THIS DOCUMENT IS A COPY OF THE 11-K/A FILED ON
JANUARY 12, 1999, PURSUANT TO A
RULE 201 TEMPORARY HARDSHIP EXEMPTION.
The following items were the subject of a Form
12b-25 and are included herein: 4.
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K/A
Annual Report
(Mark One)
[X] Annual Report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended June 30, 1998
Or
[ ] Transition report pursuant to Section 15(d) of the
Securities Exchange Act of 1934
------------------------------
Commission file number ___________________
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
THE EARTHGRAINS COMPANY EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
THE EARTHGRAINS COMPANY
8400 Maryland Avenue
St. Louis, Missouri 63105
REQUIRED INFORMATION
Item 1. The Plan is subject to ERISA. See Item 4.
Item 2. The Plan is subject to ERISA. See Item 4.
Item 3. The Plan is subject to ERISA. See Item 4.
Item 4. Financial Statements and Exhibits.
----------------------------------
(a) Financial Statements:
Audited Statement of Net Assets Available for Benefits at June 30,
1998 and June 30, 1997.
Audited Statement of Changes in Net Assets Available for Benefits
for the twelve months ended June 30, 1998 and June 30, 1997.
Notes to Financial Statements
Line 27a - Schedule of Assets Held for Investment Purposes at June
30, 1998.
Line 27d - Schedule of Reportable Transactions for the twelve
months ended June 30, 1998.
Appendix information has not been provided.
<PAGE>
(b) Exhibits:
Exhibit 23 Consent of Independent Accountants
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE EARTHGRAINS COMPANY EMPLOYEE
STOCK OWNERSHIP/401(K) PLAN
By: /S/ EDWARD J. WIZEMAN
-------------------------
Edward J. Wizeman
Administrative Committee Member
Date: January 11, 1998
<PAGE>
THE EARTHGRAINS
COMPANY EMPLOYEE
STOCK OWNERSHIP/
401(k) PLAN
Financial Statements and
Additional Information
June 30, 1998 and 1997
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Index to Financial Statements and Additional Information
June 30, 1998
________________________________________________________________________________
Page
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits
with Fund Information 2-3
Statement of Changes in Net Assets Available for
Benefits with Fund Information 4-5
Notes to Financial Statements 6-11
Additional Information*:
Line 27a - Schedule of Assets Held for
Investment Purposes, June 30, 1998 Schedule I
Line 27d - Schedule of Reportable Transactions, Schedule II
Year Ended June 30, 1998
* Other schedules required by Section 2520.103-10 of Department of Labor Rules
and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
<PAGE>
PricewaterhouseCoopers LLP
Report of Independent Accountants
August 21, 1998
To the Participants and Administrator
of The Earthgrains Company Employee
Stock Ownership/401(k) Plan
In our opinion, the accompanying statements of net assets available for benefits
with fund information and the related statements of changes in net assets
available for benefits with fund information present fairly, in all material
respects, the net assets available for benefits of The Earthgrains Employee
Stock Ownership/401(k) Plan at June 30, 1998 and 1997, and the changes in net
assets available for benefits for the years then ended, in conformity with
generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is additional
information required by ERISA. The Fund Information in the statements of net
assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and the changes in net
assets available for benefits of each fund. Schedules I and II and the Fund
Information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/S/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Statement of Net Assets Available for
Benefits with Fund Information
June 30, 1998
Page 2
________________________________________________________________________________
<TABLE>
<CAPTION>
The Anheuser-
Earthgrains Busch Merrill Lynch Oppenheimer Merrill Lynch
Company Companies Institutional U.S. Government Equity Index
Stock Fund Stock Fund Fund Fund Trust Fund
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value
The Earthgrains Company
Common Stock* $69,568,070 $ - $ - $ - $ -
Anheuser-Busch Companies, Inc.
Common Stock* 8,665,872
Merrill Lynch Institutional Fund 388,813
Oppenheimer U.S. Government Fund 702,090
Merrill Lynch Equity Index
Trust Fund* 5,207,030
AIM Balanced Fund
AIM Blue Chip Fund
Oppenheimer Disciplined Value Fund
Participant Loans - - - - -
___________ __________ ________ ________ __________
Total investments 69,568,070 8,665,872 388,813 702,090 5,207,030
Liabilities
Notes payable (13,805,600) - - - -
___________ __________ ________ ________ __________
Net assets available for benefits $55,762,470 $8,665,872 $388,813 $702,090 $5,207,030
___________ __________ ________ ________ __________
___________ __________ ________ ________ __________
AIM AIM Oppenheimer Participant
Balanced Blue Chip Disciplined Loans
Fund Fund Value Fund Fund Total
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value
The Earthgrains Company
Common Stock* $ - $ - $ - $ - $69,568,070
Anheuser-Busch Companies, Inc.
Common Stock* 8,665,872
Merrill Lynch Institutional Fund 388,813
Oppenheimer U.S. Government Fund 702,090
Merrill Lynch Equity Index
Trust Fund* 5,207,030
AIM Balanced Fund 1,536,933 1,536,933
AIM Blue Chip Fund 1,800,348 1,800,348
Oppenheimer Disciplined
Value Fund 29,175 29,175
Participant Loans - - - 802,409 802,409
__________ __________ _______ ________ ___________
Total investments 1,536,933 1,800,348 29,175 802,409 88,700,740
Liabilities
Notes payable - - - - (13,805,600)
__________ __________ _______ ________ ___________
Net assets available for benefits $1,536,933 $1,800,348 $29,175 $802,409 $74,895,140
__________ __________ _______ ________ ___________
__________ __________ _______ ________ ___________
<FN>
* Represents more than 5% of net assets available for benefits.
</FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Statement of Net Assets Available for Benefits with Fund Information
June 30, 1997
Page 3
________________________________________________________________________________
<TABLE>
<CAPTION>
The Anheuser-
Earthgrains Busch Fidelity Fidelity Fidelity U.S.
Company Companies Money Market Intermediate Equity Index
Stock Fund Stock Fund Trust Fund Bond Fund Portfolio
<S> <C> <C> <C> <C> <C>
Assets
Receivables:
Contributions:
Participant $ - $ - $ - $ - $ -
Employer 204,557
Other 279,178
Interest 518 196 16 24 114
___________ ___________ _______ ________ __________
205,075 279,374 16 24 114
___________ ___________ _______ ________ __________
Investments, at fair value
The Earthgrains Company
Common Stock* 38,345,398
Anheuser-Busch Companies, Inc.
Common Stock* 10,244,638
Fidelity Money Market Trust Fund 277,279
Fidelity Intermediate Bond Fund 639,641
Fidelity U.S. Equity Index
Portfolio* 3,346,578
Fidelity Asset Manager Fund
Fidelity Contra Fund
Participant Loans - - - - -
___________ ___________ ________ ________ __________
Total investments 38,345,398 10,244,638 277,279 639,641 3,346,578
___________ ___________ ________ ________ __________
Total assets 38,550,473 10,524,012 277,295 639,665 3,346,692
___________ ___________ ________ ________ __________
Liabilities
Notes payable 14,446,624
Other payable 204,572 5 1 1 3
___________ ___________ ________ ________ __________
Total liabilities 14,651,196 5 1 1 3
___________ ___________ ________ ________ __________
Net assets available for benefits $23,899,277 $10,524,007 $277,294 $639,664 $3,346,689
___________ ___________ ________ ________ __________
___________ ___________ ________ ________ __________
Fidelity
Asset Fidelity Participant
Manager Contra Loans
Fund Fund Fund Total
<S> <C> <C> <C> <C>
Assets
Receivables:
Contributions:
Participant $ - $ - $ - $ -
Employer 204,557
Other 279,178
Interest 45 16 - 929
__________ ________ ________ ___________
45 16 - 484,664
__________ ________ ________ ___________
Investments, at fair value
The Earthgrains Company Common Stock* 38,345,398
Anheuser-Busch Companies, Inc. Common Stock* 10,244,638
Fidelity Money Market Trust Fund 277,279
Fidelity Intermediate Bond Fund 639,641
Fidelity U.S. Equity Index Portfolio* 3,346,578
Fidelity Asset Manager Fund 1,061,911 1,061,911
Fidelity Contra Fund 982,384 982,384
Participant Loans - - 400,707 400,707
__________ ________ ________ ___________
Total investments 1,061,911 982,384 400,707 55,298,536
__________ ________ ________ ___________
Total assets 1,061,956 982,400 400,707 55,783,200
__________ ________ ________ ___________
Liabilities
Notes payable 14,446,624
Other payable - - - 204,582
__________ ________ ________ ___________
Total liabilities - - - 14,651,206
__________ ________ ________ ___________
Net assets available for benefits $1,061,956 $982,400 $400,707 $41,131,994
__________ ________ ________ ___________
__________ ________ ________ ___________
<FN>
* Represents more than 5% of net assets available for benefits.
</FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year Ended June 30, 1998
Page 4
________________________________________________________________________________
<TABLE>
<CAPTION>
The Anheuser-
Earthgrains Busch Merrill Lynch Oppenheimer Merrill Lynch
Company Companies Institutional U.S. Government Equity Index
Stock Fund Stock Fund Fund Fund Trust Fund
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Employer $ 3,708,186 $ - $ - $ - $ -
Participant 3,230,885 - 64,785 53,143 345,789
___________ ___________ ________ ________ __________
6,939,071 64,785 53,143 345,789
Investment income:
Interest 16,473 243 867 4,085
Dividends 276,629 176,311 5,964 6,945 2,727
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 26,348,647 1,121,573 (857) (8,907) 594,724
___________ ___________ ________ ________ __________
26,641,749 1,297,884 5,350 (1,095) 601,536
Total additions 33,580,820 1,297,884 70,135 52,048 947,325
___________ ___________ ________ ________ __________
Deductions from net assets
attributed to:
Distributions to participants 2,170,801 610,205 6,793 33,313 113,937
Interest expense 1,267,764
Administrative expenses 14,344 2,363 326 261 1,450
___________ ___________ ________ ________ __________
Total deductions 3,452,909 612,568 7,119 33,574 115,387
___________ ___________ ________ ________ __________
Transfer of assets between
trustees 328,085 710,584 4,355,760
Interfund transfers in (out) 1,735,282 (2,543,451) (2,288) (26,968) 19,332
___________ ___________ ________ ________ __________
Net transfers in (out) 1,735,282 (2,543,451) 325,797 683,616 4,375,092
___________ ___________ ________ ________ __________
Net increase (decrease) 31,863,193 (1,858,135) 388,813 702,090 5,207,030
Net assets available for benefits,
beginning of year 23,899,277 10,524,007 - - -
___________ ___________ ________ ________ __________
Net assets available for benefits,
end of year $55,762,470 $ 8,665,872 $388,813 $702,090 $5,207,030
___________ ___________ ________ ________ __________
___________ ___________ ________ ________ __________
AIM AIM Oppenheimer Fidelity Fidelity
Balanced Blue Chip Disciplined Money Market Intermediate
Fund Fund Value Fund Trust Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Contributions:
Employer $ - $ - $ - $ - $ -
Participant 140,228 111,481 5,912 94,761 94,761
__________ __________ _______ _________ _________
140,228 111,481 5,912 94,761 94,761
Investment income:
Interest 978 710 19 11,284 26,687
Dividends 7,715 2,924 8
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 90,063 189,185 (145) - 12,333
__________ __________ _______ _________ _________
98,756 192,819 (118) 11,284 39,020
Total additions 238,984 304,300 5,794 106,045 133,781
__________ __________ _______ _________ _________
Deductions from net assets
attributed to:
Distributions to participants 31,086 47,867 15,869 24,461
Interest expense
Administrative expenses 653 387 46 4 7
__________ __________ _______ _________ _________
Total deductions 31,739 48,254 46 15,873 24,468
__________ __________ _______ _________ _________
Transfer of assets between
trustees 1,297,643 1,429,476 (328,085) (710,584)
Interfund transfers in (out) 32,045 114,826 23,427 (39,381) (38,393)
__________ __________ _______ _________ _________
Net transfers in (out) 1,329,688 1,544,302 23,427 (367,466) (748,977)
__________ __________ _______ _________ _________
Net increase (decrease) 1,536,933 1,800,348 29,175 (277,294) (639,664)
Net assets available for benefits,
beginning of year - - - 277,294 639,664
__________ __________ _______ _________ _________
Net assets available for benefits,
end of year $1,536,933 $1,800,348 $29,175 $ - $ -
__________ __________ _______ _________ _________
__________ __________ _______ _________ _________
Fidelity
Fidelity U.S. Asset Fidelity Participant
Equity Index Manager Contra Loans
Portfolio Fund Fund Fund Total
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Contributions:
Employer $ - $ - $ - $ _ $ 3,708,186
Participant 427,684 148,507 91,992 146,452 4,956,380
___________ ___________ ___________ ________ ___________
427,684 148,507 91,992 146,452 8,664,566
Investment income:
Interest 13,016 74,362
Dividends 50,245 93,515 108,737 731,720
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 531,786 56,887 48,738 - 28,984,027
___________ ___________ ___________ ________ ___________
582,031 150,402 157,475 13,016 29,790,109
Total additions 1,009,715 298,909 249,467 159,468 38,454,675
___________ ___________ ___________ ________ ___________
Deductions from net assets
attributed to:
Distributions to participants 95,553 34,472 27,995 191,505 3,403,857
Interest expense 1,267,764
Administrative expenses 41 12 14 - 19,908
___________ ___________ ___________ ________ ___________
Total deductions 95,594 34,484 28,009 191,505 4,691,529
___________ ___________ ___________ ________ ___________
Transfer of assets between trustees (4,355,760) (1,297,643) (1,429,476)
Interfund transfers in (out) 94,950 (28,738) 225,618 433,739 -
___________ ___________ ___________ ________ ___________
Net transfers in (out) (4,260,810) (1,326,381) (1,203,858) 433,739 -
___________ ___________ ___________ ________ ___________
Net increase (decrease) (3,346,689) (1,061,956) (982,400) 401,702 33,763,146
Net assets available for benefits,
beginning of year 3,346,689 1,061,956 982,400 400,707 41,131,994
___________ ___________ __________ ________ ___________
Net assets available for benefits,
end of year $ - $ - $ - $802,409 $74,895,140
___________ ___________ ___________ ________ ___________
___________ ___________ ___________ ________ ___________
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Statement of Changes in Net Assets Available for
Benefits with Fund Information
Year Ended June 30, 1997
Page 5
________________________________________________________________________________
<TABLE>
<CAPTION>
The Anheuser-
Earthgrains Busch Fidelity Fidelity Fidelity U.S.
Company Companies Money Market Intermediate Equity Index
Stock Fund Stock Fund Trust Fund Bond Fund Portfolio
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Contributions:
Employer $ 3,462,904 $ - $ - $ - $ -
Participant 2,075,936 (19,380) 110,125 163,335 790,601
___________ ____________ ________ __________ __________
5,538,840 (19,380) 110,125 163,335 790,601
Investment income:
Interest 13,913 44,999
Dividends 121,414 271,184 74,231
Net realized and unrealized
appreciation in fair
value of investments 17,703,333 1,309,924 - 5,665 720,357
___________ ___________ ________ __________ __________
17,824,747 1,581,108 13,913 50,664 794,588
Total additions 23,363,587 1,561,728 124,038 213,999 1,585,189
___________ ___________ ________ _________ __________
Deductions from net assets attributed to:
Distributions to participants 268,512 830,572 17,088 31,127 166,051
Interest expense 1,207,523
Administrative expenses 14,800 23 483 807 3,708
___________ ___________ ________ _________ __________
Total deductions 1,490,835 830,595 17,571 31,934 169,759
___________ ___________ ________ _________ __________
Transfer of assets from (to)
Anheuser-Busch plans 522,155 (52,115) (642) (681) (34,077)
Interfund transfers in (out) 802,918 (1,521,775) (53,594) (220,831) 243,549
___________ ___________ ________ _________ __________
Net transfers in (out) 1,325,073 (1,573,890) (54,236) (221,512) 209,472
___________ ___________ ________ _________ __________
Net increase (decrease) 23,197,825 (842,757) 52,231 (39,447) 1,624,902
Net assets available for benefits,
beginning of year 701,452 11,366,764 225,063 679,111 1,721,787
___________ ___________ ________ _________ __________
Net assets available for benefits,
end of year $23,899,277 $10,524,007 $277,294 $ 639,664 $3,346,689
___________ ___________ ________ _________ __________
___________ ___________ ________ _________ __________
Fidelity
Asset Fidelity Participant
Manager Contra Loans
Fund Fund Fund Total
<S> <C> <C> <C> <C>
Additions to net assets
attributed to:
Contributions:
Employer $ - $ - $ - $ 3,462,904
Participant 308,857 52,487 174,167 3,656,128
__________ ________ ________ ___________
308,857 52,487 174,167 7,119,032
Investment income:
Interest 501 3 59,416
Dividends 80,247 16,945 564,021
Net realized and unrealized
appreciation in fair
value of investments 98,566 85,211 - 19,923,056
__________ ________ ________ ___________
179,314 102,156 3 20,546,493
Total additions 488,171 154,643 174,170 27,665,525
__________ ________ ________ ___________
Deductions from net assets
attributed to:
Distributions to participants 76,711 1,392 152,958 1,544,411
Interest expense 1,207,523
Administrative expenses 1,451 4 - 21,276
__________ ________ ________ ___________
Total deductions 78,162 1,396 152,958 2,773,210
__________ ________ ________ ___________
Transfer of assets from (to)
Anheuser-Busch plans (8,915) (81) 425,644
Interfund transfers in (out) (87,119) 829,234 7,618 -
__________ ________ ________ ___________
Net transfers in (out) (96,034) 829,153 7,618 425,644
__________ ________ ________ ___________
Net increase (decrease) 313,975 982,400 28,830 25,317,959
Net assets available for benefits,
beginning of year 747,981 - 371,877 15,814,035
__________ ________ ________ ___________
Net assets available for benefits,
end of year $1,061,956 $982,400 $400,707 $41,131,994
__________ ________ ________ ___________
__________ ________ ________ ___________
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Notes to Financial Statements
June 30, 1998
Page 6
________________________________________________________________________________
1. Description of the plan
The following summary of The Earthgrains Employee Stock Ownership/401(k)
Plan (Plan) is intended to provide only a general description of the Plan.
Participants should refer to the plan document for more complete information.
General
The Earthgrains Company Employee Stock Ownership/401(k) Plan is an amendment
and restatement, effective July 1, 1996, of The Earthgrains Company Employee
Stock Ownership Plan. The Earthgrains Company Employee Stock Ownership Plan was
an amendment and restatement, effective March 26, 1996, of the Anheuser-Busch
Companies, Inc. Deferred Income Stock Purchase and Savings Plan (for certain
employees of Campbell Taggart, Inc.), which was originally adopted by The
Earthgrains Company (Earthgrains or the Company), formerly known as Campbell
Taggart, Inc., effective July 1, 1994, for the exclusive benefit of its eligible
employees.
The Plan is intended to be an employee stock ownership plan (ESOP) within
the meaning of the Internal Revenue Code (Code), designed to primarily invest in
Company common stock, and is intended to constitute a cash or deferred
arrangement pursuant to section 401(k) of the Code.
Plan amendments
Effective March 26, 1996, Earthgrains was spun-off as an independent, public
company from Anheuser-Busch Companies, Inc. (Anheuser-Busch). The Anheuser-
Busch Deferred Income Stock Purchase and Savings Plan was amended and renamed
The Earthgrains Company Employee Stock Ownership Plan, effective March 26, 1996,
in order to make certain changes consistent with the Company's spin-off from
Anheuser-Busch. On this date, provisions were added to the Plan to permit the
leveraged acquisition of Company common stock by the Plan. Additionally, each
participant's account in the Plan was credited with one share of Earthgrains
common stock for every 25 shares of Anheuser-Busch common stock owned at the
record date. As a result of this transaction, the Plan's assets were
transferred from Anheuser-Busch to The Earthgrains Company and a new investment
fund, The Earthgrains Company Stock Fund, was created to hold investments in
Earthgrains common stock. Effective July 1, 1996, The Earthgrains Company
Employee Stock Ownership Plan was amended and renamed The Earthgrains Company
Stock Ownership/401(k) Plan and the Plan's year end was changed from March 31 to
June 30. Effective April 1, 1998, the Company matching increased from 3% of
participants' annual compensation to 4%.
Plan administration
The Plan's named fiduciaries are Earthgrains, as sponsor and plan
administrator, and Merrill Lynch (Trustee) as trustee. As sponsor, the Company
has the right to amend the Plan, designate the Plan's named fiduciaries and
exercise all fiduciary functions necessary for the operation of the Plan except
those which are assigned to another named fiduciary by the Plan or the trust
agreement. The Company has appointed the Human Resource Committee to exercise
the authority and responsibility for general administration of the Plan. The
Trustee has the exclusive
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Notes to Financial Statements
June 30, 1998
Page 7
________________________________________________________________________________
authority and discretion to invest, manage and hold assets of the trust in
accordance with the provisions of the Plan and the separate trust agreement.
Plan participation
Each employee (other than employees covered by a nonparticipating collective
bargaining agreement) is eligible to participate in the Plan after the employee
has been credited with one year of service. Participation by eligible employees
is voluntary.
Contributions
A participant may make matched and unmatched contributions. Both matched
and unmatched contributions may be before-tax and after-tax. A participant may
contribute from 1% to 4% of their compensation through payroll deduction for
before-tax matched contributions and after-tax matched contributions. The sum
of the matched contributions may not be less than 1% or more than 4% of the
participant's compensation. In addition, the participant may contribute from
1%-16% of their compensation through payroll deduction for before-tax unmatched
contributions and after-tax unmatched contributions; however, the maximum amount
of the before-tax contributions allowed in calendar year 1997 was $9,500. In
addition, the sum of before-tax and after-tax contributions rates must not
exceed 16% of the participant's compensation, subject to certain limitations of
the Internal Revenue Code. The Company contributes a matching amount equal to
100% of a participant's matched contributions, but not to exceed 4% of a
participant's annual compensation.
Participant contributions vest and become non-forfeitable immediately.
Employer contributions vest and become non-forfeitable after two years of
service. Employer contributions also vest upon termination of employment by
reason of death, permanent disability, upon termination of employment after
reaching age 60, or in the event of a "change in control" of the Company (as
defined in the Plan). Forfeitures of nonvested balances are used to pay
administrative Plan expenses. At June 30, 1998, forfeited nonvested accounts
totaled $66,243.
Investments
The Trustee maintains The Earthgrains Company Stock Fund, the Anheuser-Busch
Companies Stock Fund, the Merrill Lynch Institutional Fund, the Merrill Lynch
Equity Index Trust Fund, the Oppenheimer Disciplined Value Fund, the Oppenheimer
U.S. Government Fund, the AIM Blue Chip Fund, and the AIM Balanced Fund for the
investment of participant and employer contributions. All employer
contributions are invested in The Earthgrains Company Stock Fund. At least 50%
of each participant's matched contributions must be invested in The Earthgrains
Company Stock Fund for at least one full plan year after the date the matched
contributions are credited to the Plan. After the participant's matched
contributions have matured, they may elect to invest the matched contributions
in other investment funds. The balance of contributions can be invested in
increments of 1% into any fund established under the Plan. Earnings are
reinvested in the fund to which they relate.
Distributions
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Notes to Financial Statements
June 30, 1998
Page 8
________________________________________________________________________________
The Plan permits three types of in-service withdrawals: a non-hardship
withdrawal, an age 59 1/2 withdrawal and a hardship withdrawal, as defined in
the Plan document, subject to certain restrictions. Distributions for
terminations are comprised of the participant's vested account balance.
Employer contributions may or may not be vested depending on the circumstances
of the terminations as defined in the plan document. Any portion not vested
will be forfeited if the participant is terminated and does not return to work
within five years. Termination distributions from The Earthgrains Company Stock
Fund and the Anheuser-Busch Companies Stock Fund will be in the form of a stock
certificate for all full shares and a check for the fair market value of any
partial shares. Alternatively, the participant may elect to receive the fair
market value of this common stock in cash. The value of any investments in
other funds will be distributed in cash by a check unless the participant elects
to have these amounts converted to Company stock prior to distribution. All in-
service withdrawals are distributed in cash.
Participant loans
A participant may borrow before-tax and/or after-tax vested account
balances. The minimum loan amount is $1,000; the maximum amount is the lesser
of $50,000 less the highest outstanding loan balance under the Plan during the
last 12 months, or 50% of the vested account balance. The interest rate is set
at the prime rate plus one percentage point. Once the loan has been approved,
the interest rate is fixed for the entire term of the loan. The term of the
loan for the purchase of a principal residence may be up to 10 years; the term
of a loan for any other reason may not exceed 5 years.
Expenses
Under the Plan, participants are charged an annual recordkeeping fee in
addition to a loan fee, if applicable. The recordkeeping fee is charged against
earnings on the participants' investments. All other fees of the Plan are paid
first by forfeiture of nonvested account balances and then by the Company.
Amendment or termination of the Plan
The Company anticipates that the Plan will continue without interruption,
but reserves the right to terminate its participation in the Plan subject to
provisions of ERISA. If the Plan terminates, the Investment Committee will
direct an accounting and distribution of all amounts held in the trust to the
participants and beneficiaries. The distributions will be made in a lump-sum to
each participant or beneficiary in the Plan account as of the termination date.
This distribution will take place no later than one year subsequent to the Plan
termination.
2. Summary of significant accounting policies
Basis of accounting
The Plan's financial statements are prepared on the accrual basis of
accounting.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Notes to Financial Statements
June 30, 1998
Page 9
________________________________________________________________________________
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
additions to and deductions from net assets during the reporting period. Actual
results could differ from those estimates.
Investment valuation
Investments in common stock, U.S. government securities and corporate debt
instruments are stated at fair value based on the quoted market price at June
30, 1998 and 1997, respectively. Investments in interest bearing cash and
interests in common/collective trusts are stated at fair value as determined by
the Trustee. Participant loans are valued at cost which approximates fair
value.
Security transactions and investment income
Investment purchases and sales, and related realized gains or losses, are
recorded on the valuation date. Interest and dividend income are also recorded
as of the valuation date. Net realized and unrealized appreciation in fair
value of investments is comprised of the change in market value compared to the
cost of investments retained in the Plan, and realized gains and losses on
security transactions which represent the difference between proceeds and cost.
3. Federal income tax status
The Internal Revenue Service has determined and informed the Company by a
letter dated April 23, 1998 that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC). Therefore, no provision
for income taxes has been included in the Plan's financial statements.
4. Reconciliation of financial statements to Form 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
June 30,
1998 1997
<S> <C> <C>
Net assets available for benefits per the
Financial statements $74,895,140 $41,131,994
Amounts allocated to withdrawing participants (37,285) (150,654)
___________ ___________
Net assets available for benefits per
the Form 5500 $74,857,855 $40,981,340
___________ ___________
___________ ___________
</TABLE>
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Notes to Financial Statements
June 30, 1998
Page 10
________________________________________________________________________________
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year ended
June 30, 1998
<S> <C>
Distributions to participants per the
financial statements $3,403,857
Add: Amounts allocated to withdrawing
participants at June 30, 1998 37,285
Less: Amounts allocated to withdrawing
participants at June 30, 1997 (150,654)
__________
Distributions to participants per
the Form 5500 $3,290,488
__________
__________
</TABLE>
5. Transactions with parties-in-interest
At June 30, 1998 and 1997, the Plan held shares of The Earthgrains Company
common stock. These shares had a total cost of $25,693,565 and $20,112,962 and
total market value of $69,568,070 and $38,345,398 at June 30, 1998 and 1997,
respectively. During the 12 months ended June 30, 1998, transactions with the
Company included aggregate purchases and sales totaling $15,704,711 and
$1,409,348, respectively.
At June 30, 1998 and 1997, the Plan held shares of Anheuser-Busch common
stock. These shares had a total cost of $4,676,820 and $5,984,453 and total
market value of $8,665,872 and $10,244,638 at June 30, 1998 and 1997,
respectively. During the year ended June 30, 1998, transactions with Anheuser-
Busch included aggregate purchases and sales totaling $5,255,292 and $1,013,339,
respectively.
During the year ended June 30, 1998, transactions with Wachovia Bank
included aggregate purchases and sales totalling $13,751,459 and $13,753,375,
respectively.
During the year ended June 30, 1998, transactions with Merrill Lynch
included aggregate purchases and sales totaling $5,181,273 and $310,771,
respectively.
These transactions are allowable party-in-interest transactions under
Section 408(e) and 408(b)(8) of ERISA and the regulations promulgated
thereunder.
6. Notes payable.
In July 1996, the Plan issued $16,804,484 in guaranteed 8% ESOP notes to
The Earthgrains Company. Interest is payable quarterly. The ESOP shall have
the right to prepay all at any time, or any portion from time to time, of the
unpaid principal prior to maturity, without penalty or
<PAGE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK
OWNERSHIP/401(k) PLAN
Notes to Financial Statements
June 30, 1998
Page 11
________________________________________________________________________________
premium, provided that on each prepayment date, the ESOP shall pay to the order
of the Company all accrued and unpaid interest on the principal portion being
prepaid to and including the date of such prepayment. Proceeds received from
issuance of the notes were used to purchase 1,026,228 shares of Company common
stock. The shares are maintained in the Company Stock Fund and are released and
allocated to Plan participants to fund employer matching contributions, based on
calculations specified in the plan document, as contributions are made to the
Plan. During the year ended June 30, 1998, 73,789 shares were released to
participants. At June 30, 1998 and 1997 the Company Stock Fund held 828,301 and
0 unallocated shares and 174,042 and 59,838 allocated shares, respectively.
7. Significant event
Effective January 2, 1998, the Company appointed Merrill Lynch as trustee
and recordkeeper. Accordingly, the Plan's assets were transferred from Wachovia
Bank to Merrill Lynch, as reflected in the Statement of Changes in Net Assets
Available for Benefits for the year ended June 30, 1998.
8. Subsequent event
On May 26, 1998, the Earthgrains Board of Directors declared a two-for-one
stock split for shareholders of record as of July 10, 1998. The split is
effective July 20, 1998 and, therefore, the share amounts in Note 6 do not
reflect the stock split.
<PAGE>
<TABLE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK SCHEDULE I
OWNERSHIP/401(k) PLAN
Line 27a - Schedule of Assets Held for
Investment Purposes
June 30, 1998
_______________________________________________________________________________
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, borrower, Description of investment including Cost Current
lessor or similar party maturity date, rate of interest, Value
collateral, par, or maturity value
<S> <S> <S> <C> <C>
* The Earthgrains Company Common stock $25,693,565 $69,568,070
* Anheuser-Busch Companies, Inc. Common stock 4,676,820 8,665,872
* Merrill Lynch Institutional Fund 388,813 388,813
Oppenheimer U.S. Government Fund 706,937 702,090
* Merrill Lynch Equity Index Trust Fund 4,511,150 5,207,030
AIM Balanced Fund 1,448,934 1,536,933
AIM Blue Chip Fund - Class A 1,584,800 1,800,348
Oppenheimer Disciplined Value Fund 29,371 29,175
* Participant Loan Fund Participant loans 802,409 802,409
<FN>
* Represents party in interest.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE EARTHGRAINS COMPANY EMPLOYEE STOCK SCHEDULE II
OWNERSHIP/401(k) PLAN
Line 27d - Schedule of Reportable Transactions*
Year Ended June 30, 1998
______________________________________________________________________
<CAPTION>
(b)
Description of asset (c) (d) (e)
(a) (include interest rate and Purchase Selling Lease
Identity of party involved maturity in case of a loan) Price Price Rental
<S> <S> <C> <C> <C>
Anheuser-Busch Companies, Inc. Common Stock $ 5,255,292
$ 1,013,339
The Earthgrains Company Common Stock 15,704,711
1,409,348
Wachovia Bank DTI Short-Term Investment Fund 13,751,459
13,753,375
Fidelity U.S. Equity Index Portfolio 679,873
4,558,352
Merrill Lynch Institutional Fund 433,586
44,945
Merrill Lynch Equity Index Trust Fund 4,747,687
265,826
Oppenheimer U.S. Government Fund 787,997
80,362
AIM Balanced Fund 1,524,183
79,823
AIM Blue Chip Fund 1,660,915
83,465
(b) (h)
(a) Description of (f) (g) Current value of (i)
Identity of party asset (include interest Expense incurred Cost of asset on Net gain
involved rate and maturity in with transaction asset transaction date or (loss)
case of a loan)
<S> <S> <C> <C> <C> <C>
Anheuser-Busch Common Stock $ 5,255,292 $ 5,255,292
Companies, Inc. 539,701 1,013,339 $ 473,638
The Earthgrains Common Stock $5,286 15,709,998 15,704,711
Company 932 875,506 1,409,348 532,910
Wachovia Bank DTI Short-Term 13,751,459 13,751,459
Investment Fund 13,753,375 13,753,375
Fidelity U.S. Equity Index 679,873 679,873
Portfolio 3,336,499 4,558,352 1,221,853
Merrill Lynch Institutional Fund 433,586 433,586
44,945 44,945
Merrill Lynch Equity Index Trust 4,747,687 4,747,687
Fund 236,604 265,826 29,222
Oppenheimer U.S. Government Fund 787,997 787,997
81,060 80,362 (698)
AIM Balanced Fund 1,524,183 1,524,183
75,282 79,823 4,541
AIM Blue Chip Fund 1,660,915 1,660,915
76,175 83,465 7,290
<FN>
* Transactions or series of transactions in excess of 5 percent of the current
value of the Plan's assets as of June 30, 1997 as defined in Section 2520.103-6
of the Department of Labor Rules and Regulations for reporting and disclosure
under ERISA.
</FN>
</TABLE>
<PAGE>
Exhibit 23
PricewaterhouseCoopers LLP
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this filing on Form 11-K
of our report dated May 1, 1998, which appears on page 37 of the 1998 Annual
Report to Shareholders of The Earthgrains Company, which is incorporated by
reference in The Earthgrains Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1998.
/S/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
St. Louis, Missouri
January 11, 1999
<PAGE>
