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