-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E3SBXlsMbzwRXDXCne8+MDbEQraSZirptwHqjJ8wOSW+FNb2e5+yqA0sRvSXrFdv zCYJ2P0HDhgXzsZv+wXclQ== 0000950123-98-006334.txt : 19980630 0000950123-98-006334.hdr.sgml : 19980630 ACCESSION NUMBER: 0000950123-98-006334 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19980629 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEAGRAM CO LTD CENTRAL INDEX KEY: 0000088188 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] IRS NUMBER: 000000000 STATE OF INCORPORATION: CA FISCAL YEAR END: 0701 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-02275 FILM NUMBER: 98656869 BUSINESS ADDRESS: STREET 1: 1430 PEEL ST STREET 2: H3A 1S9 CITY: MONTREAL QUEBEC CANA STATE: A8 BUSINESS PHONE: 5148495271 MAIL ADDRESS: STREET 1: C/O JOSEPH E SEAGRAM & SONS INC STREET 2: 375 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10152 10-K/A 1 AMENDMENT NO. 1 ON FORM 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1997 COMMISSION FILE NUMBER 1-2275 THE SEAGRAM COMPANY LTD. (Exact name of registrant as specified in its charter) Canada None (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1430 Peel Street, Montreal, Quebec, Canada H3A 1S9 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (514) 849-5271 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the fiscal year ended June 30, 1997 (the "Form 10-K") as set forth below and in the pages attached hereto: Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K Item 14 is hereby amended and supplemented pursuant to Rule 15d-21 under the Securities Exchange Act of 1934, as amended, to include as Exhibits 99(a), 99(b), 99(c), 99(d), 99(e) and 99(f) to the Form 10-K the attached Forms 11-K with respect to the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates, the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Universal Employees, the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - UNI Employees, the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Spencer Employees, the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates and the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates, respectively. 2 2 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. THE SEAGRAM COMPANY LTD. By /s/ Daniel R. Paladino --------------------------------------------------- Daniel R. Paladino Executive Vice President, Legal and Environmental Affairs Date: June 29, 1998 EX-99.A 2 FORM 11-K - EMPLOYEES OF JOSEPH E. SEAGRAM & SONS 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, 1997 COMMISSION FILE NUMBER 1-2275 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES 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) 2 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (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, 1997 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 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. RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES By /s/ John Borgia ------------------------------- John Borgia Member of Investment Committee Date: June 29, 1998 4 4 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 5 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES INDEX TO FINANCIAL STATEMENTS Page Independent Auditors' Report 1 Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4 6 INDEPENDENT AUDITORS' REPORT To the Administrative Committee of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates We have audited the accompanying statements of net assets available for benefits of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Plan") as of December 31, 1997 and 1996, 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 audits 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 Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates at December 31, 1997 and 1996, 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 26, 1998 7 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, -------------------------------- 1997 1996 ------------- ------------ INVESTMENTS (Note 3) Money Market Fund: State Street STIF Unitized Fund (cost of $30,285,051) $ -- $ 13,467,503 Stable Income Fund: The LaSalle Income Plus Fund (cost of $30,488,226) -- 30,488,226 Bond Fund: Putnam Income Fund, Class A Shares (cost of $12,288,286) -- 12,814,725 S&P 500 Index Fund: State Street S&P 500 Flagship Fund Series C (cost of $47,901,676) -- 51,590,899 Managed Equity Fund: Lazard Equity Portfolio Fund (cost of $13,913,862) -- 15,144,694 Growth Equity Fund: Brandywine Fund Inc. Common Shares (cost of $34,659,726) -- 42,827,130 Seagram Stock Fund: The Seagram Company Ltd. Common Shares (cost of $11,494,075) -- 17,411,150 Collective Short Term Investment Fund (cost of $419,813) 419,813 The Coca-Cola Company Stock Fund: The Coca-Cola Company Common Stock (cost of $618,567) -- 5,717,443 Collective Short Term Investment Fund (cost of $125,291) -- 125,291 Loans to Participants -- 8,807,386 ------------- ------------ Total Investments $ -- $198,814,260 ------------- ------------ RECEIVABLES Dividends and Interest $ -- $ 224,992 Proceeds from Unsettled Sales -- 160,500 ------------- ------------ Total Receivables -- 385,492 ------------- ------------ TOTAL ASSETS -- 199,199,752 ------------- ------------ LIABILITIES Cost of Unsettled Purchases -- 100,213 ------------- ------------ Total Liabilities -- 100,213 ------------- ------------ Net assets held in trust by Bank of New York (Note 12) 233,648,433 -- ------------- ------------ NET ASSETS AVAILABLE FOR BENEFITS $ 233,648,433 $199,099,539 ============= ============
The accompanying notes are an integral part of the financial statements. -2- 8 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, ---------------------------------- 1997 1996 ------------- ------------- CONTRIBUTIONS Participating Employees $ 16,179,744 $ 15,803,003 Participating Companies 3,051,881 3,005,234 ------------- ------------- 19,231,625 18,808,237 ------------- ------------- INVESTMENT ACTIVITIES Investment Income Money Market Fund -- 590,523 Stable Income Fund -- 1,727,962 Bond Fund -- 852,725 S&P 500 Index Fund -- -- Managed Equity Fund -- 221,938 Growth Equity Fund -- 352,361 Seagram Stock Fund -- 320,533 The Coca-Cola Company Stock Fund -- 69,537 ------------- ------------- Total Investment Income -- 4,135,579 ------------- ------------- Realized Net Gain on Sale of Investments Bond Fund -- 269,530 S&P 500 Index Fund -- 14,010,351 Managed Equity Fund -- 998,472 Growth Equity Fund -- 2,207,821 Seagram Stock Fund -- 1,571,315 The Coca-Cola Company Stock Fund -- 1,198,239 ------------- Total Realized Net Gain on Sale of Investments -- 20,255,728 ------------- Unrealized Appreciation (Depreciation) on Investments Bond Fund -- (641,908) S&P 500 Index Fund -- (6,189,076) Growth Equity Fund -- 5,557,795 Managed Equity Fund -- 781,628 Seagram Stock Fund -- 516,599 The Coca-Cola Company Stock Fund -- 725,091 ------------- ------------- Total Unrealized Appreciation on Investments -- 750,129 ------------- ------------- Investment Managers' and Other Fees Money Market Fund -- (11,923) S&P 500 Index Fund -- (60,833) Seagram Stock Fund -- (20,458) Stable Income Fund -- (58,399) Growth Equity Fund -- (39,693) ------------- ------------- Total Investment Managers' and Other Fees -- (191,306) ------------- ------------- Increase in Plan Equity from Investment Activities -- 24,950,130 ------------- ------------- INVESTMENT INCOME ON ASSETS HELD BY BANK OF NEW YORK (NOTE 11) Net appreciation in fair value of investments 25,269,817 -- Dividends 359,043 -- Interest 3,916,535 -- Administrative expenses (223,052) -- PARTICIPANT WITHDRAWALS (14,005,074) (8,687,945) ------------- ------------- INCREASE IN PLAN EQUITY 34,548,894 35,070,422 PLAN EQUITY AT BEGINNING OF YEAR 199,099,539 164,029,117 ------------- ------------- PLAN EQUITY AT END OF YEAR $ 233,648,433 $ 199,099,539 ============= =============
The accompanying notes are an integral part of the financial statements. -3- 9 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Plan") conform with generally accepted accounting principles. The more significant accounting policies are: 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., Uni Distribution Corporation and Spencer Gifts, Inc. 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 and The Coca-Cola Company common stock 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. 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan established as of August 1, 1985 by Joseph E. Seagram & Sons, Inc. (the "Company"). The Plan covers employees of the Company and certain of its United States subsidiaries (collectively, the "Participating Companies") whose annual base salary or regular wages, (excluding overtime, bonuses, commissions or other special or contingent payments) exceeds $15,186 as of December 31, 1997 (increased on the last day of each year by 4%) and who are either (i) salaried employees, or (ii) hourly employees not employed in a classification designated by the Participating Companies from time to time, excluding various categories of employees specified in the Plan (including persons represented by a collective bargaining agent, persons employed on a special basis, and persons employed by an operating unit of the Participating Companies to which the Plan has not been extended). The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's Accounts by the participant and, amounts contributed, under certain circumstances, by the Participating -4- 10 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN (continued) 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 various Accounts specified in the Plan including the Pre-Tax Account, Company Match Account, After-Tax Account and Rollover Account. 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 Company through an Administrative Committee appointed by the Board of Directors of the Company. Effective November 1, 1987, the Thrift Plan for Employees of the Wine Spectrum Companies (the "Wine Spectrum Plan") was merged with the Plan. The eligible employees of the Wine Spectrum Plan became members of the Plan. As a result of the merger, the Plan retains the Coca-Cola Company Stock held by the Wine Spectrum Plan; however, no election may be made to transfer any funds into the Coca-Cola Company Stock Fund. 3. INVESTMENT PROGRAM During the year ended December 31, 1997, the Plan was comprised of seven investment funds: (i) the Money Market Fund investing in the State Street Yield Enhanced STIF Fund (which replaced the State Street STIF Unitized Fund on October 4, 1997) managed by State Street Bank and Trust Company; (ii) the Stable Income Fund investing in the Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund investing in Putnam Income Fund, Class A Shares managed by Putnam Investment Management; (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 Friess Associates; and (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares. 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, 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 17% (in the aggregate) of their annual salary (as defined in the Plan), in multiples of 1%, in any combination. Highly-compensated employees, as defined, may elect to contribute from 1% to 10% of their annual salary on a pre-tax basis and from 1% to 17% of their annual salary on an after-tax basis; provided, the aggregate percentage of the contributions does not exceed 17% of their annual salary. Pre-tax Contributions and After-Tax Contributions are subject to limitations imposed by federal law for qualified retirement plans. The Plan provides for mandatory matching contributions by the Participating Companies payable to the participants' Company Match Account. The Participating Companies, except as herein noted, contribute on behalf of the participants 25% of the participants' Pre-Tax Contributions not exceeding 6% of their Pre-Tax Contributions. The maximum Company matching contribution is $1,125 a year. Tropicana Products, Inc., a subsidiary of the Company, contributes, without a cap, to the Company Match Account on behalf of the participants 50% of the participants' aggregate Pre-tax and After-Tax Contributions not exceeding 6% of their combined Contributions. The Participating Companies' matching contributions are subject to limitations imposed by federal law 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"). -5- 11 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 4. CONTRIBUTIONS (continued) The Participating Companies may make discretionary contributions to participants' Company Match Accounts, in an amount to be determined by the Participating Companies. The Participating Companies have not made discretionary contributions since the inception of the Plan. 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her Pre-Tax, After-Tax and Rollover Accounts. He or she has a non-forfeitable right to the value of his or her Company Match Account upon retirement, Disability (as defined in the Plan) or death. Upon termination of employment for any other reason, a participant vests 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 retirement, 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. 6. DISTRIBUTIONS Upon termination of employment, after retirement 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 retirement, Disability or death, the participant shall receive only the value of the vested portion of his or her Accounts (See Note 5). In accordance with the Plan, a terminated employee may elect to receive an immediate distribution of his or her Accounts. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts, in accordance with the provisions of the Plan. -6- 12 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 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 August 14, 1995 that the Plan is qualified under Section 401(a) of the Internal Revenue Code. The Plan has been subsequently amended and a request (dated March 16, 1998) to the Internal Revenue Service for a favorable determination with respect to the Plan's continued qualification in light of such amendments is currently pending. 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 expenses including trustee, custodial, and some 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. -7- 13 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 11. ASSETS HELD IN TRUST Effective January 1, 1997, the assets of the Plan are invested in the Master Trust held by the Trustee where the assets of related employee benefit plans of affiliates are invested on a commingled basis. Assets of three affiliates' plans were transferred on January 1, 1997 to the Master Trust. The Master Trust net assets consist of the following classification of assets and liabilities as of December 31, 1997. Assets Investments held in trust at fair value determined by quoted market prices: Money Market Fund State Street Yield Enhanced STIF Fund $ 24,089,219 Stable Income Fund The LaSalle Income Plus Fund 34,562,612 Bond Fund Putnam Income Fund, Class A Shares 27,015,278 S&P 500 Index Fund State Street S&P 500 Flagship Fund, Series C 133,217,637 Managed Equity Fund Lazard Equity Portfolio Fund 30,054,896 Growth Equity Fund Brandywine Fund Inc. Common Shares 58,963,046 Seagram Stock Fund The Seagram Company Ltd. Common Shares 15,210,786 Collective Short Term Investment Fund 523,383 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,922,692 Collective Short Term Investment Fund 103,633 Loans to Participants 10,426,983 ------------ Total Investments 338,090,165 ============ Receivables Accrued interest and dividends 300,821 Proceeds from securities sold 5,274,926 ------------ Total Receivables 5,575,747 ------------ Total assets 343,665,912 ============
-8- 14 11. ASSETS HELD IN TRUST (continued) Liabilities Accounts payable for securities purchased 4,865,553 Administrative expenses 8,834 Benefit payments 519,622 ------------ Total liabilities 5,394,009 ------------ Net Assets $338,271,903 ============
As of December 31, 1997, the equitable share of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates in the Master Trust is 69.1%. As of December 31, 1997, the net assets of the Master Trust available to the Plan for benefits in the individual investment funds were as follows: Money Market Fund $11,471,985 Stable Income Fund 31,027,495 Bond Fund 15,400,892 S & P 500 Index Fund 74,878,658 Managed Equity Fund 23,293,060 Growth Equity Fund 50,642,884 Seagram Stock Fund 14,403,216 The Coca-Cola Company Stock Fund 4,025,633 Loan accounts 8,504,610 ------------ Total $233,648,433 ============
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:
December 31, 1997 ------------ Bond Fund $ 436,843 S & P 500 Index Fund 35,154,443 Managed Equity Fund 4,172,355 Growth Equity Fund 5,076,157 Seagram Stock Fund (2,917,700) The Coca-Cola Company Stock Fund 1,104,840 ----------- Investment gains (net of investment expenses/ losses) 43,026,938 ----------- Interest 5,497,996 Dividends 385,589 ----------- Investment Income $48,910,523 ===========
13. Subsequent Events In connection with the proposed initial public offering of Tropicana Products, Inc. ("Tropicana"), it is anticipated that Tropicana will establish a separate plan and trust. Assets and liabilities of the Plan attributable to Accounts of employees of Tropicana and its subsidiaries presently held in the Master Trust will be transferred to a new trust. -9- 15 The Seagram Company Ltd. The Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates We hereby consent to the incorporation by reference in Registration Statement Nos. 33-2043 and 33-99122 on Form S-8 of our Report dated June 26, 1998 which appears in your Annual Report on Form 11-K of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates for the fiscal year ended December 31, 1997. /s/ Gutierrez & Co. Flushing, New York June 29, 1998 -10- EX-99.B 3 FORM 11-K - UNIVERSAL EMPLOYEES 1 EXHIBIT 99(b) 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, 1997 COMMISSION FILE NUMBER 1-2275 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL 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) 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates-Universal Employees (the "Universal 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 Universal Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Universal Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Price Waterhouse LLP, independent accountants. 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. RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES By /s/ John Borgia ----------------------------- John Borgia Member of Investment Committee Date: June 29, 1998 4 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES REPORT AND FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 5 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES INDEX TO FINANCIAL STATEMENTS* Page Report of Independent Accountants....................................... 1 Statements of Net Assets Available for Plan Benefits (with Fund Information) at December 31, 1997 and 1996........................... 2 Statement of Changes in Net Assets Available for Plan Benefits (with Fund Information) for the year ended December 31, 1997.................. 3 Notes to Financial Statements........................................... 4 * All schedules required to be filed with the Department of Labor have been omitted because the schedules are not applicable. 6 REPORT OF INDEPENDENT ACCOUNTANTS June 26, 1998 To the Participants and Administrative Committee of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Universal Employees In our opinion, the accompanying statements of net assets available for plan benefits as of December 31, 1997 and 1996 and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1997 present fairly, in all material respects, the net assets available for plan benefits of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Universal Employees (the Plan, formerly the MCA INC. Employee Savings Plan) at December 31, 1997 and 1996, and the changes in net assets available for plan benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's Administrative Committee; 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 generally accepted auditing standards 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. /s/ Price Waterhouse LLP 1 7 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES DECEMBER 31, 1997 AND 1996 STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
Money Stable S&P 500 Managed Growth Market Income Bond Index Equity Equity Fund Fund Fund Fund Fund Fund ---- ---- ---- ---- ---- ---- December 31, 1997 - ----------------- Assets held in Master Trust (Note 9) $11,422,325 $ 3,164,254 $10,672,837 $54,182,651 $ 6,357,839 $ 7,960,564 Contributions receivable 68,224 18,907 63,439 321,738 37,791 47,317 Accrued income 55,577 16,712 -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Net assets available for Plan benefits $11,546,126 $ 3,199,873 $10,736,276 $54,504,389 $ 6,395,630 $ 8,007,881 =========== =========== =========== =========== =========== ===========
Seagram Stock Loan Fund Account Total ---- ------- ----- December 31, 1997 - ----------------- Assets held in Master Trust (Note 9) $ 1,354,459 $ 1,621,555 $ 96,736,484 Contributions receivable 8,051 -- 565,467 Accrued income 134 -- 72,423 ----------- ----------- ------------ Net assets available for Plan benefits $ 1,362,644 $ 1,621,555 $ 97,374,374 =========== =========== ===========
Short Term Equity Intermediate Investment Index Bond Fund Fund Index Fund Total ---- ---- ---------- ----- December 31, 1996 - ----------------- Assets held in Master Trust (Note 9) $15,130,420 $48,054,390 $11,680,840 $74,865,650 Contributions receivable 250 1,520 40 1,810 Accrued income 65,680 22,860 1,700 90,240 ----------- ----------- ----------- ----------- Net assets available for Plan benefits $15,196,350 $48,078,770 $11,682,580 $74,957,700 =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 2 8 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES FOR THE YEAR ENDED DECEMBER 31, 1997 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
Money Stable S&P 500 Managed Growth Market Income Bond Index Equity Equity Fund Fund Fund Fund Fund Fund ---- ---- ---- ---- ---- ---- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ -- $ -- $ 198,648 $15,623,854 $ 527,502 $ 329,767 Interest and dividends 699,403 108,038 714,620 -- 63,059 -- ----------- ----------- ----------- ----------- ----------- ----------- Net investment income (loss) 699,403 108,038 913,268 15,623,854 590,561 329,767 ----------- ----------- ----------- ----------- ----------- ----------- Contributions Employee 1,295,290 358,974 1,204,438 6,108,487 717,487 898,356 Employer 368,877 105,352 344,196 1,760,264 209,517 260,901 ----------- ----------- ----------- ----------- ----------- ----------- Total contributions 1,664,167 464,326 1,548,634 7,868,751 927,004 1,159,257 ----------- ----------- ----------- ----------- ----------- ----------- Total additions 2,363,570 572,364 2,461,902 23,492,605 1,517,565 1,489,024 ----------- ----------- ----------- ----------- ----------- ----------- Decreases from net assets attributed to: Distributions to participants for withdrawals (1,972,928) (90,306) (2,531,977) (4,504,794) (267,251) (176,818) Interfund Transfers 11,155,484 2,717,815 10,806,351 35,516,578 5,145,316 6,695,675 ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in Plan assets 11,546,126 3,199,873 10,736,276 54,504,389 6,395,630 8,007,881 Net assets available for Plan benefits: Beginning of year -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- End of year $11,546,126 $ 3,199,873 $10,736,276 $54,504,389 $ 6,395,630 $ 8,007,881 =========== =========== =========== =========== =========== ===========
Seagram Short-Term Equity Intermediate Stock Loan Investment Index Bond Fund Account Fund Fund Index Fund Total ---- ------- ---- ---- ---------- ----- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ (167,175) $ -- $ -- $ -- $ -- $16,512,596 Interest and dividends 19,639 58,446 -- -- -- 1,663,205 ----------- ----------- ----------- ----------- ----------- ----------- Net investment income (loss) (147,536) 58,446 -- -- -- 18,175,801 ----------- ----------- ----------- ----------- ----------- ----------- Contributions Employee 152,866 -- -- -- -- 10,735,898 Employer 43,061 -- -- -- -- 3,092,168 ----------- ----------- ----------- ----------- ----------- ----------- Total contributions 195,927 -- -- -- -- 13,828,066 ----------- ----------- ----------- ----------- ----------- ----------- Total additions 48,391 58,446 -- -- -- 32,003,867 ----------- ----------- ----------- ----------- ----------- ----------- Decreases from net assets attributed to: Distributions to participants for withdrawals (26,942) (16,177) -- -- -- (9,587,193) Interfund Transfers 1,341,195 1,579,286 (15,196,350) (48,078,770) (11,682,580) -- ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in Plan assets 1,362,644 1,621,555 (15,196,350) (48,078,770) (11,682,580) 22,416,674 Net assets available for Plan benefits: Beginning of year -- -- 15,196,350 48,078,770 11,682,580 74,957,700 ----------- ----------- ----------- ----------- ----------- ----------- End of year $ 1,362,644 $ 1,621,555 $ -- $ -- $ -- $97,374,374 =========== =========== =========== ============ =========== ===========
The accompanying notes are an integral part of these financial statements. 3 9 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan originally established as the MCA INC. Employee Savings Plan ("MCA Plan") and is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Effective January 1, 1997, the MCA Plan was amended and continued in the form of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates ("the Seagram Plan"). The name of the MCA Plan was changed to the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Universal Employees (the "Plan"). To simplify plan administration, the Plan was amended in the form of the Seagram Plan, including certain modifications to the terms, to accommodate benefit provisions solely applicable to eligible employees of Universal Studios, Inc. ("Universal"). Notwithstanding the adoption of the terms 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 covered by the Plan. The Plan covers employees of Universal and certain of its United States subsidiaries (collectively, the "Participating Companies") who are either (i) salaried employees or (ii) hourly employees employed in a classification designated by the Participating Companies from time to time, excluding persons who are members of a labor union, guild or other collective bargaining unit unless the employee is salaried and paid in whole or part by Universal or whose employment is subject to a labor agreement, persons employed on a special basis and persons employed by an operating unit of the Participating Companies to which the Plan has not been extended. In addition, non-salaried employees of Hilltop Service, Inc., seasonal and temporary employees of the Universal Studios Tour, certain temporary clerical employees and interns must complete one year of service before they are eligible to participate in the Plan. 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). The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among four accounts: Pre-Tax Account, Company Match Account, After-Tax Account and Rollover Account (collectively the "Accounts"). Such contributions are invested as designated by each participant in one or more of the investment funds referred to in Note 3, and are accumulated and invested in a trust held by The 4 10 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS Bank of New York as trustee (the "Trustee"). The Plan is administered through an Administrative Committee (the "Plan Administrator") appointed by the Board of Directors of Joseph E. Seagram & Sons, Inc. (the "Company"). Expenses including trustee, custodial and some record keeping fees, are paid by the Company. Personnel and facilities of the Company are used by the Plan at no charge. The Board of Directors of the Company may terminate the Plan at anytime. In the case of termination, the rights of participants to their accounts shall be vested as of the date of termination. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the Plan conform with generally accepted accounting principles. The 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 Through December 31, 1996, the assets of the MCA Plan were held by Bank of America NT&SA (the "Prior Trustee") and on January 1, 1997, the assets were transferred to the Trustee. The Plan participates in the Joseph E. Seagram & Sons, Inc. Master Trust (the "Master Trust") held by the Trustee where the assets of other related employee benefit plans of the Company and its affiliates are invested on a commingled basis. The Master Trust is recorded based on individual plan participants' account balances. Investments are recorded and valued as follows: (i) United States government obligations at fair value based on the current market yields; (ii) temporary investments in short-term investment funds at cost which in the normal course approximates fair value; (iii) securities representing units of other funds or equity securities at net asset value, as determined by the Trustee based on underlying fair market values. Participant loans are valued at cost plus accrued interest, which approximates fair value. 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 net appreciation in fair value of investments. 5 11 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 3. INVESTMENT PROGRAM Subsequent to the transfer of funds from the Prior Trustee on January 1, 1997, the Plan has been comprised of seven investment funds: (i) the Money Market Fund, investing in the State Street Yield Enhanced STIF Fund (which replaced the State Street STIF Utilized on October 4, 1997); (ii) the Stable Income Fund, investing in the Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund, investing in Putnam Income Fund, Class A Shares managed by Putnam Investment Management; (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 Friess Associates; and (vii) the Seagram Stock Fund, investing primarily in The Seagram Company Ltd. common shares. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. Prior to the transfer of funds from the Prior Trustee to the Trustee, the Plan was comprised of three investment funds: (i) Short Term Investment Fund; (ii) Equity Index Fund; (iii) Intermediate Bond Index Fund. 4. CONTRIBUTIONS Non-highly compensated employees, as defined, 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) of their annual salary (as defined in the Plan), in any combination. Highly compensated employees, as defined, may elect to contribute from 1% to 10% of their annual salary on a pre-tax or after-tax basis, provided the aggregate percentage of the contributions does not exceed 10% of their annual salary. Contributions are subject to limitations imposed by federal law for qualified retirement plans. The Plan provides for mandatory matching contributions by the Participating Companies payable to the participants' Company Match Account. The Participating Companies, except as herein noted, contribute on behalf of the participants 40% of the participants' contributions not exceeding 5% of their salary. The Participating Companies matching contributions are subject to limitations imposed by federal law for qualified retirement plans. The Participating Companies may make discretionary contributions to participants' Company Match Accounts, 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 12 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS The Plan will accept into participants' Rollover Accounts cash received by participants from a qualified plan within the time prescribed by applicable law. 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her contributions. He or she has a non-forfeitable right to the value of his or her Company Match Account upon retirement, disability (as defined in the Plan) or death. Upon termination of employment for any other reason, a participant vests 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 retirement, disability or death of a participant who was not fully vested in his or her Company Match Account, the non-vested portion of the participant's Company Match Account shall be forfeited. Any amount forfeited shall be applied to reduce prospective 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 re-employment 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 the month subsequent to termination. The Participating Companies used $72,412 in forfeitures to offset their contributions during the year ended December 31, 1997. 6. DISTRIBUTIONS Upon termination of employment, after retirement 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 7 13 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS retirement, disability or death, the participant shall receive only the value of the vested portion of his or her Accounts (see Note 5). Benefits are recorded when paid. In accordance with the procedures established by the Administrative Committee, a terminated employee may elect to defer final distribution from the Plan. Upon such election, the amount of 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 employee. 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 14 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 8. TAX STATUS OF PLAN The Internal Revenue Service has ruled by a letter dated January 24, 1996 that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code"). So long as the Plan continues to be so qualified, it is not subject to federal income taxes. The Plan has since been amended, and in March 1998 a new determination letter was requested. Management believes that the Plan, as amended, is in accordance with all applicable provisions of the Code and ERISA. Management has applied under the Internal Revenue Service's Voluntary Compliance Resolution program for the correction of an operational violation. The application is expected to be successful and no adverse tax qualification consequences are expected to affect the Plan. 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 15 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS 9. ASSETS HELD IN MASTER TRUST The assets and investment income of the Master Trust as of and for the year ended December 31, 1997 consisted of the following:
December 31, Assets 1997 ------ ------------ Money Market Fund - State Street Yield Enhanced STIF Fund $ 24,089,219 Stable Income Fund The LaSalle Income Plus Fund 34,562,612 Bond Fund Putnam Income Fund, Class A Shares 27,015,278 S&P 500 Index Fund - State Street S&P 500 Flagship Fund, Series C 133,217,637 Managed Equity Fund Lazard Equity Portfolio Fund 30,054,896 Growth Equity Fund Brandywine Fund, Inc. Common Shares 58,963,046 Seagram Stock Fund The Seagram Company Ltd. Common Shares 15,210,786 Collective Short Term Investment Fund 523,383 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,922,692 Collective Short Term Investment Fund 103,633 Loans to Participants 10,426,983 ------------ Total Investments $338,090,165 ============
As of December 31, 1997, the Plan's share of the Master Trust investments approximated 28.6%. 10 16 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNIVERSAL EMPLOYEES NOTES TO FINANCIAL STATEMENTS
Year ended December 31, Investment Income 1997 - ----------------- ------------ Bond Fund $ 436,843 S&P 500 Index Fund 35,154,443 Managed Equity Fund 4,172,355 Growth Equity Fund 5,076,157 Seagram Stock Fund (2,917,700) The Coca-Cola Company Stock Fund 1,104,840 ------------ Investment gains (net of investment expenses/losses) 43,026,938 Interest 5,497,996 Dividends 385,589 ------------ Investment Income $ 48,910,523 ============
As of December 31, 1996, the net assets of the Plan were invested in the MCA INC. Employee Savings Plan Single Trust ("MCA Single Trust"). The assets of the MCA Single Trust as of December 31, 1996 consisted of the following:
December 31, Assets 1996 - ------ ------------ Short Term Investment Fund $ 16,817,560 Equity Index Fund 51,757,120 Intermediate Bond Index Fund 12,572,930 ------------ Total Investments $ 81,147,610 ============
As of December 31, 1996, the Plan's share of the MCA Single Trust approximated 92.3%. 11 17 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-19059) of The Seagram Company Ltd. of our report dated June 26, 1998 relating to the financial statements of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates -- Universal Employees for the year ended December 31, 1997 included with this Form 11-K. /s/ Price Waterhouse LLP Century City, California June 26, 1998 EX-99.C 4 FORM 11-K - UNI EMPLOYEES 1 EXHIBIT 99(c) 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, 1997 COMMISSION FILE NUMBER 1-2275 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI 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) 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - UNI Employees (the "UNI 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 UNI Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the UNI Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Price Waterhouse LLP, independent accountants. 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. RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES By /s/ John Borgia ----------------------------- John Borgia Member of Investment Committee Date: June 29, 1998 4 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES REPORT AND FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 5 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES INDEX TO FINANCIAL STATEMENTS* Page Report of Independent Accountants......................................... 1 Statements of Net Assets Available for Plan Benefits (with Fund Information) at December 31, 1997 and 1996............................. 2 Statement of Changes in Net Assets Available for Plan Benefits (with Fund Information) for the year ended December 31, 1997...................... 3 Notes to Financial Statements............................................. 4 * All schedules required to be filed with the Department of Labor have been omitted because the schedules are not applicable. 6 REPORT OF INDEPENDENT ACCOUNTANTS June 26, 1998 To the Participants and Administrative Committee of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - UNI Employees In our opinion, the accompanying statements of net assets available for Plan benefits as of December 31, 1997 and 1996 and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1997 present fairly, in all material respects, the net assets available for plan benefits of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - UNI Employees (the Plan, formerly the UNI Distribution Corp. Employee Savings Plan) at December 31, 1997 and 1996, and the changes in net assets available for plan benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's Administrative Committee; 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 generally accepted auditing standards 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. /s/ Price Waterhouse LLP 1 7 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES DECEMBER 31, 1997 AND 1996 STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
Money Stable S&P 500 Managed Growth Seagram Market Income Bond Index Equity Equity Stock Loan Fund Fund Fund Fund Fund Fund Fund Account Total -------- ------- ------- -------- ------- ------- ------- ------- -------- December 31, 1997 - ----------------- Assets held in Master Trust (Note 9) $121,973 $32,999 $87,358 $585,970 $20,386 $28,723 $14,178 $15,730 $907,317 Contributions receivable 1,752 475 1,249 8,374 292 410 202 -- 12,754 Accrued interest income 593 174 -- -- -- -- 1 -- 768 -------- ------- ------- -------- ------- ------- ------- ------- -------- Net assets available for Plan benefits $124,318 $33,648 $88,607 $594,344 $20,678 $29,133 $14,381 $15,730 $920,839 ======== ======= ======= ======== ======= ======= ======= ======= ========
Short Term Equity Intermediate Investment Index Bond Fund Fund Index Fund Total ---------- -------- ------------- -------- December 31, 1996 - ----------------- Assets held in Master Trust (Note 9) $248,470 $505,620 $88,030 $842,120 Contributions receivable 650 1,490 430 2,570 Accrued interest income 1,070 240 20 1,330 -------- -------- ------- -------- Net assets available for Plan benefits $250,190 $507,350 $88,480 $846,020 ======== ======== ======= ========
The accompanying notes are an integral part of these financial statements. -2- 8 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES FOR THE YEAR ENDED DECEMBER 31, 1997 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
Money Stable S&P 500 Managed Growth Market Income Bond Index Equity Equity Fund Fund Fund Fund Fund Fund --------- -------- -------- --------- -------- -------- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ -- $ -- $ 1,635 $ 151,648 $ 653 $ (1,218) Interest and dividends 15,926 1,080 5,884 -- 78 -- --------- -------- -------- --------- -------- -------- Net investment income (loss) 15,926 1,080 7,519 151,648 731 (1,218) --------- -------- -------- --------- -------- -------- Contributions Employee 24,581 6,653 17,520 117,514 4,089 5,760 Employer 6,988 1,946 4,788 33,882 1,126 1,620 --------- -------- -------- --------- -------- -------- Total contributions 31,569 8,599 22,308 151,396 5,215 7,380 --------- -------- -------- --------- -------- -------- Total additions 47,495 9,679 29,827 303,044 5,946 6,162 --------- -------- -------- --------- -------- -------- Decreases from net assets attributed to: Distributions to participants for withdrawals (296,774) (36) (16,581) (14,672) (520) (462) Interfund Transfers 373,597 24,005 75,361 305,972 15,252 23,433 --------- -------- -------- --------- -------- -------- Net increase (decrease) in Plan assets 124,318 33,648 88,607 594,344 20,678 29,133 Net assets available for Plan benefits: Beginning of year -- -- -- -- -- -- --------- -------- -------- --------- -------- -------- End of year $ 124,318 $ 33,648 $ 88,607 $ 594,344 $ 20,678 $ 29,133 ========= ======== ======== ========= ======== ========
Seagram Short Term Equity Intermediate Stock Loan Investment Index Bond Fund Account Fund Fund Index Fund Total -------- ------- --------- --------- -------- --------- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ (2,417) $ -- $ -- $ -- $ -- $ 150,301 Interest and dividends 284 444 -- -- -- 23,696 -------- ------- --------- --------- -------- --------- Net investment income (loss) (2,133) 444 -- -- -- 173,997 -------- ------- --------- --------- -------- --------- Contributions Employee 2,843 -- -- -- -- 178,960 Employer 793 -- -- -- -- 51,143 -------- ------- --------- --------- -------- --------- Total contributions 3,636 -- -- -- -- 230,103 -------- ------- --------- --------- -------- --------- Total additions 1,503 444 -- -- -- 404,100 -------- ------- --------- --------- -------- --------- Decreases from net assets attributed to: Distributions to participants for withdrawals (236) -- -- -- -- (329,281) Interfund Transfers 13,114 15,286 (250,190) (507,350) (88,480) -- -------- ------- --------- --------- -------- --------- Net increase (decrease) in Plan assets 14,381 15,730 (250,190) (507,350) (88,480) 74,819 Net assets available for Plan benefits: Beginning of year -- -- 250,190 507,350 88,480 846,020 -------- ------- --------- --------- -------- --------- End of year $ 14,381 $15,730 $ -- $ -- $ -- $ 920,839 ======== ======= ========= ========= ======== =========
The accompanying notes are an integral part of these financial statements. -3- 9 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan originally established as the UNI Distribution Corp. Employee Savings Plan ("UNI Plan") and is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Effective January 1, 1997, the UNI Plan was amended and continued in the form of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates ("the Seagram Plan"). The name of the UNI Plan was changed to the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - UNI Employees (the "Plan"). To simplify plan administration, the Plan was amended in the form of the Seagram Plan, including certain modifications to the terms, to accommodate benefit provisions solely applicable to eligible employees of Universal Music and Video Distribution, Inc. ("UNI"). Notwithstanding the adoption of the terms 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 covered by the Plan. The Plan covers certain employees of UNI and certain of its United States subsidiaries (collectively, the "Participating Companies"), excluding persons who are members of a labor union, guild or other collective bargaining unit unless the employee is salaried and paid in whole or part by UNI. In addition, employees of the Memphis and Reno locations and interns must complete one year of service before they are eligible to participate in the Plan. 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). The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among four accounts: Pre-Tax Account, Company Match Account, After-Tax Account and Rollover Account (collectively the "Accounts"). Such contributions are invested as designated by each participant in one or more of the investment funds referred to in Note 3, and are accumulated and invested in a Trust Fund held by The Bank of New York as trustee (the "Trustee"). The Plan is administered through an Administrative Committee (the "Plan Administrator") appointed by the Board of Directors of Joseph E. Seagram & Sons, Inc. ("the Company"). Expenses including trustee, custodial and some record keeping fees, are paid by the Company. Personnel and facilities of the Company are used by the Plan at no charge. 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. 4 10 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the Plan conform with generally accepted accounting principles. The 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 Through December 31, 1996, the assets of the MCA Plan were held by Bank of America NT & SA (the "Prior Trustee") and on January 1, 1997, the assets were transferred to the Trustee. The Plan participates in the Joseph E. Seagram & Sons, Inc. Master Trust (the "Master Trust") held by the Trustee where the assets of other related employee benefit plans of the Company and its affiliates are invested on a commingled basis. The Master Trust is recorded based on individual plan participants' account balances. Investments are recorded and valued as follows: (i) United States government obligations at fair value based on the current market yields; (ii) temporary investments in short-term investment funds at cost which in the normal course approximates fair value; (iii) securities representing units of other funds or equity securities at net asset value, as determined by the Trustee, based on underlying fair market values. Participant loans are valued at cost plus accrued interest, which approximates fair value. 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 net appreciation in fair value of investments. 5 11 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 3. INVESTMENT PROGRAM Subsequent to the transfer of funds from the Prior Trustee on January 1, 1977, the Plan has been comprised of seven investment funds: (i) the Money Market Fund, investing in the State Street Yield Enhanced STIF Fund (which replaced the State Street STIF Utilized on October 4, 1997) and high-quality bank certificates of deposit managed by State Street Bank and Trust Company; (ii) the Stable Income Fund, investing in the Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund, investing in Putnam Income Fund, Class A Shares managed by Putnam Investment Management; (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 Friess Associates; and (vii) the Seagram Stock Fund, investing primarily in The Seagram Company Ltd. common shares. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. Prior to the transfer of funds from the Prior Trustee to the Trustee, the Plan was comprised of three investment funds: (i) Short Term Investment Fund; (ii) Equity Index Fund; (iii) Intermediate Bond Index Fund. 4. CONTRIBUTIONS Non-highly compensated employees, as defined, 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) of their annual salary (as defined in the Plan), in any combination. Highly compensated employees, as defined, may elect to contribute from 1% to 10% of their annual salary on a pre-tax or after-tax basis, provided the aggregate percentage of the contributions does not exceed 10% of their annual salary. Contributions are subject to limitations imposed by federal law for qualified retirement plans. The Plan provides for mandatory matching contributions by the Participating Companies payable to the participants' Company Match Account. The Participating Companies, except as herein noted, contribute on behalf of the participants 40% of the participants' contributions not exceeding 5% of their salary. The Participating Companies matching contributions are subject to limitations imposed by federal law for qualified retirement plans. The Participating Companies may make discretionary contributions to participants' Company Match Accounts, 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 12 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS The Plan will accept into participants' Rollover Accounts cash received by participants from a qualified plan within the time prescribed by applicable law. 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her contributions. He or she has a non-forfeitable right to the value of his or her Company Match Account upon retirement, disability (as defined in the Plan) or death. Upon termination of employment for any other reason, a participant vests 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 retirement, disability or death of a participant who was not fully vested in his or her Company Match Account, the non-vested portion of the participant's Company Match Account shall be forfeited. Any amount forfeited shall be applied to reduce prospective 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 re-employment 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 the month subsequent to termination. The Participating Companies used $1,351 in forfeitures to offset their contributions during the year ended December 31, 1997. 7 13 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 6. DISTRIBUTIONS Upon termination of employment, after retirement 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 retirement, disability or death, the participant shall receive only the value of the vested portion of his or her Accounts (see Note 5). Benefits are recorded when paid. In accordance with the procedures established by the Administrative Committee, a terminated employee may elect to defer final distribution from the Plan. Upon such election, the amount of 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 employee. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts in accordance with 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 8 14 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 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 December 23, 1996 that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code"). So long as the Plan continues to be so qualified, it is not subject to federal income taxes. The Plan has since been amended, and in March 1998, a new determination letter was requested. Management believes that the Plan, as amended, is in accordance with all applicable provisions of the Code and ERISA. 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 15 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS 9. ASSETS HELD IN MASTER TRUST The assets and investment income of the Master Trust as of and for the year ended December 31, 1997 consisted of the following:
December 31, Assets 1997 - ------ ------------ Money Market Fund - State Street Yield Enhanced STIF Fund $ 24,089,219 Stable Income Fund The LaSalle Income Plus Fund 34,562,612 Bond Fund Putnam Income Fund, Class A Shares 27,015,278 S&P 500 Index Fund - State Street S&P 500 Flagship Fund, Series C 133,217,637 Managed Equity Fund Lazard Equity Portfolio Fund 30,054,896 Growth Equity Fund Brandywine Fund, Inc. Common Shares 58,963,046 Seagram Stock Fund The Seagram Company Ltd. Common Shares 15,210,786 Collective Short Term Investment Fund 523,383 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,922,692 Collective Short Term Investment Fund 103,633 Loans to Participants 10,426,983 ------------ Total Investments $338,090,165 ============
As of December 31, 1997, the Plan's share of the Master Trust investments approximated 0.3%. 10 16 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - UNI EMPLOYEES NOTES TO FINANCIAL STATEMENTS
Year ended December 31, Investment Income 1997 - ----------------- ------------ Bond Fund $ 436,843 S&P 500 Index Fund 35,154,443 Managed Equity Fund 4,172,355 Growth Equity Fund 5,076,157 Seagram Stock Fund (2,917,700) The Coca-Cola Company Stock Fund 1,104,840 ----------- Investment gains (net of investment expenses/losses) 43,026,938 Interest 5,497,996 Dividends 385,589 ----------- Investment Income $48,910,523 ===========
As of December 31, 1996, the net assets of the Plan were invested in the MCA INC. Employee Savings Plan Single Trust ("MCA Single Trust"). The assets of the MCA Single Trust as of December 31, 1996 consisted of the following:
December 31, Assets 1996 - ------ ------------ Short Term Investment Fund $16,817,560 Equity Index Fund 51,757,120 Intermediate Bond Index Fund 12,572,930 ----------- Total Investments $81,147,610 ===========
As of December 31, 1996, the Plan's share of the MCA Single Trust approximated 1.0%. 11 17 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-19059) of The Seagram Company Ltd., of our report dated June 26, 1998 relating to the financial statements of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates -- UNI Employees for the year ended December 31, 1997 included with this Form 11-K. /s/ Price Waterhouse LLP Century City, California June 26, 1998 EX-99.D 5 FORM 11-K - SPENCER EMPLOYEES 1 EXHIBIT 99(d) 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, 1997 COMMISSION FILE NUMBER 1-2275 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - 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) 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Spencer Employees (the "Spencer 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 Spencer Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Spencer Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Price Waterhouse LLP, independent accountants. 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. RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES By /s/ John Borgia ----------------------------- John Borgia Member of Investment Committee Date: June 29, 1998 4 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES REPORT AND FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 5 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES INDEX TO FINANCIAL STATEMENTS* Page Report of Independent Accountants....................................... 1 Statements of Net Assets Available for Plan Benefits (with Fund Information) at December 31, 1997 and 1996........................... 2 Statement of Changes in Net Assets Available for Plan Benefits (with Fund Information) for the year ended December 31, 1997............... 3 Notes to Financial Statements........................................... 4 * All schedules required to be filed with the Department of Labor have been omitted because the schedules are not applicable. 6 REPORT OF INDEPENDENT ACCOUNTANTS June 26, 1998 To the Participants and Administrative Committee of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Spencer Employees In our opinion, the accompanying statements of net assets available for plan benefits as of December 31, 1997 and 1996 and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1997 present fairly, in all material respects, the net assets available for plan benefits of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates - Spencer Employees (the Plan, formerly the Spencer Gifts, Inc. Employee Savings Plan) at December 31, 1997 and 1996, and the changes in net assets available for plan benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's Administrative Committee; 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 generally accepted auditing standards 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. /s/ Price Waterhouse LLP 1 7 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES DECEMBER 31, 1997 AND 1996 STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
Money Stable S&P 500 Managed Growth Seagram Market Income Bond Index Equity Equity Stock Fund Fund Fund Fund Fund Fund Fund ---- ---- ---- ---- ---- ---- ---- December 31, 1997 Assets held in Master Trust (Note 9) $1,126,387 $ 319,297 $ 854,189 $3,613,822 $ 361,091 $ 325,729 $ 39,380 Contributions receivable 13,144 3,727 9,919 41,965 4,194 3,783 457 Accrued income 5,481 1,686 -- -- -- -- 4 ---------- ---------- ---------- ---------- --------- ---------- ---------- Net assets available for Plan benefits $1,145,012 $ 324,710 $ 864,108 $3,655,787 $ 365,285 $ 329,512 $ 39,841 ========== ========== ========== ========== ========= ========== ==========
Loan Account Total ------- ----- December 31, 1997 Assets held in Master Trust (Note 9) $ 259,412 $6,899,307 Contributions receivable -- 77,189 Accrued income -- 7,171 ---------- ---------- Net assets available for Plan benefits $ 259,412 $6,983,667 ========== ==========
Short-Term Equity Intermediate Investment Index Bond Fund Fund Index Fund Total ---- ---- ---------- ----- December 31, 1996 Assets held in Master Trust (Note 9) $1,438,670 $3,197,110 $ 804,060 $5,439,840 Contributions receivable 7,730 11,750 2,740 22,220 Accrued income 6,210 1,510 120 7,840 ---------- ---------- --------- ---------- Net assets available for Plan benefits $1,452,610 $3,210,370 $ 806,920 $5,469,900 ========== ========== ========= ==========
The accompanying notes are an integral part of these financial statements. -2- 8 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES FOR THE YEAR ENDED DECEMBER 31, 1997 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
Money Stable S&P 500 Managed Growth Market Income Bond Index Equity Equity Fund Fund Fund Fund Fund Fund ---- ---- ---- ---- ---- ---- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ -- $ -- $ 14,500 $1,052,365 $ 32,142 $ 9,574 Interest and dividends 65,301 10,473 52,164 -- 3,842 -- ---------- ---------- ---------- ---------- ---------- ---------- Net investment income (loss) 65,301 10,473 66,664 1,052,365 35,984 9,574 ---------- ---------- ---------- ---------- ---------- ---------- Contributions Employee 132,699 37,632 100,144 423,680 42,334 38,188 Employer 36,071 11,263 29,483 124,540 12,639 11,406 ---------- ---------- ---------- ---------- ---------- ---------- Total contributions 168,770 48,895 129,627 548,220 54,973 49,594 ---------- ---------- ---------- ---------- ---------- ---------- Total additions 234,071 59,368 196,291 1,600,585 90,957 59,168 ---------- ---------- ---------- ---------- ---------- ---------- Decreases from net assets attributed to: Distributions to participants for withdrawals (537,039) (1,020) (36,347) (148,315) (2,976) (3,539) Interfund Transfers 1,447,980 266,362 704,164 2,203,517 277,304 273,883 ---------- ---------- ---------- ---------- ---------- ---------- Net increase (decrease) in Plan assets 1,145,012 324,710 864,108 3,655,787 365,285 329,512 Net assets available for Plan benefits: Beginning of year -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- End of year $1,145,012 $ 324,710 $ 864,108 $3,655,787 $ 365,285 $ 329,512 ========== ========== ========== ========== ========== ==========
Seagram Short Term Equity Intermediate Stock Loan Investment Index Bond Fund Account Fund Fund Index Fund Total ---- ------- ---- ---- ---------- ----- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ (14,357) $ -- $ -- $ -- $ -- $1,094,224 Interest and dividends 1,687 10,691 -- -- -- 144,158 ---------- ---------- ---------- ---------- ---------- ---------- Net investment income (loss) (12,670) 10,691 -- -- -- 1,238,382 ---------- ---------- ---------- ---------- ---------- ---------- Contributions Employee 4,607 -- -- -- -- 779,284 Employer 1,379 -- -- -- -- 226,781 ---------- ---------- ---------- ---------- ---------- ---------- Total contributions 5,986 -- -- -- -- 1,006,065 ---------- ---------- ---------- ---------- ---------- ---------- Total additions (6,684) 10,691 -- -- -- 2,244,447 ---------- ---------- ---------- ---------- ---------- ---------- Decreases from net assets attributed to: Distributions to participants for withdrawals (95) (1,349) -- -- -- (730,680) Interfund Transfers 46,620 250,070 (1,452,610) (3,210,370) (806,920) -- ---------- ---------- ---------- ---------- ---------- ---------- Net increase (decrease) in Plan assets 39,841 259,412 (1,452,610) (3,210,370) (806,920) 1,513,767 Net assets available for Plan benefits: Beginning of year -- -- 1,452,610 3,210,370 806,920 5,469,900 ---------- ---------- ---------- ---------- ---------- ---------- End of year $ 39,841 $ 259,412 $ -- $ -- $ -- $6,983,667 ========== ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. -3- 9 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 1. 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 ("ERISA"). Effective January 1, 1997, the Spencer Plan was amended and continued in the form of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates ("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"). To simplify plan administration, the Plan was amended in the form of the Seagram Plan, including certain modifications to the terms, to accommodate benefit provisions solely applicable to eligible employees of Spencer Gifts, Inc. ("Spencer"). Notwithstanding the adoption of the terms 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 covered by 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 Spencer (see Note 4). The ultimate benefit to be received by the participant depends on the amounts contributed, the investment results and the participant's vested interest at termination of employment (see Note 5). With respect to each participant, contributions are allocated among four accounts: Pre-Tax Account, Company Match Account, After-Tax Account and Rollover Account (collectively, the "Accounts"). Such contributions are invested as designated by each participant in one or more of the investment funds referred to in Note 3, and are accumulated and invested in a Trust Fund held by The Bank of New York as trustee (the "Trustee"). The Plan is administered through an Administrative Committee appointed by the Board of Directors of Joseph E. Seagram & Sons, Inc. ("the Company"). Expenses including trustee, custodial and some record keeping fees, are paid by the Company. Personnel and facilities of the Company are used by the Plan at no charge. 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. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the Plan conform with generally accepted accounting principles. The significant accounting policies are: 4 10 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 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 Through December 31, 1996, the assets of the MCA Plan were held by Bank of America NT & SA (the "Prior Trustee") and on January 1, 1997, the assets were transferred to the Trustee. The Plan participates in the Joseph E. Seagram & Sons, Inc. Master Trust (the "Master Trust") held by the Trustee where the assets of other related employee benefit plans of the Company and its affiliates are invested on a commingled basis. The Master Trust is recorded based on individual plan participants' account balances. Investments are recorded and valued as follows: (i) United States government obligations at fair value based on the current market yields; (ii) temporary investments in short-term investment funds at cost which in the normal course approximates fair value; (iii) securities representing units of other funds or equity securities at net asset value, as determined by the Trustee, based on underlying fair market values. Participant loans are valued at cost plus accrued interest, which approximates fair value. 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 net appreciation in fair value of investments. 3. INVESTMENT PROGRAM Subsequent to the transfer of funds from the Prior Trustee on January 1, 1997, the Plan has been comprised of seven investment funds: (i) the Money Market Fund, investing in the State Street Yield Enhanced STIF Fund (which replaced the State Street STIF Utilized on October 4, 1997); (ii) the Stable Income Fund, investing in the Income Plus Fund managed by LaSalle National Trust, N.A.; (iii) the Bond Fund, investing in Putnam Income Fund, Class A Shares managed by Putnam Investment Management; (iv) the S&P 500 Index Fund, investing in the S&P 500 5 11 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 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 Friess Associates; and (vii) the Seagram Stock Fund, investing primarily in The Seagram Company Ltd. common shares. The investments are administered by the Investment Committee appointed by the Board of Directors of the Company. Prior to the transfer of funds from the Prior Trustee, the Plan was comprised of three investment funds: (i) Short Term Investment Fund; (ii) Equity Index Fund; (iii) Intermediate Bond Index Fund. 4. CONTRIBUTIONS Non-highly compensated employees, as defined, 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) of their annual salary (as defined in the Plan), in any combination. Highly compensated employees, as defined, may elect to contribute from 1% to 10% of their annual salary on a pre-tax basis or after-tax basis, provided the aggregate percentage of the contributions does not exceed 10% of their annual salary. Contributions are subject to limitations imposed by federal law for qualified retirement plans. The Plan provides for mandatory matching contributions by Spencer payable to the participants' Company Match Account. Spencer, except as herein noted, contributes on behalf of the participants 40% of the participants' contributions not exceeding 5% of their salary. Spencer's matching contributions are subject to limitations imposed by federal law for qualified retirement plans. Spencer may make discretionary contributions to participants' Company Match Accounts, in an amount to be determined by Spencer. Spencer has not made discretionary contributions since the inception of the Plan. The Plan will accept into participants' Rollover Accounts cash received by participants from a qualified plan within the time prescribed by applicable law. 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her contributions. He or she has a non-forfeitable right to the value of his or her Company Match Account upon retirement, disability (as defined in the Plan) or death. Upon termination of employment for any other reason, a participant vests in his or her Company Match Account in accordance with the following vesting schedule: 6 12 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 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 retirement, disability or death of a participant who was not fully vested in his or her Company Match Account, the non-vested portion of the participant's Company Match Account shall be forfeited. Any amount forfeited shall be applied to reduce Spencer's prospective contributions. Any amount forfeited shall be restored if the participant is re-employed by Spencer before incurring a five year break in service and if the participant repays to the Plan (within five years after his or her re-employment 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 Spencer's contributions in the month subsequent to termination. The Participating Companies used $6,475 in forfeitures to offset their contributions during the year ended December 31, 1997. 6. DISTRIBUTIONS Upon termination of employment, after retirement 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 retirement, disability or death, the participant shall receive only the value of the vested portion of his or her Accounts (see Note 5). Benefits are recorded when paid. In accordance with the procedures established by the Administrative Committee, a terminated employee may elect to defer final distribution from the Plan. Upon such election, the amount of 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 employee. Prior to termination of employment, the participant may withdraw amounts from the participant's Accounts in accordance with provisions of the Plan. 7 13 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 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 August 12, 1995 that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code"). So long as the Plan continues to be so qualified, it is not subject to federal income taxes. The Plan has since been amended, and in March 1998 a new determination letter was requested. Management believes that the Plan, as amended, is in accordance with all applicable provisions of the Code and ERISA. 8 14 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS Participants are not currently subject to income tax on Spencer's 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 15 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS 10. ASSETS HELD IN MASTER TRUST --------------------------- The assets and investment income of the Master Trust as of and for the year ended December 31, 1997 consisted of the following:
December 31, Assets 1997 ------ ------------ Money Market Fund - State Street Yield Enhanced STIF Fund $ 24,089,219 Stable Income Fund The LaSalle Income Plus Fund 34,562,612 Bond Fund Putnam Income Fund, Class A Shares 27,015,278 S&P 500 Index Fund - State Street S&P 500 Flagship Fund, Series C 133,217,637 Managed Equity Fund Lazard Equity Portfolio Fund 30,054,896 Growth Equity Fund Brandywine Fund, Inc. Common Shares 58,963,046 Seagram Stock Fund The Seagram Company Ltd. Common Shares 15,210,786 Collective Short Term Investment Fund 523,383 The Coca-Cola Company Stock Fund The Coca-Cola Company Common Stock 3,922,692 Collective Short Term Investment Fund 103,633 Loans to Participants 10,426,983 ------------ Total Investments $338,090,165 ============
As of December 31, 1997, the Plan's share of the Master Trust investments approximated 2.0%. 10 16 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES OF JOSEPH E. SEAGRAM & SON, INC. AND AFFILIATES - SPENCER EMPLOYEES NOTES TO FINANCIAL STATEMENTS
Year ended December 31, Investment Income 1997 - ----------------- ------------ Bond Fund $ 436,843 S&P 500 Index Fund 35,154,443 Managed Equity Fund 4,172,355 Growth Equity Fund 5,076,157 Seagram Stock Fund (2,917,700) The Coca-Cola Company Stock Fund 1,104,840 ----------- Investment gains (net of investment/expenses losses) 43,026,938 Interest 5,497,996 Dividends 385,589 ----------- Investment Income $48,910,523 ===========
As of December 31, 1996, the net assets of the Plan were invested in the MCA INC. Employee Savings Plan Single Trust ("MCA Single Trust"). The assets of the MCA Single Trust as of December 31, 1996 consisted of the following:
December 31, ASSETS 1996 - ------ ------------ Short Term Investment Fund $16,817,560 Equity Index Fund 51,757,120 Intermediate Bond Index Fund 12,572,930 ----------- Total Investments $81,147,610 ===========
As of December 31, 1996, the Plan's share of the MCA Single Trust approximated 6.7%. 11 17 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-19059) of The Seagram Company Ltd., of our report dated June 26, 1998 relating to the financial statements of the Retirement Savings and Investment Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates -- Spencer Employees for the year ended December 31, 1997 included with this Form 11-K. /s/ Price Waterhouse LLP Century City, California June 26, 1998 EX-99.E 6 FORM 11-K - UNION EMPLOYEES 1 EXHIBIT 99(e) 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, 1997 COMMISSION FILE NUMBER 1-2275 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES 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) 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Union 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 Union Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Union Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 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. RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES By /s/ John Borgia ---------------------------- John Borgia Member of Benefits Committee Date: June 29, 1998 4 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS,INC. AND AFFILIATES FINANCIAL STATEMENTS DECEMBER 31, 1997 5 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES INDEX TO FINANCIAL STATEMENTS Page ---- 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 5 6 INDEPENDENT AUDITORS' REPORT To the Benefits Committee of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates We have audited the accompanying statement of net assets available for benefits of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Plan") as of December 31, 1997, and the related statement of changes in net assets available for benefits for the year 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 audit. We conducted our audit 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 audit provides 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 Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates at December 31, 1997, and the changes in net assets available for benefits for the year then ended in conformity with generally accepted accounting principles. /s/ Gutierrez & Co. Flushing, New York June 26, 1998 7 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1997 INVESTMENTS (Note 3) Money Market Fund: Dreyfus Cash Management Plus Fund (cost of $41,288) $ 41,288 Cash (49) Stable Income Fund: Dreyfus-Certus Stable Value Fund (cost of $25,998) 25,998 Cash 586 Bond Fund: Dreyfus A Bonds Plus Fund (cost of $35,110) 35,110 Cash 860 S&P 500 Index Fund: Dreyfus Basic S&P 500 Stock Index Fund (cost of $231,444) 248,446 Cash 5,076 Managed Equity Fund: Dreyfus Disciplined Stock Fund (cost of $147,986) 147,257 Cash 2,654 Growth Equity Fund: Warburg Pincus Emerging Growth Fund (cost of $114,000) 114,399 Cash 2,294 Seagram Stock Fund: The Seagram Company Ltd. Common Shares (cost of $64,360) 57,193 TBC Inc. Pooled Employees Fund (cost of $4,155) 4,155 Cash 1,462 Loans to Participants 1,889 --------- Total Investments 688,618 --------- RECEIVABLES Dividends and Interest 12 Proceeds from Unsettled Sales 49 --------- Total Receivables 61 --------- TOTAL ASSETS 688,679 --------- LIABILITIES Cost of Unsettled Purchases 15,602 --------- Total Liabilities 15,602 --------- NET ASSETS AVAILABLE FOR BENEFITS $ 673,077 =========
The accompanying notes are an integral part of the financial statements. 2 8 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 1997 CONTRIBUTIONS Participating Employees $ 631,470 --------- INVESTMENT ACTIVITIES 631,470 --------- Investment Income Money Market Fund 784 Stable Income Fund 605 Bond Fund 784 S&P 500 Index Fund 2,040 Managed Equity Fund 409 Seagram Stock Fund 480 Interest on loans to participants 10 --------- Total Investment Income 5,112 --------- Realized Net Gain on Sale of Investments Bond Fund 476 Stable Income Fund 509 S&P 500 Index Fund 3,411 Managed Equity Fund 13,662 Growth Equity Fund 6,477 Seagram Stock Fund (34) --------- Total Realized Net Gain on Sale of Investments 24,501 --------- Unrealized Appreciation (Depreciation) on Investments Bond Fund 510 S&P 500 Index Fund 17,002 Growth Equity Fund 3,003 Managed Equity Fund (729) Seagram Stock Fund (7,167) --------- Total Unrealized Appreciation on Investments 12,619 ---------
The accompanying notes are an integral part of the financial statements. 3 9 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 1997 (Continued) Increase in Plan Equity from Investment Activities $ 42,232 --------- PARTICIPANT WITHDRAWALS (625) --------- INCREASE IN PLAN EQUITY 673,077 PLAN EQUITY AT BEGINNING OF YEAR -- --------- PLAN EQUITY AT END OF YEAR $ 673,077 =========
The accompanying notes are an integral part of the financial statements. 4 10 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Plan") conform with generally accepted accounting principles. The more significant accounting policies are: 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 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. 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan established as of January 1, 1997 by Joseph E. Seagram & Sons, Inc. (the "Company"). The Plan covers eligible employees of the Company who are covered by various collective bargaining agreements between the Company and the employee representatives, as specified in the Plan. The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's Accounts by the participant (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). 5 11 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 2. DESCRIPTION OF THE PLAN (Continued) With respect to each participant, contributions are allocated among three Accounts: Pre-Tax Account, After-Tax Account and Rollover Account. 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 a Trust Fund held by the Dreyfus Trust Company, as Trustee. The Plan is administered by the Company through a Benefits Committee appointed by the Board of Directors of the Company. 3. INVESTMENT PROGRAM During the year ended December 31, 1997, the Plan was comprised of seven investment funds: (i) the Money Market Fund investing in the Dreyfus Cash Management Plus Fund managed by Dreyfus Corporation; (ii) the Stable Income Fund investing in the Dreyfus-Certus Stable Value Fund managed by Dreyfus Trust Company; (iii) the Bond Fund investing in Dreyfus A Bonds Plus Fund managed by Dreyfus Corporation; (iv) the S&P 500 Index Fund investing in Dreyfus Basic S&P 500 Stock Index Fund (which, prior to August 15, 1997 was named the Dreyfus Institutional S&P 500 Stock Index Fund) managed by Dreyfus Corporation; (v) the Managed Equity Fund investing in Dreyfus Disciplined Stock Fund managed by Dreyfus Corporation; (vi) the Growth Equity Fund investing in Warburg Pincus Emerging Growth Fund managed by Warburg, Pincus Counsellors, Inc.; and (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares. The investments are administered by the Benefits Committee appointed by the Board of Directors of the Company. 4. CONTRIBUTIONS Eligible employees, as defined, 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 17% (in the aggregate) of their annual pay, as defined in the Plan, in multiples of 1%, in any combination, provided, the aggregate percentage of the contributions does not exceed 17% of their annual pay. Pre-tax Contributions and After-Tax Contributions are subject to limitations imposed by federal laws for qualified retirement plans. The Plan does not provide for mandatory matching contributions by the Company. 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"). 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her Pre-Tax, After-Tax and Rollover Accounts. 6. DISTRIBUTIONS Upon termination of employment, after retirement or for reason of total and permanent disability, as defined in the Plan, or death, the participant or his or her beneficiary shall receive the entire value of his or her Accounts. 6 12 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF JOSEPH E. SEAGRAM & SONS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 6. DISTRIBUTIONS (Continued) 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 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. The amounts borrowed are transferred from the investment funds in which the participant's Accounts are currently invested. On a weekly basis, repayments and interest thereon are credited to the participant's current investment funds. 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 May 20, 1998 that the Plan is qualified under Section 401(a) of the Internal Revenue Code. 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 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 Certain of the expenses of the Plan 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. 7 13 14 The Seagram Company Ltd. The Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates We hereby consent to the incorporation by reference in Registration Statement No. 333-19059 on Form S-8 of our Report dated June 26, 1998 which appears in your Annual Report on Form 11-K of the Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates for the fiscal year ended December 31, 1997. /s/ Gutierrez & Co. Flushing, New York June 29, 1998 8 EX-99.F 7 FORM 11-K - TROPICANA PRODUCTS, INC. EMPLOYEES 1 EXHIBIT 99(f) 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, 1997 COMMISSION FILE NUMBER 1-2275 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES 1001 13th Avenue East Bradenton, Florida 34208 (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) 2 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4 The Retirement Savings and Investment Plan for Union Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (the "Tropicana 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 Tropicana Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. EXHIBITS 1. Financial statements of the Tropicana Plan for the fiscal year ended December 31, 1997 prepared in accordance with the financial reporting requirements of ERISA. 2. Consent of Gutierrez & Co., independent accountants. 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. RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES By /s/ Robert Chiaravalloti Robert Chiaravalloti Member of Benefits Committee Date: June 29, 1998 4 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES FINANCIAL STATEMENTS DECEMBER 31, 1997 5 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES INDEX TO FINANCIAL STATEMENTS Page 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 5 6 INDEPENDENT AUDITORS' REPORT To the Benefits Committee of the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates We have audited the accompanying statement of net assets available for benefits of the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates (the "Plan") as of December 31, 1997, and the related statement of changes in net assets available for benefits for the year 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 audit. We conducted our audit 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 audit provides 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 Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates at December 31, 1997, and the changes in net assets available for benefits for the year then ended in conformity with generally accepted accounting principles. /s/ Gutierrez & Co. Flushing, New York June 26, 1998 7 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1997 INVESTMENTS (Note 3) Money Market Fund: Dreyfus Cash Management Plus Fund (cost of $51,766) $ 51,766 Cash 924 Stable Income Fund: Dreyfus-Certus Stable Value Fund (cost of $40,744) 40,744 Cash 670 Bond Fund: Dreyfus A Bonds Plus Fund (cost of $31,872) 32,301 Cash 561 S&P 500 Index Fund: Dreyfus Basic S&P 500 Stock Index Fund (cost of $103,217) 112,682 Cash 1,908 Managed Equity Fund: Dreyfus Disciplined Stock Fund (cost of $72,426) 73,511 Cash 1,226 Growth Equity Fund: Warburg Pincus Emerging Growth Fund (cost of $56,379) 58,878 Cash 1,078 Seagram Stock Fund: The Seagram Company Ltd. Common Shares (cost of $81,346) 70,894 TBC Inc. Pooled Employees Fund (cost of $4,417) 4,417 Cash 1,504 -------- Total Investments 453,064 -------- RECEIVABLES Dividends and Interest 19 -------- Total Receivables 19 -------- TOTAL ASSETS 453,083 -------- LIABILITIES Cost of Unsettled Purchases 9,246 -------- Total Liabilities 9,246 -------- NET ASSETS AVAILABLE FOR BENEFITS $443,837 ========
The accompanying notes are an integral part of the financial statements. 8 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 1997 CONTRIBUTIONS Participating Employees $ 396,274 Participating Companies 29,506 --------- 425,780 --------- INVESTMENT ACTIVITIES Investment Income Money Market Fund 1,085 Stable Income Fund 1,253 Bond Fund 707 S&P 500 Index Fund 1,023 Managed Equity Fund 342 Seagram Stock Fund 732 --------- Total Investment Income 5,142 --------- Realized Net Gain on Sale of Investments Bond Fund 463 Stable Income Fund 239 S&P 500 Index Fund 1,462 Managed Equity Fund 6,932 Growth Equity Fund 3,865 Seagram Stock Fund (114) --------- Total Realized Net Gain on Sale of Investments 12,847 --------- Unrealized Appreciation (Depreciation) on Investments Bond Fund 428 S&P 500 Index Fund 9,465 Growth Equity Fund 2,499 Managed Equity Fund 1,085 Seagram Stock Fund (10,453) --------- Total Unrealized Appreciation on Investments 3,024 ---------
The accompanying notes are an integral part of the financial statements. 9 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 1997 (Continued) Increase in Plan Equity from Investment Activities $ 21,013 --------- PARTICIPANT WITHDRAWALS (2,956) --------- INCREASE IN PLAN EQUITY 443,837 PLAN EQUITY AT BEGINNING OF YEAR -- --------- PLAN EQUITY AT END OF YEAR $ 443,837 =========
The accompanying notes are an integral part of the financial statements. 10 RETIREMENT SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES OF TROPICANA PRODUCTS, INC. AND AFFILIATES NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements of the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates (the "Plan") conform with generally accepted accounting principles. The more significant accounting policies are: 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 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. 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan established as of January 1, 1997 by Tropicana Products, Inc. (the "Company"). The Plan covers all employees of Tropicana Products, Inc., Tropicana Products Sales Division of Joseph E. Seagram & Sons, Inc. and Tropicana Sales Division of Distillers Products Sales Corporation (collectively, the "Participating Companies") who are included in a unit of employees covered by a Collective Bargaining Agreement between Tropicana Products, Inc.and: (1) Glass, Molders, Pottery, Plastics and Allied Workers International Union (AFL-CIO, CLC) and its Local Union No. 208; (2) American Flint Glass Workers Union AFL-CIO and its Local Union No. 46; and (3) District Lodge No. 15 of the International Association of Machinists and Aerospace Workers AFL-CIO (IAM #15) and who have completed one month of Eligibility Service. The Plan provides benefits to participants based upon amounts voluntarily contributed to a participant's Accounts 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 11 2. DESCRIPTION OF THE PLAN (continued) 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: Pre-Tax Account, Company Match Account, After-Tax Account and Rollover Account. 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 a Trust Fund held by the Dreyfus Trust Company, as Trustee. The Plan is administered by the Company through a Benefits Committee appointed by the Board of Directors of the Company. 3. INVESTMENT PROGRAM During the year ended December 31, 1997, the Plan was comprised of seven investment funds: (i) the Money Market Fund investing in the Dreyfus Cash Management Plus Fund, managed by Dreyfus Corporation; (ii) the Stable Income Fund investing in the Dreyfus-Certus Stable Value Fund managed by Dreyfus Trsut Company; (iii) the Bond Fund investing in Dreyfus A Bonds Plus Fund, managed by Dreyfus Corporation; (iv) the S&P 500 Index Fund investing in Dreyfus Basic S&P 500 Stock Index Fund (which, prior to August 15, 1997 was named Dreyful Institutional S&P 500 Stock Index Fund) managed by Dreyfus Corporation; (v) the Managed Equity Fund investing in Dreyfus Disciplined Stock Fund managed by Dreyfus Corporation; (vi) the Growth Equity Fund investing in Warburg Pincus Emerging Growth Fund managed by Warburg, Pincus Counsellors, Inc.; and (vii) the Seagram Stock Fund investing primarily in The Seagram Company Ltd. common shares. The investments are administered by the Benefits Committee appointed by the Board of Directors of the Company. 4. CONTRIBUTIONS Eligible employees, as defined, 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 17% (in the aggregate) of their annual compensation, as defined in the Plan, in multiples of 1%, in any combination; provided, the aggregate percentage of the contributions does not exceed 17% of their annual compensation. 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 Account. The Participating Companies, except as herein noted, contribute on behalf of the participants 25% of the participants' aggregate Pre-Tax and After-Tax Contributions not exceeding 2% of their compensation, except for the IAM #15 Group which will receive mandatory matching contributions beginning January 1, 1999 under the terms of its collective bargaining agreement. 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"). 5. VESTING A participant in the Plan always has a fully vested interest in the value of his or her Pre-Tax, After-Tax and Rollover Accounts. He or she has a non-forfeitable right to the value of his or her Company Match Account upon retirement, total and permanent disability or death. Upon termination of employment for any other reason, a participant vests in his or her Company Match Account in accordance with the following vesting schedule: 12 5. VESTING (continued)
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 retirement, total and permanent 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. 6. DISTRIBUTIONS Upon termination of employment, after retirement or for reason of total and permanent 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 retirement, total and permanent disability or death, the participant shall receive only the value of the vested portion of his or her Accounts (See Note 5). Prior to termination of employment, the participant may withdraw amounts from the Participant's Accounts in accordance with the provisions of the Plan. 7. TAX STATUS OF PLAN The Internal Revenue Service has ruled by a letter dated May 20, 1998 that the Plan is qualified under Section 401(a) of the Internal Revenue Code. 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. 8. RELATED PARTY TRANSACTIONS Certain expenses of the Plan are paid by the Company, and personnel and facilities of the Company are used by the Plan at no charge. 9. 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. 13 14 The Seagram Company Ltd. The Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates We hereby consent to the incorporation by reference in Registration Statement No. 333-19059 on Form S-8 of our Report dated June 26, 1998 which appears in your Annual Report on Form 11-K of the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates for the fiscal year ended December 31, 1997. /s/ Gutierrez & Co. Flushing, New York June 29, 1998 -----END PRIVACY-ENHANCED MESSAGE-----