SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11 - K
ANNUAL REPORT
PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from.......to.......
Commission file number 1-1228
Employee Investment Plan of Stone & Webster,
Incorporated and Participating Subsidiaries
(Full title of the Plan)
Stone & Webster, Incorporated
245 Summer Street, Boston, Massachusetts 02210
(617) 589-5111
(Name of issuer of the securities held pursuant to the
Plan and the address of its principal executive office)
<PAGE>
REQUIRED INFORMATION
The Statements of Net Assets Available for Benefits, With Fund Information, of
the Plan as of December 31, 1996 and 1995, and the related Statement of Changes
in Net Assets Available for Benefits, With Fund Information, and supplemental
schedules for the year ended December 31, 1996, together with the Report and
Consent of Independent Accountants, are attached and filed herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee under the Plan, which administers the Plan, has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER,
INCORPORATED AND PARTICIPATING SUBSIDIARIES
By PETER F. DURNING
Peter F. Durning
Secretary of the Committee under the Plan
Date: June 27, 1997
<PAGE>
Form 11K for the year ended Employee Investment Plan of
December 31, 1996 Stone & Webster, Incorporated
and Participating Subsidiaries
EMPLOYEE INVESTMENT PLAN
of STONE & WEBSTER,INCORPORATED
and PARTICIPATING SUBSIDIARIES
INDEX OF FINANCIAL STATEMENTS
and SUPPLEMENTAL SCHEDULES
Pages
Report of Independent Accountants 4
Financial Statements:
Statement of Net Assets Available for Benefits, With
Fund Information, as of December 31, 1996 5
Statement of Net Assets Available for Benefits, With
Fund Information, as of December 31, 1995 6
Statement of Changes in Net Assets Available for
Benefits, With Fund Information, for the year
ended December 31, 1996 7
Notes to Financial Statements 8-13
Supplemental Schedules:
Schedule of Assets Held for
Investment Purposes at
December 31, 1996 (Form 5500, Item 27a) 14-16
Schedule of Reportable Transactions for the year
ended December 31, 1996 (Form 5500, Item 27d) 17
Schedule of Nonexempt Transactions for the year
ended December 31, 1996 (Form 5500, Item 27e) 18
Exhibits:
Exhibit 1
Consent Of Independent Accountants 19
<PAGE>
COOPERS & LYBRAND L.L.P.
certified public accountants
REPORT OF INDEPENDENT ACCOUNTANTS
________
To the Committee under the
Employee Investment Plan of Stone & Webster,
Incorporated and Participating Subsidiaries:
We have audited the accompanying statements of net assets available for benefits
of the Employee Investment Plan of Stone & Webster, Incorporated and
Participating Subsidiaries (the "Plan") as of December 31, 1996 and 1995, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 1996. 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 in accordance with generally accepted auditing
standards. 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 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 net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for benefits
for the year ended December 31, 1996, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying index on page 3 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's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The Fund Information in the statements of net assets
available for benefits as of December 31, 1996 and 1995 and the statement of
changes in net assets available for benefits for the year ended December 31,
1996 is presented for purposes of additional analysis rather than to present the
net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 20, 1997
<PAGE>
<TABLE>
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER, INCORPORATED
AND PARTICIPATING SUBSIDIARIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1996
(All dollar amounts are in thousands.)
Non
Participated-
Participant-Directed Directed
-------------------------------------------------------------- ------------
Stone & Short Value Assured Stone &
Webster Equity Term Equity Interest Loans Webster
Stock Fund Fund Fund Fund Fund Account Stock Fund Total
---------- ------- ------ ------- -------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Value (Note 2):
Stone & Webster, Incorporated Common
Stock (1,597,420 shares, cost $43,253) $17,973 $32,346 $50,319
Participation in The Chase Manhattan
Bank, N.A. pooled trust funds for
employee benefit plans:
Temporary Investment Fund
(cost $460) 164 296 460
UBS Temporary Investment Fund
(cost $95,904) $82,454 $13,450 95,904
Domestic Liquidity Fund
(cost $8,303) $8,303 8,303
Putnam OTC Emerging Growth Fund
(cost $80,546) $80,198 80,198
Guaranteed Interest Contracts
(cost $63,090) (Note 5) 63,090 63,090
Loans Receivable (Note 6) $4,920 4,920
Cash 11 42 1 54
Contributions Receivables:
Employees 7 49 46 36 138
Employer 6 6
Dividends Receivable 44 12 56
Interest Receivable 336 336
Inter-Fund Receivable (Payable) 67 306 184 (632) 75 ---
Other Receivables (Note 7) 270 1,187 730 10 2,197
------- ------- ------- ------- ------- ------ ------- --------
Net Assets Available for Benefits $18,481 $84,051 $13,450 $81,212 $71,134 $4,995 $32,658 $305,981
======= ======= ======= ======= ======= ====== ======= ========
<FN>
See Accompanying Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER, INCORPORATED
AND PARTICIPATING SUBSIDIARIES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1995
(All dollar amounts are in thousands.)
<CAPTION>
Non
Participant-
Participant-Directed Directed
----------------------------------------------------------- ------------
Stone & Short Value Assured Stone &
Webster Equity Term Equity Interest Loans Webster
Stock Fund Fund Fund Fund Fund Account Stock Fund Total
---------- ------ ------ ------ -------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Value (Note 2):
Stone & Webster, Incorporated Common
Stock (1,738,322 shares, cost $46,284) $22,801 $39,561 $62,362
Participation in The Chase Manhattan
Bank, N.A. pooled trust funds for
employee benefit plans:
Medium Capitalization Equity Fund
(cost $3,311) $6,247 6,247
Small Capitalization Growth Fund
(cost $1,997) 3,282 3,282
Short Intermediate Maturity Fund
(cost $5,201) $5,058 5,058
Temporary Investment Fund
(cost $10,640) 140 1,186 9,070 244 10,640
Domestic Liquidity Fund
(cost $13,625) $8,566 $5,059 13,625
Preferred Stock (cost $916) 900 900
Common Stock (cost $87,978) 61,992 51,231 113,223
Guaranteed Interest Contracts
(cost $72,647) (Note 5) 72,647 72,647
U.S. Treasury Bills (cost $146) 146 146
Loans Receivable (Note 6) $5,691 5,691
Cash 15 1 16
Contributions Receivables:
Employees 5 14 3 16 15 53
Employer 7 7
Dividends Receivable 95 107 9 166 377
Interest Receivable 26 394 420
Inter-Fund Receivable (Payable) (198) 1,173 336 (321) (920) (70) ---
Due from Broker for Securities Sold 55 2,598 2,653
------- ------- ------- ------- ------- ------ ------- --------
Total Assets $22,843 $74,001 $14,493 $60,617 $79,794 $5,621 $39,978 $297,347
======= ======= ======= ======= ======= ====== ======= ========
Liabilities:
Due to Broker for Securities Purchased $317 $317
Forfeiture Credits $273 273
------- ------- --------
Total Liabilities 317 273 590
------- ------- --------
------- ------- ------- ------- ------- ------ ------- --------
Net Assets Available for Benefits $22,843 $74,001 $14,493 $60,300 $79,794 $5,621 $39,705 $296,757
======= ======= ======= ======= ======= ====== ======= ========
<FN>
See Accompanying Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER, INCORPORATED
AND PARTICIPATING SUBSIDIARIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
For the Year Ended December 31, 1996
(All dollar amounts are in thousands.)
<CAPTION>
Non
Participant
Participant-Directed Directed
-------------------------------------------------------------- ----------
Stone & Short Value Assured Stone &
Webster Equity Term Equity Interest Loans Webster
Stock Fund Fund Fund Fund Fund Account Stock Fund Total
---------- ------ ------ ------- -------- ------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Contributions:
Employee (Notes 3 and 4) $2,198 $4,893 $497 $6,278 $4,873 $18,739
Employer (Notes 3 and 4) $2,374 2,374
------- ------- ------- ------- ------- ------- -------
Total Contributions 2,198 4,893 497 6,278 4,873 2,374 21,113
------- ------- ------- ------- ------- ------- -------
Income from Investments:
Net Appreciation in Fair
Value of Investments (2,665) 12,744 (16) 24,507 (4,615) 29,955
Dividends 274 999 141 474 1,888
Interest 12 234 792 264 4,726 $399 21 6,448
------- ------- ------- ------- ------- ------ ------- -------
Total Income From Investments (2,379) 13,977 776 24,912 4,726 399 (4,120) 38,291
------- ------- ------- ------- ------- ------ ------- -------
Total Additions (181) 18,870 1,273 31,190 9,599 399 (1,746) 59,404
------- ------- ------- ------- ------- ------ ------- -------
Deductions:
Distributions to Participants 3,101 13,296 2,504 10,450 14,019 609 5,301 49,280
Administrative Expenses 180 21 564 135 900
------- ------- ------- ------- ------- ------ ------- -------
Total Deductions 3,101 13,476 2,525 11,014 14,154 609 5,301 50,180
------- ------- ------- ------- ------- ------ ------- -------
Inter-Fund Transfers (1,080) 4,656 209 736 (4,105) (416) ---
Increase (Decrease) in Net
Assets Available for Benefits (4,362) 10,050 (1,043) 20,912 (8,660) (626) (7,047) 9,224
Net Assets Available for Benefits -
December 31, 1995 22,843 74,001 14,493 60,300 79,794 5,621 39,705 296,757
------- ------- ------- ------- ------- ------ ------- -------
Net Assets Available for Benefits -
December 31, 1996 18,481 84,051 $13,450 $81,212 $71,134 $4,995 $32,658 $305,981
======= ======= ======= ======= ======= ====== ======= ========
<FN>
See Accompanying Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER, INCORPORATED
AND PARTICIPATING SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(All dollar amounts, except share amounts, are in thousands.)
(1) Plan Description:
The Employee Savings Plan of Stone & Webster, Incorporated and Participating
Subsidiaries (the "Original Plan") was created by action of the Board of
Directors of Stone & Webster, Incorporated on September 17, 1969 and by the
Board of Directors of certain subsidiaries of Stone & Webster, Incorporated (the
"Participating Subsidiaries") on various dates subsequent thereto. Stone &
Webster, Incorporated and the Participating Subsidiaries are collectively
referred to herein as the "Participating Companies". The Original Plan became
effective January 1, 1970. The Original Plan was approved by the stockholders of
Stone & Webster, Incorporated (the "Company") at the annual meeting of
stockholders of the Company held on May 14, 1970 and subsequent thereto has been
amended from time to time.
As of July 1, 1983, the Original Plan was amended and restated and the name was
changed to the Employee Investment Plan of Stone & Webster, Incorporated and
Participating Subsidiaries (the "Plan"). In general, the Plan permits employees
to make contributions on an after-tax basis and, by entering into salary
reduction agreements with their employers, to have before-tax contributions made
on their behalf. Under the Internal Revenue Code, before-tax contributions to
qualified cash or deferred arrangements are not included in the employee's gross
income for that year. The employee's liability for income tax on such
contributions is deferred until such contributions are withdrawn from the Plan.
As of January 1, 1997, the Plan was amended to terminate the Trust Agreement
with The Chase Manhattan Bank, N.A. and the appointments of all investment
managers and to retain Putnam Investments as the single provider of trusteeship,
investment management, record-keeping and other related services for the Plan.
As a result of this transfer, employees will retain their current option to
invest in the Stone & Webster Stock Fund, and gain the option to invest in the
Putnam Voyager Fund, the Putnam Stable Value Fund, the Putnam OTC Emerging
Growth Fund, the Putnam Global Growth Fund, the Putnam Investors Fund, the
Putnam S&P 500 Index Fund, and The George Putnam Fund of Boston. This Plan
amendment allows new participants to rollover contributions from their previous
employer's plans and allows all participants to increase their maximum
before-tax contributions to the Plan to 15% of their eligible compensation (See
Note 12).
The Plan is a voluntary defined contribution plan covering eligible employees of
the Participating Companies. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
Employees are always fully vested in their before-tax and after-tax investment
accounts and in the Company matching contributions on the first 1% of their
investments. The Company matching contributions, as described in Note 3, on the
next 4% of employee investments vest upon completion of five years of service,
or earlier upon death, disability or attainment of age 65. Upon termination of
employment for any reason, employees are entitled to receive the value of their
vested accounts as of the valuation date coinciding with or next following their
date of termination. Distributions may be deferred by a participant to a
quarterly date which is not later than the end of the year in which the
participant attains age 70. Terminating employees may elect to receive a
lump-sum distribution or to receive distributions in installments over a period
not to exceed 10 years. Prior to termination of service, employees may make
withdrawals from their after-tax investment accounts. Employees who have
attained age 59 1/2 may make withdrawals from their before-tax investment
accounts. A member who has not yet attained age 59 1/2 may make withdrawals from
his before-tax investment accounts only for reasons of hardship. Withdrawals may
be made as of any quarterly valuation date on 30 days notice. (See Note 6 for
loan provision).
There were approximately 3,000 employee participants at December 31, 1996 and
approximately 2,700 employee participants at December 31, 1995.
The objectives of the Plan are (1) to enable employees to accumulate income and
capital by means of their own regular savings augmented by contributions by the
Participating Companies, (2) to encourage ownership by employees of the common
stock of the Company, thereby strengthening their interest in its progress and
(3) to attract and retain capable personnel. During 1995 and 1996, the trustee
under the Plan was The Chase Manhattan Bank, N.A., Chase MetroTech Center,
Brooklyn, New York 11245 ("Chase"). Effective January 1, 1997, the trustee under
the Plan became Putnam Fiduciary Trust Company ("Putnam"), Putnam Place, Quincy,
Massachusetts 02269. The Plan is administered through the trustee and by a
committee consisting of directors of the Company, a majority of whom are outside
directors (the "Committee").
(2) Summary of Significant Accounting Policies:
Method of Accounting
The financial statements of the Plan have been prepared on the accrual
basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make significant estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan provides for various investment options in stocks, bonds, fixed income
securities, and other investment securities. 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 of changes in net assets
available for benefits.
Investments Valuation
Investments, exclusive of the Temporary Investment Fund, the Union Bank of
Switzerland (UBS) Temporary Investment Fund, the Domestic Liquidity Fund, and
Guaranteed Interest Contracts, are stated at fair value and are valued at the
closing market prices on the last business day of the year. Temporary
investments are valued at cost, which approximates fair value as reported by The
Chase. Investments in pooled trust funds of The Chase and Putnam OTC Emerging
Growth Fund are stated at fair value as reported by The Chase. Guaranteed
interest contracts, which are fully benefit responsive, are valued at principal
plus reinvested interest, at the contract rates, which approximates fair value,
which is in accordance with Statement of Position 94-4 "Reporting of Investment
Contracts held by Health and Welfare Benefit Plans and Defined Contribution
Pension Plans." Participant notes receivable are valued at cost which
approximates fair value.
Expenses
Expenses of the Plan, other than investment management fees which are being paid
from the Plan assets, are borne by the Participating Companies.
Security Transactions and Related Investment Income
Purchases and sales of securities are reflected on a trade-date basis except for
the related party transactions described in Note 8. Gain or loss on sales of
securities is determined on an average-cost basis.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
Net Appreciation (Depreciation) in the Fair Value of Investments
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains (losses) and the unrealized
appreciation (depreciation) on those investments.
Withdrawals and Distributions
Withdrawals and distributions are recorded when paid.
(3) Contributions:
An employee who elects to participate in the Plan may have contributed an amount
equal to up to 10% of compensation received from a Participating Company for
qualified employment, including payments made under any established plan
providing for incentive compensation, but excluding special or extra
compensation and bonuses, on a before-tax basis as a salary reduction investment
contribution under Section 401(k) of the Internal Revenue Code or may contribute
the same as an after-tax investment contribution under Section 401(a) of the
Internal Revenue Code. Effective January 1, 1997, an employee may contribute an
amount equal to up to 15% of compensation from a Participating Company for
qualified employment on a before-tax basis. In addition to these amounts, each
employee may contribute an additional 5% of compensation as an after-tax
investment contribution but total before-tax and after-tax contributions may not
exceed 15%. All employee contributions are made by payroll deductions. An
employee may elect the amount of contributions as of the first day of any
calendar quarter. An employee may change the amount of before-tax and after-tax
investment contributions as of the first day of any calendar quarter. Before-tax
and after-tax investment contributions may be suspended as of the first day of
any month and may be resumed as of the first day of any subsequent calendar
quarter. Notice of all such elections, changes, suspensions and resumptions
shall be given by the employee by filing an appropriate form at least 30 days
prior to the first day such election, change, suspension or resumption shall
become effective. An employee may not make up suspended contributions. As of
January 1, 1997, an employee may modify investment elections on a daily basis.
The aggregate before-tax investment contributions and the aggregate of all other
investment contributions in any year are subject to certain limitations
necessary to comply with the Internal Revenue Code. In order to prevent such
limitations from being exceeded, the Committee under the Plan may limit the
percentage or amount of compensation which may be contributed by or on behalf of
certain highly compensated employees as after-tax or before-tax investment
contributions.
Concurrently with the payment to the trustee of the contribution made by or on
behalf of the employee, a Participating Company will voluntarily pay to the
trustee for such employee's company accounts an amount equal to 25% of the first
5% of compensation contributed by or on behalf of the employee, such
contribution being hereinafter referred to as the "matching" contribution. Other
additional Participating Company contributions may, at the discretion of the
Board of Directors of the Company, be paid on or about the end of any calendar
year to the trustee for the Company accounts of each then active member.
Under the terms of the Plan, forfeitures are used to reduce subsequent Company
contributions. Employer contributions reflect a reduction of $119 and $273 in
1996 and 1995, respectively, for forfeitures as described in Article IV of the
Plan.
Plan earnings and losses are allocated to participant accounts relative to the
participant's account balance in each respective fund.
(4) Investment of Funds:
At December 31, 1996, there were a total of 4,053 participant accounts, which
includes accounts of Plan members who have terminated employment and deferred
their distribution to a later date. Participants direct the trustee to invest
their after-tax investment contributions and before-tax investment contributions
made on their behalf in any one or more of the following funds (the number of
participant-directed accounts in each fund at December 31, 1996 is also shown):
(a) in common stock of the Company or any securities convertible into such
common stock (the "Stone & Webster Stock Fund") - 4,037
participant-directed accounts;
(b) in common or capital stocks of other corporations or in securities
convertible into such stocks (the "Equity Fund") - 3,061 participant
accounts;
(c) in fixed-income investments of a short-term nature including, but not
limited to, governmental and corporate obligations, trust and participation
certificates, certificates of deposit and other evidence of indebtedness
(the "Short Term Fund") - 1,210 participant accounts;
(d) in common or capital stocks of selected corporations that are considered by
the trustee to be financially sound but undervalued and currently out of
favor (the "Value Equity Fund") - 2,904 participant accounts; or
(e) in guaranteed interest contracts with insurance companies (or other
financial institutions) which generally provide for repayment of amounts
deposited, plus accrued interest at predetermined interest rates over a
given period of time and in U.S. government and agency securities (the
"Assured Interest Fund") - 2,422 participant accounts.
Contributions invested in the Equity Fund, the Short Term Fund and the Value
Equity Fund are invested solely at the discretion of the trustee, whose
performance is subject to review by the Committee. The Committee is required to
report to the Board thereon at least annually.
Investment accounts for matched contributions and for unmatched contributions
are maintained for each member; if a member chooses to allocate contributions to
more than one Fund, the allocation between Funds within each account must be in
multiples of 10% of contributions.
Any member may as of the first day of any calendar quarter change the investment
directive as to contributions by giving 30 days notice. Any member may transfer
as of the first day of any calendar quarter all or part of the amount in
member's accounts in any Fund to another Fund by giving 30 days notice, except
that transfers into the Stone & Webster Stock Fund are not permitted and
transfers between the Assured Interest Fund and the Short Term Fund are not
permitted. Effective January 1, 1997, investment directives can be made on a
daily basis.
All Participating Company matching contributions will be invested in the Stone &
Webster Stock Fund and amounts in a member's company accounts may not be
transferred out of this Fund. Purchases of common stock of the Company may be
made by the trustee in the open market or from private sources (other than from
Directors and Officers of the Company) or from treasury shares or authorized but
unissued shares, or such stock may be contributed to the trustee by the Company.
It is the understanding of the Company that acquisitions of stock by the trustee
for the Stone & Webster Stock Fund have been made in the open market and from
the other Company qualified plan, the Employee Stock Ownership Plan. No such
acquisitions have been made of treasury shares or authorized but unissued
shares, nor has any such stock been contributed by the Company to the trustee,
to the date hereof. In the event that any common stock of the Company is
obtained by the trustee from the Company through purchase or contributions, it
is the policy of the Company that such shares be valued for purposes of the Plan
at the then current market value of the common stock of the Company. The Stone &
Webster Stock Fund is comprised of participant-directed and
nonparticipant-directed amounts. Participant-directed amounts represent employee
contributions. Nonparticipant-directed amounts represent employer contributions
and cannot be transferred out of the Stone & Webster Stock Fund.
The following table presents Plan investments held at December 31, 1996 and 1995
that represent 5% or more of the net assets available for benefits:
December 31, December 31,
Investments at Fair Value 1996 1995
Stone & Webster, Incorporated
Common Stock $50,319 $62,362
The Chase Manhattan Bank, N.A.
UBS Temporary Investment Fund 95,904 ---
(Shares held 95,904,392)
Putnam OTC Emerging Growth Fund
(Shares held 5,470,530) 80,198 ---
(5) Guaranteed Interest Contracts:
The Assured Interest Fund is administered so that the interest rate earned on
all contributions and transfers will be a blended rate, based on the weighted
average of the different guaranteed interest contracts and government securities
in the Fund. This blended rate will vary depending on the amounts invested in
future years under the various contracts obtained and on the timing of all
investments. The blended interest rate in the Assured Interest Fund was 6.32%
and 6.24% at December 31, 1996 and 1995, respectively, and was 6.44% and 6.49%
for the years ended December 31, 1996 and 1995, respectively. Guaranteed
interest contracts are generally referred to as "guaranteed" contracts because
the insurance company or other financial institution issuing the contract agrees
to pay an amount equal to the contributions, plus interest at a fixed rate for a
given period of time. However, contributions are deposited with the contract
issuer and become part of its general assets. The obligation of the contract
issuer to make the agreed payments is not secured, and it is not insured or
guaranteed by any third party.
Financial instruments which potentially subject the Plan to concentrations of
credit risk consist principally of contracts with insurance companies. The Plan
is exposed to credit loss in the event of non-performance by the companies in
which those investments are held. The Plan administrator does not anticipate
non-performance by any of the insurance companies. The Plan places its
guaranteed interest contracts with high-credit quality contracts issuers as
measured by independent credit rating companies and, by policy, limits the
amount of credit exposure to any one issuer.
(6) Loans Receivable:
The Plan contains a loan provision under which employees may borrow as much as
50% of their vested account balance up to a maximum of fifty thousand dollars.
The minimum loan is one thousand dollars. The term of loans is a minimum of one
year, with a maximum of five years, or fifteen years if used to purchase a
primary residence. During 1996 and 1995, the interest rate for loans was the
greater of the prime rate at The Chase Manhattan Bank, N.A., plus 1% or the rate
payable on 2-3 year Certificates of Deposit at The Chase Manhattan Bank, N.A.,
plus 2%. Effective January 1, 1997, the interest rate for loans was changed to
the prime rate, as recorded on the first day of the month by the Wall Street
Journal, plus 1%. The loans are collateralized by the balance in the
participant's account. Interest rates ranged from 9.25% to 9.75% during 1996.
(7) Other Receivables:
The other receivables balance represents funds held by the record-keeper
relating to participant requests for distributions which were canceled by the
participants prior to December 31, 1996. These amounts were returned to the Plan
subsequent to year end.
(8) Related Party Transactions:
The following summarizes the purchases of Stone & Webster, Incorporated common
stock from the Employee Stock Ownership Plan (ESOP) of Stone & Webster,
Incorporated and Participating Subsidiaries during 1996 and 1995.
- --------------------------------------------------------------------------------
Date of Number of Price Used to Value Purchased
Purchase Shares Purchase Date Amount From
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
03/10/95 4,233 33 1/4 @ 12/31/94 $ 141 ESOP
- --------------------------------------------------------------------------------
Purchase date prices are based on agreements made prior to the end of a calendar
quarter between the Plan and the ESOP, which generally establish the sale price
as the closing market value on the last business day of the quarter preceding
the sale.
The Stone & Webster Stock Fund invests in common shares of Stone & Webster,
Incorporated, the ultimate parent of Stone & Webster, Incorporated and
Participating Subsidiaries. As such, these transactions qualify as
parties-in-interest. The Plan purchased common shares of Stone & Webster,
Incorporated amounting to $3,231 and $5,213 during 1996 and 1995, respectively.
The Plan sold common shares of Stone & Webster, Incorporated amounting to $7,995
and $9,914 during 1996 and 1995, respectively.
(9) Tax Status:
The Internal Revenue Service has issued a determination that the Plan, which
includes provisions under section 401(k) of the Code, meets the requirements of
section 401(a) of the Code and therefore is exempt from Federal income taxes
under section 501(a) of the Code.
The Plan obtained its latest determination letter on July 13, 1995, in which the
Internal Revenue Service stated that the Plan was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan has been amended
since receiving the determination letter. However, the Plan administrator and
the Plan's tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
(10) Reconciliation to Form 5500:
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500.
1996
---------
Net Assets Available for Benefits as of
December 31, 1996 as stated in the
financial statements $305,981
Less: Distribution payable (3,958)
--------
Net Assets Available for Benefits per Form 5500 $302,023
` ========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
1996
---------
Distributions to participants as stated
in the financial statements $ 49,280
Add: Amounts allocated to withdrawing
participants at December 31, 1996 3,958
Less: Amounts allocated to withdrawing
participants at December 31, 1995 (14,005)
--------
Distributions to participants per the
Form 5500 $ 39,233
========
Amounts elected to be withdrawn by participants before the Plan's year end but
which have not been distributed from the Plan by year end are required to be
reported as a liability on form 5500 but are not accrued in the Statement of Net
Assets Available for Benefits.
(11) Termination and Extension of the Plan:
It is the desire of the Participating Companies that the Plan continue
indefinitely. However, the Company reserves the right to modify or terminate the
Plan at any time by action of the Board of Directors of the Company. In the
event of a termination of the Plan, all employees' company accounts with respect
to contributions made by the Participating Companies not theretofore vested will
become vested and will be valued as of the end of the calendar quarter following
termination. The Trust will continue after termination of the Plan, and will be
administered as if the Plan were otherwise in full force and effect. The amounts
in members' accounts will be distributed as determined by the Board. Also, any
Participating Company may, with the consent of the Board of Directors of the
Company, at any time, modify or discontinue the Plan as to it or as to any
segment of its employees.
(12) Subsequent Event:
On January 2, 1997, plan assets totaling $298,720 were transferred from Chase to
Putnam. Of this amount, $50,779 was transferred to the Stone & Webster Stock
Fund, $82,509 was transferred to the Putnam Voyager Fund, $80,252 was
transferred to the Putnam OTC Emerging Growth Fund; and $85,180 was transferred
to the Putnam Stable Value Fund.
<PAGE>
<TABLE>
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER, INCORPORATED
AND PARTICIPATING SUBSIDIARIES
Form 5500 - Item 27a - Schedule of Assets Held for Investment Purposes at
December 31, 1996
DESCRIPTION
% OF RATE COST MARKET ACCRUED YIELD
AMOUNT/SHARES ACCOUNT NUMBER MARKET MATURITY PRICE COST VALUE PRICE MARKET VALUE INCOME COST MARKET
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIXED INCOME - NON-CONVERTIBLE
SPECIAL INVESTMENTS
MISCELLANEOUS
STONE & WEBSTER INC OUTSTANDING LNS 100.000
1.00 * P 48113 100.00 4,920,284.60 4,920,284.60
1 TOTAL MISCELLANEOUS 4,920,284.60 4,920,284.60
1 TOTAL SPECIAL INVESTMENTS 4,920,284.60 4,920,284.60
INSURANCE CONTRACTS
ALLSTATE LIFE GIC GA #5662 100.000
1.00 * P 94902 100.00 6,747,360.48 6,747,360.48 42,375.91
ALLSTATE LIFE INS CO GIC CONTRACT 100.000
1.00 * P 94902 100.00 1,092,508.56 1,092,508.56 5,788.88
BUSINESS MENS ASSURANCE CO OF 100.000
1.00 * P 94902 100.00 3,045,106.29 3,045,106.29 18,640.46
CANADA LIFE ASSURANCE CO GIC CONTRACT 100.000
1.00 * P 94902 100.00 2,648,942.35 2,648,942.35 10,094.21
JOHN HANCOCK LIFE INS CO GIC 100.000
1.00 * P 94902 100.00 3,283,658.25 3,283,658.25 17,767.76
JOHN HANCOCK MUT LIFE INS CO 100.000
1.00 * P 94902 100.00 1,930,210.98 1,930,210.98 8,265.71
JOHN HANCOCK MUTUAL LIFE INS CO 100.000
1.00 * P 94902 100.00 2,812,822.15 2,812,822.15 14,565.60
JOHN HANCOCK MUTUAL LIFE INS CO 100.000
1.00 * P 94902 100.00 1,346,155.72 1,346,155.72 5,600.74
LIFE OF VIRGINIA GIC CONTRACT 100.000
1.00 * P 94902 100.00 3,088,922.04 3,088,922.04 13,277.75
LIFE OF VIRGINIA GIC CONT # GS-2612 100.000
1.00 * P 94902 100.00 2,961,959.14 2,961,959.14 14,837.73
LIFE OF VIRGINIA GIC CONTRACT GS-2754 100.000
1.00 * P 94902 100.00 2,581,090.68 2,581,090.68 10,529.02
NEW YORK LIFE GIC CONTRACT GA 30157 100.000
1.00 * P 94902 100.00 4,056,320.88 4,056,320.88 26,623.78
NORTHWESTERN NATL LIFE INS CO GIC 100.000
1.00 * P 94902 100.00 1,494,672.80 1,494,672.80 12,076.73
PROTECTIVE LIFE INS CO GIC 100.000
1.00 * P 94902 100.00 2,712,643.01 2,712,643.01 14,656.28
PRINCIPAL MUTUAL LIFE INS CO GIC 100.000
1.00 * P 94902 100.00 1,613,240.91 1,613,240.91 8,586.92
PRINCIPAL MUT LIFE INS CO GIC 4-6732 100.000
1.00 * P 94902 100.00 2,889,465.02 2,889,465.02 16,974.43
PROTECTIVE LIFE INS CO GA #1070 100.000
1.00 * P 94902 100.00 2,062,177.13 2,062,177.13 12,295.24
PRUDENTIAL INS CO AMER GA 5288-213 100.000
1.00 * P 94902 100.00 2,201,113.47 2,201,113.47 9,336.51
PRUDENTIAL GIC CONTRACT GA 5288-214 100.000
1.00 * P 94902 100.00 5,975,991.05 5,975,991.05 30,224.82
SUN AMERICA LIFE INS CO GIC 100.000
1.00 * P 94902 100.00 5,458,508.06 5,458,508.06 25,319.22
TRAVELERS LIFE INS CO GIC 7.090 100.000
1.00 * P 94902 100.00 7388.98 3,087,388.98 3,087,388.98 18,014.03
5,470,551.46 TOTAL INSURANCE CONTRACTS 63,090,257.95 63,090,257.95 335,851.73
5,470,552.46 TOTAL FIXED INCOME - NON-CONVERTIBLE 68,010,542.55 68,010,542.55 335,851.73
5,470,552.46 TOTAL FIXED INCOME 68,010,542.55 68,010,542.55 335,851.73
EQUITIES
COMMON STOCK
CHEMICALS
SPECIALTY CHEMICALS
WMX TECHNOLOGIES INC COM .640 32.500 1.9
P 90454 8,800.00
TOTAL SPECIALTY CHEMICALS 8,800.00
TOTAL CHEMICALS 8,800.00
ELECTRICAL/ELECTRONICS
ELECTRONICS
MOTOROLA INC COM .480 61.250 0.7
P 90454 600.00
TOTAL ELECTRONICS 600.00
TOTAL ELECTRICAL/ELECTRONICS 600.00
FINANCIAL SERVICES
OTHER FINANCE COMPANIES
ALLEGIANCE CORP COM .400 27.625 1.4
P 90454 400.00
TOTAL OTHER FINANCE COMPANIES 400.00
TOTAL FINANCIAL SERVICES 400.00
FOOD/HOUSEHOLD PRODUCTS
BEVERAGES & TOBACCO
<PAGE>
DESCRIPTION
% OF RATE COST MARKET ACCRUED YIELD
AMOUNT/SHARES ACCOUNT NUMBER MARKET MATURITY PRICE COST VALUE PRICE MARKET VALUE INCOME COST MARKET
PEPSICO INC COM .460 29.250 1.5
P 90454 4,600.00
TOTAL BEVERAGES & TOBACCO 4,600.00
TOTAL FOOD/HOUSEHOLD PRODUCTS 4,600.00
FUELS
OILS SERVICE
SCHLUMBERGER LTD COM 1.500 99.875 1.5
P 90454 5,250.00
TOTAL OILS SERVICE 5,250.00
TOTAL FUELS 5,250.00
HEALTH/PERSONAL CARE
DRUGS
MERCK & CO INC COM 1.600 79.625 2.0
P 90454 10,000.00
TOTAL DRUGS 10,000.00
HOSPITAL SERVICE
BAXTER INTL INC COM 1.130 41.000 2.7
P 90454 5,650.00
TOTAL HOSPITAL SERVICE 5,650.00
TOTAL HEALTH/PERSONAL CARE 15,650.00
MACHINERY
CONSTRUCTION & MATERIAL
STONE & WEBSTER INC COM .600 31.500 1.9
1,597,420.00 P 90453 100.00 27.08 43,252,989.61 50,318,730.00 2.2
1,597,420 TOTAL CONSTRUCTION & MATERIAL 43,252,989.61 50,318,730.00 2.2 1.9
INDUSTRIAL
COOPER INDS INC COM 1.320 42.125 3.1
P 90454 8,250.00
TOTAL INDUSTRIAL 8,250.00
1,597,420 TOTAL MACHINERY 43,252,989.61 50,318,730.00 8,250.00 2.2 1.9
METALS
OTHER METALS
OREGON METALLURGICAL CORP COM 32.250
P 94901 12,492.53
TOTAL OTHER METALS 12,492.53
TOTAL METALS 12,492.53
RETAIL MERCHANDISING
SPECIALTY STORES
PIER 1 IMPORTS INC COM .160 17.625 0.9
P 94901
TOTAL SPECIALTY STORES
TOTAL RETAIL MERCHANDISING
PUTNAM OTC EMERGE GROWTH FD STONE & 14.660
5,470,530.46 * P 94901 100.00 14.72 80,545,595.74 80,197,976.54
1,597,420 TOTAL COMMON STOCK 123,798,585.35 130,516,706.54 56,042.53 2.2 1.9
1,597,420 TOTAL EQUITIES 123,798,585.35 130,516,706.54 56,042.53 2.2 1.9
7,067,972.46 TOTAL PERMANENTLY INVESTED FUNDS 191,809,127.90 198,527,249.09 391,894.26 0.5 0.4
TEMPORARY INVESTMENTS
CHASE TEMPORARY INVESTMENT FUNDS
CHASE BK DOMESTIC LIQUIDITY FD 100.000
8,302,671.12 * P 94902 100.00 1.00 8,302,671.12 8,302,671.12
8,302,671.12 TOTAL CHASE TEMPORARY INVESTMENT FUNDS 8,302,671.12 8,302,671.12
MASTER NOTES
CMB CASH INVESTMENT FD 100.000
459,849.34 * P 90453 100.00 1.00 459,849.34 459,849.34
UBS TEMPORARY INVESTMENT FUND 100.000
82,454,526.03 * P 90454 85.97 1.00 82,454,526.03 82,454,526.03
13,449,866.64 * P 90455 14.02 1.00 13,449,866.64 13,449,866.64
95,904,392.67 TOTAL 100.00 95,904,392.67 95,904,392.67
96,364,242.01 TOTAL MASTER NOTES 96,364,242.01 96,364,242.01
104,666,913.13 TOTAL TEMPORARY INVESTMENTS 104,666,913.13 104,666,913.13
111,734,885.59 TOTAL INVESTMENTS CONTRACT POSITION 296,476,041.03 303,194,162.22 391,894.26
CASH 53,880.05 53,880.05
CASH PLUS TRADE RECEIVABLE/(PAYABLES) 53,880.05 53,880.05
EX-DIVIDEND 56,042.53 56,042.53
ACCRUALS 335,851.73 335,851.73
TOTAL INCOME RECEIVABLE 391,894.26 391,894.26
TOTAL ASSETS CONTRACT POSITION 296,921,815.34 303,639,936.53
NET ASSETS CONTRACT POSITION 296,921,815.34 303,639,936.53
</TABLE>
<PAGE>
<TABLE>
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER, INCORPORATED
AND PARTICIPATING SUBSIDIARIES
Form 5500 - Item 27d - Schedule of Reportable Transactions for the Year Ended December 31, 1996
(All dollar amounts, except per share amounts, are in thousands.)
<CAPTION>
Identity of Party Description of Asset Purchase Selling Lease Expense Cost of Current Net Gain
Involved (Note 1) (Including rate and Price Price Rental Incurred with Asset Value of or
maturity in case Transactions Asset (Loss)
of a Loan)
- ----------------- -------------------- -------- ------- ------ ------------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Chase Manhattan 201 Transactions - $100.00 -- -- -- $65,894 $65,894 0
Bank, N.A. Domestic Liquidity
Fund
The Chase Manhattan 140 Transactions - -- $100.00 -- -- $71,217 $71,217 0
Bank, N.A. Domestic Liquidity
Fund
The Chase Manhattan 13 Transactions - $14.72 -- -- -- $85,258 $85,258 0
Bank, N.A. Putnam OTC Emerging
Growth Fund
The Chase Manhattan 1 Transaction - -- $14.72 -- -- $4,713 $4,713 0
Bank, N.A. Putnam OTC Emerging
Growth Fund
The Chase Manhattan 50 Transactions - UBS $100.00 -- -- -- $106,654 $106,654 0
Bank, N.A. Temporary Investment
Fund
The Chase Manhattan 19 Transactions - UBS -- $100.00 -- -- $10,749 $10,749 0
Bank, N.A. Temporary Investment
Fund
The Chase Manhattan 2 Transactions - UBS $720.37 -- -- -- $35,850 $35,850 0
Bank, N.A. S&P 500 Index Fund
The Chase Manhattan 1 Transaction - UBS -- $741.61 -- -- $35,850 $36,907 $1,057
Bank, N.A. S&P 500 Index Fund
Notes:
1. All orders placed by The Chase Manhattan Bank, N.A., Trustee under the Employee Investment Plan of Stone & Webster,
Incorporated and Participating Subsidiaries.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EMPLOYEE INVESTMENT PLAN OF STONE & WEBSTER, INCORPORATED
AND PARTICIPATING SUBSIDIARIES
Form 5500 - Item 27e - Schedule of Nonexempt Transactions
for the year ended December 31, 1996
(All dollar amounts are in thousands.)
Purchase Sales Expenses
Name Affiliation Price Sales Price Gain/Loss Incurred
- --------------- ---------------- -------- ---------------------- --------
Stone & Webster, Ultimate Parent $3,231 $7,995 $1,733 $ ---
Incorporated of Stone &
Common Stock Webster,
Incorporated and
Participating
Subsidiaries
<PAGE>
COOPERS & LYBRAND L.L.P.
certified public accountants
CONSENT OF INDEPENDENT ACCOUNTANTS
________
We consent to the incorporation by reference in the Registration Statement of
Stone & Webster, Incorporated and Participating Subsidiaries on Form S-8 (File
No. 333-19829) of our report dated June 20, 1997, on our audits of the
statements of net assets available for benefits of the Employee Investment Plan
of Stone & Webster, Incorporated and Participating Subsidiaries as of December
31, 1996 and 1995, and the related statement of changes in net assets available
for benefits and supplemental schedules for the year ended December 31, 1996,
which report is included in this Annual Report on Form 11-K for the year ended
December 31, 1996.
/s/ COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 27, 1997
<PAGE>
STONE & WEBSTER, INCORPORATED
245 SUMMER STREET
BOSTON, MASSACHUSETTS 02210
June 27, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Annual Report on Form 11-K
Ladies and Gentlemen:
On behalf of Stone & Webster, Incorporated, a Delaware corporation,
we are filing herewith an Annual Report on Form 11-K, for the year ended
December 31, 1996, Commission File Number 1-1228, relating to the Employee
Investment Plan of Stone & Webster, Incorporated and Participating Subsidiaries.
If the Staff has any questions regarding this Form 11-K, please feel free
to contact the undersigned at (617) 589-7473.
Very truly yours,
JOHN P. MCGANN
John P. McGann
Associate General Counsel
and
Senior Assistant Secretary
