<PAGE> 1
United States 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
(Mark One)
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the Fiscal year ended December 31, 1999
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the transition period from _____________________ to _____________________
Commission file number 0-7849
A. Full title of the Plan and the address of the Plan, if different from that
of the issuer named below:
W.R. Berkley Corporation
Profit Sharing Plan
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
W. R. Berkley Corporation
165 Mason Street
Greenwich, CT 06836-2518
<PAGE> 2
W. R. Berkley Corporation Profit Sharing Plan
Index to Financial Statements
<TABLE>
<CAPTION>
Page(s)
<S> <C>
Independent Auditors' Report ............................................... 3
Statements of Net Assets Available for Plan Participants as of December 31, 1999
and 1998............................................................. 4
Statements of Changes in Net Assets Available for Plan Participants
for the years ended December 31, 1999 and 1998............................. 5
Notes to Financial Statements............................................... 6
Schedule H, Line 4i: Schedule of Assets Held 15-16
</TABLE>
2
<PAGE> 3
Independent Auditors' Report
The Plan Trustees and Plan Participants
W.R. Berkley Corporation Profit Sharing Plan:
We have audited the accompanying financial statements of the W.R. Berkley
Corporation Profit Sharing Plan (the "Plan") as listed in the accompanying
index. 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 plan participants of the
W.R. Berkley Corporation Profit Sharing Plan as of December 31, 1999 and 1998
and the changes in net assets available for plan participants for the years then
ended, 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 supplemental schedule of assets held
is presented for the purpose 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. The supplemental
schedule is the responsibility of the Plan's management. The supplemental
schedule 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.
KPMG LLP
New York, New York
May 19, 2000
3
<PAGE> 4
W.R. Berkley Corporation Profit Sharing Plan
Statements of Net Assets Available for Plan Participants
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Assets:
Investments, at fair value (cost $151,597,531 and $129,010,001) $175,852,556 $142,823,109
Employer contributions receivable 7,764,796 8,523,575
Employee contributions receivable 112,868 76,149
Participant loans 3,889,281 3,723,453
------------ ------------
Net assets available for plan participants $187,619,501 $155,146,286
============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
W.R. Berkley Corporation Profit Sharing Plan
Statements of Changes in Net Assets Available for Plan Participants
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net assets available for plan participants, beginning of year $155,146,286 $123,245,171
=========== ===========
Additions:
Employer contributions 7,764,856 8,522,536
Employee contributions 8,991,648 8,809,239
Rollover additions and reinstatement contributions 2,138,281 2,542,001
Interest and dividend income 14,154,807 8,426,807
Loan interest 295,159 269,580
Net appreciation in fair value of investments 13,760,021 11,947,000
Signet Star asset transfer into Plan -- --
Other (24,285) (21,790)
----------- -----------
47,080,487 40,495,373
----------- -----------
Deductions:
Payments to participants (14,607,272) (8,594,258)
----------- ----------
Net increase 32,473,215 31,901,115
----------- -----------
Net assets available for plan participants, end of year $187,619,501 $155,146,286
=========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements
(1) Plan Description
The following brief description of the W.R. Berkley Corporation (the
"Company") Profit Sharing Plan (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan document
for more complete information. The Plan is a defined contribution plan
and was established for the benefit of eligible employees of the Company
and participating subsidiaries. The Plan was established as of January 1,
1973 and amended and restated as of January 1, 1994 to reflect the change
in tax laws and restated as of January 1, 1995 to reflect changes in
investment elections. The Plan was further restated as of January 1, 1998
to reflect changes in the tax law and the merger of Signet Star Holdings,
Inc. Profit Sharing Plan into the Plan. In March 1999, the Plan was
amended to provide for full and immediate vesting of the Plan
participation accounts of employees whose employment is involuntarily
terminated without cause in connection with the restructuring of certain
subsidiaries of the Company. The major provisions of the Plan include:
(i) the minimum annual employer contribution is 5% of eligible
compensation as defined; (ii) employer contributions are made on an
annual basis; (iii) a Company 401(k) Savings Account was established in
conjunction with the Profit Sharing Plan, whereby a minimum of 40% of the
employer contribution to the Plan is allocated to the Company 401(k)
account; and (iv) employees may elect to make voluntary tax-deferred
contributions up to 16% of eligible compensation, subject to certain
limitations, to the Employee 401(k) account.
Participants are 100% vested in their Employee 401(k) voluntary
contributions as well as the employer contribution to their Company
401(k) account. Vesting in the portion of the employer contribution that
is not allocated to the Company 401(k) account occurs at the rate of 20%
per year beginning after three years of continuous employment as defined
and participation in the Plan. However, in the event of death, disability
or retirement, in accordance with the provisions of the Plan, the
participant becomes 100% vested. Distributions from the Plan are made in
a lump sum or in annual installments, not to exceed 15 years.
Effective July 1, 1997, Fidelity Investments ("Fidelity") was appointed
by the Profit Sharing Finance Committee as the trustee, custodian and
recordkeeper for the Plan. The Company has a Profit Sharing Plan Finance
Committee to select the investment alternatives provided by the Plan. The
Company has a Profit Sharing Plan Administrative Committee to assist in
the administration of the Plan. Participants are responsible for
directing the investment of the their respective accounts. The account of
each participant is valued on a daily basis.
Additionally effective on July 1, 1997, the Signet Star Holdings, Inc.
Profit Sharing Plan ("Signet Star Plan") was merged into the Plan. Each
participating employee in the Signet Star Plan became a participating
employee in the Plan. Prior service under the Signet Star Plan prior to
the merger was counted for eligibility and vesting under the Plan. Assets
maintained in the Signet Star Plan were transferred to the Plan in July,
1997. The Signet Star Plan had assets of $8,613,501, and participant
loans of $184,888, on the date of transfer.
6
<PAGE> 7
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(1), Continued
Effective January 1, 1996, the Plan allowed participants to borrow from
their account. Participants may borrow up to 50% of their vested account
balance; the minimum amount of any loan from the Plan is $1,000, and the
maximum amount is the lesser of $50,000 or 50% of the value of the
participant's account. A participant may request a loan for any reason
and the loan may be repaid over 60 months. For the purchase of a primary
residence, however, the loan may be repaid over 25 years. The loans are
valued at their outstanding balance.
The interest rate charged on the loan and repaid to the participant's
account is determined by the Profit Sharing Plan Finance Committee and
set for the duration of the loan. A participant may have two loans
outstanding. Payment is made through payroll deductions or the loan may
be paid in full by a lump-sum payment. A partial lump-sum repayment is
not permitted. A participant with an outstanding loan balance, who
separates from service with the Company, has the option of repaying the
loan in a lump sum or continuing to pay the monthly loan payment amount
directly to Fidelity.
(2a) Summary of Significant Accounting Policies
(i) The accompanying Statements of Net Assets Available for Plan
Participants and Statements of Changes in Net Assets Available
for Plan Participants present financial information of the Plan
on an accrual basis.
(ii) Investment management fees, including brokerage fees and
commissions on the purchase and sale of securities and other
related portfolio management expenses, are paid from assets of,
and applied against the investment performance of, the respective
investment funds. General expenses of operating and administering
the Plan are paid by the Company but may be charged against
investment fund assets in the future, as determined by the
Company.
(iii) The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the additions and deductions of net assets
reflected during the reporting period. Actual results could
differ from those estimates.
(iv) The fair value of the investment funds is based upon the
respective fund's closing net asset value, except for the W. R.
Berkley Corporation Common Stock Fund, which is described in
footnote 2b. In calculating net asset value, investments are
valued by Fidelity and Fleet based on their market values, but
when market quotations are not readily available, investments are
valued based on fair value as determined in good faith in
accordance with procedures established by the Trustee. Bonds and
other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are
believed to reflect the market value of such securities. The
prices provided by a pricing service might be determined without
regard to bid or last sale prices of each security but take into
account institutional size transactions in similar groups of
securities as well as any developments relating to specific
securities.
(v) Purchases and sales of securities are recorded on a trade date
basis. Realized gains and losses are based on specific
identification method. Interest income is recognized as earned.
Dividends are recorded on the ex-dividend date.
7
<PAGE> 8
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(2a), Continued
(vi) The assets of the Plan are primarily financial instruments, which
are monetary in nature. As a result, interest rates have a more
significant impact on the Plan's performance than the effect of
general levels of inflation. Interest rates do not necessarily
move in the same direction or in the same magnitude as the prices
of goods and services as measured by the consumer price index.
Investments in funds are subject to risk conditions of the
individual fund objectives, stock market, interest rates,
economic conditions, and world affairs.
(2b) Description of Investments
The following description of investments, except for the W.R. Berkley
Corporation Common Stock Fund, has been derived from the respective
investment funds prospectus. For a more complete description of these
investments, refer to the respective fund prospectus.
The Plan consisted of the following eighteen funds in 1999:
Fidelity Retirement Money Market Portfolio
PIMCO Low Duration Fund
PIMCO Total Return Fund
Fidelity Equity - Income Fund
Fidelity Contrafund
Fidelity Magellan(R) Fund
Janus Mercury Fund
Fidelity Diversified International Fund
Fidelity Asset Manager(TM)
Fidelity Government Income Fund
Fidelity Intermediate Bond Fund
Fidelity Puritan(R) Fund
Spartan(R) U.S. Equity Index Fund
Fidelity Growth Company Fund
MAS Value Portfolio
Fidelity Overseas Fund
Janus Worldwide Fund
W.R. Berkley Common Stock Fund
Effective January 1, 2000, six additional funds were added to the plan.
These funds are reflected in the plan at December 31, 1999 due to
employee and employer contributions relating to 1999, but not
contributed to the plan until 2000. When these contributions were made
in 2000, they were allocated based upon employee investment elections
at the date of the transfer. The new fund choices are as follows:
Invesco Small Company Growth Fund
Fidelity Freedom 2000 Fund
Fidelity Freedom 2020 Fund
Fidelity Freedom Income Fund
Fidelity Freedom 2010 Fund
Fidelity Freedom 2030 Fund
The following description of Fidelity fund investments, except for the
W.R. Berkley Corporation Common Stock Fund, has been derived from the
fund prospectus. For a more complete description of these investments,
refer to the respective fund prospectus.
FIDELITY RETIREMENT MONEY MARKET PORTFOLIO. Fidelity Retirement
Money Market Portfolio is a money market fund, which seeks as high
a level of current income as is consistent with the preservation
of capital and liquidity. It invests in high quality, short-term
money market securities of U.S. and foreign issuers. While the
portfolio seeks to maintain a $1.00 share price, there is no
assurance that it will be able to do so. An investment in the
portfolio is not insured or guaranteed by the U.S. government. The
portfolio's yield will fluctuate. The portfolio is a relatively
conservative, low-risk investment. Fidelity Management Research
Company is the investment manager of the portfolio.
8
<PAGE> 9
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(2b), Continued
PIMCO LOW DURATION FUND. PIMCO Low Duration Fund (Administrative
Class) is an income mutual fund. It tries to provide high current
income by investing in all types of bonds, including U.S.
government, corporate, mortgage and foreign. Most investments are
in short and intermediate maturity bonds. The fund maintains an
average portfolio duration of 1 to 3 years (approximately equal to
an average maturity of 2 to 5 years). Share price, yield and
return will vary. The fund is managed by Pacific Investment
Management Company and distributed by PIMCO Advisors Distribution
Company.
PIMCO TOTAL RETURN FUND. PIMCO Total Return Fund (Administrative
Class) is an income mutual fund. It tries to provide high total
return that exceeds general bond market indices by investing in
all types of bonds, including U.S. government, corporate, mortgage
and foreign. While the fund maintains an average portfolio
duration of 3 to 6 years (approximately equal to an average
maturity of 5 to 12 years), investments may also include short and
long maturity bonds. Share price, yield and return will vary. The
fund is managed by Pacific Investment Management Company and
distributed by PIMCO Advisors Distribution Company.
FIDELITY EQUITY - INCOME FUND. Fidelity Equity-Income Fund is a
growth and income fund. It seeks reasonable income with the
potential for capital appreciation. The fund tries to achieve a
yield that exceeds the composite yield of the S&P 500. It also
considers the potential for capital appreciation when selecting
investments. It invests primarily in income-producing equity
securities (common and preferred stocks) but can also invest in
bonds and convertible securities. Dividend amounts will vary. The
fund's share price and return will fluctuate. Fidelity Investments
is the investment manager of the fund.
FIDELITY CONTRAFUND. Fidelity Contrafund is a growth fund. It
seeks long-term capital appreciation by investing mainly in the
securities of companies believed to be out of favor or
undervalued. The fund invests in domestic and foreign common
stocks and stocks and securities convertible into common stock,
but it may purchase other securities that may produce capital
appreciation. Investing in under valued or out of favor stocks can
lead to investments in small companies which are not well known.
The stock of small companies may be subject to more frequent and
greater price changes than other companies. The fund's share price
and return will fluctuate. Fidelity Investments is the investment
manager of the fund.
FIDELITY MAGELLAN(R) FUND. Fidelity Magellan(R) Fund is a growth
fund. It seeks long-term capital appreciation by investing in the
stocks of both well-known and lesser known companies with
potentially above-average growth potential and a correspondingly
higher level of risk. Securities may be of foreign, domestic and
multinational companies. The fund's share price and return will
fluctuate. Fidelity Investments is the investment manager of the
fund.
JANUS MERCURY FUND. Janus Mercury fund is a growth mutual fund. It
tries to increase the value of the buyers investment over the long
term through capital growth by investing primarily in common
stocks of companies of any size, which may include larger
well-established companies and/or smaller emerging growth
companies, both domestic and abroad. Investments in emerging
growth companies may be subject to more abrupt price changes than
investments in larger, well established companies. Foreign
investments involve greater risk and may offer greater potential
returns than U.S. investments. Share price and return will vary.
The fund is managed by Janus and distributed by Janus
Distributors, Inc.
9
<PAGE> 10
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(2b), Continued
FIDELITY DIVERSIFIED INTERNATIONAL FUND. Fidelity Diversified
International Fund is an international fund. It seeks capital
growth by investing primarily in equity securities of companies
located anywhere outside the U.S. that are included in the Morgan
Stanley EAFE (Europe, Australia, Far East) Index. In selecting
investments for the fund, the manager relies on computer-aided
quantitative analysis supported by fundamental research. The fund
seeks to generate more capital growth than that of the EAFE Index.
It is important to remember that foreign investments pose greater
risks and potential rewards than U.S. investments. The risks
include political as well as the risk of currency fluctuations.
Share price and return will fluctuate. Fidelity Investments is the
investment manager of the fund.
FIDELITY ASSET MANAGER(TM). Fidelity Asset Manager(TM) is an asset
allocation fund. It seeks high total return with reduced risk over
the long term by allocating its assets among domestic and foreign
(which involve greater risks) stocks, bonds and short-term and
money market instruments. The fund may gradually shift its assets
among and across these groups, within defined ranges, based on the
current outlook of the various markets. The fund can allocate its
assets within the following investment parameters: 30-70% in
stocks, 20-60% in bonds, and 0-50% in short-term/money market
class. Dividend amounts will vary. Share price, yield and return
will fluctuate. Fidelity Investments is the investment manager of
the fund.
FIDELITY GOVERNMENT INCOME FUND. Fidelity Government Income Fund
is an income fund. It seeks a high level of current income
consistent with preservation of principal. The fund invests
primarily in securities issued by the U.S. government agencies or
instrumentalities. Neither an investment in the fund nor the
market value of government securities is insured or guaranteed by
the U.S. government. The fund limits its investments to those
U.S. government securities and interests in U.S. government
securities whose interest is exempt from state and local income
tax. The fund my shift its maturity in response to anticipated
changes in interest rates. The fund's share price; yield and
return will fluctuate. Fidelity Investments is the investment
manager of the fund.
FIDELITY INTERMEDIATE BOND FUND. Fidelity Intermediate Bond Fund
is an income fund. It seeks a high current income by investing
primarily in investment-grade fixed-income obligations rated Baa
or better by Moody's or BBB or better by Standard & Poor's,
including corporate bonds, mortgage securities, bank obligations
and U.S. government and agency securities. The fund's
dollar-weighted average maturity ranges between 3 and 10 years.
The fund's share price; yield and return will fluctuate. Fidelity
Investments is the investment manager of the fund.
FIDELITY PURITAN(R) FUND. Fidelity Puritan(R) Fund is a growth and
income fund. It seeks a much income as possible, consistent with
preservation of capital, by investing in a broadly diversified
portfolio of domestic and foreign common stocks, preferred stocks
and bonds, including lower-quality high-yield debt securities.
Dividend amounts will vary. The fund's share price and return will
fluctuate.
Fidelity Investments is the investment manager of the fund.
SPARTAN(R) U.S. EQUITY INDEX FUND. Spartan(R) U.S. Equity Index
Fund is a growth and income fund. It seeks investment results that
try to duplicate the composition and total return of the S&P 500.
The fund invests primarily in the 500 companies that make up the
S&P 500 and in other securities that are based on the value of the
Index. The fund's manager focuses on duplicating the performance
and composition of the Index versus a strategy of selecting
attractive stocks. The fund's share price and return will
fluctuate. Fidelity Investments is the investment manager of the
fund.
10
<PAGE> 11
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(2b), Continued
FIDELITY GROWTH COMPANY FUND. Fidelity Growth Company Fund is a
growth fund. It seeks long-term capital appreciation by investing
primarily in common stocks and securities convertible into common
stocks. It may invest in companies of any size with above-average
growth potential though growth is most often sought in smaller,
less well-known companies in emerging areas of the economy. The
stocks of small companies often involve more risk that those of
larger companies. The fund's share price and return will
fluctuate. Fidelity Investments is the investment manager of the
fund.
MAS VALUE PORTFOLIO. MAS Value Portfolio Adviser Class is a
value-oriented growth and income mutual fund. It tries to increase
the value of your investment over the long term by investing
mostly in common stocks of large undervalued companies with
potential for growth in stock price. Investments are spread out
across different kinds of companies and industries. Share price
and return will vary. The portfolio is managed by Miller Anderson
& Sherred, LLP and distributed by MAS Fund Distribution, Inc.
FIDELITY OVERSEAS FUND. Fidelity Overseas Fund is an international
growth fund. It seeks long-term capital growth primarily through
investments in foreign securities. These investments may include
common stock and securities convertible into common stock, as well
as debt instruments. Normally, at least 65% of the fund's total
assets will be invested in securities of issuers from at least
three different countries outside of North America. It is
important to remember that foreign investments pose greater risks
and potential rewards than U.S. investments. The risks include
political and economic uncertainties of foreign countries as well
as the risk of currency fluctuations. The fund's share price and
return will fluctuate. Fidelity Investments is the investment
manager of the fund.
JANUS WORLDWIDE FUND. Janus Worldwide Fund is a growth mutual fund
that invests globally. It tries to increase the value of the
buyers investment over the long term through capital growth and
investing primarily in common stocks of foreign and domestic
companies. The fund has the flexibility to invest on a worldwide
basis, in companies and organizations of any size. The fund
normally invests in issuers from at least five different
countries, including the U.S.; however, the fund may at times
invest in fewer that five countries or even a single country.
Share price and return will vary. The fund is managed by Janus
Capital and distributed by Janus Distributors, Inc.
W. R. BERKLEY CORPORATION COMMON STOCK FUND. The fund is invested
primarily in shares of common stock of W. R. Berkley Corporation
("Common Stock"), but is also invested in a minimal amount of
short-term liquid investments so as to facilitate exchanges into
and out of the fund and participant distribution and withdrawal
requests. The total number of shares of Common Stock available
under the Plan is two million. The Trustee may purchase Common
Stock for this fund either on the open market or from W. R.
Berkley Corporation. However, any purchases from W. R. Berkley
Corporation are limited to shares of Common Stock, which are held
by W. R. Berkley Corporation as treasury stock. Each participant's
proportionate interest in the Common Stock fund will be measured
in units of participation, rather than shares of Common Stock.
These units represent a proportionate interest in all assets of
the fund, which includes Common Stock, short-term investments and
at times receivables for dividends, if any, and stock sold. A net
asset value (NAV) per unit of participation will be determined on
a daily basis. In determining the NAV, the value of the Common
Stock will be based on the 4:00 p.m. closing price of the National
Market System of the National Association of Securities Dealers
Automated Quotation System (NASDAQ) or, if not available, the
latest available price reported by the principal national
securities exchange on which the Common Stock is traded. The NAV
will be adjusted by dividends paid on Common Stock, interest on
short-term investments held in the fund and expenses of the fund.
11
<PAGE> 12
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(2b), Continued
Plan participants have voting, tender and similar rights with
respect to the equivalent shares of Common Stock credited to their
interest in the Common Stock fund. Because of the non-diversified
nature of this fund, investing in this fund involves a greater
element of risk than the other available funds. Dividends are
reinvested in the fund.
INVESCO SMALL COMPANY GROWTH FUND. Invesco Small Company Growth
Fund is a growth fund that seeks to increase the value of your
investment over the long term through capital growth. Typically,
at least 65% of the Fund's assets will be invested in stocks of
companies with capitalizations of up to $1 billion ("small cap").
These stocks may be subject to abrupt or erratic price changes.
The Fund may also invest in foreign securities, which involve
greater risks.
FIDELITY FREEDOM FUNDS are designed for investors who want a
simple approach to investing for retirement by investing in a
collection of other Fidelity mutual funds that provide moderate
asset allocation. The allocation strategy among the underlying
stock, bond, and money market mutual funds contained in each
Freedom Fund with a target retirement date, is based on the number
of years until the fund's target retirement date. The funds with a
target date will gradually adopt a more conservative asset
allocation over time, and therefore their percentages will change
to become more conservative. Descriptions of the funds are as
follows:
FIDELITY FREEDOM INCOME FUND. Fidelity Freedom Income Fund
seeks high current income and secondary capital appreciation.
It is designed for those already in retirement, and emphasizes
bond and money market mutual funds and seeks to maintain a
stable asset allocation from year to year. The fund invests
approximately 20% in Fidelity stock mutual funds,
approximately 40% in Fidelity bond mutual funds, and
approximately 40% in Fidelity money market mutual funds. The
fund's target allocation is the least aggressive of the five
Freedom Funds.
FIDELITY FREEDOM 2000 FUND. Fidelity Freedom 2000 Fund seeks
high total return. It is designed for investors who expect to
retire around the year 2000. The fund invests approximately
38% in Fidelity stock mutual funds, approximately 43% in
Fidelity bond mutual funds, and approximately 19% in Fidelity
money market mutual funds. The fund does not mature in the
year 2000; its allocation strategy becomes increasingly more
conservative as it approaches that year. The fund's target
allocation is less aggressive than Freedom 2030, 2020, and
2010 due to lower exposure to equity funds, but is more
aggressive than Freedom Income.
FIDELITY FREEDOM 2010 FUND. Fidelity Freedom 2010 Fund seeks
high total return. It is designed for investors who expect to
retire around the year 2010. The fund invests approximately
60% in Fidelity stock mutual funds, approximately 36% in
Fidelity bond mutual funds, and approximately 4% in Fidelity
money market mutual funds. The fund does not mature in the
year 2010; its allocation strategy becomes increasingly more
conservative as it approaches that year. The fund's target
allocation is less aggressive than Freedom 2030 and 2020 due
to lower exposure to equity funds, but is more aggressive than
Freedom 2000 and Freedom Income.
FIDELITY FREEDOM 2020 FUND. Fidelity Freedom 2020 Fund seeks
high total return. It is designed for investors who expect to
retire around the year 2020. The fund invests approximately
77% in Fidelity stock mutual funds and approximately 33% in
Fidelity bond mutual. The fund does not mature in the year
2020; its allocation strategy becomes increasingly more
conservative as it approaches that year. The fund's target
allocation is less aggressive than Freedom 2030 due to lower
exposure to equity funds, but is more aggressive than Freedom
2000, 2010, and Freedom Income.
12
<PAGE> 13
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(2b), Continued
FIDELITY FREEDOM 2030 FUND. Fidelity Freedom 2030 Fund seeks high
total return. It is designed for investors who expect to retire
around the year 2030. The fund invests approximately 84% in
Fidelity stock mutual funds, approximately 16% in Fidelity bond
mutual funds, and approximately 4% in Fidelity money market mutual
funds. The fund does not mature in the year 2030; its allocation
strategy becomes increasingly more conservative as it approaches
that year. The fund's target allocation is the most aggressive of
the five Freedom Funds.
PARTICIPANT LOAN FUND. The participant loan fund is comprised of
balances due from participants who have loans outstanding. Loans
are repaid at principal plus interest at the prime rate of
interest in effect, at the issuance of the loan. For 1999, the
rate was 7.75 for the first two quarters of 1999, 8.00% for the
third quarter, and 8.25% for the fourth quarter.
(c) Plan Distributions
Distributions to terminated participants are based upon the
closing price on the date the participant requests the
distribution from Fidelity. Withdrawals to active participants are
based on the date the withdrawals have been approved by the Plan
Administrator and are processed by Fidelity.
(d) Plan Contributions
The Board of Directors of each participating subsidiary approves
contributions to the Plan. The employer's contributions aggregated
$7,764,856 and $8,522,536, respectively, for the years ended
December 31, 1999 and 1998, respectively.
(e) Participants' Accounts
The participant record-keeping services are provided by the
Trustee. Each participant's account is credited with the
participant's contribution, the appropriate amount of the
Company's contributions and an allocation of investment fund
earnings or losses in which the participant has directed his or
her contribution. The benefit to which a participant is entitled
is the benefit that can be provided from the participant's vested
account.
(3) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Upon termination of the Plan, all amounts credited to the participants
become fully vested, and all assets remaining after payments of any
expenses properly chargeable against the Plan will be distributed to the
participants in accordance with the value of each participant's account
on the date of such termination.
13
<PAGE> 14
W.R. Berkley Corporation Profit Sharing Plan
Notes to Financial Statements, Continued
(4) Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated December 12, 1995 that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). In the opinion of the plan administrator, the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC.
(5) Investments
Net change in unrealized appreciation (depreciation) for the years ended
December 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Fidelity Puritan Fund $ (991,768) $ 741,990
Fidelity Magellan Fund 898,320 917,638
Fidelity Contrafund 2,818,724 6,798,964
Fidelity Equity Income Fund (143,065) 230,200
Fidelity Growth Company Fund 2,689,445 513,943
Fidelity Intermediate Bond Fund (325,926) 57,844
Fidelity Government Securities Fund (465,813) 111,841
Fidelity Overseas Fund 1,577,106 451,204
Fidelity Asset Manager Fund 145,295 (92,617)
Fidelity Diversified International Fund 251,632 22,356
Spartan US Equity Index Fund 3,263,671 3,347,993
Janus Worldwide Fund 2,630,291 512,381
PIMCO Total Return Administrative Fund (60,843) (9,779)
Janus Mercury Fund 4,789,598 416,966
MAS Value Portfolio (63,673) (161,196)
PIMCO Low Duration Administrative Fund (8,384) 2,106
W.R. Berkley Corporation Common Stock Fund (3,244,589) (1,914,834)
---------- ----------
Net appreciation (depreciation) in fair value of investments $13,760,021 $11,947,000
========== ==========
</TABLE>
14
<PAGE> 15
W.R. Berkley Corporation Profit Sharing Plan
Schedule H, Line 4i - Schedule of Assets Held
Investments as of December 31, 1999 and 1998 consisted of the following:
<TABLE>
<CAPTION>
Fair
Units December 31, 1999 Cost Value
-------- ----------------- ---- -----
<S> <C> <C> <C>
961,969 Fidelity Puritan Fund $18,666,974 $18,306,270
64,261 Fidelity Magellan Fund 7,174,857 8,779,984
784,264 Fidelity Contrafund 39,563,619 47,071,562
89,360 Fidelity Equity Income Fund 4,781,195 4,778,992
93,163 Fidelity Growth Company Fund 5,093,364 7,853,653
622,621 Fidelity Intermediate Bond Fund 6,268,855 6,076,782
600,015 Fidelity Government Securities Fund 5,826,725 5,610,149
129,938 Fidelity Overseas Fund 4,748,375 6,238,303
148,631 Fidelity Asset Manager Fund 2,660,505 2,731,845
33,279 Fidelity Diversified International Fund 615,130 852,613
17,349,011 Fidelity Retirement Money Market Portfolio 17,349,011 17,349,011
392,219 Spartan US Equity Index Fund 14,281,965 20,430,677
97,686 Janus Worldwide Fund 4,641,336 7,466,152
94,926 PIMCO Total Return Administrative Fund 999,058 939,768
347,459 Janus Mercury Fund 10,533,614 15,222,190
36,113 MAS Value Portfolio 573,811 437,331
28,039 PIMCO Low Duration Administrative Fund 282,560 275,908
827,952 W.R. Berkley Common Stock Fund 7,536,545 5,431,366
--------- ---------
Subtotal 151,597,531 175,852,556
N/A Participant Loan Fund 3,889,281 3,889,281
--------- ---------
Total $156,091,246 $179,741,837
=========== ===========
</TABLE>
15
<PAGE> 16
W.R. Berkley Corporation Profit Sharing Plan
Schedule H, Line 4i - Schedule of Assets Held
<TABLE>
<CAPTION>
Fair
Units December 31, 1998 Cost Value
-------- ----------------- ---- -----
<S> <C> <C> <C>
970,810 Fidelity Puritan Fund $ 18,770,389 $ 19,484,164
43,169 Fidelity Magellan Fund 4,289,273 5,215,702
715,282 Fidelity Contrafund 34,170,521 40,620,866
84,543 Fidelity Equity Income Fund 4,404,044 4,696,360
62,387 Fidelity Growth Company Fund 2,896,857 3,183,009
622,561 Fidelity Intermediate Bond Fund 6,280,533 6,393,705
576,040 Fidelity Government Securities Fund 5,624,133 5,841,045
132,268 Fidelity Overseas Fund 4,726,926 4,758,994
122,277 Fidelity Asset Manager Fund 2,206,586 2,126,402
27,341 Fidelity Diversified International Fund 471,648 484,475
15,333,361 Fidelity Retirement Money Market Portfolio 15,333,361 15,333,361
397,346 Spartan US Equity Index Fund 13,609,431 17,467,325
71,530 Janus Worldwide Fund 2,991,915 3,387,643
77,424 PIMCO Total Return Administrative Fund 828,327 816,047
123,860 Janus Mercury Fund 2,614,378 2,986,276
51,595 MAS Value Portfolio 923,990 744,514
34,308 PIMCO Low Duration Administrative Fund 349,120 348,914
857,419 W.R. Berkley Common Stock Fund 8,518,569 8,934,307
------------ ------------
Subtotal 129,010,001 142,823,109
N/A Participant Loan Fund 3,723,453 3,723,453
------------ ------------
Total $132,733,454 $146,546,562
=========== ===========
</TABLE>
16
<PAGE> 17
CONSENT OF INDEPENDENT ACCOUNTANTS
Board of Directors
W. R. Berkley Corporation:
We consent to incorporation by reference in Registration Statement No. 33-88640
on Form S-8 of W. R. Berkley Corporation of our report dated May 19, 2000,
relating to the statements of net assets available for plan participants of the
W. R. Berkley Corporation Profit Sharing Plan (the Plan) as of December 31, 1999
and 1998, and the related statements of changes in net assets available for plan
participants for the years then ended and related supplemental schedule which
report appears in the December 31, 1999 annual report on Form 11-K of the Plan.
New York, New York
June 23, 2000
17
<PAGE> 18
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Finance
Committee has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
W. R. BERKLEY CORPORATION
By WILLIAM R. BERKLEY
William R. Berkley
Chairman of the Board and
Chief Executive Officer
June 23, 2000
18
