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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1993 Commission File Number: 1-8147
------------------------------------
MEDIQ INCORPORATED
(Exact name of registrant as specified in its charter)
------------------------------------
<TABLE>
<S> <C>
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)
</TABLE>
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, 1993 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 28 -- MEDIQ Incorporated Employees' Savings Plan -- Annual
Report for fiscal year ended September 30, 1993
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- --------------------------------------------------------------------------------
<PAGE>
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)
Dated: March 25, 1994By: /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 25, 1994By: /s/ Michael F. Sandler
-------------------------
Michael F. Sandler, Senior
Vice President -- Finance and
Chief Financial Officer,
MEDIQ Incorporated,
Administrator of the Plan
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 18, 1994, appearing in Form 10-K/A #2 of MEDIQ Incorporated for the year
ended September 30, 1993.
DELOITTE & TOUCHE
Philadelphia, Pennsylvania
March 25, 1994
Exhibit 28
Annual Report for Fiscal Year Ended
September 30, 1993
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>
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,
1993 and 1992, 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,
1993. 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, 1993 and 1992, 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, 1993 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
Philadelphia, Pennsylvania
March 18, 1994
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
SEPTEMBER 30, 1993
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
-------------------------------------------------------------------
FIXED
SAVINGS EQUITY BALANCED INCOME STOCK LOAN
FUND FUND FUND FUND FUND FUND TOTAL
--------- --------- ------------ --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
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
========= ========== ========== ========= ========== ========= ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
SEPTEMBER 30, 1992
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
-------------------------------------------------------------------
FIXED
SAVINGS EQUITY BALANCED INCOME STOCK LOAN
FUND FUND FUND FUND FUND FUND TOTAL
--------- --------- ------------ --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
INVESTMENTS -- AT MARKET
PRICE.................... $2,737,178 $2,798,934 $1,083,251 $ 307,578 $3,317,475 $ $10,244,416
EMPLOYEE CONTRIBUTIONS
RECEIVABLE............... 29,307 6,723 36,030
EMPLOYER CONTRIBUTIONS
RECEIVABLE............... 471 471
LOANS RECEIVABLE........... 306,492 306,492
RECEIVABLE (PAYABLE) FROM
OTHER FUNDS.............. 11,730 2,429 (1,062) (93) (13,004) 0
--------- --------- ------------ --------- --------- --------- ----------
2,778,215 2,801,363 1,082,189 314,208 3,304,942 306,492 10,587,409
LIABILITIES:
DUE TO CUSTODIAN........... 22,933 22,933
--------- --------- ----------- --------- --------- --------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS............ $2,778,215 $2,801,363 $1,082,189 $ 314,208 $3,282,009 $306,492 $10,564,476
========== ========== ========== ========= ========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED SEPTEMBER 30, 1993
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
-------------------------------------------------------------------
FIXED
SAVINGS EQUITY BALANCED INCOME STOCK LOAN
FUND FUND FUND FUND FUND FUND TOTAL
--------- --------- ------------ --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
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......... 77,595 176,528 69,198 26,726 63,950 413,997
MHM STOCK DISTRIBUTION ... 458,201 458,201
NET REALIZED/UNREALIZED
GAINS (LOSSES)........... 653,252 103,215 (4,078) (42,223) 710,166
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
========== ========== ========== ======== ========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED SEPTEMBER 30, 1992
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
-------------------------------------------------------------------
FIXED
SAVINGS EQUITY BALANCED INCOME STOCK LOAN
FUND FUND FUND FUND FUND FUND TOTAL
--------- --------- ------------ --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
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........ 121,261 257,115 47,796 18,068 38,165 482,405
NET REALIZED/UNREALIZED
GAINS (LOSSES)........... (45,734) 38,617 8,167 553,672 554,722
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
========== ========== ========== ========= ========== ========= ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED SEPTEMBER 30, 1991
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
-------------------------------------------------------------------
FIXED
SAVINGS EQUITY BALANCED INCOME STOCK LOAN
FUND FUND FUND FUND FUND FUND TOTAL
--------- --------- ------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, OCTOBER 1,
1990...................... $3,436,806 $1,731,434 $ 279,644 $ 84,646 $1,452,398 $ 236,017 $7,220,945
ADDITIONS:
CONTRIBUTIONS:
EMPLOYEE CONTRIBUTIONS.... 968,211 438,790 236,998 108,931 162,383 1,915,313
EMPLOYEE ROLLOVER
PAYMENTS................ 4,390 4,000 734 780 4,456 14,360
EMPLOYER CONTRIBUTIONS.... 483,086 483,086
EMPLOYEE LOAN PAYMENTS.... 117,287 31,174 11,946 5,281 17,698 183,386
INVESTMENT INCOME.......... 258,096 184,866 25,235 11,079 980 480,256
NET REALIZED/UNREALIZED
GAINS..................... 446,428 69,961 10,021 1,027,828 1,554,238
INVESTMENT ELECTION
TRANSFERS................. 149,848 73,914 37,025 10,087 96,727 218,000 585,601
--------- --------- ------------ --------- --------- --------- ---------
TOTAL ADDITIONS............. 1,497,832 1,179,172 381,899 146,179 1,793,158 218,000 5,216,240
DEDUCTIONS:
BENEFIT PAYMENTS.......... 1,515,342 553,919 127,181 55,491 667,439 2,919,372
EMPLOYEE LOANS............. 213,300 213,300
EXPENSES................... 50 50
INVESTMENT ELECTION
TRANSFERS................. 317,596 147,319 11,420 12,870 96,396 585,601
--------- --------- ------------ --------- --------- --------- ---------
TOTAL DEDUCTIONS............ 1,832,938 701,238 138,601 68,361 763,885 213,300 3,718,323
--------- --------- ------------ --------- --------- --------- ---------
NET ADDITIONS
(DEDUCTIONS).............. (335,106) 477,934 243,298 77,818 1,029,273 4,700 1,497,917
--------- --------- ------------ --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, SEPTEMBER
30, 1991.................. $3,101,700 $2,209,368 $ 522,942 $ 162,464 $2,481,671 $ 240,717 $8,718,862
========= ========== =========== ========= ========== ========= ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
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.
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.
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 $62,345, 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.
<PAGE>
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:
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------------------------
1993 1992
---------------------- ----------------------
MARKET MARKET
COST VALUE COST VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Savings Fund.................................................. $2,264,053 $2,264,053 $2,737,178 $2,737,178
Equity Fund................................................... 3,654,592 4,017,705 3,084,571 2,798,934
Balanced Fund................................................. 1,421,956 1,571,903 1,018,640 1,083,251
Fixed Income Fund............................................. 574,936 581,767 294,219 307,578
Stock Fund:
Common Stock -- MEDIQ....................................... 3,113,278 3,417,177 2,864,820 3,295,326
Preferred Stock -- MEDIQ.................................... -0 - -0 - 34,877 22,149
Common Stock -- MHM......................................... 381,196 332,324 -0 - -0 -
---------- ---------- ---------- ----------
$11,410,011 $12,184,929 $10,034,305 $10,244,416
========== =========== =========== ===========
</TABLE>
The Equity Fund's investment is comprised of 270,007 shares of Vanguard
Investment's Windsor Fund, with a market value of $14.88 per share at September
30, 1993 and 228,298 shares at $12.26 per share at September 30, 1992.
<PAGE>
D.Investments (continued)
The Balanced Fund's investment is comprised of 75,974 shares of Vanguard
Investment's Wellington Fund, with a market value of $20.69 per share at
September 30, 1993 and 56,537 shares at $19.16 per share at September 30, 1992.
The Fixed Income Fund's investment is comprised of 55,725 shares of
Vanguard Investment's Fixed Income Securities -- GNMA portfolio, with a market
value of $10.44 per share at September 30, 1993 and 29,237 shares at $10.52
per share at September 30, 1992.
The Stock Fund's investment is comprised of 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 and
712,503 shares of the Company's common stock and 4,922 shares of the
Company's preferred stock, with a market value of $4.625 and $4.50 per share,
respectively, at September 30, 1992.
Investment income is accrued as earned. The net appreciation or
depreciation in market value of investments represents the change in aggregate
quoted market value during the periods 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, 1993 and 1992, respectively, 934 and 842 employees
of the Company were members of the Plan and participated in each fund as
follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1993 1992
----- -----
<S> <C> <C>
Savings Fund........ 539 690
Equity Fund......... 604 470
Balanced Fund....... 490 369
Fixed Income Fund... 276 203
Stock Fund.......... 933 841
</TABLE>
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 1993 and 1992.
<PAGE>
H.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.
During the most recently completed Plan year, 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 Tom 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.
I.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, 1993 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, 1994. By making such
distributions, the Plan will be in compliance with applicable IRS rules for
the year ending September 30, 1993. In addition, the Plan Administrator made
the necessary refunds for the year ended September 30, 1992.
J.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.
<PAGE>
K.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.
In June 1992, the Company sold Suburban Medical, a wholly-owned
subsidiary of the Company. This resulted in the distribution from the Plan of
$229,273 in cash and 16,920 shares of MEDIQ Common Stock with a market value of
$6.75 per share, to 36 employees in December 1992.
L.Schedule of Reportable Transactions
<TABLE>
<CAPTION>
NUMBER OF SELLING COST OF NET GAIN
SHARES/UNITS DESCRIPTION PRICE ASSET (LOSS)
- ----------- ----------------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C> <C>
PURCHASES
720,208 Vanguard Money Market Fund $ 720,208
78,462 Vanguard Windsor Fund $1,064,514
30,614 Vanguard Wellington Fund $ 607,811
123,960 MEDIQ Incorporated Common Stock $ 650,634
SALES
1,193,333 Vanguard Money Market Fund $1,193,333 $1,193,333
100,770 MEDIQ Incorporated Common Stock $ 567,824 $ 534,276 $ 33,548
</TABLE>
Under the provisions of ERISA, transactions, or an aggregate of
transactions, involving the same security which exceed 5% ($528,224) of the
current value of net assets at the beginning of the plan year must be disclosed
as reportable transactions.
