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
WAUSAU PAPER MILLS COMPANY 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>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
Wausau, Wisconsin
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
Year Ended December 31, 1996
<PAGE>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Year Ended December 31, 1996
TABLE OF CONTENTS
PAGE
Independent Auditor's Report 4
Financial Statements:
Statements of Net Assets Available for Benefits 5
Statement of Changes in Net Assets Available for Benefits 6
Notes to Financial Statements 7 - 11
Supplemental Schedules:
Schedule 1 - Item 27a - Schedule of Assets Held for
Investment Purposes 13
Schedule 2 - Item 27d - Schedule of Reportable (5%)
Transactions 14
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Employee Benefits Committee of the
Wausau Paper Mills Company
Wausau, Wisconsin
We have audited the accompanying statements of net assets available for
benefits of the WAUSAU PAPER MILLS COMPANY HOURLY SAVINGS AND INVESTMENT PLAN
as of December 31, 1996 and 1995, and the related statement of changes in net
assets available for benefits for the year 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 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 benefits of the WAUSAU
PAPER MILLS COMPANY HOURLY SAVINGS AND INVESTMENT PLAN as of December 31, 1996
and 1995, and changes in net assets available for benefits for the year ended
December 31, 1996 in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions as of and for the
year ended December 31, 1996 are presented for the purpose 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 Employment Retirement
Income Security Act of 1974. The supplemental schedules have been subjected
to the auditing procedures applied in the audit of the basic financial
statements for the year 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>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
<CAPTION>
DECEMBER 31, 1996
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:
Participant loans $ $ $ $ $ $ $9,163 $ 9,163
receivable
Investments 185,874 611,261 126,289 261,391 1,278,245 197,925 2,660,985
Total assets 185,874 611,261 126,289 261,391 1,278,245 197,925 9,163 2,670,148
Net assets available
for benefits $185,874 $611,261 $126,289 $261,391 $1,278,245 $197,925 $9,163 $2,670,148
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
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:
Participant loans $ $ $ $ $ $ $ 965 $ 965
receivable
Investments 279,897 71,301 160,572 783,542 1,295,312
Total assets 0 279,897 71,301 160,572 783,542 0 965 1,296,277
Net assets available
for benefits $ 0 $279,897 $ 71,301 $160,572 $ 783,542 $ 0 $ 965 $1,296,277
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR 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 $ 62,523 $268,589 $ 59,305 $117,665 $ 567,702 $ 49,370 $ $1,125,154
Participant rollover
contributions 13,567 6,784 396 7,179 396 1,895 30,217
Investment income 11,992 78,884 9,043 12,776 113,694 647 227,036
Transfers from other
funds 97,792 148,392 7,551 253,735
Total additions 185,874 354,257 68,744 137,620 681,792 199,657 8,198 1,636,142
DEDUCTIONS:
Employee benefits and
withdrawals 352 5,712 315 6,379
Investment loss 1,732 1,732
Administrative ex-
penses 25 190 210 425
Transfers to other
Funds 22,541 8,019 36,296 186,879 253,735
Total deductions 0 22,893 13,756 36,801 187,089 1,732 0 262,271
Net additions 185,874 331,364 54,988 100,819 494,703 197,925 8,198 1,373,871
Net assets available
for benefits at
beginning 279,897 71,301 160,572 783,542 965 1,296,277
Net assets available
for benefits at end $185,874 $611,261 $126,289 $261,391 $1,278,245 $197,925 $9,163 $2,670,148
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 1 - DESCRIPTION OF PLAN AND FUNDING POLICY
The following description of the Wausau Paper Mills Company 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 June 1, 1994. 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 1260 and 1381 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>
WAUSAU PAPER MILLS COMPANY
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 guaranteed rates were 6.55 and 6.70 percent for the years
ended, December 31, 1996 and 1995. 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. Interest rates on existing loans range from
10.25 percent to 10.75 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>
WAUSAU PAPER MILLS COMPANY
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
Wausau Paper Mills Company, 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>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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 and 1995, follows:
<CAPTION>
Investments at Fair Value as ASSET MARKET VALUE PERCENT OF NET ASSETS
DETERMINED BY QUOTED MARKET PRICE 1996 1995 1996 1996
<S> <C> <C> <C> <C>
Templeton Foreign Fund $ 185,874 $ 0 7.0% 0.0%
Neuberger & Berman Guardian Fund 611,261 279,897 22.9% 21.6%
Marshall & Ilsley Balanced Fund 126,289 71,301 4.7% 5.5%
General Account 261,391 160,572 9.8% 12.4%
Fidelity Magellan Fund 1,278,245 783,542 47.8% 60.4%
Wausau Paper Mills Common Stock Fund 197,925 0 7.4% 0.0%
</TABLE>
<TABLE>
During 1996, the Plan's investments (including investments bought, sold, and
held during the year) appreciated (depreciated) in value as follows:
<CAPTION>
Investments at Fair Value as NET CHANGE IN FAIR VALUE
DETERMINED BY QUOTED MARKET PRICE
<S> <C>
Templeton Foreign Fund $ 11,992
Neuberger & Berman Guardian Fund 78,884
Marshall & Ilsley Balanced Fund 9,043
General Account 12,776
Fidelity Magellan Fund 113,694
Wausau Paper Mills Common Stock Fund (1,732)
</TABLE>
NOTE 4 - TAX-EXEMPT STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Company by a
letter dated August 23, 1995, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of
the Internal Revenue Code (IRC). The Plan has been amended since receiving
the determination letter. However, 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 IRC. Therefore, they
believe the Plan was qualified and the related trust was tax exempt as of the
financial statement date.
<PAGE>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________
NOTE 5 - NOTICE OF AVAILABILITY
The complete annual report of the Wausau Paper Mills Company 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>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
PLAN'S EIN #39-0690900 PLAN #004
<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% $ 261,391 $ 261,391
Nationwide Life Insurance Company Pooled Separate Acct - Templeton Foreign * 185,874
Nationwide Life Insurance Company Pooled Separate Acct - Fidelity Magellan * 1,278,245
Neuberger & Berman Management, Inc. Guardian Fund * 611,261
Marshall & Ilsley Moderate Balanced Fund * 126,289
Wausau Paper Mills Company Company Stock Fund - CUSIP #943317 * 197,925
Participant Loans Interest rate during year 10.25-10.75% 0 9,163
<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>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
PLAN'S EIN #39-0690900 PLAN #004
<TABLE>
SCHEDULE 2 - ITEM 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
Year Ended December 31, 1996
<CAPTION>
Current Value
Expense of Asset on
Identity of Description Purchase Selling Lease Incurred With Cost Transaction Net Gain
PARTY INVOLVED OF ASSET PRICE PRICE RENTAL TRANSACTION OF ASSET DATE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C>
Nationwide Life Pooled Separate Account -
Insurance Company Templeton Foreign $ 97,792 $ N/A $ N/A $ N/A $ 97,792 $ 97,792 $ N/A
Nationwide Life Pooled Separate Account -
Insurance Company Templeton Foreign 76,091 N/A N/A N/A 76,091 76,091 N/A
Neuberger/Berman Guardian Fund 275,373 N/A N/A N/A 275,372 275,372 N/A
Employers Life Group Annuity contract -
General Acct 6.55% 124,845 N/A N/A N/A 124,845 124,845 N/A
Nationwide Life Pooled Separate Account -
Insurance Company Fidelity Magellan N/A 186,879 N/A N/A N/A 186,879 N/A
Nationwide Life Pooled Separate Account -
Insurance Company Fidelity Magellan 568,231 N/A N/A N/A 568,231 568,231 N/A
Wausau Paper Mills
Company Company Stock Fund 148,392 N/A N/A N/A 148,392 148,392 N/A
<FN>
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.
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
DATE: June 27, 1997 LARRY A. BAKER
Larry A. Baker
Trustee
<PAGE>
EXHIBIT INDEX
TO
FORM 11-K
OF
WAUSAU PAPER MILLS COMPANY 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 25,000 shares of its common stock, no par value, in
connection with the Wausau Paper Mills Company 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
