-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pq07Kzhuj9zVeb1mJLbMSeBUJy8pf33dwBBi8VG6JyAPD69wrgXQSLylv77DwG1c /SaknM0tZczVJRRBO4KL0g== 0000950117-99-001319.txt : 19990628 0000950117-99-001319.hdr.sgml : 19990628 ACCESSION NUMBER: 0000950117-99-001319 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WITCO CORP CENTRAL INDEX KEY: 0000107889 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 131870000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-04654 FILM NUMBER: 99652472 BUSINESS ADDRESS: STREET 1: ONE AMERICAN WAY CITY: GREENWICH STATE: CT ZIP: 06831 BUSINESS PHONE: 2035522000 MAIL ADDRESS: STREET 1: ONE AMERICAN LANE CITY: GREENWICH STATE: CT ZIP: 06831 FORMER COMPANY: FORMER CONFORMED NAME: WITCO CHEMICAL CORP DATE OF NAME CHANGE: 19851117 FORMER COMPANY: FORMER CONFORMED NAME: WITCO CHEMICAL CO INC DATE OF NAME CHANGE: 19681203 11-K 1 WITCO CORPORATION 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [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, 1998 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 1-4654 A. Full title of Plan: WITCO CORPORATION EMPLOYEE RETIREMENT SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office WITCO CORPORATION ONE AMERICAN LANE GREENWICH, CONNECTICUT 06831-2559 SIGNATURE The Plan Pursuant to the requirements of the Securities Exchange Act of 1934 and the administrators of the Witco Corporation Employee Retirement Savings Plan have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized. WITCO CORPORATION EMPLOYEE RETIREMENT SAVINGS PLAN Date: June 25, 1999 By /S/ Brian J. Dick --------------------------------------- Brian J. Dick Vice President of Finance and Controller of Witco Corporation Witco Corporation Employee Retirement Savings Plan Financial Statements And Supplemental Schedules Years Ended December 31, 1998 and 1997 CONTENTS Report of Independent Auditors.........................................................F-1 Financial Statements Statements of Assets Available for Benefits, with Fund Information (Modified Cash Basis)as of December 31, 1998 and 1997............................................F-2 Statements of Changes in Assets Available for Benefits, with Fund Information (Modified Cash Basis) for the Years Ended December 31, 1998 and 1997...................F-3 Notes to Financial Statements (Modified Cash Basis)....................................F-9 Supplemental Schedules Schedule of Assets Held for Investment Purposes.......................................F-14 Schedule of Reportable Transactions...................................................F-15 Consent of Independent Auditors ................................................Exhibit 23
Report of Independent Auditors Management and Employees of Witco Corporation We have audited the accompanying statements of assets available for benefits (modified cash basis) of the Witco Corporation Employee Retirement Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in assets available for benefits (modified cash basis) for the years then ended. 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. As described in Note 1, the financial statements and supplemental schedules were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. In our opinion, the financial statements referred to above present fairly, in all material respects, information regarding the Plan's assets available for benefits (modified cash basis) as of December 31, 1998 and 1997, and changes therein (modified cash basis) for the years then ended, on the basis of accounting described in Note 1. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules (modified cash basis) of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended are presented for purpose of additional analysis and are not a required part of the 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. These supplemental schedules are the responsibility of the Plan's management. The Fund Information in the statement of assets available for benefits and the statement of changes in assets available for benefits is presented for purposes of additional analysis rather than to present the assets available for benefits and the changes in assets available for benefits of each fund. The supplemental schedules (modified cash basis) and Fund Information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ERNST & YOUNG LLP Stamford, Connecticut June 18, 1999 F-1 Witco Corporation Employee Retirement Savings Plan Statements of Assets Available for Benefits, with Fund Information (Modified Cash Basis)
DECEMBER 31 1998 1997 ---------------------------------------- ASSETS Investments (Notes 2 and 4): Witco Common Stock Fund $ 10,211,683 $ 18,245,434 Managed Income Portfolio II 50,905,087 52,516,728 Mutual Funds: Fidelity Magellan Fund 39,533,984 29,181,410 Fidelity Asset Manager Fund 14,521,967 13,692,926 Fidelity International Growth and Income Fund 5,823,524 5,615,485 Fidelity Equity Income Fund 21,109,390 22,228,018 Fidelity Asset Manager: Growth Fund 7,924,114 6,810,220 Fidelity Growth Company Fund 15,230,895 12,394,428 Fidelity Asset Manager: Income Fund 1,747,579 1,629,018 Fidelity Institutional Short-Intermediate Government Fund 5,809,452 5,636,394 Participant Loans Receivable 3,063,427 3,013,616 ---------------------------------------- Assets available for benefits $175,881,102 $170,963,677 ========================================
See notes to financial statements. F-2 Witco Corporation Employee Retirement Savings Plan Statement of Changes in Assets Available for Benefits, with Fund Information (Modified Cash Basis) Year Ended December 31, 1998
Fidelity Witco Managed Fidelity Asset Common Income Magellan Manager Stock Fund Portfolio II Fund Fund ---------------------------------------------------------------------------- Additions (deductions) to assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $(10,962,128) $ - $ 7,833,560 $ (551,189) Dividends - 3,014,433 1,804,215 2,624,832 ------------ ------------ ------------ ------------ (10,962,128) 3,014,433 9,637,775 2,073,643 ------------ ------------ ------------ ------------ Contributions Participants 1,464,830 1,790,921 2,170,029 722,929 Employer 391,264 565,197 583,293 228,029 ------------ ------------ ------------ ----------- 1,856,094 2,356,118 2,753,322 950,958 ------------ ------------ ------------ ----------- Loan repayments (interest and principal) 187,244 438,112 280,910 133,625 ------------ ------------ ------------ ------------ Total additions (deductions) (8,918,790) 5,808,663 12,672,007 3,158,226 ------------ ------------ ------------ ------------ Deductions from assets attributed to: Withdrawals (1,457,207) (7,145,229) (3,699,131) (1,667,607) Administrative expenses (7,179) (112,446) (3,389) (304) Loan withdrawals (173,758) (361,324) (296,649) (134,744) ------------ ------------ ------------ ------------ Total deductions (1,638,144) (7,618,999) (3,999,169) (1,802,655) ------------ ------------ ------------ ------------ Net increase (decrease) prior to interfund transfers (10,556,934) (1,810,336) 8,672,838 1,355,571 Interfund transfers 2,523,183 198,695 1,679,736 (526,530) ------------ ------------ ------------ ------------ Net increase (decrease) (8,033,751) (1,611,641) 10,352,574 829,041 Assets available for benefits at beginning of year 18,245,434 52,516,728 29,181,410 13,692,926 ------------ ------------ ------------ ------------ Assets available for benefits at end of year $ 10,211,683 $50,905,087 $ 39,533,984 $ 14,521,967 ============ ============ ============ ============
See notes to financial statements. F-3 Witco Corporation Employee Retirement Savings Plan Statement of Changes in Assets Available for Benefits, with Fund Information (Modified Cash Basis) (continued) Year Ended December 31, 1998
Fidelity Fidelity Fidelity Asset Fidelity International Equity Manager: Growth Growth and Income Growth Company Income Fund Fund Fund Fund --------------------------------------------------------------------------- Additions (deductions) to assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ 332,127 $ 1,251,149 $ 134,458 $ 2,194,942 Dividends 193,530 1,244,761 1,096,794 1,061,958 ------------ ------------ ------------ ------------ 525,657 2,495,910 1,231,252 3,256,900 ------------ ------------ ------------ ------------ Contributions Participants 467,931 1,479,510 639,243 1,189,327 Employer 138,834 381,615 155,324 295,108 ------------ ------------ ------------ ------------ 606,765 1,861,125 794,567 1,484,435 ------------ ------------ ------------ ------------ Loan repayments (interest and principal) 56,731 168,780 68,978 115,886 ------------ ------------ ------------ ------------ Total additions (deductions) 1,189,153 4,525,815 2,094,797 4,857,221 ------------ ------------ ------------ ------------ Deductions from assets attributed to: Withdrawals (492,636) (2,831,583) (887,241) (992,737) Administrative expenses (70) (664) (47) (172) Loan withdrawals (40,957) (183,935) (70,881) (89,144) ------------ ------------ ------------ ------------ Total deductions (533,663) (3,016,182) (958,169) (1,082,053) ------------ ------------ ------------ ------------ Net increase (decrease) prior to interfund transfers 655,490 1,509,633 1,136,628 3,775,168 Interfund transfers (447,451) (2,628,261) (22,734) (938,701) ------------ ------------ ------------ ------------ Net increase (decrease) 208,039 (1,118,628) 1,113,894 2,836,467 Assets available for benefits at beginning of year 5,615,485 22,228,018 6,810,220 12,394,428 ------------ ------------ ------------ ------------ Assets available for benefits at end of year $ 5,823,524 $ 21,109,390 $ 7,924,114 $ 15,230,895 ============ ============ ============ ============
See notes to financial statements. F-4 Witco Corporation Employee Retirement Savings Plan Statement of Changes in Assets Available for Benefits, with Fund Information (Modified Cash Basis) (continued) Year Ended December 31, 1998
Fidelity Institutional Fidelity Asset Short- Manager: Intermediate Participant Income Government Loans Fund Fund Receivable Total --------------------------------------------------------------------------- Additions (deductions) to assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ 20,466 $ 16,823 $ -- $ 270,208 Dividends 151,002 364,353 -- 11,555,878 ------------ ------------ ------------ ------------- 171,468 381,176 -- 11,826,086 ------------ ------------ ------------ ------------- Contributions Participants 100,944 320,869 -- 10,346,533 Employer 26,936 106,385 -- 2,871,985 ------------ ------------ ------------ ------------- 127,880 427,254 -- 13,218,518 ------------ ------------ ------------ ------------- Loan repayments (interest and principal) 13,817 78,242 (1,243,974) 298,351 ------------ ------------ ------------ ------------- Total additions (deductions) 313,165 886,672 (1,243,974) 25,342,955 ------------ ------------ ------------ ------------- Deductions from assets attributed to: Withdrawals (247,951) (738,972) (140,815) (20,301,109) Administrative expenses (20) (130) -- (124,421) Loan withdrawals (22,626) (60,582) 1,434,600 -- ------------ ------------ ------------ ------------- Total deductions (270,597) (799,684) 1,293,785 (20,425,530) ------------ ------------ ------------ ------------- Net increase (decrease) prior to interfund transfers 42,568 86,988 49,811 4,917,425 Interfund transfers 75,993 86,070 -- -- ------------ ------------ ------------ ------------- Net increase (decrease) 118,561 173,058 49,811 4,917,425 Assets available for benefits at beginning of year 1,629,018 5,636,394 3,013,616 170,963,677 ------------ ------------ ------------ ------------- Assets available for benefits at end of year $ 1,747,579 $ 5,809,452 $ 3,063,427 $175,881,102 ============ ============ ============ ============= See notes to financial statements. F-5 Witco Corporation Employee Retirement Savings Plan Statement of Changes in Assets Available for Benefits, with Fund Information (Modified Cash Basis) Year Ended December 31, 1997
Witco Managed Fidelity Common Blended Income Magellan Stock Fund Income Fund Portfolio II Fund ----------------- ----------------- ------------------ ----------------- Additions (deductions) to assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ 4,657,944 $ - $ - $ 4,231,972 Interest - 3,016,032 517,080 - Dividends - - 19,193 1,874,822 ----------------- ----------------- ------------------ ----------------- 4,657,944 3,016,032 536,273 6,106,794 ----------------- ----------------- ------------------ ----------------- Contributions Participants 1,412,818 1,785,196 376,255 1,922,116 Employer 379,482 511,951 109,049 522,645 ----------------- ----------------- ------------------ ----------------- 1,792,300 2,297,147 485,304 2,444,761 ----------------- ----------------- ------------------ ----------------- Loan repayments (interest and principal) 229,191 434,479 74,541 273,120 ----------------- ----------------- ------------------ ----------------- Total additions (deductions) 6,679,435 5,747,658 1,096,118 8,824,675 ----------------- ----------------- ------------------ ----------------- Deductions from assets attributed to: Withdrawals (1,953,030) (10,936,077) (1,275,192) (4,472,061) Administrative expenses (4,781) 44,340 (31,380) (5,192) Loan withdrawals (220,554) (304,320) (58,823) (215,661) ----------------- ----------------- ------------------ ----------------- Total deductions (2,178,365) (11,196,057) (1,365,395) (4,692,914) ----------------- ----------------- ------------------ ----------------- Net increase (decrease) prior to interfund transfers 4,501,070 (5,448,399) (269,277) 4,131,761 Interfund transfers (58,780) (56,003,818) 52,786,005 994,207 ----------------- ----------------- ------------------ ----------------- Net increase (decrease) 4,442,290 (61,452,217) 52,516,728 5,125,968 Assets available for benefits at beginning of year 13,803,144 61,452,217 - 24,055,442 ----------------- ----------------- ------------------ ----------------- Assets available for benefits at end of year $18,245,434 $ - $52,516,728 $29,181,410 ================= ================= ================== =================
See notes to financial statements. F-6 Witco Corporation Employee Retirement Savings Plan Statement of Changes in Assets Available for Benefits, with Fund Information (Modified Cash Basis) (continued) Year Ended December 31, 1997
Fidelity Fidelity Fidelity Fidelity Asset Fidelity Asset International Equity Manager Growth Manager Growth and Income Growth Company Fund Income Fund Fund Fund Fund ---------------- ---------------- ---------------- ------------------- --------------- Additions (deductions) to assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ 1,476,708 $ 89,767 $ 3,628,570 $ 656,907 $ 829,133 Interest - - - - - Dividends 1,210,271 333,415 1,180,930 707,274 1,177,132 ---------------- ---------------- ---------------- ------------------- ---------------- 2,686,979 423,182 4,809,500 1,364,181 2,006,265 ---------------- ---------------- ---------------- ------------------- --------------- Contributions Participants 848,668 522,512 1,331,292 447,618 1,103,613 Employer 265,088 151,126 338,111 121,919 275,275 ---------------- ---------------- ---------------- ------------------- ---------------- 1,113,756 673,638 1,669,403 569,537 1,378,888 ---------------- ---------------- ---------------- ------------------- --------------- Loan repayments (interest and principal) 153,123 75,688 216,617 81,507 136,289 ---------------- ---------------- ---------------- ------------------- -------------- Total additions (deductions) 3,953,858 1,172,508 6,695,520 2,015,225 3,521,442 ---------------- ---------------- ---------------- ------------------- -------------- Deductions from assets attributed to: Withdrawals (2,958,851) (1,099,848) (2,602,461) (897,408) (1,648,611) Administrative expenses (5,261) (217) (5,953) (722) (531) Loan withdrawals (146,815) (71,313) (151,228) (48,715) (93,278) ---------------- ---------------- ---------------- ------------------- --------------- Total deductions (3,110,927) (1,171,378) (2,759,642) (946,845) (1,742,420) ---------------- ---------------- ---------------- ------------------- --------------- Net increase (decrease) prior to interfund transfers 842,931 1,130 3,935,878 1,068,380 1,779,022 Interfund transfers (439,478) (512,439) 3,640,303 609,702 (411,874) ---------------- ---------------- ---------------- ------------------- --------------- Net increase (decrease) 403,453 (511,309) 7,576,181 1,678,082 1,367,148 Assets available for benefits at beginning of year 13,289,473 6,126,794 14,651,837 5,132,138 11,027,280 ---------------- ---------------- ---------------- ------------------- ---------------- Assets available for benefits at end of year $13,692,926 $5,615,485 $22,228,018 $6,810,220 $12,394,428 ================ ================ ================ =================== ================
See notes to financial statements. F-7 Witco Corporation Employee Retirement Savings Plan Statement of Changes in Assets Available for Benefits, with Fund Information (Modified Cash Basis) (continued) Year Ended December 31, 1997
Fidelity Institutional Fidelity Asset Short- Manager: Intermediate Participant Income Government Loans Fund Fund Receivable Total ------------------ ------------------ -------------------- ------------------- Additions (deductions) to assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ 76,792 $ (4,278) $ -- $ 15,643,515 Interest -- -- -- 3,533,112 Dividends 112,314 387,777 -- 7,003,128 -------------------------------------------------------------------------- 189,106 383,499 -- 26,179,755 -------------------------------------------------------------------------- Contributions Participants 85,974 415,212 -- 10,251,274 Employer 25,105 136,729 -- 2,836,480 -------------------------------------------------------------------------- 111,079 551,941 -- 13,087,754 -------------------------------------------------------------------------- Loan repayments (interest and principal) 13,596 74,962 (1,439,806) 323,307 -------------------------------------------------------------------------- Total additions (deductions) 313,781 1,010,402 (1,439,806) 39,590,816 -------------------------------------------------------------------------- Deductions from assets attributed to: Withdrawals (433,484) (999,208) (522,200) (29,798,431) Administrative expenses (662) (95) -- (10,454) Loan withdrawals (7,417) (63,576) 1,381,700 -- -------------------------------------------------------------------------- Total deductions (441,563) (1,062,879) 859,500 (29,808,885) -------------------------------------------------------------------------- Net increase (decrease) prior to interfund transfers (127,782) (52,477) (580,306) 9,781,931 Interfund transfers 116,044 (719,872) -- -- -------------------------------------------------------------------------- Net increase (decrease) (11,738) (772,349) (580,306) 9,781,931 Assets available for benefits at beginning of year 1,640,756 6,408,743 3,593,922 161,181,746 -------------------------------------------------------------------------- Assets available for benefits at end of year $ 1,629,018 $ 5,636,394 $ 3,013,616 $ 170,963,677 ==========================================================================
See notes to financial statements. F-8 Witco Corporation Employee Retirement Savings Plan Notes to Financial Statements (Modified Cash Basis) Years Ended December 31, 1998 and 1997 1. SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING BASIS The accompanying financial statements have been prepared on a modified basis of cash receipts and disbursements; consequently, contributions, interest income and the related assets are recognized when received rather than when earned, and expenses are recognized when paid rather than when the obligation is incurred. Accordingly, the accompanying financial statements are presented on a comprehensive basis of accounting other than generally accepted accounting principles. INVESTMENT VALUATION Investments are stated at fair value. Fair value is determined by quoted market prices, if an active market exists, or redemption values, which approximate market value. GAINS/(LOSSES) The change in the difference between the fair value and the cost of investments is reflected as unrealized gains/(losses) in the aggregate fair value of investments. Realized gains and losses on the disposal of investments are calculated as the difference between the proceeds received and the cost of investments sold. USE OF ESTIMATES The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. 2. DESCRIPTION OF THE PLAN The Witco Corporation Employee Retirement Savings Plan ("Plan") is a defined contribution plan established for the purpose of encouraging and assisting eligible employees of Witco Corporation and subsidiary companies ("Witco" or "Company") in following a systematic savings program. Fidelity Investments is the trustee and recordkeeper of the Plan. An employee becomes eligible to participate in the Plan on the first day of the month following 31 days of service. The Company's matching contribution is 50% of the basic employee contributions up to 6% of their base salary except for certain collective bargaining employees whose participation is based upon the terms of their respective collective bargaining agreements. In addition, employees may elect to make supplementary after-tax and pre-tax contributions of 1% to 9% of their base salary except for certain collective bargaining employees who are limited based upon the terms of their respective collective bargaining agreements. F-9 Witco Corporation Employee Retirement Savings Plan Notes to Financial Statements (continued) (Modified Cash Basis) 2. DESCRIPTION OF THE PLAN (CONTINUED) The Plan permits pre-tax and after-tax contributions by participants. Certain collective bargaining employees are excluded from making after-tax contributions. Participants may direct the pre-tax contributions and after-tax contributions, including Company matching contributions, to be invested in one or more of ten funds. The ten funds include a Witco Common Stock Fund, and various diversified bond and equity funds as described below. WITCO COMMON STOCK FUND - invests primarily in Witco company stock, and a portion in money market instruments for liquidity. MANAGED INCOME PORTFOLIO II - is a stable value fund. It seeks to provide a competitive level of income over time while preserving the value of investments by purchasing investment contracts issued by major insurance companies and banks and short-term instruments. FIDELITY MAGELLAN FUND - is a growth fund. It seeks long-term capital appreciation by investing in the stocks of well-known and lesser known foreign and domestic companies. FIDELITY ASSET MANAGER FUND - is an asset allocation fund. It seeks high total return with reduced risk over the long-term by allocating its assets among domestic and foreign stocks, bonds and short-term and money market instruments. FIDELITY INTERNATIONAL GROWTH AND INCOME FUND - seeks capital growth and current income, by investing principally in foreign equity securities. FIDELITY EQUITY INCOME FUND - is a growth and income fund. It seeks reasonable income by investing in income-producing equity securities. The Fund tries to achieve a yield that exceeds the composite yield on securities composing the S&P 500. FIDELITY ASSET MANAGER: GROWTH FUND - is an asset allocation fund. It seeks to maximize total return over the long-term by allocating its assets among and across domestic and foreign stocks, bonds and short-term and money market instruments. FIDELITY GROWTH COMPANY FUND - is a growth fund. It seeks long-term capital appreciation by investing primarily in common stocks and securities convertible into common stocks. FIDELITY ASSET MANAGER: INCOME FUND - is an asset allocation fund. It seeks a high level of current income by allocating its assets among domestic and foreign stocks, bonds and short-term and money market instruments. FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT FUND - is an income fund. It seeks a high level of current income consistent with preservation of principal by investing exclusively in U.S. government securities. F-10 Witco Corporation Employee Retirement Savings Plan Notes to Financial Statements (continued) (Modified Cash Basis) 2. DESCRIPTION OF THE PLAN (CONTINUED) Participants are immediately vested in contributions made by them and become fully vested in the contributions made by Witco after they have completed three consecutive years of participation in the Plan or five years of service to Witco. All former Sherex participants are immediately vested in contributions made by Witco. Participants who have been terminated for reasons beyond their own control become fully vested in Witco's contributions upon their termination. Non-vested contributions by Witco which have been forfeited by participants are applied to reduce future contributions by Witco. Terminated participants whose account balance is in excess of $5,000 ($3,500 in 1997) may elect to defer receipt of such amounts until the required distribution date. Employees participating in the Plan will not be subject to federal income tax on amounts contributed to the Plan by Witco and earnings allocated to their accounts until such time that their participating interest in the Plan is distributed to them. The Plan provides that participants may elect to have their pre-tax contributions, subject to certain limitations, excluded from taxable income pursuant to Section 401(k) of the Internal Revenue Code. Employees are permitted to make hardship withdrawals if certain criteria are met. Only one hardship withdrawal a year is permitted. Employees may borrow up to the lesser of $50,000 or 50% of their vested account balance at an interest rate of 1% above prime. Loan repayments are made automatically through payroll deductions. Witco, by action of its Board of Directors, may suspend the operation of the Plan for any year by omitting all or part of the employer contributions. In addition, Witco may terminate or amend the Plan for any reason, at any time, provided that no such termination or amendment shall permit any of the funds established pursuant to this Plan to be used for any purpose other than the exclusive benefit of the participating employees. Upon termination of the Plan, the rights of members to the benefits accrued under the Plan to the date of termination shall be nonforfeitable. 3. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated December 14, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code"), and therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Employee Benefits Committee of Witco Corporation believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore believes that the Plan is qualified and the related trust is tax exempt. F-11 Witco Corporation Employee Retirement Savings Plan Notes to Financial Statements (continued) (Modified Cash Basis) 4. INVESTMENTS The fair value of individual investments that represent 5% or more of the Plan's net assets are as follows:
DECEMBER 31 1998 1997 ------------------ ----------------- Witco Common Stock Fund* $10,211,683 $18,245,434 Managed Income Portfolio II 50,905,087 52,516,728 Fidelity Magellan Fund 39,533,984 29,181,410 Fidelity Asset Manager Fund 14,521,967 13,692,926 Fidelity Equity Income Fund 21,109,390 22,228,018 Fidelity Growth Company Fund 15,230,895 12,394,428 *Party-in-interest investment
5. YEAR 2000 ISSUE (UNAUDITED) The Plan Sponsor is currently in the process of addressing date sensitive issues associated with Year 2000. The Plan Sponsor expects to implement the final phase of its Year 2000 project on October 1, 1999 and does not expect it to have a significant effect on plan operations. The Plan Sponsor has ascertained that failure to alleviate the Year 2000 issue could result in possible system failures or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions. The Plan Sponsor is in the process of developing contingency plans for its critical activities, which involve, among other things, manual and external processing of transactions. Development of such plans will be approximately 95% complete by the end of the second quarter of 1999, with the remaining plans expected to be completed during July 1999. The third party service provider has informed the Plan Sponsor that all of its mission critical systems have been made Year 2000 compliant and contingency plans have been drafted and approved. The third party service provider is currently in the process of performing external testing which is expected to be completed before the end of 1999. 6. SUBSEQUENT EVENTS On June 1, 1999, Witco and Crompton & Knowles Corporation ("C&K") announced their intention to merge. Under the agreement, each share of C&K common stock will be converted into one share of C&K Witco Corporation ("Newco") and each share of Witco common stock will be exchanged for 0.9242 shares of common stock of Newco. On June 23, 1999, Witco announced an agreement to sell its Oleochemical and Derivaties business. Completion of this sale may have an impact on the assets of the Plan. F-12 SUPPLEMENTAL SCHEDULES F-13 Witco Corporation Employee Retirement Savings Plan EIN-13-1870000 Plan 034 Line 27a - Schedule of Assets Held for Investment Purposes December 31, 1998
SHARES, UNITS OR PRINCIPAL CURRENT DESCRIPTION AMOUNT COST VALUE - ------------------------------------------------------------------------------------------------------------------ Witco Common Stock Fund* 1,699,115 $16,290,589 $10,211,683 Managed Income Portfolio II 50,905,087 50,905,087 50,905,087 Fidelity Magellan Fund 327,214 28,283,635 39,533,984 Fidelity Asset Manager Fund 835,076 13,660,753 14,521,967 Fidelity International Growth and Income Fund 278,504 5,230,988 5,823,524 Fidelity Equity Income Fund 380,007 16,389,908 21,109,390 Fidelity Asset Manager: Growth Fund 424,203 7,071,953 7,924,114 Fidelity Growth Company Fund 298,528 11,940,760 15,230,895 Fidelity Asset Manager: Income Fund 141,849 1,645,564 1,747,579 Fidelity Institutional Short-Intermediate Government Fund 614,757 5,836,826 5,809,452 Participant Loans Receivable 3,063,427
*Party-in-interest investment F-14 Witco Corporation Employee Retirement Savings Plan EIN-13-1870000 Plan 034 Line 27d - Schedule of Reportable Transactions Year Ended December 31, 1998 Series of transactions during the year ended December 31, 1998, exceeding 5% of the current value of Plan assets reportable per Department of Labor regulations 2520.103-6 are listed below. There were no category (i), (ii), or (iv) reportable transactions during 1998.
Number Aggregate Number of Value of of Description Purchase Purchases/ Sales Identity of Party Involved of Asset Transactions Deposits* Transactions - ------------------------------------------------------------------------------------------------------------ CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS: Witco Corporation Witco Common Stock Fund 243 $ 9,289,408 210 Fidelity Investments Managed Income Portfolio II 242 15,799,960 237 Fidelity Investments Magellan Fund 243 10,923,818 222 Fidelity Investments Equity Income Fund 236 5,807,186 200 Aggregate Value of Cost of Description Sales/ Sales/ Identity of Party Involved of Asset Withdrawals* Withdrawals Gain/(Loss) - ----------------------------------------------------------------------------------------------------------------- CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS: Witco Corporation Witco Common Stock Fund $ 6,361,030 $ 6,357,402 $ 3,628 Fidelity Investments Managed Income Portfolio II 17,411,601 17,411,601 -- Fidelity Investments Magellan Fund 8,404,804 7,159,538 1,245,266 Fidelity Investments Equity Income Fund 8,176,963 6,855,067 1,321,896
* Current value at date of transaction. F-15 EX-23 2 EXHIBIT 23 Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Form S-8, No. 33-48806 and No. 333-66033) pertaining to the Witco Corporation Employee Retirement Savings Plan of our report dated June 18, 1999, with respect to the financial statements and schedules of the Witco Corporation Employee Retirement Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1998. /s/ ERNST & YOUNG LLP Stamford, Connecticut June 24, 1999 -----END PRIVACY-ENHANCED MESSAGE-----