<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
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)
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Financial Statements and Supplemental Schedules
Years Ended December 31, 1998, 1997, and 1996
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors........................................................ 1
Audited Financial Statements
Statements of Assets Available for Benefits with Fund Information..................... 3
Statements of Changes in Assets Available for Benefits with Fund Information.......... 4
Notes to Financial Statements......................................................... 7
Supplemental Schedules
Line 27a - Schedule of Assets Held for Investment Purposes............................ 15
Line 27d - Schedule of Reportable Transactions........................................ 16
</TABLE>
<PAGE>
Report of Independent Auditors
The Administrative Committee
Immunex Corporation
Profit Sharing 401(k) Plan and Trust
We have audited the accompanying statements of assets available for benefits
of Immunex Corporation Profit Sharing 401(k) Plan and Trust (the Plan) as of
December 31, 1998 and 1997, and the related statement of changes in assets
available for benefits for each of the three years in the period ended
December 31, 1998. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, assets available for benefits of the Plan at December
31, 1998 and 1997, and the changes in its assets available for benefits for
each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31, 1998 and
of reportable transactions for the year then ended are presented for the
purpose of additional analysis and are not a required part of the financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The Fund Information in the
statements of assets available for benefits and the statements of changes in
assets available for benefits is presented for the purpose of additional
analysis rather than to present the assets available for benefits and changes
in assets available for benefits of each fund. The supplemental schedules and
Fund Information have been subjected to the auditing procedures applied in
our audits of the financial statements and, in our opinion, are fairly stated
in all material respects in relation to the financial statements taken as a
whole.
1
<PAGE>
The schedule of assets held for investment purposes that accompanies the
Plan's financial statements does not disclose the historical cost of certain
Plan assets held by the Plan Trustee. Also, the information presented in the
schedule of reportable transactions does not disclose the cost of sales
transactions and the related net gain or loss. Disclosure of this information
is required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974.
ERNST & YOUNG LLP
Seattle, Washington
May 14, 1999
2
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Statements of Assets Available for Benefits with Fund Information
<TABLE>
<CAPTION>
CRABBE
SCHWAB FIDELITY PIMCO DODGE & HUSON
SCHWAB INST. ADV. GROWTH AND TOTAL COX CORE
DECEMBER 31, 1998 CASH MONEY INCOME RETURN BALANCED EQUITY
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Interest-bearing cash $ 4,844 $1,103,744 $ - $ - $ - $ -
Mutual funds - - 26,464,677 1,438,967 4,343,404 4,334,382
Corporate stock - common - - - - - -
Participant loans - - - - - -
--------------------------------------------------------------------------------
Total investments 4,844 1,103,744 26,464,677 1,438,967 4,343,404 4,334,382
Receivables:
Employee contributions - 15,913 51,203 5,979 10,865 2,245
Employer contributions - 7,475 22,372 2,891 5,099 1,668
--------------------------------------------------------------------------------
Assets available for benefits $ 4,844 $1,127,132 $ 26,538,252 $1,447,837 $4,359,368 $4,338,295
================================================================================
</TABLE>
<TABLE>
<CAPTION>
RAINIER
SMALL/MID
CAPITAL EUROPACIFIC IMMUNEX PARTICIPANT
DECEMBER 31, 1998 EQUITY GROWTH STOCK LOANS TOTAL
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Interest-bearing cash $ - $ - $ - $ - $ 1,108,588
Mutual funds 10,957,661 5,350,493 - - 52,889,584
Corporate stock - common - - 4,328,579 - 4,328,579
Participant loans - - - 810,743 810,743
-----------------------------------------------------------------
Total investments 10,957,661 5,350,493 4,328,579 810,743 59,137,494
Receivables:
Employee contributions 31,887 20,028 9,788 (9,113) 138,795
Employer contributions 13,956 8,614 - - 62,075
-----------------------------------------------------------------
Assets available for benefits $11,003,504 $5,379,135 $4,338,367 $ 801,630 $59,338,364
=================================================================
</TABLE>
<TABLE>
<CAPTION>
CRABBE
SCHWAB FIDELITY PIMCO DODGE & HUSON
SCHWAB INST. ADV. GROWTH AND TOTAL COX CORE
DECEMBER 31, 1997 CASH MONEY INCOME RETURN BALANCED EQUITY
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Interest-bearing cash $187,274 $ 690,840 $ - $ - $ - $ -
Mutual funds - - 18,903,724 399,895 3,446,010 5,683,517
Corporate stock - common - - - - - -
Participant loans - - - - - -
--------------------------------------------------------------------------------
Total investments 187,274 690,840 18,903,724 399,895 3,446,010 5,683,517
Transfers (182,103) 2,232 63,832 2,723 13,315 25,120
--------------------------------------------------------------------------------
Assets available for benefits $ 5,171 $ 693,072 $ 18,967,556 $ 402,618 $3,459,325 $5,708,637
================================================================================
</TABLE>
<TABLE>
<CAPTION>
RAINIER
SMALL/MID
CAPITAL EUROPACIFIC IMMUNEX PARTICIPANT
DECEMBER 31, 1997 EQUITY GROWTH STOCK LOANS TOTAL
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Interest-bearing cash $ - $ - $ $ - $ 878,114
Mutual funds 10,163,905 3,978,525 - - 42,575,576
Corporate stock - common - - 1,280,934 - 1,280,934
Participant loans - - - 707,484 707,484
-----------------------------------------------------------------
Total investments 10,163,905 3,978,525 1,280,934 707,484 45,442,108
Transfers 47,458 26,233 10,302 (9,112) 0
-----------------------------------------------------------------
Assets available for benefits $10,211,363 $4,004,758 $1,291,236 $ 698,372 $45,442,108
=================================================================
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Statements of Changes in Assets Available for Benefits with Fund Information
<TABLE>
<CAPTION>
CRABBE
SCHWAB FIDELITY PIMCO DODGE & HUSON
SCHWAB INST. ADV. GROWTH AND TOTAL COX CORE
YEAR ENDED DECEMBER 31, 1998 CASH MONEY INCOME RETURN BALANCED EQUITY
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Interest $ - $ - $ - $ - $ - $ -
Dividends - 44,149 1,359,452 102,990 355,524 188,323
Net realized and unrealized
appreciation (depreciation) - - 4,259,906 (23,661) (98,962) (821,119)
--------------------------------------------------------------------------------
Total investment income 0 44,149 5,619,358 79,329 256,562 (632,796)
Contributions:
Employer - 37,505 710,371 50,916 151,675 263,267
Employee - 71,759 1,585,733 99,814 321,522 579,134
Rollovers - 38,373 128,424 51,582 42,782 56,316
--------------------------------------------------------------------------------
Total contributions 0 147,637 2,424,528 202,312 515,979 898,717
--------------------------------------------------------------------------------
Total additions 0 191,786 8,043,886 281,641 772,541 265,921
DEDUCTIONS
Benefits paid to participants - (25,290) (1,017,783) (36,731) (159,410) (274,508)
Administrative expenses - (272) (2,259) (190) (479) (686)
--------------------------------------------------------------------------------
Total deductions - (25,562) (1,020,042) (36,921) (159,889) (275,194)
Net transfers (to) from other funds (327) 267,836 546,852 800,499 287,391 (1,361,069)
--------------------------------------------------------------------------------
Increase (decrease) in assets
available for benefits (327) 434,060 7,570,696 1,045,219 900,043 (1,370,342)
Assets available for benefits:
Beginning of year 5,171 693,072 18,967,556 402,618 3,459,325 5,708,637
--------------------------------------------------------------------------------
End of year $4,844 $1,127,132 $26,538,252 $1,447,837 $4,359,368 $4,338,295
================================================================================
</TABLE>
<TABLE>
<CAPTION>
RAINIER
SMALL/MID
CAPITAL EUROPACIFIC IMMUNEX PARTICIPANT
YEAR ENDED DECEMBER 31, 1998 EQUITY GROWTH STOCK LOANS TOTAL
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Interest $ - $ - $ - $ 72,133 $ 72,133
Dividends 402,061 276,692 - - 2,729,191
Net realized and unrealized
appreciation (depreciation) (161,187) 376,574 2,347,609 - 5,879,160
-----------------------------------------------------------------
Total investment income 240,874 653,266 2,347,609 72,133 8,680,484
Contributions:
Employer 548,190 276,506 105,781 - 2,144,211
Employee 1,199,448 612,147 239,431 - 4,708,988
Rollovers 69,778 53,243 67,911 - 508,409
-----------------------------------------------------------------
Total contributions 1,817,416 941,896 413,123 0 7,361,608
-----------------------------------------------------------------
Total additions 2,058,290 1,595,162 2,760,732 72,133 16,042,092
DEDUCTIONS
Benefits paid to participants (367,415) (175,831) (47,290) (35,129) (2,139,387)
Administrative expenses (1,608) (955) - - (6,449)
-----------------------------------------------------------------
Total deductions (369,023) (176,786) (47,290) (35,129) (2,145,836)
Net transfers (to) from other funds (897,126) (43,999) 333,689 66,254 -
-----------------------------------------------------------------
Increase (decrease) in assets
available for benefits 792,141 1,374,377 3,047,131 103,258 13,896,256
Assets available for benefits:
Beginning of year 10,211,363 4,004,758 1,291,236 698,372 45,442,108
-----------------------------------------------------------------
End of year $11,003,504 $5,379,135 $4,338,367 $ 801,630 $59,338,364
=================================================================
</TABLE>
4
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Statements of Changes in Assets Available for Benefits with Fund Information
(continued)
<TABLE>
<CAPTION>
CRABBE
SCHWAB FIDELITY PIMCO DODGE & HUSON
SCHWAB INST. ADV. GROWTH AND TOTAL COX CORE
YEAR ENDED DECEMBER 31, 1997 CASH MONEY INCOME RETURN BALANCED EQUITY
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Interest $ 205 $ - $ - $ - $ - $ -
Dividends - 31,562 846,674 17,686 261,991 1,148,362
Net realized and unrealized
appreciation (depreciation) - - 3,421,134 2,890 308,843 (27,570)
--------------------------------------------------------------------------------
Total investment income 205 31,562 4,267,808 20,576 570,834 1,120,792
Contributions:
Employer - 21,762 610,064 29,032 124,560 257,278
Employee - 48,288 1,368,241 59,100 265,962 566,547
Rollovers (11,245) 184 234,644 15,674 87,648 71,310
--------------------------------------------------------------------------------
Total contributions (11,245) 70,234 2,212,949 103,806 478,170 895,135
--------------------------------------------------------------------------------
Total additions (11,040) 101,796 6,480,757 124,382 1,049,004 2,015,927
DEDUCTIONS
Benefits paid to participants - (21,586) (724,541) (2,173) (137,241) (225,960)
Administrative expenses - (475) (3,448) (164) (790) (1,506)
--------------------------------------------------------------------------------
Total deductions 0 (22,061) (727,989) (2,337) (138,031) (227,466)
Net transfers (to) from other funds - 85,972 (481,093) 76,189 10,262 (268,079)
--------------------------------------------------------------------------------
Increase (decrease) in assets
available for benefits (11,040) 165,707 5,271,675 198,234 921,235 1,520,382
Assets available for benefits:
Beginning of year 16,211 527,365 13,695,881 204,384 2,538,090 4,188,255
--------------------------------------------------------------------------------
End of year $ 5,171 $ 693,072 $18,967,556 $ 402,618 $3,459,325 $5,708,637
================================================================================
</TABLE>
<TABLE>
<CAPTION>
RAINIER
SMALL/MID
CAPITAL EUROPACIFIC IMMUNEX PARTICIPANT
YEAR ENDED DECEMBER 31, 1997 EQUITY GROWTH STOCK LOANS TOTAL
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Interest $ - $ - $ - $ 59,192 $ 59,397
Dividends 941,906 337,866 - - 3,586,047
Net realized and unrealized
appreciation (depreciation) 1,426,629 (37,425) 453,535 - 5,548,036
-----------------------------------------------------------------
Total investment income 2,368,535 300,441 453,535 59,192 9,193,480
Contributions:
Employer 473,532 251,754 49,331 - 1,817,313
Employee 1,055,779 571,624 112,761 - 4,048,302
Rollovers 176,548 93,535 81,125 - 749,423
-----------------------------------------------------------------
Total contributions 1,705,859 916,913 243,217 0 6,615,038
-----------------------------------------------------------------
Total additions 4,074,394 1,217,354 696,752 59,192 15,808,518
DEDUCTIONS
Benefits paid to participants (460,255) (194,050) (40,988) (60,826) (1,867,620)
Administrative expenses (2,176) (790) - - (9,349)
-----------------------------------------------------------------
Total deductions (462,431) (194,840) (40,988) (60,826) (1,876,969)
Net transfers (to) from other funds (17,634) (63,233) 491,920 165,696 0
-----------------------------------------------------------------
Increase (decrease) in assets
available for benefits 3,594,329 959,281 1,147,684 164,062 13,931,549
Assets available for benefits:
Beginning of year 6,617,034 3,045,477 143,552 534,310 31,510,559
-----------------------------------------------------------------
End of year $ 10,211,363 $4,004,758 $1,291,236 $ 698,372 $45,442,108
=================================================================
</TABLE>
5
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Statements of Changes in Assets Available for Benefits with Fund Information
(continued)
<TABLE>
<CAPTION>
INVESCO
STRATEGIC FIDELITY
HEALTH GROWTH AND BALANCED PRINCIPAL SCHWAB IMMUNEX
YEAR ENDED DECEMBER 31, 1996 SCIENCES INCOME JANUS PORTFOLIO PRESERVATION CASH STOCK
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Interest $ 2,255 $ 13,328 $ 3,825 $ 46,824 $ 34,206 $ 4,103 $ -
Dividends - 688,327 - 13,598 - - -
Net realized and unrealized appreciation
(depreciation) 128,766 1,661,788 414,956 166,968 (20,105) - 41,268
-----------------------------------------------------------------------------------------
Total investment income 131,021 2,363,443 418,781 227,390 14,101 4,103 41,268
Contributions:
Employer 123,733 749,688 203,030 102,842 28,989 - 11,301
Employee 271,681 1,619,107 442,649 203,379 58,273 - 25,596
Rollovers 55,234 145,775 54,111 33,166 9,927 12,108 111
-----------------------------------------------------------------------------------------
Total contributions 450,648 2,514,570 699,790 339,387 97,189 12,108 37,008
-----------------------------------------------------------------------------------------
Total additions 581,669 4,878,013 1,118,571 566,777 111,290 16,211 78,276
DEDUCTIONS
Benefits paid to participants (145,804) (1,294,551) (333,557) (206,691) (108,820) - (183)
Administrative expenses - (559) - (16,313) (1,268) - -
-----------------------------------------------------------------------------------------
Total deductions (145,804) (1,295,110) (333,557) (223,004) (110,088) 0 (183)
Net transfers (to) from other funds (2,464,540) (2,927,911) (4,634,405) (3,524,352) (1,038,972) - 65,459
-----------------------------------------------------------------------------------------
Increase (decrease) in assets available
for benefits (2,028,675) 654,992 (3,849,391) (3,180,579) (1,037,770) 16,211 143,552
Assets available for benefits:
Beginning of year 2,028,675 13,040,889 3,849,391 3,180,579 1,037,770 - -
-----------------------------------------------------------------------------------------
End of year $ 0 $13,695,881 $ 0 $ 0 $ 0 $16,211 $143,552
=========================================================================================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
<TABLE>
<CAPTION>
CRABBE RAINIER
SCHWAB PIMCO DODGE & HUSON SMALL/MID
INST. ADV. TOTAL COX CORE CAPITAL EUROPACIFIC PARTICIPANT
MONEY RETURN BALANCED EQUITY EQUITY GROWTH LOANS TOTAL
- -----------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ 14,680 $ - $ - $ - $ - $ - $ 45,154 $ 164,375
- 5,619 67,424 325,184 323,749 82,655 - 1,506,556
- 5,350 141,341 (37,662) 461,470 127,826 - 3,091,966
- -----------------------------------------------------------------------------------------------------------
14,680 10,969 208,765 287,522 785,219 210,481 45,154 4,762,897
(34,000) 10,294 47,068 109,952 191,017 103,771 - 1,647,685
20,531 19,196 103,990 238,869 420,080 229,022 - 3,652,373
- 3,488 7,974 39,021 52,708 26,247 - 439,870
- -----------------------------------------------------------------------------------------------------------
(13,469) 32,978 159,032 387,842 663,805 359,040 0 5,739,928
- -----------------------------------------------------------------------------------------------------------
1,211 43,947 367,797 675,364 1,449,024 569,521 45,154 10,502,825
(21,674) - (64,052) (243,877) (109,938) (814) (35,521) (2,565,482)
- - (44) (123) (268) (56) - (18,631)
- -----------------------------------------------------------------------------------------------------------
(21,674) 0 (64,096) (244,000) (110,206) (870) (35,521) (2,584,113)
547,828 160,437 2,234,389 3,756,891 5,278,216 2,476,826 70,134 0
- -----------------------------------------------------------------------------------------------------------
527,365 204,384 2,538,090 4,188,255 6,617,034 3,045,477 79,767 7,918,712
- - - - - - 454,543 23,591,847
- -----------------------------------------------------------------------------------------------------------
$527,365 $204,384 $2,538,090 $4,188,255 $6,617,034 $3,045,477 $534,310 $31,510,559
===========================================================================================================
</TABLE>
6
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements
December 31, 1998
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 agreement 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 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 preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts in the statement of assets available for
benefits and the statement of changes in assets available for benefits, as
well as the amounts disclosed in the financial statement footnotes. Actual
results could differ from those estimates.
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.
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
7
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
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, 1998 and 1997.
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.
8
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements (continued)
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
years ended December 31, 1998, 1997, and 1996 were $144,275, $132,263, and
$88,172, respectively.
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. DESCRIPTION OF INVESTMENTS
Investments are stated at fair value. Shares of mutual funds are valued at
quoted market prices, which represent the net asset values of shares held by
the Plan. Participant loans are valued at their outstanding balance, which
approximates fair value. Purchases and sales of investments are recorded on
the trade dates with realized gains and losses based on the average cost of
the investments.
Interest-bearing cash consists of highly liquid, short-term investments with
purchased maturity dates of less than three months.
Participant loans consist of the principal balance of loans outstanding to
the Plan participants.
Participants may invest in one or more of the following funds:
SCHWAB INSTITUTIONAL ADVANTAGE MONEY MARKET FUND - The Schwab Institutional
Advantage Money Market Fund consists primarily of bank certificates of
deposit; commercial paper rated in the top two rating categories by any
nationally recognized statistical rating organization; obligations of, or
guaranteed by, the U.S. or Canadian governments, their agencies, or
instrumentalities; and repurchase agreements involving obligations that are
suitable for investment under the preceding categories. The primary
9
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements (continued)
2. DESCRIPTION OF INVESTMENTS (CONTINUED)
objective of this fund is maximum current income consistent with liquidity
and stability of capital. Charles Schwab 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.
CRABBE HUSON CORE EQUITY FUND - The Crabbe Huson Core Equity Fund consists of
a portfolio of common stocks that are widely and actively traded, and foreign
securities. The primary objective of this fund is to seek long-term capital
appreciation and the preservation of capital.
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.
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.
10
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements (continued)
2. DESCRIPTION OF INVESTMENTS (CONTINUED)
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. As the Immunex
Corporation is the Plan Sponsor, all related transactions qualify as
transactions with a party-in-interest.
3. INVESTMENTS
The fair value of investments that represent 5% or more of the Plan's assets
available for benefits at December 31 are as follows:
<TABLE>
<CAPTION>
1998 1997
------------------------------------
<S> <C> <C>
Dodge & Cox Balanced Fund $ 4,343,404 $ 3,446,010
Crabbe Huson Core Equity Fund 4,334,382 5,683,517
Rainier Small/Mid Cap Equity Fund 10,957,661 10,163,905
EuroPacific Growth Fund 5,350,493 3,978,525
Fidelity Growth and Income Fund 26,464,677 18,903,724
Immunex Corporation common stock 4,328,579 -
</TABLE>
11
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
During the years ended December 31, 1998, 1997, and 1996, the Plan's
investments (including investments bought and sold, as well as held, during
the year) appreciated in fair value as follows:
<TABLE>
<CAPTION>
NET APPRECIATION
IN FAIR VALUE
DURING THE FAIR VALUE
DECEMBER 31, 1998 YEAR AT YEAR-END
------------------------------------
<S> <C> <C>
Investments at fair value as determined by quoted market price:
Interest-bearing cash $ - $ 1,108,588
Mutual funds 3,531,551 52,889,584
Common stock - Immunex Corporation 2,347,609 4,328,579
------------------------------------
5,879,160 58,326,751
Investments at estimated fair value - participant loans - 810,743
------------------------------------
$ 5,879,160 $ 59,137,494
====================================
DECEMBER 31, 1997
Investments at fair value as determined by quoted market price:
Interest-bearing cash $ - $ 878,114
Mutual funds 5,094,501 42,575,576
Common stock - Immunex Corporation 453,535 1,280,934
------------------------------------
5,548,036 44,734,624
Investments at estimated fair value - participant loans - 707,484
------------------------------------
$ 5,548,036 $ 45,442,108
====================================
DECEMBER 31, 1996
Investments at fair value as determined by quoted market price:
Interest-bearing cash $ - $ 554,457
Mutual funds 3,050,698 30,137,388
Common stock - Immunex Corporation 41,268 141,082
------------------------------------
3,091,966 30,832,927
Investments at estimated fair value - participant loans - 542,163
------------------------------------
$ 3,091,966 $ 31,375,090
====================================
</TABLE>
12
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements (continued)
4. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
------------------------------------
<S> <C> <C>
Assets available for benefits per the
financial statements $ 59,338,364 $ 45,442,108
Amounts allocated to withdrawn participants (510,264) (355,551)
------------------------------------
Assets available for benefits per the Form 5500 $ 58,828,100 $ 45,086,557
====================================
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
<S> <C>
Benefits paid to participants per the financial statements $ 2,139,387
Add: amounts allocated on the Form 5500 to withdrawn participants
at December 31, 1998 510,264
Less: amounts allocated on the Form 5500 to withdrawn participants
at December 31, 1997 (355,551)
-------------------
Benefits paid to participants per the Form 5500 in 1998 $ 2,294,100
===================
Benefits paid to participants per the financial statements $ 1,867,620
Add: amounts allocated on the Form 5500 to withdrawn participants
at December 31, 1997 355,551
Less: amounts allocated on the Form 5500 to withdrawn participants
at December 31, 1996 (228,326)
-------------------
Benefits paid to participants per the Form 5500 in 1997 $ 1,994,845
===================
Benefits paid to participants per the financial statements $ 2,565,482
Add: amounts allocated on the Form 5500 to withdrawn participants
at December 31, 1996 228,326
Less: amounts allocated on the Form 5500 to withdrawn participants
at December 31, 1995 (511,111)
-------------------
Benefits paid to participants per the Form 5500 in 1996 $ 2,282,697
===================
</TABLE>
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.
13
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Notes to Financial Statements (continued)
5. INCOME TAX STATUS
The Internal Revenue Service has determined and informed Immunex Corporation
(the Plan Sponsor) by a letter dated November 30, 1995 that the Plan and
related trust are designed in accordance with applicable sections of the IRC.
The Plan has been amended since receiving the determination letter. However,
the Plan administrator believes that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the IRC.
6. SUBSEQUENT EVENTS
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 BNY Western Trust Company (the new
Trustee). The transfer did not affect dollar amounts audited by independent
auditors in the current year.
7. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical
data processing systems. The project also includes determining whether
third-party service providers have reasonable plans in place to become year
2000 compliant. The Plan Sponsor currently expects the project to be
substantially complete by early 1999. The Plan Sponsor does not expect this
project to have a significant effect on the Plan's operations.
14
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Line 27a - Schedule of Assets Held for Investment Purposes
(EIN: 51-0346580, PN: 001)
December 31, 1998
<TABLE>
<CAPTION>
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF (d) (e)
(a) IDENTITY OF ISSUE, BORROWER, OR SIMILAR PARTY INTEREST, PAR, OR MATURITY VALUE COST** MARKET VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest-bearing cash:
* Schwab Inst. Advantage Money Fund 1,103,744 units $ $ 1,103,744
* Schwab Money Market Fund and Cash 4,844 units 4,844
-----------------------------
Total cash and cash equivalents 1,108,588
Common stock:
* Immunex Corporation common stock 34,406 units 4,328,579
Mutual Funds:
EuroPacific Growth 188,398 units 5,350,493
Crabbe Huson Core Equity 263,971 units 4,334,382
Dodge & Cox Balanced 66,596 units 4,343,404
Fidelity Growth and Income 577,327 units 26,464,677
PIMCO Total Return 136,524 units 1,438,967
Rainier Small/Mid Capital Equity 493,811 units 10,957,661
-----------------------------
Total mutual funds 52,889,584
* Participant loans - participants Interest at prime plus 2%
maturity through 2007 810,743
-----------------------------
Total assets held for investment $ $ 59,137,494
=============================
</TABLE>
* Denotes party-in-interest.
** Historical cost information is not available from the Plan Trustee.
15
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Line 27d - Schedule of Reportable Transactions
(EIN: 51-0346580, PN: 001)
Year Ended December 31, 1998
<TABLE>
<CAPTION>
(h)
CURRENT
(f) VALUE OF
(a) (b) (c) (d) (e) EXPENSES (g) ASSET ON
IDENTITY OF PARTY INVOLVED DESCRIPTION OF PURCHASE SELLING LEASE INCURRED WITH COST OF TRANSACTION (i)
AND DESCRIPTION OF ASSET ASSET PRICE PRICE RENTAL TRANSACTION ASSET DATE NET GAIN
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Category (iii) - A series of transactions in excess of 5% of Plan assets.
- -------------------------------------------------------------------------
Fidelity Growth and Income Fund Mutual fund $5,845,806 $ $5,845,806 $5,845,806
Fidelity Growth and Income Fund Mutual fund 2,544,759 * 2,544,759 *
Crabbe Huson Core Equity Fund Mutual fund 1,463,781 1,463,781 1,463,781
Crabbe Huson Core Equity Fund Mutual fund 1,864,741 * 1,864,741 *
Rainier Small/Mid Capital Equity Fund Mutual fund 2,797,727 2,797,727 2,797,727
Rainier Small/Mid Capital Equity Fund Mutual fund 1,842,780 * 1,842,780 *
There were no Category (i), (ii), or (iv) reportable transactions during 1998.
- ------------------------------------------------------------------------------
</TABLE>
* Historical cost information is not available from the Plan Trustee.
16
<PAGE>
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: November 18, 1999 /s/ David A. Mann
-------------------------- ------------------------------------
David A. Mann
Senior Vice President, Finance
Chief Financial Officer
Date: November 18, 1999 /s/ Kathy Spencer
-------------------------- ------------------------------------
Kathy Spencer
Vice President, Human Resources
Date: November 18, 1999 /s/ Michael Mumford
-------------------------- ------------------------------------
Michael Mumford
Vice President, Manufacturing
<PAGE>
Immunex Corporation Profit Sharing 401(k) Plan and Trust
Exhibit Index
23.1 Consent of Ernst & Young LLP, Independent Auditors
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-77341) pertaining to the Immunex Corporation Profit Sharing
401(k) Plan and Trust of our report dated May 14, 1999 with respect to the
financial statements and schedules of Immunex Corporation Profit Sharing
401(k) Plan and Trust included in this Annual Report (Form 11-K) for the year
ended December 31, 1998.
Seattle, Washington ERNST & YOUNG LLP
November 18, 1999
