SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1998
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transaction period from _____________ to ______________
Commission file number:
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
MEDICAL RESOURCES, INC.
401 (k) RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
MEDICAL RESOURCES, INC.
155 State Street
Hackensack, New Jersey 07601
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 THE TRUSTEES
(OR OTHER PERSONS WHO ADMINISTER THE EMPLOYEE BENEFIT PLAN) HAVE DULY CAUSED
THIS ANNUAL REPORT TO BE SIGNED BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
MEDICAL RESOURCES, INC. 401(K) RETIREMENT PLAN
(Name of Plan)
Date: September 15, 2000
By: /s/ CHRISTOPHER J. JOYCE
---------------------------------
Name: Christopher J. Joyce
Title: Trustee
<PAGE>
MEDICAL RESOURCES, INC.
INDEX
PAGE
INDEPENDENT AUDITORS' REPORT 2
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS 3
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 4
NOTES TO FINANCIAL STATEMENTS 5-8
SUPPLEMENTARY INFORMATION -
ASSETS HELD FOR INVESTMENT - SCHEDULE 1 10
REPORTABLE TRANSACTIONS - SCHEDULE 2 11
<PAGE>
KEMPISTY & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS, P.C.
--------------------------------------------------------------------------------
15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX
(212) 513-1930
INDEPENDENT AUDITORS' REPORT
To The Trustees of Medical Resources, Inc.
401(K) Retirement Plan
We have audited the statements of net assets available for plan benefits of
Medical Resources, Inc. 401(K) Retirement Plan as of December 31, 1998 and 1997
and the related statements of changes in net assets available for plan benefits
for the years then ended. 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 audits 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of Medical
Resources, Inc. 401(K) Retirement Plan as of December 31, 1998 and 1997 and the
changes in net assets available for plan benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Medical
Resources, Inc. 401(K) Retirement Plan are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are not
a required part of the basic financial statements. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Kempisty & Company
Certified Public Accountants PC
New York, New York
July 15, 1999
2
<PAGE>
MEDICAL RESOURCES, INC.
401(K) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
--------------------------
1998 1997
---------- ----------
ASSETS
Investments, at Fair Value $3,885,432 $3,467,200
Receivables:
Employer's contribution 36,992 16,883
Employees' contributions 132,638 67,031
---------- ----------
169,630 83,914
Cash 1130 74,617
TOTAL ASSETS 4,056,192 3,625,731
---------- ----------
LIABILITIES
Accounts payable -- 74,617
---------- ----------
TOTAL LIABILITIES -- 74,617
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $4,056,192 $3,551,114
========== ==========
See accompanying notes to financial statements.
3
<PAGE>
MEDICAL RESOURCES, INC.
401(K) RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
Years ended
December 31,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net Investment Gain (Loss) From Registered
Invest Companies $ (445,676) $ 11,141
Net Investment (Loss) From Company Stock (426,382) (104,672)
Dividends 159,690 245,238
Interest 8,641 4,800
----------- -----------
(703,727) 156,507
Contributions:
Employer (Note 1b) 318,198 200,906
Participants 1,355,175 949,112
----------- -----------
1,673,373 1,150,018
Transfers from merged plan -- 1,017,732
----------- -----------
TOTAL ADDITIONS 969,646 2,324,257
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Payment for:
Benefits Paid To Participants 464,568 110,443
TOTAL DEDUCTIONS 464,568 110,443
----------- -----------
NET INCREASE 505,078 2,213,814
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of year 3,551,114 1,337,300
----------- -----------
End of year $ 4,056,192 $ 3,551,114
=========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
MEDICAL RESOURCES, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
Note 1 - DESCRIPTION OF THE PLAN
The following description of Medical Resources, Inc. 401(K) Retirement
Plan (the "Plan") provides only general information. Participants
should refer to the Plan Agreement for a more complete description of
the Plan's provisions.
a. ELIGIBILITY
The Plan is a defined contribution plan covering all employees of
Medical Resources Inc. (the "Plan Sponsor") and (the "Company") who are
at least twenty one years of age and have completed one year of
service. The Plan is subject to the Employee Retirement Income Security
Act of 1974 ("ERISA").
b. EMPLOYER CONTRIBUTION
The Company will contribute for each Plan year an amount in accordance
with the participants' compensation reduction election as described in
the Plan Agreement, plus an additional 50% of such amount not to exceed
2% of the participant's compensation.
The amounts contributed to the Plan each Plan year as a result of the
participants' election to have their earnings reduced may not exceed
the lesser of $10,000 for 1998 and $9,500 for 1997 or 15% of their
compensation, as described in the Plan Agreement.
c. PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's matching contribution
and, (b) Plan earnings. The benefit to which a participant is entitled
is the benefit that can be provided from the participant's vested
account.
d. VESTING
Participants are vested according to the following schedule:
YEARS OF SERVICE VESTED PERCENTAGE
1 33.3%
2 66.6%
3 100.0%
Participants are always 100% vested in their Salary Deferral
Contributions.
5
<PAGE>
MEDICAL RESOURCES, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
Note 1 - DESCRIPTION OF THE PLAN (continued)
e. INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee and
employer contributions in any of eight investment options:
Merrill Lynch Mutual Funds - Funds are invested in shares of any one or
a combination of six registered investment companies that invest in
common stocks, corporate bonds, U.S. Government Securities, short term
money market instruments, or a combination thereof.,
Medical Resources, Inc. Company Stock - Funds are invested in common
stock of Medical resources, Inc.
Participants may change their investment options in accordance with
Plan procedures.
f. TERMINATION OF PARTICIPATION
A participant whose employment ends for any reason other than death,
disability or retirement will be entitled to receive only that portion
of benefits in which they are vested. Any non-vested benefit will be
forfeited and used to reduce future employer contributions to the Plan.
Participants become fully vested upon death, disability, normal
retirement age (59 1/2) or early retirement age (55) and completion of
20 years of service.
g. LOANS
A Participant may borrow from his account subject to proper approvals.
The loan and subsequent repayment of principal and interest shall be
credited directly to the participant's account and shall not be treated
as income of the Trust Fund. The outstanding loans to a participant
shall not exceed the lesser of $50,000 or 50% of the value of the
participant's account as of the most recent valuation date. Generally,
loans shall be repaid in regular installments of interest and
principal, not less frequently than quarterly, over a period not to
exceed five years. Upon termination of the participants' employment
with the Company the loan balance will become immediately due.
6
<PAGE>
MEDICAL RESOURCES, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
Note 1 - DESCRIPTION OF THE PLAN (continued)
h. ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan may be paid in part or in total by
the Company. For the years ended December 31, 1998 and 1997 the
expenses of the Plan have been paid by the Company.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
In January 1997, the NMR of America, Inc 401(K) plan ("NMR plan") was
merged into the Medical Resources, Inc. 401(K) Retirement Plan. Assets
with a market value of $1,017,732 were transferred from the NMR plan
into the Medical Resources, Inc. 401(K) Plan.
b. ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those
estimates.
c. INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent
the net asset value of shares held by the Plan at year-end. The Company
stock is valued at its quoted market price. Participant notes
receivable are valued at cost which approximates fair value. Purchases
and sales of securities are recorded on a trade-date basis. Interest
income is recorded on an accrual basis. Dividends are recorded on the
ex-dividend date.
d. PAYMENT OF BENEFITS
Benefits are recorded when paid.
7
<PAGE>
MEDICAL RESOURCES, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
Note 3 - PLAN TERMINATIONS
The Company has the right under the Plan to terminate the Plan at any
time subject to the provisions of ERISA. In the event of Plan
termination, participants will be 100% vested, and the Trustee will
continue to administer the Trust and pay benefits in accordance with
the Plan Agreement.
Note 4 - INCOME TAX STATUS
The Trust established under the Plan to hold the Plan's net assets is
qualified pursuant to Section 501(c)9 of the Internal Revenue Code,
and, accordingly, the Trust's net investment income is exempt from
income taxes. The Sponsor has obtained a favorable tax determination
letter from the Internal Revenue Service and the Sponsor believes that
the Plan, as amended, continues to qualify and to operate as designed.
Note 5 - INVESTMENTS
Investments that represent five percent or more of the Plan net assets
are separately identified as follows:
Number Fair Percent of
of shares Value Plan Assets
---------- ----------- -----------
ML Growth Fund 63,845.09 $ 1,267,325 31.24%
========== =========== ===========
ML Capital Fund 27,091.06 $ 913,511 22.52%
========== =========== ===========
ML Global Allocation 58,460.94 $ 726,085 17.90%
========== =========== ===========
ML Corp Bond Inv Grade B 22,615.37 $ 263,695 6.50%
========== =========== ===========
ML Pacific Fund 14,218.51 $ 238,018 5.87%
========== =========== ===========
ML Retirement Reserves 304,793.17 $ 304,793 7.51%
========== =========== ===========
8
<PAGE>
SUPPLEMENTARY INFORMATION
MEDICAL RESOURCES, INC. 401(K) RETIREMENT PLAN
ITEM 27a - SCHEDULE OF INVESTMENTS
YEAR ENDED DECEMBER 31, 1998
<PAGE>
SUPPLEMENTARY INFORMATION SCHEDULE 1
MEDICAL RESOURCES, INC. 401(K) RETIREMENT PLAN
ITEM 27a - SCHEDULE OF INVESTMENTS
YEAR ENDED DECEMBER 31, 1998
NUMBER MARKET
REGISTERED INVESTMENT COMPANIES OF SHARES VALUE
------------------------------- ----------- -------------
ML GROWTH FUND 63,845.09 $ 1,267,325
ML CAPITAL FUND 27,091.06 913,511
ML GLOBAL ALLOCATION 58,460.94 726,085
ML CORPORATE BOND INV GRADE B 22,615.37 263,695
ML PACIFIC FUND 14,218.51 238,018
ML RETIREMENT RESERVES 304,793.17 304,793
-------------
TOTAL REGISTERED INVESTMENT COMPANIES 3,713,427
MEDICAL RESOURCES,INC. COMMON STOCK 22,820.56 51,346
PARTICIPANT LOANS 120,659
-------------
TOTAL INVESTMENTS $ 3,885,432
=============
10
<PAGE>
SUPPLEMENTARY INFORMATION SCHEDULE 2
MEDICAL RESOURCES, INC. 401(K) RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
PURCHASE SELLING NET
DESCRIPTION PRICE PRICE GAIN(LOSS)
----------- ---------- ---------- ----------
PURCHASES
ML Capital Fund $ 463,401 -- --
ML Global Allocation $ 373,319 -- --
ML Growth Fund $ 728,454 -- --
SALES
ML Growth Fund $ 393,041 $ 337,629 $ (55,412)
11
