<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT OF EMPLOYEE SAVINGS PLAN PURSUANT
TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
GREAT LAKES SAVINGS PLAN
(Exact name of registrant as specified in its charter)
DELAWARE 95-1765035
(State or other jurisdiction of (IRS-Employer
Incorporation of organization) Identification No.)
ONE GREAT LAKES BOULEVARD
P.O. BOX 2200
WEST LAFAYETTE, IN 47906
(Address of principal executive offices) (Zip Code)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
------------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to Commission file number
---- ---- --------
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ANNUAL REPORT ON FORM 11-K
ITEM (a)
LIST OF FINANCIAL STATEMENTS
EXHIBIT 23
December 31, 1997
GREAT LAKES SAVINGS PLAN
WEST LAFAYETTE, INDIANA
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Form 11-K--Item (a)
GREAT LAKES SAVINGS PLAN
FINANCIAL STATEMENTS
The following financial statements and schedules of the Plan are
submitted herewith:
Statements of Net Assets Available for Benefits--December 31, 1997
and 1996
Statements of Changes in Net Assets Available for Benefits-Years
Ended December 31, 1997 and 1996
Notes to Financial Statements
ERISA Schedules
Schedules--Schedules I, II and III for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission have been omitted for the reason that they are not required
or are not applicable, or the required information is shown in the
financial statements or notes thereto.
<PAGE> 4
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Report of Independent Auditors
Plan Administrator
Great Lakes Savings Plan
We have audited the accompanying statements of net assets available for
benefits of Great Lakes Savings Plan (the Plan) as of December 31, 1997 and
1996, 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 the Plan at
December 31, 1997 and 1996, and the changes in net assets available for
benefits, with fund information, 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
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1997, loans or fixed
income obligations as of December 31, 1997 and of reportable transactions for
the year then ended, are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required
part of the financial statements. These supplemental schedules are the
responsibility of the Plans' management. 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
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in our audits of the financial statements and, in our opinion, are
fairly stated in all material respects in relation to the financial statements
taken as a whole.
May 1, 1998
<PAGE> 5
Great Lakes Savings Plan
Statements of Net Assets Available for Benefits, With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------
GREAT LAKES
CHEMICAL
CORPORATION VANGUARD VMMR
COMMON RETIREMENT PRIME VANGUARD VANGUARD
STOCK SAVINGS TRUST PORTFOLIO WINDSOR EXPLORER LOAN FUND
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Common stock $15,072,613 $ - $ - $ - $ - $ -
Vanguard Fiduciary Trust
Company shares of registered
Investment companies - 19,641,519 3,876,786 25,588,292 4,448,292
Investments at estimated fair value:
Participant notes - - - - - 2,720,362
Receivables:
Participant loans 28,580 13,988 7,411 27,227 6,315 -
Participant contributions 106,480 52,347 29,230 151,430 41,211 -
Employer contributions 16,294 7,117 4,472 20,982 6,083 -
-------------------------------------------------------------------------------------
Net assets available for benefits $15,223,967 $19,714,971 $3,917,899 $25,787,931 $4,501,901 $2,720,362
=====================================================================================
<CAPTION>
FUND INFORMATION
-----------------------------------------------------
VANGUARD VANGUARD
INDEX 500 WELLESLEY VANGUARD INT'L GROWTH
PORTFOLIO INCOME BOND INDEX PORTFOLIO TOTAL
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Common stock $ - $ - $ - $ - $15,072,613
Vanguard Fiduciary Trust
Company shares of registered
Investment companies 20,178,090 3,548,285 215,021 434,800 77,931,085
Investments at estimated fair value:
Participant notes - - - - 2,720,362
Receivables:
Participant loans 12,864 1,771 75 318 98,549
Participant contributions 93,873 22,233 1,445 4,466 502,715
Employer contributions 12,753 3,214 199 584 71,698
-------------------------------------------------------------------
Net assets available for benefits $20,297,580 $3,575,503 $216,740 $ 440,168 $96,397,022
===================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 6
Great Lakes Savings Plan
Statements of Net Assets Available for Benefits, With Fund Information
December 31, 1996
<TABLE>
<CAPTION>
Fund Information
------------------------------------------------------------------------------------------
Great Lakes
Chemical
Corporation Vanguard VMMR
Common Retirement Prime Vanguard Vanguard
Stock Savings Trust Portfolio Windsor Explorer Loan Fund
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Common stock $15,818,897 $ - $ - $ - $ - $ -
Vanguard Fiduciary Trust
Company shares of registered
Investment companies - 20,208,967 3,473,254 19,155,691 3,905,047 -
Investments at estimated fair value:
Participant notes - - - - - 2,631,919
Receivables:
Participant loans 36,364 14,633 4,917 21,603 7,854 -
Participant contributions 127,410 58,592 32,949 127,811 39,085 -
Employer contributions 19,622 8,461 5,025 18,795 5,758 -
------------------------------------------------------------------------------------------
Net assets available for benefits $16,002,293 $20,290,653 $3,516,145 $ 19,323,900 $3,957,744 $2,631,919
==========================================================================================
<CAPTION>
Fund Information
-----------------------------------------------------
Vanguard Vanguard
Index 500 Wellesley Vanguard Int'l Growth
Portfolio Income Bond Index Portfolio Total
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Common stock $ - $ - $ - $ - $15,818,897
Vanguard Fiduciary Trust
Company shares of registered
Investment companies 13,651,947 2,727,798 - - 63,122,704
Investments at estimated fair value:
Participant notes - - - - 2,631,919
Receivables:
Participant loans 26,781 9,307 - - 121,459
Participant contributions 67,524 16,488 - - 469,859
Employer contributions 9,547 2,447 - - 69,655
------------------------------------------------------------------
Net assets available for benefits $13,755,799 $2,756,040 $ - $ - $82,234,493
==================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 7
Great Lakes Savings Plan
Statements of Changes in Net Assets Available for Benefits, With Fund
Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------
Great Lakes
Chemical
Corporation Vanguard VMMR
Common Retirement Prime Vanguard Vanguard
Stock Savings Trust Portfolio Windsor Explorer
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Participant contributions $ 1,902,451 $ 916,848 $ 483,337 $ 2,302,440 $ 593,680
Employer contributions 262,062 189,289 171,677 323,795 96,564
Rollover contributions 89,482 37,513 71,968 116,777 24,796
Investment income:
Dividends 218,282 - - 4,102,269 437,510
Interest - 1,190,439 195,235 - -
Net appreciation (depreciation)
in fair value of investments (570,527) - - 356,181 96,130
Transfer from other plans 297 - - 2,636 1,129
-----------------------------------------------------------------------
Total additions 1,902,047 2,334,089 922,217 7,204,098 1,249,809
Deductions from net assets attributed to:
Benefits paid to participants 872,582 1,982,013 484,303 1,124,180 221,022
Other transfers out - - - - -
Administrative fees 1,400 2,740 1,940 1,400 800
-----------------------------------------------------------------------
Total deductions 873,982 1,984,753 486,243 1,125,580 221,822
Interfund transfers (net) (1,421,349) (655,719) 116,059 739,687 (411,582)
-----------------------------------------------------------------------
Net increase (decrease) (393,284) (306,383) 552,033 6,818,205 616,405
Net assets available for benefits
at beginning of year 16,002,293 20,290,653 3,516,145 19,323,900 3,957,744
-----------------------------------------------------------------------
Net assets available for benefits
at end of year $15,609,009 $19,984,270 $4,068,178 $26,142,105 $4,574,149
=======================================================================
<CAPTION>
Fund Information
--------------------------------------------------------------------
Vanguard Vanguard
Index 500 Wellesley Vanguard Int'l Growth
Loan Fund Portfolio Income Bond Index Portfolio Total
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Participant contributions $(1,355,278) $ 1,337,484 $ 263,702 $ 8,572 $ 44,344 $ 6,497,580
Employer contributions - 266,367 272,378 1,653 6,258 1,590,043
Rollover contributions - 224,402 32,665 - 1,793 599,396
Investment income: -
Dividends - 406,572 384,856 4,216 17,836 5,571,541
Interest 222,413 - - - - 1,608,087
Net appreciation (depreciation) -
in fair value of investments - 4,246,324 165,527 3,403 (36,697) 4,260,341
Transfer from other plans (4,100) 109 (269) - - (198)
-----------------------------------------------------------------------------------
Total additions (1,136,965) 6,481,258 1,118,859 17,844 33,534 20,126,790
Deductions from net assets attributed to:
Benefits paid to participants 231,474 803,974 232,986 - - 5,952,534
Other transfers out 2,847 - - - - 2,847
Administrative fees - 260 300 - 40 8,880
-----------------------------------------------------------------------------------
Total deductions 234,321 804,234 233,286 - 40 5,964,261
Interfund transfers (net) - 1,060,194 (36,333) 200,148 408,895 -
-----------------------------------------------------------------------------------
Net increase (decrease) (1,371,286) 6,737,218 849,240 217,992 442,389 14,162,529
Net assets available for benefits
at beginning of year 2,631,919 13,755,799 2,756,040 - - 82,234,493
-----------------------------------------------------------------------------------
Net assets available for benefits
at end of year $ 1,260,633 $20,493,017 $3,605,280 $217,992 $ 442,389 $96,397,022
===================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 8
Great Lakes Savings Plan
Statements of Changes in Net Assets Available for Benefits, With Fund
Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
Fund Information
-------------------------------------------------------------------------------------
Great Lakes
Chemical
Corporation Vanguard VMMR
Common Retirement Prime Vanguard Vanguard
Stock Savings Trust Portfolio Windsor Explorer Loan Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Participant contributions $ 1,938,501 $ 844,857 $ 450,064 $ 1,741,344 $ 504,845 $ -
Employer contributions 299,547 218,777 74,463 265,750 77,844 -
Rollover contributions 33,488 38,062 16,335 75,317 69,929 -
Investment income:
Dividends 194,499 1,827,571 210,264
Interest 1,162,459 175,746 206,955
Net appreciation (depreciation)
in fair value of investments (8,289,001) - - 2,004,333 229,925 -
Transfer from other plans 1,422 1,347 2,324 2,920 666
-------------------------------------------------------------------------------------
Total additions (5,821,544) 2,265,502 718,932 5,917,235 1,093,473 206,955
Deductions from net assets attributed to:
Benefits paid to participants 1,139,634 1,212,510 193,363 701,369 297,413 115,130
Administrative fees 1,560 1,540 33,694 2,120 660 -
-------------------------------------------------------------------------------------
Total deductions 1,141,194 1,214,050 227,057 703,489 298,073 115,130
Interfund transfers (net) (1,737,479) (747,902) (69,114) 261,740 234,574 254,644
-------------------------------------------------------------------------------------
Net increase (decrease) (8,700,217) 303,550 422,761 5,475,486 1,029,974 346,469
Net assets available for benefits
at beginning of year 24,702,510 19,987,103 3,093,384 13,848,414 2,927,770 2,285,450
-------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $16,002,293 $20,290,653 $3,516,145 $19,323,900 $3,957,744 $2,631,919
=====================================================================================
<CAPTION>
Fund Information
-----------------------------------------------------
Vanguard Vanguard
Index 500 Wellesley Vanguard Int'l Growth
Portfolio Income Bond Index Portfolio Total
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Participant contributions $ 863,088 $ 242,682 $ - $ - $ 6,585,381
Employer contributions 201,209 324,391 - - 1,461,981
Rollover contributions 126,728 60,666 - - 420,525
Investment income:
Dividends 286,574 221,807 - - 2,740,715
Interest 1,545,160
Net appreciation (depreciation)
in fair value of investments 2,069,175 25,228 - - (3,960,340)
Transfer from other plans 1,327 (1,097) - - 8,909
------------------------------------------------------------------
Total additions 3,548,101 873,677 - - 8,802,331
Deductions from net assets attributed to:
Benefits paid to participants 624,070 233,611 - - 4,517,100
Administrative fees 400 260 - - 40,234
------------------------------------------------------------------
Total deductions 624,470 233,871 - - 4,557,334
Interfund transfers (net) 1,680,380 123,157 - - -
------------------------------------------------------------------
Net increase (decrease) 4,604,011 762,963 - - 4,244,997
Net assets available for benefits
at beginning of year 9,151,788 1,993,077 - - 77,989,496
------------------------------------------------------------------
Net assets available for benefits
at end of year $13,755,799 $2,756,040 $ - $ - $82,234,493
==================================================================
</TABLE>
See accompanying notes.
5
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Great Lakes Savings Plan
Notes to Financial Statements
December 31, 1997
1. DESCRIPTION OF THE PLAN
The following description of Great Lakes Savings Plan (the Plan) provides
only general information. More detailed information concerning the Plan may
be found by consulting the Summary Plan Description which is available from
the Plan Administrator.
The Plan is a defined contribution plan covering all full-time employees of
Great Lakes Chemical Corporation (the Company) upon date of hire. The Plan
is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
CONTRIBUTIONS
Voluntary employee contributions to the Plan are made through periodic
payroll deductions at the rate of 1% to 15% of the participants' eligible
earnings. The Company contributes an amount equal to 50% of the
participants' basic contribution, limited to the first 2% of the
participants' eligible earnings (effective January 1, 1998, this limitation
will increase from 2% to 4% of the participants' eligible earnings).
Additionally, the Company will contribute an amount equal to 50% of the next
2% of the participants' eligible earnings should the Company's after-tax
profits for the plan year exceed 120% of the average after-tax profits of
the two preceding years.
INVESTMENT OPTIONS
Participants may designate that their contributions and the Company's
matching contributions be made to any of nine funds.
Investment options, other than the option to invest in Great Lakes Chemical
Corporation Common Stock, that are available to participants are as follows:
Vanguard/Windsor Fund - This is a mutual fund invested primarily in common
stocks that provide the greatest potential for capital growth over long
periods of time and/or that have a history of paying dividends.
Vanguard Explorer Fund - This is a mutual fund invested primarily in common
stocks of small companies.
<PAGE> 10
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
December 31, 1997
1. DESCRIPTION OF THE PLAN (CONTINUED)
Vanguard/Wellesley Income Fund - This is a mutual fund invested primarily
in (1) stocks that provide a potential growth and dividend income and
(2) bonds for current income potential and conservation of principal.
VMMR Prime Portfolio Fund - This is a money market fund invested in
short-term securities such as certificates of deposit, banker's
acceptances, commercial paper and U.S. government securities.
Vanguard Index 500 Portfolio Fund - This is a mutual fund invested in all
stocks included in the Standard and Poor's 500 Index in approximately
the same proportion as they are presented in the Standard and Poor's
500 Index.
Vanguard Retirement Savings Trust - This is a pooled fund invested in
investment contracts issued by high quality insurance companies and
banks.
Vanguard Bond Index Fund - This is a mutual fund which maintains exposure
to the entire U.S. investment-grade bond market by paralleling the
performance of the Lehman Aggregate Bond Index. This fund became
available to participants in 1997.
Vanguard International Growth Portfolio Fund - This is a mutual fund
invested in common stocks of non-U.S. companies that became available
to participants in 1997. The portfolio invests in stocks of companies
from more than 15 countries.
PAYMENT OF BENEFITS
Participants who have attained the age of 59 1/2 may at any time make
withdrawals from the participant account. Such withdrawals must not exceed
the balance of the participant account.
A participant in the Plan may request a partial withdrawal of the amounts
held in the participant account (which reflects all vested contributions
to the Plan) at any time and will be paid the current value of the account
as a result of a financial hardship. However, the withdrawal must be
necessary to meet an immediate and heavy financial need of the participant
and must not exceed the value of the participant account or the amount
required to meet the need created by the financial hardship.
<PAGE> 11
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
December 31, 1997
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT NOTES RECEIVABLE
A participant may borrow against the vested balance in his account at a
minimum of $1,000 and a maximum up to 50% of the account balance, not to
exceed $50,000. A participant is allowed one loan at a time with the
interest rate being one percent above the prime lending rate on the first
day of the month in which the loan was made. Loans are repaid through
payroll deductions over no more than 4 years (15 years if the loan was
made for the purchase of a primary residence). The employers' matching
contributions are not available for participant loans.
VESTING
A participant who terminates employment is able to receive the full value
of his participant account. Participants with 6 or more years of service
following the Plan year for which the contribution was made are 100%
vested in the Company's matching contributions. Participants with less
than two years, at least two, three, four or five years of service
following the Plan year for which the contribution was made are zero, 20%,
40%, 60% or 80% vested, respectively. Upon complete withdrawal by a
participant, the nonvested portion of the employers' contribution will be
forfeited and applied to reduce the employer's future contributions or
administrative expenses.
2. SUMMARY OF ACCOUNTING POLICIES
INVESTMENTS VALUATION AND INCOME RECOGNITION
Common stock and shares in registered investment companies are carried at
aggregate current value with the difference between cost and current value
reflected in the statements of income and changes in participants' equity
as unrealized appreciation or depreciation of investments. Market value of
common stock is based upon the last sales price as reported by the New
York Stock Exchange on the last business day of the year. The shares in
registered investment companies are valued on the quoted market prices
which represent the net asset values of shares held by the Plan at year
end. The participant notes are valued at cost which approximates fair
value.
Dividends are recorded as income on the dividend receipt date. Purchases
and sales are recorded on a trade-date basis. Interest income is recorded
on the accrual basis. Realized gains or losses on investment securities
sold are determined using the average historical cost method.
<PAGE> 12
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
December 31, 1997
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
Preparation of the financial statements requires management to make
estimates that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. INVESTMENTS
The following summarized amounts and related information disclosed
elsewhere in total and by fund, including investment income were obtained
or derived from information supplied to the Plan Administrator and
certified as complete and accurate by Vanguard Fiduciary Trust Company,
the Trustee.
During 1997 and 1996, the Plan's investments in the various funds
(including investments purchased, sold, as well as held during the year)
appreciated (depreciated) in fair value as follows:
<TABLE>
<CAPTION>
NET APPRECIATION
(DEPRECIATION)
IN FAIR VALUE FAIR VALUE AT
DURING YEAR END OF YEAR
--------------------------------------
<S> <C> <C>
Year ended December 31, 1997:
Fair value as determined by quoted market prices:
Common stock:
Great Lakes Chemical Corporation $(570,527) $15,072,613
Shares of registered investment companies:
VMMR Prime Portfolio Fund - 3,876,786
Vanguard/Windsor Fund 356,181 25,588,292
Vanguard Explorer Fund 96,130 4,448,292
Vanguard Index 500 Portfolio Fund 4,246,324 20,178,090
Vanguard/Wellesley Income Fund 165,527 3,548,285
Vanguard Retirement Savings Trust - 19,641,519
Vanguard Bond Index Fund 3,403 215,021
Vanguard Int'l Growth Portfolio (36,697) 434,800
---------------------------------
4,260,341 93,003,698
Investments at estimated fair value:
Participant loans - 2,270,362
---------------------------------
$4,260,341 $95,724,060
=================================
</TABLE>
<PAGE> 13
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
December 31, 1997
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NET APPRECIATION
(DEPRECIATION)
IN FAIR VALUE FAIR VALUE AT
DURING YEAR END OF YEAR
-----------------------------------
<S> <C> <C>
Year ended December 31, 1996:
Fair value as determined by quoted market
prices:
Common stock:
Great Lakes Chemical Corporation $(8,289,001) $15,818,897
Shares of registered investment
companies:
VMMR Prime Portfolio Fund - 3,473,254
Vanguard/Windsor Fund 2,004,333 19,155,691
Vanguard Explorer Fund 229,925 3,905,047
Vanguard Index 500 Portfolio Fund 2,069,175 13,651,947
Vanguard/Wellesley Income Fund 25,228 2,727,798
Vanguard Retirement Savings Trust - 20,208,967
------------------------------
(3,960,340) 78,941,601
Investments at estimated fair value:
Participant loans - 2,631,919
------------------------------
$(3,960,340) $81,573,520
==============================
</TABLE>
Individual investments that represent 5 percent or more of the Plan's net
assets are separately identified:
<TABLE>
<CAPTION>
1997 1996
------------------------
<S> <C> <C>
Investments at fair value as determined by quoted market price:
Great Lakes Chemical Corporation Common Stock $15,072,613 $15,818,897
Vanguard/Windsor Fund 25,588,292 19,155,691
Vanguard Index 500 Portfolio Fund 20,178,090 13,651,947
Vanguard Retirement Savings Trust 19,641,519 20,208,967
</TABLE>
4. PLAN TERMINATION
Although it has not expressed the intent to do so, the Company has the
right to terminate the Plan. In the event the Plan is terminated, each
participant's account shall be nonforfeitable with respect to both the
participants' and the Company's contributions (vested and nonvested
portions), and the net assets are to be set aside for the payment of
withdrawals to the participants.
<PAGE> 14
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
December 31, 1997
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
During 1997 and 1996, the Plan received $218,282 and $194,499,
respectively, in common stock dividends from the Company. Fees paid for
legal, accounting and other services rendered by parties-in-interest were
paid by the Company.
6. INCOME TAX STATUS
The Internal Revenue Service ruled on September 12, 1995 that the Plan
qualifies under Section 401(a) of the Internal Revenue Code (IRC) and,
therefore, the related trust is not subject to tax under present income
tax law. Once qualified, the Plan is required to operate in conformity
with the IRC to maintain its qualification. Effective January 1, 1996,
certain provisions of the Plan were amended, including eligibility
requirements and calculation and allocation of profit sharing amounts.
The Plan Administrator is not aware of any course of actions or series of
events that have occurred that might adversely affect the Plan's qualified
status.
YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has developed a plan to be ready for the year 2000. The
project includes determining whether third party service providers have
reasonable plans in place to become year 2000 compliant. The Plan Sponsor
currently expects the project to be substantially complete by early 1999.
The Plan Sponsor does not expect this project to have a significant effect
on plan operations.
<PAGE> 15
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Great Lakes Savings Plan
Line 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1997
EIN: 95-1765035
Plan Number: 004
<TABLE>
<CAPTION>
(B) (C) (D) (E)
DESCRIPTION OF
INVESTMENT, INCLUDING
IDENTITY OF ISSUE, MATURITY DATE, RATE OF
BORROWER, LESSOR INTEREST, PAR OR CURRENT
OR SIMILAR PARTY MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common stock
Great Lakes Chemical Corporation * 81,708 shares $ 15,562,467 $ 15,072,613
Vanguard Retirement Savings Trust* 19,641,519 units 19,641,519 19,641,519
VMMR Prime Portfolio Fund* 3,876,786 units 3,876,786 3,876,786
Vanguard/Windsor Fund * 1,506,997 units 23,420,528 25,588,292
Vanguard Explorer Fund * 80,439 units 3,001,924 4,448,292
Vanguard Index 500 Portfolio Fund * 224,027 units 13,115,892 20,178,090
Vanguard/Wellesley Income Fund 162,319 units 3,335,712 3,548,285
Vanguard Bond Index Fund * 21,310 units 211,638 215,021
Vanquard Int'l Growth Portfolio * 26,528 units 466,218 434,800
Participant Notes 573 outstanding notes
with varying principal
amounts, various
maturities generally four
years from inception
and interest rates
ranging from 5.9%
to 11% 2,720,362 2,720,362
----------------------------
$ 85,353,046 $ 95,724,060
============================
</TABLE>
* Indicates party-in-interest to the Plan.
<PAGE> 16
ERISA
Schedules
<PAGE> 17
Great Lakes Savings Plan
Line 27(b) - Schedule of Loans or Fixed Income Obligations
Year ended December 31, 1997
<TABLE>
<CAPTION>
EIN: 95-1765035
Plan #: 004
(b) (c) (d) (e) (f) (g)
PRINCIPAL INTEREST
ORIGINAL RECEIVED RECEIVED UNPAID
IDENTITY OF PARTY AMOUNT OF DURING THE DURING THE BALANCE AT
INVOLVED THE LOAN YEAR YEAR END OF YEAR Description of Loan
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2) Lyons, Gerald $ 10,490 $ 2,483 $ 689 $ 6,053 Loan granted October 27, 1995 to
be paid over 4 years in monthly
installments with an interest rate
of 9.75%
2) Price, Rachael 1,300 836 55 464 Loan granted February 14, 1997 to
be paid over 1 year in monthly
installments with an interest rate
of 9.25%
1) Stewart, Wilfred 5,900 117 43 5,782 Loan granted August 29, 1997 to
be paid over 4 years in monthly
installments with an interest rate
of 9.5%
<CAPTION>
(h) (i)
Amount Overdue
-----------------------
Principal Interest
- --------------------------------------
<C> <C>
2) $ 1,210 $ 134
2) 307 7
1) 299 145
</TABLE>
1)Defaulted in 1997
2)Payments reactivated in 1997
13
<PAGE> 18
Great Lakes Savings Plan
Line 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
EIN: 95-1765035
Plan #: 004
(a) (b) (c) (d) (g) (h) (i)
CURRENT
VALUE OF
ASSET ON
PURCHASE TRANSACTION Net Gain
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE SELLING PRICE COST OF ASSET DATE (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - A series of transactions
in excess of 5% of plan assets:
Great Lakes Chemical Corporation Common stock shares 3,628,762 3,628,762 3,628,762 (100,133)
Common Stock Fund 3,804,816 3,904,949 3,804,816
Vanguard Windsor Fund Mutual fund shares 9,713,709 9,713,709 9,713,709 586,538
3,639,926 3,053,388 3,639,926
Vanguard Index 500 Portfolio Fund Mutual fund shares 5,078,454 5,078,454 5,078,454 682,269
2,798,743 2,116,474 2,798,743
Vanguard Investment Contract Trust Investment contracts 4,535,223 4,535,223 4,535,223 -
5,102,671 5,102,671 5,102,671
</TABLE>
Category:
(i) Single transactions in excess of 5% of plan assets
(ii) Series of transactions other than securities transactions
(iii) Series of securities transactions
(iv) Transactions with or in conjunction with a person if any single
transaction with that person was in excess of 5%
Columns (e) and (f) not used as they are not applicable.
Notes: There were no category (i), (ii) or (iv) reportable transactions during
1997. Information concerning "Lease Rental" and expenses Incurred with
Transactions have not been presented as they are not applicable.
14
<PAGE> 19
GREAT LAKES SAVINGS PLAN
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administration Committee of this employee benefit plan have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date: 6-25-98 Great Lakes Savings Plan
------------- ------------------------------------------
(Name of Plan)
/s/ Steven D. Mead
------------------------------------------
Steven D. Mead
Corporate Compensation & Benefits Manager
<PAGE> 1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS EXHIBIT 23
Great Lakes Savings Plan
We consent to the incorporation by reference in Registration Statement (Form
S-8 No. 33-02075) pertaining to the Savings Plan of Great Lakes Chemical
Corporation of our report dated May 1, 1998 with respect to the financial
statements of the Great Lakes Savings Plan included in this Annual Report (Form
11-K) for the year ended December 31, 1997.
/s/ Ernst & Young
- ---------------------
ERNST & YOUNG LLP
Indianapolis, Indiana
June 24, 1998
