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.
For the fiscal year ended December 31, 1998.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
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:
AMP Incorporated Employee Savings and Thrift Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Tyco International Ltd.
The Gibbons Bulding
10 Queen Street, Suite 301
Hamilton HM11 Bermuda*
* The executive offices of the issuer's principal United States subsidiary,
Tyco International (US) Inc., are located at One Tyco Park, Exeter, New
Hampshire 03833-1108. The telephone number there is (603) 778-9700.
Includes an Exhibit Index
REQUIRED INFORMATION
The AMP Incorporated Employee Savings and Thrift Plan (the "Plan") 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, 1998 and
December 31, 1997, and audited statements of changes in net assets available for
benefits for the fiscal year ended December 31, 1998.
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 year ended
December 31, 1998, 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.
AMP Incorporated Employee Savings
and Thrift Plan (the "Plan")
AMP Incorporated (Plan Administrator)
/s/ D. F. Henschel
Date: June 29, 1999 By:_______________________________
David F. Henschel
Secretary
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
1 Audited financial statements for AMP Incorporated
Employee Savings and Thrift Plan
2 Consent of Independent Public Accountants
AMP INCORPORATED EMPLOYEE SAVINGS AND
THRIFT PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH AUDITORS' REPORT
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31,
1998 and 1997
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1998
Notes to Financial Statements
SCHEDULES:
Schedule I -- Item 27(a) -- Schedule of Investments as of December 31,
1998
Schedule II -- Item 27(d) -- Schedule of Reportable Transactions for the
Year Ended December 31, 1998
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrator of the
AMP Incorporated Employee Savings and Thrift Plan:
We have audited the accompanying statements of net assets available for
benefits of the AMP Incorporated Employee Savings and Thrift Plan as of December
31, 1998 and 1997, and the related statement of changes in net assets available
for the year ended December 31, 1998. 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 as
of December 31, 1998 and 1997, and the changes in net assets available for
benefits for the year ended December 31, 1998, 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 listed
in the accompanying index 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 Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for plan benefits and 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.
/s/ Arthur Andersen LLP
Philadelphia, PA
June 16, 1999
<TABLE>
<CAPTION>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
| The Vanguard Group Funds
| ------------------------
| Money Market Index Trust
ASSETS Total | Prime Wellington 500 Windsor II PrimeCap
------ ----- | ------------- ------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $727,005,368 $52,379,635 $83,484,134 $252,884,883 $73,510,858 $104,188,273
Common stock 104,848,875 -- -- -- -- --
Participant loans
(Note 1) 38,749,050 -- -- -- -- --
------------- ----------- ----------- ------------ ----------- ------------
870,603,293 52,379,635 83,484,134 252,884,883 73,510,858 104,188,273
------------- ----------- ----------- ------------ ----------- ------------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) 145,235,245 -- -- -- -- --
------------- ----------- ----------- ------------ ----------- ------------
Total investments 1,015,838,538 52,379,635 83,484,134 252,884,883 73,510,858 104,188,273
------------- ----------- ----------- ------------ ----------- ------------
RECEIVABLES:
Employer contributions
(Note 1) 250,519 7,080 18,976 47,537 20,956 32,945
Employee deposits
(Note 1) 794,204 20,710 64,946 178,434 73,785 118,335
Other 538,449 -- -- -- -- --
------------- ----------- ----------- ------------ ----------- ------------
Total receivables 1,583,172 27,790 83,922 225,971 94,741 151,280
------------- ----------- ----------- ------------ ----------- ------------
TOTAL ASSETS 1,017,421,710 52,407,425 83,568,056 253,110,854 73,605,599 104,339,553
------------- ----------- ----------- ------------ ----------- ------------
LIABILITIES
-----------
PAYABLES:
Investments purchased 473,815 -- -- -- -- --
-------------- ----------- ----------- ------------ ------------ -----------
NET ASSETS AVAILABLE
FOR BENEFITS $1,016,947,895 $52,407,425 $83,568,056 $253,110,854 $73,605,599 $104,339,553
============== =========== =========== ============ ============ ============
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
CONTINUED
The Vanguard Group Funds cont'd. |
------------------------------------------------------------ |
World Fund International Asset Total Bond | T. Rowe Price
ASSETS U.S. Growth Growth Allocation Market Index | New Horizons
------ ----------- ------------- ---------- ------------ | -------------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $87,741,083 $15,626,204 $6,409,603 $15,102,848 $10,520,857
Common stock -- -- -- -- --
Participant loans
(Note 1) -- -- -- -- --
----------- ----------- ---------- ----------- -----------
87,741,083 15,626,204 6,409,603 15,102,848 10,520,857
----------- ----------- ---------- ----------- -----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) -- -- -- -- --
----------- ----------- ---------- ----------- -----------
Total investments 87,741,083 15,626,204 6,409,603 15,102,848 10,520,857
----------- ----------- ---------- ----------- -----------
RECEIVABLES:
Employer contributions
(Note 1) 20,654 3,849 412 2,065 4,652
Employee deposits
(Note 1) 71,814 12,116 1,524 7,266 15,293
Other -- -- -- -- --
----------- ----------- ---------- ----------- -----------
Total receivables 92,468 15,965 1,936 9,331 19,945
----------- ----------- ---------- ----------- -----------
TOTAL ASSETS 87,833,551 15,642,169 6,411,539 15,112,179 10,540,802
----------- ----------- ---------- ----------- -----------
LIABILITIES
-----------
PAYABLES:
Investments purchased -- -- -- -- --
----------- ----------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $87,833,551 $15,642,169 $6,411,539 $15,112,179 $10,540,802
=========== =========== ========== =========== ===========
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
CONTINUED
AMP Fixed AMP Stock
Income Fund Fund Loan Fund
----------- --------- ---------
<S> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $ 25,156,890 $ 100 $ --
Common stock -- 104,848,875 --
Participant loans
(Note 1) -- -- 38,749,050
------------ ------------ -----------
25,156,890 104,848,975 38,749,050
------------ ------------ -----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) 145,235,245 -- --
------------ ------------ -----------
Total investments 170,392,135 104,848,975 38,749,050
------------ ------------ -----------
RECEIVABLES:
Employer contributions
(Note 1) 61,686 29,707 --
Employee deposits
(Note 1) 201,384 28,597 --
Other -- 538,449 --
------------ ------------ -----------
Total receivables 263,070 596,753 --
------------ ------------ -----------
TOTAL ASSETS 170,655,205 105,445,728 38,749,050
------------ ------------ -----------
LIABILITIES
-----------
PAYABLES:
Investments purchased -- 473,815 --
------------ ------------ -----------
NET ASSETS AVAILABLE
FOR BENEFITS $170,655,205 $104,971,913 $38,749,050
============ ============ ===========
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
| The Vanguard Group Funds
| ------------------------
| Money Market Index Trust
ASSETS Total | Prime Wellington 500 Windsor II PrimeCap
------ ----- | ------------- ------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $484,086,683 $19,226,750 $53,007,329 $190,121,782 $56,798,234 $95,478,987
Common stock 58,152,696 -- -- -- -- --
Participant loans
(Note 1) 33,628,801 -- -- -- -- --
------------ ----------- ----------- ------------ ----------- -----------
575,868,180 19,226,750 53,007,329 190,121,782 56,798,234 95,478,987
------------ ----------- ----------- ------------ ----------- -----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) 174,838,675 -- -- -- -- --
------------ ----------- ----------- ------------ ----------- -----------
Total investments 750,706,855 19,226,750 53,007,329 190,121,782 56,798,234 95,478,987
------------ ----------- ----------- ------------ ----------- -----------
RECEIVABLES:
Employer contributions
(Note 1) 250,518 6,345 17,890 42,456 17,824 31,023
Employee deposits
(Note 1) 794,063 19,821 63,638 165,363 65,597 114,917
Other 494,477 -- -- -- -- --
------------ ----------- ----------- ------------ ----------- -----------
Total receivables 1,539,058 26,166 81,528 207,819 83,421 145,940
------------ ----------- ----------- ------------ ----------- -----------
TOTAL ASSETS 752,245,913 19,252,916 53,088,857 190,329,601 56,881,655 95,624,927
------------ ----------- ----------- ------------ ----------- -----------
LIABILITIES
-----------
PAYABLES:
Investments purchased 681,381 -- -- -- -- --
------------ ----------- ----------- ------------ ------------ -----------
NET ASSETS AVAILABLE
FOR BENEFITS $751,564,532 $19,252,916 $53,088,857 $190,329,601 $56,881,655 $95,624,927
============ =========== =========== ============ ============ ===========
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
CONTINUED
The Vanguard Group Funds |
------------------------ |
World Fund International | T. Rowe Price AMP Fixed AMP Stock
ASSETS U.S. Growth Growth | New Horizons Income Fund Fund Loan Fund
------ ----------- ------------- | ------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $39,710,055 $5,893,731 $10,425,464 $ 12,334,738 $ 1,089,613 $ --
Common stock -- -- -- -- 58,152,696 --
Participant loans
(Note 1) -- -- -- -- -- 33,628,801
----------- ---------- ---------- ------------ ----------- -----------
39,710,055 5,893,731 10,425,464 12,334,738 59,242,309 33,628,801
----------- ---------- ---------- ------------ ----------- -----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) -- -- -- 174,838,675 -- --
----------- ---------- ---------- ------------ ----------- -----------
Total investments 39,710,055 5,893,731 10,425,464 187,173,413 59,242,309 33,628,801
----------- ---------- ---------- ------------ ----------- -----------
RECEIVABLES:
Employer contributions
(Note 1) 14,081 3,272 5,489 75,154 36,984 --
Employee deposits
(Note 1) 50,019 10,425 17,780 254,615 31,888 --
Other -- -- -- -- 422,840 71,637
----------- ---------- ---------- ------------ ----------- -----------
Total receivables 64,100 13,697 23,269 329,769 491,712 71,637
----------- ---------- ---------- ------------ ----------- -----------
TOTAL ASSETS 39,774,155 5,907,428 10,448,733 187,503,182 59,734,021 33,700,438
----------- ---------- ---------- ------------ ----------- -----------
LIABILITIES
-----------
PAYABLES:
Investments purchased -- -- -- -- 681,381 --
----------- ---------- ---------- ------------ ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $39,774,155 $5,907,428 $10,448,733 $187,503,182 $59,052,640 $33,700,438
=========== ========== =========== ============ =========== ===========
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
| The Vanguard Group Funds
| ------------------------
| Money Market Index Trust
Total | Prime Wellington 500 Windsor II PrimeCap
----- | ------------- ------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income-
Net appreciation in
market value of
investments $103,319,500 $ -- $ 146,762 $ 46,892,127 $ 2,581,469 $17,735,803
Interest and dividends 41,719,393 1,510,798 5,970,073 3,389,226 6,232,171 3,953,531
------------ ----------- ----------- ------------ ----------- -----------
145,038,893 1,510,798 6,116,835 50,281,353 8,813,640 21,689,334
------------ ----------- ----------- ------------ ----------- -----------
Contributions and deposits
(Note 1)
Employer 15,163,059 548,078 1,028,973 2,467,014 1,095,384 1,771,935
Employee 55,859,137 1,791,888 5,140,045 13,284,963 5,609,928 9,113,547
------------ ----------- ----------- ------------ ----------- -----------
71,022,196 2,339,966 6,169,018 15,751,977 6,705,312 10,885,482
------------ ----------- ----------- ------------ ----------- -----------
Asset Transfers In (Note 7) 198,186,758 33,769,711 30,255,229 38,825,525 11,234,895 441,807
------------ ----------- ----------- ------------ ----------- -----------
Total additions 414,247,847 37,620,475 42,541,082 104,858,855 26,753,847 33,016,623
------------ ----------- ----------- ------------ ----------- -----------
DEDUCTIONS:
Payments to participants
(Note 1) 148,694,132 5,517,007 9,667,582 32,502,281 7,495,027 10,137,316
Loan maintenance fees 170,352 20,720 29,555 21,405 21,110 18,330
------------ ----------- ----------- ------------ ----------- -----------
Total deductions 148,864,484 5,537,727 9,697,137 32,523,686 7,516,137 10,155,646
INTERFUND TRANSFERS--NET -- 1,071,761 (2,364,746) (9,553,916) (2,513,766) (14,146,351)
------------ ----------- ----------- ------------ ----------- -----------
Net additions
(deductions) 265,383,363 33,154,509 30,479,199 62,781,253 16,723,944 8,714,626
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 751,564,532 19,252,916 53,088,857 190,329,601 56,881,655 95,624,927
------------ ----------- ----------- ------------ ----------- ------------
End of year $1,016,947,895 $52,407,425 $83,568,056 $253,110,854 $73,605,599 $104,339,553
============ =========== =========== ============ =========== ============
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
CONTINUED
The Vanguard Group Funds |
------------------------ |
World Fund International Asset Total Bond | T. Rowe Price
U.S. Growth Growth Allocation Market Index | New Horizons
----------- ------------- ---------- ------------ | -------------
<C> <C> <C> <C> <C>
ADDITIONS:
Investment income-
Net appreciation
(depreciation) in
market value of
investments $12,722,547 $ 805,361 $ 6,339 $ 43,224 $ 13,936
Interest and dividends 3,804,262 130,462 -- 314,862 442,580
----------- ---------- ----------- ---------- ----------
16,526,809 935,823 6,339 358,086 456,516
----------- ---------- ----------- ---------- ----------
Contributions and deposits
(Note 1)
Employer 910,676 195,154 473 68,458 227,149
Employee 4,589,944 847,018 1,867 347,705 1,238,236
----------- ---------- ----------- ---------- ----------
5,500,620 1,042,172 2,340 416,163 1,515,385
----------- ---------- ----------- ---------- ----------
Asset Transfers in (Note 7) 24,934,474 8,897,559 6,403,156 6,960,075 1,816,598
------------ ----------- ----------- ----------- -----------
Total additions 46,961,903 10,875,554 6,411,835 7,734,324 3,788,499
----------- ---------- ----------- ---------- ----------
DEDUCTIONS:
Payments to participants 5,784,950 899,436 -- 1,155,541 839,289
(Note 1)
Loan maintenance fees 3,220 1,310 -- 35 18,386
----------- ---------- ----------- ----------- -----------
Total deductions 5,788,170 900,746 -- 1,155,576 857,675
----------- ----------- ----------- ----------- -----------
INTERFUND TRANSFERS--NET 6,885,663 (240,067) (296) 8,533,431 (2,838,755)
----------- ----------- ----------- ----------- -----------
Net additions
(deductions) 48,059,396 9,734,741 6,411,539 15,112,179 92,069
----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 39,774,155 5,907,428 -- -- 10,448,733
----------- ----------- ----------- ----------- -----------
End of year $87,833,551 $15,642,169 $6,411,539 $15,112,179 $10,540,802
=========== =========== =========== =========== ===========
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
CONTINUED
AMP Fixed AMP Stock
Income Fund Fund Loan Fund
----------- --------- ---------
ADDITIONS: <C> <C> <C>
Investment income-
Net appreciation
(depreciation) in
market value of
investments $ -- $ 22,371,932 $ --
Interest and dividends 11,359,854 1,662,549 2,949,025
------------ ----------- -----------
11,359,854 24,034,481 2,949,025
------------ ----------- -----------
Contributions and deposits
(Note 1)
Employer 2,477,006 4,322,759 --
Employee 11,589,340 2,304,656 --
------------ ----------- -----------
14,066,346 6,627,415 --
------------ ----------- -----------
Asset Transfers in (Note 7) -- 27,946,047 6,701,682
------------ ----------- -----------
Total additions 25,426,200 58,607,943 9,650,707
------------ ----------- -----------
DEDUCTIONS:
Payments to participants 64,533,456 6,442,512 3,719,735
(Note 1)
Loan maintenance fees 34,576 1,705 --
------------ ----------- -----------
Total deductions 64,568,032 6,444,217 3,719,735
------------ ----------- -----------
INTERFUND TRANSFERS--NET 22,293,855 (6,244,453) (882,360)
------------ ----------- -----------
Net additions
(deductions) (16,847,977) 45,919,273 5,048,612
------------ ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 187,503,182 59,052,640 33,700,438
------------ ----------- -----------
End of year $170,655,205 $104,971,913 $38,749,050
============ =========== ===========
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. DESCRIPTION OF PLAN:
-------------------
The following description of the AMP Incorporated Employee Savings and
Thrift Plan (the Plan) provides only general information. Participants
should refer to the Plan document for a more complete description of the
Plan's provisions.
General
-------
The Plan was established effective January 1, 1982 for the benefit of the
employees of AMP Incorporated (the Company) and certain subsidiaries and
was subsequently amended on numerous occasions, most recently effective as
of March 1, 1999.
The Plan is a contributory defined contribution plan covering all employees
of the Company and certain subsidiaries. Effective July 1, 1998,
eligibility requirements of one year of service and at least age 21 were
eliminated. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA), as amended.
The Vanguard Fiduciary Trust Company is the trustee of the Plan.
Contributions
-------------
Participants may defer up to 4% of their gross earnings as a "deferred
basic deposit" and up to an additional 11% as a "deferred supplemental
deposit." The Company's matching contribution to the Plan is 60% of the
participants' "deferred basic deposit" which is paid out of the Company's
current and accumulated earnings. Effective January 1, 1998, the Plan was
amended to increase participants' "deferred supplemental deposit"
percentage to up to 16% of their gross earnings, and to increase the
Company's matching contribution to the Plan to include 30% of up to 2% of
gross earnings in excess of the "deferred basic deposit" deferred under the
Plan.
Forfeitures in any given year are used to reduce Company matching
contributions to the Plan in the following year. Forfeitures from 1997
reducing 1998 Company contributions amounted to $306,051. Forfeitures from
1998 amounted to $299,545 and will be applied against Company contributions
in 1999.
Investment Elections
--------------------
Participants may elect to invest their deferred basic deposits, deferred
supplemental deposits and Company matching contributions on the "deferred
basic deposit" in one or more of the available funds, which are the Money
Market Prime, Wellington, Index Trust 500, Windsor II, PrimeCap, World Fund
U.S. Growth, International Growth, T. Rowe Price - New Horizons, Vanguard
Bond Index Fund - Total Bond Market, Vanguard Asset Allocation Fund
(effective January 1, 1999), AMP Fixed Income and AMP Stock Fund. The
Company's matching contribution on up to 2% of the gross earnings deferred
in excess of the "deferred basic deposit" may only be deposited into the
AMP Stock Fund and no inter-fund transfers are permitted.
Participant Accounts
----------------------
Each participant's account is credited with the participant's deposits and
Company matching contributions and an allocation of the funds' earnings in
which the participant participates. Certain participants in the Plan are of
an inactive status at year end due to termination or retirement. The number
of inactive participants as of December 31, 1998 and 1997 is 6,623 and
5,089 of the total 25,093 and 20,177, respectively.
Vesting
-------
Participants are immediately vested in their deferred basic deposits and
deferred supplemental deposits plus actual earnings thereon. Company
matching contributions and earnings become 100% vested after five years of
service by a participant. Immediate vesting of Company matching
contributions occurs upon a participant's termination by retirement,
disability, death or attainment of age 65.
Payments to Participants
------------------------
Deferred basic deposits and deferred supplemental deposits cannot be
withdrawn prior to the attainment of age 59 1/2, except in the case of a
"financial hardship." Vested Company matching contributions held under the
Plan for at least two years and earnings thereon can be withdrawn any time
at the request of the participant.
Partial or total withdrawal of pre-1983 deferred basic deposits, deferred
supplemental deposits, Company matching contributions and earnings by a
participant is permitted at his or her request, subject to a minimum
withdrawal of $100.
Participant Loans
-----------------
Loans against a participant's account balances are secured by a promissory
note which bears a fixed interest rate of 1% over the prime rate. The term
of the loan is limited to five years and repayment is made through payroll
deductions in level amounts over the life of the loan. There are
limitations as to the amount that may be borrowed and whether prepayment of
a loan is allowed. All loans requested prior to December 31, 1998 were
disbursed to participants by that date.
Participant Rollovers
---------------------
Effective January 1, 1998, participants with accounts in previous
employers' qualified plans, or in rollover IRA accounts including funds
from previous employers' qualified plans, may make a rollover of those
qualified monies into the Plan. This may be accomplished by a direct
rollover, an indirect 60-day rollover, or an indirect 60-day rollover from
a conduit IRA if the respective requirements are met.
Administrative Expenses
-----------------------
All expenses incurred in the administration of the Plan are paid by the
Company and amounted to $330,913 for the year ended December 31, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting
-------------------
The accompanying financial statements have been prepared using the accrual
basis of accounting.
Valuation of Investments
------------------------
Investments, excluding deposits with insurance companies, are stated at
market value, which is equivalent to current value as of the statement
date.
Deposits with insurance companies held by the Plan are accounted for under
The American Institute of Certified Public Accountants' Statement of
Position 94-4, "Reporting of Investment Contracts Held by Health and
Welfare Benefit Plans and Defined Contribution Pension Plans" (SOP 94-4).
Under SOP 94-4, as all of the guaranteed investment contracts held by the
Plan are fully benefit-responsive, they are valued at contract value. A
fully benefit-responsive investment contract is one that provides a
liquidity guarantee by a financially responsible third party of principal
and previously accrued interest for liquidations, transfers or loans
initiated by Plan participants exercising their rights to withdraw or
borrow under the terms of the Plan.
Tax Status
----------
The trust established under the Plan is qualified under the Internal
Revenue Code as exempt from federal income taxes under Section 501(a). The
Plan has received a favorable determination letter from the Internal
Revenue Service (IRS) maintaining the Plan's qualified status under
applicable Internal Revenue Code requirements. The Plan has been amended
since receiving the determination letter from the IRS; however, the Plan
sponsor and legal counsel are of the opinion that the Plan, as amended and
administered, meets the IRS requirements and, therefore, the trust
continues to be tax exempt.
Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
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 and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. INVESTMENTS:
------------
All Plan investments are held by a trust company administered trust fund
and consist of shares of various mutual funds, AMP stock, loans receivable
and deposits with insurance companies (Note 4). The following is a list of
assets which exceed 5% of net assets at December 31, 1998 and 1997.
DESCRIPTION OF
SECURITY DECEMBER 31, 1998 DECEMBER 31, 1997
-------------- --------------------------- ----------------------------
No. of No. of
Shares or Market or Shares or Market or
Principal Contract Principal Contract
Amount Value Amount Value
------------ -------------- ------------- --------------
Money Market Prime 77,536,625 $ 77,536,625 32,651,101 $ 32,651,101
Wellington 2,844,434 83,484,134 1,799,909 53,007,329
Index Trust 500 2,219,262 252,884,883 2,110,822 190,121,782
Windsor II 2,462,675 73,510,858 1,984,564 56,798,234
PrimeCap 2,186,074 104,188,274 2,412,914 95,478,987
AMP Common Stock 2,015,094 104,848,875 1,384,588 58,152,696
World Fund U.S. Growth 2,340,386 87,741,083 1,383,626 39,710,055
4. DEPOSITS WITH INSURANCE COMPANIES:
----------------------------------
The Plan has entered into guaranteed investment contracts with various
insurance companies (Insurance Companies). Under the terms of the
contracts, which are all fully benefit-responsive contracts, the Insurance
Companies received all plan year Fixed Income Fund deposits and
contributions, or in the case of rollovers, a lump-sum deposit, which they
maintain in plan reserve accounts until maturity. At maturity, the balances
with interest will be returned to the Plan. The accounts are credited with
interest at fixed rates for the respective periods and charged for plan
withdrawals and loans. The contracts are included in the financial
statements as of December 31, 1998 and 1997 at contract values, as reported
to the Plan by the Insurance Companies. The estimated fair market value of
the guaranteed investment contract portfolio, as of December 31, 1998 was
$148,792,362. The aggregate average yield for the Plan's guaranteed
investment contract portfolio was 6.43% and 6.14% for the years ended
December 31, 1998 and 1997, respectively. The crediting interest rate for
the Plan's guaranteed investment contract portfolio was 6.47% and 6.26% as
of December 31, 1998 and 1997, respectively. There were no valuation
allowances against contract values as of December 31, 1998 and 1997.
Included in the Plan's guaranteed investment contract portfolio as of
December 31, 1998, are nine synthetic investment contracts. These contracts
operate in a manner similar to a guaranteed investment contract, except
that the assets are placed in a trust (with ownership by the Plan) rather
than in a separate account of the issuer. Also, a financially responsible
third party issues a wrapper contract that provides that a participant
executes Plan transactions at contract value. These contracts are included
in the financial statements at contract values reported to the Plan of
$92,022,436 at December 31, 1998. The market value of the underlying assets
held in trust at December 31, 1998 was $94,842,378.
During 1992, the investment manager for the Plan's Fixed Income Fund
invested $10,000,000 in Confederation Life Insurance Company's
(Confederation Life) Guaranteed Investment Contract Number 62682. This
contract provided for a rate of return of 6.16%, and matured on June 29,
1997.
On August 12, 1994, the U.S. assets of Confederation Life were placed under
the regulatory supervision of the Michigan Commissioner of Insurance, and
GIC payments by Confederation Life were suspended. At the date of seizure,
the Plan's GIC investment with Confederation Life had a gross recorded
contract value of $10,082,223. No interest has been paid under the Plan's
Confederation Life contract since this time.
On October 13, 1996, the Michigan Commissioner of Insurance reached a final
decision related to the settlement of this contract. Out of the five
settlement options, the Company selected a cash liquidation option worth
109% of August 12, 1994 contract value. Payouts were received during 1997,
and the total received through the end of 1997 was $11,015,695.
5. PLAN TERMINATION:
----------------
The Company anticipates continuing the Plan indefinitely, but reserves the
right to reduce, suspend or discontinue its contributions at any time and
to discontinue or partially terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, participants will become 100%
vested in their accounts.
6. DISTRIBUTIONS TO PARTICIPANTS:
-----------------------------
Distributions to participants are generally made as soon as practical after
a request is received by the trustee. There were no distributions due
participants at December 31, 1998 and 1997.
7. PLAN MERGER:
-----------
Effective January 1, 1999, the Company's M/A-COM Division MERIT Plan of
Benefits (M/A-COM Plan) was merged into the Plan. In connection with this
merger, the assets in the M/A-COM Plan totaling $198,186,758 were
transferred on December 31, 1998 to the Plan, and are shown as a separate
line item on the Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 1998.
8. SUBSEQUENT EVENTS:
-----------------
On April 2, 1999, AMP Incorporated merged with an indirect subsidiary of
Tyco International, Ltd. ("Tyco"). In connection with the merger, shares
of the Company's common stock were exchanged for .7507 shares of Tyco's
common stock.
Additionally, due to the merger with Tyco and in conjunction with the
Company's Profit Improvement Plan, the Company has experienced a planned
workforce reduction throughout 1999. Terminated participating employees
will immediately vest in their Company matching contributions and become
inactive participants with the traditional options available to them for
exiting the Plan. Although the Plan is expected to experience an overall
decrease in Net Assets due to the planned workforce reduction, individual
account balances of the remaining Plan participants will not be affected by
the terminated inactive participants' withdrawal from the Plan.
<TABLE>
<CAPTION>
Schedule I
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
EIN #23-0332575
PIN #003
ITEM 27(a) -- SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
Number of Shares Market
or or
DESCRIPTION OF SECURITY Principal Amount Cost Contract Value
- ----------------------- ---------------- ---- ----------------
<S> <C> <C> <C>
Commingled Trusts and Common Stock:
Money Market Prime 77,536,625 $ 77,536,625 $ 77,536,625
Wellington Fund 2,844,434 78,164,362 83,484,134
Index Trust 500 Fund 2,219,262 156,775,959 252,884,883
Windsor II Fund 2,462,675 62,901,025 73,510,858
PrimeCap Fund 2,186,074 70,291,483 104,188,273
World Fund U.S. Growth 2,340,386 69,590,994 87,741,083
International Growth 832,510 15,124,956 15,626,204
Asset Allocation Fund 262,904 6,409,643 6,409,603
Total Bond Market Index Fund 1,470,579 15,073,788 15,102,848
T. Rowe Price - New Horizons 450,765 10,252,436 10,520,857
AMP Common Stock 2,015,094 75,462,810 104,848,875
------------ --------------
Total Commingled Trusts & Common Stock $637,584,081 $ 831,854,243
------------ --------------
Deposits with Insurance Companies:
AIG Life, 7.08%, due 3/31/02 11,224,792 $11,224,792 $11,224,792
CDC, 5.97% due 4/15/01 10,123,078 10,123,078 10,123,078
CDC, 5.85%, due 8/31/01 8,038,722 8,038,722 8,038,722
Deutsche Bank, 6.40%, due on demand 12,335,001 12,335,001 12,335,001
Life of Virginia, 6.18%, due 10/15/02 10,362,939 10,362,939 10,362,939
Metropolitan Life, 6.18%, due 6/30/00 9,872,289 9,872,289 9,872,289
Morgan Guaranty, 6.47%, due 3/31/01 11,011,591 11,011,591 11,011,591
NY Life, 7.47%, due 6/30/99 13,822,236 13,822,236 13,822,236
NY Life, 7.02%, due 3/31/99 9,463,897 9,463,897 9,463,897
Principal, 8.12%, due 10/31/99 9,691,448 9,691,448 9,691,448
Rabobank, 6.77%, due 12/31/01 8,891,962 8,891,962 8,891,962
Union Bank of Switzerland, 6.71%,
due on demand 15,198,747 15,198,747 15,198,747
Union Bank of Switzerland, 6.98%,
due on demand 11,941,362 11,941,362 11,941,362
WestDeutsche Landesbank, 6.48%,
9/30/01 3,257,181 3,257,181 3,257,181
------------ --------------
Total Deposits with Insurance Companies 145,235,245 145,235,245
------------ --------------
Participant Loans (7% to 11.5%) 38,749,050 38,749,050 38,749,050
------------ --------------
TOTAL $821,568,376 $1,015,838,538
============ ==============
The accompanying notes are an integral part of this schedule.
</TABLE>
<TABLE>
<CAPTION>
Schedule II
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
EIN #23-0332575
PIN #003
ITEM 27(d) -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
Number of Number of Cost of Net
Identity of Party Description of Transaction Purchases Sales Purchase Price Selling Price Items Sold Gain/(Loss)
- ----------------- -------------------------- --------- --------- -------------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Vanguard Money Market Prime 397 383 $180,625,426 $131,720,082 $131,720,082 $ --
Vanguard Index Trust 500 Fund 252 252 109,463,638 93,572,789 66,760,499 26,812,290
AMP Common Stock 84 129 37,900,404 41,383,462 36,963,287 4,420,175
Vanguard PrimeCap Fund 252 252 44,858,095 53,887,146 45,043,426 8,843,720
Vanguard Windsor II Fund 249 252 41,980,318 27,849,348 23,693,280 4,156,068
Vanguard World Fund U.S. Growth 249 251 62,731,237 27,390,294 23,247,151 4,143,143
Vanguard Wellington Fund 247 252 54,315,330 23,981,369 20,607,757 3,373,612
The purchase prices and selling prices of the above transactions represent the
current value of the assets on the transaction date.
The accompanying notes are an integral part of this schedule.
</TABLE>
EXHIBIT 2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 11-K, into Tyco International Ltd.'s
previously filed Registration Statement File No. 333-75713.
/s/ Arthur Andersen LLP
Philadelphia, PA
June 29, 1999
