11-K 1 e11-k.txt THE LIBERTY CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 11-K (Mark One) [XX] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number 1-5846 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: The Cosmos Broadcasting Corporation Retirement and Savings Plan -------------------------------------------------------------------------------- B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: THE LIBERTY CORPORATION -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) South Carolina 57-0507055 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Post Office Box 789, Wade Hampton Boulevard, Greenville, S. C. 29602 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (864) 609-8256 1 2 REQUIRED INFORMATION A. Financial Statements Report of Independent Auditors 8 Statements of Net Assets Available for Benefits 9 Statements of Changes in Net Assets Available for Benefits 10 Notes to Financial Statements 11 B. Exhibits Consent of Independent Auditors 17 2 3 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 report to be signed on its behalf by the undersigned hereunto duly authorized. The Cosmos Broadcasting Corporation Retirement and Savings Plan --------------------------------------------------------------- (Name of Plan) The Liberty Corporation DATE: JUNE 27, 2000 ----------------------- (Registrant/Issuer) /s/ Kenneth W. Jones -------------------- Kenneth W. Jones Corporate Controller /s/ Martha G. Williams ---------------------- Martha G. Williams Vice President, General Counsel and Secretary 3 4 ITEM 1. PLAN HISTORY PLAN AMENDED AND RESTATED. Effective April 1, 1997, the net assets of The Liberty Corporation and Adopting Related Employers' 401(k) Thrift Plan merged with The Cosmos Broadcasting Corporation Profit Sharing Retirement Plan and Trust (for all applicable Cosmos participants). The merged plan was renamed The Cosmos Broadcasting Corporation Retirement and Savings Plan. The merged plan provides expanded investment selections and will retain the voluntary contribution, matching contribution, and profit sharing features for eligible Cosmos employees of the predecessor plan. ITEM 2. CHANGES IN INVESTMENT POLICY None. ITEM 3. CONTRIBUTIONS UNDER THE PLAN EMPLOYER'S PRETAX CONTRIBUTIONS Contributions under the Plan by The Cosmos Broadcasting Corporation and Cablevantage (the "Company") are measured by reference to the employees' contributions which may be on a pre-tax or after-tax basis. Employer matching contributions are made only on pre-tax employee contributions in accordance with a formula set each year by the employer's board of directors. During 1999, the Company contributed an amount equal to 100% of a participant's pre-tax contribution, up to a maximum of 3% of the participant's compensation. Employer pre-tax matching contributions totaling $1,001,000 from January 1, 1999 to December 31, 1999 were credited to the accounts of participating employees of the "Company". EMPLOYER'S DISCRETIONARY CONTRIBUTIONS In addition to making a matching pre-tax contribution, The Cosmos Broadcasting Corporation may make a separate discretionary contribution at the discretion of the Company's Board of Directors. If the Company elects to make a profit sharing contribution, it will be allocated among all participants who (1) are employed by the Company at the end of the applicable year and are credited with at least 1,000 hours of service for that year or (2) retire, die or become disabled during the applicable year. This allocation will be made after the end of the applicable year and will be based on each participant's compensation relative to the total compensation of all eligible participants (without regard to the participant's voluntary contributions). Employer discretionary contributions totaling $1,966,000 in 1999, were credited to the accounts of participating employees. ITEM 4. PARTICIPATING EMPLOYEES There were 1,210 enrolled participants in the Plan as of December 31, 1999. 4 5 ITEM 5. ADMINISTRATION OF THE PLAN (a) Parties responsible for the administration of the Plan are: (1) the Plan Committee, made up of at least three members named by the Company, (2) the Trustee and (3) the Plan Administrator which is named by the Plan Committee. ITEM 5. ADMINISTRATION OF THE PLAN The Plan Committee is responsible for the administration and operation of the Plan, except as to responsibilities which have been specifically assigned to the Trustee, to an Investment Manager, or to the Plan Administrator. Present members of the Plan Committee are employed by The Liberty Corporation or its subsidiaries and include the following: Artie L. Bedard Mary Anne Bunton Faith E. Gibson Quentin Kennedy Pamela A. Purvis Samuel H. Schaeffer G. Neil Smith Sandra Carpenter Thompson Evon A. Trotter Stephen Watkins, Jr. The Trustee is responsible for the management, investment and control of the assets of the Trust established by the Plan, and for the disbursements of benefits therefrom, except to the extent that the Trustee may be relieved of investment responsibility by the appointment of an Investment Manager or by direction of the Plan Committee. The present Trustee is Institutional Trust Company, 7800 East Union Avenue, Denver, Colorado 80217-3709. Neuberger & Berman Pension Management, Inc. is the Investment Manager of the Neuberger & Berman Common Stock Fund. Neuberger & Berman's address is 522 Fifth Avenue, New York, New York 10036. Liberty Investment Committee selects investment managers for each fund. Each fund is managed by its appointed investment manager and each investment manager has investment responsibility for designated fund. The Plan Administrator is currently an Administrative Committee which is responsible for the daily administration and operational functions of the Plan, including filing all reports with governmental agencies, providing Plan participants with information, preparing year-end reports to participants, maintaining all required records, interpreting the provisions of the Plan and settling disputes over the rights of employees, participants and beneficiaries. Present members of the Administrative Committee are employed by The Liberty Corporation and are stated as follows: Mary Anne Bunton Susan E. Cyr 5 6 ITEM 5. ADMINISTRATION OF THE PLAN (CONTINUED) (b) For the year ended December 31, 1999, expenses of administration of the Plan of approximately $372,000, including fees and expenses of Trustee, Institutional Trust Company, and one of the Investment Managers, Neuberger & Berman, and recordkeeper, Invesco Retirement Plan Services, and external auditors, Ernst & Young LLP were incurred and are paid out of the assets of the Plan. ITEM 6. CUSTODIAN OF INVESTMENTS (a) Invesco Retirement Plan Services, 1201 Peachtree Street, N.E., Atlanta, Georgia 30361. (b) The Trustee, Institutional Trust Company, and the recordkeeper, Invesco Retirement Plan Services received $142,000 in total during the year ended December 31, 1999. (c) No bond was furnished by Invesco Retirement Plan Services, the custodian of the Plan. ITEM 7. REPORTS TO PARTICIPATING EMPLOYEES Each Plan participant receives a quarterly statement showing the balance in his Plan account (including a breakdown of the amounts invested in each investment fund offered), amounts contributed by him and by his Employer, dividends, interest and other gains credited to his account, any amounts forfeited or otherwise charged against his account, and additional shares purchased if the employee has elected to have some or all of his and his Employer's contributions invested in the Company's stock. These individualized reports, a copy of the proxy statement and a copy of the summary annual report are the reports that were distributed to Plan participants during the year ended December 31, 1999. ITEM 8. INVESTMENT OF FUNDS (a) For the period January 1, 1999 to December 31, 1999, employee contributions and matching Employer contributions could be invested in the following funds available for investment under the Plan: Name of Fund Description of Fund -------------------------------------------------------------------------------- Cosmos Unitized Fund A fund which invests solely in Common Stock of The Liberty Corporation Invesco Retirement Trust Stable A fund which invests in money market Value Fund instruments Neuberger & Berman Common Stock A fund which invests in common stocks of Fund medium and large companies Vanguard Institutional Bond Index A fund which invests in bond-related Fund securities Loomis Sayles Bond Fund A fund which invests in investment-grade debt securities Invesco Retirement Trust Total A fund which invests in a combination of Return Fund equity & fixed income securities Invesco Retirement Trust Index A fund which invests in U.S. common stock 500 Fund securities This fund is seeking total return comparable to Standard and Poor's 500 index. GAM International Fund A fund which invests in foreign stocks and debt securities Invesco Retirement Trust Small A fund which invests in common stocks of Cap Value Fund companies seeking a total return of 2% to 3% higher than the Russell 2000 Small Stock Index 6 7 Item 8. Investment of Funds(continued) For the two years ended December 31, 1999, there were brokerage commissions paid by the Plan out of the Neuberger Berman/Hellman Jordan Common Stock Fund only. (b) No brokerage transactions effected for the Plan during the year ended December 31, 1999, were directed to brokers because of research services provided. Item 9. Financial Statements and Exhibits Page No. -------- (a) Financial Statements Report of Independent Auditors 8 Statements of Net Assets Available for Benefits 9 Statements of Changes in Net Assets Available for Benefits 10 Notes to Financial Statements 11 (b) Exhibits Consent of Independent Auditors 17 7 8 Report of Independent Auditors Administrative Committee of The Cosmos Broadcasting Corporation Retirement and Savings Plan and Board of Directors The Cosmos Broadcasting Corporation We have audited the accompanying statements of net assets available for benefits of The Cosmos Broadcasting Corporation Retirement and 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. ERNST & YOUNG LLP April 14, 2000 8 9 The Cosmos Broadcasting Corporation Retirement and Savings Plan Statements of Net Assets Available for Benefits DECEMBER 31 1999 1998 ------- ------- (In thousands) Assets Interest in The Liberty Corporation Retirement and Savings Trust $81,157 $75,659 Employer contributions receivable 1,966 1,761 ------- ------- Total assets 83,123 77,420 Liability Accrued expenses -- 63 ------- ------- Net assets available for benefits $83,123 $77,357 ======= ======= See accompanying notes 9 10 The Cosmos Broadcasting Corporation Retirement and Savings Plan Statements of Changes in Net Assets Available for Benefits
Year ended December 31 1999 1998 ------- ------- (In thousands) Additions: Net investment gain from participation in The Liberty Corporation Retirement and Savings Trust $ 6,385 $10,310 Contributions: Participants 2,149 1,963 Employer 2,967 2,578 ------- ------- 5,116 4,541 ------- ------- Total additions 11,501 14,851 Deductions: Benefits paid directly to participants 5,363 5,264 Administrative expenses 372 336 ------- ------- Total deductions 5,735 5,600 ------- ------- Net increase prior to merger 5,766 9,251 Transfer from Gray Communications Systems, Inc. Capital Accumulation Plan -- 440 ------- ------- Net increase 5,766 9,691 Net assets available for benefits: Beginning of year 77,357 67,666 ------- ------- End of year $83,123 $77,357 ======= =======
See accompanying notes 10 11 The Cosmos Broadcasting Corporation Retirement and Savings Plan Notes to Financial Statements December 31, 1999 1. DESCRIPTION OF PLAN The following description of The Cosmos Broadcasting Corporation Retirement and Savings Plan (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 all employees of Cosmos Broadcasting Corporation and related employers (CableVantage, Inc. and Carolina Cable) (Company and Employer) who have completed 1,000 hours of service in a calendar year or in the first 12 months of employment. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. CONTRIBUTIONS Participation in the 401(k) portion of the Plan is voluntary. Each year participants may contribute up to 13% of their compensation on either a pre-tax or after-tax basis, or a combination of both, through payroll deductions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Company contributes up to 3% of each participant's annual compensation. The annual matching percentage may be changed by resolution of the Board of Directors of the Company, effective at the beginning of any plan year (January 1). The Company may contribute discretionary contributions equal to amounts authorized by the Board of Directors to the profit-sharing portion of the Plan. Upon enrollment, a participant may direct employee and employer contributions to any of the Plan's fund options. Participants may change their investment options daily. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of (a) the Company's contributions and (b) Plan earnings, and is charged with an allocation of administrative expenses. Allocations are based on participant contributions or account balances, as defined. Forfeited balances of terminated participants' nonvested accounts are used to reduce future company contributions. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. 11 12 The Cosmos Broadcasting Corporation Retirement and Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Amounts credited to a participant's employer matching and discretionary account vest based on the total number of years of service (as defined under the Plan) with the Company or its related employers: Number of Years Percentage of Service of Vesting ---------------------------- ------------------------ Less than 3 years - 3 years 25% 4 years 50% 5 years 75% 6 years 100% All amounts credited to a participant's employee (before tax or after tax) and employer matching accounts are fully vested upon termination of employment due to a participant's death, total disability or retirement, or after a participant has completed six or more years of service. Also, each employee is fully vested at his or her 65th birthday. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range from 1-5 years, unless the loan is used for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Plan administrator. Principal and interest is paid ratably through payroll deductions. 12 13 The Cosmos Broadcasting Corporation Retirement and Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) PAYMENT OF BENEFITS A participant who has completed less than six years of service and is terminated for any reason other than those mentioned above forfeits the non-vested amounts in his employer matching account. All amounts credited to the employee's account (before tax or after tax) and all vested amounts credited to the employer's matching account are distributable upon termination in the form of a lump sum or installment payments. FORFEITED ACCOUNTS Forfeitures of non-vested balances in employer accounts of approximately $277,000 in 1999 and $131,000 in 1998 were used to reduce employer contributions. The unallocated forfeitures were $117,000 and $120,000 at December 31, 1999 and 1998, respectively. REVERSION TO SPECIAL FUND The Cosmos Broadcasting Corporation Pension Plan and Trust Agreement for Technicians was terminated during 1992. In 1993, twenty-five percent (25%) of the excess assets were reverted to a special fund within the Plan. The reversion is to be allocated in no more than seven years to the accounts of those participants who were active participants in the pension plan upon its termination. An allocation of approximately $6,000 and $7,000 of the reversion was made during 1999 and 1998, respectively. TRUST TO TRUST TRANSFER On August 3, 1998, the Company acquired the NBC affiliate, WALB-TV in Albany, Georgia. Due to this acquisition the account balances attributable to former employees of WALB-TV that were hired by the Company were transferred from Gray Communications Systems, Inc. Capital Accumulation Plan into the Plan on December 1, 1998. 13 14 The Cosmos Broadcasting Corporation Retirement and Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) 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 100 percent vested in their accounts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared on the accrual basis of accounting. VALUATION OF INVESTMENTS HELD IN THE LIBERTY CORPORATION RETIREMENT AND SAVINGS TRUST (MASTER TRUST) The Plan's investments are stated at fair value, which equals the quoted market price on the last business day of the plan year. The shares of registered investment companies are valued at quoted market prices, which represent the net asset values of shares held by the Plan at year-end. The participant loans are valued at their outstanding balances, which approximate fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that effect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. RECLASSIFICATIONS Certain amounts in the 1998 financial statements have been reclassified to conform to the 1999 presentation. 14 15 The Cosmos Broadcasting Corporation Retirement and Savings Plan Notes to Financial Statements (continued) 3. INVESTMENT IN THE MASTER TRUST Investments of the Plan are maintained in the Master Trust, which was established for the investment of assets of the Plan and The Liberty Corporation Retirement and Savings Plan. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 1999 and 1998, the Plan's interest in the net assets of the Master Trust was approximately 33% and 30%, respectively. The investments of the Master Trust, including investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. The following table presents the fair value of investments for the Master Trust at December 31: 1999 1998 -------- -------- (In thousands) Investments at fair value: Mutual funds $158,155 $176,163 Collective trust funds 85,737 74,173 Participant loans 3,521 4,508 -------- -------- $247,413 $254,844 ======== ======== Investment income for the Master Trust is as follows: YEAR ENDED DECEMBER 31 1999 1998 ------- ------- (In thousands) Net appreciation in fair value of investments determined by quoted market price: Mutual funds $ 8,668 $27,868 Collective trust funds 5,223 938 Interest income 442 52 Dividend income 3,258 3,709 ------- ------- Total investment income $17,591 $32,567 ======= ======= 15 16 The Cosmos Broadcasting Corporation Retirement and Savings Plan Notes to Financial Statements (continued) 4. INCOME TAX STATUS The Plan received a determination letter from the Internal Revenue Service dated October 20,1998, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (Code) and, therefore, the related trust is exempt from taxation. The Plan has been amended since receiving the determination letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan 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. TRANSACTIONS WITH PARTIES-IN-INTEREST The Plan received dividends of approximately $53,000 in 1999 and $40,000 in 1998 from The Liberty Corporation. 16