Exhibit 99(a)(iv)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year end December 31, 2000
Or
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission file number 1-3215
CENTOCOR QUALIFIED
SAVINGS AND RETIREMENT PLAN
(Full Title of the Plan)
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933
(Name of issuer of the securities held
pursuant to the plan and the address of its
principal executive office)
Centocor Qualified Savings and Retirement Plan
Index to Financial Statements and Schedules
Page 3 Report of Independent Accountants
Page 4 Statements of Net Assets Available for Plan Benefits as of
December 31, 2000 and 1999
Page 5 Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 2000 and 1999
Pages 6-11 Notes to Financial Statements
Page 12 Item 27a - Supplemental Schedule of Assets Held for Investment
Purposes
Consent of PricewaterhouseCoopers LLP, dated June 27, 2001
The Plan. 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
hereunto duly authorized.
CENTOCOR QUALIFIED SAVINGS
AND RETIREMENT PLAN
June 27, 2001 By: /s/ R.J. Darretta
-----------------------------
R. J. Darretta
Chairman, Pension Committee
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REPORT OF INDEPENDENT ACCOUNTANTS
To the 401(k) Administrative Committee of Centocor, Inc.:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Centocor Qualified Savings and Retirement Plan (the "Plan")
as of December 31, 2000 and 1999, and the changes in net assets available for
plan benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States of America. 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 auditing standards
generally accepted in the United States of America, 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 our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplemental
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits 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.
May 25, 2001
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
See accompanying Notes to Financial Statements.
4
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
See accompanying Notes to Financial Statements.
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting.
Investments
The Centocor Qualified Savings and Retirement Plan's (the "Plan")
Investments, administered by The Vanguard Group, Inc. (the "Trustee"),
are stated at fair value based on the market value of the underlying
securities on the last business day of the year.
Johnson & Johnson common shares are carried at market value which is
determined by quoted market prices. Participant loans are valued at
cost which approximates fair value.
Purchases and sales of investment securities are reflected on a trade
date basis. Gains and losses on sales of investment securities are
determined on the average cost method.
Use of Estimates
The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of net assets available for plan benefits
at the date of the financial statements and the changes in net assets
available for plan benefits during the reporting period and, when
applicable, disclosure of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from those
estimates.
Risks and Uncertainties
The Plan provides for various participant investment options in funds
which can invest in any combination of stocks, bonds, fixed income
securities, mutual funds and other investment securities. Investment
securities are exposed to various risks, such as interest rate, market
and credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value
of investment securities, it is at least reasonably possible that
changes in risks in the near term would materially affect participants'
account balances and the amounts reported in the Statements of Net
Assets Available for Plan Benefits and the Statements of Changes in Net
Assets Available for Plan Benefits.
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Related Party Transactions
Certain Plan investments are shares of mutual funds managed by the
Trustee. Therefore, these transactions qualify as party-in-interest.
Payment of benefits
Benefit payments are recorded when paid.
NOTE 2 DESCRIPTION OF PLAN
The following description of the Plan provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
General
Effective January 1, 1985, Centocor, Inc. (the "Company") established
the Plan, a defined contribution savings plan subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA").
Substantially all U.S. employees of the Company, or any of its
subsidiaries or affiliates, are eligible to participate in the Plan.
Employees may participate as of the first date of his/her employment.
Substantially all of the legal, accounting and administrative expenses
associated with Plan operations are currently paid by the Company. On
October 6, 1999, the Company and Johnson & Johnson completed a merger
between the two companies.
Contributions
Eligible employees may make voluntary tax-deferred contributions of 1
to 15 percent of their eligible cash compensation up to certain annual
limits as prescribed by the U.S. Internal Revenue Code. Maximum annual
contributions may be limited at the discretion of the Company.
Employee contributions are invested as directed by the employee in any
of the eight investment programs available under an investment contract
with the Trustee (see Note 3). Company contributions are made
principally in the Johnson & Johnson Common Stock Fund.
The Company may elect, but is not required, to make contributions to
the Plan for the benefit of the participating employees. To date,
contributions have been made as a percentage of the participants'
contributions for the year, as determined by the Company's Board of
Directors. In 2000 and 1999, the Company elected to contribute an
amount equal to 50 percent of the contributions of each employee. The
Company's contribution is based upon annual employee contributions up
to a level of 6 percent of their cash
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
compensation. Additionally, in 2000 and 1999, the Company committed to
make a contribution equal to 1% of each employee's compensation. At
December 31, 2000, 33,329 shares of the Johnson & Johnson Common Stock
Fund with a fair value of $99.5781 per share determined by the average
trade price for the last twenty days in December of 2000 and $57 in
cash was due to the Plan from the Company for its 2000 contribution.
Participant forfeitures of $629,695 were used for the 2000 Company
contribution. At December 31, 1999, 26,224 shares of the Johnson &
Johnson Common Stock Fund with a fair value of $94.016 per share
determined by the average trade price for the last twenty days in
December of 1999 and $66 in cash was due to the Plan from the Company
for its 1999 contribution.
Participants' Accounts
Separate accounts are maintained by the Trustee for each participant.
Each participant's account reflects the participant's contribution, the
Company's contribution, interest, dividends, other income, and gains or
losses earned by each of the investment programs. Investment income is
reinvested in the same programs.
Participants may transfer all or a portion of their accounts among the
eight investment programs available under the Plan by directly
contacting the Trustee. The transfer would take effect immediately upon
the participant's notification of the change.
Vesting
Employee contributions are fully (100%) vested and non-forfeitable.
Employer contributions are fully vested upon death, total and permanent
disability, or attainment of age 65; otherwise, employer contributions
are subject to vesting percentages based on years of service, as
defined by the Plan documents. Employee non-vested forfeitures are used
by the Company to offset employer contributions. The amount of
forfeitures for 2000 and 1999 were $112,772 and $89,241, respectively.
The employer contributions vesting percentages are as follows:
Payment of Benefits
Benefits from the participants' vested accounts are normally payable to
Plan participants upon retirement, death, termination of Company
employment or total and permanent disability.
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
A participant, while still an employee, may generally withdraw all or a
portion of his vested, non-forfeitable tax-deferred contribution
account if such amount is needed to defray the cost of a medical
emergency, enable the participant to acquire or improve his principal
residence, or assist the participant in preventing eviction or
foreclosure proceedings. Such a withdrawal must first be taken as a
loan as noted below.
Any additional funds required will be distributed as a hardship
withdrawal subject to income tax and penalties. Such loan and
withdrawal shall not exceed the amount required to meet the immediate
financial need created by the hardship and shall not be reasonably
available from other sources of the participant.
Loan Provisions
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their account balance
and may have only one loan outstanding at any point of time. All such
loans bear interest at prevailing market rates. Loans must be repaid
within five years in approximately equal installments or up to 15 years
if used for the purchase of a primary residence. Loans are secured by
the balance in participant accounts.
NOTE 3 INVESTMENTS
The number of participants in the investment programs at December 31,
2000 and 1999 was as follows:
The Johnson & Johnson Common Stock Fund program consists of shares of
Johnson & Johnson Common Stock. The Vanguard Money Market Reserves -
Prime Portfolio invests in short-term, high-quality money market
instruments issued by financial institutions, non-financial
corporations, the U.S. government and federal agencies. The Vanguard
Bond Index Fund - Total Bond Market Portfolio invests in U.S. Treasury,
federal agency, mortgage backed and corporate securities and attempts
to match the
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
performance of the Lehman Brothers Aggregate Bond Index, a widely
recognized measure of the entire taxable U.S. bond market. The Vanguard
Index Trust - 500 Portfolio invests in all of the 500 stocks that make
up the Standard & Poor's 500 Composite Stock Price Index, a widely
recognized benchmark of U.S. stock market performance. The Vanguard
U.S. Growth Portfolio invests in large, high-quality, seasoned U.S.
companies. The Vanguard/Windsor II Fund invests in a diversified group
of out-of-favor stocks of large-capitalization companies. The Templeton
Foreign Fund invests primarily in stocks of companies located outside
the United States. The Fidelity Contrafund invests in undervalued
stocks of foreign and U.S. companies with the goal of achieving
long-term capital appreciation.
Custody of the Plan's investments is maintained by the Trustee. Plan
investments at fair value at December 31, 2000 and 1999 were as
follows:
* Represents 5% or more of net assets available for Plan benefits
During 2000 and 1999, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the year)
appreciated (depreciated) in value as follows:
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 4 TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated April 26, 1995, that the Plan is designed in accordance
with applicable sections of the Internal Revenue Code ("IRC"). The Plan
has been amended since receiving the determination letter. However, the
Plan administrator believes that the Plan is designed and is currently
operated in compliance with applicable requirements of the IRC.
NOTE 5 PLAN TERMINATION
Although it has not expressed an 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.
NOTE 6 SUBSEQUENT EVENT
Subsequent to December 31, 2000, the Plan has been amended. Effective
December 31, 2000, all participants in the Plan who are employed by
Centocor on December 31, 2000 are to become fully vested. All
participant contributions have been suspended. Initiation of new loans
has been suspended. The requirement that a participant must take all
available loans under the plan before receiving his or her participant
directed contributions in the form of a hardship withdrawal has been
eliminated.
All Centocor employees employed on December 31, 2000 will be eligible
to participate in the Johnson & Johnson Savings Plan beginning January
1, 2001.
Effective December 31, 2000, Centocor delegates all of its powers and
duties as the Administrator of the Plan to Johnson & Johnson.
In September 2001, Centocor intends to transfer all assets in the
Centocor Qualified Savings and Retirement Plan to the Johnson & Johnson
Savings Plan.
On April 26, 2001, Johnson & Johnson announced a two-for-one stock
split to holders of record on May 22, 2001 and effective June 12, 2001.
The stock split does not impact the value of any of the Plan's
investment funds.
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 2000
* - party-in-interest
12
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in Registration Statements
on Forms S-8 (No. 333-86611) of Johnson & Johnson, Inc. of our report dated
May 25, 2001, relating to the financial statements and supplemental schedule of
the Centocor Qualified Savings and Retirement Plan, which appears in this Form
11-K.
PricewaterhouseCoopers LLP
Philadelphia, PA
June 27, 2001