<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission file number: 1-8247
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive
office:
Schuller Corporation
717 17th Street
Denver, Colorado 80202
<PAGE> 2
Pursuant to the requirements of the Securities and Exchange Act of
1934, the trustees (or other persons who administer the Plan) have duly caused
this annual report to be signed by the undersigned hereunto duly authorized.
June 20, 1996 SCHULLER INTERNATIONAL EMPLOYEES
THRIFT PLAN
By: /s/ Ann J. Henley
-----------------------------
Ann J. Henley
Director, Benefits
2
<PAGE> 3
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
_____________________
REPORT ON AUDIT OF FINANCIAL STATEMENTS
as of December 31, 1995 and 1994 and for
the Year ended December 31, 1995
<PAGE> 4
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
_____________________
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits with
Fund Information at December 31, 1995 and 1994 3 - 6
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year ended
December 31, 1995 7 - 8
Notes to Financial Statements 9 - 19
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes
(Item 27a Form 5500) 20
Schedule of Reportable Transactions
(Item 27d Form 5500) 21
</TABLE>
-1-
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Compensation Committee
of the Board of Directors of Schuller Corporation:
We have audited the accompanying statements of net assets available for
benefits of the Schuller International Employees Thrift Plan as of December 31,
1995 and 1994 and the 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 Schuller
International Employees Thrift Plan at December 31, 1995 and 1994, and the
changes in 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 supplemental schedules are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are 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 Fund Information
in the statements of net assets available for benefits and the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund.
The Supplemental Schedules and Fund Information have been subjected to the
auditing procedures applied in the 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.
/s/ COOPERS & LYBRAND L.L.P.
- ------------------------------------
COOPERS & LYBRAND L.L.P.
Denver, Colorado
June 20, 1996
-2-
<PAGE> 6
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1995 and 1994
<TABLE>
<CAPTION>
Retirement
Government
Money Market Income Asset Disciplined
1995 Portfolio Fund Manager Equity Fund
---- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,066,822)
Common stock pool of Riverwood
International at market value
(cost $741,900)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $6,535,040) $6,535,040
Asset Manager (cost $28,179,246) $30,692,009
Disciplined Equity (cost $23,527,426) $25,983,839
Value Fund (cost $12,612,053)
Magellan Fund (cost $36,078,039)
OTC Portfolio (cost $7,776,839)
International Growth and
Income Fund (cost $7,334,637)
Investment contracts, at contract value $66,600,630
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 7) 13,562,186
Due from associated funds 7,188 44,451 37,881 25,805
Contributions receivable:
Plan members 9,868 68,618 64,182 47,397
Company 100,557 609,989 624,553 457,198
Accrued income receivable
(Note 2)
---------- ----------- ----------- -----------
Total assets 6,652,653 80,885,874 31,418,625 26,514,239
LIABILITIES
Payable to associated funds
---------- ----------- ----------- -----------
Net assets available for benefits $6,652,653 $80,885,874 $31,418,625 $26,514,239
========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
International
Growth and
Value Magellan OTC Income
Fund Fund Portfolio Fund
------------ --------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,066,822)
Common stock pool of Riverwood
International at market value
(cost $741,900)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $6,535,040)
Asset Manager (cost $28,179,246)
Disciplined Equity (cost $23,527,426)
Value Fund (cost $12,612,053) $14,496,921
Magellan Fund (cost $36,078,039) $43,284,628
OTC Portfolio (cost $7,776,839) $9,131,710
International Growth and
Income Fund (cost $7,334,637) $7,501,926
Investment contracts, at contract value
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 7)
Due from associated funds 20,437 63,379 12,399 11,937
Contributions receivable:
Plan members 37,079 103,943 26,042 21,448
Company 364,184 1,070,629 247,576 259,797
Accrued income receivable
(Note 2)
----------- ----------- ---------- ----------
Total assets 14,918,621 44,522,579 9,417,727 7,795,108
LIABILITIES
Payable to associated funds
----------- ----------- ---------- -----------
Net assets available for benefits $14,918,621 $44,522,579 $9,417,727 $7,795,108
=========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 7
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1995 and 1994
<TABLE>
<CAPTION>
Schuller
RVW Common
Stock Stock Loan Combined
1995 (Continued) Pool Fund Account Total
---- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,066,822) $105,457 $ 105,457
Common stock pool of Riverwood
International at market value
(cost $741,900) $1,013,760 1,013,760
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $6,535,040) 6,535,040
Asset Manager (cost $28,179,246) 30,692,009
Disciplined Equity (cost $23,527,426) 25,983,839
Value Fund (cost $12,612,053) 14,496,921
Magellan Fund (cost $36,078,039) 43,284,628
OTC Portfolio (cost $7,776,839) 9,131,710
International Growth and
Income Fund (cost $7,334,637) 7,501,926
Investment contracts, at contract value 66,600,630
Loans to Plan members, at cost
(approximates market) $6,959,901 6,959,901
Cash and equivalents (Note 7) 13,562,186
Due from associated funds 223,477
Contributions receivable:
Plan members 378,577
Company 3,734,483
Accrued income receivable
(Note 2) 48,214 48,214
-------- --------- --------- ------------
Total assets 1,013,760 105,457 7,008,115 230,252,758
LIABILITIES
Payable to associated funds 223,477 223,477
---------- -------- ----------- ------------
Net assets available for benefits $1,013,760 $105,457 $6,784,638 $230,029,281
========== ======== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 8
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1995 and 1994
<TABLE>
<CAPTION>
Retirement
Government
Money Market Income Asset Disciplined
1994 Portfolio Fund Manager Equity Fund
---- ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,236,820)
Common stock pool of Riverwood
International at market value
(cost $847,220)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $4,644,246) $4,664,246
Asset Manager (cost $29,462,053) $28,074,320
Disciplined Equity (cost $19,083,431)
Value Fund (cost $9,936,094) $19,063,936
Magellan Fund (cost $28,153,261)
OTC Portfolio (cost $4,012,222)
International Growth and
Income Fund (cost $7,062,817)
Investment contracts, at contract value $77,149,844
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 7) 3,732,366
Due from associated funds 5,736 36,067 35,791 21,758
Contributions receivable:
Plan members 11,656 81,062 86,650 51,791
Company 43,183 679,456 685,353 434,438
Accrued income receivable
(Note 2)
---------- ----------- ----------- -----------
Total assets 4,724,821 81,678,795 28,882,114 19,571,923
LIABILITIES
Payable to associated funds
---------- ----------- ----------- -----------
Net assets available for benefits $4,724,821 $81,678,795 $28,882,114 $19,571,923
========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
International
Growth and
Value Magellan OTC Income
Fund Fund Portfolio Fund
---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,236,820)
Common stock pool of Riverwood
International at market value
(cost $847,220)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $4,644,246)
Asset Manager (cost $29,462,053)
Disciplined Equity (cost $19,083,431)
Value Fund (cost $9,936,094) $ 9,629,671
Magellan Fund (cost $28,153,261) $27,941,732
OTC Portfolio (cost $4,012,222) $4,091,605
International Growth and
Income Fund (cost $7,062,817) $6,627,226
Investment contracts, at contract value
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 7)
Due from associated funds 15,062 47,358 6,745 13,808
Contributions receivable:
Plan members 38,998 110,374 21,022 36,740
Company 317,815 971,622 165,636 309,536
Accrued income receivable
(Note 2)
----------- ----------- ---------- -----------
Total assets 10,001,546 29,071,086 4,285,008 6,987,310
LIABILITIES
Payable to associated funds
----------- ----------- ---------- -----------
Net assets available for benefits $10,001,546 $29,071,086 $4,285,008 $6,987,310
=========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 9
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1995 and 1994
<TABLE>
<CAPTION>
Schuller
RVW Common
Stock Stock Loan Combined
1994 (Continued) Pool Fund Account Total
---- -------- --------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,236,820) $84,026 $ 84,026
Common stock pool of Riverwood
International at market value
(cost $847,220) $949,988 949,988
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $4,644,246) 4,664,246
Asset Manager (cost $29,462,053) 28,074,320
Disciplined Equity (cost $19,083,431) 19,063,936
Value Fund (cost $9,936,094) 9,629,671
Magellan Fund (cost $28,153,261) 27,941,732
OTC Portfolio (cost $4,012,222) 4,091,605
International Growth and
Income Fund (cost $7,062,817) 6,627,226
Investment contracts, at contract value 77,149,844
Loans to Plan members, at cost
(approximates market) $5,749,075 5,749,075
Cash and equivalents (Note 7) 3,732,366
Due from associated funds 182,325
Contributions receivable:
Plan members 438,293
Company 3,607,039
Accrued income receivable
(Note 2) 36,468 36,468
-------- ------- ----------- ------------
Total assets 949,988 84,026 5,785,543 192,022,160
LIABILITIES
Payable to associated funds 182,325 182,325
-------- ------- ---------- ------------
Net assets available for benefits $949,988 $84,026 $5,603,218 $191,839,835
======== ======= ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE> 10
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Retirement
Government
Money Market Income Asset Disciplined
1995 Portfolio Fund Manager Equity Fund
---- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Interest income $ 4,771,902
Dividend income $ 339,508 $ 895,098 $ 2,838,605
Net appreciation in fair value
of investments (Note 2) 3,956,428 2,939,517
----------- ------------ ----------- -----------
Total investment income 339,508 4,771,902 4,851,526 5,778,122
----------- ------------ ----------- -----------
Contributions (Note 8):
By Plan members 348,112 2,082,387 2,010,176 1,407,552
By the Company 139,520 1,205,403 1,240,690 863,717
----------- ------------ ----------- -----------
487,632 3,287,790 3,250,866 2,271,269
----------- ------------ ----------- -----------
Transfers into fund from
associated funds 4,584,241 9,298,561 1,683,064 3,081,393
----------- ------------ ----------- -----------
Transfers out of fund to
associated funds (2,458,439) (10,986,955) (5,854,848) (2,881,157)
----------- ------------ ----------- -----------
Withdrawals and forfeitures
(Note 9) (1,022,032) (7,145,103) (1,387,366) (1,304,868)
----------- ------------ ----------- -----------
Administrative expenses (3,078) (19,116) (6,731) (2,443)
----------- ------------ ----------- -----------
Net increase (decrease) 1,927,832 (792,921) 2,536,511 6,942,316
Net assets available for benefits:
Beginning of year 4,724,821 81,678,795 28,882,114 19,571,923
----------- ------------ ----------- -----------
End of year $ 6,652,653 $ 80,885,874 $31,418,625 $26,514,239
=========== ============ =========== ===========
International
Growth and
Value Magellan OTC Income
Fund Fund Portfolio Fund
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Interest income
Dividend income $ 611,534 $ 2,461,151 $ 503,616 $ 243,100
Net appreciation in fair value
of investments (Note 2) 2,409,179 8,400,325 1,425,920 554,106
----------- ------------ ----------- -----------
Total investment income 3,020,713 10,861,476 1,929,536 797,206
----------- ------------ ----------- -----------
Contributions (Note 8):
By Plan members 1,085,110 3,101,283 621,126 753,206
By the Company 679,923 2,025,174 432,074 532,147
----------- ------------ ----------- -----------
1,765,033 5,126,457 1,053,200 1,285,353
----------- ------------ ----------- -----------
Transfers into fund from
associated funds 4,320,616 8,970,600 4,069,219 1,362,530
----------- ------------ ----------- -----------
Transfers out of fund to
associated funds (3,812,661) (8,050,245) (1,768,741) (2,298,735)
----------- ------------ ----------- -----------
Withdrawals and forfeitures
(Note 9) (375,378) (1,455,232) (150,388) (338,552)
----------- ------------ ----------- -----------
Administrative expenses (1,248) (1,563) (107) (4)
----------- ------------ ----------- -----------
Net increase (decrease) 4,917,075 15,451,493 5,132,719 807,798
Net assets available for benefits:
Beginning of year 10,001,546 29,071,086 4,285,008 6,987,310
----------- ------------ ----------- -----------
End of year $14,918,621 $ 44,522,579 $ 9,417,727 $ 7,795,108
=========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE> 11
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Schuller
RVW Common
Stock Stock Loan Combined
1995 (Continued) Pool Fund Account Total
---- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Investment Income:
Interest income $ 494,591 $ 5,266,493
Dividend income 7,892,612
Net appreciation in fair value
of investments (Note 2) $ 232,015 $ 37,421 19,954,911
---------- -------- ---------- ------------
Total investment income 232,015 37,421 494,591 33,114,016
---------- -------- ---------- ------------
Contributions (Note 8):
By Plan members 11,408,952
By the Company 7,118,648
---------- -------- ---------- ------------
18,527,600
---------- -------- ---------- ------------
Transfers into fund from
associated funds 3,709,594 41,079,818
---------- -------- ---------- ------------
Transfers out of fund to
associated funds (149,415) (688) (2,817,934) (41,079,818)
---------- -------- ---------- ------------
Withdrawals and forfeitures
(Note 9) (18,828) (15,302) (204,831) (13,417,880)
---------- -------- ---------- ------------
Administrative expenses (34,290)
---------- -------- ---------- ------------
Net increase (decrease) 63,772 21,431 1,181,420 38,189,446
Net assets available for benefits:
Beginning of year 949,988 84,026 5,603,218 191,839,835
---------- -------- ---------- ------------
End of year $1,013,760 $105,457 $6,784,638 $230,029,281
========== ======== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE> 12
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Plan Description:
-----------------
The Schuller International Employees Thrift Plan (the "Plan") is
sponsored by Schuller Corporation, formerly Manville Corporation, and
offered through Schuller International (the "Company"), a wholly owned
subsidiary of Schuller Corporation. The Plan provides eligible employees
a convenient means for regular and systematic savings with several
investment options. Plan participants have the option of directing the
investment of their contributions and related Company contributions into
any one or a combination of separate funds. Fidelity Institutional
Retirement Services Company ("Fidelity"), the trustee of the Plan's
assets, administers, manages and reports the Plan's investment
transactions. The Plan offers the following Fidelity funds as investment
options: the Retirement Government Money Market Portfolio, Asset Manager,
Disciplined Equity Fund, Value Fund, Magellan Fund, OTC Portfolio, and
the International Growth and Income Fund. In addition, the Income Fund
holds investment contracts with various insurance and investment
companies, including contracts with Mutual Benefit Life Insurance Company
("Mutual Benefit") and Confederation Life Insurance Company
("Confederation Life") (see Notes 4 and 5). Summarized information
regarding eligibility, vesting, contributions and benefits is provided in
the Summary Plan Document.
In addition to the funds described above, some participants at December
31, 1995 had investments in the Schuller Common Stock Fund, which holds
common stock of Schuller Corporation, and the RVW Stock Pool, which
contains shares of stock of Riverwood International Corporation
("Riverwood"). Riverwood was an affiliate of the Company until a private
group of investors acquired all of its outstanding common stock during
March, 1996. At that time, the Plan's investments in the RVW Stock Pool
were likewise disposed of. Although the Schuller Common Stock Fund is
not currently offered as an investment option, the Plan allows additional
shares to be purchased with dividends paid on the common stock.
The loan account holds loans made to eligible participants out of their
vested account balances in the aforementioned funds except for the RVW
Stock Pool, Schuller Common Stock Fund, and investment contracts with
Mutual Benefit Life and Confederation Life. Principal and interest
payments are reinvested in the participants investment funds in accordance
with the participant's investment election in effect at the time the
payments are made.
At December 31, 1995, there were a total of 4,699 participants in the
Plan. They participated in one or more of the funds as follows: 630 in
the Retirement Government Money Market Portfolio, 1,882 in the Asset
Manager, 1,909 in the Disciplined Equity Fund, 1,281 in the Value Fund,
2,490 in the Magellan Fund, 927 in the OTC Portfolio, 1,092 in the
International Growth and Income Fund, 5,918 in the
-9-
<PAGE> 13
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Plan Description, continued:
-----------------
Income Fund, 169 in the RVW Stock Pool, and 233 in the Schuller Common
Stock Fund. Additionally, 1,455 participants had loans outstanding
through the loan account at December 31, 1995.
2. Summary of Significant Accounting Policies:
--------------------------------------------
Investments in the funds are stated at current values based upon the
following:
<TABLE>
<S> <C>
Retirement Government original cost plus accrued interest.
Money Market Fund
Asset Manager Fund quotations obtained directly from mutual fund company.
Disciplined Equity Fund quotations obtained directly from mutual fund company.
Value Fund quotations obtained directly from mutual fund company.
Magellan Fund quotations obtained directly from mutual fund company.
OTC Portfolio quotations obtained directly from mutual fund company.
International Growth quotations obtained directly from mutual fund company.
and Income Fund
Income Fund contract value (original cost plus accrued interest and
contributions less withdrawals.)
RVW Stock Pool stock quotations obtained from New York Stock Exchange.
Schuller Common stock quotations obtained from New York Stock
Stock Fund Exchange.
</TABLE>
Transactions in the various funds are accounted for using the trade date.
Realized gains or losses from such transactions are determined on the
basis of average cost. Accrued income receivable on investments consists
of dividends receivable based on the ex-dividend date and interest income
receivable at December 31, 1995 and 1994.
-10-
<PAGE> 14
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
2. Summary of Significant Accounting Policies, continued:
--------------------------------------------
Within the Income Fund, the Plan has entered into investment contracts
with various insurance and investment companies. The contracts are
credited with earnings on the underlying investments and charged for Plan
withdrawals and administrative expenses charged by these companies. The
contracts are included in the financial statements at contract value, as
reported by the insurance and investment companies. Contract value
represents contributions under the contracts, plus earnings, less Plan
withdrawals and administrative expenses. The average yields presented on
the contracts approximate the contract rate. No valuation reserves were
required to adjust contract amounts, as the contract value of the
reported investment contracts approximates fair value.
Investment contracts held in the Income Fund contain provisions that
could reduce the earnings on the investment below the guaranteed rate if
there is an early discontinuance of the contract.
The Plan is exposed to credit risk in the event of nonperformance by the
counterparties to financial instruments but has no off-balance-sheet
credit risk of accounting loss. The Plan anticipates, however, that
counterparties will be able to fully satisfy their obligations to the
Plan. The Plan does not require collateral or other security to support
investments with credit risk.
The Plan presents in the statement of changes in net assets available for
benefits with fund information the net appreciation in the fair value of
its investments which consists of the realized gains and the unrealized
appreciation on those investments, including derivative financial
instruments (see Note 6).
The preparation of the Plan's consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in these financial statements, including disclosures of
contingent liabilities. Actual results may differ from those estimates.
The Plan has reclassified the presentation of certain prior year
information to conform with the current presentation format.
-11-
<PAGE> 15
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments:
------------
The number of units and carrying value per unit at December 31, were as
follows:
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
Retirement Government Money Market
----------------------------------
Units 6,535,040 4,664,246
Market value per unit $1.00 $1.00
Asset Manager*
--------------
Units 1,936,404 2,029,958
Market value per unit $15.85 $13.83
Disciplined Equity Fund*
------------------------
Units 1,258,907 1,062,650
Market value per unit $20.65 $17.94
Value Fund*
-----------
Units 292,041 235,964
Market value per unit $49.64 $40.81
Magellan Fund*
--------------
Units 503,427 418,289
Market value per unit $85.98 $66.80
OTC Portfolio
-------------
Units 301,078 175,832
Market value per unit $30.33 $23.27
International Growth and Income Fund
------------------------------------
Units 417,935 400,921
Market value per unit $17.95 $16.53
Income Fund
-----------
Security Life of Denver Contract*:
Units 18,350,306 17,402,132
Contract value per unit $1.00 $1.00
Average yield 4.78% 5.28%
</TABLE>
-12-
<PAGE> 16
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
<TABLE>
<CAPTION>
3. Investments, continued: 1995 1994
----------- ------------ --------
<S> <C> <C>
Mutual Benefit Life Insurance Contract*:
Units 14,482,275 14,990,905
Contract value per unit $1.00 $1.00
Average yield (Note 5) 3.55% 3.50%
Morgan Guaranty ABS:
Units 8,777,330 2,279,600
Contract value per unit $1.00 $1.00
Average yield 7.07% 8.38%
J.P. Morgan Securities Insurance Contract:
Units 8,241,212 6,110,207
Contract value per unit $1.00 $1.00
Average yield 8.90% 9.00%
Confederation Life Insurance Contract:
Units 3,681,527 3,733,308
Contract value per unit $1.00 $1.00
Average yield (Note 4) 0.00% 0.00%
Peoples Security Life ABS:
Units 2,973,949
Contract value per unit $1.00
Average yield 7.72%
Sun Life Insurance of America Contract:
Units 2,706,213 2,505,290
Contract value per unit $1.00 $1.00
Average yield 8.02% 8.02%
Protective Life Insurance Contract:
Units 2,705,184 2,505,264
Contract value per unit $1.00 $1.00
Average yield 7.98% 7.98%
Life of Virginia Contract:
Units 2,357,664 2,357,665
Contract value per unit $1.00 $1.00
Average yield 8.52% 8.52%
</TABLE>
-13-
<PAGE> 17
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
<TABLE>
<CAPTION>
3. Investments, continued: 1995 1994
----------- -------------- -------------
<S> <C> <C>
Bankers Trust Investment Contracts:
Units 2,324,969 7,081,064
Contract value per unit $1.00 $ 1.00
Average yield 9.13% 8.74%
Great West Life Assurance Contracts:
Units 7,005,218
Contract value per unit $ 1.00
Average yield 10.50%
Commonwealth Life Insurance Contracts:
Units 5,924,169
Contract value per unit $ 1.00
Average yield 7.27%
New York Life Insurance Contracts:
Units 2,646,826
Contract value per unit $ 1.00
Average yield 9.18%
CNA Insurance Company Contract:
Units 2,608,196
Contract value per unit $ 1.00
Average yield 9.51%
RVW Stock Pool
--------------
Units 73,546 84,722
Market value per unit $13.79 $11.21
Schuller Common Stock Fund
--------------------------
Units 6,336 7,332
Market value per unit $16.65 $11.46
Loan Account
------------
Remaining principal balance, at cost $6,959,901 $5,749,075
(approximates market)
</TABLE>
* Represents at least 5% of net assets available for benefits at December 31,
1995.
-14-
<PAGE> 18
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments, continued:
------------
Effective March 1, 1996 the cash and equivalents portion of the Income
Fund was transferred to the Fidelity Short-Term Bond Portfolio, a new
investment option. Existing contracts at December 31, 1995 will remain as
such until maturity, at which time the cash will be invested in this bond
portfolio.
4. Confederation Life Insurance Company:
-------------------------------------
During 1994, Canadian and U.S. regulators assumed control of
Confederation Life, a significant issuer of guaranteed investment
contracts, or GICS, after Confederation Life failed to obtain capital
support from a consortium of Canadian and U.S. insurers. On August 12,
1994, Michigan regulators obtained a court order in Ingram County Circuit
Court placing the U.S. branch of Confederation Life in rehabilitation.
As of December 31, 1995, the Income Fund held a $3.7 million investment
contract with Confederation Life. This contract represented 4.6% of the
net assets of the Income Fund at December 31, 1995. The Plan has
segregated the assets of the contract, and during this rehabilitation
period participants will continue to have access to the remainder of the
Income Fund. Presently, adjustment, if any, to reduce the carrying value
of the contract to net realizable value would have no material effect on
the financial statements.
On February 20, 1995, Confederation Life issued an administrative update
which outlined the following procedures for permitting certain hardship
withdrawals: withdrawals are limited to 10% of the participant's account
balance per year for normal retirement and disability, and no withdrawals
are processed for early retirement; entire account balances will be paid
to the participant's beneficiaries in the event of a participant's death;
hardship withdrawals will be permitted for situations that fall under the
IRS and Plan definitions of hardship withdrawals; and no withdrawals are
processed for employee terminations, loans, transfers, etc. The Plan
received 1.5% in 1994 of the contract balance in order to honor the above
types of withdrawals. Beginning in 1995, all further withdrawal requests
are processed and settled on an individual participant basis.
5. Mutual Benefit Life Insurance Company:
--------------------------------------
During 1991, the Plan notified Mutual Benefit of its intention to
discontinue their group annuity contract held by the Income Fund. On
June 28, 1991, the Plan received $19,578,795 representing 50% of the May
31, 1991 adjusted contract value (after normal withdrawals plus a
favorable market interest rate adjustment) from Mutual Benefit.
Additional withdrawals totaling $4,501,583 were paid by Mutual Benefit
shortly thereafter.
-15-
<PAGE> 19
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Mutual Benefit Life Insurance Company, continued:
--------------------------------------
Mutual Benefit requested, and on July 16, 1991, was placed under,
rehabilitory conservatorship with the state of New Jersey by court order.
Currently, there is no plan to liquidate Mutual Benefit. Mutual Benefit
advised the Plan that the remaining contract discontinuance payments were
suspended pending action on a plan of rehabilitation.
In the interim, payments have been made to participants or beneficiaries
in the case of death, certain hardships and to retirees aged 65 and above
who elected to leave the Plan.
The Plan of Rehabilitation for Mutual Benefit was approved on August 12,
1993, and an order confirming the Plan of Rehabilitation was signed on
November 10, 1993. On April 29, 1994, under provisions of the order,
Mutual Benefit Life became insolvent and its assets and liabilities were
assumed by a successor company, MBL Life Assurance Corporation
("MBLLAC").
The Plan of Rehabilitation offered Plan participants the option of opting
out of the existing contract or accepting participation in a new,
restructured contract to be issued by MBLLAC. Effective June 1994, those
electing to opt out of the contract received 55% of their account
balances with interest credited at 3.5% annually from July 16, 1991 to
payout. Those electing to opt in will be credited with interest at the
contract rate (11.05%) through December 31, 1991, at 4.0% for 1992, at
3.5% for 1993, at 3.5% for 1994, at 3.55% for 1995, and at 5.25% for
1996. Interest to be paid thereafter has not been determined, but will
be no less than zero. The contract value of Mutual Benefit reflects
interest credited at these rates. Payment of principal and interest has
been guaranteed by a consortium of major insurance companies.
Participants who elected on April 4, 1994 to opt out of the contract
received $863,703. Those who elected to accept participation in the
restructured contract were credited with balances totaling approximately
$15,228,000.
During the rehabilitation period, which is expected to extend through
December 31, 1999, withdrawals will remain limited. However, payments
will continue to be made in cases of death and hardship, and out-of-fund
payments will be made to retirees aged 59 1/2 or more who have elected to
leave the Plan. A cashout resulting in a penalty is also available, the
penalty percentage of which is determined on a quarterly basis. At
December 31, 1995, the penalty percentage was 18%.
The Plan of Rehabilitation anticipates that balances in the restructured
contracts will be paid out in five annual installments beginning in the
year 2000. However, should there be insufficient liquidity or assets,
scheduled installment payments may be deferred for up to seven years.
-16-
<PAGE> 20
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Derivative Financial Instruments:
---------------------------------
The Plan has only limited involvement with derivative financial
instruments and does not use them for trading purposes.
The fair value of derivatives utilized by the funds is determined as the
amounts the Plan would receive or pay to terminate the contracts at the
reporting date, taking into account the current unrealized gains or
losses on open contracts. Market or dealer quotes are available for many
derivatives; otherwise, pricing or valuation models are applied to
current market information to estimate fair value.
Investments in the Asset Manager Fund, the Magellan Fund and the
International Growth and Income Fund occasionally include derivative
financial instruments such as futures, forward, swap or option contracts.
During 1995 these derivative investments comprise an immaterial portion
of the total net assets available for benefits.
The primary objectives of investing in domestic equity futures are to
remain fully invested and maintain liquidity ("long positions"), and to
hedge against equity price declines ("short positions"). Futures
contracts are settled on a daily basis using funds set aside in separate
accounts. Foreign exchange forward contracts are entered into to manage
foreign currency exchange exposures and to hedge the funds' investments
against currency fluctuations.
7. Cash and Equivalents:
---------------------
The cash and equivalents of the Income Fund were invested primarily in
short-term U.S. Government Securities.
8. Contributions, Eligibility and Vesting:
---------------------------------------
Pre-tax Contributions - Eligible employees may contribute to the Plan
through a reduction in salary on a pre-tax basis (a "401(k)" Plan ) from
1% to 9% of salary (defined as regular fixed compensation plus
commissions, bonuses, overtime pay and profit sharing distributions) or,
for highly compensated employees, from 1% to 8% of salary on a pre-tax
basis.
After-tax Contributions - Employees may elect to contribute 1% to 7% (in
-----------------------
increments of 1%) of salary on an after-tax basis regardless of the
percentage of pre-tax contributions.
Company Contributions - The Company contribution is based on a 50% fixed
---------------------
match plus up to 50% variable match based on the operating performance of
the Company, on the first six percent of pre-tax Employee contributions.
Company contributions of
-17-
<PAGE> 21
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
8. Contributions, Eligibility and Vesting, continued:
--------------------------------------
$3,600,285 related to the 50% variable match were accrued for at
December 31, 1995. After-tax contributions and rollover contributions are
not matched by the Company. The Company's annual contribution made on
behalf of any one employee is subject to certain maximums as specified in
the Plan and regulated by the Internal Revenue Service.
Eligibility - Full-time permanent salaried employees and non-union hourly
-----------
employees at participating locations are eligible to become Plan
participants on the first day of employment or re-employment. If the
employee is a part-time or temporary, such employee becomes eligible
to participate after completing at least one year and 1,000 hours of
service. The Plan also allows non-union hourly employees at
participating locations to contribute to the Plan.
9. Withdrawals and Forfeitures and Loans:
--------------------------------------
Rollover contributions which have been in the Plan at least 24 months and
all vested amounts (except those relating to participant pre-tax
contributions and earnings thereon) may be withdrawn by the participant
at any time. Employee pre-tax contributions and earnings thereon may not
be withdrawn until the participant attains age 59 1/2, or leaves the
Company, or furnishes satisfactory proof of financial hardship.
If a participant's employment is terminated for reasons other than death,
disability or retirement, the participant forfeits any unvested Company
contributions and applicable earnings. Participants with vested balances
of at least $3,500, can elect to defer the distribution of funds to
December 31 of the year they attain age 65.
Forfeitures serve to reduce future contributions of the Company. A
participant who is terminated and subsequently rehired by the Company
within five years has the option of repaying to the Plan, within two
years of the re-employment date, cash in one lump sum equal to the full
amount received from the Plan at termination. If such repayment is made,
the Company will restore to the participant's account the amounts
previously forfeited.
A participant who retires or becomes disabled, and has a balance of at
least $3,500, can elect to defer the distribution of funds credited to
the participant in the Plan until April of the year following the year in
which the participant attains age 70 1/2 or, in the event of death, the
beneficiary can elect to defer distribution for a period of 60 months
from date of death.
Withdrawal of Company contributions is subject to suspension of Company
contributions for the greater of three months or the time period during
which the
-18-
<PAGE> 22
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
9. Withdrawals and Forfeitures and Loans, continued:
-------------------------------------
employee does not make contributions. Hardship withdrawals are subject
to one year suspension of employee contributions. Suspension does not
occur if the withdrawal is limited to after-tax contributions and the
related earnings thereon.
The Plan's loan provisions allow a participant to borrow up to 50% of the
value of their vested account balances; however, in no event within the
previous 12 month period can the participant's aggregate loan balance
exceed $50,000. All loans are collateralized by the participant's
account balances and bear interest at one percent over the prime rate.
10. Tax Status:
-----------
The Plan is designed to constitute a qualified trust under Section 401(a)
of the Internal Revenue Code and is therefore considered to be exempt
from federal income tax under provisions of Section 501(a). An
application was filed with the Internal Revenue Service on March 22, 1993
for a determination as to whether the Plan meets the qualification
requirements of Section 401(a) of the Internal Revenue Code of 1986. On
August 24, 1993, the Company received a favorable tax qualification
determination letter, retroactive to January 1, 1989, from the Internal
Revenue Service. Participants in the Plan will not be taxed on pre-tax
contributions, rollover contributions, earnings on contributions from the
Company's retirement plans, Company contributions to the Plan on their
behalf or on earnings credited to their accounts until such contributions
and earnings are distributed or otherwise made available to them.
11. Termination of the Plan:
------------------------
It is the intent of the Company to continue the Plan; however, in the
event that the Plan is terminated by the Company, accounts would
automatically be fully vested. The assets of the Plan would be
distributed to the participants based on their account balances. In
addition, any previously forfeited amounts which had not been applied to
reduce Company contributions would be credited ratably to the accounts of
the participants remaining in the Plan at the time of such termination.
12. Administrative Expenses Paid by Company:
----------------------------------------
The Company paid approximately $61,000 in 1995 of administrative expenses
to the Plan's trustee on behalf of the Plan, which are not included in
the financial statements.
-19-
<PAGE> 23
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
<TABLE>
<CAPTION>
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Date Share Balance Cost Current Value
- --------------------------- ----------------------------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Income Fund Blend of guaranteed investment
contracts (GICS) and investment
contracts with insurance and
investment companies (1) 80,162,815.690 $ 80,162,816 $ 80,162,816
Riverwood Common Stock Pool* Common stock 73,546.175 741,900 1,013,760
Schuller Common Stock Fund* Common stock 6,335.634 1,066,822 105,457
Magellan Fund Common stock and convertible securities
mutual fund 503,426.708 36,078,039 43,284,628
Value Fund Common stock mutual fund of companies
considered undervalued or having growth
potential 292,041.106 12,612,053 14,496,921
OTC Portfolio Mutual fund of securities of companies
mainly traded in the over-the-counter
market 301,078.469 7,776,839 9,131,710
International Growth Foreign equity and debt securities
and Income Fund mutual fund 417,934.554 7,334,637 7,501,926
Asset Manager Mutual fund of domestic and foreign
stocks, bonds, and short-term instruments 1,936,404.337 28,179,246 30,692,009
Disciplined Equity Fund Domestic common stocks mutual fund 1,258,906.948 23,527,426 25,983,839
Retirement Government
Money Market Money market fund 6,535,039.660 6,535,040 6,535,040
Loans to Plan members Participant loans (2) 6,959,901 6,959,901
------------ ------------
$210,974,719 $225,868,007
============ ============
</TABLE>
(1) The Income Fund bears interest ranging from 0.00% to 9.13%, maturing
January, 1996 through June, 1997.
(2) Loans to Plan members bear interest ranging from 7% to 12% and mature on
January, 1996 through December, 2020.
* Party in interest
-20-
<PAGE> 24
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
December 31, 1995
<TABLE>
<CAPTION>
Current Value
at Transaction
Identity of Fund Desription of Asset Total Purchases Total Sales Cost of Asset Date Net Gain
- ---------------- ------------------- --------------- ----------- ------------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Cash Portfolio Cash and equivalents $39,341,355 $29,949,209 $29,949,209 $29,949,209
Magellan Fund Growth common stock
fund $16,470,500 $ 9,527,928 $ 8,545,722 $ 9,527,928 $982,206
Value Fund Long-term capital
growth mutual fund $ 6,647,359 $ 4,189,287 $ 3,971,401 $ 4,189,287 $217,886
Asset Manager Asset allocation mutual
fund $ 5,911,905 $ 7,250,644 $ 7,194,713 $ 7,250,644 $ 55,931
Disciplined
Equity Fund Domestic common stock
mutual fund $ 8,168,864 $ 4,188,477 $ 3,724,868 $ 4,188,477 $463,609
</TABLE>
-21-
