PENTAIR INC, 10-K, 1994-03-30

PENTAIR INC
10-K, 1994-03-30
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT

Previous: PENNSYLVANIA ELECTRIC CO, U-1, 1994-03-30

Next: PENTAIR INC, SC 13G/A, 1994-03-30

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D. C. 20549

FORM 10-K

(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1993
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 No. 0-4689

PENTAIR, INC.

(Exact name of Registrant as specified in its charter)

Minnesota 41-0907434
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1500 County Road B2 West, Suite 400
Saint Paul, Minnesota 55113-3105

(Address of principal executive offices) (Zip Code)

(612) 636-7920
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:

1) Common Stock, Par Value $.16 2/3 per share
2) Rights
(Title of Class)

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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X

The aggregate market value of voting stock held by
nonaffiliates of the Registrant on February 25, 1994 was $611
million. For purposes of this calculation, all shares held by
officers and directors of the Registrant and by the trustees of
employee stock ownership plans (ESOPs) and pension plans
of the Registrant and subsidiaries were deemed to be shares
held by affiliates.

The number of shares outstanding of Registrant's only class
of common stock on February 25, 1994 was 18,172,891.

<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE

The following portions of the Annual Report to Shareholders
for the year ended December 31, 1993 and Proxy Statement
for the 1994 Annual Meeting of Shareholders are incorporated
by reference as the Item of this Form 10-K indicated.

PART OF FORM 10-K PORTION OF ANNUAL REPORT

Part I, Item 1. Page 37: Business
Business - Financial Segment Information,
information about segments Page 29: Research
and about foreign operations and Development.
and research and development.

Part II, Item 5. Market for Page 41: Pentair
Registrant's Common Equity Stock Data, Price
and Related Stockholder Range and Dividends
Matters. of Common Stock.

Part II, Item 6. Selected Page 18: Selected
Financial Data. Financial Data.

Part II, Item 7. Management's Pages 18-23:
Discussion and Analysis of Management's
Financial Condition and Discussion and
Results of Operations. Analysis.

Part II, Item 8. Financial Pages 24-37:
Statements and Consolidated Statement
Supplementary Data. of Income, Balance
Sheet and Statement of
Cash Flows, related
Notes, and Report of
Independent Auditors;
Quarterly Financial Data.

PORTION OF PROXY STATEMENT

Part III, Item 10. Directors Pages 2-5: Security
and Executive Officers of Ownership of
the Registrant. Management and
Beneficial Ownership:
Pages 5-7: Directors
Standing for Election.

Part III, Item 11. Executive Pages 10-18: Executive
Compensation. Compensation.

Part III, Item 12. Security Pages 2-5: Security
Ownership of Certain Ownership of
Beneficial Owners and Management and
and Management. Beneficial
Ownership.

<PAGE>

PART I

Item 1. Business

(a) General Development of the Business.

The Registrant was incorporated in 1966 under the laws of
Minnesota. In the past year, the Registrant has not changed
its form of organization or mode of conducting business. The
Registrant intends to continue to grow through internal
development and diversify through the acquisition of
established companies or manufacturing operations and
investments in owned subsidiaries and new joint ventures. As
in the past, periodic dispositions of assets or business units
are possible when they no longer fit with the long-term
strategies of the Registrant.

The Registrant completed on February 28, 1994 the
acquisition of the net assets and the subsidiaries of Schroff
GmbH (Schroff) from Fried. Krupp AG Hoesch-Krupp for a
cash purchase price of approximately $153 million. Schroff
manufactures and sells enclosures, cases, subracks and
accessories for commercial electronic and instrumentation
applications, with world-wide 1993 sales of approximately $160
million. While Schroff faces significant competition in each of
its markets, it is the largest manufacturer of electronic
enclosures and 19 inch subracks in the European market, in
which the majority of Schroff sales are made. The Registrant
views Schroff as strongly complementary to the electrical
enclosure business of Hoffman Engineering and intends to
develop these businesses using their respective strengths in
technology, manufacturing, marketing and market position.

(b) Financial Information about Industry Segments.

The Registrant's business is conducted in three industry
segments. The Specialty Products segment manufactures
woodworking machinery; portable power tools; and pumps and
pumping systems. The General Industrial Equipment segment
manufactures electrical and electronic enclosures and
wireways; industrial lubricating systems and material
dispensing equipment; automotive service equipment; and
sporting ammunition. The Paper Products segment
manufactures printing papers in a variety of types and grades.
Business segment financial information is found on page 37
(Note 17) of the 1993 Annual Report to Shareholders.

Description of the Specialty Products Segment:

Products and marketing.

The following table sets forth, for each of the last three years,
the Specialty Products segment net sales by product class as
percentages of the Registrant's consolidated net sales.
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Woodworking Machinery 15% 15% 15%
Portable Electric Tools 9 9 8
Pumps and Pumping Systems 7 7 7
Total Segment 31% 31% 30%
</TABLE>
Woodworking Machinery. The Registrant, through its
subsidiary Delta International Machinery Corp. (Delta),
manufactures, markets, and services a line of general-purpose
woodworking machinery, such as saws, planers, joiners,
grinders, drill presses, shapers, lathes, and other quality
machines. Delta sells its products in the United States,
Canada, and other foreign countries under its "Delta" brand
name through a network of independent stocking distributors,
independent retailers, mass merchandisers and home centers.

Portable Electric Tools. The Registrant, through its subsidiary
Porter-Cable Corporation (Porter-Cable), manufactures and
markets a variety of portable electric tools, such as saws,
sanders, drills and routers, used in woodworking, industrial
maintenance, and construction trades. Porter-Cable markets
its products under the brand name "Porter-Cable" through
independent distributors, mass merchandisers and home
centers.

Pumps and Pumping Systems. The Registrant, through its
F.E. Myers Co. Division of McNeil (Ohio) Corporation (Myers),
manufactures and markets a wide variety of pumps for
residential, environmental engineering, and industrial use.
Products are marketed by field sales representatives employed
by Myers and are distributed through a network of distributors,
wholesalers, dealers, and installers. In addition, Myers
distributes products to the do-it-yourself market for retail sale
through homecenter retailers and hardware stores under the
names "Water Ace" and "Shur Dri".

Competitive conditions.

Delta participates in the middle range of the overall market for
general purpose woodworking machinery. The addressed
market is focused on high quality and feature oriented
products for the Home Shop, Contractor, and Small Shop
markets. In general, Delta produces a full line of woodworking
machinery for its addressed market. Delta's numerous
competitors do not offer a similar full product line over the
range of Delta's addressed market. Competitors do have
individual products which compete with certain of Delta's
products. Competition in this market focuses on quality,
features and service and at the lower end of Delta's product
offering, price.

Porter-Cable competes in the professional portable electric tool
market which is highly competitive. Porter-Cable faces six
major competitors across its addressed market. Product
innovation, features, quality, performance, delivery and service
are the most significant competitive factors. Porter-Cable is
beginning to address the higher end of the do-it-yourself
market where price is a factor.

Myers' market is pumps and pumping systems. Myers faces
several major competitors across its product lines. Price,
delivery, and quality are significant competitive factors.
Myers is beginning to address the higher end of the do-it-
yourself market.

Description of the General Industrial Equipment Segment:

Products and marketing.

The following table sets forth, for each of the last three years,
the General Industrial Equipment segment net sales by
product class as percentages of consolidated net sales.
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Electrical Enclosures
and Wireways 18% 17% 18%
Sporting Ammunition 10 10 10
Industrial Lubricating Systems
and Material Dispensing
Equipment 6 7 7
Automotive Service Equipment 6 5 4
Total Segment 40% 39% 39%
</TABLE>
Electrical Enclosures and Wireways. Through the Hoffman
Engineering Company division of Federal-Hoffman, Inc.
(Hoffman Engineering), the Registrant manufactures
enclosures and wireways for electrical and industrial
instrumentation applications and markets these products
primarily through independent manufacturer's representatives
and electrical and electronic equipment distributors throughout
North America and the United Kingdom.

Sporting Ammunition. Through the Federal Cartridge
Company division of Federal-Hoffman, Inc. (Federal Cartridge),
the Registrant manufactures and markets sporting and law
enforcement ammunition, and components. These products
are distributed throughout the United States through a network
of distributors and buying organizations for retail sale; directly
to large retail chains; and directly to law enforcement agencies
(governmental).

Industrial Lubricating Systems and Material Dispensing
Equipment. The Registrant, through its Lincoln Industrial
division of McNeil (Ohio) Corporation (Lincoln Industrial),
manufactures components and designs systems for manual
and automatic delivery of measured quantities of lubricants for
industrial applications. Lincoln Industrial also manufactures
components and designs, fabricates, and installs high-volume
liquid and semi-solid dispensing systems. Both segments
serve original equipment and retrofit markets. Lubricating and
materials dispensing systems are marketed in the United
States by approximately 100 specially qualified systems
distributors with design, installation, and service capability.
Basic lubricating equipment and accessories are marketed
through industrial supply and specialty distributors. A special
direct sales group markets a wide variety of Lincoln Industrial
products to original equipment manufacturers in a variety of
industries. Lincoln Industrial also manufactures lubricating
components and systems at its facility in Walldorf, Germany for
distribution to European, Middle East, Far East and African
markets, and to a lesser extent to the United States. The
remainder of the world market, including the Pacific Rim, is
served from Lincoln Industrial's St. Louis, Missouri
manufacturing facility.

Automotive Service Equipment. The Registrant, through its
Lincoln Automotive division of McNeil (Ohio) Corporation
(Lincoln Automotive), manufactures and markets lubrication,
repair, and service equipment for a broad range of vehicles.
Most products are sold through a key group of approximately
600 aftermarket wholesalers. Certain lubricating equipment,
tools, and jacks and lifting equipment are sold under private
label programs. Garage, service station, car dealership
service department, and fast oil change lubricating systems
are marketed through petroleum equipment and service
distributors with design and installation capability.

Competitive conditions.

Hoffman Engineering is the largest North American
manufacturer of electrical enclosures and wireways, having a
market share estimated to be about 25%. It is currently the
only manufacturer with national distribution and its competitors
are generally smaller, regional manufacturers. Hoffman
Engineering also participates in the North American electronic
enclosures market, facing competition from a large number of
firms, with three or four established firms leading the market.
In both markets, the most significant competitive factors are
product innovation, service, quality, breadth of product line,
and delivery. Price is the most significant factor for certain
commodity products.

Federal Cartridge and its two primary competitors, Winchester
and Remington, have a combined market share of
approximately 90% in the U.S. sporting ammunition market,
with the balance coming from smaller domestic competitors
and foreign ammunition manufacturers. Price, terms, delivery,
and quality are significant competitive factors.

Lincoln Industrial and Lincoln Automotive face three to five
major competitors and several smaller competitors across their
product lines. Competition involving industrial lubricating
systems and material dispensing equipment tends to center
around quality, systems capability, and application knowledge.
Price becomes a more significant competitive factor for vehicle
servicing equipment.

Description of the Paper Products Segment:

Products and marketing.

The following table sets forth, for each of the last three
years, the Registrant's net sales ($ millions), percent of
consolidated net sales and tons shipped (thousands) for each
paper product class.
<TABLE>
Years Ended December 31
<CAPTION>
1993 1992 1991
$ % Tons $ % Tons $ % Tons
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Coated 147.8 11 227 143.7 11 237 150.0 13 220

Uncoated 233.8 18 227 231.0 19 223 216.2 18 206

Consolidated 381.6 29 454 374.7 30 460 366.2 31 426

Super-
calendered FN1 71.5 116 75.1 111 83.8 116

Total 453.1 570 449.8 571 450.0 542
</TABLE>
[FN]
<F1>
FN1 Lake Superior Paper Industries is a joint venture mill in
Duluth, Minnesota; only 50% of the joint venture's sales and
tonnage are included. Since this joint venture is accounted for
on the equity method, its sales are not included in
consolidated sales.

Coated Paper. The Registrant, through its subsidiary Niagara
of Wisconsin Paper Corporation (Niagara), manufactures
coated groundwood publication-grade paper (nos. 4 and 5)
used for applications requiring high-resolution printing and
reproduction of color pictures, such as magazines, periodicals,
catalogs, and general commercial printing. These papers are
coated and finished to either a gloss or suede surface. Direct
sales to printers and end users represent approximately 20%
of shipments; remaining sales, which generally are in smaller
quantities, are made through paper merchants.

Uncoated Papers. Cross Pointe Paper Corporation (Cross
Pointe), a subsidiary of the Registrant, through its subsidiaries,
Miami Paper Corporation and Flambeau Paper Corp.,
manufactures a variety of uncoated papers and operates a
centralized converting and distribution operation (IDC) in West
Chicago, Illinois. Of Cross Pointe's total paper production,
60% is commercial printing, 24% is text and cover, 12% is
book, and the remainder is premium writing, specialty and
other paper. Most of the volume is sold through merchants.
Currently, about 45% of total shipments are made from the
IDC. Cross Pointe has adopted long-term strategies of
increased shipments of stocked, value-added grades,
enhanced product developments and continued increases in
quality. As a part of this program, Cross Pointe has become
one of the leaders in recycled grades.

Supercalendered (SCA) Printing and Publication Grade
Papers. The Registrant has a 50% interest in a joint venture,
Lake Superior Paper Industries (Lake Superior), which
produces supercalendered paper known as SCA. End use
markets include magazine publication, catalogues and
advertising inserts. SCA is sold directly to printers and end
users through Lake Superior's own sales and marketing
personnel.

Competitive conditions.

The Paper Products segment output of Niagara and Cross
Pointe is sold in highly competitive markets with between 10
to 15 competitors in each. Many of these competitors are
substantially larger corporations having greater financial
resources, production capacity and, in many cases, captive
sources of "kraft" pulp and merchant distribution. Lake
Superior is the largest North American producer of SCA, but
is subject to substantial competition from European
manufacturers, and makers of other grades of printing and
publication paper. Quality, innovation and service are
significant competitive factors in the markets served by the
Paper Products segment. The Registrant has emphasized
service, quality, product innovation, and environmental
products to meet customer needs, and has developed long-
term relationships with many suppliers and customers.

Raw materials.

The raw materials used in the manufacture of paper are
bleached kraft pulps, pulp substitutes, pulpwood, groundwood
pulp, waste paper, certain chemicals, clays, starches, and
additives. The Registrant does not own its own timberlands or
manufacture its own kraft pulp.

Kraft pulp, which comprises about 35% of the Registrant's fiber
needs (including the Registrant's share of Lake Superior), is
supplied by several pulp manufacturers, principally under long-
term contracts. The balance of fiber needs, comprised
primarily of groundwood pulp, sulphite pulp and secondary
fiber (pulp recovered by recycling waste paper), is produced at
the various mills. The Registrant has recently installed or
expanded its recycled fiber capacity at its Cross Pointe mills
and has invested in a joint venture recycled pulp facility in
Duluth, Minnesota.

The Registrant also purchases chemicals, clays, logs for pulp,
waste paper, and other paper-making components from
various sources. Adequate supplies of these materials are
expected to be available to meet the Registrant's needs.

Backlog.

The following table shows backlog (in days) and approximate
sales value (at average selling price) at December 31:
<TABLE>
<CAPTION>
1993 1992 1991
Days ($000) Days ($000) Days ($000)
<S> <C> <C> <C> <C> <C> <C>
Coated Paper 8 $ 3,175 17 $ 6,808 7 $ 2,629

Uncoated Paper 8.5 5,442 5 3,210 5 3,175

SCA Paper 32 12,494 35 15,066 33 15,260
</TABLE>
A substantial portion of paper sales are produced to meet
specific customer orders. Although the level of backlogs
provides some indication of the strength of the paper markets,
other factors such as the trend of retail sales and customer
and printer inventory levels must be considered. The current
backlog, especially coated and uncoated, is less than desired.
All backlogs are expected to be filled within the current year.

Information Regarding All Segments:

Working capital items.

The Specialty Products and General Industrial Equipment
businesses offer extended payment terms to a significant
number of customers, requiring these subsidiaries to carry a
significant amount of receivables. The Registrant has not
incurred significant losses in carrying these receivables.
Federal Cartridge's working capital builds from January
through September as inventories are increased to meet third
quarter shipping schedules and receivables increase due to fall
dating for early order programs used in the sporting
ammunition business. Management continues to focus on
reducing working capital requirements through management of
receivable and inventory levels.

Status of new products.

The industries in which the segments participate are
essentially mature and do not experience the introduction of
many products that materially change the nature of the
industry. Individual manufacturers generally make
improvements or apply new technologies to existing products.

Raw materials.

The raw materials used in the manufacturing process include
grey iron (castings), copper, aluminum (diecast), steel (bar and
sheet), and plastic. Federal Cartridge uses gunpowder,
primers, brass, lead and steel in its production of ammunition.
Selected castings, subassemblies, and components are also
purchased. The supply of all raw materials and components
is currently adequate.

Less than 5% of portable electric tool sales are produced by
outside sources in Western Europe and imported under the
Porter-Cable name. The supply of these tools is currently
adequate. Delta imports select tools in its product offering.
Design and engineering of these products is performed by
Delta. The manufacturing process is controlled and monitored
for most of these products in factories dedicated to Delta
production. Supply of these products is currently adequate
and timely.

Patents, trademarks, licenses, franchises and concessions.

The businesses own a number of U.S. and foreign patents and
trademarks. They were acquired over many years and relate
to many products and improvements which are of importance
to the business. No one patent or trademark is of material
importance to the company as a whole.

Brand names are a significant factor in market perception.
The Registrant has undertaken a corporate strategy to
strengthen and capitalize on brand awareness.

Seasonal aspects.

For the Registrant as a whole there is no strongly seasonal
aspect; however, sales of Federal Cartridge sporting
ammunition are generally higher in the third quarter due to
hunting season reorder demand.

Backlog.

The Specialty Products and General Industrial Equipment
segments normally do not experience backlogs for substantial
periods of time. The nature of the businesses emphasizes
maintaining inventories sufficient to satisfy customer needs on
a timely basis, and production and sourcing is geared towards
providing adequate inventories in order to minimize customer
back orders. Accordingly, backlogs are not material to
understanding the sales trends or manufacturing fluctuations
of the segment.

Dependence on limited number of customers.

None of the Registrant's segments is dependent on a single
customer or on a few customers. The loss of a limited number
of customers would not have a material adverse impact on any
of the segments. Since a portion of Specialty Products sales
are through large retail chains, a significant short-term impact
would be experienced if sales to these customers were
affected.

Government contracts.

The Registrant has no material portion of sales under
government contracts that may be subject to renegotiation of
profits or termination of contracts at the election of the
government.

Environmental matters.

The Registrant is subject to federal and state pollution control
and hazardous waste laws and regulations in all jurisdictions
in which it has operating facilities. The Registrant believes that
its ongoing operations are in substantial compliance with
existing environmental regulations other than for infrequent
permit exceedances for air and water emissions at some of its
facilities. In addition to making ongoing capital expenditures
for maintenance, upgrading and closure of on-site waste
treatment facilities, the Registrant intends to continue its
program for implementation of manufacturing process and
configuration changes to achieve both manufacturing
efficiencies and an overall reduction in environmental impact
of its operations.

The Registrant's environmental control programs focus upon
air treatment facilities: including removal of particulates
generated by boilers used in the Registrant's paper businesses
and of volatile organic compounds used in the industrial
manufacturing businesses; waste water treatment, primarily in
the paper businesses; and landfills for solid waste disposal,
including sludge lagoons operated by some of the paper
businesses. The Registrant arranges for disposal of solid and
hazardous waste through licensed transporters at each of the
Registrant's facilities.

The Registrant's Niagara operation was notified by the
Michigan Department of Natural Resources (MDNR) by letter
dated March 7, 1994 that its sludge lagoons have been
operated in violation of various regulations and have caused
degradation of groundwater in the area. Niagara believes that
implementation of its currently pending closure plan, submitted
in 1990, should satisfy many of the concerns raised by MDNR,
although it is likely that Niagara will have to accelerate the
closing. No material adverse impact on Niagara's business is
anticipated but costs to close the lagoons in accordance with
the 1990 proposed plan would exceed $6 million.

The operating costs for maintaining compliance with
environmental regulations does not exceed 5% of operating
costs generally. The Registrant has adopted capital
expenditure programs for upgrading, maintaining and other
costs related to its waste treatment facilities. Such capital
expenditures were $7.6 million, $4.1 million, and $2.1 million
for the years ending December 31, 1993, 1992, and 1991,
respectively. Projected future expenditures are $1.7 million
and $3.2 million for fiscal years 1994 and 1995 respectively.

Over the past three years, the Registrant's paper businesses
have invested a total of $18.2 million in constructing,
upgrading and expanding their recycled fiber facilities. This
program has reduced land disposal of office wastepaper while
giving the Paper Products segment businesses a strong
presence in rapidly growing recycled paper markets.

Employees.

As of December 31, 1993, the Registrant and its subsidiaries
employed approximately 8,300 persons, of which 2,470 were
represented by unions having collective bargaining
agreements.

Labor contracts negotiated in 1993 were: International
Molders and Allied Workers - Ashland, Ohio (extended to April
1, 1994), 49 employees; Patternmakers-Ashland, Ohio
(extended to September 2, 1995), 7 employees; United
Paperworkers - Niagara, Wisconsin (extended to January 31,
1995), 470 employees; and International Union of Electrical
Workers - Jonesboro, Arkansas (extended to April 4, 1996),
175 employees.

Contracts expiring in 1994: Clerical Workers - Niagara,
Wisconsin (expires May 14, 1994), 25 employees; International
Molders and Allied Workers - Ashland, Ohio (expires April 1,
1994), 49 employees; and Molders and Allied Workers -
Guelph, Ontario, Canada (expires July 1, 1994) 7 employees.

The Registrant considers its employee relations to be good
and feels future contracts can be negotiated for the benefit of
the business and the employees.

(d) Financial Information about Foreign Operations.

The Registrant operates primarily in the United States and
North America. Operations outside of the United States in
1993 represented less than 10% of consolidated net sales,
operating income, and identifiable assets. As a result of the
acquisition of the Schroff Group, the Registrant believes that
beginning in 1994, operations outside of the U.S. will represent
approximately 15% of consolidated net sales.

<PAGE>

Item 2. Properties

The Registrant's corporate offices, located at 1500 County
Road B2 West, St. Paul, Minnesota 55113-3105, are leased
and consist of approximately 22,000 square feet; the lease
expires in December 1999. The Registrant also has an option
to terminate the lease during the period December 1994 to
June 1995. Information about the Registrant's principal
manufacturing facilities and other properties is presented
below by industry segment. These facilities are adequate and
suitable for the purposes they serve. Unless noted all facilities
are owned.

In addition, the Company is in the process of expanding into
Mexico through the use of a Maquiladora facility. Construction
will commence and will be completed in 1994.

Specialty Products Segment
<TABLE>
<CAPTION>
SUBSIDIARY/ APPROXIMATE
DIVISION LOCATION PRIMARY USE SQUARE FEET
<S> <C> <C> <C>
Porter-Cable
FN1 Jackson, Manufacturing, 357,000
Tennessee Distribution,
and Office

Delta
FN2 Pittsburgh, Office and 34,000
Pennsylvania Product
Development

Tupelo, Manufacturing 333,000
Mississippi and Office

FN3 Memphis, Distribution 245,000
Tennessee and Office

FN4 Guelph, Distribution 57,000
Ontario and Office

Taichung, Office and 1,000
Taiwan Product
Development

F.E. Myers
Ashland, Manufacturing, 412,000
Ohio Distribution,
and Office

Kitchener, Distribution, 26,000
Ontario Assembly and
Office
</TABLE>
[FN]
FOOTNOTES:
<F1>
FN1 Leased for a five-year term expiring in 1998.
<F2>
FN2 Leased for a five-year term expiring in 1994.
<F3>
FN3 Leased for a five-year term expiring in 1996.
<F4>
FN4 Leased under a three-year lease which expired in 1991, which is
being renewed under one-year options (limited to seven one-year
periods).

<PAGE>
General Industrial Equipment Segment
<TABLE>
<CAPTION>
SUBSIDIARY/ APPROXIMATE
DIVISION LOCATION PRIMARY USE SQUARE FEET
<S> <C> <C> <C>
Hoffman Engineering
Anoka, Manufacturing 814,000
Minnesota and Office

FN1 Brooklyn Center, Manufacturing 128,000
Minnesota and Office

FN2 Cwmbran, Wales Manufacturing 26,000
United Kingdom and Office

Federal Cartridge
Anoka, Manufacturing 679,000
Minnesota and Office

Richmond, Manufacturing 41,000
Indiana and Office

Lincoln Industrial
St. Louis, Manufacturing 565,000
Missouri and Office

Walldorf, Manufacturing 117,000
Germany and Office

Antwerp, Distribution 8,000
Belgium and Office

Lincoln Automotive
FN3 Jonesboro, Manufacturing 426,000
Arkansas and Office

FN4 Nogales, Sonora Manufacturing 35,000
Mexico

Mississauga, Distribution 30,000
Ontario and Office

Birch Tree, Manufacturing 8,000
Missouri

Schroff GmbH
FN5 Straubenhardt, Manufacturing 523,000
Germany

Schroff S.A.
FN6 Betschdorf, Manufacturing 210,000
France and Warehouse

Schroff U.K.
Hemel Hempstead, Manufacturing 37,000
England

FN7 Hemel Hempstead, Manufacturing 22,000
England

Schroff, Inc.
Warwick, Manufacturing 80,000
Rhode Island and Office

FN8 Warwick, Office and 18,000
Rhode Island Assembly

Schroff K.K.
Miewa-Cho, Manufacturing 23,500
Japan
</TABLE>
[FN]
FOOTNOTES:
<F1>
FN1 Leased for a 25-year term expiring in 1996, with options to renew
for two ten-year terms.
<F2>
FN2 Currently leased under a month-to-month lease while a longer term
lease is negotiated.
<F3>
FN3 Includes approximately 51,000 sq. ft. warehouse and 3,000 sq. ft.
office leased for a three-year term which expires in 1995.
<F4>
FN4 Leased for a six-year term expiring in 1999.
<F5>
FN5 A small portion of this total facility has been leased for a 30-year
term expiring in 2011.
<F6>
FN6 Leased under two lease agreements expiring in 2002 and 2005.
Both leases include a purchase option.
<F7>
FN7 Leased for a twenty-year term expiring in 2011.
<F8>
FN8 Leased for a ten-year term expiring in 2000. This lease includes a
purchase option.

<PAGE>

Paper Products Segment

<TABLE>
<CAPTION>
APPROXIMATE
ANNUAL
CAPACITY
SUBSIDIARY/ OF MILL
DIVISION LOCATION PRIMARY USE (NET TONS)
<S> <C> <C> <C>
Niagara
FN1 Niagara, Manufacturing 235,000
Wisconsin and Office

Cross Pointe
FN2 St. Paul, Office
Minnesota

FN3 West Chicago, Distribution and
Illinois Paper Converting

West Carrollton, Manufacturing 110,000
Ohio and Office

FN4 Park Falls, Manufacturing 125,000
Wisconsin and Office

Dayton, Manufacturing FN5
Ohio and Office

Lake Superior
FN6 Duluth, Manufacturing 240,000
Minnesota and Office
</TABLE>
[FN]

FOOTNOTES:
<F1>
FN1 Certain pulp and paper production equipment is leased. One lease
expires in 1996 with options to renew for two terms of three years each.
Another lease expires in 1999 with options to renew for three terms of two
years each. The third lease expires in 2006 with an option to purchase
after seven years and options to renew for up to eight years . Under
each lease, Niagara has the option to purchase the equipment at the
then-current market value at the end of the initial term or at the end of
each renewal term.
<F2>
FN2 Consists of 10,700 square feet of space under a lease expiring in
1997.
<F3>
FN3 Consists of 202,000 square feet under a lease expiring in 1998 and
253,000 square feet under a lease expiring in 2001.
<F4>
FN4 The Flambeau mill power plant is leased until 2007 with options to
renew for three terms of five years each.
<F5>
FN5 Purchased December 1993 and not currently in use. Projected
capacity is approximately 45,000 net tons.
<F6>
FN6 The production equipment is leased under 25-year leases through
2012 with options to renew for periods of five to seven years and options
to purchase the equipment in 1997, and at the expiration of the lease
term and of any renewal term.

<PAGE>

Item 3. Legal Proceedings.

The Registrant or its subsidiaries have been made parties to
actions filed, or have been given notice of potential claims, by
state and federal enforcement agencies asserting liability for
past disposal of hazardous wastes, generally in conjunction
with numerous other codefendants or potential codefendants
or asserting responsibility for undertaking remedial action. In
addition, various other legal actions, governmental
proceedings, and claims are pending against the Registrant or
its subsidiaries.

Major matters which had or may have an impact on the
Registrant are discussed below. The Registrant believes that,
because of the reserves, insurance coverage and U.S. Army
indemnification discussed below, it is remote that the outcome
of such matters will have a material adverse effect on the
Registrant's financial position or future results of operations,
based on current circumstances known to the Registrant.

Federal-Hoffman TCAAP Facility. Federal-Hoffman, Inc.
(Federal-Hoffman) is a party to certain litigation and claims
arising out of allegedly improper disposal of hazardous wastes
generated at the Twin Cities Army Ammunition Plant (TCAAP)
in northern Ramsey County, Minnesota, which Federal
Cartridge, a division of Federal-Hoffman, maintains pursuant
to a contract with the U.S. Army. While remediation of
affected sites continues, the underlying claims or litigation are
the subject of settlement agreements or consent orders and
are resolved in large part. In light of previous indemnification
of Federal Cartridge by the U.S. Army or Federal-Hoffman's
insurer for all settlements and costs incurred in TCAAP-related
matters, the Registrant believes that liability, if any, to its
Federal-Hoffman subsidiary arising from its operation of the
TCAAP facility will not be material.

Federal-Hoffman, Inc. Sites. Federal Cartridge, a division of
Federal-Hoffman, has been named by the EPA as a Potentially
Responsible Party (PRP) in connection with two environmental
sites based on claims that Federal Cartridge sent material to
these sites. Based on current information available to it, the
Registrant believes that these matters are unlikely to result in
material future liability.

NL Industries/Taracorp. The EPA issued an administrative
order effective January 18, 1991 to Federal Cartridge and 48
other entities to compel the clean-up of the NL
Industries/Taracorp site in Granite City, Illinois. Federal
Cartridge sent virgin lead to a facility on the site to be formed
into lead shot. The EPA has identified over 300 other PRPs
and estimates the cost of remediating the site to be
approximately $30 million.

On July 31, 1991, EPA sued 11 of the 49 PRPs who were
issued the January 1991 order, seeking enforcement of the
January 1991 order and reimbursement of the EPA's costs,
plus fines and penalties. Federal Cartridge and three others
were not named in the lawsuit because of pending settlement
discussions. Federal Cartridge and one other supplier of virgin
materials have offered to pay a total of $1,000,000, of which
$490,000 is Federal Cartridge's share. The EPA has indicated
that it anticipates submitting a consent decree for court
approval before May 1, 1994. Federal Cartridge has received
notice that several nonsettling parties oppose the settlement.

Federal Cartridge's insurer has been notified of this matter and
has declined to indemnify or defend Federal Cartridge with
respect to this matter at this time.

Aqua-Tech. The EPA issued an administrative order, effective
April 29, 1992 to Federal-Hoffman and 96 other entities, to
compel the cleanup of the Aqua-Tech Environmental, Inc. site
in Greer, South Carolina. Federal Cartridge shipped waste
from its manufacturing process to this site several times in
recent years. Federal-Hoffman is working with a group of
other PRPs to negotiate with the EPA regarding the cleanup
of the site. A surface cleanup of the site is complete. Under
interim allocations by the PRP group, Federal Cartridge paid
$442,000 toward the cost of the surface cleanup. Under
current final allocation proposals, Federal-Hoffman anticipates
receiving a credit for some portion of that amount.

The PRP group anticipates beginning a study of the soil and
groundwater to determine the extent of subsurface
contamination. The cost of such study, any necessary
remediation and the size of allocation, if any, to Federal-
Hoffman is unknown to the Registrant at this time. Federal-
Hoffman however, anticipates a minimal allocation in the
subsurface action due to the nature of its waste and the fact
that virtually all of its waste was accounted for and removed
during the surface remediation.

In October 1992, Hoffman Engineering, a division of Federal-
Hoffman, was also named as a PRP in connection with the
Aqua-Tech site. Hoffman settled out of the surface removal as
a de minimis party, and anticipates doing the same for the
subsurface remediation.

Porter-Cable Corporation. In November 1993, the Tennessee
Department of Environment and Conservation (TDEC) issued
to Porter-Cable Corporation (Porter-Cable) and Rockwell
International Corporation an administrative order requiring
them to investigate, and if necessary, clean up alleged
groundwater contamination at a manufacturing facility located
in Madison County, Tennessee. The facility was acquired by
Porter Cable from Rockwell International Corporation in 1981.
Porter Cable has served notice on Rockwell of Porter Cable's
intent to seek indemnification from Rockwell, based upon
Tennessee and Federal law, for all costs and expenses related
to investigation and cleanup of the site. The Registrant
believes that this matter is unlikely to result in material liability
or material changes in operations. No estimate of the
projected response cost liability can be made based on
information currently known to the Company.

Delta International Machinery. In January 1993, Beaver-Delta
Machinery Corp. (Beaver-Delta), a former subsidiary of Delta
International Machinery Corp., and three other parties were
sued by a commercial developer and current owner of real
estate in Guelph, Ontario that Rockwell International previously
owned and that was acquired by Beaver-Delta in 1984.
Trichlorethylene (TCE) and other contamination of soil and
groundwater has been alleged. Plaintiff seeks past and future
cleanup costs, as well as increased costs and lost profits
allegedly suffered. Plaintiff alleges in the action that it has
spent Cdn. $160,000 to remediate the property and seeks
damages in the amount of Cdn. $5.5 million. Preliminary
investigation indicated that Beaver-Delta did not use TCE
during the short period that it owned the property at issue.
Beaver-Delta has served notice on Rockwell of its intent to
seek indemnification from Rockwell for all costs related to this
matter. Plaintiff has not pursued this lawsuit since its
commencement. The Registrant believes that this matter is
unlikely to result in material liability.

Niagara of Wisconsin Paper Corporation. In January 1994, the
State of Wisconsin filed an enforcement action against Niagara
involving allegations of particulate emissions from Niagara's
coal processing plant in excess of limits set in its permit.
Emissions at issue occurred at various times between August
1992 and May 1993. The State is seeking monetary
forfeitures, penalties, injunctive relief and costs for the alleged
violations. The State's settlement demand of $120,000 has
been rejected by Niagara. The Registrant believes that this
matter is unlikely to result in liability to Niagara that is material
to the Registrant's overall financial condition.

Cross Pointe Paper Corporation. The Miami mill of Cross
Pointe Paper Corporation (Miami) is currently discussing with
the State of Ohio alleged violations of Miami's water pollution
control (NPDES) permit which occurred from 1988 to mid
1992. The State is currently seeking a settlement in an
amount of $220,000. Miami's current NPDES permit provides
an allowance until 1995 to take corrective action to eliminate
violations.

IWD/Cardington Site. In February 1994, Miami was named a
PRP in connection with the IWD/Cardington landfill in Moraine,
Ohio. Waste haulers with whom Miami contracted to transport
its flyash and paper and wood waste allegedly took it to this
landfill for some time prior to its closure in 1980. The EPA has
identified 22 other PRPs at this time. The cost of remediation
of the site is estimated to be approximately $12 to $15 million.
Miami is investigating its alleged involvement at this site.

McNeil (Ohio) Corporation. F.E. Myers (Myers), a division of
McNeil (Ohio) Corporation, has received notice of a claim of
contamination of soil surrounding an underground storage tank
on property owned by Myers prior to September 1986. An
estimate of $125,000 has been given to perform remediation
of the alleged contamination. The Registrant believes that this
matter is unlikely to result in liability to Myers that is material
to the Registrant's overall financial condition.

California Proposition 65 Notice. In February 1994, Myers
received a notice pursuant to California Health and Safety
Code Section 25249 (Proposition 65) regarding alleged
violations arising from discharge of lead from submersible
water pumps into drinking water since February 27, 1988.
Two private environmental groups sent the notice to Myers
and three other pump manufacturers and one pump distributor.
Under Proposition 65, the penalty for each violation is $2,500
per day. Myers is currently investigating the claims set forth
in this notice.

Product Liability Claims. As of March 4, 1994, the Registrant
or its subsidiaries are defendants in approximately 217 product
liability lawsuits and have been notified of approximately 129
additional claims. The Registrant maintains an active case
management and insurance review program to closely
supervise these and other litigation matters. The Registrant
has had and currently has in place insurance coverage it
deems adequate for its needs; accounting reserves covering
the deductible portion of all liability claims have been
established and are reviewed on a regular basis. The
Registrant has not experienced unfavorable trends in either the
severity or frequency of product liability claims.

McNeil Asbestos Lawsuits. Since 1987, McNeil and a large
number of manufacturers or installers of asbestos-containing
products have been named as codefendants in lawsuits
involving claims by 6,340 tireworkers seeking damages for
personal injuries allegedly caused by exposure to asbestos or
talc in various tire plants. A former division of McNeil's
predecessor, McNeil Corporation, supplied tire curing presses
for which asbestos may have been used as an insulating
material. Of those claims against McNeil, 1,109 have been
dismissed, 4,802 have been settled, with an average
settlement amount of $1,400, and 595 claims remain. The
evidence developed to date does not suggest that future
settlements would be higher than the historical average. In
addition, significant dismissals are anticipated to occur without
any indemnity payments.

Ninety percent of the cost of defending and settling these
actions has been paid by McNeil's insurance carriers, with the
balance being paid by McNeil. The Registrant believes that its
carriers will continue to cover a comparable portion of defense
costs and damages, if any, for which McNeil might be found
liable in the future, and self-insurance reserves are adequate
to cover any remaining portion. Considering the existence of
factual and legal defenses to the pending suits and the
applicable insurance coverage, the Registrant believes that
these suits are unlikely to result in material liability.

<PAGE>

Item 4. Submission of Matters to a Vote of Security Holders.

During the fourth quarter, no matter was submitted to a vote of
security holders.

<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

The following are the executive officers of the Registrant.
Their term of office extends until the next annual meeting of
the Board of Directors, scheduled for April 20, 1994, or until
their successors are elected and have qualified.

Winslow H. Buxton Age 54

Chairman since January 15, 1993; President and Chief
Executive Officer since August 1992; Chief Operating
Officer, August 1990 - August 1992; Vice President -
Paper Group, January 1989 - August 1990.

Joseph R. Collins Age 52

Senior Vice President - Specialty Products since August
1991; Acting Chief Financial Officer, June 1993 - March
14, 1994; President, Delta International Machinery
Corporation (subsidiary of the Registrant), October 1984 -
August 1991.

Ronald V. Kelly Age 57

Senior Vice President - Paper Products since August
1991; Vice President - Specialty Products, March 1989 -
August 1991; President, Lake Superior Paper Industries (a
joint venture in which the Registrant is a 50% owner),
January 1986 - March 1989.

Gerald C. Kitch Age 56

Senior Vice President - General Industrial Equipment since
August 1991; Vice President - General Industrial
Equipment, March 1989 - August 1991.

Allan J. Kolles Age 62

Vice President, Human Resources since March 1985.

Roy T. Rueb Age 53

Vice President, Treasurer since October 1986 and Acting
Secretary since June 1993.

Mark T. Schroepfer Age 47

Vice President, Controller since January 1990; Corporate
Controller, March 1987 - January 1990.

David D. Harrison Age 46

Senior Vice President and Chief Financial Officer since
March 15, 1994; Vice-President, Finance and Information
Technology of the GE Canada Appliance Component subsidiary of
General Electric, August 1992 - March 1994; Vice
President, Finance and Deputy Executive Officer of the GE
Europe Lighting Component subsidiary of General Electric,
January 1990 - July 1992; and Director of Finance,
Europe, Controller, and various other financial positions for
Borg Warner/GE U.S. Plastics Component, February 1972 -
January 1990.

Richard W. Ingman Age 49

Vice President, Corporate Development, August 1989 -
February 1994; President of Ingman, Inc. (business
training and consulting), January 1987 - August 1989.
Effective March 1, 1994, Mr. Ingman was named President
of Hoffman Engineering Division of Federal-Hoffman, Inc.
(subsidiary of Registrant).

There is no family relationship between any of the officers or
directors.

<PAGE>

PART II

Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters.

Item 6. Selected Financial Data.

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.

Item 8. Financial Statements and Supplementary Data.

For information required under Items 5 through 8, see the
Registrant's Annual Report to Shareholders for the year ended
December 31, 1993, as referenced on page 2 of this report.

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.

No changes in accountants or disagreements between the
Registrant and its accountants regarding accounting principles
or financial statement disclosures have occurred within the 24
months prior to the date of the Registrant's most recent
financial statements.

PART III

Item 10. Directors and Executive Officers of the Registrant.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and
Management.

For information required under Items 10 through 12, see the
Registrant's Proxy Statement for the 1994 Annual Meeting of
Shareholders referenced on page 2 of this report, and
"Executive Officers of the Registrant" found after Item 4 of this
report.

Item 13. Certain Relationships and Related Transactions.

No relationships or transactions existed that require disclosure
under Item 13.

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.

(a) Financial Statements, Financial Statement Schedules, and
Exhibits.

1. The following consolidated financial statements of Pentair,
Inc. and subsidiaries, together with the Report of Independent
Auditors, found on pages 24 to 37 of the Registrant's Annual
Report to Shareholders for the year ended December 31,
1993, are hereby incorporated by reference in this Form 10-K.

Page of Annual Report
Report of Independent Auditors 24

Consolidated Statement of Income
for Years Ended December 31, 1993,
1992 and 1991 25

Consolidated Balance Sheet as of
December 31, 1993 and 1992 26 - 27

Consolidated Statement of Cash Flows
for Years Ended December 31, 1993,
1992 and 1991 28

Notes to Consolidated Financial
Statements 29 - 37

2. The additional financial data listed below is included as
exhibits to this Form 10-K Report and should be read in
conjunction with the consolidated financial statements
presented in the 1993 Annual Report to Shareholders.
Schedules not included with this additional financial data have
been omitted because they are not required or the required
information is included in the financial statements or the notes.

Independent Auditors' Report

Schedules for the years ended December 31, 1993, 1992 and
1991:

V - Property, Plant and Equipment

VI - Accumulated Depreciation and Amortization of Property,
Plant and Equipment

VIII - Valuation and Qualifying Accounts

X - Supplementary Income Statement Information

3. The following exhibits are included with this Report on
Form 10-K (or incorporated by reference) as required by Item
601 of Regulation S-K.

Exhibit
Number Description

(3.1) Restated Articles of Incorporation as amended
through April 25, 1989.

(3.2) Resolution Establishing and Designating $7.50
Callable Cumulative Convertible Preferred
Stock, Series 1988, as a series of Preferred
Stock of Pentair, Inc.

(3.3) Resolution Establishing and Designating 8%
Callable Cumulative Voting Convertible
Preferred Stock, Series 1990, as a series of
Preferred Stock of Pentair, Inc.

(3.4) Second Amended and Superseding By-Laws as
amended through January 19, 1993.

(4.1) Restated Articles of Incorporation, as amended,
and Second Amended and Superseding By-
Laws, as amended (see Exhibits 3.1 - 3.4
above).

(4.2) Rights Agreement dated December 26, 1986
between the Company and First Trust
Company, Inc.

(4.3) Amendment to Rights Agreement dated July 22,
1988 between the Company and Norwest Bank
Minnesota, National Association, as successor
Rights Agent (Amending Exhibit 4.2).

(4.4) Second Amendment to Rights Agreement dated
December 15, 1989 between the Company and
Norwest Bank Minnesota, National Association,
as successor Rights Agent (Amending Exhibit
4.2).

(4.6) First Amendment to Bid Loan Agreement dated
January 1, 1991 between the Company,
Continental Bank N.A. for itself and as Agent,
Morgan Guaranty Trust Company of New York,
Morgan Bank (Delaware), First Bank National
Association, Norwest Bank Minnesota, N.A., and
NBD Bank, N.A. (Amending Exhibit 4.5).

(4.7) Second Amendment to Bid Loan Agreement
dated as of February 11, 1994 between Pentair,
Inc., Continental Bank N.A. for itself and as
Agent, Morgan Guaranty Trust Company of New
York, J.P. Morgan Delaware, First Bank National
Assocation, Norwest Bank Minnesota, N.A., and
NBD Bank, N.A. (Amending Exhibit 4.5).

(4.9) $45,000,000 Facility Agreement dated as of
February 11, 1994 between Pentair, Inc., First
Bank National Association, for itself and as
Agent, and Norwest Bank Minnesota N.A.

(4.10) DM 115,000,000 Facility Agreement dated as of
February 11, 1994 between EuroPentair, GmbH
as Borrower, Pentair, Inc., as Guarantor,
Morgan Guaranty Trust Company of New York
for itself and as Agent, Continental Bank N.A.,
for itself and as Agent, NBD Bank, N.A. and
Dresdner Bank.

(4.11) Restatement of Credit Agreement dated July 11,
1989 between Federal-Hoffman, Inc. and First
Bank National Association.

(4.12) Second Amendment to Restatement of Credit
Agreement dated as of January 19, 1993
between Federal-Hoffman, Inc., Pentair, Inc.,
and First Bank National Association (Amending
Exhibit 4.11) .

(4.13) $35,000,000 Note Purchase Agreement dated
March 25, 1991 between Pentair, Inc. and
Nationwide Life Insurance Company.

(4.14) $25,000,000 Note Purchase Agreement dated
December 13, 1991 between Pentair, Inc. and
Principal Mutual Life Insurance Company.

(4.15) $15,000,000 Note Purchase Agreement dated
November 1, 1992 between Pentair, Inc. and
Nationwide Life Insurance Company.

(4.16) $15,000,000 Note Purchase Agreement dated
January 15, 1993 between Pentair, Inc. and
Principal Mutual Life Insurance Company.

(4.17) $70,000,000 Senior Notes Purchase Agreement
dated as of April 30, 1993 between Pentair, Inc.
and United of Omaha Life Insurance Company,
Companion Life Insurance Company, Principal
Mutual Life Insurance Company, Nippon Life
Insurance Company of America, Lutheran
Brotherhood, American United Life Insurance
Company, Modern Woodmen of America, The
Franklin Life Insurance Company and Ameritas
Life Insurance Corp.

(10.1) Agreements dated February 8, 1978 and
February 9, 1982 between the Company and D.
Eugene Nugent.

(10.2) Agreement dated February 8, 1984 (Amending
Exhibit 10.1).

(10.3) Agreement dated December 17, 1985
(Amending Exhibit 10.1).

(10.4) Agreement dated May 7, 1990 (Amending
Exhibit 10.1).

(10.5) Company's Supplemental Employee Retirement
Plan effective June 16, 1988.

(10.6) Company's Restated Long-Term Executive
Performance Plan as amended to October 21,
1987.

(10.7) Company's 1982 Incentive Stock Option Plan.

(10.8) First Amendment to Incentive Stock Plan
(Amending Exhibit 10.10).

(10.9) Second Amendment to Incentive Stock Option
Plan (Amending Exhibit 10.10).

(10.10) Company's 1986 Nonqualified Stock Option
Plan.

(10.11) Company's 1990 Omnibus Stock Incentive Plan
(Superseding Exhibits 10.6 - 10.10 above
starting with 1990 grants).

(10.12) Company's Management Incentive Plan as
amended to January 12, 1990.

(10.13) Employee Stock Purchase and Bonus Plan as
amended and restated effective January 1,
1992.

(10.14) Company's Flexible Perquisite Program as
amended to January 1, 1989.

(10.15) Form of 1986 Management Assurance
Agreement (Revised 1990) between the
Company and certain executive officers.

(10.16) Company's Third Amended and Restated
Compensation Plan for Non-Employee Directors
as amended to January 1, 1992.

(10.17) Company's Outside Directors Nonqualified Stock
Option Plan dated January 22, 1988.

(10.18) First Amendment to Outside Directors
Nonqualified Stock Option Plan (Amending
Exhibit 10.17).

(10.19) Second Amendment to Outside Directors
Nonqualified Stock Option Plan (Amending
Exhibit 10.17).

(10.20) Pentair, Inc. Deferred Compensation Plan
effective January 1, 1993.

(10.21) Lake Superior Paper Industries Venture Council
By-Laws and Management Protocol.

(10.22) Second Amended and Restated Joint Venture
Agreement dated December 31, 1987 between
Pentair Duluth Corp. and Minnesota Paper,
Incorporated.

(10.24) Cash Deficiency Agreement dated December
31, 1987 among Pentair Duluth Corp., as Joint
Venturer, Associated Southern Investment
Company, as Owner Participant, The
Connecticut Bank and Trust Company, National
Association, as Indenture Trustee, and First
National Bank of Minneapolis, as Owner
Trustee. Cash Deficiency Agreements also
were entered into with respect to each of the
other four Owner Participants: Dana Lease
Finance Corporation, NYNEX Credit Company,
Public Service Resources Corporation, and
Southern Indiana Properties, Inc.

(10.25) Keepwell Agreement and Assignment dated
December 31, 1987 among Pentair, Inc., as
Sponsor, Pentair Duluth Corp., as Joint
Venturer, and First National Bank of
Minneapolis, as Owner Trustee; although First
Minneapolis executed this filed document as
Owner Trustee for Associated Southern
Investment Company, additional Keepwell
Agreements and Assignments were entered into
by First Minneapolis as Owner Trustee for the
other four Owner Participants listed in the
description of Exhibit 10.24 above.

(10.26) Definition of Terms for Financing Agreement
dated December 31, 1987 and the Transaction
Documents Referred to Therein: Sale and
Leaseback of Undivided Interest in Lake
Superior Paper Industries' Supercalendered
Paper Mill; although this filed document supplies
the definitions applicable to the agreements filed
as Exhibits 10.24 and 10.25 above, there were
four additional sets of definitions that supply the
definitions for the other sets of agreements
referred to in the descriptions of those Exhibits
with respect to the various Owner Participants.

(10.28) $56,499,982 Promissory Note dated March 7,
1990 of the Pentair, Inc. Employee Stock
Ownership Plan Trust, acting through State
Street Bank and Trust Company, as Trustee, to
the Company.

(11) Statement regarding computation of earnings
per share.

(13) Annual Report to Shareholders for period ended
December 31, 1993.

(21) Subsidiaries of Registrant.

(24) Consent of Deloitte & Touche.

(b) Reports on Form 8-K.

None.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

PENTAIR, INC.

By: Joseph R. Collins
Senior Vice President and
Chief Financial Officer

Dated: March 28, 1994

<PAGE>

Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has also been signed by the following
persons on behalf of the Registrant and in the capacities and
on the dates indicated.

By: Winslow H. Buxton
Chairman, President and
Chief Executive Officer, Director

Dated: March 28, 1994

By: George N. Butzow, Director
Dated: March 28, 1994

By: Harold V. Haverty, Director
Dated: March 28, 1994

By: Quentin J. Hietpas, Director
Dated: March 28, 1994

By: B. Kristine Johnson, Director
Dated: March 28, 1994

By: Walter Kissling, Director
Dated: March 28, 1994

By: H. William Lurton, Director

Dated: March 28, 1994

By: D. Eugene Nugent, Director
Dated: March 28, 1994

<PAGE>

INDEPENDENT AUDITORS' REPORT

Pentair, Inc.:

We have audited the consolidated financial statements of
Pentair, Inc. and subsidiaries as of December 31, 1993 and
1992, and for each of the three years in the period ended
December 31, 1993, and have issued our report thereon dated
February 11, 1994; such financial statements and report are
included in your 1993 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the
financial statement schedules of Pentair, Inc. and subsidiaries
listed in Item 14. These financial statement schedules are the
responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In
our opinion, such financial statement schedules, when
considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the
information set forth therein.

DELOITTE & TOUCHE
Saint Paul, Minnesota
February 11, 1994

<PAGE>
<TABLE>
SCHEDULE V
<CAPTION>
PENTAIR, INC. AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
($ Thousands)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
OTHER
BALANCE AT CHANGES BALANCE
BEGINNING ADDITIONS RETIRE- ADD AT END OF
OF PERIOD AT COST MENTS (DEDUCT) PERIOD

YEAR ENDED DECEMBER 31, 1991:
<S> <C> <C> <C> <C> <C>
Land & land
improvements $11,866 $830 $(865) $11,831
Buildings 63,925 4,776 $(91) (4,368) 64,242
Machinery &
equipment 357,198 54,446 (5,061) (5,622) 400,961
Construction
in progress-net 24,825 (10,632) (134) 14,059

TOTALS FN1 $457,814 $49,420 $(5,152) $(10,989) $491,093

YEAR ENDED DECEMBER 31, 1992:

Land & land
improvements $11,831 $325 $1,192 $13,348
Buildings 64,242 2,515 $(492) (2,143) 64,122
Machinery &
equipment 400,961 43,810 (7,533) 3,204 440,442
Construction
in progress-net 14,059 20,585 (659) 33,985

TOTALS FN2 $491,093 $67,235 $(8,025) $1,594 $551,897

YEAR ENDED DECEMBER 31, 1993:

Land & land
improvements $13,348 $995 $514 $14,857
Buildings 64,122 6,442 $(135) 3,645 74,074
Machinery &
equipment 440,442 73,345 (6,092) (1,129) 506,566
Construction
in progress-net 33,985 (7,361) (315) (189) 26,120

TOTALS FN3 $551,897 $73,421 $(6,542) $2,841 $621,617
</TABLE>
[FN]
<F1>
FN1 Column E includes the sale of the Accutec division of
Hoffman Engineering.
$ (13,495)
<F2>
FN2 Column E includes the sale of Invicta division of Delta
International Machinery
$ (11,833)
and FAS 109 tax adjusting entries.
$ 13,228
<F3>
FN3 Column E includes classification of F.E. Myers Foundry
from asset held for disposition
$ 3,887

<PAGE>
<TABLE>
SCHEDULE VI
<CAPTION>
PENTAIR, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
($ Thousands)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F

OTHER
BALANCE AT CHANGES BALANCE
BEGINNING ADDITIONS RETIRE- ADD AT END OF
OF PERIOD AT COST MENTS (DEDUCT) PERIOD

YEAR ENDED DECEMBER 31, 1991:

<S> <C> <C> <C> <C> <C>
Land & land
improvements $1,154 $516 $(87) $1,583
Buildings 12,790 3,457 $(50) (482) 15,715
Machinery &
equipment 180,303 40,742 (4,195) (1,355) 215,495

TOTALS FN1 $194,247 $44,715 $(4,245) $(1,924) $232,793

YEAR ENDED DECEMBER 31, 1992:

Land & land
improvements $1,583 $449 $(7) $2,025
Buildings 15,715 3,214 $(375) (1,094) 17,460
Machinery &
equipment 215,495 41,791 (6,331) (8,356) 242,599

TOTALS FN2 $232,793 $45,454 $(6,706) $(9,457) $262,084

YEAR ENDED DECEMBER 31, 1993:

Land & land
improvements $2,025 $497 $(6) $2,516
Buildings 17,460 9,416 $(1,690) 588 25,774
Machinery &
equipment 242,599 37,744 (3,830) 948 277,461

TOTALS FN3 $262,084 $47,657 $(5,520) $1,530 $305,751
</TABLE>
[FN]
<F1>
FN1 Column E includes the sale of the Accutec division of
Hoffman Engineering.
$(2,482)
<F2>
FN2 Column E includes the sale of Invicta division of Delta
International Machinery.
$(9,108)
<F3>
FN3 Column E includes the classification of F.E. Myers
Foundry
from asset held for disposition.
$1,763

<PAGE>
<TABLE>
SCHEDULE VIII
<CAPTION>
PENTAIR, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31
($ Thousands)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E

ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND DEDUCTIONS- AT END OF
PERIOD EXPENSES WRITE-OFFS PERIOD

<S> <C> <C> <C> <C>
Allowance for
doubtful
accounts and
notes receivables

1991 4,715 2,875 (1,964) 5,626
1992 5,626 2,549 (2,635) 5,540
1993 5,540 1,514 (857) 6,197
</TABLE>
<PAGE>
<TABLE>
SCHEDULE X
<CAPTION>
PENTAIR, INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE YEARS ENDED DECEMBER 31
($ Thousands)

COLUMN A COLUMN B

Charged to Costs and Expenses
Item 1991 1992 1993
<S> <C> <C> <C>
Maintenance and repairs $25,072 $25,178 $25,799

Advertising costs $22,230 $23,433 $27,675
</TABLE>

All other supplemental income statement information items are
not included in this schedule because they are not required to
be disclosed pursuant to Regulation S-X.

EXHIBIT INDEX

Exhibit
Number Description

(3.1) Restated Articles of Incorporation as amended
through April 25, 1989 (Incorporated by
reference to Exhibit 3.1 to the Company's Form
10-Q for the quarter ended March 31, 1989).

(3.2) Resolution Establishing and Designating $7.50
Callable Cumulative Convertible Preferred Stock,
Series 1988, as a series of Preferred Stock of
Pentair, Inc. (Incorporated by reference to Exhibit
4.1 to Amendment No. 1 to the Company's
Current Report on Form 8-K filed December 30,
1988).

(3.3) Resolution Establishing and Designating 8%
Callable Cumulative Voting Convertible Preferred
Stock, Series 1990, as a series of Preferred
Stock of Pentair, Inc. (Incorporated by reference
to Exhibit 4 to the Company's Current Report on
Form 8-K filed March 21, 1990).

(3.4) Second Amended and Superseding By-Laws as
amended through January 19, 1993
(Incorporated by reference to Exhibit 3.16 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1992).

(4.1) Restated Articles of Incorporation, as amended,
and Second Amended and Superseding By-
Laws, as amended (see Exhibits 3.1 - 3.4
above).

(4.2) Rights Agreement dated December 26, 1986
between the Company and First Trust Company,
Inc. (Incorporated by reference to Exhibit 1 to
the Company's Registration Statement on Form
8-A filed December 26, 1986).

(4.3) Amendment to Rights Agreement dated July 22,
1988 between the Company and Norwest Bank
Minnesota, National Association, as successor
Rights Agent (Amending Exhibit 4.2)
(Incorporated by reference to Exhibit 4.2 to the
Company's Current Report on Form 8-K filed
August 2, 1988).

(4.4) Second Amendment to Rights Agreement dated
December 15, 1989 between the Company and
Norwest Bank Minnesota, National Association,
as successor Rights Agent (Amending Exhibit
4.2) (Incorporated by reference to Exhibit 4.3 to
the Company's Current Report on Form 8-K filed
December 28, 1989).

(4.5) Bid Loan Agreement dated December 14, 1988
between the Company, Continental Bank N.A.
for itself and as Agent, Morgan Guaranty Trust
Company of New York, Morgan Bank
(Delaware), First Bank National Association,
Norwest Bank Minnesota, N.A., and Mellon
Bank, N.A. (Incorporated by reference to Exhibit
4.2 to Amendment No. 1 to the Company's
Current Report on Form 8-K filed December 30,
1988).

(4.8) $125,000,000 Facility Agreement dated as of
February 11, 1994 between Pentair, Inc.,
Continental Bank N.A. for itself and as Agent,
Morgan Guaranty Trust Company of New York
for itself and as Agent, NBD Bank, N.A., and J.
P. Morgan Delaware (Incorporated by reference
to Exhibit 4.1 to the Company's Current Report
on Form 8-K filed March 14, 1994).

(4.9) $45,000,000 Facility Agreement dated as of
February 11, 1994 between Pentair, Inc., First
Bank National Association, for itself and as
Agent, and Norwest Bank Minnesota N.A.
(Incorporated by reference to Exhibit 4.2 to the
Company's Current Report on Form 8-K filed
March 14, 1994).

(4.10) DM 115,000,000 Facility Agreement dated as of
February 11, 1994 between EuroPentair, GmbH
as Borrower, Pentair, Inc., as Guarantor, Morgan
Guaranty Trust Company of New York for itself
and as Agent, Continental Bank N.A., for itself
and as Agent, NBD Bank, N.A. and Dresdner
Bank (Incorporated by reference to Exhibit 4.4 to
the Company's Current Report on Form 8-K filed
March 14, 1994).

(4.11) Restatement of Credit Agreement dated July 11,
1989 between Federal-Hoffman, Inc. and First
Bank National Association (Incorporated by
reference to Exhibit 4.10 to the Company's Form
10-K for the year ended December 31, 1989).

(4.12) Second Amendment to Restatement of Credit
Agreement dated as of January 19, 1993
between Federal-Hoffman, Inc., Pentair, Inc., and
First Bank National Association (Amending
Exhibit 4.11) (Incorporated by reference to
Exhibit 4.13 to the Company's Form 10-K for the
year ended December 31, 1992).

(4.13) $35,000,000 Note Purchase Agreement dated
March 25, 1991 between Pentair, Inc. and
Nationwide Life Insurance Company.
(Incorporated by reference to Exhibit 4.14 to the
Company's Registration Statement on Form S-8
filed August 6, 1991).

(4.14) $25,000,000 Note Purchase Agreement dated
December 13, 1991 between Pentair, Inc. and
Principal Mutual Life Insurance Company.
(Incorporated by reference to Exhibit 4.15 to the
Company's Registration Statement on Form S-8
filed January 13, 1992).

(4.15) $15,000,000 Note Purchase Agreement dated
November 1, 1992 between Pentair, Inc. and
Nationwide Life Insurance Company
(Incorporated by reference to Exhibit 4.16 to the
Company's Form 10-K for the year ended
December 31, 1992).

(4.16) $15,000,000 Note Purchase Agreement dated
January 15, 1993 between Pentair, Inc. and
Principal Mutual Life Insurance Company
(Incorporated by reference to Exhibit 4.17 to the
Company's Form 10-K for the year ended
December 31, 1992).

(10.1) Agreements dated February 8, 1978 and
February 9, 1982 between the Company and D.
Eugene Nugent (Incorporated by reference to
Exhibit 10.2 to the Company's Registration
Statement on Form S-2 filed June 24, 1983).

(10.2) Agreement dated February 8, 1984 (Amending
Exhibit 10.1) (Incorporated by reference to
Exhibit 10.4 to the Company's Annual Report on
Form 10-K for the year ended December 31,
1983).

(10.3) Agreement dated December 17, 1985 (Amending
Exhibit 10.1) (Incorporated by reference to
Exhibit 10.6 to the Company's Annual Report on
Form 10-K for the year ended December 31,
1985).

(10.4) Agreement dated May 7, 1990 (Amending
Exhibit 10.1). (Incorporated by reference to
Exhibit 10.4 to the Company's Annual Report on
Form 10K for the year ended December 31,
1990).

(10.5) Company's Supplemental Employee Retirement
Plan effective June 16, 1988 (Incorporated by
reference to Exhibit 10.10 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1989).

(10.6) Company's Restated Long-Term Executive
Performance Plan as amended to October 21,
1987 (Incorporated by reference to Exhibit 10.9
to the Company's Annual Report on Form 10-K
for the year ended December 31, 1987).

(10.7) Company's 1982 Incentive Stock Option Plan
(Incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-2
filed June 24, 1983).

(10.8) First Amendment to Incentive Stock Plan
(Amending Exhibit 10.7) (Incorporated by
reference to Exhibit 10.10 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1985).

(10.9) Second Amendment to Incentive Stock Option
Plan (Amending Exhibit 10.7) (Incorporated by
reference to Exhibit 14 to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1989).

(10.10) Company's 1986 Nonqualified Stock Option Plan
(Incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1986).

(10.11) Company's 1990 Omnibus Stock Incentive Plan
(Superseding Exhibits 10.6 - 10.10 above starting
with 1990 grants) (Incorporated by reference to
Exhibit 10.16 to the Company's Annual Report
on Form 10-K for the year ended December 31,
1989).

(10.12) Company's Management Incentive Plan as
amended to January 12, 1990 (Incorporated by
reference to Exhibit 10.17 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1989).

(10.13) Employee Stock Purchase and Bonus Plan as
amended and restated effective January 1, 1992
(Incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1991).

(10.14) Company's Flexible Perquisite Program as
amended to January 1, 1989 (Incorporated by
reference to Exhibit 10.20 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1989).

(10.15) Form of 1986 Management Assurance
Agreement (Revised 1990) between the
Company and certain executive officers
(Incorporated by reference to Exhibit 10.22 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1989).

(10.16) Company's Third Amended and Restated
Compensation Plan for Non-Employee Directors
as amended to January 1, 1992. (Incorporated
by reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-8 filed
January 13, 1992).

(10.17) Company's Outside Directors Nonqualified Stock
Option Plan dated January 22, 1988
(Incorporated by reference to Exhibit 10.20 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1987).

(10.18) First Amendment to Outside Directors
Nonqualified Stock Option Plan (Amending
Exhibit 10.17) (Incorporated by reference to
Exhibit 10.22 to the Company's Annual Report
on Form 10-K for the year ended December 31,
1991).

(10.19) Second Amendment to Outside Directors
Nonqualified Stock Option Plan (Amending
Exhibit 10.17) (Incorporated by reference to
Exhibit 10.23 to the Company's Annual Report
on Form 10-K for the year ended December 31,
1991).

(10.20) Pentair, Inc. Deferred Compensation Plan
effective January 1, 1993 (Incorporated by
reference to Exhibit 10.21 to the Company's
Form 10-K for the year ended December 31,
1992).

(10.21) Lake Superior Paper Industries Venture Council
By-Laws and Management Protocol
(Incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1985).

(10.22) Second Amended and Restated Joint Venture
Agreement dated December 31, 1987 between
Pentair Duluth Corp. and Minnesota Paper,
Incorporated (Incorporated by reference to
Exhibit 10.25 to the Company's Annual Report
on Form 10-K for the year ended December 31,
1987).

(10.23) First Amendment to Second Restated Joint
Venture Agreement, First Amendment to Venture
Council By-Laws, and First Amendment to
Management Protocol, all dated May 30, 1989,
between Pentair Duluth Corp. and Minnesota
Paper, Incorporated (Amending Exhibits 10.21
and 10.22) (Incorporated by reference to Exhibit
10.28 to the Company's Annual Report on Form
10-K for the year ended December 31, 1989).

(10.24) Cash Deficiency Agreement dated December 31,
1987 among Pentair Duluth Corp., as Joint
Venturer, Associated Southern Investment
Company, as Owner Participant, The
Connecticut Bank and Trust Company, National
Association, as Indenture Trustee, and First
National Bank of Minneapolis, as Owner Trustee.
Cash Deficiency Agreements also were entered
into with respect to each of the other four Owner
Participants: Dana Lease Finance Corporation,
NYNEX Credit Company, Public Service
Resources Corporation, and Southern Indiana
Properties, Inc. (Incorporated by reference to
Exhibit 10.1 to Amendment No. 1 to the
Company's Current Report on Form 8-K filed
April 26, 1988).

(10.25) Keepwell Agreement and Assignment dated
December 31, 1987 among Pentair, Inc., as
Sponsor, Pentair Duluth Corp., as Joint Venturer,
and First National Bank of Minneapolis, as
Owner Trustee; although First Minneapolis
executed this filed document as Owner Trustee
for Associated Southern Investment Company,
additional Keepwell Agreements and
Assignments were entered into by First
Minneapolis as Owner Trustee for the other four
Owner Participants listed in the description of
Exhibit 10.24 above (Incorporated by reference
to Exhibit 10.2 to Amendment No. 1 to the
Company's Current Report on Form 8-K filed
April 26, 1988).

(10.27) Loan and Stock Purchase Agreement dated
March 7, 1990 between the Company and the
Pentair, Inc. Employee Stock Ownership Plan
Trust, acting through State Street Bank and Trust
Company, as Trustee (Incorporated by reference
to Exhibit 10.1 to the Company's Current Report
on Form 8-K filed March 21, 1990).

(10.28) $56,499,982 Promissory Note dated March 7,
1990 of the Pentair, Inc. Employee Stock
Ownership Plan Trust, acting through State
Street Bank and Trust Company, as Trustee, to
the Company (Incorporated by reference to
Exhibit 10.2 to the Company's Current Report on
Form 8-K filed March 21, 1990).

(11) Statement regarding computation of earnings
per share.

(13) Annual Report to Shareholders for period ended
December 31, 1993.

(21) Subsidiaries of Registrant.

(24) Consent of Deloitte & Touche.

PENTAIR, INC.

$70,000,000
SERIES A THROUGH D SENIOR NOTES
DUE 1997 THROUGH 2001

PURCHASED BY

United of Omaha Life Insurance Company
Companion Life Insurance Company
Principal Mutual Life Insurance Company
Nippon Life Insurance Company of America
Lutheran Brotherhood
American United Life Insurance Company
Modern Woodmen of America
The Franklin Life Insurance Company
Ameritas Life Insurance Company

CLOSING DATE: JUNE 30, 1993

Prepared By:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601

CLOSING LIST

Pentair, Inc.
$70,000,000 Series A Through D
Senior Notes Due 1997-2001

Closing Date: June 30, 1993

The applicable parties involved in this transaction are
abbreviated as follows:

"Pentair" - Pentair, Inc.

"Purchasers" - United of Omaha Life Insurance
Company

Companion Life Insurance
Company

Principal Mutual Life Insurance
Company

Nippon Life Insurance Company of
America

Lutheran Brotherhood

American United Life Insurance
Company

Modern Woodmen of America

The Franklin Life Insurance
Company

Ameritas Life Insurance Corp.

"H&E" - Henson & Efron

"W&S" - Winston & Strawn

"Agent" - Continental Bank, N.A.<PAGE>
PENTAIR, INC.

NOTE PURCHASE AGREEMENT

Dated as of April 30, 1993

$70,000,000 Senior Notes

Consisting of:
$15,000,000 6.29% Series A Senior Notes Due
1997

$19,500,000 7.06% Series B Senior Notes
Due 1999

$20,500,000 7.30% Series C Senior Notes
Due 2000

$15,000,000 7.42% Series D Senior Notes
Due 2001

TABLE OF CONTENTS

Section Heading

SECTION 1. Description of Notes and Commitment

1.1 Description of Notes
1.2 Commitment; Closing Date; Failure to Fund
1.3 Use of Proceeds

SECTION 2. Prepayment and Repayment of the Notes

2.1 Mandatory Prepayment and Repayment
2.2 Optional Prepayments
2.3 Notice of Prepayment
2.4 Direct Payment
2.5 Surrender of Notes Upon Prepayment or
Repayment

SECTION 3. Representations and Warranties of the
Company

3.1 Corporate Organization and Authority
3.2 Subsidiaries
3.3 Financial Statements
3.4 Disclosure
3.5 Pending Litigation
3.6 Sale is Legal and Authorized
3.7 No Defaults
3.8 Governmental Consent
3.9 Taxes
3.10 Use of Proceeds
3.11 Private Offering
3.12 Compliance with ERISA
3.13 Investment Company Act
3.14 Compliance with Law
3.15 Broker's Fees
3.16 Lake Superior Paper Industries

SECTION 4. Representations and Warranties of the
Purchasers.

SECTION 5. Closing Conditions.

5.1 Closing Certificate
5.2 Legal Opinions
5.3 Satisfactory Proceedings
5.4 Waiver of Conditions

SECTION 6. Company Covenants

6.1 Corporate Existence and Status
6.2 Maintenance, Etc
6.3 Insurance
6.4 Reports and Rights of Inspection
(a) Quarterly Statements
(b) Annual Statements
(c) SEC Filings and Reports to Shareholders
(d) Officer's Certificates
(e) Audit Reports
(f) Other Reports
(g) Requested Information
6.5 Notice of Default or Event of Default
6.6 Net Worth
6.7 Limitation on Liens
6.8 Restricted Payments
6.9 Mergers, Consolidations and Sales of Assets
6.10 Indebtedness
6.11 Current Ratio
6.12 Transactions with Affiliates
6.13 Repurchase of Notes
6.14 Regulations U and X
6.15 Compliance with Laws

SECTION 7. Events of Default and Remedies Therefor

7.1 Events of Default
7.2 Acceleration of Maturities

SECTION 8. Interpretation of Agreement; Definitions

8.1 Accounting Principles
8.2 Directly or Indirectly
8.3 Definitions

SECTION 9. Miscellaneous

9.1 Registered Notes; Several Obligations of
Purchasers

9.2 Transfer and Exchanges of Notes
9.3 Loss, Theft, Etc. of Notes
9.4 Expense; Stamp Tax Indemnity
9.5 Amendments, Waivers and Consents
9.6 Powers and Rights Not Waived; Remedies
Cumulative

9.7 Notices
9.8 Successors and Assigns
9.9 Survival of Covenants and Representations
9.10 Severability
9.11 Governing Law
9.12 Counterparts
9.13 Captions

Attachments to Note Purchase Agreement:

Schedule I - Name of Purchasers

Schedule 3.2 - Subsidiaries, etc.

Schedule 3.3 - Financial Statement Matters

Schedule 3.5 - Pending Litigation

Exhibit A - Form of Senior Notes

Exhibit B - Form of Closing Certificate of Pentair, Inc.

Exhibit C-1 - Form of Opinion of Henson &
Efron, Counsel to Pentair, Inc.

Exhibit C-2 - Form of Opinion of Winston &
Strawn, Special Counsel to the
Purchasers

Pentair, Inc.
1500 County Road B2 West
St. Paul, Minnesota 55113

NOTE PURCHASE AGREEMENT

$70,000, 000 Senior Notes

Consisting of:

$15,000,000 6.29% Series A Senior Notes Due
1997

$19,500,000 7.06% Series B Senior Notes
Due 1999

$20,500,000 7.30% Series C Senior Notes
Due 2000

$15,000,000 7.42% Series D Senior Notes
Due 2001

To the Purchasers named Dated as of
in Schedule I which are April 30, 1993
signatories to this Note
Purchase Agreement

Ladies and Gentlemen:

The undersigned, Pentair, Inc., a Minnesota corporation (the
"Company"), hereby agrees with the Purchasers as follows:

SECTION 1. Description of Notes and Commitment.

1.1 Description of Notes. Pentair will authorize the issuance
and sale of $70,000,000 aggregate principal amount of its
Senior Notes consisting of $15,000,000 aggregate principal
amount of its 6.29% Series A Senior Notes due 1997 (the
"Series A Notes"), $19,500,000 aggregate principal amount of
its 7.06% Series B Senior Notes due 1999 (the "Series B
Notes"), $20,500,000 aggregate principal amount of its 7.30%
Series C Senior Notes due 2000 (the "`Series C Notes") and
$15,000,000 aggregate principal amount of its 7.42% Series D
Senior Notes due 2001 (the "Series D Notes"), (a) in each
case, to be dated the date of the issue, (b) to bear interest from
such date at the rate of 6.29% per annum in the case of the
Series A Notes, 7.06% per annum in the case of the Series B
Notes, 7.30% per annum in the case of the Series C Notes and
7.42% per annum in the case of the Series D Notes, in each
case payable quarterly in arrears on the first day of each
January, April, July and October in each year, commencing on
the first such date to occur at least thirty days after the
Closing Date (as hereinafter defined), and at maturity, (c)
to bear interest on overdue principal (including any overdue
optional prepayment of principal) and premium, if any, and (to
the extent legally enforceable) on any overdue installment of
interest at the rate of 8.29% per annum in the case of the
Series A Notes, 9.06% per annum in the case of the Series B
Notes, 9.30% per annum in the case of the Series C Notes and
9.42% per annum in the case of the Series D Notes, in each
case after the maturity of such amount, whether by
acceleration or otherwise, until paid, (d) to be expressed to
mature on the date which is four (4) years from the Closing
Date in the case of the Series A Notes, six (6) years from the
Closing Date in the case of the Series B Notes, seven (7) years
from the Closing Date in the case of the Series C Notes and
eight (8) years from the Closing Date in the case of the Series
D Notes (each of such dates with respect to its particular
Series of Notes being herein referred to as the "Maturity Date"
and all of such dates being collectively referred to as the
respective "Maturity Dates") and (e) to be substantially in the
form of Exhibit A, in each case completed as appropriate.
The term "Notes" as used herein shall collectively mean all of
the Series A Notes, Series B Notes, Series C Notes and Series
D Notes and shall include Notes delivered in replacement,
substitution or exchange therefor and the term "Note" shall
mean any of the Notes individually. Interest on the Notes
shall be computed on the basis of a 360-day year of twelve
30-day months. The Notes are not subject to prepayment or
redemption at the option of the Company prior to their
respective expressed Maturity Dates except on the terms and
conditions and at the prices set forth in Section 2.2.
Capitalized terms used in this Note Purchase Agreement
shall have the meanings given to them in Section 8. The term
"Purchasers" as used herein shall collectively mean the
holders of the Notes at any time (whether by original purchase
from the Company or as a transferee from a prior Purchaser).
References herein to an "Exhibit" are to one of the exhibits
attached to this Agreement, references to a "Schedule" are to
one of the schedules attached to this Agreement and references
to a "Section" are, unless otherwise specified, to one of the
sections of this Agreement.

1.2 Commitment; Closing Date; Failure to Fund.
(a) Subject to the terms and conditions hereof and on the basis
of the representations and warranties hereinafter set forth, the
Company agrees to issue and sell to the Purchasers, and the
Purchasers agree to purchase from the Company on the
Closing Date, the Notes of the Company in the aggregate
principal amount set forth opposite their respective names on
Schedule I attached hereto at a price of 100% of the principal
amount thereof.

(b) Delivery of the Notes will be made at the offices of
Winston & Strawn, 35 West Wacker Drive, Chicago, Illinois
60601, against payment therefor in Federal or other funds
current and immediately available for credit to the Company's
account at First Bank National Association, Acct. No.
80120-79082 (ABA wire transfer routing number
091000022), marked to the attention of Karen Johnson, in the
amount of the purchase price at 10:00 a.m., Chicago time, on
June 30, 1993 or such later date (not later than July 30, 1993)
as the Company and the Purchasers shall mutually agree (the
"Closing Date"). The Notes delivered to each Purchaser on
the Closing Date will be delivered to such Purchaser in the
form of a single Note for the full amount of its purchase
(unless such Purchaser shall have specified different
denominations in writing to the Company prior to the Closing
Date), registered in such Purchaser's name or in the name of
such nominee as such Purchaser may specify and in
substantially the form of Exhibit A attached hereto.

(c) In the event that the commitment of the Purchasers to
purchase the principal amount of the Notes set forth opposite
their names on Schedule I hereto shall have become effective
as contemplated by Sections 1.2(a) and 5 but (i) the Company
shall fail to issue the aggregate principal amount of the Notes
on the Closing Date as contemplated in Section 1.2(b) or (ii)
the conditions specified in Section 5 to the purchase by the
Purchasers of the principal amount of the Notes to be
purchased by them on the Closing Date shall not have been
satisfied on or prior to the Closing Date, then the Company
will immediately pay to each of the Purchasers an amount as
liquidated damages for the loss of the bargain evidenced
hereby (and not as a penalty) equal to the respective
Make-Whole Premiums for each such Purchaser determined as
of the Closing Date.

1.3 Use of Proceeds. The proceeds from the sale of the Notes
will be used for general corporate purposes, including
without limitation refinancing of existing indebtedness and
capital expenditures.

SECTION 2. Prepayment and Repayment of the Notes.

2.1 Mandatory Prepayment and Repayment. The Company
shall not be required to prepay the Notes prior to their
respective Maturity Dates. The Company shall repay the
entire aggregate principal amount of the Notes then remaining
outstanding on their respective Maturity Dates.

2.2 Optional Prepayments. Upon compliance with Section 2.3,
the Company shall have the privilege at any time and from
time to time after the Closing Date of prepaying the Notes, pro
rata to each Purchaser of the then outstanding Notes, either in
whole or in part (but if in part, then in an amount of at least
$100,000 and in integral multiples of $10,000 in excess
thereof) by prepayment of the principal amount of the Notes,
or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment, together with an
amount equal to the Make-Whole Premium, determined not
more than five days prior to the date of such prepayment.

2.3 Notice of Prepayment. The Company shall give written
notice of any prepayment of the Notes to the Purchasers not
less than 30 days nor more than 60 days before the date fixed
for such optional prepayment specifying (a) such date,
(b) the principal amount of the Notes to be prepaid on such
date, (c) the estimated Make-Whole Premium with respect to
each of the Notes, if any (and demonstrating the computation
thereof), and (d) accrued interest applicable to the prepayment.
Notice of prepayment having been so given, the aggregate
principal amount of the Note specified in such notice, together
with the actual Make-Whole Premium, if any, and accrued
interest thereon shall become due and payable on the
prepayment date.

2.4 Direct Payment. Notwithstanding anything to the
contrary in this Agreement or the Notes, the Company will
pay when due the principal on the Notes, the respective
Make-Whole Premiums with respect to the Notes, if any, and
interest thereon, without any presentment thereof directly to
the Purchaser thereof (or any nominee specified by a
Purchaser) or any subsequent registered holder of any Notes
at the address of such Purchaser set forth on Schedule I
attached hereto or at such other address as such Purchaser or
such holder may from time to time designate in writing to the
Company or, if a bank account is designated for such
Purchaser or such holder on Schedule I attached hereto or in
any written notice to the Company from such Purchaser or any
such holder, the Company will make such payments in
immediately available funds to such bank account, marked for
attention as indicated, or in such other manner or to such other
account of such Purchaser or such holder in any bank in the
United States as the Purchaser or any such holder may from
time to time direct in writing. Each Purchaser agrees that in
the event it shall sell or transfer any such Notes (i) it will,
prior to the delivery of such Notes (unless it has already done
so), make a notation thereon of all principal, if any, prepaid on
such Notes and will also note thereon the date to which
interest has been paid on such Notes, and (ii) it will promptly
notify the Company of the name and address of the transferee
of any Notes so transferred.

2.5 Surrender of Notes Upon Prepayment or Repayment. On
any partial prepayment of the Notes, the Purchaser thereof
shall, at the option of such Purchaser, (a) surrender such
original Note or Notes to the Company in exchange for a new
Note or Notes in a principal amount equal to the principal
amount remaining unpaid on the surrendered Note or Notes or
(b) make a notation on such original Note or Notes of the
portion of the principal so prepaid. In case the entire principal
amount of the Note or Notes is prepaid, or repaid at maturity,
together with all accrued interest thereon, and any
Make-Whole Premium due with respect thereto, the Note or
Notes shall be surrendered to the Company for cancellation
and shall not be reissued.

SECTION 3. Representations and Warranties of the
Company.

The Company hereby represents and warrants to each
Purchaser as follows:

3.1 Corporate Organization and Authority. The Company is
duly organized, validly existing and in good standing under
the laws of the State of Minnesota. As of each respective date
on which these representations and warranties are made by the
Company, each Subsidiary of the Company at the time is a
corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is
incorporated. The Company and each of its Subsidiaries has
full corporate power and authority to own and hold under
lease the properties and assets it purports to own or hold under
lease and to carry on its business as now being conducted. As
of each respective date on which these representations and
warranties are made by the Company, the Company and each
of its Subsidiaries is at the time duly qualified or licensed as
a foreign corporation and is in good standing in each
jurisdiction wherein the nature of the business transacted by it
makes such qualification or licensing necessary, except where
failure so to qualify will not have a material adverse effect on
the properties, business, operations or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a
whole.

3.2 Subsidiaries. As of each respective date on which these
representations and warranties are made by the Company,
Schedule 3.2 attached hereto states (or will have been
amended by the Company to state) (1) the name of each of
the Company's Subsidiaries at the time, its jurisdiction of
incorporation and the percentage of its voting capital stock
owned by the Company and/or its Subsidiaries and whether
such Subsidiary constitutes a Restricted Subsidiary and (2)
the name of each of the Company's corporate or joint venture
affiliates (other than Subsidiaries) at the time, and the nature
of the affiliation. The Company and each Subsidiary has good
and marketable title to all of the shares it purports to own of
the stock of each Subsidiary, free and clear in each case of
any material lien. All such shares have been duly issued and
are fully paid and non-assessable.

3.3 Financial Statements. (a) The consolidated balance sheet
of the Company and its consolidated subsidiaries as of
December 31, 1992 and the related consolidated statements of
income and cash flows for the fiscal year then ended, reported
on by Deloitte & Touche (without qualification) and set forth
in the Company's annual report for the year then ended as
filed with the Securities and Exchange Commission ("SEC"')
on Form 10-K, a copy of which has been provided to each
Purchaser, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial
position of the Company and its consolidated Subsidiaries as
of such date and the consolidated results of their operations
and cash flows for such period.

(b) Except as set forth on Schedule 3.3 attached hereto, since
December 31, 1992, there has been no change in the
properties, business, operations or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a
whole as shown on the consolidated balance sheet as of such
date except changes in the ordinary course of business,
none of which individually or in the aggregate has been
materially adverse to the properties, business, operations or
condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.

3.4 Disclosure. The Company's (i) annual report for the year
ended December 31, 1992 as filed on Form 10-K, including
the financial statements referred to in Section 3.3, and (ii)
any current report filed on Form 8-K since December 31, 1992
have been or shall be provided to each Purchaser upon filing
with the SEC, have been or shall have been prepared in
accordance with the rules and regulations of the SEC and, as
of the filing date thereof and as of the Closing Date, neither
any of such reports nor this Agreement contains or will
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements contained
therein or herein not misleading. There is no fact peculiar to
the Company or its Subsidiaries which the Company has not
disclosed to the Purchasers in writing which materially
adversely affects nor, so far as the Company can now foresee,
will materially adversely affect, the properties, business,
operations or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole.

3.5 Pending Litigation. Except as set forth on Schedule 3.5
attached hereto and as otherwise referred to in Section 3.16(c),
there are no proceedings pending or, to the knowledge of the
Company, threatened against the Company or any of its
Subsidiaries before any governmental authority or arbitration
board or tribunal which would materially and adversely affect
the properties, business, operations or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a
whole. The Responsible Officer of the Company executing
this Agreement and any certificate with respect to this Section
3.5 is not aware (after due inquiry) of any default by the
Company or any of its Subsidiaries with respect to any order
of any court or governmental authority or arbitration board or
tribunal.

3.6 Sale is Legal and Authorized. (a) The sale of the Notes
and compliance by the Company with all of the provisions of
this Agreement and the Notes:

(i) are within the corporate powers of the Company and have
been duly authorized by proper corporate action on the part of
the Company; and

(ii) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, the
articles of incorporation or by-laws of the Company or any
indenture or other agreement or instrument to which the
Company is a party or by which any of them may be bound
or result in the imposition of any liens or encumbrances on
any property of the Company.

(b) The officers of the Company executing and delivering
this Agreement and any Note issued pursuant hereto on behalf
of the Company have been duly authorized to do so, and this
Agreement, any Note and any other agreements delivered
pursuant hereto, when executed, are and will be legal, valid
and binding obligations of the Company in every respect,
enforceable against the Company in accordance with their
terms except as enforceability may be limited by bankruptcy,
reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general equitable principles.

3.7 No Defaults. No Default or Event of Default has occurred
and is continuing. Neither the Company nor any of its
Subsidiaries is in default in the payment of principal or
interest on indebtedness in excess of $5,000,000 in the
aggregate and is not in default under any instrument or
instruments or agreements under and subject to which any
such indebtedness for or in respect of borrowed money has
been issued and no waiver of any default under any such
instrument is in effect and no event has occurred and is
continuing under the provisions of any such instrument or
agreement which with the lapse of time or the giving of
notice, or both, would constitute an event of default
thereunder.

3.8 Governmental Consent. Other than as previously
obtained, no registration with nor any approval, consent or
withholding of objection on the part of any regulatory body,
state, federal or local, is necessary in connection with the
execution and delivery by the Company of this Agreement
or the Notes or compliance by the Company with any of the
provisions of this Agreement or the Notes.

3.9 Taxes. All federal, state and other tax returns of the
Company and its Subsidiaries required by law to be filed have
been duly filed or appropriately extended. All taxes shown on
such returns and assessments received by the Company
and its Subsidiaries have been paid to the extent that such
taxes have become due, other than taxes and assessments the
applicability, validity or amount of which is being contested
in good faith by appropriate proceedings or actions and as to
which reserves have been set up on the books of the Company
and its Subsidiaries to the extent required by generally
accepted accounting principles. Any tax obligations of the
Company or any of its Subsidiaries in excess of the provisions
and reserves on the books of the Company and its Subsidiaries
in respect of federal, state or other income taxes for the years
for which such returns have not been closed (which reserves
are, in the judgment of the Company, adequate) will not have
a material adverse effect on the properties, business,
operations or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole.

3.10 Use of Proceeds. None of the transactions
contemplated in this Agreement (including, without limitation,
the use of proceeds from the issuance of the Notes) will
violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulation issued
pursuant thereto, including, without limitation, Regulations G,
T and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. None of the proceeds from the
sale of the Notes will be used to purchase, or to refinance any
borrowing the proceeds of which were used to purchase, any
"margin stock" within the meaning of such Regulation G.

3.11 Private Offering. Neither the Company, directly or
indirectly, nor to the knowledge of the Company any agent on
its behalf, has offered or will offer the Notes or any similar
Security or has solicited an offer to acquire the Notes or any
similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the
Notes or any similar Security with any Person other than the
Purchasers and not more than thirty-five Institutional Investors.
Neither the Company, directly or indirectly, nor to the
knowledge of the Company any agent on its behalf, has
offered or will offer the Notes or any similar Security or has
solicited or will solicit an offer to acquire the Notes or any
similar Security from any Person so as to bring the issuance
and sale of the Notes within the provisions of Section 5 of the
Securities Act of 1933, as amended. As used herein, the
term "similar Security" shall mean any security containing
terms and conditions substantially equivalent to those of the
Notes, including, without limitation, equivalent maturities.

3.12 Compliance with ERISA. The Company and each
ERISA Affiliate have fulfilled their respective obligations
under the minimum funding standards of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA") and the Code with respect to each employee
retirement benefit plan and are in compliance in all material
respects with the presently applicable provisions of ERISA and
the Code, and have not incurred any liability under Title IV
of ERISA to the Pension Benefit Guaranty Corporation other
than premium payments with respect to a plan.

3.13 Investment Company Act. The Company is not
and is not directly or indirectly controlled by, or acting on
behalf of any Person which is, an "investment company"
within the meaning of the Investment Company Act of 1940,
as amended.

3.14 Compliance with Law. Neither the Company nor
any of its Subsidiaries (a) is in violation of any law,
ordinance, franchise, governmental rule or regulation to which
it is subject or (b) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business,
which violation or failure to obtain would materially adversely
affect the properties, business, operations or condition
(financial or otherwise) of the Company and its Subsidiaries
taken as a whole, or the ability of the Company to perform its
obligations contained in this Agreement or the Notes.

3.15 Broker's Fees. Except for Continental Bank, N.A.,
neither this Agreement nor the sale of the Notes or any other
transaction contemplated by this Agreement was induced or
procured through any person, firm, corporation or other entity
acting on behalf of, or representing the Company or any of its
Subsidiaries as broker, finder, investment banker, financial
advisor or in any similar capacity.

3.16 Lake Superior Paper Industries. (a) Lake Superior
Paper Industries is a join' venture duly established under the
general partnership laws of the State of Minnesota on
November 21, 1985 between Pentair Duluth Corp. and
Minnesota Paper, Incorporated ("Lake Superior") and is
validly existing and has full power and authority to own or
hold under lease the properties and assets it purports to own
or hold under lease and to carry on its business as it is now
being conducted. Lake Superior is qualified to do business
only in the State of Minnesota. Lake Superior has no
subsidiaries.

(b) The balance sheet of Lake Superior as of December
31, 1992 together with the related statement of income and
cash flows for the fiscal year then ended, copies of each of
which have been provided to the Purchasers, have been
prepared in accordance with generally accepted accounting
principles consistently applied and fairly present its financial
position and the results of its operations and its cash flows for
such fiscal year. Since December 31, 1992, there has been no
change in the business, operations or condition (financial or
otherwise) of Lake Superior which would have a material
adverse effect on the business, operations or condition
(financial or otherwise) of the Company and its Subsidiaries
taken as a whole.

(c) An audit of a certain federal income tax information
return on Form 1065 filed by Lake Superior has been
commenced with respect to the transactions by which
undivided interests in its operating equipment were sold to five
investors. Under certain events, an adverse determination
would trigger the obligation of Lake Superior to pay certain
tax indemnities to the investors. An audit report has been
issued and the matter has been protested to the Internal
Revenue Service Office of Appeals. The Company believes
that the likelihood is small of a materially adverse
administrative or judicial determination that Lake Superior
considers final and is not in the process of appealing; the
effect thereof is not possible to quantify accurately, but it is
currently estimated, based upon tax and other assumptions
believed to be reasonable by the Company, that such liabilities
would not exceed $12 million. Lake Superior would be
required to obtain funds necessary to pay any indemnity from
its operating cash, lending sources or its two 50% joint
venturers.

SECTION 4. Representations and Warranties of the
Purchasers.

Each Purchaser represents, and in entering into this Agreement
the Company understands, that (a) such Purchaser is an
Institutional Investor and is acquiring the Notes for the
purpose of investment and not with a view to the resale or
distribution thereof, and (b) such Purchaser has no present
intention of selling, negotiating or otherwise disposing of the
Notes; provided that the disposition of the Notes shall at all
times be and remain within each Purchaser's control and
discretion and provided further that each Purchaser agrees not
to resell or distribute the Notes except to an Institutional
Investor in a transaction which is not in violation of the
Securities Act of 1933, as amended. Each Purchaser further
represents and warrants that either: (i) no part of the funds to
be used by such Purchaser to purchase the Notes to be
purchased by it hereunder (other than those funds identified in
clause (iii) below) will constitute assets allocated to any
separate account maintained by it; (ii) no part of the funds to
be used by it to purchase the Notes (other than those funds
identified in clause (iii) below) will constitute assets allocated
to any separate account maintained by it such that the
application of such funds will constitute a prohibited
transaction under Section 406 of ERISA; or (iii) all or a part
of such funds will constitute assets of one or more separate
accounts maintained by it and it has disclosed to the Company
the names of such employee benefit plans whose assets in
such separate account or accounts exceed 10% of the total
assets or are expected to exceed 10% of the total assets of
such account or accounts as of the date of such purchase and
the Company has advised such Purchaser in writing that the
Company is not a party-in-interest nor are the Notes employer
securities with respect to the particular employee benefit plans
disclosed to the Company by such Purchaser as aforesaid (for
the purpose of this clause (iii), all employee benefit plans
maintained by the same employer or employee organization
being deemed to be a single plan). As used in this Section,
the terms "separate account," "party-in-interest," "employer
securities," and "employee benefit plans" shall have the
respective meanings assigned to them in ERISA. Each
additional or subsequent Purchaser of any of the Notes shall
be deemed by virtue of such purchase to have made the
representations set forth in this Section 4 as of the date of
such purchase.

SECTION 5. Closing Conditions.

Each Purchaser's obligation to purchase the Notes on the
Closing Date shall be subject to the performance by the
Company of its agreements hereunder which by the terms
hereof are to be performed at or prior to the time of delivery
of the Notes and to the following further conditions precedent:

5.1 Closing Certificate. Each Purchaser shall have received
a certificate dated the Closing Date, signed by a Responsible
Officer of the Company substantially in the form of Exhibit B
attached hereto, the truth and accuracy of which shall be a
condition to such Purchaser's obligation to purchase the Notes
proposed to be sold to such Purchaser.

5.2 Legal Opinions. Concurrently with the delivery of the
Notes to the Purchasers on the Closing Date, each Purchaser
shall have received from each of Henson & Efron, counsel to
the Company, and Winston & Strawn, special counsel to the
Purchasers, its opinion dated the Closing Date, in form
and substance satisfactory to the Purchasers and covering the
matters set forth in Exhibit C-1 and Exhibit C-2, respectively,
attached hereto.

5.3 Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this
Agreement and all documents necessary to the consummation
hereof, shall be satisfactory in form and substance to the
Purchasers and their special counsel, and each Purchaser shall
have received a copy (executed or certificated as may be
appropriate) of all legal documents or proceedings taken in
accordance with the consummation of said transactions and of
such other documents as the Purchasers or their special
counsel shall have reasonably requested, including, without
limitation, the following:

(a) The articles of incorporation of the Company, certified as
of a date not earlier than ten days prior to the Closing Date by
the Secretary of State of the State of Minnesota;

(b) The by-laws of the Company, certified as of the Closing
Date by the Secretary or an Assistant Secretary of the
Company;

(c) Certificate as of a date not earlier than ten days prior to
the Closing Date from the Secretary of State of the State of
Minnesota as to the good standing of the Company in such
jurisdiction;

(d) Incumbency certificate with respect to the officers of
the Company executing this Agreement, any Note or any of
the documents referred to in this Agreement;

(e) Copies of a resolution duly adopted by the Board of
Directors of the Company approving the execution and
delivery of all documents contemplated by this Agreement
(including, without limitation, the Notes) to be executed and
delivered by the Company, and certified by the Secretary or an
Assistant Secretary of the Company as of the Closing Date;

(f) A fully executed Note or Notes, as the case may be,
substantially in the form of Exhibit A attached hereto, in an
appropriate amount as specified in accordance with this
Agreement;

(g) Good standing certificates dated as of recent dates in the
respective jurisdictions of incorporation of the Company's
principal operating Subsidiaries; and

(h) Such other documents as may be reasonably requested
by the Purchasers or their special counsel.

5.4 Waiver of Conditions. If on the Closing Date the
Company fails to tender to the Purchasers the Notes to be
issued to the Purchasers on such date or if the conditions
specified in this Section 5 have not been fulfilled, the
Purchasers may thereupon elect to be relieved of all further
obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in this Section 5 have
not been fulfilled, the Purchasers may waive compliance by
the Company with any such condition to such extent as the
Purchasers may in their sole discretion determine. Nothing in
this Section 5.4 shall operate to relieve the Company of any
of its obligations hereunder or to waive any of the Purchasers'
rights against the Company.

SECTION 6. Company Covenants.

The Company agrees that until the principal of and interest on
all Notes, and all other payments due hereunder, shall have
been paid in full, the Company will perform and observe and
will cause the Restricted Subsidiaries to perform and observe,
all of the following provisions:

6.1 Corporate Existence and Status. Except as permitted by
Section 6.9 hereof, the Company will, and will cause each
Restricted Subsidiary to, maintain and preserve (i) its
corporate existence and (ii) all rights, privileges, licenses
and other authority necessary for the conduct of its businesses
except where the failure to maintain, preserve and keep such
rights, privileges, licenses and other authority would not have
a material adverse effect on the properties, business,
operations or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole. The
Company will, and will cause each Restricted Subsidiary to,
continue to conduct its business in an orderly manner and
without any material voluntary interruption.

6.2 Maintenance, Etc. The Company will maintain,
preserve and keep, and will cause each Restricted Subsidiary
to maintain, preserve and keep, its properties which are used
or useful in the conduct of its business (whether owned in fee
or a leasehold interest) in good repair and working order.

6.3 Insurance. The Company will, and will cause each
Restricted Subsidiary to, (a) maintain insurance to such extent
and against such hazards and liabilities as is commonly
maintained by companies engaged in similar businesses and
(b) promptly upon any Purchaser's written request, furnish
to such Purchaser such information about the insurance of
the Company and its Restricted Subsidiaries that such
Purchaser may from time to time reasonably request, which
information shall be prepared in form and detail reasonably
satisfactory to such Purchaser and certified as true and correct
by an officer of the Company.

6.4 Reports and Rights of Inspection. The Company will
keep, and will cause each Restricted Subsidiary to keep,
proper books of record and account in which full and correct
entries will be made of all material dealings or transactions of
or in reliance on the business and affairs of the Company or
such Restricted Subsidiary, in accordance with generally
accepted principles of accounting consistently applied (except
where the changes have been concurred in by the Company's
independent public accountants and noted in the Company's
financial statements). The Company will furnish to the
Purchasers prior to the Closing Date and so long thereafter as
they are the holders of any of the Notes:

(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal
period (except the last) of each fiscal year, one copy of:

(1) the unaudited consolidated balance sheet of the Company
and its Subsidiaries as of the close of such quarter, and

(2) unaudited consolidated statements of income and cash
flows of the Company and its Subsidiaries for such quarterly
period,

in each case setting forth in comparative form the
consolidated figures from the corresponding period of the
preceding fiscal year, and certified as to fairness of
presentation in conformity with generally accepted accounting
principles (except for the absence of footnotes and subject to
normal year-end adjustments) by the chief financial officer or
chief accounting officer of the Company;

(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the
Company, one copy of:

(1) the audited consolidated balance sheet of the Company and
its Subsidiaries as of the close of such fiscal year, and

(2) audited consolidated statements of income and cash flows
of the Company and its Subsidiaries for such fiscal year,

in each case setting forth in comparative form the
consolidated figures for the preceding fiscal year, all in
accordance with the rules and regulations of the SEC, reported
on by the Company's independent public accountants, who
shall be of recognized national standing, as to fairness
of presentation in conformity with generally accepted
accounting principles. Such independent public accountants
shall also state as to whether in the course of their audit of the
Company's financial statements they became aware of any
Defaults or Events of Default hereunder (and listing them
specifically);

(c) SEC Filings and Reports to Shareholders. Promptly
after filing with the SEC, all reports filed with the SEC and
all reports to shareholders (including without limitation all
proxy materials);

(d) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of the chief
financial officer or chief accounting officer of the Company
stating that such officer has reviewed or caused to have
reviewed the provisions of this Agreement and setting forth in
reasonable detail whether there existed as of the date of such
financial statements and whether there exists on the date of the
certificate any Default or Event of Default and, if any such
condition or event exists on the date of the certificate,
specifying the nature and period of existence thereof and the
action the Company and/or its Restricted Subsidiaries is taking
and proposes to take with respect thereto;

(e) Audit Reports. If a Default or Event of Default shall have
occurred and be continuing, promptly upon receipt thereof, one
copy of each interim or special audit, if any, made by
independent accountants of the books of the Company or any
Restricted Subsidiary;

(f) Other Reports. If at any time the Company shall no
longer be required to file periodic reports with the SEC,
promptly upon their becoming available, copies of any
material orders in any proceedings to which the Company or
any of its Restricted Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over
the Company or any of its Subsidiaries (an order being
deemed to be material for purposes of this clause (f) if a
violation thereof or a default thereunder would have a material
adverse effect on the properties, business, profits or condition
(financial or otherwise) of the Company and its Restricted
Subsidiaries taken as a whole or would materially adversely
affect the ability of the Company to perform its obligations
under the Notes or this Agreement); and

(g) Requested Information. With reasonable promptness,
such other publicly available data and information as any
Purchaser may reasonably request; provided, however, that if
at any time the Company shall no longer be required to file
periodic reports with the SEC, with reasonable
promptness, such other data and information as any Purchaser
may reasonably request.

The Company hereby covenants and agrees that each
Purchaser, so long as it is the holder of any of the Notes (or
such representatives as such Purchaser may designate)
may, upon reasonable prior written notice to the Company,

(i) inspect the public financial statements of the Company and
discuss the affairs of the business of the Company and its
Subsidiaries with the management of the Company, and

(ii)if a Default or Event of Default shall have occurred and
be continuing, the Company will permit each Purchaser, so
long as it is the holder of any of the Notes (or such Persons as
such Purchaser may designate), to visit and inspect any of the
properties of the Company or any Subsidiary to examine all
their books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective
officers, employees, and independent public accountants (and
by this provision the Company authorizes said accountants to
discuss with each Purchaser the finances and affairs of the
Company and its Subsidiaries) all during regular business
hours and as often as may be reasonably requested. The
Company shall be required to pay or reimburse any Purchaser
for expenses which such Purchaser may incur in connection
with any such visitation or inspection under this
subparagraph (ii).

6.5 Notice of Default or Event of Default. Promptly after a
Responsible Officer of the Company has become aware of the
existence of any condition or event which constitutes a Default
or an Event of Default, but in no event later than five days
after such officer has become aware of such event or
condition, the Company will deliver to each Purchaser a
written notice specifying the nature and period of existence
thereof and what action the Company is taking or proposes to
take with respect thereto.

6.6 Net Worth. The Company will not suffer nor will it
permit its Tangible Net Worth at any time to fall below Two
Hundred Fifty Million Dollars ($250,000,000).

6.7 Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer
to be incurred or to exist, any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind on its or
their property or assets, whether now owned or hereafter
acquired, or upon any income or profits therefrom, or transfer
any property for the purpose of subjecting the same to the
payment of obligations in priority to the payment of its or
their general creditors, or acquire or agree to acquire, or
permit any Restricted Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention
devices, except:

(a) liens in existence on the date of the execution of this
Agreement and in respect of any extension, renewal or
replacement (or successive extensions, renewals or
replacements) in whole or in part of any such lien; provided,
however, that the principal amount of indebtedness so secured
at the time of such extension, renewal or replacement shall be
limited to all or a part of the property (plus, in the case of
tangible property or assets, improvements and construction on
such property or assets) which was subject to the lien so
extended, renewed or replaced;

(b) liens, charges, encumbrances and priority claims incidental
to the conduct of business or the ownership of properties and
assets (including warehousemen's and attorneys' liens and
statutory landlords' liens) and deposits, pledges or liens to
secure the performance of bids, tenders or trade contracts, or
to secure statutory obligations, surety or appeal bonds or other
liens of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money,
provided in each case that (i) the obligation secured is not
overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings and (ii) the Company or
such Restricted Subsidiary shall set aside on its books reserves
deemed by it to be adequate with respect thereto;

(c) liens on and security interests in property (including
capitalized leases), including those existing on such property
at the time of acquisition thereof by the Company or any
Restricted Subsidiary, which (i) existed at the time of the
acquisition of such property by the Company or such
Restricted Subsidiary or which secure indebtedness assumed
or incurred by the Company or such Restricted Subsidiary
in connection with the acquisition of such property, (ii) do
not extend to any property of the Company or such Restricted
Subsidiary other than that so acquired and (iii) at the time the
indebtedness secured thereby is issued or incurred by the
Company or such Restricted Subsidiary or, in the case of
property acquired subject to an existing lien or security
interest, at the time of such acquisition, the aggregate amount
remaining unpaid on such indebtedness secured thereby
(whether or not assumed by the Company or such Restricted
Subsidiary) shall not exceed the acquisition price;

(d) liens for property taxes and assessments or governmental
charges or levies and liens securing claims or demands of
mechanics and materialmen, provided in each case that (i) the
obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate actions or
proceedings and (ii) the Company or such Restricted
Subsidiary shall set aside on its books reserves deemed by it
to be adequate with respect thereto;

(e) liens of, securing or resulting from any judgment or
award, the time for the appeal or petition for rehearing of
which shall not have expired, or in respect of which the
Company or a Restricted Subsidiary shall at any time in good
faith be prosecuting an appeal or proceeding for a review and
in respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured, provided that
in each case the Company or such Restricted Subsidiary shall
set aside on its books reserves deemed by it to be adequate
with respect thereto;

(f) any lien or other interest not deemed to constitute a
sale of receivables of the Company granted in connection with
any receivables financing, so long as such lien or interest does
not extend to any assets other than such receivables; and

(g) any lien other than those permitted by clauses (a) through
(f) above, provided that the aggregate amount of indebtedness
secured by liens permitted by this clause (g) shall not at any
time exceed 15% of the Company's Tangible Net Worth.

6.8 Restricted Payments. The Company will not declare or
pay any dividends or make any distributions in respect of its
common stock (other than those payable in common stock), or
redeem, purchase or otherwise acquire or retire common stock
if, thereafter, the cumulative amount of such payments made
after December 31, 1990 would exceed the sum of (i)
$50,000,000, (ii) 75% of net income (minus 100% in the event
of a loss) computed cumulatively beginning at January 1,
1991, and (iii) the net cash proceeds from the sale of capital
stock (including any increase in stockholders' equity resulting
from the reduction of the Company's loan to its Employee
Stock Ownership Plan Trust).

6.9 Mergers. Consolidations and Sales of Assets.
(a) Neither the Company nor any Restricted Subsidiary
will consolidate with or be a party to a merger with any other
corporation, provided, however, that:

(i) any Restricted Subsidiary may merge or consolidate with
or into the Company or any other Restricted Subsidiary so
long as the Company or such other Restricted Subsidiary shall
be the surviving or continuing corporation; and

(ii)any Restricted Subsidiary may merge or consolidate with
any Person other than the Company or any other Restricted
Subsidiary so long as the Company complies with the
provisions of subparagraph (b) hereof with respect to any
such transaction as if such transaction were undertaken in
the form of a sale of assets; and

(iii) the Company may merge or consolidate with or into any
other corporation if at the time of such merger or
consolidation and after giving effect thereto no Default or
Event of Default shall have occurred and be continuing and
the Company shall be the surviving corporation or, if not,
(x) the surviving corporation shall continue to be organized
under the laws of one of the states of the United States of
America and (y) the surviving corporation expressly agrees in
writing to assume all liabilities under and to be bound by the
Notes and this Agreement.

(b) Other than in the ordinary course of their businesses, the
Company and its Restricted Subsidiaries taken as a whole will
not, in any fiscal year, sell, lease, transfer or otherwise
dispose of more than 20% of their total assets (excluding sales
of receivables made in connection with asset securitization
financing in amounts up to $75,000,000) provided, however,
that the Company and its Restricted Subsidiaries taken as a
whole may dispose of more than 20% of their total assets if,
in connection with any such disposal, the Company offers to
redeem Notes, at par plus accrued interest, in an amount equal
to the amount by which the book value of such disposed assets
exceeds 20% of total assets.

6.10 Indebtedness.

(a) The Company will not incur additional Funded
Indebtedness unless, after giving effect thereto and to the
application of the proceeds thereof, total Funded Indebtedness
does not exceed 65% of Total Capitalization.

(b) The Company may incur Current Indebtedness without
limitation provided, however, that during any twelve month
period there shall have been a period of at least 30 consecutive
days during which the amount of the Company's Current
Indebtedness, when added to outstanding Funded
Indebtedness, equals a sum that is less than the maximum
amounts of Funded Indebtedness permitted by the limitation
set forth in the preceding paragraph.

(c) The Company will not permit Restricted Subsidiaries
to incur or be liable for indebtedness other than (i)
indebtedness outstanding as of the date of the execution of this
Agreement; (ii) any indebtedness of a Restricted Subsidiary
outstanding at the date on which such Restricted Subsidiary is
acquired by the Company; (iii) indebtedness incurred by a
Restricted Subsidiary in a country other than the United States
or Canada with respect to operations in such country; (iv)
indebtedness owed to the Company or another Restricted
Subsidiary; and (v) other indebtedness not permitted by
the foregoing categories that does not, in the aggregate, exceed
15% of Tangible Net Worth.

For purposes of compliance with the limitations set forth in
this Section 6.10, indebtedness shall include amounts in
respect of guarantees and other contingent liabilities (excluding
amounts due contingently or otherwise with respect to
obligations of Lake Superior) but only to the extent that such
liabilities exceed 10% of Tangible Net Worth.

6.11 Current Ratio. The Company will maintain a ratio
of current assets to current liabilities of at least 1.20.

6.12 Transactions with Affiliates. The Company will
not, and will not permit any Restricted Subsidiary to, enter
into or be a party to any transaction or arrangement with any
Affiliate (including, without limitation, the purchase from,
sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate), except upon terms no less
favorable to the Company or such Restricted Subsidiary than
would obtain in a comparable arm's-length transaction with a
Person other than an Affiliate or except as may be consistent
with past practice and as may be advisable, in the reasonable
judgment of the Company, in connection with the business of
the Company.

6.13 Repurchase of Notes. Neither the Company nor
any Restricted Subsidiary or Affiliate, directly or indirectly,
may repurchase or make any offer to repurchase any Notes
unless the offer has been made to repurchase Notes, pro rata,
from all holders of the Notes at the same time and upon the
same terms. In case the Company or any Restricted
Subsidiary or Affiliate repurchases any Notes, such Notes shall
thereafter be canceled and no Notes shall be issued in
substitution therefor.

6.14 Regulations U and X. The Company will not nor
will it permit any Subsidiary to take any action that would
result in any non-compliance of the loans made hereunder with
Regulations U and X of the Board of Governors of the Federal
Reserve System.

6.15 Compliance with Laws. The Company will
substantially comply with and will cause each Subsidiary to
substantially comply with all statutes, laws, rules and
regulations applicable to the Company or any Subsidiary
(other than statutes, laws, rules and regulations the validity or
applicability of which is being contested by the Company or
any Subsidiary, as the case may be, in good faith by
appropriate proceeds diligently prosecuted) or any statutes,
laws, rules and regulations which may be legally imposed in
the future in jurisdictions in which the Company or any
Subsidiary may then be doing business, except where failure
to so comply would not materially adversely affect the
properties, business, operations or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a
whole, or the ability of the Company to perform its obligations
contained in this Agreement or the Notes.

SECTION 7. Events of Default and Remedies Therefor.

7.1 Events of Default. Any one or more of the following shall
constitute an ""Event of Default"" as the term is used herein:

(a) The Company shall fail to make payment of interest on
any Note when the same shall become due and such default
shall continue for a period of more than five days; or

(b) The Company shall fail to make any payment of the
principal of any Note or of the Make-Whole Premium on any
Note at the expressed or any accelerated maturity date or at
any date fixed for payment therefor in accordance with this
Agreement; or

(c) Default shall occur in the observance or performance
of any other provision of this Agreement, any Note or any
other certificates or agreements furnished by the Company
pursuant hereto which is not remedied within 30 days; or

(d) If any representation or warranty made by the Company
herein, or made by the Company in any statement or
certificate furnished by the Company in connection with the
consummation of the issuance and delivery of the Notes or
furnished by the Company pursuant hereto, is untrue or
misleading in any material respect as of the date of the
issuance or making thereof; or

(e) The Company or any Subsidiary shall fail to pay any
principal of, or any interest when due on any indebtedness (or
guaranty of indebtedness) of the Company or such
Subsidiary having an aggregate principal amount in excess of
$15,000,000; or

(f) Any default (matured or unmatured) or other event or
condition shall occur or exist under or in respect of any
indebtedness (including in connection with guarantees and
capitalized leases) of the Company or any Subsidiary with a
principal amount in excess of $15,000,000, or under any
agreement securing or relating to such indebtedness and such
default, event or condition shall cause the holder or holders of
such indebtedness to accelerate the maturity of such
indebtedness or otherwise to demand immediate
repayment thereof; or

(g) The Company or any Subsidiary becomes insolvent or
bankrupt, is generally not paying its debts as they become due
or makes an assignment for the benefit of creditors, or the
Company or any Subsidiary applies for or consents to the
appointment of a trustee or receiver for the Company or such
Subsidiary or for the major part of the property of either; or

(h) A custodian, trustee or receiver is appointed for the
Company or any Subsidiary or for the major part of the
property of either and is not discharged within 60 days after
such appointment; or

(i) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any
bankruptcy or similar law or laws for the relief of debtors, are
instituted by or against the Company or any Subsidiary and,
if instituted against the Company or any Subsidiary, are
consented to or are not dismissed within 60 days after such
institution; or

(j) Final judgment or judgments for the payment of money
aggregating in excess of $7,500,000 is or are outstanding
against the Company or any Subsidiary or against any property
or assets of either and any one of such judgments has
remained unpaid, unvacated, unbonded or unstayed by appeal
or otherwise for a period of 60 days from the date of its entry.

7.2 Acceleration of Maturities. (a) When any Event of
Default described in Section 7.1(a) or (b) has occurred and is
continuing or any Event of Default has been declared pursuant
to subparagraph (c) below, any holder of any Note may, by
notice in writing sent by registered or certified mail to the
Company, declare the entire principal and all interest accrued
on such Note to be, and such Note shall thereupon become,
forthwith due and payable, without any presentment, demand,
protest or other notice of any kind all of which are hereby
expressly waived by the Company; provided, however, that if
within 30 days thereof, such default has been cured and if the
holders of at least two-thirds of the aggregate principal amount
of all Notes then outstanding consent, such Event of Default
shall not be deemed to have occurred.

(b) When any Event of Default described in Sections 7.1(g),
(h) or (i) has occurred, then the Notes shall immediately
become due and payable without presentment, demand or
notice of any kind or any other action on the part of the
Purchasers.

(c) When any Default described in Sections 7.1(c), (d), (e), (f)
or (j) has occurred and is continuing, an Event of Default may
be declared upon written notice of such action to the
Company, consented to by the holders of at least two-thirds of
the aggregate principal amount of all Notes then outstanding.

Upon any of the Notes becoming due and payable as a result
of any Event of Default as aforesaid, the Company will
forthwith pay to the holder of such Notes the entire principal
and interest accrued on the Notes. No course of dealing on
the part of the Purchasers or the holders of any Notes nor any
delay or failure on the part of the Purchasers or the holders of
any Notes to exercise any right shall operate as a waiver of
such right or otherwise prejudice such Purchaser's or holder's
rights, powers and remedies. The Company further agrees, to
the extent permitted by law, to pay any Purchaser of the Notes
all costs and expenses incurred by it in the collection of the
Notes upon any default hereunder or thereon, including
reasonable compensation to such holder's attorneys for all
services rendered in connection therewith.

SECTION 8. Interpretation of Agreement; Definitions.

8.1 Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required
to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with
generally accepted accounting principles or, if appropriate, the
rules and regulations of the SEC to the extent applicable,
except where such principles are inconsistent with the
requirements of this Agreement.

8.2 Directly or Indirectly. Where any provision in this
Agreement refers to an action to be taken by any Person, or to
an action which such Person is prohibited from taking, such
provision shall be applicable whether the action in question is
taken directly or indirectly by such Person.

8.3 Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the
following meanings and the following definitions shall be
equally applicable to both the singular and plural forms of any
of the terms herein defined:

"Affiliate" shall mean any Person (other than a
Subsidiary) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under
common control with, the Company. A Person shall be
deemed to control another person if the controlling Person
possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of the controlled
Person, whether through the ownership of Voting Stock or by
membership, contract or otherwise.

"Agreement" means this Note Purchase Agreement, as it
may be amended, modified or supplemented from time to time
and in effect.

"Base Reinvestment Rate" means the arithmetic mean of
the yields under the respective headings "This Week" and
"Last Week" published in the Statistical Release under the
caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the
Remaining Life to Maturity of the principal being prepaid.
If no maturity exactly corresponds to such Remaining Life to
Maturity, yields for the two published maturities most closely
corresponding to such Remaining Life to Maturity shall be
calculated pursuant to the immediately preceding sentence and
the Base Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding
in each of such relevant period to the nearest month. For the
purposes of calculating the Base Reinvestment Rate, the most
recent Statistical Release published prior to the date of
determination of the Make-Whole Premium shall be used.

"Closing Date" has the meaning given to that term in
Section 1.2(b).

"Code" shall mean the Internal Revenue Code of 1986, as
amended (or any subsequent Federal income tax statute or
code).

"Company" has the meaning given to that term in the
introduction to this Agreement, and shall include the permitted
successors and assigns of the Company.

"Current Indebtedness" shall mean, at any date, the
consolidated current obligations for borrowed money of the
Company and its Restricted Subsidiaries as shown on their
books and records, less the current portion of Funded
Indebtedness included therein.

"Default" shall mean any event or condition, the
occurrence of which constitutes or would, with the lapse of
time or the giving of notice, or both, constitute an Event of
Default.

"Employee Stock Ownership Plan Trust" means the
Pentair, Inc. Retirement Savings and Stock Incentive Plan
trust established by the Trust Agreement dated as of March 1,
1990 between the Company and State Street Bank and Trust
Company.

"ERISA" has the meaning given to that term in Section
3.12.

"ERISA Affiliate" means any corporation or trade or
business (whether or not incorporated) which is, along with
the Company, a member of a controlled group of corporations
or a group of businesses which are under common control for
any purpose within the meanings of Sections 414(b) and
414(c), respectively, of the Code.

"Event of Default" has the meaning given to that term in
Section 7.1.

"Funded Indebtedness" shall mean indebtedness of the
Company with an original term to maturity of greater than one
year.

"Institutional Investor" has the meaning given to the term
"qualified institutional buyer" in rule 144A of the Securities
Act of 1933, as amended, and any other rules, regulations and
releases promulgated thereunder.

"Lake Superior" has the meaning given to that term in
Section 3.16.

"Make-Whole Premium" shall mean, in connection with
any prepayment, the excess, if any, of (a) the aggregate
present value as of the date of such prepayment of (i) the
amount of principal being prepaid and (ii) the amount of
interest (exclusive of interest accrued to the date of
prepayment) that would have been payable in respect of such
principal amount if such prepayment had not been made,
determined by discounting such amounts at the Reinvestment
Rate from the respective dates on which they would have been
due and payable, over (b) 100% of the amount of principal
being prepaid. If the Reinvestment Rate is equal to or higher
than 6.29% in the case of the Series A Notes, 7.06% in the
case of the Series B Notes, 7.30% in the case of the Series C
Notes or 7.42% of the Series D Notes, the Make-Whole
Premium with respect to such particular Series of Notes shall
be zero.

"Maturity Dates" has the meaning given to that term in
Section 1.1.

"Notes" has the meaning given to that term in Section 1.1.

"Permitted Investments" means (a) any evidence of
indebtedness, maturing not more than one year after the date
of issue, issued by the United States of America, or any
instrumentality or agency thereof and guaranteed fully as to
principal, interest and premium, if any, by the United States of
America, (b) any certificate of deposit, maturing not more than
360 days after the date of purchase issued by a commercial
banking institution which is a member of the Federal Reserve
System or a Canadian banking institution and which has a
combined capital and surplus and undivided profits of not less
than $100 million, (c) commercial paper, maturing not more
than 270 days after the date of purchase, issued by a
corporation (other than the Company or any Subsidiary of the
Company or any of their respective Affiliates) organized and
existing under the laws of any state within the United States
of America and having a rating, at the time of purchase, of
"P-1" (or higher) according to Moody's Investors Service,
or `"A-I" (or higher) according to Standard & Poor's
Corporation, (d) demand deposits with any bank or trust
company, and (e) reverse repurchase agreements with respect
to indebtedness issued by the United States of America, or any
instrumentality or agency thereof and guaranteed fully as to
principal, interest and premium, if any, by the United States of
America.

"Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, and any
governmental agency or political subdivision thereof.

"Purchasers" has the meaning given to that term in
Section 1.1, and shall include the successors and assigns of the
Purchasers, or of any of them.

"Reinvestment Rate" means the sum of (i) the Base
Reinvestment Rate plus (ii) 1/2 of 1%.

"Remaining Life to Maturity" of the principal amount of
any Note being prepaid shall mean, as of the time of
any determination thereof, the number of months from the date
of such determination to the Maturity Date.

"Responsible Officer" shall mean the Chief Executive
Officer, President, Executive Vice President, any Vice
President or the Treasurer of the Company.

"Restricted Investments" shall mean any investment made
by the Company or its Restricted Subsidiaries after the date of
this Agreement other than: (i) investments made in the
ordinary course of business; (ii) investments in
Subsidiaries which, thereafter, become Restricted Subsidiaries;
(iii) investments in Permitted Investments; and (iv) additional
investments made by the Company in respect of contributions
or loans to Lake Superior to the extent that the aggregate of
such additional investments, together with all such additional
investments in Lake Superior previously made by the
Company after December 31, 1992 but not repaid or otherwise
returned to the Company at or prior to the time such additional
investments are made, do not exceed 15% of Total Assets as
determined for purposes of the time of the making of such
additional investments.

"Restricted Subsidiary" means any Subsidiary which is
80% or more owned (directly or indirectly) by the Company.

"SEC" has the meaning given to that term in Section 3.3.

"Security" shall have the same meaning as in Section 2(1)
of the Securities Act of 1933, as amended.

"Series A Notes" has the meaning given to that term in
Section 1.1.

"Series B Notes" has the meaning given to that term in
Section 1.1.

"Series C Notes" has the meaning given to that term in
Section 1.1.

"Series D Notes" has the meaning given to that term in
Section 1.1.

"Statistical Release" shall mean the statistical release
designated `"H.IS (519) `" or any successor publication
which is published weekly by the Federal Reserve System
and which establishes yields on actively traded United States
Government Securities adjusted to constant maturities or, if
such statistical release is not published at the time of
any determination hereunder, then any other reasonably
comparable index.

"Subsidiary" means an existing or future corporation, the
majority of the outstanding capital stock or voting power, or
both, of which is (or upon the exercise of all outstanding
warrants, options and other rights would be) owned at the time
in question by the Company and/or one or more corporations
which are themselves Subsidiaries of the Company. For
purposes of this Agreement, the term "Subsidiary" shall not be
deemed to include Lake Superior.

"Tangible Net Worth" shall mean the total stockholders'
equity of the Company computed in accordance with
generally accepted accounting principles minus the sum of (i)
the amount (if any) by which goodwill and other intangible
assets acquired after the date of this Agreement exceeds 10%
of total stockholders' equity and (ii) the amount (if any) by
which Restricted Investments exceeds 10% of total
stockholders' equity.

"Total Assets" shall mean the total assets of the Company
and its subsidiaries on a consolidated basis less the increase
over $35,085,000 in the amount entitled "Investment in joint
venture"" or otherwise representing the Company's investment
in Lake Superior as reflected in the Company's then most
recent quarterly or annual balance sheet filed with the SEC on
Form 10-K or Form 10-Q, as appropriate, or, in the event that
the Company shall no longer be required to file periodic
reports with the SEC, in the most recent audited financial
statement delivered to the Purchasers pursuant to Section 6.4
hereof.

"Total Capitalization" shall mean the sum of Tangible Net
Worth, Funded Indebtedness (to include current indebtedness
where such indebtedness is added to Funded Indebtedness to
calculate covenant compliance), and deferred income taxes as
reflected on the consolidated financial statements of the
Company.

"Voting Stock" shall mean Securities of any class or
classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).

SECTION 9. Miscellaneous.

9.1 Registered Notes: Several Obligations of Purchasers.

(a) The Company shall cause to be kept at its principal off ice
a register for the registration and transfer of the Notes, and the
Company shall register or transfer or cause to be registered or
transferred, as hereinafter provided and under such reasonable
regulations as it may prescribe, the Notes issued pursuant to
this Agreement.

(b) Subject to the limitations contained in this Agreement, at
any time, and from time to time, the registered holder of any
Note may transfer such Note, upon surrender thereof at the
principal office of the Company duly endorsed or accompanied
by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized
in writing.

(c) The Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof
for all purposes of this Agreement. Payment of or on account
of the principal, premium, if any, and interest on any
registered Note shall be made upon the written order of such
registered holder.

(d) If there shall at any time exist more than one Purchaser,
the obligations of each Purchaser shall be several and not joint
and no Purchaser shall be liable or responsible for the acts,
representations, covenants or other agreements of any other
Purchaser.

9.2 Transfer and Exchanges of Notes. Subject to
Section 4, any Purchaser of the Notes may at any time transfer
the Notes, or any of them, to another Institutional Investor in
an amount equal to the lesser of (i) the principal amount of all
Notes held by such Purchaser or (ii) $5,000,000;
provided that, notwithstanding the foregoing, no Purchaser
may at any time transfer the Notes, or any of them, to any
Person that directly or indirectly through one of its Affiliates
competes with the Company, any of the Company's
Subsidiaries, or Lake Superior in their respective lines of
business without the prior written consent of the Company
(which consent shall not be unreasonably withheld). At any
time, and from time to time, upon not less than ten days'
notice to that effect given by the holder of any Note initially
delivered or of any Note substituted therefor pursuant to this
Agreement, and, upon surrender of such Note at its office, the
Company will deliver in exchange therefor, without expense
to the holder, except as set forth below, Notes for the same
aggregate principal amount as the then unpaid principal
amount in excess thereof as such holder shall specify (or if the
aggregate principal amount of the Note or Notes held by such
holder is less than $100,000, then in the denomination of such
principal amount), dated as of the date to which interest has
been paid on the Note so surrendered or, if such surrender is
prior to the payment of any interest thereon, then dated as of
the date of issue, registered in the name of such Person or
Persons as may be designed by such holder, and otherwise of
the same form and tenor as the Note so surrendered for
exchange.

9.3 Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss,
theft, mutilation or destruction upon delivery of a bond of
indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of any Note,
the Company will make and deliver without expense to the
holder thereof, a new Note, of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Note. If the Purchaser or any
subsequent Institutional Investor is the owner of any such lost,
stolen or destroyed Note, then an affidavit of an authorized
officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Note at the time of
such loss, theft or destruction shall be accepted as satisfactory
evidence thereof and no further indemnity shall be required.

9.4 Expense; Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the
Company agrees to pay directly all of the Purchasers'
out-of-pocket expenses (including, without limitation, the
reasonable fees and expenses of Winston & Strawn, special
counsel to the Purchasers) in connection with the
preparation, negotiation, documentation, execution and
delivery of the Notes, this Agreement, and the transactions
contemplated hereby and thereby, duplicating and printing
costs and charges for shipping the Notes, adequately insured
to each Purchaser at its respective home office or at such other
place as such Purchaser may designate, and so long as such
Purchaser holds the Notes, all expenses (including legal fees)
relating to any amendment, waivers or consents pursuant to
the provision hereof. The Company also agrees that it will
pay and save each Purchaser harmless against any and all
liability with respect to stamp and other taxes (other than
income taxes), if any, which may be payable or which may be
determined to be payable in connection with the execution and
delivery of this Agreement whether or not the Notes are
outstanding. The Company agrees to protect and indemnify
each Purchaser against any liability for any and all brokerage
fees and commissions payable or claimed to be payable to any
Person for representation of the Company (including
Continental Bank, N.A.) in connection with the
transactions contemplated by this Agreement.

9.5 Amendments, Waivers and Consents. (a) Any term,
covenant, agreement or condition of this Agreement may, with
the consent of the Company, be amended or compliance
therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the
holders of at least 66-2/3% in aggregate principal amount of
outstanding Notes; provided that without the written consent
of the holders of all of the Notes then outstanding, no such
waiver, modification, alteration or amendment shall be
effective (i) which will change the time of payment of the
principal of or the interest on any Note or reduce the principal
amount thereof or change the rate of interest thereon, (ii)
which will change any of the provisions with respect to
prepayments under Section 2, (iii) which will change the
percentage of holders of the Notes required to consent to any
such amendment, alteration or modification or (iv) which will
amend any of the provisions of Section 6.13, Section 7 or this
Section 9.5; provided, however, that notwithstanding the
foregoing, any Default or Event of Default described in
Section 7.1(c), (d), (e), (f) or (j) may be waived if the
Company shall have obtained the waiver in writing of the
holders of at least 66-2/3% in aggregate principal amount of
the Notes then outstanding.

(b) The Company will not solicit, request or negotiate for
or with respect to any proposed waiver or amendment of any
of the provisions of this Agreement or the Notes unless each
holder of the Notes (irrespective of the amount of Notes then
owned by it) shall be informed thereof by the Company and
shall be afforded the opportunity of considering the same and
shall be supplied by the Company with any information it may
reasonably request to make an informed decision with
respect thereto. Executed or true and correct copies of any
waiver or consent effected pursuant to the provisions of this
Section 9.5 shall be delivered by the Company to each holder
of outstanding Notes forthwith following the date on which the
same shall have been executed and delivered by the holder or
holders of the requisite percentage of outstanding Notes. The
Company will not, directly or indirectly, pay or cause to be
paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security
interest in any property to any holder of the Notes or any
waiver or amendment of any of the terms and provisions of
this Agreement unless such remuneration is concurrently paid
or such security interest is concurrently and ratably granted, on
the same terms, ratably to the holders of all of the Notes then
outstanding.

(c) Any such amendment or waiver shall apply equally to all
of the holders of the Notes and shall be binding upon them,
upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate
such amendment or waiver. No such amendment or waiver
shall extend to or affect any obligation not expressly amended
or waived or impair any right consequent thereon.

9.6 Powers and Rights Not Waived: Remedies Cumulative.
No delay or failure on the part of the holder of any Note in
the exercise of any power or right shall operate as a waiver
thereof; nor shall any single or partial exercise of the same
preclude any other or further exercise thereof, or the exercise
of any other power or right, and the rights and remedies of the
holder of any Note are cumulative and are not exclusive of
any rights or remedies any such holder would otherwise have,
and no waiver or consent shall extend to or affect any
obligation or right not expressly waived or consented to.

9.7 Notices. All communications provided for hereunder
shall be in writing and, if to a particular Purchaser, delivered
by overnight or same day courier or mailed by registered or
certified mail, addressed to such Purchaser at its address
appearing on Schedule I to this Agreement or such other
address as such Purchaser, or the subsequent holder of the
Notes initially issued to such Purchaser, may designate to the
Company in writing, and if to the Company, delivered or
mailed by registered or certified mail to:

Pentair, Inc.
1500 County Road B2 West
St. Paul, Minnesota 55113
Attn: Chief Financial Officer

or to such other address as the Company may in writing
designate to the Purchasers or to a subsequent holder of the
Notes initially issued to the Purchasers.

9.8 Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall
inure to the Purchasers' benefit and to the benefit of the
Purchasers' successors and assigns, including each successive
holder or holders of the Notes, and if any subsequent holder
of any Note or Notes shall have presented the same to the
Company for inspection, accompanied by a written designation
of the address to which notice in respect of a Note or Notes of
such holder is to be given, then wherever in this Agreement it
is provided that notice shall be given to the holders of Notes,
the notice in respect of the Notes so presented shall be
addressed to such holder at the address so given.

9.9 Survival of Covenants and Representations. All
covenants, representations and warranties made by the
Company herein and in any certificate delivered pursuant
hereto, whether or not in connection with the closing, shall
survive the closing and the delivery of this Agreement and the
Notes. In addition, the right to take any action, including,
without limitation, instituting any legal proceeding based
upon any breach of the representations and warranties made by
the Company herein, in the Notes, this Agreement and in any
certificate delivered pursuant thereto, whether or not in
connection with the closing, shall survive the closing and the
delivery of this Agreement and the Notes.

9.10 Severability. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the
validity of any remaining portion, which remaining portion
shall remain in full force and effect as if this Agreement had
been executed with the invalid portion thereof eliminated and
it is hereby declared the intention of the parties hereto that
they would have executed the remaining portions of this
Agreement without including therein any such part, parts, or
portion which may, for any reason, be hereafter declared
invalid.

9.11 Governing Law. This Agreement and the Notes
issued and sold hereunder shall be governed by and construed
in accordance with the internal laws of the State of Minnesota,
and not by the conflicts of law principles of such state.

9.12 Counterparts. This Agreement may be executed in
any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.

9.13 Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only
and shall not affect the meaning or construction of any of the
provisions hereof.

The execution hereof by the Purchasers shall constitute a
contract between the Company and the Purchasers for the uses
and purposes set forth herein, and this Agreement may be
executed in any number of counterparts, each executed
counterpart constituting an original but all together only one
agreement.

PENTAIR, INC.

By: Joseph R. Collins
Its: Chief Financial Officer

UNITED OF OMAHA LIFE INSURANCE COMPANY

By: M.G Echtenkamp
Its: Second Vice President

COMPANION LIFE INSURANCE COMPANY

By: David Lee
Its: Vice President & Actuary

By: Richard A. Witt
Its: Second Vice President & Assistant Treasurer

PRINCIPAL MUTUAL LIFE INSURANCE COMPANY

By: Sarah J. Pitts
Its: Counsel

By: Warren Shank
Its: Counsel

NIPPON LIFE INSURANCE COMPANY OF AMERICA

By: Sarah J. Pitts
Its: Counsel

By: Warren Shank
Its: Counsel

LUTHERAN BROTHERHOOD

By: Mark Satchell
Its: Securities Analyst

AMERICAN UNITED LIFE INSURANCE COMPANY

By: Kent R. Adams
Its: Vice President

MODERN WOODMEN OF AMERICA

By: W.B Foster
Its: President

THE FRANKLIN LIFE INSURANCE COMPANY

By: Daniel C. Leimbach
Its: Vice President

By: Elizabeth E. Arthur
Its: Assistant Secretary

AMERITAS LIFE INSURANCE CORP.

By: Ameritas Investment Advisors, Inc. as agent
/Patrick J. Henry
Its: Vice President - Fixed Income Securities

SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$5.0 $5.0 $3.0 $5.0

UNITED OF OMAHA LIFE INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175
Attn: Investment Division

Payments

All payments on or in respect
of the Notes to be by bank wire
transfer of Federal or other
immediately available funds
(identifying the payment as
Pentair, Inc. Series A, B, C or
D Senior Notes due 1997-2001
and specifying the respective
amounts of principal or
interest) to:

FirstTier Bank-Omaha
17th & Farnam Streets
Omaha, Nebraska 68102

ABA #1040-0002-9

For credit to United of Omaha
Life Insurance Company Account
#144-7-076

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above, except notice with
respect to payment, and written
confirmation of each such
payment, to be addressed:

United of Omaha Life Insurance
Company
Attn: Investment/Securities
Accounting
Mutual of Omaha Plaza
Omaha, Nebraska 68175

Taxpayer I.D. #47-0322111

SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$0.0 $0.0 $2.0 $0.0

COMPANION LIFE INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175
Attn: Investment Division

with a duplicate notice to:
Companion Life Insurance Company
401 Theodore Fremd Avenue
Rye, New York 10580-1493
Attn: Financial Division

Nominee Name: HARE & CO.

Payments

All payments on or in respect
of the Notes to be by bank wire
transfer of Federal or other
immediately available funds
(identifying the payment as
Pentair, Inc. Series C Senior
Notes due 2000 and specifying
the respective amounts of
principal or interest and the
payable date) to:

Companion Life Insurance
Company
c/o The Bank of New York
Acct. #111566 Income Collection
Attn: P&I Department
CLICO

ABA #021000018

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above, except notice with
respect to payment, and written
confirmation of each such
payment, to be addressed:

Companion Life Insurance Company
Mutual of Omaha Plaza
Omaha, Nebraska 68175
Attn: Investment Securities
Accounting

with a duplicate notice to:
Companion Life Insurance Company
401 Theodore Fremd Avenue
Rye, New York 10580-1493
Attn: Financial Division

Taxpayer I.D. #13-6062916

SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$0.0 $9.8 $0.0 $10.0

PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
711 High Street
Des Moines, Iowa 50392-0800
Attn: Investment Department
Securities Division

Payments

All payments on or in respect
of the Notes to be by bank wire
transfer of Federal or other
immediately available funds
(identifying the payment as
Pentair, Inc. Series B or D
Senior Notes, principal or
interest) to:

Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309

ABA #073000228

Payments should be directed to
Principal Mutual Life Insurance
Company General Account #014752
and should reference Bond No.
1-B-24549 in the case of the
Series B Notes and Bond No. 1-
B-24550 in the case of the
Series D Notes.

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above, except notice with
respect to payment, and written
confirmation of each such
payment, to be addressed:

Principal Mutual Life Insurance
Company
711 High Street
Des Moines, Iowa 50392-0810
Attn: Investment Department
Accounting and Treasury

Taxpayer I.D. #42-0127290

SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$0.0 $0.2 $0.0 $0.0

NIPPON LIFE INSURANCE COMPANY OF AMERICA
c/o Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0800
Attn: Investment Department
Securities Division

Payments

All payments on or in respect
of the Notes to be by bank wire
transfer of Federal or other
immediately available funds
(identifying the payment as
Pentair, Inc. Series B Senior
Notes, principal or interest) to:

Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309

ABA #073000228

Payments should be directed to
Nippon Life Insurance Company
of America General Account
#7051775 and should reference
Bond No. 500-B-24549.

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above, except notice with
respect to payment, and written
confirmation of each such
payment, to be addressed:

Nippon Life Insurance Company
of America
c/o Principal Mutual Life Insurance
Company
711 High Street
Des Moines, Iowa 50392-0810
Attn: Investment Department
Accounting and Treasury

Taxpayer I.D. #04-2509896

SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$10.0 $0.0 $0.0 $0.0

LUTHERAN BROTHERHOOD
625 Fourth Avenue South
Minneapolis, Minnesota 55415
Attn: Investment Division

Payments

All payments on or in respect
of the Notes to be by bank wire
transfer of Federal or other
immediately available funds
(identifying the payment as
Pentair, Inc. Series A Senior
Notes due 1997 and specifying
respective amounts of principal
or interest) to:

Norwest Bank Minnesota, N.A.
For credit to Trust Clearing
Account 08-40-245

ABA #091000019

Payments should be directed to
A/C Lutheran Brotherhood
Account No. 7-26513-00-5

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above, except notice with
respect to payment, and written
confirmation of each such
payment, to be addressed:

Lutheran Brotherhood
625 Fourth Avenue South
Minneapolis, Minnesota 55415
Attn: Investment Accounting

Taxpayer I.D. #41-0387500

SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$0.0 $0.0 $8.0 $0.0

AMERICAN UNITED LIFE INSURANCE COMPANY
One American Square
P.O. Box 368
Indianapolis, Indiana 46206-0368

*to be issued as 4 notes of Payments $2,000,000 each

All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying the payment as Pentair, Inc. Series C Senior Notes
due 2000 and specifying the respective amounts of principal
or interest) to:

Bank One Indianapolis
Trust Cage, 16th Floor
111 Monument Circle
Indianapolis, Indiana 46277

ABA #0740-0001-0

Payments should be directed to
American United Life Insurance
Company Account #32032-50

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above.

Taxpayer I.D. #35-0145825
SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$0.0 $2.5 $2.5 $0.0

MODERN WOODMEN OF AMERICA
1701 First Avenue
Rock Island, Illinois 61201
Attn: Investment Division

Payments

All payments on or in respect
of the Notes to be by bank wire
transfer of Federal or other
immediately available funds
(identifying the payment as
Pentair, Inc. Series B or C
Senior Notes and specifying the
respective amounts of principal
or interest) to:

Harris Trust & Savings Bank
111 West Monroe Street
Chicago, Illinois 60690

ABA #071-000-288

Payments should be directed to
the account of Modern Woodmen
of America Account #347-904-5

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above.

Taxpayer I.D. #36-1493430<PAGE>
SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$0.0 $2.0 $2.0 $0.0

THE FRANKLIN LIFE INSURANCE COMPANY
Franklin Square
Springfield, Illinois 62713
Attn: Investment Department

Payments

Morgan Guaranty Trust Company
of New York
23 Wall Street
New York, New York 10015
Attn: Money Transfer Department

ABA #0210-0023-8

Payments should be directed to
The Franklin Life Insurance
Company Account #022-05-988

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above.

Taxpayer I.D. #37-0281650

SCHEDULE I
(to Note Purchase Agreement)

Principal Amount of Each
Series of Notes
Name and Address to be Purchases (000,000
of Purchaser omitted)

A B C D
$0.0 $0.0 $3.0 $0.0

AMERITAS LIFE INSURANCE CORP.
c/o Ameritas Investment Advisors,Inc.
210 Gateway Mall, Suite 200
Lincoln, Nebraska 68505
(Mailing Address:
P.O. Box 81889
Lincoln, Nebraska 68501)

Payments

FirstTier Bank-Lincoln

ABA #104000032

Payments should be directed to
Ameritas Life Insurance Corp.
Account No. 070-018

Notices

All notices and communications
to this purchaser should be
addressed as first provided
above.

Taxpayer I.D. #47-0098400
Schedule 3.2

SUBSIDIARIES

All of the following are Restricted Subsidiaries.
All of the following are wholly-owned Subsidiaries of
the Company except as noted:

State or Other
Jurisdiction of
Incorporation
Subsidiary or Organization

Cross Pointe Paper Corporation Minnesota

Flambeau Paper Corp.1 Wisconsin

Miami Paper Corporation1 Minnesota

Delta International Machinery Corp. Minnesota

Pentair Canada, Inc.2 Ontario, Canada

FC Holdings Inc. Delaware

Federal-Hoffman, Inc.3 Minnesota

Hoffman Engineering Company
Limited4 United Kingdom

Federal-Hoffman International,
Inc.4 Guam

McNeil (Ohio) Corporation Minnesota

APNO S.A. de C.V.5 Mexico

Lincoln GmbH5 Germany

Lincoln Belgium N.V.6 Belgium

Pentair Canada, Inc.2 Ontario, Canada

Pentair FSC Corporation5 U.S. Virgin Islands

Niagara of Wisconsin Paper
Corporation Wisconsin

Pentair Duluth Corp.7 Minnesota

Pentair Financial Corporation Minnesota

Pentair Sales Corp. Minnesota

Penwald Insurance Company Vermont

Porter-Cable Corporation Minnesota

NOTES:

1. A wholly-owned subsidiary of Cross Pointe Paper
Corporation.

2. Wholly-owned by Delta International Machinery Corp.
and McNeil (Ohio) Corporation.

3. A wholly-owned subsidiary of FC Holdings Inc.

4. A wholly-owned subsidiary of Federal-Hoffman, Inc.

5. A wholly-owned subsidiary of McNeil (Ohio) Corporation.

6. Wholly-owned by Lincoln GmbH and McNeil (Ohio)
Corporation.

7. Pentair Duluth Corp. has a 50% interest in Lake Superior
Paper Industries, a joint venture with Minnesota Paper
Incorporated.

Schedule 3.3

FINANCIAL STATEMENT MATTERS

Two changes in properties have occurred since December 31,
1991 that are not in the ordinary course of business.

In June 1992, McNeil (Ohio) Corporation purchased the
product lines and inventory of the automotive service division
of Hein-Werner Corporation, which includes the manufacture,
sale and distribution of mechanical or hydraulic lifting devices;
automotive battery service equipment; and welding equipment.
The purchase price was less than $10, 000,000.

In September 1992, Delta International Machinery Corp. sold
its assets related to its Brazilian operations for a Price of
approximately $5,000,000.

Because of materiality standards, the Company was not
required to and did not file a report on Form 8-K with the
Securities and Exchange Commission for either of the above
transactions.

<TABLE>
EXHIBIT 11
<CAPTION>
PENTAIR, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE

YEARS ENDED DECEMBER 31
1989 1990 1991 1992 1993
INCOME ($ THOUSANDS)1

<S> <C> <C> <C> <C> <C>
Income before cumulative effects
of accounting changes $36,407 $33,012 $41,100 $42,800 $46,600
Cumulative effects of accounting changes - - - (41,625) -
Net Income 36,407 33,012 41,100 1,175 46,600
Preferred Dividend Requirements2 4,234 5,914 6,358 8,545 6,114

Earnings Available to Common and
Common Equivalent Shares - Primary 32,173 27,098 34,742 (7,370) 40,486

Preferred dividends assuming
conversion of Preferred Stock:
Series 1987 3,000 3,000 3,000 3,000 620
Series 19882 1,234 685 658 1,065 1,044
Series 19902 - 2,229 2,700 4,480 4,450

Tax benefit on preferred ESOP dividend
eliminated due to conversion into common - - - (700) (833)
Tax benefit on ESOP dividend assuming con-
version to common - at common dividend rate - 547 690 215 276

Earnings available to Common and
Common Equivalent shares - Diluted $36,407 $33,559 $41,790 $ 690 $46,043

SHARES (thousands)1
Weighted average number of shares
outstanding during the period 16,175 16,044 15,651 15,792 17,678
Shares issuable on exercise of stock
options less shares repurchaseable
from the proceeds 37 26 128 144 213

Common and Common Equivalent
Shares - Primary 16,212 16,070 15,779 15,936 17,891

Shares issuable on conversion of:
$1.50 Cumulative Convertible
Preferred Stock Series 1987 2,178 2,178 2,178 2,178 415
$7.50 Callable Cumulative
Convertible Preferred Stock Series 1988 780 718 660 561 522
8% Callable Cumulative Voting Convertible
Preferred Stock Series 1990 - 1,761 2,151 2,142 2,127

Common and Common Equivalent
Shares - Diluted 19,170 20,727 20,768 20,817 20,955

EARNINGS PER SHARE1

PRIMARY
Earnings before cumulative effects
of accounting changes $1.99 $1.69 $2.20 $2.15 $2.26
Cumulative effects of accounting changes - - - (2.61) -
Net income (loss) $1.99 $1.69 $2.20 $(.46) $2.26

DILUTED
Earnings before cumulative effects
of accounting changes $1.90 $1.62 $2.01 $2.03 $2.20
</TABLE>
[FN]
FOOTNOTES:
<F1>
1 Adjusted for stock dividend of 50% in June 1993.
<F2>
2 Net of tax benefit on shares held by an ESOP in 1990 and 1991.

EXHIBIT 13

Pentair, Inc. is a diversified manufacturer that grows value for stakeholders
by acquiring, renewing and developing manufacturing companies. Pentair
businesses are organized into three groups: Specialty Products, General
Industrial Equipment and Paper. Our 8,300 employees provide construction,
woodworking, recreation, electronics, law enforcement, automotive, industrial
and printing markets with high-quality products. The 10 autonomously operated
businesses have 24 locations worldwide. Pentair common shares are quoted on
the NASDAQ National MarketSystem under the symbol: PNTA.

CONTENTS
Financial Highlights.............................1
Letter to Shareholders......................... 2
1993 Operations Review....................... 5
ManagementUs Discussion and Analysis...... 18
Financial Statements........................... 25
Board of Directors............................. 38
Corporate Officers and
Subsidiary Presidents...................... 39
Investor Information........................... 41
Eleven-Year Financial Summary............... 42
<PAGE>

<TABLE>
<CAPTION>
Financial Highlights
In Thousands, Except per Share Data 93 92 % Change
<S> <C> <C> <C>
Net Sales $ 1,328,180 $ 1,238,724 7.2%
Earnings $ 46,600 $ 42,800* 8.9%

Earnings per Share
Primary $ 2.26 $ 2.15* 5.1%
Diluted $ 2.20 $ 2.03* 8.4%

Cash Dividends per Common Share $ .68 $ .65 4.6%
Common ShareholdersU Equity per Share $ 18.58 $ 16.43 _

Preferred ShareholdersU Equity $ 33,927 $ 77,382 _
Common ShareholdersU Equity $ 336,922 $ 260,012 _
Return on Average Common ShareholdersU Equity 14% 13%* _

Capital Expenditures $ 73,421 $ 67,235 9.2%
Total Assets $ 958,801 $ 869,442 10.3%
Long-Term Debt to Total Capital 39% 39% _

Common Shares Outstanding at Year-End 18,135 15,822 _
Average Common and Common Equivalent Shares 17,891 15,936 _

Number of Employees 8,300 8,300 _
</TABLE>

Share and per share data has been restated to reflect a 50 percent stock
dividend in June 1993.
* Earnings and Earnings per Share are before cumulative effects of accounting
changes of $41,625,000 or $2.61 per primary share.

<TABLE>
<CAPTION>
89 90 91 92** 93
<S> <C> <C> <C> <C> <C>
Net Income ($Millons) 36.4 33.0 41.1 42.8 46.6

</TABLE>

<TABLE>
<CAPTION>
89 90 91 92 93
<S> <C> <C> <C> <C> <C>
Net Sales ($Millons) 1,163.6 1,175.9 1,169.1 1,238.7 1,328.2
</TABLE>

<TABLE>
<CAPTION>
89 90 91 92 93
<S> <C> <C> <C> <C> <C>
Earnings Per Share_Diluted ($) 1.90 1.62 2.01 2.03 2.20
</TABLE>

** Before cumulative effects of accounting changes
<PAGE>

To Our Shareholders
The underlying operating and financial strengths that have served Pentair
well in the recent recession moved us closer to achieving our growth goals in
the somewhat improved economic environment of 1993. Moreover, our plan to
complete another substantial industrial acquisition _ our first such
industrial acquisition in more than five years _ enhances our ability to meet
or exceed our growth targets.
Pentair in 1993 realized a seven percent gain in sales and a nine percent
earnings improvement before cumulative effects of accounting changes, driven
primarily by our U.S.-based industrial businesses. Our domestic industrial
subsidiaries benefited from a stronger economy and increased spending in key
consumer and industrial markets, even though our success was partially offset
by the effects of a weak European economy and an over-supplied paper market.
Our net income for the year ended December 31, 1993 was $46.6 million, or
$2.20 per fully diluted share. Income before cumulative effects of accounting
changes was $42.8 million in 1992, or $2.03 per fully diluted share. Net
sales for the year were $1.328 billion, compared to 1992 net sales of $1.239
billion.
We announced an agreement to acquire the Schroff Group, a $160 million
manufacturer of enclosure products for electronic equipment. Through this
acquisition, scheduled to close February 28, 1994, we furthered our dual
strategy of building the industrial side of our business and providing
Pentair a more significant global presence. SchroffUs strong brand name,
leading market position and extensive product line make it an ideal fit with
PentairUs strategic objectives.

Domestic industrial businesses post strong results
Five of our seven industrial businesses improved sales and earnings over 1992
levels. Sales by all Pentair industrial businesses totalled $946.6 million in
1993 compared to 1992 sales of $864.0 million. Operating income from our
industrial businesses was $84.2 million in 1993 compared to $78.8 million for
1992, a gain of 6.9 percent.
Specialty Products Group businesses Delta and Porter-Cable continued to
move products into hardware and building supply home center distribution
channels while reinforcing brand name recognition through aggressive
marketing and promotion programs. Myers turned in record sales and earnings
as a result of growth in retail markets. Myers also built market share during
the year, maintaining excellent delivery rates even when pressed by demand
resulting from flood conditions in the Midwest and drought conditions in the
Southeast.
In the General Industrial Equipment Group, Hoffman Engineering achieved
its best-ever results from stronger business activity, improved productivity
and the introduction of new products. Federal Cartridge also achieved record
results, benefiting from favorable raw material prices, a good hunting season
and greater brand awareness resulting from its affiliation with the U.S.
Shooting Team. Lincoln Automotive sales and earnings increased as a result of
modest recovery in automotive aftermarkets and the integration of new product
lines. Weak economic conditions in Europe reduced sales of Lincoln
IndustrialUs German operations 22.6 percent from the previous year; however,
these losses were offset by sales and earnings gains from its domestic
operations.
(Picture)
Winslow H. Buxton
Chairman, President and Chief Executive Officer
<PAGE>

Oversupplied paper markets prevail
Paper Group sales in 1993 were $381.6 million, compared to $374.7 million in
1992. Operating income for the Group, including the joint venture, was $31.0
million in 1993 versus $33.1 million in 1992.
Soft economic conditions in Europe, coupled with excess capacity of
publication paper world-wide, further weakened an already oversupplied
domestic market. While results from Niagara of Wisconsin Paper Corporation
improved despite the poor market conditions, these gains were offset by
record low prices for paper made by the Lake Superior Paper Industries joint
venture. Pricing also affected results from Cross Pointe Paper Corporation,
our specialty printing paper business. Cross Pointe, however, performed well
above industry levels, buoyed by its unique recycled paper product mix and
its distribution capabilities.
While external forces marred their performance, our paper businesses
continued to operate well. On-going productivity improvements, new or
expanded facilities and equipment, continued emphasis on new product
development, and innovative marketing and distribution programs will provide
solid performance gains once the supply/demand imbalance is corrected.

Acquisition meets PentairUs strategic goals
Late in the year we announced plans to acquire the Schroff Group of
Straubenhardt, Germany. Schroff manufactures cabinets, cases, subracks and
accessories principally for electronics and other sensitive computer
equipment. (See the gatefold between pages 2 and 3 for detailed information
on the key Schroff product lines.) Though similar in many respects to our
Hoffman Engineering subsidiary, Schroff products generally serve growing
computer and instrumentation markets while Hoffman products are directed
toward industrial markets. The Schroff-Hoffman combination makes us a leading
manufacturer of enclosure products and gives us by far the broadest enclosure
product line.
The potential for adding value through this acquisition is considerable in
view of the synergies that exist between Schroff and Hoffman Engineering.
Joint product development, shared manufacturing technology, coordinated
marketing and cross distribution are areas we have already begun to explore
as we plan for the long-term growth of a world-wide enclosure business.
The Schroff acquisition was somewhat of a departure from our traditional
acquisition strategy. In years past we have built value for shareholders by
purchasing undercapitalized and underutilized businesses and turning them
around. Schroff, in contrast, is a modern, well-equipped business that has
had ready access to capital. Schroff also has been a solid performer,
building its share in its core European markets while expanding into North
America and Asia. Future acquisitions may provide either the turn-around
opportunities, on which we have built our past success, or synergistic
opportunities, like Schroff, which support our objective of expanding our
larger subsidiaries.
In December, Cross Pointe Paper Corporation purchased the assets of a
Dayton, Ohio, paper mill owned by Badger Paper Mills. Located only eight
miles from Cross PointeUs Miami Mill, the Dayton facility will provide
opportunities for development of premium text and cover grades while
providing additional production capacity as paper markets recover.
<PAGE>

Investment in businesses continues
PentairUs 1993 capital investments totaled $73.4 million, providing for new
or expanded recycling facilities at Cross Pointe mills and the Lake Superior
Paper Industries joint venture, as well as construction of a new coating
facility at the Niagara paper business. Other investments made during 1993
introduced cost-efficient manufacturing technologies at most of the
industrial businesses, development of a near-record number of new or improved
products, and construction of facilities for training and customer service.
We intend to continue providing the resources necessary to build all Pentair
businesses to reinforce our growth.

Annual dividend increased to 72 cents
In January 1994, the Pentair board of directors approved an increase in
quarterly cash dividends from 17 cents to 18 cents per common share. This
raises the annual dividend payout to an indicated 72 cents per share for
1994, representing a 5.9 percent increase in dividends over the previous
year. Our total return to shareholders stands at 28 percent in 1993, or an
11.6 percent compound rate over the last 10 years.

1994 Outlook
Pentair has established an enviable reputation as a business that provides
shareholders with steady, reliable growth. While our plans for the years
ahead continue to focus on building value for shareholders in the long term,
we recognize we must continue to build on todayUs performance in order to
meet tomorrowUs goals.
Our industrial businesses will drive much of this improved performance and
each is well-positioned to reach its ambitious goals. Our Specialty Products
Group businesses will continue to market new, innovative products through new
channels of distribution. The General Industrial Equipment businesses will
benefit from what we hope will be improved business activity in durable goods
and machine tool markets. A stronger global economy, combined with the
results of on-going strategies aimed at increasing return on sales, employee
productivity, product development and marketing programs, will offer our
industrial businesses considerable profit opportunity in 1994.
We are confident that ownership of Schroff will provide Pentair many new
growth opportunities. We are exploring the synergies that exist between
Schroff and Hoffman Engineering in several areas. We will see the benefits of
these efforts _ new products, plant productivity gains, and growth in new
markets and new regions of the globe _ in late 1994 and in 1995.
Cross Pointe Paper Corporation should continue to benefit from its unique
products and service capabilities within specialty paper markets. While we
are uncertain about the prospects for short-term recovery of publication
paper prices, any improvement this year will substantially benefit total
Pentair sales and earnings.
Pentair remains committed to its long-term goal of top performance. We are
confident that 1994 will be a year of further sales and earnings
improvements. Pentair appreciates the continued support and enthusiasm of our
employees, customers, suppliers, plant communities and shareholders as we
strive to provide greater value for all stakeholders in the year ahead.

Winslow H. Buxton
Chairman, President and Chief Executive Officer
<PAGE>

Electronic Cabinets
Sensitive electronic equipment must be protected to ensure optimal
performance in a variety of environments. Schroff cabinets are designed to
meet critical material, workmanship and finish requirements, while satisfying
demand for aesthetic quality. SchroffUs eurorack line is an aesthetic, yet
sturdy, cabinet family designed for office and computer room environments.
The
minirack range is a small - to mid-size Rslim lineS version of the eurorack.
The tecnorack product line is a sealed equipment cabinet range for use in
harsh industrial environments.
ELECTRONIC ENCLOSURES
Schroff
Worldwide partners to the
electronics industry
PRODUCTS
Schroff is the largest manufacturer in EuropeUs electronic enclosure market
and a world technical leader. SchroffUs comprehensive product range includes
cabinets, cases, subracks, microcomputer packaging systems and a full line of
accessories including backplanes, power supplies and computer furniture.

MARKETS
Schroff serves the worldwide commercial electronics industry including key
segments such as computers, test and measurement, private LANs/data
communication, industrial control and
factory automation, medical and telecommunications.

Portable and Rack-mounted Cases
Electronic instruments, whether used in a fixed location or in the field,
require sturdy protective cases that provide versatility and ease of use. To
meet the individual technical requirements of its customers, Schroff offers a
wide range of equipment cases in more than 100 standard sizes. Schroff cases
combine standardized solutions with application-specific features and a wide
variety of case accessories. Case lines include 19-inch cases such as protec,
comptec, safepac and tecnopac, and system cases compac, inpac, cardpac and
ratiopac.

7 Pictures of electronic products
<PAGE>

Microcomputer Packaging Systems
Packages assembled from SchroffUs line of cases, subracks and accessories,
such as Schroff power
supplies, are the foundation for building systems that meet the specific
requirements of customers. SchroffUs standardized packaging systems offer
many benefits including reliability and cost effectiveness. Close attention
to changing customer needs has resulted in a broad range of RsystemsS
solutions incorporating mechanical packaging, power supplies, full wiring,
backplanes, thermal management, and radio frequency shielding.

ELECTRONIC ENCLOSURES Schroff
Worldwide partners to the electronics industry

LOCATIONS
Straubenhardt, Germany; Betschdorf, France; Hemel Hempstead, Hertfordshire,
United Kingdom; Warwick, Rhode Island; Yokohama and Meiwa-Cho, Japan;
Skarpnack, Sweden; and Gallarate (Varese), Italy.

EMPLOYEES
1,400

Subracks and Plug-in Units
Used in a variety of electronic applications, SchroffUs subrack products
provide the means for
packaging circuit boards and accessories. Schroff leads the market in
subracks built for the 19-inch standard used by the U.S. and European
electronics industries. Designed around the Eurocard format, Schroff subracks
are typically installed in cases and cabinets as electronic equipment and are
designed to meet the increasing electromechanical demands made on modern
packaging
systems. Several subrack families are available to meet the requirements of
the electronics industry, including the emerging metric standard that is
gaining popularity in U.S. markets.

8 Pictures of electronic products
<PAGE>

SPECIALTY PRODUCTS GROUP
1993 Operating Strategies

Expand distribution Purchasing patterns for tools and other
construction-related products continued to shift away from traditional
outlets to building supply home centers and hardware chains. Expanding into
distribution channels that serve these outlets resulted in placement of
product in over 1,000 new outlets in 1993. Specialty Products Group
businesses now supply eight of the top ten building supply home centers.

Build brand name awareness Expanded promotion and advertising efforts
supported this entry into new distribution channels while increasing
awareness of the GroupUs brand name products. Specialty Products Group
businesses used national television programming, principally underwriting of
Public Broadcasting System programs The New Yankee Workshop and The American
Woodshop which combined reach approximately seven million woodworking
enthusiasts.

Accelerate new products Specialty Products Group businesses introduced 30
new products in 1993. Sales from new products introduced in the last five
years increased to 46 percent of total group sales.

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
return on invested capital (%) 40.2% 41.1% 28.9%
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
return on sales(%) 10.2% 10.6% 9.8%
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
operating income ($millions) 42.0% 40.2% 33.6%
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
sales ($millions) 411.6 377.5 344.6
</TABLE>
<PAGE>

Picture of planks and shavings
<PAGE>

Porter-Cable Corporation
Growth in the hardware and building supply home center channels helped
Porter-Cable record sales increases and double-digit profit gains in 1993.
Sales through these distribution channels more than doubled as Porter-Cable
products entered more than 800 new outlets.
Porter-CableUs brand recognition was supported with new product packaging
which incorporates a distinctive color scheme and new point-of-purchase
promotion features. Underwriting of a PBS program entitled The American
Woodshop increased exposure of the Porter-Cable brand name. In 1994, the
company will underwrite another PBS program, The New Yankee Workshop.
A new ultra-lightweight 7 1/4-inch FramerUs Circular Saw was one of 12
new products introduced in the year. The Quicksand random orbit palm sander
and a 9.6-volt cordless drill have demonstrated good sales in their markets.
Porter-Cable achieved cost improvements of more than $3 million through
expansion of the total-quality work team concept.

PRODUCTS
Portable electric tools, including circular saws, reciprocating saws, band
saws, sanders, drills
and routers. Products shown: 7 1/4-inch FramerUs Circular Saw and Quicksand
random orbit palm sander.

MARKETS
Woodworking, residential and industrial construction; industrial fabrication
and maintenance; and home craftsmen.

LOCATION
Jackson, Tennessee.

EMPLOYEES
800

SPECIALTY PRODUCTS GROUP
Porter-Cable Corporation
Delta International
Machinery Corp.
F. E. Myers

Delta International Machinery Corp.
Delta achieved record orders, sales and operating income in its U.S.
operations during 1993. These gains were attributed to increased market share
in home center and group accounts, driven in part by nine new woodworking
products. Sales benefited from a stronger domestic economy, and from greater
awareness of the Delta name through underwriting of PBS programs The New
Yankee Workshop and The American Woodshop.
In Canada, unfavorable exchange rates and eco-nomic uncertainty slowed
income growth. However, DeltaUs sales in Canadian dollars were higher in 1993
than at any other time in the companyUs history.
Fine Woodworking magazine praised DeltaUs Tupelo, Mississippi, plant for
its state-of-the-art technology, saying the facility R...looks like a set
from Star Wars.S New laser cutting systems installed in late `93 have further
streamlined manufacturing processes, reduced product development lead time
and improved quality.

5 pictures of woodworking tools
<PAGE>

PRODUCTS
General-purpose woodworking machinery, including table saws, band saws,
planers, jointers, grinders, drill presses, shapers, lathes, other tools, and
accessories. Products shown: Anniversary edition Unisaw with tenoning jig,
and Sanding Center.

MARKETS
Do-it-yourself/homeshop craftsmen; commercial, residential and industrial
construction; remodeling; and cabinet manufacturers, case goods, and
furniture makers.

LOCATIONS
Pittsburgh, Pennsylvania; Tupelo, Mississippi; Memphis, Tennessee; Guelph,
Ontario, Canada; and Taichung, Taiwan.

EMPLOYEES
621
SPECIALTY PRODUCTS GROUP
Porter-Cable Corporation
Delta International
Machinery Corp.
F. E. Myers

PRODUCTS
Pumps for well and sump pump systems, primarily for residential use; pumps
and grinders for environmental engineering applications; and industrial
pumps. Product shown: 12-inch non-clog wastewater pump.

MARKETS
Retail and wholesale distribution to residential users, municipal
environmental organizations and industrial manufacturing companies.

LOCATIONS
Ashland, Ohio, and Kitchener, Ontario, Canada.

EMPLOYEES
600

F. E. Myers
Midwestern floods and Southeastern drought created record demand for MyersU
water systems and sump pumps in 1993. Manufacturing back-integration in the
companyUs foundry and plastic injection molding operations allowed Myers to
meet customersU needs and out-perform the competition. Myers closed the year
with record sales and earnings and a greater share of the pump market.
Eleven new products introduced in 1993 included an extended range of
four-inch submersible pumps for water systems markets, a 12-inch non-clog
pump for waste-water markets and a portable transfer pump for contractor
markets.
Capital investment supported the first phase of a program designed to
realign plant assembly and machine areas. Completed mid-year, the realignment
focused on the companyUs sump and sewage product assembly areas, decreasing
MyersU overhead rate. Phase 2 of the realignment program will begin in 1994.

3 pictures of woodworking tools
3 pictures of pumps
<PAGE>

GENERAL INDUSTRIAL EQUIPMENT GROUP
1993 Operating Strategies

Grow in excess of markets Although the overall economy grew only at 2.9
percent during 1993, General Industrial Equipment Group sales increased 10
percent. Strong double-digit growth and market share gains at Hoffman,
coupled with additional volume from Lincoln AutomotiveUs 1992 acquisition,
led the GroupUs improved sales performance. Lincoln IndustrialUs U.S.
operations and Federal Cartridge grew more than did their respective markets.

Stimulate new product introductions The General Industrial Equipment Group
introduced more than 100 new products during 1993. Sales from new, redesigned
and acquired products introduced during the past five years continue to
increase, representing 25 percent of total sales in 1993.

Increase productivity Productivity at General Industrial Equipment Group
businesses increased approximately five percent over 1992 levels, as did unit
output per employee. Capital expenditures designed to facilitate flow of
product through manufacturing facilities represented a third of total
spending and are expected to generate similar gains in 1994.
<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Return on Invested Capital (%) 15.5 14.5 13.1
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Return on Sales (%) 7.9 7.9 7.8
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Operating Income ($Millions) 42.2 38.6 35.9
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Sales ($Millions) 535.0 486.5 458.3
</TABLE>

<PAGE>
picture parts in blue-green liquid
<PAGE>

Lincoln Automotive
Record sales and profits at Lincoln Automotive were driven by a modest
rebound in automotive equipment markets, a continued increase in the average
age of the passenger car fleet in the U.S., and a decline in the
do-it-yourself segment of automotive repairs. Significant sales gains were
also recorded in Canadian, Latin American and European markets.
Several new or redesigned products and product lines were introduced to
the professional service market. These included welding accessories, which
complement the companyUs welding equipment line, a new Bantam line of battery
chargers featuring the exclusive Intellicharger design, and a redesigned
Marquette battery charger line. The Chem Oil-A-Way sorbent product,
formulated to help containment and disposal of oil, chemical and other
hazardous fluid spills, continues to gain acceptance in environmental and
auto service industries.
Cross-training and a focus on workforce flexibility generated productivity
gains at the companyUs Jonesboro, Arkansas, and Nogales, Mexico plants where
sales per employee reached an all-time high.
PRODUCTS
Vehicle service equipment, including lubricating tools, hydraulic jacks and
specialty products for the repair and service of automobiles, trucks, buses,
and construction and agricultural equipment. Products shown: Lincoln, Winner
and Blackhawk-brand lifting equipment.

MARKETS
Products are marketed through a distributor network to professional mechanics
and vehicle maintenance facilities.

LOCATIONS
St. Louis, Missouri; Jonesboro, Arkansas; Birch Tree, Missouri; Nogales,
Mexico; Mississauga, Ontario, Canada; and Antwerp, Belgium.

EMPLOYEES
560

GENERAL INDUSTRIAL EQUIPMENT GROUP
Lincoln Automotive

Lincoln Industrial

Hoffman Engineering Co.

Federal Cartridge Company

Lincoln Industrial
Activity in U.S. and Pacific Rim markets resulted in an improved sales and
earnings profile for Lincoln Industrial in 1993. However, this performance
was offset by continued weakness in European and Japanese markets, which
severely cut sales and earnings at the companyUs Walldorf, Germany
operations.
Despite a difficult business climate, new Lincoln Industrial products
represented 10 percent of total 1993 sales. New products introduced during
the year included a patented air brake for use on thick-fluid pumping
systems, a new line of engineered resin pumps and a transfer pump. Lincoln
Industrial advanced a patent-pending hydraulically driven pump into field
trials and early reports indicated the product was well-received.
Productivity efforts continue to generate results. Sales per employee at
Lincoln IndustrialUs U.S. operations rose five percent over the previous
year. New manufacturing schedules and procedures increased on-time deliveries
to customers by 30 percent over 1992 levels.

PRODUCTS
Lubrication systems and equipment, and material dispensing pump systems.
Product shown: Pile Driver III material dispensing pump featuring a modular
air motor, a RleaklessS gland and a patented overspeed control.

MARKETS
Manufacturers, printers and general lubrication markets.

LOCATIONS
St. Louis, Missouri, and Walldorf, Germany.

EMPLOYEES
870
<PAGE>
Hoffman Engineering Co.

PRODUCTS
Metal and composite enclosures for electrical and electronic controls,
instruments and components. Product shown: APX modular console.

MARKETS
Original equipment manufacturers; plant maintenance and repair; and
construction.

LOCATIONS
Anoka, Minnesota; Brooklyn Center, Minnesota; Toronto, Canada; and Cwmbran,
South Wales,
United Kingdom.

EMPLOYEES
1,800

HOFFMMAN ENGINEERING CO.
Stronger business activity in durable goods and automotive markets helped
Hoffman Engineering realize double-digit sales growth and record earnings in
1993. Hoffman became the first North American enclosure manufacturer to
achieve ISO 9001 certification, signifying the company has met a series of
rigid, internationally accepted quality standards.
New products introduced in 1993 included the COMPACT enclosure suspension
system and the ULTRX fiberglass corrosion-resistant enclosure line. Hoffman
also expanded its APX product line to include over 100 new model codes.
The company enhanced customer service through two new computer-based
features: an Electronic Data Interchange system linking Hoffman with its
distributors and suppliers; and a Bulletin Board system providing customers
access to product drawings and specifications.
Construction of a border plant in Mexico will increase HoffmanUs
manufacturing capacity and reduce costs related to general purpose products.
The new plant is scheduled to be operational in late 1994.

GENERAL INDUSTRIAL EQUIPMENT GROUP
Lincoln Automotive

Lincoln Industrial

Hoffman Engineering Co.

Federal Cartridge Company

PRODUCTS
Shotshell, centerfire and rimfire cartridges, ammunition components and clay
targets. Products shown: Gold Medal shotshells and Premium rifle cartridges.

MARKETS
Over 16 million licensed hunters; trap, skeet, sporting clay and target
shooters; the U.S.
government; and law enforcement agencies.

LOCATIONS
Anoka, Minnesota, and Richmond, Indiana.

EMPLOYEES
950

FEDERAL CARTRIDGE COMPANY
A record fourth quarter provided the basis for increased earnings at Federal.
Favorable raw material prices, innovative sales and marketing strategies and
productivity improvements contributed to record performance.
A highlight of 1993 was the outstanding performance of the U.S. Shotgun
Team. Using FederalUs new Gold Medal ammunition, the team earned seven Gold
medals, eight Silver medals and five Bronze medals in international World Cup
competition. The team also set 17 new world records and earned three 1996
Olympic country quota slots. The U.S. Biathlon Team selected FederalUs Gold
Medal Ultra Match .22 caliber cartridge for use in 1994 Winter Olympics
competition.
Product development efforts focused on new and improved products for
recreational and hunting markets. A complete line of small-gauge sporting
clay loads was added to the Gold Medal product line, while the Premium
Centerfire Rifle line was expanded to include several new patented Trophy
Bonded loadings.
(6 pictures of Hoffman Engineering products and employees)
(2 pictures of Federal Cartridge products and empleyees)
<PAGE>

PAPER GROUP
1993 Operating Strategies

Emphasize recycled-fiber paper products The Paper GroupUs recycled-fiber
strategy provided the dual benefit of allowing the Company to meet increasing
demand for recycled-fiber products while reducing virgin kraft requirements.
Recycled-fiber product development efforts resulted in new grades made
entirely from recycled fiber. The strategy was supported with $20 million of
capital investments for construction of new or expanded deinking facilities
at two of the three Paper Group businesses.

Focus on specialty niche markets Development of new products to meet the
needs of an expanding customer base allowed the Paper Group to focus on
specialty niche markets, such as chlorine-free products. This strategy was
further supported by plans to construct a $12 million coating facility at
Niagara of Wisconsin Paper Corp.

Reinforce distribution and service features The GroupUs distribution and
service capability was increased with the installation of new sheeting
equipment at the recently expanded Cross Pointe International Distribution
Center. The Center provides next day service for more than 85 percent of
customers; the remainder are served within 48 hours.
<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Return on Invested Capital (%) 15.0 17.9 25.5
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Return on Sales (%) 8.6 8.4 9.7
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Operating Income ($Millions) 32.9 31.4 35.5
</TABLE>

<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Sales ($Millions) 381.6 374.7 366.2
</TABLE>
(Picture of Paper rolls)
Niagara of Wisconsin Paper Corporation
Weak demand and volatile pricing continued to characterize the coated
publication paper market in 1993. Niagara performed well in this hostile
business environment, profiting from a seven percent improvement in average
selling price and targeted marketing efforts. A reorganized sales department
and sales generated by new products prevented the company from taking
downtime during 1993, unlike many of its competitors.
Niagara entered new niche markets offering six new products all of which
contain recycled fiber. One of these new products, Niagara Recycle TEF,
provides 30 percent post-consumer recycled-fiber content and is manufactured
in a chlorine-free process. Future product development efforts will benefit
from construction of a $12 million coating plant started in June, 1993.
Scheduled to be operational in July `94, the new coating facility will
improve product quality and consistency.

PRODUCTS
Coated publication papers, including recycled-fiber grades. Product shown:
Niagara Recycle TEF.

MARKETS
Magazines, catalogs, periodicals, advertising literature, trade books and
general commercial
printing.

LOCATION
Niagara, Wisconsin.

EMPLOYEES
600

PAPER GROUP
Niagara of Wisconsin
Paper Corporation

Cross Pointe Paper Corporation

Lake Superior
Paper Industries

PRODUCTS
Premium uncoated text and cover papers, and commercial printing and writing
papers, including grades made with recycled fiber. Products shown: Cross
Pointe recycled papers in a variety of basis weights, colors and sizes.

MARKETS
Paper merchants, commercial printers, book publishers, graphic design houses,
business copy
centers, educational institutions and paper converters.

LOCATIONS
St. Paul, Minnesota; West Carrollton and Dayton, Ohio; Park Falls, Wisconsin;
and West Chicago, Illinois.

EMPLOYEES
1,050

Cross Pointe Paper Corporation
While the printing and writing segment of the paper industry continued to
struggle with excess capacity, Cross Pointe increased sales to record levels
in 1993. This was accomplished by continued emphasis on grade development and
strengthening customer services for paper merchants.
Cross PointeUs Flambeau Mill benefited from a new deinking plant and a
rebuilt paper machine which combined to boost the millUs ability to produce
quality, value-added recycled-fiber papers. The West Chicago-based
International Distribution Center installed an advanced cut-size sheeter to
help meet growing demand for recycled business papers.
Late in the year, Cross Pointe acquired the assets of a Badger Paper
Company mill located in Dayton, Ohio. The mill, which was not operating at
the time of acquisition, will be started up as paper markets recover and
capacity requirements grow.

PAPER GROUP
Niagara of Wisconsin
Paper Corporation

Cross Pointe Paper Corporation

Lake Superior
Paper Industries

Lake Supperiior Paper Industries
The on-going recession in global paper markets and overcapacity among
European paper producers combined to reduce 1993 sales and earnings by Lake
Superior Paper Industries (LSPI), a joint venture between subsidiaries of
Pentair and Minnesota Power. Despite downward pricing pressures, LSPI
maintained its position as the North American leader in its market segment.
Extensive research and development led to a higher-quality supercalendered
RAS grade paper. Designed specifically to be competitive with a new SCA+
grade introduced by foreign
competitors, the new LSPI product offers excellent printing surface
smoothness and higher overall gloss.
The Superior Recycled Fiber Industries (SRFI) deinking plant, which LSPI
operates for joint venture owners Pentair and Minnesota Power, began
operations in September, 1993. Completed ahead of schedule and under budget,
the 135,000-square-foot facility produces 250 tons of recycled fiber daily
from office wastepaper. LSPIUs ENCORE Web and ENCORE Gloss recycled paper
grades contain a minimum of 10 percent deinked post-consumer fiber supplied
by SRFI.

PRODUCTS
Supercalendered publication and printing grade papers. Product shown:
Shredded post-
consumer waste paper is deinked and delivered in wet-lap sheets for use in
LSPI recycled papers.

MARKETS
Catalogs, newspaper supplements, magazines, advertising inserts and other
commercial printing.

LOCATION
Duluth, Minnesota.

EMPLOYEES
374

6 pictures of paper products
<PAGE>

PENTAIR INC. AND SUBSIDIARIES
Financial Review
MISSION
Pentair, Inc. has several strategic and financial objectives that guide
management decision-making in creating value for its shareholders. The
overall objective is to be a top-performing, diversified industrial company
operated to maximize shareholder value, be respected for business conduct and
provide benefits to all constituents.
The financial goals are to achieve: a 10 percent EPS growth _ annual growth
in earnings per share over any ten-year period; and a 15 percent ROE _
average return on common shareholdersU equity over any five-year period. The
Company approached its EPS growth and ROE objectives for 1993, achieving an 8
percent EPS growth and 13 percent ROE for the periods ending with 1993.
Despite the shortfall during the recent recession and weak paper markets, the
Company continues to view 10 percent EPS growth over future ten-year periods
and 15 percent ROE over future five-year periods as realistic financial
goals.

Total Return to Shareholders
Pentair seeks to maximize value with strategic planning for long-term
performance. The Company believes shareholder value is best measured by
dividend returns and equity value growth, which are enhanced when EPS growth
and ROE goals are achieved.

<TABLE>
<CAPTION>
89 90 91 92* 93
<S> <C> <C> <C> <C> <C>
Return On Equity (%) 14 11 13 13 14
Five-year Average - 13%
</TABLE>

<TABLE>
<CAPTION>
83 84 85 86 87 88 89 90 91
92* 93
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<C> <C>
Earnings Per Share - Diluted ($) 1.00 1.50 1.35 1.03 1.30 2.23 1.90 1.62 2.01
2.03 2.20
</TABLE>
<TABLE>
<CAPTION>
89 90 91 92 93
<S> <C> <C> <C> <C> <C>
Common Dividends ($ per share) .53 .59 .61 .65 .68
</TABLE>

* Before cumulative effects of accounting changes
<PAGE>
PENTAIR INC. AND SUBSIDIARIES
ManagementUs Discussion and Analysis

<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
($ millions except per share data)
93 92 91 90 89
<S> <C> <C> <C> <C> <C>
Net sales $1,328.2 $1,238.7 $1,169.1 $1,175.9 $1,163.6
Income before cumulative effects $ 46.6 $ 42.8 $ 41.1 $ 33.0 $ 36.4
Cumulative effects of accounting changes _ (41.6) _ _ _
Net income 46.6 1.2 41.1 33.0 36.4

Earnings per common share
Primary
Income before cumulative effects
of accounting changes $ 2.26 $ 2.15 $ 2.20 $ 1.69 $ 1.99
Cumulative effects of accounting changes _ (2.61) _ _ _
Net income (loss) 2.26 (0.46) 2.20 1.69 1.99
Diluted
Income before cumulative effects
of accounting changes $ 2.20 $ 2.03 $ 2.01 $ 1.62 $ 1.90

Total assets $ 958.8 $ 869.4 $ 790.6 $ 768.9 $ 781.4
Long-term debt 238.9 211.5 198.4 224.7 251.1

Cash dividends per common share $ .68 $ .65 $ .61 $ .59 $ .53
</TABLE>
All per share data has been adjusted for the 50% stock dividend in June 1993.

RESULTS OF OPERATIONS
CONSOLIDATED

General
The diversified mix of Pentair businesses was developed through long-range
strategies of acquisitions, internal development and capital investing. The
sales and earnings capacity are balanced between three segments discussed
below.

Acquisition
In December 1993, the Company announced an agreement to purchase Schroff GmbH
of Germany and its subsidiaries (RSchroffS). See Note 2 of Notes to
Consolidated Financial Statements. The acquisition has not been reflected in
these financial statements and no proforma data is available. The acquisition
will be effective January 1, 1994 and will be reflected in the CompanyUs 1994
financial statements.

1993 versus 1992
Segment sales and operating income trends are discussed on the following
pages. Consolidated net sales increased to $1,328.2 million in 1993. Most of
the $89.5 million or 7.2% sales increase came in the General Industrial
Equipment Segment resulting from general improvement in market demand and
full-year benefit of acquired new product lines; and Specialty Products
Segment resulting from expansion into new markets.
Operating income as a percent of net sales of wholly owned businesses was
7.5% in 1993 and 1992. Two subsidiaries increased margins substantially with
a combination of improved market conditions and greater operating efficiency.
These improvements were offset by economy related volume and cost problems in
Germany, some weakness in paper grades that had been more resilient in 1992
and the impact of a stronger dollar on various businesses.
Joint venture income decreased $3.6 million because of the substantial
excess worldwide supply of supercalendered paper (SCA) and light-weight
coated (LWC) grades, which resulted in lower prices and which motivated SCA
users to upgrade to LWC for nominal additional costs.
<PAGE>
Interest expense decreased slightly. The prior year included an additional
provision for interest on tax settlements. Average borrowings increased to
finance investments in joint ventures and working capital related to
increased sales. Lower floating interest rates helped; however, much of the
floating rate debt was fixed at higher rates with intermediate-term private
placements. Interest expense will rise in 1994 as average borrowings increase
to fund joint venture, working capital and property investments.
The effective income tax rate decreased from 41.1% to 39.8%. The U.S.
statutory rate increased 1% and the foreign tax component increased because
certain foreign operating losses were not fully deductible. Both years
benefitted from tax refunds on repatriated earnings. These increases were
offset by the impact of the statutory rate change on net deferred tax assets
and favorable settlements of prior-year tax examinations. In 1994, the
effective rate should be slightly higher (41%) because the two favorable
items in 1993 are not expected to recur and additional tax law changes are
effective January 1, 1994. In addition, the effective tax rate may change due
to the foreign operations of Schroff.

1992 versus 1991
Net sales increased to $1,238.7 million in 1992. Each segment contributed to
the $69.6 million or 6% increase. Operating income as a percent of net sales
of wholly owned businesses was 7.5% in 1992 and 1991. Continued success in
product development, distribution channel expansion and cost reductions
resulted in margin improvements for some businesses and stable margins for
other businesses. These were offset by the adoption of FAS 106 and 109 and a
5% reduction in margins for the publication paper business because of lower
selling prices.
Interest expense increased even though average borrowings decreased. The
overall effective rate is greater because very little of the 1992 debt was at
the lower floating rates and an additional provision was made for interest
due on tax settlements. The effective tax rate decreased to 41.1% from 44.5%
because of a 1992 tax refund applicable to repatriated foreign income and a
2% additional prior-year provision in 1991.

Accounting changes
The Company adopted FAS 106, REmployersU Accounting for Postretirement
Benefits Other Than Pensions,S and FAS 109, RAccounting for Income Taxes,S
effective January 1, 1992. (See Note 3 of Notes to Consolidated Financial
Statements.)

Inflation
The rate of inflation remains at reasonable levels in the United States and
most of the foreign economies that affect Pentair results.

SEGMENT DISCUSSION
Corporate expense allocation
The 1992 Operating Income and Percent of Sales data has been restated to be
consistent with the 1993 and 1991 presentation.

<TABLE>
<CAPTION>
SPECIALTY PRODUCTS
($ millions) 93 92 91
<S> <C> <C> <C>
Net Sales $411.6 $377.5 $344.6
Operating Income 42.0 40.2 33.6
Percent of Sales 10.2% 10.6% 9.8%
</TABLE>

Businesses in this group manufacture products designed and marketed for
commercial, residential and municipal construction and a variety of
professional craftsman and do-it-yourself woodworking applications. The
products include woodworking machinery (Delta), portable power tools
(Porter-Cable), residential water systems, sump pumps, environmental pumps
and grinders, and industrial pumps (Myers).

1993 versus 1992
Specialty Products sales increased $34.1 million, or 9.0%. Each business
increased sales by $10 million or more, reflecting the benefits of pursuing
new distribution channels and markets and excellent customer service.
Operating income percent declined to 10.2% from 10.6% because 1992
included a gain from sale of operating assets. In addition, the Canadian
operations of two subsidiaries felt the impact of the weak Canadian economy
and unfavorable currency exchange in 1993.

1992 versus 1991
Specialty ProductsU sales increased $32.9 million, or 9.5%. Each business
achieved solid sales growth built on new products, expanded distribution and
new market
<PAGE>
penetration. Housing and construction trends were not a significant factor
during 1992.
Operating income, as a percent of net sales, increased to 10.6% from 9.8%.
Excluding gains from sales of operating assets, margins increased more than
1% in 1992. Improvement resulted from realizing good increases in sales and
gross margins while controlling or reducing operating costs. The strategic
sale of the Brazilian operation that had sizable operating losses in prior
years also contributed to the improvement.

Outlook
Sales and operating income should increase in 1994. The general economy is
improving and housing and construction trends are positive. The group will
aggressively advertise to build brand name awareness and will continue its
focus on broader distribution and market expansion, developing new and
differentiated products while maintaining excellent customer service.
<TABLE>
<CAPTION>
GENERAL INDUSTRIAL EQUIPMENT
($ millions) 93 92 91
<S> <C> <C> <C>
Net Sales $535.0 $486.5 $458.3
Operating Income 42.2 38.6 35.9
Percent of Sales 7.9% 7.9% 7.8%
</TABLE>

Businesses in this group manufacture products designed to facilitate
industrial and commercial expansion and efficiencies. The products include
electrical enclosures (Hoffman), lubrication systems and material dispensing
equipment (Lincoln Industrial), automotive service equipment (Lincoln
Automotive) and sporting and law enforcement ammunition (Federal).

1993 versus 1992
General Industrial sales increased $48.5 million, or 10.0%. Electrical
enclosure volume increased substantially from lower recession levels. The
automotive service equipment sales increased more than 33%, primarily due to
the full-year benefit of mid-1992 acquisition of new product lines.
Ammunition sales increased slightly. Increased sales of lubrication and
material dispensing equipment were offset by a substantial decline (22.6%) of
sales in Germany, which is in the midst of its worst recession in many
decades.

Operating income as a percent of net sales has stayed at 7.9%. The
electrical enclosure margins increased substantially as a result of higher
volumes and the resolution of the 1992 mid-year shipping problem. Automotive
service equipment margins continued to increase as acquisition-related
inefficiencies were overcome and the benefit of expanded production volume
was realized. The sporting ammunition business benefitted from lower raw
material costs and improved operating efficiencies. On the negative side is
the margin impact of the substantial sales decline in Germany and the related
downsizing charges incurred late in 1993.

1992 versus 1991
General Industrial sales increased $28.2 million, or 6.2%. Ammunition sales
increased as a result of somewhat stronger demand, aggressive promotional
programs and backlog carryover from 1991. Automotive service equipment sales
increases include improvements in the existing business and a mid-year
acquisition of new product lines. Sales of electrical enclosures and
lubrication and material dispensing equipment were up only slightly as these
markets did not rebound appreciably from recession lows.
Operating income as a percent of net sales was 7.9% compared to 7.8% in
1991. Ammunition manufacturing operations were improved and benefitted from
greater demand and low commodity raw material prices. Despite mid-year
shipping problems, the electrical enclosure business increased margins
through production efficiencies. The lubricating and material dispensing
business controlled costs during this period of sluggish demand. Automotive
service equipment margins improved because of increased sales coupled with
production efficiencies. The new automotive product lines contributed very
little to operating income during the transition in 1992.

Outlook
General Industrial sales and operating income should increase again in 1994.
The United States economy is strengthening. Some of the expected U.S.
operating income will be invested in the start-up of HoffmanUs Mexican
facility to maintain its market position in certain product lines of the
enclosure business. Although there are expectations that the European economy
will improve later in the year, the current German operations will need to
control costs consistent with weak economic conditions.
<PAGE>
<TABLE>
<CAPTION>
PAPER PRODUCTS (Excluding LSPI)
($ millions) 93 92 91
<S> <C> <C> <C>
Net Sales $381.6 $374.7 $366.2
Operating Income 32.9 31.4 35.5
Percent of Sales 8.6% 8.4% 9.7%
</table
>
Businesses in this group manufacture products sold to the publishing and
printing markets. These products primarily include coated publication paper
and premium printing (specialty) papers.

1993 versus 1992
Paper sales increased $6.9 million or 1.8%. Coated publication paper volume
decreased 4.1%, while average coated publication paper prices increased 7.0%.
Specialty paper volume increased 1.5% while average specialty paper prices
showed a slight decline of .3%.
Operating income as a percent of sales increased slightly to 8.6% from
8.4%. Publication paper margins improved substantially as selling prices
increased and operating costs were reduced. Specialty paper margins were
squeezed by the higher cost of fiber and other raw materials needed to
produce higher-priced paper.

1992 versus 1991
Paper sales increased $8.5 million, or 2.3%. Both businesses increased
shipments about 8% by improving production efficiencies and not taking
downtime in lieu of producing lower-margin paper. However, as a result of
excess industry capacity, lightweight coated publication paper prices
declined 11%. Market pressure on premium printing grades was not as severe
and mix improvements resulted in only a small decline in premium paper
average prices.
Operating income as a percent of sales decreased to 8.4% from 9.7%.
Specialty paper margins were stable. The publication paper selling price
decrease was partially offset by lower kraft pulp costs and improved
operating efficiencies.

Outlook
Paper prices are expected to continue to be low during the seasonally weak
first quarter. Some improvement may come as demand increases later in the
year, especially in specialty papers.

LSPI JOINT VENTURE
The CompanyUs two joint ventures are: Lake Superior Paper Industries (LSPI),
which sells supercalendered (SCA) paper and, in 1993, LSPI Fiber Co., its
source of recycled pulp. The CompanyUs equity in joint venture income (loss)
was ($1.9) million, $1.7 million and $7.5 million in 1993, 1992 and 1991,
respectively.

1993 versus 1992
The recession in Europe affected domestic paper markets. Late 1992
devaluations helped Scandinavian paper makers increase exports to the already
oversupplied U.S. market. LSPI selling prices declined 9.9% while shipments
increased 5.1%. The substantial price decline could not be fully offset by
material cost reductions or operating efficiencies, and resulted in an
operating loss.

1992 versus 1991
The SCA market was significantly depressed because industry capacity
additions far exceeded demand growth in the publication and printing paper
markets. LSPI selling prices declined 6.6% and shipments dropped 4%, due
partially to internal paper trials (testing new types of paper) and operating
difficulties. The revenue shortfall was partially offset by reduced kraft
pulp and operating costs.

Outlook
SCA paper prices will continue to be under pressure until the European
economy improves and the world supply/demand position is in better balance.
Because of efficiencies and small price improvement, profitability is
expected to improve slightly.

FINANCIAL CONDITION

</TABLE>
<TABLE>
<CAPTION>
Cash Flow
The following is a summary of the Consolidated Statement of Cash Flows shown on page 28.

($ millions) 93 92 91
<S> <C> <C> <C>
Cash from Operating Activities $ 90.9 $ 85.8 $ 81.7
Cash from Investing Activities (100.5) (89.7) (43.4)
Cash from Financing Activities 11.5 6.2 (41.0)
Net Change in Cash $ 1.9 $ 2.3 $ (2.7)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Operating
The major components of cash from operating activities are:

($ millions) 93 92 91
<S> <C> <C> <C>
Net income $ 46.6 $ 1.2 $ 41.1
Cumulative Effect
of Accounting Changes _ 41.6 _
Depreciation and
amortization 50.1 47.9 47.2
Undistributed joint
venture (earnings) loss 1.9 (1.7) (7.5)
Working capital (17.9) (7.4) 3.1
Other 10.2 4.2 (2.2)
Cash from
Operating Activities $90.9 $85.8 $81.7
</TABLE>

Investing
Pentair invests capital to maintain existing businesses, introduce new
products and develop new businesses.
Capital outlays are expected to be about $80 million in 1994. Future
projects include reconfiguration and expansion of industrial facilities;
paper production equipment, converting and finishing equipment; and new
product development. Many capacity and productivity projects include some
provision to maintain the quality of the environment. The Company projects on
an ongoing basis that it spends up to 5% of its current capital annually to
maintain substantial compliance with environmental standards.
Year-end advances have been made to LSPI to fund first-half rent payments.
Although these are partially paid-off during the year, the balance increased
in 1993 and is expected to increase in 1994. This results from the fact that
LSPIUs cash rent payments are highest on the front end (through 1998) of its
$382 million leveraged equipment lease.
In mid-1992, the Company formed a captive insurance company to facilitate
efficient insurance coverage for subsidiary companies. The insurance company
invests premium cash flow in marketable securities _ equities and long-term
debt instruments. These investments are expected to increase over the next
several years.
In June 1992, the Company completed an acquisition of new automotive
lifting, battery service and welding product lines for approximately $9.4
million.
Financing
The CompanyUs revolving credit agreements as revised as of February 11, 1994,
extended the maturity one year, increased the total to $285 million with
seven banks and separated $65 million into a Euro-currency facility to
provide local currency borrowings for the Schroff acquisition.
Private placement intermediate-term debt totaling $100 million was funded
in June 1993. Proceeds were used to reduce bank debt.
The Company prepared for the recently announced acquisition by reducing
debt obligations. Since the last acquisition in 1988, the ratio of long-term
debt to total capital decreased more than 10 percentage points, excluding the
cumulative effects of accounting changes
<TABLE>
<CAPTION>
89 90 91 92 93
<S> <C> <C> <C> <C> <C>
Capital Spending ($millions) 83.4 61.3 49.4 67.2 73.4
</TABLE>
<TABLE>
<CAPTION>
89 90 91 92* 93
<S> <C> <C> <C> <C> <C>
Long-term Debt as Percent of Total Capital (%) 45 42 36 39 39
</TABLE>
36% pre-FAS 106 & 109

recorded in 1992. Also, since 1990, operating lease obligations have been
reduced $24 million to $124 million. The reduction is a combination of normal
maturities, termination of some railcar leases and the refinancing of a 1982
lease at substantially reduced rates.
In exchange for a note, preferred stock was issued to an Employee Stock
Ownership Plan Trust in 1990. Net equity did not increase at the time of
issuance; however, equity increases as the note is reduced and stock is
allocated to participants in lieu of cash compensation over the next 4-5
years. (See Note 9 of Notes to Consolidated Financial Statements).
In January 1994, the Company raised its quarterly dividend to 18 cents per
share, or an annual rate of $.72 per share. This is a 5.9% increase over
1993. Pentair has increased its dividend payment each year since 1976. Since
the first cash dividend in 1976, dividends have increased at an average
annualized growth rate of 16.0%.

CAPITAL RESOURCES/LIQUIDITY
Cash from operating activities should be sustained at prior levels and should
cover dividends and capital expenditures. Working capital may increase but
generally is projected to be controlled relative to sales levels and should
not require significant additional funds.
The Schroff acquisition will require borrowings of $160 million, including
assumed Schroff debt.
Based upon current operating plans, the $220 million of credit available
under revolving credit facilities is considered adequate to cover seasonal
working capital, long-term capital expenditures, cash investments in LSPI,
captive insurance company investments, and the Schroff acquisition
requirements.
To be prepared to take advantage of major business opportunities and
respond to attractive acquisition possibilities, Pentair strives to maintain
its strong financial position and is ready to utilize all available sources
of financing, including revolving debt, and private placements; to a lesser
extent, operating leases and, if justified, joint ventures and common or
preferred equity.

INSURANCE SUBSIDIARY
The CompanyUs captive insurance subsidiary provides a cost-effective means of
obtaining insurance coverage for general and product liability, workers
compensation and auto liability. The insurance subsidiary insures directly
and reinsures an admitted carrier. Loss reserves are established based on
actuarial projections of ultimate loss.

RECENT ACCOUNTING STANDARDS
In November 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 112, REmployersU Accounting for
Postemployment Benefits.S The Company believes that this statement, when
adopted in 1994, will not have a material effect on its financial position or
results of operations.
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, RAccounting for Certain Investments
in Debt and Equity Securities.S The Company believes that this statement,
when adopted in 1994, will not have a material effect on its financial
position or results of operations.

OUTLOOK
Pentair strategies include continued development of current businesses;
growth of those businesses with synergistic acquisitions; and additional
growth in the form of periodic major industrial acquisitions.
The industrial businesses expect to increase sales and earnings in 1994.
The paper businesses are attempting to minimize the impact of weak paper
markets and are expected to have some improvement in earnings in 1994 and
greater profitability in 1995.
<PAGE>
Report of Management and Report of Independent Auditors
The Shareholders of Pentair, Inc.:

The financial statements of Pentair, Inc. were prepared by Company management
in accordance with generally accepted accounting principles. The other
financial information in this Report is consistent with the financial
statements. Pentair maintains a system of internal controls with policies and
procedures to provide reasonable assurance that transactions are
appropriately recorded and reported, assets are protected, and established
policies are followed.
The Audit Committee of the Board of Directors, comprised of outside
directors, meets periodically with the independent auditors and management to
monitor activities and to ensure that they are properly discharging their
responsibilities. The independent auditors have free access to the Audit
Committee, without management present, to discuss the results of their audit,
the adequacy of internal accounting controls, and the quality of financial
reports.

Winslow H. Buxton
Chairman, President
and Chief Executive Officer

The Shareholders and Board of Directors of Pentair, Inc.:

We have audited the accompanying consolidated balance sheets of Pentair, Inc.
and its subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income and cash flows for each of the three years
in the period ended December 31, 1993. These financial statements are the
responsibility of the CompanyUs management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Pentair, Inc. and its
subsidiaries at December 31, 1993 and 1992 and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted accounting
principles.
As discussed in Note 3 to the consolidated financial statements, effective
January 1, 1992, the Company changed its methods of accounting for
postretirement benefits other than pensions and for income taxes.

Saint Paul, Minnesota
February 11, 1994
<PAGE>

pentair. inc. and subsidiaries
Consolidated Statement of Income

Years E
<TABLE>
<CAPTION>
(In thousands, except per share amounts) 93 92 91
<S> <C> <C> <C>
Net sales $1,328,180 $1,238,724 $1,169,082
Operating costs
Cost of goods sold 1,004,471 937,232 886,686
Selling, general and administrative 223,596 209,135 194,825
Total operating costs 1,228,067 1,146,367 1,081,511
100,113 92,357 87,571
Equity in joint venture income (loss) (1,920) 1,682 7,498
Operating income 98,193 94,039 95,069
Interest (expense) (22,640) (22,771) (22,028)
Interest income 1,847 1,432 1,059
Income before income taxes and cumulative
effects of accounting changes 77,400 72,700 74,100
Provision for income taxes 30,800 29,900 33,000
Income before cumulative effects
of accounting changes 46,600 42,800 41,100
Cumulative effects of accounting changes _ (41,625) _
Net income 46,600 1,175 41,100
Preferred dividend requirements - net of taxes in 1991 6,114 8,545 6,358
Earnings (loss) applicable to common stock $ 40,486 $ (7,370) $ 34,742
Earnings (loss) per common and common
equivalent share
Primary
Earnings before cumulative effects
of accounting changes $ 2.26 $ 2.15 $ 2.20
Cumulative effects of accounting changes _ (2.61) _
Net income (loss) $ 2.26 $ (.46) $ 2.20
Diluted
Earnings before cumulative effects
of accounting changes $ 2.20 $ 2.03 $ 2.01
Common and common equivalent shares
(weighted average)
Primary 17,891 15,936 15,778
Diluted 20,955 20,817 20,767
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>

pentair. inc. and subsidiaries
Consolidated Balance Sheet

December 31
<TABLE>
<CAPTION>
(In thousands) 93 92
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 10,327 $ 8,392
Accounts receivable - trade (net) 200,425 184,086
Inventories
Finished goods 122,712 109,678
Work in process 35,315 34,225
Raw materials 35,108 34,043
Supplies 5,691 4,940
Total inventory 198,826 182,886
Deferred income taxes 21,575 17,054
Other current assets 7,627 6,197
Total current assets 438,780 398,615

Property, plant and equipment
Land and land improvements 14,857 13,348
Buildings 74,074 64,122
Machinery and equipment 506,566 440,442
Construction in progress 26,120 33,985
Total 621,617 551,897
Less accumulated depreciation 305,751 262,084
Property, plant and equipment 315,866 289,813

Marketable securities - insurance subsidiary 18,594 8,057
Investment in joint ventures 72,867 58,265
Goodwill - net 88,970 91,512
Other assets 23,724 23,180
Total assets $ 958,801 $ 869,442
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
December 31
93 92
<S> <C> <C>
Liabilities
Current liabilities
Accounts payable $ 93,820 $ 88,410
Compensation and other benefits accruals 42,737 35,070
Income taxes 8,787 9,944
Accrued product claims and warranties 22,256 19,433
Accrued expenses and other liabilities 50,075 46,649
Current maturities of long-term debt 803 9,958
Total current liabilities 218,478 209,464
Long-term debt 238,856 211,519
Other liabilities 18,911 19,143
Deferred income taxes 7,518 5,188
Pensions and other retirement compensation 29,687 21,719
Postretirement medical and other benefits 60,637 59,429
Reserves - insurance subsidiary 13,865 5,586
Commitments and Contingencies (Note 8)
ShareholdersU equity
Preferred stock - at liquidation value
Authorized: 2,800,000 shares in 1993 and 5,000,000 in 1992
Outstanding: 1,976,443 shares in 1993 and 3,992,698 in 1992 69,380 120,137
Unearned ESOP compensation (35,453) (42,755)
Common stock - par value, $.16 2/3
Authorized: 72,200,000 shares in 1993 and 70,000,000 in 1992
Outstanding: 18,134,638 shares in 1993 and 10,548,412 in 1992 3,022 1,758
Additional paid-in capital 163,460 112,125
Foreign currency translation adjustment (287) 422
Excess pension obligation - net (6,760) (1,905)
Retained earnings 177,487 147,612
Total shareholdersU equity 370,849 337,394
Total liabilities and shareholdersU equity $ 958,801 $ 869,442
</TABLE>
<PAGE>
pentair. inc. and subsidiaries
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
Years Ended December 31

(In thousands) 93 92 91
<S> <C> <C> <C>
Cash provided by (used for)
Operating activities
Net income $ 46,600 $ 1,175 $
41,100
Adjustments to reconcile to cash flow
Cumulative effects of accounting changes _ 41,625
_
Depreciation 47,657 45,454
44,715
Amortization 2,469 2,447
2,435
Deferred income taxes 3,357 (614)
(1,377)
Undistributed loss (earnings) from joint venture 1,920 (1,682)
(7,498)
(Increase) decrease in
Accounts receivable (16,339) (15,454)
(3,225)
Inventories (15,940) (10,393)
(3,699)
Other assets (4,673) (3,116)
(7,416)
Increase (decrease) in
Accounts payable 5,410 21,201
7,030
Income taxes (1,157) (831)
5,981
Pensions and other retirement compensation 7,968 105
700
Reserves - insurance subsidiary 8,279 5,586
0
Other liabilities 5,331 262
2,992
Net cash provided by operating activities 90,882 85,765
81,738
Investing activities
Capital expenditures (73,421) (67,235)
(49,420)
Cash investment in joint venture - net (16,522) (9,000)
(5,000)
Purchase of operating assets _ (9,419)
_
Sale of operating assets _ 4,000
11,000
Purchase of marketable securities (13,513) (8,076)
_
Proceeds from sale of marketable securities 2,976 19
_
Net cash (used for) investing activities (100,480) (89,711)
(43,420)
Financing activities
Borrowings 128,853 21,524
63,059
Debt payments (109,741) (4,369)
(94,022)
Unearned ESOP compensation decrease 7,302 4,047
6,280
Employee stock plans and other 3,164 3,872
1,870
Dividends paid (18,045) (18,863)
(18,190)
Net cash provided by (used for) financing activities 11,533 6,211
(41,003)
Increase (decrease) in cash and cash equivalents 1,935 2,265
(2,685)
Cash and cash equivalents - beginning of period 8,392 6,127
8,812
Cash and cash equivalents - end of period $ 10,327 $ 8,392 $
6,127
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>

pentair. inc. and subsidiaries
Notes To Consolidated Financial Statements

Summary of Significant Accounting Policies
Principles of consolidation
The consolidated financial statements include Pentair, Inc. and its wholly
owned subsidiaries. All significant intercompany balances and transactions
have been eliminated. The equity method of accounting is used for the joint
ventures (See Note 15).

Cash equivalents
The Company considers all highly liquid investments purchased with a maturity
of three months or less to be cash equivalents.

Property, plant and equipment
Property, plant and equipment is stated at cost. Depreciation is computed
using the straight-line method. Estimated useful lives are: land improvements
- - 5 years; buildings - 6 to 33 years; and, machinery and equipment - 3 to 16
years.

Insurance subsidiary
The CompanyUs wholly owned insurance subsidiary, established in June 1992,
insures general and product liability, workers compensation, and auto
liability risks. The insurance subsidiary invests in marketable securities
including equity securities carried at market and debt securities carried at
amortized cost, which approximates market. These investments are treated as
operating assets of the insurance subsidiary and the related earnings
($775,000 and $163,000 in 1993 and 1992, respectively) are recorded as a
reduction of the insurance component of cost of sales. Reserve requirements
($17,332,000 in 1993 and $6,982,000 in 1992) are established based on
actuarial projections of ultimate loss.
In addition, the CompanyUs subsidiaries have accruals for claims incurred
prior to formation of the insurance subsidiary.
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No.115, RAccounting for Certain Investments in
Debt and Equity Securities.S The Company believes that this statement, when
adopted in 1994, will not have a material effect on its financial position or
results of operations.

Goodwill
The excess purchase price paid over net assets of businesses acquired (i.e.,
goodwill) is amortized over 40 years on the straight-line method. Accumulated
amortization was $12,712,000 and $10,170,000 at December 31, 1993 and 1992,
respectively.

Interest rate SWAP agreements
The Company enters into interest rate swap agreements to effectively convert
a portion of its floating-rate borrowings into fixed-rate obligations. The
interest rate differential to be received or paid is recognized over the
lives of the agreements as an adjustment to interest expense.

Foreign currency translation
Translation gains or losses resulting from translating foreign currency
financial statements are reported as a separate component of shareholdersU
equity. Foreign currency transaction gains and losses are included in
earnings as incurred.

Revenue recognition
Revenue from sales is recognized at the time the product is shipped.

Product warranty costs
Provision for estimated warranty costs is recorded at the time of sale and
periodically adjusted to reflect actual experience.

Research and development
Research and development expenditures ($9,322,000, $9,374,000 and $9,417,000
in 1993, 1992 and 1991, respectively), are expensed as incurred. Development
activities generally relate to improving or creating variations of existing
products, modifying existing products to meet new applications, or
accommodating new raw material and production efficiencies.

Earnings per common share
Earnings per common share are based on the weighted average number of common
and common equivalent shares outstanding during each period. In 1991, the tax
benefits of $2,246,000 attributable to all preferred dividends paid to
Employee Stock Ownership Plans (ESOPs) were credited directly to retained
earnings. However, for primary earnings per share calculations, such
dividends were considered earnings applicable to common stock. Beginning in
1992, the tax benefits applicable to pentair. inc. and subsidiaries preferred
dividends paid to ESOPs are: for allocated shares credited to income tax
expense; and for unallocated shares, credited to retained earnings and are
not considered earnings applicable to common stock.
<PAGE>
Notes To Consolidated Financial Statements

Fully diluted computations assume full conversion of each series of
preferred stock into common stock, the elimination of preferred dividend
requirements, and the recognition of the tax benefit on deductible ESOP
dividends applicable to allocated shares payable based on the converted
common dividend rate. Conversion was assumed during the portion of each
period that the securities were outstanding. No fully dilutive data is shown
for the cumulative effects of accounting changes and 1992 net income because
conversion of preferred shares would be anti-dilutive.
On April 21, 1993 the board of directors approved a three-for-two stock
split in the form of a 50% stock dividend. The dividend was payable June 11,
1993 to shareholders of record at the close of business on May 14, 1993. All
references in the financial statements to average number of shares
outstanding and related prices, per share amounts, and the stock plan data
have been restated to reflect this split.

Interest capitalization
The following interest costs applicable to capital projects have been
excluded from interest expense: 1993, $735,000; 1992, $788,000; and 1991,
$661,000.

Pending Acquisition
On December 22, 1993, Pentair entered into an agreement to acquire the net
assets and business of the Schroff Group (Schroff) of Germany for
approximately $150,000,000. Bank borrowings are expected to be used to
finance the purchase. Closing is anticipated to occur by March 1994; however
the structure of the agreement provides for an effective date of January 1,
1994.
Schroff designs, manufactures and markets cabinets, cases, subracks and
accessories for the electronics industry. SchroffUs estimated 1993 sales were
approximately $160,000,000.

Cumulative Effects of Accounting Changes
Effective January 1, 1992, Pentair adopted Financial Accounting Standard
(FAS) No. 106, REmployersU Accounting for Postretirement Benefits Other Than
PensionsS and Financial Accounting Standard (FAS) No. 109, RAccounting for
Income Taxes.S See Notes 14 and 12, respectively. The combined effect of
these accounting changes was to decrease 1992 net income by $42,237,000
($41,625,000 cumulative effect and $612,000 operations) or $2.78 per share.
As to FAS 106, the cumulative effect recorded as of January 1, 1992 was
$36,891,000 or $2.32 per primary share. This represents the January 1, 1992
projected benefit obligation for prior service cost ($59,504,000) less taxes
(a $22,613,000 reduction in net deferred taxes). As to FAS 109, the
cumulative effect recorded as of January 1, 1992 was to decrease net income
by $4,734,000, or $.29 per primary share.

Current Assets
Accounts receivable are stated net of allowances for doubtful accounts of
$6,197,000 in 1993 and $5,541,000 in 1992. Inventories are stated at the
lower of cost (first-in, first-out - FIFO and moving average for the Paper
segment and last-in, first-out - LIFO for the Specialty and General
Industrial segments) or market. If all LIFO inventories were valued at FIFO,
aggregate inventory would have been $204,108,000 and $185,476,000 at December
31, 1993 and 1992, respectively.

Cash Flow Information
Payments for interest and income taxes were:
<TABLE>
<CAPTION>
(In thousands) 93 92 91
<S> <C> <C> <C>
Interest (net of $ 20,907 $ 18,926 $ 28,800
capitalized interest)
Income taxes 31,016 32,700 33,520
</TABLE>
<PAGE>

Borrowings
The long-term debt is summarized as follows:
<TABLE>
<CAPTION>
(In thousands) 93 92
<S> <C> <C>
Revolving credit loans $ 65,000 $ 138,000
Private placement debt - avg. 7.64% 160,000 60,000
Other - avg. 7.6%, due to 1995 14,659 23,477
Total 239,659 221,477
Current maturities 803 9,958
Total long-term debt $ 238,856 $ 211,519
</TABLE>

Revolving credit agreements, as revised as of February 11, 1994, are with
seven banks providing credit facilities aggregating $285,000,000, including
$65,000,000 available in Euro-currencies. The agreements provide for interest
at a Rcost of fundsS rate and repayment of loans in 16 quarterly installments
beginning April 1, 1997. The Company uses a bid loan program. The December
31, 1993 rate was 3.55%; and average rates were 3.7% in 1993 and 4.3% in
1992.
The private placement debt of $160,000,000 includes the following:
(In thousands)
<TABLE>
<CAPTION>
Maturity Amount Rate Maturity Amount Rate
<S> <C> <C> <C> <C> <C> <C>
1996 $45,000 8.68% 2000 $20,500 7.30%
1997 15,000 6.29 2001 15,000 7.42
1998 15,000 8.69 2003 15,000 6.82
1999 34,500 7.06
</TABLE>

Interest rate SWAP agreements of $100,000,000, with an effective annual
interest rate of 9.4%, mature in 1995-1996. There is limited credit risk
since payments are currently being made to counterparties which are banks
with acceptable financial positions.
Total long-term debt maturities are $803,000, $12,867,000, $45,012,000,
$27,201,000 and $31,266,000 for the years 1994 to 1998, respectively.
Debt agreements contain various restrictive covenants, including a
limitation on the payment of dividends and certain other restricted payments.
Under the most restrictive covenants, $68,000,000 of the December 31, 1993
retained earnings were unrestricted for such purposes.
Long-term debt, including current maturities, has a carrying value of
$239,659,000 and a fair value of $260,145,000. The estimated fair value
represents the present value of debt service at rates currently available to
the Company for issuance of debt with similar terms plus the net liability of
$11,260,000 applicable to interest rate SWAP agreements valued based on
market prices quoted by dealers. Except for the above, all financial
instruments are carried at amounts that approximate estimated fair value.

Lease Commitments
At December 31, 1993, major operating lease commitments include: paper
production equipment (expire in 1996, 1999 and 2006) and a power plant
(expires in 2007). Future minimum rental payments under all operating leases
are:
(In thousands)
<TABLE>
<CAPTION>
Year
<S> <C>
1994 $ 18,236
1995 16,173
1996 11,926
1997 11,026
1998 9,653
Thereafter 56,708
Total $123,722
</TABLE>

Rent expense related to operating leases amounted to $20,542,000, $19,638,000
and $19,100,000 in 1993, 1992 and 1991, respectively.

Commitments and Contingencies
The Company and its subsidiaries are involved in various legal proceedings
and claims. Such actions include claims by state and federal agencies
asserting liability for past disposal of hazardous waste, generally in
conjunction with numerous other codefendants or potential codefendants. The
CompanyUs management reviews each individual site, taking into consideration
the number of parties involved at the site, joint and several liability of
other potentially responsible parties (PRPs), the level of contribution that
may be attributed to the Company relative to the other parties, the nature
and magnitude of the wastes involved, the method and extent of remediation,
potential insurance coverage, the estimated legal and consulting expense with
respect to each site, and the time period over which any costs would likely
be incurred. Reserves are established, where required, based on this
evaluation. Management believes, on advice of internal legal counsel based on
facts presently known, it is remote that the outcome of such legal
proceedings and claims will have a material adverse effect on the CompanyUs
financial position or future results of operations.
<PAGE>
pentair. inc. and subsidiaries
Notes To Consolidated Financial Statements

Employee Stock Ownership Plan (ESOP)
The Company has an Employee Stock Ownership Plan (ESOP) covering
non-bargaining and some bargaining U.S. employees. The employees receive
Series 1990 Preferred Stock in lieu of cash 401(k) matching contributions and
other cash compensation.
To finance the plan, the ESOP borrowed $56,500,000 from the Company and
exchanged it for 1,867,768 shares of Callable Cumulative Voting Convertible
Preferred Stock, Series 1990 at $30.25 per share. The unpaid balance of the
twenty-year, 8.75% loan is included in the CompanyUs balance sheet as
unearned ESOP compensation.
Gross compensation expense (i.e. the value of shares allocated to
participant accounts) was $6,512,000, $4,745,000, and $4,719,000 in 1993,
1992 and 1991, respectively. The stock held by the ESOP is released for
allocation to the participantsU accounts as principal and interest is paid
from dividends on unallocated shares ($3,418,000, $3,848,000, and $4,247,000
in 1993, 1992 and 1991, respectively) and Company contributions. Through
December 31, 1993, the loan has been reduced $28,882,000; of this,
$21,097,000 (697,425 shares) has been allocated to participants accounts as
compensation and dividends; and the difference is included in unearned
compensation.
A separate frozen ESOP holds the Series 1988 Preferred Stock.

Omnibus Stock Incentive Plan
In April 1990, shareholders approved the 1990 Omnibus Stock Incentive Plan
(the Plan) which authorizes the issuance of up to 1,634,176 shares of the
CompanyUs common stock. The Plan extends to January 11, 2000. At December
31, 1993, there were 681,878 shares available for grant under the Plan.
Pre-1990 grants made under predecessor plans will be governed under the
provisions of those plans.
The Plan allows for the granting of nonqualified stock options, incentive
stock options, restricted stock and incentive compensation units (ICUs).
Although none have been issued, the Plan also allows for granting of stock
appreciation rights, performance shares and performance units.

Restricted Shares and ICUs
Restrictions on the restricted shares and ICUs generally expire in the third,
fourth and fifth years after issuance. Beginning with 1993 grants, ICU
restrictions will expire at the end of three years. The value of each ICU is
based on the increase in book value of common stock during the restriction
period and is payable when the restrictions lift. Compensation expense
consists of (a) amortization of the market value of the stock on the date of
award over the period in which the restrictions lapse, and (b) the annual
increase in ICU value. Compensation expense was $2,491,000 in 1993,
$2,800,000 in 1992 and $2,300,000 in 1991. The Company records incremental
tax benefits resulting from the program as additional paid-in capital.

Options
Options are granted to purchase shares at not less than fair market value of
shares on date of grant. Options generally expire after five years but may
expire up to ten years from date of grant. Option data is as follows:
<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Outstanding-beginning 601,158 488,964 370,765
Granted 196,499 224,977 228,090
Exercised (158,652) (98,719) (76,759)
Forfeited (11,134) (14,064) (33,132)
Outstanding-end 627,871 601,158 488,964

Exercisable-end of year 245,577 187,707 139,132
Option prices per share:
-when granted $ 27.00 $ 24.55- $ 16.3333
$ 29.4167
-when exercised $ 13.6365- $ 13.6365- $ 13.6365-
$ 29.4167 $ 21.3333 $ 21.3333
-outstanding $ 16.3333- $ 13.6365- $ 13.6365-
$ 29.4167 $ 29.4167 $ 21.8333
</TABLE>
<PAGE>
11
ShareholdersU Equity
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-in Retained
(In thousands, except share amounts) Shares Amount Shares Amount Capital Earnings
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1990 4,016,681 $ 121,437 10,366,982 $ 1,728 $ 107,043 $ 138,681
Net income _ _ _ _ _ 41,100
Common dividends _ _ _ _ _ (9,586)
Preferred dividends _ _ _ _ _ (8,604)
Employee stock plans - net _ _ 74,317 12 1,471 _
Tax benefit of preferred dividends _ _ _ _ _ 2,246
Conversion of Preferred
- Series 1988 (4,177) (418) 11,868 2 372 _
- Series 1990 (5,017) (151) 3,680 1 114 _
Balance December 31, 1991 4,007,487 120,868 10,456,847 1,743 109,000 163,837
Net income _ _ _ _ _ 1,175
Common dividends _ _ _ _ _ (10,318)
Preferred dividends _ _ _ _ _ (8,545)
Employee stock plans - net _ _ 72,688 12 2,412 _
Tax benefit of preferred dividends _ _ _ _ _ 1,463
Conversion of Preferred
- Series 1988 (4,056) (406) 10,780 2 402 _
- Series 1990 (10,733) (325) 8,097 1 311 _
Balance December 31, 1992 3,992,698 120,137 10,548,412 1,758 112,125 147,612
Net income _ _ _ _ _ 46,600
Common dividends _ _ _ _ _ (11,931)
Preferred dividends _ _ _ _ _ (6,114)
Employee stock plans - net _ _ 86,714 15 1,934 _
Tax benefit of preferred dividends _ _ _ _ _ 1,320
Stock Dividend _ _ 6,025,513 1,004 (1,048) _
Conversion of Preferred
- Series 1987 (2,000,000) (50,000) 1,450,780 242 49,706 _
- Series 1988 (3,820) (382) 11,330 1 374 _
- Series 1990 (12,435) (375) 11,889 2 369 _
Balance December 31, 1993 1,976,443 $ 69,380 18,134,638 $ 3,022 $ 163,460 $ 177,487
</TABLE>
On April 21, 1993 the board of directors approved a three-for-two stock split
in the form of a 50% stock dividend. The dividend was payable June 11, 1993
to shareholders of record at the close of business on May 14, 1993.
The two classes of preferred stock (par value - $.10) are: $7.50 Callable
Cumulative Convertible Preferred Stock, Series 1988; and 8% Callable
Cumulative Voting Convertible Preferred Stock, Series 1990. Both issues are
held by ESOPs (See Note 9). The preferred shares are convertible into common
stock and are redeemable, in whole or in part, at the option of the Company
on or after the dates indicated below, and at redemption prices declining to
the original price per share after ten years.

<TABLE>
<CAPTION>
Series Series
88 90
<S> <C> <C>
Shares
Authorized 300,000 2,500,000
Issued and outstanding 137,522 1,838,921
Liquidation value $ 100.00 $ 30.25
Conversion
Price of common $21.33 to $26.67 $ 26.217
Shares of common 4.6875 to 3.75 1.1538
Early redemption date January 1991 March 1994
</TABLE>
<PAGE>
pentair. inc. and subsidiaries

All outstanding shares of its $1.50 Cumulative Convertible Preferred
Stock, Series 1987 were called for redemption on March 15, 1993. In lieu of
redemption, substantially all of the preferred shares were converted into
1,450,780 shares of common stock.
Upon the retirement or other termination of an ESOP participant, the
shares of preferred stock (Series 1988 and 1990) in which he or she is vested
are automatically converted into common shares and distributed in that form,
with fractional shares paid in cash.

Provision for Income Taxes
The Company adopted FAS 109 effective January 1, 1992. Accordingly, the 1993
and 1992 deferred income taxes have been determined using an asset and
liability approach whereas 1991 deferred income taxes are based on the
revenues and expenses included in the Consolidated Statement of Income.
The components of earnings before income taxes were as follows:
<TABLE>
<CAPTION>
(In thousands) 93 92 91
<S> <C> <C> <C>
Domestic $ 79,251 $ 66,840 $ 70,559
Foreign (1,851) 5,860 3,541
$ 77,400 $ 72,700 $ 74,100
</TABLE>
The provisions for income taxes, excluding tax benefits credited directly
to shareholdersU equity (See Note 11) were as follows:
<TABLE>
<CAPTION>
(In thousands) 93 92 91
<S> <C> <C> <C>
Current
Federal (less foreign
tax credits) $ 23,396 $ 24,239 $ 27,282
State 4,075 4,206 4,210
Foreign (28) 2,069 2,885
Current provision 27,443 30,514 34,377
Deferred - principally federal 3,357 (614) (1,377)
Total provision $ 30,800 $ 29,900 $ 33,000
</TABLE>

A reconciliation of the statutory federal tax rate to the effective rate
follows:
<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 34.0% 34.0%
State and local income taxes,
net of federal income
tax benefit 3.5 3.8 3.7
ESOP dividend benefit (1.0) (.9) _
Incremental foreign tax rate 0.9 0.1 2.3
Goodwill 1.3 1.3 1.3
Prior year adjustment (1.0) _ 2.0
Other 1.1 2.8 1.2
Effective rate 39.8% 41.1% 44.5%
</TABLE>
The tax effect of the primary temporary differences giving rise to the
CompanyUs deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
December 31, 1993
Current Long-term
(In thousands) Asset(Liability) Liability(Asset)
<S> <C> <C>
Accounts receivable allowances $ 4,692 $ _
Inventory allowances (9,124) _
Retiree medical liability 1,170 (24,820)
Accelerated depreciation _ 45,475
Warranty/product liability accruals 11,471 (2,196)
Employee benefit accruals 8,089 (11,111)
Other 5,277 170
Total deferred income taxes $ 21,575 $ 7,518
</TABLE>
<TABLE>
<CAPTION>
December 31, 1992
Current Long-term
(In thousands) Asset(Liability) Liability(Asset)
<S> <C> <C>
Accounts receivable allowances $ 3,658 $ _
Inventory allowances (7,257) _
Retiree medical liability 1,175 (22,547)
Accelerated depreciation _ 42,567
Warranty/product liability accruals 9,851 (2,729)
Employee benefit accruals 6,750 (10,747)
Other 2,877 (1,356)
Total deferred income taxes $ 17,054 $ 5,188
</TABLE>

Retirement Plans
The Company has several non-contributory defined benefit employee pension
plans covering substantially all U.S. and European employees. Employees
covered under
<PAGE>
the bargaining plans are eligible to participate at the time of employment
and the benefits are based on a fixed amount for each year of service.
Employees covered under the non-bargaining pension plans are eligible to
participate upon the attainment of age 21 and the completion of one year of
service; and benefits are based upon final average salary and years of
service. All employees are fully vested in the plans after 5-7 years of
service. The CompanyUs funding policy is to make quarterly contributions as
required by applicable regulations.
Assumptions used to develop pension data were:
<TABLE>
<CAPTION>
93 92 91
<S> <C> <C> <C>
Expense:
Discount rate 8.0% 8.5% 8.5%
Long-term rate of return on assets 9.0% 9.0% 9.0%
Rate of increase in compensation 6.0% 6.0% 6.0%
PBO discount rate year-end 7.0% 8.0% 8.5%
</TABLE>
The funded status and accrued pension cost at December 31 are as follows:
<TABLE>
<CAPTION>
Plans Whose Plans Whose
Assets Exceed Accumulated Benefits
Accumulated Benefits Exceed Assets

(In thousands) 93 92 93 92
<S> <C> <C> <C> <C>
Plan assets at
fair value $182,528 $176,555 $30,965 $16,485
Accumulated
benefit obligation (ABO):
Vested benefits $147,665 $124,485 $47,303 $27,204
Nonvested
benefits 2,316 3,040 3,666 2,077
Total ABO 149,981 127,525 50,969 29,281
Provision for
salary increases 41,898 39,383 615 _
Projected benefit
obligation (PBO) $191,879 $166,908 $51,584 $29,281
Plan assets (in excess of)
less than PBO $ 9,351 $ (9,647) $20,619 $12,796
Net transition
(liability) asset 729 1,394 (3,028) (4,024)
Unrecognized prior
service cost (3,420) (5,247) (2,555) (1,377)
Unrecognized net
gains (losses) (1,828) 15,856 (12,030) (2,786)
Minimum liability
adjustment _ _ 16,998 8,265
Accrued pension
liability $ 4,832 $ 2,356 $20,004 $12,874
</TABLE>

The components of pension cost for the U.S. plans and a European plan are
as follows:
<TABLE>
<CAPTION>
(In thousands) 93 92 91
<S> <C> <C> <C>
Service cost $ 8,582 $ 7,707 $ 7,104
Interest cost on projected
benefit obligation 15,295 14,469 13,535
Actual return on assets (23,150) (13,706) (30,895)
Net amortization and deferral 7,475 (2,106) 19,225
Net periodic pension cost $ 8,202 $ 6,364 $ 8,969
</TABLE>

At December 31, 1993, approximately 71% of the plan assets are invested in
listed stocks and bonds or cash and short-term investments. The rest of the
plan assets are invested primarily in fixed-rate guaranteed investment type
contracts purchased from insurance companies. The CompanyUs own common stock
accounted for 8% of plan assets.

Postretirement Medical and Other Benefits
The Company provides certain health care and life insurance benefits for
retired employees. Employees become eligible for these benefits if they meet
minimum age and service requirements and are eligible for retirement
benefits. FAS 106 was adopted January 1, 1992 and requires accrual of costs
during the years an employee provides service. In 1991, the expense
($3,200,000) was recognized when claims were paid.
The accrued postretirement medical and other benefits cost which are not
funded were as follows at December 31:
<TABLE>
<CAPTION>
(In thousands) 93 92
<S> <C> <C>
Accumulated postretirement
benefit obligation (APBO):
Retirees $36,566 $32,665
Fully eligible active plan participants 11,660 9,835
Other active plan participants 12,221 9,745
Total APBO $60,447 $52,245
Unrecognized prior service cost 7,454 9,074
Unrecognized net gains (losses) (4,264) 1,102
Accrued postretirement medical
and other benefits liability $63,637 $62,421
</TABLE>
<PAGE>
PENTAIR INC. AND SUBSIDIARIES
Notes To Consolidated Financial Statements
The components of the net periodic cost are as follows:
<TABLE>
<CAPTION>
(In thousands) 93 92
<S> <C> <C>
Service cost $ 754 $1,013
Interest cost on projected
benefit obligation 4,039 4,375
Amortization of plan amendment (789) (395)
Net periodic postretirement cost $ 4,004 $4,993
</TABLE>

The discount rate used in determining actuarial present value of the
benefit obligations was 7.0% and 8.0% in 1993 and 1992, respectively. The
assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 11.9 percent in 1993, declining to an
ultimate rate of 5.5 percent after the year 2000. If the health care cost
trend rate assumptions were increased by 1 percent, the accumulated
postretirement benefit obligation as of December 31, 1993 would be increased
by 11.3 percent. The effect of this change on the sum of the service cost and
interest cost would be an increase of 13.0 percent.
In November 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 112, REmployersU Accounting
for Postemployment Benefits.S The Company believes that this statement, when
adopted in 1994, will not have a material effect on its financial position or
results of operations.

Joint Ventures
The CompanyUs joint ventures include two closely related entities. Lake
Superior Paper Industries (LSPI) is a 50/50 joint venture which manufacturers
paper in Duluth, Minnesota. LSPI Fiber Co. is a 50/50 joint venture formed in
June 1993 to own 24% of a recycled pulp mill adjacent to the LSPI facility.
For federal income tax purposes, one-half of LSPI and LSPI Fiber Co. taxable
income and tax credits are included in the CompanyUs consolidated tax return.
The combined financial data is summarized as follows:
<TABLE>
<CAPTION>
(In thousands) Years Ended December 31
Operations 93 92 91
<S> <C> <C> <C>
Net sales $143,837 $150,251 $167,531
Operating income (loss) (892) 5,434 17,269
Pretax income (loss) (3,837) 3,363 14,997
</TABLE>
<TABLE>
<CAPTION>
(In thousands) December 31
Balance Sheet 93 92
<S> <C> <C>
Current assets $ 54,765 $ 47,880
Property - net 81,855 83,443
Other assets 78,191 51,125
$ 214,811 $ 182,448
Liabilities $ 36,594 $ 31,726
Deferred gain 32,486 34,195
Joint venture investment
Subordinated notes 61,000 44,000
Capital contribution 45,042 29,000
Undistributed earnings 39,689 43,527
$ 214,811 $ 182,448
</TABLE>
Advances represented by subordinated notes have been made to fund prepaid
rent payments made at year-end. Under a $382,000,000 LSPI leveraged-lease
financing, the Company is committed to provide up to $95,000,000 additional
cash to LSPI if needed to meet its lease obligation.

Quarterly Financial Data (unaudited)
<TABLE>
<CAPTION>
(In thousands, except per share amounts)
1993 4th 3rd 2nd 1st
<S> <C> <C> <C> <C>
Net sales $340,562 $345,506 $320,283 $321,829
Gross profit 84,830 85,754 76,205 76,920
Operating income 28,319 27,470 21,261 21,143
Net income 14,023 13,295 9,782 9,500
Earnings per share
Primary .69 .66 .46 .45
Diluted .67 .63 .46 .44
1992 4th 3rd 2nd 1st
Net sales $320,960 $328,195 $296,735 $292,834
Gross profit 84,964 78,944 67,987 69,597
Operating income 32,438 24,223 17,818 19,560
Net income (a) 14,922 11,581 7,880 8,417
Earnings per share
Primary (a) .80 .60 .36 .39
Diluted .71 .55 .36 .39
</TABLE>
All per share data has been adjusted for the three-for-two stock split in the
form of a 50% stock dividend in June 1993.
(a) The first quarter 1992 net income and earnings per share data is before
cumulative effects of accounting changes recorded January 1, 1992 of $41.6
million and $2.61, respectively.
<PAGE>
Earnings per share are computed independently for each quarter presented. In
1992, the sum of the quarterly fully diluted earnings per share does not
equal the total-year amount due to the differing impact of preferred stock
conversion assumptions at different income levels.

17
Business Segment Information
<TABLE>
<CAPTION>
General
Specialty Industrial Paper Joint General
(In thousands) Products Equipment Products Ventures Corporate Total
<S> <C> <C> <C> <C> <C> <C>
Sales
1993 $411,570 $534,994 $381,616 $ _ $ _ $1,328,180
1992 377,535 486,456 374,733 _ _ 1,238,724
1991 344,611 458,241 366,230 _ _ 1,169,082
Operating Income
1993 $ 41,973 $ 42,181 $ 32,980 $ (1,920) $ (17,021) $ 98,193
1992 40,166 38,600 31,456 1,682 (17,865) 94,039
1991 33,614 35,820 35,524 7,498 (17,387) 95,069
Identifiable Assets
1993 $205,737 $384,656 $254,042 $ 72,867 $ 41,499 $ 958,801
1992 188,393 366,231 229,362 58,265 27,191 869,442
1991 181,374 331,681 206,328 47,583 23,606 790,572
Depreciation and Amortization
1993 $ 7,565 $ 18,870 $ 23,595 $ _ $ 96 $ 50,126
1992 8,136 17,489 22,134 _ 142 47,901
1991 9,440 16,886 20,672 _ 152 47,150
Capital Expenditures
1993 $ 9,860 $ 18,158 $ 45,347 $ _ $ 56 $ 73,421
1992 6,712 20,964 39,240 _ 319 67,235
1991 4,952 21,451 22,951 _ 66 49,420
</TABLE>
The 1992 operating income section has been restated to be consistent with the
1993 and 1991 presentation. The joint venture column includes two 50/50 joint
ventures accounted for on the equity method: Lake Superior Paper Industries
(LSPI), a producer of supercalendered paper, and LSPI Fiber Co., which owns
24% of an adjacent recycled pulp mill. General Corporate expense includes
administrative costs, charges that do not relate to current operations and
captive insurance activities. Corporate assets include all cash and cash
equivalents. There were no significant intersegment sales.
<PAGE>
Board of Directors
(picture of eight people)
...left to right ...
George N. Butzow (1,4), 64, is Chairman of MTS Systems Cor-poration. He
has over 30 yearsU exper-ience in purchasing, quality control, advertising,
marketing and general management with MTS Systems and its predecessor
company.

H. William Lurton (1,6), 64, is the retired Chairman and Chief Executive
Officer of Jostens, Inc. He joined Jostens in 1955 and, after holding various
sales and management positions, was appointed Chief Executive Officer in 1972
and Chairman in 1975.

B. Kristine Johnson (1,4,7), 42, is Vice President and General Manager of
the Tachyarrhythmia Management Business of Medtronic, Inc. She joined the
company in 1982 and, after serving in a variety of capacities, was named Vice
President and General Manager in 1990.

Winslow H. Buxton (3,4,5), 54, is Chairman, President and Chief Executive
Officer of Pentair, Inc. He joined the company in 1986 as President of
Niagara of Wisconsin Paper Corporation. Previous experience includes
operating and senior management positions at Willamette Industries, Boise
Cascade and PublisherUs Paper.

D. Eugene Nugent (2,3,5), 66, was Chairman and Chief Executive Officer of
Pentair, Inc. until his retirement December 31, 1992. He joined the Company
in 1975. Previous experience was in engineering, marketing, finance and
general management with International Telephone and Telegraph Company and
U.S. Gypsum Company.

Quentin J. Hietpas (2,3), 63, is Senior Vice President of External Affairs
at the University of St. Thomas. An attorney, he has 30 yearsU experience in
communications management with companies such as Control Data Corporation,
Pillsbury Company and International Multifoods Corporation.

Harold V. Haverty (2,5,7), 63, is President and Chief Executive Officer of
Deluxe Corporation. He joined Deluxe in 1954 and, after holding various
management positions, was named President in 1983, Chief Executive Officer in
1986 and Chairman of the Board in 1992.

Walter Kissling (4,6), 62, is President and Chief Operating Officer of H.
B. Fuller Company, a manufacturer and marketer of specialty chemical
products. He was Executive Vice President of H.B. Fuller from July 1990 to
April 1991, and Senior Vice President from 1980 to 1990. Mr. Kissling is a
director of H. B. Fuller Company and Chairman and Director of one of its
subsidiaries, Kativo Chemical Industries, S.A.

(1) Audit Committee
(2) Compensation Committee
(3) Executive Committee
(4) Shareholder Affairs Committee
(5) Nominating Committee
(6) Share Rights Committee
(7) Public Policy Committee
<PAGE>

Pentair Officers and Subsidiary Presidents
(picture of 7 people)
.left to right .
Richard W. Ingman
Vice President, Corporate Development
Gerald C. Kitch
Group President, General Industrial Equipment
Allan J. Kolles
Vice President,
Human Resources
Mark T. Schroepfer
Vice President, Controller
Joseph R. Collins
Group President,
Specialty Products
Ronald V. Kelly
Group President, Paper
Roy T. Rueb
Vice President, Treasurer
(picture of 10 people)
left to right
Barry J. Wetzel
President, Lincoln Automotive
Ronald V. Mason
President, Federal
Cartridge Company
James A. White
President, Porter-Cable Corporation
Nevin J. Craig
President, Delta International
Machinery Corp.
Gunter Ostermeyer
President, Lincoln
Industrial
James H. Frank
President, Hoffman Engineering Company
Fred C. Lavender
President, F. E. Myers
Robert V. Touchette
President, Cross Pointe Paper Corporation
Wilson Blackburn
President, Lake Superior Paper Industries
G. Robert Gey
President, Niagara of Wisconsin Paper Corporation

not pictured
Benno Gengenbach
President, Schroff
<PAGE>

Corporate and Subsidiary Management
PENTAIR, INC.
Winslow H. Buxton
Chairman, President and Chief Executive Officer
Joseph R. Collins
Group President, Specialty Products
Gerald C. Kitch
Group President, General Industrial Equipment
Ronald V. Kelly
Group President, Paper
Richard W. Ingman
Vice President, Corporate Development
Allan J. Kolles
Vice President, Human Resources
Roy T. Rueb
Vice President, Treasurer
Mark T. Schroepfer
Vice President, Controller
Debby S. Knutson
Assistant Vice President, Human Resources
Gary J. Burwell
Director, Internal Audit
Mark J. Cain
Director, Corporate Communications and Public Affairs
Douglas E. Pihl
Director, Corporate Tax
Robert P. Fredrickson
Senior Consultant, Labor Relations and Safety
John T. Moynihan, Jr.
Senior Consultant, Benefits and Employment Law
Jeanne M. Gode
Risk Management Counsel

CROSS POINTE PAPER CORPORATION
Robert V. Touchette
President
James F. Grove
Vice President, Sales
Thomas G. Murphy
Vice President, Finance
Robert D. Kopisch
Vice President and General Manager, Flambeau Mill
Jobe B. Morrison
Vice President and General Manager, Miami Mill
W. F. Fuehrer
Vice President, Human Resources

DELTA INTERNATIONAL MACHINERY CORP.
Nevin J. Craig
President
Waldo E. Bair
Vice President, Sales and Marketing
Louis C. Brickner
Vice President, Engineering and Product Development
Gary W. Beadles
Vice President, Tupelo Operations
Marikay Jung
Vice President, Human Resources
John P. Jodkin
Vice President, Finance
James J. McEntee
General Manager, Delta Canada
Lucas Chang
Director, Far East Sourcing and Product Development
Robert J. Stein
Director, Strategic Planning and Financial Analysis

FEDERAL CARTRIDGE COMPANY
Ronald V. Mason
President
Paul E. Thompson
Vice President, Operations
Lester A. Jones
Vice President, Sales and Marketing
James H. Rodgers
Vice President, Human Resources
Michael G. Meyer
Vice President, Finance
David C. Longren
Vice President, Engineering
Mark Lee
Vice President, Quality

HOFFMAN ENGINEERING COMPANY
James H. Frank
President
David W. Herbst
Vice President, Finance
Donald C. Kemp
Vice President, Operations
T. Kent Vesper
Vice President, Human Resources
John P. McDonell
Vice President, Information Technology
Delton D. Nickel
Vice President, Sales and Marketing
Vincent J. Tomlinson
Vice President, Engineering
Donald B. Westman
Vice President, Quality
Gerald T. Wilichowski
Vice President, Operations

LINCOLN INDUSTRIAL
European Operations
Gunter Ostermeyer
President
Werner Brauer
Vice President and Managing Director
Klaus Lange
Director, Manufacturing
Hans-Peter Mechler
Director, Finance
Martin Jung
Director, Human Resources
Zdravko Paluncic
Director, Research and Development

U.S. Operations
John Little
Vice President and General Manager
Stephen M. Hager
Vice President, Operations
John Krenzel
Vice President, Finance
Albert Adams
Vice President, Human Resources
Peter Laucis
Vice President, Quality and Product Engineering
Jim Grove
Vice President, Sales and Marketing

LINCOLN AUTOMOTIVE
Barry J. Wetzel
President
Kenneth L. Fehlig
Vice President, Marketing and Sales
Lawrence R. Geiger
Vice President, Finance
Paul F. Murphy
General Manager, Canada
Virginia A. Zarinelli
Director, Human Resources/Training

F.E. MYERS
Fred C. Lavender
President
Richard G. Luttrell
Vice President, Water Systems, Environmental and Industrial Products
Dan D. Elliott
Vice President, Product Development
Ronald G. Leddy
Vice President, Manufacturing
J. Michael Gerard
Vice President, Human Resources
Thomas L. Pellegrino
Vice President, Finance
Kathleen M. Buetow
Director, Retail and Canadian Operations
Larry A. Donelson
Director, International Operations

NIAGRA OF WISCONSIN
Paper Corporation
G. Robert Gey
President
Robert L. Wheeler
Vice President, General Manager
David J. Johnson
Vice President, Finance
Gary Binder
Vice President, Sales and Marketing
Robert J. Tercha
Vice President, Engineering
Kenneth E. Porter
Vice President, Human Resources
William Dedrick
Vice President, Materials Management

PPORTER-CABLE CORPORATION
James A. White
President
Rene J. Donars
Vice President, Sales and Marketing
James S. Green
Vice President, Finance
Matthew G. Popik
Vice President, Engineering
John W. Ulmer
Vice President, Human Resources
Bobby E. Sheffield
Vice President, Distribution
and Service
Steven R. Bentson
Vice President, Operations

SCHROFF
Benno Gengenbach
President
Bernd Benz
Managing Director, Schroff France
Bernd-Uwe Kaupisch
Managing Director, Schroff United Kingdom
Isao Miyoshi
Managing Director, Schroff Japan
Udo O. Schroff
Managing Director, Schroff United States
Soren Kjell
Managing Director, Schroff Sweden
Enzio Tunesi
Managing Director, Schroff Italy
Hermann Heier
Director, Electronics Division
Wolfgang Schwind
Director, Purchasing
Ronald Weingartner
Director, Sales
Dr. Hans-Joachim Wunsche
Director, Electronic Packaging Division
<PAGE>
Investor Information
PENTAIR STOCK DATA
The common stock of Pentair (Symbol: PNTA) is quoted on the NASDAQ National
Market System. The price and dividend information below, which has been
restated to reflect a June 11, 1993 stock dividend, represents closing sale
prices reported in the NASDAQ/NMS Monthly Statistical Report. There were
3,370 shareholder accounts on December 31, 1993.

PRICE RANGE AND DIVIDENDS OF COMMON STOCK
<TABLE>
<CAPTION>
1993 High Low Dividends Last
Paid Price
<S> <C> <C> <C> <C>
First Quarter $32 5/8 $26 1/2 $.17 $32 5/8
Second Quarter $38 1/4 $32 1/2 $.17 $38 1/4
Third Quarter $40 1/4 $34 1/4 $.17 $34 3/4
Fourth Quarter $35 1/2 $31 $.17 $33
</TABLE>
<TABLE>
<CAPTION>
1993 High Low Dividends Last
Paid Price
<S> <C> <C> <C> <C>
First Quarter $32 $26 3/8 $.163 $27 1/8
Second Quarter $30 5/8 $23 7/8 $.163 $24 1/8
Third Quarter $27 $22 7/8 $.163 $24 5/8
Fourth Quarter $28 1/2 $24 3/8 $.163 $26 3/8
</TABLE>

Securities Market Makers
The following firms make markets for Pentair, Inc. stock:
Dain Bosworth, Inc., Minneapolis, MN
First Boston Corporation, New York, NY
Kirkpatrick, Pettis, Smith, Polian Inc., Omaha, NE
Lehman Bros., New York, NY
Mayer & Schweitzer, Inc., Jersey City, NJ
Merrill Lynch Pierce Fenner & Smith, Inc.,
New York, NY
Piper Jaffray & Hopwood, Minneapolis, MN
Prudential Securities, New York, NY
Sherwood Securities Corp., New York, NY
Troster Singer CP, Jersey City, NJ
Weeden & Co., New York, NY

Common Dividends In the first quarter of 1994, the board of directors
increased the cash dividend to $.18 per share quarterly for an indicated
annual rate of $.72 per share. Pentair has now paid 72 consecutive quarterly
dividends. See Note 6 of Notes to Consolidated Financial Statements for
certain dividend restrictions.

Annual Meeting The annual meeting of shareholders will be held at the
Northland Inn, 7101 Northland Circle, Brooklyn Park, Minnesota, at 10:00 a.m.
on April 20, 1994. Management and directors encourage all shareholders to
attend the annual meeting.

Form 10-K Available A copy of the Company annual report on Form 10-K, as
filed with the Securities and Exchange Commission, will be provided on
request to shareholders. Written requests should be directed to the Corporate
Secretary, Pentair, Inc., Waters Edge Plaza, 1500 County Road B2 West, St.
Paul, Minnesota 55113.

Dividend Reinvestment Plan Pentair has established a Dividend Reinvestment
Plan. This plan enables shareholders to automatically reinvest Pentair
dividends and to invest up to an additional $3,000 per quarter in Pentair
common stock, with any costs of purchasing the shares paid by the Company.
The plan brochure and enrollment cards are available from the Company or
Norwest Bank Minnesota, N.A.

Takeover Defense Pentair is committed to protecting its stakeholders from
harm by corporate raiders and unfriendly takeover actions. Information on our
position may be obtained by writing to the Pentair, Inc. Corporate Secretary
at the corporate office.

Registrar and Transfer Agent
Norwest Bank Minnesota, N.A.
South St. Paul, MN 55075-0738
Certified Public Accountants
Deloitte & Touche
St. Paul, MN 55101
General Counsel
Henson & Efron, P.A.
Minneapolis, MN 55401
<PAGE>

pentair. inc. and subsidiaries
Eleven-Year Financial Summary
<TABLE>
<CAPTION>
(In millions, except Per 93 92 91 90 89 88 87 86 85 84 83
Share Data)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net Sales
Specialty Products 411.6 377.5 344.6 344.9 337.5 317.1 289.7 207.7 170.6 155.8 61.6
General Industrial 535.0 486.5 458.3 460.3 460.9 127.9 112.5 38.4 _ _ _
Paper Products 381.6 374.7 366.2 370.7 365.2 378.3 387.0 377.8 363.6 389.6 257.7
Total 1,328.2 1,238.7 1,169.1 1,175.9 1,163.6 823.3 789.2 623.9 534.2 545.4 319.3

Operating Income
Specialty Products 42.0 40.2 33.6 28.1 29.5 30.6 31.2 20.1 16.9 11.6 4.5
General Industrial 42.2 38.6 35.9 34.5 32.6 9.9 11.1 2.7 _ _ _
Paper Products* 31.0 33.1 43.0 33.7 36.0 50.5 9.0 18.4 22.8 37.3 22.0
Corporate (17.0) (17.9) (17.4) (15.7) (11.0) (12.3) (8.7) (7.4) (5.9) (6.5)
(4.2)
Total 98.2 94.0 95.1 80.6 87.1 78.7 42.6 33.8 33.8 42.4 22.3

Net Income (a) 46.6 42.8 41.1 33.0 36.4 39.8 21.9 15.2 20.1 21.2 11.9
Common Share Data
EPS - Diluted (a) 2.20 2.03 2.01 1.62 1.90 2.23 1.30 1.03 1.35 1.50
1.00
Cash Dividends .68 .65 .61 .59 .53 .45 .42 .40 .37 .33
.29
Stock Dividends 50 _ _ _ _ 10 _ 10 25 _ 25
Book Value 18.58 16.43 17.58 15.94 14.85 13.35 11.06 10.19 9.49 8.46
7.29
Stock Price 33 26 3/8 26 7/8 16 1/2 18 3/8 20 7/8 12 1/2 15 1/2 17 1/8 12 3/4 12
3/4
Balance Sheet Data
Preferred Equity (net) 33.9 77.4 74.1 68.4 65.9 67.6 50.0 _ _ _ 9.4
Common Equity 336.9 260.0 275.7 247.8 241.0 214.2 158.6 145.4 134.6 119.3 92.2
Common Shares 18.1 15.9 15.7 15.6 16.2 16.1 13.1 12.9 11.7 9.3 8.4
ROE %(a) 14 13 13 11 14 20 13 11 16 19 16
Operating Cash 102.0 88.4 79.4 72.0 71.2 65.6 50.8 44.4 43.2 38.1 25.6
Capital Expenditures 73.4 67.2 49.4 61.3 83.4 45.7 53.9 45.1 61.6 35.6 19.6
Total Assets 958.8 869.4 790.6 768.9 781.4 744.7 440.4 445.0 305.8 282.5 209.4
Debt to Capital % 39 39 36 42 45 47 30 50 36 36 22
</TABLE>

Includes Joint Ventures
All Share and Per Share Data adjusted for stock dividends.
(a) 1992 net income and earnings per share are before the cumulative effects
of accounting changes.
See Note 3 of Notes to Consolidated Financial Statements.
<PAGE>
PENTAIR CODE OF BUSINESS CONDUCT

Pentair, Inc. chooses to be an independent, publicly owned company, and this
statement is to guide the development of its organization and the conduct of
its business affairs.

Our businesses are to be managed in keeping with the highest business,
ethical, moral and patriotic standards applicable to a publicly owned
corporation.

Our businesses are to be operated so that we are respected for our actions by
shareholders, employees, plant communities, customers, suppliers, investors
and all other stakeholders.

Our approach to business is intended to make Pentair, Inc. a top-performing
company managed
and operated to provide long-term benefits to all constituents.

Operating Guidelines
Balanced consideration will be given to the interests of shareholders and
employees in managing the corporation.
The corporate staff will be kept to minimum size, and subsidiary operations
will be as autonomous as practicable.
A strong work ethic is expected of all constituents. Good performance will
be freely recognized. Poor performance will not be condoned.
We will strive to: operate with the highest regard for the environment;
eliminate environmental risks from the workplace; and minimize emissions and
waste.
The dignity and self-worth of all persons involved with the Company will be
respected.
Safety in the workplace and in work practices shall
be maximized.

We will encourage, aid and promote the physical and mental health, and
wellness of employees and their families.
Qualified employees will be given priority for internal employment
opportunities.
Standards of ethics, integrity and work practices shall apply equally to
all employees.
We will honor agreements, meet obligations timely, maintain the spirit and
intent of our commitments, and value good relationships.
Hiring emphasis will recognize ability, compatibility and integrity, and
will not discriminate on the basis of sex, religion, race or age.
We will promote open and candid communications with emphasis on informality
and on conversational exchanges.

<PAGE>

PENTAIR
Corporate Office
Pentair, Inc.
Waters Edge Plaza
1500 County Road B2 West
St. Paul, MN 55113-3105
612-636-7920

Cross Pointe Paper Corporation
1295 Bandana Boulevard North, Suite 335
St. Paul, MN 55108
612.644.3644

Delta International
Machinery Corp.
246 Alpha Drive
Pittsburgh, PA 15238
412.963.2400

Federal Cartridge Company
900 Ehlen Drive
Anoka, MN 55303
612.421.7100

SUBSIDIARY OFFICES

Hoffman Engineering Company
900 Ehlen Drive
Anoka, MN 55303
612.421.2240

Lincoln Industrial
One Lincoln Way
St. Louis, MO 63120-1578
314.679.4200

Lincoln Automotive
One Lincoln Way
St. Louis, MO 63120-1578
314.679.4300

F. E. Myers Co.
1101 Myers Parkway
Ashland, OH 44805-2285
419.289.1144

Niagara of Wisconsin
Paper Corporation
1101 Mill Street
Niagara, WI 54151
715.251.3151

Porter-Cable Corporation
4825 Highway 45 North
Jackson, TN 38302-2468
901.668.8600

Schroff
Langenalber Str. 96-100
D-75334 Straubenhardt, Germany
(7082)794.0
JOINT VENTURE COMPANY
Lake Superior Paper Industries
100 North Central Avenue
Duluth, MN 55807
218.628.5100
<PAGE>

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

As of December 31, 1993, the following are wholly-owned
subsidiaries of the Registrant except as noted:

State or Other
Jurisdiction of
Incorporation
Subsidiary or Organization

Specialty Products

Delta International Machinery Corp. Minnesota

Pentair Canada, Inc. 1 Ontario, Canada

Porter-Cable Corporation Minnesota

McNeil (Ohio) Corporation Minnesota

F. E. Myers Co., Division of
McNeil (Ohio) Corporation -

Pentair Canada, Inc. 1 Ontario, Canada

General Industrial Equipment

McNeil (Ohio) Corporation Minnesota

Lincoln Industrial, Division of
McNeil (Ohio) Corporation -

Lincoln Automotive, Division of
McNeil (Ohio) Corporation -

Pentair Canada, Inc. 1 Ontario, Canada

APNO, S.A. de C.V. 2 Mexico

Telestack Company 2 Ohio

FC Holdings Inc. Delaware

Federal-Hoffman, Inc. 3 Minnesota

Federal Cartridge Company, Division
of Federal-Hoffman, Inc. -

Hoffman Engineering Company,
Division of Federal-Hoffman, Inc. -

Hoffman Engineering Company
Limited 4 United Kingdom

Hoffman Engineering, S.A. de C.V.4 Mexico

Schroff Inc. 3 Rhode Island

Schroff Co. Ltd. 3 Taiwan

Schroff K.K. 3 Japan

EuroPentair, GmbH Germany

Schroff, GmbH 5 Germany

Schroff U.K. Ltd. 5 United Kingdom

Schroff S.A. 5 France

Schroff S.r.L. 5 Italy

Schroff Scandinavia AB 5 Sweden

Lincoln GmbH 6 Germany

Lincoln Belgium N.V. Belgium

Paper Products

Cross Pointe Paper Corporation Minnesota

Flambeau Paper Corp. 7 Wisconsin

Miami Paper Corporation 7 Minnesota

Dayton Paper Corporation 7 Minnesota

Niagara of Wisconsin Paper
Corporation Wisconsin

Pentair Duluth Corp. 8 Minnesota

Pentair Duluth Pulp Corp.9 Minnesota

Duluth Holdings (Paper) Corp. Minnesota

General Corporate

Federal-Hoffman International, Inc. 4 Guam

Pentair FSC Corporation 2 U.S. Virgin Islands

Penwald Insurance Company Vermont

FOOTNOTES:

1 Wholly-owned by Delta International Machinery Corp. and
McNeil (Ohio) Corporation, having the following divisions:
Delta International Machinery, F. E. Myers Company, and
Lincoln Canada.

2 A wholly-owned subsidiary of McNeil (Ohio) Corporation.

3 A wholly-owned subsidiary of FC Holdings Inc.

4 A wholly-owned subsidiary of Federal-Hoffman, Inc.

5 A wholly-owned subsidiary of EuroPentair, GmbH.

6 Wholly-owned by EuroPentair GmbH and Telestack
Company, a subsidiary of McNeil (Ohio) Corporation.

7 A wholly-owned subsidiary of Cross Pointe Paper
Corporation.

8 Pentair Duluth has a 50% interest in Lake Superior Paper
Industries, a joint venture with Minnesota Paper Incorporated.

9 Pentair Duluth Pulp, a wholly-owned subsidiary of Duluth Holdings (Paper)
Corp., has a 50% interest in LSPI Fiber Co.,a joint venture with Minnesota
Pulp Incorporated, which has a 24% interest in Superior Recycled Fiber
Industries, a Minnesota joint venture, of which the 76% owner is Superior
Recycled Fiber Corporation.

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration
Statements No. 2-83635, No. 2-88670, No. 33-36256, No. 33-
38534, No. 33-42057, No. 33-42268, and No. 33-45012 of
Pentair, Inc. on Form S-8 of our reports dated February 11,
1994, appearing in and incorporated by reference in this
Annual Report on Form 10-K of Pentair, Inc. for the year
ended December 31, 1993.

DELOITTE & TOUCHE

Saint Paul, Minnesota
March 28, 1994