UNITED STATES
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 33-89818, 33-96568, 333-08041 and 333-57107
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
(formerly the CLUBCORP EMPLOYEE STOCK INVESTMENT PLAN)
(Full title of the plan)
CLUBCORP, INC.
(Exact name of issuer of the securities held pursuant to the plan)
3030 LBJ FREEWAY, DALLAS, TEXAS 75234
(Address of principal executive office)
(972) 243-6191
(Issuer's telephone number; including area code)
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements and Supplemental Schedules
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits
as of December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 1999 and 1998 3
Notes to Financial Statements 4
Schedules
1 Item 27(a) - Schedule of Assets Held for Investment
Purposes as of December 31, 1999 9
2 Item 27(d) - Schedule of Reportable Transactions for the
year ended December 31, 1999 10
Independent Auditors' Report
The Board of Trustees
ClubCorp Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for benefits
of ClubCorp Employee Stock Ownership Plan, formerly the ClubCorp Stock
Investment 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 ClubCorp
Employee Stock Ownership Plan as of 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.
Our audits were made 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 as of December 31, 1999 and the schedule of reportable
transactions for the year ended December 31, 1999 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 supplemental schedules 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.
KPMG LLP
June 16, 2000
<PAGE>
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Assets:
ClubCorp, Inc. common stock, at fair value $72,835,191 $65,278,819
Short-term investments, at fair value 1,874,201 1,350,945
Cash 398,892 284,927
Receivables:
Employer contributions 924,656 1,876,109
Employee contributions 81,365 113,121
----------- -----------
1,006,021 1,989,230
----------- -----------
Total assets 76,114,305 68,903,921
Liabilities - miscellaneous payables 11 -
----------- -----------
Net assets available for benefits $76,114,294 $68,903,921
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Additions to net assets attributed to:
Employer contributions $ 1,888,214 $ 2,687,437
Employee contributions 6,503,901 5,894,318
Net appreciation in fair value of investments -
ClubCorp, Inc. common stock 4,536,371 9,326,526
Investment income 109,235 79,776
----------- -----------
13,037,721 17,988,057
Deductions from net assets attributed to:
Benefits paid and withdrawals 5,770,731 5,198,229
Administrative expenses 56,617 155,339
----------- -----------
5,827,348 5,353,568
----------- -----------
Net increase in net assets available for benefits 7,210,373 12,634,489
Net assets available for benefits:
Beginning of year 68,903,921 56,269,432
----------- -----------
End of year $76,114,294 $68,903,921
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
Years ended December 31, 1999 and 1998
(1) General
The ClubCorp Employee Stock Ownership Plan (Plan) is a defined contribution plan
covering employees of ClubCorp, Inc.'s participating subsidiaries (ClubCorp) who
have completed one year of service and worked at least l,000 hours during their
eligibility year of service. The sponsoring employer of the Plan is ClubCorp.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA). Participants should refer to the Plan document for more
complete information.
Prior to January 1, 1999, the Plan was known as the ClubCorp Stock Investment
Plan (Predecessor Plan). The Plan was amended and restated into the ClubCorp
Employee Stock Ownership Plan which is subject to the same eligibility and
matching guidelines of the Predecessor Plan. Funds that were in the Predecessor
Plan before January 1, 1999 remained in the Plan. The primary differences
between the Predecessor Plan and the Plan are provisions that allow participants
to elect to diversify a portion of their account assets upon meeting certain age
and participation requirements and upon termination, retirement or permanent
disability, a participant or beneficiary may elect to receive ClubCorp common
stock in lieu of cash.
(a) Basis of Presentation
The accompanying financial statements have been prepared on an accrual
basis.
(b) Contributions
Participating employees may elect to contribute up to 6% of their
Eligible compensation to the Plan. Contributions to the Plan are
primarily invested in ClubCorp common stock. Participants may elect
to diversify a portion of their account assets upon meeting certain
age and participation requirements. The employer matches 20% of the
employee contributions and may, at its discretion, match up to an
additional 30% of employee contributions. For the years ended December
31, 1999 and 1998, ClubCorp made discretionary contributions of
approximately $586,000 and $1,558,000, respectively.
The maximum amount which may be added to any participant's account in
any year is the lesser of $30,000 or 25% of their compensation for
that year for all ClubCorp defined contribution plans. This maximum
amount includes the participant's share of ClubCorp's contributions.
(c) Participant Accounts
Each participant's account is credited with the allocation of
ClubCorp's contributions based on the participant's contributions to
the Plan. Earnings and losses from investments are allocated to the
participants' accounts based on their individual quarter-end balances.
Forfeitures of terminated participants' nonvested accounts are used to
cover direct administrative expenses of the Plan(see note l(f)).
(d) Vesting
Participants are gradually vested in ClubCorp's contributions as
determined by years of credited service. Full vesting is attained
after seven years of credited service. Participants are always 100%
vested in the account value of their voluntary contributions and
earnings thereon.
(e) Payment of Benefits
Benefits are paid to participants upon retirement, permanent
disability, termination, or to beneficiaries upon death of the
participant. The participant or beneficiary may elect, subject to the
terms of the Plan, to receive his or her benefits in a lump sum cash
distribution, in installments over a fixed period, or through transfer to
another retirement plan in an amount equal to the value of the
participant's account. The participant or beneficiary may also elect to
receive ClubCorp common stock in lieu of cash.
(f) Administrative Expenses
Forfeitures are used by the Plan to pay direct administrative expenses
which amounted to $56,617 and $155,339 in 1999 and 1998, respectively
Indirect expenses and any direct expenses not covered by forfeitures
are paid by ClubCorp. Indirect administrative expenses of $223,501 and
$313,775 were paid by ClubCorp on behalf of the Plan in 1999 and 1998,
respectively.
(g) Plan Termination
Although it has not expressed any intent to do so, ClubCorp has the
right to terminate the Plan at any time subject to the provisions of
ERISA. If the Plan were to terminate, participants would automatically
become fully vested regardless of years of service and the net assets
would be distributed to Plan participants based on each participant's
account balance.
(h) Form 5500 Reconciliation
The net assets available for benefits recorded in the Plan's Form 5500
as of December 31, 1999 and 1998 are less than the corresponding amounts
reported in the accompanying financial statements by $2,398,064 and
$1,153,951, respectively. These differences relate to benefits payable
at year-end for terminations.
(i) 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 reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions and deductions
during the reporting period. Actual results could differ from those
estimates.
(2) Investments
The following table presents the fair value of investments at December
31, 1999 and 1998.
<TABLE>
<CAPTION>
1999 1998
---------------------- ------------------------
Units/ Fair Units/ Fair
shares value shares value
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Investment at estimated fair
value - ClubCorp
common stock 4,112,659 $72,835,191 3,932,459 $65,278,819
Investment at quoted market
value - Wachovia Bank
Short-Term Investment Fund 1,874,201 1,874,201 - -
Investment at quoted market
value - Dreyfus Institutional
Government Money
Market Fund - - 1,350,945 1,350,945
----------- -----------
$74,709,392 $66,629,764
=========== ===========
</TABLE>
If available, quoted market prices are used to value investments of the
Plan. Because there is no public market for the common stock of ClubCorp,
a Financial Advisor has been engaged by the trustees of the Plan to
confirm the fairness of the Formula Price for purposes of the Plan by
forming independent appraisals. Based upon appraisals the Financial
Advisor confirms whether or not the Formula Price falls within the range
of fair market value of the common stock on the date of each appraisal and
at each fiscal year end. If there is any discrepancy between the Formula
Price and the range of fair market value of the common stock as determined
by the Financial Advisor, ClubCorp expects that it would adjust the
Formula Price so that it falls within the range of fair market value as
determined by the Financial Advisor. All purchases of common stock by the
Plan were made on or shortly after an appraisal date at the Formula
Price as confirmed by the Financial Advisor. During the years ended
December 31, 1999 and 1998, purchases of common stock made by the Plan
were from two individual shareholders and ClubCorp.
(3) Employer Contributions Receivable
Matching contributions are allocated to employees' accounts at the end
of each quarter; therefore, the accompanying financial statements reflect
a receivable for the fourth quarter's Employer match credited to
employees' accounts but not received at December 31, 1999 and 1998. At
December 31, 1999 and 1998, Employer contributions receivable includes
the Employer discretionary contribution of approximately $586,000 and
$1,558,000, respectively (see note 1(b)).
(4) Federal Income Taxes
The Plan obtained its latest tax determination letter on April 28,
2000, in which the Internal Revenue Service stated that the Plan was
in compliance with the applicable requirements of the Internal Revenue
Code (IRC). The Plan administrator believes that the Plan is currently
being operated in compliance with the applicable requirements of the IRC.
(5) Financial Instruments
The carrying values of financial instruments such as cash, receivables and
liabilities approximate their fair values because of the nature and
short maturity of these instruments. ClubCorp common stock and short-term
investments are carried at fair value.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CLUBCORP EMPLOYEE STOCK
OWNERSHIP PLAN (formerly the ClubCorp
Stock Investment Plan)
CLUBCORP, INC.
Plan Administrator
By: /s/Jeffrey P. Mayer
-----------------------
Jeffrey P. Mayer
Chief Financial Officer
Date: June 30, 2000
------------------------
<PAGE>
Schedule 1
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1999
<TABLE>
<CAPTION>
Description of Current
Identity of issue investment value
------------------------------------------ ---------------- -----------
<S> <C> <C>
Common stock - ClubCorp, Inc.* 4,112,659 shares $72,835,191
Wachovia Bank - Short-Term Investment Fund 1,874,201 units 1,874,201
*Party-in-interest
</TABLE>
See accompanying independent auditors' report.
<PAGE>
Schedule 2
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
Item 27(d) - Schedule of Reportable Transactions
For the year ended December 31, 1999
<TABLE>
<CAPTION>
Expense
Aggregate incurred
Description of number of Purchase Sale Lease with Cost of
asset transactions price price rental transaction asset
----------------- ------------ ----------- ----------- ------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Purchases:
Wachovia Bank Short-Term
Investment Fund Money market fund 146 $16,685,106 - - - $16,685,106
Sales:
Wachovia Bank Short-Term
Investment Fund Money market fund 173 - $14,810,905 - - 14,810,905
Current
value of
asset on Net
transaction gain
date (loss)
----------- ------
<S> <C> <C>
Purchases:
Wachovia Bank Short-Term
Investment Fund $16,685,106 -
Sales:
Wachovia Bank Short-Term
Investment Fund 14,810,905 -
</TABLE>
