UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
11-K
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þ
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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the fiscal year ended December 31, 2007
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OR
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□
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITES EXCHANGE ACT OF
1934
For
the transition period
from to
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Commission
File Number: 1-9065
ECOLOGY
AND ENVIRONMENT, INC. 401(K) PLAN
(Full
title of the plan)
ECOLOGY
AND ENVIRONMENT, INC.
(Name
of issuer of the securities held pursuant to the Plan)
368
Pleasant View Drive, Lancaster, New York 14086
(Address
of principal executive office)
REQUIRED
INFORMATION
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Item
1.
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Not
applicable.
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Item
2.
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Not
applicable
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Item
3.
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Not
applicable
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Item
4.
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Financial
Statements of the Plan
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The
Financial Statements of the Ecology and Environment, Inc. 401(k) Plan (the
Plan) for the fiscal years ended December 31, 2007 and 2006, together with
the report of Schneider Downs & Co., Inc., Independent Registered
Public Accounting Firm, is included in this Annual Report on Form 11-K,
and are by specific reference incorporated herein and filed as a part
hereof. The Financial Statements and the Notes thereto are
presented in lieu of the financial statements required by Items 1, 2 and 3
of Form 11-K. The Plan is subject to the requirements of the
Employee Retirement Income Security Act of 1974 (ERISA).
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Exhibits:
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Exhibit
Number
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Description
of Exhibit
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23.1
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Consent
of Schneider Downs & Co., Inc., Independent Registered Public
Accounting Firm
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Ecology
and Environment, Inc.
401(k)
Plan
Index
to Financial Statements and Supplemental Schedule
for
the Years Ended December 31, 2007 and 2006
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Page
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Report
of Independent Registered Public Accounting Firm
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1
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Financial
Statements:
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Statements
of Net Assets Available for Benefits
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2
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Statements
of Changes in Net Assets Available for Benefits
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3
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Notes
to Financial Statements
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4 -
9
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Supplemental
Schedule:
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Schedule
H, line 4i - Schedule of Assets Held at End of Year
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10
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REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Participants and Administrator of
Ecology
and Environment, Inc. 401(k) Plan
Lancaster,
New York
We have
audited the accompanying statements of net assets available for benefits of
Ecology and Environment, Inc. 401(k) Plan (Plan) as of December 31, 2007 and
2006, and the related statements of changes in net assets available
for benefits 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Plan
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Plan’s
internal control over financial reporting. Accordingly, we express no
such opinion. 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 Ecology and
Environment 401(k) Plan as of December 31, 2007 and 2006, and the changes in net
assets available for benefits for the years then ended in conformity with
accounting principles generally accepted in the United States of
America.
Our
audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
schedule of assets (held at end of year) as of December 31, 2007 is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor’s Rules and Regulations for reporting and disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is
the responsibility of the Plan’s management. The supplemental
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Schneider Downs &
Co., Inc.
Pittsburgh,
Pennsylvania
June 20,
2008
Ecology
and Environment, Inc.
401(k)
Plan
December
31,
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2007
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2006
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Assets
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Investments,
at fair value (see Note 6)
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$
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27,061,717
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$
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24,692,149
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Dividends
receivable
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8,129
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8,118
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Total assets
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27,069,846
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24,700,267
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Liabilities
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Excess
contributions
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56,625
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-
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Total liabilities
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56,625
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-
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Net
assets available for benefits
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$
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27,013,221
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$
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24,700,267
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See
accompanying notes to the financial statements.
Ecology
and Environment, Inc.
401(k)
Plan
Years
Ended December 31,
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2007
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2006
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Additions
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Additions to net assets
attributed to:
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Interest
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$
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27,128
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$
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20,617
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Dividends
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1,131,187
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830,579
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Net appreciation in fair value of
investments (see Note 6)
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658,997
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2,067,458
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1,817,312
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2,918,654
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Participant
contributions
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2,321,516
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2,074,362
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Rollover
contributions
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66,813
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80,787
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2,388,329
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2,155,149
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Total additions
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4,205,641
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5,073,803
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Deductions:
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Deductions from net assets
attributed to:
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Benefits paid to
participants
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1,824,507
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996,558
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Other
distributions
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56,625
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-
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Administrative
expenses
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11,555
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11,175
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Total
deductions
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1,892,687
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1,007,733
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Net
increase
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2,312,954
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4,066,070
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Net
assets available for benefits:
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Beginning of
year
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24,700,267
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20,634,197
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End of year
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$
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27,013,221
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$
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24,700,267
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See
accompanying notes to the financial statements.
Ecology
and Environment, Inc.
401(k)
Plan
December
31, 2007 and 2006
The
following description of the Ecology and Environment, Inc. 401(k) Plan (the
Plan) is provided for general information purposes only. Participants
should refer to the Plan agreement for a more comprehensive description of the
Plan’s provisions.
General
The Plan
was established January 1, 1994 as a defined-contribution plan to cover all
eligible employees of Ecology and Environment, Inc. (the
Company). Beginning August 1, 2002, the hours-of-service requirement
was eliminated and employees age twenty-one (21) or older are immediately
eligible to participate in the Plan during the month following their date of
hire. Contributions to the Plan were not permitted prior to July 1,
1994. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Contributions
Participants
may elect to make voluntary contributions subject only to the limitations of the
Internal Revenue Code (IRC). The elective deferral percentage may be
modified the first day of any month. Upon enrollment in the Plan, a
participant may direct his or her contributions in any combination of the 17
investment options and a brokerage account in at least 10 percent increments in
each option selected. Participants who were 50 years of age or older
during the plan year are allowed to contribute catch up
contributions.
The
Company may make contributions in the form of matching contributions and/or an
annual discretionary contribution fixed by appropriate action of the
Company. There were no Company contributions for the 2007 and 2006
plan years.
Participant
accounts
Each
participant’s account is credited with the participant’s contribution and
allocations of the Company’s contribution (if any) and the Plan earnings, and
charged with an allocation of administrative expenses. Allocations
are based on participant account balances, as defined in the Plan
documents. The benefit to which a participant is entitled is the
participant’s vested account balance.
Vesting
Participants
are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company’s matching and discretionary
contribution portion of their accounts plus actual earnings thereon is based on
years of continuous service. A participant is 100% vested in the
Company contributions after five years of credited service. There is
no partial vesting.
Ecology
and Environment, Inc.
401(k)
Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Participant
loans
Participants
may borrow from their account a minimum of $1,000 with a maximum equal to the
lesser of $50,000 or 50% of their vested account balance. Loan
transfers are treated as a transfer to (from) the investment fund from (to) the
Loan Fund. Loan terms range from one to five years or a reasonable
period of time determined when the loan is made for the purchase of a primary
residence. The loans are collateralized by the balance in the
participant’s account and bear interest at a rate commensurate with local
prevailing rates as determined by the Plan Administrator. Principal
and interest are paid ratably through biweekly payroll deductions.
Payment
of benefits
On
termination of service due to death, disability, or retirement, a participant
may elect to receive either a lump-sum amount equal to the value of the
participant’s vested interest in his or her account, or monthly, quarterly,
semi-annual or annual installments over a period not to exceed the life of the
participant or the life of a designated beneficiary.
Administration
The Plan
is administered by the Company. The Company has selected MFS to be
the Recordkeeper of the Plan and Reliance Trust Company as the
Trustee.
Administrative
expenses are paid by the participants and the Company. An asset-based
fee is paid by the participants on an annual basis. The amount is
deducted from participant accounts, placed in a holding account, and then paid
quarterly. It is then merged with the MFS Fixed Fund. Any
remaining administrative expenses in excess of the amounts that are set aside by
the Plan are paid by the Company.
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2.
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Summary
of Accounting Policies
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Basis
of Accounting
The
financial statements of the Plan are prepared under the accrual method of
accounting.
Investments
and Related Transactions
The
Plan's assets are invested in the common stock of Ecology and Environment, Inc.
through a unitized stockfund, which includes a money market fund for liquidity
purposes. The Plan’s investments are stated at fair value as measured
by quoted market prices in an active market or as determined in good faith by
the Trustee, except as described in the following paragraph. Shares
of mutual funds are valued at the net asset value of shares held by the Plan at
year-end. The Plan's interest in the collective trust is valued at
fair value based on information requested by the investment advisor using
audited financial information of the collective trust. Net
appreciation/(depreciation) in fair value of investments includes both realized
gains and losses and unrealized appreciation/(depreciation). Interest
and dividend income is recognized as earned. Investment transactions
are accounted for on the trade date. Participant loans are valued at
their outstanding balances, which approximates fair value.
As
described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1
and SOP 94-4-1,
Reporting of
Fully Benefit-Responsive Investment Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and Defined-Contribution
Health and Welfare and Pension Plans (the FSP)
, investment contracts held
by a defined-contribution plan are required to be reported at fair
value. However, contract value is the relevant measurement attribute
that portion of the net assets available for benefits of a defined-contribution
plan attributable to fully benefit responsive investment contracts because
contract value is the amount participants would receive if they were to initiate
permitted transactions under the terms of the Plan. The Plan invests
in investment contracts through a collective trust. As required by
the FSP, the Statement of Net Assets Available for Benefits presents the fair
value of the investment in the collective trust as well as the adjustment of the
investment in the collective trust from fair value to contract value relating to
the investment contracts. The Statement of Changes in Net Assets
Available for Benefits is prepared on a contract value
basis. Adoption of the FSP had an immaterial impact on net assets and
changes in net assets available for benefits.
Ecology
and Environment, Inc.
401(k)
Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Payment
of Benefits
Benefits
are recorded when paid.
Use
of Estimates
The
preparation of the Plan’s financial statements in conformity with generally
accepted accounting principles requires the Plan Administrator to make estimates
and assumptions that affect the reported amounts of net assets and disclosures
of contingent net assets at the date of the financial statements and the
reported amounts of changes in net assets during the reporting
period. Actual results could differ from those
estimates.
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Although
it has not expressed any intent to do so, the Company has the right under
the Plan to discontinue at any time and to terminate the Plan subject to
the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their
accounts.
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The
Plan Administrator has not applied to the Internal Revenue Service for a
determination letter for the Plan. The Plan is based upon a
prototype plan designed by MFS Retirement Services, Inc. that received a
favorable determination letter dated April 23, 2002. The Plan
has been amended since MFS received the determination
letter. However, the legal counsel has advised the Plan
Administrator and the Plan Administrator believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore no
provision for income taxes has been included in the Plan’s financial
statements.
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5.
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Risks
and Uncertainties
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The
Plan invests in various investment securities. 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 at least 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 statement of net assets available for
benefits.
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Ecology
and Environment, Inc.
401(k)
Plan
Notes
to Financial Statements
December
31, 2007 and 2006
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The
following presents investments that represent five percent or more of the
Plan's net assets at December 31,
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2007
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2006
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MFS
Value Fund A, 166,363 and 154,391 shares, respectively
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$
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4,413,623
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$
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4,133,052
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DWS
Equity 500 Index Fund S, 26,535 and 27,605 shares,
respectively
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4,367,348
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4,387,585
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Thornburg
Core Growth Fund A, 219,422 and 214,886 shares,
respectively
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4,366,500
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3,840,008
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MFS
Fixed Fund Institutional, 2,939,236 and 2,478,711 shares,
respectively
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2,939,236
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2,478,711
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MFS
Core Growth Fund A, 93,231 and 97,414 shares, respectively
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1,948,520
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1,840,141
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Allianceber
International Value Fund A, 78,000 and 0 shares,
respectively
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1,729,267
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0
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*
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Fidelity
Low Priced Stock Fund, 39,920 and 111,946 shares,
respectively
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1,641,894
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1,526,946
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Templeton
Foreign Fund, 0 and 111,946 shares, respectively
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0
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*
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1,526,946
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MFS
Research Bond Fund, 0 and 122,989 shares, respectively
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0
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*
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1,231,117
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*Less
than 5%, presented for comparative purposes.
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Ecology
and Environment, Inc.
401(k)
Plan
Notes
to Financial Statements
December
31, 2007 and 2006
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6.
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Investments
(continued)
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The
Plan's investments for the years ended December 31, 2007 and 2006
(including gains and losses on investments bought and sold, as well as
held during the year) appreciated in value as
follows:
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2007
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2006
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Mutual
funds and pooled separate accounts
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$
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624,303
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$
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1,994,844
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Ecology
and Environment, Inc. Common Stock
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34,694
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72,614
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$
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658,997
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$
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2,067,458
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The
Fixed Fund Institutional investment is held in a Guaranteed Interest
Account (the GIA) held by SEI Trust Company (Trustee). The
underlying assets of the GIA include fully benefit-responsive investment
contracts (the contracts). The crediting interest rates on the
contracts ranged from 4.88% to 4.84% at December 31, 2007 and 2006,
respectively.
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The
GIA’s key objectives are to provide preservation of principal, maintain a
stable interest rate, and provide daily liquidity at contract value for
participant withdrawals and transfers in accordance with the provisions of
the Plan.
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The
average yield on the GIA earned by the Plan based on actual earnings was
5.60% and 5.50% at December 31, 2007 and 2006,
respectively. The average yield earned by the Plan based on
interest rate credited to participants was 4.90% and 4.93% for December
31, 2007 and 2006, respectively.
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7.
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Transactions
with Parties-in-Interest
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As
of December 31, 2007 and 2006, the Plan held certain securities issued by
the Company as follows:
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December
31, 2007
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December
31, 2006
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Number
of Shares
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Fair
Value
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Number
of
Shares
|
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Fair
Value
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Ecology and Environment,
Inc. Common Stock
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45,158
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$
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500,802
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45,101
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$
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491,601
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Dividends
on Ecology and Environment, Inc. Common Stock amounted to approximately
$16,200 during the years ended December 31, 2007 and
2006.
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Certain
plan investments are shares of mutual funds and pooled separate accounts
offered by MFS Retirement Services (MFS). MFS is also
recordkeeper of the Plan and custodian of all investments other than
Company stock.
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During
the years ended December 31, 2007 and 2006, the Plan's investments with
MFS (including gains and losses on investments bought and sold, as well as
held during the year) appreciated in value by $82,695 and $959,070,
respectively.
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Ecology
and Environment, Inc.
401(k)
Plan
EIN: 16-0971022
PLAN
NUMBER: 003
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(a)
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Shares
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(b) Identity
of Issuer Borrower, Lessor or Similar Party
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(c) Description
of Investment including Maturity Date, Rate of Interest, Collateral, Par,
or Maturity Value
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(d) Cost
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(e) Current
Value
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MFS
Retirement Services, Inc.:
|
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*
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166,363
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MFS
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Value
Fund A
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**
|
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$ 4,413,623
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*
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2,939,236
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MFS
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Fixed
Fund Institutional
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|
**
|
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2,939,236
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*
|
93,231
|
|
MFS
|
|
Core
Growth Fund
|
|
**
|
|
1,948,520
|
|
*
|
132,645
|
|
MFS
|
|
Research
Bond Fund A
|
|
**
|
|
1,311,858
|
|
*
|
40,481
|
|
MFS
|
|
Aggressive
Growth Allocation Fund A
|
|
**
|
|
646,489
|
|
*
|
40,723
|
|
MFS
|
|
Total
Return Fund A
|
|
**
|
|
620,624
|
|
*
|
23,366
|
|
MFS
|
|
Growth
Allocation Fund A
|
|
**
|
|
351,422
|
|
*
|
14,049
|
|
MFS
|
|
Moderate
Allocation Fund A
|
|
**
|
|
192,328
|
|
*
|
117,194
|
|
MFS
|
|
Money
Market
|
|
**
|
|
117,194
|
|
*
|
3,063
|
|
MFS
|
|
Conservative
Allocation Fund A
|
|
**
|
|
37,583
|
|
|
|
|
|
|
|
|
|
|
12,578,877
|
|
|
Other
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,535
|
|
DWS
|
|
Equity
500 Index Fund
|
|
**
|
|
4,367,348
|
|
|
219,422
|
|
Thornburg
|
|
Core
Growth Fund
|
|
**
|
|
4,366,500
|
|
|
78,000
|
|
Allianceber
|
|
International
Value Fund A
|
|
**
|
|
1,729,267
|
|
|
39,920
|
|
Fidelity
|
|
Low
Priced Stock Fund
|
|
**
|
|
1,641,894
|
|
|
812,131
|
|
-
|
|
Brokerage
Access Account
|
|
**
|
|
812,131
|
|
*
|
22,976
|
|
Columbia
|
|
Acorn
Fund
|
|
**
|
|
663,303
|
|
|
45,158
|
|
Ecology
and Environment, Inc.
|
|
Common
Stock
|
|
**
|
|
500,802
|
|
*
|
4,907
|
|
Domini
|
|
Social
Equity Fund
|
|
**
|
|
157,277
|
|
|
-
|
|
Participant
Loans
|
|
(5.00%
- 9.50%)
|
|
-0-
|
|
244,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 27,061,717
|
|
*
|
Indicates
parties-in-interest to the Plan.
|
|
|
|
|
|
|
|
**
|
Cost
not required to be presented for participant directed
investments.
|
|
|
|
|
The Plan.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
|
Name
of Plan:
|
|
Ecology
and Environment, Inc. 401(k) Plan
|
|
|
|
|
|
|
|
By:
|
|
Ecology
and Environment, Inc. 401(k) Plan Committee Plan
Administrator
|
|
|
|
|
|
|
Date:
June 24, 2008
|
By:
|
|
/s/
Ronald L. Frank
|
|
|
|
|
Ronald
L. Frank
Committee
Member
|
