SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Year Ended December 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the Transition Period From to
Commission File Number
A. Full title of the Plan and the address of the
Plan, if different from that of the issuer
named below:
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX DEFERRED SAVINGS PLAN
B. Name of issuer of the securities held
pursuant to the Plan and the address of its
principal executive office:
ACCEPTANCE INSURANCE COMPANIES INC.
ONE CENTRAL PARK PLAZA
222 SOUTH 15TH STREET, SUITE 600
OMAHA, NEBRASKA 68102
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
ACCEPTANCE INSURANCE COMPANIES INC.
EMPLOYEE STOCK OWNERSHIP AND TAX
DEFERRED SAVINGS PLAN
-----------------------------------
(Name of Plan)
July 14, 1995 /s/ Georgia M. Mace
Date: __________________ By ________________________________
Georgia M. Mace
Plan Administrator
<PAGE>
REQUIRED INFORMATION
Plan financial statements and schedules are prepared in
accordance with the financial reporting requirements of ERISA and
are included therein as listed in the table of contents below.
Table of Contents
(a) Financial Statements and Annual Report Schedules
Independent Auditors' Report of Pfeister & Associates
Independent Auditors' Report of Deloitte & Touche
Statement of Net Assets Available for Benefits,
December 31, 1994
Statement of Net Assets Available for Benefits,
December 31, 1993
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1994
Statement for Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1993
Notes to Financial Statements
(b) Annual Report Schedules
Item 27a - Schedule of Assets Held for Investment
Purposes, December 31, 1994
Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1994
(c) Exhibits
Exhibit 23.1 - Independent Auditors' Consent of
Pfeister & Associates
Exhibit 23.2 - Independent Auditors' Consent of
Deloitte & Touche
Schedules not filed herewith are omitted because of the absence
of the conditions under which they are required.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Administrative Committee
Acceptance Insurance Companies Inc. Employee Stock
Ownership and Tax Deferred Savings Plan
Omaha, Nebraska
We have audited the accompanying statement of net assets
available for benefits of the Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan (the Plan)
as of December 31, 1994, and the related statement of changes in
net assets available for benefits for the year then ended. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the
Acceptance Insurance Companies Inc. Employee Stock Ownership and
Tax Deferred Savings Plan as of December 31, 1994, and the
changes in net assets available for benefits for the year then
ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The
supplemental annual report schedules are presented for purposes
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. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to auditing
procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects
when considered in relation to the basic financial statements
taken as a whole.
The statement of net assets available for benefits of the
Acceptance Insurance Companies Inc. Employee Stock Ownership and
Tax Deferred Savings Plan as of December 31, 1993, and the
related statement of changes in net assets available for benefits
for the year then ended were audited by other auditors whose
report dated July 1, 1994 expressed an unqualified opinion on
such financial statements.
/s/ Pfeister & Associates
PFEISTER & ASSOCIATES
July 7, 1995
Omaha, Nebraska
<PAGE>
INDEPENDENT AUDITORS' REPORT
Administrative Committee
Acceptance Insurance Companies Inc. Employee Stock
Ownership and Tax Deferred Savings Plan
Omaha, Nebraska
We have audited the accompanying statement of net assets
available for benefits of the Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan (the Plan)
as of December 31, 1993, and the related statement of changes in
net assets available for benefits for the year then ended. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, such 1993 financial statements present fairly, in
all material respects, the net assets available for benefits of
the Acceptance Insurance Companies Inc. Employee Stock Ownership
and Tax Deferred Savings Plan as of December 31, 1993, and the
changes in net assets available for benefits for the year then
ended in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
July 1, 1994
Omaha, Nebraska
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1994
- - ----------------------------------------------------------------------------------------------------
Guaranteed Money
Interest Market Balanced Income
Contracts Other Funds Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at Fair Value:
Acceptance Insurance
Companies Inc.
Common Stock $ -- $ -- $ -- $ -- $ --
Money Market Fund 138,042 16,281 472,834 41,851 34,026
U.S. Government Securities -- -- -- 112,457 55,748
Corporate Securities -- -- -- -- --
Common Stock -- -- -- 127,263 27,189
Preferred Stock -- -- -- -- --
Participant Loans -- 91,715 -- -- --
Investments at Contract Value:
Guaranteed Interest Contracts 342,288 -- -- -- --
Cash -- 68 31,868 -- --
Receivables:
Employer Contributions -- 126,720 -- -- --
Employee Contribution -- 22,331 -- -- --
Accrued Interest 1,193 58 1,980 2,995 1,248
-------- -------- -------- -------- --------
Total assets 481,523 257,173 506,682 284,566 118,211
-------- -------- -------- -------- --------
<PAGE>
LIABILITIES
Excess contributions payable 1,575 -- -- 5,068 1,566
ESOP Loan -- -- -- -- --
-------- -------- -------- -------- --------
Total liabilities 1,575 -- -- 5,068 1,566
-------- -------- -------- -------- --------
Net Assets Available
for Benefits $479,948 $257,173 $506,682 $279,498 $116,645
======== ======== ======== ======== ========
<PAGE>
<CAPTION>
Capital Acceptance Employee
Appreciation Common Stock
Portfolio Stock Fund Ownership Total
<S> <C> <C> <C> <C>
ASSETS
Investments at Fair Value:
Acceptance Insurance
Companies Inc.
Common Stock $ -- $460,320 $1,203,075 $1,663,395
Money Market Fund 381,880 77,704 -- 1,162,618
U.S. Government Securities 49,109 -- -- 217,314
Corporate Securities 723,062 -- -- 723,062
Common Stock 1,817,079 -- -- 1,971,531
Preferred Stock 50,893 -- -- 50,893
Participant Loans -- -- -- 91,715
Investments at Contract Value:
Guaranteed Interest Contracts -- -- -- 342,288
Cash -- 499 738 33,173
Receivables:
Employer Contributions -- -- -- 126,720
Employee Contribution -- -- -- 22,331
Accrued Interest 24,302 323 -- 32,099
---------- -------- ---------- ----------
Total assets 3,046,325 538,846 1,203,813 6,437,139
---------- -------- ---------- ----------
<PAGE>
LIABILITIES
Excess contributions payable 17,594 2,916 -- 28,719
ESOP Loan -- -- 297,110 297,110
---------- -------- ---------- ----------
Total liabilities 17,594 2,916 297,110 325,829
---------- -------- ---------- ----------
Net Assets Available
for Benefits $3,028,731 $535,930 $ 906,703 $6,111,310
========== ======== ========== ==========
<FN>
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1993
- - ----------------------------------------------------------------------------------------------------
Woodward Acceptance Employee
Money Equity Woodward Woodward Common Stock
Market Index Bond Opportunity Stock Ownership
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Acceptance Insurance
Companies Inc.
Common Stock $ -- $ -- $ -- $ -- $262,373 $678,539
Acceptance Insurance
Companies Inc.
Warrants -- -- -- -- 40,164 83,943
Orange-co., Inc. Common Stock -- -- -- -- 1,486 --
Woodward Equity Index Fund -- 104,649 -- -- -- --
Woodward Bond Fund -- -- 87,090 -- -- --
Woodward Opportunity Fund -- -- -- 207,953 -- --
Money Market Fund 287,247 10 9 -- 63,053 1,352
Participant loans -- -- -- -- -- --
Cash 1 1 -- 1 (51) --
Receivables:
Employer contributions -- -- -- -- -- --
Accrued interest 754 -- -- -- 180 3
-------- -------- ------- -------- -------- --------
Net assets available
for benefits $288,002 $104,660 $87,099 $207,954 $367,205 $763,837
======== ======== ======= ======== ======== ========
<PAGE>
<CAPTION>
Other Total
<S> <C> <C>
ASSETS
Investments:
Acceptance Insurance
Companies Inc.
Common Stock $ -- $ 940,912
Acceptance Insurance
Companies Inc.
Warrants -- 124,107
Orange-co., Inc. Common Stock -- 1,486
Woodward Equity Index Fund -- 104,649
Woodward Bond Fund -- 87,090
Woodward Opportunity Fund -- 207,953
Money Market Fund 5,642 357,313
Participant loans 134,972 134,972
Cash 2,716 2,668
Receivables:
Employer contributions 58,054 58,054
Accrued interest 15 952
-------- ----------
Net assets available
for benefits $201,399 $2,020,156
======== ==========
<FN>
The accompanying notes are an integral part of the financial statements.<PAGE>
Acceptance Insurance Companies Inc.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Employee Stock Ownership and Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1994
- - ----------------------------------------------------------------------------------------------------
Woodward Woodward Woodward Guaranteed
Equity Bond Opportunity Interest
Index Fund Fund Fund Contracts Other
<S> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ -- $ -- $ -- $ 15,060 $ 1,691
Dividends -- -- -- -- --
Realized (loss) gain (5,124) (11,087) (7,709) -- --
Unrealized (loss) gain -- -- -- -- --
--------- --------- --------- --------- ---------
(5,124) (11,087) (7,709) 15,060 1,691
Contributions:
Employee 6,952 3,573 9,890 -- 22,681
Employee Rollovers -- -- -- -- --
Employer -- -- -- -- 68,666
Loan Proceeds -- -- -- -- --
---------- --------- --------- --------- ---------
6,952 3,573 9,890 -- 91,347
---------- --------- --------- --------- ---------
Total additions 1,828 (7,514) 2,181 15,060 93,038
Deductions:
Return of excess contributions -- -- -- (1,575) --
Distributions to Plan
participants (85) (415) (451) (2,337) --
ESOP loan -- -- -- -- --
---------- --------- --------- --------- ---------
(85) (415) (451) (3,912) --
<PAGE>
Net transfer of assets (to) from
Other funds (106,403) (79,169) (209,617) 128,431 (37,332)
Redland transfer -- -- -- 340,369 --
---------- -------- --------- --------- ---------
Net increase (104,660) (87,098) (207,887) 479,948 55,706
Net assets available for benefits
Beginning of year 104,660 87,099 207,954 -- 201,399
Net assets available for benefits
at End of year $ -- $ 1 $ 67 $479,948 $257,105
========== ======== ========= ========= =========
<PAGE>
<CAPTION>
Money Capital Acceptance
Market Balanced Income Appreciation Common
Funds Portfolio Portfolio Portfolio Stock Fund
<S> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 17,521 $ 2,781 $ 1,217 $ 53,560 $ 1,835
Dividends -- 977 210 16,573 --
Realized (loss) gain -- -- -- 5,541 (30,972)
Unrealized (loss) gain -- (14) (270) 9,123 193,835
---------- --------- --------- ----------- ---------
17,521 3,744 1,157 84,797 164,698
Contributions:
Employee 329,591 46,302 10,822 86,534 26,930
Employee Rollovers 93,360 43,409 23,432 35,921 6,083
Employer 58,054 -- -- -- --
Loan Proceeds -- -- -- -- --
---------- --------- --------- ----------- ---------
481,005 89,711 34,254 122,455 33,013
---------- --------- --------- ----------- ---------
Total additions 498,526 93,455 35,411 207,252 197,711
Deductions:
Return of excess contributions -- (5,068) (1,566) (17,594) (2,916)
Distributions to Plan
participants (106,635) -- -- (99,575) (94,519)
ESOP loan -- -- -- -- --
---------- --------- --------- ----------- ---------
(106,635) (5,068) (1,566) (117,169) (97,435)
Net transfer of assets (to) from
Other funds (244,427) 191,111 82,800 206,157 68,449
Redland transfer 71,216 -- -- 2,732,491 --
---------- --------- --------- ----------- ---------
<PAGE>
Net increase 218,680 279,498 116,645 3,028,731 168,725
Net assets available for benefits
Beginning of year 288,002 -- -- -- 367,205
Net assets available for benefits
at End of year $ 506,682 $279,498 $116,645 $3,028,731 $535,930
========== ========= ========= =========== =========
<PAGE>
<CAPTION>
Employee
Stock
Ownership Total
<S> <C> <C>
Additions:
Investment Income:
Interest $ 24 $ 93,689
Dividends -- 17,760
Realized (loss) gain 25,495 (23,856)
Unrealized (loss) gain 156,111 358,785
--------- -----------
181,630 446,378
Contributions:
Employee -- 543,275
Employee Rollovers -- 202,205
Employer -- 126,720
Loan Proceeds 297,110 297,110
--------- -----------
297,110 1,169,310
--------- -----------
Total additions 478,740 1,615,688
Deductions:
Return of excess contributions -- (28,719)
Distributions to Plan
participants (38,764) (342,781)
ESOP loan (297,110) (297,110)
--------- -----------
(335,874) (668,610)
Net transfer of assets (to) from
Other funds -- --
Redland transfer -- 3,144,076
--------- -----------
<PAGE>
Net increase 142,866 4,091,154
Net assets available for benefits
Beginning of year 763,837 2,020,156
Net assets available for benefits
at End of year 906,703 6,111,310
========= ===========
<FN>
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1993
- - ----------------------------------------------------------------------------------------------------
Woodward Ambassador
Money Equity Woodward Woodward Growth
Market Index Bond Opportunity Stock
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 9,152 $ 702 $ 1,267 $ 559 $ 1,245
Dividends -- -- -- -- 5,200
Net appreciation in fair
value of estimates 2,693 (774) (1,298) 8,528 22,624
---------- --------- -------- --------- ----------
11,845 (72) (31) 9,087 29,069
Contributions:
Employee 192,994 -- -- -- 42,194
Employee rollovers 20,574 -- -- -- --
Employer -- -- -- -- --
---------- --------- -------- --------- ----------
213,568 -- -- -- 42,194
---------- --------- -------- --------- ----------
Total Additions 225,413 (72) (31) 9,087 71,263
Deductions:
Distributions to Plan
participants (37,372) (221) (295) -- (38,269)
Transfer of assets (to)
from other funds (124,411) 104,953 87,425 198,867 (242,540)
---------- --------- -------- --------- ----------
Net increase (decrease) 63,630 104,660 87,099 207,954 (209,546)
<PAGE>
Net assets available for
benefits at beginning
of year 224,372 -- -- -- 209,707
---------- --------- -------- --------- ----------
Net assets available for
benefits at end of year $ 288,002 $104,660 $87,099 $207,954 $ 161
========== ========= ======== ========= ==========
<PAGE>
<CAPTION>
Acceptance Employee
Ambassador Common Stock
Indexed Stock Ownership
Fund Fund Plan Other Total
<S> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 229 $ 604 $ 37 $ (93) $ 13,702
Dividends 7,843 -- -- -- 13,043
Net appreciation in fair
value of estimates 1,303 102,485 192,525 -- 328,086
---------- --------- --------- --------- -----------
9,375 103,089 192,562 (93) 354,831
Contributions:
Employee 36,256 19,955 -- -- 291,399
Employee rollovers -- -- -- -- 20,574
Employer -- -- -- 58,054 58,054
---------- --------- --------- --------- -----------
36,256 19,955 -- 58,054 370,027
---------- --------- --------- --------- -----------
Total Additions 45,631 123,044 192,562 57,961 724,858
Deductions:
Distributions to Plan
participants (41,733) (13,121) (153) -- (131,164)
Transfer of assets (to)
from other funds (185,870) 87,752 -- 73,824 --
---------- --------- --------- --------- -----------
Net increase (decrease) (181,972) 197,675 192,409 131,785 593,694
<PAGE>
Net assets available for
benefits at beginning
of year 182,014 169,530 571,428 69,411 1,426,462
---------- --------- --------- --------- -----------
Net assets available for
benefits at end of year $ 42 $367,205 $763,837 $201,196 $2,020,156
========== ========= ========= ========= ===========
<FN>
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
<PAGE>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Notes to Financial Statements
Years Ended December 31, 1994 and 1993
- - -----------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Plan provides only general
information. Participants should refer to the Plan
agreement for a more complete description of the Plan's
provisions.
General
The Acceptance Insurance Companies Inc. Employee Stock
Ownership (ESOP) and Tax Deferred Savings Plan (401[k]) (the
Plan) was established to enable participating employees of
Acceptance Insurance Companies Inc. (the Company) to share
in the growth of the employer and to provide participants
with future economic security. Participation in the Plan is
voluntary and is applicable to all employees who have been
credited with one year of service and attained the age of 21
for the ESOP portion and have been credited with six months
of service and attained the age of 21 for the 401(k)
portion. The Plan is administered by the Acceptance
Insurance Companies Inc. Administrative Committee.
Contributions
Employee contributions are invested in one or more funds as
elected by the employee. As of December 31, 1994, the
following funds were available for investment: Money Market
Fund, Income Portfolio, Balanced Portfolio, Capital
Appreciation Portfolio, Guaranteed Interest Contracts; and
Acceptance Insurance Companies Inc. Common Stock Fund.
Employer contributions are invested only in the Acceptance
Common Stock Fund for the ESOP portion of the Plan and in
one or more funds for the 401(k) portion of the Plan as
directed by the participant.
Each participant may, subject to the maximum limitations
under ERISA, contribute to the 401(k) portion Plan from 1%
to 15% of their compensation, as defined under the Plan.
The Company may, but is not required, to contribute a
matching contribution. The Company may also make an
additional discretionary contribution. Any Company
contributions are determined by the Company's Board of
Directors.
Vesting
Employer contributions to the ESOP portion of the Plan
become vested in accordance with a vesting schedule which
increases 20% for each consecutive year of service starting
with the third year of service and are fully vested after
seven years of service. For the 401(k) portion of the Plan,
except upon death, disability or retirement, whereupon
employer contributions become fully vested, employer
contributions are vested 10% with one year of service and
vesting increases to 30%, 50%, 75% and 100% through five
years of service. Employee contributions are fully vested
at all times.
The normal form of benefit for a participant who terminates
or retires is a lump sum payment. If the participant's
account was invested in Acceptance Insurance Companies Inc.
common stock, the payment can be in the form of stock or
cash. For all other account balances lump sum payment is in
cash only.
Loans to participants
The Plan provides that participants may be granted loans
subject to certain terms and maximum dollar or vested
account balance limits, as defined by the Plan. These loans
mature within five years from the date they are granted,
except for loans for the participant's principal residence
where the maturity date can be extended beyond five years.
Loan payments are withheld from employee payroll and
submitted to the trustee.
Plan merger
On July 1, 1994, the Redland Group Profit Sharing Plan and
401(K) Plan were merged into the Acceptance Insurance
Companies Inc. Employee Stock Ownership and Tax Deferred
Savings Plan. The transferred net assets have been
recognized in the accounts of the Acceptance Plan as of July
1, 1994, at the balances previously carried in the accounts
of the Redland Group plan. The changes in net assets of the
combined plans are included in the accompanying statement of
changes in net assets available for benefits from July 1,
1994. A summary of the transferred net assets follows:
<TABLE>
<S> <C>
Investments, at fair value $ 3,168,208
Receivables:
Employee contributions 21,214
Others 432
Accounts payable and accrued
liabilities (45,778)
------------
$ 3,144,076
============
</TABLE>
Plan termination
The term of the plan is indefinite, but may be amended,
modified or terminated at any time by the Company.
Regardless of such actions, the principal and income of the
Plan remains for the exclusive benefit of the Plan's
participants and beneficiaries. In the event the Plan is
terminated, with certain exceptions each participant's
account becomes 100% vested. The Company is required to
direct the Trustee to distribute the Plan's assets to
participants in lump sum distributions, which shall be made
in whole shares of the Acceptance Insurance Companies Inc.
stock to the extent the fund is so comprised and cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Acceptance Insurance
Companies Inc. Employee Stock Ownership and Tax Deferred
Savings Plan are prepared on the accrual basis of
accounting.
Investments - Investments in equity securities are recorded
at fair value. Mutual fund units are recorded at reported
net asset value. Investments in guaranteed interest
contracts are valued at contract value (see Note 3), which
approximates fair value. Participant loans are carried at
the balance of outstanding principal.
Interest and dividend income are recorded on the accrual
basis.
Payment of benefits - Benefits are recorded when paid.
3. GUARANTEED INTEREST CONTRACTS WITH INSURANCE COMPANY
Assets that were merged into the Plan from the Redland Group
401(K) Plan (see Note 1) include a Guaranteed Interest
Account entered into with Principal Mutual Life Insurance
Company (Principal) on September 1, 1992. Pursuant to the
merger, the contracts were transferred to the Plan trustee,
who maintains the contributions. The contract is included
in the financial statements at contract value, which
approximates fair value, as reported to the Plan by
Principal. Contract value represents contributions made
under the contract, plus earnings, less Plan withdrawals.
4. EXERCISE OF WARRANTS
Effective November 28, 1994, the Plan exercised its 27,010
warrants to purchase common stock of Acceptance Insurance
Companies Inc. at $11.00 a share, for a total purchase price
of $297,110, financed by a term note guaranteed by the
Company.
The term note bears interest at 7.5%, payable in annual
installments of $56,094 including principal. The annual
principal and interest payments are due beginning February
1, 1995, with any remaining principal due February 1, 2001.
Effective November 28, 1994, the Company entered into a
contribution agreement whereby the Company agrees to
contribute to the Plan a sufficient amount to allow the Plan
to pay the annual installments of principal and interest on
the loan. The Plan agrees to apply any amounts received
toward the annual principal and interest installments.
5. FEES AND EXPENSES
Fees and expenses that are incurred directly in the interest
of the Plan were paid by Acceptance Insurance Companies Inc.
for the years ended December 31, 1994 and 1993.
6. INCOME TAX STATUS
The Plan, as amended and restated October 1, 1990, has been
submitted to the Internal Revenue Service for a
determination of exemption from federal income tax under
Section 401(a) of the Internal Revenue Code. Although such
determination has not been received, it is the opinion of
the Plan administrator and the Plan's counsel that the Plan
is designed and being operated in compliance with applicable
requirements of the Internal Revenue Code. Therefore they
believe that the Plan was qualified and the related trust
was tax exempt as of the date of the financial statements.
A participant's contributions to the 401(k) portion of the
Plan are made on a pre-tax basis, i.e., excluded from gross
income for tax purposes, but such contributions are subject
to social security taxes. These contributions are taxable
to the participant upon receipt. A participant is not
subject to federal income taxes on the amount of Company
contributions and Plan earnings until such amounts are
withdrawn or distributed. The tax consequences of
distributions to participants will vary depending on the
circumstances at the time of distribution.
7. RELATED PARTY TRANSACTIONS
Mammel and Associates, a related party, began administering
the Plan on July 1, 1994. As stated in Note 5, all fees
incurred for Plan administration were paid by Acceptance
Insurance Companies Inc.
8. INVESTMENTS
Investments held by the Plan at December 31, are:
<PAGE>
<TABLE>
<CAPTION>
1994 1993
Description Cost Market Cost Market
<S> <C> <C> <C> <C>
Acceptance Insurance Companies Inc.
Common Stock (83,883 and 77,601 shares) $ 981,920 $1,258,245 $ 905,324 $ 940,912
Acceptance Insurance Companies Inc.
Common Stock (27,010 shares encumbered by ESOP
Loan (Note 4)) 297,110 405,150 -- --
Acceptance Insurance Companies Inc.
Warrants (41,369 shares) -- -- 61,168 124,107
Orange-co., Inc. Common Stock
(283 shares) -- -- 2,122 1,486
Common Stock of Unaffiliated Companies 1,952,196 1,971,531 -- --
Preferred Stock 49,626 50,893 -- --
U.S. Government Obligations 218,882 217,314 -- --
Corporate Securities 733,258 723,062 -- --
Guaranteed Interest Contracts 342,288 342,288 -- --
Woodward Equity Index Fund
(9387 units) -- -- 106,604 104,649
Woodward Bond Fund
(8,436 units) -- -- 90,894 87,090
Woodward Opportunity Fund
(14,351 units) -- -- 209,640 207,953
Money Market Fund 1,162,618 1,162,618 357,313 357,313
<PAGE>
Participant Loans 91,715 91,715 134,972 134,972
---------- ---------- ---------- ----------
$5,829,613 $6,222,816 $1,868,037 $1,958,482
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Annual Report Schedules
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1994
- - ----------------------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of Investment, Including
Identity of Issue, Borrower Collateral, Rate of Interest, Current
Lessor or Similar Party Maturity Date, Par or Maturity Value Cost Value
<S> <C> <C> <C>
Common Stock: Number of Shares
*Acceptance Insurance Companies, Inc. 83,883 $ 981,920 $1,258,245
*Acceptance Insurance Companies Inc. 27,010, collateralized by term note,
7.5%, maturing 2/1/2001 297,110 405,150
ADT Ltd Com Par $0.10 4,700 48,763 50,525
American Store Co New 2,280 58,995 61,275
Apache Corp 980 25,113 24,500
Belden & Blake Corp Com 4,000 56,500 55,000
Brierly Investments Ltd Com 48,200 34,800 36,295
Bristol Myers Squibb Co. 970 51,046 56,139
Chris-Craft Ind. Inc. Com 830 30,606 28,635
CP Pokphan Co HK/Reg 153,480 45,584 44,202
Dow Chem Co Com 630 43,549 42,368
Fingerhut Cos Inc. 4,230 87,839 65,565
Florida Est Coast Inds 100 6,866 6,600
Focus Surgery, Inc Com 9,470 11,837 7,690
Foremost Corp of America 1,180 37,318 42,185
Freeport-McMoran Copper & Gold 114 2,574 2,422
Freeport-McMoran Inc. 2,960 49,950 52,540
Frontier Ins Group Inc Com 3,500 61,194 76,563
Great Lakes Chem Corp 1,200 63,598 68,400
Hanson TR PLC ADR 1,610 31,999 28,980
IMC Global, Inc Com 1,010 39,390 44,187
IRT Property Co Common 6,400 63,878 65,600
Jostens Inc. 3,500 63,738 65,625
Lilly Eli & Co Com 850 42,102 55,781
Montedison SPA ADR 4,310 39,867 31,247
Newmont Mng Corp 2,110 83,345 75,960
Occidental Petroleum Corp 2,700 54,370 51,975
OEC Medical Systems, Inc. 3,040 18,240 19,760
Old Republic Intl Corp 2,010 42,803 42,713
Perceptron, Inc. Com 1,300 21,938 29,900
Pet Inc, New 1,010 18,811 19,948
Price/Costco Inc Com 4,000 56,400 51,500
Pride Petroleum Svcs Inc. 12,000 60,600 60,000
Repap Enterprises Com 8,450 30,631 43,306
Ryder Sys Inc Com 2,110 55,124 46,420
SmithKline Beecham P L C ADR 1,700 53,096 58,225
SPDR TR Unit Ser 1 3,245 146,400 147,852
TBC Corp 5,600 55,300 51,800
Texas Industries, Inc Com 1,940 68,143 68,385
UNOCAL Corporation 900 24,240 24,525
UNR Industries, Inc Com 4,900 26,337 31,237
Vulcan Matls Co 900 46,768 45,562
Wang Laboratories Com 2,710 30,826 27,439
WMX Technologies Inc Com 2,400 61,718 62,700
---------- ----------
Total Common Stock 3,231,226 3,634,926
<FN>
*Represents a Party-In-Interest
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Annual Report Schedules
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1994
- - ----------------------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of Investment, Including
Identity of Issue, Borrower Collateral, Rate of Interest, Current
Lessor or Similar Party Maturity Date, Par or Maturity Value Cost Value
<S> <C> <C> <C>
Preferred Stock:
Digital Equipment Corp 1010 Shares $ 20,831 $ 21,968
Sears Roebuck & Co. 520 Shares 28,795 28,925
---------- ----------
Total Preferred Stock 49,626 50,893
U.S. Government Securities:
US Treasury 50,000
Note Dated 11/15/91-7.5% Mat-11/15/2001 $ 49,206 $ 49,109
US Treasury 105,000
Note Dated 11/15/94-7.375% Mat-11/15/97 104,934 103,885
US Treasury 67,000
Note Dated 8/15/94-7.25% Mat-8/15/2004 64,742 64,320
---------- ----------
Total US Government
Securities 218,882 217,314
Corporate Securities
Southern Pacific 34,000 - Ser B 10.5% Mat 7/1/99-97 35,870 34,370
Unisys Corp 51,000 - 10.625% Mat 10/1/99-97 50,554 51,216
Coltec Industries 25,000 - 9.75% Mat - 11/1/99 25,062 24,375
Embassy Suites 42,000 - 8.75% Mat - 3/15/2000-98 40,110 39,270
Coltec Industries 28,000 - 9.75% Mat - 4/1/2000 28,035 27,580
Hillhaven Corp 42,000 - 10.125% Mat - 9/1/2001-98 41,633 41,895
Safeway Stores Inc. 68,000 - 10% Mat - 12/1/2001 72,420 70,635
Westpoint Stevens Inc. 45,000 - 8.75% Mat - 12/15/2001-98 40,894 41,513
Green Tree Accept Inc. 34,000 - 10.25% Mat - 6/1/2002 36,890 35,530
Leucadia National Corp 34,000 - 10.375% Mat - 6/15/2002-97 36,210 35,615
Manor Care Inc. 21,000 - 9.5% Mat - 11/15/2002-97 21,577 21,473
Payless Cashways 25,000 - 9.125% Mat - 4/15/2003-98 23,875 22,500
ARA GRP 38,000 - 8.5% Mat - 6/1/2003-98 35,530 35,530
Blount Inc. 21,000 - 9% Mat - 6/15/2003-97 20,160 20,265
Noble Drilling 50,000 - 9.25% Mat - 10/1/2003-98 47,125 47,250
Rykoff Sexton 42,000 - 8.675% Mat - 11/1/2003-98 38,955 39,270
Giant Industries Inc. 42,000 - 9.75% Mat - 11/15/2003-98 39,900 37,800
Integrated Health 40,000 - 10.75% Mat - 7/15/2004-99 39,700 39,800
Viacom Inc. 50,000 - 8% Mat - 7/7/2006-99 43,688 42,875
National Health Inv 11,000 - 10% Mat - 10/17/2006-94 15,070 14,300
--------- ----------
Total Corporate Securities 733,258 723,062
Guaranteed Interest Contracts:
Principal Financial Group GIC, 8.00%, matures 12/31/95 63,921 63,921
Principal Financial Group GIC, 7.00%, matures 12/31/96 84,924 84,924
Principal Financial Group GIC, 5.50%, matures 12/31/97 87,078 87,078
Principal Financial Group GIC, 6.00%, matures 12/31/98 59,721 59,721
Principal Financial Group GIC, 8.80%, matures 12/31/99 46,644 46,644
---------- ----------
Total Guaranteed Interest
Contracts 342,288 342,288
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Annual Report Schedules
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1994
- - ----------------------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of Investment, Including
Identity of Issue, Borrower Collateral, Rate of Interest, Current
Lessor or Similar Party Maturity Date, Par or Maturity Value Cost Value
<S> <C> <C> <C>
Money Market Fund: 1,162,618 units 1,162,618 1,162,618
Loans to Participants: Participant loans bearing various
dates and interest rates 91,715 91,715
---------- ----------
Total Investments $5,829,613 $6,222,816
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Annual Report Schedules
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1994
- - ----------------------------------------------------------------------------------------------------
Single Transactions Involving an Amount in Excess
of 5 Percent of the Current Value of Plan Assets
Column A Column B Column C Column D Column G
Identity of Purchase Selling Cost of
Party Involved Description of Assets Price Price Asset
<S> <C> <C> <C> <C>
National Bank of Detroit Money Market Fund $124,138 $ -- $ --
National Bank of Detroit Money Market Fund -- 239,347 239,347
National Bank of Detroit Money Market Fund -- 124,138 124,138
National Bank of Detroit Money Market Fund -- 238,520 238,520
National Bank of Detroit Woodward Equity Index Fund -- 170,175 175,225
National Bank of Detroit Woodward Bond Fund -- 117,484 128,020
National Bank of Detroit Woodward Opportunity Fund -- 239,964 247,175
First National Bank
of Omaha Money Market Fund 382,723 -- --
First National Bank
of Omaha Money Market Fund -- 382,734 382,734
First National Bank
of Omaha Money Market Fund 125,422 -- --
First National Bank
of Omaha Money Market Fund 110,102 -- --
First National Bank
of Omaha Money Market Fund 248,983 -- --
First National Bank
of Omaha Money Market Fund 393,684 -- --
First National Bank
of Omaha Money Market Fund -- 104,216 104,216
First National Bank
of Omaha Money Market Fund -- 145,408 145,408
First National Bank
of Omaha Money Market Fund 813,448 -- --
First National Bank
of Omaha Money Market Fund -- 526,538 526,538
First National Bank
of Omaha Money Market Fund 526,538 -- --
First National Bank
of Omaha Money Market Fund -- 519,969 519,969
First National Bank SPDR TR Unit Ser. 1,
of Omaha 2440 Shares 110,102 -- --
First National Bank Acceptance Insurance
of Omaha Companies Inc.
Common Stock, 34,794 Shares 382,734 -- --
<PAGE>
<CAPTION>
Single Transactions Involving an Amount in Excess
of 5 Percent of the Current Value of Plan Assets
Column A Column H Column I
Current
Identity of Value Net Gain
Party Involved of Assets or (Loss)
<S> <C> <C>
National Bank of Detroit $ -- $ --
National Bank of Detroit -- --
National Bank of Detroit -- --
National Bank of Detroit -- --
National Bank of Detroit -- (5,050)
National Bank of Detroit -- (10,536)
National Bank of Detroit -- (7,211)
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
<PAGE>
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha -- --
First National Bank
of Omaha 112,660 --
First National Bank
of Omaha
521,910 --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Annual Report Schedules
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1994
____________________________________________________________________________________________________
Series Transactions, When Aggregated, Involving an Amount
in Excess of 5 Percent of the Current Value of Plan Assets
Column A Column B Column C Column D Column E
Total
Dollar
Identity of Number of Number of Value of
Party Involved Description of Assets Purchases Sales Purchases
<S> <C> <C> <C> <C>
National Bank of Detroit Money Market Fund 76 40 581,279
First National Bank
of Omaha Money Market Funds 181 82 4,589,367
First National Bank 3,245 Shares
of Omaha SPDR TR Unit Ser. 1 4 -- 146,400
First National Bank 105,000 Units
of Omaha U.S. Treasury Notes Dated
11/15/94, 7.375%, Mat 11/15/97 2 -- 104,934
<PAGE>
<CAPTION>
Series Transactions, When Aggregated, Involving an Amount
in Excess of 5 Percent of the Current Value of Plan Assets
Column A Column F Column G
Total
Dollar
Identity of Value of Net Gain
Party Involved Sales or (Loss)
<S> <C> <C>
National Bank of Detroit 453,309 --
First National Bank
of Omaha 3,426,750 --
First National Bank
of Omaha -- --
First National Bank
of Omaha
-- --
</TABLE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the registration
statement on Form S-8 of Acceptance Insurance Companies Inc.
relating to the Acceptance Insurance Companies Inc. Employee
Stock Ownership and Tax Deferred Savings Plan of our report dated
July 7, 1995, appearing in this Annual Report on Form 11-K of the
Acceptance Insurance Companies Inc. Employee Stock Ownership and
Tax Deferred Savings Plan for the year ended December 31, 1994.
/s/ Pfeister & Associates
PFEISTER & ASSOCIATES
Omaha, Nebraska
July 7, 1995
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the registration
statement on Form S-8 of Acceptance Insurance Companies Inc.
relating to the Acceptance Insurance Companies Inc. Employee
Stock Ownership and Tax Deferred Savings Plan of our report dated
July 1, 1994, appearing in this Annual Report on Form 11-K of the
Acceptance Insurance Companies Inc. Employee Stock Ownership and
Tax Deferred Savings Plan for the year ended December 31, 1993.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
July 13, 1995
