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, 1999
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
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
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 5-9
SUPPLEMENTARY INFORMATION -
ASSETS HELD FOR INVESTMENT - SCHEDULE 1 11
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KEMPISTY & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS, P.C.
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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, 1999 and
1998 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, 1999 and 1998 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
schedule has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is 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
October 6, 2000
2
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
--------------------------
1999 1998
---------- ----------
ASSETS
Investments, at Fair Value $5,872,178 $3,885,432
Receivables:
Employer's contribution 33,425 36,992
Employees' contributions 109,555 132,638
---------- ----------
142,980 169,630
Cash 5,150 1,130
Interest receivable 612 --
---------- ----------
TOTAL ASSETS 6,020,920 4,056,192
---------- ----------
LIABILITIES -- --
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $6,020,920 $4,056,192
========== ==========
See accompanying notes to financial statements.
3
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Years ended
December 31,
--------------------------
1999 1998
----------- -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net Investment Gain(Loss) From Registered
Investment Companies $ 553,818 $ (445,676)
Net Investment (Loss) From Company Stock (38,040) (426,382)
Dividends 317,853 159,690
Interest 8,205 8,641
Miscellaneous Income 1,525 --
----------- -----------
843,361 (703,727)
Contributions:
Employer (Note 1b) 392,369 318,198
Participants 1,428,404 1,355,175
----------- -----------
1,820,773 1,673,373
----------- -----------
TOTAL ADDITIONS 2,664,134 969,646
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Payment for:
Benefits Paid To Participants 698,806 464,568
Administrative Expenses 600 --
----------- -----------
TOTAL DEDUCTIONS 699,406 464,568
----------- -----------
NET INCREASE 1,964,728 505,078
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of year 4,056,192 3,551,114
----------- -----------
End of year $ 6,020,920 $ 4,056,192
=========== ===========
See accompanying notes to financial statements.
4
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
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 1999 and 1998 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
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
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 the following 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
three years of service.
g. LOANS
A Participant may borrow from his account subject to approval of the
Plan Administrator. 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
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
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, 1999 and 1998 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.
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
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
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 71,691.94 $ 1,955,756 32.48%
=========== =========== ===========
ML Capital Fund 42,990.33 $ 1,376,120 22.86%
=========== =========== ===========
ML Global Allocation 78,587.68 $ 1,101,013 18.29%
=========== =========== ===========
ML Corp Bond Inv Grade B 31,955.49 $ 340,965 5.66%
=========== =========== ===========
ML Pacific Fund 13,418.35 $ 443,611 7.37%
=========== =========== ===========
ML Retirement Reserves 489,597.35 $ 489,597 8.13%
=========== =========== ===========
8
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MEDICAL RESOURCES, INC.
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
Note 6- SUBSEQUENT EVENTS
On March 29, 2000, Medical Resources, Inc. (the "Company") entered into
an agreement-in-principle with the holders of its $75,000,000 of Senior
Notes providing for conversion of the full amount of the debt into
approximately 84% of the common equity of the Company. In addition,
under the agreement-in-principle with the holders of the Senior Notes,
an additional $5,121,000 of unsecured notes would also be converted
into approximately 6% of the common equity of the Company. On April 7,
2000, the Company filed a Joint Plan of Reorganization reflecting the
terms of the agreement-in-principle and commenced proceedings under
Chapter 11 of the Federal Bankruptcy Code. The Joint Plan of
Reorganization is subject to Bankruptcy Court approval and applies only
to the parent company and none of its operating subsidiaries. In
addition, physician relationships, trade credit and employee
obligations of the Company, including obligations related to the 401(k)
Retirement Plan, will not be impaired. There can be no assurance,
however, that the Company will be successful in consummating the
reorganization as described above.
9
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SUPPLEMENTARY INFORMATION
MEDICAL RESOURCES, INC. 401(k) RETIREMENT PLAN
ITEM 27a - SCHEDULE OF INVESTMENTS
YEAR ENDED DECEMBER 31, 1999
10
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SUPPLEMENTARY INFORMATION SCHEDULE 1
----------
MEDICAL RESOURCES, INC. 401(k) RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED DECEMBER 31, 1999
NUMBER MARKET
REGISTERED INVESTMENT COMPANIES OF SHARES VALUE
------------------------------- ----------- -----------
ML GROWTH FUND 71,691.94 $ 1,955,756
ML CAPITAL FUND CL D 42,990.33 1,376,120
ML GLOBAL ALLOCATION FUND CL D 78,587.68 1,101,013
ML CORPORATE BOND INV GRADE B 31,955.49 340,965
ML PACIFIC FUND 13,418.35 443,611
ML RETIREMENT RESERVES 489,597.35 489,597
-----------
TOTAL REGISTERED INVESTMENT COMPANIES 5,707,062
MEDICAL RESOURCES,INC. COMMON STOCK 30,901.49 17,367
PARTICIPANT LOANS 147,749
-----------
TOTAL INVESTMENTS $ 5,872,178
============
11
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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: October 16, 2000
By: /s/ CHRISTOPHER J. JOYCE
----------------------------------
Name: Christopher J. Joyce
Title: Trustee
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