EXHIBIT 99.13
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL INFORMATION
DECEMBER 31, 1993 AND 1992
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
Independent Auditors' Report
The Annuity Board and Participants
American Capital Management & Research, Inc.
Profit Sharing and Savings Plan:
We have audited the accompanying statements of financial position of the
American Capital Management & Research, Inc. Profit Sharing and Savings
Plan (the "Plan") as of December 31, 1993 and 1992, and the related
statements of operations and changes in plan equity for each of the
years in the two-year period 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 financial position of the American
Capital Management & Research, Inc. Profit Sharing and Savings Plan as
of December 31, 1993 and 1992, and the results of its operations and
changes in its plan equity for each of the years in the two-year period
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 supplementary information
included in the Schedules is presented for purposes of additional
analysis and is not a required part of the basic financial statements,
but is supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, as amended. Such information
has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements
taken as a whole.
\s\ KPMG PEAT MARWICK
May 26, 1994
1
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Statement of Financial Position
December 31, 1993
American
American American American American Capital
Capital Travelers Capital Capital Capital Emerging
Reserve Common Corporate Enterprise Comstock Growth
Assets Fund Stock Fund Bond Fund Fund Fund Fund
- - - - - ------ ----------- ----------- ----------- ----------- ----------- ---------
Money market securities $ 1,938,762 $ 41,063 $ - $ - $ - $ -
Common stock - 13,370,123 1,575,310 4,268,315 597,272 1,498,618
Employer contributions
receivable 143,929 424,748 99,948 388,578 111,435 371,473
Other receivables 1,615 6,902 - - - -
----------- ----------- ----------- ----------- ----------- ---------
Total assets $ 2,084,306 $13,842,836 $ 1,675,258 $ 4,656,893 $ 708,707 $ 1,870,091
=========== =========== =========== =========== =========== ===========
Liabilities and Plan Equity
---------------------------
Other payables $ 111,960 $ 95,081 $ 1,635 $ 13,906 $ 976 $ 3,829
Plan equity 1,972,346 13,747,755 1,673,623 4,642,987 707,731 1,866,262
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities
and plan equity $ 2,084,306 $13,842,836 $ 1,675,258 $ 4,656,893 $ 708,707 $ 1,870,091
=========== =========== =========== =========== =========== ===========
Assets Total
- - - - - ------ ------
Money market securities $ 1,979,825
Common stock 21,309,638
Employer contributions
receivable 1,540,111
Other receivables 8,517
-----------
Total assets $24,838,091
===========
Liabilities and Plan Equity
---------------------------
Other payables $ 227,387
Plan equity 24,610,704
===========
Total liabilities
and plan equity $24,838,091
===========
See accompanying notes to financial statements.
2
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Statement of Financial Position
December 31, 1992
American American American American
Capital Travelers* Capital Capital Capital
Reserve Common Corporate Enterprise Pace
Assets Fund Stock Fund Bond Fund Fund Fund Total
- - - - - ------ ----------- ----------- ---------- ---------- ----------- -----------
Money market securities $ 2,261,789 $ 1,880 $ - $ - $ - $ 2,263,669
Common stock - 8,756,939 1,723,996 2,664,223 2,265,503 15,410,661
Dividend and interest
receivable - - 10,615 - - 10,615
Employer contributions
receivable 282,983 340,592 164,936 662,353 329,833 1,780,697
----------- ----------- ---------- ---------- ----------- -----------
Total assets $ 2,544,772 $ 9,099,411 $1,899,547 $3,326,576 $ 2,595,336 $19,465,642
=========== =========== ========== ========== =========== ===========
Liabilities and Plan Equity
---------------------------
Other payables $ 87,471 $ 82,385 $ 2,795 $ 5,106 $ 6,756 $ 184,513
Plan equity 2,457,301 9,017,026 1,896,752 3,321,470 2,588,580 19,281,129
----------- ----------- ---------- ---------- ----------- -----------
Total liabilities
and plan equity $ 2,544,772 $ 9,099,411 $1,899,547 $3,326,576 $ 2,595,336 $19,465,642
=========== =========== ========== ========== =========== ===========
* formerly Primerica
See accompanying notes to financial statements.
3
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Statement of Operations and Changes in Plan Equity
For the Year Ended December 31, 1993
American American American American
Capital Travelers* Capital Capital Capital
Reserve Common Corporate Enterprise Comstock
Fund Stock Fund Bond Fund Fund Fund
----------- ----------- ----------- ----------- -----------
Investment income (loss):
Net realized gains $ - $ 743,604 $ 20,276 $ 6,952 $ 1,091
Change in unrealized
appreciation (depreciation)
of investments - 4,428,102 45,267 (100,631) (28,816)
----------- ----------- ----------- ----------- -----------
- 5,171,706 65,543 (93,679) (27,725)
Dividends - 174,639 112,510 522,750 66,871
Interest 43,994 1,815 - - -
----------- ----------- ----------- ----------- -----------
43,994 5,348,160 178,053 429,071 39,146
Transfers from (to) other funds (508,974) 825,291 (13,922) 454,094 489,666
Contributions:
Employer:
401(k) Savings Plan - 627,267 - - -
Profit Sharing Program 143,969 427,100 100,681 397,307 111,450
Employee 74,791 309,531 129,411 427,055 73,652
----------- ----------- ----------- ----------- -----------
218,760 1,363,898 230,092 824,362 185,102
Benefits paid to participants
and withdrawals (126,775) (2,744,516) (615,717) (372,105) (5,207)
Forfeitures (111,960) (54,191) (1,635) (13,905) (976)
Administrative expenses - (7,913) - - -
----------- ----------- ----------- ----------- -----------
Net increase (decrease)
in Plan equity (484,955) 4,730,729 (223,129) 1,321,517 707,731
Plan equity, beginning of year 2,457,301 9,017,026 1,896,752 3,321,470 -
----------- ----------- ----------- ----------- -----------
Plan equity, end of year $ 1,972,346 $13,747,755 $ 1,673,623 $ 4,642,987 $ 707,731
=========== =========== =========== =========== ===========
American
American Capital
Capital Emerging
Pace Growth
Fund Fund Total
----------- ---------- ------------
Investment income (loss):
Net realized gains $ 3,822 $ 31,111 $ 806,856
Change in unrealized
appreciation (depreciation)
of investments - 138,410 4,482,332
----------- ---------- -----------
3,822 169,521 5,289,188
Dividends 301 88,927 965,998
Interest - - 45,809
----------- ---------- -----------
4,123 258,448 6,300,995
Transfers from (to) other funds (2,581,689) 1,335,534 -
Contributions:
Employer:
401(k) Savings Plan - - 627,267
Profit Sharing Program - 371,552 1,552,059
Employee 64,566 192,512 1,271,518
----------- ---------- -----------
64,566 564,064 3,450,844
Benefits paid to participants
and withdrawals (75,580) (287,955) (4,227,855)
Forfeitures - (3,829) (186,496)
Administrative expenses - - (7,913)
----------- ---------- -----------
Net increase (decrease)
in Plan equity (2,588,580) 1,866,262 5,329,575
Plan equity, beginning of year 2,588,580 - 19,281,129
----------- ---------- -----------
Plan equity, end of year --- $1,866,262 $24,610,704
=========== ========== ===========
* formerly Primerica See accompanying notes to financial statements.
4
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Statement of Operations and Changes in Plan Equity
For the Year Ended December 31, 1992
American American American American
Capital Travelers* Capital Capital Capital
Reserve Common Corporate Enterprise Pace
Fund Stock Fund Bond Fund Fund Fund Total
----------- ----------- ----------- ----------- ----------- -----------
Investment income (loss):
Net realized gains (losses) $ - $ 32,863 $ (1,478) $ (12,364) $ (5,074) $ 13,947
Change in unrealized
appreciation (depreciation)
of investments - 1,549,436 7,654 (192,826) (234,229) 1,130,035
----------- ----------- ----------- ----------- ----------- -----------
- 1,582,299 6,176 (205,190) (239,303) 1,143,982
Dividends - 126,275 139,277 403,295 330,883 999,730
Interest 60,956 1,171 - - - 62,127
----------- ----------- ----------- ----------- ----------- -----------
60,956 1,709,745 145,453 198,105 91,580 2,205,839
Transfers from (to) other funds (186,832) (93,140) (11,468) 580,379 (288,939) -
Contributions:
Employer:
401(k) Savings Plan - 521,403 - - - 521,403
Profit Sharing Program 282,983 340,592 164,936 662,353 329,833 1,780,697
Employee 123,472 229,620 129,987 403,641 266,704 1,153,424
----------- ----------- ----------- ----------- ----------- -----------
406,455 1,091,615 294,923 1,065,994 596,537 3,455,524
Benefits paid to participants
and withdrawals (330,018) (388,294) (82,845) (129,474) (122,735) (1,053,366)
Forfeitures (87,471) (82,385) (2,795) (5,106) (6,756) (184,513)
Administrative expenses - (5,504) - - - (5,504)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease)
in Plan equity (136,910) 2,232,037 343,268 1,709,898 269,687 4,417,980
Plan equity, beginning of year 2,594,211 6,784,989 1,553,484 1,611,572 2,318,893 14,863,149
----------- ----------- ----------- ----------- ----------- -----------
Plan equity, end of year $ 2,457,301 $ 9,017,026 $ 1,896,752 $ 3,321,470 $ 2,588,580 $19,281,129
=========== =========== =========== =========== =========== ===========
* formerly Primerica
See accompanying notes to financial statements.
5
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1993 and 1992
1. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are prepared on the accrual
basis of accounting whereby revenues are recognized when earned
and expenses are recognized when incurred.
Investments
Investments consist of common stock, fixed-income securities,
equity securities and money market securities and are stated at
fair value as established by quoted market prices. The
investments are primarily in the common stock of The Travelers
Inc., the parent of American Capital Management & Research, Inc.
and Subsidiaries ("ACMR"), or open-end management investment
companies (mutual funds) managed by a subsidiary of ACMR.
Security transactions are recorded on a trade date basis.
Realized gains and losses from the sale of investments are
determined separately based on average revalued cost (the
weighted average of the market value of the shares or units held
at the beginning of the plan year and the historical costs of the
shares or units acquired since the beginning of the plan year).
2. Description of the Plan
Background
The Board of Directors of ACMR approved the American Capital
Management & Research, Inc. Profit Sharing and Savings Plan
(formerly known as the American Capital Management & Research,
Inc. Thrift and Incentive Plan) (the "Plan") on September 9,
1983.
Continued
6
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Background, continued
On December 31, 1993 Primerica Corporation ("Primerica") acquired
approximately 73% of The Travelers Corporation ("old Travelers")
common stock that it did not previously own. Old Travelers was
merged into Primerica and concurrently Primerica changed its name
to The Travelers Inc. ("Travelers"). ACMR is a wholly-owned
indirect subsidiary of Travelers. Effective with the December
31, 1993 merger of Primerica and Travelers, the Primerica Common
Stock Fund has been changed to the Travelers Common Stock Fund
which invests in shares of Travelers common stock. All
references to Travelers stock activity prior to December 31, 1993
refer to the predecessor company, Primerica.
The Plan includes a profit sharing program ("Profit Sharing
Program") and a 401(k) savings plan ("401(k) Savings Plan") and
both programs have their own provisions concerning eligibility,
contributions, vesting, investments and distributions.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). The Plan is a
defined contribution plan; accordingly, no specific level of
benefits is guaranteed by the Plan.
The following description of the Plan is provided for general
information purposes only. Participants should refer to the
Prospectus/Summary Plan Description for more complete
information.
Eligibility
401(k) Savings Plan
-------------------
Full or part-time employees of ACMR and its participating
subsidiaries who have completed at least one year of service are
eligible to participate in the 401(k) Savings Plan.
Continued
7
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Eligibility, continued
Profit Sharing Program
----------------------
Full or part-time employees of ACMR and its participating
subsidiaries begin to accrue contributions under the Profit
Sharing Program as of the first day of the month coincident
with or next following their completion of six months of
service. In order to be eligible for a contribution under the
Profit Sharing Program a participant must be an active employee
of ACMR or one of its participating subsidiaries on the last day
of the plan year.
Investment Options
401(k) Savings Plan
-------------------
Through April 27, 1993, the Plan offered five investment options
available for investment of participant voluntary salary
reduction contributions. The five (5) options were: (a)
Travelers Common Stock Fund - invests in Travelers common stock;
(b) American Capital Corporate Bond Fund - invests in shares of
American Capital Corporate Bond Fund, Inc.; (c) American Capital
Reserve Fund - invests in shares of American Capital Reserve
Fund, Inc.; (d) American Capital Enterprise Fund - invests in
shares of American Capital Enterprise Fund, Inc. and (e) American
Capital Pace Fund - invests in shares of American Capital Pace
Fund, Inc.
Effective April 27, 1993, the American Capital Pace Fund was
removed from the Plan and all assets were exchanged into other
investment options in accordance with written instructions from
the participants. Also, effective April 27, 1993, American
Capital Comstock Fund which invests in shares of American Capital
Comstock Fund, Inc. and American Capital Emerging Growth Fund
which invests in shares of American Capital Emerging Growth Fund,
Inc. were added to the Plan's investment selections.
Salary reduction contributions under the 401(k) Savings Program
are invested in accordance with written direction of the
participant, in 5% increments, in the investment options
described above.
Continued
8
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Investment Options, continued
Profit Sharing Program
----------------------
Contributions under the Profit Sharing Program are invested, in
accordance with written directions of the participant, in 5%
increments, in the investment options described above. If no
instruction is given, such contributions are invested in the
Reserve Fund.
Contributions
401(k) Savings Plan
-------------------
The 401(k) Savings Plan allows for salary reduction contributions
on a pre-tax basis under Section 401(k) of the Internal Revenue
Code of 1986, as amended (the "Code"). In order to participate
in the Plan's 401(k) Savings Plan, an eligible participant must
reduce his salary and have a salary reduction contribution made
on his behalf of at least 1% and no more than 10% of his base
salary in 1% full increments.
In accordance with the Tax Reform Act of 1986, as amended,
participants are limited in the amount of pre-tax salary
reduction contributions which they may make to the Plan under
Section 402(g) of the Code ($8,994 and $8,728 annual maximum for
1993 and 1992, respectively).
Prior to 1989, the Plan permitted after-tax contributions, but
effective January 1, 1989, participants were no longer permitted
to make any contributions to the 401(k) Savings Plan other than
their pre-tax salary reduction contributions. However, any
funds held by the Plan as of December 31, 1988 which were
attributable to a participant's previous after-tax contributions
will continue to be held under the Plan.
Continued
9
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Contributions, continued
ACMR makes matching employer contributions for each participant
each pay period determined in accordance with the following
schedule:
Participant's salary Rate of matching ACMR
reduction contribution as a contribution as a percentage
percentage of compensation of compensation
---------------------------- ---------------------------
1.0% 1.0%
2.0 2.0
3.0 2.5
4.0 and over 3.0
Profit Sharing Program
----------------------
ACMR will make annual fixed contributions to the participant's
Profit Sharing Program account of 2-1/2% of the participant's
basic compensation up to the social security wage base ($57,600
and $55,500 for 1993 and 1992, respectively) plus 4% of the
participant's basic compensation in excess of the social security
wage base limited to the first $235,840 of pay for the 1993 plan
year. Effective January 1, 1994, the wage limit for qualified
retirement plans was reduced from $235,840 to $150,000.
Participants with five or more years of service with ACMR receive
an additional contribution equal to 1/2% of their basic
compensation. ACMR's fixed contributions to the Profit Sharing
Program for 1993 and 1992 aggregated $886,410 and $878,898,
respectively.
ACMR may also make annual contributions on a discretionary basis
ranging from 0-6% of the participant's compensation, as
determined by ACMR's Board of Directors. ACMR's discretionary
contributions to the Profit Sharing Program for 1993 and 1992
aggregated $653,622 and $901,799, respectively.
Effective January 1, 1993, the definition of basic compensation
was amended to exclude commissions and bonuses paid to
participants in the Long-Term Incentive Program of American
Capital Marketing, Inc.
Continued
10
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Vesting
401(k) Savings Plan
-------------------
A participant in the 401(k) Savings Plan has a non-forfeitable
interest in his salary reduction contribution account at all
times.
Matching employer contributions for participants whose ACMR
employment began before January 1, 1992 vest in accordance with
the following schedule:
Full years of Service Vesting percentage
--------------------- ------------------
1 25%
2 50%
3 75%
4 or more 100%
Matching employer contributions for participants whose ACMR
employment began after December 31, 1991 vest in accordance with
the following schedule:
Full years of Service Vesting percentage
--------------------- ------------------
Less than 5 0%
5 or more 100%
Profit Sharing Program
----------------------
Contributions under the Profit Sharing Program vest in accordance
with the following schedule:
Full years of Service Vesting percentage
--------------------- ------------------
Less than 3 0%
3 50%
4 75%
5 or more 100%
Under both plans contributions become fully vested upon
occurrence of normal retirement date, termination due to
disability, or death.
Continued
11
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Distributions and Withdrawals
401(k) Savings Plan
-------------------
A terminated participant's vested interest in the Plan's 401(k)
Savings Plan is distributed to him following his attaining a
normal retirement age of 65 (or following actual retirement, if
later) unless he elects to have a distribution made to him
following his termination of employment prior to attaining the
age of 65.
Generally, in-service withdrawals of a participant's before- and
after-tax contributions and vested ACMR contributions are
permitted subject to various conditions and restrictions,
depending upon the nature of the contribution (or earnings
thereon) being withdrawn, the participant's age, and the
participant's vested interest and length of participation in the
Plan. A participant who makes a withdrawal in excess of the
amount of his after-tax contributions who has been in the Plan
for at least two years and who has not completed 60 months of
participation in the Plan or attained age 59-1/2 is not credited
with any ACMR matching employer contributions for a period of six
months. Withdrawals from an employed participant's pre-tax
salary reduction account are permitted only upon attaining age
59-1/2 or due to financial hardship as defined in the Plan.
Earnings on pre-tax contributions credited to a participant's
account after 1988 and any matching employer contributions (and
earnings thereon) used to satisfy the Section 401(k)
nondiscrimination requirements of the Code will not be available
for hardship withdrawal. Hardship withdrawal results in certain
limitations as to participation for a one-year period. Only one
withdrawal is permitted in a twelve-month period other than for
financial hardship.
Profit Sharing Program
----------------------
Withdrawals from a participant's Profit Sharing Program account
are not permitted prior to termination of employment, except in
the case of a participant who is fully vested in such accounts
and who has attained the age of 59-1/2 years.
Continued
12
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Forfeitures
The nonvested portion of a terminated participant's contribution
account is forfeited, subject to reinstatement if the participant
is re-employed by ACMR before incurring a five-year break in
service and repays any distribution of the vested portion of his
account. Forfeitures are used to reduce future ACMR
contributions.
Cost of Administration
The Plan provides that all administrative expenses of the Plan
shall be paid from assets of the Plan except to the extent the
employer makes other provisions therefor. During the years 1993
and 1992, all administrative expenses of the Plan were paid by
ACMR with the exception of fees charged by Mellon Bank for the
purpose of acting as custodian for Travelers Common Stock Fund.
Brokerage commissions and other expenses relating to the purchase
or sale of investments are paid by the Plan.
American Capital Trust Company (the "Trustee"), a subsidiary of
ACMR acts as Trustee and performs all recordkeeping
responsibilities for the Plan.
Participants' Accounts
Each participant's 401(k) Savings Plan account consists of the
participant's pre-tax and after-tax contributions and an
allocation of (a) ACMR's matching employer contributions and (b)
Plan earnings.
The Profit Sharing Program contributions made on behalf of a
participant by ACMR are held in a separate "Profit Sharing
Program account" which reflects each participant's share of the
investment fund attributed to such ACMR contributions.
Continued
13
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Participant's Accounts, continued
At December 31, 1993 and 1992, there were 696 and 616 total
participants, respectively, in the Plan, of whom 455 and 500 were
active participants (currently making 401(k) Plan contributions
as of such dates), respectively, in the Plan.
These participants have elected to invest in the following
programs:
Number of participant
accounts in each program
------------------------
1993 1992
---- ----
American Capital Reserve Fund 306 397
Travelers Common Stock Fund 610 547
American Capital Corporate
Bond Fund 312 319
American Capital Enterprise Fund 484 423
American Capital Pace Fund 0 437
American Capital Comstock Fund 159 0
American Capital Emerging Growth Fund 318 0
The number of accounts exceed actual participants due to the
multiple investment elections made by some participants.
3. Federal Income Taxes
On August 10, 1987, the Plan received its latest favorable
determination from the Internal Revenue Service approving the
continued exemption of the Plan from Federal income taxes. The
Plan has been amended to incorporate certain operational
amendments since such date. In the opinion of the plan sponsor,
the Plan and its underlying trust have operated within the terms
of the Plan and the plan sponsor intends to apply for a
determination letter by June 30, 1994 on the status of the Plan
under Section 401(a) of the Code regarding the most recent
amendments.
Continued
14
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
3. Federal Income Taxes, continued
Matching employer contributions, participant's pre-tax salary
reduction contributions and all earnings (including earnings on
after-tax contributions) are not taxable to the participant until
distributed. Once a participant has withdrawn all his pre-1987
employee after-tax contributions, the pro rata portion of any
pre-retirement distribution (which is not rolled over)
attributable to matching employer contributions and participant
salary reduction contributions, and all earnings, are subject to
a 10% excise tax in addition to normal federal income tax except
in certain circumstances. Unrealized appreciation on
distributions of Travelers common stock and attributable to
nondeductible employee contributions is not taxable at the time
of payment. Unrealized appreciation on shares of Travelers
common stock distributed in a qualifying lump sum distribution is
also not taxable at the time of distribution.
4. Related Party Transactions
The Plan invests in the common stock of Travelers (formerly
Primerica). During 1993 and 1992 the Plan had the following
purchases and sales/distributions of Travelers common stock:
1993 1992
---------- ----------
Purchases: $2,330,210 $1,289,340
Sales/distributions: 2,888,732 610,236
Realized gains: 743,604 32,863
5. Plan Termination
ACMR has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to
the provisions of ERISA. In the event of Plan termination,
participants would become 100% vested in both the 401(k) Savings
Plan matching employer contributions and Profit Sharing
contributions.
Continued
15
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
6. Investments
The following table summarizes the Plan's investments as of December 31, 1993 and 1992.
All assets are held in the name of the Plan by the Trustee.
Number of ERISA Fair
Shares Cost Value
---------- ----------- ---------------
1993
------------------------
American Capital Reserve
Fund, Inc. 1,938,762 $ 1,938,762 $ 1,938,762
Travelers Common Stock Fund:
Money market securities 41,063 41,063 41,063
Travelers common stock 343,926 8,942,021 13,370,123
American Capital Corporate
Bond Fund, Inc. 220,632 1,530,043 1,575,310
American Capital Enterprise
Fund, Inc. 349,004 4,368,946 4,268,315
American Capital Comstock
Fund, Inc. 36,441 626,088 597,272
American Capital Emerging
Growth Fund, Inc. 57,974 1,360,208 1,498,618
----------- -----------
$18,807,131 $23,289,463
=========== ===========
1992
----------------------------
American Capital Reserve
Fund, Inc. 2,261,789 $ 2,261,789 $ 2,261,789
Travelers* Common Stock Fund:
Money market securities 1,880 1,880 1,880
Travelers* common stock 181,022 7,207,503 8,756,939
American Capital Corporate
Bond Fund, Inc. 251,311 1,716,342 1,723,996
American Capital Enterprise
Fund, Inc. 210,777 2,857,049 2,664,223
American Capital Pace
Fund, Inc. 184,939 2,499,732 2,265,503
----------- -----------
$16,544,295 $17,674,330
=========== ===========
* formerly Primerica
Continued
16
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
7. Net Realized Gains and Losses
The net realized gains and losses for the years ended December 31, 1993 and 1992 are as
follows:
Proceeds Net
Shares/ ERISA or Value at Realized
Units Cost Distribution Gains(Losses)
------- ------------ ------------ -------------
1993
--------------------
Travelers
common stock 62,774 $ 2,145,128 $ 2,888,732 $ 743,604
American Capital
Corporate
Bond Fund, Inc. 110,736 764,350 784,626 20,276
American Capital
Enterprise Fund,
Inc. 81,570 1,026,412 1,033,364 6,952
American Capital
Pace Fund, Inc. 218,400 2,688,558 2,692,380 3,822
American Capital
Comstock Fund, Inc. 1,349 23,257 24,348 1,091
American Capital
Emerging Growth
Fund, Inc. 11,710 261,716 292,827 31,111
----------- ----------- ------------
$ 6,909,421 $ 7,716,277 $ 806,856
=========== =========== ============
1992
--------------------
Travelers*
common stock 14,766 $ 577,373 $ 610,236 $ 32,863
American Capital
Corporate
Bond Fund, Inc. 36,393 248,290 246,812 (1,478)
American Capital
Enterprise
Fund, Inc. 31,170 428,331 415,967 (12,364)
American Capital
Pace Fund, Inc. 44,796 618,080 613,006 (5,074)
----------- ----------- ----------
$ 1,872,074 $ 1,886,021 $ 13,947
=========== =========== ==========
* formerly Primerica
Continued
17
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
8. Unrealized Appreciation (Depreciation) of Investments
The unrealized appreciation (depreciation) of investments by fund for the years ended December 31, 1993 and 1992 is as follows:
American American American American
Travelers* Capital Capital Capital Capital
Common Corporate Enterprise Pace Comstock
Stock Fund Bond Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
Balance at
December 31, 1991 $ 2,610,160 $ 37,126 $ 107,434 $ 243,117 $ -
Change in unrealized
appreciation (depre-
ciation) during 1992 1,549,436 7,654 (192,826) (234,229) -
----------- ----------- ----------- ----------- -----------
Balance at
December 31, 1992 4,159,596 44,780 (85,392) 8,888 -
Change in unrealized
appreciation (depre-
ciation) during 1993 4,428,102 45,267 (100,631) - (28,816)
----------- ----------- ----------- ----------- -----------
Balance at
December 31, 1993 $ 8,587,698 $ 90,047 $ (186,023) $ 8,888 $ (28,816)
=========== =========== =========== =========== ===========
American
Capital
Emerging
Growth
Fund Total
----------- -----------
Balance at
December 31, 1991 $ - $ 2,997,837
Change in unrealized
appreciation (depre-
ciation) during 1992 - 1,130,035
---------- ----------
Balance at
December 31, 1992 - 4,127,872
Change in unrealized
appreciation (depre-
ciation) during 1993 138,410 4,482,332
---------- ----------
Balance at
December 31, 1993 $138,410 $ 8,610,204
=========== ===========
* formerly Primerica
18
SUPPLEMENTAL SCHEDULES
19
Schedule I
----------
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Reportable Transactions
For the Year Ended December 31, 1993
Additions Dispositions
------------------- ----------------------------------------------------------------
Current Value
Purchase Selling Cost of on transaction Net
Description of Assets Number Price Number Price Asset Date Gain
- - - - - --------------------------- ------ ----------- ------ ----------- ----------- -------------- --------
Money Market Securities 127 $ 3,365,329 76 $ 3,351,669 $ 3,351,669 $ 3,351,669 $ -
American Capital Reserve
Fund, Inc. 55 390,291 79 713,318 713,318 713,318 -
Travelers* Common Stock 51 2,330,210 61 2,888,732 2,145,128 2,888,732 743,604
American Capital Enterprise
Fund, Inc. 72 2,731,135 58 1,033,364 1,026,412 1,033,364 6,952
American Capital Corporate
Bond Fund, Inc. 62 570,397 62 784,626 764,350 784,626 20,276
American Capital Pace Fund, Inc. 19 423,056 34 2,692,380 2,688,558 2,692,380 3,822
American Capital Comstock
Fund, Inc. 33 649,345 13 24,348 23,257 24,348 1,091
American Capital Growth
Fund, Inc. 43 1,621,924 14 292,827 261,716 292,827 31,111
* formerly Primerica
20
Schedule II
-----------
AMERICAN CAPITAL MANAGEMENT & RESEARCH, INC.
PROFIT SHARING AND SAVINGS PLAN
Assets Held for Investment Purposes
December 31, 1993
See Note 6 of the accompanying financial statements for
detail of Assets Held for Investment Purposes.
21