1
FORM 11-K
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number 0-18886
A. HS RESOURCES, INC. EMPLOYEE INVESTMENT 401(k) PLAN
and
HS RESOURCES, INC. PROFIT SHARING PLAN
B. HS RESOURCES, INC.
One Maritime Plaza, 15th Fl.
San Francisco, CA 94111
2
HS RESOURCES, INC. EMPLOYEE
INVESTMENT 401(k) PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
3
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(k) PLAN
INDEX
Page(s)
-------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 4
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits with Fund
Information as of December 31, 1995 5
Statement of Net Assets Available for Benefits with Fund
Information as of December 31, 1994 6
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1995 7
NOTES TO FINANCIAL STATEMENTS 8-12
SCHEDULE SUPPORTING FINANCIAL STATEMENTS:
Schedule I-Item 27(a)--Schedule of Assets Held for Investment
Purposes as of December 31, 1995 13
4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
HS Resources, Inc. Employee Investment 401(k) Plan:
We have audited the accompanying statements of net assets available for
benefits of HS RESOURCES, INC. EMPLOYEE INVESTMENT 401(k) PLAN (the Plan ) as
of December 31, 1995 and 1994, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1995. These
financial statements and the schedule referred to below are the responsibility
of the Plan s management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1995 and 1994, and the changes in net assets available for
benefits for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor s Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for plan benefits of each fund. The supplemental schedule and fund
information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
Denver, Colorado,
June 21, 1996.
5
HS RESOURCES, INC.
------------------
EMPLOYEE INVESTMENT 401(k) PLAN
--------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
-----------------------------------------------------------------
AS OF DECEMBER 31, 1995
----------------------
Participant - Directed
----------------------------------------------------------------------------------------------------------------
Conser- HSR
Money GIC vative Balanced Conser- Inter- Common Loans
Market Port- Bond Value vative Value Growth national Emerging Stock to Parti-
Portfolio folio Fund Portfolio Equity Equity Value Equity Growth Fund Cash cipants Total
--------- ----- ------ --------- ------- ------ ------ -------- -------- ------ ---- --------- -----
ASSETS:
Investments-
Investments in
HS Resources,
Inc.
Master Trust
(Note 5) $57,961 $20,428 $147,038 $436,322 $428,756 $270,288 $175,078 $245,085 $489,799 $219,389 $307 $ - $2,490,451
Loans to parti-
cipants - - - - - - - - - - - 12,825 12,825
------ -------- -------- -------- -------- -------- -------- -------- -------- -------- --- ------- ---------
Total investments 57,961 20,428 147,038 436,322 428,756 270,288 175,078 245,085 489,799 219,389 307 12,825 2,503,276
------ -------- --------- -------- -------- -------- -------- -------- ------- --------- --- ------- ---------
Receivables-
Employer - - - - - - - - - 192,747 - - 192,747
------ -------- --------- -------- -------- -------- -------- -------- -------- ------- --- ------- --------
NET ASSETS
AVAILABLE
FOR BENEFITS $57,961 $20,428 $147,038 $436,322 $428,756 $270,288 $175,078 $245,085 $489,799 $412,136 $307 $12,825$2,696,023
======= ======= ======== ======== ======== ======== ======== ======== ======== ======== ==== ======= =========
The accompanying notes to financial statements are an integral part of this statement.
6
HS RESOURCES, INC.
-------------------
EMPLOYEE INVESTMENT 401(k) PLAN
-------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
---------------------------------------------------------------------
AS OF DECEMBER 31, 1994
-----------------------
Participant - Directed
------------------------------------------------------------------------------
Conser- HSR
Money GIC vative Balanced Conser- Inter- Common Loans
Market Port- Bond Value vative Value Growth national Emerging Stock to Parti-
Portfolio folio Fund Portfolio Equity Equity Value Equity Growth Fund Cash cipants Total
--------- ----- ------ --------- ------- ------ ------ -------- -------- ------ ---- --------- -----
ASSETS:
Investments-
Investments in
HS Resources,
Inc. Master
Trust (Note 5)$35,722 $12,701 $96,103 $296,018 $304,528 $173,235 $119,670 $143,273 $274,992 $ - $233 $ - $1,456,475
Loans to parti-
cipants - - - - - - - - - - - 17,821 17,821
------- ------- ------- -------- -------- -------- -------- -------- -------- ------- ---- ------- ---------
Total invest-
ments 35,722 12,701 96,103 296,018 304,528 173,235 119,670 143,273 274,992 - 233 17,821 1,474,296
------ ------- ------- -------- -------- -------- -------- -------- -------- ------- ---- ------- --------
Receivables-
Employer - - - - - - - - - 283,003 - - 283,003
------ ------- ------- -------- -------- -------- -------- -------- -------- ------- ---- ------- --------
NET ASSETS
AVAILABLE
FOR BENEFITS $35,722 $12,701 $96,103 $296,018 $304,528 $173,235 $119,670 $143,273 $274,992 $283,003 $233 $17,821 $1,757,299
The accompanying notes to financial statements are an integral part of this statement.
7
HS RESOURCES, INC.
------------------
EMPLOYEE INVESTMENT 401(k) PLAN
-------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
Participant - Directed
------------------------------------------------------------------------------------------
Conser- HSR
Money GIC vative Balanced Conser- Inter- Common Loans
Market Port- Bond Value vative Value Growth national Emerging Stock to Parti-
Portfolio folio Fund Portfolio Equity Equity Value Equity Growth Fund Cash cipants Total
--------- ----- ------ --------- ------- ------ ------ -------- -------- ------ ---- --------- -----
ADDITIONS TO
NET ASSETS
ATTRIBUTED TO:
Investment income
(loss)-
Net investment
income (loss)
from HS
Resources,
Inc. Master
Trust (Note 5) $ 5,126 $ 1,012 $ 15,607 $ 83,526 $ 98,522 $ 74,438 $ 40,385 $ 11,148 $129,852 $(26,048)$ 38 $ 1,177 $ 434,783
Interest on
participant
loans
CONTRIBUTIONS:
Employer - - - - - - - - - 192,747 - - 192,747
Employee 9,326 9,890 19,688 69,132 68,298 49,104 41,070 47,512 73,141 456 48 - 387,665
Rollover 185,248 - - 11,098 5,549 - - 5,549 - - - - 207,444
------- ------ ------- ------- -------- ------- ------- ------- ------- -------- ---- ---- --------
Total
additions 194,574 9,890 19,688 80,230 73,847 49,104 41,070 53,061 73,141 193,203 48 - 787,856
------- ------ ------- ------- ------- ------- ------- ------- ------- -------- ---- ---- ---------
DEDUCTIONS FROM
NET ASSETS
ATTRIBUTED TO:
Distributions
to employees - (2,654) (1,125) (35,572) (64,340) (69,075) (66,985) 565 (29,811) (14,898) (20) - (283,915)
------- ------- ------ -------- ------- -------- ------- ------ ------- -------- ---- ---- --------
NET INCREASE 199,700 8,248 34,170 128,184 108,029 54,467 14,470 64,774 173,182 152,257 66 1,177 938,724
NET TRANSFERS
BETWEEN FUNDS (177,461) (521) 16,765 12,120 16,199 42,586 40,938 37,038 41,625 (23,124) 8 (6,173) -
NET ASSETS
AVAILABLE
FOR BENEFITS:
Beginning of
period 35,722 12,701 96,103 296,018 304,528 173,235 119,670 143,273 274,992 283,003 233 17,821 1,757,299
------- ------ ------- ------- ------- ------- ------- ------- -------- -------- ---- ------- ----------
End of period $57,961 $20,428 $147,038 $436,322 $428,756 $270,288 $175,078 $245,085 $489,799 $412,136 $307 $12,825 $2,696,023
======= ======= ======== ======== ======== ======== ======== ======== ======== ======== ==== ======= =========
The accompanying notes to financial statements are an integral part of this statement.
8
HS RESOURCES,INC. EMPLOYEE INVESTMENT 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(1) DESCRIPTION OF PLAN
-------------------
Effective July 1, 1990, HS Resources, Inc. (the Company ) established the HS
Resources Inc. Employee Investment 401(k) Plan (the Plan ).
The following description of the Plan provides only general information.
Participants and all others should refer to the Plan Agreement for a more
complete description of the Plan s provisions.
General
-------
The Plan is a defined contribution plan covering all employees of the Company
who have completed one year of service consisting of at least 1,000 hours of
service. The Plan was established under the provisions of Section 401(a) of
the Internal Revenue Code ( IRC ), which includes a qualified deferred
arrangement as described in Section 401(k) of the IRC, for the benefit of
eligible employees of the Company. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended ( ERISA ).
Benefits under the Plan are not guaranteed by the Pension Benefit Guaranty
Corporation.
Contributions
-------------
Participants can contribute on a pre-tax basis, as permitted by Section 401(k)
of the IRC, an amount from 1% to 10% of their compensation as defined by the
Plan, limited by the requirements of the IRC. Employees may contribute
rollover contributions from another qualified plan. Participants may also
contribute after-tax amounts from 1% to 5% of compensation to the Plan.
Each Plan year, the Company may in its sole discretion, contribute a matching
contribution. Participants must be continuously employed from the first day to
the last day of the Plan year to be eligible to receive matching contributions.
For the Plan year ended December 31, 1995, the Company matched 50% of
employee s elective deferrals up to 10% of compensation.
Each Plan year, the Company may, at its discretion, contribute an additional
qualified nonelective contribution ( QNEC ) to the Plan. Allocations of QNEC
contributions are made in the proportion that a participant s compensation
bears to the compensation of the eligible non-highly compensated participants
for the portion of the Plan year in which they were participants. During the
Plan year ended December 31, 1995, the Company made QNECs of $36,188.
9
The annual additions under the Plan and all other plans sponsored by the
Company are limited to the lesser of 25% of eligible compensation or $30,000.
Annual additions are defined by the IRC.
Participant Accounts
--------------------
Participant accounts are credited with participant elective contributions,
matching Company contributions, QNEC contributions and Plan earnings or losses.
Investment Options
------------------
Participants are offered ten investment options in which they may invest as
follows:
* Money Market Portfolio--Seeks to provide liquidity, stability
of principal and current income by investing in U.S.
government securities, certificates of deposits, bankers
acceptances, and commercial paper.
* GIC Portfolio--Seeks to provide stability of principal,
liquidity, and current income by investing in a wide range of
guaranteed investment and bank investment contracts.
* Conservative Bond Fund--Seeks to preserve capital,
maintain market liquidity and achieve a total return in
excess of investment benchmarks without assuming undue
risk by investing in a diversified range of bonds and
other fixed-income securities.
* Balanced Value Portfolio--Seeks long-term capital
growth through investment in both stocks and bonds.
* Conservative Equity--Seeks long-term capital growth and
income through investment in value-oriented, income
producing stocks.
* Value-Equity--Seeks long-term capital growth and income
through investment in value-orientated stocks.
* Growth Value--Seeks long-term capital growth through
investment in stocks.
* International Equity--Seeks capital growth through
investment in securities of foreign (non-US) companies
in maturing and emerging economies.
* Emerging Growth--Seeks investment in stocks of
companies that have the potential for above-average
growth.
* HSR Common Stock Fund--Investment in the common stock,
$.001 par value, of HS Resources, Inc.
10
Participants may invest their accounts in one or more of the above funds in
whole percent increments. On the first day of any calendar month, participants
may change the distribution of their funds, with fourteen days written notice
to the Plan Administrator.
Vesting
-------
Participants are immediately fully vested in both their elective contributions,
Company matching contributions and QNEC contributions to the Plan.
Payments of Benefits
--------------------
A participant s entire interest in the Plan is payable upon attaining normal
retirement age (age 65), death or becoming disabled, as defined. Upon
termination of service, a participant s vested interest in the Plan is payable.
Participant s benefits are payable in a lump sum, installments or a combination
thereof. In addition, hardship distributions are permitted if certain criteria
are met.
Benefits for retired and/or terminated employees who had not received their
full payment for their vested benefits, but had requested payment prior to
year-end were immaterial. These amounts are included as a component of net
assets available for plan benefits in the accompanying financial statements.
These vested benefits will be distributed in accordance with the Plan Agreement.
Participant Loans
-----------------
In accordance with the Plan Agreement, participants may borrow funds from the
Plan. Borrowings cannot exceed the lesser of $50,000 or 50% of the
participant s vested account. Loans are secured by the participant s account
and bear an interest rate of prime plus 2% on the date the loan is approved.
Such loans are evidenced by promissory notes.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Accounting
-------------------
The accompanying financial statements have been prepared using the accrual
method of accounting. The preparation of the financial statements in
conformity with generally accepted accounting principles requires the Plan s
management to use estimates and assumptions that affect the financial
statements and disclosures. Actual results could differ from these estimates.
Investment Valuation
--------------------
The Plan s investments are stated at fair value which is determined by
PaineWebber Trust Company (the Trustee ) based on current market prices.
Participant loans are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade date basis.
Payment of Benefits
-------------------
Benefits are recorded when paid.
11
Plan Expenses
-------------
The Plan pays all investment management fees (see Note 6). The Company pays
all other costs and expenses of maintaining the Plan.
(3) INCOME TAXES
------------
The Internal Revenue Service ( IRS ) has determined and informed the Company by
a letter dated March 28, 1991, that the Plan and related trust are designed in
accordance with the applicable sections of the IRC. The Plan has been amended
since receiving the determination letter. However, the Plan Administrator
believes that the Plan is currently designed and being operated in compliance
with the applicable requirements of the IRC. Therefore, the Plan Administrator
believes that the Plan was qualified and the related trust was tax-exempt as of
the financial statement dates.
(4) PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan and dispose of the net assets in accordance with the
provisions of ERISA.
(5) INTEREST IN HS RESOURCES, INC. MASTER TRUST
-------------------------------------------
Most of the Plan s investments are in the HS Resources, Inc. Master Trust
( Master Trust ) which was established for the investment of assets of the Plan
and the HS Resources, Inc. Profit Sharing Plan. Each participating plan has an
undivided interest in the Master Trust. The assets of the Master Trust are
held by the Trustee. At December 31, 1995 and 1994, the Plan s interest in the
net assets of the Master Trust was approximately 80% and 77%, respectively.
Investment income, net of expenses, relating to the Master Trust is allocated
to the individual plans based upon average monthly balances invested by each
plan.
The following table presents the fair values of investments for the Master
Trust:
December 31,
1995 1994
---- ----
Investments at fair value:
Cash and cash equivalents $ 793 $ 651
Pooled trusts 2,838,728 1,890,053
Employer stock 291,534 -
--------- ----------
$3,131,055 $1,890,704
========== ==========
12
Investment income for the Master Trust is as follows:
Year Ending
December 31,1995
Interest income $ 150
Income from pooled trusts 578,156
Income (loss) from employer stock (34,798)
--------
$543,508
========
(6) RELATED PARTY TRANSACTIONS
--------------------------
Certain Plan investments are units of pooled trust funds managed by the
Trustee. Therefore, these transactions qualify as party-in-interest. Fees
paid by the Master Trust for the investment management services amounted to
$34,000 for the year ended December 31, 1995. Certain Plan investments are
also shares of the Company s common stock.
In addition, one of the named fiduciaries of the Plan is related to the account
manager of the Master Trust, who received total commissions of $9,660 for the
Plan year ending December 31, 1995.
(7) PLAN AMENDMENT
- - --------------
The Plan was amended effective March 1, 1995 to allow the participants to
direct their accounts in qualifying employer securities.
(8) SUBSEQUENT EVENT
----------------
Effective June 17, 1996, the Tide West Oil Company 401(k) Plan was merged into
the Plan. Approximately $370,000 of assets will be transferred to the Master
Trust during 1996.
13
SCHEDULE I
HS RESOURCES, INC.
------------------
EMPLOYEE INVESTMENT 401(k) PLAN
-------------------------------
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (a)
--------------------------------------------------------------
AS OF DECEMBER 31, 1995
------------------------
Identity of Party Involved/ Historical Current
Description of Investments Cost Value
- - ----------------------------------------------- ---------- -------
Loans to participants (interest rates ranging from
7% to 11%) $12,825 $12,825
======= =======
(a) All investments in the Master Trust are properly excluded from this
schedule.
The accompanying notes to financial statements
are an integral part of this schedule.
14
HS RESOURCES, INC. PROFIT-SHARING PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
15
HS RESOURCES, INC.
------------------
PROFIT-SHARING PLAN
-------------------
INDEX
----
Page(s)
--------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 16
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits with Fund
Information as of December 31, 1995 17
Statement of Net Assets Available for Benefits with Fund
Information as of December 31, 1994 18
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended
December 31, 1995 19
NOTES TO FINANCIAL STATEMENTS 20-24
SCHEDULE SUPPORTING FINANCIAL STATEMENTS:
Schedule I-Item 27(a)--Schedule of Assets Held for
Investment Purposes as of December 31, 1995 25
16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Plan Administrator of the
HS Resources, Inc. Profit-Sharing Plan:
We have audited the accompanying statements of net assets available for
benefits of HS RESOURCES, INC. PROFIT-SHARING PLAN (the Plan ) as of
December 31, 1995 and 1994, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1995. These financial
statements and the schedule referred to below are the responsibility of the
Plan s management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1995 and 1994 and the changes in net assets available for benefits
for the year ended December 31, 1995 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor s Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for plan benefits of each fund. The supplemental schedule and fund
information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
Denver, Colorado,
June 21, 1996.
17
HS RESOURCES, INC.
------------------
PROFIT-SHARING PLAN
--------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
--------------------------------------------------------------------
AS OF DECEMBER 31, 1995
------------------------
Participant - Directed
--------------------------------------------------------------------------
Conser- HSR
Money GIC vative Balanced Conser- Inter- Common Loans
Market Port- Bond Value vative Value Growth national Emerging Stock to Parti-
Portfolio folio Fund Portfolio Equity Equity Value Equity Growth Fund Cash cipants Total
--------- ----- ------ --------- ------- ------ ------ -------- -------- ------ ---- --------- -----
ASSETS:
Investments-
Investments in
HS Resources,
Inc. Master
Trust (Note 5) $37,259 $8,898 $14,771 $49,358 $98,249 $82,338 $36,630 $83,816 $156,654 $72,145 $486 $ - $640,604
Loans to parti-
cipants - - - - - - - - - - - 19,427 19,427
-------- ------ ------- ------- ------- ------- ------- ------- -------- ------- --- ------ -------
Total investments 37,259 8,898 14,771 49,358 98,249 82,338 36,630 83,816 156,654 72,145 486 19,427 660,031
-------- ------ ------- ------- ------- ------- ------- ------- -------- ------- ---- ------ -------
NET ASSETS
AVAILABLE FOR
BENEFITS $37,259 $8,898 $14,771 $49,358 $98,249 $82,338 $36,630 $83,816 $156,654 $72,145 $486 $19,427 $660,031
======= ====== ======= ======= ======= ======= ======= ======= ======== ======= ==== ======= ========
The accompanying notes to financial statements are an integral part of this statement.
18
HS RESOURCES, INC.
------------------
PROFIT-SHARING PLAN
-------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
--------------------------------------------------------------------
AS OF DECEMBER 31, 1994
----------------------
Participant - Directed
--------------------------------------------------------------------------
Conser- HSR
Money GIC vative Balanced Conser- Inter- Common Loans
Market Port- Bond Value vative Value Growth national Emerging Stock to Parti-
Portfolio folio Fund Portfolio Equity Equity Value Equity Growth Fund Cash cipants Total
--------- ----- ------ --------- ------- ------ ------ -------- -------- ------ ---- --------- -----
ASSETS:
Investments-
Investments in
HS Resources,
Inc. Master
Trust (Note 5)$36,428 $8,628 $11,908 $37,447 $74,394 $57,159 $26,117 $75,590 $106,140 $ - $418 $ - $434,229
Loans to parti-
cipants - - - - - - - - - - - 24,795 24,795
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- --- ------- --------
Total invest-
ments 36,428 8,628 11,908 37,447 74,394 57,159 26,117 75,590 106,140 - 418 24,795 459,024
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- --- ------- -------
Receivables-
Employer - - - - - - - - - 95,370 - - 95,370
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- --- ------- -------
NET ASSETS
AVAILABLE
FOR BENEFITS $36,428 $8,628 $11,908 $37,447 $74,394 $57,159 $26,117 $75,590 $106,140 $95,370 $418 $24,795 $554,394
======= ====== ======= ======= ======= ======= ======= ======= ======== ======= ==== ======= =======
The accompanying notes to financial statements are an integral part of this statement.
19
HS RESOURCES, INC.
-----------------
PROFIT-SHARING PLAN
-------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
Participant - Directed
--------------------------------------------------------------------------
Conser- HSR
Money GIC vative Balanced Conser- Inter- Common Loans
Market Port- Bond Value vative Value Growth national Emerging Stock to Parti-
Portfolio folio Fund Portfolio Equity Equity Value Equity Growth Fund Cash cipants Total
--------- ----- ------ --------- ------- ------ ------ -------- -------- ------ ---- --------- -----
ADDITIONS TO
NET ASSETS
ATTRIBUTED TO:
Investment income-
(loss)
Net investment
income (loss)
from HS
Resources
Inc. Master
Trust (Note 5)$ 2,370 $ 533 $ 1,378 $ 9,622 $22,285 $22,881 $ 8,444 $ 4,594 $ 46,433 $(8,750) $112 $ - $109,902
Interest on
participant
loans - - - - - - - - - - - 1,905 1,905
------- ------ -------- -------- ------- ------- -------- -------- -------- -------- ---- ------ -------
Total additions 2,370 533 1,378 9,622 22,285 22,881 8,444 4,594 46,433 (8,750) 112 1,905 111,807
-------- ----- -------- -------- ------- ------- -------- -------- -------- -------- ---- ------ --------
DEDUCTIONS FROM
NET ASSETS
ATTRIBUTED TO:
Distributions to
employees (360) - - (330) (1,065) (236) (564) - (444) (3,152) (19) - (6,170)
------- ------ -------- -------- ------- ------- -------- -------- -------- -------- ---- ------ --------
NET INCREASE
(DECREASE) 2,010 533 1,378 9,292 21,220 22,645 7,880 4,594 45,989 (11,902) 93 1,905 105,637
NET TRANSFERS
BETWEEN FUNDS (1,179) (263) 1,485 2,619 2,635 2,534 2,633 3,632 4,525 (11,323) (25) (7,273) -
NET ASSETS
AVAILABLE
FOR BENEFITS:
Beginning of
period 36,428 8,628 11,908 37,447 74,394 57,159 26,117 75,590 106,140 95,370 418 24,795 554,394
------- ------ -------- -------- ------- ------- -------- -------- -------- -------- ---- ------ --------
End of period $37,259 $8,898 $14,771 $49,358 $98,249 $82,338 $36,630 $83,816 $156,654 $72,145 $486 $19,427 $660,031
======= ====== ======== ======= ======= ======= ======= ======= ======== ======= ==== ======= ========
The accompanying notes to financial statements are an integral part of this statement.
20
HS RESOURCES, INC.
------------------
PROFIT-SHARING PLAN
-------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
(1) DESCRIPTION OF PLAN
-------------------
Effective June 30, 1989, HS Resources, Inc. (the Company ) established the HS
Resources, Inc. Employee Investment Plan, which was amended and restated
effective as of that date, and renamed the HS Resources, Inc. Profit-Sharing
Plan (the Plan ). The following description of the Plan provides only general
information. Participants and all others should refer to the Plan Agreement
for a more complete description of the Plan s provisions.
General
-------
The Plan is a defined contribution plan covering all employees of the Company
who have completed one year of service consisting of at least 1,000 hours of
service. The Plan was established under the provisions of Section 401(a) of
the Internal Revenue Code ( IRC ) for the benefit of eligible employees of the
Company. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ( ERISA ). Benefits under the Plan are not
guaranteed by the Pension Benefit Guaranty Corporation.
Contributions
-------------
The Company may make a discretionary profit-sharing contribution each year to
the Plan. The profit-sharing contribution is allocated to each participant s
account based on an allocation formula, as defined in the Plan Agreement.
There was no Company profit-sharing contribution for the Plan year ended
December 31, 1995. Participants must be employed from the first day to the
last day of a Plan year in order to be eligible to receive a contribution.
Total annual additions under the Plan and all other plans sponsored by the
Company are limited to the lesser of 25% of eligible compensation or $30,000.
Annual additions are defined by the IRC.
Participant Accounts
--------------------
Participant accounts are credited with Company profit-sharing contributions,
allocations of Plan earnings or losses, and allocations of forfeitures.
21
Investment Options
------------------
Participants are offered ten investment options in which they may invest as
follows:
* Money Market Portfolio--Seeks to provide liquidity,
stability of principal and current income by investing
in U.S. government securities, certificates of deposit,
bankers acceptances, and commercial paper.
* GIC Portfolio--Seeks to provide stability of principal,
liquidity, and current income by investing in a wide
range of guaranteed investment and bank investment
contracts.
* Conservative Bond Fund--Seeks to preserve capital,
maintain market liquidity and achieve a total return in
excess of investment benchmarks without assuming undue
risk by investing in a diversified range of bonds and
other fixed-income securities.
* Balanced Value Portfolio--Seeks long-term capital
growth through investment in both stocks and bonds.
* Conservative Equity--Seeks long-term capital growth and
income through investment in value-oriented, income
producing stocks.
* Value-Equity--Seeks long-term capital growth and income
through investment in value-orientated stocks.
* Growth Value--Seeks long-term capital growth through
investment in stocks.
* International Equity--Seeks capital growth through
investment in securities of foreign (non-US) companies
in maturing and emerging economies.
* Emerging Growth--Seeks investment in stocks of
companies that have the potential for above-average
growth.
* HSR Common Stock Fund--Investment in the common stock,
$.001 par value, of HS Resources, Inc.
Participants may invest their accounts in one or more of the above funds in
whole percent increments. On the first day of any calendar month, participants
may change the distribution of their funds, with fourteen days written notice
to the Plan Administrator.
Vesting
-------
Vesting in the Company profit-sharing contribution is based on years of
service. This contribution shall be fully vested and non-forfeitable upon and
after attaining the Plan s normal retirement age
22
(age 65), death, or disability. If termination occurs for any reason other
than these events, the participant vests as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 year 0%
1 year 0%
2 years 20%
3 years 40%
4 years 66 2/3%
5 years 100%
Forfeitures
-----------
When certain terminations of participation in the Plan occur, the non-vested
portion of the participant s account represents a forfeiture, as defined by the
Plan. Forfeitures are reallocated among the profit-sharing contribution
accounts of participants at the end of the Plan year in which the forfeiture
occurred. However, if the participant is reemployed within six years and
fulfills certain requirements, as defined by the Plan Agreement, the
participant s account will be restored. Total forfeitures during the Plan year
ended December 31, 1995 were approximately $4,000.
Payments of Benefits
--------------------
A participant s entire interest in the Plan is payable upon attaining normal
retirement age (age 65), death or becoming disabled, as defined. Upon
termination of service, a participant s vested interest in the Plan is payable.
Participants' benefits are payable in a lump sum, installments or a combination
thereof. In addition, hardship distributions are permitted if certain criteria
are met.
Benefits for retired and/or terminated employees who had not received their
full payment for their vested benefits, but had requested payment prior to
year-end were immaterial. These amounts are included as a component of net
assets available for plan benefits in the accompanying financial statements.
These vested benefits will be distributed in accordance with the Plan
Agreement.
Participant Loans
-----------------
In accordance with the Plan Agreement, participants may borrow funds from the
Plan. Borrowings cannot exceed the lesser of $50,000 or 50% of the
participant s vested account. Loans are secured by the participant s account
and bear an interest rate of prime plus 2% on the date the loan is approved.
Such loans are evidenced by promissory notes.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Accounting
-------------------
The accompanying financial statements have been prepared using the accrual
basis of accounting. The preparation of the financial statements in conformity
with generally accepted accounting principles requires the Plan s management to
use estimates and assumptions that affect the accompanying financial statements
and disclosures. Actual results could differ from these estimates.
23
Investment Valuation
--------------------
The Plan s investments are stated at fair value which is determined by
PaineWebber Trust Company (the Trustee ) based on current market prices.
Participant loans are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade date basis.
Payment of Benefits
-------------------
Benefits are recorded when paid.
Plan Expenses
-------------
The Plan pays all investment management fees (see Note 6). The Company pays
all the costs and expenses of maintaining the Plan.
(3) INCOME TAXES
------------
The Internal Revenue Service ( IRS ) has determined and informed the Company by
a letter dated March 28, 1991, that the Plan and related trust are designed in
accordance with the applicable sections of the IRC. The Plan has been amended
since receiving the determination letter. However, the Plan Administrator
believes that the Plan is currently designed and being operated in compliance
with the applicable requirements of the IRC. Therefore, the Plan Administrator
believes the Plan was qualified and the related trust was tax-exempt as of the
financial statement dates.
(4) PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan and dispose of the net assets in accordance with the
provisions of ERISA.
(5) INTEREST IN HS RESOURCES, INC. MASTER TRUST
-------------------------------------------
Most of the Plan s investments are in the HS Resources, Inc. Master Trust
( Master Trust ) which was established for the investment of assets of the Plan
and the HS Resources, Inc. Employee Investment 401(k) Plan. Each participating
plan has an undivided interest in the Master Trust. The assets of the Master
Trust are held by the Trustee. At December 31, 1995 and 1994, the Plan s
interest in the net assets of the Master Trust was approximately 20% and 23%,
respectively. Investment income, net of expenses, relating to the Master Trust
is allocated to the individual plans based upon average monthly balances
invested by each plan.
24
The following table presents the fair values of investments for the Master
Trust:
December 31,
1995 1994
Investments at fair value:
Cash and cash equivalents $ 793 $ 651
Pooled trusts 2,838,728 1,890,053
Employer stock 291,534 -
------------ ---------
$3,131,055 1,890,704
Investment income for the Master Trust is as follows:
Year Ended
December 31,
1995
Interest income $ 150
Income from pooled trusts 578,156
Income (loss) from employer stock (34,798)
--------
$543,508
========
(6) RELATED PARTY TRANSACTIONS
--------------------------
Certain Plan investments are units of pooled trust funds managed by the
Trustee. Therefore, these transactions qualify as party-in-interest. Fees
paid by the Master Trust for the investment management services amounted to
$34,000 for the year ended December 31, 1995. Certain Plan investments are
also shares of the Company s common stock.
In addition, one of the named fiduciaries of the Plan is related to the
account manager of the Master Trust, who received total commissions of $9,660
for the Plan year ended December 31, 1995.
(7) PLAN AMENDMENT
--------------
The Plan was amended effective March 1, 1995 to allow the participants to
direct their accounts in qualifying employer securities.
26
SCHEDULE I
HS RESOURCES, INC.
------------------
PROFIT-SHARING PLAN
--------------------
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (a)
---------------------------------------------------------------
AS OF DECEMBER 31, 1995
-----------------------
Identity of Party Involved/ Historical Current
Description of Investments Cost Value
- - --------------------------------------------- ---------- ------
Loans to participants (interest rates ranging
from 7% to 11%) $24,795 $24,795
(a)All investments in the Master Trust are properly excluded from this
schedule.
The accompanying notes to financial statements
are an integral part of this schedule.