<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED FEBRUARY 29, 1996
[ ] 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 Washington 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, No Par Value New York 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 9, 1996 was approximately $123,719,000. As of such date,
21,681,447 shares of the registrant's no par common stock, which is the
registrant's only class of common stock, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
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ON JUNE 3, 1996, THE CORPORATION ANNOUNCED THAT ROYAL PAKHOED N.V. ("PAKHOED"),
A MAJOR SHAREHOLDER OF THE CORPORATION, WAS INITIATING A TENDER OFFER FOR ALL OF
THE COMMON SHARES (THE "SHARES") OF THE CORPORATION. PURSUANT TO THE TERMS OF AN
AGREEMENT AND PLAN OF REORGANIZATION (THE "REORGANIZATION AGREEMENT") DATED AS
OF MAY 31, 1996, AMONG PAKHOED, THE CORPORATION, AND UC ACQUISITION CORP., AN
INDIRECT SUBSIDIARY OF PAKHOED ("BUYER"), BUYER HAS INITIATED A TENDER OFFER AT
A PRICE OF $19.45 PER SHARE (THE "TENDER OFFER"). THE TENDER OFFER BEGAN JUNE 7,
1996, AND WILL TERMINATE JULY 15, 1996 UNLESS EXTENDED BY PAKHOED.
ON JUNE 7, 1996, PAKHOED FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") A TENDER OFFER STATEMENT ON SCHEDULE 14D-1, WHICH INCLUDES AN
OFFER TO PURCHASE ("SCHEDULE 14D-1"). ON JUNE 7, 1996, THE CORPORATION FILED
WITH THE COMMISSION A SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9
("SCHEDULE 14D-9"). BOTH OF THESE FILINGS ARE INCORPORATED BY REFERENCE. COPIES
OF THESE FILINGS ARE AVAILABLE FOR COPYING AT THE OFFICES OF THE COMMISSION OR
BY CALLING D.F. KING & CO., INC., INFORMATION AGENT FOR THE TENDER OFFER, AT
1-800-735-3591.
PART 1
ITEM 1. BUSINESS
The Company
Univar Corporation (Univar, the Registrant, or the Corporation) was incorporated
in October, 1995. As of February 29, 1996, Univar changed its state of
incorporation from Delaware to Washington by means of a migratory merger. The
Delaware predecessor of 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 29, 1996, Univar Corporation and its three wholly owned subsidiaries
were involved in the distribution of industrial, agricultural and pest control
chemicals and related products and services. In the United States, the
Corporation conducts its operations through Van Waters & Rogers Inc.; in Canada,
through Van Waters & Rogers Ltd.; and through Univar Europe N.V. (Univar Europe)
in the United Kingdom, Scandinavia, Switzerland, and northern Italy.
Distribution is the process by which manufacturers, both large and small, move
their products in the most economical way to many end users. As a distributor of
industrial, pest control, 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, blending and packaging, delivery reliability, and provides customers
assistance with environmental and regulatory compliance.
The Corporation provides a hazardous waste management service in the U.S. called
ChemCare(R). ChemCare is a service providing its customers with logistics
management, temporary waste storage, and access to various treatment and
disposal technologies. ChemCare allows the Corporation to maximize existing
equipment, facilities and chemical handling knowledge to assist customers in
responsibly collecting and disposing 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. Rather, it contracts with Environmental Protection
Agency (EPA) permitted hazardous waste disposal sites to do so, through
incineration, recycling, or other means.
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The Corporation is developing additional ancillary services in the U.S.,
including contract chemical management services, and third party logistics. The
Corporation provides contract management services through its VIMS(TM) services.
(Van Waters & Rogers Integrated Management Services). VIMS takes full advantage
of the Corporation's UVX2000(R) networked computer system combined with
expertise in sourcing, procuring, warehousing, and transporting to reduce
customers' costs of acquiring and managing products and materials. With its
Third Party Logistics business, the Corporation is making existing warehousing
capacities available to customers, along with services such as packaging and
terminaling of bulk liquids, for manufactured products.
Financial Information About Industry Segments The Corporation operates 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 Univar Europe N.V. in Europe. The ancillary services
described above are not material in relation to the Corporation's chemical
distribution business.
Operations in Canada and Europe for each of the last three years are reported in
the Univar Corporation financial statements on page 36 of this filing, under the
caption of Note 11. 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 1997 through 2010.
These marks and names are important in the Corporation's current operations but
not indispensable.
Seasonal Business
Approximately 27% of annual sales occur in the first quarter of the year,
followed by approximately 26% in the second quarter, 24% in the third quarter
and 23% in the fourth quarter. While quarterly sales volumes do not vary
significantly, the mix of business during the year is subject to seasonal
variation. The Corporation markets pest control and agricultural products, which
together represented 13%, 12%, and 11% of sales, respectively, in fiscal 1996,
1995, and 1994. While sales of these products occur throughout the year,
approximately 69% of these annual sales occur during the first two quarters of
the fiscal year. Complimentary seasonal fluctuations of certain industrial
chemical sales, such as aircraft de-icing fluid, offset lower sales volumes of
agricultural and pest control products in the third and fourth quarters of the
fiscal year. This seasonal change in product mix results in expected fluctuation
of gross margin percentage from quarter to quarter during the year.
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 which 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 directly to
end users. 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.
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ITEM 1. BUSINESS (Continued)
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 of
Financial Condition and Results of Operations on page 17 of this filing.
Employees
As of February 29, 1996, Univar and its subsidiaries had 3,237 full-time
employees, of which 579 employees are members of various labor unions. At year
end, the Corporation was in negotiations with three labor unions in connection
with renewal of labor contracts. 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.
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EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
Name Age Business Experience Past Five Years Position Held _
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James H. Wiborg (1) 71 Chairman of Registrant 1990 -
Chairman
Director
Paul Hough 57 President and Chief Executive Officer of Registrant 1995 -
President and CEO Vice President of Registrant 1992 -1995
President, Van Waters & Rogers Ltd. 1991 -1995
Vice President, Van Waters & Rogers Ltd. 1988 - 1991
(Distribution of chemicals and
related products)
Jeffrey Ellwood 50 Vice President of the Registrant 1995 -
Vice President Managing Director of Univar Europe 1991 -
William A. Butler 45 Vice President, General Counsel,
Vice President, General and Corporate Secretary of Registrant 1990 -
Counsel and Corporate
Secretary
Gary E. Pruitt 46 Chief Financial Officer 1995 -
Chief Financial Officer Vice President-Finance, Treasurer and
Assistant Corporate Secretary of the Registrant 1992 - 1995
Vice President, Treasurer and Assistant
Corporate Secretary of Registrant 1989 - 1992
James L. Fletcher 52 Vice President of Registrant 1989 -
Vice President
H. Drew MacAfee 46 Vice President - Human Resources of Registrant 1995 -
Vice President - Human Resources 1992 -
Vice President, Van Waters & Rogers Inc.
Human Resources Vice President - Human Resources
Spacelabs, Inc. (Medical Electronics) 1985 - 1992
</TABLE>
(1) Family Relationships: James H. Wiborg and N. Stewart Rogers, directors of
the Registrant, are brothers-in-law.
No arrangement or understanding exists between any officer and any other person
pursuant to which he or she was elected as an officer.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended February 29/28
(Thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Sales $2,037,674 $1,912,728 $1,802,464
Cost of Sales 1,756,840 1,639,055 1,532,931
--------- --------- ---------
Gross Margin 280,834 273,673 269,533
Operating Expenses 254,138 248,767 242,388
Reengineering Charges 160 37,361 4,507
--------- ---------- ----------
Income (Loss) from Operations 26,536 (12,455) 22,638
Other Income (Expense):
Interest expense (15,226) (11,973) (12,921)
Other - net 896 709 525
---------- ---------- -----------
Income (Loss) Before Provision for (Benefit of)
Taxes on Income and Minority Interest 12,206 (23,719) 10,242
Provision for (Benefit of) Taxes on Income (Loss) 6,306 (8,066) 4,403
--------- ---------- ----------
Income (Loss) Before Minority Interest 5,900 (15,653) 5,839
Interest's Share in Income of Foreign Subsidiary --- 604 379
----------- ---------- -----------
Net Income (Loss) $5,900 $(16,257) $ 5,460
====== ========== ==========
Net Income (Loss) Per Share $ 0.27 $ (0.76) $ 0.28
======= =========== =========
</TABLE>
The accompanying notes are an integral part of these statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended February 29/28
(Thousands of dollars)
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash Flows Provided by Operating Activities
Net income (loss) $5,900 $(16,257) $ 5,460
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 29,135 27,020 27,449
Loss on sale of fixed assets 1,306
Deferred taxes on income (4,430) (4,463) (2,452)
Other liabilities and deferred credits (2,024) 836 (1,483)
Non-cash portion of reengineering charges --- 16,389 ---
Other-net (707) 53 (294)
Change in assets and liabilities, net of effect
of businesses acquired:
Accounts receivable (12,889) (11,656) (4,804)
Inventories (20,628) (5,864) 6,212
Accounts payable 16,002 16,463 (3,991)
Other current assets 1,221 (2,734) 5,226
Other current liabilities 6,212 (3,841) 4,063
---- ------- -----
Net Cash Provided by Operating Activities 19,098 15,946 35,386
------ ------ -------
Cash Flows Used by Investing Activities
(Increase in) proceeds from investments (208) 1,790 1,132
Additions to property, plant, and equipment (22,536) (21,437) (14,121)
Acquisition of businesses and investments (16,004) (32,065) (4,383)
Sale of business --- --- 2,812
Change in other assets 457 305 (106)
--------- ----------- ----------
Net Cash Used by Investing Activities (38,291) (51,407) (14,666)
-------- -------- --------
Cash Flows Provided (Used) by Financing Activities
Short-term borrowing - net 9,638 7,685 (6,813)
Common stock activity 241 37,770 286
Long-term debt proceeds 119,851 50,000 20,000
Reduction in long-term debt (105,494) (50,704) (40,739)
Payment of dividends (6,477) (6,215) (5,895)
------------ --------- ----------
Net Cash Provided (Used) by Financing Activ 17,759 38,536 ( 33,161)
-------- -------- ----------
Effect of Exchange Rate Changes on Cash 971 911 (1,545)
---------- -------- ----------
Net Cash Provided (Used) (463) 3,986 (13,986)
Cash and Equivalents at Beginning of Year 19,516 15,530 29,516
------ ------ ---------
Cash and Equivalents at End of Year $19,053 $ 19,516 $ 15,530
======= ======== =========
Supplemental Disclosure of Cash Flow Information
Cash paid during the year for:
Interest (net of capitalized interest) $15,212 $13,309 $13,325
Taxes on income 9,939 3,259 6,008
</TABLE>
The accompanying notes are an integral part of these statements.
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CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 29/28
(Thousands of dollars) 1996 1995
ASSETS
<S> <C> <C>
Current Assets
Cash and equivalents $19,053 $19,516
Receivables-
Trade accounts (less allowance for losses of
$1,924 in 1996 and $1,695 in 1995) 261,272 233,844
Other 10,621 10,055
Inventories 162,469 133,282
Prepaid expenses and other 11,301 10,551
--------- ---------
Total current assets 464,716 407,248
Real Properties Held for Sale and Long-Term Receivables 24,193 28,780
Property, Plant, and Equipment
Land 23,950 24,052
Buildings 117,410 112,267
Equipment 230,129 222,448
Leased property under capital leases 6,716 5,213
Construction in progress 3,763 7,251
--------- ---------
381,968 371,231
Accumulated depreciation and amortization (167,957) (162,876)
--------- ---------
Net property, plant, and equipment 214,011 208,355
Other Assets 37,685 28,820
---------- ---------
$740,605 $673,203
======== =======
</TABLE>
The accompanying notes are an integral part of these statements.
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CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 29/28
(Thousands of dollars) 1996 1995
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Bank overdrafts $21,217 $19,584
Notes payable 49,502 36,284
Current portion of long-term debt 6,389 3,978
Accounts payable 253,500 222,675
Other accrued liabilities 58,665 48,119
-------- --------
Total current liabilities 389,273 330,640
Long-Term Debt, less Current Portion 132,812 122,086
Other Long-Term Liabilities
Deferred taxes on income 8,903 12,408
Other liabilities and deferred credits 30,011 31,906
-------- --------
Total other long-term liabilities 38,914 44,314
Commitments and Contingencies - -
Shareholders' Equity
Preferred stock, no par value
Authorized 5,000,000 shares in 1996
and 750,000 shares in 1995 - -
Common stock, no par in 1996 and par value
$.33 1/3 per share in 1995
Authorized - 100,000,000 shares in 1996
and 40,000,000 shares in 1995
Issued - 21,681,624 shares in 1996
and 24,018,502 shares in 1995 105,505 8,006
Additional paid-in capital - 107,799
Retained earnings 73,859 74,428
Cumulative translation adjustment 246 (4,909)
Treasury stock, at cost, 2,222,539 shares in 1995 - (9,087)
Deferred stock compensation expense (4) (74)
-------- -------
Total shareholders' equity 179,606 176,163
------- -------
$740,605 $673,203
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deferred
Stock Total
For the Three Years Ended Additional Cumulative Compen- Share-
February 29, 1996 Common Paid-in Retained Translation Treasury sation holders'
(Thousands of dollars) Stock Capital Earnings Adjustment Stock Expense Equity
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Balance, February 28, 1993 7,339 69,555 97,495 (1,041) (9,633) (425) 163,290
Net income - - 5,460 - - - 5,460
Exercise of stock options - 58 - - 85 - 143
Cash dividends at
$.30 per share - - (5,895) - - - (5,895)
Foreign currency
translation adjustment - - - (5,920) - - (5,920)
Purchase of treasury stock - - - - (44) - (44)
Stock compensation expense - - - - (18) 205 187
Other - 185 - - - - 185
- --------------------------------------------------------------------------------------------------------------------------------
Balance, February 28, 1994 7,339 69,798 97,060 (6,961) (9,610) (220) $157,406
Net loss - - (16,257) - - - (16,257)
Sale of stock (2.0 million shares) 667 36,813 - - - - 37,480
Exercise of stock options - 63 - - 62 - 125
Stock awards (144,345 shares) - 887 - - 587 (1,474) -
Cash dividends at
$.30 per share - - (6,375) - - - (6,375)
Foreign currency
translation adjustment - - - 2,052 - - 2,052
Purchase of treasury stock - - - - (73) - (73)
Stock compensation expense - - - - (53) 1,620 1,567
Other - 238 - - - - 238
- --------------------------------------------------------------------------------------------------------------------------------
Balance, February 28, 1995 8,006 107,799 74,428 (4,909) (9,087) (74) 176,163
Net income 5,900 5,900
Exercise of stock options 176 164 340
Cash dividends at
$.30 per share (6,469) (6,469)
Foreign currency
translation adjustment 5,155 5,155
Purchase of treasury stock (1,559) (1,559)
Stock compensation expense 70 70
Reincorporation in Washington State 97,493 (107,975) 10,482 -
Other 6
- --------------------------------------------------------------------------------------------------------------------------------
Balance, February 29, 1996 105,505 - 73,859 246 - (4) 179,606
================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
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NOTE 1 - SUMMARY OF SIGNIFICANT 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 100% owned subsidiary, Univar Europe N.V. (Univar Europe), is
consolidated using its financial year-end, December 31.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results are likely to differ from those estimates and it is possible the
difference may be significant.
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:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995
<S> <C> <C>
At Cost (last-in, first-out method) $81,781 $66,571
At Lower of Cost or Market (average-cost method) 80,688 66,711
------ ---------
$162,469 $133,282
======== ========
</TABLE>
If the inventories valued on the last-in, first-out (LIFO) method had been
valued at average costs, they would have been $34.4 million and $32.0 million
higher than reported at year-end 1996 and 1995, respectively.
During fiscal 1995, the Corporation experienced 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 $1.4 million in fiscal year 1995.
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 which range from
three to forty years. For income tax purposes, depreciation on certain assets is
computed using accelerated methods. Interest cost of approximately $0.4 million
for fiscal year 1995 was 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 goodwill and covenants not to compete, are
amortized using the straight-line method over their estimated useful lives,
typically not more than twenty and ten years, respectively.
ENVIRONMENT
Accruals for contamination removal costs 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
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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 recoveries on 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 basis of assets and liabilities, using enacted rates. The principal
differences between financial and tax reporting arise from depreciation,
self-insurance, reengineering, restructuring and other accruals and reserves,
pension accruals, alternative minimum tax credits, foreign tax credits, and net
operating loss carryforwards. Accumulated undistributed earnings after taxes for
the Canadian subsidiary amounted to approximately $74 million at February 29,
1996. The European subsidiaries have accumulated undistributed earnings of
approximately $9 million at February 29, 1996. 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 Corporation acquired the minority shareholder's 49% interest in Univar
Europe during fiscal 1995, as described in Note 8.
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.
DERIVATIVES
The Corporation has limited involvement with derivative financial instruments
and does not use them for trading purposes. Derivatives are used to manage
well-defined interest rate and foreign exchange risks. Interest rate swaps are
entered into with major banks in which the Corporation pays a floating rate and
receives a fixed rate with interest payments being calculated on a notional
amount, as described in Note 3. Amounts received or paid by the Corporation at
the settlement dates under the swap agreements are included in interest expense.
Forward foreign exchange contracts are used to hedge fluctuations in prices on
inventory purchases caused by changes in exchange rates and as hedges for
foreign denominated accounts receivable and payable. Foreign exchange contracts
have gains and losses recognized at the settlement date. The use of derivatives
does not have a significant effect on the Corporation's results of operations or
its financial position.
EARNINGS PER SHARE
Net income (loss) per common share is based on the weighted average number of
shares outstanding during each year (21,700,672 for 1996, 21,345,622 for 1995,
and 19,703,273 for 1994 ). There is no material dilution due to outstanding
stock options.
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<PAGE> 13
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
During 1995, the Financial Accounting Standards Board issued FASB Statement No.
123, "Accounting for Stock-Based Compensation." The Company plans to continue to
measure compensation cost of employee stock option plans using the intrinsic
value method prescribed by APB Opinion No. 25, and starting in fiscal 1997, to
make pro forma disclosures of net income and earnings per share as if the fair
value method prescribed by FASB No. 123 had been applied.
During the fourth quarter of fiscal 1996, the Corporation adopted FASB No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." This Statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If the sum of the expected
future cash flows is less than the carrying amount of the asset, an impairment
loss is recognized. This Statement also requires that long-lived assets and
certain identifiable intangibles to be disposed of be reported at the lower of
carrying amount or fair value less cost to sell. Adoption of FASB No. 121 had no
impact on the Corporation's results of operations or financial position.
NOTE 2 - NOTES PAYABLE
As of February 29, 1996, the Corporation has domestic and foreign short-term
lines of credit totaling $105.9 million, with loans against these bank lines of
$49.5 million. The approximate average aggregate short-term borrowing and
weighted average short-term interest rates were $57.6 million and 6.6% in 1996,
and $50.6 million and 5.8% in 1995. The maximum amount of short-term borrowing
during the year was $71.0 million in 1996 and $75.4 million in 1995.
NOTE 3 - LONG-TERM DEBT AND REVOLVING CREDIT
Long-term debt consists of the following at February 29/28:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995
Senior Debt:
<S> <C> <C>
Revolving credit agreement $115,000 $100,000
Multi-currency revolving credit agreement 13,133 ---
Term credit agreements, 5.26% and 9.84%, unsecured --- 13,333
Industrial revenue bonds, 7.25%, secured by certain
real property, payable in installments to 1999 750 1,000
Non-U.S. mortgage loans, 5.75%, payable in
installments to fiscal 1997 2,167 1,949
Other 4,818 6,117
Capitalized Lease Obligations:
8.51% to 11.75%, secured by certain real property,
payable in monthly installments to 2020 3,333 3,665
-------- ---------
139,201 126,064
Current portion (6,389) (3,978)
--------- ----------
$132,812 $122,086
======== ========
</TABLE>
13
<PAGE> 14
Maturities of long-term debt for the fiscal years ending 1998-2001 are as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 $1,001
1999 688
2000 476
2001 470
</TABLE>
The Corporation and its domestic subsidiary are parties to a revolving credit
agreement with a group of banks. Under the terms of the agreement, the borrowers
may borrow up to $195 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 interest rates in effect were 6.59% and 7.04% as of
year-end 1996 and 1995, respectively. The credit commitment extends for three
years, with annual one year renewals, thereafter.
In addition, the agreement requires fees of 1/4% on unused commitments.
During the year, the foreign subsidiaries of the Corporation entered into a
multi-currency revolving credit agreement with a group of banks. Under the terms
of the agreement, which is guaranteed by the Corporation and its U.S.
subsidiary, the borrowers may borrow up to the U.S. dollar equivalent of $90
million at the U.S. prime rate or the Canadian B/A rate plus 5/8%, for Canadian
dollar loans, or LIBOR plus 5/8% for loans in all other authorized currencies,
at the borrower's option. The weighted average interest rate in effect as of
year-end 1996 was 5.4%. The credit commitment extends for three years, with
annual one year renewals. In addition, the agreement requires fees of 1/4% per
annum on the total commitment amount.
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, may not fall below 1.20:1; the ratio of
total interest bearing debt, as defined, to equity may not exceed 1.40:1; and
the Corporation's shareholders' equity may not be less than $156.4 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 29, 1996, the aggregate
notional amount of these agreements totaled $50 million, with a weighted average
remaining life of approximately 5 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 the Corporation would have paid if the agreements were
terminated at the balance sheet date, was approximately $1.9 million. The
Corporation is exposed to, but does not anticipate, credit loss in the event of
counterparty nonperformance.
NOTE 4 - LEASES
Rental expense was $25.2 million, $24.1 million, and $23.2 million, for 1996,
1995, and 1994, 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 $6.7 million and $2.4 million in 1996, and $5.2 million and
$2.3 million in 1995. Lease amortization is included in depreciation expense.
14
<PAGE> 15
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:
<TABLE>
<CAPTION>
Capital Operating
(Thousands of dollars) Leases Leases
<S> <C> <C> <C>
1997 $ 707 $25,042
1998 707 19,010
1999 707 13,017
2000 707 9,259
2001 616 6,548
Thereafter 1,452 13,213
------- -------
Total minimum lease payments 4,896 $86,089
=======
Amounts representing interest (1,563)
--------
Present value of net minimum lease payments $ 3,333
=======
</TABLE>
The present value of the capital lease payments is presented in the 1996 balance
sheet as long-term debt.
NOTE 5 - REENGINEERING CHARGES
In the second quarter of fiscal 1994, the Corporation began work on a strategic
business transformation of its U.S. operating company. As a result of this
effort, at the end of the second quarter of fiscal 1995, the Corporation
announced its plans to reorganize the U.S. operating company, redesign its
distribution network, develop a national procurement and materials management
strategy, increase sales force efficiency, improve gross margins, and reduce the
amount of capital required to conduct ongoing operations. In support of this
effort, during fiscal 1995 the Corporation recorded pretax reengineering charges
of $37.4 million, which included severance and other employee benefits, facility
closure costs, consultant fees, project travel costs and write-down to fair
value of certain facilities.
At year end 1995, the remaining accruals relating to reengineering charges
totaled $20.4 million. For that year, cash expenditures and non-cash accrual
reductions totaled $14.6 million and $2.4 million, respectively.
During the third and fourth quarters of fiscal 1996, the Corporation revised
certain of its reengineering estimates. The revisions stem from mid-course
corrections in the Corporation's strategic direction, following appointment of a
new Chief Executive Officer and President of the Corporation and its U.S.
subsidiary. Estimate revisions include changes in the number and location of
planned facility closures, equipment to be abandoned or liquidated, revised
severance accruals, relocation costs, and other costs related to
decentralization of the company's organizational structure. Costs arising in
connection with estimate revisions were offset, in part, by reversal of a
portion of reengineering accruals established in 1995.
At year end 1996, the remaining accruals pertaining to the revised estimates
totaled $7.9 million. For the year, cash expenditures and non-cash accrual
reductions totaled $4.9 million and $7.6 million, respectively.
15
<PAGE> 16
NOTE 6 - TAXES ON INCOME
The components of income (loss) before income taxes and minority interest were
as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Domestic $(14,163) $ (6,971) $4,261
Foreign 26,369 20,612 10,488
Reengineering charge -- (37,360) (4,507)
--------- --------- ------
$12,206 $(23,719) $10,242
======= ========= =======
</TABLE>
The provision for (benefit of) taxes on income (loss) consisted of the following
components:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Current
Federal $85 $ (1,115) $ 889
State and Local 70 (88) 140
Foreign 10,061 7,123 5,261
------ --------- ------
10,216 5,920 6,290
------ --------- ------
Deferred
Federal (4,021) (13,067) (1,770)
State and Local (387) (1,696) 291
Foreign 498 777 (408)
-------- ---------- --------
(3,910) (13,986) (1,887)
------ -------- --------
$6,306 $(8,066) $4,403
====== ======== ======
</TABLE>
16
<PAGE> 17
Deferred tax balances consisted of the following temporary differences at
February 29/28:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995 1994
Deferred Tax Deferred Tax Deferred Tax Deferred Tax Deferred Tax Deferred Tax
Assets Liabilities Assets Liabilities Assets Liabilities
<S> <C> <C> <C> <C> <C> <C>
Alternative minimum tax $ 6,474 $ -- $ 6,476 $ -- $ 7,500 $ --
Tax loss and credit carryforward 6,231 -- 4,758 -- 480 --
Foreign tax credit carryforward 1,835 -- 2,444 -- -- --
Self-insurance loss reserves 4,402 -- 3,731 -- 2,410 --
Pension and other compensation
accruals 218 -- -- 795 1,266 --
State income tax accrual 115 -- 260 -- 1,268 --
Vacation accrual 1,552 -- 1,459 -- 1,268 --
Property -- 35,433 -- 36,369 -- 37,233
Reengineering charges 5,741 -- 8,139 -- -- --
Environmental reserve 2,063 -- -- -- -- --
Other 3,898 2,863 3,259 3,039 4,162 4,784
------- ------- ------- ------- ------- -------
$32,529 $38,296 $30,526 $40,203 $18,354 $42,017
======= ======= ======= ======= ======= =======
</TABLE>
17
<PAGE> 18
The accompanying financial statements reflect effective tax (benefit) rates of
51.7% in 1996, (34.0%) in 1995, and 43.0% in 1994. An analysis of the
differences between these rates and the Federal statutory rate is set forth
below:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
(Thousands of dollars) AMOUNT PERCENT Amount Percent Amount Percent
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal tax at statutory rates $4,272 35.0% $(8,302) (35.0%) $3,483 34.0%
State taxes, net of
federal tax benefit (206) (1.7) (1,160) (4.9) 285 2.8
Foreign income tax rate differetial 1,384 11.4 1,248 5.2 1,099 10.7
Travel and entertainment limitation 605 5.0 561 2.4 210 2.1
Research and experimentation credit --- --- --- --- (787) (7.7)
Non-deductible amortization 265 2.2 492 2.1 226 2.2
Settlement gain --- --- (1,029) (4.3) --- ---
Other - net (14) (0.2) 124 0.5 (113) (1.1)
--------- ------- ----------- ------- -------- -------
$6,306 51.7% $(8,066) (34.0%) $4,403 43.0%
====== ===== ======== ======= ====== =====
</TABLE>
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 $11.2 million, which expire in 2011. In addition, the Corporation has
alternative minimum tax credit carry-overs totaling $6.5 million, which have no
carry-over limitation period. Research and experimentation credit carry-overs
total $0.5 million and expire through 2007. Charitable contribution carry-overs
total $1.8 million and expire through the year 2001.
NOTE 7 - 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 used in determining the actuarial present
value of the projected benefit obligations was 5% and 6%, respectively for 1996
and 1995. The expected long-term rate of return on plan assets was 10% for both
1996 and 1995. The weighted average discount rate used was 7.8% and 8.8%, for
1996 and 1995, 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.
18
<PAGE> 19
The status of the Corporation's funded defined benefit plans is as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995
<S> <C> <C>
Actuarial present value of benefit obligations
Vested $98,638 $80,427
Non-vested 2,873 1,978
-------- --------
Accumulated benefit obligation 101,511 82,405
Projected benefit obligation 123,660 102,209
Plan assets at fair value (106,871) (83,417)
-------- --------
Projected benefit obligation in excess of plan assets 16,789 18,792
Unrecognized net transition obligation 265 283
Unrecognized prior service cost 1,059 1,204
Unrecognized net loss (plan changes and actuarial losses) (18,115) (17,832)
-------- -------
(Prepaid) Accrued pension cost, included in current and long-term liabilities ($ 2) $ 2,447
========= =======
</TABLE>
The status of the Corporation's unfunded defined benefit plans is as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995
<S> <C> <C>
Accumulated benefit obligation, all of which is vested $ 6,328 $ 3,994
======= =======
Projected benefit obligation $ 7,989 $ 5,259
Unrecognized prior service cost (2,223) (2,282)
Unrecognized net loss (plan changes and actuarial losses) (293) (102)
------- -------
Accrued pension cost, included in long-term liabilities $ 5,473 $ 2,875
======= =======
</TABLE>
Net periodic pension expense for all defined benefit plans sponsored by the
Corporation and its subsidiaries includes the following components:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995 1994
<S> <C> <C> <C>
Service cost (benefits earned during the period) $ 4,064 $ 4,732 $ 4,214
Interest cost on projected benefit obligation 8,977 8,537 7,719
Actual return on plan assets (21,172) (607) (8,357)
Net amortization and deferral 13,983 (5,384) 3,003
-------- -------- --------
$ 5,852 $ 7,278 $ 6,579
======== ======== ========
</TABLE>
Certain employees are covered under union-sponsored, collectively bargained,
defined benefit plans. Expenses for these plans were $0.9 million in 1996 and
1995 and $0.8 million in 1994, 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.
19
<PAGE> 20
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. 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.
The retiree health care cost provision was $1.5 million and $1.9 million for
fiscal 1996 and 1995, respectively. The components of the expense were as
follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Service costs (benefits earned during the period) $ 284 $ 418
Interest cost on accumulated postretirement benefit obligation 857 975
Amortization and deferred amounts 326 505
------ ------
Net periodic postretirement cost $1,467 $1,898
====== ======
</TABLE>
Benefit costs were calculated based on assumed cost growth for retiree health
care costs of a 14.0% annual rate for 1997, decreasing to a 6.0% annual growth
rate over a nine year period. 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 29, 1996 by $2.1 million and the
net periodic postretirement benefit cost for the year by $0.2 million. The
accumulated retiree health care obligation at fiscal year end 1996 and 1995 was
determined using a weighted average discount rate of 8.2% and 9.2%,
respectively.
The accumulated retiree health care obligation at February 29/28 consisted of
the following components:
<TABLE>
<CAPTION>
(Thousands of dollars) 1996 1995
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $4,598 $4,643
Fully eligible active plan participants 3,039 2,486
Other active plan participants 4,324 3,541
------- -----
Unfunded accumulated postretirement benefit obligation 11,961 10,670
Unrecognized transition obligation (5,546) (5,872)
Unrecognized losses (2,536) (1,665)
------- -------
Accrued postretirement benefit cost $3,879 $3,133
====== ======
</TABLE>
NOTE 8 - BUSINESS ACQUISITIONS
At the end of fiscal 1996, the Corporation acquired a company located in the
United Kingdom with annual sales revenues of approximately $70 million. The
acquisition included equity shares with a total value of $16.0 million. Funding
for the acquisition was provided from credit line borrowings. The newly acquired
operations were consolidated with the Corporation's existing operations in the
United Kingdom.
At the time of the organization of Univar Europe in 1991, Univar and its then
31% shareholder, Pakhoed Investeringen B.V. (Pakhoed), entered into a
Shareholder Agreement resulting in the formation of Univar Europe, which was
incorporated in the Netherlands in 1990. At the time Univar Europe was
capitalized, it was 51% owned by the Corporation and 49% owned by Pakhoed. On
September 1, 1994 the Corporation acquired the minority shareholder's 49%
interest in Univar Europe, in accordance with the terms of the Shareholder
Agreement. The acquisition included equity shares and subordinated debt with a
total value of $25.8 million. Funding for this aggregate purchase price was
provided through the sale of 2 million shares of the Corporation's common stock
to The Dow Chemical Company (Dow) as described in Note 9.
20
<PAGE> 21
During fiscal 1995, the Corporation completed an acquisition in Europe. The
acquired company had annual revenues of approximately $6.5 million. The
aggregate purchase price was $3.2 million, consisting of fixed assets,
inventories and customer lists.
NOTE 9 - COMMON STOCK TRANSACTIONS
STOCK OPTIONS AND RESTRICTED STOCK AWARDS
The Corporation's long-term incentive stock plans (the Plans) provide for the
granting of non-qualified stock options, incentive stock options, and restricted
stock awards, to non-employee directors, officers, and key employees. For
incentive stock options, the option price may not 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. Options may
be exercisable as determined by the committee of the Board of Directors that
administers the Plans.
Under the 1993 Non-Employee Director Stock Option Plan, options become
exercisable six months after grant or upon termination of service to the Board,
whichever is earlier, and expire three months to five years after termination of
service to the Board, depending on the circumstances of retirement.
Under the 1992 Long-Term Incentive Plan (LTIP), options become exercisable at
the earlier of ten years after date of grant, or beginning 3 years after the
date of grant, based on the Corporation's performance compared with performance
of a selected peer group. Options typically expire 10 years and 3 months after
the date of grant. Certain recipients of grants under the 1992 LTIP are also
entitled to receive,
subject to achievement of specified Corporation performance compared with the
selected peer group, cash incentives equivalent to the tax adjusted exercise
price of the options,.
Under the 1986 and 1995 Long-Term Incentive Stock Plans, 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.
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 up to six years. At the end of fiscal 1995, RSA's
totaling 142,293 shares were held for the benefit of certain executive and other
officers in connection with an incentive compensation arrangement. Vesting of
these RSA's and payment of the related dividends were subject to performance
criteria which were not achieved.
Unamortized deferred stock compensation expense related to RSA's granted of
approximately $4,000 and $74,000, is classified as such in the shareholders'
equity section of the Corporation's balance sheet for 1996 and 1995,
respectively.
The Compensation Committee of the Board of Directors 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.
21
<PAGE> 22
The following table summarizes activity in the Plans:
<TABLE>
<CAPTION>
Number of Shares
Restricted Available
Under Stock for Future
Option Awards Option or Award Price Range
<S> <C> <C> <C> <C>
Outstanding, year-end 1994 794,559 79,007 760,311 $4.19 - $14.56
Granted 353,114 144,345 (497,459) 4.58 - 13.75
Exercised (15,167) --- --- 4.19 - 11.20
Canceled or expired (25,098) (4,540) 29,638 5.91 - 13.75
RSA's vested --- (26,329) ---
Reserved under 1992 Plan --- --- 750,000
Reserved under 1993 Plan --- --- 150,000
--------- ---------- -------
Outstanding, year-end 1995 1,107,408 192,483 1,192,490 4.58 - 14.56
Granted 292,372 --- (292,372) 4.20 - 13.50
Exercised (36,908) --- --- 5.91 - 11.20
Canceled or expired (25,011) (144,205) 169,216 8.72 - 13.75
RSA's vested --- (28,193) ---
Reserved under 1992 Plan --- --- 750,000
Reserved under 1995 Plan --- --- 2,000,000
--------- ---------- ---------
Outstanding, year-end 1996 1,337,861 20,085 3,819,334 4.20 - 13.86
========= ====== =========
Exercisable at year-end 1996 172,295
=======
</TABLE>
PUT AGREEMENT WITH THE DOW CHEMICAL COMPANY
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 17.89%
of the issued and outstanding shares of Univar. In addition, Dow and Univar have
agreed that, at any time within the 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, 1995, 1996, and 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.
22
<PAGE> 23
NOTE 10 - 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 is subject to a variety of environmental laws and regulations
and faces exposure from actual or potential claims and legal proceedings
involving environmental matters. 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 twenty-eight in
which the Corporation may be liable for a share of the cost of clean up. With
the exception of one site, 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 $1.7 million, which is included in the Corporation's environmental
accrual. Possible costs for these sites could range up to $3.0 million.
Forty-three 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:
<TABLE>
<CAPTION>
(Millions of dollars) 1996 1995 1994
------------------------------------------------
<S> <C> <C> <C>
Beginning balance $17.0 $15.6 $15.4
Expense provisions 5.0 5.4 4.0
Expenditures (5.4) (4.0) (3.8)
----- ------ -------
Ending balance $16.6 $17.0 $15.6
====== ====== ======
</TABLE>
Annual cash expenditures for remedial, monitoring, and investigatory activities
have averaged approximately $4.4 million during the past three years. In
addition, annual cash expenditures for environmental capital expenditures have
averaged $1.0 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 periodically reviews the status of all significant existing or
potential environmental issues and 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. The accruals do
not reflect any possible future insurance recoveries.
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
23
<PAGE> 24
or annual period. However, the ultimate resolution of these contingencies, to
the extent not previously provided for, is not expected to have a material
adverse effect on the Corporation's financial position.
At year end 1996, the Corporation had letters of credit outstanding totaling
approximately $8.1 million, which guaranteed various insurance and financing
activities. Substantially all of these are automatically renewable each year.
NOTE 11 - GEOGRAPHIC INFORMATION
Univar operates in only one industry segment (chemical distribution) in the
United States, Canada, and Europe.
<TABLE>
<CAPTION>
(Thousands of dollars) UNITED STATES CANADA EUROPE
<S> <C> <C> <C>
1996
Sales $1,276,709 $401,338 $359,627
Income (loss) from operations (3,302) 18,935 10,903
Identifiable assets 406,449 149,179 184,977
Depreciation and amortization expense 22,085 2,710 4,340
Capital expenditures 14,567 4,794 3,175
1995
Sales $1,273,429 $356,089 $283,210
Income (loss) from operations (1) (34,785) 15,370 6,960
Identifiable assets 418,659 122,041 132,503
Depreciation and amortization expense 21,723 2,168 3,129
Capital expenditures 13,723 4,538 4,774
1994
Sales $1,251,549 $295,564 $255,351
Income from operations (1) 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
</TABLE>
(1) The income (loss) from operations includes reengineering charges
totaling $37.4 million and $4.5 million, respectively, in fiscal
1995 and 1994.
24
<PAGE> 25
NOTE 12 - QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
(Thousands of dollars,
except per share data) First Second Third Fourth
<S> <C> <C> <C> <C>
1996
Sales $552,932 $531,054 $479,756 $473,932
Gross margin 77,929 73,301 67,313 62,291
Net income (loss) 7,770 4,294 28 (6,192)
Net income (loss) per share $.36 $.20 $.00 ($.29)
1995
Sales $503,335 $496,820 $468,778 $443,795
Gross margin 71,260 69,927 68,964 63,522
Net income (loss) 1,497 (19,094) 935 405
Net income (loss) per share $.08 $(.88) $.04 $.02
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)
</TABLE>
The net loss in the second quarter of 1995 includes recognition of net-of-tax
reengineering charges totaling $20.6 million. These charges represent the costs
to reorganize the U.S. operating company, eliminate up to 2 layers of
management, redesign its distribution network, develop a national procurement
and materials management strategy, increase sales force efficiency, improve
gross margins, and reduce the amount of capital required to conduct ongoing
operations. Costs accrued included severance, other employee benefits, facility
closure costs, the non-cash write-down to fair value of certain facilities, and
consultant fees and expenses.
Significant items increasing income for the fourth quarter of 1995 include
settlement gains, net of related costs and deferrals totaling $2.7 million,
reduction of reserves and accruals totaling $1.4 million, costing adjustments
totaling $0.8 million, and reduction of the LIFO reserve by $0.8 million.
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 by $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).
The total of the amounts shown as quarterly earnings per share may differ from
the amount shown on the Consolidated Statement of Operations because the annual
computation is made separately and is based upon average numbers of shares and
equivalent shares outstanding for the entire year.
NOTE 13 - SETTLEMENT ACHIEVED
In fiscal 1992, Univar Europe executed a foreign currency denominated note (U.S.
dollar equivalent of $6.8 million) in connection with certain business
acquisitions. The note was contingently payable in June 1995, or could be
deferred until December 1998 if the seller did not achieve certain minimum net
worth requirements by December 1994. In accordance with contract provisions, the
seller agreed to provide indemnification to Univar Europe for certain
environmental and other undisclosed contingencies that may have existed as of
the acquisition date. Univar Europe had the right to offset these liabilities
against the note's principal balance. Univar Europe had also agreed to pay
additional consideration, in the minimum amount of $1.8 million, which was
non-interest bearing and payable in 1995.
Shortly after the acquisition, the Corporation began negotiations with the
seller to settle certain disputes regarding acquisition asset values and other
claims. When the seller subsequently entered bankruptcy, the seller's largest
secured creditor, a Swedish bank, was appointed the receiver in bankruptcy for
the
25
<PAGE> 26
seller's assets, liabilities, and contingent obligations. In addition to the
original claims and disputes with the seller, certain disputes also arose with
the receiver, due to its handling of the seller's bankruptcy proceedings and the
attachment of certain of Univar Europe's assets.
The Corporation and the receiver reached a settlement of all claims,
counterclaims and disputes on October 31,1994. As part of the settlement
agreement, the note plus accrued interest and the additional consideration
discussed above were satisfied. A settlement gain totaling $3.0 million, net of
related costs, was recorded as a recovery of representations and warranties
pertaining to environmental costs ($0.9 million), interest ($0.8 million) and
damages caused by the receiver's actions as part of the bankruptcy proceedings
($1.3 million). Univar Europe is consolidated using its financial year-end,
December 31. Accordingly, recognition of the settlement gain is included in the
Corporation's fourth quarter of fiscal 1995.
NOTE 14 - SUBSEQUENT EVENT
The Corporation announced on June 3, 1996 that it had entered into an agreement
to merge with a subsidiary of Royal Pakhoed N.V., a Netherlands limited
liability company. Pakhoed and its affiliates currently own approximately 28% of
the Corporation's common stock. The merger will be preceded by a cash tender
offer for all the outstanding common shares of the Corporation at a price of
$19.45 per common share. The tender offer will be initiated by UC Acquisition
Corp., a subsidiary of Pakhoed which was created for this transaction.
UC Acquisition Corp. has filed with the Securities and Exchange Commission a
Tender Offer Statement on Schedule 14D-1, dated June 7, 1996 relating to the
offer, and the Corporation has filed its Schedule 14D-9
Solicitation/Recommendation Statement concerning the transaction.
The offer is being made pursuant to the Agreement and Plan of Reorganization,
dated as of May 31, among the Corporation, Royal Pakhoed N.V., and UC
Acquisition Corp. The offer is subject to certain conditions described in the
Schedule 14D-1 and the Schedule 14D-9 and is expected to close not earlier than
July 15, 1996.
26
<PAGE> 27
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. While management continually
monitors the effectiveness of and compliance with its control systems, the
concept of reasonable assurance, however, incorporates an acknowledgment that
the cost of a control system must be related to the benefits derived.
The Corporation's financial statements have been audited by Arthur
Andersen LLP, independent public accountants. Management has made available to
Arthur Andersen LLP 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 LLP during
its audit were valid and appropriate.
Management has reviewed the recommendations of Arthur Andersen LLP, 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 independent
auditors to review the quality of financial reporting, the operation and
development of the internal control systems, and the work of independent
auditors.
The independent auditors regularly meet with the Audit Committee without
the presence of any other parties.
/S/ PAUL H. HOUGH
- ----------------------------------
PAUL H. HOUGH
President and Chief Executive Officer
/S/ GARY E. PRUITT
- ----------------------------------
GARY E. PRUITT
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)
27
<PAGE> 28
ARTHUR ANDERSEN LLP
801 Second Avenue, Suite 800
Seattle, WA 98104
(206) 623-8023
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Univar Corporation:
We have audited the accompanying consolidated balance sheets of Univar
Corporation (a Washington corporation) and subsidiaries as of February 29, 1996
and February 28, 1995, and the related consolidated statements of operations,
cash flows and shareholders' equity for each of the three years in the period
ended February 29, 1996. 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 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 financial position of Univar Corporation and
subsidiaries as of February 29, 1996 and February 28, 1995, and the results of
their operations and their cash flows for each of the three years in the period
ended February 29, 1996, in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
Seattle, Washington,
April 24, 1996, except for Note 14
as to which the date is June 21, 1996.
28
<PAGE> 29
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The Corporation has a classified board of twelve directors. Four
directors are elected each year for a term of three years.
DIRECTORS--TERM WILL EXPIRE IN 1996
Richard E. Engebrecht, 69, has been a director of the Corporation since
1984. Mr. Engebrecht has served as Chair of the Board of Directors of
PrimeSource Corporation, a distributor of graphic arts and photographic
supplies, since September 1994. He was Chair of Momentum Corporation, a
predecessor corporation to PrimeSource Corporation, from December 1992 to
September 1994, and was President and Chief Executive Officer of Momentum
Corporation from March 1990 through December 1992. Mr. Engebrecht served as
President and Chief Executive Officer of VWR Scientific Products Corporation
from 1986 through 1990. In addition, Mr. Engebrecht serves as a director of
PENWEST, LTD. and VWR Scientific Products Corporation.
Sjoerd D. Eikelboom, 60, has served as a director of the Corporation
since 1993. Since 1976, Mr. Eikelboom has been Senior Vice President - Corporate
Strategy and Economic Affairs of Royal Pakhoed N.V.
N. Stewart Rogers, 66, has served the Corporation as a director since
1990. Mr. Rogers was Senior Vice President of the Corporation from 1989 until
1991. He serves as Chair of PENWEST, LTD., a company involved in the
development, manufacture and marketing of carbohydrate-based chemicals for the
paper, food, textile, and pharmaceutical industries, and as a director of Fluke
Corporation, U.S. Bancorp, and VWR Scientific Products Corporation. Mr. Rogers
is the brother-in-law of James H. Wiborg, retiring Chair of the Board.
Paul H. Hough, 57, has served as a director since December 1995 and as
President and Chief Executive Officer of the Corporation since November 1995.
Since November 1995, Mr. Hough has also served as President of Van Waters &
Rogers Inc., the U.S. operating company of the Corporation. Mr. Hough was
President of Van Waters & Rogers Ltd., the Canadian operating company of the
Corporation, from 1991 to 1995.
DIRECTORS--TERM WILL EXPIRE IN 1997
James W. Bernard, 59, has served as a director of the Corporation since
1986. From 1986 to October 1995, Mr. Bernard was President and Chief Executive
Officer of the Corporation. From 1988 to 1992, Mr. Bernard was also President of
Van Waters & Rogers Inc., the U.S. operating company of the Corporation. In
addition, Mr. Bernard is a director of VWR Scientific Products Corporation and
U.S. Bank of Washington.
John G. Scriven, 53, has been a director of the Corporation since 1994.
From January 1995 to present, Mr. Scriven has served as Vice President & General
Counsel of The Dow Chemical Company. Prior to that, he was Associate General
Counsel of The Dow Chemical Company from 1993 to 1994 and Vice President of Dow
Europe S.A., Switzerland, from 1986 to 1993.
Roy E. Wansik, 52, has been a director of the Corporation since 1991.
Since 1984, Mr. Wansik has been President of Pakhoed Corporation, a chemical
storage, distribution, and services company. In addition, Mr. Wansik has served
as President of Paktank Corporation, a bulk liquid chemical storage and
distribution company, since 1982. Since 1984, Mr. Wansik has also acted as
President of EMPAK, Inc., a company engaged in environmental services and
chemical cleaning and disposal, and as President of Pakhoed Dry Bulk Terminals,
Inc., a chemical dry bulk storage and distribution company.
James H. Wiborg, 71, has served as Chairman of the Corporation's Board
since 1986 and as a director since 1966. In addition, he has acted as Chair and
Chief Strategist for VWR Corporation, a
29
<PAGE> 30
distributor of scientific equipment and supplies, since 1986. Mr. Wiborg was
Chairman and Chief Strategist of the Corporation from 1986 through 1990. Mr.
Wiborg serves as a director of PrimeSource Corporation, PACCAR, Inc., and
PENWEST, LTD. Mr. Wiborg is the brother-in-law of director N. Stewart Rogers.
DIRECTORS--TERM WILL EXPIRE IN 1998
Roger L. Kesseler, 59, has been a director of the Corporation since
1991. Since 1984, Mr. Kesseler has been the Vice President and Controller of The
Dow Chemical Company, which is engaged in the manufacture and sale of chemicals
and other products.
Curtis P. Lindley, 71, has been a director of the Corporation since
1984. Mr. Lindley is the Chair of the Ostrom Company, growers and distributors
of mushrooms. He also serves as a director of VWR Scientific Products
Corporation.
Nicolaas J. Westdijk, 55, has been a director of the Corporation since
1992. Mr. Westdijk has been Chair of the Board of Management of Royal Pakhoed
N.V., a company providing chemical storage, transportation, and distribution
services, since May 1992. Mr. Westdijk served as a member of the Board of
Management of Royal Pakhoed N.V. during 1991. He also serves as a director on
the boards of N.V. Nationale Investerings Bank and Wolters Kluwer N.V.
Andrew V. Smith, 71, has been a director of the Corporation since 1982.
Mr. Smith is a director of Airborne Express Corporation, Cascade Natural Gas
Corporation, PrimeSource Corporation, and also serves on the University of
Washington Board of Regents.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes, for the three fiscal years ending
February 29, 1996, the annual and long-term compensation paid to (i) the Chief
Executive Officer, (ii) the other four highest paid executive officers at the
end of the last fiscal year ending February 29, 1996, (iii) the former Chief
Executive Officer who retired from the Corporation during the last fiscal year,
and (iv) a former executive officer who resigned from the Corporation during the
last fiscal year.
<TABLE>
<CAPTION>
Name and Principal Annual Compensation
Position Year Salary($) Bonus ($)(1)
<S> <C> <C> <C>
Paul H. Hough 1996 $261,691 $ 74,246
President & CEO 1995 $134,962 $ 94,768
1994 $117,749 $100,514
Jeffrey Ellwood(4) 1996 $173,668 $ 94,728
V.P. 1995 $158,764 $ 61,299
1994 $140,634 $ 41,319
James L. Fletcher 1996 $200,835 0
V.P. 1995 $196,810 0
1994 $180,200 $72,849
William A. Butler 1996 $158,373 0
V.P. 1995 $147,024 0
1994 $134,125 $ 53,038
Gary E. Pruitt 1996 $158,011 0
</TABLE>
30
<PAGE> 31
<TABLE>
<CAPTION>
<S> <C> <C> <C>
V.P. 1995 $134,116 0
1994 $127,391 $ 53,038
James W. Bernard (5) 1996 $332,940 0
Retired President & CEO 1995 $482,308 0
1994 $421,769 $249,852
James P. Alampi (6) 1996 $249,975 0
Former V.P. 1995 $279,734 0
1994 $244,541 $132,605
</TABLE>
Long-Term Compensation Awards
<TABLE>
<CAPTION>
All
Restricted Other
Stock Securities Compen-
Name and Principal Awards ($) Underlying sation
Position Year (2) Options(#) ($) (3)
<S> <C> <C> <C> <C>
Paul H. Hough 1996 0 18,571 $ 1,313
President & CEO 1995 0 6,607 $ 543
1994 0 6,778 $ 634
Jeffrey Ellwood 1996 0 6,657 $ 3,066
V.P. 1995 0 0 $ 1,524
1994 0 0 $ 1,612
James L. Fletcher 1996 0 6,124 $ 10,787
V.P. 1995 0 6,607 $ 8,430
1994 0 6,778 $ 8,048
William A. Butler 1996 0 3,563 $ 1,726
V.P. 1995 0 3,844 $ 400
1994 0 3,944 $ 422
Gary E. Pruitt 1996 0 3,563 $ 5,930
Chief Financial 1995 0 3,844 $ 5,058
Officer 1994 0 3,944 $ 5,493
James W. Bernard 1996 0 20,057 $292,772
Retired President 1995 0 21,636 $ 12,174
& CEO 1994 0 19,302 $ 11,187
James P. Alampi 1996 0 13,187 $103,404
Former V.P. 1995 0 14,225 $ 5,868
1994 0 11,899 $ 5,422
</TABLE>
(1) Amounts included are paid under the Management Annual Incentive Plan (the
"Incentive Plan") administered by the Compensation Committee. The Incentive
Plan provides that the Compensation Committee may authorize annual cash or
deferred awards to full-time, salaried management employees of the
Corporation or its subsidiaries. Participation in the Incentive Plan is
subject to approval by the President of the Corporation and the
Compensation Committee. Mr. Hough was paid an annual cash incentive for
fiscal year 1996 based on the performance of Van Waters & Rogers Ltd.
31
<PAGE> 32
Mr. Ellwood was paid an annual cash incentive for calendar year 1995 based
on the performance of Univar Europe.
(2) In fiscal year 1995, the Corporation awarded restricted shares valued as
follows: Mr. Hough, $22,384; Mr. Ellwood, $29,492; Mr. Fletcher, $126,010;
Mr. Butler, $83,401; Mr. Pruitt, $83,401; Mr. Bernard, $419,087; and Mr.
Alampi, $247,993. Performance criteria for the vesting of these shares were
not met and the shares represented by these awards were forfeited and
returned to the Corporation.
(3) The Corporation's contributions during fiscal year 1996 (except as
otherwise noted) to the Company's 401(k) Plan, Employee Stock Purchase
Plan, and group term life insurance premiums were as follows: Mr.
Hough--$0, $293, and $1,020; Mr. Ellwood--$0, $0, and $3,066 (for calendar
year 1995); Mr. Fletcher--$4,171, $2,400, and $4,216; Mr. Butler--$1,507,
$0, and $219; Mr. Pruitt--$4,256, $0, and $1,674; Mr. Bernard--$2,826, $0,
and $5,388; and Mr. Alampi--$3,667, $200, and $655. Also included for Mr.
Bernard is compensation for unused vacation of $96,490, separation payments
of $166,948, and additional retirement payments of $21,120. Also included
for Mr. Alampi is compensation for unused vacation of $23,457, separation
payments of $50,425, and outplacement services of $25,000.
(4) Mr. Ellwood serves on the Managing Board of Univar Europe N.V., a
subsidiary of the Corporation. Because Univar Europe's fiscal year ran from
January 1, 1995 through December 31, 1995, Mr. Ellwood's compensation
reflects payments during calendar year 1995 and not the Corporation's
fiscal year.
(5) Mr. Bernard retired as an executive officer of the Corporation effective
October 26, 1995.
(6) Mr. Alampi resigned as an executive officer of the Corporation effective
October 26, 1995.
Option Grants In Last Fiscal Year
Set forth below is a summary of the individual grants of stock options
awarded to the named executive officers during the fiscal year ended February
29, 1996. In addition, in accordance with SEC rules, shown below are the
hypothetical gains or "option spread" that would exist for the respective
options. These gains are based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the options were granted over the full
option term.
Individual Grants
<TABLE>
<CAPTION>
% of
Total
Number of Options
Securities Granted
Underlying to
Options Employees Exercise
Granted in Fiscal Price
Name (#)(1) Year ($/share)
<S> <C> <C> <C>
Paul H. Hough 6,124 2.19% $12.50
12,447 4.45 $13.50
Jeffrey Ellwood(3) 6,657 2.38 $11.50
James L. Fletcher 6,124 2.19 $12.50
William A. Butler 3,563 1.27 $12.50
Gary E. Pruitt 3,563 1.27 $12.50
James W. Bernard 20,057 7.16 $12.50
</TABLE>
32
<PAGE> 33
<TABLE>
<CAPTION>
<S> <C> <C> <C>
James P. Alampi 13,187 4.71 $12.50
</TABLE>
<TABLE>
<CAPTION>
Rates of Stock Price
Appreciation for Option
Terms (2)
Expiration Date 5% 10%
<S> <C> <C> <C>
Paul H. Hough June 1, 2005 $ 49,672 $126,789
February 3, 2006 $109,035 $278,313
Jeffrey Ellwood April 25, 2002 $ 31,166 $ 72,630
James L. Fletcher June 1, 2005 $ 49,672 $126,789
William A. Butler June 1, 2005 $ 28,900 $ 73,767
Gary E. Pruitt June 1, 2005 $ 28,900 $ 73,767
James W. Bernard June 1, 2005 $162,684 $415,252
James P. Alampi June 1, 2005 $106,961 $273,018
</TABLE>
(1) Each of the options reflected in this table was granted to the named
executive officers pursuant to the 1992 Long-Term Incentive Plan of the
Corporation (the "1992 Plan") which was approved by the shareholders in
August 1992. Each grant was made at the fair market value of the
Corporation's common stock on the date of grant. The number of shares
granted is dependent on the recipient's salary grade and is determined in
accordance with a formula approved by the Compensation Committee. Each
option has a term of ten years and three months. Each option will vest and
become exercisable not later than the tenth anniversary of the date of
grant. The option may vest earlier than the tenth anniversary (but not
before the third anniversary of the date of grant) depending on how the
"total shareholder return" achieved by the Corporation ranks in comparison
to the "total shareholder return" of ten peer group companies selected by
the Committee. Upon the vesting of the options before the tenth
anniversary, a deferred cash incentive is paid to the named executive
officer in an amount sufficient to exercise the option, plus an increment
to cover the federal and state taxes the executive officer would be obliged
to pay with respect to the receipt of the deferred cash, assuming an
overall tax rate of 35%. This Plan provides that the recipient may elect,
upon vesting, to have shares withheld to satisfy any federal, state, or
local taxes.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises and common stock holdings are
dependent on the future performance of the Corporation's common stock and
overall stock market conditions. There can be no assurance that the amounts
reflected in this table will be achieved.
(3) Mr. Ellwood's options have a seven year term.
Aggregated Option Exercises In Last Fiscal Year And Fiscal Year End Option
Values
Set forth below is a summary of individual exercises of stock options
by the named executive officers during the last fiscal year, including the
aggregate value realized upon the date of exercise. This table includes the
number of shares covered by both exercisable and non-exercisable stock options
as of February 29, 1996. Also reported are the values for "in-the-money" options
which represent the positive spread between the exercise price of any such
existing stock options and the fiscal year end stock price.
<TABLE>
<CAPTION>
Shares Number of Unexercised
Acquired Options Held at Fiscal
on Value Year End (#)
Exercise Realized Exercisable/
Name (#) ($) Unexercisable
<S> <C> <C> <C>
</TABLE>
33
<PAGE> 34
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Paul H. Hough 0 N/A 1,403 / 18,932
Jeffrey Ellwood 0 N/A 0 / 6,657
James L. Fletcher 0 N/A 1,994 / 18,932
William A. Butler 0 N/A 1,964 / 15,069
Gary E. Pruitt 0 N/A 5,394 / 14,577
James W. Bernard 7,616 $12,076 0 / 56,728
James P. Alampi 0 N/A 0 / 34,024
</TABLE>
<TABLE>
<CAPTION>
Value of Unexercised
In-the-Money Options
Held at Fiscal Year End ($)
Exercisable/
Name Unexercisable
<S> <C>
Paul H. Hough $1,012 / $0
Jeffrey Ellwood $0 / $0
James L. Fletcher $0 / $0
William A. Butler $0 / $0
Gary E. Pruitt $13,345 / $0
James W. Bernard $0 / $0
James P. Alampi $0 / $0
</TABLE>
Univar Corporation Retirement Plan and Supplemental Benefits Plan
The table below shows the estimated annual benefits payable on
retirement under the Univar Corporation Retirement Plan ("Retirement Plan") to
persons in specified remuneration and years-of-service classifications. The
retirement benefits shown do not include deductions for FICA, Federal Income
Tax, state or city taxes and are not offset by Social Security payments. These
benefits are based upon retirement at age 65 during 1995 and the payment of a
single-life annuity to the employee. All regular, full-time employees not
members of a collective bargaining unit (except for bargaining units
participating in all of Univar's benefits) are eligible to participate in the
Retirement Plan. As of February 29, 1996, approximately 1,855 employees were
eligible to participate in the Retirement Plan.
<TABLE>
<CAPTION>
Highest Average
Annual Earnings
During Any
Consecutive
Sixty Months Years of Service
of Employment 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$100,000 $ 23,933 $ 31,910 $ 39,888 $ 43,638 $ 47,388
200,000 49,433 65,910 82,388 89,888 97,388
300,000 74,933 99,910 124,888 136,138 147,388
400,000 100,433 133,910 167,388 182,388 197,388
500,000 125,933 167,910 209,888 228,638 247,388
600,000 151,433 201,910 252,388 274,888 297,388
700,000 176,933 235,910 294,888 321,138 347,388
</TABLE>
With certain exceptions, Section 415 of the Internal Revenue Code
currently limits pensions which may be paid under plans qualified under the
Internal Revenue Code to an annual benefit of $120,000 (indexed annually).
Section 401(a)(17) of the Internal Revenue Code limits the amount of annual
compensation which may be considered in determining qualified plan pensions to
$150,000 (indexed annually). The Board of Directors, upon the recommendation of
the Compensation Committee, has established a Supplemental Benefits Plan for
certain designated highly compensated employees to
34
<PAGE> 35
whom these limits apply, or will apply in the future, so that these employees
will obtain the benefit that would have applied in the absence of these limits.
Only eleven retired employees of the Corporation have received payments under
the Supplemental Benefits Plan during the past five fiscal years. Such payments
have aggregated $341,366 for one participant (the only executive officer within
the group) and $483,129 for the other ten retirees, collectively, for the
five-year period ended February 29, 1996.
The Compensation Committee has approved the adoption of a Trigger Rabbi
Trust for the benefit of employees of Univar Corporation and Van Waters & Rogers
Inc. who have been designated as participants in the Supplemental Benefits Plan.
In the event of a change of control of the Corporation, the Trigger Rabbi Trust
would require immediate and full funding by Univar Corporation of the benefits
to be paid under the Supplemental Benefits Plan. Similarly, Van Waters & Rogers
Ltd. has adopted its own Supplemental Benefits Plan with a trust arrangement
providing comparable benefits.
Compensation of executive officers covered by the Retirement Plan would
include salaries and incentives as reported in the Summary Compensation Table.
The following are the years of service of the persons named in the Summary
Compensation Table under the Retirement Plan: Mr. Fletcher, 7 years; Mr. Butler,
5 years; Mr. Pruitt, 17 years; Mr. Bernard, 38 years; and Mr. Alampi, 17 years.
Mr. Hough has 35 years of service, and as a former employee of Van Waters &
Rogers Ltd., participates in both the Univar Corporation and Van Waters & Rogers
Ltd. plans. Upon retirement, Mr. Hough would receive similar retirement benefits
as shown above.
As an employee of the Univar Europe N.V. group, the Corporation's
European subsidiary, Mr. Ellwood would receive retirement benefits under an
employer provided pension plan. Mr. Ellwood has 21 years of service. Under this
pension plan, normal retirement is reached at age 60, and the pension for Mr.
Ellwood equals two-thirds of the employee's final salary, exclusive of any bonus
payments.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of June 1, 1996 regarding
the beneficial ownership of the Corporation's common stock by the Corporation's
directors including the Corporation's Chief Executive Officer, each named
executive officer, and by the directors and executive officers as a group. As of
June 1, 1996, there were 21,735,415 shares of common stock issued and
outstanding. Except to the extent each listed individual's shares are subject to
community property laws or as otherwise indicated, beneficial ownership
represents sole voting and sole investment power with respect to no par value
common stock, the Corporation's only outstanding class of stock.
<TABLE>
<CAPTION>
Shares
Beneficially Percentage of
Owned Class
DIRECTORS
<S> <C> <C>
Richard E. Engebrecht (1) 77,574 *
Sjoerd D. Eikelboom 0 N/A
N. Stewart Rogers (2) 302,219 1.39%
Paul H. Hough (3) 56,525 *
James W. Bernard (4) 162,470 *
John G. Scriven 0 N/A
Roy E. Wansik 0 N/A
Roger L. Kesseler 500 *
Curtis P. Lindley (5) 214,804 *
Nicolaas J. Westdijk (6) 6,106,000 28.09%
James H. Wiborg (7) 446,865 2.06%
Andrew V. Smith (8) 24,409 *
</TABLE>
EXECUTIVE OFFICERS NAMED IN THE SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C>
Jeffrey Ellwood 0 N/A
</TABLE>
35
<PAGE> 36
<TABLE>
<CAPTION>
<S> <C> <C>
James L. Fletcher (9) 19,817 *
William A. Butler (10) 5,936 *
Gary E. Pruitt (11) 21,176 *
James P. Alampi(12) 4,556 *
All Directors and Executive
Officers as a
Group (18 persons) (13) (14) 7,393,703 34.02%
</TABLE>
* less than 1.00%
(1) Mr. Engebrecht's total includes stock options to purchase 8,020 shares
which are exercisable within sixty days and were granted under the 1993
Non-Employee Director Stock Option Plan.
(2) Mr. N. Stewart Rogers has voting and investment power as a trustee with
respect to 18,816 shares beneficially owned by his grandchildren and his
mother. Mr. N. Stewart Rogers disclaims beneficial ownership of these
18,816 shares, but such shares are included in his total above as required
by SEC regulations.
(3) Mr. Hough's total includes stock options to purchase 1,403 shares which are
exercisable within sixty days and were granted under the 1986 Long-Term
Incentive Stock Plan.
(4) Mr. Bernard disclaims beneficial ownership of 76,200 shares owned by his
spouse, but such shares are included in his total above as required by SEC
regulations.
(5) Mr. Lindley disclaims beneficial ownership of 4,336 shares owned by his
spouse, but such shares are included in his total above as required by SEC
regulations.
(6) Mr. Westdijk's total includes 3,333,333 shares held by Pakhoed USA, Inc.
and 2,772,667 shares held by Pakhoed Investeringen B.V., wholly owned
subsidiaries of Royal Pakhoed N.V., as to which Mr. Westdijk shares voting
and investment power as Chair of the Board of Management of Royal Pakhoed
N.V. These shares are deemed to be beneficially owned by Mr. Westdijk in
accordance with SEC regulations, but he disclaims such beneficial
ownership.
(7) Mr. Wiborg shares voting and investment power as a co-trustee for 65,743 of
these shares. He disclaims beneficial ownership of these 65,743 shares and
of 142,000 shares owned by his spouse, but such shares are included in his
total above as required by SEC regulations.
(8) Mr. Smith's total includes stock options to purchase 7,409 shares which are
exercisable within sixty days and were granted under the 1993 Non-Employee
Director Stock Option Plan.
(9) Mr. Fletcher's total includes stock options to purchase 1,994 shares which
are exercisable within sixty days and were granted under the 1986 Long-Term
Incentive Stock Plan.
(10) Mr. Butler's total includes stock options to purchase 1,964 shares which
are exercisable within sixty days and were granted under the 1986 Long-Term
Incentive Stock Plan.
(11) Mr. Pruitt's total includes stock options to purchase 5,394 shares which
are exercisable within sixty days and were granted under the 1986 Long-Term
Incentive Stock Plan.
(12) Mr. Alampi resigned as an executive officer of the Corporation effective
October 26, 1995.
(13) Includes 3,333,333 shares held by Pakhoed USA, Inc. and 2,772,667 shares
held by Pakhoed Investeringen B.V., over which Mr. Westdijk shares voting
and investment control.
(14) Includes 18,775 shares for which certain directors and executive officers
have stock options exercisable within sixty days.
36
<PAGE> 37
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Listed in the following table are the only known beneficial owners as
of June 1, 1996 of more than five percent (5%) of the Corporation's outstanding
stock based on 21,735,415 shares outstanding on June 1, 1996. The Corporation
knows of no other person or "group," as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, that is the beneficial owner of more than
five percent of the Corporation's common stock.
<TABLE>
<CAPTION>
Name and Address of Title of Amount and Nature of Percent
Beneficial Owner Class Beneficial Ownership of Class
<S> <C> <C> <C>
The Dow Chemical Common Stock 3,900,000 17.94%
Company (1)
Willard H. Dow Ctr.
Midland, MI 48674
Pakhoed USA, Inc. (2) Common Stock 3,333,333 15.34%
2000 W. Loop S.
Suite 2200
Houston, TX 77027
Pakhoed Invest- Common Stock 2,772,667 12.76%
eringen B.V. (2)
c/o Royal Pakhoed N.V.
333 Blaak
3011 GB Rotterdam
The Netherlands
</TABLE>
(1) The shares are subject to a Standstill Agreement. See "Agreements with
The Dow Chemical Company" below.
(2) Pakhoed USA, Inc. and Pakhoed Investeringen B.V. are each a wholly
owned subsidiary of Royal Pakhoed N.V. The shares held by each
corporation are subject to a Standstill Agreement. See "Agreements with
Royal Pakhoed N.V." below.
The Corporation has previously entered into standstill agreements with
The Dow Chemical Company ("Dow") and Pakhoed which have been modified by the
Reorganization Agreement, a confidentiality agreement with Pakhoed (described
below), and a consent executed by the Corporation in favor of both Dow and
Pakhoed. Pursuant to these agreements, the Corporation has modified the
standstill agreements to permit a tender offer to the Corporation's shareholders
by UC Acquisition Corp. ("Buyer"), an affiliate of Pakhoed. In addition, the
agreement with Dow provides that Dow, as appropriate, will (i) tender all Shares
held of record or beneficially by it as of May 31, 1996, or thereafter, pursuant
to Buyer's Offer; (ii) provide all consents and approvals pursuant to a certain
Distributor Agreement by and between Dow and Van Waters & Rogers Inc., dated
March 8, 1996, required to consummate the Merger and the transactions
comtemplated by the Reorganization Agreement; and (iii) at Pakhoed's request (a)
exercise its option to purchase all or such portion required of the 101,874
shares of Series A Junior Participating Convertible Preferred Shares (the
"Preferred Shares"), which Dow is entitled to purchase pursuant to the Amended
and Restated Agreement of Purchase and Sale of Stock (the "Stock Purchase
Agreement") entered into by and between Dow and the Corporation, dated May 13,
1994, (b) convert all the Preferred Shares acquired pursuant to the Stock
Purchase Agreement into Shares, and (c) tender all Shares acquired pursuant to
such conversion of the Preferred Shares to Buyer pursuant to Buyer's Offer. If
such request is not made by Pakhoed, and the option is not exercised, Pakhoed,
or the Surviving Corporation, (as defined below) has agreed to pay Dow on
consummation of the merger described in the Reorganization Agreement, the
difference between the aggregate exercise price of the option to acquire the
Preferred Shares and the aggregate price that would have been paid in
37
<PAGE> 38
the tender offer for the Shares which would have otherwise been issued pursuant
to the conversion of the Preferred Shares. See the Schedule 14D-1 and Schedule
14D-9 filings made in connection with the Tender Offer, which is described
further at the beginning of this report.
The following descriptions of the original standstill agreements
continue to apply to the extent they have not been modified by the agreements
described above and would also continue in effect in the event the tender offer
is not consummated or otherwise terminated.
AGREEMENTS WITH THE DOW CHEMICAL COMPANY
The Corporation has sold to The Dow Chemical Company ("Dow") 3,900,000
shares of the Corporation's common stock. Pursuant to the Amended and Restated
Agreement of Purchase and Sale of Stock with Dow (the "Purchase Agreement"), the
Corporation may also sell to Dow, and Dow may purchase from the Corporation, up
to an additional 101,874 shares of Series A Preferred Stock (which are
convertible on a five for one basis into 509,370 shares of common stock)
pursuant to a put option (the "Put Option"). Terms beginning with an initial
capital letter are defined in either the Purchase Agreement or the Dow
Standstill Agreement described below, both of which have been filed with the
Securities and Exchange Commission.
The following is a summary of certain provisions of the Purchase
Agreement. This summary is not intended to be complete and is qualified in its
entirety by the Purchase Agreement.
Sale of Original Shares and Put Option for Additional Shares
In 1991, Dow purchased 1,900,000 shares of the Corporation's common
stock. In 1994, Dow purchased an additional 2,000,000 shares of the
Corporation's common stock.
Dow and the Corporation have agreed that, at any time within the
three-year period ending May 12, 1997, the Corporation can put to Dow, or Dow
can call, up to 101,874 shares of Series A Preferred Stock (the "Additional
Shares"). The price per share will be $93.70.
Dow has agreed that it will pay to the Corporation $350,000 per year,
in arrears, for each of the three years ending May 12, 1997, in the event the
Corporation does not elect to put the Series A Preferred Stock to Dow, or in the
event Dow does not call said Series A Preferred Stock. If there is a put or call
of the Series A Preferred Stock during said three year period, the annual fee
shall be prorated accordingly.
The shares of Series A Preferred Stock (i) do not have any right to
vote, (ii) receive dividends in an amount equal to five times the dividend paid
on each share of common stock (if, as, and when paid on the common stock), and
(iii) are convertible at any time by the holder into five shares of common
stock. Further, the Series A Preferred Stock can be so converted by the
Corporation at any time after three years after issuance and can be redeemed in
whole or in part by the Corporation at any time. The Corporation has agreed that
it will not convert the Series A Preferred Stock into common stock if, following
said conversion, Dow would own in excess of 19.9% of the issued and outstanding
common stock of the Corporation.
The purchase price and number of Additional Shares are subject to
adjustment in the event the Corporation declares a stock split or any
extraordinary dividend payable in stock, or approves any capital reorganization
or reclassification, consolidation or merger, or sale of all or substantially
all of its assets. Dow Standstill Agreement
Dow and the Corporation have also entered into a Standstill Agreement
(the "Dow Standstill Agreement") which provides that Dow will not acquire
beneficial ownership of any Voting Securities of the Corporation without the
approval of a majority of the directors who are not affiliated with either
Pakhoed or Dow (the "Unaffiliated Directors") if such acquisition would result
in Dow owning more than 21% of the Common Stock Equivalents of the Corporation.
Dow may acquire additional Voting
38
<PAGE> 39
Securities above the 21% limit by making a tender offer for shares of Voting
Securities which is made to all shareholders, is payable in cash, and is
accepted by shareholders owning two-thirds of the outstanding common stock
excluding shares held by Dow or Pakhoed and any shares not tendered by the Core
Shareholders (as defined in "Agreements with Royal Pakhoed N.V." below). Dow is
also permitted to make a tender offer in response to a tender offer by a third
party for an equivalent number of shares. In the event of a third party tender
offer, Dow's percentage limitation would be increased to 27% and the Corporation
would have the right to buy back shares acquired by Dow in excess of 27%.
The Dow Standstill Agreement also provides that Dow will not (without
approval of the Unaffiliated Directors) (i) deposit any Voting Securities in a
voting trust or subject them to a voting agreement except a trust or agreement
between Dow and its affiliates, (ii) join any group for the purpose of
acquiring, holding, or disposing of Voting Securities within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, (iii) induce any other
person to initiate a tender offer for any securities of the Corporation, or to
effect any change of control of the Corporation or take any action for the
purpose of convening a shareholders' meeting, or (iv) acquire more than 1% of
any class of securities of any entity that is publicly disclosed to be the
beneficial owner of 5% or more of the Voting Securities.
Under the Dow Standstill Agreement, Dow has the right to have the
composition of the Board of Directors reflect the proportional ownership
interest of Dow. Accordingly, Mr. Roger L. Kesseler and Mr. John G. Scriven have
served on the Board of the Corporation since 1991 and 1994, respectively.
Pursuant to the Dow Standstill Agreement, Dow has the right to maintain
its ownership at its percentage which may vary from time to time, but, as
described above, is generally capped at 21%. Dow has the preemptive right to
purchase shares from the Corporation whenever the Corporation proposes to sell
shares in a public offering or a private placement. The Corporation has
established a reserve of 21% of the Corporation's unissued shares to accommodate
the possibility that future sales of shares might be made by the Corporation
giving rise to Dow's preemptive right. At this time, the Corporation has no plan
to sell shares to a third party or in the public market (other than pursuant to
employee benefit plans such as those described elsewhere in this Proxy
Statement). Further, Dow has the right to participate in certain repurchases of
shares by the Corporation and in certain public offers or private placements by
the Corporation.
AGREEMENTS WITH ROYAL PAKHOED N.V.
The Corporation has entered into various agreements with Royal Pakhoed
N.V. and its wholly owned subsidiaries, Pakhoed USA, Inc. and Pakhoed
Investeringen B.V. (collectively, "Pakhoed") including a Standstill Agreement
which is substantially the same as the Dow Standstill Agreement. Pakhoed also
has entered into Shareholder Agreements (the "Core Shareholder Agreements") with
Directors Bernard, Engebrecht, Lindley, Rogers, and Wiborg (and their respective
wives), with former director Robert S. Rogers and his wife, with M.M. Harris
(now Director Emeritus) and his wife, and with Nat S. Rogers and his wife (both
deceased) (parents of Robert S. and N. Stewart Rogers and the parents-in-law of
James H. Wiborg). These shareholders and their spouses as noted are referred to
as the "Core Shareholders."
Certain terms used in this Proxy Statement with initial capital letters
are defined in the agreements mentioned above. Each of those agreements has been
filed with the Securities and Exchange Commission.
Pakhoed Standstill and Core Shareholder Agreements
The Standstill Agreement provides that Pakhoed will not acquire
beneficial ownership of any Voting Securities of the Corporation if such
acquisition would result in Pakhoed owning more than 35% of the Common Stock
Equivalents of the Corporation. Pakhoed may acquire additional Voting Securities
above the 35% limit by making a tender offer for shares of Voting Securities in
response to a third-party tender offer for such securities, in which event the
percentage limitation will increase to 45% and Pakhoed may retain shares over
45% to the extent the Corporation elects not to repurchase such shares pursuant
to its right to do so under the Standstill Agreement. Pakhoed may also acquire
shares in
39
<PAGE> 40
excess of the percentage limitation either by receiving approval of five-eighths
of the directors of the Corporation who are not affiliated with Pakhoed (the
"Unaffiliated Directors"), or by a tender offer (without approval by the
Unaffiliated Directors) which is (i) made to all shareholders, (ii) payable in
cash, and (iii) accepted by shareholders owning two-thirds of the outstanding
common stock excluding shares held by Pakhoed and shares not tendered by the
Core Shareholders.
Subject to the foregoing restrictions, Pakhoed may acquire shares by
open market purchase, partial tender offer, or private transaction. In response
to an increase in the number of outstanding shares of the Corporation's common
stock, Pakhoed may purchase unissued shares of common stock under certain
circumstances.
The Standstill Agreement also provides that Pakhoed will not (without
prior written approval of the Board, including the concurrence of a majority of
the Unaffiliated Directors) (i) deposit any Voting Securities into a voting
trust or subject them to a voting agreement except a trust or agreement between
Pakhoed and its affiliates or as required by Netherlands law, (ii) join any
group for the purpose of acquiring, holding, or disposing of Voting Securities
within the meaning of Section 13(d) of the Securities Exchange Act of 1934,
(iii) induce any other person to initiate a tender offer for any securities of
the Corporation, or to effect any change of control of the Corporation, or take
any action for the purpose of convening a shareholders' meeting, or (iv) acquire
more than 1% of any class of securities of any entity that is publicly disclosed
to be the beneficial owner of 5% or more of the Voting Securities of the
Corporation.
The Standstill Agreement requires the Corporation to provide Pakhoed
with representation on the Board proportionate to its stock ownership.
Accordingly, during the Corporation's last fiscal year, Messrs. Eikelboom,
Wansik, and Westdijk held three of twelve seats on the Board. Directors
designated by Pakhoed are entitled to representation on any committee of the
Board at Pakhoed's request. Pakhoed is required to vote its shares so as to
afford the Corporation's other shareholders with proportionate representation.
The Core Shareholder Agreements provide that the Core Shareholders will
vote their shares in favor of Pakhoed's representatives, as described in the
preceding paragraph, in consideration for the right of the Core Shareholders to
sell their shares to Pakhoed after a tender offer by Pakhoed made in accordance
with and satisfying the requirements of the Standstill Agreement.
The terms of the Standstill Agreement have been modified by a
Confidentiality Agreement, dated April 12, 1996 between the Corporation and
Pakhoed. The Confidentiality Agreement, which was executed in connection with
the Tender Offer, provides that Pakhoed may not, without the prior written
consent of the Corporation, disclose to any person other than Pakhoed and its
representatives, the fact that the Corporation and Pakhoed were considering a
transaction. The Confidentiality Agreement further provides that Pakhoed is to
keep confidential, subject to being legally compelled to disclose, certain
documents provided to Pakhoed by the Corporation in connection with the proposed
transaction (the "Evaluation Documents"). In the event that Pakhoed is legally
compelled to disclose any of the Evaluation Documents, it is required to notify
the Corporation so that the Corporation can take such measure to protect the
confidentiality of the Evaluation Documents.
In connection with a Tender Offer Protocol, attached as Exhibit B to
the Confidentiality Agreement (the "Protocol"), the Confidentiality Agreement
also provides that Pakhoed, until October 30, 1996 (which was extended to April
30, 1998), except with the written approval of the Corporation, agrees not to:
(i) acquire any of the stock or other securities of the Corporation other than
as permitted by the 1986 Standstill Agreement, but specifically excluding the
right to make a tender offer pursuant to Section 2.10 of the 1986 Standstill
Agreement, (ii) submit to the Corporation or any other person any proposal for a
transaction between Pakhoed and Company or involving any of its securities
holders other than in accordance with the Protocol, (iii) solicit proxies or
shareholder consents with respect to the securities of the Corporation or become
a "participant" in any "solicitation" or a member of a "group" (as such terms
are used in Regulation 14A and Section 13(d)(3) of the Exchange Act) in
opposition to the recommendation of the majority of the Unaffiliated Directors,
or (iv) otherwise assist, advise, encourage,
40
<PAGE> 41
or act alone or in concert with any other person in acquiring or attempting to
acquire, directly or indirectly, control of the Corporation or its assets.
Finally, the Confidentiality Agreement provides that if certain
conditions set forth in Section 2.1 and 2.2 of the Protocol are satisfied, the
standstill provisions of the Confidentiality Agreement automatically extends to
April 30, 1998. These conditions were subsequently satisfied on April 26, 1996.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Change of Control Agreements
The Board of Directors has unanimously approved change of control
agreements (the "Agreements") between the Corporation and certain of the named
executive officers of the Corporation. At February 29, 1996, the Corporation had
Agreements in place with each of the then employed named executive officers (the
"Executives"). Each Agreement provides that the Executive will receive
compensation for 30 months if his employment is terminated (voluntarily or
involuntarily) for any reason other than gross misconduct, death, permanent and
total disability, or reaching age 65, provided such termination occurs within 24
months after certain defined events which might lead to a change of control of
the Corporation. The compensation will be paid at a rate equal to the
Executive's then current salary and target incentive. The compensation is
subject to a minimum annual rate of not less than the Executive's average
compensation for the preceding three calendar years, and is subject to reduction
if the aggregate present value of all payments would exceed three times the
Executive's "annualized includible compensation", as defined in Section 280G of
the Internal Revenue Code, for the Executive's most recent five taxable years.
The Executive will also continue to have "employee" status for the 30-month
period and will be entitled to retain most employee benefits and rights during
this period.
The Corporation may cease payments in the event the Executive breaches
certain non-competition or confidentiality covenants. The Corporation also has
the right to terminate the Agreements upon a one-year notice, except as to
rights already accrued as a result of an event which has triggered the change of
control provisions of the Agreements. The Board of Directors believes that the
terms and conditions of the Agreements are in the best interest of the
Corporation because the Agreements will enable the Executives to continue to
focus on activities providing for the maximum long-term value to the
Corporation's shareholders, even when faced with the possible change of control
of the Corporation.
On May 31, 1996, the Corporation executed letter amendments to the
Change of Control Agreements to clarify and make provisions for certain payments
to be made in the event the Offer is consummated (the "Letter Amendments"). The
Letter Amendments, among other provisions: (i) clarify that the consummation of
the Offer is a "change in control," (ii) provide for payment of the 30 months of
base compensation, target incentives and benefits in a lump sum upon
consummation of the Offer rather than upon termination of the Executive, and
(iii) provide for a "Gross-Up Payment" to each Executive to cover the effect of
excise and other taxes on the payments made pursuant to the Change of Control
Agreements, as amended, the conversion of outstanding stock options and other
payments likely to be treated as "parachute payments" for federal income tax
purposes, recognizing that payments in excess of the "three times annualized
includible compensation" may be paid to these individuals. Absent a specific
agreement to the contrary, the Letter Amendments provide that payments pursuant
to the revised agreements shall be in lieu of any other severance benefit which
they presently are entitled to in the event of a termination within 30 months
after the consummation of the Offer and by execution of the Letter Agreements
will also grant a release to the Surviving Corporation of any other claim,
right, or cause of action relating to his employment with the Corporation.
As a result of the Letter Amendments, the estimated amounts payable to
the following executive officers in the event of a change of control would be
approximately: Mr. Hough, $4,500,000; Mr. Ellwood, $1,000,000; Mr. Fletcher,
$1,550,000; Mr. Butler, $1,200,000; Mr. Pruitt, $1,500,000; and Mr. MacAfee,
$1,150,000. These amounts include payments for base compensation, target
incentives and
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<PAGE> 42
benefits, and cash payments for surrender of stock options, restricted stock
awards, and deferred cash incentives pursuant to the Corporation's stock option
plans. The foregoing amounts do not include the gross up payments which, when
determined, will equal the related excise and other taxes attributable to
amounts deemed to be parachute payments.
Employment Separation Agreements
In connection with Mr. Bernard's retirement, he and the Corporation
entered into a separation agreement. Under the agreement, Mr. Bernard (a)
receives monthly payments of $41,737 from November 1995 through October 1996,
(b) remained eligible to participate in the Management Annual Incentive Plan for
fiscal year 1996, (c) was deemed vested in 802 non-qualified stock options
granted April 9, 1990, and (d) is entitled to an additional retirement payment
equal to the difference between his monthly pension benefits under the
Retirement Plan and the amount of benefits he would have received if he retired
at age 62. Mr. Bernard earned no payment under the Incentive Plan for fiscal
year 1996. Mr. Bernard's additional retirement payments of $5,280 per month
commenced in November 1995 and will continue as long as monthly benefits are
paid pursuant to the Retirement Plan.
In connection with Mr. Alampi's resignation, he and the Corporation
also entered into a separation Agreement. Under the Agreement, Mr. Alampi
(a) terminated his employment with the Corporation effective December 30,
1995, (b) receives monthly payments of $25,212 per month from January 1996
through October 1996, (c) remained eligible to participate in the Management
Annual Incentive Plan for fiscal year 1996, (d) is entitled to receive
limited outplacement services, and (e) was deemed vested in 3,348 shares of
restricted stock and 3,348 non-qualified stock options granted June 21,
1991. Mr. Alampi earned no payment under the Incentive Plan for fiscal year
1996.
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<PAGE> 43
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: June 21, 1996 /s/ Paul H. Hough
------------------------- -----------------
Paul H. Hough
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: June 21, 1996 /s/ Gary E. Pruitt
-------------------- ------------------
Gary E. Pruitt,
Chief Financial Officer
(Principal Financial and Accounting Officer)
DIRECTORS
James W. Bernard
Sjoerd D. Eikelboom
Richard E. Engebrecht
Paul H. Hough
Roger L. Kesseler
Curtis P. Lindley
N. Stewart Rogers
John G. Scriven
Andrew V. Smith
Roy E. Wansik
Nicolaas J. Westdijk
James H. Wiborg
By:/s/ William A. Butler
-------------------------------------
William A. Butler, Attorney-in-Fact
Power of Attorney dated May 2, 1996
------------
43
<PAGE> 44
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
Page No.
- --------------------------------------------------------------------------------
Exhibits identified in parentheses below, on file with the Securities and
Exchange Commission, are incorporated herein by reference as exhibits hereto.
<S> <C>
(2.1) Agreement and Plan of Reorganization, dated as of May 31, 1996 among
the Registrant, Royal Pakhoed N.V. and UC Acquisition Corp. (Filed
as Exhibit 1 of the Registrant's Schedule 14D-9, filed with the
Securities and Exchange Commission June 7, 1996, and incorporated by
this reference in its entirety.)
(2.2) Form of Merger Agreement. (Filed as Exhibit 4 of the Registrant's
Schedule 14D-9, filed with the Securities and Exchange Commission
June 7, 1996, and incorporated by this reference in its entirety.)
(3.1) Articles of Incorporation of the Registrant (filed as an attachment
to the Registrant's proxy statement dated July 7, 1995).
(3.2) By-laws of the Registrant (filed as Exhibit 3.3(ii) to Registration
Sttement on Form 8-B of the Registrant (then known as New Univar
Corporation).
(10.2) Univar Corporation 1986 Long-Term Incentive Stock Plan (filed with
Registration Statement on Form S-8, File No. 33-08523).
(10.3) 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).
(10.4) 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).
(10.5) 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).
(10.6) 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).
(10.7) 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).
* 10.8 Notice of Transfer and Addendum to Standstill Agreement between
Univar Corporation and Pakhoed Investeringen B.V., dated as of June
3, 1992.
(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).
* 10.11 Amended and Restated Univar Corporation Supplemental Benefits Plan,
dated as of May 1,1996.
(10.12) Agreements relating to compensation in the event of a change in
control of the Corporation between the Corporation and Messrs. James
L. Fletcher and William A. Butler (filed as Exhibit 10.11 to Form
10-K dated May 26, 1995).
(10.13) Agreement relating to compensation in the event of a change in
control of the Corporation between the Corporation and H. Drew
MacAfee dated as of March 2, 1995 (filed as Exhibit 10.12 to Form
10-K dated May 26, 1995).
</TABLE>
44
<PAGE> 45
<TABLE>
<CAPTION>
Exhibit
Number Description
Page No.
- --------------------------------------------------------------------------------
<S> <C>
(10.14) Agreement relating to compensation in the event of a change in
control of the Corporation between Univar United Kingdom Ltd. and
Jeffrey Ellwood, dated as of March 2, 1995 (filed as Exhibit 10.13
to Form 10-K dated May 26, 1995).
* 10.15 Agreement 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 May 1, 1996.
* 10.16 Agreement relating to compensation in the event of a change in
control of the Corporation between the Corporation and Mr. Gary E.
Pruitt, dated as of March 2, 1995.
* 10.17 Agreement relating to compensation in the event of a change in
control of the Corporation between Van Waters & Rogers Ltd. and Mr.
Larry R. Bullock, dated as of May 1, 1996.
(10.18) Univar Corporation Stock Purchase Plan as amended and restated as of
May 31, 1994 (filed with Registration Statement on Form S-8, File
No. 33-53907).
(10.19) Univar Corporation Uni$aver Tax Savings Investment Plan (filed with
Registration Statement on Form S-8, File No. 33-34511).
(10.20) Van Waters & Rogers Ltd./Univar Corporation Stock Purchase Plan
(filed with Registration Statement on Form S-8, File No. 2-71255).
(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).
(10.22) 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).
* 10.23 Univar Corporation 1992 Long-Term Incentive Plan as amended and
restated as of February 28, 1996.
* 10.24 Van Waters and Rogers Ltd. Supplemental Benefits Plans dated June
25, 1993, as amendedand restated as of May 7, 1996.
(10.25) Univar Corporation 1993 Non-Employee Director Stock Option Plan
(filed as Exhibit 4 to Registration Statement of Form S-8 dated May
31, 1994, File No. 33-53907)
(10.26) 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.)
(10.27) 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)
(10.28) 1995 Incentive Stock Plan dated April 25, 1995 (filed as Exhibit 4
to Registration Statement on Form S-8, File No. 33-03199).
(10.29) Form of Director's and Officer's Agreement (Filed as Exhibit 2 to
the Registrant's Schedule 14D-9, filed with the Securities and
Exchange Commission June 7, 1996, and incorporated by this reference
in its entirety.)
(10.30) Agreement with The Dow Chemical Company, dated May 31, 1996. (Filed
as Exhibit 3 to the Registrant's Schedule 14D-9, filed with the
Securities and Exchange Commission June 7, 1996, and incorporated by
this reference in its entirety.)
</TABLE>
45
<PAGE> 46
<TABLE>
<CAPTION>
Exhibit
Number Description
Page No.
- --------------------------------------------------------------------------------
<S> <C>
(10.31) Form of Letter to the Registrant's officers clarifying and amending
certain change of control agreements, list of executive officers,
and schedule of payments. (Filed as Exhibit 7 to the Registrant's
Schedule 14D-9, filed with the Securities and Exchange Commission
June 7, 1996, and incorporated by this reference in its entirety.)
(10.32) Confidentiality Agreement, dated April 12, 1996 between the
Registrant and Royal Pakhoed N.V. (Filed as Exhibit 12 to the
Registrant's Schedule 14D-9, filed with the Securities and Exchange
Commission June 7, 1996, and incorporated by this reference in its
entirety.)
(10.33) Due Diligence Agreement dated April 22, 1996 between the Registrant
and Royal Pakhoed N.V. (Filed as Exhibit 13 to the Registrant's
Schedule 14D-9, filed with the Securities and Exchange
* 22 Subsidiaries of Registrant.
24.1 Consent of Independent Public Accountants - Arthur Andersen LLP
24.3 Consent of Independent Public Accountants - Arthur Andersen LLP
* 25 Power of Attorney.
(27) Financial Data Schedule
* 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.
(99.1) Press Release of Registrant issued June 3, 1996 (Filed as Exhibit 11
to the Registrant's Schedule 14D-9, filed with the Securities and
Exchange Commission June 7, 1996, and incorporated by this reference
in its entirety.)
</TABLE>
* -filed as Exhibits 10.8, 10.11, 10.15, 10.16, 10.17, 10.23, 10.24, 22, 25,
28.2, 28.4
respectively, to Form 10-K dated May 17, 1996.
46
<PAGE> 1
EXHIBIT 24.1
ARTHUR ANDERSEN LLP
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 10-K of our reports dated April 24, 1996, except as
related to Note 14 of the consolidated financial statements as to which the date
is June 21, 1996, included in Registration Statement File Nos. 33-53907,
33-03199, 33-54883, 33-34511, 33-53905. It should be noted that we have not
audited any financial statements of Univar Corporation subsequent to February
29, 1996 or performed any audit procedures subsequent to April 24, 1996, the
date of our report, except as related to Note 14 of the consolidated financial
statements as to which the date is June 21, 1996.
Arthur Andersen LLP
Seattle, Washington,
June 21, 1996
47
<PAGE> 1
EXHIBIT 24.3
ARTHUR ANDERSEN LLP
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 June 7, 1996, included in
Registration Statement File No. 33-34511. It should be noted that we have not
audited any financial statements of the plan subsequent to December 31, 1995 or
performed any audit procedures subsequent to the date of our report.
Seattle, Washington,
June 21, 1996
48
<PAGE> 1
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, 1996
[ ] 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
----------------------------------------
51
<PAGE> 2
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$AVER TAX SAVINGS INVESTMENT PLAN
Date: June 21, 1996 By: /s/ Gary E. Pruitt
--------------- --------------------
Gary E. Pruitt
Chief Financial Officer
Chairman of Administrative Committee
52
<PAGE> 3
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
53
<PAGE> 4
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, 1995 and 1994, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1995. These
financial statements and the supplemental schedules referred to below are the
responsibility of the Plan's management. 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 available for plan benefits of the Plan as
of December 31, 1995 and 1994, and the changes in its net assets available for
plan benefits for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
54
<PAGE> 5
-2-
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the statements
of net assets available for plan benefits and the statement of changes in net
assets available for plan benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits of
each fund. The supplemental schedules and fund information have been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Seattle, Washington,
June 7, 1996
55
<PAGE> 6
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------------------
Growth International Lifepath Lifepath Lifepath
Stock Equity S&P 500 2000 2010 2020
---------- ------------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS:
Non-interest bearing cash $ 4,134 $ 849 $ 3,864 $ 412 $ 619 $ 619
Interest bearing cash -- -- -- -- -- --
INVESTMENTS, at fair value:
Univar Corp. common stock -- -- -- -- -- --
Shares of registered investment
companies 9,318,774 1,914,417 8,709,516 928,457 1,395,547 1,395,042
Participant loans receivable -- -- -- -- -- --
INVESTMENTS, at contract value:
GICs -- -- -- -- -- --
ACCRUED PLAN EXPENSES AND OTHER (1,400) (288) (1,307) (138) (210) (209)
---------- ---------- ---------- -------- ---------- ----------
Net assets available for
plan benefits $9,321,508 $1,914,978 $8,712,073 $928,731 $1,395,956 $1,395,452
========== ========== ========== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Non-
Participant
Participant Directed Directed
------------------------------------------------------------ -----------
Lifepath Lifepath Fixed Company Company
2030 2040 Income Stock Loan Stock Total
-------- -------- ------------ ---------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS:
Non-interest bearing cash $ 108 $ 66 $ (64,097) $ 30,388 $ 915 $ 34,859 $ 12,736
Interest bearing cash -- -- -- 165,534 -- 189,893 355,427
INVESTMENTS, at fair value:
Univar Corp. common stock -- -- -- 5,045,538 -- 5,788,028 10,833,566
Shares of registered investment
companies 243,780 149,669 -- -- -- -- 24,055,202
Participant loans receivable -- -- -- -- 2,063,279 -- 2,063,279
INVESTMENTS, at contract value:
GICs -- -- 11,840,120 -- -- -- 11,840,120
ACCRUED PLAN EXPENSES AND OTHER (37) (22) (1,769) (788) (310) (901) (7,379)
-------- -------- ----------- ---------- ---------- ---------- -----------
Net assets available for
plan benefits $243,851 $149,713 $11,774,254 $5,240,672 $2,063,884 $6,011,879 $49,152,951
======== ======== =========== ========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 7
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
Non-
Participant
Participant Directed Directed
------------------------------------------------------------------ ---------
Company Company
Stock Fixed Income Equit y Balanced Loan Stock Total
---------- ------------ ----------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS:
Noninterest bearing cash $ 77,478 $ -- $ -- $ -- $ -- $ 94,047 $ 171,525
Interest bearing cash 54,109 2,718,993 7,237,044 567,759 -- 65,681 10,643,586
INVESTMENTS, at fair value
Univar Corporation common stock 5,854,383 -- -- -- -- 7,106,395 12,960,778
Common stock - -- -- 6,259,680 920,103 -- -- 7,179,783
Participant loans receivable -- -- -- -- 1,420,655 -- 1,420,655
INVESTMENTS, at contract value
GICs with insurance companies -- 11,994,849 -- -- -- -- 11,994,849
RECEIVABLES:
Employer's contributions -- 10,967 -- -- -- 119,238 130,205
Participants' contributions 69,560 96,679 159,278 25,301 -- -- 350,818
Interest and dividends -- -- 14,877 875 -- -- 15,752
PENDING INTERFUND TRANSFERS 9,189 (37,899) (15,924) 21,124 12,355 11,155 --
ACCRUED PLAN EXPENSES AND OTHER (15,092) (23,788) (26,837) (2,747) -- (18,319) (86,783)
---------- ----------- ----------- ---------- ---------- ---------- -----------
Net assets available for plan
benefits $6,049,627 $14,759,801 $13,628,118 $1,532,415 $1,433,010 $7,378,197 $44,781,168
========== =========== =========== ========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 8
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------------------------
Growth International Lifepath Lifepath Lifepath Lifepath Lifepath
Stock Equity S&P 500 2000 2010 2020 2030 2040
---------- ------------- ---------- -------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS):
Net appreciation (depreciation)
in fair value of investments $1,698,712 $ 178,853 $2,248,676 $ 84,571 $ 152,089 $ 253,574 $ 31,524 $ 18,415
Interest 10,134 2,082 9,471 1,009 1,518 1,519 265 161
Dividends - - - - - - - -
---------- ---------- ---------- -------- ---------- ---------- -------- --------
Total net investment
income (loss) 1,708,846 180,935 2,258,147 85,580 153,607 255,093 31,789 18,576
CONTRIBUTIONS:
Participants' 1,188,794 331,653 907,220 64,446 146,056 177,001 53,269 17,385
Employer's 8,807 2,435 8,121 4,731 1,681 165 332 313
---------- ---------- ---------- -------- ---------- ---------- -------- --------
Increase (decrease) in
net assets 2,906,447 515,023 3,173,488 154,757 301,344 432,259 85,390 36,274
TRANSFERS TO NEW (FROM OLD) FUND
OPTIONS - - 13,628,118 - - 1,532,415 - -
DISTRIBUTIONS: (160,647) (21,546) (1,058,022) (283) (2,412) (20,110) (1,144) (18)
NET INTERFUND TRANSFERS 6,604,733 1,428,677 (7,002,209) 776,435 1,100,880 (544,170) 160,694 114,031
PLAN EXPENSES AND OTHER (29,025) (7,176) (29,302) (2,178) (3,856) (4,942) (1,089) (574)
---------- ---------- ---------- -------- ---------- ---------- -------- --------
Increase (decrease) in
net assets 9,321,508 1,914,978 8,712,073 928,731 1,395,956 1,395,452 243,851 149,713
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, beginning of year - - - - - - - -
---------- ---------- ---------- -------- ---------- ---------- -------- --------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year $9,321,508 $1,914,978 $8,712,073 $928,731 $1,395,956 $1,395,452 $243,851 $149,713
========== ========== ========== ======== ========== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Non-
Participant
Directed
----------------------------------------------------------------- ----------
Fixed Company Company
Income Stock Loan Equity Balanced Stock Total
----------- ---------- ---------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS):
Net appreciation (depreciation)
in fair value of investments $ - $ (888,502) $ - $ - $ - $(1,996,246) $ 1,781,666
Interest 637,877 - 91,215 - - - 755,251
Dividends - - - - - - -
----------- ---------- ---------- ------------ ---------- ----------- -----------
Total net investment
income (loss) 637,877 (888,502) 91,215 - - (1,996,246) 2,536,917
CONTRIBUTIONS:
Participants' 1,715,469 570,888 1,755 - - - 5,173,936
Employer's 48,403 - - - - 1,733,851 1,808,839
----------- ---------- ---------- ------------ ---------- ----------- -----------
Increase (decrease) in
net assets 2,401,749 (317,614) 92,970 - - (262,395) 9,519,692
TRANSFERS TO NEW (FROM OLD) FUND
OPTIONS - - - (13,628,118) (1,532,415) - -
DISTRIBUTIONS: (2,886,718) (236,034) (112,790) - - (530,311) (5,030,035)
NET INTERFUND TRANSFERS (2,477,882) (251,048) 653,903 - - (564,044) -
PLAN EXPENSES AND OTHER (22,696) (4,259) (3,209) - - (9,568) (117,874)
----------- ---------- ---------- ------------ ---------- ----------- -----------
Increase (decrease) in
net assets (2,985,547) (808,955) 630,874 (13,628,118) (1,532,415) (1,366,318) 4,371,783
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, beginning of year 14,759,801 6,049,627 1,433,010 13,628,118 1,532,415 7,378,197 44,781,168
----------- ---------- ---------- ------------ ---------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year $11,774,254 $5,240,672 $2,063,884 $ - $ - $ 6,011,879 $49,152,951
=========== ========== ========== ============ ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 9
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
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 of
Univar Corporation (the Company) after 30 days of employment. 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). The
following description of the Plan is provided for general information purposes
only. More complete information regarding the Plan's provisions may be found in
the plan document.
Employees may contribute from 2% to 16% of their compensation to the Plan up to
annual limits as defined by the Plan and the Internal Revenue Code (IRC). The
Company contributes 50% of the first 6% of each employee's contributions, which
is the equivalent of up to 3% of the employee's gross income. Employee
contributions vest immediately, whereas Univar contributions vest at the rate of
20% per year based on continuous years of service.
Forfeitures are used to offset future employer contributions.
Employee contributions to the Plan are invested at the direction of the
participants in any of the following 10 funds.
Number of
Active
Participants
------------
Growth Stock Fund 909
International Equity Fund 431
S&P 500 Fund 966
Lifepath 2000 Fund 60
Lifepath 2010 Fund 143
Lifepath 2020 Fund 233
Lifepath 2030 Fund 76
Lifepath 2040 Fund 38
Fixed Income Fund 969
Company Stock Fund 1,624
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 any one fund or in the same allocation that the employee
contributions are invested.
The Plan allows participants to borrow from the vested portion of their employee
contribution accounts, up to the lower of 50% of the balance of those accounts
or $50,000. All loans have five-year repayment terms with interest rates ranging
from 5.95% to 9%.
<PAGE> 10
-2-
Trustee and administrative fees are paid by the Plan.
Upon termination of service due to death, disability or retirement, a
participant may elect to begin receiving benefit payments, leave the funds
invested in the Plan or roll their funds into another qualified plan.
Individual accounts are maintained for each Plan participant's share of Plan
income, the employer's contribution and the participants' contribution.
Allocations of income and plan expenses are based on the participant account
balances as defined by the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Plan uses the accrual basis of accounting. Under a trust agreement, BZW
Barclays Global Investors was appointed trustee for the Plan. The Plan is
administered by the employee benefits committee, which is appointed by Univar's
board of directors. Interest income is recorded as earned. Benefits are recorded
when paid. Net appreciation (depreciation) in fair value of assets represents
the change in the fair value of assets between years.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results are likely to differ from those estimates and it is possible the
difference may be significant.
Fair Value of Investments
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:
Cash Equivalents - These are stated at cost, which approximates market
value.
Equity Securities - Based upon quoted market prices.
Guaranteed Investment Contracts (GIC) - The GICs invested in by the
Plan are stated in the financial statements at contract value as they
are all fully benefit responsive (excluding Confederation Life). The
fair value and other information pertinent to the value of the
guaranteed investment contracts, as of December 31, 1995, is as
follows:
<TABLE>
<CAPTION>
Percentage
Issuer of Fund Rate Maturity Fair Value
------ ---------- ----- -------- ----------
<S> <C> <C> <C> <C>
Confederation Life 12.5% 9.18% 3/30/95 $1,462,908
Hartford Life 17.2% 6.58% 3/31/99 2,070,549
New York Life Insurance Co. 22.9% 8.38% 9/30/96 2,730,387
Principal Mutual Life 12.9% 5.63% 9/29/98 1,600,557
Provident Life and Accident Insurance 22.1% 5.40% 3/31/98 2,580,108
Wells Fargo GIC Fund 12.4% various various 1,523,616
------
100.0%
======
</TABLE>
<PAGE> 11
-3-
Confederation Life has been seized by the Canadian government. The contract
value recorded by the Plan at December 31, 1995, was $1,462,908, which was not
received as of the contract maturity date, March 30, 1995 or the financial
statement date, December 31, 1995. According to an agreement between the Plan
and Univar, at the time the Confederation Life investment contract is settled,
if the Plan realizes less than full contract value, Univar has agreed to pay to
the Plan an amount equal to contract value, less any amounts received from
Confederation Life. This guaranteed investment contract is not currently
accruing interest.
3. INVESTMENTS:
Individual investments that represent 5% or more of the net assets available for
plan benefits as of December 31, 1995 and 1994, are listed as follows:
<TABLE>
<CAPTION>
Number of
Shares or Fair
Principal Value Value
--------------- ------------
<S> <C> <C>
1995:
- -----
Univar Corporation Common Stock 1,394,578 $ 10,833,566
New York Life Insurance Co., GIC #GA-06108,
8.38%, due September 30, 1996 2,695,543 2,730,387
Provident Life & Accident Insurance,
GIC #627-05496, 5.4%, due March 31, 1998 2,607,847 2,580,108
Growth Stock Fund 540,219 9,318,774
S&P 500 Fund 385,889 8,709,516
1994:
- -----
Wells Fargo Bank Money Market Fund 10,643,586 10,643,586
Univar Corporation Common Stock 942,602 12,960,778
Hartford Life, GIC #GA-9906, 6.58%,
due March 31, 1999 2,098,001 2,098,001
New York Life Insurance Co., GIC #GA-06108,
8.38%, due September 30, 1996 4,113,740 4,113,740
Provident Life & Accident Insurance,
GIC #627-05496, 5.4%, due March 31, 1998 2,729,556 2,729,556
</TABLE>
4. INVESTMENT OPTIONS:
As of January 1, 1995, the Company changed its trustee and record keeper for the
Plan. For the plan year ended December 31, 1995, BZW Barclays Global Investors
served as the trustee and record keeper for the Plan. On January 1, 1995, the
Plan transferred all money out of the following funds:
The Equity Fund - This fund represented a long-term investment program that
emphasized growth of dollars invested. Accounts were invested almost
exclusively in common stock.
The Balanced Fund - This fund invested in both equity and debt securities
in order to obtain a reasonable return while limiting the overall level of
risk.
Plan participants are able to select from among the following 10 investment
funds for the plan year beginning January 1, 1995.
The Fixed Income/Income Accumulation Fund - This fund seeks to provide a
stable level of income without significant principal volatility.
<PAGE> 12
-4-
S&P 500 Stock Fund - This common stock fund seeks to approximate the total
return of the Standard & Poor's 500 Index (S&P 500 Index) before fees and
expenses and also to provide investors with long-term capital growth and
income.
Growth Stock Fund - This fund seeks to outperform the S&P 500 Index over a
period of three to five years. The fund invests primarily in equities that
are expected to generate above average rates of growth in revenues and
earnings. The Fund manager seeks to limit the overall level of risk in the
portfolio through diversification and the use of up to 30% money market
securities.
International Equity Fund - This fund invests in over 1,000 foreign stocks
for the equity markets in some of the most highly capitalized countries in
the world. Stocks are chosen in proportions determined by the EAFE Index
(Europe, Australia and Far East Index). The fund may invest up to
approximately 10% of its assets in short-term money market securities and
foreign and foreign equity securities which can be easily and quickly
liquidated.
Company Stock Fund - This fund invests in the Company's stock, with a small
portion held in cash reserves.
LifePath Funds (5 selections) - Each LifePath Fund aims for its highest
return (and accepts its highest risk) early on, then gradually shifts into
an increasingly conservative investment mix. The level of investment risk
in each LifePath Fund is also adjusted in response to market conditions.
5. 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, 1995 and 1994, there were $11,587
and $21,555 of unvested contributions related to terminated employees,
respectively.
6. FEDERAL INCOME TAXES:
The Plan was amended on January 1, 1993, to incorporate the provisions discussed
in Note 1. Although no determination letter has been received from the Internal
Revenue Service (IRS) regarding the most recent amendment, Univar's management
and the Plan's third-party administrator believe 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.
<PAGE> 13
-5-
7. 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 balances.
8. 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.
Benefits payable as of December 31, 1995 and 1994, were $1,083,569 and
$2,375,569, respectively.
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:
<TABLE>
<CAPTION>
Net Net
Assets Available Assets Available
for Plan Benefits 1995 for Plan Benefits
December 31, 1995 Benefits December 31, 1994
----------------- ---------- -----------------
<S> <C> <C> <C>
As reported in Form 5500 $ 48,069,382 $3,738,035 $ 42,405,599
1994 benefits payable - 2,375,569 2,375,569
1995 benefits payable 1,083,569 (1,083,569) -
----------------- ---------- -----------------
As reported in the
accompanying financial
statements $ 49,152,951 $5,030,035 $ 44,781,168
================= ========== =================
</TABLE>
9. RECLASSIFICATIONS:
Certain reclassifications have been made to conform the 1994 financial
statements to the 1995 presentation.
10. RELATED PARTIES:
The Plan invests its funds in various investments and investment funds that are
related parties of the Plan. The Company Stock Fund invests in the common stock
of Univar Corporation. The Fixed Income Fund has holdings in the Wells Fargo GIC
Fund. The Plan owns shares of BZW Barclays Global Investors Growth Stock,
International Equity, S&P 500 and the Lifepath Funds. Each of these entities is
considered a party-in-interest.
11. SUBSEQUENT EVENT:
During June 1996, the Company announced it was to be acquired by Pakhoed
Investeringen B.V. The effects of this change in control of the Company on the
Plan have not yet been determined.
<PAGE> 14
SCHEDULE 1
Page 1 of 3
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
ITEM 27a
--------
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number of
Shares or Growth Stock International Equity
Principal -------------------------- -------------------------
Issuer Description Amount Cost Current Value Cost Current Value
- ------------------ ---------- ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Cash $ 368,163 $ 4,134 $ 4,134 $ 849 $ 849
---------- ------------- ---------- ------------
Total cash and cash equivalents 4,134 4,134 849 849
*Univar Corp. Common Stock 1,394,578 - - - -
Shares of registered investment companies 1,411,633 8,528,344 9,318,774 1,786,361 1,914,417
Various Certificates of Annuity (see Schedule 1 - Exhibit 1)
11,840,120 - - - -
---------- ------------- ---------- ------------
Total investments 8,532,478 9,322,908 1,787,210 1,915,266
---------- ------------- ---------- ------------
$8,532,478 $ 9,322,908 $1,787,210 $ 1,915,266
========== ============= ========== ============
</TABLE>
<TABLE>
<CAPTION>
S&P 500 Lifepath 2000
-------------------------- -----------------------
Issuer Description Cost Current Value Cost Current Value
- ------------------ -------- ------------- -------- -------------
<S> <C> <C> <C> <C>
Cash $ 3,864 $ 3,864 $ 412 $ 412
----------- ------------- -------- -------------
Total cash and cash equivalents 3,864 3,864 412 412
*Univar Corp. Common Stock - - - -
Shares of registered investment companies 7,575,873 8,709,516 893,621 928,457
Various Certificates of Annuity (see Schedule 1 - Exhibit 1)
- - - -
---------- ------------- -------- -------------
Total investments 7,579,737 8,713,380 894,033 928,869
---------- ------------- -------- -------------
$7,579,737 $ 8,713,380 $894,033 $ 928,869
========== ============= ======== =============
</TABLE>
*Indicates a party-in-interest.
The accompanying notes are an integral part of this schedule.
<PAGE> 15
SCHEDULE 1
Page 2 of 3
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
ITEM 27a
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Lifepath 2010 Lifepath 2020
------------------------ -------------------------
Issuer Description Cost Current Value Cost Current Value
- ------------------ ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Cash $ 619 $ 619 $ 619 $ 619
---------- ------------- ---------- -------------
Total cash and cash equivalents 619 619 619 619
*Shares of registered investment companies 1,319,882 1,395,547 1,268,156 1,395,042
Various Certificates of Annuity (see Schedule 1 - Exhibit 1) - - - -
---------- ------------- ---------- -------------
Total investments 1,320,501 1,396,166 1,268,775 1,395,661
---------- ------------- ---------- -------------
$1,320,501 $ 1,396,166 $1,268,775 $ 1,395,661
========== ============= ========== =============
</TABLE>
<TABLE>
<CAPTION>
Lifepath 2030 Lifepath 2040
----------------------- -----------------------
Issuer Description Cost Current Value Cost Current Value
- ------------------ -------- ------------- -------- -------------
<S> <C> <C> <C> <C>
Cash $ 108 $ 108 $ 66 $ 66
-------- ------------- -------- -------------
Total cash and cash equivalents 108 108 66 66
*Shares of registered investment companies 216,935 243,780 135,556 149,669
Various Certificates of Annuity (see Schedule 1 - Exhibit 1) - - - -
-------- ------------- -------- -------------
Total investments 217,043 243,888 135,622 149,735
-------- ------------- -------- -------------
$217,043 $ 243,888 $135,622 $ 149,735
======== ============= ======== =============
</TABLE>
*Indicates a party-in-interest.
The accompanying notes are an integral part of this schedule.
<PAGE> 16
SCHEDULE 1
Page 3 of 3
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
ITEM 27a
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Fixed Income Company Stock
--------------------------- --------------------------
Issuer Description Cost Current Value Cost Current Value
- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Cash $ (64,097) $ (64,097) $ 420,674 $ 420,674
----------- ------------- ----------- -------------
Total cash and cash equivalents (64,097) (64,097) 420,674 420,674
*Univar Corp. Common Stock - - 11,260,539 10,833,566
*Shares of registered investment companies - - -
Various Certificates of Annuity (see Schedule 1 - Exhibit 1) 11,840,120 11,840,120 -
----------- ------------- ----------- -------------
Total investments 11,776,023 11,776,023 11,681,213 11,254,240
Participant's loans (5.95% to 9%) - - -
----------- ------------- ----------- -------------
$11,776,023 $ 11,776,023 $11,681,213 $ 11,254,240
=========== ============= =========== =============
</TABLE>
<TABLE>
<CAPTION>
Issuer Description Loan Total
- ------------------ ------------------------- --------------------------
Cost Current Value Cost Current Value
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Cash $ 915 $ 915 $ 368,163 $ 368,163
---------- ------------- ----------- -------------
Total Cash and cash equivalents 915 915 368,163 368,163
*Univar Corp. Common Stock - - 11,260,539 10,833,566
*Shares of registered investment companies - - 21,724,728 24,055,202
Various Certificates of Annuity (See Schedule 1 - Exhibit 1) - - 11,840,120 11,840,120
---------- ------------- ----------- -------------
Total investments 915 915 4 5,193,550 4 7,097,051
Participant's loans (5.95% to 9%) 2,063,279 2,063,279 2,063,279 2,063,279
---------- ------------- ----------- -------------
$2,064,194 $ 2,064,194 $47,256,829 $ 49,160,330
========== ============= =========== =============
</TABLE>
*Indicates a party-in-interest.
The accompanying notes are an integral part of this schedule.
<PAGE> 17
SCHEDULE 1 - EXHIBIT 1
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
CERTIFICATES OF ANNUITY
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Issuer Contract
Description Cost Value
- ---------------------------------- -------------- --------------
<S> <C> <C>
Confederation Life, GIC #62127
9.18%, due 3/30/95 $ 1,462,908 $ 1,462,908
Hartford Life, GIC #GA-9906
6.58%, due 3/31/99 2,027,178 2,027,178
New York Life Insurance Co.
GIC #GA-06108
8.38%, due 9/30/96 2,695,544 2,695,544
Principal Mutual Life
GIC #4-10581
5.63%, due 9/30/98 1,523,027 1,523,027
Provident Life and Accident Insurance
GIC #627-05496
5.40%, due 3/31/98 2,607,847 2,607,847
Wells Fargo GIC Fund 1,523,616 1,523,616
-------------- --------------
$ 11,840,120 $ 11,840,120
============== ==============
</TABLE>
The accompanying notes are an integral part of this schedule.
<PAGE> 18
SCHEDULE 2
UNIVAR CORPORATION
UNI$AVER TAX SAVINGS INVESTMENT PLAN
(TAX ID NUMBER 91-0816142, PLAN NUMBER 002)
ITEM 27d
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number of Total Number of Total Gain (Loss)
Issuer Description Purchases Purchases Sales Sales on Sales
- ------------------------------------- ----------------------------- --------- ----------- --------- ------------ ----------
Category i: Individual transactions in excess of 5 percent of plan assets at January 1, 1995:
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
*BZW Barclays Global Investors Growth Stock Fund 1 $ 6,198,165 1 $ 4,419,171 $ 827,508
1 4,419,172
*BZW Barclays Global Investors S&P 500 Fund 1 $12,460,612 1 6,950,487 580,839
1 4,235,298 1 4,235,293 966,824
Category iii: Series of transactions in excess of 5 percent of plan assets at January 1, 1995:
- ----------------------------------------------------------------------------------------------
*BZW Barclays Global Investors Growth Stock Fund 89 12,821,318 77 4,292,973 933,511
*BZW Barclays Investors International Equity Fund 55 2,711,000 - - -
*BZW Barclays Investors S&P 500 Fund 64 18,725,674 105 11,149,800 1,319,006
*BZW Barclays Investors Lifepath 2020 Fund 52 2,538,582 - - -
Various Fixed Income Fund 52 10,481,073 113 12,848,810 -
*Univar Corporation Common Stock 52 7,910,315 120 7,543,952 314,065
There were no category ii or iv transactions
- --------------------------------------------
</TABLE>
*Indicates a party-in-interest.
The accompanying notes are an integral part of this schedule.
