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
<PAGE>
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
<PAGE>
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
<PAGE>
<TABLE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Statement of Financial Condition
at December 31, 1998
(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 $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
</TABLE>
4
<PAGE>
<TABLE>
Engelhard Corporation Savings Plan for Hourly Paid Employees
Statement of Financial Condition
at December 31, 1998
(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 $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
</TABLE>
5
<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
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>
6
<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
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
</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, 1998
(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 $ 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
</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, 1998
(Page 2 of 2)
<S> <C> <C> <C> <C>
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
</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, 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>
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, 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>
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, 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>
12
<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>
13
<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 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
<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 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
<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
------------- ------------ -------- -------- ------------ ------------ ------------
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
</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
- --------------
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
<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 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
<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, 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
</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, 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
</TABLE>
18
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<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 28th day of June,
1999.
/s/ John C. Hess
-------------
By: John C. Hess
Secretary to the Committee and
Vice President of Human Resources
23
