SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1994
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ____
Commission File Number 1-5858
UNIVAR CORPORATION
A Delaware I.R.S. Employer
Corporation No. 91-0816142
6100 Carillon Point
Kirkland, Washington 98033
Telephone No. (206) 889-3400
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of each class on Which Registered
Common Stock, $.33-1/3 Par Value New York Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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. [ X ]
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 non-affiliates of the
registrant at May 16, 1994 was approximately $100,890,000. As of such date,
21,648,273 shares of the registrant's common stock, $0.33-1/3 par value, which
is the registrant's only class of common stock, were o
Documents Incorporated by Reference
The Corporation's definitive Proxy Statement to be filed pursuant to Regulation
14A under the Securities Exchange Act of 1934 (Item 10 - Directors Only, and
Items 11, 12 and 13 of Part III)
PART I
ITEM 1. BUSINESS
The Company
Univar Corporation (Univar, the Registrant, or the Corporation) was
incorporated in September, 1966 to become the successor corporation in the
merger of Van Waters & Rogers, Inc. and United Pacific Corporation, both long
established companies then doing business in the western United States and
western Canada. For the fiscal year ended February 28, 1994, Univar
Corporation and its three wholly or majority owned subsidiaries were involved
in the distribution of industrial, agricultural and pest control chemicals and
related products. Van Waters & Rogers Inc. conducts its operations throughout
the United States. Van Waters & Rogers Ltd. conducts its operations
throughout Canada. Univar Europe N.V. (Univar Europe) conducts its operations
in the United Kingdom, Scandinavia, Switzerland and northern Italy.
Distribution is the process by which manufacturers, both large and small, get
their products to many end users in the most economical way. As a distributor
of industrial and agricultural chemicals and related products, the
Corporation's role is to purchase chemicals from manufacturers in truck,
railcar, or tankcar quantities and sell them in smaller quantities to various
customers. Univar adds value to its products through superior service,
selection, and delivery reliability.
The Corporation provides a hazardous waste management service in the U.S.
called ChemCare(Registered Trademark). ChemCare is a service that allows the
Corporation to maximize the use of existing equipment, facilities and chemical
handling knowledge by assisting customers in the responsible collection and
disposition of their chemical waste streams. It is in essence a reverse
distribution process, developed in response to customer demand for help in
coping with increasingly complex environmental regulations at the Federal,
state and local levels.
The Corporation does not, under ChemCare or any other program, actually
dispose of chemical waste streams. The Corporation has contracted with
Environmental Protection Agency (EPA) permitted hazardous waste disposal sites
for that disposal, through incineration, recycling or other means. ChemCare
is a service providing its customers with logistics management, temporary
waste storage, and access to various treatment and disposal technologies.
Financial Information About Industry Segments
The Corporation has operated in only one market segment, chemical
distribution, through its wholly owned subsidiaries, Van Waters & Rogers Inc.
in the United States, Van Waters & Rogers Ltd. in Canada, and its majority
owned subsidiary Univar Europe N.V., in Europe, which will be 100% owned by
the end of fiscal 1995. See the discussion of subsequent events in Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
Operations in Canada and Europe for each of the last three years are reported
in the Univar Corporation financial statements under the caption of Note 10.
Such Industry Segment Information is incorporated herein by reference.
Raw Materials
Numerous sources of supply generally exist for nearly all raw materials
essential to the business.
Patents, Trademarks and Tradenames
Univar and its subsidiaries own certain trademarks, servicemarks, and
tradenames which are subject to renewal at various dates beginning in 1995
through 2009. These marks and names are important in the Corporation's
current operations but not indispensable.
Seasonal Business
No material portion of the continuing operations of the Corporation or its
subsidiaries is regarded as highly seasonal.
Principal Customers
No portion of the continuing operations of the Corporation is dependent upon a
single customer or a few customers, the loss of any one or more of whom would
have a material adverse effect on the Corporation.
Competitive Conditions
In the distribution of chemicals and related products, Van Waters & Rogers
Inc., Van Waters & Rogers Ltd., and Univar Europe N.V. compete with local,
regional and national distributors, as well as with manufacturers who sell
direct. Although Univar is one of the largest industrial chemical distributors
in North America and has expanded its operations to Western Europe, the
Corporation faces significant competition from distributors who have a larger
market share within local and regional markets as well as from other national
distributors.
The Corporation competes on a variety of factors such as price, product
quality, customer service, selection of available products, reliability,
technical support, and delivery.
Research and Development
As a distributor, Univar and its subsidiaries do not engage in research
activities relating to the development of new products or the improvement of
existing products.
Environmental Matters
See "The Environment" section of Management's Discussion and Analysis in Item
7 of this filing and also Item 3 - Legal Proceedings below.
Employees
As of February 28, 1994, Univar and its subsidiaries had 3,250 full-time
employees, of which 495 employees are members of various labor unions. At
year end, the Corporation was in negotiations with one labor union in
connection with renewal of a labor contract. The Corporation generally enjoys
good relations with its employees.
Backlog
The Corporation records revenues as orders are shipped. Due to the nature of
the Corporation's business, no record of the backlog of orders is maintained.
EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Business Experience Past Five Years Position Held
James H. Wiborg(1) 69 Chairman of Registrant 1990 -
Chairman Chairman and Chief Strategist
Director of Registrant 1986-1990
James W. Bernard 56 President and Chief Executive Officer
President and Chief of Registrant 1986 -
Executive Officer
Director
James P. Alampi 47 Senior Vice President of Registrant 1991 -
Senior Vice President President, Van Waters & Rogers Inc. 1992-
President, Van Waters & (Distribution of chemicals and
Rogers Inc. related products)
Vice President of Administration,
VWR Corporation 1988 - 1989
(Scientific equipment and
supply distribution)
James L. Fletcher 50 Senior Vice President of Registrant 1989 -
Senior Vice President
Paul Hough 55 Senior Vice President of Registrant 1992 -
Senior Vice President Vice President of Registrant 1991 - 1992
President, Van Waters President, Van Waters & Rogers Ltd 1991 -
& Rogers Ltd. V. President, Van Waters & Rogers Ltd. 1988 - 1991
(Distribution of chemicals and
related products)
William A. Butler 43 Vice President, General Counsel,
Vice President, General and Corporate Secretary of Registrant 1990 -
Counsel and Corporate Partner, Preston Thorgrimson Shidler
Secretary Gates & Ellis (attorneys at law) 1983 - 1990
Gary E. Pruitt 44 Vice President-Finance, Treasurer &
Vice President-Finance, Assistant Corporate Secretary 1992 -
Treasurer and Assistant V. President, Treasurer and Assistant
Corporate Secretary Corporate Secretary of Registrant 1989 - 1992
Treasurer of Registrant 1987 - 1989
(1) Family Relationships: Robert S. Rogers and N. Stewart Rogers,
directors of the Registrant, are brothers-in-law of James H. Wiborg.
No arrangement or understanding exists between any officer and any other
person pursuant to which he was elected as an officer.
ITEM 2. PROPERTIES
The Corporation operates from 152 facilities; 105 in the United States, 20 in
Canada, and 27 in Europe, with a total of approximately 4,928,000 square feet
of office and warehouse space, (3,659,000 in the U.S., 684,000 in Canada, and
585,000 in Europe) of which 3,622,000 square feet is owned (84 facilities) and
the remainder leased.
Listed below are the principal plants and physical properties of the
Corporation and its subsidiaries used in the wholesale distribution of
industrial, agricultural, and pest control chemicals. The Corporation
believes its facilities are in good condition and adequate for its current
operations.
VAN WATERS & ROGERS, INC.
Principal Facilities
Bldg. Land Nature of Ownership
Area Area Expiration
Location (Sq. Ft.)(Acres) Owned Leased Date of Lease
Atlanta, GA 96,000 8.6 X
Chicago, IL 55,000 2.8 X
Cleveland, OH 47,000 5.6 X
Dallas, TX 146,000 9.8 X
Denver, CO 79,000 4.9 X
Houston, TX 85,000 20.6 X
Indianapolis, IN 58,000 8.8 X
Jacksonville, FL 51,000 1.8 X
Kent, WA 132,000 11.7 X
Kirkland, WA 126,000 X August 2001
Lafayette, LA 60,000 5.1 X
(Carencro)
Los Angeles, CA 156,000 9.4 X
(Bonnie Beach)
Los Angeles, CA 140,000 7.0 X
(Jillson Street)
Omaha, NE 67,000 10.3 X
Phoenix, AZ 66,000 10.0 X
Portland, OR 95,000 9.5 X
St. Paul, MN 88,000 9.0 X September 2002
Salem, MA 188,000 10.6 X December 2000
Salt Lake City, UT 76,000 4.6 X
San Jose, CA 155,000 14.6 X
Other Van Waters & Rogers Inc. properties (owned or leased), which consist
mainly of industrial warehouses and related office space:
Albany, NY
Albuquerque, NM
Altoona, PA
Amarillo, TX
Anchorage, AK
Augusta, GA
Beaumont, TX
Birmingham, AL
Bloomington, IL
Buffalo, NY
Burlington, IA
Carlin, NV
Casper, WY
Charlotte, NC
Chattanooga, TN
Chicago Hts., IL
Chippewa Falls, WI
Cincinnati, OH
Cincinnati (Evendale), OH
Columbus, OH
Corpus Christi, TX
Delray Beach, FL
Detroit, MI
El Paso, TX
Eugene, OR
Fort Myers, FL
Fort Wayne, IN
Fresno, CA
Geismar, LA
Glendale (Phoenix), AZ
Grand Rapids, MI
Greensboro, NC
Greenville, NC
Harlingen, TX
Harrisburg, PA
Helena, MT
Honolulu, HI
Kansas City, MO
Kingsport, TN
Knoxville, TN
Las Vegas, NV
Lewiston, ME
Little Rock, AR
Longview, TX
Louisville, KY
Memphis, TN
Miami, FL
Milwaukee, WI
Mobile, AL
Nampa, ID
Nashville, TN
New Orleans, LA
New Rochelle, NY
Oak Brook, IL
Odessa, TX
Oklahoma City, OK
Orlando, FL
Oxnard, CA
Pasco, WA
Philadelphia, PA
Pittsburgh, PA
Pocatello, ID
Pompano Beach, FL
Reno, NV
Richland, MS
Richmond, VA
Riverside, CA
Rock Springs, WY
Sacramento, CA
San Antonio, TX
San Diego, CA
San Juan, Puerto Rico
Sioux City, IA
South Bend, IN
Spartanburg, SC
Spokane, WA
Springfield, MO
St. Louis, MO
Tampa, FL
Toledo, OH
Tucson, AZ
Tulsa, OK
Wichita (Mead), KS
Wichita (Mosley), KS
Woodbridge, NJ
VAN WATERS & ROGERS LTD.
Principal Facilities
Location Bldg. Land
(all properties are Area Area Expiration
located in Canada) (Sq.Ft.) (Acres) Owned Leased Date of Lease
Abbotsford, Br. Columbia 29,000 4.5 X
Calgary, Alberta 53,000 4.6 X
Downsview (Toronto),Ont 90,000 8.0 X
Edmonton, Alberta 59,000 5.6 X
Lachine (Montreal),Que 52,000 3.3 X
London, Ontario 45,000 X October 1998
Richmond (Vancouver),
British Columbia 82,000 8.7 X
Valleyfield, Quebec 36,000 23.9 X
Weston (Toronto), Ont 105,000 11.3 X
Winnipeg, Manitoba 35,000 4.7 X
Other Van Waters & Rogers Ltd. properties in Canada (owned or leased) which
consist mainly of industrial warehouses and related office space:
Brandon, Manitoba
Dartmouth, Nova Scotia
Fort St. John, British Columbia
Grand Prairie, Alberta
Kelowna, British Columbia
Lethbridge, Alberta
Quebec City, Quebec
Red Deer, Alberta
Regina, Saskatchewan
Saskatoon, Saskatchewan
UNIVAR EUROPE N.V.
Principal Facilities
Bldg. Land
Area Area Expiration
Location (Sq.Ft.) (Acres) Owned Leased Date of Lease
Birmensdorf, Switzerland 89,000 3.2 x
Copenhagen (Provestenen),
Denmark 8,000 x January 2004
Croydon, United Kingdom 19,000 x June 1996
Empoli, Italy 6,500 x January 1997
Gothenberg, Sweden 150,000 x September 2003
Grimsby, United Kingdom 78,000 x April 2068
Kista, Sweden 7,000 x December 1993
Malmo, Sweden 39,000 x December 2018
Manchester, United Kingdom 11,000 x April 2013
Milan, Italy 5,000 x December 1995
Milton Keynes, United Kingdom 45,000 3.3 x
Scunthorpe, United Kingdom 12,000 x March 2076
Stockholm, Sweden 23,000 x December 1999
Queenborough, United Kingdom 9,000 x May 1994
Venizia Mestre, Italy 11,000 x December 1994
Zurich, Switzerland 28,000 x March 1996
Other Univar Europe properties (owned or leased) which consist mainly of
industrial warehouses and related office space:
Asker, Norway
Brighton, United Kingdom
Christchurch, United Kingdom
Exeter, United Kingdom
Fredrikstad, Norway
Gateshead, United Kingdom
Glasgow, United Kingdom
Heggedal, Norway
Kerava, Finland
Norrkiping (Fleminggatan), Sweden
Tamworth, United Kingdom
ITEM 3. LEGAL PROCEEDINGS
Because of the nature of its business, the Corporation is involved in
numerous contractual, product liability, and public liability cases and
claims. The liabilities for injuries to persons or property are
frequently covered by liability insurance, and the deductible and self-
insured portions of these liabilities, where applicable, have been
accrued in the financial statements set forth at Item 8 below. See
also "The Environment" section of Management's Discussion and Analysis
in Item 7 of this filing.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None during the fourth quarter of the fiscal year covered by this
report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market Information
Univar Corporation common stock is listed for trading on the New York and
Pacific Stock Exchanges under the trading symbol UVX. The high and low
sales prices for the Corporation's common stock for each quarter during
the last two years as reported on the New York Stock Exchange follows:
1994 1993
High Low High Low
First Quarter $11.38 $9.50 $13.38 $10.63
Second Quarter $13.38 10.88 12.88 11.38
Third Quarter $14.25 10.00 12.88 10.00
Fourth Quarter $12.88 10.88 13.00 10.63
Security Holders
As of February 28, 1994, the Corporation estimated there were
approximately 6,300 beneficial shareholders.
Dividends
Quarterly cash dividends of $0.075 per share have been declared during
each of the last eight quarters.
Debentures
Effective May 1, 1993, the Corporation redeemed all of its outstanding 9-
3/4% Subordinated Sinking Fund Debentures. Approximately $1.8 million in
principal amount was outstanding on the redemption date.
ITEM 6. SELECTED FINANCIAL DATA
For the Fiscal Years Ended February 28/29
(Thousands of dollars, except share data)
1994 1993 1992 1991 1990
Sales $1,802,464 $1,801,023 $1,558,496 $1,396,229 $1,378,864
Cost of sales 1,532,931 1,536,817 1,334,123 1,185,576 1,173,134
--------- --------- --------- --------- ----------
Gross margin 269,533 264,206 224,373 210,653 205,730
Operating expenses 242,388 243,008 212,783 168,848 158,662
Re-engineering
and restructuring
charges 4,507 --- 9,870 --- ---
-------- ------- -------- -------- --------
Income from operations 22,638 21,198 1,720 41,805 47,068
Interest expense -12,921 -15,248 -11,358 -10,832 -13,109
Other - net 525 2,478 1,835 2,672 2,073
-------- -------- -------- -------- --------
Income (loss) before
provision for (benefit
of) taxes on income and
minority interest 10,242 8,428 -7,803 33,645 36,032
Provision for
(benefit of) taxes
on income (loss) 4,403 2,811 -1,785 13,997 14,487
--------- --------- --------- -------- -------
Income (loss) before
minority interest 5,839 5,617 -6,018 19,648 21,545
Minority interest's
share in income (loss) 379 482 -392 --- ---
--------- -------- -------- -------- --------
Net income (loss) $5,460 $5,135 $-5,626 $19,648 $21,545
========= ======== ======== ======== ========
Weighted average common
shares outstanding 19,703 19,698 19,247 17,796 17,728
Net income (loss) per share $0.28 $0.26 $(0.29) $1.10 $1.22
Cash dividends declared
per share 0.30 0.30 0.30 0.30 0.30
Total assets 652,694 692,351 716,488 532,500 477,408
Total debt 177,685 208,300 216,005 151,659 130,223
Long-term debt 147,058 169,922 202,894 135,531 116,199
Working capital 83,545 93,858 114,724 89,140 71,940
Shareholders' equity 157,406 163,290 168,407 148,337 131,880
Book value per share 8.01 8.32 8.59 8.42 7.53
Return on beginning equity 3.3% 3.0% (3.8)% 14.9% 18.8%
(1) Results for fiscal 1992 were affected by acquisitions in Europe,
Canada, and the United States. See Note 7 to financial statements
incorporated herein.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Analysis of Operations
The Corporation modestly improved its operating results and reported
higher net income for the year, despite a continuing weak economy and the
impact of substantial costs of a re-engineering program which is underway
in the Corporation's U.S. operations. Net income totaled $5.5 million
for fiscal 1994, compared to net income of $5.1 million for fiscal 1993
and a net loss of $5.6 million for fiscal 1992. Excluding the costs of
the re-engineering, net income would have totaled $8.3 million for fiscal
1994.
FISCAL 1994 COMPARED WITH FISCAL 1993
Sales for 1994 totaling $1.8 billion are comparable to 1993, but are not
reflective of the real growth experienced in each of the Corporation's
continuing markets. In the United States, sales grew by 1.5% despite the
Corporation's decision at the end of the second quarter to divest its
textile chemical business and despite the impact of legislation that has
resulted in a precipitous decline in the sales of chlorinated
fluorocarbons and chlorinated solvents. Textile chemicals and chemicals
impacted by legislative action accounted for 5.5% of total sales during
1994, down from 8.6% in 1993. Excluding these products, sales in the
United States grew by 5.0%.
Foreign markets served by the Corporation continued to experience sales
growth. When measured in local currencies, sales are up over 7% in
Europe and more than 12% in Canada. However, due to unfavorable currency
exchange rates, foreign sales expressed in U.S. dollars do not reflect
this real growth. The Canadian dollar dropped approximately 6% against
the U.S. dollar and the combination of European currencies in the markets
served by Univar dropped approximately 19% against the U.S. dollar.
The Corporation's sales were affected by inflation rates estimated at
0.9% and 2.3%, for 1994 and 1993, respectively. Higher inflation in
fiscal 1993 was caused in part by increasing prices for products such as
chlorinated fluorocarbons and chlorinated solvents. The proportion of
sales attributable to these products has declined by approximately 30%
compared with fiscal 1993 and is expected to continue to decrease during
fiscal 1995 as a result of the legislative actions described previously.
Gross margin dollars for the current year increased by $5.3 million
compared with the prior year. Gross margin percentage for 1994 was
15.0%, up from 14.7% for 1993. The Corporation's business mix is not
significantly changed compared with the prior year. Through-warehouse
and direct sales accounted for approximately 76.9% and 21.3%,
respectively, of total sales for the current year. Other sales,
consisting primarily of ChemCare services accounted for the remaining
1.8% of sales. While the mix did not change, margin percentage on both
through-warehouse and direct sales increased compared with the prior
year. Margin percentage on ChemCare services was unchanged from the
prior year.
Consolidated operating expenses, including re-engineering costs, as a
percentage of sales were 13.7% for 1994 compared with 13.5% for 1993. In
the United States, operating expenses, exclusive of re-engineering
charges, as a percentage of sales, increased to 14.1% for 1994 compared
with 13.8% for 1993. Increases in wages, depreciation, and
environmental costs were partially offset by savings realized from
management of health care costs and lease costs, and by continuing
results from expense reduction programs. Canadian operating expenses
dropped to 9.8% of sales for 1994 compared with 10.5% of sales for 1993.
European operating expenses decreased to 14.6% of sales compared with
15.1% in the prior year. Reductions in operating expenses as a
percentage of sales in both Canada and Europe are due primarily to
increased sales volumes which did not require related increased fixed
costs and realized benefits of continuing cost reduction programs.
During the third quarter the Corporation initiated an intensive re-
engineering program which, when completed, should result in significant
fundamental changes in business practices in our U.S. operations. The
Corporation has retained a consulting firm which has broad experience
assisting both chemical manufacturing and wholesale distribution clients
to identify and implement the type of changes necessary in order for the
Corporation to achieve a significant competitive advantage. Re-
engineering costs to date total $4.5 million, consisting primarily of
consulting fees and travel costs incurred in the study of current
operations and preliminary designs for change. The Corporation expects
this effort to continue throughout fiscal 1995. Consulting fees and
related costs are expected to total approximately $12 million for fiscal
1995.
Interest expense decreased to $12.9 million for 1994 compared with $15.2
million for 1993. The decrease is due to a combination of reduced
borrowings and reduced effective interest rates. The overall average
interest rate was 7.7% for 1994 compared with 8.1% for 1993.
During the fourth quarter of fiscal 1993, the Corporation entered into
certain interest rate swap agreements to manage its exposure to interest
rate fluctuations. At February 28, 1994, the aggregate notional value of
these agreements totaled $50 million, with a weighted average remaining
life of approximately 7 years. These agreements effectively convert a
portion of the Corporation's floating rate debt to fixed rate debt with
rates ranging from 6.77% to 7.25%. (See Note 3 to the financial
statements.)
Income tax expense was $4.4 million in fiscal 1994 compared with $2.8
million in fiscal 1993. The Corporation's effective income tax rate was
43.0 % in fiscal 1994 compared with 33.4% for 1993. The increase in the
effective rate for fiscal 1994 was due to a change in the mix of domestic
and foreign income coupled with higher Canadian tax rates compared with
U.S. rates, and losses in certain European countries for which no benefit
was recognized. During fiscal 1994, the portion of income before taxes
provided by Canadian operations increased to 85%, up from 70% for fiscal
1993.
FISCAL 1993 COMPARED WITH FISCAL 1992
Sales for fiscal 1993 increased by 15.6% to $1.8 billion compared with
$1.6 billion for 1992. Acquisitions made during fiscal 1992 accounted for
substantially all of the increase. Sales were affected by inflation rates
estimated at 2.3% for fiscal 1993 compared with an effect of
approximately 1.0% for fiscal 1992 caused in part by increasing prices
for products such as chlorinated fluorocarbons and chlorinated solvents.
Gross margin percentage for fiscal 1993 increased to 14.7% compared with
14.4% for fiscal 1992. The Corporation's business mix for fiscal 1993
changed modestly compared with fiscal 1992. Through-warehouse and direct
sales accounted for approximately 76.1% and 21.9%, respectively, of total
sales for fiscal 1993. Other sales, consisting primarily of ChemCare
services, accounted for the remaining 2.0% of sales. Margins on each
type of business were also up for fiscal 1993 compared with fiscal 1992.
Operating expenses as a percentage of sales were 13.5% for fiscal 1993
compared with 13.7% for 1992. In the United States, operating expenses,
as a percentage of sales, decreased to 13.8% for 1993 compared with 14.1%
for 1992. Canadian operating expenses decreased to 10.5% of sales for
1993 compared with 10.7% of sales for 1992. The major components of the
change include reduced employee wage and benefit costs as a result of
implementing an early retirement program during the last half of fiscal
1992. European operating expenses increased to 15.1% of sales compared
with 14.6% in fiscal 1992, due primarily to reduced sales resulting from
the impact of significant recessionary pressures and increased costs of
computer system enhancements.
Interest expense for fiscal 1993 increased to $15.2 million compared with
$11.4 million for fiscal 1992. The increase is due to a combination of:
(1) the inclusion of a full year of European operations and related
acquisition financing during 1993 compared with only six months during
1992; (2) increased effective interest rates in Europe; and (3) reduction
in the amount of interest capitalized, totaling $1.0 million for fiscal
1993 compared to $4.0 million for fiscal 1992, primarily as a result of
completion of the UVX2000(Registered Trademark) computer system. The
effect of these changes was partially offset by a reduction in average
interest rates in the United States. The overall average interest rate
was 8.1% for fiscal 1993 compared with 9.2% for fiscal 1992.
SUBSEQUENT EVENTS
EXERCISE OF DOW PUT AGREEMENT
On June 24, 1991, the Corporation and The Dow Chemical Company ("Dow")
entered into an Agreement of Purchase and Sale of Stock (the "Dow
Purchase Agreement"). In accordance with the Dow Purchase Agreement,
Univar sold 1,900,000 shares of its common stock to Dow at a price of
$15.84 per share. In addition, Univar reserved the right to put to Dow
between approximately 2,500,000 and 2,900,000 additional shares of common
stock at a price that escalated over time, but which reached a maximum
price of $18.74 per share. The number of additional shares that could be
sold depended on whether Pakhoed Investeringen B.V. ("Pakhoed") exercised
its right to acquire shares from Univar at the same price as they were
sold to Dow in order for Pakhoed to maintain its percentage share
ownership in Univar. Pakhoed elected not to exercise its right to
acquire additional shares. Therefore, based on the manner in which the
calculation of the number of additional shares to be sold was made, the
actual maximum number of shares that Univar could put to Dow was
2,509,371. In lieu of the unilateral right of Univar to put 2,509,371
shares of common stock to Dow, on May 13, 1994, Univar and Dow executed
an Amended and Restated Agreement of Purchase and Sale of Stock (the
"Amended Agreement").
Under the terms of the Amended Agreement, Dow purchased from Univar
2,000,000 shares of common stock at a price of $18.74 per share (a total
purchase price of $37,480,000). Dow now holds 3,900,000 shares of common
stock representing 18.02% of the issued and outstanding shares of Univar.
In addition, Dow and Univar have agreed that, at any time within the
three year period ending May 12, 1997, Univar can put to Dow, or Dow can
call, up to 101,874 shares of Series A Convertible Preferred Stock. The
price per share will be $93.70. Each share of Series A Convertible
Preferred Stock is convertible, by either Dow or Univar, into five shares
of common stock. In the event of a call or put, either all or half the
101,874 shares must be called by Dow or put by Univar. With respect to
the conversion of the Series A Convertible Preferred Stock into Univar
common stock, Univar has agreed that it will not convert the preferred
shares if, following the conversion, Dow would own in excess of 19.9% of
the issued and outstanding common stock of the Corporation. Dow has
agreed that it will pay to Univar $350,000 per year for each of the three
years ending May 12, 1997, in the event Univar does not elect to put the
Series A Convertible Preferred Stock to Dow, or in the event Dow does not
call the Series A Convertible Preferred Stock.
ACQUISITION OF UNIVAR EUROPE
At the time of the organization of Univar Europe in 1991, Univar and
Pakhoed entered into a Shareholder Agreement which gave Pakhoed a
unilateral right to sell its 49% interest in Univar Europe to Univar
Corporation. On May 18, 1994, Pakhoed gave notice to Univar that Pakhoed
had elected to require Univar to purchase Pakhoed's interest in Univar
Europe. Under the terms of the Shareholder Agreement, Univar may
designate the date on which it will purchase Pakhoed's interest, so long
as the actual date of purchase is not later than February 18, 1995. The
date has not been set by Univar. Because most of the purchase price for
Pakhoed's interest will be paid in various European currencies whose
exchange rates fluctuate, the actual purchase price for Pakhoed's
interest in Univar Europe cannot be determined until the date of purchase
occurs. However, the anticipated purchase price is approximately $25
million.
RECENT ACCOUNTING PRONOUNCEMENTS
Effective March 1, 1993, the Corporation adopted FASB Statement No. l06,
"Employer's Accounting for Postretirement Benefits Other Than Pensions,"
and FASB Statement No. 109 "Accounting for Income Taxes." Financial
statements for prior years were not restated.
FASB Statement No. 106 requires employers to recognize the cost of
certain health care and life insurance benefits provided to retirees and
their dependents as a liability during the employees' active years of
service. The Corporation elected to amortize the transition liability
over twenty years, resulting in a net increase for the year in reported
costs of retiree health and related costs of $0.6 million.
FASB Statement No 109 changes the method of accounting for income taxes.
The favorable cumulative effect of implementation of this statement
totaled $0.4 million which represents the impact of adjusting deferred
tax balances to reflect current tax rates. Based on the insignificant
amount of the cumulative effect, it was included in the current year's
provision for taxes on income.
Beginning in the first quarter of fiscal 1995, the Corporation will adopt
FASB Statement No. 112, "Employers' Accounting for Postemployment
Benefits." Postemployment benefits are all types of benefits, other than
retirement benefits, provided to former or inactive employees, their
beneficiaries and covered dependents. These benefits include, but are
not limited to, salary continuation, supplemental unemployment benefits,
severance benefits, disability related benefits (including workers'
compensation), job training and counseling, and continuation of benefits
such as health care benefits and life insurance coverage. Under this
statement, the cost of postemployment benefits will be recognized on an
accrual basis. The Corporation does not expect the adoption of this
statement to significantly impact the Corporation's results of
operations.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows provided from operations totaled $35.4 million for the current
year, compared with $39.9 million for fiscal 1993 and $53.3 million for
fiscal 1992. Cash provided by operations was used to finance the
Corporation's capital expenditures, pay dividends, and reduce debt.
The Corporation has domestic and foreign short-term credit lines totaling
$85.6 million, of which $62.3 million was available at fiscal year-end
1994. The Corporation and its domestic and Canadian subsidiaries are
parties to a medium-term revolving credit agreement with a group of banks
which provide up to $210 million in available borrowings, of which $115
million was available at February 28, 1994. Total short, medium and long-
term borrowings at fiscal year-end 1994 were $177.7 million, compared
with $208.3 million at the end of fiscal 1993. (See Notes 2 and 3 to
the financial statements.) The ratio of interest bearing debt (including
non-interest bearing subordinated debt) to equity, which we have targeted
at 1:1 historically, was 1.13:1 at the end of the current year, down
from 1.28:1 at the end of the prior year. The increase over our target
is due mainly to the subordinated debt owed to the minority shareholder
by Univar Europe of approximately $20.1 million. Subsequent to year
end, as described in a preceding section, Univar Corporation sold 2
million shares of stock at a price of $18.74 per share for a total
purchase price of $37.5 million. Additionally, the Corporation announced
it will acquire the minority shareholder's interest in Univar Europe. As
a result of these transactions, the Corporation expects its ratio of
interest bearing debt to equity to approximate its historical target.
The Corporation believes its internally generated cash together with its
access to available worldwide bank lines will be adequate to cover
anticipated liquidity requirements.
Working capital, excluding cash and cash equivalents and short-term
borrowings, totaled $98.6 million at the end of fiscal 1994, compared
with $102.7 million and $110.5 million at the end of fiscal 1993 and
1992, respectively. The decrease is due primarily to continuing emphasis
on inventory management programs.
At fiscal year-end 1994, the ratio of current assets to current
liabilities was 1.28:1 compared to 1.31:1 at fiscal year-end 1993 and
1.40:1 at fiscal year-end 1992. The change for the current year was due
primarily to utilization of available cash to reduce debt and to
reduction of inventories.
DIVIDENDS AND RETURN ON EQUITY
Cash dividends declared and paid during the year totaled $0.30 per share,
unchanged from the two prior years. Return on beginning equity was 3.3%
for the current year compared with a return of 3.0% for the fiscal year
ended 1993 and a negative return of 3.8% for fiscal 1992.
BUSINESS ACQUISITIONS AND DIVESTITURES
During fiscal 1994, the Corporation completed small acquisitions in
Canada and the U.S., which together are expected to add approximately $28
million in sales volume. The aggregate purchase price was $4.4 million,
consisting of inventories and non-compete covenants.
During fiscal 1994, in a series of transactions, the Corporation sold its
textile chemical distribution business. This business contributed
approximately $21 million of sales for fiscal 1994 and $37 million in
sales for fiscal 1993. Proceeds from the combined transactions totaled
$2.8 million, resulting in a gain on the sale of $0.4 million. Assets
sold consisted primarily of inventories and a small amount of fixed
assets.
During fiscal 1992, the Corporation completed acquisitions which provided
entry into the European market and enhanced its competitive market
position in the northeastern United States and in Canada. The
Corporation's European acquisition, described in Note 7 to the financial
statements, resulted in the acquisition of a 51% owned subsidiary, Univar
Europe N.V., a Netherlands corporation, and of four companies with
operations in the United Kingdom, Scandinavia, Switzerland and northern
Italy. Funding of the $59.1 million acquisition was provided in part by
seller financing totaling approximately $8.9 million. The balance of the
funding was provided proportionately by the Corporation (51%) and by
Pakhoed (49%) in the form of interest and non-interest bearing debt and
equity. The Corporation funded its contribution with proceeds from the
sale of shares to Dow as described in Note 7 of the financial statements.
On May 18, 1994, Univar acquired Pakhoed's 49% minority interest in
Univar Europe. See the "Subsequent Events" discussion included above.
On December 13, 1991, the Corporation, through its Canadian subsidiary,
Van Waters & Rogers Ltd., acquired substantially all of the working
capital and selected fixed assets and real property of Harcros Chemicals
Canada Inc., a Canadian corporation, for a purchase price of $30.4
million (U.S. Dollars). Funding for the acquisition was provided by a
combination of available cash in the Canadian subsidiary and borrowings
under existing Canadian bank lines.
During the fiscal 1992 year the Corporation also completed two other U.S.
business acquisitions for an aggregate purchase price of $11.1 million.
See Note 10 to the financial statements for sales and other operations
data by geographic area.
CAPITAL EXPENDITURES
Capital expenditures for fiscal 1994 totaled $14.0 million. Capitalized
expenditures include normal additions, upgrades, and expansions of
offices, plants, delivery equipment, and similar items. Comparable
capital expenditures during fiscal 1993 and 1992 totaled $16.6 million
and $31.0 million, respectively. Capitalized expenditures related to the
development of the UVX2000 computer system totaled $1.3 million for
fiscal 1993 and $16.7 million for fiscal 1992. Capital expenditures for
fiscal 1995 are projected to be $20 million.
THE ENVIRONMENT
Because of the nature of its business, the Corporation is involved in
numerous contractual, product liability, and public liability cases and
claims. The liabilities for injuries to persons or property are
frequently covered by liability insurance and the deductible and self-
insured portions of these liabilities, where applicable, have been
accrued in the financial statements set forth at Item 8 below.
The Corporation or related entities have been contacted by various
governmental agencies regarding potential liability for a share of the
cost of clean up of independent waste disposal or recycling sites with
alleged or confirmed contaminated soil and/or groundwater to which the
Corporation or related entities may have taken waste products. With
regard to many of these sites, the Corporation has denied liability
because of an absence of any connection between the Corporation or
related entities and the waste disposal or recycling site. The
Corporation believes there are thirty sites in which the Corporation may
be liable for a share of the cost of clean up. With the exception of
two sites, those sites which show some alleged evidence of an
association between the Corporation or related entities and the waste
disposal or recycling site, the Corporation is considered a de minimis,
or small quantity, "potentially responsible party." The Corporation
estimates the probable liability for the remediation of independent waste
disposal sites totals $1.5 million, which is included in the
Corporation's environmental accrual. Possible costs for these sites
could range up to $3.0 million.
Thirty-seven owned, previously owned, or leased sites of the Corporation
are currently undergoing remediation efforts or are in the process of
active review of the need for potential remedial efforts. Some of these
efforts are being conducted pursuant to governmental proceedings or
investigations, while others are being conducted voluntarily by the
Corporation, with appropriate state or federal agency oversight and
approval. The following table shows additions to and expenditures charged
against the Corporation's environmental accruals during the past three
fiscal years:
(Millions of dollars) 1994 1993 1992
Beginning balance $15.4 $ 5.1 $ 5.4
Expense provisions 4.0 .7 1.0
Insurance recoveries - 13.7 1.7
Expenditures -3.8 -4.1 -3.0
------ ------ ------
Ending balance $15.6 $15.4 $ 5.1
====== ====== ======
During fiscal 1993, the Corporation reached final settlements with its
insurance carriers in its lawsuit which sought recovery for certain
environmental expenditures. The settlements, which cover historical and
ongoing cleanup costs at various sites in the U.S., were added to the
Corporation's environmental accrual.
Annual cash expenditures for remedial, monitoring and investigatory
activities have averaged approximately $3.6 million during the past three
years. In addition, annual cash expenditures for environmental capital
expenditures have averaged $0.7 million While the Corporation does not
anticipate a material increase in the projected annual level of its
environmental related expenditures, there is the possibility that such
increases may occur in the future. The precision of the Corporation's
environmental estimates is affected by several uncertainties such as the
developments at sites resulting from investigatory studies; the extent of
required cleanup; the complexity of applicable government laws and
regulations and their interpretations; the varying costs and
effectiveness of alternative cleanup technologies and methods; the
uncertainty concerning recovery of such costs from third-parties which
may be jointly liable; and the questionable level of the Corporation's
involvement at various sites at which the Corporation is allegedly
associated. The Corporation adjusts its accruals as new remediation
requirements are defined, as information relevant to reasonable estimates
to be made becomes available, and to reflect new and changing facts.
Although the Corporation believes adequate accruals have been provided
for environmental contingencies, it is possible, due to the uncertainties
previously noted, that additional accruals could be required in the
future that could have a material effect on the results of operations in
a particular quarter or annual period. However, the ultimate resolution
of these contingencies, to the extent not previously provided for, should
not have a material adverse effect on the Corporation's financial
position.
STOCK PRICE
During the fiscal year ended February 28, 1994, the price of Univar
common shares ranged between a high of $14.25 on September 1, 1993, and a
low of $9.50 per share on April 16, 1993. The range, on a fiscal quarter
by quarter basis is presented in Part II, Item 5.
The closing price on the New York Stock Exchange at February 28, 1994 was
$11.25 per share, up from $10.63 per share a year earlier and down from
$11.88 at the end of 1992. The S&P 500 Index for the same dates was
467.14, 443.38 and 412.70, respectively.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended February 28/29
(Thousands of dollars, except per share amounts)
1994 1993 1992
Sales $1,802,464 $1,801,023 $1,558,496
Cost of Sales 1,532,931 1,536,817 1,334,123
---------- --------- ---------
Gross Margin 269,533 264,206 224,373
Operating Expenses 242,388 243,008 212,783
Re-Engineering and
Restructuring Charges 4,507 --- 9,870
---------- ---------- --------
Income from Operations 22,638 21,198 1,720
Other Income (Expense):
Interest expense -12,921 -15,248 -11,358
Other - net 525 2,478 1,835
Income (Loss) Before Provision --------- --------- ---------
for (Benefit of) Taxes on
Income and Minority Interest 10,242 8,428 -7,803
Provision for (Benefit of)
Taxes on Income (Loss) 4,403 2,811 -1,785
Income (Loss) Before Minority --------- --------- --------
Interest 5,839 5,617 -6,018
Minority Interest's Share in
Income (Loss) 379 482 -392
--------- --------- ---------
Net Income (Loss) $5,460 $ 5,135 $ -5,626
========= ======== =========
Net Income (Loss) Per Share $.28 $.26 $-.29
========= ======== =========
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended February 28/29
(Thousands of dollars)
1994 1993 1992
Cash Flows Provided by
Operating Activities
Net income (loss) $ 5,460 $ 5,135 $-5,626
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation and amortization 27,449 25,881 16,834
Deferred taxes on income -2,452 -3,310 5,180
Other liabilities and
deferred credits -1,483 5,837 -931
Other-net -294 993 453
Change in assets and liabilities,
net of effect of businesses sold
and acquired:
Accounts receivable -4,804 1,119 7,762
Inventories 6,212 7,861 6,978
Accounts payable -3,991 -1,194 7,251
Other current assets 5,226 565 9,945
Other current liabilities 4,063 -2,940 5,473
--------- --------- ---------
Net Cash Provided by Operating
Activities 35,386 39,947 53,319
--------- --------- ---------
Cash Flows Used by Investing Activities
Proceeds from investments 1,132 109 2,058
Additions to property, plant,
and equipment -14,121 -11,667 -36,163
Acquisition of businesses -4,383 --- -88,971
Sale of business 2,812 --- ---
Change in other assets -106 149 -1,583
--------- --------- ---------
Net Cash Used by Investing
Activities -14,666 -11,409 -124,659
--------- --------- ---------
Cash Flows Provided (Used)
by Financing Activities
Short-term borrowing-net -6,813 26,069 -10,479
Common stock activity 286 45 30,375
Subordinated debt provided by
minority shareholder --- --- 25,505
Long-term debt proceeds 20,000 163,500 118,465
Reduction in long-term debt -40,739 -198,840 -86,255
Payment of dividends -5,895 -5,883 -5,577
Net Cash Provided (Used) by --------- --------- ---------
Financing Activities -33,161 -15,109 72,034
Effect of Exchange Rate Changes --------- --------- ---------
on Cash -1,545 -1,259 ---
-------- --------- ---------
Net Cash Provided (Used) -13,986 12,170 694
Cash and Equivalents at
Beginning of Year 29,516 17,346 16,652
Cash and Equivalents --------- --------- ---------
at End of Year $ 15,530 $ 29,516 $ 17,346
Supplemental Disclosure of ========= ========= =========
Cash Flow Information
Cash paid during the year for:
Interest (net of capitalized
interest) $13,325 $ 15,592 $ 10,547
Taxes on income 6,008 6,573 ---
The accompanying notes are an integral part of these statements.
CONSOLIDATED BALANCE SHEETS
February 28
(Thousands of dollars) 1994 1993
ASSETS
Current Assets
Cash and equivalents $ 15,530 $ 29,516
Receivables-
Trade accounts (less
allowance for losses of
$1,848 in 1994 and
$1,852 in 1993) 218,892 219,435
Other 7,708 10,646
Inventories 125,638 131,119
Prepaid expenses and other 9,486 8,467
-------- --------
Total current assets 377,254 399,183
Real Properties Held for Sale
and Long-Term Receivables 29,590 30,878
Property, Plant, and Equipment
Land 23,345 23,362
Buildings 105,530 101,539
Equipment 210,192 209,054
Leased property under capital leases 5,399 5,419
Construction in progress 5,895 8,200
-------- --------
350,361 347,574
Accumulated depreciation
and amortization -133,161 -115,179
-------- ---------
Net property, plant, and
equipment 217,201 232,395
Other Assets 28,649 29,895
-------- --------
$652,694 $692,351
======== =========
The accompanying notes are an integral part of these statements.
CONSOLIDATED BALANCE SHEETS
February 28
(Thousands of dollars) 1994 1993
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Bank overdrafts $ 22,666 $ 17,896
Notes payable 23,331 31,445
Current portion of long-term debt 7,296 6,933
Accounts payable 201,857 210,483
Accrued payroll and other
liabilities 38,559 38,568
-------- ---------
Total current liabilities 293,709 305,325
Long-Term Debt, less Current
Portion 147,058 169,922
Other Long-Term Liabilities
Deferred taxes on income 26,088 25,220
Other liabilities and
deferred credits 27,048 27,444
-------- ---------
Total other long-term
liabilities 53,136 52,664
Commitments and Contingencies --- ---
Minority Interest 1,385 1,150
Shareholders' Equity
Preferred stock, no par value
Authorized 750,000 shares --- ---
Common stock, par value $.33 1/3
per share
Authorized - 40,000,000 shares
Issued - 22,018,502 in 1994
and 1993 7,339 7,339
Additional paid-in capital 69,798 69,555
Retained earnings 97,060 97,495
Cumulative translation adjustment -6,961 -1,041
Treasury stock, at cost,
2,370,915 shares in 1994
and 2,386,308 shares in 1993 -9,610 -9,633
Deferred stock compensation
expense -220 -425
-------- ---------
Total shareholders' equity 157,406 163,290
-------- ---------
$652,694 $692,351
======== ========
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Three Years Ended Additional Cumulative
February 1994 Common Paid-in Retained Translation
(Thousands of dollars) Stock Capital Earnings Adjustment
Balance, February 28, 1991 $6,706 $39,790 $109,596 $3,022
Net loss - - -5,626 -
Sale of stock
(1.9 million shares) 633 29,463 - -
Exercise of stock options - 185 - -
Stock awards (3,348 shares) - 34 - -
Cash dividends at
$.30 per share - - -5,727 -
Purchase of treasury stock - - - -
Foreign currency
translation adjustment - - - 600
Stock compensation expense - - - -
- - -------------------------------------------------------------------------
Balance, February 29, 1992 7,339 69,472 98,243 3,622
Net income - - 5,135 -
Exercise of stock options - 83 - -
Cash dividends at
$ .30 per share - - -5,883 -
Foreign currency
translation adjustment - - - -4,663
Purchase of treasury stock - - - -
Stock compensation expense - - - -
- - ----------------------------------------------------------------------------
Balance, February 28, 1993 7,339 69,555 97,495 -1,041
Net income - - 5,460 -
Exercise of stock options - 58 - -
Cash dividends at
$.30 per share - - -5,895 -
Foreign currency
translation adjustment - - - -5,920
Purchase of treasury stock - - - -
Stock compensation expense - - - -
Other - 185 - -
- - ----------------------------------------------------------------------------
Balance, February 28, 1994 $7,339 $69,798 $97,060 $-6,961
============================================================================
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Continued
Deferred
Stock Total
For the Three Years Ended Compen- Share-
February 1994 Treasury sation holders'
(Thousands of dollars) Stock Expense Equity
Balance, February 28, 1991 $-9,554 $-1,223 148,337
Net loss - - -5,626
Sale of stock
(1.9 million shares) - - 30,096
Exercise of stock options 190 - 375
Stock awards (3,348 shares) 13 -47 -
Cash dividends at
$.30 per share - - -5,727
Purchase of treasury stock -44 - -44
Foreign currency
translation adjustment - - 600
Stock compensation expense -107 503 396
- - ----------------------------------------------------------------------------
Balance, February 29, 1992 -9,502 -767 168,407
Net income - - 5,135
Exercise of stock options 233 - 316
Cash dividends at
$ .30 per share - - -5,883
Foreign currency
translation adjustment - - -4,663
Purchase of treasury stock -271 - -271
Stock compensation expense -93 342 249
- - ----------------------------------------------------------------------------
Balance, February 28, 1993 -9,633 -425 163,290
Net income - - 5,460
Exercise of stock options 85 - 143
Cash dividends at
$.30 per share - - -5,895
Foreign currency
translation adjustment - - -5,920
Purchase of treasury stock -44 - -44
Stock compensation expense -18 205 187
Other - - 185
- - ----------------------------------------------------------------------------
Balance, February 28, 1994 $-9,610 $-220 $157,406
============================================================================
The accompanying notes are an integral part of these statements.
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Corporation and all of its majority-owned domestic and foreign subsidiaries,
after elimination of significant intercompany accounts and transactions.
The Corporation's 51% owned subsidiary, Univar Europe N.V. (Univar Europe),
is consolidated using its financial year end December 31.
REVENUE RECOGNITION
The Corporation records revenues as orders are shipped.
INVENTORIES
Inventories consist primarily of finished goods. The methods of valuation of
inventories at the balance sheet dates were as follows:
(Thousands of dollars) 1994 1993
At Cost (last-in, first-out method) $ 72,876 $ 79,552
At Lower of Cost or Market
(average-cost method) 52,762 51,567
-------- --------
$125,638 $131,119
======== ========
If the inventories valued on the last-in, first-out (LIFO) method had been
valued at average costs, they would have been $28.9 and $29.1 million higher
than reported at year end 1994 and 1993, respectively.
The Corporation had decreases in certain LIFO inventories that were carried
at lower costs prevailing in prior years. The effect of these decreases was
to increase earnings before income taxes by approximately $1.1 million in
fiscal 1994.
PROPERTY, PLANT, & EQUIPMENT
Expenditures for property, plant, and equipment and for renewals and
betterments that extend the originally estimated economic lives of assets
are capitalized at the related cost. Expenditures for maintenance, repairs,
and other renewals are charged to expense. Gain or loss is recognized for
dispositions. For financial reporting purposes, depreciation has been
provided using the straight-line method over the estimated useful lives of
the related assets. For income tax purposes, depreciation on certain assets
is computed using accelerated methods. Interest costs of approximately $0.4
million, $1.0 million, and $4.0 million, for fiscal years 1994, 1993, and
1992, respectively, have been capitalized to the cost of new assets.
Costs incurred in developing or purchasing management information systems
are capitalized and included in property, plant, and equipment. These costs
are depreciated over their estimated useful lives from the date the systems
become operational.
INTANGIBLE ASSETS
Intangible assets which consist of covenants not to compete and goodwill,
are amortized on the straight-line method over their estimated useful lives,
typically no more than ten and twenty years, respectively.
ENVIRONMENT
Accruals for costs which have the purpose of contamination removal are
recorded when it is probable that a liability has been incurred and the
amount of the liability can be reasonably estimated. Accruals for such
environmental liabilities are included in the balance sheet caption "Other
Liabilities and Deferred Credits." Accruals for insurance or other third-
party recoveries for environmental costs are recorded when it is probable
that the claim will be realized.
Environmental costs are capitalized if the costs extend the life of the
property, increase its capacity, and/or mitigate or prevent contamination
from future operations. Costs related to investigation of potential
environmental matters are expensed as incurred.
SELF-INSURANCE RESERVES
The Corporation retains certain exposures in its insurance plan under
various deductible or self-insured programs. Reserves for claims made are
recorded at estimated costs as current liabilities. Reserves for estimated
claims incurred but not yet reported are recorded as other long-term
liabilities.
INCOME TAXES
Taxes on income are calculated using the asset and liability method which
results in recognition of deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the
carrying amounts and tax bases of assets and liabilities, using enacted
rates. The principal differences between financial and tax reporting arise
from depreciation, self-insurance, environmental and other accruals and
reserves, pension accruals, alternative minimum tax credits, and net
operating loss carry-overs. Accumulated undistributed earnings after taxes
for the Canadian subsidiary amounted to approximately $55.0 million at 1994.
The European subsidiaries have accumulated undistributed earnings, net of
the minority shareholder's interest, of $0.2 million. No provision for
foreign withholding or United States federal income taxes is necessary, as
it is management's intention that dividends will be paid only under
circumstances which will not generate additional net tax cost.
MINORITY INTEREST
The 49% shareholder's interest in the total equity of Univar Europe, after
elimination of intercompany and consolidation adjustments, is shown as
minority interest.
FAIR VALUE
The carrying value of financial instruments approximates fair value, unless
otherwise disclosed. Fair values have been estimated using available market
prices for similar issues and maturities.
TRANSLATION OF FOREIGN CURRENCY
Local currencies have been used as the functional currency throughout the
world. The balance sheet accounts of foreign subsidiaries are translated
using the exchange rates in effect at their respective years-end. Results
of operations are translated using the average exchange rates prevailing
throughout the periods. The effects of unrealized exchange rate fluctuations
on translating foreign currency assets and liabilities into U.S. dollars are
accumulated as the cumulative translation adjustment in shareholders'
equity. Realized gains and losses from foreign currency transactions are
included in net income for the period.
EARNINGS PER SHARE
Net income (loss) per common share is based on the weighted average number
of shares outstanding during each year (19,703,273 for 1994, 19,697,632 for
1993, and 19,247,260 for 1992). There is no material dilution due to
outstanding stock options.
STATEMENTS OF CASH FLOWS
The Corporation considers cash on hand, certificates of deposit, and
short-term marketable securities with maturities of less than 90 days, as
cash and equivalents for purposes of the statements of cash flows.
RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board issued SFAS No. 112, "Employers'
Accounting for Postemployment Benefits" which the Corporation will adopt
in fiscal 1995. Postemployment benefits are all types of benefits, other
than retirement benefits, provided to former or inactive employees, their
beneficiaries, and covered dependents. These benefits include, but are not
limited to, salary continuation, supplemental unemployment benefits,
severance benefits, disability related benefits (including workers'
compensation), job training and counseling, and continuation of benefits
such as health care benefits and life insurance coverage. Under this
statement, the cost of postemployment benefits will be recognized on an
accrual basis. The Corporation does not expect the adoption of SFAS No. 112
to significantly impact the results of operations.
NOTE 2 - NOTES PAYABLE
As of February 28, 1994, the Corporation has domestic and foreign short-term
lines of credit totaling $85.6 million, with loans against these bank lines
of $23.3 million. The approximate average aggregate short-term borrowing
and weighted average short-term interest rates were $27.3 million and 5.8%
in 1994, $35.8 million and 7.0% in 1993, and $30.5 million and 7.7% in 1992.
The maximum amount of short-term borrowing during the year was $40.5 million
in 1994, $53.1 million in 1993, and $51.1 million in 1992.
NOTE 3 - LONG-TERM DEBT AND REVOLVING CREDIT
Long-term debt consists of the following at February 28:
(Thousands of dollars) 1994 1993
Senior Debt:
Revolving credit agreement $95,000 $106,000
Term credit agreements, 5.26% and 9.84%,
unsecured, payable from 1995 to 1996 16,667 20,000
Note payable 90 Day STIBOR
(Stockholm Interbank Offering Rate)
plus 2.0%, payable contingently in
1995 through 1998 6,000 7,064
Industrial revenue bonds, 4.32% to 7.25%,
secured by certain real property,
payable in installments to 1999 4,400 7,050
Non-interest bearing, deferred
consideration, payable in 1995 1,379 1,426
Non-U.S. term credit agreements,
6.25%, payable quarterly to fiscal 1995 164 3,683
Other 6,654 5,690
Subordinated Debt:
Non-interest bearing notes payable,
see below 13,600 14,081
Interest bearing notes payable,
see below 6,502 7,573
Capitalized Lease Obligations:
8.51% to 11.75%, secured by
certain real property, payable
in monthly installments to 2020 3,988 4,288
------- -------
154,354 176,855
Current portion -7,296 -6,933
------- -------
$147,058 $169,922
======== ========
Maturities of long-term debt for the fiscal years ending 1996-1999 are as
follows:
1996 $18,611
1997 678
1998 688
1999 6,722
The Corporation and its domestic and Canadian subsidiaries are parties to a
revolving credit agreement with a group of banks. Under the terms of the
agreement, the borrowers may borrow up to $210 million at the prime rate,
certificate of deposit rate plus 7/8%, or LIBOR (London Interbank Offering
Rate) plus 7/8%, at the Corporation's option. The credit commitment extends
for three years, with annual one year renewals. In addition, the agreement
requires fees of 3/8% on unused commitments, and compensating balances of
not less than 5% of the outstanding loan amount, or the payment of fees in
lieu thereof. Certain banks have elected, under provisions of the
agreement, to waive the compensating balance requirements and instead charge
an additional 1/8% on all loans made by such banks.
The long-term debt instruments include provisions specifying current ratio,
interest bearing debt to equity ratios, and a minimum equity level, among
other restrictions. Under the most restrictive of the financial covenants,
the Corporation's current ratio, as defined, cannot fall below 1.20:1; the
ratio of total interest bearing debt, as defined, to equity cannot exceed
1.40:1; and the Corporation's shareholders' equity cannot be less than
$143.0 million. At year end, the Corporation was in compliance with all
loan covenants.
The Corporation has entered into certain interest rate swap agreements to
manage its exposure to interest rate fluctuations. At February 28, 1994,
the aggregate notional value of these agreements totaled $50 million, with a
weighted average remaining life of approximately 7 years. These agreements
effectively convert a portion of the Corporation's floating rate debt to
fixed rate debt with rates ranging from 6.77% to 7.25% The estimated
aggregate fair value of the contracts, as measured by the amount required to
terminate the agreements at the reporting date, was approximately $2.8
million. The Corporation is exposed to, but does not anticipate, credit loss
in the event of counterparty nonperformance.
In 1992, Univar Europe executed a foreign currency denominated note (U.S.
dollar equivalent of $6.0 million at February 28, 1994) in connection with
its acquisition of certain subsidiaries (see Note 7). The due date of the
note payable is June 1995, but may be deferred up to December 1998 if the
seller has not achieved certain minimum net worth requirements by December
1994. In accordance with contract provisions, the seller has agreed to
provide indemnification to Univar Europe for certain environmental and other
undisclosed liabilities that existed as of the acquisition date. Univar
Europe has the right to offset these liabilities against the note's
principal balance. Payment of this note is reflected in the schedule of
maturities of long-term debt for 1999 at the full amount although potential
for reduction exists.
Univar Europe was capitalized, in part, with interest and non-interest
bearing subordinated debt provided to Univar Europe by the Corporation and
the minority shareholder. While the loans made by the Corporation to Univar
Europe are eliminated in the consolidated balance sheet, the following
subordinated loans, denominated in foreign currencies, made by the minority
shareholder to Univar Europe are included in the Corporation's consolidated
balance sheet:
Subordinated Notes (Thousands of dollars) 1994 1993
Non-interest bearing notes payable $13,600 $14,081
Interest bearing notes payable 6,502 7,573
-------- --------
$20,102 $21,654
======== ========
The interest and non-interest bearing subordinated notes are denominated in
Swedish Krona, British Pounds Sterling and Swiss Francs. The notes are
payable at the mutual consent of the Corporation and the minority
shareholder or in the event of a change in ownership of Univar Europe.
Interest is payable quarterly at rates of 90-day STIBOR plus 0.5%, or
Sterling LIBOR (Pound Sterling based London Interbank Offering Rate) plus
0.5%. The 90-day STIBOR and 90-day Sterling LIBOR were 7.6% and 5.4%,
respectively, at Univar Europe's year end.
On May 18, 1994, in accordance with terms of the agreement between the
shareholders, the minority shareholder notified the Corporation of its
intention to sell its Univar Europe shares to the Corporation. The
subordinated notes made by the minority shareholder to Univar Europe will be
satisfied in conjunction with the sale of the shares. See Note 12 -
Subsequent Events.
NOTE 4 - LEASES
Rental expense, net of amounts capitalized in connection with equipment used
in the development of the UVX 2000 (REGISTERED TRADEMARK) U.S. computer
system was $23.2 million, $25.8 million, and $26.3 million, for 1994, 1993,
and 1992, respectively. The Corporation and its subsidiaries occupy certain
leased premises and lease certain other equipment. Leases that qualify as
capital leases have been capitalized. The amount of such capitalized leases
included in property, plant, and equipment and the related accumulated
amortization was $5.4 million and $3.1 million in 1994, and $5.4 million and
$2.1 million in 1993. Lease amortization is included in depreciation
expense.
Future minimum lease payments as of year end under capital leases and
non-cancelable operating leases, having initial lease terms of more than one
year, are as follows:
Capital Operating
(Thousands of dollars) Leases Leases
1995 $ 735 $22,033
1996 707 16,361
1997 707 10,636
1998 707 9,721
1999 707 5,353
Thereafter 2,775 18,348
-------- --------
Total minimum lease payments 6,338 $82,452
Amounts representing interest (2,350) =======
-------
Present value of net minimum
lease payments $ 3,988
=======
The present value of the capital lease payments is presented in the 1994
balance sheet as long-term debt.
NOTE 5 - TAXES ON INCOME
FASB Statement No. 109 "Accounting for Income Taxes," was adopted effective
March 1, 1993, resulting in a change in the method of accounting for income
taxes. The favorable impact of the change is not material and is included
in the provision for taxes on income for the year.
Domestic and foreign components of income (loss) before taxes on income and
minority interest consisted of the following:
(Thousands of dollars) 1994 1993 1992
Domestic $ -246 $ 1,618 $-12,659
Foreign 10,488 6,810 4,856
-------- -------- --------
$10,242 $ 8,428 $ -7,803
======== ======== ========
Provision for (benefit of) taxes on income (loss) consisted of the following
components:
(Thousands of dollars) 1994 1993 1992
Current
Federal $ 889 $ 408 $-3,512
State and Local 140 498 -1,394
Foreign 5,261 1,900 2,492
-------- -------- --------
6,290 2,806 -2,414
Deferred -------- -------- --------
Federal -1,770 358 12
State and Local 291 -770 44
Foreign -480 417 573
-------- -------- --------
-1,887 5 629
-------- -------- --------
$ 4,403 $2,811 $-1,785
======== ======== ========
Deferred tax balances consisted of the following temporary differences:
(Thousands of dollars)
February 28, 1994 March 1, 1993
Deferred Tax Deferred Tax Deferred Tax Deferred Tax
Assets Liabilities Assets Liabilities
Alternative
minimum tax $ 7,500 $ --- $ 6,312 $ ---
Tax loss and credit
carryforwards 480 --- 3,446 ---
Self-Insurance
Reserves 2,410 --- 2,271 ---
Pension and other
compensation
accruals 1,266 --- 2,323 ---
State Income
Tax Accrual 1,268 --- --- ---
Vacation
accrual 1,268 --- --- ---
Property --- 37,233 --- 39,424
Other 4,162 4,784 7,872 8,563
-------- ------- --------- --------
Total $ 18,354 $42,017 $22,224 $ 47,987
======== ======= ========= ========
Deferred tax provisions result from timing differences in the recognition of
certain items for income tax and financial statement purposes. The sources
of these differences and the tax effect of each for fiscal 1993 and 1992,
prepared according to APB Opinion No. 11, are as follows:
(Thousands of dollars) 1993 1992
Depreciation and amortization $ -788 $ 1,439
Net operating loss carry-over -798 -1,084
Self-insurance reserves 770 -413
Pension accrual 153 -3,017
Software development 529 5,649
Receivable valuation 173 40
Environmental reserves 313 682
Alternative minimum tax credit -399 -3,584
Container reserve - 1,068
Other - net 52 -151
------ -------
$ 5 $ 629
====== =======
The accompanying financial statements reflect effective tax (benefit) rates
of 43.0% in 1994, 33.4% in 1993, and (22.9)% in 1992. An analysis of the
differences between these rates and the Federal statutory rate is set forth
below:
1994 1993 1992
(Thousands of Amount Percent Amount Percent Amount Percent
dollars)
Federal tax at
statutory rate $3,483 34.0% $2,866 34.0% $-2,653 -34.0%
State taxes, net of
Federal tax benefit 285 2.8 -179 -2.1 -891 -11.4
Rate differential for
foreign income 1,099 10.7 328 3.9 876 11.2
Travel and entertainment
limitation 210 2.1 190 2.3 160 2.1
Research and experimentation
credit -787 -7.2 - - - -
Non-deductible
amortization 226 2.2 179 2.1 196 2.5
Other - net -113 -1.1 -573 -6.8 527 6.7
------ ----- ------ ----- ------- -----
$4,403 43.0% $ 2,811 33.4% $-1,785 -22.9%
====== ===== ======= ===== ======= =====
The Corporation's federal income tax returns are closed for all years up to
1988. The Corporation has U.S. federal tax net operating loss carry-overs
totaling $0.5, which expire in 2008. In addition, the Corporation has
alternative minimum tax credit carry-overs totaling $7.5 million, which have
no carry-over limitation period. Research and experimentation credit carry-
overs total $0.5 million, expiring through 2007.
NOTE 6 - PENSION AND OTHER POSTRETIREMENT BENEFITS
PENSION BENEFITS
The Corporation and its subsidiaries have defined benefit pension plans
covering substantially all employees in the U.S., Canada, and the United
Kingdom, excluding those employees covered by unions that operate plans
independent of the Corporation or its subsidiaries. The Corporation's
funding policy is to contribute annually amounts that provide for benefits
attributed to service to date and benefits expected to be earned during the
plan year, based on the projected final average compensation and where
pension laws or economics either require or encourage funding.
The U.S. funded plan is the largest plan. Its benefits are based on length
of service and the employee's highest five-year average compensation. The
rate of increase in future compensation levels, and the expected long-term
rate of return on plan assets used in determining the actuarial present
value of the projected benefit obligations were 6% and 10%, respectively,
for both 1994 and 1993. The weighted average discount rate used was 7.8%
and 8.6%, for 1994 and 1993, respectively. The market value of assets,
consisting primarily of cash equivalents and equity securities is as
reported by the trustee bank serving the pension plan.
Employees of non-U.S. subsidiaries generally receive pension benefits from
corporate sponsored plans or from statutory plans administered by
governmental agencies in their countries. Corporate sponsored foreign plans
have applied the provisions of Statement of Financial Accounting Standards
No. 87 using assumptions that are similar to those utilized for the U.S.
plans.
The status of the Corporation's funded defined benefit plans is as follows:
(Thousands of dollars) 1994 1993
Actuarial present value of
benefit obligations
Vested $84,544 $70,161
Non-vested 2,228 1,884
------- -------
Accumulated benefit obligation $86,772 $72,045
======= =======
Projected benefit obligation $109,866 $90,529
Plan assets at fair value 80,395 68,236
-------- -------
Projected benefit obligation in
excess of plan assets 29,471 22,293
Unrecognized net transition
obligation 327 396
Unrecognized prior service
cost -244 -71
Unrecognized net loss (plan
changes and actuarial losses) -26,251 -15,065
Accrued pension cost, included -------- --------
in current and long-term liabilities $ 3,303 $ 7,553
======== ========
The status of the Corporation's unfunded defined benefit plans is as
follows:
(Thousands of dollars) 1994 1993
Accumulated benefit obligation,
all of which is vested $4,073 $2,027
====== ======
Projected benefit obligation $4,742 $2,699
Unrecognized prior service cost -2,446 -1,035
Unrecognized net loss (plan changes
and actuarial losses) -86 -8
Accrued pension cost, included in ------ ------
long-term liabilities $2,210 $1,656
====== ======
Net periodic pension expense for all defined benefit plans sponsored by the
Corporation and its subsidiaries includes the following components:
(Thousands of dollars) 1994 1993 1992
Service cost (benefits earned
during the period) $ 4,214 $ 3,832 $ 3,128
Interest cost on projected
benefit obligation 7,719 6,850 5,387
Actual return on plan assets -8,357 -6,508 -8,554
Net amortization and deferral 3,003 1,341 4,431
------- ------- -------
$ 6,579 $ 5,515 $ 4,392
======= ======= =======
Certain employees are covered under union-sponsored, collectively bargained,
defined benefit plans. Expenses for these plans were $0.8 million in 1994
and 1993, and $0.7 million in 1992, as determined in accordance with
negotiated labor contracts.
Provisions of the Multi-Employer Pension Amendments Act of 1980 require
participating employers to assume a proportionate share of a multi-employer
plan's unfunded, vested benefits in the event of withdrawal from or
termination of such plan. Information concerning the Corporation's share of
unfunded, vested benefits is not available from plan administrators.
Provisions of the Act may have the effect of increasing the level of
contributions in future years.
OTHER POST RETIREMENT BENEFITS
In addition to providing pension benefits, in the United States, the
Corporation provides certain health care benefits to its retired employees.
Effective March 1, 1993, the Corporation adopted FASB Statement No. 106
"Employers' Accounting for Postretirement Benefits Other Than Pensions".
The pre-tax increase in operating expense resulting from adoption of the
statement was $0.7 million. Prior to the adoption of FASB Statement No.
106, the cost of providing these benefits was recognized as the benefits
were paid. The Corporation continues to fund the cost of these medical
benefits in the year incurred.
The plan provides health care benefits including hospital, physicians',
dentists', and eye care services and major medical expense benefits. The
plan provides benefits supplemental to Medicare after retirees are eligible
for these benefits. The cost of the benefits provided are shared by the
Corporation and the retiree, with the Corporation portion increasing as the
retiree has increased years of credited service. The Corporation has the
ability to change these benefits at any time.
For measurement purposes, a discount rate of 8.2% and weighted average
health cost trend rates starting at 16% and declining to 7.5% over a ten
year period were assumed for 1994. The health care cost trend rate assumed
has a significant effect on the amount reported. To illustrate, increasing
the assumed medical cost trend rate by 1 percentage point would increase the
accumulated postretirement benefit obligation at February 28, 1994 by $1.8
million and the net periodic postretirement benefit cost for the year by
$0.2 million.
Unfunded postretirement benefit obligations of the U.S. plan consisted of
the following components at February 28, 1994 and March 1, 1993:
(Thousands of Dollars) February 28, 1994 March 1, 1993
Accumulated postretirement
benefit obligation:
Retirees $3,864 $3,525
Fully eligible active plan
participants 1,821 1,503
Other active plan participants 3,699 2,588
Unfunded accumulated postretirement ------ ------
benefit obligation 9,384 7,616
Unrecognized transition obligation -7,235 -7,616
Unrecognized losses -1,522 --
------ ------
Accrued postretirement benefit cost $ 627 $ 0
====== ======
The net periodic benefit cost for fiscal 1994 includes the following
components:
Service costs (benefits earned during
the period) $ 276
Interest cost on accumulated post-
retirement benefit obligation 675
Amortization and deferred amounts 381
-------
Net periodic postretirement cost $1,332
=======
NOTE 7 - BUSINESS ACQUISITIONS AND DIVESTITURES
During fiscal 1994, the Corporation completed small acquisitions in Canada
and the U.S., which together are expected to add approximately $28 million
in sales volume. The aggregate purchase price was $4.4 million, consisting
of inventories and non-compete covenants.
During fiscal 1994, in a series of transactions, the Corporation sold its
textile chemical distribution business. This business contributed
approximately $21 million of sales for fiscal 1994 and $37 million in sales
for fiscal 1993. Proceeds from the combined transactions totaled $2.8
million, resulting in a gain on the sale of $0.4 million. Assets sold
consisted primarily of inventories and a small amount of fixed assets.
The Corporation and its then 31% shareholder, Pakhoed Investeringen B.V.
(Pakhoed), entered into an agreement resulting in the formation of Univar
Europe, which was incorporated in The Netherlands in 1990. Univar Europe
was 51% owned by the Corporation and 49% owned by Pakhoed. On May 18, 1994,
the Corporation acquired Pakhoed's 49% interest in Univar Europe. See Note
12 - Subsequent Events.
Univar Europe was capitalized with equity and with interest and non-interest
bearing foreign currency denominated subordinated debt provided to Univar
Europe by the Corporation and Pakhoed. Prior to 1991, Univar Europe had no
operations.
Univar Europe acquired all of the capital stock of four companies which
comprised the Beijer Industrial Distribution Group (BID Group). The
transaction included the acquisition in June 1991 of K&K-Greeff (Holdings)
Ltd., a British corporation with operations in the United Kingdom; and MB-
Sveda AB, a Swedish corporation with operations in Scandinavia. In August
1991, the Corporation completed its acquisition of the BID Group by
acquiring Scheller Handel AG, a Swiss corporation with operations in
Switzerland; and Benfer-Scheller SpA, an Italian corporation with operations
in northern Italy. The operations of the acquired companies are comparable
to the Corporation's North American industrial chemical distribution
activities.
The aggregate purchase price of $59.1 million consisted of cash
consideration of $47.7 million, a foreign currency denominated note payable
valued at $7.6 million, related expenses of $2.5 million and a foreign
currency denominated contract for deferred consideration in an amount to be
determined. The future amount of the deferred consideration to be paid (at
current exchange rates) will be a minimum of $1.8 million and a maximum of
$8.0 million. The exact future amount is to be determined based on earnings
of the entities acquired. The deferred consideration is non-interest
bearing, and is payable in 1995. The discounted future value of the minimum
amount is included in long-term debt. Funding for the Corporation's 51%
share of the aggregate purchase price was provided through the sale of 1.9
million shares of the Corporation's common stock to The Dow Chemical Company
(Dow) as described in Note 12.
The acquisition was accounted for by the purchase method. Accordingly, the
costs of the acquisition were allocated to the assets acquired and
liabilities assumed based upon their respective fair values. The
consolidated statements of operations include operating results of the
subsidiaries acquired since the respective dates of acquisition. The Univar
Europe minority shareholder's 49% proportionate interest in the net income
(losses) of the acquired subsidiaries is separately stated.
The following unaudited pro forma summary combines the consolidated results
of operations of the Corporation and those of the four acquired companies as
if the acquisition had occurred at the beginning of 1992, after giving
effect to certain adjustments, including the depreciation and amortization
of the assets acquired based on their fair values, increased interest
expense from seller financing and loans provided to Univar Europe by its 49%
minority shareholder in connection with the acquisition, income tax
effects, and the increase in common shares outstanding. This pro forma
summary does not necessarily reflect the results of operations as they would
have been if the Corporation and the acquired companies constituted a single
entity during such periods and is not necessarily indicative of results
which may be obtained in the future.
Pro Forma Results (unaudited)
(Thousands of dollars, except per share data)
1992
----
Net sales $1,735,237
Net loss -5,455
Net loss per share $ -0.28
In December 1991, the Corporation, through its Canadian subsidiary, Van
Waters & Rogers Ltd., acquired substantially all of the working capital and
selected fixed assets and real property of Harcros Chemicals Canada Inc., a
Canadian corporation, for a purchase price of $30.4 million (U.S. Dollars).
Funding for the acquisition was provided by a combination of available cash
in the Canadian subsidiary and borrowings under existing Canadian bank
lines.
During fiscal 1992, the Corporation also completed two other U.S. business
acquisitions for an aggregate purchase price of $11.1 million.
NOTE 8 - COMMON STOCK TRANSACTIONS (See also Note 12 - Subsequent Events)
STOCK OPTIONS AND RESTRICTED STOCK AWARDS
The Corporation's long-term incentive stock plans (the Plans) provide for
the granting, to officers and key employees, of non-qualified stock options,
incentive stock options, and restricted stock awards. For incentive stock
options, the option price cannot be less than the fair market value of the
common stock at the date of grant. Non-qualified stock options may be
granted at less than the fair market value of the common stock. Under one
program, options become exercisable, based on the Corporation's performance,
beginning 3 years after the date of grant, and expire 10 years and 3 months
after the date of grant. Under all other programs, options become
exercisable at the rate of 20% per year beginning two years after the date
of grant, and expire ten years after the date of grant. Options may be
exercisable as determined by the committee of the Board of Directors that
administers the Plans. Restricted Stock Awards (RSA's) may be granted or
sold to officers and key employees. RSA's may not be sold or otherwise
disposed of during the established restriction periods, presently five and
six years.
Unamortized deferred stock compensation expense of approximately $220,000
and $425,000 is classified as such in the shareholders' equity section of
the Corporation's balance sheet for 1994 and 1993, respectively.
The committee of the Board of Directors that administers the Plans may, at
its discretion, determine the number of shares, the purchase price,
applicable vesting periods, and any other terms of each option or award.
Options and awards include provisions for acceleration of such applicable
vesting periods in the event of certain transactions that may result in a
change of control of the Corporation.
The following table summarizes activity in the Plans:
NUMBER OF SHARES _
Restricted Available
Under Stock for Future
Option Awards Option or
Award Price Range
Outstanding, year
end 1992 339,797 185,814 1,284,916 $ 3.81 -$14.56
Granted 312,246 --- -312,246 11.00 - 13.88
Exercised -58,347 --- --- 4.19 - 11.20
Canceled or expired -32,139 -8,176 40,315 4.19 - 13.75
RSA's vested --- -69,488 ---
------- ------- ---------
Outstanding, year
end 1993 561,557 108,150 1,012,985 4.19 - 14.56
Granted 263,074 --- -263,074 10.63
Exercised -20,996 --- --- 4.19 - 11.20
Canceled or expired -9,076 -1,324 10,400 8.72 - 13.75
RSA's vested --- -27,819 ---
------- ------- ---------
Outstanding, year
end 1994 794,559 79,007 760,311 4.19 - 14.56
======= ======= =========
Exercisable at year
end 1994 167,810
=======
NOTE 9 - LITIGATION AND CONTINGENCIES
Because of the nature of its business, the Corporation is involved in
numerous contractual, product liability, and public liability cases and
claims. The liabilities for injuries to persons or property are frequently
covered by liability insurance, and the deductible and self-insured portions
of these liabilities, where applicable, have been accrued in these financial
statements.
The Corporation or related entities have been contacted by various
governmental agencies regarding potential liability for a share of the cost
of clean up of independent waste disposal or recycling sites with alleged or
confirmed contaminated soil and/or groundwater to which the Corporation or
related entities may have taken waste products. With regard to many of
these sites, the Corporation has denied liability because of an absence of
any connection between the Corporation or related entities and the waste
disposal or recycling site. The Corporation believes there are thirty sites
in which the Corporation may be liable for a share of the cost of clean up.
With the exception of two sites, those sites which show some alleged
evidence of an association between the Corporation or related entities and
the waste disposal or recycling site, the Corporation is considered a de
minimis, or small quantity, "potentially responsible party." The
Corporation estimates the probable liability for the remediation of
independent waste disposal sites totals $1.5 million, which is included in
the Corporation's environmental accrual. Possible costs for these sites
could range up to $3.0 million.
Thirty-seven owned, previously owned, or leased sites of the Corporation are
currently undergoing remediation efforts or are in the process of active
review of the need for potential remedial efforts. Some of these efforts
are being conducted pursuant to governmental proceedings or investigations,
while others are being conducted voluntarily by the Corporation, with
appropriate state or federal agency oversight and approval. The following
table shows additions to and expenditures charged against the Corporation's
environmental accruals during the past three fiscal years:
(Millions of dollars) 1994 1993 1992
Beginning balance $15.4 $ 5.1 $ 5.4
Expense provisions 4.0 .7 1.0
Insurance recoveries - 13.7 1.7
Expenditures -3.8 -4.1 -3.0
------ ----- -----
Ending balance $ 15.6 $15.4 $ 5.1
====== ===== =====
During fiscal 1993, the Corporation reached final settlements with its
insurance carriers in its lawsuit which sought recovery for certain
environmental expenditures. The settlements, which cover historical and
ongoing cleanup costs at various sites in the U.S., were added to the
Corporation's environmental accrual.
Annual cash expenditures for remedial, monitoring and investigatory
activities have averaged approximately $3.6 million during the past three
years. In addition, annual cash expenditures for environmental capital
expenditures have averaged $0.7 million. While the Corporation does not
anticipate a material increase in the projected annual level of its
environmental related expenditures, there is the possibility that such
increases may occur in the future. The precision of the Corporation's
environmental estimates is affected by several uncertainties such as the
developments at sites resulting from investigatory studies; the extent of
required cleanup; the complexity of applicable government laws and
regulations and their interpretations; the varying costs and effectiveness
of alternative cleanup technologies and methods; the uncertainty concerning
recovery of such costs from third-parties which may be jointly liable; and
the questionable level of the Corporation's involvement at various sites at
which the Corporation is allegedly associated. The Corporation adjusts its
accruals as new remediation requirements are defined, as information
relevant to reasonable estimates to be made becomes available, and to
reflect new and changing facts.
Although the Corporation believes adequate accruals have been provided for
environmental contingencies, it is possible, due to the uncertainties
previously noted, that additional accruals could be required in the future
that could have a material effect on the results of operations in a
particular quarter or annual period. However, the ultimate resolution of
these contingencies, to the extent not previously provided for, should not
have a material adverse effect on the Corporation's financial position.
At year end 1994, the Corporation had letters of credit outstanding totaling
approximately $13.6 million, which guaranteed various insurance and
financing activities. Substantially all of these are automatically
renewable each year.
NOTE 10 - INDUSTRY SEGMENT INFORMATION
Univar operates in only one industry segment (chemical distribution) in the
United States, Canada, and Europe. For fiscal 1992, the European segment
information includes partial year operating results for the Corporation's
United Kingdom and Scandinavian subsidiaries acquired in June 1991 and Swiss
and Italian subsidiaries acquired in August 1991.
(Thousands of dollars) UNITED STATES CANADA EUROPE
1994
Sales $1,251,549 $295,564 $255,351
Income from operations 8,755 9,940 3,943
Identifiable assets 438,519 102,241 111,934
Depreciation and
amortization expense 21,496 2,353 3,600
Capital expenditures 7,844 2,141 4,039
1993
Sales $1,232,782 $277,439 $290,802
Income from operations 9,304 7,559 4,335
Identifiable assets 459,669 112,576 120,106
Depreciation and
amortization expense 19,586 2,301 3,994
Capital expenditures 10,593 2,003 3,961
1992
Sales $1,202,064 $224,197 $132,235
Income (loss) from operations -5,109 5,568 1,261
Identifiable assets 469,005 99,794 147,689
Depreciation and
amortization expense 13,555 1,398 1,881
Capital expenditures 29,014 753 1,185
NOTE 11 - QUARTERLY FINANCIAL DATA (Unaudited)
(Thousands of dollars,
except per share data) First Second Third Fourth
1994
Sales $487,951 $474,118 $430,299 $410,096
Gross margin 70,399 70,022 64,224 64,888
Net income (loss) 3,273 1,957 458 -228
Net income (loss)
per share .17 .10 .02 -.01
1993
Sales $468,432 $464,094 $452,907 $415,590
Gross margin 68,299 68,246 64,904 62,757
Net income (loss) 2,455 2,940 -747 487
Net income (loss)
per share .13 .15 -.04 .03
1992
Sales $377,030 $367,442 $404,123 $409,901
Gross margin 50,004 51,493 58,333 64,543
Net income (loss) 1,073 -8,568 557 1,312
Net income (loss)
per share .06 -.43 .03 .07
Significant items increasing income for the fourth quarter of 1994 include
costing adjustments totaling $1.4 million, reductions in self insurance
reserves for general liability totaling $0.9 million, and reductions in self
insured health reserves of $1.0 million. The significant item which
decreased fourth quarter 1994 net income was the cost of the Corporation's
re-engineering effort of ($1.8 million).
Significant items increasing fourth quarter 1993 net income include costing
adjustments totaling $2.0 million and reduction of reserves and accruals
totaling $1.0 million.
The net loss in the second quarter of 1992 includes recognition of
restructuring charges totaling $6.0 million relating to an early retirement
program and associated costs.
Significant items increasing fourth quarter 1992 net income include costing
adjustments totaling $2.5 million, reduction of reserves and accruals
totaling $1.5 million, reduction of the LIFO reserve of $0.9 million,
physical inventory adjustments totaling $0.7 million and reduction in
incentive compensation accruals totaling $0.7 million.
NOTE 12 - SUBSEQUENT EVENTS
EXERCISE OF DOW PUT AGREEMENT
On June 24, 1991, the Corporation and The Dow Chemical Company ("Dow")
entered into an Agreement of Purchase and Sale of Stock (the "Dow Purchase
Agreement"). In accordance with the Dow Purchase Agreement, Univar sold
1,900,000 shares of its common stock to Dow at a price of $15.84 per share.
In addition, Univar reserved the right to put to Dow between approximately
2,500,000 and 2,900,000 additional shares of common stock at a price that
escalated over time, but which reached a maximum price of $18.74 per share.
The number of additional shares that could be sold depended on whether
Pakhoed Investeringen B.V. ("Pakhoed") exercised its right to acquire shares
from Univar at the same price as they were sold to Dow in order for Pakhoed
to maintain its percentage share ownership in Univar. Pakhoed elected not
to exercise its right to acquire additional shares. Therefore, based on the
manner in which the calculation of the number of additional shares to be
sold was made, the actual maximum number of shares that Univar could put to
Dow was 2,509,371. In lieu of the unilateral right of Univar to put
2,509,371 shares of common stock to Dow, on May 13, 1994, Univar and Dow
executed an Amended and Restated Agreement of Purchase and Sale of Stock
(the "Amended Agreement").
Under the terms of the Amended Agreement, Dow purchased from Univar
2,000,000 shares of common stock at a price of $18.74 per share (a total
purchase price of $37,480,000). Dow now holds 3,900,000 shares of common
stock representing 18.02% of the issued and outstanding shares of Univar.
In addition, Dow and Univar have agreed that, at any time within the three
year period ending May 12, 1997, Univar can put to Dow, or Dow can call, up
to 101,874 shares of Series A Convertible Preferred Stock. The price per
share will be $93.70. Each share of Series A Convertible Preferred Stock is
convertible into five shares of common stock by either Dow or Univar. In
the event of a call or put, either all or half the 101,874 shares must be
called by Dow or put by Univar. With respect to the conversion of the
Series A Convertible Preferred Stock into Univar common stock, Univar has
agreed that it will not convert the preferred shares if, following the
conversion, Dow would own in excess of 19.9% of the issued and outstanding
common stock of the Corporation. Dow has agreed that it will pay to Univar
$350,000 per year for each of the three years ending May 12, 1997, in the
event Univar does not elect to put the Series A Convertible Preferred Stock
to Dow, or in the event Dow does not call the Series A Convertible Preferred
Stock.
UNIVAR EUROPE STOCK PURCHASE AGREEMENT
At the time of the organization of Univar Europe in 1991, Univar and Pakhoed
entered into a Shareholder Agreement which gave Pakhoed a unilateral right
to sell its 49% interest in Univar Europe. On May 18, 1994, Pakhoed gave
notice to Univar that Pakhoed had elected to require Univar to purchase
Pakhoed's interest in Univar Europe. Under the terms of the Shareholder
Agreement, Univar may designate the date on which it will purchase Pakhoed's
interest, so long as the actual date of purchase is not later than February
18, 1995. The date has not been set by Univar. Because most of the
purchase price for Pakhoed's interest will be paid in various European
currencies whose exchange rates fluctuate, the actual purchase price for
Pakhoed's interest in Univar Europe cannot be determined until the date of
purchase occurs. However, the anticipated purchase price is approximately
$25 million.
MANAGEMENT RESPONSIBILITY
FOR FINANCIAL DATA
The management of Univar Corporation has prepared and is responsible for
the integrity and fairness of the financial statements and other financial
information presented in this annual report. The statements have been
prepared in accordance with generally accepted accounting principles and, to
the extent appropriate, include amounts based on management's judgment
and/or estimates. In order to discharge its responsibilities for these
financial statements and information, management maintains accounting
systems and related internal controls. These controls are designed to
provide reasonable assurance that transactions are properly authorized and
recorded, that assets are safeguarded, and that financial records are
reliably maintained. The concept of reasonable assurance, however,
incorporates an acknowledgment that the cost of a control system must be
related to the benefits derived.
Management continually monitors the effectiveness of and compliance
with its control systems. The Corporation maintains a strong internal
auditing program that independently assesses the effectiveness of the
internal controls and recommends possible improvements thereto.
The Corporation's financial statements have been audited by Arthur
Andersen & Co., independent public accountants. Management has made
available to Arthur Andersen & Co. all the Corporation's financial records
and related data, as well as the minutes of shareholders' and directors'
meetings. Furthermore, management believes that all representations made to
Arthur Andersen & Co. during its audit were valid and appropriate.
Management has reviewed the recommendations of both the internal
auditors and of Arthur Andersen & Co., and has responded in what we believe
to be appropriate and cost-effective ways.
The Audit Committee of the Board of Directors, which is composed solely
of outside directors, meets periodically with management and with the
internal and independent auditors to review the quality of financial
reporting, the operation and development of the internal control systems,
and the work of internal and independent auditors.
The independent auditors and also the internal auditors each regularly
meet with the Audit Committee without the presence of any other parties.
Gary E. Pruitt
Vice President-Finance and Treasurer
(Principal Financial Officer)
(Principal Accounting Officer)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Univar Corporation:
We have audited the accompanying consolidated balance sheets of Univar
Corporation (a Delaware corporation) and subsidiaries as of February 28,
1994 and 1993, and the related consolidated statements of operations, cash
flows and shareholders' equity for each of the three years in the period
ended February 28, 1994. These financial statements are the responsibility
of the Corporation's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit
the financial statements of the Corporation's wholly-owned Canadian
subsidiary as of February 28, 1993, which statements reflect 16% of the 1993
consolidated assets and 15% and 14% of the 1993 and 1992 consolidated net
revenues, respectively. Those statements were audited by other auditors
whose report has been furnished to us and our opinion, insofar as it relates
to the amounts included for those entities, is based solely on the report of
the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report
of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors,
the financial statements referred to above present fairly, in all material
respects, the financial position of Univar Corporation and subsidiaries as
of February 28, 1994 and 1993, and the results of their operations and their
cash flows for each of the three years in the period ended February 28,
1994, in conformity with generally accepted accounting principles.
As explained in Note 5 and Note 6 to the consolidated financial
statements, effective March 1, 1993, the Corporation changed its methods of
accounting for income taxes and postretirement benefits other than pensions.
Arthur Andersen & Co.
Seattle, Washington,
April 22, 1994 (except with respect to the transactions discussed in Note
12, as to which the date is May 18, 1994).
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Identification of Directors, Identification of Executive Officers,
Business Experience and Family Relationships
The information required of directors of the Corporation by this
item is incorporated by reference to the Corporation's definitive
Proxy Statement which the Corporation will have filed with the
Commission pursuant to Regulation 14A within 120 days after the
close of the fiscal year.
The information required of executive officers of the Corporation
by this item is included in Part I of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Cash Compensation, Bonuses and Deferred Compensation, Compensation
Pursuant to Plans, Pension Table, and Stock Option Plans
The information required by this item is incorporated by reference
to the Corporation's definitive Proxy Statement which the
Corporation will have filed with the Commission pursuant to
Regulation 14A within 120 days after the close of the fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners, Security
Ownership of Management, and Changes in Control
The information required by this Item is incorporated by reference
to the Corporation's definitive Proxy Statement which the Corporation
will have filed with the Commission pursuant to Regulation 14A within
120 days after the close of the fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Related Transactions, Certain
Business Relationships and Indebtedness of Management
The information required by this Item is incorporated by reference
to the Corporation's definitive Proxy Statement which the
Corporation will have filed with the Commission pursuant to
Regulation 14A within 120 days after the close of the fiscal year.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) (1) Financial Statements
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Shareholders' Equity
Notes to Consolidated Financial Statements
(2) Financial Statement Schedules
(a) Selected Quarterly Data
(b) The following financial schedules are submitted herewith.
All other financial schedules are either not applicable or are
fully disclosed in the applicable section of the Corporation's
financial statements and Management's Discussion and Analysis.
Schedule V Property, Plant, and Equipment
Schedule VI Accumulated Depreciation and Amortization of
Property, Plant, and equipment
Schedule VIII Valuation and Qualifying Accounts
Schedule IX Short-Term Borrowings
Report of Independent Public Accountants, Arthur Andersen &
Co., dated April 22, 1994.
(b) Reports on Form 8-K
There have been no reports on Form 8-K filed, or required to be filed,
during the fourth quarter of the year.
(c) Exhibits
The required exhibits are included at the end of the Form 10-K Annual
Report and are described in the Exhibit Index immediately preceding
the first exhibit.
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
UNIVAR CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED FEBRUARY 28/29, 1994, 1993, and 1992
(Thousands of Dollars)
ADDITIONS
Balance at Assets of
Beginning of Additions Company
Classification Year at Cost Acquired Retirements
Year ended
Feb. 28, 1994:
Land $ 23,362 $ 429 $ $ 0
Buildings 101,539 3,014 -340
Equipment 209,054 8,264 -5,953
Leased property
under capital
leases 5,419 318 -314
Construction in
progress 8,200 1,999 0
------- ------- ------- -------
$347,574 $14,024 $ 0 -6,607
======== ======= ======= ======
Year ended
Feb. 28, 1993:
Land $ 22,601 $ 11 $ $ 0
Buildings 107,777 1,776 -291
Equipment 153,969 9,595 -7,457
Leased property
under capital
leases 5,582 -66
Construction in
progress 62,886 5,175 -216
-------- ------- ------- -------
$352,815 $ 0 $ 0 $-8,030
======== ======== ======= =======
Year ended
Feb. 29, 1992:
Land $ 17,261 $ 68 $ 5,449 $ -15
Buildings 82,717 737 18,511 -631
Equipment 115,421 9,892 24,355 -2,577
Leased property
under capital
leases 5,082 459 --
Construction in
progress 51,634 20,255 206 92
------- ------- ------- -------
$272,115 $30,952 $48,980 $-3,131
======== ======= ======= =======
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT - PAGE 2
UNIVAR CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED FEBRUARY 28/29, 1994, 1993, and 1992
(Thousands of Dollars)
Other Changes - Add (Deduct)
Translation Balance at End
Classification Adj (1) Other of Year
Year ended
Feb. 28, 1994:
Land $ -428 $ -18 $ 23,345
Buildings -1,312 2,629 105,530
Equipment -3,389 2,216 210,192
Leased property
under capital
leases -42 18 5,399
Construction in
progress 0 - 4,304 5,895
------- ------- --------
$ 5,171 $ 541 $350,361
======= ======= ========
Year ended
Feb. 28, 1993:
Land $ -855 $ 1,605 (3) 23,362
Buildings -2,803 -4,920 (3) 101,539
Equipment -4,954 57,901 (2,3) 209,054
Leased property
under capital
leases -97 5,419
Construction in
progress -10 -59,635 8,200
-------- ------- --------
$ -8,719 $-5,049 $347,574
======== ======= ========
Year ended
Feb. 29, 1992:
Land $ -30 $ -132 (3)$ 22,601
Buildings 799 5,644 (2,3) 107,777
Equipment 1,226 5,652 (2,3) 153,969
Leased property
under capital
leases 41 5,582
Construction in
progress 19 -9,320 62,886
------- ------- --------
$ 2,055 $ 1,844 $352,815
======= ======= ========
(1) Foreign currency translation adjustments.
(2) Transfer from construction in progress.
(3) Reclassification to/from other asset accounts.
SCHEDULE VI -- ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT
AND EQUIPMENT
UNIVAR CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED FEBRUARY 28/29, 1994, 1993, and 1992
(Thousands of Dollars)
Balance at Additions
Beginning of Charged to
Classification Year Expense Retirements
Year ended
Feb. 28, 1994:
Buildings $ 31,767 $ 4,689 $ -62
Equipment 81,218 19,112 -4,796
Leased property
under capital
leases 2,194 273 -51
-------- ------- ------
$115,179 $24,074 $-4,909
======== ======= =======
Year ended
Feb. 28, 1993:
Buildings $ 26,862 $ 4,599 $ -55
Equipment 71,101 18,027 -6,668
Leased property
under capital
leases 1,976 234 --
-------- -------- -------
$ 99,929 $22,860 $-6,723
======== ======= =======
Year ended
Feb. 29, 1992:
Buildings $ 23,516 $ 4,037 $ -276
Equipment 57,216 12,106 -2,210
Leased property
under capital
leases 2,980 267 --
-------- ------- -------
$ 83,712 $16,410 $-2,486
======== ======= =======
SCHEDULE VI -- ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT
AND EQUIPMENT - Page Two
UNIVAR CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED FEBRUARY 28/29, 1994, 1993, and 1992
(Thousands of Dollars)
Other Changes - Add (Deduct)
Translation Balance at End
Classification Adj (1) Other of Year
Year ended
Feb. 28, 1994:
Buildings $ -312 $ -31 (2) $ 36,051
Equipment -1,026 208 (2) 94,716
Leased property
under capital
leases -22 -1 2,393
------- ------- --------
$-1,360 $ 176 (2) $133,160
======= ======= ========
Year ended
Feb. 28, 1993:
Buildings $ -258 $ 629 (2) $ 31,767
Equipment -822 -420 (2) 81,218
Leased property
under capital
leases -25 9 (2) 2,194
------- ------- --------
$-1,105 $ 218 (2) $115,179
======= ======= ========
Year ended
Feb. 29, 1992:
Buildings $ -84 $ -341 (2) $ 26,852
Equipment -131 4,120 (2) 71,101
Leased property
under capital
leases 4 -1,275 (2) 1,976
------- -------- --------
$ -211 $ 2,504 (2) $ 99,929
======= ======= ========
(1) Foreign currency translation adjustments.
(2) Reclassification to/from other asset accounts.
(3) The annual provisions for depreciation have been computed principally in
accordance with the following depreciable lives:
Buildings 10-50 Years
Equipment 3 - 40 Years
Leased property under capital leases Lesser of asset or lease life
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
UNIVAR CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED FEBRUARY 28/29, 1994, 1993, and 1992
(Thousands of Dollars)
Balance ADDITIONS Balance
at Charged to Charged to at
Beginning Costs and Other End of
Description of Year Expenses Accounts Deductions Year
Allowance for losses on receivables for the year ended:
February 28, 1994 $1,852 $2,294 $ 0 $2,298 (1) $1,848
====== ====== ===== ====== ======
February 28, 1993 $2,294 $1,800 $ 0 $2,242 (1) $1,852
====== ====== ===== ====== ======
February 29, 1992 $1,636 $2,462 $528 $2,332 (1) $2,294
====== ====== ==== ====== ======
(1) Uncollectible accounts written off, net of recoveries.
SCHEDULE IX - SHORT-TERM BORROWINGS
UNIVAR CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED FEBRUARY 28/29, 1994, 1993, and 1992
(Thousands of Dollars)
Maximum
Weighted Amount
Average Outstanding
Balance At Interest During the
Description End of Year Rate Year
Year ended February 28, 1994:
Payable to Banks (1) $23,331 4.2% $40,479
======= ==== =======
Year ended February 28, 1993:
Payable to Banks (1) $31,445 6.8% $53,103
======= ==== =======
Year ended February 29, 1992
Payable to Banks (1) $3,026 9.6% $51,134
====== ==== =======
Commercial Paper (2) $25,000 4.8% $25,000
======= ==== =======
(1) Notes payable to banks represent borrowings under line of credit
borrowing arrangements which generally have no termination date but
are reviewed annually for renewal.
(2) Commercial paper generally matures 30 - 90 days from date of issue
with no provisions for the extension of its maturity.
(3) The average amount outstanding during the period was computed by
totaling the average outstanding borrowings for each month and
dividing by 12.
(4) The weighted average interest rate during the period was computed
by dividing the actual interest expense by average short-term debt
outstanding.
SCHEDULE IX - SHORT-TERM BORROWINGS
UNIVAR CORPORATION AND SUBSIDIARIES - Page Two
FOR THE YEARS ENDED FEBRUARY 28/29, 1994, 1993, and 1992
(Thousands of Dollars)
Average Weighted
Amount Average
Outstanding Interest Rate
During the During
Description Year (3) the Year (4)
Year ended February 28, 1994:
Payable to Banks (1) $27,264 5.8%
======= ====
Year ended February 28, 1993:
Payable to Banks (1) $35,793 7.0%
======= ====
Year ended February 29, 1992
Payable to Banks (1) $30,491 7.7%
======= ====
Commercial Paper (2) $25,000 5.9%
======= ====
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.
UNIVAR CORPORATION
Date: May 27, 1994 /s/ James W. Bernard
James W. Bernard,
President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant in the capacities and on the dates indicated.
Date: May 27, 1994 /s/ Gary E. Pruitt
Gary E. Pruitt,
Vice President-Finance and Treasurer
(Principal Financial and Accounting Officer)
DIRECTORS
James W. Bernard
Richard E. Engebrecht
Curtis P. Lindley
Roger L. Kesseler
N. Stewart Rogers
Robert S. Rogers
Andrew V. Smith
William K. Street
Roy E. Wansik
Nicolaas J. Westdijk
James H. Wiborg
By: /s/ Willam A. Butler
William A. Butler, Attorney-in-Fact
Power of Attorney dated April 29, 1994
ARTHUR ANDERSEN & CO.
801 Second Avenue, Suite 800
Seattle, WA 98104
(206) 623-8023
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Univar Corporation:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements of Univar Corporation
and subsidiaries included in this Form 10-K, and have issued our
report thereon dated April 22, 1994. Our report on the consolidated
financial statements includes an explanatory paragraph with respect to
the change in the methods of accounting for income taxes and
postretirement benefits other than pensions in 1994 as discussed in
Notes 5 and 6 to the consolidated financial statements. Our audit was
made for the purpose of forming an opinion on those financial
statements taken as a whole. The schedules included in this Form 10-K
are presented for the purposes of complying with the Securities and
Exchange Commission rules and are not part of the basic consolidated
financial statements. We did not audit the financial statements of
the Corporation's wholly-owned Canadian subsidiary as of February 28,
1993, which statements reflect 16% of the 1993 consolidated assets and
15% and 14% of the 1993 and 1992 consolidated net revenues,
respectively. Those statements were audited by other auditors whose
report has been furnished to us and our opinion, insofar as it relates
to the amounts included for those entities, is based solely on the
report of the other auditors. These schedules have been subjected to
the auditing procedures applied in the audit of the basic consolidated
financial statements and, in our opinion, fairly state in all material
respects, the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a
whole.
Arthur Andersen & Co.
Seattle, Washington,
April 22, 1994
DELOITTE &
TOUCHE
Suite 2000 Telephone: (604) 669-4466
1055 Dunsmuir Street Facsimile: (604) 685-0395
P.O. Box 49279
Four Bentall Centre
Vancouver, British Columbia
V7X 1P4
AUDITORS REPORT
To the Shareholder,
Van Waters & Rogers Ltd.
We have audited the balance sheets of Van Waters & Rogers Ltd. as at
February 28, 1993 and the statements of income and retained earnings and
changes in financial position for the years ended February 28, 1993, and
1992. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in Canada. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at February 28, 1993
and 1992 and the results of its operations and the changes in its
financial position for the years ended February 28, 1993, and 1992 in
accordance with generally accepted accounting principles in Canada applied
on a consistent basis.
Deloitte & Touche
Chartered Accountants
Vancouver, British Columbia
April 14, 1993
EXHIBIT INDEX
EXHIBIT INDEX
Exhibit
Number Description
Exhibits identified in parentheses below, on file with the Securities and
Exchange Commission, are incorporated herein by reference as exhibits
hereto.
(3.1) Restated Certificate of Incorporation of the Registrant, as
amended August 21, 1987 (filed as Exhibit 3.1 to Form 10-K
dated May 22, 1989, File No. 1-5858).
(3.2) By-laws of the Registrant, as amended October 26, 1990.
(4.1) Certificate of Designation of Series A Junior Participating
Convertible Preferred Stock of Univar Corporation (filed as
Exhibit 4(ii) to Form 8-K dated May 13, 1994, File No. 1-5858)
(10.1)Univar Corporation 1979 Executive Stock Purchase Agreement, as
amended (filed with Registration Statement on Form S-3, File
No. 33-3933).
(10.2)1981 Stock Option Plan (filed with Registration Statement on
Form S-8, File No. 2-98329).
(10.3)Univar Corporation 1986 Long-Term Incentive Stock Plan (filed
with Registration Statement on Form S-8, File No. 33-34700).
(10.4)Agreement for Exchange of Capital Stock, dated as of September
19, 1986, (filed as Exhibit 2(i) to Form 8-K dated November 1,
1986, File No. 0-2754).
(10.5)Asset Purchase and Sale Agreement, dated as of September 19,
1986, (filed as Exhibit 2(ii) to Form 8-K dated November 1,
1986, File No. 0-2754).
(10.6)First Amendment to Asset Purchase and Sale Agreement, dated as
of October 21, 1986 (filed as Exhibit 2(iii) to Form 8-K dated
November 1, 1986, File No. 0-2754).
(10.7)Addendum to Asset Purchase and Sale Agreement, dated as of
October 31, 1986 (filed as Exhibit 2(iv) to Form 8-K dated
November 1, 1986 (File No. 0-2754).
(10.8)Standstill Agreement between Univar Corporation and Pakhoed
Investeringen B.V., dated as of September 19, 1986 (filed as
Exhibit 4(i) to Form 8-K dated November 1, 1986, File No. 0-
2754).
(10.9)Shareholder Agreements relating to change of control of the
Corporation with Messrs James W. Bernard; Richard E.
Engebrecht; M. M. Harris; Curtis P. Lindley; N. Stewart
Rogers; Nat S. Rogers; Robert S. Rogers; and James H. Wiborg,
dated as of September 19, 1986 (filed as Exhibit 4(ii) to Form
8-K dated November 1, 1986, File No. 0-2754).
(10.10) Univar Corporation Supplemental Benefits Plan, dated August
24, 1990 (filed as Exhibit 10.10 to Form 10-K, dated May 27,
1991, File No. 1-5858).
(10.11) Agreements relating to compensation in the event of a change
in control of the Corporation between the Corporation and
Messrs. James W. Bernard; James P. Alampi; James L. Fletcher;
and Bevan A. Cates, dated as of March 1, 1992 (filed as
Exhibit 10.11 to Form 10-K dated May 28, 1992, File No. 1-
5858).
10.12 Agreements relating to compensation in the event of a
change in control of the Corporation between the Corporation
and Mr. Paul H. Hough, dated as of August 21, 1992.
(10.13) Univar Corporation Stock Purchase Plan (filed with
Registration Statement on Form S-8, File No. 33-34697).
(10.14) Univar Corporation Uni$aver Tax Savings Investment Plan
(filed with Registration Statement on Form S-8, File No. 33-
34511).
(10.15) Van Waters & Rogers Ltd./Univar Corporation Stock Purchase
Plan (filed with Registration Statement on Form S-8, File No.
2-71255).
(10.16) Share Purchase Agreement by and between Univar Europe N.V.,
Univar Corporation, Pakhoed Investeringen B.V. and Kongsbo
Industrier AB dated May 31, 1991 (filed as Exhibit 2(ii)A to
Form 8-K, dated June 24, 1991, File No. 1-5858).
(10.17) Amendment Agreement by and between Univar Europe N.V.,
Univar Corporation, Pakhoed Investeringen B.V. and Kongsbo
Industrier AB dated June 28, 1991 (filed as Exhibit 2(ii)B to
Form 8-K dated June 24, 1991, File No. 1-5858).
(10.18) Second Amendment Agreement by and between Univar Europe
N.V., Univar Corporation, Pakhoed Investeringen B.V. and
Kongsbo Industrier AB dated August 30, 1991 (filed as Exhibit
10.18 to Form 10-K dated May 28, 1992, File No. 1-5858)..
(10.19) Shareholders Agreement between Univar Corporation, Pakhoed
Investeringen B.V. and Univar Europe N.V. dated as of June 27,
1991 (filed as Exhibit 2(iii) to Form 8-K dated June 24, 1991,
File No. 1-5858).
(10.21) Agreement on the Right of First Refusal - Univar Europe N.V.
by and between Univar Corporation and the Dow Chemical Company
dated as of June 24, 1991 (filed as Exhibit 2(iv) to Form 8-K
dated June 24, 1991, File No. 1-5858).
(10.24) Pre-emption Agreement between Univar Europe N.V., K&K Greeff
Limited and The Dow Chemical Company Limited dated as of June
24, 1991 (filed as Exhibit 2(v) to Form 8-K dated June 24,
1991, File No. 1-5858).
10.27 Univar Corporation 1992 Long-Term Incentive Plan as amended
and restated as of April 28, 1994 (filed as Exhibit 10.27 to
Form 10-K dated May 25, 1993, File No. 1-5858).
10.28 Van Waters and Rogers Ltd. Supplemental Benefits Plans
dated June 25, 1993.
(10.29) Amended and Restated Agreement of Purchase and Sale of stock
between Univar Corporation and The Dow Chemical Company dated
as of May 13, 1994 (filed as Exhibit 4i to Form 8-K dated May
13, 1994, file no. 1-5858.)
(10.30) Amended and Restated Standstill Agreement between
Univar Corporation and The Dow Chemical Company dated May 13,
1994 (filed as Exhibit 4(I) to Form 8-K dated May 13, 1994,
File No. 1-5858)
22 Subsidiaries of Registrant.
24.1 Consent of Independent Public Accountants - Arthur Andersen
& Co.
24.2 Consent of Independent Public Accountants - Deloitte &
Touche.
24.3 Consent of Independent Public Accountants - Arthur
Andersen & Co.
25 Power of Attorney
28.2 Form 11-K Annual Report for the Univar Corporation
Stock Purchase Plan.
28.3 Form 11-K Annual Report for the Univar Corporation
Uni$aver Tax Savings Investment Plan.
28.4 Form 11-K Annual Report for the Van Waters & Rogers
Ltd./Univar Corporation Stock Purchase Plan.
EXHIBIT 10.12
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made as of the 21st day of August, 1992
BETWEEN:
VAN WATERS & ROGERS LTD., a company duly incorporated under the laws
of the Province of British Columbia and having its registered and records
offices located at 2500 - 1055 Dunsmuir Street, Vancouver, B.C. V7X 1S8
(the "Corporation")
OF THE FIRST PART
AND:
PAUL H. HOUGH, of 1401 Kerfoot Road, White Rock, British Columbia,
V4B 3L5
(the "Executive")
OF THE SECOND PART
WHEREAS:
A. The Corporation is wholly owned and controlled by Univar
Corporation, a Delaware corporation (the "Parent");
B. The Executive is an employee of long service with the Corporation
and the Parent;
C. The Corporation and the Parent have recognized that the
possibility of a Change of Control (as hereinafter defined) exists and
that the threat or the occurrence of a Change of Control can result in
significant distractions of its key management personnel due to the
uncertainty inherent in such a situation;
D. The Corporation and the Parent have determined that it is
essential and in their best interests and the best interest of the
stockholders of the Parent to retain the services of the Executive in
the event of a threat or the occurrence of a Change of Control and to
ensure the continued dedication and efforts of the Executive in such
event without undue concern for his personal financial and employment
security; and
E. In order to induce the Executive to remain in the employ of the
Corporation, particularly in the event of a threat or the occurrence of
a Change of Control, the Corporation desires to enter into this
agreement with the Executive to provide the Executive with certain
benefits in the event his employment is terminated as a result of, or in
connection with, a Change of Control.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the
continued employment of the Executive by the Corporation and the mutual
covenants and agreements herein contained, the parties hereto agree each
with the other as follows:
1. CHANGE OF CONTROL
A reference herein to "Change of Control" shall mean the occurrence
during the term of this agreement of any of the following events:
(a) An acquisition (other than directly from the Parent) of any
voting securities of the Parent (the "Voting Securities") by a "Person"
or "Group" (as such terms are used for purposes of section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act")), immediately after which such Person or Group has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the 1934
Act) of more than fifty percent (50%) of the combined voting power of
the Parent's then outstanding Voting Securities;
(b) The board of directors (the "Board") of the Parent ceases
for any reason to have at least a majority of "Unaffiliated Directors"
(which shall be defined as all members of the Board except those who are
or were proposed for nomination as a member of the Board or otherwise
are "affiliated" or "associated" (as those terms are used for purposes
of Rule 12b-2 of the 1934 Act Regulations) with a Person which has
Beneficial Ownership of ten percent (10%) or more of the combined voting
power of the Parent;
(c) Approval by stockholders of the Parent of a merger,
consolidation or reorganization involving the Parent, unless:
(i) the stockholders of the Parent, immediately before
such merger, consolidation or reorganization, own, directly or
indirectly, immediately following such merger, consolidation or
reorganization, at least seventy-five percent (75%) of the combined
voting power of the outstanding voting securities of the corporation
resulting from such merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion as the
ownership of the Voting Securities immediately before such merger,
consolidation or reorganization, and
(ii) at least a majority of the members of the board of
directors of the Surviving Corporation are Unaffiliated Directors who
were directors of the Parent immediately prior to the execution of the
agreement providing for such merger or consolidation or reorganization;
(d) Approval by stockholders of the Parent of a complete
liquidation or dissolution of the Parent; and
(e) Notwithstanding anything contained in this agreement to the
contrary, if the Executive's employment is terminated during the term of
this agreement and the Executive reasonably demonstrates that such
termination:
(i) was at the request of a third party who has indicated
an intention to take or has taken steps reasonably calculated to effect
a Change of Control and who effectuates a Change of Control, or
(ii) otherwise occurred in connection with, or in
anticipation of, a Change of Control which actually occurs,
then for all purposes of this agreement, the date of a Change of Control
with respect to the Executive shall mean the date immediately prior to
the date of such termination of the Executive's employment.
2. TERMINATION OF EMPLOYMENT
For the purposes of this agreement, the phrase "termination of the
Executive's employment", or words of similar import, shall mean
resignation by the Executive or any other termination of the Executive
for any reason other than:
(i) cause (as hereinafter defined),
(ii) the Executive having reached the age of 65,
(iii) death, or
(iv) disability if such disability would have been covered
by the Parent's long term disability plan had the Executive been
eligible to receive benefits under such plan,
and "Termination Date" shall mean the effective date of the termination
of the Executive's employment.
3. CAUSE
For the purposes of this agreement, the term "cause" shall mean:
(i) continued failure by the Executive to perform his
duties (except as a direct result of the Executive's incapacity due to
physical or mental illness) for a period of at least six months after
receiving written notification by the Chief Executive Officer of the
Parent or an individual designated by the Chief Executive Officer of the
Parent identifying the manner in which the Executive has failed to
perform his duties, or
(ii) conduct of the Executive which, in the opinion of a
majority of the Board is materially injurious to the Corporation or the
Parent, or
(iii) the Executive's conviction of an indictable offense
or a summary conviction offense involving moral turpitude.
4. RETIRING ALLOWANCE
In the event of the termination of the Executive's employment on or
before twenty-four (24) months after a Change of Control, the
Corporation shall pay to the Executive an amount (the "Retiring
Allowance") in respect of the loss of such employment equal to one-
twelfth (1/12th) of the aggregate of his Annual Salary (as hereinafter
defined) and Target Incentive (as hereinafter defined) on the last day
of each and every month commencing with the first full month following
the month in which the Termination Date occurs and ending on the earlier
of the last day of the thirtieth (30th) month following the month in
which the Termination Date occurs and the last day of the month in which
the Executive either dies or reaches the age of sixty-five (65) years
(the "Compensation Period").
For the purposes of this agreement, the term "Annual Salary" shall mean
the Annual Salary being paid the Executive immediately before his
termination, determined prior to any deductions actually taken from
salary:
(a) For salary reductions or deferrals under any plan of the
Corporation or the Parent;
(b) for payment of employee benefits under any plan of the
Corporation or the Parent which were charged to the Executive; and
(c) for the purchase of stock under any plan of the Corporation
or the Parent.
The term "Target Incentive" shall mean the Target Incentive as
determined under the incentive plan last in effect for the Executive.
Notwithstanding any other provision in this paragraph, if the
Executive's Annual Salary and Target Incentive so determined is less
than the average of the Executive's gross compensation for the three
calendar years prior to the Executive's Termination Date, the Executive
shall be entitled to receive and the Corporation shall pay to the
Executive in the manner hereinbefore provided and throughout the
Compensation Period the greater of (i) such average annual gross
compensation or (ii) the aggregate of the Executive's Annual Salary and
Target Incentive. For the purposes hereof, the term "gross
compensation" shall mean compensation as reported in the Executive's
return of income under Part I of the Income Tax Act (Canada) (the "Act")
plus such of the amounts, if any, as are referred to in subparagraphs
(a),(b) and (c) of this paragraph as have not been reported in such
return of income of the Executive.
5. BENEFITS
Throughout the Compensation Period, the Executive shall continue to be
treated as an "employee" of the Corporation under all stock option,
purchase or acquisition plans in effect on the Termination Date;
however, no new stock option or purchase awards shall be granted to the
Executive after the Termination Date. In addition, the Executive, his
dependents, beneficiaries and/or estate shall continue to be entitled to
all benefits under medical, dental, life insurance and similar plans
(except for any disability plan) that are in effect on the Termination
Date. If by reason of law or government regulation or third party
contractual restriction, the Executive, his dependents, beneficiaries
and/or estate cannot receive or participate in such a benefit, the
Corporation or the Parent shall, to the extent necessary, pay or provide
for payment of such benefit to the Executive, his dependents,
beneficiaries and/or estate in the same amount and manner as they would
have been provided had the employment of the Executive with the
Corporation not been terminated. Notwithstanding the foregoing, if the
Executive is at any time employed by another employer during the
Compensation Period, the Corporation or the Parent shall not provide any
medical, dental, life insurance and similar benefit to the extent that
it is provided by the other employer.
6. TRANSFER TO RRSP
On the Termination Date, the independent accountants of the Corporation
shall make a determination as to the aggregate amount of the Retiring
Allowance that may be transferred to a registered retirement savings
plan ("RRSP") under which the Executive is an annuitant and which may be
deducted by the Executive in computing his income for a taxation year
under Part I of the Act (the "Eligible Amount"). The Executive may
elect by giving written notice to the Corporation within ten (10)
business days following the Termination Date to have such portion or all
of the Retiring Allowance as is equal to or does not exceed the Eligible
Amount transferred and paid directly by the Corporation, without
deduction, to an RRSP designated by the Executive and under which the
Executive is the annuitant. If such election is made, the Executive and
the Corporation agree that they will jointly execute such forms and
other documents as may be required to cause the Eligible Amount to be
transferred and paid to the RRSP and without deduction. In such event,
each and every monthly payment of the Retiring Allowance which is
required to be paid to the Executive under the terms of this agreement
shall be paid to the RRSP until the aggregate of such payments is equal
to the Eligible Amount and thereafter such payments shall be made to the
Executive and shall be subject to applicable deductions by the
Corporation.
7. DEATH OF THE EXECUTIVE
In the event of the death of the Executive during the Compensation
Period, the amount of the monthly Retiring Allowance payable in respect
of the month in which death occurs shall be paid to the Executive's
estate and the Compensation Period shall be deemed to have ended as of
the close of business on the last day of the month in which the death
occurred. Coverage of the Executive and any dependents under any plan
described in paragraph 5 hereof shall also end on such date. Nothing in
this section shall affect payments which are due and owing in respect of
the Executive's death.
8. NON-COMPETITION AND CONFIDENTIALITY
The Executive agrees that:
(a) the Corporation shall cease providing benefits as herein
provided and shall cease making payments in respect of the Retiring
Allowance (other than benefits or payments already owed or accrued) if,
during the Compensation Period, the Executive shall be employed by or
otherwise engaged or be interested in any business which is competitive
with any business of the Corporation or the Parent or of any affiliates
of the Corporation or the Parent in which the Executive was engaged
during his employment with the Corporation and if, but only if, such
employment or activity is likely to cause, or causes, serious damage to
the Corporation, the Parent or any of their affiliates; and
(b) during and after the Compensation Period, the Executive
will not divulge or appropriate to the Executive's own use or the use of
others any secret or confidential information or knowledge pertaining to
the business of the Corporation or the Parent or any of their
affiliates, obtained during his employment by the Corporation or the
Parent or any of their affiliates.
The Corporation has determined, in its best judgment, that the payments
to the Executive of the Retiring Allowance and benefits as herein
provided are reasonable consideration for requiring the Executive not to
compete as described above and for maintaining the confidentiality of
information as provided above.
9. TERMINATION
This agreement shall remain in effect until terminated by the
Corporation in accordance with the following provisions. This agreement
shall be automatically canceled on the date (the "Cancellation Date")
that is one year after the date the Corporation gives the Executive
written notice of cancellation; except that if a Change of Control
occurs prior to such Cancellation Date, this agreement shall remain in
effect with respect to all rights accruing as a result of the occurrence
of the Change of Control. This agreement shall terminate and have no
force or effect if the Executive's employment is terminated for any
reason prior to a Change of Control except in the circumstances
described in paragraph 1(e) hereof.
10. RELEASE
The Executive accepts the adequacy of the payments and benefits to be
made in his favour in the event of his loss of office due to a Change of
Control as herein contemplated and except as to the Executive's
entitlement to receive such payment and benefits the Executive does
hereby release and discharge the Corporation and the Parent from any and
all liability arising out of or in any way connected with the
termination of the Executive's employment in the circumstances herein
contemplated.
11. ARBITRATION
Should there be a disagreement or dispute between the parties hereto
with respect to this agreement or the interpretation thereof, the same
shall be referred to a single arbitrator pursuant to the Commercial
Arbitration Act (British Columbia) and the determination of such
arbitrator will be final and binding upon the parties hereto.
Submission to arbitration pursuant to the provisions of this paragraph
will be a condition precedent to the bringing of any action with respect
to such disagreement or dispute. In the event that is shall be
necessary or desirable for the Executive to retain legal counsel and/or
incur other costs and expenses in connection with the enforcement of any
and all of the Executive's rights under this agreement, the Corporation
shall pay the Executive's reasonable attorneys' fees and costs and
expenses in connection with the enforcement of his said rights
(including the enforcement of any arbitration award in court),
regardless of the final outcome, unless the arbitrators shall determine
that under the circumstances recovery by the Executive of all or part of
any such fees and costs and expenses would be unjust.
12. NOTICES
Any notices, requests, demands and other communications provided for by
this agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has
filed in writing with the Corporation or, in the case of the
Corporation, at its principal executive offices. Copies of any notice
sent to the Corporation shall also be sent in the same manner to the
Parent at its principal executive offices.
13. NON-ALIENATION
The Executive shall not have any right to pledge, hypothecate,
anticipate or in any way create a lien upon any amounts provided under
this agreement; and no benefits payable hereunder shall be assignable in
anticipation of payment either by voluntary or involuntary act or by
operation of law.
14. GOVERNING LAW
This agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the laws of Canada
applicable therein.
15. AMENDMENTS
This agreement may not be changed, waived or discharged orally but only
by an instrument in writing signed by the parties against which
enforcement of such change, waiver or discharge is sought.
16. ENUREMENT
This agreement shall extend to and be binding upon the Corporation, its
successor and assigns.
17. SEVERABILITY
In the event that any provision or portion of this agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this agreement shall be unaffected thereby and shall
remain in full force and effect and shall be severable from such invalid
or unenforceable provision.
18. HEADINGS
The headings of the sections in this agreement are solely for
convenience of reference and shall not control the meaning or
interpretation of any provision of this agreement.
IN WITNESS WHEREOF the parties hereto have executed this agreement this
5th day of October, 1992.
SIGNED, SEALED AND DELIVERED by )
PAUL H. HOUGH in the presence of)
)
/s/ David S. Pedlow )
David S. Pedlow )
Barrister & Solicitor ) /s/ PAUL H. HOUGH
2500-Four Bentall Centre )
1055 Dunsmuir Street )
P.O. Box 49290 )
Vancouver B.C. )
V7X 1S8 )
VAN WATERS & ROGERS LTD.
Per: /s/ R. Keith Yardley
Authorized Signatory
EXHIBIT 10.27
1992 LONG-TERM INCENTIVE PLAN
AS ADOPTED BY THE BOARD OF DIRECTORS OF
UNIVAR CORPORATION ON FEBRUARY 21, 1992
AND AMENDED AND RESTATED AS OF APRIL 28, 1994
1. Purpose of the Plan. The purpose of this 1992 Long-Term
Incentive Plan is to enhance the long-term performance of Univar
Corporation by rewarding key employees of the Company for the sustained
creation of incremental value for the Company's shareholders. The Plan
provides a means whereby Participants are given an opportunity to share
financially in this incremental value through Options and, under certain
circumstances, a Deferred Cash Incentive.
2. Definitions. As used herein, the following definitions
shall apply:
2.1 "Board" shall mean the Board of Directors of the
Company.
2.2 "Cause" shall mean (1) continued failure by a
Participant to perform his or her duties (except as a direct result of
the Participant's incapacity due to physical or mental illness) for a
period of at least six (6) months after receiving written notification
by the Chief Executive Officer or an individual designated by the Chief
Executive Officer (or the Board in the case of the Chief Executive
Officer) identifying the manner in which the Participant has failed to
perform his or her duties; (2) engaging in conduct, which, in the
opinion of a majority of the Board is materially injurious to the
Company; or (3) conviction of the Participant of a misdemeanor involving
moral turpitude or any felony.
2.3 "Change of Control" shall mean the occurrence of any
of the following events: (1) an acquisition (other than directly from
the Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" or "Group" (as such terms are used for
purposes of Section 13(d) or 14(d) of the Exchange Act) immediately
after which such Person has "Beneficial Ownership" (within the meaning
of Rule 13d-3 of the Exchange Act) of more than fifty percent (50%) of
the combined voting power of the Company's then outstanding voting
securities; (2) the Board ceases for any reason to have at least a
majority of "Unaffiliated Directors" (defined as all members of the
Board except those who are or were proposed for nomination as a member
of the Board by, or are otherwise "affiliated" or "associated" (as those
terms are used for purposes of Rule 12b-2 of the Exchange Act) with, a
person who has Beneficial Ownership of ten percent (10%) or more of the
combined voting power of the Company); or (3) approval by the
shareholders of the Company of (i) a merger, consolidation, or
reorganization involving the Company, unless either (a) the shareholders
of the Company immediately before such merger, consolidation, or
reorganization own, directly or indirectly immediately following such
merger, consolidation, or reorganization, at least seventy-five percent
(75%) of the combined voting power of the company resulting from such
merger, consolidation, or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership immediately
before such merger, consolidation, or reorganization, or (b) at least a
majority of the members of the Board of Directors of the Surviving
Corporation are Unaffiliated Directors who were directors of the Company
immediately prior to the execution of the agreement providing for such
merger, consolidation or reorganization, or (ii) a complete liquidation
or dissolution of the Company.
2.4 "Change of Control Transaction" shall mean a tender
offer, exchange offer, merger, consolidation, reorganization or other
transaction which may lead to a Change of Control.
2.5 "Code" shall mean the Internal Revenue Code of 1986,
as amended.
2.6 "Committee" shall mean the Compensation Committee
appointed by the Board.
2.7 "Common Stock" shall mean the common stock of Univar
Corporation.
2.8 "Company" shall mean Univar Corporation, a Delaware
corporation.
2.9 "Deferred Cash Incentive" shall mean an award of cash
made to a Participant pursuant to Section 9 below in an amount designed
to provide sufficient funds to cover the exercise price of the Options
plus the personal income taxes calculated at the Tax Rate attributable
to the receipt of such cash payments determined on a "grossed up" basis.
2.10 "Disability" shall mean a physical or mental
condition that prevents a Participant from performing his or her normal
duties of employment. If a Participant makes application for or is
otherwise eligible for disability benefits under the Company's long-term
disability program and qualifies for such benefits, the Participant
shall be presumed to have a "Disability" for purposes of the Plan. In
the absence of an applicable Company-sponsored long-term disability
program, a Participant shall be presumed to have a "Disability" for
purposes of the Plan if the Committee so determines upon review of one
or more medical opinions acceptable to the Committee.
2.11 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
2.12 "Fair Market Value" shall mean the closing price of a
company's common stock on a given day on the principal trading exchange
or national automated stock quotation system on which the common stock
is traded or quoted, or such other price as may be determined by the
Committee.
2.13 "Option" shall mean a stock option granted pursuant
to the Plan and evidenced by a written stock option agreement which
generally incorporates the terms and provisions of the Plan.
2.14 "Parent" shall mean a "parent corporation" of the
Company, whether now or hereafter existing, as defined in Section 424(e)
of the Code.
2.15 "Participant" shall mean any employee of the Company,
or of any Parent or Subsidiary of the Company, recommended by the Chief
Executive Officer of the Company and designated by the Committee to
participate in the Plan.
2.16 "Peer Group" shall mean a group of companies selected
from time to time by the Committee against which the Company's
performance will be compared for purposes of determining acceleration of
Option vesting under the Plan. The Peer Group shall be comprised of not
less than ten (10) companies on the last day of each Performance Cycle,
unless the Committee otherwise decides.
2.17 "Percentile Ranking" shall mean the Company's
percentile ranking in Total Shareholder Return relative to companies in
the Peer Group on the date on which Company performance is measured for
purposes of determining the accelerated vesting of Options granted under
the Plan. Such percentile ranking will be determined in accordance with
procedures approved by the Committee.
2.18 "Performance Cycle" shall mean, with respect to the
Company, or with respect to a particular member of the Peer Group, a
period of thirty-six (36) consecutive calendar months commencing on
March 1 of a specified year.
2.19 "Plan" shall mean this 1992 Long-Term Incentive Plan.
2.20 "Retirement" shall mean a Termination of Service in
accordance with the retirement provisions of the Company-sponsored tax
qualified defined benefit retirement plan (or any comparable plan in
effect for any Parent or Subsidiary of the Company which Parent or
Subsidiary is the Participant's employer) as in effect immediately prior
to the date of such Termination of Service, or, in the event such
retirement plan is discontinued, any tax qualified replacement plan that
is intended to serve a similar purpose, provided, in each such case, the
Participant must have attained 55 years of age and completed 10 years of
Service with the Company or with any Parent or Subsidiary for a
"Retirement" to have occurred for purposes of this Plan. In the absence
of such a plan, "Retirement" shall mean a voluntary Termination of
Service on or after the date the Participant attains 55 years of age,
provided the Participant then has 10 years of Service with the Company
or with any of its Parents or Subsidiaries.
2.21 "Securities Act" shall mean the Securities Act of
1933, as amended.
2.22 "Service" shall mean full-time, and part-time as
approved by the Committee, employment with the Company.
2.23 "Share" shall mean one share of Common Stock, as
adjusted in accordance with Section 15 of the Plan.
2.24 "Subsidiary" shall mean a "subsidiary corporation" of
the Company, whether now or hereafter existing, as defined in Section
424(f) of the Code.
2.25 "Tax Rate" shall mean the combined effective federal
and state income tax rate presumed to be in effect for a Participant
from time to time. The Committee shall establish the Tax Rate from time
to time. The Tax Rate may be a uniform rate for all Participants or may
be varied among the Participants.
2.26 "Termination of Service" means a termination of
Service from the Company, or any of its Parents or Subsidiaries, for any
reason, whether voluntary or involuntary, including death, Retirement,
and Disability.
2.27 "Total Shareholder Return" shall mean the compound
annual rate of return from investing in a company's common stock over a
Performance Cycle from both stock price appreciation and dividends and
other distributions provided to shareholders of such company during the
Performance Cycle. Total Shareholder Return for a company shall be
calculated by (a) assuming that one share of common stock of the company
is purchased on the first day of the Performance Cycle. Such stock will
be assumed to be purchased at a price equal to the average Fair Market
Value of the common stock for the thirty (30) trading days immediately
prior to the first day of the Performance Cycle; (b) assuming that
additional shares (or portions of shares) are purchased with any
dividends or other shareholder distributions on the initial share and on
shares accumulated through the assumed reinvestment of dividends and
other distributions, with such purchases being made on the "ex-date"
with respect to such payment or distribution at a price equal to the
Fair Market Value of the company's common stock on that date; (c)
calculating the number of shares of the company's common stock that
would be accumulated over the Performance Cycle, adjusting, as
necessary, for any stock splits or similar events; (d) multiplying the
number calculated in clause (c) by the average Fair Market Value of the
company's common stock for the thirty (30) trading days immediately
prior to the end of the Performance Cycle; and (e) determining the
annual compound rate of growth between the Fair Market Value determined
in clause (a) and the amount determined in clause (d).
3. Stock Subject to the Plan. Subject to the provisions of
Section 15 of the Plan, the maximum aggregate number of shares which may
be optioned and sold under the Plan is 1,500,000 shares of Common Stock.
Said number of Shares may be increased from time to time in accordance
with Section 18.1 below. The Shares may be authorized, but unissued, or
reacquired Common Stock.
If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares
which were subject thereto shall, unless the Plan shall have been
terminated, become available for future grant under the Plan.
4. Administration of the Plan.
4.1 Composition of Committee. The Plan shall be
administered by the Committee. The Committee shall at all times be
comprised of not less than two (2) directors. Each member of the
Committee shall be a "disinterested person" (as that term is defined in
Rule 16b-3(c)(2) promulgated by the Securities and Exchange Commission
pursuant to its authority under the Exchange Act). The Board may
increase the size of the Committee and appoint additional members
thereof, remove members with or without cause and appoint new members in
substitution therefor, fill vacancies however caused, or remove all
members of the Committee and thereafter directly administer the Plan.
4.2 Powers of the Committee. Subject to the provisions of
the Plan, the Committee shall have the authority, in its discretion; (i)
to determine, in accordance with Section 10.1 of the Plan, the Fair
Market Value of the Common Stock of the Company and the common stock of
the members of the Peer Group and the exercise price per share of
Options to be granted; (ii) to determine the Participants to whom, and
the time or times at which, Options shall be granted and the number of
Shares to be represented by each Option; (iii) to interpret the Plan;
(iv) to prescribe, amend, and rescind rules and regulations relating to
the Plan; (v) to determine the terms and provisions of each Option
granted (which need not be identical) and, with the consent of the
holder thereof, modify or amend each Option; (vi) to establish the time
or times at which the Option Shares may be purchased; (vii) to establish
criteria for accelerating the vesting of Options if certain events occur
or if certain relative Total Shareholder Return levels of the Company
are attained; (viii) to determine the Participants who shall receive
Deferred Cash Incentives and to award Deferred Cash Incentives; (ix) to
establish performance requirements and performance measures that
determine acceleration of Option vesting; (x) to verify such
performance; (xi) to accelerate or defer (with the consent of the
Participant) the exercise date of any Option; (xii) to authorize any
person to execute on behalf of the Company any instrument required to
effectuate the grant of an Option previously granted by the Committee or
the Board; (xiii) to make exceptions to the provisions of the Plan in
good faith and for the benefit of the Company; and (xiv) to make all
other determinations deemed necessary or advisable for the
administration of the Plan.
4.3 Adjustments for Extraordinary Events. If an event
occurs during a Performance Cycle that materially influences the Total
Shareholder Return of the Company or of a member of the Peer Group (or
any other performance measure used to determine Option vesting), and is
deemed by the Committee to be extraordinary and out of the control of
management, the Committee may, in its sole discretion, change the
relationship between performance and Option vesting.
4.4 Effect of Committee's and Board's Decision. All
decisions, determinations, and interpretations of the Committee and/or
the Board shall be final and binding on all Participants and any other
holders of any Options granted under the Plan.
5. Participation.
5.1 Participants. Participation in the Plan is limited to
key employees of the Company and of its Parents and Subsidiaries who, in
the opinion of the Committee, have the opportunity to materially
influence the Company's long-range performance. Potential Participants
will be recommended for participation by the Chief Executive Officer of
the Company and designated as Participants by the Committee. In
determining who shall participate in the Plan, the Committee shall take
into consideration an employee's salary grade, duties and past and
potential contributions to the success of the Company. New Participants
may be added to the Plan at any time at the discretion of the Committee.
5.2 Grants Discretionary; No Right to Continuing
Employment. The granting of any Option or Deferred Cash Incentive award
pursuant to this Plan shall be entirely in the discretion of the
Committee and nothing herein contained shall be construed to give any
person any right to participate under this Plan or to receive any
Option or Deferred Cash Incentive award under it. Nothing in the Plan
or any Option or Deferred Cash Incentive granted hereunder shall confer
upon any Participant any right with respect to continuation of
employment with the Company, nor shall it interfere in any way with the
Participant's right or the Company's right to terminate the employment
relationship at any time, with or without cause.
6. Option Agreements. Each Option shall be evidenced by a
written agreement. Each Option granted under this Plan shall be subject
to such amendment or modification from time to time as the Committee
shall deem necessary or appropriate to comply with or take advantage of
applicable laws or regulations and shall contain such provisions which
are consistent with the Plan as the Committee shall from time to time
approve.
7. Term of Option. The term of each Option shall be no more
than ten (10) years and three (3) months from the date of grant. Each
Option shall also specify the terms and conditions under which the
Option will terminate prior to said expiration date.
8. Vesting and Acceleration of Options.
8.1 Overview. Subject to the provisions of Section 5.2,
the Plan provides the opportunity for each Participant (a) to receive an
annual grant of Options, and (b) to have the vesting of granted Options
accelerated based on the Total Shareholder Return of the Company
relative to the Total Shareholder Return of the Peer Group. Certain
Participants designated by the Committee shall also have the right to
receive a Deferred Cash Incentive award.
8.2 Vesting Date if No Acceleration. In the event that
Options granted in accordance with the Plan do not qualify for
accelerated vesting in accordance with Section 8.3 below within ten (10)
years from their date of grant based on the Company's Total Shareholder
Return performance, such Options, or the previously unvested portion
thereof, will immediately become fully vested on the day after the tenth
(10th) anniversary of the date of grant.
8.3 Acceleration of Vesting Date. Acceleration of a
Participant's right to exercise Options granted under the Plan is
subject to the Company's Percentile Ranking. The initial performance
test will be based on Total Shareholder Return for the Company and for
the Peer Group over the Performance Cycle beginning on March 1, 1992.
Subsequent Performance Cycles for the Company and for each company in
the Peer Group will commence on each anniversary date of the initial
Performance Cycle for the Company and each Peer Group company, unless
otherwise specified by the Committee.
Based on the Company's Percentile Ranking, all or part of
each Option grant for which its initial Performance Cycle has been
completed may become available for exercise prior to its expiration
date. The portion of each such outstanding grant that may be exercised
at the end of a Performance Cycle will be based on the following table:
Percentage of Grant which Vests
(Based on Original Amount of Grant) Percentile Ranking
None Below the 40th%
20% 40th% and above but
below 50th%
33-1/3% 50th% and above but
below 60th%
50% 60th% and above but
below 70th%
75% 70th% and above but
below 80th%
100% 80th% and above
The number of Shares for which vesting shall be
accelerated shall be rounded to the nearest whole number of Shares.
Any portion of an Option grant which does not vest and
become available for exercise based on the initial performance test will
be subject to a new performance test at the end of each Performance
Cycle ending after the end of the initial Performance Cycle. These
subsequent tests will be based on the Company's Percentile Ranking for
each of the subsequent Performance Cycles.
EXAMPLE: Assume that an original Option grant dated March 1,
1992 totaled 1000 Shares and that 50% (500 Shares) of the grant became
available for exercise following the first Performance Cycle. If the Percentile
Ranking at the end of the second Performance Cycle is the 40th percentile, then
200 Shares of the original Option grant will vest and become exerciseable (1000
original Shares X .20). If the Percentile Ranking at the end of the third
Performance Cycle is the 60th percentile, then the 300 Share unexercised
balance of the original Option grant will become exerciseable (see also Section
8.4).
Except in the case of acceleration upon a Change of
Control as provided in Section 8.5, if all or a portion of such a grant
does become available for exercise prior to its expiration date, and if
the Participant has been granted the right to receive a Deferred Cash
Incentive award with respect to said Option, the Option shall be
exercised to the fullest extent exercisable as soon as possible, but no
later than fifteen (15) days following verification of the Company's
performance by the Committee. If the Participant has not been granted
the right to receive a Deferred Cash Incentive with respect to an Option
for which vesting has been accelerated, the vested portion of such
Option may be exercised by the Participant at any time prior to the
expiration date of the Option.
8.4 Supplemental Grants. In the event that the Company's
Total Shareholder Return performance for any Performance Cycle would
result in the vesting of more Options than remain in the grant to which
the performance test applies, the difference will be added to the
Participant's next regular annual grant, if one is awarded to him or
her. There shall be only one such supplemental grant with respect to
any one Option.
EXAMPLE: Assume the same Option grant and vesting
history as set forth in the Example in Section 8.3 above. As noted, the
Percentile Ranking at the end of the third Performance Cycle was the 60th
percentile, which would have allowed 50% of the original Option grant to vest
(1000 original Shares X .50). However, at that time, 700 of the original
Option Shares have vested and only 300 Option Shares are available for
exercise. In such an event, the Participant's next annual Option grant,
if any, would be supplemented by 200 Shares (500 Shares that would have
vested by reason of the Percentile Ranking at the end of
the third Performance Cycle minus the 300 Option Shares available). No
additional supplemental grants over and above those 200 Shares can be made
with respect to the March 1, 1992 grant.
8.5 Acceleration of Vesting upon Change of Control. Upon
a Change of Control of the Company, all unvested Options previously
granted under the Plan shall become immediately vested and available for
exercise. Such Options need not be exercised within fifteen (15) days
of such acceleration as would otherwise be the case pursuant to Section
8.3 above, and may be exercised by the Participant at any time prior to
the expiration of the Option.
In addition, any Deferred Cash Incentive associated with
such Options shall be immediately payable to the Participant independent
of whether the Participant exercises the Option associated with the
Deferred Cash Incentive.
Any Options, vested or unvested, may be exercised on a
conditional basis in the event of an announcement of a Change of Control
Transaction, provided no provision is made in such Change of Control
Transaction for the exercise, exchange, or surrender of Options, or
other procedure whereby the Participant may realize in cash the
difference between the exercise price and the fair market value of the
per share consideration to be received by holders of the Common Stock of
the Company. A conditional exercise shall be made by giving a written
notice of exercise to the Corporate Secretary of the Company. Any
Deferred Cash Incentive shall also be available on a conditional basis
and may be applied towards the satisfaction of the exercise price and
the withholding obligations set forth in Section 10.3. If the Change of
Control Transaction is cancelled or revoked, or otherwise does not
occur, or does not actually result in a Change of Control, the
conditional exercise of unvested Options and the conditional award of
any Deferred Cash Incentive attributable to unvested Options shall be
rescinded. The Participant may also rescind the conditional exercise of
any vested Options and the related Deferred Cash Incentive.
9. Deferred Cash Incentive.
9.1 Award Concept. Subject to the limitation in Sections
9.2 and 9.3 below, each annual Option grant may be accompanied by a
Deferred Cash Incentive award. Such an award will equal the cumulative
exercise price of the portion of the Option that becomes available for
exercise divided by the difference between 1.00 minus the Tax Rate. The
Deferred Cash Incentive shall be paid by the Company within fifteen (15)
days of the date the Option becomes exercisable.
EXAMPLE: If a Participant with a Tax Rate of 35% is entitled
to receive a Deferred Cash Incentive award and holds an Option for 1,000 Shares
at $10.00 per Share, and 500 of said Shares become exercisable, the Deferred
Cash Incentive payable to such Participant would be $7,692.31 (500 Shares times
$10.00 per Share divided by (1.00 minus .35))
The Committee shall designate those Participants who are
eligible to receive a Deferred Cash Incentive.
9.2 Requirement to Exercise Option . Except as is set
forth in Section 8.5, the payment of a Deferred Cash Incentive award to
those Participants designated by the Committee as eligible to receive
the award, is subject to the condition that the Participant has
previously exercised or simultaneously exercises the Option to which the
award applies.
9.3 Restriction on Award Availability. No Deferred Cash
Incentive award will be provided in connection with any portion of an
Option that becomes available for exercise without accelerated vesting
pursuant to Sections 8.3 or 8.5.
10. Exercises; Payment Mechanics; Withholding.
10.1 Exercise Price. The per Share exercise price under
each Option shall be such price as is determined by the Committee and
may be less than, equal to, or greater than the Fair Market Value per
Share on the date of grant.
10.2 Procedure for Exercise. The Option may not be
exercised for a fraction of a Share.
The Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option
and full payment for the Shares with respect to which the Option is
exercised has been received by the Company. A Participant may deliver
to the Company a "standing notice of exercise" which shall constitute,
until revoked by the Participant, the required notice of exercise for
any and all portions of the Options for which the right to exercise has
been accelerated other than pursuant to Section 8.5.
Payment of the purchase price provided in the Option
shall be made in cash, in shares of the Company's Common Stock owned by
the Participant, or in any combination of cash and Shares of the
Company's Common Stock. Shares used to pay the exercise price shall be
valued at their Fair Market Value on the exercise date. Payment may
also be made by delivering a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale proceeds necessary to pay the exercise price.
10.3 Withholding. Prior to issuance of the Shares upon
exercise of an Option, the Participant shall pay any federal, state, and
local withholding obligations of the Company, if applicable. If a
Deferred Cash Incentive is paid to a Participant in connection with an
Option exercise, the Participant may use such Deferred Cash Incentive to
apply towards the satisfaction of the withholding tax obligations on the
Deferred Cash Incentive itself and on the taxable aspect of the Option
exercise.
A Participant may also elect to pay all or part of such
withholding tax obligations by having the Company withhold Shares of
Common Stock having a value equal to the amount required to be withheld.
The value of the Shares to be withheld shall equal the Fair Market Value
of the Shares on the day the Option is exercised. If a Participant is
an "officer" of the Company within the meaning of Section 16 of the
Exchange Act, the following provisions shall apply to such elections:
(i) if a Participant has received multiple Options, a separate election
must be made for each Option; (ii) the election may be a "standing
election", i.e., upon making an election, a fixed date need not be set
for the exercise of the Option to which the election relates; (iii) the
election will be subject to the approval or disapproval of the Board,
which approval or disapproval may be given at any time after the
election to which it relates; (iv) the election may not be made within
six months following the date of grant of the Option to which it
relates; (v) the election must be made at least six months prior to the
day the Option is exercised, or both the election and exercise must be
made in the ten-day "window period" beginning on the third day following
the release of the Company's quarterly or annual summary statement of
sales and earnings; and (vi) an election may be revoked, or may be
reinstituted after a revocation, only upon six months' prior notice.
10.4 Accounting Requirements. The Committee may at any
time impose restrictions on the use of Shares for payment of the
exercise price pursuant to Section 10.2 or satisfaction of the
withholding tax obligation pursuant to Section 10.3 so as to avoid
adverse accounting treatment to the Company, including requiring that
Shares used must be beneficially owned for a minimum time period.
10.5 Effect of Exercise. Exercise of an Option in any
manner shall result in a decrease in the number of Shares which
thereafter may be available, both for purposes of the Plan and for sale
under the Options, by the number of Shares as to which the Option is
exercised.
11. Rights as Shareholder.
Until the issuance (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to
vote or receive dividends or any other rights as a shareholder shall
exist with respect to the optioned Shares, notwithstanding the exercise
of the Option, provided that in the event of a Change of Control or the
announcement of a Change of Control Transaction, a Participant shall
have all the rights set forth in Section 8.5 to conditionally exercise
Options and the Company may issue stock certificates on a conditional
basis to enable the Participant to exercise Options, tender shares or
otherwise realize the benefit of vested Options or Options which become
vested pursuant to Section 8.5. The Company shall issue (or cause to be
issued) such stock certificate promptly upon exercise of the Option.
12. Termination of Service.
12.1 Unvested Options. Unvested Options granted under the
Plan and any Deferred Cash Incentive opportunity associated with such
Options shall be immediately forfeited upon (a) any voluntary
Termination of Service except for reason of Retirement and (b) any
involuntary Termination of Service for reason of Cause.
In the event of a Termination of Service for reason of
(a) death, or (b) Disability, a portion of each unvested Option grant
then outstanding under the Plan and any Deferred Cash Incentive
opportunity associated with such Option may vest as provided in the
following sentence. The amount of each Option and related Deferred Cash
Incentive opportunity that will vest will be the excess, if any, of (i)
the original amount of the Option grant times the number of full years
that have elapsed since the date of the grant (up to a maximum of five
(5) years) times twenty percent (20%) over (ii) the amount of such
Option grant that has vested prior to such Termination of Service.
In the event of a Termination of Service for reason of
involuntary termination without Cause, all unvested Option grants then
outstanding under the Plan and any Deferred Cash Incentive opportunity
associated with such Options will vest at the quicker rate of either (1)
five equal annual installments beginning one (1) year from the date of
termination, or (2) the rate at which such Options would have vested
under this Plan based on the Total Shareholder Return of the Company
over the period after the Termination of Service.
A Termination of Service which occurs in connection with
the sale or disposition of a division, subsidiary or other business unit
shall be deemed to be an involuntary termination without Cause unless
the Committee specifically determines otherwise.
12.2 Vested Options. Upon Termination of Service except
for reason of Retirement, all vested Options not exercised within the
time limits set forth in this Plan (or an individual Option agreement)
for the exercise of vested Options shall be forfeited.
12.3 Special Rule Upon Retirement. In the event of a
Termination of Service due to Retirement, unvested Options granted in
accordance with the Plan and any Deferred Cash Incentive opportunity
associated with such Options will continue to vest according to their
original schedule and shall remain subject to annual performance tests
as if the Participant was still in the Service of the Company.
12.4 Designation of Beneficiaries. Each Participant shall
have the right at any time to designate any person or persons as
beneficiaries to whom any benefits provided under the Plan shall be made
in the event of Participant's death prior to the distribution of all
benefits due the Participant under the Plan. Each beneficiary
designation shall be effective only when filed in writing with the
Company during the Participant's lifetime, on a Beneficiary Designation
Form approved by the Committee. If a Participant designates more than
one beneficiary, distributions of cash awards and Option Shares due the
Participant under the Plan shall be made in equal proportions to each
beneficiary unless otherwise stated on the Beneficiary Designation Form.
The filing of a new Beneficiary Designation Form will
cancel all designations previously filed. Any finalized divorce or
marriage (other than a common law marriage) of a Participant subsequent
to the date of filing of a Beneficiary Form shall revoke such
designation, unless (i) in the case of divorce, the previous spouse was
not designated as beneficiary, and, (ii) in the case of marriage, the
Participant's new spouse had previously been designated as beneficiary.
The spouse of a married Participant shall join in any
designation of a beneficiary other than the spouse on a form prescribed
by the Committee.
If a Participant fails to designate a beneficiary as
provided for above, or if the beneficiary designation is revoked by
marriage, divorce, or otherwise without execution of a new designation,
then the Committee shall direct the distribution of Plan benefits to the
Participant's estate.
13. Extension of Exercise Dates. Notwithstanding subsections
12.1, 12.2 and 12.3 above, the Committee shall have the authority to
extend the expiration date of any outstanding Option in circumstances in
which it deems such action to be appropriate (provided that, for a
Participant who is an "officer" of the Company within the meaning of
Section 16 of the Exchange Act, each extension shall be for a period of
not less than six (6) months and one (1) day and, if such an extension
goes beyond the specified expiration date of the Option if no
Termination of Service had occurred, the expiration date of the Option
will also be extended to the minimum extent necessary to accommodate
said six (6) months and one (1) day period).
14. Non-Transferability of Options and Rights under the Plan.
The Options, any Deferred Cash Incentive award, and any other right
under the Plan, may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the
laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant, and, after his or
her death, by the representative of the Participant's estate. No person
shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage, or otherwise encumber, hypothecate, or convey in
advance of actual receipt, benefits, if any, payable under this Plan, or
any part thereof, or any interest therein, which are, and all rights to
which are, expressly declared to be unassignable and non-transferable.
No portion of the Plan's benefits shall, prior to actual payment, be
subject to seizure, attachment, lien or sequestration for the payment of
any debts, judgments, alimony, or separate maintenance owed by a
Participant or any other person, nor be transferable by operation of law
in the event of the Participant's or any other person's bankruptcy or
insolvency. Any such transfer or attempted transfer in violation of the
preceding provisions shall be considered null and void.
15. Adjustments Upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of shares
of Common Stock covered by each outstanding Option, and the number of
shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as
well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be
deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that
respect shall be final, binding, and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares of Common Stock subject to an
Option.
In the event of an extraordinary dividend or partial
liquidation, the Committee shall make an appropriate adjustment to the
Option exercise price so that the difference between the exercise price
and the Fair Market Value of the Common Stock after such distribution is
equivalent to the difference between the exercise price and the Fair
Market Value before such distribution. The Committee shall select a
representative period before and after the "ex-dividend date" for such
distribution for the purpose of determining the respective Fair Market
Value of the Common Stock.
16. Time of Granting Options. Except as may otherwise be
required to comply with legal or accounting requirements, the date of
grant of an Option shall, for all purposes, be the date on which the
Board makes the determination granting such Option.
17. Substitutions and Assumptions. The Board shall have the
right to substitute or assume Options in connection with mergers,
reorganizations, separations, or other transactions to which Section
424(a) of the Code applies, provided such substitutions and assumptions
are permitted by Section 424 of the Code and the regulations promulgated
thereunder. The number of Shares reserved pursuant to Section 3 may be
increased by the corresponding number of Options assumed and, in the
case of a substitution, by the net increase in the number of Shares
subject to Options before and after the substitution.
18. Amendment and Termination of the Plan.
18.1 Right to Amend and Terminate. The Committee may
amend or terminate the Plan from time to time in such respects as the
Committee may deem advisable; provided that the following revisions or
amendments shall require approval of or ratification by the shareholders
of the Company:
18.1.1 any increase in the number of Shares subject
to the Plan, other than in connection with an adjustment under Sections
15 or 17 of the Plan; or
18.1.2 if the Company has a class of equity
securities registered under Section 12 of the Exchange Act at the time
of such revision or amendment, any change which would require
stockholder approval pursuant to Rule 16b-3 promulgated by the
Securities and Exchange Commission pursuant to its authority under the
Exchange Act.
18.2 Effect of Amendment or Termination. Any such
amendment or termination of the Plan shall not affect Options already
granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated, unless mutually agreed
otherwise between the Participant and the Committee, which agreement
must be in writing and signed by the Participant and the Company.
19. Participants in Foreign Countries. The Committee shall
have the authority to adopt such modifications, procedures, and subplans
as may be necessary or desirable to comply with provisions of the laws
of foreign countries in which the Company or its Subsidiaries may
operate to assure the viability of the benefits from Options granted to
Participants employed in such countries and to meet the objectives of
the Plan.
20. Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of such
Option and the issuance and delivery of such Shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
21. Reservation of Shares. The Company, during the term of
this Plan, will at all times reserve and keep available such number of
shares as shall be sufficient to satisfy the requirements of the Plan.
22. Shareholder Approval. Continuance of the Plan is subject
to approval by the shareholders of the Company within twelve (12) months
after the date the Plan is adopted by the Board. Any Option granted
prior to the receipt of shareholder approval shall become null and void
if such approval is not received in accordance with the preceding
sentence.
23. Miscellaneous Provisions.
23.1 Unsecured Status of Claim. Participants and their
beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, interests or claims in any specific property or assets
of the Company. No assets of the Company shall be held under any trust
for the benefit of Participants, their beneficiaries, heirs, successors,
or assigns, or held in any way as collateral security for the
fulfillment of the Company's obligations under the Plan. The Company's
obligations under the Plan shall be merely that of an unfunded and
unsecured promise of the Company to pay benefits in the future.
23.2 Validity. In the event that any provision of the
Plan or any related Option is held to be invalid, void or unenforceable,
the same shall not affect, in any respect whatsoever, the validity of
any other provision of the Plan or any related Option.
23.3 Applicable Law. The Plan and any related Options
shall be governed in accordance with the laws of the state of
Washington.
23.4 Inurement of Rights and Obligations. The rights and
obligations under the Plan and any related Options shall inure to the
benefit of, and shall be binding upon the Company, its successors and
assigns, and the Participants and their beneficiaries, heirs,
successors, and assigns.
EXHIBIT 22
SUBSIDIARIES of REGISTRANT
As of March 1, 1993
The significant subsidiaries of the registrant, all wholly or majority
owned, are as follows:
Van Waters & Rogers Inc. (100% owned),
incorporated in July, 1986 under the laws of the State of
Washington.
Van Waters & Rogers Ltd. (100% owned),
incorporated in August, 1950 under the laws of British Columbia,
Canada.
Univar Europe N.V. (51% owned),
incorporated in December, 1990 under the laws of The Netherlands.
EXHIBIT 24.1
ARTHUR ANDERSEN & CO.
801 Second Avenue, Suite 800
Seattle, WA 98104
(206) 623-8023
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in this
Form 10-K of our reports dated April 22, 1994, included in Registration
Statement File Nos. 2-71255, 2-98329, 33-3933, 33-34511, 33-34697, 33-
34700, 33-48962. It should be noted that we have performed no audit
procedures subsequent to April 22, 1994, the date of our report, except
with respect to the transactions discussed in Note 12 to the
consolidated financials statements as to which the date is May 18, 1994.
Arthur Andersen & Co.
Seattle, Washington,
May 26, 1994
EXHIBIT 24.2
DELOITTE &
TOUCHE
Suite 2000 Telephone: (604) 669-4466
1055 Dunsmuir St. Facsimile:(604) 685-0395
P.O. Box 49279
Four Bentall Centre
Vancouver, British Columbia
V7X 1P4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Univar Corporation
As independent public accountants, we hereby consent to the
incorporation by reference in Form 10-K, of our report dated April 14,
1993, on the balance sheets of Van Waters & Rogers Ltd. as at February
28, 1993 and the statements of income and retained earnings and changes
in financial position for the years ended February 28, 1993 and 1992.
Deloitte & Touche
Vancouver, British Columbia Chartered Accountants
May 25, 1994
EXHIBIT 24.3
ARTHUR ANDERSEN & CO.
801 Second Avenue, Suite 800
Seattle, WA 98104
(206) 623-8023
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form 11-K of our report dated May 6,
1994, included in Registration Statement File No. 33-34511. It should
be noted that we have not audited any financials statements of the plan
subsequent to December 31, 1993 or performed any audit procedures
subsequent to the date of our report.
Arthur Andersen & Co.
Seattle, Washington,
May 26, 1994.
EXHIBIT 25
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James L. Fletcher, Gary E. Pruitt, and
William A. Butler, or any one of them, their attorneys-in-fact, for them
in any and all capacities, to sign the Annual Report on Form 10-K of
Univar Corporation for the fiscal year ended February 28, 1994, and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact, or their substitute or
substitutes, may do or cause to be done by virtue hereof.
Signature Title Date
/s/ James W. Bernard
James W. Bernard Director April 29, 1994
/s/ Richard E. Engebrecht
Richard E. Engebrecht Director April 29, 1994
/s/ Curtis P. Lindley
Curtis P. Lindley Director April 29, 1994
/s/ Roger L. Kesseler
Roger L. Kesseler Director April 29, 1994
/s/ N. Stewart Rogers
N. Stewart Rogers Director April 29, 1994
/s/ Robert S. Rogers
Robert S. Rogers Director April 29, 1994
/s/ Andrew V. Smith
Andrew V. Smith Director April 29, 1994
/s/ William K. Street
William K. Street Director April 29, 1994
/s/ Roy E. Wansik
Roy E. Wansik Director April 29, 1994
/s/ Nicolaas J. Westdijk
Nicolaas J. Westdijk Director April 29, 1994
/s/ James H. Wiborg
James H. Wiborg Director April 29, 1994
EXHIBIT 28.2
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20459
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(FEE REQUIRED)
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number 1-5858
UNIVAR CORPORATION
STOCK PURCHASE PLAN
__________________________
UNIVAR CORPORATION
____________________________________________________________
P.O. Box 34325
Seattle, Washington 98124-1325
__________________________________________________
ITEM 1. FINANCIAL STATEMENTS
The Plan has no financial statements. Reference is made to
Form S-8, Registration Statement, File No. 33-34697 for a
description of the Plan.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused
this annual report to be signed by the undersigned thereunto duly
authorized.
UNIVAR CORPORATION
STOCK PURCHASE PLAN
Date: May 27, 1994 By: /s/ Gary E. Pruitt
Gary E. Pruitt
Vice President - Finance & Treasurer
Administrator of the Plan
EXHIBIT 28.3
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(FEE REQUIRED)
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _______
Commission File Number 1-5858
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
___________________________________________________
UNIVAR CORPORATION
____________________________________________________________
P.O. Box 34325
Seattle, WA 98124-1325
________________________________________
ITEM 1. FINANCIAL STATEMENTS
See attached financial statements. Reference is made to
Form S-8, Registration Statement, File No. 33-34511 for a
description of the Plan.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
Date: May 27, 1994_____ By:______________________________________
Gary E. Pruitt
Vice President - Finance & Treasurer
Chairman of Administrative Committee
UNIVAR CORPORATION UNI$AVER TAX SAVINGS
INVESTMENT PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1993 AND 1992
TOGETHER WITH AUDITORS' REPORT
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Univar Corporation Uni$aver Tax
Savings Investment Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Univar Corporation Uni$aver Tax Savings Investment Plan as
of December 31, 1993 and 1992, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1993.
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 management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets of the Plan as of December 31, 1993
and 1992, and the changes in its net assets for the year ended December 31,
1993 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 and reportable transactions are presented for purposes
of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974 and are not a required part of the basic financial statements. Such
schedules have been subjected to the auditing procedures applied in the
audit 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.
Arthur Andersen & Co.
Seattle, Washington,
May 6, 1994
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1993 AND 1992
Company Stock Fund Fixed Income Fund
----------------------- ---------------------
1993 1992 1993 1992
---------------------------------------------
CASH AND SHORT TERM
INVESTMENTS $ 56,122 $ 239,145 $908,551 $ 3,734,482
INVESTMENTS (Note 3) 8,742,063 8,749,591 12,901,005 9,956,436
INTEREST AND DIVIDENDS RECEIVABLE - 729 1,513 86,299
CONTRIBUTIONS RECEIVABLE 188,257 167,018 115,621 115,194
PARTICIPANT LOANS RECEIVABLE
(Note 1) 27,589 - 415,119 -
PENDING INTERFUND TRANSFERS -127,069 -184,845 -451,213 -2,929
PAYABLE TO BROKER FOR PENDING
TRANSACTION - - - -
ACCRUED PLAN EXPENSES -15,067 - -15,066 -
OTHER 340 339 1,114 1,114
---------- --------------------- -----------
Net assets available
for plan benefits $8,872,235 $8,971,977$13,876,644 $13,890,596
========== ===================== ===========
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1993 AND 1992
CONTINUED
Balanced
Equity Fund Fund Total
1993 1992 1993 1993 1992
----------------------------------------------------
CASH AND SHORT TERM
INVESTMENTS $ 1,241,046 $ 6,837,043 $ 618,654 $ 2,824,373 $10,810,670
INVESTMENTS(Note 3) 14,821,182 6,375,113 1,245,425 37,709,675 25,081,140
INTEREST AND DIVIDENDS
RECEIVABLE 15,418 21,646 7,096 24,027 108,674
CONTRIBUTIONS
RECEIVABLE 203,380 151,897 36,711 543,969 434,109
PARTICIPANT LOANS
RECEIVABLE(Note 1) 156,559 - 69,766 669,033 -
PENDING INTERFUND
TRANSFERS 328,526 187,774 249,756 - -
PAYABLE TO BROKER FOR
PENDING TRANSACTION - -103,310 - - -103,310
ACCRUED PLAN EXPENSES -30,127 - -15,063 -75,323 -
OTHER 328 328 - 1,782 1,781
------------------------------------------------------
Net assets
available for
plan benefits $16,736,312 $13,470,491 $2,212,345 $41,697,536 $36,333,064
==========================================================
The accompanying notes are an integral part of these statements.
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
Company Fixed
Stock Income Equity Balanced
Fund Fund Fund Fund Total
NET INVESTMENT INCOME (LOSS):
Unrealized appreciation
(depreciation) of
investments(Note 3) $ -355,136 $ 7,667 $ 188,123 $ 41,291 $ -118,055
Interest 8,665 895,778 89,056 33,310 1,026,809
Dividends 230,696 - 202,963 4,186 437,845
Gain (loss) on sale of
investments 22,644 -3,459 1,022,374 -6,881 1,034,678
------------------------------------------------------
Total net investment
income (loss) -93,131 899,986 1,502,516 71,906 2,381,277
CONTRIBUTIONS TO THE PLAN (Note 1):
Employee 561,031 1,073,596 2,010,067 428,393 4,073,087
Employer 1,334,647 114,125 - - 1,448,772
------------------------------------------------------
Increase in net
assets 1,802,547 2,087,707 3,512,583 500,299 7,903,136
DISTRIBUTIONS TO PARTICIPANTS
(Note 4) -516,833 -859,886 -731,941 -37,868 -2,146,528
NET INTERFUND TRANSFERS -1,309,902 -1,157,579 644,967 1,822,514 -
PLAN EXPENSES -75,554 -84,194 -159,788 -72,600 -392,136
------------------------------------------------------
CHANGE IN NET ASSETS -99,742 -13,952 3,265,821 2,212,345 5,364,472
NET ASSETS, beginning
of year 8,971,977 13,890,596 13,470,491 - 36,333,064
------------------------------------------------------
NET ASSETS, end
of year $8,872,235 $13,876,644 $16,736,312 $2,212,345 $41,697,536
========== ===========================================
The accompanying notes are an integral part of this statement.
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
1. DESCRIPTION OF THE PLAN:
The Univar Corporation Uni$aver Tax Savings Investment Plan (the Plan) is a
contributory, defined contribution investment plan for all salaried
personnel. Union employees are also eligible, provided the union also
participates in Univar Corporation's (Univar) health insurance and pension
plans. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Employees may contribute from 2% to 16% of their compensation to the Plan up
to annual limits as described in the Plan. In 1992, Univar contributed 40%
of the first 6% of the employee's contributions. Effective January 1, 1993,
Univar contributes 50% of the first 6% of each employee's contributions,
which is the equivalent of 3.0% of the employee's gross income. Employee
contributions vest immediately, whereas Univar contributions vest at the
rate of 20% per year.
Employee contributions to the Plan are invested at the direction of the
participants in any of the following four funds: the Company Stock Fund,
the Fixed Income Fund, the Equity Fund and the Balanced Fund (collectively,
the Funds). The number of active participants in each fund as of
December 31, 1993, is 1,463, 956, 1,244 and 321, respectively. All employer
contributions are placed solely in the Company Stock Fund, although
participants age 50 or older have a one-time election to have their employer
contributions placed in the Fixed Income Fund.
Effective October 1, 1993, the Plan allows participants to borrow from the
vested portion of their employee contribution accounts, up to 50% of the
balance of those accounts. All loans have five year repayment terms.
As of January 1, 1993, trustee and administrative fees are paid by the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Plan uses the accrual basis of accounting. Investments are stated at
quoted market values. All fund investments are managed by a trustee at the
direction of the plan administrator and the administrative committee of the
Plan.
3. INVESTMENTS:
The Funds' assets are valued by the trustee (Wells Fargo Bank, N.A.) using
the closing price of the investments on the last business day of the
reporting period. A summary of unrealized appreciation (depreciation) is as
follows:
Company Fixed
Stock Income Equity Balanced
Fund Fund Fund Fund Total
Unrealized appreciation
December 31, 1992 $1,855,794 $ -7,667 $1,198,923 $ - $3,047,050
Net increase (decrease)
during the year -355,136 7,667 188,123 41,291 -118,055
----------------------------------------------------------
Unrealized appreciation
(depreciation)
December 31, 1993 $1,500,658 $ - $1,387,046 $41,291 $2,928,995
==========================================================
Individual investments that represent 5% or more of the net assets available
for plan benefits as of December 31, 1993 and 1992, are listed as follows:
Number of
Shares of
Current
Principle Value Value
1993:
Wells Fargo Bank Money Market Fund 2,372,798 $2,372,798
Univar Corporation Common Stock 768,533 8,742,063
New York Life Insurance Co.,
GIC #GA-06108, 8.38%
due September 30, 1996 3,795,663 3,795,663
Provident Life & Accident Insurance,
GIC #627-05496, 5.4%, due 3/31/98 2,589,712 2,589,712
1992:
Fidelity Short-Term Investment Fund 8,711,597 8,711,597
Univar Corporation Common Stock 752,653 8,749,591
Metropolitan Life Insurance Co.,
GIC #GAC-12263, 7.86%
due September 30, 1994 2,298,472 2,298,472
New York Life Insurance Co.,
GIC #GA-06108,8.38%,
due September 30, 1996 3,478,449 3,478,449
4. DISTRIBUTIONS TO PARTICIPANTS:
Participants are entitled to their vested benefits upon termination from the
Plan. At the end of each plan year, unvested contributions are forfeited
for all terminated employees and are used to reduce future employer
contributions; however, if a participant re-enters the Plan within five
years subsequent to termination, and if the participant repays within that
same period the exact amount of benefits received attributable to employer
contributions, the amount of any unvested benefits at the participant's
original termination date is contributed to their account. At December 31,
1993 and 1992, there were $14,592 and $14,010 of unvested contributions
related to terminated employees, respectively.
5. FEDERAL INCOME TAXES:
The Plan was amended on January 1, 1993, to incorporate the changes
discussed in Note 1. Although no determination letter has been received
from the Internal Revenue Service regarding the most recent amendment,
Univar's management and the Plan's third-party administrator feel that the
Plan, as amended and operated, is in compliance with the applicable
requirements of the Internal Revenue Code for tax-exempt status. Prior to
the most recent amendment, the Plan had received a favorable IRS
determination letter and has been exempt from federal income taxes.
Accordingly, no provision for income taxes has been made.
6. PLAN TERMINATION:
Although it has not expressed any intent to do so, Univar has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination or partial termination, participants will have a nonforfeitable
interest in the vested portion of their account balance.
7. BENEFITS PAYABLE:
In accordance with generally accepted accounting principles for employee
benefit plans, the Plan classifies benefits owed to vested, terminated
participants as a component of net assets available for plan benefits rather
than as a liability. A summary of these amounts is as follows:
Company Fixed
Stock Income Equity Balanced
Fund Fund Fund Fund Total
December 31, 1992 $ 1,930 $ 5,847 $ 2,007 $ - $ 9,784
December 31, 1993 94,712 80,459 136,697 6,421 318,289
These benefits payable are classified as a liability in the Plan's Form 5500
filed with the Internal Revenue Service and the Department of Labor. The
following table reconciles the accompanying financial statements to the Form
5500:
Net Net
Assets Available Assets Available
for Plan Benefits 1993 for Plan Benefits
December 31, 1993 Benefits December 31, 1992
Company Stock Fund:
As reported in Form
5500 $ 8,777,523 $ 609,615 $ 8,970,047
1992 benefits payable - 1,930 1,930
1993 benefits payable 94,712 -94,712 -
----------- ---------- -----------
As reported in the
accompanying financial
statements 8,872,235 516,833 8,971,977
----------- ---------- -----------
Fixed Income Fund:
As reported in Form 5500 13,796,185 934,498 13,884,749
1992 benefits payable - 5,847 5,847
1993 benefits payable 80,459 -80,459 -
----------- ---------- -----------
As reported in the
accompanying financial
statements 13,876,644 859,886 13,890,596
----------- ---------- -----------
Equity Fund:
As reported in Form 5500 16,599,615 866,631 13,468,484
1992 benefits payable - 2,007 2,007
1993 benefits payable 136,697 -136,697 -
---------- ---------- -----------
As reported in the
accompanying financial
statements 16,736,312 731,941 13,470,491
----------- ---------- -----------
Balanced Fund:
As reported in Form 5500 2,205,924 44,289 -
1992 benefits payable - - -
1993 benefits payable 6,421 -6,421 -
----------- --------- -----------
As reported in the
accompanying financial
statements 2,212,345 37,868 -
----------- --------- -----------
Total
As reported in Form 5500 41,379,247 2,455,033 36,323,280
1992 benefits payable - 9,784 9,784
1993 benefits payable 318,289 -318,289 -
----------- ---------- -----------
As reported in the
accompanying financial
statements $41,697,536 $2,146,528 $36,333,064
=========== ========== ===========
SCHEDULE 1
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX I.D. NUMBER 91-0816142)
ITEM 27a
SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1993
Number of
Shares or Company Stock Fund
Principal
Issuer Description Amount Cost Current Value
- - --------------------------------------------------------------------------------
Cash and short term investments - $ 681 $ 681
Wells Fargo Bank Money Market Fund - 55,441 55,441
Various commercial paper (see
Schedule 1 - Exhibit 1) $400,000 - -
---------- ----------
Total cash and short term
investments 56,122 56,122
Univar Corp. Common Stock 768,533 7,241,405 8,742,063
Various Common Stock (see
Schedule 1 - Exhibit 2) 408,766 - -
U.S. Government Securities
(see Schedule 1 - Exhibit 3) $1,330,000 - -
Various Certificates of
Annuity (see Schedule 1 -
Exhibit 4) - -
---------- ----------
Total investments 7,241,405 8,742,063
Loans to participants 27,589 27,589
---------- ----------
$7,325,116 $8,825,774
========== ==========
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX I.D. NUMBER 91-0816142)
ITEM 27a
SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1993
(Continued)
Fixed Income Fund Equity Fund
Issuer Description Cost Current Value Cost Current Value
- - ----------------------- -------------------------- ------------------------
Cash and short term
investments $-12,015 $-12,015 $ 63,086 $ 63,086
Wells Fargo Bank
Money Market Fund 520,566 520,566 1,177,960 1,177,960
Various commercial paper (see
Schedule 1 - Exhibit 1) 400,000 400,000 - -
---------- --------- --------- ---------
Total cash and short term
investments 908,551 908,551 1,241,046 1,241,046
Univar Corp. Common Stock - - - -
Various Common Stock (see
Schedule 1 - Exhibit 2) - - 13,434,136 14,821,182
U.S. Government Securities
(see Schedule 1 - Exhibit 3) 992,207 992,207 - -
Various Certificates of
Annuity (see Schedule 1 -
Exhibit 4) 11,908,798 11,908,798 - -
---------- ---------- ----------- ----------
Total investments 12,901,005 12,901,005 13,434,136 14,821,182
Loans to participants 415,119 415,119 156,559 156,559
----------- ----------- ------------ ---------
$14,224,67 $14,224,675 $14,831,741 $16,218,787
=========== =========== =========== ==========
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX I.D. NUMBER 91-0816142)
ITEM 27a
SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1993
(Continued)
Balanced Fund Total
Issuer Description Cost Current Value Cost Current Value
- - ------------------ --------- ----------- ------- --------------
Cash and short term
investments $ -177 $ -177 $ 51,575 $ 51,575
Wells Fargo Bank Money
Market Fund 618,831 618,831 2,372,798 2,372,798
Various commercial paper (see
Schedule 1 - Exhibit 1) - - 400,000 400,000
--------- --------- ---------- ----------
Total cash and short
term investments 618,654 618,654 2,824,373 2,824,373
Univar Corp. Common Stock - - 7,241,405 8,742,063
Various Common Stock (see
Schedule 1 - Exhibit 2) 804,374 850,175 14,238,510 15,671,357
U.S. Government Securities
(see Schedule 1 -
Exhibit 3) 399,760 395,250 1,391,967 1,387,457
Various Certificates of
Annuity (see Schedule 1 -
Exhibit 4) - - 11,908,798 11,908,798
--------- ---------- ----------- -----------
Total investments 1,204,134 1,245,425 34,780,680 37,709,675
Loans to participants 69,766 69,766 669,033 669,033
---------- ---------- ----------- -----------
$1,892,554 $1,933,845 $38,274,086 $41,203,081
========== ========== =========== ===========
SCHEDULE 1 - EXHIBIT 1
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
COMMERCIAL PAPER
DECEMBER 31, 1993
Current
Principal Market
Issuer Amount Cost Value
Chevron Companies
3.12%, due June 2, 1994 $100,000 $100,000 $100,000
Cigna Corp.
3.125%, due June 9, 1994 100,000 100,000 100,000
John Deere CAP
3.20%, due March 31, 1994 200,000 200,000 200,000
-------- -------- --------
Total Commercial Paper $400,000 $400,000 $400,000
======== ======== ========
SCHEDULE 1 - EXHIBIT 2
Page 1 of 6
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
COMMON STOCK
DECEMBER 31, 1993
Per Share Total
Total Market Market
Issuer Shares Cost Value Value
Albertsons, Inc. 3,600 $ 91,736 $ 26.750 $ 96,300
Ambac, Inc. 1,100 52,992 42.000 46,200
American Cyananid Co. 1,500 83,153 50.250 75,375
American Int'l Group Inc. 2,500 162,502 87.250 219,375
American Telephone &
Telegraph 2,500 98,206 52.500 131,250
AmoCo Corp. 1,000 50,060 52.875 52,875
Applied Matls, Inc. 3,900 109,788 38.750 151,125
Armstrong World Inds. Inc. 1,000 45,320 53.250 53,250
Autodesk, Inc. 1,500 62,612 45.000 67,500
Automatic Data Processing 1,700 88,930 55.250 93,925
Autozone, Inc. 4,600 194,112 57.250 263,350
Bank New York, Inc. 1,100 61,127 57.000 62,700
Belo A.H. Corp CLA 1,500 68,355 53.000 79,500
Blockbuster Entertainmen 2,700 87,140 30.625 82,687
Borg-Warner Automotive, Inc. 2,700 67,500 28.000 75,600
Brinker Int'l. Inc. 2,500 87,310 46.000 115,000
Browning Ferris Ind. Inc. 3,000 70,222 25.750 77,250
Cabletron Systems, Inc. 1,250 121,628 112.500 140,625
Campbell Soup Co. 2,000 82,508 41.000 82,000
Caterpillar, Inc. 900 77,995 89.000 80,100
Century Tel. Enterprises 3,000 84,190 25.750 77,250
Chevron Corp. 1,700 157,734 87.125 148,112
Chrysler Corp 1,800 81,961 53.250 95,850
Circus Circus Enterprises 3,800 127,644 36.750 139,650
Cisco Systems, Inc. 3,800 195,428 64.625 245,576
Citizens Corp. 2,500 57,040 19.625 49,063
SCHEDULE 1 - EXHIBIT 2
Page 2 of 6
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
COMMON STOCK
DECEMBER 31, 1993
Per Share Total
Total Market Market
Issuer Shares Cost Value Value
CML Group, Inc. 1,500 40,215 23.625 35,437
Coca Cola Co. 2,200 94,434 44.625 98,175
Compuware Corp. 2,000 54,000 26.000 52,000
Comsat Corp Ser 1 3,900 119,905 29.750 116,025
Cone MLS Corp NC 5,000 82,175 16.875 84,375
Crane Co. 3,000 75,585 24.750 74,250
CUC Int'l Inc. 2,600 87,611 36.000 93,600
Cummins Engine Inc. 1,600 71,206 53.750 86,000
Dean Witter Discover & Co. 3,400 130,250 34.625 117,725
Dillard Dept Stores, Inc. 3,300 135,100 38.000 125,400
Englehard Corp. 2,000 57,686 24.375 48,750
Enron Corp 9,600 280,559 29.000 278,400
Entergy Corp New 5,000 127,800 36.000 180,000
Federal Home Ln Mtg. Corp 1,500 84,033 49.875 74,813
Federal Nt'l Mtg. Assn 3,850 308,798 78.500 302,225
Fingerhut Co's Inc. 5,000 117,850 28.125 140,625
First Comm Corp 2,500 61,625 25.125 62,812
First Data Corp 3,900 138,239 40.750 158,925
First Tenn Nat'l Corp. 3,000 105,750 38.500 115,500
First USA Inc. 1,200 37,909 35.750 42,900
Ford Motor Co., Del 1,000 54,070 64.500 64,500
Foundation Health Corp 1,800 55,476 31.000 55,800
Franklin Res, Inc. 900 41,962 45.873 41,287
Gannett Inc. Del 1,500 68,355 57.250 85,875
General Instr Corp New 1,700 87,726 56.500 96,050
General Public Utilities 3,000 98,835 30.875 92,625
SCHEDULE 1 - EXHIBIT 2
Page 3 of 6
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
COMMON STOCK
DECEMBER 31, 1993
Per Share Total
Total Market Market
Issuer Shares Cost Value Value
Gillette Company 800 46,252 59.625 47,701
Great Lakes Chemical Corp. 2,400 183,557 74.625 179,100
GTE Corp. 2,000 47,933 35.000 70,000
Harcourt Gen. Inc. 2,500 82,537 36.250 90,625
Hasbro Inc. 1,900 63,764 36.250 68,875
Home Depot, Inc. 8,566 397,001 39.500 338,357
Houghton Mifflin Co. 2,000 70,390 48.625 97,250
Household, Int'l Inc. 3,000 96,855 32.625 97,875
IBP Inc. 4,500 95,720 25.875 116,437
Illinois Cent Corp. Ser A 2,500 62,362 35.875 89,688
Intel Corp 6,000 286,443 62.000 372,000
International Game
Technology 5,500 177,403 29.500 162,250
Justin Inds. Inc. 3,000 57,000 14.750 44,250
Kerr McGee Corp 2,500 114,478 45.250 113,125
KeyCorp 2,500 94,853 35.375 88,438
Lincoln Nat'l Corp Ind. 1,500 69,543 43.500 65,250
Louisiana Ltd. & Expl. Co. 4,000 178,780 40.125 160,500
Manor Care Inc. 6,000 109,920 24.375 146,250
MBIA Inc. 1,900 124,508 62.875 119,462
MBNA Corp 4,100 117,737 33.375 136,838
McGraw Hill Inc. 1,500 98,917 67.625 101,437
MCI Communications Corp 10,800 258,367 28.250 305,100
Media Vision Technology Inc. 1,900 54,863 43.750 83,125
Medicine Shoppe Int'l Inc. 2,500 53,438 19.500 48,750
Mercury Fin Co. 2,100 36,067 19.125 40,162
MGR Inut Corp. WIS 2,400 77,610 29.250 70,200
SCHEDULE 1 - EXHIBIT 2
Page 4 of 6
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
COMMON STOCK
DECEMBER 31, 1993
Per Share Total
Total Market Market
Issuer Shares Cost Value Value
Microsoft Corp 3,500 305,489 80.625 282,187
Mobil Corp. 2,700 193,681 79.125 213,637
Motorola Inc. 5,400 376,565 92.250 498,150
Nationwide Health PPTYS, 3,200 48,400 35.500 113,600
Newbridge Networks Corp 2,150 105,730 54.750 117,712
Northwest Corporation 3,000 75,292 24.375 73,125
Novacare Inc. 5,000 69,830 15.250 76,250
Novell Inc. 2,000 62,000 20.750 41,500
Office Depot Inc. 2,600 84,981 33.625 87,425
Oracle Sys Corp. 5,900 163,224 28.750 169,625
Pacific Gas & Elec. Co. 4,000 137,184 35.125 140,500
Pactel Corp 3,200 73,600 24.875 79,600
Penney, J.C., Inc. 1,600 60,656 52.625 84,200
Pepsico Inc. 2,000 69,714 40.875 81,750
Perrigo Co. 1,300 40,300 34.250 44,525
Pet Inc. New 4,000 63,280 17.500 70,000
Phillips Pete Co. 1,500 42,105 29.000 43,500
Phoenix RE Corp. 2,000 62,500 27.250 54,500
Praxair Inc. 4,000 62,260 16.625 66,500
Proctor & Gamble Co. 2,000 98,390 57.000 114,000
Promus Cos Inc. 6,300 183,918 45.750 288,224
Pyramid Technology Corp. 2,500 45,938 14.750 36,875
Safeco Corp. 1,500 94,969 55.000 82,500
SantaFe Pacific Corp. 6,000 75,390 22.250 133,500
Schering Plough Corp. 1,000 51,406 68.500 68,500
Scientific Atlanta Inc. 2,200 70,596 33.500 73,700
Sensormatic Electrs Corp. 2,700 70,011 34.625 93,487
SCHEDULE 1 - EXHIBIT 2
Page 5 of 6
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
COMMON STOCK
DECEMBER 31, 1993
Per Share Total
Total Market Market
Issuer Shares Cost Value Value
Sequent Computer Systs Inc. 3,000 47,654 15.250 45,750
Southwest Airlines Co. 5,600 183,187 37.375 209,301
St. Paul Cos. Inc. 900 82,863 89.875 80,888
Standard Fed. Bk Troy, Mich 200 4,439 30.000 6,000
Sun Healthcare Group Inc. 7,000 77,000 16.750 117,250
Sunbeam-Oster Inc. 4,000 59,012 22.000 88,000
Supervalu Inc. 1,800 59,058 36.250 65,250
Tecumseh Prods Co. CLA 2,000 71,500 46.250 92,500
Telecommunications Inc. CLA 2,700 64,425 30.250 81,675
Thermo Electron Corp. 3,450 96,749 42.000 144,900
Time Warner Inc. 2,500 95,679 44.250 110,625
TJ Int'l Inc. 1,300 37,531 30.250 39,325
TNT Freightways Corp 3,900 63,830 27.000 105,300
Triarc Cos Inc. CLA 300 7,556 25.000 7,500
U.S. Healthcare Inc. 5,600 296,950 57.625 322,701
U S WEST, Inc. 3,500 163,429 45.875 160,563
Union Carbide Corp 3,000 60,180 22.375 67,125
United Asset Mgt Corp. 800 37,126 40.500 32,400
United Healthcare Corp. 3,300 201,656 75.875 250,388
WalMart Stores Inc. 13,800 417,626 25.000 345,000
Weyerhaeuser Co. 2,000 84,640 44.625 89,250
Whirlpool Corp. 1,200 71,784 66.500 79,800
Williams Cos Inc. Del 4,000 76,074 24.375 97,500
Xyplex Inc. 4,000 114,859 19.250 77,000
3 Com Corp 2,000 67,250 47.000 94,000
------- ----------- -----------
Total Common Stock 388,566 $13,470,115 $14,817,670
======= =========== ===========
SCHEDULE 1 - EXHIBIT 2
Page 6 of 6
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
FOREIGN STOCKS
DECEMBER 31, 1993
Per Share Total
Total Market Market
Issuer Shares Cost Value Value
Carnival Cruise Lines Inc. 1,500 $ 70,921 47.375 $ 71,062
Danka Business Sys Sponsrd ADR 600 19,500 40.000 24,000
Elan PLC ADR 1,000 41,184 42.375 42,375
Ericson Lm Tel ADR CLB Sekio 4,200 210,338 40.375 169,575
Grupo Televisa ADR Repstg ORD 1,000 64,000 70.000 70,000
Grupo Tribasa SA Sponsored ADR 2,300 36,084 34.625 79,638
Hong Kong Telecommunications ADR 1,800 79,600 62.250 112,050
Loewen Group Inc. 3,300 73,974 25.375 83,737
McDermott Int'l Inc. 2,500 67,820 26.500 66,250
Telefonos De Mexico ADR Rep L 2,000 104,974 67.500 135,000
-------- ---------- -----------
Total Foreign Stocks 20,200 $ 768,395 $ 853,687
-------- ---------- -----------
Total Corporate Stocks 408,766 $14,238,510 $15,671,357
======= =========== ===========
SCHEDULE 1 - EXHIBIT 3
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
U.S. GOVERNMENT SECURITIES
DECEMBER 31, 1993
Current
Issuer Principal Market
Description Amount Cost Value
Federal Home Loan Bank Disc. $ 500,000 $ 496,125 $ 496,125
Federal Home Loan Mortgage Disc. 500,000 496,082 496,082
U.S. Treasury Bonds
9.875% due 11/15/15 100,000 140,240 138,750
U.S. Treasury Notes
7.50% due 11/15/01 80,000 89,833 89,250
U.S. Treasury Notes
8.125% due 02/15/98 150,000 169,687 167,250
---------- ---------- ----------
$1,330,000 $1,391,967 $1,387,457
========== ========== ==========
SCHEDULE 1 - EXHIBIT 4
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
CERTIFICATES OF ANNUITY
DECEMBER 31, 1993
Issuer Market
Description Cost Value
Confederation Life, GIC #62127
9.18%, due 3/30/95 $1,390,153 $1,390,153
Hartford Life, GIC #GA-8916
6.58%, due 3/30/94 1,379,849 1,379,849
Metropolitan Life Insurance Co.
GIC #GAC-12263
7.86%, due 9/30/94 1,247,557 1,247,557
New York Life Insurance Co.
GIC #GA-06108
8.38%, due 9/30/96 3,795,663 3,795,663
Principal Mutual Life
GIC #4-10581
5.63%, due 9/30/98 1,505,864 1,505,864
Provident Life and Accident Insurance
GIC #627-05496
5.4%, due 3/31/98 2,589,712 2,589,712
------------ ---------
$11,908,798 $11,908,798
=========== ==========
SCHEDULE 2
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX I.D. NUMBER 91-0816142)
ITEM 27d
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS AT JANUARY 1, 1993
Fixed Income Fund
- - -----------------
Issuer: Provident Life & Accident Insurance
Description: GIC #627-05496, due 3/31/98, 5.4%
Number of purchases 1
Total Purchases $2,300,000
Number of Sales
Total Sales
Gain (Loss) on Sales -
Issuer: Wells Fargo Bank
Description: Money Market Fund
Number of purchases
Total Purchases
Number of Sales 1
Total Sales $2,293,970
Gain (Loss) on Sales -
Equity Fund
- - -----------
Issuer: Wells Fargo Bank
Description: Money Market Fund
Number of purchases 1
Total Purchases $6,802,336
Number of Sales
Total Sales
Gain (Loss) on Sales -
Issuer: Wells Fargo Bank
Description: Money Market Fund
Number of purchases 1
Total Purchases $6,710,197
Number of Sales
Total Sales
Gain (Loss) on Sales -
Issuer: Wells Fargo Bank
Description: Money Market Fund
Number of purchases
Total Purchases
Number of Sales 1
Total Sales $6,715,095
Gain (Loss) on Sales -
SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS AT JANUARY 1, 1993:
Company Stock Fund
- - -------------------
Issuer: Univar Corporation
Description:
Number of purchases 80
Total Purchases $1,361,639
Number of Sales 21
Total Sales $1,036,667
Gain (Loss) on Sales $22,645
Issuer: Wells Fargo Bank
Description: Money Market
Number of purchases 47
Total Purchases $3,667,259
Number of Sales 96
Total Sales $3,611,818
Gain (Loss) on Sales -
Fixed Income Fund
- - -----------------
Issuer: Provident Life & Accident Insurance
Description: GIC #627-05496, due 3/31/98, 5.4%
Number of purchases 10
Total Purchases $2,589,712
Number of Sales
Total Sales
Gain (Loss) on Sales -
Issuer: Wells Fargo Bank
Description: Money Market Fund
Number of purchases 47
Total Purchases $8,431,219
Number of Sales 53
Total Sales $7,910,653
Gain (Loss) on Sales -
Equity Fund
- - -----------
Issuer: Wells Fargo Bank
Description: Money Market Fund
Number of purchases 206
Total Purchases $21,199,157
Number of Sales 170
Total Sales $20,021,197
Gain (Loss) on Sales -
Balanced Fund
- - -------------
Issuer: Wells Fargo Bank
Description: Money Market Fund
Number of purchases 64
Total Purchases $2,852,248
Number of Sales 54
Total Sales $2,233,417
Gain (Loss) on Sales -
EXHIBIT 28.4
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20459
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(FEE REQUIRED)
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ________
Commission File Number 1-5858
VAN WATERS & ROGERS LTD./UNIVAR CORPORATION
STOCK PURCHASE PLAN
------------------------------------------------------------
UNIVAR CORPORATION
------------------------------------------------------------
P.O. Box 34325
Seattle, WA 98124-1325
------------------------------------------------------------
ITEM 1. FINANCIAL STATEMENTS
The Plan has no financial statements. Reference is made to
Form S-8, Registration Statement, File No. 2-71255 for a
description of the Plan.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or others persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
VAN WATERS & ROGERS LTD./ UNIVAR
CORPORATION STOCK PURCHASE PLAN
Date: May 27, 1994 By: /s/ Gary E. Pruitt_________________
Gary E. Pruitt
Vice President - Finance & Treasurer
Administrator of the Plan
EXHIBIT 10.28
VAN WATERS & ROGERS LTD.
SUPPLEMENTAL BENEFITS PLAN
1. Purpose
The purpose in establishing this Supplemental Benefits Plan
("Plan") is to provide retirement benefits to specifically
designated participants of the Van Waters & Rogers Ltd. Pension
Plan ("Pension Plan") under the terms of that Pension Plan without
regard to limitations on benefits imposed under Section 147.1(2) of
the Income Tax Act and Regulation 8504 which apply to the Pension
Plan.
For purposes of this Supplemental Benefits Plan, any terms
specifically defined in the Van Waters & Rogers Ltd. Pension Plan
shall have the same meaning in this plan.
2. Effective Date
This Plan was established effective June 25, 1993.
3. Participation
This Plan shall only include those employees who have been
specifically designated by the Compensation Committee of Univar
Inc. as eligible to participate in this Plan. Such an employee
shall be referred to hereinafter as a "Participant".
4. Benefit Determination Date
Benefits shall be determined under this Plan as of the same date
that benefits are determined under the Pension Plan.
5. Benefit Amount
The initial benefits under this Plan determined as of the benefit
determination date shall equal the difference, if any, between a)
and b) below:
a) The monthly benefit for the life of the Participant, as
calculated under the terms of the Pension Plan, without regard
to the limitations described in Section 147.1(2) of the Income
Tax Act and Regulation 8504;
b) The monthly benefit for the life of the Participant, as
calculated under the Pension Plan, which includes limitations
described in Section 147.1(2) of the Income Tax Act and
Regulation 8504.
The initial benefits payable under this Plan shall be increased in
the same manner and same percentage amount as any cost of living
adjustment increases granted in respect of benefits payable from
the Pension Plan.
6. Spouse's Death Benefits
If a death benefit is payable under the Pension Plan to a spouse of
a Participant, that spouse is eligible to receive benefits under
this Plan. The benefit shall be calculated in the same manner as
under Section 5; that is, the death benefit under this Plan shall
equal the difference, if any, between:
a) the spouse's death benefit calculated under the Pension
Plan without regard to the limitations described in Section
147.1(2) of the Income Tax Act and Regulation 8504; and
b) the spouse's death benefit as calculated under the terms
of the Pension Plan which includes limitations described in
Section 147.1(2) of the Income Tax Act and Regulation 8504.
7. Date and Form of Payment
Benefit payments under this Plan shall commence at the same time as
the benefit under the Pension Plan commences. The benefit shall be
paid in the same form as the benefit is paid under the Pension Plan
and the actuarial equivalent assumptions used in determining the
benefit in a given form shall be the same as are used to determine
the benefit under the Pension Plan. The Company reserves the right
to pay a lump sum amount in lieu of the monthly pension benefit set
forth in Section 5 if such monthly pension benefit is less than
$100. This lump sum amount shall be the actuarial equivalent of
the monthly pension benefit payment calculated on the advice of the
Pension Plan Actuary.
8. Re-employment After Payments Begin
If a Participant is re-employed after benefits commence, the
Participant's benefits shall be suspended under this Plan. When
the Participant retires for the final time, the benefit under this
Plan shall be recalculated and adjusted in the same manner as the
benefit is adjusted under the Pension Plan.
9. Termination and Amendment of the Plan
This Plan shall continue in effect until terminated by resolution
of the Board of Directors. In the event of such termination, all
amounts accrued and vested to date of termination, based on service
and earnings to that date, shall be payable pursuant to the terms
of this Plan as if the Plan had not been terminated. The Plan may
be amended from time to time by resolution of the Board of
Directors. No amendment or terminating resolution shall reduce any
vested benefit accrued to the date of the resolution amending or
terminating the Plan. In the event of a plan termination, the
Board of Directors, at its option, may accelerate the payment of
benefits and may pay benefits in a single, actuarially-equivalent,
lump-sum amount.
10. Source of Benefit Payments
No Participant shall acquire any property interest in any assets of
Van Waters & Rogers Ltd. as a consequence of participating in this
Plan. A Participant's rights are limited to receiving payments as
set forth in this Plan. The Plan is unfunded, and to the extent
that any Participant acquires a right to receive benefits, such
right shall be no greater than the right of any unsecured general
creditor of Van Waters & Rogers Ltd. Any funds of Van Waters &
Rogers Ltd. available to pay benefits under the Plan shall be
subject to the claims of general creditors of Van Waters & Rogers
Ltd. and may be used for any purpose by Van Waters & Rogers Ltd.
11. Pension Committee
This Plan shall be administered by the Pension Committee
("Committee"). The Committee shall have full discretion to
construe and interpret the terms and provisions of this Plan, which
interpretation or construction shall be final and binding on all
parties. The Committee shall administer such terms and provisions
in a uniform and non-discriminating manner.
12. Claims Procedure
The following is the procedure for making claims under this Plan or
appealing a decision made with respect to this Plan:
a) Filing Claim for Benefits
If a person does not receive the timely payment of the
benefits which he or she believes are due under the Plan
(hereinafter referred to as the "Applicant"), the Applicant
may make a claim for benefits. All claims for benefits under
the Plan shall be made in writing and shall be signed by the
Applicant. Claims shall be submitted to the Committee. Each
claim shall be approved or disapproved within 90 days
following the receipt of the information necessary to process
the claim. In the event the Committee denies a claim for
benefits in whole or in part, the Committee shall notify the
Applicant in writing of the denial of the claim, and notify
the Applicant of the right to a review of the decision. Such
notice shall also set forth the specific reason for such
denial, the specific provisions of the Plan on which the
denial is based, a description of any additional material or
information necessary to perfect the claim with an explanation
of why such material or information is necessary, and an
explanation of the Plan's appeals procedure. If no action is
taken by the Committee on an Applicant's claim within 90 days
after receipt by the Committee, such claim shall be deemed to
be denied for purposes of the following appeals procedure;
b) Appeals Procedure
Any Applicant whose claim for benefits is denied in whole
or in part may appeal to the Committee for a review of the
decision. Such appeal must be made within three months after
the Applicant has received actual or constructive notice of
the denial. An appeal must be submitted in writing within
such period and must:
i) request a review by the Committee of the claim for
benefits under the Plan;
ii) set forth all of the grounds upon which the
Applicant's request for review is based on and any facts
in support thereof; and
iii) set forth any issues or comments which the Applicant
deems pertinent to the appeal.
The Committee shall act upon each appeal within 60 days after
receipt unless special circumstances require an extension of the
time for processing, in which case a decision shall be rendered by
the Committee as soon as possible but not later than 120 days after
the appeal is received by the Committee. The Committee shall make
full and fair review of each appeal and any written materials
submitted by the Applicant in connection. The Committee may
require the Applicant to submit such additional facts, documents or
other evidence as the Committee in its discretion deems necessary
or advisable in making its review. On the basis of its review, the
Committee shall make an independent determination of the
Applicant's eligibility for benefits under the Plan. The decision
of the Committee shall be final and conclusive.
13. Alienation
The right of any person to receive payments under this Plan shall
not be subject to any type of assignment or pledge, nor shall such
right be liable for or subject to the debts, contracts, liabilities
or torts of such person.
14. Employee Benefit Statement
Each employee covered by this Plan shall receive a statement each
year which shows the total benefit payable under this Plan and the
Pension Plan.
15. Withholding
Benefit payments shall be subject to applicable federal or
provincial withholding for taxes.
16. Successors
In the event of any consolidation, merger, acquisition or
reorganization, the obligations of Van Waters & Rogers Ltd. under
this Plan shall continue and be binding on Van Waters & Rogers Ltd.
and its successors or assigns.
17. Governing Law
This Plan shall be construed in accordance with the laws of the
Province of British Columbia.
DATED as of the 25th day of June, 1993.
VAN WATERS & ROGERS LTD.
Per:
/s/Paul Hough
President
