<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
/ X / ANNUAL REPORT PURSUANT TO SECTION 15(d) Of THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Year Ended June 30, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-483
Title of the Plan --
INVESTMENT PLAN FOR EMPLOYEES OF
MALLINCKRODT GROUP INC.
(formally known as IMCERA Group Inc.)
Name and Address of the Issuer of the Securities
Held Pursuant to the Plan --
Mallinckrodt Group Inc.
7733 Forsyth Boulevard
St. Louis, Missouri 63105-1820
<PAGE>
Investment Plan for Employees
of Mallinckrodt Group Inc.
Financial Statements and
Supplemental Schedules
Year ended June 30, 1994
CONTENTS
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . .2
Financial Statements
Statement of Net Assets Available for Benefits . . . . . . . . . . . . . . .3
Statement of Changes in Net Assets Available for Benefits. . . . . . . . . .5
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .7
Supplemental Schedules
Assets Held for Investment Purposes. . . . . . . . . . . . . . . . . . . . 15
Reportable Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
Signature
The Plan -- Pursuant to the requirements of the Securities Exchange Act
of 1934, the undersigned, the persons who administer the Employee Benefit Plan
and who are duly authorized, have caused this annual report to be signed.
Investment Plan for Employees of Mallinckrodt Group Inc.
Employee Benefits Committee
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------------------------------------------------------------
<S> <C> <C>
ASHOK CHAWLA
- --------------------
Ashok Chawla Vice President, December 20, 1994
Strategic Management
BEVERLEY L. HAYES
- --------------------
Beverley L. Hayes Vice President, Human Resources December 20, 1994
Mallinckrodt Veterinary, Inc.
ROGER A. KELLER
- --------------------
Roger A. Keller Vice President, Secretary and December 20, 1994
General Counsel
DAVID R. KUPFERER
- --------------------
David R. Kupferer Vice President, Human Resources December 20, 1994
Mallinckrodt Chemical, Inc.
DOUGLAS A. MCKINNEY
- --------------------
Douglas A. McKinney Assistant Treasurer December 20, 1994
MARY J. MONNET
- --------------------
Mary J. Monnet Vice President, Human Resources December 20, 1994
Mallinckrodt Medical, Inc.
JOHN J. RIORDAN
- --------------------
John J. Riordan Director, December 20, 1994
Pension and Profit Sharing Plans
MICHAEL A. ROCCA
- --------------------
Michael A. Rocca Chief Financial Officer December 20, 1994
WILLIAM B. STONE
- --------------------
William B. Stone Vice President and Controller December 20, 1994
(Chairman of the Committee)
</TABLE>
1
<PAGE>
Report of Independent Auditors
The Board of Directors
Mallinckrodt Group Inc.
We have audited the accompanying statements of net assets available for benefits
of the Investment Plan for Employees of Mallinckrodt Group Inc. (formerly known
as IMCERA Group Inc.) as of June 30, 1994 and 1993, and the related statements
of changes in net assets available for benefits for the years then ended. 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 Plan at June
30, 1994 and 1993, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of June 30, 1994, and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are not
a required part of the basic financial statements. The supplemental schedules
have been subjected to the auditing procedures applied in our audit of the 1994
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 1994 financial statements taken as a whole.
ERNST & YOUNG LLP
Chicago, Illinois
October 24, 1994
2
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Net Assets Available for Benefits
June 30, 1994
<TABLE>
<CAPTION>
MGI
Total Stock Fund
--------------------------------
<S> <C> <C>
ASSETS
Investments:
Mallinckrodt Group Inc. common stock (744,176
shares; cost - $20,185,788) $ 24,185,720 $24,185,720
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (355,963
shares; cost - $13,925,571) 14,882,833 -
Vanguard/Wellesley Income Fund
(1,084,734 shares; cost - $19,920,759) 19,210,639 -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company 58,604,000 -
Metropolitan Life Ins. Company 14,801,173 -
The Northern Trust Company Collective Short-
Term Investment Fund (866,736 units; cost -
$866,736) 866,736 413,077
--------------------------------
Total investments 132,551,101 24,598,797
Receivables:
Loans to participants 5,472,857 -
Employer contributions 7,274,982 1,944,804
Participant contributions 1,633,119 497,517
Interest and dividends 14,252 5,763
---------------------------------
Total receivables 14,395,210 2,447,984
---------------------------------
146,946,311 27,046,781
LIABILITIES
Amounts owed to (from) other funds - 192,812
Employee loans payable 306,900 66,637
--------------------------------
Net assets available for benefits $146,639,411 $26,787,332
--------------------------------
--------------------------------
<CAPTION>
Fixed Income Balanced
Fund Fund
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
Mallinckrodt Group Inc. common stock (744,176
shares; cost - $20,185,788) $ - $ -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (355,963
shares; cost - $13,925,571) - -
Vanguard/Wellesley Income Fund
(1,084,734 shares; cost - $19,920,759) 19,210,639 -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company 58,604,000 -
Metropolitan Life Ins. Company 14,801,173 -
The Northern Trust Company Collective Short-
Term Investment Fund (866,736 units; cost -
$866,736) 296,327 47,738
--------------------------------
Total investments 73,701,500 19,258,377
Receivables:
Loans to participants 46,390 -
Employer contributions 2,276,954 1,700,002
Participant contributions 205,445 575,852
Interest and dividends 2,872 3,119
--------------------------------
Total receivables 2,531,661 2,278,973
--------------------------------
76,233,161 21,537,350
LIABILITIES
Amounts owed to (from) other funds (1,049,221) 794,843
Employee loans payable 150,832 59,275
--------------------------------
Net assets available for benefits $77,131,550 $20,683,232
--------------------------------
--------------------------------
<CAPTION>
S&P 500 Administrative
Index Fund Account
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
Mallinckrodt Group Inc. common stock (744,176
shares; cost - $20,185,788) $ - $ -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (355,963
shares; cost - $13,925,571) 14,882,833 -
Vanguard/Wellesley Income Fund
(1,084,734 shares; cost - $19,920,759) - -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company - -
Metropolitan Life Ins. Company - -
The Northern Trust Company Collective Short-
Term Investment Fund (866,736 units; cost -
$866,736) 109,594 -
--------------------------------
Total investments 14,992,427 -
Receivables:
Loans to participants - 5,426,467
Employer contributions 1,353,222 -
Participant contributions 354,405 -
Interest and dividends 2,498 -
--------------------------------
Total receivables 1,710,125 5,426,467
--------------------------------
16,702,552 5,426,467
LIABILITIES
Amounts owed to (from) other funds 61,566 -
Employee loans payable 30,156 -
--------------------------------
Net assets available for benefits $ 16,610,830 $ 5,426,467
--------------------------------
--------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Net Assets Available for Benefits
June 30, 1993
<TABLE>
<CAPTION>
MGI
Total Stock Fund
- ------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
Mallinckrodt Group Inc. common stock (653,050
shares; cost - $16,978,404) $ 19,591,500 $19,591,500
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (295,683
shares; cost - $11,220,870) 12,551,762 -
Vanguard/Wellesley Income Fund
(657,263 shares; cost - $11,662,755) 12,750,893 -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company 56,193,873 -
Metropolitan Life Ins. Company 13,689,789 -
The Ohio National Life Ins. Company 289,651 -
The Northern Trust Company Collective Short-
Term Investment Fund (1,542,142 units; cost -
$1,542,142) 1,542,142 318,761
--------------------------------
Total investments 116,609,610 19,910,261
Receivables:
Loans to participants 4,515,389 -
Employer contributions 4,378,273 1,124,227
Participant contributions 1,509,762 39,503
Interest and dividends 15,741 761
--------------------------------
Total receivables 10,419,165 1,164,491
--------------------------------
127,028,775 21,074,752
LIABILITIES
Amounts owed to (from) other funds - 400,089
Employee loans payable 398,652 85,078
--------------------------------
Net assets available for benefits $126,630,123 $20,589,585
--------------------------------
--------------------------------
<CAPTION>
Fixed Income Balanced
Fund Fund
--------------------------------
<S> <C> <C>
ASSETS
Investments:
Mallinckrodt Group Inc. common stock (653,050
shares; cost - $16,978,404) $ - $ -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (295,683
shares; cost - $11,220,870) - -
Vanguard/Wellesley Income Fund
(657,263 shares; cost - $11,662,755) - 12,750,893
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company 56,193,873 -
Metropolitan Life Ins. Company 13,689,789 -
The Ohio National Life Ins. Company 289,651 -
The Northern Trust Company Collective Short-
Term Investment Fund (1,542,142 units; cost -
$1,542,142) 945,326 85,515
--------------------------------
Total investments 71,118,639 12,836,408
Receivables:
Loans to participants 55,538 -
Employer contributions 1,488,055 999,976
Participant contributions 341,077 746,024
Interest and dividends 13,843 379
--------------------------------
Total receivables 1,898,513 1,746,379
--------------------------------
73,017,152 14,582,787
LIABILITIES
Amounts owed to (from) other funds 156,213 (848,773)
Employee loans payable 228,087 35,174
--------------------------------
Net assets available for benefits $72,632,852 $15,396,386
--------------------------------
------------------------------
<CAPTION>
S&P 500 Administrative
Index Fund Account
--------------------------------
<S> <C> <C>
ASSETS
Investments:
Mallinckrodt Group Inc. common stock (653,050
shares; cost - $16,978,404) $ - $ -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (295,683
shares; cost - $11,220,870) 12,551,762 -
Vanguard/Wellesley Income Fund
(657,263 shares; cost - $11,662,755) - -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company - -
Metropolitan Life Ins. Company - -
The Ohio National Life Ins. Company - -
The Northern Trust Company Collective Short-
Term Investment Fund (1,542,142 units; cost -
$1,542,142) 192,540 -
--------------------------------
Total investments 12,744,302 -
Receivables:
Loans to participants - 4,459,851
Employer contributions 766,015 -
Participant contributions 383,158 -
Interest and dividends 758 -
--------------------------------
Total receivables 1,149,931 4,459,851
--------------------------------
13,894,233 4,459,851
LIABILITIES
Amounts owed to (from) other funds 292,471 -
Employee loans payable 50,313 -
--------------------------------
Net assets available for benefits $13,551,449 $ 4,459,851
--------------------------------
--------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Changes in Net Assets Available for Benefits
Year ended June 30, 1994
<TABLE>
<CAPTION>
MGI
Total Stock Fund
--------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ 349,391 $ 349,391
Mutual funds 1,386,390 -
--------------------------------
1,735,781 349,391
Interest:
Loans to participants 289,836 79,410
Investments 4,653,011 15,263
--------------------------------
4,942,847 94,673
--------------------------------
Net investment income 6,678,628 444,064
Net appreciation (depreciation) in fair value
of investments 85,407 1,640,226
Contributions:
Employer 9,501,934 2,539,654
Participant 18,363,824 5,893,902
--------------------------------
Total contributions 27,865,758 8,433,556
--------------------------------
Cash and stock distributed to withdrawing
participants (14,620,505) (3,168,344)
Transfers of investment direction - (1,151,755)
--------------------------------
Net increases 20,009,288 6,197,747
Net assets available for benefits at beginning
of year 126,630,123 20,589,585
--------------------------------
Net assets available for benefits at end of
year $146,639,411 $26,787,332
--------------------------------
--------------------------------
<CAPTION>
Fixed Income Balanced
Fund Fund
--------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds - 1,023,196
--------------------------------
- 1,023,196
Interest:
Loans to participants 107,619 60,972
Investments 4,622,788 8,396
--------------------------------
4,730,407 69,368
--------------------------------
Net investment income 4,730,407 1,092,564
Net appreciation (depreciation) in fair value
of investments - (1,351,084)
Contributions:
Employer 2,984,674 2,204,201
Participant 6,253,979 4,455,026
--------------------------------
Total contributions 9,238,653 6,659,227
--------------------------------
Cash and stock distributed to withdrawing
participants (10,074,517) (2,326,133)
Transfers of investment direction 04,155 1,212,272
---------------------------------
Net increases 4,498,698 5,286,846
Net assets available for benefits at beginning
of year 72,632,852 15,396,386
-------------------------------
Net assets available for benefits at end of
year $77,131,550 $20,683,232
-------------------------------
-------------------------------
<CAPTION>
S&P 500 Administrative
Index Fund Account
---------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds 363,194 -
-------------------------------
363,194 -
Interest:
Loans to participants 41,835 -
Investments 6,564 -
--------------------------------
48,399 -
--------------------------------
Net investment income 411,593 -
Net appreciation (depreciation) in fair value
of investments (203,735) -
Contributions:
Employer 1,773,405 -
Participant 3,896,304 (2,135,387)
--------------------------------
Total contributions 5,669,709 (2,135,387)
--------------------------------
Cash and stock distributed to withdrawing
participants (2,153,514) 3,102,003
Transfers of investment direction (664,672) -
-------------------------------
Net increases 3,059,381 966,616
Net assets available for benefits at beginning
of year 13,551,449 4,459,851
--------------------------------
Net assets available for benefits at end of
year $ 16,610,830 $ 5,426,467
--------------------------------
--------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Changes in Net Assets Available for Benefits
Year ended June 30, 1993
<TABLE>
<CAPTION>
MGI
Total Stock Fund
--------------------------------
<S> <C> <C>
Dividends:
Mallinckrodt Group Inc. common stock $ 258,343 $ 258,343
Mutual funds 921,372 -
--------------------------------
1,179,715 258,343
Interest:
Loans to participants 278,369 90,440
Investments 5,320,209 12,147
--------------------------------
5,598,578 102,587
--------------------------------
Net investment income 6,778,293 360,930
Net appreciation (depreciation) in fair value of
investments 211,392 (1,671,941)
Contributions:
Employer 6,267,839 1,699,574
Participant 16,788,087 4,700,757
--------------------------------
Total contributions 23,055,926 6,400,331
Cash and stock distributed to withdrawing
participants (10,477,002) (1,536,020)
Transfers of investment direction - (122,638)
Transfers to other plans (4,329,095) (1,020,401)
--------------------------------
Net increases (decreases) 15,239,514 2,410,261
Net assets available for benefits at beginning of
year 111,390,609 18,179,324
--------------------------------
Net assets available for benefits at end of year $126,630,123 $20,589,585
--------------------------------
<CAPTION>
Fixed Income Balanced
Fund Fund
--------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds - 636,204
-----------------------------
- 636,204
Interest:
Loans to participants 117,544 36,355
Investments 5,297,111 6,415
-----------------------------
5,414,655 42,770
-----------------------------
Net investment income 5,414,655 678,974
Net appreciation (depreciation) in fair value of
investments - 921,870
Contributions:
Employer 2,186,618 1,325,730
Participant 6,010,234 3,441,993
----------------------------
Total contributions 8,196,852 4,767,723
Cash and stock distributed to withdrawing
participants (7,370,905) (701,314)
Transfers of investment direction (3,989,611) 2,218,330
Transfers to other plans (2,442,888) (341,992)
------------------------------
Net increases (decreases) (191,897) 7,543,591
Net assets available for benefits at beginning of
year 72,824,749 7,852,795
-----------------------------
Net assets available for benefits at end of year $ 72,632,852 $15,396,386
-----------------------------
<CAPTION>
S&P 500 Administrative
Index Fund Account
--------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds 285,168 -
--------------------------------
285,168 -
Interest:
Loans to participants 34,030 -
Investments 4,536 -
--------------------------------
38,566 -
--------------------------------
Net investment income 323,734 -
Net appreciation (depreciation) in fair value of
investments 961,463 -
Contributions:
Employer 1,055,917 -
Participant 2,635,103 -
--------------------------------
Total contributions 3,691,020 -
Cash and stock distributed to withdrawing
participants (688,625) (180,138)
Transfers of investment direction 759,903 1,134,016
Transfers to other plans (335,956) (187,858)
--------------------------------
Net increases (decreases) 4,711,539 766,020
Net assets available for benefits at beginning of
year 8,839,910 3,693,831
--------------------------------
Net assets available for benefits at end of year $13,551,449 $ 4,459,851
--------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements
1. DESCRIPTION OF THE PLAN
GENERAL
This Plan description is provided for general information purposes only.
Participants should refer to the November 1993 plan summary which is part of
the prospectus for the Investment Plan for Employees of Mallinckrodt Group Inc.
(the Plan) as supplemented by an Information Bulletin issued as of April 30,
1994, for a more complete description of the provisions of the Plan. The Plan
was established effective July 1, 1970, and has been subsequently amended from
time to time to incorporate certain changes in Plan features and other
legislatively required changes. All nonunion employees of Mallinckrodt Group
Inc. (formerly known as IMCERA Group Inc.) and certain wholly owned subsidiaries
and certain union employees at Mallinckrodt Chemical, Inc. (eligible as of April
1993) (jointly referred to as Mallinckrodt or the Company), who are employed in
the U.S. or on a U.S. payroll, are eligible to participate in the Plan.
Separate accounts are maintained for each participant. Each participant's
account balances are adjusted for contributions, distributions, loans, income,
gains and losses. Participants are fully vested in all amounts allocated to
their Plan accounts.
The Plan is funded by contributions from participants in the form of after-tax
contributions (payroll deductions) of up to 15% of participants' base monthly
salaries. The Plan also provides a qualified cash or deferred arrangement
within the meaning of Section 401(k) of the Internal Revenue Code. The
percentage of a participant's base monthly salary which could be contributed on
a pre-tax basis (salary reduction contributions) cannot exceed 15%. Total
after-tax and pre-tax contributions cannot exceed 15% of a participant's base
monthly salary. In addition, for calendar year 1994, salary reduction
contributions could not exceed $9,240.
The Plan is also funded by employer contributions of not less than 20% of a
participant's eligible contributions. Contributions that do not exceed 6% of a
participant's base monthly salary constitute eligible contributions.
Mallilnckrodt may make additional discretionary contributions each year as
determined by its Board of Directors. Employer contributions are subject to
certain limitations with respect to Mallinckrodt's consolidated net earnings and
accumulated earned surplus. Total employer contributions were equal to 87% of
participants' eligible contributions for the year ended June 30, 1994, and 68%
for the year ended June 30, 1993.
7
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Contributions to the Plan, including employee and employer contributions, are
subject to various limitations imposed by the Internal Revenue Code.
Under certain circumstances, participants may transfer their vested benefits
from other plans to the Plan.
While Mallinckrodt has not expressed any intent to terminate the Plan, it is
free to do so at any time. In the event the Plan terminates, participants
will be entitled to receive a complete distribution of their undistributed
account balance as held in their respective Plan accounts. Because all Plan
assets are allocated to Plan participants and a participant's benefit under
the plan equals the value of the participant's account balance, the Plan is
not subject to the insurance provisions of the Pension Benefit Guarantee
Corporation.
Administrative expenses of the Plan are borne by Mallinckrodt.
INVESTMENTS
The Plan's investments, except for certain investments in group annuity
contracts discussed below, at June 30, 1994 and 1993, were held by The Northern
Trust Company (Northern) under a trust agreement dated March 2, 1988, and
amended June 19, 1991. Investments in group annuity contracts were with
Transamerica Occidental Life Insurance Company (Transamerica) and Metropolitan
Life Insurance Company (Metropolitan) at June 30, 1994, and Transamerica,
Metropolitan and Ohio National Life Insurance Company (Ohio National) at
June 30, 1993.
All new contributions to the Fixed Income Fund are invested 75% in the
Transamerica contract and 25% in the Metropolitan contract. The contract with
Transamerica dated November 2, 1989, provides guaranteed rates of interest to be
set annually on all new monies invested over the contract term. The rate for
the contract year beginning January 1, 1949 is 6.25%. The contract with
Metropolitan dated October 18, 1991, provides guaranteed rates of interest
to be set annually on all new monies invested over the contract term. The
rate for the contract year beginning November 1, 1993 is 6.6%.
The contracts with Ohio National were negotiated under the Coopers Plan before
it was merged into the Plan on January 1, 1990. To preserve the previously
negotiated interest rates, this contract was maintained under the Plan until
its expiration date for the exclusive benefit of former Coopers Plan
participants.
8
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Under the contract with Ohio National, a rate of 8.73% was guaranteed until
July 20, 1993 on contributions made between July 20, 1988 and December 31, 1989.
The funds in the Ohio National contract were transferred to the Transamerica
contract on July 23, 1993.
FUND ASSET VALUATION
Participants' equity in the Plan is valued in dollars determined as of the last
business day of each calendar month (valuation date). As of each valuation
date, the market value of the assets in each of the investment funds is
determined, and the increase or decrease of each fund is allocated to each
participant's account invested in that fund, based on the participant's
proportionate interest of such fund as of the previous valuation date.
INVESTMENT PROGRAMS
Participants select their desired investment funds upon joining the Plan.
Participants may direct that their past and future contributions, employer
contributions and earnings on such contributions be invested in one of the Funds
or in increments of 25% in any of the Funds. Participants may also elect to
change the investment direction of their contributions four times a year as of
January 1, April 1, July 1, and October 1, upon giving the required notice.
Such a change only affects the investment of the participant's contributions
and employer contributions received by the Plan after the effective date of
the change.
Transfers into and out of the Fixed Income Fund will be made on a prorated
basis of 75%-25% from both the Transamerica contract and the Metropolitan
contract, respectively. Participants having an account balance invested in the
Fixed Income Fund may transfer their balance out of that Fund only if no more
than 20% of the total value of the Transamerica contract on November 1 of the
prior year is transferred or distributed for all participants exceeds 20%, then
the amount elected to be transferred or distributed by each individual will be
reduced on a prorata basis until the total amount transferred by all
participants is reduced to 20% of the value of the assets invested in the
Transamerica contract as of the end of the prior year. Transfers from the
Metropolitan contract are limited to the extent that the total transfer at any
given time must be on a 75%-25% basis from the Transamerica and Metropolitan
contracts, respectively.
9
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
A participant may change the amount of payroll deduction or salary reduction
twice a year, as of January 1 and July 1, upon giving the required notice.
VESTING AND PARTICIPATION
All Plan members are fully vested. Employees who are eligible to join the Plan
may elect to do so on the first January 1 or July 1 following their initial
date of employment.
WITHDRAWALS
The Plan does permit participants to withdraw various portions, or in
certain instances, their entire account balance in the Plan under limited
circumstances. However, these rights of withdrawal are limited and carry,
in certain cases, suspension of participation penalties.
Participants may withdraw their entire interest in the Plan without penalty
upon termination of their employment or upon reaching age 59 1/2 or becoming
disabled as defined in the Plan.
Except as noted above, amounts contributed through salary deferrals, as well
as earnings thereon, may not be withdrawn while a participant is employed by
the Company except under certain conditions of financial hardship. In such
instances, salary deferrals may be withdrawn; however, as a penalty, the
participant is suspended from participation for at least 12 months.
Participants may also withdraw after-tax and employer contributions without
penalty upon demonstration of financial hardship. Or, these amounts may be
withdrawn for any purpose in which case the participant would also incur a
suspension of participation for 12 months.
Except as noted below, participants will receive distribution of their
interest in the Plan in a lump-sum payment.
DISTRIBUTION UPON TERMINATION OF EMPLOYMENT OR RETIREMENT
Upon termination of employment with Mallinckrodt and its affiliates, Plan
participants are entitled to receive a complete distribution of their
entire account balance in the Plan.
10
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
All participants who terminate their employment with vested account balances
whose value exceeds $3,500 are eligible to defer receipt of any distribution
from the Plan until January 31 of the year following termination or no later
than the April 1 following their attainment of age 70 1/2. If long-term
deferral is elected, the participant's account is transferred to the fixed
income fund. The accounts of participants electing short-term deferral remain
invested in the investment funds selected by the participants until
distribution on January 31 following termination of employment.
Participants electing deferral must: (1) elect to receive their distributions
in: (a) a lump sum on the date of distribution; or (b) in substantially equal
annual installments not to exceed ten, and (2) make any election for the method
of distribution in the event of their death prior to total distribution. The
beneficiary of a retired participant is permitted, in the event of the latter's
death, to change the form of payment election made by the deceased participant.
Participants who terminate their employment prior to eligibility for early or
normal retirement and whose Plan account exceeds $3,500 will be permitted to
defer receipt of their Plan distribution as provided above, except that
distribution will be received in a lump sum only.
LOANS TO PARTICIPANTS
Participants in the Plan may be granted loans from their Plan accounts subject
to certain terms, maximum dollar amounts, or Plan account balance limits and
other rules as defined by the Plan. The amount of any such loan is borrowed
from the account of the participant to whom the loan was made, and such account
does not share in the allocation of income, gains and losses of the investment
funds to the extent of the outstanding balance of such loan. Rather, the
interest paid by the particiant on the loan is credited to the participant's
account. Loans are accounted for in the Administrative Account in the
Statement of Net Assets Available for Benefits. Principal repayments, which
are over one to five years for general purpose loans and over one to ten years
for residential loans, and related interest income, determined at the prime
rate, are credited to the borrowing participant's account. The rate of interest
charged for the term of a loan is the prime rate quoted in The Wall Street
Journal on the first business day of the month in which the loan is approved.
Loan repayments are made by monthly payroll deductions. Loan repayments are
invested in the same manner as current contributions, except that repayments
related to loans outstanding prior to August 1990 may continue to be invested
in the Fund or Funds out of which the loans were originally taken.
11
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
All investments are carried at fair value, except the group fixed annuity
contracts which are carried at contract value. The group fixed annuity
contracts generally provide that upon termination the contracts will be paid at
market value which may be lower or higher than contract value. Fair value is
the last reported sales price on the last business day of the month for
securities traded on a national securities exchange and in the over-the-counter
market. Fair value for shares or units of the mutual fund investments and The
Northern Trust Company Collective Short-Term Investment Fund is the net asset
value of those shares or units as computed by the respective funds.
CONTRIBUTIONS
Contributions from participants are recorded monthly when due from Mallinckrodt.
Contributions by Mallinckrodt are accrued monthly based on the minimum
contribution percentage (20%) required by the Plan. Any additional
contributions by Mallinckrodt are made following approval by its Board of
Directors.
SECURITY TRANSACTIONS
Purchases and sales of securities are accounted for on the trade date (date the
order to buy or sell is executed).
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
RECLASSIFICATION
Certain prior year balances have been reclassified to conform to the current
year's treatment.
12
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (Continued)
3. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENT ASSETS
The components of the net appreciation (depreciation) in fair value of
investment assets for the years ended June 30, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
June 30, 1994
-------------------------------------------------------
Mallinckrodt Balanced S&P 500
Security Type Total Stock Fund Fund Index Fund
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mallinckrodt Group Inc. Common Stock $ 1,640,226 $ 1,640,226 $ - $ -
Mutual funds:
Vanguard Index Trust--500 Portfolio (203,735) - - (203,735)
Vanguard/Wellesley Income Fund (1,351,084) - (1,351,084) -
-------------------------------------------------------
Net appreciation (depreciation) in
fair value of investment assets $ 85,407 $ 1,640,226 $(1,351,084) $(203,735)
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
June 30, 1993
-------------------------------------------------------
Mallinckrodt Balanced S&P 500
Security Type Total Stock Fund Fund Index Fund
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mallinckrodt Group Inc. Common Stock $(1,671,941) $(1,671,941) $ - $ -
Mutual funds:
Vanguard Index Trust--500 Portfolio 961,463 - - 961,463
Vanguard/Wellesley Income Fund 921,870 - $921,870 -
-------------------------------------------------------
Net appreciation (depreciation) in
fair value of investment assets $ 211,392 $(1,671,941) $921,870 $961,463
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
June 30
1994 1993
-----------------------------------
<S> <C> <C>
Net assets available for benefits
per the financial statements $149,639,411 $126,630,123
Amounts allocated to withdrawing
participants (2,254,721) (2,918,904)
-----------------------------------
Net assets available for benefits
per the Form 5500 $147,384,690 $123,711,219
-----------------------------------
-----------------------------------
</TABLE>
13
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (Continued)
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED)
Amounts allocated to withdrawing participants by fund option are as follows:
<TABLE>
<CAPTION>
June 30
1994 1993
-----------------------------------
<S> <C> <C>
Mallinckrodt stock fund $ 349,453 $ 661,308
Fixed income fund 1,395,666 1,379,795
Balanced fund 272,239 441,853
S&P 500 index fund 237,363 435,948
-----------------------------------
$2,254,721 $2,918,904
-----------------------------------
-----------------------------------
</TABLE>
The following is a reconciliation of cash and stock distributed to
participants per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year ended
June 30
1994
------------
<S> <C>
Cash and stock distributed to participants per the
financial statements $14,620,505
Add: Amounts allocated to withdrawing participants
at June 30, 1994 2,254,721
Less: Amounts allocated to withdrawing participants
at June 30, 1993 (2,918,904)
------------
Cash and stock distributed to participants per the Form 5500 $13,956,322
------------
------------
</TABLE>
5. FEDERAL INCOME TAX STATUS
On February 10, 1986, the Internal Revenue Service advised that the Plan, as
amended through amendment number eleven and restated effective July 1, 1985,
qualifies under Section 401(a) of the Internal Revenue Code (IRC) and that the
Investment Trust for Employees of Mallinckrodt Group Inc., as amended,
established thereunder is exempt from Federal income taxation under Section
501(a). Since that time, the Plan has been amended, among other reasons, to
comply with changes required by the Tax Reform Act of 1986. Once qualified,
the Plan is required to operate in conformity with the IRC in order to maintain
its qualification. The Plan Administrator is not aware of any course of action
or series of events that have occurred that might adversely affect the Plan's
qualified status.
14
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Assets Held for Investment Purposes
June 30, 1994
<TABLE>
<CAPTION>
Fair
Description Number of Shares Cost Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mallinckrodt Group Inc.
Common stock 744,176 shares $ 20,185,788 $ 24,185,720
Vanguard Index Trust-
500 Portfolio 355,963 shares 13,925,571 14,882,833
Vanguard/Wellesley Income Fund 1,084,734 shares 19,920,759 19,210,639
Group fixed annuity contracts:
Transamerica Occidental Life
Insurance Company
GAC #005100200 58,599,282 58,599,282
GAC #5100202 4,718 4,718
Metropolitan Life Insurance Company
GAC #12826 14,801,173 14,801,173
The Northern Trust Company
Collective Short-Term Investment
Fund 866,736 866,736
---------------------------
Total investments $128,304,027 $132,551,101
---------------------------
---------------------------
Loans to participants $ 5,427,857 $ 5,472,857
---------------------------
---------------------------
</TABLE>
15
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Reportable Transactions
Year ended June 30, 1994
<TABLE>
<CAPTION>
Purchases Sales
---------------- --------------------------- Net Gain
Description Number Cost Number Proceeds Cost (Loss)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CATEGORY (iii) SERIES OF SECURITIES TRANSACTIONS
The Northern Trust Company
Collective Short-Term
Investment Fund (1) 295 $33,421,219 233 $34,096,625 $34,096,625 $ -
Mallinckrodt Group Inc. Common
Stock 17 4,580,649 14 1,643,223 1,373,265 269,958
Vanguard Index Trust --
500 Portfolio 27 3,809,929 7 1,249,446 1,105,228 144,218
Vanguard/Wellesley Income Fund 33 8,925,201 5 726,670 667,197 59,473
Group fixed annuity contract with
Transamerica Occidental Life
and Annuity Company (1)
GAC #005100200 34 12,389,805 32 4,610,828 4,610,828 -
GAC #5100202 4 323,897 11 2,244,942 2,244,942 -
GAC #51006 - - 1 3,493,805 3,493,805 -
Group fixed annuity contract with
Metropolitan Life Insurance
Company (1)
GAC #12826 25 2,455,216 1 1,343,832 1,343,832 -
<FN>
Notes:
(1) Due to the nature of these transactions, no gain or loss on disposition is
recognized.
(2) There were no category (i), (ii), or (iv) reportable transactions during
the year ended June 30, 1994.
</TABLE>
16
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 2-94151) pertaining to the Investment Plan for Employees of Mallinckrodt
Group Inc. and in the related Prospectus of our report dated October 24, 1994,
with respect to the financial statements and schedules of the Investment Plan
for Employees of Mallilnckrodt Group Inc. included in this Annual Report
(Form 11-K) for the year ended June 30, 1994.
ERNST & YOUNG LLP
Chicago, Illinois
December 19, 1994
17
