SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 000-14879
A. Full title of the plan and the address of the
plan, if different from that of the issuer named
below:
CYTOGEN RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal
executive office:
CYTOGEN CORPORATION
650 COLLEGE ROAD EAST CN-5308
SUITE 3100
PRINCETON, NJ 08540-5308
(609)750-8200
CYTOGEN RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENT AND SCHEDULE
DECEMBER 31, 2002
Page No.
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Required Information...................................................... 2
Independent Auditors' Report.............................................. 3
Financial Statements:
Statements of Net Assets Available for Plan Benefits
As of December 31, 2002 and 2001...................................... 4
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 2002.................................. 5
Notes to Financial Statements............................................. 6
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year)
As of December 31, 2002............................................. 11
Signature ................................................................ 12
Exhibit 23 - Independant Auditors' Consent................................ 13
Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002..... 14
Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002..... 15
REQUIRED INFORMATION
1. Financial Statements and Schedule of the Cytogen Retirement Savings Plan
prepared in accordance with the financial reporting requirements of the
Employee Retirement Income Security Act of 1974, as amended.
Exhibit 23. Consent of KPMG, LLP.
Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
2
Independent Auditors' Report
To the Plan Administrator of
Cytogen Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of Cytogen Retirement Savings Plan (the Plan) as of December 31, 2002
and 2001, and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 2002. 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 auditing standards generally accepted
in the United States of America. 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 as
of December 31, 2002 and 2001, and the changes in net assets available for plan
benefits of the Plan for the year ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements, but is 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. This supplemental schedule
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.
/s/ KPMG LLP
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Princeton, New Jersey
June 23, 2003
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CYTOGEN RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2002 and 2001
2002 2001
------------ ------------
Assets:
Investments $ 3,699,908 $ 5,266,813
Participant contributions receivable 13,044 16,990
Employer contributions receivable 18,612 47,510
Interest receivable 61 -
Participant loans 34,066 -
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Net assets available for plan benefits $ 3,765,691 $ 5,331,313
============ ============
See accompanying notes to financial statements.
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CYTOGEN RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year Ended December 31, 2002
Net assets available for plan benefits, beginning of year $ 5,331,313
Additions:
Investment income:
Dividend income from investments 89,599
Interest income from loans 586
Other income 118
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90,303
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Contributions:
Participants 366,478
Employer 97,768
Rollovers 705
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464,951
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Total additions 555,254
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Deductions:
Net depreciation in fair value of investments 1,017,153
Benefits paid to participants 1,099,850
Plan expenses 3,873
-----------
Total deductions 2,120,876
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Net decrease (1,565,622)
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Net assets available for plan benefits, end of year $ 3,765,691
===========
See accompanying notes to financial statements.
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CYTOGEN RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) Description of the Plan
(a) Organization
The Cytogen Retirement Savings Plan (the Plan) is a defined
contribution plan for the employees of Cytogen Corporation (the
Employer or the Company) that was established on December 15,
1986. The Plan is governed by the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA), as amended, and is
intended to comply with Sections 401(a) and 401(k) of the Internal
Revenue Code.
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.
(b) Eligibility
Each employee becomes eligible to participate in the Plan as of
the date when the employee attains the age of 21 years and has
completed six months of service.
(c) Administration
The Employer designates a person or persons to serve as
administrator under the Plan, who performs all such duties as are
necessary to operate, administer, and manage the Plan. The
expenses necessary to administer the Plan are generally borne by
the Employer, including necessary professional assistance.
(d) Contributions
Beginning January 1, 2002, each active participant may enter into
a written salary deferral agreement with the Employer in which the
employee may elect to defer an amount of up to 75% of his or her
compensation, subject to the maximum contribution level set by the
Internal Revenue Code. If the participant is age 50 or older
during the calendar year and makes the maximum allowable pre-tax
contribution to the Plan, the participant is entitled to make an
additional "catch-up contribution" up to the maximum allowable
pre-tax contribution. The Employer, at its discretion, may make a
matching contribution in an amount up to 50% of the employee
contribution, not to exceed limitations set forth by the Plan. The
Employer may also make an annual Employer discretionary
contribution under the Plan in an amount that the Employer's Board
of Directors shall determine by resolution. The allocation of this
discretionary contribution shall be made in the proportion that
the compensation paid to each participant during the Plan year
bears to the compensation paid to all such participants, subject
to limitations set forth by the Plan. The Employer has the ability
to make discretionary or matching contribution in cash or Cytogen
common stock.
The Plan also permits the rollover of cash transferred from other
employee benefit plans which are qualified under the Internal
Revenue Code. Rollovers of cash are included as part of asset
additions in the statement of changes in net assets available for
plan benefits. For the year ended December 31, 2002, rollovers of
cash amounted to $705.
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CYTOGEN RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(e) Vesting and Forfeitures
A participant's interest in the Employer matching or discretionary
contribution vests over four years of service, at which time it
becomes 100% vested. Vesting credit shall be given for each year
of service, except plan years during which a participant did not
complete at least 1,000 hours of service. If a participant
terminates employment and is not 100% vested, the nonvested
portion of the participant's account shall be placed in a separate
account and will become a forfeiture upon the date such terminated
participant incurs a one-year break in service. These forfeitures
shall be used by the Employer to reduce the Employer's
contribution or to pay plan expenses. Forfeitures used during 2002
were $47,639.
(f) Distributions/Benefits
A participant who attains the normal retirement age shall have a
vesting percentage of 100%. If a participant retires from the
active service of the Employer on or after the normal retirement
date, then he or she is entitled to receive a distribution of the
entire value of his or her vested participant account, or may
elect to an annuity distribution as permited under the Plan. A
participant who retires from the service of the Employer on
account of disability shall have a vesting percentage of 100% and
is entitled to receive a distribution of the entire value of
their participant account.
(g) Participant Loans
All participants in the Plan may obtain, under certain
conditions, a loan secured by the participant's account balance.
The amount of all outstanding loans to a participant may not
exceed the lesser of 50% of the participant's vested account
balance or $50,000. The loans are made at a rate equivalent to
rates charged by a professional lender in similar circumstances.
Loans are repaid in no more than five years, except if the loan
is for the purchase of the participant's primary residence, in
which case the repayment period may exceed five years.
(h) Investment Options
Fund Objective
------------------------- ----------------------------------------------------
Oakmark International Invests primarily in common stocks of non-U.S.
Fund (II) companies.
Merrill Lynch Fundamental Invests primarily in a portfolio of common stocks of
Growth Fund, Inc. (D) U.S. companies with above-average rates of growth
earnings over the long-term.
Merrill Lynch Global Invests primarily in a portfolio of equity
SmallCap Fund, Inc. (D) securities of small-cap issuers in foreign countries
and the U.S.
Federated Capital Invests primarily in common stock of companies with
Appreciation Fund medium and large market capitalizations that offer
superior growth prospects or of companies whose
stock is undervalued.
Merrill Lynch Basic Invests in undervalued, income producing equity
Value Fund (D) securities.
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CYTOGEN RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
Fund Objective
------------------------- ----------------------------------------------------
Merrill Lynch Small Cap Invests in a diversified portfolio of securities,
Value Fund, Inc. (D) primarily common stock, of relatively small
companies believed to have special investment value
and emerging growth companies regardless of size.
Alger MidCap Growth Invests primarily in the equity securities of
Portfolio (A) companies having a market capitalization within the
range of companies in the S&P MidCap 400 Index.
PIMCO Total Return Invests primarily in a diversified portfolio of
Fund (A) fixed income instruments of varying maturities.
Merrill Lynch U.S. High Invests primarily in a diversified portfolio of
Yield Fund (D) fixed income securities, such as corporate bonds and
notes, convertible securities and preferred stock
that are rated in the lower rating categories of the
recognized rating agencies or unrated securities
that are of comparable quality.
Lord Abbett Mid Cap Invests primarily in commons stocks and other equity
Value Fund Class (P) securities of companies with good prospects for
improvement in earnings trends or asset values that
are not yet fully recognized in the investment
community.
Merrill Lynch U.S. Invests in mortgage backed certificates and other
Government Mortgage mortgage backed government securities.
Fund (D)
Seligman Communications & Invests primarily in the securities of companies
Information Fund (A) operating in the communications, information and
related industries.
Van Kampen Equity and Invests primarily in income-producing equity
Income Fund (A) securities and investment-grade debt securities.
Merrill Lynch Retirement Invests primarily in a broadly diversified
Preservation Trust portfolio of Guaranteed Investment Contracts as well
as in obligations go U.S. government and U.S.
government agency securities and money market
securities.
(i) Termination
As of a participant's termination of employment, he or she shall
be entitled to receive a distribution of his or her entire vested
interest. Such distribution shall be further subject to terms and
conditions set forth by the Plan.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). The accompanying
financial statements have been prepared on the accrual basis of
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CYTOGEN RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
accounting, except for distributions that are accounted for on a
cash basis in accordance with the AICPA Audit and Accounting Guide
entitled Audits of Employee Benefit Plans. Investments are stated
at market value.
(b) Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect
the financial statements and the related disclosures during the
reporting period. Actual results could differ from those
estimates.
(c) Valuation of Investments
Investments represent units in a series of funds managed by the
investment manager. The Plan's investment funds are stated at
market value, as determined based on market quotes of the
underlying assets.
(d) Plan Expenses
All administrative costs associated with the operation of the Plan
are generally paid by the Employer in accordance with the terms of
the Plan.
(e) Purchases and Sales of Securities
Purchases and sales of securities are recorded on a trade date
basis.
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CYTOGEN RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(3) Investments
The following table presents the current values of individual assets that
represent 5% or more of the Plan's net assets available for plan benefits
as of December 31, 2002 and 2001 as follows:
Description?Issuer of Investment 2002 2001
-------------------------------------------- ----------- -----------
Merrill Lynch Fundamentaal Growth Fund, Inc. $ 568,680 $ -
Federated Capital Appreciation Fund 594,925 -
Merrill Lynch U.S. Government Mortgage Fund 472,823 -
Merrill Lynch Retirement Preservation Trust 1,513,160 -
MFS Emerging Growth Fund - 433,869
Massachusetts Investor Trust - 324,116
Massachusetts Investor Growth Stock Fund - 1,096,579
MFS Research Fund - 384,914
MFS Capital Opportunities Fund - 577,702
MFS Government Securities Fund - 667,617
MFS Global Equity Fund - 349,929
MFS Fixed Fund - 877,372
(4) Tax Status
The trust established under the Plan is qualified under the Internal
Revenue Code as exempt from federal income taxes. The Plan has received a
favorable determination letter from the Internal Revenue Service but has
not been updated for the most recent plan amendment. However, the Plan
Administrator and the Plan's tax counsel believe that the plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, they believe that
the Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
(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 anytime and to
terminate the Plan, subject to the provisions of ERISA. In the event of
termination, distributions shall be subject to the terms and conditions
set forth by the Plan.
(6) Distributions/Benefits Paid to Participants
Distributions/benefits paid to participants are generally made on a
monthly basis for those requests processed in the previous month. There
were no distributions/benefits payable to the participants as of December
31, 2002.
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Schedule 1
CYTOGEN RETIREMENT SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
Market
Description of investment value
------------------------------------------------------------- --------------
Oakmark International Fund (II) $ 1,673
Merrill Lynch Fundamental Growth Fund, Inc. (D) 568,680
Merrill Lynch Global SmallCap Fund, Inc. (D) 170,322
Federated Capital Appreciation Fund 594,925
Merrill Lynch Basic Value Fund (D) 131,062
Merrill Lynch Small Cap Value Fund, Inc. (D) 825
Alger MidCap Growth Portfolio (A) 55,999
PIMCO Total Return Fund (A) 2,478
Merrill Lynch U.S. High Yield Fund (D) 9,955
Lord Abbett Mid Cap Value Fund Class (P) 824
Merrill Lynch U.S. Government Mortgage Fund (D) 472,823
Seligman Communications & Information Fund (A) 13,984
Van Kampen Equity and Income Fund (A) 126,698
Merrill Lynch Retirement Preservation Trust 1,513,160
* CYTOGEN Corporation Stock Fund 36,500
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Total Investments $ 3,699,908
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Participant Loans $ 34,066
=============
* Represents a party-in-interest.
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SIGNATURE
THE PLAN
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
CYTOGEN RETIREMENT SAVINGS PLAN
By: Cytogen Corporation, Plan Administrator
Date: June 26, 2003 By: /s/ Rita Auld
---------------------- ---------------------------------------
Rita Auld
Vice President, Human Resources and
Administration
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