-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ljX5R9K22jrHeTWpp7BU4srGTvJk5J0n5i2mG0PNo7JbvsXL60vRz09S4kc+lUw7 7NOfBc5XAs4U8urAeH8EQQ== 0000051396-94-000035.txt : 19941222 0000051396-94-000035.hdr.sgml : 19941222 ACCESSION NUMBER: 0000051396-94-000035 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19941221 SROS: MSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MALLINCKRODT GROUP INC CENTRAL INDEX KEY: 0000051396 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 361263901 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00483 FILM NUMBER: 94565498 BUSINESS ADDRESS: STREET 1: 7733 FORSYTH BOULEVARD CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 314-854-5299 MAIL ADDRESS: STREET 1: 7733 FORSYTH BLVD CITY: ST. LOUIS STATE: MO ZIP: 63105-1820 FORMER COMPANY: FORMER CONFORMED NAME: IMCERA GROUP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL MINERALS & CHEMICAL CORP DATE OF NAME CHANGE: 19900614 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K / X / ANNUAL REPORT PURSUANT TO SECTION 15(d) Of THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Year Ended June 30, 1994 OR / / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission File Number 1-483 Title of the Plan -- INVESTMENT PLAN FOR EMPLOYEES OF MALLINCKRODT GROUP INC. (formally known as IMCERA Group Inc.) Name and Address of the Issuer of the Securities Held Pursuant to the Plan -- Mallinckrodt Group Inc. 7733 Forsyth Boulevard St. Louis, Missouri 63105-1820 Investment Plan for Employees of Mallinckrodt Group Inc. Financial Statements and Supplemental Schedules Year ended June 30, 1994 CONTENTS Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . .2 Financial Statements Statement of Net Assets Available for Benefits . . . . . . . . . . . . . . .3 Statement of Changes in Net Assets Available for Benefits. . . . . . . . . .5 Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .7 Supplemental Schedules Assets Held for Investment Purposes. . . . . . . . . . . . . . . . . . . . 15 Reportable Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 16 Signature The Plan -- Pursuant to the requirements of the Securities Exchange Act of 1934, the undersigned, the persons who administer the Employee Benefit Plan and who are duly authorized, have caused this annual report to be signed. Investment Plan for Employees of Mallinckrodt Group Inc. Employee Benefits Committee
Signature Title Date - ------------------------------------------------------------------------------- ASHOK CHAWLA - -------------------- Ashok Chawla Vice President, December 20, 1994 Strategic Management BEVERLEY L. HAYES - -------------------- Beverley L. Hayes Vice President, Human Resources December 20, 1994 Mallinckrodt Veterinary, Inc. ROGER A. KELLER - -------------------- Roger A. Keller Vice President, Secretary and December 20, 1994 General Counsel DAVID R. KUPFERER - -------------------- David R. Kupferer Vice President, Human Resources December 20, 1994 Mallinckrodt Chemical, Inc. DOUGLAS A. MCKINNEY - -------------------- Douglas A. McKinney Assistant Treasurer December 20, 1994 MARY J. MONNET - -------------------- Mary J. Monnet Vice President, Human Resources December 20, 1994 Mallinckrodt Medical, Inc. JOHN J. RIORDAN - -------------------- John J. Riordan Director, December 20, 1994 Pension and Profit Sharing Plans MICHAEL A. ROCCA - -------------------- Michael A. Rocca Chief Financial Officer December 20, 1994 WILLIAM B. STONE - -------------------- William B. Stone Vice President and Controller December 20, 1994 (Chairman of the Committee)
1 Report of Independent Auditors The Board of Directors Mallinckrodt Group Inc. We have audited the accompanying statements of net assets available for benefits of the Investment Plan for Employees of Mallinckrodt Group Inc. (formerly known as IMCERA Group Inc.) as of June 30, 1994 and 1993, 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 management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at June 30, 1994 and 1993, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made 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 June 30, 1994, 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 supplemental schedules have been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1994 financial statements taken as a whole. ERNST & YOUNG LLP Chicago, Illinois October 24, 1994 2 Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Net Assets Available for Benefits June 30, 1994
MGI Total Stock Fund -------------------------------- ASSETS Investments: Mallinckrodt Group Inc. common stock (744,176 shares; cost - $20,185,788) $ 24,185,720 $24,185,720 Mutual Funds: Vanguard Index Trust - 500 Portfolio (355,963 shares; cost - $13,925,571) 14,882,833 - Vanguard/Wellesley Income Fund (1,084,734 shares; cost - $19,920,759) 19,210,639 - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Company 58,604,000 - Metropolitan Life Ins. Company 14,801,173 - The Northern Trust Company Collective Short- Term Investment Fund (866,736 units; cost - $866,736) 866,736 413,077 -------------------------------- Total investments 132,551,101 24,598,797 Receivables: Loans to participants 5,472,857 - Employer contributions 7,274,982 1,944,804 Participant contributions 1,633,119 497,517 Interest and dividends 14,252 5,763 --------------------------------- Total receivables 14,395,210 2,447,984 --------------------------------- 146,946,311 27,046,781 LIABILITIES Amounts owed to (from) other funds - 192,812 Employee loans payable 306,900 66,637 -------------------------------- Net assets available for benefits $146,639,411 $26,787,332 -------------------------------- -------------------------------- Fixed Income Balanced Fund Fund - -------------------------------------------------------------------------------- ASSETS Investments: Mallinckrodt Group Inc. common stock (744,176 shares; cost - $20,185,788) $ - $ - Mutual Funds: Vanguard Index Trust - 500 Portfolio (355,963 shares; cost - $13,925,571) - - Vanguard/Wellesley Income Fund (1,084,734 shares; cost - $19,920,759) 19,210,639 - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Company 58,604,000 - Metropolitan Life Ins. Company 14,801,173 - The Northern Trust Company Collective Short- Term Investment Fund (866,736 units; cost - $866,736) 296,327 47,738 -------------------------------- Total investments 73,701,500 19,258,377 Receivables: Loans to participants 46,390 - Employer contributions 2,276,954 1,700,002 Participant contributions 205,445 575,852 Interest and dividends 2,872 3,119 -------------------------------- Total receivables 2,531,661 2,278,973 -------------------------------- 76,233,161 21,537,350 LIABILITIES Amounts owed to (from) other funds (1,049,221) 794,843 Employee loans payable 150,832 59,275 -------------------------------- Net assets available for benefits $77,131,550 $20,683,232 -------------------------------- -------------------------------- S&P 500 Administrative Index Fund Account - -------------------------------------------------------------------------------- ASSETS Investments: Mallinckrodt Group Inc. common stock (744,176 shares; cost - $20,185,788) $ - $ - Mutual Funds: Vanguard Index Trust - 500 Portfolio (355,963 shares; cost - $13,925,571) 14,882,833 - Vanguard/Wellesley Income Fund (1,084,734 shares; cost - $19,920,759) - - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Company - - Metropolitan Life Ins. Company - - The Northern Trust Company Collective Short- Term Investment Fund (866,736 units; cost - $866,736) 109,594 - -------------------------------- Total investments 14,992,427 - Receivables: Loans to participants - 5,426,467 Employer contributions 1,353,222 - Participant contributions 354,405 - Interest and dividends 2,498 - -------------------------------- Total receivables 1,710,125 5,426,467 -------------------------------- 16,702,552 5,426,467 LIABILITIES Amounts owed to (from) other funds 61,566 - Employee loans payable 30,156 - -------------------------------- Net assets available for benefits $ 16,610,830 $ 5,426,467 -------------------------------- --------------------------------
SEE NOTES TO FINANCIAL STATEMENTS. 3 Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Net Assets Available for Benefits June 30, 1993
MGI Total Stock Fund - ------------------------------------------------------------------------------ ASSETS Investments: Mallinckrodt Group Inc. common stock (653,050 shares; cost - $16,978,404) $ 19,591,500 $19,591,500 Mutual Funds: Vanguard Index Trust - 500 Portfolio (295,683 shares; cost - $11,220,870) 12,551,762 - Vanguard/Wellesley Income Fund (657,263 shares; cost - $11,662,755) 12,750,893 - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Company 56,193,873 - Metropolitan Life Ins. Company 13,689,789 - The Ohio National Life Ins. Company 289,651 - The Northern Trust Company Collective Short- Term Investment Fund (1,542,142 units; cost - $1,542,142) 1,542,142 318,761 -------------------------------- Total investments 116,609,610 19,910,261 Receivables: Loans to participants 4,515,389 - Employer contributions 4,378,273 1,124,227 Participant contributions 1,509,762 39,503 Interest and dividends 15,741 761 -------------------------------- Total receivables 10,419,165 1,164,491 -------------------------------- 127,028,775 21,074,752 LIABILITIES Amounts owed to (from) other funds - 400,089 Employee loans payable 398,652 85,078 -------------------------------- Net assets available for benefits $126,630,123 $20,589,585 -------------------------------- -------------------------------- Fixed Income Balanced Fund Fund -------------------------------- ASSETS Investments: Mallinckrodt Group Inc. common stock (653,050 shares; cost - $16,978,404) $ - $ - Mutual Funds: Vanguard Index Trust - 500 Portfolio (295,683 shares; cost - $11,220,870) - - Vanguard/Wellesley Income Fund (657,263 shares; cost - $11,662,755) - 12,750,893 Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Company 56,193,873 - Metropolitan Life Ins. Company 13,689,789 - The Ohio National Life Ins. Company 289,651 - The Northern Trust Company Collective Short- Term Investment Fund (1,542,142 units; cost - $1,542,142) 945,326 85,515 -------------------------------- Total investments 71,118,639 12,836,408 Receivables: Loans to participants 55,538 - Employer contributions 1,488,055 999,976 Participant contributions 341,077 746,024 Interest and dividends 13,843 379 -------------------------------- Total receivables 1,898,513 1,746,379 -------------------------------- 73,017,152 14,582,787 LIABILITIES Amounts owed to (from) other funds 156,213 (848,773) Employee loans payable 228,087 35,174 -------------------------------- Net assets available for benefits $72,632,852 $15,396,386 -------------------------------- ------------------------------ S&P 500 Administrative Index Fund Account -------------------------------- ASSETS Investments: Mallinckrodt Group Inc. common stock (653,050 shares; cost - $16,978,404) $ - $ - Mutual Funds: Vanguard Index Trust - 500 Portfolio (295,683 shares; cost - $11,220,870) 12,551,762 - Vanguard/Wellesley Income Fund (657,263 shares; cost - $11,662,755) - - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Company - - Metropolitan Life Ins. Company - - The Ohio National Life Ins. Company - - The Northern Trust Company Collective Short- Term Investment Fund (1,542,142 units; cost - $1,542,142) 192,540 - -------------------------------- Total investments 12,744,302 - Receivables: Loans to participants - 4,459,851 Employer contributions 766,015 - Participant contributions 383,158 - Interest and dividends 758 - -------------------------------- Total receivables 1,149,931 4,459,851 -------------------------------- 13,894,233 4,459,851 LIABILITIES Amounts owed to (from) other funds 292,471 - Employee loans payable 50,313 - -------------------------------- Net assets available for benefits $13,551,449 $ 4,459,851 -------------------------------- --------------------------------
SEE NOTES TO FINANCIAL STATEMENTS. 4 Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Changes in Net Assets Available for Benefits Year ended June 30, 1994
MGI Total Stock Fund -------------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ 349,391 $ 349,391 Mutual funds 1,386,390 - -------------------------------- 1,735,781 349,391 Interest: Loans to participants 289,836 79,410 Investments 4,653,011 15,263 -------------------------------- 4,942,847 94,673 -------------------------------- Net investment income 6,678,628 444,064 Net appreciation (depreciation) in fair value of investments 85,407 1,640,226 Contributions: Employer 9,501,934 2,539,654 Participant 18,363,824 5,893,902 -------------------------------- Total contributions 27,865,758 8,433,556 -------------------------------- Cash and stock distributed to withdrawing participants (14,620,505) (3,168,344) Transfers of investment direction - (1,151,755) -------------------------------- Net increases 20,009,288 6,197,747 Net assets available for benefits at beginning of year 126,630,123 20,589,585 -------------------------------- Net assets available for benefits at end of year $146,639,411 $26,787,332 -------------------------------- -------------------------------- Fixed Income Balanced Fund Fund -------------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds - 1,023,196 -------------------------------- - 1,023,196 Interest: Loans to participants 107,619 60,972 Investments 4,622,788 8,396 -------------------------------- 4,730,407 69,368 -------------------------------- Net investment income 4,730,407 1,092,564 Net appreciation (depreciation) in fair value of investments - (1,351,084) Contributions: Employer 2,984,674 2,204,201 Participant 6,253,979 4,455,026 -------------------------------- Total contributions 9,238,653 6,659,227 -------------------------------- Cash and stock distributed to withdrawing participants (10,074,517) (2,326,133) Transfers of investment direction 04,155 1,212,272 --------------------------------- Net increases 4,498,698 5,286,846 Net assets available for benefits at beginning of year 72,632,852 15,396,386 ------------------------------- Net assets available for benefits at end of year $77,131,550 $20,683,232 ------------------------------- ------------------------------- S&P 500 Administrative Index Fund Account --------------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds 363,194 - ------------------------------- 363,194 - Interest: Loans to participants 41,835 - Investments 6,564 - -------------------------------- 48,399 - -------------------------------- Net investment income 411,593 - Net appreciation (depreciation) in fair value of investments (203,735) - Contributions: Employer 1,773,405 - Participant 3,896,304 (2,135,387) -------------------------------- Total contributions 5,669,709 (2,135,387) -------------------------------- Cash and stock distributed to withdrawing participants (2,153,514) 3,102,003 Transfers of investment direction (664,672) - ------------------------------- Net increases 3,059,381 966,616 Net assets available for benefits at beginning of year 13,551,449 4,459,851 -------------------------------- Net assets available for benefits at end of year $ 16,610,830 $ 5,426,467 -------------------------------- --------------------------------
SEE NOTES TO FINANCIAL STATEMENTS. 5 Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Changes in Net Assets Available for Benefits Year ended June 30, 1993
MGI Total Stock Fund -------------------------------- Dividends: Mallinckrodt Group Inc. common stock $ 258,343 $ 258,343 Mutual funds 921,372 - -------------------------------- 1,179,715 258,343 Interest: Loans to participants 278,369 90,440 Investments 5,320,209 12,147 -------------------------------- 5,598,578 102,587 -------------------------------- Net investment income 6,778,293 360,930 Net appreciation (depreciation) in fair value of investments 211,392 (1,671,941) Contributions: Employer 6,267,839 1,699,574 Participant 16,788,087 4,700,757 -------------------------------- Total contributions 23,055,926 6,400,331 Cash and stock distributed to withdrawing participants (10,477,002) (1,536,020) Transfers of investment direction - (122,638) Transfers to other plans (4,329,095) (1,020,401) -------------------------------- Net increases (decreases) 15,239,514 2,410,261 Net assets available for benefits at beginning of year 111,390,609 18,179,324 -------------------------------- Net assets available for benefits at end of year $126,630,123 $20,589,585 -------------------------------- Fixed Income Balanced Fund Fund -------------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds - 636,204 ----------------------------- - 636,204 Interest: Loans to participants 117,544 36,355 Investments 5,297,111 6,415 ----------------------------- 5,414,655 42,770 ----------------------------- Net investment income 5,414,655 678,974 Net appreciation (depreciation) in fair value of investments - 921,870 Contributions: Employer 2,186,618 1,325,730 Participant 6,010,234 3,441,993 ---------------------------- Total contributions 8,196,852 4,767,723 Cash and stock distributed to withdrawing participants (7,370,905) (701,314) Transfers of investment direction (3,989,611) 2,218,330 Transfers to other plans (2,442,888) (341,992) ------------------------------ Net increases (decreases) (191,897) 7,543,591 Net assets available for benefits at beginning of year 72,824,749 7,852,795 ----------------------------- Net assets available for benefits at end of year $ 72,632,852 $15,396,386 ----------------------------- S&P 500 Administrative Index Fund Account -------------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds 285,168 - -------------------------------- 285,168 - Interest: Loans to participants 34,030 - Investments 4,536 - -------------------------------- 38,566 - -------------------------------- Net investment income 323,734 - Net appreciation (depreciation) in fair value of investments 961,463 - Contributions: Employer 1,055,917 - Participant 2,635,103 - -------------------------------- Total contributions 3,691,020 - Cash and stock distributed to withdrawing participants (688,625) (180,138) Transfers of investment direction 759,903 1,134,016 Transfers to other plans (335,956) (187,858) -------------------------------- Net increases (decreases) 4,711,539 766,020 Net assets available for benefits at beginning of year 8,839,910 3,693,831 -------------------------------- Net assets available for benefits at end of year $13,551,449 $ 4,459,851 --------------------------------
SEE NOTES TO FINANCIAL STATEMENTS. 6 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements 1. DESCRIPTION OF THE PLAN GENERAL This Plan description is provided for general information purposes only. Participants should refer to the November 1993 plan summary which is part of the prospectus for the Investment Plan for Employees of Mallinckrodt Group Inc. (the Plan) as supplemented by an Information Bulletin issued as of April 30, 1994, for a more complete description of the provisions of the Plan. The Plan was established effective July 1, 1970, and has been subsequently amended from time to time to incorporate certain changes in Plan features and other legislatively required changes. All nonunion employees of Mallinckrodt Group Inc. (formerly known as IMCERA Group Inc.) and certain wholly owned subsidiaries and certain union employees at Mallinckrodt Chemical, Inc. (eligible as of April 1993) (jointly referred to as Mallinckrodt or the Company), who are employed in the U.S. or on a U.S. payroll, are eligible to participate in the Plan. Separate accounts are maintained for each participant. Each participant's account balances are adjusted for contributions, distributions, loans, income, gains and losses. Participants are fully vested in all amounts allocated to their Plan accounts. The Plan is funded by contributions from participants in the form of after-tax contributions (payroll deductions) of up to 15% of participants' base monthly salaries. The Plan also provides a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Internal Revenue Code. The percentage of a participant's base monthly salary which could be contributed on a pre-tax basis (salary reduction contributions) cannot exceed 15%. Total after-tax and pre-tax contributions cannot exceed 15% of a participant's base monthly salary. In addition, for calendar year 1994, salary reduction contributions could not exceed $9,240. The Plan is also funded by employer contributions of not less than 20% of a participant's eligible contributions. Contributions that do not exceed 6% of a participant's base monthly salary constitute eligible contributions. Mallilnckrodt may make additional discretionary contributions each year as determined by its Board of Directors. Employer contributions are subject to certain limitations with respect to Mallinckrodt's consolidated net earnings and accumulated earned surplus. Total employer contributions were equal to 87% of participants' eligible contributions for the year ended June 30, 1994, and 68% for the year ended June 30, 1993. 7 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) Contributions to the Plan, including employee and employer contributions, are subject to various limitations imposed by the Internal Revenue Code. Under certain circumstances, participants may transfer their vested benefits from other plans to the Plan. While Mallinckrodt has not expressed any intent to terminate the Plan, it is free to do so at any time. In the event the Plan terminates, participants will be entitled to receive a complete distribution of their undistributed account balance as held in their respective Plan accounts. Because all Plan assets are allocated to Plan participants and a participant's benefit under the plan equals the value of the participant's account balance, the Plan is not subject to the insurance provisions of the Pension Benefit Guarantee Corporation. Administrative expenses of the Plan are borne by Mallinckrodt. INVESTMENTS The Plan's investments, except for certain investments in group annuity contracts discussed below, at June 30, 1994 and 1993, were held by The Northern Trust Company (Northern) under a trust agreement dated March 2, 1988, and amended June 19, 1991. Investments in group annuity contracts were with Transamerica Occidental Life Insurance Company (Transamerica) and Metropolitan Life Insurance Company (Metropolitan) at June 30, 1994, and Transamerica, Metropolitan and Ohio National Life Insurance Company (Ohio National) at June 30, 1993. All new contributions to the Fixed Income Fund are invested 75% in the Transamerica contract and 25% in the Metropolitan contract. The contract with Transamerica dated November 2, 1989, provides guaranteed rates of interest to be set annually on all new monies invested over the contract term. The rate for the contract year beginning January 1, 1949 is 6.25%. The contract with Metropolitan dated October 18, 1991, provides guaranteed rates of interest to be set annually on all new monies invested over the contract term. The rate for the contract year beginning November 1, 1993 is 6.6%. The contracts with Ohio National were negotiated under the Coopers Plan before it was merged into the Plan on January 1, 1990. To preserve the previously negotiated interest rates, this contract was maintained under the Plan until its expiration date for the exclusive benefit of former Coopers Plan participants. 8 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) Under the contract with Ohio National, a rate of 8.73% was guaranteed until July 20, 1993 on contributions made between July 20, 1988 and December 31, 1989. The funds in the Ohio National contract were transferred to the Transamerica contract on July 23, 1993. FUND ASSET VALUATION Participants' equity in the Plan is valued in dollars determined as of the last business day of each calendar month (valuation date). As of each valuation date, the market value of the assets in each of the investment funds is determined, and the increase or decrease of each fund is allocated to each participant's account invested in that fund, based on the participant's proportionate interest of such fund as of the previous valuation date. INVESTMENT PROGRAMS Participants select their desired investment funds upon joining the Plan. Participants may direct that their past and future contributions, employer contributions and earnings on such contributions be invested in one of the Funds or in increments of 25% in any of the Funds. Participants may also elect to change the investment direction of their contributions four times a year as of January 1, April 1, July 1, and October 1, upon giving the required notice. Such a change only affects the investment of the participant's contributions and employer contributions received by the Plan after the effective date of the change. Transfers into and out of the Fixed Income Fund will be made on a prorated basis of 75%-25% from both the Transamerica contract and the Metropolitan contract, respectively. Participants having an account balance invested in the Fixed Income Fund may transfer their balance out of that Fund only if no more than 20% of the total value of the Transamerica contract on November 1 of the prior year is transferred or distributed for all participants exceeds 20%, then the amount elected to be transferred or distributed by each individual will be reduced on a prorata basis until the total amount transferred by all participants is reduced to 20% of the value of the assets invested in the Transamerica contract as of the end of the prior year. Transfers from the Metropolitan contract are limited to the extent that the total transfer at any given time must be on a 75%-25% basis from the Transamerica and Metropolitan contracts, respectively. 9 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) A participant may change the amount of payroll deduction or salary reduction twice a year, as of January 1 and July 1, upon giving the required notice. VESTING AND PARTICIPATION All Plan members are fully vested. Employees who are eligible to join the Plan may elect to do so on the first January 1 or July 1 following their initial date of employment. WITHDRAWALS The Plan does permit participants to withdraw various portions, or in certain instances, their entire account balance in the Plan under limited circumstances. However, these rights of withdrawal are limited and carry, in certain cases, suspension of participation penalties. Participants may withdraw their entire interest in the Plan without penalty upon termination of their employment or upon reaching age 59 1/2 or becoming disabled as defined in the Plan. Except as noted above, amounts contributed through salary deferrals, as well as earnings thereon, may not be withdrawn while a participant is employed by the Company except under certain conditions of financial hardship. In such instances, salary deferrals may be withdrawn; however, as a penalty, the participant is suspended from participation for at least 12 months. Participants may also withdraw after-tax and employer contributions without penalty upon demonstration of financial hardship. Or, these amounts may be withdrawn for any purpose in which case the participant would also incur a suspension of participation for 12 months. Except as noted below, participants will receive distribution of their interest in the Plan in a lump-sum payment. DISTRIBUTION UPON TERMINATION OF EMPLOYMENT OR RETIREMENT Upon termination of employment with Mallinckrodt and its affiliates, Plan participants are entitled to receive a complete distribution of their entire account balance in the Plan. 10 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) All participants who terminate their employment with vested account balances whose value exceeds $3,500 are eligible to defer receipt of any distribution from the Plan until January 31 of the year following termination or no later than the April 1 following their attainment of age 70 1/2. If long-term deferral is elected, the participant's account is transferred to the fixed income fund. The accounts of participants electing short-term deferral remain invested in the investment funds selected by the participants until distribution on January 31 following termination of employment. Participants electing deferral must: (1) elect to receive their distributions in: (a) a lump sum on the date of distribution; or (b) in substantially equal annual installments not to exceed ten, and (2) make any election for the method of distribution in the event of their death prior to total distribution. The beneficiary of a retired participant is permitted, in the event of the latter's death, to change the form of payment election made by the deceased participant. Participants who terminate their employment prior to eligibility for early or normal retirement and whose Plan account exceeds $3,500 will be permitted to defer receipt of their Plan distribution as provided above, except that distribution will be received in a lump sum only. LOANS TO PARTICIPANTS Participants in the Plan may be granted loans from their Plan accounts subject to certain terms, maximum dollar amounts, or Plan account balance limits and other rules as defined by the Plan. The amount of any such loan is borrowed from the account of the participant to whom the loan was made, and such account does not share in the allocation of income, gains and losses of the investment funds to the extent of the outstanding balance of such loan. Rather, the interest paid by the particiant on the loan is credited to the participant's account. Loans are accounted for in the Administrative Account in the Statement of Net Assets Available for Benefits. Principal repayments, which are over one to five years for general purpose loans and over one to ten years for residential loans, and related interest income, determined at the prime rate, are credited to the borrowing participant's account. The rate of interest charged for the term of a loan is the prime rate quoted in The Wall Street Journal on the first business day of the month in which the loan is approved. Loan repayments are made by monthly payroll deductions. Loan repayments are invested in the same manner as current contributions, except that repayments related to loans outstanding prior to August 1990 may continue to be invested in the Fund or Funds out of which the loans were originally taken. 11 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements (Continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENT VALUATION All investments are carried at fair value, except the group fixed annuity contracts which are carried at contract value. The group fixed annuity contracts generally provide that upon termination the contracts will be paid at market value which may be lower or higher than contract value. Fair value is the last reported sales price on the last business day of the month for securities traded on a national securities exchange and in the over-the-counter market. Fair value for shares or units of the mutual fund investments and The Northern Trust Company Collective Short-Term Investment Fund is the net asset value of those shares or units as computed by the respective funds. CONTRIBUTIONS Contributions from participants are recorded monthly when due from Mallinckrodt. Contributions by Mallinckrodt are accrued monthly based on the minimum contribution percentage (20%) required by the Plan. Any additional contributions by Mallinckrodt are made following approval by its Board of Directors. SECURITY TRANSACTIONS Purchases and sales of securities are accounted for on the trade date (date the order to buy or sell is executed). Dividend income is recorded on the ex-dividend date. Income from other investments is recorded as earned on an accrual basis. RECLASSIFICATION Certain prior year balances have been reclassified to conform to the current year's treatment. 12 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements (Continued) 3. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENT ASSETS The components of the net appreciation (depreciation) in fair value of investment assets for the years ended June 30, 1994 and 1993 were as follows:
June 30, 1994 ------------------------------------------------------- Mallinckrodt Balanced S&P 500 Security Type Total Stock Fund Fund Index Fund - --------------------------------------------------------------------------------------------- Mallinckrodt Group Inc. Common Stock $ 1,640,226 $ 1,640,226 $ - $ - Mutual funds: Vanguard Index Trust--500 Portfolio (203,735) - - (203,735) Vanguard/Wellesley Income Fund (1,351,084) - (1,351,084) - ------------------------------------------------------- Net appreciation (depreciation) in fair value of investment assets $ 85,407 $ 1,640,226 $(1,351,084) $(203,735) ------------------------------------------------------- -------------------------------------------------------
June 30, 1993 ------------------------------------------------------- Mallinckrodt Balanced S&P 500 Security Type Total Stock Fund Fund Index Fund - ---------------------------------------------------------------------------------------------- Mallinckrodt Group Inc. Common Stock $(1,671,941) $(1,671,941) $ - $ - Mutual funds: Vanguard Index Trust--500 Portfolio 961,463 - - 961,463 Vanguard/Wellesley Income Fund 921,870 - $921,870 - ------------------------------------------------------- Net appreciation (depreciation) in fair value of investment assets $ 211,392 $(1,671,941) $921,870 $961,463 ------------------------------------------------------- -------------------------------------------------------
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
June 30 1994 1993 ----------------------------------- Net assets available for benefits per the financial statements $149,639,411 $126,630,123 Amounts allocated to withdrawing participants (2,254,721) (2,918,904) ----------------------------------- Net assets available for benefits per the Form 5500 $147,384,690 $123,711,219 ----------------------------------- -----------------------------------
13 Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements (Continued) 4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED) Amounts allocated to withdrawing participants by fund option are as follows:
June 30 1994 1993 ----------------------------------- Mallinckrodt stock fund $ 349,453 $ 661,308 Fixed income fund 1,395,666 1,379,795 Balanced fund 272,239 441,853 S&P 500 index fund 237,363 435,948 ----------------------------------- $2,254,721 $2,918,904 ----------------------------------- -----------------------------------
The following is a reconciliation of cash and stock distributed to participants per the financial statements to the Form 5500:
Year ended June 30 1994 ------------ Cash and stock distributed to participants per the financial statements $14,620,505 Add: Amounts allocated to withdrawing participants at June 30, 1994 2,254,721 Less: Amounts allocated to withdrawing participants at June 30, 1993 (2,918,904) ------------ Cash and stock distributed to participants per the Form 5500 $13,956,322 ------------ ------------
5. FEDERAL INCOME TAX STATUS On February 10, 1986, the Internal Revenue Service advised that the Plan, as amended through amendment number eleven and restated effective July 1, 1985, qualifies under Section 401(a) of the Internal Revenue Code (IRC) and that the Investment Trust for Employees of Mallinckrodt Group Inc., as amended, established thereunder is exempt from Federal income taxation under Section 501(a). Since that time, the Plan has been amended, among other reasons, to comply with changes required by the Tax Reform Act of 1986. Once qualified, the Plan is required to operate in conformity with the IRC in order to maintain its qualification. The Plan Administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 14 SUPPLEMENTAL SCHEDULES Investment Plan for Employees of Mallinckrodt Group Inc. Assets Held for Investment Purposes June 30, 1994
Fair Description Number of Shares Cost Value - -------------------------------------------------------------------------------------- Mallinckrodt Group Inc. Common stock 744,176 shares $ 20,185,788 $ 24,185,720 Vanguard Index Trust- 500 Portfolio 355,963 shares 13,925,571 14,882,833 Vanguard/Wellesley Income Fund 1,084,734 shares 19,920,759 19,210,639 Group fixed annuity contracts: Transamerica Occidental Life Insurance Company GAC #005100200 58,599,282 58,599,282 GAC #5100202 4,718 4,718 Metropolitan Life Insurance Company GAC #12826 14,801,173 14,801,173 The Northern Trust Company Collective Short-Term Investment Fund 866,736 866,736 --------------------------- Total investments $128,304,027 $132,551,101 --------------------------- --------------------------- Loans to participants $ 5,427,857 $ 5,472,857 --------------------------- ---------------------------
15 Investment Plan for Employees of Mallinckrodt Group Inc. Reportable Transactions Year ended June 30, 1994
Purchases Sales ---------------- --------------------------- Net Gain Description Number Cost Number Proceeds Cost (Loss) - ------------------------------------------------------------------------------------------ CATEGORY (iii) SERIES OF SECURITIES TRANSACTIONS The Northern Trust Company Collective Short-Term Investment Fund (1) 295 $33,421,219 233 $34,096,625 $34,096,625 $ - Mallinckrodt Group Inc. Common Stock 17 4,580,649 14 1,643,223 1,373,265 269,958 Vanguard Index Trust -- 500 Portfolio 27 3,809,929 7 1,249,446 1,105,228 144,218 Vanguard/Wellesley Income Fund 33 8,925,201 5 726,670 667,197 59,473 Group fixed annuity contract with Transamerica Occidental Life and Annuity Company (1) GAC #005100200 34 12,389,805 32 4,610,828 4,610,828 - GAC #5100202 4 323,897 11 2,244,942 2,244,942 - GAC #51006 - - 1 3,493,805 3,493,805 - Group fixed annuity contract with Metropolitan Life Insurance Company (1) GAC #12826 25 2,455,216 1 1,343,832 1,343,832 - Notes: (1) Due to the nature of these transactions, no gain or loss on disposition is recognized. (2) There were no category (i), (ii), or (iv) reportable transactions during the year ended June 30, 1994.
16 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 2-94151) pertaining to the Investment Plan for Employees of Mallinckrodt Group Inc. and in the related Prospectus of our report dated October 24, 1994, with respect to the financial statements and schedules of the Investment Plan for Employees of Mallilnckrodt Group Inc. included in this Annual Report (Form 11-K) for the year ended June 30, 1994. ERNST & YOUNG LLP Chicago, Illinois December 19, 1994 17 -----END PRIVACY-ENHANCED MESSAGE-----