<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 PLAN
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 PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<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>
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INDEPENDENT AUDITORS' REPORT
The Pension and Welfare Committee
Bestfoods Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of Bestfoods Savings Plan 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 Plan 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 subject 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
1
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BESTFOODS SAVINGS PLAN
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 Magellan Fund $ 3,525,713 2,284,489
Fidelity Contrafund 2,274,597 1,533,635
Fidelity Growth & Income Portfolio 1,876,332 1,445,591
Fidelity Overseas Fund 459,391 260,308
Fidelity Asset Manager 1,280,800 1,114,771
Fidelity Managed Income Portfolio 5,383,191 5,601,087
Fidelity Spartan U.S. Equity Index Fund 3,391,778 2,628,762
Bestfoods Stock Fund 368,080 300,766
Corn Products International Stock Fund 6,274 10,645
Participant loans receivable 692,848 628,406
----------- ----------
Total assets 19,259,004 15,808,460
----------- ----------
Net assets available for benefits $19,259,004 15,808,460
=========== ==========
</TABLE>
The accompany notes are an integral part of these financial statements
2
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BESTFOODS SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 1,177,388 1,650,911
Dividends 1,183,071 871,925
------------ -----------
2,360,459 2,522,836
------------ -----------
Contributions:
Employer 633,443 453,077
Participants 1,634,398 1,402,149
------------ -----------
2,267,841 1,855,226
------------ -----------
Total additions 4,628,300 4,378,062
------------ -----------
Deductions from net assets attributed to:
Benefits paid to participants (2,108,785) (4,557,773)
Administrative fees (Note 1) (4,639) --
------------ -----------
Total deductions (2,113,424) (4,557,773)
------------ -----------
Net increase (decrease) prior to transfers 2,514,876 (179,711)
Transfer in from other plans (Note 1) 935,668 4,726,550
------------ -----------
Net increase 3,450,544 4,546,839
Net assets available for benefits:
Beginning of year 15,808,460 11,261,621
------------ -----------
End of year $ 19,259,004 15,808,460
============ ===========
</TABLE>
The accompany notes are an integral part of these financial statements.
3
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BESTFOODS
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
(1) DESCRIPTION OF THE PLAN
The following is a brief description of the Bestfoods Savings Plan (the
"Plan"). Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
GENERAL
The Plan, established on October 2, 1995, is a profit sharing plan
covering the following eligible employees of certain wholly-owned
subsidiaries of Bestfoods (the "Company"):
1. Charles Freihofer Baking Company, Inc. and Entenmann's Inc.
hourly non-union employees. Participants are former employees
of the baking division of Kraft Foods, which was acquired on
October 2, 1995.
2. Arnold Foods Company, Inc. hourly union employees, located at
the Oconomowoc, Wisconsin plant; effective October 1, 1997.
3. Bouyea-Fassetts division of Charles Freihofer Baking Company,
Inc. hourly non-union employees; effective January 1, 1998.
4. Iberia Foods Corp. salaried and hourly non-union employees;
effective April 1, 1998.
5. Henri's Foods Products Co., Inc. hourly employees; effective
October 1, 1998.
6. Best Foods Argo, Illinois hourly employees; effective July 1,
1999.
7. Charles Freihofer Baking Company, Inc. union employees located
at the Albany, New York plant; effective October 1, 1999.
Best Foods hourly employees at the Argo, Illinois plant had their
balances from the Bestfoods Savings/Retirement Plan for Hourly
Employees (Best Foods OCAW/IAM) transferred into the Plan in 1999.
As of December 31, 1999, $935,668 was transferred into the Plan.
Employees of Bouyea-Fassetts and Henri's Food Products Co., Inc. had
their balances from prior plans transferred into the Plan in 1998. As
of December 31, 1998, $4,726,550 was transferred into the Plan.
(Continued)
4
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BESTFOODS
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1), CONTINUED
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").
Effective January 1, 1998, the plan changed its name from the CPC
Baking Business Savings Plan to the Bestfoods Savings Plan.
The Plan is administered by a pension committee. Generally, record
keeping and administrative fees are paid by the Company.
CONTRIBUTIONS AND VESTING
Generally, participants who have completed 1,000 hours of service
during the first 12 months of employment 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.
Participants 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) per year for 1999
and 1998 is $10,000. 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.
Generally, the first 6% of an employee's salary which is contributed to
the Plan is eligible for Company matching contributions. The amount of
Company matching contributions varies and is at the discretion of the
Company. The Company matching per dollar employee contributions is as
follows:
(Continued)
5
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BESTFOODS
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1), CONTINUED
1. Charles Freihofer Baking Company, Inc., Entenmann's Inc.,
Bouyea-Fassetts, and participants Company match for 1999 and
1998 was $0.57 up to 6% of an employee's salary;
2. Arnold Foods Company, Inc., Oconomowoc, Wisconsin plant
participants are not eligible for Company matching
contributions;
3. Iberia Foods Corp. participants Company match for 1999 and
1998 was $0.25 and $0.10, respectively, up to 6% of an
employee's salary;
4. Henri's Foods Products Co., Inc. participants Company match
for 1999 and 1998 was $1.00 and $0.57, respectively, up to 6%
of an employee's salary;
5. Best Foods Argo, Illinois participants Company match for 1999
was $0.25 up to 4% of an employee's salary contributed to the
Plan;
6. Charles Freihofer Baking Company, Inc. Albany, New York plant
participants are not eligible for Company matching
contributions.
Participants are vested in the Company's matching contributions after
three years of service.
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.
A participant may withdraw the full value of his shares not based on
deferred contributions. Shares based on deferred contributions may be
withdrawn due to hardship.
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000
and a maximum of $50,000 reduced by the highest outstanding balance of
Plan loans during the one-year period ending on the Valuation Date or
the outstanding balance of prior Plan loans or 50% of their vested
account balance. Loan transactions are treated as a transfer between
the investment funds and the loan fund.
Effective August 1, 1999, participants who are employees at the
Oconomowoc, Wisconsin plant are eligible for loans from the Plan.
(Continued)
6
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BESTFOODS
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1), CONTINUED
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.
PLAN 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 fund
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. Participant notes
receivable are valued at cost, which approximates fair value.
(Continued)
7
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BESTFOODS
SAVINGS PLAN
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
Employees that terminate employment and are not vested in the Plan will
forfeit the non-vested portion of employer contributions. Forfeitures
are retained in the Plan and are used to reduce future employer
contributions. At December 31, 1999, and 1998 forfeited nonvested
accounts totaled $4,235 and $6,683, respectively.
(3) INVESTMENT PROGRAM
The Plan provides for nine separate investment funds, each with a
primary investment plan as described by the fund manager (except for
amounts temporarily held pending investment and amounts held for
disbursement), as follows:
(a) 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.
(b) Fidelity Spartan U.S. Equity Index - seeks to achieve a total
return comparable to the total return of the S&P 500 Index by
investing in the common stocks that make up the S&P 500 Index.
(c) Fidelity Contrafund - seeks long-term capital appreciation by
investing primarily in common stock and securities convertible
into common stock.
(d) Fidelity Managed Income Portfolio - seeks to provide
preservation of capital and a competitive level of income over
time through the purchase of contracts issued by insurance
carriers and banks.
(Continued)
8
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BESTFOODS
SAVINGS PLAN
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) Corn Products International Stock Fund - invested solely in
Corn Products International common stock. 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.
Effective January 1, 1999, Arnold Foods Company, Inc. Oconomowoc,
Wisconsin plant participants became eligible to invest all funds except
Corn Products International Stock Fund. Prior to January 1, 1999,
participants were only eligible to invest in five of the funds.
(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 Magellan Fund $3,525,713 2,284,489
Fidelity Contrafund 2,274,597 1,533,635
Fidelity Growth & Income Portfolio 1,876,332 1,445,591
Fidelity Asset Manager 1,280,800 1,114,771
Fidelity Managed Income Portfolio 5,383,191 5,601,087
Fidelity Spartan U.S. Equity Index Fund 3,391,778 2,628,762
</TABLE>
9
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BESTFOODS
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(5) INCOME TAX STATUS
The Plan is approved as qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended, and is exempt from Federal income
taxes under Section 501(a) of such Code pursuant to a determination
letter received on March 25, 1997 from the Internal Revenue Service.
Since receiving the favorable tax determination letter, the Plan has
been amended. The Company's management believes that the Plan and its
underlying trust have operated within the terms of the Plan and remain
qualified under the applicable provisions of the Internal Revenue Code.
(6) 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.
Hourly union employees represented by the Bakery, Confectionery,
Tobacco Workers and Grain International Union AFL-CIO Local 58 at the
Entenmann's Inc. Frederick, Maryland plant will be eligible to
participate in the Plan effective July 1, 2000.
In an effort by the Company to consolidate its benefits plans,
participant balances of employees at the Chicago, Illinois plant from
the Bestfoods Hourly Savings/Retirement Plan (Chicago, IL; Franklin
Park, IL) will be transferred into the Plan in 2000. Participants will
begin to contribute into the Plan April 1, 2000.
Hourly union employees represented by the International Union of
Electronic, Electrical, Salaried Machine and Furniture Workers Local
302FW at the Bestfoods Specialty Markets Indianapolis, Indiana plant
will be eligible to participate in the Plan effective January 1, 2000.
10
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SIGNATURES
Bestfoods Savings Plan. 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 Plan
Date: June 28, 2000 By: Richard P. Bergeman
------------- ---------------------------------------
Richard P. Bergeman
Chairman, Pension and Welfare Committee
11
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Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Pension and Welfare Committee
Bestfoods Savings Plan:
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 Plan 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 Plan.
KPMG LLP
June 28, 2000
12
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Schedule I
BESTFOODS SAVINGS PLAN
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>
25,805 Fidelity Magellan Fund $ 2,668,856 3,525,713
37,897 Fidelity Contrafund 1,915,832 2,274,597
39,787 Fidelity Growth & Income Portfolio 1,567,558 1,876,332
9,569 Fidelity Overseas Fund 351,247 459,391
69,684 Fidelity Asset Manager 1,233,655 1,280,800
5,383,191 Fidelity Managed Income Portfolio 5,383,191 5,383,191
65,114 Fidelity Spartan U.S. Equity Index Fund 2,325,263 3,391,778
15,197 Bestfoods Stock Fund 342,243 368,080
863 Corn Products International Stock Fund 4,839 6,274
* Participants' Loan Account (9.5%) 692,848 692,848
</TABLE>
See accompanying auditors' report
13
