<PAGE>
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
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO 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 1-3385
H. J. HEINZ COMPANY
SAVER PLAN
(Title of Plan)
H. J. Heinz Company
(Name of Issuer of securities held pursuant to the Plan)
600 Grant Street Pittsburgh, PA 15219
(Address of Plan and of principal executive office of Issuer)
<PAGE>
Financial Statements and Exhibits
The following Plan financial statements and supplemental schedule are attached
hereto:
1. Report of Independent Accountants dated June 16, 1998 of Coopers & Lybrand
L.L.P. for the Plan financial statements
2. Statements of Net Assets Available for Benefits as of December 31, 1997
and 1996
3. Statements of Changes in Net Assets Available for Benefits for the Years
Ended December 31, 1997 and 1996
4. Notes to Financial Statements
5. Supplemental Schedule of Assets Held for Investment Purposes as of
December 31, 1997
Exhibits required to be filed by Item 601 of Regulation S-K are listed below and
are filed as a part hereof. Documents not designated as being incorporated
herein by reference are filed herewith. The paragraph number corresponds to the
exhibit number designated in Item 601 of Regulation S-K.
23. The consent of Coopers and Lybrand L.L.P. dated June 25, 1998 is filed
herein.
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Benefits Administration Board has duly caused this Form 11-K Annual
Report to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Pittsburgh, Commonwealth of Pennsylvania.
H. J. HEINZ COMPANY SAVER PLAN
(Name of Plan)
EMPLOYEE BENEFITS ADMINISTRATION BOARD
By: /s/ Gary D. Matson
.......................................
Gary D. Matson, Chairman
June 25, 1998
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
H. J. HEINZ COMPANY EMPLOYEE
BENEFITS ADMINISTRATION BOARD:
We have audited the accompanying statements of net assets available for
benefits of the H. J. Heinz Company SAVER 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
Employee Benefits Administration Board of the H. J. Heinz Company. 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 H. J. Heinz
Company SAVER Plan as of December 31, 1997 and 1996 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 supplemental schedule of assets held
for investment purposes is presented for the purpose 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 Regulation for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. 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 the purpose 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 schedule and Fund Information have been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Pittsburgh, Pennsylvania
June 16, 1998
3
<PAGE>
<TABLE>
<CAPTION>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1997
H. J. Heinz Co. Managed Income Magellan Retirement Gov't Overseas Equity-Income
Stock Fund Portfolio Fund Money Market Fund Fund
--------------- -------------- -------- ---------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $22,274,374 $4,606 $5,018,306 $17,832,353 $567,570 $2,823,472
Investment - - - - - -
----------- ------ ---------- ----------- -------- ----------
Total investment 22,274,374 4,606 5,018,306 17,832,353 567,570 2,823,472
----------- ------ ---------- ----------- -------- ----------
Investment income receivable:
Dividends 134,891 - - - - -
Interest 1,496 26 3 81,011 - -
----------- ------ ---------- ----------- -------- ----------
Total investment income receivable 136,387 26 3 81,011 - -
----------- ------ ---------- ----------- -------- ----------
Contributions receivable:
Employee 108,212 24 54,414 211,804 8,414 29,197
Employer 201,961 - 16,155 160,543 2,365 8,845
----------- ------ ---------- ----------- -------- ----------
Total contributions receivable 310,173 24 70,569 372,347 10,779 38,042
----------- ------ ---------- ----------- -------- ----------
Participant Loan Receivable 65 - 149 167 4 4
----------- ------ ---------- ----------- -------- ----------
Total Assets 22,720,999 4,656 5,089,027 18,285,878 578,353 2,861,518
----------- ------ ---------- ----------- -------- ----------
Net Assets Available for Benefits $22,720,999 $4,656 $5,089,027 $18,285,878 $578,353 $2,861,518
=========== ====== ========== =========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Puritan Intermediate OTC
Fund Bond Fund Portfolio
---------- ------------ ---------
<S> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $2,484,402 $752,014 $33,260
Investment _ _ -
---------- -------- -------
Total Investment 2,484,402 752,014 33,260
---------- -------- -------
Investment income receivable:
Dividends - 4,018 -
Interest 1 - -
---------- -------- -------
Total investment income receivable 1 4,018 -
---------- -------- -------
Contributions receivable:
Employee 30,011 6,740 432
Employer 8,586 4,300 27
---------- -------- -------
Total contributions receivable 38,597 11,040 459
---------- -------- -------
Participant Loan Receivable 32 4 -
---------- -------- -------
Total Assets 2,523,032 767,076 33,719
---------- -------- -------
Net Assets Available for Benefits $2,523,032 $767,076 $33,719
========== ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1997 (continued)
Vanguard Vanguard Vanguard Vanguard Vanguard Vanguard
Fixed Income Wellington Windsor II Index Trust-500 U.S. Growth Explorer
Securities Fund Fund Fund Portfolio Portfolio Fund
--------------- ---------- ---------- --------------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $562 $90,363 $135,466 $199,112 $146,828 $22,451
Investment - - - - - -
---- ------- -------- -------- -------- -------
Total investment 562 90,363 135,466 199,112 146,828 22,451
---- ------- -------- -------- -------- -------
Investment income receivable:
Dividends 7 - - 2,337 5,934 2,476
Interest - - - - - -
---- ------- -------- -------- -------- -------
Total investment income receivable 7 - - 2,337 5,934 2,476
---- ------- -------- -------- -------- -------
Contributions receivable:
Employee 23 1,143 3,000 4,399 1,088 693
Employer - 125 649 738 176 266
---- ------- -------- -------- -------- -------
Total contributions receivable 23 1,268 3,649 5,137 1,264 959
---- ------- -------- -------- -------- -------
Participant Loan Receivable - - - 56 - -
---- ------- -------- -------- -------- -------
Total Assets 592 91,631 139,115 206,642 154,026 25,886
---- ------- -------- -------- -------- -------
Net Assets Available for Benefits $592 $91,631 $139,115 $206,642 $154,026 $25,886
==== ======= ======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
Vanguard
Int'l Growth Participants'
Portfolio Loans Total
------------ ------------- -----
<S> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $26,873 - $52,412,012
Investment _ $2,279 2,279
------- ------ -----------
Total Investment 26,873 2,279 52,414,291
------- ------ -----------
Investment income receivable:
Dividends 1,197 - 150,860
Interest - - 82,537
------- ------ -----------
Total investment income receivable 1,197 - 233,397
------- ------ -----------
Contributions receivable:
Employee 861 - 460,455
Employer 264 - 405,000
------- ------ -----------
Total contributions receivable 1,125 - 865,455
------- ------ -----------
Participant Loan Receivable - (481) -
------- ------ -----------
Total Assets 29,195 1,798 53,513,143
------- ------ -----------
Net Assets Available for Benefits $29,195 $1,798 $53,513,143
======= ====== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1996
H. J. Heinz Co. Magellan Retirement Gov't Overseas Equity-Income Puritan
Stock Fund Fund Money Market Fund Fund Fund
-------------- -------- ---------------- -------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $15,029,919 $4,360,424 $15,076,164 $613,278 $2,469,167 $2,223,079
Investment - - - - - -
---------- ----------- ----------- -------- ---------- ----------
Total investment 15,029,919 4,360,424 15,076,164 613,278 2,469,167 2,223,079
---------- ----------- ----------- -------- ---------- ----------
Investment income receivable:
Dividends 118,264 - - - - -
Interest 1,002 30 66,957 6 14 16
---------- ----------- ----------- -------- ---------- ----------
Total investment income receivable 119,266 30 66,957 6 14 16
---------- ----------- ----------- -------- ---------- ----------
Contributions receivable:
Employee 96,809 58,429 209,777 11,122 29,835 34,180
Employer 216,952 23,021 104,364 4,185 12,120 12,773
---------- ----------- ----------- -------- ---------- ----------
Total contributions receivable 313,761 81,450 314,141 15,307 41,955 46,953
---------- ----------- ----------- -------- ---------- ----------
Participant Loan Receivable 206 344 354 40 224 207
---------- ----------- ----------- -------- ---------- ----------
Total Assets 15,463,152 4,442,248 15,457,616 628,631 2,511,360 2,270,255
---------- ----------- ----------- -------- ---------- ----------
Net Assets Available for Benefits $15,463,152 $4,442,248 $15,457,616 $628,631 $2,511,360 $2,270,255
=========== =========== =========== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Intermediate Retirement Participants'
Bond Fund Growth Fund Loans Total
---------- ----------- ------------- -----
<S> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $1,008,534 $2,090,338 - $42,870,903
Investment _ - $18,895 18,895
---------- ---------- ------- -----------
Total Investment 1,008,534 2,090,338 18,895 42,889,798
---------- ---------- ------- -----------
Investment income receivable:
Dividends 5,215 - - 123,479
Interest 6 11 - 68,042
---------- ---------- ------- -----------
Total investment income receivable 5,221 11 - 191,521
---------- ---------- ------- -----------
Contributions receivable:
Employee 9,652 26,411 - 476,215
Employer 6,768 10,583 - 390,766
---------- ---------- ------- -----------
Total contributions receivable 16,420 36,994 - 866,981
---------- ---------- ------- -----------
Participant Loan Receivable 38 156 (1,569) -
---------- ---------- ------- -----------
Total Assets 1,030,213 2,127,499 17,326 43,948,300
---------- ---------- ------- -----------
Net Assets Available for Benefits $1,030,213 $2,127,499 $17,326 $43,948,300
========== ========== ======= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Managed
H. J. Heinz Co. Income Magellan Retirement Gov't. Overseas Equity-Income Puritan
Stock Fund Portfolio Fund Money Market Fund Fund Fund
--------------- --------- ---------- ---------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net change in Investment in
Master Trust (Note 8) $ 7,634,855 $4,632 $1,083,663 $ 1,548,582 $ 59,525 $1,020,811 $ 481,930
Additions:
Participant contributions 1,206,671 24 657,337 2,532,698 116,891 374,331 400,374
Employer contributions, net 2,472,326 -- 292,830 3,088,128 38,383 145,623 154,449
Transfer for Loan Repayments 2,368 -- 3,197 4,165 439 1,563 1,466
----------- ------ ---------- ----------- ---------- ---------- ----------
Total additions 3,681,365 24 953,364 5,624,991 155,713 521,517 556,289
----------- ------ ---------- ----------- ---------- ---------- ----------
Deductions:
Withdrawals 4,058,373 -- 1,390,248 4,345,311 265,516 1,192,170 785,442
----------- ------ ---------- ----------- ---------- ---------- ----------
Total deductions 4,058,373 -- 1,390,248 4,345,311 265,516 1,192,170 785,442
----------- ------ ---------- ----------- ---------- ---------- ----------
Net increase (decrease) in
net assets available for
benefits for the year 7,257,847 4,656 646,779 2,828,262 (50,278) 350,158 252,777
Net assets available for
benefits at the
beginning of the year 15,463,152 -- 4,442,248 15,457,616 628,631 2,511,360 2,270,255
----------- ------ ---------- ----------- ---------- ---------- ----------
Net assets available for
benefits at the end
of the year $22,720,999 $4,656 $5,089,027 $18,285,878 $ 578,353 $2,861,518 $2,523,032
=========== ====== ========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Intermediate OTC
Bond Fund Portfolio
------------ ---------
<S> <C> <C>
Net change in Investment in Master Trust
(Note 8) $ 13,241 $ 32,402
Additions:
Participant contributions 90,499 1,290
Employer contributions, net 79,117 27
Transfer for Loan Repayments 441 --
---------- --------
Total additions 170,057 1,317
---------- --------
Deductions:
Withdrawals 446,435 --
---------- --------
Total deductions 446,435 --
---------- --------
Net increase (decrease) in net assets
available for benefits for the year (263,137) 33,719
Net assets available for benefits at
the beginning of the year 1,030,213 --
---------- --------
Net assets available for benefits at
the end of the year $ 767,076 $ 33,719
========== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1997 (continued)
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard Vanguard Vanguard Vanguard
Fixed Income Wellington Windsor II Index Trust-500 U.S. Growth Explorer
Securities Fund Fund Fund Portfolio Portfolio Fund
--------------- ---------- ---------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net change in Investment in
Master Trust (Note 8) $569 $88,220 $130,487 $193,846 $151,069 $23,494
Additions:
Participant contributions 23 3,027 7,732 11,370 3,325 1,656
Employer contributions, net -- 384 1,674 2,144 396 736
Transfer for Loan Repayments -- -- -- 56 -- --
---- ------- -------- -------- -------- -------
Total additions 23 3,411 9,406 13,570 3,721 2,392
---- ------- -------- -------- -------- -------
Deductions:
Withdrawals -- -- 778 774 764 --
---- ------- -------- -------- -------- -------
Total deductions -- -- 778 774 764 --
---- ------- -------- -------- -------- -------
Net increase (decrease) in net assets
available for benefits for the year 592 91,631 139,115 206,642 154,026 25,886
Net assets available for benefits at
the beginning of the year -- -- -- -- -- --
---- ------- -------- -------- -------- -------
Net assets available for benefits at
the end of the year $592 $91,631 $139,115 $206,642 $154,026 $25,886
==== ======= ======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
Vanguard
Int'l Growth Retirement Participants'
Fund Growth Fund Loans Total
------------ ----------- ------------- -------------
<S> <C> <C> <C> <C>
Net change in Investment in Master Trust $25,930 $(1,599,040) -- $10,894,216
(Note 8)
Additions:
Participant contributions 2,565 205,574 -- 5,615,387
Employer contributions, net 700 75,049 -- 6,351,966
Transfer for Loan Repayments -- 1,000 $(14,695) --
------- ----------- -------- -----------
Total additions 3,265 281,623 (14,695) 11,967,353
------- ----------- -------- -----------
Deductions:
Withdrawals -- 810,082 833 13,296,726
------- ----------- -------- -----------
Total deductions -- 810,082 833 13,296,726
------- ----------- -------- -----------
Net increase (decrease) in net assets
available for benefits for the year 29,195 (2,127,499) (15,528) 9,564,843
Net assets available for benefits at
the beginning of the year -- 2,127,499 17,326 43,948,300
------- ----------- -------- -----------
Net assets available for benefits at
the end of the year $29,195 -- $ 1,798 $53,513,143
======= =========== ======== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1996
<TABLE>
<CAPTION>
H. J. Heinz Co. Magellan Retirement Gov't. Overseas Equity-Income Puritan
Stock Fund Fund Money Market Fund Fund Fund
------------- ---------- ------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net change in Investment in
Master Trust (Note 8) $1,494,155 $380,416 $85,661 $114,405 $623,774 $340,142
Additions:
Participant contributions 1,192,258 785,212 2,810,178 135,768 328,347 419,397
Employer contributions, net 2,733,423 381,355 2,712,680 56,250 168,090 191,159
Transfer for Loan Repayments 5,045 5,980 6,852 932 3,796 3,241
------------- ---------- ----------- -------- --------- --------
Total additions 3,930,726 1,172,547 5,529,710 192,950 500,233 613,797
------------- ---------- ----------- -------- --------- --------
Deductions:
Withdrawals 1,153,750 357,979 1,919,885 30,532 124,499 125,421
------------- ---------- ----------- -------- --------- --------
Total deductions 1,153,750 357,979 1,919,885 30,532 124,499 125,421
------------- ---------- ----------- -------- --------- --------
Net increase (decrease) in net assets
available for benefits for the year 4,271,131 1,194,984 3,695,486 276,823 999,508 828,518
Net assets available for benefits at
the beginning of the year 11,192,021 3,247,264 11,762,130 351,808 1,511,852 1,441,737
------------ ---------- ----------- -------- --------- ----------
Net assets available for benefits at
the end of the year $15,463,152 $4,442,248 $15,457,616 $628,631 $ 2,511,360 $2,270,255
============= ========== =========== ======== ============ ==========
</TABLE>
<TABLE>
<CAPTION>
Intermediate Retirement Participants'
Bond Fund Growth Fund Loans Total
--------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
Net change in Investment in Master Trust ($13,250) $170,031 - $3,195,334
(Note 8)
Additions:
Participant contributions 138,821 345,769 - 6,155,750
Employer contributions, net 107,637 153,934 - 6,504,528
Transfer for Loan Repayments 863 2,644 (29,353) -
----------- --------- --------- ------------
Total additions 247,321 502,347 (29,353) 12,660,278
----------- --------- --------- ------------
Deductions:
Withdrawals 81,570 176,877 4,073 3,974,586
----------- --------- --------- ------------
Total deductions 81,570 176,877 4,073 3,974,586
----------- --------- --------- ------------
Net increase (decrease) in net assets
available for benefits for the year 152,501 495,501 (33,426) 11,881,026
Net assets available for benefits at
the beginning of the year 877,712 1,631,998 50,752 32,067,274
----------- --------- --------- ------------
Net assets available for benefits at
the end of the year $1,030,213 $2,127,499 $17,326 $43,948,300
=========== ========== ========= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements
(1) Plan Description:
The following description of the H. J. Heinz Company ("Company") SAVER Plan
("Plan") provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions. The
Plan was amended effective January 1, 1993 to provide for the age-related
company contribution account, which is explained in detail below.
General
The Plan is a defined contribution plan covering eligible hourly employees
actively employed by the Company or any of the affiliated companies, and who
are in a division, or plant of a division, of the Company authorized to
participate in the Plan. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
The administration of the Plan and the responsibility for interpreting and
carrying out its provisions is vested in the Employee Benefits Administration
Board ("Committee"). The Committee consists of members appointed by the
Board of Directors upon the recommendation of the Investment Committee of the
Board of Directors. The members of the Committee are not compensated for
serving on the Committee.
The Board of Directors has designated Fidelity Management Trust Company
to act as trustee ("Trustee") under the Plan.
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 and liabilities and the amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
The plan provides for various investment options as described in Note 4. Any
investment is exposed to various risks, such as interest rate, market and
credit. These risks could result in a material effect on participants'
account balances and the amounts reported in the statement of net assets
available for benefits and the statement of changes in net assets available
for benefits.
Certain prior-year amounts have been reclassified in order to conform with
the current year presentation.
Contributions
Participant contributions to the Plan may be either tax deferred or after
tax. The participant's maximum tax deferred and after tax contributions may
not exceed 12% and 10%, respectively, of their earnings. The total of a
participant's tax deferred plus after tax contributions may not exceed 12% of
their earnings. A participant may make contributions, in whole percentages,
of not less than 1% of their earnings.
Tax deferred contributions made by certain highly compensated participants
may be limited under Internal Revenue Code rules. Tax deferred contributions
by any participant under the Plan and any other qualified cash or deferred
arrangement were limited to $9,500 in 1997 and 1996. A participant affected
by these limitations will be given timely notification by the Committee.
10
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
Contributions (continued)
At the discretion of the Board of Directors, the Company or any participating
affiliated company, may contribute, in the form of company stock, on a
monthly basis (or as otherwise indicated by the Committee), on behalf of each
participating employee an amount not less than 10 cents and not more than one
dollar for each tax deferred dollar contributed by a participant. The Company
reserves the right to limit the maximum amount of matching contributions that
may be contributed on behalf of any participant.
The determination of the amount of such contribution is made by the Board of
Directors of the Company after considering recommendations made by
appropriate officers of participating affiliated companies or divisions. The
amount of such contribution may be different for any specified group of
participants.
For the years ended December 31, 1997 and 1996, the matching contribution
amounts at various divisions or plants of divisions ranged from 12 cents to
$1.00 for each tax deferred dollar up to 6% of participants' earnings.
Additionally, the Company may, but is not required to, contribute for each
Plan year an additional supplemental amount determined by the Committee. The
supplemental contribution is allocated to the supplemental contribution
accounts of all eligible participants on a pro rata basis according to the
ratio of each participant's earnings for the plan year to the total earnings
of all participants for the plan year. Supplemental contributions are
reflected in the Plan financial statements in the year in which the Committee
approves them. The supplemental contributions were $910,005 for the year
ended December 31, 1997 and $947,992 for the year ended December 31, 1996.
A Company Contribution Account ("CCA") was added to the Plan effective
January 1, 1993. The Company will make monthly, age-related contributions to
the accounts of eligible employees who direct the investment of such
contributions into one or more of the investment funds stated in Note 4. The
age-related contributions are based on percentages of participants' eligible
earnings and range from a rate of 1% for participants that are less than 30
years old to a rate of 8.5% for participants that are 65 years old and over.
A participant may transfer amounts received from other retirement plans to
the Plan. Amounts that are rolled over from other retirement plans are held
in a separate rollover account.
Participant Accounts
Each participant's account is credited with the participant's contribution(s)
and allocation of (a) the Company's matching, supplemental, and age-related
contribution(s), as defined, and (b) Plan earnings. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting
The value of a participant's tax deferred account which is maintained for tax
deferred contributions; after tax account, which is maintained for after tax
contributions; and rollover account, which is maintained for rollover
contributions, is fully vested at all times.
A participant's matching account (which will be maintained for the Company's
matching contributions), will be fully vested upon the completion of three
years of service, attainment of age 65, disability or death. Participants
will be vested in the value of their CCA contributions and supplemental
contributions upon the occurrence of any of the following events: completion
of five years of service, attainment of age 65, disability or death.
11
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
Withdrawals
A participant may elect to withdraw from their after tax or rollover account
up to 100% of their account balance.
A participant's tax deferred contributions will be available for withdrawal
if:
(a) The participant is eligible for a "hardship" withdrawal in accordance
with the rules established by the Internal Revenue Service ("IRS"),
or
(b) The participant has attained age 59 1/2.
A participant may not make withdrawals from the Company matching,
supplemental, or CCA accounts during active employment.
A participant who qualifies for a hardship withdrawal is suspended from
making contributions to the Plan for one year. Under present IRS rules, a
"hardship" means an immediate and heavy need to draw on financial resources
to meet obligations related to health, education or housing.
A participant, upon termination of services, shall receive a lump sum equal
to the value of their vested account.
Loans
The granting of participant loans is prohibited by the Plan; however, the
Plan accepted the existing participant loans from merged plans. The interest
rates for all outstanding loans for the years ended December 31, 1997 ranged
from 6.45% to 9.4% and 1996 ranged from 6.1% to 10.0%.
Payment of principal and interest is by payroll deduction, subject to rules
permitting prepayment. Repayments of the loan principal will be allocated
first to the participant's after tax account, and then to the participant's
tax deferred account. Payments of loan interest are allocated to the
participant's after tax account and tax deferred account, respectively, in
the same proportion that the outstanding principal of the loan was
attributable to such accounts at the end of the month preceding the payment.
Payments of principal and interest are reinvested in the investment fund(s)
in accordance with the participant's investment directions in effect at the
time such interest or principal repayment is received by the Trustee.
Termination
In accordance with the procedures set forth in the Plan, the Company may
terminate the Plan at any time in whole or in part. To the extent permitted
under Section 401(k) of the Internal Revenue Code and the regulations
thereunder, in the event of the dissolution, merger, consolidation or
reorganization of the Company, the Plan will terminate and the Trust Fund
will be liquidated unless the Plan is continued by a successor to the Company
in accordance with the Plan. If the Plan is completely or partially
terminated, the accounts of all participants affected thereby will become
fully vested and nonforfeitable to the extent funded. Currently, the Company
has no intention of terminating the Plan.
Administration Expenses
All expenses of the Plan including record-keeping fees, administrative
charges, professional fees, and Trustee fees for the years ended December 31,
1997 and 1996 were paid by the Company. Effective May 1, 1998, the first
$150,000 of annual administration expenses will be paid by the Plan; amounts
in excess of $150,000 will continue to be paid by the Company.
12
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(2) Summary of Significant Accounting Policies:
Investment Valuation
The value of the shares in a mutual fund is based on the market value of the
underlying securities in the fund.
Investments in securities traded on a national exchange are valued at the
last reported sales price on the last business day of the year.
Temporary investments in short-term investment funds are valued at cost which
approximates market value.
Other
Purchases and sales of securities are reflected on a trade-date basis. Gains
or losses on sales of securities are based on average cost. Dividend income
is recorded on the ex-dividend date. Interest is recorded as earned.
(3) Federal Income Taxes:
The IRS has made a determination that the Plan is a qualified plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended ("Code").
Therefore, the Trust established under the Plan is exempt from Federal income
taxes under Section 501(a) of the Code.
The IRS has determined and informed the Company by letter dated February 3,
1998 that the Plan is designed in accordance with applicable sections of the
Code. The Plan has been amended since a favorable determination letter was
issued, however, tax and ERISA counsel to the Company is of the opinion that
the Plan continues to be a "qualified" plan under Section 401(a) of the Code,
and that the Plan contains a qualified cash or deferred arrangement within
the meaning of Section 401(k) of the Code.
Under present Federal income tax laws and regulations, and as long as the
Plan is approved as a qualified plan, participants are not subject to Federal
income taxes as a result of their participation in the Plan until their
accounts are withdrawn or distributed to them.
In order for the Company's Retirement and Savings Plan to comply with the
nondiscrimination coverage requirements under Code sections 410(b) and
401(a)(4) for the plan year ended December 31, 1996, an additional
contribution of $190,583 was made to the SAVER Plan on behalf of certain non-
highly compensated employees to satisfy the applicable Code requirements.
(4) Investment Programs:
Effective October 1, 1997, the funds offered by the Plan were changed to
increase investment choices and reduce the Plan's dependence on a single
mutual fund company. Nine new funds were added--seven Vanguard funds and two
Fidelity funds while Fidelity's Retirement Growth Fund was eliminated.
Participant fund balances in the Retirement Growth Fund were automatically
transferred to the Retirement Government Money Market Fund if participants
had not transferred them to other available funds as of September 29, 1997.
Fidelity Management Trust Company remains Trustee for all the investment
funds. Participants may direct the investment of their accounts in multiples
of 1%, in any one or more of the Investment funds selected by the Committee.
A description of the Investment funds by investment category follows:
Company Stock
The H.J. Heinz Company Stock Fund consists of common stock of the Company.
13
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(4) Investment Programs (continued):
Stable Value
Fidelity's Managed Income Portfolio invests in guaranteed investment
contracts offered by major insurance companies and other approved financial
institutions and in certain types of fixed income securities. A portion of
the fund is invested in a money market fund to provide daily liquidity.
Guaranteed investment contracts are recorded at contract value, which
includes principal and accumulated interest, which approximates market
value.
Growth
The Fidelity Magellan Fund is an aggressive growth fund, the assets of
which are invested primarily in common stocks of both well known and
lesser-known companies with above-average growth potential and a
correspondingly higher level of risk.
The Vanguard U.S. Growth Fund seeks to provide long-term capital
appreciation by investing in common stocks of large companies with above-
average growth potential.
Money Market
The assets of Fidelity's Retirement Government Money Market Portfolio
are invested in high-quality short-term money market securities for
which the U.S. Government or its agencies or instrumentalities guarantee
timely payment of principal and interest.
International
The Fidelity Overseas Fund is an aggressive growth fund, which seeks
long-term capital appreciation, primarily through investments in foreign
securities. The fund invests primarily in securities of issuers whose
principal business activities are outside the U.S.
Vanguard International Growth Portfolio seeks long-term capital growth
by investing in common stocks of companies based outside of the United
States that have above-average growth potential.
Index
Vanguard Index Trust--500 Portfolio seeks long-term growth of capital
and income from dividends. It holds all of the 500 stocks that make up
the Standard & Poor's 500 Composite Stock Price Index (S&P 500).
Growth and Income
The assets of the Fidelity Equity-Income Fund are invested primarily in
income-producing equity securities. Capital appreciation is a secondary
objective of the fund. It tries to achieve a yield of the securities of
the S&P 500.
Vanguard Windsor II is a value-oriented growth and income fund seeking
long-term growth of capital and income from dividends. The fund invests
in a diversified group of out-of-favor stocks of large-capitalization
companies.
14
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(4) Investment Programs (continued):
Small Capitalization
The Fidelity OTC Portfolio seeks long-term capital appreciation by
investing in the securities of smaller, less well-known companies.
Vanguard Explorer Fund seeks long-term growth of capital by investing
primarily in common stocks of small and emerging growth companies.
Balanced
The assets of the Fidelity Puritan Fund are invested in a broadly
diversified portfolio of high-yielding U.S. and foreign securities
including those in emerging markets, which may involve additional risk.
The investments can include all types of bonds of any quality or
maturity as well as common stocks and preferred stocks.
The Vanguard Wellington Fund is a balanced fund designed to pursue three
investment objectives: conservation of capital, reasonable current
income, and profits without undue risk. The funds assets are divided
between common stocks and bonds.
Fixed Income
The assets of the Fidelity Intermediate Bond Fund are invested in high-
quality, fixed-income obligations whose average maturity ranges between
3 and 10 years.
The Vanguard Fixed Income Securities Fund--Long-Term Corporate Portfolio
seeks to provide a high and sustainable level of current income
consistent with the maintenance of principal and liquidity by investing
in a diversified portfolio of long-term investment-grade bonds.
Discontinued Fund
The Fidelity Retirement Growth Fund was discontinued as of September 30,
1997. The fund was an aggressive growth fund which sought capital
appreciation by investing primarily in common stocks, but also in other
types of securities.
15
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(5) Net Asset Value per Unit:
The interests of Plan participants are accounted for under a unit method. The
number of units in each fund and the net asset value per unit are as follows:
<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
---------------------- ------------------------
Value per Value per
Units Unit Units Unit
---------- --------- --------- ----------
<S> <C> <C> <C> <C>
H. J. Heinz Co. Stock Fund...... 9,244,155 $2.418 9,089,729 $1.667
Managed Income Portfolio........ 4,584 $1.011 -- --
Magellan Fund................... 2,637,327 $1.903 2,905,698 $1.501
Retirement Gov't. Money Market.. 14,703,759 $1.218 13,096,505 $1.156
Overseas Fund................... 409,193 $1.387 490,860 $1.249
Equity-Income Fund.............. 1,356,570 $2.081 1,554,038 $1.599
Puritan Fund.................... 1,424,630 $1.744 1,561,299 $1.424
Intermediate Bond Fund.......... 613,737 $1.232 885,054 $1.146
OTC Portfolio................... 37,492 $ .891 -- --
Fixed Income Securities Fund.... 553 $1.022 -- --
Wellington Fund................. 90,233 $1.019 -- --
Windsor II Fund................. 133,621 $1.029 -- --
Index Trust--500 Portfolio...... 198,708 $1.014 -- --
U.S. Growth Portfolio........... 147,796 $1.035 -- --
Explorer Fund................... 26,806 $ .934 -- --
Int'l Growth Portfolio.......... 31,462 $ .893 -- --
Retirement Growth Fund.......... -- -- 1,551,634 $1.347
</TABLE>
(6) Forfeitures:
Company contributions which have been credited to participants' accounts and
which have not vested are forfeited upon termination of employment. These
forfeitures are credited against subsequent Company contributions.
Forfeitures were $285,143 for the year ended December 31, 1997 and $245,571
for the year ended December 31, 1996.
(7) Plan Amendments:
On December 1, 1997, the Board of Directors approved a proposal to amend the
Plan to increase the amount for a mandatory distribution of the account
balance after termination of employment from $3,500 to $5,000 as permitted
by the Taxpayer Relief Act of 1997, effective January 1, 1998.
On December 1, 1997, the Board of Directors approved a proposal to allow
former Heinz Pet Products employees at the Perham, Minnesota plant to
receive distributions from the Plan after the factory was sold, exclusive
of the pre-tax contributions which are restricted under Section 401(k) of
the Internal Revenue Code.
On December 4, 1996, the Board of Directors approved the transfer to the
Plan of the remaining assets of the Pestritto Foods, Inc. Profit Sharing
Plan, amounting to approximately $2,000, attributable to former employees
who could not be located when the plan was terminated in May 1994, and to
establish and implement a procedure for the Plan to follow when a
participant cannot be located within three years after his or her benefit
becomes payable.
16
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(8) Master Trust:
The Company entered into a Master Trust arrangement with the Trustee. The
Trustee maintains accounts to record the pro rata share of each participating
Plan; reflecting contributions received on behalf of the Plan, benefit
payments or other expense allocable to the Plan and its pro rata share of
collected or accrued income, gain or loss, general expenses and other
transactions allocable to the Investment Funds or the Trust as a whole.
The following tables present the Master Trust information for the Plan.
<TABLE>
<CAPTION>
December 31, 1997
---------------------------------------------------------------------------------------------
SAVER Plan
Fair Value of Net Percentage of
Investment of Investment Income Change in Interest in the
Master Trust Dividends Interest the Fair Value* Master Trust
--------------- -------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
H. J. Heinz Co. Stock Fund $240,109,663 $ 6,127,688 $ 134,223 $ 66,566,428 9.28%
Managed Income Portfolio 10,920,342 -- 675,017 5,035,813 .04%
Magellan Fund 59,990,834 3,907,759 -- 9,862,291 8.37%
Retirement Gov't Money Market 64,662,982 -- 2,660,526 23,114,145 27.58%
Overseas Fund 11,768,150 593,239 -- 806,687 4.82%
Equity-Income Fund 43,734,130 2,431,026 -- 12,131,682 6.46%
Puritan Fund 37,854,039 3,208,692 -- 5,043,476 6.56%
Intermediate Bond Fund 10,733,697 681,961 -- 791,500 7.01%
OTC Portfolio 4,299,844 179,867 -- 4,288,956 .77%
Fixed Income Securities Fund 1,969,693 35,948 -- 1,989,859 .03%
Wellington Fund 3,626,690 175,753 -- 3,616,206 2.49%
Windsor II Fund 7,351,383 491,210 -- 7,285,688 1.84%
Index Trust--500 Fund 11,538,760 131,514 -- 11,605,465 1.73%
U.S. Growth Portfolio 5,442,397 218,228 -- 5,584,369 2.70%
Explorer Fund 2,006,808 221,500 -- 2,199,727 1.12%
International Growth Fund 2,675,356 118,420 -- 2,747,717 1.00%
Asset Manager Growth Fund -- -- -- (5,306,609) --
Asset Manager Income Fund -- 16,732 -- (536,745) --
Asset Manager Fund -- 65,954 -- (2,857,090) --
Retirement Growth Fund -- -- -- (24,252,657) --
------------ ----------- ---------- ------------- -----
Total Master Trust $518,684,768 $18,605,491 $3,469,766 $129,716,908 10.10%
============ =========== ========== ============= =====
</TABLE>
*Includes transfers between funds.
17
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(8) Master Trust (continued):
<TABLE>
<CAPTION>
December 31, 1996
---------------------------------------------------------------------------------------
SAVER Plan
Percentage of
Net Interest
Fair Value of Change in in the
Investment of Investment Income the Fair Master
Master Trust Dividends Interest Value* Trust
--------------- -------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
H. J. Heinz Co.
Stock Fund $ 193,649,074 $ 6,085,903 $ 89,599 $ 9,295,951 7.76%
Managed Income Portfolio 9,946,832 - 515,136 1,654,650 -
Magellan Fund 49,482,858 7,744,772 - (2,245,807) 8.81%
Retirement Gov't
Money Market 40,146,651 - 1,801,220 2,473,341 37.55%
Overseas Fund 10,590,303 638,560 - 4,524,475 5.79%
Equity-Income
Fund 32,599,351 1,832,555 - 13,575,945 7.57%
Puritan Fund 33,264,907 3,616,507 - 5,858,634 6.68%
Intermediate
Bond Fund 10,357,653 635,912 - 856,242 9.74%
Asset Manager
Growth Fund 5,002,592 425,339 - 2,471,812 -
Asset Manager
Income Fund 489,017 30,560 - 139,998 -
Asset Manager
Fund 2,736,284 208,284 - 825,958 -
Retirement
Growth Fund 23,622,577 2,897,571 - 923,809 8.85%
--------------- -------------- ----------- ------------- --------
Total Master Trust $ 411,888,099 $ 24,115,963 $ 2,405,955 $ 40,355,008 10.41%
=============== ============== =========== ============= ========
</TABLE>
*Includes transfers between funds.
(9) Form 5500 Reconciliation:
In accordance with the American Institute of Certified Public Accountants
revised Audit and Accounting Guide "Audits of Employee Benefit Plans", the
Plan includes payments due to participants in net assets available for plan
benefits. Payments due to participants as of December 31, 1997 and 1996
were $813,510 and $354,762 respectively. This methodology differs from that
required under ERISA. Therefore, for the Form 5500, the Plan includes such
distributions payable as a liability of the Plan.
18
<PAGE>
H.J. HEINZ COMPANY
SAVER PLAN
EIN #25-0542520; PLAN 011
LINE 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 1997
<TABLE>
<CAPTION>
(c) Description of investment including
(b) Identity of issue, borrower, maturity date, rate of interest, (e) Market
(a) lessor, or similar party collateral, par or maturity value (d) Cost Value
- ------- ------------------------------- -------------------------------------- -------- ----------
<S> <C> <C> <C> <C>
* H.J. Heinz Company Participants' Loans - $2,279
Interest Rate 6.45%-9.4%
</TABLE>
19
<PAGE>
EXHIBIT INDEX
Exhibits required to be filed by Item 601 of Regulation S-K are listed below and
are filed as part hereof. Documents not designated as being incorporated
herein by reference are filed herewith. The paragraph number corresponds to the
exhibit number designated in Item 601 of Regulation S-K.
23. The consent of Coopers and Lybrand L.L.P. dated June 25, 1998 is filed
herein.
<PAGE>
Exhibit 23
ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
H. J. Heinz Company SAVER Plan on Form S-8 (File No. 33-32563) of our report
dated June 16, 1998 on our audits of the financial statements of the H. J. Heinz
Company SAVER Plan as of December 31, 1997 and 1996 and for the years then
ended, which report is included in this Annual Report on Form 11-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Pittsburgh, Pennsylvania
June 25, 1998
