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
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended DECEMBER 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ____________ to ___________
Commission File Number 1-3305 (Merck & Co., Inc.)
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
725 CHESTERBROOK BOULEVARD
WAYNE, PA 19087-5677
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
MERCK & CO., INC.
ONE MERCK DRIVE
WHITEHOUSE STATION, NJ 08889-0100
2
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
INDEX TO FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION
DECEMBER 31, 1997 AND 1996
Page(s)
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits at
December 31, 1997 and 1996 2
Statement of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1997 and 1996 3
Notes to Financial Statements 4 - 12
Additional Information*:
Schedule I: Schedule of Assets Held for Investment Purposes
at December 31, 1997 13
Schedule II: Schedule of Reportable Transactions for the Year Ended December 31,
1997 14
*The additional information included is presented for purposes of
additional analysis and is not a required part of the basic
financial statements but is required by the Employee Retirement
Income Security Act of 1974 ("ERISA").
3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrative Committee of the
Astra Merck Inc. Employee Savings and Security Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Astra Merck Inc. Employee Savings and Security Plan (the "Plan") at
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles. 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 of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in Schedules I
and II is presented for purposes of additional analysis and is not a required
part of the basic financial statements but is additional information required by
ERISA. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PRICE WATERHOUSE LLP
Philadelphia, PA
May 22, 1998, except as to Note 7, which is as of June 19, 1998.
4
[ASTRA MERCK LOGO]
- -------------------------------------------------------------------------------
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 AND 1996
December 31, 1997 December 31, 1996
----------------- -----------------
ASSETS
Investments at fair value:
Common Stock $44,555,355 $32,520,766
Registered Investment Companies 39,238,643 24,064,937
Participant Loans 1,847,103 1,634,374
85,641,101 58,220,077
Receivables:
Participant contributions 708,512 591,516
Employer contributions 274,236 233,055
Accrued interest and dividends 76,905 27,075
1,059,653 851,646
NET ASSETS AVAILABLE FOR BENEFITS $86,700,754 $59,071,723
The accompanying notes are an integral part of these financial statements.
Page 2
5
[ASTRA MERCK LOGO]
- -------------------------------------------------------------------------------
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
For the Year Ended
-------------------------------------
December 31, 1997 December 31, 1996
----------------- -----------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $14,929,643 $ 6,301,384
Dividends and interest 3,142,360 2,317,417
Interest on loans 142,944 121,709
Total Investment Income 18,214,947 8,740,510
Contributions to the Plan:
Participants' 8,386,499 6,226,794
Employer's 3,191,807 2,071,398
Rollovers from other qualified plans 1,707,316 1,389,500
Total Contributions 13,285,622 9,687,692
Total Additions 31,500,569 18,428,202
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid and distributions to participants (3,871,538) (792,842)
Net Increase 27,629,031 17,635,360
Net assets available for benefits
Beginning of year 59,071,723 41,436,363
End of year $86,700,754 $59,071,723
The accompanying notes are an integral part of these financial statements.
Page 3
6
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
1. DESCRIPTION OF THE PLAN
The following description of the Astra Merck Inc. (the "Company") Employee
Savings and Security Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for complete information.
The Plan, established January 1, 1995, was designed to provide employees a
systematic means of saving and investing for the future. Prior to July 1,
1996, regular full-time, part-time, and temporary employees of the
Company, as defined by the Plan, who had completed at least one year of
employment were eligible to participate in the Plan on the next enrollment
date (the first day of each January and each July). Effective July 1,
1996, the Company amended the Plan so regular full-time and part-time
employees of the Company, as defined by the Plan, are eligible to
participate in the Plan as of the first day of the month following their
date of hire.
The Plan is administered by the Plan Administrative Committee. All costs
of administering the Plan are borne by the Company. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
Contributions. Participants may contribute from 2% to 15% of their base
pay and can designate contributions in 1% increments as pre-tax, after-tax
or a combination of both. Prior to July 1, 1996, the Company matched 50%
of employee contributions up to 5% of base pay per pay period. Effective
July 1, 1996, the Plan was amended to state that the Company will match 66
2/3% of employee contributions up to 6% of base pay per pay period.
Company matching contributions are invested in the same investments that
participants designate for their own contributions. Both employee and
employer contributions to the Plan are limited to maximum amounts
established under the Internal Revenue Code.
In addition, participants may transfer assets that are held for their
benefit by qualified benefit plans of former employers (rollover
contributions) into the Plan.
Investment Options. Participants direct the investment of their
contributions in 1% increments of the payroll deduction into any of the
following investment options, including Merck & Co., Inc. ("Merck") Common
Stock:
MERCK COMMON STOCK
This portfolio consists of shares of Merck Common Stock.
FIDELITY MAGELLAN FUND
The Magellan Fund is a registered investment company which invests
primarily in common stock and securities convertible to common stock
issued by companies operating in the U.S. and/or abroad as well as
foreign companies. The fund seeks investment growth by making a profit
on invested capital over the long term.
Page 4
7
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
FIDELITY EQUITY-INCOME FUND
The Equity-Income Fund is a registered investment company which invests
in income-producing equity securities and seeks a dividend yield that
exceeds the composite yield of the S&P 500 Index; at the same time, it
considers the potential for capital growth.
FIDELITY GROWTH COMPANY FUND
The Growth Company Fund is a registered investment company which seeks
capital appreciation mainly through investment in common stocks and
securities convertible into common stocks with an emphasis on capital
gains rather than on dividend income.
FIDELITY GROWTH & INCOME PORTFOLIO
The Growth & Income Portfolio is a registered investment company which
seeks a combination of capital growth and current income consistent
with reasonable investment risk. It seeks securities of companies with
potential for earnings growth while paying current dividends.
FIDELITY INTERMEDIATE BOND FUND
The Intermediate Bond Fund is a registered investment company which
invests in domestic and foreign investment-grade securities with
intermediate maturities. The dollar-weighted average maturity of its
obligations ranges between three and ten years.
FIDELITY RETIREMENT GROWTH FUND
The Retirement Growth Fund is a registered investment company which
seeks capital appreciation by investing primarily in common stocks
issued by companies operating in the U.S. and/or abroad. Investments
are diversified among a variety of industries and sectors within the
market.
FIDELITY OTC PORTFOLIO
The OTC Portfolio is a registered investment company which seeks
capital appreciation through investment in securities that are traded
in the over-the-counter ("OTC") securities market. Though this
portfolio invests mainly in common stocks, it can also invest in
preferred stocks and debt obligations as well as all other securities
offered by the OTC market.
FIDELITY OVERSEAS FUND
The Overseas Fund is a registered investment company which seeks
capital appreciation, primarily through investments in foreign
securities. Normally, at least 65% of its total assets are invested in
securities of companies from at least three countries outside of North
America (generally these countries are located in Central and South
America, the Far East and Pacific basin, and Western Europe).
Page 5
8
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
FIDELITY BALANCED FUND
The emphasis of the Balanced Fund, a registered investment company, is
income with investments in both stocks and bonds. At least 25% of its
total assets will always be invested in fixed-income senior securities
to primarily preserve principal.
FIDELITY RETIREMENT MONEY MARKET PORTFOLIO
The Money Market Portfolio is a registered investment company which
invests in high quality, U.S. dollar-denominated money market
instruments of U.S. and foreign issuers. Investments include short-term
corporate obligations, U.S. government obligations and certificates of
deposit.
FIDELITY RETIREMENT GOVERNMENT MONEY MARKET PORTFOLIO
The Government Money Market Portfolio is a registered investment
company which invests in obligations issued or guaranteed as to
principal and interest by the U.S. Government, its agencies or
instrumentalities.
SPARTAN U.S. EQUITY INDEX PORTFOLIO
The U.S. Equity Index Portfolio is a registered investment company
which seeks investment results that correspond to the total return
performance of United States' publicly traded stocks. Total return
performance is the combination of capital changes and income. Many
investments made by this portfolio offer the potential for both
dividend income and capital appreciation over the long term. During
1997, the name of the fund was changed from the Fidelity U.S. Equity
Index Portfolio to the Spartan U.S. Equity Index Portfolio.
PARTICIPANT LOAN FUND
The Loan Fund is comprised of amounts transferred from other funds and
represents the balance of outstanding participant loans.
Participants may move funds among investments daily.
Vesting. Participants are immediately vested in their contributions, all Company
matching contributions, plus actual earnings thereon.
Participant Loans. Participants may borrow from their account balances. The
minimum loan is $500 and the maximum loan is the lesser of $50,000 less the
highest outstanding loan balance, if any, during the one year period prior to
the new loan application date, or 50% of the participant's account balance less
any current outstanding loan balance. Participant investments are liquidated on
a pro rata basis to fund the loan. The interest rate is the rate in effect the
month the loan is made and is based on the prime rate of the Morgan Guaranty
Trust Company of New York, plus one percent per annum. Activity related to these
borrowings is reflected in the Participant Loan Fund.
Page 6
9
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
Loan transactions are treated as a transfer to (from) the investment fund
from (to) the Participant Loan Fund. Loan terms range from 1-5 years or up
to 30 years for the purchase of a primary residence. Maturities range from
1998 to 2028. Interest rates range from 6.5% to 11.5%. Principal and
interest is paid ratably through monthly payroll deductions.
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting. The financial statements of the Plan have been
prepared using the accrual basis of accounting.
Investment Valuation and Income Recognition. Shares of Merck Common Stock
are valued at its quoted market price. Shares of registered investment
companies are valued at quoted market prices which represent the net asset
value of shares held by the Plan at year end. Participant loans are valued
at cost which approximates fair value. Purchases and sales of investments
are recorded on the trade date. Dividend income is recorded on the
ex-dividend date. The appreciation in market value of investments is based
on the beginning of the year market value or value at the time of purchase
during the year and is included in the Statement of Changes in Net Assets
Available for Benefits. Investment income is accrued as earned.
Payment of Benefits. Benefits are recorded when paid.
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 disclosure of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from those
estimates.
3. INCOME TAX STATUS
The Plan received a favorable determination letter from the Internal
Revenue Service for the Plan and its amendments through February 1, 1997
dated March 4, 1997. The Plan has been amended subsequent to February 1,
1997. However, the Plan Administrators 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. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
4. PARTY-IN-INTEREST TRANSACTIONS
On January 1, 1995, in connection with the transfer of assets to the
Company on November 1, 1994 to effect a joint venture between Astra AB and
Merck, certain employees of Merck became employees of the Company. In
accordance with the terms of the agreements governing the formation of the
joint venture, account balances of these employees who were participants
in Merck's Employee Savings and Security Plan, totaling $18,769,529 were
transferred to the Plan, effective January 1, 1995.
Page 7
10
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
Certain plan investments are shares of mutual funds managed by an
affiliate of Fidelity Investments. Fidelity Investments is the trustee as
defined in the Plan, and therefore, these transactions qualify as
party-in-interest transactions.
5. 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.
Page 8
11
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
6. FUND INFORMATION
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
Fund Information
--------------------------------------------------------------
Merck Fidelity Fidelity Fidelity Fidelity
Common Magellan Equity- Growth Growth &
Stock* Fund* Income Company Income
Fund Fund Portfolio*
--------------------------------------------------------------
Assets:
Investments at fair value:
Common stock $44,555,355
Registered investment companies - $8,236,883 $2,458,094 $4,324,795 $8,885,614
Participant loans - - - - -
--------------------------------------------------------------
44,555,355 8,236,883 2,458,094 4,324,795 8,885,614
Receivables:
Participant contributions 226,217 74,843 36,870 70,931 120,171
Employer contributions 85,474 30,453 14,207 27,208 46,369
Accrued interest and dividends 6,127 2,103 461 43,782 1,031
--------------------------------------------------------------
317,818 107,399 51,538 141,921 167,571
Net assets available for
benefits, December 31, 1997 $44,873,173 $8,344,282 $2,509,632 $4,466,716 $9,053,185
==============================================================
Assets:
Investments at fair value:
Common stock $32,520,766
Registered investment companies - $5,977,849 $1,522,514 $2,925,653 $4,384,329
Participant loans - - - - -
--------------------------------------------------------------
32,520,766 5,977,849 1,522,514 2,925,653 4,384,329
Receivables:
Participant contributions 175,619 68,551 24,975 72,047 98,075
Employer contributions 68,496 28,192 9,692 27,437 38,278
Accrued interest and dividends 5,605 1,664 315 5,724 534
--------------------------------------------------------------
Net assets available for
benefits, December 31, 1996 $32,770,486 $6,076,256 $1,557,496 $3,030,861 $4,521,216
==============================================================
Fund Information
---------------------------------------------------------------
Fidelity Fidelity Fidelity Fidelity Fidelity
Intermediate Retirement OTC Overseas Balanced
Bond Fund Growth Fund Portfolio Fund Fund
---------------------------------------------------------------
Assets:
Investments at fair value:
Common stock
Registered investment companies $1,013,114 $984,186 $2,873,472 $2,507,609 $2,166,328
Participant loans - - - - -
---------------------------------------------------------------
1,013,114 984,186 2,873,472 2,507,609 2,166,328
Receivables:
Participant contributions 13,031 16,891 42,727 32,823 22,430
Employer contributions 5,370 6,221 16,351 12,560 9,744
Accrued interest and dividends 6,860 190 524 315 544
---------------------------------------------------------------
25,261 23,302 59,602 45,698 32,718
Net assets available for
benefits, December 31, 1997 $1,038,375 $1,007,488 $2,933,074 $2,553,307 $2,199,046
===============================================================
Assets:
Investments at fair value:
Common stock
Registered investment companies $598,476 $761,397 $1,728,342 $1,577,744 $1,569,462
Participant loans - - - - -
--------------------------------------------------------------
598,476 761,397 1,728,342 1,577,744 1,569,462
Receivables:
Participant contributions 12,547 16,570 39,490 27,116 20,782
Employer contributions 5,402 6,579 15,144 10,179 8,943
Accrued interest and dividends 3,182 188 374 204 485
--------------------------------------------------------------
Net assets available for
benefits, December 31, 1996 $619,607 $784,734 $1,783,350 $1,615,243 $1,599,672
===============================================================
Fund Information
--------------------------------------------------------------
Fidelity Fidelity Spartan Participant Total
Retirement Retirement U.S. Loan Fund
Money Govt. Equity
Market Money Index
Portfolio Market Portfolio
Portfolio
--------------------------------------------------------------
Assets:
Investments at fair value:
Common stock $44,555,355
Registered investment companies $1,900,102 $1,096,596 $2,791,850 39,238,643
Participant loans - - - $1,847,103 1,847,103
--------------------------------------------------------------
1,900,102 1,096,596 2,791,850 1,847,103 85,641,101
Receivables:
Participant contributions 5,471 4,015 42,092 - 708,512
Employer contributions 2,597 1,659 16,023 - 274,236
Accrued interest and dividends 9,349 5,307 312 - 76,905
--------------------------------------------------------------
17,417 10,981 58,427 - 1,059,653
Net assets available for
benefits, December 31, 1997 $1,917,519 $1,107,577 $2,850,277 $1,847,103 $86,700,754
==============================================================
Assets:
Investments at fair value:
Common stock $32,520,766
Registered investment companies $912,857 $924,520 $1,181,794 24,064,937
Participant loans - - - $1,634,374 1,634,374
--------------------------------------------------------------
912,857 924,520 1,181,794 1,634,374 58,220,077
Receivables:
Participant contributions 5,943 2,967 26,834 - 591,516
Employer contributions 2,645 1,257 10,811 - 233,055
Accrued interest and dividends 4,207 4,444 149 - 27,075
--------------------------------------------------------------
Net assets available for
benefits, December 31, 1996 $925,652 $933,188 $1,219,588 $1,634,374 $59,071,723
==============================================================
*Represents 5% or more of the Plan investments as of December 31, 1997 and 1996.
Page 9
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ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
6. FUND INFORMATION (CONTINUED)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
- - FOR THE YEAR ENDED DECEMBER 31, 1997
Fund Information
----------------------------------------------------------------
Merck Fidelity Fidelity Fidelity Fidelity
Common Stock Magellan Equity- Growth Growth &
Fund Income Company Income
Fund Fund Portfolio
----------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $11,262,595 $1,115,520 $377,158 $199,549 $1,321,314
Dividends and interest 723,335 523,532 129,615 448,290 357,962
Interest on loans 70,606 23,902 4,624 10,086 7,784
----------------------------------------------------------------
Total investment income 12,056,536 1,662,954 511,397 657,925 1,687,060
----------------------------------------------------------------
Contributions to the Plan:
Participants' 2,628,401 907,281 414,272 876,970 1,414,441
Employer's 986,704 361,863 158,915 326,883 532,933
Rollovers from other qualified plans 453,639 205,688 86,694 152,614 205,227
----------------------------------------------------------------
Total contributions 4,068,744 1,474,832 659,881 1,356,467 2,152,601
----------------------------------------------------------------
Total additions 16,125,280 3,137,786 1,171,278 2,014,392 3,839,661
----------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid and distributions to participants (2,116,100) (456,089) (117,575) (204,802) (189,558)
----------------------------------------------------------------
Transfers among funds:
Interfund transfers (1,849,195) (386,171) (88,059) (341,833) 955,206
Loans to participants, principal (304,509) (102,930) (38,807) (76,466) (110,106)
Loan principal repayments from participants 247,211 75,430 25,299 44,564 36,766
----------------------------------------------------------------
Net transfers among funds (1,906,493) (413,671) (101,567) (373,735) 881,866
----------------------------------------------------------------
Total deductions and net transfers among (4,022,593) (869,760) (219,142) (578,537) 692,308
funds
----------------------------------------------------------------
Net increase 12,102,687 2,268,026 952,136 1,435,855 4,531,969
Net assets available for benefits:
Beginning of year 32,770,486 6,076,256 1,557,496 3,030,861 4,521,216
----------------------------------------------------------------
End of year $44,873,173 $8,344,282 $2,509,632 $4,466,716 $9,053,185
================================================================
Fund Information
----------------------------------------------------------------
Fidelity Fidelity Fidelity Fidelity Fidelity
Intermediate Retirement OTC Overseas Balanced
Bond Fund Growth Fund Portfolio Fund Fund
----------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $9,188 ($34,175) ($5,607) $61,354 $137,922
Dividends and interest 56,724 169,908 193,279 124,014 255,553
Interest on loans 1,206 2,265 5,063 2,973 6,428
-------------------------------------------------------------
Total investment income 67,118 137,998 192,735 188,341 399,903
-------------------------------------------------------------
Contributions to the Plan:
Participants' 156,820 209,261 512,016 406,581 276,844
Employer's 64,754 77,844 191,837 149,759 117,290
Rollovers from other qualified plans 188,661 15,591 90,251 94,726 29,679
-------------------------------------------------------------
Total contributions 410,235 302,696 794,104 651,066 423,813
-------------------------------------------------------------
Total additions 477,353 440,694 986,839 839,407 823,716
-------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid and distributions to participants (16,115) (15,337) (105,894) (68,172) (55,968)
-------------------------------------------------------------
Transfers among funds:
Interfund transfers (28,753) (202,142) 289,544 184,259 (158,602)
Loans to participants, principal (17,059) (9,606) (45,553) (33,641) (35,685)
Loan principal repayments from participants 3,342 9,145 24,788 16,211 25,913
-------------------------------------------------------------
Net transfers among funds (42,470) (202,603) 268,779 166,829 (168,374)
-------------------------------------------------------------
Total deductions and net transfers among (58,585) (217,940) 162,885 98,657 (224,342)
funds
-------------------------------------------------------------
Net increase 418,768 222,754 1,149,724 938,064 599,374
Net assets available for benefits:
Beginning of year 619,607 784,734 1,783,350 1,615,243 1,599,672
----------------------------------------------------------------
End of year $1,038,375 $1,007,488 $2,933,074 $2,553,307 $2,199,046
=============================================================
Fund Information
----------------------------------------------------------------
Fidelity Fidelity Spartan Participant Total
Retirement Retirement U.S. Loan Fund
Money Govt. Equity
Market Money Index
Portfolio Market Portfolio
Portfolio
----------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $484,825 $14,929,643
Dividends and interest $56,593 $50,939 52,616 3,142,360
Interest on loans 1,560 3,716 2,731 142,944
----------------------------------- ------------
Total investment income 58,153 54,655 540,172 $18,214,947
----------------------------------- ------------
Contributions to the Plan:
Participants' 79,963 46,943 456,706 8,386,499
Employer's 34,617 18,182 170,226 3,191,807
Rollovers from other qualified plans 16,230 1,026 167,290 1,707,316
----------------------------------- ------------
Total contributions 130,810 66,151 794,222 13,285,622
----------------------------------- ------------
Total additions 188,963 120,806 1,334,394 31,500,569
----------------------------------- ------------
Deductions from net assets attributed to:
Benefits paid and distributions to participants (311,379) (126,365) (53,304) ($34,880) (3,871,538)
------------------------------------------------------------
Transfers among funds:
Interfund transfers 1,114,739 149,755 361,252 - -
Loans to participants, principal (6,612) (2,589) (26,637) 810,200 -
Loan principal repayments from participants 6,156 32,782 14,984 (562,591) -
------------------------------------------------------------
Net transfers among funds 1,114,283 179,948 349,599 247,609 -
------------------------------------------------------------
Total deductions and net transfers among 802,904 53,583 296,295 212,729 (3,871,538)
funds
------------------------------------------------------------
Net increase 991,867 174,389 1,630,689 212,729 27,629,031
Net assets available for benefits:
Beginning of year 925,652 933,188 1,219,588 1,634,374 59,071,723
----------------------------------------------------------------
End of year $1,917,519 $1,107,577 $2,850,277 $1,847,103 $86,700,754
============================================================
Page 10
13
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
6. FUND INFORMATION (CONTINUED)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
- - FOR THE YEAR ENDED DECEMBER 31, 1996
Fund Information
------------------------------------------------------------------
Merck Fidelity Fidelity Fidelity Fidelity
Common Magellan Equity- Growth Growth &
Stock Fund Income Company Income
Fund Fund Portfolio
------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $5,714,954 ($305,679) $97,534 $182,360 $348,878
Dividends and interest 441,398 943,430 77,511 129,585 162,881
Interest on loans 60,406 23,531 3,990 6,656 5,061
------------------------------------------------------------------
Total investment income 6,216,758 661,282 179,035 318,601 516,820
------------------------------------------------------------------
Contributions to the Plan:
Participants' 1,960,208 978,499 226,706 660,779 823,014
Employer's 632,454 318,907 76,117 220,703 285,143
Rollovers from other qualified plans 222,539 223,404 61,829 161,244 156,210
------------------------------------------------------------------
Total contributions 2,815,201 1,520,810 364,652 1,042,726 1,264,367
------------------------------------------------------------------
Total additions 9,031,959 2,182,092 543,687 1,361,327 1,781,187
------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid and distributions to participants (415,106) (227,981) (19,335) (3,945) (5,386)
Transfers among funds:
Interfund transfers (1,947,659) (1,117,277) 425,466 290,421 1,084,032
Loans to participants, principal (404,862) (111,970) (21,510) (62,268) (34,593)
Loan principal repayments from participants 230,176 98,478 14,589 30,073 34,813
------------------------------------------------------------------
Net transfers among funds (2,122,345) (1,130,769) 418,545 258,226 1,084,252
------------------------------------------------------------------
Total deductions and net transfers among
funds (2,537,451) (1,358,750) 399,210 254,281 1,078,866
------------------------------------------------------------------
Net increase 6,494,508 823,342 942,897 1,615,608 2,860,053
Net assets available for benefits:
Beginning of year 26,275,978 5,252,914 614,599 1,415,253 1,661,163
------------------------------------------------------------------
End of year $32,770,486 $6,076,256 $1,557,496 $3,030,861 $4,521,216
==================================================================
Fund Information
---------------------------------------------------------------------------
Fidelity Fidelity Fidelity Fidelity Fidelity Fidelity
Intermediate Retirement OTC Overseas Balanced Retirement
Bond Fund Growth Portfolio Fund Fund Money
Fund Market
Portfolio
-----------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments ($8,358) ($43,712) $68,082 $49,400 $72,295
Dividends and interest 30,031 93,217 184,817 96,704 75,016 $32,025
Interest on loans 185 1,713 4,463 3,232 5,272 1,516
-----------------------------------------------------------------------------
Total investment income 21,858 51,218 257,362 149,336 152,583 33,541
-----------------------------------------------------------------------------
Contributions to the Plan:
Participants' 123,486 192,674 365,417 312,367 264,177 75,251
Employer's 46,631 63,859 122,534 96,997 92,665 26,177
Rollovers from other qualified plans 82,639 76,703 37,828 27,299 150,627 49,394
-----------------------------------------------------------------------------
Total contributions 252,756 333,236 525,779 436,663 507,469 150,822
-----------------------------------------------------------------------------
Total additions 274,614 384,454 783,141 585,999 660,052 184,363
-----------------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid and distributions to participants (5,997) (1,992) (1,424) (2,335) (13,507) (52,395)
-----------------------------------------------------------------------------
Transfers among funds:
Interfund transfers 72,655 (60,941) 243,213 240,135 (425,938) 401,502
Loans to participants, principal (7,245) (17,137) (25,495) (11,784) (34,539) (18,822)
Loan principal repayments from participants 853 5,986 21,191 17,188 19,504 8,141
-----------------------------------------------------------------------------
Net transfers among funds 66,263 (72,092) 238,909 245,539 (440,973) 390,821
-----------------------------------------------------------------------------
Total deductions and net transfers among
funds 60,266 (74,084) 237,485 243,204 (454,480) 338,426
-----------------------------------------------------------------------------
Net increase 334,880 310,370 1,020,626 829,203 205,572 522,789
Net assets available for benefits:
Beginning of year 284,727 474,364 762,724 786,040 1,394,100 402,863
-----------------------------------------------------------------------------
End of year $619,607 $784,734 $1,783,350 $1,615,243 $1,599,672 $925,652
=============================================================================
Fund Information
----------------------------------------------------------
Fidelity Spartan Participant Total
Retirement U.S. Loan Fund
Govt. Equity
Money Index
Market Portfolio
Portfolio
---------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $125,630 $6,301,384
Dividends and interest $29,557 21,245 2,317,417
Interest on loans 4,336 1,348 121,709
---------------------------------------------------------
Total investment income 33,893 148,223 8,740,510
---------------------------------------------------------
Contributions to the Plan:
Participants' 28,234 215,982 6,226,794
Employer's 11,560 77,651 2,071,398
Rollovers from other qualified plans 59,007 80,777 1,389,500
---------------------------------------------------------
Total contributions 98,801 374,410 9,687,692
---------------------------------------------------------
Total additions 132,694 522,633 18,428,202
---------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid and distributions to participants (5,099) (4,713) ($33,627) (792,842)
---------------------------------------------------------
Transfers among funds:
Interfund transfers 469,787 324,604 - -
Loans to participants, principal (26,233) (5,643) 782,101 -
Loan principal repayments from participants 9,920 6,346 (497,258) -
---------------------------------------------------------
Net transfers among funds 453,474 325,307 284,843
Total deductions and net transfers among
funds 448,375 320,594 251,216 (792,842)
---------------------------------------------------------
Net increase 581,069 843,227 251,216 17,635,360
---------------------------------------------------------
Net assets available for benefits:
Beginning of year 352,119 376,361 1,383,158 41,436,363
---------------------------------------------------------
End of year $933,188 $1,219,588 $1,634,374 $59,071,723
=========================================================
Page 11
14
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
7. On June 19, 1998, Astra AB and Merck & Co., Inc., each a 50 percent owner in
the Company, announced that they had signed a definitive agreement under
which the Company will be restructured and the Company's business will be
combined with Astra AB's wholly-owned subsidiary, Astra USA Inc, in a new
Delaware limited partnership named Astra Pharmaceuticals, L.P., over which
Astra AB will have management control as the general partner. The Plan
Administrative Committee is currently evaluating what impact this will have
on the Plan.
15
SCHEDULE I
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
IDENTITY
OF ISSUER DESCRIPTION COST CURRENT VALUE
- --------- ------------------------------------ ---- -------------
Merck* Merck Common Stock $20,251,293 $44,555,355
Fidelity* Fidelity Magellan Fund 6,775,799 8,236,883
Fidelity* Fidelity Equity-Income Fund 2,021,178 2,458,094
Fidelity* Fidelity Growth Company Fund 3,920,657 4,324,795
Fidelity* Fidelity Growth & Income Portfolio 7,111,674 8,885,614
Fidelity* Fidelity Intermediate Bond Fund 1,007,890 1,013,114
Fidelity* Fidelity Retirement Growth Fund 1,060,239 984,186
Fidelity* Fidelity OTC Portfolio 2,762,233 2,873,472
Fidelity* Fidelity Overseas Fund 2,402,700 2,507,609
Fidelity* Fidelity Balanced Fund 1,932,983 2,166,328
Fidelity* Fidelity Retirement Money Market Portfolio 1,900,102 1,900,102
Fidelity* Fidelity Retirement Government Money Market Portfolio 1,096,596 1,096,596
Fidelity* Spartan U.S. Equity Index Portfolio 2,166,698 2,791,850
Plan Participant Loans (with interest rates ranging from 1,847,103 1,847,103
6.5% to 11.5% and maturities ranging from 1998 to 2028)
----------- -----------
Totals $56,257,145 $85,641,101
=========== ===========
*Party-in-interest
Page 13
16
SCHEDULE II
ASTRA MERCK INC. EMPLOYEE SAVINGS AND SECURITY PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS*
YEAR ENDED DECEMBER 31, 1997
SALES
-----------------------------------------
IDENTITY NUMBER OF NUMBER TOTAL
OF ISSUER DESCRIPTION PURCHASES OF SALES PURCHASES PROCEEDS NET COST GAIN (LOSS)
- --------- ------------------------------------- --------- -------- --------- -------- -------- -----------
Merck Merck Common Stock 204 126 $5,962,051 $5,913,393 $2,769,527 $3,143,866
Fidelity Fidelity Magellan Fund 150 107 2,234,563 1,091,049 927,170 163,879
Fidelity Fidelity Equity-Income Fund 115 51 1,191,261 632,838 541,600 91,238
Fidelity Fidelity Growth Company Fund 147 93 2,015,578 815,984 676,126 139,858
Fidelity Fidelity Growth & Income Portfolio 167 99 3,765,439 585,468 480,623 104,845
Fidelity Fidelity Intermediate Bond Fund 77 28 516,667 111,217 111,334 (117)
Fidelity Fidelity Retirement Growth Fund 71 38 507,424 250,460 250,232 228
Fidelity Fidelity OTC Portfolio 123 66 1,499,898 349,160 315,744 33,416
Fidelity Fidelity Overseas Fund 117 66 1,118,775 250,265 226,448 23,817
Fidelity Fidelity Balanced Fund 90 56 796,348 337,404 303,606 33,798
Fidelity Fidelity Retirement Money Market Portfolio 91 58 2,177,843 1,190,598 1,190,598 --
Fidelity Fidelity Retirement Government Money Market 72 26 433,921 261,845 261,845 --
Portfolio
Fidelity Spartan U.S. Equity Index Portfolio 113 41 1,340,267 215,036 168,232 46,804
*Series of transactions in excess of 5% of the current value of the Plan's
assets as of January 1, 1997 as defined in Section 2520, 103-6 of the Department
of Labor Rules and Regulations for Reporting and Disclosure under ERISA.
Page 14
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
(Name of Plan)
By: /s/ Linda E. Robertson
--------------------------------
Linda E. Robertson
Administrative Committee
Dated: June 30, 1998
18
Exhibit Index
Exhibit
- -------
23.1 Consent of Price Waterhouse LLP