<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 December 31, 1998
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 June 28, 1999 By /s/ James Hall
--------------- ---------------------------------------
James Hall
Member of the Committee
Date June 28, 1999 By /s/ Wilfred Krenek
--------------- ---------------------------------------
Wilfred Krenek
Member of the Committee
Date June 28, 1999 By /s/ Bela Vaczi
--------------- ---------------------------------------
Bela Vaczi
Member of the Committee
Date June 28, 1999 By /s/ Michael R. Yellin
--------------- ---------------------------------------
Michael R. Yellin
Member of the 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 ("the
Plan") at December 31, 1998 and 1997, and the changes in net assets available
for benefits for the year ended December 31, 1998, 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 conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets Held
for Investment Purposes and Schedule of Reportable Transactions 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 Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for benefits and 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 benefits and changes in net
assets available for benefits of each fund. These supplemental schedules and
fund information are the responsibility of the Plan's management. The
supplemental schedules and 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.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
June 28, 1999
3
<PAGE> 4
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------------------------------------------------------------
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 $ 6,472,568 $ 6,092,704 $21,775,517 $ 2,504,502 $10,093,663 $ 6,708,857
Sponsor Stock Fund
(Not Member directed) -- -- -- -- -- --
Sponsor Stock Fund
(Member directed) -- -- -- -- -- --
Loans to Members -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total investments at fair market value 6,472,568 6,092,704 21,775,517 2,504,502 10,093,663 6,708,857
Employee contributions receivable 25,468 15,487 76,068 24,042 73,688 47,310
Employer contributions receivable 4,203 2,087 12,348 1,638 11,007 6,262
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 6,502,239 $ 6,110,278 $21,863,933 $ 2,530,182 $10,178,358 $ 6,762,429
=========== =========== =========== =========== =========== ===========
<CAPTION>
DECEMBER 31, 1998
-------------------------------------------------------------------
SPARTAN
SPONSOR U.S. EQUITY JANUS
STOCK INDEX WORLDWIDE LOANS TO
FUND * FUND * FUND MEMBERS TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investments at fair market value:
Mutual funds $ -- $ 4,081,566 $ 1,960,424 $ -- $59,689,801
Sponsor Stock Fund
(Not Member directed) 2,803,442 -- -- -- 2,803,442
Sponsor Stock Fund
(Member directed) 5,042,343 -- -- -- 5,042,343
Loans to Members -- -- -- 1,203,133 1,203,133
----------- ----------- ----------- ----------- -----------
Total investments at fair market value 7,845,785 4,081,566 1,960,424 1,203,133 68,738,719
Employee contributions receivable 17,355 21,576 18,526 -- 319,520
Employer contributions receivable 118,180 5,692 4,578 -- 165,995
----------- ----------- ----------- ----------- -----------
Net assets available for benefits $ 7,981,320 $ 4,108,834 $ 1,983,528 $ 1,203,133 $69,224,234
=========== =========== =========== =========== ===========
</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.
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<PAGE> 5
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------------------------------------
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 $ 2,653,939 $ 6,031,922 $17,215,655 $ 1,533,655 $ 4,711,801 $ 4,298,950
Sponsor Stock Fund
(Not Member directed) -- -- -- -- -- --
Sponsor Stock Fund
(Member directed) -- -- -- -- -- --
Loans to Members -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total investments at fair market value 2,653,939 6,031,922 17,215,655 1,533,655 4,711,801 4,298,950
Employee contributions receivable 10,759 7,944 43,369 15,476 44,722 28,704
Employer contributions receivable -- 13 155 10 37 82
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 2,664,698 $ 6,039,879 $17,259,179 $ 1,549,141 $ 4,756,560 $ 4,327,736
=========== =========== =========== =========== =========== ===========
<CAPTION>
DECEMBER 31, 1997
-------------------------------------------------------------------
SPARTAN
SPONSOR U.S. EQUITY JANUS
STOCK INDEX WORLDWIDE LOANS TO
FUND * FUND FUND MEMBERS TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investments at fair market value:
Mutual funds $ -- $ 946,975 $ 122,841 $ -- $37,515,738
Sponsor Stock Fund
(Not Member directed) 7,883,871 -- -- -- 7,883,871
Sponsor Stock Fund
(Member directed) 2,302,541 -- -- -- 2,302,541
Loans to Members -- -- -- 598,787 598,787
----------- ----------- ----------- ----------- -----------
Total investments at fair market value 10,186,412 946,975 122,841 598,787 48,300,937
Employee contributions receivable 8,808 2,709 903 -- 163,394
Employer contributions receivable 39,346 131 90 -- 39,864
----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $10,234,566 $ 949,815 $ 123,834 $ 598,787 $48,504,195
=========== =========== =========== =========== ===========
</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.
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<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 December 31, 1998
<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 $ 280,985 $ 384,185 $ 1,185,253 $ 257,060 $ 389,869
Interest on loans to Members 6,189 3,114 17,601 6,064 20,793
Interest 278 105 254 75 346
Net appreciation/(depreciation) -- 59,904 3,915,630 101,479 2,117,174
------------ ------------ ------------ ------------ ------------
Total investment income/(loss) 287,452 447,308 5,118,738 364,678 2,528,182
Contributions:
Participating employees 281,483 170,877 866,265 288,321 862,245
Participating employers 30,742 15,589 103,823 16,033 84,662
Rollover from qualified plans 1,594,159 655,065 1,538,207 521,781 2,003,376
Repayments on loans to Members 30,892 18,386 73,105 24,698 79,784
------------ ------------ ------------ ------------ ------------
TOTAL ADDITIONS 2,224,728 1,307,225 7,700,138 1,215,511 5,558,249
------------ ------------ ------------ ------------ ------------
DEDUCTIONS FROM NET ASSETS:
Member distributions (389,342) (617,733) (1,027,089) (74,252) (420,120)
Loans to Members (125,492) (55,586) (181,331) (32,175) (125,113)
Administrative expenses (19,765) (2,175) (7,585) (5,892) (2,114)
------------ ------------ ------------ ------------ ------------
TOTAL DEDUCTIONS (534,599) (675,494) (1,216,005) (112,319) (547,347)
------------ ------------ ------------ ------------ ------------
Interfund transfers 2,147,412 (561,332) (1,879,379) (122,151) 410,896
------------ ------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS 3,837,541 70,399 4,604,754 981,041 5,421,798
NET ASSETS AVAILABLE FOR BENEFITS AT THE
BEGINNING OF PERIOD 2,664,698 6,039,879 17,259,179 1,549,141 4,756,560
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS AT THE
END OF PERIOD $ 6,502,239 $ 6,110,278 $ 21,863,933 $ 2,530,182 $ 10,178,358
============ ============ ============ ============ ============
<CAPTION>
SPARTAN
SPONSOR U.S. EQUITY JANUS
FIDELITY STOCK INDEX WORLDWIDE
CONTRAFUND FUND (a) FUND FUND
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income:
Cash dividends 495,317 $ -- $ 79,189 $ 7,924
Interest on loans to Members 12,831 4,058 5,308 2,836
Interest 195 64 280 151
Net appreciation/(depreciation) 1,112,338 (3,471,288) 785,696 264,081
----------- ------------ ------------ ------------
Total investment income/(loss) 1,620,681 (3,467,166) 870,473 274,992
Contributions:
Participating employees 538,555 201,711 235,810 181,299
Participating employers 48,291 1,492,497 51,209 31,415
Rollover from qualified plans 1,148,612 373,755 1,591,935 970,833
Repayments on loans to Members 51,918 23,608 29,722 16,203
----------- ------------ ------------ ------------
TOTAL ADDITIONS 3,408,057 (1,375,595) 2,779,149 1,474,742
----------- ------------ ------------ ------------
DEDUCTIONS FROM NET ASSETS:
Member distributions (158,206) (441,848) (202,001) (104,775)
Loans to Members (111,497) (27,177) (21,989) (16,540)
Administrative expenses (461) (5,339) -- (913)
----------- ------------ ------------ ------------
TOTAL DEDUCTIONS (270,164) (474,364) (223,990) (122,228)
----------- ------------ ------------ ------------
Interfund transfers (703,200) (403,287) 603,860 507,180
----------- ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS 2,434,693 (2,253,246) 3,159,019 1,859,694
NET ASSETS AVAILABLE FOR BENEFITS AT THE
BEGINNING OF PERIOD 4,327,736 10,234,566 949,815 123,834
----------- ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS AT THE
END OF PERIOD 6,762,429 $ 7,981,320 $ 4,108,834 $ 1,983,528
=========== ============ ============ ============
<CAPTION>
LOANS TO
MEMBERS TOTAL
------------ ------------
<S> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income:
Cash dividends $ -- $ 3,079,782
Interest on loans to Members -- 78,794
Interest -- 1,748
Net appreciation/(depreciation) -- 4,885,014
------------ ------------
Total investment income/(loss) -- 8,045,338
Contributions:
Participating employees -- 3,626,566
Participating employers -- 1,874,261
Rollover from qualified plans 344,990 10,742,713
Repayments on loans to Members (348,316) --
------------ ------------
TOTAL ADDITIONS (3,326) 24,288,878
------------ ------------
DEDUCTIONS FROM NET ASSETS:
Member distributions (89,228) (3,524,594)
Loans to Members 696,900 --
Administrative expenses -- (44,245)
------------ ------------
TOTAL DEDUCTIONS 607,672 (3,568,839)
------------ ------------
Interfund transfers -- --
------------ ------------
INCREASE (DECREASE) IN NET ASSETS 604,346 20,720,039
NET ASSETS AVAILABLE FOR BENEFITS AT THE
BEGINNING OF PERIOD 598,787 48,504,195
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS AT THE
END OF PERIOD $ 1,203,133 $ 69,224,234
============ ============
</TABLE>
(a) 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") and other changes.
The Plan was amended and restated effective January 1, 1998.
Effective January 1, 1998, the Plan changed its fiscal year end from a
twelve month period ending September 30 to a twelve month period ending December
31.
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,
Oilfield Fabricating and Machine, Inc., Bettis Corporation, Bettis Electric
Actuator Corporation and Shafer Valve Company (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.
Effective January 1, 1998, the Bettis Corporation Retirement Savings
Plan and the Shafer Valve Company 401(k) Plan were merged into the Plan. Assets
of $7,536,763 and $2,827,193 respectively were transferred into the Plan.
Contributions
The Plan provides for Discretionary Contributions and Supplemental
Contributions in such amount, if any, that shall be determined by the Employers.
The Employers did not make a Discretionary Contribution or a Supplemental
Contribution for the 1998 Plan Year.
7
<PAGE> 8
Further, an eligible Employee may choose 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 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 ($10,000 for the 1998 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. In addition, each
Employer is required to make a matching contribution (a "Matching Contribution")
for each Member employed by such Employer. Effective January 1, 1998, the Plan
was amended so that each Employer is required to make a Matching Contribution
for each Member employed by such Employer in an amount equal to 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. Prior to that date, each Employer was required to make an
Employer Matching Contribution 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 After-Tax Contributions to the Trust.
Salary Deferral Contributions, Matching Contributions, Discretionary
Contributions and Supplemental Contributions made on behalf of each Member are
credited to such Member's Salary Deferral Contribution Account, Matching
Contribution Account, Discretionary Contribution Account, and Supplemental
Contribution Account, respectively. Each of such Accounts reflects the
contributions, forfeitures and Investment Gain or Loss allocated to such
Account. A Member's Discretionary Contribution Account, Salary Deferral
Contribution Account, Matching Contribution Account, Supplemental Contribution
Account, Rollover Contribution Account and After-Tax Contribution Account are
referred to collectively as a Member's Accounts.
A summary of Members' Salary Deferral Contributions and a summary of
Matching Contributions for the Plan Year ended December 31, 1998, are as
follows:
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<TABLE>
<CAPTION>
Members' Salary Deferral
Contributions for Plan Year Ended
Employer December 31, 1998
- ------------------------------------ ---------------------------------
<S> <C>
Daniel Industries, Inc. $ 211,068
Daniel Measurement and Control, Inc. 1,770,886
Oilfield Fabricating & Machine, Inc. 90,881
Daniel Valve Company 626,564
Bettis Corporation 564,279
Bettis Electric Company 28,819
Shafer Valve Company 334,069
----------
$3,626,566
==========
</TABLE>
<TABLE>
<CAPTION>
Matching Contributions
for Plan Year Ended
Employer December 31, 1998
- ------------------------------------ ---------------------------------
<S> <C>
Daniel Industries, Inc. $ 122,808
Daniel Measurement and Control, Inc. 926,051
Oilfield Fabricating & Machine, Inc. 47,080
Daniel Valve Company 312,624
Bettis Corporation 274,369
Bettis Electric Company 12,857
Shafer Valve Company 178,472
----------
$1,874,261
==========
</TABLE>
Investments
Effective January 1, 1998, the Plan was amended so that assets held by
the Plan as a result of Matching Contributions could be invested, according to
each Member's direction, in such categories of assets as may be determined by
the Committee. Prior to that date, the Plan provided that such assets be
invested in the Sponsor Stock fund. Until January 1, 1999, 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 remain invested
in the Sponsor Stock fund. The Plan further provides that assets held by the
Plan as a result of Salary Deferral Contributions, Discretionary Contributions
(except as specified above), Supplemental Contributions and Rollover
Contributions shall be invested in such categories of assets as may be
determined by the Committee. Such categories of assets include nine investment
alternatives. Except for the Janus Worldwide Fund managed by Janus Capital, and
the Sponsor Stock fund, all of the
9
<PAGE> 10
investment alternatives are mutual funds which are 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.
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.
Fidelity Spartan U.S. Equity Index Fund - invests primarily in equity securities
of the companies that comprise the S&P 500 Index. This investment option became
effective October 1, 1997.
Janus Worldwide Fund - invests mainly in the common stocks of foreign and
domestic companies. This investment option became effective October 1, 1997.
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, Discretionary
Contributions, Supplemental 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.
10
<PAGE> 11
Vesting
Effective January 1, 1998, a Member is always 100% vested in all of his
Accounts. Prior to that date, the balance in each Member's Discretionary
Employer Contribution Account vested with such Member in 20% annual increments
beginning with such Member's third employment anniversary date. Accordingly,
Members were fully vested at the end of seven years. A Member's interest in the
Discretionary Employer Contribution Account also became fully vested upon
Retirement or upon death or Separation on account of Total and Permanent
Disability. Non-vested amounts were forfeited upon termination of employment and
were used to restore any accounts required to be restored. Any excess forfeited
balances at the end of the Plan Year were allocated to remaining Members on the
same basis used to allocate Discretionary Employer Contributions of the
Employers.
Distributions and Withdrawals
Upon a Member's Separation from Service, such Member or his validly
designated Beneficiary is entitled to a distribution of the Member's Accounts
net of any outstanding loans.
Each Member who has completed five Years of Service and who has given
written notice to the Committee may withdraw a specified amount of his
Discretionary Contribution Account, but not in excess of 25% of his 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 Service and one subsequent to his
completion of ten Years of Service.
A Member who is suffering a qualifying financial hardship may file a
written request with the Committee to withdraw from his Salary Deferral
Contribution Account, Matching Contribution Account, Supplemental 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 Matching Contributions or earnings credited to the Member's
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 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 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
11
<PAGE> 12
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 life expectancy of the Member or the
joint and last survivor life expectancy of the Member and his Beneficiary.
Loans
A Member may borrow up to 50% of his 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 December 31,
1998, the Plan had outstanding loans to Members in the amount of $1,203,133
earning interest at rates ranging from 7.90% to 10.0%.
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.
With the exception of the Sponsor Stock fund, Fidelity Management
Research Company and Janus Capital, the Plan's investment managers, make
investment decisions regarding all of the Plan's investments. The investment
managers are appointed by the Plan's Administrative Committee, which reviews
their 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.
12
<PAGE> 13
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.
Net Appreciation and Depreciation of Investments
The Plan presents in the statement of changes in net assets available
for benefits the net appreciation or (depreciation) in the fair value of its
investments, which consists of the realized gains or losses and the unrealized
appreciation or (depreciation) on those 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. For purposes of the Annual Report on Form 11-K, the
components are not segregated.
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
13
<PAGE> 14
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 record keeping 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 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 - Subsequent Events
On June 24, 1999, the Company was acquired by Emerson Electric Co. As a
result of this acquisition, all shares of Common Stock of the Company will be
converted into cash.
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 DECEMBER 31, 1998
<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 $ 6,065,136 $ 7,845,785
* Fidelity Contrafund Mutual Fund 5,442,988 6,708,857
* Fidelity Blue Chip Growth Fund Mutual Fund 7,577,892 10,093,663
* Fidelity Growth & Income
Portfolio Mutual Fund 14,161,350 21,775,517
* Fidelity Puritan Fund Mutual Fund 1,305,880 2,504,502
* Fidelity Intermediate Bond Fund Mutual Fund 6,060,967 6,092,704
* Fidelity Retirement Government
Money Market Portfolio Mutual Fund 6,472,568 6,472,568
* Fidelity Spartan U.S.
Equity Index Fund Mutual Fund 3,370,576 4,081,566
Janus Worldwide Fund Mutual Fund 1,702,183 1,960,424
* Participant Loans Loans with interest ranging
from 7.90% TO 10.0% -- 1,203,133
----------- -----------
Plan assets held for investment purposes $52,159,540 $68,738.719
=========== ===========
</TABLE>
* Represents an investment associated with a party in interest.
15
<PAGE> 16
Schedule 2
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
(h)
Current
(a) value of
Identity of (b) (c) (d) (g) asset on (i)
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 $ 5,216,806 $ 4,086,144 $ 3,338,418 $ 4,086,144 $ 747,726
Investments Stock Fund
Fidelity Growth & 6,614,581 5,970,349 4,596,349 5,970,349 1,374,000
Investments Income Fund
Fidelity Intermediate 1,800,428 1,799,550 1,796,681 1,799,550 2,869
Investments Bond Fund
Fidelity Retirement 10,510,197 6,691,568 6,691,568 6,691,568 --
Investments Government
Money Market
Fund
Fidelity Blue Chip 5,681,011 2,416,322 2,072,266 2,416,322 344,056
Investments Growth Fund
Fidelity Contrafund 3,923,703 2,626,134 2,329,783 2,626,134 296,351
Investments
Fidelity Puritan Fund 1,521,839 652,471 623,917 652,471 28,554
Investments
Fidelity Spartan U.S. 3,879,284 1,530,389 1,445,974 1,530,389 84,415
Investments Equity Index
Janus Funds Worldwide 2,967,003 1,393,502 1,398,112 1,393,502 (4,610)
Funds
</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.
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<PAGE> 17
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
23 Consent of Independent Accountants
<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 June 28, 1999, appearing on Page 3 of this Annual Report on Form 11-K.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
June 28, 1999
