-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UU9pHN1Bvjk4sgGIhnBtmCaI64uKHTzQTIJXEmnSTDGP8f6l6zWlsnAic9ThMF5p Wua1pXoWTRv9O7idZnyX1g== 0000950115-98-000540.txt : 19980330 0000950115-98-000540.hdr.sgml : 19980330 ACCESSION NUMBER: 0000950115-98-000540 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19980327 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDIQ INC CENTRAL INDEX KEY: 0000350920 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS EQUIPMENT RENTAL & LEASING [7350] IRS NUMBER: 510219413 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-08147 FILM NUMBER: 98576772 BUSINESS ADDRESS: STREET 1: ONE MEDIQ PLZ CITY: PENNSAUKEN STATE: NJ ZIP: 08110 BUSINESS PHONE: 6096656300 MAIL ADDRESS: STREET 1: ONE MEDIQ PLZ CITY: PENNSAUKEN STATE: NJ ZIP: 08110 10-K/A 1 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, 1997 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) 662-3200 -------------- 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, 1997 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, 1997 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, thereunto duly authorized. MEDIQ Incorporated ------------------ (Registrant) Date: March 27, 1998 By: /s/ Jay M. Kaplan -------------- --------------------------------------- Jay M. Kaplan 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) Date: March 27, 1998 By: /s/ Jay M. Kaplan --------------------------------------- Jay M. Kaplan Senior Vice President - Finance and Chief Financial Officer, MEDIQ Incorporated, Administrator of the Plan 2 EX-24.1 2 INDEPENDENT AUDITORS' CONSENT 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 on MEDIQ Incorporated Employees' Savings Plan dated March 20, 1998, appearing in Form 10-K/A #2 to the Annual Report on Form 10-K of MEDIQ Incorporated for the year ended September 30, 1997. Philadelphia, Pennsylvania March 27, 1998 Page 3 EX-99 3 ANNUAL REPORT FOR FISCAL YEAR Exhibit 99 Annual Report for Fiscal Year Ended September 30, 1997 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) Page 4 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, 1997 and 1996, 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, 1997. 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, 1997 and 1996, 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, 1997 in conformity with generally accepted accounting principles. The Schedule of Assets Held for Investment Purposes that accompanies the Plan's financial statements does not disclose true historical cost information for three of the Plan's fund options. The cost basis for these three funds were restated on January 1, 1997 based on market value at that date, when the respective funds were transferred to participants individual accounts. Disclosure of this historical cost information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of: (1) assets held for investment purposes as of September 30, 1997, and (2) reportable transactions for the year then ended, 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. The supplemental fund information is presented for the purpose of additional analysis of the basic financial statements rather than to present 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. The supplemental schedules and supplemental fund information are the responsibility of the Plan's administrators. The supplemental schedules and supplemental fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, except for the omission of the historical cost information discussed in the preceding paragraph, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Philadelphia, Pennsylvania March 20, 1998 Page 5 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS SEPTEMBER 30, 1997
SUPPLEMENTAL INFORMATION --------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME INDEX FUND FUND FUND FUND FUND ---------- ---------- ---------- -------- -------- ASSETS: CASH INVESTMENTS - AT FAIR VALUE $1,216,455 $6,733,471 $2,694,011 $323,345 $282,739 EMPLOYEE CONTRIBUTIONS RECEIVABLE 2,855 17,292 8,190 1,335 4,221 EMPLOYER CONTRIBUTIONS RECEIVABLE LOANS RECEIVABLE ---------- ---------- ---------- -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,219,310 $6,750,763 $2,702,201 $324,680 $286,960 ========== ========== ========== ======== ======== SUPPLEMENTAL INFORMATION --------------------------------------------------- INTERNA- TIONAL STOCK LOAN FUND FUND FUND TOTAL -------- ---------- -------- ----------- ASSETS: CASH $ 21,260 $ 21,260 INVESTMENTS - AT FAIR VALUE $84,885 4,516,299 15,851,205 EMPLOYEE CONTRIBUTIONS RECEIVABLE 1,522 2,699 38,114 EMPLOYER CONTRIBUTIONS RECEIVABLE 8,710 8,710 LOANS RECEIVABLE $290,461 290,461 ------- ---------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $86,407 $4,548,968 $290,461 $16,209,750 ======= ========== ======== ===========
SEE NOTES TO FINANCIAL STATEMENTS Page 6 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS SEPTEMBER 30, 1996
SUPPLEMENTAL INFORMATION ----------------------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK LOAN FUND FUND FUND FUND FUND FUND TOTAL ---------- ---------- ---------- -------- --------- -------- ----------- ASSETS: CASH $ 169 $ 169 INVESTMENTS - AT FAIR VALUE $1,313,068 $5,832,917 $2,337,730 $361,742 3,441,128 13,286,585 EMPLOYEE CONTRIBUTIONS RECEIVABLE 5,597 21,411 12,287 980 5,925 46,200 EMPLOYER CONTRIBUTIONS RECEIVABLE 19,063 19,063 LOANS RECEIVABLE $277,724 277,724 RECEIVABLE (PAYABLE) FROM OTHER FUNDS (139) 7 6,221 55 (6,144) 0 ---------- ---------- ---------- -------- ---------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFIT $1,318,526 $5,854,335 $2,356,238 $362,777 $3,460,141 $277,724 $13,629,741 ========== ========== ========== ======== ========== ======== ===========
SEE NOTES TO FINANCIAL STATEMENTS Page 7 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS YEAR ENDED SEPTEMBER 30, 1997
SUPPLEMENTAL INFORMATION --------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME INDEX FUND FUND FUND FUND FUND ---------- ---------- ---------- -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, OCTOBER 1, 1996 $1,318,526 $5,854,335 $2,356,238 $362,777 $ 0 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 108,673 583,571 306,569 46,895 55,597 EMPLOYEE ROLLOVER PAYMENTS 12,617 40,227 22,932 233 21,489 EMPLOYER CONTRIBUTIONS EMPLOYEE LOAN PAYMENTS 26,518 104,762 34,923 6,251 8,383 INVESTMENT INCOME 66,710 275 1,582 24,290 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 2,134,547 614,181 8,835 15,592 INVESTMENT ELECTION TRANSFERS 13,500 198,199 ---------- ---------- ---------- -------- -------- TOTAL ADDITIONS 228,018 2,863,382 980,187 86,504 299,260 DEDUCTIONS: BENEFIT PAYMENTS 274,698 1,668,331 447,057 68,910 845 EMPLOYEE LOANS INVESTMENT ELECTION TRANSFERS 52,536 298,623 187,167 55,691 11,455 ---------- ---------- ---------- -------- -------- TOTAL DEDUCTIONS 327,234 1,966,954 634,224 124,601 12,300 ---------- ---------- ---------- -------- -------- NET ADDITIONS (DEDUCTIONS) (99,216) 896,428 345,963 (38,097) 286,960 ---------- ---------- ---------- -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, SEPTEMBER 30, 1997 $1,219,310 $6,750,763 $2,702,201 $324,680 $286,960 ========== ========== ========== ======== ======== SUPPLEMENTAL INFORMATION --------------------------------------------------- INTERNA- TIONAL STOCK LOAN FUND FUND FUND TOTAL -------- ---------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, OCTOBER 1, 1996 $ 0 $3,460,141 $277,724 $13,629,741 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 21,801 91,592 1,214,698 EMPLOYEE ROLLOVER PAYMENTS 2,540 30,737 130,775 EMPLOYER CONTRIBUTIONS 277,660 277,660 EMPLOYEE LOAN PAYMENTS 1,369 20,272 202,478 INVESTMENT INCOME 53 92,910 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 898 1,438,239 4,212,292 INVESTMENT ELECTION TRANSFERS 61,178 93,465 277,759 644,101 -------- ---------- -------- ----------- TOTAL ADDITIONS 87,786 1,952,018 277,759 6,774,914 DEDUCTIONS: BENEFIT PAYMENTS 183 825,758 87,843 3,373,625 EMPLOYEE LOANS 177,179 177,179 INVESTMENT ELECTION TRANSFERS 1,196 37,433 644,101 -------- ---------- -------- ----------- TOTAL DEDUCTIONS 1,379 863,191 265,022 4,194,905 -------- ---------- -------- ----------- NET ADDITIONS (DEDUCTIONS) 86,407 1,088,827 12,737 2,580,009 -------- ---------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, SEPTEMBER 30, 1997 $86,407 $4,548,968 $290,461 $16,209,750 ======== ========== ======== ===========
SEE NOTES TO FINANCIAL STATEMENTS Page 8 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS YEAR ENDED SEPTEMBER 30, 1996
SUPPLEMENTAL INFORMATION ----------------------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK LOAN FUND FUND FUND FUND FUND FUND TOTAL ---------- ---------- ---------- -------- --------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, OCTOBER 1, 1995 $1,727,822 $5,157,887 $1,938,242 $466,916 $3,603,442 $300,348 $13,194,657 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 175,360 665,563 344,812 74,679 99,932 1,360,346 EMPLOYEE ROLLOVER PAYMENTS 32,859 157,619 87,336 2,402 280,216 EMPLOYER CONTRIBUTIONS 314,340 314,340 EMPLOYEE LOAN PAYMENTS 22,290 110,341 38,552 5,010 14,344 190,537 INVESTMENT INCOME 79,973 6,435 2,981 29,617 133 119,139 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 657,797 283,292 (6,001) 83,770 1,018,858 INVESTMENT ELECTION TRANSFERS 51,624 154,034 79,099 219,963 504,720 ---------- ---------- ---------- -------- ---------- -------- ----------- TOTAL ADDITIONS 310,482 1,649,379 911,007 105,707 591,618 219,963 3,788,156 DEDUCTIONS: BENEFIT PAYMENTS 443,226 861,181 436,598 132,707 732,053 80,808 2,686,573 EMPLOYEE LOANS 161,779 161,779 INVESTMENT ELECTION TRANSFERS 276,552 91,750 56,413 77,139 2,866 504,720 ---------- ---------- ---------- -------- ---------- -------- ----------- TOTAL DEDUCTIONS 719,778 952,931 493,011 209,846 734,919 242.587 3,353,072 ---------- ---------- ---------- -------- ---------- -------- ----------- NET ADDITIONS (DEDUCTIONS) (409,296) 696,448 417,996 (104,139) (143,301) (22,624) 435,084 ---------- ---------- ---------- -------- ---------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, SEPTEMBER 30, 1996 $1,318,526 $5,854,335 $2,356,238 $362,777 $3,460,141 $277,724 $13,629,741 ========== ========== ========== ======== ========== ======== ===========
SEE NOTES TO FINANCIAL STATEMENTS Page 9 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS YEAR ENDED SEPTEMBER 30, 1995
SUPPLEMENTAL INFORMATION ----------------------------------------------------------------------------- FIXED SAVINGS EQUITY BALANCED INCOME STOCK LOAN FUND FUND FUND FUND FUND FUND TOTAL ---------- ---------- ---------- -------- --------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, OCTOBER 1, 1994 $1,975,694 $4,293,197 $1,715,459 $477,258 $3,312,441 $388,614 $12,162,663 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 282,382 687,811 367,289 107,745 130,337 1,575,564 EMPLOYEE ROLLOVER PAYMENTS 28,389 104,427 32,031 9,526 8,773 183,146 EMPLOYER CONTRIBUTIONS 373,786 373,786 EMPLOYEE LOAN PAYMENTS 53,949 142,008 58,948 9,060 13,171 277,136 INVESTMENT INCOME 111,126 36,155 476 147,757 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 1,168,659 403,977 26,774 1,116,712 2,716,122 INVESTMENT ELECTION TRANSFERS 117,652 46,112 266,900 430,664 ---------- ---------- ---------- -------- ---------- -------- ----------- TOTAL ADDITIONS 475,846 2,220,557 862,245 189,260 1,689,367 266,900 5,704,175 DEDUCTIONS: BENEFIT PAYMENTS 315,750 672,817 299,910 101,571 1,175,188 85,499 2,650,735 EMPLOYEE LOANS 246,404 246,404 TRANSFER TO MEDIFAC PLAN 218,056 562,900 278,506 68,097 193,556 23,263 1,344,378 INVESTMENT ELECTION TRANSFERS 189,912 120,150 61,046 29,934 29,622 430,664 ---------- ---------- ---------- -------- ---------- -------- ----------- TOTAL DEDUCTIONS 723,718 1,355,867 639,462 199,602 1,398,366 355,166 4,672,181 ---------- ---------- ---------- -------- ---------- -------- ----------- NET ADDITIONS (DEDUCTIONS) (247,872) 864,690 222,783 (10,342) 291,001 (88,266) 1,031,994 ---------- ---------- ---------- -------- ---------- -------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, SEPTEMBER 30, 1995 $1,727,822 $5,157,887 $1,938,242 $466,916 $3,603,442 $300,348 $13,194,657 ========== ========== ========== ======== ========== ======== ===========
SEE NOTES TO FINANCIAL STATEMENTS Page 10 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995 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 fair value. Fair 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. The preparation of the Plan's financial statements in conformity with generally accepted accounting principles necessarily requires Plan management to make estimates and assumptions. These estimates and assumptions, which may differ from actual results, will affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Plan's financial statements, as well as the reported amounts of changes in net assets available for Plan benefits during the period. 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 January 1, 1997. The Company adopted the Vanguard Prototype 401(k) Savings Plan and appointed Vanguard Fiduciary Trust Company as trustee and recordkeeper of the Plan. 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 18% of their salaries to be invested, as they choose, in the various funds described in Note C. If the participant is deemed a highly compensated employee, the Plan limits the contribution 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 participant. 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 or cash. Page 11 C. Investment Options Participants 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 objective is to hold high-quality, short-term investments that preserve the amount of your original investment and provide current income. 2. Equity Fund: The fund objective is to hold a concentrated portfolio of large company equity securities. As a secondary objective, the fund also seeks to provide long-term growth and modest dividend income. 3. Balanced Fund: The fund objective is to hold a broad diversified portfolio of stocks and bonds to provide a combination of long-term growth and income. The fund maintains 60% to 70% of its assets in stocks and 30% to 40% in high-quality bonds. 4. Fixed Income Fund: The fund objective is to hold a mix of government and affiliated agency securities to provide income from interest. The fund invests in mortgage-backed certificates issued by the Government National Mortgage Association ("GNMA"). 5. Index Fund: The fund objective is to provide long-term growth of capital and income from dividends; the fund holds all of the 500 stocks that make up the Standard & Poor's 500 composite Stock Price Index in proportion to their weighting in the Index. The fund attempts to match the performance of the Index, a widely recognized benchmark of the U.S. Stock Market performance. 6. International Fund: The fund objective is to provide long-term growth of capital. The fund invests in stocks of high quality seasoned companies based outside the United States. The fund invests 60% to 70% of its assets in companies with sustainable competitive advantages and strong prospects for long-term growth. 7. 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 a small portion invested in short term reserves to help accommodate daily transactions. 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. Page 12 D. Investments The fair value of the investments of the Plan are as follows: September 30, ------------------------------ 1997 1996 ----------- ----------- Savings Fund $ 1,216,455 $ 1,313,068 Equity Fund 6,733,471 5,832,917 Balanced Fund 2,694,011 2,337,730 Fixed Income Fund 323,345 361,742 Index Fund 282,739 -0- International Fund 84,885 -0- Stock Fund: Common Stock -- MEDIQ 4,516,299 3,417,000 Common Stock -- MHM -0- 24,128 ----------- ----------- $15,851,205 $13,286,585 =========== =========== The Savings Fund's investment is comprised of 1,216,455 shares of Vanguard's Prime Portfolio Fund, with a fair value of $1.00 per share at September 30, 1997 and 1,313,068 shares at $1.00 per share at September 30, 1996. The Equity Fund's investment is comprised of 324,818 shares of Vanguard's Windsor Fund, with a fair value of $20.73 per share at September 30, 1997 and 358,287 shares at $16.28 per share at September 30, 1996. The Balanced Fund's investment is comprised of 87,810 shares of Vanguard's Wellington Fund, with a fair value of $30.68 per share at September 30, 1997 and 89,913 shares at $26.00 per share at September 30, 1996. The Fixed Income Fund's investment is comprised of 31,181 shares of Vanguard's - GNMA portfolio, with a fair value of $10.37 per share at September 30, 1997 and 35,887 shares at $10.08 per share at September 30, 1996. The Index Fund investment is comprised of 3,189 shares of Vanguard's Index Trust 500 portfolio, with a fair value of $88.65 per share at September 30, 1997. The International Fund investment is comprised of 4,487 shares of Vanguard's International Growth portfolio, with a fair value of $18.92 per share at September 30, 1997. The Stock Fund's investment is comprised of 535,265 shares of the Company's common stock, with a fair value of $8.4375 at September 30, 1997 and 581,617 shares of the Company's common stock and 32,171 shares of MHM common stock, with a fair value of $5.875 and $.75 per share, respectively, at September 30, 1996. Investment income is accrued as earned. The net appreciation or depreciation in fair value of investments represents the change in the fair 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. Page 13 E. Loans A participant may be granted a loan at the discretion of the Plan Administrator in accordance with the Plan document and 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 distributions (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, 1997 and 1996, respectively, 587 and 677 participants of the Plan participated in each fund as follows: September 30, ------------- 1997 1996 ---- ---- Savings Fund 219 321 Equity Fund 493 547 Balanced Fund 382 464 Fixed Income Fund 148 197 Index Fund 97 - International Fund 53 - Stock Fund 587 677 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 1997 and 1996. H. Benefits Payable The following amounts, $0 and $341,097 as of September 30, 1997 and September 30, 1996, respectively, have been allocated to the accounts of persons who have elected to withdraw from the plan but have not yet been paid. I. Administration of the Plan The Plan is administered by Jay M. Kaplan, 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 the current year and may resign or be removed at any time. The Company indemnifies such trustees to the extent determined by its Board of Directors. Effective January 1, 1997 the Board of Directors of the Company appointed Vanguard Fiduciary Trust Company as Trustee for the Plan. Page 14 I. Administration of the Plan (continued) 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 February 22, 1996 from the Internal Revenue Service ("IRS") that the Plan met the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"). The Plan has since been admended through the adoption of the Vanguard Fiduciary Trust Company Prototype Non-Standarized Safe Harbor Profit Sharing Plan with CODA. 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, 1997 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, 1998. By making such distributions, the Plan will be in compliance with applicable IRS rules for the year ending September 30, 1997. K. MHM Stock Sale On November 21, 1996, the Plan sold all of its shares of MHM. All proceeds were reinvested to the participants accounts that held MHM stock, according to their current investment allocation election. L. Divestitures - Special Distributions In November 1996, the Company sold substantially all of the assets of MEDIQ Mobile X-Ray Services, Inc. ("Mobile X-Ray"), a wholly-owned subsidiary of the Company. This resulted in a total distribution of $1,217,711 from the Plan to 96 employees during fiscal year 1997. In August 1995, the Company entered into an agreement to sell MEDIQ Imaging Services, Inc., a wholly-owned subsidiary of the Company. This resulted in a total distribution of $861,405 from the Plan consisting of $694,818 in cash and 38,048 shares of MEDIQ common stock with a market value of $4.25 per share, and 1,953 shares of MHM common stock with a market value of $2.50 per share to 75 employees in December 1995. In June 1995, the Company entered into an agreement to sell Medifac, Inc. ("Medifac"), a wholly-owned subsidiary of the Company. This resulted in a total distribution of $1,344,378 from the Plan consisting of $1,127,558 in cash, loan notes of $23,263 and 32,852 shares of MEDIQ common stock with a market value of $5.75 per share, and 1,774 shares of MHM common stock with a market value of $2.625 per share to 54 employees of Medifac in August 1995. Page 15 M. Change In Plan Year On September 30, 1997 the Board of Directors of MEDIQ Incorporated approved the change of the Plan Trust Year from fiscal year, September 30th, to calendar year, December 31st. This change is effective for the plan year ending December 31, 1997. N. Subsequent Event On January 15, 1998, the Company announced that, pursuant to the terms of a definitive agreement and plan of merger (the "Merger Agreement"), MQ Acquisition Corporation ("Acquirer"), a Delaware corporation formed by Bruckmann, Rosser, Sherrill & Co., L.P. ("BRS"), has agreed to enter into a transaction with the Company whereby Acquirer will be merged with and into the Company (the "Merger"), with the Company being the Surviving Corporation in the Merger (the "Surviving Corporation"). In the Merger, holders of the Company's outstanding Common Stock and Preferred Stock will be entitled to receive, in exchange for each outstanding share of Common Stock or Preferred Stock, $13.75 in cash, without interest, and 0.075 of a share of a newly created Series A 13% Cumulative Compounding Preferred Stock, par value $.01 per share (the "13% Senior Preferred Stock") of the Surviving Corporation. The 13% Senior Preferred Stock will have a liquidation preference of $10.00 per share. The aggregate consideration payable pursuant to the Merger, including amounts payable to holders of options, is expected to be approximately $390.7 million. At the effective date of the merger it is anticipated that the MEDIQ Common Stock Fund will be eliminated. The cash proceeds from the sale of shares in the MEDIQ Common Stock Fund will be reallocated to the existing fund options at the direction of the plan participants. Page 16 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES SEPTEMBER 30, 1997
- ------------------------------------------------------------------------------------------------- Current Fund Identity of Issue Shares Cost (1) Value - ---- ----------------- --------- ----------- ----------- Savings Vanguard Money Market Fund 1,216,455 $ 1,216,455 $ 1,216,455 Equity Vanguard Windsor Fund 324,818 5,458,618 6,733,471 Balanced Vanguard Wellington Fund 87,810 2,317,633 2,694,011 Fixed Income Vanguard GNMA Fund 31,181 318,661 323,345 Index Vanguard Index Trust - 500 Portfolio 3,189 269,760 282,739 Inter'l. Vanguard International Growth Fund 4,487 84,041 84,885 Stock MEDIQ Common Stock Fund 535,265 2,618,626 4,516,299 Loan Participant Loans (bearing interest at 7.4%-12.5%, maturity ranging from 1 year to 30 years) 0 290,461 ----------- ----------- TOTAL INVESTMENTS $12,283,794 $16,141,666 =========== ===========
(1) The cost basis for September 30, 1997 for the Equity Fund, Balanced Fund, and Fixed Income Fund were restated based on the market value of January 1, 1997. The Company appointed Vanguard Fiduciary Trust Company as trustee and recordkeeper effective January 1, 1997. This change also allowed the Company to provide daily valuation format to participants. Due to this conversion, the funds of the Equity, Balanced, and Fixed Income funds were transferred to participants' individual accounts. In addition, two new funds, the Index and International, were made available to participants effective January 1, 1997. Page 17 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED SEPTEMBER 30, 1997 - ------------------------------------------------------------------------------- Transactions involving an amount in excess of 5% of beginning plan asset value:
Identity of Cost of Number of Proceeds Number Net Gain Party Involved Identity of Issue Assets Purchases from Sales of Sales (Loss) - -------------- ----------------- ------- --------- ---------- -------- -------- Vanguard Windsor Fund $ 901,457 53 Vanguard Money Market Account 710,895 $ 710,895 60 $ 0 Vanguard Windsor Fund 1,992,901 2,127,389 56 134,888 Vanguard MEDIQ Common Stock 664,963 806,260 47 141,297 Janney Montgomery Scott MEDIQ Common Stock 86,004 87,834 1 1,830
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