SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File Number: 1-09623
IVAX CORPORATION
EMPLOYEE SAVINGS PLAN
(Full Title of the Plan)
IVAX CORPORATION
4400 Biscayne Boulevard, Miami, Florida 33137
(Name and principal executive office of the issuer of the securities held
pursuant to the Plan)
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Administrator of the IVAX Corporation Employee Savings Plan has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
IVAX CORPORATION EMPLOYEE
SAVINGS PLAN
By: IVAX CORPORATION,
PLAN ADMINISTRATOR
Date: June 28, 2000 By: /s/ Thomas E. Beier
-------------------
Thomas E. Beier,
Senior Vice President-Finance
and Chief Financial Officer
<PAGE>
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1999 AND 1998
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Administrator of the
IVAX Corporation Employee Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the IVAX Corporation Employee Savings Plan (the "Plan") as of December 31,
1999 and 1998, and the related statements of changes in net assets available for
benefits for the years then ended. 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions are presented for the
purpose 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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules 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
Miami, Florida,
June 15, 2000.
<PAGE>
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
------------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
ASSETS:
Cash $ 52,555 $ 38,810
--------------- ---------------
Investments, at market value-
Shares of common/collective trust 4,936,933 5,207,824
Shares of registered investment companies 15,839,563 15,102,328
Loans to participants 595,475 642,935
Employer securities 5,341,336 2,508,841
--------------- ---------------
Total investments 26,713,307 23,461,928
--------------- ---------------
Receivables-
Employer contributions 736,205 667,354
Due from employer - 45,900
--------------- ---------------
Total receivables 736,205 713,254
--------------- ---------------
Net assets available for benefits $ 27,502,067 $ 24,213,992
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
For the Years Ended
December 31,
------------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions-
Employee $ 1,863,010 $ 1,973,096
Employer 736,205 617,157
Employee rollovers - 514,932
Investment income-
Net appreciation (depreciation) in market
value of investments 4,358,661 (1,126,876)
Interest 56,849 66,265
Dividends 1,858,515 1,130,976
--------------- ---------------
Total additions 8,873,240 3,175,550
--------------- ---------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants (5,496,109) (10,284,431)
Administrative expenses (3,749) (3,535)
--------------- ---------------
Total deductions (5,499,858) (10,287,966)
--------------- ---------------
Net increase (decrease) prior to
transfers from the Plan 3,373,382 (7,112,416)
TRANSFERS FROM THE PLAN (Note 1) (85,307) (1,882,607)
--------------- ---------------
Net increase (decrease) 3,288,075 (8,995,023)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 24,213,992 33,209,015
--------------- ---------------
End of year $ 27,502,067 $ 24,213,992
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. DESCRIPTION
a. General
Effective January 1, 1987, the IVAX Corporation Employee Savings Plan (the
"Plan") was established as a defined contribution 401(k) plan to cover eligible
employees of IVAX Corporation (the "Employer"). The Employer serves as the Plan
Administrator. Effective January 1, 1995, the Plan was amended and restated and
Merrill Lynch Trust Company ("Merrill Lynch") was appointed trustee and
custodian of the Plan trust fund.
The following description provides only general information of the Plan.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
b. Eligibility
Every employee who has completed three months of service for participation, as
defined, may participate in the Plan on the first day of the month after such
completion, provided that the individual is an employee on such date. An
individual shall not be able to participate during any time period for which the
individual is (i) a leased employee, (ii) included in a unit of employees
covered by certain collective bargaining agreements or (iii) a nonresident alien
who receives no earned income from the Employer which constitutes income from
sources within the United States.
c. Contributions
Participants may contribute a portion of their salary or wages through payroll
deduction contributions. The Plan generally permits each participant to elect to
defer up to 15% of his or her compensation. Each participant's contribution was
limited by the Internal Revenue Service ("IRS") to a maximum of $10,000 during
1999. Participant contributions to the Plan are submitted to Merrill Lynch,
which invests the contributions and investment earnings as directed by the
participants. All expenses incurred pursuant to a participant's directing
investments, including brokerage fees and other incidental expenses are paid
solely with the funds from the individual account of the participant.
Employer matching contributions are discretionary; the Employer may, at its
discretion, contribute on behalf of each participant an amount in cash, stock of
the Employer, or a combination thereof, equal to a discretionary percentage of a
participant's compensation contributed as an elective deferral contribution with
respect to each Plan year. Such matching contributions shall not exceed such
percentage of the participant's compensation as the Employer may determine in
connection with each such matching contribution. The Employer may allow each
participant to choose to receive the matching contributions to be allocated to
his or her account in cash, stock of the Employer, or a combination thereof.
Employer matching contributions made during 1999 and 1998 were made exclusively
in cash.
<PAGE>
-2-
All matching contributions shall be allocated as of the last day of a Plan year
to each participant who elected to contribute to his or her deferral account for
such year and who is an employee on the last day of such year or who is not
employed on the last day of the year but who terminated employment before the
last day of the Plan year on account of death, total or permanent disability (as
defined in the Plan), or retirement (as defined in the Plan).
With the consent of the Employer, the Plan allows new employees to rollover
amounts into the Plan from other qualified plans. The rollover contribution is
permitted provided the trust from which the funds are to be transferred permits
the transfer to be made and, in the opinion of the Employer's legal counsel,
such transfer will not jeopardize the tax exempt status of the Plan or create
adverse tax consequences for the Employer.
d. Vesting
Participants immediately vest 100% in their voluntary contributions and rollover
contributions. Participants vest 100% in their Employer matching contributions
after two years of service, as defined in the Plan. However, in the event of
termination of a participant's employment for death, for total or permanent
disability, or upon attainment of the normal retirement age of 65 years, such
participant's Employer matching contributions shall immediately vest 100%.
e. Forfeitures
The nonvested portion of the Employer matching contribution is forfeited by
participants on the earlier of distribution of the entire vested portion of the
terminated participant's account. As of the end of each Plan year, any
forfeitures during the year shall first be made available to reinstate
previously forfeited account balances and the remaining forfeitures, if any,
shall be used to reduce the contribution of the Employer for such a Plan year.
Participants forfeited $29,205 and $88,489 during the years ended December 31,
1999 and 1998, respectively.
f. Distributions to Participants
Participants or their beneficiaries are eligible to receive distributions of
their vested account balances upon retirement or termination of employment.
Distributions of benefits while the participant is still employed are permitted
for rollovers of the account balances, after-tax distributions, financial
hardship, as defined in the Plan, or upon the attainment of age 59-1/2.
Participants or their beneficiaries may elect to receive a lump-sum
distribution, an installment distribution, an annuity, a rollover or a cash-out,
as defined in the Plan. In addition, participants may elect to receive the value
of the stock of the Employer held in their account under the Plan in cash or in
common stock of the Employer.
g. Loans to Participants
Participants are permitted to borrow from their fund accounts a minimum of
$1,000 and up to a maximum of the lesser of $50,000 or 50% of their account
balance. Loans must have a repayment period that does not exceed 60 months or up
to 120 months for the purchase of a primary residence. The loans are secured by
the balance in the participant's account and bear interest at 1% greater than
the prime lending rate as quoted in The Wall Street Journal on the last day of
the calendar quarter before the loan is established.
<PAGE>
-3-
h. Plan Termination
Although it has not expressed any intent to do so, the Employer has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended. In the event of complete or partial termination of the Plan,
participants fully vest in their accounts.
i. Transfers from the Plan
On June 24, 1997, the Employer sold McGaw, Inc. ("McGaw") to B. Braun of
America, Inc. ("B. Braun"). In connection therewith, the employees of McGaw
ceased active participation in the Plan. The account balances of these employees
were fully vested as of June 24, 1997 and these account balances were
transferred to a B. Braun 401(k) plan. The related Employer's 1997 matching
contributions totaling $913,898 were paid-out in March 1998 and are included
within transfers from the Plan in the accompanying 1998 statement of changes in
net assets available for benefits.
On July 14, 1998, the Employer sold its personal care products business (the
"Division"). In connection therewith, the employees of the Division ceased
active participation in the Plan. The account balances of these employees were
fully vested as of July 14, 1998 and these account balances were transferred to
the purchaser's 401(k) plan. The transferred account balances of the Division
employees totaled $48,085 and $968,709 for the years ended December 31, 1999 and
1998, respectively, and are included within transfers from the Plan in the
accompanying statements of changes in net assets available for benefits.
j. New Accounting Pronouncements
The Plan implemented AICPA Statement of Position No. 99-3 "Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other Disclosure
Matters" ("SOP 99-3") for its plan year ended December 31, 1999. SOP 99-3
simplifies the financial statement disclosure requirements for certain
investments held by the Plan. Prior year amounts have been reclassified to
comply with the provisions of SOP 99-3.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting
in accordance with generally accepted accounting principles. Purchases and sales
of securities are recorded on the date the trade is initiated. Distributions to
participants are recorded when paid.
b. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and changes therein.
Actual results could differ from those estimates.
<PAGE>
-4-
3. INVESTMENTS
The Plan's investments are stated at fair value. Quoted market prices are used
to value investments. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year end.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
The following presents investments that represent 5 percent or more of the
Plan's net assets.
December 31,
1999 1998
---------- ----------
MFS Capital Opportunities Fund $7,378,419 $ -
Retirement Preservation Trust Fund 4,936,932 5,207,824
Aim Global Growth & Income Fund 2,529,270 -
IVAX Common Stock Fund 4,668,806 2,122,437
Dreyfus Premier Balanced Fund 1,795,109 -
Corporate Bond Fund 2,004 1,656,716
Capital Fund - 2,344,206
Global Allocation Fund - 1,905,377
Growth Fund for Investment - 5,865,572
Aim Constellation Fund - 2,831,659
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$4,358,661 as follows:
Mutual funds $ (183,026)
IVAX Corporation common stock 2,778,228
Fixed income funds 1,763,459
----------
$4,358,661
==========
4. RECONCILIATION TO FORM 5500
As of December 31, 1999 and 1998, the Plan had $25,394 and $98,240,
respectively, of pending distributions to participants who elected to withdraw
from the Plan. In accordance with generally accepted accounting principles, such
amounts are included as a component of net assets available for benefits in the
accompanying statement of net assets available for benefits. In accordance with
Department of Labor Rules and Regulations, such amounts are reflected as benefit
payments and benefit claims payable in the Plan's 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, December 31,
1999 1998
-------------- --------------
<S> <C> <C>
Net assets available for benefits per the financial statements $ 27,502,067 $ 24,213,992
Less: Amounts allocated to withdrawing participants (25,394) (98,240)
-------------- --------------
Net assets available for benefits
per the Form 5500 $ 27,476,673 $ 24,115,752
============== ==============
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1999 1998
------------- -------------
<S> <C> <C>
Distributions to participants per the financial statements $ 5,496,109 $ 10,284,431
Less: Prior year amounts allocated to withdrawing
participants (98,240) (4,807)
Deemed distributions to participants (66,490) --
Add: Amounts allocated to withdrawing participants 25,394 98,240
------------- -------------
Distributions to participants per the Form 5500 $ 5,356,773 $ 10,377,864
============= =============
</TABLE>
<PAGE>
-5-
5. TRANSACTIONS WITH RELATED PARTIES
Administration and accounting expenses related to the Plan are charged to the
Employer. The Employer performed certain administration and accounting services
on behalf of the Plan for which no amounts are charged. In addition, employee
contributions in the amount of $45,900 were withheld by the Employer and are
reflected in Due from employer at December 31, 1998 in the accompanying
statement of net assets available for benefits. There were no amounts withheld
at December 31, 1999. The employee contributions withheld were remitted to the
Plan during January 1999.
The Employer contribution receivable in the amounts of $736,205 and $667,354 at
December 31, 1999 and 1998, were funded in March 2000 and 1999, respectively,
with transfers of cash to the Plan.
6. TAX STATUS
The IRS has determined and informed the Employer by a letter dated October 16,
1996, that the Plan under its present form is designed in accordance with
applicable Sections of the Internal Revenue Code ("IRC"). The Employer and the
Employer's tax counsel believe that the Plan is currently being operated in
compliance with the applicable provisions of the IRC.
<PAGE>
SCHEDULE I
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
SCHEDULE H -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Identity of Issuer,
Borrower, Lessor Market
or Similar Party Description of Investment Cost Value
------------------- ---------------------------------- -------------- --------------
<S> <C> <C> <C>
*Merrill Lynch Equity Index Trust Fund $ 776,017 $ 852,847
*Merrill Lynch Retirement Preservation Trust Fund 4,936,935 4,936,932
*Merrill Lynch Franklin Small Cap Growth Fund 454,066 646,175
*Merrill Lynch Dreyfus Premier Balanced Fund 1,803,521 1,795,109
*Merrill Lynch Aim Blue Chip Fund 1,003,867 1,165,073
*Merrill Lynch John Hancock Sovereign Fund 1,084,630 1,070,595
*Merrill Lynch MFS Capital Opportunities Fund 7,443,414 7,378,419
*Merrill Lynch Aim Global Growth & Income Fund 2,587,665 2,529,270
*Merrill Lynch Davis NY Venture FD CL A 386,980 402,076
*Merrill Lynch IVAX Common Stock Fund 2,477,197 4,668,806
*Merrill Lynch IVAX Restricted Common
Stock Fund 683,572 672,530
*Merrill Lynch Loan Fund 595,475 595,475
-------------- --------------
$ 24,233,339 $ 26,713,307
============== ==============
</TABLE>
* Denotes a Party-in-Interest
<PAGE>
SCHEDULE II
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
SCHEDULE H -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Purchase Sales Cost of Net Gain
Identity of Party Involved Description of Asset Price Price Assets (Loss)
-------------------------- ---------------------------------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
MERRILL LYNCH TRUST
COMPANY Retirement Preservation Trust Fund $1,678,969 $ - $ - $ -
Retirement Preservation Trust Fund - 1,949,871 1,949,860 11
Dreyfus Premier Balanced Fund 1,981,707 - - -
Dreyfus Premier Balanced Fund - 178,186 178,346 (160)
Aim Blue Chip Fund 1,111,641 - - -
Aim Blue Chip Fund - 107,774 112,056 (4,282)
John Hancock Sovereign Fund 1,180,111 - - -
John Hancock Sovereign Fund - 95,542 95,279 263
MFS Capital Opportunities Fund 7,957,453 - - -
MFS Capital Opportunities Fund - 514,038 513,143 895
Growth Fund 375,444 - - -
Growth Fund - 6,561,679 6,640,119 (78,440)
Growth Allocation Fund 301,576 - - -
Growth Allocation Fund - 2,317,360 2,547,837 (230,477)
Aim Equity Constellation Fund 684,562 - - -
Aim Equity Constellation Fund - 3,048,117 4,000,701 (952,584)
</TABLE>
(Continued)
<PAGE>
SCHEDULE II
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
SCHEDULE H -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
Purchase Sales Cost of Net Gain
Identity of Party Involved Description of Asset Price Price Assets (Loss)
-------------------------- ------------------------------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
MERRILL LYNCH TRUST
COMPANY Aim Global Growth & Income Fund $2,794,578 $ - $ - $ -
Aim Global Growth & Income Fund - 206,913 201,690 5,223
Capital Fund 535,560 - - -
Capital Fund - 2,698,063 2,848,502 (150,439)
Corporate Bond Fund 317,718 - - -
Corporate Bond Fund - 1,900,164 1,848,438 51,726
IVAX Common Stock Fund 1,245,360 - - -
IVAX Common Stock Fund - 844,204 987,253 (143,049)
</TABLE>
<PAGE>
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
NOTE TO SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1999
Transactions included on Schedule II represent reportable transactions which are
defined by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 to be:
o Any single transaction within the period, with respect to any
Plan asset, involving an amount in excess of five percent of
the current value of Plan assets as of the beginning of the
Plan year;
o Any series of transactions (other than transactions with
respect to securities) within the period with or in
conjunction with the same person which, when aggregated,
regardless of the category of asset and the gain or loss on
any transaction, involves an amount in excess of five percent
of the current value of Plan assets as of the beginning of the
Plan year;
o Any transaction within the period involving securities of the
same issue if within the period any series of transactions
with respect to such securities, when aggregated, involves an
amount in excess of five percent of the current value of Plan
assets as of the beginning of the Plan year; and
o Any transaction within the period with respect to securities
with or in conjunction with a person if any prior or
subsequent single transaction within the period with such
person with respect to securities exceeds five percent of the
current value of Plan assets as of the beginning of the Plan
year.
<PAGE>
Exhibits
--------
23.1 Consent of Arthur Andersen LLP
