-----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, E38dmrT7n5dqleHV4b7wyIj1QxVw7TLeS5wt2a9NIyO2HHkHl8ip1lytv/VwHfpb OhjtI1nKhOLUFkH0v64RsA== 0000950123-98-006353.txt : 19980701 0000950123-98-006353.hdr.sgml : 19980701 ACCESSION NUMBER: 0000950123-98-006353 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980630 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TYCO INTERNATIONAL LTD /BER/ CENTRAL INDEX KEY: 0000833444 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 000000000 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-13836 FILM NUMBER: 98657701 BUSINESS ADDRESS: STREET 1: THE GIBBONS BUILDING STREET 2: 10 QUEENS STREET SUITE 301 CITY: HAMILTON HM 12 BERMU STATE: D0 BUSINESS PHONE: 4412928674 MAIL ADDRESS: STREET 1: C/O TYCO INTERNATIONAL (US) INC STREET 2: ONE TYCO PARK CITY: EXETER STATE: NH ZIP: 03833 FORMER COMPANY: FORMER CONFORMED NAME: ADT LIMITED DATE OF NAME CHANGE: 19930601 11-K 1 FORM 11-K RE: PROFIT SHARING AND SAVINGS PLAN 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------- FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR THE TRANSITION PERIOD FROM _________ TO _________ COMMISSION FILE NUMBER 33-26970 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN (FULL TITLE OF THE PLAN) 1750 CLINT MOORE ROAD BOCA RATON, FL 33431 (ADDRESS OF PLAN) TYCO INTERNATIONAL LTD. (FORMERLY ADT LIMITED) (NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN) THE GIBBONS BUILDING 10 QUEEN STREET, SUITE 301 HAMILTON HM 11, BERMUDA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. ADT Security Services, Inc. Profit Sharing and Savings Plan (Name of Plan) Date: June 30, 1998 By: /s/ Kelly Heffernan ------------------------------------ Clerk: Tyco International (US) Inc. Retirement Committee 3 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN --------- INDEX Pages Financial Statements and Exhibits - --------------------------------- Report of Independent Accountants 1-2 Financial Statements: Statements of Net Assets Available for Benefits with Fund Information as of December 31, 1997 and 1996 3-4 Statements of Changes in Net Assets Available for Benefits with Fund Information for the Years Ended December 31, 1997 and 1996 5-6 Notes to Financial Statements 7-15 Supplemental Schedules: Item 27A - Schedule of Assets Held for Investment Purposes as of December 31, 1997 and 1996 16-17 Item 27D - Schedule of Reportable Transactions for the year ended December 31, 1997 18 Item 27E - Schedule of Non-Exempt Transactions for the year ended December 31, 1997 19 Exhibit I - Consent of Independent Accountants 20 4 REPORT OF INDEPENDENT ACCOUNTANTS To The ADT Security Services, Inc. Profit Sharing and Savings Plan: We have audited the accompanying statements of net assets available for benefits with fund information of the ADT Security Services, Inc. Profit Sharing and Savings Plan (the "Plan") as of December 31, 1997 and 1996 and the related statements of changes in net assets available for benefits with fund information 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 as of December 31, 1997 and 1996, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of 1) assets held for investment purposes as of December 31, 1997 and 1996; 2) reportable transactions for the year ended December 31, 1997; and 3) non-exempt transactions for the year ended December 31, 1997 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The Fund Information in the statements of net assets available for benefits as of December 31, 1997 and 1996 and the statements of changes in net assets available for benefits for the years then ended 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 -1- 5 subjected to the auditing procedures applied in the 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. COOPERS & LYBRAND L.L.P. Denver, Colorado June 30, 1998 -2- 6 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1997
Participant-Directed -------------------- Fund A Fund B Fund C Fund D Fund E ------ ------ ------ ------ ------ ASSETS: Tyco Intermediate Disciplined Cash - ------- International Bond Equity Management Balanced Ltd. Share Fund Fund Fund Fund Fund --------------- ---- ---- ---- ---- Investments, at fair value: Tyco International Ltd. Share Fund (cost $71,876,286) $92,714,977* Participation in Fidelity Intermediate Bond Fund (cost $8,205,171) $8,216,558* Participation in Fidelity Disciplined Equity Fund (cost $19,427,696) $21,306,907* Participation in Dreyfus Cash Management Fund (cost $23,876,661) $22,542,490* Participation in Fidelity Puritan Fund (cost $3,647,409) $3,850,079 Participation in Fidelity ContraFund (cost $9,075,269) Participation in Fidelity Worldwide Fund (cost $2,059,639) Participant Loans Participants' contribution receivable 123,282 15,026 35,032 28,344 9,239 Company contribution receivable 5,241 Participant loan receivable 24,723 3,497 5,203 8,307 615 Participant loan interest receivable ----------- ---------- ----------- ----------- ---------- Total assets $92,868,223 $8,235,081 $21,347,142 $22,579,141 $3,859,933 LIABILITIES: - ----------- Due to Broker for Securities Purchased $ 26,859 $ 18,527 $ 44,867 $ 190,918 $ 9,660 Transfers payable 147,983 (153,604) Administration fees payable 189,718 15,888 33,214 $ 34,323 9,743 ----------- ---------- ----------- ----------- ---------- Total liabilities 364,560 34,415 78,081 71,637 19,403 ----------- ---------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $92,503,663 $8,200,666 $21,269,061 $22,507,504 $3,840,530 =========== ========== =========== =========== ==========
Nonparticipant Participant- Directed Directed ------------------------------------------- -------------- Fund F Fund G Fund A ------ ------ ------ Aggressive Global Participant Tyco International ASSETS: Equity Fund Equity Fund Loans Ltd. Share Fund Total - ------- ----------- ----------- ----- --------------- ----- Investments, at fair value: Tyco International Ltd. Share Fund (cost $71,876,286) $41,545,031* $134,260,008 Participation in Fidelity Intermediate Bond Fund (cost $8,205,171) 8,216,558 Participation in Fidelity Disciplined Equity Fund (cost $19,427,696) 21,306,907 Participation in Dreyfus Cash Management Fund (cost $23,876,661) 1,334,171* 23,876,661 3,850,079 Participation in Fidelity Puritan Fund (cost $3,647,409) $9,604,454 9,604,454 Participation in Fidelity ContraFund (cost $9,075,269) $2,041,612 2,041,612 Participation in Fidelity Worldwide Fund (cost $2,059,639) $7,199,957 7,199,957 Participant Loans Participants' contribution receivable 23,000 7,988 241,911 Company contribution receivable 27,514 32,755 Participant loan receivable 1,191 437 (43,973) -- Participant loan interest receivable 11,127 11,127 ---------- ---------- ---------- ----------- ------------ Total assets $9,628,645 $2,050,037 $7,167,111 $42,906,716 $210,642,029 LIABILITIES: - ----------- Due to Broker for Securities Purchased $ 20,378 $ 6,350 $ 12,639 $ 330,198 Transfers payable 3,610 2,011 -- Administration fees payable 17,156 7,170 89,279 396,491 ---------- ---------- ---------- ----------- ------------ Total liabilities 41,144 15,531 - $ 101,918 726,689 ---------- ---------- ---------- ----------- ------------ NET ASSETS AVAILABLE FOR BENEFITS $9,587,501 $2,034,506 $7,167,111 $42,804,798 $209,915,340 ========== ========== ========== =========== ============
* Investment value represents 5% or more of the total plan net assets available for benefits. -3- The accompanying notes are an integral part of the financial statements 7 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1996
Participant-Directed ---------------------------------------------------------------------------- Fund A Fund B Fund C Fund D Fund E ------ ------ ------ ------ ------ ADT Intermediate Disciplined Cash ASSETS: Limited Bond Equity Management Balanced - ------- Share Fund Fund Fund Fund Fund ---------- ---- ---- ---- ---- Investments, at fair value: ADT Limited Share Fund (cost $42,088,788) $58,210,703* Participation in Fidelity Intermediate Bond Fund (cost $7,999,429) $7,898,693* Participation in Fidelity Disciplined Equity Fund (cost $16,336,798) $16,051,140* Participation in Dreyfus Cash Management Fund (cost $21,432,467) $20,681,767* Participation in Fidelity Puritan Fund (cost $2,343,150) $2,367,484 Participation in Fidelity ContraFund (cost $5,766,012) Participation in Fidelity Worldwide Fund (cost $1,318,387) Participant Loans Due from Broker for Securities Sold 1,049 69,820 7,076 ----------- ---------- ----------- ----------- ---------- Total assets $58,210,703 $7,899,742 $16,051,140 $20,751,587 $2,374,560 LIABILITIES: - ------------ Due to Broker for Securities Purchased $ 33,208 $ 1,845 Administration fees payable 94,171 $ 14,591 27,586 $ 34,269 $ 4,837 ----------- ---------- ----------- ----------- ---------- Total liabilities 127,379 14,591 29,431 $ 34,269 4,837 ----------- ---------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $58,083,324 $7,885,151 $16,021,709 $20,717,318 $2,369,723 =========== ========== =========== =========== ==========
Participant-Directed ------------------------------------------- Nonparticipant Directed Fund F Fund G Fund A ------ ------ ------ Aggressive Global Participant ADT Limited ASSETS: Equity Fund Equity Fund Loans Share Fund Total - ------- ----------- ----------- ----- ---------- ----- Investments, at fair value: ADT Limited Share Fund (cost $42,088,788) $22,664,797* $ 80,875,500 Participation in Fidelity Intermediate Bond Fund (cost $7,999,429) 7,898,693 Participation in Fidelity Disciplined Equity Fund (cost $16,336,798) 16,051,140 Participation in Dreyfus Cash Management Fund (cost $21,432,467) 750,700* 21,432,467 Participation in Fidelity Puritan Fund (cost $2,343,150) 2,367,484 Participation in Fidelity ContraFund (cost $5,766,012) $6,086,289 6,086,289 Participation in Fidelity Worldwide Fund (cost $1,318,387) $1,388,754 1,388,754 Participant Loans $4,955,194 4,955,194 Due from Broker for Securities Sold 77,945 ---------- ---------- ---------- ----------- ------------ Total assets $6,086,289 $1,388,754 $4,955,194 $23,415,497 $141,133,466 LIABILITIES: - ----------- Due to Broker for Securities Purchased $ 8,810 $ 5,265 $ 14,232 $ 63,360 Administration fees payable 9,534 2,666 42,742 230,396 ---------- ---------- ---------- ----------- ------------ Total liabilities 18,344 7,931 - $ 56,974 293,756 ---------- ---------- ---------- ----------- ------------ NET ASSETS AVAILABLE FOR BENEFITS $6,067,945 $1,380,823 $4,955,194 $23,358,523 $140,839,710 ========== ========== ========== =========== ============
* Investment value represents 5% or more of the total plan net assets available for benefits. -4- The accompanying notes are an integral part of the financial statements 8 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1997
Participant-Directed -------------------------------------------------------------------------- Fund A Fund B Fund C Fund D Fund E ------ ------ ------ ------ ------ Tyco Intermediate Disciplined Cash International Bond Equity Management Balanced Ltd. Share Fund Fund Fund Fund Fund --------------- ---- ---- ---- ---- Additions: Contributions: Participants $ 6,200,746 $ 759,482 $ 1,468,608 $ 1,327,893 $ 442,983 Company 311,688 Rollover 21,026 9,594 18,832 6,001 19,612 ----------- ---------- ----------- ----------- ---------- Total contributions 6,533,460 769,076 1,487,440 1,333,894 442,595 ----------- ---------- ----------- ----------- ---------- Income from investments: Interest 1,241,896 Dividends Net appreciation in fair value of investments 44,695,475 590,078 5,324,596 644,257 ----------- ---------- ----------- ----------- ---------- Total income from investments 44,695,475 590,078 5,324,596 1,241,896 644,257 ----------- ---------- ----------- ----------- ---------- Total additions 51,228,935 1,359,154 6,812,036 2,575,790 1,086,852 ----------- ---------- ----------- ----------- ---------- Deductions: Distributions and withdrawals (6,419,581) (1,116,843) (2,005,871) (5,050,545) (350,755) Administration fees (189,718) (23,447) (45,067) (56,478) (12,534) ----------- ---------- ----------- ----------- ---------- Total deductions (6,609,299) (1,140,290) (2,050,938) (5,107,023) (363,289) Transfers between funds (8,652,966) 124,300 541,809 4,570,411 810,199 Participant loans (1,546,331) (27,649) (55,555) (248,992) (62,955) ----------- ---------- ----------- ----------- ---------- INCREASE IN NET ASSETS 34,420,339 315,515 5,247,352 1,790,186 1,470,807 ----------- ---------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 58,083,324 7,885,151 16,021,709 20,717,318 2,369,723 ----------- ---------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 $92,503,663 $8,200,666 $21,269,061 $22,507,504 $3,840,530 =========== ========== =========== =========== ==========
Nonparticipant Participant-Directed Directed ----------------------------------------- -------------- Fund A Fund F Fund G ------- ------ ------ Tyco Aggressive Global Participant International Ltd. Total Equity Fund Equity Fund Loans Share Fund ----- ----------- ----------- ----- ---------- Additions: Contributions: Participants $ 948,617 $ 378,621 $ 11,506,950 Company $ 1,605,590 1,917,278 Rollover 12,179 10,994 98,238 ---------- ---------- ---------- ----------- ------------- Total contributions 960,796 389,615 $ 1,605,590 13,522,466 ---------- ---------- ---------- ----------- ------------- Income from investments: Interest $ 473,795 473,795 Dividends 1,241,896 Net appreciation in fair value of investments 1,632,624 179,391 64,192 22,805,242 75,935,855 ---------- ---------- ---------- ----------- ------------- Total income from investments 1,632,624 179,391 537,987 22,805,242 77,651,546 ---------- ---------- ---------- ----------- ------------- Total additions 2,593,420 569,006 537,987 24,410,832 91,174,012 ---------- ---------- ---------- ----------- ------------- Deductions: Distributions and withdrawals (1,037,385) (362,238) (431,380) (4,875,278) (21,649,876) Administration fees (22,536) (9,447) (89,279) (448,506) ---------- ---------- ---------- ----------- ------------- Total deductions (1,059,921) (371,685) (431,380) (4,964,557) (22,098,382) Transfers between funds 2,114,409 491,838 Participant loans (128,532) (35,476) 2,105,310 - ---------- ---------- ---------- ----------- ------------- INCREASE IN NET ASSETS 3,519,556 653,683 2,211,917 19,446,275 69,075,630 ---------- ---------- ---------- ----------- ------------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 6,067,945 1,380,823 4,955,194 23,358,523 140,839,710 ---------- ---------- ---------- ----------- ------------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 $9,587,501 $2,034,506 $7,167,111 $42,804,798 $ 209,915,340 ========== ========== ========== =========== =============
-5- The accompanying notes are an integral part of the financial statements. 9 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1996
Participant-Directed ------------------------------------------------------------------------ Fund A Fund B Fund C Fund D Fund E ------ ------ ------ ------ ------ ADT Intermediate Disciplined Cash Limited Bond Equity Management Balanced Share Fund Fund Fund Fund Fund ---------- ---- ---- ---- ---- Additions: Contributions: Participants $ 5,818,199 $ 871,228 $ 1,555,467 $ 1,555,324 $ 257,631 Company 499,388 Rollover 37,697 617 25,300 386 17,128 ----------- ---------- ----------- ----------- ---------- Total contributions 6,355,284 871,845 1,580,767 1,555,710 274,759 ----------- ---------- ----------- ----------- ---------- Income from investments: Interest 332 Dividends 1,029,928 Net appreciation in fair value of investments 19,325,240 332,338 4,033,775 102,608 267,040 ----------- ---------- ----------- ----------- ---------- Total income from investments 19,325,240 332,338 4,033,775 1,132,868 267,040 ----------- ---------- ----------- ----------- ---------- Total additions 25,680,524 1,204,183 5,614,542 2,688,578 541,799 ----------- ---------- ----------- ----------- ---------- Deductions: Distributions and withdrawals (5,290,968) (1,757,139) (1,976,422) (4,651,292) (250,633) Administration fees (141,131) (21,671) (40,209) (49,602) (6,270) ----------- ---------- ----------- ----------- ---------- Total deductions (5,432,099) (1,778,810) (2,016,631) (4,700,894) (256,903) Transfers between funds (68,189) (1,882,885) (1,960,105) (25,226) 1,247,009 Participant loans (1,457,813) (157,454) (312,313) (323,248) (29,376) ----------- ---------- ----------- ----------- ---------- INCREASE (DECREASE) IN NET ASSETS 18,722,423 (2,614,966) 1,325,493 (2,360,790) 1,502,529 ----------- ---------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1995 39,360,901 10,500,117 14,696,216 23,078,108 867,194 ----------- ---------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 $58,083,324 $7,885,151 $16,021,709 $20,717,318 $2,369,723 =========== ========== =========== =========== ==========
Nonparticipant Participant- Directed Directed ------------------------------------------- -------------- Fund F Fund G Fund A ------ ------ ------ Aggressive Global Participant ADT Limited Total Equity Fund Equity Fund Loans Share Fund ----- ----------- ----------- ----- ---------- Additions: Contributions: Participants $ 597,151 $ 171,219 $ 10,826,219 Company $ 1,372,264 1,871,652 Rollover 103,942 61,374 246,444 ---------- ---------- ---------- ----------- ------------- Total contributions 701,093 232,593 $ 1,372,264 12,944,315 ---------- ---------- ---------- ----------- ------------- Income from investments: Interest $ 328,537 328,869 Dividends 1,029,928 Net appreciation in fair value of investments 1,120,240 144,083 8,609,527 33,934,851 ---------- ---------- ---------- ----------- ------------- Total income from investments 1,120,240 144,083 328,537 8,609,527 35,293,648 ---------- ---------- ---------- ----------- ------------- Total additions 1,821,333 376,676 328,537 9,981,791 48,237,963 ---------- ---------- ---------- ----------- ------------- Deductions: Distributions and withdrawals (534,217) (176,592) (196,972) (3,084,839) (17,919,074) Administration fees (13,563) (3,465) (60,485) (336,396) ---------- ---------- ---------- ----------- ------------- Total deductions (547,780) (180,057) (196,972) (3,145,324) (18,255,470) Transfers between funds 2,255,622 817,990 (384,216) - Participant loans (85,953) (26,764) 2,392,921 - ---------- ---------- ---------- ----------- ------------- INCREASE (DECREASE) IN NET ASSETS 3,443,222 987,845 2,524,486 6,452,251 29,982,493 ---------- ---------- ---------- ----------- ------------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1995 2,624,723 392,978 2,430,708 16,906,272 110,857,217 ---------- ---------- ---------- ----------- ------------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 $6,067,945 $1,380,823 $4,955,194 $23,358,523 $ 140,839,710 ========== ========== ========== =========== =============
-6- The accompanying notes are an integral part of the financial statements 10 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION ---------------- The ADT Security Services, Inc. Profit Sharing and Savings Plan (the "Plan") is administered through a trustee, (the "Trustee"), currently Mellon Bank, and by a committee consisting of employees of ADT Security Services, Inc. (the "Company"). Under the provisions of the Plan, eligible employees may make participating contributions from 1% to 8% of total compensation (including commissions, bonuses and overtime pay), which are eligible for the Company's matching contributions. Such contributions may be made on an after-tax basis or a before-tax basis pursuant to Section 401(k) of the Internal Revenue Code; before-tax contributions being limited to 1% to 4% of compensation. Participants may also elect to make additional after-tax contributions of up to an additional 5% of their compensation, which are not eligible for the Company's matching contributions. The Company makes contributions to the Trustee, of an amount equal to 20% of the aggregate participating contributions (up to 8% of each participant's compensation) made by the participants (the "basic" contribution). Effective January 1, 1995, the Plan was amended to allow the Company, in its sole discretion, to make a supplemental contribution, in any percentage, subject to the maximum limit or elect to make no supplemental contribution. The maximum supplemental contribution is 80% of the aggregate participating contributions of the employees made during the year. The Company made no supplemental contributions for the years ended December 31, 1997 and 1996. On July 2, 1997, a wholly-owned subsidiary of what was formerly called ADT Limited ("ADT") merged with Tyco International Ltd. (the "Former Tyco"). Upon consummation of the merger, ADT (the surviving corporation) changed its name to Tyco International Ltd. Shareholders of ADT, through a reverse stock split, received 0.48133 shares of Tyco International Ltd. common stock for each share of ADT common stock outstanding. Prior to July 2, 1997, investments in Fund A - ADT Limited Share Fund were invested in common shares of ADT Limited. Effective with the merger on July 2, 1997, the investment in common shares of ADT Limited were exchanged for common shares of Tyco International Ltd. and Fund A is renamed, "Fund A - Tyco International Ltd Share Fund". The other investment options remained the same and are as follows: Fund B - Intermediate Bond Fund is invested in Fidelity's Intermediate Bond Fund which consists of investments in fixed income obligations in domestic and foreign debt securities, which have an average maturity of three to ten years; Fund C - Equity Fund is invested in Fidelity's Disciplined Equity Fund which consists of investments in domestic common stocks in such industries as energy, banking, health, technology, utilities and consumer products; Fund D - Cash Management Fund is invested in the Dreyfus Cash Management Fund which consists of investments in short-term money market obligations such as U.S. Government securities, certificates of deposit, time deposits, bankers' acceptances, repurchase agreements, commercial paper and other short-term corporate obligations; Fund E - Balanced Fund is invested 7 11 NOTES TO FINANCIAL STATEMENTS, Continued ------------------ 1. PLAN DESCRIPTION, Continued ----------------- in Fidelity's Puritan Fund which consists of investments in common stocks and preferred stocks in such industries as energy, finance, durables, retail, basic industries and investments in bonds consisting of investments in U.S. Government and government agency securities, corporate bonds, mortgage securities and foreign bonds; Fund F - Aggressive Equity Fund is invested in Fidelity's Contrafund which consists of investments in common stocks and preferred stocks, generally in small and medium-sized companies, in such industries as finance, technology, energy, durables, and basic industries; Fund G - Global Equity is invested in Fidelity's Worldwide Fund which consists of investments in equity securities issued by companies of all sizes worldwide, in such industries as finance, basic industries, retail, durables, construction and real estate, primarily in such countries as the U.S. the Netherlands, Germany, Japan, France, Switzerland, and Finland. The funds are collectively referred to as the 'Trust Fund', hereafter. Participants may change their investment options, contribution percentages, and transfer account balances on an unlimited basis. The percentage contributed to each fund must be in increments of 10%. The total number of participants in each fund at December 31, 1997 is as follows:
Fund A - Tyco International, Ltd. Share Fund 6,234 Fund B - Intermediate Bond Fund 1,919 Fund C - Equity Fund 2,552 Fund D - Cash Management Fund 2,906 Fund E - Balance Fund 784 Fund F - Aggressive Equity Fund 1,335 Fund G - Global Equity Fund 756
The total number of participants in the Plan was 6,365 as of December 31, 1997 which is less than the sum of the number of participants shown above because participants have invested their contributions in more than one fund. Each participant's account is credited with the participant's contributions. The Company's 20% basic contributions, and the Company's supplemental contributions, if any, were invested in the ADT Limited Share Fund prior to July, 1997 and in the Tyco International Ltd. Share Fund thereafter and credited to the participant's account. Pension eligible participants are entitled to direct Company contributions. Effective January 1, 1995, the Plan was amended to limit the contributions of "Highly Compensated" associates, as defined under IRS regulations, to the 8% maximum participating contributions only. Plan earnings and losses in each fund are allocated to participant accounts relative to the participant's account balance in each respective fund. 8 12 NOTES TO FINANCIAL STATEMENTS, Continued -------------------- 1. PLAN DESCRIPTION, Continued ----------------- A loan provision is available to participants in which an active participant may borrow from the participant's vested account balance a mimimum of $1,000 up to 50% of the vested account balance. The maximum amount that can be borrowed is $50,000. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Participant Loan Fund. Loan terms range from 1-5 years or up to 15 years for home purchase loans. The loans are collateralized by the balance in the participants' account and bear interest at prime plus 1% at the beginning of each month and are fixed for the duration of the loan. Principal and interest is paid ratably through payroll deductions. The Plan allows newly hired associates to contribute to the Plan only after they have completed one year of employment service with ADT Security Services, Inc. or one of its subsidiaries or affiliates. Temporary employees are not eligible to participate in the Plan. Termination of service for any reason other than retirement, death, disability or layoff results in the forfeiture of the nonvested portion of a participant's account. Under the terms of the Plan, forfeitures are used to reduce subsequent Company contributions. Forfeitures for 1997 and 1996 were $214,303 and $201,975, respectively. A participant is fully vested at all times in the amount credited to the Plan account attributable to the participant's own contributions. A participant becomes fully vested in the amount attributable to Company contributions after three years of service, as defined in the Plan document. Participants should refer to the Plan document for a more complete description of the Plan's provisions. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ------------------------------------------ Method of Accounting -------------------- The financial statements of the Plan have been prepared on the accrual basis of accounting. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets available for benefits during the reporting period. Actual results could differ from those estimates. 9 13 NOTES TO FINANCIAL STATEMENTS, Continued -------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued ------------------------------------------- Risks and Uncertainties ----------------------- The Plan provides for various investment options in a combination of mutual funds and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits. Security Transactions and Related Investment Income --------------------------------------------------- Security transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date and interest income is accrued as earned. Fees and Expenses ----------------- All taxes, expenses, fees and charges of any kind in respect of the Trust Fund and most reasonable expenses of administering the Plan shall be paid by the Plan, unless the Company, at its discretion, elects to pay such taxes, expenses, fees or charges. All administrative fees, other than such costs as direct labor and related support costs, of the Plan were paid by the Plan during 1997 and 1996. Valuation of Investment Assets ------------------------------ The Plan's investments are stated at fair value. Investments in Tyco International Ltd. common stock are valued based on the closing price of the stock at December 31, 1997 and investments in ADT Limited common stock are valued based on the closing price of the stock at December 31, 1996 as determined by the New York Stock Exchange. Investments in pooled funds of the Trustee are valued at fair value as reported by the Trustee. Quoted market prices are used to value investments in the mutual funds of Fidelity Investments. These investments are valued every business day by the mutual fund manager based on the fund's share price called the net asset value. Investments in the Dreyfus Cash Management Fund are valued at fair value as reported by the Trustee. Derivative Financial Instruments -------------------------------- The Plan has only limited involvement with derivative financial instruments and does not use them for trading purposes. During 1997 and 1996, derivative investments comprised an immaterial portion of the total net assets available for benefits. 10 14 NOTES TO FINANCIAL STATEMENTS, Continued ------------------ 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued ------------------------------------------ Net Appreciation (Depreciation) in the Fair Value of Investments ---------------------------------------------------------------- The Plan presents in the statements of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains (losses) and the unrealized appreciation (depreciation) on those investments. 3. VALUATION OF PARTICIPANTS' ACCOUNTS ----------------------------------- The participants' accounts are valued at fair value at the close of each business day by the Plan Trustee on a cash and share equivalent basis. 4. INVESTMENTS ----------- The number of shares and carrying value per share at December 31, 1997 and 1996 were as follows:
1997 1996 ---- ---- Fund A: Tyco International Share Fund - ------------------------------------- Units 6,862,126* 7,784,288 Unit Value $ 19.74 $ 10.48 Cash $ 135,812 $ 46,862 Fund B: Intermediate Bond Fund - ------------------------------ Shares 807,166 780,582 Market Value $ 10.17 $ 10.08 Cash $ 7,680 $ 30,426 Fund C: Disciplined Equity Fund - ------------------------------- Shares 823,095* 727,728 Market Value $ 25.86 $ 22.04 Cash $ 21,670 $ 12,015 Fund D: Cash Management Fund - ---------------------------- Shares 22,529,695* 20,673,913 Market Value $ 1.00 $ 1.00 Cash $ 12,795 $ 7,854
11 15 NOTES TO FINANCIAL STATEMENTS, Continued ----------------- 4. INVESTMENTS, Continued -----------
1997 1996 ---- ---- Fund E: Balanced Fund - --------------------- Shares 198,518 137,234 Market Value $ 19.38 $ 17.24 Cash $ 2,800 $ 1,570 Fund F: Aggressive Equity Fund - ------------------------------ Shares 205,849 144,395 Market Value $ 46.63 $ 42.15 Cash $ 5,715 $ 40 Fund G: Global Equity Fund - -------------------------- Shares 127,908 90,236 Market Value $ 15.95 $ 15.39 Cash $ 1,479 $ 22
* Represents at least 5% of net assets available for benefits at December 31, 1997. The Trustee maintains a minimal amount of cash within each fund. The cash balances arise from the timing of the securities transactions, and are not held for extensive amounts of time. 5. FEDERAL INCOME TAX STATUS ------------------------- On November 21, 1995, a favorable updated determination letter was received from the IRS stating that the Plan is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code and, therefore, the trust established under the Plan is exempt from Federal income tax under Section 501(a) of the Code. As long as the Plan is qualified under the tax laws, participants will not be taxed currently on Company contributions and before tax participant contributions to the Plan or on income earned by the Trust Fund. When a participant, beneficiary or estate of a participant receives a distribution under the Plan, such distribution is taxable, except to the extent such distribution represents the return of the participant's own after-tax contributions. The tax treatment of the balance of such distribution depends on the form and time of payment. 6. PRIORITIES UPON TERMINATION OF THE PLAN --------------------------------------- The Company can amend the Plan at any time and any amendment may be given retroactive effect as the Company may determine, except for the return of Company contributions under certain circumstances. The assets of the Plan must be used exclusively for the benefit of participants and their beneficiaries, and no participant may be deprived of any vested interest under the Plan. The Plan may be terminated or contributions under the Plan may be permanently discontinued at any time by the Company, in which event the Trustee will continue to act until the Plan's assets shall have been distributed in accordance with the Plan. Upon termination or discontinuance of the Plan, participants shall fully vest in the Plan. 12 16 NOTES TO FINANCIAL STATEMENTS, Continued ------------------- 7. 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:
December 31, December 31, 1997 1996 ---- ---- Net assets available for benefits per the financial statements $ 209,915,340 $ 140,839,710 Amounts allocated to withdrawing participants (11,888) (26,595) ------------- ------------- Net assets available for benefits per the Form 5500 $ 209,903,452 $ 140,813,115 ============= =============
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
December 31, December 31, 1997 1996 ---- ---- Benefits paid to participants per the financial statements $ 21,649,876 $ 17,919,074 Add: Amounts allocated to withdrawing participants at December 31, 1997 and 1996 11,888 26,595 Less: Amounts allocated to withdrawing participants at December 31, 1996 and 1995 (26,595) (61,235) ------------ ------------ Benefits paid to participants per the Form 5500 $ 21,635,169 $ 17,884,434 ============ ============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 1997 and 1996 but not yet paid as of that date. The Plan's financial statements reflect amounts allocated to withdrawing participants for benefit claims when paid (see Note 2). 13 17 NOTES TO FINANCIAL STATEMENTS, Continued --------------------- 8. RELATED PARTY TRANSACTIONS --------------------------- For the Plan year ended December 31, 1996 and prior to July, 1997, Fund A - ADT Limited Share Fund invested in common shares of ADT Limited, the ultimate parent of the Company. As such, these transactions qualified as parties-in-interest. The Plan purchased common shares of ADT Limited amounting to $3,841,468 during 1996. The Plan sold common shares of ADT Limited amounting to $8,664,990 and $2,588,148 during 1997 and 1996, respectively. On July 2, 1997, a wholly-owned subsidiary of what was formerly called ADT Limited (`ADT') merged with Tyco International, Ltd. Upon consummation of the merger, ADT (the surviving corporation) changed its name to Tyco International Ltd. Shareholders of ADT, through a reverse stock split, received 0.48133 shares of the Tyco International common stock for each share of ADT common stock outstanding. Effective with the merger on July 2, 1997, the investment in common shares of ADT Limited were exchanged for common shares of Tyco International Ltd. As such, these transactions qualify as parties-in-interest. During 1997, the Plan purchased common shares of Tyco International Ltd. Amounting to $3,228,343 and sold common shares of Tyco International Ltd. amounting to $5,661,464. 9. SUBSEQUENT EVENTS ------------------ On March 6, 1998, the Tyco Retirement Committee voted to merge the assets of the ADT Security Systems, Inc. Profit Sharing and Savings Plan with the assets of the Tyco International (US) Inc. Retirement Savings and Investment Plan IV as of midnight, December 31, 1998. The Tyco International (US) Inc. Retirement Savings and Investment Plan IV is a defined contribution plan sponsored by Tyco International (US) Inc. and is available to certain salaried and non-union hourly employees of Tyco affiliated companies. The affiliated companies that participate in the Plan are wholly-owned subsidiaries of Tyco. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. The Plan participates in the Tyco International (US) Inc. Retirement Savings & Investment Plans Master Trust with other Tyco sponsored defined contribution plans. Selected plan provisions are described as follows. Plan participants must be at least eighteen years old and have completed 90 days of service with the participating employer. Participants make a minimum voluntary contribution and may increase their voluntary contributions up to a certain limit of compensation. Certain voluntary contributions are matched by the Company. Certain additional employer contributions are made based on the participants' years of services, in accordance with the terms of the Plan agreement. Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company's contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100 percent vested after five years of credited service. Amounts forfeited prior to vesting are used to pay Plan expenses. Plan participants are able to direct the investment of their Plan holdings into the following investment options on a daily basis: Stable Value Fund is invested in Interest Income Fund I which is comprised of insurance contracts and common trust funds; Balanced Fund is invested in Fidelity's Puritan Fund; Bond Fund is invested in The Bond Fund of America; Growth and Income Fund is invested in Neuberger and Berman's Guardian Trust Fund; Growth Fund is invested in Fidelity's Growth Fund; and Company Stock Fund is invested in Tyco International Ltd. Stock Fund. In addition to the above investment options, the Tyco Retirement Committee approved the addition of new investment options effective August 1, 1998, as follows: Growth Opportunistic Fund will invest in PIMCO's Capital Appreciation Fund; Growth Small Cap Fund will invest in Franklin's Small Cap Fund; Growth Index Fund will invest in Fidelity's US Spartan Equity Index Fund; International Equities Fund will invest in Templeton's Foreign Fund; and Asset Allocation Fund will invest in Fidelity's Freedom Funds. 14 18 9. SUBSEQUENT EVENTS, Continued ----------------- Participants are allowed to borrow from their account. The minimum amount that a participant may borrow is $1,000. The maximum amount that a participant may borrow is the least of: (a) 100% of participant contributions plus earnings thereon; (b) 50% of the participant's vested balance; or (c) $50,000 less the highest loan balance outstanding in the previous twelve months. The interest rate on loans will be the prime rate as published by the Wall Street Journal at the time of the loan plus 1%. Loans must be repaid by payroll deductions and upon termination of service, all loans must be repaid in full. 15 19 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN Item 27A - Schedule of Assets Held for Investment Purposes
Fair Value Cost ------------------------------- ------------------------------ December 31, December 31, December 31, December 31, 1997 1996 1997 1996 ---- ---- ---- ---- FUND A: Tyco International Ltd. Share Fund (rates of return for the six months ended December 31, 1997 were 30.49%) ADT Limited Share Fund (rates of return for the six months ended June 30, 1997 were 42.49% and for the year ended December 31, 1996 were 50.44%) $134,260,008 $80,875,500 $71,876,286 $42,088,788 Dreyfus Cash Management Class A Fund (Effective interest rate for the years ended December 31, 1997 and 1996 were 5.56% and 5.42%, respectively) 1,334,171 750,700 1,334,171 750,700 ------------ ----------- ----------- ----------- $135,594,179 $81,626,200 $73,210,457 $42,839,488 ============ =========== =========== =========== FUND B: Fidelity Commonwealth Trust Intermediate Bond Fund (rate of return for the years ended December 31, 1997 and 1996 were 7.55% and 4.3%, respectively) $ 8,216,558 $ 7,898,693 $ 8,205,171 $ 7,999,429 FUND C: Fidelity Capital Trust Disciplined Equity Fund (rate of return for the years ended December 31, 1997 and 1996 were 33.36% and 29.69%, respectively) $ 21,306,907 $16,051,140 $19,427,696 $16,336,798 FUND D: Dreyfus Cash Management Class A Fund (effective interest rate for the years ended December 31, 1997 and 1996 were 5.56% and 5.42%, respectively) $ 22,542,490 $20,681,767 $22,542,490 $20,681,767 FUND E: Fidelity Puritan Fund (rate of return for the years ended December 31, 1997 and 1996 were 21.71% and 17.97%, respectively) $ 3,850,079 $ 2,367,484 $ 3,647,409 $ 2,343,150 FUND F: Fidelity ContraFund Inc. (rate of return for the years ended December 31, 1997 and 1996 were 22.84% and 31.16%, respectively) $ 9,604,454 $ 6,086,289 $ 9,075,269 $ 5,766,012 FUND G: Fidelity Investment Trust Worldwide Fund (rate of return for the years ended December 31, 1997 and 1996 were 12.15% and 18.91%, respectively) $ 2,041,612 $ 1,388,754 $ 2,059,639 $ 1,318,387
16 20 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN Item 27A - Schedule of Assets Held for Investment Purposes, Continued
Fair Value Cost ------------------------------ ------------------------------ December 31, December 31, December 31, December 31, 1997 1996 1997 1996 ---- ---- ---- ---- PARTICIPANT LOANS: ADT Participant Loans (interest rate of 9.25% - 9.50% for the year ended December 31, 1997 and 9.25% - 9.50% for the year ended December 31, 1996 $7,199,957 $4,955,194 -- --
17 21 ADT SECURITY SERVICES, INC. PROFIT SHARINGS AND SAVINGS PLAN Item 27D - Schedule of Reportable Transactions for the year ended December 31, 1997 ------------------
Purchases Sales ------------------------------- ----------------------------------------------------- Number of Transaction Expenses Number of Transaction NetGain Description of Asset Transactions Amount Incurred Transaction Amount Cost (Loss) - -------------------- ------------ ------ -------- ----------- ------ ---- ------ Series Transactions: ADT Limited Share Fund -- -- -- 10 $ 8,664,990 $ 3,312,096 $5,352,894 Tyco International Ltd, MA Common Stock 10 $ 3,228,343 $2,837 5 $ 5,661,464 $ 1,718,742 $3,942,722 Dreyfus Cash Management Class A Fund 258 $41,166,200 -- 300 $38,730,766 $38,730,766 -- Fidelity Capital Trust Disciplined Equity Fund 110 $ 7,842,607 -- 140 $ 5,371,708 $ 5,371,708 -- Fidelity ContraFund, Inc. 149 $ 7,250,290 -- 101 $ 4,476,291 $ 4,476,291 --
18 22 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN Item 27E - Schedule of Non-Exempt Transactions for the year ended December 31, 1997
Purchases Sales --------- --------------------------- Name Affiliation Cost Sales Price Gain/Loss Expenses - ---- ----------- ---- ----------- --------- -------- ADT, Ltd. Share Fund Ultimate Parent of ADT Security Services, Inc. (Plan Administrator) $37,274,051 - - Tyco International Ltd. Ultimate Parent New MA Common Stock of ADT Security Services, Inc. (Plan Administrator) $37,274,051 - - -
19 EX-99.I 2 CONSENT OF INDEPENDENT ACCOUNTANTS 1 CONSENT OF INDEPENDENT ACCOUNTANTS ADT Security Services, Inc. Profit Sharing and Savings Plan: We consent to the incorporation by reference in the Registration Statement of ADT Security Services, Inc. Profit Sharing and Savings Plan on Form S-8 (File No. 33-26970) of our report dated June 30, 1998 on our audits of the financial statements and financial statement schedules of ADT Security Systems, Inc. Profit Sharing and Savings Plan as of and for the years ended December 31, 1997 and 1996, which report is included in this Annual Report on Form 11-K. Coopers & Lybrand, L.L.P Denver, Colorado June 30, 1998 19 -----END PRIVACY-ENHANCED MESSAGE-----