<PAGE> 1
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, 1993
-------------------------------------------
SYNTEX U.S. EMPLOYEES RETIREMENT SAVINGS PLAN
AND
SYNTEX PUERTO RICO EMPLOYEES RETIREMENT SAVINGS PLAN
(Full Titles of Plans)
COMMISSION FILE NO. 1-4269
SYNTEX CORPORATION
3401 HILLVIEW AVENUE, PALO ALTO, CA 94304
(Issuer and Address of Principal Executive Office)
<PAGE> 2
ITEMS 1 AND 2. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements and Supplemental Schedules:
Syntex U.S. Employees Retirement Savings Plan:
Independent Auditors' Report
Financial Statements:
Statements of Net Assets Available for
Benefits as of December 31, 1993 and 1992
Statement of Changes in Net Assets Available
for Benefits for the Year Ended December 31,
1993
Notes to Financial Statements
Syntex Puerto Rico Employees Retirement Savings Plan:
Independent Auditors' Report
Financial Statements:
Statements of Net Assets Available for
Benefits as of December 31, 1993 and 1992
Statement of Changes in Net Assets Available
for Benefits for the Year Ended December 31,
1993
Notes to Financial Statements
1
<PAGE> 3
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, Syntex
Corporation, as Plan Administrator of the Syntex U.S. Employees Retirement
Savings Plan and the Syntex Puerto Rico Employees Retirement Savings Plan, has
duly caused this annual report to be signed by the undersigned thereunto duly
authorized.
SYNTEX U.S. EMPLOYEES RETIREMENT
SAVINGS PLAN
and
SYNTEX PUERTO RICO EMPLOYEES
RETIREMENT SAVINGS PLAN
Date: October 28, 1994 By: Paul E. Freiman
------------------- --------------------------------
Paul E. Freiman, Chairman
of the Board and
Chief Executive Officer
2
<PAGE> 4
-----------------------------------------------------------------
SYNTEX PUERTO RICO EMPLOYEES
RETIREMENT SAVINGS PLAN
Financial Statements for the Years Ended December 31, 1993 and
1992 and Independent Auditors' Report
-----------------------------------------------------------------
<PAGE> 5
SYNTEX PUERTO RICO EMPLOYEES RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available For Benefits as of
December 31, 1993 and 1992 2
Statement of Changes in Net Assets Available For
Benefits For The Year Ended December 31, 1993 3
Notes to Financial Statements 4
</TABLE>
<PAGE> 6
INDEPENDENT AUDITORS' REPORT
Syntex Puerto Rico Employees Retirement Savings Plan
Administrative Committee:
We have audited the accompanying statements of net assets available for
benefit of Syntex Puerto Rico Employees Retirement Savings Plan as of
December 31, 1993 and 1992, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1993. 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31,
1993 and 1992, and the changes in net assets available for benefits for the
year ended December 31, 1993, in conformity with generally accepted accounting
principles.
As discussed in Note 2 to the financial statements, the Plan changed its
method of accounting for benefits payable to participants who have withdrawn
from participation in the Plan.
Deloitte & Touche LLP
San Francisco, California
October 10, 1994
-1-
<PAGE> 7
SYNTEX PUERTO RICO EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993 AND 1992 (IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
ASSETS:
Investment in the Syntex Employees Retirement
Savings Plan Master Trust $ 7,259 $ 6,668
Receivables:
Employer contributions 39 45
Employee contributions 51 60
-------- --------
Total 90 105
-------- --------
Total Assets 7,349 6,773
-------- --------
LIABILITIES:
Distributions payable to participants (134)
Accrued professional fees (2) (-)
-------- --------
Total liabilities (2) (134)
-------- --------
NET ASSETS AVAILABLE FOR BENEFITS $ 7,347 $ 6,639
======== ========
See notes to financial statements.
</TABLE>
-2-
<PAGE> 8
SYNTEX PUERTO RICO EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993
----
<S> <C>
INVESTMENT EARNINGS:
Interest and Dividends $ 454
Net appreciation
in fair value of investments 9
-------
Investment earnings - net 463
-------
OTHER ADDITIONS (DEDUCTIONS):
Employee contributions 703
Employer contributions 497
Distributions to participants (1,083)
Professional fees and expenses (6)
-------
Other additions - net 111
-------
Increase Before Cumulative Effect
of a Change in Accounting Principle 574
Cumulative Effect of a Change in
Accounting Principle (Note 2) 134
NET INCREASE 708
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 6,639
-------
End of year $ 7,347
========
See notes to financial statements.
</TABLE>
-3-
<PAGE> 9
SYNTEX PUERTO RICO EMPLOYEES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the Syntex Puerto Rico Employees
Retirement Savings Plan (the Plan) is provided for general
information purposes only. Participants should refer to the Plan
document for more complete information.
The Plan is a defined-contribution plan, subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). The Plan
provides for voluntary participation by all regular full-time and
permanent part-time Syntex Corporation (the Company) employees with at
least one year of service whose principal place of employment is within
Puerto Rico.
The Syntex Puerto Rico Employees Retirement Savings Plan was established
in Puerto Rico January 1, 1988 through an amendment to the Syntex U.S.
Employees Retirement Savings Plan. The assets of this Plan are held in a
Master trust with those of the Syntex U.S. Employees Retirement Savings
Plan.
Employees can make tax-deferred contributions of up to 8% of earnings for
1993 and 1992. The Company makes matching contributions of up to 5% of
the employee earnings as follows: 50% of employee's contributions for
employees with less than two years of service, 75% for two years but less
than four years of service, and 100% for four years or more of service.
Contributions to the Plan may be invested in the Projected Interest Fund,
Mutual Funds, the Money Market Fund or the Syntex Corporation Stock Fund,
based upon an election by the employee. However, tax deferred employee
contributions for Puerto Rico employees are limited under Puerto Rican
tax regulations to $7,000 per employee for 1993 and 1992.
Employee contributions are 100% vested. Employer contributions vest with
the employees at 50% after two years of service, 75% after three years,
and 100% after four years. In the event of plan termination, the entire
value of participants' accounts would immediately vest 100%. At December
31, 1993 and 1992, $7,235,000 and $6,433,000 respectively, of total
assets were fully vested to participants. Forfeitures of nonvested
employer contributions due to participant termination are used to reduce
current required employer matching contributions for continuing
participants.
-4-
<PAGE> 10
The investment account alternatives available to the participants are as
follows:
- Projected Interest Fund - primarily invests in guaranteed
investment contracts with insurance companies. On occasion,
commercial paper is purchased with maturity periods of ninety days
or less.
- Mutual Funds - invest in diversified open-ended investment
companies whose primary objectives are long-term growth of capital
and income.
- Money Market Fund - invests primarily in obligations issued or
guaranteed as to principal and interest by the U.S. government or
its agencies. The fund may invest in repurchase agreements on
occasion.
- Syntex Corporation Stock Fund - invests in Syntex Corporation
common stock.
Payment of Benefits - Upon termination of service on account of debt,
disability or retirement, a participant may elect to receive either a
lump sum amount equal to the value of his or her account or annual
installments over a period of years. In the event employment is
terminated for any other reason benefits are payable in a lump sum.
Withdrawals are subject to restrictions as to amount, frequency, and
intended use of the proceeds. The normal form of payment is cash. The
portion of the account that is invested in the Syntex Stock Fund may be
paid in either cash or shares of common stock, depending on the
participant's election.
Purchases and sales of Syntex Corporation common stock are made in the
open market. The Trust pays brokerage fees and commissions related to
these transactions through unit value adjustment.
2. SIGNIFICANT ACCOUNTING POLICIES
Investment in the Syntex Employees Retirement Savings Plan Master Trust -
Investments in the commercial paper, money market fund, and short-term
investments are stated at market value as of year end. The guaranteed
investment contracts are stated at contract value (cost plus accrued
interest). Investments in the mutual funds and Syntex Corporation Stock
Fund are stated at quoted market prices as of year end.
Benefits Payable - Effective January 1, 1993, the Plan changed its method
of accounting for benefits payable to comply with the 1993 AICPA Audit
and Accounting Guide, Audits of Employee Benefits Plans. The new
guidance requires that benefits payable to persons who have withdrawn
from participation in a defined contribution plan be disclosed in the
footnotes to the financial statements rather than be recorded as a
liability of the Plan. The cummulative effect of this change in
accounting principle was to increase net assets by $134,000. As of
December 31, 1993, net assets available for benefits included benefits of
$1,054,000 due to participants who have withdrawn from participation in
the Plan.
-5-
<PAGE> 11
Plan Expenses - The Company pays all general and administrative expenses
for the Plan which include salaries, rent and overhead for the Plan's
administrative staff. In addition, the Company generally pays for
professional fees and expenses. Professional fees and expenses are
included in the financial statements, and payments for such fees and
expenses by the Company are reported as employer contributions. In 1993
and 1992, such expenses totaled $4,000 and $2,000, respectively.
Income Taxes - The Plan was established effective January 1, 1988 through
an amendment to the Syntex U.S. Employees Retirement Savings Plan. The
Syntex U.S. Employees Retirement Savings Plan obtained its latest
determination letter on February 5, 1987, in which the Internal Revenue
Service (IRS) stated that the Syntex U.S. Retirement Savings Plan, as
then designed, was in compliance with the applicable requirements of the
Internal Revenue code. The plan has been amended since receiving the
determination letter. However, the plan administrator and the plan's tax
counsel believe that the plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code
as well as the Puerto Rican Revenue Code. They believe that the plan was
qualified and the related trust was tax-exempt as of the financial
statement date. Therefore, no provision for income taxes has been
included in the Plan's financial statements. The plan administrator has
applied for a new determination letter from the IRS and is in process of
applying for a letter with the Puerto Rico Bureau of Income Tax. Based
on advice of legal counsel, both letters are expected to be favorable.
-6-
<PAGE> 12
3. INVESTMENTS
The Plan's investment in the Syntex Employees Retirement Savings Plan
Master Trust, receivables and liabilities as of December 31, 1993 and 1992,
have been included in the applicable account balances shown below. The
Projected Interest Fund includes guaranteed investment contracts.
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(IN THOUSANDS)
MUTUAL FUND ACCOUNTS
---------------------------------------------------
PROJECTED FIDELITY FIDELITY FIDELITY FIDELITY US EQUITY FIDELITY
INTEREST GROWTH & GROWTH Co. MAGELLAN BALANCED Co-MING. MONEY SYNTEX
FUND INCOME FUND FUND FUND FUND MARKET STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1992 $5,222 $980 0 0 0 0 $23 $414 $6,639
INVESTMENT INCOME:
INTEREST AND DIVIDENDS 374 67 1 11 1 454
APPRECIATION(DEPRECIATION) 126 4 (121) 9
EMPLOYEE CONTRIBUTIONS 465 120 9 17 3 3 6 80 703
EMPLOYER CONTRIBUTIONS 346 81 4 10 1 1 54 497
DISTRIBUTION TO PARTICIPANTS (877) (167) (6) (2) (31) (1,083)
PROFESSIONAL FEES AND
EXPENSES (5) (1) (6)
CUMMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPAL 105 20 9 134
TRANSFERS (129) 20 9 109 7 (16) 0
BALANCE DECEMBER 31, 1993 $5,501 $1,246 $17 $151 $4 $4 $35 $389 $7,347
</TABLE>
Net Assets available for benefits by investment fund for the
Plans as of December 31, 1993 were as follows (in Thousands):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SYNTEX PUERTO RICO EMPLOYEES
RETIREMENT SAVINGS PLAN 5,501 1,246 17 151 4 4 35 389 7,347
SYNTEX U.S. EMPLOYEES
RETIREMENT SAVINGS PLAN 136,228 81,302 6,306 11,561 4,719 669 7,534 21,252 269,571
TOTAL $141,740 $82,548 $6,323 $11,712 $4,723 $673 $7,569 $21,641 $276,918
</TABLE>
Fidelity Investments maintains all funds on a share
basis except the Syntex Stock Fund which continues
to be reported on a unitized basis (in Thousands).
<TABLE>
<CAPTION>
SYNTEX CORPORATION STOCK FUND
12-31-92 12-31-93
<S> <C> <C>
PUERTO RICO EMPLOYEES RETIREMENT PLAN UNITS 342 432
U.S. EMPLOYEES RETIREMENT SAVINGS PLAN UNITS 24,293 23,676
</TABLE>
-7-
<PAGE> 13
4. SUBSEQUENT EVENTS
On May 2, 1994, Syntex Corporation entered into a definitive agreement
for acquisition of Syntex by Roche Capital Corporation at a price of
$24.00 for each share of common stock. In September 1994 Roche
Capital acquired 93.4% of the outstanding common stock, including the
majority of shares in the Syntex Corporation Stock Fund. At December
31, 1993, the share price per common share was $15.88.
On August 12, 1994, Confederation Life Insurance Company was placed
under the control of the regulatory authorities in Canada and
Michigan. This contract represented approximately 3% of the Plan's
investment in the Projected Interest Fund at December 31, 1993. No
adjustment has been made in the financial statements as the outcome of
this uncertainty cannot be determined at this time.
-8-
<PAGE> 14
-----------------------------------------------------------
SYNTEX U.S. EMPLOYEES
RETIREMENT SAVINGS PLAN
Financial Statements for the Years Ended December 31, 1993
and 1992 and Independent Auditors' Report
------------------------------------------------------------
<PAGE> 15
SYNTEX U.S. EMPLOYEES RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available For Benefits as of
December 31, 1993 and 1992 2
Statement of Changes in Net Assets Available For
Benefits For The Year Ended December 31, 1993 3
Notes to Financial Statements 4
</TABLE>
<PAGE> 16
INDEPENDENT AUDITORS' REPORT
Syntex U.S. Employees Retirement Savings Plan
Administrative Committee:
We have audited the accompanying statements of net assets available for
benefits of the Syntex U.S. Employees Retirement Savings Plan as of December
31, 1993 and 1992, and the related statement of changes in net assets available
for benefits for the year ended December 31, 1993. 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31,
1993 and 1992, and the changes in net assets available for benefits for the
year ended December 31, 1993, in conformity with generally accepted accounting
principles.
As discussed in Note 2 to the financial statements, the Plan changed its
method of accounting for benefits payable to participants who have withdrawn
from participation in the Plan.
Deloitte & Touche LLP
San Francisco, California
October 10, 1994
-1-
<PAGE> 17
SYNTEX U.S. EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993 AND 1992 (IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
ASSETS:
Investment in the Syntex Employees Retirement
Savings Plan Master Trust $ 267,238 $ 237,421
Receivables:
Employer contributions 1,011 1,065
Employee contributions 1,377 1,417
---------- ----------
Total 2,388 2,482
---------- ----------
Total Assets 269,626 239,903
---------- ----------
LIABILITIES:
Distributions payable to participants - (5,849)
Accrued professional fees (55) (68)
---------- ----------
Total liabilities (55) (5,917)
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $ 269,571 $ 233,986
========== ==========
See notes to financial statements.
</TABLE>
-2-
<PAGE> 18
SYNTEX U.S. EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED
DECEMBER 31, 1993 (IN THOUSANDS)
1993
----
INVESTMENT EARNINGS:
Interest and Dividends $ 15,963
Net appreciation
in fair value of investments 1,334
---------
Investment earnings 17,297
---------
OTHER ADDITIONS (DEDUCTIONS):
Employee contributions 17,426
Employer contributions 12,084
Distributions to participants (16,923)
Professional fees and expenses (148)
---------
Other additions - net 12,439
---------
Increase Before Cumulative Effect
of a Change in Accounting Principle 29,736
Cumulative Effect of a Change in
Accounting Principle (Note 2) 5,849
NET INCREASE 35,585
NET ASSETS AVAILABLE FOR BENEFIT:
Beginning of year 233,986
---------
End of year $ 269,571
=========
See notes to financial statements.
-3-
<PAGE> 19
SYNTEX U.S. EMPLOYEES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the Syntex U.S. Employees Retirement
Savings Plan (the Plan) is provided for general information purposes
only. Participants should refer to the Plan document for more complete
information.
The Plan is a defined-contribution plan, subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). The Plan
provides for voluntary participation by all regular full-time and
permanent part-time Syntex Corporation (the Company) employees with at
least one year of service whose principal place of employment is within
the United States.
Effective January 1, 1988, a separate plan was established for the
employees of the Company's operations in Puerto Rico. The assets of that
plan (the Syntex Puerto Rico Employee's Retirement Savings Plan) continue
to be held in a Master trust with those of the Plan.
Employees can make tax-deferred contributions of up to 8% of earnings for
1993 and 1992. The Company makes matching contributions of up to 5% of
the employee earnings as follows: 50% of employee's contributions for
employees with less than two years of service, 75% for two years but less
than four years of service, and 100% for four years or more of service.
Contributions to the Plan may be invested in the Projected Interest Fund,
Mutual Funds, the Money Market Fund or the Syntex Corporation Stock Fund,
based upon an election by the employee. However, tax deferred employee
contributions of U.S. employees are limited under the Internal Revenue
Code to $8,994 and $8,728 per employee for 1993 and 1992, respectively.
Employee contributions are 100% vested. Employer contributions vest with
the employees at 50% after two years of service, 75% after three years,
and 100% after four years. In the event of plan termination, the entire
value of participants' accounts would immediately vest 100%. At December
31, 1993 and 1992, $266,597,000 and $237,029,000 respectively, of total
assets were fully vested to participants. Forfeitures of nonvested
employer contributions due to participant termination are used to reduce
current required employer matching contributions for continuing
participants.
-4-
<PAGE> 20
The investment account alternatives available to the participants are as
follows:
- Projected Interest Fund - primarily invests in guaranteed
investment contracts with insurance companies. On occasion,
commercial paper is purchased with maturity periods of ninety days
or less.
- Mutual Funds - invest in diversified open-ended investment
companies whose primary objectives are long-term growth of capital
and income.
- Money Market Fund - invests primarily in obligations issued or
guaranteed as to principal and interest by the U.S. government or
its agencies. The fund may invest in repurchase agreements on
occasion.
- Syntex Corporation Stock Fund - invests in Syntex Corporation
common stock.
Payment of Benefits - Upon termination of service on account of debt,
disability or retirement, a participant may elect to receive either a
lump sum amount equal to the value of his or her account or annual
installments over a period of years. In the event employment is
terminated for any other reason benefits are payable in a lump sum.
Withdrawals are subject to restrictions as to amount, frequency, and
intended use of the proceeds. The normal form of payment is cash. The
portion of the account that is invested in the Syntex Stock Fund may be
paid in either cash or shares of common stock, depending on the
participant's election.
Purchases and sales of Syntex Corporation common stock are made in the
open market. The Trust pays brokerage fees and commissions related to
these transactions through unit value adjustment.
2. SIGNIFICANT ACCOUNTING POLICIES
Investments in the Syntex Employees Retirement Savings Master Trust -
Investments in the commercial paper, money market fund, and short-term
investments are stated at market value as of year end. The guaranteed
investment contracts are stated at contract value (cost plus accrued
interest). Investments in the mutual funds and Syntex Corporation Stock
Fund are stated at quoted market prices as of year end.
Benefits Payable - Effective January 1, 1993, the Plan changed its method
of accounting for benefits payable to comply with the 1993 AICPA Audit
and Accounting Guide, Audits of Employee Benefits Plans. The new
guidance requires that benefits payable to persons who have withdrawn
from participation in a defined contribution plan be disclosed in the
footnotes to the financial statements rather than be recorded as a
liability of the Plan. The cummulative effect of this change in
accounting principle was to increase net assets by $5,849,000. As of
December 31, 1993, net assets available for benefits included benefits of
$42,542,000 due to participants who have withdrawn from participation in
the Plan.
-5-
<PAGE> 21
Plan Expenses - The Company pays all general and administrative expenses
for the Plan which include salaries, rent and overhead for the Plan's
administrative staff. In addition, the Company generally pays for
professional fees and expenses. Professional fees and expenses are
included in the financial statements, and payments for such fees and
expenses by the Company are reported as employer contributions. In 1993
and 1992, such expenses totaled $136,000 and $88,000, respectively.
Income Taxes - The plan obtained its latest determination letter on
February 5, 1987, in which the Internal Revenue Service (IRS) stated that
the plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue code. The plan has been amended
since receiving the determination letter. However, the plan
administrator and the plan's tax counsel believe that the plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. They believe that the plan
was qualified and the related trust was tax-exempt as of the financial
statement date. Therefore, no provision for income taxes has been
included in the Plan's financial statements. The plan administrator has
applied for a new determination letter from the IRS and based on advice
of legal counsel, expect this letter to be favorable.
-6-
<PAGE> 22
3. INVESTMENTS
The Plan's investment in the Syntex Employees Retirement Savings Plan Master
Trust, receivables and liabilities as of December 31, 1993 and 1992, have been
included in the applicable account balances shown below. The Projected
Interest Fund includes guaranteed investment contracts.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MUTUAL FUND ACCOUNTS
------------------------------------------------------
PROJECTED FIDELITY FIDELITY FIDELITY FIDELITY US EQUITY FIDELITY
INTEREST GROWTH & GROWTH Co. MAGELLAN BALANCED CO-MING. MONEY SYNTEX
FUND INCOME FUND FUND FUND FUND MARKET STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1992 $126,984 $68,884 $ 861 $ 309 $ 374 $126 $7,350 $29,098 $233,986
INVESTMENT INCOME:
INTEREST AND DIVIDENDS 9,508 4,582 558 773 337 205 15,963
APPRECIATION(DEPRECIATION) 8,954 (7) 102 25 45 (7,785) 1,334
EMPLOYEE CONTRIBUTIONS 6,277 5,707 649 885 321 84 757 2,746 17,426
EMPLOYER CONTRIBUTIONS 4,618 3,878 406 554 199 50 477 1,902 12,084
DISTRIBUTION TO PARTICIPANTS (9,402) (5,284) (191) (196) (177) (28) (462) (1,183) (16,923)
PROFESSIONAL FEES AND
EXPENSES (85) (41) (1) (4) (17) (148)
CUMMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPAL 3,174 1,722 22 8 9 3 184 727 5,849
TRANSFERS (4,846) (7,100) 4,009 9,126 3,631 389 (973) (4,236) 0
BALANCE DECEMBER 31, 1993 $136,228 $81,302 $6,306 $11,561 $4,719 $669 $7,534 $21,252 $269,571
</TABLE>
Net Assets available for benefits by investment fund for the Plans as of
December 31, 1993 were as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SYNTEX U.S. EMPLOYEES
RETIREMENT SAVINGS PLAN 136,228 81,302 6,306 11,561 4,719 669 7,534 21,252 269,571
SYNTEX PUERTO RICO EMPLOYEES
RETIREMENT SAVINGS PLAN 5,501 1,246 17 151 4 4 35 389 7,347
TOTAL $141,729 $82,548 $6,323 $11,712 $4,723 $673 $7,569 $21,641 $276,918
</TABLE>
Fidelity Investments maintains all funds on a share basis except the Syntex
Stock Fund which continues to be reported on a unitized basis (in thousands).
<TABLE>
<CAPTION>
SYNTEX CORPORATION STOCK FUND
12-31-92 12-31-93
<S> <C> <C>
U.S. EMPLOYEES RETIREMENT SAVINGS PLAN UNITS 24,293 23,676
PUERTO RICO EMPLOYEES RETIREMENT PLAN UNITS 342 432
</TABLE>
-7-
<PAGE> 23
4. SUBSEQUENT EVENTS
On May 2, 1994, Syntex Corporation entered into a definitive agreement
for acquisition of Syntex by Roche Capital Corporation at a price of
$24.00 for each share of common stock. In September 1994, Roche
Capital acquired 93.4% of the outstanding common stock, including the
majority of shares in the Syntex Corporation Stock Fund. At December
31, 1993, the share price per common share was $15.88.
On August 12, 1994, Confederation Life Insurance Company was placed
under the control of the regulatory authorities in Canada and
Michigan. This contract represented approximately 3% of the Plan's
investment in the Projected Interest Fund at December 31, 1993. No
adjustment has been made in the financial statements as the outcome of
this uncertainty cannot be determined at this time.
-8-
