U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-30270
CK Witco Corporation
(Exact name of registrant as specified in its charter)
Delaware 52-2183153
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One American Lane
Greenwich, Connecticut 06831-2559
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(203) 552-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $0.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the registrant, computed as of February 25, 2000,
was $1,118,770,776.
The number of shares of Common Stock of the registrant
outstanding as of February 25, 2000, was 114,004,574.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Stockholders for fiscal year ended
December 31, 1999 ........ Parts I, II and IV
Proxy Statement for Annual Meeting of Stockholders
on April 25, 2000 ........ Part III
INDEX
Page
PART I
Item 1. Business 1
Polymer Products 3
Specialty Products 7
Item 2. Properties 16
Legal Proceedings 19
Submission of Matters to a Vote of
Security Holders 21
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 21
Item 6. Selected Financial Data 22
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 22
Item 7A. Quantitative and Qualitative Disclosures about
Market Risk 22
Item 8. Financial Statements and Supplementary Data 22
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 22
PART III
Item 10. Directors and Executive Officers of the
Registrant 22
Item 11. Executive Compensation 25
Item 12. Security Ownership of Certain Beneficial Owners
and Management 25
Item 13. Certain Relationships and Related Transactions 25
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 25
PART I
ITEM 1. BUSINESS
(a) General Development of Business
CK Witco Corporation (together with its consolidated
subsidiaries, the "Corporation" or "Registrant") was incorporated
in Delaware in 1999 in connection with the merger of Crompton &
Knowles Corporation and Witco Corporation on September 1, 1999
(the "Merger"). The terms of the Merger provided that Crompton &
Knowles Corporation merge with and into the Corporation and
immediately thereafter, Witco Corporation merge with and into the
Corporation, so that the Corporation was the surviving
corporation. At the time of the Merger, each share of Crompton &
Knowles Corporation's common stock was automatically converted
into one share of the Corporation's common stock, and each share
of Witco Corporation's common stock was exchanged for 0.9242
shares of the Corporation's common stock. The Merger was
accounted for as a purchase and accordingly, the results of
operations of Witco Corporation have been included in the
consolidated financial statements from the date of acquisition.
Crompton & Knowles Corporation ("Crompton & Knowles") was
incorporated in Massachusetts in 1900. Crompton & Knowles had
engaged in the manufacture and sale of specialty chemicals since
1954 and, since 1961, in the manufacture and sale of polymer
processing equipment. Crompton & Knowles had substantially
expanded both its specialty chemical and its polymer processing
equipment businesses through a number of acquisitions in both the
United States and Europe, including the acquisition in 1996 of
Uniroyal Chemical Company, Inc. ("Uniroyal"), a multinational
manufacturer of performance chemicals, including rubber
chemicals and additives for plastics and lubricants, crop
protection chemicals, and polymers, which include Royalene(R)
EPDM rubber, Paracril(R) nitrile rubber and
Adiprene(R)/Vibrathane(R) urethane prepolymers.
Witco Corporation ("Witco") was incorporated in Delaware in
1958 as Witco Chemical Company, Inc., at which time it succeeded
by merger to the business of Witco Chemical Company, an Illinois
corporation formed in 1920. Witco was a global manufacturer and
marketer of specialty chemical products for use in a wide variety
of industrial and consumer applications. In 1995, Witco acquired
Osi Specialties Holding Company, an entity engaged in the
manufacture of silicone surfactants, organofunctional silanes,
specialty fluids and amine catalysts with manufacturing and
blending facilities throughout the world. Witco sold its Battery
Parts and Carbon Black operations in 1995 and in 1997 completed
the divestiture of its Lubricants Group. In 1996, Witco
announced a major restructuring plan to be implemented over a
three year period (1997-1999). Elements of the plan included
reducing fixed and variable costs, undertaking a $600 million
three-year capital spending plan for new capacity, modernizing
facilities, upgrading environmental and safety compliance and
information systems capabilities and reducing the number of its
manufacturing facilities, while consolidating related
distribution, research and development and administrative
centers. In 1998, Witco acquired Ciba Specialty Chemicals Inc.'s
("Ciba") worldwide polyvinyl chloride heat stabilizers business
and related assets and Ciba acquired Witco's global epoxy systems
and adhesives business and related assets. Prior to the Merger,
Witco's operations were divided into four business groups: the
Polymer Chemicals Group, the OrganoSilicones Group, the
Performance Chemicals Group and the Oleochemicals and Derivatives
Group. The Oleochemicals and Derivatives business was sold on
August 31, 1999, in a transaction described below.
In January 1999, Crompton & Knowles sold its specialty
ingredients business, Ingredient Technology Corporation ("ITC"),
to Chr. Hansen, Inc. for approximately $103 million. In August
1999, Witco completed the sale of its Oleochemicals and
Derivatives business to Goldschmidt AG for approximately $249
million. In December 1999, the Corporation completed the sale of
its global textile colors business and most of its non-United
States industrial colors business to Yorkshire Group PLC, a
producer of textile dyestuffs headquartered in Leeds, United
Kingdom. The consideration received from the Yorkshire
transaction was approximately $86.5 million; $78 million in cash
proceeds and a 12.4 percent equity interest in Yorkshire then
valued at approximately $8.5 million. In early 2000, the
Corporation's joint venture with GIRSA S.A. de C.V. ("GIRSA"), a
subsidiary of DESC, S.A. de C.V., a Mexican corporation,
commenced operation of a new 40,000 metric ton nitrile rubber
plant in Altamira, Mexico, to produce Paracril(R) oil-resistant
nitrile rubber products. The facility is the largest dedicated
nitrile rubber plant in the world producing a wide range of
general purpose and specialty polymers.
(b) Financial Information About Industry Segments
Information as to the sales, operating profit, depreciation
and amortization, assets and capital expenditures attributable to
each of the Corporation's business segments during each of its
last three fiscal years is set forth in the Notes to Consolidated
Financial Statements on pages 51-52 of the Corporation's 1999
Annual Report to Stockholders, and such information is
incorporated herein by reference.
The Corporation's businesses are grouped into two units,
"Polymer Products" and "Specialty Products." Polymer Products
consists of separate reporting segments for Polymer Additives
(plastic additives, rubber chemicals and urethane chemicals),
Polymers (EPDM, urethanes and nitrile joint venture) and Polymer
Processing Equipment (Davis-Standard). Specialty Products
consists of separate reporting segments for OrganoSilicones
(silanes and specialty silicones), Crop Protection (specialty
actives, industrial surfactants and Gustafson Joint Venture) and
Other (petroleum additives, refined products, colors and
glycerine/fatty acids).
(c) Narrative Description of Business
Products and Services
The Corporation manufactures and markets a wide variety of
polymer and specialty products. Most of the Corporation's
products are sold to industrial customers for use as
additives, ingredients or intermediates that impart particular
characteristics to the customers' end products. The Corporation's
products are currently marketed in more than 120 countries and
serve a wide variety of end use markets including tires,
agriculture, automobiles, textiles, plastics, lubricants,
petrochemicals, leather, construction, recreation, mining, paper,
packaging, home furnishings, personal care and appliances. The
principal products and services offered by the Corporation are
described below.
POLYMER PRODUCTS
Polymer Additives
The Polymer Additives business supplies a number of
specialty chemicals to the plastics, rubber and
coatings/adhesives industries. The Polymer Additives business
had net sales for fiscal 1999 of $620.2 million.
Plastic Additives
The Corporation is a global leader in supplying additives
and catalysts for the polymer industry. The Corporation
manufactures and markets a broad line of additives for plastics
and lubricants, including antioxidants, lubricant additives,
chemical foaming agents, synthetic fluids, chemical
intermediates, polymerization inhibitors, curatives, dispersants
and polymer modifiers. These products are used in the
manufacture of numerous plastic and petroleum related products
which in turn have diverse end uses, including plastic products,
petrochemicals, adhesives, aerospace equipment, athletic
equipment, automotive components, construction materials,
electronics, food packaging, vinyl flooring, wire and cable and
automotive and industrial oils and lubricants. These chemicals
are often specially developed for a customer's specific
manufacturing requirements. The Corporation also manufactures
stabilizers, lubricants, plasticizers, and peroxide catalysts,
and markets UV stabilizers and antistats, which products are used
in the manufacture of PVC compounds and resins for such
applications as pipes, fittings, siding and packaging materials.
In addition, the Corporation is a supplier of lubricants,
antioxidants, catalysts and polymerization initiators to the
polyolefin/polystyrene industry for use in the manufacture of
resins that are employed in a broad spectrum of applications
used in packaging, automobiles, furniture and appliances. The
Corporation also produces organotin compounds for the production
of PVC stabilizers and biocides for marine paints.
Net sales of plastic additives during fiscal 1999, 1998 and
1997 were 14.2%, 7.1% and 6.9% of the Corporation's net sales,
respectively.
Rubber Chemicals
This product line of the Polymer Additives business contains
over 100 different chemicals for use in processing rubber. These
products include accelerators, antioxidants, antiozonants,
chemical foaming agents and waxes. Accelerators are used for
curing natural and synthetic rubber, and have a wide range of
activation temperatures, curing ranges and use forms.
Antiozonants protect rubber compounds from flex cracking and
ozone, oxygen and heat degradation. Antioxidants provide rubber
compounds with protection against oxygen, light and heat.
Foaming agents produce gas by thermal decomposition or via a
chemical reaction with other components of a polymer system and
are mixed with rubber to produce sponge rubber products. Waxes
inhibit static atmospheric ozone cracking in rubber. Tire
manufacturers accounted for approximately 60% of the
Corporation's rubber chemical sales in fiscal 1999, with the
balance of such sales going to the industrial rubber market which
includes numerous manufacturers of hoses, belting, sponge and a
wide variety of other engineered rubber products. The
Corporation believes it is one of the three largest suppliers of
rubber chemicals in the world.
Net sales of rubber chemicals during fiscal 1999, 1998 and
1997 were 12.7%, 14.7% and 15.6% of the Corporation's net sales,
respectively.
Urethane Chemicals
The Urethane Chemicals business is comprised of three
product groupings that offer technologically advanced materials
to a diverse and global customer base: Fomrez(R) saturated
polyester polyols, Witcobond(R) polyurethane dispersions, and
Witcothane(R) polyurethane systems. Polyester polyols are
employed in industrial applications such as flexible foam for
seating, thermoplastic urethanes for structural parts, adhesives
and coatings. The polyurethane dispersions are sold to a larger
and more diverse customer base primarily for coating applications
such as flooring, fiberglass sizing and textiles. Polyurethane
systems are used primarily by the shoe sole industry, and is a
highly service intensive business.
Baxenden Chemicals Limited, the Corporation's 53.5% owned
subsidiary (Croda Inc. owns 46.5%), is engaged in the manufacture
and marketing of isocyanate derivatives, polyester polyols and
specialty polymer systems used in a wide range of applications.
The major markets served by Baxenden are automotive,
construction, surface coatings, leather and textile finishing.
Sub-markets include coatings, adhesives, sealants, elastomers and
insulation for the above markets. Baxenden is focused on
specialty polymer and resin chemistry and novel curing mechanisms
for such polymers. The core technology is urethane and acrylic
chemistry but includes novel polyesters and esterification
processes.
Polymer additives are sold through a specialized sales
force, including technical service professionals who address
customer inquiries and problems. The technical service
professionals generally have degrees in chemistry and/or chemical
engineering and are knowledgeable in specific product application
fields. The sales and technical service professionals identify
and focus on customers' growth opportunities, working not only
with the customers' headquarters staff, but also with their
research and development and manufacturing personnel on a
worldwide basis.
Polymers
The Polymers business, which had net sales for fiscal 1999
of $316.3 million, has three principal product lines: Royalene(R)
EPDM rubber, Adiprene(R)/Vibrathane(R) urethane prepolymers and
Paracril(R) nitrile rubber.
EPDM
Ethylene-propylene-diene rubber ("EPDM") is commonly known
as "crackless rubber" because of its ability to withstand
sunlight and ozone without cracking. EPDM's application end uses
include various automobile components, single-ply roofing, hoses,
electrical insulation, tire sidewalls, mechanical seals and
gaskets, oil additives and plastic modifiers. The Corporation
produces and markets approximately 30 different EPDM polymer
variations.
The Corporation believes it is one of the three largest
suppliers of EPDM polymers in the world, and the largest domestic
manufacturer of EPDM polymers in the United States. The
Corporation's success in this business has been due to several
factors, including product performance, low cost manufacturing,
and outstanding technical and customer service, which have earned
the Corporation a reputation for excellence and strong customer
loyalty.
Urethanes
The Corporation believes that it is the leading manufacturer
of high performance liquid castable urethane prepolymers in the
world. Among the most common applications using these prepolymers
are solid industrial tires, printing rollers, industrial rolls,
abrasion-resistant mining products such as chutes, hoppers and
slurry transport systems, mechanical goods and a variety of
sports equipment and other consumer items. The Corporation
effectively competes in this business by providing efficient
customer service and technical assistance through a highly
regarded technical service staff and a proven ability to develop
new products and technologies for its customers. Over 150 grades
of urethane prepolymers are commercially available from the
Corporation.
Adiprene(R)/Vibrathane(R) urethane prepolymers are sold
directly by a dedicated sales force in the United States, Canada
and Australia and by direct sales and through distributorships in
Europe, Latin America and the Far East.
Adiprene(R)/Vibrathane(R) customers are serviced worldwide by a
dedicated technical staff. Technical service personnel support
field sales, while a research and development staff is dedicated
to support new product and process development to meet rapidly
changing customer needs. Technical support is a critical
component of the product offering.
Nitrile Joint Venture
In early 2000, ParaTec S.A. de C.V., a joint venture
between the Corporation's subsidiary, Uniroyal, and GIRSA,
commenced operation of a 40,000 metric ton nitrile rubber plant
in Altamira, Mexico, to produce Paracril(R) oil-resistant nitrile
rubber products. It is the largest dedicated nitrile rubber
plant in the world producing a wide range of general purpose and
specialty polymers. The products are marketed in the United
States by ParaTec Elastomers L.L.C. under the Paracril(R)
trademark. The Corporation's nitrile rubber production facility
in Painesville, Ohio closed in June 1999.
Nitrile rubber polymers are resistant to most types of oils.
Paracril(R) nitrile rubber is produced in 31 different variations
to meet specific end use requirements in automotive hoses, seals,
rings, printing rolls, insulation and many other products exposed
to oil.
The sale of Royalene(R) and Paracril(R) products is
supported by a highly qualified staff of technical service
specialists with extensive field and rubber processing
experience. Strong customer relations and market knowledge
result from this sales effort. In certain geographic areas, the
Royalene(R) and Paracril(R) products are sold through
distributors.
Polymer Processing Equipment
The Corporation's wholly owned subsidiary, Davis-Standard
Corporation, manufactures and sells polymer processing
equipment, which includes extruders, electronic controls, and
integrated extrusion systems, and offers specialized service and
modernization programs for in-place polymer processing systems.
The polymer processing equipment business had net sales in the
1999 fiscal year of $300.0 million.
Integrated polymer processing systems, which include
extruders in combination with controls and other equipment, are
used to process polymers into various products such as plastic
sheet and profiles used in appliances, automobiles, home
construction, sports equipment, and furniture; extruded shapes
used as house siding, furniture trim, and substitutes for wood
molding; and cast and blown film used to package many consumer
products. Integrated extrusion systems are also used to compound
engineered polymers, to recycle and reclaim plastics, to coat
paper, cardboard and other materials used as packaging, and to
apply plastic or rubber insulation to high voltage power cable
for electrical utilities and to wire for the communications,
construction, automotive, and appliance industries. Industrial
blow molding equipment produced by the Corporation is sold to
manufacturers of non-disposable plastic items such as tool cases
and beverage coolers.
The Corporation is a leading producer of polymer processing
equipment for the polymers industry and competes with domestic
and foreign producers of such products. The expansion of its
Pawcatuck, Connecticut facility and a strong performance at its
German subsidiary, ER-WE-PA Davis-Standard GmbH, have enabled
shipments to keep pace with customers' demand for extruders. The
Corporation is one of a number of producers of other types of
polymer processing machinery.
In the United States, most of the Corporation's sales of
polymer processing equipment are made by its own dedicated sales
force. In other parts of the world, and for export sales from
the United States, the Corporation's sales of such equipment are
made largely through agents.
SPECIALTY PRODUCTS
OrganoSilicones
The OrganoSilicones business manufactures and sells over 500
silicone-based chemical intermediate products to manufacturers of
fiberglass, reinforced plastics, polyurethane foam, textiles,
coatings, automotive components, adhesives, rubber,
pharmaceuticals, thermoplastics, sealants and electrical products
throughout the world. The OrganoSilicones business had net sales
for fiscal 1999 of $158.9 million.
Regardless of form, most silicones share a combination of
properties, including electrical resistance, ability to maintain
performance across a broad range of temperatures, resistance to
aging, water repellence, lubricating characteristics and relative
chemical and physiological inertness. The versatility of
silicone-based intermediates has led to a wide variety of
applications across a broad spectrum of industries in all major
countries.
Silanes
The Corporation is the world's largest producer of
organofunctional silanes. Depending on their major
organofunctional group (amino, epoxy, methacryl, sulfur, vinyl,
etc.), silanes can act as coupling agents or cross-linkers. As a
coupling agent, they have the unique ability to bond organic
materials to inorganic materials and are used in a variety of end
use products, including fiberglass, rubber and adhesive sealants.
As cross-linkers, silanes have become the standard in the
manufacture of thermoplastics where they promote the cross-
linking of polyolefins in applications such as wire and cable.
There is a developing opportunity for silanes in the tire
industry, especially in Europe where there has been a growing
demand for sulfur-functional silanes, which are necessary when
silica is used in place of carbon black, in tire tread. Silica-
tires, or "greentyres", provide improved handling, safety and
other environmental benefits by lowering fuel consumption.
Specialty Silicones
Silicone fluids have several distinctive properties, which
include chemical and physical inertness, good low-temperature
performance, high compressibility, low-surface tension, stable
viscosity with a change in the temperature or rate of shear, and
thermal and oxidative stability. In addition to allowing these
products to bond with various materials, these properties also
offer improved antistatic, lubricity, and water-repellency
performance. With these distinctive properties, silicone fluids
serve a variety of end markets including the textile market where
silicone fluids serve as textile softeners and wetting modifiers;
the personal care market for hair care products and
antiperspirants; the pharmaceutical market where they serve as a
protective barrier in creams and lotions; the paper and pulp
industry where they act as antifoams, surfactants, or release
agents; and the automotive and furniture industries where
silicone fluids are used in polishes and coatings because of
their low-surface tension, lubricating properties, and water
repellency.
In the early 1950's the OrganoSilicones business (while part
of Union Carbide Corporation) invented the use of silicone
surfactants in the manufacture of urethane foam. This
fundamental technological advance facilitated a lower-cost,
continuous manufacturing method, resulting in accelerated growth
in the urethane foam industry. The largest end markets for
urethane additives are flexible, molded and rigid polyurethane
foams in which urethane additives are used to control cell size
and stabilize the foam.
The Corporation markets its OrganoSilicone products
worldwide primarily directly through its own sales force.
Crop Protection
The Crop Protection business manufactures and markets a wide
variety of agricultural chemicals for many major food crops,
including grains, fruits, nuts and vegetables, and many non-food
crops, such as tobacco, cotton, turf, flax and ornamental plants.
The business focuses its efforts mainly on products used on high
value cash crops, such as ornamentals, nuts, citrus and tree and
vine fruits as opposed to commodity crops such as soybeans and
corn. The Crop Protection business had net sales for fiscal 1999
of $294.8 million.
Specialty Actives
The Specialty Actives business offers four major crop
protection chemical product lines: fungicides; miticides and
insecticides; growth regulants; and herbicides. Each product
line is composed of numerous formulations for specific crops and
geographic regions.
The Corporation has a substantial presence in its targeted
segments of the agrichemicals market due to its strategy of
focusing research, product development, and sales and marketing
on highly profitable market niches which are less sensitive to
competitive pricing pressures than commodity segments of the
market. While the products of the Specialty Actives business
represent a relatively small percentage of the grower's overall
costs, these products are often critical to the success or
failure of the crops being treated. In addition, product line
extensions, attention to application effectiveness and customer
service are important factors in developing strong customer
loyalty.
In Australia, the Corporation's subsidiary, Hannaford
Seedmaster Services Pty. Ltd., provides seed treatment chemicals
and treating services to the local market.
The Crop Protection business, under the Uniroyal name,
promotes seed treatment chemicals in all regions of the world
other than North America and Australia and enjoys a substantial
position in the international seed treatment market. The
Corporation anticipates continuing growth in seed treatment,
which is environmentally attractive because it involves very
localized use of agricultural chemicals and very low use rates
compared to broad foliar or soil treatment.
The Crop Protection business markets its products in North
America through a direct sales force selling to a distribution
network consisting of more than one hundred distributors and
direct customers. In the international market, the Crop
Protection business' direct sales force services over 300
distributors, dealers and agents.
Net sales of specialty actives during fiscal 1999, 1998 and
1997 were 11.9%, 15.0% and 15.0% of the Corporation's net sales,
respectively.
Industrial Surfactants
The Corporation's Industrial Surfactants business
manufactures and sells a broad line of non-ionic and anionic
surfactants to a range of industries, primarily agriculture, oil
field, emulsion (water based) polymers, paints and coatings; and,
to a smaller extent, to personal care, soap and detergent, and
textile markets. Surfactants change the surface tension
(spreadability) of liquids. In agricultural applications,
surfactants separate pesticides into small particles, thereby
increasing their efficiency via dispersion and penetration; in
the oil field, surfactants are used as demulsifiers that aid in
the clean separation of oil from water.
Gustafson Joint Venture
The Corporation is a leading producer and marketer of seed
treatment chemicals. In November 1998, the Corporation formed
joint ventures with Bayer Corporation to serve the agricultural
seed treatment markets in North America based on Gustafson, Inc.
("Gustafson"), formerly a wholly owned subsidiary, which is a
leading producer of seed treatment formulations and equipment.
Bayer acquired a 50 percent interest in the Gustafson seed
treatment business. As a result of this transaction, the
operating results of Gustafson were deconsolidated in December
1998.
Gustafson has a leading share of the North American
commercial seed treatment formulation market and is recognized as
a technological leader in this market. Gustafson is engaged
directly and through cooperative ventures in developing and
formulating seed treatment systems, offering a broad line of
chemical formulations which contain fungicides, insecticides and
seed conditioning aids in addition to commercial seed treating
equipment. Gustafson's expertise enables it to develop and
produce formulations consisting of multiple components to obtain
optimum efficacy against seed and soil disease pathogens and
insects.
For the last several years, Gustafson has maintained a major
developmental program in the field of naturally occurring
biological control agents targeted for disease. Gustafson has
focused its efforts on naturally occurring organisms as opposed
to genetically engineered organisms. Gustafson received
regulatory approval from the United States Environmental
Protection Agency ("EPA") in 1992 for the first of a series of
new biological formulations.
Other
The Other business, which had net sales for fiscal 1999 of
$405.6 million, has four principal product lines: Petroleum
Additives, Refined Products, Colors and Glycerine/Fatty Acids.
Petroleum Additives
The Corporation is a global manufacturer and marketer of
performance additive components used in transport and industrial
lubricant applications. The component product line includes
Hybase(R) overbased calcium sulfonates and Lobase(R) neutral
calcium sulfonates used in motor oils and marine lubricants.
These sulfonates are oil soluble surfactants and their properties
include detergency to help lubricants keep car, truck and ship
engines clean with minimal wear. Also in the product line are
barium and sodium sulfonates which provide corrosion protection
and emulsification in metalworking fluids. Other key products
are the Naugalube(R) antioxidants widely used by the
Corporation's customers in engine oils, gear oils, industrial
oils and greases; Synton(R) high viscosity poly alpha olefins
(PAO) used in the production of synthetic lubricants for
automotive, aviation and industrial applications (e.g. compressor
oils and gear oils); and Trilene(R) for use as a viscosity index
improver/viscosity modifier in both industrial and automotive
gear oils, automatic transmission fluids, hydraulic fluids and
greases where cost-effective, shear-stable fluids with good low
temperature properties are required.
Refined Products
The Refined Products business is engaged in the manufacture
and marketing of a wide range of high purity hydrocarbon
products, including white oils and ink oils, petrolatums,
microcrystalline waxes, cable compounds, and refrigeration oils
and compression lubricants, serving numerous global markets
predominantly requiring food grade quality. The business'
products serve as lubricants, emollients, moisture barriers,
plasticizers and carriers and are characterized by their chemical
inertness and high quality. Refined Products are used in five
major market segments: polystyrene, polymers (including
polyolefin, thermoplastic elastomers and PVC applications),
personal care, refrigeration oils and telecommunication cables,
as well as additional minor markets.
In 1998, Petro-Canada Lubricants of Mississauga, Ontario,
Canada, became Refined Products' supplier for most grades of
paraffinic white oils used in certain applications and Refined
Products became Petro-Canada's exclusive distributor of these
white oils in North America, Latin America and Asia Pacific. The
Refined Products sales, marketing and distribution organization
services Refined Products' and Petro-Canada's paraffinic white
mineral oil customers for a variety of applications.
Colors
In December 1999, the Corporation completed the sale of its
global textile colors business and most of its non-United States
industrial colors business to Yorkshire Group PLC, a producer of
textile dyestuffs headquartered in Leeds, United Kingdom. The
business sold generated annual revenues of approximately $150
million, and included four manufacturing facilities located in
Lowell, North Carolina; Greenville, South Carolina; Tertre,
Belgium; and Oissel, France.
The Corporation will continue to own and operate its
industrial colors business in the Americas, including four
manufacturing facilities located in Pennsylvania and New Jersey.
This business produces and markets dyes used in specialty papers,
inks and coatings, leather and plastic parts and films for
customers in North and South America. In addition, the
Corporation supplies unique dyes for metal coating applications
and ink-jet printers.
Domestically, the Corporation sells dyes predominantly
through its own dedicated sales force. The Corporation's
position as a leading industrial dyes supplier in the United
States has been maintained by satisfying the market's needs with
quick customer response, efficient production, customized quality
products and strong technical service.
Glycerine/Fatty Acids
The Corporation is a producer of glycerine and fatty acids.
These products modify surfaces either as direct lubricants or
emulsifiers or as intermediates for ingredients that modify
surfaces. Natural glycerines are by-products from the production
of soaps, fatty acids, fatty acid methyl esters, and fatty
alkanolamides that use animal fats and vegetable oils as
feedstock. Pharmaceuticals and personal care products are the
largest end markets for glycerines. In medical and
pharmaceutical preparations, glycerine is used to improve
smoothness, provide lubrication, or maintain moisture in
suppositories, cough syrups, elixirs and expectorants. Glycerine
is also used as a lubricant and solvent in personal care products
including toothpastes, products for hair and skin care, soaps and
mouthwashes. Fatty acids are carboxylic acids derived from or
contained in animal fat or vegetable oil. Examples of diverse
applications of fatty acids include their use as lubricants in
plastics; their use as components of personal care products such
as soaps, creams and lotions; and their use as release agents or
components of curing systems for rubber.
The Corporation markets its petroleum additives, refined
products and gylcerine/fatty acids worldwide primarily directly
through its own sales force.
* * *
Sources of Raw Materials
Chemicals, steel, castings, parts, machine components and
other raw materials required in the manufacture of the
Corporation's products are generally available from a number of
sources, some of which are foreign. The Corporation also uses
significant amounts of petrochemical feedstocks in many of its
chemical manufacturing processes. Large increases in the cost of
these petrochemical feedstocks could adversely affect the
Corporation's operating margins. While temporary shortages of
raw materials may occur occasionally, raw materials are currently
readily available. However, their continuing availability and
price are subject to domestic and world market and political
conditions and regulations. Major requirements for key raw
materials are typically purchased pursuant to multi-year
contracts. The Corporation is not dependent on any one supplier
for a material amount of its raw material requirements;
however, the OrganoSilicones business purchases, in the
aggregate, approximately 40% of its raw materials from Dow
Corning Corporation and Union Carbide Corporation under various
long-term agreements, which expire at various times through 2010.
The Corporation holds a 50% interest in Rubicon Inc.
("Rubicon"), a manufacturing joint venture between Uniroyal and
Huntsman Corporation, located in Geismar, Louisiana, which
supplies both Huntsman and the Corporation with aniline, and the
Corporation with diphenylamine ("DPA"). The Corporation believes
that its aniline and DPA needs in the foreseeable future will be
met by production from Rubicon and the Corporation's DPA facility
located in Huddersfield, England.
Patents and Licenses
The Corporation has over 3,500 United States and foreign
patents and pending applications and has trademark protection for
approximately 700 product names. Patents, trade names,
trademarks, know-how, trade secrets, formulae, and manufacturing
techniques assist in maintaining the competitive position of
certain of the Corporation's products. Patents, formulae, and
know-how are of particular importance in the manufacture of a
number of specialty chemicals manufactured and sold by the
Corporation, and patents and know-how are also significant in the
manufacture of certain wire insulating and polymer processing
machinery product lines. The Corporation is licensed to use
certain patents and technology owned by other companies,
including some foreign companies, to manufacture products
complementary to its own products, for which it pays royalties in
amounts not considered material to the consolidated results of
the enterprise. Products to which the Corporation has such
rights include certain crop protection chemicals, dyes, and
polymer processing machinery.
While the existence of a patent is prima facie evidence of
its validity, the Corporation cannot assure that any of its
patents will not be challenged nor can it predict the outcome of
any such challenge. The Corporation believes that no single
patent, trademark, or other individual right is of such
importance, however, that expiration or termination thereof would
materially affect its business.
Seasonal Business
With the exception of the Crop Protection business which has
approximately 17% of its annual sales occurring in the fourth
calendar quarter, no material portion of any segment of the
business of the Corporation is seasonal.
Customers
The Corporation does not consider any segment of its
business dependent on a single customer or a few customers, the
loss of any one or more of whom would have a material adverse
effect on the segment. No one customer's business accounts for
more than ten percent of the Corporation's gross revenues nor
more than ten percent of its earnings before taxes.
Backlog
Because machinery production schedules range from about 60
days to 10 months, backlog is significant to the Corporation's
polymer processing equipment business. Firm backlog of
customers' orders for this business at the end of 1999 totalled
approximately $113 million compared with $118 million at the end
of 1998. It is expected that most of the 1999 backlog will be
shipped during 2000. Orders for specialty chemicals and polymers
are generally filled from inventory stocks and thus are excluded
from backlog.
Competitive Conditions
The Corporation is a major manufacturer of polymer products
and specialty products. Competition varies by product and by
geographic region, except that in rubber chemicals the market is
fairly concentrated. In that market, the Corporation and its two
principal competitors together account for approximately 46% of
total worldwide sales. In addition, the EPDM market is fairly
concentrated. The Corporation and its two principal competitors
together account for approximately 67% of sales within the United
States and approximately 51% worldwide.
Product performance, quality, customer service, and price
are all important factors in competing in the polymer product and
specialty product businesses.
Two new EPDM technologies are being developed and
commercialized by competitors. The first technology has been
commercialized and is based on a metallocene catalyst system.
This technology may expand the application areas of EPDM and is
also being developed by the Corporation. The second technology
is a gas phase process that has not been fully commercialized by
any company and cannot be fully assessed at this time.
Research and Development
The Corporation conducts research and development on a
worldwide basis at a number of facilities, including field
stations that are used for crop protection research and
development activities. Research and development expenditures
by the Corporation totalled $68.0 million for the year 1999,
$52.8 million for the year 1998, and $53.6 million for the year
1997.
Environmental Matters
Chemical companies are subject to extensive environmental
laws and regulations concerning, among other things, emissions to
the air, discharges to land, surface, subsurface strata and water
and the generation, handling, storage, transportation, treatment
and disposal of waste and other materials and are also subject to
other federal, state and local laws and regulations regarding
health and safety matters.
Environmental Regulation. The Corporation believes that its
business, operations and facilities have been and are being
operated in substantial compliance in all material respects with
applicable environmental and health and safety laws and
regulations, many of which provide for substantial fines and
criminal sanctions for violations. The ongoing operations of
chemical manufacturing plants, however, entail risks in these
areas and there can be no assurance that material costs or
liabilities will not be incurred. In addition, future
developments, such as increasingly strict requirements of
environmental and health and safety laws and regulations and
enforcement policies thereunder, could bring into question the
handling, manufacture, use, emission or disposal of substances or
pollutants at facilities owned, used or controlled by the
Corporation or the manufacture, use or disposal of certain
products or wastes by the Corporation and could involve
potentially significant expenditures. To meet changing
permitting and regulatory standards, the Corporation may be
required to make significant site or operational modifications,
potentially involving substantial expenditures and reduction or
suspension of certain operations. The Corporation incurred
$19.5 million of costs for capital projects and $39.4 million for
operating and maintenance costs related to environmental
compliance at its facilities during fiscal 1999. In fiscal 2000,
the Corporation expects to incur approximately $34.7 million of
costs for capital projects and $58.5 million for operating and
maintenance costs related to environmental compliance at its
facilities. During fiscal 1999, the Corporation spent $23.1
million to clean up previously utilized waste disposal sites and
to remediate current and past facilities. The Corporation
expects to spend approximately $42.0 million during fiscal 2000
to clean up such waste disposal sites and current and past
facilities.
Pesticide Regulation. The Corporation's Crop Protection
business is subject to regulation under various federal, state,
and foreign laws and regulations relating to the manufacture,
sales and use of pesticide products.
In August, 1996, Congress enacted significant changes to the
Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"),
governing U.S. sale and use of pesticide products, and the
Federal Food, Drug, and Cosmetic Act ("FFDCA"), which limits
pesticide residues on food with the Food Quality Protection Act
of 1996 ("FQPA"). Under FIFRA, the law will facilitate
registrations and reregistrations of pesticides for special (so
called "minor") uses and authorize collection of maintenance fees
to support pesticide reregistrations. Coordination of
regulations implementing FIFRA and FFDCA will be required. Food
safety provisions will establish a single standard of safety for
pesticide residue on raw and processed foods; provide
information through large food retail stores to consumers about
the health risks of pesticide residues and how to avoid them;
preempt state and local food safety laws if they are based on
concentrations of pesticide residues below recently established
federal residue limits (called "tolerances"); and ensure that
tolerances protect the health of infants and children.
FFDCA, as amended by FQPA, authorizes EPA to set a tolerance
for a pesticide in or on food at a level which poses "a
reasonable certainty of no harm" to consumers. The EPA is
required to review all tolerances for all pesticide products
within 10 years. It is not known when and to what extent the
Corporation's products will be reviewed and/or restricted under
this standard.
In April, 1996, the Corporation announced that it had
voluntarily canceled registered uses of its propargite miticide
on certain crops in the United States. The action was taken to
reduce dietary exposure as requested by the EPA, using the EPA's
current risk assessment model. Tests to confirm that propargite
does not pose a dietary risk are continuing under EPA approved
protocols. Propargite will be reviewed under the new FQPA
standard discussed above.
The European Commission ("EC") has established procedures
whereby all existing active ingredient pesticides will be
reviewed. This EC regulation became effective in 1993 and will
result in a review of all commercial products. The initial round
of reviews covered ninety products, four of which are the
Corporation's products. Other of the Corporation's products will
be reviewed in subsequent years and all data from the Corporation
pertaining to its products must be submitted for review by mid-
2003. The process may lead to full reregistration in member
states of the EC or may lead to some restrictions, if adverse
data is discovered.
Employees
The Corporation had approximately 8,600 employees on
December 31, 1999.
Geographic Information
The information with respect to sales and property, plant
and equipment attributable to each of the major geographic areas
served by the Corporation for each of the Corporation's last
three fiscal years, set forth in the Notes to Consolidated
Financial Statements on page 52 of the Corporation's 1999 Annual
Report to Stockholders, is incorporated herein by reference.
The Corporation considers that the risks relating to
operations of its foreign subsidiaries are comparable to those of
other U.S. companies which operate subsidiaries in developed
countries. All of the Corporation's international operations are
subject to fluctuations in the relative values of the currencies
in the various countries in which its activities are conducted.
ITEM 2. PROPERTIES
The following table sets forth information as to the
principal operating properties and other significant properties
of the Corporation and its subsidiaries. All properties are
owned in fee except where otherwise indicated:
Location Facility Products/Businesses
UNITED STATES
Alabama
Bay Minette Plant Polymer Additives
Connecticut
Bethany Research Center Crop Protection
Greenwich Corporate Offices* Corporate Headquarters
Middlebury Corporate Offices and Crop Protection,
Research Center* Polymer Additives,
Polymers and Other
Naugatuck Plant, Research Center Crop Protection and
Polymer Additives,
Pawcatuck Office, Plant, Polymer Processing
Laboratory, Machine Equipment
Shop and Tech Center
Illinois
Mapleton Plant Polymer Additives
Louisiana
Geismar Plant Crop Protection,
Polymer Additives,
Polymers and Other
Taft Plant Polymer Additives
Gretna Plant Other
Harahan Plant Crop Protection
New Jersey
Edison Office and Polymer Processing
Plant* Equipment
Newark Plant Other
Nutley Office, Laboratory Other
and Plant
Perth Amboy Plant Polymer Additives and
Other
Somerville Office, Plant and Polymer Processing
Machine Shop Equipment
New York
Tarrytown Research Center* Polymer Additives,
OrganoSilicones and
Other
North Carolina
Gastonia Plant Crop Protection,
Polymer Additives
and Polymers
Ohio
Dublin Research Center Crop Protection and
Other
Pennsylvania
Gibraltar Office, Laboratory Other
and Plant
Petrolia Plant Other
Reading Plant Other
Tennessee
Memphis Plant Polymer Additives and
Other
Texas
Fort Worth Plant Crop Protection
Houston Plant Crop Protection,
Polymer Additives and
Other
Marshall Plant Polymer Additives
West Virginia
Sistersville Plant OrganoSilicones
South
Charleston Administrative, OrganoSilicones
Research and
Sales Office*
INTERNATIONAL
Australia
South Australia
Regency Park,
S.A. Office and Crop Protection
Machine Shop*
New South Wales
Seven Hills Office and Laboratory* Polymers
Bahamas
Freeport Plant Polymer Additives,
Polymers and Other
Belgium
Antwerp Plant* OrganoSilicones
Brussels Office* Crop Protection,
Polymer Additives,
Polymers and Other
Brazil
Itatiba Plant OrganoSilicones
Rio Claro Plant Crop Protection,
Polymer Additives
and Polymers
Canada
Ontario
Elmira Plant Crop Protection,
Polymer Additives,
Polymers and Other
Guelph Research Center Crop Protection,
Polymer Additives,
Polymers and Other
Scarborough Plant* Other
West Hill Plant Other
Denmark
Soro Plant** Polymer Additives
France
Dannemarie Office and Machine Shop Polymer Processing
Equipment
Germany
Bergkamen Plant* Polymer Additives
Erkrath Office, Plant, Polymer Processing
Machine Shop Equipment
and Laboratory
Haan Office and Polymer Processing
Machine Shop Equipment
Lampertheim Plant Polymer Additives
Italy
Latina Plant Crop Protection,
Polymer Additives,
Polymers and Other
Termoli Plant OrganoSilicones
Korea
Kyungki-do Plant Polymer Additives
Mexico
Altamira Plant*** Polymers
Cuatitlan Plant Polymer Additives
Tampico Plant Polymer Additives
The Netherlands
Amsterdam Plant Crop Protection
Amsterdam Plant Other
Haarlem Plant Other
Koog aan de
Zaan Plant Other
Republic of China
(Taiwan)
Kaohsiung Plant+ Polymer Additives and
Other
Singapore Plant Crop Protection
Singapore Administrative, Crop Protection,
Research Polymer Additives,
and Sales Office* Polymers,
OrganoSilicones and
Other
Switzerland
Meyrin Administrative, Crop Protection,
Research Polymer Additives,
and Sales Office* OrganoSilicones and
Other
Thailand
Bangkok Plant Polymer Additives
United Kingdom
Accrington Plant** Polymer Additives
Droitwich Plant** Polymer Additives
Evesham Research Center Crop Protection
Huddersfield Plant# Polymer Additives and
Other
Langley Office* Crop Protection,
Polymer Additives,
Polymers and Other
Luton Office and Machine Shop Polymer Processing
Equipment
____________________________
* Facility leased by the Corporation.
** Facility owned by Baxenden Chemicals Limited, which is
53.5% owned by the Corporation.
*** Facility located on property owned by a subsidiary of
GIRSA, the joint venture partner. Uniroyal holds a 49%
interest in ParaTec S.A. de C.V. which owns certain of the
facility's equipment and buildings used for the production
of nitrile rubber.
+ Facility owned by Uniroyal Chemical Taiwan Ltd., which is
80% owned by Uniroyal.
# Land leased by and facility owned by Uniroyal.
All facilities are considered to be in good operating condition,
well maintained, and suitable for the Corporation's requirements.
ITEM 3. LEGAL PROCEEDINGS
The Corporation is involved in claims, litigation,
administrative proceedings and investigations of various types in
a number of jurisdictions. A number of such matters involve
claims for a material amount of damages and relate to or allege
environmental liabilities, including clean-up costs associated
with hazardous waste disposal sites, natural resource damages,
property damage and personal injury.
Environmental Liabilities. Each quarter, the Corporation
evaluates and reviews estimates for future remediation and other
costs to determine appropriate environmental reserve amounts.
For each site, a determination is made of the specific measures
that are believed to be required to remediate the site, the
estimated total cost to carry out the remediation plan, the
portion of the total remediation costs to be borne by the
Corporation and the anticipated time frame over which payments
toward the remediation plan will occur. The total amount accrued
for such environmental liabilities at December 31, 1999, was $198
million. The Corporation estimates the potential liabilities to
range from $181 million to $222 million at December 31, 1999. It
is reasonably possible that the Corporation's estimates for
environmental remediation liabilities may change in the future
should additional sites be identified, further remediation
measures be required or undertaken, the interpretation of current
laws and regulations be modified or additional environmental laws
and regulations be enacted.
The Corporation and some of its subsidiaries have been
identified by federal, state or local governmental agencies, and
by other potentially responsible parties (a "PRP") under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, or comparable state statutes, as a PRP
with respect to costs associated with waste disposal sites at
various locations in the United States. Because these
regulations have been construed to authorize joint and several
liability, the EPA could seek to recover all costs involving a
waste disposal site from any one of the PRP's for such site,
including the Corporation, despite the involvement of other PRPs.
In many cases, the Corporation is one of several hundred PRPs so
identified. In a few instances, the Corporation is one of only a
handful of PRPs. In certain instances, a number of other
financially responsible PRPs are also involved, and the
Corporation expects that any ultimate liability resulting from
such matters will be apportioned between the Corporation and such
other parties. In addition, the Corporation is involved with
environmental remediation and compliance activities at some of
its current and former sites in the United States and abroad.
The more significant of these matters are described below.
. Beacon Heights and Laurel Park - Uniroyal is a member of
the Beacon Heights Coalition, a group of entities engaged in
remedial work at the Beacon Heights site in the State of
Connecticut pursuant to a Consent Decree entered in 1987. The
actions required by this Consent Decree have been essentially
completed. There is a continuing requirement for operation and
maintenance at the site.
Over many years, Uniroyal has entered into and performed
activities pursuant to a series of Administrative Orders with
respect to the Laurel Park site located in the State of
Connecticut. The EPA, the State of Connecticut, and the Laurel
Park Coalition (consisting of Uniroyal and a number of other
parties) have entered into a Consent Decree governing the design
and implementation of the selected remedy. Remedial construction
began at the Laurel Park site in July 1996, and was completed in
1998. Operation and maintenance activities at the site are
ongoing.
Consolidated litigation brought by the Beacon Heights and
Laurel Park Coalitions seeking contribution to the costs from the
owner/operators of the site and later from other identified
generator parties has resulted in substantial recoveries from a
number of parties. Hearings on the remaining claims have been
completed before a Special Master appointed by the Court. The
Special Master has issued a Report and Recommendations to the
Court denying recovery to the Coalitions. On September 22, 1999,
the United States District Court for the District of Connecticut
set aside the Report and Recommendations of the Special Master
and issued an order allowing recovery against various
municipalities by the Beacon Heights Coalition in the amount of
approximately $3,955,000 and the Laurel Park Coalition in the
amount of approximately $1,000,000. Motions to Alter and Amend
and for Reconsideration and Rehearing on the ruling have been
filed by various parties to the litigation.
. Polybutylene Resin Manufacturing Business - The Corporation
is a defendant in two similar actions arising out of the
Corporation's involvement in the polybutylene resin manufacturing
business in the 1970's. The following cases are currently
pending in California state courts: Alameda County Water District
v. Mobil Oil Corporation, et al, filed in April 1996 and Marin
Municipal Water District v. Shell Oil Company, et al., filed in
May 1996, both pending in Superior Court for the County of San
Mateo. The actions generally allege that the Corporation and
several other defendants negligently misrepresented the
performance of polybutylene pipe and fittings installed in water
distribution systems. Other allegations include breach of the
California Unfair Practices Act, breach of warranty, fraud and
strict liability. It is possible that the Corporation may be
named as a defendant in future actions arising out of its past
involvement in the polybutylene manufacturing business.
. Vertac - Uniroyal and its Canadian subsidiary, Uniroyal
Chemical Co./Cie. (formerly known as Uniroyal Chemical Ltd./Ltee)
were joined with others as defendants in consolidated civil
actions brought in the United States District Court, Eastern
District of Arkansas, Western Division by the United States of
America, the State of Arkansas and Hercules Incorporated
("Hercules") relating to a Vertac Chemical Corporation site in
Jacksonville, Arkansas. Uniroyal has been dismissed from the
litigation. On May 21, 1997, the Court entered an order finding
that Uniroyal Chemical Co./Cie. is jointly and severally liable
to the United States, and finding that Hercules and Uniroyal
Chemical Co./Cie. are liable to each other in contribution. On
October 23, 1998, the Court entered an order granting the United
States' motion for summary judgment against Uniroyal Chemical
Co,/Cie. and Hercules as to the amount of its claimed removal and
remediation costs of $102.9 million at the Vertac site. Trial on
the allocation of these costs as between Uniroyal Chemical
Co./Cie. and Hercules was concluded on November 6, 1998, and on
February 3, 2000, the Court entered an Order finding Uniroyal
Chemical Co./Cie liable to the United States for approximately
$2,300,000 and liable to Hercules in contribution for
approximately $700,000. Uniroyal Chemical Co./Cie and Hercules
have each appealed to the United States Court of Appeals for the
Eighth Circuit.
The Corporation intends to assert all meritorious legal
defenses and all other equitable factors which are available to
it with respect to the above matters. The Corporation believes
that the resolution of these matters will not have a material
adverse effect on its consolidated financial position. While the
Corporation believes it is unlikely, the resolution of these
matters could have a material adverse effect on its consolidated
results of operations in any given year if a significant number
of these matters are resolved unfavorably.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders
during the fourth quarter of the fiscal year covered by this
report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information concerning the range of market prices for
the Corporation's Common Stock on the New York Stock Exchange and
the amount of dividends per share paid thereon during the past
two years, set forth in the Notes to Consolidated Financial
Statements on page 52 of the Corporation's 1999 Annual Report to
Stockholders, is incorporated herein by reference.
The number of registered holders of Common Stock of the
Corporation on December 31, 1999, was 6,815.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data for the Corporation for each of
its last five fiscal years, set forth under the heading "Five
Year Selected Financial Data" on page 54 of the Corporation's
1999 Annual Report to Stockholders, is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of the Corporation's
financial condition and results of operations, set forth under
the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 26 through 33 of
the Corporation's 1999 Annual Report to Stockholders, is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Market risk and risk management policy is summarized under
the heading "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" on pages 27 through 29 of
the Corporation's 1999 Annual Report to Stockholders and is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Corporation, notes thereto,
and supplementary data, appearing on pages 34 through 54 of the
Corporation's 1999 Annual Report to Stockholders, are
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information called for by this item concerning directors of
the Corporation is included in the definitive proxy statement for
the Corporation's Annual Meeting of Stockholders to be held on
April 25, 2000, which is to be filed with the Commission pursuant
to Regulation 14A of the Securities Exchange Act of 1934, and
such information is incorporated herein by reference.
The executive officers of the Corporation are as follows:
Vincent A. Calarco, age 57, has served as Chairman, President and
Chief Executive Officer of the Registrant since 1999. Mr.
Calarco served as President and Chief Executive Officer of
Crompton & Knowles from1985 to 1999, and Chairman of the Board
from 1986 to 1999. Mr. Calarco has been a member of the Board of
Directors of the Registrant since 1999 and was a member of the
Board of Directors of Crompton & Knowles from 1985 to 1999.
Robert W. Ackley, age 58, has served as Executive Vice President,
Polymer Processing Equipment of the Registrant since 1999. Mr.
Ackley served as Vice President, Polymer Processing Equipment, of
Crompton & Knowles from 1998 to 1999 and as President of Davis-
Standard Corporation (prior to 1995, Davis-Standard Division)
since 1983.
Peter Barna, age 56, has served as Senior Vice President and
Chief Financial Officer of the Registrant since 1999. Mr. Barna
served as Senior Vice President and Chief Financial Officer of
Crompton & Knowles in 1999 and as Vice President-Finance of
Crompton & Knowles from 1996 to 1999. Mr. Barna was the
Principal Accounting Officer of Crompton & Knowles from 1986 to
1999 and its Treasurer from 1980 to 1996.
James J. Conway, age 56, has served as Executive Vice President,
Performance Chemicals and Elastomers, of the Registrant since
1999. Mr. Conway served as Vice President, Colors, of Crompton &
Knowles from 1998 to 1999 and President of Crompton & Knowles
Colors Incorporated since 1997. Mr. Conway was Senior Vice
President and General Manager of International Specialty
Products, Inc. from 1992 to 1997.
Brian J. Dick, age 43, has served as Vice President, Finance of
the Registrant since 1999. Mr. Dick served as Vice President,
Finance and Controller of Witco in 1999 and as Vice President and
Controller from 1997 to 1999. Mr. Dick served as Assistant
Controller from 1995 to 1997.
Joseph B. Eisenberg, Ph.D., age 57, has served as Executive Vice
President, Polymer Additives, of the Registrant since 1999. Mr.
Eisenberg served as Vice President, Rubber Chemicals, EPDM and
Nitrile Rubber, of Crompton & Knowles from 1998 to 1999 and as
Executive Vice President, Chemicals & Polymers, of Uniroyal since
1994.
John T. Ferguson II, age 53, has served as Senior Vice President,
General Counsel and Secretary of the Registrant since 1999. Mr.
Ferguson served as Vice President of Crompton & Knowles from 1996
to 1999, and General Counsel and Secretary of Crompton & Knowles
from 1989 to 1999. Mr. Ferguson served as a member of the Board
of Directors of the Registrant in 1999.
Gerald H. Fickenscher, age 56, has served as Regional Vice
President, Europe, Africa & Middle East of the Registrant since
1999. Mr. Fickenscher served as President, Dyes & Chemicals
International Operations, of Crompton & Knowles from 1994 to
1999.
Mary L. Gum, PhD., age 52, has served as Executive Vice
President, OSi, of the Registrant since 1999. Ms. Gum served as
Vice President of Silanes, OSi, from 1997 to 1999 and as Vice
President of Specialty Fluids, OSi, from 1995 to 1997.
Marvin H. Happel, age 60, has served as Senior Vice President,
Organization & Administration of the Registrant since 1999. Mr.
Happel served as Vice President-Organization and Administration
of Crompton & Knowles from 1996 to 1999 and Vice President-
Organization from 1986 to 1996.
Alfred F. Ingulli, age 58, has served as Executive Vice
President, Crop Protection, of the Registrant from 1999. Mr.
Ingulli served as Vice President, Crop Protection, of Crompton &
Knowles from 1998 to 1999 and as Executive Vice President, Crop
Protection of Uniroyal since 1994.
John R. Jepsen, age 44, has served as Vice President and
Treasurer of the Registrant since 1999. Mr. Jepsen served as
Treasurer of Crompton & Knowles from 1998 to 1999. Mr. Jepsen
served with the International Paper Company as Assistant
Treasurer, International from 1996 to 1998 and, prior to that, as
Director of Corporate Finance from 1986 to 1996.
Charles J. Marsden, age 59, has served as Senior Vice President,
Strategy & Development of the Registrant since 1999. Mr. Marsden
served as Senior Vice President, Strategy & Development of
Crompton & Knowles in 1999; Senior Vice President and Chief
Financial Officer from 1996 to 1999; and Vice President-Finance
and Chief Financial Officer from 1985 to 1996. Mr. Marsden
served as a member of the Board of Directors of the Registrant in
1999 and as a Director of Crompton & Knowles from 1985 to 1999.
Walter K. Ruck, age 57, has served as Senior Vice President,
Operations, of the Registrant since 1999. Mr. Ruck has served as
Vice President, Operations, of Uniroyal since 1998; and served as
Vice President, Manufacturing, of Uniroyal from 1997 to 1998. He
served as Regional Vice President, Americas of Uniroyal from 1995
to 1997 and Regional Vice President of Uniroyal from 1994 to
1995.
William A. Stephenson, age 52, has served as Executive Vice
President, Urethanes and Petroleum Additives, of the Registrant
since 1999. Mr. Stephenson served as Vice President, Specialty
Additives and Urethanes, of Crompton & Knowles from 1998 to 1999
and has served as Executive Vice President, Specialties of
Uniroyal since 1994.
Michael F. Vagnini, age 43, has served as Corporate Controller of
the Registrant since 1999 and as Corporate Controller of Crompton
& Knowles from 1998 to 1999. Mr. Vagnini has served as Corporate
Controller of Uniroyal since 1995.
The term of office of each of the above-named executive
officers is until the first meeting of the Board of Directors
following the next annual meeting of stockholders and until the
election and qualification of his or her successor.
There is no family relationship between any of such
officers, and there is no arrangement or understanding between
any of them and any other person pursuant to which any such
officer was selected as an officer.
ITEM 11. EXECUTIVE COMPENSATION
Information called for by this item is included in the
definitive proxy statement for the Corporation's Annual Meeting
of Stockholders to be held on April 25, 2000, which is to be
filed with the Commission pursuant to Regulation 14A, and such
information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information called for by this item is included in the
definitive proxy statement for the Corporation's Annual Meeting
of Stockholders to be held on April 25, 2000, which is to be
filed with the Commission pursuant to Regulation 14A, and such
information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information called for by this item is included in the
definitive proxy statement for the Corporation's Annual Meeting
of Stockholders to be held on April 25, 2000, which is to be
filed with the Commission pursuant to Regulation 14A, and such
information is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial statements and Independent Auditors' Report,
as required by Item 8 of this form, which appear on
pages 34 through 53 of the Corporation's 1999 Annual
Report to Stockholders and are incorporated herein by
reference:
(i) Consolidated Statements of Operations for the
fiscal years ended 1999, 1998, and 1997;
(ii) Consolidated Balance Sheets for the fiscal
years ended 1999 and 1998;
(iii) Consolidated Statements of Cash Flows for the
fiscal years ended 1999, 1998, and 1997;
(iv) Consolidated Statements of Stockholders' Equity
[Deficit] for the fiscal years ended 1999, 1998
and 1997;
(v) Notes to Consolidated Financial Statements; and
(vi) Independent Auditors' Report of KPMG LLP.
2. Independent Auditors' Report and Consent, and Financial
Statement Schedule II, Valuation and Qualifying
Accounts, required by Regulation S-X. Pages S-1 and S-2
hereof.
3. The following exhibits are either filed herewith or
incorporated herein by reference to the respective
reports and registration statements identified in the
parenthetical clause following the description of the
exhibit:
Exhibit No. Description
2.0 Agreement and Plan of Reorganization dated as of May 31,
1999, by and among Crompton & Knowles Corporation, Park
Merger Co. and Witco Corporation (incorporated by
reference to Appendix A to the Joint Proxy Statement-
Prospectus dated July 28, 1999, as part of the
Registrant's Registration Statement on Form S-4,
Registration No. 333-83901, dated July 28, 1999 ("Joint
Proxy Statement-Prospectus S-4 Registration Statement")).
2.1 Amendment No. 1 to Agreement and Plan of Reorganization
dated as of July 27, 1999, by and among Crompton &
Knowles Corporation, CK Witco Corporation (formerly known
as Park Merger Co.) and Witco Corporation (incorporated
by reference to Appendix A-1 to the Joint Proxy
Statement-Prospectus S-4 Registration Statement).
2.2 Agreement and Plan of Merger dated April 30, 1996, by and
among Crompton & Knowles, Tiger Merger Corp. and Uniroyal
Chemical Corporation ("UCC") (incorporated by reference
to Exhibit 2 to the Crompton & Knowles Form 10-Q for the
period ended March 31, 1996).
2.3 Acquisition Agreement dated November 29, 1999, by and
among Yorkshire Group PLC, Yorkshire Americas, Inc., as
Purchasers and CK Witco Corporation, Crompton & Knowles
Europe S.P.R.L., Uniroyal Chemical European Holdings B.V.
and Crompton & Knowles Colors Incorporated, as Sellers
(filed herewith*).
2.4 Limited Liability Company Agreement by and between
Gustafson, Inc. and Trace Chemicals, Inc., effective as
of September 23, 1998, (incorporated by reference to
Exhibit 2.1 to the Crompton & Knowles Form 8-K/A dated
January 21, 1999 ("Form 8-K/A")).
2.5 First Amendment to Limited Liability Company Agreement by
and among GT Seed Treatment Inc. (f/k/a Gustafson, Inc.),
Ecart Inc. (f/k/a Trace Chemicals, Inc.) and
BayerCorporation, dated as of November 20, 1998,
(incorporated by reference to Exhibit 2.2 to Form 8-K/A).
2.6 Purchase Agreement by and among the Crompton & Knowles,
Uniroyal, Trace Chemicals, Inc. and Gustafson, Inc. as
Sellers, and Bayer Corporation, as Purchaser, and
Gustafson LLC, as the Company, dated as of November 20,
1998, (incorporated by reference to Exhibit 2.3 to Form
8-K/A).
2.7 Purchase Agreement by and between Uniroyal Chemical
Co./Cie and Bayer Inc., effective as of November 20,
1998, (incorporated by reference to Exhibit 2.4 to Form
8-K/A).
2.8 Partnership Agreement of Gustafson Partnership by and
between Uniroyal Chemical Co./Cie and Bayer Inc.,
effective as of November 20, 1998, (incorporated by
reference to Exhibit 2.5 to Form 8-K/A).
2.9 Joint Venture Agreement and Shareholders Agreement dated
September 18, 1998, by and between Uniroyal and GIRSA
S.A. de C.V. (incorporated by reference to Exhibit 2.6
to the Crompton & Knowles Form 10-K for the fiscal year
ended December 26, 1998 ("1998 Form 10-K")).
2.10 Stock Purchase Agreement dated as of December 8, 1998, by
and among Crompton & Knowles and Ingredient Technology
Corporation, as Sellers, and Chr. Hansen Inc., as
Purchaser (incorporated by reference to Exhibit 2.7 to
the 1998 Form 10-K).
3(i) Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Appendix H to the Joint
Proxy Statement-Prospectus S-4 Registration Statement).
3(ii) By-laws of the Registrant (incorporated by reference to
Exhibit 3.02 to the Joint Proxy Statement-Prospectus S-4
Registration Statement).
4.1 Rights Agreement dated as of September 2, 1999, by and
between the Registrant and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (incorporated by
reference to Form 8-A dated September 28, 1999).
4.2 Form of Indenture, dated as of February 8, 1993, among
Uniroyal and State Street Bank and Trust Company, as
Trustee, relating to the 10 1/2% Notes, including form of
securities (incorporated by reference to Exhibit 4.1 to
the Registration Statement on UCC Form S-1, Registration
No. 33-45296 and 33-45295 ("UCC Form S-1, Registration
No. 33-45296/45295")).
4.3 Form of First Supplemental Indenture, dated as of
December 9, 1998, among UCC, as Issuer, Uniroyal, as
successor to the Issuer, and State Street Bank and Trust
Company, as Trustee, relating to the 10 1/2% Senior Notes
due 2002 (incorporated by reference to Exhibit 4.4 to
Form 10-K for the fiscal year ended December 26, 1998).
4.4 Form of Indenture, dated as of September 1, 1993, among
Uniroyal and State Street Bank and Trust Company, as
Trustee, relating to $270 million of 9% Notes, including
the form of securities (incorporated by reference to
Exhibit 4.2 to UCC Form S-1, Registration No. 33-66740).
4.5 Form of $600 Million 364-Day Credit Agreement dated as of
October 28, 1999, by and among the Registrant, certain
subsidiaries of the Registrant, various banks, The Chase
Manhattan Bank, as Syndication Agent, Citibank, N.A., as
Administrative Agent and Bank of America, N.A. and
Deutsche Bank Securities Inc., as Co-Documentation Agents
(incorporated by reference to Exhibit 4.1 to the 10-Q for
the quarter ended September 30, 1999 ("September 30, 1999
10-Q")).
4.6 Form of $400 Million Five-Year Credit Agreement dated as
of October 28, 1999, by and among the Registrant, certain
subsidiaries of the Registrant, various banks, The Chase
Manhattan Bank, as Syndication Agent, Citibank, N.A., as
Administrative Agent and Bank of America, N.A. and
Deutsche Bank Securities Inc., as Co-Documentation Agents
(incorporated by reference to Exhibit 4.2 to the
September 30, 1999 10-Q).
4.7 Form of $600 Million Third Amended and Restated Credit
Agreement dated as of March 31, 1998, by and among
Crompton & Knowles and certain of its subsidiaries, as
Borrowers, and various lenders, Citicorp USA, Inc., as
Agent and The Chase Manhattan Bank, Corestates Bank, N.A.
and First Union National Bank, as Managing Agents
(incorporated by reference to Exhibit 4 to the Crompton &
Knowles Form 10-Q for the quarter ended June 27, 1998).
4.8 Form of $50 Million Credit Agreement dated as of December
23, 1999, by and among the Registrant, various banks and
Merrill Lynch Capital Corporation, as Administrative
Agent (filed herewith*).
4.9 Offering Memorandum, dated March 2, 2000, relating to $25
Million Floating Rate Notes due 2001(filed herewith*).
4.10 Form of Indenture, dated as of March 1, 2000, by and
between the Registrant and Citibank, N.A., relating to
$25 Million Floating Rate Notes due 2001, including as
Annex A thereto, Form of Floating Rate Note Pledge
Agreement by and among the Registrant, certain foreign
subsidiaries of the Registrant, and Citibank, N.A., as
Collateral Agent (filed herewith*).
4.11 Form of Purchase Agreement, dated as of March 2, 2000, by
and between the Registrant, as Seller, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), as
Purchaser, relating to $25 Million Floating Rate Notes
due 2001 (filed herewith*).
4.12 Offering Memorandum, dated March 2, 2000, relating to
$600 Million of 8 1/2% Senior Notes due 2005 (filed
herewith*).
4.13 Form of Indenture, dated as of March 1, 2000, by and
between the Registrant and Citibank, N.A., relating to
$600 Million of 8 1/2% Senior Notes due 2005, including
as Annex A thereto, Form of Senior Note Pledge Agreement
by and among the Registrant, certain foreign subsidiaries
of the Registrant, and Citibank, N.A., as Collateral
Agent (filed herewith*).
4.14 Form of Purchase Agreement, dated as of March 2, 2000, by
and among the Registrant, as Seller, and Merrill Lynch,
ABN AMRO Incorporated, Banc of America Securities LLC,
Chase Securities Inc., Deutsche Bank Securities Inc.,
Goldman, Sachs & Co. and Salomon Smith Barney Inc.
(together, the "Initial Purchasers"), relating $600
Million of 8 1/2% Senior Notes due 2005 (filed
herewith*).
4.15 Form of Indenture, dated as of February 1, 1993, by and
between Witco and the Chase Manhattan Bank, N.A., as
Trustee, relating to Witco's 6.60% Notes due 2003, 7.75%
Debentures due 2023, 6 1/8% Notes due 2006 and 6 7/8%
Debentures due 2026, including form of securities
(incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement on Form S-3,
Registration No. 33-58066, filed March 19, 1993).
4.16 Form of First Supplemental Indenture, dated February 1,
1996, by and among Witco, Chase Manhattan Bank, N.A., the
Initial Trustee, and Fleet National Bank of Connecticut,
the Note Trustee, relating to Witco's 6 1/8% Notes due
2006 and 6 7/8% Notes due 2026 (incorporated by reference
to Registration Statement on Form S-3, Registration
Number 33-65203, filed January 25, 1996).
4.17 Form of Registration Rights Agreement, dated as of March
7, 2000, by and among the Registrant and the Initial
Purchasers, relating to $600 Million of 8 1/2% Senior
Notes due 2005 (filed herewith*).
4.18 Form of Second Supplemental Indenture, dated as of
December 6, 1999, among UCC, as Issuer, Uniroyal, as
successor to the Issuer, and State Street Bank & Trust
Company, as Trustee, relating to the 10 1/2% Senior Notes
due 2002 (filed herewith*).
4.19 Form of First Supplemental Indenture, dated as of
December 6, 1999, by and between Uniroyal, as Issuer, and
State Street Bank & Trust Company, as Trustee, relating
to the 9% Senior Notes due 2000 (filed herewith*).
10.1 + Summary of the Management Incentive Bonus Plan for
selected key management personnel (incorporated by
reference to Exhibit 10(m) to the Crompton & Knowles Form
10-K for the fiscal year ended December 27, 1980).
10.2+ Supplemental Medical Reimbursement Plan (incorporated by
reference to Exhibit 10(n) to the Crompton & Knowles Form
10-K for the fiscal year ended December 27, 1980).
10.3+ Supplemental Dental Reimbursement Plan (incorporated by
reference to Exhibit 10(o) to the Crompton & Knowles Form
10-K for the fiscal year ended December 27, 1980).
10.4+ Employment Agreement dated February 22, 1988, between
Crompton & Knowles and Vincent A. Calarco (incorporated
by reference to Exhibit 10(j) to the Crompton & Knowles
Form 10-K for the fiscal year ended December 26, 1987).
10.5+ Form of Employment Agreement entered into in 1988, 1989,
1992, 1994, 1996 and 1998 between Crompton & Knowles or
one of its subsidiaries and ten of the executive officers
of Crompton & Knowles (incorporated by reference to
Exhibit 10(k) to the Crompton & Knowles Form 10-K for the
fiscal year ended December 26, 1987).
10.6+ Form of Employment Agreement dated as of August 21, 1996,
between a subsidiary of the Registrant and three
executive officers of the Registrant (incorporated by
reference to Exhibit 10.28 to the UCC/Uniroyal Form 10-K
for the fiscal year ended September 28, 1996).
10.7+ Amended Supplemental Retirement Agreement dated October
18, 1995, between Crompton & Knowles and Vincent A.
Calarco (incorporated by reference to Exhibit 10(i) to
the Crompton & Knowles Form 10-K for the fiscal year
ended December 30, 1995).
10.8+ Form of Amended Supplemental Retirement Agreement dated
October 18, 1995, between Crompton & Knowles and three of
its executive officers (incorporated by reference to
Exhibit 10(j) to the Crompton & Knowles Form 10-K for the
fiscal year ended December 30, 1995).
10.9+ Form of Supplemental Retirement Agreement dated October
18, 1995, between Crompton & Knowles and five of its
executive officers (incorporated by reference to Exhibit
10(k) to the Crompton & Knowles Form 10-K for the fiscal
year ended December 30, 1995).
10.10+ Form of Supplemental Retirement Agreement dated as of
August 21, 1996, between a subsidiary of the Registrant
and two executive officers of the Registrant
(incorporated by reference to Exhibit 10.29 to the
UCC/Uniroyal Form 10-K for the fiscal year ended
September 28, 1996).
10.11+ Form of Supplemental Retirement Agreement dated as of
August 21, 1996, between a subsidiary of the Registrant
and two executive officers of the Registrant
(incorporated by reference to Exhibit 10.30 to the
UCC/Uniroyal Form 10-K for the fiscal year ended
September 28, 1996).
10.12+ Supplemental Retirement Agreement Trust Agreement dated
October 20, 1993, between Crompton & Knowles and Shawmut
Bank, N.A. (incorporated by reference to Exhibit 10(l)
to the Crompton & Knowles Form 10-K for the fiscal year
ended December 25, 1993).
10.13+ Amended Benefit Equalization Plan dated October 20, 1993
(incorporated by reference to Exhibit 10(m) to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 25, 1993).
10.14+ Amended Benefit Equalization Plan Trust Agreement dated
October 20, 1993, between Crompton & Knowles and Shawmut
Bank, N.A. (incorporated by reference to Exhibit 10(n)
to the Crompton & Knowles Form 10-K for the fiscal year
ended December 25, 1993).
10.15+ Amended 1988 Long Term Incentive Plan (incorporated by
reference to Exhibit 10(o) to the Crompton & Knowles Form
10-K for the fiscal year ended December 25, 1993).
10.151+ Amendment No. 4 to 1988 Long Term Incentive Plan
(incorporated by reference to Exhibit 10.171 to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 28, 1996).
10.16 Trust Agreement dated as of May 15, 1989, between
Crompton & Knowles and Shawmut Worcester County Bank,
N.A. and First Amendment thereto dated as of February 8,
1990 (incorporated by reference to Exhibit 10(w) to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 30, 1989).
10.17+ Form of 1992 - 1994 Long Term Performance Award Agreement
(incorporated by reference to Exhibit 10(y) to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 28, 1991).
10.18+ Restricted Stock Plan for Directors of Crompton & Knowles
approved by the stockholders on April 9, 1991
(incorporated by reference to Exhibit 10(z) to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 28, 1991).
10.19+ Amended 1993 Stock Option Plan for Non-Employee Directors
(incorporated by reference to Exhibit 10.21 to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 26, 1998).
10.20+ UCC Purchase Right Plan, as amended and restated as of
March 16, 1995 (incorporated by reference to Exhibit
10.1 to the UCC Form 10-Q for the period ended April 2,
1995 ("UCC April 1995 Form 10-Q")).
10.21+ UCC 1993 Stock Option Plan (incorporated by reference to
Exhibit 28.1 to UCC's Registration Statement No. 33-62030
on Form S-8, filed on May 4, 1993).
10.22+ Form of Amendment No. 2 to the UCC 1993 Stock Option Plan
(incorporated by reference to Exhibit 10.2 to the UCC
April 1995 Form 10-Q).
10.23+ Form of Executive Stock Option Agreement, dated as of
November 15, 1993 (incorporated by reference to Exhibit
10.22 to the UCC 1994 Form 10-K).
10.24+ Form of Amended and Restated 1996 - 1998 Long Term
Performance Award Agreement entered into in 1996 between
Crompton & Knowles or one of its subsidiaries and
thirteen of the executive officers of Crompton & Knowles
(incorporated by reference to Exhibit 10.27 to the
Crompton & Knowles Form 10-K for the fiscal year ended
December 27, 1997).
10.25 Second Amended and Restated Lease Agreement between the
Middlebury Partnership, as Lessor, and Uniroyal, as
Lessee, dated as of August 28, 1997 (incorporated by
reference to Exhibit 10 to the UCC/Uniroyal 10-Q for the
quarter ended September 27, 1997) .
10.261 Form of Receivables Sale Agreement, dated as of December
11, 1998, by and among Crompton & Knowles, as Initial
Collection Agent, Crompton & Knowles Receivables
Corporation, ABN AMRO Bank N.V., as the Agent, the
Enhancer, and the Liquidity Provider, and Windmill
Funding Corporation (incorporated by reference to
Exhibit 10.291 to the Crompton & Knowles Form 10-K for
the fiscal year ended December 26, 1998).
10.262 Form of Receivables Purchase Agreement, dated as of
December 11, 1998, by and among Crompton & Knowles, as
Initial Collection Agent, and certain of its
subsidiaries, as Sellers, and Crompton & Knowles
Receivables Corporation, as Buyer (incorporated by
reference to Exhibit 10.292 to the Crompton & Knowles
Form 10-K for the fiscal year ended December 26, 1998).
10.263 Form of Receivables Purchase Agreement, dated as of June
10, 1999, by and among Witco Funding Corporation, as
Seller, CIESCO L.P., as Investor, Citibank, N.A., as the
Initial Bank, Citicorp North America, Inc., as Agent, and
Witco, as Collection Agent and Originator (filed
herewith*).
10.264 Purchase and Contribution Agreement, dated as of June 10,
1999, by and between Witco, as Seller, and Witco Funding
Corporation, as Purchaser (filed herewith*).
10.27+ Crompton & Knowles Corporation (n/k/a CK Witco
Corporation) 1998 Long Term Incentive Plan (incorporated
by reference to Exhibit 10.2 to the Crompton & Knowles
Form 10-Q for the quarter ended June 26, 1999)
10.28+ Amendment to the Crompton & Knowles (n/k/a CK Witco
Corporation) 1998 Long Term Incentive Plan (incorporated
by reference to page 12 of the Joint Proxy-Statement
Prospectus S-4 Registration Statement).
10.29+ Amended and Restated Employment Agreement by and between
Crompton & Knowles and Vincent A. Calarco dated May 31,
1999 (incorporated by reference to Exhibit 10.1 to the
Crompton & Knowles Form 10-Q for the quarter ended June
26, 1999).
10.30+ Supplemental Retirement Agreement dated March 22, 1999,
by and between Crompton & Knowles and Vincent A. Calarco
(incorporated by reference to Exhibit 10.1 to the
Crompton & Knowles Form 10-Q for the quarter ended March
27, 1999).
10.31+ Form of Supplemental Retirement Agreement dated as of
March 22, 1999, by and between Crompton & Knowles and six
of its executive officers (incorporated by reference to
Exhibit 10.2 to the Crompton & Knowles Form 10-Q for the
quarter ended March 27, 1999).
10.32+ Form of Merger Synergy Restrict Stock Agreement, dated as
of October 19, 1999, by and between the Registrant and
various of its executive officers (filed herewith*).
10.33+ Form of 1999-2001 Long Term Performance Award Agreement,
dated as of February 1, 1999, by and between the
Registrant and various of its executive officers (filed
herewith*).
10.34+ Form of 2000-2002 Long Term Performance Award Agreement,
dated as of February 24, 2000, by and between the
Registrant and various of its executive officers (filed
herewith*).
10.35+ Form of Supplemental Retirement Agreement, dated as of
October 21, 1999, by and between the Registrant and
various of its executive officers (filed herewith*).
13 1999 Annual Report to Stockholders of the Registrant.
(Not to be deemed filed with the Securities and Exchange
Commission except those portions expressly incorporated
by reference into this report on Form 10-K.) (filed
herewith*).
21 Subsidiaries of the Registrant (filed herewith*).
23 Consent of independent auditors. (See Item 14(a)2
herein.) (filed herewith*).
24 Power of attorney from directors and executive officers
of the Registrant authorizing signature of this report.
(Original on file at principal executive offices of
Registrant.) (filed herewith*).
27 Financial data schedule for the fiscal year ended
December 31, 1999 (filed herewith*).
* Copies of these Exhibits are annexed to this report on Form
10-K provided to the Securities and Exchange Commission and the
New York Stock Exchange.
+ This Exhibit is a compensatory plan, contract or arrangement
in which one or more directors or executive officers of the
Registrant participate.
(b) Reports on Form 8-K filed in fourth quarter 1999
During the fiscal fourth quarter of 1999, the Registrant
filed a Current Report on Form 8-K dated October 18, 1999,
reporting on Item 5, Other Events and Item 7, Financial
Statements and Exhibits.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CK WITCO CORPORATION
(Registrant)
Date: March 29, 2000
By: /s/Peter Barna
Peter Barna
Senior Vice President &
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the date indicated.
Name Title
Vincent A. Calarco* Chairman of the Board, President,
and Director (Principal Executive
Officer)
Peter Barna* Senior Vice President
(Chief Financial Officer)
Brian J. Dick* Vice President - Finance
(Principal Accounting Officer)
James A. Bitonti* Director
Simeon Brinberg* Director
Robert A. Fox* Director
Roger L. Headrick* Director
Leo I. Higdon, Jr.* Director
Harry G. Hohn* Director
Nicholas Pappas* Director
C. A. Piccolo* Director
Bruce F. Wesson* Director
Patricia K. Woolf* Director
Date: March 29, 2000 *By:/s/Peter Barna
Peter Barna
as attorney-in-fact
Independent Auditors' Report and Consent
The Board of Directors and Stockholders
CK Witco Corporation:
Under date of January 31, 2000, except for the private placement
information described in the note captioned "Credit Facilities"
as to which the date is March 7, 2000, we reported on the
consolidated balance sheets of CK Witco Corporation and
subsidiaries (the Company) as of December 31, 1999 and December
26, 1998, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for each of the
years in the three-year period ended December 31,1999, which are
incorporated by reference in this Form 10 K. In connection with
our audits of the aforementioned consolidated financial
statements, we also audited the related consolidated financial
statement schedule included in this Form 10 K. This financial
statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this
financial statement schedule based on our audit.
In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
We consent to the incorporation by reference in the registration
statements (Nos. 33-21246, 33-42280, 33-67600, 333-62429 and 333-
87035) on Form S-8 of CK Witco Corporation of our report, dated
January 31, 2000, except for the private placement information
described in the note captioned "Credit Facilities" as to which
the date is March 7, 2000, relating to the consolidated balance
sheets of CK Witco Corporation and subsidiaries as of December
31, 1999 and December 26, 1998, and the related consolidated
statements of operations, stockholders' equity (deficit) and cash
flows for each of the years in the three-year period ended
December 31, 1999, which report is incorporated by reference in
the December 31, 1999 Annual Report on Form 10-K of CK Witco
Corporation.
Stamford, Connecticut
March 29, 2000
S-1
Schedule II
CK WITCO CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In thousands of dollars)
Additions
Balance at charged to Balance
beginning costs and Adjustments at end
of year expenses Recurring Other of year
Fiscal Year ended December 31, 1999:
Allowance for doubtful accounts
$ 9,768 $ 3,937 $ (5,206)(1) $ 14,857(5) $ 23,356
Accumulated amortization of cost in
excess of acquired net assets
44,647 12,382 (939)(2) (6,687)(4) 49,403
Accumulated amortization of other
intangible assets
120,860 15,078 (232)(2) (167)(4) 135,539
Fiscal Year ended December 26, 1998:
Allowance for doubtful accounts
$ 8,708 $ 5,209 $ (3,742)(1) $ (407)(3) $ 9,768
Accumulated amortization of cost in
excess of acquired net assets
42,243 7,222 (572)(2) (4,046)(3) 44,647
Accumulated amortization of other
intangible assets
123,262 14,122 743 (2) (17,267)(3) 120,860
Fiscal Year ended December 27, 1997:
Allowance for doubtful accounts
$ 7,299 $ 2,230 $ (821)(1) $ 0 $ 8,708
Accumulated amortization of cost in
excess of acquired net assets
36,616 5,751 (67)(2) (57)(4) 42,243
Accumulated amortization of other
intangible assets
108,163 15,413 (314)(2) 0 123,262
(1) Represents accounts written off as uncollectible (net of
recoveries), and the translation effect of accounts
denominated in foreign currencies.
(2) Represents the translation effect of intangible assets
denominated in foreign currencies.
(3) Represents primarily disposition of the Gustafson seed
treatment business.
(4) Represents intangible asset retirements.
(5) Represents primarily the acquisition of Witco Corporation.
S - 2