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, 1996
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 Stock 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|
As of March 20, 1997, 51,144,014 shares of common stock were outstanding. The
aggregate market value of the 13,662,324 shares of voting stock held by
nonaffiliates as of such date approximated $149 million.
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, 1996 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, 1996 (filed
as an amendment to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996).
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 20, 1997 By: /s/ Dennis G. Newkirk
---------------------
Dennis G. Newkirk
Vice President
and Controller
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, 1996
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 Schedules
with Report of Independent Accountants F-1 to F-16
Exhibit 1 - 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/ Edward J. Zadzora
Edward J. Zadzora
Chairman
June 20, 1997
- 2 -
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS, FUND INFORMATION AND SUPPLEMENTAL SCHEDULES
WITH REPORT OF INDEPENDENT ACCOUNTANTS
December 31, 1996
NL INDUSTRIES INC.
RETIREMENT SAVINGS PLAN
INDEX
Page
Report of Independent Accountants F-2
Financial Statements:
Statements of Net Assets Available for Benefits, with
Fund Information - December 31, 1995 and 1996 F-3 to F-5
Statements of Changes in Net Assets Available for
Benefits, with Fund Information - Years ended
December 31, 1995 and 1996 F-6 to F-8
Notes to Financial Statements F-9 to F-14
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
- December 31, 1996 F-15
Item 27d - Schedule of Reportable Transactions
- Year ended December 31, 1996 F-16
All other schedules are omitted because they are not applicable or not required.
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Employee Benefits Committee of
NL Industries, Inc.:
We have audited the accompanying statements of net assets available for
benefits of the NL Industries, Inc. Retirement Savings Plan as of December 31,
1995 and 1996, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of NL's Pension and Employee Benefits Committee. 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 NL's
Pension and Employee Benefits Committee, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the NL
Industries, Inc. Retirement Savings Plan as of December 31, 1995 and 1996, and
the changes in net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules, as
listed on the accompanying index, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
COOPERS & LYBRAND L.L.P.
Houston, Texas
June 12, 1997
F-2
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
December 31, 1995
Fund Information
---------------------------------------------------------------------
ML Federal ML Capital ML Basic ML Retirement ML Global
Securities Fund, Value Preservation Holdings,
Trust Inc. Fund Trust Inc.
---------- ---------- --------- ------------- ---------
Investments at fair value:
Common stock ........... $ -- $ -- $ -- $ -- $ --
Other securities ....... 635,644 4,182,517 2,290,572 24,364,863 726,896
Employer contributions
receivable .............. 22,516 143,211 148,455 289,062 59,397
Cash ..................... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net assets available for
plan benefits ......... $ 658,160 $ 4,325,728 $ 2,439,027 $24,653,925 $ 786,293
=========== =========== =========== =========== ===========
Fund Information
------------------------------------
Common Stock Funds
-------------------------
Dresser/ Cash
NL Tremont Fund Total
----------- ----------- --------- -----------
Investments at fair value:
Common stock ........... $ 2,966,120 $ 392,019 $ -- $ 3,358,139
Other securities ....... -- -- -- 32,200,492
Employer contributions
receivable .............. 96,019 -- -- 758,660
Cash ..................... -- -- 4,029 4,029
----------- ----------- ----------- -----------
Net assets available for
plan benefits ......... $ 3,062,139 $ 392,019 $ 4,029 $36,321,320
=========== =========== =========== ===========
F-3
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION (CONTINUED)
December 31, 1996
Fund Information
--------------------------------------------------
AIM
MFS Emerging Templeton International AIM Value
Growth Fund World Fund Equity Fund Fund
----------- ---------- ------------- ---------
Investments at fair value:
Common stock .................. $ -- $ -- $ -- $ --
Other securities .............. 1,053,576 476,472 405,674 725,427
Employer contributions receivable 51,737 34,693 23,202 33,185
Cash ............................ -- -- -- --
---------- ---------- ---------- ----------
Net assets available for plan
benefits ..................... $1,105,313 $ 511,165 $ 428,876 $ 758,612
========== ========== ========== ==========
Fund Information
-----------------------------------------
ML Global
MFS Government ML Equity Allocation
Securities Fund Index Trust Fund, Inc.
--------------- ----------- -----------
Investments at fair value:
Common stock .................. $ -- $ -- $ --
Other securities .............. 215,693 346,379 477,894
Employer contributions receivable 11,014 21,451 25,031
Cash ............................ -- -- --
---------- ---------- ----------
Net assets available for plan
benefits ...................... $ 226,707 $ 367,830 $ 502,925
========== ========== ==========
F-4
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION (CONTINUED)
December 31, 1996 (Continued)
Fund Information (Continued)
---------------------------------------------------------------------
ML Federal ML Capital ML Basic ML Retirement ML Global
Securities Fund, Value Preservation Holdings,
Trust Inc. Fund Trust Inc.
---------- ----------- ----------- ------------- -----------
Investments at fair value:
Common stock ........... $ -- $ -- $ -- $ -- $ --
Other securities ....... 645,236 4,531,774 3,057,100 22,758,005 601,585
Employer contributions
receivable .............. 15,144 110,550 107,977 235,826 --
Cash ..................... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net assets available for
plan benefits ......... $ 660,380 $ 4,642,324 $ 3,165,077 $22,993,831 $ 601,585
=========== =========== =========== =========== ===========
Fund Information (Continued)
------------------------------------
Common Stock Funds
-------------------------
Dresser/ Cash
NL Tremont Fund Total
----------- ----------- --------- -----------
Investments at fair value:
Common stock ........... $ 2,388,253 $ 491,385 $ -- $ 2,879,638
Other securities ....... -- -- -- 35,294,815
Employer contributions
receivable .............. 46,967 -- -- 716,777
Cash ..................... -- -- 5,608 5,608
----------- ----------- ----------- -----------
Net assets available for
plan benefits ......... $ 2,435,220 $ 491,385 $ 5,608 $38,896,838
=========== =========== =========== ===========
See accompanying notes to financial statements.
F-5
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
Year ended December 31, 1995
Fund Information
---------------------------------------------------------------------------
ML Federal ML Capital ML Basic ML Retirement ML Global
Securities Fund, Value Preservation Holdings,
Trust Inc. Fund Trust Inc.
---------- ------------ ------------ ------------- ------------
Investment income:
Dividend income:
Dresser Corporation ............... $ -- $ -- $ -- $ -- $ --
Other ............................. 30,096 428,859 101,067 -- 38,299
Interest income ..................... -- -- -- 1,518,710 --
------------ ------------ ------------ ------------ ------------
Total investment income ............. 30,096 428,859 101,067 1,518,710 38,299
------------ ------------ ------------ ------------ ------------
Net appreciation (depreciation) in
the fair value of investments ........ 30,007 591,021 420,509 -- 58,011
------------ ------------ ------------ ------------ ------------
Contributions:
Participants ........................ 51,497 238,841 192,109 544,341 91,965
Employer ............................ 22,516 143,211 148,455 289,062 59,397
------------ ------------ ------------ ------------ ------------
Total contributions ................. 74,013 382,052 340,564 833,403 151,362
------------ ------------ ------------ ------------ ------------
Total income and
contributions ...................... 134,116 1,401,932 862,140 2,352,113 247,672
------------ ------------ ------------ ------------ ------------
Net interfund transfers ............... 198,320 27,097 139,605 (893,413) 27,659
------------ ------------ ------------ ------------ ------------
Distributions:
Benefit payments .................... 12,096 281,081 69,324 2,615,395 67,623
Less forfeitures .................... (182) (494) (815) (2,135) (631)
------------ ------------ ------------ ------------ ------------
Total distributions ................. 11,914 280,587 68,509 2,613,260 66,992
------------ ------------ ------------ ------------ ------------
Net change in net assets
available for plan benefits .......... 320,522 1,148,442 933,236 (1,154,560) 208,339
Net assets available for plan benefits:
Beginning of year ................... 337,638 3,177,286 1,505,791 25,808,485 577,954
------------ ------------ ------------ ------------ ------------
End of year ......................... $ 658,160 $ 4,325,728 $ 2,439,027 $ 24,653,925 $ 786,293
============ ============ ============ ============ ============
Fund Information
--------------------------------------------
Common Stock Funds
----------------------------
Dresser/ Cash
NL Tremont Fund Total
----------- ------------ ------------ ------------
Investment income:
Dividend income:
Dresser Corporation ............... $ -- $ 9,868 $ -- $ 9,868
Other ............................. -- -- -- 598,321
Interest income ..................... -- -- 1,705 1,520,415
------------ ------------ ------------ ------------
Total investment income ............. -- 9,868 1,705 2,128,604
------------ ------------ ------------ ------------
Net appreciation (depreciation) in
the fair value of investments ........ (167,245) 90,951 -- 1,023,254
------------ ------------ ------------ ------------
Contributions:
Participants ........................ 160,265 -- -- 1,279,018
Employer ............................ 96,019 -- -- 758,660
------------ ------------ ------------ ------------
Total contributions ................. 256,284 -- -- 2,037,678
------------ ------------ ------------ ------------
Total income and
contributions ...................... 89,039 100,819 1,705 5,189,536
------------ ------------ ------------ ------------
Net interfund transfers ............... 512,367 (11,635) -- --
------------ ------------ ------------ ------------
Distributions:
Benefit payments .................... 107,149 23,074 -- 3,175,742
Less forfeitures .................... (229) -- -- (4,486)
------------ ------------ ------------ ------------
Total distributions ................. 106,920 23,074 -- 3,171,256
------------ ------------ ------------ ------------
Net change in net assets
available for plan benefits .......... 494,486 66,110 1,705 2,018,280
Net assets available for plan benefits:
Beginning of year ................... 2,567,653 325,909 2,324 34,303,040
------------ ------------ ------------ ------------
End of year ......................... $ 3,062,139 $ 392,019 $ 4,029 $ 36,321,320
============ ============ ============ ============
F-6
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION (CONTINUED)
Year ended December 31, 1996
Fund Information
-------------------------------------------------------
AIM
MFS Emerging Templeton International AIM Value
Growth Fund World Fund Equity Fund Fund
------------ ---------- ------------- -----------
Investment income:
Dividend income:
NL Industries, Inc. ............... $ -- $ -- $ -- $ --
Dresser Corporation ............... -- -- -- --
Other ............................. 12,370 31,535 10,357 34,248
Interest income ..................... -- -- -- --
----------- ----------- ----------- -----------
Total investment income ............. 12,370 31,535 10,357 34,248
----------- ----------- ----------- -----------
Net appreciation (depreciation) in the
fair value of investments ............ (20,966) 10,822 20,990 38,049
----------- ----------- ----------- -----------
Contributions:
Participants ........................ 66,794 41,172 36,106 50,186
Employer ............................ 51,737 34,693 23,202 33,185
----------- ----------- ----------- -----------
Total contributions ................. 118,531 75,865 59,308 83,371
----------- ----------- ----------- -----------
Total income and contributions ...... 109,935 118,222 90,655 155,668
----------- ----------- ----------- -----------
Net interfund transfers ............... 1,001,104 393,871 338,741 606,950
----------- ----------- ----------- -----------
Distributions:
Benefit payments .................... 5,726 928 520 4,006
Less forfeitures .................... -- -- -- --
----------- ----------- ----------- -----------
Total distributions ................. 5,726 928 520 4,006
----------- ----------- ----------- -----------
Net change in net assets available for
plan benefits ........................ 1,105,313 511,165 428,876 758,612
Net assets available for plan benefits:
Beginning of year ................... -- -- -- --
----------- ----------- ----------- -----------
End of year ......................... $ 1,105,313 $ 511,165 $ 428,876 $ 758,612
=========== =========== =========== ===========
Fund Information
-----------------------------------------
ML Global
MFS Government ML Equity Allocation
Securities Fund Index Trust Fund, Inc.
--------------- ----------- ------------
Investment income:
Dividend income:
NL Industries, Inc. ............... $ -- $ -- $ --
Dresser Corporation ............... -- -- --
Other ............................. 7,284 -- 39,571
Interest income ..................... -- -- --
----------- ----------- -----------
Total investment income ............. 7,284 -- 39,571
----------- ----------- -----------
Net appreciation (depreciation) in the
fair value of investments ............ 4,759 37,376 (3,987)
----------- ----------- -----------
Contributions:
Participants ........................ 22,970 30,581 30,082
Employer ............................ 11,014 21,451 25,031
----------- ----------- -----------
Total contributions ................. 33,984 52,032 55,113
----------- ----------- -----------
Total income and contributions ...... 46,027 89,408 90,697
----------- ----------- -----------
Net interfund transfers ............... 181,284 282,463 413,140
----------- ----------- -----------
Distributions:
Benefit payments .................... 604 4,041 912
Less forfeitures .................... -- -- --
----------- ----------- -----------
Total distributions ................. 604 4,041 912
----------- ----------- -----------
Net change in net assets available for
plan benefits ........................ 226,707 367,830 502,925
Net assets available for plan benefits:
Beginning of year ................... -- -- --
----------- ----------- -----------
End of year ......................... $ 226,707 $ 367,830 $ 502,925
=========== =========== ===========
F-7
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION (CONTINUED)
Year ended December 31, 1996 (Continued)
Fund Information (Continued)
---------------------------------------------------------------------------
ML Federal ML Capital ML Basic ML Retirement ML Global
Securities Fund, Value Preservation Holdings,
Trust Inc. Fund Trust Inc.
---------- ------------ ------------ ------------- ------------
Investment income:
Dividend income:
NL Industries, Inc. ............... $ -- $ -- $ -- $ -- $ --
Dresser Corporation ............... -- -- -- -- --
Other ............................. 43,822 433,519 207,450 -- 36,615
Interest income ..................... -- -- -- 1,416,181 --
------------ ------------ ------------ ------------ ------------
Total investment income ............. 43,822 433,519 207,450 1,416,181 36,615
------------ ------------ ------------ ------------ ------------
Net appreciation (depreciation) in
the fair value of investments ........ (13,887) 75,626 235,047 -- 51,115
------------ ------------ ------------ ------------ ------------
Contributions:
Participants ........................ 44,756 265,066 267,891 423,904 44,852
Employer ............................ 15,144 110,550 107,977 235,826 --
------------ ------------ ------------ ------------ ------------
Total contributions ................. 59,900 375,616 375,868 659,730 44,852
------------ ------------ ------------ ------------ ------------
Total income and
contributions ...................... 89,835 884,761 818,365 2,075,911 132,582
------------ ------------ ------------ ------------ ------------
Net interfund transfers ............... (52,291) (280,470) (46,618) (1,865,472) (310,057)
------------ ------------ ------------ ------------ ------------
Distributions:
Benefit payments .................... 35,324 287,695 45,697 1,874,490 7,233
Less forfeitures .................... -- -- -- (3,957) --
------------ ------------ ------------ ------------ ------------
Total distributions ................. 35,324 287,695 45,697 1,870,533 7,233
------------ ------------ ------------ ------------ ------------
Net change in net assets
available for plan benefits .......... 2,220 316,596 726,050 (1,660,094) (184,708)
Net assets available for plan benefits:
Beginning of year ................... 658,160 4,325,728 2,439,027 24,653,925 786,293
------------ ------------ ------------ ------------ ------------
End of year ......................... $ 660,380 $ 4,642,324 $ 3,165,077 $ 22,993,831 $ 601,585
============ ============ ============ ============ ============
Fund Information (Continued)
--------------------------------------------
Common Stock Funds
----------------------------
Dresser/ Cash
NL Tremont Fund Total
----------- ------------ ------------ ------------
Investment income:
Dividend income:
NL Industries, Inc. ............... $ 68,389 $ -- $ -- $ 68,389
Dresser Corporation ............... -- 8,595 -- 8,595
Other ............................. -- -- -- 856,771
Interest income ..................... -- -- 1,579 1,417,760
------------ ------------ ------------ ------------
Total investment income ............. 68,389 8,595 1,579 2,351,515
------------ ------------ ------------ ------------
Net appreciation (depreciation) in
the fair value of investments ........ (180,690) 142,421 -- 396,675
------------ ------------ ------------ ------------
Contributions:
Participants ........................ 138,757 -- -- 1,463,117
Employer ............................ 46,967 -- -- 716,777
------------ ------------ ------------ ------------
Total contributions ................. 185,724 -- -- 2,179,894
------------ ------------ ------------ ------------
Total income and
contributions ...................... 73,423 151,016 1,579 4,928,084
------------ ------------ ------------ ------------
Net interfund transfers ............... (621,540) (41,105) -- --
------------ ------------ ------------ ------------
Distributions:
Benefit payments .................... 78,802 10,545 -- 2,356,523
Less forfeitures .................... -- -- -- (3,957)
------------ ------------ ------------ ------------
Total distributions ................. 78,802 10,545 -- 2,352,566
------------ ------------ ------------ ------------
Net change in net assets
available for plan benefits .......... (626,919) 99,366 1,579 2,575,518
Net assets available for plan benefits:
Beginning of year ................... 3,062,139 392,019 4,029 36,321,320
------------ ------------ ------------ ------------
End of year ......................... $ 2,435,220 $ 491,385 $ 5,608 $ 38,896,838
============ ============ ============ ============
See accompanying notes to financial statements.
F-8
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 formerly the "Savings Plan for Employees of NL Industries, Inc.") (the
"Plan") have been prepared in accordance with generally accepted accounting
principles. 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 plan benefits
the net appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments.
Contributions
Contributions from employees are recorded in the period the employer makes
payroll deductions from Plan participants. Employer contributions are accrued at
the end of each year and are received in the subsequent year.
Investment income
Income from investments is recorded as earned on an accrual basis.
Dividend income is recorded at the ex-dividend date.
Termination of Plan
Although it has not expressed any intent to do so, NL Industries, Inc. 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-9
Note 2 - Plan description:
The Plan's principal objective is to provide eligible employees of NL
Industries, Inc. and its 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, 1996 there were 222 active participants and 656
total participants. Participants currently employed by the Company ("Active
Participants") may make basic contributions of between 1% 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.
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 ($9,500 annual maximum for
1996). 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.
The Company contributes a discretionary amount of matching contributions,
determined annually, 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 employer match applies only to the
employee's basic contributions.
On March 31, 1996, the defined benefit plan for salaried employees of NL
Industries, Inc. was amended and the pension benefits frozen for the majority of
the Company's U.S. employees. Effective April 1, 1996, every employee who is
eligible to participate in the Plan will receive an annual contribution into
their investment account of 3% of their eligible compensation, subject to IRS
limitations on eligible compensation, which currently is $150,000. The Company
will make this contribution for each eligible employee regardless of whether the
employee elects to otherwise participate in the Plan. This contribution is in
addition to the Company's discretionary matching contribution described above.
Employer contributions are fully vested upon death, retirement, or
disability, as provided 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. 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.
F-10
Merrill Lynch Trust Company ("Merrill Lynch" or "ML") serves as trustee
for the Plan.
Employees may elect to have their own contributions invested in one or
more funds, whose investment objectives are as follows:
Number of
participants at
December 31,
----------------
1995 1996
---- ----
Merrill Lynch Retirement Preservation Trust - managed 381 368
with the objective of providing preservation of capital,
liquidity and current income through investments
primarily in Guaranteed Investment Contracts.
Merrill Lynch Basic Value Fund, Inc. - Class A Shares - 141 163
managed with the objective of seeking capital
appreciation and, secondarily, income.
Merrill Lynch Federal Securities Trust - Class D Shares - 85 82
managed with the objective of seeking a high current
return through investments in U.S. government and
government agency securities.
Merrill Lynch Capital Fund, Inc. - Class A Shares - 189 184
managed with the objective of seeking the highest total
investment return consistent with prudent risk, investing
in equity, debt and convertible securities.
Merrill Lynch Global Holdings, Inc. - Class A Shares - 77 59
managed with the objective of seeking the highest total
investment return consistent with prudent risk through
world-wide investment in an internationally diversified
portfolio of securities.
NL Stock Fund - invested in NL common stock. 530 500
Effective April 1, 1996, seven additional mutual fund investments became
available to participants.
MFS Emerging Growth Fund - Class A Shares - managed with - 104
the objective of providing long-term growth of capital by
investing primarily in common stocks of small and medium-
sized companies that are early in their life cycle but
which have the potential to become major enterprises.
Templeton World Fund - Class I Shares - managed with the - 78
objective of seeking long-term capital growth by
investing in securities of companies or governments
located throughout the world. The fund's portfolio is
invested in securities of both U.S. and foreign issuers.
F-11
Number of
participants at
December 31,
-----------------
1995 1996
---- ----
AIM International Equity Fund - Class A Shares - managed - 70
with the objective of seeking long-term return of capital
by investing in a diversified portfolio of international
equity securities.
AIM Value Fund - Class A Shares - managed with the - 90
objective of achieving long-term growth of capital by
investing primarily in equity securities judged to be
undervalued relative to appraisals of the current or
projected earnings of the companies issuing the
securities, or relative to current market values of
assets owned by the companies issuing the securities or
relative to the equity market generally. Income is a
secondary objective.
MFS Government Securities Fund - Class A Shares - managed - 49
with the objective of providing current income and
preservation of principal by investing in Government
Securities and by investing in obligations that are fully
collateralized or otherwise fully secured by Government
Securities.
Merrill Lynch Equity Index Trust - managed with the - 67
objective of approximating the total return of the
Standard & Poor's 500 Composite Stock Index. This index
is a means to measure the performance of a broad base of
large U.S. corporations.
Merrill Lynch Global Allocation Fund, Inc. - Class A - 75
Shares - managed with the objective of seeking a high
total investment return, consistent with the
prudent risk, through a fully-managed investment
policy utilizing United States and foreign equity, debt
and money market securities the combination of which
will be varied from time to time both with respect
to types of securities and markets in response
to changing market and economic trends.
In addition to the funds listed above, the Dresser/Tremont Stock Fund
holds investments in Dresser Industries for 50 participants and Tremont
Corporation common stock for 43 participants. Contributions or transfers into
the Dresser/Tremont Stock Fund are no longer allowed. On March 31, 1996,
investments in the Merrill Lynch Global Holdings fund were frozen and only
transfers out of this fund are permitted. Prior to March 31, 1996, employee
contributions to the fund were permitted; however, no employer matching
contributions were made in 1996 to this fund.
F-12
Prior to the investment in securities of a type consistent with the
objectives of any fund, cash may 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.
Interfund transfers may be made daily, except that only one transfer per
participant per quarter may affect amounts in the NL Stock Fund. Only one
transfer is permitted out of the Dresser/Tremont Stock Fund which must be a
transfer of the total value of the participant's account in that fund.
Distributions to employees may occur during active service or upon
termination and under prescribed circumstances, may be in the form of lump sums,
installments, annuities or combinations thereof or employer securities.
The Company bears the responsibility of all administrative expenses of the
Plan.
Note 3 - Investments:
The historical cost and fair value of each of the investments at December
31, 1995 and 1996 were as follows:
1995 1996
------------------------- -------------------------
Historical Historical
Fund description cost Fair value cost Fair value
- ---------------- ----------- ----------- ----------- -----------
Merrill Lynch Retirement Preservation
Trust .................................. $24,364,863 $24,364,863 $22,758,005 $22,758,005
Merrill Lynch Basic Value Fund, Inc. -
Class A Shares ......................... 1,886,249 2,290,572 2,564,065 3,057,100
Merrill Lynch Federal Securities Trust -
Class D Shares ......................... 626,884 635,644 648,231 645,236
Merrill Lynch Capital Fund, Inc. -
Class A Shares ......................... 3,671,102 4,182,517 4,043,712 4,531,774
Merrill Lynch Global Holdings, Inc. -
Class A Shares ......................... 685,081 726,896 550,799 601,585
MFS Emerging Growth Fund - Class A Shares -- -- 1,059,235 1,053,576
Templeton World Fund - Class I Shares ... -- -- 465,233 476,472
AIM International Equity Fund - Class A
Shares ................................. -- -- 386,506 405,674
AIM Value Fund - Class A Shares ......... -- -- 686,839 725,427
MFS Government Securities Fund - Class A
Shares ................................. -- -- 210,926 215,693
Merrill Lynch Equity Index Trust ........ -- -- 309,021 346,379
Merrill Lynch Global Allocation Fund,
Inc. - Class A Shares .................. -- -- 481,896 477,894
NL Stock Fund ........................... 2,986,130 2,966,120 2,790,711 2,388,253
Dresser/Tremont Stock Fund:
Dresser Common Stock .................. 145,727 339,796 138,847 392,719
Tremont Common Stock .................. 25,816 52,223 22,601 98,666
----------- ----------- ----------- -----------
$34,391,852 $35,558,631 $37,116,627 $38,174,453
=========== =========== =========== ===========
F-13
At June 12, 1997, the market value of the shares of NL, Dresser and
Tremont stock held at December 31, 1996 was $3,047,076, $443,393 and $118,807
respectively.
Concentration of credit risk
During 1995 and the first quarter of 1996, the Plan's assets were invested
principally with investment funds managed by Merrill Lynch and common stock of
NL, Dresser and Tremont. Beginning April 1, 1996 seven new funds were added
including two that are managed by Merrill Lynch. Each of the other five funds
are managed by either i) Massachusetts Financial Services ("MFS"), ii) AIM
Advisors, Inc., or iii) Templeton Global Advisors Limited. At December 31, 1996,
85% of the Plan's investments were managed by Merrill Lynch.
Note 4 - Related party transactions:
The NL Stock Fund and the Dresser/Tremont Stock Fund invest in the common
stock of NL and Tremont. The activity of these securities for the years ended
December 31, 1995 and 1996 was as follows:
Sales and
distributions, Realized
Purchases at cost gain
--------- -------------- --------
Year ended December 31, 1995:
NL common stock .................... $958,290 $251,364 $ 57,786
Tremont common stock ............... -- 2,829 1,519
Year ended December 31, 1996:
NL common stock .................... $554,224 $749,643 $201,758
Tremont common stock ............... -- 3,215 8,893
Note 5 - Tax status:
The Plan, as amended in 1994, 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 September 1995,
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
intends to file 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.
F-14
SUPPLEMENTAL SCHEDULES
NL INDUSTRIES, INC. RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
Employer Identification No. 13-5267260
Plan No. 003
Cost Fair value
----------- -----------
Merrill Lynch Retirement Preservation Trust $22,758,005 $22,758,005
Merrill Lynch Basic Value Fund, Inc. -
Class A shares 2,564,065 3,057,100
Merrill Lynch Federal Securities Trust - Class
D Shares 648,231 645,236
Merrill Lynch Capital Fund, Inc. -
Class A shares 4,043,712 4,531,774
Merrill Lynch Global Holdings, Inc. -
Class A shares 550,799 601,585
MFS Emerging Growth Fund - Class A Shares 1,059,235 1,053,576
Templeton World Fund - Class I Shares 465,233 476,472
AIM International Equity Fund - Class A Shares 386,506 405,674
AIM Value Fund - Class A Shares 686,839 725,427
MFS Government Securities Fund - Class A Shares 210,926 215,693
Merrill Lynch Equity Index Trust 309,021 346,379
Merrill Lynch Global Allocation Fund, Inc.-
Class A Shares 481,896 477,894
* NL Stock Fund - Common Stock 2,790,711 2,388,253
Dresser/Tremont Stock Fund - Common Stock:
Dresser Industries 138,847 392,719
* Tremont Corporation 22,601 98,666
----------- -----------
$37,116,627 $38,174,453
=========== ===========
Note: Cost is determined based on historical cost. Gains and losses on sales of
investments are calculated based on average cost.
* Investment in a "Party-in-interest" entity, as defined by ERISA.
F-15
NL INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1996
Employer Identification No. 13-5267260
Plan No. 003
Fair value
of asset on
Number of Purchase Selling Cost of transaction Net gain
Description of Asset Transactions price price asset date (loss)
- -------------------- ------------ ---------- ---------- ------- ----------- --------
Merrill Lynch Retirement
Preservation Trust:
Purchases ................ 136 $3,209,340 $ -- $3,209,340 $3,209,340 $ --
Sales .................... 131 -- 4,816,180 4,816,180 4,816,180 --
Merrill Lynch Capital Fund
Inc. - Class A Shares
Purchases ................ 80 1,234,657 -- 1,234,657 1,234,657 --
Sales .................... 79 -- 961,025 862,047 961,025 98,978
Merrill Lynch Basic Value
Fund, Inc. - Class A Shares
Purchases ................ 85 1,387,579 -- 1,387,579 1,387,579 --
Sales .................... 50 -- 853,095 706,759 853,095 146,336
F-16
EXHIBIT I
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the:
(i) Registration Statement No. 2-98713 on Form S-8 and related Prospectus
with respect to the 1985 Long Term Performance Incentive Plan of NL
Industries, Inc.;
(ii) Registration Statement No. 33-25913 on Form S-8 and related Prospectus
with respect to the Savings Plan for Employees of NL Industries, Inc.;
(iii) Registration Statement No. 33-29287 on Form S-8 and related Prospectus,
as amended, with respect to the 1989 Long Term Performance Incentive
Plan of NL Industries, Inc.; and
(iv) Registration Statement No. 33-48145 on Form S-8 and related Prospectus
with respect to the 1992 Non-Employee Director Stock Option Plan of NL
Industries, Inc.
of our report which is dated June 12, 1997, on our audits of the statements of
net assets available for benefits of the NL Industries, Inc. Retirement Savings
Plan as of December 31, 1995 and 1996 and the related statements of changes in
net assets available for benefits for the years then ended, which report is
included in this Annual Report on Form 11-K.
Coopers & Lybrand L.L.P.
Houston, Texas
June 20, 1997
