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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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(Mark One)
/x/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 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 1-6098
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND
SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
DANIEL INDUSTRIES, INC.
9753 Pine Lake Drive
Houston, Texas 77055
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING
AND SAVINGS PLAN
Date DECEMBER 20, 1996 By /s/ Larry G. Irving
------------------- --------------------------
Larry G. Irving
Member of the Administrative
Committee
Date DECEMBER 20, 1996 By /s/ Bela Vaczi
------------------ ---------------------------
Bela Vaczi
Member of the Administrative
Committee
Date DECEMBER 20, 1996 By /s/ Michael R. Yellin
------------------ -------------------------
Michael R. Yellin
Member of the Administrative
Committee
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Members and
Administrative Committee of
Daniel Industries, Inc.
Employees' Profit Sharing and Savings Plan
In our opinion, the accompanying statements of financial condition with fund
information and the related statement of income and changes in plan equity with
fund information present fairly, in all material respects, the financial
position of Daniel Industries, Inc. Employees' Profit Sharing and Savings Plan
at September 30, 1996 and 1995, and the results of its operations and the
changes in its plan equity for the year ended September 30, 1996, in conformity
with generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which 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, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
schedules 1 and 2 is presented for the purposes of additional analysis and is
not a required part of the basic financial statements but is additional
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 financial condition with fund
information and the statement of income and changes in plan equity with fund
information is presented for purposes of additional analysis rather than to
present the statements of financial condition and statement of income and
changes in plan equity of each fund. Schedules 1 and 2 and the 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.
PRICE WATERHOUSE LLP
Houston, Texas
December 19, 1996
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DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
Statement of Financial Condition
with Fund Information
September 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY
RETIREMENT FIDELITY
GOVERNMENT FIDELITY GROWTH FIDELITY
MONEY INTERMEDIATE & FIDELITY BLUE CHIP
MARKET BOND INCOME PURITAN GROWTH FIDELITY
PORTFOLIO* FUND* PORTFOLIO* FUND* FUND* CONTRAFUND*
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
------
Investments at fair market value:
Mutual funds $ 3,075,484 $ 7,104,525 $13,117,595 $ 1,057,011 $ 3,046,380 $2,989,307
Sponsor Stock Fund
(Not Member directed) - - - - - -
Sponsor Stock Fund
(Member directed) - - - - - -
Loans to Members - - - - - -
----------- ----------- ----------- ----------- ----------- ----------
Total investments at fair market value 3,075,484 7,104,525 13,117,595 1,057,011 3,046,380 2,989,307
Employee contributions receivable 10,980 8,053 25,494 13,030 36,031 22,453
Employer contributions receivable - - - - - -
----------- ----------- ----------- ----------- ----------- ----------
Total assets $ 3,086,464 $ 7,112,578 $13,143,089 $ 1,070,041 $ 3,082,411 $3,011,760
=========== =========== =========== =========== =========== ==========
PLAN EQUITY
-----------
Total plan equity $ 3,086,464 $ 7,112,578 $13,143,089 $ 1,070,041 $ 3,082,411 $3,011,760
=========== =========== =========== =========== =========== ==========
<CAPTION>
SPONSOR
STOCK LOANS TO UNALLOCATED
FUND * MEMBERS AMOUNTS TOTAL
----------- -------- --------- -----------
<S> <C> <C> <C> <C>
ASSETS
------
Investments at fair market value:
Mutual funds $30,390,302
Sponsor Stock Fund
(Not Member directed) $5,428,524 5,428,524
Sponsor Stock Fund
(Member directed) 901,536 901,536
Loans to Members - $476,163 476,163
----------- -------- -----------
Total investments at fair market value 6,330,060 476,163 37,196,525
Employee contributions receivable 6,214 - 122,255
Employer contributions receivable 30,352 - $ 800,000 830,352
----------- -------- --------- -----------
Total assets $6,366,626 $476,163 $ 800,000 $38,149,132
=========== ======== ========= ===========
PLAN EQUITY
-----------
Total plan equity $6,366,626 $476,163 $ 800,000 $38,149,132
=========== ======== ========= ===========
</TABLE>
* Denotes Plan holdings which represent 5% or more of Plan equity.
The accompanying notes are an integral part of the financial statements.
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<PAGE> 5
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
Statement of Financial Condition
with Fund Information
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY
RETIREMENT FIDELITY
GOVERNMENT FIDELITY GROWTH FIDELITY
MONEY INTERMEDIATE & FIDELITY BLUE CHIP FIDELITY
MARKET BOND INCOME PURITAN GROWTH CONTRA-
PORTFOLIO FUND PORTFOLIO FUND FUND FUND
--------- ------------ --------- -------- --------- --------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments at fair market value:
Mutual funds $ 2,905,429 $ 14,276,177 $12,246,865 $ 27,989 $ 76,284 $ 46,475
Sponsor Stock Fund
(Not Member directed) - - - - - -
Sponsor Stock Fund
(Member directed) - - - - - -
----------- ------------ ----------- --------- ---------- ------------
Total investments at fair market value 2,905,429 14,276,177 12,246,865 27,989 76,284 46,475
Employee contributions receivable 10,788 10,678 19,979 13,314 34,308 18,954
Employer contributions receivable - - - - - -
----------- ------------ ----------- --------- ---------- ------------
Total assets $ 2,916,217 $ 14,286,855 $12,266,844 $ 41,303 $ 110,592 $ 65,429
=========== ============ =========== ========= ========== ============
PLAN EQUITY
Total plan equity $ 2,916,217 $ 14,286,855 $12,266,844 $ 41,303 $ 110,592 $ 65,429
=========== ============ =========== ========= ========== ============
<CAPTION>
SPONSOR
STOCK UNALLOCATED
FUND AMOUNTS TOTAL
------- ----------- -----
ASSETS
<S> <C> <C> <C>
Investments at fair market value:
Mutual funds $ - $ - $ 29,579,219
Sponsor Stock Fund
(Not Member directed) 6,580,875 - 6,580,875
Sponsor Stock Fund
(Member directed) 830,224 - 830,224
------------ ------------- ------------
Total investments at fair market value 7,411,099 - 36,990,318
Employee contributions receivable 7,690 - 115,711
Employer contributions receivable 30,331 745,000 775,331
------------ ------------- ------------
Total assets $ 7,449,120 $ 745,000 $ 37,881,360
============ ============= ============
PLAN EQUITY
Total plan equity $ 7,449,120 $ 745,000 $ 37,881,360
============ ============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
Statement of Income and Changes in Plan Equity
with Fund Information
Year Ended September 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY
RETIREMENT FIDELITY
GOVERNMENT FIDELITY GROWTH FIDELITY
MONEY INTERMEDIATE & FIDELITY BLUE CHIP
MARKET BOND INCOME PURITAN GROWTH FIDELITY
PORTFOLIO FUND PORTFOLIO FUND FUND CONTRAFUND
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends $ 122,970 $ 656,168 $ 801,607 $ 114,950 $ 270,447 $ 226,446
Interest on loans to Members - - - - - -
Other interest - - 1,759 - - -
----------- ----------- ----------- ----------- ----------- ----------
Investment income 122,970 656,168 803,366 114,950 270,447 226,446
Net realized gain (loss) on sale of investments - (18,033) 407,063 2,156 6,389 (6,160)
Net unrealized appreciation (depreciation) - (151,022) 1,075,336 (45,331) (21,148) 104,716
----------- ----------- ----------- ----------- ----------- ----------
Total 122,970 487,113 2,285,765 71,775 255,688 325,002
Contributions:
Participating employees 126,674 112,454 288,027 163,629 452,211 275,963
Participating employers - - - - - -
Rollover from qualified plans - - - 1,307 5,228 -
Loans to Members (116,142) (148,620) (229,798) (6,384) (25,318) (22,701)
Repayments on loans to Members 7,304 9,008 12,319 9,200 18,465 9,818
Member distributions (1,223,621) (1,444,204) (1,365,476) (15,284) (73,061) (65,139)
Fees (25,604) (2,034) (2,164) (1,372) (257) (150)
Interfund transfers:
Member directed 724,514 (6,196,815) (188,189) 789,636 2,292,759 2,368,229
Allocation of prior year employer contribution 551,827 6,236 72,429 14,096 41,634 53,050
Allocation of interest on loans to Members 2,325 2,585 3,332 2,135 4,470 2,259
Plan equity at beginning of year 2,916,217 14,286,855 12,266,844 41,303 110,592 65,429
----------- ----------- ----------- ----------- ----------- ----------
Plan equity at end of year $ 3,086,464 $ 7,112,578 $13,143,089 $ 1,070,041 $ 3,082,411 $3,011,760
=========== =========== =========== =========== =========== ==========
<CAPTION>
SPONSOR
STOCK LOANS TO UNALLOCATED
FUND (a) MEMBERS AMOUNTS TOTAL
---------- -------- --------- -----------
<S> <C> <C> <C> <C>
Investment income:
Cash dividends $ 2,192,588
Interest on loans to Members $ 17,949 17,949
Other interest - 1,759
-------- -----------
Investment income 17,949 2,212,296
Net realized gain (loss) on sale of investments $ 547,951 - 939,366
Net unrealized appreciation (depreciation) (1,505,348) - (542,797)
---------- -------- -----------
Total (957,397) 17,949 2,608,865
Contributions:
Participating employees 86,778 - 1,505,736
Participating employers 380,493 - $ 800,000 1,180,493
Rollover from qualified plans - - - 6,535
Loans to Members (28,717) 577,680 - -
Repayments on loans to Members 3,735 (69,849) - -
Member distributions (782,073) (31,668) - (5,000,526)
Fees (1,750) - - (33,331)
Interfund transfers:
Member directed 209,866 - - -
Allocation of prior year employer contribution 5,728 (745,000) -
Allocation of interest on loans to Members 843 (17,949) -
Plan equity at beginning of year 7,449,120 - 745,000 37,881,360
----------- -------- --------- -----------
Plan equity at end of year $ 6,366,626 $476,163 $ 800,000 $38,149,132
=========== ======== ========= ===========
</TABLE>
(a) The portion of this fund which is attributable to Members' Employer Matching
Contribution Accounts is not Member directed. In addition, the portion of
this fund which is attributable to assets held by the Plan, as of June 30,
1995, as a result of Discretionary Employer Contributions is not Member
directed.
The accompanying notes are an integral part of the financial statements.
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<PAGE> 7
Notes to Financial Statements
Note 1 - Description of the Plan
The Daniel Industries, Inc. Employees' Profit Sharing and Retirement
Plan (the "Profit Sharing Plan") was initially established effective September
30, 1953. The Daniel Industries, Inc. Employees' Savings Plan (the "Savings
Plan") was initially established effective October 1, 1982, as a stock purchase
plan and was amended to become a pre-tax savings plan effective April 1, 1984.
Effective October 1, 1991, the Profit Sharing Plan was merged into the Savings
Plan. The Savings Plan was thereafter called the Daniel Industries, Inc.
Employees' Profit Sharing and Savings Plan (the "Plan") and was amended from
time to time to reflect certain changes in the Internal Revenue Code, as
amended (the "Code").
Effective July 1, 1995, the Plan was amended and restated to (a)
provide for daily valuation of Members' Accounts, (b) permit Members, subject
to certain restrictions, to direct the investment of the assets in their
Discretionary Employer Contribution Account, (c) increase the number of
investment options available to Members, (d) provide for more timely
distributions and withdrawals and (e) permit Members on a daily basis to change
their investment elections for future contributions and transfer their account
balances among investment elections, all as hereinafter described.
The following description provides only general information relating
to the Plan and is qualified by the terms of the Plan. Capitalized terms which
are not otherwise defined herein are
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defined in the Plan. Members should refer to the Summary Plan Description or
the Plan document for a more complete explanation of the Plan's provisions.
The Plan document is controlling at all times.
Participation
The Plan is a defined contribution plan in which each employee of
Daniel Industries, Inc. (the "Company" or the "Sponsor"), Daniel Flow Products,
Inc., Daniel Valve Company and Oilfield Fabricating and Machine, Inc.
(together, the "Employers")is initially eligible to participate on the second
entry date (the first day of each calendar quarter) next following the date
such employee was first employed by an Employer. Oilfield Fabricating and
Machine, Inc. adopted the Plan effective July 1, 1996. Daniel Industrial, Inc.
terminated its participation in the Plan effective November 30, 1995. Assets
remaining in the Plan belonging to Members previously employed by Daniel
Industrial, Inc. are immaterial to the Plan as a whole.
Contributions
The Plan provides for Discretionary Employer Contributions in such
amount, if any, that shall be determined by the Employers. Upon receipt of the
related funds from the Employers, these contributions are allocated among each
Employer's Active Members in the proportion which the Considered Compensation
of each Member for the Plan Year bears to the total Considered Compensation of
all Members of that Employer for the Plan Year. Prior to receipt of
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the related funds previously determined to be contributed by the Employers,
these contributions appear as unallocated amounts in the financial statements.
A summary of Discretionary Employer Contributions for the Plan Year ended
September 30, 1996 is as follows:
<TABLE>
<CAPTION>
Discretionary Employer
Contributions for Plan Year
Employer Ended September 30, 1996
- ----------------------------------- --------------------------
<S> <C>
Daniel Industries, Inc. $ 69,495
Daniel Flow Products, Inc. 525,623
Oilfield Fabricating & Machine Inc. 21,497
Daniel Valve Company 183,385
--------
$800,000
========
</TABLE>
Further, an eligible employee may choose, by completing and returning
to the Administrative Committee of the Plan (the "Administrative Committee") a
Salary Deferral Agreement, to authorize his Employer to reduce his Considered
Compensation by a certain amount and to contribute on his behalf such amount to
a trust (the "Trust") created under the Plan. The maximum reduction in
compensation that an employee participating in the Plan may elect for
contribution to the Plan is determined by the Administrative Committee; the
nontaxable portion of each employee's annual salary deferral contribution is
limited to the maximum amount permitted by the Secretary of the Treasury
($9,500 for the 1996 calendar year). In addition, such contributions by
eligible employees who are "highly compensated employees" (within the meaning
of Section 414(q) of the Code) are subject to nondiscrimination limitations
that are affected by contributions made by all other eligible employees.
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<PAGE> 10
Each Employer makes contributions ("Salary Deferral Contributions")
for each Member employed by such Employer in amounts equal to the amounts by
which each such Member's Considered Compensation was reduced pursuant to his
Salary Deferral Agreement. In addition, each Employer is required to make a
matching contribution (an "Employer Matching Contribution") for each Member
employed by such Employer in an amount equal to the lesser of 1.5% of such
Member's Considered Compensation or 50% of such Member's Salary Deferral
Contributions. Under certain circumstances, a Member may make additional
Rollover Contributions and Voluntary Employee Contributions to the Trust.
Salary Deferral Contributions, Employer Matching Contributions and
Discretionary Employer Contributions made on behalf of each Member are credited
to such Member's Salary Deferral Contribution Account, Employer Matching
Contribution Account and Discretionary Employer Contribution Account,
respectively. Each of such Accounts reflects the contributions, forfeitures
and Investment Gain or Loss allocated to such Account. A Member's
Discretionary Employer Contribution Account, Salary Deferral Contribution
Account, Employer Matching Contribution Account, Rollover Contribution Account
and Voluntary Employee Contribution Account are referred to collectively as a
Member's Accounts.
A summary of Members' Salary Deferral Contributions and a summary of
Employer Matching Contributions for the Plan Year ended September 30, 1996, are
as follows:
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<TABLE> Members' Salary Deferral
<CAPTION> Contributions for Plan Year Ended
Employer September 30, 1996
- --------------------------- ---------------------------------
<S> <C>
Daniel Industries, Inc. $ 153,868
Daniel Flow Products, Inc. 963,719
Daniel Industrial, Inc. 22,228
Oilfield Fabricating & Machine, Inc. 9,130
Daniel Valve Company 356,791
----------
$1,505,736
==========
<CAPTION>
Employer Matching
Contributions for Plan Year Ended
Employer September 30, 1996
- --------------------------- ----------------------------------
<S> <C>
Daniel Industries, Inc. $ 38,491
Daniel Flow Products, Inc. 243,887
Daniel Industrial, Inc. 7,011
Oilfield Fabricating & Machine, Inc. 2,383
Daniel Valve Company 88,721
----------
$ 380,493
==========
</TABLE>
Investments
The Plan provides for assets held by the Plan as a result of Employer
Matching Contributions to be invested in the Sponsor Stock Fund. Assets held
by the Plan as of June 30, 1995, as a result of Discretionary Employer
Contributions and invested in the fund entitled the Company Stock Fund shall be
invested in the Sponsor Stock Fund. The Plan further provides that assets held
by the Plan as a result of Salary Deferral Contributions, Discretionary
Employer Contributions (except as specified above) and Rollover Contributions
shall be invested in such categories of assets as may be determined by the
Administrative Committee. Such categories of assets currently include seven
investment alternatives. Except for the Sponsor Stock Fund, all of the
investment alternatives are
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mutual funds managed by Fidelity Management and Research Company. The mutual
funds are as follows:
Fidelity Retirement Government Money Market Portfolio
Fidelity Intermediate Bond Fund
Fidelity Growth & Income Portfolio
Fidelity Puritan Fund
Fidelity Blue Chip Growth Fund
Fidelity Contrafund
In addition, a loan to a Member is a Member directed investment of that
Member's Account.
Earnings and losses on assets in the investment funds are allocated
solely to the Account of the Member, or Beneficiary, on whose behalf the
investment in the fund was made.
The Plan provides that each Member is required to designate the
percentage of his share of Salary Deferral Contributions and Discretionary
Employer Contributions and of his Rollover Contributions to be invested in each
fund. The percentage to be invested in any fund may be any whole percentage.
A Member has the right to change the percentage of his share of such
contributions to be invested in a particular fund on any business day. In
addition, a Member has the right to change the percentage of the then present
interest in his Salary Deferral Contribution Account, Discretionary Employer
Contribution Account (subject to limitations described above) and his Rollover
Contribution Account to be invested in the respective funds on any business
day. Members may participate in all funds simultaneously. As Employer
Matching Contributions are invested in the Sponsor Stock Fund, all Members
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<PAGE> 13
who are eligible for such contributions become participants in such fund.
Vesting
A Member is always 100% vested in all of his Accounts except his
Discretionary Employer Contribution Account. The balance in each Member's
Discretionary Employer Contribution Account vests with such Member in 20%
annual increments beginning with such Member's third employment anniversary
date. Accordingly, Members are fully vested at the end of seven years. A
Member's interest in the Discretionary Employer Contribution Account also
becomes fully vested upon Retirement or upon death or Separation on account of
Total and Permanent Disability. In addition, under the terms of the Daniel
Industries, Inc. Employees' Profit Sharing and Savings Plan Partial Termination
Agreement, any Member whose employment is terminated as a result of the
Company's Restructuring Plan announced on February 2, 1995, shall become fully
vested in his Discretionary Employer Contribution Account. Non-vested amounts
are forfeited upon termination of employment and are used to restore any
accounts required to be restored. Any excess forfeited balances at the end of
the Plan Year are allocated to remaining Members on the same basis used to
allocate Discretionary Employer Contributions of the Employers as described
above.
Distributions and Withdrawals
Upon the death, Total and Permanent Disability, or Retirement of a
Member, or his termination of employment with his Employer, such Member or his
validly designated Beneficiary is entitled to a
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<PAGE> 14
distribution of the vested interest of the amount in the Member's Accounts net
of any outstanding loans.
Each Member who has completed five years of Vesting Service and who
has given written notice to the Administrative Committee may withdraw a
specified amount of his Discretionary Employer Contribution Account, but not in
excess of 25% of his vested interest in such account. The number of such
withdrawals available to a Member is limited to one prior to his completion of
ten years of Vesting Service and one subsequent to his completion of ten years
of Vesting Service.
A Member who is suffering a qualifying financial hardship may file a
written request with the Administrative Committee to withdraw from his Salary
Deferral Contribution Account, Employer Matching Contribution Account and
Rollover Contribution Account an amount necessary to ease his hardship.
However, a Member is not entitled to make a financial hardship withdrawal of
any earnings credited to the Member's Salary Deferral Contribution Account or
of any Employer Matching Contributions or earnings credited to the Member's
Employer Matching Contribution Account after December 31, 1988.
Upon reaching age 55 and completing 25 years of service, a Member,
upon giving written notice to the Administrative Committee, may make one
withdrawal of an amount not in excess of the total balance in his Accounts
other than his Salary Deferral Contribution Account. Upon reaching age 60 and
completing 25 years of service, a Member, upon giving written notice to the
Administrative
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<PAGE> 15
Committee, may make one withdrawal of an amount not in excess of the total
balance in his Accounts (exclusive of any Account(s) from which he made a prior
withdrawal pursuant to this provision).
The Plan provides that, for the purpose of receiving a distribution
or making any of the withdrawals described above, a Member's Accounts shall be
valued on the Valuation Date coincident with the distribution or withdrawal.
Subject to the limitations established by Section 401(a)(9) of the
Code, distributions are payable in accordance with the Member's choice in cash
or in kind, or both, in any one or a combination of the following manners: (i)
in one lump sum; or (ii) in substantially equal periodic installments for a
specified number of years not to exceed the greater of (a) 25 years or (b) the
life expectancy of the Member or the joint and last survivor life expectancy of
the Member and his spouse or other Beneficiary or such shorter period as may
result from the allocation of losses to his Accounts.
Loans
Coincident with the July 1, 1995 amendment and restatement of the
Plan, the Administrative Committee determined that loans may be made to
Members. A Member may borrow up to 50% of the vested interest in his Employer
Matching Contribution Account, Salary Deferral Contribution Account and
Rollover Contribution Account. The minimum amount that may be borrowed is
$1,000 and the maximum is $50,000. A Member may have no more than one loan
outstanding at any time. At September 30, 1996, the Plan had outstanding loans
to
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<PAGE> 16
Members in the amount of $476,163 earning interest at rates ranging from 7.90%
to 8.38%.
Trustee and Investment Manager
The Trustee of the Plan is Fidelity Management Trust Company. Under
the terms of the Plan, as amended, and/or the Trust Agreement between the
Company and Fidelity Management Trust Company, the Trustee's duties are to
maintain custody of the assets of the Trust Fund, to invest and reinvest the
assets of the Trust Fund subject to the instruction of the Members and the
terms of the Trust, and to perform certain ministerial, record keeping and
administrative functions under the Plan. The Trustee is appointed by the Board
of Directors of the Company and serves as Trustee under the terms of the Trust
and the Plan until termination of the Trust, the resignation of the Trustee or
the removal of the Trustee by the Board of Directors of the Company. In
addition, the Trustee shall vote the shares of the Company's common stock and
the shares of the mutual funds held by the Trust subject to instruction by the
Members who have interests in the Sponsor Stock Fund and in the mutual funds.
Fidelity Investments Institutional Services Company ("Fidelity"), the
Plan's investment manager, makes investment decisions regarding all of the
Plan's investments except the Sponsor Stock Fund. The investment manager is
appointed by the Plan's Administrative Committee which reviews its performance.
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<PAGE> 17
Termination of the Plan
The Company currently intends to continue the Plan indefinitely, but
it may terminate the Plan at any time, withdraw from the Plan, or amend it in
whole or in part. Any Employer that has adopted the Plan may terminate the
Plan with respect to itself by executing and delivering to the Trustee a notice
of termination that specifies the date on which the Plan will terminate. If
the Plan is terminated, all vested and non-vested amounts credited to the
Accounts of each Member will be paid to such Member or his Beneficiary after
payment of all expenses and adjustments.
Note 2 - Significant Accounting Policies
Basis of Presentation of Financial Statements
The financial statements of the Plan are prepared on the accrual basis
of accounting in accordance with generally accepted accounting principles.
Use of Estimates
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles may require the Plan's management to
make estimates and assumptions that affect the reported amounts of certain
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the related reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. Management believes that any
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<PAGE> 18
estimates made in connection with these financial statements are reasonable.
Investments
Investments are stated at fair market value as determined by quoted
market prices. Any change in the fair market value of the common stock of the
Company and other securities held and in the net asset value of each mutual
fund is recorded in the Statement of Income and Changes in Plan Equity with
Fund Information as an increase or decrease in unrealized appreciation or
depreciation. Dividends and interest income are recorded when earned in the
case of the common stock of the Company and other securities, and when
distributed in the case of the mutual funds.
Administrative Expenses
Trustee and recordkeeping fees and expenses relating to the Plan's
mutual funds are paid by the Plan. Legal and audit fees relating to the Plan
are paid by the Company.
Note 3 - Member Distribution Obligations
Distribution payments to members are recognized only upon payment.
Obligations for distribution payments to Members are reflected as liabilities
in the Form 5500 Annual Return/Report of Employee Benefit Plan.
Note 4 - Federal Income Tax Status
Based on the design and current operation of the Plan, management
believes that the Plan is qualified under Section
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<PAGE> 19
401(a), and, therefore, the Trust is exempt from taxation under Section 501(a)
of the Code. The Internal Revenue Service granted a favorable letter of
determination to the Plan on April 24, 1996. Generally, contributions to a
qualified plan are deductible by the Company when made. Earnings of the Trust
are tax exempt and Members are not taxed on their benefits until withdrawn from
the Plan and not rolled over into another qualified plan or individual
retirement account.
Note 5 - Unrealized Appreciation (Depreciation) of Investments and Realized
Gains (Losses) on Sale of Investments
Unrealized appreciation (depreciation) of investments and realized
gains (losses) on the sale of investments are determined on a historical cost
basis. For purposes of presenting such information in the Plan's Form 5500
Annual Return/Report of Employee Benefit Plan, the current value method is
used. Under the current value method, net realized gain on sales of
investments of $205,869, and net unrealized appreciation of investments of
$190,700 were incurred during the year ended September 30, 1996, as calculated
and provided by the Plan's Trustee.
Note 6 - Subsequent Events
Net assets of approximately $1,500,000 belonging to Members of the
Plan previously employed by Daniel En-Fab Systems, Inc., which terminated its
participation in the Plan on June 30, 1995, are
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<PAGE> 20
expected to be transferred to another qualified Plan by December 31, 1996.
-20-
<PAGE> 21
Schedule 1
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
(b) Identity of issue, (c) Description of investment including
borrower, lessor maturity date, rate of interest, (e) Current
(a) or similar party collateral, par or maturity value (d) Cost value
- --- ---------------------- ------------------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
* Sponsor Stock Fund Common Stock $ 3,023,492 $ 6,330,060
* Fidelity Contrafund Mutual Fund 2,884,365 2,989,307
* Fidelity Blue Chip Growth Fund Mutual Fund 3,071,096 3,046,380
* Fidelity Growth & Income
Portfolio Mutual Fund 11,404,203 13,117,595
* Fidelity Puritan Fund Mutual Fund 1,102,341 1,057,011
* Fidelity Intermediate Bond Fund Mutual Fund 7,268,798 7,104,525
* Fidelity Retirement Government
Money Market Portfolio Mutual Fund 3,075,484 3,075,484
* Participant Loans Loans, with interest ranging
from 7.90% to 8.38% -0- 476,163
----------- -----------
Plan Assets Held for Investment Purposes $31,829,779 $37,196,525
=========== ===========
</TABLE>
* Represents an investment associated with a party in interest.
<PAGE> 22
Schedule 2
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
(b)
Description of
asset (include (h)
(a) interest rate (f) Current value
Identity of and maturity (c) (d) (e) Expense (g) of asset on (i)
party in case Purchase Selling Lease incurred with Cost transaction Net gain
involved of a loan) price price rental transaction of asset date or (loss)
- ----------- ------------ ----------- ---------- ------ ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Sponsor $1,039,097 $1,162,739 $ 614,788 $1,162,739 $547,951
Investments Stock Fund
Fidelity Growth & 3,781,726 4,393,395 3,986,332 4,393,395 407,063
Investments Income Fund
Fidelity Intermediate 1,184,878 8,187,475 8,205,508 8,187,475 (18,033)
Investments Bond Fund
Fidelity Retirement 3,591,534 3,421,479 3,421,479 3,421,479
Investments Government
Money Market
Fund
Fidelity Blue Chip 3,533,002 548,147 541,758 548,147 6,389
Investments Growth Fund
Fidelity Contrafund 3,300,029 455,753 461,913 455,753 (6,160)
Investments
Fidelity Puritan Fund 1,212,297 140,100 137,944 140,100 2,156
Investments
</TABLE>
<PAGE> 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 2-79399), of Daniel Industries, Inc. of our report
dated December 19, 1996, appearing on Page 3 of this Annual Report on Form 11-K.
PRICE WATERHOUSE LLP
Houston, Texas
December 20, 1996
