10-K/A 1 AMENDMENT #2 TO ANNUAL REPORT -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------ FORM 10-K/A #2 AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: SEPTEMBER 30, 1994 Commission File Number: 1-8147 ------------------------------------ MEDIQ INCORPORATED (Exact name of registrant as specified in its charter) ------------------------------------ DELAWARE 51-0219413 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE MEDIQ PLAZA, PENNSAUKEN, NEW JERSEY 08110 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 665-9300 PORTIONS AMENDED The Registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the year ended September 30, 1994 as set forth in the pages attached hereto. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K Index to Exhibits Exhibit 24.1 -- Consents of experts and counsel Exhibit 99 -- MEDIQ Incorporated Employees' Savings Plan -- Annual Report for fiscal year ended September 30, 1994 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SIGNATURES The Registrant. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment to be signed on its behalf by the undersigned, hereunto duly authorized. MEDIQ Incorporated (Registrant) March 24, 1995 By: /S/__MICHAEL F. SANDLER___________ Michael F. Sandler, Senior Vice President -- Finance and Chief Financial Officer The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused the annual report included in this filing to be signed on their behalf by the undersigned, hereunto duly authorized. MEDIQ Incorporated Employees' Savings Plan (Plan) Dated: March 24, 1995 By: /S/__MICHAEL F. SANDLER___________ Michael F. Sandler, Senior Vice President -- Finance and Chief Financial Officer, MEDIQ Incorporated Administrator of the Plan EX-24.1 2 CONSENTS OF EXPERTS AND COUNSEL EXHIBIT 24.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Amendment No. 1 to Registration Statement No. 33-16802 of MEDIQ Incorporated on Form S-8 of our report dated March 17, 1995, appearing in Form 10-K/A #2 of MEDIQ Incorporated for the year ended September 30, 1994. DELOITTE & TOUCHE L.L.P. Philadelphia, Pennsylvania March 24, 1995 EX-99 3 ADDITIONAL EXHIBITS Exhibit 99 Annual Report for Fiscal Year Ended September 30, 1994 MEDIQ Incorporated Employees' Savings Plan (Full Title of the Plan) One MEDIQ Plaza, Pennsauken, New Jersey 08110 (Address of the Plan) MEDIQ Incorporated, One MEDIQ Plaza, Pennsauken, New Jersey 08110 (Issuer and address of principal executive office) Independent Auditors' Report To the Trustees of MEDIQ Incorporated Employees' Savings Plan Pennsauken, New Jersey We have audited the accompanying statements of net assets available for Plan benefits of the MEDIQ Incorporated Employees' Savings Plan as of September 30, 1994 and 1993, and the related statements of changes in net assets available for Plan benefits for each of the three years in the period ended September 30, 1994. These financial statements are the responsibility of the Plan's administrators. 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, such financial statements present fairly, in all material respects, the net assets available for Plan benefits of the MEDIQ Incorporated Employees' Savings Plan as of September 30, 1994 and 1993, and the related statements of changes in net assets available for Plan benefits for each of the three years in the period ended September 30, 1994 in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information by fund is presented for the purpose of additional analysis of the basic financial statements rather than to present information regarding the net assets available for benefits and changes in net assets available for benefits of the individual funds, and is not a required part of the basic financial statements. This supplemental information is the responsibility of the Plan's administrators. This supplemental information by fund has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. DELOITTE & TOUCHE L.L.P. Philadelphia, Pennsylvania March 17, 1995 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS SEPTEMBER 30, 1994
SUPPLEMENTAL INFORMATION ---------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK FUND FUND FUND FUND FUND LOAN FUND TOTAL --------- --------- --------- --------- --------- --------- ---------- ASSETS: CASH..................................... $ $ $ $ $ 49,835 $ $ 49,835 INVESTMENTS -- AT MARKET PRICE........... 1,905,722 4,245,807 1,686,530 472,868 3,297,883 11,608,810 EMPLOYEE CONTRIBUTIONS RECEIVABLE........ 8,736 53,031 29,065 8,553 4,371 103,756 EMPLOYER CONTRIBUTIONS RECEIVABLE........ 11,648 11,648 LOANS RECEIVABLE......................... 388,614 388,614 RECEIVABLE (PAYABLE) FROM OTHER FUNDS.... 61,236 (5,641) (136) (4,163) (51,296) -0- --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS... $1,975,694 $4,293,197 $1,715,459 $ 477,258 $3,312,441 $ 388,614 $12,162,663 --------- --------- --------- --------- --------- --------- ---------- --------- --------- --------- --------- --------- --------- ----------
SEE NOTES TO FINANCIAL STATEMENTS MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS SEPTEMBER 30, 1993
SUPPLEMENTAL INFORMATION ---------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK FUND FUND FUND FUND FUND LOAN FUND TOTAL --------- --------- --------- --------- --------- --------- ---------- ASSETS: CASH....................................... $ $ $ $ $ 26,627 $ $ 26,627 INVESTMENTS -- AT MARKET PRICE............. 2,264,053 4,017,705 1,571,903 581,767 3,749,501 12,184,929 EMPLOYEE CONTRIBUTIONS RECEIVABLE.......... 24,353 878 409 8,074 7,734 41,448 EMPLOYER CONTRIBUTIONS RECEIVABLE.......... 6,241 6,241 LOANS RECEIVABLE........................... 395,439 395,439 RECEIVABLE (PAYABLE) FROM OTHER FUNDS...... 4,857 8 4,654 (1,488) (8,031) -0- --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS..... $2,293,263 $4,018,591 $1,576,966 $ 588,353 $3,782,072 $ 395,439 $12,654,684 --------- --------- --------- --------- --------- --------- ---------- --------- --------- --------- --------- --------- --------- ----------
SEE NOTES TO FINANCIAL STATEMENTS MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS YEAR ENDED SEPTEMBER 30, 1994
SUPPLEMENTAL INFORMATION ---------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK FUND FUND FUND FUND FUND LOAN FUND TOTAL --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, OCTOBER 1, 1993........................ $2,293,263 $4,018,591 $1,576,966 $ 588,353 $3,782,072 $ 395,439 $12,654,684 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS............... 337,387 702,521 418,803 146,412 164,558 1,769,681 EMPLOYEE ROLLOVER PAYMENTS........... 15,206 11,609 6,165 1,268 5,090 39,338 EMPLOYER CONTRIBUTIONS............... 425,222 425,222 EMPLOYEE LOAN PAYMENTS............... 79,928 82,592 49,248 15,099 25,938 252,805 INVESTMENT INCOME...................... 74,631 38,069 91,793 204,493 NET REALIZED/UNREALIZED GAINS (LOSSES)............................. 157,221 47,071 (43,661) (520,007) (359,376) INVESTMENT ELECTION TRANSFERS.......... 292,425 38,478 347,300 678,203 --------- --------- --------- --------- --------- --------- ---------- TOTAL ADDITIONS.......................... 507,152 1,246,368 559,765 157,187 192,594 347,300 3,010,366 DEDUCTIONS: BENEFIT PAYMENTS....................... 187,892 186,620 97,527 39,735 234,953 66,064 812,791 EMPLOYEE LOANS......................... 222,292 222,292 TRANSFER TO MHM PLAN................... 326,199 657,392 284,195 83,759 371,787 44,653 1,767,985 TRANSFER TO MMI PLAN................... 21,116 21,116 INVESTMENT ELECTION TRANSFERS.......... 310,630 127,750 39,550 144,788 55,485 678,203 --------- --------- --------- --------- --------- --------- ---------- TOTAL DEDUCTIONS......................... 824,721 971,762 421,272 268,282 662,225 354,125 3,502,387 --------- --------- --------- --------- --------- --------- ---------- NET ADDITIONS (DEDUCTIONS)............... (317,569) 274,606 138,493 (111,095) (469,631) (6,825) (492,021) --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, SEPTEMBER 30, 1994..................... $1,975,694 $4,293,197 $1,715,459 $ 477,258 $3,312,441 $388,614 $12,162,663 --------- --------- --------- --------- --------- --------- ---------- --------- --------- --------- --------- --------- --------- ----------
SEE NOTES TO FINANCIAL STATEMENTS MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS YEAR ENDED SEPTEMBER 30, 1993
SUPPLEMENTAL INFORMATION ---------------------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK LOAN FUND FUND FUND FUND FUND FUND TOTAL --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, OCTOBER 1, 1992.......................... $2,778,215 $2,801,363 $1,082,189 $ 314,208 $3,282,009 $306,492 $10,564,476 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS................. 511,910 651,381 388,078 174,603 198,085 1,924,057 EMPLOYEE ROLLOVER PAYMENTS............. 1,949 6,909 6,336 6,155 2,198 23,547 EMPLOYER CONTRIBUTIONS................. 446,346 446,346 EMPLOYEE LOAN PAYMENTS................. 76,684 59,107 28,972 9,144 16,299 190,206 INVESTMENT INCOME........................ 77,595 26,726 63,950 168,271 MHM STOCK DISTRIBUTION................... 458,201 458,201 NET REALIZED/UNREALIZED GAINS (LOSSES)... 829,780 172,413 (4,078) (42,223) 955,892 INVESTMENT ELECTION TRANSFERS............ 169,301 121,753 155,301 17,007 305,300 768,662 --------- --------- --------- --------- --------- --------- ---------- TOTAL ADDITIONS............................ 668,138 1,716,478 717,552 367,851 1,159,863 305,300 4,935,182 DEDUCTIONS: BENEFIT PAYMENTS......................... 529,996 466,300 179,675 78,722 605,266 57,452 1,917,411 EMPLOYEE LOANS........................... 158,901 158,901 INVESTMENT ELECTION TRANSFERS............ 623,094 32,950 43,100 14,984 54,534 768,662 --------- --------- --------- --------- --------- --------- ---------- TOTAL DEDUCTIONS........................... 1,153,090 499,250 222,775 93,706 659,800 216,353 2,844,974 --------- --------- --------- --------- --------- --------- ---------- NET ADDITIONS (DEDUCTIONS)................. (484,952) 1,217,228 494,777 274,145 500,063 88,947 2,090,208 --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, SEPTEMBER 30, 1993....................... $2,293,263 $4,018,591 $1,576,966 $ 588,353 $3,782,072 $395,439 $12,654,684 --------- --------- --------- --------- --------- --------- ---------- --------- --------- --------- --------- --------- --------- ----------
SEE NOTES TO FINANCIAL STATEMENTS MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS YEAR ENDED SEPTEMBER 30, 1992
SUPPLEMENTAL INFORMATION ---------------------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK LOAN FUND FUND FUND FUND FUND FUND TOTAL --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, OCTOBER 1, 1991.......................... $3,101,700 $2,209,368 $ 522,942 $ 162,464 $2,481,671 $240,717 $8,718,862 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS................. 707,523 482,776 322,556 133,788 146,750 1,793,393 EMPLOYEE ROLLOVER PAYMENTS............. 15,215 57,481 38,598 14,863 6,438 132,595 EMPLOYER CONTRIBUTIONS................. 435,502 435,502 EMPLOYEE LOAN PAYMENTS................. 74,295 38,541 14,090 5,099 10,350 142,375 INVESTMENT INCOME...................... 121,261 18,068 38,165 177,494 NET REALIZED/UNREALIZED GAINS (LOSSES)... 211,381 86,413 8,167 553,672 859,633 INVESTMENT ELECTION TRANSFERS............ 11,422 208,604 211,787 23,330 82,161 199,975 737,279 --------- --------- --------- --------- --------- --------- ---------- TOTAL ADDITIONS............................ 929,716 998,783 673,444 203,315 1,273,038 199,975 4,278,271 DEDUCTIONS: BENEFIT PAYMENTS......................... 613,004 263,820 72,932 41,465 404,110 15,771 1,411,102 EMPLOYEE LOANS........................... 113,386 113,386 TRANSFER TO NUTRAMAX PLAN................ 82,601 23,094 7,365 52,787 5,043 170,890 INVESTMENT ELECTION TRANSFERS............ 557,596 119,874 33,900 10,106 15,803 737,279 --------- --------- --------- --------- --------- --------- ---------- TOTAL DEDUCTIONS........................... 1,253,201 406,788 114,197 51,571 472,700 134,200 2,432,657 --------- --------- --------- --------- --------- --------- ---------- NET ADDITIONS (DEDUCTIONS)................. (323,485) 591,995 559,247 151,744 800,338 65,775 1,845,614 --------- --------- --------- --------- --------- --------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, SEPTEMBER 30, 1992....................... $2,778,215 $2,801,363 $1,082,189 $ 314,208 $3,282,009 $306,492 $10,564,476 --------- --------- --------- --------- --------- --------- ---------- --------- --------- --------- --------- --------- --------- ----------
SEE NOTES TO FINANCIAL STATEMENTS MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30, 1994, 1993 AND 1992 A. SIGNIFICANT ACCOUNTING POLICIES The financial statements of the MEDIQ Incorporated Employees' Savings Plan (the 'Plan') are presented on the accrual basis of accounting. Investments are stated at their September 30 market value. Market values for investments are determined by closing prices as of the last trading day of the Plan year. Dividends and interest are recorded when earned. Employee and employer contributions are recorded in the period to which they are applicable. Benefit payments are recorded when paid. Brokerage commissions and other expenses incurred in connection with the purchase or sale of securities, are charged directly to the Plan. All other costs and expenses of the Plan are paid for by MEDIQ Incorporated (the 'Company'). Should the Company elect not to pay administrative expenses, such expenses will be paid by the Plan. Certain reclassifications have been made to conform prior year's balances to the current year presentation. B. PLAN DESCRIPTION The following is not intended to be a complete description of the Plan. Plan participants should refer to the Plan documents for a complete description of the Plan. The original effective date of the Plan was October 1, 1983. The Plan was amended in its entirety effective as of October 1, 1989. Employees are eligible to join the Plan upon completion of twelve months employment during which they have worked a minimum of 1,000 hours and are age 21 or older. Participants may contribute to the Plan from 1% to 15% of their salaries to be invested, as they choose, in the various funds described in Note C. If the participant's compensation exceeds $64,245, the contribution is limited to 6%. The Plan provides that the Company will make a matching contribution equal to $.50 for each $1.00 contributed by a participant, subject to certain limitations. The Company's matching contribution is made in cash to be used to purchase shares of the common stock of the Company for the account of the participants. A participant's accrued benefit is at all times fully vested and nonforfeitable upon death, retirement, disability or termination of employment. Distributions from the funds, with the exception of the stock fund, are made in cash. Distributions from the stock fund are in the form of the securities held; however, distributions of the Company's common stock shall be made in cash whenever the number of shares to be distributed is 100 or less. C. INVESTMENT OPTIONS Contributions are invested in accordance with the written directions of the participant in one or more of the following funds: 1. Savings Fund: The fund seeks maximum current income, preservation of capital, and liquidity by investing in a portfolio of money market investments that mature in one year or less. C. INVESTMENT OPTIONS (CONTINUED) 2. Equity Fund: The fund seeks long-term growth of capital and income by investing in a portfolio of common stocks. As a secondary objective, the fund also seeks a reasonable level of current income. 3. Balanced Fund: The fund objectives are to conserve capital, produce reasonable current income and generate capital growth. The fund maintains 60% to 70% of its assets in stocks and 30% to 40% in fixed income securities. 4. Fixed Income Fund: The objective of the fund is to achieve a high level of current income. The fund invests in mortgage-backed certificates issued by the Government National Mortgage Association (GNMA). 5. Stock Fund: The assets of the stock fund, including earnings thereon, are invested in the Company's common stock. A brokerage firm purchases the Company's stock at prevailing market rates in the open market and, in the normal course of business, sells such stock to meet distribution requirements of the Plan. Also included in the stock fund is Mental Health Management, Inc. (MHM) common stock, which originated from a distribution by the Company. No participant has the option of acquiring additional MHM common stock. Pursuant to the Plan, with the exception of the Company's matching contributions, the selection of investment options is the sole responsibility of each participant. Neither the trustees nor the Company have any responsibility to select investment options or to advise participants in selecting their investment options. Subject to applicable provisions of law, each participant assumes all risks connected with any decrease in the market value of any securities in these funds, and distributions from such funds are the sole source of Payments made under the Plan. D. INVESTMENTS The investments of the Plan consist of the following:
SEPTEMBER 30, -------------------------------------------------------------- 1994 1993 ------------------------------ ------------------------------ MARKET MARKET COST VALUE COST VALUE -------------- -------------- -------------- -------------- Savings Fund................................... $ 1,905,722 $ 1,905,722 $ 2,264,053 $ 2,264,053 Equity Fund.................................... 3,268,197 4,245,807 2,969,761 4,017,705 Balanced Fund.................................. 1,436,387 1,686,530 1,301,629 1,571,903 Fixed Income Fund.............................. 500,553 472,868 574,936 581,767 Stock Fund: Common Stock -- MEDIQ........................ 3,278,215 3,119,624 3,113,278 3,417,177 Common Stock -- MHM.......................... - 0 - 178,259 -0 - 332,324 -------------- -------------- -------------- -------------- $ 10,389,074 $ 11,608,810 $ 10,223,657 $ 12,184,929 -------------- -------------- -------------- --------------
The Equity Fund's investment is comprised of 300,269 shares of Vanguard's Windsor Fund, with a market value of $14.14 per share at September 30, 1994 and 270,007 shares at $14.88 per share at September 30, 1993. D. INVESTMENTS (CONTINUED) The Balanced Fund's investment is comprised of 84,453 shares of Vanguard's Wellington Fund, with a market value of $19.97 per share at September 30, 1994 and 75,974 shares at $20.69 per share at September 30, 1993. The Fixed Income Fund's investment is comprised of 48,799 shares of Vanguard's Fixed Income Securities -- GNMA portfolio, with a market value of $9.69 per share at September 30, 1994 and 55,725 shares at $10.44 per share at September 30, 1993. The Stock Fund's investment is comprised of 779,906 shares of the Company's common stock and 62,003 shares of MHM common stock, with a market value of $4.00 and $2.875 per share, respectively, at September 30, 1994 and 738,849 shares of the Company's common stock and 78,194 shares of MHM common stock, with a market value of $4.625 and $4.25 per share, respectively, at September 30, 1993. Investment income is accrued as earned. The net appreciation or depreciation in market value of investments represents the change in the market value during the periods as a result of reinvested dividends or appreciation or depreciation in the underlying securities in the various funds except to the extent of gains or losses realized on investments sold during the year. E. LOANS A participant may be granted a loan at the discretion of the Plan Administrator in accordance with current IRS regulations. Loans shall be repaid in equal installments of principal and interest over a period and at rates designated by the Plan. F. WITHDRAWALS Participants are limited to two withdrawals per Plan year with respect to amounts attributable to basic contributions. In order to obtain a hardship withdrawal, a participant must exhaust the possibility of all other withdrawals (other than hardship withdrawals) under the Plan. Upon receiving a hardship distribution, a participant is suspended from making contributions to the Plan for one year. G. PLAN PARTICIPANTS As of September 30, 1994 and 1993, respectively, 763 and 934 employees of the Company were members of the Plan and participated in each fund as follows:
SEPTEMBER 30, -------------------- 1994 1993 --------- --------- Savings Fund.......................................................... 412 539 Equity Fund........................................................... 545 604 Balanced Fund......................................................... 444 490 Fixed Income Fund..................................................... 227 276 Stock Fund............................................................ 756 933
Plan participants may invest in one or more funds. As a result, the sum of the number of participants in each fund is not equal to the employee totals in 1994 and 1993. H. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:
SEPTEMBER 30, 1994 ------------------ Net assets available for benefits per the financial statements.............. $ 12,162,663 Amounts allocated to withdrawing participants............................... (804,069) ------------------ Net assets available for benefits per the Form 5500......................... $ 11,358,594 ------------------ ------------------
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 500:
YEAR ENDED SEPTEMBER 30, 1994 ------------------ Benefits paid to participants per the financial statements.................. $ 812,791 Amounts allocated to withdrawing participants at September 30, 1994......... 804,069 ------------------ Benefits paid to participants per the Form 5500............................. $ 1,616,860 ------------------ ------------------
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment as of September 30, but not yet paid as of that date. I. ADMINISTRATION OF THE PLAN The Plan is administered by Michael F. Sandler, the Plan Administrator, who has fiduciary responsibility for the general operations of the Plan and may interpret provisions of the Plan. The Plan Administrator does not have any responsibilities with respect to the investment of Plan assets. The Plan's trustees are appointed by the Board of Directors of the Company for indefinite terms and may resign or be removed at any time. The Company indemnifies such trustees to the extent determined by its Board of Directors. As of October 1, 1993, the trustees were Michael F. Sandler, Senior Vice President -- Finance, Chief Financial Officer and Treasurer, Donald M. Gleklen, Senior Vice President -- Corporate Development, and Eugene M. Schloss, Jr., Secretary, of the Company. In March 1994, the Company appointed Thomas Carroll, Executive Vice President and Chief Operating Officer of MEDIQ/PRN Life Support Services, Inc. (a subsidiary of the Company), and Mark Lawlor, Controller and Assistant Treasurer of the Company, as trustees to replace Mr. Gleklen and Mr. Schloss. Under the provisions of the Employee Retirement Income Security Act of 1974 ('ERISA'), each of the above individuals is a 'party-in-interest' and serves without compensation. Although the Company expects to continue the Plan, the right to amend or terminate the Plan is reserved. In the event of Plan termination, the net assets of the Plan would be allocated as required by ERISA, as amended. J. FEDERAL TAX CONSIDERATIONS The Plan Administrator received a determination letter dated May 15, 1985 from the Internal Revenue Service ('IRS') that the Plan met the requirements of Sections 401(a), 401(k) and 401(m) of the Internal Revenue Code (the 'Code'). Effective October 1, 1989, the Plan was amended in its entirety to conform with legislative changes. The Plan is seeking a new determination letter from the IRS. The Plan Administrator believes that the Plan is in compliance with the applicable requirements of the Code, and that the Plan's related trust is exempt from federal income tax under the provisions of Section 501(a) of the Code. As a result, matching contributions and salary reduction contributions, as well as earnings on all Plan assets, are generally not subject to federal income tax until distributed from the Plan. The Plan Administrator must refund excess aggregate contributions and excess contributions to certain highly compensated employees for the plan year ended September 30, 1994 to meet the nondiscrimination requirements of Section 401(k) and 401(m) of the Code. The Plan Administrator intends to make the required distributions prior to September 30, 1995. By making such distributions, the Plan will be in compliance with applicable IRS rules for the year ending September 30, 1994. In addition, the Plan Administrator made the necessary refunds for the year ended September 30. 1993. K. MENTAL HEALTH MANAGEMENT STOCK DISTRIBUTION In August 1993, the Company distributed the stock of Mental Health Management, Inc. ('MHM'), formerly a wholly-owned subsidiary of the Company, to the Company's shareholders. Shareholders received one share of MHM stock for eight shares of the Company's common and preferred stock. The Plan received 93,990 shares of MHM stock with a fair market value of $4.875 per share on the date of the distribution. L. OTHER In September 1993, MHM established its own Employee's Savings Plan. This resulted in the distribution of $1,355,785 in cash and 70,665 shares of MEDIQ common stock with a market value of $4.375 per share, and 8,650 shares of MHM common stock with a market value of $6.375 per share to 130 employees of MHM in March 1994. In October 1992, the Company entered into an agreement to sell certain assets of Harrisburg Healthcare, Inc., formerly a wholly-owned subsidiary of the Company. This resulted in the distribution from the Plan of $202,521 in cash and 16,660 shares of MEDIQ Common Stock with a market value of $5.625 per share, to 55 employees in March 1993. M. SCHEDULE OF REPORTABLE TRANSACTIONS
NUMBER OF SELLING COST OF NET GAIN SHARES/UNITS DESCRIPTION PRICE ASSET (LOSS) ----------- -------------------------------------------------------------- ----------- ----------- --------- PURCHASES 92,085 Vanguard Windsor Fund $ 951,362 163,230 MEDIQ Incorporated Common Stock $ 681,009 SALES 832,704 Vanguard Money Market Fund $ 832,704 $ 832,704 61,823 Vanguard Windsor Fund $ 880,561 $ 861,338 $ 19,173
Under the provisions of ERISA, transactions, or an aggregate of transactions, involving the same security which exceed 5% ($632,732) of the current value of net assets at the beginning of the plan year must be disclosed as reportable transactions.