<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, 1998
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)
101 Tournament Drive, Horsham, Pennsylvania 19044 (Address of
principal executive offices)
(Zip Code)
<PAGE> 2
- -------------------------------------------------------------------------------
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
Financial Statements as of December 31, 1998 and 1997 and for the
Year Ended December 31, 1998 and the
Period July 31, 1997 (Inception of the Plan) Through
December 31, 1997, and
Supplemental Schedules as of
December 31, 1998, and for the Year Ended
December 31, 1998, and
Independent Auditors' Report
<PAGE> 3
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
PAGE
----
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 1998 and 1997 with Supplemental Fund Information 2-3
Statements of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1998 and the Period July 31, 1997 (Inception of the Plan)
through December 31, 1997, with Supplemental Fund Information 4-5
Notes to Financial Statements 6-12
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 13
Item 27(d) - Schedule of Reportable Transactions for the
Year Ended December 31, 1998 14
</TABLE>
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 statements of net assets available for benefits
of General Instrument Corporation Savings Plan (the "Plan") as of December 31,
1998 and 1997, and the related statements of changes in net assets available for
benefits for the year ended December 31, 1998 and for the period July 31, 1997
(inception of the 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the year
ended December 31, 1998 and for the period July 31, 1997 (inception of Plan)
through December 31, 1997, in conformity with generally accepted accounting
principles.
Our audits were 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, 1998 and 1997 and
for the year ended December 31, 1998 and for the period July 31, 1997 (inception
of Plan) 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 audits 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 15, 1999
<PAGE> 5
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL FUND
INFORMATION AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GENERAL
INSTRUMENT GENERAL
CORPORATION SEMICONDUCTOR,
(THE FORMER INC.
NEXTLEVEL (THE DISTRIBUTING COMMSCOPE, VANGUARD
SYSTEMS, INC.) COMPANY) INC. RETIREMENT
COMMON COMMON COMMON SAVINGS
STOCK FUND STOCK FUND STOCK FUND TRUST
<S> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Company common stock $30,210,292 $ -- $ -- $ --
Other common stock -- 671,314 1,980,027 --
Common/collective trust -- -- -- 3,933,010
Shares of registered
investment company -- -- -- --
Participant loans -- -- -- --
Contributions receivable:
Employee 88,709 -- -- 34,933
Employer 305,881 -- -- --
----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $30,604,882 $ 671,314 $ 1,980,027 $ 3,967,943
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
VANGUARD
FEDERAL
VANGUARD/ VANGUARD MONEY VANGUARD
WELLINGTON 500 INDEX MARKET GNMA
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Company common stock $ -- $ -- $ -- $ --
Other common stock -- -- -- --
Common/collective trust -- -- -- --
Shares of registered
investment company 14,213,754 24,662,190 6,204,754 4,157,068
Participant loans -- -- -- --
Contributions receivable:
Employee 127,422 241,434 35,413 36,209
Employer -- -- -- --
----------- ----------- ----------- ------------
NET ASSETS AVAILABLE
FOR BENEFITS $14,341,176 $24,903,624 $ 6,240,167 $ 4,193,277
=========== =========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
VANGUARD VANGUARD
VANGUARD U.S. INTERNATIONAL
STAR GROWTH GROWTH LOAN
FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Company common stock $ -- $ -- $ -- $ -- $ 30,210,292
Other common stock -- -- -- -- 2,651,341
Common/collective trust -- -- -- -- 3,933,010
Shares of registered
investment company 4,288,479 10,837,939 4,043,461 -- 68,407,645
Participant loans -- -- -- 2,106,577 2,106,577
Contributions receivable:
Employee 64,783 143,623 59,237 -- 831,763
Employer -- -- -- -- 305,881
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE
FOR BENEFITS $ 4,353,262 $ 10,981,562 $ 4,102,698 $ 2,106,577 $108,446,509
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
-2-
<PAGE> 6
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
SYSTEMS, INC.) COMPANY) INC. RETIREMENT
COMMON COMMON COMMON SAVINGS
STOCK FUND STOCK FUND STOCK FUND TRUST
<S> <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 -- -- -- --
Participant loans -- -- -- --
Loans receivable 8,468 -- -- 4,775
Contributions receivable:
Employee 78,090 -- -- 32,492
Employer 263,429 -- -- --
----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $15,098,969 $ 1,294,591 $ 2,130,598 $ 3,496,950
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
VANGUARD
FEDERAL
VANGUARD/ VANGUARD MONEY VANGUARD
WELLINGTON 500 INDEX MARKET GNMA
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Company common stock $ -- $ -- $ -- $ --
Other common stock -- -- -- --
Common/collective trust -- -- -- --
Shares of registered
investment company 12,044,163 17,869,948 4,983,817 3,242,331
Participant loans -- -- -- --
Loans receivable 8,077 9,478 4,106 1,746
Contributions receivable:
Employee 113,969 192,841 33,721 30,460
Employer -- -- -- --
----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $12,166,209 $18,072,267 $ 5,021,644 $ 3,274,537
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
VANGUARD VANGUARD
VANGUARD U.S. INTERNATIONAL
STAR GROWTH GROWTH LOAN
FUND FUND FUND FUND TOTAL
<S> <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 3,286,202 6,115,692 3,279,886 -- 50,822,039
Participant loans -- -- -- 1,860,152 1,860,152
Loans receivable 1,949 3,900 3,143 -- 45,642
Contributions receivable:
Employee 53,864 113,307 60,119 -- 708,863
Employer -- -- -- -- 263,429
----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 3,342,015 $ 6,232,899 $ 3,343,148 $ 1,860,152 $75,333,979
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-3-
<PAGE> 7
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL
FUND INFORMATION YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GENERAL
INSTRUMENT GENERAL
CORPORATION SEMICONDUCTOR,
(THE FORMER INC.
NEXTLEVEL (THE DISTRIBUTING COMMSCOPE, VANGUARD
SYSTEMS, INC.) COMPANY) INC. RETIREMENT
COMMON COMMON COMMON SAVINGS
STOCK FUND STOCK FUND STOCK FUND TRUST
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 1,152,883 $ -- $ -- $ 510,659
Employer 3,656,520 -- -- --
------------ ------------ ------------ ------------
Net contributions 4,809,403 -- -- 510,659
------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends -- -- -- 215,961
Net gain (loss) on investments 14,257,895 (298,779) 458,655 --
------------ ------------ ------------ ------------
Net investment income (loss) 14,257,895 (298,779) 458,655 215,961
------------ ------------ ------------ ------------
Total additions 19,067,298 (298,779) 458,655 726,620
------------ ------------ ------------ ------------
DISTRIBUTIONS 1,908,983 83,977 163,799 521,841
ADMINISTRATIVE EXPENSES 15,271 611 1,120 1,995
------------ ------------ ------------ ------------
Total deductions 1,924,254 84,588 164,919 523,836
------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS (1,637,131) (239,910) (444,307) 268,209
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 15,505,913 (623,277) (150,571) 470,993
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 15,098,969 1,294,591 2,130,598 3,496,950
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $ 30,604,882 $ 671,314 $ 1,980,027 $ 3,967,943
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
VANGUARD
FEDERAL
VANGUARD/ VANGUARD MONEY VANGUARD
WELLINGTON 500 INDEX MARKET GNMA
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 1,966,528 $ 3,694,372 $ 488,470 $ 455,044
Employer -- -- -- --
------------ ------------ ------------ ------------
Net contributions 1,966,528 3,694,372 488,470 455,044
------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends 1,544,844 372,958 295,991 238,652
Net gain (loss) on investments (95,559) 4,904,322 -- 5,493
------------ ------------ ------------ ------------
Net investment income (loss) 1,449,285 5,277,280 295,991 244,145
------------ ------------ ------------ ------------
Total additions 3,415,813 8,971,652 784,461 699,189
------------ ------------ ------------ ------------
DISTRIBUTIONS 1,131,529 2,526,158 543,668 265,810
ADMINISTRATIVE EXPENSES 6,357 10,546 19,618 1,730
------------ ------------ ------------ ------------
Total deductions 1,137,886 2,536,704 563,286 267,540
------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS (102,960) 396,409 997,348 487,091
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 2,174,967 6,831,357 1,218,523 918,740
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 12,166,209 18,072,267 5,021,644 3,274,537
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $ 14,341,176 $ 24,903,624 $ 6,240,167 $ 4,193,277
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
VANGUARD VANGUARD
VANGUARD U.S. INTERNATIONAL
STAR GROWTH GROWTH LOAN
FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 861,620 $ 2,316,878 $ 871,522 $ -- $ 12,317,976
Employer -- -- -- -- 3,656,520
------------ ------------ ------------ ------------ ------------
Net contributions 861,620 2,316,878 871,522 -- 15,974,496
------------ ------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends 344,975 661,270 80,969 152,046 3,907,666
Net gain (loss) on investments 86,986 2,130,907 486,102 -- 21,936,022
------------ ------------ ------------ ------------ ------------
Net investment income (loss) 431,961 2,792,177 567,071 152,046 25,843,688
------------ ------------ ------------ ------------ ------------
Total additions 1,293,581 5,109,055 1,438,593 152,046 41,818,184
------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS 352,961 736,300 323,790 77,783 8,636,599
ADMINISTRATIVE EXPENSES 2,942 6,331 2,534 -- 69,055
------------ ------------ ------------ ------------ ------------
Total deductions 355,903 742,631 326,324 77,783 8,705,654
------------ ------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS 73,569 382,239 (352,719) 172,162 --
------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 1,011,247 4,748,663 759,550 246,425 33,112,530
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 3,342,015 6,232,899 3,343,148 1,860,152 75,333,979
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $ 4,353,262 $ 10,981,562 $ 4,102,698 $ 2,106,577 $108,446,509
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
-4-
<PAGE> 8
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL
FUND INFORMATION 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
SYSTEMS, INC.) COMPANY) INC. RETIREMENT
COMMON COMMON COMMON SAVINGS
STOCK FUND STOCK FUND STOCK FUND TRUST
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 567,822 $ -- $ -- $ 252,178
Employer 1,768,818 -- -- --
------------ ------------ ------------ ------------
Net contributions 2,336,640 -- -- 252,178
------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends -- -- -- 85,379
Net (loss) gain on investments (1,012,797) (588,398) (586,433) --
------------ ------------ ------------ ------------
Net investment income (loss) (1,012,797) (588,398) (586,433) 85,379
------------ ------------ ------------ ------------
Total additions 1,323,843 (588,398) (586,433) 337,557
------------ ------------ ------------ ------------
DISTRIBUTIONS 517,966 36,497 52,195 71,017
ADMINISTRATIVE EXPENSES 6,986 896 1,339 1,373
------------ ------------ ------------ ------------
Total deductions 524,952 37,393 53,534 72,390
------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS 808,694 (659,847) (838,890) (37,261)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 1,607,585 (1,285,638) (1,478,857) 227,906
TRANSFER OF ASSETS FROM
GENERAL SEMICONDUCTOR, INC
SAVINGS PLAN 13,491,384 2,580,229 3,609,455 3,269,044
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF PERIOD $ 15,098,969 $ 1,294,591 $ 2,130,598 $ 3,496,950
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
VANGUARD
FEDERAL
VANGUARD/ VANGUARD MONEY VANGUARD
WELLINGTON 500 INDEX MARKET GNMA
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 869,188 $ 1,458,893 $ 463,865 $ 255,490
Employer -- -- -- --
------------ ------------ ------------ ------------
Net contributions 869,188 1,458,893 463,865 255,490
------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends 872,267 260,840 107,990 89,491
Net (loss) gain on investments (527,828) 145,418 -- 18,502
------------ ------------ ------------ ------------
Net investment income (loss) 344,439 406,258 107,990 107,993
------------ ------------ ------------ ------------
Total additions 1,213,627 1,865,151 571,855 363,483
------------ ------------ ------------ ------------
DISTRIBUTIONS 423,199 739,378 117,999 111,034
ADMINISTRATIVE EXPENSES 4,330 6,494 1,852 1,177
------------ ------------ ------------ ------------
Total deductions 427,529 745,872 119,851 112,211
------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS 122,947 663,647 (173,390) 39,056
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 909,045 1,782,926 278,614 290,328
TRANSFER OF ASSETS FROM
GENERAL SEMICONDUCTOR, INC
SAVINGS PLAN 11,257,164 16,289,341 4,743,030 2,984,209
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF PERIOD $ 12,166,209 $ 18,072,267 $ 5,021,644 $ 3,274,537
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
VANGUARD VANGUARD
VANGUARD U.S. INTERNATIONAL
STAR GROWTH GROWTH LOAN
FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Employees $ 465,179 $ 893,779 $ 468,363 $ -- $ 5,694,757
Employer -- -- -- -- 1,768,818
------------ ------------ ------------ ------------ ------------
Net contributions 465,179 893,779 468,363 -- 7,463,575
------------ ------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest and dividends 269,250 240,631 141,297 68,859 2,136,004
Net (loss) gain on investments (170,896) (207,985) (630,286) -- (3,560,703)
------------ ------------ ------------ ------------ ------------
Net investment income (loss) 98,354 32,646 (488,989) 68,859 (1,424,699)
------------ ------------ ------------ ------------ ------------
Total additions 563,533 926,425 (20,626) 68,859 6,038,876
------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS 56,171 205,098 104,066 82,412 2,517,032
ADMINISTRATIVE EXPENSES 1,661 3,272 1,633 -- 31,013
------------ ------------ ------------ ------------ ------------
Total deductions 57,832 208,370 105,699 82,412 2,548,045
------------ ------------ ------------ ------------ ------------
TRANSFER FROM (TO) OTHER
FUNDS 121,632 61,384 (22,386) (85,586) --
------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 627,333 779,439 (148,711) (99,139) 3,490,831
TRANSFER OF ASSETS FROM
GENERAL SEMICONDUCTOR, INC
SAVINGS PLAN 2,714,682 5,453,460 3,491,859 1,959,291 71,843,148
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF PERIOD $ 3,342,015 $ 6,232,899 $ 3,343,148 $ 1,860,152 $ 75,333,979
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
-5-
<PAGE> 9
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 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, at the distributing Company's historical cost, 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"), at the Distributing Company's historical cost, 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
-6-
<PAGE> 10
coverage, and excluding any other form of additional compensation
such as overtime pay, commissions, incentive pay or severance pay,
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. In addition, an active participant, who is
not a Highly Compensated Employee for the relevant year, may elect
an Unmatched Participant Contribution of 0%, 50% or 100% of the
employee's annual formula-based profit sharing bonus payable
pursuant to the Company's profit sharing bonus program. Total
annual contributions may not exceed maximum allowable contributions
as prescribed by the Internal Revenue Service.
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.
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, an active 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 $5,000
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.
-7-
<PAGE> 11
(ii) All or a portion of the vested Employer Contributions Account,
including investment income thereon earned before January 1,
1991 (subject to certain limitations).
(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 and (ii) 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 nonvested portion of a participant's account will be forfeited.
The forfeiture may be used to reduce future employer contributions.
Forfeited nonvested accounts totaled $64,665 for the year ended
December 31, 1998 and $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 first 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
-8-
<PAGE> 12
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.
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,
except that for a participant who receives periodic severance
payments from which the loan repayments continue to be deducted, the
loan becomes immediately due and payable sixty days following the
final periodic severance payment.
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 - Vanguard Fiduciary Trust Company ("Vanguard") is
the trustee, 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
described in Note 1a.
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).
-9-
<PAGE> 13
Vanguard 500 Index Fund (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.
Vanguard Federal Money Market Fund (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 GNMA 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 Fund (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 Fund (Registered Investment Company)
Consisting of a portfolio investing primarily in common stock
of United States corporations with above average growth
potential.
Vanguard International Growth Fund (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 year
ended December 31, 1998 and the period July 31, 1997 through
December 31, 1997, the Company elected to pay $40,940 and $35,977,
respectively, of Plan expenses without reimbursement.
-10-
<PAGE> 14
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.
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, 1998 and 1997 were $892,187 and $113,523, respectively.
3. INVESTMENTS
Investments held by Vanguard at December 31, 1998 were as follows:
<TABLE>
<CAPTION>
NAME OF
ISSUER AND NUMBER OF FAIR
TITLE OF ISSUES UNITS VALUE
<S> <C> <C>
General Instrument Corporation (the former NextLevel
Systems,Inc.) Common Stock Fund 1,699,117 $30,210,292
General Semiconductor, Inc. (the Distributing Company)
Common Stock Fund 122,502 671,314
CommScope, Inc. Common Stock Fund 181,821 1,980,027
Vanguard:
Retirement Savings Trust 3,933,010 3,933,010
Wellington Fund 484,285 14,213,754
500 Index Fund 216,430 24,662,190
Federal Money Market Fund 6,204,754 6,204,754
GNMA Fund 397,806 4,157,068
STAR Fund 238,779 4,288,479
U.S. Growth Fund 289,089 10,837,939
International Growth Fund 215,421 4,043,461
</TABLE>
-11-
<PAGE> 15
Investments held by Vanguard at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
NAME OF
ISSUER AND NUMBER OF FAIR
TITLE OF ISSUES UNITS VALUE
<S> <C> <C>
General Instrument Corporation (the former NextLevel
Systems,Inc.) Common Stock Fund 1,565,709 $14,748,982
General Semiconductor, Inc. (the Distributing Company)
Common Stock Fund 167,911 1,294,591
CommScope, Inc. Common Stock Fund 244,055 2,130,598
Vanguard:
Retirement Savings Trust 3,459,683 3,459,683
Wellington Fund 408,970 12,044,163
Index Trust - 500 Portfolio 198,401 17,869,948
Money Market Reserves 4,983,817 4,983,817
Fixed Income Securities Fund 310,866 3,242,331
STAR Portfolio 189,079 3,286,202
U.S. Growth Portfolio 213,090 6,115,692
International Growth Portfolio 200,115 3,279,886
</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.
******
-12-
<PAGE> 16
SUPPLEMENTAL SCHEDULES
<PAGE> 17
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<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 1,699,117 $16,285,565 $30,210,292
General Semiconductor, Inc. Common Stock and
(the Distributing Company) Temporary Cash
Common Stock Fund Investments 122,502 1,005,386 671,314
CommScope, Inc. Common Common Stock and
Stock Fund Temporary Cash
Investments 181,821 1,460,219 1,980,027
Vanguard:
Retirement Savings Trust Common/Collective
Trust 3,933,010 3,933,010 3,933,010
Wellington Fund Shares of Registered
Investment Company 484,285 12,318,604 14,213,754
500 Index Fund Shares of Registered
Investment Company 216,430 15,168,075 24,662,190
Federal Money Market Fund Shares of Registered
Investment Company 6,204,754 6,204,754 6,204,754
GNMA Fund Shares of Registered
Investment Company 397,806 4,073,009 4,157,068
STAR Fund Shares of Registered
Investment Company 238,779 4,010,795 4,288,479
U.S. Growth Fund Shares of Registered
Investment Company 289,089 7,944,083 10,837,939
International Growth Shares of Registered
Fund Investment Company 215,421 3,553,412 4,043,461
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION
DESCRIPTION OF MATURITY
<S> <C> <C> <C>
Plan participant loans other than Through 8/30/13
mortgages, at various rates 7.5% - 12.0%
of interest 2,106,577 2,106,577
----------- ------------
TOTAL ASSETS HELD
FOR INVESTMENT
PURPOSES $78,063,489 $107,308,865
=========== ============
*Party-in-interest
</TABLE>
-13-
<PAGE> 18
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
NUMBER PURCHASE NUMBER
OF PRICE OR OF SELLING REALIZED
INVESTMENT PURCHASES CONTRIBUTION SALES PRICE GAIN
<S> <C> <C> <C> <C> <C>
General Instrument Corporation
(the former NextLevel
Systems, Inc.) Common
Stock Fund 181 $14,072,489
10,515,099 184 $12,869,074 $ 2,353,975
Vanguard:
Wellington Fund 116 4,991,264
2,328,323 120 2,726,114 397,791
500 Index Fund 185 8,290,589
5,100,524 161 6,402,670 1,302,146
Federal Money Market Fund 202 6,826,388
5,605,450 152 5,605,450 --
GNMA Fund 152 3,336,428
2,415,193 98 2,427,183 11,990
U.S. Growth Fund 128 4,114,551
1,201,276 103 1,523,212 321,936
</TABLE>
-14-
<PAGE> 19
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 28, 1999 /s/ Scott A. Crum
------------- --------------------------------------------
Scott A. Crum
Chairman of the General Instrument
Corporation Employee Benefits Administrative
Committee
<PAGE> 20
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 15, 1999 appearing in this Annual Report on Form 11-K of
General Instrument Corporation Savings Plan for the year ended December 31,
1998.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 28, 1999
