<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, 1998_______________________________
[ ] 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 ____________
<PAGE> 2
ANNUAL REPORT ON FORM 11-K
ITEM (a)
LIST OF FINANCIAL STATEMENTS
EXHIBIT 23
December 31, 1998
GREAT LAKES SAVINGS PLAN
WEST LAFAYETTE, INDIANA
<PAGE> 3
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, With Fund Information-
December 31, 1998 and 1997
Statements of Changes in Net Assets Available for Benefits, With Fund
Information - Years Ended December 31, 1998 and 1997
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
Report of Independent Auditors
Plan Administrator
Great Lakes Savings Plan
We have audited the accompanying statements of net assets available for
benefits, with fund information, of Great Lakes Savings Plan (the Plan) as of
December 31, 1998 and 1997, 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, 1998 and 1997, 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 financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes as of December 31, 1998 and of reportable transactions for
the year then ended, are presented for the purpose of additional analysis and
are not a required part of the financial statements but are 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. These supplemental schedules are the responsibility of the Plan's
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.
April 30, 1999
<PAGE> 5
Great Lakes Savings Plan
Statements of Net Assets Available for Benefits, With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------
GREAT LAKES
CHEMICAL
CORPORATION OCTEL VANGUARD VMMR
COMMON COMMON RETIREMENT PRIME VANGUARD VANGUARD
STOCK STOCK SAVINGS TRUST PORTFOLIO WINDSOR EXPLORER
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value:
Common stock $ 14,635,580 $ 991,061 $ - $ - $ - $ -
Vanguard Fiduciary Trust
Company shares of registered
Investment companies - - - 6,639,838 23,726,151 4,924,123
Common/collective trust fund - - 20,584,800 - - -
Investments at estimated fair value:
Participant notes - - - - - -
-------------------------------------------------------------------------------------
14,635,580 991,061 20,584,800 6,639,838 23,726,151 4,924,123
Receivables:
Participant loans 34,813 - 20,532 7,966 37,407 6,827
Participant contributions 101,306 - 50,623 32,006 155,897 50,112
Employer contributions 110,856 - 9,807 6,038 27,304 7,808
-------------------------------------------------------------------------------------
Net assets available for benefits $ 14,882,555 $ 991,061 $ 20,665,762 $ 6,685,848 $ 23,946,759 $ 4,988,870
=====================================================================================
<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>
ASSETS
Investments at fair value:
Common stock $ - $ - $ - $ - $ - $ 15,626,641
Vanguard Fiduciary Trust
Company shares of registered
Investment companies - 28,843,039 5,453,353 766,566 759,706 71,112,776
Common/collective trust fund - - - - - 20,584,800
Investments at estimated fair value:
Participant notes 2,829,894 - - - - 2,829,894
-------------------------------------------------------------------------------------
2,829,894 28,843,039 5,453,353 766,566 759,706 110,154,111
Receivables:
Participant loans - 25,043 3,848 1,039 1,300 138,775
Participant contributions - 173,598 45,488 8,428 13,536 630,994
Employer contributions - 25,808 6,822 1,249 1,748 197,440
-------------------------------------------------------------------------------------
Net assets available for benefits $ 2,829,894 $ 29,067,488 $ 5,509,511 $ 777,282 $ 776,290 $ 111,121,320
=====================================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 6
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 OCTEL VANGUARD VMMR
COMMON COMMON RETIREMENT PRIME VANGUARD VANGUARD
STOCK STOCK SAVINGS TRUST PORTFOLIO WINDSOR EXPLORER
-------------------------------------------------------------------------------------
<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 - - - 3,876,786 25,588,292 4,448,292
Common/collective trust fund - - 19,641,519 - - -
Investments at estimated fair value:
Participant notes - - - - - -
-------------------------------------------------------------------------------------
15,072,613 - 19,641,519 3,876,786 25,588,292 4,448,292
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
=====================================================================================
<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>
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 58,289,566
Common/collective trust fund - - - - - 19,641,519
Investments at estimated fair value:
Participant notes 2,720,362 - - - - 2,720,362
-------------------------------------------------------------------------------------
2,720,362 20,178,090 3,548,285 215,021 434,800 95,724,060
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 $ 2,720,362 $ 20,297,580 $ 3,575,503 $ 216,740 $ 440,168 $ 96,397,022
=====================================================================================
</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, 1998
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------
GREAT LAKES
CHEMICAL
CORPORATION OCTEL VANGUARD VMMR
COMMON COMMON RETIREMENT PRIME VANGUARD VANGUARD
STOCK STOCK SAVINGS TRUST PORTFOLIO WINDSOR EXPLORER
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Participant contributions $ 1,450,496 $ - $ 713,633 $ 398,712 $ 2,298,357 $ 673,027
Employer contributions 1,215,565 - 166,049 188,538 400,755 126,160
Rollover contributions 58,947 - 51,910 209,001 331,883 202,538
Investment income:
Dividends 143,699 - - - 2,103,611 42,482
Interest - - 1,201,059 268,081 - -
Net appreciation (depreciation)
in fair value of investments 462,154 (828,173) - - (1,903,336) 145,010
Transfer from other plans 1,483 - 3,934 2,484 2,105 631
-------------------------------------------------------------------------------------
Total additions 3,332,344 (828,173) 2,136,585 1,066,816 3,233,375 1,189,848
Deductions from net assets attributed to:
Benefits paid to participants 714,726 38,573 1,621,339 366,234 1,360,915 308,628
Other transfers out 83,238 7,005 23,702 16,795 154,835 80,747
Administrative fees 1,140 - 2,380 38,627 1,680 700
-------------------------------------------------------------------------------------
Total deductions 799,104 45,578 1,647,421 421,656 1,517,430 390,075
Loan withdrawals (365,172) (4,615) (209,017) (118,011) (392,974) (81,818)
Loan repayments 357,818 - 220,506 73,554 414,514 98,055
Interfund transfers (net) (2,867,298) 1,869,427 450,138 2,167,246 (3,578,657) (329,041)
-------------------------------------------------------------------------------------
Net increase (decrease) (341,412) 991,061 950,791 2,767,949 (1,841,172) 486,969
Net assets available for benefits
at beginning of year 15,223,967 - 19,714,971 3,917,899 25,787,931 4,501,901
-------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $ 14,882,555 $ 991,061 $ 20,665,762 $ 6,685,848 $ 23,946,759 $ 4,988,870
=====================================================================================
<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 $ - $ 2,015,101 $ 505,750 $ 69,360 $ 139,169 $ 8,263,605
Employer contributions - 424,529 285,442 10,922 25,102 2,843,062
Rollover contributions - 564,055 255,415 80,545 99,386 1,853,680
Investment income:
Dividends - 427,460 494,111 - 14,856 3,226,219
Interest 217,501 - - 25,006 - 1,711,647
Net appreciation (depreciation)
in fair value of investments - 5,674,846 12,910 4,267 74,328 3,642,006
Transfer from other plans - 1,196 209 2 25 12,069
-------------------------------------------------------------------------------------
Total additions 217,501 9,107,187 1,553,837 190,102 352,866 21,552,288
Deductions from net assets attributed to:
Benefits paid to participants 213,554 1,078,197 510,927 59,392 40,967 6,313,452
Other transfers out - 67,925 33,833 - 1,131 469,211
Administrative fees - 320 480 - - 45,327
-------------------------------------------------------------------------------------
Total deductions 213,554 1,146,442 545,240 59,392 42,098 6,827,990
Loan withdrawals 1,566,599 (326,741) (55,153) (4,387) (8,711) -
Loan repayments (1,461,014) 237,009 41,350 4,497 13,711 -
Interfund transfers (net) - 898,895 939,214 429,722 20,354 -
-------------------------------------------------------------------------------------
Net increase (decrease) 109,532 8,769,908 1,934,008 560,542 336,122 14,724,298
Net assets available for benefits
at beginning of year 2,720,362 20,297,580 3,575,503 216,740 440,168 96,397,022
-------------------------------------------------------------------------------------
Net assets available for benefits
at end of year $ 2,829,894 $ 29,067,488 $ 5,509,511 $ 777,282 $ 776,290 $ 111,121,320
=====================================================================================
</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, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------
GREAT LAKES
CHEMICAL
CORPORATION OCTEL VANGUARD VMMR
COMMON COMMON RETIREMENT PRIME VANGUARD VANGUARD
STOCK STOCK SAVINGS TRUST PORTFOLIO WINDSOR EXPLORER
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Participant contributions $ 1,507,689 $ - $ 711,944 $ 392,639 $ 1,935,376 $ 506,544
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 1,507,285 - 2,129,185 831,519 6,837,034 1,162,673
Deductions from net assets attributed to:
Benefits paid to participants 872,581 - 1,982,012 484,302 1,124,181 221,022
Other transfers out - - - - - -
Administrative fees 1,401 - 2,741 1,941 1,399 800
-------------------------------------------------------------------------------------
Total deductions 873,982 - 1,984,753 486,243 1,125,580 221,822
Loan withdrawals (385,042) - (269,299) (150,279) (354,174) (72,248)
Loan repayments 394,762 - 204,904 90,698 367,064 87,136
Interfund transfers (net) (1,421,349) - (655,719) 116,059 739,687 (411,582)
-------------------------------------------------------------------------------------
Net increase (decrease) (778,326) - (575,682) 401,754 6,464,031 544,157
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 $ 15,223,967 $ - $ 19,714,971 $ 3,917,899 $ 25,787,931 $ 4,501,901
=====================================================================================
<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 $ - $ 1,151,775 $ 244,356 $ 7,432 $ 39,825 $ 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 4,215 17,836 5,571,540
Interest 222,413 - - - - 1,608,087
Net appreciation (depreciation)
in fair value of investments - 4,246,324 165,527 3,404 (36,697) 4,260,342
Transfer from other plans (4,100) 109 (269) - - (198)
-------------------------------------------------------------------------------------
Total additions 218,313 6,295,549 1,099,513 16,704 29,015 20,126,790
Deductions from net assets attributed to:
Benefits paid to participants 231,474 803,974 232,986 - - 5,952,532
Other transfers out 2,847 - - - - 2,847
Administrative fees - 260 300 - 40 8,882
-------------------------------------------------------------------------------------
Total deductions 234,321 804,234 233,286 - 40 5,964,261
Loan withdrawals 1,459,729 (195,437) (29,777) (1,252) (2,221) -
Loan repayments (1,355,278) 185,709 19,346 1,140 4,519 -
Interfund transfers (net) - 1,060,194 (36,333) 200,148 408,895 -
-------------------------------------------------------------------------------------
Net increase (decrease) 88,443 6,541,781 819,463 216,740 440,168 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 $ 2,720,362 $ 20,297,580 $ 3,575,503 $ 216,740 $ 440,168 $ 96,397,022
=====================================================================================
</TABLE>
See accompanying notes.
5
<PAGE> 9
Great Lakes Savings Plan
Notes to Financial Statements
December 31, 1998
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 (effective January 1, 1999, participants can deduct up to 20%).
The Company contributes an amount equal to 50% of the participants' basic
contribution, limited to the first 4% (2% in 1997) 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
certain Company goals be obtained.
INVESTMENT OPTIONS
Participants may designate that their contributions and the Company's
matching contributions be made to any of nine funds. Participants may not
designate the Octel Common Stock as an investment option.
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.
6
<PAGE> 10
Great Lakes Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
- 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.
Vanguard International Growth Portfolio Fund - This is a mutual fund
invested in common stocks of non-U.S. companies. 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.
7
<PAGE> 11
Great Lakes Savings Plan
Notes to Financial Statements (continued)
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 and
common/collective trust funds are carried at aggregate current value with the
difference between cost and current value reflected in the statements of
changes in net assets available for benefits 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 and
common/collective trust funds 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. Realized gains or losses on
investment securities sold are determined using the average historical cost
method.
8
<PAGE> 12
Great Lakes Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
Preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates that
affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
RECLASSIFICATION
Certain amounts in the 1997 financial statements have been reclassified to
conform with the 1998 presentation.
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 1998 and 1997, 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. Individual investments
that represent 5 percent or more of the Plan's net assets are separately
identified.
9
<PAGE> 13
Great Lakes Savings Plan
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
NET APPRECIATION
(DEPRECIATION)
IN FAIR VALUE DURING FAIR VALUE AT
YEAR END OF YEAR
----------------------------------------------
<S> <C> <C>
Year ended December 31, 1998:
Fair value as determined by quoted market prices:
Common stock:
Great Lakes Chemical Corporation $ 462,154 $ 14,635,580
Octel Corporation (828,173) 991,061
Shares of registered investment companies:
VMMR Prime Portfolio Fund - 6,639,838
Vanguard/Windsor Fund (1,903,336) 23,726,151
Vanguard Explorer Fund 145,010 4,924,123
Vanguard Index 500 Portfolio Fund 5,674,846 28,843,039
Vanguard/Wellesley Income Fund 12,910 5,453,353
Vanguard Bond Index Fund 4,627 766,566
Vanguard Int'l Growth Portfolio 74,328 759,706
Common/collective trust fund:
Vanguard Retirement Savings Trust - 20,584,800
----------------------------------------------
Investments at estimated fair value: 3,642,006 107,324,217
Participant loans - 2,829,894
----------------------------------------------
$ 3,642,006 $ 110,154,111
==============================================
<CAPTION>
NET APPRECIATION
(DEPRECIATION)
IN FAIR VALUE DURING FAIR VALUE AT
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 356,182 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 Bond Index Fund 3,403 215,021
Vanguard Int'l Growth Portfolio (36,697) 434,800
Common/collective trust fund:
Vanguard Retirement Savings Trust - 19,641,519
----------------------------------------------
Investments at estimated fair value: 4,260,342 93,003,698
Participant loans - 2,270,362
----------------------------------------------
$ 4,260,342 $ 95,724,060
==============================================
</TABLE>
10
<PAGE> 14
Great Lakes Savings Plan
Notes to Financial Statements (continued)
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.
5. RELATED PARTY TRANSACTIONS
During 1998 and 1997, the Plan received $143,699 and $218,282,
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 Plan has a received a determination letter from the Internal Revenue
Service dated September 12, 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. Certain provisions of the Plan have been amended, from time
to time. The Plan Administrator believes the Plan, as amended, is being
operated within the applicable requirements of the Code, and therefore,
believes that the Plan is qualified and the related trust is tax exempt.
7. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has determined that it will be necessary to take certain
steps in order to ensure that the Plan's information systems are prepared
to handle year 2000 dates. The Plan Sponsor is taking a two phase approach.
The first phase addresses internal systems that must be modified or
replaced to function properly. Both internal and external resources are
being utilized to replace or modify existing software applications, and
test the software and equipment for the year 2000 modifications. The Plan
Sponsor anticipates substantially completing this phase of the project by
June 1999. Costs associated with modifying software and equipment are not
estimated to be significant and will be paid by the Plan Sponsor.
11
<PAGE> 15
Great Lakes Savings Plan
Notes to Financial Statements (continued)
7. Year 2000 Issue (unaudited) (continued)
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as they
relate to the Plan's operations. All third party service providers have
indicated that they will be year 2000 compliant by early 1999. If
modification of data processing systems of either the Plan, the Plan
Sponsor, or its service providers are not completed timely, the year 2000
problem could have a material impact on the operations of the Plan. Plan
management has not developed a contingency plan, because they are confident
that all systems will be year 2000 ready.
12
<PAGE> 16
ERISA
Schedules
<PAGE> 17
Great Lakes Savings Plan
Notes to Financial Statements (continued)
Great Lakes Savings Plan
Line 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1998
EIN: 95-1765035
Plan # : 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>
Great Lakes Chemical Corporation* Common stock $ 14,721,363 $ 14,635,580
88,862 shares
Octel* Common stock 1,729,120 991,061
172,960 shares
Vanguard Retirement Savings Trust* 20,584,800 units 20,584,800 20,584,800
VMMR Prime Portfolio Fund* 6,639,838 units 6,639,838 6,639,838
Vanguard/Windsor Fund* 1,523,838 units 23,820,608 23,726,151
Vanguard Explorer Fund* 86,830 units 4,370,672 4,924,123
Vanguard Index 500 Portfolio Fund* 253,120 units 17,508,505 28,843,039
Vanguard/Wellesley Income Fund 246,535 units 5,282,341 5,453,353
Vanguard Bond Index Fund* 74,641 units 760,255 766,566
Vanguard Int'l Growth Portfolio 40,475 units 711,326 759,706
Participant Notes 573 outstanding notes 2,829,894 2,829,894
with varying principal
amounts, various
maturities generally
four years from inception
and interest rates ranging
from 5.9% to 11%
----------------------------------
$ 98,958,722 $110,154,111
==================================
</TABLE>
* Indicates party-in-interest to the Plan.
13
<PAGE> 18
Great Lakes Savings Plan
Line 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1998
EIN: 95-1765035
Plan#: 004
<TABLE>
<CAPTION>
(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)
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - A series of transactions in excess of 5% of plan assets:
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Great Lakes Chemical Corporation Common stock shares
Common Stock Fund $ 5,255,389 $ 5,255,389 -
$ 4,141,807 $ 4,074,019 4,141,807 $ 67,788
Vanguard Windsor Fund Mutual fund shares
6,816,269 6,816,269 -
6,775,248 6,434,683 6,775,248 340,565
Vanguard Index 500 Portfolio Fund Mutual fund shares
9,140,814 9,140,814 -
6,150,975 4,779,557 6,150,975 1,371,418
Vanguard Prime Money Market Mutual fund shares
5,285,097 5,285,097 -
2,522,606 2,522,606 2,522,606 -
</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
1998. 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: 6-24-99 Great Lakes Savings Plan
--------------------- --------------------------------
(Name of Plan)
/s/ STEVEN D. MEAD
-------------------------------
Steven D. Mead
Corporate Director
Global Compensation and Benefits
<PAGE> 1
[ERNST & YOUNG LLP LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
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 April 30, 1999 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, 1998.
Ernst & Young LLP
Indianapolis, Indiana
June 24, 1999
