SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File Number: 1-09623
IVAX CORPORATION
EMPLOYEE SAVINGS PLAN (PUERTO RICO)
(Full Title of the Plan)
IVAX CORPORATION
4400 Biscayne Boulevard, Miami, Florida 33137
(Name and principal executive office of the issuer of the securities held
pursuant to the Plan)
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Plan Administrator of the IVAX Corporation Employee Savings Plan
(Puerto Rico) has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
IVAX CORPORATION EMPLOYEE
SAVINGS PLAN (PUERTO RICO)
By: IVAX CORPORATION,
PLAN ADMINISTRATOR
Date: June 28, 2000 By: /s/ Thomas E. Beier
-------------------
Thomas E. Beier,
Senior Vice President-Finance
and Chief Financial Officer
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
(PUERTO RICO)
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1999 AND 1998
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Administrator of the
IVAX Corporation Employee Savings Plan (Puerto Rico):
We have audited the accompanying statements of net assets available for benefits
of the IVAX Corporation Employee Savings Plan (Puerto Rico) (the "Plan") as of
December 31, 1999 and 1998, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements and
the schedules referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Miami, Florida,
June 15, 2000.
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
(PUERTO RICO)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
------------------------------------
1999 1998
--------------- ---------------
ASSETS:
Cash $ 3,529 $ 4,019
--------------- ---------------
Investments, at market value-
Shares of common/collective trust 180,883 191,731
Shares of registered investment companies 622,088 449,751
Loans to participants 153,930 94,799
Employer securities 353,183 116,167
--------------- ---------------
Total investments 1,310,084 852,448
--------------- ---------------
Receivables-
Employer contributions 111,175 49,855
Due from employer - 18,912
--------------- ---------------
Total receivables 111,175 68,767
--------------- ---------------
Total assets 1,424,788 925,234
LIABILITIES:
Excess salary deferral payable 56,336 91,067
--------------- ---------------
Net assets available for benefits $ 1,368,452 $ 834,167
=============== ===============
The accompanying notes are an integral part of these financial statements.
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
(PUERTO RICO)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years Ended
December 31,
------------------------------------
1999 1998
--------------- ---------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions-
Employee $ 274,327 $ 99,186
Employer 111,175 49,855
Investment income-
Net appreciation in market value of investments 268,817 83,802
Interest 13,080 9,984
Dividends 50,730 32,744
--------------- ---------------
Total additions 718,129 275,571
--------------- ---------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants (126,988) (51,227)
Administrative expenses (520) -
Excess salary deferral expense (56,336) (91,067)
--------------- ---------------
Total deductions (183,844) (142,294)
--------------- ---------------
Net increase 534,285 133,277
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 834,167 700,890
--------------- ---------------
End of year $ 1,368,452 $ 834,167
=============== ===============
The accompanying notes are an integral part of these financial statements.
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
(PUERTO RICO)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. DESCRIPTION
a. General
Effective January 1, 1996, the IVAX Corporation Employee Savings Plan (Puerto
Rico) (the "Plan") was established as a defined contribution pre-tax elective
deferral plan to cover eligible Puerto Rico based employees of IVAX Corporation
(the "Employer" or the "Company") and affiliates. In October 1998, the Company,
serving as Plan sponsor and administrator, changed its Plan trustee and
recordkeeper from The Bank and Trust of Puerto Rico, which performed both
functions previously, to Banco Popular de Puerto Rico and Merrill Lynch,
respectively. The Company concurrently changed the Plan's investment
alternatives. New investment funds were offered to the Plan's participants,
while certain investment funds were eliminated from the Plan. As a result, the
participants re-allocated their investments based on the Plan's new investment
fund mix.
The following description provides only general information of the Plan.
Participants should refer to the Plan document for a more complete description
of the Plan.
b. Eligibility
Every employee who has completed three months of service for participation, as
defined, may participate in the Plan on the first day of the month after such
completion, provided that the individual is an employee on such date. An
individual shall not be eligible to participate during any time period for which
the individual is (i) a leased employee, (ii) included in a unit of employees
covered by certain collective bargaining agreements or (iii) a nonresident of
Puerto Rico who receives no earned income from sources within Puerto Rico.
c. Contributions
Participants may contribute a portion of their salary or wages through payroll
deduction contributions. The Plan generally permits each participant to elect to
defer up to 10% of his or her compensation. The Plan administrator may restrict
elective deferrals by highly compensated employees, as defined by the Plan, as
the Plan administrator determines is reasonably necessary in order to comply
with certain discrimination tests. Each participant's contribution was limited
by the Plan to $8,000 during 1999. Participant contributions to the Plan are
submitted to the trustee, who invests the contributions and investment earnings
as directed by the participants. All expenses incurred by a participant's
directing investments, including brokerage fees and other incidental expenses
are paid solely from the funds from the account of the participant.
-2-
Employer matching contributions are discretionary; the Employer may, at its
discretion, contribute on behalf of each participant an amount in cash, common
stock of the Employer, or a combination equal to a discretionary percentage of a
participant's compensation contributed as an elective deferral contribution with
respect to each Plan year. Such matching contributions shall not exceed such
percentage of the participant's compensation as the Employer may determine in
connection with each such matching contribution. The Employer may allow each
participant to choose to receive the matching contributions to be allocated to
his or her account in cash, common stock of the Employer, or a combination.
Employer matching contributions made during 1999 and 1998 were made exclusively
in cash.
All matching contributions shall be allocated as of the last day of a Plan year
to each participant who elected to contribute to his or her deferral account for
such year and who is an employee on the last day of such year or who is not
employed on the last day of the year but who terminated employment before the
last day of the Plan year on account of death, total or permanent disability (as
defined in the Plan), or retirement (as defined in the Plan).
With the consent of the Employer, the Plan allows new employees to rollover
amounts into the Plan from other qualified plans. The rollover contribution is
permitted provided the trust from which the funds are to be transferred permits
the transfer to be made and in the opinion of the Employer's legal counsel, such
transfer will not jeopardize the tax exempt status of the Plan or create adverse
tax consequences for the Employer.
d. Vesting
Participants immediately vest 100% in their elective deferral contributions and
rollover contributions. Participants vest 100% in their Employer matching
contributions after two years of service, as defined in the Plan. However, in
the event of termination of a participant's employment for death, for total or
permanent disability, or upon attainment of the normal retirement age of 65
years, such participant's Employer matching contributions shall immediately vest
100%.
e. Forfeitures
The nonvested portion of the Employer matching contribution is forfeited by
participants on the distribution of the entire vested portion of the terminated
participant's account. As of the end of each Plan year, any forfeitures during
the year shall first be made available to reinstate previously forfeited account
balances and the remaining forfeitures, if any, shall be used to reduce the
contribution of the Employer for such a Plan year. Participants forfeited $2,175
during the year ended December 31, 1999.
f. Distributions to Participants
Participants or their beneficiaries are eligible to receive distributions of
their vested account balances upon retirement or termination of employment.
Distributions to participants while the participant is still employed are
permitted for rollovers of the account balances, after-tax distributions,
financial hardship, as defined in the Plan, or upon the attainment of age
59-1/2. Participants or their beneficiaries may elect to receive a lump-sum
distribution, an installment distribution, an annuity, a rollover or a cash-out,
as defined in the Plan. In addition, participants may elect to receive the value
of the stock of the Employer held in their account under the Plan in cash or in
common stock of the Employer.
-3-
g. Loans to Participants
Participants are permitted to borrow from their fund accounts a minimum of
$1,000 and up to a maximum of the lesser of $50,000 or 50% of their account
balance. Loans must have a repayment period that does not exceed 60 months or up
to 120 months for the purchase of a primary residence. The loans are secured by
the balance in the participant's account and bear interest at 1% greater than
the prime lending rate as quoted in the Wall Street Journal on the last day of
the calendar quarter before the loan is established.
h. Plan Termination
Although it has not expressed any intent to do so, the Employer has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended. In the event of complete or partial termination of the Plan,
affected participants fully vest in their accounts.
i. New Accounting Pronouncements
The Plan implemented AICPA Statement of Position No. 99-3 "Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other Disclosure
Matters" ("SOP 99-3") for its plan year ended December 31, 1999. SOP 99-3
simplifies the financial statement disclosure requirements for certain
investments held by the Plan. Prior year amounts have been reclassified to
comply with the provisions of SOP 99-3.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting
in accordance with generally accepted accounting principles. Purchases and sales
of securities are recorded on the date the trade is initiated. Distributions are
recorded when paid.
b. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and changes therein, and
disclosure of contingent assets and liabilities. Actual results could differ
from those estimates.
3. INVESTMENTS
The Plan's investments are stated at fair value. Quoted market prices are used
to value investments. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year end.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
The following presents investments that represent 5 percent or more of the
Plan's net assets.
December 31,
1999 1998
---------------------
Federated Bond Fund $ 43,658 $ 49,972
Federated Growth Strategies Fund 204,028 102,755
Massachussetts Investors Growth Stock Fund 134,773 68,166
Massachussetts Investors Trust 177,160 182,654
Merrill Lynch Retirement Preservation Trust 180,883 191,731
IVAX Common Stock Fund 353,183 116,167
Loans to participants 153,930 94,799
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$268,817 as follows:
Mutual funds $ 104,061
IVAX Corporation common stock 168,928
Fixed income funds (4,172)
---------
$ 268,817
=========
4. EXCESS SALARY DEFERRAL
The Plan failed certain discrimination tests for the years ended December 31,
1999 and 1998 and as a result is required to return excess salary deferrals
withheld from certain participants during those years. During 1998, the Employer
reached an agreement with the Puerto Rico Department of the Treasury to apply a
portion of the 1997 excess contributions toward the 1998 contributions of
affected employees
-4-
subject to all applicable limits imposed on 1998 employee elective deferral
contributions. As of December 31, 1999 and 1998, amounts owed but not yet
disbursed to participants totaled $56,336 and $91,067, respectively.
Accordingly, a liability for these amounts is reflected in the accompanying
financial statements.
5. RECONCILIATION TO FORM 5500
As of December 31, 1999, the Plan had $203 of pending distributions to
participants who elected to withdraw from the Plan. In accordance with generally
accepted accounting principles, such amounts are included as a component of net
assets available for plan benefits in the accompanying statement of net assets
available for benefits. In accordance with Department of Labor Rules and
Regulations, such amounts are reflected as benefit payments and benefit claims
payable in the Plan's Form 5500.
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500.
December 31, December 31,
1999 1998
-------------- --------------
Net assets available for benefits per the financial statements $ 1,368,452 $ 834,167
Less: Amounts allocated to withdrawing participants (203) -
-------------- --------------
Net assets available for benefits
according to Form 5500 $ 1,368,249 $ 834,167
============== ==============
The following is a reconciliation of benefits paid to participants as reflected
in the financial statements to the Form 5500:
Year Ended Year Ended
December 31, December 31,
1999 1998
------------- -------------
Distributions to participants per the financial statements $ 126,988 $ 51,227
Less: Prior year amounts allocated to withdrawing participants - (21,185)
Deemed distributions to participants (262) -
Add: Amounts allocated to withdrawing participants 203 -
------------- -------------
Benefits paid to participants per the Form 5500 $ 126,929 $ 30,042
============= =============
6. TRANSACTIONS WITH RELATED PARTIES
Administration and accounting expenses related to the Plan are charged to the
Employer. The Employer performed certain administration and accounting services
on behalf of the Plan for which no amounts are charged. In addition, employee
contributions in the amount of $18,912 were withheld by the Employer and are
reflected in Due from employer at December 31, 1998 in the accompanying
statement of net assets available for benefits. There were no amounts withheld
at December 31, 1999. The employee contributions withheld were remitted to the
Plan during January 1999.
-5-
7. TAX STATUS
The Puerto Rico Department of Treasury has determined and informed the Company
by a letter dated July 1, 1997, that the Plan and related trust are designed in
accordance with applicable sections of the Puerto Rico Internal Revenue Code of
1994 ("Puerto Rico IRC"). The Employer and the Employer's tax counsel believe
that the Plan is currently being operated in compliance with the applicable
sections of the Puerto Rico IRC.
SCHEDULE I
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
(PUERTO RICO)
SCHEDULE H -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
Identity of Issuer,
Borrower, Lessor Description of Current
Or Similar Party Investment Cost Value
- ----------------------------- ----------------------------------------- ---------- ------------
*Banco Popular de Puerto Rico Federated Bond Fund $ 47,827 $ 43,658
*Banco Popular de Puerto Rico Federated Growth Strategies Fund 127,010 204,028
*Banco Popular de Puerto Rico Federated International Equity Fund 21,163 31,860
*Banco Popular de Puerto Rico Massachusetts Investors Growth Stock Fund 104,053 134,773
*Banco Popular de Puerto Rico Massachusetts Investors Trust 158,671 177,160
*Banco Popular de Puerto Rico Merrill Lynch Capital Fund 31,113 30,609
*Banco Popular de Puerto Rico Merrill Lynch Retirement Preservation Trust 180,883 180,883
*Banco Popular de Puerto Rico IVAX Common Stock Fund 164,964 353,183
*Banco Popular de Puerto Rico Loan Fund 153,930 153,930
---------- ------------
$ 989,614 $ 1,310,084
========== ============
*Denotes a Party-in-Interest.
SCHEDULE II
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
(PUERTO RICO)
SCHEDULE H -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
Purchase Sales Cost Net
Identity of Party Involved Description of Asset Price Price of Assets Gain (Loss)
- -------------------------- -------------------------------- ------- ------ --------- -----------
BANCO POPULAR DE IVAX Common Stock Fund $119,189 $ - $ - $ -
PUERTO RICO IVAX Common Stock Fund - 35,808 50,447 (14,639)
Retirement Preservation Trust 88,187 - - -
Retirement Preservation Trust - 99,035 99,035 -
Federated Bond Fund 21,760 - - -
Federated Bond Fund - 24,742 23,903 839
Federated Growth Strategies Fund 78,992 - - -
Federated Growth Strategies Fund - 33,159 42,460 9,301
Mass Invest Growth Stock Fund 77,136 - - -
Mass Invest Growth Stock Fund - 31,017 35,605 (4,588)
Mass Investors Trust 72,451 - - -
Mass Investors Trust - 77,678 84,195 (6,517)
Loan Fund 101,800 - - -
Loan Fund - 42,669 42,669 -
Pending Settlement Fund 49,432 - - -
Pending Settlement Fund - 49,432 49,432 -
IVAX CORPORATION EMPLOYEE SAVINGS PLAN
(PUERTO RICO)
NOTE TO SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1999
Transactions included on Schedule II represent reportable transactions, which
are defined by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 to be:
o Any single transaction within the period, with respect to any
Plan asset, involving an amount in excess of five percent of
the current value of Plan assets as of the beginning of the
Plan year;
o Any series of transactions (other than transactions with
respect to securities) within the period with or in
conjunction with the same person which, when aggregated,
regardless of the category of asset and the gain or loss on
any transaction, involves an amount in excess of five percent
of the current value of Plan assets as of the beginning of the
Plan year;
o Any transaction within the period involving securities of the
same issue if within the period any series of transactions
with respect to such securities, when aggregated, involves an
amount in excess of five percent of the current value of Plan
assets as of the beginning of the Plan year; and
o Any transaction within the period with respect to securities
with or in conjunction with a person if any prior or
subsequent single transaction within the period with such
person with respect to securities exceeds five percent of the
current value of Plan assets as of the beginning of the Plan
year.
EXHIBIT INDEX
EXHIBITS DESCRIPTION
-------- -----------
23.1 Consent of Arthur Andersen LLP