SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K / A-1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 - For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-640
NL INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 13-5267260
- -------------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
16825 Northchase Drive, Suite 1200, Houston, Texas 77060-2544
- -------------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (281) 423-3300
------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------------------ --------------------------
Common stock ($.125 par value) New York Stock Exchange
Pacific Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
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, 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 the voting stock held by non-affiliates of the
registrant at March 14, 2002 approximated $137 million.
There were 48,820,984 shares of common stock outstanding at March 14, 2002.
Documents incorporated by reference:
The information required by Part III is incorporated by reference from the
Registrant's definitive proxy statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A not later than 120 days after the
end of the fiscal year covered by this report.
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
year ended December 31, 2001 as set forth below and in the pages attached
hereto:
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K.
---------------------------------------------------------
Exhibit No. 99.1, Annual Report of NL Industries, Inc. Retirement
Savings Plan on Form 11-K for the year ended December 31, 2001
(filed as an amendment to the Registrant's Annual Report on Form
10-K for the year ended December 31, 2001).
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
NL INDUSTRIES, INC.
-----------------------------
(Registrant)
Dated: June 28, 2002 By: /s/ Robert D. Hardy
-----------------------------
Robert D. Hardy
Vice President, Chief Financial Officer
Exhibit 99.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934 - for the year ended December 31, 2001
or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 - for the transition period from ____ to ____
Commission file number 1-640
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
NL INDUSTRIES, INC.
16825 Northchase Drive, Suite 1200
Houston, Texas 77060-2544
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
INDEX
Page
----
Signature Page 2
Financial Statements and Supplemental Schedule
with Report of Independent Accountants F-1 to F-10
Exhibit I - Consent of Independent Accountants
- 1 -
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Administrator has duly caused this Annual Report to be signed by the undersigned
thereunto duly authorized.
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
By: NL INDUSTRIES, INC.
PENSION AND EMPLOYEE
BENEFITS COMMITTEE,
Administrator of
NL Industries, Inc.
Retirement Savings Plan
By: /s/ Robert D. Hardy
------------------------------------
Robert D. Hardy
Chairman, Pension and
Employee Benefits Committee
June 28, 2002
- 2 -
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
WITH REPORT OF INDEPENDENT ACCOUNTANTS
December 31, 2001
NL INDUSTRIES INC.
RETIREMENT SAVINGS PLAN
INDEX
Page
----
Report of Independent Accountants F-2
Financial Statements:
- --------------------
Statements of Net Assets Available for Benefits
- December 31, 2001 and 2000 F-3
Statement of Changes in Net Assets Available for Benefits
- Year ended December 31, 2001 F-4
Notes to Financial Statements F-5 to F-9
Supplemental Schedule:
- ---------------------
Schedule of Assets (Held at End of Year) - December 31, 2001 F-10
All other schedules are omitted because they are not applicable or not required.
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and the Pension and Employee Benefits Committee of
NL Industries, Inc.:
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of the NL Industries, Inc. Retirement Savings Plan (the "Plan") at
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the year ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule, as
listed on the accompanying index, is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PricewaterhouseCoopers LLP
Houston, Texas
June 27, 2002
F-2
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2000
2001 2000
----------- -----------
ASSETS
Investments at fair value .................... $23,164,216 $26,227,925
Employer contributions receivable ............ 626,128 749,539
Cash ......................................... 656 656
Loans to participants ........................ 66,580 46,031
----------- -----------
Net assets available for benefits ........ $23,857,580 $27,024,151
=========== ===========
See accompanying notes to financial statements.
F-3
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2001
2001
------------
Additions:
Investment income:
Net depreciation in the fair value of investments ..... $ (2,557,028)
Dividend income:
NL Industries, Inc. ............................... 54,187
Halliburton Company ............................... 3,349
Tremont Corporation ............................... 403
Other ............................................. 540,792
Interest income ....................................... 651,386
------------
Total investment loss ................................. (1,306,911)
------------
Contributions:
Participants ........................................... 584,848
Employer ............................................... 626,128
------------
Total contributions ................................... 1,210,976
------------
Total decrease ........................................ (95,935)
Deductions - distributions .................................... 3,070,636
------------
Net decrease .................................................. (3,166,571)
Net assets available for benefits:
Beginning of year ......................................... 27,024,151
------------
End of year ............................................... $ 23,857,580
============
See accompanying notes to financial statements.
F-4
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1 - Summary of significant accounting policies:
The financial statements of the NL Industries, Inc. Retirement Savings
Plan (the "Plan") have been prepared in accordance with accounting principles
generally accepted in the United States of America. The following is a summary
of the significant accounting policies followed by the Plan.
Investments
Investments are recorded at fair value based upon the quoted market price
reported on the last trading day of the period for those securities listed on a
national securities exchange. Listed securities for which no sale was reported
on that date are valued at the mean between the last reported bid and ask
prices. Short-term investments are stated at fair value.
Purchases and sales of investments are reflected on a trade-date basis.
Gains or losses on sales of securities are based on average cost. The Plan
presents in the statements of changes in net assets available for benefits the
net appreciation (depreciation) in the fair value of its investments which
consists of realized gains or losses and unrealized appreciation (depreciation)
on investments.
Contributions
Contributions from employees are recorded in the period the employer makes
payroll deductions from Plan participants. Employer contributions, if any, are
accrued at the end of each year and are received in the subsequent year.
Investment income
Income (loss) from investments is recorded on an accrual basis. Dividend
income is recorded at the ex-dividend date.
Payment of benefits
Benefits are recorded when paid.
Termination of Plan
Although it has not expressed any intent to do so, NL Industries, Inc.
("NL") has the right under the Plan to discontinue contributions and to
terminate the Plan at any time subject to penalties set forth in the Employee
Retirement Income Security Act of 1974 ("ERISA"). In the event of such a
discontinuance or termination of the Plan, the net assets of the Plan would be
allocated to the Plan participants as prescribed by the Plan document, ERISA,
and the Internal Revenue Code.
F-5
Management's Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
net assets available for benefits at the date of the financial statements, the
changes in net assets available for benefits during the reporting period and,
when applicable, the disclosures of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from those
estimates.
Risks and Uncertainties
The Plan provides for various investment fund options, which invest in
combinations of common stocks and mutual funds. Investment securities are
exposed to various risk factors, such as interest rates, market conditions and
credit. Due to the level of risk associated with certain investment securities
and the level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could
materially affect participants' account balances and the amounts reported in the
Statement of Net Assets Available for Benefits.
Note 2 - Plan description:
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
The Plan's principal objective is to provide eligible employees of NL and
its U.S. subsidiaries (the "Company") with a convenient way to save on a regular
and long-term basis. The majority of the Company's U.S. employees are eligible
to voluntarily participate in the Plan after six months of employment. At
December 31, 2001, there were 84 active participants (participants currently
employed by the Company) and 250 total participants. Active participants may
make basic contributions of between 0% and 8% of their eligible compensation.
Basic contributions may consist of a combination of pre-tax and after-tax
earnings. Generally, pre-tax contributions are excluded from the employee's
taxable income until they are distributed. Eligible employees that have elected
to make the maximum basic contribution of 8% may also make a supplemental
pre-tax or after-tax contribution of between 1% and 4% of their eligible
compensation.
Participants may direct the investment of their balances in various funds
approved by the Company's Pension and Employee Benefits Committee ("PEBCO").
Participants may reallocate investments among the available funds on a daily
basis. Certain funds have been closed by PEBCO to new investments by
participants. Prior to the investment in one of the available funds,
contributions may be held as cash and be temporarily invested in securities with
maturities of less than one year, issued or guaranteed by the U.S. government or
any agency or instrumentality thereof, or deposited in a bank savings account.
In accordance with the Tax Reform Act of 1986, participants are limited in
the amount of salary reduction contributions which they may make to the Plan
under Section 402(g) of the Internal Revenue Code ($10,500 annual maximum for
2001). Highly compensated participants may be required to adjust the amount of
their contributions in order to permit the Plan to satisfy the nondiscrimination
requirements of Sections 401(k) and 401(m) of the Internal Revenue Code.
F-6
Employer contributions include funds that (i) match a portion of
participants' contributions and (ii) represent an annual contribution of 4% of
employees' eligible earnings. The Company's level of matching contributions is
determined annually and is based upon the attainment of certain operating income
target levels approved by the Management, Development and Compensation Committee
of the Board of Directors of the Company (the "MD&C Committee"). The Company
match applies only to participants' basic contributions. The level of match
approved by the MD&C Committee for 2001 and 2000 was 50% and 75%, respectively.
Employees who are eligible to participate in the Plan receive an annual
contribution to their investment account of 4% of their eligible compensation,
subject to IRS limitations on eligible compensation, which for 2001 was $170,000
($200,000 effective January 1, 2002). The Company makes this annual contribution
for each eligible employee regardless of whether the employee elects to
otherwise participate in the Plan.
A participant with less than three years of service is 0% vested in
employer contributions, 50% vested following three years of service, 75% vested
following four years of service and fully vested in all employer contributions
following five years of service. Employer contributions are fully vested upon
death, retirement, or disability, as provided in the Plan. The Company amended
the Plan to meet the vesting requirements of the Economic Growth and Tax Relief
Reconciliation Act of 2001, effective January 1, 2002. The new vesting schedule
for participants effective January 1, 2002 allows for 20% vesting following two
years of service, 50% vested following three years of service, 75% vested
following four years of service, and fully vested following five years of
service.
Distributions to employees may occur during active service or upon
termination and under prescribed circumstances. Distributions may be in the form
of lump sums, installments, annuities, or combinations thereof, or distributions
of employer securities.
The Plan was amended effective January 1, 2000 to provide participants
with the opportunity to borrow cash from their vested savings balance.
Participants are able to borrow from their fund accounts a minimum of $1,000 up
to a maximum that is generally equal to the lesser of $50,000 or 50% of their
vested account balance, whichever is less. The loans are collateralized by the
balance in the participant's account and bear interest at rates that are
commensurate with local prevailing rates as determined by PEBCO. For outstanding
loans at December 31, 2001 the rates ranged from 7.75% to 10.50%. Principal and
interest are repaid ratably over a two- to five-year period through monthly
payroll deductions.
Forfeitures of employer contributions may occur if a participant
terminates employment prior to the full vesting period or if a participant or
beneficiary, to whom a distribution is payable, cannot be located within five
years of the date on which such distribution became payable. Amounts forfeited
are used in the following order: (i) to restore the accounts of reemployed
participants, (ii) to restore the accounts of participants or beneficiaries who
apply for forfeited benefits, and (iii) to reduce employer contributions.
Forfeitures were $18,245 in 2001 and $19,633 in 2000. During 2000, $238,538 was
applied to reduce employer contributions. The balance in the forfeiture account
was $34,962 and $15,410 at December 31, 2001 and 2000, respectively.
Note 3 - Related-party transactions:
Certain Plan investments are shares of mutual funds managed by Merrill
Lynch Trust Company ("Merrill Lynch" or "ML"). Merrill Lynch serves as trustee
for the Plan and, therefore, these transactions qualify as party-in-interest
transactions. The Company bears the responsibility of all administrative
expenses of the Plan.
F-7
Two of the available fund options invest in the common stock of NL and
Tremont Corporation ("Tremont"), both of which entities are considered related
parties. The activity of these securities for the years ended December 31, 2001
and 2000 was as follows:
Sales and Fair value
distributions, Realized at
Purchases at cost gain December 31,
---------- -------------- ---------- ------------
Year ended December 31, 2001:
NL common stock ......... $ 221,197 $ 319,024 $ 144,044 $ 992,297
Tremont common stock .... 403 6,099 14,681 39,495
Year ended December 31, 2000:
NL common stock ......... $ 121,852 $ 744,079 $ 596,711 $2,096,152
Tremont common stock .... 564 1,188 1,470 63,574
Note 4 - Tax status:
The Plan, as amended, is designed to constitute a qualified trust under
Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code"); as such the Plan is exempt from federal income tax, and amounts
contributed by the Company will not be taxed to the participant until the
participant receives a distribution from the Plan.
The Plan has received a favorable determination as of March 1998,
indicating it is a "Qualified Plan" under the requirements of Sections 401(a)
and 401(k) of the Code and is qualified for favorable tax treatment. The Company
has filed an application with the Internal Revenue Service for a determination
of the qualified status of the Plan under Section 401(a) of the code for all
amendments made to the Plan since the last determination letter.
Note 5 - Investments:
The following presents investments that represent 5% or more of the Plan's
net assets.
December 31,
---------------------------
2001 2000
----------- -----------
Merrill Lynch Retirement Preservation Trust .... $10,775,772 $10,768,793
MFS Value Fund ................................. 5,061,238 --
Merrill Lynch Equity Index Trust ............... 2,969,583 --
Oakmark International Fund ..................... 1,578,762 --
Oppenheimer Capital Appreciation Fund .......... 1,250,354 --
Merrill Lynch Basic Value Fund ................. -- 3,164,059
Merrill Lynch Balanced Capital Fund ............ -- 2,679,482
NL Stock Fund .................................. -- 2,096,152
AIM Value Fund ................................. -- 1,967,405
MFS Emerging Growth Fund ....................... -- 1,709,867
F-8
Effective January 1, 2002 certain of the Plan's investment options were no
longer available and were replaced with new investment options. The balance of
the existing funds were transferred into the new funds on December 31, 2001.
During 2001, the Plan's net appreciation (depreciation) in the fair value
of investments (including gains and losses on investments bought and sold, as
well as held during the year) was as follows:
2001
-----------
Mutual funds .......................................... $(1,537,582)
Common stock .......................................... (857,206)
Common collective trusts .............................. (162,240)
-----------
$(2,557,028)
===========
The Plan's assets are invested principally in investment funds managed by
(i) Merrill Lynch, (ii) Massachusetts Financial Services ("MFS"), (iii)
Oppenheimer Funds Distributor, Inc., and (iv) Harris Associates Securities L.P.
At December 31, 2001, 61% of the Plan's investments were managed by Merrill
Lynch. The Plan's assets also include investments in the common stock of NL,
Halliburton Company ("Halliburton") and Tremont.
F-9
SUPPLEMENTAL SCHEDULE
NL INDUSTRIES, INC. RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2001
Employer Identification No. 13-5267260
Plan No. 003
Fair value
-----------
MFS Government Securities Fund - Class A shares ............... $ 604
* Merrill Lynch Equity Index Trust .............................. 2,969,583
* Merrill Lynch U.S. Government Mortgage Fund - Class A shares
(formerly Merrill Lynch Federal Securities Trust) ............. 412,193
* Merrill Lynch Retirement Preservation Trust ................... 10,775,772
Oakmark International Fund - Class II shares .................. 1,578,762
MFS Value Fund - Class A shares ............................... 5,061,238
Oppenheimer Capital Appreciation Fund ......................... 1,250,354
* NL Stock Fund - common stock .................................. 992,297
Halliburton/Tremont Stock Fund - common stock:
Halliburton .................................................. 83,918
*Tremont ...................................................... 39,495
* Loans to participants (7.75% - 10.50%) ........................ 66,580
* Cash, Merrill Lynch Trust Company, FSB ....................... 656
-----------
$23,231,452
===========
* Investment in a "Party-in-interest" entity, as defined by ERISA.
F-10
EXHIBIT I
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the:
(i) Registration Statement No. 33-29287 on Form S-8 and related Prospectus
with respect to the 1989 Long Term Performance Incentive Plan of NL
Industries, Inc.; and
(ii) Registration Statement No. 33-25913 on Form S-8 and related Prospectus
with respect to the NL Industries, Inc. Retirement Savings Plan; and
(iii) Registration Statement No. 33-48145 on Form S-8 and related Prospectus
with respect to the NL Industries, Inc. 1992 Non-Employee Directors
Stock Option Plan; and
(iv) Registration Statement No. 333-65817 on Form S-8 and related Prospectus
with respect to the NL Industries, Inc. 1998 Long-Term Incentive Plan.
of our report dated June 27, 2002 relating to the financial statements of the NL
Industries, Inc. Retirement Savings Plan which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Houston, Texas
June 27, 2002