-----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, A8Ddm4wzJ59LpNPDxiUTHkZxJkOD0ngtqIVwGM73xNwrYqSb3ZJzWmp/o/CjFeiR fBGGU/bVHNhGsrkwohMMmA== 0000352947-99-000015.txt : 19990629 0000352947-99-000015.hdr.sgml : 19990629 ACCESSION NUMBER: 0000352947-99-000015 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990628 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: 99653918 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 12/98 FORM 11-K ATTAPULGUS,GA HOURLY SAVINGS 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, 1998 TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE - --- SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from _____ to _____ ------------------ ENGELHARD CORPORATION SAVINGS PLAN FOR HOURLY PAID EMPLOYEES AT ATTAPULGUS, GEORGIA ------------------------------------------------------------ (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 Engelhard Corporation Savings Plan for Hourly Paid Employees at Attapulgus, Georgia Table of Contents Page Description ---- ----------- Report of Independent Accountants 3 Statements of Financial Condition 4-5 at December 31, 1998 Statements of Income and Changes in 6-7 Plan Equity for the year ended December 31, 1998 Notes to Financial Statements 8-14 Supplemental Schedule Schedule of Investments at December 31, 1998 15 Consent of Independent Public Accountants 16 2 Report of Independent Accountants --------------------------------- To the Pension and Employee Benefits Plans Committee of Engelhard Corporation: In our opinion, the financial statements of the Engelhard Corporation Savings Plan for Hourly Employees at Attapulgus, Georgia listed in the table of contents on page 2 of this Form 11-K present fairly, in all material respects, the financial condition of the Plan at December 31, 1998, and the income and changes in plan equity for year then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule listed in the table of contents on page 2 of this Form 11-K is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PRICEWATERHOUSECOOPERS L.L.P. New York, New York June 18, 1999 3 Engelhard Corporation Savings Plan for Hourly Paid Employees at Attapulgus, Georgia Statement of Financial Condition at December 31, 1998 (Page 1 of 2) Windsor II Windsor Company Stock Fixed Income Growth Growth Balanced Equity Index Fund Fund Fund Fund Fund Fund ------------- ------------ ---------- -------- --------- ------------ Assets: - ------ Investments, at fair value (combined cost of $1,082,012) $771,676 $76,844 $8,007 $5,063 $64,440 $131,602 Contributions receivable: Participants 15,983 2,461 584 211 2,150 1,755 Engelhard Corporation 8,985 - - - - - Promissory notes from participants - - - - - - -------- ------- ------ ------ ------- -------- Total assets $796,644 $79,305 $8,591 $5,274 $66,590 $133,357 ======== ======= ====== ====== ======= ======== Plan equity: Plan equity $796,644 $79,305 $8,591 $5,274 $66,590 $133,357 ======== ======= ====== ====== ======= ======== See Accompanying Notes to Financial Statements
4 Engelhard Corporation Savings Plan for Hourly Paid Employees at Attapulgus, Georgia Statement of Financial Condition at December 31, 1998 (Page 2 of 2) Life Life Strategy Life Strategy Conservative Vanguard Strategy Small Cap Growth Growth US Growth Moderate Loan Fund Fund Fund Fund Growth Fund Fund Combined --------- -------- ------------ --------- ----------- -------- ---------- Assets: - ------ Investments, at fair value (combined cost of $1,082,012) $7 $2,462 $324 $5,897 $3,764 $ - $1,070,086 Contributions receivable: Participants 319 76 94 590 - 24,223 Engelhard Corporation - - - - - - 8,985 Promissory notes from participants - - - - - 115,352 115,352 -- ------ ---- ------ ------ -------- ---------- Total assets $7 $2,781 $400 $5,991 $4,354 $115,352 $1,218,646 == ====== ==== ====== ====== ======== ========== Plan equity: Plan equity $7 $2,781 $400 $5,991 $4,354 $115,352 $1,218,646 == ====== ==== ====== ====== ======== ========== See Accompanying Notes to Financial Statements
5 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1998 (Page 1 of 2) Windsor II Windsor Company Stock Fixed Income Growth Growth Balanced Equity Index Fund Fund Fund Fund Fund Fund ------------- ------------ ---------- -------- -------- ------------ Net investment income: Dividends $ 10,559 $ 3,092 $ 780 $ 434 $ 4,741 $ 4,545 Interest - - - - - - -------- --------- ------ ------ ------- -------- 10,559 3,092 780 434 4,741 4,545 Contributions and other receipts: Participants 101,786 19,893 3,138 1,186 14,718 13,127 Engelhard Corporation 66,826 - - - - - -------- --------- ------ ------ ------- -------- 168,612 19,893 3,138 1,186 14,718 13,127 Net realized gain (loss) on disposition of investments (23,539) - 1 - 219 1,160 Unrealized appreciation (depreciation) of investments (19,028) - (471) (914) 2,332 5,308 Distributions (86,700) (14,393) - - (3,180) (37,258) Transfer from Engelhard Hourly plan 812,283 89,698 - - 73,367 149,481 Transfers (65,543) (18,985) 5,143 4,568 (25,607) (3,006) -------- --------- ------ ------ ------- -------- Change in net assets 796,644 79,305 8,591 5,274 66,590 133,357 Plan equity, beginning of year - - - - - - -------- --------- ------ ------ ------- -------- Plan equity, end of year $796,644 $ 79,305 $8,591 $5,274 $66,590 $133,357 ======== ========= ====== ====== ======= ======== See Accompanying Notes to Financial Statements
6 Engelhard Corporation Savings Plan for Hourly Paid Employees at Attapulgus, Georgia Statement of Income and Changes in Plan Equity at December 31, 1998 (Page 2 of 2) Life Life Strategy Life Strategy Conservative Vanguard Strategy Small Cap Growth Growth US Growth Moderate Loan Fund Fund Fund Fund Growth Fund Fund Combined --------- -------- ------------ --------- ----------- -------- ----------- Net investment income: Dividends $ 2 $ 124 $ 10 $ 367 $ 122 $ - $ 24,776 Interest - - - - - 3,757 3,757 ------- ------ ---- ------ ------ -------- ----------- 2 124 10 367 122 3,757 28,533 Contributions and other receipts: Participants - 2,731 379 587 3,280 12,271 173,096 Engelhard Corporation - - - - - - 66,826 ------- ------ ---- ------ ------ -------- ----------- - 2,731 379 587 3,280 12,271 239,922 Net realized gain (loss) on disposition of investments (311) 55 - - - - (22,415) Unrealized appreciation (depreciation) of investments (1) 177 11 470 188 - (11,928) Distributions - - - - - - (141,531) Transfer from Engelhard Hourly plan 1,236 - - - - - 1,126,065 Transfers (919) (306) - 4,567 764 99,324 - ------- ------ ---- ------ ------ -------- ----------- Change in net assets 7 2,781 400 5,991 4,354 115,352 1,218,646 Plan equity, beginning of year - - - - - - - ------- ------ ---- ------ ------ -------- ----------- Plan equity, end of year $ 7 $2,781 $400 $5,991 $4,354 $115,352 $1,218,646 ======= ====== ==== ====== ====== ======== =========== See Accompanying Notes to Financial Statements
7 Notes to Financial Statements Note 1 - Description of the Plan The Engelhard Corporation Savings Plan for Hourly Paid Employees at Attapulgus, Georgia (the Plan), effective as of April 22, 1998, is designed to provide eligible employees of Engelhard Corporation (the Company) an opportunity to save part of their income by having the Company reduce their compensation and contribute the amount of the reduction to the Plan on a tax deferred basis. The following plan description is provided for general information purposes. Participants of the Plan should refer to the Plan document for more detailed and complete information. Eligibility - ----------- Subject to certain limitations and restrictions, all employees of Engelhard Corporation represented by Local 170 of the United Steel Workers of America are eligible to participate in the Plan. Contributions - ------------- The Plan permits eligible employees participating in the Plan the opportunity to defer 15 percent of their compensation, as defined, subject to certain restrictions and limitations, and have the related taxes deferred. Employees may also contribute 10 percent of their compensation to the plan on a post tax basis. Matching Contributions - ---------------------- The Company will contribute, on a monthly basis and 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 13 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. 8 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 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 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. h) 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. i) 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. j) 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. k) The Life Strategy Moderate Growth Fund consists of assets invested in the Vanguard Life Strategy Moderate Growth Fund. This fund invests in other Vanguard mutual funds representing a combination of stocks, bonds and reserves in order to provide growth of capital and a reasonable level of current income. 9 l) The Prime Cap funds consists of assets invested in the Vanguard Prime Cap fund and seeks long-term growth of capital. m) 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. n) 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. o) 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. The Prime Cap Fund, the International Growth Fund, the Life Strategy Income Fund and the Short Term Bond Fund are not included in The Statement of Financial Condition or The Statement of Income and Changes in Plan Equity due to the fact that there was no activity during the year. 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 and participants are restricted from transferring these contributions to other funds for one year. Participants at their discretion may elect to transfer to another fund their unrestricted balance. Their unrestricted balance is calculated as the sum of all prior year's unrestricted balances plus 25 percent of the prior year's restricted balance after the addition of the prior year's restricted matching contribution. The number of Participants in each fund was as follows at December 31: Participants 1998 - ------------ ---- Company Stock Fund 103 Fixed Income Fund 29 Windsor II Growth Fund 4 Windsor Growth Fund 2 Balanced Fund 26 Equity Index Fund 27 Small Cap Fund 1 Life Strategy Growth Fund 2 Life Strategy Conservative Growth Fund 1 Vanguard U.S. Growth Fund 1 Life Strategy Moderate Growth Fund 2 10 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. The number of units representing Participant interests in each fund and the related net asset value per unit were as follows at December 31: Participant interests Windsor II Windsor Company Stock Fixed Income Growth Growth Balanced Equity Index Small Cap Fund Fund Fund Fund Fund Fund Fund ------------- ------------ ---------- -------- -------- ------------ --------- 1998: Units 24,251 79,305 288 339 2,731 4,335 - Value per unit $32.85 $1.00 $29.85 $15.57 $24.38 $30.76 $21.20 Life Vanguard Life Life Strategy U.S. Strategy Strategy Conservative Growth Moderate Loan Growth Fund Fund Growth Fund -------- ------------ -------- -------- ---- 1998: Units 148 27 160 258 115,352 Value per unit $18.79 $14.71 $37.49 $16.86 $1.00
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. Termination - ----------- Although it expects and intends to continue the Plan indefinitely, the Company has reserved the right of the Board to terminate or amend the Plan. Loan Provision - -------------- The Plan allows Participants who have completed one year of service to borrow funds from their accounts, subject to certain terms and conditions, at a reasonable rate of interest as determined by the Company in accordance with applicable laws and regulations. Distributions and Withdrawals - ----------------------------- All distributions and withdrawals from the Plan are made to Participants in a lump sum cash payment except those amounts distributed from the Company Stock Fund which may, at the Participant's election, be paid in full shares of the Company's Common Stock with cash paid in lieu of fractional shares. 11 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 financial condition and the statement of income and changes in plan equity. 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 Plan has filed for a determination letter with the Internal Revenue service. Amounts contributed to and earned by the Plan are not taxed to the employee until a distribution from the Plan is made. In addition, any 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 administrator believes the Plan is designed and is currently operating in compliance with the Internal Revenue Code. Note 4 - Administrative Expenses All expenses of the Plan are paid for by the Company except for certain loan administration and loan application fees. Investment advisory fees for portfolio management of Vanguard funds are paid directly from fund earnings. Advisory fees are included in the fund expense ratio and will not reduce the assets of the Plan. Brokerage commissions paid to purchase Engelhard Corporation common stock are being charged against each participant's fund unit value. Note 5 - Concentrations of Credit Risk Financial instruments which potentially subject the Plan to concentrations of credit risk consist principally of investment contracts with insurance and other financial institutions. The Plan places its investment contracts with high-credit quality institutions and, by policy, limits the amount of credit exposure to any one financial institution. 12 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 the Vanguard Funds are valued based on the quoted net asset value (redemption value) of the respective investment fund as of the valuation date. The net realized gain (loss) on disposition of investments was computed as follows: Company Fixed Windsor II Windsor Equity Small Stock Income Explorer Growth Balanced Index Cap Net realized gain (loss) Fund Fund Fund Fund Fund Fund Fund ---------- -------- ---------- -------- -------- -------- -------- Year ended December 31, 1998 - Amount realized $164,075 $44,164 $118 $ - $30,003 $45,886 $ 918 Cost-average 187,614 44,164 117 - 29,784 44,726 1,229 Net realized gain (23,539) - 1 - 219 1,160 (311) Life Life Life Strategy Vanguard Strategy Strategy Conservative U.S. Moderate Growth Growth Growth Growth Fund Fund Fund Fund Combined -------- ------------ -------- -------- -------- Amount realized $8,564 $- $- $- $293,728 Cost-average 8,509 - - - 316,143 Net realized gain 55 - - - (22,415)
13 The net unrealized appreciation (depreciation) of investments held was computed as follows: Common Windsor II Windsor Equity Small Net unrealized appreciation Stock Explorer Growth Balanced Index Cap (depreciation) Fund Fund Fund Fund Fund Fund ---------- ---------- -------- -------- -------- -------- Year ended December 31, 1998 - Balance, beginning of year $ - $ - $ - $ - $ - $ - Net change (19,028) (471) (914) 2,332 5,308 (1) Balance, end of year (19,028) (471) (914) 2,332 5,308 (1) Life Life Life Strategy Vanguard Strategy Strategy Conservative U.S. Moderate Growth Growth Growth Growth Fund Fund Fund Fund Combined -------- ------------ -------- -------- ---------- Year ended December 31, 1998 $ - $ - $ - $ - $ - Balance, beginning of year 177 11 470 188 (11,928) Net change 177 11 470 188 (11,928) Balance, end of year
14 Salary Deferral Savings Plan of Engelhard Corporation at Attapulgus, Georgia Schedule of Investments at December 31, 1998 Approximate Cost Market Value ------------ ------------ Common Stock of Engelhard Corporation $ 790,704 $ 771,676 (39,573 shares) Vanguard Retirement Savings Trust 76,844 76,844 Vanguard Windsor Fund 5,977 5,063 Vanguard Asset Allocation Fund 62,108 64,440 Vanguard Growth and Income Portfolio 126,294 131,602 Vanguard Index Trust 6 7 Vanguard Life Strategy Growth Portfolio 2,285 2,462 Vanguard Life Strategy Conservative Growth Portfolio 313 324 Vanguard U.S. Growth Fund 5,427 5,897 Vanguard Life Strategy Moderate Growth Portfolio 3,576 3,764 Vanguard Windsor II Fund 8,478 8,007 ---------- ---------- Total $1,082,012 $1,070,086 15 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- We consent to the incorporation by reference in the registration statement of Engelhard Corporation and Subsidiaries on Form S-8 of our report dated June 18, 1999, on our audit of the financial statements and financial statement schedules of Engelhard Corporation Savings Plan for Hourly Paid Employees at Attapulgus, Georgia as of December 31, 1998, and for the year ended December 31, 1998, which appears in this Form 11-K. /s/ PRICEWATERHOUSECOOPERS L.L.P. New York, New York June 21, 1999 16 Signature --------- Form 11-K Engelhard Corporation Savings Plan for Hourly Paid Employees at Attapulgus, Georgia 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 annual report to be signed on its behalf by the undersigned, thereunto duly authorized, in Iselin, New Jersey on this 28th day of June, 1999. /s/ John C. Hess ------------- By: John C. Hess Secretary to the Committee and Vice President of Human Resources 17 -----END PRIVACY-ENHANCED MESSAGE-----