-----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, A9PCmKEl6CzDb0tMnMollZYT01KODZBhM95/s2twjGV2x6gXK8leAtZ2e70QlcvN 5PgQgGYwVRPlXVo57wiYkg== /in/edgar/work/20000630/0000950123-00-006252/0000950123-00-006252.txt : 20000920 0000950123-00-006252.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950123-00-006252 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 20000630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEAGRAM CO LTD CENTRAL INDEX KEY: 0000088188 STANDARD INDUSTRIAL CLASSIFICATION: [2080 ] IRS NUMBER: 000000000 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-02275 FILM NUMBER: 665947 BUSINESS ADDRESS: STREET 1: 1430 PEEL ST STREET 2: H3A 1S9 CITY: MONTREAL QUEBEC CANA STATE: A8 BUSINESS PHONE: 5148495271 MAIL ADDRESS: STREET 1: C/O JOSEPH E SEAGRAM & SONS INC STREET 2: 375 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10152 10-K405/A 1 e10-k405a.txt AMENDMENT NO. 1 TO FORM 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1999 COMMISSION FILE NUMBER 1-2275 THE SEAGRAM COMPANY LTD. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Canada None - ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1430 Peel Street, Montreal, Quebec, Canada H3A 1S9 - ------------------------------------------ ------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (514) 849-5271 ------------------
The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the fiscal year ended June 30, 1999 (the "Form 10-K") as set forth below and in the pages attached hereto: Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K Item 14 is hereby amended and supplemented pursuant to Rule 15d-21 under the Securities Exchange Act of 1934, as amended, to include as Exhibits 99(a), 99(b), 99(c), 99(d), 99(e) and 99(f) to the Form 10-K the attached Forms 11-K with respect to The Seagram 401(k) Plan - Spencer Employees, The Seagram 401(k) Plan - UNI Employees, The Seagram 401(k) Plan - Universal Employees, The Seagram 401(k) Plan, the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates and the Polygram Holding, Inc. Deferred Savings and Investment Plan for Employees, respectively. 2 2 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. THE SEAGRAM COMPANY LTD. By /s/ Daniel R. Paladino ---------------------------------------------------- Daniel R. Paladino Executive Vice President, Legal and Environmental Affairs Date: June 30, 2000 EX-99.A 2 ex99-a.txt FORM 11-K - 401K PLAN - SPENCER EMPLOYEES 1 EXHIBIT 99(a) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 COMMISSION FILE NUMBER 1-2275 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES 375 Park Avenue New York, New York 10152 (Full title of the plan and the address of the plan) THE SEAGRAM COMPANY LTD. 1430 Peel Street Montreal, Quebec, Canada, H3A 1S9 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Seagram 401(k) Plan - Spencer Employees (the "Plan") is subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Attached hereto are the financial statements of the Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 3 3 SIGNATURES 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 their behalf by the undersigned hereunto duly authorized. THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES By /s/ John Borgia ------------------------------------ John Borgia Member of Investment Committee Date: June 30, 2000 4 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 5 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES INDEX TO FINANCIAL STATEMENTS
Page ---- Independent Auditors' Report 1 Statement of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-11
6 INDEPENDENT AUDITORS' REPORT To the Administrative Committee of The Seagram 401(k) Plan - Spencer Employees We have audited the accompanying statements of net assets available for benefits of The Seagram 401(k) Plan - Spencer Employees (the "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 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 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 net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. /s/ Gutierrez & Co. Flushing, New York June 20, 2000 7 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ------------------------------- 1999 1998 ------------- -------------- Net assets held in trust by Bank of New York ( Note 11 ) $ 13,652,682 $ 8,800,121 ------------- -------------- NET ASSETS AVAILABLE FOR BENEFITS $ 13,652,682 $ 8,800,121 ============= ==============
The accompanying notes are an integral part of the financial statements. 2 8 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, ------------------------------------- 1999 1998 --------------- ---------------- CONTRIBUTIONS Participating Employees $ 888,974 $ 724,445 Participating Companies 386,708 211,040 --------------- ---------------- 1,275,682 935,485 --------------- ---------------- INVESTMENT INCOME ON ASSETS HELD BY BANK OF NEW YORK Net appreciation in fair value of investments 1,077,854 1,107,174 Dividends and interest 154,341 167,873 PARTICIPANT WITHDRAWALS ( 412,974) ( 394,078) --------------- ---------------- INCREASE IN PLAN EQUITY 2,094,903 1,816,454 TRANSFER OF SPENCER GIFTS PROFIT SHARING PLAN 2,757,658 PLAN EQUITY AT BEGINNING OF YEAR 8,800,121 6,983,667 --------------- ---------------- PLAN EQUITY AT END OF YEAR $ 13,652,682 $ 8,800,121 ============== ==============
The accompanying notes are an integral part of the financial statements. 3 9 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of The Seagram 401 (k) Plan - Spencer Employees (the "Plan") conform with generally accepted accounting principles. The more significant accounting policies are: Basis of Accounting The accompanying financial statements of the Plan are maintained on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Investment Valuation Effective January 1, 1997, the assets are held in trust by Bank of New York (Trustee) in the Joseph E. Seagram & Sons, Inc. Master Trust (Master Trust), which also includes assets of the 401(k) plans of the company's affiliates, Universal Studios, Inc. and UMG Manufacturing and Logistics, Inc. Effective, July 1, 1999,, the assets of the PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees were added to the Master Trust. The related investment income and appreciation in fair value represents allocations to the Plan based upon the ratio of the Plan's assets to total Master Trust Assets. Investment securities are recorded and valued as follows: United States government obligations at fair value based on the current market yields; temporary investments in short-term investment funds at cost which in the normal course approximates market value; securities representing units of other funds at net asset value; The Seagram Company Ltd. common shares at the closing price reported on the composite tape of the New York Stock Exchange on the valuation date. Security Transactions Security transactions are accounted for on a trade date basis with the average cost basis used for determining the cost of investments sold. Interest income is recorded on an accrual basis. Income on securities purchased under agreements to resell is accounted for at the repurchase rate. Changes in discount on coupons detached from United States Treasury Bonds are reflected as unrealized appreciation. 4 10 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan originally established as the Spencer Gifts, Inc. Employee Savings Plan ("Spencer Plan") and is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Effective January 1, 1997, the Spencer Plan was amended and continued in the form of The Seagram 401 (k) Plan (the "Seagram Plan"). The name of the Spencer Plan was changed to the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Spencer Employees (the "Plan"). Effective January 1, 1999, the name of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Spencer Employees was changed to The Seagram 401(k) Plan - Spencer Employees. To simplify plan administration, the Plan was amended in the form of the Seagram Plan, including certain modifications to the terms, to accomodate the benefits provisions solely applicable to eligible employees of Spencer Gifts, Inc. ("Spencer"). Notwithstanding the adoption of the form of the Seagram Plan, the Plan has continued its existence as a separate plan. Plan assets are solely available for the benefit of and used to satisfy the liabilities incurred on behalf of employees of the Plan. The Plan covers certain employees of Spencer who have completed one year of service and who are either (i) salaried employees or (ii) hourly employees employed in a classification designated by Spencer, excluding employees classified as Highly Compensated employees. The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's account by the participant and, amounts contributed under certain circumstances, by the Participating Companies (see Note 4). Under the Plan, a participant is not provided with any fixed benefit. The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and other adjustments, and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among four accounts specified in the Plan: pre-tax account, company match account, after-tax account and rollover account (the "Accounts"). Such contributions are invested as designated by the participants in one or more of the investment funds referred to in Note 3, and are accumulated and invested in the Master Trust. Plan assets are solely available for the benefit of and used to satisfy the liabilities incurred on behalf of employees covered by the Plan. The Plan is administered by the Joseph E. Seagram & Sons, Inc. (the "Company") through an Administrative Committee appointed by the Board of Directors of the Company. Effective, July 1, 1999, the Spencer Gifts Profit Sharing Plan was merged with the Plan. The account balances under the Spencer Gifts Profit Sharing Plan when transferred to the Plan will continue to be invested in the same funds in which they were invested prior to the merger unless the participant makes an investment election. 5 11 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 3. INVESTMENT PROGRAM During the year ended December 31, 1999, the Plan was comprised of nine investment funds: (i) the Money Market Fund investing primarily in the State Street Yield Enhanced STIF Fund managed by State Street Bank and Trust Company; (ii) the Stable Income Fund investing in the La Salle Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund investing in PIMCO Total Return Fund, Class A Shares (which replaced the Putnam Income Fund, Class A Shares on June 1, 1998) managed by PIMCO; (iv) the S&P 500 Index Fund investing in the S&P 500 Flagship Fund, Series C, managed by State Street Bank and Trust Company; (v) the Managed Equity Fund investing in Lazard Equity Portfolio managed by Lazard Freres Asset Management; (vi) the Growth Equity Fund investing in Brandywine Fund, Inc. managed by Freiss Associates (up to February 1, 1999); on December 1, 1999, the Growth Equity Fund was reestablished investing in Vanguard Institutional Index Fund managed by Vanguard; (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares; :(viii) the Dreyfus Small Company Value Fund investing in the Dreyfus Small Company Value Fund managed by Dreyfus and (ix) the MSDW International Equity Fund investing in MSDW International Equity Fund managed by Morgan Stanley. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. 4. CONTRIBUTIONS Non-highly compensated employees, as defined by the Plan, may elect to contribute to their pre-tax accounts on a pre-tax basis ("Pre-Tax Contributions) and/or to their after-tax accounts on an after-tax basis ("After-Tax Contributions") through payroll deductions of 1% to 14% (in the aggregate) (up to 17% effective January 1, 1999) of their annual salary (as defined in the Plan), in multiples of 1%, in any combination. Pre-tax Contributions and After-Tax Contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan provides for mandatory matching contributions by the Participating Companies payable to the participants' company match accounts. The Participating Companies, except as herein noted, contribute on behalf of the participants 40% of the participants'contributions not exceeding 5% of their salary. Effective January 1, 1999, the Participating Companies matching contribution was increased to 60% fo the first 6% of the Participants' Pre-Tax and After-Tax Contributions. The Participating Companies matching contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan will accept into participants' rollover Accounts cash received by participants from a qualified plan within the time prescribed by applicable law ("Rollover Contributions"). The Participating Companies may make discretionary contributions in an amount to be determined by the Participating Companies. The Participating Companies have not made discretionary contributions since the inception of the Plan. 6 12 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her contributions and rollover accounts. He or she has a non-forfeitable right to the value of his or her company match account upon the attainment of age 60, disability (as defined in the Plan ) or death. Upon termination of employment for any other reason, a participant vests in the funds held in his or her company match account in accordance with the following vesting schedule: Years of Service Vested Percentage ---------------- ----------------- Less than 1 0% At least 1, but less than 2 20% At least 2, but less than 3 40% At least 3, but less than 4 60% At least 4, but less than 5 80% 5 or more 100% Upon termination of employment for reasons other than the attainment of age 60, disability or death of a participant who was not fully vested in his or her company match account, the nonvested portion of the participant's company match account shall be forfeited. Any amount forfeited shall be applied to reduce the Participating Companies' contributions. Any amount forfeited shall be restored if the participant is re-employed by a Participating Company before incurring a five year break in service and if the participant repays to the Plan (within five years after his or her reemployment commencement date) an amount in cash equal to the full amount distributed to him or her from the Plan on account of termination of employment, excluding amounts from the after-tax and rollover accounts at the participant's election. The nonvested interest of terminated participants serves to reduce Participating Company contributions in accordance with the terms of the Plan. The Participating Companies used $7,263 in forfeitures to offset their contributions during the year ended December 31, 1999. 6. DISTRIBUTIONS Upon termination of employment, after the attainment of age 60 or for reason of disability or death, the participant or his or her beneficiary shall receive the value of his or her Accounts. However, if the termination of employment is for reasons other than the attainment of age 60, Disability or death, the participant shall receive only the value of the vested funds in his or her Accounts (See Note 5). Benefits are recorded when paid. In accordance with the procedures established by the Administrative Committee and the terms of the Plan, a terminated employee may elect to defer final distribution from the Plan. Upon such election, the amount in the participant's vested interest in the Plan is entitled to continue to receive investment income and is held by the Trustee until the date of distribution as elected by the 7 13 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 6. DISTRIBUTIONS (Continued) participant. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts in accordance with the provisions of the Plan. 7. LOANS TO PARTICIPANTS A participant may apply for loans up to the lesser of $50,000 or 50% of the value of the vested portion of the participant's Accounts. The minimum loan amount is $1,000. The maximum repayment terms are 5 years for general purpose loans and 25 years for principal residence loans. Applications for loans must be approved by the Administrative Committee. The amounts borrowed are transferred from the investment funds in which the participant's Accounts are currently invested. Repayments and interest thereon are credited to the participant's current investment funds through payroll deductions made each pay period. The interest rate for loans is based on the prime rate on the first business day of the month in which the loan is made plus one percentage point. 8. TAX STATUS OF PLAN The Internal Revenue Service has ruled by a letter dated April 20, 2000 that the Plan is qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended. So long as the Plan continues to be so qualified, it is not subject to Federal income taxes. Participants are not currently subject to income tax on the Participating Companies' contributions to the Plan or on income earned by the Plan. Benefits distributed to participants or to their beneficiaries may be taxable to them. The tax treatment of the value of such benefits depends on the event giving rise to the distribution and the method of distribution selected. 9. RELATED PARTY TRANSACTIONS Some of the Plan expenses including trustee, custodial, and certain recordkeeping fees, are paid by the Company, and personnel and facilities of the Company are used by the Plan at no charge. 10. TERMINATION OF THE PLAN The Board of Directors of the Company may terminate the Plan at any time. In the case of termination, the rights of participants to their accounts shall be vested as of the date of termination. 8 14 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST The assets of the Plan are invested in the Master Trust held by the Trustee where the assets of other related employee benefit plans of affiliates are invested on a commingled basis. The Master Trust net assets consist of the following classification of assets and liabilities as of December 31, 1999 and 1998.
1999 1998 --------------- -------------- Assets ------ Investments held in trust at fair valued determined by quoted market prices: Money Market Fund State Street Yield Enhanced STIF Fund $ 57,250,843 $ 27,162,114 Stable Income Fund The LaSalle Income Plus Fund 54,177,363 14,338,837 Bond Fund PIMCO Total Return Fund, Class A Shares 108,694,075 31,114,802 S&P 500 Index Fund State Street S&P 500 Flagship Fund Series C 257,741,161 129,652,061 Managed Equity Fund Lazard Equity Portfolio Fund 69,428,179 29,014,228 Growth Equity Fund Vanguard Institutional Index Fund 10,005,713 Cash 195,458 Brandywine Fund Inc. Common Shares 25,271,841 Seagram Stock Fund The Seagram Company Ltd. Common Shares 31,925,545 15,666,526 Collective Short Term Investment Fund 847,036 468,709 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,214,351 3,941,074 Collective Short Term Investment Fund 77,420 97,496 Dreyfus Small Company Value Fund Dreyfus Small Company Value Fund 15,733,411 2,314,513 MSDW International Equity Fund MSDW International Equity Fund 13,493,724 1,912,494 Dreyfus GIC Fund GICs and GACS 13,110,054 Collective Short Term Investment Fund 198,267 Loans to Participants 9,614,355 7,253,248 --------------- -------------- Total Investments 645,706,955 288,207,943 --------------- --------------
9 15 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST ( Continued )
1999 1998 --------------- -------------- Receivables Accrued interest and dividends $ 5,226,406 $ 187,437 Contributions receivable 2,068 640,375 Proceeds from securities sold 1,925,793 2,907,827 --------------- -------------- Total Receivables 7,154,267 3,735,639 --------------- -------------- Total assets 652,861,222 291,943,582 --------------- -------------- Liabilities Accounts payable for securities purchased 6,551,837 3,537,298 Administrative expenses 13,989 3,460 Other payables 49,311 - Benefit payments 1,944 - --------------- -------------- Total liabilities 6,617,081 3,540,758 --------------- -------------- Net Assets $646,244,141 $288,402,824 =============== ==============
As of December 31, 1999 and 1998, the equitable share of the Plan in the Master Trust is 2.11% and 3.05% respectively. As of December 31, 1999 and 1998, the net assets of the Master Trust available to the Plan for benefits in the individual investment funds were as follows:
1999 1998 --------------- -------------- Money Market Fund $ 1,993,922 $ 1,308,582 Stable Income Fund 888,166 573,001 Bond Fund 1,149,547 1,045,632 S & P 500 Index Fund 6,945,663 4,665,987 Managed Equity Fund 631,635 414,651 Growth Equity Fund 191,002 380,900 Seagram Stock Fund 826,609 58,313 Dreyfus Small Company Value Fund 403,173 46,002 MSDW International Equity Fund 235,785 20,452 GIC Fund 39,496 Loan accounts 347,684 286,601 --------------- -------------- Total $ 13,652,682 $ 8,800,121 =============== ==============
10 16 THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 12. INVESTMENT INCOME FROM MASTER TRUST The appreciation in fair value and other income is as follows: Investments held in trust at fair value determined by quoted market prices:
December 31, ----------------------------------- 1999 1998 --------------- -------------- Bond Fund $ 660 $ 3,763 S & P Index Fund 1,072,624 1,017,874 Managed Equity Fund 14,201 49,213 Growth Equity Fund 27,307 10,404 Seagram Stock Fund ( 65,460) 12,229 Dreyfus Small Company Value Fund 18,291 ( 2,166) MSDW International Equity Fund 10,231 15,857 --------------- -------------- Investment gains (net of investment losses) 1,077,854 1,107,174 Interest and dividends 154,341 167,873 --------------- -------------- Investment Income $ 1,232,195 $ 1,275,047 =============== ==============
13. Spencer Profit Sharing Plan Effective July 1, 1999, the Spencer Gifts Profit Sharing Plan was merged into the Plan. As a result of the merger, the Participants' entire account balances under the Spencer Gifts Profit Sharing Plan were transferred and credited to the Participants' Spencer Profit Sharing Account. 11 17 CONSENT OF INDEPENDENT ACCOUNTANTS The Seagram Company Ltd. The Seagram 401(k) Plan - Spencer Employees We hereby consent to the incorporation by reference in Registration Statement No. 333-19059 on Form S-8 of our Report dated June 20, 2000 which appears in your Annual Report on Form 11-K of The Seagram 401(k) Plan - Spencer Employees for the fiscal year ended December 31, 1999. /S/ Gutierrez & Co. Flushing, New York June 30, 2000 EX-99.B 3 ex99-b.txt FORM 11-K - 401K PLAN - UNI EMPLOYEES 1 EXHIBIT 99(b) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 COMMISSION FILE NUMBER 1-2275 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES 375 Park Avenue New York, New York 10152 (Full title of the plan and the address of the plan) THE SEAGRAM COMPANY LTD. 1430 Peel Street Montreal, Quebec, Canada, H3A 1S9 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Seagram 401(k) Plan - UNI Employees (the "UNI Plan") is subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Attached hereto are the financial statements of the UNI Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the UNI Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 3 3 SIGNATURES 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 their behalf by the undersigned hereunto duly authorized. THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES By /s/ John Borgia -------------------------------------- John Borgia Member of Investment Committee Date: June 30, 2000 4 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 5 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES INDEX TO FINANCIAL STATEMENTS
Page ---- Independent Auditors' Report 1 Statement of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-12
6 INDEPENDENT AUDITORS' REPORT To the Administrative Committee of The Seagram 401(k) Plan - UNI Employees We have audited the accompanying statements of net assets available for benefits of The Seagram 401(k) Plan - UNI Employees (the "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 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 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 net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. /s/ Gutierrez & Co. Flushing, New York June 20, 2000 7 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ------------------------------- 1999 1998 -------------- -------------- Net assets held in trust by Bank of New York ( Note 11 ) $ 1,166,973 $ 1,044,050 -------------- -------------- NET ASSETS AVAILABLE FOR BENEFITS $ 1,166,973 $ 1,044,050 ============== ==============
The accompanying notes are an integral part of the financial statements. 2 8 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, ----------------------------- 1999 1998 ------------ ------------ CONTRIBUTIONS Participating Employees $ 123,710 $ 188,588 Participating Companies 51,034 53,200 ------------ ------------ 174,744 241,788 ------------ ------------ INVESTMENT INCOME ON ASSETS HELD BY BANK OF NEW YORK Net appreciation in fair value of investments 132,648 168,173 Dividends and interest 13,833 20,805 PARTICIPANT WITHDRAWALS ( 198302) ( 307,555) ------------ ------------ INCREASE IN PLAN EQUITY 122,923 123,211 PLAN EQUITY AT BEGINNING OF YEAR 1,044,050 920,839 ------------ ------------ PLAN EQUITY AT END OF YEAR $ 1,166,973 $ 1,044,050 ============ ============
The accompanying notes are an integral part of the financial statements. 3 9 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of The Seagram 401 (k) Plan - UNI Employees (the "Plan") conform with generally accepted accounting principles. The more significant accounting policies are: Basis of Accounting The accompanying financial statements of the Plan are maintained on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Investment Valuation The assets are held in trust by Bank of New York (Trustee) in the Joseph E. Seagram & Sons, Inc. Master Trust (Master Trust), which also includes assets of the 401(k) plans of the company's affiliates, Universal Studios, Inc. and Spencer Gifts, Inc. Effective July 1, 1999, the assets of the PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees were added to the Master Trust. The related investment income and appreciation in fair value represents allocations to the Plan based upon the ratio of the Plan's assets to total Master Trust Assets. Investment securities are recorded and valued as follows: United States government obligations at fair value based on the current market yields; temporary investments in short-term investment funds at cost which in the normal course approximates market value; securities representing units of other funds at net asset value; The Seagram Company Ltd. common shares at the closing price reported on the composite tape of the New York Stock Exchange on the valuation date. Security Transactions Security transactions are accounted for on a trade date basis with the average cost basis used for determining the cost of investments sold. Interest income is recorded on an accrual basis. Income on securities purchased under agreements to resell is accounted for at the repurchase rate. Changes in discount on coupons detached from United States Treasury Bonds are reflected as unrealized appreciation. 4 10 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan originally established as the UNI Distribution Corp. Employees Savings Plan ("UNI Plan") and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Effective January 1, 1997, the UNI Plan was amended and continued in the form of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Seagram Plan"). The name of the UNI Plan was changed to the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - UNI Employees (the "Plan"). Effective January 1, 1999, the name of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - UNI Employees was changed to The Seagram 401(k) Plan - UNI Employees. To simplify plan administration, the Plan was amended in the form of the Seagram Plan, including certain modifications to the terms, to accomodate the benefits provisions solely applicable to eligible employees of UMG Manufacturing and Logistics, Inc. ("UNI"). Notwithstanding the adoption of the form of the Seagram Plan, the Plan has continued its existence as a separate plan. Plan assets are solely available for the benefit of and used to satisfy the liabilities incurred on behalf of employees of the Plan. The Plan covers certain employees of UNI and certain of its United States subsidiaries (collectively, the "Participating Companies"), excluding persons who are members of a labor union, guild or other collective bargaining unit unless the employee is salaried and paid in whole or in part by UNI. In addition, interns must complete one year of service before they are eligible to participate in the Plan. The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's account by the participant and amounts contributed under certain circumstances, by the Participating Companies (see Note 4). Under the Plan, a participant is not provided with any fixed benefit. The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and other adjustments, and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among four accounts specified in the Plan: pre-tax account, company match account, after-tax account and rollover account (the "Accounts"). Such contributions are invested as designated by the participants in one or more of the investment funds referred to in Note 3, and are accumulated and invested in the Master Trust. Plan assets are solely available for the benefit of and used to satisfy the liabilities incurred on behalf of employees covered by the Plan. The Plan is administered by the Joseph E. Seagram & Sons, Inc. (the "Company") through an Administrative Committee appointed by the Board of Directors of the Company. 5 11 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 3. INVESTMENT PROGRAM During the year ended December 31, 1999, the Plan was comprised of nine investment funds: (i) the Money Market Fund investing primarily in the State Street Yield Enhanced STIF Fund managed by State Street Bank and Trust Company; (ii) the Stable Income Fund investing in the La Salle Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund investing in PIMCO Total Return Fund, Class A Shares (which replaced the Putnam Income Fund, Class A Shares on June 1, 1998) managed by PIMCO; (iv) the S&P 500 Index Fund investing in the S&P 500 Flagship Fund, Series C, managed by State Street Bank and Trust Company; (v) the Managed Equity Fund investing in Lazard Equity Portfolio managed by Lazard Freres Asset Management; (vi) the Growth Equity Fund investing in Brandywine Fund, Inc. managed by Freiss Associates (up to February 1, 1999); on December 1, 1999, the Growth Equity Fund was reestablished investing in Vanguard Institutional Index Fund managed by Vanguard; (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares; :(viii) the Dreyfus Small Company Value Fund investing in the Dreyfus Small Company Value Fund managed by Dreyfus and (ix) the MSDW International Equity Fund investing in MSDW International Equity Fund managed by Morgan Stanley. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. 4. CONTRIBUTIONS Non-highly compensated employees, as defined by the Plan , may elect to contribute to their pre-tax accounts on a pre-tax basis ("Pre-Tax Contributions) and/or to their after-tax accounts on an after-tax basis ("After-Tax Contributions") through payroll deductions of 1% to 14% (in the aggregate) (up to 17% effective January 1,1999) of their annual salary (as defined in the Plan), in multiples of 1%, in any combination. Highly-compensated employees, as defined, may elect to contribute from 1% to 10% of their annual salary on a pre-tax basis and from 1% to 10% of their annual salary on an after-tax basis; provided, the aggregate percentage of the contributions does not exceed 10% (effective January 1, 1999, the aggregate precentage of pre-tax and after-tax contribution is 17% with a 10% limit of their pre-tax account) of their annual salary. Pre-tax Contributions and After-Tax Contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan provides for mandatory matching contributions by the Participating Companies payable to the participants' company match accounts. The Participating Companies, except as herein noted, contribute on behalf of the participants 40% of the participants'contributions not exceeding 5% of their salary. Effective January 1, 1999, the Participating Companies matching contribution was increased to 60% of the first 6% of the Participants' Pre-Tax and After-Tax Contributions. The Participating Companies matching contributions are subject to limitations imposed by federal laws for qualified retirement plans. 6 12 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 4. CONTRIBUTIONS (Continued) The Plan will accept into participants' rollover Accounts cash received by participants from a qualified plan within the time prescribed by applicable law ("Rollover Contributions"). The Participating Companies may make discretionary contributions in an amount to be determined by the Participating Companies. The Participating Companies have not made discretionary contributions since the inception of the Plan. 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her contributions and rollover accounts. He or she has a non-forfeitable right to the value of his or her company match account upon the attainment of age 60, disability (as defined in the Plan ) or death. Upon termination of employment for any other reason, a participant vests in the funds held in his or her company match account in accordance with the following vesting schedule:
Years of Service Vested Percentage ---------------- ----------------- Less than 1 0% At least 1, but less than 2 20% At least 2, but less than 3 40% At least 3, but less than 4 60% At least 4, but less than 5 80% 5 or more 100%
Upon termination of employment for reasons other than the attainment of age 60, disability or death of a participant who was not fully vested in his or her company match account, the nonvested portion of the participant's company match account shall be forfeited. Any amount forfeited shall be applied to reduce the Participating Companies' contributions. Any amount forfeited shall be restored if the participant is re-employed by a Participating Company before incurring a five year break in service and if the participant repays to the Plan (within five years after his or her reemployment commencement date) an amount in cash equal to the full amount distributed to him or her from the Plan on account of termination of employment, excluding amounts from the after-tax and rollover accounts at the participant's election. The nonvested interest of terminated participants serves to reduce Participating Company contributions in the accordance with the terms of the Plan. The Participating Companies used $2,508 in forfeitures to offset their contributions during the year ended December 31, 1999. 7 13 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 6. DISTRIBUTIONS Upon termination of employment, after the attainment of age 60 or for reason of disability or death, the participant or his or her beneficiary shall receive the value of his or her Accounts. However, if the termination of employment is for reasons other than the attainment of age 60, disability or death, the participant shall receive only the value of the vested funds in his or her Accounts (See Note 5). Benefits are recorded when paid. In accordance with the procedures established by the Administrative Committee and the terms of the Plan, a terminated employee may elect to defer final distribution from the Plan. Upon such election, the amount in the participant's vested interest in the Plan is entitled to continue to receive investment income and is held by the Trustee until the date of distribution as elected by the participant. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts in accordance with the provisions of the Plan. 7. LOANS TO PARTICIPANTS A participant may apply for loans up to the lesser of $50,000 or 50% of the value of the vested portion of the participant's Accounts. The minimum loan amount is $1,000. The maximum repayment terms are 5 years for general purpose loans and 25 years for principal residence loans. Applications for loans must be approved by the Administrative Committee. The amounts borrowed are transferred from the investment funds in which the participant's Accounts are currently invested. Repayments and interest thereon are credited to the participant's current investment funds through payroll deductions made each pay period. The interest rate for loans is based on the prime rate on the first business day of the month in which the loan is made plus one percentage point. 8. TAX STATUS OF PLAN The Internal Revenue Service has ruled by a letter dated April 20, 2000 that the Plan is qualified under Section 401(a) of the Internal Revenue Code, as amended. So long as the Plan continues to be so qualified, it is not subject to Federal income taxes. Participants are not currently subject to income tax on the Participating Companies' contributions to the Plan or on income earned by the Plan. Benefits distributed to participants or to their beneficiaries may be taxable to them. The tax treatment of the value of such benefits depends on the event giving rise to the distribution and the method of distribution selected. 9. RELATED PARTY TRANSACTIONS Some of the Plan expenses including trustee, custodial, and certain recordkeeping fees, are paid by the Company, and personnel and facilities of the Company are used by the Plan at no charge. 8 14 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 10. TERMINATION OF THE PLAN The Board of Directors of the Company may terminate the Plan at any time. In the case of termination, the rights of participants to their accounts shall be vested as of the date of termination. 11. ASSETS HELD IN TRUST The assets of the Plan are invested in the Master Trust held by the Trustee where the assets of other related employee benefit plans of affiliates are invested on a commingled basis. The Master Trust net assets consist of the following classification of assets and liabilities as of December 31, 1999 and 1998.
1999 1998 ------------------- ----------------- Assets Investments held in trust at fair valued determined by quoted market prices: Money Market Fund State Street Yield Enhanced STIF Fund $ 57,250,843 $ 27,162,114 Stable Income Fund The LaSalle Income Plus Fund 54,177,363 14,338,837 Bond Fund PIMCO Total Return Fund, Class A Shares 108,694,075 31,114,802 S&P 500 Index Fund State Street S&P 500 Flagship Fund Series C 257,741,161 129,652,061 Managed Equity Fund Lazard Equity Portfolio Fund 69,428,179 29,014,228 Growth Equity Fund Vanguard Institutional Index Fund 10,005,713 Cash 195,458 Brandywine Fund Inc. Common Shares 25,271,841 Seagram Stock Fund The Seagram Company Ltd. Common Shares 31,925,545 15,666,526 Collective Short Term Investment Fund 847,036 468,709 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,214,351 3,941,074 Collective Short Term Investment Fund 77,420 97,496
9 15 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST ( Continued )
1999 1998 --------------- ------------------ Dreyfus Small Company Value Fund Dreyfus Small Company Value Fund $ 15,733,411 $ 2,314,513 MSDW International Equity Fund MSDW International Equity Fund 13,493,724 1,912,494 Dreyfus GIC Fund GICs and GACS 13,110,054 Collective Short Term Investment Fund 198,267 Loans to Participants 9,614,355 7,253,248 --------------- ------------------ Total Investments 645,706,955 288,207,943 --------------- ------------------ Receivables Accrued interest and dividends 5,226,406 187,437 Contributions receivable 2,068 640,375 Proceeds from securities sold 1,925,793 2,907,827 --------------- ------------------ Total Receivables 7,154,267 3,735,639 --------------- ------------------ Total assets 652,861,222 291,943,582 --------------- ------------------ Liabilities Accounts payable for securities purchased 6,551,837 3,537,298 Administrative expenses 13,989 3,460 Other payables 49,311 Benefit payments 1,944 - --------------- ------------------ Total liabilities 6,617,081 3,540,758 --------------- ------------------ Net Assets $646,244,141 $288,402,824 =============== ==================
As of December 31, 1999 and 1998, the equitable share of the Plan in the Master Trust is 00.18% and 00.36% respectively. 10 16 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST ( Continued ) As of December 31, 1999 and 1998, the net assets of the Master Trust available to the Plan for benefits in the individual investment funds were as follows:
1999 1998 ---------- ---------- Money Market Fund $ 195,247 $ 161,251 Stable Income Fund 27,777 34,578 Bond Fund 105,501 119,944 S & P 500 Index Fund 688,171 571,232 Managed Equity Fund 55,018 46,198 Growth Equity Fund 12,855 54,558 Seagram Stock Fund 47,967 27,598 Dreyfus Small Company Value Fund 11,684 4,878 MSDW International Equity Fund 7,172 2,212 Loan accounts 15,401 21,601 ---------- ---------- Total $1,166,973 $1,044,050 ========== ==========
12. INVESTMENT INCOME FROM MASTER TRUST The appreciation in fair value and other income is as follows: Investments held in trust at fair value determined by quoted market prices:
December 31, 1999 1998 ---------- ---------- Bond Fund $ (174) $ 449 S & P Index Fund 120,226 156,827 Managed Equity Fund 2,114 4,688 Growth Equity Fund 3,869 1,134 Seagram Stock Fund 4,818 3,493 Dreyfus Small Company Value Fund 1,096 765 MSDW International Equity Fund 705 817 --------- --------- Investment gains (net of investment losses) 132,648 168,173 Interest and dividends 13,833 20,805 --------- --------- Investment Income $ 146,487 $ 188,978 ========= =========
11 17 THE SEAGRAM 401(k) PLAN - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 13. Special Vesting Provisions for Certain UNI/Pinckneyville Employees On May 22, 1999, certain UNI/Pinckneyville Employees became 100% vested in their Participant's Matching Contributions Account, Frozen Matching Contributions Account and Universal Profit Sharing Account provided they meet all of the specified requirements. 12 18 CONSENT OF INDEPENDENT ACCOUNTANTS The Seagram Company Ltd. The Seagram 401(k) Plan - UNI Employees We hereby consent to the incorporation by reference in Registration Statement No. 333-19059 on Form S-8 of our Report dated June 20, 2000 which appears in your Annual Report on Form 11-K of The Seagram 401(k) Plan - UNI Employees for the fiscal year ended December 31, 1999. /s/ Gutierrez & Co. Flushing, New York June 30, 2000 EX-99.C 4 ex99-c.txt FORM 11-K - 401K PLAN - UNIVERSAL EMPLOYEES 1 EXHIBIT 99(c) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 COMMISSION FILE NUMBER 1-2275 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES 375 Park Avenue New York, New York 10152 (Full title of the plan and the address of the plan) THE SEAGRAM COMPANY LTD. 1430 Peel Street Montreal, Quebec, Canada, H3A 1S9 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Seagram 401(k) Plan - Universal Employees (the "Universal Plan") is subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Attached hereto are the financial statements of the Universal Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Universal Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 3 3 SIGNATURES 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 their behalf by the undersigned hereunto duly authorized. THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES By /s/ John Borgia ---------------------------------- John Borgia Member of Investment Committee Date: June 30, 2000 4 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 5 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES INDEX TO FINANCIAL STATEMENTS
Page ---- Independent Auditors' Report 1 Statement of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-11
6 INDEPENDENT AUDITORS' REPORT To the Administrative Committee of The Seagram 401(k) Plan - Universal Employees We have audited the accompanying statements of net assets available for benefits of The Seagram 401(k) Plan - Universal Employees (the "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 generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1999 and 1998, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. /s/ Gutierrez & Co. Flushing, New York June 20, 2000 7 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ----------------------------------- 1999 1998 ------------- ------------- Net assets held in trust by Bank of New York ( Note 11 ) $ 336,446,807 $ 107,133,463 ------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS $ 336,446,807 $ 107,133,463 ============= =============
The accompanying notes are an integral part of the financial statements. 2 8 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, --------------------------------- 1999 1998 --------------- -------------- CONTRIBUTIONS Participating Employees $ 19,861,097 $ 16,661,919 Participating Companies - Profit sharing 8,682,623 Participating Companies 3,938,951 3,289,118 --------------- -------------- 32,482,671 19,951,037 --------------- -------------- INVESTMENT INCOME ON ASSETS HELD BY BANK OF NEW YORK Net appreciation in fair value of investments 27,855,583 9,719,156 Dividends and interest 5,828,657 ( 199,631) PARTICIPANT WITHDRAWALS ( 39,494946) ( 19,711,473) ------------- ------------- INCREASE IN PLAN EQUITY 26,671,965 9,759,089 TRANSFER OF UNIVERSAL PROFIT SHARING PLAN 222,176,014 TRANSFER OF GRP RECORDS, INC. EMPLOYEE SAVINGS PLAN AND GRP RECORDS, INC. PROFIT SHARING PLAN 1,588,778 TRANSFER OF GEFFEN RECORDS 401(k) PLAN 5,876,587 PLAN EQUITY AT BEGINNING OF YEAR 107,133,463 97,374,374 ------------- ------------- PLAN EQUITY AT END OF YEAR $363,446,807 $ 107,133,463 ============ =============
The accompanying notes are an integral part of the financial statements. 3 9 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the The Seagram 401(k) Plan - Universal Employees (formerly Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates- Universal Employees) (the "Plan") conform with generally accepted accounting principles. The more significant accounting policies are: Basis of Accounting The accompanying financial statements of the Plan are maintained on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Investment Valuation The assets are held in trust by Bank of New York (Trustee) in the Joseph E. Seagram & Sons, Inc. Master Trust (Master Trust), which also includes assets of the 401(k) plans of the company's affiliates, UMG Manufacturing and Logistics, Inc. and Spencer Gifts, Inc. Effective July 1, 1999, the assets of the PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees were added to the Master Trust. The related investment income and appreciation in fair value represents allocations to the Plan based upon the ratio of the Plan's assets to total Master Trust Assets. Investment securities are recorded and valued as follows: United States government obligations at fair value based on the current market yields; temporary investments in short-term investment funds at cost which in the normal course approximates market value; securities representing units of other funds at net asset value; The Seagram Company Ltd. common shares at the closing price reported on the composite tape of the New York Stock Exchange on the valuation date. Security Transactions Security transactions are accounted for on a trade date basis with the average cost basis used for determining the cost of investments sold. Interest income is recorded on an accrual basis. Income on securities purchased under agreements to resell is accounted for at the repurchase rate. Changes in discount on coupons detached from United States Treasury Bonds are reflected as unrealized appreciation. 4 10 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan originally established as the MCA, Inc. Employee Savings Plan ("MCA Plan") and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Effective January 1, 1997, the MCA Plan was amended and continued in the form of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Seagram Plan"). The name of the MCA Plan was changed to the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Universal Employees (the "Plan"). Effective January 1, 1999,the name of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Universal Employees was changed to The Seagram 401(k) Plan - Universal Employees. To simplify plan administration, the Plan was amended in the form of the Seagram Plan, including certain modifications to the terms, to accomodate the benefits provisions solely applicable to eligible employees of Universal Studios, Inc. ("Universal"). Notwithstanding the adoption of the form of the Seagram Plan, the Plan has continued its existence as a separate plan. Plan assets are solely available for the benefit of and used to satisfy the liabilities incurred on behalf of employees of the Plan. The Plan covers employees of Universal and certain of its United States subsidiaries (collectively, the "Participating Companies") who are either (i) salaried employees or (ii) hourly employees employed in a classification designated by the Participating Companies from time to time, excluding persons who are members of a labor union, guild or other collective bargaining unit unless the employee is salaried and paid in whole or in part by Universal or whose employment is subject to certain labor agreements, persons employed on a special basis and persons by an operating unit of the Participating Companies to which the Plan has not been extended. In addition, non-salaried employees of Hilltop Service, Inc., seasonal and temporary employees of Universal Studios Tour, certain temporary clerical employees and interns and UMG Manufacturing Logistics, Inc. employees of the Memphis and Reno locations must complete one year of service before they are eligible to participate in the Plan. The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's account by the participant and amounts contributed, under certain circumstances, by the Participating Companies (see Note 4). Under the Plan, a participant is not provided with any fixed benefit. The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and other adjustments, and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among five accounts specified in the Plan: pre-tax account, company match account, after-tax account, QNEC account and rollover account (the "Accounts"). Such contributions are invested as designated by the participants in one or more of the investment funds referred to in Note 3, and are accumulated and invested in the Master Trust. Plan assets are solely available for the benefit of and used to satisfy the liabilities 5 11 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN (Continued) incurred on behalf of employees covered by the Plan. The Plan is administered by the Joseph E. Seagram & Sons, Inc. (the "Company") through an Administrative Committee appointed by the Board of Directors of the Company. Effective July 1, 1998, the Universal Profit Sharing Plan was merged with the Plan, however, the assets were transferred to the Plan on January 1, 1999. As a result of the merger, the Plan retains the GIC Fund held by the Universal Profit Sharing Plan; however, no election may be made to transfer any funds into the GIC Fund. GRP Records, Inc. Employee Savings Plan, GRP Records, Inc. Profit Sharing Plan and Geffen Records 401(k) Plan were merged with the Plan effective April 1, 1999. 3. INVESTMENT PROGRAM During the year ended December 31, 1999, the Plan was comprised of nine investment funds: (i) the Money Market Fund investing primarily in the State Street Yield Enhanced STIF Fund managed by State Street Bank and Trust Company; (ii) the Stable Income Fund investing in the La Salle Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund investing in PIMCO Total Return Fund, Class A Shares (which replaced the Putnam Income Fund, Class A Shares on June 1, 1998) managed by PIMCO; (iv) the S&P 500 Index Fund investing in the S&P 500 Flagship Fund, Series C, managed by State Street Bank and Trust Company; (v) the Managed Equity Fund investing in Lazard Equity Portfolio managed by Lazard Freres Asset Management; (vi) the Growth Equity Fund investing in Brandywine Fund, Inc. managed by Freiss Associates (up to February 1, 1999); on December 1, 1999, the Growth Equity Fund was reestablished investing in Vanguard Institutional Index Fund managed by Vanguard; (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares; :(viii) the Dreyfus Small Company Value Fund investing in the Dreyfus Small Company Value Fund managed by Dreyfus and (ix) the MSDW International Equity Fund investing in MSDW International Equity Fund managed by Morgan Stanley. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. 4. CONTRIBUTIONS Non-highly compensated employees, as defined by the Plan, may elect to contribute to their pre-tax accounts on a pre-tax basis ("Pre-Tax Contributions) and/or to their after-tax accounts on an after-tax basis ("After-Tax Contributions") through payroll deductions of 1% to 14% (in the aggregate) ( 17% effective January 1, 1999) of their annual salary (as defined in the Plan), in multiples of 1%, in any combination. Effective January 1, 1999, highly compensated employees, as defined by the Plan may contribute up to 17% in the aggregate to their pre-tax and after tax accounts with a limit of 10% of their pre-tax account. Pre-tax Contributions and After-Tax Contributions are subject to limitations imposed by federal laws for qualified retirement plans. 6 12 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 4. CONTRIBUTIONS (Continued) The Plan provides for mandatory matching contributions by the Participating Companies payable to the participants' company match accounts. The Participating Companies, except as herein noted, contribute on behalf of the participants 40% of the participants'contributions not exceeding 5% of their salary. Effective January 1, 1999, the Participating Companies matching contribution was increased to 60% of the first 6% of the Participants' Pre-Tax and After-Tax Contributions. The Participating Companies matching contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan will accept into participants' rollover accounts cash received by participants from a qualified plan within the time prescribed by applicable law ("Rollover Contributions"). The Participating Companies may make discretionary contributions in an amount to be determined by the Participating Companies. The Participating Companies have not made discretionary contributions since the inception of the Plan. 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her contributions and rollover accounts. He or she has a non-forfeitable right to the value of his or her company match account upon the attainment of age 60, disability (as defined in the Plan ) or death. Upon termination of employment for any other reason, a participant vests in the funds held in his or her company match account in accordance with the following vesting schedule: Years of Service Vested Percentage ---------------- ----------------- Less than 1 0% At least 1, but less than 2 20% At least 2, but less than 3 40% At least 3, but less than 4 60% At least 4, but less than 5 80% 5 or more 100% Upon termination of employment for reasons other than the attainment of age 60, disability or death of a participant who was not fully vested in his or her company match account, the nonvested portion of the participant's company match account shall be forfeited. Any amount forfeited shall be applied to reduce the Participating Companies' contributions. Any amount forfeited shall be restored if the participant is re-employed by a Participating Company before incurring a five year break in service and if the participant repays to the Plan (within five years after his or her reemployment commencement date) an amount in cash equal to the full amount distributed to him or her from the Plan on account of termination of employment, excluding amounts from the after-tax and rollover accounts at the participant's election. 7 13 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 5. VESTING (Continued) The nonvested interest of terminated participants serves to reduce Participating Company contributions in accordance with the terms of the Plan. The Participating Companies used $2,820,071 in forfeitures to offset their contributions during the year ended December 31, 1999. 6. DISTRIBUTIONS Upon termination of employment, after the attainment of age 60 or for reason of disability or death, the participant or his or her beneficiary shall receive the value of his or her Accounts. However, if the termination of employment is for reasons other than the attainment of age 60, disability or death, the participant shall receive only the value of the vested funds in his or her Accounts (See Note 5). Benefits are recorded when paid. In accordance with the procedures established by the Administrative Committee and the terms of the Plan, a terminated employee may elect to defer final distribution from the Plan. Upon such election, the amount in the participant's vested interest in the Plan is entitled to continue to receive investment income and is held by the Trustee until the date of distribution as elected by the participant. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts in accordance with the provisions of the Plan. 7. LOANS TO PARTICIPANTS A participant may apply for loans up to the lesser of $50,000 or 50% of the value of the vested portion of the participant's Accounts. The minimum loan amount is $1,000. The maximum repayment terms are 5 years for general purpose loans and 25 years for principal residence loans. Applications for loans must be approved by the Administrative Committee. The amounts borrowed are transferred from the investment funds in which the participant's Accounts are currently invested. Repayments and interest thereon are credited to the participant's current investment funds through payroll deductions made each pay period. The interest rate for loans is based on the prime rate on the first business day of the month in which the loan is made plus one percentage point. 8. TAX STATUS OF PLAN The Internal Revenue Service has ruled by a letter dated April 20, 2000 that the Plan is qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended. So long as the Plan continues to be so qualified, it is not subject to Federal income taxes. Management has received the Internal Revenue Service's Compliance Statement on August 29, 1999. 8 14 THE SEAGRAM 401 (k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 8. TAX STATUS OF PLAN (Continued) Participants are not currently subject to income tax on the Participating Companies' contributions to the Plan or on income earned by the Plan. Benefits distributed to participants or to their beneficiaries may be taxable to them. The tax treatment of the value of such benefits depends on the event giving rise to the distribution and the method of distribution selected. 9. RELATED PARTY TRANSACTIONS Some of the Plan expenses including trustee, custodial, and certain recordkeeping fees, are paid by the Company, and personnel and facilities of the Company are used by the Plan at no charge. 10. TERMINATION OF THE PLAN The Board of Directors of the Company may terminate the Plan at any time. In the case of termination, the rights of participants to their accounts shall be vested as of the date of termination. 11. ASSETS HELD IN TRUST The assets of the Plan are invested in the Master Trust held by the Trustee where the assets of other related employee benefit plans of affiliates are invested on a commingled basis. The Master Trust net assets consist of the following classification of assets and liabilities as of December 31, 1999 and 1998.
1999 1998 --------------- -------------- Assets ------ Investments held in trust at fair valued determined by quoted market prices: Money Market Fund State Street Yield Enhanced STIF Fund $ 57,250,843 $ 27,162,114 Stable Income Fund The LaSalle Income Plus Fund 54,177,363 14,338,837 Bond Fund PIMCO Total Return Fund, Class A Shares 108,694,075 31,114,802 S&P 500 Index Fund State Street S&P 500 Flagship Fund Series C 257,741,161 129,652,061 Managed Equity Fund Lazard Equity Portfolio Fund 69,428,179 29,014,228 Growth Equity Fund Vanguard Institutional Index Fund 10,005,713 Cash 195,458 Brandywine Fund Inc. Common Shares 25,271,841
9 15 THE SEAGRAM 401(k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST ( Continued )
1999 1998 ------------- ------------- Seagram Stock Fund The Seagram Company Ltd. Common Shares $ 31,925,545 $ 15,666,526 Collective Short Term Investment Fund 847,036 468,709 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,214,351 3,941,074 Collective Short Term Investment Fund 77,420 97,496 Dreyfus Small Company Value Fund Dreyfus Small Company Value Fund 15,733,411 2,314,513 MSDW International Equity Fund MSDW International Equity Fund 13,493,724 1,912,494 Dreyfus GIC Fund GICs and GACS 13,110,054 Collective Short Term Investment Fund 198,267 Loans to Participants 9,614,355 7,253,248 ------------- ------------- Total Investments 645,706,955 288,207,943 ------------- ------------- Receivables Accrued interest and dividends 5,226,406 187,437 Contributions receivable 2,068 640,375 Proceeds from securities sold 1,925,793 2,907,827 ------------- ------------- Total Receivables 7,154,267 3,735,639 ------------- ------------- Total assets 652,861,222 291,943,582 ------------- ------------- Liabilities ----------- Accounts payable for securities purchased 6,551,837 3,537,298 Administrative expenses 13,989 3,460 Other payables 49,311 Benefit payments 1,944 - ------------- ------------- Total liabilities 6,617,081 3,540,758 ------------- ------------- Net Assets $646,244,141 $288,402,824 ============= =============
As of December 31, 1999 and 1998, the equitable share of the Plan in the Master Trust is 56.23% and 37.15% respectively. 10 16 THE SEAGRAM 401 (k) PLAN - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST ( Continued ) 1999 1998 ------------ -------------
As of December 31, 1999 and 1998, the net assets of the Master Trust available to the Plan for benefits in the individual investment funds were as follows:
1999 1998 ------------ ------------- Money Market Fund $ 32,089,479 $ 12,764,807 Stable Income Fund 42,241,695 4,472,815 Bond Fund 77,403,378 12,081,666 S & P 500 Index Fund 150,166,576 52,881,547 Managed Equity Fund 18,045,293 10,178,632 Growth Equity Fund 3,233,963 8,369,596 Seagram Stock Fund 11,371,470 2,968,510 Dreyfus Small Company Value Fund 6,219,130 650,991 MSDW International Equity Fund 5,476,611 464,131 GIC Fund 13,270,405 Loan accounts 3,928,807 2,300,768 ------------ ------------- Total $363,446,807 $ 107,133,463 ============ =============
12. INVESTMENT INCOME FROM MASTER TRUST The appreciation in fair value and other income is as follows: Investments held in trust at fair value determined by quoted market prices:
December 31, 1999 1998 ---------------- ----------------- Bond Fund $( 132,758) $( 24,358) S & P Index Fund 26,311,296 9,830,160 Managed Equity Fund 415,634 677,017 Growth Equity Fund 637,903 ( 1,529,204) Seagram Stock Fund ( 219,869) 401,895 Dreyfus Small Company Value Fund 431,092 ( 14,044) MSDW International Equity Fund 412,285 377,690 ---------------- ----------------- Investment gains (net of investment losses) 27,855,583 9,719,156 ---------------- ----------------- Interest and dividends 5,828,657 ( 199,631) ---------------- ----------------- Investment Income $ 33,684,240 $ 9,519,525 ================ =================
11 17 CONSENT OF INDEPENDENT ACCOUNTANTS The Seagram Company Ltd. The Seagram 401(k) Plan - Universal Employees We hereby consent to the incorporation by reference in Registration Statement No. 333-19059 on Form S-8 of our Report dated June 20, 2000 which appears in your Annual Report on Form 11-K of The Seagram 401(k) Plan Universal Employees for the fiscal year ended December 31, 1999. /s/ Gutierrez & Co. Flushing, New York June 30, 2000 EX-99.D 5 ex99-d.txt FORM 11-K - THE SEAGRAM 401K PLAN 1 EXHIBIT 99(d) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 COMMISSION FILE NUMBER 1-2275 THE SEAGRAM 401(k) PLAN 375 Park Avenue New York, New York 10152 (Full title of the plan and the address of the plan) THE SEAGRAM COMPANY LTD. 1430 Peel Street Montreal, Quebec, Canada, H3A 1S9 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Seagram 401(k) Plan (the "Seagram Plan") is subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Attached hereto are the financial statements of the Seagram Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Spencer Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 3 3 SIGNATURES 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 their behalf by the undersigned hereunto duly authorized. THE SEAGRAM 401(k) PLAN By /s/ John Borgia ------------------------------ John Borgia Member of Investment Committee Date: June 30, 2000 4 THE SEAGRAM 401(k) PLAN FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 5 THE SEAGRAM 401(k) PLAN INDEX TO FINANCIAL STATEMENTS
Page ---- Independent Auditors' Report 1 Statement of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-12
6 INDEPENDENT AUDITORS' REPORT To the Administrative Committee of The Seagram 401(k) Plan We have audited the accompanying statements of net assets available for benefits of The Seagram 401(k) Plan (the "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 generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1999 and 1998, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. /s/ Grutierrez & Co. Flushing, New York June 20, 2000 7 THE SEAGRAM 401(k) PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ---------------------------- 1999 1998 ------------ ------------ Net assets held in trust by Bank of New York ( Note 11 ) $193,136,742 $171,411,447 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $193,136,742 $171,411,447 ============ ============
The accompanying notes are an integral part of the financial statements. 2 8 THE SEAGRAM 401(k) PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, -------------------------------------- 1999 1998 -------------- -------------- CONTRIBUTIONS Participating Employees $ 10,888,836 $ 14,134,387 Participating Companies 3,699,710 2,309,726 -------------- -------------- 14,588,546 16,444,113 -------------- -------------- INVESTMENT INCOME ON ASSETS HELD BY BANK OF NEW YORK Net appreciation in fair value of investments 18,678,667 17,280,000 Dividends and interest 2,919,629 7,818,199 PARTICIPANT WITHDRAWALS (14,461,547) (14,548,662) -------------- -------------- INCREASE IN PLAN EQUITY 21,725,295 26,993,650 TRANSFER OF ASSETS OF TROPICANA (89,230,636) PLAN EQUITY AT BEGINNING OF YEAR 171,411,447 233,648,433 -------------- -------------- PLAN EQUITY AT END OF YEAR $193,136,742 $171,411,447 ============== ==============
The accompanying notes are an integral part of the financial statements. 3 9 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of The Seagram 401(k) Plan (the "Plan") (formerly the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates) conform with generally accepted accounting principles. The more significant accounting policies are: Basis of Accounting The accompanying financial statements of the Plan are maintained on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Investment Valuation Effective January 1, 1997, the assets are held in trust by Bank of New York (Trustee) in the Joseph E. Seagram & Sons, Inc. Master Trust (Master Trust), which also includes assets of the 401(k) plans of the company's affiliates, Universal Studios, Inc., UMG Manufacturing and Logistics, Inc. and Spencer Gifts, Inc., and effective July 1, 1999, the assets of The PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees were added to the Master Trust. The related investment income and appreciation in fair value represents allocations to the Plan based upon the ratio of the Plan's assets to total Master Trust Assets. Investment securities are recorded and valued as follows: United States government obligations at fair value based on the current market yields; temporary investments in short-term investment funds at cost which in the normal course approximates market value; securities representing units of other funds at net asset value; The Seagram Company Ltd. common shares and The Coca-Cola Company common stock at the closing price reported on the composite tape of the New York Stock Exchange on the valuation date. Security Transactions Security transactions are accounted for on a trade date basis with the average cost basis used for determining the cost of investments sold. Interest income is recorded on an accrual basis. Income on securities purchased under agreements to resell is accounted for at the repurchase rate. Changes in discount on coupons detached from United States Treasury Bonds are reflected as unrealized appreciation. 4 10 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan established as of August 1, 1985 by Joseph E. Seagram & Sons, Inc. (the "Company") and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan covers employees of the Company and certain of its United States subsidiaries (collectively, the "Participating Companies") whose annual base salary or regular wages, (excluding overtime, bonuses, commissions or other special or contingent payments) exceeds $15,186 as of December 31, 1997 (increased on the last day of each year by 4%) and who are either (i) salaried employees, or (ii) hourly employees not employed in a classification designated by the Participating Companies from time to time, excluding various categories of employees specified in the Plan including, but not limited to, persons represented by a collective bargaining agent, persons employed on a special basis, and persons employed by an operating unit of the Participating Companies to which the Plan has not been extended. The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's account by the participant and, amounts contributed under certain circumstances, by the Participating Companies (see Note 4). Under the Plan, a participant is not provided with any fixed benefit. The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and other adjustments, and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among four accounts specified in the Plan: pre-tax account, company match account, after-tax account and rollover account (the "Accounts"). Such contributions are invested as designated by the participants in one or more of the investment funds referred to in Note 3, and are accumulated and invested in the Master Trust. Plan assets are solely available for the benefit of and used to satisfy the liabilities incurred on behalf of employees covered by the Plan. The Plan is administered by the Company through an Administrative Committee appointed by the Board of Directors of the Company. Effective November 1, 1987, the Thrift Plan for the Employees of the Wine Spectrum Companies (the "Wine Spectrum Plan") was merged with the Plan. The eligible employees of the Wine Spectrum Plan became members of the Plan. As a result of the merger, the Plan retains the Coca-Cola Company Stock held by the Wine Spectrum Plan; however, no election may be made to transfer any funds into the Coca-Cola Company Stock Fund. 5 11 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 3. INVESTMENT PROGRAM During the years ended December 31, 1999 and 1998, the Plan was comprised of nine investment funds: (i) the Money Market Fund investing primarily in the State Street Yield Enhanced STIF Fund managed by State Street Bank and Trust Company; (ii) the Stable Income Fund investing in the La Salle Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund investing in PIMCO Total Return Fund (which replaced the Putnam Income Fund, Class A Shares on June 1, 1998) managed by PIMCO; (iv) the S&P 500 Index Fund investing in the S&P 500 Flagship Fund, Series C, managed by State Street Bank and Trust Company; (v) the Managed Equity Fund investing in Lazard Equity Portfolio managed by Lazard Freres Asset Management; (vi) the Growth Equity Fund investing in Brandywine Fund, Inc. managed by Friess Associates (up to February 1, 1999) ; on December 1, 1999 the Growth Fund was reestablished investing in Vanguard Institutional Index Fund managed by Vanguard ; (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares; (viii) the Dreyfus Small Company Value Fund investing in the Dreyfus Small Company Value Fund managed by Dreyfus and (ix) the MSDW International Fund investing in MSDW International Equity Fund managed by Morgan Stanley. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. 4. CONTRIBUTIONS Non-highly compensated employees, as defined by the Plan, may elect to contribute to their pre-tax accounts on a pre-tax basis ("Pre-Tax Contributions) and/or to their after-tax accounts on an after-tax basis ("After-Tax Contributions") through payroll deductions of 1% to 17% (in the aggregate) of their annual compensation (as defined in the Plan), in multiples of 1%, in any combination. Highly-compensated employees, as defined by the Plan, may elect to contribute from 1% to 10% of their annual compensation on a pre-tax basis and from 1% to 17% of their annual compensation on an after-tax basis; provided, the aggregate percentage of the contributions does not exceed 17% of their annual compensation. Pre-tax Contributions and After-Tax Contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan provides for mandatory matching contributions by the Participating Companies payable to the participants' company match accounts. The Participating Companies, except as herein noted, contribute on behalf of the participants 25% of the participants' Pre-Tax Contributions not exceeding 6% of their Pre-Tax Contributions. Effective January 1, 1999, the Participating Companies matching contribution was increased to 60% of the first 6% of the participants' Pre-Tax and After-Tax Contributions. The Participating Companies matching contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan will accept into participants' rollover accounts cash received by participants from a qualified plan within the time prescribed by applicable law ("Rollover Contributions"). 6 12 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 4. CONTRIBUTIONS (Continued) The Participating Companies may make discretionary contributions, in an amount to be determined by the Participating Companies. The Participating Companies have not made discretionary contributions since the inception of the Plan. 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her contributions and rollover accounts. He or she has a non-forfeitable right to the value of his or her company match account upon the attainment of age 60, disability (as defined in the Plan ) or death. Upon termination of employment for any other reason, a participant vests in the funds held in his or her company match account in accordance with the following vesting schedule:
Years of Service Vested Percentage ---------------- ----------------- Less than 1 0% At least 1, but less than 2 20% At least 2, but less than 3 40% At least 3, but less than 4 60% At least 4, but less than 5 80% 5 or more 100%
Upon termination of employment for reasons other than the attainment of age 60, disability or death of a participant who was not fully vested in the funds held in his or her company match account, the nonvested funds of the participant's company match account shall be forfeited. Any amount forfeited shall be applied to reduce the Participating Companies' contributions in accordance with the terms of the Plan. Any amount forfeited shall be restored if the participant is re-employed by a Participating Company before incurring a five year break in service and if the participant repays to the Plan (within five years after his or her reemployment commencement date) an amount in cash equal to the full amount distributed to him or her from the Plan on account of termination of employment, excluding amounts from the after-tax and rollover accounts at the participant's election. The Participating Companies used $ 17,817 in forfeitures to offset their contributions during the year ended December 31, 1999. 6. DISTRIBUTIONS Upon termination of employment, after the attainment of age 60 or for reason of disability or death, the participant or his or her beneficiary shall receive the value of his or her Accounts. However, if the termination of employment is for reasons other than the attainment of age 60, disability or death, the participant shall receive only the value of the vested funds in his or her Accounts (See Note 5). 7 13 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 6. DISTRIBUTIONS (Continued) In accordance with the procedures established by the Administrative Committee and the terms of the Plan, a terminated employee may elect to defer final distribution from the Plan. Upon such election, the amount in the participant's vested interest in the Plan is entitled to continue to receive investment income and is held by the Trustee until the date of distribution as elected by the Participant. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts in accordance with the provisions of the Plan. 7. LOANS TO PARTICIPANTS A participant may apply for loans up to the lesser of $50,000 or 50% of the value of the vested portion of the participant's Accounts. The minimum loan amount is $1,000. The maximum repayment terms are 5 years for general purpose loans and 25 years for principal residence loans. Applications for loans must be approved by the Administrative Committee. The amounts borrowed are transferred from the investment funds in which the participant's Accounts are currently invested. Repayments and interest thereon are credited to the participant's current investment funds through payroll deductions made each pay period. The interest rate for loans is based on the prime rate on the first business day of the month in which the loan is made plus one percentage point. 8. TAX STATUS OF PLAN The Internal Revenue Service has ruled by a letter dated April 20, 2000 that the Plan is qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended. So long as the Plan continues to be so qualified, it is not subject to Federal income taxes. Participants are not currently subject to income tax on the Participating Companies' contributions to the Plan or on income earned by the Plan. Benefits distributed to participants or to their beneficiaries may be taxable to them. The tax treatment of the value of such benefits depends on the event giving rise to the distribution and the method of distribution selected. 9. RELATED PARTY TRANSACTIONS Some of the Plan expenses including trustee, custodial, and certain recordkeeping fees, are paid by the Company, and personnel and facilities of the Company are used by the Plan at no charge. 10. TERMINATION OF THE PLAN The Board of Directors of the Company may terminate the Plan at any time. In the case of termination, the rights of participants to their accounts shall be vested as of the date of termination. 8 14 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST The assets of the Plan are invested in the Master Trust held by the Trustee where the assets of other related employee benefit plans of affiliates are invested on a commingled basis. The Master Trust net assets consist of the following classification of assets and liabilities as of December 31, 1999 and 1998.
1999 1998 --------------- --------------- Assets ------ Investments held in trust at fair valued determined by quoted market prices: Money Market Fund State Street Yield Enhanced STIF Fund $ 57,250,843 $ 27,162,114 Stable Income Fund The LaSalle Income Plus Fund 54,177,363 14,338,837 Bond Fund PIMCO Total Return Fund, Class A Shares 108,694,075 31,114,802 S&P 500 Index Fund State Street S&P 500 Flagship Fund Series C 257,741,161 129,652,061 Managed Equity Fund Lazard Equity Portfolio Fund 69,428,179 29,014,228 Growth Equity Fund Vanguard Institutional Index Fund 10,005,713 Cash 195,458 Brandywine Fund Inc. Common Shares 25,271,841 Seagram Stock Fund The Seagram Company Ltd. Common Shares 31,925,545 15,666,526 Collective Short Term Investment Fund 847,036 468,709 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,214,351 3,941,074 Collective Short Term Investment Fund 77,420 97,496 Dreyfus Small Company Value Fund Dreyfus Small Company Value Fund 15,733,411 2,314,513 MSDW International Equity Fund MSDW International Equity Fund 13,493,724 1,912,494 Dreyfus GIC Fund GICs and GACS 13,110,054
9 15 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST ( Continued )
1999 1998 --------------- --------------- Collective Short Term Investment Fund $ 198,267 $ Loans to Participants 9,614,355 7,253,248 --------------- --------------- Total Investments 645,706,955 288,207,943 --------------- --------------- Receivables Accrued interest and dividends $ 5,226,406 187,437 Contributions receivable 2,068 640,375 Proceeds from securities sold 1,925,793 2,907,827 --------------- --------------- Total Receivables 7,154,267 3,735,639 --------------- --------------- Total assets 652,861,222 291,943,582 --------------- --------------- Liabilities ----------- Accounts payable for securities purchased 6,551,837 3,537,298 Administrative expenses 13,989 3,460 Other payables 49,311 Benefit payments 1,944 - --------------- --------------- Total liabilities 6,617,081 3,540,758 --------------- --------------- Net Assets $646,244,141 $288,402,824 =============== ===============
As of December 31, 1999 and 1998, the equitable share of The Seagram 401(k) Plan in the Master Trust is 29.88% and 59.44% respectively. As of December 31, 1999 and 1998, the net assets of the Master Trust available to the Plan for benefits in the individual investment funds were as follows:
1999 1998 --------------- --------------- Money Market Fund $ 17,633,980 $ 13,039,898 Stable Income Fund 10,836,176 9,330,566 Bond Fund 14,732,769 17,862,897 S & P 500 Index Fund 85,465,655 71,521,822 Managed Equity Fund 18,322,924 18,374,810 Growth Equity Fund 4,684,095 16,464,624 Seagram Stock Fund 20,354,482 13,088,349 The Coca-Cola Company Stock Fund 3,292,191 4,033,191
10 16 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST ( Continued )
1999 1998 ------------ ------------ Dreyfus Small Company Value Fund 7,591,157 1,612,644 MSDW International Equity Fund 6,340,993 1,432,115 GIC Fund 332 Loan accounts 3,881,988 4,650,531 ------------ ------------ Total $193,136,742 $171,411,447 ============ ============
12. INVESTMENT INCOME FROM MASTER TRUST The appreciation in fair value and other income is as follows: Investments held in trust at fair value determined by quoted market prices:
December 31, 1999 1998 ------------- ------------ Bond Fund $( 21,757) $ 71,250 S & P Index Fund 14,859,151 18,046,122 Managed Equity Fund 675,118 2,516,946 Growth Equity Fund 1,099,045 ( 4,328,696) Seagram Stock Fund 1,446,398 2,179,477 Dreyfus Small Company Value Fund 565,259 ( 173,393) MSDW International Equity Fund 538,818 ( 1,048,650) The Coca-Cola Company Stock Fund ( 483,365) 16,944 ------------- ------------ Investment gains (net of investment losses) 18,678,667 17,280,000 ------------- ------------ Interest and dividends 2,919,629 8,073,946 ------------- ------------ Investment Income $ 21,598,296 $ 25,353,946 ============= ============
11 17 THE SEAGRAM 401(k) PLAN NOTES TO FINANCIAL STATEMENTS 13. TRANSFER OF TROPICANA PRODUCTS, INC. ASSETS In connection with the sale of Tropicana Products, Inc. ("Tropicana") to PepsiCo, Inc., Tropicana established a separate plan and trust. Assets and liabilities of the Plan attributable to Accounts of employees (and former employees) of Tropicana and its subsidiaries presently held in the Master Trust amounting to $89,230,636 were transferred to a new trust on August 26, 1998. The amounts transferred from the individual investment funds of the Plan to the new trust are set forth below: Money Market Fund $ 1,380,633 Stable Income Fund 25,352,478 Bond Fund 3,030,215 S&P 500 Index Fund 23,654,393 Managed Equity Fund 7,691,370 Growth Equity Fund 19,879,943 Seagram Stock Fund 3,670,289 Dreyfus Small Company Value Fund 466,272 MSDW International Equity Fund 240,980 Loan Fund 3,864,063 ------------- Total $ 89,230,636 =============
12 18 CONSENT OF INDEPENDENT ACCOUNTANTS The Seagram Company Ltd. The Seagram 401(k) Plan We hereby consent to the incorporation by reference in Registration Statement No. 333-19059 on Form S-8 of our Report dated June 20, 2000 which appears in your Annual Report on Form 11-K of The Seagram 401(k) Plan for the fiscal year ended December 31, 1999. /S/ Gutierrez & Co. Flushing, New York June 30, 2000 EX-99.E 6 ex99-e.txt FORM 11-K - RETIREMENT SAVINGS & INVESTMENT PLAN 1 EXHIBIT 99(e) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 Commission file number 1-2275 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES 375 Park Avenue New York, New York 10152 (Full title of the plan and the address of the plan) THE SEAGRAM COMPANY LTD. 1430 Peel Street Montreal, Quebec, Canada, H3A 1S9 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Union Plan") is subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Attached hereto are the financial statements of the Union Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Union Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 3 3 SIGNATURES 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 their behalf by the undersigned hereunto duly authorized. THE RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES By /s/ John Borgia ---------------------------------- John Borgia Member of Investment Committee Date: June 30, 2000 4 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES FINANCIAL STATEMENTS DECEMBER 31, 1999 and 1998 5 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES INDEX TO FINANCIAL STATEMENTS
Page ---- Independent Auditors' Report 1 Statement of Net Assets Available for Benefits 2-3 Statement of Changes in Net Assets Available for Benefits 4-5 Notes to Financial Statements 6-9 Supplemental Schedules* Line 27d Form 5500 - Schedule of Reportable Transactions Year Ended December 31, 1998 10-11 Line 27a Form 5500 - Schedule of Assets Held for Investment Purposes December 31, 1998 12
*Other schedules required by 29CFR 2520.103-10 of the Department of Labor Rules and Regulations forReporting and Disclosure under Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable. 6 INDEPENDENT AUDITORS' REPORT To the Benefits Committee of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates We have audited the accompanying statements of net assets available for benefits of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "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 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 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 net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) assets held for investment purposes and (2) reportable transactions 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. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules 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. /s/ Gutierrez & Co. Flushing, New York June 20, 2000 7 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, --------------------------- 1999 1998 ------------ ----------- INVESTMENTS ( Note 3 ) Money Market Fund: Dreyfus Cash Management Plus Fund (cost of $171,799 and $79,797) $ 171,799 $ 79,797 Cash 759 Stable Income Fund: Dreyfus-Certus Stable Value Fund Series I (cost of $151,712 and $66,477) 151,712 66,477 Cash 934 Bond Fund: Dreyfus A Bond Plus Fund (cost of $132,735 and $91,206) 125,343 87,771 Cash 1,054 S&P 500 Index Fund: Dreyfus Institutional S&P 500 Stock Index Fund (cost of $1,009,833 and $594,304) 1,285,380 716,020 Cash ( 8,327) 4,910 Disciplined Stock Fund: Dreyfus Disciplined Stock Fund (cost of $461,787 and $319,634) 557,485 360,402 Cash 3,211 Growth Equity Fund: Warburg Pincus Emerging Growth Fund (cost of $352,856 and $241,756) 447,893 261,494 Cash 2,679 Seagram Stock Fund: The Seagram Company Ltd. Common Shares (cost of $301,013 and $152,269) 319,910 173,319 TBC Inc. Pooled Employees Fund (cost of $ 0 and $1,666) 1,666 Cash ( 3,591) 1,757 Loans to Participants 71,751 12,155 ------------ ----------- Total Investments $ 3,119,355 $ 1,774,405 ------------ -----------
The accompanying notes are an integral part of the financial statements. 2 8 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (Continued)
December 31, -------------------------------- 1999 1998 -------------- -------------- RECEIVABLES Dividends and Interest $ 6 $ 18 Proceeds from Unsettled Sales 11,348 -------------- -------------- Total Receivables 11,354 18 -------------- -------------- TOTAL ASSETS 3,130,709 1,774,423 -------------- -------------- LIABILITIES Cost of Unsettled Purchases 15,283 -------------- -------------- Total Liabilities 15,283 -------------- -------------- NET ASSETS AVAILABLE FOR BENEFITS $ 3,130,709 $ 1,759,140 ============== =============
The accompanying notes are an integral part of the financial statements. 3 9 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, --------------------------- 1999 1998 ----------- ------------ CONTRIBUTIONS Participating Employees $ 936,148 $ 866,788 ----------- ------------ INVESTMENT ACTIVITIES Investment Income Money Market Fund 5,955 3,399 Stable Income Fund 5,274 2,816 Bond Fund 6,650 3,540 S&P 500 Index Fund 10,059 9,179 Disciplined Stock Fund 809 1,725 Interest on Loans to Participants 635 178 Seagram Stock Fund 3,249 1,829 ----------- ------------ Total Investment Income 32,631 22,666 ----------- ------------ Realized Net Gain on Sale of Investments Money Market Fund 950 18 Bond Fund ( 636) 1,211 Stable Income Fund 486 ( 550) S & P 500 Index Fund 31,562 5,587 Disciplined Stock Fund 27,671 16,170 Growth Equity Fund 54,948 ( 599) Seagram Stock Fund 19,686 ( 448) ----------- ------------ Total Realized Net Gain on Sale of Investments 134,667 21,389 ----------- ------------ Unrealized Appreciation (Depreciation) on Investments Bond Fund ( 4,136) ( 3,765) S&P 500 Index Fund 153,830 104,714 Growth Equity Fund 75,299 16,735 Disciplined Stock Fund 54,931 41,496 Seagram Stock Fund 4,205 21,859 ----------- ------------ Total Unrealized Appreciation on Investments 284,129 181,039 ----------- ------------
The accompanying notes are an integral part of the financial statements. 4 10 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Continued)
Year Ended December 31, -------------------------------- 1999 1998 -------------- --------------- Increase in Plan Equity from Investment Activities $ 451,427 $ 225,094 -------------- --------------- PARTICIPANT WITHDRAWALS ( 22,407) ( 5,819) -------------- --------------- LOAN BALANCE ADJUSTMENT 6,401 -------------- --------------- INCREASE IN PLAN EQUITY 1,371,569 1,086 ,063 PLAN EQUITY AT BEGINNING OF YEAR 1,759,140 673,077 -------------- --------------- PLAN EQUITY AT END OF YEAR $ 3,130,709 $ 1,759,140 ============== ===============
The accompanying notes are an integral part of the financial statements. 5 11 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Plan") conform with generally accepted accounting principles. The more significant accounting policies are: Basis of Accounting The accompanying financial statements of the Plan are maintained on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Investment Valuation Investment securities are recorded and valued as follows: United States government obligations at fair value based on the current market yields; temporary investments in short-term investment funds at cost which in the normal course approximates market value; securities representing units of other funds at net asset value; The Seagram Company Ltd. common shares at the closing price reported on the composite tape of the New York Stock Exchange on the valuation date. Security Transactions Security transactions are accounted for on a trade date basis with the average cost basis used for determining the cost of investments sold. Interest income is recorded on an accrual basis. Income on securities purchased under agreements to resell is accounted for at the repurchase rate. Changes in discount on coupons detached from United States Treasury Bonds are reflected as unrealized appreciation. 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan established as of January 1, 1997 by Joseph E. Seagram & Sons, Inc. (the "Company") and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). 6 12 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN (Continued) The Plan covers eligible employees of the Company who are covered by various collective bargaining agreements between the Company and the employee representatives, as specified by the Plan. The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's account by the participant (see Note 4). Under the Plan, a participant is not provided with any fixed benefit. The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and other adjustments, and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among three accounts: pre-tax account, after-tax account and rollover account (the "Accounts"). Such contributions are invested as designated by the participants in one or more of the investment funds referred to in Note 3, and are accumulated and invested in a Trust Fund held by the Dreyfus Trust Company, as Trustee. The Plan is administered by the Company through an Administrative Committee appointed by the Board of Directors of the Company. 3. INVESTMENT PROGRAM During the years ended December 31, 1999 and 1998, the Plan was comprised of seven investment funds: (i) the Money Market Fund investing in the Dreyfus Cash Management Plus Fund managed by Dreyfus Corporation; (ii) the Stable Income Fund investing in the Dreyfus-Certus Stable Value Fund managed by Dreyfus Trust Company; (iii) the Bond Fund investing in Dreyfus A Bond Plus Fund managed by Dreyfus Corporation; (iv) the S&P 500 Index Fund investing in Dreyfus Institutional S & P 500 Stock Index Fund managed by Dreyfus Corporation; (v) the Disciplined Stock Fund investing in Dreyfus Disciplined Stock Fund managed by Dreyfus Corporation; (vi) the Growth Equity Fund investing in Warburg Pincus Emerging Growth Fund managed by Warburg Pincus Counsellors, Inc.; and (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares. The investments are administered by the Benefits Committee appointed by the Board of Directors of the Company. 4. CONTRIBUTIONS Eligible employees, as defined, may elect to contribute to their pre-tax accounts on a pre-tax basis ("Pre-Tax Contributions) and/or to their after-tax accounts on an after-tax basis ("After-Tax Contributions") through payroll deductions of 1% to 17% (in the aggregate) of their annual pay, as defined in the Plan, in multiples of 1%, in any combination, provided, the aggregate percentage of the contributions does not exceed 17% of their annual pay. Pre-tax Contributions and After-Tax 7 13 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 4. CONTRIBUTIONS (Continued) Contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan does not provide for matching contributions by the Company. The Plan will accept into participants' rollover accounts cash received by participants from a qualified plan within the time prescribed by applicable law ("Rollover Contributions"). 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her Accounts. 6. DISTRIBUTIONS Upon termination of employment, after attainment of age 60 or for reason of total and permanent disability or death, the participant or his or her beneficiary shall receive the entire value of his or her Accounts. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts in accordance with the provisions of the Plan. 7. LOANS TO PARTICIPANTS A participant may apply for loans up to the lesser of $50,000 or 50% of the value of the participant's Accounts. The minimum loan amount is $1,000. The maximum repayment terms are 5 years for general purpose loans and 25 years for principal residence loans. The amounts borrowed are transferred from the investment funds in which the participant's Accounts are currently invested. On a weekly basis, repayments and interest thereon are credited to the participant's current investment funds through payroll deduction. The interest rate for loans is based on the prime rate on the first business day of the month in which the loan is made plus one percentage point. 8. TAX STATUS OF PLAN The Internal Revenue Service has ruled by a letter dated May 20, 1998 that the Plan is qualified under Section 401(a) of the Internal Revenue Code. So long as the Plan continues to be so qualified, it is not subject to federal income taxes. Participants are not currently subject to income tax on the income earned by the Plan. Benefits distributed to participants or to their beneficiaries maybe taxable to them. The tax treatment of the value of such benefits depends on the event giving rise to the distribution and the method of distribution selected. 8 14 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 9. RELATED PARTY TRANSACTIONS Certain of the expenses of the Plan are paid by the Company, and personnel and facilities of the Company are used by the Plan at no charge. 10. TERMINATION OF THE PLAN The Board of Directors of the Company may terminate the Plan at any time. In the case of termination, the rights of participants to their accounts shall be vested as of the date of termination. 9 15 SUPPLEMENTAL SCHEDULE RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES Line 27d Form 5500 - Schedule of Reportable Transactions Series of Transactions In Excess of Five Percent of the Current Value of the Plan Assets Year ended December 31, 1999
Shares/ Number of Cost of Proceeds Cost of Assets Par Value Security Description Transactions Purchases From Sales Disposed Gain/Loss - --------- -------------------- --------- ---------- -------- --------- 107,538.19 Dreyfus Cash Mgmt Plus Institutional Shares* 57 107,538.19 .00 .00 .00 20,731.78 Dreyfus Cash Mgmt. Plus Institutional Shares* 13 .00 20,371.78 20,371.78 .00 17,089.79 Dreyfus/Laurel Fds Inc S&P 500 Stk Index Fd Tr Shs * 75 470,860.92 .00 .00 .00 3,017.97 Dreyfus/Laurel Fds Inc S&P 500 Stk Index Fd Tr Shs* 17 .00 84,344.07 70,145.88 14,198.19 4,668.25 Dreyfus/Laurel Disc Stk Fd R* 60 168,001.80 .00 .00 .00 1,186.33 Dreyfus/Laurel Disc Stk Fd R* 14 .00 48,058.86 40,956.11 7,102.75 3,753.00 Seagram Ltd Common* 79 187,826.26 .00 .00 .00 1,149.00 Seagram Ltd Common* 23 .00 61,864.26 43,703.36 18,160.90 4,284.37 Warburg Pincus Emerging Growth Fd 54 132,296.30 .00 .00 .00 1,776.66 Warburg Pincus Emerging Growth Fd 24 .00 71,068.40 66,339.42 4,728.98
* Party-in-interest. 10 16 SUPPLEMENTAL SCHEDULE RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES Line 27d Form 5500 - Schedule of Reportable Transactions Series of Transactions In Excess of Five Percent of the Current Value of the Plan Assets Year ended December 31, 1999
Shares/ Number of Cost of Proceeds Cost of Assets Par Value Security Description Transactions Purchases From Sales Disposed Gain/Loss - --------- -------------------- --------- ---------- -------- --------- 132.544.95 TBC Inc Pooled Employee Funds Daily Liquidity Fd 64 132,544.95 .00 .00 .00 134,211.47 TBC Inc Pooled Employee Funds Daily Liquidity Fd 54 .00 134,211.47 134,211.47 .00 161,904.40 Certus Stable Value Series `I' Fund 57 161,904.40 .00 .00 .00 81,009.47 Certus Stable Value Series `I' Fund 18 .00 81,009.47 81,009.47 .00
* Party-in-interest. 11 17 SUPPLEMENTAL SCHEDULE RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES Line 27a Form 5500 - Schedule of Assets Held for Investment Purposes December 31, 1999
Shares/ Par Value Security Description Cost Price Market - --------- -------------------- ---- ----- ------ Interest-Bearing Cash Dreyfus Cash Mgmt Plus - --------------------- 171,799.4950 Institutional Shares* 171,799.49 1.0000 171,799.49 Corporate Stock Common - ---------------------- 7,119.0000 Seagram Ltd Common* 312,728.75 44.9375 319,910.06 Participant Loans - ----------------- 71,750.5500 Loans to Participants 71,750.55 1.0000 71,750.55 Common Collective Trust - ----------------------- 151,711.8640 Certus Stable Value Series "I" Fund 151,711.87 1.0000 151,711.87 Registered Investment Companies - ------------------------------- 9,353.9480 Dreyfus A Bonds Plus, Inc.* 132,734.61 13.4000 125,342.90 41,910.0040 Dreyfus/Laurel Funds Inc.* S&P 500 Stk Index Fd Tr Shares 1,009,833.42 30.6700 1,285,379.82 13,037.5340 Dreyfus/Laurel Stk Fd R* 461,787.33 42.7600 557,484.95 8,983.0230 Warburg Pincus Emerging Growth Fd 352,856.21 49.8600 447,893.53 ------------ ------------ Total Registered Investment Companies 1,957,211.57 2,416,101.20 ------------ ------------ Gand Total 2,665,202.23 3,131,273.17 ============ ============
* Party-in-interest. 12 18 CONSENT OF INDEPENDENT ACCOUNTANTS The Seagram Company Ltd. The Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates We hereby consent to the incorporation by reference in Registration Statement No. 333-19059 on Form S-8 of our Report dated June 20, 2000 which appears in your Annual Report on Form 11-K of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates for the fiscal year ended December 31, 1999. /S/ Gutierrez & Co. Flushing, New York June 30, 2000 EX-99.F 7 ex99-f.txt FORM 11-K - POLYGRAM HOLDING, INC. 1 EXHIBIT 99(f) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 COMMISSION FILE NUMBER 1-2275 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES 375 Park Avenue New York, New York 10152 (Full title of the plan and the address of the plan) THE SEAGRAM COMPANY LTD. 1430 Peel Street Montreal, Quebec, Canada, H3A 1S9 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 Polygram Holding, Inc. Deferred Savings and Investment Plan for Employees (the "Polygram Plan") is subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Attached hereto are the financial statements of the Polygram Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Polygram Plan for the fiscal year ended December 31, 1999 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 3 3 SIGNATURES 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 their behalf by the undersigned hereunto duly authorized. POLYGRAM HOLDING INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES By /s/ John Borgia ----------------------------------- John Borgia Member of Benefits Committee Date: June 30, 2000 4 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES FINANCIAL STATEMENTS DECEMBER 31, 1999 and 1998 5 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES INDEX TO FINANCIAL STATEMENTS
Page ---- Independent Auditors' Report 1 Statement of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-12
6 INDEPENDENT AUDITORS' REPORT The Plan Administrator PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees We have audited the accompanying statements of net assets available for benefits of the PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees (the "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 are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 7 to the financial statements, the Plan incurred losses on certain investments during 1996. The Company and the Pension Committee, which administers the Plan, commenced a lawsuit during 1997 against the former investment manager to recover all such losses. In our opinion, the financial statements referred to above, of PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees as of December 31, 1999 and 1998, and for the years then ended 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 net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. /s/ Gutierrez & Co. Flushing, New York June 20, 2000 7 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ------------------------------ 1999 1998 ------------- ----------- Investments Money Market Fund: Dreyfus Cash Mangement Class A Mutual Fund $ $ 2,175,212 Intermediate Fixed Income Fund: PIMCO Low Duration Mutual Fund 10,230,737 Growth & Income Stock Fund: Vanguard Windsor II Mutual Fund 39,417,944 Balanced Mutual Fund: Vanguard Wellington Mutual Fund 17,898,732 Aggressive Equity Fund: Stein Roe Capital Opportunities Fund 4,542,634 Loans to Participants 2,100,341 ------------- ----------- Total Investments 76,365,600 ------------- ----------- Receivables Accrued income 185 Employee contributions 669,702 Employer contributions 206,972 ------------- ----------- Total Receivables 876,859 ------------- ----------- Net assets held in trust by Bank of New York 74,980,864 ------------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $ 74,980,864 $77,242,459 ============= ===========
The accompanying notes are an integral part of the financial statements. 2 8 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, ---------------------------------- 1999 1998 --------------- ---------------- CONTRIBUTIONS Employee contributions $ 6,601,796 $ 7,863,284 Employer contributions - restorations 2,085,232 Employer contributions 2,220,525 2,716,564 --------------- ---------------- Total Contributions 8,822,321 12,665,080 --------------- ---------------- INVESTMENT ACTIVITIES Investment Income - Former Trustee Money Market Fund 108,848 104,161 Intermediate Fixed Income Fund 391,134 703,491 Growth & Income Stock Fund 402,694 1,245,606 Balanced Mutual Fund 308,107 640,000 Aggressive Equity Fund 132 395 Participant Loan 88,801 182,137 --------------- ---------------- Total Investment Income 1,299,716 2,875,790 --------------- ---------------- Net appreciation in fair value of investments - Former Trustee Intermediate Fixed Income Fund ( 298,666) 10,706 Growth & Income Stock Fund 1,572,031 4,088,359 Balanced Mutual Fund 744,760 1,248,214 Aggressive Equity Fund ( 104,423) ( 86,024) --------------- ---------------- Total Net Appreciation in Fair Value of Investments 1,913,702 5,261,255 --------------- ---------------- Increase in Plan Equity from Investment Activities - Former Trustee 3,213,418 8,137,045 --------------- ---------------- Investment Income on assets held by Bank of New York Net appreciation in fair value of investments 294,178 Dividends and interest 115,784 PARTICIPANT WITHDRAWALS ( 12,718,906) ( 6,716,327) --------------- ---------------- INCREASE (DECREASE) IN PLAN EQUITY ( 273,205) 14,085,798 TRANSFER TO SUCCESSOR TRUSTEE FOR USA STUDIOS ( 1,988,390) PLAN EQUITY AT BEGINNING OF YEAR 77,242,459 63,156,661 --------------- ---------------- PLAN EQUITY AT END OF YEAR $ 74,980,864 $ 77,242,459 =============== ================
The accompanying notes are an integral part of the financial statements. 3 9 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 1. Description of the Plan The following brief description of PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees (the "Plan") is provided for general information purposes only. Participants should refer to the plan document for more complete information. General The Plan became effective January 1, 1987, and the Plan was amended from time to time including amendments subsequent to December 31, 1998 as described in Note 7. It is a profit sharing, thrift-type defined contribution plan with a 401(k) provision under which certain employees of PolyGram Holding, Inc. (the "Company") may participate. Leased employees, "freelance" employees or consultants are not eligible to participate. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Eligibility The Plan is a voluntary defined contribution plan. Under the terms of the Plan, employees with one year of service are eligible to participate in the Plan. Employees are eligible to participate in the Plan beginning with the calendar month following the completion of one year of service. Effective August 23, 1999, the one year of service eligibility requirement is no longer applicable. Contribution Eligible employees may make a combination of pretax dollars and after-tax dollars contributions, in whole percentage of annual earnings, through payroll deductions. Participants may contribute up to 16% (17% after August 23,1999) of their annual earnings, subject to a 12% maximum in pre-tax contributions and 10% (17% after August 23, 1999) maximum in after-tax contributions. Highly compensated employees, as defined by the Plan, are allowed to make Pre-Tax contributions up to 12% (17% after August 23, 1999 with a limit of 12% of their pre-tax account). On the first pretax contribution of 6% of a participant's annual earnings, the Company will match fifty cents for each dollar. Participants may elect to have their contributions invested in a variety of investment funds (see note 2). Investment elections in the funds may be changed at the beginning of any calendar month and must be made in increments of 5%. Effective August 23, 1999, changes in investment elections or contribution rate changes can be made on a daily basis in increments of 1%. Participants are 100% vested in their pre-tax, after-tax and rollover contributions. A participant's interest in the Company's matching contribution will become vested according to the following schedule: 4 10 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 1. Description of the Plan (continued)
COMPLETED YEAR OF SERVICE PERCENTAGE VESTED ------------------------- ---------------------------- 1 year 20% 2 years 40% 3 years 60% 4 years 80% 5 years or more 100%
In addition, nonvested employer matching contributions become 100% vested upon Disability (as defined by the Plan), retirement or death. Participants as of December 10, 1998 are fully vested in their benefits accrued through December 31, 1998. Employer matching contributions related to services performed by employees from January 1, 1999 forward are subject to the vesting schedule set forth in the Plan. Effective August 23, 1999, participants who attain age 60 while in service with the Employer shall become 100% vested. Forfeited balances of terminated participants' nonvested accounts are used to reduce future Company contributions. For 1999 and 1998, the total forfeited amounts were $35,692 and $148,018, respectively. Loans Participants may borrow from their vested account balance. The minimum loan amount is $1,000 and the maximum is the lesser of $50,000 or 50% of the participant's vested amount balance. Only one loan may be outstanding at any one time. The interest rate on the loan is Prime Rate plus 1%. Effective August 23, 1999, the interest rate charged on loans shall be set monthly for loans made during the month. Repayments are made through payroll deductions over a period of no more than 5 years although the term may be extended to 15 years if the loan is for the purchase of the participant's primary residence. Participant Distributions The distribution to which a plan participant is entitled is provided by the vested contributions and income thereon allocated to the participants account. The election may be made upon retirement, death, Disability or termination of employment. Distributions are in the form of immediate or deferred cash lump sum or immediate or deferred installments. Installments are available only for participants who retire or who are disabled as defined by the Plan. Normal retirement age is 65; however, a participant may work past his normal retirement date and continue to participate in the Plan until 70-1/2. If a former participant is rehired and has not received a distribution of his account balance, any forfeited amounts will be reinstated. If the former participant has received a 5 11 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 1. Description of the Plan (continued) distribution, then the distribution must be repaid within five years from the participant's rehire date in order to restore the forfeiture amount. There are also certain inservice withdrawals from the Plan. 2. Summary of Significant Accounting Policies Basis of Accounting Accounting records of the Plan are maintained on an accrual basis. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates. Risks and Uncertainties The Plan provides for various investment options. Investment securities are exposed to various risks such as interest rate, market and credit. Due to the risk associated with investment securities and the uncertainty related to changes in the value of such securities, it is at least reasonably possible that changes in risks, in the near term could materially affect participants' account balances and the amounts reported in the statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits. Investments The Pension Committee, or its appointed investment advisor(s), periodically reviews the investment results of current investment options and evaluates new investments that may be suitable for the Plan. Market values of the investments held in the Trust are valued by reference to published market quotations where a quoted market exists. When no published market quotation exists, the values are determined by the trustee. Purchases and sales of securities are reflected by the Trustee on a trade-date basis. Unrealized appreciation and depreciation are recognized on the last business day of the year and income from debt securities is recognized as earned. Realized gains and losses are determined on the basis of average cost of investments sold. 6 12 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 2. Summary of Significant Accounting Policies (continued) Until August 16, 1999, participants may allocate their investments in the five investment funds as follows: - Intermediate Fixed Income Fund invests in the PIMCO Low Duration Fund with an objective to obtain maximum current income consistent with preservation of capital and daily liquidity by investing in a diversified portfolio of securities of varying maturities. - Growth & Income Stock Fund invests in the Vanguard Windsor II mutual fund with an objective to provide long-term growth of capital and income by investing primarily in common stocks. The fund return attempts to mirror the Standard & Poor's Composite Price Index. - Balanced Mutual Fund invests in the Vanguard Wellington Fund with an objective to provide conservative investors with a prudent investment program. The fund invests in a combination of common stocks and bonds. The fund return attempts to mirror a combined index composed of the Standard & Poor's Composite Stock Price Index and the Lehman Long-Term Corporate AA or Better Bond Index. - Money Market Fund invests in the Dreyfus Cash Management Class A Mutual Fund with an objective to provide a high level of current income with the preservation of capital and the maintenance of liquidity. This is achieved by investing in short-term money market obligations, including securities issued by the U.S. Government, certificates of deposit and other short-term obligations. - Aggressive Equity Fund invests in the Stein Roe Capital Opportunities Mutual Fund with an objective to provide long-term capital appreciation by investing in selected companies that in the opinion of Stein Roe & Farnham Inc., the advisor, offer opportunities for capital appreciation. This fund was removed from the Plan effective May 31,1999. Effective August 16, 1999, the Chase Manhattan Bank was removed as Trustee of the Plan and Bank of New York was appointed as successor Trustee. Effective August 16, 1999, the assets are held in trust by Bank of New York (Trustee) in the Joseph E. Seagram & Sons, Inc. Master Trust (Master Trust), which also includes assets of the 401(k) plans of the company's affiliates, Universal Studios, Inc., UMG Manufacturing and Logistics, Inc. and Spencer Gifts, Inc. The related investment income and appreciation in fair value represents allocations to the Plan based upon the ratio of the Plan's assets to total Master Trust Assets. 7 13 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 2. Summary of Significant Accounting Policies (continued) Investment securities are recorded and valued as follows: United States government obligations at fair value based on the current market yields; temporary investments in short-term investment funds at cost which in the normal course approximates market value; securities representing units of other funds at net asset value; The Seagram Company Ltd. common shares at the closing price reported on the composite tape of the New York Stock Exchange on the valuation date. During the year ended December 31, 1999, the Plan was comprised of nine investment funds: (i) the Money Market Fund investing primarily in the State Street Yield Enhanced STIF Fund managed by State Street Bank and Trust Company; (ii) the Stable Income Fund investing in the La Salle Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund investing in PIMCO Total Return Fund (which replaced the Putnam Income Fund, Class A Shares on June 1, 1998) managed by PIMCO; (iv) the S&P 500 Index Fund investing in the S&P 500 Flagship Fund, Series C, managed by State Street Bank and Trust Company; (v) the Managed Equity Fund investing in Lazard Equity Portfolio managed by Lazard Freres Asset Management; (vi) the Growth Equity Fund investing in Brandywine fund, Inc. managed by Freiss Associates (up to February 1, 1999); on December 1, 1999, the Growth Equity Fund was reestablished investing in Vanguard Institutional Index Fund managed by Vanguard; (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares; (viii) the Dreyfus Small Company Value Fund investing in the Dreyfus Small Company Value Fund managed by Dreyfus and (ix) the MSDW International Fund investing in MSDW International Equity Fund managed by Morgan Stanley. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. 3. Priorities Upon Termination of the Plan The Plan may be terminated at the discretion of the Board of Directors of the Company. The employer contributions on behalf of the participants shall then become fully vested. The total value of the employer and employee vested accounts shall be distributed to the participants in a lump-sum cash payment. 4. Administrative Expenses All costs associated with the maintenance of accounting records and certain investment fees of the Plan are borne by the Company. Administrative expenses paid to investment brokers are deducted from plan earnings. 8 14 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 5. Tax Status The Plan is approved as qualified under Section 401(a) of the Internal Revenue Code (the "Code") of 1986, as amended, and, therefore, is exempt from Federal income taxes under Section 501(a) of such Code, pursuant to a determination letter dated December 10, 1997 from the Internal Revenue Service (the "IRS"). In the opinion of the plan administrator, the Plan and its underlying trust have operated within the terms of the Plan and the compliance requirements to remain qualified under the applicable provisions of the Code. 6. Litigation As a result of losses incurred in the Intermediate Fixed Income Fund during 1996, the Company and the Pension Committee, which administers the Plan, commenced a lawsuit in the United States District Court for the Southern District of New York on behalf of the Plan, against the former investment manager, Barclay. The lawsuit alleges, among other things, that Barclay breached its fiduciary duty in the management of the assets and seeks to recover from Barclay all losses incurred by the Plan as a result of such breach. As of June 1998, the Pension Committee determined to keep the litigation off the court's active calendar with the understanding that it can be reactivated in response to further developments. The Company, as a result of these losses, determined to make a one-time special contribution to the Plan to restore losses incurred in the period July 1, 1996 to November 30, 1996. The Company obtained a favorable ruling from the IRS in November 1997 to make the restoration payment. The payment, which was made on March 2, 1998, was $2,085,232 and included interest through February 1998. The payment was allocated to the investment funds in accordance with the participant current investment elections. The following table shows the distribution of the restorative payment:
STEIN ROE VANGUARD VANGUARD DREYFUS CAPITAL PIMCO WELLINGTON WINDSOR II TOTAL ------------ --------------- ------------ -------------- --------------- ------------- Net loss $ 989,389 $165,109 $94,977 $223,630 $432,380 $1,905,485 Interest 93,331 15,575 8,959 21,095 40,787 179,747 ---------- ------- ------- ------- ------- --------- $1,082,720 $180,684 $103,936 $244,725 $473,167 $2,085,232 ========== ======= ======= ======= ======= =========
The Plan changed its investment manager from Barclay to Pacific Asset Management, Inc. in December 1996. 9 15 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 7. Plan Amendments The Plan was amended as of August 1, 1999 to comply with the benefit covenants set forth in the acquisition agreement with respect to the acquisition of Polygram N.V. Further, the provisions of the Plan have been amended as of August 23, 1999 to become substantially similar to the provisions of the other 401(k) plans sponsored by affiliates of the Company in order to simplify and streamline administration of the Plan and the 401(k) plans of its affiliates and to restate the Plan for recent federal legislation. Other changes to the Plan included the change of trustee and recordkeeper as well the investment funds that participants could allocate their investments. 8. ASSETS HELD IN TRUST The assets of the Plan are invested in the Master Trust held by the Trustee where the assets of other related employee benefit plans of affiliates are invested on a commingled basis. The Master Trust net assets consist of the following classification of assets and liabilities as of December 31, 1999.
Assets ------ Investments held in trust at fair valued determined by quoted market prices: Money Market Fund State Street Yield Enhanced STIF Fund $ 57,250,843 Stable Income Fund The LaSalle Income Plus Fund 54,177,363 Bond Fund PIMCO Total Return Fund, Class A Shares 108,694,075 S&P 500 Index Fund State Street S&P 500 Flagship Fund Series C 257,741,161 Managed Equity Fund Lazard Equity Portfolio Fund 69,428,179 Growth Equity Fund Vanguard Institutional Index Fund 10,005,713 Cash 195,458 Brandywine Fund Inc. Common Shares Seagram Stock Fund The Seagram Company Ltd. Common Shares 31,925,545 Collective Short Term Investment Fund 847,036 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,214,351
10 16 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 8. ASSETS HELD IN TRUST ( Continued ) Collective Short Term Investment Fund $ 77,420 Dreyfus Small Company Value Fund Dreyfus Small Company Value Fund 15,733,411 MSDW International Equity Fund MSDW International Equity Fund 13,493,724 Dreyfus GIC Fund GICs and GACS 13,110,054 Collective Short Term Investment Fund 198,267 Loans to Participants 9,614,355 ---------------- Total Investments 645,706,955 ---------------- Receivables Accrued interest and dividends 5,226,406 Contributions receivable 2,068 Proceeds from securities sold 1,925,793 ---------------- Total Receivables 7,154,267 ---------------- Total assets 652,861,222 ---------------- Liabilities ----------- Accounts payable for securities purchased 6,551,837 Administrative expenses 13,989 Other payables 49,311 Benefit payments 1,944 ---------------- Total liabilities 6,617,081 ---------------- Net Assets $646,244,141 ================
As of December 31, 1999, the equitable share of PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees in the Master Trust is 11.60%. 11 17 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1999 and 1998 8. ASSETS HELD IN TRUST ( Continued ) As of December 31, 1999, the net assets of the Master Trust available to the Plan for benefits in the individual investment funds were as follows: Money Market Fund $ 5,604,386 Stable Income Fund 460,154 Bond Fund 15,294,023 S & P 500 Index Fund 14,648,376 Managed Equity Fund 32,373,325 Growth Equity Fund 1,883,977 Seagram Stock Fund 304,315 Dreyfus Small Company Value Fund 1,508,108 MSDW International Equity Fund 1,432,088 Loan accounts 1,472,112 ------------- Total $ 74,980,864 =============
9. INVESTMENT INCOME FROM MASTER TRUST The appreciation in fair value and other income is as follows: Investments held in trust at fair value determined by quoted market prices:
December 31, 1999 -------------- Bond Fund $ 82,421 S & P Index Fund 1,279,554 Managed Equity Fund ( 1,226,565) Growth Equity Fund 60,289 Seagram Stock Fund ( 10,968) Dreyfus Small Company Value Fund 69,853 MSDW International Equity Fund 39,594 ------------- Investment gains (net of investment losses) 294,178 ------------- Interest and dividends 115,784 ------------- Investment Income $ 409,962 =============
12 18 CONSENT OF INDEPENDENT ACCOUNTANTS The Seagram Company Ltd. PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees We hereby consent to the incorporation by reference in the Registration Statement No. 333-85485 on Form S-8 of our Report dated June 20, 2000 which appears in your Annual Report on Form 11-K of the PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees for the fiscal year ended December 31, 1999. /s/ Gutierrez & Co. Flushing, New York June 30, 2000 -----END PRIVACY-ENHANCED MESSAGE-----