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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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
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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 0-8591
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below: FIGGIE INTERNATIONAL INC. SAVINGS PLAN
FOR HOURLY PAID EMPLOYEES.
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: FIGGIE INTERNATIONAL INC.,
4420 SHERWIN ROAD, WILLOUGHBY, OHIO 44094.
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ARTHUR ANDERSEN LLP
FIGGIE INTERNATIONAL INC.
SAVINGS PLAN FOR HOURLY PAID EMPLOYEES
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
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ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustees of the
Figgie International Inc.
Savings Plan for Hourly Paid Employees:
We have audited the accompanying statement of net assets available for benefits
of the Figgie International Inc. Savings Plan for Hourly Paid Employees (the
Plan) as of December 31, 1996, and the related statement of changes in net
assets available for benefits for the year then ended as listed in the
accompanying index. These financial statements and schedules referred to below
are the responsibility of the Plan's trustees. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audit 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 the
Plan's trustees, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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, 1996 and the changes in its net assets available for benefits for
the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets held for
investment purposes (Exhibit 1) as of December 31, 1996 and schedule of
reportable transactions (Exhibit 2) for the year ended December 31, 1996, 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 Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The supplemental schedules have
been subjected to the auditing procedures applied in the audit 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
Cleveland, Ohio,
June 27, 1997.
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FIGGIE INTERNATIONAL INC.
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SAVINGS PLAN FOR HOURLY PAID EMPLOYEES
--------------------------------------
DECEMBER 31, 1996
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INDEX
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Statement of Net Assets Available for Benefits as of
December 31, 1996
Statement of Changes in Net Assets Available for Benefits for
the Year Ended December 31, 1996
Notes to Financial Statements
Exhibit 1 - Item 27a--Schedule of Assets Held for Investment
Purposes as of December 31, 1996
Exhibit 2 - Item 27d--Schedule of Reportable Transactions for
the Year Ended December 31, 1996
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FIGGIE INTERNATIONAL INC.
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SAVINGS PLAN FOR HOURLY PAID EMPLOYEES
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STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
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AS OF DECEMBER 31 1996
----------------------
<TABLE>
<CAPTION>
1996
----------
<S> <C>
ASSETS:
Cash $ 62
Investments, at fair value (Note 3)-
Figgie International Inc. Class A Common Stock Fund 8,040
Figgie International Inc. Class B Common Stock Fund 5,160
International Fund 6,330
Equity Fund 62,375
Fixed Fund 248,982
Employee contribution receivable 37,928
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Total assets 368,877
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LIABILITIES:
Accrued administrative expenses 430
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Total liabilities 430
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NET ASSETS AVAILABLE FOR BENEFITS $ 368,447
==========
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
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FIGGIE INTERNATIONAL INC.
-------------------------
SAVINGS PLAN FOR HOURLY PAID EMPLOYEES
--------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
1996
----------
<S> <C>
ADDITIONS:
Employee contributions $355,311
Net appreciation in fair value of investments (Note 3) 17,046
Investment income 22
Realized gain on sale of investments (Note 3) 25
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Total additions 372,404
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DEDUCTIONS:
Administrative expenses 1,435
Benefit payments 2,385
Other disbursements 137
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Total deductions 3,957
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NET ADDITIONS 368,447
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year -
----------
NET ASSETS AVAILABLE FOR BENEFITS, end of year $368,447
==========
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE> 7
FIGGIE INTERNATIONAL INC.
-------------------------
SAVINGS PLAN FOR HOURLY PAID EMPLOYEES
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NOTES TO FINANCIAL STATEMENTS
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DECEMBER 31, 1996
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1. SUMMARY OF THE PLAN:
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The Figgie International Inc. Savings Plan for Hourly Paid Employees (the Plan)
was established on January 1, 1996, to provide retirement benefits to hourly
paid employees (and their beneficiaries) hired after December 31, 1984 of
certain participating divisions and subsidiaries of Figgie International Inc.
(the Company). The Plan is a defined contribution pension plan.
The Plan provides that the Company shall have the right to amend or terminate
the Plan at any time. Upon termination of the Plan, the assets then remaining in
the Plan shall be allocated and distributed to participants in accordance with
the terms and provisions of Section 4044 of ERISA, as amended.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
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Basis of Accounting
- -------------------
The accompanying statement of net assets available for benefits and statement of
changes in net assets available for benefits are prepared on the accrual basis
of accounting.
Net appreciation in fair value and net realized loss on sale of investments for
1996 were calculated based on the fair value of the investments at the purchase
price.
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 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.
Reportable Transactions
- -----------------------
The Department of Labor defines reportable transactions as those transactions or
series of transactions which exceed 5% of beginning net assets. All transactions
which exceed the threshold are included in Exhibit 2.
Contributions
- -------------
Participants are eligible to contribute up to 7% of their salary based upon
their eligible earnings, as defined, subject to the limits of the Internal
Revenue Code. Contributions due from employees are accrued when they are
withheld. There are no employer contributions.
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-2-
Participants direct their contributions in 25% increments between the Equity
Fund, Fixed Income Fund and International Stock Fund. Contributions in the Class
A and Class B Common Stock Funds may be directed in 5% increments to each of the
funds, however, a participant's investment in both the Class A and Class B
Common Stock Funds may not exceed, in aggregate, 25% of the amounts credited to
his accounts, as defined.
Investment Income
- -----------------
Investment income includes dividend and interest income earned during the year.
3. INVESTMENTS:
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The Plan's investments consist of an Equity Fund, shares of Figgie International
Inc. Class A and Class B Common Stock, a Fixed Income Fund and an International
Stock Fund.
The Equity Fund invests in stock of many U.S. companies. In addition, it invests
on a smaller basis in U.S. government obligations as well as short-term
holdings.
Effective January 1, 1996, a Class A Common Stock Fund and Class B Common Stock
Fund were established. The Plan invests amounts in these funds in shares of the
Company's Class A Common Stock and Class B Common Stock. At December 31, 1996,
the Plan held 670 and 480 shares of Class A and Class B Common Stock with a cost
basis of $8,813 and $5,911, respectively.
The Fixed Fund consists of investments which provide a predetermined interest
rate or a predetermined interest rate range for a certain specified period of
time. Generally, these investments are U.S. Government securities, corporate
bonds, bank certificates of deposit, and/or other similar items.
The International Fund is a multi-manager fund which invests in non-U.S.
companies with attractive return potential. The Fund's investments are balanced
among the large, well-established markets of Japan and Europe, and some of the
world's emerging markets such as those in South America and Asia.
The Plan also invests in shares of the Employee Benefit Short-Term Money Market
Fund (Money Market Fund). The Money Market Fund consists primarily of
investments in commercial paper, with additional minor investments in
certificates of deposit, banker acceptances, time deposits and corporate notes.
The investment in commercial paper is distributed over a diverse range of
industries, thereby attempting to minimize the risk involved.
The following table presents the fair value of investments. Investments that
represent five percent or more of total plan assets are separately identified.
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-3-
FAIR VALUE OF INVESTMENTS
<TABLE>
<CAPTION>
December 31, 1996
-------------------------
Number of
Shares or
Principal Fair
Amount Value
------------- ----------
<S> <C> <C>
Investments at fair value-
Fixed Fund $21,339 $248,982
Equity Fund 3,765 62,375
========== ==========
$25,104 $311,357
========== ==========
</TABLE>
During the current year, the Plan's investments (including investments bought,
sold and held during the year) appreciated in value by $17,046 as follows:
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE
<TABLE>
<CAPTION>
Year Ended
December 31, 1996
-----------------
<S> <C>
Investments at fair value-
Figgie International Inc. Class A Common Stock $ (773)
Figgie International Inc. Class B Common Stock (751)
International Fund 192
Equity Fund 9,373
Fixed Fund 9,005
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$17,046
===========
</TABLE>
4. DISTRIBUTIONS TO PARTICIPANTS:
------------------------------
Distributions due to participants who have reached retirement age, withdrawn, or
otherwise separated from the Plan amounted to $3,756 at December 31, 1996.
5. FEDERAL INCOME TAXES:
---------------------
In the opinion of the Plan's Administrator, the Plan, as amended, qualifies
under Section 401(a) of the Internal Revenue Code and is, therefore, not subject
to tax under present income tax laws. Accordingly, income taxes have not been
provided for in the accompanying financial statements. A favorable determination
as to the Plan's tax-exempt status has not yet been received for the Plan.
<PAGE> 10
EXHIBIT 1
FIGGIE INTERNATIONAL INC.
-------------------------
SAVINGS PLAN FOR HOURLY PAID EMPLOYEES
--------------------------------------
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
---------------------------------------------------------
AS OF DECEMBER 31, 1996
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EMPLOYER IDENTIFICATION NUMBER: 52-1297376
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PLAN NUMBER: 023
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<TABLE>
<CAPTION>
1996
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Fair
Identity of Issue and Description Cost Value
- ---------------------------------------------------- --------- ---------
<S> <C> <C>
Equity Fund $ 53,016 $ 62,375
========== ==========
Figgie International Inc. Class A Common Stock $ 8,813 $ 8,040
========== ==========
Figgie International Inc. Class B Common Stock $ 5,911 $ 5,160
========== ==========
Fixed Income Fund $240,021 $ 248,982
========== ==========
International Stock Fund $ 6,138 $ 6,330
========== ==========
Cash and cash equivalents $ 62 $ 62
========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of this exhibit.
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EXHIBIT 2
FIGGIE INTERNATIONAL INC.
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SAVINGS PLAN FOR HOURLY PAID EMPLOYEES
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ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS
---------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
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EMPLOYER IDENTIFICATION NUMBER: 52-1297376
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PLAN NUMBER: 023
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During the year ended December 31, 1996, the Plan had the following "reportable
transactions," as defined.
<TABLE>
<CAPTION>
Current Value of
Purchase Selling Cost of Asset on Net Gain
Identity of Party Involved Price Price Asset Transaction Date or (Loss)
- ---------------------------------------------- ----------- --------- -------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Employee Benefit Short-Term Money Market Fund
(23 transactions) $ 80,689 $ - $ - $ 80,689 $ -
Figgie International Inc. Class A Common Stock
(11 transactions) 8,813 - - 8,813 -
Figgie International Inc. Class B Common Stock
(11 transactions) 5,911 - - 5,911 -
International Fund
(11 transactions) 6,338 - - 6,338 -
Equity Fund
(11 transactions) 53,243 - - 53,243 -
Fixed Fund
(11 transactions) 242,643 - - 242,643 -
Employee Benefit Short-Term Money Market Fund
(12 transactions) - 80,628 80,628 80,628 -
International Fund
(4 transaction) - 201 200 202 1
Equity Fund
(5 transaction) - 240 227 239 13
Fixed Fund
(9 transactions) - 2,663 2,622 2,643 41
</TABLE>
The accompanying notes to financial statements are an integral part of this
exhibit.
<PAGE> 12
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.
FIGGIE INTERNATIONAL INC. SAVINGS
PLAN FOR HOURLY PAID EMPLOYEES
By: Wilmington Trust Company, Trustee
Date: June 30, 1997 /s/ Moira Walker
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Moira Walker, Senior Financial Services Officer
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EXHIBIT INDEX
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<TABLE>
<S> <C> <C>
23.1 Consent of Arthur Andersen LLP --
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 11-K, into the Company's previously filed
Registration Statement File No. 333-12183.
/s/ Arthur Andersen LLP
Cleveland, Ohio,
June 27, 1997
