-----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, Ezt01sUL90JSFld3cbpgvqfdZ5L/jAU8yVSGZ8Fa14+Hu6dRlfH90FhkiB0U4aJF SbQyvFyb2kYzdfI3bahC9Q== 0000893220-99-000781.txt : 19990630 0000893220-99-000781.hdr.sgml : 19990630 ACCESSION NUMBER: 0000893220-99-000781 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 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: 99655065 BUSINESS ADDRESS: STREET 1: 101 TOURNAMENT DRIVE CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: 2153231000 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, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 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) 101 Tournament Drive, Horsham, Pennsylvania 19044 --------------------------------------------------- (Address of principal executive offices) (Zip Code) 2 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN Financial Statements for the Years Ended December 31, 1998 and 1997, Supplemental Schedules for the Year Ended December 31, 1998 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, 1998 and 1997, with Supplemental Fund Information 2-3 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1998 and 1997, 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, 1998 13 Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 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, 1998 and 1997, 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, 1998 and 1997, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. As discussed in Note 1 to the financial statements, the Plan's Administrative Committee has decided to terminate the Plan. 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, 1998 and 1997, 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 15, 1999 5 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH SUPPLEMENTAL FUND INFORMATION DECEMBER 31, 1998 - --------------------------------------------------------------------------------
GENERAL INSTRUMENT GENERAL CORPORATION SEMICONDUCTOR, (THE FORMER INC. (THE VANGUARD NEXTLEVEL DISTRIBUTING COMMSCOPE, VANGUARD FEDERAL SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ VANGUARD MONEY VANGUARD COMMON COMMON COMMON SAVINGS WELLINGTON 500 INDEX MARKET GNMA STOCK FUND STOCK FUND STOCK FUND TRUST FUND FUND FUND FUND ASSETS: Investments, at fair value: Company common stock $131,660 $ -- $ -- $ -- $ -- $ -- $ -- $ -- Other common stock -- 4,518 12,930 -- -- -- -- -- Common/collective trust -- -- -- 32,097 -- -- -- -- Shares of registered investment company -- -- -- -- 161,923 67,753 14,024 23,113 Participant loans -- -- -- -- -- -- -- -- -------- ------ ------- ------- -------- ------- ------- ------- NET ASSETS AVAILABLE FOR BENEFITS $131,660 $4,518 $12,930 $32,097 $161,923 $67,753 $14,024 $23,113 ======== ====== ======= ======= ======== ======= ======= =======
VANGUARD VANGUARD VANGUARD U.S. INTERNATIONAL STAR GROWTH GROWTH LOAN FUND FUND FUND FUND TOTAL ASSETS: Investments, at fair value: Company common stock $ -- $ -- $ -- $ -- $131,660 Other common stock -- -- -- -- 17,448 Common/collective trust -- -- -- -- 32,097 Shares of registered investment company 13,015 12,004 13,664 -- 305,496 Participant loans -- -- -- 6,720 6,720 ------- ------- ------- ------ -------- NET ASSETS AVAILABLE FOR BENEFITS $13,015 $12,004 $13,664 $6,720 $493,421 ======= ======= ======= ====== ========
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, 1997 - -------------------------------------------------------------------------------
GENERAL INSTRUMENT GENERAL CORPORATION SEMICONDUCTOR, (THE FORMER INC. (THE VANGUARD NEXTLEVEL DISTRIBUTING COMMSCOPE, VANGUARD FEDERAL SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ VANGUARD MONEY VANGUARD COMMON COMMON COMMON SAVINGS WELLINGTON 500 INDEX MARKET GNMA STOCK FUND STOCK FUND STOCK FUND TRUST FUND FUND FUND FUND 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 81,624 Participant loans -- -- -- -- -- -- -- -- Loans receivable 288 -- -- 975 2,582 1,521 397 634 Contributions receivable: Employee 1,794 -- -- 4,344 10,513 6,864 1,986 2,491 Employer 17,365 -- -- -- -- -- -- -- -------- ------- ------- -------- -------- -------- ------- ------- NET ASSETS AVAILABLE FOR BENEFITS $391,125 $37,159 $57,978 $167,037 $433,158 $342,079 $71,283 $84,749 ======== ======= ======= ======== ======== ======== ======= =======
VANGUARD VANGUARD VANGUARD U.S. INTERNATIONAL STAR GROWTH GROWTH LOAN FUND FUND FUND 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 118,694 71,323 54,731 -- 1,149,029 Participant loans -- -- -- 161,130 161,130 Loans receivable 899 447 579 -- 8,322 Contributions receivable: Employee 3,608 1,886 1,847 -- 35,333 Employer -- -- -- -- 17,365 -------- ------- ------- -------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $123,201 $73,656 $57,157 $161,130 $1,999,712 ======== ======= ======= ======== ==========
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, 1998 - --------------------------------------------------------------------------------
GENERAL INSTRUMENT GENERAL CORPORATION SEMICONDUCTOR, (THE FORMER INC. (THE VANGUARD NEXTLEVEL DISTRIBUTING COMMSCOPE, VANGUARD FEDERAL SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ VANGUARD MONEY COMMON COMMON COMMON SAVINGS WELLINGTON 500 INDEX MARKET STOCK FUND STOCK FUND STOCK FUND TRUST FUND FUND FUND ADDITIONS: Contributions: Employee $ 425 $ -- $ -- $ 2,972 $ 8,142 $ 4,309 $ 433 Employer 12,620 -- -- -- -- -- -- --------- -------- -------- --------- --------- --------- -------- Net contributions 13,045 -- -- 2,972 8,142 4,309 433 --------- -------- -------- --------- --------- --------- -------- Investment income: Interest and dividends -- -- -- 3,554 20,253 1,796 1,280 Net gain on investments 99,194 265 2,481 -- 7,729 33,468 -- --------- -------- -------- --------- --------- --------- -------- Net investment income 99,194 265 2,481 3,554 27,982 35,264 1,280 --------- -------- -------- --------- --------- --------- -------- Total additions 112,239 265 2,481 6,526 36,124 39,573 1,713 --------- -------- -------- --------- --------- --------- -------- DEDUCTIONS: Distributions 371,566 32,887 47,495 116,699 331,712 321,243 54,655 Administrative expenses 259 19 34 69 258 181 4,483 --------- -------- -------- --------- --------- --------- -------- Total deductions 371,825 32,906 47,529 116,768 331,970 321,424 59,138 --------- -------- -------- --------- --------- --------- -------- TRANSFERS (To) from other funds 121 -- -- (24,698) 24,611 7,525 166 --------- -------- -------- --------- --------- --------- -------- NET DECREASE (259,465) (32,641) (45,048) (134,940) (271,235) (274,326) (57,259) NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 391,125 37,159 57,978 167,037 433,158 342,079 71,283 --------- -------- -------- --------- --------- --------- -------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 131,660 $ 4,518 $ 12,930 $ 32,097 $ 161,923 $ 67,753 $ 14,024 ========= ======== ======== ========= ========= ========= ========
VANGUARD VANGUARD VANGUARD VANGUARD U.S. INTERNATIONAL GNMA STAR GROWTH GROWTH LOAN FUND FUND FUND FUND FUND TOTAL ADDITIONS: Contributions: Employee $ 3,139 $ 2,716 $ 1,605 $ 1,499 $ -- $ 25,240 Employer -- -- -- -- -- 12,620 -------- --------- -------- -------- --------- ----------- Net contributions 3,139 2,716 1,605 1,499 -- 37,860 -------- --------- -------- -------- --------- ----------- Investment income: Interest and dividends 2,415 1,056 814 303 698 32,169 Net gain on investments 118 5,369 9,226 5,063 -- 162,913 -------- --------- -------- -------- --------- ----------- Net investment income 2,533 6,425 10,040 5,366 698 195,082 -------- --------- -------- -------- --------- ----------- Total additions 5,672 9,141 11,645 6,865 698 232,942 -------- --------- -------- -------- --------- ----------- DEDUCTIONS: Distributions 67,810 119,759 73,424 52,004 144,446 1,733,700 Administrative expenses 63 71 46 50 -- 5,533 -------- --------- -------- -------- --------- ----------- Total deductions 67,873 119,830 73,470 52,054 144,446 1,739,233 -------- --------- -------- -------- --------- ----------- TRANSFERS (To) from other funds 565 503 173 1,696 (10,662) -- -------- --------- -------- -------- --------- ----------- NET DECREASE (61,636) (110,186) (61,652) (43,493) (154,410) (1,506,291) NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 84,749 123,201 73,656 57,157 161,130 1,999,712 -------- --------- -------- -------- --------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 23,113 $ 13,015 $ 12,004 $ 13,664 $ 6,720 $ 493,421 ======== ========= ======== ======== ========= ===========
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, 1997 - --------------------------------------------------------------------------------
GENERAL INSTRUMENT GENERAL CORPORATION SEMICONDUCTOR, (THE FORMER INC. (THE VANGUARD NEXTLEVEL DISTRIBUTING COMMSCOPE, VANGUARD FEDERAL SYSTEMS, INC.) COMPANY) INC. RETIREMENT VANGUARD/ VANGUARD MONEY COMMON COMMON COMMON SAVINGS WELLINGTON 500 INDEX MARKET STOCK FUND STOCK FUND STOCK FUND TRUST FUND FUND FUND 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 VANGUARD U.S. INTERNATIONAL GNMA 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. -5- 9 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 - -------------------------------------------------------------------------------- 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 Delaware corporation and 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, at the Distributing Company's historical cost, 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"), at the Distributing Company's historical cost, 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, the Matching Employer Contribution was made with the Common Stock of the Distributing Company. For the period July 28, 1997 through March 31, 1998, at which time contributions to the Plan were suspended, the Matching Employer Contribution was made with the Common Stock of the Company. 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 -6- 10 Board of Directors of NextLevel Systems (Puerto Rico), Inc. has passed a resolution, effective April 30, 1998, to terminate the Plan. It is anticipated that participant account balances will be distributed by the end of 1999. Participants' employer matching contributions became fully vested upon termination of the Plan. The accompanying financial statements are presented on the liquidation basis of accounting. As all assets included in the Plan are already stated at fair value, the decision to terminate has no effect on these financial statements. 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 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, NextLevel Systems (Puerto Rico), Inc. 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 NextLevel Systems (Puerto Rico), Inc. 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. Such contributions are subject to certain limitations. 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. 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. No contribution was required to be made for the years ending December 31, 1998 and 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. -7- 11 Notwithstanding the foregoing, an active 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. 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 in the following sequence: (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 and (ii) 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 $0 and $206 for the years ended December 31, 1998 and 1997, 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. -8- 12 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. 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 the result of the spin-off transaction described in Note 1a. 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 the result of the spin-off transaction. -9- 13 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 500 Index Fund (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. Vanguard Federal Money Market Fund (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 GNMA 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 Fund (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 Fund (Registered Investment Company) - Consisting of a portfolio investing primarily in common stock of United States corporations with above average growth potential. Vanguard International Growth Fund (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. -10- 14 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, 1998 and 1997, the Company elected to pay $83,014 and $29,011, 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. 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, 1998 and 1997 were $70,064 and $934,525, respectively. 3. INVESTMENTS Investments held by Banco Santander and Vanguard at December 31, 1998 were as follows:
NAME OF NUMBER ISSUER AND OF FAIR TITLE OF ISSUES UNITS VALUE General Instrument Corporation (the former NextLevel Systems Inc.) Common Stock Fund 7,401 $ 131,660 General Semiconductor, Inc. (the Distributing Company) Common Stock Fund 834 4,518 CommScope, Inc. Common Stock Fund 1,139 12,930 Vanguard: Retirement Savings Trust 32,097 32,097 Wellington Fund 5,517 161,923 500 Index Fund 595 67,753 Federal Money Market Fund 14,024 14,024 GNMA Fund 2,212 23,113 STAR Fund 725 13,015 U.S. Growth Fund 320 12,004 International Growth Fund 728 13,664
-11- 15 Investments held by Banco Santander and Vanguard at December 31, 1997 were as follows:
NAME OF NUMBER ISSUER AND OF FAIR TITLE OF ISSUES UNITS VALUE General Instrument Corporation (the former NextLevel Systems Inc.) Common Stock Fund 39,165 $371,678 General Semiconductor, Inc. (the Distributing Company) Common Stock Fund 4,795 37,159 CommScope, Inc. Common Stock Fund 6,611 57,978 Vanguard: Retirement Savings Trust 161,718 161,718 Wellington Fund 14,264 420,063 500 Index Fund 3,705 333,694 Federal Money Market Fund 68,900 68,900 GNMA Fund 7,826 81,624 STAR Fund 6,829 118,694 U.S. Growth Fund 2,485 71,323 International Growth Fund 3,339 54,731
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 believes that the Plan is currently designed and being operated in compliance with the applicable requirements of PRITA. Therefore, no provision for income taxes is included in the Plan's 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, 1998 - --------------------------------------------------------------------------------
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 7,401 $ 70,388 $ 131,660 General Semiconductor, Inc. Common Stock and (the Distributing Company) Temporary Cash Common Stock Fund Investments 834 8,152 4,518 CommScope, Inc. Common Stock and Common Stock Fund Temporary Cash Investments 1,139 11,029 12,930 Vanguard: Retirement Savings Trust Common/Collective Trust 32,097 32,097 32,097 Wellington Fund Shares of Registered Investment Company 5,517 145,009 161,923 500 Index Fund Shares of Registered Investment Company 595 41,523 67,753 Federal Money Market Fund Shares of Registered Investment Company 14,024 14,024 14,024 GNMA Securities Fund Shares of Registered Investment Company 2,212 22,495 23,113 STAR Fund Shares of Registered Investment Company 725 11,769 13,015 U.S. Growth Fund Shares of Registered Investment Company 320 7,326 12,004 International Growth Fund Shares of Registered Investment Company 728 11,538 13,664 DESCRIPTION DESCRIPTION OF MATURITY Plan participant loans other than Through 12/31/01 mortgages, at various rates of 9.75%-10.25% interest 6,720 6,720 ---------- --------- TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $ 382,070 $ 493,421 ========== =========
* Party-in-interest -13- 18 NEXTLEVEL SYSTEMS (PUERTO RICO), INC. SAVINGS PLAN ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1998 - -------------------------------------------------------------------------------- SERIES OF TRANSACTIONS
NUMBER PURCHASE NUMBER OF PRICE OR OF SELLING REALIZED INVESTMENT PURCHASES CONTRIBUTION SALES PRICE GAIN General Instrument Corporation (the former NextLevel Systems, Inc.) Common Stock Fund -- $331,619 22 $371,825 $40,206 Vanguard: Retirement Savings Trust -- 142,031 15 142,031 -- Wellington Fund -- 280,980 20 331,971 50,991 STAR Fund -- 105,038 15 119,829 14,791
SINGLE TRANSACTIONS
TYPE OF PRICE OR SELLING REALIZED TRANSACTIONS COST PRICE GAIN General Instrument Corporation (the former NextLevel Systems, Inc.) Common Stock Fund Sale $ 173,615 $ 175,787 $ 2,172 Sale 77,361 105,220 27,859 Vanguard: Wellington Fund Sale 131,829 152,563 20,734 500 Index Fund Sale 104,820 141,854 37,034
-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 28, 1999 /s/ Scott A. Crum ------------- -------------------------------------------------- Scott A. Crum Chairman 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 15, 1999 appearing in this Annual Report on Form 11-K of NextLevel Systems (Puerto Rico), Inc. Savings Plan for the year ended December 31, 1998. /s/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP Parsippany, New Jersey June 28, 1999 -----END PRIVACY-ENHANCED MESSAGE-----