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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
---------------
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9910
WESTCORP EMPLOYEE STOCK OWNERSHIP AND SALARY SAVINGS PLAN
(FULL TITLE OF THE PLAN)
WESTCORP
23 PASTEUR
IRVINE, CALIFORNIA 92718-3804
(NAME OF ISSUER OF THE SECURITIES HELD PURSUANT
TO THE PLAN AND THE ADDRESS OF ITS
PRINCIPAL EXECUTIVE OFFICE)
2
REQUIRED INFORMATION
1. Not Applicable.
2. Not Applicable.
3. Not Applicable.
4. Westcorp Employee Stock Ownership and Salary Savings Plan (the "Plan")
is subject to the requirements of the Employee Retirement Income
Security Act of 1974 ("ERISA"). Attached hereto is a copy of the most
recent financial statements and schedules of the Plan prepared in
accordance with the financial reporting requirements of ERISA.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Westcorp Employee Stock Ownership and Salary Savings Plan has duly caused this
Annual Report to be signed by the undersigned thereunto duly authorized.
WESTCORP EMPLOYEE STOCK OWNERSHIP
AND SALARY SAVINGS PLAN
By: /s/ LEE A. WHATCOTT
----------------------------------
Lee A. Whatcott, Committee Member
June 28, 1996
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Years ended December 31, 1995 and 1994
CONTENTS
Report of Independent Auditors.................................................5
Audited Financial Statements
Statements of Net Assets Available for Benefits at December 31, 1995
and 1994 ...................................................................6
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1995.....................................................7
Notes to Financial Statements..................................................8
Other Financial Information
Schedule of Assets Held for Investment Purposes at December 31, 1995..........15
Schedule of Transactions in Excess of 5% of the Current Value
of Assets for the Year Ended December 31, 1995.............................16
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5
Report of Independent Auditors
Plan Committee
Westcorp Employee Stock Ownership and Salary Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Westcorp Employee Stock Ownership and Salary Savings Plan (the Plan) as of
December 31, 1995 and 1994, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1995. 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, 1995 and 1994, and the changes in its net assets available for
benefits for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audits were performed 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 Purposes as of December 31, 1995, and of
Transactions in Excess of 5% of the Current Value of Plan Assets for the year
then ended 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 audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
June 25, 1996
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
1995 1994
----------------------------
ASSETS
Cash $ 54,347 $ --
Short-term investments 525,894 1,612,370
Investments at fair value:
Stock 17,059,646 7,840,109
Mutual funds 2,978,584 1,819,781
Government National Mortgage Association
Securities 90,603 92,451
Unsettled investment transactions -- 11,743
----------- -----------
Total investments 20,709,074 11,376,454
Interest Receivable 32,071 863
Employee Deferrals Receivable 53,469 40,579
Contribution receivable 2,366,846 --
----------- -----------
Total Receivables 2,452,386 41,442
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Net assets available for benefits $23,161,460 $11,417,896
=========== ===========
See accompanying notes.
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1995
Additions to net assets attributed to:
Investment income:
Interest income $ 49,589
Dividends 417,919
Capital gains 16,785
Other gains 440,008
Contributions:
Employer 2,366,846
Employee 1,230,929
Net unrealized appreciation in fair value of investments 9,096,209
-----------
Total additions 13,618,285
Deductions from net assets attributed to:
Distributions and withdrawals paid to participants 1,874,721
-----------
Total deductions 1,874,721
-----------
Net increase 11,743,564
Net assets available for benefits at beginning
of year 11,417,896
-----------
Net assets available for benefits at end of year $23,161,460
===========
See accompanying notes.
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Notes to Financial Statements
December 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Fair Values of Financial Instruments: Cash and short-term investments are valued
at fair value. Common stock, Government National Mortgage Association
Securities, and mutual funds are valued at their respective reported sales
prices on the last business day of the year.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Western Financial Savings Bank (WFSB) is a wholly owned subsidiary of Westcorp
(the Company).
2. DESCRIPTION OF THE PLAN
The Westcorp Employee Stock Ownership and Salary Savings Plan (the Plan) is a
defined contribution profit sharing plan that covers substantially all employees
and provides for retirement benefits. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
WFSB makes contributions to the employee stock ownership portion of the Plan, as
determined by the Company's Board of Directors, and within the guidelines of
ERISA and the regulations of the Internal Revenue Service.
Employees may contribute up to 10% of annual earnings to the Plan through
regular payroll deductions under the 401(k) provisions of the Plan. Highly
compensated employees, as defined by the Plan, are limited to a 6% maximum
annual contribution. The Company may match up to 50% of employee elective
contributions, not to exceed 6% of employee compensation. Forfeitures are
credited to the employer and are used to reduce employer contributions. Plan
participants have six investment options. A participant may invest in one or a
combination of mutual fund options offered by American Funds and/or Westcorp
Stock.
It is the intent of the Company to continue the Plan; however, the Plan may be
terminated by the Company at any time. In the event the Plan terminates, the net
assets of the Plan will be allocated. All participants will vest 100%
immediately and will receive their credited balance as of the date of
liquidation.
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Information about the Plan agreement and the vesting and benefit provisions is
contained in the pamphlet Westcorp Employee Stock Ownership and Salary Savings
Plan Summary Plan Document. Copies of this pamphlet are available from the Plan
Committee.
3. BENEFITS PAYABLE
Vested benefits payable to participants of $171,092 and $168,742 at December 31,
1995 and 1994, respectively, are not reflected as a deduction from net assets
available for plan benefits in the Plan's financial statements, which creates a
difference from the Plan's IRS Form 5500, "Annual Return/Report of Employee
Benefit Plan," which has recorded the vested benefits as a liability.
4. INVESTMENTS
The Plan's investments, including investments bought during the year, increased
in fair value by $9,096,209 during 1995. Investment income of $924,301 was
realized in relation to these investments during 1995.
INCREASE
(DECREASE) IN
FAIR VALUE FAIR VALUE AT END
DURING YEAR OF YEAR
-----------------------------------
Year ended December 31, 1995:
Fair value as determined by quoted
market price:
Short-term investments $ - $ 525,894
Westcorp common stock
(922,143 shares) 8,662,727 17,059,646
Government National Mortgage
Association Securities (1,848) 90,603
Mutual funds 435,330 2,978,584
-----------------------------------
$ 9,096,209 $ 20,654,727
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Notes to Financial Statements (continued)
5. INCOME TAX STATUS
The Internal Revenue Service has issued a determination letter dated August 8,
1995, that the Plan qualifies, in form, under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the Code), and, the underlying trust is,
therefore, exempt from federal income taxes under Section 501(a) of the Code.
The Plan is required to operate in accordance with the Code to maintain its tax
qualification. The Plan administrator is not aware of any course of actions or
series of events that have occurred which might adversely affect the Plan's
qualified status.
6. ADMINISTRATIVE COSTS
WFSB has agreed to voluntarily pay the Plan's administrative expenses of
approximately $66,100 in 1995. This agreement to pay the administrative costs
can be canceled at any time.
7. EMPLOYER CONTRIBUTIONS
The Company's Board of Directors elected to provide a contribution in 1995 of
$2,366,846 for both the employee stock ownership (ESOP) and salary savings
portions of the Plan.
8. ESOP PARTICIPANT ALLOCATION
The Plan allocates contributions, investment changes and forfeitures to
participants' accounts as follows:
Contributions: Each participant is credited with one unit for each $100
of eligible compensation plus an additional unit for each full year of
service.
Investment Changes: Each participant account is allocated the amount of
investment changes on an annual basis in the same proportion that the
cash or shares of each participant's account bears to the total
accounts of all participants in the same investment option at the time
of the valuation.
Forfeitures: Forfeitures are allocated to participants who did not have
a break in service during the current year based on the proportion of
each participant's compensation to the total compensation of all such
participants during the year.
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Notes to Financial Statements (continued)
9. SEPARATE CONTRIBUTION PROGRAMS
The Salary Savings Plan maintains six separate investment programs. Participants
may choose how to allocate their contributions among the programs. The following
table summarizes the activity for each of the programs and the Employee Stock
Ownership Plan.
CASH MANAGEMENT U.S. GOVERNMENT INCOME GROWTH
FUND SECURITIES FUND FUND OF AMERICA FUND
------------------------------------------------------------------------
Net assets available for plan benefits,
January 1, 1995 $ 518,502 $ 210,756 $ 558,038 $ 536,134
Contributions:
Employer 18,899 15,401 56,726 84,075
Employee 55,286 54,080 123,749 237,728
Interest and dividend income 26,808 19,198 28,515 506
Capital gains - - - -
Other gains (losses) - (1,140) 319 4,196
Distributions and withdrawals paid to
participants (164,823) (26,285) (57,121) (93,273)
Net unrealized appreciation in
fair value of investments - 17,929 113,867 86,233
Transfer of funds (21,102) 47,791 (22,983) 88,765
------------------------------------------------------------------------
Net assets available for plan benefits,
December 31, 1995 $ 433,570 $ 337,730 $ 801,110 $ 944,364
========================================================================
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Notes to Financial Statements (continued)
(Table continued from previous page)
WASHINGTON MUTUAL FUND 401(K)
STOCK FUND ESOP TOTAL
- - --------------------------------------------------------------------------------------
$ 738,904 $ 2,812,207 $ 6,043,355 $ 11,417,896
69,501 175,137 1,947,107 2,366,846
199,765 560,321 - 1,230,929
37,352 113,562 241,567 467,508
16,785 - - 16,785
6,434 1 430,198 440,008
(117,356) (534,096) (881,767) (1,874,721)
217,301 2,805,409 5,855,470 9,096,209
22,020 (114,491) - -
- - --------------------------------------------------------------------------------------
$ 1,190,706 $ 5,818,050 $ 13,635,930 $ 23,161,460
======================================================================================
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Notes to Financial Statements (continued)
10. HOLDINGS OF PARTIES-IN-INTEREST
DECEMBER 31
1995
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Westcorp common stock
(922,143 shares in 1995) $ 17,059,646
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Other Financial Information
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1995
DESCRIPTION OF
INVESTMENT, INCLUDING
MATURITY DATE,
RATE OF INTEREST, PAR CURRENT
IDENTITY OF ISSUER OR BORROWER OR MATURITY VALUE COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Westcorp Common Stock 922,143 shares $ 6,325,415 $ 17,059,646
American Funds
U.S. Government Securities
Income Fund of America
Growth Fund
Washington Mutual Fund 146,682 units 2,590,677 2,978,584
American Funds
Cash Management Fund 413,169 units 413,169 413,169
Provident Institutional Funds
Treasury Trust Fund 112,725 units 112,725 112,725
Government National GNMA Pool #168962
Mortgage Association Single family pool at 11% Pass
(GNMA) Securities Through Certificate Matures July
15, 2016 81,278 90,603
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$ 9,523,264 $ 20,654,727
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Schedule of Transactions in Excess
of 5% of the Current Value of Plan Assets
Year ended December 31, 1995
CURRENT
VALUE OF
ASSET ON COST OF
DESCRIPTION OF ASSETS TRANSACTION DATE ASSET NET GAIN
- - -----------------------------------------------------------------------------------------------------------
Category (i) - single transactions in excess
of 5% of plan assets
Short-Term U.S. Gov't Securities $ 672,230 $ 672,230 $ -
Sumitomo Bank of California
Money Market Premium Account 819,959 819,959 -
There were no category (ii) reportable transactions during 1995.
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Schedule of Transactions in Excess
of 5% of the Current Value of Plan Assets (continued)
Year ended December 31, 1995
CURRENT
VALUE OF
ASSET ON COST OF
DESCRIPTION OF ASSETS TRANSACTION DATE ASSET NET GAIN
- - -----------------------------------------------------------------------------------------------------------------
Category (iii) - series of transactions in excess
of 5% of plan assets
Short-Term U.S. Gov't Securities $ 3,344,458 $ 3,344,458
Short-Term U.S. Gov't Securities (3,543,339) (3,543,339)
Westcorp Common Stock 1,258,772 1,258,772
Westcorp Common Stock (946,670) (516,471) $ 430,199
Sumitomo Bank of California
Money Market Premium Account 160,770 160,770
Sumitomo Bank of California
Money Market Premium Account (1,089,538) (1,089,538)
Treasury Trust Fund 863,649 863,649
Treasury Trust Fund (750,924) (750,924)
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Westcorp
Employee Stock Ownership and Salary Savings Plan
Schedule of Transactions in Excess
of 5% of the Current Value of Plan Assets (continued)
Year ended December 31, 1995
CURRENT
VALUE OF
ASSET ON COST OF
DESCRIPTION OF ASSETS TRANSACTION DATE ASSET NET GAIN
- - -------------------------------------------------------------------------------------------------------------------
Category (iv) - single transactions in excess
of 5% of plan assets
Mutual Fund Agent $ 1,017,054 $ 1,017,054
Mutual Fund Agent (471,110) (461,301) $ 9,809
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