UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 11-K
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
| | TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: NO. 001-13705
--------------------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
KEEBLER COMPANY
UNION SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Keebler Foods Company
677 Larch Avenue
Elmhurst, IL 60126
<PAGE>
KEEBLER COMPANY UNION SAVINGS PLAN
TABLE OF CONTENTS
PAGE(S)
Report of Independent Accountants..................................... 1
Financial Statements:
Statement of Net Assets Available for Benefits
as of December 31, 1999 and 1998........................ 2
Statement of Changes in Net Assets Available for Benefits
for the years ended December 31, 1999 and 1998.......... 3
Notes to Financial Statements................................ 4-7
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes
as of December 31, 1999.................................. 8
Signatures............................................................ 9
Exhibit:
23 Consent of Independent Accountants
Note: Supplemental schedules required by the Employee Retirement Income
Security Act of 1974 that have not been included herein are not
applicable to the Keebler Company Union Savings Plan.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Retirement Committee of
Keebler Company Union Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits,
present fairly, in all material respects, the net assets available for benefits
of the Keebler Company Union Savings Plan (the "Plan") as of December 31, 1999
and 1998 and the changes in net assets available for benefits for the years
ended December 31, 1999 and 1998, in conformity with accounting principles
generally accepted in the United States. 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 financial statements in accordance with auditing standards
generally accepted in the United States which 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,
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 audit of the Plan's financial statements as of and for the year ended
December 31, 1999 was made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedule of Schedule of
Assets Held for Investment Purposes at December 31, 1999 is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Security Act of 1974. The supplemental schedule has been subjected to
the procedures applied in the audit of the basic financial statements as of and
for the year ended December 31, 1999, and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
June 23, 2000
<PAGE>
<TABLE>
<CAPTION>
KEEBLER COMPANY UNION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
----------------- ----------------
<S> <C> <C>
ASSETS:
Investments:
Insurance Company general account $ 6,851,591 $ 5,162,060
Pooled separate accounts 10,426,310 7,265,020
Keebler Foods Company common stock 107,031 -
Participant loans 610,397 402,283
---------------- ----------------
Total investments 17,995,329 12,829,363
---------------- ----------------
Contributions and loan repayment receivable 76,283 136,992
---------------- ----------------
Net assets available for benefits $ 18,071,612 $ 12,966,355
================ ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
</TABLE>
<PAGE>
<TABLE>
KEEBLER COMPANY UNION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
----------------- -----------------
<S> <C> <C>
ADDITIONS:
Additions to net assets attributed to:
Contributions:
Employee $ 4,005,231 $ 3,613,361
Rollover balance transfers 98,068 4,161
----------------- -----------------
Net contributions 4,103,299 3,617,522
Investment income:
Interest 355,962 260,736
Net appreciation in investments 1,361,553 1,120,705
----------------- -----------------
Net investment income 1,717,515 1,381,441
----------------- -----------------
Total additions 5,820,814 4,998,963
----------------- -----------------
OTHER (DECREASES):
Benefit payments to participants (715,557) (375,864)
----------------- -----------------
Net increase 5,105,257 4,623,099
----------------- -----------------
Net assets available for benefits:
Beginning of year 12,966,355 8,343,256
----------------- -----------------
End of year $ 18,071,612 $ 12,966,355
================= =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
</TABLE>
<PAGE>
KEEBLER COMPANY UNION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. PLAN DESCRIPTION
The following brief description of the Keebler Company Union Savings Plan
(the "Plan") is provided for general information only. Participants
should refer to the Plan agreement for more complete information.
GENERAL
The Plan, which became effective January 1, 1995, is a defined
contribution plan offered to eligible employees of Keebler Foods Company
("Keebler").
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
PARTICIPATION AND CONTRIBUTION
All Keebler employees who are members of a participating collective
bargaining unit are eligible to participate in the Plan. Eligible
employees may elect to have Keebler make before-tax contributions on
their behalf in increments of 1% to 15% of the participant's
compensation. Before-tax contributions are limited by the applicable laws
under ERISA.
Employer contributions are not required or permitted by the Plan.
VESTING
Participants are 100% vested in employee contributions and any earnings
thereon immediately upon entering the Plan.
PAYMENT OF BENEFIT
A participant is eligible to receive a distribution in the form of a
single lump-sum cash payment upon reaching normal retirement age or his
or her termination as defined in the Plan. If the participant dies before
a distribution is made then his or her vested balance shall be
distributed in accordance with the participants' specifications. An
employee may also apply for a hardship withdrawal as defined in the
Plan. A participant may also receive 100% of his or her vested balance
upon retirement due to disability.
PARTICIPANT LOANS
A participant may borrow an amount no less than $1,000 and not to exceed
$50,000, less any loan amounts repaid in the previous twelve months or,
50% of his or her vested account balance. Each loan must be evidenced by
a participant collateral promissory note. Each loan bears a fixed
interest rate determined on a case by case basis given the prevailing
prime interest rate at the time of the loan application. The loan
repayment period generally ranges between one and five years. Upon
retirement or termination, any outstanding loan balance will be treated
as a participant distribution.
ADMINISTRATIVE EXPENSES
The Plan is administered by a Retirement Committee appointed by Keebler's
Board of Directors. All expenses incurred in the administration of the
Plan are paid by Keebler with the exception of certain transaction fees
charged on loans and withdrawals, which are paid by the participants.
4
<PAGE>
KEEBLER COMPANY UNION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
1. PLAN DESCRIPTION (CONTINUED)
FUND INFORMATION
Connecticut General Life Insurance Company ("CIGNA") serves as the
trustee and record keeper of the Plan. Under the terms of the Plan
agreement, CIGNA invests contributions in fourteen investment accounts in
proportions specified by participants. Participants should refer to the
Plan agreement for descriptions of investment options.
Investment in Keebler Foods Company Common Stock fund contains
investments in Keebler's common stock.
Deposits allocated to a specific fund are commingled with those of other
participants and are invested in accordance with the policies of the
specific fund. Realized and unrealized gains and losses, dividends,
interest income and expenses are allocated to individual participants
based on their proportionate interest in the fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis in
accordance with generally accepted accounting principles.
REALIZED AND UNREALIZED GAINS AND LOSSES
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation in investments, which consists of realized
gains or losses and the unrealized appreciation (depreciation) on those
investments.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in several investment
securities. Investment securities are exposed to various risks, such as
interest rate, market and credit. Due to the level of risk associated
with certain investment securities and the level of uncertainty related
to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would
materially affect participants' account balances and the amounts reported
in the statement of net assets available for benefits and the statement
of changes in net assets available for benefits.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires the Plan administrator
to make estimates and assumptions that affect the reported amounts of net
assets available for benefits at the date of the financial statements and
the changes in net assets available for benefits during the reporting
period and, when applicable, the disclosures of contingent assets and
liabilities at the date of the financial statements. Actual results could
differ from those estimates.
5
<PAGE>
KEEBLER COMPANY UNION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
3. INVESTMENTS
The Plan's investment in an insurance company general account
(unallocated contract) is valued at contract value, which approximates
fair value. The value represents contributions made to the fund, plus
interest at the contract rate. The interest rate is determined in
November for the upcoming Plan year. The annual yield and the crediting
interest rate for the years ended December 31, 1999 and 1998 were 5.50%
and 5.85%, respectively.
The Plan's investments in the Fidelity Advisor Balanced Account, Fidelity
Growth Opportunities Account, Janus Worldwide Account, American
(Twentieth) Century Ultra Account, Fidelity Contrafund Account, Lazard
Small Cap Account, CIGNA Lifetime 20 Fund, CIGNA Lifetime 30 Fund, CIGNA
Lifetime 40 Fund, CIGNA Lifetime 50 Fund, CIGNA Lifetime 60 Fund and
CIGNA Charter Large Company Stock Index Fund are valued based on the fair
value of the underlying assets in CIGNA's pooled separate accounts. Fair
value of the underlying assets is based upon quoted market prices as of
the last business day of the year.
The Plan also invests in Keebler Foods Company common stock, the fair
value of which is based upon the closing market price of common stock as
of the last business day of the year.
Investments at fair market value, are summarized as follows:
<TABLE>
<CAPTION>
1999 1998
----------------- -----------------
<S> <C> <C>
CIGNA Charter Guaranteed Long-Term Fund
(cost equals fair market value) $ 6,851,591 * $ 5,162,060 *
Fidelity Advisor Balanced Account
(cost $1,303,461 and $1,100,690, respectively) 1,587,976 * 1,392,797 *
Fidelity Growth Opportunities Account
(cost $2,765,885 and $2,526,654, respectively) 3,641,908 * 3,542,697 *
Janus Worldwide Account
(cost $1,123,143 and $591,304, respectively) 1,715,106 * 629,453
American (Twentieth) Century Ultra Account
(cost $853,310 and $368,937, respectively) 1,170,596 * 425,015
Fidelity Contrafund Account
(cost $748,350 and $409,272, respectively) 960,288 * 478,280
Lazard Small Cap Account
(cost $192,528 and $178,000, respectively) 180,802 152,663
CIGNA Lifetime 20 Fund
(cost $61,800 and $27,483, respectively) 75,237 28,993
CIGNA Lifetime 30 Fund
(cost $69,635 and $51,412, respectively) 84,040 54,245
CIGNA Lifetime 40 Fund
(cost $200,259 and $112,561, respectively) 240,273 119,769
CIGNA Lifetime 50 Fund
(cost $138,163 and $91,806, respectively) 159,372 96,856
CIGNA Lifetime 60 Fund
(cost $7,449 and $3,229, respectively) 8,091 3,438
* Represents 5% or more of the Plan's net assets.
6
</TABLE>
<PAGE>
KEEBLER COMPANY UNION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
1999 1998
----------------- -----------------
<S> <C> <C>
CIGNA Charter Large Company Stock Index Fund
(cost $491,120 and $303,355, respectively) 602,621 340,814
Keebler Foods Company Common Stock
(cost $113,114) 107,031 -
Participant Loans
(interest rate 8.0% to 10.75%) 610,397 402,283
----------------- -----------------
$ 17,995,329 $ 12,829,363
================= =================
</TABLE>
During 1999 and 1998, the Plan's investments in pooled separate accounts
and common stock appreciated (depreciated) in value as follows:
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
Pooled separate accounts $ 1,367,620 $ 1,120,705
Keebler Foods Company common stock (6,067) -
--------------- ---------------
Net appreciation in fair value $ 1,361,553 $ 1,120,705
=============== ===============
</TABLE>
4. TAX STATUS
The Plan is intended to be qualified under section 401(a) of the Internal
Revenue Code of 1986 (the "Code") and is intended to be exempt from
taxation under section 501(a) of the Code. The Plan relies on a favorable
opinion letter issued by the IRS dated May 1, 1996. The Plan
administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Code and
the related trust was tax-exempt as of the financial statement date.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
5. PLAN TERMINATION
Keebler has the right to terminate the Plan subject to the provisions of
ERISA at any time, although it has expressed no intention to do so. Upon
termination of the Plan, participants become fully vested in their
accounts and are entitled to a distribution from the Plan.
6. RELATED PARTY TRANSACTIONS
Certain plan investments are pooled separate accounts and an insurance
company general account managed by CIGNA. CIGNA is the trustee and record
keeper, as defined by the Plan and, therefore, these transactions qualify
as party-in-interest. In addition, plan investments include loan balances
due from participants; thus, these transactions qualify as
party-in-interest.
7
<PAGE>
SUPPLEMENTAL SCHEDULE
<PAGE>
KEEBLER COMPANY UNION SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Historical Market
Identity of Issuer Description of Investment Cost Value
-------------------------------------------------- ---------------------------------- -------------- --------------
<S> <C> <C> <C>
Connecticut General Life Insurance Company:
* CIGNA Charter Guaranteed Long-Term Fund Insurance Company General Account $ 6,851,591 $ 6,851,591
Fidelity Advisor Balanced Account Pooled Separate Account 1,303,461 1,587,976
Fidelity Growth Opportunities Account Pooled Separate Account 2,765,885 3,641,908
Janus Worldwide Account Pooled Separate Account 1,123,143 1,715,106
American (Twentieth) Century Ultra Account Pooled Separate Account 853,310 1,170,596
Fidelity Contrafund Account Pooled Separate Account 748,350 960,288
Lazard Small Cap Account Pooled Separate Account 192,528 180,802
* CIGNA Lifetime 20 Fund Pooled Separate Account 61,800 75,237
* CIGNA Lifetime 30 Fund Pooled Separate Account 69,635 84,040
* CIGNA Lifetime 40 Fund Pooled Separate Account 200,259 240,273
* CIGNA Lifetime 50 Fund Pooled Separate Account 138,163 159,372
* CIGNA Lifetime 60 Fund Pooled Separate Account 7,449 8,091
* CIGNA Charter Large Company Stock Index Fund Pooled Separate Account 491,120 602,621
Keebler Foods Company Common Stock Common Stock 113,114 107,031
* Participant Loans 10.25%-10.75% (rate of interest) - 610,397
-------------- --------------
$ 14,919,808 $ 17,995,329
============== ==============
* Party-in-interest
8
</TABLE>
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the administrators of the Plan have duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
KEEBLER COMPANY
UNION SAVINGS PLAN
(Name of Plan)
/s/ JAMES T. SPEAR
------------------------------------------------------
James T. Spear
Vice President Finance and Corporate Controller
(Principal Accounting Officer)
Date: June 28, 2000
/s/ ALAN T. GAMBREL
------------------------------------------------------
Alan T. Gambrel
Vice President Human Resources
Date: June 28, 2000
9
