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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: December 31, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to .
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COMMISSION FILE NUMBER:
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Full title of the plan and the address of the plan, if different from
that of the issuer named below:
OSCA, INC. SAVINGS PLAN
Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
OSCA, INC.
156 COMMISSION BOULEVARD
LAFAYETTE, LOUISIANA 70508
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OSCA, Inc. Savings Plan
Financial Statements and Supplemental Schedule
Period from June 15, 2000 through December 31, 2000
CONTENTS
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......................3
Notes to Financial Statements..................................................4
ERISA Schedules
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)..............10
Schedules - Schedules I, II and III for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission
have been omitted for the reason that they are not required or are not
applicable, or the required information is shown in the financial statements or
notes thereto.
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Report of Independent Auditors
The Compensation Committee
OSCA, Inc. Savings Plan
We have audited the accompanying statement of net assets available for benefits
of OSCA, Inc. Savings Plan as of December 31, 2000, and the related statement of
changes in net assets available for benefits for the period from June 15, 2000
to December 31, 2000. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2000, and the changes in its net assets available for benefits for
the period from June 15, 2000 to December 31, 2000, in conformity with
accounting principles generally accepted in the United States.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2000, is presented for purposes of
additional analysis and is not a required part of the 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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
Indianapolis, Indiana
June 25, 2001
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OSCA, Inc. Savings Plan
Statement of Net Assets Available for Benefits
December 31, 2000
ASSETS
Investments, at fair value:
Mutual funds $7,772,435
Common trust fund 128,337
Common stock 816,600
Loans to participants 206,586
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8,923,958
Cash equivalent 15,813
Receivables:
Employer's contributions 376,406
Accrued interest 9,682
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386,088
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Net assets available for benefits $9,325,859
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See accompanying notes.
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OSCA, Inc. Savings Plan
Statement of Changes in Net Assets Available for Benefits
Period from June 15, 2000 through December 31, 2000
ADDITIONS
Investment income (loss):
Net depreciation in mutual funds $ (778,878)
Net depreciation in common trust fund (15,599)
Net appreciation in common stock 187,391
Interest and dividend income 94,949
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(512,137)
Transfer from other plan 8,259,440
Contributions:
Employer 753,183
Participants 723,718
Rollover 306,601
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Total contributions 1,783,502
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Total additions 9,530,805
DEDUCTIONS
Benefits paid to participants 204,121
Administrative expenses 825
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Total deductions 204,946
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Net increase 9,325,859
Net assets available for benefits:
Beginning of period --
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End of year $ 9,325,859
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See accompanying notes.
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OSCA, Inc. Savings Plan
Notes to Financial Statements
December 31, 2000
1. DESCRIPTION OF THE PLAN
The following description of OSCA, Inc. Savings Plan (the Plan) provides only
general information. Participants should refer to the plan agreement for a more
complete description of the Plan's provisions.
GENERAL
Effective June 14, 2000, Great Lakes Chemical Corporation (Great Lakes) sold 40%
of its ownership interest in OSCA, Inc. (the Company) as part of an initial
public offering (IPO). Prior to the IPO, the employees of the Company were
eligible to participate in the Great Lakes Chemical Savings Plan (Great Lakes
Plan). After the IPO, the Company sponsored the Plan for its employees to
replace the Great Lakes Plan. Participants' account balances in the Great Lakes
Plan were transferred into the Plan. The Company employees become 100% vested in
contributions made on their behalf into the Great Lakes Plan. The transfer
totaling $8,259,440 took place on August 3, 2000.
The Plan is a defined contribution plan covering all employees of the Company.
The Plan has automatic enrollment whereby an eligible employee is automatically
enrolled at a periodic payroll deduction of 3% of their compensation. The Plan
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
CONTRIBUTIONS
Voluntary employee contributions to the Plan are made through periodic payroll
deductions at the rate of 1% to 18% in 1% increments of the participant's
eligible compensation. The Company contributes an amount equal to 75% of the
participant's contribution, limited to the first 6% of the participant's
eligible earnings. The Company may also make profit-sharing contributions. If a
profit-sharing contribution is made, the contribution is set at 2% of each
eligible participant's compensation. The Company approved a profit-sharing
contribution for the 2000 plan year totaling $376,406, which was paid on March
14, 2001. Accordingly, the amount has been accrued in the accompanying
financial statements.
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OSCA, Inc. Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS
Participants may designate that their contributions be made to any of 15 funds.
Participants, while participating in the Great Lakes Plan, were allowed to
direct contributions into the common stock of Great Lakes Chemical Corporation.
In addition, the employer match and profit-sharing contributions in the Great
Lakes Plan made on behalf of the employees were automatically invested in the
Great Lakes common stock (i.e., nonparticipant-directed). The balance in the
Great Lakes common stock at June 15, 2000 of $748,152 was transferred into the
Plan. Participants are no longer allowed to direct future contributions into
this fund. Participants were allowed to redirect all monies in their account out
of the common stock fund to other funds.
VESTING
Participants are 100% vested in employee contributions and plan investment
earnings immediately. Employer contributions vest to individual participants
after attainment of certain years of service. After two years of service, the
participant becomes 20% vested in employer contributions and vesting increases
20% for each year of service thereafter. A participant is 100% vested after six
years of service. Profit-sharing contributions vest to individual participants
at 100% after three years of service.
BENEFIT PAYMENTS
Upon retirement (at age 59 1/2 or older), death, disability, or termination of
employment, participants or their beneficiaries receive the total balance of
their accounts in the form of a lump sum. A participant may withdraw all or a
portion of his account in the event of financial hardship, as defined in the
Plan.
A participant in the Plan may request a partial withdrawal of the amounts held
in the participant account (which reflects all vested contributions to the Plan)
at any time and will be paid the current value of the account as a result of a
financial hardship. However, the withdrawal must be necessary to meet an
immediate and heavy financial need of the participant and must not exceed the
value of the participant account or the amount required to meet the need created
by the financial hardship.
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OSCA, Inc. Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
LOANS TO PARTICIPANTS
A participant may borrow against the vested balance in his account at a minimum
of $1,000 and a maximum up to 50% of the account balance, not to exceed $50,000.
A participant is allowed one loan at a time with the interest rate being one
percent above the prime lending rate on the first day of the month in which the
loan was made. Loans are repaid through payroll deductions over no more than 4
years (15 years if the loan was made for the purchase of a primary residence).
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will become 100% vested in their accounts.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the Plan are maintained on the accrual basis in
accordance with accounting principles generally accepted in the United States.
Benefits are recorded when paid.
INVESTMENT VALUATION AND INCOME RECOGNITION
Common stock, shares in registered investment companies (i.e., mutual funds),
and the common trust funds are carried at aggregate current value with the
difference between cost and current value reflected in the statement of changes
in net assets available for benefits as unrealized appreciation or depreciation
of investments. Market value of common stock is based upon the last sales price
as reported by the New York Stock Exchange on the last business day of the year.
The mutual funds and common trust fund are valued on the quoted market prices,
which represent the net asset values of shares held by the Plan at year end. The
loans to participants are valued at cost, which approximates fair value.
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OSCA, Inc. Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Dividends are recorded as income on the dividend receipt date. Purchases and
sales are recorded on a trade-date basis. Realized gains or losses on investment
securities sold are determined using the average historical cost method.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes and schedules. Actual results could differ
from those estimates.
ADMINISTRATIVE EXPENSES
The Company pays all administrative costs of the Plan except for participant
loan application fees.
FORFEITURES
Forfeitures of terminated employees' nonvested account balances are used to pay
the Plan's administrative expenses or reduce employer's contributions to the
Plan.
3. INVESTMENTS
The following table represents individual investments that represent 5% or more
of the plan assets as of December 31, 2000.
Mutual funds:
American Century Income & Growth $ 763,429
Dreyfus Emerging Leaders 587,581
Janus Investment Balanced Fund 910,897
MFS Capital Opportunities Fund 2,551,817
Wells Fargo Treasury Plus Institutional Money Market 1,516,213
Common stock:
Great Lakes Chemical Corporation 816,600
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OSCA, Inc. Savings Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has not received a determination letter from the Internal Revenue
Service stating that the Plan is qualified under Section 401(a) of the Internal
Revenue Code (the Code). However, the plan administrator believes that the Plan
is qualified and, therefore, the related trust is exempt from taxation.
5. BENEFITS PAYABLE
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 at December 31, 2000:
Net assets available for benefits per the financial
statements $ 9,325,859
Amounts allocated to withdrawn participants (240,508)
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Net assets available for benefits per the Form 5500 $ 9,085,351
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The following is a reconciliation of distribution to participants per the
financial statements to the Form 5500 for the period ended December 31, 2000:
Distributions to participants per the financial
statements $204,121
Add amounts allocated on Form 5500 to withdrawn
participants at December 31, 2000 240,508
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Net assets available for benefits per the Form 5500 $444,629
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Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to year
end but not yet paid.
6. SUBSEQUENT EVENTS
Effective May 1, 2001, the Plan began offering the Company's (OSCA, Inc.) common
stock as an investment option. In addition, the profit-sharing contribution was
determined by the Company to be nonparticipant-directed and deposited directly
into the Company stock fund.
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OSCA, Inc. Savings Plan
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
EIN: 72-0868136 PN: 001
December 31, 2000
DESCRIPTION OF
INVESTMENT, INCLUDING
MATURITY DATE, RATE
IDENTITY OF ISSUE, OF INTEREST, PAR OR CURRENT
BORROWER, LESSOR, OR SIMILAR PARTY MATURITY VALUE VALUE
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Mutual funds:
American Century Income & Growth 25,287 shares $ 763,429
American Century International Growth 551 shares 6,027
Dreyfus Emerging Leaders 14,842 shares 587,581
Dreyfus Intermediate Term Income Fund 4,773 shares 61,280
Invesco Small Company Growth 9,424 shares 144,661
Invesco Strategic Technology II 4,331 shares 258,868
Janus Enterprise 6,474 shares 344,862
Janus Investment Balanced Fund 42,886 shares 910,897
Janus Overseas 13,248 shares 351,602
MFS Capital Opportunities Fund 142,639 shares 2,551,817
MFS Massachusetts Investors Growth 5,745 shares 98,477
MFS Mid-Cap Growth 9,738 shares 133,318
*Wells Fargo Large Company Growth 685 shares 43,403
*Wells Fargo Treasury Plus Institutional Money
Market Fund 1,516,213 shares 1,516,213
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7,772,435
Common trust fund:
*Wells Fargo S&P 500 Stock Fund 2,486 shares 128,337
Common stock:
*Great Lakes Chemical Corporation 21,959 shares 816,600
*Loans to participants Maturities to 2009, at interest
rates ranging from 8.75% to
10.50% Payments are made through
payroll deductions. Loans are
collateralized by participants'
vested account balances.
206,586
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$ 8,923,958
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* - Indicates party-in-interest to the Plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the administration committee of this employee benefit plan have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date: June 29, 2001 OSCA, Inc. Savings Plan
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(Name of plan)
/s/ Bruce C. Leininger
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Vice President - Human Resources
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INDEX TO EXHIBITS
Ex. 23 - Consent of Ernst & Young LLP, Independent Auditors