-----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, AZ8GD6bSUgzCIrDI55V7OygBVFx/OFfbRKH6+SG+GkLKk/WTjrfPTpDZE36wG41H FjgtK0t+Lr2Tvqm3Qfvmtg== 0000950115-99-000954.txt : 19990629 0000950115-99-000954.hdr.sgml : 19990629 ACCESSION NUMBER: 0000950115-99-000954 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990628 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: 11-K SEC ACT: SEC FILE NUMBER: 001-08147 FILM NUMBER: 99653594 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 11-K 1 ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the Year Ended December 31, 1998 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 Annual Report for Year Ended December 31, 1998 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) 2 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 benefits of the MEDIQ Incorporated Employees' Savings Plan (the "Plan") as of December 31, 1998 and December 31, 1997, and the related statements of changes in net assets available for benefits for the year ended December 31, 1998, the three months ended December 31, 1997 and the year ended September 30, 1997. 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 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 benefits of the MEDIQ Incorporated Employees' Savings Plan as of December 31, 1998 and 1997, and the changes in net assets available for benefits for the year ended December 31, 1998, the three months ended December 31, 1997 and the year ended September 30, 1997 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended, are 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. The supplemental information by fund in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for the purpose of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of the individual funds. The supplemental schedules and supplemental information by fund is the responsibility of the Plan's management. Such supplemental schedules and supplemental information by fund have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. 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 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. DELOITTE & TOUCHE LLP Philadelphia, Pennsylvania May 28, 1999 3 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998
SUPPLEMENTAL INFORMATION BY FUND ------------------------------------------------------------------------------------------- SAVINGS EQUITY BALANCED FIXED INCOME INDEX INTERNATIONAL STOCK FUND FUND FUND FUND FUND FUND FUND ---------- ---------- ---------- ------------ ---------- ------------- -------- ASSETS: INVESTMENTS - AT FAIR VALUE $2,835,997 $7,996,425 $4,036,157 $1,028,846 $2,434,067 $289,071 $133,424 EMPLOYEE CONTRIBUTIONS RECEIVABLE 6,174 23,014 10,565 2,057 15,012 2,971 EMPLOYER CONTRIBUTIONS RECEIVABLE 1,527 5,297 2,613 517 2,418 476 LOANS RECEIVABLE ------------------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $2,843,698 $8,024,736 $4,049,335 $1,031,420 $2,451,497 $292,518 $133,424 ========== ========== ========== ========== ========== ======== ========
SUPPLEMENTAL INFORMATION BY FUND -------------------------------- LOAN FUND TOTAL -------- ----------- ASSETS: INVESTMENTS - AT FAIR VALUE $18,753,987 EMPLOYEE CONTRIBUTIONS RECEIVABLE 59,793 EMPLOYER CONTRIBUTIONS RECEIVABLE 12,848 LOANS RECEIVABLE $426,893 426,893 -------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $426,893 $19,253,521 ======== =========== SEE NOTES TO FINANCIAL STATEMENTS 4 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1997
SUPPLEMENTAL INFORMATION BY FUND ----------------------------------------------------------------------------------------------- SAVINGS EQUITY BALANCED FIXED INCOME INDEX INTERNATIONAL STOCK FUND FUND FUND FUND FUND FUND FUND ---------- ---------- ---------- ------------ -------- ------------- --------- ASSETS: CASH $ 28,270 INVESTMENTS - AT FAIR VALUE $1,211,244 $6,288,441 $2,685,203 $325,648 $411,316 $94,548 6,066,073 EMPLOYEE CONTRIBUTIONS RECEIVABLE 4,249 24,270 11,032 1,622 6,451 2,091 4,842 EMPLOYER CONTRIBUTIONS RECEIVABLE 11,808 LOANS RECEIVABLE ----------------------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $1,215,493 $6,312,711 $2,696,235 $327,270 $417,767 $96,639 $6,110,993 ========== ========== ========== ======== ======== ======= ==========
SUPPLEMENTAL INFORMATION BY FUND -------------------------------- LOAN FUND TOTAL -------- ----------- ASSETS: CASH $ 28,270 INVESTMENTS - AT FAIR VALUE 17,082,473 EMPLOYEE CONTRIBUTIONS RECEIVABLE 54,557 EMPLOYER CONTRIBUTIONS RECEIVABLE 11,808 LOANS RECEIVABLE $359,936 359,936 ---------- ------------- NET ASSETS AVAILABLE FOR BENEFITS $359,936 $17,537,044 ======== =========== SEE NOTES TO FINANCIAL STATEMENTS 5 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 1998
SUPPLEMENTAL INFORMATION BY FUND --------------------------------------------------------------------------------- SAVINGS EQUITY BALANCED FIXED INCOME INDEX INTERNATIONAL FUND FUND FUND FUND FUND FUND ---------- ---------- ---------- ---------- ----------- ------------- NET ASSETS AVAILABLE FOR BENEFITS, January 1, 1998 $1,215,493 $6,312,711 $2,696,235 $ 327,270 $ 417,767 $ 96,639 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 130,396 567,996 265,718 38,578 223,043 53,535 EMPLOYEE ROLLOVER PAYMENTS 63,482 140,348 77,793 28,191 223,629 12,448 EMPLOYER CONTRIBUTIONS 21,586 70,571 34,882 6,225 28,613 6,318 EMPLOYEE LOAN PAYMENTS 22,889 63,233 39,463 9,549 19,238 3,600 INVESTMENT INCOME 111,114 42,789 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS (26,142) 363,612 390 341,364 17,433 MEDIQ COMMON STOCK CONVERSION 1,678,463 3,093,481 1,457,464 197,771 480,969 121,913 INVESTMENT ELECTION TRANSFERS 442,729 827,878 28,735 ------------------------------------------------------------------------------ TOTAL ADDITIONS 2,027,930 3,909,487 2,238,932 766,222 2,144,734 243,982 DEDUCTIONS: BENEFIT PAYMENTS 244,746 1,339,471 698,124 47,825 79,811 43,013 EMPLOYEE LOANS MEDIQ COMMON STOCK CONVERSION INVESTMENT ELECTION TRANSFERS 154,979 857,991 187,708 14,247 31,193 5,090 ------------------------------------------------------------------------------- TOTAL DEDUCTIONS 399,725 2,197,462 885,832 62,072 111,004 48,103 ------------------------------------------------------------------------------- NET ADDITIONS (DEDUCTIONS) 1,628,205 1,712,025 1,353,100 704,150 2,033,730 195,879 ------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS, DECEMBER 31, 1998 $2,843,698 $8,024,736 $4,049,335 $1,031,420 $2,451,497 $292,518 ========== ========== ========== ========== ========== ======== SUPPLEMENTAL INFORMATION BY FUND ------------------------ STOCK LOAN FUND FUND TOTAL ----------- --------- ------------ NET ASSETS AVAILABLE FOR BENEFITS, January 1, 1998 $6,110,993 $359,936 $17,537,044 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 66,930 1,346,196 EMPLOYEE ROLLOVER PAYMENTS 545,891 EMPLOYER CONTRIBUTIONS 124,342 292,537 EMPLOYEE LOAN PAYMENTS 8,195 166,167 INVESTMENT INCOME 153,903 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 1,577,255 2,273,912 MEDIQ COMMON STOCK CONVERSION 383,953 7,414,014 INVESTMENT ELECTION TRANSFERS 267,444 1,566,786 ----------------------------------------------- TOTAL ADDITIONS 2,160,675 267,444 13,759,406 DEDUCTIONS: BENEFIT PAYMENTS 408,652 70,755 2,932,397 EMPLOYEE LOANS 129,732 129,732 MEDIQ COMMON STOCK CONVERSION 7,414,014 7,414,014 INVESTMENT ELECTION TRANSFERS 315,578 1,566,786 ----------------------------------------------- TOTAL DEDUCTIONS 8,138,244 200,487 12,042,929 ----------------------------------------------- NET ADDITIONS (DEDUCTIONS) (5,977,569) 66,957 1,716,477 ----------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS, DECEMBER 31, 1998 $ 133,424 $426,893 $19,253,521 ========== ======== ===========
SEE NOTES TO FINANCIAL STATEMENTS 6 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS THREE MONTHS ENDED DECEMBER 31, 1997
SUPPLEMENTAL INFORMATION BY FUND ------------------------------------------------------------------------------------------ SAVINGS EQUITY BALANCED FIXED INCOME INDEX INTERNATIONAL STOCK FUND FUND FUND FUND FUND FUND FUND ----------- ----------- ----------- ---------- --------- ------------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, OCTOBER 1, 1997 $1,219,310 $6,750,763 $2,702,201 $324,680 $286,960 $86,407 $4,548,968 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 19,914 124,286 56,672 8,508 31,459 10,402 24,739 EMPLOYEE ROLLOVER PAYMENTS 365 18,788 18,091 2,499 9,968 6,879 9,563 EMPLOYER CONTRIBUTIONS 60,500 EMPLOYEE LOAN PAYMENTS 4,685 20,016 8,820 1,320 3,695 164 5,203 INVESTMENT INCOME 16,224 5,582 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS (229,033) 76,843 1,874 11,565 (8,239) 1,434,645 INVESTMENT ELECTION TRANSFERS 83,635 1,532 166,841 ---------------------------------------------------------------------------------------- TOTAL ADDITIONS 41,188 (65,943) 160,426 19,783 140,322 10,738 1,701,491 DEDUCTIONS: BENEFIT PAYMENTS 29,081 161,654 62,276 8,570 2,515 506 106,676 EMPLOYEE LOANS INVESTMENT ELECTION TRANSFERS 15,924 210,455 104,116 8,623 7,000 32,790 ---------------------------------------------------------------------------------------- TOTAL DEDUCTIONS 45,005 372,109 166,392 17,193 9,515 506 139,466 ---------------------------------------------------------------------------------------- NET ADDITIONS (DEDUCTIONS) (3,817) (438,052) (5,966) 2,590 130,807 10,232 1,562,025 ---------------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS, DECEMBER 31, 1997 $1,215,493 $6,312,711 $2,696,235 $327,270 $417,767 $96,639 $6,110,993 ========== ========== ========== ======== ======== ======= ==========
SUPPLEMENTAL INFORMATION BY FUND -------------------------------- LOAN FUND TOTAL --------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, OCTOBER 1, 1997 $290,461 $16,209,750 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 275,980 EMPLOYEE ROLLOVER PAYMENTS 66,153 EMPLOYER CONTRIBUTIONS 60,500 EMPLOYEE LOAN PAYMENTS 43,903 INVESTMENT INCOME 21,806 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 1,287,655 INVESTMENT ELECTION TRANSFERS 126,900 378,908 ------------ ------------- TOTAL ADDITIONS 126,900 2,134,905 DEDUCTIONS: BENEFIT PAYMENTS 20,146 391,424 EMPLOYEE LOANS 37,279 37,279 INVESTMENT ELECTION TRANSFERS 378,908 ------------ ------------- TOTAL DEDUCTIONS 57,425 807,611 ------------ ------------- NET ADDITIONS (DEDUCTIONS) 69,475 1,327,294 ------------ ------------- NET ASSETS AVAILABLE FOR BENEFITS, DECEMBER 31, 1997 $359,936 $17,537,044 ======== =========== SEE NOTES TO FINANCIAL STATEMENTS 7 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED SEPTEMBER 30, 1997
SUPPLEMENTAL INFORMATION BY FUND ------------------------------------------------------------------------------------------ SAVINGS EQUITY BALANCED FIXED INCOME INDEX INTERNATIONAL STOCK FUND FUND FUND FUND FUND FUND FUND ---------- ----------- ----------- ------------ ------- ------------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, OCTOBER 1, 1996 $1,318,526 $5,854,335 $2,356,238 $362,777 $ 0 $ 0 $3,460,141 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 108,673 583,571 306,569 46,895 55,597 21,801 91,592 EMPLOYEE ROLLOVER PAYMENTS 12,617 40,227 22,932 233 21,489 2,540 30,737 EMPLOYER CONTRIBUTIONS 277,660 EMPLOYEE LOAN PAYMENTS 26,518 104,762 34,923 6,251 8,383 1,369 20,272 INVESTMENT INCOME 66,710 275 1,582 24,290 53 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 2,134,547 614,181 8,835 15,592 898 1,438,239 INVESTMENT ELECTION TRANSFERS 13,500 198,199 61,178 93,465 ----------------------------------------------------------------------------------------- TOTAL ADDITIONS 228,018 2,863,382 980,187 86,504 299,260 87,786 1,952,018 DEDUCTIONS: BENEFIT PAYMENTS 274,698 1,668,331 447,057 68,910 845 183 825,758 EMPLOYEE LOANS INVESTMENT ELECTION TRANSFERS 52,536 298,623 187,167 55,691 11,455 1,196 37,433 ----------------------------------------------------------------------------------------- TOTAL DEDUCTIONS 327,234 1,966,954 634,224 124,601 12,300 1,379 863,191 ----------------------------------------------------------------------------------------- NET ADDITIONS (DEDUCTIONS) (99,216) 896,428 345,963 (38,097) 286,960 86,407 1,088,827 ----------------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS, SEPTEMBER 30, 1997 $1,219,310 $6,750,763 $2,702,201 $324,680 $286,960 $86,407 $4,548,968 ========== ========== ========== ======== ======== ======= ==========
SUPPLEMENTAL INFORMATION BY FUND -------------------------------- LOAN FUND TOTAL -------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, OCTOBER 1, 1996 $277,724 $13,629,741 ADDITIONS: CONTRIBUTIONS: EMPLOYEE CONTRIBUTIONS 1,214,698 EMPLOYEE ROLLOVER PAYMENTS 130,775 EMPLOYER CONTRIBUTIONS 277,660 EMPLOYEE LOAN PAYMENTS 202,478 INVESTMENT INCOME 92,910 NET APPRECIATION/(DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 4,212,292 INVESTMENT ELECTION TRANSFERS 277,759 644,101 ------------- ------------- TOTAL ADDITIONS 277,759 6,774,914 DEDUCTIONS: BENEFIT PAYMENTS 87,843 3,373,625 EMPLOYEE LOANS 177,179 177,179 INVESTMENT ELECTION TRANSFERS 644,101 ------------- ------------- TOTAL DEDUCTIONS 265,022 4,194,905 ------------- ------------- NET ADDITIONS (DEDUCTIONS) 12,737 2,580,009 ------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS, SEPTEMBER 30, 1997 $290,461 $16,209,750 ======== =========== SEE NOTES TO FINANCIAL STATEMENTS 8 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1998 THREE MONTHS ENDED DECEMBER 31, 1997 YEAR ENDED SEPTEMBER 30, 1997 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 value of investments is based on quoted market 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 ("MEDIQ" or 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 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 Fiduciary Trust Company Prototype Non-Standardized Safe Harbor Profit Sharing Plan with CODA ("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 and up to May 31, 1998, was to be used to purchase shares of the common stock of the Company for the account of the participant. Effective June 1, 1998, all company matching contributions were invested according to each participant's pre-tax contribution allocation. A participant's accrued benefit is at all times fully vested and nonforfeitable. 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. 9 C. Investment Options Participant 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 seek the highest level of income consistent with maintaining a stable share price. The fund invests in short-term, high-quality money market instruments issued by financial institutions, non-financial corporations, the U.S. government, and federal agencies. 2. Equity Fund: The fund is comprised of two investment options. The first option is the Vanguard Windsor Fund whose investment objective is to seek long-term growth of capital and income by investing in stocks believed to be undervalued by the market. The second investment option is the Vanguard U.S. Growth Fund whose investment objective is to seek long-term growth of capital by investing in large, high-quality, seasoned U.S. companies with records of exceptional growth. The Vanguard U.S. Growth Fund became available to participants on May 26, 1998. 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 invests approximately 65% of its assets in stocks and approximately 35% in high-quality bonds. 4. Fixed Income Fund: The fund objective is to hold a mix of government and affiliated agency securities to provide a high and stable level of income from interest. The fund invests in mortgage-backed certificates issued by the Government National Mortgage Association ("GNMA"). 5. Index Fund: The fund is comprised of two investment funds. The first investment fund is the Vanguard 500 Index Fund. This 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. The second investment fund is the Vanguard Growth Index Fund. This fund objective is to seek long-term growth of capital; the fund holds all of the stocks in the Standard & Poor's/BARRA Growth Index. The Vanguard Growth Index Fund became available to participants on May 26, 1998. 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 approximately 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 Series A preferred stock. The shares are a result of the company merger that was completed May 29, 1998. No additional shares will be purchased by the Plan. A brokerage firm 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. 10 C. Investments Options (continued) Pursuant to the Plan, 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 to participants under the Plan. As a result of the Merger on May 29, 1998, between MEDIQ and MQ Acquisition Company (See Note L), the MEDIQ Common Stock Fund was eliminated. The cash proceeds for each share of MEDIQ Common Stock were reallocated to the participants' other investment options based on their investment allocation elections in effect as of June 4, 1998. The results of this transaction are reflected in the 1998 Statement of Changes in Net Assets Available for Benefits under the line item "MEDIQ Common Stock Conversion". D. Investments As of December 31, 1998 the Savings Fund, Equity Fund, Balanced Fund, Fixed Income Fund and the Index Fund, individually represent 5% or more of net assets available for benefits. As of December 31, 1997 the Savings Fund, Equity Fund, Balanced Fund and the Common Stock Fund, individually represent 5% or more of net assets available for benefits. The fair value of the investments of the Plan are as follows: December 31, 1998 December 31, 1997 ----------------- ----------------- Savings Fund $ 2,835,997 $ 1,211,244 Equity Fund 7,996,425 6,288,441 Balanced Fund 4,036,157 2,685,203 Fixed Income Fund 1,028,846 325,648 Index Fund 2,434,067 411,316 International Fund 289,071 94,548 Stock Fund: Series A Preferred - MEDIQ 133,424 0 Common Stock - MEDIQ 0 6,066,073 ----------- ----------- $18,753,987 $17,082,473 =========== =========== The Savings Fund investment is comprised of 2,835,997 shares of Vanguard's Prime Money Market Fund, with a fair value of $1.00 per share at December 31, 1998 and 1,211,244 shares at $1.00 per share at December 31, 1997. The Equity Fund investment is comprised of 457,081 shares of Vanguard's Windsor Fund and 23,464 shares of Vanguard's U.S. Growth Fund, with a fair value of $15.57 and $37.49 per share, respectively, at December 31, 1998 and 370,344 shares of Vanguard's Windsor Fund at $16.98 per share at December 31, 1997. The Balanced Fund investment is comprised of 137,518 shares of Vanguard's Wellington Fund, with a fair value of $29.35 per share at December 31, 1998 and 91,178 shares at $29.45 per share at December 31, 1997. 11 D. Investments (continued) The Fixed Income Fund investment is comprised of 98,454 shares of Vanguard's GNMA Fund, with a fair value of $10.45 per share at December 31, 1998 and 31,222 shares at $10.43 per share at December 31, 1997. The Index Fund investment is comprised of 17,006 shares of Vanguard's 500 Index Fund and 15,668 shares of Vanguard's Growth Index Fund with a fair value of $113.95 and $31.67 per share, respectively, at December 31, 1998 and 4,567 shares of Vanguard's 500 Index Fund at $90.07 per share at December 31, 1997. The International Fund investment is comprised of 15,401 shares of Vanguard's International Growth portfolio, with a fair value of $18.77 per share at December 31, 1998 and 5,769 shares at $16.39 per share at December 31, 1997. The Stock Fund investment is comprised of 33,356 shares of the Company's Series A preferred stock, with a fair value of $4.00 at December 31, 1998 and 545,265 shares of the Company's common stock, with a fair value of $11.125 per share at December 31, 1997. 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. 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. Administration of the Plan The Plan is administered by Jay M. Kaplan, Senior Vice President and Chief Financial Officer of MEDIQ, 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. Under the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), each of the above individuals is a "party-in-interest". 12 G. Administration of the Plan (continued) 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. H. Federal Tax Considerations The Plan Administrator received a determination letter dated February 22, 1996 from the Internal Revenue Service ("IRS") that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"). The Plan has since been amended through the adoption of the "Vanguard Prototype 401(k) Savings Plan". 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, employer matching contributions and employee contributions, as well as earnings on all Plan assets, are generally not subject to federal income tax until distributed from the Plan. The Plan has met the nondiscrimination requirements of Section 401(k) and 401(m) of the Code for the year ended December 31, 1998 I. Acquisitions On May 29, 1998 the Company purchased specified assets and rights from CH Industries, Inc. MEDIQ retained 161 employees from CH Industries. These employees were treated as new hires with the Company and were subject to the one-year wait for eligibility. The employees were eligible to rollover their 401k funds on an individual basis. Nineteen former CH Industries employees elected to rollover $307,806 into the Plan during the plan year. On June 26, 1998 the Company acquired certain assets of National Patient Care Systems, Inc. ("NPC"). MEDIQ retained 38 employees from NPC. These employees were treated as new hires with the Company and were subject to the one-year wait for eligibility. The employees were eligible to rollover their 401k funds on an individual basis. Sixteen former NPC employees elected to rollover $216,616 into the Plan during the plan year. J. 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 transaction resulted in a total distribution of $1,217,711 from the Plan to 96 employees during fiscal year 1997. K. Change In Plan Year On September 30, 1997 the Board of Directors of MEDIQ approved the change of the Plan Trust Year from fiscal year, September 30th, to calendar year, December 31st effective October 1, 1997. 13 L. Ownership Change On May 29, 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., has entered into a transaction with the Company whereby Acquirer 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 are 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 has a liquidation preference of $10.00 per share. 14 MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1998 - --------------------------------------------------------------------------------
Current Fund Identity of Issue Shares Cost(1) Value - ---- ----------------- --------- ----------- ---------- Savings Vanguard Money Market Fund 2,835,997 $ 2,835,997 $2,835,997 Equity Vanguard Windsor Fund 457,081 7,842,602 7,116,756 Vanguard U.S. Growth Fund 23,464 812,043 879,669 Balanced Vanguard Wellington Fund 137,518 3,956,895 4,036,157 Fixed Income Vanguard GNMA Fund 98,454 1,023,175 1,028,846 Index Vanguard 500 Index Fund 17,006 1,701,550 1,937,865 Vanguard Index Growth Fund 15,668 436,958 496,202 International Vanguard International Growth Fund 15,401 283,580 289,071 Stock MEDIQ Series A Preferred Fund * 33,356 329,172 133,424 Loan Participant Loans (bearing interest at 7.4%-12.5%, maturity ranging from 1 year to 30 years) 0 426,893 ----------- ----------- TOTAL INVESTMENTS $19,221,972 $19,180,880 =========== ===========
- ---------- (1) The cost basis for the Equity Windsor Fund, Balanced Fund, and Fixed Income Fund were restated based on the market value as 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 to participants. Due to this conversion, the funds of the Equity (Windsor), Balanced, and Fixed Income funds were transferred to participants' individual accounts. *Indicates party-in-interest to the Plan. 15 MEDIQ INCORPORATED EMPLOYEE'S SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1998 - -------------------------------------------------------------------------------- Individual Transactions involving an amount in excess of 5% of beginning plan asset value:
Identity of Cost of Number of Proceeds Net Gain Party Involved Identity of Issue Assets Shares from Sales (Loss) - -------------- ----------------- ---------- --------- ---------- ---------- Vanguard MEDIQ Common* $5,589,193 328,283 $7,414,014 $1,824,820 Vanguard Money Market Fund $1,678,463 1,678,463 Vanguard Wellington Fund $1,457,464 46,035 Vanguard Windsor Fund $2,755,746 146,426
- ---------- * Indicates party-in-interest to the Plan 16 MEDIQ INCORPORATED EMPLOYEE'S SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1998 - -------------------------------------------------------------------------------- Series of 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 Sale (Loss) - -------------- ----------------- ---------- --------- ---------- ------- ---------- Vanguard Mediq Common* $6,441,115 $8,237,664 35 $1,796,549 Vanguard Wellington Fund $1,016,507 $1,104,793 84 $ 88,286 Vanguard Wellington Fund $2,540,433 75 Vanguard Windsor Fund $2,812,820 $2,803,441 105 $ (9,379) Vanguard Windsor Fund $4,413,113 71 Vanguard Money Market Fund $1,963,037 $1,963,037 89 $ 0 Vanguard Money Market Fund $3,587,790 115 Vanguard GNMA Fund $1,236,133 94 Vanguard 500 Index Fund $1,906,038 $1,942,156 62 $ 36,118 Vanguard 500 Index Fund $3,215,828 99 Vanguard U.S. Growth Fund $ 909,703 49
- ---------- * Indicates party-in-interest to the Plan. 17 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: June 28, 1999 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: June 28, 1999 By: /s/ Jay M. Kaplan ----------------------------------- Jay M. Kaplan Senior Vice President - Finance and Chief Financial Officer, MEDIQ Incorporated, Administrator of the Plan 18 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 the financial statements of the MEDIQ Incorporated Employees' Savings Plan dated May 28, 1999, appearing in the annual report on Form 11-K of MEDIQ Incorporated Employees' Savings Plan for the plan year ended December 31, 1998. DELOITTE & TOUCHE LLP Philadelphia, Pennsylvania June 28, 1999 19 -----END PRIVACY-ENHANCED MESSAGE-----