<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended: December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______ to _______
Commission file number: 001-12925
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
GENERAL INSTRUMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-4134221
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Tournament Drive, Horsham, Pennsylvania 19044
(Address of principal executive offices)
(Zip Code)
(215) 323-1000
(Registrant's telephone number, including area code)
<PAGE> 2
General Instrument
Corporation Savings Plan
Financial Statements as of December 31, 1997 and
for the Period July 31, 1997 (inception of plan)
through December 31, 1997,
Supplemental Schedules as of December 31, 1997
and for the Period July 31, 1997 through December 31, 1997, and
Independent Auditors' Report
<PAGE> 3
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits as of
December 31, 1997, with Supplemental Fund Information 2
Statement of Changes in Net Assets Available for Benefits
for the Period July 31, 1997 (inception of Plan) through
December 31, 1997, with Supplemental Fund Information 3
Notes to Financial Statements 4-9
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1997 10
Item 27(d) - Schedule of Reportable Transactions for the Period
July 31, 1997 (inception of Plan) through December 31, 1997 11
Note: Supplemental Schedules are included for filing with the Annual Return on
Form 5500. Supplemental Schedules not included herein are omitted due to the
absence of conditions under which they would be required.
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
Administrative Committee
General Instrument Corporation Savings Plan
We have audited the accompanying statement of net assets available for benefits
of General Instrument Corporation Savings Plan (the "Plan") as of December 31,
1997, and the related statement of changes in net assets available for benefits
for the period July 31, 1997 (inception of Plan) through December 31, 1997.
These financial statements are the responsibility of the Plan's Administrative
Committee. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997, and the changes in net assets available for benefits for the period July
31, 1997 (inception of Plan) through December 31, 1997, in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents 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 supplemental information by fund as of December 31, 1997, and for the
period July 31, 1997 through December 31, 1997, is presented for the purpose of
additional analysis of the basic financial statements rather than to present
information regarding the net assets available for benefits and changes in net
assets available for benefits of the individual funds. The supplemental
schedules and fund information are the responsibility of the Plan's
Administrative Committee. Such supplemental schedules and supplemental
information by fund have been subjected to the auditing procedures applied in
our audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
_________________________
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 12, 1998
<PAGE> 5
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL FUND
INFORMATION AS OF DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GENERAL
INSTRUMENT GENERAL
CORPORATION SEMICONDUCTOR,
(THE FORMER INC.
NEXTLEVEL (THE DISTRIBUTING COMMSCOPE VANGUARD VANGUARD
SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ INDEX
COMMON COMMON COMMON SAVINGS WELLINGTON TRUST - 500
STOCK FUND STOCK FUND STOCK FUND TRUST FUND PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Company common stock $14,748,982 $ -- $ -- $ -- $ -- $ --
Other Common Stock -- 1,294,591 2,130,598 -- -- --
Common/collective trust -- -- -- 3,459,683 -- --
Shares of registered -- -- --
investment company -- -- -- -- 12,044,163 17,869,948
Participant loans -- -- -- -- -- --
Loans receivable 8,468 -- -- 4,775 8,077 9,478
Contributions receivable:
Employee 78,090 -- -- 32,492 113,969 192,841
Employer 263,429 -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $15,098,969 $ 1,294,591 $ 2,130,598 $ 3,496,950 $12,166,209 $18,072,267
=========== =========== =========== =========== =========== ===========
<CAPTION>
VANGUARD VANGUARD VANGUARD VANGUARD
MONEY FIXED INCOME VANGUARD U.S. INTERNATIONAL
MARKET SECURITIES STAR GROWTH GROWTH LOAN
RESERVES FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Company common stock $ -- $ -- $ -- $ -- $ -- $ -- $14,748,982
Other Common Stock -- -- -- -- -- -- 3,425,189
Common/collective trust -- -- -- -- -- -- 3,459,683
Shares of registered
investment company 4,983,817 3,242,331 3,286,202 6,115,692 3,279,886 -- 50,822,039
Participant loans -- -- -- -- -- 1,860,152 1,860,152
Loans receivable 4,106 1,746 1,949 3,900 3,143 -- 45,642
Contributions receivable:
Employee 33,721 30,460 53,864 113,307 60,119 -- 708,863
Employer -- -- -- -- -- -- 263,429
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 5,021,644 $ 3,274,537 $ 3,342,015 $ 6,232,899 $ 3,343,148 $ 1,860,152 $75,333,979
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-2-
<PAGE> 6
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL
FUND INFORMATION FOR THE PERIOD JULY 31, 1997 (INCEPTION OF PLAN) THROUGH
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GENERAL
INSTRUMENT GENERAL
CORPORATION SEMICONDUCTOR
(THE FORMER INC.
NEXTLEVEL (THE DISTRIBUTING COMMSCOPE VANGUARD VANGUARD
SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ INDEX
COMMON COMMON COMMON SAVINGS WELLINGTON TRUST - 500
STOCK FUND STOCK FUND STOCK FUND TRUST FUND PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 567,822 $ -- $ -- $ 252,178 $ 869,188 $ 1,458,893
Employer 1,768,818 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net contributions 2,336,640 -- -- 252,178 869,188 1,458,893
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends -- -- -- 85,379 872,267 260,840
Net gain (loss) on investments (1,012,797) (588,398) (586,433) -- (527,828) 145,418
------------ ------------ ------------ ------------ ------------ ------------
(1,012,797) (588,398) (586,433) 85,379 344,439 406,258
------------ ------------ ------------ ------------ ------------ ------------
Total additions 1,323,843 (588,398) (586,433) 337,557 1,213,627 1,865,151
------------ ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS 517,966 36,497 52,195 71,017 423,199 739,378
ADMINISTRATIVE EXPENSES 6,986 896 1,339 1,373 4,330 6,494
------------ ------------ ------------ ------------ ------------ ------------
Total deductions 524,952 37,393 53,534 72,390 427,529 745,872
------------ ------------ ------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS 808,694 (659,847) (838,890) (37,261) 122,947 663,647
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 1,607,585 (1,285,638) (1,478,857) 227,906 909,045 1,782,926
TRANSFER OF ASSETS FROM
GENERAL SEMICONDUCTOR, INC.
SAVINGS PLAN 13,491,384 2,580,229 3,609,455 3,269,044 11,257,164 16,289,341
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF PERIOD $ 15,098,969 $ 1,294,591 $ 2,130,598 $ 3,496,950 $ 12,166,209 $ 18,072,267
============ ============ ============ ============ ============ ============
<CAPTION>
VANGUARD VANGUARD VANGUARD VANGUARD
MONEY FIXED INCOME VANGUARD U.S. INTERNATIONAL
MARKET SECURITIES STAR GROWTH GROWTH LOAN
RESERVES FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND
<S> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 463,865 $ 255,490 $ 465,179 $ 893,779 $ 468,363 $ --
Employer -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net contributions 463,865 255,490 465,179 893,779 468,363 --
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends 107,990 89,491 269,250 240,631 141,297 68,859
Net gain (loss) on investments -- 18,502 (170,896) (207,985) (630,286) --
------------ ------------ ------------ ------------ ------------ ------------
107,990 107,993 98,354 32,646 (488,989) 68,859
------------ ------------ ------------ ------------ ------------ ------------
Total additions 571,855 363,483 563,533 926,425 (20,626) 68,859
------------ ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS 117,999 111,034 56,171 205,098 104,066 82,412
ADMINISTRATIVE EXPENSES 1,852 1,177 1,661 3,272 1,633 --
------------ ------------ ------------ ------------ ------------ ------------
Total deductions 119,851 112,211 57,832 208,370 105,699 82,412
------------ ------------ ------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS (173,390) 39,056 121,632 61,384 (22,386) (85,586)
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 278,614 290,328 627,333 779,439 (148,711) (99,139)
TRANSFER OF ASSETS FROM
GENERAL SEMICONDUCTOR, INC.
SAVINGS PLAN 4,743,030 2,984,209 2,714,682 5,453,460 3,491,859 1,959,291
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF PERIOD $ 5,021,644 $ 3,274,537 $ 3,342,015 $ 6,232,899 $ 3,343,148 $ 1,860,152
============ ============ ============ ============ ============ ============
<CAPTION>
TOTAL
<S> <C>
CONTRIBUTIONS:
Employees $ 5,694,757
Employer 1,768,818
------------
Net contributions 7,463,575
------------
INVESTMENT INCOME:
Interest and dividends 2,136,004
Net gain (loss) on investments (3,560,703)
------------
(1,424,699)
------------
Total additions 6,038,876
------------
DISTRIBUTIONS 2,517,032
ADMINISTRATIVE EXPENSES 31,013
------------
Total deductions 2,548,045
------------
TRANSFER FROM (TO) OTHER
FUNDS --
------------
NET INCREASE (DECREASE) 3,490,831
TRANSFER OF ASSETS FROM
GENERAL SEMICONDUCTOR, INC.
SAVINGS PLAN 71,843,148
------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF PERIOD $ 75,333,979
============
</TABLE>
See notes to financial statements.
-3-
<PAGE> 7
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the General Instrument Corporation Savings Plan
(the "Plan") provides only general information. Participants should refer to
the Plan document for a more complete description of the Plan's provisions.
The Plan Sponsor is General Instrument Corporation (the former NextLevel
Systems, Inc.) (the "Company").
a. GENERAL - The Company was formerly the Communications Business of the
former General Instrument Corporation (the "Distributing Company"). In a
transaction that was consummated on July 28, 1997, the Distributing
Company (i) transferred all the assets and liabilities relating to the
manufacture and sale of broadband communications products used in the
cable television, satellite and telecommunications industries to the
Company (then a wholly-owned subsidiary of the Distributing Company) and
all the assets and liabilities relating to the manufacture and sale of
the coaxial, fiber optic and other electrical cable used in the cable
television, satellite and other industries to its wholly-owned
subsidiary, CommScope, Inc. ("CommScope") and (ii) distributed all of
its outstanding shares of capital stock of each of the Company and
CommScope to its stockholders on a pro rata basis as a dividend.
Approximately 147.3 million shares of the Company's Common Stock, based
on a ratio of one for one, were distributed to the Distributing
Company's stockholders of record on July 25, 1997 (the "Communications
Distribution"). On July 28, 1997, approximately 49.1 million shares of
CommScope Common Stock, based on a ratio of one for three, were
distributed to the Company's stockholders of record on that date (the
"CommScope Distribution" and, together with the Communications
Distribution, the "Distributions"). On July 28, 1997, the Company and
CommScope began operating as independent entities with publicly traded
common stock, and the Distributing Company retained no ownership
interest in either the Company or CommScope. Additionally, immediately
following the Communications Distribution, the Distributing Company was
renamed General Semiconductor, Inc. ("General Semiconductor") and
effected a one for four reverse stock split.
The General Instrument Corporation Savings Plan (the "Plan") was
established on July 1, 1997. The Plan is a defined contribution plan
which was established to encourage long-term savings by eligible
employees of General Instrument Corporation through a systematic program
of salary deductions. The Plan began its operation on July 31, 1997 when
it received a transfer of assets from the General Semiconductor, Inc.
Savings Plan (the former General Instrument Corporation Savings Plan).
The assets transferred into the Plan on July 31, 1997 of $71,843,148
represented the fair value of the participant accounts of the employees
of General Instrument Corporation on that date.
b. CONTRIBUTIONS - Each eligible employee may elect to have compensation
reduced by, and authorize the Company to contribute to the Plan on his
or her behalf, a Matched Participant Contribution of 1% to 6% of
compensation for each payroll period. Compensation represents the
participant's base salary or wages, without reduction for his or her
Matched or Unmatched Participant Contributions to the Plan and Internal
Revenue Code Section 125 contributions for health care coverage, and
-4-
<PAGE> 8
excluding any other form of additional compensation such as overtime pay,
commissions, bonuses or incentive compensation which are additions to the
participant's yearly base salary. Each month, the Company contributes to
the Plan, on behalf of the employee, a Matching Employer Contribution equal
to 50% of the employee's Matched Participant Contribution. In addition, an
employee who has elected a Matched Participant Contribution rate of 6% may
elect to further reduce compensation, and authorize the Company to
contribute to the Plan on his or her behalf, an Unmatched Participant
Contribution of 1% to 4% of the employee's compensation for each payroll
period. The combined annual contribution limitation for employee and
employer contributions is the lesser of 25% of eligible compensation or
$30,000.
A participant may also contribute to the Plan a Rollover Amount or Trust to
Trust Amount, provided the Administrative Committee of the Plan is
satisfied that the amount to be rolled over to the Plan constitutes a
Rollover Amount or Trust to Trust Amount under federal tax regulations.
Such contributions are classified as "other" in the statements of changes
in net assets available for benefits.
c. ELIGIBILITY - All persons employed by the Company (including officers and
directors who are employees) as of July 1, 1997 or at any time thereafter
without satisfying any minimum period of qualifying employment are
eligible to participate in the Plan.
Employees subject to collective bargaining agreements which do not provide
for participation of such employees in the Plan are not eligible to
participate in the Plan.
d. VESTING - A participant's interest in his or her Participant Contributions
Account and any Rollover Account or Trust to Trust Account (including all
earnings on contributions to such accounts) are immediately and fully
vested at all times and not subject to forfeiture. Effective July 1, 1997,
a participant's interest in his or her Employer Contributions Account
(including all earnings on such account) will be 50% vested upon commencing
employment, 75% vested upon completing one year of employment, and 100%
vested upon completing two years of employment. Such years of employment
need not be consecutive.
Notwithstanding the foregoing, a participant becomes fully vested in his or
her Employer Contributions Account upon the earlier of: (i) obtaining
normal retirement age; (ii) total disability or (iii) termination of
employment by way of death. A participant will also be fully vested in the
event of a liquidation or dissolution of the Company, or upon termination
of the Plan.
e. CONDITIONS OF DISTRIBUTION AND WITHDRAWAL - Distributions under the Plan
may be made upon a participant's death, total disability, retirement or
other termination of employment. A participant who has not reached age 65
upon termination of employment may defer payment of his or her distribution
(unless such distribution would be $3,500 or less) until any time up to age
70 1/2.
Prior to termination of employment, the participant may make withdrawals
from his or her accounts in the following sequence:
(i) All or a portion of the balance in the Rollover Account or Trust to
Trust Account (subject to certain limitations), including investment
income thereon.
(ii) All or a portion of the vested Employer Contributions Account,
including investment income thereon earned before January 1, 1991
(subject to certain limitations).
-5-
<PAGE> 9
(iii) When the Participant attains age 59 1/2, all or a portion of the
vested Employer Contribution Account, the Matched Participant
Contribution Account and the Unmatched Participant Contribution
Account.
In the case of hardship, the Participant may withdraw all or a portion of
his or her vested Employer Contribution Account and his Matched
Participant Contribution Account and Unmatched Participant Contribution
Account, excluding investment income thereon. The Plan Administrator has
sole discretion to approve the amount needed to be withdrawn from the
Participant Contribution Account to alleviate the immediate hardship.
Withdrawals prior to termination of employment are subject to the following
conditions: (i) no more than one request for a withdrawal may be made
during any six-month period, except in the case of a financial hardship
withdrawal; (ii) a participant may not make a withdrawal until he or she
has been a participant for six consecutive months; and (iii) the amount
withdrawn shall not be less than $200 or the amount of the participant's
vested accrued benefit.
Effective January 1, 1987, the Tax Reform Act of 1986 imposed an additional
10% tax on the amount of any distribution from the Plan made to or in
respect of a participant before the participant attains age 59 1/2 except:
(i) any portion of the distribution which was rolled over to a qualified
successor benefit plan; or (ii) if the distribution is on account of death,
disability or retirement (after age 55).
Upon withdrawal from the Plan or after termination of employment, the
non-vested portion of a participant's account will be forfeited. The
forfeiture may be used to reduce future employer contributions. Forfeited
non-vested accounts totaled $24,595 for the period July 31, 1997 through
December 31, 1997.
f. LOANS - A participant is eligible to receive loans under the Plan without a
required period of prior participation in the Plan. A participant may not
have more than one loan from the Plan outstanding at any one time.
The amount of a loan may not exceed the following amount:
(i) The lesser of 50% of the vested value of the participant's accounts or
$50,000.
(ii) Notwithstanding anything in (i) to the contrary, no loan shall be
made in a principal amount of less than $1,000 and the principal
amount must be in increments of $100.
Interest is paid on the outstanding principal amount of each loan at a
fixed per annum rate equal to the prime lending rate as published in the
Wall Street Journal on the last business day of each month plus 1 1/2%.
This rate applies during the full term of the loan and is not modified.
Interest paid by a participant is credited to his or her applicable
account.
The term of the loan is fixed by the Administrative Committee at the time
the loan is made and may not be extended. All loans are for a minimum term
of one year and are in one year increments. Any loan which is to be used to
acquire a dwelling unit which is to be used as the principal residence of
the borrowing participant within a reasonable time (a "residence loan")
must be repaid within the earlier of fifteen years or disposition of such
principal residence. Any other loan will be treated as a "nonresidence
loan" and must be repaid within a maximum of five years.
-6-
<PAGE> 10
Regardless of its original maturity, the outstanding principal amount of
any loan and accrued interest thereon becomes immediately due and payable
sixty days following the date a participant's employment with the Company
terminates for any reason whatsoever.
A loan, including interest thereon, is repaid by payroll deductions under a
fixed schedule which provides for interest and amortization of principal in
substantially level payments over the term of the loan. A participant may
repay all, but not part, of any loan at any time without penalty by payment
of the outstanding principal amount thereof, plus unpaid accrued interest
to the date of repayment. As collateral for repayment of each loan made to
a participant, such participant must pledge 50% of his or her vested
accrued benefit and such additional collateral as the Plan administrator
may require.
g. INVESTMENT FUNDS - State Street Bank and Trust Company ("State Street") is
the trustee of the Plan. Vanguard Fiduciary Trust Company ("Vanguard") is
the investment manager and recordkeeper of the Plan.
A participant may elect to invest all Participant Contributions, Rollover
Amounts or Trust to Trust amounts in one or any combination of the funds
described below, in whole multiples of 5% of the aggregate amount of such
contributions. A participant may elect to transfer once each day, all or
any part of the aggregate value in his or her account or his or her
interest in one or more investment fund or funds subject to rules
restricting transfers related to the Vanguard Retirement Savings Trust.
All Matching Employer Contributions and earnings thereon have been invested
solely in the General Instrument Corporation (the former NextLevel Systems,
Inc.) Common Stock Fund, which is also an investment option for
participants. The descriptions of the investments have been obtained from
the various fund prospectuses:
General Instrument Corporation (the former NextLevel Systems, Inc.)
Common Stock Fund - Consists of General Instrument Corporation common
stock and temporary cash investments.
General Semiconductor, Inc. (the Distributing Company) Common Stock
Fund - Consists principally of General Semiconductor, Inc. common
stock and temporary cash investments. This fund is not a current
investment option for participants. The investment is held as the
result of the spin-off transaction.
CommScope, Inc. Common Stock Fund - Consists principally of CommScope,
Inc. common stock and temporary cash investments. This fund is not a
current investment option for participants. The investment is held as
the result of the spin-off transaction.
Vanguard Retirement Savings Trust (Common/Collective Trusts) -
Consisting of one or more guaranteed investment contracts issued by
insurance companies and banks.
Vanguard/Wellington Fund (Registered Investment Company) - Consisting
of a portfolio of approximately 65% in common stocks and 35% in fixed
income securities (including corporate and government bonds and money
market instruments).
Vanguard Index Trust - 500 Portfolio (Registered Investment Company) -
Consisting of a portfolio of the five-hundred stocks in the Standard &
Poor's 500 Composite Stock Price Index, each individual stock being
weighted relative to its total market value and parallel to its
representation in the Index.
-7-
<PAGE> 11
Vanguard Money Market Reserves (Registered Investment Company) -
Consisting of a portfolio of securities issued by the U.S.
Treasury and agencies of the U.S. Government with maturities of
one year or less.
Vanguard Fixed Income Securities Fund (Registered Investment
Company) - Consisting of a portfolio of fixed income securities
guaranteed by the U.S. Government and approximately 80% of which
is normally invested in Government National Mortgage Association
("GNMA") certificates; the balance being invested in temporary
cash investments.
Vanguard STAR Portfolio (Registered Investment Company) -
Comprised of a portfolio investing 60-70% of its assets in seven
Vanguard equity funds and approximately 30-40% in three Vanguard
fixed income funds.
Vanguard U.S. Growth Portfolio (Registered Investment Company) -
Consisting of a portfolio investing primarily in common stock of
United States corporations with above average growth potential.
Vanguard International Growth Portfolio (Registered Investment
Company) - Consisting of a portfolio of equity securities of
corporations located outside the United States.
Loan Fund - A separate loan fund has been established to account
for loans made from each specified fund. As periodic principal
and interest payments become due, they are reallocated to the
specific funds from which the loan originated.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
b. INVESTMENTS - Investments are stated at fair or market values. The
market values of General Instrument Corporation, General
Semiconductor, Inc. and CommScope, Inc. common stock are based on the
closing prices as quoted on the New York Stock Exchange. The
investments in shares of the Vanguard funds are valued at the
redemption prices established by Vanguard, based upon its
determination of the market value of the underlying investments.
c. ADMINISTRATIVE EXPENSES - The Plan provides that all expenses shall
be paid by the Plan unless the Company, at its sole discretion,
elects to pay such expenses without reimbursement. During the period
July 31, 1997 through December 31, 1997, the Company elected to pay
$35,977 of Plan expenses without reimbursement.
d. OTHER - All security transactions are recorded on a trade date basis.
Net gains and losses on the disposal of investments in each fund are
computed using the average cost method based on the beginning market
value as carried forward from the end of the prior plan year.
Dividend income is recorded on the ex-dividend date. Income from
other investments is recorded as earned on an accrual basis.
- 8 -
<PAGE> 12
e. BENEFITS PAYABLE - As prescribed by the American Institute of Certified
Public Accountants' Audit and Accounting Guide, "Audits of Employee
Benefit Plans," benefit payments are recognized as reductions of Plan
assets upon disbursement. Benefits payable to terminated employees who had
elected to withdraw from the Plan as of December 31, 1997 were $113,523.
3. INVESTMENTS
Investments held by State Street and Vanguard at December 31, 1997 were as
follows:
<TABLE>
<CAPTION>
Name of
Issuer and Number of Historical Fair Fair Value
Title of Issues Units Cost Value of Unit
<S> <C> <C> <C> <C>
General Instrument Corporation
(the former NextLevel Systems,
Inc.) Common Stock Fund 1,565,709 $15,510,012 $14,748,982 $ 9.42
General Semiconductor, Inc.
(the Distributing Company)
Common Stock Fund 167,911 1,707,653 1,294,591 7.71
CommScope, Inc. Common
Stock Fund 244,055 2,540,601 2,130,598 8.73
Vanguard:
Retirement Savings Trust 3,459,683 3,459,683 3,459,683 1.00
Wellington Fund 408,970 12,562,521 12,044,163 29.45
Index Trust - 500 Portfolio 198,401 17,742,196 17,869,948 90.07
Money Market Reserves 4,983,817 4,983,817 4,983,817 1.00
Fixed Income Securities Fund 310,866 3,224,102 3,242,331 10.43
STAR Portfolio 189,079 3,457,309 3,286,202 17.38
U.S. Growth Portfolio 213,090 6,311,137 6,115,692 28.70
International Growth Portfolio 200,115 3,875,395 3,279,886 16.39
</TABLE>
4. PLAN TERMINATION
Although it has not expressed any interest to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions set forth in ERISA.
5. TAX STATUS
The Plan is intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986 (the "Code") and is intended to be exempt from taxation
under Section 501(a) of the Code. The Plan has not yet received an IRS
determination letter. The Plan administrator believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code and the related trust is expected to be tax-exempt
as of the financial statement date. Therefore, no provision for income taxes
has been included in the Plan's financial statements.
******
-9-
<PAGE> 13
SUPPLEMENTAL SCHEDULES
<PAGE> 14
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
ITEM 27(a)-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION
NAME OF ISSUER OF NUMBER OF CURRENT
AND TITLE OF ISSUE INVESTMENT UNITS COST VALUE
- ------------------ ----------- --------- ---------- -----------
<S> <C> <C> <C> <C>
*General Instrument Corporation Common Stock and
(the former NextLevel Systems, Temporary Cash
Inc.) Common Stock Fund Investments 1,565,709 $15,510,012 $14,748,982
General Semiconductor, Inc. Common Stock and
(the Distributing Company) Temporary Cash
Common Stock Fund Investments 167,911 1,707,653 1,294,591
CommScope, Inc. Common Common Stock and
Stock Fund Temporary Cash
Investments 244,055 2,540,601 2,130,598
Vanguard:
Retirement Savings Trust Common/Collective
Trust 3,459,683 3,459,683 3,459,683
Wellington Fund Shares of Registered
Investment Company 408,970 12,562,521 12,044,163
Index Trust - 500 Portfolio Shares of Registered
Investment Company 198,401 17,742,196 17,869,948
Money Market Reserves Shares of Registered
Investment Company 4,983,817 4,983,817 4,983,817
Fixed Income Securities Fund Shares of Registered
Investment Company 310,866 3,224,102 3,242,331
STAR Portfolio Shares of Registered
Investment Company 189,079 3,457,309 3,286,202
U.S. Growth Portfolio Shares of Registered
Investment Company 213,090 6,311,137 6,115,692
International Growth Shares of Registered
Portfolio Investment Company 200,115 3,875,395 3,279,886
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION
DESCRIPTION OF MATURITY
- ----------- -----------
<S> <C> <C> <C> <C>
Plan participant loans other Through 12/31/01
than mortgages, at various 7.5%-11.5%
rates of interest 1,860,152 1,860,152
----------- -----------
TOTAL ASSETS HELD
FOR INVESTMENT
PURPOSES $77,234,578 $74,316,045
=========== ===========
</TABLE>
*Party-in-interest
- 10 -
<PAGE> 15
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
ITEM 27(d)- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE PERIOD JULY 31, 1997 (INCEPTION OF PLAN) THROUGH DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER PURCHASE NUMBER
OF PRICE OR OF SELLING REALIZED
Investment PURCHASES CONTRIBUTION SALES PRICE GAIN (LOSS)
- ------------------ --------- ------------ ------- ----------- -----------
<S> <C> <C> <C> <C> <C>
General Instrument Corporation
(the former NextLevel
Systems, Inc.) Common
Stock Fund 62 $3,642,372 $ -- $ --
1,623,744 71 1,371,977 (251,767)
General Semiconductor, Inc.
(the Distributing Company)
Common Stock Fund -- 872,576 70 697,240 (175,336)
CommScope, Inc. Common
Stock Fund -- 1,068,930 69 892,424 (176,506)
Vanguard:
Retirement Savings Trust 50 493,965
303,326 46 303,326 --
Wellington Fund 59 1,955,761
650,404 54 640,937 (9,467)
Index Trust - 500 Portfolio 96 3,046,766
1,593,911 72 1,579,441 (14,470)
Money Market Reserves 93 1,017,104
767,316 61 767,316 --
Fixed Income Securities 59 501,227
261,334 39 261,607 273
STAR Portfolio 42 868,060
125,433 34 125,448 15
U.S. Growth Portfolio 55 1,336,899
479,222 44 466,683 (12,539)
International Growth Portfolio 44 730,550
347,014 45 312,238 (34,776)
</TABLE>
- 11 -
<PAGE> 16
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed by the undersigned hereunto duly
authorized.
General Instrument Corporation Savings Plan
-------------------------------------------
Date June 24, 1998 /s/ Scott A. Crum
- ------------------ --------------------------------------------
Scott A. Crum
Member of the General Instrument Corporation
Employee Benefits Administration Committee
<PAGE> 17
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
23 Independent Auditors' Consent
<PAGE> 1
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
333-29719 and 333-33399 of General Instrument Corporation on Forms S-8 of our
report dated June 12, 1998 appearing in this Annual Report on Form 11-K of
General Instrument Corporation Savings Plan for the Period July 31, 1997 through
December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
- -------------------------------
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 24, 1998
