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:
MERIT Plan of Benefits
M/A-COM Division
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:
Tyco International Ltd.
The Gibbons Building
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 MERIT Plan of Benefits (the "Plan") of the M/A-COM Division 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,
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 years ended
December 31, 1998 and December 31, 1997, 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 Benefits Committee (Plan Administrator)
/s/ Russell Tremblay
Date: June 29, 1999 By:_______________________________
Russell Tremblay
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 a Division of AMP Incorporated
MERIT Plan of Benefits
Financial Statements
As of December 31, 1998 and 1997
Together with Auditors' Report
M/A-COM a Division of AMP Incorporated
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, 1998
December 31, 1997
Statement of Changes in Net Assets Available for Plan Benefits:
Year Ended December 31, 1998
Year Ended December 31, 1997
Notes to Financial Statements
Supplemental Schedules:
Schedule I - Item 27(a) - Assets Held for Investment Purposes as of
December 31, 1998
Schedule II - Item 27(d) - Reportable Transactions for the Year Ended
December 31, 1998
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Participants and Administrator of the
M/A-COM a Division of AMP Incorporated
MERIT Plan of Benefits:
We have audited the accompanying statements of net assets available for
plan benefits of the M/A-COM a Division of AMP Incorporated MERIT Plan of
Benefits as of December 31, 1998 and 1997, and the related statements of changes
in net assets available for plan benefits for the years then ended. These
financial statements and the schedules referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules 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
a 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 a Division of AMP Incorporated MERIT Plan of Benefits as of December 31,
1998 and 1997, and the changes in its 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 purposes 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.,
April 30, 1999
<TABLE>
<CAPTION>
M/A-COM a Division of AMP Incorporated
MERIT Plan of Benefits
Statement of Net Assets Available for Plan Benefits
December 31, 1998
Vanguard
Money Market Vanguard Vanguard Vanguard
Reserves - Vanguard/ Index International Bond Vanguard
Prime Wellington Trust - Growth Index U.S. Growth
ASSETS Portfolio Fund 500 Portfolio Portfolio Fund Portfolio
<S> <C> <C> <C> <C> <C> <C>
Shares of registered investment
companies, fair value $ __________ $ __________ $ __________ $ _________ $ _________ $__________
Company Stock Fund, fair value -- -- -- -- -- --
Participant loans receivable,
fair value -- -- -- -- -- --
Other receivables:
Employees' contributions _______ _______ ______ ______ ______ ______
Employer's contribution -- -- -- -- -- --
Loan and interest payments ______ ______ ______ ______ _____ ______
------------ ------------ ------------ ----------- ----------- -----------
Net Assets Available for
Benefits (see Note 7) $ __________ $ __________ $ __________ $ _________ $ _________ $__________
============ ============ ============ =========== =========== ===========
Statement of Net Assets Available for Plan Benefits
December 31, 1998 - CONTINUED
Vanguard Vanguard
Asset Vanguard Extended
Allocation Vanguard/ Explorer Market Vanguard
ASSETS Fund Windsor II Fund Index Fund Primecap
<C> <C> <C>
Shares of registered investment
companies, fair value $ _________ $ _________ $ _________ $ _________ $ _________
Company Stock Fund, fair value -- -- -- -- --
Participant loans receivable,
fair value -- -- -- -- --
Other receivables:
Employees' contributions ______ ______ ______ ______ ______
Employer's contribution -- -- -- -- --
Loan and interest payments _____ ______ _____ ______ _____
------------ ----------- ----------- ----------- -----------
Net Assets Available for
Benefits (see Note 7) $ _________ $ _________ $ _________ $ _________ $ _________
============ =========== =========== =========== ===========
Participant
Company Loans
Stock Fund Receivable Total
<C> <C> <C>
Shares of registered investment
companies, fair value $___________ $__________ $___________
Company Stock Fund, fair value -- -- --
Participant loans receivable,
fair value -- -- --
Other receivables:
Employees' contributions ___________ __________ ___________
Employer's contribution -- -- --
Loan and interest payments ___________ __________ ___________
----------- ----------- -----------
Net Assets Available for
Benefits (see Note 7) $___________ $__________ $___________
============ =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
</TABLE>
<TABLE>
<CAPTION>
M/A-COM a Division of AMP Incorporated
MERIT Plan of Benefits
Statement of Net Assets Available for Plan Benefits
December 31, 1997
Vanguard
Money Market Vanguard Vanguard Vanguard
Reserves - Vanguard/ Index International Bond Vanguard
Prime Wellington Trust - Growth Index U.S. Growth
ASSETS Portfolio Fund 500 Portfolio Portfolio Fund Portfolio
<S> <C> <C> <C> <C> <C> <C>
Shares of registered investment
companies, fair value $ 31,777,319 $ 30,868,353 $ 29,200,320 $ 8,324,673 $ 5,950,200 $17,370,313
Company Stock Fund, fair value -- -- -- -- -- --
Participant loans receivable,
fair value -- -- -- -- -- --
Other receivables:
Employees' contributions 149,820 114,688 124,377 46,354 26,565 79,269
Employer's contribution -- -- -- -- -- --
Loan and interest payments 94,845 56,867 49,251 21,661 11,361 32,569
------------ ------------ ------------ ----------- ----------- -----------
Net Assets Available for
Benefits $ 32,021,984 $ 31,039,908 $ 29,373,948 $ 8,392,688 $ 5,988,126 $17,482,151
============ ============ ============ =========== =========== ===========
Statement of Net Assets Available for Plan Benefits
December 31, 1997 - CONTINUED
Vanguard
Asset Vanguard Participant
Allocation Vanguard/ Explorer Company Loans
ASSETS Fund Windsor II Fund Stock Fund Receivable Total
<C> <C> <C> <C> <C> <C>
Shares of registered investment
companies, fair value $ 5,709,827 $ 9,970,748 $ 2,689,371 $ -- $ -- $141,861,124
Company Stock Fund, fair value -- -- -- 19,658,839 -- 19,658,839
Participant loans receivable,
fair value -- -- -- -- 6,554,860 6,554,860
Other receivables:
Employees' contributions 27,707 60,438 19,157 9,547 -- 657,922
Employer's contribution -- -- -- 448,023 -- 448,023
Loan and interest payments 7,764 19,918 5,624 3,176 -- 303,036
------------ ----------- ----------- ----------- ----------- ------------
Net Assets Available for
Benefits $ 5,745,298 $10,051,104 $ 2,714,152 $20,119,585 $ 6,554,860 $169,483,804
============ =========== =========== =========== =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
</TABLE>
<TABLE>
<CAPTION>
M/A-COM a Division of AMP Incorporated
MERIT Plan of Benefits
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1998
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 $ 1,742,938 $ 3,445,538 $ 584,677 $ 176,761 $ 455,812 $ 1,566,179
Net appreciation
of investments -- 109,053 7,975,019 1,234,417 115,228 5,356,195
------------ ------------ ----------- ---------- ---------- -----------
1,742,938 3,554,591 8,559,696 1,411,178 561,040 6,922,374
------------ ------------ ----------- ---------- ---------- -----------
Contributions:
Employer -- -- -- -- -- --
Employee (see Note 3) 1,672,659 1,437,882 1,903,272 562,256 370,007 1,228,467
------------ ------------ ----------- ---------- ---------- -----------
1,672,659 1,437,882 1,903,272 562,256 370,007 1,228,467
------------ ------------ ----------- ---------- ---------- -----------
Total additions 3,415,597 4,992,473 10,462,968 1,973,434 931,047 8,150,841
------------ ------------ ----------- ---------- ---------- -----------
Deductions:
Benefit payments to beneficiaries
and participants 4,669,298 3,411,631 2,132,758 623,835 1,959,108 1,411,351
Administrative expenses 15,901 8,708 5,727 1,959 1,039 3,828
------------ ------------ ----------- ---------- ---------- -----------
Total deductions 4,685,199 3,420,339 2,138,485 625,794 1,960,147 1,415,179
------------ ------------ ----------- ---------- ---------- -----------
Net increase (decrease) (1,269,602) 1,572,134 8,324,483 1,347,640 (1,029,100) 6,735,662
Net interfund transfers 2,985,512 (2,356,813) 1,127,094 (842,769) 2,001,049 716,661
Net assets transfered to AMP
Employee Savings & Thrift Plan (33,737,894) (30,255,229) (38,825,525) (8,897,559) (6,960,075) (24,934,474)
Net assets available for benefits:
Beginning of year 32,021,984 31,039,908 29,373,948 8,392,688 5,988,126 17,482,151
------------ ------------ ----------- ---------- ---------- -----------
End of year (see Note 7) $ -- $ -- $ -- $ -- $ -- $ --
============ ============ =========== ========== ========== ===========
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1998 - CONTINUED
Vanguard Vanguard
Asset Vanguard Extended
Allocation Vanguard/ Explorer Market Vanguard
Fund Windsor II Fund Index Fund Primecap
<S> <C> <C> <C> <C> <C>
Additions:
Interest and dividends $ 483,464 $ 1,147,692 $ 16,294 $ 2,251 $ 11,569
Net appreciation
of investments 812,793 507,241 60,117 2,919 27,687
---------- ------------ ----------- ---------- ----------
1,296,257 1,654,933 76,411 5,170 39,256
---------- ------------ ----------- ---------- ----------
Contributions:
Employer -- -- -- -- --
Employee (see Note 3) 490,533 983,523 261,223 3,639 27,579
---------- ------------ ----------- ---------- ----------
490,533 983,523 261,223 3,639 27,579
---------- ------------ ----------- ---------- ----------
Total additions 1,786,790 2,638,456 337,634 8,809 66,835
---------- ------------ ----------- ---------- ----------
Deductions:
Benefit payments to beneficiaries
and participants 701,078 1,006,078 117,757 79 5,942
Administrative expenses 1,764 3,154 1,042 584 55
---------- ------------ ----------- ---------- ----------
Total deductions 702,842 1,009,232 118,799 663 5,997
---------- ------------ ----------- ---------- ----------
Net increase (decrease) 1,083,948 1,629,224 218,835 8,146 60,838
Net interfund transfers (426,090) (445,433) (1,116,389) 23,671 380,969
Net assets transferred to AMP
Employee Savings and Thrift Plan (6,403,156) (11,234,895) (1,816,598) (31,817) (441,807)
Net assets available for benefits:
Beginning of year 5,745,298 10,051,104 2,714,152 -- --
---------- ------------ ----------- ---------- ----------
End of year (see Note 7) $ -- $ -- $ -- $ -- $ --
========== ============ =========== ========== ==========
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1998 - CONTINUED
Company Participant
Stock Loans
Fund Receivable Total
<C> <C> <C>
Additions:
Interest and dividends $ 489,044 $ 585,885 $ 10,698,104
Net appreciation
of investments 5,607,156 -- 21,807,825
----------- ---------- -------------
6,096,200 585,885 32,505,929
----------- ---------- -------------
Contributions:
Employer 4,696,551 -- 4,696,551
Employee (see Note 3) 133,243 -- 9,074,283
----------- ---------- -------------
4,829,794 -- 13,770,834
----------- ---------- -------------
Total additions 10,925,994 585,885 46,276,763
----------- ---------- -------------
Deductions:
Benefit payments to beneficiaries
and participants 1,077,666 405,160 17,521,741
Administrative expenses 8,307 -- 52,068
----------- ---------- -------------
Total deductions 1,085,973 405,160 17,573,809
----------- ---------- -------------
Net increase (decrease) 9,840,021 180,725 28,702,954
Net interfund transfers (2,013,559) (33,903) --
Net assets transferred to AMP
Employee Savings and Thrift Plan (27,946,047) (6,701,682) (198,186,758)
Net assets available for benefits:
Beginning of year 20,119,585 6,554,860 169,483,804
----------- ---------- -------------
End of year (see Note 7) $ -- $ -- $ --
=========== ========== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.
</TABLE>
<TABLE>
<CAPTION>
M/A-COM a Division of AMP Incorporated
MERIT Plan of Benefits
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1997
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 $ 1,748,847 $ 2,629,189 $ 596,831 $ 352,579 $ 351,905 $ 677,880
Net appreciation
of investments -- 3,114,781 6,253,904 8,236 139,338 2,788,906
------------ ------------ ----------- ---------- ---------- -----------
1,748,847 5,743,970 6,850,735 360,815 491,243 3,466,786
------------ ------------ ----------- ---------- ---------- -----------
Contributions:
Employer -- -- -- -- -- --
Employee (see Note 3) 1,773,453 1,359,832 1,508,331 623,608 321,855 997,551
------------ ------------ ----------- ---------- ---------- -----------
1,773,453 1,359,832 1,508,331 623,608 321,855 997,551
------------ ------------ ----------- ---------- ---------- -----------
Total additions 3,522,300 7,103,802 8,359,066 984,423 813,098 4,464,337
------------ ------------ ----------- ---------- ---------- -----------
Deductions:
Benefit payments to beneficiaries
and participants 3,048,012 1,705,757 1,182,145 320,116 348,003 784,374
Administrative expenses 16,513 8,631 4,938 2,248 1,165 3,443
------------ ------------ ----------- ---------- ---------- -----------
Total deductions 3,064,525 1,714,388 1,187,083 322,364 349,168 787,817
------------ ------------ ----------- ---------- ---------- -----------
Net increase 457,775 5,389,414 7,171,983 662,059 463,930 3,676,520
Net interfund transfers (2,122,932) 1,002,041 2,541,877 (453,393) 69,614 1,005,418
Net assets available for benefits:
Beginning of year 33,687,141 24,648,453 19,660,088 8,184,022 5,454,582 12,800,213
------------ ------------ ----------- ---------- ---------- -----------
End of year $ 32,021,984 $ 31,039,908 $29,373,948 $8,392,688 $5,988,126 $17,482,151
============ ============ =========== ========== ========== ===========
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1997 - CONTINUED
Vanguard
Asset Vanguard Company Participant
Allocation Vanguard/ Explorer Stock Loans
Fund Windsor II Fund Fund Receivable Total
<S> <C> <C> <C> <C> <C> <C>
Additions:
Interest and dividends $ 412,963 $ 900,748 $ 270,863 $ 424,349 $ 570,390 $ 8,936,544
Net appreciation
of investments 480,978 1,226,718 59,587 2,164,704 -- 16,237,152
---------- ----------- ---------- ----------- ---------- ------------
893,941 2,127,466 330,450 2,589,053 570,390 25,173,696
---------- ----------- ---------- ----------- ---------- ------------
Contributions:
Employer -- -- -- 4,403,811 -- 4,403,811
Employee (see Note 3) 312,811 730,120 290,021 4,117,045 -- 12,034,627
---------- ----------- ---------- ----------- ---------- ------------
312,811 730,120 290,021 8,520,856 -- 16,438,438
---------- ----------- ---------- ----------- ---------- ------------
Total additions 1,206,752 2,857,586 620,471 11,109,909 570,390 41,612,134
---------- ----------- ---------- ----------- ---------- ------------
Deductions:
Benefit payments to beneficiaries
and participants 164,263 338,362 67,568 894,374 362,654 9,215,628
Administrative expenses 1,277 2,265 1,210 9,193 -- 50,883
---------- ----------- ---------- ----------- ---------- ------------
Total deductions 165,540 340,627 68,778 903,567 362,654 9,266,511
---------- ----------- ---------- ----------- ---------- ------------
Net increase 1,041,212 2,516,959 551,693 10,206,342 207,736 32,345,623
Net interfund transfers 1,923,475 2,245,447 (226,738) (6,087,219) 102,410 --
Net assets available for benefits:
Beginning of year 2,780,611 5,288,698 2,389,197 16,000,462 6,244,714 137,138,181
---------- ----------- ---------- ----------- ---------- ------------
End of year $5,745,298 $10,051,104 $2,714,152 $20,119,585 $6,554,860 $169,483,804
========== =========== ========== =========== ========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
</TABLE>
M/A-COM a Division of AMP Incorporated
MERIT Plan of Benefits
Notes to Financial Statements
December 31, 1998
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. effective October 1, 1990 and most
recently amended and restated effective generally as of January 1, 1999
(see Note 7). Refer to the Plan document for more information.
Effective October 1, 1997, M/A-COM, Inc. merged with and into AMP
Incorporated (hereinafter referred to as the "Company"), pursuant to which
merger AMP Incorporated became the employer and plan sponsor under the
Plan.
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 M/A-COM a Division of the Company. The Plan is
designed to qualify as a profit-sharing plan for purposes of Section 401(a)
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 M/A-COM a Division of the Company
who meet certain requirements as to length of service.
As described in Note 7, the Plan merged with and into the AMP Incorporated
Employee Savings & Thrift Plan effective December 31, 1998.
As described in Note 8, on April 2, 1999, AMP Incorporated merged with Tyco
International, Ltd.
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 eleven 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), Vanguard Asset
Allocation Fund (balanced fund), Vanguard Extended Market Index Fund
(growth fund), and Vanguard Primecap Fund (growth 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 allows Company matching contributions to be made in
the form of AMP common stock as well as including 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 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 the 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 20% 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. Prior to 1997, participants
were assigned the applicable matching percentage on the first day of the
calendar year following their attainment of the appropriate number of years
of service. Effective July 1, 1997, the M/A-COM Benefits Committee voted to
amend the Plan to change the assignment of the increased match to the first
day of the calendar quarter following the participant's attainment of the
appropriate number of years of service. 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. Employee contributions for 1997 included $4,028,086 of rollover
contributions from the M/A-COM Inc. Employee Stock Ownership Plan. This
plan was terminated December 31, 1996.
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. Prior to 1997, a year of service was defined by the Plan
document as a year in which the participant worked 1,000 hours or more.
Effective July 1, 1997, the M/A-COM Benefits Committee voted to amend the
Plan to define a year of service using the "Elapsed Time Method," where a
year is determined by the actual period of time worked. 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, 1998 and December 31, 1997 were $0
and $66,600, respectively. The Company used $96,200 and $90,200 to reduce
matching contributions for the year ended December 31, 1998 and December
31, 1997, 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 (see Notes 7 and 8).
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, 1998 and December
31, 1997, were $0 and $6,554,860, respectively. Interest rates ranged from
7.0% to 10.0% for loans outstanding at December 31, 1997.
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 receiving 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 notes receivables. The following is a list of assets, which
exceed 5% of net assets at December 31, 1998 and 1997.
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Vanguard Fiduciary Trust Company:
Vanguard Money Market Reserves -
Prime Portfolio $ -- $31,777,319
Vanguard/Wellington Fund -- 30,868,353
Vanguard Index Trust - 500 Portfolio -- 29,200,320
Vanguard International Growth Portfolio -- 8,324,673
Vanguard U.S. Growth Portfolio -- 17,370,313
Company Stock Fund -- 19,658,839
Vanguard/Windsor II Fund -- 9,970,748
7. PLAN MERGER:
On January 1, 1999 the Plan was merged with and into the AMP Incorporated
Employee Savings and Thrift Plan (the AMP Plan). As of such date all assets
and related participant interests of the Plan without any further action
became assets and participant interests of the AMP Plan. Furthermore, as of
January 1, 1999, participants in the Plan became participants in the AMP
Plan, with all benefits, rights and features thereafter determined under
the AMP Plan. Notwithstanding the foregoing, the effectiveness of such
merger of the Plan into the AMP Plan shall be subject to and conditioned
upon (i) the expiration without disapproval of the applicable period, if
any, after any required prior notice of such merger is given to the
Internal Revenue Service, and (ii) favorable determination by the Internal
Revenue Service of the continuing qualification of the Plan and the AMP
Plan in connection with the merger. The transfer of assets from the Plan to
the AMP Plan took place effective December 31, 1998.
8. SUBSEQUENT EVENTS:
On April 2, 1999, AMP Incorporated merged with a direct subsidary 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 AMP Plan. Although the AMP Plan is expected to experience an
overall decrease in Net Assets due to the planned workforce reduction,
individual account balances of the remaining AMP Plan participants will not
be affected by the terminated inactive participants' withdrawal from the
AMP Plan.
M/A-COM a Division of AMP Incorporated Schedule I
MERIT Plan of Benefits
EIN: 23-0332575
Item 27(a) - Assets Held for Investment Purposes PIN: 010
As of December 31, 1998
</TABLE>
<TABLE>
<CAPTION>
Shares/Units Current
of Participation Cost Value
<S> <C> <C> <C>
NONE (see Note 7) $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
M/A-COM a Division of AMP Incorporated
MERIT Plan of Benefits Schedule II
Item 27(d) - Reportable Transactions EIN: 23-0332575
For the Year Ended December 31, 1998 PIN: 010
Current
Value of
Historical Asset on Historical
Identity of Party Description No. of Purchase No. of Selling Cost of Transaction Gain (Loss)
Involved of Asset Purchases Price Sales Price Asset Date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Vanguard Group Vanguard 500 Index Fund 215 $10,932,294 221 $48,093,421 $27,942,085 $48,093,421 $20,151,336
The Vanguard Group Vanguard Asset Alloc. Fund 135 3,810,314 128 10,318,519 8,879,290 10,318,519 1,439,229
The Vanguard Group Vanguard Int'l Growth Fund 158 8,056,723 200 17,615,854 15,012,660 17,615,854 2,603,194
The Vanguard Group Vanguard Prime Money Mk. 248 30,496,222 243 62,273,373 62,273,373 62,273,373 --
The Vanguard Group Vanguard Ttl Bond Mkt Idx 163 4,415,743 169 10,481,213 10,172,093 10,481,213 309,119
The Vanguard Group Vanguard U.S. Growth 195 10,784,649 212 33,444,208 22,417,204 33,444,208 11,027,004
The Vanguard Group Vanguard Wellington Fund 169 7,059,868 219 38,037,494 30,358,707 38,037,494 7,678,787
The Vanguard Group Vanguard Windsor II Fund 181 5,586,078 185 16,064,152 13,854,042 16,064,152 2,210,110
N/A Company Stock Fund 170 15,892,105 238 41,157,996 32,287,396 41,157,996 8,870,600
</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
