-----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, AKJ36lv/6h5Iay3kATQZdbjmZ5Z+aJCArK8iNXFBxdAOhqBxS+z3pNkQBleFXQku 4tK0AtMB9wUeBrtYdV7fTw== /in/edgar/work/20000627/0000950123-00-006039/0000950123-00-006039.txt : 20000920 0000950123-00-006039.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950123-00-006039 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCK & CO INC CENTRAL INDEX KEY: 0000064978 STANDARD INDUSTRIAL CLASSIFICATION: [2834 ] IRS NUMBER: 221109110 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-03305 FILM NUMBER: 661197 BUSINESS ADDRESS: STREET 1: ONE MERCK DR STREET 2: P O BOX 100 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 BUSINESS PHONE: 9084234044 MAIL ADDRESS: STREET 1: ONE MERCK DR STREET 2: PO BOX 100 WS3AB-05 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 10-K/A 1 e10-ka.txt MERCK AND CO 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 2000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ------------------ FORM 10-K/A AMENDMENT TO FORM 10-K ANNUAL REPORT Filed pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 ------------------ MERCK & CO., INC. P.O. BOX 100 WHITEHOUSE STATION, NEW JERSEY 08889-0100 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its annual report on Form 10-K for the fiscal year ended December 31, 1999 as set forth below: 1. Add Exhibit Numbers 99(a), 99(b) and 99(c) as follows:
EXHIBIT METHOD OF NUMBER DESCRIPTION FILING 99(a) -- Financial statements and exhibits Filed with this Form 10-K/A Amendment required by Form 11-K Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the Merck & Co., Inc. Employee Savings and Security Plan for the fiscal year ended December 31, 1999 99(b) -- Financial statements and exhibits Filed with this Form 10-K/A Amendment required by Form 11-K Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the Merck & Co., Inc. Employee Stock Purchase and Savings Plan for the fiscal year ended December 31, 1999 99(c) -- Financial statements and exhibits Filed with this Form 10-K/A Amendment required by Form 11-K Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the Merck Puerto Rico Employee Savings and Security Plan for the fiscal year ended December 31, 1999
2 3 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. Dated: June 27, 2000 MERCK & CO., INC. By RAYMOND V. GILMARTIN (CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER) By /s/CELIA A. COLBERT CELIA A. COLBERT (ATTORNEY-IN-FACT) PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS AMENDMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES TITLE DATE ---------- ----- ---- RAYMOND V. GILMARTIN Chairman of the Board, President and Chief Executive Officer; Principal Executive Officer; Director JUDY C. LEWENT Senior Vice President and Chief Financial Officer; Principal Financial Officer RICHARD C. HENRIQUES, JR. Vice President, Controller; Principal Accounting Officer H. BREWSTER ATWATER, JR. DEREK BIRKIN LAWRENCE A. BOSSIDY WILLIAM G. BOWEN CAROLYNE K. DAVIS LLOYD C. ELAM CHARLES E. EXLEY, JR. Directors June 27, 2000 WILLIAM B. HARRISON, JR. WILLIAM N. KELLEY EDWARD M. SCOLNICK ANNE M. TATLOCK SAMUEL O. THIER DENNIS WEATHERSTONE
CELIA A. COLBERT, BY SIGNING HER NAME HERETO, DOES HEREBY SIGN THIS DOCUMENT PURSUANT TO POWERS OF ATTORNEY DULY EXECUTED BY THE PERSONS NAMED, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS AN EXHIBIT TO FORM 10-K, ON BEHALF OF SUCH PERSONS, ALL IN THE CAPACITIES AND ON THE DATE STATED, SUCH PERSONS INCLUDING A MAJORITY OF THE DIRECTORS OF THE COMPANY. By /s/CELIA A. COLBERT CELIA A. COLBERT (ATTORNEY-IN-FACT) 3 EX-99.A 2 ex99-a.txt FINANCIAL STATEMENTS ON 11-K 1 EXHIBIT 99(a) FINANCIAL STATEMENTS AND EXHIBITS REQUIRED BY FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 1-3305 --------------------- MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN (Full title of the plan) MERCK & CO., INC. P.O. BOX 100 WHITEHOUSE STATION, NEW JERSEY 08889-0100 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Merck & Co., Inc.: We have audited the accompanying statement of net assets available for benefits of the Merck & Co., Inc. Employee Savings and Security Plan (the "Plan") as of December 31, 1999 and 1998, and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. These financial statements and the schedule referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and the schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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, 1999 and 1998, and the changes in its net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes is presented for purposes of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP New York, New York June 12, 2000 1 3 MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, ------------------------------- 1999 1998 -------------- -------------- Assets: Investments at market value............................... $2,907,375,673 $2,808,322,824 -------------- -------------- Receivables: Employer's contribution................................. 3,848,031 3,461,459 Participants' contributions............................. 8,844,613 7,883,239 Accrued interest and dividends.......................... 7,380,499 6,753,854 -------------- -------------- Total receivables..................................... 20,073,143 18,098,552 -------------- -------------- Net assets available for benefits........................... $2,927,448,816 $2,826,421,376 ============== ==============
The accompanying notes to financial statements are an integral part of this financial statement. 2 4 MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999 ----------------- Additions to net assets attributed to: Investment income (loss): Net depreciation in market value of investments......... ($ 27,238,973) Interest................................................ 3,009,430 Dividends............................................... 77,186,265 -------------- Total investment income............................... 52,956,722 -------------- Contributions to the Plan: By participants......................................... 130,380,972 By the employer......................................... 49,151,005 -------------- Total contributions................................... 179,531,977 -------------- Total additions....................................... 232,488,699 -------------- Deductions from net assets attributed to: Benefits paid to participants............................. (134,907,873) -------------- Net reallocations........................................... 3,446,614 -------------- Total deductions and net reallocations among Plans.... (131,461,259) -------------- Net increase........................................ 101,027,440 Net assets available for benefits Beginning of year................................... 2,826,421,376 -------------- End of year......................................... $2,927,448,816 ==============
The accompanying notes to financial statements are an integral part of this financial statement. 3 5 MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS A. DESCRIPTION OF PLAN: The following description of the Merck & Co., Inc. Employee Savings and Security Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. 1. GENERAL The Plan was designed to provide an easy, economical way for employees to become stockholders of Merck & Co., Inc. (the "Company" or "Merck") as well as a systematic means of saving and investing for the future. Regular full-time, part-time, and temporary employees of the Company and of certain wholly-owned subsidiaries as defined by the Plan document who were not covered by a collective bargaining agreement are eligible to enroll in the Plan as of the first day of the third month following their date of hire. The Plan is administered by a management committee appointed by the Chief Executive Officer of the Company. All costs of administering the Plan are borne by the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 2. CONTRIBUTIONS Participants may contribute from 2% up to 15% of their base pay. In addition, the Company matches 75% of employee contributions up to 6% of base pay per pay period. Company matching contributions are invested according to the following age parameters: Under age 50 -- 50% of Company matching contributions is invested in the Merck Common Stock Fund (Non-participant directed) and 50% is invested in the funds to which the participant is currently contributing (Participant directed). Age 50 and above -- Participants have the option to invest all Company matching contributions in any of the available fund options (Participant directed). Participants direct the investment of their contributions into any investment option, including the Merck Common Stock Fund (Participant directed). The Plan currently offers 15 mutual funds and the Merck Common Stock Fund. 3. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution, the Company's matching contribution and allocation of Plan earnings. The allocation is based on participants' account balances, as defined in the Plan document. 4. VESTING Participants are immediately vested in their contributions, all Company matching contributions, plus actual earnings thereon. 5. PARTICIPANT LOANS Participants may borrow from their account balances with interest charged at the prime rate plus 1%. Loan terms range from one to five years or up to thirty years for the purchase of a primary residence. The 4 6 MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) minimum loan is $500 and the maximum loan is the lesser of $50,000 less the highest outstanding loan balance during the one year period prior to the new loan application date, or 50% of the participant's account balance less any current outstanding loan balance. 6. PAYMENT OF BENEFITS In-service (which include hardship withdrawals) and termination distributions are made throughout the year in accordance with applicable Plan provisions. At December 31, 1999 and 1998, net assets available for benefits included distributions in process of payment of $2,114,034 and $1,816,514, respectively. B. SUMMARY OF ACCOUNTING POLICIES: USE OF ESTIMATES The financial statements are prepared in conformity with accounting principles generally accepted in the United States and, accordingly, include amounts that are based on management's best estimates and judgments. Actual results could differ from these estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The financial statements of the Plan have been prepared on the accrual basis of accounting. The investments of the Plan are stated at quoted market value. Shares of mutual funds are valued at the net asset value of the shares held by the Plan at year-end. Purchases and sales of securities are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date. The net appreciation (depreciation) in market value of investments is based on the beginning of the year market value or value at the time of purchase during the year and is included in the statement of changes in net assets available for benefits. C. INVESTMENTS: The following presents investments that represent 5% or more of the Plan's net assets as of year-end.
DECEMBER 31, ------------------------------- 1999 1998 -------------- -------------- Merck Common Stock Fund, 72,896,801 and 71,924,065 units, respectively.............. $1,671,494,991* $1,813,160,707* T. Rowe Price Blue Chip Growth Fund, 8,522,756 and 8,443,142 units, respectively........... 309,716,959 258,360,153
- --------------------- * Includes non-participant directed portion During 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $(27,238,973) as follows: Mutual Funds......................................... $ 134,814,870 Common Stock Fund.................................... (162,053,843) ------------- $ (27,238,973) =============
5 7 MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) D. NON-PARTICIPANT-DIRECTED INVESTMENTS: Information about the net assets and the significant components of the changes in net assets relating to the non-participant-directed investments is as follows:
DECEMBER 31, --------------------------- 1999 1998 ------------ ------------ Net Assets: Merck Common Stock Fund..................... $353,946,622 $384,532,691 ============ ============
YEAR ENDED DECEMBER 31, 1999 ----------------- Changes in Net Assets Contributions.................................. $ 23,343,589 Dividends...................................... 5,728,670 Interest....................................... 65,961 Net depreciation............................... (40,775,847) Benefits paid to participants....................... (13,683,040) Transfers to participant directed investments and other Plans....................................... (5,265,402) ------------ $(30,586,069) ============
E. RELATED-PARTY TRANSACTIONS: Certain Plan investments are shares of mutual funds managed by Fidelity Management Trust Company ("Fidelity"). Fidelity is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Merck & Co., Inc. also is a party-in-interest to the Plan under the definition provided in Section 3(14) of ERISA. Therefore, Merck Common Stock Fund transactions qualify as party-in-interest transactions. All party-in-interest transactions are set forth on the attached schedules. F. PLAN TERMINATION: Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. G. TAX STATUS: The Plan obtained a tax determination letter from the Internal Revenue Service dated September 18, 1995 indicating that it had been designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). The Plan was most recently amended in December 1999. The Plan sponsor believes that the Plan is designed and currently operated in compliance with the IRC. Therefore, no provision for income taxes has been made. H. PROHIBITED TRANSACTIONS: There were no prohibited transactions during 1999. 6 8 MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) I. OTHER MATTERS: Net reallocations in 1999 of $3,446,614 consist of transfers of $2,822,691 between the Plan and the Merck & Co., Inc. Employee Stock Purchase and Savings Plan for employees who changed their status during the year, $765,926 for employees who transferred from Merck-Medco Managed Care, L.L.C. and ($142,003) of miscellaneous net transfers. 7 9 SCHEDULE H EIN: 22-1109110 PLAN NO.: 001 MERCK & CO., INC. EMPLOYEE SAVINGS AND SECURITY PLAN LINE 4i -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
(C) DESCRIPTION OF INVESTMENT INCLUDING (B) IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, COLLATERAL, (E) CURRENT (A) LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE (D) COST VALUE - ------- -------------------------------- --------------------------------------------- -------------- ----------------- * Merck & Co., Inc. Merck Common Stock Fund 72,896,801 units $ 682,393,028 $1,671,494,991 * Fidelity Investments Fidelity Equity-Income Fund 922,115 units 43,996,620 49,313,929 Fidelity Growth & Income Portfolio 2,998,550 units 103,919,576 141,410,136 Fidelity Retirement Money Market Fund 107,908,631 units 107,936,553 107,936,553 Spartan U.S. Equity Index Fund 1,992,218 units 71,824,494 103,774,476 Fidelity Low-Priced Stock Fund 536,469 units 12,758,815 12,145,657 Putnam Investments The George Putnam Fund of Boston A 3,618,142 units 65,350,568 58,903,350 Putnam Voyager Fund A 1,049,880 units 24,640,405 32,504,284 T. Rowe Price T. Rowe Price Blue Chip Growth Fund 8,522,756 units 204,281,684 309,716,959 T. Rowe Price New Income Fund 3,347,849 units 29,528,073 27,318,451 T. Rowe Price Mid-Cap Growth Fund 1,793,137 units 54,127,663 71,958,582 T. Rowe Price Dividend Growth Fund 472,964 units 9,842,083 9,558,598 Franklin Templeton Franklin Small Cap Growth Fund A 1,059,972 units 29,080,849 46,776,548 Templeton Developing Markets Trust A 709,924 units 9,793,218 11,081,911 The Vanguard Group Vanguard U.S. Growth Portfolio 3,259,531 units 107,988,062 141,887,383 The American Funds Group EuroPacific Growth Fund 1,753,885 units 54,291,345 74,820,742 *Participants' Loan Account (with interest rates ranging from 6.5% to 12.5% and with maturities through 2029) 36,773,123 36,773,123 -------------- -------------- Total $1,648,526,159 $2,907,375,673 ============== ==============
- --------------- * Denotes a party-in-interest to the Plan. The accompanying notes to financial statements are an integral part of this schedule. 8 10 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated June 12, 2000 included in the financial statements and exhibits required by Form 11-K Annual Report for the Merck & Co., Inc. Employee Savings and Security Plan into the Company's previously filed Registration Statements on Form S-8 (Nos. 33-21087, 33-21088, 33-36101, 33-40177, 33-51235, 33-53463, 33-64273, 33-64665, 333-23293, 333-23295, 333-91769, 333-30526 and 333-31762), on Form S-4 (No. 33-50667) and on Form S-3 (Nos. 33-60322, 33-39349, 33-51785, 33-57421, 333-17045, 333-36383 and 333-77569). It should be noted that we have not audited any financial statements of the Plan subsequent to December 31, 1999 or performed any audit procedures subsequent to the date of our report. ARTHUR ANDERSEN LLP New York, New York June 27, 2000 EX-99.B 3 ex99-b.txt FINANCIAL STATEMENTS ON 11-K 1 EXHIBIT 99(b) FINANCIAL STATEMENTS AND EXHIBITS REQUIRED BY FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 1-3305 --------------------- MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN (Full title of the plan) MERCK & CO., INC. P.O. BOX 100 WHITEHOUSE STATION, NEW JERSEY 08889-0100 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Merck & Co., Inc.: We have audited the accompanying statement of net assets available for benefits of the Merck & Co., Inc. Employee Stock Purchase and Savings Plan (the "Plan") as of December 31, 1999 and 1998, and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. These financial statements and the schedule referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and the schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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, 1999 and 1998, and the changes in its net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes is presented for purposes of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP New York, New York June 12, 2000 1 3 MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, --------------------------- 1999 1998 ------------ ------------ Assets: Investments at market value............................... $347,069,430 $366,805,677 ------------ ------------ Receivables: Employer's contribution................................. 104,491 66,729 Participants' contributions............................. 370,507 237,677 Accrued interest and dividends.......................... 1,193,134 1,102,289 ------------ ------------ Total receivables..................................... 1,668,132 1,406,695 ------------ ------------ Net assets available for benefits........................... $348,737,562 $368,212,372 ============ ============
The accompanying notes to financial statements are an integral part of this financial statement. 2 4 MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999 ------------------- Additions to net assets attributed to: Investment income (loss): Net depreciation in market value of investments......... ($21,751,959) Interest................................................ 710,600 Dividends............................................... 7,382,703 ------------ Total investment loss................................. (13,658,656) ------------ Contributions to the Plan: By participants......................................... 18,531,288 By the employer......................................... 4,635,888 ------------ Total contributions................................... 23,167,176 ------------ Total additions....................................... 9,508,520 ------------ Deductions from net assets attributed to: Benefits paid to participants............................. (26,160,639) ------------ Net reallocations........................................... (2,822,691) ------------ Total deductions and net reallocations among Plans.... (28,983,330) ------------ Net decrease........................................ (19,474,810) Net assets available for benefits Beginning of year................................... 368,212,372 ------------ End of year......................................... $348,737,562 ============
The accompanying notes to financial statements are an integral part of this financial statement. 3 5 MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS A. DESCRIPTION OF PLAN: The following description of the Merck & Co., Inc. Employee Stock Purchase and Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. 1. GENERAL The Plan was designed to provide an easy, economical way for employees to become stockholders of Merck & Co., Inc. (the "Company" or "Merck") as well as a systematic means of saving and investing for the future. Generally, any regular full-time, part-time, or temporary employee of the Company who is a U.S. resident covered by a collective bargaining agreement providing for participation in this Plan as defined by the Plan document, and has completed one year of employment, is eligible to participate. The Plan is administered by a management committee appointed by the Chief Executive Officer of the Company. All costs of administering the Plan are borne by the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 2. CONTRIBUTIONS Depending on the terms of the applicable collective bargaining agreements, participants may contribute from 2% up to either 10% or 15% of their base pay per pay period. In addition, the Company will match 50% of employee contributions up to 6% of base pay per pay period, or contributions of a predetermined dollar amount negotiated with each bargaining group, whichever is less. Company matching contributions are invested according to the following age parameters: Under age 50 -- 50% of Company matching contributions is invested in the Merck Common Stock Fund (Non-participant directed) and 50% is invested in the funds to which the participant is currently contributing (Participant directed). Age 50 and above -- Participants have the option to invest all Company matching contributions in any of the available fund options (Participant directed). Participants direct the investment of their contributions into any investment option including the Merck Common Stock Fund (Participant directed). The Plan currently offers 15 mutual funds and the Merck Common Stock Fund. 3. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution, the Company's matching contribution and allocation of Plan earnings. The allocation is based on participants' account balances, as defined in the Plan document. 4. VESTING Participants are immediately vested in their contributions, all Company matching contributions, plus actual earnings thereon. 5. PARTICIPANT LOANS Participants may borrow from their account balances with interest charged at the prime rate plus 1%. Loan terms range from one to five years or up to thirty years for the purchase of a primary residence. The minimum loan is $500 and the maximum loan is the lesser of $50,000 less the highest outstanding loan 4 6 MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) balance during the one year period prior to the new loan application date, or 50% of the participant's account balance less any current outstanding loan balance. 6. PAYMENT OF BENEFITS In-service (which include hardship withdrawals) and termination distributions are made throughout the year in accordance with applicable Plan provisions. At December 31, 1999 and 1998, net assets available for benefits included distributions in process of payment of $662,943 and $835,834, respectively. B. SUMMARY OF ACCOUNTING POLICIES: USE OF ESTIMATES The financial statements are prepared in conformity with accounting principles generally accepted in the United States and, accordingly, include amounts that are based on management's best estimates and judgments. Actual results could differ from these estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The financial statements of the Plan have been prepared on the accrual basis of accounting. The investments of the Plan are stated at quoted market value. Shares of mutual funds are valued at the net asset value of the shares held by the Plan at year-end. Purchases and sales of securities are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date. The net appreciation (depreciation) in market value of investments is based on the beginning of the year market value or value at the time of purchase during the year and is included in the statement of changes in net assets available for benefits. C. INVESTMENTS: The following presents investments that represent 5% or more of the Plan's net assets as of year-end.
DECEMBER 31, --------------------------- 1999 1998 ------------ ------------ Merck Common Stock Fund, 11,958,440 and 12,173,650 units, respectively................. $274,189,812* $306,880,503* T. Rowe Price Blue Chip Growth Fund, 500,017 and 489,337 units, respectively.................... 18,170,608 14,973,705**
- --------------------- * Includes non-participant directed portion ** This investment did not represent 5% of the Plan's net assets as of December 31, 1998 During 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $(21,751,959) as follows: Mutual Funds.......................................... $ 6,196,485 Common Stock Fund..................................... (27,948,444) ------------ $(21,751,959) ============
5 7 MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) D. NON-PARTICIPANT-DIRECTED INVESTMENTS: Information about the net assets and the significant components of the changes in net assets relating to the non-participant-directed investments is as follows:
DECEMBER 31, ------------------------- 1999 1998 ----------- ----------- Net Assets: Merck Common Stock Fund....................... $41,979,744 $52,432,551 =========== ===========
YEAR ENDED DECEMBER 31, 1999 ----------------- Changes in Net Assets Contributions.................................. $ 2,327,169 Dividends...................................... 718,838 Interest....................................... 66,235 Net depreciation............................... (8,243,378) Benefits paid to participants....................... (2,989,835) Transfers to participant directed investments and other Plans....................................... (2,331,836) ------------ $(10,452,807) ============
E. RELATED-PARTY TRANSACTIONS: Certain Plan investments are shares of mutual funds managed by Fidelity Management Trust Company ("Fidelity"). Fidelity is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Merck & Co., Inc. also is a party-in-interest to the Plan under the definition provided in Section 3(14) of ERISA. Therefore, Merck Common Stock Fund transactions qualify as party-in-interest transactions. All party-in-interest transactions are set forth on the attached schedules. F. PLAN TERMINATION: Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. G. TAX STATUS: The Plan obtained a tax determination letter from the Internal Revenue Service dated September 18, 1995 indicating that it had been designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). The Plan was most recently amended in July 1998. The Plan sponsor believes that the Plan is designed and currently operated in compliance with the IRC. Therefore, no provision for income taxes has been made. H. PROHIBITED TRANSACTIONS: There were no prohibited transactions during 1999. 6 8 MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) I. OTHER MATTERS: Net reallocations in 1999 of ($2,822,691) consist of transfers between the Plan and the Merck & Co., Inc. Employee Savings and Security Plan for employees who changed their status during the year. J. SUBSEQUENT EVENTS: Subsequent to year-end, the Company match was increased for certain unions from 50% to 60% of employee contributions up to 6% of base pay. In addition, participant accounts of employees belonging to those unions will be credited with a ratification bonus. 7 9 SCHEDULE H EIN: 22-1109110 PLAN NO.: 004 MERCK & CO., INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN LINE 4i -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
(C) DESCRIPTION OF INVESTMENT INCLUDING (B) IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, COLLATERAL, (E) CURRENT (A) LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE (D) COST VALUE - ------- -------------------------------- --------------------------------------------- ------------ ----------------- * Merck & Co., Inc. Merck Common Stock Fund 11,958,440 units $114,434,243 $274,189,812 * Fidelity Investments Fidelity Equity-Income Fund 46,074 units 2,274,857 2,463,996 Fidelity Growth & Income Portfolio 130,131 units 4,765,709 6,136,862 Fidelity Retirement Money Market Fund 10,145,470 units 10,164,416 10,164,416 Spartan U.S. Equity Index Fund 57,592 units 2,174,821 2,999,980 Fidelity Low-Priced Stock Fund 20,566 units 489,009 465,615 Putnam Investments The George Putnam Fund of Boston A 315,573 units 5,695,411 5,137,525 Putnam Voyager Fund A 75,876 units 1,812,543 2,349,124 T. Rowe Price T. Rowe Price Blue Chip Growth Fund 500,017 units 12,306,072 18,170,608 T. Rowe Price New Income Fund 132,381 units 1,167,171 1,080,229 T. Rowe Price Mid-Cap Growth Fund 54,506 units 1,660,741 2,187,331 T. Rowe Price Dividend Growth Fund 26,927 units 563,168 544,206 Franklin Templeton Franklin Small Cap Growth Fund A 50,591 units 1,525,697 2,232,592 Templeton Developing Markets Trust A 30,848 units 402,942 481,544 The Vanguard Group Vanguard U.S. Growth Portfolio 149,500 units 5,224,407 6,507,725 The American Funds Group EuroPacific Growth Fund 78,448 units 2,354,400 3,346,580 *Participants' Loan Account (with interest rates ranging from 6.5% to 12.5% and with maturities through 2028) 8,611,285 8,611,285 ------------ ------------ Total $175,626,892 $347,069,430 ============ ============
- --------------- * Denotes a party-in-interest to the Plan. The accompanying notes to financial statements are an integral part of this schedule. 8 10 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated June 12, 2000 included in the financial statements and exhibits required by Form 11-K Annual Report for the Merck & Co., Inc. Employee Stock Purchase and Savings Plan into the Company's previously filed Registration Statements on Form S-8 (Nos. 33-21087, 33-21088, 33-36101, 33-40177, 33-51235, 33-53463, 33-64273, 33-64665, 333-23293, 333-23295, 333-91769, 333-30526 and 333-31762), on Form S-4 (No. 33-50667) and on Form S-3 (Nos. 33-60322, 33-39349, 33-51785, 33-57421, 333-17045, 333-36383 and 333- 77569). It should be noted that we have not audited any financial statements of the Plan subsequent to December 31, 1999 or performed any audit procedures subsequent to the date of our report. ARTHUR ANDERSEN LLP New York, New York June 27, 2000 EX-99.C 4 ex99-c.txt FINANCIAL STATEMENTS ON 11-K 1 EXHIBIT 99(c) FINANCIAL STATEMENTS AND EXHIBITS REQUIRED BY FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 1-3305 --------------------- MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN (Full title of the plan) MERCK & CO., INC. P.O. BOX 100 WHITEHOUSE STATION, NEW JERSEY 08889-0100 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Merck Sharp & Dohme Quimica de Puerto Rico, Inc. and Merck Sharp & Dohme (I.A.) Corp.: We have audited the accompanying statement of net assets available for benefits of the Merck Puerto Rico Employee Savings and Security Plan (the "Plan") as of December 31, 1999 and 1998 and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. These financial statements and the schedule referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and the schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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, 1999 and 1998, and the changes in its net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes is presented for purposes of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP San Juan, Puerto Rico May 12, 2000 1 3 MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, -------------------------- 1999 1998 ----------- ----------- Assets: Investments at market value............................... $32,764,583 $33,769,371 ----------- ----------- Receivables: Employer's contribution................................. 26,699 24,537 Participants' contributions............................. 61,829 85,652 Accrued interest and dividends.......................... 116,837 107,220 ----------- ----------- Total receivables..................................... 205,365 217,409 ----------- ----------- Net assets available for benefits........................... $32,969,948 $33,986,780 =========== ===========
The accompanying notes to financial statements are an integral part of this financial statement. 2 4 MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999 ----------------- Additions to net assets attributed to: Investment income (loss): Net depreciation in market value of investments......... $ (2,225,927) Interest................................................ 154,595 Dividends............................................... 574,373 ----------------- Total investment loss................................. (1,496,959) ----------------- Contributions to the Plan: By participants......................................... 3,678,916 By the employer......................................... 1,046,158 ----------------- Total contributions................................... 4,725,074 ----------------- Total additions....................................... 3,228,115 ----------------- Deductions from net assets attributed to: Benefits paid to participants............................. (4,175,027) ----------------- Net reallocations........................................... (69,920) ----------------- Total deductions and net reallocations among Plans.... (4,244,947) ----------------- Net decrease........................................ (1,016,832) Net assets available for benefits Beginning of year................................... 33,986,780 ----------------- End of year......................................... $ 32,969,948 =================
The accompanying notes to financial statements are an integral part of this financial statement. 3 5 MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS A. DESCRIPTION OF PLAN: The following description of the Merck Puerto Rico Employee Savings and Security Pan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. 1. GENERAL The Plan is a profit sharing plan designed to provide an opportunity for employees of Merck Sharp & Dohme Quimica de Puerto Rico, Inc. and Merck Sharp & Dohme (I.A.) Corp. (the "Companies") to become stockholders of Merck & Co., Inc. ("Merck") and to encourage them to save on a regular basis by setting aside part of their earnings. Regular full-time and part-time employees of the Companies, as defined in the Plan document, who have completed at least one year of employment and are not covered by a collective bargaining agreement, are eligible to enroll in the Plan. The Plan is administered by the Employee Benefits Committee appointed by the President of the Companies. All costs of administering the Plan are borne by the Companies. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 2. CONTRIBUTIONS Participants may contribute from 2% up to 15% of their base pay, provided that pre-tax contributions shall not exceed 10% of base compensation. In addition, the Companies match 50% of employee contributions up to 5% of base pay per pay period. The Companies' matching contributions are invested entirely in the Merck Common Stock Fund (Non-participant directed) and may not be reallocated into any other investment option. Participants direct the investment of their contributions into any investment option including the Merck Common Stock Fund (Participant directed). The Plan currently offers 15 mutual funds and the Merck Common Stock Fund. 3. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution, the Companies' matching contribution and allocation of Plan earnings. The allocation is based on participants' account balances, as defined in the Plan document. 4. VESTING Participants are immediately vested in their contributions, all Companies' matching contributions, plus actual earnings thereon. 5. PARTICIPANT LOANS Participants may borrow from their account balances with interest charged at the prime rate plus 1%. Loan terms range from one to five years or up to thirty years for the purchase of a primary residence. The minimum loan is $500 and the maximum loan is the lesser of $50,000 less the highest outstanding loan balance during the one year period prior to the new loan application date, or 50% of the participant's account balance less any current outstanding loan balance. 4 6 MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. PAYMENT OF BENEFITS Participants are entitled to receive automatic, voluntary, in-service (which include hardship withdrawals), or mandatory distributions as provided in the applicable Plan provisions. B. SUMMARY OF ACCOUNTING POLICIES: USE OF ESTIMATES The financial statements are prepared in conformity with accounting principles generally accepted in the United States and, accordingly, include amounts that are based on management's best estimates and judgments. Actual results could differ from these estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The financial statements of the Plan have been prepared on the accrual basis of accounting. The investments of the Plan are stated at quoted market value. Shares of mutual funds are valued at the net asset value of the shares held by the Plan at year-end. Purchases and sales of securities are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date. The net appreciation (depreciation) in market value of investments is based on the beginning of the year market value or value at the time of purchase during the year and is included in the statement of changes in net assets available for benefits. C. INVESTMENTS: The following presents investments that represent 5% or more of the Plan's net assets as of year-end.
DECEMBER 31, ------------------------- 1999 1998 ----------- ----------- Merck Common Stock Fund, 397,535 and 197,967 units, respectively..................................... $27,346,843* $29,200,120*
- --------------- * Includes non-participant directed portion During 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $(2,225,927) as follows: Mutual Funds........................................... $ 373,969 Common Stock Fund...................................... (2,599,896) ----------- $(2,225,927) ===========
5 7 MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) D. NON-PARTICIPANT-DIRECTED INVESTMENTS: Information about the net assets and the significant components of the changes in net assets relating to the non-participant-directed investments is as follows:
DECEMBER 31, ----------------------- 1999 1998 ---------- ---------- Net Assets: Merck Common Stock Fund......................... $8,962,988 $9,706,619 ========== ==========
YEAR ENDED DECEMBER 31, 1999 ----------------- Changes in Net Assets Contributions.................................. $ 1,061,970 Dividends...................................... 144,109 Interest....................................... 61,601 Net depreciation............................... (854,239) Benefits paid to participants....................... (1,030,633) Transfers to participant directed investments and other Plans....................................... (126,439) ----------- $ (743,631) ===========
E. RELATED-PARTY TRANSACTIONS: Certain Plan investments are shares of mutual funds managed by Fidelity Management Trust Company ("Fidelity"). Fidelity is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Merck & Co., Inc. also is a party-in-interest to the Plan under the definition provided in Section 3(14) of ERISA. Therefore, Merck Common Stock Fund transactions qualify as party-in-interest transactions. All party-in-interest transactions are set forth on the attached schedules. F. PLAN TERMINATION: Although they have not expressed any intent to do so, the Companies have the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. G. TAX STATUS: The Plan obtained a tax determination letter from the Puerto Rico Department of Treasury dated February 18, 1998 indicating that it had been designed in accordance with applicable sections of the Puerto Rico Internal Revenue Code of 1994 ("PRIRC"). The Plan sponsors believe that the Plan is designed and operated in compliance with the PRIRC. The Plan sponsors also believe that the Plan is designed and currently operated as a qualified plan under the United States Internal Revenue Code. The Plan has not been amended since its inception on July 1, 1997. A favorable determination letter was received from the Internal Revenue Service in November, 1998. Therefore, no provision for income taxes has been made. H. PROHIBITED TRANSACTIONS: There were no prohibited transactions during 1999. 6 8 MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) I. OTHER MATTERS: Net reallocations in 1999 of ($69,920) consist of miscellaneous adjustments made during the year. 7 9 SCHEDULE H EIN: 66-0288298 PLAN NO.: 061 MERCK PUERTO RICO EMPLOYEE SAVINGS AND SECURITY PLAN LINE 4i -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
(C) DESCRIPTION OF INVESTMENT INCLUDING (B) IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, COLLATERAL, (E) CURRENT (A) LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE (D) COST VALUE - ------- -------------------------------- --------------------------------------------- ----------- ----------------- * Merck & Co., Inc. Merck Common Stock Fund 1,193,664 units $14,895,723 $27,346,843 * Fidelity Investments Fidelity Equity-Income Fund 1,062 units 57,529 56,817 Fidelity Growth & Income Portfolio 11,093 units 452,435 523,160 Fidelity Retirement Money Market Fund 441,550 units 441,551 441,551 Spartan U.S. Equity Index Fund 4,358 units 175,493 227,005 Fidelity Low-Priced Stock Fund 834 units 19,462 18,888 Putnam Investments The George Putnam Fund of Boston A 10,758 units 194,185 175,142 Putnam Voyager Fund A 1,027 units 24,163 31,797 T. Rowe Price T. Rowe Price Blue Chip Growth Fund 28,292 units 706,680 1,028,124 T. Rowe Price New Income Fund 2,735 units 23,993 22,318 T. Rowe Price Mid-Cap Growth Fund 5,798 units 173,988 232,655 T. Rowe Price Dividend Growth Fund 319 units 6,809 6,445 Franklin Templeton Franklin Small Cap Growth Fund A 989 units 23,561 43,662 Templeton Developing Markets Trust A 1,385 units 17,266 21,613 The Vanguard Group Vanguard U.S. Growth Portfolio 9,416 units 321,734 409,885 The American Funds Group EuroPacific Growth Fund 5,217 units 155,598 222,557 *Participants' Loan Account (with interest rates ranging from 6.5% to 10.0% and with maturities through 2029) 1,956,121 1,956,121 ----------- ----------- Total $19,646,291 $32,764,583 =========== ===========
- --------------- * Denotes a party-in-interest to the Plan. The accompanying notes to financial statements are an integral part of this schedule. 8 10 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated May 12, 2000 included in the financial statements and exhibits required by Form 11-K Annual Report for the Merck Puerto Rico Employee Savings and Security Plan into the previously filed Registration Statements of Merck & Co., Inc. on Form S-8 (Nos. 33-21087, 33-21088, 33-36101, 33-40177, 33-51235, 33-53463, 33-64273, 33-64665, 333-23293, 333-23295, 333-91769, 333-30526 and 333-31762), on Form S-4 (No. 33-50667) and on Form S-3 (Nos. 33-60322, 33-39349, 33-51785, 33-57421, 333-17045, 333-36383 and 333-77569). It should be noted that we have not audited any financial statements of the Plan subsequent to December 31, 1999 or performed any audit procedures subsequent to the date of our report. ARTHUR ANDERSEN LLP San Juan, Puerto Rico June 27, 2000 -----END PRIVACY-ENHANCED MESSAGE-----