-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PTJiFo11y3KIPQdtQTedOFALnWt2DKThbQGPfieOq38kaHZchxiZhmQn6AC6Hgmq 34DZ34vk8zpSss9IzqTWtQ== 0000893220-98-001125.txt : 19980626 0000893220-98-001125.hdr.sgml : 19980626 ACCESSION NUMBER: 0000893220-98-001125 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980625 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL INSTRUMENT CORP CENTRAL INDEX KEY: 0001035881 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 364134221 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-12925 FILM NUMBER: 98654238 BUSINESS ADDRESS: STREET 1: 101 TOURNAMENT DRIVE CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: (215)323-1 MAIL ADDRESS: STREET 1: 101 TOURNAMENT DRIVE CITY: HORSHAM STATE: PA ZIP: 19044 FORMER COMPANY: FORMER CONFORMED NAME: NEXTLEVEL SYSTEMS INC DATE OF NAME CHANGE: 19970314 11-K 1 FORM 11-K NEXTLEVEL SYSTEMS (PUERTO RICO), INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-12925 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN (FORMERLY, GENERAL INSTRUMENT (PUERTO RICO), INC. SAVINGS PLAN) B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: GENERAL INSTRUMENT CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-4134221 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 Tournament Drive, Horsham, Pennsylvania 19044 (Address of principal executive offices) (Zip Code) (215) 323-1000 (Registrant's telephone number, including area code) 2 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN Financial Statements for the Years Ended December 31, 1997 and 1996, Supplemental Schedules for the Year Ended December 31, 1997 and Independent Auditors' Report 3 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN TABLE OF CONTENTS - -------------------------------------------------------------------------------- PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 31, 1997 and 1996, with Supplemental Fund Information 2 - 3 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1997 and 1996, with Supplemental Fund Information 4 - 5 Notes to Financial Statements 6 - 12 SUPPLEMENTAL SCHEDULES: Item 27(a) - Schedule of Assets Held for Investment Purposes as of December 31, 1997 13 Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1997 14 Note: Supplemental Schedules are included for filing with the Annual Return on Form 5500. Supplemental Schedules not included herein are omitted due to the absence of conditions under which they would be required. 4 INDEPENDENT AUDITORS' REPORT Administrative Committee NextLevel Systems (Puerto Rico), Inc. Savings Plan We have audited the accompanying statements of net assets available for benefits of NextLevel Systems (Puerto Rico), Inc. Savings Plan (formerly the General Instrument (Puerto Rico), Inc. Savings Plan) (the "Plan") as of December 31, 1997 and 1996, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's Administrative Committee. 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, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1997 and 1996, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the Table of Contents 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 supplemental information by fund in the statements of net assets available for benefits and the statements of changes in net assets available for benefits as of and for the years ended December 31, 1997 and 1996, is presented for the purpose of additional analysis of the basic financial statements rather than to present the net assets available for benefits and changes in net assets available for benefits of the individual funds. The supplemental schedules and fund information are the responsibility of the Plan's Administrative Committee. Such supplemental schedules and supplemental information by fund have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP - ------------------------------- DELOITTE & TOUCHE LLP Parsippany, New Jersey June 12, 1998 5 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL FUND INFORMATION DECEMBER 31, 1997 - --------------------------------------------------------------------------------
GENERAL INSTRUMENT CORPORATION GENERAL (THE FORMER SEMICONDUCTOR, INC. NEXTLEVEL (THE DISTRIBUTING COMMSCOPE VANGUARD VANGUARD VANGUARD SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ INDEX MONEY COMMON COMMON COMMON SAVINGS WELLINGTON TRUST - 500 MARKET STOCK FUND STOCK FUND STOCK FUND TRUST FUND PORTFOLIO RESERVES ASSETS: Investments, at fair value: Company common stock $ 371,678 $ -- $ -- $ -- $ -- $ -- $ -- Other common stock -- 37,159 57,978 -- -- -- -- Common/collective trust -- -- -- 161,718 -- -- -- Shares of registered investment company -- -- -- -- 420,063 333,694 68,900 Participant loans -- -- -- -- -- -- -- Loans receivable 288 -- -- 975 2,582 1,521 397 Contributions receivable: Employee 1,794 -- -- 4,344 10,513 6,864 1,986 Employer 17,365 -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $ 391,125 $ 37,159 $ 57,978 $ 167,037 $ 433,158 $ 342,079 $ 71,283 ========== ========== ========== ========== ========== ========== ========== VANGUARD VANGUARD VANGUARD FIXED INCOME VANGUARD U.S. INTERNATIONAL SECURITIES STAR GROWTH GROWTH LOAN FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND TOTAL ASSETS: Investments, at fair value: Company common stock $ -- $ -- $ -- $ -- $ -- $ 371,678 Other common stock -- -- -- -- -- 95,137 Common/collective trust -- -- -- -- -- 161,718 Shares of registered investment company 81,624 118,694 71,323 54,731 -- 1,149,029 Participant loans -- -- -- -- 161,130 161,130 Loans receivable 634 899 447 579 -- 8,322 Contributions receivable: Employee 2,491 3,608 1,886 1,847 -- 35,333 Employer -- -- -- -- -- 17,365 ---------- ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $ 84,749 $ 123,201 $ 73,656 $ 57,157 $ 161,130 $1,999,712 ========== ========== ========== ========== ========== ==========
See notes to financial statements. -2- 6 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL FUND INFORMATION DECEMBER 31, 1996 - --------------------------------------------------------------------------------
THE FORMER GENERAL INSTRUMENT CORPORATION VANGUARD VANGUARD VANGUARD VANGUARD COMMON RETIREMENT VANGUARD/ INDEX MONEY FIXED INCOME VANGUARD STOCK FUND SAVINGS WELLINGTON TRUST - 500 MARKET SECURITIES STAR (SEE NOTE 1) TRUST FUND PORTFOLIO RESERVES FUND PORTFOLIO ASSETS: Investments, at fair value: Company common stock $ 363,651 $ -- $ -- $ -- $ -- $ -- $ -- Common/collective trust -- 118,225 -- -- -- -- -- Shares of registered investment company -- -- 319,448 233,453 64,875 84,666 98,424 Participant loans -- -- -- -- -- -- -- Loans receivable 157 1,608 2,119 1,793 270 711 549 Contributions receivable: Employee 2,474 6,005 12,368 9,223 2,302 3,741 4,180 Employer 22,082 -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $ 388,364 $ 125,838 $ 333,935 $ 244,469 $ 67,447 $ 89,118 $ 103,153 ========== ========== ========== ========== ========== ========== ========== VANGUARD VANGUARD U.S. INTERNATIONAL GROWTH GROWTH LOAN PORTFOLIO PORTFOLIO FUND UNALLOCATED TOTAL ASSETS: Investments, at fair value: Company common stock $ -- $ -- $ -- $ -- $ 363,651 Common/collective trust -- -- -- -- 118,225 Shares of registered investment company 58,801 60,393 -- -- 920,060 Participant loans -- -- 118,289 -- 118,289 Loans receivable 260 322 -- -- 7,789 Contributions receivable: Employee 2,273 2,199 -- -- 44,765 Employer -- -- -- 9,456 31,538 ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $ 61,334 $ 62,914 $ 118,289 $ 9,456 $1,604,317 ========== ========== ========== ========== ==========
See notes to financial statements. -3- 7 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL FUND INFORMATION YEAR ENDED DECEMBER 31, 1997 - --------------------------------------------------------------------------------
GENERAL INSTRUMENT GENERAL CORPORATION SEMICONDUCTOR, (THE FORMER INC. (THE NEXTLEVEL DISTRIBUTING COMMSCOPE VANGUARD VANGUARD VANGUARD SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ INDEX MONEY COMMON COMMON COMMON SAVINGS WELLINGTON TRUST - 500 MARKET STOCK FUND STOCK FUND STOCK FUND TRUST FUND PORTFOLIO RESERVES ADDITIONS: Contributions: Employee $ 8,302 $ 8,156 $ -- $ 45,685 $ 98,957 $ 74,942 $ 17,554 Employer 88,937 85,084 -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net contributions 97,239 93,240 -- 45,685 98,957 74,942 17,554 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Investment income: Interest and dividends -- -- -- 8,213 35,265 7,137 3,645 Net gain (loss) on investments (14,187) 86,837 (11,152) -- 41,752 78,158 -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net investment income (loss) (14,187) 86,837 (11,152) 8,213 77,017 85,295 3,645 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total additions 83,052 180,077 (11,152) 53,898 175,974 160,237 21,199 ---------- ---------- ---------- ---------- ---------- ---------- ---------- DEDUCTIONS: Distributions 43,351 42,659 10,203 15,893 75,261 88,946 12,664 Administrative expenses 952 1,575 219 1,173 2,131 1,483 8,937 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total deductions 44,303 44,234 10,422 17,066 77,392 90,429 21,601 ---------- ---------- ---------- ---------- ---------- ---------- ---------- TRANSFERS To (from) other funds (18,777) (16,451) (19,892) 4,367 641 27,802 4,238 Effect of spin-off transaction 371,153 (470,597) 99,444 -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 352,376 (487,048) 79,552 4,367 641 27,802 4,238 ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET INCREASE (DECREASE) 391,125 (351,205) 57,978 41,199 99,223 97,610 3,836 NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR -- 388,364 -- 125,838 333,935 244,469 67,447 ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 391,125 $ 37,159 $ 57,978 $ 167,037 $ 433,158 $ 342,079 $ 71,283 ========== ========== ========== ========== ========== ========== ========== VANGUARD VANGUARD VANGUARD FIXED INCOME VANGUARD U.S. INTERNATIONAL SECURITIES STAR GROWTH GROWTH LOAN FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND UNALLOCATED TOTAL ADDITIONS: Contributions: Employee $ 28,536 $ 32,579 $ 20,603 $ 17,640 $ -- $ -- $ 352,954 Employer -- -- -- -- -- -- 174,021 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net contributions 28,536 32,579 20,603 17,640 -- -- 526,975 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Investment income: Interest and dividends 5,848 11,265 2,823 2,348 11,666 -- 88,210 Net gain (loss) on investments 1,834 9,831 12,123 127 -- -- 205,323 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net investment income (loss) 7,682 21,096 14,946 2,475 11,666 -- 293,533 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total additions 36,218 53,675 35,549 20,115 11,666 -- 820,508 ---------- ---------- ---------- ---------- ---------- ---------- ---------- DEDUCTIONS: Distributions 27,986 22,527 21,804 17,262 25,872 -- 404,428 Administrative expenses 476 791 342 362 -- 2,244 20,685 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total deductions 28,462 23,318 22,146 17,624 25,872 2,244 425,113 ---------- ---------- ---------- ---------- ---------- ---------- ---------- TRANSFERS To (from) other funds (12,125) (10,309) (1,081) (8,248) 57,047 (7,212) -- Effect of spin-off transaction -- -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (12,125) (10,309) (1,081) (8,248) 57,047 (7,212) -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET INCREASE (DECREASE) (4,369) 20,048 12,322 (5,757) 42,841 (9,456) 395,395 NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 89,118 103,153 61,334 62,914 118,289 9,456 1,604,317 ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 84,749 $ 123,201 $ 73,656 $ 57,157 $ 161,130 $ -- $1,999,712 ========== ========== ========== ========== ========== ========== ==========
See notes to financial statements. -4- 8 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL FUND INFORMATION YEAR ENDED DECEMBER 31, 1996 - --------------------------------------------------------------------------------
THE FORMER GENERAL INSTRUMENT CORPORATION VANGUARD VANGUARD VANGUARD VANGUARD COMMON STOCK RETIREMENT VANGUARD/ INDEX MONEY FIXED INCOME FUND SAVINGS WELLINGTON TRUST - 500 MARKET SECURITIES (SEE NOTE 1) TRUST FUND PORTFOLIO RESERVES FUND ADDITIONS: Contributions: Employee $ 20,659 $ 51,564 $ 107,112 $ 83,336 $ 27,894 $ 36,687 Employer 183,936 -- -- -- -- -- Other 896 -- 1,792 -- 5,376 -- ---------- ---------- ---------- ---------- ---------- ---------- Net contributions 205,491 51,564 108,904 83,336 33,270 36,687 ---------- ---------- ---------- ---------- ---------- ---------- Investment income: Interest and dividends -- 6,203 23,663 4,929 2,777 4,932 Net gain (loss) on investments (44,968) -- 16,729 36,060 -- (1,117) ---------- ---------- ---------- ---------- ---------- ---------- Net investment income (loss) (44,968) 6,203 40,392 40,989 2,777 3,815 ---------- ---------- ---------- ---------- ---------- ---------- Total additions 160,523 57,767 149,296 124,325 36,047 40,502 ---------- ---------- ---------- ---------- ---------- ---------- DEDUCTIONS: Distributions 45,409 8,930 17,143 25,334 1,757 3,486 Administrative expenses 2,465 348 1,243 792 9,238 91 ---------- ---------- ---------- ---------- ---------- ---------- Total deductions 47,874 9,278 18,386 26,126 10,995 3,577 TRANSFER FROM (TO) OTHER FUNDS 5,531 (15,911) (21,240) (15,601) (5,181) (11,137) ---------- ---------- ---------- ---------- ---------- ---------- NET INCREASE (DECREASE) 118,180 32,578 109,670 82,598 19,871 25,788 NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 270,184 93,260 224,265 161,871 47,576 63,330 ---------- ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 388,364 $ 125,838 $ 333,935 $ 244,469 $ 67,447 $ 89,118 ========== ========== ========== ========== ========== ========== VANGUARD VANGUARD VANGUARD U.S. INTERNATIONAL STAR GROWTH GROWTH LOAN PORTFOLIO PORTFOLIO PORTFOLIO FUND UNALLOCATED TOTAL ADDITIONS: Contributions: Employee $ 35,108 $ 19,034 $ 19,372 $ -- $ -- $ 400,766 Employer -- -- -- -- -- 183,936 Other -- -- 896 -- -- 8,960 ---------- ---------- ---------- ---------- ---------- ---------- Net contributions 35,108 19,034 20,268 -- -- 593,662 ---------- ---------- ---------- ---------- ---------- ---------- Investment income: Interest and dividends 8,530 4,218 2,525 5,479 -- 63,256 Net gain (loss) on investments 3,587 7,197 4,341 -- -- 21,829 ---------- ---------- ---------- ---------- ---------- ---------- Net investment income (loss) 12,117 11,415 6,866 5,479 -- 85,085 ---------- ---------- ---------- ---------- ---------- ---------- Total additions 47,225 30,449 27,134 5,479 -- 678,747 ---------- ---------- ---------- ---------- ---------- ---------- DEDUCTIONS: Distributions 4,306 8,226 4,054 5,212 -- 123,857 Administrative expenses 253 (132) (71) -- -- 14,227 ---------- ---------- ---------- ---------- ---------- ---------- Total deductions 4,559 8,094 3,983 5,212 -- 138,084 TRANSFER FROM (TO) OTHER FUNDS (3,293) (1,491) (3,706) 81,548 (9,519) -- ---------- ---------- ---------- ---------- ---------- ---------- NET INCREASE (DECREASE) 39,373 20,864 19,445 81,815 (9,519) 540,663 NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 63,780 40,470 43,469 36,474 18,975 1,063,654 ---------- ---------- ---------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 103,153 $ 61,334 $ 62,914 $ 118,289 $ 9,456 $1,604,317 ========== ========== ========== ========== ========== ==========
See notes to financial statements. -5- 9 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1997 AND 1996 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following description of the NextLevel Systems (Puerto Rico), Inc. Savings Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. The Plan Sponsor is NextLevel Systems (Puerto Rico), Inc., a wholly-owned subsidiary of General Instrument Corporation (the former NextLevel Systems, Inc.) (the "Company"). a. GENERAL - The Company was formerly the Communications Business of the former General Instrument Corporation (the "Distributing Company"). In a transaction that was consummated on July 28, 1997, the Distributing Company (i) transferred all the assets and liabilities relating to the manufacture and sale of broadband communications products used in the cable television, satellite and telecommunications industries to the Company (then a wholly-owned subsidiary of the Distributing Company) and all the assets and liabilities relating to the manufacture and sale of coaxial, fiber optic and other electrical cable used in the cable television, satellite and other industries to its wholly-owned subsidiary, CommScope, Inc. ("CommScope") and (ii) distributed all of its outstanding shares of capital stock of each of the Company and CommScope to its stockholders on a pro rata basis as a dividend. Approximately 147.3 million shares of the Company's Common Stock, based on a ratio of one for one, were distributed to the Distributing Company's stockholders of record on July 25, 1997 (the "Communications Distribution"). On July 28, 1997, approximately 49.1 million shares of CommScope Common Stock, based on a ratio of one for three, were distributed to the Company's stockholders of record on that date (the "CommScope Distribution"). On July 28, 1997, the Company and CommScope began operating as independent entities with publicly traded common stock, and the Distributing Company retained no ownership interest in either the Company or CommScope. Additionally, immediately following the Communications Distribution, the Distributing Company was renamed General Semiconductor, Inc. ("General Semiconductor") and effected a one for four reverse stock split. The NextLevel Systems (Puerto Rico), Inc. Savings Plan (formerly the General Instrument (Puerto Rico), Inc. Savings Plan) (the "Plan") was established and effective March 1, 1994, and is a defined contribution plan to encourage long-term savings by eligible employees of NextLevel Systems (Puerto Rico), Inc. through a systematic program of salary deductions. All Matching Employer Contributions have been made in the form of the Company's common stock. For the period from January 1, 1997 through July 27, 1997 and the year ended December 31, 1996, the Matching Employer Contribution was made with the Common Stock of the Distributing Company. For the period July 28, 1997 through December 31, 1997, the Matching Employer Contribution was made with the Common Stock of the Company. b. CONTRIBUTIONS - Each eligible employee may elect to have compensation reduced by, and authorize the Company to contribute to the Plan on his or her behalf, a Matched Participant Contribution of 1% to 6% of compensation for each payroll period. Compensation represents the participant's base salary or wages, without reduction for his or her Matched or Unmatched Participant Contributions -6- 10 to the Plan and Section 165(e) of the Puerto Rico Income Tax Act of 1954 ("PRITA"), as amended, and excluding any other form of additional compensation such as overtime pay, commissions, bonuses or incentive compensation. Each Plan year, the Company will contribute to the Plan, on behalf of the employee, a Matching Employer Contribution equal to 50% of the employee's Matched Participant Contribution. In addition, an employee who has elected a Matched Participant Contribution rate of 6% may elect to further reduce compensation, and authorize the Company to contribute to the Plan on his or her behalf, an Unmatched Participant Contribution of 1% to 4% of the employee's compensation for each payroll period. The annual contribution limitation for employee Matched and Unmatched Participant Contributions is $7,500 less any elective contributions under another defined benefit plan or defined contribution plan excluded from the participant's gross income. An employee may also contribute to the Plan a Rollover Amount provided the Administrative Committee of the Plan is satisfied that the amount to be rolled over to the Plan constitutes a Rollover Amount under PRITA. Such contributions are classified as "other" in the statement of changes in net assets available for benefits. PRITA requires that the Plan provisions do not discriminate in favor of highly compensated employees. In order to determine whether the Plan discriminates in such a manner, contribution levels are reviewed using the Actual Deferral Percentage ("ADP") test. To comply with such 1996 requirements, the Company has elected to fund a Qualified Non-Elective Contribution to the Plan which is estimated to be $ 9,456. Such amount has been recorded as an unallocated contribution receivable at December 31, 1996, and the actual contribution was made by the Company during 1997. No contribution was required to be made for the year ending December 31, 1997. c. ELIGIBILITY - All persons employed by NextLevel Systems (Puerto Rico), Inc. (including officers and directors who are employees and excluding independent contractors) became eligible to participate in the Plan as of March 1, 1994 without satisfying any minimum period of qualifying employment. All persons hired by NextLevel Systems (Puerto Rico), Inc. after March 1, 1994 and prior to August 1, 1995 became eligible to participate in the Plan on the date of hire. All persons hired by NextLevel Systems (Puerto Rico), Inc. after August 1, 1995 became eligible to participate in the Plan upon completion of 90 days of service. d. VESTING - A participant's interest in his or her participant Contributions Account and any Rollover Contribution Account (including all earnings on contributions to such accounts) are immediately and fully vested at all times and not subject to forfeiture. A participant's interest in his or her Employer Contributions Account (including all earnings on such account) will be 50% vested upon commencing employment, 75% vested upon completing one year of employment, and 100% vested upon completing two years of employment. Such years of employment need not be consecutive. Notwithstanding the foregoing, a participant becomes fully vested in his or her Employer Contributions Account upon the earlier of the following: - obtaining normal retirement age - total disability - termination of employment by way of death. A participant will also be fully vested in the event of a liquidation or dissolution of the Company, or upon termination of the Plan. -7- 11 e. CONDITIONS OF DISTRIBUTION AND WITHDRAWAL - Distributions under the Plan may be made upon a participant's death, total disability, retirement or other termination of employment. Prior to termination of employment, the participant may make withdrawals from his or her accounts pursuant to the following: (i) All or any portion of the balance in the Rollover Contribution Account including investment income thereon. (ii) All or any portion of the Matched Contribution Account, the Unmatched Contribution Account, the Rollover Contribution Account, and the vested portion of the Employer Contribution Account, upon attaining age 59-1/2. (iii) All or any portion of the Employer Contribution Account, the Matched Contribution Account excluding any income or gain thereon, and the Unmatched Contribution Account excluding any income or gain thereon, for reasons of hardship subject to certain restrictions as defined in the Plan document. Withdrawals prior to termination of employment are subject to the following conditions: (i) no more than one request for a withdrawal may be made during any six-month period, except in the case of a financial hardship withdrawal; (ii) a participant may not make a withdrawal until he or she has been a participant for six consecutive months; and (iii) the amount withdrawn shall not be less than $200 or the amount of the participant's vested accrued benefit. Upon withdrawal from the Plan or after termination of employment, the nonvested portion of a participant's account will be forfeited. The forfeiture may be used to reduce future employer contributions. Forfeited nonvested accounts totaled approximately $206 and $898 as of December 31, 1997 and 1996, respectively. f. LOANS - A participant is eligible to receive loans under the Plan without a required period of prior participation in the Plan. A participant may not have more than one loan from the Plan outstanding at any one time. A separate loan fund has been established to account for loans made from each specified fund. As periodic principal and interest payments become due, they are reallocated back to the specific funds from which the loan was borrowed. The amount of a loan may not exceed the following amount: (i) The lesser of 50% of the vested value of the participant's accounts or $50,000. (ii) Notwithstanding anything in (i) to the contrary, no loan shall be made in a principal amount of less than $1,000 and the principal amount must be in increments of $100. Interest is paid on the outstanding principal amount of each loan at a fixed per annum rate equal to the prime lending rate as published in the Wall Street Journal on the last business day of each month plus 1-1/2%. This rate applies during the full term of the loan and is not modified. Interest paid by a participant is credited to his or her applicable account. The term of the loan is fixed by the Administrative Committee at the time the loan is made and may not be extended. All loans are for a minimum term of one year and are in one-year increments. Any loan which is to be used to acquire a dwelling unit which is to be used as the principal residence of the borrowing participant within a reasonable time (a "residence loan") must be repaid within the earlier of fifteen years or disposition of such principal residence. Any other loan will be treated as a "nonresidence loan" and must be repaid within a maximum of five years. -8- 12 Regardless of its original maturity, the outstanding principal amount of any loan and accrued interest thereon becomes immediately due and payable sixty days following the date a participant's employment with the Company terminates for any reason whatsoever. A loan, including interest thereon, is repaid by payroll deductions under a fixed schedule which provides for interest and amortization of principal in substantially level payments over the term of the loan. A participant may repay all (but not part) of any loan at any time without penalty by payment of the outstanding principal amount thereof, plus unpaid accrued interest to the date of repayment. As collateral for repayment of each loan made to a participant, such participant pledges the assets of his or her Plan accounts. g. INVESTMENT FUNDS - Banco Santander is the trustee of the Plan. Vanguard Fiduciary Trust Company ("Vanguard") is the investment manager and recordkeeper of the Plan. A participant may elect to invest all Participant Contributions or Rollover Amounts in one or any combination of the funds described below (except as noted), in whole multiples of 5% of the aggregate amount of such contributions. A participant may elect to transfer once each day, all or any part of the aggregate value in his or her account or his or her interest in one or more investment fund or funds subject to rules restricting transfers related to the Vanguard Retirement Savings Trust. The descriptions of the investments have been obtained from the various fund prospectuses. General Instrument Corporation (the former NextLevel Systems, Inc.) Common Stock Fund - Consists principally of General Instrument Corporation (the former NextLevel Systems, Inc.) common stock and temporary cash investments. All matching employer contributions and earnings thereon, subsequent to July 28, 1997, are invested in this fund. This fund is also an investment option for participants. General Semiconductor Inc. (the Distributing Company) Common Stock Fund - Consists principally of General Semiconductor Inc. common stock and temporary cash investments. All matching employer contributions and earnings thereon prior to July 28, 1997 were invested in this fund. This fund is not a current investment option for participants. The common stock is held as a result of the Distributions. CommScope Inc. Common Stock Fund - Consists principally of CommScope, Inc. common stock and temporary cash investments. This fund is not a current investment option for participants. The common stock is held as a result of the Distributions. Vanguard Retirement Savings Trust (Common/Collective Trust) - Consisting of one or more guaranteed investment contracts issued by insurance companies and banks. Vanguard/Wellington Fund (Registered Investment Company) - Consisting of a portfolio of approximately 65% in common stocks and 35% in fixed income securities (including corporate and government bonds and money market instruments). Vanguard Index Trust - 500 Portfolio (Registered Investment Company) - Consisting of a portfolio of the five-hundred stocks in the Standard & Poor's 500 Composite Stock Price Index, each individual stock being weighted relative to its total market value and parallel to its representation in the Index. -9- 13 Vanguard Money Market Reserves (Registered Investment Company) - Consisting of a portfolio of securities issued by the U.S. Treasury and agencies of the U.S. Government with maturities of one year or less. Vanguard Fixed Income Securities Fund (Registered Investment Company) - Consisting of a portfolio of fixed income securities guaranteed by the U.S. Government and approximately 80% of which is normally invested in Government National Mortgage Association ("GNMA") certificates, the balance being invested in temporary cash investments. Vanguard STAR Portfolio (Registered Investment Company) - Comprised of a portfolio investing 60-70% of its assets in seven Vanguard equity funds and approximately 30-40% in three Vanguard fixed income funds. Vanguard U.S. Growth Portfolio (Registered Investment Company) - Consisting of a portfolio investing primarily in common stock of United States corporations with above average growth potential. Vanguard International Growth Portfolio (Registered Investment Company) - Consisting of a portfolio of equity securities of corporations located outside the United States. Loan Fund - A separate loan fund has been established to account for loans made from each specified fund. As periodic principal and interest payments become due, they are reallocated to the specific funds from which the loan originated. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. USE OF 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 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. b. INVESTMENTS - Investments are stated at fair or market values. The market values of General Instrument Corporation (the former NextLevel Systems, Inc.), CommScope, Inc. and General Semiconductor Inc. (the Distributing Company) common stocks are based on the closing prices as quoted on the New York Stock Exchange. The investments in shares of the Vanguard funds are valued at the redemption prices established by Vanguard, based upon its determination of the market value of the underlying investments. c. ADMINISTRATIVE EXPENSES - The Plan document provides that all expenses shall be paid by the Plan unless the Company, at its sole discretion, elects to pay such expenses without reimbursement. During the years ended December 31, 1997 and 1996, the Company elected to pay $29,011 and $22,365, respectively, of Plan expenses without reimbursement. d. OTHER - All security transactions are recorded on the trade date. Net gains and losses on the disposal of investments in each fund are computed using the average cost method based on the beginning market value as carried forward from the end of the prior plan year. Dividend income is recorded on the ex-dividend date. Income from other investments is recorded as earned on an accrual basis. -10- 14 e. BENEFIT PAYABLE - As prescribed by the American Institute of Certified Public Accountant's Audit and Accounting Guide, "Audits of Employee Benefit Plans," benefit payments are recognized as reductions of Plan assets upon disbursement. Benefits payable to terminated employees who had elected to withdraw from the Plan as of December 31, 1997 and 1996 were $934,525 and $12,876, respectively. 3. INVESTMENTS Investments held by Banco Santander and Vanguard at December 31, 1997 were as follows:
NAME OF NUMBER FAIR ISSUER AND OF HISTORICAL FAIR VALUE TITLE OF ISSUES UNITS COST VALUE PER UNIT General Instrument Corporation (the former NextLevel Systems Inc.) Common Stock Fund 39,165 $369,172 $371,678 $ 9.49 General Semiconductor Inc. (the Distributing Company) Common Stock Fund 4,795 46,834 37,159 7.75 CommScope, Inc. Common Stock Fund 6,611 63,931 57,978 8.77 Vanguard: Retirement Savings Trust 161,718 161,718 161,718 1.00 Wellington Fund 14,264 359,889 420,063 29.45 Index Trust - 500 Portfolio 3,705 243,794 333,694 90.07 Money Market Reserves 68,900 68,900 68,900 1.00 Fixed Income Securities Fund 7,826 79,410 81,624 10.43 STAR Portfolio 6,829 108,025 118,694 17.38 U.S. Growth Portfolio 2,485 56,656 71,323 28.70 International Growth Portfolio 3,339 52,736 54,731 16.39
Investments held by Banco Santander and Vanguard at December 31, 1996 were as follows:
NAME OF NUMBER FAIR ISSUER AND OF HISTORICAL FAIR VALUE TITLE OF ISSUES UNITS COST VALUE PER UNIT General Semiconductor Inc. (the Distributing Company) Common Stock Fund 13,355 $468,784 $363,651 $27.23 Vanguard: Retirement Savings Trust 118,225 118,225 118,225 1.00 Wellington Fund 12,216 283,558 319,448 26.15 Index Trust 3,376 184,472 233,453 69.16 Money Market Reserves 64,875 64,875 64,875 1.00 Fixed Income Securities Fund 8,284 83,322 84,666 10.22 STAR Portfolio 6,206 91,910 98,424 15.86 U.S. Growth Portfolio 2,477 48,616 58,801 23.74 International Growth Portfolio 3,669 54,825 60,393 16.46
-11- 15 4. TAX STATUS The Plan has been established and operated to comply with Section 3165, Subchapter 9, Title 13 of the Laws of the Commonwealth of Puerto Rico and the regulations thereunder and to be exempt from tax under Section 165 of PRITA. The Plan obtained its latest determination letter dated May 23, 1996 in which the Treasury Department of Puerto Rico stated that the Plan, as designed, was in compliance with the applicable requirements of the Commonwealth of Puerto Rico. 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 PRITA. Therefore, no provision for income taxes is included in the Plan's financial statements. 5. SUBSEQUENT EVENTS NextLevel Systems, Inc. changed its name to General Instrument Corporation in February 1998. In April 1998, General Instrument Corporation completed a restructuring and closed its Puerto Rican operations. Employees of NextLevel Systems (Puerto Rico), Inc. were terminated. The Board of Directors of NextLevel Systems (Puerto Rico), Inc. passed a resolution to terminate the Plan effective April 30, 1998. It is anticipated that participant account balances will be distributed by the end of 1998. Participants' employer matching contributions became fully vested upon termination of the Plan. As all assets included in the Plan are stated at fair value, the decision to terminate has no effect on these financial statements. ****** -12- 16 SUPPLEMENTAL SCHEDULES 17 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1997 - --------------------------------------------------------------------------------
DESCRIPTION NAME OF ISSUER OF NUMBER OF CURRENT AND TITLE OF ISSUE INVESTMENT UNITS COST VALUE * General Instrument Corporation Common Stock and (the former NextLevel Systems, Inc.) Temporary Cash Common Stock Fund Investments 39,165 $ 369,172 $ 371,678 General Semiconductor, Inc. Common Stock and (the Distributing Company) Temporary Cash Common Stock Fund Investments 4,795 46,834 37,159 CommScope Corporation Common Stock and Common Stock Fund Temporary Cash Investments 6,611 63,931 57,978 Vanguard: Retirement Savings Trust Common/Collective Trust 161,718 161,718 161,718 Wellington Fund Shares of Registered Investment Company 14,264 359,889 420,063 Index Trust - 500 Portfolio Shares of Registered Investment Company 3,705 243,794 333,694 Money Market Reserves Shares of Registered Investment Company 68,900 68,900 68,900 Fixed Income Securities Fund Shares of Registered Investment Company 7,286 79,410 81,624 STAR Portfolio Shares of Registered Investment Company 6,829 108,025 118,694 U.S. Growth Portfolio Shares of Registered Investment Company 2,485 56,656 71,323 International Growth Portfolio Shares of Registered Investment Company 3,339 52,736 54,731 DESCRIPTION DESCRIPTION OF MATURITY Plan participant loans other than Through 12/31/00 mortgages, at various rates of 10.00%-10.25% 161,130 161,130 interest ----------- ----------- TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $ 1,772,195 $ 1,938,692 =========== ===========
* Party-in-interest -13- 18 NEXT LEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1997 - --------------------------------------------------------------------------------
NUMBER PURCHASE NUMBER OF PRICE OR OF SELLING REALIZED INVESTMENT PURCHASES CONTRIBUTION SALES PRICE GAIN/(LOSS) General Semiconductor, Inc. (the Distributing Company) Common Stock Fund 15 $ 192,997 -- -- -- -- 143,926 52 $ 135,729 $ (8,197) General Instrument Corporation (the former NextLevel Systems, Inc.) Common Stock Fund 12 80,754 -- -- -- Vanguard: Retirement Savings Trust 60 101,745 -- -- -- Wellington Fund 37 189,353 -- -- -- -- 113,021 63 130,490 17,469 Index Trust - 500 Portfolio 47 160,616 -- -- -- -- 101,560 44 138,533 36,973
-14- 19 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 by the undersigned hereunto duly authorized. NextLevel Systems (Puerto Rico), Inc. Savings Plan -------------------------------------------------- Date June 24, 1998 /s/ Scott A. Crum - ------------------ -------------------------------------- Scott A. Crum Member of the General Instrument Corporation Employee Benefits Administrative Committee 20 INDEX TO EXHIBITS Exhibit Description - ------- ----------- 23 Independent Auditors' Consent EX-23 2 INDEPENDENT AUDITORS' CONSENT 1 EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement Nos. 333-29719 and 333-33399 of General Instrument Corporation on Forms S-8 of our report dated June 12, 1998 appearing in this Annual Report on Form 11-K of NextLevel Systems (Puerto Rico), Inc. Savings Plan for the year ended December 31, 1997. /s/ DELOITTE & TOUCHE LLP - ----------------------------- DELOITTE & TOUCHE LLP Parsippany, New Jersey June 24, 1998 -----END PRIVACY-ENHANCED MESSAGE-----