11-K 1 e11-k.txt FORM 11-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT OF EMPLOYEE SAVINGS PLAN PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 GREAT LAKES SAVINGS PLAN (Exact name of registrant as specified in its charter) DELAWARE 95-1765035 (State or other jurisdiction of (IRS-Employer Incorporation of organization) Identification No.) ONE GREAT LAKES BOULEVARD P.O. BOX 2200 WEST LAFAYETTE, IN 47906 (Address of principal executive offices) (Zip Code) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1999 ----------------------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number ------- ------- -------- 2 ANNUAL REPORT ON FORM 11-K - ITEM (A) LIST OF FINANCIAL STATEMENTS - EXHIBIT 23 Great Lakes Savings Plan West Lafayette, Indiana December 31, 1999 3 Form 11-K--Item (a) Great Lakes Savings Plan Financial Statements The following financial statements and schedules of the Plan are submitted herewith: Statements of Net Assets Available for Benefits - December 31, 1999 and 1998 Statements of Changes in Net Assets Available for Benefits - Years Ended December 31, 1999 and 1998 Notes to Financial Statements ERISA Schedules Schedules--Schedules I, II and III for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission have been omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto. 4 Report of Independent Auditors Plan Administrator Great Lakes Savings Plan We have audited the accompanying statements of net assets available for benefits of Great Lakes Savings Plan as of December 31, 1999 and 1998, 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 auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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, 1999 and 1998, and the changes in its net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. 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, 1999 and reportable transactions for the year then ended, are presented for the purpose of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits 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. /s/ Ernst & Young LLP April 30, 2000 3 5 Great Lakes Savings Plan Statements of Net Assets Available for Benefits December 31 1999 1998 ------------ ------------ Assets Investments, at fair value $106,538,474 $110,154,111 Receivables: Participant loans 142,472 138,775 Participant contributions 636,100 630,994 Employer contributions 291,949 197,440 ------------ ------------ Net assets available for benefits $107,608,995 $111,121,320 ============ ============ See accompanying notes. 6 Great Lakes Savings Plan Statements of Changes in Net Assets Available for Benefits
Year ended December 31 1999 1998 ------------- ------------- Additions to net assets attributed to: Participant contributions $ 8,311,701 $ 8,263,605 Employer contributions 4,152,687 2,843,062 Rollover contributions 1,833,283 1,853,680 Investment income: Dividends 4,743,405 3,226,219 Interest 1,719,484 1,711,647 Net appreciation in fair value of investments 4,349,313 3,642,006 Transfer from (to) other plans (2,452) 12,069 ------------- ------------- Total additions 25,107,421 21,552,288 Deductions from net assets attributed to: Benefits paid to participants 10,228,839 6,313,452 Other transfers out 18,331,344 469,211 Administrative fees 59,563 45,327 ------------- ------------- Total deductions 28,619,746 6,827,990 Net increase (decrease) (3,512,325) 14,724,298 Net assets available for benefits at beginning of year 111,121,320 96,397,022 ------------- ------------- Net assets available for benefits at end of year $ 107,608,995 $ 111,121,320 ============= =============
See accompanying notes. 7 1. DESCRIPTION OF THE PLAN The following description of Great Lakes Savings Plan (the Plan) provides only general information. More detailed information concerning the Plan may be found by consulting the Summary Plan Description which is available from the plan administrator. The Plan is a defined contribution plan. Eligible employees of Great Lakes Chemical Corporation (the Company) may participate in the Plan the first of the quarter following their date of employment. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Voluntary employee contributions to the Plan are made through periodic payroll deductions at the rate of 1% to 20% of the participants' eligible earnings (prior to January 1, 1999, participants could contribute up to 15%). The Company contributes an amount equal to 50% of the participants' basic contribution, limited to the first 6% (4% in 1998) of the participants' eligible earnings. Beginning in 1999, the Company match was made in Great Lakes Common Stock. INVESTMENT OPTIONS Participants may designate that their contributions be made to any of nine funds. PAYMENT OF BENEFITS Participants who have attained the age of 59 1/2 may at any time make withdrawals from the participant account. Such withdrawals must not exceed the balance of the participant account. A participant in the Plan may request a partial withdrawal of the amounts held in the participant account (which reflects all vested contributions to the Plan) at any time and will be paid the current value of the account as a result of a financial hardship. However, the withdrawal must be necessary to meet an immediate and heavy financial need of the participant and must not exceed the value of the participant account or the amount required to meet the need created by the financial hardship. 1 8 Great Lakes Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PARTICIPANT NOTES RECEIVABLE A participant may borrow against the vested balance in his account at a minimum of $1,000 and a maximum up to 50% of the account balance, not to exceed $50,000. A participant is allowed one loan at a time with the interest rate being one percent above the prime lending rate on the first day of the month in which the loan was made. Loans are repaid through payroll deductions over no more than 4 years (15 years if the loan was made for the purchase of a primary residence). The employers' matching contributions are not available for participant loans. VESTING A participant who terminates employment is able to receive the full value of his participant account. Participants with 6 or more years of service following the Plan year for which the contribution was made are 100% vested in the Company's matching contributions. Participants with less than two years, at least two, three, four or five years of service following the plan year for which the contribution was made are zero, 20%, 40%, 60% or 80% vested, respectively. Upon complete withdrawal by a participant, the nonvested portion of the employer's contribution will be forfeited and applied to reduce the employer's future contributions or administrative expenses. Amounts forfeited during 1999 were $339,000. 2. SUMMARY OF ACCOUNTING POLICIES INVESTMENTS VALUATION AND INCOME RECOGNITION Common stock and shares in registered investment companies and common/collective trust funds are carried at aggregate current value with the difference between cost and current value reflected in the statements of changes in net assets available for benefits as unrealized appreciation or depreciation of investments. Market value of common stock is based upon the last sales price as reported by the New York Stock Exchange on the last business day of the year. The shares in registered investment companies and common/collective trust funds are valued on the quoted market prices which represent the net asset values of shares held by the Plan at year end. The participant notes are valued at cost which approximates fair value. Dividends are recorded as income on the dividend receipt date. Purchases and sales are 2 9 Great Lakes Savings Plan Notes to Financial Statements (continued) recorded on a trade-date basis. Realized gains or losses on investment securities sold are determined using the average historical cost method. 2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES Preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. RECLASSIFICATION Certain amounts in the 1998 financial statements have been reclassified to conform to 1999 presentation. 3. INVESTMENTS The following summarized amounts and related information, including investment income were obtained or derived from information supplied to the plan administrator and certified as complete and accurate by Vanguard Fiduciary Trust Company, the Trustee. During 1999 and 1998, the Plan's investments (including investments purchased, sold, as well as held during the year) appreciated (depreciated) in fair value as follows. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE DURING YEAR 1999 1998 -------------------------- Common stock $ (627,828) $ (366,019) Shares of registered investment companies 4,977,141 4,008,025 -------------------------- $ 4,349,313 $ 3,642,006 ========================== 3 10 Great Lakes Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) Individual investments that represent 5 percent or more of the Plan's net assets are presented in the following table. 1999 1998 -------------------------- Common stock: Great Lakes Chemical Corporation * $16,460,381 $14,635,580 Shares of registered investment companies: Vanguard/Windsor Fund 22,639,919 23,726,151 Vanguard Index 500 Portfolio Fund 28,095,362 28,843,039 Vanguard Explorer Fund 5,547,458 4,924,123 VMMR Prime Portfolio Fund 6,642,832 6,639,838 Common/collective trust fund: Vanguard Retirement Savings Trust 17,655,035 20,584,800 * Nonparticipant-directed 4. NONPARTICIPANT -DIRECTED INVESTMENTS Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows: DECEMBER 31 1999 1998 ------------------------- Net assets: Great Lakes Chemical Corporation Common Stock $16,460,381 $14,635,580 =========== =========== YEAR ENDED DECEMBER 31, 1999 ----------------- Changes in net assets: Contributions $ 5,129,369 Interest and dividends 135,274 Net realized and unrealized depreciation in fair value (420,349) Transfers to participant directed funds (1,098,395) Transfer to other plans (359) Distributions to participants (1,920,739) ----------- $ 1,824,801 =========== A portion of the Great Lakes Chemical Corporation Common Stock Fund is participant directed as participants may elect to invest their employee contributions in the Company's Common Stock. 4 11 Great Lakes Savings Plan Notes to Financial Statements (continued) 5. PLAN TERMINATION Although it has not expressed the intent to do so, the Company has the right to terminate the Plan. In the event the Plan is terminated, each participant's account shall be nonforfeitable with respect to both the participant's and the Company's contributions (vested and nonvested portions), and the net assets are to be set aside for the payment of withdrawals to the participants. 6. RELATED PARTY TRANSACTIONS During 1999 and 1998, the Plan received $135,274 and $143,699, respectively, in common stock dividends from the Company. Fees paid for legal, accounting and other services rendered by parties-in-interest were paid by the Company. 7. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated September 12, 1995 stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. Certain provisions of the Plan have been amended, from time to time. The plan administrator believes the Plan, as amended, is being operated in compliance with the applicable requirements of the Code, and therefore, believes that the Plan is qualified and the related trust is tax exempt. 5 12 ERISA Schedules 13 Great Lakes Savings Plan Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999 EIN: 95-1765035 Plan # : 004
(b) (c) (d) (e) DESCRIPTION OF INVESTMENT, INCLUDING MATURITY IDENTITY OF ISSUE, DATE, RATE OF BORROWER, LESSOR INTEREST, PAR OR CURRENT OR SIMILAR PARTY MATURITY VALUE COST VALUE ----------------------------------------------------------------------------------------- Common Stock: * Great Lakes Chemical Corporation 104,723 shares $17,269,611 $16,460,381 * Octel 132,606 shares 1,315,839 568,880 Registered investment companies: * VMMR Prime Portfolio Fund 6,642,832 units 6,642,832 6,642,832 * Vanguard/Windsor Fund 1,492,414 units 23,446,433 22,639,919 * Vanguard Explorer Fund 80,843 units 4,284,449 5,547,458 *Vanguard Index 500 Portfolio Fund 207,606 units 17,576,486 28,095,362 *Vanguard/Wellesley Income Fund 221,764 units 4,673,156 4,180,248 *Vanguard Bond Index Fund 80,831 units 811,340 772,745 *Vanguard Int'l Growth Portfolio 54,280 units 1,049,404 1,220,763 Common collective trust fund: * Vanguard Retirement Savings Trust 17,655,035 units 17,655,035 17,655,035 Participant notes Interest rates ranging from 5.9% to 11% - 2,754,851 ----------- ------------ $94,724,585 $106,538,474 =========== ============ * Indicates party-in-interest to the Plan.
6 14 Great Lakes Savings Plan Schedule H, Line 4j - Schedule of Reportable Transactions Year ended December 31, 1999 EIN: 95-1765035 Plan #: 004
(A) (B) (C) (D) (G) (H) (I) Current Value Identity of Party Involved Description Purchase Selling Cost of of Asset on of Asset Price Price Asset Transaction Date Net Gain(Loss) ----------------------------------------------------------------------------------------------------------------------------------- Category (iii) - A series of transactions in excess of 5% of plan assets: Great Lakes Chemical Corporation Common stock shares Common Stock Fund Purchases $ 8,207,22 $ - $ 8,207,223 $ 8,207,223 $ - Sales - 5,962,577 5,658,614 5,962,577 303,963
Category: (i) Single transactions in excess of 5% of plan assets (ii) Series of transactions other than securities transactions (iii) Series of securities transactions in excess of 5% of plan assets (iv) Transactions with or in conjunction with a person if any single transaction with that person was in excess of 5% Notes: There were no category (i), (ii) or (iv) reportable transactions during 1999. Information concerning "Lease Rental" and Expenses Incurred with Transactions have not been presented as they are not applicable. 15 GREAT LAKES SAVINGS PLAN Pursuant to the requirements of the Securities Exchange Act of 1934, the Administration Committee of this employee benefit plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Date: June 26, 2000 Great Lakes Savings Plan ------------------- ---------------------------- (Name of Plan) /s/ Steven D. Mead ---------------------------- Steven D. Mead Corporate Director Global Compensation and Benefits 1 16 INDEX TO EXHIBITS Ex. 23 - Consent of Ernst & Young LLP, Independent Auditors 2