U. S. 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
For the fiscal year ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
MEDPLUS, INC. 401(K) PLAN
(Full title of the plan)
MEDPLUS, INC.
(Name of issuer of the securities held pursuant to the plan)
8805 Governor's Hill Drive, Suite 100, Cincinnati OH 45249
(Address of principal executive offices)
MedPlus, Inc. 401k Plan
December 31, 1997
Table of Contents
Page
Independent Auditors' Report 1
Statements of Assets Available for Plan Benefits, with Fund
Information - December 31, 1997 2
Statements of Assets Available for Plan Benefits, with Fund
Information - December 31, 1996 (unaudited) 3
Statements of Changes in Assets Available for Plan Benefits,
with Fund Information - for the year ended
December 31, 1997 4
Notes to Financial Statements 5 - 9
Schedules
1 Item 27a, Schedule of Assets Held for Investment
Purposes - December 31, 1997 10
2 Item 27d, Schedule of Reportable Transactions -
December 31, 1997 11
Independent Auditors' Report
The Trustees
MedPlus, Inc. 401k Plan
We have audited the accompanying statement of assets available for
plan benefits of the MedPlus, Inc. 401k Plan as of December 31,
1997, and the related statement of changes in assets available for
plan benefits for the year 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 audit. We have not audited the
accompanying statement of assets available for plan benefits as of
December 31, 1996.
We conducted our audit 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan
benefits of the MedPlus, Inc. 401k Plan as of December 31, 1997,
and the changes in assets available for plan benefits for the year
then ended in conformity with generally accepted accounting
principles.
Our audit was performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
schedules of Assets Held for Investment Purposes and Reportable
Transactions are presented for the purpose of additional analysis
and are not a required part of the basic financial statements, but
are 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 fund
information in the statements of assets available for benefits and
the statements of changes in assets available for plan benefits is
presented for purposes of additional analysis rather than to
present the assets available for plan benefits and changes in plan
assets available for plan benefits of each fund. The supplemental
schedules and fund information 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.
June 24, 1998
(1) Description of Plan
The following description of the MedPlus, Inc. 401k 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) General
The Plan is a defined contribution plan covering all
employee classifications except those employees leased by MedPlus,
Inc. (The Company). The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). Employees
are eligible for participation in the Plan after attainment of age
21.
(b) Contributions
A participant may make contributions to the Plan by
authorizing a deferral of pretax annual compensation, as defined
in the Plan, up to a maximum of 15%, subject to limitations of the
Internal Revenue Code. The Company may provide a matching
contribution equal to such of the participants contribution as
determined by the employer in its discretion for each Plan year.
An additional discretionary contribution may also be made by the
Company. Both the matching contribution and the additional
discretionary contribution are non-participant directed.
(c) Participant Accounts
Each participant's account is credited with the
participant's contribution and allocation of the Company's
contribution and Plan earnings. Earnings and gains and losses of
each investment fund are allocated among the accounts of all
participants in each fund in the ratio each participant account
bears to the total account balance. Participants have the ability
to self-direct the investments of funds allocated to their
accounts.
(d) Vesting
Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Participants become
20% vested in Company contributions after two years of service.
Thereafter, participants become vested at a rate of 20% per year
of service and become fully vested after six years of service.
(e) Participant Loans Receivable
Participants may borrow from their accounts not less
than $1,000 and not more than 50% of their vested balance for the
following hardships:
- Purchase of primary residence
- Foreclosure or eviction from primary residence
- College tuition for participant or dependents
- Medical expenses incurred from prolonged illness,
disability, or death in immediate family.
Loan terms provide for repayment over a period not to
exceed five years. The loans are secured by the balances in the
participants' accounts and bear interest at 2% over the prime
interest rate. Principal and interest amounts are paid ratably
through payroll deductions. There have been no loans since
inception of the Plan.
(f) Payment of Benefits
Under the terms of the Plan, upon termination of
employment a participant's account is distributed upon written
request of the participant. A participant or participant's estate
is entitled to receive 100% of the related account balance if
termination results from reaching normal retirement age, death or
permanent disability. As of December 31, 1997 there were no
amounts allocated to accounts of persons who have withdrawn from
participation in the earnings and operations of the Plan.
(g) Forfeitures
Forfeitures of Company contributions by terminated
participants are used to reduce Company contributions. As of
December 31, 1997, forfeitures of approximately $7,200 are
available to reduce future employer contributions.
(h) Investment Options
Upon enrollment in the Plan, a participant may direct
employee deferred contributions to any of the following eight
investment options as of December 31, 1997:
- Money Market Fund
Funds are invested in a portfolio of fixed income
securities, including U.S. Treasuries and related repurchase
agreements and obligations of U.S. Government Agencies and
Instrumentalities.
- Diversified Income Fund
Funds are invested in a portfolio of three fixed
income sectors, which are comprised of U.S. Government securities,
lower rated, high-yield debt securities, and international
investing.
- Balance Fund
Funds are invested in a portfolio of stocks and
bonds.
- Investors Fund
Funds are invested primarily in quality, long-term
growth stocks.
- Global Growth Fund
Funds are invested in a portfolio of common stocks
traded in securities markets, located in foreign countries and in
the United States.
- Vista Fund
Funds are invested in a portfolio of stocks of
medium-sized growth companies.
- New Opportunities Fund
Funds are invested in dynamic, rapidly growing
sectors of the economy.
- MedPlus Stock
Funds are invested in the Company's common stock.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements of the Plan have
been prepared on the accrual basis of accounting.
(b) Investments
Money market accounts are valued at cost which
approximates fair value. All other investments are recorded at
fair value based on quotations obtained from national securities
exchanges. Purchases and sales of investments are recorded on a
trade-date basis. Gains or losses on the sales of investments are
calculated on the specific identification method.
(c) Expenses
All administrative and investment expenses incurred by
the Plan have been paid by the Company.
(d) Use of Estimates
The Plan administrator has made a number of estimates
and assumptions relating to the preparation of these financial
statements in accordance with generally accepted accounting
principles. Actual results could differ from those estimates and
assumptions.
(3) Investments
Prior to January 1, 1997, the custodian of the Plan was
Merrill Lynch. Effective January 1, 1997, Smith Barney Shearson
(now Salomon Smith Barney) assumed the role as custodian for the
Plan. In this capacity, the custodian is to receive and invest
the contributions made by the participants and the employer, the
interest, dividends, and other income earned on investments and to
pay benefits and expenses as provided by the Plan.
The following table presents the fair values of investments
at December 31, 1997 that represent five percent or more of the
Plan's assets:
Balance Fund $ 126,633
Investors Fund 238,849
Vista Fund 246,330
Global Growth Fund 94,314
New Opportunities Fund 381,735
MedPlus Stock 155,892
During 1997, the Plan's investments (including investments
bought, sold, and held during the year) appreciated in value as
follows:
Mutual funds $ 129,024
Common stock 4,516
_________
Net change in fair value $ 133,540
_________
_________
(4) Employer Contributions
At December 31, 1997, there was a receivable from the Company
consisting of the matching and the additional discretionary
contributions for the 1997 Plan Year. The Company elected to make
both these contributions in MedPlus, Inc. Common Stock.
(5) Plan Termination
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
(6) Tax Status
The Internal Revenue Service issued its latest determination
letter on August 2, 1993, which stated that the Plan and its
underlying trust qualify under the applicable provisions of the
Internal Revenue Code and, therefore, are exempt from Federal
income tax. In the opinion of the Plan trustee and the Company,
the Plan and its underlying trust have operated within the terms
of the Plan and remain qualified under the applicable provisions
of the Internal Revenue Cod
<TABLE> MedPlus Inc. 401(k) Plan
<CAPTION>
Statement of Assets
Available for Plan Benefits, with Fund Information
Year ended December 31, 1997
Fund Information
________________________________________________________________________________
<S> Smith Putnam Putnam
Barney Diversi- Putnam Putnam New
Money fied Putnam Invest- Putnam Global Opportu- MedPlus
Market Income Balance tors Vista Growth nities Stock Total
_______ _______ _______ _______ _______ _______ _______ _______ _________
Assets: <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(note 3):
Interest-bearing cash $50,985 - - - - - - - 50,985
Mutual funds - 35,113 126,633 238,849 246,330 94,314 381,735 - 1,122,974
Common stock - - - - - - - 155,892 155,892
_______ _______ _______ _______ _______ _______ _______ _______ _________
Total investments 50,985 35,113 126,633 238,849 246,330 94,314 381,735 155,892 1,329,851
Receivables:
Participant contributions 6,164 461 2,179 4,181 5,657 2,816 5,776 1,811 29,045
Employer contributions
(note 4): - - - - - - - 213,495 213,495
_______ _______ _______ _______ _______ _______ _______ _______ _________
Assets available for plan
benefits $57,149 35,574 128,812 243,030 251,987 97,130 387,511 371,198 1,572,391
_______ _______ _______ _______ _______ _______ _______ _______ _________
_______ _______ _______ _______ _______ _______ _______ _______ _________
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION> MedPlus, Inc. 401(k) Plan
Statement of Assets Available for Plan Benefits, with Fund Information
Year ended December 31, 1996
(Unaudited)
Fund Information
________________________________________________________
Pimco Pimco Pimco
Money U.S. Equity Pimco MedPlus
Market Government Income Target Stock Total
_________ __________ _________ _________ ________ _______
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Interest-bearing cash $ 47,276 - - - - 47,276
Mutual funds - - 196,809 322,005 - 518,814
Government securities - 21,021 - - - 21,021
Common stocks - - - - 48,783 48,783
_________ __________ _________ _________ _________ _______
Total investments 47,276 21,021 196,809 322,005 48,783 635,894
Receivables -
Participant contributions 1,062 1,048 4,954 10,942 784 18,790
_________ __________ _________ _________ _________ _______
Assets available for
plan benefits 48,338 22,069 201,763 332,947 49,567 654,684
_________ __________ _________ _________ _________ _______
_________ __________ _________ _________ _________ _______
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
MedPlus Inc. 401(k) Plan
Statement of Changes in Assets Available for
Plan Benefits, with Fund Information
Year ended December 31, 1997
Merrill Lynch Funds
__________________________________________________________
Pimco
Funds
Money US Equity MedPlus
Market Government Income Target Stock
_________ __________ _________ _________ _________
<S> <C> <C> <C> <C> <C>
Assets available for plan benefits,
December 31, 1996 $ 48,338 22,069 201,763 332,947 49,567
Contributions:
Employer - - - - -
Employee - - - - -
Rollovers from other benefit plans - - - - -
Investment income:
Interest and dividends - - - - -
Net appreciation (depreciation) in
fair value of investments
(note 3) - - - - -
Benefits paid to participants - - - - -
Interfund transfers, net (48,338) (22,069) (201,763) (332,947) (49,567)
_________ __________ _________ _________ _________
Assets available for plan benefits,
December 31, 1997 $ - - - - -
_________ __________ _________ _________ _________
_________ __________ _________ _________ _________
See accompanying notes to financial statements.
</TABLE
</TABLE>
<TABLE> MedPlus Inc. 401(k) Plan
<CAPTION>
Statement of Changes in Assets Available for Plan
Benefits, with Fund Information
Year ended December 31, 1997
Smith Barney Funds
__________________________________________________________________________________
<S> Putnam Putnam Putnam
Funds Diversi- Putnam Putnam New
Money fied Putnam Invest- Putnam Global Opportu- MedPlus
Market Income Balance ors Vista Growth nities Stock Total
_______ _______ _______ _______ _______ _______ _______ ________ ________
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets available for
plan benefits,
December 31, 1996 - - - - - - - - 654,684
Contributions:
Employer - - - - - - - 213,495 213,495
Employee 13,908 11,368 33,177 72,689 106,315 50,129 166,294 77,978 531,858
Rollovers from other
benefit plans 13,482 - 28,555 27,735 40,526 1,626 39,174 29,104 180,202
Investment income:
Interest and dividends 2,707 1,861 6,101 3,271 2,196 6,635 1,848 632 25,251
Net appreciation
(depreciation) in fair
value of investments
(note 3) - 533 8,925 40,176 31,061 (844) 49,173 4,516 133,540
Benefits paid to
participants (31,264) (13,597) (20,124) (36,217) (28,328) (4,306) (26,184) (6,619)(166,639)
Interfund transfers, net 58,316 35,409 72,178 135,376 100,217 43,890 157,206 52,092 -
_______ _______ _______ _______ _______ _______ _______ ________ ________
Assets available for
plan benefits,
December 31, 1997 $57,149 35,574 128,812 243,030 251,987 97,130 387,511 371,198 1,572,391
_______ _______ _______ _______ _______ _______ _______ ________ ________
_______ _______ _______ _______ _______ _______ _______ ________ ________
See accompanying notes to financial statements.
</TABLE>
<TABLE> Schedule 1
<CAPTION>
MedPlus, Inc. 401(k) Plan
Item 27a, Schedule of Assets Held for Investment Purposes
December 31, 1997
Fair
Issuer Description Cost value
___________________________ ________________________________ _________ _________
<S> <C> <C> <C>
Money Market Fund
Smith Barney Money market fund (50,985 units) $ 50,985 50,985
_________ _________
Putnam Mutual Funds
Diversified Income Fund Mutual fund (2,791 units) 34,573 35,113
Balance Fund Mutual fund (7,039 units) 123,798 126,633
Investors Fund Mutual fund (21,250 units) 222,476 238,849
Vista Fund Mutual fund (20,752 units) 235,963 246,330
Global Growth Fund Mutual fund (9,469 units) 106,215 94,314
New Opportunities Fund Mutual fund (7,770 units) 337,364 381,735
_________ _________
Total Putnam Mutual Funds 1,060,389 1,122,974
_________ _________
Common Stock
*MedPlus, Inc. Common stock (21,136 shares) 157,991 155,892
_________ _________
Total Investments $ 1,269,365 1,329,851
_________ _________
*Denotes party-in-interest. _________ _________
</TABLE>
<TABLE> Schedule 2
<CAPTION>
MedPlus, Inc. 401(k) Plan
Item 27d, Schedule of Reportable Transactions
Year ended December 31, 1997
Cost
Identity of Description Purchase Selling of asset Net
party involved of investment price price sold gain
______________________________ _________________ __________ _________ _________ _________
<S> <C> <C> <C> <C> <C>
Purchases
Putnam Diversified Income Fund Mutual fund $ 46,066 - - -
Putnam Balance Fund Mutual fund 139,570 - - -
Putnam Investors Fund Mutual fund 247,894 - - -
Putnam Vista Fund Mutual fund 272,342 - - -
Putnam Global Growth Fund Mutual fund 107,603 - - -
Putnam New Opportunities Fund Mutual fund 343,973 - - -
MedPlus Stock Common stock 165,785 - - -
Smith Barney Money Market Fund Money market fund 902,815 - - -
Sales
Putnam Vista Fund Mutual fund - 39,495 36,379
3,117
Smith Barney Money Market Fund Money market fund - 947,554 947,554 -
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
MEDPLUS, INC 401(K) PLAN
Signature Date
/s/ Amy J. Seltz June 30, 1998
Amy J. Seltz
/s/ Daniel A. Silber June 30, 1998
Daniel A. Silber
Vice President of Finance
and Chief Financial Officer
