11-K 1 a11-k.txt 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (MARK ONE) (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________ Commission File Number 0-12406 IMMUNEX CORPORATION PROFIT SHARING 401(k) PLAN AND TRUST (Full title of the plan) IMMUNEX CORPORATION (Exact name of registrant as specified in its charter) 51 University Street Seattle, WA 98101 (Address of principal executive offices) Immunex Corporation Profit Sharing 401(k) Plan and Trust Financial Statements and Supplemental Schedule December 31, 1999 and 1998 and the Year ended December 31, 1999
CONTENTS Report of Independent Auditors............................................... 1 Audited Financial Statements Statements of Net Assets Available for Benefits ............................. 2 Statement of Changes in Net Assets Available for Benefits ................... 3 Notes to Financial Statements................................................ 4 Supplemental Schedule Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of Year............................................................ 13
Report of Independent Auditors The Administrative Committee Immunex Corporation Profit Sharing 401(k) Plan and Trust We have audited the accompanying statements of net assets available for benefits of Immunex Corporation Profit Sharing 401(k) Plan and Trust as of December 31, 1999 and 1998, and the related statement of changes in net assets for the year ended December 31, 1999. 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 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 at 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 financial statements taken as a whole. The accompanying supplemental schedule of net assets held for investment purposes at end of year as of December 31, 1999 is presented for purposes of additional analysis and is not a required part of the 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ERNST & YOUNG LLP May 12, 2000 Seattle, Washington Immunex Corporation Profit Sharing 401(k) Plan and Trust Statements of Net Assets Available For Benefits
DECEMBER 31 1999 1998 ------------------------------------ ASSETS Investments, at fair value: Interest-bearing cash $ 4,384,373 $ 1,108,588 Mutual funds 65,785,263 52,889,584 Immunex Corporation common stock 15,263,862 4,328,579 Participant loans 822,106 810,743 ------------------------------------ Total investments 86,255,604 59,137,494 Contribution receivables: Employer 79,513 62,075 Participants 170,147 138,795 ------------------------------------ Total contribution receivables 249,660 200,870 ==================================== Net assets available for benefits $ 86,505,264 $ 59,338,364 ====================================
SEE ACCOMPANYING NOTES. 2 Immunex Corporation Profit Sharing 401(k) Plan and Trust Statement of Changes in Net Assets Available For Benefits Year Ended December 31, 1999 ADDITIONS Investment income: Net appreciation in fair value of investments $ 18,994,729 Dividends 916,188 Interest 70,630 ------------------- 19,981,547 Contributions: Participants 7,560,405 Employer 2,919,517 ------------------- 10,479,922 ------------------- Total additions 30,461,469 DEDUCTIONS Benefits paid directly to participants 3,262,457 Deemed distribution of participant loans 25,961 Administrative expenses 6,151 ------------------- 3,294,569 ------------------- Net increase 27,166,900 Net assets available for benefits: Beginning of year 59,338,364 ------------------- End of year $ 86,505,264 ===================
SEE ACCOMPANYING NOTES. 3 Immunex Corporation Profit Sharing 401(k) Plan and Trust Notes to Financial Statements December 31, 1999 1. DESCRIPTION OF THE PLAN The following description of the Immunex Corporation Profit Sharing 401(k) Plan and Trust (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. GENERAL The Plan was established on January 1, 1987 to encourage long-term savings by employees and to supplement retirement income. The Plan is a defined contribution profit-sharing plan. All employees and temporary employees of Immunex Corporation and its wholly owned subsidiaries (the Company) working 20 hours or more per week and having attained the age of 21 are eligible to enroll in the Plan on January 1 and July 1 coinciding with or following the date on which they become eligible. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan's investments were held in a trust by Charles Schwab Trust Company (the former Trustee) from December 31, 1996 to January 1, 1999. On January 1, 1999, all investments were transferred to Bank of New York Western Trust Company (the new Trustee), a division of the Bank of New York. CONTRIBUTIONS Participants may contribute from 1% to 15% of their compensation, tax-deferred, through payroll deductions to the Plan, up to the calendar year limit imposed by the Internal Revenue Service. Participants may also contribute to the Plan, amounts previously contributed to another qualified plan. The Company matches 100% on the first 2% of deferrals and 50% on the next 4% of deferrals for employees with less than five years of service. Employees with five or more years of service receive a Company match of 100% on the first 2% of deferrals and 75% on the next 4% of deferrals. Additional amounts may be contributed at the option of the Company's Board of Directors, but they shall not exceed the maximum amount allowable to be taken as a tax deduction by the Company. Participants direct the investment of all contributions into one or more of nine investment options offered by the Plan, including a money market fund, mutual funds, and Immunex Corporation common stock. 4 1. DESCRIPTION OF THE PLAN (CONTINUED) PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution, the matching employer contribution, and an allocation of Plan earnings and is charged with an allocation of administrative expenses. Allocations are based on participant account balances, as defined in the Plan document. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. VESTING Participant contributions and actual earnings thereon are immediately 100% vested. Employer contributions vest at the rate of 20% per year of service commencing with the first year of service. PAYMENT OF BENEFITS Distributions to terminated participants for vested account balances are made in cash as soon as practicable upon request after termination. Participants or their beneficiaries are eligible for distribution of 100% of their vested account balances, including both participant and employer contributions, as soon as practicable after their normal or postponed retirement dates, at death, or at total disability, as defined by the Plan document. The nonvested portion of account balances is subject to forfeiture. Forfeitures are used to reduce employer contributions to the Plan for the next Plan year. There were no forfeitures netted against the employer contribution receivable at December 31, 1999 and 1998. HARDSHIP WITHDRAWALS Hardship withdrawals are permitted by the Plan in accordance with Section 401(k) of the Internal Revenue Code (IRC) with the approval of the Plan administrator. PARTICIPANT LOANS Participants may borrow up to 50% of their vested account balances from the Plan, as limited by Section 72(p)(2) of the IRC. Such loans are secured by their account balances. Loan terms range from eight months to ten years. Interest is accrued at the prime rate of interest plus two percentage points. Principal and interest are repaid through periodic payroll deductions. 5 1. DESCRIPTION OF THE PLAN (CONTINUED) ADMINISTRATIVE EXPENSES Certain administrative expenses of the Plan are paid by the Company. Administrative expenses paid by the Company on behalf of the Plan for the year ended December 31, 1999 were $120,534. 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. In the event of Plan termination, participants will become 100% vested in their accounts, including the portion related to employer contributions and earnings thereon. 2. SUMMARY OF ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared on the accrual basis of accounting. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. RECLASSIFICATIONS Certain amounts in the 1998 financial statements have been reclassified to conform to the 1999 presentation. 6 2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) RELATED-PARTY TRANSACTIONS The Immunex Corporation Common Stock Fund invests in the common stock of Immunex Corporation. It is an equity investment alternative with a growth objective that allows the participant to invest in and own common stock of Immunex Corporation. Immunex Corporation is the Plan Sponsor as defined by the Plan, and, therefore, these transactions also qualify as party-in-interest. Purchases and sales of Immunex Corporation's common stock at quoted market values were $954,000 and $975,000, respectively, during the year ended December 31, 1999. Bank of New York Hamilton Premier Shares Money Market Fund is an investment in which the shares of this mutual fund are managed by Bank of New York Western Trust Company. Bank of New York Western Trust Company is the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. The mutual funds are valued at quoted market prices, which represent the net asset values of shares held by the Plan at year-end. Immunex Corporation's common stock is traded on a national securities exchange and is valued at the last reported sales price on the last business day of the plan year. Participant loans, which consist of the principal balance of loans outstanding to the Plan participants, are valued at their outstanding balance, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend rate. 7 3. INVESTMENTS Participants may invest in one or more of the following funds: BANK OF NEW YORK HAMILTON PREMIER SHARES MONEY MARKET FUND - The Bank of New York Hamilton Premier Shares Money Market Fund invests in or may invest in negotiable certificates of deposit; time deposits; bankers' acceptance of domestic and foreign issuers; commercial paper of domestic and foreign issuers; certain repurchase agreements; high-quality corporate bonds and notes issued by U.S. corporations, bonds of foreign issuers and short-term obligations of foreign sovereign governments or of their agencies, instrumentalities, authorities, or political subdivisions. The primary objective of this fund is to earn as high a level of current income as is consistent with preservation of capital and maintenance of liquidity by investing principally in high quality money market instruments. Bank of New York Western Trust Company is the Trustee as defined by the Plan, and, therefore, these transactions qualify as transactions with a party-in-interest. FIDELITY GROWTH AND INCOME FUND - The Growth and Income Fund consists of a portfolio of high-yield securities. Investments consist primarily of equity securities; however, they may also include any combination of common stock, preferred stock, and fixed-income securities. PIMCO TOTAL RETURN FUND - The PIMCO Total Return Fund consists primarily of debt securities, including U.S. government securities, corporate bonds, and mortgage-related securities, but may also include securities denominated in foreign currencies. The primary objective of this fund is to seek total return consistent with preservation of capital. DODGE & COX BALANCED FUND - The Dodge & Cox Balanced Fund consists primarily of common stocks and convertible securities but may also include investment-grade, fixed-income securities. The primary objective of this fund is to seek income, conservation of principal, and long-term growth of principal and income. RAINIER SMALL/MID CAPITAL EQUITY FUND - The Rainier Small/Mid Capital Equity Fund consists primarily of equities issued by companies with market capitalizations between $50 million and $5 billion. The primary objective of this fund is to seek long-term capital appreciation. 8 3. INVESTMENTS (CONTINUED) EUROPACIFIC GROWTH FUND - The EuroPacific Growth Fund consists primarily of equity securities of issuers domiciled in Europe or the Pacific Basin. The primary objective of this fund is to seek long-term growth of capital. IMMUNEX CORPORATION COMMON STOCK FUND - The Immunex Corporation Common Stock Fund invests in the common stock of Immunex Corporation. It is an equity investment alternative with a growth objective that allows the participant to invest in and own common stock of Immunex Corporation. Because the Immunex Corporation is the Plan Sponsor, all related transactions qualify as transactions with a party-in-interest. VANGUARD INDEX 500 PORTFOLIO FUND - The Vanguard Index 500 Portfolio Fund employs an investment strategy designed to track the performance of the Standard and Poor's 500 Index, which consists primarily of large-capitalization size U.S. companies. The fund's primary objective is to match the performance of a benchmark index that measures the investment return of large-capitalization stocks. VANGUARD WINDSOR II FUND - The Vanguard Windsor II Fund consists primarily of equity securities issued by a broadly diversified group of medium to large capitalization companies. The fund seeks to provide long-term growth of capital and appreciation through dividend income. Investments that represent 5% or more of fair value of the Plan's net assets at December 31 are as follows:
1999 1998 ------------------------------------ Dodge & Cox Balanced Fund $ 4,599,799 $ 4,343,404 Rainier Small/Mid Cap Equity Fund 11,313,712 10,957,661 EuroPacific Growth Fund 10,008,410 5,350,493 Fidelity Growth and Income Fund 28,327,521 26,464,677 Immunex Corporation Common Stock Fund 15,263,862 4,328,579 Vanguard Index 500 Portfolio Fund 7,967,825 - Bank of New York Hamilton Premier Shares Money Market Fund 4,384,373 - Crabbe Huson Core Equity Fund - 4,334,382
9 3. INVESTMENTS (CONTINUED) During 1999, the Plan's investments (including investments bought and sold, as well as held during the year) appreciated in fair value as determined by quoted market prices as follow:
NET REALIZED AND UNREALIZED APPRECIATION IN FAIR VALUE OF FAIR VALUE INVESTMENTS AT YEAR-END ------------------------------------ Interest-bearing cash $ - $ 4,384,373 Mutual funds 8,248,131 65,785,263 Common stock - Immunex Corporation 10,746,598 15,263,862 ------------------------------------ 18,994,729 85,433,498 Investments at estimated fair value - participant loans - 822,106 ------------------------------------ $ 18,994,729 $ 86,255,604 ====================================
4. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
DECEMBER 31 1999 1998 ------------------------------------ Net assets available for benefits per the financial statements $ 86,505,264 $ 59,338,364 Amounts allocated to withdrawn participants (421,367) (510,264) ------------------------------------ Net assets available for benefits per the Form 5500 $ 86,083,897 $ 58,828,100 ====================================
10 4. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500 (CONTINUED) The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500 for the year ended December 31, 1999: Benefits paid to participants per the financial statements $ 3,262,457 Add: Amounts allocated on the Form 5500 to withdrawn participants at December 31, 1999 421,367 Less: Amounts allocated on the Form 5500 to withdrawn participants at December 31, 1998 (510,264) ------------------- Benefits paid to participants per the Form 5500 $ 3,173,560 ===================
Amounts allocated to withdrawn participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to year-end but not paid. 5. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated November 30, 1995, stating that the Plan and related trust are qualified under Section 401(a) of the IRC, and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. 11 SUPPLEMENTAL SCHEDULE 12 Immunex Corporation Profit Sharing 401(k) Plan and Trust Schedule H, Line 4i Schedule of Assets Held for Investment Purposes at End of Year (EIN: 51-0346580, PN: 001) December 31, 1999
DESCRIPTION OF INVESTMENT IDENTITY OF ISSUE, BORROWER, INCLUDING MATURITY DATE, RATE OF OR SIMILAR PARTY INTEREST, PAR, OR MATURITY VALUE CURRENT VALUE ----------------------------------------------------------------------------------------------------------- Interest-bearing cash: * Bank of New York Hamilton Premier Shares 4,384,373 units $ 4,384,373 Money Market Fund Common stock: * Immunex Corporation Common Stock 48,188 units 15,263,862 Mutual funds: EuroPacific Growth 234,609 units 10,008,410 Dodge & Cox Balanced 70,002 units 4,599,799 Fidelity Growth and Income 600,668 units 28,327,521 PIMCO Total Return 190,774 units 1,888,661 Rainier Small/Mid Capital Equity 433,310 units 11,313,712 Vanguard Index 500 Portfolio 58,877 units 7,967,825 Vanguard Windsor II 67,254 units 1,679,335 --------------- Total mutual funds 65,785,263 * Participant loans - participants Interest at prime plus 2%, maturity through 2007 822,106 --------------- $ 86,255,604 ===============
* Denotes party-in-interest. Cost information was omitted from this schedule because all investments are participant directed. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan administrator has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Immunex Corporation Profit Sharing 401(k) Plan and Trust Date: June 26, 2000 /s/ David A. Mann, CFO -------------- -------------------------------------------------------- David A. Mann Senior Vice President, Chief Financial Officer and Treasurer Date: June 26, 2000 /s/ Kathy Spencer -------------- -------------------------------------------------------- Kathy Spencer Vice President, Human Resources Date: June 26, 2000 /s/ Michael Mumford -------------- -------------------------------------------------------- Michael Mumford Vice President, Manufacturing Immunex Corporation Profit Sharing 401(k) Plan and Trust Exhibit Index 23.1 Consent of Ernst & Young LLP, Independent Auditors