SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
Commission File No. 2-83256
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
RELIABILITY INCORPORATED EMPLOYEE STOCK SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
RELIABILITY INCORPORATED
16400 Park Row
Houston, Texas 77084
P. O. Box 218370
Houston, Texas 77218-8370
1
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
December 31, 1993
TABLE OF CONTENTS
Financial Statements:
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . 3
Statements of Net Assets Available for Benefits . . . . . . . . . . 4
Statements of Changes in Net Assets Available for Benefits. . . . . 6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 7
Additional Financial Information:
Schedule 1 - Assets Held for Investment . . . . . . . . . . . . . . 21
Schedule 2 - Nonexempt Party-In-Interest Transactions . . . . . . . 22
Schedule 2 - Obligations in Default . . . . . . . . . . . . . . . . 22
Schedule 2 - Leases in Default. . . . . . . . . . . . . . . . . . . 22
Schedule 3 - Reportable Transactions. . . . . . . . . . . . . . . . 23
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
REPORT OF INDEPENDENT AUDITORS
The Administrative Committee
Reliability Incorporated Employee
Stock Savings Plan
We have audited the accompanying statements of net assets available for
benefits of the Reliability Incorporated Employee Stock Savings Plan and
Trust (the Plan) as of December 31, 1993 and 1992, and the related
statements of changes in net assets available for benefits for the three
years ended December 31, 1993. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of
the Plan at December 31, 1993 and 1992, and the changes in net assets
available for benefits for the three years ended December 31, 1993, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment at December 31, 1993 and 1992, and
reportable transactions for the two years ended December 31, 1993, are
presented for purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 and are not a required part of the basic
financial statements. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the financial statements and,
in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ ERNST & YOUNG
Houston, Texas
May 12, 1994
3
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31
--------------------
1993 1992
---- ----
Plan assets:
Investment in common stock of Reliability
Incorporated at fair value (345,362 and
453,702 shares at cost of $1,062,723
and $1,445,612 at December 31, 1993
and 1992 respectively) $1,165,597 $ 623,840
Investment in securities of unaffiliated
issuers:
Money Market Fund, at fair value,
which approximates cost (367,109 and
-0- units at December 31, 1993 and
1992, respectively) 367,109 -
Texas Commerce Bank N.A. (formerly
Ameritrust Texas) Short-Term Invest-
ment Funds, at fair value, which
approximates cost (-0- and 696,997
units at December 31, 1993 and 1992,
respectively) - 696,997
Investment (at fair value) in The Society Funds
of Society National Bank:
Intermediate Income Fund (8,594 and -0-
units at cost of $85,922 and $0 at
December 31, 1993 and 1992, respectively) 85,515 -
Value Stock Fund (12,320 and -0- units at
cost of $123,226 and $0 at December 31,
1993 and 1992, respectively) 124,428 -
Growth Stock Fund (11,060 and -0- units
at cost of $110,570 and $0 at December
31, 1993 and 1992, respectively) 110,930 -
Special Growth Stock Fund (16,459 and -0-
units at cost of $164,345 and $0 at
December 31, 1993 and 1992, respectively) 168,872 -
Participant Loans Outstanding:
Loan Fund (56,098 and -0- units at cost of
$56,098 and $0 at December 31, 1993 and
and 1992, respectively) 56,098 -
---------- ----------
$2,078,549 $1,320,837
See accompanying notes.
4
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (Continued)
December 31
------------------------
1993 1992
---- ----
Contributions receivable:
Employee - 7,144
Employer - 3,058
Employer voluntary - 62,508
---------- ----------
- 72,710
Other assets 1,148 1,225
---------- ----------
Total assets 2,079,697 1,394,772
Liabilities:
Terminations payable - 96,570
Stock purchases pending 47,499 -
Other liabilities 1,390 -
--------- ----------
Total liabilities 48,889 96,570
---------- ----------
Net assets available for benefits $2,030,808 $1,298,202
========== ==========
See accompanying notes.
5
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31
--------------------------------------
1993 1992 1991
---- ---- ----
Investment income:
Interest $ 18,070 $ 14,277 $ 23,923
Realized gain (loss) on
disposition of securities 111,392 78,775 (3,569)
---------- ---------- ----------
Total investment income 129,462 93,052 20,354
Unrealized appreciation
(depreciation) in fair value
of investments 644,525 49,770 86,727
Contributions:
Employee 176,975 129,308 138,148
Employer 62,892 58,819 54,597
Employer voluntary 41,841 62,508 61,633
---------- ---------- ----------
Total contributions 281,708 250,635 254,378
Withdrawals and terminations (312,896) (134,748) (84,703)
Fees and expenses (10,193) - -
---------- ---------- ----------
Net increase 732,606 258,709 276,756
Net assets available for benefits
at beginning of year 1,298,202 1,039,493 762,737
---------- ---------- ----------
Net assets available for
benefits at end of year $2,030,808 $1,298,202 $1,039,493
========== ========== ==========
See accompanying notes.
6
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1993
NOTE A - PARTICIPATION AND CONTRIBUTIONS
In July 1983, Reliability Incorporated (the "Company" or "Employer") adopted
an Employee Stock Savings Plan and Trust (the "Plan"). Under the Plan,
employees of the Company who meet the requirements described below are
eligible to participate in the Plan.
The Plan is administered by an Administrative Committee (the "Committee")
appointed by the Board of Directors of the Company. All assets of the Plan
are held under discretionary trust agreements.
United States employees of the Employer who have attained the age of 21 and
have completed 1 year of service, as defined in the Plan, become a member
("Member") of the Plan on January 1 or July 1 following the date on which
they became eligible and may elect to make contributions to the Plan as
described below. A Member's election to make contributions is entirely
voluntary, and each Member assumes all investment risks connected with the
securities held for his account by the Trustee.
Under the Plan, a Member may contribute, through payroll deductions, an
amount ("Employee Contribution") equal to 2 to 15 percent of defined
compensation. The employee may further elect to have all or a portion of
his contributions not be subject to federal income taxes under Section
401(k) of the Internal Revenue Code. Defined compensation excludes bonuses,
commissions, shift differentials, overtime premiums, and similar payments.
Participants may increase or decrease contribution percentages monthly.
The Employer matches the Employee Contribution by an amount ("Employer
Contribution") equal to 50 percent of the Employee Contributions but not
more than 2 percent of the employee's defined compensation. Also, the
Employer annually contributes to employed Members a supplemental amount
("Employer Voluntary Contribution") equal to 1 percent of the Members'
defined compensation for the period during which they were Members.
A Member receives a vested interest in the balances in the Employer Accounts
(Employer Contribution and Employer Voluntary Contributions plus allocated
earnings and realized and unrealized gains and losses thereon) based upon
years of service (as defined in the Plan) as follows:
Vested interest in
Years of Service Employer Accounts
---------------- ------------------
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
7
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1993
NOTE A - PARTICIPATION AND CONTRIBUTIONS - Continued
A Member always has a 100 percent vested interest in the balance in his
Employee Account (Employee Contributions plus allocated earnings and
realized and unrealized gains and losses thereon).
Upon death or total and permanent disability, a Member is automatically
fully vested in his Employer Accounts. If the Plan is terminated by the
Company, all Members become fully vested in all their accounts.
NOTE B - PLAN INVESTMENTS
A Member may elect to invest his Employee Contributions in one or more of
six funds: (i) the Reliability Incorporated ("RI") Common Stock Fund; (ii)
the EB Money Market Fund; (iii) the Society Intermediate Income Fund; (iv)
the Society Value Stock Fund; (v) the Society Growth Stock Fund; and (vi)
the Society Special Growth Stock Fund. The contribution to each fund
elected may not be less than 5 percent of the employee's total
contributions. The investment election for future contributions and
existing fund balances may be changed daily. The minimum investment balance
in any selected fund is 5% of the Employee Account.
On December 9, 1992, the Plan was amended to restrict investment in the RI
Common Stock Fund so as not to exceed 90% of the total fair value of the
investments of the Plan.
Employee Contributions to the RI Common Stock Fund and earnings thereon are
invested in the common stock of the Company, which is purchased by the
Trustee in the open market or from the Company, and in temporary short-term
investments. Purchases of stock from the Company are recorded at fair value
at the date of purchase. The fair value of the RI Common Stock Fund is
based on quoted market prices.
Employee Contributions to the EB Money Market Fund are primarily invested
in high grade money market instruments. The average life of the Fund is
less than 120 days and a minimum of 20% of the Fund is invested in overnight
investments. The fair value of the Fund is based on the face value of the
interest bearing certificates.
Employee contributions to the Society Intermediate Income Fund are invested
in investment-grade debt securities issued by corporations and obligations
of the U.S. Government and its agencies or instrumentalities. The Fund may
also invest in preferred stocks and intends to maintain a dollar weighted
average portfolio maturity of approximately three to eight years. The fair
value of the Fund is based on quoted market prices of those securities of
which it is comprised.
8
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1993
NOTE B - PLAN INVESTMENTS - Continued
Employee Contributions to the Society Value Stock Fund are primarily
invested in a diversified group of common stocks with an emphasis on
companies with above average total return potential. The fair value of the
Fund is based on quoted market prices of those stocks of which it is
comprised.
Employee Contributions to the Society Growth Stock Fund are invested in a
diversified group of common stocks with an emphasis on companies with
superior prospects for long-term earnings growth and price appreciation.
The fair value of the Fund is based on quoted market prices of those stocks
of which it is comprised.
Employee Contributions to the Society Special Growth Stock Fund are invested
in common stocks of small companies with a market value of less than $1
billion and medium-sized companies with a market value of $1-$5 billion that
are believed to have superior prospects for long-term earnings growth and
price appreciation. The fair value of the Fund is based on quoted market
prices of those stocks of which it is comprised.
Employer Contributions and Employer Voluntary Contributions are invested
solely in the RI Common Stock Fund. Purchases of securities are reflected
on the trade dates. A participant who is 55 years of age and who is 100%
vested in his Employer Accounts may elect to have a portion of his balance
in these accounts diversified to other investment funds offered under the
plan. This election may be made only once during each plan year.
Administrative expenses are paid by the Plan. As of December 31, 1993,
there were 142 Members in the Plan, of which 88 were making Employee
Contributions.
Gains and losses realized on the sale of securities in the RI Common Stock
Fund and Equity Fund are recorded on an average cost basis.
NOTE C - WITHDRAWALS AND TERMINATIONS
A Member may elect to withdraw all or a portion of his Employee
Contributions (exclusive of earnings thereon) if such contributions have
been made to the Plan for at least two years. If the employee elected to
have his contributions treated as not subject to federal income taxes, as
described in Note A, certain restrictions may apply. A Member making such
an election is not permitted to make future Employee Contributions prior to
the first day of the month following the expiration of one year from the
date of such withdrawal.
9
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1993
NOTE C - WITHDRAWALS AND TERMINATIONS - Continued
Upon a Member's termination of employment, the member may elect the method
of distribution of his Employee and vested Employer Accounts from the
following settlement options:
(1) Lump-sum payment or
(2) Periodic (monthly or quarterly) installments over a period not
to exceed 20 years. If distributions are payable in this
manner, the Member's Employee and Employer Accounts are
segregated and placed in a Distribution Account where gains,
losses, and earnings thereon are allocated. The Distribution
Account is invested in one of the six funds as elected by the
Member as described in Note B.
Distributions of the vested portion of the Employer Accounts of terminated
Members during the Plan years ending December 31, 1993 and December 31, 1992
totalled $137,768 and $27,363, respectively.
The nonvested portions of the Employer Accounts of a Member whose employment
was terminated, or who has retired prior to the attainment of seven years
of service, are forfeited and allocated among the other Members ($8,710 and
$8,643 in 1993 and 1992, respectively) as follows:
(1) The portion related to Employer Contributions is allocated to
the Members who have made Employee Contributions through the
entire Plan Year in the ratio of such Employee Contributions;
and
(2) The portion related to Employer Voluntary Contributions is
allocated to those Members receiving such contributions in the
ratio that each such Member's defined compensation for the Plan
Year, or that portion of the Plan Year during which he was a
Member of the Plan, bears to the total defined compensation for
all Members for the Plan Year.
Forfeitures are not considered reductions of the Employer's Contribution or
the Employer's Voluntary Contribution.
NOTE D - PARTICIPANT LOANS
Under the Plan, a participant may borrow up to the lesser of 1) $50,000, 2)
50% of his or her non-forfeitable accrued benefit or 3) the total of
employee contributions and earnings. The minimum loan amount is $1,000 and
the maximum loan term is five years. Loan payments are made through payroll
deductions. During 1993 and 1992, $61,575 and $0, respectively, were
borrowed by plan participants.
10
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE E - FEDERAL INCOME TAX AND ERISA
A favorable determination letter dated August 26, 1991, was received from
the Internal Revenue Service for the Plan as amended on January 1, 1989
regarding its qualification under Section 401(a) of the Internal Revenue
Code, and the Plan is exempt from federal income taxes under the provisions
of Section 501(a) of the Internal Revenue Code. The Plan has been amended
and restated since August 26, 1991 and the Plan's Administrative Committee
believes that the Plan, as amended and restated, continues to be qualified.
The Administrative Committee is currently in the process of obtaining a
favorable determination letter for the Plan.
The Plan is subject to certain provisions of the Employee Retirement Income
Security Act of 1974 (ERISA) relative to participation, vesting, and the
fiduciary responsibility of Plan Administrators, but is not subject to the
provisions which deal with funding requirements, prohibitions against
holding employer securities, or plan termination insurance.
11
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE F - STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY EACH INVESTMENT
FUND
December 31, 1993
---------------------------------------
Reliability EB Interm-
Incorporated Money ediate
Total Common Stock Market Income
Plan Fund Fund Fund
--------- ------------ ------- ------
Plan assets (at fair value):
Investment in common stock of
Reliability Incorporated
(345,362 shares at cost
of $1,062,723) $1,165,597 $1,165,597 $ - $ -
Investment in securities of
unaffiliated issuers:
EB Money Market Fund
(367,109 units at cost
which approximates fair
value) 367,109 50,443 316,666
Investment in The Society Funds
of Society National Bank:
Intermediate Income Fund
(8,594 units at cost of
$85,922) 85,515 85,515
Value Stock Fund (12,320
units at cost of $123,226) 124,428
Growth Stock Fund (11,060
units at cost of $110,570) 110,930
Special Growth Stock Fund
(16,459 units cost of
$164,345) 168,872
Loan Fund (56,098 units at
cost which approximates
fair value) 56,098
--------- ---------- ------- ------
2,078,549 1,216,040 316,666 85,515
Other assets 1,148 20 938 21
--------- ---------- ------- ------
Total Assets 2,079,697 1,216,060 317,604 85,536
Liabilities:
Pending Purchases 47,499 47,499
Fees and Expenses 1,390 997 145 38
--------- ---------- ------- ------
Total Liabilities 48,889 48,496 145 38
--------- ---------- ------- ------
Net Assets Available for Benefits 2,030,808 1,167,564 317,459 85,498
========= ========== ======= ======
12
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE E - STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY EACH INVESTMENT
FUND - Continued
December 31, 1993
---------------------------------------
Special
Value Growth Growth
Stock Stock Stock Loan
Fund Fund Fund Fund
------ ------- ------- ----
Plan assets (at fair value):
Investment in common stock of
Reliability Incorporated
(345,362 shares at cost
of $1,062,723)
Investment in securities of
unaffiliated issuers:
EB Money Market Fund
(367,109 units at cost
which approximates fair
value)
Investment in The Society Funds
of Society National Bank
Intermediate Income Fund
(8,594 units at cost
of $85,922)
Value Stock Fund (12,320
units) at cost of $123,226) 124,428
Growth Stock Fund (11,060
units at cost of $110,570) 110,930
Special Growth Stock Fund
(16,459 units cost of
$164,345) 168,872
Loan Fund (56,098 units at
cost which approximates
fair value) 56,098
--------- ---------- ------- ------
124,428 110,930 168,872 56,098
Other assets 54 45 70 -
--------- ---------- ------- ------
Total Assets 124,482 110,975 168,942 56,098
Liabilities:
Pending Purchases - - - -
Fees and Expenses 76 62 72 -
--------- ---------- ------- ------
Total Liabilities 76 62 72 -
--------- ---------- ------- ------
Net Assets Available for Benefits 124,406 110,913 168,870 56,098
========= ========== ======= ======
13
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE F - STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY EACH INVESTMENT
FUND - Continued
December 31, 1992
---------------------------------------
Reliability
Incorporated Short-
Total Common Stock Equity Term
Plan Fund Fund Fund
------ ------------ ------ ------
Plan assets:
Investment in common stock of
Reliability Incorporated at
fair value (453,702 shares
at cost of $1,445,612) $ 623,840 $623,840 $ - $ -
Investment in securities of
unaffiliated issuers:
Ameritrust Texas Short-
Term Investment Funds,
at fair value, which
approximates cost
(696,997 units) 696,997 5,032 359,655 332,310
---------- -------- -------- --------
1,320,837 628,872 359,655 332,310
Contributions receivable:
Employee 7,144 1,140 3,089 2,915
Employer 3,058 3,058 - -
Employer voluntary 62,508 62,508 - -
---------- -------- -------- --------
72,710 66,706 3,089 2,915
Other assets 1,225 26 131 1,068
---------- -------- -------- --------
Total assets 1,394,772 695,604 362,875 336,293
Liabilities:
Terminations payable 96,570 57,598 20,034 18,938
---------- -------- -------- --------
Net assets available
for benefits $1,298,202 $638,006 $342,841 $317,355
========== ======== ======== ========
14
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE F - STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY EACH
INVESTMENT FUND - Continued
December 31, 1993
---------------------------------------
Reliability EB Interm-
Incorporated Money ediate
Total Common Stock Market Income
Plan Fund Fund Fund
------- ------------ ------- ------
Investment income:
Interest $ 18,070 $ 452 $ 15,722 $ 263
Realized gain on disposition
of securities 111,392 98,335 - 1,467
---------- ---------- ------- ------
Total investment income 129,462 98,787 15,722 1,730
Unrealized appreciation
(depreciation) in fair value
of investments 644,525 638,843 - (407)
Contributions:
Employee 176,975 11,215 40,746 24,163
Employer 62,892 62,892 - -
Employer voluntary 41,841 41,841 - -
--------- ---------- ------- ------
281,708 115,948 40,746 24,163
Withdrawals and terminations (312,896) (105,651) (201,411) (2,106)
Fees and expenses (10,193) (6,560) (2,284) (254)
Investment transfers - (198,657) 496,907 64,616
Transfers (to) from Loan Fund - (4,442) (40,931) (2,244)
Forfeitures - (8,710) 8,710 -
--------- ---------- ------- ------
Net increase (decrease) 732,606 529,558 317,459 85,498
Net assets available for benefits
at beginning of year 1,298,202 638,006 - -
--------- ---------- ------- ------
Net assets available for benefits
at end of year $2,030,808 $1,167,564 $317,459 $85,498
========== ========== ======== =======
15
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE F - STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY EACH
INVESTMENT FUND - Continued
December 31, 1993
---------------------------------------
Special
Value Growth Growth
Stock Stock Stock Loan
Fund Fund Fund Fund
------ ------- ------- ----
Investment income:
Interest $ 141 $ 71 $ 55 $ 1,366
Realized gain on disposition
of securities 3,346 2,653 5,591 -
-------- -------- -------- -------
Total investment income 3,487 2,724 5,646 1,366
Unrealized appreciation
in fair value of investments 1,202 360 4,527 -
Contributions:
Employee 27,126 49,945 23,780 -
Employer - - - -
Employer voluntary - - - -
-------- -------- -------- -------
27,126 49,945 23,780 -
Withdrawals and terminations (1,043) (2,401) (284) -
Fees and expenses (432) (354) (309) -
Investment transfers 98,316 63,746 135,268
Transfers (to) from Loan Fund (4,250) (3,107) 242 54,732
Forfeitures - - - -
-------- -------- -------- -------
Net increase (decrease) 124,406 110,913 168,870 56,098
Net assets available for benefits
at beginning of year - - - -
-------- -------- -------- -------
Net assets available for benefits
at end of year $124,406 $110,913 $168,870 $56,098
======== ======== ======== =======
16
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE F - STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY EACH
INVESTMENT FUND - Continued
December 31, 1993
---------------------------------------
Short-
Equity term
Fund Fund
------ ------
Investment income:
Interest $ - $ -
Realized gain (loss) on
disposition of securities - -
---------- ---------
Total investment income - -
Unrealized appreciation
(depreciation) in fair value
of investments - -
Contributions:
Employee - -
Employer - -
Employer voluntary - -
---------- ---------
Withdrawals and terminations - -
Fees and expenses - -
Investment transfers (317,355) (342,841)
Transfers (to) from Loan Fund - -
Forfeitures - -
---------- ---------
Net increase (decrease) (317,355) (342,841)
Net assets available for benefits
at beginning of year 317,355 342,841
---------- ---------
Net assets available for benefits
at end of year $ - $ -
========== =========
17
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE F - STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY EACH
INVESTMENT FUND - Continued
December 31, 1992
---------------------------------------
Reliability
Incorporated Short-
Total Common Stock Equity Term
Plan Fund Fund Fund
------ ------------ ------ ------
Investment income:
Interest $ 14,277 $ 644 $ 821 $ 12,812
Realized gain (loss) on
disposition of securities 78,775 (5,020) 83,795 -
---------- -------- -------- --------
Total investment
income (loss) 93,052 (4,376) 84,616 12,812
Unrealized appreciation
(depreciation) in fair
value of investments 49,770 110,017 (60,247) -
Contributions:
Employee 129,308 30,502 51,364 47,442
Employer 58,819 58,819 - -
Employer voluntary 62,508 62,508 - -
---------- -------- -------- --------
250,635 151,829 51,364 47,442
Withdrawals and terminations (134,748) (59,228) (35,399) (40,121)
Investment transfers - 9,911 9,250 (19,161)
---------- -------- -------- --------
Net increase 258,709 208,153 49,584 972
Net assets available for
benefits at beginning
of year 1,039,493 429,853 293,257 316,383
---------- -------- -------- --------
Net assets available for
benefits at end of year $1,298,202 $638,006 $342,841 $317,355
========== ======== ======== ========
18
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE F - STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY EACH
INVESTMENT FUND - Continued
December 31, 1991
---------------------------------------
Reliability
Incorporated Short-
Total Common Stock Equity Term
Plan Fund Fund Fund
------ ------------ ------ ------
Investment income:
Interest $ 23,923 $ 1,873 $ 3,957 $ 18,093
Realized gain (loss) on
disposition of securities (3,569) (11,204) 7,635 -
---------- -------- -------- --------
Total investment
income (loss) 20,354 (9,331) 11,592 18,093
Unrealized appreciation in
fair value of investments 86,727 34,200 52,527 -
Contributions:
Employee 138,148 29,983 48,369 59,796
Employer 54,597 54,597 - -
Employer voluntary 61,633 61,633 - -
---------- -------- -------- --------
254,378 146,213 48,369 59,796
Withdrawals and terminations (84,703) (32,581) (30,496) (21,626)
Investment transfers - 19,692 (8,900) (10,792)
---------- -------- -------- --------
Net increase 276,756 158,193 73,092 45,471
Net assets available for
benefits at beginning
of year 762,737 271,660 220,165 270,912
---------- -------- -------- --------
Net assets available for
benefits at end of year $1,039,493 $429,853 $293,257 $316,383
========== ======== ======== ========
19
ADDITIONAL FINANCIAL INFORMATION
20
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
SCHEDULE 1 - ASSETS HELD FOR INVESTMENT
December 31
---------------------------------------------------------------------
1993 1992
----------------------------------- ------------------------------
Shares Fair Shares Fair
or Units Cost Value or Units Cost Value
-------- ---- ------ -------- ---- ------
Common stocks:
Reliability Incorporated 345,362 $1,062,723 $1,165,597 453,702 $1,445,612 $623,840
---------- ---------- ---------- --------
Investment in The Society Funds
of Society National Bank:
Intermediate Income Fund 8,594 85,922 85,515 - - -
Value Stock Fund 12,320 123,226 124,428 - - -
Growth Stock Fund 11,060 110,570 110,930 - - -
Special Growth Stock Fund 16,459 164,345 168,872 - - -
---------- ---------- ---------- ---------
484,063 489,745
---------- ---------- ---------- ---------
Short-term investment funds:
EB Money Market Fund 367,109 367,109 367,109 - - -
Ameritrust Texas Money
Market Fund - - - 696,997 696,997 696,997
---------- ---------- ---------- ---------
367,109 367,109 696,997 696,997
---------- ---------- ---------- ---------
Loan Fund 56,098 56,098 56,098 - - -
---------- ---------- ---------- ---------
TOTAL INVESTMENTS $1,969,993 $2,078,549 $2,142,609 $1,320,837
========== ========== ========== ==========
See accompanying notes.
21
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
December 31, 1993
SCHEDULE 2
Nonexempt party-in-interest transactions: There were no transactions
involving a party-in-interest as defined by the Employee Retirement Income
Security Act in Title I, Sec. 3(14) during the years ended December 31, 1993
and 1992, which were not disclosed elsewhere in the financial statements,
notes, or schedules.
Obligations in default: There were no loans or fixed income obligations in
default or uncollectible at December 31, 1993 and 1992.
Leases in default: There were no leases in default or uncollectible at
December 31, 1993 and 1992.
See accompanying notes.
22
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
SCHEDULE 3 - REPORTABLE TRANSACTIONS
1993
---------------------------------------------------
Purchases Dispositions Dispositions Gain(Loss) on
Price Cost Price Dispositions
--------- ------------ ------------ ------------
Common stocks:
Reliability
Incorporated $ 150,140 (1) $ 227,054 $ 327,179 (2) $100,125
========== ========== ========== ========
Investment in The
Society Funds of
Society National
Bank:
Intermediate
Income Fund 171,068 (3) 85,146 86,613 (4) 1,467
Value Stock Fund 242,701 (5) 119,475 122,821 (6) 3,346
Growth Stock Fund 220,901 (7) 110,332 112,985 (8) 2,653
Special Growth
Stock Fund 300,427 (9) 136,081 141,672(10) 5,591
---------- ---------- ---------- --------
$ 935,097 $ 451,034 $ 464,091 $ 13,057
========== ========== ========== ========
Short-term investment
funds:
EB Money Market
Fund $1,407,566(11) $1,040,456 $1,040,456(12) $ -
Ameritrust Texas
Money Market
Fund - 696,997 696,997(13) -
---------- ---------- ---------- --------
$1,407,566 $1,737,453 $1,737,453 $ -
========== ========== ========== ========
Number of transactions:
(1) - 15 (2) - 22
(3) - 27 (4) - 15
(5) - 34 (6) - 19
(7) - 29 (8) - 26
(9) - 34 (10) - 16
(11) 125 (12) - 149
(13) - 1
See accompanying notes.
23
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
SCHEDULE 3 - REPORTABLE TRANSACTIONS
1992
-------------------------------------------------------
Purchases Dispositions Dispositions Gain(Loss) on
Price Cost Price Dispositions
--------- ------------ ------------ ------------
Common stocks:
Reliability
Incorporated $ 143,430 (1) $ 7,054 $ 2,034 (2) $ (5,020)
========== ======== ======== ========
Equity funds:
Ameritrust Texas
Stock Fund $ 11,000 (3) $ 87,915 $124,970 (4) $ 37,055
Ameritrust Texas
Value Stock Fund 11,699 (5) 95,191 122,613 (6) 27,422
Ameritrust Texas
Special Situation
Stock Fund 9,800 (7) 40,534 56,838 (8) 16,304
Ameritrust Texas
International
Stock Fund 2,400 (9) 30,255 33,269(10) 3,014
---------- -------- -------- --------
$ 34,899 $253,895 $337,690 $ 83,795
========== ======== ======== ========
Short-term investment
funds:
Ameritrust Texas
Cash Management
Fund $ 1,480(11) $338,446 $338,446(12) $ -
Ameritrust Texas
Money Market
Fund 1,129,032(13) 432,035 432,035(14) -
---------- -------- -------- --------
$1,130,512 $770,481 $770,481 $ -
========== ======== ======== ========
Number of transactions:
(1) - 15 (8) - 1
(2) - 1 (9) - 2
(3) - 3 (10) - 1
(4) - 1 (11) - 2
(5) - 3 (12) - 5
(6) - 1 (13) - 114
(7) - 3 (14) - 71
See accompanying notes.
24
RELIABILITY INCORPORATED
EMPLOYEE STOCK SAVINGS PLAN
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
TEXAS COMMERCE BANK, N.A.
TRUSTEE
/s/ William L. Jones
- - --------------------
Vice President Date: June 6, 1994
RELIABILITY INCORPORATED EMPLOYEE
STOCK SAVINGS PLAN AND TRUST
/s/ L. Nelson Mower, Jr.
- - ------------------------
Administrative Committee Member Date: June 6, 1994
25