UNITED STATES
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 end December 31, 2002
OR
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934 [no fee required]
For the transition period from _________ to ____________ Commission file
number _________
A. Full title of the plan and address of the plan, if different from that of the
issuer named below:
Genesis Health Ventures, Inc. 401(k) Plan for
Collective Bargaining Unit Employees
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Genesis Health Ventures, Inc.
101 East State Street
Kennett Square, PA 19348
(610) 444-6350
Genesis Health Ventures, Inc. 401(k) Plan for Collective Bargaining Unit
Employees Financial Statements, Supplemental Schedule and Exhibits as of
December 31, 2002 and 2001 and for the year ended December 31, 2002.
The following plan financial statements, schedules and reports, have been
prepared in accordance with the financial reporting requirements of ERISA.
Items 1 - 3: Not applicable under ERISA filing.
Item 4: Financial Statements and Exhibits.
GENESIS HEALTH VENTURES, INC.
401(k) Plan for collective bargaining unit employees
Financial Statements and Supplemental Schedule
December 31, 2002
(With Independent Auditors' Report Thereon)
GENESIS HEALTH VENTURES, INC.
401(k) Plan for collective bargaining unit employees
Table of Contents
Page
Independent Auditors' Report 1
Statement of Net Assets Available for Benefits, December 31, 2002 2
Statement of Changes in Net Assets Available for Benefits, Period from July 1, 2002
(inception of plan) through December 31, 2002 3
Notes to Financial Statements 4
Schedule:
1 Schedule H, Line 4i - Schedule of Assets (Held at End of Year), December 31, 2002 9
Independent Auditors' Report
The Pension Committee and the Participants
Genesis Health Ventures, Inc. 401(k) Plan for
Collective Bargaining Unit Employees:
We were engaged to audit the accompanying statement of net assets available for
benefits of the Genesis Health Ventures, Inc. 401(k) Plan for Collective
Bargaining Unit Employees as of December 31, 2002, and the related statement of
changes in net assets available for benefits for the period from July 1, 2002
(inception of plan) through December 31, 2002. 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 conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 out audit provides 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 benefits of the Plan as of
December 31, 2002, and the changes in net assets available for benefits for the
period from July 1, 2002 (inception of plan) through December 31, 2002, in
conformity with accounting principles generally accepted in the United States of
America.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedule of assets (held at end of
year) 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. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit 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.
June 12, 2003
1
GENESIS HEALTH VENTURES, INC.
401(k) PLAN FOR COLLECTIVE BARGAINING UNIT EMPLOYEES
Statement of Net Assets Available for Benefits
December 31, 2002
Investments, at fair value $ 552,043
Participant loans 19,021
Employer contributions receivable 20,398
Participant contributions receivable 12,071
---------
Total assets 603,533
---------
Net assets available for benefits $ 603,533
=========
See accompanying notes to financial statements.
2
GENESIS HEALTH VENTURES, INC.
401(k) PLAN FOR COLLECTIVE BARGAINING UNIT EMPLOYEES
Statement of Changes in Net Assets Available for Benefits
Period from July 1, 2002 (inception of plan) through December 31, 2002
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 5,150
Contributions:
Employer 20,398
Participants 96,124
Net appreciation in fair value of investments 4,246
Transfers from affiliated plans 500,148
---------
Total additions 626,066
---------
Deductions from net assets attributed to:
Benefit payments 21,923
Administrative expenses 610
---------
Total deductions 22,533
---------
Net increase 603,533
Net assets available for benefits:
Beginning of period --
---------
End of period $ 603,533
=========
See accompanying notes to financial statements.
3
Genesis Health Ventures, Inc.
401(k) Plan for Collective Bargaining Unit Employees
Notes to Financial Statements
December 31, 2002
(1) Description of the Plan
The following description of the Genesis Health Ventures, Inc. 401(k)
Plan for Collective Bargaining Unit Employees (the Plan) provides only
general information. Participants should refer to the Plan document for
more complete information.
(a) General
The Plan is a defined contribution savings plan that permits
voluntary employee contributions that are matched, in part, by
Genesis Health Ventures, Inc. (the Company). The Plan commenced on
July 1, 2002 at which time assets of affiliated plans in the
amount of $500,148 were transferred to the Plan. Employees of the
Company covered by collective bargaining agreements that call for
participation in the Plan are eligible for participation when they
have completed 6 consecutive months during which they have been
credited with at least 500 hours of service in their first six
months or if initial eligibility is not met, employees who
complete 12 consecutive months of service during which they have
been credited with at least 1,000 hours of service in their first
year or any calendar year thereafter. The Plan is subject to the
Employee Retirement Income Security Act of 1974 (ERISA).
(b) Contributions
Each eligible employee may elect to participate in the Plan and
make contributions to the Plan through salary deductions in an
amount not less than 1% and not in excess of 50% of such
participant's compensation, as defined in the Plan, in any
calendar year. The Company matches 50% of the participant's
pre-tax contributions up to 1.5% of such participant's
compensation.
Notwithstanding any other provision of the Plan, the total pre-tax
contribution made to the Plan by any participant may not exceed
$11,000 for 2002. In addition, effective in 2002, each eligible
participant who has attained age 50 before the close of the Plan
year is eligible to make catch-up contributions in accordance
with, and subject to the limitations of, Section 414(v) of the
Internal Revenue Code. For 2002, the catch-up contribution
limitation is $1,000.
(c) Participant Accounts
Although Plan assets are collectively invested, records are
maintained for each participant's individual account. Each
participant's account is credited with the participant's
contribution and allocation of the Company's contribution and Plan
earnings (losses). Allocations are based on participant earnings
or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from
the participant's account.
(d) Vesting
Participants are immediately vested in their pre-tax contributions
plus actual earnings and losses thereon. Vesting in the Company's
matching contributions and earnings and losses thereon is based
upon years of continuous service as follows:
4
Genesis Health Ventures, Inc.
401(k) Plan for Collective Bargaining Unit Employees
Notes to Financial Statements
December 31, 2002
Percentage
Years of service vested
------------------ -----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
Years of service for participants is based on date of hire with
the Company.
(e) Payment of Benefits
Normal and deferred retirement benefits, disability benefits, and
vested benefits are distributed as lump-sum or in approximately
equal installments over a period of years not to exceed the life
expectancy of the participant and their designated beneficiary.
Death benefits are paid as a single-sum or in installments over a
period not to exceed five years, pursuant to the participant's
written election on forms provided by the Company.
Nonvested benefits that are subsequently forfeited may be used by
the Company to reduce future matching contributions.
(f) Participant Loans
Employees may borrow a minimum of $1,000 and a maximum of 50% of
their vested balance in the Plan, up to a maximum of $50,000. Such
loans, upon approval by the Company, are generally repaid through
payroll deductions over a period not to exceed five years and bear
interest at a market rate at the date of the loan. Interest rates
range from 4.25% to 9.50% as of December 31, 2002.
(2) Summary of Significant Accounting Policies
(a) Basis of Financial Statement Preparation
The Plan's financial statements are prepared on the accrual basis
of accounting.
(b) Investments
Plan investments are stated at fair value based on their quoted
net asset value. Participant loans are valued at cost which
approximates fair value. Purchases and sales of securities are
recorded on a trade-date basis.
(c) Plan Expenses
Company personnel perform various administrative services for the
Plan, including maintenance of participant records. All Plan
expenses are paid by the Company, on a noncompensatory basis, with
the exception of trustee fees, which are paid for by the Plan.
5
Genesis Health Ventures, Inc.
401(k) Plan for Collective Bargaining Unit Employees
Notes to Financial Statements
December 31, 2002
(d) Benefits to Participants
Benefit payments to participants are recorded upon distribution.
(e) Forfeitures
Forfeitures of nonvested Company contributions are used to offset
such future contributions.
(3) Forfeitures
As of December 31, 2002, there are no forfeiture amounts available for
the reduction of future employer contributions and no nonvested
forfeiture accounts used to reduce employer contributions for 2002.
(4) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, all participants become fully vested in the
Company's matching contributions.
(5) Investments
A participant may direct contributions in any of the following investment
options in increments of 1%:
Federated Capital Preservation Fund invests primarily in guaranteed
investment contracts.
Janus Fund invests primarily in large-cap equity funds.
Janus Adviser Worldwide Fund invests primarily in common stocks of
foreign and domestic companies.
Wachovia Diversified Bond Group Trust Fund invests in full maturity
bonds.
Wachovia Enhanced Stock Market Fund invests in large-cap equity index
funds.
Vanguard Wellington Fund invests in a balance of equities and fixed
income securities.
MFS Capital Opportunities Fund invests in large and mid-cap equity funds.
MFS New Discovery Fund invests in small-cap equity funds.
Dreyfus Mid Cap Index Fund invests in mid-cap equity funds.
AIM Basic Value Fund seeks long-term capital appreciation and invests in
large value funds.
Genesis Health Ventures Stock Fund invests primarily in Company common
stock.
6
Genesis Health Ventures, Inc.
401(k) Plan for Collective Bargaining Unit Employees
Notes to Financial Statements
December 31, 2002
Plan investments as of December 31, 2002 were as follows:
December 31,
2002
------------
Federated Capital Preservation Fund $ 106,710 *
Janus Fund 39,717 *
Janus Worldwide Fund 17,158
Wachovia Diversified Bond Group Trust 54,150 *
Wachovia Enhanced Stock Market Fund 22,981
Vanguard Wellington Fund 283,943 *
MFS Capital Opportunities Fund 26,705
MFS New Discovery Fund 168
AIM Basic Value Fund 45
Genesis Health Ventures, Inc. Stock Fund 466
---------
$ 552,043
=========
*Represents 5% or more of the net assets of the Plan.
During the period from July 1, 2002 through December 31, 2002, the Plan's
investments in Funds and the Genesis Health Ventures, Inc. Stock Fund
(including gains and losses on investments bought and sold, as well as
held during the year) appreciated in value by $4,244 and $2,
respectively.
(6) Income Taxes
A determination letter has not been received for the Plan. The Company
believes that the Plan is designed and being operated in compliance with
the applicable requirements of the Code. Therefore, they believe that the
Plan is qualified and the related trust is tax exempt as of the financial
statement date.
(7) Party-in-Interest Transactions
Plan investments in the Wachovia Diversified Bond Group Trust Fund and
the Wachovia Enhanced Stock Market Fund are shares of funds managed by
Wachovia, the trustee. These transactions qualify as party-in-interest
transactions.
The Plan incurred $610 of administrative fees for Wachovia's trustee and
record-keeping services. These transactions qualify as party-in-interest
transactions.
Plan investments in the Genesis Health Ventures, Inc. Stock Fund
primarily include shares of the plan sponsor's publicly traded common
stock. These transactions qualify as party-in-interest transactions.
7
Genesis Health Ventures, Inc.
401(k) Plan for Collective Bargaining Unit Employees
Notes to Financial Statements
December 31, 2002
(8) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits as
of December 31, 2002, from the financial statements to the Form 5500:
Net assets available for benefits per the financial statements $ 603,533
Employer and participant receivables (32,469)
---------
Net assets available for benefits per the Form 5500 $ 571,064
=========
8
Schedule 1
GENESIS HEALTH VENTURES, INC.
401(k) PLAN FOR COLLECTIVE BARGAINING UNIT EMPLOYEES
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
Description of Shares or Current
Identity of issue investments face amount value
-------------------------------------------------------- --------------------- ------------------- -------------------
Federated Capital Preservation Fund Fund 99,841 $106,710
Janus Fund Fund 75,834 39,717
Janus Worldwide Fund Fund 23,472 17,158
Wachovia Diversified Bond Group Trust * Fund 47,541 54,150
Wachovia Enhanced Stock Market Fund * Fund 33,831 22,981
Vanguard Wellington Fund Fund 311,101 283,943
MFS Capital Opportunities Fund Fund 36,968 26,705
MFS New Discovery Fund Fund 208 168
AIM Basic Value Fund Fund 97 45
Genesis Health Ventures, Inc. Stock Fund* Stock Fund 485 466
Participant Loans (interest rates range
from 4.25% to 9.5%)* 19,021
--------
$571,064
========
*Party-in-interest transactions.
See accompanying independent auditors' report.
9
SIGNATURES
The Plan: Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other person who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereto duly authorized.
GENESIS HEALTH VENTURES, INC. 401(k) PLAN FOR COLLECTIVE BARGAINING UNIT
EMPLOYEES
(Name of Plan)
By: /s/ James W. Tabak
-------------------------------
James W. Tabak, Sr. Vice President,
Human Resources
Date: June 30, 2003
10
EXHIBIT INDEX
Item
----
23 Consent of Independent Auditors
99 Certificate of James W. Tabak, Senior Vice President, Human Resources
of the Company dated June 30, 2003 pursuant to 18 U.S.C. Section 1350.
11