FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number: 0-7574
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
(Full title of the plan and the address of the plan, if different from
the issuer named below)
WAUSAU PAPER MILLS COMPANY
ONE CLARK'S ISLAND
P.O. BOX 1408
WAUSAU, WI 54402-1408
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
Wausau, Wisconsin
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
Nine-Month Period Ended December 31, 1996
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Nine-Month Period Ended December 31, 1996
TABLE OF CONTENTS
PAGE
Independent Auditor's Report 4
Financial Statements:
Statement of Net Assets Available for Benefits 5
Statement of Changes in Net Assets Available for Benefits 6
Notes to Financial Statements 7 - 11
Supplemental Schedule:
Schedule 1 - Item 27a - Schedule of Assets Held for
Investment Purposes 13
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Employee Benefits Committee of the
Wausau Paper Mills Company
Wausau, Wisconsin
We have audited the accompanying statement of net assets available for
benefits of the RHINELANDER PAPER COMPANY, INC. HOURLY SAVINGS AND INVESTMENT
PLAN as of December 31, 1996, and the related statement of changes in net
assets available for benefits for the nine-month period ended December 31,
1996. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the
RHINELANDER PAPER COMPANY, INC. HOURLY SAVINGS AND INVESTMENT PLAN as of
December 31, 1996, and changes in net assets available for benefits for the
nine-month period then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedule of assets held for
investment purposes as of and for the nine-month period ended December 31,
1996 are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employment Retirement Income Security Act
of 1974. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements for the
nine-month period ended December 31, 1996, and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
WIPFLI ULLRICH BERTELSON LLP
Wipfli Ullrich Bertelson LLP
June 17, 1997
Wausau, Wisconsin
<PAGE>
RHINELANDER PAPER COMPANY INC
HOURLY SAVINGS AND INVESTMENT PLAN
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
<CAPTION>
WAUSAU
NEUBERGER MARSHALL PAPER MILLS
TEMPLETON & BERMAN & ILSLEY FIDELITY COMPANY PARTICI-
FOREIGN GUARDIAN BALANCED GENERAL MAGELLAN COMMON PANT
FUND FUND FUND ACCOUNT FUND STOCK LOANS TOTALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Receivables:
Employee contri-
butions $ 4,745 $ 5,976 $ 2,001 $ 3,626 $ 7,398 $ 5,221 $ $ 28,967
Participant loan
receivable 1,100 1,100
Investments 76,731 111,935 34,688 60,714 136,672 87,199 507,939
Total assets 81,476 117,911 36,689 64,340 144,070 92,420 1,100 538,006
Net assets available
for benefits $ 81,476 $117,911 $ 36,689 $ 64,340 $144,070 $ 92,420 $1,100 $538,006
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
NINE-MONTH PERIOD ENDED, DECEMBER 31, 1996
<CAPTION>
WAUSAU
NEUBERGER MARSHALL PAPER MILLS
TEMPLETON & BERMAN & ILSLEY FIDELITY COMPANY PARTICI-
FOREIGN GUARDIAN BALANCED GENERAL MAGELLAN COMMON PANT
FUND FUND FUND ACCOUNT FUND STOCK LOANS TOTALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Participant deferral
contributions $ 70,858 $109,369 $ 35,492 $ 61,817 $ 139,709 $ 97,950 $ $ 515,195
Investment income 4,940 10,305 1,441 1,609 8,928 16 27,239
Transfers from other
funds 5,678 914 1,084 7,676
Total additions 81,476 119,674 36,933 64,340 148,637 97,950 1,100 550,110
DEDUCTIONS:
Investment loss 4,378 4,378
Administrative ex-
penses 50 50
Transfers to other
Funds 1,763 244 4,517 1,152 7,676
Total deductions 0 1,763 244 0 4,567 5,530 0 12,104
Net additions 81,476 117,911 36,689 64,340 144,070 92,420 1,100 538,006
Net assets available
for benefits at
beginning 0
Net assets available
for benefits at end $81,476 $117,911 $36,689 $64,340 $144,070 $92,420 $1,100 $538,006
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 1 - DESCRIPTION OF PLAN AND FUNDING POLICY
The following description of the Rhinelander Paper Company, Inc. Hourly
Savings and Investment Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
GENERAL
The Plan was established on April 1, 1996. It is a defined contribution plan
covering all regular full-time hourly employees of the Company who are members
of the collective bargaining units represented by United Paperworkers
International Union Local 15 and 1778 AFL-CIO. An employee becomes eligible
to participate in the Plan on the first day of the first month coinciding with
or next following the 60th full working day of employment. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
CONTRIBUTIONS
Participants are allowed to contribute up to 16 percent of their gross annual
compensation, as defined in the Plan document. The Company currently does not
match any portion of participant deferral contributions. Contributions are
subject to certain limitations.
The Plan allows participants to roll over distributions from another company's
retirement plan as contributions. Participants may deposit any portion of a
distribution that has not been taxed, provided that the deposit is made within
60 days of distribution. These deposits are not subject to the contribution
limitations under the Internal Revenue Code. The Company does not match these
contributions.
VESTING
Participants are fully vested in their entire account balance which includes
salary deferral and rollover contributions plus earning/losses thereon.
Participants may withdraw any portion of their account balance for any reason
after a participant reaches age 59 1/2 or at any age if a participant
demonstrates financial hardship. Financial hardship withdrawals are subject
to government regulation and may be subject to a 10 percent penalty.
INVESTMENT OPTIONS
The Plan allows participants to select their investment options from one or
more of the following choices:
<bullet> TEMPLETON FOREIGN FUND - Funds are invested in diversified stocks
and debt obligations of companies and governments that do business
primarily outside of the United States. The fund's flexible
investment policy allows its managers to invest the funds in lower
quality debt securities and preferred stocks of emerging markets
that are rated or unrated. The funds seek long-term capital
appreciation.
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 1 - DESCRIPTION OF PLAN AND FUNDING POLICY (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
<bullet> FIDELITY MAGELLAN FUND - Funds are invested primarily in common
stocks, and securities convertible into common stock, of United
States, multinational, and foreign companies of all sizes that
offer potential for growth. The fund seeks long-term capital
appreciation.
<bullet> NEUBERGER & BERMAN GUARDIAN FUND - Funds are invested in a
portfolio of common stocks that are principally dividend-paying
issues of well-established companies. The fund seeks capital
appreciation, with current income as a secondary objective.
<bullet> MARSHALL & ILSLEY BALANCED FUND - Funds are invested in a
diversified portfolio of mutual funds, which in turn invest
in fixed-income and equity securities. The fund seeks to
achieve total investment return from income and appreciation.
<bullet> GENERAL ACCOUNT - Funds are invested primarily in high-quality,
intermediate corporate and government bonds. The fund guarantees
a minimum rate of interest on dollars invested in this account.
The annualized guaranteed rate was 6.55 percent for the nine-month
period ended December 31, 1996. The interest rate declared and
principal in this fund are backed by the assets of Employers Life
Insurance Company.
<bullet> WAUSAU PAPER MILLS COMPANY COMMON STOCK FUND - Funds are invested
exclusively into the stock of the Plan's sponsor, except that
pending the purchase of shares, such contributions may be invested
in short-term, interest-bearing instruments selected by Marshall
& Ilsley Trust Company.
Participants may change their investment options as often as they like by
filing a written election with the Plan's employee benefit committee.
PARTICIPANT LOANS
Participants may borrow from their fund accounts. Loan transactions are
treated as a transfer to (from) the investment fund from (to) the Participant
Loans fund. Loan terms range from 1-5 years or longer if for the purchase of
a primary residence. Loans may not exceed the lesser of 50 percent of the
participant's account balance or $50,000. The loans are secured by the
balance in the participant's account and bear interest at a rate commensurate
with local prevailing rates as determined from time to time by the Company's
employee benefits committee. The interest rate on the one existing loan is
10.25 percent. Principal and interest is paid ratably through payroll
deductions. Upon termination of employment, outstanding balances become due
and payable to the Plan. The administrator is unable to provide a detail of
loans receivable by fund type.
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 1 - DESCRIPTION OF PLAN AND FUNDING POLICY (CONTINUED)
PAYMENT OF BENEFITS
On termination of service due to death, disability, or retirement, the vested
portion of a participant's account is payable to the participant or a named
beneficiary based on the participant's elected payment method. The payment
options available are lump-sum, period payment, or nontransferable annuity.
EXPENSES OF THE PLAN
Administrative expenses charged by Employers Life Insurance Company of Wausau,
and all other expenses incurred in conjunction with the Plan are paid by
Rhinelander Paper Company, Inc., the Plan's sponsor. Investment advisory and
management fees are offset against earnings. Loan fees are charged directly
to participants' accounts against the investment option for which the loan was
originally charged.
PLAN TERMINATION
The Company intends to continue the Plan indefinitely, but reserves the right
to terminate the Plan at any time. In the event of termination, the account
of each participant is fully vested and nonforfeitable. The account will be
held under the Plan and continue to accrue investment earnings until all
vested benefits have been distributed according to the terms of the Plan.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements of the Plan are presented on the accrual
basis of accounting in accordance with generally accepted accounting
principles.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan administrator to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
INVESTMENT VALUATION
Investments are stated at fair value. The Plan's investments are carried at
current value which represents the quoted market values of the underlying
investments on the last business day of the Plan year including current income
and investment expenses. Loans are stated at market value and are deemed
collectible. Securities transactions are accounted for on the trade-date
basis (the date the order to buy or sell is executed).
Gains or losses on security transactions are recorded as the difference
between proceeds received and the carrying value of the investments. Interest
income is recognized on the accrual method, and dividend income is recorded on
the ex-dividend date.
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT VALUATION (CONTINUED)
Investment income/loss on the statement of changes in net assets available for
benefits includes unrealized appreciation or depreciation, realized gains and
losses, interest, and dividends. Specific detail of investment income/loss is
not available from the trustee.
PAYMENT OF BENEFITS
Benefit payments to participants are recorded upon distribution.
NOTE 3 - INVESTMENTS
<TABLE>
A schedule of the market value of investments that individually represent 5
percent or more of the Plan's net assets available for benefits at
December 31, 1996 follows:
<CAPTION>
Investments at Fair Value as Asset Market Percent of
DETERMINED BY QUOTED MARKET PRICE VALUE NET ASSETS
<S> <C> <C>
Templeton Foreign Fund $ 81,476 15.1%
Neuberger & Berman Guardian Fund 117,911 21.9%
Marshall & Ilsley Balanced Fund 36,689 6.8%
General Account 64,340 12.0%
Fidelity Magellan Fund 144,070 26.8%
Wausau Paper Mills Company Common Stock Fund 92,420 17.2%
</TABLE>
<TABLE>
During 1996, the Plan's investments (including investments bought, sold, and
held during the year) appreciated in value as follows:
<CAPTION>
Investments at Fair Value as Net Change in
DETERMINED BY QUOTED MARKET PRICE FAIR VALUE
<S> <C>
Templeton Foreign Fund $ 4,940
Neuberger & Berman Guardian Fund 10,305
Marshall & Ilsley Balanced Fund 1,441
General Account 1,609
Fidelity Magellan Fund 8,928
Wausau Paper Mills Company Common Stock Fund (4,378)
</TABLE>
NOTE 4 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
<TABLE>
<CAPTION>
The following is a reconciliation of net assets available for benefits at
December 31, 1996 to Form 5500. Reconciling differences exist since the
financial statements are prepared on the accrual basis of accounting and the
Form 5500 is prepared on a cash basis.
<S> <C>
Net assets available for benefits $ 538,006
Less - Employee contributions receivable 28,967
Net assets available for benefits - Form 5500 $ 509,039
</TABLE>
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 5 - TAX EXEMPT STATUS OF THE PLAN
An application for a determination of the Plan has been filed with the
Internal Revenue Service (IRS) and is currently pending. The Plan
administrator and Plan's tax counsel believe the Plan is currently designed
and being operated in compliance with the applicable requirements of the
Internal Revenue Code. They also believe the Plan will obtain its
qualification and tax-exempt status by the IRS in a determination letter in
the near future. Therefore, they believe that the Plan was qualified and the
related trust was tax exempt as of the financial statement date.
NOTE 6 - NOTICE OF AVAILABILITY
The complete annual report of the Rhinelander Paper Company, Inc. Hourly
Savings and Investment Plan is available upon request for a reasonable charge
and is also available for examination at the Plan administrator's office
located in Wausau, Wisconsin during normal business hours.
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
PLAN'S EIN #39-1130910 PLAN #009
<TABLE>
SCHEDULE 1 - ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<CAPTION>
Identity of Issue, Borrower Description of Investment Including Maturity Date, Current
LESSOR, OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE COST VALUE
<S> <C> <C> <C>
Employers Life Insurance
Company of Wausau Group Annuity Contract: General Acct 6.55% $ 60,714 $ 60,714
Nationwide Life Insurance Company Pooled Separate Acct - Templeton Foreign * 76,731
Nationwide Life Insurance Company Pooled Separate Acct - Fidelity Magellan * 136,672
Neuberger & Berman Management, Inc. Guardian Fund * 111,935
Marshall & Ilsley Trust Company Moderate Balanced Fund * 34,688
Wausau Paper Mills Company Company Stock Fund - CUSIP #943317 * 87,199
Participant Loan Interest rate during year 10.25% * 1,100
<FN>
*The mutual fund assets consist of pooled funds held by the custodian. The
custodian has stated that they cannot provide information regarding the cost
of the investments. There were no investment assets reportable as acquired
and disposed of during the year.
See Independent Auditor's Report.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustee has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
DATE: June 27, 1997 LARRY A. BAKER
Larry A. Baker
Trustee
<PAGE>
EXHIBIT INDEX
TO
FORM 11-K
OF
RHINELANDER PAPER COMPANY, INC.
HOURLY SAVINGS AND INVESTMENT PLAN
FOR THE YEAR ENDED DECEMBER 31, 1997
Pursuant to Section 102(d) of Regulation S-T
(17 C.F.R. <section>232.102(d))
EXHIBIT 23 - Consents of Experts and Counsel
Consent of Independent Accountants
EXHIBIT (23)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 of Wausau Paper Mills Company relating to the
registration of 10,000 shares of its common stock, no par value, in
connection with the Rhinelander Paper Company, Inc. Hourly Savings and
Investment Plan (the "Plan") of our report dated June 17, 1997 appearing
in Plan's annual report on Form 11-K for the year ended December 31, 1996.
WIPFLI ULLRICH BERTELSON LLP
WIPFLI ULLRICH BERTELSON LLP
June 26, 1997
Wausau, Wisconsin
