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FINANCIAL STATEMENTS: |
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3 | ||||
4 | ||||
5 | ||||
SUPPLEMENTAL SCHEDULE |
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11 | ||||
NOTE: All other schedules required by Section 2520.103-10 of the Department of
Labors Rules and Regulations for Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted because they are not applicable |
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12 | ||||
13 | ||||
14 | ||||
16 |
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2007 | 2006 | |||||||
ASSETS: |
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Investments as fair value: |
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Mutual funds |
$ | 7,380,758 | $ | 6,765,811 | ||||
Common stock: |
||||||||
Florida Rock
Industries, Inc. |
| 627,283 | ||||||
Patriot
Transportation Holding, Inc. |
110,616 | 117,350 | ||||||
Vulcan
Materials Company |
275,036 | | ||||||
Participant loans |
304,442 | 329,957 | ||||||
Total investments |
8,070,852 | 7,840,401 | ||||||
Receivables: |
||||||||
Employer contributions |
610 | 171 | ||||||
Participant contributions |
| 2,797 | ||||||
Dividends receivable |
8,952 | 10,688 | ||||||
Total receivables |
9,562 | 13,656 | ||||||
Cash |
240 | 629 | ||||||
EXCESS CONTRIBUTION REFUNDS PAYABLE |
934 | | ||||||
NET ASSETS AVAILABLE FOR BENEFITS |
$ | 8,079,720 | $ | 7,854,686 | ||||
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ADDITIONS TO NET ASSETS ATTRIBUTED TO: |
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Investments income: |
||||
Net appreciation in fair value of investments |
$ | 214,980 | ||
Dividends and interest |
524,370 | |||
Total investment income |
739,350 | |||
Contributions: |
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Employer |
26,146 | |||
Participants |
76,485 | |||
Total contributions |
102,631 | |||
Total additions |
841,981 | |||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: |
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Benefits paid to participants |
610,870 | |||
Plan expenses |
6,077 | |||
Total deductions |
616,947 | |||
NET INCREASE |
225,034 | |||
NET ASSETS AVAILABLE FOR BENEFITS: |
||||
Beginning of year: |
7,854,686 | |||
End of year: |
$ | 8,079,720 | ||
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1. | DESCRIPTION OF THE PLAN | |
The following description of The Arundel Corporation Profit Sharing and Savings Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plans provisions. | ||
General The Plan is a defined contribution retirement plan established by The Arundel Corporation, a wholly owned subsidiary of Florida Rock Industries, Inc. (Florida Rock), effective June 23, 1984. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). | ||
On November 16, 2007 Vulcan Materials Company (the Company) acquired 100% of the outstanding common stock of Florida Rock. In accordance with the merger agreement, Plan participants had the option to elect to receive $67 per share to be invested in the STI Classic Prime Quality Money Market Fund for each Florida Rock share held, or 0.63 of a share of common stock of the Company, subject to proration. The Plan ceased accepting new participants, allowing employee deferrals, and making employer matching contributions. | ||
Plan Administration The Plan is administered by the Company. The Plan Trustee is SunTrust Bank, N.A. (Trustee). Permissible administrative expenses are paid by the Trustee out of the Plans gross investment income, unless the Company, at its discretion, agrees to pay such expenses. | ||
Contributions Plan participants may elect to contribute a portion of their annual pre-tax compensation, as defined in the Plan document. The annual maximum deferral percentage for highly compensated employees is calculated based on the average actual deferral percentage of non-highly compensated employees for the prior plan year plus 2%. | ||
The Company provides a matching contribution of 50% of the first 3% of a participants annual pre-tax compensation. | ||
The Company may provide an annual profit sharing contribution to the Plan in an amount determined by the Board of Directors. During 2007, the Company did not make any profit sharing contributions to the Plan. | ||
All contributions are subject to the limitations set forth in the Internal Revenue Code (IRC). |
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Vesting Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Companys matching and profit sharing contributions is based on years of service as follows (prior to the full vesting that occurred in connection with the acquisition): |
Vested | ||||||
Percentage | ||||||
Years of service: | ||||||
1 | 0 | % | ||||
2 | 25 | |||||
3 | 50 | |||||
4 | 75 | |||||
5 | 100 |
Effective April 1, 2007, the Plan was amended to allow participants to immediately become 100% vested in their accounts in the event of a change in control. | ||
Participant Accounts Each participants account is credited with the participants contributions, their portion of the Companys matching and profit sharing contributions, and investment earnings. Allocation of the Companys profit sharing contributions are based on a percentage of the participants Included Compensation, as defined in the Plan document. The benefit to which a participant is entitled is the benefit that can be provided from the participants vested account. | ||
Participant Loans Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of the vested portion of their account balance. The loans are secured by the balance in the participants account and bear interest at rates determined by the Plan Administrator at the time of approval (averaging 7.19% and 6.8% at December 31, 2007 and 2006, respectively). Principal and interest are paid over a stipulated period of time through payroll deductions. | ||
Payment of Benefits Upon termination of service due to death, disability or retirement, a participant or beneficiary receives a lump-sum amount equal to the value of the participants vested account interest. | ||
Forfeitures The nonvested portion of the Company contributions of a terminated participant shall be forfeited as of the date the vested portion is distributed or after the participant has incurred five consecutive one-year breaks in service. Other conditions of forfeiture allocations and restoration are defined within the Plan document. In accordance with the provisions of the Plan document, forfeitures are utilized first to pay Plan expenses. Any remaining forfeitures will be used to reduce future employer matching contributions. | ||
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Accounting The financial statements of the Plan are presented on the accrual basis of accounting. | ||
Investment Valuation and Income Recognition Investments in marketable debt and equity securities, including common stock of the Company and Patriot Transportation Holding, Inc. (Patriot), that are traded on a national or over-the-counter exchange, are valued at the last reported sales price on the last business day of the fiscal year; such securities traded in the over-the-counter market are stated at the mean between the last reported bid and asked prices. Investments in pooled investment funds, which are based on the net value of the fund at fair value, are valued at the unit value established by the Trustee. Participant loans are valued at their outstanding balances, which approximate fair value. |
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Purchases and sales of securities are recorded as of the trade-dates. Gains or losses on sales of securities are based on the cost of each specific security. Net appreciation or depreciation of investments is recorded to reflect changes in the fair value of investments. | ||
Dividend income is recognized on the basis of the ex-dividend date. Income from other investments is recognized as earned on an accrual basis. | ||
Benefit Payments Benefits are recorded when paid. | ||
Use of Estimates and Risks and Uncertainties The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. The Plan invests in various securities including U.S. government securities, corporate debt instruments, and corporate stocks. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants account balances and the amounts reported in the statements of net assets available for benefits | ||
Recently Issued Accounting Pronouncement In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 157, Fair Value Measurements (FAS 157), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. FAS 157 does not require new fair value measurements, but provides guidance on how to measure fair value by establishing a fair value hierarchy used to classify the source of information. FAS 157 is effective for fiscal years beginning after November 15, 2007. The Plans management is currently evaluating the impact the adoption of FAS 157 would have on the Plans financial position or results of operations. | ||
3. | INVESTMENTS | |
The Plans investments are held in a bank-administered trust fund. All of the Plans investments are participant directed and participants may change among the available investment options at any time. All participants who have not made an investment election are deemed to have elected to have contributions made to their accounts invested in the STI Classic Prime Quality Money Market Fund. | ||
Underlying investments that represents 5% or more of the Plans net assets consisted of the following at December 31, 2007: |
Units | Fair Value | |||||||
Investments at fair value as determined by
quoted market price: |
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Mutual funds: |
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Chase Growth Fund |
46,649 | $ | 970,769 | |||||
Longleaf Partners Fund |
20,238 | 671,076 | ||||||
STI Classic Prime Quality Money Market |
1,662,787 | 1,662,787 | ||||||
T. Rowe Price Equity Income Fund |
51,033 | 1,434,041 | ||||||
T. Rowe Price New Horizon |
18,685 | 570,072 | ||||||
T. Rowe Price U.S. Treasury Intermediate |
160,681 | 890,174 |
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Underlying investments that represents 5% or more of the Plans net assets consisted of the following at December 31, 2006: |
Units | Fair Value | |||||||
Investments at fair value as determined by quoted market price: |
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Mutual funds: |
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Chase Growth Fund |
48,053 | $ | 912,536 | |||||
Longleaf Partners Fund |
20,439 | 706,270 | ||||||
STI Classic Prime Quality Money Market |
1,387,747 | 1,387,747 | ||||||
T. Rowe Price Equity Income Fund |
52,395 | 1,548,285 | ||||||
T. Rowe Price New Horizon |
20,439 | 659,973 | ||||||
T. Rowe Price U.S. Treasury Intermediate |
154,096 | 809,006 | ||||||
Common stock: |
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Florida Rock Industries Inc. Common Stock |
14,571 | 627,283 |
The Plans investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value during 2007 as follows: |
Mutual funds |
$ | (11,067 | ) | |
Common stock: |
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Florida Rock
Industries, Inc. |
242,310 | |||
Patriot
Transportation Holding, Inc. |
(1,551 | ) | ||
Vulcan
Materials Company |
(14,712 | ) | ||
$ | 214,980 | |||
4. | FORFEITURES | |
Following is a summary of forfeitures for the year ended December 31, 2007: |
Beginning balance |
$ | | ||
Current year forfeitures |
1,443 | |||
Interest and dividends |
21 | |||
Allocation to participants |
8,698 | |||
Plan expenses |
(6,077 | ) | ||
Ending balance |
$ | 4,085 | ||
There were no unallocated forfeiture amounts at December 31, 2006. Forfeitures are invested in the STI Classic Prime Quality Money Market Fund at December 31, 2007. | ||
5. | PARTIES-IN-INTEREST | |
Certain Plan investments are either shares of mutual funds managed by the Trustee, common stock of the Company, or participant loans and are therefore considered to be transactions with parties-in-interest. Dividends on the common stock of the Vulcan Materials Company totaled $1,590 during 2007. Dividends on the common stock of Florida Rock Industries, Inc. totaled $6,623 during 2007. During 2007, all administrative expenses of the Plan fees were paid out of the Plans forfeiture accounts. |
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6. | TAX STATUS | |
The Plan uses a prototype plan document sponsored by SunTrust Bank (SunTrust). SunTrust received an opinion letter from the Internal Revenue Service (IRS), dated January 16, 2002, which states that the prototype document satisfies the applicable provisions of the IRC. The Plan itself has not received a determination letter from the IRS. However, the Plans management believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income tax has been included in the Plans financial statements. | ||
7. | REFUND OF EXCESS CONTRIBUTION | |
For the year ended December 31, 2007, the Company determined that the Plan was not in compliance with the Internal Revenue Code 415(c) Maximum Annual Additions compliance test. As a result, the Plan was required to reimburse employees whose contributions exceeded the maximum percentage, as defined. The total to be refunded to employees at December 31, 2007 was $934, which was reimbursed to the respective employees during the 2008 Plan year. | ||
8. | RECONCILIATION TO FORM 5500 | |
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 at December 31, 2007: |
Net assets available for benefits per the financial statements |
$ | 8,079,720 | ||
Contributions receivable at December 31, 2007 |
(610 | ) | ||
Excess contributions refunds payable at December 31, 2007 |
934 | |||
Dividends receivable at December 31, 2007 |
(8,952 | ) | ||
Net assets available for benefits per Form 5500 |
$ | 8,071,092 | ||
The following is a reconciliation of investment income per the financial statements to the Form 5500 for the year ended December 31, 2007: |
Total investment income per the financial statements |
$ | 739,350 | ||
Dividends receivable at December 31, 2007 |
(8,952 | ) | ||
Dividends receivable at December 31, 2006 |
10,688 | |||
Total investment income per Form 5500 |
$ | 741,086 | ||
The following is a reconciliation of contributions per the financial statements to the Form 5500 for the year ended December 31, 2007: |
Total contributions per the financial statements |
$ | 102,631 | ||
Contributions receivable at December 31, 2007 |
(610 | ) | ||
Contributions receivable at December 31, 2006 |
2,968 | |||
Excess contributions refunds payable at December 31, 2007 |
934 | |||
Total contributions per Form 5500 |
$ | 105,923 | ||
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Net assets available for benefits per the financial statements |
$ | 7,854,686 | ||
Contributions receivable at December 31, 2006 |
(2,968 | ) | ||
Dividends receivable at December 31, 2006 |
(10,688 | ) | ||
Net assets available for benefits per the Form 5500 |
$ | 7,841,030 | ||
9. | SUBSEQUENT EVENTS | |
Effective February 14, 2008, the Plan was merged into the Vulcan Materials Company 401(k) and Profit Sharing Retirement Plan. |
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(c) | Description of Investment, Including | |||||||||
(b) Identity of Issue, Borrower, | Maturity Date, Rate of Interest, | (e) Current | ||||||||
(a) | Lessor, or Similar Party | Collateral, and Par or Maturity Value | (d) Cost | Value | ||||||
Chase Growth Fund | Mutual fund | ** | $ | 970,769 | ||||||
Federated Kaufmann Fund | Mutual fund | ** | 61,214 | |||||||
Federated Mortgage Fund | Mutual fund | ** | 17,145 | |||||||
Fidelity Advisor Inflation Protected Bond Fund | Mutual fund | ** | 60 | |||||||
Longleaf Partners Fund | Mutual fund | ** | 671,076 | |||||||
* |
STI Classic Prime Quality Money Market Fund | Mutual fund | ** | 1,662,787 | ||||||
T. Rowe Price Capital Appreciation Fund | Mutual fund | ** | 283,798 | |||||||
T. Rowe Price Equity Income Fund | Mutual fund | ** | 1,434,041 | |||||||
T. Rowe Price Growth Stock Fund | Mutual fund | ** | 174,299 | |||||||
T. Rowe Price New Horizons Fund | Mutual fund | ** | 570,072 | |||||||
T. Rowe Price U.S. Treasury Intermediate Fund | Mutual fund | ** | 166,730 | |||||||
T. Rowe Price Retirement 2020 Fund | Mutual fund | ** | 87,941 | |||||||
T. Rowe Price Retirement 2030 Fund | Mutual fund | ** | 54,831 | |||||||
T. Rowe Price Retirement 2040 Fund | Mutual fund | ** | 890,174 | |||||||
Templeton Foreign Fund | Mutual fund | ** | 227,681 | |||||||
Vanguard 500 Index Fund | Mutual fund | ** | 108,140 | |||||||
7,380,758 | ||||||||||
* |
Vulcan Materials Company Common Stock | Common stock | ** | 275,036 | ||||||
Patriot Transportation Holding, Inc. Common Stock | Common stock | ** | 110,616 | |||||||
385,652 | ||||||||||
* | Various participants | Participant loans (payable through 2021 bearing interest
at rates between 5% and 9.25%) |
304,442 | |||||||
$ | 8,070,852 | |||||||||
* | Parties in interest | |
** | Cost information is not required for participant-directed investments and therefore is not included. |
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THE ARUNDEL CORPORATION PROFIT SHARING AND SAVINGS PLAN |
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Date: July 1, 2008 | By: | /s/ Charles D. Lockhart | ||
Charles D. Lockhart | ||||
Chairman of the Administrative Committee | ||||
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