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UNITED STATES
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 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 1-14933
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
U.S. TRUST CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
B: Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
U.S. TRUST CORPORATION
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036-1532
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U.S. Trust Corporation has established the Employee Stock Purchase Plan (the
"Plan"). The Plan is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code of 1986, as amended.
REQUIRED INFORMATION
Financial statements and exhibits
(a) Financial statements:
These documents are listed in the index to Financial Statements
(Exhibit 99)
(b) Exhibits:
Consent of Independent Accountants (Exhibit 23)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, U.S. Trust
Corporation has duly caused this Annual Report on Form 11-K for the fiscal year
ended December 31, 1999 to be signed on its behalf by the undersigned hereunto
duly authorized.
U.S. Trust Corporation
Employee Stock Purchase Plan
DATE: March 30, 2000 By /s/Patricia W. McGuire
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Patricia W. McGuire
Managing Director
Chairman of Administrative Committee
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EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-68589) of U.S. Trust Corporation Employee Stock
Purchase Plan of our report dated March 15, 2000, relating to the financial
statements, which appear in this Annual Report on Form 11-K for the fiscal year
ended December 31, 1999.
PricwaterhouseCoopers LLP
New York, New York
March 30, 2000
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Exhibit 99
U.S. TRUST CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
REPORT AND FINANCIAL STATEMENTS
DECEMBER 31, 1999
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U.S. TRUST CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
REPORT AND FINANCIAL STATEMENTS
DECEMBER 31, 1999
CONTENTS
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PAGE
Report of Independent Accountants 1
Statement of Financial Condition 2
Statement of Income and Changes in Plan Equity 3
Notes to Financial Statements 4-6
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative Committee of
U.S. Trust Corporation Employee Stock Purchase Plan
In our opinion, the accompanying statement of financial condition and the
related statement of income and changes in plan equity present fairly, in all
material respects, the financial position of the U.S. Trust Corporation Employee
Stock Purchase Plan (the "Plan") at December 31, 1999, and the income and
changes in plan equity for the year then ended 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 audit. We
conducted our audit 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 audit provides a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
March 15, 2000
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U.S. TRUST CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1999
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ASSETS
Investments, at fair value
U.S. Trust Corporation Stock (cost $3,959,592) $4,955,748
Excelsior Money Fund (cost approximates fair value) 65,865
Accrued interest receivable 17,071
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TOTAL ASSETS 5,038,684
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LIABILITIES AND PLAN EQUITY
Distributions payable 73,650
Due to U.S. Trust Corporation 24,170
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TOTAL LIABILITIES 97,820
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PLAN EQUITY $4,940,864
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U.S. TRUST CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
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Investment income from employer securities
Interest $ 99,913
Discount on shares purchased 996,156
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1,096,069
Participants' contributions 4,024,257
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Total additions 5,120,326
Distributions to participants 179,462
Net increase 4,940,864
Plan Equity
Beginning of year --
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End of year $4,940,864
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U.S. Trust Corporation
Employee Stock Purchase Plan
Notes to Financial Statements
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1. Description of Plan
U.S. Trust Corporation (the "Corporation") established the U.S. Trust
Corporation Employee Stock Purchase Plan (the "Plan") effective as of January 1,
1999. The Plan is a qualified employee stock purchase plan which allows
employees of United States Trust Company of New York and affiliated companies
(collectively "U.S. Trust") to purchase common shares of the Corporation, $1 par
value, at a discount from the market price of such shares. The Plan is not
subject to the requirements of the Employee Retirement Income Security Act of
1974, as amended.
Employees of U.S. Trust are eligible to participate in the Plan if they are
employed on or prior to the August 31 preceding the beginning of an Offering
Period and customarily work at least twenty (20) hours per week. Under the
provisions of the Plan, each eligible employee is granted an option to purchase
stock as of the last business day of the calendar year (the "Exercise Date") in
an amount equal to 85% of the lower of the fair market value of a share on the
first trading day of an Offering Period or on the Exercise Date (the "Purchase
Price"). An Offering Period is a calendar year during which an option to
purchase shares of the Company"s stock is granted and may be exercised. The
first Offering Period commenced on January 1, 1999, and ended on December 31,
1999.
Eligible employees may defer from 1% to 10% of base pay on an after-tax basis.
All payroll deductions and interest thereon are held in trust for participants
under the Plan. No additional employee contributions may be made pursuant to the
Plan.
On the Exercise Date, unless the participant has terminated employment or
otherwise ceased to be eligible to participate in the Plan, each participant's
option to purchase shares under the Plan is exercised automatically. The number
of whole and fractional shares subject to each option is equal to the quotient
of the total payroll deductions and interest thereon held in trust on behalf of
each participant divided by the Purchase Price. The market value of the maximum
number of shares purchased for a participant's account may not exceed $25,000. A
maximum of 350,000 shares of the Corporation may be issued under the Plan (see
Notes to Financial Statements No. 3 for shares purchased for the 1999 Offering
Period).
Upon exercise of the options, the Corporation issues the stock purchased to the
trust accounts maintained on behalf of the participants. Distributions of shares
purchased on behalf of a participant are made when a participant terminates
employment for any reason, including retirement or death, in which case payment
is made to the participant's designated beneficiary. If a participant terminates
employment during an Offering Period, the participant receives a single cash
lump sum distribution of all payroll deductions and interest accrued thereon
credited to the participant, but not yet used to purchase shares.
The Plan provides that a participant who remains in the employ of U.S. Trust
must hold the shares purchased under the Plan for at least five years from the
date of purchase. Shares purchased for participants under the Plan will be held
in trust until at least the end of the five-year period. Participants retain the
voting rights, and dividends are re-invested by the trust in additional shares
on behalf of the participant. Participants may request stock certificates to be
issued for all or a portion of the shares held for their account for at least
five years.
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U.S. Trust Corporation
Employee Stock Purchase Plan
Notes to Financial Statements
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2. Summary of Significant Accounting Policies
Investment Valuation and Income Recognition
- Short-term investment in the Excelsior Money Fund is valued at
cost, which approximates fair value. U.S. Trust is the
investment advisor of the Excelsior Money Fund.
- Common stock of the Corporation is valued at the quoted market
price on the valuation date.
- Interest income is recorded on the accrual basis.
- Dividends are recorded on the ex-dividend date.
Estimates
The presentation 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 revenues and expenses during the reporting period, such
as those regarding fair value. Actual results could differ from those estimates.
Participant Contributions
Contributions are recorded as of the date payroll deductions are made from the
compensation of Plan participants.
Stock Purchase
Stock purchases are recorded on the last day of the Offering Period after the
Purchase Price and number of shares purchased have been determined for each
participant.
Distributions to Participants
Distributions made to terminated participants are recorded at the end of each
quarter and are paid in the following quarter.
3. Stock Purchase
The following summarizes the stock purchased as of December 31, 1999:
January 4, 1999 Closing Price $ 75.375
December 31, 1999 Closing Price $ 80.188
Purchase Price ($75.375 discounted by 15%) $ 64.069
Shares Participant Fair Value at
Purchased Cost Discount December 31,1999
61,802 $3,959,592 $996,156 $4,955,748
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U.S. Trust Corporation
Employee Stock Purchase Plan
Notes to Financial Statements
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4. Income Tax Status
The Plan is an employee stock purchase plan as defined in section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). As such, employees will
not recognize income when options are granted or exercised. The Plan is not
required to and has not requested a determination letter from the Internal
Revenue Service.
5. Administrative Expenses
Officers or employees of U.S. Trust perform certain administrative functions. No
officers or employees receive compensation from the Plan. All expenses
associated with the establishment, operation and administration of the Plan are
borne by U.S. Trust.
6. Plan Termination
The Board of Directors may at any time and for any reason terminate or amend the
Plan. In the event of a Change in Control of the Corporation, any Offering
Period then in progress shall be shortened by setting a new Exercise Date and
any Offering Period then in progress shall end on the Change of Control Exercise
Date.
7. Subsequent Event
On January 13, 2000, The Charles Schwab Corporation ("Schwab") and the
Corporation announced that they had signed an agreement to merge (the "Merger").
The Merger is subject to Federal Reserve Board and other regulatory approvals
and the approval of the Corporation's shareholders. In the event the Merger is
completed, the Year 2000 Offering Period will be shortened and a new Exercise
Date will be set. Following such date, no further contributions to the Plan will
be made. Immediately prior to the Merger, each eligible participant's options
will be exercised automatically. All stock held in trust under the Plan will be
converted to Schwab stock at the Exchange Ratio (3.427 shares of Schwab stock
for each share of the Corporation's stock). The five-year holding period will
remain in place following the Merger.
As of the close of business on January 13, 2000 and March 15, 2000, each share
in the trust had an approximate market value of $133 and $158, respectively.
