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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, 1999
-----------------------------
[ ] 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
Great Lakes Savings Plan
West Lafayette, Indiana
December 31, 1999
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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, 1999 and 1998
Statements of Changes in Net Assets Available for Benefits - Years Ended
December 31, 1999 and 1998
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.
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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 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our 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, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
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, 1999 and 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 supplemental schedules 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.
/s/ Ernst & Young LLP
April 30, 2000
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Great Lakes Savings Plan
Statements of Net Assets Available for Benefits
December 31
1999 1998
------------ ------------
Assets
Investments, at fair value $106,538,474 $110,154,111
Receivables:
Participant loans 142,472 138,775
Participant contributions 636,100 630,994
Employer contributions 291,949 197,440
------------ ------------
Net assets available for benefits $107,608,995 $111,121,320
============ ============
See accompanying notes.
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Great Lakes Savings Plan
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
------------- -------------
<S> <C> <C>
Additions to net assets attributed to:
Participant contributions $ 8,311,701 $ 8,263,605
Employer contributions 4,152,687 2,843,062
Rollover contributions 1,833,283 1,853,680
Investment income:
Dividends 4,743,405 3,226,219
Interest 1,719,484 1,711,647
Net appreciation in fair value of investments 4,349,313 3,642,006
Transfer from (to) other plans (2,452) 12,069
------------- -------------
Total additions 25,107,421 21,552,288
Deductions from net assets attributed to:
Benefits paid to participants 10,228,839 6,313,452
Other transfers out 18,331,344 469,211
Administrative fees 59,563 45,327
------------- -------------
Total deductions 28,619,746 6,827,990
Net increase (decrease) (3,512,325) 14,724,298
Net assets available for benefits
at beginning of year 111,121,320 96,397,022
------------- -------------
Net assets available for benefits
at end of year $ 107,608,995 $ 111,121,320
============= =============
</TABLE>
See accompanying notes.
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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. Eligible employees of Great Lakes
Chemical Corporation (the Company) may participate in the Plan the first of
the quarter following their date of employment. 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 20% of the participants' eligible
earnings (prior to January 1, 1999, participants could contribute up to
15%). The Company contributes an amount equal to 50% of the participants'
basic contribution, limited to the first 6% (4% in 1998) of the
participants' eligible earnings. Beginning in 1999, the Company match was
made in Great Lakes Common Stock.
INVESTMENT OPTIONS
Participants may designate that their contributions be made to any of nine
funds.
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.
1
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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 employer's contribution will be forfeited and
applied to reduce the employer's future contributions or administrative
expenses. Amounts forfeited during 1999 were $339,000.
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
2
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
recorded on a trade-date basis. Realized gains or losses on
investment securities sold are determined using the average historical cost
method.
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 1998 financial statements have been reclassified to
conform to 1999 presentation.
3. INVESTMENTS
The following summarized amounts and related information, 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 1999 and 1998, the Plan's investments (including investments
purchased, sold, as well as held during the year) appreciated (depreciated)
in fair value as follows.
NET APPRECIATION (DEPRECIATION)
IN FAIR VALUE DURING YEAR
1999 1998
--------------------------
Common stock $ (627,828) $ (366,019)
Shares of registered investment companies 4,977,141 4,008,025
--------------------------
$ 4,349,313 $ 3,642,006
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Individual investments that represent 5 percent or more of the Plan's net
assets are presented in the following table.
1999 1998
--------------------------
Common stock:
Great Lakes Chemical Corporation * $16,460,381 $14,635,580
Shares of registered investment companies:
Vanguard/Windsor Fund 22,639,919 23,726,151
Vanguard Index 500 Portfolio Fund 28,095,362 28,843,039
Vanguard Explorer Fund 5,547,458 4,924,123
VMMR Prime Portfolio Fund 6,642,832 6,639,838
Common/collective trust fund:
Vanguard Retirement Savings Trust 17,655,035 20,584,800
* Nonparticipant-directed
4. 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:
DECEMBER 31
1999 1998
-------------------------
Net assets:
Great Lakes Chemical Corporation
Common Stock $16,460,381 $14,635,580
=========== ===========
YEAR ENDED
DECEMBER 31, 1999
-----------------
Changes in net assets:
Contributions $ 5,129,369
Interest and dividends 135,274
Net realized and unrealized depreciation
in fair value (420,349)
Transfers to participant directed funds (1,098,395)
Transfer to other plans (359)
Distributions to participants (1,920,739)
-----------
$ 1,824,801
===========
A portion of the Great Lakes Chemical Corporation Common Stock Fund is
participant directed as participants may elect to invest their employee
contributions in the Company's Common Stock.
4
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Great Lakes Savings Plan
Notes to Financial Statements (continued)
5. 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
participant's 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.
6. RELATED PARTY TRANSACTIONS
During 1999 and 1998, the Plan received $135,274 and $143,699,
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.
7. INCOME TAX STATUS
The Plan has 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 in compliance with the applicable requirements of the Code, and
therefore, believes that the Plan is qualified and the related trust is tax
exempt.
5
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ERISA
Schedules
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Great Lakes Savings Plan
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
at End of Year
December 31, 1999
EIN: 95-1765035
Plan # : 004
<TABLE>
<CAPTION>
(b) (c) (d) (e)
DESCRIPTION OF
INVESTMENT,
INCLUDING MATURITY
IDENTITY OF ISSUE, 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 104,723 shares $17,269,611 $16,460,381
* Octel 132,606 shares 1,315,839 568,880
Registered investment companies:
* VMMR Prime Portfolio Fund 6,642,832 units 6,642,832 6,642,832
* Vanguard/Windsor Fund 1,492,414 units 23,446,433 22,639,919
* Vanguard Explorer Fund 80,843 units 4,284,449 5,547,458
*Vanguard Index 500 Portfolio Fund 207,606 units 17,576,486 28,095,362
*Vanguard/Wellesley Income Fund 221,764 units 4,673,156 4,180,248
*Vanguard Bond Index Fund 80,831 units 811,340 772,745
*Vanguard Int'l Growth Portfolio 54,280 units 1,049,404 1,220,763
Common collective trust fund:
* Vanguard Retirement Savings Trust 17,655,035 units 17,655,035 17,655,035
Participant notes Interest rates ranging
from 5.9% to 11% - 2,754,851
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$94,724,585 $106,538,474
=========== ============
* Indicates party-in-interest to the Plan.
</TABLE>
6
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Great Lakes Savings Plan
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 1999
EIN: 95-1765035
Plan #: 004
<TABLE>
<CAPTION>
(A) (B) (C) (D) (G) (H) (I)
Current Value
Identity of Party Involved Description Purchase Selling Cost of of Asset on
of Asset Price Price Asset Transaction Date Net Gain(Loss)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <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
Common Stock Fund Purchases $ 8,207,22 $ - $ 8,207,223 $ 8,207,223 $ -
Sales - 5,962,577 5,658,614 5,962,577 303,963
</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 in excess of 5% of plan assets
(iv) Transactions with or in conjunction with a person if any single
transaction with that person was in excess of 5%
Notes: There were no category (i), (ii) or (iv) reportable transactions during
1999. Information concerning "Lease Rental" and Expenses Incurred with
Transactions have not been presented as they are not applicable.
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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: June 26, 2000 Great Lakes Savings Plan
------------------- ----------------------------
(Name of Plan)
/s/ Steven D. Mead
----------------------------
Steven D. Mead
Corporate Director
Global Compensation and Benefits
1
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INDEX TO EXHIBITS
Ex. 23 - Consent of Ernst & Young LLP,
Independent Auditors
2
