SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
ON
FORM 11-K/A-1
(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, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the Transition Period From to
Commission File Number
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 NORTH
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 3, 1996 /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 Auditor's Report
Statement of Net Assets Available for Benefits,
December 31, 1995
Statement of Net Assets Available for Benefits,
December 31, 1994
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1994
Notes to Financial Statements
(b) Annual Report Schedules
Item 27a - Schedule of Assets Held for Investment
Purposes, December 31, 1995
Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1995
(c) Exhibits
Exhibit 23 - Independent Auditor's Consent
Schedules not filed herewith are omitted because of the absence
of the conditions under which they are required.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Administrative Committee
Acceptance Insurance Companies Inc. Employee Stock
Ownership and Tax Deferred Savings Plan
Omaha, Nebraska
We have audited the accompanying statements 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, 1995 and 1994, and the related statements of
changes in net assets available for benefits for the years 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 text 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, 1995 and 1994, and
the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting
principles.
Our audits were 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.
/s/ Pfeister & Associates
June 3, 1996
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, 1995
- ---------------------------------------------------------------------------------------------------
Guaranteed Capital
Interest Market Balanced Income Appreciation
Contracts Other Funds Portfolio Portfolio Portfolio
--------- ----- ------ --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments at Fair Value:
Acceptance Insurance
Companies Inc.
Common Stock $ -- $ -- $ -- $ -- $ -- $ --
Money Market Fund -- 55 279,565 215,977 48,045 325,506
U.S. Government Securities -- -- -- 122,681 60,785 --
Corporate Securities -- -- -- 36,875 31,125 1,232,524
Common Stock -- -- -- 167,076 45,189 2,621,669
Preferred Stock -- -- -- 72,193 33,377 --
Mutual Funds -- 212,762 -- -- -- 53,750
Participant loans -- 130,619 -- -- -- --
Investments at Contract Value:
Guaranteed Interest Contracts 273,636 -- -- -- -- --
Certificate of Deposit 156,936 -- -- -- -- --
Cash -- -- 35,317 -- -- --
Receivables:
Employer Contributions -- 239,408 -- -- -- --
Accrued Interest 24,629 13 1,235 4,338 1,977 25,628
-------- -------- -------- -------- -------- ----------
455,201 582,857 316,117 619,140 220,498 4,259,077
-------- -------- -------- -------- -------- ----------
<PAGE>
LIABILITIES
Excess contributions payable -- 2,201 -- 8,013 563 21,889
ESOP loan -- -- -- -- -- --
-------- -------- -------- -------- -------- ----------
Total liabilities -- 2,201 -- 8,013 563 21,889
-------- -------- -------- -------- -------- ----------
Net assets available for
benefits $455,201 $580,656 $316,117 $611,127 $219,935 $4,237,188
======== ======== ======== ======== ======== ==========
<PAGE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1995
- ---------------------------------------------------------------------------------------------------
Acceptance Employee Stock
Common Ownership
Stock Fund Allocated Unallocated Total
---------- --------- ----------- -----
<S> <C> <C> <C> <C>
Assets
Investments at Fair Value:
Acceptance Insurance
Companies Inc.
Common Stock $760,335 $860,638 $331,311 $1,952,284
Money Market Fund 148 38 -- 869,334
U.S. Government Securities -- -- -- 183,466
Corporate Securities -- -- -- 1,300,524
Common Stock -- -- -- 2,833,934
Preferred Stock -- -- -- 105,570
Mutual Funds -- -- -- 266,512
Participant loans -- -- -- 130,619
Investments at Contract Value:
Guaranteed Interest Contracts -- -- -- 273,636
Certificate of Deposit -- -- -- 156,936
Cash -- -- -- 35,317
Receivables:
Employer Contributions -- -- -- 239,408
Accrued Interest 12 -- -- 57,832
-------- -------- -------- ----------
760,495 860,676 331,311 8,405,372
-------- -------- -------- ----------
<PAGE>
LIABILITIES
Excess contributions payable 7,721 -- -- 40,387
ESOP loan -- -- 245,010 245,010
-------- -------- -------- ----------
Total liabilities 7,721 -- 245,010 285,397
-------- -------- -------- ----------
Net assets available for
benefits $752,774 $860,676 $ 86,301 $8,119,975
======== ======== ======== ==========
<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, 1994
- ---------------------------------------------------------------------------------------------------
Guaranteed Money Capital
Interest Market Balanced Income Appreciation
Contracts Other Funds Portfolio Portfolio Portfolio
--------- ----- ------ --------- --------- ------------
<S> <C> <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 34,026 381,880
U.S. Government Securities -- -- -- 112,457 55,748 49,109
Corporate Securities -- -- -- -- -- 723,062
Common Stock -- -- -- 127,263 27,189 1,817,079
Preferred Stock -- -- -- -- -- 50,893
Participant Loans -- 91,715 -- -- -- --
Investments at Contract Value:
Guaranteed Interest Contracts 342,288 -- -- -- -- --
Cash -- 68 31,868 -- -- --
Receivables:
Employer Contributions -- 126,720 -- -- -- --
Employee Contributions -- 22,331 -- -- -- --
Accrued Interest 1,193 58 1,980 2,995 1,248 24,302
-------- -------- -------- -------- -------- ----------
Total assets 481,523 257,173 506,682 284,566 118,211 3,046,325
-------- -------- -------- -------- -------- ----------
<PAGE>
LIABILITIES
Excess contributions payable 1,575 -- -- 5,068 1,566 17,594
ESOP Loan -- -- -- -- -- --
-------- -------- -------- -------- -------- ----------
Total liabilities 1,575 -- -- 5,068 1,566 17,594
-------- -------- -------- -------- -------- ----------
Net assets available for
benefits $479,948 $257,173 $506,682 $279,498 $116,645 $3,028,731
======== ======== ======== ======== ======== ==========
<PAGE>
<CAPTION>
Acceptance Insurance Companies Inc.
Employee Stock Ownership and Tax Deferred Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1994
- ---------------------------------------------------------------------------------------------------
Employee
Acceptance Stock
Common Ownership
Stock Fund Allocated Unallocated Total
---------- --------- ----------- -----
<S> <C> <C> <C> <C>
Assets
Investments at Fair Value:
Acceptance Insurance
Companies Inc.
Common Stock $460,320 $797,925 $405,150 $1,663,395
Money Market Fund 77,704 -- -- 1,162,618
U.S. Government Securities -- -- -- 217,314
Corporate Securities -- -- -- 723,062
Common Stock -- -- -- 1,971,531
Preferred Stock -- -- -- 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 Contributions -- -- -- 22,331
Accrued Interest 323 -- -- 32,099
-------- -------- -------- ----------
Total assets 538,846 798,663 405,150 6,437,139
-------- -------- -------- ----------
<PAGE>
LIABILITIES
Excess contributions payable 2,916 -- -- 28,719
ESOP Loan -- -- 297,110 297,110
-------- -------- -------- ----------
Total liabilities 2,916 -- 297,110 325,829
-------- -------- -------- ----------
Net assets available for
benefits $535,930 $798,663 $108,040 $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, 1995
- ---------------------------------------------------------------------------------------------------
Guaranteed
Interest Market Balanced Income Appreciation
Contracts Other Funds Portfolio Portfolio Portfolio
--------- ----- ------ --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 26,097 $ 772 $ 19,614 $ 20,028 $ 8,939 $ 116,298
Dividends -- -- -- 2,576 993 54,952
Realized (loss) gain -- 3,201 -- 17,632 4,899 351,523
Unrealized (loss) gain -- 6,722 -- 49,929 16,393 383,991
-------- -------- ---------- -------- -------- ----------
26,097 10,695 19,614 90,165 31,224 906,764
Allocation of 4,737 shares of
Company stock at market -- -- -- -- -- --
Contributions:
Employee -- 13,996 824,729 -- -- 7,886
Employee Rollovers -- -- 15,548 1,532 1,533 11,946
Employer -- 112,688 128,530 -- -- --
Interest paid by Acceptance
on behalf of Plan -- -- -- -- -- --
-------- -------- ---------- -------- -------- ----------
-- 126,684 968,807 1,532 1,533 19,832
-------- -------- ---------- -------- -------- ----------
Total additions 26,097 137,379 988,421 91,697 32,757 926,596
Deductions:
Return of excess
Contributions -- (2,201) -- (8,013) (563) (21,889)
Distributions to Plan
Participants (18,889) (2,137) (22,717) (4,809) (392) (126,573)
<PAGE>
Allocation of 4,737 shares
of Company stock at
market -- -- -- -- -- --
Interest on ESOP loan -- -- -- -- -- --
-------- -------- --------- -------- -------- ----------
Total deductions (18,889) (4,338) (22,717) (12,822) (955) (148,462)
Net transfer of assets
(to) from (31,955) 190,442 (1,156,269) 252,754 71,488 430,323
Net increase (Decrease) (24,747) 323,483 (190,565) 331,629 103,290 1,208,457
Net assets available for
benefits Beginning of year 479,948 257,173 506,682 279,498 116,645 3,028,731
Net assets available for
benefits at End of year $455,201 $580,656 $ 316,117 $611,127 $219,935 $4,237,188
======== ======== ========== ======== ======== ==========
<PAGE>
<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, 1995
- ---------------------------------------------------------------------------------------------------
Acceptance Employee Stock
Common Ownership
Stock Fund Allocated Unallocated Total
---------- --------- ----------- -----
<S> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 2,428 $ 22 $ -- $ 194,198
Dividends -- -- -- 58,521
Realized (loss) gain 36,089 596 -- 413,940
Unrealized (loss) gain (6,105) (26,029) (17,892) 407,009
-------- -------- -------- ----------
32,412 (25,411) (17,892) 1,073,668
Allocation of 4,737 shares of
Company stock at market -- 74,016 -- 74,016
Contributions:
Employee -- -- -- 846,611
Employee Rollovers 2,428 -- -- 32,987
Employer -- -- 52,100 293,318
Interest paid by Acceptance
on behalf of Plan -- -- 3,994 3,994
-------- -------- -------- ----------
2,428 -- 56,094 1,176,910
-------- -------- -------- ----------
Total additions 34,840 48,605 38,202 2,324,594
Deductions:
Return of excess
Contributions (7,721) -- -- (40,387)
Distributions to Plan
Participants (20,103) (1,912) -- (197,532)
<PAGE>
Allocation of 4,737 shares
of Company stock at
market -- -- (74,016) (74,016)
Interest on ESOP loan -- -- (3,994) (3,994)
-------- -------- -------- ----------
Total deductions (27,824) (1,912) (78,010) (315,929)
Net transfer of assets
(to) from 209,828 15,320 18,069 --
Net increase (Decrease) 216,844 62,013 (21,739) 2,008,665
Net assets available for
benefits Beginning of year 535,930 798,663 108,040 6,111,310
Net assets available for
benefits at End of year $752,774 $860,676 $ 86,301 $8,119,975
======== ======== ======== ==========
<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, 1994
- ---------------------------------------------------------------------------------------------------
Woodward Woodward Woodward Guaranteed Money
Equity Bond Opportunity Interest Market
Index Fund Fund Funds Contracts Other Funds
---------- -------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ -- $ -- $ -- $ 15,060 $ 1,691 $ 17,521
Dividends -- -- -- -- -- --
Realized (loss) gain (5,124) (11,087) (7,709) -- -- --
Unrealized (loss) gain -- -- -- -- -- --
--------- -------- --------- -------- -------- ---------
(5,124) (11,087) (7,709) 15,060 1,691 17,521
Contributions:
Employee 6,952 3,573 9,890 -- 22,681 329,591
Employee Rollovers -- -- -- -- -- 93,360
Employer -- -- -- -- 68,666 58,054
Loan Proceeds -- -- -- -- -- --
--------- -------- --------- -------- -------- ---------
6,952 3,573 9,890 -- 91,347 481,005
--------- -------- --------- -------- -------- ---------
Total additions 1,828 (7,514) 2,181 15,060 93,038 498,526
Deductions:
Return of excess
contributions -- -- -- (1,575) -- --
Distributions to Plan
participants (85) (415) (451) (2,337) -- (106,635)
ESOP loan -- -- -- -- -- --
--------- -------- --------- -------- -------- ---------
(85) (415) (451) (3,912) -- (106,635)
<PAGE>
Net transfer of assets
(to) from
Other funds (106,403) (79,169) (209,617) 128,431 (37,332) (244,427)
Redland transfer -- -- -- 340,369 -- 71,216
--------- -------- --------- -------- -------- ---------
(106,403) (79,169) (209,617) 468,800 (37,332) (173,211)
Net increase (104,660) (87,098) (207,887) 479,948 55,706 218,680
Net assets available for
benefits
Beginning of year 104,660 87,099 207,954 -- 201,399 288,002
Net assets available for
benefits at
End of year $ -- $ 1 $ 67 $479,948 $257,105 $ 506,682
========= ======== ========= ======== ======== =========
<PAGE>
<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, 1994
- ---------------------------------------------------------------------------------------------------
Capital Acceptance
Balanced Income Appreciation Common
Portfolio Portfolio Portfolio Stock Fund
--------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Additions:
Investment Income:
Interest $ 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
-------- -------- ---------- --------
(3,744) 1,157 (84,797) 164,698
Contributions:
Employee 46,302 10,822 86,534 26,930
Employee Rollovers 43,409 23,432 35,921 6,083
Employer -- -- -- --
Loan Proceeds -- -- -- --
-------- -------- ---------- --------
89,711 34,254 122,455 33,013
-------- -------- ---------- --------
Total additions 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 -- -- (99,575) (94,519)
ESOP loan -- -- -- --
-------- -------- ---------- --------
(5,068) (1,566) (117,169) (97,435)
<PAGE>
Net transfer of assets
(to) from
Other funds 191,111 82,800 206,157 68,449
Redland transfer -- -- 1,732,491 --
-------- -------- ---------- --------
191,111 82,800 2,938,648 68,449
Net increase 279,498 116,645 3,028,731 168,725
Net assets available for
benefits
Beginning of year -- -- -- 367,205
Net assets available for
benefits at
End of year $279,498 $116,645 $3,028,731 $535,930
======== ======== ========== ========
<PAGE>
<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, 1994
- ---------------------------------------------------------------------------------------------------
Employee
Stock
Ownership
Allocated Unallocated Total
--------- ----------- -----
<S> <C> <C> <C>
Additions:
Investment Income:
Interest $ 24 $ -- $ 93,689
Dividends -- -- 17,760
Realized (loss) gain 25,495 -- (23,856)
Unrealized (loss) gain 48,071 108,040 358,785
-------- -------- ---------
73,590 108,040 446,378
Contributions:
Employee -- -- 543,275
Employee Rollovers -- -- 202,205
Employer -- -- 126,720
Loan Proceeds -- 297,110 297,110
-------- -------- ---------
-- 297,110 1,169,310
-------- -------- ---------
Total additions 73,590 405,150 1,615,688
Deductions:
Return of excess
contributions -- -- (28,719)
Distributions to Plan
participants (38,764) -- (342,781)
ESOP loan -- (297,110) (297,110)
-------- -------- ---------
(38,764) (297,110) (668,610)
<PAGE>
Net transfer of assets
(to) from
Other funds -- -- --
Redland transfer -- -- 3,144,076
-------- -------- ----------
-- -- 3,144,076
Net increase 34,826 108,040 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 $798,663 $108,040 $6,111,310
======== ======== ==========
<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, 1995 and 1994
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, 1995, 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 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 AND ESOP LOAN
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.
Interest of $3,994 was paid by the Company on behalf of the
Plan, for the year ended December 31, 1995. Loan repayments
will be made as follows:
<TABLE>
<S> <C>
1996 $ 37,019
1997 39,893
1998 43,004
1999 46,352
2000 49,964
2001 28,778
--------
$245,010
========
</TABLE>
The loan is collateralized by the unallocated shares of
stock. As the ESOP loan is paid, stock is released from
encumbrance and allocated to participants' accounts based on
a predetermined formula. The lender has no right against
shares that have been released and allocated under the ESOP.
Accordingly, the financial statements present separately the
assets and liabilities and changes therein related to:
. Stock already released and allocated to
participant accounts.
. Stock not yet allocated to employees
(unallocated).
The net assets and changes in net assets available for
benefits for the ESOP portion of the Plan for the year ended
December 31, 1994 have been reclassified to conform to the
1995 presentation.
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, 1995 and 1994.
6. INCOME TAX STATUS
The Internal Revenue Service has informed the Company that
the Plan, as amended and restated October 1, 1990, is
qualified under Section 401(a) of the Internal Revenue Code
(IRC) and is, accordingly, exempt from Federal income taxes
under the provisions of Section 501(a) of the IRC.
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.
<PAGE>
8. INVESTMENTS
Investments held by the Plan at December 31, are:
<TABLE>
<CAPTION>
1995 1994
Description Cost Market Cost Market
----------- ---- ------ ---- ------
<S> <C> <C> <C> <C>
Acceptance Insurance Companies Inc.
Common Stock (108,973 and 83,883
shares) $1,342,354 $1,620,973 $ 981,920 $1,258,245
Acceptance Insurance Companies Inc.
Common Stock (22,273 and 27,010
shares encumbered by ESOP Loan
(Note 4)) 245,003 331,311 $ 297,110 $ 405,150
Common Stock of Unaffiliated
Companies 2,384,774 2,833,934 1,952,196 1,971,531
Preferred Stock 103,375 105,570 49,626 50,893
Mutual funds 259,166 266,512 -- --
U.S. Government Obligations 169,675 183,466 218,882 217,314
Corporate Securities 1,261,267 1,300,524 733,258 723,062
Guaranteed Interest Contracts 273,636 273,636 342,288 342,288
Certificate of Deposit 156,936 156,936 -- --
Money Market Fund 869,334 869,334 1,162,618 1,162,618
Participant Loans 130,619 130,619 91,715 91,715
---------- ---------- ---------- ----------
$7,196,139 $8,072,815 $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 27a - Schedule of Assets Held for Investment Purposes
December 31, 1995
- ---------------------------------------------------------------------------------------------------
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
Common Stock: Number of Shares
<S> <C> <C> <C>
*Acceptance Insurance Companies Inc. 108,973 $1,342,354 $1,620,973
*Acceptance Insurance Companies Inc. 22,273, collateralized by term note,
7.5%, maturing 2/1/2001 245,003 331,311
Allied Group, Inc. 2,000 52,250 72,000
Amdahl Corp 8,500 85,142 72,250
Amtech Corp Com 600 6,300 3,074
Belden & Blake Corp Com 5,000 80,625 87,500
Borders Group Inc. 5,000 74,525 92,500
Brierly Investments Ltd Com 48,200 34,800 37,791
Brinker International Inc. 4,000 55,862 60,500
Brunswick Corp 2,700 54,499 64,800
Carrington Labs 200 3,464 6,200
Cato Corp CL A 8,700 62,449 67,425
Cavalier Homes Inc. 812 7,909 16,850
Central Newspapers CL A 360 10,135 11,295
Charter Power Systems Inc 2,300 58,075 66,125
Citicorp Common 373 20,234 25,084
Compania Boliviana Energia 900 27,072 29,925
CP Pokphan Co HK/Reg 153,480 45,584 61,515
Dean Witter Discover & Co 1,100 56,223 51,700
Developers Divers Realty Corp 1,800 52,958 54,000
Devon Energy Corp 3,500 63,210 89,250
Dillard Dept Stores CL A 1,300 32,968 37,050
E P Technologies 730 6,661 10,585
Florida East Coast Inds 100 6,866 6,825
Foremost Corp of America 1,180 37,318 59,885
Frontier Ins Group Inc Com 3,500 61,194 112,000
FTP Software Inc 1,900 53,556 55,100
Gainsco Inc 5,800 51,765 65,975
General Instrument Corp 1,500 35,897 35,062
Great Lakes Chem Corp 1,200 63,598 86,400
Great Western Finl 3,400 84,076 86,275
Grupo Televisa 480 7,154 10,800
Guarantee Life Companies Inc 1,100 14,300 17,324
Hexcel Corp 9,000 44,235 101,250
Home State Holdings Inc 1,200 10,712 11,137
Jostens Inc. 3,500 63,738 84,875
Koala Corp 775 6,834 9,590
Lincoln Telecommunications Co 1,015 18,233 21,442
MacNeal-Schwendler Corp 5,400 66,420 86,400
Montedison SPA ADR 4,310 39,868 28,015
Network General Corp 150 4,969 5,006
OEC Medical Systems, Inc. 3,040 18,240 29,640
Patriot American Hospitality 2,300 55,200 59,225
PPG Inds Inc 216 7,918 9,882
Price/Costco Inc Com 3,200 44,400 48,800
Proxima Corp 3,700 71,288 81,863
Repap Enterprises Com 6,950 25,194 30,844
--------- ---------
Total this page 3,371,275 4,113,318
</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, 1995
- ---------------------------------------------------------------------------------------------------
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>
Balance forward 3,371,275 4,113,318
Repsol Spon ADR 2,600 83,586 85,475
Rubbermaid Inc 175 4,796 4,463
Snyder Oil Corp 7,400 83,667 88,800
Stet Soc Finanz Telef Sp ADR 1,800 55,458 50 175
Target Therapeutics Inc 460 6,469 19,665
Toys R Us Inc 2,000 49,536 43,500
U S Healthcare Inc 2,400 85,237 111,600
UNOCAL Corporation 900 24,240 26,212
UNR Industries, Inc Com 4,900 19,967 42,263
Viacom Inc CL B 220 9,219 10,423
Wall Data Inc 295 6,527 4,868
Wang Laboratories 2,710 30,826 45,054
WHX Corporation 7,000 84,465 76,125
WMX Technologies Inc Com 1,900 48,860 56,525
Zemex Corp 775 8,003 7,752
---------- ----------
Total Common Stock 3,972,131 4,786,218
*Represents a Party-In-Interest
Mutual Funds:
Society National Bank Magic Fund 19,671 206,011 212,762
Growth Fund of Spain Inc 5,000 53,155 53,750
---------- ----------
Total Mutual Funds 259,166 266,512
Preferred Stock:
First Chicago NBD Corp 350 shares $ 33,425 $ 35,000
Texas Utilities Elec Co 350 shares 33,950 34,570
Westbridge Cap Corp 40 shares 36,000 36,000
---------- ----------
Total Preferred Stock 103,375 105,570
U.S. Government Securities:
US Treasury 105,000
Note Dated 11/15/94 -
7.375% Mat-11/15/97 104,934 108,970
US Treasury 67,000
Note Dated 8/15/94 -
7.25% Mat-8/l5/2004 64,741 74,496
---------- ----------
Total US Government Securities 169,675 183,466
</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, 1995
- ---------------------------------------------------------------------------------------------------
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>
Corporate Securities:
Commercial Federal Corp 25,000 - 10.25% Mat-12/15/99 25,375 25,000
Swift Energy Co 40,000 - 6.5% Mat-6/30/2003-96 38,600 43,000
AMC Entertainment 40,000 - 11.875% Mat-8/1/2000-97 42,500 44,800
Primark Corp 5,000 - 8.75% Mat-10/15/2000-97 5,125 5,125
Kinder Care Centers 45,000 - 10.375% Mat-6/1/2001-98 45,338 47,363
Ornda Healthcorp 40,000 - 12.25% Mat-5/15/2002-97 42,900 43,800
Katz Corp 15,000 - 12.75% Mat-11/15/2002-97 16,688 16,106
Westpoint Stevens Inc. 60,000 - 8.75% Mat-12/15/2001-98 56,963 60,150
Alliant Techsystems Inc 55,000 - 11.75% Mat-3/1/2003-99 60,500 59,769
Leucadia National Corp 34,000 - 10.375% Mat-6/15/2002-97 36,210 36,783
Affinity Group 50,000 - 11.5% Mat-10/15/2003-98 48,625 50,500
Thrifty Payless Inc 45,000 - 9.25% Mat-10/1/2003-98 47,475 48,712
ARA GRP 38,000 - 8.5% Mat-6/1/2003-98 35,530 39,805
Texas Bottling Group Inc 60,000 - 9% Mat-11/15/2003-98 59,925 60,000
Noble Drilling 50,000 - 9.25% Mat-10/1/2003-98 47,125 52,125
Community Health Systems 55,000 - 10.25% Mat-11/30/2003-98 58,713 59,400
Owens Ill Inc 105,000 - 11% Mat-12/1/2003-99 116,088 118,650
Eckerd Jack Corp 50,000 - 9.25% Mat-2/15/2004-99 51,500 53,187
Corporate Express Inc 35,000 - 9.125% Mat-3/15/2004-99 35,079 32,281
Tenet Healthcare Corporation 45,000 - 10.125% Mat-3/1/2005-00 46,237 49,837
Exide Corp 50,000 - 10% Mat-4/15/2005-00 51,125 54,125
Arcadian Partners LP 40,000 - Ser B 10.75%
Mat-5/1/2005-98 39,450 44,000
Coty Inc 55,000 - 10.25% Mat-5/1/2005-00 58,764 58,300
Genesis Health 30,000 - 9.75% Mat-6/15/2005-00 30,075 31,650
Quorum Health 55,000 - 8.75% Mat-11/1/2005-00 55,894 56,856
Comcast Cp 105,000 - 9.125% Mat-10/15/2006-00 109,463 109,200
---------- ----------
Total Corporate Securities 1,261,267 1,300,524
Guaranteed Interest Contracts:
Principal Financial Group GIC, 8.00%, matures 12/31/95 60,016 60,016
Principal Financial Group GIC, 7.00%, matures 12/31/96 79,764 79,764
Principal Financial Group GIC, 5.50%, matures 12/31/97 82,741 82,741
Principal Financial Group GlC, 6.00%, matures 12/31/98 51,115 51,115
---------- ----------
273,636 273,636
Certificate of Deposit: 6.75%, matures 12/31/98 156,936 156,936
Money Market Fund: 869,334 units 869,334 869,334
Loans to Participants: Participant loans bearing various
dates and interest rates 130,619 130,619
---------- ----------
Total Investments $7,196,139 $8,072,815
========== ==========
</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, 1995
- ----------------------------------------------------------------------------------------------------
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 Column F Column G
Total Total
Identity of Number of Number of Dollar Value Dollar Value Net Gain
Party Involved Description of Assets Purchases Sales of Purchases of Sales or (Loss)
- -------------- --------------------- --------- --------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
First National
Bank of Omaha Money Market Funds 246 277 5,030,971 6,466,885 --
First National 21,566 shares
Bank of Omaha Acceptance Insurance
Companies Inc. 12 -- 319,804 -- --
First National 1,209 shares
Bank of Omaha Acceptance Insurance
Companies Inc. -- 5 -- 347,866 5,099
First National 38,216 shares Society
Bank of Omaha National Bank
Magic Fund 20 -- 396,703 -- --
</TABLE>
EXHIBIT 23
INDEPENDENT AUDITOR'S 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
June 3, 1996, 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, 1995.
/s/ Pfeister & Associates
PFEISTER & ASSOCIATES
Omaha, Nebraska
June 27, 1996
