ITEM 1. BUSINESS.
NATURE OF THE BUSINESS
Mosinee Paper Corporation was incorporated in Wisconsin in 1910. The company and its subsidiaries (collectively, the "company") operate in the pulp and paper industry. The company's Pulp and Paper Division ("Pulp and Paper") produces and sells specialty papers and its Mosinee Converted Products Division ("Converted Products") produces and sells wax laminated and converted papers. Bay West Paper Corporation ("Bay West") produces, converts and sells towel and tissue paper products and The Sorg Paper Company ("Sorg Paper"), produces and sells specialty papers. Additional wholly-owned subsidiaries are: Mosinee Paper International Inc., which administers export sales for the company and acts as a foreign sales corporation (FSC); and Mosinee Holdings, Inc., which operates a power plant in Middletown, Ohio to provide steam and electricity to Sorg Paper and Bay West's towel and tissue paper mill located there.
SEGMENT INFORMATION
The manufacture and sale of paper is the company's only line of business.
PRINCIPAL PRODUCTS AND SERVICES
The principal product groups of the company are specialty papers, laminated and converted papers and towel and tissue products.
SPECIALTY PAPERS
Specialty paper products are produced and sold by Pulp and Paper and Sorg Paper. Principal products of Pulp and Paper include industrial crepe, masking, gumming, converting and wax laminating, foil laminating, flame resistant, interleaver, cable wrap, electrical insulation, pressure sensitive backing, toweling, water base and film coating and packaging papers. Sorg Paper produces decorative laminate, deep-color and facial tissue, filter, construction, parchtex, saturating, soapboard and soapwrap and latex label papers. All products of the company's specialty paper operations are sold to other manufactures or converters for further processing and ultimate sale to end users. These manufacturers and converters are in many industries including housing, steel, aluminum and other metal producers, automotive, consumer packaging, food processing, home appliance, consumer goods and printing.
TOWEL AND TISSUE PRODUCTS
The towel and tissue products produced and sold by Bay West are primarily for the commercial and institutional wash room products markets that include recreation, health care, food service, manufacturing, education, automotive and dairy. The products include roll and folded towels, tissue products, soaps, windshield towels, dairy towels, household roll towels and glass cleaner. Bay
West products are sold through independent distributors to end users both domestically and internationally.
CONVERTED PRODUCTS
Wax-laminated and converted papers produced by Converted Products include roll, ream and skid wrap paper, can body stock, impregnated paper and coated papers. These products are sold to manufacturers and converters in the paper, can and corrugated container industries.
EXPORT SALES
Mosinee Paper International, Inc. acts as a commissioned sales agent for the export sales of the company and has elected to be treated as a foreign sales corporation, or FSC, for federal income tax purposes. During 1994, export sales of the company's products amounted to nearly $26 million.
RAW MATERIALS
For paper making operations, fiber represents approximately half of the cost of paper. The company satisfies its fiber requirements using virgin fiber from pulpwood and chips, purchased bleached pulp and both pre- and post-consumer waste or recyclable papers. The types of paper being made and their intended uses determine the type or quality of the fiber used.
During 1994, Pulp and Paper required 36,000 tons, or 29% of total fiber requirements, of bleached pulp which it purchased on the open market. The balance, representing unbleached pulp, was produced at its kraft pulp mill. Sorg Paper is a non-integrated paper manufacturer and must purchase all required fiber on the open market. During the year it used 37,000 tons of bleached pulp, or 99% of its fiber requirements. Pulp prices have risen dramatically from an average $400/ton at the start of 1994 to slightly over $700/ton in March, 1995. The balance of purchased fiber represented waste papers, generally pre-consumer, available from printers and other paper converters.
Bay West produces all its fiber requirements from its deink and direct entry systems. The fiber source for these systems is low grade recyclable waste papers. During the year demand for most grades of waste papers increased as new deinking facilities were started in the industry. Increased export of waste papers also increased demand. Bay West was able to purchase its requirements although spot shortages did occur. The cost of waste papers used by Bay West rose dramatically in response to the demand pressures in the market. As an example, the price of file stock (which is post-consumer waste paper) rose from a beginning of the year cost of $90/ton to $235/ton at year-end. It continued to rise to $280/ton by March, 1995. News (#8) waste paper is the most plentiful and rose from $38/ton in 1994 to the March, 1995 level of $210/ton. Bay West consumed over 137,000 tons of pre- and post-consumer waste papers during the year.
Wood for Pulp and Paper's pulp mill is produced at its Mosinee Industrial Forest in northwestern Wisconsin and purchased from private landowners, public forests, and from other forest product
manufacturers. During 1994, Pulp and Paper consumed 29,000 cords of pulpwood, or 20% of its total wood requirements, from its own forests. The balance was available on the open market. During 1994 the demand on pulpwood and woodchips increased resulting in both lower availability and higher costs. Costs rose from $63/cord to $67/cord. While some other paper mills experienced shortages of supply, Mosinee's Pulp and Paper Division did not and also was not subject to price volatility that exceed the range mentioned above. The availability of wood has improved in 1995 and prices are expected to remain stable for the year.
Converted Products utilizes linerboard and various waxes to produce its laminated papers. Linerboard, purchased from large paper mills in the United States, was subject to high demand in 1994 that continued on into 1995. As a result, linerboard producers raised prices significantly during the year, resulting in an increase of $81/ton to $423/ton by the end of 1994. Since year-end, additional price increases totaling $100-$110/ton have been implemented or announced. The increased demand also tightened availability reaching a peak in February of 1995, with slight easing since then. Converted Products has been able to procure adequate supplies and temporarily supplemented supplies with inventory reduction which is now in the gradual process of being restored.
All other chemicals, dyes and sundry raw materials have remained readily available with no anticipated shortages seen during 1995. The company has recovered a portion of raw material cost increases through higher selling prices for its own products. See "Competitive Conditions".
ENERGY
The company's paper mills require large amounts of steam and electricity for production. Both Pulp and Paper and the Sorg Paper/Bay West Middletown, Ohio complex have their own steam and electricity generating facilities. Additionally, Pulp and Paper operates a hydro-electric generating facility that produces a portion of its electricity requirements. Both facilities have the capability to purchase electricity from area utilities. The primary fuel used at the Middletown complex is coal while Pulp and Paper utilizes a mixture of coal, bark and sludge and also operates a recovery boiler that recovers inorganic chemicals from its pulping process.
PATENTS AND TRADEMARKS
The company obtains and files trademarks and patents as appropriate for newly developed products. The company does not own or hold material licenses, franchises or concessions.
SEASONAL NATURE OF BUSINESS
None of the products manufactured and sold by the company are seasonal in nature. Bay West unit shipments, however, are moderately higher during the summer and early fall months.
WORKING CAPITAL
As is customary in the paper industry, the company carries adequate amounts of raw materials and finished goods inventory to facilitate the manufacture and rapid delivery of paper products to its customers.
MAJOR CUSTOMERS
No single customer accounted for 10% or more of consolidated net sales during 1994.
BACKLOG
The sales backlog in dollars climbed to over $21 million, up $6 million from the level at 1993 year-end. The backlog was nearly $16 million at specialty paper operations. Backlogs at converting facilities, where customer orders are serviced from inventories, generally represent orders being prepared for shipment. Backlogs at all operations existing at year-end are expected to be shipped during 1995.
COMPETITIVE CONDITIONS
Competition in the paper industry in general has been strong as capacity in excess of demand for many grades of paper has heightened pricing pressure. The tissue portion of the industry saw previous years' capacity additions being absorbed by higher demand resulting from the strong economy that existed through the year and into 1995.
Specialty paper operations at Sorg Paper and Pulp and Paper compete in many different niche markets. The highly technical nature of specialty paper limits competition since not all paper mills can produce the required papers. The competition is generally based more upon quality and service to the customer than price. However, as quality and service are improving at most paper manufacturers and becoming expected attributes of the product, price competition has begun to intensify among competitors in specialty grades. The less technical specialty grades of paper encounter more price competition since more paper mills have the capability to produce them. Additionally, as demand for commodity grade papers declines, producers of these commodity grades temporarily may venture into the less technical specialty grades to maintain production volumes, thereby increasing price competition. Mosinee's specialty paper operations were partially successful in raising selling prices to recover the rapid rise in purchased pulp cost. Additional purchased pulp cost increases during 1995 are expected to be recovered through higher selling prices.
Competition in the commercial and institutional tissue markets, which includes toweling, is among several large paper companies. Bay West, although growing, is one of the smaller competitors in this market. The improved economy and less announced capacity increases provided reductions to the severe price competition among tissue producers during 1994. With most competitors in this market feeling the effect of the high waste paper costs, the recovery of most of such increases has been possible, beginning primarily in the later part of 1994 and continuing into 1995.
Wax-laminated and converted products compete with several similar sized producers. Competition is primarily focused on price. Additionally, wax-laminated roll wrap, for paper products sold in roll form by paper mills, competes with polywrap as an alternative roll wrap material.
RESEARCH AND DEVELOPMENT
The company is involved in research and development activities at all locations. Generally, research at specialty paper operations occurs in both the laboratory and actual paper machines in the form of trial runs. Research at converting facilities is limited to development, often in conjunction with suppliers, on new laminating compounds. Tissue operations perform trial run research in both deinking and paper production to improve product capability and quality. Additionally, research is conducted to improve existing, and develop the next generation of, product dispensers. The amounts spent on research activities are not material in relation to total operating expenses.
ENVIRONMENT
The paper industry is subject to stringent environmental laws and regulations which govern the discharge of materials into the air and ground and surface waters. Environmental regulations have become more restrictive in the past and additional changes can be anticipated in the future. The company is committed to full compliance with all rules designed to protect the environment and compliance with current rules is not expected to have a material adverse effect on the company's earnings or competitive position. There are no proposed regulatory changes of which the company is now aware which are expected to have a material effect on the business or financial condition of the company, but it can be anticipated that future environmental regulations will likely increase the company's capital expenditures and operating costs.
Additional information concerning the company's status as a potentially responsible party ("PRP") and other environmental matters can be found in the first paragraph of Note 12 of the Notes to Consolidated Financial Statements, page 41. As noted therein, the company is of the opinion that any costs associated with its status as a PRP will not have a material adverse effect on the business and financial condition of the company.
EMPLOYEES
The company had 1,295 employees at the end of 1994. Hourly employees at the company's paper making operations are covered under collective bargaining agreements. During 1993 negotiations were conducted which led to a four-year agreement at Sorg Paper signed in 1994. During 1994 the company negotiated with the Union Bargaining Committee at Bay West's Middletown, Ohio mill and signed a five-year labor agreement. The company considers its relationship with its employees to be excellent. Eligible employees participate in retirement plans and group life, disability and medical insurance programs.
EXECUTIVE OFFICERS OF THE COMPANY
The following information relates to Executive Officers of the Company as of March 24, 1995:
SAN W. ORR, JR., 53
Chairman of the Board since 1987 Director since 1972 Also Attorney, Estates of A.P. Woodson & Family and Chairman of the Board and Chief Executive Officer of Wausau Paper Mills Previously, Vice Chairman of the Board (1978-1987)
RICHARD L. RADT, 63
Vice Chairman of the Board since August, 1993 Director since 1988 Previously, President and Chief Executive Officer (1988-1993) and President and Chief Executive Officer of Wausau Paper Mills Company (1977-1987)
DANIEL R. OLVEY, 46
President and Chief Executive Officer since August, 1993, Director since August, 1993 Previously, Executive Vice President and Chief Operating Officer (1992-1993), Group Vice President-Specialty Paper (1991-1992), Vice President-Finance; Secretary and Treasurer (1989-1991); Vice President Finance, Secretary and Treasurer, Wausau Paper Mills Company (1983-1989)
GARY P. PETERSON, 46
Sr. Vice President-Finance, Secretary and Treasurer since August, 1993 Previously, Vice President-Finance (1991-1993); partner, Wipfli Ullrich Bertelson CPAs (1981-1991)
STUART R. CARLSON, 48
Sr. Vice President-Administration since August, 1993 Previously, Vice President-Human Resources (1991-1993); Director of Human Resources, Georgia Pacific, Inc. (1990-1991) and Corporate Director of Industrial Relations, Great Northern Nekoosa Corporation (1989-1990)
ITEM 2.

ITEM 2. PROPERTIES.
The company's corporate headquarters are located in Mosinee, Wisconsin. The building, which is owned by the company, was constructed in 1985, and consists of approximately 38,000 square feet. Executive officers and a corporate staff of approximately 16 persons who perform corporate accounting and financial, human resource and MIS services are located in the corporate headquarters.
The following paragraphs provide information on the location and general character of the company's facilities, including their productive capacity and extent of utilization.
MOSINEE INDUSTRIAL FOREST
LOCATION AND CAPACITY
Solon Springs, WI 1994 production: 31,520 cords 1994 acreage: 87,145 acres
*"Practical capacity" is the amount of product a mill can produce with existing equipment and workforce and usually approximates maximum, or theoretical, capacity. At the company's converting operations it reflects the approximate maximum amount of product that can be made on existing equipment, but would require additional days and/or shifts of operation to achieve.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
The company, along with other paper companies, is part of a civil investigation by the U.S. Department of Justice to determine whether any violation of U.S. antitrust laws has occurred in the commercial and industrial market for sanitary paper products. The company believes it has not violated any antitrust laws.
In the ordinary course of conducting business, the company also becomes involved in environmental issues, investigations, administrative proceedings and litigation. While any proceeding or litigation has an element of uncertainty, the company believes that the outcome of any pending or threatened claim or lawsuit will not have a material adverse effect on the business and financial condition of the company.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders in the fourth quarter.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The company's common stock is traded on the Nasdaq National Market System under the symbol MOSI. The number of shareholders of record as of March 1, 1995 was 1,841. In addition, the company has received identification of 1,356 non-objecting beneficial owners who own stock in "street name" or who are institutional owners. The company also believes that it has approximately 1,322 beneficial owners who either did not reply or who object to being disclosed. The total estimated number of shareholders as of March 24, 1995 is 4,519. Information related to high and low closing prices and dividends is set forth in Note 16 of Notes to Consolidated Financial Statements, page 44. A description of certain dividend restrictions under the company's credit agreement is set forth in Note 7 of the Notes to Consolidated Financial Statements, page 34.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
Sales increased $22 million, or 9%, over the prior year. All business units experienced increased sales revenue and volume of product sold. In the aggregate, tons sold increased to 255,000 tons, over 7%, or 17,000 tons, over the prior year. The majority of gain, in tons sold, was registered at Bay West, accounting for over 80% of the total increase. Foreign sales also experienced an increase to nearly $26 million and now account for nearly 10% of total net sales. Exports of towel and tissue products increased to $13 million and specialty paper product sales, which also registered increases over the prior year, contributed the other $13 million.
During the year, the strong economy increased demand in most areas of the paper industry and absorbed prior years' excess capacity. This helped to restore margins that had eroded over the past several years and to recover raw material price increases which occurred with unprecedented frequency during much of the year. With higher demands for paper, the mix of product sold was improved by replacing papers that provide minimal profit in favor of higher margin products. In summary, strong volume increases added nearly $20 million and a more optimal product mix added $4 million of additional sales. These increases were partially offset by unfavorable pricing effects of over $1.5 million.
During 1993, sales increased $19 million, or 9%, over the prior year. Strong price competition in all areas resulting from reduced demand and capacity additions led to reduced selling prices. Tons shipped increased to 238,000 tons, an improvement of over 10%. Strong volume gains, particularly at Bay West which accounted for 41% of the increased tons shipped, added $33 million in sales. Unfavorable selling prices of over $9 million and less optimal mix of products of $4 million offset some of the benefit of additional volume.
Sales increased in 1992 on sales volume which rose to 216,000 tons, or 18% over the prior year. Bay West accounted for 42% of the change. Pricing for all operations was difficult during 1992 reflecting the general economic slowness that persisted throughout the year. Highly competitive pricing continued during the year in the tissue area of our business as it had during 1991. Capacity increases in excess of existing demand caused serious price discounting among all tissue producers. Strong volume increases
added approximately $36 million in sales and was partially offset by unfavorable pricing effects of over $8 million.
Gross profit of over $49 million rose 13% over the $44 million reported last year. Gross profit margin remained at 18%. Increased raw material costs that could not always be timely recovered by higher selling prices reduced gross profit margins at all locations. Bay West however, reduced costs substantially, more than overcoming the unfavorable effect of lower selling prices. Increased productivity at Bay West's facilities and higher volumes brought cost structures more in line with expectations. In 1994, production of towel and tissue paper at the Bay West mill increased 9%, or 7 thousand tons, helping to absorb fixed production costs. Higher volumes and an improved mix of product sold at all other units contributed to the increase in gross profit. Aggressive cost reduction programs at all operations also aided in offsetting lower selling prices. Increase in the raw material prices for purchased pulp, waste paper and linerboard occurred at an unprecedented rate during the year.
Fiber represents approximately half of the cost of paper. The company satisfies its fiber requirements using virgin fiber from pulpwood and chips, purchased bleached pulp and both pre- and post-consumer waste or recyclable papers. The types of paper being made and their intended uses determine the type and quality of the fiber used. During the year the Pulp and Paper Division purchased 36,000 tons of bleached pulp, or 29% of its fiber needs, which were purchased on the open market. The balance, representing unbleached pulp, was produced at its kraft pulp mill. The pulpwood used to produce pulp consumed 29,000 cords from Mosinee's Industrial Forest, or 20% of wood requirements. The balance was available from the open market. Sorg Paper is a non-integrated paper manufacturer and must purchase all required fiber on the open market. During the year it used 37,000 tons of virgin fiber, or 99% of its total fiber requirements. The balance of purchased fiber represented waste papers, generally pre-consumer wastes from printers or paper converters. Bay West's towel and tissue mill produces all its pulp requirements from its deink or direct entry systems. The fiber requirements for these systems is low grade recyclable waste papers that have been subject to sharp increases in cost resulting from strong demand from new deinking facilities, increased exports and higher industry operating rates. Bay West consumed over 137,000 tons of waste paper during the year.
During 1993, gross profit of nearly $44 million rose 43% over the $30 million reported in the prior year and gross profit margin
improved to 18%. The improvement in gross profit primarily resulted from productivity improvements at the Bay West towel and tissue mill during the year. Gross profit also increased at all other operating units during the year. Strong volume increases combined with aggressive cost reduction programs offset lower selling prices at all units. Raw material prices remained stable until near the end of the year when price increases were announced.
During 1992, gross profit of $30 million declined slightly from the $31 million reported in the prior year and gross profit margin declined to 14% from the 1991 level of 16%. Gross profit margins declined at all operating units. The unfavorable gross profit and gross profit margin comparisons primarily resulted from weak selling prices. The Bay West towel and tissue mill experienced excessive operating costs during its first full year of operation. Higher deink pulp cost from low yields and high raw material cost also unfavorably effected gross profit.
Gross profit at specialty paper operations remained nearly constant as additional sales volume, a better product mix, higher efficiencies and cost reduction programs offset temporary pulp price increases and lower selling prices.
Operating expenses declined nearly $2 million, or 8%, from the prior year level of $25 million. As a percent of net sales, operating expenses declined to 9% reflecting the higher dollar amount of sales and lower costs.
Selling and advertising expenses increased $0.6 million from the prior year. Increased selling incentive compensation and higher advertising and promotional expenses, primarily at Bay West offset reductions in other costs. General inflation increased salaries and wages and contributed to the increase in selling expenses.
Administrative expenses declined $2.5 million, or 16%, from the year earlier level. Included in administrative expenses are charges or credits for the company's Stock Appreciation Rights Plans (SAR) further described in Note 11 to the financial statements. During 1994, the market price of the company's stock declined, resulting in a credit of $1 million compared to a charge of $1.7 million in 1993, due to increased market price. Adjusting total administrative expenses for these affects, result in $14.3 million in 1994 compared to $14.3 million reported in the prior year, or no increase. Salaried employment reductions offset general inflationary increases. Higher profitability increased the company's contribution to its 401-k plans, a part of the retirement benefit package offered to employees. Cost reduction program savings offset other inflation oriented increases in normal administrative expenses.
During 1993, The costs associated with some promotion programs were classified as reductions of selling prices and accounted for the majority of the change in the selling and advertising expenses in comparison to 1992. This reduction was partially offset by nominal inflation cost increases, primarily in salaries and related benefits at all operating units.
The nearly $3 million increase in 1993 for administrative expenses was generally attributable to the SAR plan. The SAR programs resulted in a charge of $1.7 million due to a 22% increase in the stock price in 1993 compared to a $1 million credit to expense in 1992 when the company's stock price had fallen at year-end. Cost reduction programs helped to offset modest inflationary increases in salary and benefit expenses incurred at all operating units.
Selling and advertising expenses of $10 million in 1992 reflected the major promotion and advertising programs at Bay West and Sorg. Administrative expenses of $13 million reflected a $1 million credit from SAR programs which partially offset inflationary increases in most other costs.
Record income from operations climbed to nearly $26 million, 41% ahead of last year's $18 million. As a percent of net sales, income from operations improved to nearly 10%, the highest level reached since 1983. Strong sales volumes and some needed relief in pricing, necessitated by increased raw material costs, combined with aggressive cost reduction programs in all facets of the business led to the record level.
During 1993, selling prices for paper, particularly in the tissue market, remained below the prior year which had also been adversely affected by depressed prices. Lower operating costs and higher sales volumes at all facilities, especially the Bay West towel and tissue mill during the year, more than offset the lower selling prices and resulted in the strong improvement.
During 1992, high operating costs at the Bay West towel and tissue mill along with the depressed tissue selling prices offset
progress at other facilities and accounted for the modest improvement over 1991.
Interest income was received on various state and federal income tax refunds from prior periods and a minimal amount from overnight investments of excess cash. Interest expense on commercial paper and other long-term debt totaled $5 million in 1994 compared to $5.7 million incurred in 1993 before immaterial amounts of capitalized interest were deducted in each year. During 1992, interest expense reached $7.7 million on short-term debt, commercial paper and long-term bank notes.
The average debt level for 1994 of $95 million compared favorably to $99 million during the prior year. This reduction, combined with the expiration of the interest rate protection agreement, accounts for the decrease in interest expense.
In early 1993, the U.S. Court of Appeals for the Federal Circuit upheld the District Court judgement awarded the company. The District Court found that James River Corporation had infringed upon certain washroom towel cabinet roll transfer mechanisms patented by Bay West Paper Corporation, a subsidiary of the company. The company received $5.5 million, including interest, which is included in income before taxes.
The $7.7 million in interest expense recorded in 1992 resulted from the high debt level following completion of the expansion program and higher interest rates in effect.
The income tax provision varies with reported income and federal, state and local tax rates. The 1994 provision for income taxes increased due to continued improvement in earnings. The tax
provision of $8.5 million in 1994 results in an effective tax rate of 39.5%.
The 1993 provision for income taxes reflected increased earnings and increased federal tax rates. The tax provision of nearly $8 million in 1993 results in an effective tax rate of 44.6%. This rate reflects the enactment of Revenue Reconciliation Act of 1993, which increased the marginal corporate tax rate, requiring a charge to earnings of nearly $1 million to recognize the adjustment of current and deferred taxes.
During 1992, the effective tax rate of 37.3% closely reflected the statutory rates in effect for the year. Also, in 1992, the adoption of the Statement of Financial Accounting Standards No. 109 (SFAS No. 109), Accounting for Income Taxes, allowed the recognition of deferred tax assets, subject to a valuation allowance, for the tax benefit of state income tax loss carryforwards. The ability to recognize a portion of this asset minimizes the impact of the company not being able to offset consolidated income with subsidiary losses, compared to the 1991 effective tax rate.
Reflecting the above, record net income of $12.3 million, or $1.71 per share, rose $2.7 million over the prior year level of $9.6 million, or $1.34 per share.
Statement of Financial Accounting Standards (SFAS) No. 112, Employers' Accounting for Postemployment Benefits, requires that employers accrue a liability for compensation for future absences of former or inactive employees and their beneficiaries and covered dependents. SFAS No. 112 was adopted January 1, 1994, the required adoption date, by recognizing a cumulative effect expense of $750,000, net of income taxes of $400,000. The company does not anticipate routine accrual expenses, but, will record expenses in accordance with SFAS No. 112 when events occur that require such accrual.
Net income for 1993 of $9.6 million, or $1.34 per share, increased over the prior year's loss of $8.5 million, or $1.21 per share. Strong sales volumes and lowered operating costs at all operations, especially Bay West, combined to offset lower selling prices and produce stronger earnings.
Net income for 1992 was adversely affected by the adoption of Statement of Financial Accounting Standards No. 106, Employers' Accounting for Postretirement Benefits Other than Pensions. This
adoption required the company to charge income with the cost of such benefits earned through December 31, 1991 by current employees and retirees. The charge to record the entire liability at January 1, 1992 was $13.3 million which generated a deferred tax benefit of $4.8 million resulting in a net cumulative effect of $8.5 million, or $1.20 per share.
Net cash provided by operating activities decreased slightly to nearly $26 million, just below last year's record level. Improved sales of $22 million combined with improved productivity and cost reduction efforts led to an improved gross profit of $6 million providing additional cash from operations. Adjusting net income for non-cash items, cash available in 1994 reached $33 million compared to $30 million last year. The $3 million increase was accounted for by $3.6 million in higher accounts receivable relative to the increase experienced during 1993. Strong control over inventory growth resulted in $1.7 million less of an increase compared to the prior year when higher inventory was needed to facilitate the increased volume of business. During 1993 the company received additional cash of $2 million from income tax refunds whereas in 1994 no material amounts were received. The net effect of these items lowered cash from operations by $1 million when compared to last year's record level.
Gross trade receivables of the company increased over $5 million, or 24% over the prior year. Accounts receivable allowances increased by $0.6 million in 1994 principally to provide for potential losses on Mexican accounts resulting from devaluation of the Mexican peso.
The company invested $19 million, below the planned level, in plant and equipment additions in 1994. The major projects included the spending of $5.2 million on Pulp and Paper's recovery boiler rebuild and upgrade, and $2.3 million on their automated roll wrap system. Bay West's mill in Ohio installed new flotation cells during the year spending $2.3 million. The balance of capital spending was limited to replacement of equipment required in normal operations. The strong cash flow and control of capital projects allowed for sufficient cash to reduce the outstanding debt by nearly $5 million and return $2.6 million in cash dividends to shareholders. The effect of all operating, investing
and financing activities for 1994 was to maintain cash and cash equivalents of $1.5 million at the end of the year.
Working capital increased 24% to $26 million from the $21 million reported last year, mainly due to an increase of $5 million in receivables due to increased sales volume which was partially offset by increases in accounts payable and other liabilities. The current ratio, current assets divided by current liabilities, increased to 1.7:1 from the 1.6:1 reported last year.
While the company's financing arrangements do not require scheduled repayments of its long-term debt, the company repaid $5 million of the long-term debt outstanding during the year. The reduction in long-term debt to $91 million, however, did not meet the planned debt level. Higher raw material costs not recovered in increased selling prices held cash generation below planned levels. The ratio of long-term debt to total capitalization of 51% improved from the prior year reflecting an increase in stockholders' equity due to stronger earnings and a lower level of debt.
Early in the year, the company refinanced a portion of its existing debt by entering into a $20 million unsecured five-year loan with a fixed rate of 7.83%. Its unsecured credit facility of $110 million was reduced to $90 million near the end of the year. The company currently utilizes $50 million of this credit agreement to support its participation in the commercial paper markets. At year-end, approximately $46 million of commercial paper was outstanding and classified as long-term debt.
Management believes that with prior years' major expansions running close to designed levels, proper staffing now in place and a continued strong economy that allows for selling price improvements, cash flow from operations will adequately allow for partial repayments of existing debt and allow for planned capital expenditures for property and equipment of $18 million next year.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Management's Responsibility For Financial Reporting. . . . . . 21
Report of Independent Accountants. . . . . . . . . . . . . . . 22
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . 23
Consolidated Statements of Stockholders' Equity. . . . . . . . 24
Consolidated Statements of Income. . . . . . . . . . . . . . . 25
Consolidated Statements of Cash Flows. . . . . . . . . . . . . 26
Notes to Consolidated Financial Statements . . . . . . . . . . 27
Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The management of Mosinee Paper Corporation is responsible for the integrity and objectivity of the consolidated financial statements. Such financial statements were prepared in conformity with generally accepted accounting principles. Some of the amounts included in these financial statements are estimates based upon management's best judgement of current conditions and circumstances. Management is also responsible for preparing other financial information included in this annual report.
The company's management depends on the company's system of internal accounting controls to assure itself of the reliability of the financial statements. The internal control system is designed to provide reasonable assurance, at appropriate cost, that assets are safeguarded and transactions are executed in accordance with management's authorizations and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Periodic reviews of internal controls are made by management and the internal audit function and corrective action is taken if needed.
The Audit Committee of the Board of Directors, consisting of outside directors, provides oversight of financial reporting. The company's internal audit function and independent public accountants meet with the Audit Committee to discuss financial reporting and internal control issues and have full and free access to the Audit Committee.
The consolidated financial statements have been audited by the company's independent auditors and their report is presented below. The independent auditors are approved each year at the annual shareholders' meeting based on a recommendation by the Audit Committee and the Board of Directors.
DANIEL R. OLVEY GARY P. PETERSON President and Sr. Vice President - Finance Chief Executive Officer and Secretary and Treasurer
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors Mosinee Paper Corporation Mosinee, Wisconsin
We have audited the accompanying consolidated balance sheets of MOSINEE PAPER CORPORATION and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of stockholders' equity, income and cash flows for each of the years in the three- year period ended December 31, 1994 and the supporting schedule appearing on page 45. These financial statements and supporting schedules are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements and supporting schedules 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 and supporting schedules are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and supporting schedules. 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, the consolidated financial statements referred to above appearing on pages 23-44 present fairly, in all material respects, the financial position of MOSINEE PAPER CORPORATION and subsidiaries at December 31, 1994 and 1993, and the results of their operations and cash flows for each of the years in the three-year period ended December 31, 1994, and the supporting schedule appearing on page 45 present fairly the information required to be set forth therein, all in conformity with generally accepted accounting principles.
As discussed in Note 3 to the consolidated financial statements, the company changed its method of accounting for postemployment benefits in 1994 and its methods of accounting for postretirement benefits other than pensions and income taxes in 1992.
We hereby consent to the incorporation by reference of this report in the Registration Statement on Form S-8 filed with the Securities and Exchange Commission by Mosinee Paper Corporation on April 19, 1991.
WIPFLI ULLRICH BERTELSON February 2, 1995 Wipfli Ullrich Bertelson Wausau, Wisconsin Certified Public Accountants
MOSINEE PAPER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation - The consolidated financial statements include the accounts of Mosinee Paper Corporation and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
Cash Equivalents - The company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.
Inventories - Substantially all inventories are stated at the lower of cost, determined on the last-in, first-out method (LIFO), or market. Inventories not on the LIFO method, primarily supply items, are stated at cost (principally average cost) or market, whichever is lower. Allocation of the LIFO reserve among the components of inventories is impractical.
Property, Plant and Equipment - Depreciable property is stated at cost less accumulated depreciation. Land, water power rights, and construction in progress are stated at cost and timberlands are stated at net depleted value. Facilities financed by leases, which are essentially equivalent to installment purchases, are recorded as assets and the related obligation as a long-term liability.
When property units are retired, or otherwise disposed of, the applicable cost and accumulated depreciation thereon are removed from the accounts. The resulting gain or loss, if any, is reflected in income.
Depreciation is computed on the straight-line method for financial statement purposes over 20 to 45 years for buildings and 3 to 20 years for machinery and equipment. Depletion on timberlands is computed on the unit-of-production method. Depreciation expense includes amortization on capitalized leases. Maintenance and repair costs are charged to expense when incurred. Improvements which extend the useful lives of the assets are added to the plant and equipment accounts.
Revenue Recognition - Revenue is recognized upon shipment of goods and transfer of title to the customer. Concentrations of credit risk with respect to trade accounts receivable are generally diversified due to the large number of entities comprising the company's customer base and their dispersion across many different industries and geographies.
Taxes - Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, as measured by the enacted tax rates which will be in effect when these differences are expected to reverse. Deferred tax expense is the result of changes in the deferred tax asset and liability. The principal sources giving rise to such differences are identified in Note 10. See Note 3 for change in accounting policy for 1992.
Per Share Data - Income per share is computed by dividing net income less Sorg Paper preferred stock dividends by the weighted average number of shares of common stock outstanding.
2 - SEGMENT INFORMATION
The company operates predominantly in the paper and allied products industry. The company formed Mosinee Paper International, Inc., a wholly-owned subsidiary located and domiciled in the U.S. Virgin Islands, to administer the export sales made by the company.
3 - CHANGES IN ACCOUNTING POLICIES
On January 1, 1994, the company adopted Statement of Financial Accounting Standards (SFAS) No. 112 "Employers' Accounting for Postemployment Benefits" which requires the company to accrue for the estimated cost of benefits provided by an employer to former or inactive employees after employment but before retirement. Previously, the cost of these benefits were expensed as they were incurred. The cumulative effect of $750,000 is shown net of income taxes of $400,000 and represents the entire liability for such benefits earned through 1993. The impact of this accounting change on 1994 operating results is not material.
During 1992, the company adopted the provisions of SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other than Pensions" and SFAS No. 109 "Accounting for Income Taxes."
In December 1992, the company adopted SFAS No. 106 which requires the estimated cost of retiree benefit payments, primarily health and life insurance, to be accrued during the employees' active service period. Previously, the cost of these benefits was expensed as incurred. The company elected to immediately recognize the accumulated liability as of January 1, 1992, which resulted in a one-time non-cash charge against earnings of $13,287,000 before taxes and $8,537,000 after taxes, or $1.20 per share. The effect of this change on 1992 operating results was to recognize an additional pre-tax expense of $967,000 and after-tax expense of $585,000, or $.07 per share. Previously reported quarterly earnings for 1992, as presented in Note 15, have been restated for the effect of this change as if it had been adopted on January 1, 1992. Additional information on retirement benefits can be found in Note 6.
The company also adopted SFAS No. 109 during the first quarter of 1992. The cumulative effect of the accounting change at the time of adoption and the current year effect on net income was immaterial as the company had previously been on the liability method of accounting for deferred taxes.
4 - SUPPLEMENTAL BALANCE SHEET INFORMATION
5 - LEASES
The company has various operating leases for machinery and equipment, automobiles, office equipment and warehouse space.
Rent expense for all operating leases of plant and equipment was $2,834,000 in 1994, $3,081,000 in 1993 and $2,698,000 in 1992.
6 - RETIREMENT PLANS
PENSIONS
Substantially all employees of the company are covered under various pension plans. The defined benefit pension plan benefits are based on the participants' years of service and either compensation earned over certain final years of employment or fixed benefit amounts for each year of service. The plans are funded in accordance with federal laws and regulations.
The projected benefit obligations at September 30, were determined using an assumed discount rate of 8% and 7.25% for 1994 and 1993, respectively, and assumed compensation increases of 5% in 1994 and 1993. The assumed long-term rate of return on plan assets was 9%. Plan assets consist principally of fixed income and equity securities and includes Mosinee Paper Corporation common stock of $2,511,000 and $1,905,000 in 1994 and 1993 respectively.
The company's defined contribution pension plans, covering various salaried employees, provide for company contributions based on various formulas. The cost of such plans totaled $2,100,000 in 1994, $1,823,000 in 1993, and $1,324,000 in 1992.
The company has deferred compensation or supplemental retirement agreements with certain present and past key officers, directors and employees. The principal cost of such plans is being or has been accrued over the period of active employment to the full eligibility date. Certain payments, insignificant in amount, are charged to expense when paid. Costs charged to operations under such agreements approximated $161,000, $89,000, and $78,000 for 1994, 1993, and 1992, respectively.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
In addition to providing pension benefits, the company provides certain health care and nominal term life insurance benefits for retired employees. Substantially all of the company's employees may become eligible for those benefits if they reach normal retirement age while working for the company.
Cost-sharing provisions, benefits and eligibility for various employee groups vary by location and union agreements. Generally, eligibility is attained after reaching age 55 or 62 with minimum service requirements. Upon reaching age 65, the benefits become coordinated with Medicare. The plans are unfunded and the company funds the benefit costs on a current basis.
The 1994 assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 11%, declining by 1% annually for six years to an ultimate rate of 5%. The weighted average discount rate used was 8%. For 1993, the obligation was calculated using a health care cost trend rate of 12%, declining by 1% annually for 6 years to an ultimate rate of 6%. The weighted average discount rate was 7.25%.
The effect of a 1% increase in the health care cost trend rate would increase the APBO by $1,610,000 or 11.1% and $1,714,000 or 10.4%, at December 31, 1994 and 1993, respectively. The effect of this change would increase the aggregate of the service cost and interest cost by $262,000 or 16.5% in 1994, and $243,000 or 15.7% in 1993.
7 - LONG-TERM DEBT
The company has a commercial paper placement agreement to issue up to $50 million of unsecured debt obligations. The weighted average
interest rate on commercial paper outstanding at December 31, 1994 was 6.3% compared to 3.6% at December 31, 1993. The amounts have been classified as long-term as the company intends, and has the ability to refinance the obligations under the revolving credit agreement.
A credit agreement with one bank as agent and certain financial institutions as lenders was established April 16, 1993 to issue up to $130 million of unsecured borrowings less the amount of commercial paper outstanding. This agreement was amended December 28, 1994 to reduce the issue amount to $90 million. The term of this agreement is five years requiring no payments until March 31, 1998, at which time, all outstanding amounts become due. The company may, however, reduce the commitment amount prior to that date without penalty. The weighted average interest rate at December 31, 1994 was 6.3% and at December 31, 1993 was 3.7%. The agreement provides for various restrictive covenants, which includes maintaining minimum net worth, interest coverage and debt to equity ratios and limits dividend and other restricted payments to approximately $16 million.
The credit agreement provides for commitment and facility fees during the revolving loan period. Commitment fees are 0.1875% per annum of the unused portions of the commitment, payable quarterly. Facility fees are 0.125% per annum of the total commitment, payable quarterly.
The company entered into an unsecured five-year fixed rate debt arrangement for $20 million on September 30, 1994 with one financial institution to secure an interest rate of 7.83%. Interest is paid monthly but the principal is not due until September 1999. The arrangement provides for various restrictive covenants, which includes maintaining a minimum net worth, interest coverage and debt to capital ratios.
The difference between the book value and the fair market value of long-term debt is not material.
The company maintained an interest rate protection agreement which expired November 6, 1993 for the revolving credit agreement. This agreement provided for interest rate protection on $60 million the first year, $85 million the second year and $50 million in the third year. Under terms of the agreement, the company received compensation when the 90 day LIBOR (London Interbank Offered Rate) exceeds 9.5% in the first year, 10.5% in the second year and 11% in the third year. The company paid compensation when LIBOR was less than 7.5% in the first year, 7% the second year and 6.5% the third year. Amounts paid or received were recognized as interest rates deviated beyond the stated amounts and were included in interest expense.
The annual maturities on the revolving credit agreement included in the above schedule are based on the amount outstanding at December 31, 1994. Annual maturities will be affected by future borrowings under the agreement.
9 - PREFERRED SHARE PURCHASE RIGHTS PLAN
Under the Rights Agreement dated June 26, 1986, amended February 21, 1991, each share of the company's common stock entitles its holder to one nonvoting preferred share purchase right ("Right"). Rights become exercisable 10 days after a person or group acquires 20% or more of the company's outstanding common stock (an "Acquiring Person"). The Board may reduce this threshold amount to 10%. The Right will entitle the holder to purchase from the company .01 share of Series A Junior Participating Preferred Stock at a price of $60. If the company is acquired in a merger or other business combination, the holder may exercise the Right and receive common stock of the acquiring company having a market value equal to two times the exercise price of the Right. If a person becomes an "Acquiring Person" the holder may exercise the Right and receive common stock of the company having a market value equal to two times the exercise price of the Right. Rights are subject to redemption by the company for $.05 per Right until a person or group becomes an Acquiring Person. After a person or group becomes an Acquiring Person, but before the Acquiring Person acquires 50% of the company's common stock, the company may exchange one share of common stock for each Right. Rights expire on July 10, 1996. The company has reserved 100,000 shares of Series A Junior Participating Preferred Stock.
10 - INCOME TAXES
At the end of 1994, $41,500,000 of unused state operating loss carryovers existed which may be used to offset future state taxable income in various amounts through the year 2009. Because separate state tax returns are filed, the company is not able to offset consolidated income with the subsidiaries' losses. Under the provisions of SFAS No. 109, the benefits of state tax losses are recognized as a deferred tax asset, subject to appropriate valuation allowances. At December 31, 1994, the company has unused alternative minimum tax credit carryforward of approximately $7,853,000 which can be used to offset future regular tax liabilities.
A valuation allowance has been recognized for a subsidiary's state tax loss carryforward as cumulative losses create uncertainty about the realization of the tax benefits in future years.
11 - STOCK OPTIONS AND APPRECIATION RIGHTS
The company has adopted two Executive Stock Option Plans. The 1994 plan, which needs shareholder approval at the April 1995 annual meeting, provides for the granting of either qualified incentive stock options (ISO) or non-qualified options. Under the 1994 plan, options to purchase 100,000 shares of common stock may be issued to key employees of the company. Options must be granted at an option price which is not less than fair market value at the time of the grant. Qualified options can be exercised no sooner than six months or no later than ten years from the date of the grant (twenty years from date of grant for non-qualified options). The 1985 plan is a non-qualified stock option plan under which options to purchase 135,000 common shares have been issued to key executive employees of the company or subsidiaries. The plan provides for the granting of options at a price which is not less than market value at the time of the grant. Options can be exercised no sooner than six months or no later than twenty years from the date of the grant. No accounting recognition is given until the stock options are exercised.
Two stock appreciation rights plans are maintained by the company. The 1988 Stock Appreciation Rights Plan gives certain officers and key employees the right to receive cash equal to the sum of the appreciation in value of the stock and the value of reinvested hypothetical cash dividends which would have been paid on the stock covered by the grant. The 1988 Management Incentive Plan gives certain management employees the right to receive similar cash payments. The stock appreciation rights granted under the plans may be exercised in whole or in installments and will vest at such times as specified in the grant. In all instances, the rights lapse if not exercised within 20 years of the grant date. Compensation expense is recorded with respect to the rights, based upon quoted market value of the shares and the exercise provisions. The provision (credit) for incentive compensation plans based upon the company's stock price, principally stock appreciation rights, was ($933,000) in 1994, $1,668,000 in 1993, and ($1,155,000) in 1992.
12 - CONTINGENCIES, LITIGATION, COMMITMENTS, AND RELATED TRANSACTIONS
The company has been informed by the Wisconsin Department of Natural Resources ("DNR") that a landfill, for which the company may be a potentially responsible party, was nominated by the DNR for inclusion by the Environmental Protection Agency ("EPA") on the National Priorities List ("NPL"). The EPA has not placed the landfill on the NPL nor has any other action been taken by the DNR or the EPA. The company has contributed its allocated portion of the cost of remediation of a second landfill pursuant to a cost sharing agreement. The company cannot predict what, if any, additional costs will be borne by the company. Based on the information available, the company does not believe that any additional cost associated with these landfills will have a material adverse effect on the business and financial condition of the company.
The company, along with other paper companies, is part of a civil investigation by the U. S. Department of Justice to determine whether any violation of U. S. antitrust laws has occurred in the commercial and industrial market for sanitary paper products. The company believes it has not violated any antitrust laws.
In the ordinary course of conducting business, the company also becomes involved in other environmental issues, investigations, administrative proceedings and litigation. While any proceeding or litigation has an element of uncertainty, the company believes that the outcome of any pending or threatened claim or lawsuit will not have a material adverse effect on the business and financial condition of the company.
Through the year 2006, the company is to pay a municipality a minimum annual usage fee of approximately $150,000 paid on a quarterly basis, to discharge industrial waste into the municipality's wastewater treatment facility. The aggregate amount of such required future minimum payments at December 31, 1994 was $1,687,000. In addition, the company is to pay monthly contingent usage fees to the municipality based on the amount of industrial waste discharged. Minimum and contingent usage fees incurred totaled $630,000, $611,000 and $531,000 in 1994, 1993, and 1992 respectively.
During 1992, the company sold 79,100 shares of its treasury stock for $2,195,000 to various pension plans it maintains. The sale price per share was determined using the trading price at the time of the sale as reflected on Nasdaq.
13 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
In 1992, the company exchanged two airplanes with a total book value of $5,028,000 for an airplane with an estimated value of $5,200,000. The new equipment is recorded at $5,028,000, which represents the book value of the items traded.
14 - PATENT INFRINGEMENT AWARD
On February 8, 1993, the U.S. Court of Appeals for the Federal Circuit upheld the District Court judgement awarded Mosinee Paper
against James River Corporation. The District Court found that James River had infringed upon certain washroom towel cabinet roll transfer mechanisms patented by the Bay West Paper Corporation, a subsidiary. Mosinee Paper's judgement of approximately $5.5 million, including interest, is included in the 1993 statement of income.
16 - MARKET PRICES FOR COMMON SHARES (UNAUDITED)
Prices reflect high and low closing price quotations on the Nasdaq National Market System and do not reflect mark-ups, mark-downs or commissions and may not represent actual transactions.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information relating to directors of the company is incorporated into this Form 10-K by this reference to the material set forth under the caption "Election of Directors", pages 3 and 4, in the company's proxy statement dated March 17, 1995 (the "1995 Proxy Statement"). Information relating to executive officers of the company is set forth in Part I, page 6.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
Information relating to director compensation is incorporated into this Form 10-K by this reference to the material set forth under the subcaption "Director Compensation", pages 4 and 5, in the 1995 Proxy Statement. Information relating to the compensation of executive officers is incorporated into this Form 10-K by this reference to (1) the material set forth under the caption "Executive Officer Compensation", pages 8 through 10 and (2) the material set forth under the subcaption "Compensation Committee Interlocks and Insider Participation", page 15, in the 1995 Proxy Statement.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information relating to security ownership of certain beneficial owners is incorporated into this Form 10-K by this reference to the material set forth under the caption "Beneficial Ownership of Common Stock", page 6, through the material immediately preceding final two paragraphs, page 7, in the 1995 Proxy Statement.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES. Filed as part of this report and required by Item 14(d), are set forth on pages 22 to 49 herein.
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed by the company during the fourth quarter of fiscal 1994.
(c) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K.
The following exhibits are filed with the Securities and Exchange Commission as part of this report.
EXHIBIT 3 - ARTICLES OF INCORPORATION AND BYLAWS
(a) Restated Articles of Incorporation, as amended. . . . . . . . . . 12-53(1)
(b) Restated Bylaws, as last amended April 16, 1992 . . . . . . . . . . . 54-89(1)
EXHIBIT 4 - INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
(a) Preferred Share Rights Agreement dated June 26, 1986 as amended . . . . . . . 54-147(4)
(b) Restated Articles of Incorporation and Restated Bylaws (see Exhibit 3(a) and (b))
EXHIBIT 10 - MATERIAL CONTRACTS
*(a) Deferred Compensation Plan for Directors as amended and restated June 17, 1993. . . . 148-164(4)
*(b) 1985 Executive Stock Option Plan dated June 27, 1985 . . . . . . . . . . 83-95(5)
*(c) Mosinee Paper Corporation 1988 Stock Appreciation Rights Plan, as amended 4/18/91. . . . . . . . . . . . . . . . . . . 41-50(2)
*(d) 1993 and 1994 Incentive Compensation Plan for Corporate Executive Officers. . . . 165-169(4)
*(e) Supplemental Retirement Benefit Plan dated October 17, 1991. . . . . . . . . 63-71(2)
*(f) Supplemental Retirement Benefit Agreement dated November 15, 1991. . . . . . . . . . . 72-76(2)
*(g) 1994 Executive Stock Option Plan . . . . . . 50
*(h) Mosinee Supplemental Retirement Plan . . . . 68
* Denotes Executive Compensation Plans and Arrangements.
EXHIBIT 11 - COMPUTATION OF PER SHARE EARNINGS. . 84
EXHIBIT 22 - SUBSIDIARIES OF REGISTRANT . . . . . 167(1)
Page numbers set forth herein correspond to the page numbers using the sequential numbering system, where such exhibit can be found in the following Annual Reports on Form 10-K:
(1) Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992; Commission File Number 0-1732.
(2) Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1991; Commission File Number 0-1732.
(3) Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1990; Commission File Number 0-1732.
(4) Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993; Commission File Number 0-1732.
(5) Exhibit 4(e) Form S-8 filed on April 19, 1991.
The above exhibits are available upon request in writing from the Secretary, Mosinee Paper Corporation, 1244 Kronenwetter Drive, Mosinee, Wisconsin 54455-9099.
SIGNATURES
Pursuant to the requirements of Section 13 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.
MOSINEE PAPER CORPORATION
Date March 27, 1995 GARY P. PETERSON ------------------------------------ Gary P. Peterson Senior Vice-President, Finance, Secretary and Treasurer (Principal Financial Officer)
Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SAN W. ORR, JR. RICHARD L. RADT ------------------------------ ------------------------------- San W. Orr, Jr. Richard L. Radt Chairman of the Board Vice Chairman of the Board March 27, 1995 March 27, 1995
DANIEL R. OLVEY STANLEY F. STAPLES, JR. ------------------------------ ------------------------------- Daniel R. Olvey Stanley F. Staples, Jr. President and CEO Director (Principal Executive Officer) March 27, 1995 March 27, 1995
RICHARD G. JACOBUS WALTER ALEXANDER ------------------------------ ------------------------------- Richard G. Jacobus Walter Alexander Director Director March 27, 1995 March 27, 1995
DONALD E. JANIS ------------------------------ Donald E. Janis Corporate Controller March 27, 1995 (Principal Accounting Officer)