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 (Fee Required) for the fiscal year ended December 31, 1993 or
-----------------
[ ] Transition report pursuant to Section 15(d) of the Securities and Exchange
Act of 1934 (No Fee Required)
For the transition period from ___________ to ____________
Commission file Number 1-6247
----------
ALZA CORPORATION
TAX DEFERRAL INVESTMENT PLAN
---------------------------------------
(FULL TITLE OF THE PLAN)
ALZA CORPORATION
950 PAGE MILL ROAD
P.O. BOX 10950 PALO ALTO, CA 94303-0802
-------------------------------------------------------------
NAME OF ISSUER AND ADDRESS OF PRINCIPAL EXECUTIVE OFFICES
Financial Statements
and Supplemental Schedules
ALZA Corporation Tax Deferral
Investment Plan
YEARS ENDED DECEMBER 31, 1993 AND 1992
WITH REPORT OF INDEPENDENT AUDITORS
ALZA Corporation Tax Deferral
Investment Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1993 and 1992
CONTENTS
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . .1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits . . . . . . . . . . . . .2
Statements of Changes in Net Assets Available for Plan Benefits. . . . . . . .3
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .4
Supplemental Schedules
Schedule of Assets Held for Investment Purposes. . . . . . . . . . . . . . . 10
Schedule of Reportable Transactions. . . . . . . . . . . . . . . . . . . . . 11
[Ernst & Young LLP Letterhead]
Report of Independent Auditors
Trustees of the ALZA Corporation
Tax Deferral Investment Plan
We have audited the accompanying statements of net assets available for plan
benefits of the ALZA Corporation Tax Deferral Investment Plan (the "Plan") as of
December 31, 1993 and 1992, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1993 and 1992, and the changes in its net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1993 and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audit of
the 1993 financial statements and, in our opinion, are fairly stated in all
material respects in relation to the 1993 basic financial statements taken as a
whole.
/s/ Ernst & Young LLP
March 18, 1994, except as to Note 8, as to
which the date is August 17, 1994
1
ALZA Corporation Tax Deferral Investment Plan
Statements of Net Assets Available for Plan Benefits
DECEMBER 31,
1993 1992
------------------------------
Cash $ -- $ 196,808
Investments at fair value:
Merrill Lynch Money Market Fund:
Ready Assets Trust 5,128,570 3,206,856
Merrill Lynch Mutual Funds:
Basic Value 3,911,593 3,162,045
Growth 4,928,076 3,094,898
Corporate Bond 1,952,010 2,005,344
International Holdings 509,830 240,492
Capital 1,183,246 989,202
Other investments:
ALZA Common Stock 38,205,337 37,105,550
TDC Units 1,636,085 --
ALZA Warrants -- 11,114,337
Retirement Cash Management Account 8,274,982 6,591,920
Participant loans receivable 1,180,967 837,492
------------------------------
Net assets available for plan benefits $66,910,696 $68,544,944
------------------------------
------------------------------
SEE ACCOMPANYING NOTES.
2
ALZA Corporation Tax Deferral Investment Plan
Statements of Changes in Net Assets Available for Plan Benefits
YEAR ENDED DECEMBER 31,
1993 1992
-------------------------------
Net realized and unrealized (depreciation)/appreciation in fair value
of investments $(20,392,910) $ 869,684
Interest and dividend income 1,867,430 530,954
-------------------------------
(18,525,480) 1,400,638
Participant contributions 1,390,762 1,192,580
Transfers from ALZA Corporation Employee Stock Ownership Plan 18,624,225 40,709,535
Distributions (3,123,755) (1,599,939)
-------------------------------
(Decrease)/increase in net assets (1,634,248) 41,702,814
Net assets available for plan benefits, beginning of year 68,544,944 26,842,130
-------------------------------
Net assets available for plan benefits, end of year $ 66,910,696 $68,544,944
-------------------------------
-------------------------------
SEE ACCOMPANYING NOTES.
3
ALZA Corporation Tax Deferral Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
1. DESCRIPTION OF PLAN
The following description of the ALZA Corporation Tax Deferral Investment Plan
(the "Plan") provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan funded solely by participating
employees. ALZA Corporation (the "Company" or "ALZA") remits to the Trust
created by the Plan such amounts as are voluntarily elected by participants. The
Plan is subject to the Employee Retirement Income Security Act of 1974
("ERISA").
CONTRIBUTIONS
Eligible employees may make elective salary reduction contributions which are
tax deferred and are, therefore, not included in a participant's compensation
for federal income tax purposes until distributed to the participant. Under the
Plan, participants may elect to contribute through semimonthly payroll
deductions a percentage of compensation up to a maximum of $8,994 and $8,728 in
1993 and 1992, respectively (adjusted annually by an inflation index). Further
restrictions may be imposed on highly compensated individuals and Plan
participants who also participate in the ALZA Retirement Plan.
PARTICIPANT ACCOUNTS
Each participant's account is credited with 100% of the contributions made by
the participant through a salary deferral agreement. The Company will suspend
the pretax salary deferral agreement of any participant if it determines that a
participant's annual contribution limitations, as described in the Internal
Revenue Code, will be exceeded.
Participants allocate their contributions for investment into mutual funds and
other investment vehicles (see Note 5). Earnings and losses of the investments
are allocated to participants in accordance with the Plan.
Participants are allowed to make rollover contributions of amounts received from
other qualified employer-sponsored retirement plans. Such contributions are
deposited in the appropriate investment funds in accordance with the
participant's directions and the Plan's provisions.
4
ALZA Corporation Tax Deferral Investment Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
VESTING
Participant account balances are 100% vested at all times.
DISTRIBUTION OF BENEFITS
Distributions from the Plan are available to participants (or the beneficiary)
in any of the following situations: termination of employment with the Company,
retirement, total disability, death, reaching age 59 1/2, or a qualified
"financial hardship." The participant (or the beneficiary) may elect to receive
a lump sum distribution of the value of his account, or he or she may choose to
have the funds remain in the Plan if the account balance is greater than $3,500.
LOANS
A participant who is employed by the Company and meets certain plan requirements
may elect to borrow funds from his account. The borrowings are repayable,
evidenced by notes that bear interest at the published prime rate plus 1%, and
have repayment terms of one to 30 years, depending on the purpose of the loans.
Such repayments and interest thereon are credited to the borrower's account and
reinvested in the same manner as current contributions.
INCOME TAX STATUS
The Company has received a favorable determination letter from the IRS dated
June 15, 1987 which states that the Plan is qualified under Section 401(a) and
401(k) of the Internal Revenue Code. Accordingly, income generated by the
underlying trust is generally exempt from federal income tax under Section
501(a) of the Internal Revenue Code. The Company is unaware of any event or
series of events that may cause operational disqualification of the Plan.
ADMINISTRATIVE EXPENSES
Although not required to do so, the Company has paid all of the expenses (except
broker fee's on transactions executed at the participant's discretion)
associated with administering the Plan.
5
ALZA Corporation Tax Deferral Investment Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in mutual funds are valued at the published fair value as reported
by the fund manager which represents the net asset value of shares held by the
Plan at year end. Other investments are valued at the published fair value as
reported. The participant loans receivable are valued at cost which approximates
fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
exdividend date.
3. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to terminate the Plan at any time, subject to the provisions of
ERISA.
4. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Merrill Lynch
Trust Company of California. Merrill Lynch Trust Company of California is the
trustee as defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions. Fees for the investment management services are
paid by ALZA.
5. INVESTMENT FUND ACTIVITY
During 1991, the Plan was amended to allow for the acceptance of quarterly plan-
to-plan transfers from the ALZA Corporation Employee Stock Ownership Plan (the
"ESOP") pursuant to the ESOP phased termination. The Plan was amended in 1992 to
allow ALZA Common Stock to be an investment choice under the Plan. The following
are investment options under the Plan.
MERRILL LYNCH FUNDS
Ready Assets Trust -- A money market fund.
Basic Value -- A fund of equity securities that management of the fund
believes are undervalued and represent basic investment value.
6
ALZA Corporation Tax Deferral Investment Plan
Notes to Financial Statements (continued)
5. INVESTMENT FUND ACTIVITY (CONTINUED)
MERRILL LYNCH FUNDS (CONTINUED)
Growth -- A mutual fund investing primarily in a diversified portfolio of
equity securities seeking growth of capital and, as a secondary objective,
income.
Corporate Bond -- A fund of long-term corporate fixed-income securities,
including corporate bonds and notes, convertible securities and preferred
stocks.
International Holdings -- A fund of diversified international securities.
Capital -- A fund of equity, debt and convertible securities that seeks to
achieve the highest total return consistent with prudent risk.
OTHER INVESTMENTS
Retirement Cash Management Account ("RCMA") -- A self-directed brokerage
account that enables participants to choose from a wide variety of
investments.
ALZA Common Stock -- A fund consisting of shares of ALZA Common Stock
transferred from the ALZA ESOP or purchased under the provisions of the
Plan.
Other Plan funds, which are not investment options, include Therapeutic
Discovery Corporation ("TDC") Units, a fund consisting of the TDC Units
transferred from the ESOP, and ALZA Warrants, a fund consisting of warrants to
purchase ALZA Common Stock transferred from the ALZA ESOP in August 1992, all of
which have been exercised as of December 31, 1993. TDC Units consist of one
share of TDC Class A Common Stock and one warrant to purchase one-eighth of one
share of ALZA Common Stock.
7
ALZA Corporation Tax Deferral Investment Plan
Notes to Financial Statements (continued)
5. INVESTMENT FUND ACTIVITY (CONTINUED)
MERRILL LYNCH FUNDS
--------------------------------------------------------------------------------
READY ASSETS INTERNATIONAL
TRUST BASIC VALUE GROWTH CORPORATE BOND HOLDINGS CAPITAL
--------------------------------------------------------------------------------
Net assets available for plan benefits at
December 31, 1991 $1,815,457 $1,668,108 $2,644,584 $ 782,786 $ 57,847 $ 282,282
Net realized and unrealized appreciation
(depreciation) in fair value of investments -- 89,034 155,937 (28,799) (4,915) (11,270)
Interest and dividend income 76,824 135,027 87,484 120,730 14,812 46,211
Participant contributions 234,973 279,785 342,251 149,039 25,175 148,100
Transfer from ALZA Corporation Employee
Stock Ownership Plan -- -- -- -- -- --
Distributions (210,094) (60,903) (87,344) (17,047) -- (1,538)
Interfund transfers, net 1,289,696 1,050,994 (48,014) 998,635 147,573 525,417
Exchange of BES shares for ALZA shares -- -- -- -- -- --
--------------------------------------------------------------------------------
Net assets available for plan benefits at
December 31, 1992 3,206,856 3,162,045 3,094,898 2,005,344 240,492 989,202
Net realized and unrealized appreciation
(depreciation) in fair value of investments -- 475,193 521,679 24,763 37,593 62,039
Interest and dividend income 103,932 227,544 524,394 212,167 26,869 78,211
Participant contributions 212,065 336,899 497,868 124,130 57,975 129,514
Transfer from ALZA Corporation Employee
Stock Ownership Plan -- -- -- -- -- --
Distributions (896,966) (225,472) (202,009) (143,482) (8,149) (262,602)
Interfund transfers, net 2,502,683 (64,616) 491,246 (270,912) 155,050 186,882
--------------------------------------------------------------------------------
Net assets available for plan benefits at
December 31, 1993 $5,128,570 $3,911,593 $4,928,076 $1,952,010 $509,830 $1,183,246
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
8a
ALZA Corporation Tax Deferral Investment Plan
Notes to Financial Statements (continued)
5. INVESTMENT FUND ACTIVITY (CONTINUED)
BES CALLABLE
ALZA CLASS A TDC
RCMA COMMON STOCK COMMON STOCK UNITS
-----------------------------------------------------------
Net assets available for plan benefits at December 31, 1991 $ 241,011 $12,851,416 $ 6,201,820 $ --
Net realized and unrealized appreciation (depreciation) in
fair value of investments 189,667 812,839 (5,216) --
Interest and dividend income -- -- -- --
Participant contributions -- 13,257 -- --
Transfer from ALZA Corporation Employee Stock Ownership Plan -- 26,626,505 -- --
Distributions -- (995,958) (81,307) --
Interfund transfers, net 6,161,242 (8,086,185) (231,621) --
Exchange of BES shares for ALZA shares -- 5,883,676 (5,883,676) --
-----------------------------------------------------------
Net assets available for plan benefits at December 31, 1992 6,591,920 37,105,550 -- --
Net realized and unrealized appreciation (depreciation) in
fair value of investments (401,044) (14,109,393) -- (228,961)
Interest and dividend income -- -- -- 663,425
Participant contributions 8,161 24,150 -- --
Transfer from ALZA Corporation Employee Stock Ownership Plan -- 17,288,950 -- 1,335,275
Distributions -- (1,251,160) -- (28,513)
Interfund transfers, net 2,075,945 (852,760) -- (105,141)
-----------------------------------------------------------
Net assets available for plan benefits at December 31, 1993 $8,274,982 $38,205,337 $ $1,636,085
-----------------------------------------------------------
-----------------------------------------------------------
PARTICIPANT
ALZA LOANS
WARRANTS CASH RECEIVABLE TOTAL
-----------------------------------------------------------
Net assets available for plan benefits at December 31, 1991 $ -- $ 59,523 $ 237,296 $26,842,130
Net realized and unrealized appreciation (depreciation) in
fair value of investments (327,593) -- -- 869,684
Interest and dividend income -- -- 49,866 530,954
Participant contributions -- -- -- 1,192,580
Transfer from ALZA Corporation Employee Stock Ownership Plan 14,083,030 -- -- 40,709,535
Distributions (145,748) -- -- (1,599,939)
Interfund transfers, net (2,495,352) 137,285 550,330 --
Exchange of BES shares for ALZA shares -- -- -- --
-----------------------------------------------------------
Net assets available for plan benefits at December 31, 1992 11,114,337 196,808 837,492 68,544,944
Net realized and unrealized appreciation (depreciation) in
fair value of investments (6,774,779) -- -- (20,392,910)
Interest and dividend income -- -- 30,888 1,867,430
Participant contributions -- -- -- 1,390,762
Transfer from ALZA Corporation Employee Stock Ownership Plan -- -- -- 18,624,225
Distributions (90,018) -- (15,384) (3,123,755)
Interfund transfers, net (4,249,540) (196,808) 327,971 --
-----------------------------------------------------------
Net assets available for plan benefits at December 31, 1993 $ -- $ -- $1,180,967 $66,910,696
-----------------------------------------------------------
-----------------------------------------------------------
8b
ALZA Corporation Tax Deferral Investment Plan
Notes to Financial Statements (continued)
6. ACQUISITION OF BIO ELECTRO SYSTEMS, INC.
On February 7, 1992, Bio Electro Systems, Inc. ("BES") was merged into ALZA
Corporation and each BES Class A common share was exchanged for .5772 ALZA
shares. All BES shares held by participants of the Plan as of that date were
exchanged for ALZA shares.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
DECEMBER 31,
1993 1992
------------------------------
Net assets available for benefits per the
financial statements $66,910,696 $68,544,944
Amounts allocated to withdrawing participants (30,592) (84,558)
------------------------------
Net assets available for benefits per the
Form 5500 $66,880,104 $68,460,386
------------------------------
------------------------------
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
YEAR ENDED DECEMBER 31,
1993 1992
------------------------------
Benefits paid to participants per the
financial statements $3,123,755 $1,599,939
Add: Amounts allocated to withdrawing
participants at end of year 30,592 84,558
Less: Amounts allocated to withdrawing
participants at beginning of year (84,558) (210,018)
------------------------------
Benefits paid to participants per the Form 5500 $3,069,789 $1,474,479
------------------------------
------------------------------
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to year
end but not yet distributed.
8. SUBSEQUENT EVENT
As of August 17, 1994, the closing market price of ALZA common stock had
declined to $23.125 per share compared to $28 per share as of December 31, 1993.
9
Supplemental Schedules
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Money Market Funds
Merrill Lynch Ready Assets Trusts* 5,128,570 $ 5,128,570 $ 5,128,570
Mutual Funds
Merrill Lynch Basic Value* 167,377 3,428,949 3,911,593
Merrill Lynch Growth* 281,926 4,395,436 4,928,076
Merrill Lynch Corporate Bond* 163,075 1,939,510 1,952,010
Merrill Lynch International Holdings* 38,799 479,944 509,830
Merrill Lynch Capital* 42,304 1,138,728 1,183,246
Other Investments
Alza Common Stock* 1,364,476 49,058,668 38,205,337
TDC Units 297,469 1,835,279 1,636,085
RCMA
3Com Corp. 500 13,325 23,500
Acclaim Entertainment Inc. Com Par $0.02 590 17,062 12,537
Advanced Micro D Inc. 500 8,887 8,875
Advanced Technology Labs Inc. 100 1,750 1,675
Affymax N V 1,200 24,300 17,700
Air Products & Chemicals 180 6,988 7,965
Akzo N V 120 5,015 5,805
Alexander & Alexander Services 400 10,900 7,800
Alza Corp Cl A Del 65,444 407,699 1,844,734
Amerada Hess Corp. 280 13,280 12,635
American Cyanamid Company 250 13,674 12,562
American Express Company 100 2,760 3,087
American Medical Holdings Inc. 640 7,689 12,480
American Telephone and Telegraph 560 32,728 29,400
Amgen Inc. Com Pv $001 100 7,062 4,950
Amn Power Conversion Corp. 1,480 21,282 35,150
Anacomp Inc. 2,000 8,450 8,000
Apache Corp. 200 6,340 4,675
Apple Computer Inc. 100 5,760 2,925
Applied Material Inc. 130 3,427 5,037
Ashland Oil Inc. Sub Deb Conv 06 750% Jul 01 2014 Rg 20,000 17,300 20,150
Atlantic Tele-Network Inc. 500 8,325 7,125
Avery Dennison Corp. 460 13,160 13,512
BankAmerica Corp. 370 16,932 17,158
Bear Stearns Cos Inc. 708 14,137 15,487
<FN>
_________________________
* Indicates a party-in-interest transaction.
</FN>
10a
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Becton Dickinson Company 200 7,862 7,150
Bergstrom Capital Corp. 41 5,077 3,897
Best Buy Co. Inc. 149 4,446 6,928
Blockbuster Entertainment Corp. 590 14,137 18,068
Bob Evans Farms Inc. 480 8,760 10,500
Boeing Company 180 6,860 7,785
Borden Inc. 250 5,360 4,250
Borland Internation Inc. 100 2,225 1,487
BP Prudhoe Bay Rty Tr Unit Ben Int 500 15,575 12,187
Briggs and Stratton 30 1,807 2,475
Bristol Myers Squibb Company 530 29,633 30,872
British Steel PLC F Instadr 505 9,541 9,342
Cabletron System Inc. 155 13,310 17,437
California Water Service 195 6,435 7,556
Canadian Pacific Ltd. $5 910 14,650 14,787
Caterpillar Inc. Del 70 3,753 6,230
CCP Ins Inc. 115 2,980 3,205
CD First Federal Savings Bank of CA
03.300% Aug 17 1994 Maty 31,000 31,000 30,845
CD La Salle National Bank Chicago IL Zero% Nov 18 1998 100,000 75,000 75,740
CD MBNA America Bank Na Newark Delaware
03.950% Mar 24 1995 Maty 98,000 98,000 97,225
CD Merrill Lynch Bank & Trust Company Plainsboro NJ
030% Apr 27 1994 Maty 92,000 92,000 91,650
CD Merrill Lynch National Financial Salt Lake Utah
03.650% May 17 1995 Semi 98,000 98,000 96,236
Cellpro Inc. 500 10,500 17,375
Chase Manhattan Corp. 45 1,501 1,524
Cheyenne Software Inc. 350 13,334 9,756
Chile Fd Inc. 642 19,323 28,569
China Fd Inc. 1,000 13,000 28,250
Chiquita Brands International 9.625% Jan 15 2004 20,000 20,437 20,300
Chiron Corp Del 20 1,130 1,680
Cifra S A De C V Adr New 1,000 2,220 3,230
Circus Circus Enterprises 135 5,107 4,961
Cisco Systems Inc. 735 29,323 47,499
Clark Equipment Company 110 4,896 5,761
Clayton Homes Inc. 1,073 22,036 26,020
CMA Money Fund 1,867,728 1,867,729 1,867,728
CML Group Inc. 152 3,505 3,591
CMS Energy Corp. 665 16,923 16,708
Coastal Corp. 350 8,999 9,887
Colgate Palmolive 90 5,017 5,613
10b
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Columbia Healthcare Del 58 1,575 1,921
Comcast Corp. CL A 40 1,605 1,455
Compaq Computer Corp. 340 17,172 25,117
Computer Association International Inc. 735 15,387 29,400
Conagra Inc. 200 6,625 5,275
Conrail Inc. Com 60 3,480 4,012
Cons Edison NY 3,776 123,738 121,319
Continental Bank Corp. 65 1,543 1,714
Countrywide Credit Ind Del 388 11,146 9,748
Crestar Financial Corp. 310 13,261 12,981
Cuc International Inc. 320 10,704 11,520
Data I O Corp. 500 2,375 1,218
Dayton Hudson Corp. 100 6,499 6,662
Deere Company 220 14,376 16,280
Digital Equipment 210 7,692 7,192
Dillard Department Stres A 100 4,975 3,800
Dominion Res Inc VA 1,201 48,067 54,532
Dow Chemical PV 2 50 310 17,513 17,592
Dresser Industrial 470 9,803 9,752
E M C Corporation Mass 960 17,503 15,840
Eastman Kodak 80 1,875 4,500
ECI Telecom Ltd. Com 780 14,265 19,987
Electronic Arts 385 8,965 11,550
Emerson Electric Company 150 8,370 9,037
Enron Corp. 40 1,370 1,160
Equitable Iowa Cos 45 1,485 1,524
Fdl R Investment Tr SBI New 101 2,911 2,531
Federal Home Loan Manaagement Vtg 90 4,353 4,488
Federal National Management Association 90 6,873 7,065
Fidelity National Financial Inc. 80 2,615 2,160
Fingerhut Cos Inc. 455 11,608 12,796
First American Corp. Tenn 730 20,073 23,360
Ford Motor Company 220 10,070 14,190
Fresh Choice Inc. 300 7,050 8,175
GC Cos Inc. 22 811 761
General Dynamics Corp. 155 14,895 14,298
General Electric 150 14,110 15,731
General Instrument Corp. New 385 12,335 21,752
General Mills 1,000 68,500 60,750
General Motors Corp. Cl E 75 2,378 2,193
General Public Utilities 670 18,643 20,698
Gillette Company 120 6,825 7,155
Glaxo Holdings Plc Spns Adr 2,500 55,600 52,187
10c
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Goulds Pumps Inc. 200 4,925 4,975
Green Tree Acceptance 365 12,550 17,520
Grumman Corp. 140 5,547 5,530
GTE Corp. 1,523 53,076 53,339
Harcourt General Inc. 235 7,929 8,518
Hasbro Inc. Com 200 6,707 7,250
Health Rehab Ppty Tr SBI 300 4,635 4,425
Hechinger Company Sd Conv 5% 4/01/12 20,000 14,500 15,950
Heilig Meyers Company VA 979 20,497 38,181
Helmerich Payne Inc. 305 9,808 8,501
Hercules Inc. 15 1,286 1,702
Hewlett Packard Company 550 38,868 43,450
Home Depot Inc. 133 6,750 5,253
Hsbc Holdings Plc Sponsored Adr 100 11,222 14,600
Icos Corp. 1,500 11,437 8,437
Immunex Corp. New 200 10,250 3,250
Infinity Broadcasting Corp. Cl A 255 8,797 7,713
Integra Finl Corp. 320 13,318 13,760
Intel Corp. 700 39,322 43,400
Intellegent Electrs Inc. Com 90 1,530 2,463
International Business Machine 600 30,224 33,900
International Flavor and Fragrance 40 4,350 4,550
International Paper Company 280 17,918 18,970
Interpoint Corp. Wash 500 4,187 4,875
JP Morgan and Company Inc. 100 6,397 6,937
K Mart Corp. 860 18,567 18,490
Kansas City Sthn Ind 350 10,739 18,025
Key Tronic Crop. 500 5,187 4,125
Keycorp 275 10,888 9,728
Keystone Am Hartwell Emerging Growth Fd Cl A 809 20,499 19,596
Keystone International Inc. 460 12,131 12,592
Lancaster Colony Crp 241 7,188 11,086
Lannet Data Communications Com Foreign 100 2,635 1,162
Laserscope 1,000 5,250 5,500
Lilly Eli Company 60 3,645 3,562
Liuski International Inc. 100 1,010 1,100
Lockheed Corp. Delaware 130 7,952 8,872
Loral Corp. 500 11,857 18,875
Lotus Development Corp. 215 9,173 11,825
LSI Logic Corp. 815 13,667 12,938
Marion Merrell Dow Com 500 8,762 9,000
Marvel Entertainment Group Inc. 80 1,585 2,190
Masco Corp. 450 12,352 16,650
10d
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Mc Donnell Douglas Crp 215 17,398 23,005
McDermott International Inc. 610 14,484 16,165
McDonalds Corp Com 110 5,362 6,270
Medtronic Inc. 30 2,857 2,463
Mellon Book Corp. 25 1,418 1,325
Merck and Company Inc. 1,560 54,832 53,632
Merrill Lynch and Company Inc.* 400 13,940 16,800
Merrill Lynch Capital Fund Cl A* 1,153 33,204 32,264
Merrill Lynch Corp Bd Hi Qualifty Class A* 435 5,389 5,208
Merrill Lynch Corp Bond Hi Inc. Class A* 640 5,241 5,330
Merrill Lynch Dragon Fund Inc. Class A* 1,666 22,313 31,238
Merrill Lynch Euro Fund/Cl A* 1,210 16,992 17,750
Merrill Lynch Glob Allocation Fd/Cl A* 15,445 190,858 204,188
Merrill Lynch Growth Fund for Investment & Retirement* 11,277 180,371 197,136
Merrill Lynch Latin America Fund Class A* 1,371 17,718 22,798
Merrill Lynch Pacific Fund Class A* 430 9,007 9,119
Merrill Lynch Phoenix Fund Cl A* 1,774 24,249 23,869
Merrill Lynch Special Value Fd Class A* 356 5,452 5,589
Mexico Equity and Income Fund 1,334 19,634 32,849
MGI Pharmaceutical Inc. 228 2,793 3,363
Micron Technology Inc. 350 16,147 16,275
Microsoft Corp Com 100 8,537 8,062
Minnesota Mng Mfg 120 12,405 13,050
Mobile Telecommunication 715 12,331 17,338
Morgan Stanley Group Inc. 210 14,680 14,857
Motorola Inc. 200 15,857 18,450
Mycogen Corp. Com 400 5,600 4,100
Nalco Chemical Company 390 13,273 14,625
Nations Bank Corp. 90 4,623 4,410
Neorx Corp. 500 7,500 4,625
New York Venture Fund Inc. 423 5,207 5,072
Newbridge Networks Corp. 395 12,672 21,626
Northern Border Partners L P Unit Ltd. Partnership 200 5,615 5,600
Novell Inc. 100 3,160 2,075
NWNL Cos Inc. 350 9,294 11,200
Nynex Corporation 80 3,355 3,210
Pacific Enterprises 505 13,402 11,993
Pacific Gas Electric Company 3,472 115,954 121,988
Pacificare Health System 205 11,629 7,661
Pactel Corporation 132 3,467 3,283
<FN>
_________________________
* Indicates a party-in-interest transaction.
</FN>
10e
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Paine Webber Group Inc. 425 13,509 11,475
Panhandle Eastern Cp 470 11,119 11,162
Parametric Technology Crop. 590 16,135 22,862
Pepsico Inc. Nth Carolina 150 6,225 6,131
Pfizer Inc. 120 8,700 8,280
Philip Morris Cos Inc. 80 6,170 4,450
Phoenix Bal Fund SBI 403 6,417 6,471
Pipe Line Partners LP SR Pref Unit 200 5,465 5,350
Pogo Producing Company 240 4,630 4,020
Polaris Inds Partners Lp A 1,500 40,337 50,625
Portland General 1,000 17,225 20,500
Premark International Inc. Com 25 1,518 2,006
Primerica Corp. New 100 4,197 3,887
Prism Group Inc. 2,000 8,950 3,500
Progressive Crp Ohio 405 14,003 16,402
Puget S Pow Lgt 5,375 146,206 133,711
Qualcomm Inc. 250 17,380 13,250
Read-Rite Corp. 1,000 16,152 15,000
Regeneron Pharmacudicals Inc. 200 2,400 3,100
Republic New York Cp 70 3,603 3,272
Reuters Holding Plc Adr 90 5,737 7,110
Revco D S Inc. New Com When Issued 700 10,265 10,150
Reynolds Metals Com 270 13,196 12,251
Rhone Poulence Rorer Inc. 70 3,263 2,520
S C I Systems Inc. 1,100 21,147 19,387
Safeway Inc. Com New 85 1,551 1,806
San Juan B Rty T UBI 2,000 17,450 19,500
Santa Fe Energy Res Inc. 200 1,965 1,850
Santa Fe Pacific Pipeline Partner Pref Unit 100 3,985 3,737
Scesorp Com 3,196 70,416 63,932
Schering Plough Corp. 60 3,817 4,110
Schlumberger Ltd. 210 12,600 12,416
Scios Inc. 490 4,532 5,022
SLM International Inc. 277 8,186 6,371
Sonat Inc. 550 8,601 15,881
Standard Federal Bank Troy Mich 55 1,662 1,650
Stop and Shop Cos Inc. New 275 4,812 5,568
Sun Sportswear Inc. 3,000 19,050 20,250
Sunamerica Inc. 355 9,694 15,353
Superior Ind International 35 1,477 1,496
Syntex Corp. 1,500 34,500 23,812
Tambrands Inc. 80 5,130 3,540
Telefonos M SA RP L ADR 90 4,917 6,075
10f
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Time Warner Inc. Conv Ser C Sub Debenture
80% Jan 10 2015 14,000 14,656 14,752
TJX Cos Inc. New 415 11,722 12,086
Toys R Us 270 10,833 11,036
U.S. Healthcare Inc. Com 130 6,174 7,491
U.S. Surgical Corp. 50 3,437 1,125
U.S. Treasury Bond 7.250% May 15, 2016 26,000 25,406 28,116
U.S. Treasury Note 03.875% Sep 30 1995 29,000 29,022 28,882
U.S. Treasury Note 04.000% Sept 30 1994 28,000 28,166 28,096
U.S. Treasury Note 04.250% Due 5/15/96 29,000 28,876 28,909
U.S. Treasury Note 05.125% May 31 1994 130,000 131,747 130,954
U.S. Treasury Note 06.250% Feb 15 2003 27,000 27,886 27,902
U.S. Treasury Note 07.875% Aug 15 2001 24,000 25,938 27,311
U.S. Treasury Strips Zero% Nov 15 2004 10,000 4,415 5,115
U.S. Treasury Strips Zero% Nov 15 2005 10,000 4,058 4,746
U.S. Treasury Strips Zero% Nov 15 2006 10,000 3,727 4,397
U.S. Treasury Strips Zero% Nov 15 2007 10,000 3,410 4,070
U.S. Treasury Strips Zero% Nov 15 2008 10,000 3,146 3,765
U.S. Treasury Strips Zero% Nov 15 2009 10,000 2,891 3,490
U.S. Treasury Strips Zero% Nov 15 2010 10,000 2,657 3,229
Ual Corp. 200 24,965 29,200
Unilever Nv 4Fln NY 120 12,554 13,860
United Healthcare Corp. 615 33,525 46,663
Utilicorp Utd. Inc. Del 100 2,860 3,175
UTS Therapeutic Discovery 2,843 17,768 15,636
Vitesse Semiconductor Corp. 1,000 4,250 3,875
VLSI Technology Inc. 1,125 13,318 12,093
Waban Inc. 500 9,250 6,812
Wal Mart Stores Inc. 620 20,137 15,500
Walt Disney Company Del 891 36,671 37,987
Wash Federal Savings & Loans Association Seatle 110 2,700 2,873
Wash Mutual Investment Fund 189 3,415 3,360
West One Bancorp 55 1,581 1,567
Western Resources Inc. 305 11,195 10,636
Westinghouse El Corp. 1,100 16,472 15,537
Whirlpool Corp. 25 1,612 1,662
Williams Companies Del 670 13,622 16,331
WMX Technologies Inc. 220 6,710 5,802
WT09 97Hanson Plc B New Usd 1,000 506 469
-----------------------------------
$73,982,635 $65,729,730
-----------------------------------
-----------------------------------
10g
ALZA Corporation Tax Deferral Investment Plan
Item 27a
Assets Held for Investment Purposes
December 31, 1993
DESCRIPTION
OF
INVESTMENT
(SHARES, UNITS
OR PRINCIPAL CURRENT
IDENTITY OF ISSUE AMOUNT COST VALUE
- - ----------------------------------------------------------------------------------------------------------------
Participant loans* Maturing at
various dates from
one to thirty
years, at interest
rates ranging from
7% to 12.5% $ 1,180,967 $ 1,180,967
-----------------------------------
-----------------------------------
10h
ALZA Corporation Tax Deferral Investment Plan
Reportable Transactions - Item 27d
For the Year Ended December 31, 1993
CATEGORY (iii) -- SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
PURCHASES OR TRANSFERS SALES
------------------------------- ----------------------------------------------
TOTAL AMOUNT
OF NUMBER OF TOTAL AMOUNT NUMBER OF NET GAIN
PURCHASES TRANSACTIONS OF SALES TRANSACTIONS (LOSS)
------------------------------- ----------------------------------------------
Merrill Lynch Ready Asset Trust Fund* $ 4,248,388 24 $2,326,674 -- $ --
ALZA Common Stock* $20,004,743 25 $4,795,562 30 $(1,503,419)
ALZA Warrants* -- -- $4,399,558 29 $(6,774,779)
<FN>
_____________________
* Indicates a party-in-interest transaction.
Reportable transactions include any series of transactions that in the aggregate
exceed 5% of the fair market value of the Plan assets at the beginning of the
year. The primary transactions occur on a monthly basis or semimonthly basis,
with some funds having additional transactions for minor adjustments or other
contributions.
There were no category (i), (ii) or (iv) reportable transactions during 1993.
11
EXHIBIT INDEX
EXHIBITS
23 Consent of Ernst & Young LLP, Independent Auditors
24 Powers of Attorney
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the ALZA
Plans Administrative Committee has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized, in the City of Palo
Alto and the State of California on August 31, 1994.
ALZA CORPORATION
TAX DEFERRAL INVESTMENT PLAN
By: J. Scott Hamilton
--------------------------------
J. Scott Hamilton,
Administrative Committee Member
By: Susan K. Fairbrook
--------------------------------
Susan K. Fairbrook,
Administrative Committee Member
By: Dawn M. Pollard
--------------------------------
Dawn M. Pollard,
Administrative Committee Member
By: JoAnne M. Zinman
--------------------------------
JoAnne M. Zinman,
Administrative Committee Member
EXHIBIT INDEX
FORM 11-K ANNUAL REPORT
ALZA Corporation
TAX DEFERRAL INVESTMENT PLAN
Numbered
Exhibit Description
- - ---------- ------------------------
23 Consent of Ernst & Young LLP,
Independent Auditors
24 Powers of attorney