SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 11-K
--------------------------------
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]. For the transition period from ____________ to
- --------------.
Commission File Number 1-4235.
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
MERIT Plan of Benefits
M/A-COM, Inc.
1011 Pawtucket Boulevard
Lowell, MA 01853-3295
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
AMP Incorporated
470 Friendship Road
Harrisburg, Pennsylvania 17111
Includes an Exhibit Index
REQUIRED INFORMATION
The MERIT Plan of Benefits (the "Plan") of M/A-COM, Inc., a wholly owned
subsidiary of AMP Incorporated, is a plan that is subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"), and therefore the Plan is
providing, as Exhibit 1 hereto, Plan financial statements and schedules prepared
in accordance with the financial reporting requirements of ERISA. These
financial statements include audited statements of net assets available for
benefits at December 31, 1996 and December 31, 1995, and audited statements of
changes in net assets available for benefits for the fiscal year ended December
31, 1996.
The Plan financial statements have been examined by Arthur Andersen LLP. A
currently dated and manually signed written consent of Arthur Andersen LLP with
respect to the Plan financial statements that relate to the fiscal years ended
December 31, 1996 and December 31, 1995, respectively, and the Plan financial
statements themselves, have been incorporated by reference in a Registration
Statement on Form S-8 under the Securities Act of 1933, as amended. This written
consent of Arthur Andersen LLP is provided as Exhibit 2 to this annual report.
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
MERIT Plan of Benefits (the "Plan")
M/A-COM, Inc. Benefits Committee (Plan Administrator)
Date: June 26, 1997 By:_______________________________
Larry Ward
Chairman
Benefits Committee
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
1 Audited financial statements for MERIT Plan
of Benefits
2 Consent of Independent Public Accountants
EXHIBIT 1
AUDITED FINANCIAL STATEMENTS FOR
MERIT PLAN OF BENEFITS
M/A-COM, Inc.
MERIT Plan of Benefits
Financial Statements
As of December 31, 1996 and 1995
Together with Auditor's Report
M/A-COM, Inc.
MERIT Plan of Benefits
Index to Financial Statements and Supplemental Schedules
===============================================================================
Report of Independent Public Accountants
Financial Statements:
Statement of Net Assets Available for Plan Benefits:
December 31, 1996
December 31, 1995
Statement of Changes in Net Assets Available for Plan Benefits:
Year Ended December 31, 1996
Year Ended December 31, 1995
Notes to Financial Statements
Supplemental Schedules:
Schedule I - Item 27(a) - Assets Held for Investment Purposes at
December 31, 1996
Schedule II - Item 27(d) - Reportable Transactions for the Year Ended
December 31, 1996
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Participants and Administrator of the M/A-COM, Inc. MERIT Plan of
Benefits:
We have audited the accompanying statements of net assets available for plan
benefits of the M/A-COM, Inc. MERIT Plan of Benefits as of December 31, 1996 and
1995, and the related statements of changes in net assets available for plan
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 plan benefits of the
M/A-COM, Inc. MERIT Plan of Benefits as of December 31, 1996 and 1995, and the
changes in net assets available for plan benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and the changes in net assets available for plan benefits of each fund.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Philadelphia, Pa.,
May 9, 1997
<TABLE>
<CAPTION>
M/A-COM, Inc.
MERIT Plan of Benefits
Statement of Net Assets Available for Plan Benefits
December 31, 1996
Vanguard
Money Market Vanguard Vanguard Vanguard
Reserves - Vanguard/ Index International Bond Vanguard
Prime Wellington Trust - Growth Index U.S. Growth
Portfolio Fund 500 Portfolio Portfolio Fund Portfolio
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Shares of registered investment
companies, fair value $ 33,458,386 $ 24,503,755 $ 19,534,767 $ 8,123,218 $ 5,420,565 $12,711,704
Company Stock Fund, fair value -- -- -- -- -- --
Participant loans receivable,
fair value -- -- -- -- -- --
Other receivables:
Employees' contributions 144,825 100,361 92,047 41,332 24,673 63,650
Employer's contribution -- -- -- -- -- --
Loan and interest payments 83,930 44,337 33,274 19,472 9,344 24,859
------------ ------------ ------------ ----------- ----------- -----------
Net Assets Available for
Benefits $ 33,687,141 $ 24,648,453 $ 19,660,088 $ 8,184,022 $ 5,454,582 $12,800,213
============ ============ ============ =========== =========== ===========
Statement of Net Assets Available for Plan Benefits
December 31, 1996 - CONTINUED
Vanguard
Asset Vanguard Participant
Allocation Vanguard/ Explorer Company Loans
Fund Windsor II Fund Stock Fund Receivable Total
ASSETS
<C> <C> <C> <C> <C> <C>
Shares of registered investment
companies, fair value $ 2,756,799 $ 5,240,208 $ 2,361,528 $ -- $ -- $114,110,930
Company Stock Fund, fair value -- -- -- 15,652,557 -- 15,652,557
Participant loans receivable,
fair value -- -- -- -- 6,244,714 6,244,714
Other receivables:
Employees' contributions 19,905 38,327 21,572 2,962 -- 549,654
Employer's contribution -- -- -- 344,011 -- 344,011
Loan and interest payments 3,907 10,163 6,097 932 -- 236,315
------------ ----------- ----------- ----------- ----------- ------------
Net Assets Available for
Benefits $ 2,780,611 $ 5,288,698 $ 2,389,197 $16,000,462 $ 6,244,714 $137,138,181
============ =========== =========== =========== =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
</TABLE>
<TABLE>
<CAPTION>
M/A-COM, Inc.
MERIT Plan of Benefits
Statement of Net Assets Available for Plan Benefits
December 31, 1995
Vanguard
Money Market Vanguard Vanguard Vanguard
Reserves - Vanguard/ Index International Bond Vanguard
Prime Wellington Trust - Growth Index U.S. Growth
Portfolio Fund 500 Portfolio Portfolio Fund Portfolio
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Shares of registered investment
companies, fair value $ 34,347,249 $ 23,134,863 $ 16,045,332 $ 7,460,041 $ 5,539,187 $ 9,813,606
Company Stock Fund, fair value -- -- -- -- -- --
Participant loans receivable,
fair value -- -- -- -- -- --
Other receivables:
Employees' contributions 150,824 85,388 64,528 36,346 22,872 46,410
Employer's contribution -- -- -- -- -- --
Loan and interest payments 82,741 47,632 27,968 22,239 9,127 25,279
------------ ------------ ------------ ----------- ----------- -----------
Net Assets Available for
Benefits $ 34,580,814 $ 23,267,883 $ 16,137,828 $ 7,518,626 $ 5,571,186 $ 9,885,295
============ ============ ============ =========== =========== ===========
Statement of Net Assets Available for Plan Benefits
December 31, 1995 - CONTINUED
Vanguard
Asset Vanguard Participant
Allocation Vanguard/ Explorer Company Loans
Fund Windsor II Fund Stock Fund Receivable Total
ASSETS
<C> <C> <C> <C> <C> <C>
Shares of registered investment
companies, fair value $ 2,557,152 $ 2,884,729 $ 1,620,998 $ -- $ -- $103,403,157
Company Stock Fund, fair value -- -- -- 13,250,164 -- 13,250,164
Participant loans receivable,
fair value -- -- -- -- 5,466,496 5,466,496
Other receivables:
Employees' contributions 9,734 16,798 12,053 -- -- 444,953
Employer's contribution -- -- -- 306,154 -- 306,154
Loan and interest payments 2,142 7,938 4,578 -- -- 229,644
------------ ----------- ----------- ------------ ----------- ------------
Net Assets Available for
Benefits $ 2,569,028 $ 2,909,465 $ 1,637,629 $ 13,556,318 $ 5,466,496 $123,100,568
============ =========== =========== ============ =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
</TABLE>
<TABLE>
<CAPTION>
M/A-COM, Inc.
MERIT Plan of Benefits
Statement of Changes in Net Assets Available for Plan Benefits
Year Ended December 31, 1996
Vanguard
Money Market Vanguard Vanguard Vanguard
Reserves - Vanguard/ Index International Bond Vanguard
Prime Wellington Trust - Growth Index U.S. Growth
Portfolio Fund 500 Portfolio Portfolio Fund Portfolio
<S> <C> <C> <C> <C> <C> <C>
Additions:
Interest and dividends $ 1,731,762 $ 1,946,958 $ 431,304 $ 347,472 $ 366,005 $ 931,112
Net appreciation (depreciation)
of investments -- 1,610,593 3,282,249 737,512 (153,792) 1,629,396
------------ ------------ ----------- ---------- ---------- -----------
1,731,762 3,557,551 3,713,553 1,084,984 212,213 2,560,508
------------ ------------ ----------- ---------- ---------- -----------
Contributions:
Employer -- -- -- -- -- --
Employee 1,983,319 1,256,039 1,151,878 541,920 337,721 763,849
------------ ------------ ----------- ---------- ---------- -----------
1,983,319 1,256,039 1,151,878 541,920 337,721 763,849
------------ ------------ ----------- ---------- ---------- -----------
Total additions 3,715,081 4,813,590 4,865,431 1,626,904 549,934 3,324,357
------------ ------------ ----------- ---------- ---------- -----------
Deductions:
Benefit payments to beneficiaries
and participants 3,067,107 2,618,388 1,846,321 799,960 582,099 966,616
Administrative expenses 17,058 6,403 3,976 3,519 1,349 2,984
------------ ------------ ----------- ---------- ---------- -----------
Total deductions 3,084,165 2,624,791 1,850,297 803,479 583,448 969,600
------------ ------------ ----------- ---------- ---------- -----------
Net increase (decrease) 630,916 2,188,799 3,015,134 823,425 (33,514) 2,354,757
Net interfund transfers (1,524,589) (808,229) 507,126 (158,029) (83,090) 560,161
Net assets available for benefits:
Beginning of year 34,580,814 23,267,883 16,137,828 7,518,626 5,571,186 9,885,295
------------ ------------ ----------- ---------- ---------- -----------
End of year $ 33,687,141 $ 24,648,453 $19,660,088 $8,184,022 $5,454,582 $12,800,213
============ ============ =========== ========== ========== ===========
Statement of Changes in Net Assets Available for Plan Benefits
Year Ended December 31, 1996 - CONTINUED
Vanguard
Asset Vanguard Company Participant
Allocation Vanguard/ Explorer Stock Loans
Fund Windsor II Fund Fund Receivable Total
<C> <C> <C> <C> <C> <C>
Additions:
Interest and dividends $ 247,564 $ 368,352 $ 126,110 $ 337,198 $ 478,876 $ 7,312,713
Net appreciation (depreciation)
of investments 126,848 541,692 91,611 (15,162) -- 7,850,947
---------- ---------- ---------- ----------- ---------- ------------
374,412 910,044 217,721 322,036 478,876 15,163,660
---------- ---------- ---------- ----------- ---------- ------------
Contributions:
Employer -- -- -- 3,991,065 -- 3,991,065
Employee 232,799 406,644 245,487 22,023 -- 6,941,679
---------- ---------- ---------- ----------- ---------- ------------
232,799 406,644 245,487 4,013,088 -- 10,932,744
---------- ---------- ---------- ----------- ---------- ------------
Total additions 607,211 1,316,688 463,208 4,335,124 478,876 26,096,404
---------- ---------- ---------- ----------- ---------- ------------
Deductions:
Benefit payments to beneficiaries
and participants 338,346 413,564 105,123 907,093 366,357 12,010,974
Administrative expenses 711 1,236 957 8,844 780 47,817
---------- ---------- ---------- ----------- ---------- ------------
Total deductions 339,057 414,800 106,080 915,937 367,137 12,058,791
---------- ---------- ---------- ----------- ---------- ------------
Net increase (decrease) 268,154 901,888 357,128 3,419,187 111,739 14,037,613
Net interfund transfers (56,571) 1,477,345 394,440 (975,043) 666,479 --
Net assets available for benefits:
Beginning of year 2,569,028 2,909,465 1,637,629 13,556,318 5,466,496 123,100,568
---------- ---------- ---------- ----------- ---------- ------------
End of year $2,780,611 $5,288,698 $2,389,197 $16,000,462 $6,244,714 $137,138,181
========== ========== ========== =========== ========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
</TABLE>
<TABLE>
<CAPTION>
M/A-COM, Inc.
MERIT Plan of Benefits
Statement of Changes in Net Assets Available for Plan Benefits
Year Ended December 31, 1995
Vanguard
Money Market Vanguard Vanguard Vanguard
Reserves - Vanguard/ Index International Bond Vanguard
Prime Wellington Trust - Growth Index U.S. Growth
Portfolio Fund 500 Portfolio Portfolio Fund Portfolio
<S> <C> <C> <C> <C> <C> <C>
Additions:
Interest and dividends $ 1,995,509 $ 1,148,617 $ 361,526 $ 197,845 $ 365,184 $ 398,841
Net appreciation (depreciation)
of investments -- 4,619,741 3,825,374 777,978 532,372 2,214,174
------------ ------------ ----------- ---------- ---------- ----------
1,995,509 5,768,358 4,186,900 975,823 897,556 2,613,015
------------ ------------ ----------- ---------- ---------- ----------
Contributions:
Employer -- -- -- -- -- --
Employee 2,258,822 1,259,380 900,113 549,072 368,765 623,089
------------ ------------ ----------- ---------- ---------- ----------
2,258,822 1,259,380 900,113 549,072 368,765 623,089
------------ ------------ ----------- ---------- ---------- ----------
Total additions 4,254,331 7,027,738 5,087,013 1,524,895 1,266,321 3,236,104
------------ ------------ ----------- ---------- ---------- ----------
Deductions:
Benefit payments to beneficiaries
and participants 3,902,563 1,469,451 1,039,126 606,108 523,051 993,320
Administrative expenses 19,647 6,687 3,577 3,614 1,589 2,597
------------ ------------ ----------- ---------- --------- ----------
Total deductions 3,922,210 1,476,138 1,042,703 609,722 524,640 995,917
------------ ------------ ----------- ---------- ---------- ----------
Net increase (decrease) 332,121 5,551,600 4,044,310 915,173 741,681 2,240,187
Net interfund transfers (742,868) (414,913) 1,126,049 (1,141,596) (374,714) 1,181,179
Net assets available for benefits:
Beginning of year 34,991,561 18,131,196 10,967,469 7,745,049 5,204,219 6,463,929
------------ ------------ ----------- ---------- ---------- ----------
End of year $ 34,580,814 $ 23,267,883 $16,137,828 $7,518,626 $5,571,186 $9,885,295
============ ============ =========== ========== ========== ==========
Statement of Changes in Net Assets Available for Plan Benefits
Year Ended December 31, 1995 - CONTINUED
Vanguard
Asset Vanguard Company Participant
Allocation Vanguard/ Explorer Stock Loans
Fund Windsor II Fund Fund Receivable Total
<C> <C> <C> <C> <C> <C>
Additions:
Interest and dividends $ 172,054 $ 149,476 $ 126,507 $ 122,008 $ 412,657 $ 5,450,224
Net appreciation (depreciation)
of investments 376,390 427,795 201,166 3,762,166 -- 16,737,156
------------ ---------- ---------- ----------- ---------- ------------
548,444 577,271 327,673 3,884,174 412,657 22,187,380
------------ ---------- ---------- ----------- ---------- ------------
Contributions:
Employer -- -- -- 3,848,491 -- 3,848,491
Employee 152,310 189,667 192,985 -- -- 6,494,203
------------ ---------- ---------- ----------- ---------- ------------
152,310 189,667 192,985 3,848,491 -- 10,342,694
------------ ---------- ---------- ----------- ---------- ------------
Total additions 700,754 766,938 520,658 7,732,665 412,657 32,530,074
------------ ---------- ---------- ----------- ---------- ------------
Deductions:
Benefit payments to beneficiaries
and participants 26,207 373,134 142,272 723,759 413,532 10,212,523
Administrative expenses 481 623 585 8,163 -- 47,563
------------ ---------- ---------- ----------- ---------- ------------
Total deductions 26,688 373,757 142,857 731,922 413,532 10,260,086
------------ ---------- ---------- ----------- ---------- ------------
Net increase (decrease) 674,066 393,181 377,801 7,000,743 (875) 22,269,988
Net interfund transfers 418,104 1,272,058 44,677 (1,219,558) (148,418) --
Net assets available for benefits:
Beginning of year 1,476,858 1,244,226 1,215,151 7,775,133 5,615,789 100,830,580
------------ ---------- ---------- ----------- --------- ------------
End of year $ 2,569,028 $2,909,465 $1,637,629 $13,556,318 $5,466,496 $123,100,568
============ ========== ========== =========== ========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.
</TABLE>
M/A-COM, Inc.
MERIT Plan of Benefits
Notes to Financial Statements
1. Description of the Plan
The following is a general description of the MERIT Plan of Benefits (the
Plan) established by M/A-COM, Inc. (the Company) effective October 1, 1990
and most recently amended on June 11, 1996. Refer to the Plan document for
more information.
Vanguard Fiduciary Trust Company (Trustee) is the trustee and recordkeeper
of the Plan.
The Plan is a defined contribution retirement benefit plan subject to the
Employee Retirement Income Security Act of 1974 (ERISA), as amended, and
administered by a Benefits Committee (the Committee) appointed by the Chief
Executive Officer of the Company, the Plan Sponsor. The Plan is designed to
qualify as a profit-sharing plan for purposes of Sections 401(a), 402, 412
and 417 of the Internal Revenue Code of 1986 (the Code), and to contain a
cash or deferred arrangement intended to qualify under Section 401(k) of
the Code. The Plan covers all eligible employees of participating
subsidiaries of the Company who meet certain requirements as to length of
service.
On June 30, 1995, the Company was merged with and into AMP Incorporated
(AMP) and became a wholly-owned subsidiary of AMP, which had little impact
on the Plan.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements of the Plan have been prepared on the
accrual basis of accounting.
Investments
Participants may select from nine Vanguard investment options as well as
the Company Stock Fund. The investment options available are the Vanguard
Money Market Reserves - Prime Portfolio (pooled money market fund),
Vanguard Bond Index Fund (income fund), Vanguard/Wellington Fund (balanced
fund), Vanguard Index Trust - 500 Portfolio (growth and income fund),
Vanguard U.S. Growth Portfolio (growth fund), Vanguard International Growth
Portfolio (growth fund), Vanguard/Windsor II (growth and income fund),
Vanguard Explorer Fund (small company growth) and Vanguard Asset Allocation
Fund (balanced fund). The investments are stated at fair value determined
by quoted market prices which represent the net asset value of shares held
by the Plan at year-end, as reported by the Trustee.
The Company Stock Fund was established for the purpose of allowing Company
matching contributions to be made in the form of AMP common stock.
Effective July 1, 1996, the Plan was amended to include the Company Stock
Fund as an investment option for participant contributions. At any time,
this fund may consist of shares of AMP common stock, a receivable/payable
amount for transactions in process and a small balance in a money market
fund to meet current cash requirements. The value of the fund is expressed
in terms of a unit value which fluctuates with the value of the AMP common
stock in the fund. The value of this fund is based on the unit closing
price at the Plan year end, as reported by the Trustee.
The fair value of participant loans receivable is unpaid principal balances
plus accrued interest at the Plan year end, as reported by the Trustee.
Purchases and sales of securities are recorded on the trade date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date. Net appreciation (depreciation) of investments
include realized and unrealized gains and losses on investment
transactions.
Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingencies, and the reported amounts of changes in net
assets. Actual results could differ from these estimates.
Administrative Expenses
All expenses incurred in the administration of the Plan, other than legal
and certain other expenses which are paid by the Company, are charged to
and paid by the Plan.
Payment of Benefits
Refer to Plan document for the various methods of benefit payments.
Benefits are recorded when paid.
3. Contribution Policy
General
Benefits provided to participants under the Plan are based upon the level
of their Plan contributions and their investment selections. Non-highly
compensated Plan participants, as defined in Section 414 of the Code, may
contribute between 2% and 14% of their annual before-tax compensation to
the Plan subject to Internal Revenue Service (IRS) limitations. Highly
compensated participants, as defined in Section 414 of the Code, may
contribute between 2% and 6% of their annual before-tax compensation to the
Plan provided, however, that the Company reserves the right to increase or
decrease the maximum percentage within the range of 6% and 14% applicable
to such highly compensated employees from time to time during, and for the
remainder of, the Plan year subject to IRS limitations.
The Company makes matching contributions of 50% of participants'
contributions for participants with six months but less than five years of
service, 66 2/3% for five but less than ten years of service and 100% for
ten or more years of service, but only to the extent deductible for federal
income tax purposes and disregarding any contributions in excess of 6% of a
participant's annual before-tax compensation. In order to maintain the
Plan's tax qualified status, the Plan Administrator retains the right, if
necessary, to reduce the contributions made on behalf of certain
participants.
Contributions are recorded in the period in which payroll deductions are
made.
Vesting
Contributions made by participants are fully vested at all times. Company
matching contributions are vested based on a participant's years of
credited service. A year of service is defined by the Plan document as a
year in which the participant has worked 1,000 hours or more. The vesting
schedule for Company contributions is as follows:
Years of credited service Percent vested
Less than 2 0%
2 25%
3 50%
4 75%
5 or more 100%
Forfeitures may be utilized to reduce the Company's matching contributions.
Forfeitures being held at December 31, 1996 and December 31, 1995 were
$90,200 and $72,800 respectively. The Company used $72,800 and $79,800 to
reduce matching contributions for the year ended December 31, 1996 and
December 31, 1995, respectively.
Although the Company has no intention to do so, it reserves the right to
terminate the Plan at any time. Upon Plan termination, participants become
100% vested in their account balances.
4. Participant Loan Program
Active Plan participants may borrow on their vested account balances. The
loan feature of the Plan includes the following provisions:
Minimum Loan: $500
Maximum Loan: Lesser of: 50% of the
participant's vested account
balance at the time of the
loan or $50,000 reduced by the
highest outstanding balance of
any loans to the participant
during the preceding 12
months.
Term of Loan: Five year maximum term; early
repayment without penalty is
allowed.
Interest: Reasonable rate of interest in
accordance with standards
established by the Committee.
Loans specifically attributed to the Plan at December 31, 1996 and December
31, 1995 were $6,244,714 and $5,466,496, respectively. Interest rates range
from 7.0% to 10.0% and 7.0% to 10.5% for loans outstanding at December 31,
1996 and December 31, 1995, respectively.
5. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated September 20, 1995, that the Plan is qualified under the
appropriate sections of the Code and the Plan as amended effective January
1, 1992 is in compliance with amendments required by the Tax Reform Act of
1986. The Plan has been amended since applying for the determination
letter. The Plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Code. Therefore, they believe that the Plan
continues to be qualified and the related trust was tax-exempt as of the
financial statement date. Accordingly, there is no provision for income
taxes in the accompanying financial statements.
6. Investments
All Plan investments are held by Vanguard Fiduciary Trust Company and
consist of shares of various Vanguard mutual funds, company stock, and
participant loans receivables. The following is a list of assets which
exceed 5% of net assets at December 31, 1996 and 1995.
December 31, December 31,
1996 1995
---- ----
Vanguard Fiduciary Trust Company:
Vanguard Money Market Reserves -
Prime Portfolio $33,458,386 $34,347,249
Vanguard/Wellington Fund 24,503,755 23,134,863
Vanguard Index Trust -
500 Portfolio 19,534,767 16,045,332
Vanguard International
Growth Portfolio 8,123,218 7,460,041
Vanguard U.S. Growth Portfolio 12,711,704 9,813,606
Company Stock Fund 15,652,557 13,250,164
M/A-COM, Inc. Supplemental
MERIT Plan of Benefits Schedule I
Item 27(a) - Assets Held for Investment Purposes EIN: 04-2090644
at December 31, 1996 PIN: 008
Shares/Units Current
or Participation Cost Value
Vanguard Fiduciary Trust Company:
* Vanguard Money Market Reserves -
Prime Portfolio 33,458,386 $33,458,386 $33,458,386
* Vanguard/Wellington Fund 937,046 19,079,625 24,503,755
* Vanguard Index Trust -
500 Portfolio 282,458 12,565,648 19,534,767
* Vanguard International
Growth Portfolio 493,513 6,254,275 8,123,218
* Vanguard Bond Index Fund 550,870 5,351,606 5,420,565
* Vanguard U.S. Growth
Portfolio 535,455 9,152,967 12,711,704
* Vanguard Asset Allocation
Fund 153,668 2,522,417 2,756,799
* Vanguard/Windsor II 219,900 4,533,975 5,240,208
* Vanguard Explorer Fund 43,870 2,215,305 2,361,528
Company Stock Fund 976,454 12,584,398 15,652,557
Participant loans receivable
maturing within six months to
five years with interest rates
ranging from 7.0% to 10.0% 885 6,244,714 6,244,714
------------ ------------
$113,963,316 $136,008,201
============ ============
* Represents a party in interest.
10
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<CAPTION>
M/A-COM, Inc. Supplemental
MERIT Plan of Benefits Schedule II
Item 27(d) - Reportable Transactions EIN: 04-2090644
for the Year Ended December 31, 1996 PIN: 008
Current
Value on
Party in Description No. of Purchase No. of Selling Cost of Transaction Net Gain
Interest of Assets Purchases Price Sales Price Asset Date
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Vanguard Fiduciary Vanguard Money Market
Trust Company Reserves - Prime Portfolio 212 $8,313,477 229 $9,202,340 $9,202,340 $9,202,340 $ --
Vanguard Fiduciary Company Stock Fund 57 5,249,682 177 2,832,129 2,318,266 2,832,129 513,863
Trust Company
Vanguard Fiduciary Vanguard/Wellington Fund 151 4,889,564 202 5,131,266 4,090,868 5,131,266 1,040,398
Trust Company
Vanguard Fiduciary Vanguard Index Trust-500 166 3,556,935 176 3,349,748 2,424,081 3,349,748 925,667
Trust Company Portfolio
Vanguard Fiduciary Vanguard U.S. Growth Portfolio 164 3,918,449 167 2,649,745 2,042,466 2,649,745 607,279
Trust Company
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EXHIBIT 2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMP Incorporated:
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 11-K, into the Company's previously filed
Registration Statement File No. 333-06767.
/s/ Arthur Andersen LLP
Philadelphia, PA
June 26, 1997
