<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A-No. 1
/X/ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required] for the fiscal year ended December 31, 1994
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period from
.......... to ..........
Commission File Number 0-13617
LIFELINE SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
MASSACHUSETTS 04-2537528
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
640 MEMORIAL DRIVE, CAMBRIDGE, MASSACHUSETTS 02139
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (617) 679-1000
The sole purpose of this Form 10K/A is to file Annual Reports on Form
11-K for Lifeline's Employee Savings and Investment Plans.
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
LIFELINE SYSTEMS, INC. (REGISTRANT)
BY /s/ Dennis M. Hurley
Dennis M. Hurley
Vice President Finance
Chief financial officer
DATE
<PAGE>
PAGE 1
EXHIBIT INDEX
Exhibit No. Exhibit
(99.1) Annual Report for the Lifeline Employee Savings and
Investment Plan
(99.1a) Consent of Independent Public Accountants
<PAGE>
PAGE 1 (EXHIBIT (99.1)
ANNUAL REPORT
-------------
Pursuant to Section 15(d) of the
Securities Act of 1934
For the Year Ended
December 31, 1994
_________________
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
-----------------------------------------------------------
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
for the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Plan Benefits, with Fund Information
December 31, 1994 and 1993 3-4
Statements of Changes in Net Assets Available for Plan Benefits, with Fund
Information for the years ended December 31, 1994 and 1993 5-6
Notes to Financial Statements 7-13
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes as of
December 31, 1994 14
Item 27d - Schedule of Single Transactions in Excess of 5% of the Current
Value of Plan Assets 15
Item 27d - Schedule of Series of Transactions in Excess of 5% of the Current
Value of Plan Assets 16
</TABLE>
Certain schedules have been omitted because they are either not required or not
applicable.
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator of the
Lifeline Systems, Inc. Employee Savings
and Investment Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Lifeline Systems, Inc. Employee Savings and Investment Plan (the
"Plan") as of December 31, 1994 and 1993, and the related statements of changes
in net assets available for plan benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1994 and 1993, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
index on page 1 are presented for the purpose of additional analysis and are not
a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statement of net assets available for plan
benefits and the statement 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 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.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 2, 1995
2
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
December 31, 1994
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
INCOME BALANCED ASSET ALLOCATION BLUE CHIP
ASSETS FUND FUND FUND GROWTH FUND CONDUIT FUND
------ -------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments, at fair value (Note D) $ 1,554,491 $ 751,801 $ 195,963 $ 713,774 $ 58,255
Employer contributions receivable 38,051
Employee contributions receivable 3,091
Loans to participants ----------- --------- ---------------- ----------- ------------
Total assets 1,554,491 751,801 195,963 713,774 99,397
LIABILITIES AND NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Due to CIGNA (Note I) 24,174
Other accounts payable 886
----------- --------- ---------------- ----------- ------------
Total liabilities 25,060
----------- --------- ---------------- ----------- ------------
Net assets available for plan benefits $ 1,554,491 $ 751,801 $ 195,963 $ 713,774 $ 74,337
=========== ========= ================ =========== ============
<CAPTION>
LIFELINE
SYSTEMS, INC. PARTICIPANT TOTAL
ASSETS STOCK FUND LOAN FUND PLAN
------------- ----------- ----
<S> <C> <C> <C>
Investments, at fair value (Note D) $ 232,594 $ 3,506,878
Employer contributions receivable 38,051
Employee contributions receivable 3,091
Loans to participants $ 164,554 164,554
------------ ---------- ------------
Total assets 232,594 164,554 3,712,574
LIABILITIES AND NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Due to CIGNA (Note I) 24,174
Other accounts payable 886
------------- ---------- ------------
Total liabilities 25,060
------------- ---------- ------------
Net assets available for plan benefits $ 232,594 $ 164,554 $ 3,687,514
============= ========== ============
</TABLE>
The accompanying notes are an intergral part of the financial statements.
3
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
December 31, 1993
<TABLE>
<CAPTION>
Fidelity 20th Century Lifeline
Income Balanced Select Systems, Inc. Participant Total
ASSETS Fund Fund Fund Conduit Fund Stock Fund Loan Fund Plan
------ -------- ------------ ------------ ------------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value (Note D) $1,640,372 $699,066 $544,488 $ 83,903 $54,611 $3,022,440
Employer contributions receivable 71,705 71,705
Employee contributions receivable 20,983 20,983
Loans to participants $136,347 136,347
---------- -------- -------- -------- ------- -------- ----------
Total assets 1,640,372 699,066 544,488 176,591 54,611 136,347 3,251,475
LIABILITIES AND NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Benefits payable 27,326 27,326
Due to CIGNA (Note I) 24,174 24,174
---------- -------- --------- --------- ------- -------- ----------
Total liabilities 51,500 51,500
---------- -------- --------- --------- ------- -------- ----------
Net assets available for plan
benefits $1,640,372 $699,066 $544,488 $125,091 $54,611 $ 136,347 $3,199,975
========== ======== ======== ======== ======== ========== ==========
</TABLE>
The accompanying notes as an intergral part of the financial statements.
4
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF GHANGES IN NET ASSETS AVAILABLE FOR
PLAN BENEFITS, WITH FUND INFORMATION
for the year ended December 31, 1994
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY 20TH CENTURY
INCOME BALANCED ASSET ALLOCATION BLUE CHIP SELECT
FUND FUND FUND GROWTH FUND FUND CONDUIT FUND
------ -------- ---------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Employee contributions
and rollovers $ 236,595 $ 177,055 $ 10,571 $ 34,274 $ 101,363 $ 3,091
Employer contributions 73,596 38,645 2,299 8,767 20,772 38,051
Interest and dividend income 104,528 27,236 3,647 10,138 260 383
Net appreciation in fair
value of investments 5,691
Interfund transfers 249,010 187,918 707,383 27,241
---------- --------- ----------------- ----------- ----------- -------------
Total additions 414,719 491,946 204,435 766,253 149,636 41,525
Deductions:
Benefits and withdrawals 247,383 41,421 11,487 37,285 27,326
Net depreciation in fair
value of investments 69,471 8,472 33,105
Administrative expenses 1,986 682 175 293 886
Interfund transfers 251,231 327,637 40,817 623,441 64,067
---------- --------- ----------------- ----------- ----------- -------------
Total deductions 500,600 439,211 8,472 52,479 694,124 92,279
---------- --------- ----------------- ----------- ----------- -------------
Net additions (deductions) (85,881) 52,735 195,963 713,774 (544,488) (50,754)
---------- --------- ----------------- ----------- ----------- -------------
Net assets available for
plan benefits, beginning of year 1,640,372 699,066 0 0 544,488 125,091
---------- --------- ----------------- ----------- ----------- -------------
Net assets available for
plan benefits, end of year $1,554,491 $ 751,801 $ 195,963 $ 713,774 0 $ 74,337
========== ========= ================= =========== =========== =============
<CAPTION>
LIFELINE
SYSTEMS, INC. PARTICIPANT TOTAL
STOCK FUND LOAN FUND PLAN
------------ ----------- -----
<S> <C> <C> <C>
Additions:
Employee contributions
and rollovers $ 33,478 $ 596,427
Employer contributions 7,669 189,799
Interest and dividend income $ 10,627 156,819
Net appreciation in fair
value of investments 40,573 46,264
Interfund transfers 97,784 148,715 1,418,051
-------------- ----------- ----------
Total additions 179,504 159,342 2,407,360
Deductions:
Benefits and withdrawals 1,469 20,277 386,648
Net depreciation in fair value of
investments 111,048
Administrative expenses 52 4,074
Interfund transfers 110,858 1,418,051
-------------- ----------- -----------
Total deductions 1,521 131,135 1,919,821
-------------- ----------- -----------
Net additions (deductions) 177,983 28,207 487,539
-------------- ----------- -----------
Net assets available for
plan benefits, beginning of year 54,611 136,347 3,199,975
-------------- ----------- -----------
Net assets available for
plan benefits, end of year $ 232,594 $ 164,554 $ 3,687,514
============== =========== ===========
</TABLE>
The accompanying notes are an intergral part of the financial statements
5
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
PLAN BENEFITS, WITH FUND INFORMATION
for the year ended December 31, 1993
<TABLE>
<CAPTION>
Fidelity 20th Century Lifeline
Income Balanced Select Systems, Inc. Participant Total
Fund Fund Fund Conduit Fund Stock Fund Loan Fund Plan
------ -------- ------------ ------------ ------------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Employee contributions and
rollovers $ 242,962 $113,655 $ 89,258 $ 20,983 $ 9,533 $ 476,391
Employer contributions 37,357 11,841 9,493 71,705 89 130,485
Interest and dividend income 112,288 54,999 60,058 1,787 $ 8,388 237,520
Net appreciation in fair value
of investments 44,563 22,960 15,051 82,574
Interfund transfers 46,106 108,866 3,681 60,185 30,803 87,859 337,500
---------- -------- -------- -------- -------- -------- ----------
Total additions 438,713 333,924 185,450 154,660 55,476 96,247 1,264,470
Deductions:
Benefits and withdrawals 326,513 135,073 127,771 27,325 616,682
Administrative expenses 2,104 2,104
Interfund transfers 62,201 17,618 116,597 59,350 865 80,869 337,500
---------- -------- -------- -------- -------- -------- ----------
Total deductions 388,714 152,691 244,368 88,779 865 80,869 956,286
---------- -------- -------- -------- -------- -------- ----------
Net additions (deductions) 49,999 181,233 (58,918) 65,881 54,611 15,378 308,184
---------- -------- -------- -------- -------- -------- ----------
Net assets available for plan
benefits, beginning of year 1,590,373 517,833 603,406 59,210 - 120,969 2,891,791
---------- -------- -------- -------- -------- -------- ----------
Net assets available for plan
benefits, end of year $1,640,372 $699,066 $544,488 $125,091 $ 54,611 $136,347 $3,199,975
========== ======== ======== ======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements
6
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
A. DESCRIPTION OF THE PLAN:
-----------------------
The following description of the Lifeline Systems, Inc. Employee Savings and
Investment 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 is a defined contribution profit-sharing plan covering all
employees of Lifeline Systems, Inc. (the "Company") who work at least
1,000 hours during the plan year. Employees become eligible to participate
on the entry date following six months of service. The Plan was
established in 1984 to provide participants an opportunity to defer taxes
on their savings and is intended to be a "qualified cash or deferred
arrangement" under certain sections of the Internal Revenue Code. It is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
CONTRIBUTIONS
Participants may contribute from 1% to 15% of their pay on a pretax basis
subject to the annual dollar limits established by the Internal Revenue
Service (IRS) and plan limitations. Participants are immediately vested in
their contributions and earnings thereon. Rollover contributions from
qualified 401(k) plans are also allowed. Withdrawals are permitted as
specified by IRS regulations.
Employer contributions may vary from year to year in such amounts as have
been voted by the Company pursuant to the provisions of the Plan. For the
years ended December 31, 1994 and 1993, the Company matched 100% of the
first 2% contributed and 50% of the next 2% contributed up to a maximum of
$1,000.
LOANS
With the approval of the plan administrator, participants may borrow from
their vested interest attributable to matching, discretionary, and
rollover contributions. The maximum amount that may be borrowed is 50% of
a participant's vested interest or $50,000, whichever is less. The minimum
loan is $1,000. The interest rate is fixed and will be equal to the prime
rate plus one and one-half percent. The maximum loan period is five years.
The interest rate charged on participant loans ranged from 7.00% to 10.50%
in 1994 and was 7.5% in 1993.
Continued
7
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
BENEFITS AND WITHDRAWALS
The Plan allows benefits to be paid in the form of a cash payment or
several annuity options which may be selected by participants or
beneficiaries.
The Plan also provides for a preretirement survivor annuity to
participants of the Plan prior to December 1, 1990, which allows 100% of a
married participant's benefits to be used to provide benefits to his/her
spouse if the participant dies before benefit payments commence. This
provision may be waived once the participant reaches age 35 and obtains
written consent from his/her spouse. Benefits to participants not married
who die before retirement will be distributed to designated beneficiaries.
No death benefits were paid in 1994. In 1993, death benefits approximated
$16,000.
A participant may elect to withdraw any amount up to 100% of the value of
that portion of his/her account attributable to his/her contributions
including any interest or gains thereon. Hardship withdrawals are allowed
under the provisions of the Plan.
VESTING
Beginning in 1991, plan participants are 100% vested in the value of their
own contributions, rollovers and employer matching contributions.
Previously, plan participants became vested in employer matching
contributions over a three-year vesting schedule. Prior to 1991,
forfeitures were used by the Company to offset employer contributions.
The Plan allows that, upon disability, normal retirement age or death, an
employee is 100% vested in all contributions.
INVESTMENT OPTIONS
Participants may invest in the following investment options at December
31, 1994:
. The Income Fund -
Massachusetts Mutual Life Insurance Company Group Annuity Contract.
The interest rate is declared in advance and credited monthly. The
interest rate was 8.02% for the years ended December 31, 1994 and
1993.
Bankers Trust Company Pyramid Guaranteed Investment Contracts Fund -
This fund invests in Guaranteed Investment Contracts and Bank
Investment Contracts issued by life insurance companies or banks.
The estimated range of returns for the fund is announced at the
beginning of each year. Interest is credited monthly. The interest
rate ranged from 5.90% to 6.50% and 6.21% to 6.88% for the years
ended December 31, 1994 and 1993, respectively.
Continued
8
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
. Fidelity Balanced Fund - Funds are invested in shares of a
registered investment company that invests in stocks and bonds. This
is a "moderate risk" mutual fund investing no greater than 75% of
its assets in common stocks and no less than 25% in bonds.
. Fidelity Asset Allocation Fund - Funds are invested in shares of a
registered investment company that invests in stocks, bonds and
short-term fixed income investments. The assets will normally be
allocated within the following ranges: 10% - 60% in stocks; 20% -
60% in bonds; and 0 - 70% in short-term fixed income instruments.
. Fidelity Blue Chip Growth Fund - Funds are invested in shares of a
registered investment company that invests in stocks, seeking long-
term earnings growth. At least 65% of its assets are allocated in
the common stocks of large blue chip growth companies.
. Lifeline Systems, Inc. Common Stock - The Plan was amended during
1993 to permit plan participants to purchase the Company's common
stock on the open market. For the year ended December 31, 1994,
purchases and sales of Lifeline Systems, Inc. Common Stock amounted
to $145,655 and $8,060, respectively.
Participants may allocate their individual accounts among the five
investment alternatives and may make transfers as specified in the plan
document. At December 31, 1994, there were 157 employees participating in
the Income Fund, 119 employees participating in the Balanced Fund 35
employees participating in the Asset Allocation Fund, 120 employees
participating in the Blue Chip Growth Fund, and 31 employees participating
in the Stock Fund. The Plan also has a Conduit Fund which is invested with
The Massachusetts Company and is utilized as a "pass-through" holding
account for employer and employee contributions. Funds are deposited into
this account and allocated to other investment options based on
participant's elections.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in mutual and pooled funds and the Company's common stock are
valued at fair market value using year-end closing prices. Investments in
group annuity contracts are valued at the contract value (see Note C).
Participant loans are valued at cost which approximates fair value.
Interest and dividend income is recorded as earned on the accrual basis.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments.
Continued
9
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRIBUTIONS
Contributions from the Company are accrued as of December 31 based upon
the contribution formula. Employee contributions are recorded in the
period in which the employee payroll deductions are made.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
EXPENSES
All administrative expenses and fees are paid by the Company except for
loan fees which are paid by the Plan.
C. Investment Contracts with Insurance Company and Bank:
----------------------------------------------------
In 1991, the Plan entered into an investment contract with Massachusetts
Mutual Life Insurance Company ("Mass Mutual"). This investment is maintained
in a pooled account. The account is credited with earnings on the underlying
investments and charged for plan withdrawals and administrative expenses.
The contract is included in the financial statements at contract value,
which approximates fair value, as reported to the Plan by Mass Mutual.
Contract value represents contributions made under the contract, plus
earnings, less plan withdrawals and administrative expenses. Withdrawals are
allowed under the terms of the contract. The withdrawal method used for
administrative purposes is the Current Contract Pro Rata Withdrawal Method.
In January 1992 the Plan entered into an investment agreement with Bankers
Trust Company to enter into the Bankers Trust Pyramid Guaranteed Investment
Contracts Fund, a separate pooled fund established and managed by Bankers
Trust Company. The Fund invests primarily in Guaranteed Investment Contracts
("GICs") and Bank Investment Contracts issued by life insurance companies,
banks or other financial institutions, and any of the Bankers Trust
Commingled short-term investments funds. The Fund's assets are valued at
fair market value; provided, however assets for which there is no readily
ascertainable market value are valued at fair value determined in good faith
by the Trustee of the Fund. The Fund expects to maintain a constant unit
value of $1.00. Withdrawals are permitted and are subject to a deferred
payout schedule which may have an average maturity of no greater than 2.5
years and a final payment no later than 5 years from the receipt of such
notice by the Trustee of the Fund.
Continued
10
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
D. INVESTMENTS:
------------
Investments held by the Plan at December 31, 1994 and 1993 are summarized as
follows:
<TABLE>
<CAPTION>
1994 1993
FAIR FAIR
DESCRIPTION VALUE VALUE
----------- ----- -----
<S> <C> <C>
Income Fund:
Bankers Trust Company Pyramid Guaranteed
Investment Contracts Fund $ 849,926* $ 661,989*
Massachusetts Mutual Life Insurance Company
Group Annuity Contract 704,565* 978,383*
Fidelity Balanced Fund 751,801* 699,066*
Fidelity Asset Allocation Fund 195,963* -
Fidelity Blue Chip Growth Fund 713,774* -
The Massachusetts Company Conduit Fund 58,255 82,689
Lifeline Systems, Inc. Common Stock 232,594* 54,611
20th Century Select Fund - 544,488*
Wainwright Bank Conduit Fund - 1,214
---------- ----------
$3,506,878 $3,022,440
========== ==========
</TABLE>
* Investment represents 5% or more of net assets available for plan
benefits.
E. SCHEDULE OF NET REALIZED AND UNREALIZED GAIN OR (LOSS)
-----------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
REALIZED UNREALIZED AND UNREALIZED
GAIN OR (LOSS) GAIN OR (LOSS) GAIN OR (LOSS)
-------------- -------------- --------------
<S> <C> <C> <C>
Fidelity Balanced Fund $ 1,805 $(71,276) $(69,471)
Fidelity Asset Allocation Fund - (8,472) (8,472)
Fidelity Blue Chip Growth Fund - 5,691 5,691
20th Century Select Fund (1,939) (31,166) (33,105)
Lifeline Systems, Inc.
Stock Fund 359 40,214 40,573
------- -------- --------
Total $ 225 $(65,009) $(64,784)
======= ======== ========
</TABLE>
Continued
11
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
F. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
---------------------------------------------------
The following is a reconciliation of net assets available for plan benefits
per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
------------------------
1994 1993
---- ----
<S> <C> <C>
Net assets available per the financial statements $3,687,514 $3,199,975
Amounts allocated to withdrawing participants (548,987) (672,432)
---------- ----------
Net assets available for benefits per the Form 5500 $3,138,527 $2,527,543
========== ==========
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended
December 31, 1994
-----------------
<S> <C>
Benefits paid to participants per the financial statements $386,648
Add: amounts allocated to withdrawing participants at
December 31, 1994 548,987
Less: amounts allocated to withdrawing participants at
December 31,1993 (672,432)
--------
Benefits paid to participants per the Form 5500 $263,203
========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior
to December 31, but not yet paid as of that date.
G. TAX STATUS:
----------
The Internal Revenue Service has determined and informed the Company by a
letter dated March 31, 1987 that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan has been amended since receiving the determination letter. However, the
plan administrator and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
Continued
12
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
H. PLAN TERMINATION:
----------------
The Company intends to continue the Plan indefinitely but reserves the right
to terminate the Plan at any time without any liability whatsoever for such
discontinuance or termination. After payment of expenses by the trustee, the
Plan would be liquidated and each participant would receive his or her
interest in the form of a lump-sum payment.
I. CHANGE IN RECORD KEEPER AND CUSTODIAN:
-------------------------------------
The Company replaced CIGNA as its record keeper and custodian beginning with
the 1991 plan year. All assets were transferred on February 6, 1991. At the
transfer date, $24,174 was incorrectly credited to the Plan's CIGNA account
and is payable to CIGNA.
13
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
SUPPLEMENTAL SCHEDULE
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1994
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, RATE OF CURRENT
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT INTEREST COST VALUE
- ---------------------------- ------------------------- -------- ---- -------
<S> <C> <C> <C> <C>
Massachusetts Mutual Life Insurance
Company Group Annuity Contract,
Maturity date: January 2, 1996 Group Annuity Contract 8.02% $ 704,565 $ 704,565
Bankers Trust Company Pyramid
Guaranteed Investment Contracts
Fund Bank Pooled Fund 5.90% - 6.50% 849,926 849,926
Fidelity Balanced Fund Mutual Fund N/A 778,783 751,801
Fidelity Asset Allocation Fund Mutual Fund N/A 204,435 195,963
Fidelity Blue Chip Growth Fund Mutual Fund N/A 708,082 713,774
The Massachusetts Company Conduit Fund Cash Account Floating 58,255 58,255
Lifeline Systems, Inc. Common Stock Shares of Common Stock N/A 177,155 232,594
Participant loans, payment
schedule: fully amortized Participant Loans 7.0% - 10.5% - 164,554
---------- ----------
$3,481,201 $3,671,432
========== ==========
</TABLE>
14
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
SUPPLEMENTAL SCHEDULE
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
SINGLE TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
for the year ended December 31, 1994
Transactions in excess of 5% of the current value of plan assets as of the
beginning of the plan year are summarized as follows:
<TABLE>
<CAPTION>
PURCHASE SELLING COST OF NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSETS OR (LOSS)
- -------------------------- ---------------------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Massachusetts Company Conduit Fund Cash Account $326,266
Massachusetts Company Conduit Fund Cash Account - $324,266 $324,266
Massachusetts Mutual Life
Insurance Company Group
Annuity Contract Group Annuity Contract - 326,266 326,266
Bankers Trust Company Pyramid
Guaranteed Investment
Contracts Fund Bank Pooled Fund 324,266 - -
Twentieth Century Select Fund Mutual Fund 576,494 574,645 $1,849
Fidelity Blue Chip Growth Fund Mutual Fund 576,484
Fidelity Balanced Fund Mutual Fund 210,776 209,777 999
Fidelity Asset Allocation Fund Mutual Fund 175,934 - - -
</TABLE>
15
<PAGE>
LIFELINE SYSTEMS, INC. EMPLOYEE SAVINGS AND INVESTMENT PLAN
SUPPLEMENTAL SCHEDULE
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
for the year ended December 31, 1994
Series of transactions in excess of 5% of the current value of plan assets as of
the beginning of the plan year are summarized as follows:
<TABLE>
<CAPTION>
NUMBER NUMBER
DESCRIPTION OF PURCHASE OF SELLING COST OF NET
IDENTITY OF PARTY INVOLVED OF ASSET TRANSACTIONS PRICE TRANSACTIONS PRICE ASSET GAIN OR (LOSS)
- --------------------------- ----------- ------------ ---------- ------------- ------- ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Massachusetts Company
Conduit Fund Cash Account 61 $1,644,064 112 $1,689,055 $1,689,055
Massachusetts Mutual Life
Insurance Company Group
Annuity Contract Group Annuity Contract - - 1 326,266 326,266
Fidelity Balanced Fund Mutual Fund 17 398,250 7 276,048 252,837 $23,211
Fidelity Asset Allocation
Fund Mutual Fund 6 204,434 - - - -
Fidelity Blue Chip Growth
Fund Mutual Fund 6 708,082 - - - -
20th Century Select Fund Mutual Fund 8 124,436 5 635,824 637,763 (1,939)
Bankers Trust Company Pyramid
Guaranteed Investment
Contracts Fund Bank Pooled Fund 9 597,630 10 416,020 416,020 -
</TABLE>
16
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements of
Lifeline Systems, Inc. on Form S-8 (File Nos. 33-12030, 33-31284, 33-40684,
33-48187, 33-58632, 33-59499 and 33-79294) of our report dated June 2, 1995, on
our audits of the financial statements of the Lifeline Systems, Inc. Employee
Savings and Investment Plan as of December 31, 1994 and 1993 and for the years
then ended, which report is included in this Annual Report on Form 11-K.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 28, 1995
