-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VnmnTXOB2mCpeLACTwHjO9SqixFxqgshY/7foQ2dB3WqiyXW5MSKv6x8e+jQ/krR +IEXSr3cdiJztVf+GKCIeA== 0000109446-97-000025.txt : 19970930 0000109446-97-000025.hdr.sgml : 19970930 ACCESSION NUMBER: 0000109446-97-000025 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970929 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZURN INDUSTRIES INC CENTRAL INDEX KEY: 0000109446 STANDARD INDUSTRIAL CLASSIFICATION: COGENERATION SERVICES & SMALL POWER PRODUCERS [4991] IRS NUMBER: 251040754 STATE OF INCORPORATION: PA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-05502 FILM NUMBER: 97687690 BUSINESS ADDRESS: STREET 1: ONE ZURN PL STREET 2: P O BOX 2000 CITY: ERIE STATE: PA ZIP: 16514 BUSINESS PHONE: 8144522111 MAIL ADDRESS: STREET 1: ONE ZURN PLACE STREET 2: P O BOX 2000 CITY: ERIE STATE: PA ZIP: 16514 11-K 1 ELJER 401(K) DECEMBER 1996 FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 X Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the Fiscal Year Ended December 31, 1996 ___ Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the Transition Period From ___________ To __________ Commission File Number 1-5502 ELJER TAX REDUCTION INVESTMENT PLAN (Full title of the Plan) ZURN INDUSTRIES, INC. One Zurn Place, Erie, Pennsylvania 16505 (Name and address of issuer of securities held pursuant to the Plan) -1- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Participants and the Pension Committee of Zurn Industries, Inc.: We have audited the accompanying statements of net assets available for benefits of the Eljer Tax Reduction Investment Plan (the "Plan") as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits with fund information for the years then ended. These financial statements, and the schedules referred to below, are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the administrator, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Assets Held for Investment Purposes as of December 31, 1996, and Reportable Transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the changes in net assets available for benefits of each fund. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen LLP Dallas, Texas, September 26, 1997 -2- STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ELJER TAX REDUCTION INVESTMENT PLAN (Thousands) December 31 1996 1995 ASSETS Investments, at fair value: Fixed Income Fund $ 7,420 $ 7,249 Managed Balanced Fund 2,618 3,003 Managed Growth Fund 3,747 - United States Stock Fund 3,861 3,900 International Stock Fund 1,316 - Household International Stock Fund 2,581 1,885 Eljer Industries Common Stock Fund 11,317 5,009 32,860 21,046 Participants' loans 1,121 1,092 Contributions receivable: Employers' 686 178 Participants' 153 156 TOTAL ASSETS 34,820 22,472 PARTICIPANTS' REFUNDS 32 15 NET ASSETS AVAILABLE FOR BENEFITS $34,788 $22,457 The accompanying notes are an integral part of these financial statements. -3- STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION ELJER TAX REDUCTION INVESTMENT PLAN Year Ended December 31, 1996 (Thousands)
Fixed Managed Managed United Income Balanced Growth States International Fund Fund Fund Stock Fund Stock Fund ADDITIONS Investment income: Dividends and interest $ 445 $ 148 $ 270 $ 326 $ 21 Net appreciation (depreciation) in value of investments 238 (19) 353 82 445 386 251 679 103 Contributions: Participants' 644 372 312 574 136 Employers' 659 307 388 391 153 TOTAL ADDITIONS 1,748 1,065 951 1,644 392 BENEFITS PAID TO PARTICIPANTS (514) (140) (46) (384) (22) TRANSFERS (1,063) (1,310) 2,842 (1,299) 946 NET ADDITIONS (DEDUCTIONS) 171 (385) 3,747 (39) 1,316 NET ASSETS AVAILABLE FOR BENEFITS Beginning of year 7,249 3,003 3,900 End of year $ 7,420 $ 2,618 $ 3,747 $ 3,861 $ 1,316 The accompanying notes are an integral part of this financial statement. -4- /TABLE STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued ELJER TAX REDUCTION INVESTMENT PLAN Year Ended December 31, 1996 (Thousands)
Eljer Household Industries International Common Stock Fund Stock Fund Other Total ADDITIONS Investment income: Dividends and interest $ 42 $ 7 $ 1,259 Net appreciation in value of investments 940 6,132 7,726 982 6,139 8,985 Contributions: Participants' 265 $ (3) 2,300 Employers' 407 498 2,803 TOTAL ADDITIONS 982 6,811 495 14,088 BENEFITS PAID TO PARTICIPANTS (179) (442) (30) (1,757) TRANSFERS (107) (61) 52 - NET ADDITIONS 696 6,308 517 12,331 NET ASSETS AVAILABLE FOR BENEFITS Beginning of year 1,885 5,009 1,411 22,457 End of year $ 2,581 $11,317 $ 1,928 $34,788 The accompanying notes are an integral part of this financial statement. -5- /TABLE STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION ELJER TAX REDUCTION INVESTMENT PLAN Year Ended December 31, 1995 (Thousands)
Fixed Managed United Household Income Balanced States International Fund Fund Stock Fund Stock Fund ADDITIONS Investment income: Dividends and interest $ 472 $ 223 $ 180 $ 44 Net appreciation in value of investments 306 684 737 472 529 864 781 Contributions: Participants' 786 371 589 Employers' 158 102 138 TOTAL ADDITIONS 1,416 1,002 1,591 781 BENEFITS PAID TO PARTICIPANTS (881) (190) (245) (206) TRANSFERS (37) (46) (58) (63) NET ADDITIONS 498 766 1,288 512 NET ASSETS AVAILABLE FOR BENEFITS Beginning of year 6,751 2,237 2,612 1,373 End of year $ 7,249 $ 3,003 $ 3,900 $ 1,885 The accompanying notes are an integral part of this financial statement. -6- /TABLE STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued ELJER TAX REDUCTION INVESTMENT PLAN Year Ended December 31, 1995 (Thousands)
Eljer Industries Common Stock Fund Other Total ADDITIONS Investment income: Dividends and interest $ 8 $ 927 Net appreciation in value of investments 2,341 4,068 2,349 4,995 Contributions: Participants' 162 $ 6 1,914 Employers' 376 5 779 TOTAL ADDITIONS 2,887 11 7,688 BENEFITS PAID TO PARTICIPANTS (233) (104) (1,859) TRANSFERS (4) 208 - NET ADDITIONS 2,650 115 5,829 NET ASSETS AVAILABLE FOR BENEFITS Beginning of year 2,359 1,296 16,628 End of year $ 5,009 $ 1,411 $22,457 The accompanying notes are an integral part of this financial statement. -7- /TABLE ELJER TAX REDUCTION INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS December 31, 1996 and 1995 1. GENERAL DESCRIPTION OF THE PLAN The Eljer Tax Reduction Investment Plan (the "Plan"), which became effective April 1, 1989, is a defined contribution retirement plan for eligible employees of Eljer Industries, Inc. (the "Company") and its participating subsidiaries. Subject to certain eligibility requirements, participants may contribute on a pretax basis ("Tax Reduction Contributions") or after-tax basis ("Investment Plan Contributions") up to 15% of their compensation to the Plan through employee payroll deductions. The participants are fully vested in their contributions immediately. Each participant's contributions may, at the Company's discretion, be matched in whole or in part by Company contributions ("Employer Matching Contributions") at a rate determined by the Company. The amount of a participant's contribution eligible for matching may not exceed 6% of the participant's annual compensation. In addition, beginning January 1, 1996, the Company contributes amounts equal to 2% of each eligible participant's compensation ("Level One TRIP+") and 0% to 7% of compensation based on the participant's years of credited service ("Level Two TRIP+"). Employer Matching Contributions and Level Two TRIP+ contributions vest over four years of plan participation. Level One TRIP+ contributions become vested after five years of service. All company contributions become 100% vested upon eligibility for normal retirement, death, or full and permanent disability. Participants may obtain loans from the Plan up to the lesser of one-half of their individual vested balance or regulatory maximum. With certain exceptions, a participant's Investment Plan Contributions may be withdrawn at any time while Tax Reduction Contributions may not be withdrawn except for an immediate financial hardship, as defined in the Plan, termination of employment, or attainment of age 59-1/2. Employer contributions may be withdrawn after five years of plan participation. Withdrawals may be subject to federal income tax. Prior to April 14, 1989, the Company's subsidiaries were wholly-owned subsidiaries of Household International, Inc. On that date, Household distributed to its shareholders all of the outstanding shares of common stock of the Company. On April 1, 1989 in preparation for the distribution, the equity of the Plan for the participating employees of the Company, including investments in Household common stock, was transferred from the Household Manufacturing, Inc. Tax Reduction Investment Plan to the Plan adopted by the Company. The Plan's Household International Stock Fund is frozen and no contributions are permitted to be made to the fund. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. -8- ELJER TAX REDUCTION INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS December 31, 1996 and 1995 2. SIGNIFICANT ACCOUNTING POLICIES The accounts of the Plan are maintained on the accrual basis of accounting. Investments in common stock and mutual funds of registered investment companies are carried at fair market value determined on the basis of quoted market prices. Money market funds are carried at cost which approximates market. The average cost method is used in determining gains or losses on securities sold or distributed. Eljer Manufacturing, Inc., the Plan sponsor and a wholly-owned subsidiary of the Company, pays all administrative expenses of the Plan and is not reimbursed by the Plan. The format and classification of amounts in the 1995 financial statements have been changed to conform to the current presentation with no effect on the amount of total net assets available for benefits. 3. WITHDRAWALS AND FORFEITURES Benefits payable to withdrawing participants not included in the financial statements at December 31, 1996 and 1995 amounted to approximately $439,000 and $222,000, respectively. Forfeited contributions reduced the amount of employer contributions by approximately $26,000 and $8,000 in 1996 and 1995, respectively. 4. TAX STATUS OF THE PLAN The Plan operates as a qualified plan under Sections 401(a) and 401(k) of the Internal Revenue Code (the "Code"). Qualification of the Plan means that a participant will not be subject to federal income taxes on Tax Reduction Contributions and employer contributions, or on earnings or appreciation on investments held in the Plan, until such amounts either are withdrawn by or distributed to the participant, or are distributed to the participant's beneficiary in the event of the participant's death. The Plan has received a favorable determination letter, dated September 30, 1995, from the Internal Revenue Service that indicates that the Plan, and the related trust, meet the requirements of the Code for exemption from taxation under Sections 401(a) and 501(a), respectively, of the Code. -9- ELJER TAX REDUCTION INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS December 31, 1996 and 1995 5. PLAN TERMINATION According to the plan document, the Plan shall terminate upon the dissolution, merger, consolidation, or reorganization of the Employer, or the sale by the Employer of all or substantially all of its assets, unless the successor or purchaser continues the Plan. Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974. In the event of Plan termination, participants will become 100% vested in their accounts. 6. SIGNIFICANT INVESTMENTS The following investments represent 5% or more of the net assets available for benefits at December 31, 1996 and 1995: 1996 1995 (Thousands) Common stocks: Eljer Industries, Inc., $11,315 $ 5,007 Household International, Inc. 2,581 1,874 Mutual funds of registered investment companies: Davis New York Venture Fund 2,037 1,664 Putnam Voyager Fund 1,931 1,174 Pooled separate account: LaSalle Income Plus Fund 7,420 7,247 7. CONTINGENCIES United States Brass Corporation, an indirect wholly-owned subsidiary of the Company and an employer participating in the Plan, filed in 1974 a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code for the purpose of systematically resolving issues resulting from sales of polybutylene plumbing systems and related litigation. US Brass and certain of its affiliates have proposed a reorganization plan which they believe provides for payment, satisfaction, and discharge of all claims involving the polybutylene systems. Currently, US Brass operates as a debtor-in-possession under Section 108 of the Bankruptcy Code subject to the supervision and orders of the bankruptcy court which has approved the continuing funding of the Plan by US Brass. In the event the bankruptcy or litigation has a material adverse effect of any employer participating in the Plan, neither the assets of the Plan nor any participant's rights to such assets will be affected as the Plan is an entity separate and distinct from the employers. -10- ELJER TAX REDUCTION INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS December 31, 1996 and 1995 8. SUBSEQUENT EVENTS On January 22, 1997, all the Company's common stock, including shares held by the Plan, was purchased by a subsidiary of Zurn Industries, Inc. in connection with transactions in which the Company became a wholly-owned subsidiary of Zurn with provisions for the continuation of the Plan. Subsequently, the Pension Committee of Zurn succeeded the Eljer TRIP Administrative and Investment Committee as Plan administrator. -11- SCHEDULE I Page 1 of 2 ELJER TAX REDUCTION INVESTMENT PLAN ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1996 EIN: 36-3114796 PLAN NUMBER: 101 (a) (b) (c) (d) (e) Identity of Description of Current Party Involved Investment Cost Value (Thousands) * Eljer Industries, Inc. Common Stock, par $ 4,355 $11,315 value $1 478,935 shares Household Common Stock, par 353 2,581 International, Inc. value $1 27,858 shares LaSalle National LaSalle Income 7,420 7,420 Trust, N.A. Plus Fund 7,420,571 shares Miller, Anderson & MAS Funds Fixed Income 844 852 Sherrerd Portfolio Mutual Fund 76,429 shares The Vanguard Group Vanguard Fixed Income 1,304 1,304 of Investment Fund, 121,783 shares Companies Davis Selected Davis New York 1,837 2,037 Advisors, L.P. Venture Fund 120,676 shares GAM Funds, Inc. GAM International Fund 1,036 1,187 51,280 shares T. Rowe Price T. Rowe Price 699 748 International International Funds, Inc. Stock Fund 54,168 shares The Vanguard Group Vanguard Windsor II 291 329 of Investment Fund, 13,822 shares Companies * - A party known to be a party-in-interest. -12- SCHEDULE I Page 2 of 2 ELJER TAX REDUCTION INVESTMENT PLAN ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1996 EIN: 36-3114796 PLAN NUMBER: 101 (a) (b) (c) (d) (e) Identity of Description of Current Party Involved Investment Cost Value (Thousands) First of America Parkstone Small Investment Capitalization Fund 1,430 1,351 Corporation 46,417 shares Pimco Advisors Blairlogie Emerging 254 243 Institutional Markets Fund Advisors 20,326 shares Putnam Voyager Fund Putnam Voyager Fund 1,761 1,931 119,839 shares PIC Investment Trust Pinnacle Growth Fund 1,513 1,562 106,997 shares * Loans to Loans to Participants - 1,121 Participants Interest rates 9.5% to 10% $23,097 $33,981 * - A party known to be a party-in-interest. -13- SCHEDULE II Page 1 of 3 ELJER TAX REDUCTION INVESTMENT PLAN ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996 EIN: 36-3114796 PLAN NUMBER: 101
(a) (b) (c) (d) (g) (j) Net Identity of Description of Purchase Selling Cost of Gain Party Involved Asset Price Price Asset (Loss) (Thousands) INDIVIDUAL TRANSACTIONS: Davis Selected Davis New York Venture Advisors, LLP Fund $1,161 $ 1,028 $133 Nationsbank Trust Nations Prime Fund 1 Purchase $ 1,161 1,161 1 Sale 1,160 1,158 2 SERIES OF TRANSACTIONS: Davis Selected Davis New York Venture Advisors, LLP Fund 43 Purchases 1,691 1,691 9 Sales 1,552 1,387 165 Eljer Industries, Common Stock Inc. 30 Purchases 842 842 46 Sales 449 378 71 Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of these transactions. Category (h) Current Value is the same as Purchase Price or Selling Price. This supplemental schedule lists individual and series of transactions in excess of 5% of the fair market value of the Plan assets at the beginning of the year. -14- /TABLE SCHEDULE II Page 2 of 3 ELJER TAX REDUCTION INVESTMENT PLAN ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996 EIN: 36-3114796 PLAN NUMBER: 101
(a) (b) (c) (d) (g) (j) Net Identity of Description of Purchase Selling Cost of Gain Party Involved Asset Price Price Asset (Loss) (Thousands) SERIES OF TRANSACTIONS: Nationsbank Trust Nations Prime Fund 307 Purchases $10,003 $10,003 193 Sales $9,522 9,522 PIC Investment Pinnacle Growth Fund Trust 40 Purchases 1,329 1,329 16 Sales 927 777 $150 Parkstone Small Capitalization Fund 22 Purchases 1,472 1,472 1 Sale 290 271 19 Putnam Voyager Putnam Voyager Fund Fund, Inc. 39 Purchases 1,218 1,218 3 Sales 573 453 120 Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of these transactions. Category (h) Current Value is the same as Purchase Price or Selling Price. This supplemental schedule lists individual and series of transactions in excess of 5% of the fair market value of the Plan assets at the beginning of the year. -15- /TABLE SCHEDULE II Page 3 of 3 ELJER TAX REDUCTION INVESTMENT PLAN ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996 EIN: 36-3114796 PLAN NUMBER: 101
(a) (b) (c) (d) (g) (j) Net Identity of Description of Purchase Selling Cost of Gain Party Involved Asset Price Price Asset (Loss) (Thousands) SERIES OF TRANSACTIONS: T. Rowe Price International Stock International Fund Funds, Inc. 38 Purchases $ 593 $ 593 17 Sales $ 970 871 $ 99 Vanguard Group Fixed Income Fund of Investments 33 Purchases 1,619 1,619 Companies 19 Sales 1,312 1,324 (12) LaSalle National LaSalle Income Trust, N.A. Plus Fund 33 Purchases 1,907 1,907 34 Sales 1,712 1,712 Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of these transactions. Category (h) Current Value is the same as Purchase Price or Selling Price. This supplemental schedule lists individual and series of transactions in excess of 5% of the fair market value of the Plan assets at the beginning of the year. -16- /TABLE SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Pension Committee of Zurn Industries, Inc. has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized ELJER TAX REDUCTION INVESTMENT PLAN September 29, 1997 /s/ James A. Zurn James A. Zurn, Chairman Pension Committee of Zurn Industries, Inc. -17- -----END PRIVACY-ENHANCED MESSAGE-----