<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, 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 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 are attached hereto:
1. Report of Independent Accountants dated May 28, 1999 of
PricewaterhouseCoopers LLP for the Plan financial statements
2. Statements of Net Assets Available for Benefits as of December 31, 1998
and 1997
3. Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1998
4. Notes to Financial Statements
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 PricewaterhouseCoopers LLP dated June 28, 1999 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 28, 1999
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
H. J. HEINZ COMPANY EMPLOYEE
BENEFITS ADMINISTRATION BOARD:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the H. J. Heinz Company SAVER Plan (the "Plan") at December 31, 1998 and
1997, and the change in net assets available for benefits for the year ended
December 31, 1998 in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Employee Benefits
Administration Board; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the statements of
net assets available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and changes in net
assets available for benefits of each fund. The fund information is the
responsibility of the Employee Benefits Administration Board. The fund
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
May 28, 1999
3
<PAGE>
<TABLE>
<CAPTION>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1998
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) $24,687,758 $16,070 $6,597,919 $19,102,580 $525,681 $2,940,667
Investment income receivable:
Dividends 147,012 - - - - -
Interest 1,356 74 - 90,578 - -
----------- ------ ---------- ----------- -------- ----------
Total investment income receivable 148,368 74 - 90,578 - -
----------- ------ ---------- ----------- -------- ----------
Contributions receivable:
Employee 98,407 729 51,725 245,982 5,295 25,546
Employer 177,107 1 11,084 66,651 1,840 5,371
----------- ------ ---------- ----------- -------- ----------
Total contributions receivable 275,514 730 62,809 312,633 7,135 30,917
----------- ------ ---------- ----------- -------- ----------
Total Assets 25,111,640 16,874 6,660,728 19,505,791 532,816 2,971,584
----------- ------ ---------- ----------- -------- ----------
Net Assets Available for Benefits $25,111,640 $16,874 $6,660,728 $19,505,791 $532,816 $2,971,584
=========== ======= ========== =========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Puritan Intermediate OTC
Fund Bond Fund Portfolio
---------- ------------ ---------
<S> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $2,730,399 $727,710 $127,937
Investment income receivable:
Dividends - 3,673 -
Interest - - -
---------- -------- ---------
Total investment income receivable - 3,673 -
---------- -------- ---------
Contributions receivable:
Employee 23,811 6,088 2,716
Employer 5,493 3,345 99
---------- -------- --------
Total contributions receivable 29,304 9,433 2,815
---------- -------- --------
Total Assets 2,759,703 740,816 130,752
---------- -------- --------
Net Assets Available for Benefits $2,759,703 $740,816 $130,752
========== ======== ========
</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, 1998 (continued)
Vanguard Vanguard Vanguard Vanguard Vanguard Vanguard
Long-Term Wellington Windsor II Institutional U.S. Growth Explorer
Corporate Fund Fund Fund Index Fund Fund Fund
--------------- ---------- ---------- ------------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $92,986 $159,606 $509,086 $879,734 $973,636 $81,430
Investment income receivable:
Dividends 1,751 - - 9,220 - 661
Interest - - 417 417 - -
------- -------- -------- -------- -------- -------
Total investment income receivable 1,751 - 417 9,637 - 661
------- -------- -------- -------- -------- -------
Contributions receivable:
Employee 1,127 4,641 11,792 16,941 10,340 1,333
Employer 96 307 794 1,128 1,210 255
------- -------- -------- -------- -------- -------
Total contributions receivable 1,223 4,948 12,586 18,069 11,550 1,588
------- -------- -------- -------- -------- -------
Total Assets 95,960 164,554 522,089 907,440 985,186 83,679
------- -------- -------- -------- -------- -------
Net Assets Available for Benefits $95,960 $164,554 $522,089 $907,440 $985,186 $83,679
======= ======== ======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
Vanguard
Int'l Growth
Fund Total
------------ -----
<S> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $57,707 $60,210,906
Investment income receivable:
Dividends - 162,317
Interest - 92,842
------- -----------
Total investment income receivable - 255,159
------- -----------
Contributions receivable:
Employee 1,249 507,722
Employer 146 274,927
------- -----------
Total contributions receivable 1,395 782,649
------- -----------
Total Assets 59,102 61,248,714
------- -----------
Net Assets Available for Benefits $59,102 $61,248,714
======= ===========
</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, 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.
6
<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
Long-Term Wellington Windsor II Index Trust-500 U.S. Growth Explorer
Corporate Fund Fund Fund Portfolio Fund 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'
Fund 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.
7
<PAGE>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1998
<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) $ 2,899,202 $11,092 $1,619,777 ($311,577) ($24,834) $ 215,874 $ 270,133
Additions:
Participant contributions 1,097,705 4,812 555,682 2,527,447 67,150 298,341 268,562
Employer contributions, net 2,079,266 (239) 212,843 2,552,251 23,366 101,454 97,451
Transfer for Loan Repayments 130 -- 301 162 9 9 66
----------- ------- ---------- ----------- ---------- ---------- ----------
Total additions 3,177,101 4,573 768,826 5,079,860 90,525 399,804 366,079
----------- ------- ---------- ----------- ---------- ---------- ----------
Deductions:
Withdrawals 3,612,154 3,406 803,836 3,505,205 109,912 499,134 393,625
Administrative expenses 73,508 41 13,066 43,165 1,316 6,478 5,916
----------- ------- ---------- ----------- ---------- ---------- ----------
Total deductions 3,685,662 3,447 816,902 3,548,370 111,228 505,612 399,541
----------- ------- ---------- ----------- ---------- ---------- ----------
Net increase (decrease) in
net assets available for
benefits for the year 2,390,641 12,218 1,571,701 1,219,913 (45,537) 110,066 236,671
Net assets available for
benefits at the
beginning of the year 22,720,999 4,656 5,089,027 18,285,878 578,353 2,861,518 2,523,032
----------- ------- ---------- ----------- ---------- ---------- ----------
Net assets available for
benefits at the end
of the year $25,111,640 $16,874 $6,660,728 $19,505,791 $ 532,816 $2,971,584 $2,759,703
=========== ======= ========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Intermediate OTC
Bond Fund Portfolio
------------ ---------
<S> <C> <C>
Net change in Investment in Master Trust
(Note 8) ($27,788) $ 78,251
Additions:
Participant contributions 64,820 21,220
Employer contributions, net 53,514 2,895
Transfer for Loan Repayments 9 --
---------- --------
Total additions 118,343 24,115
---------- --------
Deductions:
Withdrawals 115,083 5,089
Administrative expenses 1,732 244
---------- --------
Total deductions 116,815 5,333
---------- --------
Net increase (decrease) in net assets
available for benefits for the year (26,260) 97,033
Net assets available for benefits at
the beginning of the year 767,076 33,719
---------- --------
Net assets available for benefits at
the end of the year $ 740,816 $130,752
========== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
H. J. HEINZ COMPANY
SAVER PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1998 (continued)
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard Vanguard Vanguard Vanguard
Long-Term Wellington Windsor II Institutional U.S. Growth Explorer
Corporate Fund Fund Fund Index Fund Fund Fund
--------------- ---------- ---------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net change in Investment in
Master Trust (Note 8) $89,592 $ 47,735 $303,588 $626,391 $772,752 $43,432
Additions:
Participant contributions 5,996 34,276 100,184 126,372 63,523 12,731
Employer contributions, net 1,253 3,796 12,822 17,739 13,198 2,890
Transfer for Loan Repayments -- -- -- 114 -- --
------- -------- -------- -------- -------- -------
Total additions 7,249 38,072 113,006 144,225 76,721 15,621
-------- -------- -------- -------- -------- -------
Deductions:
Withdrawals 1,371 12,533 32,595 68,331 16,923 1,198
Administrative expenses 102 351 1,025 1,487 1,390 62
-------- -------- -------- -------- -------- -------
Total deductions 1,473 12,884 33,620 69,818 18,313 1,260
-------- -------- -------- -------- -------- -------
Net increase (decrease) in net assets
available for benefits for the year 95,368 72,923 382,974 700,798 831,160 57,793
Net assets available for benefits at
the beginning of the year 592 91,631 139,115 206,642 154,026 25,886
-------- -------- -------- -------- -------- -------
Net assets available for benefits at
the end of the year $ 95,960 $164,554 $522,089 $907,440 $985,186 $83,679
======== ======== ======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
Vanguard
Int'l Growth Participants'
Fund Loans Total
------------ ------------- -------------
<S> <C> <C> <C>
Net change in Investment in Master Trust $16,617 -- $ 6,630,237
(Note 8)
Additions:
Participant contributions 11,300 -- 5,260,121
Employer contributions, net 2,913 -- 5,177,412
Transfer for Loan Repayments -- ($800) --
------- -------- -----------
Total additions 14,213 (800) 10,437,533
------- -------- -----------
Deductions:
Withdrawals 806 998 9,182,199
Administrative expenses 117 -- 150,000
------- -------- -----------
Total deductions 923 998 9,332,199
------- -------- -----------
Net increase (decrease) in net assets
available for benefits for the year 29,907 (1,798) 7,735,571
Net assets available for benefits at
the beginning of the year 29,195 1,798 53,513,143
------- -------- -----------
Net assets available for benefits at
the end of the year $59,102 $ -- $61,248,714
======= ======== ===========
</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 of the Company ("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.
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 $10,000 in 1998 and $9,500 in 1997. A participant
affected by these limitations will be given timely notification by the
Committee.
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.
10
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
Contributions (continued)
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 year ended December 31, 1998, the matching contribution amounts at
various divisions or plants of divisions ranged from 15 cents per each tax
deferred dollar up to 6% of participants' earnings to $1.00 match for each
tax deferred dollar up to 3% of participants' earnings. For the year ended
December 31, 1997, these ranges were 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 $1,164,337 for the year
ended December 31, 1998 and $910,005 for the year ended December 31, 1997.
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. A terminated participant may also elect
to choose a direct transfer of their account balance to the trustee or
custodian of another eligible retirement plan.
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, 1998 was 8%
and ranged from 6.45% to 9.4% for the year ended December 31, 1997. As of
December 31, 1998, all loans have been repaid.
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 prior to 1998 were paid by the
Company. Effective May 1, 1998, the first $150,000 of annual administration
expenses is paid from Plan assets; amounts in excess of $150,000 are 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
The Plan presents in the statement of changes in net assets available for
benefits the appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments. Such change as it relates
to those investments held in the Master Trust is included as a component of
the Net Change in Investment in Master Trust on the Statement of Changes in
Net Assets.
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.
(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.
13
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(4) Investment Programs (continued):
Effective October 16, 1998, the Vanguard Institutional Index Fund replaced
the Vanguard Index Trust 500 Portfolio. Participant fund balances in the
Vanguard Index Trust 500 Portfolio were automatically transferred to the
Vanguard Institutional Index Fund on October 16, 1998 unless participants
had previously transferred them.
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.
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 Fund 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 Institutional Index Fund seeks long-term growth of capital
and income from dividends. It holds all 500 stocks that comprise
the Standard & Poor's 500 Composite Stock Price Index (S&P 500) in
proportion to their weighting in the index.
14
<PAGE>
H. J. HEINZ COMPANY SAVER PLAN
Notes to Financial Statements (Continued)
(4) Investment Programs (continued):
Growth and Income
The assets of the Fidelity Equity-Income Fund are invested primarily in
income-producing equity securities. The fund has a value philosophy and
currently compares its performance with the Russell 3000 Value Index
instead 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.
Small Capitalization
The Fidelity OTC Portfolio seeks long-term capital growth by investing
mainly in equity securities traded in the over-the-counter market.
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 invests in dividend-paying large- and mid-
capitalization stocks of well-established companies whose prospects are
improving, but whose values have yet to be recognized in the marketplace.
The funds assets are divided between common stocks and bonds.
Fixed Income
The Fidelity Intermediate Bond Fund's goal is to produce high current
income by investing mainly in investment-grade debt securities while
normally maintaining an average maturity of three to ten years.
The Vanguard Long-Term Corporate Portfolio (previously called Fixed Income
Securities Fund--Long-Term 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
Vanguard Index Trust--500 Portfolio seeks long-term growth of capital and
income from dividends. It holds all of the 500 stocks that comprise the S&P
500.
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, 1998 December 31, 1997
------------------------ ----------------------
Value per Value per
Units Unit Units Unit
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
H. J. Heinz Co. Stock Fund...... 9,003,121 $2.759 9,244,155 $2.418
Managed Income Portfolio........ 15,119 $1.068 4,584 $1.011
Magellan Fund................... 2,601,185 $2.537 2,637,327 $1.903
Retirement Gov't. Money Market.. 14,997,237 $1.280 14,703,759 $1.218
Overseas Fund................... 336,646 $1.562 409,193 $1.387
Equity-Income Fund.............. 1,258,624 $2.336 1,356,570 $2.081
Puritan Fund.................... 1,346,005 $2.029 1,424,630 $1.744
Intermediate Bond Fund.......... 554,337 $1.320 613,737 $1.232
OTC Portfolio................... 102,480 $1.248 37,492 $0.891
Fixed Income Securities Fund.... 84,257 $1.110 553 $1.022
Wellington Fund................. 140,166 $1.139 90,233 $1.019
Windsor II Fund................. 426,377 $1.195 133,621 $1.029
Institutional Index Fund........ 683,289 $1.302 198,708 $1.014
U.S. Growth Fund................ 673,706 $1.445 147,796 $1.035
Explorer Fund................... 85,075 $0.965 26,806 $0.934
Int'l Growth Fund............... 55,188 $1.046 31,462 $0.893
</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 $332,098 for the year ended December 31, 1998 and $285,143
for the year ended December 31, 1997.
(7) Plan Amendments:
On July 7, 1998, the Board of Directors approved a resolution to adopt
various technical changes required by the Small Business Job Protection Act
and the Uniform Services Employment and Reemployment Act; to relax
restrictions on Plan withdrawals for disabled participants, and to eliminate
the three month participation penalty for employees who suspend
contributions to the plan.
On December 1, 1997, the Board of Directors approved an amendment to the
Plan to increase the amount for a mandatory distribution of the account
balance after termination of employment as permitted by the Taxpayer Relief
Act of 1997 from $3,500 to $5,000. Effective January 1, 1998, former
employees with account balances less than or equal to $5,000 will receive
an automatic distribution of their entire balance.
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.
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, 1998
---------------------------------------------------------------------------------------------
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 $243,550,114 $ 5,748,050 $ 142,184 $ 30,515,181 10.14%
Managed Income Portfolio 10,188,417 -- 585,028 69,659 0.16%
Magellan Fund 74,787,480 3,480,127 -- 15,088,972 8.82%
Retirement Gov't Money Market 66,201,315 -- 3,237,455 108,018 28.86%
Overseas Fund 10,900,983 213,572 -- (1,001,787) 4.82%
Equity-Income Fund 39,458,176 2,356,677 -- (4,675,129) 7.45%
Puritan Fund 37,233,159 3,948,275 -- (608,195) 7.33%
Intermediate Bond Fund 11,571,033 666,547 -- 1,029,627 6.29%
OTC Portfolio 8,641,610 439,143 -- 3,819,180 1.48%
Fixed Income Securities Fund 4,095,936 219,240 -- 2,474,730 2.27%
Wellington Fund 5,856,424 650,778 -- 2,196,555 2.73%
Windsor II Fund 16,451,405 1,628,023 -- 8,063,854 3.09%
Institutional Index Fund 26,126,207 446,475 -- 13,867,270 3.37%
U.S. Growth Fund 19,360,320 1,185,642 -- 12,857,047 5.03%
Explorer Fund 2,322,657 20,460 -- (163,406) 3.51%
International Growth Fund 3,834,633 75,240 -- 650,976 1.50%
------------ ----------- ---------- ------------- -----
Total Master Trust $580,579,869 $21,078,249 $3,964,667 $84,292,552 10.37%
============ =========== ========== ============= =====
</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, 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%
Long-Term Corporate 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 Fund 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.
(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, 1998 and 1997
were $531,503 and $813,510 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>
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 PricewaterhouseCoopers LLP dated June 28, 1999 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 May 28, 1999 on our audits of the financial statements of the H. J. Heinz
Company SAVER Plan as of December 31, 1998 and 1997 and for the year ended
December 31, 1998, which report is included in this Annual Report on Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 28, 1999
