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FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X]AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal year ended February 3, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ...... to ......
Commission file number 0-14399
Golden Books Family Entertainment, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 06-1104930
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
850 Third Avenue, New York, New York 10022
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-753-8500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
-------------------
Common Stock, par value $ .01
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days. Yes X or No
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, is definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of the Registrant's voting stock
held by non-affiliates of the Registrant, computed by reference to the closing
sales price as quoted on NASDAQ on April 9, 1996, was approximately
$246,459,156.
As of April 9, 1996, 21,666,739 shares of the Registrant's
$.01 par value common stock were outstanding.
Portions of the Registrant's April 18, 1996 Proxy Statement
for the Special Meeting of Stockholders scheduled for May 8, 1996 are
incorporated by reference into Part III of Form 10-K.
The undersigned Registrant hereby amends Item 14 of its Annual
Report on Form 10-K for the fiscal year ended February 3, 1996 to provide in its
entirety as follows:
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) 1. Financial Statements.
The consolidated financial statements of Golden Books Family
Entertainment, Inc. and subsidiaries (formerly Western
Publishing Group, Inc. and subsidiaries), which appear on
pages F-1 through F-20 of the Company's April 18, 1996 Proxy
Statement for the Special Meeting of Stockholders scheduled
for May 8, 1996, which is incorporated by reference.
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Page Reference
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April 18, 1996
Proxy
Form 10-K-A Statement
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WESTERN PUBLISHING GROUP, INC.
AND SUBSIDIARIES
Independent Auditors' Report A-1 F-2
Consolidated Balance Sheets as of February 3, 1996
and January 28, 1995 F-3
Consolidated Statements of Operations for the Years
ended February 3, 1996, January 28, 1995 and
January 29, 1994 F-4
Consolidated Statements of Common Stockholders'
Equity for the Years ended February 3, 1996,
January 28, 1995 and January 29, 1994 F-5
Consolidated Statements of Cash Flows for the Years
ended February 3, 1996, January 28, 1995 and
January 29, 1994 F-6
Notes to Consolidated Financial Statements F-7
2. Financial Statement Schedule.
II - Valuation and Qualifying Accounts S-1
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EXHIBITS
3.1 Restated Certificate of Incorporation of the Registrant dated March 11,
1986 (incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement No 33-4127 on Form S-1 (the "Registration
Statement")).
3.2 Certificate of Correction of the Certificate of Incorporation of the
Registrant dated January 13, 1987 (incorporated by reference to Exhibit
3.2 to the Registrant's Annual Report on Form 10-K for fiscal year 1988
(the "1988 Form 10-K")).
3.3 Amendment to Certificate of Incorporation of Registrant as approved by
a majority of the stockholders at the Annual Meeting of Stockholders
held May 14, 1987 (incorporated by reference to Exhibit 3.3 to the 1988
Form 10-K).
3.4 Amendment to Certificate of Incorporation of Registrant as approved by
a majority of the stockholders at the Annual Meeting of Stockholders
held May 17, 1990 (incorporated by reference to Exhibit 3.4 to
Registrant's Annual Report on Form 10-K for fiscal year 1991 (the "1991
Form 10-K")).
3.41 Amendment to Certificate of Incorporation of Registrant as approved by
a majority of the stockholders at the Annual Meeting of Stockholders
held December 19, 1995 (incorporated by reference to Exhibit 3.41 to
Registrant's Annual Report on Form 10-K for fiscal year 1996 (the "1996
Form 10-K")).
3.5 By-laws of the Registrant (incorporated by reference to Exhibit 3.4 to
the 1988 Form 10-K).
4.1 Form of certificate for shares of the Registrant's Common Stock
(incorporated by reference to Exhibit 4.4 to the Registration
Statement).
10.20 Securities Purchase Agreement, dated as of January 31, 1996, by and
between Western Publishing Group, Inc. and Golden Press Holding,
L.L.C., with exhibits (incorporated by reference to Exhibit 10.20 to
the Registrant's Form 8-K as of January 31, 1996).
10.21 Irrevocable Proxy, dated as of January 31, 1996, between Golden Press
Holding, L.L.C. and Richard A. Bernstein (incorporated by reference to
Exhibit 10.21 to the Registrant's Form 8-K as of January 31, 1996).
10.22 Irrevocable Proxy, dated as of January 31, 1996, between Golden Press
Holding, L.L.C. and the Trust, fbo Richard A. Bernstein u/a March 16,
1978, Richard A. Bernstein and Stuart Turner, as trustees (incorporated
by reference to Exhibit 10.22 to the Registrant's Form 8-K as of
January 31, 1996).
10.23 Irrevocable Proxy, dated as of January 31, 1996, between Golden Press
Holding, L.L.C. and the Trust, fbo Richard A. Bernstein u/a Barry S.
Bernstein, dated April 5, 1986, Fleet National Bank of Connecticut, as
trustee (incorporated by reference to Exhibit 10.23 to the Registrant's
Form 8-K as of January 31, 1996).
10.24 Registration Rights Agreement, dated as of January 31, 1996, by and
among Western Publishing Group, Inc., Richard A. Bernstein, the Trust,
fbo Richard A. Bernstein u/a March 16, 1978, Richard A. Bernstein and
Stuart Turner, as trustees, The Richard A. and Amelia Bernstein
Foundation, Inc. and the Trust, fbo Richard A. Bernstein u/a Barry S.
Bernstein dated April 5, 1986, Fleet National Bank of Connecticut, as
trustee (incorporated by reference to Exhibit 10.24 to the Registrant's
Form 8-K as of January 31, 1996).
10.25 Amendment No. 1 dated April 5, 1996 to Securities Purchase Agreement
(incorporated by reference to Exhibit 10.25 to the 1996 Form 10-K).
10.27 Lease dated January 15, 1985, between PG Investments and Western
Publishing Company, Inc. with amendment dated January 22, 1986
(incorporated by reference to Exhibit 10.9 to the Registration
Statement).
3
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10.28 Amendment dated December 29, 1986, between PG Investments and Western
Publishing Company, Inc. to the lease dated January 15, 1985, as
amended (incorporated by reference to Exhibit 10.9 to the 1988 Form
10-K).
10.29 Amendment dated January 18, 1988, between PG Investments and Western
Publishing Company, Inc. to the Lease dated January 15, 1985, as
amended (incorporated by reference to Exhibit 10.10 to the 1988 Form
10-K).
10.30 Amendment dated August 25, 1988, between PG Investments and Western
Publishing Company, Inc. to the Lease dated January 15, 1985, as
amended (incorporated by reference to Exhibit 10.16 to the Registrant's
Annual Report on Form 10-K for fiscal year 1989 (the "1989 Form
10-K")).
10.31 Amendment dated December 21, 1989, between PG Investments and Western
Publishing Company, Inc. to the Lease dated January 15, 1985, as
amended (incorporated by reference to Exhibit 10.31 to the Registrant's
Annual Report on Form 10-K for fiscal year 1990 (the "1990 Form
10-K")).
10.33 Lease dated February 1, 1989, between Golden Press, Inc. and 850 Third
Avenue LP (incorporated by reference to Exhibit 10.33 to the 1990 Form
10-K).
10.33a First Amendment Agreement dated February 3, 1993 (to lease dated
February 1, 1989) between 850 Third Avenue LP and Golden Press, Inc.,
as modified by Letter Agreement dated February 3, 1993 (incorporated by
reference to Exhibit 10.33a to the 1990 Form 10-K).
10.35 Warehouse Lease Agreement - Indenture dated April 15, 1987, between
Cambridge Terminal Warehouse and Western Publishing Company, Inc.
(incorporated by reference to Exhibit 10.21 to the 1988 Form 10-K).
10.36 Lease Amendment dated March 17, 1989, between Cambridge Terminal
Warehouse and Western Publishing Company, Inc. to the Warehouse Lease
Agreement - Indenture dated April 15, 1987 (incorporated by reference
to Exhibit 10.36 to the 1990 Form 10-K).
10.37 Lease dated May 1, 1987, between West Springfield Industrial Center,
Inc. and Penn Corporation (incorporated by reference to Exhibit 10.23
to the 1988 Form 10-K).
10.40 Golden Comprehensive Security Program, as amended and restated,
effective January 1, 1993 (incorporated by reference to Exhibit 10.40
to the Registrant's Annual Report on Form 10-K for fiscal year 1993
(the "1993 Form 10-K")).
10.41 First Amendment of Golden Comprehensive Security Program, as amended
and restated, effective January 1, 1993 (incorporated by reference to
Exhibit 10.41 to the Registrant's Annual Report on Form 10-K for the
fiscal year 1995 (the "1995 Form 10-K")).
10.42 Second Amendment of Golden Comprehensive Security Program, as amended
and restated, effective January 1, 1993 (incorporated by reference to
Exhibit 10.42 to the 1996 Form 10-K).
10.43 Third Amendment of Golden Comprehensive Security Program, as amended
and restated, effective January 1, 1993 (incorporated by reference to
Exhibit 10.43 to the 1996 Form 10-K).
10.53 Golden Retirement Savings Program, as amended and restated, effective
January 1, 1993 (incorporated by reference to Exhibit 10.53 to the 1993
Form 10-K).
10.54 First Amendment of Golden Retirement Savings Program, as amended and
restated, effective January 1, 1993 (incorporated by reference to
Exhibit 10.54 to the 1995 Form 10-K).
10.55 Second Amendment of Golden Retirement Savings Program, as amended and
restated, effective January 1, 1993 (incorporated by reference to
Exhibit 10.55 to the 1996 Form 10-K).
4
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10.63 Penn Corporation Comprehensive Security Program, effective January 1,
1987 (incorporated by reference to Appendix A to the Registrant's
Registration Statement 33-18430 on Form S-8 (the "Penn Comprehensive
Registration Statement")).
10.64 First Amendment of Penn Corporation Comprehensive Security Program,
effective November 2, 1987 (incorporated by reference to Appendix A to
the Penn Comprehensive Registration Statement).
10.65 Second Amendment of Penn Corporation Comprehensive Security Program,
effective January 1, 1987 (incorporated by reference to Exhibit 10.36
to the 1988 Form 10-K).
10.66 Third Amendment of Penn Corporation Comprehensive Security Program,
effective November 2, 1987 (incorporated by reference to Exhibit 10.37
to the 1988 Form 10-K).
10.67 Fourth Amendment of Penn Corporation Comprehensive Security Program,
effective January 1, 1988 (incorporated by reference to Exhibit 10.48
to the 1989 Form 10-K).
10.68 Fifth Amendment of Penn Corporation Comprehensive Security Program,
effective January 1, 1988 (incorporated by reference to Exhibit 10.49
to the 1989 Form 10-K).
10.69 Sixth Amendment of Penn Corporation Comprehensive Security Program,
effective January 1, 1988 (incorporated by reference to Exhibit 10.50
to the 1989 Form 10-K).
10.70 Seventh Amendment of Penn Corporation Comprehensive Security Program,
effective January 1, 1987, 1988 or 1989 as applicable (incorporated by
reference to Exhibit 10.52 to the 1990 Form 10-K).
10.71 Eighth Amendment of Penn Corporation Comprehensive Security Program,
effective October 18, 1989 (incorporated by reference to Exhibit 10.67
to the 1990 Form 10-K).
10.71a Ninth Amendment of Penn Corporation Comprehensive Security Program,
effective July 1, 1991 (incorporated by reference to Exhibit 10.67 to
the Registrant's Annual Report on Form 10-K for fiscal year 1992 (the
"1992 Form 10-K")).
10.71b Tenth Amendment of Penn Corporation Comprehensive Security Program,
effective April 1, 1993 (incorporated by reference to Exhibit 10.67 to
the 1994 Form 10-K).
10.71c Eleventh Amendment of Penn Corporation Comprehensive Security Program,
effective January 1, 1994 (incorporated by reference to Exhibit 10.71c
to the 1995 Form 10-K).
10.71d Twelfth Amendment of Penn Corporation Comprehensive Security Program,
effective January 1, 1994 (incorporated by reference to Exhibit 10.71d
to the 1996 Form 10-K).
10.72 Beach Products (Division of Penn Corporation) Retirement Savings
Program, effective May 2, 1989 (incorporated by reference to Exhibit
10.72 to the 1992 Form 10-K).
10.73 First Amendment of Beach Products (Division of Penn Corporation)
Retirement Savings Program, effective October 1, 1990 (incorporated by
reference to Exhibit 10.73 to the 1992 Form 10-K).
10.74 Second Amendment of Beach Products (Division of Penn Corporation)
Retirement Savings Program, effective October 17, 1991 (incorporated by
reference to Exhibit 10.74 to the 1992 Form 10-K).
10.74a Third Amendment of Beach Products (Division of Penn Corporation)
Retirement Savings Program, effective July 1, 1991 (incorporated by
reference to Exhibit 10.73 to the 1993 Form 10-K).
5
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10.74b Fourth Amendment of Beach Products (Division of Penn Corporation)
Retirement Savings Program, effective April 1, 1993 (incorporated by
reference to Exhibit 10.73 to the 1994 Form 10-K).
10.74c Fifth Amendment of Beach Products (Division of Penn Corporation)
Retirement Savings Program, effective January 1, 1994 (incorporated by
reference to Exhibit 10.74c to the 1995 Form 10-K).
10.74d Sixth Amendment of Beach Products (Division of Penn Corporation)
Retirement Savings Program, effective January 1, 1994 (incorporated by
reference to Exhibit 10.74d to the 1996 Form 10-K).
10.75 Master Trust Agreement between the Registrant, Western Publishing
Company, Inc., Penn Corporation and Bankers Trust Company, effective
November 19, 1987 (incorporated by reference to Exhibit 10.38 to the
1988 Form 10-K).
10.76 Form of Agreement between the Registrant, Penn Corporation and certain
employees of Penn Corporation relating to the award of shares of common
stock of the Registrant, as adopted by the Board of Directors of the
Registrant on May 1, 1987 (incorporated by reference to Exhibit 10.39
to the 1988 Form 10-K).
10.77 Amended and Restated 1986 Employee Stock Option Plan of the Registrant
(incorporated by reference to Exhibit 10.40 to the 1988 Form 10-K).
10.78 Amendment dated April 11, 1989 to the Amended and Restated 1986
Employee Stock Option Plan of the Registrant (incorporated by reference
to Exhibit 10.56 to the 1990 Form 10-K).
10.79 Employment Agreement dated the 24th day of April, 1990 between Western
Publishing Group, Inc. and Frank P. DiPrima (incorporated by reference
to Exhibit 10.72 to the 1991 Form 10-K).
10.80 Western Publishing Company, Inc.'s Executive Medical Reimbursement Plan
dated January 1, 1991 (incorporated by reference to Exhibit 10.73 to
the 1991 Form 10-K).
10.85 Western Publishing Group, Inc. 1995 Stock Option Plan (incorporated by
reference to Appendix A to the Registrant's November 17, 1995 Proxy
Statement).
10.86 Employment Agreement dated as of May 9, 1995 between Western Publishing
Group, Inc. and John P. Moore (incorporated by reference to Exhibit
10.86 to the 1996 Form 10-K).
10.86a Agreement dated February 6, 1996 between Western Publishing Group, Inc.
and John P. Moore (incorporated by reference to Exhibit 10.86a to the
1996 Form 10-K).
10.86b Amendment to the Agreement dated February 6, 1996 between Western
Publishing Group, Inc. and John P. Moore dated February 7, 1996
(incorporated by reference to Exhibit 10.86b to the 1996 Form 10-K).
10.88 Credit Agreement dated as of November 12, 1992, providing up to $200
million, among the Registrant, Western Publishing Group, Inc. and a
group of commercial banks (incorporated by reference to Exhibit 10.88
to the Form 10-Q for the quarter ended October 31, 1992).
10.89 Amendment No. 1 dated as of July 31, 1993, to the Credit Agreement
dated as of November 12, 1992 (incorporated by reference to Exhibit
10.89 to the 1994 Form 10-K).
10.90 Amendment No. 2 dated as of October 30, 1993, to the Credit Agreement
dated as of November 12, 1992 (incorporated by reference to Exhibit
10.90 to the 1994 Form 10-K).
10.91 Guarantee Agreement dated as of December 13, 1993, to the Credit
Agreement dated as of November 12, 1992 (incorporated by reference to
Exhibit 10.91 to the 1994 Form 10-K).
6
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10.92 Amendment No. 3 dated as of May 13, 1994, to the Credit Agreement dated
as of November 12, 1992 (incorporated by reference to Exhibit 10.92 to
the 1994 Form 10-K).
10.93 Amended and Restated Credit Agreement dated as of May 31, 1994,
providing up to $140 million, among the Registrant, Western Publishing
Group, Inc. and a group of commercial banks (incorporated by reference
to Exhibit 10.93 to the 1995 Form 10-K).
10.94 Amendment No. 1 dated as of August 4, 1994, to the Amended and Restated
Credit Agreement dated as of May 31, 1994 (incorporated by reference to
Exhibit 10.94 to the 1995 Form 10-K).
10.95 Amendment No. 2 dated as of February 21, 1995, to the Amended and
Restated Credit Agreement dated as of May 31, 1994 (incorporated by
reference to Exhibit 10.95 to the 1995 Form 10-K).
10.96 Asset Purchase and Supply Agreement dated as of August 4, 1994 among
Western Publishing Company, Inc., Western Publishing (Canada), Ltd.,
and Hasbro, Inc. (incorporated by reference to Exhibit 10.96 to the
1995 Form 10-K).
10.97 Agreement dated as of September 23, 1994 between Western Publishing
Group, Inc. and George P. Oess (incorporated by reference to Exhibit
10.97 to the 1995 Form 10-K).
10.98 Receivables Purchasing Agreement and related transaction documents
dated as of September 29, 1995 between Western Publishing Company, Inc.
and Heller Financial, Inc. (incorporated by reference to Exhibit 10.98
to the Registrant's Form 8-K as of September 29, 1995).
10.98a First Amendment to Receivables Purchasing Agreement dated as of
December 26, 1995, as relates to the Credit Agreement dated as of
September 29, 1995 (incorporated by reference to Exhibit 10.98a to the
1996 Form 10-K).
21.1 List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the
1995 Form 10-K).
23.1 Consent of Independent Auditors.
99.1 Financial Statements for the Golden Comprehensive Security Program.
99.2 Financial Statements for the Golden Retirement Savings Program.
99.3 Financial Statements for the Penn Corporation Comprehensive Security
Program.
99.4 Undertaking incorporated by reference into Part II of certain
registration statements on Form S-8 of the Registrant.
99.5 Proxy Statement dated April 18, 1996 for the Special Meeting of
Stockholders scheduled for May 8, 1996, as filed with the Securities
and Exchange Commission on April 19, 1996 (incorporated by reference to
Exhibit 99.5 to the 1996 Form 10-K).
(b) Form 8-K as of January 31, 1996.
7
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: June 25, 1996
Golden Books Family Entertainment, Inc.
By: /s/ RICHARD E. SNYDER
-------------------------------
Richard E. Snyder,
Chairman of the Board, President
and Chief Executive Officer
8
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Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been executed below by the following persons on behalf of
the Registrant and in the capacities and on the date indicated.
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Signature Title Date
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/s/ RICHARD E. SNYDER Chairman of the Board, President June 25, 1996
- ----------------------------- and Chief Executive Officer
Richard E. Snyder (Principal Executive Officer)
/s/ DAVID R. HAAS Treasurer June 25, 1996
- ----------------------------- (Principal Financial and
David R. Haas Accounting Officer)
/s/ SHAHARA AHMAD-LLEWELLYN Director June 25, 1996
- -----------------------------
Shahara Ahmad-Llewellyn
/s/ BARRY DILLER Director June 25, 1996
- -----------------------------
Barry Diller
/s/ LINDA L. JANKLOW Director June 25, 1996
- -----------------------------
Linda L. Janklow
/s/ MARSHALL ROSE Director June 25, 1996
- -----------------------------
Marshall Rose
/s/ H. BRIAN THOMPSON Director June 25, 1996
- -----------------------------
H. Brian Thompson
</TABLE>
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Western Publishing Group, Inc.:
We have audited the consolidated financial statements of Western Publishing
Group, Inc. and subsidiaries as of February 3, 1996 and January 28, 1995, and
for each of the three years in the period ended February 3, 1996, and have
issued our report thereon dated April 2, 1996 (which report includes an
explanatory paragraph regarding the adoption of Statement of Financial
Accounting Standards No. 106); such financial statements and report are included
in your April 18, 1996 Proxy Statement for the Special Meeting of Stockholders
scheduled for May 8, 1996, and are incorporated herein by reference. Our audits
also included the financial statement schedule of Western Publishing Group,
Inc., listed in Item 14. This financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
April 2, 1996
A-1
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WESTERN PUBLISHING GROUP, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED FEBRUARY 3, 1996 (IN THOUSANDS)
- --------------------------------------------------------------------------------
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Allowance for Allowance
Doubtful for
Accounts Returns Total
<S> <C> <C> <C>
BALANCES, JANUARY 30, 1993 $6,929 $ 8,243 $ 15,172
Additions charged to costs and expenses 5,577 40,951 46,528
Deductions - amounts written off (5,686) (40,268) (45,954)
Other changes - net (2,318) 2,767 449
Foreign currency conversion (11) (15) (26)
------ ------ ------
BALANCES, JANUARY 29, 1994 4,491 11,678 16,169
Additions charged to costs and expenses 472 26,248 26,720
Deductions - amounts written off (885) (30,442) (31,327)
Foreign currency conversion (11) (12) (23)
------ ------ -------
BALANCES, JANUARY 28, 1995 4,067 7,472 11,539
Additions charged to costs and expenses 1,440 16,712 18,152
Deductions - amounts written off (2,989) (19,708) (22,697)
Foreign currency conversion 4 6 10
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BALANCES, FEBRUARY 3, 1996 $ 2,522 $ 4,482 $ 7,004
======= ======= ========
</TABLE>
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Exhibit 23.1
INDEPENDENT AUDITORS' REPORT
We consent to the incorporation by reference in Registration Statements Nos.
33-18430, 33-18692, 33-18693 and 33-28019 of Golden Books Family Entertainment,
Inc. (formerly Western Publishing Group, Inc.) on Forms S-8 of our reports dated
April 2, 1996, appearing in and incorporated by reference in the Annual Report
on Form 10-K-A of Golden Books Family Entertainment, Inc. for the year ended
February 3, 1996.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
June 21, 1996
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Exhibit 99.1
GOLDEN COMPREHENSIVE
SECURITY PROGRAM
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1995 AND 1994 AND
INDEPENDENT AUDITORS' REPORT
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GOLDEN COMPREHENSIVE SECURITY PROGRAM
TABLE OF CONTENTS
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PAGE
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits -
December 31, 1995 and 1994 2
Statements of Changes in Net Assets Available for Benefits -
Years ended December 31, 1995 and 1994 3
Notes to Financial Statements 4-12
ALL FUNDS OF THE PLAN ARE HELD IN A MASTER TRUST. AS A
RESULT, SUPPLEMENTAL SCHEDULES ARE OMITTED BECAUSE THEY ARE
INAPPLICABLE UNDER THE DEPARTMENT OF LABOR'S RULES AND
REGULATIONS.
</TABLE>
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INDEPENDENT AUDITORS' REPORT
Benefit Plans Administration Committee
Western Publishing Company, Inc.:
We have audited the accompanying statements of net assets available for benefits
of Golden Comprehensive Security Program (the "Plan") as of December 31, 1995
and 1994, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1995
and 1994, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
April 26, 1996
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GOLDEN COMPREHENSIVE SECURITY PROGRAM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 AND 1994
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1995 1994
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ASSETS:
Investments in Western Publishing Group, Inc. Master
Retirement Trust pooled investment accounts (Notes 3 and 4):
Investment funds $19,806,644 $ 9,221,176
Guaranteed investment contracts 38,277,908 48,328,918
Parent company stock 600,926 1,093,811
Loans receivable from participants 1,908,930 2,197,940
Accrued income receivable 208,697 185,566
Contributions receivable:
Employers 961,829 1,117,331
Participants 188,146 207,133
----------- -----------
Total assets 61,953,080 62,351,875
----------- -----------
LIABILITIES:
Payable to third parties 31,815 51,113
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $61,921,265 $62,300,762
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements.
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GOLDEN COMPREHENSIVE SECURITY PROGRAM
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Investment income - Increase in equity of allocable
portion of Western Publishing Group, Inc. Master
Retirement Trust pooled investment accounts
(Notes 3 and 8):
Interest $ 2,890,710 $ 2,712,885
Dividends 547,807 1,018,924
Appreciation (depreciation) on pooled investment
accounts 2,002,459 (2,321,334)
Contributions - Note 5:
Employers 2,067,294 2,475,965
Participants 2,947,018 3,586,212
---------- ---------
Total additions 10,455,288 7,472,652
---------- ---------
Payments to or on behalf of participants 10,668,692 10,155,071
Administrative expenses 166,093 164,561
---------- ----------
Total deductions 10,834,785 10,319,632
---------- ----------
Net decrease (379,497) (2,846,980)
Net assets available for benefits:
Beginning of year 62,300,762 65,147,742
----------- -----------
End of year $61,921,265 $62,300,762
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
1. THE PLAN
Golden Comprehensive Security Program (the "Plan") is a contributory
defined contribution plan offered to all eligible employees of Western
Publishing Company, Inc. (the "Company") and effective April 23, 1986, to
all eligible employees of Western Publishing Group, Inc., the Company's
parent, and eligible employees of any United States subsidiary of the
Company or the parent which adopts the Plan, with the consent of the
Company, who meet certain eligibility requirements. The Plan became
effective on November 1, 1984 and conforms with the requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA").
An employee becomes a participant of the Plan on specified quarterly entry
dates after meeting the following requirements:
a. Is a salaried employee or a member of a group or class of employees
to which the Plan has been extended by the Board of Directors of the
Company; and
b. Is not a member of a collective bargaining unit of employees
represented by a collective bargaining representative, except to the
extent that an agreement between the participating company
("employer") and such representative extends the Plan to such unit
of employees; and
c. Has completed six months of continuous employment (as defined in the
Plan).
Participants, by means of authorized payroll deductions, may elect to make
contributions to the Plan in amounts based on a percentage of
compensation, as defined in the Plan. A participating employee's total
contribution ("income deferral" and "participant") is limited to 16% of
compensation. Income deferral contributions were limited to no more than
$9,240 for 1995 and 1994 in accordance with the Internal Revenue Code
("Code").
Each participating employer annually contributes to the Plan an amount
equal to 3% of the aggregate compensation of participants entitled to
share in the contribution for that year. In addition, the employers
contribute for a participant an amount equal to 60% of the first 6% of
"income deferral contributions" made by, or on behalf of the participant.
Employer contributions are reduced by any forfeitures to be credited for
the applicable period. Forfeitures for 1995 and 1994 totaled $156,007 and
$242,089, respectively.
The employers' 3% contribution is always invested in the Interest
Accumulation Fund. Amounts credited to a participant's account are
designated as "Plan Credits." Contributions made by, or on behalf of, a
participant are invested (in proportions designated by the participant) in
one or more of the following funds:
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF PARTICIPANTS
INVESTED IN FUND AT
FUND TYPE DECEMBER 31, 1995
<S> <C>
Conservative Equity Fund 468
Aggressive Equity Fund 465
Interest Accumulation Fund 1,143
Parent Company Stock Fund 240
Interest, dividends and net realized and unrealized gains and losses on
Plan investments are allocated to participants' accounts monthly based on
their proportionate share of the applicable fund's assets.
The employers' 3% contribution for each plan year is allocated to the
participants' accounts pro rata based on the eligible compensation paid to
the participant by the employer in that year.
If a participant's employment terminates for any reason other than
retirement, disability or death, the participant is entitled to receive
Plan Credits resulting from employer contributions which are then vested
according to the following schedule:
</TABLE>
<TABLE>
<CAPTION>
VESTED PERCENTAGE
YEARS OF CONTINUOUS OF EMPLOYER
EMPLOYMENT CONTRIBUTION ACCOUNT
<S> <C>
Less than 1 0
1 but less than 2 25
2 but less than 3 50
3 but less than 4 75
4 or more 100
</TABLE>
Balances in a participant's income deferral contribution account,
participant contribution account and prior plan account are fully vested
at all times.
In the event of a participant's retirement, disability or death, Plan
Credits not previously vested, become fully vested and are not subject to
forfeiture, and all Plan Credits become immediately distributable in the
manner described below.
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
When a participant's employment terminates for any reason, all vested Plan
Credits of the participant may be distributed to the participant or, in
the event of death, to the beneficiary by one or both of the following
methods:
a. By a lump-sum distribution of any or all Plan Credits.
b. By applying the cash equivalent of any or all such Plan Credits
towards the purchase of an annuity contract, subject to certain
requirements as defined in the Plan.
A participant may elect to defer distribution of vested Plan Credits until
age 70-1/2.
No more often than once per quarter, a participant may elect to withdraw
all or any portion of the net credit balance in the participant's
contribution account, prior plan account or rollover account. Participants
may borrow, up to certain limits, against their account balance. The loan
must be repaid over a period not to exceed 60 months unless the proceeds
were used for the purchase of a primary residence in which case it must be
repaid within 240 months (360 months for loans made prior to October 18,
1989). Generally, loan repayments are made by payroll deduction.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared on the accrual basis of accounting.
Investments - The Plan participates in investment accounts under the
Western Publishing Group, Inc. Master Retirement Trust (the "Master
Trust"). Investment income, realized gains and losses on investment
transactions, expenses and investment appreciation or depreciation on
assets held in the Master Trust are allocated monthly to each fund under
the Plan based on its proportionate share of Master Trust assets. Plan
participation in the Master Trust is adjusted monthly for withdrawals for
benefit payments to Plan participants and for contributions made to the
Plan.
Valuation of Investments - Investments in the Master Trust pooled
investment accounts and parent company stock are valued at fair value.
Investments in guaranteed investment contracts are valued at contract
value. Contract value represents contributions made under the contract
plus interest at the contract rate, less funds used to purchase annuities
and pay administrative expenses.
Expenses - Plan expenses, such as trustee and accounting fees, are charged
to the Plan.
Benefits Payable - Net assets available for benefits included benefits of
$2,571,157 and $1,278,859 due to participants who have withdrawn from
participation in the Plan as of December 31, 1995 and 1994, respectively.
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. INVESTMENTS IN MASTER TRUST
Investments in the Master Trust at December 31, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Guaranteed investment contracts $ 61,459 $ 77,725
Pooled investment funds 44,157 26,821
Common stock 1,021 1,610
Participant loans 3,368 3,855
-------- --------
Total investments $110,005 $110,011
======== ========
</TABLE>
The net investment gain of the Master Trust for the years ended December
31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Interest and Dividends $5,476 $6,129
Appreciation (depreciation) in fair value of
investments 5,851 (4,024)
Administrative expenses (405) (453)
------- ------
Net investment gain $10,922 $1,652
------- ------
</TABLE>
The Plan's interest in the Master Trust as a percentage of net assets of
the Master Trust was approximately 56% and 55% at December 31, 1995 and
1994, respectively.
4. INVESTMENTS
Investments in pooled investment funds at December 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------ -----------------------
Units Fair Value Units Fair Value
<S> <C> <C> <C> <C>
Conservative Equity Fund
(Evergreen Total Return Fund) 323,338 $ 6,440,898 306,156 $5,213,834
Aggressive Equity Fund
(Evergreen Fund) 361,791 5,727,150 331,346 3,986,095
Bankers Trust Pyramid Directed
Account Cash Fund 7,638,596 7,638,596 21,247 21,247
----------- ----------
$19,806,644 $9,221,176
=========== ==========
</TABLE>
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Investments in guaranteed investment contracts at December 31, 1995 and
1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Principal Mutual Life Insurance Company
Contract #GA4-6187-1 $ 6,056,993 $7,096,087
John Hancock Mutual Life Insurance Company
Contract #GAC-7313-0 8,981,197
Allstate Life Insurance Company
Group Annuity Contract #GA-5343-1 6,301,458
New York Life Insurance Company
Contract #GA-06701-2-1 5,776,869
New York Life Insurance Company
Contract #GA-06701-1 3,033,171 3,553,714
Metropolitan Life Insurance Company
Contract #GA-13981-069 8,841,704 6,469,572
Metropolitan Life Insurance Company
Contract #A-13823-069 1,006,357 1,856,754
Hartford Life Insurance Company
Contract #GA3-10145-AA 7,110,444 8,293,267
Continental Assurance Company
Contract #GP-13137-006 6,463,809
New York Life Insurance Company
Contract #GA-06701-3-1 5,765,430
---------- -----------
$38,277,908 $48,328,918
=========== ===========
</TABLE>
Investments in Parent Company Stock at December 31, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>
1995 1994
------------------ ------------------
<S> <C> <C> <C> <C>
Shares Fair Value Shares Fair Value
Western Publishing Group, Inc.
Common Stock 76,308 $ 600,926 115,138 $1,093,811
====== ========= ======= ==========
</TABLE>
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Transactions in the Common Stock of Western Publishing Group, Inc. were as
follows:
<TABLE>
<CAPTION>
1995 1994
-------------------- -----------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Aggregate purchases 83,834 $ 829,224 26,675 $326,799
---------- --------
Aggregate sales and
distributions to participants 122,664 $1,232,638 40,013 $595,345
---------- --------
</TABLE>
5. CONTRIBUTIONS
Contributions from the Company, Western Publishing Group, Inc. and their
respective participants were as follows:
<TABLE>
<CAPTION>
1995
---------------------------------------
Employer Employee Total
<S> <C> <C> <C>
Western Publishing Company, Inc. $ 1,981,908 $2,843,638 $4,825,546
Western Publishing Group, Inc. 85,386 103,380 188,766
---------- ---------- ----------
$2,O67,294 $2,947,018 $5,014,312
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
1994
--------------------------------------
Employer Employee Total
<S> <C> <C> <C>
Western Publishing Company, Inc. $2,358,026 $3,459,197 $5,817,223
Western Publishing Group, Inc. 117,939 127,015 244,954
---------- ---------- ----------
$2,475,965 $3,586,212 $6,062,177
========== ========== ==========
</TABLE>
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
6. INTERNAL REVENUE SERVICE STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated November 24, 1995, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections
of the Code. The Plan has been amended since receiving the determination
letter. However, the plan administrator believes that the plan is
currently designed and being operated in compliance with the applicable
requirements of the Code. Therefore, the plan administrator believes that
the Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
7. TERMINATION OF THE PLAN
In the event that the Plan is terminated at some future time, each
participant's account will become fully vested and will be distributed in
accordance with provisions of the Plan.
* * * * * *
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
8. CHANGES IN NET ASSETS BY FUND:
Plan participants have the ability to self-direct employee and certain
employer contributions into any of the funds described in Note 1. Net
assets at December 31, 1995 and the changes in net assets available for
benefits for the year then ended were as follows:
<TABLE>
<CAPTION>
Interest
Accumula-
Conservative Aggressive Parent Company tion
Equity Fund Equity Fund Stock Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $ 1,296 $ 5,310 $2,748,433 $ 135,671 $2,89O,710
Dividends $ 321,772 226,O35 547,807
Appreciation
(depreciation) on
pooled investment
accounts 855,840 1,236,090 (89,471) 2,002,459
------------ ------------ -------------- ------------ ------------ ------------
Total investment
income (loss) 1,177,612 1,463,421 (84,161) 2,748,433 135,671 5,440,976
Contributions:
Employers 198,730 190,211 68,061 1,610,292 2,067,294
Participants 514,335 532,658 168,464 1,731,561 2,947,018
Transfers of assets from
(to) other funds 494,892 598,562 (332,970) (740,876) (19,608)
------------ ------------ -------------- ------------ ------------ ------------
Total additions 2,385,569 2,784,852 (180,606) 5,349,410 116,063 10,455,288
------------ ------------ -------------- ------------ ------------ ------------
Payments to or on behalf
of participants 821,794 889,803 344,371 8,193,415 419,309 10,668,692
Administrative expenses 9,105 8,945 2,548 145,495 166,093
------------ ------------ -------------- ------------ ------------ ------------
Total deductions 830,899 898,748 346,919 8,338,910 419,309 10,834,785
------------ ------------ -------------- ------------ ------------ ------------
Net increase (decrease) 1,554,670 1,886,104 (527,525) (2,989,500) (303,246) (379,497)
Net assets available for
benefits:
Beginning of year 4,971,387 3,969,885 1,269,319 49,860,770 2,229,401 62,300,762
------------ ------------ -------------- ------------ ------------ ------------
End of year $6,526,057 $5,855,989 $ 741,794 $46,871,270 $1,926,155 $61,921,265
------------ ------------ -------------- ------------ ------------ ------------
------------ ------------ -------------- ------------ ------------ ------------
</TABLE>
<PAGE>
<PAGE>
GOLDEN COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
Plan participants have the ability to self-direct employee and certain
employer contributions into any of the funds described in Note 1. Net
assets at December 31, 1994 and the changes in net assets available for
benefits for the year then ended were as follows:
<TABLE>
<CAPTION>
Interest
Accumula-
Conservative Aggressive Parent Company tion
Equity Fund Equity Fund Stock Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $ 519 $ 446 $ 1,502 $2,560,063 $ 150,355 $2,712,885
Dividends 398,017 620,907 1,018,924
Depreciation on pooled
investment
accounts (738,220) (580,183) (1,002,931) (2,321,334)
------------ ------------ -------------- ------------ ------------ ------------
Total investment
income (loss) (339,684) 41,170 (1,001,429) 2,560,063 150,355 1,41O,475
Contributions:
Employers 260,298 210,436 93,543 1,911,688 2,475,965
Participants 691,766 563,384 253,490 2,077,572 3,586,212
Transfers of assets (to) from
other funds (373,138) 42,880 277,361 32,669 2O,228
------------ ------------ -------------- ------------ ------------ ------------
Total additions 239,242 857,870 (377,035) 6,581,992 170,583 7,472,652
------------ ------------ -------------- ------------ ------------ ------------
Payments to or on behalf
of participants 844,840 948,979 262,199 7,928,256 170,797 10,155,071
Administrative expenses 7,936 8,068 2,417 146,140 164,561
------------ ------------ -------------- ------------ ------------ ------------
Total deductions 852,776 957,047 264,616 8,074,396 170,797 10,319,632
------------ ------------ -------------- ------------ ------------ ------------
Net decrease (613,534) (99,177) (641,651) (1,492,404) (214) (2,846,980)
Net assets available for
benefits:
Beginning of year 5,584,921 4,069,062 1,910,970 51,353,174 2,229,615 65,147,742
------------ ------------ -------------- ------------ ------------ ------------
End of year $4,971,387 $3,969,885 $1,269,319 $49,860,770 $2,229,401 $62,300,762
------------ ------------ -------------- ------------ ------------ ------------
------------ ------------ -------------- ------------ ------------ ------------
</TABLE>
<PAGE>
<PAGE>
Exhibit 99.2
GOLDEN RETIREMENT
SAVINGS PROGRAM
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1995 AND 1994
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits -
December 31, 1995 and 1994 2
Statements of Changes in Net Assets Available for Benefits -
Years ended December 31, 1995 and 1994 3
Notes to Financial Statements 4-11
ALL FUNDS OF THE PLAN ARE HELD IN A MASTER TRUST. AS A
RESULT, SUPPLEMENTAL SCHEDULES ARE OMITTED BECAUSE THEY ARE
INAPPLICABLE UNDER THE DEPARTMENT OF LABOR'S RULES AND
REGULATIONS.
</TABLE>
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Benefit Plans Administration Committee
Western Publishing Company, Inc.:
We have audited the accompanying statements of net assets available for benefits
of Golden Retirement Savings Program (the "Plan") as of December 31, 1995 and
1994, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1995
and 1994, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
April 26, 1996
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS:
Investments in Western Publishing Group, Inc. Master
Retirement Trust pooled investment accounts (Notes 3 and 4):
Investment funds $6,846,913 $2,895,585
Guaranteed investment contracts 20,462,300 25,166,596
Parent company stock 388,891 451,051
Loans receivable from participants 1,237,741 1,446,781
Accrued income receivable 110,250 95,927
Contributions receivable:
Employer 10,417
Participants 159,579 198,176
----------- -----------
Total assets 29,205,674 30,264,533
----------- -----------
LIABILITIES:
Payable to third parties 31,223 43,791
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $29,174,451 $30,220,742
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Investment income - Increase in equity of allocable portion
of Western Publishing Group, Inc. Master Retirement Trust
pooled investment accounts (Notes 3 and 7):
Interest $ 1,443,674 $ 1,370,732
Dividends 170,546 324,364
Appreciation (depreciation) on pooled investment accounts 578,968 (856,321)
Contributions:
Employer 647,973 709,867
Participants 2,095,167 2,100,388
----------- -----------
Total additions 4,936,328 3,649,030
----------- -----------
Payments to or on behalf of participants 5,903,255 2,355,925
Administrative expenses 79,364 114,450
----------- -----------
Total deductions 5,982,619 2,470,375
----------- -----------
Net (decrease) increase (1,046,291) 1,178,655
Net assets available for benefits:
Beginning of year 30,220,742 29,042,087
----------- -----------
End of year $29,174,451 $30,220,742
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
1. THE PLAN
Golden Retirement Savings Program (the "Plan") is a contributory defined
contribution plan offered to all eligible employees of Western Publishing
Company, Inc. (the "Company") and eligible employees of any United States
subsidiary of the Company which adopts the Plan, with the consent of the
Company, who meet certain eligibility requirements. The Plan became
effective on July 1, 1987 and conforms with the requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA").
An employee becomes a participant of the Plan on specified quarterly entry
dates after meeting the following requirements:
a. Is a member of a group of employees to which the Plan has been and
continues to be extended by the participating company ("employer"),
either unilaterally or through collective bargaining; and
b. Has completed six months of continuous employment (as defined in the
Plan).
Participants, by means of authorized payroll deductions, may elect to make
contributions to the Plan in amounts based on a percentage of
compensation, as defined in the Plan. A participating employee's total
contribution ("income deferral" and "participant") is limited to 16% of
compensation. Income deferral contributions were limited to no more than
$9,240 in 1995 and 1994 in accordance with the Internal Revenue Code
("Code").
Each participating employer contributes to the Plan an amount equal to 50%
of the first 6% of income deferral contributions made by or on behalf of
the participant. Employer contributions are reduced by any forfeitures to
be credited for the applicable period. Forfeitures for 1995 and 1994
totalled $27,475 and $60,837, respectively.
Amounts credited to a participant's account are designated as "Plan
Credits." Contributions made by, or on behalf of, a participant are
invested (in proportions designated by the participant) in one or more of
the following funds:
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Participants
Invested in Fund at
Fund Type December 31, 1995
<S> <C>
Conservative Equity Fund 324
Aggressive Equity Fund 305
Interest Accumulation Fund 1,067
Parent Company Stock Fund 246
</TABLE>
Interest, dividends and net realized and unrealized gains and losses on
Plan investments are allocated to participants' accounts monthly based on
their proportionate share of the applicable fund's assets.
If a participant's employment terminates for any reason other than
retirement, disability or death, the participant is entitled to receive
Plan Credits resulting from employer contributions which are then vested
according to the following schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Continuous of Employer
Employment Contribution Account
<S> <C>
Less than 1 0
1 but less than 2 25
2 but less than 3 50
3 but less than 4 75
4 or more 100
</TABLE>
Balances in a participant's income deferral contribution account,
participant contribution account and prior plan account are fully vested
at all times.
In the event of a participant's retirement, disability or death, Plan
Credits not previously vested, become fully vested and are not subject to
forfeiture, and all Plan Credits become immediately distributable in the
manner described below.
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
When a participant's employment terminates for any reason, all vested Plan
Credits of the participant will be distributed to the participant or, in
the event of death, to the beneficiary by one or both of the following
methods:
a. By a lump-sum distribution of any or all Plan Credits.
b. By applying the cash equivalent of any or all such Plan Credits
towards the purchase of an annuity contract, subject to certain
requirements as defined in the Plan.
A participant may elect to defer distribution of vested Plan Credits until
age 70-1/2.
No more often than once per quarter, a participant may elect to withdraw
all or any portion of the net credit balance in the participant's
contribution account, prior plan account or rollover account. In addition,
effective July 1, 1988 participants may borrow, up to certain limits,
against their account balance. The loan must be repaid over a period not
to exceed 60 months unless the proceeds were used for the purchase of a
primary residence in which case it must be repaid within 240 months (360
months for loans made prior to October 18, 1989). Generally, loan
repayments are made by payroll deduction.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared on the accrual basis for accounting.
Investments - The Plan participates in investment accounts under the
Western Publishing Group, Inc. Master Retirement Trust (the "Master
Trust"). Investment income, realized gains and losses on investment
transactions, expenses and investment appreciation or depreciation on
assets held in the Master Trust are allocated monthly to each fund under
the Plan based on its proportionate share of Master Trust assets. Plan
participation in the Master Trust is adjusted monthly for withdrawals for
benefit payments to Plan participants and for contributions made to the
Plan.
Valuation of Investments - Investments in the Master Trust pooled
investment accounts and parent company stock are valued at fair value.
Investments in guaranteed investment contracts are valued at contract
value. Contract value represents contributions made under the contract
plus interest at the contract rate, less funds used to purchase annuities
and pay administrative expenses.
Expenses - Plan expenses, such as trustee and accounting fees, are charged
to the Plan.
Benefits Payable - Net assets available for benefits included benefits of
$951,469 and $1,107,068 due to participants who have withdrawn from
participation in the Plan as of December 31, 1995 and 1994, respectively.
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. INVESTMENTS IN MASTER TRUST
Investments in the Master Trust at December 31, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Guaranteed investment contracts $ 61,459 $ 77,725
Pooled investment funds 44,157 26,821
Common stock 1,021 1,610
Participant loans 3,368 3,855
-------- --------
Total investments $110,005 $110,011
-------- --------
-------- --------
</TABLE>
The net investment gain of the Master Trust for the years ended December
31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Interest and Dividends $ 5,476 $ 6,129
Appreciation (depreciation) in fair value of investments 5,851 (4,024)
Administrative expenses (405) (453)
-------- -------
Net investment gain $ 10,922 $ 1,652
-------- -------
-------- -------
</TABLE>
The Plan's interest in the Master Trust as a percentage of net assets of
the Master Trust was approximately 26% and 27% at December 31, 1995 and
1994, respectively.
4. INVESTMENTS
Investments in pooled investment funds at December 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------------------------
Units Fair Value Units Fair Value
<S> <C> <C> <C> <C>
Conservative Equity Fund
(Evergreen Total Return Fund) 91,858 $ 1,829,817 88,049 $1,499,470
Aggressive Equity Fund
(Evergreen Fund) 109,417 1,732,076 115,236 1,386,290
Bankers Trust Pyramid Directed
Account Cash Fund 3,285,020 3,285,020 9,825 9,825
---------- ----------
$6,846,913 $2,895,585
---------- ----------
---------- ----------
</TABLE>
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Investments in guaranteed investment contracts at December 31, 1995 and
1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Principal Mutual Life Insurance Company
Contract #GA4-6187-2 $ 3,255,475 $ 3,915,676
John Hancock Mutual Life Insurance Company
Contract #GAC-7313-1 3,963,771
New York Life Insurance Company
Contract #GA-06701-2-2 3,626,593
Allstate Life Insurance Company
Group Annuity Contract #GA-5343-2 3,617,030
New York Life Insurance Company
Contract #GA-06701-2 1,557,061 1,879,800
Metropolitan Life Insurance Company
Contract #GA-13981-169 4,598,941 3,470,292
Metropolitan Life Insurance Company
Contract #GA-13823-169 682,122 1,264,372
Hartford Life Insurance Company
Contract #GA-10145-A 2,863,962 3,429,062
Continental Assurance Company
Contract #GP-13137-016 4,408,975
New York Life Insurance Company
Contract #GA-06701-3-2 3,095,764
----------- -----------
$20,462,300 $25,166,596
=========== ===========
</TABLE>
Investments in Parent Company Stock at December 31, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------------------------
Shares Fair Value Shares Fair Value
<S> <C> <C> <C> <C>
Western Publishing Group, Inc.
Common Stock 49,383 $ 388,891 47,479 $451,051
--------- --------
--------- --------
</TABLE>
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Transactions in the Common Stock of Western Publishing Group, Inc. were as
follows:
<TABLE>
<CAPTION>
1995 1994
---------------- ----------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Aggregate purchases 8,300 $87,722 14,411 $175,595
------- --------
------- --------
Aggregate sales and
distributions to participants 6,396 $62,960 16,965 $267,499
------- --------
------- --------
</TABLE>
5. INTERNAL REVENUE SERVICE STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated November 14, 1995, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections
of the Code. The Plan has been amended since receiving the determination
letter. However, the plan administrator believes that the plan is
currently designed and being operated in compliance with the applicable
requirements of the Code. Therefore, the plan administrator believes that
the Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
6. TERMINATION OF THE PLAN
In the event that the Plan is terminated at some future time, each
participant's account will become fully vested and will be distributed in
accordance with provisions of the Plan.
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
7. CHANGES IN NET ASSETS BY FUND:
Plan participants have the ability to self-direct employee and certain
employer contributions into any of the funds described in Note 1. Net
assets at December 31, 1995 and the changes in net assets available for
benefits for the year then ended were as follows:
<TABLE>
<CAPTION>
Interest
Conservative Aggressive Parent Company Accumulation
Equity Fund Equity Fund Stock Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $ 433 $ 992 $ 1,358,618 $ 83,631 $ 1,443,674
Dividends $ 94,971 75,575 170,546
Appreciation
(depreciation) on
pooled investment
accounts 252,602 413,288 (86,922) 578,968
------------ ----------- -------------- ------------ ---------- -----------
Total investment
income (loss) 347,573 489,296 (85,930) 1,358,618 83,631 2,193,188
Contributions:
Employer 63,487 51,162 27,944 505,380 647,973
Participants 189,090 158,183 76,521 1,671,373 2,095,167
Transfers of assets
(to) from other
funds (138,663) (252,174) 70,109 259,897 60,831
------------ ----------- -------------- ------------ ---------- -----------
Total additions 461,487 446,467 88,644 3,795,268 144,462 4,936,328
------------ ----------- -------------- ------------ ---------- -----------
Payments to or on behalf
of participants 122,934 157,331 115,219 5,175,115 332,656 5,903,255
Administrative
expenses 2,687 2,991 1,992 71,694 79,364
------------ ----------- -------------- ------------ ---------- -----------
Total deductions 125,621 160,322 117,211 5,246,809 332,656 5,982,619
------------ ----------- -------------- ------------ ---------- -----------
Net increase
(decrease) 335,866 286,145 (28,567) (1,451,541) (188,194) (1,046,29l)
Net assets available
for benefits:
Beginning of year 1,488,563 1,398,960 470,020 25,403,922 1,459,277 30,220,742
------------ ----------- -------------- ------------ ---------- -----------
End of year $1,824,429 $1,685,105 $441,453 $ 23,952,381 $1,271,083 $29,174,451
------------ ----------- -------------- ------------ ---------- -----------
------------ ----------- -------------- ------------ ---------- -----------
</TABLE>
<PAGE>
<PAGE>
GOLDEN RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
Net assets at December 31, 1994 and the changes in net assets available
for benefits for the year then ended were as follows:
<TABLE>
<CAPTION>
Interest
Conservative Aggressive Parent Company Accumulation
Equity Fund Equity Fund Stock Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $ 138 $ 140 $ 743 $ 1,271,978 $ 97,733 $ 1,370,732
Dividends 108,427 215,937 324,364
Depreciation on
pooled investment
accounts (201,820) (208,624 ) (445,877) (856,321)
------------ ----------- -------------- ------------ ---------- -----------
Total investment
(loss) income (93,255) 7,453 (445,134) 1,271,978 97,733 838,775
Contributions:
Employer 70,740 50,310 34,771 554,046 709,867
Participants 216,268 170,599 112,896 1,600,625 2,100,388
Transfers of assets
(to) from other
funds (119,647) (39,225 ) (24,670) 51,785 131,757
------------ ----------- -------------- ------------ ---------- -----------
Total additions 74,106 189,137 (322,137) 3,478,434 229,490 3,649,030
------------ ----------- -------------- ------------ ---------- -----------
Payments to or on
behalf of
participants 54,692 85,748 58,247 1,961,833 195,405 2,355,925
Administrative
expenses 3,758 3,823 2,065 104,804 114,450
------------ ----------- -------------- ------------ ---------- -----------
Total deductions 58,450 89,571 60,312 2,066,637 195,405 2,470,375
------------ ----------- -------------- ------------ ---------- -----------
Net increase
(decrease) 15,656 99,566 (382,449) 1,411,797 34,085 1,178,655
Net assets available
for benefits:
Beginning of year 1,472,907 1,299,394 852,469 23,992,125 1,425,192 29,042,087
------------ ----------- -------------- ------------ ---------- -----------
End of year $1,488,563 $1,398,960 $470,020 $ 25,403,922 $l,459,277 $30,220,742
------------ ----------- -------------- ------------ ---------- -----------
------------ ----------- -------------- ------------ ---------- -----------
</TABLE>
<PAGE>
<PAGE>
Exhibit 99.3
PENN CORPORATION COMPREHENSIVE
SECURITY PROGRAM
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1995 AND 1994 AND
INDEPENDENT AUDITORS' REPORT
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits -
December 31, 1995 and 1994 2
Statements of Changes in Net Assets Available for Benefits -
Years Ended December 31, 1995 and 1994 3
Notes to Financial Statements 4-11
ALL FUNDS OF THE PLAN ARE HELD IN A MASTER TRUST. AS A
RESULT, SUPPLEMENTAL SCHEDULES ARE OMITTED BECAUSE THEY ARE
INAPPLICABLE UNDER THE DEPARTMENT OF LABOR'S RULES AND
REGULATIONS.
</TABLE>
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Benefit Plans Administration Committee
Penn Corporation:
We have audited the accompanying statements of net assets available for benefits
of Penn Corporation Comprehensive Security Program (the "Plan") as of December
31, 1995 and 1994, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1995
and 1994, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
April 26, 1996
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS:
Investments in Western Publishing Group, Inc. Master Retirement Trust pooled
investment accounts (Notes 3 and 4):
Investment funds $ 830,563 $ 423,031
Guaranteed investment contracts 1,392,359 2,925,750
Parent company stock 31,405 64,609
Loans receivable from participants 81,580 85,668
Accrued income receivable 7,845 13,524
Contributions receivable:
Employer 117,741 151,552
Participants 19,980 21,184
---------- ----------
Total assets 2,481,473 3,685,318
---------- ----------
LIABILITIES:
Payable to third parties 2,795 4,573
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $2,478,678 $3,680,745
---------- ----------
---------- ----------
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Investment income -- Increase in equity of allocable portion of Western Publishing
Group, Inc. Master Retirement Trust pooled investment accounts (Notes 3 and 7):
Interest $ 105,874 $ 158,146
Dividends 19,846 49,714
Appreciation (depreciation) on pooled investment accounts 68,958 (137,350)
Contributions:
Employer 114,127 150,521
Participants 277,117 482,664
---------- ----------
Total additions 585,922 703,695
---------- ----------
Payments to or on behalf of participants 1,781,738 651,549
Administrative expenses 6,251 10,724
---------- ----------
Total deductions 1,787,989 662,273
---------- ----------
Net (decrease) increase (1,202,067) 41,422
Net assets available for benefits:
Beginning of year 3,680,745 3,639,323
---------- ----------
End of year $2,478,678 $3,680,745
---------- ----------
---------- ----------
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
1. THE PLAN
Penn Corporation Comprehensive Security Program (the "Plan") is a
contributory defined contribution plan offered to certain employees of
Penn Corporation (the "Company"), a wholly-owned subsidiary of Western
Publishing Group, Inc., and eligible employees of any other United States
corporation that is a member of the controlled group of corporations of
which Penn Corporation is a member, which adopts the Plan, with the
consent of the Company, who meet certain eligibility requirements. The
Plan became effective on January 1, 1987 and conforms with the
requirements of the Employee Retirement Income Security Act of 1974
("ERISA").
An employee becomes a participant of the Plan on specified quarterly entry
dates after meeting the following requirements:
a. Is a salaried employee or a member of a group or class of employees
to which the Plan has been extended by the Board of Directors of the
employer; and
b. Is not a member of a collective bargaining unit of employees
represented by a collective bargaining representative, except to the
extent that an agreement between the participating company
("employer") and such representative extends the Plan to such unit
of employees; and
c. Has completed six months of continuous employment (as defined in the
Plan).
Participants, by means of authorized payroll deductions, may elect to make
contributions to the Plan in amounts based on a percentage of
compensation, as defined in the Plan. A participating employee's total
contribution ("income deferral" and "voluntary participant") is limited to
16% of compensation. Income deferral contributions were limited to $9,240
for 1995 and 1994 in accordance with the Internal Revenue Code ("Code").
The Company contributes to the Plan an amount equal to 3% of the aggregate
compensation of participants entitled to share in the contribution for
that year. Employer contributions are reduced by any forfeitures to be
credited for the applicable period. Forfeitures for 1995 and 1994 totaled
$11,714 and $21,058, respectively. The employers' contributions are always
invested in the Interest Accumulation Fund.
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Amounts credited to a participant's account are designated as
"Plan Credits." Contributions made by, or on behalf of, a participant,
are invested (in proportions designated by the participant) in one or more
of the following funds:
<TABLE>
<CAPTION>
NUMBER OF PARTICIPANTS
INVESTED IN FUND AT
FUND TYPE DECEMBER 31, 1995
<S> <C>
Conservative Equity Fund 49
Aggressive Equity Fund 50
Interest Accumulation Fund 149
Parent Company Stock Fund 29
</TABLE>
Interest, dividends and net realized and unrealized gains and losses
on Plan investments are allocated to participants' accounts based
on their proportionate share of the applicable fund's assets.
If a participant's employment terminates for any reason other than
retirement, disability or death, the participant is entitled to
receive Plan Credits resulting from employer contributions which are then
vested according to the following schedule:
<TABLE>
<CAPTION>
VESTED PERCENTAGE
YEARS OF CONTINUOUS OF EMPLOYER
EMPLOYMENT CONTRIBUTION ACCOUNT
<S> <C>
Less than 1 0
1 but less than 2 25
2 but less than 3 50
3 but less than 4 75
4 or more 100
</TABLE>
Balances in a participant's income deferral contribution account and
voluntary participant account are fully vested at all times.
In the event of a participant's retirement, disability or death, Plan
Credits not previously vested, become fully vested and are not subject to
forfeiture, and all Plan Credits become immediately distributable in the
manner described below.
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
When a participant's employment terminates for any reason, all vested Plan
Credits of the participant may be distributed to the participant or, in
the event of death, to the beneficiary by one or both of the following
methods:
a. By a lump-sum distribution of any or all Plan Credits.
b. By applying the cash equivalent of any or all such Plan Credits
towards the purchase of an annuity contract, subject to certain
requirements as defined in the Plan.
A participant may elect to defer distribution of vested Plan Credits until
age 70-1/2.
No more often than once per quarter, a participant may elect to withdraw
all or any portion of the net credit balance in the voluntary participant
contribution account or rollover account. In addition, participants may
borrow, up to certain limits, against their account balance. The loan must
be repaid over a period not to exceed 60 months unless the proceeds were
used for the purchase of a primary residence in which case it must be
repaid within 360 months. Generally, loan repayments are made by payroll
deduction.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared on the accrual basis of accounting.
Investments - The Plan participates in investment accounts under the
Western Publishing Group, Inc. Master Retirement Trust (the "Master
Trust"). Investment income, realized gains and losses on investment
transactions, expenses and investment appreciation or depreciation on
assets held in the Master Trust are allocated monthly to each fund under
the Plan based on its proportionate share of Master Trust assets. Plan
participation in the Master Trust is adjusted monthly for withdrawals for
benefit payments to Plan participants and annually for employer
contributions made to the Plan.
Valuation of Investments - Investments in the Master Trust pooled
investment accounts and parent company stock are valued at fair value.
Investments in guaranteed investment contracts are valued at contract
value. Contract value represents contributions made under the contract
plus interest at the contract rate, less funds used to purchase annuities
and pay administrative expenses.
Expenses - Plan expenses, such as trustee and accounting fees, are
chargeable to the Plan. During 1995 and 1994, $6,251 and $10,724,
respectively, of such expenses were paid by the Plan.
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Benefits Payable - Net assets available for benefits included benefits of
$88,587 and $1,476,859 due to participants who have withdrawn from
participation in the Plan as of December 31, 1995 and 1994, respectively.
3. INVESTMENTS IN MASTER TRUST
Investments in the Master Trust at December 31, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Guaranteed investment contracts $ 61,459 $ 77,725
Pooled investment funds 44,157 26,821
Common stock 1,021 1,610
Participant loans 3,368 3,855
-------- --------
Total investments $110,005 $110,011
-------- --------
-------- --------
</TABLE>
The net investment gain of the Master Trust for the years ended December
31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Interest and Dividends $ 5,476 $ 6,129
Appreciation (depreciation) in fair value of investments 5,851 (4,024)
Administrative expenses (405) (453)
-------- --------
Net investment gain $ 1O,922 $ 1,652
-------- --------
-------- --------
</TABLE>
The Plan's interest in the Master Trust as a percentage of net assets of
the Master Trust was approximately 2% and 3% at December 31, 1995 and
1994, respectively.
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
4. INVESTMENTS
Investments in pooled investment funds at December 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------- ---------------------
Units Fair Value Units Fair Value
<S> <C> <C> <C> <C>
Conservative Equity Fund (Evergreen Total Return Fund) 9,252 $184,300 11,703 $199,306
Aggressive Equity Fund (Evergreen Fund) 17,132 271,198 18,368 220,963
Bankers Trust Pyramid Directed Account Cash Fund 375,065 375,O65 2,762 2,762
---------- ----------
$830,563 $423,031
---------- ----------
---------- ----------
</TABLE>
Investments in guaranteed investment contracts at December 31, 1995 and
1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Principal Mutual Life Insurance Company Contract #GA4-6187-3 $ 285,613 $ 608,537
John Hancock Mutual Life Insurance Company Contract #GAC-7313-2 794,214
New York Life Insurance Company Contract #GA-06701-2-3 211,465
Allstate Life Insurance Company Group Annuity Contract #GA-5343-3 181,860
New York Life Insurance Company Contract #GA-06701-3 90,145 190,114
Metropolitan Life Insurance Company Contract #GA-13981-269 485,141 412,737
Metropolitan Life Insurance Company Contract #GA-13823-269 40,443 140,382
Hartford Life Insurance Company Contract #GA-10145-AZ 183,196 386,441
Continental Assurance Company Contract #GP-13137-026 216,837
New York Life Insurance Company Contract #GA-06701-3-3 90,984
---------- ----------
$1,392,359 $2,925,750
---------- ----------
---------- ----------
</TABLE>
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Investments in Parent Company Stock at December 31, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>
1995 1994
--------------------- ---------------------
Shares Fair Value Shares Fair Value
<S> <C> <C> <C> <C>
Western Publishing Group Inc. Common Stock 3,988 $ 31,405 6,801 $ 64,609
---------- ----------
---------- ----------
</TABLE>
Transactions in the Common Stock of Western Publishing Group, Inc. were as
follows:
<TABLE>
<CAPTION>
1995 1994
------------------- -------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Aggregate purchases 2,437 $ 25,151 1,510 $ 17,997
-------- --------
-------- --------
Aggregate sales 5,250 $ 46,075 3,297 $ 52,502
-------- --------
-------- --------
</TABLE>
5. INTERNAL REVENUE SERVICE STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated June 20, 1995, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections
of the Code. The Plan has been amended since receiving the determination
letter. However, the plan administrator believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code. Therefore, the plan administrator believes that
the Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
6. TERMINATION OF THE PLAN
In the event that the Plan is terminated at some future time, each
participant's account will become fully vested and will be distributed in
accordance with provisions of the Plan.
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
7. CHANGES IN NET ASSETS BY FUND:
Plan participants have the ability to self-direct employee contributions
into any of the funds described in Note 1. Net assets at December 31, 1995
and the changes in net assets available for benefits for the year then
ended were as follows:
<TABLE>
<CAPTION>
Interest
Conservative Aggressive Parent Company Accumulation
Equity Fund Equity Fund Stock Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $ 58 $ 416 $ 99,852 $ 5,548 $ 105,874
Dividends $ 9,717 10,129 19,846
Appreciation
(depreciation) on
pooled investment
accounts 25,845 55,393 (12,280) 68,958
------------ ----------- -------------- ------------ ---------- -----------
Total investment
income (loss) 35,562 65,580 (11,864) 99,852 5,548 194,678
Contributions:
Employer 114,127 114,127
Participants 44,220 48,126 14,684 170,087 277,117
Transfers of assets
(to) from other
funds (3,407) 12,270 393 (8,777) (479)
------------ ----------- -------------- ------------ ---------- -----------
Total additions 76,375 125,976 3,213 375,289 5,069 585,922
------------ ----------- -------------- ------------ ---------- -----------
Payments to or on
behalf of
participants 90,035 73,876 25,188 1,583,565 9,074 1,781,738
Administrative
expenses 275 401 245 5,330 6,251
------------ ----------- -------------- ------------ ---------- -----------
Total deductions 90,310 74,277 25,433 1,588,895 9,074 1,787,989
------------ ----------- -------------- ------------ ---------- -----------
Net (decrease)
increase (13,935) 51,699 (22,220) (1,213,606) (4,005) (1,202,067)
Net assets available
for benefits:
Beginning of year 203,052 223,941 69,332 3,102,367 82,053 3,680,745
------------ ----------- -------------- ------------ ---------- -----------
End of year $ 189,117 $ 275,640 $ 47,112 $ 1,888,761 $ 78,048 $ 2,478,678
------------ ----------- -------------- ------------ ---------- -----------
------------ ----------- -------------- ------------ ---------- -----------
</TABLE>
<PAGE>
<PAGE>
PENN CORPORATION COMPREHENSIVE SECURITY PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
Plan participants have the ability to self-direct employee contributions
into any of the funds described in Note 1. Net assets at December 31, 1994
and the changes in net assets available for benefits for the year then
ended were as follows:
<TABLE>
<CAPTION>
Interest
Conservative Aggressive Parent Company Accumulation
Equity Fund Equity Fund Stock Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $ 19 $ 21 $ 120 $ 152,846 $ 5,140 $ 158,146
Dividends 15,241 34,473 49,714
Depreciation on
pooled investment
accounts (27,193) (32,968 ) (77,189) (137,350)
------------ ----------- -------------- ------------ ---------- -----------
Total investment
income (loss) (11,933) 1,526 (77,069) 152,846 5,140 70,510
Contributions:
Employer 150,521 150,521
Participants 87,608 82,244 35,450 277,362 482,664
Transfers of assets
(to) from other
funds (9,455) (2,613 ) (34,623) 37,003 9,688
------------ ----------- -------------- ------------ ---------- -----------
Total additions 66,220 81,157 (76,242) 617,732 14,828 703,695
------------ ----------- -------------- ------------ ---------- -----------
Payment to or on
behalf of
participants 43,030 32,075 16,127 548,525 11,792 651,549
Administrative expenses 182 196 584 9,762 10,724
------------ ----------- -------------- ------------ ---------- -----------
Total deductions 43,212 32,271 16,711 558,287 11,792 662,273
------------ ----------- -------------- ------------ ---------- -----------
Net increase
(decrease) 23,008 48,886 (92,953) 59,445 3,036 41,422
Net assets available
for benefits:
Beginning of year 180,044 175,055 162,285 3,042,922 79,017 3,639,323
------------ ----------- -------------- ------------ ---------- -----------
End of year $203,052 $223,941 $ 69,332 $3,102,367 $82,053 $3,680,745
------------ ----------- -------------- ------------ ---------- -----------
------------ ----------- -------------- ------------ ---------- -----------
</TABLE>
