-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CXP3sEHE1Y4BYLCJJoymIT8ZYhpocSaBpmgbShkvzSsyx8QLSQWMxcncLRzw9eED EXz4QLaW7Oa0wsNhK1t29A== 0000352947-01-500007.txt : 20010702 0000352947-01-500007.hdr.sgml : 20010702 ACCESSION NUMBER: 0000352947-01-500007 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENGELHARD CORP CENTRAL INDEX KEY: 0000352947 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 221586002 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-08142 FILM NUMBER: 1672874 BUSINESS ADDRESS: STREET 1: 101 WOOD AVENUE CITY: ISELIN STATE: NJ ZIP: 08830 BUSINESS PHONE: 9082055000 MAIL ADDRESS: STREET 1: 101 WOOD AVENUE CITY: ISELIN STATE: NJ ZIP: 08830 11-K 1 sal00-11k.txt ENGELHARD SALARY PLAN SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE --- SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 or --- TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from _____ to _____ _______________ SALARY DEFERRAL SAVINGS PLAN OF ENGELHARD CORPORATION ----------------------------------------------------- (Full title of the plan) ENGELHARD CORPORATION (Exact name of issuer as specified in its charter) 101 WOOD AVENUE, ISELIN, NEW JERSEY 08830 - ----------------------------------- --------- (Address of principal executive offices) (Zip code) DELAWARE 22-1586002 - ------------------------------- ---------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 1 Salary Deferral Savings Plan of Engelhard Corporation Table of Contents Description Page ----------- ---- Report of Independent Public Accountants 3 Statement of Net Assets Available for Benefits 4 at December 31, 2000 and 1999 Statement of Changes in Net Assets Available for Benefits 5 for the year ended December 31, 2000 Notes to Financial Statements 6-12 Supplemental Schedule Schedule of Assets Held for Investment Purposes 13 at December 31, 2000 Schedule of Reportable Transactions 14 Consent of Independent Public Accountants 15 2 Report of Independent Public Accountants ---------------------------------------- To the Pension and Employee Benefit Committee of Engelhard Corporation: We have audited the accompanying statements of net assets available for benefits of the Salary Deferral Savings Plan of Engelhard Corporation (the "Plan") as of December 31, 2000 and 1999 and the related statement of changes in net assets available for benefits for the year ended December 31, 2000. These financial statements and the supplemental schedule referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about wether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principals used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits as of December 31, 2000 and 1999, and the changes in net assets available for benefits for the year ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Assets Held for Investment Purposes and Reportable Transactions are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements as of and for the year ended December 31, 2000, and in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP New York, New York June 26, 2001 3 Salary Deferral Savings Plan of Engelhard Corporation Statement of Net Assets Available for Benefits At December 31, 2000 and 1999 2000 1999 ---- ---- Assets - ------ Investments at fair value $196,171,485 $193,307,499 Receivables: Participant Contributions 778,356 887,229 Employer Contributions 224,468 259,088 ------------ ------------ Total Receivables $ 1,002,824 $ 1,146,317 ------------ ------------ Net Assets Available for Benefits $197,174,309 $194,453,816 ============ ============ See Accompanying Notes to Financial Statements 4 Salary Deferral Savings Plan of Engelhard Corporation Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 2000 2000 ---- Additions: Net Investment Income: Dividends $ 10,838,559 Interest 2,350,141 ------------ Total Investment Income 13,188,700 Contributions: Participant 13,504,154 Employer 3,062,443 Rollover 1,068,735 ------------ Total Contributions 17,635,332 Net Realized Gain on Sale of Investments 143,839 Unrealized Depreciation of Investments (5,411,357) ------------ Total Additions 25,556,514 Deductions: Distributions 17,183,303 Other Expenses 18,936 Asset Transfer 5,633,782 -------------- Total Deductions 22,836,021 Net Increase 2,720,493 Net Assets Available for Benefits at 194,453,816 Beginning of Year ------------ Net Assets Available for Benefits at $197,174,309 End of year ============= See Accompanying Notes to Financial Statements 5 Notes to Financial Statements Note 1 - Description of the Plan The Salary Deferral Savings Plan of Engelhard Corporation (the Plan), effective September 1, 1989 is designed to provide eligible employees of Engelhard Corporation (the Company) an opportunity to save part of their earnings by having the Company reduce their compensation and contribute the amount of the reduction to the Plan on a tax deferred and/or post-tax basis. The following plan description provides only general information. Participants of the Plan should refer to the Plan Document for a more complete description of plan provisions. Eligibility ----------- Except as specifically included or excluded by the Board of Directors of the Company (the Board), United States salaried employees of the Company and its wholly-owned (directly or indirectly) domestic subsidiaries and all non- collectively bargained hourly employees are eligible to participate in the Plan. Contributions - ------------- The Plan permits eligible employees participating in the Plan the opportunity to defer on a pretax basis up to 15 percent of their compensation, as defined, subject to certain restrictions and limitations, and to have that amount contributed to the Plan. Employees may also contribute, subject to certain restrictions and limitations, up to 10 percent of compensation to the Plan on a post-tax basis. Matching Contributions - ---------------------- The Company will contribute, on a monthly basis, subject to certain limitations and exclusions, either cash or common stock of the Company in an amount equal to 50 percent of the first 6 percent contributed by the Participants. Participants must have completed one year of service to be eligible for a matching contribution. Investments - ----------- All contributions to the Plan are held and invested by Vanguard Fiduciary Trust Company (the Trustee). The Trustee maintains fifteen separate investment funds within the Plan: a) The Company Stock Fund consists of assets invested or held for investment in the common stock of the Company. In the event the assets cannot be immediately invested in Company common stock, the funds are invested in short-term securities pending investment in Company common stock. b) The Fixed Income Fund consists of assets invested in shares of the Vanguard Retirement Savings Trust. In the event the assets cannot be immediately invested in such shares or deposited as specified above, the assets are invested in direct obligations of the United States Government or agencies thereof or in obligations guaranteed as to the payment of principal and interest by the United States Government. 6 c) The Windsor II Fund consists of assets invested in the Vanguard Windsor II fund, which invests primarily in stocks which seeks long-term growth and income from dividends. d) The Windsor Growth Fund consists of assets invested in the Vanguard Windsor Fund, which invests primarily in common stocks for the purpose of realizing long-term growth of capital and income. e) The Balanced Fund consists of assets invested in the Vanguard Asset Allocation Fund, which invests in stocks, bonds and cash reserves for the purpose of maximizing long- term total return with less volatility than a portfolio of common stock. f) The Equity Index Fund consists of assets invested in the Vanguard Growth and Income Portfolio, which invests primarily in common stocks for the purpose of realizing a total return greater than the Standard & Poor's 500 Index while maintaining fundamental investment characteristics similar to such Index. g) The International Growth Fund consists of assets invested in shares of the Vanguard International Growth Portfolio or such other mutual fund or funds which invest primarily in common stocks of companies based outside the United States that have above-average growth potential for the purpose of realizing long-term capital growth. h) The Small Cap Fund consists of assets invested in shares of the Vanguard Index Trust - Small Cap Stock Portfolio or such other mutual fund or funds which invest primarily in common stocks of small-sized companies for the purpose of providing a comparatively low-cost method of passively capturing the investment returns of small-sized companies and attempting to provide investment results that parallel the performance of the unmanaged Russell 2000 Small Stock Index. i) The Short-Term Bond Fund consists of assets invested in shares of the Vanguard Fixed Income Fund or Short-Term Corporate Portfolio of the Vanguard Fixed Income Securities Fund or such other mutual fund or funds which invest primarily in relatively short maturity investment-grade bonds for the purpose of providing a level of current income consistent with a two to three year average maturity while helping to preserve capital. j) The Prime Cap Fund consists of assets invested in the Vanguard Prime Cap fund and seeks long-term growth of capital. k) The Life Strategy Growth Fund consists of assets invested in the Vanguard Life Strategy Growth Portfolio. This fund invests in other Vanguard mutual funds representing a combination of stocks, bonds and reserves in order to provide growth of capital. 7 l) The Life Strategy Income Fund consists of assets invested in the Vanguard Life Strategy Income Portfolio. This fund invests in other Vanguard mutual funds representing a combination of stocks, bonds and reserves in order to provide current income. m) The Life Strategy Conservative Growth Fund consists of assets invested in the Vanguard Life Strategy Conservative Growth Portfolio. This fund invests in other Vanguard mutual funds representing a combination of stocks, bonds, and reserves in order to provide current income and a low to moderate growth of capital. n) The Vanguard U.S. Growth Portfolio seeks to provide long-term capital appreciation by investing in common stocks of companies with above-average growth potential for the purpose of seeking long-term capital growth. o) The Life Strategy Moderate Growth Fund consists of assets invested in the Vanguard Life Strategy Moderate Growth Portfolio. This fund invests in other Vanguard mutual funds representng a combination of stocks, bonds and reserves in order to provide growth of capital and a reasonable level of current income. Participants have the right to elect, subject to restrictions, the investment fund or funds in which their contributions are invested. All matching contributions are initially invested in the Company Stock Fund. The Participants matching contributions are initially restricted and become unrestricted at the rate of 25 percent per year. Once unrestricted, funds may be moved to one of the other investment funds. The number of Participants in each fund was as follows at December 31: Participants 2000 1999 ------------ ----- ----- Company Stock Fund 2,541 2,620 Fixed Income Fund 906 1,031 Windsor II Fund 425 480 Growth Fund (Windsor) 1,109 1,287 Balanced Fund 866 930 Equity Index Fund 1,222 1,230 International Growth Fund 540 485 Small Cap Fund 445 395 Short-Term Bond Fund 185 216 Prime Cap Fund 774 514 Life Strategy Growth Fund 365 342 Life Strategy Income Fund 61 67 Life Strategy Conservative Growth Fund 107 103 Vanguard U.S. Growth Portfolio 919 762 Life Strategy Moderate Growth Fund 264 249 The total number of Participants in the Plan was less than the sum of the number of Participants shown above because many were participating in more than one fund. 8 The number of units representing Participant interests in each fund and the related net asset value per unit were as follows at December 31: 2000 1999 Value Value Units per Unit Units per Unit ----- -------- ----- -------- Company Stock Fund 1,589,286 $34.22 1,479,811 $31.75 Fixed Income Fund 27,672,469 1.00 29,377,686 1.00 Windsor II Fund 165,533 27.20 184,244 24.97 Windsor Growth Fund 1,582,865 15.29 1,695,439 15.17 Balanced Fund 607,210 23.67 639,661 23.80 Equity Index Fund 647,687 32.06 679,546 37.08 International Growth Fund 219,078 18.87 194,569 22.49 Small Cap Fund 203,583 19.44 145,196 23.60 Short Term Bond Fund 155,803 10.65 174,132 10.53 Prime Cap Fund 268,374 60.38 157,036 62.07 Life Strategy Growth Fund 166,702 19.59 163,296 21.41 Life Strategy Income Fund 33,787 13.00 39,779 12.82 Life Strategy Conservative Growth Fund 68,373 14.70 75,379 15.10 Vanguard U.S. Growth Portfolio 377,168 27.65 265,236 43.53 Life Strategy Moderate Growth Fund 161,238 17.24 160,284 18.18 Included in the Statement of Net Assets Available for Benefits are non-participant directed funds that are included in the Company Stock Fund. These amounts represent the restricted portion of the employee matching contribution. The following describes the change in the balance during the year ended December 31, 2000. Balance @ 12/31/99 $8,548,571 Dividends 166,103 Appreciation 1,179,372 Contributions 3,062,443 Transfer to unrestricted (2,595,152) Distributions (505,644) Other (117,499) ---------- Balance @ 12/31/00 $9,738,194 Vesting - ------- Participants at all times have a fully vested and non-forfeitable interest in their contributions and in the matching contributions allocated to their account. 9 Loan Provision - -------------- Participants may borrow from their Fund accounts a minimum of $1,000 up to a maximum equal to 50% of their Fund balance or $50,000, whichever is less. The loans are secured by the balance in the Participant's accounts and bear interest at a reasonable rate as determined by the Company in accordance with applicable laws and regulations. Principal and interest is paid ratably through monthly payroll deductions. Loans are generally five years in duaration unless the loan is for the purchase of a primary residence in which case the term can be up to ten years. Termination - ----------- The Company, although it expects and intends to continue the Plan indefinitely, has reserved the right of the Board to terminate or amend the Plan. Distributions and Withdrawals - ----------------------------- Upon termination of employment, as provided in the Plan Document, participants generally have the option of taking a distribution, rolling the balance over into another qualified plan, or leaving the money in the plan until retirement. After-tax contributions may be withdrawn at any time however the earnings on the contribution will be subject to current income taxes as well as a penalty for early withdrawal unless the Participant has reached the age of 59 1/2. All distributions are made in the form of cash except the balance in the Engelhard Company Stock Fund which may be made in the form of shares at the Participant's discretion. The Plan under certain circumstances permits hardship withdrawals. The hardship withdrawals are only made in accordance with IRS guidlines and must be approved in advance by the Employee Benefit Plans Administrative Committee. Note 2 - Accounting Policies The accounts of the Plan are maintained on an accrual basis. Purchases and sales of investments are reflected on a trade date basis. Assets of the Plan are valued at fair value. Gains and losses on distributions to Participants and sales of investments are based on average cost. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results may differ from those estimates. The Plan provides for various investment options in any combination of stocks or mutual funds. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect Participants' account balances and the amounts reported in the Statement of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits. Certain prior year balances have been reclassified to conform to current years presentation. 10 Note 3 - Income Tax Status The Plan and the Trust created thereunder are intended to qualify under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended (the Code) and the Plan includes a cash or deferred arrangement intended to meet the requirements of Section 401(k) of the Code. The Internal Revenue Service issued a favorable determination letter dated February 28, 1996 as to the Plan's qualified status under the Code. Amounts contributed to and earned by the Plan are not taxed to the employee until a distribution from the Plan is made. In addition, the unrealized appreciation on any shares of common stock of the Company distributed to an employee is not taxed until the time of disposition of such shares. The Plan has been amended since receiving the determination letter. However, the Plan Administrator believes the Plan is designed and is currently operating in compliance with the Internal Revenue Code. Note 4 - Administrative Expenses Expenses are incurred at either the fund level or the Plan level. All expenses incurred by the fund (commissions, management fees, etc.) are paid out of investor assets and are therefore netted in unrealized appreciation/depreciation of investments in the statement of changes in net assets available for benefits. Loan administration expenses are included in other expenses in the statement of changes in net assets available for benefits. Commissions on the purchase of Engelhard Corporation stock incurred when such purchases are made in the stock market are netted in unrealized appreciation/drepreciation of investments in the statement of changes in net assets avaialable for benefits. The Company pays all other plan expenses. Note 5 - Concentrations of Credit Risk Investments in securities are generally exposed to various risks, such as interest rate, credit, and overall market volatility risks. Financial instruments which potentially subject the plan to concentration of credit risk consists principally of investments in the Engelhard Corporation Stock Fund. The plan limits the concentration of credit risk by allowing participants the opportunity to invest in an array of mutual funds offered by the Vanguard Group. Note 6 - Investments Investments in the common stock of the Company are valued at the readily-available, quoted market price as of the valuation date and investments in Vanguard Funds are valued based on the quoted net asset value (redemption value) of the respective investment fund as of the valuation date. For investments exceeding 5% of Net Assets see schedule of investments. 11 Note 7 - Related Party Transactions For the 2000 plan year, the Company transferred 172,780 treasury stock shares (representing a contribution dollar amount of $3,062,443) to Vanguard to fund the employer match. The number of shares transferred each month represented the employer matching contribution divided by the closing market price on the day the contribution was remitted. Note 8 - Voluntary Compliance Resolution Program During 1999, the Company discovered possible compliance violations with certain administrative practices of the Plan. The Company has filed under a Voluntary Compliance Resolution Program (VCRP) with the Internal Revenue Service on behalf of the Plan. The compliance issues involve failure to distribute required minimum distributions from the Plan with respect to certain Participants who have reached the age of 70 1/2. The issue effected approximately 10 Participants in the Plan. The VCRP is pending approval from the Internal Revenue Service. The Company has taken corrective actions to prevent any further occurrences of this issue. The Company and Plan Administrator do not believe the issues will have a material effect on the financial statements. Note 9 - Sale of Metal Joining Business On September 30, 2000 the Company sold their Metal Joining Business to Wolverine Tube, Inc. In connection with the sale, $5,633,782 in assets were transferred to the Wolverine Tube, Inc. savings plan. Note 10 - Ommitted Schedules and Information The Plan has not commitments or leases in default, as defined by ERISA Section 2520.103(b)(3)(E) for the year ended December 31, 2000. 12 Salary Deferral Savings Plan of Engelhard Corporation Schedule of Assets Held for Investment Purposes at December 31, 2000 (C)Description of (B)Identity of Investment Including Issue, Borrower, Maturity Date, Rate of (A) Lessor, or Interest, Collateral, Par (E)Current Similiar Party or Maturity Value (D)Cost Value - --- -------------- --------------------------- ------------ -------------- * Vanguard Engelhard Corpration Company Stock Fund $45,225,293 $ 54,062,664** * Vanguard Fixed Income Fund 27,587,279 27,587,279** (Retirement Savings Trust) * Vanguard Windsor II Fund 4,730,614 4,465,312 * Vanguard Growth Fund 24,227,428 24,114,366** (Windsor Fund) * Vanguard Balanced Fund 12,426,637 14,312,032** (Asset Allocation Fund) * Vanguard Equity Index Fund 17,518,242 20,660,370** (Growth and Income Portfolio) * Vanguard International Growth 4,081,034 4,105,544 Portfolio * Vanguard Small Cap Fund 4,338,536 3,933,214 * Vanguard Short Term Bond Fund 1,651,110 1,648,848 * Vanguard Life Strategy Growth 3,127,458 3,231,574 Portfolio * Vanguard Prime Cap Fund 16,089,909 16,113,585** * Vanguard Life Strategy Income Portfolio 436,483 435,850 * Vanguard Life Strategy Conservative 984,310 999,429 Growth Portfolio * Vanguard U.S. Growth Fund 13,432,730 10,343,902** * Vanguard Life Strategy Moderate 2,707,682 2,756,914 Growth Portfolio *Promissory notes from Participants 7,400,602 7,400,602 having interest at rates of 6.7% to 10.5% ------------ ------------ Total $185,965,347 $196,171,485 ============ ============ **Market value is greater than 5% of Net Assets *Represents party-in-interest 13 Engelhard Corpoation Salary Deferral Savings Plan Schedule of Reportable Transactions* Year Ended December 31, 2000 Identity of Party Description of Assets (include Purchase Selling Historical Cost Current Value Involved interest rate and maturity in Price Price of Asset of Asset Historical the case of a loan) on Transactions Gain(Loss) - ----------------- ------------------------------ ----------- --------- --------------- ----------------- ---------- Vanguard Vanguard Growth and Income $ 5,756,893 $ 5,756,893 Vanguard Vanguard Growth and Income $ 6,897,502 $ 5,605,740 6,897,502 $1,291,762 Vanguard Vanguard PRIMECAP Fund 12,428,182 12,428,182 Vanguard Vanguard PRIMECAP Fund 4,968,357 4,484,509 4,968,357 483,848 Vanguard Vanguard U.S. Growth 7,637,963 7,637,963 Vanguard Vanguard U.S. Growth 3,959,735 3,604,838 3,959,735 354,897 Vanguard Vanguard Windsor Fund 6,168,468 6,168,468 Vanguard Vanguard Windsor Fund 8,058,588 8,248,195 8,058,588 (189,607) Vanguard Vanguard Retir. Savings Trust 16,759,082 16,759,082 Vanguard Vanguard Retir. Savings Trust 18,442,409 18,442,409 18,442,409 N/A Engelhard Corp. Stock Fund 18,181,120 18,181,120 N/A Engelahrd Corp. Stock Fund 15,801,098 15,010,577 15,801,098 790,521 *Transactions or a series of transactions in excess of 5% of the current value of the Plan's assets as of the beginning of the plan year as defined in section 2520.103-6 of the Department of Labor Rules and Regulations for Reporting and and Disclosure under ERISA.
14 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ------------------------------------------ As independent public accountants, we hereby consent to the incorporation by reference of our report included in this Form 11-K, into the Company's previously filed Registration Statements File Nos.:2-72830 2-81559 2-84477 2-89747 33-28540 33-37724 33-40365 33-40338 33-43934 33-65990 333-02643 333-71439 333-39570 /s/ Arthur Andersen L.L.P. New York, New York June 26, 2001 15 Signature --------- Form 11-K Salary Deferral Savings Plan of Engelhard Corporation Pursuant to the requirements of the Securities and Exchange Act of 1934, the Pension and Employee Benefit Plans Committee of Engelhard Corporation has duly caused this Form 11-K to be signed on its behalf by the undersigned, thereunto duly authorized, in Iselin, New Jersey on this 26th day of June, 2001. /s/ John C. Hess ------------- By: John C. Hess Secretary to the Committee and Vice President of Human Resources 16 -----END PRIVACY-ENHANCED MESSAGE-----