<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 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, 1995 as set forth below:
1. Add Exhibit Numbers 99(a), 99(b) and 99(c) as follows:
<TABLE>
<CAPTION>
EXHIBIT METHOD OF
NUMBER DESCRIPTION FILING
<S> <C> <C>
99(a) -- Financial statements and exhibits Filed with this Form 10-K/A
required by Form 11-K Annual Report Amendment
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, 1995
99(b) -- Financial statements and exhibits Filed with this Form 10-K/A
required by Form 11-K Annual Report Amendment
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, 1995
99(c) -- Financial statements and exhibits Filed with this Form 10-K/A
required by Form 11-K Annual Report Amendment
pursuant to Section 15(d) of the
Securities Exchange Act of 1934 for
the Hubbard Farms, Inc. Employee
Savings Plan for the fiscal year
ended December 31, 1995
</TABLE>
2
<PAGE> 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.
MERCK & CO., INC.
Dated: June 21, 1996
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.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ---------------------------------- ---------------
<C> <S> <C>
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
PETER E. NUGENT Vice President, Controller ;
Principal Accounting
Officer
DEREK BIRKIN June 21, 1996
LAWRENCE A. BOSSIDY
WILLIAM G. BOWEN
JOHNNETTA B. COLE
CAROLYNE K. DAVIS Directors
LLOYD C. ELAM
CHARLES E. EXLEY, JR.
WILLIAM N. KELLEY
SAMUEL O. THIER
DENNIS WEATHERSTONE
</TABLE>
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
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT METHOD OF
NUMBER DESCRIPTION FILING
- ------- -------------------------------------- ---------------------------------
<C> <S> <C>
99(a) -- Financial statements and exhibits Filed with this Form 10-K/A
required by Form 11-K Annual Report Amendment
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, 1995
99(b) -- Financial statements and exhibits Filed with this Form 10-K/A
required by Form 11-K Annual Report Amendment
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,
1995
99(c) -- Financial statements and exhibits Filed with this Form 10-K/A
required by Form 11-K Annual Report Amendment
pursuant to Section 15(d) of the
Securities Exchange Act of 1934 for
the Hubbard Farms, Inc. Employee
Savings Plan for the fiscal year
ended December 31, 1995
</TABLE>
<PAGE> 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)
<PAGE> 2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Merck & Co., Inc.:
We have audited the accompanying Statements of Net Assets Available for
Benefits of the Merck & Co., Inc. Employee Savings and Security Plan as of
December 31, 1995 and 1994, and the related Statement of Changes in Net Assets
Available for Benefits for the year ended December 31, 1995. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules 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, 1995 and 1994, and the changes in its net assets available for
benefits for the year ended December 31, 1995, 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 supplemental Schedules of
Assets Held for Investment Purposes and Reportable Transactions are presented
for purposes 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. The fund information in the
Statements of Net Assets Available for Benefits and the Statement of Changes in
Net Assets Available for Benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The supplemental
schedules and fund information have been 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.
ARTHUR ANDERSEN LLP
New York, New York
May 22, 1996
1
<PAGE> 3
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
MERCK COMMON STOCK FUND
---------------------------
(NON- FIDELITY FIDELITY FIDELITY
PARTICIPANT (PARTICIPANT FIDELITY EQUITY- GROWTH GROWTH &
DIRECTED; DIRECTED; MAGELLAN INCOME COMPANY INCOME
TOTAL SEE NOTE 1) SEE NOTE 1) FUND FUND FUND PORTFOLIO
-------------- ------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1995
- ----------------- ------------------------------------------------------
Assets:
Investments at market
value.................. $1,310,187,757 $162,413,187 $749,525,828 $144,381,469 $11,810,154 $25,894,841 $30,827,770
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Receivables
Employer's
contribution......... 2,395,939 1,191,980 481,823 234,083 31,626 76,191 82,420
Participants'
contributions........ 5,258,171 -- 3,521,557 678,359 55,489 121,664 144,841
Accrued interest and
dividends............ 117,021 -- -- -- -- -- --
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Total receivables.... 7,771,131 1,191,980 4,003,380 912,442 87,115 197,855 227,261
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Net assets available for
benefits................. $1,317,958,888 $163,605,167 $753,529,208 $145,293,911 $11,897,269 $26,092,696 $31,055,031
============= =========== =========== =========== ========== ========== ==========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
2
<PAGE> 4
<TABLE>
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY FIDELITY FIDELITY
INTERMEDIATE GROWTH OTC OVERSEAS BALANCED
BOND FUND FUND PORTFOLIO FUND FUND
------------ ---------- ---------- ---------- ----------
(PARTICIPANT DIRECTED; SEE NOTE 1)
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1995
- ----------------- ---------------------------------------------------------------
Assets:
Investments at market
value.................. $10,005,333 $11,431,417 $13,252,190 $13,137,278 $47,696,317
----------- ----------- ----------- ----------- -----------
Receivables
Employer's
contribution......... 25,157 35,460 46,242 40,252 59,180
Participants'
contributions........ 47,009 53,709 62,264 61,724 224,095
Accrued interest and
dividends............ -- -- -- -- --
----------- ----------- ----------- ----------- ----------
Total receivables.... 72,166 89,169 108,506 101,976 283,275
----------- ----------- ----------- ----------- -----------
Net assets available for
benefits................. $10,077,499 $11,520,586 $13,360,696 $13,239,254 $47,979,592
=========== =========== =========== =========== ===========
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY
RETIREMENT GOVERNMENT U.S. EQUITY PARTICIPANTS'
MONEY MONEY INDEX LOAN
MARKET MARKET PORTFOLIO ACCOUNT
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
- ----------------- ------------------------------------------------------
Assets:
Investments at market
value.................. $23,490,236 $30,212,509 $7,479,999 $28,629,229
----------- ----------- ---------- -----------
Receivables
Employer's
contribution......... 26,355 36,658 28,512 --
Participants'
contributions........ 110,366 141,950 35,144 --
Accrued interest and
dividends............ -- -- -- 117,021
---------- ---------- ---------- ----------
Total receivables.... 136,721 178,608 63,656 117,021
---------- ---------- ---------- ----------
Net assets available for
benefits................. $23,626,957 $30,391,117 $7,543,655 $28,746,250
=========== =========== ========== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
3
<PAGE> 5
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
MERCK COMMON STOCK
-------------------------
(NON- FIDELITY FIDELITY FIDELITY
PARTICIPANT (PARTICIPANT FIDELITY EQUITY- GROWTH GROWTH &
DIRECTED; DIRECTED; MAGELLAN INCOME COMPANY INCOME
TOTAL SEE NOTE 1) SEE NOTE 1) FUND FUND FUND PORTFOLIO
------------ ------------ ------------ ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994
- ----------------- -------------------------------------------------
Assets:
Investments at market value....... $825,705,902 $179,741,791 $356,000,582 $102,167,054 $6,753,243 $13,132,424 $15,891,726
------------ ----------- ----------- ----------- --------- ---------- ----------
Receivables
Employer's contribution......... 1,306,537 1,306,537 -- -- -- -- --
Participants' contributions..... 4,808,902 -- 2,762,657 792,851 52,409 101,914 123,325
Accrued interest and dividends.. 4,362,375 1,413,086 2,810,697 -- -- -- --
------------ ----------- ----------- ----------- --------- ---------- ----------
Total receivables............. 10,477,814 2,719,623 5,573,354 792,851 52,409 101,914 123,325
------------ ----------- ----------- ----------- --------- ---------- ----------
Total assets.................. 836,183,716 182,461,414 361,573,936 102,959,905 6,805,652 13,234,338 16,015,051
------------ ----------- ----------- ----------- --------- ---------- ----------
Interfund (payable) receivable...... -- -- 171,632 (80,642) (158,538) (6,079) 26,823
------------ ----------- ----------- ----------- --------- ---------- ----------
Net assets available for benefits... $836,183,716 $182,461,414 $361,745,568 $102,879,263 $6,647,114 $13,228,259 $16,041,874
============ ============ ============ ============ ========== =========== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
4
<PAGE> 6
<TABLE>
<CAPTION>
FIDELITY FIDELITY
FIDELITY RETIREMENT FIDELITY FIDELITY FIDELITY RETIREMENT
INTERMEDIATE GROWTH OTC OVERSEAS BALANCED MONEY
BOND FUND FUND PORTFOLIO FUND FUND MARKET
------------ ---------- --------- ---------- ---------- -----------
(PARTICIPANT DIRECTED; SEE NOTE 1)
<S> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994
- ----------------- ----------------------------------------------------------------------------
Assets:
Investments at market value....... $5,933,665 $7,040,130 $5,453,349 $12,113,356 $46,358,382 $19,857,114
---------- ---------- ---------- ----------- ----------- -----------
Receivables
Employer's contribution......... -- -- -- -- -- --
Participants' contributions..... 46,046 54,636 42,321 94,004 359,752 153,865
Accrued interest and dividends.. -- -- -- -- -- --
---------- --------- --------- ---------- ---------- ----------
Total receivables............. 46,046 54,636 42,321 94,004 359,752 153,865
---------- --------- --------- ---------- ---------- ----------
Total assets.................. 5,979,711 7,094,766 5,495,670 12,207,360 46,718,134 20,010,979
---------- --------- --------- ---------- ---------- ----------
Interfund (payable) receivable...... (1,909) 18,261 5,333 (9,580) 45,979 123
---------- --------- --------- ---------- ---------- ----------
Net assets available for benefits... $5,977,802 $7,113,027 $5,501,003 $12,197,780 $46,764,113 $20,011,102
========== ========== ========== =========== =========== ===========
<CAPTION>
FIDELITY
RETIREMENT FIDELITY
GOVERNMENT U.S. EQUITY PARTICIPANTS'
MONEY INDEX LOAN
MARKET PORTFOLIO ACCOUNT
----------- ----------- ------------
<S> <C> <C> <C>
DECEMBER 31, 1994
- ----------------- ----------------------------------------
Assets:
Investments at market value....... $26,376,015 $2,635,577 $26,251,494
----------- ---------- -----------
Receivables
Employer's contribution......... -- -- --
Participants' contributions..... 204,670 20,452 --
Accrued interest and dividends.. -- -- 138,592
---------- --------- ----------
Total receivables............. 204,670 20,452 138,592
---------- --------- ----------
Total assets.................. 26,580,685 2,656,029 26,390,086
---------- --------- ----------
Interfund (payable) receivable...... (9,137) (2,266) --
---------- --------- ----------
Net assets available for benefits... $26,571,548 $2,653,763 $26,390,086
=========== ========== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
5
<PAGE> 7
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
MERCK COMMON STOCK FUND
-------------------------
(NON- FIDELITY FIDELITY FIDELITY
PARTICIPANT (PARTICIPANT FIDELITY EQUITY- GROWTH GROWTH &
DIRECTED; DIRECTED; MAGELLAN INCOME COMPANY INCOME
TOTAL SEE NOTE 1) SEE NOTE 1) FUND FUND FUND PORTFOLIO
-------------- ----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
- ---------------------------- --------------------------------------------------
Additions to net assets
attributed to:
Investment income
Net appreciation in market
value of investments....... $ 433,796,576 $ 36,825,118 $347,194,070 $ 28,616,682 $ 1,736,028 $ 4,444,288 $ 5,418,587
Interest..................... 2,091,669 177,243 1,059,223 325,277 32,663 63,165 66,599
Dividends.................... 32,021,542 3,606,188 9,406,926 8,351,350 627,517 1,183,600 1,407,536
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Total income on
investments.............. 467,909,787 40,608,549 357,660,219 37,293,309 2,396,208 5,691,053 6,892,722
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Contributions to the Plan
By participants.............. 68,397,620 -- 29,989,533 12,516,220 1,546,846 3,637,269 4,170,621
By the employer.............. 24,096,964 15,604,419 3,401,193 1,648,589 223,168 507,492 575,909
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Total contributions........ 92,494,584 15,604,419 33,390,726 14,164,809 1,770,014 4,144,761 4,746,530
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Total additions............ 560,404,371 56,212,968 391,050,945 51,458,118 4,166,222 9,835,814 11,639,252
-------------- ----------- ----------- ----------- ---------- ---------- ----------
Deductions from net assets
attributed to:
Benefits paid to
participants................. (62,030,062) (10,393,009) (30,386,420) (5,301,092) (419,992) (2,232,424) (928,012)
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Transfers among funds and plans:
Net reallocations.............. (16,599,137) (64,433,537) 34,262,428 (3,245,795) 1,518,613 5,311,798 4,282,360
Loans to participants.......... -- (1,139,299) (8,253,897) (2,006,559) (149,136) (368,836) (323,687)
Loan repayments by
participants................. -- 896,630 5,110,584 1,509,976 134,448 318,085 343,244
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Net transfers among funds
and plans................ (16,599,137) (64,676,206) 31,119,115 (3,742,378) 1,503,925 5,261,047 4,301,917
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Total deductions and net
transfers among funds
and plans................ (78,629,199) (75,069,215) 732,695 (9,043,470) 1,083,933 3,028,623 3,373,905
-------------- ------------ ------------ ------------ ----------- ----------- -----------
Net increase/(decrease).. 481,775,172 (18,856,247) 391,783,640 42,414,648 5,250,155 12,864,437 15,013,157
Net assets available for benefits
Beginning of year........ 836,183,716 182,461,414 361,745,568 102,879,263 6,647,114 13,228,259 16,041,874
-------------- ------------ ------------ ------------ ----------- ----------- -----------
End of year.............. $1,317,958,888 $163,605,167 $753,529,208 $145,293,911 $11,897,269 $26,092,696 $31,055,031
============== ============ ============ ============ =========== =========== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
6
<PAGE> 8
<TABLE>
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY FIDELITY FIDELITY
INTERMEDIATE GROWTH OTC OVERSEAS BALANCED
BOND FUND FUND PORTFOLIO FUND FUND
------------ ----------- ----------- ----------- -----------
(PARTICIPANT DIRECTED; SEE NOTE 1)
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
- ---------------------------- ----------------------------------------------------------------------
Additions to net assets
attributed to:
Investment income
Net appreciation in market
value of investments....... $ 429,797 $ 961,700 $ 1,786,549 $ 685,946 $ 4,454,594
Interest..................... 16,669 36,798 33,157 44,961 105,121
Dividends.................... 488,377 1,078,982 728,284 303,132 2,044,487
------------ ----------- ----------- ----------- -----------
Total income on
investments.............. 934,843 2,077,480 2,547,990 1,034,039 6,604,202
------------ ----------- ----------- ----------- -----------
Contributions to the Plan
By participants.............. 1,254,452 2,049,800 2,099,929 2,442,989 3,641,614
By the employer.............. 176,394 258,551 310,762 290,614 444,528
------------ ----------- ----------- ----------- -----------
Total contributions........ 1,430,846 2,308,351 2,410,691 2,733,603 4,086,142
------------ ----------- ----------- ----------- -----------
Total additions............ 2,365,689 4,385,831 4,958,681 3,767,642 10,690,344
------------ ----------- ----------- ----------- -----------
Deductions from net assets
attributed to:
Benefits paid to
participants................. (354,690) (364,604) (200,737) (516,251) (3,125,826)
------------ ----------- ----------- ----------- -----------
Transfers among funds and plans:
Net reallocations.............. 2,103,102 357,554 3,119,167 (2,115,074) (6,333,440)
Loans to participants.......... (99,917) (212,727) (184,468) (291,805) (509,710)
Loan repayments by
participants................. 85,513 241,505 167,050 196,962 494,111
------------ ----------- ----------- ----------- -----------
Net transfers among funds
and plans................ 2,088,698 386,332 3,101,749 (2,209,917) (6,349,039)
------------ ----------- ----------- ----------- -----------
Total deductions and net
transfers among funds
and plans................ 1,734,008 21,728 2,901,012 (2,726,168) (9,474,865)
------------ ----------- ----------- ----------- -----------
Net increase/(decrease).. 4,099,697 4,407,559 7,859,693 1,041,474 1,215,479
Net assets available for benefits
Beginning of year........ 5,977,802 7,113,027 5,501,003 12,197,780 46,764,113
------------ ----------- ----------- ----------- -----------
End of year.............. $ 10,077,499 $11,520,586 $13,360,696 $13,239,254 $47,979,592
============ =========== =========== =========== ===========
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY
RETIREMENT GOVERNMENT U.S. EQUITY PARTICIPANTS'
MONEY MONEY INDEX LOAN
MARKET MARKET PORTFOLIO ACCOUNT
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
- ---------------------------- ------------------------------------------------------
Additions to net assets
attributed to:
Investment income
Net appreciation in market
value of investments....... $ -- $ -- $ 1,243,217 $ --
Interest..................... 51,904 62,321 16,568 --
Dividends.................... 1,181,233 1,464,535 149,395 --
----------- ----------- ----------- ------------
Total income on
investments.............. 1,233,137 1,526,856 1,409,180 --
----------- ----------- ----------- ------------
Contributions to the Plan
By participants.............. 1,719,780 2,076,359 1,252,208 --
By the employer.............. 199,513 264,348 191,484 --
----------- ----------- ----------- ------------
Total contributions........ 1,919,293 2,340,707 1,443,692 --
----------- ----------- ----------- ------------
Total additions............ 3,152,430 3,867,563 2,852,872 --
----------- ----------- ----------- ------------
Deductions from net assets
attributed to:
Benefits paid to
participants................. (3,079,063) (2,469,683) (181,123) (2,077,136)
----------- ----------- ----------- ------------
Transfers among funds and plans:
Net reallocations.............. 3,687,360 2,594,557 2,213,399 78,371
Loans to participants.......... (349,419) (463,335) (82,719) 14,435,514
Loan repayments by
participants................. 204,547 290,467 87,463 (10,080,585)
----------- ----------- ----------- ------------
Net transfers among funds
and plans................ 3,542,488 2,421,689 2,218,143 4,433,300
----------- ----------- ----------- ------------
Total deductions and net
transfers among funds
and plans................ 463,425 (47,994) 2,037,020 2,356,164
----------- ----------- ----------- ------------
Net increase/(decrease).. 3,615,855 3,819,569 4,889,892 2,356,164
Net assets available for benefits
Beginning of year........ 20,011,102 26,571,548 2,653,763 26,390,086
----------- ----------- ----------- ------------
End of year.............. $23,626,957 $30,391,117 $ 7,543,655 $ 28,746,250
=========== =========== =========== ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
7
<PAGE> 9
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN:
The Merck & Co., Inc. Employee Savings and Security Plan (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. Through June 30, 1995, regular full-time,
part-time, and temporary employees of the Company and of certain wholly-owned
subsidiaries as defined by the Plan who had completed at least one year of
employment and were not covered by a collective bargaining agreement were
eligible to participate in the Plan. Effective July 1, 1995, these individuals
became 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. All costs of administering the Plan are borne by the Company.
CONTRIBUTIONS
Participants may contribute from 2% up to 15% of their base pay. In
addition, the Company matched 50% of employee contributions up to 5% of base pay
per pay period until June 30, 1995. Effective July 1, 1995, the Company match
was increased to 75% of employee contributions up to 6% of base pay per pay
period. Prior to July 1, 1995, Company matching contributions were invested
entirely in Merck Common Stock (Non-participant directed), and could not be
reallocated into any other investment option. Effective July 1, 1995, the
following age parameters were implemented for the investment of Company matching
contributions:
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).
Participants were also given the option to reallocate 50% of the existing
Company match balance to any of the available fund options.
Age 50 and above -- Participants were given the option to invest all
Company matching contributions in any of the available fund options (Participant
directed).
INVESTMENT OPTIONS
Participants direct the investment of their contributions into any
investment option including the Merck Common Stock Fund (Participant directed).
The following is a brief description of each option:
Merck Common Stock Fund
Effective October 5, 1995, investments in Merck Common Stock were
transferred to the Merck Common Stock Fund. The Merck Common Stock Fund invests
primarily in Merck Common Stock and a small portion of money market instruments
for liquidity. This liquidity allows for daily trading in the fund. Ownership is
measured in units rather than shares. An investment in this option allows the
participant to become a stockholder and part owner of the Company. The value of
the investment can go up or down depending on general factors affecting the
stock market and specific factors affecting the Company's business. This is
neither a mutual fund nor a diversified or managed investment option. Investing
in a non-diversified single stock involves more investment risk than investing
in a diversified fund.
8
<PAGE> 10
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Fidelity Magellan Fund
Funds are invested primarily in domestic and foreign common stock and
securities convertible into common stock. Up to 20% of assets may also be
invested in debt securities of all types and qualities issued by foreign and
domestic issuers if the fund manager believes they have potential for capital
appreciation.
Fidelity Equity-Income Fund
Funds are invested in income-producing equity securities. Normally, at
least 65% of the fund's assets will be invested in income producing equity
securities. The fund has the flexibility to invest the balance in all types of
domestic and foreign securities, including bonds.
Fidelity Growth Company Fund
Funds are invested primarily in common stock, and securities convertible
into common stock, of companies considered to have above-average growth
characteristics. These characteristics are most often associated with companies
in new and emerging areas of the economy, although the fund may also hold shares
in larger, mature or declining industry firms which have been revitalized.
Fidelity Growth & Income Portfolio
Funds are invested primarily in U.S. and foreign stocks, focusing on those
that pay current dividends and offer potential growth of earnings such as common
stocks, convertible securities, preferred stocks and warrants.
Fidelity Intermediate Bond Fund
This fund seeks high current income by investing in U.S. and foreign
investment grade debt securities rated Baa or better by Moody's or BBB or better
by Standard & Poor's. Investment securities include corporate bonds, mortgage
securities, bank obligations and U.S. government and agency securities, as well
as short-term investments. The fund's dollar-weighted average maturity will
range between three and ten years under normal circumstances.
Fidelity Retirement Growth Fund
Funds are invested primarily in common stocks of domestic or foreign
issuers, although they can be invested in all types of securities. Foreign
securities may involve a higher degree of risk. The fund's emphasis is on the
realization of capital gains rather than on dividend income.
Fidelity OTC Portfolio
Funds are invested primarily in securities traded on the over-the-counter
(OTC) securities market. These are frequently the securities of smaller or newer
companies whose instruments may have limited marketability and may be subject to
more erratic market movement.
Fidelity Overseas Fund
Funds are invested primarily in foreign securities.
9
<PAGE> 11
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Fidelity Balanced Fund
Funds are invested in a broadly diversified portfolio of high-yielding
securities, including common stocks, preferred stocks and bonds. The objective
is to provide a balanced investment in both stocks and bonds, thereby affording
the opportunity for capital growth and current income; however, at least 25% of
total assets will always be invested in fixed-income senior securities.
Fidelity Retirement Money Market
Funds are invested in high-quality U.S. dollar-denominated money market
instruments of U.S. and foreign issuers. Normally, the fund intends to invest
more than 25% of its total assets in obligations of institutions in the
financial services industry.
Fidelity Retirement Government Money Market
Funds are invested in obligations issued or guaranteed as to principal and
interest by the U.S. government, its agencies or instrumentalities, and in
repurchase agreements secured by these obligations. An investment in the
portfolio is not insured or guaranteed by the U.S. government.
Fidelity U.S. Equity Index Portfolio
Funds are primarily invested in securities of the companies which comprise
the S&P 500 Index.
VESTING
Participants are immediately vested in their contributions, all Company
matching contributions, plus actual earnings thereon.
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 fully vested in their account balances.
PARTICIPANTS' LOAN ACCOUNT
Participants may borrow from their account balances. 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.
Activity related to these borrowings is reflected in the Participants' Loan
Account column of the financial statements.
BENEFITS PAID TO PARTICIPANTS
In-service and termination distributions are made throughout the year in
accordance with applicable Plan provisions. At December 31, 1995 and 1994, net
assets available for benefits included distributions in process of payment of
$3,314,348 and $6,440,288, respectively.
2. SUMMARY OF ACCOUNTING POLICIES:
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. Dividend income is recorded on the ex-dividend
10
<PAGE> 12
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
date. The appreciation 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.
USE OF ESTIMATES
The financial statements are prepared in conformity with generally accepted
accounting principles and, accordingly, include amounts that are based on
management's best estimates and judgments.
3. INCOME TAXES:
Prior to December 31, 1995, the Plan was amended to meet certain
requirements of the Tax Reform Act of 1986. The Plan obtained a favorable tax
determination letter from the Internal Revenue Service on September 18, 1995,
and the Plan sponsor believes that the Plan continues to qualify and to operate
as designed.
4. OTHER MATTERS:
In January and February 1995, the Company sold its Calgon Vestal
Laboratories business and Kelco business, respectively. Pursuant to the Plan,
employees of these businesses who were participants in the Plan were entitled to
leave their account balances in the Plan with no further employee or Merck
matching contributions, or take distribution of their account balances as a lump
sum or ten year annuity.
On January 1, 1995, Merck transferred the employees of its Astra/Merck
Group into a joint venture that continued on as Astra Merck, Inc., in which
Merck and Astra AB each have 50% ownership. As part of this arrangement, the
account balances of the Plan participants employed by Astra/Merck Group were
transferred into a new savings plan affiliated with the joint venture.
Net reallocations in 1995 of ($16,599,137) consist of $1,076,434
transferred between the Plan and the Merck & Co., Inc. Employee Stock Purchase
and Savings Plan for employees who changed their status during the year,
($17,777,466) for Astra/Merck employees who were transferred into a new savings
plan for the joint venture Astra Merck, Inc., and other adjustments of $101,895.
11
<PAGE> 13
SCHEDULE I
EIN: 22-1109110
PLAN NO.: 001
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
ITEM 27A -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
NAME OF ISSUER UNITS/SHARES AT
AND TITLE OF ISSUE CLOSE OF PERIOD COST CURRENT VALUE
------------------ --------------- ---- -------------
<S> <C> <C> <C>
Merck Common Stock Fund............................................... 82,156,668 $420,984,365 $ 911,939,015
Fidelity Magellan Fund................................................ 1,679,245 112,722,841 144,381,469
Fidelity Equity-Income Fund........................................... 311,367 12,729,403 11,810,154
Fidelity Growth Company Fund.......................................... 713,552 27,749,867 25,894,841
Fidelity Growth & Income Portfolio.................................... 1,139,659 29,429,277 30,827,770
Fidelity Intermediate Bond Fund....................................... 961,127 9,157,450 10,005,333
Fidelity Retirement Growth Fund....................................... 628,446 11,755,038 11,431,417
Fidelity OTC Portfolio................................................ 436,934 13,077,881 13,252,190
Fidelity Overseas Fund................................................ 451,919 14,389,715 13,137,278
Fidelity Balanced Fund................................................ 3,527,834 40,331,078 47,696,317
Fidelity Retirement Money Market...................................... 23,490,236 20,830,580 23,490,236
Fidelity Retirement Government Money Market........................... 30,212,509 25,408,725 30,212,509
Fidelity U.S. Equity Index Portfolio.................................. 331,414 7,639,607 7,479,999
Participants' Loan Account (with interest rates ranging from 6.5% to
11.0%).............................................................. -- 28,629,229 28,629,229
----------- --------------
Total Investments............................................. $774,835,056 $1,310,187,757
=========== =============
</TABLE>
12
<PAGE> 14
SCHEDULE II
EIN: 22-1109110
PLAN NO.: 001
MERCK & CO., INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
ITEM 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CURRENT
VALUE
OF ASSETS
ON
IDENTITY OF PARTY INVOLVED PURCHASE SELLING COST OF TRANSACTION
AND DESCRIPTION OF ASSET PRICE PRICE ASSET DATE NET GAIN
- ----------------------------------------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Merck Common Stock
138 purchase transactions............. $ 64,223,092 $ -- $ 64,223,092 $ 64,223,092 $ --
101 sales transactions................ -- 892,905,316 872,570,388 892,905,316 20,334,928
Merck Common Stock Fund
58 purchase transactions.............. 850,140,885 -- 850,140,885 850,140,885 --
60 sales transactions................. -- 29,275,311 14,006,438 29,275,311 15,268,873
Fidelity Magellan Fund
244 purchase transactions............. 33,656,269 -- 33,656,269 33,656,269 --
227 sales transactions................ -- 20,058,535 17,193,527 20,058,535 2,865,008
</TABLE>
13
<PAGE> 15
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated May 22, 1996 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, 33-50667, 33-51235, 33-53463, 33-64273 and 33-64665) and on Form S-3
(Nos. 33-60322, 33-39349, 33-51785 and 33-57421). It should be noted that we
have not audited any financial statements of the Plan subsequent to December 31,
1995 or performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
New York, New York
June 21, 1996
<PAGE> 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)
<PAGE> 2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Merck & Co., Inc.:
We have audited the accompanying Statements of Net Assets Available for
Benefits of the Merck & Co., Inc. Employee Stock Purchase and Savings Plan as of
December 31, 1995 and 1994, and the related Statement of Changes in Net Assets
Available for Benefits for the year ended December 31, 1995. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules 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, 1995 and 1994, and the changes in its net assets available for
benefits for the year ended December 31, 1995, 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 supplemental Schedules of
Assets Held for Investment Purposes and Reportable Transactions are presented
for purposes 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. The fund information in the
Statements of Net Assets Available for Benefits and the Statement of Changes in
Net Assets Available for Benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The supplemental
schedules and fund information have been 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.
ARTHUR ANDERSEN LLP
New York, New York
May 22, 1996
1
<PAGE> 3
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
MERCK COMMON STOCK FUND
------------------------
(NON-
PARTICIPANT FIDELITY FIDELITY FIDELITY
DIRECTED; (PARTICIPANT FIDELITY EQUITY- GROWTH GROWTH &
SEE NOTE DIRECTED; MAGELLAN INCOME COMPANY INCOME
TOTAL 1) SEE NOTE 1) FUND FUND FUND PORTFOLIO
----------- ---------- ----------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1995
- ----------------- ------------------------------------------
Assets:
Investments at market value.............. $162,873,709 $38,672,420 $100,656,597 $6,961,838 $457,255 $503,394 $989,067
------------ ----------- ------------ ---------- -------- -------- --------
Receivables
Employer's contribution................ 60,176 60,176 -- -- -- -- --
Participants' contributions............ 299,114 -- 251,458 17,392 1,142 1,258 2,471
Accrued interest and dividends......... 8,025 -- 2,339 -- -- -- --
------------ ---------- ----------- --------- -------- -------- --------
Total receivables.................... 367,315 60,176 253,797 17,392 1,142 1,258 2,471
------------ ---------- ----------- --------- -------- -------- --------
Net assets available for benefits.......... $163,241,024 $38,732,596 $100,910,394 $6,979,230 $458,397 $504,652 $991,538
============ =========== ============ ========== ======== ======== ========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
2
<PAGE> 4
<TABLE>
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY FIDELITY FIDELITY
INTERMEDIATE GROWTH OTC OVERSEAS BALANCED
BOND FUND FUND PORTFOLIO FUND FUND
------------ ---------- --------- -------- ----------
(PARTICIPANT DIRECTED; SEE NOTE 1)
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1995
- ----------------- -------------------------------------------------------------
Assets:
Investments at market value.............. $299,003 $509,817 $325,866 $577,768 $3,553,980
------------ ---------- --------- -------- ----------
Receivables
Employer's contribution................ -- -- -- -- --
Participants' contributions............ 747 1,274 814 1,443 8,878
Accrued interest and dividends......... -- -- -- -- --
------------ ---------- --------- -------- ----------
Total receivables.................... 747 1,274 814 1,443 8,878
------------ ---------- --------- -------- ----------
Net assets available for benefits.......... $299,750 $511,091 $326,680 $579,211 $3,562,858
=========== ========== ======== ======== =========
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY
RETIREMENT GOVERNMENT U.S. EQUITY PARTICIPANTS'
MONEY MONEY INDEX LOAN
MARKET MARKET PORTFOLIO ACCOUNT
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
- ----------------- ------------------------------------------------------
Assets:
Investments at market value.............. $ 961,593 $3,735,338 $ 201,511 $4,468,262
----------- ----------- ----------- ------------
Receivables
Employer's contribution................ -- -- -- --
Participants' contributions............ 2,402 9,332 503 --
Accrued interest and dividends......... -- -- -- 5,686
----------- ----------- ----------- ------------
Total receivables.................... 2,402 9,332 503 5,686
----------- ----------- ----------- ------------
Net assets available for benefits.......... $ 963,995 $3,744,670 $ 202,014 $4,473,948
=========== =========== ========== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
3
<PAGE> 5
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
MERCK COMMON STOCK
-------------------------
(NON- FIDELITY FIDELITY FIDELITY
PARTICIPANT (PARTICIPANT FIDELITY EQUITY- GROWTH GROWTH &
DIRECTED; DIRECTED; MAGELLAN INCOME COMPANY INCOME
TOTAL SEE NOTE 1) SEE NOTE 1) FUND FUND FUND PORTFOLIO
----------- ----------- ----------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994
- ----------------- --------------------------------------------
Assets:
Investments at market value............ $94,912,564 $21,868,484 $55,135,649 $4,728,739 $290,147 $260,399 $471,847
----------- ----------- ----------- ---------- -------- -------- --------
Receivables
Employer's contribution.............. 75,655 75,655 -- -- -- -- --
Participants' contributions.......... 363,400 -- 286,057 24,521 1,504 1,350 2,447
Accrued interest and dividends....... 608,859 171,021 432,152 -- -- -- --
----------- ----------- ----------- ---------- -------- -------- --------
Total receivables.................. 1,047,914 246,676 718,209 24,521 1,504 1,350 2,447
----------- ----------- ----------- ---------- -------- -------- --------
Total assets....................... 95,960,478 22,115,160 55,853,858 4,753,260 291,651 261,749 474,294
----------- ----------- ----------- ---------- -------- -------- --------
Interfund (payable) receivable........... -- -- 3,543 (3,543) -- -- --
----------- ----------- ----------- ---------- -------- -------- --------
Net assets available for benefits........ $95,960,478 $22,115,160 $55,857,401 $4,749,717 $291,651 $261,749 $474,294
=========== =========== =========== ========== ======== ======== ========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
4
<PAGE> 6
<TABLE>
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY FIDELITY FIDELITY
INTERMEDIATE GROWTH OTC OVERSEAS BALANCED
BOND FUND FUND PORTFOLIO FUND FUND
------------ ---------- --------- -------- ----------
(PARTICIPANT DIRECTED; SEE NOTE 1)
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1994
- ----------------- -------------------------------------------------------------
Assets:
Investments at market value............ $228,837 $346,486 $165,543 $487,879 $3,321,250
---------- --------- -------- -------- ----------
Receivables
Employer's contribution.............. -- -- -- -- --
Participants' contributions.......... 1,186 1,797 859 2,530 17,221
Accrued interest and dividends....... -- -- -- -- --
---------- --------- -------- -------- ----------
Total receivables.................. 1,186 1,797 859 2,530 17,221
---------- --------- -------- -------- ----------
Total assets....................... 230,023 348,283 166,402 490,409 3,338,471
---------- --------- -------- -------- ----------
Interfund (payable) receivable........... -- -- -- -- --
---------- --------- -------- -------- ----------
Net assets available for benefits........ $230,023 $348,283 $166,402 $490,409 $3,338,471
========== ========= ======== ======== ==========
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY
RETIREMENT GOVERNMENT U.S. EQUITY PARTICIPANTS'
MONEY MONEY INDEX LOAN
MARKET MARKET PORTFOLIO ACCOUNT
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
- ----------------- ------------------------------------------------------
Assets:
Investments at market value............ $872,469 $3,675,593 $86,251 $2,972,991
---------- ---------- ---------- -----------
Receivables
Employer's contribution.............. -- -- -- --
Participants' contributions.......... 4,425 19,056 447 --
Accrued interest and dividends....... -- -- -- 5,686
---------- ---------- ---------- -----------
Total receivables.................. 4,425 19,056 447 5,686
---------- ---------- ---------- -----------
Total assets....................... 876,894 3,694,649 86,698 2,978,677
---------- ---------- ---------- -----------
Interfund (payable) receivable........... -- -- -- --
---------- ---------- ---------- -----------
Net assets available for benefits........ $876,894 $3,694,649 $86,698 $2,978,677
========== ========== ========== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
5
<PAGE> 7
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
MERCK COMMON STOCK FUND
-------------------------
(NON- FIDELITY FIDELITY FIDELITY
PARTICIPANT (PARTICIPANT FIDELITY EQUITY- GROWTH GROWTH &
DIRECTED; DIRECTED; MAGELLAN INCOME COMPANY INCOME
TOTAL SEE NOTE 1) SEE NOTE 1) FUND FUND FUND PORTFOLIO
----------- ----------- ----------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
- ---------------------------- -------------------------------------------
Additions to net assets attributed to:
Investment income
Net appreciation in market value of
investments.......................... $ 59,793,579 $16,048,422 $ 41,561,927 $1,355,431 $ 80,317 $ 86,755 $167,381
Interest............................... 284,164 54,884 177,995 16,910 775 1,388 2,092
Dividends.............................. 2,944,880 545,142 1,399,561 401,313 26,192 23,823 43,619
------------ ----------- ------------ ---------- -------- -------- --------
Total income on investments.......... 63,022,623 16,648,448 43,139,483 1,773,654 107,284 111,966 213,092
------------ ----------- ------------ ---------- -------- -------- --------
Contributions to the Plan
By participants........................ 10,135,678 -- 7,171,246 1,026,944 90,168 127,946 202,417
By the employer........................ 2,096,084 2,096,084 -- -- -- -- --
------------ ----------- ------------ ---------- -------- -------- --------
Total contributions.................. 12,231,762 2,096,084 7,171,246 1,026,944 90,168 127,946 202,417
------------ ----------- ------------ ---------- -------- -------- --------
Total additions...................... 75,254,385 18,744,532 50,310,729 2,800,598 197,452 239,912 415,509
------------ ----------- ------------ ---------- -------- -------- --------
Deductions from net assets attributed to:
Benefits paid to participants............ (6,897,405) (1,684,529) (3,842,330) (316,302) (14,327) (9,471) (11,808)
------------ ----------- ------------ ---------- -------- -------- --------
Transfers among funds and plans:
Net reallocations........................ (1,076,434) (225,165) (268,899) (179,474) (11,687) 23,938 121,349
Loans to participants.................... -- (469,316) (2,000,011) (169,275) (7,950) (17,254) (14,739)
Loan repayments by participants.......... -- 251,914 853,504 93,966 3,258 5,778 6,933
------------ ----------- ------------ ---------- -------- -------- --------
Net transfers among funds and plans.. (1,076,434) (442,567) (1,415,406) (254,783) (16,379) 12,462 113,543
------------ ----------- ------------ ---------- -------- -------- --------
Total deductions and net
transfers among funds and plans.... (7,973,839) (2,127,096) (5,257,736) (571,085) (30,706) 2,991 101,735
------------ ----------- ------------ ---------- -------- -------- --------
Net increase....................... 67,280,546 16,617,436 45,052,993 2,229,513 166,746 242,903 517,244
Net assets available for benefits
Beginning of year.................. 95,960,478 22,115,160 55,857,401 4,749,717 291,651 261,749 474,294
------------ ----------- ------------ ---------- -------- -------- --------
End of year........................ $163,241,024 $38,732,596 $100,910,394 $6,979,230 $458,397 $504,652 $991,538
============ =========== ============ ========== ======== ======== ========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
6
<PAGE> 8
<TABLE>
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY FIDELITY FIDELITY
INTERMEDIATE GROWTH OTC OVERSEAS BALANCED
BOND FUND FUND PORTFOLIO FUND FUND
------------ ------------ ------------ ------------ ------------
(PARTICIPANT DIRECTED; SEE FOOTNOTE 1)
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
- ---------------------------- --------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income
Net appreciation in market value of
investments.......................... $ 14,592 $ 41,670 $ 52,417 $ 28,213 $ 320,734
Interest............................... 268 1,367 1,705 2,673 10,679
Dividends.............................. 16,349 47,092 18,005 13,137 150,808
-------- -------- -------- -------- ----------
Total income on investments.......... 31,209 90,129 72,127 44,023 482,221
-------- -------- -------- -------- ----------
Contributions to the Plan
By participants........................ 64,320 135,910 108,069 168,523 381,359
By the employer........................ -- -- -- -- --
-------- -------- -------- -------- ----------
Total contributions.................. 64,320 135,910 108,069 168,523 381,359
-------- -------- -------- -------- ----------
Total additions...................... 95,529 226,039 180,196 212,546 863,580
-------- -------- -------- -------- ----------
Deductions from net assets attributed to:
Benefits paid to participants............ (23,255) (9,560) (8,872) (9,295) (389,023)
-------- -------- -------- -------- ----------
Transfers among funds and plans:
Net reallocations........................ (1,749) (39,950) (9,099) (102,300) (202,159)
Loans to participants.................... (1,814) (19,975) (6,349) (22,336) (92,528)
Loan repayments by participants.......... 1,016 6,254 4,402 10,187 44,517
-------- -------- -------- -------- ----------
Net transfers among funds and plans.. (2,547) (53,671) (11,046) (114,449) (250,170)
-------- -------- -------- -------- ----------
Total deductions and net
transfers among funds and plans.... (25,802) (63,231) (19,918) (123,744) (639,193)
-------- -------- -------- -------- ----------
Net increase....................... 69,727 162,808 160,278 88,802 224,387
Net assets available for benefits
Beginning of year.................. 230,023 348,283 166,402 490,409 3,338,471
-------- -------- -------- -------- ----------
End of year........................ $299,750 $511,091 $326,680 $579,211 $3,562,858
======== ======== ======== ======== ==========
<CAPTION>
FIDELITY
FIDELITY RETIREMENT FIDELITY
RETIREMENT GOVERNMENT U.S. EQUITY PARTICIPANTS'
MONEY MONEY INDEX LOAN
MARKET MARKET PORTFOLIO ACCOUNT
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
- ---------------------------- -------------------------------------------------------------
Additions to net assets attributed to:
Investment income
Net appreciation in market value of
investments.......................... $ -- $ -- $ 35,720 $ --
Interest............................... 2,911 10,274 243 --
Dividends.............................. 54,417 201,248 4,174 --
--------- ---------- -------- -----------
Total income on investments.......... 57,328 211,522 40,137 --
--------- ---------- -------- -----------
Contributions to the Plan
By participants........................ 144,783 460,261 53,732 --
By the employer........................ -- -- -- --
--------- ---------- -------- -----------
Total contributions.................. 144,783 460,261 53,732 --
--------- ---------- -------- -----------
Total additions...................... 202,111 671,783 93,869 --
--------- ---------- -------- -----------
Deductions from net assets attributed to:
Benefits paid to participants............ (109,182) (323,281) (8,888) (137,282)
--------- ---------- -------- -----------
Transfers among funds and plans:
Net reallocations........................ 932 (217,164) 34,993 --
Loans to participants.................... (22,638) (129,021) (5,606) 2,978,812
Loan repayments by participants.......... 15,878 47,704 948 (1,346,259)
--------- ---------- -------- -----------
Net transfers among funds and plans.. (5,828) (298,481) 30,335 1,632,553
--------- ---------- -------- -----------
Total deductions and net
transfers among funds and plans.... (115,010) (621,762) 21,447 1,495,271
--------- ---------- -------- -----------
Net increase....................... 87,101 50,021 115,316 1,495,271
Net assets available for benefits
Beginning of year.................. 876,894 3,694,649 86,698 2,978,677
--------- ---------- -------- -----------
End of year........................ $ 963,995 $3,744,670 $202,014 $ 4,473,948
========= ========== ======== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
7
<PAGE> 9
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN:
The Merck & Co., Inc. Employee Stock Purchase and Savings Plan (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, 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. All costs of administering the Plan are borne by the Company.
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 5% of base pay per pay period, or contributions of a
predetermined dollar amount negotiated with each bargaining group, whichever is
less. Pursuant to current collective bargaining agreements, the Company match is
subject to a monthly cap of $60. Company matching contributions are invested
entirely in the Merck Common Stock Fund (Non-participant directed), and may not
be reallocated into any other investment option.
INVESTMENT OPTIONS
Participants direct the investment of their contributions into any
investment option including the Merck Common Stock Fund (Participant directed).
The following is a brief description of each option:
Merck Common Stock Fund
Effective October 5, 1995, investments in Merck Common Stock were
transferred to the Merck Common Stock Fund. The Merck Common Stock Fund invests
primarily in Merck Common Stock and a small portion of money market instruments
for liquidity. This liquidity allows for daily trading in the fund. Ownership is
measured in units rather than shares. An investment in this option allows the
participant to become a stockholder and part owner of the Company. The value of
the investment can go up or down depending on general factors affecting the
stock market and specific factors affecting the Company's business. This is
neither a mutual fund nor a diversified or managed investment option. Investing
in a non-diversified single stock involves more investment risk than investing
in a diversified fund.
Fidelity Magellan Fund
Funds are invested primarily in domestic and foreign common stock and
securities convertible into common stock. Up to 20% of assets may also be
invested in debt securities of all types and qualities issued by foreign and
domestic issuers if the fund manager believes they have potential for capital
appreciation.
Fidelity Equity-Income Fund
Funds are invested in income-producing equity securities. Normally, at
least 65% of the fund's assets will be invested in income producing equity
securities. The fund has the flexibility to invest the balance in all types of
domestic and foreign securities, including bonds.
8
<PAGE> 10
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Fidelity Growth Company Fund
Funds are invested primarily in common stock, and securities convertible
into common stock, of companies considered to have above-average growth
characteristics. These characteristics are most often associated with companies
in new and emerging areas of the economy, although the fund may also hold shares
in larger, mature or declining industry firms which have been revitalized.
Fidelity Growth & Income Portfolio
Funds are invested primarily in U.S. and foreign stocks, focusing on those
that pay current dividends and offer potential growth of earnings such as common
stocks, convertible securities, preferred stocks and warrants.
Fidelity Intermediate Bond Fund
This fund seeks high current income by investing in U.S. and foreign
investment grade debt securities rated Baa or better by Moody's or BBB or better
by Standard & Poor's. Investment securities include corporate bonds, mortgage
securities, bank obligations and U.S. government and agency securities, as well
as short-term investments. The fund's dollar-weighted average maturity will
range between three and ten years under normal circumstances.
Fidelity Retirement Growth Fund
Funds are invested primarily in common stocks of domestic or foreign
issuers, although they can be invested in all types of securities. Foreign
securities may involve a higher degree of risk. The fund's emphasis is on the
realization of capital gains rather than on dividend income.
Fidelity OTC Portfolio
Funds are invested primarily in securities traded on the over-the-counter
(OTC) securities market. These are frequently the securities of smaller or newer
companies whose instruments may have limited marketability and may be subject to
more erratic market movement.
Fidelity Overseas Fund
Funds are invested primarily in foreign securities.
Fidelity Balanced Fund
Funds are invested in a broadly diversified portfolio of high-yielding
securities, including common stocks, preferred stocks and bonds. The objective
is to provide a balanced investment in both stocks and bonds, thereby affording
the opportunity for capital growth and current income; however, at least 25% of
total assets will always be invested in fixed-income senior securities.
Fidelity Retirement Money Market
Funds are invested in high-quality U.S. dollar-denominated money market
instruments of U.S. and foreign issuers. Normally, the fund intends to invest
more than 25% of its total assets in obligations of institutions in the
financial services industry.
9
<PAGE> 11
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Fidelity Retirement Government Money Market
Funds are invested in obligations issued or guaranteed as to principal and
interest by the U.S. government, its agencies or instrumentalities, and in
repurchase agreements secured by these obligations. An investment in the
portfolio is not insured or guaranteed by the U.S. government.
Fidelity U.S. Equity Index Portfolio
Funds are primarily invested in securities of the companies which comprise
the S&P 500 Index.
VESTING
Participants are immediately vested in their contributions, all Company
matching contributions, plus actual earnings thereon.
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 fully vested in their account balances.
PARTICIPANTS' LOAN ACCOUNT
Participants may borrow from their account balances. 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.
Activity related to these borrowings is reflected in the Participants' Loan
Account column of the financial statements.
BENEFITS PAID TO PARTICIPANTS
In-service and termination distributions are made throughout the year in
accordance with applicable Plan provisions. At December 31, 1995 and 1994, net
assets available for benefits included distributions in process of payment of
$772,218 and $432,726, respectively.
2. SUMMARY OF ACCOUNTING POLICIES:
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. Dividend income is recorded on the ex-dividend date. The appreciation 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.
USE OF ESTIMATES
The financial statements are prepared in conformity with generally accepted
accounting principles and, accordingly, include amounts that are based on
management's best estimates and judgments.
3. INCOME TAXES:
Prior to December 31, 1995, the Plan was amended to meet certain
requirements of the Tax Reform Act of 1986. The Plan obtained a favorable tax
determination letter from the Internal Revenue Service on September 18, 1995,
and the Plan sponsor believes that the Plan continues to qualify and to operate
as designed.
10
<PAGE> 12
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
4. OTHER MATTERS:
In January and February 1995, the Company sold its Calgon Vestal
Laboratories business and Kelco business, respectively. Pursuant to the Plan,
employees of these businesses who were participants in the Plan were entitled to
leave their account balances in the Plan with no further employee or Merck
matching contributions, or take distribution of their account balances as a lump
sum or ten year annuity.
On January 1, 1995, Merck transferred the employees of its Astra/Merck
Group into a joint venture that continued on as Astra Merck, Inc., in which
Merck and Astra AB each have 50% ownership. As part of this arrangement, the
account balances of the Plan participants employed by Astra/Merck Group were
transferred into a new savings plan affiliated with the joint venture.
Net reallocations in 1995 of ($1,076,434) 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.
11
<PAGE> 13
SCHEDULE I
EIN: 22-1109110
PLAN NO.: 004
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
ITEM 27A -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
NAME OF ISSUER UNITS/SHARES AT
AND TITLE OF ISSUE CLOSE OF PERIOD COST CURRENT VALUE
------------------ ---------------- ---------- -------------
<S> <C> <C> <C>
Merck Common Stock Fund............................................. 12,552,164 $66,569,825 $139,329,017
Fidelity Magellan Fund.............................................. 80,970 5,702,272 6,961,838
Fidelity Equity-Income Fund......................................... 12,055 481,250 457,255
Fidelity Growth Company Fund........................................ 13,872 531,845 503,394
Fidelity Growth & Income Portfolio.................................. 36,563 850,428 989,067
Fidelity Intermediate Bond Fund..................................... 28,723 320,314 299,003
Fidelity Retirement Growth Fund..................................... 28,027 531,843 509,817
Fidelity OTC Portfolio.............................................. 10,744 328,540 325,866
Fidelity Overseas Fund.............................................. 19,875 501,989 577,768
Fidelity Balanced Fund.............................................. 262,868 3,315,489 3,553,980
Fidelity Retirement Money Market.................................... 961,593 708,934 961,593
Fidelity Retirement Government Money Market......................... 3,735,338 3,509,414 3,735,338
Fidelity U.S. Equity Index Portfolio................................ 8,929 185,937 201,511
Participants' Loan Account (with interest rates ranging from 9.5% to
10.0%)............................................................ -- 4,468,262 4,468,262
----------- ------------
Total Investments........................................... $88,006,342 $162,873,709
=========== ============
</TABLE>
12
<PAGE> 14
SCHEDULE II
EIN: 22-1109110
PLAN NO.: 004
MERCK & CO., INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
ITEM 27D -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CURRENT
VALUE
IDENTITY OF PARTY INVOLVED PURCHASE SELLING COST OF OF ASSETS ON
AND DESCRIPTION OF ASSET PRICE PRICE ASSET TRANSACTION DATE NET GAIN
- -------------------------------------------- ----------- ----------- ----------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Merck Common Stock
91 purchase transactions................ $ 10,816,158 $ -- $ 10,816,158 $ 10,816,158 $ --
64 sales transactions................... -- 131,835,406 129,354,460 131,835,406 $2,480,946
Merck Common Stock Fund
56 purchase transactions................ 128,467,090 -- 128,467,090 128,467,090 $ --
52 sales transactions................... -- 2,733,306 1,566,619 2,733,306 $1,166,687
</TABLE>
13
<PAGE> 15
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated May 22, 1996 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, 33-50667, 33-51235, 33-53463, 33-64273 and 33-64665) and on Form S-3
(Nos. 33-60322, 33-39349, 33-51785 and 33-57421). It should be noted that we
have not audited any financial statements of the Plan subsequent to December 31,
1995 or performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
New York, New York
June 21, 1996
<PAGE> 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
---------------------
HUBBARD FARMS, INC. EMPLOYEE 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)
<PAGE> 2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Merck & Co., Inc.:
We have audited the accompanying Statements of Net Assets Available for
Benefits of the Hubbard Farms, Inc. Employee Savings Plan as of December 31,
1995 and 1994, and the related Statement of Changes in Net Assets Available for
Benefits for the year ended December 31, 1995. These financial statements and
the schedules referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements and
schedules 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, 1995 and 1994, and the changes in its net assets available for
benefits for the year ended December 31, 1995, 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 supplemental Schedules of
Assets Held for Investment Purposes and Reportable Transactions are presented
for purposes 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. The fund information in the
Statements of Net Assets Available for Benefits and the Statement of Changes in
Net Assets Available for Benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The supplemental
schedules and fund information have been 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.
ARTHUR ANDERSEN LLP
New York, New York
May 22, 1996
1
<PAGE> 3
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
(SEE NOTE 1)
<TABLE>
<CAPTION>
MERCK FIDELITY FIDELITY FIDELITY PARTICIPANTS'
COMMON MAGELLAN BALANCED INTERMEDIATE FIDELITY DAILY LOAN
TOTAL STOCK FUND FUND BOND FUND INCOME TRUST ACCOUNT
---------- ---------- -------- -------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1995
Assets:
Investments at market value..... $2,553,713 $1,351,070 $592,921 $220,473 $160,011 $190,826 $ 38,412
---------- ---------- -------- -------- -------- -------- --------
Receivables
Participants' contributions... 3,495 1,318 981 449 199 548 --
Dividends receivable.......... 6,937 6,937 -- -- -- -- --
---------- ---------- -------- -------- -------- -------- --------
Total receivables......... 10,432 8,255 981 449 199 548 --
---------- ---------- -------- -------- -------- -------- --------
Net assets available for
benefits........................ $2,564,145 $1,359,325 $593,902 $220,922 $160,210 $191,374 $ 38,412
========== ========== ======== ======== ======== ======== ========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
2
<PAGE> 4
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
(SEE NOTE 1)
<TABLE>
<CAPTION>
MERCK FIDELITY FIDELITY FIDELITY PARTICIPANTS'
COMMON MAGELLAN BALANCED INTERMEDIATE FIDELITY DAILY LOAN
TOTAL STOCK FUND FUND BOND FUND INCOME TRUST ACCOUNT
--------- -------- -------- -------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994
Assets:
Investments at market value...... $1,548,095 $687,504 $383,324 $170,914 $132,943 $147,068 $ 26,342
---------- -------- -------- -------- -------- -------- --------
Receivables
Participants' contributions.... 3,563 1,209 1,135 383 284 552 --
Dividends receivable........... 5,431 5,431 -- -- -- -- --
---------- -------- -------- -------- -------- -------- --------
Total receivables.......... 8,994 6,640 1,135 383 284 552 --
---------- -------- -------- -------- -------- -------- --------
Net assets available for
benefits......................... $1,557,089 $694,144 $384,459 $171,297 $133,227 $147,620 $ 26,342
========== ======== ======== ======== ======== ======== ========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
3
<PAGE> 5
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(SEE NOTE 1)
<TABLE>
<CAPTION>
MERCK FIDELITY FIDELITY FIDELITY PARTICIPANTS'
COMMON MAGELLAN BALANCED INTERMEDIATE FIDELITY DAILY LOAN
TOTAL STOCK FUND FUND BOND FUND INCOME TRUST ACCOUNT
--------- --------- -------- -------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
Additions to net assets attributed
to:
Investment income
Net appreciation in market value
of investments................. $ 697,921 $ 549,771 $120,699 $ 18,998 $ 8,453 $ -- $ --
Interest......................... 2,249 895 708 227 84 335 --
Dividends........................ 87,205 25,568 33,869 9,050 9,480 9,238 --
---------- ---------- -------- -------- -------- -------- --------
Total income on investments.... 787,375 576,234 155,276 28,275 18,017 9,573 --
---------- ---------- -------- -------- -------- -------- --------
Contributions to the Plan by
participants..................... 402,177 156,152 116,059 55,506 29,593 44,867 --
---------- ---------- -------- -------- -------- -------- --------
Total additions................ 1,189,552 732,386 271,335 83,781 47,610 54,440 --
---------- ---------- -------- -------- -------- -------- --------
Deductions from net assets attributed
to:
Benefits paid to participants...... (182,496) (73,061) (48,908 ) (30,840) (15,681) (10,150) (3,856)
---------- ---------- -------- -------- -------- -------- --------
Transfers among funds:
Net reallocations................ -- 7,946 (1,431) (486) (3,860) (2,169) --
Loans to participants............ -- (9,219) (18,425) (4,139) (2,617) -- 34,400
Loan repayments by
participants................... -- 7,129 6,872 1,309 1,531 1,633 (18,474)
---------- ---------- -------- -------- -------- -------- --------
Net transfers among funds...... -- 5,856 (12,984) (3,316) (4,946) (536) 15,926
---------- ---------- -------- -------- -------- -------- --------
Total deductions and net
transfers among funds........ (182,496) (67,205) (61,892) (34,156) (20,627) (10,686) 12,070
---------- ---------- -------- -------- -------- -------- --------
Net increase................. 1,007,056 665,181 209,443 49,625 26,983 43,754 12,070
Net assets available for benefits
Beginning of year............ 1,557,089 694,144 384,459 171,297 133,227 147,620 26,342
---------- ---------- -------- -------- -------- -------- --------
End of year.................. $2,564,145 $1,359,325 $593,902 $220,922 $160,210 $191,374 $ 38,412
========== ========== ======== ======== ======== ======== ========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
financial statement.
4
<PAGE> 6
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN:
The Hubbard Farms, Inc. (the "Company") Employee Savings Plan (the "Plan")
was designed to provide an easy, economical way for employees to become
stockholders of Merck & Co., Inc., the parent of the Company, as well as a
systematic means of saving and investing for the future. Regular full-time and
part-time employees of the Company and its domestic wholly-owned subsidiaries as
defined by the Plan are eligible to participate in the Plan the 1st of January
or the 1st of July following their date of hire.
The Plan is administered by a management committee appointed by the Board
of Directors of the Company. All costs of administering the Plan are borne by
the Company.
CONTRIBUTIONS
Participants may contribute from 2% up to 15% of their base pay. Effective
January 1, 1996, a Company matching provision was added to the Plan which
matches 50% of employee contributions up to 5% of base pay per pay period.
INVESTMENT OPTIONS
Participants direct the investment of their contributions in 10 percent
increments into any investment option, including Merck Common Stock (Participant
directed). The following is a brief description of the options available in
1995.
Merck Common Stock
This portfolio consists of shares of Merck Common Stock.
Fidelity Magellan Fund
Funds are invested primarily in domestic and foreign common stock and
securities convertible into common stock. Up to 20% of assets may also be
invested in debt securities of all types and qualities issued by foreign
and domestic issuers if the fund manager believes they have potential for
capital appreciation.
Fidelity Balanced Fund
Funds are invested in broadly diversified portfolio of high-yielding
securities, including common stocks, preferred stocks and bonds. The
objective is to provide a balanced investment in both stocks and bonds,
thereby affording the opportunity for capital growth and current income;
however, at least 25% of total assets will always be invested in
fixed-income senior securities.
Fidelity Intermediate Bond Fund
This fund seeks high current income by investing in U.S. and foreign
investment grade debt securities rated Baa or better by Moody's or BBB or
better by Standard & Poor's. Investment securities include corporate bonds,
mortgage securities, bank obligations and U.S. government and agency
securities, as well as short-term investments. The fund's dollar-weighted
average maturity will range between three and ten years under normal
circumstances.
Fidelity Daily Income Trust
Funds are invested in a broad range of both government and private
issuer short-term U.S. dollar-denominated money market instruments maturing
in one year or less. This investment option was eliminated from the Plan
effective January 1, 1996.
5
<PAGE> 7
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Effective January 1, 1996, Fidelity Retirement Government Money Market,
Fidelity Growth & Income Portfolio, Fidelity Growth Company Fund, Fidelity OTC
Portfolio, and Fidelity Overseas Fund were added to the Plan's investment
options. These new Plan offerings are described below:
Fidelity Retirement Government Money Market
Funds are invested in obligations issued or guaranteed as to principal
and interest by the U.S. government, its agencies or instrumentalities, and
in repurchase agreements secured by these obligations. An investment in the
portfolio is not insured or guaranteed by the U.S. government.
Fidelity Growth & Income Portfolio
Funds are invested primarily in U.S. and foreign stocks, focusing on
those that pay current dividends and offer potential growth of earnings
such as common stocks, convertible securities, preferred stocks and
warrants.
Fidelity Growth Company Fund
Funds are invested primarily in common stock, and securities
convertible into common stock, of companies considered to have
above-average growth characteristics. These characteristics are most often
associated with companies in new and emerging areas of the economy,
although the fund may also hold shares in larger, mature or declining
industry firms which have been revitalized.
Fidelity OTC Portfolio
Funds are invested primarily in securities traded on the
over-the-counter (OTC) securities market. These are frequently the
securities of smaller or newer companies whose instruments may have limited
marketability and may be subject to more erratic market movement.
Fidelity Overseas Fund
Funds are invested primarily in foreign securities.
VESTING
Participants are immediately vested in their contributions, all Company
matching contributions, plus actual earnings thereon.
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 fully vested in their account balances.
BENEFITS PAID TO PARTICIPANTS
In-service and termination distributions are made throughout the year in
accordance with applicable Plan provisions. At December 31, 1995, net assets
available for benefits included distributions in process of payment of $27,437.
6
<PAGE> 8
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
PARTICIPANTS' LOAN ACCOUNT
Participants may borrow against their account balances. The minimum loan is
$1,000 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. Activity related to these borrowings is reflected in the
Participants' Loan Account column of the financial statements.
2. SUMMARY OF ACCOUNTING POLICIES:
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. Dividend income is recorded on the ex-dividend date. The appreciation 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.
USE OF ESTIMATES
The financial statements are prepared in conformity with generally accepted
accounting principles and, accordingly, include amounts that are based on
management's best estimates and judgments.
3. INCOME TAXES:
Prior to December 31, 1995, the Plan was amended to meet certain
requirements of the Tax Reform Act of 1986. The Plan obtained a favorable tax
determination letter from the Internal Revenue Service on January 31, 1996.
Therefore, the Plan is considered qualified and tax-exempt as of the financial
statement date.
7
<PAGE> 9
SCHEDULE I
EIN: 02-0314630
PLAN NO.: 008
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
ITEM 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
NAME OF ISSUER SHARES AT
AND TITLE OF ISSUE CLOSE OF PERIOD COST CURRENT VALUE
------------------ --------------- ---------- -------------
<S> <C> <C> <C>
Merck Common Stock.................................................. 20,588 $ 788,552 $ 1,351,070
Fidelity Magellan Fund.............................................. 6,896 485,220 592,921
Fidelity Balanced Fund.............................................. 16,307 205,872 220,473
Fidelity Intermediate Bond Fund..................................... 15,371 158,116 160,011
Fidelity Daily Income Trust......................................... 190,699 190,699 190,826
Participants' Loan Account (with interest rates ranging from 6.5% to
10.0%)............................................................ -- 38,412 38,412
---------- -----------
Total Investments........................................... $1,866,871 $ 2,553,713
========== ===========
</TABLE>
8
<PAGE> 10
SCHEDULE II
EIN: 02-0314630
PLAN NO.: 008
HUBBARD FARMS, INC.
EMPLOYEE SAVINGS PLAN
ITEM 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CURRENT
VALUE
IDENTITY OF PARTY INVOLVED PURCHASE SELLING COST OF OF ASSETS ON
AND DESCRIPTION OF ASSET PRICE PRICE ASSET TRANSACTION DATE NET GAIN
- ------------------------------------------------------- -------- ------- -------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Merck Common Stock
72 purchase transactions........................... $196,292 $ -- $196,292 $196,292 $ --
17 sales transactions.............................. -- 82,360 52,153 82,360 30,207
Fidelity Magellan Fund
74 purchase transactions........................... 161,886 -- 161,886 161,886 --
22 sales transactions.............................. -- 72,988 55,769 72,988 17,219
Fidelity Balanced Fund
62 purchase transactions........................... 66,100 -- 66,100 66,100 --
11 sales transactions.............................. -- 35,539 34,102 35,539 1,437
Fidelity Intermediate Bond Fund
69 purchase transactions........................... 40,772 -- 40,772 40,772 --
8 sales transactions.............................. -- 22,158 22,116 22,158 42
Fidelity Daily Income Trust
70 purchase transactions........................... 56,098 -- 56,098 56,098 --
6 sales transactions.............................. -- 12,467 12,467 12,467 --
</TABLE>
9
<PAGE> 11
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated May 22, 1996 included in the financial
statements and exhibits required by Form 11-K Annual Report for the Hubbard
Farms, Inc. Employee Savings Plan into Merck & Co., Inc.'s previously filed
Registration Statements on Form S-8 (Nos. 33-21087, 33-21088, 33-36101,
33-40177, 33-50667, 33-51235, 33-53463, 33-64273 and 33-64665) and on Form S-3
(Nos. 33-60322, 33-39349, 33-51785 and 33-57421). It should be noted that we
have not audited any financial statements of the Plan subsequent to December 31,
1995 or performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
New York, New York
June 21, 1996
