<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, 1995
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.
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
June 30, 1995
with Report of Independent Auditors
<PAGE>
Investment Plan for Employees
of Mallinckrodt Group Inc.
Financial Statements and
Supplemental Schedules
Year ended June 30, 1995
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 . . . . . . . . . . . . . . . . . . . . . . . . . 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, 1995
Strategic Management
BRUCE K. CROCKETT
- --------------------
Bruce K. Crockett Vice President, December 20, 1995
Human Resources
BEVERLEY L. HAYES
- --------------------
Beverley L. Hayes Vice President, Human Resources December 20, 1995
Mallinckrodt Veterinary, Inc.
ROGER A. KELLER
- --------------------
Roger A. Keller Vice President, Secretary and December 20, 1995
General Counsel
DAVID R. KUPFERER
- --------------------
David R. Kupferer Vice President, Human Resources December 20, 1995
Mallinckrodt Chemical, Inc.
DOUGLAS A. MCKINNEY
- --------------------
Douglas A. McKinney Treasurer December 20, 1995
MARY J. MONNET
- --------------------
Mary J. Monnet Vice President, Human Resources December 20, 1995
Mallinckrodt Medical, Inc.
JOHN J. RIORDAN
- --------------------
John J. Riordan Director, December 20, 1995
Pension and Profit Sharing Plans
MICHAEL A. ROCCA
- --------------------
Michael A. Rocca Chief Financial Officer December 20, 1995
WILLIAM B. STONE
- --------------------
William B. Stone Vice President and Controller December 20, 1995
(Chairman of the Committee)
</TABLE>
1
<PAGE>
Report of Independent Auditors
Plan Administrator
Investment Plan for Employees of
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. as of June 30,
1995 and 1994, 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, 1995 and 1994, 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 as of June 30, 1995, 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 Fund Information in the
statement 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. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion,
are fairly stated in all material respects to the financial statements taken
as a whole.
November 29, 1995
2
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Net Assets Available for Benefits
June 30, 1995
<TABLE>
<CAPTION>
MGI
Total Stock Fund
--------------------------------
<S> <C> <C>
Cash $ 222,186 $ 222,186
Investments:
Mallinckrodt Group Inc. common stock (906,861
shares; cost - $25,600,658) $ 32,193,566 32,193,566
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (494,349
shares; cost - $20,335,562) 25,285,934 -
Vanguard/Wellesley Income Fund
(1,261,509 shares; cost - $22,976,847) 24,271,428 -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company 63,793,518 -
Metropolitan Life Ins. Company 16,172,260 -
The Northern Trust Company Collective Short-
Term Investment Fund (378,714 units; cost -
$378,714) 378,714 -
Loans to participants 5,567,031 -
Other 7,686 -
--------------------------------
Total investments 167,670,137 32,193,566
Receivables:
Employer contributions 9,680,755 2,435,499
Participant contributions 887,356 229,619
Interest and dividends 3,556 1,297
---------------------------------
Total receivables 10,571,667 2,666,415
---------------------------------
Amounts owed (to) from other funds - (437,458)
--------------------------------
Net assets available for benefits $178,463,990 $34,644,709
--------------------------------
--------------------------------
<CAPTION>
Fixed Income Balanced
Fund Fund
--------------------------------
<S> <C> <C>
Cash $ - $ -
Investments:
Mallinckrodt Group Inc. common stock (906,861
shares; cost - $25,600,658) - -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (494,349
shares; cost - $20,335,562) - -
Vanguard/Wellesley Income Fund
(1,261,509 shares; cost - $22,976,847) - 24,271,428
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Company 63,793,518 -
Metropolitan Life Ins. Company 16,172,260 -
The Northern Trust Company Collective Short-
Term Investment Fund (378,714 units; cost -
$378,714) 118,292 120,071
Loans to participants 38,533 -
Other 7,686 -
--------------------------------
Total investments 80,130,289 24,391,499
Receivables:
Employer contributions 3,057,172 1,943,289
Participant contributions 273,561 183,217
Interest and dividends 1,489 395
---------------------------------
Total receivables 3,332,222 2,126,901
---------------------------------
Amounts owed (to) from other funds 990,702 (197,082)
--------------------------------
Net assets available for benefits $ 84,453,213 $26,321,318
--------------------------------
--------------------------------
<CAPTION>
S&P 500 Administrative
Index Fund Account
--------------------------------
<S> <C> <C>
Cash $ - $ -
Investments:
Mallinckrodt Group Inc. common stock (906,861
shares; cost - $25,600,658) - -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio (494,349
shares; cost - $20,335,562) 25,285,934 -
Vanguard/Wellesley Income Fund
(1,261,509 shares; cost - $22,976,847) - -
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 (378,714 units; cost -
$378,714) 140,351 -
Loans to participants - 5,528,498
Other - -
--------------------------------
Total investments 25,426,285 5,528,498
Receivables:
Employer contributions 2,244,795 -
Participant contributions 200,959 -
Interest and dividends 375 -
---------------------------------
Total receivables 2,446,129 -
---------------------------------
Amounts owed (to) from other funds (356,162) -
--------------------------------
Net assets available for benefits $ 27,516,252 $ 5,528,498
--------------------------------
--------------------------------
</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, 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 1,633,119 497,417
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) - 9,210,639
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.
4
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Changes in Net Assets Available for Benefits
Year ended June 30, 1995
<TABLE>
<CAPTION>
MGI
Total Stock Fund
--------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ 474,414 $ 474,414
Mutual funds 1,844,340 -
--------------------------------
2,318,754 474,414
Interest:
Loans to participants 348,785 78,825
Investments 5,111,790 12,595
--------------------------------
5,460,575 91,420
--------------------------------
Net investment income 7,779,329 565,834
Net appreciation (depreciation) in fair value
of investments 9,228,387 2,882,421
Contributions:
Employer 11,947,021 3,035,323
Participant 21,674,162 6,122,721
--------------------------------
Total contributions 33,621,183 9,158,044
Cash and stock distributed to withdrawing
participants (18,804,320) (2,730,457)
Transfers of investment direction - (2,018,465)
--------------------------------
Net increases 31,824,579 7,857,377
Net assets available for benefits at beginning
of year 146,639,411 26,787,332
--------------------------------
Net assets available for benefits at end of
year $178,463,990 $34,644,709
--------------------------------
--------------------------------
<CAPTION>
Fixed Income Balanced
Fund Fund
--------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds - 1,339,412
--------------------------------
- 1,339,412
Interest:
Loans to participants 136,724 71,152
Investments 5,087,410 6,628
--------------------------------
5,224,134 77,780
--------------------------------
Net investment income 5,224,134 1,417,192
Net appreciation (depreciation) in fair value
of investments - 2,203,088
Contributions:
Employer 3,764,924 2,444,176
Participant 7,977,724 5,170,416
--------------------------------
Total contributions 11,742,648 7,614,592
Cash and stock distributed to withdrawing
participants (13,946,791) (2,416,475)
Transfers of investment direction 4,301,672 (3,180,311)
---------------------------------
Net increases 7,321,663 5,638,086
Net assets available for benefits at beginning
of year 77,131,550 20,683,232
----------------------------------
Net assets available for benefits at end of
year $84,453,213 $26,321,318
----------------------------------
----------------------------------
<CAPTION>
S&P 500 Administrative
Index Fund Account
---------------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds 504,928 -
------------------------------------
504,928 -
Interest:
Loans to participants 62,084 -
Investments 5,157 -
--------------------------------
67,241 -
--------------------------------
Net investment income 572,169 -
Net appreciation (depreciation) in fair value
of investments 4,142,878 -
Contributions:
Employer 2,702,598 -
Participant 4,823,927 (2,420,626)
--------------------------------
Total contributions 7,526,525 (2,420,626)
Cash and stock distributed to withdrawing
participants (2,233,254) 2,522,657
Transfers of investment direction 897,104 -
-------------------------------
Net increases 10,905,422 102,031
Net assets available for benefits at beginning
of year 16,610,830 5,426,467
--------------------------------
Net assets available for benefits at end of
year $27,516,252 $5,528,498
--------------------------------
--------------------------------
</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, 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 604,155 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.
6
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements
Years ended June 30, 1995 and 1994
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.
(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. and certain wholly owned subsidiaries and certain union employees at
Mallinckrodt Chemical, Inc. (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 pretax basis (salary reduction contributions) cannot exceed 15%. Total
after-tax and pretax contributions cannot exceed 15% of a participant's base
monthly salary. In addition, for calendar year 1994 and 1995 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.
Mallinckrodt 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 retained earnings.
Total employer contributions were equal to 105% of participants' eligible
contributions for the year ended June 30, 1995, and 87% for the year ended
June 30, 1994.
7
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (continued)
Years ended June 30, 1995 and 1994
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, 1995 and 1994, 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, 1995.
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, 1995 is 7.00%, net of investment
management fees. 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 rates for the contract year beginning
January 1, 1995 is 6.25%, net of investment management fees.
8
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (continued)
Years ended June 30, 1995 and 1994
1. DESCRIPTION OF THE PLAN (CONTINUED)
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 are 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, then
the amount elected to be transferred or distributed by each individual will be
reduced on a pro rata 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.
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.
9
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (continued)
Years ended June 30, 1995 and 1994
1. DESCRIPTION OF THE PLAN (CONTINUED)
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.
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.
10
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (continued)
Years ended June 30, 1995 and 1994
1. DESCRIPTION OF THE PLAN (CONTINUED)
DISTRIBUTION UPON TERMINATION OF EMPLOYMENT OR RETIREMENT
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 participant on the loan is credited to the participant's
account. Loans are accounted for in the Administrative Account in the
accompanying 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)
Years ended June 30, 1995 and 1994
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, which equals cost plus interest
earned to date. 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)
Years ended June 30, 1995 and 1994
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, 1995 and 1994, were as follows:
<TABLE>
<CAPTION>
June 30, 1995
-------------------------------------------------------
Mallinckrodt Balanced S&P 500
Security Type Total Stock Fund Fund Index Fund
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mallinckrodt Group Inc. Common Stock $2,882,421 $2,882,421 $ - $ -
Mutual funds:
Vanguard Index Trust--500 Portfolio 4,142,878 - - 4,142,878
Vanguard/Wellesley Income Fund 2,203,088 - 2,203,088 -
-------------------------------------------------------
Net appreciation (depreciation) in
fair value of investment assets $9,228,387 $2,882,421 $2,203,088 $4,142,878
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
<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>
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
1995 1994
-----------------------------------
<S> <C> <C>
Net assets available for benefits
per the financial statements $178,463,990 $149,639,411
Amounts allocated to withdrawing
participants (2,843,814) (2,254,721)
-----------------------------------
Net assets available for benefits
per the Form 5500 $175,620,176 $147,384,690
-----------------------------------
-----------------------------------
</TABLE>
13
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements (continued)
Years ended June 30, 1995 and 1994
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED)
Amounts allocated to withdrawing participants by fund option are as follows:
<TABLE>
<CAPTION>
June 30
1995 1994
-----------------------------------
<S> <C> <C>
Mallinckrodt stock fund $ 502,248 $ 349,453
Fixed income fund 1,315,000 1,395,666
Balanced fund 548,790 272,239
S&P 500 index fund 477,776 237,363
-----------------------------------
$2,843,814 $2,254,721
-----------------------------------
-----------------------------------
</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
1995
------------
<S> <C>
Cash and stock distributed to participants per the
financial statements $18,804,320
Add: Amounts allocated to withdrawing participants
at June 30, 1995 2,843,814
Less: Amounts allocated to withdrawing participants
at June 30, 1994 (2,254,721)
------------
Cash and stock distributed to participants per the Form 5500 $19,393,413
------------
------------
</TABLE>
5. FEDERAL INCOME TAX STATUS
On September 26, 1995, the Internal Revenue Service advised that the Plan, as
amended, 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). 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
June 30, 1995
<TABLE>
<CAPTION>
Fair
Description Number of Shares Cost Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mallinckrodt Group Inc.
Common stock 906.862 shares $ 25,600,658 $ 32,193,566
Vanguard Index Trust-
500 Portfolio 494,349 shares 20,335,562 25,285,934
Vanguard/Wellesley Income Fund 1,261,509 shares 22,976,847 24,271,428
Group fixed annuity contracts:
Transamerica Occidental Life
Insurance Company:
GAC #005100200 63,793,518 63,793,518
Metropolitan Life Insurance Company:
GAC #12826 16,172,260 16,172,260
The Northern Trust Company:
Collective Short-Term Investment
Fund 378,714 378,714
Loans to participants 5,567,031 5,567,031
High Valley L.P. note 84-1311 $ 7,686 $ 7,686
---------------------------
Total investments $154,832,276 $167,670,137
---------------------------
---------------------------
</TABLE>
15
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Reportable Transactions
Year Ended June 30, 1995
<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) 277 $41,112,080 206 $41,600,102 $41,600,102 $ -
Mallinckrodt Group Inc. Common
Stock 24 6,948,419 6 1,381,485 1,160,388 221,097
Vanguard Index Trust --
500 Portfolio 30 7,056,941 4 745,347 646,952 98,395
Vanguard/Wellesley Income Fund 24 6,000,260 10 2,921,248 2,944,172 (22,924)
Group fixed annuity contract with
Transamerica Occidental Life
and Annuity Company (1):
GAC #005100200 28 12,305,642 24 7,018,947 7,018,947 -
Group fixed annuity contract with
Metropolitan Life Insurance
Company (1):
GAC #12826 16 3,644,889 12 2,273,802 2,273,802 -
</TABLE>
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, 1995.
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
November 29, 1995, with respect to the financial statements and schedules of
the Investment Plan for Employees of Mallinckrodt Group Inc. included in this
Annual Report (Form 11-K) for the year ended June 30, 1995.
ERNST & YOUNG LLP
November 29, 1995
17
