================================================================================
As filed with the Securities and Exchange Commission on June 26, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 1996
OR
// TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from___________ to __________
Commission File Number 001-12746
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
SECURITY-CONNECTICUT CORPORATION SAVINGS & PROFIT SHARING PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Security-Connecticut Corporation
20 Security Drive
Avon, Connecticut 06001
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<PAGE>
REQUIRED INFORMATION
Security-Connecticut Corporation Savings & Profit Sharing Plan ("Plan") is
subject to the Employee Retirement Income Security Act of 1974 ("ERISA").
Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial
statements and schedules of the Plan for the year ended December 31, 1996 and
1995, which have been prepared in accordance with the financial reporting
requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein
by this reference.
SIGNATURES
The Plan. 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.
Security-Connecticut Corporation Savings & Profit Sharing Plan
--------------------------------------------------------------
(Name of Plan)
/s/ Robert J. Voight
--------------------------------------------------------------
Robert J. Voight
Executive Vice President
June 26, 1997
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<PAGE>
APPENDIX 1
SECURITY-CONNECTICUT CORPORATION SAVINGS & PROFIT SHARING PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996
AND 1995, AND FOR THE YEARS THEN ENDED
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1996
CONSENT OF INDEPENDENT AUDITORS' REPORT
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<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Audited Financial Statements
and Supplemental Schedules
Years ended December 31, 1996 and 1995
Contents
Report of Independent Auditors............................................... 5
Audited Financial Statements
Statements of Net Assets Available for Benefits, by Investment Option........ 6
Statements of Changes in Net Assets Available for Benefits,
by Investment Option......................................................11
Notes to Financial Statements................................................18
Supplemental Schedules
Assets Held for Investment Purposes..........................................27
Reportable Transactions......................................................28
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<PAGE>
Report of Independent Auditors
Retirement Plan Committee
Security-Connecticut Corporation
We have audited the accompanying statements of net assets available for
benefits of the Security-Connecticut Corporation Savings & Profit Sharing Plan
as of December 31, 1996 and 1995, 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 Plan at
December 31, 1996 and 1995, and the changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosures under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The Investment Option
information in the statements of net assets available for benefits and the
statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each Investment
Option account. The supplemental schedules and Investment Option information
have been subjected to the auditing procedures applied in our audit of the
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the financial statements taken as a whole.
Hartford, Connecticut ERNST & YOUNG LLP
June 10, 1997
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<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Net Assets Available for Benefits, by Investment Option
December 31, 1996
Investment Options
<CAPTION>
Fidelity
SCC Fidelity Fidelity Fidelity Investment Fidelity
Common Stock Magellan Contrafund Equity Income Grade Bond Overseas
Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock $5,868,123
Segregated investment accounts $1,466,254 $2,574,342 $1,934,914 $ 536,307 $ 522,335
Participant notes receivable
---------- ---------- ---------- ---------- ---------- ----------
5,868,123 1,466,254 2,574,342 1,934,914 536,307 522,335
---------- ---------- ---------- ---------- ---------- ----------
Cash and invested cash 82,004
Contribution receivable 461,522
Accrued interest receivable 480
Investments receivable 34,536
---------- ---------- ---------- ---------- ---------- ----------
Net assets available for benefits $6,446,665 $1,466,254 $2,574,342 $1,934,914 $ 536,307 $ 522,335
========== ========== ========== ========== ========== ==========
<FN>
See notes to financial statements
</FN>
</TABLE>
-6-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Net Assets Available for Benefits, by Investment Option (continued)
December 31, 1996
Investment Options
<CAPTION>
Fidelity Fidelity
Fidelity Retirement Managed Fidelity U.S.
Asset Manager Money Market Income Equity Index Loan
Account Account Account Account Account Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock $ 5,868,123
Segregated investment accounts $ 533,329 $ 1,087,228 $ 787,896 $ 1,339,892 10,782,497
Participant notes receivable $ 532,601 532,601
----------- ----------- ----------- ----------- ----------- -----------
533,329 1,087,228 787,896 1,339,892 532,601 17,183,221
----------- ----------- ----------- ----------- ----------- -----------
Cash and invested cash 82,004
Contribution receivable 461,522
Accrued interest receivable 480
Investments receivable 34,536
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for benefits $ 533,329 $ 1,087,228 $ 787,896 $ 1,339,892 $ 532,601 $17,761,763
=========== =========== =========== =========== =========== ===========
<FN>
See notes to financial statements
</FN>
</TABLE>
-7-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Net Assets Available for Benefits, by Investment Option
December 31, 1995
Investment Options
<CAPTION>
SCC LNC Small Medium Large
Common Common Int'l Cap Cap Cap Core Value
Stock Stock Equity Equity Equity Equity Equity Equity
Account Account Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock $3,071,282 $3,370,125
Segregated investment accounts $ 22,904 $ 89,162 $ 991,678 $ 506,214 $1,016,316 $ 21,671
Unallocated insurance contract
Participant notes receivable
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
3,071,282 3,370,125 22,904 89,162 991,678 506,214 1,016,316 21,671
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Cash and invested cash 184,347 35,152
Accrued interest receivable 792 188
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets available for benefits $3,256,421 $3,405,465 $ 22,904 $ 89,162 $ 991,678 $ 506,214 $1,016,316 $ 21,671
========== ========== ========== ========== ========== ========== ========== ==========
<FN>
See notes to financial statements
</FN>
</TABLE>
-8-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Net Assets Available for Benefits, by Investment Option (continued)
December 31, 1995
Investment Options
<CAPTION>
High Government/ T. Rowe Price
Yield Corporate Government Short International Strong Fidelity
Bond Bond Bond Term Equity Discovery Contrafund Janus
Account Account Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock
Segregated investment accounts $ 4,639 $ 194,884 $ 196,976 $ 398,603 $ 35,774 $ 59,052 $ 70,430 $ 36,131
Unallocated insurance contract
Participant notes receivable
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
4,639 194,884 196,976 398,603 35,774 59,052 70,430 36,131
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Cash and invested cash
Accrued interest receivable
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets available for benefits $ 4,639 $ 194,884 $ 196,976 $ 398,603 $ 35,774 $ 59,052 $ 70,430 $ 36,131
========== ========== ========== ========== ========== ========== ========== ==========
<FN>
See notes to financial statements
</FN>
</TABLE>
-9-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Net Assets Available for Benefits, by Investment Option (continued)
December 31, 1995
Investment Options
<CAPTION>
Fidelity
Asset Aggressive Conservative
Manager Balanced Balanced Balanced Guaranteed Loan
Account Account Account Account Account Account Total
---------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock $ 6,441,407
Segregated investment accounts $ 4,191 $ 18,269 $ 23,306 $ 2,053 3,692,253
Unallocated insurance contract $3,054,562 3,054,562
Participant notes receivable $ 464,377 464,377
---------- ---------- ---------- ---------- ---------- ---------- -----------
4,191 18,269 23,306 2,053 3,054,562 464,377 13,652,599
---------- ---------- ---------- ---------- ---------- ---------- -----------
Cash and invested cash 219,499
Accrued interest receivable 980
---------- ---------- ---------- ---------- ---------- ---------- -----------
Net assets available for benefits $ 4,191 $ 18,269 $ 23,306 $ 2,053 $3,054,562 $ 464,377 $13,873,078
========== ========== ========== ========== ========== ========== ===========
<FN>
See notes to financial statements
</FN>
</TABLE>
-10-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits, by Investment Option
Year Ended December 31, 1996
Investment Options
<CAPTION>
SCC LNC Small Medium Large
Common Common Int'l Cap Cap Cap Core Value
Stock Stock Equity Equity Equity Equity Equity Equity
Account Account Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants $ 135,737 $ 3,338 $ 4,783 $ 61,003 $ 34,930 $ 56,067 $ 4,211
Employer 633,197
Rollovers 1,943 563
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total contributions 770,877 3,338 4,783 61,003 34,930 56,630 4,211
Investment income 72,333 $ 58,396
Net realized and unrealized
appreciation (depreciation) in
fair value of investments 1,395,983 (503,894) 4,039 1,665 130,109 52,784 108,539 1,460
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total additions 2,239,193 (445,498) 7,377 6,448 191,112 87,714 165,169 5,671
Deductions from net assets attributed to:
Distributions to participants 52,389 202,466 21 15,811 17,408 52,859
Administrative expenses 358
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total deductions 52,747 202,466 21 15,811 17,408 52,859
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) prior to
interfund transfers 2,186,446 (647,964) 7,377 6,427 175,301 70,306 112,310 5,671
Interfund transfers (net) 1,003,798 (2,757,501) (30,281) (95,589)(1,166,979) (576,520)(1,128,626) (27,342)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) 3,190,244 (3,405,465) (22,904) (89,162) (991,678) (506,214)(1,016,316) (21,671)
Net assets available for benefits
Beginning of year 3,256,421 3,405,465 22,904 89,162 991,678 506,214 1,016,316 21,671
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
End of year $6,446,665 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
========== ========== ========== ========= ========== ========== ========== ==========
<FN>
See notes to financial statements
</FN>
</TABLE>
-11-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits, by Investment Option
(continued)
Year Ended December 31, 1996
Investment Options
<CAPTION>
High Government/ T. Rowe Price
Yield Corporate Government Short International Strong Fidelity
Bond Bond Bond Term Equity Discovery Contrafund Janus
Account Account Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants $ 936 $ 15,143 $ 13,973 $ 4,442 $ 5,384 $ 3,751 $ 19,199 $ 8,934
Employer
Rollovers 563 1,125 562 644
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total contributions 936 15,706 15,098 5,004 5,384 3,751 19,199 9,578
Investment income
Net realized and unrealized
appreciation (depreciation) in
fair value of investments 65 (5,789) (40) 8,804 4,615 205 6,315 5,007
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total additions 1,001 9,917 15,058 13,808 9,999 3,956 25,514 14,585
Deductions from net assets attributed to:
Distributions to participants 1,016 846 1,198 11 79
Administrative expenses
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total deductions 1,016 846 1,198 11 79
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) prior to
interfund transfers 1,001 8,901 14,212 12,610 9,988 3,956 25,435 14,585
Interfund transfers (net) (5,640) (203,785) (211,188) (411,213) (45,762) (63,008) (95,865) (50,716)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) (4,639) (194,884) (196,976) (398,603) (35,774) (59,052) (70,430) (36,131)
Net assets available for benefits
Beginning of year 4,639 194,884 196,976 398,603 35,774 59,052 70,430 36,131
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
End of year $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
========== ========== ========== ========== ========== ========== ========== ==========
<FN>
See notes to financial statements
</FN>
</TABLE>
-12-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits, by Investment Option
(continued)
Year Ended December 31, 1996
Investment Options
<CAPTION>
Fidelity
Asset Aggressive Conservative Fidelity Fidelity Fidelity
Manager Balanced Balanced Balanced Guaranteed Magellan Contrafund Equity Income
Account Account Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants $ 4,542 $ 3,972 $ 3,548 $ 491 $ 129,214 $ 62,002 $ 113,304 $ 80,598
Employer
Rollovers 644 2,812 5,454 7,062 4,857
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total contributions 4,542 4,616 3,548 491 132,026 67,456 120,366 85,455
Investment income 100,253 14,542 114,692 85,206
Net realized and unrealized
appreciation (depreciation) in
fair value of investments 451 1,214 1,111 34 182,798 284,929 194,795
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total additions 4,993 5,830 4,659 525 232,279 264,796 519,987 365,456
Deductions from net assets attributed to:
Distributions to participants 13 49,761 7,870 9,518 48,209
Administrative expenses 210 437 1,124
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total deductions 13 49,761 8,080 9,955 49,333
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) prior to
interfund transfers 4,980 5,830 4,659 525 182,518 256,716 510,032 316,123
Interfund transfers (net) (9,171) (24,099) (27,965) (2,578)(3,237,080) 1,209,538 2,064,310 1,618,791
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) (4,191) (18,269) (23,306) (2,053)(3,054,562) 1,466,254 2,574,342 1,934,914
Net assets available for benefits
Beginning of year 4,191 18,269 23,306 2,053 3,054,562 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
End of year $ 0 $ 0 $ 0 $ 0 $ 0 $1,466,254 $2,574,342 $1,934,914
========== ========== ========== ========== ========== ========== ========== ==========
<FN>
See notes to financial statements
</FN>
</TABLE>
-13-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits, by Investment Option
(continued)
Year Ended December 31, 1996
Investment Options
<CAPTION>
Fidelity Fidelity Fidelity Fidelity Fidelity
Investment Fidelity Asset Retirement Managed U.S.Equity
Grade Bond Overseas Manager Money Market Income Index Loan
Account Account Account Account Account Account Account Total
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants $ 28,817 $ 21,814 $ 32,950 $ 24,692 $ 33,380 $ 60,485 $ 971,640
Employer 633,197
Rollovers 6,543 2,579 35,351
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total contributions 28,817 21,814 32,950 24,692 39,923 63,064 1,640,188
Investment income 16,224 29,692 35,534 27,725 20,673 21,738 $ 51,879 648,887
Net realized and unrealized
appreciation (depreciation) in
fair value of investments 7,836 7,822 17,767 186,539 2,095,163
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total additions 52,877 59,328 86,251 52,417 60,596 271,341 51,879 4,384,238
Deductions from net assets attributed to:
Distributions to participants 78 197 12,769 64 243 15,528 488,354
Administrative expenses 1,066 31 808 1,601 1,171 393 7,199
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total deductions 1,144 31 1,005 14,370 1,235 636 15,528 495,553
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase (decrease) prior to
interfund transfers 51,733 59,297 85,246 38,047 59,361 270,705 36,351 3,888,685
Interfund transfers (net) 484,574 463,038 448,083 1,049,181 728,535 1,069,187 31,873
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase (decrease) 536,307 522,335 533,329 1,087,228 787,896 1,339,892 68,224 3,888,685
Net assets available for benefits
Beginning of year 0 0 0 0 0 0 464,377 13,873,078
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
End of year $ 536,307 $ 522,335 $ 533,329 $1,087,228 $ 787,896 $1,339,892 $ 532,601 $17,761,763
========== ========== ========== ========== ========== ========== ========== ===========
<FN>
See notes to financial statements
</FN>
</TABLE>
-14-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits, by Investment Option
Year Ended December 31, 1995
Investment Options
<CAPTION>
SCC LNC Small Medium Large
Common Common International Cap Cap Cap Core Value
Stock Stock Equity Equity Equity Equity Equity Equity
Account Account Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants $ 130,065 $ 3,096 $ 3,965 $ 114,298 $ 61,220 $ 102,856 $ 3,748
Employer 146,799
Rollovers 9,497 4,622 3,094 8,194 7,713 9,542 7,814
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total contributions 286,361 7,718 7,059 122,492 68,933 112,398 11,562
Investment income 54,242 $ 126,664
Net realized and unrealized
appreciation in fair value
of investments 426,411 1,278,873 807 3,631 220,504 91,255 277,824 2,770
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total additions 767,014 1,405,537 8,525 10,690 342,996 160,188 390,222 14,332
Deductions from net assets attributed to:
Distributions to participants 28,135 142,856 10,637 5,671 82,958
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total deductions 28,135 142,856 10,637 5,671 82,958
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase prior to interfund
transfers 738,879 1,262,681 8,525 10,690 332,359 154,517 307,264 14,332
Interfund transfers (net) 123,293 (482,400) 14,379 78,472 17,027 85,479 979 7,339
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase 862,172 780,281 22,904 89,162 349,386 239,996 308,243 21,671
Net assets available for benefits
Beginning of period 2,394,249 2,625,184 0 0 642,292 266,218 708,073 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
End of year $3,256,421 $3,405,465 $ 22,904 $ 89,162 $ 991,678 $ 506,214 $1,016,316 $ 21,671
========== ========== ========== ========== ========== ========== ========== ===========
<FN>
See notes to financial statements
</FN>
</TABLE>
-15-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits, by Investment Option
(continued)
Year Ended December 31, 1995
Investment Options
<CAPTION>
High Government/ T. Rowe Price
Yield Corporate Government Short International Strong Fidelity
Bond Bond Bond Term Equity Discovery Contrafund Janus
Account Account Account Account Account Account Account Account
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants $ 317 $ 33,872 $ 27,561 $ 14,702 $ 4,627 $ 2,387 $ 12,005 $ 4,360
Employer
Rollovers 4,046 8,902 2,246 3,094 4,799 6,271 25,572
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total contributions 4,363 42,774 29,807 14,702 7,721 7,186 18,276 29,932
Investment income
Net realized and unrealized
appreciation in fair value
of investments 276 29,700 21,685 21,334 1,882 5,229 6,876 2,464
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total additions 4,639 72,474 51,492 36,036 9,603 12,415 25,152 32,396
Deductions from net assets attributed to:
Distributions to participants 4,597 350 12,076
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total deductions 4,597 350 12,076
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase prior to interfund
transfers 4,639 67,877 51,142 23,960 9,603 12,415 25,152 32,396
Interfund transfers (net) 2,509 5,947 34,222 26,171 46,637 45,278 3,735
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase 4,639 70,386 57,089 58,182 35,774 59,052 70,430 36,131
Net assets available for benefits
Beginning of period 0 124,498 139,887 340,421 0 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
End of year $ 4,639 $ 194,884 $ 196,976 $ 398,603 $ 35,774 $ 59,052 $ 70,430 $ 36,131
========== ========== ========== ========== ========== ========== ========== ===========
<FN>
See notes to financial statements
</FN>
</TABLE>
-16-
<PAGE>
<TABLE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits, by Investment Option
(continued)
Year Ended December 31, 1995
Investment Options
Fidelity
Asset Aggressive Conservative
Manager Balanced Balanced Balanced Guaranteed Loan
Account Account Account Account Account Account Total
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Participants $ 3,632 $ 2,323 $ 3,370 $ 559 $ 268,605 $ 797,568
Employer 146,799
Rollovers 14,475 66,481 186,362
---------- ---------- ---------- ---------- ---------- ---------- -----------
Total contributions 3,632 16,798 3,370 559 335,086 1,130,729
Investment income 193,286 $ 37,100 411,292
Net realized and unrealized
appreciation in fair value
of investments 176 1,471 2,477 33 2,395,678
---------- ---------- ---------- ---------- ---------- ---------- -----------
Total additions 3,808 18,269 5,847 592 528,372 37,100 3,937,699
Deductions from net assets attributed to:
Distributions to participants 139,638 11,533 438,451
---------- ---------- ---------- ---------- ---------- ---------- -----------
Total deductions 139,638 11,533 438,451
---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase prior to interfund
transfers 3,808 18,269 5,847 592 388,734 25,567 3,499,248
Interfund transfers (net) 383 17,459 1,461 (42,032) 13,662
---------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase 4,191 18,269 23,306 2,053 346,702 39,229 3,499,248
Net assets available for benefits
Beginning of period 2,707,860 425,148 10,373,830
---------- ---------- ---------- ---------- ---------- ---------- -----------
End of year $ 4,191 $ 18,269 $ 23,306 $ 2,053 $3,054,562 $ 464,377 $13,873,078
========== ========== ========== ========== ========== ========== ===========
<FN>
See notes to financial statements
</FN>
</TABLE>
-17-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements
Note 1. Description of Plan
The Security-Connecticut Corporation Savings & Profit Sharing Plan (the
"Plan") was established by Security-Connecticut Corporation (the "Company" or
"SCC") for the benefit of its eligible employees.
Effective July 1, 1996, the administration of the Plan was changed from The
Lincoln National Life Insurance Company ("LNL") to Fidelity Institutional
Retirement Services Company ("Fidelity"). The Plan's Trustee was changed from
Norwest Bank Fort Wayne, N.A. to Fidelity Management Trust Company (the "Trust
Company") at the same time. As a result of the transition to Fidelity, all Plan
assets, except for amounts held in the SCC Common Stock Account, were liquidated
into cash. Amounts liquidated into cash were transferred to the Fidelity
Retirement Money Market Account and then allocated to the various investment
options based on the participants' investment direction.
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 Plan is a contributory defined contribution plan covering all employees
of the Company and its subsidiaries who have at least six months of service and
are age twenty-one or older. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute 1% to 15% of compensation, as
defined in the Plan up to a maximum of $9,500 in 1996 and $9,240 in 1995.
However, the compensation of a participant taken into account for the Plan could
not exceed $150,000 in 1996 or 1995. As of July 1, 1996, participants are not
allowed to make after-tax contributions to the Plan. Participants are also
permitted to make cash rollover contributions or direct transfers to the Plan
from other qualified plans in which they participated.
Under the Plan, participants are eligible for matching contributions after
completion of one year of service. The Company contributes and allocates to each
participant's matching contribution account an amount equal to 25% of
participant elective contributions which do not exceed 6% of base compensation
per payroll period. Matching contributions are made in SCC common stock.
Additional matching contributions, based upon a percentage of participant
elective contributions, up to 6% of the participant's base compensation per
payroll period, may be made solely based upon the profitability of the Company
as determined by the board of directors each plan year. The participant must be
an employee as of the last day of the Plan year to receive any additional
matching contributions. The sum of employee and Company contributions for a plan
year may not exceed the lesser of $30,000 or 25% of compensation.
-18-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 1. Description of Plan (continued)
Participants Accounts
Each participant's account is credited with the participant's contributions
and allocations of the Company's contributions and the selected investment
option account's earnings. Allocations are based on investment option earnings
or account balances, as defined in the Plan. Forfeited balances of terminated
participants' nonvested accounts were used to reduce the Company's contribution
for the current plan year until June 30, 1996. As of July 1, 1996, forfeited
balances are applied first to plan expenses, then to the Company's
contributions. As of December 31, 1996 and 1995, net assets available for plan
benefits included $1,994,257 and $579,161, respectively, for participants who
have terminated from the plan, but have not withdrawn their vested account
balances.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company contribution portion of participants'
accounts plus actual earnings thereon is based on vesting years of service. Upon
termination of employment prior to age 55, a participant would be 50% vested
after having credit for two vesting years of service, and 100% vested after
three or more vesting years of service. As used in the Plan, a vesting year of
service is any completed twelve month period of service with the Company.
The account of each participant shall be fully vested upon attainment of
normal retirement age. As used in the Plan, normal retirement age is 55. If a
participant becomes disabled, that participant shall be entitled to be 100%
vested in the participant's account. If a participant dies while employed by the
Company, the participant's account shall be fully vested and the beneficiary
shall receive a death benefit equal to the value of the account.
Investment Options
Until June 30, 1996, the Plan trustee (Norwest Bank Fort Wayne, N.A.) held
a group annuity contract issued by LNL for the benefit of the Plan which
provided for contributions to and investments in LNL segregated investment
accounts whose objectives were the same as those described below. As of July 1,
1996, all monies are invested in mutual funds of Fidelity Management Trust
Company or the SCC Common Stock Account. Participants are entitled to direct the
investment of their accounts. Until June 30, 1996, matching contributions could
only be invested in the SCC Common Stock Account. As of July 1, 1996,
participants are entitled to move matching contributions to any investment
option they choose.
Until June 30, 1996, a participant was permitted to direct contributions in
1% increments to any of the following investment options:
SCC Common Stock Account - invests primarily in shares of Security-Connecticut
Corporation Common Stock.
-19-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 1. Description of Plan (continued)
Investment Options (continued)
LNC Common Stock Account - invests in Lincoln National Corporation Common Stock.
No current or future contributions or transfers into this account are permitted,
although participants may transfer their prior investment out of this account.
International Equity Account - invests in stocks of non-United States Companies.
The portfolio is well diversified to control risk and is not highly traded.
Small Capitalization Equity Account - invests in the stocks of small companies
which have the potential to grow rapidly and produce superior returns. Small
capitalization companies generally are those between $100 million and $600
million in market capitalization.
Medium Capitalization Equity Account - invests in the common stock of
medium-sized companies with strong financial characteristics.
Large Capitalization Equity Account - invests in the common stocks of large
companies which have the potential for a significant appreciation in value over
an 18-24 month period.
Core Equity Account - invests in the common stock and securities convertible
into common stock of established companies and broadly diversifies them to
control risk.
Value Equity Account - invests in large capitalization stocks of undervalued
companies which are leaders in their industries.
High Yield Bond Account - invests in below-investment-grade bonds. These are
bonds with a debt rating below BBB by Moody's or Baa by Standard & Poor's.
Government/Corporate Bond Account - invests in medium-term to long-term
corporate and government bonds.
Government Bond Account - invests in fixed income securities issued by the
United States government.
Short Term Account - invests in notes of government agencies and private
corporations.
T. Rowe Price International Equity Account - invests exclusively in the T. Rowe
Price International Stock Fund, a mutual fund which invests primarily in common
stocks of established non-U.S. companies having the potential for growth of
capital.
Strong Discovery Account - invests exclusively in the Strong Discovery Fund, a
mutual fund which invests primarily in common stocks, emphasizing smaller
companies with favorable prospects for earnings growth. The Fund may also invest
in foreign securities, warrants and corporate or government debt.
Fidelity Contrafund Account - invests exclusively in Fidelity Contrafund, a
mutual fund that invests in undervalued stocks of medium-sized and smaller
companies not currently favored by the public, but which show a potential for
capital appreciation. These include both well-known and lesser-known companies.
-20-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 1. Description of Plan (continued)
Investment Options (continued)
Janus Account - purchases shares of the Janus Fund, a mutual fund which invests
primarily in common stocks of companies experiencing favorable demand for their
products and services.
Fidelity Asset Manager Account - invests exclusively in Fidelity Asset Manager,
a mutual fund that invests in three different asset classes: stocks, bonds and
short-term, fixed-income instruments. The percentage of assets in each class is
adjusted periodically as changing market and economic conditions warrant.
Aggressive Balanced Account - invests in three different asset classes: stocks,
bonds and money-market instruments. Within each asset class, the accounts invest
primarily in Lincoln National Life Insurance Company's separate accounts. The
Aggressive Balanced Account places an emphasis on common stocks, both domestic
and international.
Balanced Account - invests in three different asset classes: stocks, bonds and
money-market instruments. Within each asset class, the accounts invest primarily
in Lincoln National Life Insurance Company's separate accounts.
Conservative Balanced Account - invests in three different asset classes:
stocks, bonds and money-market instruments. Within each asset class, the
accounts invest primarily in Lincoln National Life Insurance Company's separate
accounts.
Guaranteed Account - invests in high-quality bonds and mortgages and guarantees
principal and a minimum rate of interest.
Beginning July 1, 1996, a participant may direct contributions in 1%
increments in any of the following investment options:
SCC Common Stock Account - invests primarily in shares of Security-Connecticut
Corporation Common Stock.
Fidelity Magellan Account - invests in equity securities, which include
common stocks, preferred stocks, convertible securities and warrants, and debt
securities consisting of bonds and other debt instruments.
Fidelity Contrafund Account - invests exclusively in Fidelity Contrafund, a
mutual fund that invests in undervalued stocks of medium-sized and smaller
companies not currently favored by the public, but which show a potential for
capital appreciation. These include both well-known and lesser-known companies.
Fidelity Equity Income Account - invests at least 65% of total assets in income
producing common or preferred stocks. A significant portion of the balance of
the portfolio will generally be invested in debt obligations. Up to 20% of the
portfolio may be invested in high yield, below investment grade bonds.
Fidelity Investment Grade Bond Account - invests up to 65% of total assets in
investment grade quality debt securities, including bonds, notes, convertible
bonds, mortgage-backed and asset backed securities, securities issued or
guaranteed by the U.S. government or foreign governments, zero coupon bonds and
short term obligations. The fund may invest up to 35% of total assets in
lower-rated, high-yield debt securities, and may invest in preferred stocks.
-21-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 1. Description of Plan (continued)
Investment Options (continued)
Fidelity Overseas Account - invests at least 65% of its total assets in
securities of issuers from at least three different countries outside of North
America. While the fund generally invests a majority of its assets in equity
securities, it may also invest in debt securities of any quality.
Fidelity Asset Manager Account - invests exclusively in Fidelity Asset Manager,
a mutual fund that invests in three different asset classes: stocks, bonds and
short-term, fixed-income instruments. The percentage of assets in each class is
adjusted periodically as changing market and economic conditions warrant.
Fidelity Retirement Money Market Account - invests in money-market,
dollar-denominated investments of U.S. and foreign issuers. Average maturity of
the fund is 90 days.
Fidelity Managed Income Account - is an open-end commingled pool sponsored by
the Trust Company. It invests in a portfolio of short and long-term conventional
and synthetic investment contracts issued by insurance companies and other
institutions that meet the credit quality standards established by the Trust
Company.
Fidelity U.S. Equity Index Account - includes common stock of those companies
included in the S&P 500 as may from time to time, on the basis of
computer-generated statistical data, be deemed representative of the industry
diversification of the entire S&P 500.
Participant Notes Receivable
Loans are available to all participants and beneficiaries on a reasonably
equivalent basis. Loans are not available to highly compensated individuals, as
defined in Section 414(q) of the Internal Revenue Code, in an amount greater
than the amount made available to other participants. Participants may borrow
from their accounts a minimum of $1,000 up to a maximum of the lesser of (a)
$50,000, or (b) one-half of their vested account balance. The $50,000 maximum is
reduced by the highest outstanding balance in the previous 12 months. Loan
transactions are treated as a transfer from (to) the investment account to
(from) the loan account. Loan terms range from 1-5 years or up to 10 years for
the purchase of a primary residence. The loans are secured by one-half of the
vested balance in the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined by the Plan
administrator. In 1996, interest rates charged on loans from the Plan ranged
from 6.5% to 11.0%. Principal and interest is paid ratably through bimonthly
payroll deductions.
Payment of Benefits
On termination of service, a participant may receive a lump-sum amount
equal to the vested value of his or her account. A participant with a vested
account balance of less than $3,500 must receive a lump sum payment upon
termination. On retirement, disability, or death, distributions from the Plan
will be made in the form of a single lump-sum payment in cash, except that
amounts held in the SCC Common Stock Account shall be made in cash and whole
shares unless the participant elects to receive cash in lieu of shares, or in a
series of installments over a period not exceeding the life expectancy of the
participant, or the participant's beneficiary.
-22-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 2. Summary of Accounting Policies
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value on the basis of (1) the
closing price on an exchange on which such securities are listed, (2) the
average bid quotations of such securities, (3) quotations from other sources
deemed by the Security-Connecticut Corporation Retirement Plan Committee to be
reliable as fairly reflecting the market price or redemption price of the
securities, (4) the value as reported by an insurance company with respect to a
segregated investment account in which the Plan invests, or (5) the average sale
or purchase price of the securities when the Trustee is required to sell or
purchase securities on the open market to comply with the requests of employees.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on an accrual basis. Dividends are recorded on the
ex-dividend date.
The unallocated insurance contract is valued at contract value as estimated
by LNL. Contract values represent net contributions made under the contract plus
interest at the contract rate.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of net assets available for benefits
as of the date of the financial statements, and that affect the reported amounts
of changes in net assets available for benefits during the reporting period.
Actual results could differ from these estimates.
Note 3. Investments
The Plan's investments in the SCC Common Stock Account were held by a bank
administered trust fund until June 30, 1996. The trustee also held a group
annuity contract issued by LNL. The annuity contract provided for participant
contributions to the LNL segregated investment accounts, as described in Note 1.
As of July 1, 1996 all investments were transferred to and are being held by the
Trust Company.
For the years ended December 31, 1996 and 1995, the Plan's investments
(including investments bought, sold, and held during the year) appreciated in
value by $2,095,163 and $2,395,678, respectively, as follows:
<TABLE>
<CAPTION>
Net Appreciation
(Depreciation)
in Fair Value Fair Value
During the Period at End of Year
----------------- --------------
Year ended December 31, 1996:
Investments at fair value as determined by quoted market price:
<S> <C> <C>
Common Stock:
SCC Common Stock Account, 167,064 shares $ 1,395,983 $ 5,868,123
LNC Common Stock Account, 0 shares (503,894) 0
-------------- -------------
892,089 5,868,123
</TABLE>
-23-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 3. Investments (continued)
<TABLE>
<CAPTION>
Net Appreciation
(Depreciation)
in Fair Value Fair Value
During the Period at End of Year
----------------- --------------
<S> <C> <C>
Investments at fair value as determined by redemption price:
Segregated Investment Accounts:
Lincoln National Life Insurance Company Separate Accounts:
International Equity Account (0 units) 4,039 0
Small Capitalization Equity Account (0 units) 1,665 0
Medium Capitalization Equity Account (0 units) 130,109 0
Large Capitalization Equity Account (0 units) 52,784 0
Core Equity Account (0 units) 108,539 0
Value Equity Account (0 units) 1,460 0
High Yield Bond Account (0 units) 65 0
Government/Corporate Bond Account (0 units) (5,789) 0
Government Bond Account (0 units) (40) 0
Short Term Account (0 units) 8,804 0
-------------- -------------
301,636 0
Mutual Fund Investments:
T. Rowe Price International Equity Account (0 units) 4,615 0
Strong Discovery Account (0 units) 205 0
Fidelity Contrafund Account (0 units) 6,315 0
Janus Account (0 units) 5,007 0
Fidelity Asset Manager Account (0 units) 451 0
Fidelity Magellan Account (18,180.453 units) 182,798 1,466,254
Fidelity Contrafund Account (61,075.729 units) 284,929 2,574,342
Fidelity Equity Income Account (45,176.618 units) 194,795 1,934,914
Fidelity Investment Grade Bond Account (75,324.039 units) 7,836 536,307
Fidelity Overseas Account (16,936.927 units) 7,822 522,335
Fidelity Asset Manager Account (32381.833 units) 17,767 533,329
Fidelity Retirement Money Market Account (1,087,228.270 units) 1,087,228
Fidelity Managed Income Account (787,896.120 units) 787,896
Fidelity U.S. Equity Index Account (49,717.708 units) 186,539 1,339,892
--------------- -------------
899,079 10,782,497
Diversified Investments:
Aggressive Balanced Account (0 units) 1,214 0
Balanced Account (0 units) 1,111 0
Conservative Balanced Account (0 units) 34 0
-------------- -------------
2,359 0
Investments at Estimated Fair Value:
Participant loans receivable 532,601
-------------- -------------
Total investments $ 2,095,163 $ 17,183,221
============== =============
</TABLE>
-24-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 3. Investments (continued)
<TABLE>
<CAPTION>
Net Appreciation
in Fair Value Fair Value
During the Year at End of Year
--------------- --------------
Year ended December 31, 1995:
Investments at fair value as determined by quoted market price:
<S> <C> <C>
Common Stock:
SCC Common Stock Account, 113,227 shares $ 426,411 $ 3,071,282
LNC Common Stock Account, 62,700 shares 1,278,873 3,370,125
-------------- -------------
1,705,284 6,441,407
Investments at fair value as determined by redemption price:
Segregated Investment Accounts:
Lincoln National Life Insurance Company Separate Accounts:
International Equity Account (4,995.389 units) 807 22,904
Small Capitalization Equity Account (29,056.758 units) 3,631 89,162
Medium Capitalization Equity Account (126,681.745 units) 220,504 991,678
Large Capitalization Equity Account (105,697.285 units) 91,255 506,214
Core Equity Account (147,901.055 units) 277,824 1,016,316
Value Equity Account (15,982.436 units) 2,770 21,671
High Yield Bond Account (2,469.985 units) 276 4,639
Government/Corporate Bond Account (40,564.655 units) 29,700 194,884
Government Bond Account (136,070.926 units) 21,685 196,976
Short Term Account (152,109.463 units) 21,334 398,603
-------------- -------------
669,786 3,443,047
Mutual Fund Investments:
T. Rowe Price International Equity Account (32,130.382 units) 1,882 35,774
Strong Discovery Account (41,208,394 units) 5,229 59,052
Fidelity Contrafund Account (50,386.898 units) 6,876 70,430
Janus Account (27,340.156 units) 2,464 36,131
Fidelity Asset Manager Account (3,614.445 units) 176 4,191
-------------- -------------
16,627 205,578
Diversified Investments:
Aggressive Balanced Account (14,893.615 units) 1,471 18,269
Balanced Account (5,847.281 units) 2,477 23,306
Conservative Balanced Account (1,743.085 units) 33 2,053
-------------- -------------
3,981 43,628
Contract value as estimated by The Lincoln National
Life Insurance Company:
Unallocated insurance contracts 3,054,562
Investments at estimated fair value:
Participant loans receivable 464,377
Total investments $ 2,395,678 $ 13,652,599
============== =============
</TABLE>
-25-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Notes to Financial Statements (continued)
Note 3. Investments (continued)
The fair value of individual investments that represent 5% or more of the Plan's
assets is as follows:
December 31,
1996 1995
-------------- -------------
SCC Common Stock $ 5,868,123 $ 3,071,282
LNC Common Stock 3,370,125
Lincoln National Life Insurance Company
Separate Accounts:
Medium Capitalization Equity Account 991,678
Core Equity Account 1,016,316
Unallocated insurance contract with
The Lincoln National Life Insurance Company 3,054,562
Fidelity Mutual Fund Investments:
Magellan Account 1,466,254
Contrafund Account 2,574,342
Equity Income Account 1,934,914
Retirement Money Market Account 1,087,228
U.S. Equity Index Account 1,339,892
Note 4. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become fully vested in their accounts and shall
not be subject to forfeiture.
Note 5. Income Tax Status
The Internal Revenue Service has determined that the Plan qualifies under
Section 401(a) of the Internal Revenue Code (IRC) and, therefore, is not subject
to tax under the present income tax laws. Once qualified, the Plan is required
to operate in conformity with the IRC to maintain it's qualification. The Plan's
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
Note 6. Transactions with Parties-In-Interest
All common stock and short-term cash investments of the Plan were held by
Norwest Bank Fort Wayne, N.A. until June 30, 1996. All other investments of the
Plan were held by The Lincoln National Life Insurance Company until June 30,
1996. As of July 1, 1996, all investments are held by Fidelity Management Trust
Company. Until June 30, 1996, investment management fees incurred for the SCC
and LNC Common Stock Funds were paid by the Company while all investment
management fees for the other investment options were charged directly to
earnings of the accounts based upon the market value of the respective
investment options. As of July 1, 1996, all investment management and trustee
fees are charged directly to earnings of the accounts based upon the market
value of the respective investment option. All other administrative expenses for
the Plan are paid by the Company.
Note 7. Subsequent Events
On February 23, 1997, SCC signed a definitive agreement with ReliaStar
Financial Corp. ("ReliaStar") to combine the two companies through the statutory
merger of SCC with and into ReliaStar. The Board of Directors of SCC has
unanimously approved the merger. Completion of the merger is subject to normal
closing conditions, including approval by the Insurance Department of New York
State, and by SCC's shareholders at a special meeting scheduled for June 24,
1997.
-26-
<PAGE>
Security-Connecticut Corporation
Savings & Profit Sharing Plan
Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
Description of
Investment Including
Maturity Date,
Identity of Issue, Borrower, Rate of Interest, Par or
Lessor or Similar Party Maturity Value Cost Fair Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock-
Security-Connecticut Corporation 167,064 shares $ 4,120,470 $ 5,868,123
Mutual Fund Investments:
Fidelity Magellan Account 18,180.453 units 1,290,879 1,466,254
Fidelity Contrafund Account 61,075.729 units 2,314,393 2,574,342
Fidelity Equity Income Account 45,176.618 units 1,754,250 1,934,914
Fidelity Investment Grade Bond Account 75,324.039 units 528,639 536,307
Fidelity Overseas Account 16,936.927 units 515,797 522,335
Fidelity Asset Manager Account 32,381.833 units 516,799 533,329
Fidelity Retirement Money Market Account 1,087,228.270 units 1,087,228 1,087,228
Fidelity Managed Income Account 787,896.120 units 787,896 787,896
Fidelity U.S. Equity Index Account 49,717.708 units 1,161,941 1,339,892
----------- -----------
9,957,822 16,650,620
Participant loans Various loans at interest
rates varying from 6.5%
to 11.0%, due from
1997 to 2005 532,601 532,601
----------- -----------
$14,610,893 $17,183,221
=========== ===========
</TABLE>
-27-
<PAGE>
<TABLE>
<CAPTION>
Security-Connecticut Corporation Savings & Profit Sharing Plan
Reportable Transactions
Year Ended December 31, 1996
Fair Value
of Assets on
Number of Total Total Transaction Net
Identity of Party Involved Description of Asset Transactions Purchase Price Selling Price Date Gain(Loss)
- -------------------------- -------------------- ------------ -------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Category (i) - individual transactions in excess of 5 percent of plan assets
* Norwest Bank Norwest Short Term Investment Fund
Fort Wayne, N.A. Purchase 1 $ 828,431 $ 828,431
Sale 1 $ 854,288 854,288
Category (iii) - series of transactions in excess of 5 percent of plan assets
* Norwest Bank Security-Connecticut Corporation
Fort Wayne, N.A. Common Stock
Purchases; 26,712 shares 7 718,225 718,225
Sales; 275 shares 1 8,044 8,044 $ 1,667
* Norwest Bank Lincoln National Corporation
Fort Wayne, N.A. Common Stock
Sales; 62,700 shares 17 2,906,696 2,906,696 492,498
* Norwest Bank Norwest Short Term Investment Fund
Fort Wayne, N.A. Purchases 45 1,602,480 1,602,480
Sales 39 1,715,384 1,715,384
* The Lincoln National Life Core Equity Account
Insurance Company Purchases * * 75,830 75,830
Sales * * 1,200,685 1,200,685 108,539
* The Lincoln National Life Short Term Account
Insurance Company Purchases * * 213,641 213,641
Sales * * 621,046 621,046 8,804
* The Lincoln National Life Medium Capitalization Equity Account
Insurance Company Purchases * * 103,116 103,116
Sales * * 1,224,903 1,224,903 130,109
</TABLE>
-28-
<PAGE>
<TABLE>
<CAPTION>
Security-Connecticut Corporation Savings & Profit Sharing Plan
Reportable Transactions
Year Ended December 31, 1996
Fair Value
of Assets on
Number of Total Total Transaction Net
Identity of Party Involved Description of Asset Transactions Purchase Price Selling Price Date Gain(Loss)
- -------------------------- -------------------- ------------ -------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - series of transactions in excess of 5 percent of plan assets (continued)
* The Lincoln National Life Large Capitalization Equity Account
Insurance Company Purchases * * 61,083 61,083
Sales * * 620,080 620,080 52,784
* The Lincoln National Life Unallocated Insurance Contract
Insurance Company The Lincoln National Life Insurance Company
Purchases * * 474,189 474,189
Sales * * 3,629,056 3,629,056 101,427
* Fidelity Institutional Magellan Account
Retirement Services Purchases 41 1,359,107 1,359,107
Company Sales 18 75,651 75,651 7,424
* Fidelity Institutional Contrafund Account
Retirement Services Purchases 47 2,534,192 2,534,192
Company Sales 20 244,779 244,779 24,980
* Fidelity Institutional Equity Income Account
Retirement Services Purchases 43 1,937,472 1,937,472
Company Sales 17 197,353 197,353 14,131
* Fidelity Institutional Overseas Account
Retirement Services Purchases 30 607,482 607,482
Company Sales 6 92,969 92,969 1,284
* Fidelity Institutional Retirement Money Market Account
Retirement Services Purchases 39 1,312,659 1,312,659
Company Sales 11 199,431 199,431
* Fidelity Institutional Managed Income Portfolio Account
Retirement Services Purchases 35 794,416 794,416
Company Sales 7 6,520 6,520
</TABLE>
-29-
<PAGE>
<TABLE>
Security-Connecticut Corporation Savings & Profit Sharing Plan
Reportable Transactions
Year Ended December 31, 1996
<CAPTION>
Fair Value
of Assets on
Number of Total Total Transaction Net
Identity of Party Involved Description of Asset Transactions Purchase Price Selling Price Date Gain(Loss)
- -------------------------- -------------------- ------------ -------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - series of transactions in excess of 5 percent of plan assets (continued)
* Fidelity Institutional U.S. Equity Index Account
Retirement Services Purchases 39 1,223,062 1,223,062
Company Sales 13 69,710 69,710 8,588
* Fidelity Institutional FMTC Institutional Cash Portfolio
Retirement Services Purchases 39 1,632,354 1,632,354
Company Sales 26 1,550,349 1,550,349
* Fidelity Management Security-Connecticut Corporation
Trust Company Purchases; 36,900 shares 10 1,039,409 1,039,409
Sales; 9,500 shares 6 226,563 226,563 69,681
* The Lincoln National Life Insurance Company, Norwest Bank Fort Wayne, N.A.,
Fidelity Institutional Retirement Services Company, and Fidelity Management
Trust Company are parties-in-interest.
* * Number of transactions were not available from The Lincoln National Life
Insurance Company.
Note: Categories (ii) and (iv) are not applicable.
</TABLE>
-30-
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-74410) pertaining to the Security-Connecticut Corporation
Savings & Profit Sharing Plan of our report dated June 10, 1997, with respect to
the financial statements and schedules of the Security-Connecticut Corporation
Savings & Profit Sharing Plan included in the Annual Report (Form 11-K) for the
year ended December 31, 1996.
ERNST & YOUNG LLP
Hartford, Connecticut
June 23, 1997
-31-
<PAGE>
