-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JMk7cP/T3eMWyyGdcWYt13O877j/A5lmf3VusxGuMpEf1F930kaibneGv/3tyjDv m+xSqW/BOzDr0SB0ITjUow== 0000317745-96-000002.txt : 19960701 0000317745-96-000002.hdr.sgml : 19960701 ACCESSION NUMBER: 0000317745-96-000002 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL RE CORP CENTRAL INDEX KEY: 0000317745 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 061026471 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08026 FILM NUMBER: 96587595 BUSINESS ADDRESS: STREET 1: FINANCIAL CENTRE P O BOX 10351 STREET 2: 695 EAST MAIN STREET CITY: STAMFORD STATE: CT ZIP: 06904-2351 BUSINESS PHONE: 2033285000 MAIL ADDRESS: STREET 1: FINANCIAL CENTRE STREET 2: P O BOX 10350 CITY: STAMFORD STATE: CT ZIP: 06904-2350 11-K 1 FORM 11-K GENERAL RE CORPORATION Financial Centre P.O. Box 10350 Stamford, Connecticut 06904-2350 June 27, 1996 Securities and Exchange Commission Washington, D.C. 20549 Re: General Re Corporation Report on Form 11-K Gentlemen: Pursuant to the requirements of the Securities Exchange Act of 1934, we are submitting herewith the attached Form 11-K. Very truly yours, Elizabeth A. Monrad Senior Vice President and Treasurer (Principal Accounting Officer) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the Fiscal Year ended December 31, 1995 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES (full title of plan) General Re Corporation Financial Centre 695 East Main Street Stamford, Connecticut 06904-2350 (Name of issuer and address of principal executive office) FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements - See accompanying Report of Examination of Independent Accountants. (b) Exhibit 1 - Consent of Independent Accountants. SIGNATURES The Plan: Pursuant to the requirements of the Security Exchange Act of 1934, the plan administrator has duly caused this annual report to be signed by the undersigned hereunto duly authorized. PLAN: EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN OF GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES PLAN ADMINISTRATOR: GENERAL RE CORPORATION By: Elizabeth A. Monrad Date: CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statement of General Re Corporation and subsidiaries on Form S-8 (File number 2-75489) of our report dated June 17, 1996 on our audits of the financial statements and financial statement schedules of the Employee Savings and Stock Ownership Plan of General Re Corporation and Its Domestic Subsidiaries as of December 31, 1995 and 1994, and for the year ended December 31, 1995, which report is included in this Annual Report on Form 11-K. New York, New York June 17, 1996 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES Financial Statements For the Years Ended December 31, 1995 and 1994 and Supplemental Schedules EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES INDEX of FINANCIAL STATEMENTS and SCHEDULES Page(s) Report of Independent Accountants 2-3 Financial Statements: Statements of Net Assets Available for Plan Benefits, with fund information at December 31, 1995 and 1994 4 Statement of Changes in Net Assets Available for Plan Benefits, with fund information for the year ended December 31, 1995 5 Notes to Financial Statements 6-14 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes at December 31, 1995 15 Item 27d - Schedule of Reportable Transactions for the year ended December 31, 1995 16 Schedules other than those listed above have been omitted since they are either not required or are not applicable. 1 REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees of the Employee Savings and Stock Ownership Plan of General Re Corporation and Its Domestic Subsidiaries: We have audited the accompanying statements of net assets available for plan benefits of the EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES (the Plan) as of December 31, 1995 and 1994 and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1995. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the administrator, 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 plan benefits of the Plan as of December 31, 1995 and 1994 and the changes in net assets available for plan benefits for the year ended December 31, 1995, in conformity with generally accepted accounting principles. As explained in Note 3, the financial statements include securities valued at $270,673,773 and $217,880,419 at December 31, 1995 and 1994, respectively, (66% and 67% of total assets of the Plan, respectively) whose values have been estimated by the trustees of the Plan in the absence of readily ascertainable market values. We have reviewed the procedures used by the trustees in arriving at their estimate of value of such securities and have inspected the underlying documentation, and, in the circumstances, we believe the procedures are reasonable and the documentation appropriate. However, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material. 2 REPORT OF INDEPENDENT ACCOUNTANTS (continued) Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes at December 31, 1995, and of reportable transactions for the year ended December 31, 1995, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The schedule of assets held for investment purposes that accompanies the Plan's financial statements does not disclose the historical cost of the investments. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The schedule of reportable transactions that accompanies the Plan's financial statements does not disclose the historical cost of the investments comprising the transactions, nor the net gain or loss resulting from dispositions of investments. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. New York, New York June 17, 1996 3 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES STATEMENTS OF NET ASSETS AVAILABLE for PLAN BENEFITS, with fund information December 31, 1995 and 1994 General Re General Re Corporation Corporation Preferred Common Stock Stock Fund December 31, 1995 ASSETS: Allocated Investments, at fair value(Note 4) $54,127,031 $28,608,030 Unallocated Investments, at fair value(Note 4) 216,546,742 Participant loans receivable Total assets 270,673,773 28,608,030 LIABILITIES: Loan payable to General Re Corporation 145,723,817 Net assets available for plan benefits December 31, 1995 $124,949,956 $28,608,030 Number of shares or units 1,724,037 2,696,327 Net asset value per share or per unit $72.48 $10.61 December 31, 1994 ASSETS: Allocated Investments, at fair value(Note 4) $37,149,089 $23,721,569 Unallocated Investments, at fair value(Note 4) 180,731,330 Participant loans receivable Cash 36 Total assets 217,880,455 23,721,569 LIABILITIES: Loan payable to General Re Corporation 146,841,949 Net assets available for plan benefits December 31, 1994 $71,038,506 $23,721,569 Number of shares 1,734,717 192,077 Net asset value per share $40.95 $123.50 See Notes to Financial Statements 4 Fidelity Fidelity Fidelity Fidelity Fidelity Equity- Growth Investment Intermediate Magellan Income Company Grade Bond Fund Fund Fund Bond Fund Fund $31,541,775 $18,832,833 $6,426,613 $1,181,283 $10,234,307 31,541,775 18,832,833 6,426,613 1,181,283 10,234,307 $31,541,775 $18,832,833 $6,426,613 $1,181,283 $10,234,307 366,850 496,516 177,090 160,065 983,124 $85.98 $37.93 $36.29 $7.38 $10.41 $22,159,859 $13,288,185 $3,569,855 $837,620 $8,817,601 22,159,859 13,288,185 3,569,855 837,620 8,817,601 $22,159,859 $13,288,185 $3,569,855 $837,620 $8,817,601 331,734 432,840 130,956 122,280 897,009 $66.80 $30.70 $27.26 $6.85 $9.83 See Notes to Financial Statements 4 Fidelity Fidelity Fidelity Fidelity Fidelity Asset Asset Manager: Asset Manager: Overseas Balanced Manager Growth Income Fund Fund Fund Fund Fund $6,844,718 $2,505,836 $1,297,013 $1,587,728 $451,164 6,844,718 2,505,836 1,297,013 1,587,728 451,164 $6,844,718 $2,505,836 $1,297,013 $1,587,728 $451,164 235,456 185,343 81,830 104,662 38,893 $29.07 $13.52 $15.85 $15.17 $11.60 $5,623,418 $2,343,483 $1,081,361 $895,553 $289,379 5,623,418 2,343,483 1,081,361 895,553 289,379 $5,623,418 $2,343,483 $1,081,361 $895,553 $289,379 205,986 190,682 78,190 69,747 27,771 $27.30 $12.29 $13.83 $12.84 $10.42 See Notes to Financial Statements 4 Fidelity Fidelity Fidelity Fidelity Fidelity Small Cap Retirement Retirement Managed U.S. Equity Stock Money Market Government Income Index Fund Trust Money Market Portfolio Portfolio $1,549,090 $11,840,707 $964,590 $7,664,924 $1,974,693 1,549,090 11,840,707 964,590 7,664,924 1,974,693 $1,549,090 $11,840,707 $964,590 $7,664,924 $1,974,693 125,027 11,840,707 964,590 7,664,924 87,492 $12.39 $1.00 $1.00 $1.00 $22.57 $522,888 $10,959,952 $679,237 $6,842,631 $849,770 522,888 10,959,952 679,237 6,842,631 849,770 $522,888 $10,959,952 $679,237 $6,842,631 $849,770 50,037 10,959,952 679,237 6,842,631 50,252 $10.45 $1.00 $1.00 $1.00 $16.91 See Notes to Financial Statements 4 Other Total $187,632,335 216,546,742 $5,924,390 5,924,390 5,924,390 410,103,467 145,723,817 $5,924,390 $264,379,650 - - - - $139,631,450 180,731,330 $5,580,690 5,580,690 402,093 402,129 5,982,783 326,345,599 146,841,949 $5,982,783 $179,503,650 - - - - See Notes to Financial Statements 4 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES STATEMENT of CHANGES in NET ASSETS AVAILABLE for PLAN BENEFITS, with fund information for the year ended December 31, 1995 General Re General Re Corporation Corporation Preferred Common Stock Stock Fund Net assets available for plan benefits December 31, 1994 $71,038,506 $23,721,569 Additions: Employer contributions 4,011,986 231 Employee contributions 1,572,029 Loan repayments 368,800 Dividends 10,689,026 278,384 Interest 100,643 Net appreciation in fair value of investments 54,278,146 5,984,707 Transfer (to) from other funds, net (2,441,126) Cash Total additions 68,979,158 5,863,668 Deductions: Benefits paid to participants 1,484,828 518,420 Loans written 458,787 Administrative fee Interest expense 13,582,880 Total deductions 15,067,708 977,207 Net assets available for plan benefits December 31, 1995 $124,949,956 $28,608,030 See Notes to Financial Statements 5 Fidelity Fidelity Fidelity Fidelity Fidelity Equity- Growth Investment Intermediate Magellan Income Company Grade Bond Fund Fund Fund Bond Fund Fund $22,159,859 $13,288,185 $3,569,855 $837,620 $8,817,601 309 24 6 61 1,949,687 1,112,798 799,737 130,665 652,226 311,592 184,735 80,144 16,377 119,078 1,816,504 1,071,154 289,664 68,300 604,644 98,747 56,656 27,555 5,626 26,431 6,415,250 3,297,526 1,272,576 75,239 542,159 (312,176) 541,279 584,375 88,162 (116,543) 10,279,913 6,264,172 3,054,057 384,369 1,828,056 444,553 424,163 99,867 11,474 234,686 450,840 293,780 97,266 29,059 174,982 2,604 1,581 166 173 1,682 897,997 719,524 197,299 40,706 411,350 $31,541,775 $18,832,833 $6,426,613 $1,181,283 $10,234,307 See Notes to Financial Statements 5 Fidelity Fidelity Fidelity Fidelity Fidelity Asset Asset Manager: Asset Manager: Overseas Balanced Manager Growth Income Fund Fund Fund Fund Fund $5,623,418 $2,343,483 $1,081,361 $895,553 $289,379 35 624,275 207,838 135,994 174,963 54,285 86,289 22,928 24,495 17,934 11,004 157,457 105,637 36,307 23,614 19,533 33,193 8,325 5,047 5,748 1,758 391,249 226,253 158,391 207,164 41,300 263,455 (296,161) (103,775) 353,549 69,443 1,555,918 274,855 256,459 782,972 197,323 251,849 77,429 15,888 79,464 7,114 82,329 34,661 24,919 11,333 28,424 440 412 334,618 112,502 40,807 90,797 35,538 $6,844,718 $2,505,836 $1,297,013 $1,587,728 $451,164 See Notes to Financial Statements 5 Fidelity Fidelity Fidelity Fidelity Small Cap Retirement Retirement Managed Stock Money Market Government Income Fund Trust Money Market Portfolio $522,888 $10,959,952 $679,237 $6,842,631 138 95,483 192,139 689,233 64,652 465,111 41,176 215,667 7,396 120,653 94,648 659,247 47,597 438,192 5,955 29,364 1,719 27,362 98,783 619,486 208,715 207,242 146,437 1,052,187 1,802,226 328,744 1,293,238 6,567 703,052 31,123 263,891 19,418 215,652 11,843 205,118 2,767 425 1,936 25,985 921,471 43,391 470,945 $1,549,090 $11,840,707 $964,590 $7,664,924 See Notes to Financial Statements 5 Fidelity U.S. Equity Index Other Total Portfolio $849,770 $5,982,783 $179,503,650 4,108,273 193,541 9,019,173 19,356 (1,647,624) 43,113 16,443,021 5,044 439,173 377,547 73,366,290 642,294 454,656 (402,093) (402,093) 1,280,895 (2,049,717) 103,428,493 136,479 166,576 4,957,423 19,489 (2,157,900) 4 12,190 13,582,880 155,972 (1,991,324) 18,552,493 $1,974,693 $5,924,390 $264,379,650 See Notes to Financial Statements 5 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS 1. Description of Plan The following description of the Employee Savings and Stock Ownership Plan of General Re Corporation and Its Domestic Subsidiaries (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 defined contribution plan covering employees of General Re Corporation and its domestic subsidiaries (the "Company") who complete a twelve month period of not less than one thousand hours of service. The Plan allows employees of the Company to make after tax contributions as well as tax deferred contributions to the Plan as permitted under Internal Revenue Code Section 401(k). In addition, the Company contributes an amount (the "Company match") related to the amount of employee investment. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). ESOP - In July 1989, the Company established a leveraged Employee Stock Ownership Plan ("ESOP"). The ESOP borrowed $150,000,000 with interest at 9.25% and principal payable annually, due to the Company in 2014. The proceeds of this borrowing were used by the ESOP to purchase 1,754,386 shares of 7-1/4% cumulative convertible preferred stock (Preferred Stock) of General Re Corporation. All Preferred Stock outstanding is held by the ESOP and is convertible into common stock on a one-for-one basis. Preferred Stock must be converted or redeemed into common stock or cash upon the participant's withdrawal from the Plan. The Preferred Stock is held by the ESOP trustee as collateral for the loan from the Company. The Company makes contributions to the ESOP which, together with the dividend on the Preferred Stock, are used to make loan interest and principal repayments. As interest and principal are repaid, a portion of the Preferred Stock is allocated to participating employees. At a minimum, principal and interest payments are sufficient to provide for allocation of Preferred Stock to meet the requirements for the Company match under the Plan. During 1995, the Plan received a dividend on the Preferred Stock of $10,689,026 and a Company contribution of $4,011,986. The Plan paid $13,582,880 in interest expense. In 1995 and 1994, 48,990 and 65,763 shares, respectively, net of retired shares of 10,680 and 6,293, respectively, were allocated to employees. There were 1,379,278 and 1,438,944 shares of unallocated Preferred Stock at December 31, 1995 and 1994, respectively. The fair value of the loan payable is estimated using discounted cash flow analyses, based on the Corporation's current incremental borrowing rates for similar types of arrangements and was $188,000,000 at December 31, 1995. EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) Contributions - Participants may contribute up to 16% of their base salary and allocate their investment among any of the Plan's funds. The Company match is 100% of an employee's contribution up to 6% of the employee's basic salary. The Internal Revenue Code limitation on employee salary deferral (401(k)) contributions during 1995 was $9,240. Participant Accounts - Each participant's account is credited with the participant's contribution and an allocation of the Company match, Plan earnings and forfeitures of terminated participants' earnings or account balances, as defined. Forfeitures, which are included in transfers from other funds were $54,324 during 1995. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Participant accounts are credited or debited on the last business day of each calendar quarter with the change in the value of each fund for the period. Vesting - All employee contributions become vested immediately. By government restriction, an employee is not allowed to withdraw Company match amounts that have not been in his/her account for at least two years. While actively employed, an employee becomes 50%, 75%, and 100% vested in the value of the Company match after 2, 3 and 4 years, respectively, of Company service. Transfers - With the exception of the Fidelity Managed Income Portfolio which may be changed on a monthly basis, participants are permitted to change the investment of their interests in any of the funds on a daily basis subject to certain limits. Loans - The Plan allows participants to borrow from the "before tax" and "rollover" portions of their respective accounts. Loans may not exceed the lesser of one half of the participant's vested account balance or $50,000. Nonresidence loans are written for periods of 6 to 54 months. The Plan also allows loans granted for purchases of principal residences to be repaid over a 30-year period. A fixed interest rate of the prime rate plus one percent calculated at the inception of the loan is charged over the life of the loan. The interest rates ranged from 9.5% to 10% for 1995 and were 7% to 9.5% for 1994. Interest and principal repayments are credited directly to the borrower's respective account and are repaid in monthly installments by payroll deductions. Loan balances outstanding are reflected as assets of the Plan. Market valuations are not readily determinable for participant loans due to the multitude of interest rates and terms of the various loans. 2. Investment Funds of the Plan The Plan has an agreement with Fidelity Management Trust Company to perform record keeping and investment management functions for the Plan. Certain members of the Company's Board of Directors are also trustees of the Fidelity Group of Mutual Funds. 7 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) A description of the investment funds of the Plan at December 31, 1995 is as follows: * General Re Corporation Common Stock Fund The General Re Corporation Common Stock Fund is a growth fund. The Fund seeks substantial long-term growth of capital by investing exclusively in General Re Corporation common stock. Participants have full voting rights for the shares of General Re Corporation common stock in their accounts. In 1994, the General Re Corporation Common Stock Fund was based on per share values. As of November 6, 1995 the General Re Corporation Common Stock Fund was unitized. At December 31, 1995 there were 2,696,327 units at a value of $10.61 per unit. * Fidelity Magellan Fund The Fidelity Magellan Fund is an aggressive growth fund. The Fund seeks long-term capital appreciation by investing in the stocks of both well-known and lesser-known companies with above-average growth potential and a correspondingly higher level of risk. * Fidelity Equity-Income Fund The Fidelity Equity-Income Fund is a growth and income fund. The Fund seeks a yield that exceeds the composite yield of the Standard and Poor's 500 Index, and considers the potential for capital appreciation when selecting fund investments. The Fund invests primarily in common stocks but can also invest in bonds and convertible securities. Dividend amounts will vary depending on the yields of the securities held in the portfolio. * Fidelity Growth Company Fund The Fidelity Growth Company Fund is a growth fund. It seeks long-term capital appreciation by investing primarily in common stocks and securities convertible into common stocks. It may invest in companies of any size with above-average growth potential or companies that appear undervalued relative to their potential return. 8 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) * Fidelity Investment Grade Bond Fund The Fidelity Investment Grade Bond Fund (previously, the Flexible Bond Portfolio) is an income fund. It seeks a high rate of current income consistent with reasonable risk. It invests in a broad range of fixed income securities. The Fund also seeks to protect investors' capital as well as take advantage of opportunities to realize capital appreciation, where appropriate. * Fidelity Intermediate Bond Fund The Fidelity Intermediate Bond Fund is an income fund. The Fund seeks a high level of current income. The Fund invests in high and upper- medium grade corporate bonds rated A or better with intermediate maturities, mortgage securities, bank obligations, and U.S. government and agency securities. The Fund's average portfolio maturity ranges between three and ten years. * Fidelity Overseas Fund The Fidelity Overseas Fund is an aggressive growth fund. The Fund seeks growth of capital over the long term. The Fund invests primarily in foreign securities, including common stock and securities convertible into common stock, as well as debt instruments. * Fidelity Balanced Fund The Fidelity Balanced Fund is a growth and income fund. It seeks the highest amount of income possible while preserving principal by investing in investment grade or higher bonds and high-yielding securities. * Fidelity Asset Manager Fund The Fidelity Asset Manager Fund seeks high total return with reduced risk over the long-term. Its assets are allocated among and across domestic and foreign equities, bonds and short-term instruments. The Fund's assets are gradually shifted to take advantage of the outlook for market conditions. 9 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) * Fidelity Asset Manager: Growth Fund The Fidelity Asset Manager: Growth Fund seeks to maximize total return over the long-term by allocating its assets among stocks, bonds, short-term instruments and other investments. The Fund allocates its assets among three principal asset classes: stocks, bonds, and short-term instruments. It may invest in many types of domestic and foreign securities. The flexible approach to diversification allows the Fund to take advantage of a wide variety of investment options in pursuit of high total return but with reduced risk from allocating its investments among the asset classes. * Fidelity Asset Manager: Income Fund The Fidelity Asset Manager: Income Fund seeks a high level of current income by maintaining a diversified portfolio of stocks, bonds, short-term instruments, and other investments. The Fund emphasizes investment in bonds and short-term instruments for income and price stability, but allows some investment in stocks for their potential to grow and keep pace with inflation. The asset mix is designed to provide a relatively conservative asset allocation across various market conditions. * Fidelity Small Cap Stock Fund The Fidelity Small Cap Stock Fund seeks long-term capital appreciation. Using proprietary computer models and fundamental research, the Fund invests in all types of equity securities issued by companies with small market capitalizations. These companies may include start-ups with good potential, firms that have recently gone public, or companies that operate in small industries or regional markets. The Fund may also invest a portion of its assets in stock issued by companies with larger market capitalizations. The Fund's share price and total return will fluctuate. * Fidelity Retirement Money Market Trust The Fidelity Retirement Money Market Trust is a money market fund. The Trust seeks as high a level of current income as is consistent with the preservation of capital and liquidity. It invests in high-quality, U.S. dollar-denominated money market instruments of U.S. and foreign issuers. The Trust's objective is to be a conservative, low-risk investment. 10 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) * Fidelity Retirement Government Money Market Trust The Fidelity Retirement Government Money Market Trust is a money market fund. It seeks as high a level of current income as is consistent with the preservation of principal and liquidity. It invests in obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and in repurchase agreements secured by these obligations. The Trust's objective is to be a conservative, relatively low-risk investment. * Fidelity Managed Income Portfolio The Fidelity Managed Income Portfolio (previously, the GIC Open- End Portfolio) seeks preservation of capital and a competitive level of income over time. The Portfolio purchases high-quality, short and long-term investment contracts (GICs), bank investment contracts (BICs), short-term money market instruments, and "synthetic" GICs (debt obligations issued by one institution and insured by another as to payment of interest and return of principal at maturity). While the Company has not expressed any intention to do so, termination prior to maturity of the GICs would result in certain penalties. The participants are exposed to credit loss in the event of nonperformance by the companies with whom the investment contracts are placed. However, the plan administrator does not anticipate nonperformance by these companies. * Fidelity U.S. Equity Index Portfolio The Fidelity U.S. Equity Index Portfolio is a growth and income fund. It seeks investment results that correspond to the total return performance of the S&P 500 Index, which is comprised of common stocks. 11 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) The number of employees participating in each fund of the Plan at December 31, 1995 and 1994 are as follows: 1995 1994 General Re Corporation Preferred Stock 1,947 1,913 General Re Corporation Common Stock Fund 1,223 1,227 Fidelity Magellan Fund 1,378 1,309 Fidelity Equity-Income Fund 978 966 Fidelity Growth Company Fund 552 437 Fidelity Investment Grade Bond Fund 178 173 Fidelity Intermediate Bond Fund 686 710 Fidelity Overseas Fund 677 655 Fidelity Balanced Fund 273 285 Fidelity Asset Manager Fund 86 75 Fidelity Asset Manager: Growth Fund 120 98 Fidelity Asset Manager: Income Fund 38 27 Fidelity Small Cap Stock Fund 166 84 Fidelity Retirement Money Market Trust 1,028 1,092 Fidelity Retirement Government Money Market Trust 102 91 Fidelity Managed Income Portfolio 573 586 Fidelity US Equity Index Portfolio 183 111 3. Summary of Significant Accounting Policies The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of change in net assets available for plan benefits during the reporting period. Actual results could differ from those estimates. The following summarizes the Plan's significant accounting policies: Investments - Investments in mutual, money market and common collective trust shares are valued based on reported net asset values. Investments in stocks traded on a national securities exchange are valued at the last reported sales price on the last business day of the year. The investment in General Re cumulative convertible preferred stock held in the ESOP is valued at fair value by the trustee based upon the report of an independent appraiser. Because there is no ready market for these securities, this valuation is an estimate. It is at least reasonably possible that a change in the estimate will occur in the near term that may have a material effect on the financial statements. The Plan presents in the statement of changes in net assets the net appreciation in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation on those investments. 12 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) Purchases and sales of investments are recorded as of the trade date. Interest income is recorded as earned on the accrual basis. Dividend income is recorded on the ex-dividend date. Participant loans are carried at unpaid principal. The fair value of participant loans was not readily determinable due to the high number of loans and their varying terms. Accordingly, the Plan believes it would have to expend excessive costs for the benefit derived. Interest income on the loans is recorded as earned on an accrual basis. Contributions - Contributions from the employees and the employer are recorded in the period in which the payroll deductions are made from Plan participants. Employer contributions to the General Re Corporation Preferred Stock Fund are made in shares of Preferred Stock. All other employer contributions are made in cash. Expenses - The management and service fees of the Fidelity Group of Mutual Funds are charged to operations of the respective funds. Certain administrative expenses, primarily consulting and auditing fees, are paid by the Company. 4. Investments Investments held by the Plan at December 31, 1995 and 1994 are summarized as follows:
1995 1994 Fair Fair Cost Value Cost Value General Re Corporation Preferred Stock $147,405,164 $270,673,773 $148,318,304 $217,880,419 General Re Corporation Common Stock 18,391,686 28,608,030 18,331,121 23,721,569 Fidelity Magellan Fund 24,722,712 31,541,775 21,352,872 22,159,859 Fidelity Equity Income Fund 14,721,083 18,832,833 12,305,107 13,288,185 Fidelity Growth Company Fund 5,315,909 6,426,613 3,627,546 3,569,855 Fidelity Investment Grade Bond Fund 1,169,484 1,181,283 908,154 837,620 Fidelity Intermediate Bond Fund 10,055,857 10,234,307 9,192,676 8,817,601 Fidelity Overseas Fund 6,278,317 6,844,718 5,419,735 5,623,418 Fidelity Balanced Fund 2,384,905 2,505,836 2,446,320 2,343,483 Fidelity Asset Manager Fund 1,231,348 1,297,013 1,182,473 1,081,361 Fidelity Asset Manager: Growth Fund 1,457,797 1,587,728 976,651 895,553 Fidelity Asset Manager: Income Fund 425,400 451,164 301,937 289,379 Fidelity Small Cap Stock Fund 1,480,521 1,549,090 529,615 522,888 Fidelity Retirement Money Market Trust 11,840,707 11,840,707 10,959,952 10,959,952 Fidelity Retirement Government Money Market Trust 964,590 964,590 679,237 679,237 Fidelity Managed Income Portfolio 7,664,924 7,664,924 6,842,631 6,842,631 Fidelity U.S. Equity Index Portfolio 1,580,475 1,974,693 817,819 849,770 Total $257,090,879 $404,179,077 $244,192,150 $320,362,780
13 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES NOTES to FINANCIAL STATEMENTS (continued) The cost basis of nonresidence participant loans was $2,836,829 and $2,991,671 at December 31, 1995 and 1994, respectively, and the cost basis of participant loans for the purchase of a principal residence was $3,087,561 and $2,589,019 at December 31, 1995 and 1994, respectively. Realized gains from securities transactions were $2,215,290 for 1995. At December 31, 1995, the Fidelity Equity Income Fund, Fidelity Magellan Fund, General Re Corporation Preferred Stock and General Re Corporation Common Stock, each exceeded 5% of the net assets available for plan benefits. At December 31, 1994, the Fidelity Equity Income Fund, Fidelity Magellan Fund, Fidelity Retirement Money Market Portfolio, General Re Corporation Preferred Stock and General Re Corporation Common Stock each exceeded 5% of the net assets available for plan benefits. 5. Plan Termination The Company intends to continue the Plan indefinitely but reserves the right to suspend contributions temporarily or to amend or terminate the Plan. If the Plan were to be terminated, all members would become fully vested, and all the Plan assets would be used solely to provide the benefits payable to employees and their beneficiaries. 6. Tax Status The Plan obtained its latest determination letter on April 28, 1995, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with applicable requirements of the Internal Revenue Code. The determination letter is subject to the Plan's adoption of the proposed amendments submitted to the Internal Revenue Service in letters dated March 21, 1995 and April 17, 1995, which were adopted in 1995. The plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 14 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES SUPPLEMENTAL SCHEDULE ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES at December 31, 1995 Number of Current Shares or Units Description Cost Value (1) Mutual Funds 366,850 Fidelity Magellan Fund $31,541,775 496,516 Fidelity Equity Income Fund 18,832,833 177,090 Fidelity Growth Company Fund 6,426,613 160,065 Fidelity Investment Grade Bond Portfolio 1,181,283 983,124 Fidelity Intermediate Bond Fund 10,234,307 235,456 Fidelity Overseas Fund 6,844,718 185,343 Fidelity Balanced Fund 2,505,836 81,830 Fidelity Asset Manager Fund 1,297,013 104,662 Fidelity Asset Manager: Growth Fund 1,587,728 38,893 Fidelity Asset Manager: Income Fund 451,164 125,027 Fidelity Small Cap Stock Fund 1,549,090 87,492 Fidelity U.S. Equity Index Portfolio 1,974,693 Money Market Funds 11,840,707 Fidelity Retirement Money 11,840,707 Market Trust 964,590 Fidelity Retirement Government 964,590 Money Market Trust Common/Collective Trusts 7,664,924 Fidelity Managed Income Portfolio 7,664,924 Preferred Stocks 1,724,037 General Re Corporation 270,673,773 Common Stocks 2,696,327 General Re Corporation 28,608,030 Participant Loans Residence, at cost 3,087,561 Nonresidence, at cost 2,836,829 Total $410,103,467 (1) The record keeper has informed the Plan's management that it is not possible for the record keeper to provide historical cost. The accompanying notes are an integral part of the supplemental schedule. 15 EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES SUPPLEMENTAL SCHEDULE ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year ended December 31, 1995 The following schedule itemizes those securities for which the aggregate amount of purchase and sale transactions, or for which a single transaction, was in excess of 5% of the current fair value of the Plan's net assets at January 1, 1995. Aggregate Reportable Transactions Cost of Net Gain Description of Asset Purchases Sales Assets(1) or (Loss)(1) Fidelity Magellan Fund $6,543,160 $3,576,494 Fidelity Retirement Money Market Portfolio 5,512,559 4,631,804 General Re Corporation: Preferred Stock 8,338,889 1,539,122 Single Reportable Transactions None (1) The record keeper has informed the Plan's management that it is not possible for the record keeper to provide this information. The accompanying notes are an integral part of the supplemental schedule. 16 -----END PRIVACY-ENHANCED MESSAGE-----