-----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, HRMDB6wCSpG9ZUzR1yP74Dms0BJrsJL7G3DP45+euZFNDb0CNSIT+xnjeJ6LmKbA 7OFKYaYRqtrqObm3qCY8JA== 0000352947-99-000017.txt : 19990629 0000352947-99-000017.hdr.sgml : 19990629 ACCESSION NUMBER: 0000352947-99-000017 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: 99653925 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 DECEMBER 1998 FORM 11-K 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 ------------------------------------------------------------ (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 Table of Contents Description Page ----------- ---- Report of Independent Accountants 3 Statements of Financial Condition 4-7 at December 31, 1998 and 1997 Statements of Income and Changes in 8-13 Plan Equity for each of the three years in the period ended December 31, 1998 Notes to Financial Statements 14-19 Supplemental Schedule Schedule of Investments at December 31, 1998 and 1997 20-21 Consent of Independent Public Accountants 22 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 Paid Employees 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 1997, and the income and changes in plan equity for each of the three years in the period ended December 31, 1998, 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 audits. We conducted our audits 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 audits provide a reasonable basis for the opinion expressed above. Our audits were 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 audits 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 Statement of Financial Condition at December 31, 1998 (Page 1 of 2) Company Stock Fixed Income Explorer Balanced Equity Index Fund Fund Fund Fund Fund ------------- ------------ -------- ---------- ------------ Assets: - ------ Investments, at fair value (combined cost of $13,462,226) $6,333,511 $2,884,869 $139,009 $1,982,676 $2,551,055 Contributions receivable: Participants 100,948 59,123 9,173 55,972 83,807 Engelhard Corporation 53,907 - - - - Promissory notes from participants - - - - - ---------- ---------- -------- ---------- ---------- Total assets $6,488,366 $2,943,992 $148,182 $2,038,648 $2,634,862 ========== ========== ======== ========== ========== Plan equity: Plan equity $6,488,366 $2,943,992 $148,182 $2,038,648 $2,634,862 ========== ========== ======== ========== ========== See Accompanying Notes to Financial Statements
4 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Financial Condition at December 31, 1998 (Page 2 of 2) Treasury Int'l Growth Money Market Loan Fund Fund Fund Combined ------------- ------------ ---------- ----------- Assets: - ------ Investments, at fair value (combined cost of $13,462,226) $374,434 $61,956 $ - $14,327,510 Contributions receivable: Participants 14,104 4,499 - 327,626 Engelhard Corporation - - - 53,907 Promissory notes from participants - - 1,342,584 1,342,584 ------- ------- ---------- ----------- Total assets $388,538 $66,455 $1,342,584 $16,051,627 ======== ======= ========== =========== Plan equity: Plan equity $388,538 $66,455 $1,342,584 $16,051,627 ======== ======= ========== =========== See Accompanying Notes to Financial Statements
5 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Financial Condition at December 31, 1997 (Page 1 of 2) Company Stock Fixed Income Explorer Balanced Equity Index Fund Fund Fund Fund Fund ------------- ------------ -------- --------- ------------ Assets: - ------ Investments, at fair value (combined cost of $11,274,743) $5,194,943 $2,690,313 $30,561 $1,252,968 $1,580,033 Contributions receivable: Participants 126,573 65,566 6,813 44,945 64,371 Engelhard Corporation 50,380 - - - - Promissory notes from participants 16,531 12,747 249 3,600 4,672 ---------- ---------- ------- ---------- ---------- Total assets $5,388,427 $2,768,626 $37,623 $1,301,513 $1,649,076 ========== ========== ======= ========== ========== Plan equity: Plan equity $5,388,427 $2,768,626 $37,623 $1,301,513 $1,649,076 ========== ========== ======= ========== ========== See Accompanying Notes to Financial Statements
6 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Financial Condition at December 31, 1997 (Page 2 of 2) Treasury Int'l Growth Money Market Loan Fund Fund Fund Combined ------------- ------------ --------- ----------- Assets: - ------ Investments, at fair value (combined cost of $11,274,743) $206,105 $25,669 $ - $10,980,592 Contributions receivable: Participants 12,437 3,023 - 323,728 Engelhard Corporation - - - 50,380 Promissory notes from participants 427 - 974,848 1,013,074 ------- ------- -------- ----------- Total assets $218,969 $28,692 $974,848 $12,367,774 ======== ======= ======== =========== Plan equity: Plan equity $218,969 $28,692 $974,848 $12,367,774 ======== ======= ======== =========== See Accompanying Notes to Financial Statements
7 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) Company Stock Fixed Income Explorer Balanced Equity Index Fund Fund Fund Fund Fund ------------- ------------ ---------- ---------- ------------ Net investment income: Dividends $ 115,818 $ - $ 1,214 $ 145,694 $ 120,562 Interest - 168,898 - - - ---------- ---------- -------- ---------- ---------- 115,818 168,898 1,214 145,694 120,562 Contributions and other receipts: Participants 1,035,283 595,303 81,677 501,917 740,980 Engelhard Corporation 512,260 - - - - ---------- ---------- -------- ---------- ---------- 1,547,543 595,303 81,677 501,917 740,980 Net realized gain (loss) on disposition of investments 19,977 - (896) 58,381 92,694 Unrealized appreciation (depreciation) of investments 701,889 - 7,404 167,743 245,457 Distributions (326,478) (252,340) (1,209) (50,823) (87,374) Transfer to Attapulgus plan (812,283) (89,698) (1,236) (73,367) (149,481) Transfers (146,527) (246,797) 23,605 (12,410) 22,948 ---------- ---------- -------- ---------- ---------- Change in net assets 1,099,939 175,366 110,559 737,135 985,786 Plan equity, beginning of year 5,388,427 2,768,626 37,623 1,301,513 1,649,076 ---------- ---------- -------- ---------- ---------- Plan equity, end of year $6,488,366 $2,943,992 $148,182 $2,038,648 $2,634,862 ========== ========== ======== ========== ========== See Accompanying Notes to Financial Statements
8 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1998 (Page 2 of 2) Treasury Int'l Growth Money Market Loan Fund Fund Fund Combined ------------- ------------ ---------- ---------- Net investment income: Dividends $ 7,428 $ 2,197 $ - $ 392,913 Interest - - 81,325 250,223 -------- ------- ---------- ----------- 7,428 2,197 81,325 643,136 Contributions and other receipts: Participants 138,910 36,692 418 3,131,180 Engelhard Corporation - - - 512,260 -------- ------- ---------- ----------- 138,910 36,692 418 3,643,440 Net realized gain (loss) on disposition of investments (2,987) - - 167,169 Unrealized appreciation (depreciation) of investments 36,942 - - 1,159,435 Distributions (12,941) - (72,097) (803,262) Transfer to Attapulgus plan - - - (1,126,065) Transfers 2,217 (1,126) 358,090 - -------- ------- ---------- ----------- Change in net assets 169,569 37,763 367,736 3,683,853 Plan equity, beginning of year 218,969 28,692 974,848 12,367,774 -------- ------- ---------- ----------- Plan equity, end of year $388,538 $66,455 $1,342,584 $16,051,627 ======== ======= ========== =========== See Accompanying Notes to Financial Statements
9 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1997 (Page 1 of 2) Company Stock Fixed Income Explorer Balanced Equity Index Fund Fund Fund Fund Fund ------------- ------------ ---------- ---------- ------------ Net investment income: Dividends $ 93,111 $ - $ 3,022 $ 95,529 $ 182,975 Interest - 148,198 - - - ---------- ---------- ------- ---------- ---------- 93,111 148,198 3,022 95,529 182,975 Contributions and other receipts: Participants 1,348,868 654,435 36,572 351,546 442,516 Engelhard Corporation 474,449 - - - - ---------- ---------- ------- ---------- ---------- 1,823,317 654,435 36,572 351,546 442,516 Net realized gain (loss) on disposition of investments 16,019 - 3,134 27,519 32,514 Unrealized appreciation (depreciation) of investments (649,382) - (957) 116,502 134,772 Distributions (187,096) (117,930) (1,571) (37,724) (58,578) Transfers (72,533) (147,031) (26,075) (31,268) 30,293 ---------- ---------- ------- ---------- ---------- Change in net assets 1,023,436 537,672 14,125 522,104 764,492 Plan equity, beginning of year 4,364,991 2,230,954 23,498 779,409 884,584 ---------- ---------- ------- ---------- ---------- Plan equity, end of year $5,388,427 $2,768,626 $37,623 $1,301,513 $1,649,076 ========== ========== ======= ========== ========== See Accompanying Notes to Financial Statements
10 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1997 (Page 2 of 2) Treasury Int'l Growth Money Market Loan Fund Fund Fund Combined ------------- ------------ ---------- ---------- Net investment income: Dividends $ 8,828 $ 894 $ - $ 384,359 Interest - - 75,520 223,718 -------- ------- -------- ----------- 8,828 894 75,520 608,077 Contributions and other receipts: Participants 116,654 15,645 - 2,966,236 Engelhard Corporation - - - 474,449 -------- ------- -------- ----------- 116,654 15,645 - 3,440,685 Net realized gain (loss) on disposition of investments 1,005 - - 80,191 Unrealized appreciation (depreciation) of investments (12,244) - - (411,309) Distributions (9,876) - (18,240) (431,015) Transfers 25,080 6,330 215,204 - -------- ------- -------- ----------- Change in net assets 129,447 22,869 272,484 3,286,629 Plan equity, beginning of year 89,522 5,823 702,364 9,081,145 -------- ------- -------- ----------- Plan equity, end of year $218,969 $28,692 $974,848 $12,367,774 ======== ======= ======== =========== See Accompanying Notes to Financial Statements
11 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1996 (Page 1 of 2) Company Stock Fixed Income Explorer Balanced Equity Index Fund Fund Fund Fund Fund ------------- ------------ ---------- ---------- ------------ Net investment income: Dividends $ 62,635 $ - $ 1,156 $ 66,213 $ 73,787 Interest - 115,213 - - - ---------- ---------- ------- -------- -------- 62,635 115,213 1,156 66,213 73,787 Contributions and other receipts: Participants 1,284,511 664,325 16,632 269,975 311,739 Engelhard Corporation 373,690 - - - - ---------- ---------- ------- -------- -------- 1,658,201 664,325 16,632 269,975 311,739 Net realized gain (loss) on disposition of investments 43,586 - (158) 24,565 26,472 Unrealized appreciation (depreciation) of investments (596,181) - (295) 5,066 38,146 Distributions (99,265) (108,407) - (17,124) (21,216) Transfers (81,539) (387,889) 5,923 (119,346) (94,835) ---------- ---------- ------- -------- -------- Change in net assets 987,437 283,242 23,258 229,349 334,093 Plan equity, beginning of year 3,377,554 1,947,712 240 550,060 550,491 ---------- ---------- ------- -------- -------- Plan equity, end of year $4,364,991 $2,230,954 $23,498 $779,409 $884,584 ========== ========== ======= ======== ======== See Accompanying Notes to Financial Statements
12 Engelhard Corporation Savings Plan for Hourly Paid Employees Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1996 (Page 2 of 2) Treasury Int'l Growth Money Market Loan Fund Fund Fund Combined ------------- ------------ ---------- ---------- Net investment income: Dividends $ 3,527 $ 97 $ - $ 207,415 Interest - - 40,677 155,890 ------- ------ -------- ---------- 3,527 97 40,677 363,305 Contributions and other receipts: Participants 82,549 5,763 - 2,635,494 Engelhard Corporation - - - 373,690 ------- ------ -------- ---------- 82,549 5,763 - 3,009,184 Net realized gain (loss) on disposition of investments (31) - - 94,434 Unrealized appreciation (depreciation) of investments 1,586 - - (551,678) Distributions - (6,206) (7,939) (260,157) Transfers 1,891 6,169 669,626 - ------- ------ -------- ---------- Change in net assets 89,522 5,823 702,364 2,655,088 Plan equity, beginning of year - - - 6,426,057 ------- ------ -------- ---------- Plan equity, end of year $89,522 $5,823 $702,364 $9,081,145 ======= ====== ======== ========== See Accompanying Notes to Financial Statements
13 Notes to Financial Statements Note 1 - Description of the Plan The Engelhard Corporation Savings Plan for Hourly Paid Employees (the Plan), effective as of January 1, 1991, 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 - ----------- Except as specifically included or excluded by the Board of Directors of the Company (the Board), the hourly paid employees of Engelhard Corporation represented by Locals 233, 237 and 238, Independent Workers of North America, Local 1668 of the United Automobile Workers, Local 170 of the United Steel Workers of America until May 1, 1998 (see Note 8), Local 8-406 of the Oil, Chemical and Atomic Workers International Union, Local 663 of the International Chemicals Workers Union, Local 73 of the International Chemical Workers Union and, as of October 1, 1997, Local 1430 of the International Brotherhood of Electrical Workers who have completed at least one year of service, as defined, are eligible to participate in the Plan as of the first day of the month in which they meet the year of service requirement. Contributions - ------------- The Plan permits eligible employees participating in the Plan (the Participants) to elect to reduce their compensation, ranging from 1 percent to 15 percent, depending on the union contract, by a whole percentage thereof, subject to limitations, and to have that amount contributed to the Plan and the related taxes deferred. Matching Contributions - ---------------------- The Company will contribute, on a monthly basis and subject to limitations and exclusions, either cash or common stock of the Company in an amount, ranging from 10 percent to 50 percent, depending on the union contract, of the amount contributed by the Participants. Investments - ----------- All contributions to the Plan are held and invested by Vanguard Fiduciary Trust Company (the Trustee). The Trustee maintains seven 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. 14 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 obligations guaranteed as to the payment of principal and interest by the United States Government. c) The Explorer Fund consists of assets invested in shares of the Vanguard Explorer Fund, which invests in common stocks of small companies with favorable prospects for above-average growth in market value. d) 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. e) 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. f) 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. g) The Treasury Money Market Fund consists of assets invested in direct obligations of the U.S. Government which guarantees payment of principal and interest. 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 1997 ---- ---- Company Stock Fund 981 1,006 Fixed Income Fund 439 470 Explorer Fund 97 60 Balanced Fund 462 398 Equity Index Fund 539 462 International Growth Fund 146 141 Treasury Money Market Fund 44 27 15 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 Treasury Company Stock Fixed Income Explorer Balanced Equity Index Int'l Growth Money Market Fund Fund Fund Fund Fund Fund Fund ------------- ------------ -------- -------- ------------ ------------ ------------ 1998: Units 197,515 2,943,992 2,613 83,620 85,659 20,700 66,456 Value per unit $32.85 $1.00 $56.71 $24.38 $30.76 $18.77 $1.00 1997: Units 183,530 2,768,626 680 61,830 62,966 13,360 28,692 Value per unit $29.36 $1.00 $55.30 $21.05 $26.19 $16.39 $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. 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. 16 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 Internal Revenue Service has issued a favorable determination letter 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, 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 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 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. 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. 17 The net realized gain (loss) on disposition of investments was computed as follows: Treasury Common Fixed Equity Int'l Money Stock Income Explorer Balanced Index Growth Market Net realized gain (loss) Fund Fund Fund Fund Fund Fund Fund Combined ---------- -------- -------- --------- -------- -------- -------- ---------- Year ended December 31, 1998 - Amount realized $1,612,701 $777,688 $14,751 $329,212 $475,479 $68,458 $8,881 $3,287,170 Cost-average 1,592,724 777,688 15,647 270,831 382,785 71,445 8,881 3,120,001 Net realized gain 19,977 - (896) 58,381 92,694 (2,987) - 167,169 Year ended December 31, 1997 - Amount realized $2,677,505 $440,633 $79,229 $648,041 $881,160 $178,801 $11,454 $4,916,823 Cost-average 2,661,486 440,633 76,095 620,522 848,646 177,796 11,454 4,836,632 Net realized gain 16,019 - 3,134 27,519 32,514 1,005 - 80,191 Year ended December 31, 1996 - Amount realized $2,356,448 $573,419 $26,540 $506,269 $587,969 $ 85,869 $ - $4,136,514 Cost-average 2,312,862 573,419 26,698 481,704 561,497 85,900 - 4,042,080 Net realized gain (loss) 43,586 - (158) 24,565 26,472 (31) - 94,434
The net unrealized appreciation (depreciation) of investments held was computed as follows: Company Equity Int'l Net unrealized appreciation Stock Explorer Balanced Index Growth (depreciation) Fund Fund Fund Fund Fund Combined ---------- --------- ---------- ---------- --------- ------------ Year ended December 31, 1998 - Balance, beginning of year $(719,553) $(1,252) $189,576 $247,736 $(10,658) $ (294,151) Net change 701,889 7,404 167,743 245,457 36,942 1,159,435 Balance, end of year (17,664) 6,152 357,319 493,193 26,284 865,284 Year ended December 31, 1997 - Balance, beginning of year $ (70,171) $ (295) $ 73,074 $112,964 $ 1,586 $ 117,158 Net change (649,382) (957) 116,502 134,772 (12,244) (411,309) Balance, end of year (719,553) (1,252) 189,576 247,736 (10,658) (294,151) Year ended December 31, 1996 - Balance, beginning of year $ 526,010 $ - $68,008 $ 74,818 $ - $ 668,836 Net change (596,181) (295) 5,066 38,146 1,586 (551,678) Balance, end of year (70,171) (295) 73,074 112,964 1,586 117,158
18 Note 7 - Related Party Transactions For the 1998 plan year the Company transferred 25,067 treasury stock shares (representing a contribution dollar amount of $491,842) to Vanguard to fund the employer match (balance of $20,418 was contributed in cash). 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 - Attapulgus Plan Transfer During 1998 employees represented by the Local 170 of the United Steel Workers of America renegotiated their union contract to provide additional 401K benefits. As a result a new plan was formed and $1,126,065 in assets were transferred to the Savings Plan for Hourly Paid Employees at Attapulgus, Georgia. These assets represented the sum of account balances for participants represented by Local 170 of the United Steel Workers Union as of May 1, 1998 the effective date of the new plan. 19 Engelhard Corporation Savings Plan for Hourly Paid Employees Schedule of Investments at December 31, 1998 Approximate Cost Market Value ----------- ------------ Common Stock of $ 6,351,175 $ 6,333,511 Engelhard Corporation (324,795 shares) Vanguard Retirement Savings 2,884,869 2,884,869 Trust Vanguard Explorer Fund 132,857 139,009 Vanguard Asset Allocation 1,625,357 1,982,676 Fund Vanguard Growth and Income 2,057,862 2,551,055 Portfolio Vanguard International Growth Fund 348,150 374,434 Treasury Money Market Fund 61,956 61,956 ----------- ----------- Total $13,462,226 $14,327,510 =========== =========== 20 Engelhard Corporation Savings Plan for Hourly Paid Employees Schedule of Investments at December 31, 1997 Approximate Cost Market Value ----------- ------------ Common Stock of $ 5,914,496 $ 5,194,943 Engelhard Corporation (298,990 shares) Vanguard Retirement Savings 2,690,313 2,690,313 Trust Vanguard Explorer Fund 31,813 30,561 Vanguard Asset Allocation 1,063,392 1,252,968 Fund Vanguard Growth and Income 1,332,297 1,580,033 Portfolio Vanguard International Growth Fund 216,763 206,105 Treasury Money Market Fund 25,669 25,669 ----------- ----------- Total $11,274,743 $10,980,592 =========== =========== 21 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 (File No. 33-37724) of our report dated June 18, 1999, on our audits of the financial statements and financial statement schedules of Engelhard Corporation Savings Plan for Hourly Paid Employees as of December 31, 1998 and 1997, and for the years ended December 31, 1998, 1997 and 1996, which appears in this Form 11-K. /s/ PRICEWATERHOUSECOOPERS L.L.P. New York, New York June 21, 1999 22 Signature --------- Form 11-K Engelhard Corporation Savings Plan for Hourly Paid Employees 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 23 -----END PRIVACY-ENHANCED MESSAGE-----