TOSCO CORPORATION STORE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1999
Participant Directed
Stable Value Balanced Equity Global Tosco Stock Loan
Fund Fund Fund Fund Fund Fund Total
------------ -------- ---------- ----------- ------------ ------ -----
Additions to net assets
attributed to:
Investment income (loss):
Net appreciation
(depreciation)
in fair value of investments $ - $(505,930) $1,022,910 $920,551 $40,581 $ - $1,478,112
Interest, dividends, and other 1,004,655 543,531 155,221 348,934 5,663 142,592 2,200,596
----------- ---------- ---------- ----------- ---------- --------- -----------
Total investment income 1,004,655 37,601 1,178,131 1,269,485 46,244 142,592 3,678,708
----------- ---------- ---------- ----------- ---------- --------- -----------
Contributions:
Participants 1,043,027 398,248 449,349 274,262 125,329 2,290,215
Rollovers 6,557 3,460 16,558 3,212 11,218 41,005
----------- ---------- ---------- ----------- ---------- --------- -----------
Total contributions 1,049,584 401,708 465,907 277,474 136,547 - 2,331,220
----------- ---------- ---------- ----------- ---------- --------- -----------
Other, net 20,798 5,511 4,305 3,112 1,049 34,775
----------- ---------- ---------- ----------- ---------- --------- -----------
Total additions 2,075,037 444,820 1,648,343 1,550,071 183,840 142,592 6,044,703
----------- ---------- ---------- ----------- ---------- --------- -----------
Deductions from net assets
attributed to:
Benefits paid to participants 2,125,147 820,951 1,143,559 434,819 103,118 247,853 4,875,447
Administrative expenses
and other, net 33,667 5,291 3,918 2,515 1,050 46,441
----------- ---------- ---------- ----------- ---------- --------- -----------
Total deductions 2,158,814 826,242 1,147,477 437,334 104,168 247,853 4,921,888
----------- ---------- ---------- ----------- ---------- --------- -----------
Net increase (decrease)
before interfund transfers (83,777) (381,422) 500,866 1,112,737 79,672 (105,261) 1,122,815
Interfund transfers 832,317 (340,917) (704,954) 228,193 16,316 (30,955) -
----------- ---------- ---------- ----------- ---------- --------- -----------
Net increase (decrease) 748,540 (722,339) (204,088) 1,340,930 95,988 (136,216) 1,122,815
Net assets available for
benefits, December 31, 1998 15,992,337 6,048,153 7,395,005 3,149,685 522,386 2,351,738 35,459,304
----------- ---------- ---------- ----------- ---------- --------- -----------
Net assets available for
benefits, December 31, 1999 $16,740,877 $5,325,814 $7,190,917 $4,490,615 $618,374 $2,215,522 $36,582,119
=========== ========== ========== =========== ========== ========= ===========
The accompanying notes are an integral part of these financial statements.
THE TOSCO CORPORATION STORE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan
The following description of the Tosco Corporation Store Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan Documents for a more complete description of the Plan’s provisions.
General
The Plan was established in 1985 as the Circle K Kash Plus Plan and has been amended and restated at various times since its formation. Effective January 1, 1998, the Plan was amended to change its name to the Tosco Corporation Store Savings Plan. The Plan is a defined contribution, 401(k) profit sharing plan, covering substantially all of the full-time store employees of Tosco Marketing Company, a division of Tosco Corporation (the “Sponsor”), who have reached the age of 21 and completed one continuous year of employment with the Sponsor. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code as amended by the Tax Reform Act of 1986 and subsequent legislation. Effective April 1, 1996, the Plan is being administered by Merrill Lynch Trust Company (“Merrill Lynch”), who is also maintaining the individual participant account records and serving as custodian for the Plan’s investments.
Contributions
Participants may contribute between 1 and 12 percent of their eligible compensation (up to $160,000 in 1999) to the Plan. Effective January 1, 1998, the Plan was amended so that no future Sponsor matching contributions will be made. Earnings on investments held by the Plan in the name of a participant are automatically invested in the respective fund from which the earnings were derived.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and Plan earnings, and charged with an allocation of investment expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Vesting
Participants are fully vested in their entire account balance.
Loans to Participants
The Plan, with certain limitations, may make loans to participants with an interest rate approximately equal to the prime interest rate on the origination date. A loan from the Plan will be made for up to 50% of the participants account balance and all interest payments made under the terms of the loan will be credited to the participant’s account and not considered general earnings of the Plan. Participants’ loans are repaid through payroll deductions. The participant loans are collateralized by the participants’ vested account balances. The maturity on these loans is not to exceed five years.
Distributions
Benefits of the Plan are payable upon reaching normal retirement, early retirement, termination, or in the event of death or disability. All distributions from the Plan are made in one lump sum. Any whole shares of stock in a participant’s stock fund account may be distributed in the form of shares of stock. All other amounts, including fractional shares of stock, will be distributed to the participant in cash.
Administration Fees
All Plan investment management fees are paid from the investment earnings of the individual investment funds. All other administration fees are paid by the Plan or the Sponsor. Fees paid by the Sponsor are not reflected in the Plan’s financial statements.
2. Significant Accounting Policies
Basis of Presentation
The Plan’s financial statements are presented on the accrual basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported changes in net assets available for benefits and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Investments
The Plan’s investments are stated at fair value. Common stock and mutual fund securities are valued at their quoted market price. Pooled separate accounts are valued at contract value plus accrued income that approximates fair value. Participant loans are valued at cost that approximates fair value. Purchases and sales of investments are recorded on a trade date basis.
The Plan presents, in the statement of changes in net assets, the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) of those investments. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
3. Investments
Participants may designate, in one percent increments, the portion of his or her contribution to be placed in various funds. Loan repayments are allocated to these funds based on the participant’s current contribution designation. The characteristics of the different funds are as follows:
Stable Value Fund
The stable value fund seeks to provide preservation of participants’ investments, liquidity, and current income that is typically higher than money market funds. Investments are held in a retirement preservation trust maintained by Merrill Lynch that invests in a broadly diversified portfolio of investment contracts, U.S. government obligations, U.S. government agency securities, and high-quality money market securities.
Balanced Fund
The balanced fund seeks to provide current income and, secondarily, growth of capital. Investments are in the Income Fund of America mutual fund. This mutual fund invests in equities, bonds, and other fixed-income securities in any proportion that seems warranted by existing or expected market conditions.
Equity Fund
The equity fund seeks growth of capital. Investments are made in the Davis New York Venture mutual fund. This mutual fund invests primarily in equity securities of companies with market capitalization in excess of $250 million.
Global Fund
The global fund seeks to provide long-term growth of capital through investments throughout the world, including the United States. Investments are made in the New Perspective mutual fund. This mutual fund invests in U.S. and foreign blue chip companies, focusing on opportunities generated by changes in global trade patterns and economic and political relationships.
Tosco Stock Fund
The Tosco Stock Fund invests primarily in Tosco Corporation common stock. A small cash position is maintained to provide liquidity necessary for periodic transactions (distributions and fund exchanges). At December 31, 1999 and 1998, the Tosco Stock Fund held 22,282 and 19,674 shares of Tosco Corporation common stock, respectively.
Loan Fund
The loan fund represents amounts borrowed by participants against their individual accounts. All loans are collateralized by the vested portion of the participants’ plan balance.
As of December 31, 1999 and 1998 the Plan investments were as follows:
December 31, 1999
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Number of Fair Value
Participants per Unit Fair Value
----------------- ----------- ----------
Investments at fair value:
Stable Value Fund - Merrill Lynch Retirement Preservation
Trust (a) 2,231 $ 1.00 $ 16,589,740
Balanced Fund - American Funds Income Fund of America (a) 1,212 15.74 5,292,445
Equity Fund - Davis Funds New York Venture Fund (a) 1,253 28.76 7,149,820
Global Fund - American Funds New Perspective Fund (a) 862 29.44 4,465,333
Tosco Stock Fund - Tosco Corporation Common Stock 453 27.19 605,767
Loan Fund - Participant loans receivable (a) 2,215,522
---------------
$ 36,318,627
===============
December 31, 1998
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Number of Fair Value
Participants per Unit Fair Value
----------------- ----------- ----------
Investments at fair value:
Stable Value Fund - Merrill Lynch Retirement Preservation
Trust (a) 2,715 $ 1.00 $ 15,852,730
Balanced Fund - American Funds Income Fund of America (a) 1,518 17.34 6,002,240
Equity Fund - Davis Funds New York Venture Fund (a) 1,497 25.01 7,346,787
Global Fund - American Funds New Perspective Fund (a) 1,022 22.95 3,121,595
Tosco Stock Fund - Tosco Corporation Common Stock 475 25.87 509,057
Loan Fund - Participant loans receivable (a) 894 2,351,738
---------------
$ 35,184,147
===============
| (a) | This investment represents more than 5% of the Plan’s net assets available for benefits as of December 31, 1999 and 1998. |
4. Federal Income Tax Status
The Internal Revenue Service has determined and informed the Sponsor by a letter dated April 15, 1996, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (the “Code”). Although the Plan amendment allowing Tosco common stock as an investment fund was not in place when the foregoing determination letter was sought, management, Merrill Lynch, and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code.
5. Plan Termination
Although it has not expressed any intent to do so, the Sponsor has the right under the Plan to terminate the Plan subject to the provisions of ERISA. Upon termination, the Plan’s assets would be distributed to the participants, as soon as possible and legally permitted, on the basis of their account balances existing on the date of termination as adjusted for investment gains and losses.
6. Party-In-Interest Transactions
Certain investments of the Plan are in shares of mutual funds managed by Merrill Lynch. As Merrill Lynch is the Plan’s adminstrator, these transactions qualify as Party-In-Interest transactions. In addition, certain Plan investments are in the Sponsor’s Common Stock. These transactions also qualify as Party-in-Interest transactions.
During 1999, administrative expenses related to the Plan totaling $22,000 were paid by the Sponsor from available forfeitures.
7. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits as of December 31, 1999 and 1998 as reflected in these financial statements to the amounts reflected in the Plan’s Form 5500:
1999 1998
---------------- ----------------
Net assets available for benefits as reported in the financial statements $ 36,582,119 $ 35,459,304
Amounts allocated to withdrawing participants (286,942) (11,728)
---------------- ---------------
Net assets available for benefits as reported in the Form 5500 $ 36,295,177 $ 35,447,576
================ ===============
The following is a reconciliation of benefits paid to participants for the year ended December 31, 1999 as reflected in these financial statements to the amount reflected in the Plan's Form 5500:
Benefits paid to participants as reported in the financial statements $ 4,875,447
Amount allocated to withdrawing participants at December 31, 1999 286,942
Amount allocated to withdrawing participants at December 31, 1998 (11,728)
----------------
Benefits paid to participants as reported in the Form 5500 $ 5,150,661
================
TOSCO CORPORATION STORE SAVINGS PLAN
ITEM 27(A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
Current
Identity of Issue, Borrower, Lessor or Similar Party Description of Investment Cost Value
---------------------------------------------------- ------------------------- ---- -------
Merrill Lynch - Retirement Preservation Trust (a) 16,589,740 shares $16,589,740 $16,589,740
American Funds - Income Fund of America 336,245 shares 5,657,497 5,292,445
Davis Funds - Davis New York Venture Fund 248,607 shares 4,837,894 7,149,820
American Funds - New Perspective Fund 151,676 shares 3,257,125 4,465,333
Tosco Stock Fund (a) 22,282 shares 482,281 605,767
Participant Loans Receivable Interest rates from 5.97%
to 10.00% and maturities
through 2004 - 2,215,522
-----------
$36,318,627
===========
Notes:
(a) - Investment qualifies as a party-in-interest for the Plan and consists primarily of Tosco Corporation common stock.
TOSCO CORPORATION STORE SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
PUCHASES
Number of Purchase
Identity of Party Involved Description of Asset Transactions Price
- -------------------------- -------------------- ------------ ---------
Merrill Lynch Retirement Preservation Trust 864 $4,509,691
American Funds Income Fund of America 374 1,160,734
Davis Funds Davis New York Venture Fund 385 1,301,449
American Funds New Perspective Fund 338 1,590,493
Participant loans Loans receivable 179 1,121,563
SALES
Number of Selling Cost of Net Gain
Identity of Party Involved Description of Asset Transactions Price Asset or (Loss)
- -------------------------- -------------------- ------------ ------- ------- ---------
Merrill Lynch Retirement Preservation Trust 677 $3,781,312 $3,781,312 $ -
American Funds Income Fund of America 645 1,362,458 1,342,982 19,476
Davis Funds Davis New York Venture Fund 555 2,512,060 1,821,031 691,029
American Funds New Perspective Fund 444 1,167,307 980,578 186,729
Participant loans Loans receivable 248 1,257,779 1,257,779 -
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-54153) of Tosco Corporation of our report dated June 26, 2000 relating to the financial statements and financial statement schedules of the Tosco Corporation Store Savings Plan as of December 31, 1999 and 1998, and for the year ended December 31, 1999, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Phoenix, Arizona
June 28, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | TOSCO CORPORATION
(Registrant)
TOSCO CORPORATION
STORE SAVINGS PLAN |
| Date: June 28, 2000 | By: /s/ WANDA WILLIAMS
(Wanda Williams)
Vice President - Human Resources |
| | By: /s/ RANDALL S. SCHULTZ
(Randall S. Schultz)
Plan Administrator |
