<PAGE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10 - Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-7951
WICOR, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1346701
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
626 East Wisconsin Avenue
Post Office Box 334
Milwaukee, Wisconsin 53201
-------------------------------------- ----------
(Address of principal executive office) (Zip Code)
(414)-291-7026
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding at October 18, 1996
-------------------------- -------------------------------
Common Stock, $1 Par Value 18,406,196<PAGE>
<PAGE> 2
INTRODUCTION
------------
WICOR, Inc. ("WICOR" or the "Company"), is a diversified holding
company with two principal business groups: an energy group
responsible for natural gas distribution and related services,
and a manufacturing group responsible for the manufacture of
pumps and processing equipment used to pump, control, transfer,
hold and filter water and other fluids. The Company engages in
natural gas distribution through Wisconsin Gas Company
("Wisconsin Gas"), the oldest and largest natural gas
distribution utility in Wisconsin. Through several nonutility
subsidiaries, the Company also engages in the manufacture and
sale of pumps and processing equipment. The Company's
manufactured products primarily have water system, pool and spa,
agricultural, RV/marine and beverage/food service applications.
The Company markets its manufactured products in 100 countries.
The Company is incorporated under the laws of the State of
Wisconsin and is exempt from registration as a holding company
under the Public Utility Holding Company Act of 1935, as
amended.
CONTENTS
--------
PAGE
------
PART I.
Financial Information................................. 1
Management's Discussion and Analysis of
Interim Financial Statements........................ 2-5
Consolidated Financial Statements of WICOR, Inc. (Unaudited):
-------------------------------------------------------------
Consolidated Statements of Operation for the Three and Nine
Months Ended September 30, 1996 and 1995............ 6
Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995............ 7-8
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1996 and 1995............ 9
Notes to Consolidated Financial Statements............ 10
PART II.
Other Information..................................... 11
Signatures............................................ 12<PAGE>
<PAGE> 3
Part I - Financial Information
Financial Statements
--------------------
The consolidated statements included herein have been prepared
without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although management believes that the
disclosures are adequate to make the information presented not
misleading. These condensed financial statements should be read
in conjunction with the audited financial statements and the
notes thereto included in the WICOR, Inc. Annual Report on Form
10-K for the year ended December 31, 1995.
In the opinion of management, the information furnished reflects
all adjustments, which in all circumstances were normal and
recurring, necessary for a fair presentation of the results of
operations for the interim periods.
Because of seasonal factors, the results of operations for the
interim periods presented are not necessarily indicative of the
results to be expected for the full calendar year.<PAGE>
<PAGE> 4
Management's Discussion and Analysis
of Interim Financial Statements of
WICOR, Inc.
Results of Operations
---------------------
The consolidated net loss for the third quarter of 1996 was $4.5
million or $0.4 million lower than in the comparable period of
the prior year. Net income increased by $9.6 million, or 43%,
for the nine months ended September 30, 1996 compared to the
same period of last year.
The following factors had a significant effect on the results of
operations during the three- and nine-month periods ended
September 30, 1996.
Energy
------
The Company's energy business typically incurs a loss in the
third quarter due to the seasonal nature of the gas distribution
utility business. The net loss for the third quarter of 1996
was $7.0 million, or 8% less than the net loss for the 1995
third quarter. Net income for the nine months ended September
30, 1996 increased by $6.3 million, or 47%, compared to the same
period of last year.
The decline in the net loss for the third quarter resulted
primarily from decreased operating and maintenance expenses and
lower interest expense, which were partially offset by increased
depreciation expense and lower gas margins. The lower gas
margins resulted from slightly lower firm sales volumes and a $3
million annual rate reduction effective November 1, 1995. The
increase in 1996 year-to-date net income, due primarily to
decreased operating and maintenance expenses, lower interest
expense and colder than normal weather, was partially offset by
increased depreciation expense and rate reductions.
Revenues, margins and volumes are summarized below. Margin,
defined as revenues less cost of gas sold, is a better
comparative performance indicator than revenues because the mix
of volumes between sales and transportation service affects
revenues but not margin. In addition, changes in the cost of
gas sold are flowed through to revenue under a gas adjustment
clause with no resulting effect on margin.<PAGE>
<PAGE> 5
<TABLE>
<CAPTION>
Three Nine
Months Ended Months Ended
September 30, September 30,
-------------- % -------------- %
(Millions of Dollars) 1996 1995 Change 1996 1995 Change
--------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Gas Sales Revenues $ 74.9 $ 69.6 8 $403.7 $352.5 15
Cost of Gas Sold 54.8 47.5 15 266.6 220.8 21
------ ------ ------ ------
Gas Sales Margin 20.1 22.1 (9) 137.1 131.7 4
Gas Transport Margin 2.8 1.3 115 9.3 4.9 90
------ ------ ------ ------
Total Margin $ 22.9 $ 23.4 (2) $146.4 $136.6 7
====== ====== ====== ======
(Millions of Therms)
--------------------
Sales Volumes
Firm 56.9 60.4 (6) 605.2 546.3 11
Interruptible 31.8 69.5 (54) 152.8 242.5 (37)
Transportation Volume 60.4 24.2 145 183.1 88.2 108
------ ------ ------ ------
Total Throughput 149.1 154.1 (3) 941.1 877.0 7
====== ====== ====== ======
Degree Days (Normal:
3rd Qtr. = 156
Nine Months = 4,519) 123 165 (25) 5,011 4,251 18
====== ====== ====== ======
</TABLE>
The decrease in firm sales volumes for the third quarter of
1996 as compared with the 1995 third quarter was caused
principally by warmer weather. The increase in
transportation volumes was due mainly to more customers
purchasing gas from sources other than Wisconsin Gas and
transporting the volumes over the Wisconsin Gas distribution
system. The movement to transportation from gas sales had no
impact on margin. For the nine months ended September 30,
1996, the total margin increase was largely the result of an
11% increase in firm sales volumes. The weather was 11%
colder than normal during the first nine months of 1996 and
18% colder than the same period in 1995.<PAGE>
<PAGE> 6
Operating and maintenance expenses decreased by $1.3 million,
or 5%, and $2.6 million, or 3%, for the respective three- and
nine-month periods ended September 30, 1996, compared with
the same periods of 1995. The decrease for the quarter and
year-to-date periods was due mainly to lower labor and
benefit expenses.
Depreciation expense for the three and nine months ended
September 30, 1996 increased by $0.6 million, or 9%, and $3.2
million, or 15%, respectively, compared with the same periods
of last year. The increase is due to additions to plant and
increased depreciation rates permitted by the Public Service
Commission of Wisconsin (PSCW).
Manufacturing
-------------
Manufacturing net income for the three and nine months ended
September 30, 1996 was $2.5 million and $12.4 million,
respectively, as compared with $2.6 million and $9.1 million
for the same periods in 1995, respectively.
[CAPTION]
<TABLE>
Three Nine
Months Ended Months Ended
September 30, September 30,
---------------- -----------------
1996 1995 1996 1995
-------- ------- -------- --------
<S> <C> <C> <C> <C>
(Millions of Dollars)
---------------------
Revenues $ 97.4 $ 91.7 $ 318.5 $ 253.7
Cost of goods sold 71.2 66.6 229.8 184.8
-------- ------- -------- --------
Gross profit 26.2 25.1 88.7 68.9
Operating expenses 20.9 19.2 64.8 52.5
-------- ------- -------- --------
Operating income 5.3 5.9 23.9 16.4
Interest expense and other 1.3 1.5 4.1 1.3
-------- ------- -------- --------
Net income before income taxes 4.0 4.4 19.8 15.1
Income taxes 1.5 1.8 7.4 6.0
-------- ------- -------- --------
Net income $ 2.5 $ 2.6 $ 12.4 $ 9.1
======== ======= ======== ========
/TABLE
<PAGE>
<PAGE> 7
Net sales for the third quarter of 1996 increased $5.7
million, or 6%, to $97.4 million compared to the same period
in 1995. For the first nine months of 1996, net sales
increased $64.8 million, or 26%, to $318.5 million compared
with the same period in 1995. Hypro Corporation (Hypro),
which was acquired by the Company in July 1995, contributed
$33.3 million and $10.0 million to the manufacturing group's
net sales for the nine months ended September 30, 1996 and
1995, respectively.
Domestic sales for the 1996 third quarter increased by 13% to
$63.8 million over the comparable period of 1995. Overall
shipments for water systems, pool and spa, food service,
industrial and RV/marine continued their upward trend from
last year's comparable period. Domestic sales for the nine
months ended September 30, 1996 increased $55.1 million, or
36%, to $208.1 million. Hypro sales for the nine months
ended September 30, 1996 and 1995 amounted to $30.4 million
and $8.8 million, respectively.
Overall, third quarter international sales were flat compared
with the same period of last year as weather and a sluggish
economy in Europe adversely affected sales in that region.
Strength in the Italian Lira put further pressure on
earnings. On a year to date basis, international sales
increased by 10%. For the nine-months ended September 30,
1996 and 1995, international sales accounted for 35% and 40%,
respectively, of total net sales.
Gross profit margins remained unchanged at 27% for the 1996
third quarter as compared to the third quarter of 1995.
Quarterly operating results were curbed by several factors,
including somewhat lower margins related to product mix,
slightly higher operating expenses, a sluggish European
economy that dampened international sales and unfavorable
growing conditions in many parts of the United States that
hurt markets for WICOR's agricultural spraying pumps. For
the nine months ended September 30, 1996 and 1995, the gross
profit margin was 28% and 27%, respectively.
Consolidated Non-Operating Income and Income Taxes
--------------------------------------------------
Interest expense decreased slightly for the three- and nine-
months ended September 30, 1996, compared to the similar
periods of 1995, due primarily to slightly lower interest
rates. The decline in interest rates was partially offset by
higher debt levels incurred to finance the Hypro acquisition.<PAGE>
<PAGE> 8
Other income for the nine months ended September 30, 1996
decreased by $1.3 million over the same period of last year.
Other income in 1995 was positively impacted by the first
quarter sale of the Company's investment in Filtron
Technologies Corporation, for an after-tax gain of $0.8
million ($0.05 per share).
Income tax expense was $5.8 million higher for the first nine
months of 1996, compared to the same period last year,
reflecting increased pre-tax income.
Liquidity and Capital Resources
-------------------------------
Cash flow from operations for the nine months ended September
30, 1996, decreased by $13.7 million, or 13%, from the
comparable period in 1995. Due to the seasonal nature of the
energy business, accrued revenues, accounts receivable and
accounts payable levels are higher in the heating season as
compared with the summer months. The Company stores gas
during the non-heating months and withdraws the gas during
the heating months. Cash used to purchase gas injected into
storage increased by $31.1 million due to timing of
withdrawals and a higher 1996 weighted average cost of gas
relative to 1995. Withdrawals from storage during the first
nine months of 1996 were 31% lower than in the same period in
1995. Increases in net income of $9.6 million and increased
collections of accounts receivable of $17.8 million partially
offset the increase in cash used for gas injections into
storage.
Capital expenditures for the nine months ended September 30,
1996 decreased by 12% to $35.7 million.
Acquisition of Hypro Corporation
--------------------------------
On July 19, 1995, the Company acquired all of the outstanding
common stock of Hypro for $58 million in cash and the
assumption of operating liabilities totaling $13.3 million.
Hypro designs, manufactures and markets pumps and water
processing equipment for the agricultural, high-pressure
cleaning, marine, industrial and fire protection markets.
The borrowing associated with the acquisition is classified
as short-term debt in the Company's financial statements at
September 30, 1996. The Company issued common stock in the
fourth quarter of 1995 to repay a portion of the original
financing.<PAGE>
<PAGE> 9
Short-term Borrowings and Dividends
-----------------------------------
The Company anticipates additional short-term borrowing
during the fourth quarter of 1996 to finance working capital
needs primarily related to gas storage and the financing of
accounts receivable during the heating season.
On July 23, 1996, the directors of the Company authorized an
increase in the Company's common stock dividend to $0.42 per
quarter ($1.68 per share on an annual basis). The first
quarterly payment at the new rate was made August 30, 1996 to
shareholders of record on August 9, 1996.
State Regulatory Matters
------------------------
On October 10, 1996, the PSCW approved a one year extension,
to November 1, 1998, of the Productivity-based Alternative
Ratemaking Mechanism (PARM), an incentive-based ratemaking
mechanism. Within the PARM pilot program, Wisconsin Gas
voluntarily reduced its base rates by $1.5 million and $3.0
million on an annualized basis effective August 1, 1995, and
November 1, 1995, respectively. With these reductions,
Wisconsin Gas' rates recover $4.5 million per year less than
the maximum margin allowed by the PSCW's November 1994 rate
order. The Company announced a further $3 million rate
reduction on an annualized basis effective November 1, 1996.
Wisconsin Gas has the ability to raise or lower margin rates
within a specified range on a quarterly basis.<PAGE>
<PAGE> 10
WICOR, INC.
Consolidated Statements of Operation (Unaudited)
(Thousands of dollars, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating Revenues:
Energy $ 77,697 $ 71,084 $ 412,968 $ 357,553
Manufacturing 97,442 91,654 318,518 253,688
---------- ---------- ---------- ----------
175,139 162,738 731,486 611,241
---------- ---------- ---------- ----------
Operating Costs and Expenses:
Cost of gas sold 54,860 47,668 266,628 220,941
Manufacturing cost of sales 71,160 66,561 229,759 184,798
Operations and maintenance 42,117 41,665 137,544 128,344
Depreciation and amort. 8,242 7,581 25,680 21,843
Taxes, other than
income taxes 2,176 2,296 7,048 7,044
---------- ---------- ---------- ----------
178,555 165,771 666,659 562,970
---------- ---------- ---------- ----------
Operating Income (3,416) (3,033) 64,827 48,271
---------- ---------- ---------- ----------
Interest Expense (4,522) (4,905) (13,594) (13,774)
Other Income and (Expenses) 642 309 1,069 2,385
---------- ---------- ---------- ----------
Income Before Income Taxes (7,296) (7,629) 52,302 36,882
Income Taxes (2,818) (2,685) 20,179 14,359
---------- ---------- ---------- ----------
Net Income $ (4,478) $ (4,944) $ 32,123 $ 22,523
========== ========== ========== ==========
Per Share of Common Stock:
Net Income $ (0.24) $ (0.29) $ 1.75 $ 1.33
Cash Dividends $ 0.42 $ 0.41 $ 1.24 $ 1.21
Average Common Shares
Outstanding (Thousands) 18,391 16,950 18,352 16,941
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<PAGE> 11
WICOR, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
Assets ------------ ------------
------ (Thousands of Dollars)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 17,334 $ 20,380
Accounts receivable, less allowance
for doubtful accounts of $13,874
and $10,343, respectively 102,991 132,203
Accrued utility revenues 8,749 48,847
Manufacturing inventories 70,551 68,236
Gas in storage, at weighted average cost 48,152 24,117
Deferred income taxes 19,976 20,256
Prepayments and other 16,343 14,990
------------ ------------
284,096 329,029
Property, Plant and Equipment (less accum- ------------ ------------
ulated depreciation of $461,380
and $440,942, respectively) 437,598 436,040
------------ ------------
Deferred Charges and Other:
Regulatory assets 103,403 104,145
Goodwill 61,806 61,096
Prepaid pension costs 36,177 33,073
Systems development costs 24,459 28,868
Other 16,592 16,263
------------ ------------
242,437 243,445
------------ ------------
$ 964,131 $ 1,008,514
============ ============
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<PAGE> 12
WICOR, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
Liabilities and Capitalization ------------ ------------
------------------------------ (Thousands of Dollars)
<S> <C> <C>
Current Liabilities:
Accounts payable $ 51,417 $ 63,920
Refundable gas costs 27,792 34,347
Short-term borrowings 70,984 106,377
Current portion of long-term debt 4,909 6,836
Accrued taxes 1,957 6,940
Accrued payroll and benefits 21,694 16,340
Other 20,796 19,638
------------ ------------
199,549 254,398
------------ ------------
Deferred Credits and Other:
Postretirement benefit obligation 66,716 67,306
Regulatory liabilities 63,315 64,896
Deferred income taxes 38,986 39,282
Accrued environmental remediation costs 36,242 36,381
Unamortized investment tax credit 7,510 7,724
Other 20,967 18,548
------------ ------------
233,736 234,137
------------ ------------
Capitalization:
Long-term debt 171,272 174,713
Common stock 18,400 18,237
Other paid-in capital 223,771 219,133
Retained earnings 122,858 113,491
Unearned compensation - ESOP
and restricted stock (5,455) (5,595)
------------ ------------
530,846 519,979
------------ ------------
$ 964,131 $ 1,008,514
============ ============
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<PAGE> 13
WICOR, INC.
Consolidated Statement of Cash Flows (Unaudited)
(Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1996 1995
Operations ----------- -----------
<S> <C> <C>
Net income $ 32,123 $ 22,523
Adjustments to reconcile net income to
net cash flows:
Depreciation and amortization 41,341 36,033
Deferred income taxes (63) 5,191
Change in:
Receivables 69,489 51,671
Manufacturing inventories (1,992) 3,225
Gas in storage (24,034) 7,069
Other current assets (3,117) 2,152
Accounts payable (12,673) (13,337
Refundable gas costs (6,555) (2,855
Accrued taxes (3,129) (11,325
Accrued payroll and benefits 4,574 5,088
Other current liabilities 1,158 1,318
Other non-current assets
and liabilities, net (4,616) (563
----------- -----------
92,506 106,190
Investment Activities: ----------- -----------
Capital expenditures (35,679) (40,692
Acquisition, net of cash acquired - (58,256
Proceeds from sale of investment 318 5,099
Other 159 244
----------- -----------
(35,202) (93,605
Financing Activities: ----------- -----------
Change in short-term borrowings (39,991) (2,402
Reduction in long-term debt (8,584) (4,373
Issuance of long-term debt 7,479 4
Issuance of common stock 3,502 1,002
Dividends paid on common stock, less
amounts reinvested (22,756) (20,498
----------- -----------
(60,350) (26,267
----------- -----------
Change in Cash and Cash Equivalents (3,046) (13,682
Cash and Cash Equivalents at
Beginning of Period 20,380 35,138
----------- -----------
Cash and Cash Equivalents at End of Period $ 17,334 $ 21,456
=========== ===========
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<PAGE> 14
Notes to Consolidated Financial Statements (Unaudited):
-------------------------------------------------------
1) At September 30, 1996 WICOR had borrowings of $13.0 million
and availability of $220.9 million under unsecured lines of
credit with several banks. The Company reclassified $0.6
million of commercial paper and $6.3 million of borrowings
under lines of credit as long-term debt as of September 30,
1996.
A total of $31.0 million of commercial paper, classified as
short-term debt, was outstanding as of September 30, 1996
at a weighted average interest rate of 5.5%.
2) For purposes of the Consolidated Statements of Cash Flows,
income taxes paid, net of refunds, and interest paid
(excluding capitalized interest) were as follows:
For the Nine Months
Ended September 30,
----------------------
1996 1995
---------- ----------
(Thousands of Dollars)
Income taxes paid $ 28,050 $ 23,582
Interest paid $ 11,687 $ 12,021<PAGE>
<PAGE> 15
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 WICOR, Inc. Master Savings Trust Agreement dated
as of October 1, 1996 between WICOR, Inc. and
Marshall & Ilsley Trust Company.
27 Financial data schedule (EDGAR version only).
(b) Reports on Form 8-K - There were no reports on Form 8-
K filed by the Company during the third quarter of
1996.<PAGE>
<PAGE> 16
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
WICOR, INC.
Dated: October 30, 1996 By: /s/ Joseph P. Wenzler
-----------------------
Joseph P. Wenzler
Vice President, Treasurer
and Chief Financial Officer<PAGE>
<PAGE> 17
WICOR, Inc.
Exhibit Index - FORM 10-Q
Exhibit No. Exhibit
----------- ---------------------------------------------
4.1 WICOR, Inc. Master Savings Trust Agreement dated
as of October 1, 1996 between WICOR, Inc. and
Marshall & Ilsley Trust Company.
27 Financial data schedule (EDGAR version only).<PAGE>
<PAGE>
<PAGE>
<PAGE> 1
WICOR, INC.
MASTER SAVINGS TRUST
AGREEMENT
This Agreement made as of October 1, 1996, between WICOR,
Inc. a corporation(hereinafter referred to as the "Company") and
MARSHALL & ILSLEY TRUST COMPANY, a Wisconsin banking
corporation (hereinafter referred to as the "Trustee").
WITNESSETH:
WHEREAS, the Company and certain of its affiliated and
subsidiary corporations listed in Appendix A attached hereto
(which affiliated and subsidiary corporations shall hereinafter
be referred to singularly or collectively as the "Corporation"
or the "Corporations") have established certain pension,
retirement and other employee benefit plans for the exclusive
benefit of their respective eligible employees and the
beneficiaries thereof (which plans shall hereinafter be referred
to as the "Separate Plans"), each of which Separate Plans is
listed in Appendix A attached hereto and constitutes a qualified
pension plan within the meaning of Section 401(a) of the
Internal Revenue Code, as amended; and
WHEREAS, under the terms of each of the Separate Plans,
the Company and the Corporations have, pursuant to the terms of
the Separate Plans, made provisions to enter into a trust
agreement or agreements establishing certain trusts thereunder
(which trust shall hereinafter be referred to as the "WICOR,
Inc. Master Savings Trust"). Each of Separate Plan is listed in
Appendix A attached hereto and constitutes a Plan exempt from
tax under Section 501(a) of the Internal Revenue Code, as
amended, by reason of forming a part of a Separate Plan
qualified under Section 401(a) of said Code, as amended; and
WHEREAS, the master trust is intended to be exempt from
tax under Section 501(a) of the Internal Revenue Code, as
amended, by reason of its forming a part of plans qualified
under Section 401(a) of the Internal Revenue Code, as amended;
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants herein contained, the Company and the
Trustee do hereby covenant and agree to the amendment and
restatement of this Master Trust Agreement in its entirety to
read and continue as follows:<PAGE>
<PAGE> 2
ARTICLE ONE
1.01 The Company hereby establishes with the Trustee a
Master Trust consisting of such sums of money and such property
acceptable to the Trustee as shall from time to time be paid or
delivered to the Trustee and the earnings and profits thereon.
All such money and property, all investments made therewith and
proceeds thereof and all earnings and profit thereon, less the
payments or other distributions which, at the time of reference,
shall have been made by the Trustee, as authorized herein, and
referred to herein as the "Master Fund," or the "Fund," and
shall be held by the Trustee, in trust, and dealt with in
accordance with the provision of the Agreement.
1.02 When the assets of each Separate Trust are
transferred to the Trustee, the Separate Trusts shall cease to
exist as separate trusts and shall be considered to continue
hereafter as a single trust hereunder.
ARTICLE TWO
2.01 Each of the Separate Plans shall be a Participating
Plan hereunder.
2.02 Any other Plan may be funded in whole or in part
through the Master Trust and become a Participating Plan thereby
only if all of the following conditions have been met:
a. The Company, or a Corporation has established
the Plan;
b. The Plan is qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended;
c. The Master Trust is exempt from taxation under
Section 501(a) of the Internal Revenue Code of 1986, as
amended;
d. The Master Trust (as then in effect and as the
same may be amended from time to time) has been duly
adopted as a trust under the Plan and in the case of a
Corporation, the Company has consented thereto;
e. The Master Trust is maintained at all times as
a domestic trust in the United States; and<PAGE>
<PAGE> 3
f. The Company is duly authorized under the Plan
to exercise on behalf of such Plan all of the authority
vested in it by the terms of this Master Trust.
2.03 When the Master Trust is adopted as a trust under the
Plan of any Corporation, such Corporation shall be bound by the
decisions, instructions, actions and directions of the Company
under this Agreement and the Trustee shall be fully protected by
the Company and such Corporation in relying upon such decisions,
instructions, actions and directions of the Company. The
Trustee shall not be required to give notice to or obtain the
consent of any such Corporation with respect to any action which
is taken by the Trustee pursuant to this Agreement, and the
Company shall have the sole authority to enforce this Agreement
on behalf of any such Corporation.
2.04 Responsibility for the management and control of the
assets of Plans utilizing the Master Trust as a funding medium
(including the power to acquire or dispose of such assets) may
be vested at the discretion of the Company in the Trustee and/or
in one or more Investment Managers appointed by the Company.
That portion of the fund for which the Trustee shall have such
responsibility is hereinafter referred to as the "Discretionary
Fund." Any portion of the Master Fund over which an Investment
Manager shall have such responsibility is hereinafter referred
to as a "Directed Fund." Allocation of assets of the Fund
between or among any Discretionary or Directed Funds shall be
determined by the Company. Further, the Company, being a named
fiduciary for this purpose, reserves the right to itself to
direct the Trustee respecting the management and control of
certain assets of specified Plans (including the power to
acquire or dispose of such assets) and such portion of the
Master Fund over which the Company shall have such
responsibility is hereinafter referred to as the "Company
Directed Fund." The Company may direct the Trustee to hold all
or any part of the assets from time to time constituting the
Company Directed Fund separate and apart from the assets of the
Master Fund. For efficiency or convenience of investment or
administration, the Master Fund or the Discretionary, Directed
or Company Directed Fund may be divided into such one or more
sub-funds as the Company or the Trustee may deem advisable.<PAGE>
<PAGE> 4
For the purpose of this Agreement, "Investment Manager"
shall mean an investment adviser registered under the Investment
Advisers Act of 1940, a bank (other than the Trustee) as defined
in the Act, or an insurance company qualified to perform
investment management services under the laws of more than one
State, which shall have acknowledged in writing to the Company
that it is a fiduciary with respect to all Participating Plans,
and which shall have the power to manage, acquire and dispose of
Plan assets.
2.5 The Trustee shall maintain a separate account
reflecting the equitable share in the Master Fund of each
Participating Plan. The equitable shares in the Master Fund of
the respective present Participating Plans as of October 1, 1996
shall be proportionate to the fair market values of the assets
allocable to such Plans under the Separate Trusts, as certified
by the Company to the Trustee. Thereafter, for the purpose of
determining the equitable shares of Participating Plans, the
Trustee shall determine the value of the assets of the Master
Fund as of the last day of each month and as of such other dates
as the Trustee may deem appropriate or the Company may direct.
In addition, for the convenience of the company, the Company may
request the Trustee to include in such account assets which do
not constitute part of the Master Fund or are held by the
Trustee in a segregated Company Directed Fund, for the purposes
of determining the value of all of the assets of such
Participating Plans. Assets shall be valued at their market
values at the close of business on the date of valuation, or, in
the absence of readily ascertainable market values, at such
values as the Trustee shall determine in accordance with methods
consistently followed and uniformly applied. Anything herein to
the contrary notwithstanding, with respect to assets
constituting part of a Directed Fund hereunder or in the event
that assets which do not constitute part of the Master Fund or
which are held by the Trustee in a segregated Company Directed
Fund are included in such valuation or account at the request of
the Company, the Trustee may rely for all purposes of this
Agreement, including for the purpose of determining the value of
such assets as of any monthly or other valuation date, on any
certified appraisal or other form of valuation submitted to it
by the Investment Manager, the Company, or by the person or
persons controlling such assets.<PAGE>
<PAGE> 5
2.06 Except as provided in Section 3.01(c), the Trustee
shall not be required to maintain any separate records or
accounts with respect to any participant in (or beneficiary of)
any Participating Plan which is of the defined benefit type, and
any such records or accounts required to be maintained pursuant
to the terms of any such Plan shall be maintained by the Company
or by the appropriate committee, entity or person(s) directly
charged with such responsibility under the individual
Participating Plan.
2.07 By entering into this Agreement, the Trustee does not
assume any responsibility or undertake any duty to enforce
payment of any contribution to any Participating Plan, any
responsibility for the adequacy of the Fund or the funding
standards adopted by the sponsor of any Participating Plan to
meet or discharge any pension or other liabilities under such
Plan, or (except as otherwise required by law) any
responsibility under the terms of this Agreement for the
management or control of any Directed Funds or Company Directed
Funds. No duties or obligations shall be imposed upon the
Trustee unless they have been specifically undertaken by the
express terms of this Agreement.
2.08 Except as may otherwise be permitted by law, at no
time prior to the satisfaction of all liabilities with respect
to participants and their beneficiaries under any Participating
Plan shall any part of the equitable share of such Participating
Plan in the Master Fund be used for, or diverted to, any
purposes other than for the exclusive benefit of such
participants and their beneficiaries, and for defraying
reasonable expenses of administering such Plans.<PAGE>
<PAGE> 6
ARTICLE THREE
3.01 The Trustee shall:
a. hold, invest and reinvest the Discretionary
Fund as provided in Article Four in accordance with the
powers and discretion contained in or referred to in
Article Seven;
b. settle purchases and sales for any Directed
Fund upon the instructions of the Investment Manager as
provided in Article Five or in the case of a Company
Directed Fund, upon the instructions of the Company;
c. pay moneys on the order of the Company,
including when the Company shall so order, payments
directly to or for the benefit of the participants and
their beneficiaries, or to an insurance company to
provide, by the purchase of an annuity contract, or
otherwise, for the payment of benefits and the Trustee
shall keep records of any and all such payments so
directed and provide such tax advices or governmental
forms and reports as shall from time to time be agreed
upon between the Company and the Trustee; and
d. transfer any portion of the Master Fund on the
order of the Company to any insurance company or other
trustee to provide an alternative or additional funding
medium or investment vehicle for the management and/or
control of Participating Plan assets.
3.02 Any orders pursuant to subparagraphs (c) and (d) of
Section 3.01 may, but need not specify the application to be
made of moneys so ordered, and the Trustee may charge such
distribution against any portion of the Master Fund, as the
Company may direct. The Trustee may assume that any such orders
are not contrary to any applicable law. The Trustee shall not
be responsible in any way respecting the determination,
computation, payment or application of any benefit or payment
which it is ordered to make, or for the form, terms or issuer of
any insurance contract which it is directed to purchase with
assets of the Fund (whether or not such contract is purchased to
provide primarily for the payment of benefits under any
Participating Plan or primary as an investment vehicle or
funding medium), for performing any functions under any
insurance contract which it may be directed to purchase and hold
as Contract Holder thereunder (other than the execution of any
documents incidental thereto on the instruction of the Company),
or for the terms of any trust agreement under which any trustee
to which it shall deliver any assets of the Fund on the order of
the Company is acting, or for any other matter affecting the
administration of a Plan by the Company, or any other person or
persons to whom responsibility for Plan administration is
allocated or delegated pursuant to the terms of a Participating
Plan.<PAGE>
<PAGE> 7
3.03 Any power or duty of the Company hereunder shall be
exercised by the Board of Directors of the Company or by such
other person or persons as are authorized to exercise such
powers or duties as certified by the Company in writing to the
Trustee. The Trustee shall be entitled to rely upon any such
certification by the Company. The Trustee shall be fully
protected in continuing to rely on such certification until a
subsequent certification is filed with the Trustee.
ARTICLE FOUR
4.01 The Trustee shall invest and reinvest the
Discretionary Fund as a single fund without distinction between
principal and income in such investments and at such time or
times and in such shares and proportions as it, in its absolute
discretion, shall deem advisable; except that, the Trustee is
authorized to hold in the Discretionary Fund uninvested cash
awaiting investment and such additional cash balances as it
shall deem reasonable or necessary to meet anticipated
distributions from or administrative costs of any Participating
Plan or the Fund, without incurring any liability for the
payment of interest on such cash, notwithstanding that the
Trustee or an affiliate thereof may accrue interest on such cash
balances.
The Trustee shall discharge the foregoing powers and
discretion in accordance with the funding policy and guidelines
established by the Company from time to time and communicated in
writing to the Trustee. The Trustee shall have no
responsibility with respect to the formulation of any funding,
investment or diversification policy embodied in any such
direction.
If the Company has exercised its discretion to vest
responsibility for the management and control of any portion of
the Master Fund in one or more Investment Managers or in itself
as to a Company Directed Fund, or if the Master Fund is not the
only funding medium under a Participating Plan, any trustee
(including the Trustee), Investment Manager or other person in
whom fiduciary responsibility is vested for the management and
control of any Plan assets shall exercise its fiduciary
responsibilities with respect to such Plan assets, including
without limitation any responsibility of diversification imposed
by Section 404(a)(1)(c) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), as if the assets allocated to it
constituted the entirety of the Plan assets. The Company or
some other fiduciary named by it shall be responsible for the
overall diversification of the entire Master Fund.<PAGE>
<PAGE> 8
4.2 The Trustee may in its discretion invest and reinvest
in either (i) any fund created and administered by it, as
the trustee thereof, for the collective investment of the
assets of employee benefit trusts or otherwise, as long
as such collective investment fund is a qualified trust
under the applicable provisions of the Internal Revenue
Code (and while any portion of the Fund is so invested
such collective investment fund shall constitute part of
the Participating Plans, and the instrument creating such
fund shall constitute part of this Master Trust
Agreement) or (ii) the shares of any mutual fund
including any such fund from which the Trustee or any
affiliate thereof receives an investment management fee
or any other fee.
ARTICLE FIVE
5.01 The investment and reinvestment of any Directed Fund
established under this Agreement shall be under the exclusive
management and control of the Investment Manager appointed by
the Company. The Trustee shall not be a party to any agreement
with the Investment Manager, and the terms and conditions of
appointment, authority and retention of the Investment Manager
shall be the sole responsibility of the Company.
The Company shall certify in writing to the Trustee:
a. that it has appointed an Investment Manager
with respect to each Participating Plan; and
b. the assets of the fund to be allocated to the
Directed Fund for which such Investment Manager shall
have responsibility.
The Company shall also furnish to the Trustee a
certification by such Investment Manager that it is an
"Investment Manager" as such term is defined in Section 2.04 of
this Agreement.<PAGE>
<PAGE> 9
The Investment Manager shall furnish the Trustee from
time to time with the names and signatures of those persons
authorized to direct the Trustee on its behalf hereunder. The
Trustee shall be fully protected in continuing on its behalf
hereunder. The Trustee shall be fully protected in continuing
to rely on the certification provided by an Investment Manager
as to such authorized persons until a subsequent certification
is filed with the Trustee. The Trustee shall have the right to
request that all directions by an Investment Manager pursuant to
this Agreement be in writing and shall assume no liability
hereunder for failure to act pursuant to such directions unless
and until it shall receive directions in a form satisfactory to
it.
5.02 All transactions in or from a Directed Fund related
to the acquisition or disposal of assets, as well as all
purchases and sales of assets, shall be made upon such terms and
conditions and from or through such principals and agents, as
the Investment Manager shall direct. No directed transactions
shall be executed through the facilities of the Trustee except
in those instances where the Trustee shall make available its
facilities solely for the purposes of temporary investment of
cash reserves of a Directed Fund. (However, nothing herein
shall confer any authority or obligation upon the Trustee to
invest or reinvest the cash balances of any Directed Fund unless
and until it receives directions from the Investment Manager.)
5.03 Supervision of the Investment Manager shall be the
exclusive responsibility of the Company. Therefore, the Trustee
shall have no duty to review any direction or any securities or
other property held in any Directed Fund or to make suggestions
to the Investment Manager or the Company with respect to the
exercise or non-exercise of any power by the Investment Manager.
The Trustee shall be fully protected in acting or omitting to
act in accordance with or in the absence of the written
directions of the Investment Manager or of the Company
respecting any Company Directed Fund and shall be under no
liability for any loss of any kind which may result by reason of
any action taken or omitted by it in good faith in accordance
with any such direction or by reason of inaction in the absence
of such written directions.<PAGE>
<PAGE> 10
5.04 The Trustee shall not be deemed to have any
responsibility to manage and control any asset held in a
Directed Fund or Company Directed Fund upon the resignation or
removal of an Investment Manager or withdrawal by the Company of
its control as to a Company Directed Fund unless and until it
has been notified in writing by the Company of its withdrawals
of control as to a Company Directed Fund or that the Investment
Manager's authority has terminated and that such Directed Fund
or Company Directed Fund assets are to be integrated with the
Discretionary Fund. Such notice shall not be deemed effective
until a reasonable period after it has been received by the
Trustee. In the event that the assets of a Directed Fund or
Company Directed Fund shall become integrated at any time with
the Discretionary Fund, the Trustee shall not be liable for any
losses to the Master Retirement Fund resulting from the
disposition of any investment made by an Investment Manager or
the Company or for the holding for any illiquid or unmarketable
securities or the holding of any other asset acquired by the
Investment Manager or the Company if the Trustee is unable to
dispose of such investments because of any Securities Laws
restrictions or if any orderly liquidation of such investment is
impractical under prevailing conditions, or for failure to
comply with any investment or diversification limitations
imposed by the Company pursuant to the power reserved to it
under Section 4.01 or for any other violation of the terms of
this Agreement, the Participating Plans or applicable law or
laws as a result of the addition of Directed Fund or Company
Directed Fund assets to the Discretionary Fund.
5.05 The Trustee shall not be liable for the acts or
omissions of any Investment Manager constituting a breach of the
latter's duties unless it shall have been judicially determined
that the Trustee knowingly participated in, or knowingly
undertook to conceal, such act or omission, knowing such act or
omission constituted a breach of the Investment Manager's duties
hereunder.<PAGE>
<PAGE> 11
ARTICLE SIX
6.01 Without in any way limiting the powers and
discretions conferred upon the Investment Manager by the other
provisions of this Agreement or by law, any Investment Manager
appointed hereunder shall have the following powers and
discretions with respect to the Directed Fund subject to its
management and control, and, upon the directions of such
Investment Manager, the Trustee shall make, execute, acknowledge
and deliver any and all documents of transfer and conveyance and
any and all other instruments that may be necessary or
appropriate to carry out such powers and discretions:
a. to sell, exchange, convey, transfer or
otherwise dispose of any property constituting the
Directed Fund by private contract or at public auction,
and no person dealing with the Investment Managers or
the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity,
expediency or propriety of any such sale or other
disposition;
b. to enter into contracts or to make commitments
either alone or in concert with others to sell at any
future date any property acquired for the Directed Fund
or to purchase at any future date any property which it
may be authorized to acquire under this Agreement;
c. to purchase part interests in real property or
in mortgages on real property, wherever such real
property may be situated;
d. to lease to others for any term without regard
to the duration of this Trust any real property or part
interest in real property held in the Directed Fund;
e. to delegate to a manager or the holder or
holders of a majority interest in any real property or
mortgage on real property at any time constituting a
part of the Directed Fund, the management and operation
of any part interest in such real property or mortgage
and the authority to sell such real property or mortgage
or otherwise carry out the decisions of such manager or
holder or holders of such majority interest;<PAGE>
<PAGE> 12
f. to vote upon any stocks, bonds or other
securities; to give general or special proxies or powers
of attorney with or without power of substitution; to
exercise any conversion privileges, subscription rights
or other options and to make any payments incidental
thereto; to consent to or otherwise participate in
corporate reorganizations or other changes affecting
corporate securities and to delegate discretionary
powers and to pay any assessments or charges in
connection therewith; and generally to exercise any of
the powers of an owner with respect to stock, bonds,
securities or other property held in the Directed Fund.
g. to convert, redeem, exchange for other
securities or other property any securities or property
held by it, or to write covered call options against
securities held by it or other forms of options directly
related to any such call options outstanding; and
h. to invest, in the case of any Investment
Manager which is a bank or trust company, through the
medium of any fund created and administered by such
Investment Manager for the collective investment of the
assets of employee benefit trusts or otherwise, or in
the case of any Investment Manager, to invest through
the medium of any similar collective investment fund
created and administered by the Trustee hereof which
serves as a vehicle for the temporary investment of
reserves of participating trusts, so long as in either
case such collective investment fund is a qualified
trust under the applicable provisions of the Internal
Revenue Code (and while any portion of the assets of the
Participating Plans is so invested, such collective
investment fund shall constitute part of the Separate
Plans, and the instrument creating such fund shall
constitute part of this Master Trust).<PAGE>
<PAGE> 13
6.02 In the event that any investment is made by an
Investment Manager in real property, then the Trustee shall have
the right to request as a condition precedent to its executing
any documents or paying over any trust assets in connection with
such transactions, that it received a certified appraisal that
the property has a value at least equal to the transaction price
and that the property is in the form and condition described in
such documents, and, further, that it receive an opinion of
counsel (who may be counsel to the Investment Manager) that such
documents are in proper form for execution by the Trustee, that
such deed or document has been or will be properly recorded
under all applicable Recording Acts, and that appropriate
policies adequately insuring the trust against loss for any
reason (including a defect in title) have been procured in the
name of the Trustee. In addition, the Investment Manager shall
provide the Trustee, upon request, with the current appraisals
of such property which shall be relied upon by the Trustee for
all valuation and accounting purposes under this Agreement.
6.03 The Company, as to any Company Directed Fund, shall
be vested with all of the powers and discretion vested in an
Investment Manager by Section 6.01 and, in addition, may
specifically direct the acquisition, holding or sale of employer
securities or employer real property which are "qualifying"
within the meaning of the subject to all the limitations of
ERISA, except that employer securities or employer real property
may be held to the extent permitted under Section 414(c)(2) or
any other transitional rule or applicable exemption under ERISA.
ARTICLE SEVEN
7.01 The Trustee, with respect to the Discretionary Fund,
shall be vested with all of the powers and discretions vested in
the Investment Manager by Section 6.01.<PAGE>
<PAGE> 14
7.02 In addition, the Trustee is hereby authorized
respecting the Master Fund in its discretion:
a. to register any securities held in the Fund in
its own name or in the name of a nominee and to hold any
investment in bearer form, and to combine certificates
representing such investments with certificates of the
same issue held by the Trustee in other fiduciary
capacities or to deposit or to arrange for the deposit
of such securities in any qualified central depository
or clearing corporation even though, when so deposited,
such securities may be merged and held in bulk in the
name of the nominee of such depository with other
securities deposited therein by any other person, or to
deposit or arrange for the deposit of any securities
issued by the United States Government, or an agency or
instrumentality thereof, with a federal reserve bank,
but the books and records of the Trustee shall at the
times show that all such investments are part of the
Master Fund;
b. to employ suitable agents, depositories and
counsel, domestic or foreign, and to charge their
reasonable expenses and compensation against the fund;
c. to borrow money from any source as may be
necessary or advisable to effectuate the purpose of the
Master Fund on such terms and conditions as the Trustee,
in its absolute discretion, may deem advisable;
d. to deposit any funds of the trust in interest
bearing account deposits maintained by or savings
certificates issued by the Trustee, in its separate
corporate capacity, or in any other banking institution
affiliated with the Trustee;
e. to comprise or otherwise adjust all claims in
favor of or against the Fund subject to Company
approval;
f. to organize corporations under the laws of any
state for the purpose of acquiring or holding title to
any property for the fund or to request the Company to
appoint another trustee for such purpose;
g. to make any distribution or transfer of the
Discretionary Fund assets in cash or in kind as the
Trustee and, in furtherance thereof, to value such
assets, which valuation shall be subject to the approval
of the Company.<PAGE>
<PAGE> 15
ARTICLE EIGHT
8.01 The Trustee shall keep accurate and detailed accounts
of all investments, receipts, disbursements and other
transactions hereunder for the Master Fund (including any
Directed Fund or Company Directed Fund) and all accounts, books
and records relating thereto shall be open to inspection and
audit at all reasonable times by any persons designated by the
Company.
In addition, within ninety (90) days following the
close of each fiscal year, and within ninety (90) days after the
removal or resignation of the Trustee, the Trustee shall file
with the Company a written accounting setting forth all receipts
and disbursements of the Fund and all investments and other
transactions effected by it upon its own authority or pursuant
to the directions of any Investment Manager or the Company as
herein provided during such fiscal year or during the period
from the close of the last fiscal year to the date of such
removal or resignation. Within sixty (60) days from the date of
filing such annual or other account, the Trustee, if requested
by the Company, will also serve copies of such account upon any
persons designated by the Company as having administrative
responsibility with respect to any Participating Plan. Upon the
expiration of two hundred ten (210) days from the date of filing
such account, the Trustee shall be forever released and
discharged from all liability and accountability to the Company
or any person upon whom the Trustee has served a copy of the
account with respect to the accuracy of such accounting, except
with respect to any such acts or transactions as to which the
Company or any person upon whom the account has been served
shall within such two hundred ten (210) day period file with the
Trustee specific written objections.
To the extent, if any, that the Trustee shall be
required to value the assets of any Directed Fund or Company
Directed Fund for any purpose, including any accounting as
hereinabove provided, the Trustee may rely for all purposes of
this Agreement on any certified appraisal or other form of
valuation submitted to it by the party responsible for the
management and control of such Fund.<PAGE>
<PAGE> 16
8.02 Except to the extent that Sections 502 and 504 of
ERISA, as the same may be amended from time to time, may provide
otherwise, in order to protect the Master Trust from the
expenses which might otherwise be incurred, no one other than
the Company may require the Trustee to account or may institute
an action or preceding against the Trustee or the Fund.
However, nothing herein shall in any way limit the Trustee's
right to bring any action or proceeding to settle its account or
for such other relief as it may deem appropriate.
8.03 The Trustee may from time to time consult with
counsel, who may be counsel to the Company, with respect to any
questions arising as to the construction of this Agreement or
any action to be taken hereunder and the Trustee shall be fully
protected, to the extent permitted by law, in acting in good
faith upon the advice of counsel.<PAGE>
<PAGE> 17
ARTICLE NINE
9.01 Any expenses incurred by the Trustee in connection
with its administration of this Trust, including fees for legal
services rendered to the Trustee, provided the Trustee gives
written notice served to the Company prior to the retaining of
such legal service, (whether or not rendered in connection with
a judicial or administrative proceeding and whether or not
incurred while it is acting as Trustee), such compensation to
the Trustee as may be agreed upon from time to time between the
Trustee and the Company, and all other proper charges and
disbursements of the Trustee, shall be paid from the Master Fund
unless paid by the Company. The Company shall reimburse the
Trustee for any such expenses if for any reason such expenses
cannot be paid out of the Fund. The Company may direct the
Trustee to pay from the Master Fund the fees of any Investment
Manager appointed pursuant to Section 5.01 and other proper
administration expenses of any Participating Plan, including but
not limited to actuarial fees. All taxes of any and all kinds
whatsoever that may be levied or assessed under existing or
future laws upon the Master Fund or the income thereof shall be
paid from the Master Fund. Any amount paid from the Master Fund
which is specifically allocable to a particular Participating
Plan or Plans shall be charged against the equitable shares of
such Participating Plan or Plans; any amount paid from the Fund
which is allocable to all of the Participating Plans shall be
charged against the Fund as a whole.
ARTICLE TEN
10.01 Subject to the provisions of Section 3.03, whenever
the provisions of this Agreement require or permit any action to
be taken by the Company or any Corporation, such action may be
taken by the Board of Directors of the entity taking the same or
by any person authorized to act on behalf of such entity by such
Board of Directors. Any resolution adopted by the Board of
Directors of any corporation shall be certified to the Trustee
by the Secretary or an Assistant Secretary of such Corporation
under its corporate seal, and the Trustee may rely upon any
resolution so certified until revoked or modified by a further
resolution similarly certified to the Trustee.
10.02 The Company shall furnish the Trustee from time to
time with a certificate of its Secretary or an Assistant
Secretary as to the names and signatures of all persons
authorized to issue orders, requests, instructions and
objections to the Trustee pursuant to the provisions of this
Agreement.<PAGE>
<PAGE> 18
10.03 All orders, requests, instructions and objections of
any of the persons authorized to act in accordance with the
provisions of this Agreement may be required by the Trustee, to
the extent practical, to be in writing, but the Trustee shall be
fully protected in acting in accordance with either such written
instructions or oral instructions received by the Trustee in
good faith.
10.04 The Trustee shall have the right to assume in the
absence of written notice to the contrary, that no event
constituting a change in the authority of any person or
terminating any Investment Manager's authority has occurred.
ARTICLE ELEVEN
11.01 If Marshall & Ilsley Trust Company is at any time
acting as a successor Trustee or succeeds to responsibilities
hereunder for management of plan assets with respect to the Fund
(or any portion thereof), the Company hereby agrees to hold
Marshall & Ilsley Trust Company harmless from and against all
taxes, expenses (including counsel fees), liabilities, claims,
damages, actions, suits or other charges incurred by or assessed
against it as successor Trustee, as a direct or indirect result
of any act or omission of a predecessor trustee or any other
person who, prior to Marshall & Ilsley Trust Company's
acceptance as Trustee, was charged under any agreement affecting
Fund assets for investment responsibility with respect to such
assets.
ARTICLE TWELVE
12.01 Upon receipt of notice from the Company of the
termination, the disqualification under Section 401(a) of the
Code, or the withdrawal from this Master Trust, of any
Participating Plan or any part thereof, the Trustee shall
withdraw and segregate the share of the assets of the Fund
allocable to such Participating Plan or part thereof and shall
either dispose of such segregated share in accordance with the
directions of the Company or continue to hold such segregated
share, in trust, as a separate trust governed by the same
provisions as this Agreement, except that if such segregated
share is equal to an entire Participating Plan in the Fund, the
entity or successor thereto which had established such
Participating Plan shall thereafter be deemed to be "the
Company" for all purposes of the Agreement. If such segregated
share is less than the entire equitable share of a Participating
Plan in the Fund, the Company shall certify to the Trustee, that
portion of the equitable share of such Participating Plan
attributable to the participants and their beneficiaries on
whose account such assets are to be segregated.<PAGE>
<PAGE> 19
12.02 The Company reserves the right at any time and from
time to time to terminate or to amend, in whole or in part, any
or all of the provisions of this Agreement by notice thereof in
writing delivered to the Trustee; provided that, no such
amendment which affects the rights, duties or responsibilities
of the Trustee may be made without its consent, and provided
further that, except as may be otherwise allowed under Section
403(c) of ERISA (it being the Company's intent that all
contributions by it or any Corporation to any Participating Plan
be conditioned as allowed in said Section), no instrument of
termination or amendment shall authorize or permit, at any time
prior to the satisfaction of all liabilities with respect to the
participants and their beneficiaries under the Plans, any part
of the corpus or income of the Fund to be used for or diverted
to purposes other than for the exclusive benefit of such
participants and their beneficiaries.
12.03 In the event of the termination of the Trust as above
provided (or of all the Participating Plans), the Trustee shall
continue to administer the Fund as hereinabove provided until
all of the purposes for which it has been established have been
accomplished or dispose of the Fund after the payment or other
provision of all expenses incurred in the administration and
termination of the Trust (including any compensation to which
the Trustee may be entitled), all in accordance with the written
order of the Company or any successor thereto. Until the final
distribution of such Fund, the Trustee shall continue to have
and may exercise all of the powers and discretions conferred
upon it by this Agreement.<PAGE>
<PAGE> 20
12.04 The Trustee may be removed by the Company at any time
upon thirty (30) days' notice in writing to the Trustee. The
Trustee may resign at any time upon thirty (30) days' notice in
writing to the Company. Upon such removal or resignation of the
Trustee, the Company shall appoint a successor trustee and, upon
acceptance of such appointment by the successor trustee, the
Trustee shall assign, transfer and pay over to such successor
trustee the funds and properties then constituting the Fund, or
the Company shall establish an alternative funding medium and
the Trustee shall assign, transfer and pay over the Fund, as
then constituted, upon the directions of the Company. The
Trustee is authorized, however, to reserve such amount as to it
may seem advisable for payments of its fees and expenses in
connection with the settlement of its account or otherwise, and
any balance of such reserve remaining after the payment of such
fees and expenses shall be paid over to the successor trustee or
alternative funding medium, as the case may be. Notwithstanding
any provision of the Plans or this Agreement to the contrary,
the Trustee is hereby authorized to invest and reinvest such
reserves in any investment or investment vehicle (including any
collective investment fund described in Section 4.02)
appropriate for the temporary investment of each cash reserves
of trusts.
If for any reason the Company cannot or does not act
in the event of the resignation or removal of the Trustee, as
hereinabove provided, the Trustee may apply to a court of
competent jurisdiction for the appointment of a successor
Trustee or for instructions. Any expenses incurred by the
Trustee in connection therewith shall be paid from the Fund as
an expense of administration.
12.05 Anything hereinabove to the contrary notwithstanding,
the Trustee may condition its delivery, transfer or distribution
of any asset under this Article upon the Trustee's receiving
assurance satisfactory to it that the approval of appropriate
governmental or other authorities has been secured and that all
notices and other procedures required by applicable law have
been accomplished.<PAGE>
<PAGE> 21
ARTICLE THIRTEEN
13.01 To the extent that State law shall not have been
preempted by the provisions of ERISA or any other laws of the
United States heretofore or hereafter enacted, as the same may
be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of
the State of Wisconsin.
ARTICLE FOURTEEN
14.01 The Company shall provide the Trustee with copies of
all documents constituting the Participating Plans at the time
this Agreement is executed by the Company or adopted under any
other plan, as provided in Article Two, and all other documents
amending or supplementing the Participating Plan promptly upon
their adoption. The Trustee shall be entitled to rely upon the
Company's attention to this obligation and shall be under no
duty to inquire of the Company as to the existence of any
documents not provided by the Company hereunder.
ARTICLE FIFTEEN
15.01 Pursuant to a resolution of its Board of Directors
and in consideration of the Trustee's agreeing to enter into
this Agreement, the Company hereby agrees to hold harmless
Marshall & Ilsley Trust Company, individually and as Trustee
under this Agreement, and Marshall & Ilsley Trust Company
directors, officers, and employees from and against all amounts
including without limitation, taxes, expenses (including
reasonable counsel fees), liabilities, claims, damages, actions,
suits or other charges, incurred by or assessed against Marshall
& Ilsley Trust Company, individually or as Trustee, or its
directors, officers, or employees, (i) as a direct or indirect
result of anything done in good faith, or alleged to have been
done, by or on behalf of Marshall & Ilsley Trust Company in
reliance upon the directions of the Company, any Investment
Manager appointed by the Company, or any person or committee
authorized to act on behalf of the Company or to appoint such
Investment Manager under any Participating Plan, or anything
omitted to be done in good faith, or alleged to have been
omitted, in the absence of such directions, or (ii) as a direct
or indirect result of the failure of the Company or such person
or a committee, as a co-fiduciary under said Plans, directly or
through its agents, to adequately, carefully and diligently
discharge its responsibilities with respect to the selection,
supervision and/or retention of any Investment Manager.<PAGE>
<PAGE> 22
15.02 The Company further agrees that the undertakings made
in this Article of this Agreement shall be binding on its
successors or assigns and shall survive termination, amendment
or restatement of this Agreement, or the resignation or removal
of the Trustee, and that this Article shall be construed as a
contract between the Company and the Trustee according to the
laws of the State of Wisconsin in effect from time to time.<PAGE>
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective authorized officers
and their corporate seals to be affixed as of the date first
above set forth.
WICOR, Inc.
BY:
TITLE:
[Corporate Seal]
ATTEST:
TITLE:
MARSHALL & ILSLEY TRUST
COMPANY
BY:
TITLE:
[Corporate Seal]
ATTEST:
TITLE:<PAGE>
<PAGE> 24
APPENDIX A
Affiliated and Subsidiary Corporations
WICOR, Inc.
Wisconsin Gas Company
WICOR Energy Services
WEXCO of Delaware, Inc.
Sta-Rite Industries, Inc.
HYPRO Corporation
SHURflo, Inc.
Plans
Wisconsin Gas Company Employees Savings Plan
Wisconsin Gas Company Local 6-18-1 Savings Plan
Wisconsin Gas Company Local 6-18 Savings Plan
Hypro Corp. 401(k) and Profit Sharing Plan
Sta-Rite Industries Incentive Savings Plan
SHURflo 401(k) Profit Sharing Plan<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the WICOR,
Inc. FORM 10-Q for the nine months ended September 30, 1996 and is qualified in
its entirety by reference to such financia; statements and the related
footnotes.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 373,792
<OTHER-PROPERTY-AND-INVEST> 63,806
<TOTAL-CURRENT-ASSETS> 284,096
<TOTAL-DEFERRED-CHARGES> 242,437
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 964,131
<COMMON> 18,400
<CAPITAL-SURPLUS-PAID-IN> 223,771
<RETAINED-EARNINGS> 117,403
<TOTAL-COMMON-STOCKHOLDERS-EQ> 359,574
0
0
<LONG-TERM-DEBT-NET> 171,272
<SHORT-TERM-NOTES> 27,000
<LONG-TERM-NOTES-PAYABLE> 150,000
<COMMERCIAL-PAPER-OBLIGATIONS> 31,600
<LONG-TERM-DEBT-CURRENT-PORT> 4,909
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 370,376
<TOT-CAPITALIZATION-AND-LIAB> 964,131
<GROSS-OPERATING-REVENUE> 731,486
<INCOME-TAX-EXPENSE> 20,179
<OTHER-OPERATING-EXPENSES> 666,659
<TOTAL-OPERATING-EXPENSES> 686,838
<OPERATING-INCOME-LOSS> 44,648
<OTHER-INCOME-NET> 1,069
<INCOME-BEFORE-INTEREST-EXPEN> 45,717
<TOTAL-INTEREST-EXPENSE> 13,594
<NET-INCOME> 32,123
0
<EARNINGS-AVAILABLE-FOR-COMM> 32,123
<COMMON-STOCK-DIVIDENDS> 22,756
<TOTAL-INTEREST-ON-BONDS> 696
<CASH-FLOW-OPERATIONS> 92,506
<EPS-PRIMARY> 1.75
<EPS-DILUTED> 1.75
</TABLE>
