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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file number 1-13397
CORN PRODUCTS INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 22-3514823
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6500 SOUTH ARCHER ROAD, BEDFORD PARK, ILLINOIS 60501-1933
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (708) 563-2400
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, $.01 par value per share New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
(currently traded with Common Stock)
Securities registered pursuant to Section 12(g) of the Act:
NONE
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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
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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 or this Form 10-K or any
amendment to this Form 10-K [ ]
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The aggregate market value of the registrant's voting stock held by
nonaffiliates of the registrant (based upon the per share closing price of
$32.125 on March 23, 1998, and, for the purpose of this calculation only, the
assumption that all registrant's directors and executive officers are
affiliates) was approximately $1,130,018,013.
The number of shares outstanding of the registrant's Common Stock, par
value $.01 per share, as of March 23, 1998, was 35,652,134.
Documents Incorporated by Reference:
Information required by Part II (Items 6, 7 and 8) and Part IV (Item 14(a)(1))
of this document is incorporated by reference to certain portions of the
registrant's 1997 Annual Report to Stockholders.
Information required by Part III (Items 10, 11, 12 and 13) of this document is
incorporated by reference to certain portions of the registrant's definitive
Proxy Statement distributed in connection with its 1998 Annual Meeting of
Stockholders.
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PART I.
ITEM 1. BUSINESS
THE COMPANY
Corn Products International, Inc. was formed in March 1997 to assume
the operations of the corn refining business (the "Corn Refining Business") of
Bestfoods, Inc., formerly CPC International Inc. ("Bestfoods") and to effect
the distribution of 100% of the outstanding shares of the Company to the
Bestfoods common stockholders. On December 31, 1997, Bestfoods transferred the
assets and related liabilities of its Corn Refining Business to the Company.
Effective at 11:59:59 p.m. on December 31, 1997, Bestfoods distributed all of
the common stock of the Company to holders of common stock of Bestfoods. Since
that time, the Company has operated as an independent company whose common stock
is traded on the New York Stock Exchange. Unless the context indicates
otherwise, references to the "Company" and "Corn Products" refer to the Corn
Refining Business of Bestfoods for periods prior to January 1, 1998 and to Corn
Products International, Inc. and its subsidiaries for the periods on or after
such date.
OVERVIEW
The Corn Refining Business dates back to the original formation of
Bestfoods' predecessor over 90 years ago. In 1906, Corn Products Refining
Company was formed through an amalgamation of virtually all the corn syrup and
starch companies in the United States. International expansion followed soon
thereafter. In 1928, the Corn Refining Business commenced Latin American
operations in Brazil, followed quickly by expansions into Argentina and Mexico.
Corn Products International, Inc., together with its subsidiaries,
produces a large variety of food ingredients and industrial products derived
from the wet milling of corn and other starch-based materials (such as tapioca
and yucca). The Company is one of the largest corn refiners in the world and the
leading corn refiner in Latin America. In addition, it is the world's leading
producer of dextrose and has strong regional leadership in corn starch. The
Company's consolidated operations are located in ten countries with 19 plants
and, in 1997, the Company had consolidated net sales of approximately $1.4
billion. The Company also holds interests in 11 other countries through
unconsolidated joint ventures and allied operations, which operate an additional
19 plants. Approximately 60% of the Company's revenues are generated in North
America with the remainder coming from Latin America, Asia and Africa.
Corn refining is a capital-intensive two-step process that involves the
wet milling and processing of corn. During the front end process, corn is
steeped in water and separated into starch and co-products such as animal feed
and germ, The starch is then either dried for sale or further modified or
refined through various processes to make sweeteners and other starch-based
products designed to serve the particular needs of various industries. The
Company's sweetener
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products include high fructose corn syrups ("HFCS"), glucose corn syrups, high
maltose, corn syrups, dextrose, maltodextrins, and glucose and corn syrup
solids. The Company's starch-based products include both industrial and food
grade starches.
The Company supplies a broad range of customers in over 60 industries.
The Company's most important customers are in the food and beverage,
pharmaceuticals, paper products, corrugated and laminated paper, textiles and
brewing industries and in the animal feed markets worldwide. The Company
believes its customers value its local approach to service.
BUSINESS STRATEGY
Corn Products' business strategy is to focus its management, technical
and financial resources on its areas of strength. Specifically, the Company
intends to: (i) maintain and grow its leading market positions; (ii) drive for
delivered cost leadership; (iii) provide high quality products and superior
service valued by customers; and (iv) expand in existing markets and enter new
markets.
Maintain and Grow Leading Market Positions. The Company intends to
continue to leverage its worldwide expertise and seek to grow its position as a
leading corn refiner in markets where it currently has a strong leadership
position by, among other things, expanding capacity to meet current and
anticipated customer needs.
Drive for Delivered Cost Leadership. The Company has implemented and
intends to continue to implement productivity enhancing and cost-saving
programs. This effort includes improving facility reliability by further
developing successful preventative maintenance programs, as well as striving
for consistent logistical excellence.
Provide High Quality Products and Superior Service. The Company
believes that it delivers high quality products and provides superior customer
service. The Company plans to continue to improve its service levels and focus
on customer needs to gain additional preferred supplier relationships.
Expand in Existing Markets and Enter New Markets. The Company believes
it is well positioned through its global alliances and joint ventures to seize
opportunities for expansion in existing markets and entrance into new markets.
The Company also intends to form additional strategic alliances with local corn
refiners as a cost-effective method of expanding into emerging markets.
PRODUCTS
The Company sells sweetener products that account for approximately
55% of the net sales of the Corn Refining Business, starch products that account
for approximately 20% of net sales, and co-products that account for
approximately 25% of net sales.
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Sweetener Products.
High Fructose Corn Syrup: The Company produces two types of high
fructose corn syrup: (i) HFCS-55, which is primarily used as a sweetener in
soft drinks made in the United States, Canada, Mexico and Japan, and (ii)
HFCS-42, which is used as a sweetener in various consumer products such as
fruit-flavored beverages, yeast-raised breads, rolls, doughs, ready-to-eat
cakes, yogurt and ice cream.
Glucose Corn Syrups: Corn syrups are fundamental ingredients in
many industrial products and are widely used in food products such as baked
goods, snack foods, beverages, canned fruits, condiments, candy and other
sweets, dairy products, ice cream, jams and jellies, prepared mixes and
table syrups. Corn Products offers corn syrups that are manufactured
through an ion-exchange process, a method that creates the highest quality,
purest corn syrups.
High Maltose Corn Syrup: This special type of glucose syrup has
a unique carbohydrate profile, making it ideal for use as a source of
fermentable sugars in brewing beers. High maltose syrups are also used in
the production of confections, canning and some other food processing
applications.
Dextrose: The Company was granted the first U.S. patent for
dextrose in 1923. The Company currently produces dextrose products that are
grouped in three different categories-monohydrate, anhydrous and specialty.
Monohydrate dextrose is used across the food industry in many of the same
products as glucose corn syrups, especially in confectionery applications.
Anhydrous dextrose is used to make solutions for intravenous injection and
other pharmaceutical applications, as well as some specialty food
applications. Specialty dextrose products are used in a wide range of
applications, from confectionery tableting to dry mixes to carriers for
high intensity sweeteners. Dextrose also has a wide range of industrial
applications, including use in wall board and production of biodegradable
surfactants (surface agents), humectants (moisture agents), and as the base
for fermentation products including vitamins, organic acids, amino acids
and alcohols.
Maltodextrins and Glucose and Corn Syrup Solids: These products
have a multitude of food applications, including formulations where liquid
corn syrups cannot be used. Maltodextrins are resistant to browning,
provide excellent solubility, have a low hydroscopicity (do not retain
moisture), and are ideal for their carrier/bulking properties. Corn syrup
solids have a bland flavor, remain clear in solution, are easy to handle
and also provide bluing properties.
Starch Products. Starches are an important component in a wide range of
processed foods, used particularly as a thickener and binder. Corn starch is
also sold to corn starch packers for sale to consumers. Starches are also used
in paper production to produce a smooth surface
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for printed communications and to improve strength in today's recycled papers.
In the corrugating industry, starches are used to produce high quality adhesives
for the production of shipping containers, display board and other corrugated
applications. The textile industry has successfully used starches for over a
century to provide size and finishes for manufactured products. Industrial
starches are used in the production of construction materials, adhesives,
pharmaceuticals and cosmetics, as well as in mining, water filtration and oil
and gas drilling.
Enzymes. Enzymes are produced and marketed for a variety of food and
industrial applications.
Co-Products. Refined corn oil is sold to packers of cooking oil and to
producers of margarine, salad dressings, shortening, mayonnaise and other foods.
Corn gluten feed is sold as animal feed. Corn gluten meal and steepwater are
sold as additives for animal feed.
OPERATIONS
The Company's North American operations, which include the U.S., Canada and
Mexico, operate 11 plants (including four owned by unconsolidated joint
ventures), producing regular and modified starches, dextrose, high fructose and
high maltose corn syrups and corn syrup solids, dextrins and maltodextrins,
caramel color and sorbitol. The Company's plant in Bedford Park, Illinois is a
major supplier of starch and dextrose products for the Company's U.S. and export
customers. A 100 million pound dextrose expansion was completed at the Bedford
Park plant in January of 1996. The Company's other U.S. plants in Winston-Salem,
North Carolina and Stockton, California enjoy strong market shares in their
local areas, as do the Company's Canadian plants in Cardinal, London and Port
Colborne, Ontario. In Mexico, the Company's joint venture with Arancia
Industrial S. A. de C. V. is that country's largest corn refiner. The venture
was the first in Mexico to produce HFCS-55 for sale to the soft drink bottling
industry.
The Company is the largest corn refiner in Latin America, with leading
market shares in Chile, Brazil and Colombia and a strong position in Argentina.
Its Latin American consolidated operations have 9 plants that produce regular,
modified, waxy and tapioca starches, high maltose and corn syrups, dextrins and
maltodextrins, dextrose, caramel color, sorbitol and vegetable adhesives.
The Company has additional subsidiaries in Kenya, Malaysia and Pakistan,
which operate three additional plants. These operations produce modified,
regular, waxy and tapioca starches, dextrins, glucose, dextrose and caramel
color.
In addition to the operations in which it engages directly and through
joint ventures, the Company also has numerous strategic alliances through
technical license agreements with companies in Australia, India, Japan, New
Zealand, Thailand, South Africa, Zimbabwe, Serbia and Venezuela. As a group, the
Company's strategic alliance partners operate 15 plants and produce high
fructose, glucose and high maltose syrups (both corn and tapioca), regular,
modified, waxy
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and tapioca starches, dextrose and dextrins, maltodextrins and caramel color.
These products have leading market positions in many of their target markets.
COMPETITION
The corn refining industry is highly competitive. Most of the Company's
products compete with virtually identical products and derivatives manufactured
by other companies in the industry. The U.S. market is the most competitive,
with participation by eleven corn refiners, including ADM Corn Processing
Division ("ADM") (a division of Archer Daniels Midland Company), Cargill, A.E.
Staley Manufacturing Co. ("Staley") (a subsidiary of Tate & Lyle, PLC) and
National Starch and Chemical Company ("National Starch") (a subsidiary of
Imperial Chemicals Industries plc). In Latin America, Cargill has corn refining
operations in Brazil, National Starch has operations in Brazil and Mexico, and
ALMEX a joint venture between ADM and Staley, has operations in Mexico. Several
local corn refiners also operate in Latin America. Competition within markets is
largely based on price, quality and product availability.
Several of the Company's products also compete with products made from raw
materials other than corn. High fructose corn syrup and monohydrate dextrose
compete principally with cane and beet sugar products. Co-products such as corn
oil and gluten meal compete with products of the corn dry milling industry and
with soybean oil and soybean meal. Fluctuations in prices of these competing
products may affect prices of, and profits derived from, the Company's products.
CUSTOMERS
The Company supplies a broad range of customers in over 60 industries.
Historically, Bestfoods' worldwide branded foods business has been one of the
Company's largest customers, accounting for approximately 12.5% of total sales
in 1997. In addition, approximately 15% of the Company's worldwide sales in 1997
represented sales of HFCS to international, regional and local companies engaged
in the soft drink industry, primarily in North America.
RAW MATERIALS
The basic raw material of the corn refining industry is yellow dent
corn. In the United States, the corn refining industry processes about 10% to
15% of the annual U.S. corn crop. The supply of corn in the United States has
been, and is anticipated to continue to be, adequate for the Company's domestic
needs. The price of corn, which is determined by reference to prices on the
Chicago Board of Trade, fluctuates as a result of three primary supply factors
- -- farmer planting decisions, climate and government policies -- and three major
market demand factors -- livestock feeding, shortages or surpluses of world
grain supplies and domestic and foreign government policies and trade
agreements.
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Corn is also grown in other areas of the world, including Canada, South
Africa, Argentina, Brazil, China and Australia. The Company's affiliates outside
the United States utilize both local supplies of corn and corn imported from
other geographic areas, including the United States. The supply of corn for
these affiliates is also generally expected to be adequate for the Company's
needs. Corn prices for the Company's non-U.S. affiliates generally fluctuate as
a result of the same factors that affect U.S. corn prices.
Due to the competitive nature of the corn refining industry and the
availability of substitute products not produced from corn, such as sugar from
cane or beets, end product prices may not necessarily fluctuate in relation to
raw material costs of corn.
Over 55% of the Company's starch and refinery products are sold at prices
established in supply contracts lasting for periods of up to one year. The
remainder of the Company's starch and refinery products are not sold under firm
pricing arrangements and actual pricing for those products is affected by the
cost of corn at the time of production and sale.
The Company follows a policy of hedging its exposure to commodities
fluctuations with commodities futures contracts for certain of its North
American corn purchases. All firm priced business is hedged when contracted.
Other business may or may not be hedged at any given time based on management's
judgment as to the need to fix the costs of its raw materials to protect the
Company's profitability. Realized gains and losses arising from such hedging
transactions are considered an integral part of the cost of those commodities
and are included in the cost when purchased. See "Risk Factors -- Potential
Losses from Commodities Hedging Activities.
GEOGRAPHIC SCOPE
The Company engages in business in over 20 countries, operating directly
and through affiliates in nine countries with 19 plants and indirectly through
joint ventures and technical licensing agreements elsewhere in Latin America,
Asia, Africa, Australia and New Zealand. The Company has wholly owned operations
in North America, Latin America and Africa, a 49% interest in a joint venture in
Mexico, and other joint venture interests and licensing and technical agreements
in Latin America, Asia and Africa. In 1997, approximately 60% of the Company's
net sales was derived from its operations in North America and 40% from
operations in other geographic areas, primarily Latin America (representing
over 80% of sales and operating income of other geographic areas). See Note 14
of Notes to Consolidated Financial Statements for certain financial information
with respect to geographic areas.
RESEARCH AND DEVELOPMENT
The Company's product development activity is focused on developing product
applications for identified customer and market needs. Through this approach,
the Company has developed value-added products for use in the corrugated paper,
food, textile, baking and confectionery industries. The Company usually
collaborates with customers to develop the
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desired product application either in the customers' facilities, the Company's
technical service laboratories or on a contract basis. The Company's marketing,
product technology and technology support staffs devote a substantial portion of
their time to these efforts. Product development is enhanced through technology
transfers pursuant to existing licensing arrangements.
SALES AND DISTRIBUTION
The Company's products are sold directly to manufacturers and distributors
by salaried sales personnel, who are generally dedicated to customers in a
geographic region. In addition, the Company has a staff that provides technical
support to the sales personnel on an industry basis. The Company generally
utilizes contract truckers to deliver bulk products to customer destinations but
also has some of its own trucks for product delivery. In North America, the
trucks generally ship to nearby customers. For those customers located
considerable distances from Company plants, a combination of railcars and trucks
is used to deliver product. Railcars are generally leased for terms of five to
fifteen years.
PATENTS AND TRADEMARKS
The Company owns a number of patents which relate to a variety of products
and processes and a number of established trademarks under which the Company
markets such products. The Company also has the right to use certain other
patents and trademarks pursuant to patent and trademark licenses. The Company
does not believe that any individual patent or trademark is material. There is
not currently any pending challenge to the use or registration of any of the
Company's significant patents or trademarks that would have a material adverse
impact on the Company or its results of operations.
EMPLOYEES
As of December 31, 1997, the Corn Refining Business had approximately 4,300
employees, of which approximately 950 were located in the U.S. Approximately 30%
of U.S. and 22% of non-U.S. employees are unionized. The Company believes its
union and non-union employee relations are good.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
As a manufacturer and maker of food items and items for use in the
pharmaceutical industry, the Company's operations and the use of many Company
products are subject to various U.S., state, foreign and local statutes and
regulations, including the Federal Food, Drug and Cosmetic Act and the
Occupational Safety and Health Act, and to regulation by various government
agencies, including the United States Food and Drug Administration, which
prescribe requirements and establish standards for product quality, purity and
labeling. The finding of a failure to comply with one or more regulatory
requirements can result in a variety of sanctions,
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including monetary fines. The Company may also be required to comply with U.S.,
state, foreign and local laws regulating food handling and storage. The Company
believes its competitive position has not been negatively affected by these laws
and regulations.
The operations of the Company are also subject to various U.S., state,
foreign and local laws and regulations with respect to environmental matters,
including air and water quality and underground fuel storage tanks, and other
regulations intended to protect public health and the environment. The Company
believes it is in material compliance with all such applicable laws and
regulations. Based upon current laws and regulations and the interpretations
thereof, the Company does not expect that the costs of future environmental
compliance will be a material expense, although there can be no assurance that
the Company will remain in compliance or that the costs of remaining in
compliance will not have a material adverse effect on the Company's financial
condition and results of operations.
The Company currently anticipates that it will spend approximately $4.9
million in fiscal 1998 for environmental control equipment to be incorporated
into existing facilities and in planned construction projects. This equipment is
intended to enable the Company to continue its policy of compliance with
existing known environmental laws and regulations. Under the U.S. Clean Air Act
Amendments of 1990, air toxics regulations will be promulgated for a number of
industry source categories. The U.S. Environmental Protection Agency's
regulatory timetable specifies the promulgation of standards for vegetable oil
production and for industrial boilers by the year 2000. At that time, additional
pollution control devices may be required at the Company's U.S. facilities to
meet these standards. The ultimate financial impact of the standards cannot be
accurately estimated at this time.
RELATIONSHIP BETWEEN THE COMPANY AND BESTFOODS
In connection with the spin-off of the Company from Bestfoods at the end of
1997, the Company entered into various agreements with Bestfoods for the purpose
of governing certain of the ongoing relationships between Bestfoods and the
Company in the future.
The Company entered into a tax indemnification agreement that requires the
Company to indemnify Bestfoods against tax liabilities arising from the loss of
the tax-free reorganization status of the spin-off. This agreement could
restrict the Company, for a two year period, from entering into certain
transactions, including limitations on the liquidation, merger or consolidation
with another company, certain issuances and redemptions of common stock and the
distributions or sale of certain assets.
Prior to the spin-off, the Company assumed from Bestfoods and borrowed from
third parties an aggregate of $350 million of debt. The Company transferred the
proceeds of these borrowings to Bestfoods as part of the spin-off.
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The Company and Bestfoods also entered into a Master Supply Agreement,
under which the Company and its affiliates will continue to supply Bestfoods and
its affiliates with certain corn refining products at prices based generally
upon prevailing market prices. Sales of products by the Corn Refining Business
to Bestfoods prior to the spin-off, which are reflected in the financial
statements of the Company for the periods prior to January 1, 1998, were
generally made at prevailing market prices and were otherwise generally
consistent with the terms of the Master Supply Agreement. Pursuant to the Master
Supply Agreement, Bestfoods will purchase certain products exclusively from the
Company and the Company is restricted from engaging in certain activities that
are competitive with Bestfoods. The Master Supply Agreement has a two year term
and is renewable in whole or in part thereafter upon mutual agreement of the
parties. At this time, neither Bestfoods nor the Company has expressed an
intention not to renew the Master Supply Agreement upon its expiration.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the names and ages of all executive officers of the
Company, indicating their positions and offices with the Company.
Name Age All positions and offices with the Company
Konrad Schlatter 62 Chairman and Chief Executive Officer of Corn
Products. Mr. Schlatter served as Senior Vice
President of Bestfoods from 1990 to 1997 and
Chief Financial Officer of Bestfoods from 1993
to February 1997.
Samuel C. Scott 53 President and Chief Operating Officer of Corn
Products. Mr. Scott has been President of
Bestfoods' worldwide Corn Refining Business
since 1995 and has been President of Bestfoods'
North American Corn Refining Business since
1989. He was elected a Vice President of
Bestfoods in 1991. Mr. Scott is a director of
Motorola, Inc. and Reynolds Metal Company.
Marcia E. Doane 56 Vice President, General Counsel and Corporate
Secretary of Corn Products. Ms. Doane has
served as Vice President, Legal and Regulatory
Affairs of the Corn Products Division of
Bestfoods since 1996. Prior thereto, she served
as Counsel to the Corn Products Division from
1994 to 1996. Ms. Doane joined Bestfoods'
legal department in 1989 as Operations Attorney
for the Corn Products Division.
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Frank J. Kocun 55 Vice President and President, Cooperative
Management Group. Mr. Kocun served as
President of the Cooperative Management Group
of the Corn Products Division of Bestfoods since
1991 and as Vice President of the Cooperative
Management Group since 1985. Mr. Kocun
joined Bestfoods in 1968 and has served in
various executive positions in the Corn Products
Division and in Penick Corporation, a Bestfoods
subsidiary.
Eugene J. Northacker 56 Vice President and President, Latin American
Division. Mr. Northacker was appointed
President of Bestfoods' Latin America Corn
Refining Division and elected a Vice President of
Bestfoods in 1992. Prior to that, he served as
Business Director of Bestfoods' Latin America
Corn Refining Division from 1989 to 1992, as
Corn Refining General Manager of Bestfoods'
then Mexican subsidiary from 1984 to 1986. Mr.
Northacker joined Bestfoods in 1968 in the
financial group of Bestfoods' North American
consumer foods division, and has held executive
assignments in several Bestfoods subsidiaries.
Michael R. Pyatt 50 Vice President and Executive Vice President,
North American Division. Mr. Pyatt has served
as Chairman, President and Chief Executive
Officer of Canada Starch Co., Inc., a Bestfoods
subsidiary, since 1994 and as President of the
Canadian business of Bestfoods' Corn Products
Division, Vice Chairman of Canada Starch and
as a Vice President of the Corn Products
Division since 1992. Mr. Pyatt joined Bestfoods
in 1982 and has served in various sales and
marketing positions in the Casco business.
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James W. Ripley 54 Vice President - Finance and Chief Financial
Officer. Mr. Ripley has served as Comptroller of
Bestfoods since 1995. Prior thereto, he served
as Vice President of Finance for Bestfoods'
North American Corn Refining Division from
1984 to 1995. Mr. Ripley joined Bestfoods in
1968 as chief international accountant, and has
subsequently served as Bestfoods' Assistant
Corporate Comptroller, Corporate General Audit
Coordinator and Assistant Comptroller for
Bestfoods' European Consumer Foods Division.
Richard M. Vandervoort 54 Vice President - Business Development and
Procurement, North American Division. Mr,
Vandervoort has served as Vice President -
Business Management and Marketing for
Bestfoods' Corn Products Division since 1989.
Mr. Vandervoort joined Bestfoods in 1971 and
has served in various executive sales positions in
Bestfoods' Corn Products Division and in
Peterson/Puritan Inc., a Bestfoods subsidiary.
Cheryl K. Beebe 42 Treasurer. Ms. Beebe has served as Director of
Finance and Planning for the Corn Refining
Business worldwide from 1995 to 1997, and as
Director of Financial Analysis and Planning for
Corn Products North America from 1993. Ms.
Beebe joined Bestfoods in 1980 and has served
in various financial positions in Bestfoods.
James J. Hirchak 43 Vice President - Human Resources. Mr. Hirchak
joined Bestfoods in 1976 and held various
Human Resources positions in Bestfoods until
1984, when he joined Bestfoods' Corn Products
Division. In 1987, Mr. Hirchak was appointed
Director, Human Resources for Corn Products
North American operation and has served as
Vice President, Human Resources for the
Corn Products Division since 1992.
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Jack C. Fortnum 41 Comptroller. Mr. Fortnum has served as the
Vice President of Finance for Refinerias de
Maize, Bestfoods, Argentine subsidiary from
1995 to 1997, as the Director of Finance and
Planning for Latin America Corn Refining
Division from 1993 to 1995, and as the Vice
President and Comptroller of Canada Starch Co.,
Inc., the Canadian subsidiary of Bestfoods and
Vice President of Finance of the Canadian Corn
Refining Business from 1989.
ITEM 2. PROPERTIES
The Company operates, directly and through its subsidiaries, 19
manufacturing facilities, 18 of which are owned and one of which is leased
(Jundiai, Brazil). In addition, the Company owns its corporate headquarters in
Bedford Park, Illinois. The following list details the location of the Company's
manufacturing facilities:
U.S. Latin America
Stockton, California Baradero, Argentina
Bedford Park, Illinois Balsa Nova, Brazil
Winston-Salem, North Carolina Cabo, Brazil
Beloit, Wisconsin Jundiai, Brazil
Mogi-Guacu, Brazil
Canada Llay-Llay, Chile
Barranquilla, Colombia
Cardinal, Ontario Cali, Columbia
London, Ontario Medellin, Colombia
Port Colborne, Ontario
Asia
Africa
Petaling Jaya, Malaysia
Eldoret, Kenya Faisalabad, Pakistan
In addition to the foregoing, the Company has interests in an additional 19
plants through its interests in unconsolidated joint ventures and allied
operations.
While the Company has achieved high capacity utilization, the Company
believes its manufacturing facilities are sufficient to meet its current
production needs. The Company has preventive maintenance and de-bottlenecking
programs designed to further improve grind capacity and facility reliability.
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The Company has electricity co-generation facilities at all of its U.S. and
Canadian plants, as well as its plants in Argentina and Pakistan, that provide
electricity at a lower cost than is available from third parties. The Company
generally owns and operates such co-generation facilities itself, but has two
large facilities at its Stockton, California and Cardinal, Ontario locations
that are owned by, and operated pursuant to co-generation agreements with, third
parties.
The Company believes it has competitive, up-to-date and cost-effective
facilities. In recent years, significant capital expenditures have been made to
update, expand and improve the Company's facilities, averaging in excess of $150
million per year for the last five years. Capital investments have included the
rebuilding of the Company's plant in Cali, Colombia; an expansion of both grind
capacity and dextrose production capacity at the Company's Argo facility in
Bedford Park, Illinois; entry into the high maltose corn syrup business in
Brazil, Colombia and Argentina; and the installation of energy co-generation
facilities in Canada. The Company believes these capital expenditures will allow
the Company to operate highly efficient facilities for the foreseeable future
with further annual capital expenditures that are significantly below historical
averages. In recent years, steps have also been taken to reduce costs by closing
facilities which could not economically be made efficient, including plants in
Argentina and Honduras.
ITEM 3. LEGAL PROCEEDINGS
Under the terms of the agreements relating to the spin-off of the Company
from Bestfoods, the Company agreed to indemnify Bestfoods for certain
liabilities relating to the operation of the Corn Refining Business prior to the
spin-off, including liabilities relating to the proceedings described below.
In July 1995, Bestfoods received a federal grand jury subpoena in
connection with an investigation by the Antitrust Division of the U.S.
Department of Justice of U.S. corn refiners regarding the marketing of high
fructose corn syrup and other "food additives" (the investigation of Bestfoods
relates only to high fructose corn syrup). Bestfoods has produced the documents
sought by the Justice Department. Bestfoods, as a high fructose corn syrup
producer, was also named as one of the defendants in a number of private treble
damage class actions, by direct and indirect customers, and one individual
action, alleging violations of federal and state antitrust laws. Following the
certification of the consolidated federal class actions, Bestfoods entered into
a settlement of the federal claims for $7 million. Bestfoods also settled the
one individual action (Gray and Company v. Archer Daniels Midland et. al. Civ.
No. 97-69-AS) in the United States District Court for the District of Oregon
(subsequently transferred to the United States District Court for the Central
District of Illinois, Peoria Division for consolidation in MDL, Docket No. 1087
and Matter File No. 95-1477). A stipulated joint dismissal of Bestfoods from the
Gray and Company litigation was received by the court on January 28, 1998.
Bestfoods remains a party to the state law actions filed in Alabama, California,
the District of Columbia, West Virginia, and
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Kansas, each of which was filed in 1995 or 1996. A state law action filed in
Michigan was dismissed on February 4, 1998 for lack of progress after
plaintiffs' motion to certify a class was denied.
The Company is currently subject to claims and suits arising in the
ordinary course of business, including environmental proceedings. The Company
does not believe that the results of such legal proceedings, even if unfavorable
to the Company, will be material to the Company. There can be no assurance,
however, that any claims or suits arising in the future, taken individually or
in the aggregate, will not have a material adverse effect on the Company's
financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
There were no matters submitted to a vote of securityholders, through the
solicitation of proxies or otherwise, during the fourth quarter ended December
31, 1997.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock trades on the New York Stock Exchange under the
symbol "CPO." The following table sets forth, for the periods indicated, the
range of the high and low sales prices of the Company Common Stock as reported
by the Wall Street Journal. At the close of business on March 23, 1998 there
were approximately 23,400 holders of record of the outstanding shares of the
Company's Common Stock. Although the Company's Common Stock is traded on the
New York Stock Exchange, no assurance can be given as to the future price of
or the markets for the Company's Common Stock.
The Company's
Common Stock
High Low
1997
December 11, 1997 through December 31, 1997* 32 28 7/8
1998
January 1, 1998 through March 23, 1998 35 1/8 26 5/16
- --------------
*Prices represent when-issued trading on the New York Stock Exchange. The
Company's Common Stock began regular way trading on January 2, 1998.
To date, the Company has paid no dividends.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference from the Annual Report, page 32, section
entitled "Selected Financial Information."
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Incorporated by reference from the Annual Report, pages 8-12, section
entitled "Management's Discussion and Analysis."
RISK FACTORS
UNCERTAIN ABILITY TO REVERSE RECENT DISAPPOINTING FINANCIAL PERFORMANCE.
The Company's ability to generate operating income and to increase profitability
depends to a large extent upon its ability to price finished products at a level
that will cover manufacturing and raw material costs and provide a profit
margin. The Company's ability to maintain appropriate price levels is determined
by a number of factors largely beyond the Company's control, such as aggregate
industry supply and market demand, which may vary from time to time and by the
geographic region of the Company's operations. For example, the Company's
profits sharply declined in 1996 and 1997. The primary reason for the profit
decline in 1997 was a significant expansion of high fructose corn syrup industry
capacity in North America ahead of demand. The sharp and unusual increase in the
cost of corn during 1996, which could not be fully passed on in increased
prices, was the primary cause of the profit decline in 1996. Other factors also
affect the Company's profitability, including the economic conditions in various
geographic regions and countries in which the Company manufactures and sells its
finished products. Accordingly, there can be no assurance that the Company will
successfully reverse these declines in profit.
UNCERTAIN ABILITY TO CONTAIN COSTS OR TO FUND CAPITAL EXPENDITURES. The
Company's future profitability and growth also depends on the Company's ability
to reduce operating costs and per-unit product costs, to maintain and/or
implement effective cost control programs and to develop successful value-added
products and new product applications, while at the same time maintaining
competitive pricing and superior quality products, customer service and support.
The Company's ability to maintain a competitive cost structure depends on
continued containment of manufacturing, delivery and administrative costs as
well as the implementation of cost-effective purchasing programs for raw
materials, energy and related manufacturing requirements. The Company expects to
spend approximately $70 to $100 million per year for worldwide capital
expenditures from 1998 through 2000, primarily to implement productivity
improvements and, if supported by customer demand, expand the production
capacity of its facilities. Additional funds may be needed for working capital
as the Company grows and expands its operations. To the extent possible, these
capital expenditures and other expenses are expected to be funded from
operations. If the Company's cash flow is insufficient to fund such expenses,
the Company may either reduce its capital expenditures or utilize certain
general credit facilities. The Company may also seek to generate additional
liquidity through the sale of debt or equity securities in private or public
markets or through the sale of non-productive assets. The Company cannot provide
any assurance that cash flow from operations will be sufficient to fund
anticipated capital expenditures and working capital requirements or that
additional funds can be obtained from the financial markets or the sale of
assets at terms favorable to the Company. If the Company is unable to generate
sufficient cash flows or raise sufficient additional funds to fund capital
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expenditures, it may not be able to achieve its desired operating efficiencies
and expansion plans, which may adversely impact the Company's competitiveness
and, therefore, its results of operations.
COMPETITION; EXPANDING INDUSTRY CAPACITY. The Company operates in a highly
competitive environment. Almost all of the Company's products compete with
virtually identical or similar products manufactured by other companies in the
corn refining industry. In the United States, there are ten other corn refiners,
several of which are divisions of larger enterprises that have greater financial
resources and some of which, unlike the Company, have vertically integrated
their corn refining and other operations. Many of the Company's products also
compete with products made from raw materials other than corn. Fluctuation in
prices of these competing products may affect prices of, and profits derived
from, the Company's products. Competition within markets is largely based on
price, quality and product availability and the Company experiences price
pressures in certain of its markets as a result of competitors' pricing
practices.
PRICE VOLATILITY AND UNCERTAIN AVAILABILITY OF CORN. Corn purchasing costs,
which include the price of the corn plus delivery cost vary between 40% and 65%
of the Company's product costs. The price and availability of corn are
influenced by economic and industry conditions, including supply and demand
factors such as crop disease and severe weather conditions such as drought,
floods or frost that are difficult to anticipate and cannot be controlled by the
Company. In 1996, profitability was adversely impacted by an exceptional
increase in corn costs which the Company was not able to offset with an increase
in the price of its products. In addition, the price of corn sweeteners,
especially high fructose corn syrup, is indirectly impacted by government
programs supporting sugar prices. There can be no assurance that the Company
will be able to purchase corn at prices that can be adequately passed on to
customers or in quantities sufficient to sustain or increase its profitability.
POTENTIAL LOSSES FROM COMMODITIES HEDGING ACTIVITIES. The Company enters
into corn futures contracts, or takes hedging positions in the corn futures
markets, in an attempt to minimize the effects of the volatility of corn costs
on operating profits. The effectiveness of such hedging activities is dependent
upon, among other things, the cost of corn and the ability of the Company to
sell sufficient products to utilize all of the corn with respect to which it has
futures contracts. Occasionally, such hedging activities can themselves result
in losses, some of which may be material. During the fourth quarter of 1996, the
Company recognized a loss of $40 million in connection with the liquidation of
certain corn futures contracts, No assurance can be given that such
hedging-related losses will not recur. See Note 10 of Notes to Consolidated
Financial Statements for information with respect to the Company's hedging
position at December 31, 1997.
UNAVAILABILITY OF BESTFOODS' FINANCIAL AND OTHER RESOURCES. Prior January
1, 1998, the Company was operated as an unincorporated division of Bestfoods.
Thus, the Company does not have an operating history as a separate company. As
an independent public company, Corn Products is no longer able to rely on
Bestfoods for financial support or to benefit from its relationship with
Bestfoods to obtain credit.
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ABSENCE OF PRIOR TRADING MARKET FOR CORN PRODUCTS COMMON STOCK. Prior to
December 11, 1997, there was no trading for Corn Products Common Stock. The Corn
Products Common Stock is listed on the NYSE under the symbol "CPO". There can be
no assurance as to the prices at which Corn Products Common Stock will trade in
the future. The prices at which such shares trade may fluctuate significantly
and may be lower or higher than the price that would be expected. Prices for
shares of Corn Products Common Stock may be influenced by many factors,
including the depth and liquidity of the market for the shares, investor
perception of the Company, changes in economic conditions in the corn refining
industry and general economic and market conditions. In addition, the stock
market often experiences significant price fluctuations that are unrelated to
the operating performance of the specific companies whose stock is traded.
Market fluctuations, as well as economic conditions, could have a materially
adverse impact on the market price of the shares of Corn Products Common Stock.
UNCERTAINTY OF DIVIDENDS. The payment of dividends is at the discretion of
the Corn Products Board and will be subject to the Company's financial results
and the availability of surplus funds to pay dividends. No assurance can be
given that the Company will pay any dividends.
INTERNATIONAL OPERATIONS RISKS. The Company operates a multinational
business and, accordingly, is subject to risks that are inherent in operating in
foreign countries. Approximately 56% of the Company's 1997 revenues were
generated by non-U.S. operations. Due to the significant amount of non-U.S.
revenues, fluctuations in the value of foreign currencies relative to the U. S.
dollar could increase the volatility of the Company's U.S. dollar-demoninated
operating results. The Company's non-U.S. operations are also subject to
political, economic and other risks inherent in operating in countries outside
the United States, including possible nationalization, expropriation, adverse
government regulation, imposition of import and export duties and quotas,
currency restrictions, price controls, potentially burdensome taxation and/or
other restrictive government actions.
CERTAIN ANTI-TAKEOVER EFFECTS. Certain provisions of the Company's Amended
and Restated Certificate of Incorporation (the "Corn Products Charter") and the
Company's By-Laws (the "Corn Products By-Laws") and of the Delaware General
Corporation Law (the "DGCL") may have the effect of delaying, deterring or
preventing a change in control of the Company not approved by the Corn Products
Board. These provisions include (i) a classified Board of Directors, (ii) a
requirement of the unanimous consent of all stockholders for action to be taken
without a meeting, (iii) a requirement that special meetings of stockholders be
called only by the Chairman of the Board or the Board of Directors, (iv) advance
notice requirements for stockholder proposals and nominations, (v) limitations
on the ability of stockholders to amend, alter or repeal the Corn Products
By-Laws and certain provisions of the Corn Products Charter, (vi) authorization
for the Corn Products Board to issue without stockholder approval preferred
stock with such terms as the Board of Directors may determine and (vii)
authorization for the Corn Products Board to consider the interests of
creditors, customers, employees and other constituencies of the Corporation and
its subsidiaries and the effect upon communities in which the Corporation and
its subsidiaries do business, in evaluating proposed corporate transactions.
With certain exceptions, Section 203 of the
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DGCL ("Section 203") imposes certain restrictions on mergers and other business
combinations between the Company and any holder of 15% or more of the Corn
Products Common Stock. In addition, the Company has adopted a stockholder rights
plan (the "Rights Plan"). The Rights Plan is designed to protect stockholders in
the event of an unsolicited offer and other takeover tactics which, in the
opinion of the Corn Products Board, could impair the Company's ability to
represent stockholder interests. The provisions of the Rights Plan may render an
unsolicited takeover of the Company more difficult or less likely to occur or
might prevent such a takeover.
These provisions of the Corn Products Charter and Corn Products By-Laws,
the DGCL and the Rights Plan could discourage potential acquisition proposals
and could delay or prevent a change in control of the Company, although such
proposals, if made, might be considered desirable by a majority of the Company's
stockholders. Such provisions could also make it more difficult for third
parties to remove and replace the members of the Corn Products Board. Moreover,
these provisions could diminish the opportunities for a stockholder to
participate in certain tender offers, including tender offers at prices above
the then-current market value of Corn Products Common Stock, and may also
inhibit increases in the market price of Corn Products Common Stock that could
result from takeover attempts or speculation.
LIMITED RELEVANCE OF HISTORICAL FINANCIAL INFORMATION. The Company's
historical financial information may not necessarily reflect the results of
operations, financial position and cash flows of the Company in the future or
the results of operations, financial position and cash flows had the Company
operated as a separate stand-alone entity during the periods presented.
RELIANCE ON MAJOR CUSTOMERS. Historically, Bestfoods' worldwide branded
foods business has been one of the Company's largest customers, accounting for
approximately 12.5% of total sales in 1997. The Company and Bestfoods have
entered into a two-year Master Supply Agreement, which sets forth the terms
under which the Company will sell its products to Bestfoods. In addition,
approximately 15% of the worldwide sales of the Corn Refining Business in 1997
represented sales of high fructose corn syrup to international, regional and
local companies engaged in the soft drink industry, primarily in North America.
If Bestfoods were not to continue to purchase products from the Company or the
Company's soft drink customers were to substantially decrease their purchases,
the business of the Company might be materially adversely affected.
INDEBTEDNESS. The Company is party to a $340 million credit facility with a
number of financial institutions (the "Credit Facility"). In addition, the
Company may incur additional indebtedness from time to time to meet working
capital requirements and for capital expenditures. In addition to creating debt
service obligations for the Company, the terms of the Credit Facility will
contain customary affirmative and negative covenants that will, among other
things, require the Company to satisfy certain financial tests and maintain
certain financial ratios.
The Company's ability to service this anticipated indebtedness will depend
on future operating performance, which will be affected by prevailing economic
conditions and financial and other factors, certain of which are beyond the
Company's control. If the Company were unable to service its
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indebtedness, it would be forced to pursue one or more alternative strategies
such as reducing its capital expenditures, selling assets, restructuring or
refinancing its indebtedness or seeking additional equity capital (which may
substantially dilute the ownership interest of existing holders of Corn Products
common stock). There can be no assurance that any of these strategies could be
effected on satisfactory terms, if at all.
FORWARD-LOOKING STATEMENTS
This Form 10-K includes or may include certain forward-looking statements
that involve risks and uncertainties. This Form 10-K contains certain
forward-looking statements concerning the Company's financial position, business
strategy, budgets, projected costs and plans and objectives of management for
future operations as well as other statements including words such as
"anticipate," "believe," "plan," "estimate," "expect," "intend," and other
similar expressions. Although the Company believes its expectations reflected in
such forward-looking statements are based on reasonable assumptions,
stockholders are cautioned that no assurance can be given that such expectations
will prove correct and that actual results and developments may differ
materially from those conveyed in such forward-looking statements. Important
factors that could cause actual results to differ materially from the
expectations reflected in the forward-looking statements herein include
fluctuations in worldwide commodities markets and the associated risks of
hedging against such fluctuations; fluctuations in aggregate industry supply and
market demand; general economic, business and market conditions in the various
geographic regions and countries in which the Company manufactures and sells its
products, including fluctuations in the value of local currencies; costs or
difficulties related to the establishment of the Company as an independent
entity; and increased competitive and/or customer pressure in the corn refining
industry. Such forward-looking statements speak only as of the date on which
they are made and the Company does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date of
this Form 10-K. If the Company does update or correct one or more
forward-looking statements, investors and others should not conclude that the
Company will make additional updates or corrections with respect thereto or with
respect to other forward-looking statements. See "Risk Factors" above.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference from Annual Report, pages 14-31, sections
entitled "Independent Auditors' Report," and "Financial Statements."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information contained under the headings "Board of Directors," "Matters
To Be Acted Upon - Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" in the Company's definitive proxy statement for
the Company's 1998 Annual Meeting of Stockholders (the "Proxy Statement") and
the information contained under the heading "Executive Officers of the
Registrant" in Item 1 hereof is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information contained under the heading "Executive Compensation" in the
Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information contained under the heading "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the heading "Certain Relationships and
Related Transactions" in the Proxy Statement is incorporated herein by
reference.
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PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
Item 14(a)(1) Consolidated Financial Statements and Schedules
Incorporated by reference from Annual Report, pages 14-31, sections
entitled "Independent Auditors' Report," and "Financial Statements."
Item 14(a)(2) Financial Statement Schedules
All financial statement schedules have been omitted either because the
information is not required or is otherwise included in the financial statements
and notes thereto.
Item 14(a)(3) Exhibits
The Exhibits set forth in the accompanying Exhibit Index are filed as a
part of this report. The following is a list of each management contract or
compensatory plan or arrangement required to be filed as an Exhibit to this
report:
Exhibit Number
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
Item 14(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended December
31, 1997.
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25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 30th day of
March, 1998.
CORN PRODUCTS INTERNATIONAL, INC.
By: * Konrad Schlatter
------------------------------------
Konrad Schlatter
Chairman and Chief Executive 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, in the capacities indicated and on the 30th of March, 1998.
Signature Title
* Konrad Schlatter Chairman and Chief Executive Officer
- ---------------------------------
Konrad Schlatter
/s/ James W. Ripley Chief Financial Officer
- ---------------------------------
James W. Ripley
/s/ Jack Fortnum Comptroller
- ---------------------------------
Jack Fortnum
* William C. Ferguson Director
- ---------------------------------
William C. Ferguson
* Bernard H. Kastory Director
- ---------------------------------
Bernard H. Kastory
* Samuel C. Scott Director
- ---------------------------------
Samuel C. Scott
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26
* Alfred C. DeCrane, Jr. Director
- ---------------------------------
Alfred C. DeCrane, Jr.
* Richard G. Holder Director
- ---------------------------------
Richard G. Holder
* Ignacio Aranguren-Castiello Director
- ---------------------------------
Ignacio Aranguren-Castiello
* William S. Norman Director
- ---------------------------------
William S. Norman
* Clifford B. Storms Director
- ---------------------------------
Clifford B. Storms
*By: /s/ Marcia E. Doane
-----------------------------
Marcia E. Doane
Attorney-in-fact
(Being the principal executive officers, the principal financial and accounting
officers and a majority of the directors of Corn Products International, Inc.)
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EXHIBIT NO. DESCRIPTION
2.1 Distribution Agreement dated December 1, 1997, between the Company
and Bestfoods
3.1* Amended and Restated Certificate of Incorporation of the Company,
filed as Exhibit 3.1 to the Company's Registration Statement on Form
10, File No. 1-13397
3.2* Amended By-Laws of the Company, filed as Exhibit 3.2 to the
Company's Registration Statement on Form 10, File No. 1-13397
4.1* Rights Agreement dated November 19, 1997 between the Company and
First Chicago Trust Company of New York, filed as Exhibit 1 to the
Company's Registration Statement on Form 8-A12B, File No. 001-
13397
4.2* Certificate of Designation for the Company's Series A Junior
Participating Preferred Stock, filed as Exhibit 1 to the Company's
Registration Statement on Form 8-A12B, File No. 001-13397
4.3 5-Year Revolving Credit Agreement dated December 17, 1997 among
the Company and the agents and banks named therein
10.1 Master Supply Agreement dated January 1, 1998 between the Company
and Bestfoods
10.2 Tax Sharing Agreement dated December 1, 1997 between the Company
and Bestfoods
10.3 Tax Indemnification Agreement dated December 1, 1997 between the
Company and Bestfoods
10.4 Debt Agreement dated December 1, 1997 between the Company and
Bestfoods
10.5 Transition Services Agreement dated December 1, 1997 between the
Company and Bestfoods
10.6 Master License Agreement dated January 1, 1998 between the Company
and Bestfoods
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28
EXHIBIT NO. DESCRIPTION
10.7* Employee Benefits Agreement dated December 1, 1997 between the
Company and Bestfoods, filed as Exhibit 4.E to the Company's
Registration Statement on Form S-8, File No. 333-43525
10.8 Access Agreement dated January 1, 1998 between the Company and
Bestfoods
10.9* Stock Incentive Plan of the Company, filed as Exhibit 4.E to the
Company's Registration Statement on Form S-8, File No. 333-43525
10.10 Deferred Stock Unit Plan of the Company
10.11 Form of Severance Agreement entered into by each of K. Schlatter, S.C.
Scott, E.J. Northacker, J.W. Ripley and F.J. Kocun (the "Named
Executive Officers")
10.12 Letter Agreement dated December 12, 1997 between the Company and
E.J. Northacker
10.13 Letter Agreement dated December 12, 1997 between the Company and
F.J. Kocun
10.14 Form of Indemnification Agreement entered into by each
of the members of the Company's Board of Directors and
the Named Executive Officers
10.15 Deferred Compensation Plan for Outside Directors of the Company
10.16 Supplemental Executive Retirement Plan
10.17 Executive Life Insurance Plan
10.18 Deferred Compensation Plan
13.1 1997 Annual Report
21.1 Subsidiaries of the Company
23.1 Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney
27.1 Financial Data Schedule
27.2 Financial Data Schedule
27.3 Financial Data Schedule
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* Incorporated herein by reference.
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