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 calendar 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 0-30270
A. Full title of the Plan and the address of the Plan, if
different from that of the issuer named below:
WITCO CORPORATION
EMPLOYEE RETIREMENT SAVINGS PLAN
ONE AMERICAN LANE
GREENWICH, CT 06831
B. Name of issuer of the securities held pursuant to the
Plan and the address of its principal executive
office:
Crompton Corporation
One American Lane
Greenwich, Connecticut 06831
WITCO CORPORATION EMPLOYEE
RETIREMENT SAVINGS PLAN
Financial Statements
and Supplemental Schedules
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
WITCO CORPORATION EMPLOYEE RETIREMENT SAVINGS PLAN
Table of Contents
Page
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits,
(Modified Cash Basis) as of December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for
Benefits (Modified Cash Basis) for the Years Ended
December 31, 1999 and 1998 3
Notes to Financial Statements (Modified Cash Basis) 4-7
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes at End
of Year 8
Other schedules are omitted because of the absence of conditions under which
they are required.
Independent Auditors' Report
Management and Employees of Crompton Corporation:
We have audited the accompanying statement of net assets available for
benefits (modified cash basis) of the Witco Corporation Employee Retirement
Savings Plan (the "Plan") as of December 31, 1999, and the related statement
of changes in net assets available for benefits (modified cash basis) for the
year 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 audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
As described in Note 1, these financial statements and supplemental schedule
were prepared on a modified cash basis of accounting, which is a comprehensive
basis of accounting other than generally accepted accounting principles.
In our opinion, the 1999 financial statements referred to above present
fairly, in all material respects, information regarding the Plan's assets
available for benefits (modified cash basis) as of December 31, 1999, and
changes therein (modified cash basis) for the year then ended, on the basis of
accounting described in Note 1.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule (modified
cash basis) of assets held for investment purposes at end of year as of
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 Income Security Act of
1974. The supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule (modified cash basis) has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/KPMG LLP
Stamford, Connecticut
June 16, 2000
Report of Independent Auditors
Management and Employees of Witco Corporation
We have audited the accompanying statement of net assets available for benefits
(modified cash basis) of the Witco Corporation Employee Retirement Savings Plan
as of December 31, 1998, and the related statement of changes in net assets
available for benefits (modified cash basis) for the year 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
As described in Note 1, the financial statements were prepared on a modified
cash basis of accounting, which is a comprehensive basis of accounting other
than accounting principles generally accepted in the United States.
In our opinion, the financial statements referred to above present fairly, in
all material respects, information regarding the Plan's net assets available for
benefits (modified cash basis) as of December 31, 1998, and changes therein
(modified cash basis) for the year then ended, on the basis of accounting
described in Note 1.
/s/Ernst & Young LLP
Stamford, Connecticut
June 18, 1999
WITCO CORPORATION EMPLOYEE RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
(Modified Cash Basis)
December 31, 1999 and 1998
Assets 1999 1998
Investments at fair value:
CK Witco Common Stock Fund $ 10,652,845 $ 10,211,683
Mutual Funds 170,211,618 162,605,992
Participant Loans Receivable 2,343,588 3,063,427
Net assets available for benefits $ 183,208,051 $ 175,881,102
See accompanying notes to financial statements.
WITCO CORPORATION EMPLOYEE RETIREMENT SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
(Modified Cash Basis)
Years ended December 31, 1999 and 1998
1999 1998
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 17,480,735 $ 270,208
Dividends 13,398,827 11,555,878
30,879,562 11,826,086
Contributions:
Participants 9,287,431 10,346,533
Employer 2,680,416 2,871,985
11,967,847 13,218,518
Loan repayments 80,618 298,351
Total additions 42,928,027 25,342,955
Deductions from net assets attributed to:
Withdrawals (35,533,218) (20,301,109)
Administrative expenses (67,860) (124,421)
Total deductions (35,601,078) (20,425,530)
Net increase 7,326,949 4,917,425
Net assets available for benefits
at beginning of year 175,881,102 170,963,677
Net assets available for benefits
at end of year $ 183,208,051 $ 175,881,102
See accompanying notes to financial statements.
WITCO CORPORATION EMPLOYEE RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(Modified Cash Basis)
December 31, 1999 and 1998
(1) Significant Accounting Policies
Accounting Basis
The accompanying financial statements have been prepared on
a modified basis of cash receipts and disbursements;
consequently, contributions, interest income and the related
assets are recognized when received rather than when earned, and
expenses are recognized when paid rather than when the obligation
is incurred. Accordingly, the accompanying financial statements
are presented on a comprehensive basis of accounting other than
generally accepted accounting principles.
Investment Valuation
Investments are stated at fair value. Fair value is
determined by quoted market prices, if an active market exists,
or redemption values, which approximate market value.
Gains/(Losses)
The change in the difference between the fair value and the
cost of investments is reflected as unrealized gains/(losses) in
the aggregate fair value of investments. Realized gains and
losses on the disposal of investments are calculated as the
difference between the proceeds received and the cost of
investments sold. Purchases and sales of securities are recorded
on a trade-date basis. Dividends are recorded on the ex-dividend
date.
Use of Estimates
The preparation of financial statements requires management
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 reported changes in net assets
available for benefits during the reporting period. Actual
results could differ from those estimates.
(2) Description of the Plan
The Witco Corporation Employee Retirement Savings Plan (the
"Plan") is a defined contribution plan established for the
purpose of encouraging and assisting eligible employees of Witco
Corporation and subsidiary companies ("Witco" or the "Company")
in following a systematic savings program. Fidelity Investments
is the trustee and recordkeeper of the Plan.
The following description of the Plan provides only general
information. Participants should refer to the Plan document for
a more complete description of the Plan's provisions.
An employee becomes eligible to participate in the Plan on
the first day of the month following 31 days of service. The
Company's matching contribution is 50% of the basic employee
contributions up to 6% of their base salary except for certain
collective bargaining employees whose participation is based upon
the terms of their respective collective bargaining agreements.
In addition, employees may elect to make supplementary after-tax
and pre-tax contributions of 1% to 9% of their base salary except
for certain collective bargaining employees who are limited based
upon the terms of their respective collective bargaining
agreements.
The Plan permits pre-tax and after-tax contributions by
participants. Certain collective bargaining employees are
excluded from making after-tax contributions. Participants may
direct the pre-tax contributions and after-tax contributions,
including Company matching contributions, to be invested in one
or more of ten funds. The ten funds include a CK Witco Common
Stock Fund, and various diversified bond and equity funds as
described below.
CK Witco Common Stock Fund invests primarily in CK Witco
company stock, and a portion in money market instruments for
liquidity.
Managed Income Portfolio II is a stable value fund. It
seeks to provide a competitive level of income over time while
preserving the value of investments by purchasing investment
contracts issued by major insurance companies and banks and
short-term instruments.
Fidelity Magellan Fund is a growth fund. It seeks long-
term capital appreciation by investing in the stocks of well-
known and lesser known foreign and domestic companies.
Fidelity Asset Manager Fund is an asset allocation fund.
It seeks high total return with reduced risk over the long-term
by allocating its assets among domestic and foreign stocks, bonds
and short-term and money market instruments.
Fidelity International Growth and Income Fund seeks
capital growth and current income, by investing principally in
foreign equity securities.
Fidelity Equity Income Fund is a growth and income fund.
It seeks reasonable income by investing in income-producing
equity securities. The Fund tries to achieve a yield that exceeds
the composite yield on securities composing the S&P 500.
Fidelity Asset Manager: Growth Fund is an asset allocation
fund. It seeks to maximize total return over the long-term by
allocating its assets among and across domestic and foreign
stocks, bonds and short-term and money market instruments.
Fidelity Growth Company Fund is a growth fund. It seeks
long-term capital appreciation by investing primarily in common
stocks and securities convertible into common stocks.
Fidelity Asset Manager: Income Fund is an asset allocation
fund. It seeks a high level of current income by allocating its
assets among domestic and foreign stocks, bonds and short-term
and money market instruments.
Fidelity Institutional Short Intermediate Government Fund
is an income fund. It seeks a high level of current income
consistent with preservation of principal by investing
exclusively in U.S. government securities.
Participants are immediately vested in contributions made by
them and become fully vested in the contributions made by the
Company after they have completed three consecutive years of
participation in the Plan or five years of service to the
Company. All former Sherex participants are immediately vested
in contributions made by the Company. Participants who have been
terminated for reasons beyond their own control become fully
vested in the Company's contributions upon their termination.
Non-vested contributions by the Company which have been forfeited
by participants are applied to reduce future contributions by the
Company. Terminated participants whose account balance is in
excess of $5,000 may elect to defer receipt of such amounts until
the required distribution date.
Employees participating in the Plan will not be subject to
federal income tax on amounts contributed to the Plan by the
Company and earnings allocated to their accounts until such time
that their participating interest in the Plan is distributed to
them. The Plan provides that participants may elect to have
their pre-tax contributions, subject to certain limitations,
excluded from taxable income pursuant to Section 401(k) of the
Internal Revenue Code.
Employees are permitted to make hardship withdrawals if
certain criteria are met. Only one hardship withdrawal a year is
permitted.
Employees may borrow up to the lesser of $50,000 or 50% of
their vested account balance at an interest rate of 1% above
prime. Loan repayments are made automatically through payroll
deductions.
The Company, by action of its Board of Directors, may
suspend the operation of the Plan for any year by omitting all or
part of the employer contributions. While the Company has not
expressed any intent to discontinue, terminate or curtail the
Plan, the Company may terminate or amend the Plan for any reason,
at any time, provided that no such termination or amendment shall
permit any of the funds established pursuant to this Plan to be
used for any purpose other than the exclusive benefit of the
participating employees. Upon termination of the Plan, the rights
of members to the benefits accrued under the Plan to the date of
termination shall be nonforfeitable.
(3) Income Tax Status
The Plan has received a determination letter from the
Internal Revenue Service dated December 14, 1995, stating that
the Plan is qualified under Section 401(a) of the Internal
Revenue Code (the "Code"), and therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its
qualification. The Plan has been amended since receiving the
determination letter. However, the Employee Benefits Committee
of the Company believes the Plan is being operated in compliance
with the applicable requirements of the Code and, therefore
believes that the Plan is qualified and the related trust is tax
exempt.
(4) Investments
The fair value of individual investments that represent 5%
or more of the Plan's net assets are as follows:
December 31
1999 1998
CK Witco Common Stock Fund $ 10,652,845 $ 10,211,683
Managed Income Portfolio II 43,026,643 50,905,087
Fidelity Magellan Fund 46,251,874 39,533,984
Fidelity Asset Manager Fund 14,392,731 14,521,967
Fidelity Equity Income Fund 16,236,749 21,109,390
Fidelity Growth Company Fund 28,624,425 15,230,895
(5) Other Disclosures
On September 1, 1999, Witco and Crompton & Knowles
Corporation ("C&K") announced their agreement to merge. Under the
agreement, each share of C&K common stock was converted into one
share of CK Witco Corporation common stock and each share of
Witco common stock was exchanged for 0.9242 shares of common
stock of CK Witco Corporation.
On April 25, 2000, CK Witco Corporation changed its name to
Crompton Corporation.
WITCO CORPORATION EMPLOYEE RETIREMENT SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
Description of
investment including
maturity date,
Identity of issue, rate of interest,
borrower, lessor collateral, par, Current
or similar party or maturity value value
*CK Witco Corporation Common Stock Fund $ 10,652,845
*Fidelity Investments Managed Income Portfolio II 43,026,643
*Fidelity Investments Magellan Fund 46,251,874
*Fidelity Investments Asset Manager Fund 14,392,731
*Fidelity Investments International Growth and
Income Fund 7,856,281
*Fidelity Investments Equity Income Fund 16,236,749
*Fidelity Investments Asset Manager: Growth Fund 7,297,753
*Fidelity Investments Growth Company Fund 28,624,425
*Fidelity Investments Asset Manager: Income Fund 1,448,159
*Fidelity Investments Institutional Short - Intermediate
Government Fund 5,077,003
*Participant Loans Loans made to Plan participants
with maturity dates ranging
from January, 2000 to November,
2014 and interest rates ranging
from 7% to 10% 2,343,588
$ 183,208,051
*Represents a party in interest.
SIGNATURE
The Plan. Pursuant to the requirements of the Securities and
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.
WITCO CORPORATION
EMPLOYEE RETIREMENT SAVINGS PLAN
Date: June 28, 2000 By:/s/Peter Barna
Peter Barna
Senior Vice President &
Chief Financial Officer
