<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT TO
FORM 10-K/A #2
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: September 30, 1995 Commission File Number: 1-8147
MEDIQ Incorporated
(Exact name of registrant as specified in its charter)
Delaware 51-0219413
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One MEDIQ Plaza, Pennsauken, New Jersey 08110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 665-9300
PORTIONS AMENDED
The registrant hereby amends the following items, financial statements,
exhibits or other portions of its Annual Report on Form 10-K for the year ended
September 30, 1995 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, 1995
<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)
Date: March 28, 1996 By: /s/ Michael F. Sandler
------------------------------------
Michael F. Sandler
Senior Vice President - Finance and
Chief Financial Officer
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees have duly caused the annual report included in this filing to be
signed on their behalf by the undersigned, hereunto duly authorized.
MEDIQ Incorporated
Employees' Savings Plan
(Plan)
Date: March 28, 1996 By: /s/ Michael F. Sandler
------------------------------------
Michael F. Sandler
Senior Vice President - Finance and
Chief Financial Officer, MEDIQ
Incorporated, Administrator of the
Plan
<PAGE>
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 22, 1996, appearing in Form 10-K/A#2 to the Annual Report on Form 10-K of
MEDIQ Incorporated for the year ended September 30, 1995.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
March 22, 1996
<PAGE>
Annual Report for Fiscal Year
Ended September 30, 1995
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,
1995 and 1994, 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,
1995. 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, 1995 and 1994, 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, 1995 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 LLP
Philadelphia, Pennsylvania
March 22, 1996
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
SEPTEMBER 30, 1995
<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 $ 13,231 $ 13,231
INVESTMENTS - AT MARKET PRICE $ 1,726,206 $ 5,146,720 $ 1,933,481 $ 465,214 3,582,435 12,854,056
EMPLOYEE CONTRIBUTIONS RECEIVABLE 7,807 6,017 3,397 1,190 729 19,140
EMPLOYER CONTRIBUTIONS RECEIVABLE 7,882 7,882
LOANS RECEIVABLE $ 300,348 300,348
RECEIVABLE (PAYABLE) FROM
OTHER FUNDS (6,191) 5,150 1,364 512 (835) -0-
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 1,727,822 $ 5,157,887 $ 1,938,242 $ 466,916 $ 3,603,442 $ 300,348 $13,194,657
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
SEPTEMBER 30, 1994
<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 $ 49,835 $ 49,835
INVESTMENTS - AT MARKET PRICE $ 1,905,722 $ 4,245,807 $ 1,686,530 $ 472,868 3,297,883 11,608,810
EMPLOYEE CONTRIBUTIONS RECEIVABLE 8,736 53,031 29,065 8,553 4,371 103,756
EMPLOYER CONTRIBUTIONS RECEIVABLE 11,648 11,648
LOANS RECEIVABLE $ 388,614 388,614
RECEIVABLE (PAYABLE) FROM
OTHER FUNDS 61,236 (5,641) (136) (4,163) (51,296) -0-
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 1,975,694 $ 4,293,197 $ 1,715,459 $ 477,258 $ 3,312,441 $ 388,614 $12,162,663
=========== =========== =========== =========== =========== =========== ===========
</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, 1995
<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, 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 REALIZED/UNREALIZED
GAINS (LOSSES) 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
=========== =========== =========== =========== =========== =========== ===========
</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, 1994
<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, 1993 $ 2,293,263 $ 4,018,591 $ 1,576,966 $ 588,353 $ 3,782,072 $ 395,439 $12,654,684
ADDITIONS:
CONTRIBUTIONS:
EMPLOYEE CONTRIBUTIONS 337,387 702,521 418,803 146,412 164,558 1,769,681
EMPLOYEE ROLLOVER PAYMENTS 15,206 11,609 6,165 1,268 5,090 39,338
EMPLOYER CONTRIBUTIONS 425,222 425,222
EMPLOYEE LOAN PAYMENTS 79,928 82,592 49,248 15,099 25,938 252,805
INVESTMENT INCOME 74,631 38,069 91,793 204,493
NET REALIZED/UNREALIZED
GAINS (LOSSES) 157,221 47,071 (43,661) (520,007) (359,376)
INVESTMENT ELECTION TRANSFERS 292,425 38,478 347,300 678,203
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL ADDITIONS 507,152 1,246,368 559,765 157,187 192,594 347,300 3,010,366
DEDUCTIONS:
BENEFIT PAYMENTS 187,892 186,620 97,527 39,735 234,953 66,064 812,791
EMPLOYEE LOANS 222,292 222,292
TRANSFER TO MHM PLAN 326,199 657,392 284,195 83,759 371,787 44,653 1,767,985
TRANSFER TO MMI PLAN 21,116 21,116
INVESTMENT ELECTION TRANSFERS 310,630 127,750 39,550 144,788 55,485 678,203
----------- ----------- ----------- ----------- ----------- ----------- ------------
TOTAL DEDUCTIONS 824,721 971,762 421,272 268,282 662,225 354,125 3,502,387
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ADDITIONS (DEDUCTIONS) (317,569) 274,606 138,493 (111,095) (469,631) (6,825) (492,021)
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, SEPTEMBER 30, 1994 $ 1,975,694 $ 4,293,197 $ 1,715,459 $ 477,258 $ 3,312,441 $ 388,614 $12,162,663
=========== =========== =========== =========== =========== =========== ===========
</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 26,726 63,950 168,271
MHM STOCK DISTRIBUTION 458,201 458,201
NET REALIZED/UNREALIZED
GAINS (LOSSES) 829,780 172,413 (4,078) (42,223) 955,892
INVESTMENT ELECTION TRANSFERS 169,301 121,753 155,301 17,007 305,300 768,662
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL ADDITIONS 668,138 1,716,478 717,552 367,851 1,159,863 305,300 4,935,182
DEDUCTIONS:
BENEFIT PAYMENTS 529,996 466,300 179,675 78,722 605,266 57,452 1,917,411
EMPLOYEE LOANS 158,901 158,901
INVESTMENT ELECTION TRANSFERS 623,094 32,950 43,100 14,984 54,534 768,662
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL DEDUCTIONS 1,153,090 499,250 222,775 93,706 659,800 216,353 2,844,974
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ADDITIONS (DEDUCTIONS) (484,952) 1,217,228 494,777 274,145 500,063 88,947 2,090,208
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, SEPTEMBER 30, 1993 $ 2,293,263 $ 4,018,591 $ 1,576,966 $ 588,353 $ 3,782,072 $ 395,439 $12,654,684
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MEDIQ INCORPORATED EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
A. Significant Accounting Policies
The financial statements of the MEDIQ Incorporated Employees' Savings
Plan (the "Plan") are presented on the accrual basis of accounting. Investments
are stated at their September 30 market value. Market values for investments are
determined by closing prices as of the last trading day of the Plan year.
Dividends and interest are recorded when earned. Employee and employer
contributions are recorded in the period to which they are applicable. Benefit
payments are recorded when paid. Brokerage commissions and other expenses
incurred in connection with the purchase or sale of securities, are charged
directly to the Plan. All other costs and expenses of the Plan are paid for by
MEDIQ Incorporated (the "Company"). Should the Company elect not to pay
administrative expenses, such expenses will be paid by the Plan.
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 18% of their salaries to be
invested, as they choose, in the various funds described in Note C. If the
participant's compensation exceeds $66,000, 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. Distribution 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,
-------------
1995 1994
---- ----
Market Market
Cost Value Cost Value
---- ----- ---- -----
<S> <C> <C> <C> <C>
Savings Fund $ 1,726,206 $ 1,726,206 $ 1,905,722 $ 1,905,722
Equity Fund 3,371,642 5,146,720 3,268,197 4,245,807
Balanced Fund 1,403,548 1,933,481 1,436,387 1,686,530
Fixed Income Fund 461,338 465,214 500,553 472,868
Stock Fund:
Common Stock-MEDIQ 2,715,609 3,432,650 3,278,215 3,119,624
Common Stock - MHM -0- 149,785 -0- 178,259
----------- ----------- ----------- -----------
$ 9,678,343 $12,854,056 $10,389,074 $11,608,810
=========== =========== =========== ===========
</TABLE>
<PAGE>
D. Investments (continued)
The Equity Fund's investment is comprised of 317,699 shares of
Vanguard's Windsor Fund, with a market value of $16.20 per share at September
30, 1995 and 300,269 shares at $14.14 per share at September 30, 1994.
The Balanced Fund's investment is comprised of 81,616 shares of
Vanguard's Wellington Fund, with a market value of $23.69 per share at September
30, 1995 and 84,453 shares at $19.97 per share at September 30, 1994.
The Fixed Income Fund's investment is comprised of 45,431 shares of
Vanguard's - GNMA portfolio, with a market value of $10.24 per share at
September 30, 1995 and 48,799 shares at $9.69 per share at September 30, 1994.
The Stock Fund's investment is comprised of 631,292 shares of the
Company's common stock and 41,320 shares of MHM common stock, with a market
value of $5.438 and $3.625 per share, respectively, at September 30, 1995 and
779,906 shares of the Company's common stock and 62,003 shares of MHM common
stock, with a market value of $4.00 and $2.875 per share, respectively, at
September 30, 1994.
Investment income is accrued as earned. The net appreciation or
depreciation in market value of investments represents the change in the market
value during the periods as a result of reinvested dividends or appreciation or
depreciation in the underlying securities in the various funds except to the
extent of gains or losses realized on investments sold during the year.
E. Loans
A participant may be granted a loan at the discretion of the Plan
Administrator in accordance with current IRS regulations. Loans shall be repaid
in equal installments of principal and interest over a period and at rates
designated by the Plan.
F. Withdrawals
Participants are limited to two withdrawals per Plan year with respect
to amounts attributable to basic contributions. In order to obtain a hardship
withdrawal, a participant must exhaust the possibility of all other withdrawals
(other than hardship withdrawals) under the Plan. Upon receiving a hardship
distribution, a participant is suspended from making contributions to the Plan
for one year.
<PAGE>
G. Plan Participants
As of September 30, 1995 and 1994, respectively, 604 and 756
participants of the Plan participated in each fund as follows:
September 30,
-------------
1995 1994
---- ----
Savings Fund 317 412
Equity Fund 461 545
Balanced Fund 359 444
Fixed Income Fund 184 227
Stock Fund 604 756
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 1995 and 1994.
H. Benefits Payable
The following amounts have been allocated to the accounts of persons who
have elected to withdraw from the plan but have not yet been paid.
Year Ended Year Ended
September 30, 1995 September 30, 1994
------------------ ------------------
$1,339,028 $804,069
I. Administration of the Plan
The Plan is administered by Michael F. Sandler, the Plan Administrator,
who has fiduciary responsibility for the general operations of the Plan and may
interpret provisions of the Plan. The Plan Administrator does not have any
responsibilities with respect to the investment of Plan assets.
The Plan's trustees are appointed by the Board of Directors of the
Company for indefinite terms and may resign or be removed at any time. The
Company indemnifies such trustees to the extent determined by its Board of
Directors. During the most recently completed Plan year, the trustees were
Thomas E. Carroll, President and Chief Executive Officer, Michael F. Sandler,
Senior Vice President - Finance, Chief Financial Officer and Treasurer and Mark
B. Lawlor, Controller and Assistant Treasurer of the Company.
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.
<PAGE>
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 Sections 401(a), 401(k) and 401(m) of the Internal Revenue Code
(the "Code"). 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.
K. Mental Health Management Stock Distribution
In August 1993, the Company distributed the stock of Mental Health
Management, Inc. ("MHM"), formerly a wholly-owned subsidiary of the Company, to
the Company's shareholders. Shareholders received one share of MHM stock for
eight shares of MHM stock with a fair market value of $4.875 per share on the
date of the distribution.
L. Other
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 $909,173 from the Plan consisting of
$736,597 in cash and 39,386 shares of MEDIQ common stock with a market value of
$4.25 per share, and 2,074 shares of MHM common stock with a market value of
$2.50 per share to 78 employees in December 1995.
In June 1995, the Company entered into an agreement to sell Medifac
Inc., 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.
In September 1993, MHM, formerly a wholly-owned subsidiary of the
Company, established its own Employee's Savings Plan. This resulted in a total
distribution of $1,767,985 from the Plan consisting of $1,355,785 in cash, loan
notes of $44,653 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
$6.75 per share to 130 employees of MHM in March 1994.
<PAGE>
M. Schedule of Reportable Transactions
<TABLE>
<CAPTION>
Number of Number of Selling Cost of Net Gain
Shares/Units Transactions Description Price Asset (Loss)
------------ ------------ ----------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C>
PURCHASES
---------
1,036,029 29 Vanguard Money Market Fund $1,036,029
103,140 29 Vanguard Windsor Fund $1,006,232
SALES
-----
1,326,671 7 Vanguard Money Market Fund $1,326,671 $1,326,671
85,710 8 Vanguard Windsor Fund $1,273,977 $1,240,326 $ 33,651
27,553 9 Vanguard Wellington Fund $ 595,143 $ 590,376 $ 4,767
258,574 5 MEDIQ Incorporated $1,309,268 $1,279,342 $ 29,926
Common Stock
</TABLE>
Under the provisions of ERISA, transactions, or an aggregate of
transactions, involving the same security which exceed 5% ($582,932) of the
current value of net assets at the beginning of the plan year must be disclosed
as reportable transactions.
