UNITED STATES
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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 001-12929
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
COMMSCOPE, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-4135495
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1375 LENOIR RHYNE BOULEVARD, HICKORY, NORTH CAROLINA 28602
(Address of principal executive offices)
(Zip Code)
(828) 324-2200
(Registrant's telephone number, including area code)
<PAGE>
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COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
Financial Statements for the Years Ended
December 31, 1999, 1998 and 1997, Supplemental
Schedules for the Year Ended December 31, 1999
and Independent Auditors' Report
<PAGE>
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
TABLE OF CONTENTS
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Page
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND 1998 AND FOR
THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-9
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1999 AND FOR THE YEAR
THEN ENDED:
Schedule H, line 4i - Schedule of Assets Held for Investment
Purposes at Year End 10
Schedule H, line 4j - Schedule of Reportable Transactions 11
NOTE: Other supplemental schedules have been omitted because, in the opinion of
the plan administrator, or in the opinion of the trustee, no events
requiring such schedules to be filed occurred during the year ended
December 31, 1999.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants and Administrator
of the CommScope, Inc. of North Carolina
Employees Profit Sharing and Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the CommScope, Inc. of North Carolina Employees Profit Sharing and Savings
Plan (the "Plan") as of December 31, 1999 and 1998, and the related statements
of changes in net assets available for benefits for each of the three years in
the period ended December 31, 1999. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 at December 31, 1999
and 1998, and the changes in net assets available for benefits for each of the
three years in the period ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States of America.
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. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic 1999 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.
May 26, 2000
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<PAGE>
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1999 1998
------------ ------------
ASSETS
INVESTMENTS, AT FAIR VALUE (Notes 1, 2, 6 and 7):
Mutual funds $ 83,633,117 $ 74,945,279
Common trust fund 6,929,130 4,384,840
Company stock funds 27,026,809 12,570,354
Loans to participants 6,929,017 6,214,530
------------ ------------
Total investments 124,518,073 98,115,003
------------ ------------
RECEIVABLES:
Employer's contribution 96,609 9,187
Participants' contributions 297,384 26,880
------------ ------------
Total receivables 393,993 36,067
------------ ------------
TOTAL ASSETS 124,912,066 98,151,070
LIABILITIES - Excess contributions 7,237 --
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $124,904,829 $ 98,151,070
============ ============
See notes to financial statements.
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<PAGE>
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
ADDITIONS:
Investment income:
Net appreciation in fair value of
investments (Notes 2, 7 and 8) $ 18,433,174 $ 10,291,667 $ 7,450,479
Interest and dividend income (Notes 2 and 8) 4,933,008 4,980,431 3,773,503
------------ ------------ ------------
Total investment income 23,366,182 15,272,098 11,223,982
Contributions:
Employer's (Notes 1 and 8) 5,459,083 5,433,319 7,007,901
Participants' (Notes 1 and 8) 4,794,962 4,220,987 4,160,515
Transfers from other plans (Notes 2 and 3) 301,348 238,113 459,563
------------ ------------ ------------
Total contributions 10,555,393 9,892,419 11,627,979
------------ ------------ ------------
Total additions 33,921,575 25,164,517 22,851,961
DEDUCTIONS - Benefits paid to participants 7,167,816 6,854,277 2,942,063
------------ ------------ ------------
NET INCREASE 26,753,759 18,310,240 19,909,898
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 98,151,070 79,840,830 59,930,932
------------ ------------ ------------
End of year $124,904,829 $ 98,151,070 $ 79,840,830
============ ============ ============
</TABLE>
See notes to financial statements.
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<PAGE>
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following brief description of the CommScope, Inc. of North Carolina
Employees Profit Sharing and Savings Plan (the "Plan") is provided for
general information purposes only. Participants should refer to the plan
agreement for a more complete description of the Plan's provisions.
General - The Plan is a defined contribution plan covering all domestic
employees of CommScope, Inc. of North Carolina and subsidiaries ("CommScope"
or the "Company"), who have completed one hour of service with the Company
(defined as the first day of the calendar month following the completion of
one hour of service) for the salary deferral savings portion of the Plan and
employees who have completed 1,000 hours of service with the Company
(defined as the first day of the fiscal year following the completion of
1,000 hours of service) for the employer discretionary profit sharing
portion of the Plan. The Plan was formed June 1, 1992 when the CommScope,
Inc. Employee Stock Plan was terminated and plan assets and liabilities were
combined with those of the CommScope, Inc. Employee Savings Plan to form the
CommScope, Inc. of North Carolina Employees Profit Sharing and Savings Plan.
The combination of the two plans had no effect on the individual participant
account balances or total assets. For those participants who were enrolled
in both plans, their account balances were consolidated. The predecessor
Employee Savings Plan became effective November 28, 1988 and was designed to
comply with the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA") and Sections 401(a) and 401(k) of the Internal Revenue Code
as amended by the Tax Reform Act of 1986.
The Plan was amended effective July 28, 1997 to change its name from
CommScope, Inc. Employees Profit Sharing and Savings Plan to CommScope, Inc.
of North Carolina Employees Profit Sharing and Savings Plan.
The Plan was amended effective January 1, 1995 to allow a participant to
elect a cash option distribution for a portion of the employer discretionary
profit sharing portion of the Plan. Under this amendment, a participant may
elect to receive up to 30% of his employer discretionary profit sharing
contribution in cash. If this election is not made, a cash option account is
established and maintained for each participant to which is credited the
cash option distribution and earnings thereon. The remaining 70% of the
employer discretionary profit sharing contribution is allocated to
participant accounts based on their salary deferral savings investment
elections. In addition, vested participants who are eligible for
distributions may elect to defer their distribution and continue investment
in the Plan. During 1999, the discretionary profit sharing contribution
consisted of $406,995 in deferred cash options and $3,533,028 for the
remaining 70% of contributions. During 1998, the discretionary profit
sharing contribution consisted of $378,454 in deferred cash options and
$3,813,579 for the remaining 70% of contributions. During 1997, the
discretionary profit sharing contribution consisted of $527,665 in deferred
cash options and $4,902,766 for the remaining 70% of contributions. The Plan
allows participants who attain age 70-1/2 the election to have life
expectancies recalculated.
Participant Accounts - Each participant's account reflects the participant's
contributions and withdrawals, as applicable, and allocations of (a) the
Company's contributions and (b) plan earnings. Allocations are based on
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<PAGE>
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Contributions - Participants may elect to contribute any whole percentage up
to 10% of their compensation on a tax deferred basis. Upon enrollment in the
Plan, a participant may direct his or her contributions, in increments of
10%, to any of nine fund options. Participants may change or transfer their
investment options without restriction. For each plan year, the Company may
make a matching contribution equal to 50% of the first 4% of compensation
that is contributed by each participant through salary reduction
contributions. The Company may increase its matching contribution for any
plan year in a consistent and non-discriminatory manner. In addition, for
each plan year, the Company may make a discretionary cash contribution to
the Plan in such amount as the Board of Directors will determine.
The Company matching contributions are non-participant directed in that they
are automatically contributed into the CommScope Stock Fund. Prior to the
Distribution on July 28, 1997 (see Note 3), the nonparticipant-directed
Company matching contributions were made to the General Instrument Common
Stock Fund ("GI Stock Fund"). The Company discretionary profit sharing
contributions, including cash option distributions, are allocated to any of
the nine participant fund options, as directed by the participants.
Two additional participant-directed funds, General Instrument Corporation
Stock Fund ("General Instrument Stock Fund") and General Semiconductor, Inc.
Stock Fund ("General Semiconductor Stock Fund"), held participant
investments under the Plan at December 31, 1998. As described more fully in
Note 3, the Company liquidated the assets of these two funds shortly after
December 31, 1998. Collectively, the CommScope Stock Fund, GI Stock Fund,
General Instrument Stock Fund and General Semiconductor Stock Fund are
referred to as the "Company Stock Funds".
Vesting - Participants are immediately vested in their contributions, cash
option distributions and related earnings. Participants become fully vested
in the Company's discretionary profit sharing contributions and related
earnings after the completion of five years of continuous employment with
the Company, involuntary termination, age 65, permanent disability, at death
or at the liquidation or dissolution of the Company. If a participant
terminates his employment with the Company for reasons other than normal
retirement, permanent disability or death, his "vested interest" in the
Company's discretionary contribution will be determined by a savings plan
committee. If a participant terminates employment before he has a vested
interest in his account, the amount of the Company's discretionary
contribution which is not fully vested is forfeited by the participant and
is used to reduce future matching and discretionary Company contributions.
Loans to Participants - Participants can obtain loans for up to the lesser
of $50,000 or 50% of their vested account balance. The interest rate charged
on these loans is prime rate plus one percent. The participant is required
to repay the loan in monthly installments and can elect a one to five year
repayment plan (fifteen years for the purchase of a primary residence).
Payment of Benefits - Withdrawals from a participant's account are permitted
upon termination, death, disability or financial hardship, as defined by the
Plan. Distributions are paid in a single sum in cash or in cash plus that
number of whole shares allocated to the participant's accounts in the
CommScope common stock fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared using the accrual method of accounting.
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<PAGE>
Investment Valuation and Income Recognition - The Plan's investments are
stated at fair value. Shares of registered investment companies are valued
at quoted market prices which represent the fair value of shares held by the
Plan at year end. Units of the Vanguard Retirement Savings Trust are valued
at fair value at year end, which approximates contract value. Guaranteed
investment contracts held by the Vanguard Retirement Savings Trust are
benefit responsive, providing a guarantee by the issuer to pay principal
plus accrued interest in response to benefit-related requests for payment.
The Company Stock Funds are valued at year-end unit closing price (comprised
of year-end market price for shares held by the fund plus the value of money
market reserves). The loans to participants are valued at cost plus accrued
interest which approximates fair value.
Purchases and sales of fund investments are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date. Capital gain distributions are included in dividend
income.
Transfers from Other Plans - Transfers from other plans represent rollovers
recorded when new employees who elect enrollment in this Plan transfer
account balances from other plans.
Payments of Benefits - Benefits are recorded when paid.
Expenses of the Plan - All administrative expenses of the Plan are paid by
the Company.
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,
liabilities and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Reclassifications - The Plan has adopted AICPA Statement of Position 99-3,
Accounting for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters. As a result, the 1998 and 1997
financial statements have been revised to eliminate certain by-fund
disclosures. In addition, certain prior year amounts have been reclassified
to conform to the 1999 presentation.
3. CHANGES TO PLAN FUNDS RESULTING FROM CHANGES IN THE PLAN SPONSOR'S
CORPORATE STRUCTURE
Prior to July 28, 1997, the Company was an indirect wholly owned subsidiary
of General Instrument Corporation ("GI"), a company with publicly traded
common stock listed on the New York Stock Exchange. Through a series of
transactions that was consummated on July 28, 1997 (the "Distribution
Date"), GI distributed to stockholders of record all of the outstanding
shares of common stock of its wholly owned subsidiaries, CommScope and
NextLevel Systems, Inc. ("NextLevel Systems"), in a transaction structured
as a tax-free spin-off (the "Distribution"). GI retained no ownership
interest in either CommScope or NextLevel Systems. Following the
Distribution, GI was renamed General Semiconductor.
Effective February 2, 1998, NextLevel Systems changed its name to General
Instrument Corporation ("General Instrument"). Subsequent to the
Distribution, each of the companies has publicly traded common stock listed
on the New York Stock Exchange.
As a result of the Distribution, all Plan investments in the GI Stock Fund
at the Distribution Date were sold and reinvested in appropriate
proportionate amounts of the CommScope Stock Fund, General Instrument Stock
Fund and General Semiconductor Stock Fund.
- 6 -
<PAGE>
Subsequent to the Distribution Date, no employee or employer contributions
could be directed to the General Instrument Stock Fund or the General
Semiconductor Stock Fund under the Plan. Effective as of December 31, 1998,
the Company discontinued both of these plans and liquidated their assets
shortly thereafter. The liquidated assets were allocated to other funds
within the Plan as designated by the affected participants
4. TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Company by a
letter dated August 9, 1996, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC").
The Plan has been amended since receiving the determination letter. However,
the Plan's administrator and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
5. PLAN TERMINATION
Although it has not expressed any intent 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 of ERISA. In the event of plan
termination, participants will become 100 percent vested in their accounts.
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by an affiliate
of Vanguard Fiduciary Trust Company ("Vanguard"). Vanguard is the trustee as
defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions which are exempt from the prohibited
transactions rules.
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<PAGE>
7. INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets:
<TABLE>
<CAPTION>
December 31,
-------------------------
1999 1998
----------- -----------
<S> <C> <C>
Vanguard Wellington Fund, 820,080 and 820,240 shares,
respectively $22,929,424 $24,074,050
VMMR - Federal Portfolio, 17,859,505 and 15,997,326
shares, respectively 17,859,505 15,997,327
Vanguard Index - 500 Portfolio, 221,193 and 217,432
shares, respectively 29,934,010 24,776,522
Vanguard U.S. Growth, 160,307 and 127,381 shares,
respectively 6,978,168 4,775,503
Vanguard Retirement Savings Trust, 6,929,130 and
4,384,840 shares, respectively 6,929,130 4,384,840
CommScope Stock Fund, 670,432 and 535,310 shares,
respectively * 27,026,809 8,999,902
Loans to participants 6,929,017 6,214,530
* Nonparticipant-directed.
</TABLE>
During 1999, 1998 and 1997, the Plan's investments, including investments
bought and sold, as well as held during the year, appreciated in value by
$18,433,174, $10,291,667 and $7,450,479, respectively, as follows:
Years Ended December 31,
---------------------------------------
1999 1998 1997
----------- ----------- -----------
Mutual Funds $ 4,884,016 $ 5,889,876 $ 6,596,994
Company Stock Funds 13,549,158 4,401,791 853,485
----------- ----------- -----------
$18,433,174 $10,291,667 $ 7,450,479
=========== =========== ===========
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<PAGE>
8. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments is
as follows:
December 31,
---------------------------
1999 1998
----------- -----------
Net Assets:
CommScope Stock Fund $27,026,809 $8,999,902
=========== ===========
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------
1999 1998 1997 *
------------ ------------ ------------
<S> <C> <C> <C>
Changes in Net Assets:
Employer's contributions $ 1,454,086 $ 1,364,045 $ 1,415,864
Participants' contributions 394,769 281,013 234,443
Transfers from other plans 64,654 25,032 61,728
Investment Income 13,445,325 1,807,494 1,367,514
Benefits paid to participants (1,102,189) (464,799) (238,610)
Transfers to/from participant-
directed investments 3,770,262 2,678,640 (4,556,289)
------------ ------------ ------------
$ 18,026,907 $ 5,691,425 $ (1,715,350)
============ ============ ============
</TABLE>
* Includes activity of the GI Stock Fund, which was discontinued and whose
assets were transferred to other funds effective as of the Distribution
Date, July 28, 1997 (see note 3 for further explanation).
*********
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<PAGE>
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT YEAR END
DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Identity of Shares/
Issuer Description Units Cost Fair Value
-------------- ------------------------------------ ----------- ------------ ------------
<S> <C> <C> <C>
* Vanguard Vanguard Wellington Fund 820,080 $ 21,067,762 $ 22,929,424
* Vanguard VMMR-Federal Portfolio 17,859,505 17,859,505 17,859,505
* Vanguard VFIF-GNMA Portfolio 360,246 3,686,278 3,552,025
* Vanguard Vanguard Index-500 Portfolio 221,193 16,695,551 29,934,010
* Vanguard Vanguard STAR Portfolio 60,367 1,048,938 1,099,283
* Vanguard Vanguard U.S. Growth Portfolio 160,307 5,346,599 6,978,168
* Vanguard Vanguard International Growth
Portfolio 56,945 1,024,694 1,280,702
------------ ------------
Total 66,729,327 83,633,117
* Vanguard Vanguard Retirement Savings 6,929,130 6,929,130 6,929,130
Trust
* CommScope CommScope Stock Fund 670,432 15,550,478 27,026,809
* Participants Loans to participants, with interest
rates ranging from 7% to 11% -- 6,929,017 6,929,017
------------ ------------
TOTAL INVESTMENTS $ 96,137,952 $124,518,073
============ ============
</TABLE>
* Denotes party-in-interest.
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<PAGE>
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES PROFIT SHARING AND SAVINGS PLAN
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS (5%)
YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current
Value of
Identity of Asset on
Party Description of Purchase Selling Cost of Transaction
Involved Asset Price Price Asset Date Net Gain
--------- --------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CommScope CommScope
Stock Fund
185 Purchases $18,602,117 -- $18,602,117 $18,602,117 --
186 Sales -- $14,010,503 $10,400,025 $14,010,503 $ 3,610,478
</TABLE>
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<PAGE>
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 on its behalf by the undersigned
hereunto duly authorized.
CommScope, Inc. of North Carolina Employees Profit
Sharing and Savings Plan
June 21, 2000 /s/ Jearld L. Leonhardt
------------- -----------------------
Date Jearld L. Leonhardt
Executive Vice President, Finance and
Administration signing both in his capacity as
Executive Vice President on behalf of the
Registrant and as Chief Financial Officer of the
Registrant and as a Member of the CommScope, Inc.
of North Carolina Employees Profit Sharing and
Savings Plan Investment Committee
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