SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
Commission file number 0-3722
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Atlantic American Corporation
401(k) Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Atlantic American Corporation
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319
ATLANTIC AMERICAN CORPORATION
401(k) RETIREMENT SAVINGS PLAN
The following exhibits are filed herewith:
Exhibit 99.1: Financial Statements and Schedules as of December 31, 1995
and 1994 together with auditor's report.
Exhibit 99.2: Consent of Arthur Andersen LLP
1
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.
Atlantic American Corporation
401(k) Retirement Savings Plan
------------------------------------------
(Name of Plan)
Date: July 15, 1996 John W. Hancock
------------- ------------------------------------------
Senior Vice President - Treasurer
2
EXHIBIT 99.1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Atlantic American Corporation 401(k)
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of ATLANTIC AMERICAN CORPORATION 401(k) RETIREMENT SAVINGS PLAN as of December
31, 1995 and 1994, and the related statements of changes in net assets available
for benefits and schedules for the year ended December 31, 1995. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 4, which was certified by INVESCO Trust Company, the
custodian of the Plan, except for comparing the information with the related
information included in the 1995 financial statements and supplemental
schedules. We have been informed by the plan administrator that the custodian
holds the Plan's investment assets and executes investment transactions. The
plan administrator has obtained a certification from the custodian as of and for
the year ended December 31, 1995 that the information provided to the plan
administrator by the custodian is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedules taken as a whole. The form and content of the
information included in the financial statements and schedules, other than that
derived from the information certified by the custodian, have been audited by us
in accordance with generally accepted auditing standards and, in our opinion,
are presented in compliance with the Department of Labor Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974.
Arthur Andersen LLP
Atlanta, Georgia
June 28, 1996
1
ATLANTIC AMERICAN CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 AND 1994
1995 1994
---- ----
ASSETS:
Cash $ 0 $ 119
Investments, at market value (Note 3):
Participant-directed:
Common stock-Atlantic American 336,427 0
Mutual funds 2,205,669 0
Nonparticipant-directed:
Investments in registered 0 1,305,973
Common stock in other
unaffiliated companies 0 703,284
Common stock- Atlantic American 11,635 0
Receivables:
Income and other receivables 0 2,113
---------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 2,553,73 $ 2,111,489
========== ===========
The accompanying notes are an integral part of these statements.
2
SCHEDULE II
ATLANTIC AMERICAN CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
Nonparticipant Participant
Directed Directed
------------------------------------- -----------
Investment
In Registered Atlantic Atlantic
Common Investment American American
Stock Companies Stock Stock
------ ------------- -------- --------
ADDITIONS TO NET ASSETS:
Participant contributions .................... $ 0 $ 0 $ 0 $ 12,022
Employer contributions ....................... 0 0 11,635 61,325
----------- ----------- ----------- ------------
Total contributions ................ 0 0 11,635 73,347
----------- ----------- ----------- ------------
Net appreciation in fair market value of asset 0 (64,084) 0 28,771
----------- ----------- ----------- ------------
Gain (loss) on sales of investments .......... 183,002 (35,013) 0 34
----------- ----------- ----------- ------------
Dividend income .............................. 35,308 0 0 0
Total additions .................... 218,310 (99,097) 11,635 102,152
----------- ----------- ----------- ------------
DEDUCTIONS FROM NET ASSETS:
Benefit payments to participants ............. 0 (168,253) 0 (344)
Other ........................................ 0 (2,231) 0 0
----------- ----------- ----------- ------------
Total deductions ................... (170,484) 0 (344)
------------ ------------ ----------- ------------
TRANSFERS BETWEEN FUNDS .......................... (923,707) (1,136,511) 234,619 0
----------- ----------- ----------- ------------
NET (DECREASE) INCREASE .......................... (705,397) (1,406,092) 246,254 101,808
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year ......................... 705,397 1,406,092 0 0
----------- ----------- ----------- ------------
End of year ............................... $ 0 $ 0 $ 246,254 $ 101,808
=========== =========== =========== ============
3
Participant
Directed
--------------------------------------------------------------------
Cash Industrial Intermediate Total
Reserves Income Government Return Dynamics
Fund Fund Bond Fund Fund Fund
-------- ---------- ------------- ------ --------
ADDITIONS TO NET ASSETS:
Participant contributions .................... $ 7,451 $ 50,468 $ 16,421 $ 42,222 $ 45,264
Employer contributions ....................... 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Total contributions ................ 7,451 50,468 16,421 42,222 45,264
----------- ----------- ----------- ----------- -----------
Net appreciation in fair market value of asset 0 34,183 17,775 55,349 69,546
----------- ----------- ----------- ----------- -----------
Gain (loss) on sales of investments .......... 0 2,678 1,896 188 11
----------- ----------- ----------- ----------- -----------
Dividend income .............................. 20,482 7,692 13,201 11,098 0
----------- ----------- ----------- ----------- -----------
Total additions .................... 27,933 95,021 49,293 108,857 114,821
----------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS:
Benefit payments to participants ............. (2,992) (869) (1,377) (650) 0
Other ........................................ 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Total deductions ................... (2,992) (869) (1,377) (650) 0
----------- ----------- ----------- ----------- -----------
TRANSFERS BETWEEN FUNDS .......................... 580,110 238,290 282,310 385,583 329,339
----------- ----------- ----------- ----------- -----------
NET (DECREASE) INCREASE .......................... $ 605,051 $ 332,442 $ 330,226 $ 493,790 $ 444,160
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year ......................... 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
End of year ............................... 605,051 332,442 330,226 493,790 444,160
=========== =========== =========== =========== ===========
4
Participant
Directed
--------------------------
Other Total
----- -----
ADDITIONS TO NET ASSETS:
Participant contributions .................... $ 0 $ 173,848
Employer contributions ....................... 0 72,960
----------- -----------
Total contributions ................ 0 246,808
----------- -----------
Net appreciation in fair market value of asset (1,991) 139,549
----------- -----------
Gain (loss) on sales of investments .......... (7,976) 144,820
----------- -----------
Dividend income .............................. 0 87,781
----------- -----------
Total additions .................... (9,967) 618,958
----------- -----------
DEDUCTIONS FROM NET ASSETS:
Benefit payments to participants ............. 0 (174,485)
Other ........................................ 0 (2,231)
----------- -----------
Total deductions ................... 0 (176,716)
----------- -----------
TRANSFERS BETWEEN FUNDS .......................... 9,967 0
----------- -----------
NET (DECREASE) INCREASE .......................... $ 0 $ 442,242
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year ......................... 0 2,111,489
----------- -----------
End of year ............................... 0 2,553,731
=========== ===========
The accompanying notes are an integral part of this schedule.
5
ATLANTIC AMERICAN CORPORATION
401(k) RETIREMENT SAVINGS PLAN
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
Market
Cost Value
---- ------
CASH AND CASH EQUIVALENTS: $605,051 $605,051
* INVESCO Cash Reserves Fund
MUTUAL FUNDS:
* INVESCO Total Return Fund 441,238 493,790
* INVESCO Intermediate Government Bond Fund 312,451 330,226
* INVESCO Industrial Income Fund 304,292 332,442
* INVESCO Dynamics Fund 428,624 444,161
COMMON STOCK:
* Atlantic American Corporation 319,291 348,062
*Indicates a party in interest.
The accompanying notes are an integral part of this schedule.
6
SCHEDULE II
ATLANTIC AMERICAN CORPORATION
401(k) RETIREMENT SAVINGS PLAN
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS (a)
FOR THE YEAR ENDED DECEMBER 31, 1995
Description of Asset,
Including Rate of Interest Purchase Selling Net
Identity of Party Involved and Maturity in Case of Loans Price Cost Price Gain
- ------------------------------ ----------------------------- -------- ---- ------- ----
* INVESCO TRUST COMPANY Cash Reserves Fund:
1 purchase $2,058,985 $ 0 $ 0 $ 0
2 sales 1,473,156 1,473,156 0
* INVESCO TRUST COMPANY Industrial Income Fund:
1 purchase 272,476
* INVESCO TRUST COMPANY Total Return Fund:
1 purchase 382,803
* INVESCO TRUST COMPANY Intermediate Government Bond Fund:
1 purchase 335,673
* INVESCO TRUST COMPANY Dynamics Fund:
1 purchase 254,902
* INVESCO TRUST COMPANY Atlantic American Corporation
common stock:
1 purchase 185,433
* WACHOVIA BANK OF GEORGIA Biltmore Prime Cash Management
1 purchase 2,060,564
1 sale 2,058,985 2,058,985 0
*Indicates a party-in-interest.
(a) Represents transactions or a series of transactions in excess of 5% of the fair
value of plan assets at the beginning of the year.
The accompanying notes are an integral part of this schedule.
7
ATLANTIC AMERICAN CORPORATION
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1995 AND 1994
1. PLAN DESCRIPTION
General
The Atlantic American Corporation 401(k) Retirement Savings Plan (the
"Plan") is a defined contribution plan established by the Atlantic American
Corporation (the "Company") under the provisions of Section 401(a) of the
Internal Revenue Code ("IRC"), which includes a qualified cash or deferred
arrangement as described in Sections 401(k) and 401(m) of the IRC, for the
benefit of eligible employees of the Company. All employees of the Company
who have completed one year of service, as defined, are eligible to
participate. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended. Participants
should refer to the plan agreement for a complete description of the Plan.
Plan Administration
Effective May 1, 1995, INVESCO Trust Company (the "Trustee") was appointed a
directed trustee and custodian of the Plan. The Trustee has custodial
responsibility for the Plan's assets and has been given the authority and
power to, among other things, invest the principal and income of the Plan's
assets.
Contributions
Eligible employees can contribute an amount up to 16% of compensation as
defined by the Plan, subject to certain limitations under the IRC. The
Company provides a matching contribution equal to 50% of the first 6% of
each participant's contribution. All Company matching contributions are
invested in Atlantic American Corporation common stock. Participants can
elect to transfer the Company contribution into another investment fund only
after the participant is fully vested.
Vesting
Participants are always fully vested in their own contributions. Each
Participant becomes fully vested in the Plan, for employee contributions,
after seven years of service with no intervening breaks in service of five
years or more. Participants are credited with one year of service each
calendar year in which the participant works 1,000 hours. A break in service
is deemed to be any year in which the participant does not complete more
than 500 hours of service.
Benefits
Upon termination of service due to death, disability, or retirement, a
participant may elect to receive an amount equal to the value of the
participant's vested interest in his/her account. The form of payment,
selected by the participant, is either a lump-sum distribution, an annuity
to be paid in monthly installments over a fixed period of years, or a direct
rollover into a qualified retirement plan or IRA.
Participant Accounts
Individual accounts are maintained for each of the Plan's participants to
reflect the participant's contributions and employer contributions as well
as the participant's share of the Plan's income and any related
administrative expenses. Allocations are based on the proportion that each
participant's account balance bears to the total of all participant account
balances.
8
Investment Options
Participants may direct their contributions and any related earnings into
several investment options in 10% increments. Participants may change their
investment elections once each calendar quarter. The participants of the
Plan can invest in either Atlantic American Corporation common stock,
INVESCO Cash Reserves Fund, INVESCO Intermediate Government Bond Fund,
INVESCO Total Return Fund, INVESCO Industrial Income Fund, or the INVESCO
Dynamics Fund.
Termination
As stated in the plan agreement, the Company may terminate the Plan at any
time, in which event each participant shall be fully vested as of the
termination date. The Company has no plans to terminate the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
Basis of Accounting
The accompanying financial statements have been prepared using the accrual
basis of accounting.
Valuation of Investments
Cash equivalents are stated at cost which approximates market value.
Marketable securities are stated at fair value. Purchases and sales of
securities are reflected on a trade-date basis.
Investment Income
Income (loss) from separate accounts includes investment income and
expenses.
Administrative Expenses
The Company pays all administrative expenses of the Plan, including trustee
fees.
3. INVESTMENTS
The fair market value of individual investments as of December 31, 1995 and
1994 is as follows:
1995:
Atlantic American Corporation common stock $ 348,062
INVESCO Total Return Fund 493,790
INVESCO Intermediate Government Bond Fund 330,226
INVESCO Industrial Income Fund 332,442
INVESCO Cash Reserves Fund 605,051
INVESCO Dynamics Fund 444,161
1994:
Biltmore Short-Term Fixed Income Fund 1,285,127
Various Unaffiliated Common Stocks 703,284
4. TAX STATUS
The Internal Revenue Service issued a determination letter dated May 21,
1996 stating that the Plan was designed in accordance with applicable plan
requirements as of that date. The Plan has been amended since receiving the
determination letter. However, the plan administrator believes that the Plan
is currently designed and is being operated in compliance with the
applicable requirements of the IRC. Therefore, they believe that the Plan
was qualified and the related trust was tax-exempt as of the financial
statement date.
9
5. INFORMATION CERTIFIED BY THE CUSTODIAN OF THE PLAN
The following information was derived from data certified by the Plan's
Trustee as being complete and accurate in its report dated December 31,
1995:
o Investment information included in the statements of net assets
available for benefits
o Investment income information included in the statement of
changes in net assets available for benefits
o Information included in the supplemental schedules, as listed in
the accompanying table of contents
10
EXHIBIT 99.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 28, 1996, included in this annual report of
The Atlantic American 401(k) Retirement Savings Plan on Form 11-K for the year
ended December 31, 1995, into the Plan's previously filed Registration Statement
No. 33-90890.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
July 15, 1996
