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
For the fiscal year ended DECEMBER 31, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 1-13632
A. Full Name of the Plan:
THE CIRCLE K KASH PLUS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
TOSCO CORPORATION
72 CUMMINGS POINT ROAD
STAMFORD, CONNECTICUT 06902
<PAGE>
THE CIRCLE K KASH PLUS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1997 AND 1996 AND
FOR THE YEAR ENDED DECEMBER 31, 1997
<PAGE>
THE CIRCLE K KASH PLUS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
PAGE(S)
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits with Fund
Information as of December 31, 1997 2
Statement of Net Assets Available for Benefits with Fund
Information as of December 31, 1996 3
Statement of Changes in Net Assets Available for Benefits with
Fund Information for the year ended December 31, 1997 4
Notes to Financial Statements 5 - 8
Supplemental Schedules:
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1997 9
Item 27(d) - Schedule of Reportable (5%) Transactions for the
year ended December 31, 1997 10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees
The Circle K Kash Plus Plan
We have audited the accompanying statements of net assets available for benefits
of The Circle K Kash Plus Plan (the "Plan") as of December 31, 1997 and 1996,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 1997. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997 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 schedules of assets held
for investment purposes as of December 31, 1997, and reportable (5%)
transactions for the year ended December 31, 1997, are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules are the
responsibility of the Plan's management. 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 benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in 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.
COOPERS & LYBRAND L.L.P.
Phoenix, Arizona
June 29, 1998
<PAGE>
<TABLE>
<CAPTION>
THE CIRCLE K KASH PLUS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1997
Participant Directed
----------------------------------------------------------------------------------
Stable Value Balanced Equity Global Stock Loan
Fund Fund Fund Fund Fund Fund Total
------------- ---------- --------- --------- --------- --------- ----------
ASSETS
Investments, at fair value:
<S> <C> <C> <C> <C> <C> <C> <C>
Mutual funds $ - $9,956,244 $11,485,622 $4,130,241 $ - $ - $25,572,107
Pooled separate account 21, 609,382 21,609,382
Common stock 664,682 664,682
Loans to participants 2,914,338 2,914,338
------------ ----------- ------------ ----------- --------- ----------- -----------
Total investments 21,609,382 9,956,244 11,485,622 4,130,241 664,682 2,914,338 50,760,509
----------- ----------- ------------ ----------- --------- ----------- -----------
Receivables:
Employer's contribution 10,435 3,931 3,503 2,143 20,012
Participants' contributions 31,039 12,299 12,228 7,093 62,659
Interest and dividends 24,826 24,826
----------- ------------ ------------ ------------ ---------- ----------- --------
Total receivables 66,300 16,230 15,731 9,236 - - 107,497
----------- ------------ ------------ ------------ ---------- ------------ --------
Cash 27,599 11,750 27,438 1,771 5,758 74,316
----------- ------------ ------------ ------------ ---------- ----------- -----------
Net assets available for benefits $21,703,281 $9,984,224 $11,528,791 $4,141,248 $664,682 $2,920,096 $50,942,322
============ ============ ============ ============ ========== =========== ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE CIRCLE K KASH PLUS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1996
Participant Directed
-----------------------------------------------------------------------------
Stable Value Balanced Equity Global Stock Loan
Fund Fund Fund Fund Fund Fund Total
------------- ---------- --------- -------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Mutual funds $ - $8,384,047 $7,425,966 $3,235,861 $ - $ - $19,045,874
Pooled separate accounts 21,392,824 21,392,824
Common stock 562,953 562,953
Loans to participants 2,211,064 2,211,064
------------ ------------ ---------- ---------- --------- ---------- -----------
Total investments 21,392,824 8,384,047 7,425,966 3,235,861 562,953 2,211,064 43,212,715
------------ ------------ ---------- ---------- --------- ---------- -----------
Receivables:
Employer's contribution 20,404 11,132 9,171 6,304 47,011
Participants' contributions 58,404 33,350 28,540 18,860 139,154
Interest and dividends 22,503 1,218 23,721
------------ ------------ ---------- ---------- --------- ---------- -----------
Total receivables 101,311 44,482 37,711 25,164 1,218 - 209,886
------------ ------------ ---------- ---------- --------- ---------- -----------
Cash 135,902 35,157 60,980 16,577 3,003 251,619
------------ ------------ ---------- ---------- --------- ---------- -----------
Net assets available for benefits $21,630,037 $8,463,686 $7,524,657 $3,277,602 $567,174 $2,211,064 $43,674,220
============= ============= =========== ========== ========== ========== ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE CIRCLE K KASH PLUS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
Participant Directed
------------------------------------------------------------------------------
Stable Value Balanced Equity Global Stock Loan
Fund Fund Fund Fund Fund Fund Total
-------------- ---------- ---------- ------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in fair
value of investments $- $1,697,849 $2,161,543 $212,098 $211,719 $- $4,283,209
Interest and dividends 1,271,867 7,905 517,639 296,438 559 5,758 2,100,166
----------- ---------- ---------- --------- --------- --------- -----------
Total investment income 1,271,867 1,705,754 2,679,182 508,536 212,278 5,758 6,383,375
----------- ---------- ---------- --------- --------- --------- -----------
Contributions:
Employer 718,812 350,868 318,953 203,426 1,592,059
Participants 2,098,252 1,092,487 1,055,972 643,641 4,890,352
Rollovers 3,540 21,409 55,705 21,798 102,452
----------- ---------- ---------- --------- --------- --------- -----------
Total contributions 2,820,604 1,464,764 1,430,630 868,865 - - 6,584,863
----------- ---------- ---------- --------- --------- --------- -----------
Total additions 4,092,471 3,170,518 4,109,812 1,377,401 212,278 5,758 12,968,238
----------- ---------- ---------- --------- --------- --------- -----------
Deductions from net
assets attributed to:
Benefits paid to participants 2,726,323 1,023,382 816,421 430,004 74,592 290,746 5,361,468
Forfeitures 258,047 22,823 32,905 20,144 4,749 338,668
----------- ---------- ---------- --------- --------- --------- -----------
Total deductions 2,984,370 1,046,205 849,326 450,148 79,341 290,746 5,700,136
----------- ---------- ---------- --------- --------- --------- -----------
Net increase (decrease)
before interfund transfers 1,108,101 2,124,313 3,260,486 927,253 132,937 (284,988) 7,268,102
Interfund transfers (1,034,857) (603,775) 743,648 (63,607) (35,429) 994,020 -
----------- ---------- ---------- --------- --------- --------- -----------
Net increase (decrease) 73,244 1,520,538 4,004,134 863,646 97,508 709,032 7,268,102
Net assets available for
benefits, beginning of year 21,630,037 8,463,686 7,524,657 3,277,602 567,174 2,211,064 43,674,220
----------- ---------- ---------- --------- --------- --------- -----------
Net assets available for
benefits, end of year $21,703,281 $9,984,224 $11,528,791 $4,141,248 $664,682 $2,920,096 $50,942,322
=========== ========== =========== ========== ========= =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
THE CIRCLE K KASH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of The Circle K Kash Plus Plan (the "Plan") provides
only general information. Participants should refer to the Plan Documents for a
more complete description of the Plan's provisions.
GENERAL
The Plan, established in 1985, and amended and restated at various times, is a
defined contribution, 401(k) profit sharing plan, covering substantially all of
the full-time employees of Tosco Marketing Company, formerly Circle K Stores,
Inc. (the "Sponsor") who have reached the age of 21 and completed one continuous
year of employment with the Sponsor.. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal
Revenue Code as amended by the Tax Reform Act of 1986 and subsequent
legislation. Effective April 1, 1996, the Plan is being administered by Merrill
Lynch Trust Company ("Merrill Lynch"), who is also maintaining the individual
participant account records and serving as custodian for the Plan's investments.
CONTRIBUTIONS
Participants may contribute between 1 and 12 percent of their eligible
compensation (up to $160,000 in 1997) to the Plan. During 1997, the Sponsor
contributed an amount equal to 50 percent of the first 4 percent of the
participant's contribution for each payroll period (see Note 8). Participant
investment choice dictates the allocation of the Sponsor's matching
contribution. Earnings on investments held by the Plan in the name of a
participant are automatically invested in the respective fund from which the
earnings were derived.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
allocations of the Sponsor's contribution and, Plan earnings, and charged with
an allocation of investment expenses. 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 Participant contributions to the Plan, as well as the investment
earnings thereon, are fully vested. Effective December 31, 1997, employee
participants became 100% vested in the Sponsor's matching and discretionary
contributions plus actual earnings thereon.
LOANS TO PARTICIPANTS
The Plan, with certain limitations, may make loans to participants with an
interest rate approximately equal to the prime interest rate on the origination
date. A loan from the Plan will be made for up to 50% of the participants
account balance and all interest payments made under the terms of the loan will
be credited to the participant's account and not considered general earnings of
the Plan. Participants' loans are repaid through payroll deductions. The
participant loans are collateralized by the participants' vested account
balances. The maturity on these loans is not to exceed five years.
DISTRIBUTIONS
Benefits of the Plan are payable upon reaching normal retirement, early
retirement, termination, or in the event of death or disability. All
distributions from the Plan are made in one lump sum. Any whole shares of stock
in a participant's stock fund account may be distributed in the form of shares
of stock. All other amounts, including fractional shares of stock, will be
distributed to the participant in cash.
FORFEITURES
Under the terms of the Plan Agreement, nonvested employer contributions revert
back to the Sponsor after a participant has terminated employment.
<PAGE>
ADMINISTRATION FEES
All Plan investment management fees are paid from the investment earnings of the
individual investment funds and all other administration fees are paid by the
Sponsor.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Plan's financial statements are presented on the accrual basis of
accounting.
USE OF ESTIMATES
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, the reported changes in
net assets available for benefits and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
INVESTMENTS
The Plan's investments are stated at fair value. Common stock and mutual fund
securities are valued at their quoted market price. Pooled separate accounts are
valued at contract value plus accrued income which approximates fair value.
Participant loans are valued at cost which approximates fair value. Purchases
and sales of investments are recorded on a trade date basis.
The Plan presents, in the statement of changes in net assets, the net
appreciation (depreciation) in the fair value of its investments which consists
of the realized gains or losses and the unrealized appreciation (depreciation)
of those investments. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
3. INVESTMENTS
Participants may designate, in one percent increments, the portion of his or her
contribution to be placed in various funds. Loan repayments are allocated to
these funds based on the participant's current contribution designation. The
characteristics of the different funds as follows:
STABLE VALUE FUND
The stable value fund seeks to provide preservation of participants'
investments, liquidity, and current income that is typically higher than money
market funds. Investments are held in a pooled separate account maintained by
Merrill Lynch that invests in a broadly-diversified portfolio of investment
contracts, U.S. government obligations, U.S. government agency securities, and
high-quality money market securities.
BALANCED FUND
The balanced fund seeks to provide current income and, secondarily, growth of
capital. Investments are in the Income Fund of America mutual fund. This mutual
fund invests in equities, bonds, and other fixed-income securities in any
proportion that seems warranted by existing or expected market conditions.
EQUITY FUND
The equity fund seeks growth of capital. Investments are made in the Davis New
York Venture mutual fund. This mutual fund invests primarily in equity
securities of companies with market capitalization in excess of $250 million.
GLOBAL FUND
The global fund seeks to provide long-term growth of capital through investments
throughout the world, including the United States. Investments are made in the
New Perspective mutual fund. This mutual fund invests in U.S. and foreign blue
chip companies, focusing on opportunities generated by changes in global trade
patterns and economic and political relationships.
<PAGE>
STOCK FUND
The stock fund was established to allow participants to purchase common stock of
The Circle K Corporation ("Circle K"). On February 16, 1996, the stock fund was
closed to additional contributions and participants were allowed to maintain
their existing balance in the stock fund or transfer their stock fund balance
into any other investment fund. In conjunction with Tosco Corporation's
("Tosco") May 30, 1996 acquisition of Circle K, 13,340 shares of Circle K common
stock were exchanged for 8,220 shares of Tosco Corporation ("Tosco") common
stock. At December 31, 1996 the stock fund held 7,115 shares of Tosco common
stock. In February 1997, Tosco declared and distributed a 3-for-1 stock split.
At December 31, 1997, the stock fund held 17,704 shares of Tosco common stock.
LOAN FUND
The loan fund represents amounts borrowed by participants against their
individual accounts. All loans are collaterallized by the vested portion of the
participants' plan balance.
<TABLE>
<CAPTION>
As of December 31, 1997 and 1996 the Plan investments were as follows:
DECEMBER 31, 1997
-----------------------------------------------
Number of Fair Value
Participants per Unit Fair Value
------------ ----------- ----------
<S> <C> <C> <C>
Investments at fair value:
Stable Value Fund (a) 3,588 $ 1.00 $ 21,609,382
Balanced Fund (a) 2,244 17.77 9,956,244
Equity Fund (a) 2,089 22.33 11,485,622
Global Fund (a) 1,516 19.37 4,130,241
Stock Fund 425 37.81 664,682
Loan Fund (a) 1,071 2,914,338
---------------
$ 50,760,509
===============
(a) This investment represents more than 5% of the Plan's net assets
available for benefits as of December 31, 1997.
DECEMBER 31, 1996
--------------------------------------------------
Number of Fair Value
Participants per Unit Fair Value
<S> <C> <C> <C>
Investments at fair value:
Circle K Stable Value Fund (a) 3,996 $ 1.00 $ 21,379,345
Wells Fargo Stable Assets Fund (b) 1.00 13,479
---------------
Stable Value Fund 21,392,824
Balanced Fund (a) 2,494 16.52 8,384,047
Equity Fund (a) 2,170 17.50 7,425,966
Global Fund (a) 1,512 18.17 3,235,861
Stock Fund (c) 510 79.12 562,953
Loan Fund (a) 939 2,211,064
---------------
$ 43,212,715
===============
(a) This investment represents more than 5% of the Plan's net assets
available for benefits as of December 31, 1996.
(b) Number of participant information as of December 31, 1996 is not
available.
(c) The unit value as of December 31, 1996 does not reflect a 3-for-1 stock
split declared and distributed in February 1997.
</TABLE>
<PAGE>
4. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Sponsor by a letter
dated April 15, 1996, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (the "Code"). Although the
Plan amendment allowing Tosco common stock as an investment fund was not in
place when the foregoing determination letter was sought, management, Merrill
Lynch, and the Plan's tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable requirements of the
Code.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Sponsor has the right
under the Plan to terminate the Plan subject to the provisions of ERISA. In the
event the Plan is terminated by the Sponsor, participants will become fully
vested for Sponsor contributions in their accounts. Upon termination, the Plan's
assets would be distributed to the participants, as soon as possible and legally
permitted, on the basis of their account balances existing on the date of
termination as adjusted for investment gains and losses.
6. PARTY IN INTEREST TRANSACTIONS
At December 31, 1997 and 1996, all forfeitures have been excluded from the
Plan's net assets available for benefits.
During 1997, administrative expenses related to the Plan totaling $76,760 were
paid by the Sponsor from available forfeitures.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits as of
December 31, 1997 as reflected in these financial statements to the amounts
reflected in the Plan's Form 5500:
<TABLE>
<CAPTION>
1997
--------------
<S> <C>
Net assets available for benefits as reported in the financial statements $ 50,942,322
Amounts allocated to withdrawing participants 106,477
----------------
Net assets available for benefits as reported in the Form 5500 $ 50,835,845
================
The following is a reconciliation of benefits paid to participants for the year
ended December 31, 1997 as reflected in these financial statements to the amount
reflected in the Plan's Form 5500:
Benefits paid to participants as reported in the financial statements $ 5,361,468
Amount allocated to withdrawing participants at December 31, 1997 106,477
Benefits paid to participants as reported in the Form 5500 ---------------
$ 5,467,945
===============
</TABLE>
8. SUBSEQUENT EVENT
Effective January 1, 1998, the Plan was renamed the Tosco Store Savings Plan and
all non-store employee participants in the Plan were made eligible for the Tosco
Corporation Capital Accumulation Plan (the "CAP"). Participants electing to
transfer to the CAP were given a one time option to transfer not less than 100%
of their Plan balances to the CAP. Additionally, certain store employees
formerly participating in the CAP were transferred to the Plan.
Also effective January 1, 1998 the Plan was amended so that no future Sponsor
matching contributions will be made.
<PAGE>
<TABLE>
<CAPTION>
THE CIRCLE K KASH PLUS PLAN
ITEM 27(A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
Current
Identity of Issue, Borrower, Lessor or Similar Party Description of Investment Cost Value
- ----------------------------------------------------- -------------------------- ----------- -------------
<S> <C> <C> <C>
Merrill Lynch - Circle K Stable Value Fund (a) 21,609,382 shares $21,609,382 $21,609,382
American Funds - Income Fund of America 561,568 shares 9,454,377 9,956,244
Davis Funds - Davis New York Venture Fund 515,831 shares 9,019,630 11,485,622
American Funds - New Perspective Fund 214,268 shares 4,006,344 4,130,241
Tosco Corporation - Common Stock (a) 17,704 shares 470,893 664,682
Participant Loans Receivable Interest rates from 6.0% to
10.0% and maturities through
2002 - 2,914,338
-------------
$50,760,509
--------------
Notes:
(a) - Investment qualifies as a party-in-interest for the Plan.
</TABLE>
<TABLE>
<CAPTION>
THE CIRCLE K KASH PLUS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
PUCHASES
Number of Purchase
Identity of Party Involved Description of Asset Transactions Price
- ----------------------------- ----------------------------- ---------------- ------------
<S> <C> <C> <C>
Merrill Lynch Circle K Stable Value Fund 1,050 $6,274,270
American Funds Income Fund of America 719 3,225,435
Davis Funds Davis New York Venture Fund 788 4,307,504
American Funds New Perspective Fund 665 1,711,833
SALES
Number of Selling Cost of Net Gain
Identity of Party Involved Description of Asset Transactions Price Asset or (Loss)
- ----------------------------- ---------------------------- --------------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Merrill Lynch Circle K Stable Value Fund 760 $5,823,688 $5,823,688 $-
American Funds Income Fund of America 733 2,271,875 2,114,415 157,460
Davis Funds Davis New York Venture Fund 687 2,376,496 1,987,232 389,264
American Funds New Perspective Fund 581 1,008,859 901,550 107,309
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Tosco Corporation on Form S-8 (File No. 33-54153) of our report dated June 29,
1998, on our audits of the financial statements and financial statement
schedules of The Circle K Kash Plus Plan as of December 31, 1997 and 1996, and
for the year ended December 31, 1997, which report is included in this Annual
Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Phoenix, Arizona
June 29, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOSCO CORPORATION
(Registrant)
THE CIRCLE K KASH PLUS PLAN
Date: June 29, 1998 By: /s/ Wanda Williams
-------------------------------
Wanda Williams
Vice President - Human Resources
By: /s/ Randall S. Schultz
-------------------------------
Randall S. Schultz
Plan Administrator
