UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 19931994
OR
TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___ to_____________________ to
____________________
Commission File No. 0-4689
PENTAIR, INC.
(Exact name of Registrant as specified in its charter)
Minnesota
41-0907434
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization)
41-0907434
(I.R.S. Employer Identification No.)
1500 County Road B2 West, Suite 400, Saint Paul,
Minnesota 55113-3105
(Address of principal executive offices)
(Zip Code)
(612) 636-7920
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
1) Common Stock, Par Value $.16 2/3 per share
2) Rights
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
X
The aggregate market value of voting stock held by
nonaffiliates of the Registrant on February 25, 199421, 1995 was
$611$730 million. For purposes of this calculation, all shares
held by officers and directors of the Registrant and by the
trustees of employee stock ownership plans (ESOPs) and
pension plans of the Registrant and subsidiaries were
deemed to be shares held by affiliates.
The number of shares outstanding of Registrant's only class
of common stock on February 25, 199421, 1995 was 18,172,891.
18,316,470.
DOCUMENTS INCORPORATED BY REFERENCE
The following portions of the Annual Report to Shareholders
for the year ended December 31, 19931994 and Proxy
Statement for the 19941995 Annual Meeting of Shareholders are
incorporated by reference as the Item of this Form 10-K
indicated.
PART OF FORMPart of Form 10-K PORTION OF ANNUAL REPORTPortion of Annual Report
Part I, Item 1. Page 37: Business
Business - Pages 29 and 53:
Financial information Business Segment
Information,
information about industry segments, Information;
foreign operations, research Page 29:41: Research and
about foreign operations and Development.development and researchDevelopment;
environmental matters. Page 33: Environmental
Matters and development.Page 44:
Commitments and
Contingencies-(Note 9)
Part II, Item 5. Market for Page 41:54: Pentair Stock
Registrant's Common Equity Stock Data, Price Range and
and Related Stockholder Range and Dividends of
Matters. of Common Stock.
Part II, Item 6. Selected Page 18:55: Selected
Financial Data. Financial Data.Data - 10 Year
Summary.
Part II, Item 7. Management's Pages 18-23:26-33:
Discussion and Analysis of Management's
Financial Condition and Discussion and Analysis.
Results of Operations. Analysis.
Part II, Item 8. Pages 34-53:
Financial Pages 24-37:Consolidated Statement
Statements and Consolidated Statement
Supplementary Data. of Income, Balance
Supplementary Data. Sheet and Statement of
Cash Flows, related
Notes, and Report of
Independent Auditors;Auditors
and Quarterly Financial
Data.
PORTION OF PROXY STATEMENTPortion of Proxy Statement
Part III, Item 10. Directors Pages 2-5: Security
and Executive Officers Ownership of Ownership
of the Registrant. Management and
Beneficial Ownership:Ownership;
Pages 5-7:5-7; Directors
Standing for Election.
Part III, Item 11. Executive Pages 10-18:15-23: Executive
Executive Compensation. Compensation.
Part III, Item 12. Security Pages 2-5: Security
Ownership of Certain Beneficial Ownership of Beneficial Owners and Management and
Owners and Management. Beneficial Ownership.
PART I
Item 1. Business
(a) General Development of the Business.
The Registrant was incorporated in 1966 under the laws of
Minnesota. In the past year, the Registrant has not changed
its form of organization or mode of conducting business.
The Registrant intends to continue to growgrows through internal development and
diversify through the acquisition of
established companies or manufacturing operations and
investments in owned subsidiaries and new joint ventures.acquisitions. As in the past, periodic dispositions of assets
or business units are possible when they no longer fit with
the long-term strategies of the Registrant.
The Registrant completed on February 28,Effective January 1, 1994, the acquisition ofRegistrant acquired the net
assets and the subsidiaries of Schroff GmbH (Schroff) from
Fried. Krupp AG Hoesch-Krupp for a cash purchase price
of approximately $153 million.$140 million net of cash acquired. Schroff
manufactures and sells enclosures, cases, subracks and
accessories for commercial electronic and instrumentation
applications, with world-wide 1993 sales of approximately
$160 million. While Schroff faces significant competition in
each of its markets, it is the largest manufacturer of
electronic enclosures and 19 inch subracks in the European
market, in which the majority of Schroff sales are made.
The Registrant views Schroff as strongly complementary to the
electrical enclosure business of Hoffman Engineering and
intends to develop these businesses using their respective
strengths in technology, manufacturing, marketing and
market position.
In September 1994, Pentair announced that it was exploring
strategic alternatives for its paper businesses, including their
possible sale. That course of action was chosen to achieve
several objectives. First, to permit Pentair to focus its
commitment and resources in the industrial products sector,
continuing the strong growth and leading market positions
these businesses have achieved. Second, to permit the
paper businesses to seek their own opportunities and long-term goals.
Third, to make Pentair a more understandable
company to the investment community and its shareholders.
That process is ongoing. In February 1995, Pentair
announced the sale of its uncoated paper business, Cross
Pointe Paper, to Noranda Forest for approximately $200
million. The sale is expected to close at the beginning of
April 1995. Efforts continue toward completing the
strategic alternatives for Niagara of Wisconsin and
for the joint venture interest in Lake Superior Paper
Industries, the company's other paper businesses.
Pentair expects that its strategic refocusing will be
completed in the course of 1995. Whatever the eventual
outcome, Pentair is poised to aggressively expand into its
chosen industrial markets.
(b) Financial Information about Industry Segments.
The Registrant's business is conducted in three industry
segments. The Specialty Products segment manufactures
woodworking machinery; portable power tools; and pumps
and pumping systems. The General Industrial Equipment
segment manufactures electrical and electronic enclosures
and wireways; industrial lubricating systems and material
dispensing equipment; automotive service equipment; and
sporting ammunition. The Paper Products segment
manufactures printing papers in a variety of types and
grades. Business segment financial information is found on
page 3729 and pages 52-53 (Note 17)18) of the 19931994 Annual
Report to Shareholders.
(c)
Narrative Description of Business.
Description of the Specialty Products Segment:
Products and marketing.
The following table sets forth, for each of the last three
years, the Specialty Products segment product class net
sales by product class as
percentagesin excess of 10 percent of the Registrant's
consolidated net sales.sales .
1994 1993 1992 1991
Woodworking Machinery 15% 15% 15%Stationary and
Portable ElectricPower Tools 9 9 8
Pumps and Pumping Systems 7 7 722% 24% 24%
Total Segment 28% 31% 31% 30%
Woodworking Machinery. The Registrant, through its
subsidiary Delta International Machinery Corp. (Delta),
manufactures, markets, and services a line of general-purpose woodworking
machinery, such as saws, planers,
joiners, grinders, drill presses, shapers, lathes, and other
quality machines. Delta sells its products in the United
States, Canada, and other foreign countries under its
"Delta" brand name through a network of independent stockingand
mail order distributors, independent retailers, mass merchandisershardware stores and home centers.
Portable Electric Tools. The Registrant, through its
subsidiary Porter-Cable Corporation (Porter-Cable),
manufactures and markets a variety of portable electric
tools, such as saws, sanders, drills and routers, used in
woodworking, industrial maintenance, and construction
trades. Porter-Cable markets its products under the brand
name "Porter-Cable" through a network of independent,
specialty tool, and mail order distributors, mass merchandisershardware stores
and home centers.
Pumps and Pumping Systems. The Registrant, through its
F.E. Myers Co. Division of McNeil (Ohio) Corporation
(Myers), manufactures and markets a wide variety of pumps
for residential, environmental engineering, and industrial
use. Products are marketed by field sales representatives employed
by Myers and are distributed through a network of
distributors, wholesalers, dealers, and installers. In addition,
Myers distributes products to the do-it-yourself market for
retail sale through homecenter retailershome centers and hardware stores under
the names "Water Ace" and "Shur Dri".
Competitive conditions.
Delta participates in the middle range of the overall market
for general purpose woodworking machinery. The
addressed market is focused on high quality, and feature
oriented products and value added services for the Home Shop, Contractor,home
shop, contractor, and Small Shopsmall shop markets. In general, Delta produces a fullmarkets
the industry's broadest line of woodworking
machineryproducts for its addressed
market. Delta's numerous competitors do not offer a similar full product line over the
range of Delta's addressed market. Competitors do have individual
products which compete with certain of Delta's products.
Competition in this market focuses on quality, features,
and service and at the lower end of Delta's product
offering, price.
Porter-Cable competes in the professional portable electric
tool market which is highly competitive. Porter-Cable faces
sixseveral major competitors across its addressed market.
Product innovation, features, performance, quality, performance,service,
delivery and serviceprice are the most significantall competitive factors.
Porter-Cable is
beginning to addressMyers addresses the higher end of the do-it-yourself
market where price is a factor.
Myers' market is pumpswater pump and pumping systems.system market.
Myers faces several majormany competitors across its product lines.
Price, delivery, and quality are significant competitive factors.
Myers is beginning to address the higher end of the do-it-
yourself market.
Description of the General Industrial Equipment Segment:
Products and marketing.
The following table sets forth, for each of the last three
years, the General Industrial Equipment segment product
class net sales by
product class as percentagesin excess of 10 percent of consolidated net
sales.
1994 1993 1992 1991
Electrical and
Electronic Enclosures and Wireways28% 18% 17%
18%
Sporting Ammunition 9 10 10
10
Industrial Lubricating Systems
and Material Dispensing
Equipment 6 7 7
Automotive Service Equipment 6 5 4
Total Segment 48% 40% 39% 39%
Electrical Enclosures and Wireways.Enclosures. Through the Hoffman Engineering
Company division of Federal-Hoffman, Inc. (Hoffman
Engineering), the Registrant manufactures enclosures and
wireways for electrical and industrial instrumentation
applications and markets these products primarily through
independent manufacturer's representatives and electrical
and electronic equipment distributors throughout North
America and the United Kingdom.
Electronic Enclosures. Through Schroff GmbH and its
international subsidiaries (Schroff), the Registrant
manufactures enclosures and wireways for electronic
instrumentation applications. Schroff is a large European
manufacturer of cabinets, cases, subracks, microcomputer
packaging systems and accessories. Schroff serves the
worldwide industrial electronics industry including key
segments such as computers, test & measurement, private
LANs/data communication, industrial control and factory
automation, medical and telecommunications.
Sporting Ammunition. Through the Federal Cartridge
Company division of Federal-Hoffman, Inc. (Federal
Cartridge), the Registrant manufactures and markets
sporting and law enforcement ammunition, and
components. These products are distributed throughout the
United States through a network of distributors and buying organizations for retail sale;distributors; directly to
large retail chains; and directly to law enforcement agencies
(governmental).
Industrial Lubricating Systems and Material Dispensing
Equipment. The Registrant, through its Lincoln Industrial
division of McNeil (Ohio) Corporation (Lincoln Industrial),
manufactures components and designs systems for manual
and automatic delivery of measured quantities of lubricants
for industrial applications. Lincoln Industrial also
manufactures components and designs, fabricates, and
installs high-volume liquid and semi-solid dispensing
systems. Both segments serve original equipment and
retrofit markets. Lubricating and materials dispensing
systems are marketed in the United States by approximately
100 specially qualified systems distributors with design,
installation, and service capability. Basic lubricating
equipment and accessories are marketed through industrial
supply and specialty distributors. A special direct sales
group markets a wide variety of Lincoln Industrial products
to original equipment manufacturers in a variety of
industries. Lincoln Industrial also manufactures lubricating
components and systems at its facility in Walldorf, Germany
for distribution to European, Middle East, Far East and
African markets, and to a lesser extent to the United States.
The remainder of the world market, including the Pacific
Rim, is served from Lincoln Industrial's St. Louis, Missouri
manufacturing facility.
Automotive Service Equipment. The Registrant, through its
Lincoln Automotive division of McNeil (Ohio) Corporation
(Lincoln Automotive), manufactures and markets
lubrication, repair, and service equipment for a broad range
of vehicles. Most productsProducts are sold through a key group of
approximately 600 aftermarket wholesalers. Certain
products are sold to large auto parts chain stores. Certain
lubricating equipment, tools, and jacks and lifting equipment
are sold under private label programs. Garage, service
station, car dealership service department, and fast oil
change lubricating systems are marketed through
petroleum equipment and service distributors with design
and installation capability.
Competitive conditions.
Hoffman Engineering is the largest North American
manufacturer of electrical enclosures and wireways, having
a market share estimated to be about 25%. It is currently
the only manufacturer with national distribution and its
competitors are generally smaller, regional manufacturers.
Hoffman Engineering also participates in the North
American electronic enclosures market, facing competition
from a large number of firms, with three or four established
firms leading the market. In both markets, the most
significant competitive factors are price, product innovation,
service, quality, breadth of product line, and delivery.
PriceSchroff is the most significant factor for certain
commodity products.a large manufacturer in Europe's electronic
enclosure market and a technical leader. Schroff, like
Hoffman, has a comprehensive product range. Schroff
faces competition from a large number of firms, some very
large and some smaller. Significant competitive factors are
product innovation and quality.
Federal Cartridge and its two primary competitors,
Winchester and Remington, have a combined market share
of approximately 90% in the U.S. sporting ammunition
market, with the balance coming from smaller domestic
competitors and foreign ammunition manufacturers.
Price,Quality, delivery, price and terms delivery,
and quality are significant competitive
factors.
Lincoln Industrial and Lincoln Automotive face three to five
major competitors and several smaller competitors across
their product lines. Competition involving industrial
lubricating systems and material dispensing equipment
tends to center around quality, systems capability, and
application knowledge. Price becomes a more significant
competitive factor for vehicle servicing equipment.
Description of the Paper Products Segment:and Joint Venture
Segments:
Products and marketing.
The following table sets forth, for each of the last three
years, the Registrant's net sales ($ millions), percent of
consolidated net sales and tons shipped (thousands) for
each paper product class.
Years Ended December 31,
1994 1993 1992 1991
$ % Tons $ % Tons $ % Tons
Coated 150.8 9 236 147.8 11 227 143.7 11 237
150.0 13 220
Uncoated 236.7 15 234 233.8 18 227 231.0 19 223
216.2 18 206
Consolidated 387.5 24 470 381.6 29 454 374.7 30 460
366.2 31 426
Super-
calendered FN1Supercalendered1 76.1 121 71.5 116 75.1 111
83.8 116
Total 463.6 591 453.1 570 449.8 571 450.0 542
[FN]
FN1fn1 Lake Superior Paper Industries is a joint venture mill in
Duluth, Minnesota; only 50% of the joint venture's sales
and tonnage are included. Since this joint venture is
accounted for on the equity method, its sales are not
included in consolidated sales.
Coated Paper. The Registrant, through its subsidiary
Niagara of Wisconsin Paper Corporation (Niagara),
manufactures coated groundwood publication-grade paper
(nos. 4 and 5) used for applications requiring high-resolution
printing and reproduction of color pictures, such as
magazines, periodicals, catalogs, and general commercial
printing.
These papers are
coated and finished to either a gloss or suede surface. Direct
sales to printers and end users represent approximately 20%
of shipments; remaining sales, which generally are in smaller
quantities, are made through paper merchants.
Uncoated Papers. Cross Pointe Paper Corporation (Cross
Pointe), a subsidiary of the Registrant, through its
subsidiaries, Miami Paper Corporation, Dayton Paper Corp.
and Flambeau Paper Corp., manufactures a variety of
uncoated papers, primarily for commercial printing, text and
cover, and book publishing markets, and operates a
centralized converting and distribution operation (IDC) in
West Chicago, Illinois. Of Cross Pointe's total paper production,
60% is commercial printing, 24% is text and cover, 12% is
book, and the remainder is premium writing, specialty and
other paper. Most of the volume is sold through merchants.
Currently, about 45% of total shipments are made from the
IDC. Cross Pointe has adopted long-term strategies of
increased shipments of stocked, value-added grades,
enhanced product developments and continued increases in
quality. As a part of this program, Cross Pointe has become
one of the leaders in recycled grades.
Supercalendered (SCA) Printing and Publication Grade
Papers. The Registrant has a 50% interest in a joint
venture, Lake Superior Paper Industries (Lake Superior),
which produces supercalendered paper known as SCA.
End use markets include magazine publication, catalogues
and advertising inserts. SCA is sold directly to printers and
end users through Lake Superior's own sales and
marketing personnel.
Adjacent to Lake Superior, is a recycled pulp mill facility, of
which 24% is owned by LSPI Fiber Co. Registrant owns
50% of LSPI Fiber Co. and accounts for it on the equity
method. LSPI Fiber Co. sells recycled pulp to LSPI and
other paper mills.
Competitive conditions.
The Paper Products segment output of Niagara and Cross
Pointe is sold in highly competitive markets with between 10
to 15 competitors in each. Many of these competitors are
substantially larger corporations havinghave greater financial
resources,
production capacity and, in many cases, captive sources of
"kraft" pulp and merchant distribution.raw materials. Lake Superior is the largest North American
producer of SCA, but is subject to substantial competition
from European manufacturers, and makers of other grades
of printing and publication paper. Quality,Price, quality, innovation
and service are significant competitive factors in the markets
served by the Paper Products segment. The Registrant has emphasized
service, quality, product innovation, and environmental
products to meet customer needs, and has developed long-
term relationships with many suppliers and customers.
Raw materials.
The raw materials used in the manufacture of paper are
bleached kraft pulps, pulp substitutes, pulpwood,
groundwood pulp, waste paper, certain chemicals, clays,
starches, and additives. The Registrant does not own its
own timberlands or manufacture its own kraft pulp.
KraftPurchases of kraft pulp which comprises about 35%and waste paper are significant
components of the Registrant's fiber needs (including the Registrant's share of Lake Superior), isneeds. The raw
materials are supplied by several pulp manufacturers, principallysome
under long-
termlong-term contracts. The balance of fiber needs,
comprised primarily of groundwood pulp, sulphite pulp and
secondary fiber (pulp recovered by recycling waste paper),
is produced at the various mills. The Registrant has
recently installed or expanded its recycled fiber capacity at
its Cross Pointe mills and has invested in a joint venture
recycled pulp facility in Duluth, Minnesota.
The Registrant also purchases chemicals, clays, logs for
pulp, waste paper, and other paper-making components
from various sources. Adequate supplies of these materials
are expected to be available to meet the Registrant's needs.
Backlog.
The following table shows backlog (in days) and
approximate sales value (at average selling price) at
December 31:
1994 1993 1992 1991
Days ($000) Days ($000) Days ($000)
Coated Paper 30 $14,308 8 $ 3,175 17 $ 6,808
7 $ 2,629
Uncoated Paper 8.540 27,666 8 5,442 5 3,210
5 3,175
SCASupercalendered Paper 44 19,457 32 12,494 35 15,066 33 15,260
A substantial portion of paper sales are produced to meet
specific customer orders. Although the level of backlogs
provides some indication of the strength of the paper
markets, other factors such as the trend of retail sales and
customer and printer inventory levels must be considered.
The current backlog especially coated and uncoated, is less than desired.considered adequate. All backlogs
are expected to be filled within the current year.
Information Regarding All Segments:
Working capital items.
The Specialty Products and General Industrial Equipment
businesses offer extended payment terms to a significant
number of customers, requiring these subsidiaries to carry a
significant amount of receivables. The Registrant has not
incurred significant losses in carrying these receivables.
Federal Cartridge's working capital builds from January
through September as inventories are increased to meet
third quarter shipping schedules and receivables increase
due to fall dating for early order programs used in the
sporting ammunition business. Management continues to
focus on reducing working capital requirements through
management of receivable and inventory levels.
Status of new products.
The industries in which the segments participate are
essentially mature and do not experience the introduction of
many products that materially change the nature of the
industry. Individual manufacturers generally make
improvements or apply new technologies to existing
products.
Raw materials.
The raw materials used in the manufacturing process
include grey iron (castings), copper, aluminum (diecast), steel (barsteel(bar and sheet), various metals including brass
and lead, gunpowder and plastic. Federal Cartridge uses gunpowder,
primers, brass, lead and steel in its production of ammunition.
Selected motors,
castings, subassemblies,plastic parts and components are also purchased.
The supply of all raw materials and components is currently
adequate.
Less than 5% of portable electric tool sales are produced by
outside sources in Western EuropeDelta and imported under the
Porter-Cable name. The supply of these tools is currently
adequate. Delta importsimport select tools in itstheir product
offering.offerings. Design and engineering of these products is
performed primarily by Delta. The manufacturing process
is controlled and monitored for most of these products in
factories dedicated to Delta production. Supply of these
products is currently adequate and timely.
Patents, trademarks, licenses, franchises and
concessions.
The businesses own a number of U.S. and foreign patents
and trademarks. They were acquired over many years and
relate to many products and improvements which are of importance
to the business.improvements. No one patent
or trademark is of material importance to the company as
a whole.
Brand names are a significant factor in market perception.
The Registrant has undertaken a corporate strategy to
strengthen and capitalize on brand awareness.
Seasonal aspects.
For the Registrant as a whole there is no strongly seasonal
aspect; however, sales of Federal Cartridge sporting
ammunition are generally higher in the third quarter due to
hunting season reorder demand.aspect.
Backlog.
The Specialty Products and General Industrial Equipment
segments normally do not experience backlogs for
substantial periods of time. The nature of the businesses
emphasizes maintaining inventories sufficient to satisfy
customer needs on a timely basis, and production and
sourcing is geared towards providing adequate inventories
in order to minimize customer back orders. Accordingly,
backlogs are not material to understanding the sales trends
or manufacturing fluctuations of the segment.
Dependence on limited number of customers.
None of the Registrant's segmentsThe Registrant as a whole is not dependent on a single
customer or on a few customers. The loss of a limited
number of customers would not have a material adverse
impact on any
of the segments. Since a portion of Specialty Products sales
are through large retail chains, a significant short-term impact
would be experienced if sales to these customers were
affected.Registrant.
Government contracts.
The Registrant has no material portion of sales under
government contracts that may be subject to renegotiation
of profits or termination of contracts at the election of the
government.
Environmental matters.
The Registrant is subject to federal and state pollution control
and hazardous waste laws and regulations in all jurisdictions
in which it has operating facilities. The Registrant believes that
its ongoing operations are in substantial compliance with
existing environmental regulations other than for infrequent
permit exceedances for air and water emissions at some of its
facilities. In addition to making ongoing capital expenditures
for maintenance, upgrading and closure of on-site waste
treatment facilities, the Registrant intends to continue its
program for implementation of manufacturing process and
configuration changes to achieve both manufacturing
efficiencies and an overall reduction in environmental impact
of its operations.
The Registrant's environmental control programs focus upon
air treatment facilities: including removal of particulates
generated by boilers used in the Registrant's paper businesses
and of volatile organic compounds used in the industrial
manufacturing businesses; waste water treatment, primarily in
the paper businesses; and landfills for solid waste disposal,
including sludge lagoons operated by some of the paper
businesses. The Registrant arranges for disposal of solid and
hazardous waste through licensed transporters at each of the
Registrant's facilities.
The Registrant's Niagara operation was notified by the
Michigan Department of Natural Resources (MDNR) by letter
dated March 7, 1994 that its sludge lagoons have been
operated in violation of various regulations and have caused
degradation of groundwater in the area. Niagara believes that
implementation of its currently pending closure plan, submitted
in 1990, should satisfy many of the concerns raised by MDNR,
although it is likely that Niagara will have to accelerate the
closing. No material adverse impact on Niagara's business is
anticipated but costs to close the lagoons in accordance with
the 1990 proposed plan would exceed $6 million.
The operating costs for maintaining compliance with
environmental regulations does not exceed 5% of operating
costs generally. The Registrant has adopted capital
expenditure programs for upgrading, maintaining and other
costs related to its waste treatment facilities. Such capital
expenditures were $7.6 million, $4.1 million, and $2.1 million
for the years ending December 31, 1993, 1992, and 1991,
respectively. Projected future expenditures are $1.7 million
and $3.2 million for fiscal years 1994 and 1995 respectively.
Over the past three years, the Registrant's paper businesses
have invested a total of $18.2 million in constructing,
upgrading and expanding their recycled fiber facilities. This
program has reduced land disposal of office wastepaper while
giving the Paper Products segment businesses a strong
presence in rapidly growing recycled paper markets.
Employees.
As of December 31, 1993,1994, the Registrant and its
subsidiaries employed approximately 8,30010,300 persons, of
which 2,4702,475 were represented by unions having collective
bargaining agreements.
Labor contracts negotiated in 19931994 were: International Molders and
Allied Workers Local 45 - Ashland, Ohio (extended to AprilMay
1, 1994)1997), 49 employees; Patternmakers-Ashland, Ohio
(extended to September 2, 1995), 7 employees; United
PaperworkersClerical Workers Local 47 -
Niagara, Wisconsin (extended to January 31,
1995), 470 employees; and International Union of Electrical
Workers - Jonesboro, Arkansas (extended to April 4, 1996),
175 employees.
Contracts expiring in 1994: Clerical Workers - Niagara,
Wisconsin (expires May 14, 1994)1997), 25 employees; International
Molders and Allied Workers - Ashland, Ohio (expires April 1,
1994), 49
employees; and Molders and Allied Workers Local 19 -
Guelph, Ontario, Canada (expires(extended to July 1, 1994)1997) 7
employees.
Contracts expiring in 1995: International Association of
Machinists Local 59 - Ashland, Ohio (expires April 6, 1995);
United Paperworkers International Union Local 1166 -
Niagara, Wisconsin (was extended from January 31, 1995
and now expires April 30, 1995); International Association
of Machinists Local 9 - St. Louis, Missouri (expires April 30,
1995); United Steel Workers of America Local 8630 -
Tupelo, Mississippi (expires May 1, 1995); Patternworkers
League - Ashland, Ohio (expires September 1, 1995); and
Teamsters Local 984 - Memphis, Tennessee (expires
December 15, 1995).
The Registrant considers its employee relations to be good
and feels future contracts can be negotiated for the benefit
of the business and the employees.
(d) Financial Information about Foreign Operations.
The Registrant operates primarily in the United StatesNorth America and
North America. Operations outsideEurope. See discussion of the United States in
1993 represented less than 10% of consolidated net sales,
operating income, and identifiable assets. As a result of the
acquisition of the Schroff Group, the Registrant believes that
beginning in 1994,foreign operations outside of the U.S. will represent
approximately 15% of consolidated net sales.
incorporated
by reference.
Item 2. Properties
The Registrant's corporate offices, located at 1500 County
Road B2 West, St. Paul, Minnesota 55113-3105, are leased
and consist of approximately 22,000 square feet; the lease
expires in December 1999. The Registrant also has an
option to terminate the lease during the period December
1994 to June 1995. Information about the Registrant's
principal manufacturing facilities and other properties is
presented below by industry segment. These facilities are
adequate and suitable for the purposes they serve. Unless
noted all facilities are owned.
In addition, the Company is in the process of expanding into
Mexico through the use of a Maquiladora facility. Construction
will commence and will be completed in 1994.
Specialty Products Segment
SUBSIDIARY/ APPROXIMATE
DIVISION LOCATION PRIMARY USE SQUARE FEET
Porter-Cable FN1 Jackson, Manufacturing, 357,000
TennesseeTennessee(1) Distribution,
and Office
Delta FN2 Pittsburgh, Office and 34,000
PennsylvaniaPennsylvania(2) Product Development
Tupelo, Manufacturing 333,000
Mississippi and Office
FN3 Memphis, Distribution 245,000
TennesseeTennessee(3) and Office
FN4
Guelph, Distribution 57,000
OntarioOntario(4) and Office
Taichung, Office and 1,000
Taiwan Product Development
F.E. Myers Ashland, Manufacturing, 412,000
Ohio Distribution,
and Office
Kitchener, Distribution 26,000
Ontario Assembly and
Office
[FN]
FOOTNOTES:
FN1 Leased for a five-year term expiring in 1998.
FN2 Leased for a five-year term expiring in 1994.
FN3 Leased for a five-year term expiring in 1996.
FN4and Office
NOTES:
(1) Leased for a five-year term expiring in 1998.
(2) Currently leased under a month-to-month lease
while a longer term lease is negotiated.
(3) Leased for a five-year term expiring in 1996.
(4) Leased under a three-year lease which expired in 1991,
which is being renewed
under one-year options (limited to seven one-year periods).
General Industrial Equipment Segment
SUBSIDIARY/ APPROXIMATE
DIVISION LOCATION PRIMARY USE SQUARE FEET
Hoffman Engineering Anoka, Manufacturing 814,000
Engineering Minnesota and Office
FN1
Brooklyn Center, Manufacturing 128,000
MinnesotaMinnesota(1) and Office
FN2 Cwmbran, WalesReynosa, Mexico Manufacturing 26,000
United Kingdom and Office90,000
Hoffman U.K. Hemel , Manufacturing 37,000
Hempstead,
England(8)
Hoffman U.K. Hemel Manufacturing 22,000
Hempstead,
England(6)(8)
Federal Cartridge Anoka, Manufacturing 679,000
Cartridge Minnesota and Office
Richmond, Manufacturing 41,000
Indiana and Office
Lincoln Industrial St. Louis, Manufacturing 565,000
Missouri and Office
Walldorf, Manufacturing 117,000
Germany and Office
Antwerp, Distribution 8,000
Belgium and Office
Lincoln Automotive
FN3 Jonesboro, Manufacturing 426,000
ArkansasArkansas(2) and Office
FN4
Nogales, Sonora Manufacturing 35,000
MexicoMexico(3)
Mississauga, Distribution 30,000
Ontario and Office
Birch Tree, Manufacturing 8,000
Missouri
Schroff GmbH
FN5 Straubenhardt, Manufacturing 523,000
GermanyGermany(4)
Schroff S.A.
FN6 Betschdorf, Manufacturing 210,000
FranceFrance(5) and Warehouse
Schroff U.K. Hemel Hempstead, Manufacturing 37,000
England
FN7Hempstead,
England(8)
Schroff U.K. Hemel Hempstead, Manufacturing 22,000
EnglandHempstead,
England(6)(8)
Schroff, Inc. Warwick, Manufacturing 80,000
Rhode Island and Office
FN8 Warwick, Office and 18,000
Rhode IslandIsland(7) Assembly
Schroff K.K. Miewa-Cho, Manufacturing 23,500
Japan
[FN]
FOOTNOTES:
FN1 Leased for a 25-year term expiring in 1996, with options to renew
for two ten-year terms.
FN2 Currently leased under a month-to-month lease while a longer term
lease is negotiated.
FN3 Includes approximately 51,000 sq. ft. warehouse and 3,000 sq. ft.
office leased for a three-year term which expires in 1995.
FN4 Leased for a six-year term expiring in 1999.
FN5 A small portion of this total facility has been leased for a 30-year
term expiring in 2011.
FN6 Leased under two lease agreements expiring in 2002 and 2005.
Both leases include a purchase option.
FN7 Leased for a twenty-year term expiring in 2011.
FN8 Leased for a ten-year term expiring in 2000. This lease includes a
purchase option.
Meiwa-Cho, Manufacturing 23,500
Japan
NOTES:
(1) Leased for a 25-year term expiring in 1996, with options
to renew for two ten-year terms.
(2) Includes approximately 51,000 sq. ft. warehouse and
3,000 sq. ft. office leased for a three-year term which
expires in 1995.
(3) Leased for a six-year term expiring in 1999.
(4) A small portion of this total facility has been leased
for a 30-year term expiring in 2011.
(5) Leased under two lease agreements expiring in 2002 and 2005.
Both leases include a purchase option.
(6) Leased for a twenty-year term expiring in 2011.
(7) Leased for a ten-year term expiring in 2000. This lease
includes a purchase option.
(8) Facilities are shared by Schroff U.K. & Hoffman U.K.
Total area is 59,000 square feet.
Paper Products Segment
APPROXIMATE
ANNUAL
CAPACITY
SUBSIDIARY/ OF MILL
DIVISION LOCATION PRIMARY USE (NET TONS)
IN NET TONS
Niagara
FN1 Niagara, Manufacturing 235,000
WisconsinWisconsin(1) and Office
Cross Pointe FN2 St. Paul, Office
Minnesota
FN3Minnesota(2)
West Chicago, Distribution and
IllinoisIllinois(3) Paper Converting
West Carrollton, Manufacturing 110,000
Ohio and Office
FN4 Park Falls, Manufacturing 125,000
WisconsinWisconsin(4) and Office
Dayton, Manufacturing FN545,000
Ohio and Office
Lake Superior
FN6 Duluth, Manufacturing 240,000
MinnesotaSuperior Minnesota(5) and Office
[FN]
FOOTNOTES:
FN1NOTES:
(1) Certain pulp and paper production
equipment is leased. One lease expires in
1996 with options to renew for two terms of three years each.
Another lease expires in 1999 with options to renew for three terms of
two years each. The third lease expires in 2006 with an option to purchase
after seven years and options to renew for up to eight years . Under each
lease, Niagara has the option to purchase the equipment at the then-current
market value at the end of the initial term or at the end of each renewal
term.
FN2(2) Consists of 10,700 square feet of space under a lease expiring in 1997.
FN3(3) Consists of 202,000 square feet under a lease expiring in 1998 and
253,000 square feet under a lease expiring in 2001.
FN4(4) The Flambeau mill power plant is leased until 2007 with options
to renew for three terms of five years each.
FN5 Purchased December 1993 and not currently in use. Projected
capacity is approximately 45,000 net tons.
FN6(5) The production equipment is leased under 25-year leases through 2012
with options to renew for periods of five to seven years and options
to purchase the equipment in 1997, and at the expiration of the lease
term and of any renewal term.
Item 3. Legal Proceedings.
The Registrant or its subsidiaries have been made parties
to actions filed, or have been given notice of potential
claims, by
staterelating to the conduct of its business, including
those pertaining to product liability, environmental and
federal enforcement agencies asserting liability for
past disposal of hazardous wastes, generally in conjunction
with numerous other codefendants or potential codefendants
or asserting responsibility for undertaking remedial action. In
addition, various other legal actions, governmental
proceedings, and claims are pending against the Registrant or
its subsidiaries.employment matters. Major matters which had or may have an
impact on the Registrant are discussed below. The
Registrant believes that
because of the reserves, insurance coverage and U.S. Army
indemnification discussed below, it is remote that the outcome of
such matters will have a material adverse effect on the
Registrant's financial position or future results of operations,
based on current circumstances known to the Registrant.
Federal-Hoffman, TCAAP Facility. Federal-Hoffman, Inc.
(Federal-Hoffman) is a party to certain litigation and claims
arising out of allegedly improper disposal of hazardous wastes
generated at the Twin Cities Army Ammunition Plant (TCAAP)
in northern Ramsey County, Minnesota, which Federal
Cartridge, a division of Federal-Hoffman, maintains pursuant
to a contract with the U.S. Army. While remediation of
affected sites continues, the underlying claims or litigation are
the subject of settlement agreements or consent orders and
are resolved in large part. In light of previous indemnification
of Federal Cartridge by the U.S. Army or Federal-Hoffman's
insurer for all settlements and costs incurred in TCAAP-related
matters, the Registrant believes that liability, if any, to its
Federal-Hoffman subsidiary arising from its operation of the
TCAAP facility will not be material.
Federal-Hoffman, Inc. Sites. Federal Cartridge, a division of
Federal-Hoffman, has been named by the EPA as a
Potentially Responsible Party (PRP) in connection with two environmental
sites based on claims that Federal Cartridge sent material to
these sites. Based on current information available to it, the
Registrant believes that these matters are unlikely to result in
material future liability.
NL Industries/Taracorp. The EPA issued an administrative
order effective January 18, 1991 to Federal Cartridge and 48
other entities to compel the clean-up of the NL
Industries/Taracorpa
waste disposal site in Granite City, Illinois. Federal
Cartridge sent virgin lead to a facility on the site to be formed
into lead shot. The EPA has identified over 300 other PRPs
and estimates the cost of remediating the site to be
approximately $30 million.
On July 31, 1991, EPA sued 11 of the 49 PRPs who were
issued the January 1991 order, seeking enforcement of the
January 1991 order and reimbursement of the EPA's costs,
plus fines and penalties. Federal Cartridge and three others
were not named in the lawsuit because of pending settlement
discussions. Federal Cartridge and one other supplier of virgin
materials have offered to pay a total of $1,000,000, of which
$490,000 is Federal Cartridge's share. The EPA has indicated
that it anticipates submitting a consent decree for court
approval before May 1, 1994. Federal Cartridge has received
notice that several nonsettling parties oppose the settlement.
Federal Cartridge's insurer has been notified of this matter and
has declined to indemnify or defend Federal Cartridge with
respect to this matter at this time.
Aqua-Tech.Greer, South Carolina. The EPA
issued an administrative order effective April 29, 1992 to
Federal-Hoffman and 96 other entities to compel the
cleanup of the Aqua-Tech Environmental, Inc. site
in Greer, South Carolina. Federal Cartridge shipped waste
from its manufacturing process to this site several times in
recent years.site.
Federal-Hoffman is working with a group of other PRPs to
negotiate with the EPA regarding the cleanup of the site. A
surface cleanup of the site is complete. Under interim
allocations by the PRP group, Federal Cartridge paid
$442,000 toward the cost of the surface cleanup. Under
current final allocation proposals, Federal-Hoffman
anticipates receivingno additional payout for the surface cleanup.
On March 16, 1995, the EPA notified Federal Cartridge that
it is a credit for some portionPRP related to the subsurface of that amount.the site. The PRP
group anticipates beginning a study of the soil and
groundwater to determine the extent of subsurface
contamination. The cost of such study, any necessary
remediation and the size of allocation, if any, to Federal-
HoffmanFederal-Hoffman is unknown to
the Registrant at this time. Federal-
HoffmanFederal-Hoffman however, anticipates a minimalits
allocation in the subsurface action due to be positively impacted by the nature of
its waste and the fact that virtually all of its waste was
accounted for and removed during the surface remediation.
In October 1992, Hoffman Engineering, a division of
Federal-
Hoffman,Federal-Hoffman was also named as a PRP in connection
with the Aqua-Tech site. Hoffman settled out of the surface
removal as a de minimis party, and anticipates doing the
same for the subsurface remediation. Based on current
information available to it, the Registrant believes that this
matter is unlikely to result in material future liability.
Porter-Cable Corporation. In November 1993, the
Tennessee Department of Environment and Conservation
(TDEC) issued to Porter-Cable Corporation (Porter-Cable)
and Rockwell International Corporation (Rockwell) an
administrative order requiring them to investigate, and if
necessary, clean up alleged groundwater contamination at
a manufacturing facility located in Madison County,
Tennessee. The facility was acquired by Porter Cable from
Rockwell International Corporation in 1981. Porter Cable has served notice onis currently engaged in
discussions with Rockwell of Porter Cable's
intent to seekreach an agreement regarding
indemnification from or cost sharing with Rockwell, based
upon Tennessee and Federal law, for all costs and expenses
related to investigation and cleanup of the site. The Registrant believes
that this matter is unlikely to result in material liability or
material changes in operations. No estimate of the
projected response cost liability can be made based on
information currently known to the Company.
Delta International Machinery. In January 1993, Beaver-Delta
Machinery Corp. (Beaver-Delta), a former subsidiary of Delta
International Machinery Corp., and three other parties were
sued by a commercial developer and current owner of real
estate in Guelph, Ontario that Rockwell International previously
owned and that was acquired by Beaver-Delta in 1984.
Trichlorethylene (TCE) and other contamination of soil and
groundwater has been alleged. Plaintiff seeks past and future
cleanup costs, as well as increased costs and lost profits
allegedly suffered. Plaintiff alleges in the action that it has
spent Cdn. $160,000 to remediate the property and seeks
damages in the amount of Cdn. $5.5 million. Preliminary
investigation indicated that Beaver-Delta did not use TCE
during the short period that it owned the property at issue.
Beaver-Delta has served notice on Rockwell of its intent to
seek indemnification from Rockwell for all costs related to this
matter. Plaintiff has not pursued this lawsuit since its
commencement. The Registrant believes that this matter is
unlikely to result in material liability.
Niagara of Wisconsin Paper Corporation. In January 1994, the
State of Wisconsin filed an enforcement action against Niagara
involving allegations of particulate emissions from Niagara's
coal processing plant in excess of limits set in its permit.
Emissions at issue occurred at various times between August
1992 and May 1993. The State is seeking monetary
forfeitures, penalties, injunctive relief and costs for the alleged
violations. The State's settlement demand of $120,000 has
been rejected by Niagara. The Registrant believes that this
matter is unlikely to result in liability to Niagara that is material
to the Registrant's overall financial condition.
Cross Pointe Paper Corporation. TheIn February 1994, the
Miami mill (Miami) of Cross Pointe Paper Corporation (Miami) is currently discussing with
the State of Ohio alleged violations of Miami's water pollution
control (NPDES) permit which occurred from 1988 to mid
1992. The State is currently seeking a settlement in an
amount of $220,000. Miami's current NPDES permit provides
an allowance until 1995 to take corrective action to eliminate
violations.
IWD/Cardington Site. In February 1994, Miami was
named a PRP in connection with the IWD/Cardington
landfill in Moraine, Ohio. Waste haulers with whom Miami
contracted to transport its flyash and paper and wood waste
allegedly took it to this landfill for some time prior to its
closure in 1980. The EPA has identified 22 other PRPs at
this time. The cost of remediation of the site is estimated to
be approximately $12 to $15 million. Miami is investigating
its alleged involvement at this site.
McNeil (Ohio)Niagara of Wisconsin Paper Corporation. F.E. Myers (Myers), a divisionIn March
1994, Niagara of McNeil (Ohio)Wisconsin Paper Corporation has received notice(Niagara)
was notified by the Michigan Department of a claim of
contamination of soil surrounding an underground storage tank
on property owned by Myers prior to September 1986. An
estimate of $125,000 has been given to perform remediationNatural
Resources (MDNR) that Niagara's sludge lagoons violate
MDNR regulations. Niagara is discussing with the MDNR
the closure schedule of the alleged contamination. Thelagoons and the need for
expanded groundwater monitoring at the site. Monitoring
done to date indicates some groundwater contamination,
but at this time the extent is unknown. It is likely that some
remediation will be required; but the Registrant believesdoes not
anticipate that this
matter is unlikely to result in liability to Myers that isthe cost of any such remediation will have a
material to theimpact on Registrant's overall financial condition.condition or
operations.
California Proposition 65 Notice. In February 1994, MyersTwo divisions of
Registrant's subsidiaries have received a noticenotices pursuant to
California Health and Safety Code Section 25249
(Proposition 65). In February 1994, F.E. Myers (Myers), a
division of McNeil (Ohio) Corporation, received a notice
regarding alleged violations arising from discharge of lead
from submersible water pumps into drinking water since
February 27, 1988. Two private environmental groups sent
the notice to and subsequently filed suit against Myers and
three other pump manufacturers and one pump distributor.
Under Proposition 65, the penalty for each violation is
$2,500 per day. Myers is responding to the claims raised in
the lawsuit. In light of a recent settlement proposal by
plaintiffs, Registrant believes that it is unlikely that this
matter will result in material liability.
In October 1994, Federal Cartridge (Federal), a division of
Federal-Hoffman, Inc. received a notice regarding alleged
violations of Proposition 65 arising from exposure of firearm
users to lead from ammunition. A private environmental
group sent the notice to Federal and 75 other ammunition
and firearms manufacturers and sellers. Federal is
currently investigating the claims set forth in this notice.
Product Liability Claims. As of March 4, 1994,1995, the
Registrant or its subsidiaries are defendants in
approximately 217177 product liability lawsuits and have been
notified of approximately 129100 additional claims. The Registrant maintains an active case
management and insurance review program to closely
supervise these and other litigation matters. The
Registrant has had and currently has in place insurance
coverage it deems adequate for its needs; accountingneeds. A substantial
number of these lawsuits and claims are insured by
Penwald, a regulated insurance company wholly owned by
Registrant. See discussion in Item 7 (MD&A - Insurance
Subsidiary) and Item 8 (Note 1 to the Financial Statements).
Accounting reserves covering the deductible portion of
all liability claims not covered by Penwald have been
established and are reviewed on a regular basis. The
Registrant has not experienced unfavorable trends in either
the severity or frequency of product liability claims.
McNeil Asbestos Lawsuits. Since 1987, McNeil and a large
number of manufacturers or installers of asbestos-containing
products have been named as codefendants in lawsuits
involving claims by 6,340 tireworkers seeking damages for
personal injuries allegedly caused by exposure to asbestos or
talc in various tire plants. A former division of McNeil's
predecessor, McNeil Corporation, supplied tire curing presses
for which asbestos may have been used as an insulating
material. Of those claims against McNeil, 1,109 have been
dismissed, 4,802 have been settled, with an average
settlement amount of $1,400, and 595 claims remain. The
evidence developed to date does not suggest that future
settlements would be higher than the historical average. In
addition, significant dismissals are anticipated to occur without
any indemnity payments.
Ninety percent of the cost of defending and settling these
actions has been paid by McNeil's insurance carriers, with the
balance being paid by McNeil. The Registrant believes that its
carriers will continue to cover a comparable portion of defense
costs and damages, if any, for which McNeil might be found
liable in the future, and self-insurance reserves are adequate
to cover any remaining portion. Considering the existence of
factual and legal defenses to the pending suits and the
applicable insurance coverage, the Registrant believes that
these suits are unlikely to result in material liability.
Item 4. Submission of Matters to a Vote of Security
Holders.
During the fourth quarter, no matter was submitted to a vote
of security holders.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following are the executive officers of the Registrant.
Their term of office extends until the next annual meeting of
the Board of Directors, scheduled for April 20, 1994, or until
their successors are elected and have qualified.
Winslow H. Buxton Age 54
Chairman since January 15, 1993; President and Chief
Executive Officer since August 1992; Chief Operating
Officer, August 1990 - August 1992; Vice President -
Paper Group, January 1989 - August 1990.
Joseph R. Collins Age 52
Senior Vice President - Specialty Products since August
1991; Acting Chief Financial Officer, June 1993 - March
14, 1994; President, Delta International Machinery
Corporation (subsidiary of the Registrant), October 1984 -
August 1991.
Ronald V. Kelly Age 57
Senior Vice President - Paper Products since August
1991; Vice President - Specialty Products, March 1989 -
August 1991; President, Lake Superior Paper Industries (a
joint venture in which the Registrant is a 50% owner),
January 1986 - March 1989.
Gerald C. Kitch Age 56
Senior Vice President - General Industrial Equipment since
August 1991; Vice President - General Industrial
Equipment, March 1989 - August 1991.
Allan J. Kolles Age 62
Vice President, Human Resources since March 1985.
Roy T. Rueb Age 53
Vice President, Treasurer since October 1986 and Acting
Secretary since June 1993.
Mark T. Schroepfer Age 47
Vice President, Controller since January 1990; Corporate
Controller, March 1987 - January 1990.
David D. Harrison Age 46
Senior Vice President and Chief Financial Officer since
March 15, 1994; Vice-President, Finance and Information
Technology of the GE Canada Appliance Component subsidiary of
General Electric, August 1992 - March 1994; Vice
President, Finance and Deputy Executive Officer of the GE
Europe Lighting Component subsidiary of General Electric,
January 1990 - July 1992; and Director of Finance,
Europe, Controller, and various other financial positions for
Borg Warner/GE U.S. Plastics Component, February 1972 -
January 1990.
Richard W. Ingman Age 49
Vice President, Corporate Development, August 1989 -
February 1994; President of Ingman, Inc. (business
training and consulting), January 1987 - August 1989.
Effective March 1, 1994, Mr. Ingman was named President
of Hoffman Engineering Division of Federal-Hoffman, Inc.
(subsidiary of Registrant).
There is no family relationship between any of the officers or
directors.
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.
Item 6. Selected Financial Data.
Item 7. Management's7.Management's Discussion and Analysis of
Financial Condition and Results of Operation.
Item 8. Financial Statements and Supplementary Data.
For information required under Items 5 through 8, see the
Registrant's Annual Report to Shareholders for the year
ended December 31, 1993,1994, as referenced on page 2 of this
report.
Item 9. Changes9.Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure.
No changes in accountants or disagreements between the
Registrant and its accountants regarding accounting
principles or financial statement disclosures have occurred
within the 24 months prior to the date of the Registrant's
most recent financial statements.
PART III
Item 10. Directors and Executive Officers of the Registrant.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following are the executive officers of the Registrant.
Their term of office extends until the next annual meeting of
the Board of Directors, scheduled for April 19, 1995, or until
their successors are elected and have qualified.
Winslow H. Buxton 55
Chairman since January
15, 1993; President and
Chief Executive Officer
since August 1992; Chief
Operating Officer, August
1990 - August 1992; Vice
President - Paper Group,
January 1989 - August
1990.
Wilson Blackburn 42
Vice President, Paper
Operations since
September 1994;
President, Cross Pointe
Paper Corporation
(subsidiary of Registrant)
since September 1994;
President, Lake Superior
Paper (joint venture of
Registrant), April 1993 -
September 1994;
President and CEO of
PWA Rolland Decor Inc.,
1990-1993; Vice
President, Operations,
Rolland Inc., 1989-1990.
(In connection with the
sale of Cross Pointe
Paper Corporation to
Noranda Forest, Mr.
Blackburn has resigned
effective April 1, 1995.)
Richard J. Cathcart 50
Executive Vice President,
Corporate Development
since March 6, 1995;
Vice President, Business
Development of
Honeywell, Inc. 1994 -
March 1995; Vice
President and General
Manager of Honeywell's
Worldwide Building
Control Division 1992 -
1994; Vice President and
General Manager,
Honeywell's U.S.
Operations of Building
Control Division, 1988-1991.
Joseph R. Collins 53
Senior Vice President -
Specialty Products since
August 1991; Acting
Chief Financial Officer,
June 1993 - March 1994;
President, Delta
International Machinery
Corporation (subsidiary of
the Registrant), October
1984 - August 1991.
David D. Harrison 47
Senior Vice President
and Chief Financial
Officer since March 1994;
Vice-President, Finance
and Information
Technology of the GE
Canada Appliance
Component subsidiary of
General Electric, August
1992 - March 1994; and
Vice President, Finance
and Deputy Executive
Officer of the GE Europe
Lighting Component
subsidiary of General
Electric, January 1990 -
July 1992.
Ronald V. Kelly 58
Senior Vice President -
Long Range Planning
since September 1994;
Senior Vice President -
Paper Products, August
1991 - September 1994;
Vice President - Specialty
Products, March 1989 -
August 1991.
Gerald C. Kitch 57
Senior Vice President -
General Industrial
Equipment since August
1991; Vice President -
General Industrial
Equipment, March 1989 -
August 1991.
Debby S. Knutson 40
Vice President, Human
Resources since
September 1994;
Assistant Vice President,
Human Resources ,
August 1993 -
September 1994; Vice
President, Human
Resources of Hoffman
Engineering (division of
Registrant) July 1990 -
August 1993; Director of
Human Resources at
Hoffman, December
1988 - July 1990.
Allan J. Kolles 63
Senior Vice President
and Assistant to the Chief
Executive Officer since
August 1994; Vice
President, Human
Resources, March 1985
- August 1994.
Roy T. Rueb 54
Vice President, Treasurer
since October 1986 and
Secretary since June
1994.
Mark T. Schroepfer 48
Vice President Finance
and MIS since June
1994; Vice President,
Controller, January 1990
- June 1994.
There is no family relationship between any of the executive
officers or directors.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial
Owners and Management.
For information required under Items 10 through11 and 12, see the
Registrant's Proxy Statement for the 19941995 Annual Meeting
of Shareholders referenced on page 2 of this report, and
"Executive Officers of the Registrant" found after Item 4 of this report.
Item 13. Certain Relationships and Related Transactions.
No relationships or transactions existed that require
disclosure under Item 13.
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a) Financial Statements Financial Statement Schedules, and Exhibits.
1. The following consolidated financial statements
of Pentair, Inc. and subsidiaries, together with the Report of
Independent Auditors,Certified Public Accountants, found on pages
2434 to 3753 of the Registrant's Annual Report to Shareholders
for the year ended December 31, 1993,1994, are hereby
incorporated by reference in this Form 10-K.
Page of Annual Report
Report of Independent Auditors 24Certified Public Accountants34
Consolidated StatementStatements of Income
for Years Ended December 31, 1994,
1993 and 1992
and 1991 2535
Consolidated Balance SheetSheets as of
December 31, 1994 and 1993
and 1992 2636 - 2737
Consolidated StatementStatements of Cash Flows
for Years Ended December 31, 1994,
1993 and 1992
and 1991 2839
Notes to Consolidated Financial
Statements
2940 - 3753
2. The additional financial data listed below is
included as exhibits to this Form 10-K Report and should be
read in conjunction with the consolidated financial
statements presented in the 19931994 Annual Report to
Shareholders.
Schedules not included with this additional financial data have
been omitted because they are not required or the required
information is included in the financial statements or the notes.Report of Independent Auditors' Report
SchedulesCertified Public Accountants
Schedule for the years ended December 31, 1994, 1993
1992 and 1991:
V - Property, Plant and Equipment
VI - Accumulated Depreciation and Amortization of Property,
Plant and Equipment
VIII -1992:
VIII- Valuation and Qualifying Accounts
X - Supplementary Income Statement Information
3. The following exhibits are included with this Report on
Form 10-K (or incorporated by reference) as required by
Item 601 of Regulation S-K.
Exhibit
Number Description
(3.1) Restated Articles of Incorporation as
amended through April 25, 1989.
(3.2) Resolution Establishing and Designating
$7.50 Callable Cumulative Convertible
Preferred Stock, Series 1988, as a series
of Preferred Stock of Pentair, Inc.
(3.3) Resolution Establishing and Designating
8% Callable Cumulative Voting Convertible
Preferred Stock, Series 1990, as a series
of Preferred Stock of Pentair, Inc.
(3.4) Second Amended and Superseding By-Laws as amended through January 19,
1993.
(4.1) Restated Articles of Incorporation, as
amended, and Second Amended and
Superseding By-
Laws,By-Laws, as amended (see
Exhibits 3.1 - 3.4 above).
(4.2) Rights Agreement dated December 26,
1986 between the Company and First
Trust Company, Inc.
(4.3) Amendment to Rights Agreement dated
July 22, 1988 between the Company and
Norwest Bank Minnesota, National
Association, as successor Rights Agent
(Amending Exhibit 4.2).
(4.4) Second Amendment to Rights Agreement
dated December 15, 1989 between the
Company and Norwest Bank Minnesota,
National Association, as successor Rights
Agent (Amending Exhibit 4.2).
(4.5) Bid Loan Agreement dated December 14,
1988 between the Company, Continental
Bank N.A. for itself and as Agent, Morgan
Guaranty Trust Company of New York,
Morgan Bank (Delaware), First Bank
National Association, Norwest Bank
Minnesota, N.A., and Mellon Bank, N.A.
(4.6) First Amendment to Bid Loan Agreement
dated January 1, 1991 between the
Company, Continental Bank N.A. for itself
and as Agent, Morgan Guaranty Trust
Company of New York, Morgan Bank
(Delaware), First Bank National
Association, Norwest Bank Minnesota,
N.A., and NBD Bank, N.A. (Amending
Exhibit 4.5).
(4.7) Second Amendment to Bid Loan
Agreement dated as of February 11, 1994
between Pentair, Inc., Continental Bank
N.A. for itself and as Agent, Morgan
Guaranty Trust Company of New York,
J.P. Morgan Delaware, First Bank National
Assocation, Norwest Bank Minnesota,
N.A., and NBD Bank, N.A. (Amending
Exhibit 4.5).
(4.8) $125,000,000 Facility Agreement dated as
of February 11, 1994 between Pentair, Inc.,
Continental Bank N.A. for itself and as
Agent, Morgan Guaranty Trust Company
of New York for itself and as Agent, NBD
Bank, N.A., and J. P. Morgan Delaware.
(4.9) Amendment Number One to Facility
Agreement dated as of November 1, 1994
between Pentair, Inc., Bank of America
Illinois (formerly known as Continental
Bank N.A.) for itself and as Agent, Morgan
Guaranty Trust Company of New York for
itself and as Agent, NBD Bank, N.A., and J.
P. Morgan Delaware. (Amending Exhibit
4.8)
(4.10) $45,000,000 Facility Agreement dated as
of February 11, 1994 between Pentair, Inc.,
First Bank National Association, for itself
and as Agent, and Norwest Bank
Minnesota N.A.
(4.10)(4.11) Amendment Number One to Facility
Agreement dated as of November 1, 1994
between Pentair, Inc., First Bank National
Association, for itself and as Agent, and
Norwest Bank Minnesota N.A.(Amending
Exhibit 4.10)
(4.12) DM 115,000,000 Facility Agreement dated
as of February 11, 1994 between
EuroPentair, GmbH as Borrower, Pentair,
Inc., as Guarantor, Morgan Guaranty Trust
Company of New York for itself and as
Agent, Continental Bank N.A., for itself and
as Agent, NBD Bank, N.A. and Dresdner
Bank.
(4.11)(4.13) Amendment Number One to Facility
Agreement dated as of November 1, 1994
between EuroPentair, GmbH as Borrower,
Pentair, Inc., as Guarantor, Morgan
Guaranty Trust Company of New York for
itself and as Agent, Bank of America
Illinois(formerly known as Continental Bank
N.A.), for itself and as Agent, NBD Bank,
N.A. and Dresdner Bank. (Amending
Exhibit 4.12)
(4.14) Amendment Number Two to Facility
Agreement dated as of February 15, 1995
between EuroPentair, GmbH as Borrower,
Pentair, Inc., as Guarantor, Morgan
Guaranty Trust Company of New York for
itself and as Agent, Bank of America
Illinois(formerly known as Continental Bank
N.A.), for itself and as Agent, NBD Bank,
N.A. and Dresdner Bank . (Amending
Exhibit 4.12)
(4.15) Restatement of Credit Agreement dated
July 11, 1989 between Federal-Hoffman,
Inc. and First Bank National Association.
(4.12)(4.16) Second Amendment to Restatement of
Credit Agreement dated as of January 19,
1993 between Federal-Hoffman, Inc.,
Pentair, Inc., and First Bank National
Association (Amending Exhibit 4.11)4.15) .
(4.13)(4.17) Third Amendment to Restatement of
Credit Agreement dated as of December
31, 1994 between Federal-Hoffman, Inc.,
Pentair, Inc., and First Bank National
Association (Amending Exhibit 4.15)
(4.18) $35,000,000 Note Purchase Agreement
dated March 25, 1991 between Pentair,
Inc. and Nationwide Life Insurance
Company.
(4.14)(4.19) $25,000,000 Note Purchase Agreement
dated December 13, 1991 between
Pentair, Inc. and Principal Mutual Life
Insurance Company.
(4.15)(4.20) $15,000,000 Note Purchase Agreement
dated November 1, 1992 between Pentair,
Inc. and Nationwide Life Insurance
Company.
(4.16)(4.21) $15,000,000 Note Purchase Agreement
dated January 15, 1993 between Pentair,
Inc. and Principal Mutual Life Insurance
Company.
(4.17)(4.22) $70,000,000 Senior Notes Purchase
Agreement dated as of April 30, 1993
between Pentair, Inc. and United of Omaha
Life Insurance Company, Companion Life
Insurance Company, Principal Mutual Life
Insurance Company, Nippon Life
Insurance Company of America, Lutheran
Brotherhood, American United Life
Insurance Company, Modern Woodmen of
America, The Franklin Life Insurance
Company and Ameritas Life Insurance
Corp.
(10.1) Agreements dated February 8, 1978 and
February 9, 1982 between the Company
and D. Eugene Nugent.
(10.2) Agreement dated February 8, 1984
(Amending Exhibit 10.1).
(10.3) Agreement dated December 17, 1985
(Amending Exhibit 10.1).
(10.4) Agreement dated May 7, 1990 (Amending
Exhibit 10.1).
(10.5) Company's Supplemental Employee
Retirement Plan effective June 16, 1988.
(10.6) Company's Restated Long-Term Executive
Performance Plan as amended to October 21,
1987.
(10.7) Company's 1982 Incentive Stock Option Plan.
(10.8) First Amendment to Incentive Stock Plan
(Amending Exhibit 10.10).
(10.9) Second Amendment to Incentive Stock Option
Plan (Amending Exhibit 10.10).
(10.10) Company's 1986 Nonqualified Stock
Option Plan.
(10.11)(10.7) Company's 1990 Omnibus Stock Incentive
Plan
(Superseding Exhibits 10.6 - 10.10 above
starting with 1990 grants).
(10.12)Plan.
(10.8) Company's Management Incentive Plan as
amended to January 12, 1990.
(10.13)(10.9) Employee Stock Purchase and Bonus Plan
as amended and restated effective
January 1, 1992.
(10.14)(10.10) Company's Flexible Perquisite Program as
amended to January 1, 1989.
(10.15)(10.11) Form of 1986 Management Assurance
Agreement (Revised 1990) between the
Company and certain executive officers.
(10.16)(10.12) Company's Third Amended and Restated
Compensation Plan for Non-Employee
Directors as amended to January 1, 1992.
(10.17)(10.13) Company's Outside Directors Nonqualified
Stock Option Plan dated January 22, 1988.
(10.18)(10.14) First Amendment to Outside Directors
Nonqualified Stock Option Plan (Amending
Exhibit 10.17)10.13).
(10.19)(10.15) Second Amendment to Outside Directors
Nonqualified Stock Option Plan (Amending
Exhibit 10.17)10.13).
(10.20)(10.16) Pentair, Inc. Deferred Compensation Plan
effective January 1, 1993.
(10.21)(10.17) Lake Superior Paper Industries Venture
Council By-Laws and Management
Protocol.
(10.22)(10.18) Second Amended and Restated Joint
Venture Agreement dated December 31,
1987 between Pentair Duluth Corp. and
Minnesota Paper, Incorporated.
(10.23)(10.19) First Amendment to Second Restated Joint
Venture Agreement, First Amendment to
Venture Council By-Laws, and First
Amendment to Management Protocol, all
dated May 30, 1989, between Pentair
Duluth Corp. and Minnesota Paper,
Incorporated (Amending Exhibits 10.2110.17 and
10.22)10.18).
(10.24)(10.20) Cash Deficiency Agreement dated
December 31, 1987 among Pentair Duluth
Corp., as Joint Venturer, Associated
Southern Investment Company, as Owner
Participant, The Connecticut Bank and
Trust Company, National Association, as
Indenture Trustee, and First National Bank
of Minneapolis, as Owner Trustee. Cash
Deficiency Agreements also were entered
into with respect to each of the other four
Owner Participants: Dana Lease Finance
Corporation, NYNEX Credit Company,
Public Service Resources Corporation, and
Southern Indiana Properties, Inc.
(10.25)(10.21) Keepwell Agreement and Assignment
dated December 31, 1987 among Pentair,
Inc., as Sponsor, Pentair Duluth Corp., as
Joint Venturer, and First National Bank of
Minneapolis, as Owner Trustee; although
First Minneapolis executed this filed
document as Owner Trustee for
Associated Southern Investment
Company, additional Keepwell
Agreements and Assignments were
entered into by First Minneapolis as Owner
Trustee for the other four Owner
Participants listed in the description of
Exhibit 10.2410.20 above.
(10.26)(10.22) Definition of Terms for Financing
Agreement dated December 31, 1987 and
the Transaction Documents Referred to
Therein: Sale and Leaseback of Undivided
Interest in Lake Superior Paper Industries'
Supercalendered Paper Mill; although this
filed document supplies the definitions
applicable to the agreements filed as
Exhibits 10.2410.20 and 10.2510.2 above, there were
four additional sets of definitions that
supply the definitions for the other sets of
agreements referred to in the descriptions
of those Exhibits with respect to the various
Owner Participants.
(10.27)(10.23) Loan and Stock Purchase Agreement
dated March 7, 1990 between the
Company and the Pentair, Inc. Employee
Stock Ownership Plan Trust, acting
through State Street Bank and Trust
Company, as Trustee.
(10.28)(10.24) $56,499,982 Promissory Note dated March
7, 1990 of the Pentair, Inc. Employee
Stock Ownership Plan Trust, acting
through State Street Bank and Trust
Company, as Trustee, to the Company.
(11) Statement regarding computation of
earnings per share.
(13) Annual Report to Shareholders for period
ended December 31, 1993.1994.
(21) Subsidiaries of Registrant.
(24) Consent of Deloitte & Touche.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PENTAIR, INC.
By: Joseph R. CollinsBy /s/ David D. Harrison
David D. Harrison
Senior Vice President and
Chief Financial Officer
Dated: March 28, 1994
29, 1995
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has also been signed by the
following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
By:By /s/ Winslow H. Buxton Dated: March 29, 1995
Winslow H. Buxton,
Chairman, President and
Chief Executive Officer, Director
By /s/ George N. Butzow Dated: March 28, 1994
By:29, 1995
George N. Butzow,
Director
By /s/ Charles A. Haggerty Dated: March 28, 1994
By:29, 1995
Charles A. Haggerty,
Director
By /s/ Harold V. Haverty Dated: March 29, 1995
Harold V. Haverty,
Director
By /s/ Quentin J. Hietpas Dated: March 28, 1994
By:29, 1995
Quentin J. Hietpas,
Director
By /s/ B. Kristine Johnson Dated: March 28, 1994
By:29, 1995
B. Kristine Johnson,
Director
By /s/ Walter Kissling Dated: March 28, 1994
By:29, 1995
Walter Kissling,
Director
By /s/ D. Eugene Nugent Dated: March 28, 1994
By: H. William Lurton, Director
Dated: March 28, 1994
By:29, 1995
D. Eugene Nugent,
Director
By /s/ Richard M. Schulze Dated: March 28, 1994
29, 1995
Richard M. Schulze,
Director
REPORT OF INDEPENDENT AUDITORS' REPORTCERTIFIED
PUBLIC ACCOUNTANTS
Pentair, Inc.:
We have audited the consolidated financial statements of
Pentair, Inc. and subsidiaries as of December 31, 19931994 and
1992,1993, and for each of the three years in the period ended
December 31, 1993,1994, and have issued our report thereon
dated February 11, 1994;10, 1995, except for Note 4, as to which the
date is February 21, 1995; such financial statements and
report are included in your 19931994 Annual Report to
Shareholders and are incorporated herein by reference.
Our audits also included the financial statement schedulesschedule of
Pentair, Inc. and subsidiaries listed in Item 14. TheseThis financial
statement schedules areschedule is the responsibility of the Company's
management. Our responsibility is to express an opinion
based on our audits. In our opinion, such financial
statement schedules,schedule, when considered in relation to the
basic financial statements taken as a whole, presentpresents fairly
in all material respects the information set forth therein.
DELOITTE & TOUCHE
Saint Paul,Minneapolis, Minnesota
February 11, 199410, 1995, except for Note 4, as to which the date
is February 21, 1995
SCHEDULE V
PENTAIR, INC. AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
($ Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
OTHER
BALANCE AT CHANGES BALANCE
BEGINNING ADDITIONS RETIRE- ADD AT END OF
OF PERIOD AT COST MENTS (DEDUCT) PERIOD
YEAR ENDED DECEMBER 31, 1991:
Land & land
improvements $11,866 $830 $(865) $11,831
Buildings 63,925 4,776 $(91) (4,368) 64,242
Machinery &
equipment 357,198 54,446 (5,061) (5,622) 400,961
Construction
in progress-net 24,825 (10,632) (134) 14,059
TOTALS FN1 $457,814 $49,420 $(5,152) $(10,989) $491,093
YEAR ENDED DECEMBER 31, 1992:
Land & land
improvements $11,831 $325 $1,192 $13,348
Buildings 64,242 2,515 $(492) (2,143) 64,122
Machinery &
equipment 400,961 43,810 (7,533) 3,204 440,442
Construction
in progress-net 14,059 20,585 (659) 33,985
TOTALS FN2 $491,093 $67,235 $(8,025) $1,594 $551,897
YEAR ENDED DECEMBER 31, 1993:
Land & land
improvements $13,348 $995 $514 $14,857
Buildings 64,122 6,442 $(135) 3,645 74,074
Machinery &
equipment 440,442 73,345 (6,092) (1,129) 506,566
Construction
in progress-net 33,985 (7,361) (315) (189) 26,120
TOTALS FN3 $551,897 $73,421 $(6,542) $2,841 $621,617
[FN]
FN1 Column E includes the sale of the Accutec division of
Hoffman Engineering.
$ (13,495)
FN2 Column E includes the sale of Invicta division of Delta
International Machinery
$ (11,833)
and FAS 109 tax adjusting entries.
$ 13,228
FN3 Column E includes classification of F.E. Myers Foundry
from asset held for disposition
$ 3,887
SCHEDULE VI
PENTAIR, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
($ Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
OTHER
BALANCE AT CHANGES BALANCE
BEGINNING ADDITIONS RETIRE- ADD AT END OF
OF PERIOD AT COST MENTS (DEDUCT) PERIOD
YEAR ENDED DECEMBER 31, 1991:
Land & land
improvements $1,154 $516 $(87) $1,583
Buildings 12,790 3,457 $(50) (482) 15,715
Machinery &
equipment 180,303 40,742 (4,195) (1,355) 215,495
TOTALS FN1 $194,247 $44,715 $(4,245) $(1,924) $232,793
YEAR ENDED DECEMBER 31, 1992:
Land & land
improvements $1,583 $449 $(7) $2,025
Buildings 15,715 3,214 $(375) (1,094) 17,460
Machinery &
equipment 215,495 41,791 (6,331) (8,356) 242,599
TOTALS FN2 $232,793 $45,454 $(6,706) $(9,457) $262,084
YEAR ENDED DECEMBER 31, 1993:
Land & land
improvements $2,025 $497 $(6) $2,516
Buildings 17,460 9,416 $(1,690) 588 25,774
Machinery &
equipment 242,599 37,744 (3,830) 948 277,461
TOTALS FN3 $262,084 $47,657 $(5,520) $1,530 $305,751
[FN]
FN1 Column E includes the sale of the Accutec division of
Hoffman Engineering.
$(2,482)
FN2 Column E includes the sale of Invicta division of Delta
International Machinery.
$(9,108)
FN3 Column E includes the classification of F.E. Myers
Foundry
from asset held for disposition.
$1,763
SCHEDULE VIII
PENTAIR, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31
($ Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND DEDUCTIONS- AT END OF
OF PERIOD EXPENSES WRITE-OFFS PERIOD
($THOUSANDS)
Allowance for
doubtful
accounts and
notes receivables
1991 4,715 2,875 (1,964) 5,626
1992 5,626 2,549 (2,635) 5,540
1993 5,540 1,514 (857) 6,197
SCHEDULE X
PENTAIR, INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE YEARS ENDED DECEMBER 31
($ Thousands)
COLUMN A COLUMN B
Charged to Costs and Expenses
Item 1991 1992 1993
Maintenance and repairs $25,072 $25,178 $25,799
Advertising costs $22,230 $23,433 $27,675
1992 $5,626 $2,549 $(2,635) $5,540
1993 5,540 1,514 (857) 6,197
1994 6,197 2,366 (883) 7,680
All other supplemental income statement information items are
not included in this schedule because they are not required to
be disclosed pursuant to Regulation S-X.
EXHIBIT INDEX
Exhibit
Number Description
(3.1) Restated Articles of
Incorporation as amended
through April 25, 1989
(Incorporated by reference to
Exhibit 3.1 to the Company's
Form 10-Q for the quarter ended
March 31, 1989).
(3.2) Resolution Establishing and
Designating $7.50 Callable
Cumulative Convertible
Preferred Stock, Series 1988, as
a series of Preferred Stock of
Pentair, Inc. (Incorporated by
reference to Exhibit 4.1 to
Amendment No. 1 to the
Company's Current Report on
Form 8-K filed December 30,
1988).
(3.3) Resolution Establishing and
Designating 8% Callable
Cumulative Voting Convertible
Preferred Stock, Series 1990, as
a series of Preferred Stock of
Pentair, Inc. (Incorporated by
reference to Exhibit 4 to the
Company's Current Report on
Form 8-K filed March 21, 1990).
(3.4) Second Amended and
Superseding By-Laws as
amended through January 19,
1993 (Incorporated by reference
to Exhibit 3.16 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992).
(4.1) Restated Articles of
Incorporation, as amended, and
Second Amended and
Superseding By-
Laws,By-Laws, as
amended (see Exhibits 3.1 - 3.4
above).
(4.2) Rights Agreement dated
December 26, 1986 between the
Company and First Trust
Company, Inc. (Incorporated by
reference to Exhibit 1 to the
Company's Registration
Statement on Form 8-A filed
December 26, 1986).
(4.3) Amendment to Rights
Agreement dated July 22, 1988
between the Company and
Norwest Bank Minnesota,
National Association, as
successor Rights Agent
(Amending Exhibit 4.2)
(Incorporated by reference to
Exhibit 4.2 to the Company's
Current Report on Form 8-K filed
August 2, 1988).
(4.4) Second Amendment to Rights
Agreement dated December 15,
1989 between the Company and
Norwest Bank Minnesota,
National Association, as
successor Rights Agent
(Amending Exhibit 4.2)
(Incorporated by reference to
Exhibit 4.3 to the Company's
Current Report on Form 8-K filed
December 28, 1989).
(4.5) Bid Loan Agreement dated
December 14, 1988 between the
Company, Continental Bank N.A.
for itself and as Agent, Morgan
Guaranty Trust Company of New
York, Morgan Bank (Delaware),
First Bank National Association,
Norwest Bank Minnesota, N.A.,
and Mellon Bank, N.A.
(Incorporated by reference to
Exhibit 4.2 to Amendment No. 1
to the Company's Current Report
on Form 8-K filed December 30,
1988).
(4.6) First Amendment to Bid Loan
Agreement dated January 1,
1991 between the Company,
Continental Bank N.A. for itself
and as Agent, Morgan Guaranty
Trust Company of New York,
Morgan Bank (Delaware), First
Bank National Association,
Norwest Bank Minnesota, N.A.,
and NBD Bank, N.A. (Amending
Exhibit 4.5) (Incorporated by
reference to Exhibit 4.9 to the
Company's Annual Report on
Form 10K for the year ended
December 31, 1990).
(4.7) Second Amendment to Bid Loan
Agreement dated as of February
11, 1994 between Pentair, Inc.,
Continental Bank N.A. for itself
and as Agent, Morgan Guaranty
Trust Company of New York,
J.P. Morgan Delaware, First
Bank National Assocation,
Norwest Bank Minnesota, N.A.,
and NBD Bank, N.A. (Amending
Exhibit 4.5) (Incorporated by
reference to Exhibit 4.3 to the
Company's Current Report on
Form 8-K filed March 14, 1994).
(4.8) $125,000,000 Facility Agreement
dated as of February 11, 1994
between Pentair, Inc.,
Continental Bank N.A. for itself
and as Agent, Morgan Guaranty
Trust Company of New York for
itself and as Agent, NBD Bank,
N.A., and J. P. Morgan Delaware
(Incorporated by reference to
Exhibit 4.1 to the Company's
Current Report on Form 8-K filed
March 14, 1994).
(4.9) Amendment Number One to
Facility Agreement dated as of
November 1, 1994 between
Pentair, Inc., Bank of America
Illinois (formerly known as
Continental Bank N.A.) for itself
and as Agent, Morgan Guaranty
Trust Company of New York for
itself and as Agent, NBD Bank,
N.A., and J. P. Morgan
Delaware. (Amending Exhibit
4.8)
(4.10) $45,000,000 Facility Agreement
dated as of February 11, 1994
between Pentair, Inc., First Bank
National Association, for itself
and as Agent, and Norwest Bank
Minnesota N.A. (Incorporated by
reference to Exhibit 4.2 to the
Company's Current Report on
Form 8-K filed March 14, 1994).
(4.10)(4.11) Amendment Number One to
Facility Agreement dated as of
November 1, 1994 between
Pentair, Inc., First Bank National
Association, for itself and as
Agent, and Norwest Bank
Minnesota N.A.(Amending
Exhibit 4.10)
(4.12) DM 115,000,000 Facility
Agreement dated as of February
11, 1994 between EuroPentair,
GmbH as Borrower, Pentair, Inc.,
as Guarantor, Morgan Guaranty
Trust Company of New York for
itself and as Agent, Continental
Bank N.A., for itself and as
Agent, NBD Bank, N.A. and
Dresdner Bank (Incorporated by
reference to Exhibit 4.4 to the
Company's Current Report on
Form 8-K filed March 14, 1994).
(4.11)(4.13) Amendment Number One to
Facility Agreement dated as of
November 1, 1994 between
EuroPentair, GmbH as Borrower,
Pentair, Inc., as Guarantor,
Morgan Guaranty Trust
Company of New York for itself
and as Agent, Bank of America
Illinois(formerly known as
Continental Bank N.A.), for itself
and as Agent, NBD Bank, N.A.
and Dresdner Bank. (Amending
Exhibit 4.12)
(4.14) Amendment Number Two to
Facility Agreement dated as of
February 15, 1995 between
EuroPentair, GmbH as Borrower,
Pentair, Inc., as Guarantor,
Morgan Guaranty Trust
Company of New York for itself
and as Agent, Bank of America
Illinois(formerly known as
Continental Bank N.A.), for itself
and as Agent, NBD Bank, N.A.
and Dresdner Bank . (Amending
Exhibit 4.12)
(4.15) Restatement of Credit
Agreement dated July 11, 1989
between Federal-Hoffman, Inc.
and First Bank National
Association (Incorporated by
reference to Exhibit 4.10 to the
Company's Form 10-K for the
year ended December 31,
1989).
(4.12)(4.16) Second Amendment to
Restatement of Credit
Agreement dated as of January
19, 1993 between Federal-Hoffman, Inc., Pentair, Inc., and
First Bank National Association
(Amending Exhibit 4.11)4.15)
(Incorporated by reference to
Exhibit 4.13 to the Company's
Form 10-K for the year ended
December 31, 1992).
(4.13)(4.17) Third Amendment to
Restatement of Credit
Agreement dated as of
December 31, 1994 between
Federal-Hoffman, Inc., Pentair,
Inc., and First Bank National
Association (Amending Exhibit
4.15).
(4.18) $35,000,000 Note Purchase
Agreement dated March 25,
1991 between Pentair, Inc. and
Nationwide Life Insurance
Company. (Incorporated by
reference to Exhibit 4.14 to the
Company's Registration
Statement on Form S-8 filed
August 6, 1991).
(4.14)(4.19) $25,000,000 Note Purchase
Agreement dated December 13,
1991 between Pentair, Inc. and
Principal Mutual Life Insurance
Company. (Incorporated by
reference to Exhibit 4.15 to the
Company's Registration
Statement on Form S-8 filed
January 13, 1992).
(4.15)(4.20) $15,000,000 Note Purchase
Agreement dated November 1,
1992 between Pentair, Inc. and
Nationwide Life Insurance
Company (Incorporated by
reference to Exhibit 4.16 to the
Company's Form 10-K for the
year ended December 31,
1992).
(4.16)(4.21) $15,000,000 Note Purchase
Agreement dated January 15,
1993 between Pentair, Inc. and
Principal Mutual Life Insurance
Company (Incorporated by
reference to Exhibit 4.17 to the
Company's Form 10-K for the
year ended December 31,
1992).
(4.17)(4.22) $70,000,000 Senior Notes
Purchase Agreement dated as of
April 30, 1993 between Pentair,
Inc. and United of Omaha Life
Insurance Company, Companion
Life Insurance Company,
Principal Mutual Life Insurance
Company, Nippon Life Insurance
Company of America, Lutheran
Brotherhood, American United
Life Insurance Company,
Modern Woodmen of America,
The Franklin Life Insurance
Company and Ameritas Life
Insurance Corp.Corp (Incorporated by
reference to Exhibit 4.17 to the
Company's Form 10-K for the
year ended December 31,
1993).
(10.1) Agreements dated February 8,
1978 and February 9, 1982
between the Company and D.
Eugene Nugent (Incorporated by
reference to Exhibit 10.2 to the
Company's Registration
Statement on Form S-2 filed
June 24, 1983).
(10.2) Agreement dated February 8,
1984 (Amending Exhibit 10.1)
(Incorporated by reference to
Exhibit 10.4 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1983).
(10.3) Agreement dated December 17,
1985 (Amending Exhibit 10.1)
(Incorporated by reference to
Exhibit 10.6 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1985).
(10.4) Agreement dated May 7, 1990
(Amending Exhibit 10.1).
(Incorporated by reference to
Exhibit 10.4 to the Company's
Annual Report on Form 10K for
the year ended December 31,
1990).
(10.5) Company's Supplemental
Employee Retirement Plan
effective June 16, 1988
(Incorporated by reference to
Exhibit 10.10 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1989).
(10.6) Company's Restated Long-Term Executive
Performance Plan as amended to October 21,
1987 (Incorporated by reference to Exhibit 10.9
to the Company's Annual Report on Form 10-K
for the year ended December 31, 1987).
(10.7) Company's 1982 Incentive Stock Option Plan
(Incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-2
filed June 24, 1983).
(10.8) First Amendment to Incentive Stock Plan
(Amending Exhibit 10.7) (Incorporated by
reference to Exhibit 10.10 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1985).
(10.9) Second Amendment to Incentive Stock Option
Plan (Amending Exhibit 10.7) (Incorporated by
reference to Exhibit 14 to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1989).
(10.10) Company's 1986 Nonqualified
Stock Option Plan (Incorporated
by reference to Exhibit 10.14 to
the Company's Annual Report
on Form 10-K for the year ended
December 31, 1986).
(10.11)(10.7) Company's 1990 Omnibus Stock
Incentive Plan
(Superseding Exhibits 10.6 - 10.10 above starting
with 1990 grants) (Incorporated by
reference to Exhibit 10.16 to the
Company's Annual Report on
Form 10-K for the year ended
December 31, 1989).
(10.12)(10.8) Company's Management
Incentive Plan as amended to
January 12, 1990 (Incorporated
by reference to Exhibit 10.17 to
the Company's Annual Report
on Form 10-K for the year ended
December 31, 1989).
(10.13)(10.9) Employee Stock Purchase and
Bonus Plan as amended and
restated effective January 1,
1992 (Incorporated by reference
to Exhibit 10.16 to the
Company's Annual Report on
Form 10-K for the year ended
December 31, 1991).
(10.14)(10.10) Company's Flexible Perquisite
Program as amended to January
1, 1989 (Incorporated by
reference to Exhibit 10.20 to the
Company's Annual Report on
Form 10-K for the year ended
December 31, 1989).
(10.15)(10.11) Form of 1986 Management
Assurance Agreement (Revised
1990) between the Company
and certain executive officers
(Incorporated by reference to
Exhibit 10.22 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1989).
(10.16)(10.12) Company's Third Amended and
Restated Compensation Plan for
Non-Employee Directors as
amended to January 1, 1992.
(Incorporated by reference to
Exhibit 10.1 to the Company's
Registration Statement on Form
S-8 filed January 13, 1992).
(10.17)(10.13) Company's Outside Directors
Nonqualified Stock Option Plan
dated January 22, 1988
(Incorporated by reference to
Exhibit 10.20 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1987).
(10.18)(10.14) First Amendment to Outside
Directors Nonqualified Stock
Option Plan (Amending Exhibit
10.17)10.13) (Incorporated by
reference to Exhibit 10.22 to the
Company's Annual Report on
Form 10-K for the year ended
December 31, 1991).
(10.19)(10.15) Second Amendment to Outside
Directors Nonqualified Stock
Option Plan (Amending Exhibit
10.17)10.13) (Incorporated by
reference to Exhibit 10.23 to the
Company's Annual Report on
Form 10-K for the year ended
December 31, 1991).
(10.20)(10.16) Pentair, Inc. Deferred
Compensation Plan effective
January 1, 1993 (Incorporated by
reference to Exhibit 10.21 to the
Company's Form 10-K for the
year ended December 31,
1992).
(10.21)(10.17) Lake Superior Paper Industries
Venture Council By-Laws and
Management Protocol
(Incorporated by reference to
Exhibit 10.16 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1985).
(10.22)(10.18) Second Amended and Restated
Joint Venture Agreement dated
December 31, 1987 between
Pentair Duluth Corp. and
Minnesota Paper, Incorporated
(Incorporated by reference to
Exhibit 10.25 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1987).
(10.23)(10.19) First Amendment to Second
Restated Joint Venture
Agreement, First Amendment to
Venture Council By-Laws, and
First Amendment to
Management Protocol, all dated
May 30, 1989, between Pentair
Duluth Corp. and Minnesota
Paper, Incorporated (Amending
Exhibits 10.2110.17 and 10.22)10.18)
(Incorporated by reference to
Exhibit 10.28 to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1989).
(10.24)(10.20) Cash Deficiency Agreement
dated December 31, 1987
among Pentair Duluth Corp., as
Joint Venturer, Associated
Southern Investment Company,
as Owner Participant, The
Connecticut Bank and Trust
Company, National Association,
as Indenture Trustee, and First
National Bank of Minneapolis, as
Owner Trustee. Cash Deficiency
Agreements also were entered
into with respect to each of the
other four Owner Participants:
Dana Lease Finance
Corporation, NYNEX Credit
Company, Public Service
Resources Corporation, and
Southern Indiana Properties, Inc.
(Incorporated by reference to
Exhibit 10.1 to Amendment No. 1
to the Company's Current Report
on Form 8-K filed April 26,
1988).
(10.25)(10.21) Keepwell Agreement and
Assignment dated December 31,
1987 among Pentair, Inc., as
Sponsor, Pentair Duluth Corp.,
as Joint Venturer, and First
National Bank of Minneapolis, as
Owner Trustee; although First
Minneapolis executed this filed
document as Owner Trustee for
Associated Southern Investment
Company, additional Keepwell
Agreements and Assignments
were entered into by First
Minneapolis as Owner Trustee
for the other four Owner
Participants listed in the
description of Exhibit 10.2410.20
above (Incorporated by
reference to Exhibit 10.2 to
Amendment No. 1 to the
Company's Current Report on
Form 8-K filed April 26, 1988).
(10.26)(10.22) Definition of Terms for Financing
Agreement dated December 31,
1987 and the Transaction
Documents Referred to Therein:
Sale and Leaseback of
Undivided Interest in Lake
Superior Paper Industries'
Supercalendered Paper Mill;
although this filed document
supplies the definitions
applicable to the agreements
filed as Exhibits 10.2410.20 and 10.2510.21
above, there were four additional
sets of definitions that supply the
definitions for the other sets of
agreements referred to in the
descriptions of those Exhibits
with respect to the various Owner
Participants (Incorporated by
reference to Exhibit 10.3 to
Amendment No. 1 to the
Company's Current Report on
Form 8-K filed April 26, 1988).
(10.27)(10.23) Loan and Stock Purchase
Agreement dated March 7, 1990
between the Company and the
Pentair, Inc. Employee Stock
Ownership Plan Trust, acting
through State Street Bank and
Trust Company, as Trustee
(Incorporated by reference to
Exhibit 10.1 to the Company's
Current Report on Form 8-K filed
March 21, 1990).
(10.28)(10.24) $56,499,982 Promissory Note
dated March 7, 1990 of the
Pentair, Inc. Employee Stock
Ownership Plan Trust, acting
through State Street Bank and
Trust Company, as Trustee, to
the Company (Incorporated by
reference to Exhibit 10.2 to the
Company's Current Report on
Form 8-K filed March 21, 1990).
(11) Statement regarding
computation of earnings per
share.
(13) Annual Report to Shareholders
for period ended December 31,
1993.1994.
(21) Subsidiaries of Registrant.
(24) Consent of Deloitte & Touche.