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 January 31, 2000
____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. 401(k) Plan
Financial Statements and Schedules
December 31, 1999 and 1998
With Independent Auditors' Report Thereon
MedPlus, Inc. 401(k) Plan
December 31, 1999 and 1998
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for
Plan Benefits - December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available
for Plan Benefits - for the years ended
December 31, 1999 and 1998 3
Notes to Financial Statements 4
Schedule
1 Schedule of Assets Held for Investment
Purposes - December 31, 1999 9
Independent Auditors' Report
The Trustees
MedPlus, Inc. 401(k) Plan
We have audited the accompanying statements of net assets
available for plan benefits of the MedPlus, Inc. 401(k) 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 the MedPlus, Inc. 401(k) 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 performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
schedule of Assets Held for Investment Purposes is presented for
the purpose of additional analysis and is not a required part of
the basic financial statements, but is 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 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 1999 financial
statements taken as a whole.
/s/ KPMG Peat Marwick LLP
June 9, 2000
MedPlus Inc. 401(k) Plan
Statements of Net Assets Available for Plan Benefits
Years ended December 31, 1999 and 1998
1999 1998
___________ ___________
Assets:
Investments, at fair value (note 3):
Interest-bearing cash $ 58,600 59,047
Mutual funds 1,903,005 1,416,130
Common stock 581,405 121,639
Participant loans 6,978 2,728
___________ ___________
Total investments 2,549,988 1,599,544
Receivables:
Participant contributions 9,393 25,536
Employer contributions (note 4): 18,045 23,633
___________ ___________
Total receivables 27,438 49,169
___________ ___________
Total assets 2,577,426 1,648,713
Liabilities:
Due to custodian - 8,595
___________ ___________
Total liabilities - 8,595
___________ ___________
Net assets available for plan benefits, end of year $2,577,426 1,640,118
=========== ===========
See accompanying notes to financial statements.
MedPlus Inc. 401(k) Plan
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 1999 and 1998
1999 1998
___________ ___________
Additions to net assets attributed to:
Contributions:
Employee $ 422,604 518,538
Employer 18,045 23,633
Rollover contributions 7,196 31,500
___________ ___________
Total contributions 447,845 573,671
Investment income (loss):
Net appreciation (depreciation) in
fair value of investments (note 3) 959,893 (19,974)
Interest and dividends 18,008 12,016
___________ ___________
Total investment income (loss) 977,901 (7,958)
___________ ___________
Total additions 1,425,746 565,713
___________ ___________
Deductions from net assets attributed to:
Benefit payments 488,438 497,956
Administrative expenses - 30
___________ ___________
Total deductions 488,438 497,986
___________ ___________
Net increase in plan net assets 937,308 67,727
Net assets available for plan benefits:
Beginning of year 1,640,118 1,572,391
___________ ___________
End of year $2,577,426 1,640,118
=========== ===========
See accompanying notes to financial statements.
MedPlus, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 1999 and 1998
(1) Description of Plan
The following description of the MedPlus, Inc. 401(k) 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 employees of
MedPlus, Inc. (The Company) who have reached the age of 21. The
Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA).
(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 percentage 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.
Effective March 1, 2000, participants may, by written notice to
the Administrator, increase or decrease his or her before-tax
contribution as of the first day of any calendar month. Any such
increase or decrease shall be effective as of the first day of the
calendar month following the date on which the written notice is
given.
(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
investment of funds allocated to their accounts. Effective
January 1, 2000, transactional activity affecting the MedPlus
Stock Fund will be recorded on a per share basis.
(d) Vesting
Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Effective January 1,
1999, the plan was amended to allow participants to become 25%
vested in Company contributions after one year of service.
Thereafter, participants become vested at a rate of 25% per year
of service and become fully vested after four years of service.
(e) Participant Loans
Participants may borrow from their accounts not less than $1,000
and not more than 50% of their vested balance, not to exceed
$50,000, 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.
A loan which is granted or renewed may not provide for a period of
repayment beyond a participant's normal retirement date. 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.
(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.
(g) Forfeitures
Forfeitures of Company contributions by terminated participants
were used to reduce Company contributions. As of December 31,
1999, forfeitures of $18,242 were 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:
- - 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
Investments in the money market account consist of an interest
bearing cash account, 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 in
1999 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.
(e) Participant-Directed Investments
In September 1999 the American Institute of Certified Public
Accountants issued Statement of Position 99-3, Accounting for and
Reporting of Certain Defined Contribution Plan Investments and
Other Disclosure Matters (SOP 99-3). SOP 99-3 simplifies the
disclosure for certain investments and is effective for plan years
ending after December 15, 1999. The Plan has adopted SOP 99-3 for
the Plan year ending December 31, 1999, and as such, the 1998
financial statements have been reclassified to eliminate the
participant-directed fund investment program disclosure.
(3) Investments
Salomon Smith Barney serves 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, 1999 and 1998 that represent five percent or more of
the Plan's assets:
1999 1998
___________ __________
Balance Fund $ 173,312 118,895
Investors Fund 486,195 365,591
Vista Fund 282,214 269,476
Global Growth Fund 241,493 140,637
New Opportunities Fund 664,816 469,221
MedPlus Stock 581,405 121,639
During 1999 and 1998, the Plan's investments (including
investments bought, sold, and held during the year) appreciated
(depreciated) in value as follows:
1999 1998
___________ __________
Mutual funds $ 563,641 266,337
Common stock 396,252 (286,311)
___________ __________
Net change in fair value $ 959,893 (19,974)
=========== ==========
(4) Employer Contributions
At December 31, 1999 and 1998, employer contributions receivable
consisted of the matching contribution reduced by forfeitures of
$18,242 and $17,427, respectively. The Company elected to make the
contributions in MedPlus, Inc. common stock. The Company did not
elect to make the additional discretionary contribution for the
1999 and 1998 Plan years.
(5) Plan Termination
Although it is currently not the Company's intent, 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 January 26, 2000, 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 and continue to
operate within the terms of the Plan and remain qualified under
the applicable provisions of the Internal Revenue Code.
(7) Related Party Transactions
For the Plan year ended 1999, the assets of MedPlus, Inc. and
DiaLogos, Inc., a majority owned subsidiary of the Company, were
held by the custodian in one trust to minimize administrative
costs and streamline operational efficiencies for each plan. The
plan administrator maintained separate records for each of the
Plans. In March 2000, the Company divested its majority interest
in DiaLogos. As a result, the DiaLogos Plan assets totaling
approximately $118,000 were transferred from the trust subsequent
to the Plan's year-end. Although the assets of DiaLogos were
transferred from the trust, this transaction is not expected to
have any material effect on the assets of the Plan or future
expenses for the operation of the Plan.
Schedule 1
MedPlus, Inc. 401(k) Plan
Schedule of Assets Held for Investment Purposes
December 31, 1999
Issuer Fair value
Money Market Fund
________________________
* Smith Barney $ 58,600
Putnam Mutual Funds
________________________
Diversified Income Fund 54,975
Balance Fund 173,312
Investors Fund 486,195
Vista Fund 282,214
Global Growth Fund 241,493
New Opportunities Fund 664,816
Total Putnam Mutual Funds 1,903,005
Common Stock
________________________
* MedPlus, Inc. 581,405
* Participant loans - 1 loan to participant at 9.75% 6,978
Total Investments $2,549,988
* Denotes party-in-interest.
See accompanying independent auditors' report.
Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Administrators have duly caused this annual report
to be signed on behalf of the undersigned hereunto duly
authorized.
MEDPLUS, INC.
401(k) PLAN
By: /s/Daniel A. Silber Date: June 27, 2000
-------------------
Daniel A. Silber
By: /s/Amy Seltz, Trustee Date: June 27, 2000
---------------------
Amy Seltz
Independent Auditors' Consent
The Trustees
MedPlus, Inc. 401(k) Plan
We consent to incorporation by reference to the Registration
Statement on Form S-8 of MedPlus, Inc. of our report dated June 9,
2000, related to the statements of net assets available for
benefits of the MedPlus, Inc. 401(k) Plan as of December 31, 1999
and 1998, and the related statements of changes in net assets
available for benefits for the years then ended, which report
appears in the December 31, 1999 annual report on Form 11-K of the
MedPlus, Inc. 401(k) Plan.
/s/ KPMG LLP
Cincinnati, Ohio
June 9, 2000