<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
A. Full title of the plan and the address of the plan, if different from
that of the issuer name below:
BESTFOODS SAVINGS/RETIREMENT PLAN FOR SALARIED EMPLOYEES
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
BESTFOODS
700 SYLVAN AVENUE
INTERNATIONAL PLAZA
ENGLEWOOD CLIFFS, NEW JERSEY 07632
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BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report 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
Signatures 11
Consent of Independent Auditors 12
Supplemental Schedule:
Schedule I Schedule of Assets Held for Investment Purposes
At End of Year 13
</TABLE>
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
The Pension and Welfare Committee
Bestfoods Savings/Retirement Plan for Salaried Employees:
We have audited the accompanying statements of net assets available for benefits
of Bestfoods Savings/Retirement Plan for Salaried Employees as of December 31,
1999 and 1998, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Bestfoods
Savings/Retirement Plan for Salaried Employees as of December 31, 1999 and 1998,
and the changes in net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedule I is presented for purposes 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 has been subjected to the auditing procedures applied in
the audits 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.
KPMG LLP
June 8, 2000
<PAGE> 4
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
STATEMENT OF NET ASSETS
AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Assets 1999 1998
------------------------------------------------------- ------------ ------------
<S> <C> <C>
Investments, at fair value: (Notes 2 and 4)
Shares of registered investment companies:
Fidelity Growth & Income Portfolio $ 55,276,742 55,887,368
Fidelity Spartan U.S. Equity Index Fund 29,201,108 23,678,008
Fidelity Contrafund 41,761,506 30,897,000
Fidelity Magellan Fund 54,509,972 38,248,171
Fidelity Overseas Fund 9,912,043 6,380,764
Fidelity Asset Manager 11,857,880 10,053,123
Short-Term Investment Fund 69,685 66,778
Bestfoods Preferred Stock:
Unallocated 168,096,188 211,136,435
Allocated 221,328,190 201,077,811
Bestfoods Stock Fund 51,202,218 60,517,555
Corn Products International Stock Fund 2,744,700 3,191,712
Participant loans receivable 12,821,150 12,880,245
------------ ------------
658,781,382 654,014,970
Investments, at contract value (Note 2)
Group Annuity Contracts 103,416,334 106,257,957
------------ ------------
Total investments 762,197,716 760,272,927
Receivables:
Accrued interest and dividends 326 283
------------ ------------
Total assets 762,198,042 760,273,210
------------ ------------
Liabilities
-------------------------------------------------------
Notes payable, 7.71% Due December 2004 (Note 7) 94,360,000 113,400,000
------------ ------------
Net assets available for benefits $667,838,042 646,873,210
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
2
<PAGE> 5
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 11,404,506 60,341,405
Interest 6,605,876 7,196,797
Dividends (Note 7) 28,314,708 22,165,891
------------- -------------
46,325,090 89,704,093
------------- -------------
Contributions:
Employer 14,142,522 13,278,500
Participants 23,190,735 23,920,416
------------- -------------
37,333,257 37,198,916
------------- -------------
Total additions 83,658,347 126,903,009
------------- -------------
Deductions from net assets attributed to:
Benefits paid to participants (55,225,833) (61,090,782)
Administrative fees (14,145) --
Interest expense (7,453,537) (8,824,962)
------------- -------------
Total deductions (62,693,515) (69,915,744)
------------- -------------
Net increase prior to transfers 20,964,832 56,987,265
Transfers out to Corn Products (Note 1) -- (105,535,946)
------------- -------------
Net increase (decrease) 20,964,832 (48,548,681)
Net assets available for benefits:
Beginning of year 646,873,210 695,421,891
------------- -------------
End of year $ 667,838,042 646,873,210
============= =============
</TABLE>
The accompany notes are an integral part of these financial statements.
3
<PAGE> 6
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
Notes to Financial Statements
December 31, 1999 and 1998
(1) DESCRIPTION OF THE PLAN
The following is a brief description of the Bestfoods
Savings/Retirement Plan for Salaried Employees (the "Plan").
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all eligible salaried
employees of Bestfoods (the "Company"). The Plan allows employees to
set aside part of their compensation for retirement. The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
The Plan is administered by a pension committee.
Effective January 1, 1998, the plan changed its name from the CPC
International Inc. Savings/Retirement Plan for Salaried Employees to
the Bestfoods Savings/Retirement Plan for Salaried Employees.
Effective December 31, 1997, the Company spun-off its corn refining
operations to shareholders. Corn Products International, Inc. became an
independent public company and Bestfoods transferred assets of the Plan
representing units standing to the credit of Corn Products employees to
the trustee of the Corn Products International, Inc. Savings Plan
Trust. In January 1998, $105,535,946 was transferred into the new plan.
CONTRIBUTIONS AND VESTING
Participants may contribute up to 16% of their compensation and may
invest in any one or a combination of eight funds. Participants may
change their investment elections daily. Employees are immediately
vested in their contributions and the earnings thereon.
Participants may make deferred contributions to the Plan in accordance
with Internal Revenue Service Code Section 401(k). These contributions
result in a reduced salary for the employees for Federal Income Tax
purposes. In accordance with the Tax Reform Act of 1986, the maximum
amount an employee can contribute under the 401(k) is $10,000 for 1999
and 1998.
(Continued)
4
<PAGE> 7
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
Notes to Financial Statements
(1), CONTINUED
Company contributions are based on the semiannual repayment of the
Employee Stock Ownership Plan (ESOP) note and the dividends available.
The Company also makes a special year-end contribution of Company ESOP
stock with a value equal to $100 per employee. Shares of convertible
preferred stock are allocated semiannually to participants' accounts
based on the percentage of debt repaid. Prior to 1990, Company
contributions were a percentage match of participants' contributions.
All employer contributions prior to 1990, were deposited into the
Variable Interest Fund. Generally, record keeping and administrative
fees are paid by the Company. Terminated participants with a balance
remaining in the Plan are charged $10.00 a month, deducted on a
quarterly basis.
PARTICIPANT ACCOUNTS
Individual account balances are maintained for each participant.
Contributions are credited to the participant's account based upon the
current share price or, in the case of the Bestfoods Stock Fund, the
current value.
DISTRIBUTION OF BENEFITS
Distribution of benefits will be made to a participant upon retirement,
disability, death or termination of employment. Distributions to
participants or beneficiaries will be in the form of lump-sum
distributions. Participants who retire or become disabled also have an
annuity option available.
Participants in the Bestfoods Stock Fund or the ESOP account may elect
to receive payments in full shares of common stock plus cash for any
fractional shares.
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000 up
to the lessor of $50,000 or 50% of their account balance. Loan
transactions are treated as a transfer between the investment funds and
the loan fund.
The loans bear interest at the prime rate plus one percent at the time
of the loan. Loans are repaid through semi-monthly payroll deductions
and are reinvested into the participant's account according to the
current investment election.
5
<PAGE> 8
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
Notes to Financial Statements
(1), CONTINUED
PLAN AMENDMENT OR TERMINATION
Although it has not expressed any intention to do so, the Company has
reserved the right to amend, modify or terminate the Plan at any time,
subject to the Plan document and applicable laws and regulations.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets
and liabilities at the date of the financial statements. Actual results
could differ from those estimates.
VALUATION OF INVESTMENTS
The mutual funds and the investment in the Company's common stock are
stated at fair market value determined by quoted market prices at the
close of business on December 31. Cost of securities sold is determined
by the "average cost" method. Purchases and sales of securities are
recorded on a trade-date basis.
The Plan entered into 36 group annuity investment contracts. These
contracts are included in the financial statements at contract value
which approximates fair value, as reported to the Plan. Contract value
represents contributions made under contract plus earnings, less funds
used for benefit payments.
Each share of the Bestfoods Series B ESOP convertible preferred stock
is convertible into approximately 4.4 shares of the Company's common
stock. The preferred stock is stated at fair market value of its common
stock equivalent determined by quoted market prices at the close of
business on December 31.
Participant notes receivable are valued at cost, which approximates
fair value.
6
<PAGE> 9
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
Notes to Financial Statements
(2), CONTINUED
SOP 99-3
In September 1999, the American Institute of Certified Public
Accountants issued Statement of Position 99-3, "Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters" (SOP 99-3). SOP 99-3 simplifies the disclosure for
certain investments and is effective for plan years ending after
December 15, 1999 with earlier application encouraged. The Plan
adopted SOP 99-3 effective for the plan year ended December 31, 1999.
Accordingly, information previously required to be disclosed about
participant-directed fund investment programs are not presented in the
Plan's 1999 financial statements. The Plan's 1998 financial statements
have been restated to conform with the 1999 presentation.
FORFEITURES
The value of Company units in the Variable Interest Fund or the ESOP
which are forfeited due to termination of service are used to reduce
the amount of Company contributions.
(3) INVESTMENT PROGRAM
The Plan provides for ten separate investment funds, each with a
primary investment plan (except for amounts temporarily held pending
investment and amounts held for disbursement), as follows:
(a) Employee Stock Ownership Plan - invested solely in Bestfoods
Series B ESOP convertible preferred stock. Only Company
contributions are made to the ESOP.
(b) Fidelity Growth & Income Portfolio - seeks long-term capital
growth, current income, and growth of income by investing in
equity securities (including common and preferred stocks),
convertible securities, bonds, futures and options.
(c) Fidelity Spartan U.S. Equity Index Fund - seeks to achieve a
total return comparable to the total return of the S&P 500 by
investing in the common stocks that make up the S&P 500 Index.
(d) Fidelity Contrafund - seeks long-term capital appreciation by
investing primarily in common stock and securities convertible
into common stock.
(Continued)
7
<PAGE> 10
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
Notes to Financial Statements
(3), CONTINUED
(e) Fidelity Magellan Fund - seeks capital appreciation by
investing primarily in common stock and securities convertible
into common stock of domestic and foreign companies.
(f) Fidelity Overseas Fund - seeks long-term growth of capital
through investment in common stock, securities convertible to
common stock and debt instruments of foreign businesses and
governments.
(g) Fidelity Asset Manager - seeks a high total return by
investing in domestic and foreign stocks, bonds and short-term
instruments.
(h) Bestfoods Stock Fund - invested solely in Bestfoods common
stock.
(i) Variable Interest Fund - invested in investment contracts
issued by insurance companies and banks. The issuer pays
interest at a specified rate for the life of the contract.
(j) Corn Products International Stock Fund - invested solely in
Corn Products International common stock. If a participant had
a balance in the Bestfoods Stock Fund as of December 31, 1997,
he received one unit of Corn Products International common
stock for every four units of Bestfoods stock credited to
their account as of that date. This fund may not receive any
new investments or transfers from other funds. Participants
may transfer from this fund to any other fund but cannot
transfer back into the fund. The Fund will terminate on
December 29, 2000. If a participant has not transferred his
balance to other funds by that date, the Plan will then
distribute the balance based on a participant's current
elections.
(4) INVESTMENTS
The following presents investments that represent five percent or more
of the Plan's net assets, at fair value.
<TABLE>
<CAPTION>
December 31,
1999 1998
------------ ------------
<S> <C> <C>
Fidelity Growth & Income Portfolio $ 55,276,742 55,887,368
Fidelity Contrafund 41,761,506 30,897,000
Fidelity Magellan Fund 54,509,972 38,248,171
Bestfoods Stock Fund 51,202,218 60,517,555
Variable Interest Fund 103,416,334 106,257,957
Employee Stock Ownership Plan* 295,134,389 298,881,307
</TABLE>
------------------
*Nonparticipant-directed
8
<PAGE> 11
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
Notes to Financial Statements
(5) NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed
investments is as follows:
<TABLE>
<CAPTION>
December 31,
1999 1998
------------- -------------
<S> <C> <C>
Employee Stock Ownership Plan
Net Assets:
Bestfoods Preferred Stock:
Unallocated $ 168,096,188 211,136,435
Allocated 221,328,190 201,077,811
Short-Term Investment Fund 69,685 66,778
Accrued interest and dividends 326 283
------------- -------------
389,494,389 412,281,307
Notes payable, 7.7% Due December 2004
(Note 7) 94,360,000 113,400,000
------------- -------------
$ 295,134,389 298,881,307
============= =============
Changes in Net Assets:
Net appreciation $ (5,832,277) 33,176,625
Interest 172,614 174,434
Dividends (Note 7) 12,195,042 12,750,489
Employer contributions 14,142,522 13,278,500
Forfeitures (510,258) (411,707)
Benefits paid to participants (15,858,977) (17,705,134)
Interest expense (7,453,537) (8,824,962)
Transfers to participant-directed investments (602,047) (504,639)
Transfers out to Corn Products (Note 1) -- (37,136,404)
------------- -------------
$ (3,746,918) (5,202,798)
============= =============
</TABLE>
(6) INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated January 14, 1994, that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code
("IRC"). Since receiving the favorable tax determination letter, the
Plan has been amended. The Plan's tax counsel believes that the Plan is
designed, and is currently being operated, in compliance with the
applicable requirements of the IRC.
9
<PAGE> 12
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
Notes to Financial Statements
(7) EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP")
Effective December 1989, the Company established an Employee Stock
Ownership Plan ("ESOP") which originally purchased 2,241,901 shares of
Bestfoods Series B ESOP convertible preferred stock with proceeds from
a $200,000,000 borrowing which is guaranteed by the Company. The Plan
is required to make the following principal payments: 2000 -
$20,680,000; 2001 - $22,340,000; 2002 - $24,020,000; 2003 - $13,180,000
and 2004 - $14,140,000.
Company contributions, plus dividends on the shares held by the ESOP,
are expected to be used to meet interest and principal payments on the
borrowing over a 15-year term. As loan payments are made, shares of
preferred stock acquired with loan proceeds will be allocated to
eligible employees.
The preferred stock is convertible into approximately 7.4 million
shares of the Company's common stock. The preferred stock pays an
annual dividend of $7.14 per share.
During 2000 through 2004, participants who have attained the age of 55
and have completed at least ten years of participation in the ESOP are
eligible to transfer up to 25% of the value of their ESOP account to
other funds in the Plan within the first quarter of the Plan year.
(8) SUBSEQUENT EVENTS
On June 6, 2000, Bestfoods signed a definitive merger agreement with
Unilever. The transaction is expected to be completed in the fourth
quarter of 2000. The effects of the merger of Bestfoods and Unilever on
the Plan are not known at this time.
Beginning January 1, 2000, the Plan will accept direct rollovers of
eligible rollover distributions from the Bestfoods Non-Contributory
Retirement Income Plan for Salaried Employees. Also, eligible
participants can elect to direct a rollover from the Plan to the
Bestfoods Non-Contributory Retirement Income Plan for Salaried
Employees for an immediate annuity.
10
<PAGE> 13
SIGNATURES
Bestfoods Savings/Retirement Plan for Salaried Employees. Pursuant to the
requirements of the Securities Exchange Act of 1934, the Pension and Welfare
Committee of the Plan has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Bestfoods
Savings/Retirement Plan for Salaried Employees
Date: June 28, 2000 By: Richard P. Bergeman
------------- --------------------
Richard P. Bergeman
Chairman, Pension and
Welfare Committee
11
<PAGE> 14
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Pension and Welfare Committee
Bestfoods Savings/Retirement Plan for Salaried Employees:
We consent to incorporation by reference in the Registration Statement on Form
S-8 (No. 2-48849) of our report dated June 8, 2000 relating to the statements
of net assets available for benefits of the Bestfoods Savings/Retirement Plan
for Salaried Employees as of December 31, 1999 and 1998 and the related
statements of changes in net assets available for benefits, and the related
schedule, which report appears in the December 31, 1999 Form 11-K of the
Bestfoods Savings/Retirement Plan for Salaried Employees.
KPMG LLP
June 28, 2000
<PAGE> 15
Schedule I
BESTFOODS
SAVINGS/RETIREMENT PLAN FOR
SALARIED EMPLOYEES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Party-In-
Interest No. of Shares Description Cost Fair Value
-------------- ---------------- ------------------------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
960,098 Employee Stock Ownership Plan $ 158,701,127 221,328,190
1,172,111 Fidelity Growth & Income Portfolio 38,842,804 55,276,742
560,590 Fidelity Spartan U.S. Equity Index Fund 18,661,281 29,201,108
695,793 Fidelity Contrafund 33,254,135 41,761,506
398,960 Fidelity Magellan Fund 39,183,193 54,509,972
206,458 Fidelity Overseas Fund 7,141,872 9,912,043
645,151 Fidelity Asset Manager 10,833,364 11,857,880
2,114,047 Bestfoods Stock Fund 26,671,173 51,202,218
377,538 Corn Products International Stock Fund 954,944 2,744,700
103,416,334 Variable Interest Fund 103,416,334 103,416,334
* Participants' Loan Account (9.5%) 12,821,150 12,821,150
</TABLE>
*See accompanying auditors' report
