-----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, Fx7j2x1D2+/Fqf4HKIBnPgn5qyzOgPVT87l8yxmFQGE2Q61hDIML4WbmgsDoVIAf hHSx4ZHiDC/QZY/FtbjZ+A== 0001042645-98-000150.txt : 19980701 0001042645-98-000150.hdr.sgml : 19980701 ACCESSION NUMBER: 0001042645-98-000150 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980630 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALARMGUARD HOLDINGS INC CENTRAL INDEX KEY: 0000319250 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 330318116 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-08138 FILM NUMBER: 98658353 BUSINESS ADDRESS: STREET 1: 125 FRONTAGE ROAD STREET 2: STE 1880 CITY: ORANGE STATE: CT ZIP: 06477 BUSINESS PHONE: 6192311818 MAIL ADDRESS: STREET 1: 125 FRONTAGE ROAD STREET 2: STE 1880 CITY: ORANGE STATE: CT ZIP: 06477 FORMER COMPANY: FORMER CONFORMED NAME: TRITON GROUP LTD DATE OF NAME CHANGE: 19950328 11-K 1 ALARMGUARD HOLDINGS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 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 1-8138 - -------------------------------------------------------------------------------- A. Full title of the plan: SECURITY SYSTEMS HOLDINGS, INC. 401(k) PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Alarmguard Holdings, Inc. 125 Frontage Road Orange, CT 06477 Audited Financial Statements and Supplemental Schedules Security Systems Holdings, Inc. 401(k) Plan YEARS ENDED DECEMBER 31, 1997 AND 1996 WITH REPORT OF INDEPENDENT AUDITORS Security Systems Holdings, Inc. 401(k) Plan Audited Financial Statements and Supplemental Schedules Years ended December 31, 1997 and 1996 CONTENTS
Report of Independent Auditors..................................................................1 Audited Financial Statements Statement of Assets Available for Benefits, With Fund Information - December 31, 1997...........2 Statement of Assets Available for Benefits, With Fund Information - December 31, 1996...........4 Statement of Changes in Assets Available for Benefits, With Fund Information - Year Ended December 31, 1997...............................................................5 Statement of Changes in Assets Available for Benefits, With Fund Information - Year Ended December 31, 1996...............................................................7 Notes to the Financial Statements...............................................................8 Supplemental Schedules Schedule of Assets Held for Investment Purposes................................................12 Schedule of Reportable Transactions............................................................13
Report of Independent Auditors Plan Administrator Security Systems Holdings, Inc. 401(k) Plan We have audited the accompanying statements of assets available for benefits of Security Systems Holdings, Inc. 401(k) Plan (the "Plan") as of December 31, 1997 and 1996, and the related statements of changes in assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Plan at December 31, 1997 and 1996, and the changes in its 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 assets held for investment purposes as of December 31, 1997, and reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The Fund information in the statements of assets available for benefits and the statements of changes in assets available for benefits is presented for purposes of additional analysis rather than to present the assets available for benefits and changes in assets available for benefits of each fund. The supplemental schedules and Fund information 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 in relation to the basic financial statements taken as a whole. The information presented in the "Schedule of Assets Held for Investment Purposes" and the "Schedule of Reportable Transactions," other than for the Alarmguard Common Stock Fund, does not disclose the historical cost of investments. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ Ernst & Young LLP Stamford, Connecticut June 22, 1998 - 1 -
Security Systems Holdings, Inc. 401(k) Plan Statement of Assets Available for Benefits, With Fund Information December 31, 1997 FUND INFORMATION ----------------------------------------------------------------------------------------------------------- SMALL GOVERN- SHORT- CAPITALI- DIVER- MENT CASH INTER- TOTAL ZATION A SIFIED MONEY BLUE RESERVES MEDIATE HIGH TOTAL GROWTH RETURN A GROWTH A EQUITY INCOME A MARKET CHIP A A GOVERNMENT RETURN RETURN B B FUND FUND FUND FUND FUND FUND FUND A FUND A FUND FUND FUND ----------------------------------------------------------------------------------------------------------- ASSETS Investments: At fair value: Stocks $266,193 $185,696 $2,560 $4,844 $150,026 Bonds $85,027 $33,601 Fixed income $3,465 $58,703 Balanced $146,830 $111,285 Participants notes receivable ----------------------------------------------------------------------------------------------------------- Total investments 146,830 266,193 185,696 85,027 3,465 2,560 58,703 33,601 4,844 111,285 150,026 ----------------------------------------------------------------------------------------------------------- Receivables: Participants' 5,175 9,549 8,868 2,774 4,697 633 2,349 1,329 2,729 contributions Employer's matching 1,138 2,028 1,668 591 936 142 559 323 450 ----------------------------------------------------------------------------------------------------------- Total receivables 6,313 11,577 10,536 3,365 5,633 775 2,908 1,652 3,179 - - =========================================================================================================== Assets available for $153,143 $277,770 $196,232 $88,392 $9,098 $3,335 $61,611 $35,253 $8,023 $111,285 $150,026 benefits ===========================================================================================================
SEE NOTES TO FINANCIAL STATEMENTS. - 2 -
Security Systems Holdings, Inc. 401(k) Plan Statement of Assets Available for Benefits, With Fund Information (continued) December 31, 1997 FUND INFORMATION --------------------------------------------------------------------------------------------- SMALL SHORT- CAPITALI- DIVER- INTER- ZATION B SIFIED BLUE US CASH MEDIATE HIGH ALARMGUARD EQUITY INCOME B CHIP B MORTGAGE RESERVES GOVERNMENT RETURN COMMON LOAN FUND FUND FUND B FUND B FUND B FUND B FUND STOCK FUND FUND TOTAL --------------------------------------------------------------------------------------------------------------- ASSETS Investments: At fair value: Stocks $92,059 $13,029 $23,599 $445,620 $1,183,626 Bonds $36,899 $124 $39,462 195,113 Fixed income $16,419 78,587 Balanced 258,115 Participants notes receivable $42,521 42,521 -------------------------------------------------------------------------------------------------------------- Total investments 92,059 36,899 13,029 124 16,419 39,462 23,599 445,620 42,521 1,757,962 -------------------------------------------------------------------------------------------------------------- Receivables: Participants' contributions 38,103 Employer's matching 7,835 --------------------------------------------------------------------------------------------------------------- Total receivables - - - - - - - - - 45,938 =============================================================================================================== Assets available for benefits $92,059 $36,899 $13,029 $124 $16,419 $39,462 $23,599 $445,620 $42,521 $1,803,900 ===============================================================================================================
SEE NOTES TO FINANCIAL STATEMENTS. - 3 -
Security Systems Holdings, Inc. 401(k) Plan Statement of Assets Available for Benefits, With Fund Information December 31, 1996 FUND INFORMATION ---------------------------------------------------------------------------------------------------- SMALL SHORT- CAPITALI- DIVER- INTER- TOTAL ZATION B HIGH SIFIED U.S. CASH MEDIATE RETURN GROWTH EQUITY YIELD INCOME MORTGAGE RESERVES GOVERNMENT B FUND B FUND FUND B FUND B FUND B FUND B FUND B FUND LOAN FUND TOTAL ---------------------------------------------------------------------------------------------------------------- ASSETS Investments: At fair value: Stocks $257,891 $89,682 $347,573 Bonds $1,191 $41,030 $114 $43,467 85,802 Fixed income $23,524 23,524 Balanced $183,803 183,803 Participants notes receivable $5,938 5,938 ---------------------------------------------------------------------------------------------------------------- Total investments 183,803 257,891 89,682 1,191 41,030 114 23,524 43,467 5,938 646,640 ---------------------------------------------------------------------------------------------------------------- Receivables: Participants' contributions 5,808 7,427 4,890 75 2,172 992 1,550 22,914 Employer's matching 1,300 1,799 977 19 494 246 356 5,191 ---------------------------------------------------------------------------------------------------------------- Total receivables 7,108 9,226 5,867 94 2,666 - 1,238 1,906 - 28,105 ================================================================================================================ Assets available for benefits $190,911 $267,117 $95,549 $1,285 $43,696 $114 $24,762 $45,373 $5,938 $674,745 ================================================================================================================
SEE NOTES TO FINANCIAL STATEMENTS. - 4 -
Security Systems Holdings, Inc. 401(k) Plan Statement of Changes in Assets Available for Benefits, With Fund Information Year ended December 31, 1997 FUND INFORMATION ---------------------------------------------------------------------------------- TOTAL SMALL HIGH DIVERSIFIED GOVERNMENT BLUE RETURN A GROWTH A CAPITALIZATION YIELD A INCOME A MONEY CHIP A FUND FUND A EQUITY FUND FUND FUND MARKET FUND FUND ---------------------------------------------------------------------------------- ADDITIONS TO ASSETS ATTRIBUTED TO: Net appreciation/ (depreciation) in fair value of investments $(18,699) $(37,354) $(14,201) $ (3) $ 227 $ (272) Interest and dividends 21,528 36,225 19,847 7 2,615 $ 28 304 ---------------------------------------------------------------------------------- 2,829 (1,129) 5,646 4 2,842 28 32 Contributions: Participants 71,157 124,694 88,691 126 35,622 14,076 1,499 Employer 14,948 26,571 17,156 62 7,156 2,904 330 Rollovers 85,032 159,973 99,288 234 44,627 ---------------------------------------------------------------------------------- 171,137 311,238 205,135 422 87,405 16,980 1,829 ---------------------------------------------------------------------------------- Total additions 173,966 310,109 210,781 426 90,247 17,008 1,861 ---------------------------------------------------------------------------------- DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Benefits paid to participants (4,630) (9,478) (8,425) (1,553) Administrative expenses ---------------------------------------------------------------------------------- Total deductions (4,630) (9,478) (8,425) - (1,553) - - ---------------------------------------------------------------------------------- Net increase (decrease) prior to interfund transfers 169,336 300,631 202,356 426 88,694 17,008 1,861 Interfund transfers, net (16,193) (22,861) (6,124) (426) (302) (7,910) 1,474 ---------------------------------------------------------------------------------- Net increase (decrease) 153,143 277,770 196,232 - 88,392 9,098 3,335 Assets available for benefits at beginning of year ---------------------------------------------------------------------------------- Assets available for benefits at end of year $153,143 $277,770 $196,232 $ - $88,392 $ 9,098 $3,335 ==================================================================================
FUND INFORMATION ------------------------------------------------------------ SHORT- CASH INTERMEDIATE HIGH TOTAL RESERVES A GOVERNMENT A RETURN A RETURN B GROWTH B FUND FUND FUND FUND FUND ------------------------------------------------------------ ADDITIONS TO ASSETS ATTRIBUTED TO: Net appreciation/ (depreciation) in fair value of investments $ (96) $ 39 $ 15,138 $ 24,419 Interest and dividends $ 4,201 811 201 18,435 21,802 ------------------------------------------------------------ 4,201 715 240 33,573 46,221 Contributions: Participants 13,339 15,740 6,970 13,945 20,441 Employer 7,257 3,811 1,093 3,056 4,877 Rollovers 101,307 16,235 ------------------------------------------------------------ 121,903 35,786 8,063 17,001 25,318 ------------------------------------------------------------ Total additions 126,104 36,501 8,303 50,574 71,539 ------------------------------------------------------------ DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Benefits paid to participants (24,451) (486) (1,385) (18,293) Administrative expenses (2,694) (3,467) ------------------------------------------------------------ Total deductions (24,451) (486) (4,079) (21,760) ------------------------------------------------------------ Net increase (decrease) prior to interfund transfers 101,653 36,015 8,303 46,495 49,779 Interfund transfers, net (40,042) (762) (280) (126,121) (166,870) ------------------------------------------------------------ Net increase (decrease) 61,611 35,253 8,023 (79,626) (117,091) Assets available for benefits at beginning of year 190,911 267,117 ------------------------------------------------------------ Assets available for benefits at end of year $ 61,611 $35,253 $8,023 $111,285 $150,026 ============================================================
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Security Systems Holdings, Inc. 401(k) Plan Statement of Changes in Assets Available for Benefits, With Fund Information (continued) Year ended December 31, 1997 FUND INFORMATION --------------------------------------------------------------------------------------- SHORT- SMALL HIGH DIVERSIFIED BLUE US CASH INTERMEDIATE CAPITALIZATION YIELD B INCOME B CHIP B MORTGAGE B RESERVES B GOVERNMENT B B EQUITY FUND FUND FUND FUND FUND FUND FUND --------------------------------------------------------------------------------------- ADDITIONS TO ASSETS ATTRIBUTED TO: Net appreciation/ (depreciation) in fair value of investments $ 9,996 $ 27 $ 28 $(1,151) $ 2 $ (294) Interest and dividends 10,352 89 3,237 1,552 8 $ 788 2,728 Interest on participant loans --------------------------------------------------------------------------------------- 20,348 116 3,265 401 10 788 2,434 Contributions: Participants 19,174 225 7,474 1,947 4,004 Employer 3,210 56 1,607 866 991 Rollovers --------------------------------------------------------------------------------------- 22,384 281 9,081 2,813 4,995 --------------------------------------------------------------------------------------- Total additions 42,732 397 12,346 401 10 3,601 7,429 --------------------------------------------------------------------------------------- DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Benefits paid to participants (9,360) (11,147) (5,305) (4,920) Administrative expenses (701) (347) (198) (184) --------------------------------------------------------------------------------------- Total deductions (10,061) (11,494) (5,503) (5,104) --------------------------------------------------------------------------------------- Net increase (decrease) prior to interfund transfers 32,671 397 852 401 10 (1,902) 2,325 Interfund transfers, net (36,161) (1,682) (7,649) 12,628 (6,441) (8,236) --------------------------------------------------------------------------------------- Net increase (decrease) (3,490) (1,285) (6,797) 13,029 10 (8,343) (5,911) Assets available for benefits at beginning of year 95,549 1,285 43,696 114 24,762 45,373 --------------------------------------------------------------------------------------- Assets available for benefits at end of year $92,059 $ - $36,899 $13,029 $124 $16,419 $39,462 =======================================================================================
FUND INFORMATION -------------------------------------- HIGH ALARMGUARD RETURN B COMMON FUND STOCK FUND LOAN FUND TOTAL ---------------------------------------------------- ADDITIONS TO ASSETS ATTRIBUTED TO: Net appreciation/ (depreciation) in fair value of investments $ 50 $ 35,332 $ 13,188 Interest and dividends 1,111 330 146,199 Interest on participant loans $ 2,100 2,100 ---------------------------------------------------- 1,161 35,662 2,100 161,487 Contributions: Participants 439,124 Employer 95,951 Rollovers 36,373 543,069 ---------------------------------------------------- 36,373 1,078,144 ---------------------------------------------------- Total additions 1,161 35,662 38,473 1,239,631 ---------------------------------------------------- DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Benefits paid to participants (3,440) (102,873) Administrative expenses (12) (7,603) ---------------------------------------------------- Total deductions (3,440) (12) (110,476) ---------------------------------------------------- Net increase (decrease) prior to interfund transfers (2,279) 35,650 38,473 1,129,155 Interfund transfers, net 25,878 409,970 (1,890) ---------------------------------------------------- Net increase (decrease) 23,599 445,620 36,583 1,129,155 Assets available for benefits at beginning of year 5,938 674,745 ---------------------------------------------------- Assets available for benefits at end of year $23,599 $445,620 $42,521 $1,803,900 ====================================================
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Security Systems Holdings, Inc. 401(k) Plan Statement of Changes in Assets Available for Benefits, With Fund Information Year ended December 31, 1996 FUND INFORMATION ----------------------------------------------------------------------------- TOTAL SMALL HIGH DIVERSIFIED U.S. RETURN B GROWTH B CAPITALIZATION YIELD B INCOME B MORTGAGE B FUND FUND B EQUITY FUND FUND FUND FUND ----------------------------------------------------------------------------- ADDITIONS TO ASSETS ATTRIBUTED TO: Net appreciation (depreciation) in fair value of investments $ (4,704) $ (36,949) $ (3,577) $ 20 $ 297 $ (56) Interest and dividends 26,221 66,094 7,705 53 1,683 Interest on participant loans ----------------------------------------------------------------------------- 21,517 29,145 4,128 73 1,980 (56) Contributions: Participants 57,269 78,366 60,681 969 29,872 Employer matching 7,559 10,977 10,813 234 6,009 ----------------------------------------------------------------------------- 64,828 89,343 71,494 1,203 35,881 ----------------------------------------------------------------------------- Total additions 86,345 118,488 75,622 1,276 37,861 (56) DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Benefits paid to participants (17,608) (24,714) (2,860) (178) (2,039) (722) Administrative expenses (390) (382) (53) (8) (62) ----------------------------------------------------------------------------- Total deductions (17,998) (25,096) (2,913) (186) (2,101) (722) ----------------------------------------------------------------------------- Net increase (decrease) prior to interfund transfers 68,347 93,392 72,709 1,090 35,760 (778) Interfund transfers, net (8,721) (12,361) 4,951 (39) 3,361 (1) ----------------------------------------------------------------------------- Net increase (decrease) 59,626 81,031 77,660 1,051 39,121 (779) Assets available for benefits at beginning of year 131,285 186,086 17,889 234 4,575 893 ----------------------------------------------------------------------------- Assets available for benefits at end of year $ 190,911 $ 267,117 $ 95,549 $1,285 $43,696 $ 114 =============================================================================
FUND INFORMATION -------------------------------------------- SHORT- CASH INTERMEDIATE RESERVES B GOVERNMENT B FUND FUND LOAN FUND TOTAL --------------------------------------------------------- ADDITIONS TO ASSETS ATTRIBUTED TO: Net appreciation (depreciation) in fair value of investments $ (2) $ (1,198) $ (46,169) Interest and dividends 866 1,959 104,581 Interest on participant loans $ 429 429 --------------------------------------------------------- 864 761 429 58,841 Contributions: Participants 9,374 16,036 252,567 Employer matching 1,236 2,527 39,355 --------------------------------------------------------- 10,610 18,563 291,922 --------------------------------------------------------- Total additions 11,474 19,324 429 350,763 DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Benefits paid to participants (20,248) (1,521) (69,890) Administrative expenses (18) (52) (965) --------------------------------------------------------- Total deductions (20,266) (1,573) (70,855) --------------------------------------------------------- Net increase (decrease) prior to interfund transfers (8,792) 17,751 429 279,908 Interfund transfers, net 13,019 (687) 478 - --------------------------------------------------------- Net increase (decrease) 4,227 17,064 907 279,908 Assets available for benefits at beginning of year 20,535 28,309 5,031 394,837 --------------------------------------------------------- Assets available for benefits at end of year $ 24,762 $ 45,373 $ 5,938 $ 674,745 =========================================================
SEE NOTES TO FINANCIAL STATEMENTS. - 7 - Security Systems Holdings, Inc. 401(k) Plan Notes to Financial Statements Years ended December 31, 1997 and 1996 1. DESCRIPTION OF PLAN The following description of the Security Systems Holdings, Inc. 401(k) Plan (the "Plan") of Alarmguard Holdings, Inc. ("Alarmguard" or the "Company") provides only general information. Participants should refer to the Summary Plan Description for a more complete discussion of the Plan's provisions. GENERAL The Plan is a defined contribution plan covering all employees completing at least 1,000 hours of service in a twelve consecutive month period and who are age twenty-one or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan permits each participant to elect to have his or her eligible compensation reduced by up to 15% and to have that amount contributed through periodic payroll withholdings to the Plan in accordance with Section 401(k) of the Internal Revenue Code. The Company's matching contributions are discretionary by plan year and since the Plan's inception have been based on 25% of each participant's contributions up to an amount not to exceed 6% of the participant's annual compensation. In compliance with federal tax law, for 1997 and 1996, the maximum annual contribution for a participant was limited to the lesser of $30,000 or 25% of compensation. In addition, the maximum annual before-tax contribution was limited to $9,500 in 1997 and 1996. During 1997, $543,069 was transferred from other qualifying plans as a result of an acquisition made by the Company. This amount is included in rollovers in the 1997 statement of changes in assets available for benefits. PARTICIPANT ACCOUNTS Forfeited balances of terminated participants nonvested accounts are used to reduce future Company contributions. The balance of forfeited nonvested accounts was not material as of December 31, 1997 or 1996. Employee contributions plus actual earnings thereon are always 100% vested, while vesting of Company matching contributions plus actual earnings thereon occurs over a period of 5 years, at a rate of 20% for each year of service, commencing with the completion of one year of service. Participants become 100% vested upon death or attainment of age 65. Under the provisions of the Plan, a participant may, at the discretion of the Company, be permitted to (i) contribute to the Plan certain distributions received from another qualified employee benefit plan, or (ii) direct the trustee of such other plan to make a trust-to-trust transfer to the Plan of the participant's account in such other plan. In accordance with the Plan, participants can direct the investment of their contributions among 9 investment options of Kemper Service Company and Alarmguard stock. During 1997, the Company eliminated the High Yield Fund and U.S. Mortgage Fund investment options and replaced B Fund with A Fund investment options. Participants may change their investment options daily. - 8 - Security Systems Holdings, Inc. 401(k) Plan Notes to Financial Statements (continued) Years ended December 31, 1997 and 1996 1. DESCRIPTION OF PLAN (CONTINUED) PARTICIPANT NOTES RECEIVABLE The Plan includes a loan feature for participants who are employed by the Company enabling them to borrow from their vested account balance. The maximum amount the participant can borrow is the lesser of 50% of their vested interest in the Plan or $50,000 less the highest outstanding loan balance over the previous twelve months. The minimum loan amount is $1,000. The term of the loan can range from one to five years, or up to 15 years if for the purchase of a primary residence. Loan repayments are made in equal installments of principal and interest through automatic payroll deductions starting two months after the effective date of the loan. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Plan Administrator. Interest rates on loans outstanding at December 31, 1997 and 1996 range from 8.0% to 10.5%. CONDITIONS OF WITHDRAWAL Upon termination of the participant's employment as a result of retirement, death, disability, dismissal, or resignation, as defined in the Plan, the participant's account shall be paid to the participant, or designated beneficiary, in a lump-sum amount (if account balance is less than $3,500) or monthly installments based on the value of the participant's account. EXPENSES In 1997 and 1996, the Company paid substantially all administrative expenses of the Plan. 2. SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The financial statements of the Plan have been prepared in accordance with generally accepted accounting principles and, as such, include amounts based on judgments and estimates made by management, which may differ from actual results. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. The shares of registered investment companies are valued at quoted market prices. The participant notes receivable are stated at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Alarmguard common stock is purchased on a monthly basis by an independent third party. At December 31, 1997, the per share price of the common stock was $10.50. - 9 - Security Systems Holdings, Inc. 401(k) Plan Notes to Financial Statements (continued) Years ended December 31, 1997 and 1996 3. INVESTMENTS The Plan's investments are held by a bank administered trust fund. Investments that represent 5% or more of the Plan's assets available for benefits at December 31, 1997 and 1996 are as follows: 1997 1996 -------------------------- Total Return Fund - 14,538 shares $146,830 -- Growth A Fund - 20,337 shares 266,193 -- Small Capitalization A Equity Fund - 27,715 shares 185,696 -- Total Return B Fund - 11,029 and 18,234 shares, respectively 111,285 $183,803 Growth B Fund - 12,085 and 20,451 shares, respectively 150,026 257,891 Small Capitalization B Equity Fund - 14,496 and 14,799 shares, respectively 92,059 89,682 Alarmguard Holdings, Inc. - 42,440 shares 445,620 -- Diversified Income Fund - 6,850 shares -- 41,030 Short-Intermediate Government Fund - 5,566 shares -- 43,467 4. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to change or discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants become 100% vested in their accounts. 5. INCOME TAX STATUS The Internal Revenue Service has ruled (October 27, 1994) that the Plan qualifies under Section 401(a) of the Internal Revenue Code ("IRC") and the related trust is, therefore, not subject to tax under Section 501(a) of the Internal Revenue Code. The Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator and management of the Company are committed to taking all appropriate actions to maintain the Plan's qualified status. 6. YEAR 2000 ISSUE (UNAUDITED) The Company has developed a plan to modify its internal information technology to be ready for the Year 2000 and has begun converting critical data processing systems. The project also includes determining whether third party service providers have reasonable plans in place to become Year 2000 compliant. The Company currently expects the project to be substantially complete by early 1999. The Company does not expect this project to have a significant effect on plan operations. - 10 - Security Systems Holdings, Inc. 401(k) Plan Notes to Financial Statements (continued) Years ended December 31, 1997 and 1996 7. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500 The following is a reconciliation of assets available for benefits per the financial statements to the Form 5500: DECEMBER 31, 1997 1996 ------------------------------ Assets available for benefits per the financial statements $1,803,900 $674,745 Contribution receivable -- (28,105) ---------- -------- Assets available for benefits per the Form 5500 $1,803,900 $646,640 ========== ======== - 11 - Security Systems Holdings, Inc. 401(k) Plan Schedule of Assets Held for Investment Purposes December 31, 1997
IDENTITY OF ISSUER, BORROWER, LESSOR OR SIMILAR PARTY CURRENT DESCRIPTION OF INVESTMENT COST* VALUE - ------------------------------------------------------------------------------------------------------------ Kemper Service Company Total Return A Fund-14,538 shares $ 146,830 Growth A Fund-20,337 shares 266,193 Small Capitalization A Equity Fund-27,715 shares 185,696 Diversified Income A Fund-14,148 shares 85,027 Government Money Market Fund - 3,465 shares 3,465 Blue Chip A Fund - 158 shares 2,560 Cash Reserves A Fund - 58,703 shares 58,703 Short-Intermediate Government A Fund - 4,308 shares 33,601 High Return A Fund - 150 shares 4,844 Total Return B Fund - 11,029 111,285 Growth B Fund - 12,085 shares 150,026 Small Capitalization B Equity Fund - 14,496 shares 92,059 Diversified Income B Fund - 6,150 shares 36,899 Blue Chip B Fund - 801 shares 13,029 US Mortgage B Fund - 17 shares 124 Cash reserves B Fund - 16,419 shares 16,419 Short-Intermediate Government B Fund - 5,086 shares 39,462 High Return B Fund - 719 shares 23,599 Alarmguard Holdings, Inc. Alarmguard Common Stock Fund - 42,440 shares $412,811 445,620 Participants notes receivable Notes mature between June, 1998 and June, 2000 and bear interest at rates which vary between 8% and 10.5% per annum. 42,521 ---------------------- Total $412,811 $1,757,962 ======================
*THE PLAN'S CUSTODIAN WAS UNABLE TO PROVIDE THIS INFORMATION. - 12 -
Security Systems Holdings, Inc. 401(k) Plan Schedule of Reportable Transactions Year ended December 31, 1997 CURRENT VALUE OF ASSET ON PURCHASE SELLING COST OF TRANSACTION NET GAIN IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET* DATE (LOSS)* - --------------------------------------------------------------------------------------------------------------------------- CATEGORY (i) - SINGLE TRANSACTION IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS Kemper Service Company Total Return A Fund 7,972 shares $ 92,496 $ 92,496 Growth A Fund 11,462 shares 176,353 176,353 2,524 shares 38,944 38,944 Small Capitalization A Equity Fund 14,994 shares 109,040 109,040 Diversified Income A Fund 8,556 shares 51,100 51,100 Government Money Market Fund 57,218 shares $ 57,218 57,218 Cash Reserves A Fund 509,531 shares 509,531 509,531 509,697 shares 509,697 509,697 104,231 shares 104,231 104,231 Total Return B Fund 10,225 shares 116,876 116,876 Growth B Fund 10,141 shares 146,496 146,496 Alarmguard Holdings, Inc. Alarmguard Stock 9,100 shares 79,625 $79,625 79,625 4,900 shares 44,713 44,713 44,713 8,375 shares 83,750 83,750 83,750 6,030 shares 63,730 63,730 63,730
THERE WERE NO CATEGORY (ii) OR (iv) REPORTABLE TRANSACTIONS DURING THE YEAR ENDED DECEMBER 31, 1997. * THE PLAN'S CUSTODIAN WAS UNABLE TO PROVIDE THIS INFORMATION. - 13 -
Security Systems Holdings, Inc. 401(k) Plan Schedule of Reportable Transactions Year ended December 31, 1997 CURRENT VALUE OF ASSET ON PURCHASE SELLING COST OF TRANSACTION NET GAIN IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET* DATE (LOSS)* - --------------------------------------------------------------------------------------------------------------------------- CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS Kemper Service Company Total Return A Fund 14,516 shares $ 168,058 $168,058 2,132 shares $ 24,112 24,112 Growth A Fund 20,380 shares 310,447 310,447 2,560 shares 37,834 37,834 Small Capitalization A Equity Fund 27,534 shares 201,917 201,917 2,842 shares 21,074 21,074 Diversified Income A Fund 14,396 shares 86,282 86,282 502 shares 3,003 3,003 Government Money Market Fund 11,347 shares 11,347 11,347 57,218 shares 57,218 57,218 Cash Reserves A Fund 630,765 shares 630,765 630,765 535,785 shares 535,785 535,785 Short-Intermediate Government A Fund 4,460 shares 34,884 34,884 161 shares 1,256 1,256
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Security Systems Holdings, Inc. 401(k) Plan Schedule of Reportable Transactions Year ended December 31, 1997 CURRENT VALUE OF ASSET ON PURCHASE SELLING COST OF TRANSACTION NET GAIN IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET* DATE (LOSS)* - --------------------------------------------------------------------------------------------------------------------------- CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS (CONTINUED) Total Return B Fund 2,372 shares $ 24,392 $ 24,392 10,959 shares $125,298 125,298 Growth B Fund 2,865 shares 35,587 35,587 12,133 shares 174,495 174,495 Small Capitalization B Equity Fund 4,848 shares 28,623 28,623 5,171 shares 36,671 36,671 Alarmguard Holdings, Inc. Alarmguard Stock 42,440 shares 412,811 $412,811 412,811
THERE WERE NO CATEGORY (ii) OR (iv) REPORTABLE TRANSACTIONS DURING THE YEAR ENDED DECEMBER 31, 1997. *THE PLAN'S CUSTODIAN WAS UNABLE TO PROVIDE THIS INFORMATION. - 15 - EXHIBIT INDEX ------------- Exhibit No. Description ----------- ----------- 23.1 Consent of Independent Auditors - 16 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Security Systems Holdings, Inc. 401(k) Plan /s/ David Heidecorn ----------------------------------- David Heidecorn Trustee, Security Systems Holdings, Inc. 401(k) Plan Dated: June 30, 1998 - 17 - EX-23.1 2 CONSENT OF INDEPENDENT AUDITORS Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Post Effective Amendment No. 1 on Form S-8 to the Registration Statement (Form S-4 No. 333-23307) pertaining to the 1994, 1995 and 1996 Stock Option Plans and the Registration Statement (Form S-8 No. 333-30523) pertaining to the 1997 Long-Term Stock Incentive Plan of Alarmguard Holdings, Inc. of our report dated June 22, 1998, with respect to the financial statements and schedules of the Security Systems Holdings, Inc. 401(K) Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ Ernst & Young LLP Stamford, Connecticut June 30, 1998 -----END PRIVACY-ENHANCED MESSAGE-----