOCK

AS DESCRIBED UNDER "-- PREFERRED SECURITIES -- OPTIONAL EXCHANGE FOR
DEPOSITARY SHARES" ABOVE, THE PREFERRED SECURITIES MAY BE EXCHANGED IN CERTAIN
CIRCUMSTANCES (FOLLOWING A PRIOR EXCHANGE FOR CONVERTIBLE SUBORDINATED
DEBENTURES HELD BY ST. PAUL CAPITAL) FOR DEPOSITARY SHARES REPRESENTING ST. PAUL
SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK, WITHOUT PAR VALUE (LIQUIDATION
PREFERENCE $5000 PER SHARE). THE FOLLOWING DESCRIPTION OF THE PRINCIPAL TERMS OF
THE ST. PAUL SERIES C CONVERTIBLE PREFERRED STOCK DOES NOT PURPORT TO BE
COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE ST. PAUL'S AMENDED
AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED (THE "RESTATED ARTICLES"),
AND THE CERTIFICATE OF DESIGNATION OF THE ST. PAUL SERIES C CONVERTIBLE
PREFERRED STOCK (THE "CERTIFICATE OF DESIGNATION"), FORMS OF WHICH HAVE BEEN
FILED AS EXHIBITS TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A
PART.

The Board of Directors of The St. Paul has designated, and The St. Paul will
keep available, 36,000 shares (41,400 shares if the Underwriters' over-allotment
option is exercised in full) of St. Paul Series C Convertible Preferred Stock
for issuance upon exchange of the Preferred Securities for Depositary Shares,
each representing 1/100th of a share of St. Paul Series C Convertible Preferred
Stock (as described under "-- Preferred Securities -- Optional Exchange for
Depositary Shares" above). At the time the Preferred Securities are issued, all
corporate action required in connection with the issuance of the St. Paul Series
C Convertible Preferred Stock and the deposit thereof with the Depositary (as
hereinafter defined) upon the making of an Exchange Election will have been
taken. The L.L.C. Agreement provides that The St. Paul shall use its best
efforts to have the Depositary Shares listed on the NYSE or any other exchange
on which the Preferred Securities may be listed.

The terms of the St. Paul Series C Convertible Preferred Stock -- including
as to dividends, conversion and liquidation preference -- are substantially
similar to those of the Preferred Securities (adjusted proportionately per
Depositary Share) with the following principal exceptions:

(a) Accumulated and unpaid dividends (including any Additional Dividends
thereon) on the Preferred Securities, if any, at the time of the making of
an Exchange Election will become accumulated and unpaid dividends on the St.
Paul Series C Convertible Preferred Stock;

(b) If dividends are not paid on the St. Paul Series C Convertible
Preferred Stock for 18 monthly dividend periods (including for this purpose
any arrearage with respect to the Preferred Securities), the number of
directors of The St. Paul shall be increased by two persons and the holders
of the St. Paul Series C Convertible Preferred Stock will be entitled to
elect the persons to fill such positions; and

(c) Dividends on the St. Paul Series C Convertible Preferred Stock are
not subject to a deferral option, however, such dividends need not be
declared even if The St. Paul has funds legally available therefor and cash
on hand sufficient to pay dividends. In the event that The St. Paul fails to
declare dividends on the St. Paul Series C Convertible Preferred Stock, no
dividends would be payable on any other securities of The St. Paul ranking
PARI PASSU (I.E., on a parity) with or junior to the St. Paul Series C
Convertible Preferred Stock.

If at any time following the Conversion Expiration Date, less than 5% of the
shares of St. Paul Series C Convertible Preferred Stock issued following an
Exchange Election remain outstanding, such shares of St. Paul Series C
Convertible Preferred Stock shall be redeemable, from time to time, in whole but
not in part, at the option of The St. Paul at a redemption price of $5000 per
share (equivalent to a redemption price of $50 per Depositary Share) together
with accumulated and unpaid dividends (whether or not earned or declared).

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The St. Paul Series C Convertible Preferred Stock will rank senior to the
St. Paul Common Stock and the Series A Preferred Stock of The St. Paul with
respect to the payment of dividends and amounts upon liquidation, dissolution
and winding-up. The St. Paul Series C Convertible Preferred Stock will rank PARI
PASSU (I.E., on a parity) with the Series B Preferred Stock of The St. Paul with
respect to the payment of dividends and amounts upon liquidation, dissolution or
winding-up. In the event dividends are not paid in full on either the Series B
Preferred Stock or the St. Paul Series C Convertible Preferred Stock, the
holders of the Series B Preferred Stock and the St. Paul Series C Convertible
Preferred Stock will share ratably with respect to any dividend payment in
proportion to the respective amounts of the accumulated and unpaid dividends due
on such series of preferred stock. See "Description of St. Paul Capital Stock --
Preferred Shares".

In the event of a voluntary or involuntary bankruptcy, liquidation,
dissolution or winding-up of The St. Paul, the holders of St. Paul Series C
Convertible Preferred Stock are entitled to receive out of the net assets of The
St. Paul, but before any distribution is made on any class of securities ranking
junior to the St. Paul Series C Convertible Preferred Stock, $5000 per share
(equivalent to $50 per Depositary Share) in cash plus accumulated and unpaid
dividends (whether or not earned or declared) to the date of final distribution
to such holders. After payment of the full amount of the liquidation
distribution to which they are entitled, the holders of shares of St. Paul
Series C Convertible Preferred Stock will not be entitled to any further
participation in any distribution of assets of The St. Paul. In the event that
the assets available for distribution are insufficient to pay in full the
liquidation preference to the holders of the St. Paul Series C Convertible
Preferred Stock and any preferred stock ranking on a parity with the St. Paul
Series C Convertible Preferred Stock, the holders of such series of preferred
stock will share in the remaining assets of the St. Paul, based on the
proportion of their liquidation preference to the entire amount of unpaid
liquidation preference.

So long as the Convertible Subordinated Debentures are exchangeable for the
Depositary Shares representing the St. Paul Series C Convertible Preferred
Stock, The St. Paul may not authorize or issue any other preferred stock ranking
senior to the St. Paul Series C Convertible Preferred Stock without the approval
of the holders of not less than 66 2/3% of the aggregate liquidation preference
of the Preferred Securities then outstanding. However, no such vote shall be
required for the issuance by The St. Paul of additional preferred stock ranking
PARI PASSU or junior to the St. Paul Series C Convertible Preferred Stock as to
the payment of dividends and amounts upon liquidation, dissolution and
winding-up.

DESCRIPTION OF DEPOSITARY SHARES

THE FOLLOWING SUMMARY OF THE TERMS OF THE DEPOSIT AGREEMENT (AS DEFINED
BELOW), DEPOSITARY SHARES AND DEPOSITARY RECEIPTS (AS DEFINED BELOW), DOES NOT
PURPORT TO BE COMPLETE AND IS SUBJECT TO, AND QUALIFIED IN ITS ENTIRETY BY, THE
PROVISIONS OF THE DEPOSIT AGREEMENT, THE FORM OF WHICH HAS BEEN FILED AS AN
EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART.

The St. Paul will cause to be issued receipts ("Depositary Receipts") for
Depositary Shares, each of which will represent 1/100th of a share of St. Paul
Series C Convertible Preferred Stock. The shares of St. Paul Series C
Convertible Preferred Stock represented by Depositary Shares will be deposited
under a Deposit Agreement (the "Deposit Agreement") among The St. Paul and The
Chase Manhattan Bank (National Association) (the "Depositary") for the benefit
of the holders from time to time of the Depositary Receipts. Subject to the
terms of the Deposit Agreement, each owner of a Depositary Share will be
entitled, in proportion to the applicable fraction of a share of St. Paul Series
C Convertible Preferred Stock represented by such Depositary Share, to all the
rights and preferences of the St. Paul Series C Convertible Preferred Stock
represented thereby (including dividend, voting, conversion and liquidation
rights and preferences). The proportionate liquidation preference of each
Depositary Share will be $50 plus accumulated and unpaid dividends to the date
of payment, subject to certain limitations. The L.L.C. Agreement provides that
The St. Paul shall use its best efforts to have the Depositary Shares listed on
the NYSE or any other exchange on which the Preferred Securities may be listed.

GENERAL

The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Upon an Exchange Election by the holders of a
majority in aggregate liquidation preference

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of the Preferred Securities and immediately following (i) the exchange by the
Conversion Agent of all (but not less than all) outstanding Preferred Securities
for Convertible Subordinated Debentures, (ii) the issuance of the St. Paul
Series C Convertible Preferred Stock and (iii) the delivery of such St. Paul
Series C Convertible Preferred Stock to the Depositary, The St. Paul will cause
the Depositary to issue, on behalf of The St. Paul, the Depositary Shares to the
Conversion Agent, for the account of the holders, in exchange for such
Convertible Subordinated Debentures. Following an Exchange Election, copies of
the forms of Deposit Agreement and Depositary Receipt may be obtained from The
St. Paul or the Depositary, upon request, at the principal office of the
Depositary at which at any particular time its depositary business may be
administered (the "Depositary's Office"), which as of the date hereof is
4 Chase MetroTech Center, Brooklyn, New York 11245, Attention: Corporate Trust
Administration.

DIVIDENDS AND OTHER DISTRIBUTIONS

The Depositary will distribute all dividends or other cash distributions
received in respect of the St. Paul Series C Convertible Preferred Stock to the
record holders of Depositary Shares in such amounts of such dividend or
distribution as are applicable to the number of such Depositary Shares owned by
such holders, subject to certain obligations of holders to file proofs,
certificates and other information and to pay certain charges and expenses to
the Depositary.

In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto in such amounts, as nearly as practicable, of such property
(including securities) received by it as are applicable to the number of such
Depositary Shares owned by such holders, subject to certain obligations of
holders to file proofs, certificates and other information and to pay certain
charges and expenses to the Depositary, unless The St. Paul determines that it
is not feasible to make such distribution, in which case The St. Paul may sell
such property and distribute the net proceeds from such sale to such holders.

WITHDRAWAL OF ST. PAUL SERIES C CONVERTIBLE PREFERRED STOCK

Upon surrender of Depositary Receipts representing at least 100 Depositary
Shares at the Depositary's Office, a holder is entitled to delivery at such
office, to or upon his order, of the number of whole shares of the St. Paul
Series C Convertible Preferred Stock and any money or other property represented
by such Depositary Shares. Holders of Depositary Shares will be entitled to
receive whole shares of the St. Paul Series C Convertible Preferred Stock on the
basis of one share of St. Paul Series C Convertible Preferred Stock for each 100
Depositary Shares, but holders of such whole shares of St. Paul Series C
Convertible Preferred Stock will not thereafter be entitled to receive
Depositary Shares therefor. If the Depositary Receipts delivered by the holder
evidence a number of Depositary Shares in excess of the number of Depositary
Shares representing the number of whole shares of St. Paul Series C Convertible
Preferred Stock to be withdrawn, the Depositary will deliver to such holder at
the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares. The L.L.C. Agreement provides that The St. Paul shall use its
best efforts to have the Depositary Shares listed on the NYSE or any other
exchange on which the Preferred Securities may be listed. The St. Paul is not,
however, obligated to cause the St. Paul Series C Convertible Preferred Stock to
be listed on any stock exchange.

VOTING THE ST. PAUL SERIES C CONVERTIBLE PREFERRED STOCK

Upon receipt of notice of any meeting at which the holders of the St. Paul
Series C Convertible Preferred Stock are entitled to vote, the Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to St. Paul Series C Convertible Preferred
Stock. Each record holder of such Depositary Shares on the record date (which
will be the same date as the record date for the St. Paul Series C Convertible
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of St. Paul Series C Convertible
Preferred Stock (or fraction thereof) represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the amount
of St. Paul Series C Convertible Preferred Stock (or fractions thereof)
represented by such Depositary Shares in accordance with such instructions, and
The St. Paul will agree to take all reasonable action that may be deemed
necessary by the Depositary in

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order to enable the Depositary to do so. The Depositary will abstain from voting
shares of St. Paul Series C Convertible Preferred Stock to the extent it does
not receive specific instructions from the holders of Depositary Shares
representing those shares of St. Paul Series C Convertible Preferred Stock.

CONVERSION OF ST. PAUL SERIES C CONVERTIBLE PREFERRED STOCK

The Depositary Receipts may be surrendered by holders thereof, at the
holders' option, at any time and from time to time, to the Depositary at the
Depositary's Office or at such other office or to such agents as the Depositary
may designate for such purpose with written instructions to the Depositary to
instruct The St. Paul to cause conversion of the whole or fractional shares of
St. Paul Series C Convertible Preferred Stock represented by the Depositary
Shares evidenced by such Receipts into whole shares of St. Paul Common Stock,
and The St. Paul has agreed that upon receipt of such instructions and any
amounts payable in respect thereof, it will cause the delivery of (i) a
certificate or certificates evidencing the number of whole shares of St. Paul
Common Stock into which the St. Paul Series C Convertible Preferred Stock
represented by the Depositary Shares evidenced by such Depositary Receipt or
Receipts have been converted, and (ii) any money or other property to which the
holder is entitled. If the Depositary Shares represented by a Depositary Receipt
are to be converted in part only, a new Depositary Receipt or Receipts will be
issued for any Depositary Shares not to be converted.

On and after May 31, 1999 and provided that The St. Paul is current in the
payment of dividends on the St. Paul Series C Convertible Preferred Stock, The
St. Paul may, at its option, cause the conversion rights of holders of
Depositary Shares representing St. Paul Series C Convertible Preferred Stock to
expire. The St. Paul may exercise this option only if for 20 trading days within
any period of 30 consecutive trading days, including the last trading day of
such period, the Current Market Price of St. Paul Common Stock exceeds 120% of
the conversion price of the Depositary Shares, subject to adjustment in certain
circumstances. In order to exercise its conversion expiration option, The St.
Paul must issue a press release announcing the Conversion Expiration Date and
give notice by first-class mail to holders of Depositary Shares in the manner
provided for holders of Preferred Securities under "-- Description of Preferred
Securities -- Expiration of Conversion Rights". The Conversion Expiration Date
will be a date selected by The St. Paul which is not less than 30 and not more
than 60 days after the date on which The St. Paul issues the press release
announcing its intention to terminate conversion rights of holders of Depositary
Shares.

AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT

The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between The St. Paul and the Depositary. However, any amendment that materially
and adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least
66 2/3% of the Depositary Shares then outstanding. Each holder of a Depositary
Share at the time any amendment becomes effective will be deemed to have
consented and agreed to such amendment.

The Deposit Agreement may be terminated by The St. Paul or by the Depositary
if (i) all outstanding Depositary Shares have been redeemed, (ii) there has been
a final distribution in respect of the St. Paul Series C Convertible Preferred
Stock in connection with any liquidation, dissolution or winding up of The St.
Paul and such distribution has been distributed to the holders of Depositary
Receipts or (iii) each share of St. Paul Series C Convertible Preferred Stock
shall have been converted into shares of St. Paul Common Stock.

CHARGES OF DEPOSITARY

The St. Paul will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Depositary arrangements, the initial
deposit of the St. Paul Series C Convertible Preferred Stock, the redemption of
shares of St. Paul Series C Convertible Preferred Stock and the issuance of
shares of St. Paul Common Stock upon conversion. The St. Paul will pay the fees
and reasonable expenses of the Depositary in connection with the performance of
its duties under the Deposit Agreement. Holders of Depositary Receipts will pay
any other transfer or other taxes and

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governmental charges. If, at the request of a holder of Depositary Receipts, the
Depositary incurs charges or other expenses for which it is not otherwise liable
under the Deposit Agreement, such holder will be liable for such charges and
expenses.

RESIGNATION AND REMOVAL OF DEPOSITARY

The Depositary may resign at any time by delivering to The St. Paul notice
of its election to do so, and The St. Paul may at any time remove the
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary, which successor Depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50 million. In the event The
St. Paul fails to appoint such successor Depositary within such sixty (60) day
period, the Depositary may petition any court of competent jurisdiction for the
appointment of a successor Depositary.

MISCELLANEOUS

The Depositary will, with the approval of The St. Paul, appoint a Registrar
for registration of the Depositary Receipts or Depositary Shares in accordance
with any requirements of any applicable stock exchange in which the Receipts or
the Depositary Shares are listed. The Registrar will maintain books at the
Depositary's Office for the registration and registration of transfer of
Depositary Receipts or at such other place as is approved by The St. Paul and of
which the holders of Depositary Receipts are given reasonable notice.

The St. Paul will deliver to the Depositary and the Depositary will forward
to holders of Depositary Shares all notices and reports required by law, the
rules of any national securities exchange upon which the St. Paul Series C
Convertible Preferred Stock, the Depositary Shares or the Depositary Receipts
are listed or by The St. Paul's Amended and Restated Articles of Incorporation
(including the Certificate of Designation) or Bylaws to be furnished by The St.
Paul to holders of St. Paul Series C Convertible Preferred Stock.

Neither the Depositary nor The St. Paul will be liable if either is by law
or certain other circumstances beyond its control prevented from or delayed in
performing its obligations under the Deposit Agreement. Neither the Depositary
nor any agent of the Depositary nor The St. Paul assumes any obligation or will
be subject to any liability under the Deposit Agreement to holders of Depositary
Receipts other than to use its best judgment and act in good faith in the
performance of such duties as are specifically set forth in the Deposit
Agreement. Neither The St. Paul nor the Depositary will be obligated to appear
in, prosecute or defend any legal proceeding in respect of any Depositary Shares
or any St. Paul Series C Convertible Preferred Stock unless satisfactory
indemnity is furnished. The St. Paul and the Depositary may rely on advice of
counsel or accountants, or information provided by persons presenting St. Paul
Series C Convertible Preferred Stock for deposit, holders of Depositary Shares
or other persons believed to be authorized or competent and on documents
believed to be genuine.

DESCRIPTION OF THE GUARANTEE

THE FOLLOWING IS A DESCRIPTION OF THE PRINCIPAL TERMS AND PROVISIONS OF THE
GUARANTEE AGREEMENT (THE "GUARANTEE"), WHICH WILL BE EXECUTED AND DELIVERED BY
THE ST. PAUL FOR THE BENEFIT OF THE HOLDERS FROM TIME TO TIME OF THE PREFERRED
SECURITIES. THE FOLLOWING DESCRIPTION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH AGREEMENT, THE FORM OF WHICH HAS BEEN FILED AS AN EXHIBIT TO THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART.

GENERAL

Pursuant to the Guarantee, The St. Paul will irrevocably and unconditionally
agree, on a subordinated basis and to the extent set forth therein, to pay in
full to the holders of the Preferred Securities, the Guarantee Payments (as
defined below) (except to the extent previously paid by St. Paul Capital), as
and when due, regardless of any defense, right of set-off or counterclaim that
St. Paul Capital may have or assert. The following payments, to the extent not
paid by St. Paul Capital, are the "Guarantee Payments": (a) any accumulated and
unpaid dividends (including any Additional Dividends thereon) that have been
theretofore declared on the Preferred Securities from funds legally available
therefor; (b) the Redemption Price payable with respect to Preferred Securities
called for redemption by St. Paul Capital

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out of funds legally available therefor; and (c) upon a liquidation of St. Paul
Capital, the lesser of (i) the Liquidation Distribution and (ii) the amount of
assets of St. Paul Capital available for distribution to holders of Preferred
Securities in liquidation of St. Paul Capital. The St. Paul's obligation to make
a Guarantee Payment may be satisfied by The St. Paul's direct payment of the
required amounts to the holders of Preferred Securities or by The St. Paul's
causing St. Paul Capital to pay such amounts to such holders.

If The St. Paul fails to make interest payments on the Convertible
Subordinated Debentures purchased by St. Paul Capital, St. Paul Capital will
have insufficient funds to pay dividends on the Preferred Securities. The
Guarantee does not cover payment of dividends when St. Paul Capital does not
have sufficient funds to pay such dividends.

Because the Guarantee is a full and unconditional guarantee of payment and
not of collection, holders of the Preferred Securities may proceed directly
against The St. Paul as guarantor, rather than having to proceed against St.
Paul Capital before attempting to collect from The St. Paul. A holder of
Preferred Securities may enforce such obligations directly against The St. Paul,
and under the Guarantee The St. Paul will waive any right or remedy to require
that any action be brought against St. Paul Capital or any other person or
entity before proceeding against The St. Paul. Such obligations will not be
discharged except by payment of the Guarantee Payments in full.

CERTAIN COVENANTS OF THE ST. PAUL

Under the Guarantee, The St. Paul will covenant and agree that, so long as
any Preferred Securities remain outstanding, neither The St. Paul nor any direct
or indirect majority owned subsidiary of The St. Paul (excluding Nuveen and its
consolidated subsidiaries) shall declare or pay any dividend or distribution on,
or redeem, purchase or otherwise acquire or make a liquidation payment with
respect to, any of its capital stock (other than as a result of a
reclassification of capital stock or the exchange or conversion of one class or
series of capital stock for another class or series of capital stock) or make
any guarantee payments with respect to the foregoing (other than payments under
the Guarantee or dividends or guarantee payments to The St. Paul by a direct or
indirect majority owned subsidiary), if at such time The St. Paul has exercised
its option to defer interest payments on the Convertible Subordinated Debentures
and such deferral is continuing, The St. Paul is in default with respect to its
payment or other obligations under the Guarantee or there shall have occurred
any event that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default under the Convertible Subordinated Debentures.
The St. Paul will covenant to take all actions necessary to ensure the
compliance of its subsidiaries with the above covenant.

The St. Paul will also covenant that, so long as Preferred Securities remain
outstanding, it will (i) not cause or permit any Common Securities of St. Paul
Capital to be transferred, (ii) maintain direct or indirect 100% ownership of
all outstanding securities of St. Paul Capital other than (x) the Preferred
Securities and (y) any other securities issued by St. Paul Capital (other than
the Common Securities) so long as the issuance thereof to persons other than The
St. Paul or any of its subsidiaries would not cause St. Paul Capital to become
an "investment company" required to be registered under the Investment Company
Act of 1940, as amended, (iii) cause at least 21% of the total value of St. Paul
Capital and at least 21% of all interests in the capital, income, gain, loss,
deduction and credit of St. Paul Capital to be represented by Common Securities,
(iv) not voluntarily dissolve, wind up or liquidate St. Paul Capital (other than
in connection with the exchange of all outstanding Preferred Securities for
Depositary Shares in the manner described under "-- Preferred Securities --
Optional Exchange for Depositary Shares") or either of the Managing Members, (v)
cause The St. Paul and St. Paul Holdings to remain the Managing Members of St.
Paul Capital and timely perform all of their respective duties as Managing
Members of St. Paul Capital (including the duty to declare and pay dividends on
the Preferred Securities as described under " -- Preferred Securities --
Dividends") and (vi) use reasonable efforts to cause St. Paul Capital to remain
a limited liability company and otherwise continue to be treated as a
partnership for U.S. federal income tax purposes; PROVIDED that The St. Paul may
permit St. Paul Capital to consolidate or merge with

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or into or convey, transfer or lease its properties and assets substantially as
an entirety to another entity upon the terms and subject to the conditions set
forth under " -- Preferred Securities -- Merger, Consolidation or Sale of Assets
of St. Paul Capital" above.

As a part of the Guarantee, The St. Paul will agree that it will honor all
obligations described therein relating to the conversion or exchange of the
Preferred Securities into or for St. Paul Common Stock or Depositary Shares
representing St. Paul Series C Convertible Preferred Stock, as described in "--
Preferred Securities -- Conversion Rights," and "-- Optional Exchange for
Depositary Shares".

SUBORDINATION

The St. Paul's obligations under the Guarantee to make Guarantee Payments
will constitute an unsecured obligation of The St. Paul that will rank (i)
subordinate and junior in right of payment to all liabilities of The St. Paul
and the Convertible Subordinated Debentures, and (ii) PARI PASSU (I.E., on a
parity) with the most senior preferred shares now or hereafter issued by The St.
Paul and with any guarantee now or hereafter entered into by The St. Paul in
respect of any preferred or preference stock of any affiliate of The St. Paul
and (iii) senior to St. Paul Common Stock and any other class or series of
capital stock issued by The St. Paul or any of its affiliates which by its
express terms ranks junior in the payment of dividends and amounts on
liquidation, dissolution, and winding-up to the Preferred Securities ("Junior
Stock"). On the bankruptcy, liquidation or winding-up of The St. Paul, its
obligations under the Guarantee will rank junior to all its other liabilities
and, therefore, funds may not be available for payment under the Guarantee. As
of March 31, 1995, The St. Paul had approximately $628 million of indebtedness
or other obligations constituting Senior Indebtedness and no indebtedness that
would rank equally with the Guarantee.

AMENDMENTS AND ASSIGNMENT

The terms of the Guarantee may be amended only with the prior approval of
the holders of not less than 66 2/3% of the aggregate liquidation preference of
the Preferred Securities then outstanding. The manner of obtaining any such
approval of holders of the Preferred Securities will be as set forth in "--
Preferred Securities -- Voting Rights". All provisions contained in the
Guarantee will bind the successors, assigns, receivers, trustees and
representatives of The St. Paul and will inure to the benefit of the holders of
the Preferred Securities. Except in connection with any merger or consolidation
of The St. Paul with or into another entity or any sale, transfer or lease of
The St. Paul's assets to another entity complying with the provisions under "--
Consolidation, Merger or Sale of Assets" below, The St. Paul may not assign its
rights or delegate its obligations under the Guarantee without the prior
approval of the holders of not less than 66 2/3% of the aggregate liquidation
preference of the Preferred Securities then outstanding.

TERMINATION

The St. Paul's obligation to make Guarantee Payments under the Guarantee
will terminate as to each holder of Preferred Securities and be of no further
force and effect upon (a) full payment of the Redemption Price of such holder's
Preferred Securities, (b) full payment of the amounts payable to such holder
upon liquidation of St. Paul Capital, (c) the distribution of St. Paul Common
Stock to such holder in respect of the conversion of all of such holder's
Preferred Securities into St. Paul Common Stock or (d) the distribution of
Depositary Shares representing St. Paul Series C Convertible Preferred Stock to
such holder in respect of the exchange of the Convertible Subordinated
Debentures for St. Paul Series C Convertible Preferred Stock. Notwithstanding
the foregoing, The St. Paul's obligation to make Guarantee Payments will
continue to be effective or will be reinstated, as the case may be, as to a
holder if at any time such holder must restore payment of any sums paid under
the Preferred Securities or under the Guarantee for any reason whatsoever. The
St. Paul will indemnify each holder and hold it harmless from and against any
loss it may suffer in such circumstances.

CONSOLIDATION, MERGER OR SALE OF ASSETS

The Guarantee provides that The St. Paul may merge or consolidate with or
into another entity, may permit another entity to merge or consolidate with or
into The St. Paul and may sell, transfer or lease all or substantially all of
its assets to another entity if (i) at such time no Event of Default (as defined
in the

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Indenture) shall have occurred and be continuing, or would occur as a result of
such merger, consolidation or sale, transfer or lease and (ii) the survivor of
such merger or consolidation or entity to which The St. Paul's assets are sold,
transferred or leased is an entity organized under the laws of the United States
or any state thereof, becomes a managing member of St. Paul Capital and causes a
wholly-owned subsidiary to become the only other managing member of St. Paul
Capital, assumes all of The St. Paul's obligations under the Guarantee and has a
net worth equal to at least 10% of the total contributions to St. Paul Capital.

GOVERNING LAW

The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.

DESCRIPTION OF THE CONVERTIBLE SUBORDINATED DEBENTURES

THE FOLLOWING SUMMARY OF PRINCIPAL TERMS AND PROVISIONS OF THE CONVERTIBLE
SUBORDINATED DEBENTURES IN WHICH ST. PAUL CAPITAL WILL INVEST THE PROCEEDS OF
THE ISSUANCE AND SALE OF THE PREFERRED SECURITIES AND SUBSTANTIALLY ALL OF THE
CAPITAL CONTRIBUTED TO ST. PAUL CAPITAL BY THE MANAGING MEMBERS (THE "MANAGING
MEMBERS PAYMENT") DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE INDENTURE AMONG THE ST. PAUL, ST. PAUL CAPITAL AND
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE (THE "TRUSTEE"), THE
FORM OF WHICH HAS BEEN FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF
WHICH THIS PROSPECTUS IS A PART. ALL OF THE CONVERTIBLE SUBORDINATED DEBENTURES
WILL BE ISSUED UNDER THE INDENTURE.

GENERAL

The Convertible Subordinated Debentures will be limited in aggregate
principal amount to the sum of the aggregate amount of the proceeds received by
St. Paul Capital from the offering made hereby and the Managing Members Payment
less 1% of such sum.

The entire principal amount of the Convertible Subordinated Debentures will
become due and payable, together with any accrued and unpaid interest thereon,
including Additional Interest (as defined below), on the earliest of May 31,
2025 or the date upon which St. Paul Capital is dissolved, wound-up, liquidated
or terminated.

The Convertible Subordinated Debentures will be issued only in fully
registered form, without coupons, in denominations of $50 and any integral
multiple thereof. No service charge will be made for any registration of
transfer or exchange of Convertible Subordinated Debentures, but The St. Paul
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

The Convertible Subordinated Debentures will not be guaranteed by St. Paul
Holdings.

INTEREST

The Convertible Subordinated Debentures will bear interest at the rate of 6%
per annum from the original date of issuance, payable monthly in arrears on the
last day of each calendar month of each year (each an "Interest Payment Date"),
commencing May 31, 1995. Interest will compound monthly and will accrue at the
annual rate of 6% on any interest installment not paid when due.

The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year and, for any period shorter than a
full monthly interest period, will be computed on the basis of the actual number
of days elapsed in such period. In the event that any date on which interest is
payable on the Convertible Subordinated Debentures is not a Business Day, then a
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay). If such Business Day is in the next succeeding
calendar year, however, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.

OPTION TO DEFER INTEREST PAYMENTS

The St. Paul shall have the right at any time and from time to time during
the term of the Convertible Subordinated Debentures to defer interest payments
for up to 60 months during which period interest will continue to accrue and
compound monthly (provided that a deferral of interest payments may not

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extend the stated maturity of the Convertible Subordinated Debentures) and
during which The St. Paul shall have the right to make partial payments of
interest or at the end of which period The St. Paul must pay all interest then
accrued and unpaid (together with Additional Interest); PROVIDED THAT, during
any such deferral of interest payments neither The St. Paul nor any direct or
indirect majority-owned subsidiary of The St. Paul (excluding Nuveen and
Nuveen's consolidated subsidiaries) shall declare or pay any dividend on, or
redeem, purchase, acquire for value or make a liquidation payment with respect
to, any of its capital stock (other than as a result of a reclassification of
such capital stock or the exchange or conversion of one class or service of
capital stock for another class or series of capital stock) or make any
guarantee payments with respect to the foregoing (other than payments under the
Guarantee or dividend or guarantee payments to The St. Paul from a direct or
indirect majority-owned subsidiary). Prior to the termination of any such
deferral of interest payments, The St. Paul may further defer interest payments,
provided that such deferral of interest payments together with any extensions
thereof may not exceed 60 months, nor may such extended interest payment period
extend the maturity of the Convertible Subordinated Debentures. After The St.
Paul has paid all accrued and unpaid interest (including Additional Interest)
following any extended interest payment period, it may again extend interest
payment periods for up to 60 months, subject to the preceding sentence. The
failure by The St. Paul to make interest payments during a deferral of interest
payments would not constitute a default or an event of default under The St.
Paul's currently outstanding indebtedness. The St. Paul shall give St. Paul
Capital, as holder of the Convertible Subordinated Debentures, and the Trustee
notice of its deferral of interest payments no later than the last date on which
St. Paul Capital would be required to notify the NYSE of the record or payment
date of the related dividend, which currently is 10 days prior to such record or
payment date. St. Paul Capital shall give written notice of The St. Paul's
deferral of interest payments to the holders of the Preferred Securities.

ADDITIONAL INTEREST

The St. Paul shall be required to pay any interest upon interest that has
not been paid on the Convertible Subordinated Debentures monthly. Accordingly,
in such circumstance, The St. Paul will pay interest upon interest in order to
provide for monthly compounding on the Convertible Subordinated Debentures (the
amounts of interest payable to effect monthly compounding on the Convertible
Subordinated Debentures being referred to herein as "Additional Interest").

MANDATORY REDEMPTION

If St. Paul Capital redeems Preferred Securities in accordance with the
terms thereof, The St. Paul will redeem Convertible Subordinated Debentures in a
principal amount equal to the aggregate stated liquidation preference of the
Preferred Securities so redeemed, together with any accrued and unpaid interest
thereon, including Additional Interest, if any. Any payment pursuant to this
provision shall be made prior to 12:00 noon, New York City time, on the date of
such redemption or at such other time on such earlier date as the parties
thereto shall agree. The Convertible Subordinated Debentures are not entitled to
the benefit of any sinking fund or, except as set forth above, any other
provision for mandatory prepayment.

SUBORDINATION

The Indenture provides that the Convertible Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of The St. Paul.

Upon any payment or distribution of assets of the Company to creditors upon
any liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or liabilities or any bankruptcy,
insolvency or similar proceedings of the Company, the holders of Senior
Indebtedness will be entitled to receive payment in full of all amounts due on
or to become due on or in respect of all Senior Indebtedness, before the holders
of the Convertible Subordinated Debentures are entitled to receive any payment
(including any payment to holders of the Convertible Subordinated Debentures
made in respect of any other debt subordinated to the Convertible Subordinated
Debentures) on account of the principal of or interest on the Convertible
Subordinated Debentures or on account of any purchase, redemption or other
acquisition of the Convertible Subordinated Debentures by the Company.

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The Company may not make any payments on the account of the Convertible
Subordinated Debentures or account of the purchase or redemption or other
acquisition of the Convertible Subordinated Debentures, if there has occurred
and is continuing a default in the payment of the principal of (or premium, if
any) or interest on any Senior Indebtedness (a "Senior Payment Default"). In
addition, if any default (other than a Senior Payment Default), or any event
which after notice or lapse of time (or both) would become a default, with
respect to certain Senior Indebtedness, permitting after notice or lapse of time
(or both) the holders thereof (or a trustee or agent on behalf of the holders
thereof) to accelerate the maturity thereof has occurred and is continuing (a
"Senior Nonmonetary Default"), and the Company and the Trustee have received
written notice thereof from the holder of such certain Senior Indebtedness, then
the Company may not make any payments on the account of the Convertible
Subordinated Debentures or account of the purchase or redemption or other
acquisition of the Convertible Subordinated Debentures, for a period (a
"blockage period") commencing on the date the Company and the Trustee receive
such written notice and ending on the earlier of (i) 179 days after such date
and (ii) the date, if any, on which the Senior Indebtedness to which such
default relates is discharged or such default is waived in writing or otherwise
cured or ceases to exist and any acceleration of certain Senior Indebtedness to
which such Senior Nonmonetary Default relates is rescinded or annulled.

In any event, not more than one blockage period may be commenced during any
period of 360 consecutive days, and there must be a period of at least 181
consecutive days in each period of 360 consecutive days when no blockage period
is in effect. Following the commencement of a blockage period, the holders of
such certain Senior Indebtedness will be precluded from commencing a subsequent
blockage period until the conditions set forth in the preceding sentence are
satisfied. No Senior Nonmonetary Default that existed or was continuing on the
date of commencement of any blockage period with respect to such certain Senior
Indebtedness initiating such blockage period will be, or can be, made the basis
for the commencement of a subsequent blockage period, unless such default has
been cured for a period of not less than 90 consecutive days.

By reason of such subordination, in the event of any proceeding of the type
described in the preceding paragraph involving The St. Paul, creditors of The
St. Paul who are holders of Senior Indebtedness and general unsecured creditors
of The St. Paul may recover more, ratably, than the holder or holders of the
Convertible Subordinated Debentures.

The term "Senior Indebtedness" is defined to mean the principal of, premium,
if any, interest on, and any other payment due pursuant to any of the following,
whether Incurred (as defined in the Indenture) on or prior to the date of
execution of the Indenture or thereafter Incurred:

(a) all obligations of The St. Paul for money borrowed;

(b) all obligations of The St. Paul evidenced by notes, debentures,
bonds or other securities, including obligations Incurred in connection with
the acquisition of property, assets or businesses;

(d) all reimbursement obligations of The St. Paul with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of The St. Paul;

(e) all obligations of The St. Paul issued or assumed as the deferred
purchase price of property or services, including all obligations under
master lease transactions pursuant to which The St. Paul or any of its
subsidiaries have agreed to be treated as owner of the subject property for
federal income tax purposes (but excluding trade accounts payable, accrued
liabilities resulting from the sale of extended service plans, or accrued
liabilities arising in the ordinary course of business);

(f) all payment obligations of The St. Paul under interest rate swap or
similar agreements or foreign currency hedge, exchange or similar agreements
at the time of determination, including any such obligations Incurred by The
St. Paul solely to act as a hedge against increases in interest rates that
may occur under the terms of other outstanding variable or floating rate
Indebtedness (as defined in the Indenture) of The St. Paul;

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(g) all obligations of the type referred to in clauses (a) through (f)
above of another person and all dividends of another person, the payment of
which, in either case, The St. Paul has assumed or guaranteed, or for which
The St. Paul is responsible or liable, directly or indirectly, jointly or
severally, as obligor, guarantor or otherwise;

(h) all compensation payable by The St. Paul to the Trustee; and

(i) all amendments, modifications, renewals, extensions, refinancings,
replacements and refundings by The St. Paul of any such Indebtedness
referred to in clauses (a) through (h) above (and of any such amended,
modified, renewed, extended, refinanced, refunded or replaced indebtedness
or obligations);
PROVIDED, HOWEVER, that the following shall not constitute Senior Indebtedness:
(a) any Indebtedness owed to a subsidiary of The St. Paul (other than Nuveen and
its consolidated subsidiaries), (b) any Indebtedness which by the terms of the
instrument creating or evidencing the same expressly provides that such
Indebtedness is not superior in right of payment to the Convertible Subordinated
Debentures or (c) any Indebtedness Incurred in violation of the Indenture. Such
Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.

As of March 31, 1995, Senior Indebtedness of The St. Paul aggregated
approximately $628 million. The Indenture does not limit The St. Paul's ability
to incur Senior Indebtedness.

CERTAIN COVENANTS OF THE ST. PAUL

The St. Paul will also covenant in the Indenture that neither it nor any
direct or indirect majority-owned subsidiary of The St. Paul (excluding Nuveen
and Nuveen's consolidated subsidiaries) will declare or pay any dividend on, or
redeem, purchase, acquire for value or make a liquidation payment with respect
to, any of its capital stock (other than as a result of a reclassification of
capital stock on the exchange or conversion of one class or series of capital
stock for another class or series of capital stock) or make any guarantee
payments with respect to the foregoing (other than payments under the Guarantee
or dividends or guarantee payments to The St. Paul from a majority-owned
subsidiary) if at such time (i) there shall have occurred any event that, with
the giving of notice or the lapse of time or both would constitute an Event of
Default (as defined below) under the Convertible Subordinated Debentures, (ii)
The St. Paul shall be in default with respect to its payment or other
obligations under the Guarantee or (iii) The St. Paul shall have given notice of
its selection of an extended interest payment period as provided in the
Convertible Subordinated Debentures and such deferral of interest payments or
any extension thereof shall be continuing. The St. Paul will also covenant for
the benefit of the holders of the Convertible Subordinated Debentures that, so
long as the Preferred Securities remain outstanding, it will (i) not cause or
permit any Common Securities of St. Paul Capital to be transferred, (ii)
maintain direct or indirect ownership of all outstanding securities of St. Paul
Capital other than (x) the Preferred Securities and (y) any other securities
issued by St. Paul Capital (other than the Common Securities) so long as the
issuance thereof to persons other than The St. Paul or any of its subsidiaries
would not cause St. Paul Capital to become an "investment company" required to
be registered under the Investment Company Act of 1940, as amended, (iii) cause
at least 21% of the total value of St. Paul Capital and at least 21% of all
interests in the capital, income, gain, loss, deduction and credit of St. Paul
Capital to be represented by Common Securities, (iv) not voluntarily dissolve,
wind-up or liquidate St. Paul Capital (other than in connection with the
exchange of all outstanding Preferred Securities for Depositary Shares in the
manner described under "-- Preferred Securities -- Optional Exchange for
Depositary Shares") or either of the Managing Members, (v) cause The St. Paul
and St. Paul Holdings to remain the Managing Members of St. Paul Capital and to
timely perform all of their respective duties as Managing Members of St. Paul
Capital (including the duty to declare and pay dividends on the Preferred
Securities as described under "-- Preferred Securities -- Dividends"), (vi) use
reasonable efforts to cause St. Paul Capital to remain a limited liability
company and otherwise continue to be treated as a partnership for U.S. federal
income tax purposes; PROVIDED that The St. Paul may permit St. Paul Capital to
consolidate or merge with or into or convey, transfer or lease its properties
and assets substantially as an entirety to another entity upon the terms and
subject to the conditions set forth under "-- Preferred Securities --

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Merger, Consolidations or Sale of Assets of St. Paul Capital" above, and (vii)
to deliver Depositary Shares representing shares of St. Paul Series C
Convertible Preferred Stock or St. Paul Common Stock upon an election by the
holders of the Preferred Securities to exchange or convert the Convertible
Subordinated Debentures.

EVENTS OF DEFAULT

If one or more of the following events (each an "Event of Default") shall
occur and be continuing:

(a) failure to pay any principal of the Convertible Subordinated
Debentures when due;

(b) failure to pay any interest on the Convertible Subordinated
Debentures, including any Additional Interest, when due and such failure
continues for a period of 10 days; provided that a valid extension of the
interest payment period by The St. Paul shall not constitute a default in
the payment of interest for this purpose;

(c) failure by The St. Paul to deliver shares of St. Paul Series C
Convertible Preferred Stock or St. Paul Common Stock upon an election by
holders of Preferred Securities to exchange or convert such Preferred
Securities;

(d) failure by The St. Paul to perform in any material respect any other
covenant in the Indenture for the benefit of the holders of Convertible
Subordinated Debentures continued for a period of 60 days (or, in the case
of the covenants described under "-- Certain Covenants of The St. Paul," 10
days) after written notice to The St. Paul from any holder of Convertible
Subordinated Debentures or Preferred Securities;

(e) the dissolution, winding-up, liquidation or termination of St. Paul
Capital (except in the event of a Special Event); or

(f) certain events of bankruptcy, insolvency or liquidation of The St.
Paul;

then either the Trustee or the holders of at least 25% in aggregate principal
amount of the Convertible Subordinated Debentures then outstanding will have the
right to declare the principal of and the interest on the Convertible
Subordinated Debentures (including any Additional Interest) and any other
amounts payable under the Convertible Subordinated Debentures to be forthwith
due and payable and to enforce the holders' other rights as creditors with
respect to the Convertible Subordinated Debentures; PROVIDED, HOWEVER, that if
upon an Event of Default, the Trustee or the holders of at least 25% in
aggregate principal amount of the Convertible Subordinated Debentures then
outstanding fail to declare the payment of all amounts on the Convertible
Subordinated Debentures to be immediately due and payable, the holders of at
least 25% in aggregate liquidation preference of Preferred Securities then
outstanding shall have such right; PROVIDED, FURTHER, HOWEVER, that after such
acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount of outstanding Convertible
Subordinated Debentures, or the holders of the Preferred Securities if they
accelerated such payment, may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the Indenture.
For information as to waiver of defaults, see "-- Modification of the
Indenture". St. Paul Capital is the initial holder of the Convertible
Subordinated Debentures. However, while the Preferred Securities are
outstanding, St. Paul Capital has agreed not to waive an Event of Default under
the Indenture without the consent of holders of 66 2/3% in aggregate liquidation
preference of the Preferred Securities then outstanding. Additionally, under the
terms of the Preferred Securities, the holders of outstanding Preferred
Securities will have the rights described above under "-- Preferred Securities
-- Voting Rights", including the right to appoint a Special Trustee, which
Special Trustee shall be authorized to exercise the right of St. Paul Capital,
as the holder of at least 25% aggregate principal amount of the Convertible
Subordinated Debentures, to accelerate the principal amount of the Convertible
Subordinated Debentures and accrued interest (including any Additional Interest)
thereon and to enforce the

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other rights of Holders of the Convertible Subordinated Debentures as creditors
under the Convertible Subordinated Debentures. A default under any other
indebtedness of The St. Paul or St. Paul Capital would not constitute an Event
of Default under the Convertible Subordinated Debentures.

Subject to the provision of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any holders of Convertible Subordinated
Debentures, unless such holders shall have offered to the Trustee reasonable
indemnity. Subject to such provisions for the indemnification of the Trustee,
the holders of a majority in aggregate principal amount of the Convertible
Subordinated Debentures then outstanding will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee.

No holder of any Subordinated Debenture will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or trustee, or for any remedy thereunder, unless such holder shall have
previously given to the Trustee written notice of a continuing Event of Default
and, if St. Paul Capital is not the sole holder of Convertible Subordinated
Debentures, unless also the holders of at least 25% in aggregate principal
amount of the Convertible Subordinated Debentures then outstanding shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the holders of a majority in aggregate principal amount of the outstanding
Convertible Subordinated Debentures a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days. However, such
limitations do not apply to a suit instituted by a holder of a Subordinated
Debenture for enforcement of payment of the principal of or interest on such
Subordinated Debenture on or after the respective due dates expressed in such
Subordinated Debenture or of the right to convert such Subordinated Debenture in
accordance with the Indenture.

The St. Paul will be required to furnish to the Trustee annually a statement
as to the performance by The St. Paul of certain of its obligations under the
Indenture and as to any default of such performance.

CONVERSION OF THE CONVERTIBLE SUBORDINATED DEBENTURES

The Convertible Subordinated Debentures and any accrued interest thereon
will be convertible into St. Paul Common Stock at the option of the holders of
the Convertible Subordinated Debentures at any time on or before the close of
business on the maturity date thereof at the initial conversion price set forth
on the cover page of this Prospectus subject to the conversion price adjustments
described under "-- Preferred Securities -- Conversion Rights". St. Paul Capital
will covenant not to convert Convertible Subordinated Debentures except pursuant
to a notice of conversion delivered to the Conversion Agent by a holder of
Preferred Securities. Upon surrender of Preferred Securities to the Conversion
Agent for conversion, St. Paul Capital will distribute $50 principal amount of
the Convertible Subordinated Debentures to the Conversion Agent on behalf of the
holder of every Preferred Security so converted, whereupon the Conversion Agent
will convert such Convertible Subordinated Debentures and any accrued interest
thereon to St. Paul Common Stock on behalf of such holder. The St. Paul's
delivery to the holders of the Convertible Subordinated Debentures (through the
Conversion Agent) of the fixed number of shares of St. Paul Common Stock into
which the Convertible Subordinated Debentures are convertible (together with the
cash payment, if any, in lieu of fractional shares) will be deemed to satisfy
The St. Paul's obligation to pay the principal amount of the Convertible
Subordinated Debentures, and the accrued and unpaid interest attributable to the
period from the last date to which interest has been paid or duly provided for.

EXCHANGE OF THE CONVERTIBLE SUBORDINATED DEBENTURES

The Convertible Subordinated Debentures and any accrued interest thereon
will be exchangeable for Depository Shares representing St. Paul Series C
Convertible Preferred Stock upon an Exchange Event on or before the close of
business on the maturity date thereof at the rate of 1/100th of a share of St.
Paul Series C Convertible Preferred Stock for each $50 principal amount of the
Convertible Subordinated Debentures (equivalent to an exchange rate of one
Depositary Share for each $50 principal of

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amount of the Convertible Subordinated Debentures). Accumulated and unpaid
dividends (including Additional Dividends) on the Preferred Securities will be
treated as accumulated and unpaid dividends on the St. Paul Series C Convertible
Preferred Stock.

MODIFICATION OF THE INDENTURE

The Indenture may be amended by The St. Paul, St. Paul Capital and the
Trustee with the consent of the holders of 66 2/3% in aggregate principal amount
of the outstanding Convertible Subordinated Debentures PROVIDED, that no such
modification or amendment may, without the consent of the holder of each
outstanding Subordinated Debenture affected thereby, (a) change the Maturity of
the principal of, or any installment of interest on, any Subordinated Debenture,
(b) reduce the principal amount of, or interest on, any Subordinated Debenture,
(c) change the place or currency of payment of principal of, or interest on, any
Subordinated Debenture, (d) impair the right to institute suit for the
enforcement of any payment on or with respect to any Subordinated Debenture, (e)
adversely affect the right to convert or exchange Convertible Subordinated
Debentures, (f) modify the subordination provisions in a manner adverse to the
holders of the Convertible Subordinated Debentures, (g) reduce the above-stated
percentage of outstanding Convertible Subordinated Debentures necessary to
modify or amend the Indenture or (h) reduce the percentage of aggregate
principal amount of outstanding Convertible Subordinated Debentures necessary
for waiver of compliance with certain provisions of the Indenture or for waiver
of certain defaults; and PROVIDED FURTHER that, so long as any of the Preferred
Securities remain outstanding, no such amendment may be made that adversely
affects the holders of Preferred Securities, and no termination of the Indenture
may occur, and no Event of Default or compliance with any covenant under the
Indenture may be waived by the holders of the Convertible Subordinated
Debentures, without the prior consent of the holders of at least 66 2/3% of the
aggregate liquidation preference of the Preferred Securities then outstanding
unless and until the Convertible Subordinated Debentures and all accrued and
unpaid interest thereon have been paid in full.

GOVERNING LAW

The Indenture and the Convertible Subordinated Debentures will be governed
by, and construed in accordance with, the laws of the State of New York.

INFORMATION CONCERNING THE TRUSTEE

The Indenture contains certain limitations on the right of the Trustee
should it become a creditor of The St. Paul, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. The Trustee will be
permitted to engage in certain other transactions; however, if it acquires any
conflicting interest and there is a default under the Convertible Subordinated
Debentures, it must eliminate such conflict or resign.

The St. Paul and St. Paul Capital have agreed in the Indenture to indemnify
and hold harmless the Trustee against any losses or damages it may suffer as
Trustee.

The Chase Manhattan Bank (National Association), the Trustee under the
Indenture, also serves as the trustee under an indenture with The St. Paul dated
as of March 31, 1990 and has from time to time engaged in lending and other
transactions with, or performed services for, The St. Paul in the ordinary
course of business.

424B4 66th Page of 76 TOC 1st Previous Next ↓Bottom Just 66th
DESCRIPTION OF ST. PAUL CAPITAL STOCK

The following descriptions of the Common Stock and undesignated shares of
the Company are stated in general terms and are in all respects subject to, and
are qualified in their entirety by, reference to the applicable provisions of
the Company's Amended and Restated Articles of Incorporation, as amended, and
Bylaws, as amended, forms of which have been incorporated by reference as
exhibits to the Registration Statement of which this Prospectus forms a part.

COMMON STOCK

The St. Paul is authorized to issue 240,000,000 shares of Common Stock,
without par value per share. Each share of Common Stock is entitled to
participate PRO RATA in distributions upon liquidation, subject to the rights of
holders of undesignated shares, and to one vote on all matters submitted to a
vote of shareholders. The holders of Common Stock may receive cash dividends as
declared by the Board of Directors out of funds legally available therefor,
subject to the rights of any holders of undesignated shares. The outstanding
shares of Common Stock are, and the shares offered hereby when issued will be,
fully paid and nonassessable. Holders of Common Stock have no preemptive or
similar equity preservation rights, and cumulative voting of shares in the
election of directors is prohibited. The holders of more than 50% of the
outstanding shares of Common Stock have the voting power to elect all directors
and, except as is discussed at "Certain St. Paul Charter and Bylaw Provisions",
to approve mergers, sales of assets and other corporate transactions.

Each holder of Common Stock is entitled to such dividends as may be declared
by the Board of Directors of the Company out of funds legally available
therefor. The St. Paul Companies, Inc. is a holding company, and its primary
source for the payment of dividends is dividends from its subsidiaries. Various
state laws and regulations limit the amount of dividends that may be paid to the
Company by its insurance subsidiaries. As of March 31, 1995, $312 million was
available for the payment of dividends to the Company free from such
restrictions.

The transfer agent and registrar for St. Paul's Common Stock is First
Chicago Trust Company of New York.

UNDESIGNATED SHARES

The Board of Directors of the Company is authorized, without further action
by the shareholders, to establish from the 5,000,000 undesignated shares
authorized by the Amended and Restated Articles of Incorporation, one or more
classes and series, to designate each such class and series, to fix the relative
rights and preferences of each such class and series and to issue such shares.
Such rights and preferences may be superior to the St. Paul Common Stock as to
dividends, distributions of assets (upon liquidation or otherwise) and voting
rights. Undesignated shares may be convertible into shares of any other series
or class of stock, including St. Paul Common Stock, of the Company, if the Board
of Directors so determines.

Pursuant to such authority, the Board of Directors has designated 41,400
undesignated shares as St. Paul Series C Convertible Preferred Stock. For a
description of the St. Paul Series C Convertible Preferred Stock, see
"Description of Securities Offered -- Description of St. Paul Series C
Convertible Preferred Stock".

STOCK PURCHASE RIGHTS, SERIES A PREFERRED STOCK AND SERIES B PREFERRED STOCK

Pursuant to its authority to issue undesignated shares, the Board of
Directors of the Company has also adopted resolutions authorizing 50,000 shares
of Series A Junior Participating Preferred Stock, without par value (the "Series
A Preferred Stock"), and 1,450,000 shares of Series B Convertible Preferred
Stock (the "Series B Preferred Stock").

Shares of the Series A Preferred Stock are purchasable upon the exercise of
the Stock Purchase Rights, upon the terms and conditions set forth in the Rights
Agreement. The Stock Purchase Rights will expire on December 19, 1999, subject
to extension to December 18, 2002 under certain circumstances or earlier
redemption by The St. Paul. The Rights Agreement provides that, until the Stock
Purchase Rights become exercisable pursuant to the terms of the Rights
Agreement, the Stock Purchase Rights will be transferred with and only with the
St. Paul Common Stock. Until the time the Stock Purchase

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Rights become exercisable -- at which time separate certificates representing
the Stock Purchase Rights will be mailed to holders of record of the St. Paul
Common Stock -- the Stock Purchase Rights will be evidenced by the certificates
representing the related shares of St. Paul Common Stock.

Each share of Series A Preferred Stock, if and when issued, would be fully
paid and nonassessable. The holders of Series A Preferred Stock would be
entitled to 1,000 votes for each share held of record on all matters voted upon
by shareholders and would not be able to cumulate votes for the election of
directors. Subject to preferential rights, if any, of any undesignated shares,
if and when designated and issued by the Board of Directors, each outstanding
share of Series A Preferred Stock would be entitled to receive distributions and
dividends equal to 1,000 times the aggregate per share amounts declared on the
Common Stock. Upon liquidation of the Company, the holders of Series A Preferred
Stock would be entitled to receive (prior to holders of Common Stock or other
junior ranking stock) an aggregate amount per share equal to 1,000 times the
aggregate amount to be distributed per share to holders of Common Stock, subject
to a maximum of $100 per share plus accrued and unpaid dividends, if any. There
are no redemption, sinking fund, conversion or preemptive rights with respect to
the Series A Preferred Stock. All shares of Series A Preferred Stock have equal
rights and preferences.

The Series B Preferred Stock has been issued to the Savings Plus Preferred
Stock Ownership Plan Trust established by the Company. All outstanding shares of
Series B Preferred Stock are fully paid and nonassessable. Each share of
outstanding Series B Preferred Stock is entitled to the number of votes equal to
the number of shares of Common Stock into which such share of Series B Preferred
Stock could have been converted on the record date for determining the holders
of Common Stock entitled to vote on a particular matter. Currently, each share
of Series B Preferred Stock is entitled to four votes per share. Holders of
outstanding shares of Series B Preferred Stock are entitled to receive when, as
and if declared by the Board of Directors, cumulative quarterly cash dividends
at the annual rate of $11.724 per share in preference and in priority over the
Common Stock and Series A Preferred Stock. Upon liquidation, each share of
Series B Preferred Stock would have a preference of $100 per share over the
Common Stock and Series A Preferred Stock. The Series B Preferred Stock is
redeemable by the Company at the following redemption prices per share which
apply if redemption occurs during the twelve month period ending on and
including December 31 on each of the following years:

[Download Table]

YEAR REDEMPTION PRICE PER SHARE
-------------------------------------------- ----------------------------

1995........................................ $ 149.52
1996........................................ 148.22
1997........................................ 146.92
1998........................................ 145.62
1999 and thereafter......................... 144.30

plus accumulated and unpaid dividends, without interest, to and excluding the
date fixed for redemption. The Series B Preferred Stock may be converted, at any
time and from time to time, at the option of the holder into the number of
shares of Common Stock of the Company determined by dividing $144.30 for each
share of Series B Preferred to be converted by the then effective conversion
price per share of Common Stock. Currently, each share of Series B Preferred
Stock is convertible into four shares of Common Stock. There are no sinking fund
provisions or preemptive rights with respect to the Series B Preferred Stock.

CERTAIN ST. PAUL CHARTER AND BYLAWS PROVISIONS

In addition to the Rights Agreement, the Company's Amended and Restated
Articles of Incorporation and Bylaws contain provisions that may discourage a
third party from seeking to acquire the Company or to commence a proxy contest
or other takeover-related action.

Article V of the Company's Amended and Restated Articles of Incorporation
requires the affirmative vote of the holders of at least two-thirds of the
voting power of all voting shares of the Company for the approval, authorization
or adoption of any plan of merger; plan of exchange; sale, lease, transfer or
other disposition of all or substantially all of the Company's property and
assets not in the usual and regular course of business; or dissolution of the
Company. The affirmative vote of at least one-half of the voting

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power of all voting shares is required for amendments to the Company's Amended
and Restated Articles of Incorporation, except for amendments to Article V, for
which the affirmative vote of at least two-thirds of all voting shares is
required.

The Company's Bylaws contain certain procedural requirements with respect to
the nomination of directors by stockholders that require, among other things,
delivery of notice by such stockholders to the corporate secretary of the
Company not later than 60 days prior to the date of the stockholders meeting at
which such nomination is to be considered, PROVIDED, HOWEVER, that in the event
that less than 70 days' notice or prior disclosure of the date of this meeting
is given or made to shareholders, notice by the shareholders to be timely must
be so received not later than the close of business on the 10th day following
the date on which such notice of the date of the meeting was mailed or such
public disclosure was made. The Bylaws do not provide that a meeting of the
Board of Directors may be called by stockholders.

The effect of these provisions may be to deter attempts either to obtain
control of the Company or to acquire a substantial amount of its stock, even if
such a proposed transaction were at a significant premium over the
then-prevailing market value of the Common Stock, or to deter attempts to remove
the Board of Directors and management of the Company, even though some or a
majority of the holders of Common Stock may believe such actions to be
beneficial.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

GENERAL

This section is a summary of certain United States federal income tax
considerations that may be relevant to prospective purchasers of Preferred
Securities and represents the opinion of Sullivan & Cromwell, special tax
counsel to The St. Paul and St. Paul Capital, insofar as it relates to matters
of law and legal conclusions. This section is based upon current provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed regulations thereunder and current administrative rulings and court
decisions, all of which are subject to change. Subsequent changes may cause tax
consequences to vary substantially from the consequences described below.

No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Preferred
Securities. Moreover, the discussion is directed only to holders of Preferred
Securities who are individual citizens or residents of the United States who
hold the Preferred Securities as capital assets, and has only limited
application to corporations, estates, trusts and non-resident aliens.
Accordingly, each prospective purchaser of Preferred Securities should consult,
and should depend on, his or her own tax advisor in analyzing the federal,
state, local and foreign tax consequences of the purchase, ownership or
disposition of Preferred Securities.

INCOME FROM PREFERRED SECURITIES

In the opinion of Sullivan & Cromwell, St. Paul Capital will be a
partnership for federal income tax purposes. Accordingly, each holder of St.
Paul Capital Preferred Securities (a "Preferred Securityholder") will be
required to include in gross income the Preferred Securityholder's distributive
share of the net income of St. Paul Capital. Such income will generally not
exceed the dividends received on such Preferred Securities, except in limited
circumstances as described below under "Potential Deferral of Interest Payment".
No portion of such income will be eligible for the dividends received deduction.

DISPOSITION OF PREFERRED SECURITIES

Gain or loss will be recognized on a sale of Preferred Securities, including
a redemption for cash, equal to the difference between the amount realized and
the Preferred Securityholder's tax basis for the Preferred Securities sold. Gain
or loss recognized by a Preferred Securityholder on the sale or exchange of a
Preferred Security held for more than one year will generally constitute
long-term capital gain or loss. Subject to the discussion below under "--
Potential Deferral of Interest Payments", the adjusted tax basis of the
Preferred Securities sold will generally equal the amount paid for the Preferred
Securities.

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RECEIPT OF CONVERTIBLE SUBORDINATED DEBENTURES UPON LIQUIDATION OF ST. PAUL
CAPITAL

Under certain circumstances, as described under the caption "Description of
the Preferred Securities -- Special Event Distribution", Convertible
Subordinated Debentures may be distributed to Preferred Securityholders in
liquidation of St. Paul Capital. Under current United States federal income tax
law, such a distribution would be treated as a non-taxable exchange. Each
Preferred Securityholder would have an aggregate tax basis in the Convertible
Subordinated Debentures equal to such holder's aggregate tax basis in its
Preferred Securities. A holder's holding period in the Convertible Subordinated
Debentures so received in liquidation of St. Paul Capital would include the
period for which the Preferred Securities were held by such holder.

ST. PAUL CAPITAL INFORMATION RETURNS AND AUDIT PROCEDURES

The Managing Members of St. Paul Capital will furnish each Preferred
Securityholder with a Schedule K-1 each year setting forth such Preferred
Securityholder's allocable share of income for the prior calendar year. The
Managing Members are required to furnish such Schedule K-1 as soon as
practicable following the end of the year, but in any event prior to March 31.

Any person who holds Preferred Securities as a nominee for another person is
required to furnish to St. Paul Capital (a) the name, address and taxpayer
identification number of the beneficial owner and the nominee; (b) information
as to whether the beneficial owner is (i) a person that is not a United States
person, (ii) a foreign government, an international organization or any
wholly-owned agency or instrumentality of either the foregoing or (iii) a
tax-exempt entity; (c) the amount and description of Preferred Securities held,
acquired or transferred for the beneficial owner; and (d) certain information
including the dates of acquisitions and transfers, means of acquisitions and
transfers, and acquisition cost for purchases, as well as the amount of net
proceeds from sales. Brokers and financial institutions are required to furnish
additional information, including whether they are United States persons and
certain information on Preferred Securities they acquire, hold or transfer for
their own accounts. A penalty of $50 per failure (up to a maximum of $100,000
per calendar year) is imposed by the Code for failure to report such information
to St. Paul Capital. The nominee is required to supply the beneficial owners of
the Preferred Securities with the information furnished to St. Paul Capital.

POTENTIAL DEFERRAL OF INTEREST PAYMENTS

Under the Indenture, The St. Paul has the option to defer interest payments
on the Convertible Subordinated Debentures for up to 60 months. In the event
that interest payments are deferred, St. Paul Capital will continue to accrue
income equal to the amount of the interest payment due at the end of the
deferred interest payment period, on an economic basis over the length of the
deferred interest payment period.

Accrued income will be allocated to holders of record on the Business Day
preceding the last day of each calendar month without any corresponding cash
distribution at that time. As a result, holders of record during a deferral of
interest payments will include interest in gross income in advance of the
receipt of cash, and any such holders who dispose of Preferred Securities prior
to the record date for the payment of dividends following such deferral of
interest will include interest in gross income but will not receive any cash
related thereto from St. Paul Capital. The tax basis of a Preferred Security
will be increased by the amount of any interest that is included in income
without a receipt of cash, and will be decreased again when and if such cash is
subsequently received from St. Paul Capital.

EXCHANGE OF PREFERRED SECURITIES FOR ST. PAUL STOCK

A Preferred Securityholder should not recognize gain or loss upon the
exchange, through the Conversion Agent, of Preferred Securities for a
proportionate share of the Convertible Subordinated Debentures held by St. Paul
Capital. Except to the extent attributable to accrued but unpaid interest on the
Convertible Subordinated Debentures, a Preferred Securityholder should not
recognize gain or loss upon the conversion, through the Conversion Agent, of
Convertible Subordinated Debentures for St. Paul Common Stock or Depositary
Shares representing St. Paul Series C Convertible Preferred Stock. A Preferred
Securityholder will recognize gain, however, upon the receipt of cash in lieu of
a fractional share of St. Paul Common Stock or Depositary Shares representing
St. Paul Series C Convertible Preferred Stock equal to the amount of cash
received less the Preferred Securityholder's tax basis in

424B4 70th Page of 76 TOC 1st Previous Next ↓Bottom Just 70th
such fractional share. A Preferred Securityholder's tax basis in the St. Paul
Common Stock or the Depositary Shares representing St. Paul Series C Convertible
Preferred Stock received upon exchange and conversion should generally be equal
to the Preferred Securityholder's tax basis in the Preferred Securities
delivered to the Conversion Agent for exchange (plus any accrued but unpaid
interest on the Convertible Subordinated Debentures included in the Preferred
Securityholder's income as a result of the exchange, minus the basis allocated
to any fractional share for which cash is received). A Preferred
Securityholder's holding period in the St. Paul Common Stock or the Depository
Shares representing St. Paul Series C Convertible Preferred Stock received upon
exchange and conversion should generally begin on the date the Preferred
Securityholder acquired the Preferred Securities delivered to the Conversion
Agent for exchange.

ADJUSTMENT OF CONVERSION PRICE

Treasury Regulations promulgated under Section 305 of the Code would treat
St. Paul Capital (and, thus, Preferred Securityholders) as having received a
constructive distribution from The St. Paul in the event the conversion ratio of
the Convertible Subordinated Debentures were adjusted if (i) as a result of such
adjustment, the proportionate interest of St. Paul Capital in the assets or
earnings and profits of The St. Paul were increased and (ii) the adjustment was
not made pursuant to a bona fide, reasonable antidilution formula. An adjustment
in the conversion ratio would not be considered made pursuant to such a formula
if the adjustment was made to compensate for certain taxable distributions with
respect to the stock into which the Convertible Subordinated Debentures are
convertible. Thus, under certain circumstances, a reduction in the conversion
price for the Convertible Subordinated Debentures is likely to be taxable to St.
Paul Capital as a dividend to the extent of the current or accumulated earnings
and profits of The St. Paul. Preferred Securityholders would be required to
include their allocable share of such constructive dividend in gross income but
would not receive any cash related thereto. In addition, the failure to fully
adjust the conversion price of the Convertible Subordinated Debentures to
reflect distributions of stock dividends with respect to the St. Paul Common
Stock may result in a taxable dividend to the holders of the St. Paul Common
Stock.

Similarly, under Section 305 of the Code, adjustments to the conversion
price of the St. Paul Series C Convertible Preferred Stock, which may occur
under certain circumstances, may result in deemed dividend income to holders of
the Depositary Shares representing St. Paul Series C Convertible Preferred Stock
if such adjustments are not made pursuant to a bona fide, reasonable
antidilution formula, and failure to make such adjustments to the conversion
price of the St. Paul Series C Convertible Preferred Stock may result in deemed
dividend income to holders of the St. Paul Common Stock.

UNITED STATES ALIEN HOLDERS

Ownership of Preferred Securities by nonresident aliens, foreign
corporations and other foreign persons raises tax considerations unique to such
persons and may have substantially adverse tax consequences to them. Therefore,
prospective investors who are foreign persons or which are foreign entities are
urged to consult with their U.S. tax advisors as to whether an investment in
Preferred Securities represents an appropriate investment in light of those
unique tax considerations and possible adverse tax consequences.

BACKUP WITHHOLDING AND INFORMATION REPORTING

In general, information reporting requirements will apply to payments to
noncorporate United States holders of the proceeds of the sale of Preferred
Securities, St. Paul Series C Convertible Preferred Stock or St. Paul Common
Stock within the United States and "backup withholding" at a rate of 31% will
apply to such payments if the United States holder fails to provide an accurate
taxpayer identification number.

THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

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UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, St. Paul
Capital has agreed to sell to each of the Underwriters named below, and each of
such Underwriters, for whom Goldman, Sachs & Co. and J.P. Morgan Securities Inc.
are acting as representatives, has severally agreed to purchase from St. Paul
Capital, the respective number of Preferred Securities set forth opposite its
name below:

[Enlarge/Download Table]

NUMBER OF PREFERRED
UNDERWRITER SECURITIES
------------------------------------------------------------------------ --------------------

Goldman, Sachs & Co..................................................... 1,320,000
J.P. Morgan Securities Inc.............................................. 1,320,000
Dain Bosworth Incorporated.............................................. 96,000
Kemper Securities, Inc.................................................. 192,000
C.J. Lawrence/Deutsche Bank Securities Corporation...................... 96,000
Morgan Stanley & Co. Incorporated....................................... 192,000
Piper Jaffray Inc....................................................... 96,000
Salomon Brothers Inc.................................................... 192,000
Stifel, Nicolaus & Company, Incorporated................................ 96,000
----------
Total............................................................... 3,600,000
----------
----------

Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all such Preferred Securities
offered hereby, if any are taken.

The Underwriters propose to offer the Preferred Securities in part directly
to the public at the initial public offering price set forth on the cover page
of this Prospectus, and in part to certain securities dealers at such price less
a concession of $.675 per Preferred Security. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of $.10 per Preferred
Security to certain brokers and dealers. After the Preferred Securities are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the representatives.

In view of the fact that the proceeds from the sale of the Preferred
Securities will be used by St. Paul Capital to purchase the Convertible
Subordinated Debentures of The St. Paul, the Underwriting Agreement provides
that The St. Paul will pay as Underwriters' Compensation a commission of $1.125
per Preferred Security.

The St. Paul and St. Paul Capital have granted the Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 540,000 additional Preferred Securities solely to cover
over-allotments, if any. If the Underwriters exercise their over-allotment
option, the Underwriters have severally agreed, subject to certain conditions,
to purchase approximately the same percentage thereof that the number of
Preferred Securities to be purchased by each of them, as shown in the foregoing
table, bears to the Preferred Securities offered.

The St. Paul and St. Paul Capital have agreed not to offer, sell, contract
to sell, or otherwise dispose of any shares of St. Paul Common Stock, any other
capital stock of The St. Paul, any other security convertible into or
exercisable or exchangeable for St. Paul Common Stock or any such other capital
stock or debt securities substantially similar to the Convertible Subordinated
Debentures for a period of 180 days after the date of this Prospectus without
the prior written consent of the representatives, except for (a) the Preferred
Securities offered hereby, (b) St. Paul Common Stock or St. Paul Series C
Convertible Preferred Stock issued or delivered upon conversion or exchange of
the Convertible Subordinated Debentures, (c) securities issued or delivered upon
conversion, exchange or exercise of any other securities of The St. Paul
outstanding on or delivered upon conversion, exchange or exercise of any other
securities of The St. Paul outstanding on the date of this Prospectus, (d)
securities issued pursuant to The St. Paul's stock option or other benefit or
incentive plans maintained for its officers, directors or employees, or (e)
securities issued in connection with mergers, acquisitions or similar
transactions.

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In compliance with Article III, Section 34 of the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. (the "NASD"), no sales of
Preferred Securities may be made by any NASD member to a discretionary account
without the prior written approval of the transaction by the customer.

Certain of the Underwriters are customers of, or engage in transactions
with, and from time to time have performed services for, The St. Paul and its
subsidiaries and associated companies in the ordinary course of business.

Prior to this Offering, there has been no public market for the Preferred
Securities. The Preferred Securities have been approved for listing on the NYSE,
subject to notice of issuance, under the symbol "SPC pfM".

The St. Paul and St. Paul Capital have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.

VALIDITY OF THE SECURITIES

The validity of the Preferred Securities, the Convertible Subordinated
Debentures, the Guarantee, the St. Paul Common Stock, the Stock Purchase Rights
and the St. Paul Series C Convertible Preferred Stock issuable upon conversion
or exchange of the Convertible Subordinated Debentures will be passed upon for
The St. Paul by Andrew I. Douglass, Senior Vice President and General Counsel of
The St. Paul, St. Paul, Minnesota, and for the Underwriters by Sullivan &
Cromwell, New York, New York. Sullivan & Cromwell may rely on Mr. Douglass as to
all matters of Minnesota law and each of Mr. Douglass and Sullivan & Cromwell
may rely on Richards, Layton & Finger, Wilmington, Delaware, special Delaware
counsel to The St. Paul and St. Paul Capital, as to the matters of Delaware law
relating to the validity of the Preferred Securities and certain other matters
covered by such firm's opinion. Certain matters as to Minnesota law will be
passed on by Oppenheimer Wolff & Donnelly, Minneapolis, Minnesota. In addition,
certain matters as to United States taxation will be passed upon by Sullivan &
Cromwell as special tax counsel to the Company and St. Paul Capital. At May 8,
1995, Mr. Douglass beneficially owned 10,161 shares of St. Paul Common Stock and
held options to purchase 7,000 shares of St. Paul Common Stock. Sullivan &
Cromwell have from time to time rendered certain legal services to The St. Paul.

EXPERTS

The consolidated financial statements of the Company as of December 31, 1994
and 1993, and for each of the years in the three-year period ended December 31,
1994, and the related financial statement schedules, are incorporated by
reference herein from the Company's Annual Report on Form 10-K. Such
consolidated financial statements and related financial statement schedules have
been audited by KPMG Peat Marwick LLP, independent certified public accountants,
as stated in their reports incorporated by reference herein, and have been
incorporated by reference herein in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing. The reports of KPMG
Peat Marwick LLP on the December 31, 1994, consolidated financial statements and
related financial statement schedules refer to changes in the method of
accounting for certain investments, reinsurance, income taxes and postretirement
benefits other than pensions.

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INDEX OF DEFINED TERMS

[Enlarge/Download Table]

PAGE FIRST
DEFINED TERM DEFINED
-------------------------------------------------------------------------------------------------------- -------------

1940 Act................................................................................................ 46
Additional Dividends.................................................................................... 9
Additional Interest..................................................................................... 60
Applicable Price........................................................................................ 43
Beneficial Owner........................................................................................ 51
blockage period......................................................................................... 61
Business Day............................................................................................ 38
Certificate of Designation.............................................................................. 52
Change in 1940 Act Law.................................................................................. 46
Closing Price........................................................................................... 43
Code.................................................................................................... 68
Commission.............................................................................................. 5
Common Securities....................................................................................... 1
Common Stock Fundamental Change......................................................................... 44
Company................................................................................................. 1
Conversion Agent........................................................................................ 38
Conversion Expiration Date.............................................................................. 2
Convertible MIPS........................................................................................ 1
Convertible Subordinated Debentures..................................................................... 1
Current Market Price.................................................................................... 40
deferral of interest payments........................................................................... 3
Deposit Agreement....................................................................................... 53
Depositary.............................................................................................. 53
Depositary Receipts..................................................................................... 53
Depositary Shares....................................................................................... 2
Depositary's Office..................................................................................... 54
Direct Participants..................................................................................... 50
dividends............................................................................................... 1
DTC..................................................................................................... 4
Economy................................................................................................. 25
Entitlement Date........................................................................................ 43
Event of Default........................................................................................ 63
Exchange Act............................................................................................ 5
Exchange Election....................................................................................... 45
Exchange Election Meeting............................................................................... 45
Exchange Event.......................................................................................... 45
Exchange Price.......................................................................................... 38
Fire and Marine......................................................................................... 30
Fundamental Change...................................................................................... 44
Guarantee............................................................................................... 3
Guarantee Payments...................................................................................... 56
Indenture............................................................................................... 36
Indirect Participants................................................................................... 50
Interest Payment Date................................................................................... 59
Investment Company Event................................................................................ 46
LAE..................................................................................................... 34
Junior Stock............................................................................................ 58
L.L.C. Agreement........................................................................................ 7
Liquidation Distribution................................................................................ 47

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[Enlarge/Download Table]

PAGE FIRST
DEFINED TERM DEFINED
-------------------------------------------------------------------------------------------------------- -------------

Managing Members Payment................................................................................ 59
Managing Members........................................................................................ 7
NASD.................................................................................................... 72
Non-Stock Fundamental Change............................................................................ 44
Nuveen.................................................................................................. 18
NYSE.................................................................................................... 2
Participants............................................................................................ 50
Preferred Securities.................................................................................... 1
Preferred Securityholder................................................................................ 68
Purchaser Stock Price................................................................................... 44
Redemption Price........................................................................................ 12
Reference Market Price.................................................................................. 44
Registration Statement.................................................................................. 5
Restated Articles....................................................................................... 52
Rights Agreement........................................................................................ 12
Senior Indebtedness..................................................................................... 61
Senior Nonmonetary Default.............................................................................. 61
Senior Payment Default.................................................................................. 61
Series A Preferred Stock................................................................................ 66
Series B Preferred Stock................................................................................ 66
SFAS.................................................................................................... 25
Special Event........................................................................................... 46
Special Trustee......................................................................................... 15
St. Paul Capital........................................................................................ 1
St. Paul Common Stock................................................................................... 2
St. Paul Holdings....................................................................................... 7
St. Paul Series C Convertible Preferred Stock........................................................... 2
Convertible Subordinated Debentures..................................................................... 1
Stock Purchase Rights................................................................................... 2
Tax Event............................................................................................... 46
The St. Paul............................................................................................ 1
Transaction............................................................................................. 41
Trustee................................................................................................. 59
UITs.................................................................................................... 28
Underwriters' Compensation.............................................................................. 1

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE ST. PAUL AND ST. PAUL CAPITAL SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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TABLE OF CONTENTS

[Download Table]

PAGE
---------

Available Information.......................... 5
Incorporation of Certain Documents by
Reference..................................... 6
Prospectus Summary............................. 7
Investment Considerations...................... 18
Use of Proceeds................................ 20
Ratio of Earnings to Fixed Charges of the
Company....................................... 20
Capitalization................................. 21
Market Prices of St. Paul Common Stock......... 22
The St. Paul's Dividend Policy................. 22
Selected Financial and Operating Data.......... 23
Overview of Results............................ 24
Business....................................... 29
St. Paul Capital............................... 36
Description of Securities Offered.............. 36
Description of St. Paul Capital Stock.......... 66
Certain St. Paul Charter and Bylaws
Provisions.................................... 67
Certain Federal Income Tax Considerations...... 68
Underwriting................................... 71
Validity of the Securities..................... 72
Experts........................................ 72
Index of Defined Terms......................... 73

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3,600,000 PREFERRED SECURITIES

ST. PAUL CAPITAL L.L.C.

6% CONVERTIBLE MONTHLY INCOME
PREFERRED SECURITIES

GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY, AND CONVERTIBLE
INTO COMMON STOCK OF,

THE ST. PAUL COMPANIES, INC.

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[LOGO]

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GOLDMAN, SACHS & CO.

J.P. MORGAN SECURITIES INC.

REPRESENTATIVES OF THE UNDERWRITERS

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘424B4’ Filing	Date	First	Last	Other Filings

	5/31/25	12	59
	12/18/02	12	66
	12/19/99	12	66
	5/31/99	2	55
	5/31/95	1	59
	5/16/95	1
Filed on:	5/10/95
	5/9/95	1	44	S-3/A
	5/8/95	72
	5/1/95	22
	4/21/95	6		8-A12B
	3/31/95	3	66	10-Q
	3/23/95	7	29
	1/24/95	6
	12/31/94	6	72	10-K405, 11-K
	3/31/94	17	26	10-Q
	12/31/93	7	72	10-K, 11-K
	12/31/92	26
				List all Filings

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Filing Submission 0000912057-95-003447 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

St Paul Capital LLC, et al. – ‘424B4’ on 5/10/95

As of: Wednesday, 5/10/95 · Accession #: 912057-95-3447 · File #s: 33-58491, -01

Prospectus — Rule 424(b)(4)Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Prospectus — Rule 424(b)(4)
Filing Table of Contents