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EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 26, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission file number 1-14378
A. ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
(Full title of the plan)
B. ACME METALS INCORPORATED
(Name of issuer of the securities held pursuant to the plan)
13500 South Perry Avenue
Riverdale, IL 60827-1182
(Address of principal executive office)
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ACME METALS INCORPORATED
SALARIED EMPLOYEES'
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND
ADDITIONAL INFORMATION
DECEMBER 31, 1999 AND 1998
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
PAGE(S)
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits
at December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for
Plan Benefits for the Year Ended December 31, 1999 3
Notes to Financial Statements 4-9
Additional Information:
Schedule of Assets Held for Investment Purposes
at December 31, 1999 Schedule I
All other schedules of additional financial information required by Section
2520.103-10 of the Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA have been omitted because they are not applicable.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and the Administrative Committee
of the Acme Metals Incorporated
Salaried Employees' Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of Acme Metals Incorporated Salaried Employees' Retirement Savings
Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets
available for plan benefits for the year ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States. 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 of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes at December 31, 1999 is presented for purposes of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
The accompanying financial statements have been prepared assuming the Plan will
continue as a going concern. As discussed in Note 1 - Plan Description, Acme
Metals Incorporated and its subsidiary companies filed voluntary petitions for
protection and reorganization under Chapter 11 of the United States Bankruptcy
Code which raises substantial doubt about the Plan's ability to continue as a
going concern. These financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
PricewaterhouseCoopers LLP
Chicago, Illinois
June 27, 2000
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1999 AND 1998
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As of December 31,
1999 1998
---- ----
Investments at market value:
Investment in Acme Stock Fund Master Trust $ 397,760 $ 229,263
Registered investment company 53,278,081 55,746,762
Participant loans 282,012 333,120
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Net assets available for plan benefits $53,957,853 $56,309,145
=========== ===========
The accompanying notes are an integral part of these financial statements.
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
Additions:
Investment income (loss):
Interest and dividend income, investments $3,008,209
Interest income, participant loans 22,638
Decrease in net value of investment in Acme
Stock Fund Master Trust (25,494)
Net appreciation in fair value of investments 4,075,412
----------
Total investment income: 7,080,765
Contributions:
From participants 1,401,001
From employer 1,449,747
----------
Total contributions 2,850,748
Transfer from ESOP (See Note 8) 317,149
----------
Total additions 10,248,662
----------
Deductions:
Distributions and withdrawals (12,599,954)
----------
Total deductions (12,599,954)
----------
Decrease in assets during the year (2,351,292)
Net assets available for plan benefits:
At beginning of year 56,309,145
----------
At end of year $53,957,853
==========
The accompanying notes are an integral part of these financial statements.
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AT DECEMBER 31, 1999 AND 1998
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1. PLAN DESCRIPTION
The following brief description of the Acme Metals Incorporated Salaried
Employees' Retirement Savings Plan (the "Plan") is provided for general
information purposes. Participants should refer to the Plan agreement for
more complete information.
GENERAL
The Plan is a defined contribution savings plan covering all eligible
employees of Acme Metals Incorporated (the "Company") and participating
affiliated companies. The Plan is administered by the Administrative
Committee for the Acme Metals Incorporated Salaried Employees' Retirement
Savings Plan and is subject to the provisions of the Employee Retirement
Income Security Act of 1974. Vanguard Fiduciary Trust Company (the
"Trustee") serves as the Plan's trustee and recordkeeper.
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States. On
September 28, 1998, the Company and its subsidiaries filed voluntary
petitions for protection and reorganization under Chapter 11 of Title 11
of the United States Code in the United States Bankruptcy Court for the
District of Delaware. Although Chapter 11 proceedings raise substantial
doubt about the Company's ability to continue as a going concern, the
Plan's financial statements have been prepared on a going concern basis
which contemplates the continued operation of the Plan. The Plan's
financial statements do not reflect adjustments, if any, that might
result from the outcome of this uncertainty.
ELIGIBILITY
A full-time employee becomes eligible on either April 1, July 1, October
1, or January 1 coinciding with or following the date on which three
months of service is completed. Part-time and temporary salaried
employees are generally eligible to participate after completing one year
of continuous service.
INVESTMENTS
The Plan provides participants with eight investment alternatives. The
Acme Stock Fund, however, was closed to new purchases after February 29,
1996. Each participant directs the proportion of his or her account that
is to be invested in each of the respective investment alternatives.
Participants are entitled to change their investment elections at any
time, with certain restrictions placed on executive officers and
directors of the Company for the Acme Stock Fund which is part of the
Acme Stock Fund Master Trust (the "Master Trust").
CONTRIBUTIONS AND VESTING
The Company contributes 7.5% of participants' eligible earnings, as
defined, during each payroll period on behalf of each participant.
Effective June 1, 1998 this percentage was reduced to 5.5% of
participants' eligible earnings. Such contributions consist of 401(k) and
retirement savings plan contributions, as specified in the Plan.
Participants' voluntary pre-tax contributions are permitted in an amount
not to exceed 10% of their individual eligible earnings. Effective
January 1, 1999, voluntary pre-tax 401(k) contributions in the SERSP
increased to 15% of an employee's salary.
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AT DECEMBER 31, 1999 AND 1998
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Participant and Company 401(k) contributions, as defined, vest upon
deduction and deposit, respectively. Company retirement savings plan
contributions are fully vested after five years of service. Forfeitures
of unvested amounts are used to offset Company contributions. Forfeitures
as of December 31, 1999 of $1,962 remained available to offset Company
contributions.
Contributions are subject to certain limitations as defined by the
Internal Revenue Code.
DISTRIBUTIONS AND WITHDRAWALS
In the event of retirement, death, disability, or termination of
employment for any other reason, a participant's vested interest in the
Plan may be distributed in a lump-sum payment, or under certain
circumstances, in a series of installments. Distributions are made in
cash except that participants may elect to receive the portion invested
in the Master Trust in whole shares of Company common stock.
Under limited circumstances, participants may withdraw voluntary pre-tax
contributions and portions of Company contributions subject to certain
restrictions.
LOANS
Any participant may take a loan from the portion of their account
attributable to their voluntary pre-tax contributions. Loans must be a
minimum of $1,000, with a maximum of the lesser of 50 percent of the
vested portion of the account or $50,000 reduced by the highest
outstanding loan balance in their account for the prior twelve month
period. Loan terms generally do not exceed five years, but loans for the
purchase of a principal residence may have terms up to ten years. Each
loan bears an interest rate which is commensurate with current market
rates.
TERMINATION OF THE PLAN
The Company anticipates and believes that the Plan will continue without
interruption, but reserves the right to discontinue the Plan at any time.
Upon termination or partial termination of the Plan, the balance of the
participants' accounts shall become fully vested and nonforfeitable, and
the Administrative Committee shall direct the Trustee in the method and
manner of distribution of the Plan assets to participants or their
beneficiaries.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of
accounting. Distributions to participants, however, are recorded when
paid. Participant distributions payable at year end are appropriately not
presented as a liability in the statement of net assets available for
plan benefits or as a distribution to participants in the statement of
changes in net assets available for plan benefits in accordance with
accounting principles generally accepted in the United States
(see Note 3).
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AT DECEMBER 31, 1999 AND 1998
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VALUATION OF INVESTMENTS
All investments, except for participant loans, are presented at fair
value based upon published market quotations. Loans receivable from
participants are recorded at historical value, which is considered to
approximate fair value. Some assets of the Plan are held in the Master
Trust. Ownership of units of participation in the Master Trust entitles
the Plan to an undivided interest in the assets of the Master Trust and
in the earnings and losses thereof. See Note 5 for a general description
of the Master Trust and Note 6 for financial information related to the
Master Trust.
NET APPRECIATION IN FAIR VALUE OF INVESTMENTS
The Plan presents in the statement of changes in net assets available for
plan benefits the net depreciation in the fair value of its investments
which consists of the realized gains and losses and the unrealized
appreciation (depreciation) on those investments.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Purchases and sales of securities, including related gains and losses,
are recorded as of the transaction date. Realized gains and losses on the
sale of investments are calculated as sales proceeds less the current
value as of the beginning of the year (or acquisition cost if acquired
during the year). Unrealized appreciation and depreciation of investments
is calculated as the current value of investments held at the end of the
year less their current value as of the beginning of the year (or
acquisition cost if acquired during the year).
ADMINISTRATIVE EXPENSES
In accordance with the Plan agreement, investment related expenses are
paid from Plan assets and are reflected in the accompanying financial
statements as an adjustment to the basis of securities purchased and
sold. All other administrative expenses are paid by the Company.
USE OF ESTIMATES
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires the use of
estimates that affect the reported amounts of net assets available for
plan benefits at the date of the financial statements and the reported
amounts of changes in net assets available for plan benefits during the
reporting period. Actual results could differ from these estimates.
3. BENEFIT OBLIGATIONS
There were no outstanding benefit obligations for persons who had
withdrawn from participation in the Plan as of December 31, 1999 and
1998.
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AT DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
4. SIGNIFICANT INVESTMENTS
Following are investments representing 5 percent or more of the Plan's
net assets available for plan benefits at December 31, 1999 and 1998.
1999 1998
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Vanguard 500 Index Fund $14,632,749 $13,670,244
Vanguard Asset Allocation Fund 14,803,157 18,383,033
Vanguard Prime Money Market Fund 9,774,315 12,603,045
Vanguard PRIMECAP Fund 9,361,130 6,343,700
5. GENERAL DESCRIPTION OF THE ACME STOCK FUND MASTER TRUST
Monies received from plans participating in the Master Trust are held and
administered by the Trustee. At December 31, 1998 the Master Trust
includes the assets of the Plan, the Alpha Tube Corporation Employees'
401(k) Retirement Plan (the "Alpha Plan") and the Acme Metals
Incorporated Employee Stock Ownership Plan (the "ESOP"). At December 31,
1999 the Master Trust includes the assets of the Plan and the Alpha Plan.
As described in Note 8, the ESOP's assets were merged with the Plan in
1999. The Plan holds a 99.1% and 41.3% interest in the Master Trust
assets as of December 31, 1999 and 1998, respectively. Master Trust
assets include investments in 600,447 shares of Company common stock with
a market value of $156,116.
The Trustee maintains separate accounting of all contributions,
distributions, and income and expenses of the Master Trust. The Trustee
credits to each participating plan's account units of participation in
the Master Trust. The value of units credited is equal to the value of
Master Trust assets divided by the number of units.
6. ACME STOCK FUND MASTER TRUST
The Statements of Net Assets Available for Benefits of Participating
Plans as of December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Investments at market value:
Vanguard Prime Money Market Fund $ 244,021 $ 302,649
Acme common stock 156,116 245,942
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Total investments 400,137 548,591
Miscellaneous 1,203 5,941
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Net assets available for benefits of participating plans $ 401,340 $ 554,532
=========== ===========
</TABLE>
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AT DECEMBER 31, 1999 AND 1998
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The Master Trust Statement of Changes in Net Assets Available for
Benefits of Participating Plans for the year ended December 31, 1999 is
as follows:
1999
-----
Investment income (loss);
Interest and dividends $ 27
Net depreciation in fair value of investments (25,521)
Contributions:
From participants -
From employer -
Distributions and withdrawals (90,798)
Loans to participants (384)
Loans payments -
Interfund transfers (36,516)
--------
Decrease in assets during year (153,192)
Net assets available for benefits of participating plans:
At beginning of year 554,532
-------
At end of year $401,340
========
7. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated October 25, 1995 that the Plan is qualified in accordance
with the applicable sections of the Internal Revenue Code ("IRC"). The
Plan has been amended and restated since receiving the determination
letter. However, the Administrative Committee and the Company believe the
Plan is designed and is currently being operated in accordance with IRC
requirements. Therefore, no provision for income taxes has been included
in the Plan's financial statements.
8. TRANSFER OF EMPLOYEE STOCK OWNERSHIP PLAN ASSETS
On February 22, 1999, the ESOP was terminated and all of the ESOP's
assets were transferred into the respective participants' accounts in the
Plan on a fully vested basis. Assets with a market value of $3,849 and
$313,300 were transferred into Vanguard's Prime Money Market Fund and the
Acme Metals Stock Fund Master Trust, respectively.
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ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AT DECEMBER 31, 1999 AND 1998
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9. RELATED PARTY TRANSACTIONS
The Plan invests in shares of mutual funds managed by Vanguard Fiduciary
Trust Company ("Vanguard"). Vanguard acts as trustee for only those
investments as defined by the Plan. Transactions in such investments
qualify as party-in-interest transactions which are exempt from the
prohibited transaction rules under ERISA.
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SCHEDULE I
ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT MARKET VALUE
<S> <C> <C>
*Acme Stock Fund Master Trust Investment in master trust $ 397,760
*Vanguard Windsor Fund Registered investment co. 2,353,854
*Vanguard Prime Money Market Fund Registered investment co. 9,774,315
*Vanguard 500 Index Fund Registered investment co. 14,632,749
*Vanguard PRIMECAP Fund Registered investment co. 9,361,130
*Vanguard Asset Allocation Fund Registered investment co. 14,803,157
*Vanguard International Growth Fund Registered investment co. 1,122,439
*Vanguard Total Bond Market Index Fund Registered investment co. 1,230,437
*Participant Loans Participant loans with interest 282,012
rates ranging from 8.25%-9.00% -----------
$53,957,853
*Represents party in interest
</TABLE>
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-19437) of Acme Metals Incorporated of our report
dated June 27, 2000 relating to the financial statements of Acme Metals
Incorporated Salaried Employees' Retirement Savings Plan, which appears in this
Form 11-K.
PricewaterhouseCoopers LLP
Chicago, Illinois
June 27, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
ACME METALS INCORPORATED
SALARIED EMPLOYEES' RETIREMENT SAVINGS PLAN
/s/ Jerry F. Williams June 28, 2000
--------------------------------------------------------
Jerry F. Williams
Member of Administrative Committee for the Acme Metals
Incorporated Salaried Employees' Retirement Savings Plan
