<PAGE> 1
EXHIBIT 99(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
COMMISSION FILE NUMBER 1-2275
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
375 Park Avenue
New York, New York 10152
(Full title of the plan and the address of the plan)
THE SEAGRAM COMPANY LTD.
1430 Peel Street
Montreal, Quebec, Canada, H3A 1S9
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
<PAGE> 2
2
REQUIRED INFORMATION
1. Not Applicable.
2. Not Applicable.
3. Not Applicable.
4 The Seagram 401(k) Plan - Spencer Employees (the "Plan") is subject to the
requirements of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Attached hereto are the financial statements of the Plan
for the fiscal year ended December 31, 1999 prepared in accordance with the
financial reporting requirements of ERISA.
EXHIBITS
1. Financial statements of the Plan for the fiscal year ended December 31,
1999 prepared in accordance with the financial reporting requirements of
ERISA.
2. Consent of Gutierrez & Co., independent accountants.
<PAGE> 3
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on their behalf by the undersigned
hereunto duly authorized.
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
By /s/ John Borgia
------------------------------------
John Borgia
Member of Investment Committee
Date: June 30, 2000
<PAGE> 4
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE> 5
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report 1
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets
Available for Benefits 3
Notes to Financial Statements 4-11
</TABLE>
<PAGE> 6
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of
The Seagram 401(k) Plan - Spencer Employees
We have audited the accompanying statements of net assets available for
benefits of The Seagram 401(k) Plan - Spencer Employees (the "Plan") as of
December 31, 1999 and 1998, 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, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
/s/ Gutierrez & Co.
Flushing, New York
June 20, 2000
<PAGE> 7
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
-------------------------------
1999 1998
------------- --------------
<S> <C> <C>
Net assets held in trust by Bank of New York ( Note 11 ) $ 13,652,682 $ 8,800,121
------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS $ 13,652,682 $ 8,800,121
============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 8
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1999 1998
--------------- ----------------
<S> <C> <C>
CONTRIBUTIONS
Participating Employees $ 888,974 $ 724,445
Participating Companies 386,708 211,040
--------------- ----------------
1,275,682 935,485
--------------- ----------------
INVESTMENT INCOME ON ASSETS HELD BY
BANK OF NEW YORK
Net appreciation in fair value of investments 1,077,854 1,107,174
Dividends and interest 154,341 167,873
PARTICIPANT WITHDRAWALS ( 412,974) ( 394,078)
--------------- ----------------
INCREASE IN PLAN EQUITY
2,094,903 1,816,454
TRANSFER OF SPENCER GIFTS PROFIT SHARING PLAN 2,757,658
PLAN EQUITY AT BEGINNING OF YEAR 8,800,121 6,983,667
--------------- ----------------
PLAN EQUITY AT END OF YEAR $ 13,652,682 $ 8,800,121
============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 9
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed in the preparation of the financial
statements of The Seagram 401 (k) Plan - Spencer Employees (the "Plan")
conform with generally accepted accounting principles. The more significant
accounting policies are:
Basis of Accounting
The accompanying financial statements of the Plan are maintained on the
accrual basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
Investment Valuation
Effective January 1, 1997, the assets are held in trust by Bank of New York
(Trustee) in the Joseph E. Seagram & Sons, Inc. Master Trust (Master
Trust), which also includes assets of the 401(k) plans of the company's
affiliates, Universal Studios, Inc. and UMG Manufacturing and Logistics,
Inc. Effective, July 1, 1999,, the assets of the PolyGram Holding, Inc.
Deferred Savings and Investment Plan for Employees were added to the Master
Trust. The related investment income and appreciation in fair value
represents allocations to the Plan based upon the ratio of the Plan's
assets to total Master Trust Assets.
Investment securities are recorded and valued as follows:
United States government obligations at fair value based on the current
market yields; temporary investments in short-term investment funds at cost
which in the normal course approximates market value; securities
representing units of other funds at net asset value; The Seagram Company
Ltd. common shares at the closing price reported on the composite tape of
the New York Stock Exchange on the valuation date.
Security Transactions
Security transactions are accounted for on a trade date basis with the
average cost basis used for determining the cost of investments sold.
Interest income is recorded on an accrual basis. Income on securities
purchased under agreements to resell is accounted for at the repurchase
rate. Changes in discount on coupons detached from United States Treasury
Bonds are reflected as unrealized appreciation.
4
<PAGE> 10
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
2. DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan originally established as the
Spencer Gifts, Inc. Employee Savings Plan ("Spencer Plan") and is subject
to the provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
Effective January 1, 1997, the Spencer Plan was amended and continued in
the form of The Seagram 401 (k) Plan (the "Seagram Plan"). The name of the
Spencer Plan was changed to the Retirement Savings and Investment Plan for
Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Spencer
Employees (the "Plan"). Effective January 1, 1999, the name of the
Retirement Savings and Investment Plan for Employees of Joseph E. Seagram &
Sons, Inc. and Affiliates - Spencer Employees was changed to The Seagram
401(k) Plan - Spencer Employees. To simplify plan administration, the Plan
was amended in the form of the Seagram Plan, including certain
modifications to the terms, to accomodate the benefits provisions solely
applicable to eligible employees of Spencer Gifts, Inc. ("Spencer").
Notwithstanding the adoption of the form of the Seagram Plan, the Plan has
continued its existence as a separate plan. Plan assets are solely
available for the benefit of and used to satisfy the liabilities incurred
on behalf of employees of the Plan.
The Plan covers certain employees of Spencer who have completed one year of
service and who are either (i) salaried employees or (ii) hourly employees
employed in a classification designated by Spencer, excluding employees
classified as Highly Compensated employees.
The Plan provides benefits to participants based upon amounts voluntarily
contributed to a participant's account by the participant and, amounts
contributed under certain circumstances, by the Participating Companies
(see Note 4). Under the Plan, a participant is not provided with any fixed
benefit. The ultimate benefit to be received by the participant depends on
the amounts contributed, the investment results and other adjustments, and
the participant's vested interest at termination of employment (see Note
5).
With respect to each participant, contributions are allocated among four
accounts specified in the Plan: pre-tax account, company match account,
after-tax account and rollover account (the "Accounts"). Such contributions
are invested as designated by the participants in one or more of the
investment funds referred to in Note 3, and are accumulated and invested in
the Master Trust. Plan assets are solely available for the benefit of and
used to satisfy the liabilities incurred on behalf of employees covered by
the Plan. The Plan is administered by the Joseph E. Seagram & Sons, Inc.
(the "Company") through an Administrative Committee appointed by the Board
of Directors of the Company.
Effective, July 1, 1999, the Spencer Gifts Profit Sharing Plan was merged
with the Plan. The account balances under the Spencer Gifts Profit Sharing
Plan when transferred to the Plan will continue to be invested in the same
funds in which they were invested prior to the merger unless the
participant makes an investment election.
5
<PAGE> 11
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
3. INVESTMENT PROGRAM
During the year ended December 31, 1999, the Plan was comprised of nine
investment funds: (i) the Money Market Fund investing primarily in the
State Street Yield Enhanced STIF Fund managed by State Street Bank and
Trust Company; (ii) the Stable Income Fund investing in the La Salle Income
Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund
investing in PIMCO Total Return Fund, Class A Shares (which replaced the
Putnam Income Fund, Class A Shares on June 1, 1998) managed by PIMCO; (iv)
the S&P 500 Index Fund investing in the S&P 500 Flagship Fund, Series C,
managed by State Street Bank and Trust Company; (v) the Managed Equity Fund
investing in Lazard Equity Portfolio managed by Lazard Freres Asset
Management; (vi) the Growth Equity Fund investing in Brandywine Fund, Inc.
managed by Freiss Associates (up to February 1, 1999); on December 1, 1999,
the Growth Equity Fund was reestablished investing in Vanguard
Institutional Index Fund managed by Vanguard; (vii) the Seagram Stock Fund
investing primarily in The Seagram Company Ltd. common shares; :(viii) the
Dreyfus Small Company Value Fund investing in the Dreyfus Small Company
Value Fund managed by Dreyfus and (ix) the MSDW International Equity Fund
investing in MSDW International Equity Fund managed by Morgan Stanley. The
investments are administered by the Investment Committee appointed by the
Board of Directors of the Company.
4. CONTRIBUTIONS
Non-highly compensated employees, as defined by the Plan, may elect to
contribute to their pre-tax accounts on a pre-tax basis ("Pre-Tax
Contributions) and/or to their after-tax accounts on an after-tax basis
("After-Tax Contributions") through payroll deductions of 1% to 14% (in the
aggregate) (up to 17% effective January 1, 1999) of their annual salary (as
defined in the Plan), in multiples of 1%, in any combination. Pre-tax
Contributions and After-Tax Contributions are subject to limitations
imposed by federal laws for qualified retirement plans.
The Plan provides for mandatory matching contributions by the Participating
Companies payable to the participants' company match accounts. The
Participating Companies, except as herein noted, contribute on behalf of
the participants 40% of the participants'contributions not exceeding 5% of
their salary. Effective January 1, 1999, the Participating Companies
matching contribution was increased to 60% fo the first 6% of the
Participants' Pre-Tax and After-Tax Contributions. The Participating
Companies matching contributions are subject to limitations imposed by
federal laws for qualified retirement plans.
The Plan will accept into participants' rollover Accounts cash received by
participants from a qualified plan within the time prescribed by applicable
law ("Rollover Contributions").
The Participating Companies may make discretionary contributions in an
amount to be determined by the Participating Companies. The Participating
Companies have not made discretionary contributions since the inception of
the Plan.
6
<PAGE> 12
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
5. VESTING
A participant in the Plan always has a fully vested interest in the value
of his or her contributions and rollover accounts. He or she has a
non-forfeitable right to the value of his or her company match account upon
the attainment of age 60, disability (as defined in the Plan ) or death.
Upon termination of employment for any other reason, a participant vests in
the funds held in his or her company match account in accordance with the
following vesting schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 0%
At least 1, but less than 2 20%
At least 2, but less than 3 40%
At least 3, but less than 4 60%
At least 4, but less than 5 80%
5 or more 100%
Upon termination of employment for reasons other than the attainment of age
60, disability or death of a participant who was not fully vested in his or
her company match account, the nonvested portion of the participant's
company match account shall be forfeited. Any amount forfeited shall be
applied to reduce the Participating Companies' contributions. Any amount
forfeited shall be restored if the participant is re-employed by a
Participating Company before incurring a five year break in service and if
the participant repays to the Plan (within five years after his or her
reemployment commencement date) an amount in cash equal to the full amount
distributed to him or her from the Plan on account of termination of
employment, excluding amounts from the after-tax and rollover accounts at
the participant's election.
The nonvested interest of terminated participants serves to reduce
Participating Company contributions in accordance with the terms of the
Plan. The Participating Companies used $7,263 in forfeitures to offset
their contributions during the year ended December 31, 1999.
6. DISTRIBUTIONS
Upon termination of employment, after the attainment of age 60 or for
reason of disability or death, the participant or his or her beneficiary
shall receive the value of his or her Accounts. However, if the termination
of employment is for reasons other than the attainment of age 60,
Disability or death, the participant shall receive only the value of the
vested funds in his or her Accounts (See Note 5). Benefits are recorded
when paid.
In accordance with the procedures established by the Administrative
Committee and the terms of the Plan, a terminated employee may elect to
defer final distribution from the Plan. Upon such election, the amount in
the participant's vested interest in the Plan is entitled to continue to
receive investment income and is held by the Trustee until the date of
distribution as elected by the
7
<PAGE> 13
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
6. DISTRIBUTIONS (Continued)
participant.
Prior to termination of employment, the participant may withdraw amounts
from the participant's Accounts in accordance with the provisions of the
Plan.
7. LOANS TO PARTICIPANTS
A participant may apply for loans up to the lesser of $50,000 or 50% of the
value of the vested portion of the participant's Accounts. The minimum loan
amount is $1,000. The maximum repayment terms are 5 years for general
purpose loans and 25 years for principal residence loans. Applications for
loans must be approved by the Administrative Committee. The amounts
borrowed are transferred from the investment funds in which the
participant's Accounts are currently invested. Repayments and interest
thereon are credited to the participant's current investment funds through
payroll deductions made each pay period. The interest rate for loans is
based on the prime rate on the first business day of the month in which the
loan is made plus one percentage point.
8. TAX STATUS OF PLAN
The Internal Revenue Service has ruled by a letter dated April 20, 2000
that the Plan is qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended. So long as the Plan continues to be so qualified,
it is not subject to Federal income taxes.
Participants are not currently subject to income tax on the Participating
Companies' contributions to the Plan or on income earned by the Plan.
Benefits distributed to participants or to their beneficiaries may be
taxable to them. The tax treatment of the value of such benefits depends on
the event giving rise to the distribution and the method of distribution
selected.
9. RELATED PARTY TRANSACTIONS
Some of the Plan expenses including trustee, custodial, and certain
recordkeeping fees, are paid by the Company, and personnel and facilities
of the Company are used by the Plan at no charge.
10. TERMINATION OF THE PLAN
The Board of Directors of the Company may terminate the Plan at any time.
In the case of termination, the rights of participants to their accounts
shall be vested as of the date of termination.
8
<PAGE> 14
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
11. ASSETS HELD IN TRUST
The assets of the Plan are invested in the Master Trust held by the Trustee
where the assets of other related employee benefit plans of affiliates are
invested on a commingled basis.
The Master Trust net assets consist of the following classification of
assets and liabilities as of December 31, 1999 and 1998.
<TABLE>
<CAPTION>
1999 1998
--------------- --------------
Assets
------
<S> <C> <C>
Investments held in trust at fair valued determined by
quoted market prices:
Money Market Fund
State Street Yield Enhanced STIF Fund $ 57,250,843 $ 27,162,114
Stable Income Fund
The LaSalle Income Plus Fund 54,177,363 14,338,837
Bond Fund
PIMCO Total Return Fund, Class A Shares 108,694,075 31,114,802
S&P 500 Index Fund
State Street S&P 500 Flagship Fund Series C 257,741,161 129,652,061
Managed Equity Fund
Lazard Equity Portfolio Fund 69,428,179 29,014,228
Growth Equity Fund
Vanguard Institutional Index Fund 10,005,713
Cash 195,458
Brandywine Fund Inc. Common Shares 25,271,841
Seagram Stock Fund
The Seagram Company Ltd. Common Shares 31,925,545 15,666,526
Collective Short Term Investment Fund 847,036 468,709
The Coca-Cola Company Stock Fund
The Coca-Cola Company Common Stock 3,214,351 3,941,074
Collective Short Term Investment Fund 77,420 97,496
Dreyfus Small Company Value Fund
Dreyfus Small Company Value Fund 15,733,411 2,314,513
MSDW International Equity Fund
MSDW International Equity Fund 13,493,724 1,912,494
Dreyfus GIC Fund
GICs and GACS 13,110,054
Collective Short Term Investment Fund 198,267
Loans to Participants 9,614,355 7,253,248
--------------- --------------
Total Investments 645,706,955 288,207,943
--------------- --------------
</TABLE>
9
<PAGE> 15
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
11. ASSETS HELD IN TRUST ( Continued )
<TABLE>
<CAPTION>
1999 1998
--------------- --------------
<S> <C> <C>
Receivables
Accrued interest and dividends $ 5,226,406 $ 187,437
Contributions receivable 2,068 640,375
Proceeds from securities sold 1,925,793 2,907,827
--------------- --------------
Total Receivables 7,154,267 3,735,639
--------------- --------------
Total assets 652,861,222 291,943,582
--------------- --------------
Liabilities
Accounts payable for securities purchased 6,551,837 3,537,298
Administrative expenses 13,989 3,460
Other payables 49,311 -
Benefit payments 1,944 -
--------------- --------------
Total liabilities 6,617,081 3,540,758
--------------- --------------
Net Assets $646,244,141 $288,402,824
=============== ==============
</TABLE>
As of December 31, 1999 and 1998, the equitable share of the Plan in the
Master Trust is 2.11% and 3.05% respectively.
As of December 31, 1999 and 1998, the net assets of the Master Trust
available to the Plan for benefits in the individual investment funds were
as follows:
<TABLE>
<CAPTION>
1999 1998
--------------- --------------
<S> <C> <C>
Money Market Fund $ 1,993,922 $ 1,308,582
Stable Income Fund 888,166 573,001
Bond Fund 1,149,547 1,045,632
S & P 500 Index Fund 6,945,663 4,665,987
Managed Equity Fund 631,635 414,651
Growth Equity Fund 191,002 380,900
Seagram Stock Fund 826,609 58,313
Dreyfus Small Company Value Fund 403,173 46,002
MSDW International Equity Fund 235,785 20,452
GIC Fund 39,496
Loan accounts 347,684 286,601
--------------- --------------
Total $ 13,652,682 $ 8,800,121
=============== ==============
</TABLE>
10
<PAGE> 16
THE SEAGRAM 401(k) PLAN - SPENCER EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
12. INVESTMENT INCOME FROM MASTER TRUST
The appreciation in fair value and other income is as follows: Investments
held in trust at fair value determined by quoted market prices:
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1999 1998
--------------- --------------
<S> <C> <C>
Bond Fund $ 660 $ 3,763
S & P Index Fund 1,072,624 1,017,874
Managed Equity Fund 14,201 49,213
Growth Equity Fund 27,307 10,404
Seagram Stock Fund ( 65,460) 12,229
Dreyfus Small Company Value Fund 18,291 ( 2,166)
MSDW International Equity Fund 10,231 15,857
--------------- --------------
Investment gains (net of investment losses) 1,077,854 1,107,174
Interest and dividends 154,341 167,873
--------------- --------------
Investment Income $ 1,232,195 $ 1,275,047
=============== ==============
</TABLE>
13. Spencer Profit Sharing Plan
Effective July 1, 1999, the Spencer Gifts Profit Sharing Plan was merged
into the Plan. As a result of the merger, the Participants' entire account
balances under the Spencer Gifts Profit Sharing Plan were transferred and
credited to the Participants' Spencer Profit Sharing Account.
11
<PAGE> 17
CONSENT OF INDEPENDENT ACCOUNTANTS
The Seagram Company Ltd.
The Seagram 401(k) Plan - Spencer Employees
We hereby consent to the incorporation by reference in Registration
Statement No. 333-19059 on Form S-8 of our Report dated June 20, 2000 which
appears in your Annual Report on Form 11-K of The Seagram 401(k) Plan - Spencer
Employees for the fiscal year ended December 31, 1999.
/S/ Gutierrez & Co.
Flushing, New York
June 30, 2000
