<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 11-K
---------------
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended September 30, 1997
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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<PAGE> 2
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 19, 1997 By /s/ James Hall
----------------- ----------------------------
James Hall
Member of the Administrative
Committee
Date DECEMBER 19, 1997 By /s/ Wilfred Krenek
----------------- ----------------------------
Wilfred Krenek
Member of the Administrative
Committee
Date DECEMBER 19, 1997 By /s/ Bela Vaczi
----------------- ----------------------------
Bela Vaczi
Member of the Administrative
Committee
Date DECEMBER 19, 1997 By /s/ Michael R. Yellin
----------------- ----------------------------
Michael R. Yellin
Member of the Administrative
Committee
2
<PAGE> 3
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 net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of Daniel Industries, Inc. Employees' Profit Sharing and Savings Plan
at September 30, 1997 and 1996, and the changes in net assets available for
benefits for the year ended September 30, 1997, 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 purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. The fund information in the statement of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for benefits 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 15, 1997
3
<PAGE> 4
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
SEPTEMBER 30, 1997
<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>
Investments at fair market value:
Mutual funds $ 2,657,973 $ 5,965,626 $16,880,329 $ 1,564,464 $ 4,744,947 $ 4,648,055
Sponsor Stock Fund
(Not Member directed) -- -- -- -- -- --
Sponsor Stock Fund
(Member directed) -- -- -- -- -- --
Loans to Members -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total investments at fair market value 2,657,973 5,965,626 16,880,329 1,564,464 4,744,947 4,648,055
Employee contributions receivable 8,159 6,424 33,723 12,650 35,536 24,869
Employer contributions receivable -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 2,666,132 $ 5,972,050 $16,914,052 $ 1,577,114 $ 4,780,483 $ 4,672,924
=========== =========== =========== =========== =========== ===========
<CAPTION>
-------------------------------------------------------
SPONSOR
STOCK LOANS TO UNALLOCATED
FUND(*) MEMBERS AMOUNTS TOTAL
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Investments at fair market value:
Mutual funds $ -- $ -- $ -- $ 36,461,394
Sponsor Stock Fund
(Not Member directed) 8,006,760 -- -- 8,006,760
Sponsor Stock Fund
(Member directed) 2,118,999 -- -- 2,118,999
Loans to Members -- 587,816 -- 587,816
----------- ----------- ----------- -------------
Total investments at fair market value 10,125,759 587,816 -- 47,174,969
Employee contributions receivable 7,506 -- -- 128,867
Employer contributions receivable 31,765 -- 800,000 831,765
----------- ----------- ----------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $10,165,030 $ 587,816 $ 800,000 $ 48,135,601
=========== =========== =========== =============
</TABLE>
(*) Denotes Plan holdings which represent 5% or more of the Plan's net assets
available for benefits.
The accompanying notes are an integral part of the financial statements.
- 4 -
<PAGE> 5
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
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>
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 -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 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>
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
----------- ----------- ----------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $ 6,366,626 $ 476,163 $ 800,000 $ 38,149,132
=========== =========== =========== =============
</TABLE>
(*) Denotes Plan holdings which represent 5% or more of the Plan's net assets
available for benefits.
The accompanying notes are an integral part of the financial statements.
- 5 -
<PAGE> 6
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
YEAR ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
FIDELITY
RETIREMENT FIDELITY
GOVERNMENT FIDELITY GROWTH FIDELITY
MONEY INTERMEDIATE & FIDELITY BLUE CHIP
MARKET BOND INCOME PURITAN GROWTH
PORTFOLIO FUND PORTFOLIO FUND FUND
------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income:
Cash dividends $ 146,691 $ 416,451 $ 733,018 $ 92,168 $ 157,923
Interest on loans to Members 2,141 3,730 9,122 5,258 10,206
Other 98 39 213 60 164
Net appreciation -- 81,625 3,563,678 237,448 994,572
------------ ------------ ------------ ------------ ------------
Total investment income 148,930 501,845 4,306,031 334,934 1,162,865
Contributions:
Participating employees 111,988 84,464 381,822 164,406 452,277
Participating employers -- -- -- -- --
Rollover from qualified plans -- -- 20,071 13,896 38,245
Repayments on loans to Members 6,795 15,141 33,158 17,410 61,226
------------ ------------ ------------ ------------ ------------
TOTAL ADDITIONS 267,713 601,450 4,741,082 530,646 1,714,613
------------ ------------ ------------ ------------ ------------
DEDUCTIONS FROM NET ASSETS:
Member distributions (480,029) (386,079) (769,465) (230,212) (359,233)
Loans to Members (42,350) (47,125) (115,557) (17,469) (47,155)
Administrative expenses (19,000) (1,608) (3,432) (3,440) (311)
Transfer to qualified plan (229,708) (107,943) (467,985) (174) (27,256)
------------ ------------ ------------ ------------ ------------
TOTAL DEDUCTIONS (771,087) (542,755) (1,356,439) (251,295) (433,955)
------------ ------------ ------------ ------------ ------------
Interfund transfers (89,629) (1,252,920) 213,923 167,536 247,663
------------ ------------ ------------ ------------ ------------
Allocation of prior year employer contribution 172,671 53,697 172,397 60,186 169,751
------------ ------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS (420,332) (1,140,528) 3,770,963 507,073 1,698,072
NET ASSETS AVAILABLE FOR BENEFITS AT THE
BEGINNING OF YEAR 3,086,464 7,112,578 13,143,089 1,070,041 3,082,411
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS AT THE
END OF YEAR $ 2,666,132 $ 5,972,050 $ 16,914,052 $ 1,577,114 $ 4,780,483
============ ============ ============ ============ ============
<CAPTION>
-------------------------------------------------------------------------------
SPONSOR
FIDELITY STOCK LOANS TO UNALLOCATED
CONTRAFUND FUND (a) MEMBERS AMOUNTS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income:
Cash dividends $ 207,607 $ -- $ -- $ -- $ 1,753,858
Interest on loans to Members 7,092 1,917 -- -- 39,466
Other 124 32 -- -- 730
Net appreciation 929,788 3,389,059 -- -- 9,196,170
------------ ------------ ------------ ----------- ---------------
Total investment income 1,144,611 3,391,008 -- -- 10,990,224
Contributions:
Participating employees 305,100 85,945 -- -- 1,586,002
Participating employers -- 394,469 -- 800,000 1,194,469
Rollover from qualified plans 16,927 -- -- -- 89,139
Repayments on loans to Members 44,016 10,524 (188,270) -- --
------------ ------------ ------------ ----------- ---------------
TOTAL ADDITIONS 1,510,654 3,881,946 (188,270) 800,000 13,859,834
------------ ------------ ------------ ----------- ---------------
DEDUCTIONS FROM NET ASSETS:
Member distributions (168,163) (482,955) (27,488) -- (2,903,624)
Loans to Members (39,818) (17,937) 327,411 -- --
Administrative expenses (153) (3,924) -- -- (31,868)
Transfer to qualified plan (104,807) -- -- -- (937,873)
------------ ------------ ------------ ----------- ---------------
TOTAL DEDUCTIONS (312,941) (504,816) 299,923 -- (3,873,365)
------------ ------------ ------------ ----------- ---------------
Interfund transfers 328,618 384,809 -- -- --
------------ ------------ ------------ ----------- ---------------
Allocation of prior year employer contribution 134,833 36,465 -- (800,000) --
------------ ------------ ------------ ----------- ---------------
INCREASE (DECREASE) IN NET ASSETS 1,661,164 3,798,404 111,653 -- 9,986,469
NET ASSETS AVAILABLE FOR BENEFITS AT THE
BEGINNING OF YEAR 3,011,760 6,366,626 476,163 800,000 38,149,132
------------ ------------ ------------ ----------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS AT THE
END OF YEAR $ 4,672,924 $ 10,165,030 $ 587,816 $ 800,000 $ 48,135,601
============ ============ ============ =========== ===============
</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.
- 6 -
<PAGE> 7
Notes to Financial Statements
Note 1 - Description of the Plan
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 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.
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").
The Plan has been amended and restated effective January 1, 1998.
See Note 5.
Participation
The Plan is a defined contribution plan in which each Employee of Daniel
Industries, Inc. (the "Company" or the "Sponsor"), Daniel Measurement and
Control, Inc. (formerly 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 En-Fab Systems, Inc. terminated its participation in the Plan
on June 30, 1995. Approximately $938,000 in assets belonging to Members of the
Plan previously employed by Daniel En-Fab Systems, Inc. were transferred to
another qualified plan during the Plan year. 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.
and Daniel En-Fab Systems, 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
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<PAGE> 8
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 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, 1997 is as
follows:
<TABLE>
<CAPTION>
Discretionary Employer
Contributions for Plan Year
Employer Ended September 30, 1997
----------------------------- ---------------------------
<S> <C>
Daniel Industries, Inc. $ 65,011
Daniel Measurement and Control, Inc. 535,390
Oilfield Fabricating & Machine Inc. 26,044
Daniel Valve Company 173,555
---------
$ 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 a Member participating in the Plan may elect for contribution
to the Plan is determined by the Administrative Committee; the nontaxable
portion of each Member's annual Salary Deferral Contribution is limited to the
maximum amount permitted by the Secretary of the Treasury ($9,500 for the 1997
calendar year). In addition, such contributions by Members 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 Members.
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.
8
<PAGE> 9
A summary of Members' Salary Deferral Contributions and a summary of
Employer Matching Contributions for the Plan Year ended September 30, 1997, are
as follows:
<TABLE>
<CAPTION>
Members' Salary Deferral
Contributions for Plan Year Ended
Employer September 30, 1997
- --------------------------- ---------------------------------
<S> <C>
Daniel Industries, Inc. $ 158,504
Daniel Measurement and Control, Inc. 999,773
Oilfield Fabricating & Machine, Inc. 46,586
Daniel Valve Company 381,139
----------
$1,586,002
==========
</TABLE>
<TABLE>
<CAPTION>
Employer Matching
Contributions for Plan Year Ended
Employer September 30, 1997
- --------------------------- -----------------------------------
<S> <C>
Daniel Industries, Inc. $ 38,580
Daniel Measurement and Control, Inc. 251,239
Oilfield Fabricating & Machine, Inc. 10,822
Daniel Valve Company 93,828
----------
$ 394,469
==========
</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 include seven investment alternatives.
Except for the Sponsor Stock Fund, all of the investment alternatives are mutual
funds managed by Fidelity Management and Research Company. The investment
options are as follows:
Fidelity Retirement Government Money Market Portfolio-invests in U.S.
Government securities and repurchase agreements for these securities.
Fidelity Intermediate Bond Fund-normally invests in investment grade debt
securities.
Fidelity Growth & Income Portfolio-invests mainly in equity securities of
companies that pay current dividends and offer potential growth of earnings.
Fidelity Puritan Fund-invests in a broadly diversified portfolio of
high-yielding equity and debt securities.
9
<PAGE> 10
Fidelity Blue Chip Growth Fund-invests mainly in common stocks of well-known
and established companies.
Fidelity Contrafund-invests mainly in equity securities of companies that are
undervalued or out-of-favor.
Sponsor Stock Fund-invests primarily in Daniel Industries, Inc. common stock.
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.
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, by amount or percentage, his
interest in each of his Accounts (subject to limitations described above) 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 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 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
10
<PAGE> 11
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
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
A Member may borrow up to 50% of his Employer Matching Contribution
Account, Salary Deferral Contribution Account and Rollover Contribution Account
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, 1997, the Plan had
outstanding loans to Members in the amount of $587,816 earning interest at rates
ranging from 7.90% to 9.26%.
11
<PAGE> 12
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.
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
The financial statements of the Plan are prepared on the accrual basis of
accounting in accordance with generally accepted accounting principles.
Investments
Investments are stated at fair market value as determined by quoted market
prices as of the end of the Plan year.
Recognition of Income
Interest income is recorded as earned on an accrual basis. Any
change in the net asset value of each mutual fund is recorded in the
Statement of Changes in Net Assets Available for Benefits with Fund
Information as net appreciation (depreciation). Dividends are recorded when
distributed to Members.
12
<PAGE> 13
Net Appreciation and Depreciation of Investments
The Department of Labor requires that the components of net appreciation
(depreciation) for investments be segregated and calculated on a revalued cost
basis for ERISA annual report (Form 5500) reporting purposes. Under the
revalued cost basis, realized gains (losses) are calculated by taking the
proceeds from the sale of assets less the fair value of the assets at the
beginning of the plan year, or at time of purchase if acquired during the
current plan year. Unrealized appreciation (depreciation) of investments is
calculated by taking the fair value of the assets at the end of the plan year
less the fair value of the assets at the beginning of the plan year, or at time
of purchase if acquired during the current plan year.
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 estimates made in connection
with these financial statements are reasonable.
Risks and Uncertainties
The Plan is subject to the normal risks associated with international and
domestic debt, equity and venture capital markets.
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 401(a), and, therefore, the Trust is
exempt from taxation under Section 501(a) of the Code. The Internal Revenue
Service granted 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
13
<PAGE> 14
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 - Subsequent Events
Effective October 1, 1997, the Administrative Committee added two
additional investment alternatives to the categories of assets available for
investment of the Plan's assets. The two alternatives are the Fidelity Spartan
U.S. Equity Index Fund managed by Fidelity Management and Research Company and
the Janus Worldwide Fund managed by Janus Capital.
The Plan has been amended and restated effective January 1, 1998, to
provide for the following:
1) A change in the Plan Year to the calendar year.
2) The merger of the Bettis Corporation Retirement Savings Plan
and the Shafer Valve Company 401(k)Plan into the Plan.
3) A Matching Contribution of 100% of the first three
percent of a Member's Considered Compensation contributed to the Plan
as Salary Deferral Contributions and 50% of the next two percent of a
Member's Considered Compensation contributed to the Plan as Salary
Deferral Contributions.
4) Assets held by the Plan as a result of Employer Matching
Contributions to be invested, according to each Member's direction,
in such categories of assets as may be determined by the
Administrative Committee.
5) The elimination of the vesting schedule with regard to the
Discretionary Employer Contribution Account.
6) A Supplemental Contribution to be made by the Employer on a
discretionary basis.
7) Assets held by the Plan as of June 30, 1995, as a result
of Discretionary Employer Contributions, to be invested
effective January 1, 1999, according to each Member's
direction, in such categories of assets as may be determined
by the Administrative Committee.
14
<PAGE> 15
Schedule 1
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF SEPTEMBER 30, 1997
<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>
* Sponsor Stock Fund Common Stock $ 3,833,575 $10,125,759
* Fidelity Contrafund Mutual Fund 3,673,009 4,648,055
* Fidelity Blue Chip Growth Fund Mutual Fund 3,877,304 4,744,947
* Fidelity Growth & Income
Portfolio Mutual Fund 12,008,812 16,880,329
* Fidelity Puritan Fund Mutual Fund 1,408,513 1,564,464
* Fidelity Intermediate Bond Fund Mutual Fund 6,021,707 5,965,626
* Fidelity Retirement Government
Money Market Portfolio Mutual Fund 2,657,973 2,657,973
* Participant Loans Loans, with interest ranging
from 7.90% to 9.26% - 587,816
----------- -----------
Plan assets held for Investment $33,480,893 $47,174,969
=========== ===========
</TABLE>
* Represents an investment associated with a party in interest.
<PAGE> 16
Schedule 2
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
(h)
Current
(a) value of
Identity (b) (c) (d) (g) asset on (i)
of party Description Purchase Selling Cost transaction Net gain
involved of asset price price of asset date or (loss)
- ----------- -------------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Fidelity Sponsor $1,662,062 $1,255,421 $ 851,979 $1,255,421 $ 403,442
Investments Stock Fund
Fidelity Growth & 3,150,444 2,951,387 2,545,834 2,951,387 405,553
Investments Income Fund
Fidelity Intermediate 862,114 2,082,639 2,109,205 2,082,639 (26,566)
Investments Bond Fund
Fidelity Retirement 2,053,894 2,471,405 2,471,405 2,471,405 -
Investments Government
Money Market
Fund
Fidelity Blue Chip 1,395,656 691,660 589,447 691,660 102,213
Investments Growth Fund
Fidelity Contrafund 1 ,600,464 871,505 811,819 871,505 59,686
Investments
Fidelity Puritan Fund 860,247 590,241 554,075 590,241 36,166
Investments
</TABLE>
Columns (e) and (f) have been omitted because they are not applicable.
NOTE: This schedule is a listing of a series of investment transactions in
the same security which exceed five percent of the Plan's assets as of the
beginning of the Plan year.
<PAGE> 17
Index to Exhibits
<TABLE>
<CAPTION>
No. Description
- --- -----------
<S> <C>
23 Consent of Price Waterhouse LLP
</TABLE>
<PAGE> 1
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 15, 1997, appearing on Page 3 of this Annual Report on Form 11-
K.
PRICE WATERHOUSE LLP
Houston, Texas
December 19, 1997
