<PAGE>
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, 1997
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
<PAGE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Table of Contents
Page
Description ----
-----------
Report of Independent Accountants 3
Statements of Financial Condition 4-7
at December 31, 1997 and 1996
Statements of Income and Changes in 8-12
Plan Equity for each of the three years
in the period ended December 31, 1997
Notes to Financial Statements 13-18
Supplemental Schedule
Schedule of Investments at December 31, 1997 and 1996 19-20
Consent of Independent Public Accountants 21
2
<PAGE>
Report of Independent Accountants
---------------------------------
To the Pension and Employee Benefit Plans Committee of Engelhard Corporation:
We have audited the financial statements and the financial statement
schedule of the Engelhard Corporation Savings Plan for Hourly Paid Employees
listed in the table of contents on Page 2 of this Form 11-K. These financial
statements and the financial statement schedule are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and the financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 principles 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 financial position of the Engelhard Corporation
Savings Plan for Hourly Paid Employees as of December 31, 1997 and 1996, and the
results of its operations for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
In addition, in our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
/s/ COOPERS & LYBRAND L.L.P.
New York, New York
April 14, 1998
3
<PAGE>
<TABLE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Statement of Financial Condition
at December 31, 1997
(Page 1 of 2)
<S> <C> <C> <C> <C> <C>
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
Interest receivable - - - - -
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
</TABLE>
4
<PAGE>
<TABLE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Statement of Financial Condition
at December 31, 1997
(Page 2 of 2)
<S> <C> <C> <C> <C>
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
Interest receivable - - 7,222 7,222
Contributions receivable:
Participants 12,437 3,023 - 323,728
Engelhard Corporation - - - 50,380
Promissory notes from participants 427 - 967,626 1,005,852
------- ------- -------- -----------
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
</TABLE>
5
<PAGE>
<TABLE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Statement of Financial Condition
at December 31, 1996
(Page 1 of 2)
<S> <C> <C> <C> <C> <C>
Company Stock Fixed Income Explorer Balanced Equity Index
Fund Fund Fund Fund Fund
------------- ------------ -------- --------- -----------
Assets:
- ------
Investments, at fair value
(combined cost of $7,997,088) $4,222,070 $2,172,085 $21,188 $754,872 $856,059
Interest receivable - - - - -
Contributions receivable:
Participants 104,699 52,014 1,979 23,200 26,442
Engelhard Corporation 30,282 - - - -
Promissory notes from participants 7,940 6,855 331 1,337 2,083
---------- ---------- ------- -------- --------
Total assets $4,364,991 $2,230,954 $23,498 $779,409 $884,584
========== ========== ======= ======== ========
Plan equity:
Plan equity $4,364,991 $2,230,954 $23,498 $779,409 $884,584
========== ========== ======= ======== ========
See Accompanying Notes to Financial Statements
</TABLE>
6
<PAGE>
<TABLE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Statement of Financial Condition
at December 31, 1996
(Page 2 of 2)
<S> <C> <C> <C> <C> <C>
Treasury
Int'l Growth Money Market Loan
Fund Fund Fund Combined
------------- ------------ -------- -----------
Assets:
- ------
Investments, at fair value
(combined cost of $7,997,088) $82,923 $5,049 $ - $8,114,246
Interest receivable - - 5,041 5,041
Contributions receivable:
Participants 6,559 774 - 215,667
Engelhard Corporation - - - 30,282
Promissory notes from participants 40 - 697,323 715,909
------- ------ -------- ----------
Total assets $89,522 $5,823 $702,364 $9,081,145
======= ====== ======== ==========
Plan equity:
Plan equity $89,522 $5,823 $702,364 $9,081,145
======= ====== ======== ==========
See Accompanying Notes to Financial Statements
</TABLE>
7
<PAGE>
<TABLE>
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)
<S> <C> <C> <C> <C> <C>
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
</TABLE>
8
<PAGE>
<TABLE>
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)
<S> <C> <C> <C> <C>
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
</TABLE>
9
<PAGE>
<TABLE>
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)
<S> <C> <C> <C> <C> <C>
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
</TABLE>
10
<PAGE>
<TABLE>
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)
<S> <C> <C> <C> <C>
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
</TABLE>
11
<PAGE>
<TABLE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Statement of Income and Changes in Plan Equity
for the Year Ended December 31, 1995
<S> <C> <C> <C> <C> <C> <C>
Company Stock Fixed Income Explorer Balanced Equity Index
Fund Fund Fund Fund Fund Combined
------------- ------------ -------- -------- ------------ ----------
Net investment income:
Dividends $ 44,408 $ - $ - $ 37,551 $ 29,920 $ 111,879
Interest - 116,203 - - - 116,203
---------- ---------- ---- -------- -------- ----------
44,408 116,203 - 37,551 29,920 228,082
Contributions and other receipts:
Participants 844,731 612,871 240 158,253 171,213 1,787,308
Engelhard Corporation 157,288 - - - - 157,288
---------- ---------- ---- -------- -------- ----------
1,002,019 612,871 240 158,253 171,213 1,944,596
Net realized gain on disposition
of investments 271,164 - - 19,410 20,555 311,129
Unrealized appreciation
of investments 541,991 - - 76,481 91,556 710,028
Distributions (176,911) (99,178) - (22,520) (23,575) (322,184)
Engelhard-CLAL transfer (413,389) (314,571) - (71,269) (93,118) (892,347)
Other transfers 255,586 (220,663) - (2,404) (32,519) -
---------- ---------- ---- ------- -------- ----------
Change in net assets 1,524,868 94,662 240 195,502 164,032 1,979,304
Plan equity, beginning of year 1,852,686 1,853,050 - 354,558 386,459 4,446,753
---------- ---------- ---- -------- -------- ----------
Plan equity, end of year $3,377,554 $1,947,712 $240 $550,060 $550,491 $6,426,057
========== ========== ==== ======== ======== ==========
See Accompanying Notes to Financial Statements
</TABLE>
12
<PAGE>
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, 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, as defined, 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 25 percent, depending on the union contract, of the amount
contributed by the Participants. Effective January 1, 1996 the maximum Company
contribution was increased 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.
13
<PAGE>
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 1997 1996
---- ----
Company Stock Fund 1,006 853
Fixed Income Fund 470 443
Explorer Fund 60 19
Balanced Fund 398 295
Equity Index Fund 462 306
International Growth Fund 141 86
Treasury Money Market Fund 27 6
14
<PAGE>
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
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Treasury
Company Stock Fixed Income Explorer Balanced Equity Index Int'l Growth Money Market
Fund Fund Fund Fund Fund Fund Fund
------------- ------------ -------- -------- ------------ ------------ ------------
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
1996:
Units 134,805 2,230,954 437 43,445 39,792 5,439 5,823
Value per unit $32.38 $1.00 $53.82 $17.94 $22.23 $16.46 $1.00
</TABLE>
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
- --------------
Effective January 1, 1996 the Plan was amended and restated to allow
participants who have participated in the plan for at least one year 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.
15
<PAGE>
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 are not expected to
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 the Vanguard Funds are valued based on the quoted net asset value (redemption
value) of the respective investment company as of the valuation date.
16
<PAGE>
The net realized gain (loss) on disposition of investments was computed as
follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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, 1997 -
Amount realized $2,677,505 $ - $79,229 $648,041 $881,160 $178,801 $ - $4,464,799
Cost-average 2,661,486 - 76,095 620,522 848,646 177,796 - 4,384,608
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 $ - $26,540 $506,269 $587,969 $ 85,869 $ - $3,563,095
Cost-average 2,312,862 - 26,698 481,704 561,497 85,900 - 3,468,661
Net realized gain (loss) 43,586 - (158) 24,565 26,472 (31) - 94,434
Year ended December 31, 1995 -
Amount realized $695,731 $ - $ - $153,120 $176,717 $ - $ - $1,025,568
Cost-average 424,567 - - 133,710 156,162 - - 714,439
Net realized gain 271,164 - - 19,410 20,555 - - 311,129
</TABLE>
The net unrealized appreciation (depreciation) of investments held was
computed as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Company Equity Int'l
Net unrealized appreciation Stock Explorer Balanced Index Growth
(depreciation) Fund Fund Fund Fund Fund Combined
--------- -------- --------- -------- ------- ----------
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
Year ended December 31, 1995 -
Balance, beginning of year $ (15,981) $ - $(8,473) $(16,738) $ - $ (41,192)
Net change 541,991 - 76,481 91,556 - 710,028
Balance, end of year 526,010 - 68,008 74,818 - 668,836
</TABLE>
17
<PAGE>
Note 7 - Related Party Transactions
During 1997 (effective February 1, 1997) the Company transferred 18,753
treasury stock shares (representing a contribution dollar amount of $385,274) 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 - Engelhard-CLAL Transfer
In connection with the formation of a joint venture (Engelhard-CLAL) on
June 21, 1995, the Plan transferred assets of $892,347 to the Engelhard-CLAL-LP
Plan for Hourly Paid Employees.
18
<PAGE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Schedule of Investments
at December 31, 1997
Approximate
Cost Market Value
----------- ------------
Company Stock Fund
- ------------------
Common Stock of $ 5,914,496 $ 5,194,943
Engelhard Corporation
(298,990 shares)
Fixed Income Fund
- -----------------
Vanguard Retirement Savings 2,690,313 2,690,313
Trust
Explorer Fund
- -------------
Vanguard Explorer Fund 31,813 30,561
Balanced Fund
- -------------
Vanguard Asset Allocation 1,063,392 1,252,968
Fund
Equity Index Fund
- -----------------
Vanguard Growth and Income 1,332,297 1,580,033
Portfolio
International Growth Fund
- -------------------------
Vanguard International Growth Fund 216,763 206,105
Treasury Money Market Fund
- --------------------------
Treasury Money Market Fund 25,669 25,669
----------- -----------
Total $11,274,743 $10,980,592
=========== ===========
19
<PAGE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Schedule of Investments
at December 31, 1996
Approximate
Cost Market Value
---------- ------------
Company Stock Fund
- ------------------
Common Stock of $4,292,241 $4,222,070
Engelhard Corporation
(220,657 shares)
Fixed Income Fund
- -----------------
Vanguard Retirement Savings 2,172,085 2,172,085
Trust
Explorer Fund
- -------------
Vanguard Explorer Fund 21,483 21,188
Balanced Fund
- -------------
Vanguard Asset Allocation 681,798 754,872
Fund
Equity Index Fund
- -----------------
Vanguard Growth and Income 743,095 856,059
Portfolio
International Growth Fund
- -------------------------
Vanguard International Growth Fund 81,337 82,923
Treasury Money Market Fund
- --------------------------
Treasury Money Market Fund 5,049 5,049
---------- ----------
Total $7,997,088 $8,114,246
========== ==========
20
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
We consent to the incorporation by reference in the registration statement of
Savings Plan for Hourly Paid Employees on Form S-8 (File No. 33-37724) of our
report dated April 14, 1998, on our audits of the financial statements and
financial statement schedules of Engelhard Corporation Savings Plan for Hourly
Paid Employees as of December 31, 1997 and 1996, and for the years ended
December 31, 1997, 1996 and 1995, whose report is included in the Form 11-K.
/s/ COOPERS & LYBRAND L.L.P.
New York, New York
April 24, 1998
21
<PAGE>
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 24th day of April,
1998.
/s/ John C. Hess
-------------
By: John C. Hess
Secretary to the Committee and
Vice President of Human Resources
22
