-----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, Fjdn+/sCM3qkpdIm9kOVF6tO3xf/Z70BUbd4z7F1rk6rFuuRWnSxXueHsaZ6jiGg vQoQva+kqFDkAjp94y4icQ== 0000051396-96-000037.txt : 19961223 0000051396-96-000037.hdr.sgml : 19961223 ACCESSION NUMBER: 0000051396-96-000037 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19961220 SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MALLINCKRODT GROUP INC CENTRAL INDEX KEY: 0000051396 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] 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: 96683757 BUSINESS ADDRESS: STREET 1: 7733 FORSYTH BLVD CITY: ST LOUIS STATE: MO ZIP: 63105-1820 BUSINESS PHONE: 3148545299 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, 1996 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. 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 Years Ended June 30, 1996 and 1995 with Report of Independent Auditors Investment Plan for Employees of Mallinckrodt Group Inc. Financial Statements and Supplemental Schedules Years Ended June 30, 1996 and 1995 Contents Report of Independent Auditors............................2 Financial Statements Statements of Net Assets Available for Benefits ..........3 Statements of Changes in Net Assets Available for Benefits..............................................5 Notes to Financial Statements.............................7 Supplemental Schedules Assets Held for Investment................................I Reportable Transactions..................................II 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 ASHOK CHAWLA - ------------ Ashok Chawla Vice President, December 20, 1996 Strategic Management BRUCE K. CROCKETT - ---------------- Bruce K. Crockett Vice President, December 20, 1996 Human Resources BEVERLEY L. HAYES - ----------------- Beverley L. Hayes Vice President, December 20, 1996 Human Resources Mallinckrodt Veterinary, Inc. ROGER A. KELLER - --------------- Roger A. Keller Vice President, Secretary December 20, 1996 and General Counsel DAVID R. KUPFERER - ----------------- David R. Kupferer Staff Vice President, December 20, 1996 Organizational Development, Human Resources DOUGLAS A. MCKINNEY - ------------------- Douglas A. McKinney Treasurer December 20, 1996 JOHN J. RIORDAN - --------------- John J. Riordan Director, Pension and December 20, 1996 Profit MICHAEL A. ROCCA - ---------------- Michael A. Rocca Senior Vice President and December 20, 1996 Chief Financial Officer HERSCHEL V. SELLERS - ------------------- Herschel A. Sellers Director, Compensation and December 20, 1996 Benefits WILLIAM B. STONE - ---------------- William B. Stone Vice President Information December 20, 1996 Technology (Chairman of the Committee) Report of Independent Auditors Plan Administrator Investment Plan for Employees of 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. as of June 30, 1996 and 1995, 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, 1996 and 1995, 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 as of June 30, 1996, 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 statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects to the financial statements taken as a whole. November 22, 1996 Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Net Assets Available for Benefits As of June 30, 1996
MGI Total Stock Fund ------------------------- Assets Investments: Mallinckrodt Group Inc. common stock (935,744 shares; cost - $27,989,301) $ 36,377,048 36,377,048 Mutual Funds: Vanguard Index Trust - 500 Portfolio (741,121 shares; cost - $35,094,120) 46,609,120 - Vanguard/Wellesley Income Fund (1,725,532 shares; cost - $32,311,174) 34,062,010 - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Co. 67,869,155 - Metropolitan Life Ins. Company 17,084,628 - The Northern Trust Company Collective Short- Term Investment Fund (221,130 units; cost - $221,130) 221,130 171,524 Loans to participants 6,900,472 - Other 7,686 - ------------------------- Total investments 209,131,249 36,548,572 Receivables: Employer contributions 9,734,382 1,831,149 Participant contributions 825,463 181,602 Interest and dividends 2,294 421 ------------------------- Total receivables 10,562,139 2,013,172 ------------------------- Liabilities Amounts owed (to) from other funds - (1,928,625) Amounts owed (to) from other plans 35,707 - ------------------------- Net assets available for benefits $219,729,095 $36,633,119 ========================= Fixed Income Balanced Fund Fund ------------------------- Assets Investments: Mallinckrodt Group Inc. common stock (935,744 shares; cost - $27,989,301) - - Mutual Funds: Vanguard Index Trust - 500 Portfolio (741,121 shares; cost - $35,094,120) - - Vanguard/Wellesley Income Fund (1,725,532 shares; cost - $32,311,174) - 34,062,010 Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Co. 67,869,155 - Metropolitan Life Ins. Company 17,084,628 - The Northern Trust Company Collective Short-Term Investment Fund (221,130 units; cost - $221,130) 31,824 5,132 Loans to participants - - Other 7,686 - ------------------------- Total investments 84,993,293 34,067,142 Receivables: Employer contributions 2,547,949 2,105,932 Participant contributions 189,856 181,602 Interest and dividends 1,024 424 -------------------------- Total receivables 2,738,829 2,287,958 -------------------------- Liabilities Amounts owed (to) from other funds 200,910 (1,649,089) Amounts owed (to) from other plans 18,619 (2,461) -------------------------- Net assets available for benefits $ 87,951,651 $34,703,550 ========================== S&P 500 Administrative Index Fund Account --------------------------- Assets Investments: Mallinckrodt Group Inc. common stock (935,744 shares; cost - $27,989,301) - - Mutual Funds: Vanguard Index Trust - 500 Portfolio (741,121 shares; cost - $35,094,120) 46,609,120 - Vanguard/Wellesley Income Fund (1,725,532 shares; cost - $32,311,174) - - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Co. - - Metropolitan Life Ins. Company - - The Northern Trust Company Collective Short- Term Investment Fund (221,130 units; cost - $221,130) 12,650 - Loans to participants - 6,900,472 Other - - -------------------------- Total investments 46,621,770 6,900,472 Receivables: Employer contributions 3,249,352 - Participant contributions 272,403 - Interest and dividends 425 - -------------------------- Total receivables 3,522,180 - -------------------------- Liabilities Amounts owed (to) from other funds 3,376,804 - Amounts owed (to) from other plans 19,549 - ------------------------ Net assets available for benefits $ 53,540,303 $ 6,900,472 ========================
See notes to financial statements. Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Net Assets Available for Benefits As of June 30, 1995
MGI Total Stock Fund ------------------------ Assets Cash $ 222,186 $222,186 Investments: Mallinckrodt Group Inc. common stock (906,861 shares; cost - $25,600,658) $ 32,193,566 32,193,566 Mutual Funds: Vanguard Index Trust - 500 Portfolio (494,349 shares; cost - $20,335,562) 25,285,934 - Vanguard/Wellesley Income Fund (1,261,509 shares; cost - $22,976,847) 24,271,428 - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Co. 63,793,518 - Metropolitan Life Ins. Company 16,172,260 - The Northern Trust Company Collective Short- Term Investment Fund (378,714 units; cost- $378,714) 378,714 - Loans to participants 5,567,031 - Other 7,686 - ------------------------- Total investments 167,670,137 32,193,566 Receivables: Employer contributions 9,680,755 2,435,499 Participant contributions 887,356 229,619 Interest and dividends 3,556 1,297 ------------------------ Total receivables 10,571,667 2,666,415 ------------------------ Liabilities Amounts owed (to) from other funds - (437,458) ------------------------- Net assets available for benefits $178,463,990 $34,644,709 ========================= Fixed Income Balanced Fund Fund ------------------------- Assets Cash $ - $ - Investments: Mallinckrodt Group Inc. common stock (906,861 shares; cost - $25,600,658) - - Mutual Funds: Vanguard Index Trust - 500 Portfolio (494,349 shares; cost - $20,335,562) - - Vanguard/Wellesley Income Fund (1,261,509 shares; cost - $22,976,847) - 24,271,428 Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Co. 63,793,518 - Metropolitan Life Ins. Company 16,172,260 - The Northern Trust Company Collective Short- Term Investment Fund (378,714 units; cost - $378,714) 118,292 120,071 Loans to participants 38,533 - Other 7,686 - -------------------------- Total investments 80,130,289 24,391,499 Receivables: Employer contributions 3,057,172 1,943,289 Participant contributions 273,561 183,217 Interest and dividends 1,489 395 -------------------------- Total receivables 3,332,222 2,126,901 -------------------------- Liabilities Amounts owed (to) from other funds 990,702 (197,082) -------------------------- Net assets available for benefits $ 84,453,213 $26,321,318 ========================== S&P 500 Administrative Index Fund Account -------------------------- Assets Cash $ - $ - Investments: Mallinckrodt Group Inc. common stock (906,861 shares; cost - $25,600,658) - - Mutual Funds: Vanguard Index Trust - 500 Portfolio (494,349 shares; cost - $20,335,562) 25,285,934 - Vanguard/Wellesley Income Fund (1,261,509 shares; cost - $22,976,847) - - Group fixed annuity contracts (cost equals contract value): Transamerica Occidental Life Ins. Co. - - Metropolitan Life Ins. Company - - The Northern Trust Company Collective Short- Term Investment Fund (378,714 units; cost - $378,714) 140,351 - Loans to participants - 5,528,498 Other - - -------------------------- Total investments 25,426,285 5,528,498 Receivables: Employer contributions 2,244,795 - Participant contributions 200,959 - Interest and dividends 375 - ---------------------------- Total receivables 2,446,129 - ---------------------------- Liabilities Amounts owed (to) from other funds (356,162) - ---------------------------- Net assets available for benefits $ 27,516,252 $ 5,528,498 ============================
See notes to financial statements. Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Changes in Net Assets Available for Benefits Year ended June 30, 1996
MGI Total Stock Fund --------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ 570,888 $ 570,888 Mutual funds 2,579,471 - ------------------------ 3,150,359 570,888 Interest: Loans to participants 501,475 115,339 Investments 5,633,156 9,433 ----------------------- 6,134,631 124,772 ----------------------- Net investment income 9,284,990 695,660 Net appreciation (depreciation)in fair value of investments 11,626,554 2,993,454 Contributions: Employer 12,178,999 2,437,400 Participant 20,704,222 5,741,798 ------------------------ Total contributions 32,883,221 8,179,198 Cash and stock distributed to participants (25,851,649) (5,667,348) Transfers (to) from other plans 13,321,989 955,459 Transfers of investment direction - (5,168,013) --------------------------- Net increases 41,265,105 1,988,410 Net assets available for benefits at beginning of year 178,463,990 34,644,709 --------------------------- Net assets available for benefits at end of year $219,729,095 $36,633,119 =========================== Fixed Income Balanced Fund Fund --------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds - 1,767,687 ------------------------- - 1,767,687 Interest: Loans to participants 189,056 86,755 Investments 5,613,578 4,720 ------------------------- 5,802,634 91,475 -------------------------- Net investment income 5,802,634 1,859,162 Net appreciation (depreciation) in fair value of investments - 1,183,561 Contributions: Employer 3,216,698 2,617,747 Participant 6,719,050 4,805,121 ------------------------ Total contributions 9,935,748 7,422,868 Cash and stock distributed to participants (15,839,440) (3,987,519) Transfers (to) from other plans 5,080,823 2,872,253 Transfers of investment direction (1,481,327) (968,093) ------------------------- Net increases 3,498,438 8,382,232 Net assets available for benefits at beginning of year 84,453,213 26,321,318 -------------------------- Net assets available for benefits at end of year $ 87,951,651 $ 34,703,550 ========================== S&P 500 Administrative Index Fund Account -------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds 811,784 - -------------------------- 811,784 - Interest: Loans to participants 110,325 - Investments 5,425 - -------------------------- 115,750 - -------------------------- Net investment income 927,534 - Net appreciation (depreciation) in fair value of investments 7,449,539 - Contributions: Employer 3,907,154 - Participant 6,300,865 (2,862,612) ------------------------- Total contributions 10,208,019 (2,862,612) Cash and stock distributed to participants (4,591,928) 4,234,586 Transfers (to) from other plans 4,413,454 - Transfers of investment direction 7,617,433 - - ------------------------ Net increases 26,024,051 1,371,974 Net assets available for benefits at beginning of year 27,516,252 5,528,498 ------------------------- Net assets available for benefits at end of year $53,540,303 $6,900,472 =========================
See notes to financial statements. Investment Plan for Employees of Mallinckrodt Group Inc. Statement of Changes in Net Assets Available for Benefits Year ended June 30, 1995
MGI Total Stock Fund ---------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ 474,414 $ 474,414 Mutual funds 1,844,340 - ---------------------------- 2,318,754 474,414 Interest: Loans to participants 348,785 78,825 Investments 5,111,790 12,595 ---------------------------- 5,460,575 91,420 ---------------------------- Net investment income 7,779,329 565,834 Net appreciation (depreciation) in fair value of investments 9,228,387 2,882,421 Contributions: Employer 11,947,021 3,035,323 Participant 21,674,162 6,122,721 ---------------------------- Total contributions 33,621,183 9,158,044 Cash and stock distributed to participants (18,804,320) (2,730,457) Transfers of investment direction - (2,018,465) ---------------------------- Net increases 31,824,579 7,857,377 Net assets available for benefits at beginning of year 146,639,411 26,787,332 ---------------------------- Net assets available for benefits at end of year $178,463,990 $34,644,709 ============================ Fixed Income Balanced Fund Fund ----------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds - 1,339,412 ----------------------------- - 1,339,412 Interest: Loans to participants 136,724 71,152 Investments 5,087,410 6,628 ----------------------------- 5,224,134 77,780 ----------------------------- Net investment income 5,224,134 1,417,192 Net appreciation (depreciation) in fair value of investments - 2,203,088 Contributions: Employer 3,764,924 2,444,176 Participant 7,977,724 5,170,416 ----------------------------- Total contributions 11,742,648 7,614,592 Cash and stock distributed to participants (13,946,791) (2,416,475) Transfers of investment direction 4,301,672 (3,180,311) ------------------------------ Net increases 7,321,663 5,638,086 Net assets available for benefits at beginning of year 77,131,550 20,683,232 ------------------------------ Net assets available for benefits at end of year $84,453,213 $26,321,318 ============================== S&P 500 Administrative Index Fund Account ------------------------------- Net investment income: Dividends: Mallinckrodt Group Inc. common stock $ - $ - Mutual funds 504,928 - --------------------------- 504,928 - Interest: Loans to participants 62,084 - Investments 5,157 - --------------------------- 67,241 - --------------------------- Net investment income 572,169 - Net appreciation (depreciation) in fair value of investments 4,142,878 - Contributions: Employer 2,702,598 - Participant 4,823,927 (2,420,626) -------------------------- Total contributions 7,526,525 (2,420,626) Cash and stock distributed to participants (2,233,254) 2,522,657 Transfers of investment direction 897,104 - ------------------------- Net increases 10,905,422 102,031 Net assets available for benefits at beginning of year 16,610,830 5,426,467 -------------------------- Net assets available for benefits at end of year $27,516,252 $5,528,498 ==========================
See notes to financial statements. Investment Plan for Employees of Mallinckrodt Group Inc. Notes to Financial Statements Years ended June 30, 1996 and 1995 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. (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. and certain wholly owned subsidiaries and certain union employees at Mallinckrodt Chemical, Inc. (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 percent 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 pretax basis (salary reduction contributions) cannot exceed 15 percent. Total after-tax and pretax contributions cannot exceed 15 percent of a participant's base monthly salary. The Plan is also funded by employer contributions of not less than 20 percent of a participant's eligible contributions. Contributions that do not exceed 6 percent of a participant's base monthly salary constitute eligible contributions. Mallinckrodt 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 retained earnings. Total employer contributions were equal to 100 percent of participants' eligible contributions for the year ended June 30,1996, and 105 percent for the year ended June 30, 1995. 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, 1995 and 1994, 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, 1996 and 1995. All new contributions to the Fixed Income Fund are invested 75 percent in the Transamerica contract and 25 percent 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, 1996, is 6.85 percent, net of investment management fees. 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 January 1, 1996, is 6.15 percent, net of investment management fees. 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 percent 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 are made on a prorated basis of 75 percent-25 percent 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 percent of the total value of the Transamerica contract on November 1 of the prior year is transferred or distributed for all participants; then the amount elected to be transferred or distributed by each individual will be reduced on a pro rata basis until the total amount transferred by all participants is reduced to 20 percent 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 percent-25 percent basis from the Transamerica and Metropolitan contracts, respectively. 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. 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 participants 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 participant on the loan is credited to the participant's account. Loans are accounted for in the Administrative Account in the accompanying 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. 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, which equals cost plus interest earned to date. 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 percent) 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. 3. 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 1996 1995 -------------------------------- Net assets available for benefits per the financial statements $219,729,095 $178,463,990 Amounts allocated to withdrawing participants (2,423,518) (2,843,814) --------------------------------- Net assets available for benefits per the Form 5500 $217,305,577 $175,620,176 ================================= Amounts allocated to withdrawing participants by fund option are as follows: June 30 1996 1995 --------------------------------- Mallinckrodt stock fund $ 311,845 $ 502,248 Fixed income fund 1,616,629 1,315,000 Balanced fund 223,058 548,790 S&P 500 index fund 271,986 477,776 --------------------------------- $2,423,518 $2,843,814 ================================= The following is a reconciliation of cash and stock distributed to participants per the financial statements to the Form 5500: Year ended June 30, 1996 --------------- Cash and stock distributed to participants per the financial statements $25,851,649 Add amounts allocated to withdrawing participants at June 30, 1996 2,423,518 Less amounts allocated to withdrawing participants at June 30, 1995 (2,843,814) --------------- Cash and stock distributed to participants per the Form 5500 $25,431,353 =============== 4. Federal Income Tax Status On September 26, 1995, the Internal Revenue Service advised that the Plan, as amended, 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). 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. 5. Transactions With Parties-in-Interest The only transactions with parties-in-interest were purchases and sales of assets (including Northern's Collective Short-Term Investment Fund) through The Northern Trust Company. Northern's fees are based on customary and reasonable rates for such services and are paid by the Plan. 6. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts within the financial statements, as well as amounts disclosed in the notes. While the Company uses its best estimates and judgments, actual results could differ from these estimates. Schedule I Investment Plan for Employees of Mallinckrodt Group Inc. Assets Held for Investment As of June 30, 1996 Fair Description Number of Shares Cost Value - --------------------------------------------------------------------- Mallinckrodt Group Inc. Common stock 935,744 $27,989,301 $36,377,048 Vanguard Index Trust - 500 Portfolio 741,121 35,094,120 46,609,120 Vanguard/Wellesley Income Fund 1,725,532 32,311,174 34,062,010 Group fixed annuity contracts: Transamerica Occidental Life Insurance Company: GAC #005100200 67,869,155 67,869,155 Metropolitan Life Insurance Company: GAC #12826 17,084,628 17,084,628 The Northern Trust Company Collective Short-Term Investment Fund 221,130 221,130 Loans to participants 6,900,472 6,900,472 High Valley L.P. note 84-1311 7,686 7,686 -------------------------- Total investments $187,477,666 $209,131,249 ========================== Schedule II Investment Plan for Employees of Mallinckrodt Group Inc. Reportable Transactions Year ended June 30, 1996
8 Purchases Sales Net Gain Description Number Cost Number Proceeds Cost (Loss) - ------------------------------------------------------------------------------- CATEGORY (iii) SERIES OF SECURITIES TRANSACTIONS - ------------------------------------------------ The Northern Trust Co. Collective Short-Term Investment Fund (1) 328 $58,625,935 236 $58,756,991 $58,756,991 $ - Mallinckrodt Group Inc. Common Stock 24 6,711,136 15 3,840,101 2,989,635 850,466 Vanguard Index Trust 500 Portfolio 33 17,418,151 15 3,431,526 2,659,593 771,933 Vanguard/Wellesley Income Fund 30 11,357,300 10 2,180,919 2,022,973 157,946 Group fixed annuity contract with Transamerica Occidental Life and Annuity Company (1): GAC #005100200 33 15,249,380 32 11,173,743 11,173,743 - Group fixed annuity contract with Metropolitan Life Insurance Company (1): GAC #12826 34 4,555,902 19 3,643,534 3,643,534 -
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, 1996. 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 November 22, 1996, with respect to the financial statements and schedules of the Investment Plan for Employees of Mallinckrodt Group Inc. included in this Annual Report (Form 11-K) for the year ended June 30, 1996. November 22, 1996 -----END PRIVACY-ENHANCED MESSAGE-----