<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
=======================
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7,
1996].
For the fiscal year ended December 31, 1997
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from _________________ to
__________________
Commission file number 1-6016
------
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ALLEN TELECOM INC.
25101 Chagrin Boulevard, Suite 350
Beachwood, Ohio 44122
<PAGE> 2
ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
<TABLE>
<S> <C>
Report of Independent Accountants 3
Financial Statements:
Statements of Net Assets Available for
Plan Benefits - December 31, 1997
and 1996 4
Statements of Changes in Net Assets Available
for Benefits for the years ended
December 31, 1997 and 1996 5 - 10
Notes to Financial Statements 11 - 17
Supplemental Schedules:
Assets Held for Investment Purposes
at December 31, 1997 18
5% Reportable Transactions for the
year ended December 31, 1997 19
Signatures 20
Exhibit Index 21
</TABLE>
2
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
TO THE EMPLOYEE BEFORE-TAX SAVINGS PLAN COMMITTEE
AND THE PARTICIPANTS IN THE ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN:
We have audited the accompanying Statements of Net Assets Available for Benefits
of the ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN as of December 31,
1997 and 1996, and the related Statements of Changes in Net Assets Available for
Benefits for each of the two years in the period ended December 31, 1997. 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 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the ALLEN
TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN as of December 31, 1997 and 1996
and the changes in net assets available for benefits for each of the two years
in the period ended December 31, 1997 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying index are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information in the Statements of Changes of Net Assets Available
for Benefits and Note 3 to the financial statements is presented for purposes of
additional analysis rather than to present the changes in net assets available
for benefits of each fund. The supplemental schedules and Fund Information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
COOPERS & LYBRAND L.L.P.
CLEVELAND, OHIO
JUNE 3, 1998
3
<PAGE> 4
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
-----------------------------------------------
<TABLE>
<CAPTION>
December 31,
------------
1997 1996
---- ----
<S> <C> <C>
ASSETS:
Investments, at market value
(Note 3) $26,659,897 $21,640,376
Loans receivable from participants
(Note 6) 1,353,194 1,153,673
----------- -----------
Total Investments 28,013,091 22,794,049
Contribution receivable (Note 4):
Participants 251,062 251,502
Company 484,250 453,518
Other receivables 48,624 39,170
Cash and equivalents 29,786 158,453
----------- -----------
Total Assets 28,826,812 23,696,692
LIABILITIES:
Accrued expenses and other liabilities 61,244 44,735
----------- -----------
Net Assets available for benefits $28,765,569 $23,651,957
=========== ===========
</TABLE>
The Notes are an integral part of these statements.
4
<PAGE> 5
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
----------------------------------------------
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity Allen Hartford
Managed Equity - Retirement Common Fixed
Income Income Growth Stock Income Sub-Total
Portfolio Fund Fund Fund Fund (To Page 7)
--------- ---- ---- ---- ---- -----------
1996
- - ----
<S> <C> <C> <C> <C> <C> <C>
Net assets, available for $ 244 $ 3,347,142 $ 3,114,604 $ 7,479,614 $ 3,254,097 $ 17,195,701
benefits, January 1, 1996
Contributions (Note 4) - 707,140 821,383 1,776,148 - 3,304,671
Investment income:
Dividends - 239,412 422,906 477 22,034 684,829
Interest - 14,978 13,009 30,632 - 58,619
Net appreciation (deprecia-
tion) in the fair value of
investments - 363,065 (198,425) 797,320 - 961,960
Withdrawals and distributions
(Note 5) - (917,384) (683,386) (481,120) (69,402) (2,151,292)
Administrative expenses - (1,528) (1,317) (1,952) (417) (5,214)
Interfund Activity: - -
Interfund transfers (244) 493,906 252,893 (579,154) (3,182,410) (3,015,009)
Interfund loans - (60,723) (66,666) 66,293 (23,902) (84,998)
------------ ------------ ------------ ------------ ------------ ------------
Net assets, available for
benefits, December 31, 1996 $ - $ 4,186,008 $ 3,675,001 $ 9,088,258 $ - $ 16,949,267
============ ============ ============ ============ ============ ============
</TABLE>
The Notes are an integral part of these statements.
5
<PAGE> 6
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED),
----------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
----------------------------------------------
<TABLE>
<CAPTION>
Fidelity Fidelity Allen
Equity - Retirement Common
Income Growth Stock Sub-Total
Fund Fund Fund (To Page 8)
---- ---- ---- -----------
1997
- - ----
<S> <C> <C> <C> <C>
Net assets available for $ 4,186,008 $ 3,675,001 $ 9,088,258 $ 16,949,267
benefits, January 1, 1997
Contributions (Note 4) 727,628 631,223 1,846,162 3,205,013
Investment income:
Dividends 297,131 688,910 1,140 987,181
Interest (1) - 1 -
Other income 20,282 13,460 28,378 62,120
Net appreciation (deprecia-
tion) in the fair value of
investments 926,059 (49,919) (477,000) 399,140
Withdrawals and distributions
(Note 5) (303,026) (209,588) (560,800) (1,073,414)
Administrative expenses (3,280) (2,752) (23,176)
(29,208)
Interfund Activity:
Interfund transfers (322,880) (621,485) (900,342) (1,844,707)
Interfund loans (29,152) (51,353) (39,007) (119,512)
------------ ------------ ------------ ------------
Net assets available for
benefits, December 31, 1997 $ 5,498,769 $ 4,073,497 $ 8,963,614 $ 18,535,880
============ ============ ============ ============
</TABLE>
The Notes are an integral part of these statements.
6
<PAGE> 7
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED),
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
<TABLE>
<CAPTION>
Carryforward TransPro Morley Participant Janus
Total Common Stock Stable Value Loan Worldwide Sub-Total
(From Page 5) Fund Fund Account Fund (To Page 9)
------------- ---- ---- ------- ---- -----------
1996
- - ----
<S> <C> <C> <C> <C> <C> <C>
Net assets available for
benefits, January 1, 1996 $ 17,195,701 $ 163,794 $ 2,677,219 $ 952,512 $ - $ 20,989,226
Contributions (Note 4) 3,304,671 - 481,396 - 8,261 3,794,328
Investment income:
Dividends 684,829 2,885 - - - 687,714
Interest 58,619 13 30,452 - - 89,084
Net appreciation (deprecia-
tion) in the fair value of
investments 961,960 (17,731) 250,167 - - 1,194,396
Withdrawals and distributions
(Note 5) (2,151,292) (133,638) (1,335,665) 590,194 - (3,030,401)
Administrative expenses (5,214) - (83,395) - - (88,609)
Interfund Activity:
Interfund transfers (3,015,009) (15,323) 3,772,966 (742,667) - (33)
Interfund loans (84,998) - (237,078) 322,076 -
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for
benefits, December 31, 1996 $ 16,949,267 $ - $ 5,556,062 $ 1,122,115 $ 8,261 $ 23,635,705
============ ============ ============ ============ ============ ============
</TABLE>
The Notes are an integral part of these statements.
7
<PAGE> 8
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED),
----------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
----------------------------------------------
<TABLE>
<CAPTION>
Carryforward Morley Participant Janus
Total Stable Value Loan Worldwide Sub-Total
(From Page 6) Fund Account Fund (To Page 10)
------------- ---- ------- ---- ------------
1997
- - ----
<S> <C> <C> <C> <C> <C>
Net assets available for $ 16,949,267 $ 5,556,062 $ 1,122,115 $ 8,261 $ 23,635,705
benefits, January 1, 1997
Contributions (Note 4) 3,205,013 650,703 - 260,824 4,116,540
Investment income:
Dividends 987,181 - - 63,848 1,051,029
Interest - 159 - - 159
Other income 62,120 33,572 - 2,714 98,406
Net appreciation (deprecia-
tion) in the fair value of
investments 399,140 311,768 - 6,596 717,504
Withdrawals and distributions
(Note 5) (1,073,414) (313,900) (62,229) (39,143) (1,488,686)
Administrative expenses (29,208) (82,565) - (487) (112,260)
Interfund Activity:
Interfund transfers (1,844,707) (440,546) (2,288) 675,763 (1,611,778)
Interfund loans (119,512) (126,898) 273,020 (5,892) 20,718
------------ ------------ ------------ ------------ ------------
Net assets available for
benefits December 31, 1997 $ 18,535,880 $ 5,588,355 $ 1,330,618 $ 972,484 $ 26,427,337
============ ============ ============ ============ ============
</TABLE>
The Notes are an integral part of these statements.
8
<PAGE> 9
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED),
----------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
----------------------------------------------
<TABLE>
<CAPTION>
Invesco
Carryforward Schwab Strategic
Total S&P 500 Index Oakmark Technology
1996 (From Page 7) Fund Fund Fund Total
- - ---- ------------ -------- -------- ------- ------------
<S> <C> <C> <C> <C> <C>
Net assets available for $ 20,989,226 $ - $ - $ - $ 20,989,226
benefits, January 1, 1996
Contributions (Note 4) 3,794,328 2,455 7,162 6,588 3,810,533
Investment income:
Dividends 687,714 - - - 687,714
Interest 89,084 - 14 - 89,098
Net appreciation (deprecia-
tion) in the fair value of
investments 1,194,396 - - - 1,194,396
Withdrawals and distributions
(Note 5) (3,030,401) - - - (3,030,401)
Administrative expenses (88,609) - - - (88,609)
Interfund Activity:
Interfund transfers (33) - 33 - -
Interfund loans - - -
------------ -------- -------- ------- ------------
Net assets available for
benefits, December 31, 1996 $ 23,635,705 $ 2,455 $ 7,209 $ 6,588 $ 23,651,957
============ ======== ======== ======= ============
</TABLE>
The Notes are an integral part of these statements.
9
<PAGE> 10
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED),
----------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
----------------------------------------------
<TABLE>
<CAPTION>
Invesco
Carryforward Schwab Strategic
Total S&P 500 Index Oakmark Technology
1997 (From Page 8) Fund Fund Fund Total
- - ---- ------------ ----------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Net assets available for $ 23,635,705 $ 2,455 $ 7,209 $ 6,588 $ 23,651,957
benefits, January 1, 1997
Contributions (Note 4) 4,116,540 199,931 231,802 156,079 4,704,352
Investment income:
Dividends 1,051,029 9,002 38,992 78,964 1,177,987
Interest 159 - - - 159
Other income 98,406 1,532 1,360 1,354 102,652
Net appreciation (deprecia-
tion) in the fair value of
investments 717,504 66,337 56,489 (71,908) 768,422
Withdrawals and distributions
(Note 5) (1,488,686) (3,497) (19,080) (15,954) (1,527,217)
Administrative expenses (112,260) (221) (102) (160) (112,743)
Interfund Activity:
Interfund transfers (1,611,778) 827,181 501,677 282,920 -
Interfund loans 20,718 (3,079) (8,080) (9,559) -
------------ ----------- --------- --------- ------------
Net assets available for
benefits, December 31, 1997 $ 26,427,337 $ 1,099,641 $ 810,267 $ 428,324 $ 28,765,569
============ =========== ========= ========= ============
</TABLE>
The Notes are an integral part of these statements.
10
<PAGE> 11
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. OPERATIONS
----------
Effective February 28, 1997, the Allen Group Inc. Employee Before-Tax
Savings Plan was renamed the Allen Telecom Inc. Employee Before-Tax Savings Plan
(the "Plan"). This change is consistent with The Allen Group Inc. company name
change to Allen Telecom Inc. (the "Company"), which was also effective February
28, 1997.
The Plan is designed to offer certain employees of the Company, who
choose to participate, a form of savings that allows for a deferral of current
income taxes while saving for retirement. The Plan is administered by the Allen
Telecom Inc. Employee Before-Tax Savings Plan Committee (the "Committee") which
is comprised of management personnel and officers of the Company.
2. SUMMARY OF ACCOUNTING POLICIES
------------------------------
Participants' contributions to the Plan are invested by the Trustee in
the investment options made available by the Committee ("Investment Funds"), as
directed by participants. The Committee may, at its sole discretion, add or
delete funds in which participant contributions may be invested. The Company's
contributions to the Plan, if any, are invested by the Trustee exclusively in
the Allen Common Stock Fund (see Note 4). In 1997, Investment Fund options
included the Allen Common Stock Fund, along with selected registered investment
entities (i.e., mutual funds) including Fidelity Equity-Income Fund, Fidelity
Retirement Growth Fund, Morley Stable Value Fund, Janus Worldwide Fund, Schwab
S&P 500 Index Fund, Oakmark Fund, and Invesco Strategic Technology Fund. During
1996, there was a conversion of plan assets in the Fidelity Managed Income
Portfolio to the Morley Stable Value Fund. In addition, in 1996, the Hartford
Fixed Income Fund was liquidated with the applicable transaction fees paid by
the Company.
Shares in the Allen Common Stock Fund are valued at the last sale price
of the common stock on the New York Stock Exchange Composite Tape on the last
business day of the year. Investments in the registered investment entities are
valued at their respective net asset value per unit as quoted by the National
Association of Security Dealers on the last business day of the year.
The Plan uses the accrual method for recognizing contributions and
investment income. Dividends are accrued on the ex-dividend date. Withdrawals
and distributions are valued using current market prices at the date withdrawals
and distributions occur.
11
<PAGE> 12
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED),
-------------------------------
The Plan presents in the Statements of Changes in Net Assets Available
for Benefits, the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
The intention of the Company is to continue the Plan indefinitely. The
Plan may be amended or terminated at any time by the Company.
Any amounts not vested and not eligible for withdrawal at termination
of a participant's employment ("Forfeiture Funds") are available to the Plan to
pay administrative costs and reduce Company contributions. To the extent that
Forfeiture Funds are not available, administrative expenses are paid by the
Company, at the Company's discretion. Prior to 1997, Forfeiture Funds were held
and administrative expenses were paid from all Investment Funds. In 1997,
Forfeiture Funds were transferred from the respective Investment Funds and were
accumulated in the Morley Stable Value Fund. Accordingly, some administrative
expenses paid by the Plan in 1996 and in 1997 were distributed out of such
Forfeiture Funds accumulated in the Morley Stable Value Fund.
Brokerage commissions and other expenses relating to the sale of the
Investment Funds for the account of any participant in connection with a
withdrawal or distribution from the Plan are deducted from the proceeds of the
sale.
3. INVESTMENTS
-----------
The market values at December 31, 1997 and 1996 for the respective
Investment Funds were as follows:
<TABLE>
<CAPTION>
December 31,
------------
1997 1996
---- ----
<S> <C> <C>
Fidelity Equity-Income Fund $ 5,389,846 $ 4,035,368
Fidelity Retirement Growth Fund 3,985,498 3,508,200
Allen Common Stock Fund 8,661,444 8,684,083
Morley Stable Value Fund 5,463,765 5,412,725
Janus Worldwide Fund 925,785 -
Schwab S&P 500 Index Fund 1,062,589 -
Oakmark Fund 768,971 -
Invesco Strategic Technology Fund 401,999 -
----------- -----------
$26,659,897 $21,640,376
=========== ===========
</TABLE>
12
<PAGE> 13
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
4. CONTRIBUTIONS
-------------
Participation in the Plan is voluntary, and all employees (full-time
and part-time, salaried, hourly and union employees (but only to the extent
permitted by a collective bargaining agreement)) of the Company and its
subsidiaries in the United States who were employees on October 1, 1985 or who
thereafter have completed the required Eligibility Period may become
participants. A participant may contribute on a before-tax basis any whole
percentage of his or her compensation he or she selects which is not less than
1% or more than 17% of his or her compensation for such month. Participants can
make after-tax contributions of not less than 1% nor more than 12% of his or her
compensation. In any event, a participant's contributions may not, in the
aggregate, exceed 18% of his or her compensation. Compensation includes base
salary, overtime earnings, bonuses (other than bonus payments under the Deferred
Bonus or similar plan) and commissions. In addition, a participant's individual
allowable contributions may be limited by various other government regulations.
Contributions by participants may be made only through periodic payroll
deductions.
In addition to the above, the Plan provides employees from the
Company's Comsearch division ("Comsearch") an annual profit-sharing contribution
to each participant who is employed on the last day of the Plan year an amount
equal to 3% of the participant's Plan year compensation. The profit-sharing
contribution is allocated among the Investment Funds at the participant's
direction. This benefit is in lieu of Comsearch participating in the Company's
defined benefit pension plan.
Unless the Company increases, decreases or suspends its monthly
contributions in accordance with the terms of the Plan, the Company makes a
monthly contribution for each participant equal to 25% of the first 1%, 25% of
the second 1%, and 50% of the third 1%, of compensation contributed by the
participant during such month, up to a maximum Company contribution of $1,200
per year. As soon as practicable after the end of each month, the participants'
and the Company's contributions are forwarded to the Trustee for investment.
Company contributions to the Allen Common Stock Fund were $484,250 and $400,424
for the years ended December 31, 1997 and 1996, respectively. In addition, the
Comsearch profit-sharing contribution, noted above, for the years ended December
31, 1997 and 1996 were $407,365 and $422,234, respectively.
13
<PAGE> 14
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
4. CONTRIBUTIONS (CONTINUED),
-------------
A participant may change Investment Funds as to any future participant
contributions through use of the toll free telephone number or internet access
at any time. Such changes will be effective as soon as practicable after the
Plan is notified. A participant may transfer all or part of the value of his or
her existing Participant Contribution Account (Note 5) between Investment Funds
once per month through use of a toll free telephone number or internet access.
Such transfers will be effective as soon as practicable. The brokerage fees, if
any, of such sales and investments are paid by the individual participant making
the transfer.
Participant contributions to the Plan are invested among the Investment
Funds as directed by participants. Company contributions to the Plan (with the
exception of the Comsearch profit-sharing contributions noted previously) are
invested by the Trustee exclusively in the Allen Common Stock Fund, with the
exception that, to avoid the retention of idle funds, such participant and
Company contributions may be invested in cash equivalent securities for periods
generally not exceeding 30 days. While such contributions are invested in cash
equivalent securities, interest is generally accrued until the contributions are
allocated to the respective Investment Funds.
Participants' before-tax contributions to the Allen Common Stock Fund
and Company matching contributions maybe used by the Trustee to purchase
treasury shares provided by the Company at a price which is 15% below prevailing
market price at the time of purchase. During 1997 and 1996, the Trustee
purchased from the Company 91,358 and 94,839 shares, respectively, of common
stock for the accounts of participants in the Plan. The Trustee purchases shares
of the Company's common stock for transactions other than purchases for
before-tax contributions and Company matching contributions in open market
transactions. The Trustee purchases shares or units of the other Investment
Funds (as directed by the participants) on a national securities exchange at
current market prices. The Company has no control over the times or prices at
which the Trustee makes such purchases and investments or the amounts thereof.
The number of shares or units purchased and credited to the participants account
depends on the prices paid by the Trustee.
14
<PAGE> 15
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
5. VESTING AND WITHDRAWALS
-----------------------
Pursuant to the Plan, investments acquired with the participant's
contributions are segregated in the Participant Contribution Account, and
investments acquired with the Company's contributions are segregated in the
Employer Contribution Account. Investment income paid on the investments in each
of the participant's accounts are automatically reinvested in the respective
Investment Funds to which they relate. Each participant's interest in his or her
Participant Contribution Account and the Company match portion of the Employer
Contribution Account is always fully vested, except for the aforementioned
Comsearch profit-sharing contributions which vest in equal amounts over the
period of three to seven years of credited service. Except for permitted
withdrawals and hardship distributions, the participant's investments are
distributable only when employment terminates.
While employed by the Company or a subsidiary, a participant may
withdraw all or any part of his or her before-tax Participant Contribution
Account and his or her Employer Contribution Account only in cases of financial
hardship or after attaining age 59-1/2. After-tax contributions may be withdrawn
from the Plan once a year in an amount no less than $250. In cases of financial
hardship where a participant requires funds to meet an immediate financial need
and has no other resources reasonably available to meet that need, he or she may
request the Committee to authorize a withdrawal by him or her from his or her
Participant Contribution Account and Employer Contribution Account. The
Committee relies on Internal Revenue Service ("IRS") guidelines to determine if
financial hardship exists and to determine the amount, if any, of the withdrawal
to be made by the participant. In addition, after attaining 59-1/2, a
participant may withdraw all or a portion of his or her Participant and Employer
Contribution accounts for any reason without penalty.
6. PARTICIPANT LOAN ACCOUNT
------------------------
The Plan permits participants to borrow up to 50% of the value of his
or her Investment Funds including Employer Contributions. As more fully
described in the "Loan Rules" of the Plan, participants must meet certain
minimum qualifications to obtain a loan, and loans must be for a minimum of $500
and cannot exceed $50,000. The term of each loan can be for any period of time
up to 60 months as selected by the participant; such loans bear interest at the
prime rate charged by the Company's principal lending banks plus 1% at the time
the loan is made and will carry such interest rate throughout their terms.
Monthly principal and interest repayments (done automatically through payroll
deductions) are credited to the participant's own account and are reinvested in
the Investment Funds in the same manner as the participant's contributions are
invested. A participant may have up to three loans outstanding at any one time.
There is a fixed charge of $50 for second and third loan applications which is
borne by those specific individuals who choose to have more than one loan
outstanding.
15
<PAGE> 16
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
6. PARTICIPANT LOAN ACCOUNT (CONTINUED),
-------------------------
If a loan is declared in default (as defined in the "Loan Rules" of the
Plan), the entire outstanding principal balance will become immediately due and
payable, and if not immediately paid the loan will be canceled and the
outstanding balance will be treated as a distribution or withdrawal from the
Plan depending upon the participant's tax circumstances. Otherwise, the
Committee, at its sole discretion, may take such action it considers appropriate
to collect the unpaid principal and the accrued interest on a defaulted loan.
Such action may include obtaining funds from the net proceeds after the units
or shares in the participant's Investment Fund account are sold.
7. FEDERAL INCOME TAXES
--------------------
The Company received a determination from the IRS on August 15, 1995
that the Plan is a qualified plan under Section 401(a) and 401(k) of the
Internal Revenue Code. Accordingly, the Plan has not been subject to federal
income taxes, and employer and before-tax participant contributions and earnings
of the Plan have not been subject to U.S. income taxes until distributed to the
participants. Early withdrawals or distributions may subject the participant to
certain tax penalties.
The Plan was amended subsequent to receiving the most recent IRS
determination letter; however, the Committee does not believe such amendments
affect the Plan's tax status.
8. TRANSFER OF ASSETS
------------------
On September 8, 1995, the Company's Board of Directors declared a
spin-off distribution of 100% of the common shares of a newly formed wholly
owned subsidiary, TransPro, Inc. ("TransPro") to the Company's common
shareholders of record at the close of business on September 29, 1995 (the
"Spin-off"). Following the Spin-off, TransPro became an independent, publicly
traded corporation. As a result, the Plan was amended such that any participant
who transferred to TransPro as a result of the Spin-Off, ceased to be a
participant upon transfer of the related Plan assets to the successor Plan
implemented by TransPro. Net assets and liabilities of approximately $1,623,000
(including 14,165 shares of TransPro common stock) were transferred to the
successor Plan in 1996. Accordingly, this amount is included in withdrawals and
distributions in the 1996 Statement of Changes in Net Assets Available for
Benefits.
16
<PAGE> 17
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
8. TRANSFER OF ASSETS (CONTINUED)
------------------
In September 1996, the Company acquired 100% of the ownership of Signal
Science, Incorporated ("SSI"). The Plan was amended to allow employees of SSI,
who have met the eligibility requirements of the Plan, to become participants in
the Plan effective October 1, 1996. Accordingly, investments of $284,606 were
transferred from The Signal Science, Inc. Salary Deferral Plan to the Plan's
Investment Funds, as directed by SSI participants, on February 10, 1997.
9. RECONCILIATION TO FORM 5500
---------------------------
At December 31, 1997 and 1996, the Fund received applications for
withdrawals in the amount of $0 and $31,576 respectively, which was not paid at
year-end. No payable has been recorded in the Statements of Net Assets Available
for Benefits at year-end. However, the Department of Labor requires Form 5500 to
include these pending withdrawals as liabilities.
The schedule of assets held for investment purposes (see page 18)
reflects the current value of participant loans net of the other receivable
value of $40,600.
17
<PAGE> 18
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
SCHEDULE OF ASSETS OF HELD FOR INVESTMENT PURPOSES - SEE FORM 5500, ITEM 27a
----------------------------------------------------------------------------
DECEMBER 31, 1997
-----------------
<TABLE>
<CAPTION>
Description of Investment
-------------------------
including Maturity Date, Rate
-----------------------------
Identity of Issue, Borrower of Interest, Collateral, Par Current
--------------------------- ---------------------------- -------
Lessor of Similar Party or Maturity Value Cost Value
----------------------- ----------------- ---- -----
<S> <C> <C> <C>
PARTICIPANT LOANS 7%-10% 5 YEAR MAX $ N/A $1,312,535
FIDELITY EQUITY INCOME MUTUAL FUND 4,176,461 5,389,846
SCHWAB S&P 500 MUTUAL FUND 1,014,048 1,062,589
OAKMARK MUTUAL FUND 731,438 768,971
FIDELITY RETIREMENT GROWTH MUTUAL FUND 4,267,571 3,985,498
JANUS WORLDWIDE MUTUAL FUND 951,422 925,785
INVESCO STRATEGIC TECH MUTUAL FUND 495,965 401,999
ALLEN TELECOM INC. COMMON STOCK 8,044,808 8,654,299
MORLEY CAPITAL MANAGEMENT COMMON/COLLECTIVE TRUST 5,384,387 5,463,765
U.S. TREASURY MONEY MARKET 7,145 7,145
</TABLE>
18
<PAGE> 19
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
SCHEDULE OF REPORTABLE TRANSACTIONS - SEE FORM 5500, ITEM 27d
-------------------------------------------------------------
DECEMBER 31, 1997
-----------------
<TABLE>
<CAPTION>
Expense
-------
Description of Asset Incurred
- - -------------------- --------
(Include Interest Rate and Purchase Selling With Current Value of Asset
- - -------------------------- -------- ------- ---- ----------------------
Maturity in Case of a Loan) Price Price Transaction Cost of Asset on Transaction Date Net Gain or (loss)
- - --------------------------- ----- ----- ----------- ------------- ------------------- ------------------
<S> <S> <C> <C> <C> <C> <C>
ALLEN TELECOM STOCK $4,592,877 $10,438 $3,162,075 $4,592,877 $1,430,802
ALLEN TELECOM STOCK $3,828,431 8,158 3,828,431 3,828,431 0
FIDELITY EQUITY INCOME 1,470,325 1,278,364 1,470,325 191,961
FIDELITY EQUITY INCOME 1,852,847 1,852,847 1,852,847 0
FIDELITY RETIREMENT
GROWTH 1,375,818 1,318,576 1,375,818 57,242
FIDELITY RETIREMENT
GROWTH 1,893,825 1,893,825 1,893,825 0
MORLEY STABLE VALUE 9,492,695 9,034,804 9,492,695 457,891
MORELY STABLE VALUE 9,232,001 9,232,001 9,232,001 0
OAKMARK 283,841 270,679 283,841 13,162
OAKMARK 996,323 996,323 996,323 0
SCHWAB S&P 500 538,075 534,259 538,075 3,816
SCHWAB S&P 500 1,534,327 1,534,327 1,534,327 0
JANUS WORLDWIDE 573,676 543,445 573,676 30,231
JANUS WORLDWIDE 1,496,288 1,496,288 1,496,288 0
INVESCO STRATEGIC TECH 386,694 375,976 386,694 10,718
INVESCO STRATEGIC TECH 860,600 860,600 860,600 0
</TABLE>
19
<PAGE> 20
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 report to be signed on its behalf by the undersigned hereunto
duly authorized.
NAME OF PLAN: ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
BY: ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN COMMITTEE
Date: June 17, 1998 By: /s/ Robert A. Youdelman
------------ -----------------------------------
Robert A. Youdelman
Committee Member
20
<PAGE> 21
EXHIBIT INDEX
-------------
ALLEN TELECOM INC.
------------------
Exhibit Number
- - --------------
(23) Consent of Coopers and Lybrand L.L.P. dated June 17, 1998.
21
<PAGE> 1
EXHIBIT 23
----------
CONSENT OF INDEPENDENT ACCOUNTANTS
ALLEN TELECOM INC.
Re: Allen Telecom Inc. Registration Statements Nos. 33-53487, 2-99919
We consent to the incorporation by reference in the above Registration
Statements of our report dated June 3, 1998, to the Board of Directors of Allen
Telecom Inc. with respect to the financial statements of the Allen Telecom Inc.
Employee Before-Tax Savings Plan at December 31, 1997 and 1996, and for the year
ended December 31, 1997 and 1996, which is included in this Annual Report on
Form 11-K.
COOPERS & LYBRAND L.L.P.
CLEVELAND, OHIO
JUNE 17, 1998
