1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 11-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ----------------
Commission File Number 0-17506
--------------------------
A: Full title of the plan:
UST INC.
EMPLOYEES' SAVINGS PLAN
B: Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
UST INC.
100 West Putnam Avenue
Greenwich, Connecticut 06830
2
UST Inc.
Employees' Savings Plan
Audited Financial Statements and Schedules
Years ended December 31, 1995 and 1994
with Report of Independent Auditors
3
UST Inc.
Employees' Savings Plan
(the "Plan")
Audited Financial Statements and Schedules
Years ended December 31, 1995 and 1994
INDEX
Report of Independent Auditors............................................. 1
Audited Financial Statements
Statement of Net Assets Available for Benefits........................ 2
Statement of Changes in Net Assets Available for Benefits............. 4
Notes to Financial Statements......................................... 6
Supplemental Schedules
Assets Held for Investment Purposes................................... 11
Reportable Transactions............................................... 13
4
Report of Independent Auditors
To the Participants of the
UST Inc. Employees' Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the UST Inc. Employees' Savings Plan ("the Plan") as of December 31, 1995 and
1994, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1995 and 1994, and the changes in its net assets available for
benefits for the years then ended, 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 accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1995, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The fund information in
the statement 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 benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in our audit 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.
Ernst & Young LLP
April 29, 1996
1
5
UST Inc.
Employees' Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1995
Information by Fund
----------------------------------------------------------------
FUNDS
FUND A FUND B C AND D FUND E
----------------------------------------------------------------
ASSETS
Investments (Notes 1 and 4):
Common stock of UST Inc.-at fair value (cost: $25,285,348) $ 88,063,976
Group trust funds--at fair value:
Common stock (cost: $3,842,322) $ 7,356,044
Short-term investments (cost equal to fair value) $ 1,343,180 18
Guaranteed investment contracts 16,825,180
Balanced Fund-at fair value (cost: $1,518,647) $1,654,591
Small Company Fund-at fair value (cost: $3,633,941)
----------------------------------------------------------------
Total investments 18,168,360 7,356,044 88,063,994 1,654,591
----------------------------------------------------------------
Participant loans receivable
Contributions receivable:
Participants 154,229 84,438 137,134 38,767
Employer 729 278,717
Accrued income receivable 7,553 62 858 18
Interfund receivables (payables), net 115,733 (39,511) (326,628) 32,939
----------------------------------------------------------------
Total assets 18,446,604 7,401,033 88,154,075 1,726,315
----------------------------------------------------------------
LIABILITIES
Due to participants 40,857 27,173 314,300 3,924
Due to trustee 6,491 2,435 29,630 406
----------------------------------------------------------------
Net assets available for benefits $18,399,256 $ 7,371,425 $ 87,810,145 $1,721,985
==================================================================
------------------------------------------
PARTICIPANT TOTAL
FUND F LOAN FUND ALL FUNDS
------------------------------------------
ASSETS
Investments (Notes 1 and 4):
Common stock of UST Inc.-at fair value (cost: $25,285,348) $ 88,063,976
Group trust funds--at fair value:
Common stock (cost: $3,842,322) 7,356,044
Short-term investments (cost equal to fair value) 1,343,198
Guaranteed investment contracts 16,825,180
Balanced Fund-at fair value (cost: $1,518,647) 1,654,591
Small Company Fund-at fair value (cost: $3,633,941) $4,702,851 4,702,851
===========================================
Total investments 4,702,851 119,945,840
===========================================
Participant loans receivable $3,604,069 3,604,069
Contributions receivable:
Participants 92,595 507,163
Employer 279,446
Accrued income receivable 96 18,425 27,012
Interfund receivables (payables), net 30,867 186,600 --
===========================================
Total assets 4,826,409 3,809,094 124,363,530
===========================================
LIABILITIES
Due to participants 7,845 12,262 406,361
Due to trustee 1,625 40,587
===========================================
Net assets available for benefits $4,816,939 $3,796,832 $123,916,582
===========================================
VALUATION
UNITS PER UNIT AMOUNT
--------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS
Fund A 1,427,140 $12.89 $ 18,399,256
Fund B 240,340 30.67 7,371,425
Funds C and D 2,631,016 33.38 87,810,145
Fund E 138,897 12.40 1,721,985
Fund F 283,314 17.00 4,816,939
Participant Loan Fund 3,796,832 1.00 3,796,832
------------
$123,916,582
============
See notes to financial statements.
2
6
UST Inc.
Employees' Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1994
Information by Fund
------------------------------------------------------------------
FUNDS
FUND A FUND B C AND D FUND E
------------------------------------------------------------------
ASSETS
Investments (Notes 1 and 4):
Common stock of UST Inc.-at fair value (cost: $24,747,089) $ 76,033,495
Group trust funds--at fair value:
Common stock (cost: $2,853,766) $ 4,605,928
Short-term investments (cost equal to fair value) $ 752,756 4,404
Guaranteed investment contracts 17,698,861
Balanced Fund-at fair value (cost: $723,008) $700,395
Small Company Fund-at fair value (cost: $1,098,546)
------------------------------------------------------------------
Total investments 18,451,617 4,605,928 76,037,899 700,395
------------------------------------------------------------------
Participant loans receivable
Contributions receivable:
Participants 185,947 59,111 153,371 19,250
Employer 870 283,208
Accrued income receivable 3,070 40 1,159
Interfund receivables (payables), net (40,327) (7,906) (217,997) 30,432
------------------------------------------------------------------
Total assets 18,601,177 4,657,173 76,257,640 750,077
------------------------------------------------------------------
LIABILITIES
Due to participants 130,397 10,904 464,667 460
------------------------------------------------------------------
Net assets available for benefits $ 18,470,780 $ 4,646,269 $ 75,792,973 $749,617
==================================================================
------------------------------------------
PARTICIPANT TOTAL
FUND F LOAN FUND ALL FUNDS
------------------------------------------
ASSETS
Investments (Notes 1 and 4):
Common stock of UST Inc.-at fair value (cost: $24,747,089) $ 76,033,495
Group trust funds--at fair value:
Common stock (cost: $2,853,766) 4,605,928
Short-term investments (cost equal to fair value) 757,160
Guaranteed investment contracts 17,698,861
Balanced Fund-at fair value (cost: $723,008) 700,395
Small Company Fund-at fair value (cost: $1,098,546) $1,218,673 1,218,673
------------------------------------------
Total investments 1,218,673 101,014,512
------------------------------------------
Participant loans receivable $3,394,617 3,394,617
Contributions receivable:
Participants 41,490 459,169
Employer 284,078
Accrued income receivable 15,364 19,633
Interfund receivables (payables), net 146,098 89,700 --
------------------------------------------
Total assets 1,406,261 3,499,681 105,172,009
------------------------------------------
LIABILITIES
Due to participants 420 4,360 611,208
------------------------------------------
Net assets available for benefits $1,405,841 $3,495,321 $104,560,801
------------------------------------------
VALUATION
UNITS PER UNIT AMOUNT
---------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS
Fund A 1,517,216 $12.17 $ 18,470,780
Fund B 207,770 22.36 4,646,269
Funds C and D 2,719,030 27.88 75,792,973
Fund E 76,441 9.81 749,617
Fund F 124,094 11.33 1,405,841
Participant Loan Fund 3,495,321 1.00 3,495,321
-------------
$104,560,801
=============
See notes to financial statements.
3
7
UST Inc.
Employees' Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 1995
Information by Fund
--------------------------------------------------------------
FUNDS
FUND A FUND B C AND D FUND E
--------------------------------------------------------------
ADDITIONS TO NET ASSETS
Investment income
Dividends on common stock of UST Inc. $ 3,515,753
Interest and other dividends $ 1,118,202 $ 761 9,003 $ 96,783
--------------------------------------------------------------
1,118,202 761 3,524,756 96,783
Interest on participant loans
Net realized and unrealized appreciation
in fair value of investments:
UST Inc. common stock 14,690,229
Group trust funds 1,826,009 161,294
--------------------------------------------------------------
Investment income 1,118,202 1,826,770 18,214,985 258,077
--------------------------------------------------------------
Contributions
Participants 2,234,089 1,107,200 1,955,289 357,936
Employer 10,604 3,801,892
--------------------------------------------------------------
2,244,693 1,107,200 5,757,181 357,936
--------------------------------------------------------------
Total additions to net assets 3,362,895 2,933,970 23,972,166 616,013
--------------------------------------------------------------
DEDUCTIONS FROM NET ASSETS
Participant distributions 3,058,038 610,654 9,453,796 44,247
Administrative expenses 46,900 12,408 106,845 2,225
--------------------------------------------------------------
Total deductions from net assets 3,104,938 623,062 9,560,641 46,472
--------------------------------------------------------------
Net increase prior to interfund transfers 257,957 2,310,908 14,411,525 569,541
Interfund transfers--net (329,481) 414,248 (2,394,353) 402,827
--------------------------------------------------------------
Increase (decrease) to net assets available for benefits (71,524) 2,725,156 12,017,172 972,368
Net assets available for benefits:
Beginning of year 18,470,780 4,646,269 75,792,973 749,617
--------------------------------------------------------------
End of year $ 18,399,256 $7,371,425 $ 87,810,145 $1,721,985
==============================================================
-------------------------------------------
PARTICIPANT TOTAL
FUND F LOAN FUND ALL FUNDS
-------------------------------------------
ADDITIONS TO NET ASSETS
Investment income
Dividends on common stock of UST Inc. $ 3,515,753
Interest and other dividends $ 89,549 1,314,298
-------------------------------------------
89,549 4,830,051
Interest on participant loans $ 209,182 209,182
Net realized and unrealized appreciation
in fair value of investments:
UST Inc. common stock 14,690,229
Group trust funds 949,629 2,936,932
-------------------------------------------
Investment income 1,039,178 209,182 22,666,394
-------------------------------------------
Contributions
Participants 829,643 6,484,157
Employer 3,812,496
-------------------------------------------
829,643 10,296,653
-------------------------------------------
Total additions to net assets 1,868,821 209,182 32,963,047
-------------------------------------------
DEDUCTIONS FROM NET ASSETS
Participant distributions 208,877 57,833 13,433,445
Administrative expenses 5,443 173,821
-------------------------------------------
Total deductions from net assets 214,320 57,833 13,607,266
-------------------------------------------
Net increase prior to interfund transfers 1,654,501 151,349 19,355,781
Interfund transfers--net 1,756,597 150,162 --
-------------------------------------------
Increase (decrease) to net assets available for benefits 3,411,098 301,511 19,355,781
Net assets available for benefits:
Beginning of year 1,405,841 3,495,321 104,560,801
-------------------------------------------
End of year $4,816,939 $ 3,796,832 $123,916,582
===========================================
See notes to financial statements.
4
8
UST Inc.
Employees' Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 1994
Information by Fund
-------------------------------------------------------------
FUNDS
FUND A FUND B C AND D FUND E
-------------------------------------------------------------
ADDITIONS TO NET ASSETS
Investment income
Dividends on common stock of UST Inc. $ 3,078,344
Interest and other dividends $ 1,065,520 $ 242 7,479 $ 19,100
-------------------------------------------------------------
1,065,520 242 3,085,823 19,100
Interest on participant loans
Net realized and unrealized appreciation
(depreciation) in fair value of investments:
UST Inc. common stock 116,706
Group trust funds 63,800 (22,614)
-------------------------------------------------------------
Investment income (loss) 1,065,520 64,042 3,202,529 (3,514)
-------------------------------------------------------------
Contributions
Participants 2,433,340 865,501 2,148,457 196,301
Employer 17,426 3,640,618
-------------------------------------------------------------
2,450,766 865,501 5,789,075 196,301
-------------------------------------------------------------
Total additions to net assets 3,516,286 929,543 8,991,604 192,787
-------------------------------------------------------------
DEDUCTIONS FROM NET ASSETS
Participant distributions 2,362,076 421,364 9,092,757 18,924
Administrative expenses 46 7 242
-------------------------------------------------------------
Total deductions from net assets 2,362,122 421,371 9,092,999 18,924
-------------------------------------------------------------
Net increase (decrease) prior to interfund transfers 1,154,164 508,172 (101,395) 173,863
Interfund transfers--net 111,543 (54,520) (1,984,988) 575,754
-------------------------------------------------------------
Increase (decrease) to net asset available for benefits 1,265,707 453,652 (2,086,383) 749,617
Net assets available for benefits:
Beginning of year 17,205,073 4,192,617 77,879,356
-------------------------------------------------------------
End of year $18,470,780 $ 4,646,269 $ 75,792,973 $ 749,617
=============================================================
--------------------------------------------
PARTICIPANT TOTAL
FUND F LOAN FUND ALL FUNDS
--------------------------------------------
ADDITIONS TO NET ASSETS
Investment income
Dividends on common stock of UST Inc. $ 3,078,344
Interest and other dividends $ 28 1,092,369
--------------------------------------------
28 4,170,713
Interest on participant loans $ 183,795 183,795
Net realized and unrealized appreciation
(depreciation) in fair value of investments:
UST Inc. common stock 116,706
Group trust funds 120,358 161,544
--------------------------------------------
Investment income (loss) 120,386 183,795 4,632,758
--------------------------------------------
Contributions
Participants 352,297 5,995,896
Employer 3,658,044
--------------------------------------------
352,297 9,653,940
--------------------------------------------
Total additions to net assets 472,683 183,795 14,286,698
--------------------------------------------
DEDUCTIONS FROM NET ASSETS
Participant distributions 12,357 189,412 12,096,890
Administrative expenses 295
--------------------------------------------
Total deductions from net assets 12,357 189,412 12,097,185
--------------------------------------------
Net increase (decrease) prior to interfund transfers 460,326 (5,617) 2,189,513
Interfund transfers--net 945,515 406,696 --
--------------------------------------------
Increase (decrease) to net asset available for benefits 1,405,841 401,079 2,189,513
Net assets available for benefits:
Beginning of year 3,094,242 102,371,288
--------------------------------------------
End of year $1,405,841 $ 3,495,321 $104,560,801
============================================
See notes to financial statements.
5
9
UST Inc.
Employees' Savings Plan
Notes to Financial Statements
Years Ended December 31, 1995 and 1994
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles and, as such, include amounts based on
judgments and estimates made by management, which may differ from actual
results.
Investments are recorded at fair value. The change in the difference between the
fair value and the cost of investments is reflected as unrealized appreciation
(depreciation) in the aggregate fair value of investments. The realized
appreciation in the aggregate fair value of investments is the difference
between the proceeds received and the average cost of the investments sold.
Proceeds for Funds C and D represent the market value of UST Inc. common stock
on the valuation date of withdrawal.
Securities traded on a national securities exchange are valued at the last
reported sales price on the last business day of the year. Investments traded in
the over-the-counter market and listed securities for which no sale was reported
on that date are valued at the average of the last reported bid and ask prices.
The fair value of the participation units owned by the Plan in group trust funds
is based on quoted redemption value on the last business day of the Plan year.
In the event that the Plan is terminated, participants receive the fair value of
their accounts.
In accordance with Statement of Position 94-4, which the Plan adopted effective
January 1, 1995, the guaranteed investment contracts, which are benefit
responsive, are stated at contract value which approximates fair value.
Certain amounts included on the statement of net assets available for benefits
and in Note 4 have been reclassified to conform to the 1995 presentation.
2. DESCRIPTION OF PLAN
The Plan is an employee benefit plan established to encourage and assist
employees to adopt a regular savings program and to help provide additional
security for retirement. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974.
The Plan is a trusteed plan administered by the UST Inc. Employee Benefits
Administration Committee (EBAC). Wachovia Bank of North Carolina is the trustee
for the Plan.
Employees are eligible to participate in the Plan the first day of the month
following the date a year of service has been completed. A year of service shall
be met upon completion of at least 1,000 hours of service during a 12-month
consecutive period measured from the employee's date of hire.
6
10
UST Inc.
Employees' Savings Plan
Notes to Financial Statements (continued)
Years Ended December 31, 1995 and 1994
2. DESCRIPTION OF PLAN (CONTINUED)
The majority of employees may make an aggregate contribution to the Plan of 2%
to 12% (in 1/2% increments) of base pay, on a before-tax or after-tax basis, of
which the first 6% is subject to a 100% matching contribution by UST Inc. (the
Company). Employees of Stimson Lane Ltd. (Stimson Lane) and Conn Creek Winery
Ltd. (Conn Creek) may make an aggregate contribution to the Plan of 2% to 12%
(in 1/2% increments) of base pay, on a before-tax or after-tax basis, of which
the first 3% of such contribution is subject to a 50% matching contribution by
the Company, which was increased from 25% pursuant to a Plan amendment effective
January 1, 1995. Effective June 1, 1994, the Plan was amended to include
employees of Sparta Industries, Inc. (Sparta). Eligible employees of Sparta may
make an aggregate contribution to the Plan of 2% to 12% (in 1/2% increments) of
base pay, on a before-tax basis or after-tax basis. Sparta may make a
discretionary matching contribution, which is allocated based on the
participants' contributions to the Plan during the year.
In compliance with federal tax law, the maximum annual contribution for a
participant for the plan years presented is limited to the lesser of $30,000 or
25% of compensation and the maximum annual before-tax contribution is limited to
$9,240. The maximum amount of compensation taken into account under the Plan is
limited to $150,000 for any individual.
In accordance with the Plan, participants can direct the investment of their
contributions between Fund A (a fixed income fund, as defined), Fund B (an index
fund, as defined) and Fund C (common stock of UST Inc.). Effective, April 1,
1994, the Plan was amended to add two new investment vehicles to which
participants can also invest their contributions. They include Fund E (a
balanced fund, as defined) and Fund F (a small company fund, as defined). The
Plan allows participants who invest in more than one fund to allocate their
contributions in multiples of 5% per fund. The Plan's method of moving existing
balances among funds is the fund transfer method. This method permits Plan
participants to change their existing account balances by transferring amounts
from any one participant-directed fund to any other such fund. During 1995, unit
prices for contributions to and withdrawals from funds A, B, C, E and F ranged
from $12.24 to $12.90, from $22.96 to $30.67, from $27.25 to $33.38, from $10.04
to $12.40 and from $11.04 to $17.00, respectively.
The Plan was amended effective April 1, 1994, to permit contribution rate and
investment changes on a monthly basis, instead of the previously required three
month and six month restrictions, respectively, and to give the EBAC the
authority to determine the appropriate communications method for transmitting
participants' instructions. Subsequently, the EBAC authorized the replacement of
the current written forms with a telephone system for communicating
participants' instructions, called "TrU$Tline".
Company matching contributions are reduced by any forfeited amounts. At the
discretion of the UST Inc. Board of Directors (the Board), additional matching
contributions may be made by the Company. For the years ended December 31, 1995
and 1994, no additional discretionary contributions have been made. Company
matching contributions are invested in common stock of UST Inc. and are
deposited in Fund D. Employees age 59 1/2 or older can direct investment of
Company matching contributions in Fund A rather than Fund D. Employee
contributions are always 100% vested, while vesting of the Company's
contributions generally occurs over a period of five years at a rate of 20% for
each year of service. Months during which a participant is eligible to
participate in the Plan, but chooses not to, will not count toward vesting.
Participants become 100% vested upon death or attainment of age 55.
7
11
UST Inc.
Employees' Savings Plan
Notes to Financial Statements (continued)
Years Ended December 31, 1995 and 1994
2. DESCRIPTION OF PLAN (CONTINUED)
The Plan includes a loan feature for participants who are employed by the
Company enabling them to borrow from their vested plan balance. Participants may
not obtain a loan if they (i) already have two outstanding loans under the Plan
or (ii) have obtained a loan from the Plan within the six-month period
immediately preceding the application for a new loan. The term of the loan can
range from one to five years as elected by the participant. Loan repayments are
made in equal installments of principal and interest by automatic payroll
deductions starting two months after the effective date of the loan. The maximum
amount the participant can borrow is the lesser of 50% of their vested interest
in the Plan or $50,000 less the highest outstanding loan balance over the
previous twelve months. The minimum loan amount is $1,000. The loan interest
rate is determined on a monthly basis, equal to the average of the prime lending
rate of two banks in Greenwich, Connecticut. The interest rate is fixed for the
term of the loan. In the event a participant defaults on a Plan loan, the entire
unpaid balance of the loan shall become due and payable immediately.
Employees participating in the Plan are not subject to federal income tax on
amounts contributed to the Plan by the Company or on amounts that such employees
contribute to the Plan on a before-tax basis until such time that their
participating interest in the Plan is distributed to them. In general, a
participating employee is subject to tax on the amount by which the distribution
paid exceeds the amount contributed on an after-tax basis to the Plan.
The Plan permits payment of administrative expenses from Plan assets to the
extent permissible under applicable law. In 1995, administrative expenses were
substantially paid by the Plan. In 1994, administrative expenses were paid by
the Company. All costs and expenses with regard to the purchase or sale of
investments were paid by the Plan in both years.
The foregoing description of the Plan provides only general information.
Participants should refer to the Summary Plan Description (SPD) for a more
complete description of the Plan's provisions. Copies of the SPD are available
from the Employee Benefits Department.
3. PARTICIPANTS' INTERESTS
A participant's interest in the Plan is based on "Units of Participation", the
value of which is calculated monthly for each fund based on the aggregate fair
value of the fund's investments at each month end. The value of a unit for Funds
A, B, E and F is determined by dividing the fair value of each Fund by the total
number of its outstanding units. The unit value for Funds C and D is equal to
the fair value of one share of common stock of the Company. The Participant Loan
Fund unit value is $1.
A participant obtaining a distribution from the Plan receives the fair value of
his account. If a participant leaves the Company before becoming fully vested in
the employer's contributions to the Plan (value of Fund D), the participant will
forfeit the nonvested portion of the employer's contributions. Such forfeitures
(1995--$63,075; 1994--$61,141) remain in the Fund and are applied to reduce
employer contributions. Under the provisions of the Plan, a participant may, at
the discretion of the EBAC, be permitted to (i) contribute to the Plan certain
distributions received from another qualified employee benefit plan or (ii)
direct the trustee of such other plan to make a trust-to-trust transfer to the
Plan of the participant's account in such other plan.
8
12
UST Inc.
Employees' Savings Plan
Notes to Financial Statements (continued)
Years Ended December 31, 1995 and 1994
3. PARTICIPANTS' INTERESTS (CONTINUED)
As of December 31, 1995, 2,028 employees were participants in the Plan. The
number of employees participating in each fund at December 31 is as follows:
FUND 1995 1994
---- ---- ----
A 1,292 1,380
B 815 678
C 1,081 1,158
D 1,872 1,885
E 387 257
F 680 400
Participant Loan 644 625
The accounting records for Funds C and D are combined, and are not separately
maintained between these two funds. Separate participant records are, however,
maintained for each Fund. A summary of such participant records for 1995 and
1994 follows:
1995 1994
-----------------------------------------------------------------------------------------------------
FUND C FUND D TOTAL FUND C FUND D TOTAL
-----------------------------------------------------------------------------------------------------
Contributions:
Participants $ 1,955,289 -- $ 1,955,289 $ 2,148,457 -- $ 2,148,457
Employer -- $ 3,801,892 3,801,892 -- $ 3,640,618 3,640,618
-----------------------------------------------------------------------------------------------------
Total Contributions 1,955,289 3,801,892 5,757,181 2,148,457 3,640,618 5,789,075
Investment income 3,642,924 14,572,061 18,214,985 596,358 2,606,171 3,202,529
Administrative expenses (106,845) -- (106,845) (242) -- (242)
Participant distributions (1,934,010) (7,519,786) (9,453,796) (2,044,199) (7,048,558) (9,092,757)
Interfund transfers, net (2,330,771) (63,582) (2,394,353) (1,524,235) (460,753) (1,984,988)
-----------------------------------------------------------------------------------------------------
Net increase (decrease) 1,266,587 10,790,585 12,017,172 (823,861) (1,262,522) (2,086,383)
Net assets available for
benefits:
Beginning of year 13,688,472 62,104,501 75,792,973 14,512,333 63,367,023 77,879,356
-----------------------------------------------------------------------------------------------------
End of year $ 14,915,059 $ 72,895,086 $ 87,810,145 $ 13,688,472 $ 62,104,501 $ 75,792,973
-----------------------------------------------------------------------------------------------------
Units:
Beginning of year 491,066 2,227,964 2,719,030 522,967 2,283,496 2,806,463
-----------------------------------------------------------------------------------------------------
End of year 446,894 2,184,122 2,631,016 491,066 2,227,964 2,719,030
-----------------------------------------------------------------------------------------------------
9
13
UST Inc.
Employees' Savings Plan
Notes to Financial Statements (continued)
Years Ended December 31, 1995 and 1994
4. INVESTMENTS
The fair value, as determined by quoted market prices, of individual investments
that represent 5% or more of net assets available for benefits are as follows:
DECEMBER 31
-------------------------------------
1995 1994
---- ----
UST Inc. Common Stock; 1995 - 2,638,621 shares;
1994 - 2,727,659 shares $88,063,976 $76,033,495
State Street Bank & Trust Company; guaranteed
investment contract fund; 1995 - 16,825,180 units;
1994 - 17,698,861 units 16,825,180 17,698,861
State Street Bank & Trust Company; common stock
fund; 1995 - 75,787 shares 7,356,044 --
Fund A (the fixed income fund, as defined) includes fully benefit responsive
investment contracts with insurance companies and other financial institutions.
Benefit responsive contracts consist of contributions made under the contract
and interest at the contract rate and provide contract value payments for
participant distributions, loans and investment transfers as allowed by the
Plan. There are exceptions for payments to participants who, as a result of a
company event, cease to be employed by the Company. A company event includes a
significant early retirement program, divestiture or other company action that
could be construed as causing increased plan payments to participants.
The interest rates are set at the time of purchase and provide a stated rate of
interest on the principal and accrued interest balance over the life of the
contract. The weighted average yield for all guaranteed investment contracts was
5.9% in 1995 and 6.2% in 1994. The crediting interest rate for all guaranteed
investment contracts was 6.0% at December 31, 1995 and 6.2% at December 31,
1994.
5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) and 401(k) of the Internal Revenue Code (IRC) and, therefore, the trust
which holds the assets of the Plan is not subject to tax under Section 501(a) of
the IRC. The Plan was amended as described in Note 2 to comply with federal tax
laws. A favorable determination letter was received from the Internal Revenue
Service for the Plan as restated through June 1, 1994. The EBAC is not aware of
any course of action or series of events that have occurred that might adversely
affect the Plan's qualified status.
10
14
SUPPLEMENTAL SCHEDULES
15
UST Inc.
Employees' Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1995
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, PAR OR TOTAL ALL FUNDS
LESSOR OR SIMILAR PARTY MATURITY VALUE COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
UST Inc. 2,638,621 shares --
Common Stock $25,285,348 $88,063,976
----------------------------------
Group Trust Funds:
State Street Bank and Trust Company 75,787 shares--
Common Stock Fund 3,842,322 7,356,044
-----------------------------------
State Street Bank and Trust Company 18 shares-- Short-term
Investment Fund 18 18
State Street Yield Enhanced Short-term
Investment Fund 1,343,180 units 1,343,180 1,343,180
-----------------------------------
Total 1,343,198 1,343,198
-----------------------------------
State Street Bank and Trust Company
Guaranteed Investment Contact Fund:
Allstate Life Insurance Company 1,182,267 units, 5.35%,
due June 30, 1998 1,182,267 1,182,267
Allstate Life Insurance Company 1,363,799 units, 4.94%,
due September 30, 1997 1,363,799 1,363,799
Capital Holding Corp. 1,543,464 units, 5.98%,
due September 30, 1998 1,543,464 1,543,464
Capital Holding Corp. 1,101,835 units, 6.73%,
due December 31, 1998 1,101,835 1,101,835
Continental Assurance 1,081,101 units, 8.18%,
due December 30, 1998 1,081,101 1,081,101
Hartford Life Insurance Company 772,245 units, 4.76%,
due June 30, 1997 772,245 772,245
Hartford Life Insurance Company 372,093 units, 6.03%,
due December 31, 1997 372,093 372,093
John Hancock Life Insurance Company 1,393,486 units, 4.95%,
due December 31, 1997 1,393,486 1,393,486
John Hancock Life Insurance Company 402,423 units, 8.09%,
due July 1, 1996 402,423 402,423
Metropolitan Life Insurance Company 768,156 units, 6.45%,
due March 31, 1997 768,156 768,156
11
16
UST Inc.
Employees' Savings Plan
Schedule of Assets Held for Investment Purposes (continued)
December 31, 1995
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, PAR OR TOTAL ALL FUNDS
LESSOR OR SIMILAR PARTY MATURITY VALUE COST FAIR VALUE
- ---------------------------------------------------------------------------------------------------------------------------
Metropolitan Life Insurance Company 663,000 units, 6.11%,
due December 31, 1997 $ 663,000 $ 663,000
New York Life Insurance Company 874,748 units, 6.70%,
due December 31, 1996 874,748 874,748
New York Life Insurance Company 545,383 units, 7.75%,
due March 31, 1999 545,383 545,383
New York Life Insurance Company 1,299,118 units, 6.50%,
due September 30, 1999 1,299,118 1,299,118
Principal Mutual Life Insurance Company 1,013,409 units, 6.05%,
due June 30, 1999 1,013,409 1,013,409
Principal Mutual Life Insurance Company 545,973 units, 7.85%,
due June 30, 1999 545,973 545,973
Principal Mutual Life Insurance Company 1,178,116 units, 4.42%,
due December 31, 1997 1,178,116 1,178,116
The Life Insurance Company of Virginia 724,564 units, 5.33%,
due March 31, 1998 724,564 724,564
--------------------------------------
Total 16,825,180 16,825,180
--------------------------------------
American Balanced Fund 116,932 shares
investment fund 1,518,647 1,654,591
John Hancock Special Equities Fund 195,139 shares
investment fund 3,633,941 4,702,851
----------------------------------------
Grand total $52,448,636 $119,945,840
========================================
12
17
UST Inc.
Employees' Savings Plan
Schedule of Reportable Transactions
Year Ended December 31, 1995
Net Number
Identity of Purchase Selling Gain of
Party Involved Description of Asset Price (1) Price (1) Cost of Asset (Loss) Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
CATEGORY (III)--A SERIES OF TRANSACTIONS IN EXCESS OF 5 PERCENT OF PLAN ASSETS
State Street Bank and Short-term Investment Fund
Trust Company Shares:
17,514,065 $17,514,065 $17,514,065 - 235
17,518,451 $17,518,451 17,518,451 - 166
State Street Bank and Yield Enhanced Short-term
Trust Company Investment Fund Shares:
6,923,054 6,923,054 6,923,054 - 39
6,332,630 6,332,630 6,332,630 - 12
UST Inc. Common Stock-Shares
84,979 2,529,811 2,529,811 - 9
174,017 5,189,561 1,991,552 3,198,009 19
THERE WERE NO CATEGORY (I), (II), OR (IV) REPORTABLE TRANSACTIONS DURING 1995.
(1) Purchase and selling prices are equal to fair value at dates of acquisition
and disposition, respectively.
13
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the UST
Inc. Employee Benefits Administration Committee has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
UST INC. EMPLOYEES' SAVINGS PLAN
/s/ JOHN J. BUCCHIGNANO
--------------------------------------
John J. Bucchignano
Chairman, UST Inc. Employee Benefits
Administration Committee
Dated: May 10, 1996