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 _____
------------------
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 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 6-11
Supplemental Schedule
Schedule of Assets Held for Investment Purposes 12
at December 31, 2000
Schedule of Reportable Transactions for the Year
Ended December 31, 2000 13
Consent of Independent Accountants 14
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 of Engelhard Corporation Savings Plan for Hourly Paid Employees
at Attapulgus, Georgia (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 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. 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 audits were 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
Engelhard Corporation Savings Plan for Hourly Paid Employees
at Attapulgus, Georgia
Statement of Net Assets Available for Benefits
At December 31, 2000 and 1999
2000 1999
---- ----
Assets
- ------
Investments at fair value $ 1,854,295 $ 1,472,059
Receivables:
Participant Contributions 20,967 25,251
Employer Contributions 7,571 9,345
------------ ------------
Total Receivables $ 28,538 $ 34,596
----------- -----------
Net Assets Available for Benefits $ 1,882,833 $ 1,506,655
============ ============
See Accompanying Notes to Financial Statements
4
Engelhard Corporation Savings Plan for Hourly Paid Employees
at Attapulgus, Georgia
Statement of Changes In Net Assets Available for Benefits
For The Year Ended December 31, 2000
2000
----
Additions:
Net Investment Income:
Dividends $ 50,253
Interest 13,836
------------
Total Investment Income 64,089
Contributions:
Participant 280,352
Employer 101,551
------------
Total Contributions 381,903
Net Realized Loss on Sale
of Investments (8,705)
Unrealized Appreciation
of Investment 65,580
------------
Total Additions 502,867
Deductions:
Distributions 125,743
Other Deductions 946
------------
Total Deductions 126,689
Net Increase 376,178
Net Assets Available for Benefits at 1,506,655
Beginning of Year
------------
Net Assets Available for Benefits at $ 1,882,833
End of Year
============
See Accompanying Notes to Financial Statements
5
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 May 1, 1998, 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 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
- -----------
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 on a pre-tax basis up to 15 percent of their compensation,
as defined, subject to certain restrictions and limitations, and have the amount
contributed to the plan. 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 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 Growth 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 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 Fund 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.
7
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.
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. Participants are
intitially restricted from moving matching contributions out of the Company
Stock Fund until the funds become unrestricted. Current year matching
contributions become unrestricted at the rate of 25 percent per year.
The number of Participants in each fund was as follows at December 31:
Participants 2000 1999
- ------------ ---- ----
Company Stock Fund 98 101
Fixed Income Fund 25 30
Windsor II Growth Fund 8 5
Windsor Growth Fund 10 6
Balanced Fund 25 27
Equity Index Fund 30 28
Small Cap Fund 4 -
Life Strategy Growth Fund 5 4
Life Strategy Conservative Growth Fund 1 1
Vanguard U.S. Growth Fund 8 3
Life Strategy Moderate Growth Fund 3 3
Prime Cap Fund 10 3
Short Term Bond Fund 1 -
International Growth Fund 5 -
Life Strategy Income Fund - -
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 33,178 $34.22 29,898 $31.75
Fixed Income Fund 132,590 1.00 97,159 1.00
Windsor II Growth Fund 1,016 27.20 483 24.97
Windsor Growth Fund 1,115 15.29 371 15.17
Balanced Fund 3,770 23.67 3,809 23.80
Equity Index Fund 5,705 32.06 3,987 37.08
Life Strategy Growth Fund 926 19.59 1,001 21.41
Life Strategy Conservative 53 14.70 51 15.10
Growth Fund
Vanguard U.S. Growth Fund 637 27.65 224 43.53
Life Strategy Moderate Growth Fund 621 17.24 517 18.18
Loan Fund 216,132 1.00 151,342 1.00
Prime Cap Fund 458 60.38 184 62.07
Short Term Bond Fund 60 10.65 - -
Small Cap Fund 159 19.44 - -
International Growth Fund 176 18.87 - -
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 years
ended December 31, 2000.
Balance @ 12/31/99 $264,375
Dividends 3,853
Appreciation 3,532
Contributions 103,324
Transfer to unrestricted (234,378)
Distributions (13,804)
Other (3,135)
--------
Balance @ 12/31/00 $123,767
9
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
- --------------
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.
Distributions and Withdrawals
- -----------------------------
Upon termination of employment, as provided in the Plan Document, employees
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 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 guidelines 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 Changes in Net Assets Available for Benefits.
Certain reclassifications have been made to prior year balances 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 Plan intends to file for a
determination letter with the Internal Revenue Service during 2001. Amounts
contributed to and earned by the Plan are not taxed to the participant 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
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/depreciation of investments in the statement of changes in net
assets available 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 the Vanguard Funds are valued based on the quoted net asset value (redemption
value) of the respective investment fund as of the valuation date.
Note 7 - Related Party Transactions
For the 2000 plan year, the Company transferred 5,676 treasury stock shares
(representing a contribution dollar amount of $101,551) 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.
For a listing of assets exceeding 5% of total assets see schedule of
investments.
Note 8 - Ommited Schedules and Information
The Plan has no commitments or leases in default, as defined by ERISA
section 2520.103(b)(3)(E) for the year ended December 31, 2000.
11
Engelhard Corporation Savings Plan for Hourly Paid Employees
at Attapulgus, Georgia
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
Lessor, or Interest, Collateral, Par (E)Current
(A) Similiar Party or Maturity Value (D)Cost Value
- --- -------------- --------------------------- ------------ ------------
* Vanguard Engelhard Corporation
Company Stock Fund $1,064,856 $1,117,390 **
* Vanguard Fixed Income Fund 130,613 130,613 **
(Retirement Savings Trust)
* Vanguard Windsor II Fund 27,102 26,994
* Vanguard Growth Fund 16,631 16,031
(Windsor Fund)
* Vanguard Balanced Fund 88,447 86,757
(Asset Allocation Fund)
* Vanguard Equity Index Fund 183,068 181,511 **
(Growth and Income Portfolio)
* Vanguard Prime Cap Fund 28,229 26,631
* Vanguard Life Strategy Growth Portfolio 18,341 17,840
* Vanguard Life Strategy Conservative 781 786
Growth Portfolio
* Vanguard U.S. Growth Portfolio 23,677 16,860
* Vanguard Life Strategy Moderate 10,440 10,166
Growth Fund
* Vanguard International Growth 3,615 3,104
Fund
* Vanguard Short Term Bond Fund 580 590
* Vanguard Small Cap Index Fund 3,509 2,890
*Promissory notes from participants having 216,132 216,132
interest rates from 8.75% to 10.50%
---------- ----------
Total $1,816,021 $1,854,295
========== ==========
**Market value is greater than 5% of Net Assets.
*Represents party-in-interest.
12
Savings Plan for the Hourly Employees at
Attapulgus, Georgia
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 Asset Allocation Fund $ 40,397 $ 40,397
Vanguard Vanguard Asset Allocation Fund $ 41,321 $ 39,946 41,321 $ 1,375
Vanguard Vanguard Growth & Income 123,168 123,168
Vanguard Vanguard Growth & Income 65,373 60,206 65,373 5,167
Vanguard Vanguard Retir. Savings Trust 130,033 130,033
Vanguard Vanguard Retir. Savings Trust 94,102 94,102 94,102
N/A Engelhard Corp. Stock Fund 332,898 332,898
N/A Engelhard Corp. Stock Fund 232,868 267,229 232,868 (34,361)
*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.
13
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As indepenedent 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
14
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 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
15