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United States
Securities and Exchange Commission
Washington, D.C. 20549
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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 31, 1999
or
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934 For the transition period from _________ to _________
Commission file number 333-63321
Saga Communications, Inc. Employees' 401(K) Savings and Investment Plan
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(Full title of plan)
Saga Communications, Inc.
73 Kercheval Avenue
Grosse Pointe Farms, Michigan 48236
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(Name of Issuer of Securities Held Pursuant to Plan and Address of its
Principal Executive Office)
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Financial Statements and Supplemental Schedule
Saga Communications, Inc.
Employees' 401(k) Savings and
Investment Plan
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Table of Contents
Financial Statements and Supplemental Schedule
December 31, 1999 and 1998
Page
Report of Independent Auditors 4
Financial Statements:
Statements of Assets Available for Benefits - December 31,
1999 and 1998 5
Statements of Changes in Assets Available for Benefits - Years
ended December 1999 and 1998 6
Notes to Financial Statements 7
Supplemental Schedule
Schedule H line 4(i)--Schedule of Assets Held for Investment Purposes 12
Other Information:
Signatures 14
Exhibit 23 - Consent of Independent Auditors 15
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Report of Independent Auditors
Plan Administrator
Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
We have audited the accompanying statements of assets available for benefits of
Saga Communications, Inc. Employees' 401(k) Savings and Investment Plan as of
December 31, 1999 and 1998 and the related statements of changes in 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 auditing standards generally accepted
in the United States. 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 its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes at end of year as of December 31, 1999 is
presented for purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, and is not a required part of the basic financial
statements. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the 1999 basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the 1999
basic financial statements taken as a whole.
/s/ Ernst & Young LLP
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May 18, 2000
Detroit, Michigan
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Statements of Assets Available For Benefits
DECEMBER 31
1999 1998
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ASSETS
Investments, at fair value:
Mutual funds $ 6,604,447 $ 4,788,815
Guaranteed Investment Fund 1,025,494 961,135
Saga Common Stock Fund 1,151,572 703,066
Participant loans 167,941 169,804
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8,949,454 6,622,820
Participant contributions receivable -- 27,586
Employer contributions receivable 169,385 138,399
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Net assets available for benefits $ 9,118,839 $ 6,788,805
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See accompanying notes.
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Statements of Changes in Assets Available For Benefits
YEAR ENDED
DECEMBER 31
1999 1998
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Additions:
Participant contributions $ 1,208,580 $ 1,035,535
Employer contributions 169,385 138,399
Investment income:
Interest 73,049 67,064
Net appreciation in fair value of
investments:
Mutual funds 1,244,288 940,577
Saga common stock fund 237,335 119,883
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Total additions 2,932,637 2,301,458
Deductions:
Benefit payments (602,603) (513,661)
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Net additions 2,330,034 1,787,797
Net assets available for benefits:
Beginning of year 6,788,805 5,001,008
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End of year $ 9,118,839 $ 6,788,805
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See accompanying notes.
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Notes to Financial Statements
Years ended December 31, 1999 and 1998
1. DESCRIPTION OF PLAN
The following description of Saga Communications, Inc. (the "Company")
Employees' 401(k) Savings and Investment Plan (the "Plan") provides only general
information. Participants should refer to the summary plan description for more
complete information.
GENERAL
The Plan is a defined contribution plan which includes, as participants, all
employees who have completed one year of employment and reached the age of
twenty-one. The Plan is administered by the Company and is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Contributions to employees' accounts are effected through voluntary reductions
in their compensation. Annual contributions for each participant are subject to
the participation and discrimination standards of Internal Revenue Code Section
401(k)(3). The Company may make a discretionary match; for 1999 and 1998 the
discretionary employer match was $169,385 and $138,399, respectively.
Upon enrollment, a participant may direct their contributions to any of the
Plan's fund options. Employer contributions are invested in Saga Communications,
Inc. common stock.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of the Company's contributions and Plan earnings. Allocations are
based on participant earnings or account balances, as defined. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's account.
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
VESTING
Participants are immediately vested in their contributions and the employer
discretionary match plus actual earnings thereon.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lessor of $50,000 or 50% of their vested account balance.
Loan terms range from 1-5 years or up to 15 years for purchase of primary
residence. The loans are secured by the balance in the participant's account and
bear interest at a rate as determined by the Plan Administrator which
approximates the prime interest rate in effect on the first business day of the
calendar quarter plus 1%. Principal and interest is paid ratably through monthly
payroll deductions.
DISTRIBUTIONS
Participants or their beneficiaries may receive distributions of their account
balances upon the earlier of reaching age 59-1/2, disability, death or
termination of service, as defined in the Plan. Further, the Plan Administrator
may permit a participant who experiences a qualified financial hardship, as
defined, to receive a distribution or a portion of the participant's account
balance. Such distributions are generally made in a lump sum.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provision of ERISA.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of accounting.
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT VALUATION AND INCOME RECOGNITION
Except for the investment contracts, the Plan's investments are stated at fair
value which equals the quoted market price on the last business day of the plan
year. The shares of mutual funds are valued at quoted market prices which
represent the net asset values of shares held by the Plan at year-end. The
participant loans are valued at their outstanding balances, which approximate
fair value.
Guaranteed investment contracts are recorded at their contract values, which
represent contributions and reinvested income, less any withdrawals plus accrued
interest, because these investments have fully benefit-responsive features. For
example, participants may ordinarily direct the withdrawal or transfer of all or
a portion of their investment at contract value. There are no reserves against
contract values for credit risk of contract issues or otherwise. The average
yield was approximately 5.5% in 1999 and 5.9% in 1998. The crediting interest
rate for these investment contracts is reset semiannually by the issuer but
cannot be less than zero and was 6.05% and 6.25% at December 31, 1999 and 1998,
respectively.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
RECLASSIFICATION
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
1999 1998
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Guaranteed Investment Fund $ 1,025,494 $ 961,135
Saga Common Stock Fund* 1,151,572 703,066
Vanguard Wellington Fund 483,718 517,436
Twentieth Century Ultra Investors Fund 1,545,638 1,016,388
Fidelity Investments Contrafund 1,933,248 1,430,119
CIGNA Stock Index Fund 857,440 695,195
INVESCO Total Return Fund 486,489 479,049
* Non-participant directed
4. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the significant components of changes in net assets related to
the nonparticipant-directed investment is as follows:
YEAR ENDED
DECEMBER 31
SAGA COMMON STOCK FUND: 1999 1998
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Contributions $ 297,455 $ 290,250
Net appreciation in fair value 237,335 119,883
Benefit payments (81,353) (33,051)
Transfers out (4,931) (3,447)
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Net increase 448,506 373,635
Net assets available for benefits at
beginning of year 703,066 329,431
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Net assets available for benefits at
end of year $ 1,151,572 $ 703,066
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Notes to Financial Statements (continued)
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated April 4, 1994, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. However, the Plan has been restated in its entirety
subsequent to the issuance of the determination. The Plan Administrator believes
the Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax exempt.
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Saga Communications, Inc.
Employees' 401(k) Savings and Investment Plan
Employer ID # 38-2683519
Plan # 001
Schedule of Assets Held for Investment Purposes At End of Year
December 31, 1999
<TABLE>
<CAPTION>
IDENTITY DESCRIPTION OF INVESTMENT INCLUDING
OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, CURRENT
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE VALUE
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<S> <C> <C>
* Connecticut General Life Insurance Company Guaranteed Investment Fund $ 1,025,494
* Connecticut General Life Insurance Company CIGNA Stock Index Fund 857,440
* Connecticut General Life Insurance Company CIGNA High Yield Bond Fund 12,856
Fidelity Investments Fidelity Investments Contrafund 1,933,248
Fidelity Investments Fidelity Growth and Income Portfolio Fund 398,708
Invesco Mutual Funds INVESCO Total Return Fund 486,489
Twentieth Century Mutual Funds Twentieth Century Ultra Investors Fund 1,545,638
The Vanguard Group of Investment Companies Vanguard Wellington Fund 483,718
Warburg-Pincus Mutual Funds Warburg-Pincus Emerging Growth Fund 317,652
Warburg-Pincus Mutual Funds Warburg-Pincus International Equity Fund 97,184
Putnam Mutual Funds Putnam Stock Growth Fund 58,253
Janus Mutual Funds Janus Fund 274,637
Janus Mutual Funds Janus Worldwide Fund 106,456
Baron Mutual Funds Baron Asset Fund 32,168
** Saga Communications, Inc. Saga Common Stock Fund 1,151,572
* Participant loans receivable Interest rates 8.0% to 10.0% 167,941
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Total investments $ 8,949,454
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</TABLE>
*Party-in-interest.
** Party-in-interest, Nonparticipant directed fund
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EXHIBIT INDEX
Exhibits
23 Consent of Ernst & Young LLP
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrator of the Plan has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
SAGA COMMUNICATIONS, INC.
EMPLOYEES' 401(K) SAVINGS
AND INVESTMENT PLAN
Date: June 9, 2000 /s/ Marcia K. Lobaito
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Marcia K. Lobaito
Plan Administrator
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