<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
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 33-26970
ADT SECURITY SYSTEMS, INC. PROFIT SHARING
AND SAVINGS PLAN
(FULL TITLE OF THE PLAN)
300 INTERPACE PARKWAY
PARSIPPANY, NEW JERSEY 07054
----------------------------
(ADDRESS OF THE PLAN)
ADT LIMITED
(NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN)
CEDAR HOUSE
41 CEDAR AVENUE
HAMILTON HM 12, BERMUDA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
<PAGE> 2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
ADT Security Systems, Inc.
Profit Sharing and Savings Plan
-------------------------------
(Name of Plan)
Date: June 28, 1996 By: /s/ Michael B. Sacks
---------------------- ----------------------------
Michael B. Sacks
Member, Profit Sharing
and Savings Committee
<PAGE> 3
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
---------
INDEX
Pages
-----
Financial Statements and Exhibits
Report of Independent Accountants 1-2
Financial Statements:
Statements of Net Assets Available for Benefits
with Fund Information as of December 31, 1995 and 1994 3-4
Statements of Changes in Net Assets
Available for Benefits with Fund Information
for the Years Ended December 31, 1995 and 1994 5-6
Notes to Financial Statements 7-14
Supplemental Schedules:
Item 27A - Schedule of Assets Held
for Investment Purposes as of
December 31, 1995 and 1994 15-16
Item 27D - Schedule of Reportable
Transactions for the year ended
December 31, 1995 17
Item 27E - Schedule of Nonexempt
Transactions for the year ended
December 31, 1995 18
Exhibit I - Consent of Independent Accountants 19
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN:
WE HAVE AUDITED THE ACCOMPANYING STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION OF THE ADT SECURITY SYSTEMS, INC. PROFIT SHARING AND
SAVINGS PLAN (THE "PLAN") AS OF DECEMBER 31, 1995 AND 1994 AND THE RELATED
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 BENEFITS OF THE PLAN AS OF
DECEMBER 31, 1995 AND 1994, AND THE CHANGES IN NET ASSETS AVAILABLE FOR 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 ACCOMPANYING SUPPLEMENTAL SCHEDULES
OF 1) ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1995 AND 1994; 2)
REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995; AND, 3) NON-EXEMPT
TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995 ARE PRESENTED FOR THE PURPOSE
OF ADDITIONAL ANALYSIS AND ARE NOT A
1
<PAGE> 5
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
BENEFITS AS OF DECEMBER 31, 1995 AND 1994 AND THE STATEMENTS OF CHANGES IN NET
ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS THEN ENDED IS PRESENTED FOR PURPOSES
OF ADDITIONAL ANALYSIS RATHER THAN TO PRESENT THE NET ASSETS AVAILABLE FOR
BENEFITS AND CHANGES IN NET ASSETS AVAILABLE FOR 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.
JUNE 7, 1996
NEW YORK, NEW YORK
2
<PAGE> 6
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
as of December 31, 1995
-----------
<TABLE>
<CAPTION>
Participant-Directed
-------------------------------------------------------------------
Fund A New Fund B New Fund C New Fund D New Fund E
------ ---------- ---------- ---------- ----------
Intermediate Disciplined Cash
ADT Limited Bond Equity Management Balanced
ASSETS: Share Fund Fund Fund Fund Fund
- ------- ---------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
ADT Limited Share Fund
(cost $43,632,962) $39,344,661
Participation in Fidelity
Intermediate Bond Fund
(cost $10,400,970) $10,573,420
Participation in Fidelity
Disciplined Equity Fund
(cost $18,033,851) $16,576,656
Participation in Dreyfus
Cash Management
Fund (cost $24,244,623) $23,243,884
Participation in Fidelity
Puritan Fund (cost $868,953) $891,707
Participation in Fidelity
ContraFund (cost $2,926,890)
Participation in Fidelity
Worldwide Fund (cost $396,042)
Participant Loans (13,487) (46,292) (33,070) (101)
Due from Broker for Securities Sold 26,757 4,487 9,667 1,509 3,836
Company contribution receivable 151,552
----------- ----------- ----------- ----------- --------
Total assets $39,522,970 $10,564,420 $16,540,031 $23,212,323 $895,442
LIABILITIES:
Due to Broker for Securities Sold $ 150,258 $ 58,890 $ 1,840,387 $ 111,777 $ 23,378
Administration fees payable 11,821 5,413 3,428 22,438 4,870
----------- ----------- ----------- ----------- --------
Total liabilities 162,079 64,303 1,843,815 134,215 28,248
----------- ----------- ----------- ----------- --------
NET ASSETS AVAILABLE FOR BENEFITS $39,360,891 $10,500,117 $14,696,216 $23,078,108 $867,194
=========== =========== =========== =========== ========
</TABLE>
<TABLE>
<CAPTION>
Nonparticipant-
Participant-Directed Directed
---------------------------------------- ------------
New Fund F New Fund G Fund A
---------- ---------- ------
Aggressive Global Participant
Equity Equity Loan ADT Limited
ASSETS: Fund Fund Account Share Fund Total
- ------- ---- ---- ------- ---------- -----
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
ADT Limited Share Fund
(cost $43,632,962) $15,185,859 $54,530,520
Participation in Fidelity
Intermediate Bond Fund
(cost $10,400,970) 10,573,420
Participation in Fidelity
Disciplined Equity Fund
(cost $18,033,851) 16,576,656
Participation in Dreyfus
Cash Management
Fund (cost $24,244,623) 1,000,739 24,244,623
Participation in Fidelity
Puritan Fund (cost $868,953) 891,707
Participation in Fidelity
ContraFund (cost $2,926,890) $2,854,149 2,854,149
Participation in Fidelity
Worldwide Fund (cost $396,042) $401,439 401,439
Participant Loans (723) (198) $2,430,708 2,336,837
Due from Broker for Securities Sold 46,256
Company contribution receivable 747,266 898,818
---------- -------- ---------- ----------- ------------
Total assets $2,853,426 $401,241 $2,430,708 $16,933,864 $113,354,425
LIABILITIES:
Due to Broker for Securities Sold $ 221,563 $ 4,088 $ 2,410,341
Administration fees payable 7,140 4,175 $ 27,582 86,867
---------- -------- ---------- ----------- ------------
Total liabilities 228,703 8,263 -- 27,582 2,497,208
---------- -------- ---------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $2,624,723 $392,978 $2,430,708 $16,906,282 $110,857,217
========== ======== ========== =========== ============
</TABLE>
-3-
The accompanying notes are an integral part of the financial statements.
<PAGE> 7
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
as of December 31, 1994
-----------
<TABLE>
<CAPTION>
Nonparticipant-
Participant-Directed Directed
------------------------------------------------------- -------------
Fund A Old Fund B Old Fund C Old Fund D Fund A
------ ---------- ---------- ---------- ------
Fixed General Money
ADT Limited Income Equity Market ADT Limited
Share Fund Fund Fund Fund Share Fund Total
---------- ---- ---- ---- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
ADT Limited Share Fund
(cost $38,527,694) $25,903,462 $ 9,563,906 $35,467,368
Participation in Trustee's
fixed income fund (cost -
$10,526,746) $10,166,382 10,166,382
Participation in Trustee's
equity fund (cost -
$11,600,545) $13,867,891 13,867,891
Participation in Trustee's
short-term investment
fund (cost $25,706,037) 414,351 409,840 $24,804,797 77,049 25,706,037
Interest receivable 132 64,437 40,256 38,980 143,805
Participants' contributions receivable 470,597 110,761 166,787 180,627 928,772
Company contribution receivable 493,978 2,412,294 2,906,272
Transfers 157,127 (236,209) (71,148) 155,142 (4,912) -
----------- ----------- ----------- ----------- ----------- -----------
Total assets $27,025,296 $10,519,722 $14,413,626 $25,179,546 $12,048,337 $89,186,527
LIABILITIES:
Administration fees payable $ 31,255 $ 29,469 $ 38,820 $ 30,551 $ 13,920 $ 144,015
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities 31,255 29,469 38,820 30,551 13,920 144,015
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $26,994,041 $10,490,253 $14,374,806 $25,148,995 $12,034,417 $89,042,512
=========== =========== =========== =========== =========== ===========
</TABLE>
-4-
The accompanying notes are an integral part of the financial statements.
<PAGE> 8
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
for the year ended December 31, 1995
-----------
<TABLE>
<CAPTION>
Participant-Directed
----------------------------------------------------------------------------------
Fund A Old Fund B Old Fund C Old Fund D New Fund B New Fund C
------ ---------- ---------- ---------- ---------- ----------
Fixed General Money Intermediate Disciplined
ADT Limited Income Equity Market Bond Equity
Share Fund Fund Fund Fund Fund Fund
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Additions:
Contributions:
Participants $ 5,281,336 $ 621,236 $ 1,076,317 $ 1,159,312 $ 418,743 $ 690,662
Company 461,049
----------- ------------ ------------ ------------ ----------- -----------
Total contributions 5,742,385 621,236 1,076,317 1,159,312 418,743 690,662
------------ ------------ ------------ ------------ ----------- -----------
Income from investments:
Interest 16,044 12,566 10,889 1,031,400
Dividends
Net appreciation (depreciation)
in fair value of investments 10,353,393 1,088,729 4,128,386 351,380 (1,516,543)
------------ ------------ ------------ ------------ ----------- -----------
Total income (loss) from investments 10,369,437 1,101,295 4,139,275 1,031,400 351,380 (1,516,543)
------------ ------------ ------------ ------------ ----------- -----------
Total additions (deductions) 16,111,822 1,722,531 5,215,592 2,190,712 770,123 (825,881)
------------ ------------ ------------ ------------ ----------- -----------
Deductions:
Distributions and withdrawals (3,200,019) (1,075,275) (1,204,393) (2,654,180) (174,622) (355,694)
Administration fees (165,205) (664) (1,941) (23,274) (71,240) (101,849)
------------ ------------ ------------ ------------ ----------- -----------
Total deductions (3,365,224) (1,075,939) (1,206,334) (2,677,454) (245,862) (457,543)
Transfers between funds 761,872 (11,136,845) (18,384,064) (24,662,253) 10,224,368 16,345,936
Participant Loans (1,141,620) (248,512) (366,296)
----------- ------------ ------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS 12,366,850 (10,490,253) (14,374,806) (25,148,995) 10,500,117 14,696,216
----------- ------------ ------------ ------------ ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1994 26,994,041 10,490,253 14,374,806 25,148,995
----------- ------------ ------------ ------------ ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1995 $39,360,891 $ 0 $ 0 $ 0 $10,500,117 $14,696,216
=========== ============ ============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Nonparticipant-
Participant-Directed Directed
--------------------------------------------------------------------- ---------------
New Fund D New Fund E New Fund F New Fund G Fund A
---------- ---------- ---------- ---------- ------
Cash Aggressive Global
Management Balanced Equity Equity Participant ADT Limited
Fund Fund Fund Fund Loans Share Fund
---- ---- ---- ---- ----- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Contributions:
Participants $ 759,923 $ 30,817 $ 78,389 $ 14,328
Company $ 2,368,964
----------- -------- ---------- -------- ---------- -----------
Total contributions 759,923 30,817 78,389 14,328 2,368,964
----------- -------- ---------- -------- ---------- -----------
Income from investments:
Interest
Dividends 441,486
Net appreciation (depreciation)
in fair value of investments 13,741 (142,672) (1,987) 4,437,169
----------- -------- ---------- -------- ---------- -----------
Total income (loss) from investments 441,486 13,741 (142,672) (1,987) 4,437,169
----------- -------- ---------- -------- ---------- -----------
Total additions (deductions) 1,201,409 44,558 (64,283) 12,341 6,806,133
----------- -------- ---------- -------- ---------- -----------
Deductions:
Distributions and withdrawals (728,732) (1,288) (3,007) (1,201) (1,405,721)
Administration fees (114,555) (5,065) (7,410) (4,215) (70,802)
----------- -------- ---------- -------- ---------- -----------
Total deductions (843,287) (6,353) (10,417) (5,416) (1,476,523)
Transfers between funds 23,312,999 855,998 2,732,647 387,964 (438,622)
Participant Loans (593,013) (27,009) (33,224) (1,911) 2,430,708 (19,123)
----------- -------- ---------- -------- ---------- -----------
INCREASE (DECREASE) IN NET ASSETS 23,078,108 867,194 2,624,723 392,978 2,430,708 4,871,865
----------- -------- ---------- -------- ---------- -----------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1994 12,034,417
----------- -------- ---------- -------- ---------- -----------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1995 $23,078,108 $867,194 $2,624,723 $392,978 $2,430,708 $16,906,282
=========== ======== ========== ======== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Total
-----
<S> <C>
Additions:
Contributions:
Participants $ 10,131,063
Company 2,830,013
------------
Total contributions 12,961,076
------------
Income from investments:
Interest 1,070,899
Dividends 441,486
Net appreciation (depreciation)
in fair value of investments 18,711,596
------------
Total income (loss) from investments 20,223,981
------------
Total additions (deductions) 33,185,057
------------
Deductions:
Distributions and withdrawals (10,804,132)
Administration fees (566,220)
------------
Total deductions (11,370,352)
Transfers between funds -
Participant Loans -
------------
INCREASE (DECREASE) IN NET ASSETS 21,814,705
------------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1994 89,042,512
------------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1995 $110,857,217
============
</TABLE>
-5-
The accompanying notes are an integral part of the financial statements.
<PAGE> 9
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
as of December 31, 1994
-----------
<TABLE>
<CAPTION>
Nonparticipant-
Participant-Directed Directed
------------------------------------------------------- ---------------
Fund A Old Fund B Old Fund C Old Fund D Fund A
------ ---------- ---------- ---------- ------
Fixed General Money
ADT Limited Income Equity Market ADT Limited
Share Fund Fund Fund Fund Share Fund Total
---------- ---- ---- ---- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
Additions:
Contributions:
Participants $ 4,790,941 $ 1,198,914 $ 1,786,040 $ 1,869,264 -- $ 9,645,159
Company 758,176 3,755,598 4,513,774
------------ ------------ ------------ ------------ ------------ ------------
Total contributions 5,549,117 1,198,914 1,786,040 1,869,264 3,755,598 14,158,933
------------ ------------ ------------ ------------ ------------ ------------
Income from investments:
Interest 11,185 11,735 13,026 1,080,309 -- 1,116,255
Net appreciation (depreciation)
in fair value of investments 4,007,869 (164,231) (57,778) 1,605,436 5,391,296
------------ ------------ ------------ ------------ ------------ ------------
Total income (loss) from investments 4,019,054 (152,496) (44,752) 1,080,309 1,605,436 6,507,551
------------ ------------ ------------ ------------ ------------ ------------
Total additions 9,568,171 1,046,418 1,741,288 2,949,573 5,361,034 20,666,484
------------ ------------ ------------ ------------ ------------ ------------
Deductions:
Distributions and withdrawals (2,523,723) (1,501,317) (1,676,321) (4,204,702) (1,455,067) (11,361,130)
Administration fees (56,485) (58,314) (74,236) (86,763) (25,157) (300,955)
------------ ------------ ------------ ------------ ------------ ------------
Total deductions (2,580,208) (1,559,631) (1,750,557) (4,291,465) (1,480,224) (11,662,085)
Transfers between funds 183,073 (589,361) 43,902 375,494 (13,108) --
------------ ------------ ------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS 7,171,036 (1,102,574) 34,633 (966,398) 3,867,702 9,004,399
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1993 19,823,005 11,592,827 14,340,173 26,115,393 8,166,715 80,038,113
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1994 $ 26,994,041 $ 10,490,253 $ 14,374,806 $ 25,148,995 $ 12,034,417 $ 89,042,512
============ ============ ============ ============ ============ ============
</TABLE>
-6-
The accompanying notes are an integral part of the financial statements.
<PAGE> 10
ADT SECURITY SYSTEMS, INC
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. PLAN DESCRIPTION
THE ADT SECURITY SYSTEMS, INC. PROFIT SHARING AND SAVINGS PLAN (THE
"PLAN") IS ADMINISTERED THROUGH A TRUSTEE, (THE "TRUSTEE"), CURRENTLY
MELLON BANK, AND BY A COMMITTEE CONSISTING OF EMPLOYEES OF ADT SECURITY
SYSTEMS, INC. (THE "COMPANY"). UNDER THE PROVISIONS OF THE PLAN,
ELIGIBLE EMPLOYEES MAY MAKE PARTICIPATING CONTRIBUTIONS FROM 1% TO 8%
OF TOTAL COMPENSATION (INCLUDING COMMISSIONS, BONUSES AND OVERTIME
PAY), WHICH ARE ELIGIBLE FOR THE COMPANY'S MATCHING CONTRIBUTIONS. SUCH
CONTRIBUTIONS MAY BE MADE ON AN AFTER-TAX BASIS OR A BEFORE-TAX BASIS
PURSUANT TO SECTION 401(K) OF THE INTERNAL REVENUE CODE; BEFORE-TAX
CONTRIBUTIONS BEING LIMITED TO 1% TO 4% OF COMPENSATION. PARTICIPANTS
MAY ALSO ELECT TO MAKE ADDITIONAL AFTER-TAX CONTRIBUTIONS OF UP TO AN
ADDITIONAL 5% OF THEIR COMPENSATION, WHICH ARE NOT ELIGIBLE FOR THE
COMPANY'S MATCHING CONTRIBUTIONS.
THE COMPANY MAKES CONTRIBUTIONS TO THE TRUSTEE, OF AN AMOUNT EQUAL TO
20% OF THE AGGREGATE PARTICIPATING CONTRIBUTIONS (UP TO 8% OF EACH
PARTICIPANT'S COMPENSATION) OF PARTICIPANTS (THE "BASIC" CONTRIBUTION).
IN ADDITION, IF THE NET EARNINGS OF THE COMPANY, AS DEFINED IN THE PLAN
DOCUMENT, DURING A CALENDAR YEAR EXCEEDED BY 12% OR MORE THE NET
EARNINGS FOR THE IMMEDIATELY PRECEDING CALENDAR YEAR, THE COMPANY WAS
REQUIRED TO MAKE A SUPPLEMENTAL CONTRIBUTION TO THE PLAN OF FROM 5% TO
80% OF THE AGGREGATE PARTICIPATING CONTRIBUTIONS OF THE EMPLOYEES MADE
DURING ANY SUCH CALENDAR YEAR BASED ON AN INCREASING SCALE TIED TO
EARNINGS IMPROVEMENT OF FROM 12% TO 25%. EARNINGS IMPROVEMENT WAS
COMPUTED ON THE BASIS OF THE NET EARNINGS, BEFORE INTEREST AND FEDERAL
AND STATE INCOME TAXES, BUT AFTER APPLYING AN IMPUTED INTEREST COST FOR
ACQUISITIONS, AND AFTER MAKING PROVISION FOR COMPANY BASIC
CONTRIBUTIONS; HOWEVER, THE BOARD OF DIRECTORS OF THE COMPANY COULD
ADJUST SUCH AMOUNTS FOR EXTRAORDINARY OR SPECIAL ITEMS OR OTHER UNUSUAL
CHARGES OR CREDITS INCLUDING EXTRAORDINARY ACCOUNTING CHARGES OR
CREDITS AS IT DEEMED APPROPRIATE FOR THE PURPOSES OF THE PLAN. THE
COMPANY COULD NOT MAKE, HOWEVER, A SUPPLEMENTAL CONTRIBUTION IN EXCESS
OF 30% FOR ANY YEAR IN WHICH THE COMPANY'S EARNINGS IMPROVEMENT IS
MEASURED AGAINST THE NET EARNINGS OF A PRIOR YEAR, IF SUCH PRIOR YEAR'S
NET EARNINGS WERE MORE THAN 10% BELOW THE NET EARNINGS OF THE YEAR
IMMEDIATELY PRECEDING SUCH PRIOR YEAR. EFFECTIVE JANUARY 1, 1995, THE
PLAN WAS AMENDED TO ALLOW THE COMPANY, IN ITS SOLE DISCRETION, TO MAKE
A SUPPLEMENTAL CONTRIBUTION, IN ANY PERCENTAGE, SUBJECT TO THE MAXIMUM
LIMIT OR ELECT TO MAKE NO SUPPLEMENTAL CONTRIBUTION. AS BEFORE, THE
MAXIMUM SUPPLEMENTAL CONTRIBUTION IS 80% OF THE AGGREGATE PARTICIPATING
CONTRIBUTIONS OF THE EMPLOYEES MADE DURING THE YEAR. THE COMPANY MADE
SUPPLEMENTAL CONTRIBUTIONS OF $947,202 FOR THE YEAR ENDED DECEMBER 31,
1995 AND $2,770,851 FOR THE YEAR ENDED DECEMBER 31, 1994.
7
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. PLAN DESCRIPTION, CONTINUED
IN 1995, THE INVESTMENT OPTIONS OF THE PLAN WERE CHANGED AS A RESULT OF
A PLAN AMENDMENT. PRIOR TO OCTOBER 1, 1995, PARTICIPANTS WERE ABLE TO
ELECT TO HAVE CONTRIBUTIONS INVESTED IN EITHER FUND A- ADT LIMITED
SHARE FUND WHICH INVESTS IN COMMON SHARES OF ADT LIMITED; FUND B -
FIXED INCOME FUND WHICH CONSISTS OF INVESTMENTS IN THE TRUSTEE'S POOLED
FIXED INCOME FUND WHICH INVESTS IN OBLIGATIONS SUCH AS U.S. TREASURY
NOTES, OTHER FEDERAL AGENCY OBLIGATIONS, CORPORATE OBLIGATIONS AND
TEMPORARY INVESTMENTS, WHICH HAVE AN AVERAGE MATURITY OF FOUR TO FIVE
YEARS; FUND C - GENERAL EQUITY FUND WHICH CONSISTS OF INVESTMENTS IN
THE TRUSTEE'S POOLED COMMON STOCK FUND WHICH INVESTS IN SUCH INDUSTRIES
AS AUTOMOTIVE, BANKING, DRUGS, MEDICAL AND HEALTH, INSURANCE,
CHEMICALS, FOOD PRODUCTS, OIL AND GAS, UTILITIES AND ELECTRONICS;
AND/OR, FUND D - MONEY MARKET FUND WHICH CONSISTS OF INVESTMENTS IN THE
TRUSTEE'S POOLED SHORT TERM FUND OF MONEY MARKET INSTRUMENTS WHICH
INVESTS IN OBLIGATIONS SUCH AS DISCOUNTED, DEMAND AND INTEREST BEARING
NOTES, U.S. TREASURY BILLS AND NOTES, CORPORATE TEMPORARY INVESTMENTS,
TIME DEPOSITS, AND CERTIFICATES OF DEPOSIT.
THE INVESTMENT OPTIONS IN EFFECT PRIOR TO OCTOBER 1, 1995 ARE REFERRED
TO WITHIN THE STATEMENTS OF NET ASSETS WITH FUND INFORMATION AND THE
STATEMENTS OF CHANGES IN NET ASSETS WITH FUND INFORMATION AND THE NOTES
TO FINANCIAL STATEMENTS AS THE OLD FUND B, C AND D.
EFFECTIVE OCTOBER 1, 1995, SIX NEW MUTUAL FUNDS REPLACED THE OLD
INVESTMENT OPTIONS; HOWEVER, THE ADT LIMITED STOCK FUND REMAINED AS AN
INVESTMENT OPTION. THE NEW INVESTMENT OPTIONS ARE AS FOLLOWS: FUND B -
INTERMEDIATE BOND FUND IS INVESTED IN FIDELITY'S INTERMEDIATE BOND FUND
WHICH CONSISTS OF INVESTMENTS IN FIXED INCOME OBLIGATIONS IN DOMESTIC
AND FOREIGN DEBT SECURITIES, WHICH HAVE AN AVERAGE MATURITY OF THREE TO
TEN YEARS; FUND C - EQUITY FUND IS INVESTED IN FIDELITY'S DISCIPLINED
EQUITY FUND WHICH CONSISTS OF INVESTMENTS IN DOMESTIC COMMON STOCKS IN
SUCH INDUSTRIES AS ENERGY, BANKING, HEALTH, TECHNOLOGY, UTILITIES AND
CONSUMER PRODUCTS; FUND D - CASH MANAGEMENT FUND IS INVESTED IN THE
DREYFUS CASH MANAGEMENT FUND WHICH CONSISTS OF INVESTMENTS IN
SHORT-TERM MONEY MARKET OBLIGATIONS SUCH AS U.S. GOVERNMENT SECURITIES,
CERTIFICATES OF DEPOSIT, TIME DEPOSITS, BANKERS' ACCEPTANCES,
REPURCHASE AGREEMENTS, COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE
OBLIGATIONS; FUND E - BALANCED FUND IS INVESTED IN FIDELITY'S PURITAN
FUND WHICH CONSISTS OF INVESTMENTS IN COMMON STOCKS AND PREFERRED
STOCKS IN SUCH INDUSTRIES AS ENERGY, FINANCE, DURABLES, BASIC
INDUSTRIES AND RETAIL AND INVESTMENTS IN BONDS CONSISTING OF
INVESTMENTS IN U.S. GOVERNMENT AND GOVERNMENT AGENCY SECURITIES,
CORPORATE BONDS, MORTGAGE SECURITIES AND FOREIGN BONDS; FUND F -
AGGRESSIVE EQUITY FUND IS INVESTED IN FIDELITY'S CONTRAFUND WHICH
CONSISTS OF INVESTMENTS IN COMMON STOCKS AND PREFERRED STOCKS,
8
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. PLAN DESCRIPTION, CONTINUED
GENERALLY IN SMALL AND MEDIUM-SIZED COMPANIES, IN SUCH INDUSTRIES AS
FINANCE, TECHNOLOGY, ENERGY, DURABLES, AND BASIC INDUSTRIES; FUND G -
GLOBAL EQUITY IS INVESTED IN FIDELITY'S WORLDWIDE FUND WHICH CONSISTS
OF INVESTMENTS IN EQUITY SECURITIES ISSUED BY COMPANIES OF ALL SIZES
WORLDWIDE, IN SUCH INDUSTRIES AS FINANCE, BASIC INDUSTRIES, RETAIL,
DURABLES, CONSTRUCTION AND REAL ESTATE, PRIMARILY IN SUCH COUNTRIES AS
THE U.S., THE NETHERLANDS, GERMANY, JAPAN, FRANCE, SWITZERLAND, AND
FINLAND.
THE INVESTMENT OPTIONS IN EFFECT BEGINNING OCTOBER 1, 1995 ARE REFERRED
TO WITHIN THE STATEMENTS OF NET ASSETS WITH FUND INFORMATION AND
STATEMENTS OF CHANGES IN NET ASSETS WITH FUND INFORMATION AND THE NOTES
TO THE FINANCIAL STATEMENTS AS THE NEW FUND B, C, D, E, F AND G. THE
OLD AND THE NEW FUNDS ARE COLLECTIVELY REFERRED TO AS THE "TRUST FUND",
HEREAFTER. PURSUANT TO THE PLAN AMENDMENT, ON OCTOBER 1, 1995, THE
BALANCE IN EACH OF THE PARTICIPANTS' ACCOUNTS, WITHIN OLD FUNDS B, C,
AND D WERE TRANSFERRED INTO THE NEW FUNDS B, C, AND D, RESPECTIVELY.
PRIOR TO THE PLAN AMENDMENT, PARTICIPANTS WERE ABLE TO CHANGE THEIR
INVESTMENT OPTIONS FOUR TIMES IN A 12-MONTH PERIOD. EFFECTIVE OCTOBER
1, 1995, PARTICIPANTS MAY CHANGE THEIR INVESTMENT OPTIONS, CONTRIBUTION
PERCENTAGES, AND TRANSFER ACCOUNT BALANCES ON AN UNLIMITED BASIS. THE
PERCENTAGE CONTRIBUTED TO EACH FUND MUST BE IN INCREMENTS OF 10%. THE
TOTAL NUMBER OF PARTICIPANTS IN EACH FUND AT DECEMBER 31, 1995 IS AS
FOLLOWS:
<TABLE>
<S> <C>
FUND A - ADT LIMITED SHARE FUND 6,266
NEW FUND B - INTERMEDIATE BOND FUND 2,297
NEW FUND C - EQUITY FUND 2,552
NEW FUND D - CASH MANAGEMENT FUND 3,426
NEW FUND E - BALANCE FUND 376
NEW FUND F - AGGRESSIVE EQUITY FUND 594
NEW FUND G - GLOBAL EQUITY FUND 265
</TABLE>
THE TOTAL NUMBER OF PARTICIPANTS IN THE PLAN WAS 6,661 AS OF DECEMBER
31, 1995 WHICH IS LESS THAN THE SUM OF THE NUMBER OF PARTICIPANTS SHOWN
ABOVE BECAUSE PARTICIPANTS HAVE INVESTED THEIR CONTRIBUTIONS IN MORE
THAN ONE FUND.
9
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. PLAN DESCRIPTION, CONTINUED
EACH PARTICIPANT'S ACCOUNT IS CREDITED WITH THE PARTICIPANT'S
CONTRIBUTIONS. THE COMPANY'S 20% BASIC CONTRIBUTIONS, AND THE COMPANY'S
SUPPLEMENTAL CONTRIBUTIONS, IF ANY, ARE INVESTED IN THE ADT LIMITED
SHARE FUND AND CREDITED TO THE PARTICIPANT'S ACCOUNT. PENSION ELIGIBLE
PARTICIPANTS ARE ENTITLED TO DIRECT COMPANY CONTRIBUTIONS. EFFECTIVE
JANUARY 1, 1995, THE PLAN WAS AMENDED TO LIMIT THE CONTRIBUTIONS OF
"HIGHLY COMPENSATED" ASSOCIATES, AS DEFINED UNDER IRS REGULATIONS, TO
THE 8% MAXIMUM PARTICIPATING CONTRIBUTIONS ONLY. PLAN EARNINGS AND
LOSSES IN EACH FUND ARE ALLOCATED TO PARTICIPANT ACCOUNTS RELATIVE TO
THE PARTICIPANT'S ACCOUNT BALANCE IN EACH RESPECTIVE FUND.
EFFECTIVE NOVEMBER 1, 1995, A LOAN PROVISION IS AVAILABLE TO
PARTICIPANTS IN WHICH AN ACTIVE PARTICIPANT MAY BORROW FROM THE
PARTICIPANT'S VESTED ACCOUNT BALANCE A MINIMUM OF $1,000 UP TO 50% OF
THE VESTED ACCOUNT BALANCE. THE MAXIMUM AMOUNT THAT CAN BE BORROWED IS
$50,000. LOAN TRANSACTIONS ARE TREATED AS A TRANSFER TO (FROM) THE
INVESTMENT FUND FROM (TO) THE PARTICIPANT LOAN FUND. LOAN TERMS RANGE
FROM 1-5 YEARS OR UP TO 15 YEARS FOR HOME PURCHASE LOANS. THE LOANS ARE
COLLATERALIZED BY THE BALANCE IN THE PARTICIPANTS' ACCOUNT AND BEAR
INTEREST AT A RATE COMMENSURATE WITH PREVAILING RATES AT THE BEGINNING
OF EACH MONTH AND ARE FIXED FOR THE DURATION OF THE LOAN. PRINCIPAL AND
INTEREST IS PAID RATABLY THROUGH PAYROLL DEDUCTIONS.
EFFECTIVE JANUARY 1, 1995, THE PLAN WAS AMENDED TO ALLOW NEWLY HIRED
ASSOCIATES TO CONTRIBUTE TO THE PLAN ONLY AFTER THEY HAVE COMPLETED ONE
YEAR OF EMPLOYMENT SERVICE WITH ADT SECURITY SYSTEMS OR ONE OF ITS
SUBSIDIARIES OR AFFILIATES. TEMPORARY EMPLOYEES ARE NO LONGER ELIGIBLE
TO PARTICIPATE IN THE PLAN. TERMINATION OF SERVICE FOR ANY REASON OTHER
THAN RETIREMENT, DEATH, DISABILITY OR LAYOFF RESULTS IN THE FORFEITURE
OF THE NONVESTED PORTION OF A PARTICIPANT'S ACCOUNT. UNDER THE TERMS OF
THE PLAN, FORFEITURES ARE USED TO REDUCE SUBSEQUENT COMPANY
CONTRIBUTIONS. FORFEITURES FOR 1995 AND 1994 WERE $199,734 AND
$120,750, RESPECTIVELY.
A PARTICIPANT IS FULLY VESTED AT ALL TIMES IN THE AMOUNT CREDITED TO
THE PLAN ACCOUNT ATTRIBUTABLE TO THE PARTICIPANT'S OWN CONTRIBUTIONS. A
PARTICIPANT BECOMES FULLY VESTED IN THE AMOUNT ATTRIBUTABLE TO COMPANY
CONTRIBUTIONS AFTER THREE YEARS OF SERVICE, AS DEFINED IN THE PLAN
DOCUMENT. PARTICIPANTS SHOULD REFER TO THE PLAN DOCUMENT FOR A MORE
COMPLETE DESCRIPTION OF THE PLAN'S PROVISIONS.
10
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING
THE FINANCIAL STATEMENTS OF THE PLAN HAVE BEEN PREPARED ON THE ACCRUAL
BASIS OF ACCOUNTING.
USE OF ESTIMATES
THE PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES REQUIRES MANAGEMENT TO MAKE SIGNIFICANT
ESTIMATES AND ASSUMPTIONS THAT AFFECT THE REPORTED AMOUNTS OF ASSETS
AND LIABILITIES AND DISCLOSURES 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.
RISKS AND UNCERTAINTIES
THE PLAN PROVIDES FOR VARIOUS INVESTMENT OPTIONS IN A COMBINATION OF
MUTUAL FUNDS AND OTHER INVESTMENT SECURITIES. INVESTMENT SECURITIES ARE
EXPOSED TO VARIOUS RISKS, SUCH AS INTEREST RATE, MARKET AND CREDIT. DUE
TO THE LEVEL OF RISK ASSOCIATED WITH CERTAIN INVESTMENT SECURITIES AND
THE LEVEL OF UNCERTAINTY RELATED TO CHANGES IN THE VALUE OF INVESTMENT
SECURITIES, IT IS AT LEAST REASONABLY POSSIBLE THAT CHANGES IN RISKS IN
THE NEAR TERM WOULD MATERIALLY AFFECT PARTICIPANTS' ACCOUNT BALANCES
AND THE AMOUNTS REPORTED IN THE STATEMENT OF NET ASSETS AVAILABLE FOR
PLAN BENEFITS AND THE STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
PLAN BENEFITS.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
SECURITY TRANSACTIONS ARE ACCOUNTED FOR ON THE TRADE DATE. DIVIDEND
INCOME IS RECORDED ON THE EX-DIVIDEND DATE AND INTEREST INCOME IS
ACCRUED AS EARNED.
FEES AND EXPENSES
ALL TAXES, EXPENSES, FEES AND CHARGES OF ANY KIND IN RESPECT OF THE
TRUST FUND AND MOST REASONABLE EXPENSES OF ADMINISTERING THE PLAN SHALL
BE PAID BY THE PLAN, UNLESS THE COMPANY, AT ITS DISCRETION, ELECTS TO
PAY SUCH TAXES, EXPENSES, FEES OR CHARGES. ALL ADMINISTRATIVE FEES,
OTHER THAN SUCH COSTS AS DIRECT LABOR AND RELATED SUPPORT COSTS, OF THE
PLAN WERE PAID BY THE PLAN DURING 1995 AND 1994.
11
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
VALUATION OF INVESTMENT ASSETS
THE PLAN'S INVESTMENTS ARE STATED AT FAIR VALUE. INVESTMENTS IN ADT
LIMITED COMMON STOCK ARE VALUED BASED ON THE CLOSING PRICE OF THE STOCK
AT DECEMBER 31, 1995 AND 1994 AS DETERMINED BY THE NEW YORK STOCK
EXCHANGE. INVESTMENTS IN POOLED FUNDS OF THE TRUSTEE ARE VALUED AT FAIR
VALUE AS REPORTED BY THE TRUSTEE. QUOTED MARKET PRICES ARE USED TO
VALUE INVESTMENTS IN THE MUTUAL FUNDS OF FIDELITY INVESTMENTS. THESE
INVESTMENTS ARE VALUED EVERY BUSINESS DAY BY THE MUTUAL FUND MANAGER
BASED ON THE FUND'S SHARE PRICE CALLED THE NET ASSET VALUE. INVESTMENTS
IN THE DREYFUS CASH MANAGEMENT FUND ARE VALUED AT FAIR VALUE AS
REPORTED BY TRUSTEE.
WITHDRAWALS AND DISTRIBUTIONS
WITHDRAWALS AND DISTRIBUTIONS ARE RECORDED WHEN PAID.
NET APPRECIATION (DEPRECIATION) IN THE FAIR VALUE OF INVESTMENTS
THE PLAN PRESENTS IN THE STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS THE NET APPRECIATION (DEPRECIATION) IN THE FAIR VALUE OF
ITS INVESTMENTS, WHICH CONSISTS OF THE REALIZED GAINS (LOSSES) AND THE
UNREALIZED APPRECIATION (DEPRECIATION) ON THOSE INVESTMENTS.
3. VALUATION OF PARTICIPANTS' ACCOUNTS
PRIOR TO OCTOBER 1, 1995, PARTICIPANTS' ACCOUNTS ARE VALUED AT FAIR
VALUE AT THE END OF EACH CALENDAR MONTH BY THE PLAN TRUSTEE ON A CASH
AND SHARE EQUIVALENT BASIS. EFFECTIVE OCTOBER 1, 1995, PARTICIPANTS'
ACCOUNTS ARE VALUED AT FAIR VALUE AT THE CLOSE OF EACH BUSINESS DAY BY
THE PLAN TRUSTEE ON A CASH AND SHARE EQUIVALENT BASIS.
4. FEDERAL INCOME TAX STATUS
ON NOVEMBER 21, 1995, A FAVORABLE UPDATED DETERMINATION LETTER WAS
RECEIVED FROM THE IRS STATING THAT THE PLAN IS QUALIFIED UNDER SECTIONS
401(A) AND 401(K) OF THE INTERNAL REVENUE CODE AND, THEREFORE, THE
TRUST ESTABLISHED UNDER THE PLAN IS EXEMPT FROM FEDERAL INCOME TAX
UNDER SECTION 501(A) OF THE CODE. AS LONG AS THE PLAN IS QUALIFIED
UNDER THE TAX LAWS, PARTICIPANTS WILL NOT BE TAXED CURRENTLY ON COMPANY
CONTRIBUTIONS AND BEFORE TAX [401(K)] PARTICIPANT CONTRIBUTIONS TO THE
PLAN OR ON INCOME EARNED BY THE TRUST FUND. WHEN A PARTICIPANT,
BENEFICIARY OR ESTATE OF A PARTICIPANT RECEIVES A DISTRIBUTION UNDER
THE PLAN, SUCH DISTRIBUTION IS TAXABLE, EXCEPT TO THE EXTENT SUCH
DISTRIBUTION REPRESENTS THE RETURN OF THE PARTICIPANT'S OWN AFTER-TAX
CONTRIBUTIONS. THE TAX TREATMENT OF THE BALANCE OF SUCH DISTRIBUTION
DEPENDS ON THE FORM AND TIME OF PAYMENT.
12
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS, CONTINUED
5. PRIORITIES UPON TERMINATION OF THE PLAN
THE COMPANY CAN AMEND THE PLAN AT ANY TIME AND ANY AMENDMENT MAY BE
GIVEN RETROACTIVE EFFECT AS THE COMPANY MAY DETERMINE, SUBJECT TO THE
QUALIFICATION THAT, EXCEPT FOR THE RETURN OF COMPANY CONTRIBUTIONS
UNDER CERTAIN CIRCUMSTANCES, THE ASSETS OF THE PLAN MUST BE USED
EXCLUSIVELY FOR THE BENEFIT OF PARTICIPANTS AND THEIR BENEFICIARIES,
AND NO PARTICIPANT MAY BE DEPRIVED OF ANY VESTED INTEREST UNDER THE
PLAN. THE PLAN MAY BE TERMINATED OR CONTRIBUTIONS UNDER THE PLAN MAY BE
PERMANENTLY DISCONTINUED AT ANY TIME BY THE COMPANY, IN WHICH EVENT THE
TRUSTEE WILL CONTINUE TO ACT UNTIL THE PLAN'S ASSETS SHALL HAVE BEEN
DISTRIBUTED IN ACCORDANCE WITH THE PLAN. UPON TERMINATION OR
DISCONTINUANCE OF THE PLAN, PARTICIPANTS SHALL FULLY VEST IN THE PLAN.
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
THE FOLLOWING IS A RECONCILIATION OF NET ASSETS AVAILABLE FOR BENEFITS
PER THE FINANCIAL STATEMENTS TO THE FORM 5500:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1994
------------- -------------
<S> <C> <C>
NET ASSETS AVAILABLE FOR BENEFITS
PER THE FINANCIAL STATEMENTS $ 110,857,217 $ 89,042,512
AMOUNTS ALLOCATED TO WITHDRAWING
PARTICIPANTS (61,235) (646,244)
------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $ 110,795,982 $ 88,396,268
============= =============
</TABLE>
13
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS, CONTINUED
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500, CONTINUED
THE FOLLOWING IS A RECONCILIATION OF BENEFITS PAID TO PARTICIPANTS PER
THE FINANCIAL STATEMENTS TO THE FORM 5500:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
BENEFITS PAID TO PARTICIPANTS PER
THE FINANCIAL STATEMENTS $ 10,804,132 $ 11,361,130
ADD: AMOUNTS ALLOCATED TO WITHDRAWING
PARTICIPANTS AT DECEMBER 31,
1995 AND 1994 61,235 646,244
LESS: AMOUNTS ALLOCATED TO WITHDRAWING
PARTICIPANTS AT DECEMBER 31,
1994 AND 1993 (646,244) (722,706)
------------ ------------
BENEFITS PAID TO PARTICIPANTS PER THE
FORM 5500 $ 10,219,123 $ 11,284,668
============ ------------
</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, 1995 AND 1994 BUT NOT YET PAID AS OF THAT
DATE. THE PLAN'S FINANCIAL STATEMENTS REFLECT AMOUNTS ALLOCATED TO
WITHDRAWING PARTICIPANTS FOR BENEFIT CLAIMS WHEN PAID (SEE NOTE 2).
7. RELATED PARTY TRANSACTIONS
FUND A - ADT LIMITED SHARE FUND INVESTS IN COMMON SHARES OF ADT
LIMITED, THE ULTIMATE PARENT OF THE COMPANY. AS SUCH, THESE
TRANSACTIONS QUALIFY AS PARTIES-IN INTEREST. THE PLAN PURCHASED COMMON
SHARES OF ADT LIMITED AMOUNTING TO $7,017,735 AND $6,514,462 DURING
1995 AND 1994, RESPECTIVELY. THE PLAN SOLD COMMON SHARES OF ADT LIMITED
AMOUNTING TO $509,653 IN 1995. THE PLAN DID NOT SELL ANY SHARES DURING
1994.
14
<PAGE> 18
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
Item 27A - Schedule of Assets Held for Investment Purposes
<TABLE>
<CAPTION>
Fair Value Cost
--------------------------- --------------------------
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FUND A:
ADT Limited Share Fund (rates of return for the
years ended December 31, 1995 and 1994 were
38.69% and 20.18%, respectively) $54,530,520 $35,467,368 $43,632,962 $38,527,694
Old Fund A:
Mellon Bank, N.A.Employee Benefit Temporary
Investment Fund (effective interest rates for
the nine months ended September 30, 1995 was 4.51%
and for the year ended December 31, 1994 was 4.38%) -- 77,049 -- 77,049
New Fund A:
Dreyfus Cash Management Class A Fund
(effective interest rate for the 3 months ended
December 31, 1995 was 1.45%) 1,000,739 -- 1,000,739 --
----------- ----------- ----------- -----------
$55,531,259 $35,544,417 $44,633,431 $38,604,743
=========== =========== =========== ===========
FUND B:
Old Fund B:
Mellon Bank, N.A. Employee Benefit Intermediate
Bond Fund (rates of return for the nine months ended
September 30, 1995 was 12.22% and for the year ended
December 31, 1994 was <1.30%>) -- $10,166,382 -- $10,526,746
Old Fund B:
Mellon Bank, N.A.Employee Benefit Temporary
Investment Fund (effective interest rates for
the nine months ended September 30, 1995 was 4.51%
and for the year ended December 31, 1994 was 4.38%) -- 414,351 -- 414,351
New Fund B:
Fidelity Commonwealth Trust Intermediate Bond Fund
(rate of return for the 3 months ended December 31,
1995 was 3.33%) $10,573,420 -- $10,400,970 --
----------- ----------- ----------- -----------
$10,573,420 $10,580,733 $10,400,970 $10,941,097
=========== =========== =========== ===========
FUND C:
Old Fund C:
Mellon Bank, N.A. Employee Benefit Stock Fund,
(rates of return for the nine months ended
September 30, 1995 was 36.03% and the year ended
December 31, 1994 was <.35%>) -- $13,867,891 -- $11,600,545
Old Fund C:
Mellon Bank, N.A.Employee Benefit Temporary
Investment Fund (effective interest rates for
the nine months ended September 30, 1995 was 4.51%
and for the year ended December 31, 1994 was 4.38%) -- 409,840 -- 409,840
New Fund C:
Fidelity Capital Trust Disciplined Equity Fund (rate of
return for the 3 months ended December 31, 1995
was <11.41%>) $16,576,656 -- $18,033,851 --
----------- ----------- ----------- -----------
$16,576,656 $14,277,731 $18,033,851 $12,010,385
=========== =========== =========== ===========
</TABLE>
15
<PAGE> 19
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
Item 27A - Schedule of Assets Held for Investment Purposes
<TABLE>
<CAPTION>
Fair Value Cost
-------------------------- --------------------------
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FUND D:
Old Fund D:
Mellon Bank, N.A.Employee Benefit Temporary
Investment Fund (effective interest rates for
the nine months ended September 30, 1995 was 4.51%
and for the year ended December 31, 1994 was 4.38%) -- $24,804,797 -- $24,804,797
New Fund D:
Dreyfus Cash Management Class A Fund
(effective interest rate for the 3 months ended
December 31, 1995 was 1.45%) $23,243,884 -- $23,243,884 --
----------- ----------- ----------- -----------
$23,243,884 $24,804,797 $23,243,884 $24,804,797
=========== =========== =========== ===========
NEW FUND E:
Fidelity Puritan Fund (rate of return for the
3 months ended December 31, 1995 was 2.99%) $ 891,707 -- $ 868,953 --
=========== =========== =========== ===========
NEW FUND F:
Fidelity Contrafund Inc. (rate of return for the
3 months ended December 31, 1995 was <5.30%>) $ 2,854,149 -- $ 2,926,890 --
=========== =========== =========== ===========
NEW FUND G:
Fidelity Investment Trust Worldwide Fund (rate of
return for the 3 months ended December 31, 1995
was 0.94%) $ 401,439 -- $ 396,042 --
=========== =========== =========== ===========
PARTICIPANT LOANS:
ADT Participant Loans (interest rate of 9.75% for the
2 months ended December 31, 1995) $ 2,430,708 -- $ 2,430,708 --
=========== =========== =========== ===========
</TABLE>
16
<PAGE> 20
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
Item 27D - Schedule of Reportable Transactions
for the year ended December 31, 1995
--------
<TABLE>
<CAPTION>
Purchases Sales
-------------------------- ---------------------------------------
Number of Transaction Expenses Number of Transaction Gain/
Description of Asset Transactions Amount Incurred Transactions Amount (Loss)
-------------------- ------------ ----------- ----------- ------------ ----------- ------
<S> <C> <C> <C> <C> <C> <C>
SERIES TRANSACTIONS:
ADT, Ltd. Common Stock 15 $ 7,017,735 $ 24,180 2 $ 509,653 $ 33,208
Mellon Bank N.A
Employee Benefit
Intermediate Bond Fund 5 $ 536,634 -- 5 $11,277,917 $ 214,536
Mellon Bank N.A
Employee Benefit
Stock Fund 5 $ 643,697 -- 6 $18,347,512 $ 6,103,271
Mellon Bank N.A
Employee Benefit
Temporary Investment Fund 220 $40,495,943 -- 126 $66,198,046 --
Fidelity Commonwealth
Trust Intermediate Bond Fund 25 $11,566,366 -- 46 $ 1,179,753 $ 8,472
Fidelity Capital Trust
Disciplined Equity Fund 21 $20,708,757 -- 47 $ 2,638,965 ($ 3,530)
Dreyfus Cash Management
Class A Fund 58 $29,893,182 -- 86 $ 6,666,203 --
SINGLE TRANSACTIONS:
Mellon Bank N.A
Employee Benefit
Intermediate Bond Fund 1 $10,672,705 $ 216,632
Mellon Bank N.A
Employee Benefit
Stock Fund 1 $17,995,612 $ 6,010,404
Mellon Bank N.A
Employee Benefit 1 $25,068,593 --
Temporary Investment Fund 1 $25,123,962 -- 1 $25,123,962 --
Fidelity Commonwealth
Trust Intermediate Bond Fund 1 $10,842,595 --
Fidelity Capital Trust
Disciplined Equity Fund 1 $17,757,934 --
Dreyfus Cash Management
Class A Fund 1 $25,068,593 --
</TABLE>
17
<PAGE> 21
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN
Item 27E - SCHEDULE OF NON-EXEMPT TRANSACTIONS
for the year ended December 31, 1995
----------
<TABLE>
<CAPTION>
Purchases Sales
------------- --------------------------- Expenses
Name Affiliation Cost Sales Price Gain/Loss Incurred
------------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C>
ADT Ltd Common Stock Ultimate Parent of
ADT Security Systems, Inc.
(Plan Administrator) $7,017,735 $509,653 $33,208 $24,180
</TABLE>
18
<PAGE> 22
EXHIBIT INDEX
Exhibit No. Description
- ------------ ------------
1 Consent of Independent Accountants
<PAGE> 1
EXHIBIT I
CONSENT OF INDEPENDENT ACCOUNTANTS
ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN:
WE CONSENT TO THE INCORPORATION BY REFERENCE IN THE REGISTRATION STATEMENT OF
ADT SECURITY SYSTEMS, INC. PROFIT SHARING AND SAVINGS PLAN ON FORM S-8 (FILE NO.
33-26970) OF OUR REPORT DATED JUNE 7, 1996, ON OUR AUDITS OF THE FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULES OF ADT SECURITY SYSTEMS, INC.
PROFIT SHARING AND SAVINGS PLAN AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1995
AND 1994, WHICH REPORT IS INCLUDED IN THIS ANNUAL REPORT ON FORM 11-K.
/s/ Coopers & Lybrand, L.L.P.
NEW YORK, NEW YORK
JUNE 28, 1996
