SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------
FORM 11-K
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1998
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 0-18886
A. HS Resources, Inc. 401(k) & Profit Sharing Plan
and
HS Resources, Inc. Profit Sharing Plan
B. HS Resources, Inc.
One Maritime Plaza, 15th Floor
San Francisco, CA 94111
<PAGE>
EXPLANATORY NOTE
Effective July 1, 1990 and June 30, 1989, HS Resources, Inc. (the "Company")
established the HS Resources, Inc. Employee Investment 401(k) Plan (the "401(k)
Plan") and the HS Resources, Inc. Profit Sharing Plan (the "Profit Sharing
Plan"), respectively. The 401(k) Plan was amended and restated effective August
1, 1998. The amendment merged the Profit Sharing Plan into the 401(k) Plan and
changed the name of the 401(k) Plan to the HS Resources, Inc. 401(k) & Profit
Sharing Plan (the "Plan").
Because the Profit Sharing Plan was merged into the 401(k) Plan as of August 1,
1998, this report includes a set of financial statements and schedules for the
merged 401(k) & Profit Sharing Plan as of December 31, 1998 and the 401(k) Plan
as of December 31, 1997. The second set of financial statements and schedules
shows the separate assets of the Profit Sharing Plan as of August 1, 1998, the
date of merger, and as of the prior December 31, 1997. The assets of the Profit
Sharing Plan immediately prior to transfer on August 1, 1998, pursuant to the
merger, are set forth in the financial statement entitled "HS Resources,
Inc.--Profit Sharing Plan--Statement of Changes in Net Assets Available for
Benefits with Fund Information for the Period Ended August 1, 1998" with respect
to the line item entitled "Merger into HS Resources, Inc. 401(k) and Profit
Sharing Plan."
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<PAGE>
HS RESOURCES, INC. 401(k) & PROFIT SHARING PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
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<PAGE>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
INDEX
Page(s)
-------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 5
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits with
Fund Information as of December 31, 1998 6
Statement of Net Assets Available for Benefits with
Fund Information as of December 31, 1997 7
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1998 8-10
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES 11-16
SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I-Item 27a--Schedule of Assets Held for
Investment Purposes as of December 31, 1998 17-18
Schedule II-Item 27d--Schedule of Reportable Transactions
for the Year Ended December 31, 1998 19
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
HS Resources, Inc. 401(k) & Profit Sharing Plan:
We have audited the accompanying statements of net assets available for benefits
of HS RESOURCES, INC. 401(k) & PROFIT SHARING PLAN (the "Plan") as of
December 31, 1998 and 1997, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1998. 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, 1998 and 1997, and the changes in net assets available for benefits
for the year ended December 31, 1998 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 and reportable transactions 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. These 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 plan
benefits and changes in net assets available for plan 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.
/s/ ARTHUR ANDERSEN LLP
Denver, Colorado,
June 29, 1999.
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<PAGE>
<TABLE>
<CAPTION>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
Participant-Directed
---------------------------------------------------------------------------------------------
American
AAdvantage
Inter- DFA
national U.S. HS Oakmark Pimco Schwab Schwab T. Rowe
Equity Small Resources Inter- Total Stable Value Price
Institu- Cap Common national Return Value Advantage Small-Cap
ional Value Stock Fund Fund Fund Fund Stock
---------- -------- ---------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Cash and cash equivalents $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Money market funds -- -- -- -- -- -- 344,911 --
Mutual funds 201,804 82,720 -- 36,499 255,158 -- -- 952,079
Common/collective trust fund -- -- -- -- -- 176,942 -- --
HS Resources common stock -- -- 824,721 -- -- -- -- --
Self-directed brokerage account -- -- -- -- -- -- -- --
Loans to participants -- -- -- -- -- -- -- --
---------- -------- ---------- -------- -------- -------- -------- ----------
Total investments 201,804 82,720 824,721 36,499 255,158 176,942 344,911 952,079
---------- -------- ---------- -------- -------- -------- -------- ----------
Receivables:
Employer -- -- 846,184 -- -- -- -- --
---------- -------- ---------- -------- -------- -------- -------- ----------
Total receivables -- -- 846,184 -- -- -- -- --
---------- -------- ---------- -------- -------- -------- -------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS: $ 201,804 $ 82,720 $1,670,905 $ 36,499 $255,158 $176,942 $344,911 $ 952,079
========== ======== ========== ======== ======== ======== ======== ==========
Participant-Directed
---------------------------------------------------------
Schwab
Treasury Cash and
Vanguard Personal U.S. Cash Loans to
Vanguard Vanguard Windsor II Choice Money Equiv- Partic-
Index 500 Wellington Fund Retirement Market alents ipants Total
---------- ---------- ---------- ---------- -------- --------- -------- ----------
ASSETS:
Investments, at fair value:
Cash and cash equivalents $ -- $ -- $ -- $ 79,721 $ -- $ 8,518 $ -- $ 88,239
Money market funds -- -- -- -- 4,143 -- -- 349,054
Mutual funds 1,008,574 776,800 2,572,042 195,519 -- -- -- 6,081,195
Common/collective trust fund -- -- -- -- -- -- -- 176,942
HS Resources common stock -- -- -- -- -- -- -- 824,721
Self-directed brokerage account -- -- -- 57,550 -- -- -- 57,550
Loans to participants -- -- -- -- -- -- 161,910 161,910
---------- -------- ---------- -------- -------- -------- -------- ----------
Total investments 1,008,574 776,800 2,572,042 332,790 4,143 8,518 161,910 7,739,611
---------- -------- ---------- -------- -------- -------- -------- ----------
Receivables:
Employer -- -- -- -- -- 187,918 -- 1,034,102
---------- -------- ---------- -------- -------- -------- -------- ----------
Total receivables -- -- -- -- -- 187,918 -- 1,034,102
---------- -------- ---------- -------- -------- -------- -------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS: $1,008,574 $776,800 $2,572,042 $332,790 $ 4,143 $196,436 $161,910 $8,773,713
========== ======== ========== ======== ======== ======== ======== ==========
The accompanying notes to financial statements are an integral part of this statement
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
(FORMERLY, THE HS RESOURCES, INC. EMPLOYEE INVESTMENT 401(k) PLAN)
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
Participant-Directed
---------------------------------------------------------------------------------------------
Money Conser- Balanced Con-
Market GIC vative Value serva- Inter- Emerg- HS Resources
Port- Port- Bond Port- tive Value Growth national ing Common
folio folio Fund folio Equity Equity Value Equity Growth Stock
-------- ------- -------- -------- -------- ---------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at
fair value -
Investments in
HS Resources,
Inc. Master
Trust (Note 5) $280,208 $88,405 $159,420 $524,244 $870,893 $1,005,830 $484,303 $147,527 $716,476 $ 924,218
Loans to
participants -- -- -- -- -- -- -- -- -- --
-------- ------- -------- -------- -------- ---------- -------- -------- -------- ----------
Total
investments 280,208 88,405 159,420 524,244 870,893 1,005,830 484,303 147,527 716,476 924,218
-------- ------- -------- -------- -------- ---------- -------- -------- -------- ----------
Receivables
Employee -- -- -- -- 167 167 167 -- 167 --
Employer -- -- -- -- -- -- -- -- -- 589,498
Other -- -- -- -- -- -- -- -- -- 4,175
-------- ------- -------- -------- -------- ---------- -------- -------- -------- ----------
Total
receivables -- -- -- -- 167 167 167 -- 167 593,673
-------- ------- -------- -------- -------- ---------- -------- -------- -------- ----------
NET ASSETS
AVAILABLE
FOR BENEFITS: $280,208 $88,405 $159,420 $524,244 $871,060 $1,005,997 $484,470 $147,527 $716,643 $1,517,891
======== ======= ======== ======== ======== ========== ======== ======== ======== ==========
Cash and Loans
Cash to
Equiva- Parti-
lents cipants Total
-------- ------- ---------
<S> <C> <C> <C>
ASSETS:
Investments, at
fair value -
Investments in
HS Resources,
Inc. Master
Trust (Note 5) $20,965 $ -- $5,222,489
Loans to
participants -- 149,838 149,838
------- -------- ----------
Total
investments 20,965 149,838 5,372,327
------- -------- ----------
Receivables
Employee -- -- 668
Employer 40,000 -- 629,498
Other 71 -- 4,246
------- -------- ----------
Total
receivables 40,071 -- 634,412
------- -------- ----------
NET ASSETS
AVAILABLE
FOR BENEFITS: $ 61,036 $149,838 $6,006,739
======== ======== ==========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
Participant-Directed
--------------------------------------------------------------------------------------------------
Conservative Balanced
Money Market GIC Bond Value Conservative Value Growth International Emerging
Portfolio Portfolio Fund Portfolio Equity Equity Value Equity Growth
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income
Interest and dividends $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Net realized and unrealized
gain (loss) on investments -- -- -- -- -- -- -- -- --
Net investment increase (loss)
from HS Resources, Inc.
Master Trust (Note 5) 8,564 3,354 5,322 60,009 98,040 155,582 69,630 20,119 31,313
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
Total investment income 8,564 3,354 5,322 60,009 98,040 155,582 69,630 20,119 31,313
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
CONTRIBUTIONS:
Employer -- -- -- -- -- -- -- -- --
Employee 12,553 19,959 27,472 55,484 67,071 96,261 64,101 27,086 74,471
Rollover 40 2,512 290 24,911 10,047 10,047 39,758 -- 36,973
Loan repayments -- -- -- -- -- -- -- -- --
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
Total contributions 12,593 22,471 27,762 80,395 77,118 106,308 103,859 27,086 111,444
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
Total additions 21,157 25,825 33,084 140,404 175,158 261,890 173,489 47,205 142,757
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to participants ( 72,830) ( 2,766) ( 6,087) ( 34,241) ( 69,656) ( 123,672) ( 50,369) ( 27,337) ( 104,871)
Loans taken -- -- -- -- -- -- -- -- --
Administrative expenses -- -- -- -- -- -- -- -- --
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
Total deductions ( 72,830) ( 2,766) ( 6,087) ( 34,241) ( 69,656) ( 123,672) ( 50,369) ( 27,337) ( 104,871)
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
NET INCREASE (DECREASE) ( 51,673) 23,059 26,997 106,163 105,502 138,218 123,120 19,868 37,886
TRANSFERS:
Net Transfers between funds 54,400 ( 20,850) 230 5,668 ( 19,824) 1,118 53,976 ( 5,487) 27,809
Transferred assets from HS
Resources, Inc. Master Trust
and Profit Sharing Plan
(Note 1) ( 282,935) ( 90,614) ( 186,647) ( 636,075) ( 956,738) ( 1,145,333) ( 661,566) ( 161,908) ( 782,338)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period 280,208 88,405 159,420 524,244 871,060 1,005,997 484,470 147,527 716,643
--------- -------- --------- --------- --------- ----------- --------- --------- ---------
End of period $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
========= ======== ========= ========= ========= =========== ========= ========= =========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
Participant-Directed
-------------------------------------------------------------------------------------------------
American
AAdvantage
Inter- DFA
national U.S. HS Oakmark Pimco Schwab Schwab T.Rowe
Equity Small Resources Inter- Total Stable Value Price
Institu- Cap Common national Return Value Advantage Small-Cap
tional Value Stock Fund Fund Fund Fund Stock
--------- -------- ----------- -------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income
Interest and dividends $ 9,831 $ 7,267 $ -- $ 3,146 $ 14,031 $ 315 $ 8,854 $ 27,433
Net realized and unrealized
gain (loss) on investments ( 9,452) 19 ( 382,802) ( 539) ( 5,209) 3,273 -- 5,693
Net investment increase (loss)
from HS Resources, Inc.
Master Trust (Note 5) -- -- ( 271,082) -- -- -- -- --
--------- -------- ----------- -------- --------- --------- --------- ----------
Total investment income 379 7,286 ( 653,884) 2,607 8,822 3,588 8,854 33,126
--------- -------- ----------- -------- --------- --------- --------- ----------
CONTRIBUTIONS:
Employer -- -- 806,184 -- -- -- -- --
Employee 48,723 68,415 40,721 32,331 25,331 31,799 13,285 75,409
Rollover 4,714 -- 176 -- 1,886 -- -- 10,755
Loan repayments 747 2,484 -- 1,920 814 1,757 9 2,291
--------- -------- ----------- -------- --------- --------- --------- ----------
Total contributions 54,184 70,899 847,081 34,251 28,031 33,556 13,294 88,455
--------- -------- ----------- -------- --------- --------- --------- ----------
Total additions 54,563 78,185 193,197 36,858 36,853 37,144 22,148 121,581
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to participants ( 6,197) ( 4,633) ( 108,879) ( 409) ( 277) ( 2,325) ( 1,463) ( 6,077)
Loans taken ( 812) ( 235) ( 1,852) ( 192) ( 11,349) ( 1,935) ( 11,076) ( 2,782)
Administrative expenses ( 109) ( 45) ( 496) ( 19) ( 206) ( 103) ( 251) ( 545)
--------- -------- ----------- -------- --------- --------- --------- ----------
Total deductions ( 7,118) ( 4,913) ( 111,227) ( 620) ( 11,832) ( 4,363) ( 12,790) ( 9,404)
--------- -------- ----------- -------- --------- --------- --------- ----------
NET INCREASE (DECREASE) 47,445 73,272 81,970 36,238 25,021 32,781 9,358 112,177
TRANSFERS:
Net transfers between funds ( 33,184) 9,448 ( 50,761) 261 27,366 42,677 18,741 ( 39,569)
Transferred assets from HS
Resources, Inc. Master Trust and
Profit-Sharing Plan (Note 1) 187,543 -- 121,805 -- 202,771 101,484 316,812 879,471
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period -- -- 1,517,891 -- -- -- -- --
--------- -------- ----------- -------- --------- --------- --------- ----------
End of period $ 201,804 $ 82,720 $ 1,670,905 $ 36,499 $ 255,158 $ 176,942 $ 344,911 $ 952,079
========= ======== =========== ======== ========= ========= ========= ==========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
Participant-Directed
--------------------------------------------------------------
Vanguard Vanguard Personal Schwab Cash Loans to
Index Vanguard Windsor Choice Treasury U.S. and Cash Partic-
500 Wellington II Fund Retirement Money Market Equivalents ipants Total
---------- --------- ---------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income
Interest and dividends $ 9,769 $ 74,536 $ 241,914 $ 19,929 $ 65 $ -- $ 7,018 $ 424,108
Net realized and unrealized
gain (loss) on investments 122,229 ( 27,811) ( 42,995) -- -- -- -- ( 337,594)
Net investment increase (loss)
from HS Resources, Inc.
Master Trust (Note 5) -- -- -- -- -- 59 -- 180,910
---------- --------- ---------- -------- -------- -------- -------- ----------
Total investment income 131,998 46,725 198,919 19,929 65 59 7,018 267,424
---------- --------- ---------- -------- -------- -------- -------- ----------
CONTRIBUTIONS:
Employer -- -- -- -- -- 147,918 -- 954,102
Employee 154,896 65,443 110,698 25,767 16,724 -- -- 1,154,000
Rollover 10,755 9,428 943 222,390 -- -- -- 385,625
Loan repayments 3,166 761 1,568 5,964 37 -- ( 21,518) --
---------- --------- ---------- -------- -------- -------- -------- ----------
Total contributions 168,817 75,632 113,209 254,121 16,761 147,918 ( 21,518) 2,493,727
---------- --------- ---------- -------- -------- -------- -------- ----------
Total additions 300,815 122,357 312,128 274,050 16,826 147,977 ( 14,500) 2,761,151
---------- --------- ---------- -------- -------- -------- -------- ----------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to participants ( 20,181) ( 5,771) ( 13,006) -- -- ( 724) ( 10,113) ( 671,884)
Loans taken ( 3,869) ( 7,104) ( 8,080) ( 1,722) 9 -- 50,999 --
Administrative expenses ( 531) ( 473) ( 1,370) ( 66) -- -- -- ( 4,214)
---------- --------- ---------- -------- -------- -------- -------- ----------
Total deductions ( 24,581) ( 13,348) ( 22,456) ( 1,788) 9 ( 724) 40,886 ( 676,098)
---------- --------- ---------- -------- -------- -------- -------- ----------
NET INCREASE (DECREASE) 276,234 109,009 289,672 272,262 16,835 147,253 26,386 2,085,053
TRANSFERS:
Net transfers between funds 12,946 ( 7,182) ( 87,582) 60,528 ( 12,692) ( 14,058) ( 23,979) --
Transferred assets from HS
Resources, Inc. Master Trust and
Profit-Sharing Plan (Note 1) 719,394 674,973 2,369,952 -- -- 2,205 9,665 681,921
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period -- -- -- -- -- 61,036 149,838 6,006,739
---------- --------- ---------- -------- -------- -------- -------- ----------
End of period $1,008,574 $ 776,800 $2,572,042 $332,790 $ 4,143 $196,436 $161,910 $8,773,713
========== ========= ========== ======== ======== ======== ======== ==========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
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<PAGE>
HS RESOURCES, INC. 401(k) & PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
(1) DESCRIPTION OF PLAN
Effective July 1, 1990 and June 30, 1989, HS Resources, Inc. (the "Company")
established the HS Resources, Inc. Employee Investment 401(k) Plan (the "401(k)
Plan") and the HS Resources, Inc. Profit Sharing Plan (the "Profit Sharing
Plan"), respectively. The 401(k) Plan was amended and restated effective August
1, 1998. The amendment merged the Profit Sharing Plan into the 401(k) Plan and
changed the name of the 401(k) Plan to the HS Resources, Inc. 401(k) & Profit
Sharing Plan (the "Plan").
The following description of the Plan provides only general information.
Participants and all others should refer to the Plan Agreement for a more
complete description of the Plan's provisions. Except as noted, the description
below relates to the Plan as amended August 1, 1998.
GENERAL
The Plan is a defined contribution plan covering all eligible employees of the
Company, which excludes collective bargaining employees, leased employees and
seasonal part-time employees or temporary employees. As of August 1, 1998, there
are no service or age eligibility requirements for employee deferrals. For
employer match contributions, employees must complete one year of service as
defined by the Plan. The Plan was established under the provisions of Section
401(a) of the Internal Revenue Code ("IRC"), which includes a qualified deferred
arrangement as described in Section 401(k) of the IRC, for the benefit of
eligible employees of the Company. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Benefits
under the Plan are not guaranteed by the Pension Benefit Guaranty Corporation.
CONTRIBUTIONS
Participants can contribute on a pre-tax basis, as permitted by Section 401(k)
of the IRC, an amount from 1% to 15% (1% to 10% prior to August 1, 1998) of
their compensation, as defined by the Plan, limited by the requirements of the
IRC. Employees may contribute rollover contributions from another qualified
plan. Participants may also contribute after-tax amounts from 1% to 5% of
compensation to the Plan.
Each Plan year, the Company may, at its sole discretion, contribute a matching
contribution. Participants must be continuously employed from the first day to
the last day of the Plan year to be eligible to receive matching contributions.
For the Plan year ended December 31, 1998, the Company matched the following for
each participant: 100% of the pre-tax contributions for each participant up to
the first 10% of compensation deferred by the employee. The Company match
totaled $762,944 for the plan year ended December 31, 1998.
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<PAGE>
Each Plan year, the Company may, at its discretion, contribute an additional
profit sharing contribution and qualified non-elective contribution ("QNEC") to
the Plan. Prior to August 1, 1998, profit sharing contributions were made to the
Profit Sharing Plan. Allocations of profit sharing contributions are based on a
uniform percentage of each participant's pay, adjusted as allowed by law to
reflect the Company's payments to finance the participant's Social Security
benefits. In order to be eligible for a profit sharing contribution, a
participant must be employed on the last day of the Plan year or have completed
at least three months of service during the Plan year. Allocations of QNECs are
made in the proportion that a participant's compensation bears to the
compensation of the eligible non-highly compensated participants for the portion
of the Plan year in which they were participants. The Company did not make a
profit sharing contribution or QNEC for the Plan year ended December 31, 1998.
The annual additions under the Plan and all other plans sponsored by the Company
to each Participant are limited to the lesser of 25% of eligible compensation or
$30,000. Annual additions are defined by the IRC.
PARTICIPANT ACCOUNTS
Participant accounts are credited with participant elective contributions,
matching Company contributions, profit sharing contributions, QNEC contributions
and Plan earnings or losses.
INVESTMENT OPTIONS
Prior to August 1, 1998, participants were offered the following ten investment
options:
o Money Market Portfolio--Seeks to provide liquidity, stability of
principal and current income by investing in U.S. government
securities, certificates of deposit, bankers acceptances, and
commercial paper.
o GIC Portfolio--Seeks to provide stability of principal, liquidity, and
current income by investing in a wide range of guaranteed investment
and bank investment contracts.
o Conservative Bond Fund--Seeks to preserve capital, maintain market
liquidity, and achieve a total return in excess of investment
benchmarks without assuming undue risk by investing in a diversified
range of bonds and other fixed-income securities.
o Balanced Value Portfolio--Seeks long-term capital growth through
investment in both stocks and bonds.
o Conservative Equity--Seeks long-term capital growth and income through
investment in value-oriented, income producing stocks.
o Value Equity--Seeks long-term capital growth and income through
investment in value-oriented stocks.
o Growth Value--Seeks long-term capital growth through investment in
stocks.
o International Equity--Seeks capital growth through investment in
securities of foreign (non-U.S.) companies in maturing and emerging
economies.
o Emerging Growth--Seeks investment in stocks of companies that have the
potential for above-average growth.
o HS Resources Common Stock--Investment in the common stock of HS
Resources, Inc.
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<PAGE>
Effective August 1, 1998, participants are offered twelve investment options
in which they may invest, as follows:
o American AAdvantage International Equity Institutional Fund--Seeks to
provide long-term capital appreciation through investment in common
stocks and securities convertible into common stocks of issuers based
in at least three different countries located outside the U.S.
o DFA U.S. Small Cap Value--Seeks to provide long-term capital
appreciation through investments in value stocks of U.S.
companies on a market capitalization weighted basis.
o HS Resources Common Stock--Investment in common stock of HS Resources,
Inc.
o Oakmark International Fund--Seeks to provide long-term capital
appreciation through investments in equity securities of
non-U.S. issuers.
o Pimco Total Return Fund--Invests in a diversified portfolio of fixed
income securities of varying maturities.
o Schwab Stable Value Fund--Seeks to provide stability of principal
providing high current income by investing in a diversified portfolio
consisting primarily of insurance company guaranteed investment
contracts.
o Schwab Value Advantage Fund--Seeks to provide investors with the
highest possible current income while seeking to preserve the
investment and provide liquidity.
o T. Rowe Price Small Cap Stock Fund--Seeks to provide long-term growth
by investing primarily in stocks of small to medium-sized companies.
o Vanguard Index 500--Seeks to track the performance of the Standard &
Poor's 500 Composite Stock Price Index, which emphasizes
stocks of large U.S. companies.
o Vanguard Wellington--Seeks to conserve capital and to provide moderate
long-term growth in capital and income.
o Vanguard Windsor II Fund--Seeks to provide long-term growth of capital
and to provide dividend income.
o Personal Choice Retirement--This fund allows participants to buy and
sell from almost any mutual fund or other public security such as
stocks and bonds available at Charles Schwab Trust Company ("Schwab"),
the trustee; however HSR Stock may not be traded in this account.
Participants may invest their accounts in one or more of the above funds in
whole percent increments. Participants may change the investment direction of
their funds at any time by calling Schwab voice response or through the Schwab
web site.
VESTING
Participants are immediately and fully vested in their elective contributions,
Company matching contributions and QNECs to the Plan.
Vesting in the Company profit sharing contribution is based on years of service.
This contribution shall be fully vested and non-forfeitable upon and after
attaining the Plan's normal retirement age (age 65), death, or disability. If
termination occurs for any reason other than these events, the participant vests
as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 year 0%
1 year 0%
2 years 20%
3 years 40%
4 years 66-2/3%
5 years 100%
PAYMENTS OF BENEFITS
A participant's entire interest in the Plan is payable upon attaining normal
retirement age (age 65), death, or becoming disabled, as defined. Upon
termination of service, a participant's vested
-13-
<PAGE>
interest in the Plan is payable. Participant benefits are payable in a lump sum,
installments or a combination thereof. In addition, hardship distributions are
permitted if certain criteria are met.
Benefits for retired and/or terminated employees who had not received their full
payment for their vested benefits, but had requested payment prior to year end,
were immaterial for the years ended December 31, 1998 and 1997.
PARTICIPANT LOANS
In accordance with the Plan Agreement, participants may borrow funds from the
Plan. Borrowings cannot exceed the lesser of $50,000 or 50% of the participant's
vested account and, effective August 1, 1998, must be a minimum of $1,000. Loans
are secured by the participant's account and bear an interest rate equal to the
prime rate of interest as published in The Wall Street Journal. Prior to August
1, 1998, the interest rate on new participant loans was prime plus 2% on the
date the loan was approved. Such loans are evidenced by promissory notes.
Effective August 1, 1998, participants may have a maximum of two outstanding
loans at any time.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared using the accrual
method of accounting. The preparation of the financial statements in conformity
with generally accepted accounting principles requires the Plan's management to
use estimates and assumptions that affect the financial statements and
disclosures. Actual results could differ from these estimates.
INVESTMENT VALUATION
The Plan's investments are stated at fair value which is determined by the
trustees based on current market prices. The GIC Portfolio, which was held by
the Plan prior to August 1, 1998, was a pooled trust fund investing in
guaranteed investment contracts. The Schwab Stable Value Fund is a
common/collective trust fund consisting of insurance company guaranteed
investment contracts and synthetic investment contracts. Both the GIC Portfolio
and the Schwab Stable Value Fund were determined to be fully benefit-responsive
and are carried in the accompanying financial statements at cost plus accrued
income, which approximates fair market value. The investment in the GIC
Portfolio in the accompanying statement of net assets available for benefits
with fund information as of December 31, 1997 is valued at the Plan's
proportionate interest in the fund. The crediting interest rate for both funds
changes daily. The GIC Portfolio's average yield for the period from January 1,
1998 to August 1, 1998 was 6.3%, and the Schwab Stable Value Fund's average
yield for the period from August 1, 1998 to December 31, 1998 was 4.55%. The
crediting interest rate of the GIC Portfolio as of December 31, 1997 was 6.65%,
and the crediting interest rate of the Schwab Stable Value Fund as of December
31, 1998 was approximately 5.6%. Participant loans are valued at cost, which
approximates fair value.
Purchases and sales of securities are recorded on a trade date basis.
The fair market value of individual investments that represent 5% or more of the
Plan's total net assets as of December 31, 1998, are separately identified on
the statements of net assets available for benefits with fund information.
-14-
<PAGE>
PAYMENT OF BENEFITS
Benefits are recorded when paid.
PLAN EXPENSES
The Plan paid all investment management fees related to the Master Trust (see
Note 6) and pays all trustee and custodial fees as shown in the accompanying
financial statements. The Company pays all other costs and expenses of
maintaining the Plan.
(3) INCOME TAXES
The Internal Revenue Service ("IRS") has determined and informed the Company by
a letter dated March 28, 1991, that the Plan and related trust are designed in
accordance with the applicable sections of the IRC. The Plan has been amended
and restated 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 IRC. Therefore, the Plan
Administrator believes that the Plan is qualified and the related trust was
tax-exempt as of the financial statement dates.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan and dispose of the net assets in accordance with the
provisions of ERISA.
(5) INTEREST IN HS RESOURCES, INC. MASTER TRUST
Prior to August 1, 1998, most of the Plan's investments were in the HS
Resources, Inc. Master Trust ("Master Trust") which was established for the
investment of assets of the 401(k) Plan and the Profit Sharing Plan. Each
participating plan had an undivided interest in the Master Trust. The assets of
the Master Trust were held by the PaineWebber Trust Company. At December 31,
1997, the Plan's interest in the net assets of the Master Trust were
approximately 89%. Investment income or loss, net of expenses, relating to the
Master Trust was allocated to the individual plans based upon average monthly
balances invested by each plan.
The following table presents the fair values of investments for the Master Trust
as of December 31, 1997 (unaudited):
Investments at fair value:
Cash and cash equivalents $ 24,856
Pooled trusts 4,776,472
Employer stock 1,083,841
----------
$5,885,169
==========
-15-
<PAGE>
Net investment income for the Master Trust for the period from January 1, 1998
to August 1, 1998 is as follows (unaudited):
Interest income $ 350
Income from pooled trusts 502,884
Loss from employer stock (301,547)
--------
$201,687
========
The Master Trust was terminated upon restatement of the Plan effective August 1,
1998 (see Note 1).
(6) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares and/or units of mutual funds and
common/collective trust funds, and money market funds managed by Schwab.
Therefore, these transactions qualify as party-in-interest transactions. Fees
paid by the Master Trust for the investment management services amount to
$43,223 for the period from January 1, 1998 to August 1, 1998. Certain Plan
investments are also shares of the Company Stock.
(7) RISKS AND UNCERTAINTIES
The Plan provides for various investments in mutual funds, common/collective
trust funds, money market funds, common stock and Company common stock.
Investments in general, are subject to various risks, such as interest rate,
credit, and overall market volatility risk. Due to the level of risk associated
with certain investments, including the Company's common stock, it is reasonably
possible that changes in the value of investments will occur in the near term
and that such changes could materially affect participants' account balances and
the amounts reported in the statement of changes in net assets available for
benefits.
-16-
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
Historical Current
Identity of Party Involved Description of Investments Cost Value
- -------------------------- -------------------------- ----------- ---------
<S> <C> <C> <C>
* The Charles Schwab
Trust Company Cash and Cash Equivalents $ 8,518 $ 8,518
----------- -----------
Money Market Funds:
* Schwab Treasury U.S. Money Market 4,143 4,143
* Schwab Value Advantage Fund 344,911 344,911
----------- -----------
Total Money Market Funds 349,054 349,054
----------- -----------
Common/Collective Trust Fund:
* Schwab Stable Value Fund 173,742 176,942
----------- -----------
Total common/collective
trust fund 173,742 176,942
---------- ----------
Mutual Funds:
American AAdvantage International
Equity Institutional 207,375 201,804
DFA U.S. Small Cap Value 82,769 82,720
Oakmark International Fund 37,003 36,499
Pimco Total Return Fund 260,529 255,158
T. Rowe Price Small-Cap Stock 940,368 952,079
Vanguard Index 500 889,186 1,008,574
Vanguard Wellington 804,221 776,800
Vanguard Windsor II Fund 2,612,817 2,572,042
---------- ----------
Total mutual funds 5,834,268 5,885,676
---------- ----------
* HS Resources Common Stock 1,177,856 824,721
----------- -----------
Self Directed Brokerage Account:
Personal Choice Retirement
Cash equivalents-
*Schwab Money Market Fund 29,653 29,653
*Schwab Value Advantage
Money Fund 50,068 50,068
----------- -----------
Total cash equivalents 79,721 79,721
----------- -----------
Common stock-
Cabletron System, Inc. 849 838
Cendant Corporation 2,061 4,828
Dell Computer Corporation 7,293 7,319
Eagle Geophysical, Inc. 1,030 775
Global PMT Tech, Inc. 855 813
Hilton Hotels Corporation 2,092 1,913
International Fibercom, Inc. 764 731
Janus Global Technology Fund 5,000 5,000
K.T.I., Inc. New 1,680 2,163
Meditrust Corporation 3,345 3,000
Meridian Resource Corporation 1,105 638
Newpark Resources 1,705 1,363
Physician's Specialty Corporation 1,505 1,675
Research Frontiers, Inc. 15,596 23,625
Tekelec 1,530 1,656
Vivid Technologies, Inc. 1,130 1,213
----------- -----------
Total common stock 47,540 57,550
-17-
<PAGE>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
Historical Current
Identity of Party Involved Description of Investments Cost Value
- -------------------------- -------------------------- ----------- ---------
Mutual funds-
Amcent 20th Century International
Discovery Fund 52,098 53,840
Invesco Value Trust Total Return Fund 2,591 2,832
Janus Mercury Fund 5,488 6,344
Janus Twenty Fund 1,988 2,477
Marisco Focus Fund 5,000 5,910
Smith Breeden Equity Plus Fund 121,563 124,116
----------- -----------
Total mutual funds 188,728 195,519
----------- -----------
Total self directed brokerage
account 315,989 332,790
----------- -----------
Participant Loans-interest rate
ranging from 7.5%-11.1% 161,910 161,910
----------- -----------
Total Investments $ 8,021,337 $ 7,739,611
=========== ===========
* Represents a party-in-interest (Note 6).
The accompanying notes to financial statements are an integral part of this schedule.
</TABLE>
-18-
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
HS RESOURCES, INC.
401(k) & PROFIT SHARING PLAN
ITEM 27(d)--SCHEDULE OF REPORTABLE TRANSACTIONS (a)
FOR THE YEAR ENDED DECEMBER 31, 1998
Purchases Sales
------------------- ---------------------------------------------
Number Number
of of Gain
Identity of Issuer Description of Trans- Purchase Trans- Selling or
or party involved Investment actions Price (b) actions Price (b) Cost of Asset (Loss)
- --------------------------- ------------------------ ------- ---------- ------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
*HS Resources Common
Stock Employer Stock 26 $1,268,120 18 $ 60,596 $ 90,264 $(29,668)
*Schwab Money Market Fund Self-Directed Brokerage
Account 43 326,079 22 296,432 296,432 --
*Schwab Treasury U.S.
Money Market Money Market Account 28 1,271,761 29 1,267,619 1,267,619 --
*Schwab Value Advantage
Fund Money Market Account 20 373,212 16 28,301 28,301 --
T. Rowe Price Small-Cap
Stock Mutual Fund 17 995,928 19 49,542 55,561 (6,019)
Vanguard Index 500 Mutual Fund 26 931,590 19 42,244 42,404 (160)
Vanguard Wellington Mutual Fund 21 826,545 14 21,934 22,324 (390)
Vanguard Windsor II Fund Mutual Fund 16 2,725,131 20 110,093 112,314 (2,221)
(a) This schedule is prepared using the alternative way of reporting (iii)
series of transactions under DOL Regulation 2520.103-6(d)(2).
(b) The purchase price or selling price is equal to the current value of the
asset on the transaction date.
* Represents a party-in-interest (Note 6).
The accompanying notes to financial statements are an integral part of this schedule.
</TABLE>
-19-
<PAGE>
HS RESOURCES, INC. PROFIT-SHARING PLAN
FINANCIAL STATEMENTS
AS OF AUGUST 1, 1998 AND DECEMBER 31, 1997
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
-20-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
INDEX
Page(s)
-------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 22
FINANCIAL STATEMENTS:
Statements of Net Assets Available for
Benefits with Fund Information as of
August 1, 1998 and December 31, 1997 23
Statement of Changes in Net Assets Available for
Benefits with Fund Information for the Period
Ended August 1, 1998 24
NOTES TO FINANCIAL STATEMENTS 25-29
-21-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
HS Resources, Inc. Profit-Sharing Plan:
We have audited the accompanying statements of net assets available for benefits
of HS RESOURCES, INC. PROFIT-SHARING PLAN (the "Plan") as of August 1, 1998 and
December 31, 1997, and the related statement of changes in net assets available
for benefits for the period ended August 1, 1998. 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
August 1, 1998 and December 31, 1997, and the changes in net assets available
for benefits for the period ended August 1, 1998 in conformity with generally
accepted accounting principles.
As further discussed in Note 1, the Plan was merged into the HS Resources, Inc.
Employee Investment 401(k) Plan effective August 1, 1998.
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
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
fund information has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ ARTHUR ANDERSEN LLP
Denver, Colorado,
April 16, 1999.
-22-
<PAGE>
<TABLE>
<CAPTION>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF AUGUST 1, 1998 AND DECEMBER 31, 1997
December 31, 1997
-------------------------------------------------------------------------------------------
Participant-Directed
-------------------------------------------------------------------------------------------
Bal-
Money Conser- anced Con- HSR
August 1, Market GIC vative Value serva- Inter- Emerg- Common
1998 Port- Port- Bond Port- tive Value Growth national ing Stock
Total folio folio Fund folio Equity Equity Value Equity Growth Fund
--------- ------ ------ ------ ------ ------ --------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments
Investments in
HS Resources, Inc.
Master Trust (Note 4) $ -- $31,108 $10,080 $15,006 $36,664 $94,187 $147,058 $50,551 $22,669 $91,843 $159,623
Loans to participants -- -- -- -- -- -- -- -- -- -- --
-------- ------- ------- ------- ------- ------- ---------- ------- ------- ------- --------
Total investments -- 31,108 10,080 15,006 36,664 94,187 147,058 50,551 22,669 91,843 159,623
-------- ------- ------- ------- ------- ------- ---------- ------- ------- ------- --------
NET ASSETS AVAILABLE FOR
BENEFITS $ -- $31,108 $10,080 $15,006 $36,664 $94,187 $147,058 $50,551 $22,669 $91,843 $159,623
======== ======= ======= ======= ======= ======= ========== ======= ======= ======= ========
December 31, 1997
-----------------------------
Cash
and Loans
Cash to
equiva- Parti-
lents cipants Total
------ ------- --------
<S> <C> <C> <C>
ASSETS:
Investments
Investments in
HS Resources, Inc.
Master Trust (Note 4) $3,891 $ -- $662,680
Loans to participants -- 11,364 11,364
------ ------- --------
Total investments 3,891 11,364 674,044
------ ------- --------
NET ASSETS AVAILABLE FOR
BENEFITS $3,891 $11,364 $674,044
====== ======= ========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
-23-
<PAGE>
<TABLE>
<CAPTION>
HS RESOURCES, INC. PROFIT-SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE PERIOD ENDED AUGUST 1, 1998
Participant-Directed
-----------------------------------------------------------------------------------------------------
Money Conser- Balanced Con- HSR
Market GIC vative Value serva- Inter- Emerg- Common
Port- Port- Bond Port- tive Value Growth national ing Stock
folio folio Fund folio Equity Equity Value Equity Growth Fund
------- ------- ------- ------- -------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income
Net investment income (loss)
from HS Resources, Inc.
Master Trust (Note 4) $ 936 $ 350 $ 473 $ 3,758 $ 9,942 $ 21,965 $ 6,886 $ 2,937 $ 3,704 $( 30,465)
Interest on participant
loans -- -- -- -- -- -- -- -- -- --
------- ------- ------- ------- -------- -------- ------- ------- ------- --------
Total additions
(deductions) 936 350 473 3,758 9,942 21,965 6,886 2,937 3,704 ( 30,465)
------- ------- ------- ------- -------- -------- ------- ------- ------- --------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to employees ( 199) ( 29) ( 34) ( 1,945) ( 3,128) ( 3,938) ( 92) ( 92) ( 650) ( 2,449)
------- ------- ------- ------- -------- -------- ------- ------- ------- --------
NET INCREASE (DECREASE) 737 321 439 1,813 6,814 18,027 6,794 2,845 3,054 ( 32,914)
NET TRANSFERS BETWEEN FUNDS 606 469 679 421 422 1,372 483 121 2,236 ( 4,904)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period 31,108 10,080 15,006 36,664 94,187 147,058 50,551 22,669 91,843 159,623
MERGER INTO HS RESOURCES, INC.
401(k) AND PROFIT SHARING
PLAN (NOTE 1) ( 32,451) ( 10,870) ( 16,124) ( 38,898) ( 101,423) ( 166,457) ( 57,828) ( 25,635) ( 97,133) (121,805)
------- ------- ------- ------- -------- -------- ------- ------- ------- --------
NET ASSETS AVAILABLE FOR BENEFITS:
End of period $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
======= ======= ======= ======= ======== ======== ======= ======= ======= ========
Cash
and Loans
Cash to
equiva- Parti-
lents cipants Total
------ ------- --------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income
Net investment income (loss)
from HS Resources, Inc.
Master Trust (Note 4) $ 291 $ -- $ 20,777
Interest on participant
loans -- 552 552
------- ------- --------
Total additions
(deductions) 291 552 21,329
------- ------- --------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to employees ( 896) -- ( 13,452)
------- ------- -------
NET INCREASE (DECREASE) ( 605) 552 7,877
NET TRANSFERS BETWEEN FUNDS 346 ( 2,251) --
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period 3,891 11,364 674,044
MERGER INTO HS RESOURCES, INC.
401(k) AND PROFIT SHARING
PLAN (Note 1) ( 3,632) ( 9,665) ( 681,921)
------- ------- --------
NET ASSETS AVAILABLE FOR BENEFITS:
End of period $ -- $ -- $ --
======= ======= ========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
-24-
<PAGE>
HS RESOURCES, INC.
PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
AUGUST 1, 1998 AND DECEMBER 31, 1997
(1) DESCRIPTION OF PLAN
Effective June 30, 1989, HS Resources, Inc. (the "Company") established the HS
Resources, Inc. Employee Investment Plan, which was amended and restated
effective as of that date, and renamed the HS Resources, Inc. Profit-Sharing
Plan (the "Plan"). The following description of the Plan provides only general
information. Participants and all others should refer to the Plan Agreement for
a more complete description of the Plan's provisions.
Effective August 1, 1998, the Company merged the Plan into the HS Resources,
Inc. 401(k) and Profit Sharing Plan (the "401(k) Plan") (formerly HS Resources,
Inc. Employee Investment 401(k) Plan). The 401(k) Plan was sponsored for the
exclusive benefit of the Company's employees. As part of the merger agreement,
participants in the Plan were granted prior service credit in the 401(k) Plan.
All assets and liabilities of the Plan became assets and liabilities of the
401(k) Plan effective as of the merger date.
GENERAL
The Plan was a defined contribution plan covering all employees of the Company
who had completed one year of service which consisted of at least 1,000 hours of
service. The Plan was established under the provisions of Section 401(a) of the
Internal Revenue Code ("IRC") for the benefit of eligible employees of the
Company. It was subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Benefits under the Plan were not
guaranteed by the Pension Benefit Guaranty Corporation.
CONTRIBUTIONS
The Company had the option of making a discretionary profit-sharing contribution
each year to the Plan. Profit-sharing contributions were allocated to each
participant's account based on an allocation formula, as defined in the Plan
Agreement. Participants had to be employed from the first day to the last day of
a Plan year in order to be eligible to receive a contribution. Total annual
additions under the Plan and all other plans sponsored by the Company were
limited to the lesser of 25% of eligible compensation or $30,000. Annual
additions were defined by the IRC. For the period ending August 1, 1998, there
were no Company profit-sharing contributions.
-25-
<PAGE>
PARTICIPANT ACCOUNTS
Participant accounts were credited with Company profit-sharing contributions,
allocations of Plan earnings or losses, and allocations of forfeitures.
INVESTMENT OPTIONS
Participants were offered the following ten investment options:
o Money Market Portfolio--Seeks to provide liquidity, stability of
principal and current income by investing in U.S. government
securities, certificates of deposit, bankers acceptances, and
commercial paper.
o GIC Portfolio--Seeks to provide stability of principal, liquidity,
and current income by investing in a wide range of guaranteed
investment and bank investment contracts.
o Conservative Bond Fund--Seeks to preserve capital, maintain market
liquidity and achieve a total return in excess of investment
benchmarks without assuming undue risk by investing in a
diversified range of bonds and other fixed-income securities.
o Balanced Value Portfolio--Seeks long-term capital growth through
investment in both stocks and bonds.
o Conservative Equity--Seeks long-term capital growth and income
through investment in value-oriented, income producing stocks.
o Value Equity--Seeks long-term capital growth and income through
investment in value-oriented stocks.
o Growth Value--Seeks long-term capital growth through investment in
stocks.
o International Equity--Seeks capital growth through investment in
securities of foreign (non-U.S.) companies in maturing and
emerging economies.
o Emerging Growth--Seeks investment in stocks of companies that have
the potential for above-average growth.
o HSR Common Stock Fund--Investment in the common stock, $.001 par
value, of HS Resources, Inc.
Participants had the option of investing their accounts in one or more of the
above funds in whole percent increments. Participants had the option of changing
the investment direction of their funds, with fourteen days advance written
notice to the Plan Administrator. Changes would be effective the first day of
the calendar month following notification.
-26-
<PAGE>
VESTING
Vesting in the Company profit-sharing contributions was based on years of
service. These contributions were fully vested and non-forfeitable upon and
after attaining the Plan's normal retirement age (age 65), death or disability.
If termination occurred for any reason other than these events, the participant
vested as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 year 0%
1 year 0%
2 years 20%
3 years 40%
4 years 66-2/3%
5 years 100%
FORFEITURES
When certain terminations of participation in the Plan occurred, the non-vested
portion of the participant's account represented a forfeiture, as defined by the
Plan. Forfeitures were reallocated among the profit-sharing contribution
accounts of participants at the end of the Plan year in which the forfeiture
occurred. However, if the participant was reemployed within six years and
fulfilled certain requirements, as defined by the Plan Agreement, the
participant's account was restored. Total forfeitures during the period ended
August 1, 1998 were $3,631, which will be reallocated to participants of the
401(k) Plan in 1999.
PAYMENTS OF BENEFITS
A participant's entire interest in the Plan was payable upon attaining normal
retirement age (age 65), death or becoming disabled, as defined. Upon
termination of service, a participant's vested interest in the Plan was payable.
Participants' benefits were payable in a lump sum, installments or a combination
thereof. In addition, hardship distributions were permitted if certain criteria
were met.
Benefits for retired and/or terminated employees who had not received their full
payment for their vested benefits, but had requested payment prior to year end
were immaterial for the periods ended August 1, 1998 and December 31, 1997.
These amounts are included as a component of net assets available for benefits
in the accompanying financial statements. These vested benefits were distributed
in accordance with the Plan Agreement.
PARTICIPANT LOANS
In accordance with the Plan Agreement, participants had the option to borrow
funds from the Plan. Borrowings could not exceed the lesser of $50,000 or 50% of
the participant's vested account. Loans were secured by the participant's
account and bore an interest rate of prime plus 2% on the date the loan was
approved. Such loans were evidenced by promissory notes.
-27-
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared using the accrual
method of accounting. The preparation of the financial statements in conformity
with generally accepted accounting principles requires the Plan's management to
use estimates and assumptions that affect the financial statements and
disclosures. Actual results could differ from these estimates.
INVESTMENT VALUATION
The Plan's investments were stated at fair value which was determined by
PaineWebber Trust Company (the "Trustee") based on current market prices. The
GIC Portfolio was a pooled trust which invested in guaranteed investment
contracts. The contracts were carried in the pooled trust fund's audited
financial statements at cost plus accrued income, which approximated fair market
value. The investment in the pooled trust fund in the accompanying financial
statements was valued at the Plan's proportionate interest in the fund as of the
financial statement date. This portfolio was determined to be fully
benefit-responsive. The crediting interest rate changed daily. The average yield
for the period ended August 1, 1998 was 6.3%. The crediting interest rate as of
December 31, 1997 was 6.65%. Participant loans were valued at cost, which
approximated fair value.
Purchases and sales of securities were recorded on a trade date basis.
PAYMENT OF BENEFITS
Benefits were recorded when paid.
PLAN EXPENSES
The Plan paid all investment management fees (see Note 5). The Company paid all
other costs and expenses of maintaining the Plan.
(3) INCOME TAXES
The Internal Revenue Service ("IRS") had determined and informed the Company by
a letter dated March 28, 1991, that the Plan and related trust were designed in
accordance with the applicable sections of the IRC. The Plan had been amended
since receiving the determination letter. However, the Plan Administrator
believes that the Plan was designed and was being operated in compliance with
the applicable requirements of the IRC. Therefore, the Plan Administrator
believes the Plan was qualified and the related trust was tax-exempt as of the
financial statement dates.
-28-
<PAGE>
(4) INTEREST IN HS RESOURCES, INC. MASTER TRUST
Most of the Plan's investments were in the HS Resources, Inc. Master Trust
("Master Trust") which was established for the investment of assets of the Plan
and the HS Resources, Inc. Employee Investment 401(k) Plan. Each participating
plan had an undivided interest in the Master Trust. The assets of the Master
Trust were held by the Trustee. At December 31, 1997, the Plan's interest in the
net assets of the Master Trust was approximately 11%. Investment income or loss,
net of expenses, relating to the Master Trust was allocated to the individual
plans based upon average monthly balances invested by each plan.
The following table presents the fair values of investments for the Master
Trust:
August 1, December 31,
1998 1997
---------- ------------
(Unaudited)
Investments at fair value:
Cash and cash equivalents $ -- $ 24,856
Pooled trusts -- 4,776,472
Employer stock -- 1,083,841
---------- ----------
$ -- $5,885,169
========== ==========
Net investment income for the Master Trust was as follows:
Period Ended
August 1,
1998
------------
(Unaudited)
Interest income $ 350
Income from pooled trusts 502,884
Loss from employer stock (301,547)
---------
$ 201,687
=========
(5) RELATED PARTY TRANSACTIONS
Certain Plan investments were units of pooled trust funds managed by the
Trustee. Therefore, these transactions qualified as party-in-interest
transactions. Fees paid by the Master Trust for the investment management
services amounted to $43,223 for the period ended August 1, 1998. Certain Plan
investments were also shares of the Company stock.
-29-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
HS Resources, Inc. (as Plan Administrator) has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
HS RESOURCES, INC. 401(k) &
PROFIT SHARING PLAN
Date: June 29, 1999 By: /s/ ANNETTE M. MONTOYA
-----------------------------------
Name: Annette M. Montoya
Title: Vice President-Accounting &
Administration
HS RESOURCES, INC. PROFIT SHARING
PLAN
Date: June 29, 1999 By: /s/ ANNETTE M. MONTOYA
-----------------------------------
Name: Annette M. Montoya
Title: Vice President-Accounting &
Administration
-30-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
------- -----------------------
23.1 Consent of Independent Public Accountants
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report on the financial statements of HS Resources, Inc. 401(k)
& Profit Sharing Plan dated June 29, 1999, and the financial statements of HS
Resources, Inc. Profit Sharing Plan dated April 16, 1999, included in this Form
11-K and the Registration Statements on Form S-8 (Nos. 33-91934 and 333-81261).
Denver, Colorado, /s/ ARTHUR ANDERSEN LLP
June 29, 1999.
