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, 1996
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
Years Ended June 30, 1996 and 1995
with Report of Independent Auditors<PAGE>
<PAGE>
Investment Plan for Employees
of Mallinckrodt Group Inc.
Financial Statements and
Supplemental Schedules
Years Ended June 30, 1996 and 1995
Contents
Report of Independent Auditors............................2
Financial Statements
Statements of Net Assets Available for Benefits ..........3
Statements of Changes in Net Assets Available
for Benefits..............................................5
Notes to Financial Statements.............................7
Supplemental Schedules
Assets Held for Investment................................I
Reportable Transactions..................................II
<PAGE>
<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
ASHOK CHAWLA
- ------------
Ashok Chawla Vice President, December 20, 1996
Strategic Management
BRUCE K. CROCKETT
- ----------------
Bruce K. Crockett Vice President, December 20, 1996
Human Resources
BEVERLEY L. HAYES
- -----------------
Beverley L. Hayes Vice President, December 20, 1996
Human Resources
Mallinckrodt Veterinary, Inc.
ROGER A. KELLER
- ---------------
Roger A. Keller Vice President, Secretary December 20, 1996
and General Counsel
DAVID R. KUPFERER
- -----------------
David R. Kupferer Staff Vice President, December 20, 1996
Organizational Development,
Human Resources
DOUGLAS A. MCKINNEY
- -------------------
Douglas A. McKinney Treasurer December 20, 1996
JOHN J. RIORDAN
- ---------------
John J. Riordan Director, Pension and December 20, 1996
Profit
MICHAEL A. ROCCA
- ----------------
Michael A. Rocca Senior Vice President and December 20, 1996
Chief Financial Officer
HERSCHEL V. SELLERS
- -------------------
Herschel A. Sellers Director, Compensation and December 20, 1996
Benefits
WILLIAM B. STONE
- ----------------
William B. Stone Vice President Information December 20, 1996
Technology
(Chairman of the Committee)
<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, 1996 and 1995, 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, 1996 and 1995, 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,
1996, 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 22, 1996
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Net Assets Available for Benefits
As of June 30, 1996
<TABLE>
<CAPTION>
MGI
Total Stock Fund
-------------------------
<S> <C> <C>
Assets
Investments:
Mallinckrodt Group Inc. common stock
(935,744 shares; cost - $27,989,301) $ 36,377,048 36,377,048
Mutual Funds:
Vanguard Index Trust - 500 Portfolio
(741,121 shares; cost - $35,094,120) 46,609,120 -
Vanguard/Wellesley Income Fund
(1,725,532 shares; cost - $32,311,174) 34,062,010 -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Co. 67,869,155 -
Metropolitan Life Ins. Company 17,084,628 -
The Northern Trust Company Collective Short-
Term Investment Fund (221,130 units; cost -
$221,130) 221,130 171,524
Loans to participants 6,900,472 -
Other 7,686 -
-------------------------
Total investments 209,131,249 36,548,572
Receivables:
Employer contributions 9,734,382 1,831,149
Participant contributions 825,463 181,602
Interest and dividends 2,294 421
-------------------------
Total receivables 10,562,139 2,013,172
-------------------------
Liabilities
Amounts owed (to) from other funds - (1,928,625)
Amounts owed (to) from other plans 35,707 -
-------------------------
Net assets available for benefits $219,729,095 $36,633,119
=========================
<CAPTION>
Fixed Income Balanced
Fund Fund
-------------------------
<S> <C> <C>
Assets
Investments:
Mallinckrodt Group Inc. common stock
(935,744 shares; cost - $27,989,301) - -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio
(741,121 shares; cost - $35,094,120) - -
Vanguard/Wellesley Income Fund
(1,725,532 shares; cost - $32,311,174) - 34,062,010
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Co. 67,869,155 -
Metropolitan Life Ins. Company 17,084,628 -
The Northern Trust Company Collective
Short-Term Investment Fund (221,130
units; cost - $221,130) 31,824 5,132
Loans to participants - -
Other 7,686 -
-------------------------
Total investments 84,993,293 34,067,142
Receivables:
Employer contributions 2,547,949 2,105,932
Participant contributions 189,856 181,602
Interest and dividends 1,024 424
--------------------------
Total receivables 2,738,829 2,287,958
--------------------------
Liabilities
Amounts owed (to) from other funds 200,910 (1,649,089)
Amounts owed (to) from other plans 18,619 (2,461)
--------------------------
Net assets available for benefits $ 87,951,651 $34,703,550
==========================
<CAPTION>
S&P 500 Administrative
Index Fund Account
---------------------------
<S> <C> <C>
Assets
Investments:
Mallinckrodt Group Inc. common stock
(935,744 shares; cost - $27,989,301) - -
Mutual Funds:
Vanguard Index Trust - 500 Portfolio
(741,121 shares; cost - $35,094,120) 46,609,120 -
Vanguard/Wellesley Income Fund
(1,725,532 shares; cost - $32,311,174) - -
Group fixed annuity contracts (cost equals
contract value):
Transamerica Occidental Life Ins. Co. - -
Metropolitan Life Ins. Company - -
The Northern Trust Company Collective Short-
Term Investment Fund (221,130 units; cost -
$221,130) 12,650 -
Loans to participants - 6,900,472
Other - -
--------------------------
Total investments 46,621,770 6,900,472
Receivables:
Employer contributions 3,249,352 -
Participant contributions 272,403 -
Interest and dividends 425 -
--------------------------
Total receivables 3,522,180 -
--------------------------
Liabilities
Amounts owed (to) from other funds 3,376,804 -
Amounts owed (to) from other plans 19,549 -
------------------------
Net assets available for benefits $ 53,540,303 $ 6,900,472
========================
</TABLE>
See notes to financial statements.
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Net Assets Available for Benefits
As of June 30, 1995
<TABLE>
<CAPTION>
MGI
Total Stock Fund
------------------------
<S> <C> <C>
Assets
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. Co. 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
------------------------
Liabilities
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>
Assets
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. Co. 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
--------------------------
Liabilities
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>
Assets
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. Co. - -
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 -
----------------------------
Liabilities
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.
<PAGE>
Investment Plan for Employees of Mallinckrodt Group Inc.
Statement of Changes in Net Assets Available for Benefits
Year ended June 30, 1996
<TABLE>
<CAPTION>
MGI
Total Stock Fund
---------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ 570,888 $ 570,888
Mutual funds 2,579,471 -
------------------------
3,150,359 570,888
Interest:
Loans to participants 501,475 115,339
Investments 5,633,156 9,433
-----------------------
6,134,631 124,772
-----------------------
Net investment income 9,284,990 695,660
Net appreciation (depreciation)in
fair value of investments 11,626,554 2,993,454
Contributions:
Employer 12,178,999 2,437,400
Participant 20,704,222 5,741,798
------------------------
Total contributions 32,883,221 8,179,198
Cash and stock distributed to
participants (25,851,649) (5,667,348)
Transfers (to) from other plans 13,321,989 955,459
Transfers of investment direction - (5,168,013)
---------------------------
Net increases 41,265,105 1,988,410
Net assets available for benefits at
beginning of year 178,463,990 34,644,709
---------------------------
Net assets available for benefits at
end of year $219,729,095 $36,633,119
===========================
<CAPTION>
Fixed Income Balanced
Fund Fund
---------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds - 1,767,687
-------------------------
- 1,767,687
Interest:
Loans to participants 189,056 86,755
Investments 5,613,578 4,720
-------------------------
5,802,634 91,475
--------------------------
Net investment income 5,802,634 1,859,162
Net appreciation (depreciation) in
fair value of investments - 1,183,561
Contributions:
Employer 3,216,698 2,617,747
Participant 6,719,050 4,805,121
------------------------
Total contributions 9,935,748 7,422,868
Cash and stock distributed to
participants (15,839,440) (3,987,519)
Transfers (to) from other plans 5,080,823 2,872,253
Transfers of investment direction (1,481,327) (968,093)
-------------------------
Net increases 3,498,438 8,382,232
Net assets available for benefits
at beginning of year 84,453,213 26,321,318
--------------------------
Net assets available for benefits
at end of year $ 87,951,651 $ 34,703,550
==========================
<CAPTION>
S&P 500 Administrative
Index Fund Account
--------------------------
<S> <C> <C>
Net investment income:
Dividends:
Mallinckrodt Group Inc. common stock $ - $ -
Mutual funds 811,784 -
--------------------------
811,784 -
Interest:
Loans to participants 110,325 -
Investments 5,425 -
--------------------------
115,750 -
--------------------------
Net investment income 927,534 -
Net appreciation (depreciation) in
fair value of investments 7,449,539 -
Contributions:
Employer 3,907,154 -
Participant 6,300,865 (2,862,612)
-------------------------
Total contributions 10,208,019 (2,862,612)
Cash and stock distributed to
participants (4,591,928) 4,234,586
Transfers (to) from other plans 4,413,454 -
Transfers of investment direction 7,617,433
- -
------------------------
Net increases 26,024,051 1,371,974
Net assets available for benefits at
beginning of year 27,516,252 5,528,498
-------------------------
Net assets available for benefits at
end of year $53,540,303 $6,900,472
=========================
</TABLE>
See notes to financial statements.
<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
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
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
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.
Investment Plan for Employees of Mallinckrodt Group Inc.
Notes to Financial Statements
Years ended June 30, 1996 and 1995
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 percent 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
percent. Total after-tax and pretax contributions cannot exceed 15
percent of a participant's base monthly salary.
The Plan is also funded by employer contributions of not less than 20
percent of a participant's eligible contributions. Contributions
that do not exceed 6 percent 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 100 percent of
participants' eligible contributions for the year ended June 30,1996,
and 105 percent for the year ended June 30, 1995.
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, 1996 and 1995.
All new contributions to the Fixed Income Fund are invested 75
percent in the Transamerica contract and 25 percent 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, 1996, is 6.85 percent, 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 rate
for the contract year beginning January 1, 1996, is 6.15 percent, net
of investment management fees.
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
percent 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 percent-25 percent 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
percent 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 percent 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 percent-25 percent 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.
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 participants
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 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.
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 percent) 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.
3. 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:
June 30
1996 1995
--------------------------------
Net assets available for benefits
per the financial statements $219,729,095 $178,463,990
Amounts allocated to withdrawing
participants (2,423,518) (2,843,814)
---------------------------------
Net assets available for benefits
per the Form 5500 $217,305,577 $175,620,176
=================================
Amounts allocated to withdrawing participants by fund option are as
follows:
June 30
1996 1995
---------------------------------
Mallinckrodt stock fund $ 311,845 $ 502,248
Fixed income fund 1,616,629 1,315,000
Balanced fund 223,058 548,790
S&P 500 index fund 271,986 477,776
---------------------------------
$2,423,518 $2,843,814
=================================
The following is a reconciliation of cash and stock distributed to
participants per the financial statements to the Form 5500:
Year ended
June 30,
1996
---------------
Cash and stock distributed to participants per the
financial statements $25,851,649
Add amounts allocated to withdrawing participants
at June 30, 1996 2,423,518
Less amounts allocated to withdrawing participants
at June 30, 1995 (2,843,814)
---------------
Cash and stock distributed to participants per the
Form 5500 $25,431,353
===============
4. 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.
5. Transactions With Parties-in-Interest
The only transactions with parties-in-interest were purchases and
sales of assets (including Northern's Collective Short-Term
Investment Fund) through The Northern Trust Company. Northern's fees
are based on customary and reasonable rates for such services and are
paid by the Plan.
6. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts within the
financial statements, as well as amounts disclosed in the notes.
While the Company uses its best estimates and judgments, actual
results could differ from these estimates.
<PAGE>
Schedule I
Investment Plan for Employees of Mallinckrodt Group Inc.
Assets Held for Investment
As of June 30, 1996
Fair
Description Number of Shares Cost Value
- ---------------------------------------------------------------------
Mallinckrodt Group Inc.
Common stock 935,744 $27,989,301 $36,377,048
Vanguard Index Trust -
500 Portfolio 741,121 35,094,120 46,609,120
Vanguard/Wellesley Income Fund 1,725,532 32,311,174 34,062,010
Group fixed annuity contracts:
Transamerica Occidental Life
Insurance Company:
GAC #005100200 67,869,155 67,869,155
Metropolitan Life Insurance
Company:
GAC #12826 17,084,628 17,084,628
The Northern Trust Company
Collective Short-Term Investment
Fund 221,130 221,130
Loans to participants 6,900,472 6,900,472
High Valley L.P. note 84-1311 7,686 7,686
--------------------------
Total investments $187,477,666 $209,131,249
==========================
<PAGE>
Schedule II
Investment Plan for Employees of Mallinckrodt Group Inc.
Reportable Transactions
Year ended June 30, 1996
<TABLE>
<CAPTION>
8
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 Co.
Collective Short-Term
Investment Fund (1) 328 $58,625,935 236 $58,756,991 $58,756,991 $ -
Mallinckrodt Group Inc.
Common Stock 24 6,711,136 15 3,840,101 2,989,635 850,466
Vanguard Index Trust
500 Portfolio 33 17,418,151 15 3,431,526 2,659,593 771,933
Vanguard/Wellesley
Income Fund 30 11,357,300 10 2,180,919 2,022,973 157,946
Group fixed annuity
contract with
Transamerica Occidental
Life and Annuity
Company (1):
GAC #005100200 33 15,249,380 32 11,173,743 11,173,743 -
Group fixed annuity
contract with
Metropolitan Life
Insurance Company (1):
GAC #12826 34 4,555,902 19 3,643,534 3,643,534 -
</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, 1996.
<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 22, 1996, 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, 1996.
November 22, 1996
