-----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, S46jnXD9eytrjadT8aLyuu45t73oKIvUjVbcyBImMmQH9+LSeYCDG9uSRsm6JfCt P89pyQmyvO8oY0cb3fDy3g== 0000950123-99-007814.txt : 19990819 0000950123-99-007814.hdr.sgml : 19990819 ACCESSION NUMBER: 0000950123-99-007814 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990818 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEAGRAM CO LTD CENTRAL INDEX KEY: 0000088188 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] IRS NUMBER: 000000000 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-02275 FILM NUMBER: 99695335 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-K/A 1 AMENDMENT NO. 3 TO FORM 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 3 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1998 COMMISSION FILE NUMBER 1-2275 THE SEAGRAM COMPANY LTD. - LA COMPAGNIE SEAGRAM LTEE - -------------------------------------------------------------------------------- (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, 1998 (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 Exhibit 99(f) to the Form 10-K the attached Form 11-K with respect to the PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees. 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: August 18, 1999 EX-99.F 2 DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES 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, 1998 COMMISSION FILE NUMBER 1-2275 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES 800 Third Avenue New York, New York 10022 (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 PolyGram Holding, Inc. Deferred Savings and Investment Plan for 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, 1998 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Plan for the fiscal year ended December 31, 1998 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/ Kelly DeMasi ---------------------------------- Kelly DeMasi Member of Administrative Committee By /s/ Eric Scoones ---------------------------------- Eric Scoones Member of Administrative Committee By /s/ John R. Toren ---------------------------------- John R. Toren Member of Administrative Committee Date: August 18, 1999 4 4 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES DECEMBER 31, 1998 and 1997 5 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES INDEX TO FINANCIAL STATEMENTS
Page ---- Financial Statements Independent Auditors' Report 1 Statement of Net Assets Available for Benefits 3 Statement of Changes in Net Assets Available for Benefits 4 Notes to Financial Statements 5 Supplementary Information Schedule of Assets Held For Investment Schedule 1 14 Schedule of Reportable Transactions Schedule 2 15
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, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended and the supplemental schedules of (1) assets held for investment purposes, and (2) reportable transactions as of or for the year ended December 31, 1998. 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. The December 31, 1997 financial statements were reported on by other auditors whose report dated October 15, 1998 on the financial statements disclaimed an opinion for the reasons described in the following paragraph. As permitted by Section 2520.103-8 of the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, investment assets held by Chase Manhattan Bank, the trustee of the Plan, and transactions in those assets were excluded from the scope of our audit of the Plan's 1997 financial statements, except for comparing the information provided by the trustee, which is summarized in Note 4, with the related information in the financial statements. Except as discussed in the above paragraph, 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. 1 7 Because of the significance of the information that we did not audit, we were unable to, and do not express an opinion on the Plan's financial statement as of December 31, 1997. The form and content of the information included in the 1997 financial statements and schedules, other than that derived from the information certified by the trustee, has been audited by us and, in our opinion, is presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the financial statements referred to above, of PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees as of December 31, 1998, and for the year then ended present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1998, and the changes in net assets available for benefits for the year then ended in conformity with generally accepted accounting principles. Our audit of the Plan's financial statements as of and for the year ended December 31, 1998, was conducted for the purpose of forming an opinion on the 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 and Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended December 31, 1998, and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Flushing, New York August 16, 1999 2 8 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ----------------------------- 1998 1997 ----------- ----------- INVESTMENTS Money Market Fund: Dreyfus Cash Management Class A Mutual Fund $ 2,175,212 $ 1,076,313 Intermediate Fixed Income Fund: PIMCO Low Duration Mutual Fund 10,230,737 10,505,157 Growth & Income Stock Fund: Vanguard Windsor II Mutual Fund 39,417,944 30,745,565 Balanced Mutual Fund: Vanguard Wellington Mutual Fund 17,898,732 15,076,515 Aggressive Equity Fund: Stein Roe Capital Opportunities Fund 4,542,634 3,501,942 Loans to Participants 2,100,341 1,832,410 ----------- ----------- Total Investments 76,365,600 62,737,902 ----------- ----------- Receivables Accrued income 185 312 Employee contributions 669,702 337,144 Employer contributions 206,972 81,303 ----------- ----------- Total Receivables 876,859 418,759 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $77,242,459 $63,156,661 =========== ===========
The accompanying notes are an integral part of the financial statements. 3 9 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1998 1997 ------------ ------------ CONTRIBUTIONS Employee contributions $ 7,863,284 $ 6,651,414 Employer contributions - restorations 2,085,232 Employer contributions 2,716,564 2,059,257 ------------ ------------ Total Contributions 12,665,080 8,710,671 ------------ ------------ INVESTMENT ACTIVITIES Investment Income Money Market Fund 104,161 48,780 Intermediate Fixed Income Fund 703,491 706,397 Growth & Income Stock Fund 1,245,606 2,793,134 Balanced Mutual Fund 640,000 1,281,676 Aggressive Equity Fund 395 142 Participant Loans 182,137 224,910 ------------ ------------ Total Investment Income 2,875,790 5,055,039 ------------ ------------ Net appreciation in fair value of investments Intermediate Fixed Income Fund 10,706 154,148 Growth & Income Stock Fund 4,088,359 5,203,475 Balanced Mutual Fund 1,248,214 835,604 Aggressive Equity Fund (86,024) 259,924 ------------ ------------ Total Net Appreciation in Fair Value of Investments 5,261,255 6,453,151 ------------ ------------ Increase in Plan Equity from Investment Activities 8,137,045 11,508,190 ------------ ------------ PARTICIPANT WITHDRAWALS (6,716,327) (5,978,996) ------------ ------------ INCREASE IN PLAN EQUITY 14,085,798 14,239,865 PLAN EQUITY AT BEGINNING OF YEAR 63,156,661 48,916,796 ------------ ------------ PLAN EQUITY AT END OF YEAR $ 77,242,459 $ 63,156,661 ============ ============
The accompanying notes are an integral part of the financial statements. 4 10 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 (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 8. It is a profit sharing, thrift-type defined contribution plan with a taxsaver 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. CONTRIBUTION Eligible employees may make a combination of taxsaver (pretax dollars) and thrift (after-tax dollars) contributions, in whole percentage of annual earnings, through payroll deductions. Participants may contribute up to 16% of their annual earnings, subject to a 12% maximum in pre-tax contributions and 10% maximum in after-tax contributions. On the first pretax contribution of 6% of a participant's annual earnings, the Company will match fifty cents for each dollar. In addition, the maximum contribution allowed by the Internal Revenue Service is $10,000 per participant for 1998 and $9,500 per participant for 1997. 5 11 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 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%. 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:
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 previous regular vesting schedule. Forfeited balances of terminated participants' nonvested accounts are used to reduce future Company contributions. For 1998 and 1997, the total forfeited amounts were $148,018 and $165,032, 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 6 12 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 1%. The average interest rate for 1998 and 1997 was 9.5% and 9.5%, respectively. 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 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 7 13 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 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. DISTRIBUTIONS DUE TO PARTICIPANTS/RECONCILIATION TO FORM 5500 Distributions due to participants total $1,092,618 and $857,641 at December 31, 1998 and 1997, respectively, which are not included in "Distributions to participants" on the statements of changes in net assets available for plan benefits. BALANCES ALLOCATED TO FORMER EMPLOYEES Balances related to participants who were former employees of the Company amounted to $15,982,873 and $11,820,498 at December 31, 1998 and 1997, respectively. 8 14 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 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. 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 9 15 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 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. (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) TRUST ASSETS CERTIFIED BY PLAN TRUSTEE For the plan year ended December 31, 1997, the plan administrator has elected the method of compliance permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Accordingly, as permitted under such election, the plan administrator instructed the Plan's independent auditors not to perform any auditing procedures with respect to the information and details thereof certified by the trustee, except for comparing such information included in the financial statements and supplemental schedule of assets held for investment purposes. 10 16 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 At December 31, 1998 and 1997, the Plan's trustee, Chase Manhattan Bank, has certified the completeness and accuracy of the information pertaining to the following: Statements of net assets available for plan benefits: Investments, at fair value Statements of changes in net assets available for plan benefits: Interest, excluding interest on participants' loans Dividends Net appreciation (depreciation) in fair value of investments The following 5% investments reported at fair value in the accompanying statements of net assets available for plan benefits were reported by Chase Manhattan Bank as of December 31, 1998 and 1997.
1998 1997 ----------------------------- ----------------------------- FAIR FAIR COST VALUE COST VALUE ----------- ----------- ----------- ----------- Investments: PIMCO Low Duration Mutual Fund $10,147,118 $10,230,737 $10,387,113 $10,505,157 Vanguard Windsor II Mutual Fund 29,576,435 39,417,944 22,025,288 30,745,565 Vanguard Wellington Mutual Fund 14,808,677 17,898,732 11,790,278 15,076,515 Stein Roe Capital Opportunities Fund 4,421,064 4,542,634 3,291,544 3,501,942 ----------- ----------- ----------- ----------- $58,953,294 $72,090,047 $47,494,223 $59,829,179 =========== =========== =========== ===========
(5) 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. 11 17 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 (6) 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. (7) 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. 12 18 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1998 and 1997 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. (8) SUBSEQUENT EVENTS 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. Further, the Pension Committee (now the Investment Committee) removed the Stein Roe Capital Opportunity Fund from the Plan, effective May 31, 1999. Other changes to the Plan included the change of trustee and recordkeeper as well the investment funds that participants could allocate their investments. 13 19 SCHEDULE 1 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES December 31, 1998 Line 27(a) - Schedule of Assets Held for Investment Purposes
CURRENT SHARES COST VALUE Dreyfus Money Market Fund 2,175,212 $ 2,175,212 $ 2,175,212 PIMCO Low Duration Fund 1,005,972 10,147,118 10,230,737 Stein Roe Capital Opportunities Fund 154,722 4,421,064 4,542,634 Vanguard Wellington Mutual Fund 609,838 14,808,677 17,898,732 Vanguard Windsor II Mutual Fund 1,320,534 29,576,435 39,417,944 Loan Fund -- 2,100,341 2,100,341 ----------- ----------- Total $63,228,847 $76,365,600 =========== ===========
The above information has been certified as complete and accurate by Chase Manhattan Bank, the Plan's trustee as of December 31, 1998. See accompanying independent auditors' report. 14 20 SCHEDULE 2 POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES Year ended December 31, 1998 Line 27(d) - Schedule of Reportable Transactions
UNIT UNIT PURCHASE SELLING COST OF PROCEEDS NET GAIN DESCRIPTION PRICE PRICE ASSETS FROM SALE (LOSS) ----------- -------- ------- ----------- --------- -------- SINGLE TRANSACTION Vanguard Windsor II Mutual Fund 28.58 -- 393,708,379 -- --
NUMBER OF NUMBER OF PURCHASE SALE COST OF PROCEEDS NET GAIN DESCRIPTION TRANSACTIONS TRANSACTIONS ASSETS FROM SALE (LOSS) ----------- ------------ ------------ ----------- ---------- -------- SERIES OF TRANSACTIONS Chase Enhanced Cash Investment Fund 137 111 $13,477,991 13,477,991 -- Vanguard Wellington Mutual Fund 42 9 3,382,833 1,808,830 1,444,395 Vanguard Windsor II Mutual Fund 51 8 8,089,134 3,505,115 2,967,127
The above information has been certified as complete and accurate by Chase Manhattan Bank, the Plan's trustee as of December 31, 1998. See accompanying independent auditors' report. 15 21 20 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 on Form S-8 filed by The Seagram Company Ltd. on August 18, 1999 of our Report dated August 16, 1999 which appears in the 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, 1998. /s/ Gutierrez & Co. Gutierrez & Co. Flushing, New York August 18, 1999 -----END PRIVACY-ENHANCED MESSAGE-----