FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended NOVEMBER 30, 1995
OR
[ ] 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: 0-7574
WAUSAU PAPER MILLS COMPANY
(Exact name of registrant as specified in charter)
WISCONSIN 39-0690900
(State of incorporation) (I.R.S. Employer Identification
Number)
ONE CLARK'S ISLAND
P.O. BOX 1408
WAUSAU, WISCONSIN 54402-1408
(Address of principal executive office)
Registrant's telephone number, including area code: 715-845-5266
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 report), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No ________
________
The number of common shares outstanding at December 31, 1995 was
29,465,842.
Note: The number of shares outstanding at December 31, 1995 are
before the effect of the 5-for-4 stock split payable
January 17, 1996 to shareholders of record as of January 2,
1996.
<PAGE>
WAUSAU PAPER MILLS COMPANY
AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of 1
Income Three Months Ended
November 30, 1995 (unaudited) and
November 30, 1994 (unaudited)
Condensed Consolidated Balance 2
Sheets November 30, 1995 (unaudited)
and August 31, 1995 (derived from audited
financial statements)
Condensed Consolidated Statements 3
of Cash Flows Three Months
Ended November 30, 1995 (unaudited) and
November 30, 1994 (unaudited)
Notes to Condensed Consolidated 4 - 5
Financial Statements
Item 2. Management's Discussion and 6 - 8
Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS:
CONSOLIDATED STATEMENTS OF INCOME
Wausau Paper Mills Company and Subsidiaries
<CAPTION>
For the Three Months
(Dollars in thousands, except per share data - unaudited) Ended November 30
- ----------------------------------------------------------------------------------
1995 1994
-------------------------
<S> <C> <C>
Net Sales $141,904 $126,267
Cost of products sold 122,276 105,169
-------------------------
GROSS PROFIT 19,628 21,098
Selling, administrative and research expenses 7,416 6,727
-------------------------
OPERATING PROFIT 12,212 14,371
Interest income 210 60
Interest expense (570) (436)
Other expense ( 47) ( 48)
-------------------------
EARNINGS BEFORE INCOME TAXES 11,805 13,947
Provision for income taxes 4,500 5,350
-------------------------
NET EARNINGS $ 7,305 $ 8,597
=========================
NET EARNINGS PER COMMON SHARE $ .25 $ .29
=========================
WEIGHTED AVERAGE NUMBER OF SHARES 29,465,000 29,461,000
=========================
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Wausau Paper Mills Company and Subsidiaries
<CAPTION>
- ----------------------------------------------------------------------------
(Dollars in thousands) November 30 August 31
- ----------------------------------------------------------------------------
1995* 1995*
------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 375 $ 2,347
Accounts and notes receivable 43,988 42,429
Inventories 70,063 67,474
Other current assets 7,492 7,767
-----------------------------
Total current assets 121,918 120,017
-----------------------------
Property, plant and equipment 300,648 292,191
Other assets 19,511 22,478
-----------------------------
TOTAL ASSETS $442,077 $434,686
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 6,434 $ 6,425
Accounts payable 26,765 24,426
Accrued and other liabilities 20,890 20,641
Accrued income taxes 2,932 1,259
-----------------------------
Total current liabilities 57,021 52,751
-----------------------------
LONG-TERM LIABILITIES
Long-term debt 62,568 68,623
Deferred income taxes 38,044 36,799
Other liabilities 40,418 39,824
-----------------------------
Total long-term liabilities 141,030 145,246
-----------------------------
Total shareholders' equity 244,026 236,689
-----------------------------
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $442,077 $434,686
=============================
<FN>
*The consolidated balance sheet at November 30, 1995 is unaudited. The
August 31, 1995 consolidated balance sheet is derived from audited financial
statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Wausau Paper Mills Company and Subsidiaries
- -----------------------------------------------------------------------
<CAPTION>
For the Three Months
(Dollars in thousands - unaudited) Ended November 30
- -----------------------------------------------------------------------
1995 1994
--------------------------
<S> <C> <C>
Operating Activities:
Net earnings $ 7,305 $ 8,597
Noncash items:
Provision for depreciation, depletion
and amortization 5,332 4,750
Deferred income taxes 1,245 778
Changes in operating assets and liabilities:
Receivables (1,559) (3,012)
Inventories (2,589) 2,546
Other assets 307 213
Accounts payable and other liabilities 6,756 3,413
Accrued income taxes 1,673 2,870
-------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 18,470 20,155
-------------------------
Investing Activities:
Capital expenditures (17,316) (8,626)
Proceeds from property, plant and
equipment disposals 60 231
Net cash distributed from funds
restricted for capital additions 2,935
--------------------------
NET CASH USED IN INVESTING ACTIVITIES (14,321) (8,395)
--------------------------
Financing Activities:
Net repayments under
revolving credit facility (4,200)
Repayments of long-term debt (112) (119)
Dividends paid (1,841) (1,611)
Proceeds from stock option exercises 32 2,036
Payments for purchase of treasury stock (4,690)
--------------------------
NET CASH USED IN FINANCING ACTIVITIES (6,121) (4,384)
--------------------------
Net increase (decrease) in cash and
cash equivalents (1,972) 7,376
Cash and cash equivalents at
beginning of year 2,347 3,214
--------------------------
CASH AND CASH EQUIVALENTS AT
END OF QUARTER $ 375 $ 10,590
==========================
Supplemental Information:
Interest paid (net of amount capitalized) $ 532 $ 463
Income taxes paid 1,582 1,120
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: The accompanying unaudited financial statements include
all adjustments, which are all normal and recurring in
nature and, in the opinion of management, present fairly
the condensed results for the interim periods presented.
Refer to the Notes to Financial Statements which appear
in the 1995 Annual Report for the company's accounting
policies which are pertinent to these statements.
Note 2: Selling, administrative and research expenses include
stock appreciation rights and stock option expense of
$653,000 or $.01 per share for the quarter ended
November 30, 1995 and income of $101,000 or less than
$.01 per share for the quarter ended November 30, 1994.
Note 3: All shares and per share data have been restated to
reflect the 10% stock dividend which occurred in January
1995.
<TABLE>
Note 4: Accounts receivable consisted of the following:
<CAPTION>
NOVEMBER 30, 1995 AUGUST 31, 1995
<S> <C> <C>
Customer Accounts $47,805,000 $46,055,000
Misc. Notes and Accounts
Receivable 1,948,000 1,454,000
---------- ----------
$49,753,000 $47,509,000
Less: Allowance for
Discounts, Doubtful
Accounts and Pending
Credits 5,765,000 5,080,000
---------- ----------
Net Receivables $43,988,000 $42,429,000
</TABLE>
<TABLE>
Note 5: The various components of inventories were as follows:
<CAPTION>
NOVEMBER 30, 1995 AUGUST 31, 1995
<S> <C> <C>
Raw Materials and Supplies $49,243,000 $47,423,000
Work in Process
and Finished Goods 44,831,000 45,521,000
---------- ----------
$94,074,000 $92,944,000
---------- ----------
Less: LIFO Reserve 24,011,000 25,470,000
---------- ----------
Net Inventories $70,063,000 $67,474,000
</TABLE>
Note 6: The accumulated depreciation on fixed assets was
$155,875,000 as of November 30, 1995 and $150,736,000 as
of August 31, 1995.
<PAGE>
<TABLE>
Note 7: A summary of long-term debt is as follows:
<CAPTION>
NOVEMBER 30, 1995 AUGUST 31, 1995
<S> <C> <C>
Bonds, Mortgages and
Similar Debt $62,188,000 $68,331,000
Capitalized Leases 380,000 292,000
---------- ----------
Total Long Term Debt $62,568,000 $68,623,000
</TABLE>
<TABLE>
Note 8: Dividends per share were as follows:
<CAPTION>
THREE MONTHS ENDING
-------------------
NOVEMBER 30, 1995 NOVEMBER 30, 1994
----------------- ------------------
<S> <C>
$.00* $.00*
<FN>
* The company's Board of Directors meeting schedule did not result
in the declaration of a cash dividend in the three months ended
November 30, 1995 or 1994.
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS:
RESULTS OF OPERATIONS
Net Sales
For the three months ended November 30, 1995, net sales were a
record $141,904,000, up 12.4% from the prior year's first quarter
net sales of $126,267,000. Shipments of 103,900 tons matched last
year's record first quarter shipments. The increase in sales over
the prior year is due primarily to higher selling prices for both
printing and writing and technical specialty grades.
Despite a worldwide slowing in demand for paper products,
shipments of the company's printing and writing grades were strong
for the quarter and exceeded last year's first quarter by 1.9%.
Order backlogs at quarter-end at the Printing and Writing Division
were down slightly from a year ago as a result of weaker demand
for certain grades of paper. These grades, such as commodity
cut-size and offset papers, are at the low end of the division's
mix and represent a small portion of its volume. These papers
have been produced since early fiscal 1995 to fill out production
at the Groveton mill. Pricing has become increasingly competitive
on these grades due to weakening demand, making it more difficult
for the company to participate in this market segment.
Shipments of Rhinelander's technical specialty grades were down
3.6% compared to the prior year. Although demand for pressure
sensitive products improved in the first quarter of fiscal 1996
from the previous quarter, order backlogs were below last year's
first quarter levels when demand for Rhinelander's products was
extremely strong.
<PAGE>
Gross Profit
Fiscal 1996 first quarter gross profit was $19,628,000 or 13.8% of
net sales.
Gross profit in the first quarter of fiscal 1995 was $21,098,000
or 16.7% of net sales.
Gross profit in the first quarter of fiscal 1996 was negatively
impacted primarily by higher pulp prices compared to the previous
year. The average list price for northern bleached softwood kraft
in the first quarter of fiscal 1996 was approximately 40% higher
than a year ago. Although market pulp prices for some grades of
pulp increased in the first quarter, pulp prices appear to have
peaked and are beginning to decline as weakening global demand for
paper is effecting worldwide demand for pulp. The company did not
increase paper prices in the first quarter in response to the pulp
price increases. Management expects that with continued strong
sales and reduced pulp costs the company will return, in the
longer term, to historical per ton margins and renewed profit
growth momentum.
Production in the first quarter of fiscal 1996 at the company's
Printing and Writing Division was up 11.5% over the prior year.
The higher production level was primarily the result of having
full operations at the Groveton mill compared to last year's first
quarter when Groveton's second paper machine operated for only two
months. Inventory levels dropped slightly during the quarter as a
result of strong shipments. The inventory decline was less than
experienced in the first quarter of fiscal 1995 which was impacted
by strong shipments, below capacity operations at Groveton, and
capital improvement related downtime at the Brokaw mill.
<PAGE>
The Rhinelander mill operated at 97% of capacity in the first
quarter of fiscal 1996. As a result, production was 2.3% below
last year's first quarter. Demand for its products improved
during the quarter, but was not as strong as a year ago.
Inventory levels remained essentially unchanged in the quarter as
was the case during the first quarter of fiscal 1995.
Selling, Administrative and Research Expenses
In the first quarter of fiscal 1996, selling, administrative and
research expenses were $7,416,000 compared to $6,727,000 for the
same period a year ago. The increase over the prior year is due
to stock appreciation rights and stock option expense of $653,000
in the first quarter of fiscal 1996 compared to income of $101,000
recorded in last year's first quarter.
Interest Income and Expense
Interest income was $210,000 and $60,000 in the three months ended
November 30, 1995 and 1994, respectively. The increase in the
first quarter of fiscal 1996 over the prior year is due to
interest income from undistributed proceeds from the $19 million
industrial development bond issuance in August 1995. Interest
expense totalled $570,000 in the first quarter of fiscal 1996,
compared to $436,000 a year ago. Higher interest expense is the
result of higher debt levels compared with last year's first
quarter.
<PAGE>
Income Taxes
The income tax provision in the first quarter of fiscal 1996 was
$4,500,000 for an effective tax rate of 38.1%. The effective
tax rate in the first quarter of fiscal 1995 was 38.4%.
Net Earnings
Net earnings for the three months ended November 30, 1995 were
$7,305,000 or $.25 per share. Net earnings were $8,597,000 or
$.29 per share in last year's first quarter.
Cash Provided by Operations
For the three months ended November 30, 1995, cash provided by
operations was $18,470,000 compared to $20,155,000 for the same
period in fiscal 1995. Cash provided by operations was lower in
the first quarter of fiscal 1996 compared to a year ago due
primarily to higher unit productions costs.
Capital Expenditures
For the three months ended November 30, capital expenditures were
$17,316,000 and $8,626,000 in 1995 and 1994, respectively.
The $46 million expansion project at Rhinelander is proceeding on
schedule. The Rhinelander mill successfully started up the new
supercalender in November which will allow for increased
production of pressure sensitive products. The expansion project
also includes a rebuild of No. 7 paper machine which is scheduled
for March 1996. No. 7 paper machine will be down approximately
two weeks to complete the capital improvements. Work continues
on several other major projects throughout the company including
the $16.4 million fiber handling and processing project at the
Brokaw mill.
On December 18, 1995, the Board of Directors approved $8 million
in capital improvements including nearly $6 million to modernize
the wood processing facility at the Brokaw mill. The wood room
project will increase process efficiencies and wood yield, reduce
operating costs and improve working conditions.
Total capital expenditures are projected to be approximately $70
million in fiscal 1996.
Financing
Long-term debt decreased $6.1 million in the first quarter of
fiscal 1996 to $62,568,000. Long-term debt consisted primarily of
$30.0 million in notes to Prudential Insurance Company of America
and its subsidiaries, less the current portion, with a fixed rate
of 6.03%. In addition, the company had $19.0 million in variable
rate industrial development bonds with an interest rate of 3.95%
at November 30, 1995. Undistributed proceeds from the August 1995
industrial development bond issuance totalled $11,797,000 at the
end of the quarter. At November 30, 1995, the company also had
$11.5 million in revolving credit agreement borrowings at
effective interest rates ranging from 5.95% to 6.06% and $6.8
million in commercial paper with effective interest rates of 6.20%
to 6.31%.
<PAGE>
Cash provided by operations, industrial development bond proceeds
and the revolving credit facility are expected to meet working
capital needs and dividend requirements, as well as fund the
company's stock repurchase program and planned capital expenditure
requirements. The company believes additional financing is
readily available, should it be needed, to fund a major expansion
or acquisition.
Common Stock Repurchase
On June 30, 1994, the Board of Directors authorized the repurchase
of up to 1,485,000 shares (after the effect of the January 1995
stock dividend) of the company's common stock from time to time in
the open market or through privately negotiated transactions at
prevailing market prices. There were no repurchases of company
stock during the first quarter of fiscal 1996.
Dividends and Stock Split
On December 18, 1995, the Board of Directors declared a 5-for-4
stock split and approved a 10% increase in the cash dividend, from
$.050 to $.055 per share on a new share basis. Both the cash
dividend and the additional shares from the stock split are
payable January 17, 1996 to shareholders of record as of
January 2, 1996. Any fractional shares resulting from the stock
split will be paid in cash, based on the closing price of the
stock on the record date.
PART II - OTHER INFORMATION
Item 5. OTHER INFORMATION
COMMON STOCK INCREASE
On December 18, 1995 shareholders approved an increase in
authorized shares of the company's common stock from 36,000,000 to
100,000,000.
LABOR
The company negotiated a five year labor agreement, effective
January 1, 1996 with the United Paperworkers International Union
at the Rhinelander Division. The agreement, which expires in
December 2000, includes a general wage increase of 3.0% in 1996,
3.5% in 1997, 3.5% in 1998, 3.0% in 1999 and 3.0% in 2000. The
contract includes changes in work rules to provide greater
operating efficiencies and increases in employee benefits. The
company is of the opinion that this labor agreement will provide
competitive labor costs over the contract period.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits
(10) Supplemental Retirement Benefit Plan dated 1/16/92, as
amended 11/13/95.
(b) Reports on form 8-K: None
<PAGE> S I G N A T U R E
Pursuant to the requirements 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.
WAUSAU PAPER MILLS COMPANY
Registrant
By: STEVEN A. SCHMIDT
Steven A. Schmidt
Vice President Finance, Secretary and Treasurer
(Principal Financial Officer)
Date: January 12, 1996
Exhibit (10)
SUPPLEMENTAL RETIREMENT BENEFIT PLAN
This Supplemental Retirement Benefit Plan (the "Plan") is
adopted effective as of this 16th day of January, 1992, by Wausau
Paper Mills Company, a Wisconsin corporation, ("Wausau") for the
purposes of providing deferred compensation in the form of
supplemental retirement benefits for San W. Orr, Jr. ("Mr. Orr")
in recognition of his service to Wausau as its Chairman of the
Board of Directors and Chief Executive Officer.
1. Normal Supplemental Retirement Benefit. Beginning on
the first day of the first month following the last to occur of
(a) Mr. Orr's termination of employment with Wausau or (b) Mr.
Orr's 60th birthday, and continuing on the first day of each
succeeding month, Wausau shall pay to Mr. Orr, if he is then
living, a monthly supplemental retirement benefit (Mr. Orr's
"Normal Supplemental Retirement Benefit") in an amount equal to
50% of one-twelfth of Mr. Orr's highest final average
compensation. For purposes of this Plan, "highest final average
compensation" shall mean the annual average of the sum of (a) all
compensation paid to Mr. Orr and reported on Form W-2 and (b) all
amounts which would have been paid and reported on Form W-2 but
were deferred at Mr. Orr's election for the five consecutive
calendar year period which yields the highest aggregate
compensation so paid and deferred. Mr. Orr's Normal Supplemental
Retirement Benefit shall not be reduced or offset by the amount of
any other payment then due him from Wausau or any other plan or
program now or hereafter maintained by Wausau.
2. Surviving Spouse Benefit. From and after the first
day of the first month following the later of (a) the month in
which Mr. Orr's death occurs or (b) the month in which Mr. Orr
would have attained his 60th birthday if Mr. Orr's death occurs
before he has attained age 60, and continuing on the first day of
each succeeding month, Wausau shall pay to Mr. Orr's spouse, if
then living (Mr. Orr's "Surviving Spouse"), a monthly benefit (the
"Supplemental Surviving Spouse Benefit") in an amount equal to 50%
of the Normal Supplemental Retirement Benefit to which Mr. Orr
would have then been entitled had he then been living.
3. Change of Control of Wausau.
(a) In the event a Change of Control of Wausau
occurs prior to Mr. Orr's death, Wausau shall pay to Mr. Orr
a lump sum amount equal to the present value of Mr. Orr's
Normal Supplemental Retirement Benefit, as determined
hereunder, as of the first day of the first month following
such Change of Control of Wausau on which Mr. Orr is neither
an employee nor a director of Wausau, whether or not such
Change of Control occurred prior to the date on which Mr. Orr
shall have ceased to be an employee or a director of Wausau.
Upon payment of the lump sum amount provided for in this
subparagraph (a), Wausau shall have no further obligation to
pay any benefits under this Plan.
<PAGE>
(b) In the event a Change of Control occurs after
Mr. Orr's death and whether or not the Supplemental Surviving
Spouse Benefit shall have then become payable, Wausau shall
pay to Mr. Orr's Surviving Spouse, if then living, the
present value of the unpaid Supplemental Surviving Spouse
Benefit. Upon payment of the lump sum amount provided for in
this subparagraph (b), Wausau shall have no further
obligation to pay any benefits under this Plan.
(c) For purposes of this plan, a "Change of Control
of Wausau" shall be deemed to have occurred when:
(i) any one of the following events occurs:
(A) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")),
other than (A) Wausau or any of its subsidiaries,
(B) a trustee or other fiduciary holding securities
under an employee benefit plan of Wausau or any of
its subsidiaries, (C) an underwriter temporarily
holding securities pursuant to an offering of such
securities, or (D) a company owned, directly or
indirectly, by the shareholders of Wausau in
substantially the same proportions as their
ownership of stock of Wausau, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of
securities of Wausau (not including in the
securities beneficially owned by such persons any
securities acquired directly from the Company or
its affiliates) representing more than 50% of the
combined voting power of Wausau's then outstanding
securities; provided, however, that for the purpose
of determining whether any shareholder of Wausau on
the date hereof becomes the beneficial owner of
securities of Wausau representing more than 50% of
the combined voting power of Wausau's then
outstanding securities, the securities of Wausau
held by such shareholder on the date hereof shall
not be taken into account;
(B) the shareholders of Wausau approve a
merger or consolidation of Wausau or a share
exchange with any other company, other than a
merger or consolidation or share exchange which
would result in the voting securities of Wausau
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
being converted into voting securities of the
surviving entity) in combination with the ownership
of any trustee or other fiduciary holding
securities under an employee benefit plan of
Wausau, at least 50% of the combined voting power
of the voting securities of Wausau or such
surviving entity outstanding immediately after such
merger or consolidation or share exchange, or a
merger or consolidation or share exchange effected
<PAGE> to implement a recapitalization of Wausau (or
similar transaction) in which no person acquires
more than 50% of the combined voting power of
Wausau's then outstanding securities; or
(C) the shareholders of Wausau approve a
plan of complete liquidation of Wausau or an
agreement for the sale or disposition by Wausau of
all or substantially all of Wausau's assets and
(ii) a majority of the members of the Board of
Directors who are unaffiliated with an Interested
Shareholder (defined in subparagraph (d)) and who were
members of the Board of Directors as of a date prior to
the date on which the Interested Shareholder became an
Interested Shareholder (a "Current Director") has not,
by resolution prior to (A) the person described in
subparagraph (i)(A) becoming the beneficial owner of 10%
of the combined voting power of Wausau's then
outstanding securities or (B) the approval of
shareholders described in (i)(B) or (C) the approval of
shareholders described in (i)(C), approved or
recommended such event.
(d) For purposes of this Plan, the term "Interested
Shareholder" shall mean any person (other than Wausau or any
of its subsidiaries or any member of the Board of Directors
as of the effective date of this Plan or any affiliate of
such person) who first became the beneficial owner of 10% or
more of the combined voting power of Wausau's then
outstanding securities after the effective date of this Plan.
(e) For purposes of this Plan, the present value of
Mr. Orr's Normal Supplemental Retirement Benefit or the
Supplemental Surviving Spouse Benefit shall be determined by
reference to the 1983 Individual Annuity Mortality Table with
an assumed interest rate equal to the "immediate annuity
rate" as then in effect as determined by the Pension Benefit
Guaranty Corporation and promulgated in Appendix B to 29
C.F.R. Section 2619.65 or any successor regulation adopted
for the same or substantially similar purpose.
4. Supplemental Retirement Benefits in Addition to other
Rights and Benefits. The rights and benefits conferred upon Mr.
Orr (and Mr. Orr's Surviving Spouse) pursuant to this Plan shall
be in addition to all other rights and benefits conferred upon Mr.
Orr by Wausau by reason of his employment.
5. Nature of Wausau's Obligations and Mr. Orr's Rights.
Neither Mr. Orr nor his Surviving Spouse, if any, shall acquire
any right, title or interest in the assets of Wausau by reason of
this Plan. To the extent Mr. Orr or his Surviving Spouse shall
acquire a right to receive payments from Wausau pursuant to this
Plan, such right shall be no greater than the right of any
unsecured general creditor of Wausau.
6. Assignment by Mr. Orr Prohibited. This Plan and Mr.
Orr's rights and benefits hereunder (and the rights of his
Surviving Spouse, if any) shall not be subject to voluntary or
<PAGE>involuntary sale, pledge, hypothecation, transfer or assignment by
Mr. Orr or such Surviving Spouse, their personal representatives
or heirs or any other person or persons or organization or
organizations succeeding to any of their rights and benefits
hereunder.
7. Funding. All benefits paid or payable pursuant to the
terms of this Plan shall be paid out of the general assets of
Wausau.
8. Claims Procedure. The claims procedure set forth in
the Wausau Paper Retirement Plan or any successor to such plan is
incorporated herein by this reference as the claims procedure for
this Plan.
9. Plan Administrator. The plan administrator and named
fiduciary of the Plan shall be Wausau.
10. Binding Effect. This Plan shall be binding upon and
inure to the benefit of (1) Mr. Orr and his Surviving Spouse and
their personal representatives and heirs and any other person or
persons or organization or organizations succeeding to any of Mr.
Orr's rights or benefits hereunder, and (2) Wausau and its
successors and assigns.
11. Severability. The invalidity or unenforceability of
any provision of this Plan shall not invalidate or render
unenforceable any other provision of this agreement.
12. Governing Law. This Plan shall be governed by the
Employee Retirement Income Security Act of 1974, as amended, and
to the extent not preempted by such Act, by the laws of the State
of Wisconsin.
IN WITNESS WHEREOF, Wausau has caused this amended agreement
to be executed by its President thereunto duly authorized as of
this 16th day of November, 1995.
WAUSAU PAPER MILLS COMPANY
By: DANIEL D. KING
Daniel D. King
As its President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS
ENDED NOVEMBER 30, 1995 OF WAUSAU PAPER MILLS COMPANY AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
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0
0
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</TABLE>
