<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 11-K
-----------
(Mark One)
[ ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from October 1, 1997 to December 31, 1997
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 Administrative
Committee
Date June 28, 1999 By /s/ Wilfred Krenek
-------------------- --------------------------------------
Wilfred Krenek
Member of the Administrative
Committee
Date June 28, 1999 By /s/ Bela Vaczi
-------------------- --------------------------------------
Bela Vaczi
Member of the Administrative
Committee
Date June 28, 1999 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 ("the
Plan") at December 31, 1997 and September 30, 1997, and the changes in net
assets available for benefits for the three month period ended December 31,
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 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
asets 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. The 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, 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 Unallocated
Fund * Fund Fund Members Amounts Total
----------- ---------- ----------- ---------- ---------- -----------
<S> <C> <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 -- 0 163,394
Employer contributions receivable 39,346 131 90 -- 0 39,864
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for benefits $10,234,566 $ 949,815 $ 123,834 $ 598,787 $ 0 $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.
4
<PAGE> 5
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
-------------------------------------------------------------------
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>
Investments at fair market value:
Mutual funds $ 2,657,973 $ 5,965,626 $ 16,880,329 $ 1,564,464 $ 4,744,947
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
Employee contributions receivable 8,159 6,424 33,723 12,650 35,536
Employer contributions receivable - - - - -
----------- ------------ ------------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 2,666,132 $ 5,972,050 $ 16,914,052 $ 1,577,114 $ 4,780,483
=========== ============ ============= =========== ============
<CAPTION>
SEPTEMBER 30, 1997
------------------------------------------------------------------------
SPONSOR
FIDELITY STOCK LOANS TO UNALLOCATED
CONTRAFUND* FUND* MEMBERS AMOUNTS TOTAL
------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investments at fair market value:
Mutual funds $ 4,648,055 $ - $ - $ - $ 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 4,648,055 10,125,759 587,816 - 47,174,969
Employee contributions receivable 24,869 7,506 - - 128,867
Employer contributions receivable - 31,765 - 800,000 831,765
============= ============ =========== ============ ============
NET ASSETS AVAILABLE FOR BENEFITS $ 4,672,924 $ 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.
5
<PAGE> 6
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED 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>
ADDITIONS TO NET ASSETS:
Investment income:
Cash dividends $ 35,375 $ 95,485 $ 171,746 $ 44,909 $ 80,066 $ 353,732
Interest on loans to Members 595 767 3,332 1,013 2,809 1,799
Interest 1,407 3,894 9,963 792 2,463 2,460
Net appreciation/(depreciation) - 28,838 433,991 (6,572) (19,923) (401,928)
---------- ----------- ------------ ----------- ----------- ------------
Total investment income/(loss) 37,377 128,984 619,032 40,142 65,415 (43,937)
Contributions:
Participating employees 29,583 21,983 125,259 44,134 130,713 84,649
Participating employers - 13 155 10 37 82
Rollover from qualified plans - - 5,001 5,169 9,665 505
Repayments on loans to Members 1,944 3,414 12,509 4,654 11,505 7,036
---------- ----------- ------------ ----------- ----------- ------------
TOTAL ADDITIONS 68,904 154,394 761,956 94,109 217,335 48,335
---------- ----------- ------------ ----------- ----------- ------------
DEDUCTIONS FROM NET ASSETS:
Member distributions (19,606) (20,928) (115,939) (75,953) (236,996) (312,264)
Loans to Members (4,689) (6,079) (21,241) (7,837) (19,855) (11,220)
Administrative expenses (4,136) (400) (1,066) (961) (114) (24)
---------- ----------- ------------ ----------- ----------- ------------
TOTAL DEDUCTIONS (28,431) (27,407) (138,246) (84,751) (256,965) (323,508)
---------- ----------- ------------ ----------- ----------- ------------
Interfund transfers (210,461) (99,901) (461,963) (97,161) (153,727) (188,579)
---------- ----------- ------------ ----------- ----------- ------------
Allocation of prior year
employer contribution 168,554 40,743 183,380 59,830 169,434 118,564
----------- ----------- ------------ ----------- ----------- ------------
INCREASE (DECREASE) IN NET ASSETS (1,434) 67,829 345,127 (27,973) (23,923) (345,188)
NET ASSETS AVAILABLE FOR BENEFITS
AT THE BEGINNING OF YEAR 2,666,132 5,972,050 16,914,052 1,577,114 4,780,483 4,672,924
----------- ----------- ------------ ----------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS
AT THE END OF YEAR $ 2,664,698 $ 6,039,879 $ 17,259,179 $ 1,549,141 $ 4,756,560 $ 4,327,736
=========== =========== ============ =========== =========== ============
<CAPTION>
THREE MONTH PERIOD ENDED DECEMBER 31, 1997
---------------------------------------------------------------------------
SPARTAN
SPONSOR U.S. EQUITY JANUS
STOCK INDEX WORLDWIDE LOANS TO UNALLOCATED
FUND(a) FUND FUND MEMBERS AMOUNTS TOTAL
----------- ---------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income:
Cash dividends $ - $ 6,053 $ 6,600 $ - $ - $ 793,966
Interest on loans to Members 642 6 0 - - 10,963
Interest 1,243 390 41 - - 22,653
Net appreciation/(depreciation) (110,367) 10,031 (10,450) - - (76,380)
------------ ----------- ---------- ---------- ----------- -----------
Total investment income/(loss) (108,482) 16,480 (3,809) - - 751,202
Contributions:
Participating employees 28,036 7,125 2,295 - - 473,777
Participating employers 115,758 131 90 - - 116,276
Rollover from qualified plans - - - - - 20,340
Repayments on loans to Members 2,964 19 - (44,045) - -
------------ ----------- ---------- ---------- ----------- -----------
TOTAL ADDITIONS 38,276 23,755 (1,424) (44,045) - 1,361,595
------------ ----------- ---------- ---------- ----------- -----------
DEDUCTIONS FROM NET ASSETS:
Member distributions (183,326) - - (20,284) - (985,296)
Loans to Members (4,379) - - 75,300 - -
Administrative expenses (1,004) - - - - (7,705)
------------ ----------- ---------- ---------- ----------- -----------
TOTAL DEDUCTIONS (188,709) - - 55,016 - (993,001)
------------ ----------- ---------- ---------- ----------- -----------
Interfund transfers 178,230 912,000 121,562 - - -
------------ ----------- ---------- ---------- ----------- -----------
Allocation of prior year
employer contribution 41,739 14,060 3,696 - (800,000) -
------------ ----------- ---------- ---------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS 69,536 949,815 123,834 10,971 (800,000) 368,594
NET ASSETS AVAILABLE FOR BENEFITS
AT THE BEGINNING OF YEAR 10,165,030 - - 587,816 800,000 48,135,601
------------ ----------- ---------- ---------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS
AT THE END OF YEAR $ 10,234,566 $ 949,815 $ 123,834 $ 598,787 $ 0 $ 48,504,195
============ =========== ========== ========== =========== ============
</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") and other changes.
The Plan has been amended and restated effective January 1,
1998. See Note 5.
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. The statement of changes in net assets is presented for the three months
ended December 31, 1997.
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.
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
7
<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. The Employers did not make a Discretionary
Employer contribution for the three month period ended December 31, 1997.
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 three month period ended December 31,
1997, are as follows:
<TABLE>
<CAPTION>
Members' Salary Deferral
Contributions for Three Month Period
Ended December 31, 1997
-------------------------------------
<S> <C>
Employer
- -----------------------------
Daniel Industries, Inc. $ 44,059
Daniel Measurement and Control, Inc. 308,793
Oilfield Fabricating & Machine, Inc. 14,505
Daniel Valve Company 106,420
------------
$ 473,777
============
</TABLE>
<TABLE>
<CAPTION>
Employer Matching
Contributions for Three Month Period
Ended December 31, 1997
-------------------------------------
<S> <C>
Employer
- -----------------------------
Daniel Industries, Inc. $ 10,621
Daniel Measurement and Control, Inc. 76,715
Oilfield Fabricating & Machine, Inc. 3,134
Daniel Valve Company 25,806
------------
$ 116,276
============
</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 nine investment alternatives.
Except for the Janus Worldwide Fund, which is managed by Janus Capital and 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:
9
<PAGE> 10
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 make up 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 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
10
<PAGE> 11
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. 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.
Effective January 1, 1998, all Members will become fully vested in
their Discretionary Employer Contribution Account.
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 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 Vesting 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 Vesting 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.
11
<PAGE> 12
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.
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,
1997, the Plan had outstanding loans to Members in the amount of $598,797,
earning interest at rates ranging from 7.90% to 9.82%.
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 could differ
from those estimates. Management believes that any estimates made in connection
with these financial statements are reasonable.
13
<PAGE> 14
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 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
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. Assets
totaling $7,536,763 and $2,827,193 respectively were
transferred into the Plan at the time of the merger.
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
14
<PAGE> 15
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.
8) 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.
15
<PAGE> 16
Schedule 1
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 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 $ 4,186,748 $10,186,412
* Fidelity Contrafund Mutual Fund 3,849,068 4,298,950
* Fidelity Blue Chip Growth Fund Mutual Fund 3,969,147 4,711,801
* Fidelity Growth & Income
Portfolio Mutual Fund 12,143,176 17,215,655
* Fidelity Puritan Fund Mutual Fund 1,407,957 1,533,655
* Fidelity Intermediate Bond Fund Mutual Fund 6,057,221 6,031,922
* Fidelity Retirement Government
Money Market Portfolio Mutual Fund 2,653,939 2,653,939
* Fidelity Spartan U.S.
Equity Index Fund Mutual Fund 937,265 946,975
Janus Worldwide Fund Mutual Fund 133,293 122,842
* Participant Loans Loans, with interest ranging
from 7.90% to 9.38% - 598,787
----------- -----------
Plan assets held for investment purposes $35,337,814 $48,300,938
=========== ===========
</TABLE>
* Represents an investment associated with a party in interest.
<PAGE> 17
SCHEDULE 2
DANIEL INDUSTRIES, INC.
EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN
ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
THREE MONTH PERIOD ENDED DECEMBER 31, 1997
<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 $ 761,682 $ 590,663 $ 408,509 $ 590,663 $ 182,154
Investments Stock Fund
Fidelity Growth & 886,204 984,869 751,839 984,869 233,030
Investments Income Fund
Fidelity Intermediate 285,179 247,720 249,665 247,720 (1,945)
Investments Bond Fund
Fidelity Retirement 621,278 625,312 625,312 625,312 -
Investments Government
Money Market
Fund
Fidelity Blue Chip 455,904 469,127 364,061 469,127 105,066
Investments Growth Fund
Fidelity Contrafund 687,675 634,852 511,616 634,852 123,236
Investments
Fidelity Puritan Fund 251,684 275,922 252,240 275,922 23,682
Investments
Fidelity Spartan U.S. 972,839 35,895 35,574 35,895 321
Investments Equity Index
Janus Funds Worldwide 133,293 0 133,293 0 0
Fund
</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.
17
<PAGE> 18
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
