<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, 1998
-----------------
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
Report of Independent Accountants 3
Financial Statements:
Statements of Net Assets Available for
Benefits - December 31, 1998
and 1997 4
Statements of Changes in Net Assets Available
for Benefits for the years ended
December 31, 1998 and 1997 5 - 10
Notes to Financial Statements 11 - 17
Supplemental Schedules:
Assets Held for Investment Purposes
at December 31, 1998 18
5% Reportable Transactions for the
year ended December 31, 1998 19
Signatures 20
Exhibit Index 21
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:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Allen Telecom Inc. Employee Before-Tax Savings Plan (the "Plan") at
December 31, 1998 and 1997, and the changes in net assets available for benefits
for each of the two years in the period ended December 31, 1998 in conformity
with generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions 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 net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. These supplemental
schedules and fund information are the responsibility of the Plan's management.
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.
/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio
June 10, 1999
3
<PAGE> 4
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
-----------------------------------------------
<TABLE>
<CAPTION>
December 31,
------------
1998 1997
---- ----
<S> <C> <C>
ASSETS:
Investments, at market value
(Note 3) $25,266,634 $26,659,897
Loans receivable from participants
(Note 6) 1,360,035 1,353,194
----------- -----------
Total Investments 26,626,669 28,013,091
Contribution receivable (Note 4):
Participants 210,629 251,062
Company 375,340 484,250
Other receivables 53,096 48,624
Cash and equivalents 2,131 29,786
----------- -----------
Total Assets 27,267,865 28,826,813
LIABILITIES:
Accrued expenses and other liabilities 70,843 61,244
----------- -----------
Net Assets available for benefits $27,197,022 $28,765,569
=========== ===========
</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, 1997 AND 1998
<TABLE>
<CAPTION>
Fidelity Fidelity Allen
Equity - Retirement Common
Income Growth Stock Sub-Total
Fund Fund Fund (To Page 7)
---- ---- ---- -----------
<S> <C> <C> <C> <C>
1997
- ----
Net assets, available for
benefits, January 1, 1997 $ 4,186,008 $ 3,675,001 $ 9,088,258 $ 16,949,267
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.
5
<PAGE> 6
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED),
-----------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
----------------------------------------------
<TABLE>
<CAPTION>
Fidelity Fidelity Allen
Equity - Retirement Common
Income Growth Stock Sub-Total
Fund Fund Fund (To Page 8)
---- ---- ---- -----------
<S> <C> <C> <C> <C>
1998
- ----
Net assets available for
benefits, January 1, 1998 $ 5,498,769 $ 4,073,497 $ 8,963,614 $ 18,535,880
Contributions (Note 4) 598,013 431,892 1,770,196 2,800,101
Investment income:
Dividends 316,323 480,435 8,632 805,390
Interest -- -- 417 417
Other income 20,736 15,898 31,532 68,166
Net appreciation (deprecia-
tion) in the fair value of
investments 332,192 853,437 (6,265,010) (5,079,381)
Withdrawals and distributions
(Note 5) (597,948) (559,615) (391,138) (1,548,701)
Administrative expenses (4,703) (3,947) (6,216) (14,866)
Interfund Activity:
Interfund transfers (517,594) (360,268) 992,531 114,669
Interfund loans (5,767) (4,290) 44,990 34,933
------------ ------------ ------------ ------------
Net assets available for
benefits, December 31, 1998 $ 5,640,021 $ 4,927,039 $ 5,149,548 $ 15,716,608
============ ============ ============ ============
</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, 1997 AND 1998
----------------------------------------------
<TABLE>
<CAPTION>
Carryforward Morley Participant Janus
Total Stable Value Loan Worldwide Sub-Total
(From Page 5) Fund Account Fund (To Page 9)
------------- ---- ------- ---- -----------
<S> <C> <C> <C> <C> <C>
1997
- ----
Net assets available for
benefits, January 1, 1997 $ 16,949,267 $ 5,566,062 $ 1,122,115 $ 8,261 $ 23,635,705
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.
7
<PAGE> 8
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED),
-----------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
----------------------------------------------
<TABLE>
<CAPTION>
Carryforward Morley Participant Janus
Total Stable Value Loan Worldwide Sub-Total
(From Page 6) Fund Account Fund (To Page 10)
------------- ---- ------- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
1998
- ----
Net assets available for
benefits, January 1, 1998 $ 18,535,880 $ 5,588,355 $ 1,330,618 $ 972,484 $ 26,427,337
Contributions (Note 4) 2,800,101 497,099 - 301,802 3,599,002
Investment income:
Dividends 805,390 - - 5,780 811,170
Interest 417 - - - 417
Other income 68,166 34,786 - 3,459 106,411
Net appreciation (deprecia-
tion) in the fair value of
investments (5,079,381) 306,765 - 219,524 (4,553,092)
Withdrawals and distributions
(Note 5) (1,548,701) (577,323) (75,998) (126,845) (2,328,867)
Administrative expenses (14,866) (103,127) - (556) (118,549)
Interfund Activity:
Interfund transfers 114,669 (101,959) (2,834) (29,640) (19,764)
Interfund loans 34,933 (83,268) 64,755 4,078 20,498
----------- ---------- ---------- ---------- -----------
Net assets available for
benefits, December 31, 1998 $ 15,716,608 $ 5,561,328 $ 1,316,541 $ 1,350,086 $ 23,944,563
=========== ========== ========== ========== ===========
</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 BENEFITS (CONTINUED),
-----------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
----------------------------------------------
<TABLE>
<CAPTION>
Invesco
Carryforward Schwab Strategic
Total S&P 500 Index Oakmark Technology
(From Page 7) Fund Fund Fund Total
------------- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
1997
- ----
Net assets available for
benefits, January 1, 1997 23,635,705 $ 2,455 $ 7,209 $ 6,588 $ 23,651,957
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.
9
<PAGE> 10
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED),
-----------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
----------------------------------------------
<TABLE>
<CAPTION>
Invesco Strong
Carryforward Schwab Strategic Corporate Weitz
Total S&P 500 Index Oakmark Technology Technology Value Total
(From Page 8) Fund Fund Fund Fund Fund -----
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1998
- ----
Net assets available for
benefits, January 1, 1998 $ 26,427,337 $1,099,641 $ 810,267 $428,324 $ - $ - $28,765,569
Contributions (Note 4) 3,599,002 365,306 258,716 192,552 659 468 4,416,703
Investment income:
Dividends 811,170 13,100 142,305 34 - - 966,609
Interest 417 - - - - - 417
Other income 106,411 4,456 3,929 3,090 - - 117,886
Net appreciation (deprecia-
tion) in the fair value of
investments (4,553,092) 280,556 (114,850) 127,432 - - (4,259,954)
Withdrawals and distributions
(Note 5) (2,328,867) (182,915) (103,191) (75,222) - - (2,690,195)
Administrative expenses (118,549) (627) (476) (361) - - (120,013)
Interfund activity:
Interfund transfers (19,764) 111,008 (22,976) (68,268) - - -
Interfund loans 20,498 (1,121) (15,197) (4,180) - - -
------------ ---------- --------- -------- ---- ---- -----------
Net assets available for
benefits, December 31, 1998 $ 23,944,563 $1,689,404 $ 958,527 $603,401 $659 $468 $27,197,022
============ ========== ========= ======== ==== ==== ===========
</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. In 1997 and
1998, the Company's contributions to the Plan, were invested by the Trustee
exclusively in the Allen Common Stock Fund (see Note 4). In 1998, Investment
Fund options included the Allen Common Stock Fund, along with selected
registered investment entities (i.e., mutual funds) including Fidelity
Equity-Income Fund (the "Fidelity Equity-Income Fund"), Fidelity Retirement
Growth Fund (the "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 the first quarter of 1999, four new funds were added to the
Plan. The Strong Corporate Bond Fund and Weitz Value Fund were added as options
in February 1999. Employees receiving profit sharing contributions associated
with the 1998 plan year were allowed to contribute to these two funds, along
with the other available fund options. Such contributions are included on the
Statements of Net Assets Available for Benefits as "Contribution
Receivable-Company" for 1998. The American Century Equity Growth Investment Fund
(the "American Century Fund") and Smith Breeden U.S. Equity Market Plus Fund
(the "Smith Breeden Fund") were added to the Plan portfolio in March 1999. These
two funds will eventually replace the two existing Fidelity Funds. Current
participants will have until July 15, 1999 to transfer out of the Fidelity Funds
into other Funds. Remaining dollars in the Fidelity Funds will automatically
transfer to the defined comparable fund if dollars are not re-aligned prior to
July 15, 1999. The American Century Fund will replace the Fidelity Equity-Income
Fund and the Smith Breeden Fund will replace the Fidelity Retirement Growth
Fund.
11
<PAGE> 12
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED),
------------------------------
Also during 1999, changes were made to the Plan regarding the
investment of the Company matching contributions, new interfund transfer options
for the Company matching contribution account and decreased limitations on
Company matching contributions. See Note 4 for further details.
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.
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. Most Forfeiture Funds are transferred from the respective Investment
Funds and accumulated in the Morley Stable Value Fund for the future payment of
administrative expenses. Accordingly, most administrative expenses paid by the
Plan in 1997 and in 1998 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, loan or distribution from the Plan are deducted from the proceeds of
the sale.
12
<PAGE> 13
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
3. INVESTMENTS
-----------
The market values at December 31, 1998 and 1997 for the respective
Investment Funds were as follows:
<TABLE>
<CAPTION>
December 31,
------------
1998 1997
---- ----
<S> <C> <C>
Fidelity Equity-Income Fund $ 5,556,689 $5,389,846
Fidelity Retirement Growth Fund 4,849,928 3,985,498
Allen Common Stock Fund 4,978,210 8,661,444
Morley Stable Value Fund 5,458,854 5,463,765
Janus Worldwide Fund 1,303,215 925,785
Schwab S&P 500 Index Fund 1,621,537 1,062,589
Oakmark Fund 926,449 768,971
Invesco Strategic Technology Fund 571,752 401,999
----------- -----------
$25,266,634 $26,659,897
=========== ===========
</TABLE>
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 elects 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 contribution 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.
13
<PAGE> 14
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
4. CONTRIBUTIONS (CONTINUED),
-------------
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. In 1997 and
1998, the maximum Company contribution was $1,200 per year. For 1999, the
Committee increased this limit to $1,600 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 $438,901 and $484,250 for the years ended December 31,
1998 and 1997, respectively. In addition, the Comsearch profit-sharing
contribution, noted above, for the years ended December 31, 1998 and 1997 were
$345,106 and $407,365, respectively.
A participant may change Investment Funds for any future participant
contributions through use of the toll free telephone number or internet access
at any time. Such changes will be effective within two business days 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
simply by using the toll free telephone number or internet access. Such
transfers will be effective as soon as practicable. Starting in 1999,
participants will also be able to transfer out of their Company matching
contribution account in a similar manner. 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. Starting in 1999, Company matching
contributions will be invested in the same manner as Participant contributions.
The same investment percentages will apply to all contributions.
14
<PAGE> 15
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
4. CONTRIBUTIONS (CONTINUED),
-------------
Participants' before-tax contributions to the Allen Common Stock Fund
and Company matching contributions may be 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 1998 and 1997, the Trustee
purchased from the Company 180,073 and 91,358 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.
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 vests 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.
15
<PAGE> 16
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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.
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 Internal Revenue Service
("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.
16
<PAGE> 17
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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.
Prior to the initial transfer of assets to TransPro, participants were
given an "open-window" period whereby they could transfer their assets in and
out of Allen Telecom Inc. common stock, as desired. Participants with account
balances remaining in Allen Telecom Inc. common stock remained in the Plan as
inactive participants. On March 13, 1998, the Savings Plan Committee authorized
another voluntary "open- window" period to allow TransPro participants to roll
Plan money into the TransPro Inc. 401K plan. Net assets of $77,933 were
transferred to the TransPro Inc. 401K plan in 1998. Accordingly, this amount is
included in withdrawals and distributions on the 1998 Statement of Changes in
Net Assets Available for Benefits.
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, 1998 and 1997, the Fund received applications for
withdrawals in the amount of $29,663 and $0 respectively, which were 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.
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, 1998
<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% $ N/A $1,360,035
FIDELITY EQUITY INCOME MUTUAL FUND 4,196,513 5,556,689
SCHWAB S&P 500 MUTUAL FUND 1,322,078 1,621,537
OAKMARK MUTUAL FUND 1,007,004 926,449
FIDELITY RETIREMENT GROWTH MUTUAL FUND 4,297,948 4,849,928
JANUS WORLDWIDE MUTUAL FUND 1,137,718 1,303,215
INVESCO STRATEGIC TECHNOLOGY MUTUAL FUND 501,717 571,752
ALLEN TELECOM INC. COMMON STOCK 8,855,585 4,973,627
MORLEY CAPITAL MANAGEMENT COMMON/COLLECTIVE TRUST 5,131,711 5,458,854
U.S. TREASURY MONEY MARKET 4,582 4,582
</TABLE>
18
<PAGE> 19
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
---------------------------------------------------
SCHEDULE OF REPORTABLE TRANSACTIONS - SEE FORM 5500, ITEM 27D
-------------------------------------------------------------
DECEMBER 31, 1998
-----------------
<TABLE>
<CAPTION>
Expense
Description of Asset (Include Incurred
----------------------------- --------
Interest Rate and Maturity in Case Purchase Selling With Current Value of Asset
- ---------------------------------- -------- ------- ---- ----------------------
of a Loan) Price Price Transaction Cost of Asset on Transaction Date Net Gain or (loss)
---------- ----- ----- ----------- ------------- ------------------- ------------------
<S> <C> <C> <C> <C> <C>
ALLEN TELECOM STOCK $1,674,662 2,204,848 $1,674,662 $(530,186)
ALLEN TELECOM STOCK $4,251,893 4,251,893 4,251,893 0
FIDELITY EQUITY INCOME 1,547,127 1,192,888 1,547,127 354,238
FIDELITY EQUITY INCOME 1,375,935 1,375,935 1,375,935 0
FIDELITY RETIREMENT
GROWTH 1,228,911 1,133,311 1,228,911 95,600
FIDELITY RETIREMENT
GROWTH 1,239,406 1,239,406 1,239,406 0
MORLEY STABLE VALUE 2,010,428 1,950,641 2,010,428 59,788
MORLEY STABLE VALUE 1,698704 1,698,704 1,698,704 0
OAKMARK 664,743 665,710 664,743 9,033
OAKMARK 937,071 937,071 937,071 0
SCHWAB S&P 500 651,314 607,696 651,314 43,618
SCHWAB S&P 500 929,706 929,706 929,706 0
SCHWAB US TREASURY 4,234,129 4,234,129 4,234,129 30,231
SCHWAB US TREASURY 4,238,438 4,238,438 4,238,438 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 21, 1999 By: /s/ Robert A. Youdelman
------------- -------------------------
Robert A. Youdelman
Committee Member
20
<PAGE> 21
EXHIBIT INDEX
-------------
ALLEN TELECOM INC.
------------------
Exhibit Number
- --------------
(23) Consent of PricewaterhouseCoopers LLP dated June 21, 1999.
21
<PAGE> 1
EXHIBIT 23
----------
CONSENT OF INDEPENDENT ACCOUNTANTS
ALLEN TELECOM INC.
Re: Allen Telecom Inc. Registration Statements Nos. 33-53487, 2-99919,
333-68369
We consent to the incorporation by reference in the above referenced
Registration Statements of our report dated June 10, 1999, on our audits of the
financial statements and financial statement schedules of the Allen Telecom Inc.
Employee Before-Tax Savings Plan at December 31, 1998 and 1997, and for the two
years in the period ended December 31, 1998, which is included in this Annual
Report on Form 11-K.
/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio
June 21, 1999
