-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UQRnyLeQHYoTNWAleNTRN/ImU0yX+za3ymA70SXVJUjXZhO6sacGDr/TQA2F3UZJ 2eX/0LvwWIJQjA/M7pHLoQ== 0000052234-03-000012.txt : 20030331 0000052234-03-000012.hdr.sgml : 20030331 20030331172249 ACCESSION NUMBER: 0000052234-03-000012 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINMILL & CO INC CENTRAL INDEX KEY: 0000052234 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [6282] IRS NUMBER: 131897916 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-09667 FILM NUMBER: 03632095 BUSINESS ADDRESS: STREET 1: 11 HANOVER SQ CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2127850900 MAIL ADDRESS: STREET 1: 11 HANOVER SQ CITY: NEW YORK STATE: NY ZIP: 10005 FORMER COMPANY: FORMER CONFORMED NAME: BULL & BEAR GROUP INC DATE OF NAME CHANGE: 19920703 10KSB 1 form10ksb.txt 2002 ANNUAL REPORT with the Securities and Exchange Commission on March 31, 2003 ------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-KSB (Mark One) X Annual Report Pursuant to Section 13 or 15(d) of the ------- Securities Exchange Act of 1934 [Fee Required] For the fiscal year ended December 31, 2002 or ------- Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the Transition Period From ___________ to ___________ Commission File Number 0-9667 WINMILL & CO. INCORPORATED, (Exact name of registrant as specified in its charter) Delaware 13-1897916 (State of incorporation) (I.R.S. Employer Identification No.) 11 Hanover Square, New York, New York 10005 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 785-0900 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered - ------------------- ----------------------------------------- None None Securities registered pursuant to Section 12(g) of the Act: Class A Common Stock, Par Value $.01 Per Share Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part IV of this Form 10-KSB or any amendment to this Form 10-KSB. [ ] No voting stock was held by non-affiliates of the registrant as of March 15, 2003. The number of shares outstanding of each of the registrant's classes of common stock, as of March 15, 2003: Class A Non-Voting Common Stock, par value $.01 per share - 1,588,820 shares Class B Voting Common Stock, par value $.01 per share - 20,000 PART I Item Page 1. Business 1 2. Properties 4 3. Legal Proceedings 4 PART II 4. Market for Company's Common Equity and Related Stockholder Matters 5 PART III 5. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 6. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 7 7. Financial Statements and Supplementary Data 8 PART IV 8. Directors and Executive Officers 23 9. Executive Compensation 25 10. Security Ownership of Certain Beneficial Owners and Management 31 11. Certain Relationships and Related Transactions 32 PART V 12. Exhibits, Consolidated Financial Statements and Schedules, and Reports on Form 8-K 33 13. Controls and Procedures 36 -5- PART I Item 1. Business Winmill & Co. Incorporated, a Delaware corporation (the "Company"), is a holding company with three principal subsidiaries: CEF Advisers, Inc., ("CEF"), Investor Service Center, Inc. ("ISC") and Midas Management Corporation ("MMC"). MMC and CEF act as investment managers to open-end and closed-end management investment companies (the "Funds") registered under the Investment Company Act of 1940 (the "Act"). The open-end Funds are Dollar Reserves, Inc., Midas Fund, Inc., and Midas Special Equities Fund, Inc. The closed-end funds are Global Income Fund, Inc. and Internet Growth Fund, Inc. CEF acted as investment manager of Bexil Corporation ("Bexil") and Tuxis Corporation ("Tuxis") until July 31, 2001 and November 30, 2001, respectively, when the investment management agreements with CEF were terminated. Commencing August 1, 2001, Bexil's officers (who are substantially identical to those of CEF) assumed the internal management of Bexil's affairs, including portfolio management, subject to the oversight and final direction of the Board of Directors of Bexil. Commencing December 1, 2001, the officers of Tuxis (who are substantially identical to those of CEF) assumed the internal management of Tuxis' affairs, including portfolio management, subject to the oversight and final direction of the Board of Directors of Tuxis. Compensation of Bexil and Tuxis personnel, initially set in the aggregate amount of $200,000 each per year, may be changed from time to time at the discretion of the Board of Directors of each of Bexil and Tuxis. This amount was increased to $365,000 per year for Bexil effective January 1, 2003 and to $300,000 per year for Tuxis effective October 2, 2002. Bexil and Tuxis are paying compensation directly to certain officers whose compensation from the Company was partly reduced, reflecting the increased time such officers spend on the business of Bexil and Tuxis. As of December 31, 2002, the Company owned approximately 25% and 19% of the outstanding shares of Bexil and Tuxis, respectively. Bexil and Tuxis have received shareholder approval to change from registered investment companies to operating companies. Bexil filed in 2002 an application with the SEC to terminate its registration as an investment company and is awaiting the decision from the SEC. Tuxis anticipates filing in 2003 an application with the SEC to terminate its registration as an investment company. In January 2002, Bexil began operating a business through a 50% interest in a third party claims administrator. ISC was organized in 1985 and is registered with the SEC as a broker/dealer and is a member of the NASD. ISC acts as the principal distributor for the open-end Funds and engages in proprietary securities trading. The Company has granted certain of the Funds, Tuxis, Bexil and its subsidiaries a non-exclusive license to use certain service marks owned by the Company, under certain terms and conditions on a royalty free basis. Such license may be withdrawn from a Fund in the event the investment manager of the Fund is not a subsidiary of the Company or in other cases, at the discretion of the Company. Investment Management and Distribution Business The Company is engaged, through its subsidiaries, in the business of managing investment companies registered under the Act. The Funds and their respective net assets as of December 31, 2002 were approximately as follows: Dollar Reserves, Inc. $ 20,969,600 Global Income Fund, Inc. 27,588,500 Internet Growth Fund, Inc. 6,731,300 Midas Fund, Inc. 54,788,700 Midas Special Equities Fund, Inc. 18,884,100 --------------- Total Net Assets $ 128,962,200 =============== The fund management industry along with the entire financial services sector of the economy has been rapidly changing to meet the increasing needs of investors. Competition for management of financial resources has increased as banks, insurance companies and broker/dealers have introduced products and services traditionally offered by independent fund management companies. There are also many fund management groups with substantially more resources than the Company. While the Company's business is not seasonal, it is affected by the financial markets, which in turn, are dependent upon current and future economic conditions. Drastic material declines in the securities markets can have a significant effect on the Company's business. Volatile stock markets may affect management and distribution fees earned by the Company's subsidiaries. If the market value of securities owned by the Funds declines, assets under management will decline and shareholder redemptions may occur, either by transfer out of the equity Funds and into the money market Fund, Dollar Reserves, which has lower management and distribution fee rates than the equity Funds, or by redemptions out of the Funds entirely. Lower asset levels in the Funds may also cause or increase reimbursements to the Funds pursuant to the expense limitations described below. In general, investment management services are rendered to the Funds pursuant to written contractual agreements. Such agreements relate to the general management of the affairs of each Fund, in addition to supervising the acquisition and sale of each Fund's portfolio investments. As provided in the agreements, CEF and MMC may receive management fees ranging from 1.0% to 0.5% (and generally declining thereafter on higher net asset levels) per annum of the Funds' average daily or average weekly net assets payable monthly. The Act requires that such contractual agreements be initially approved by the Funds' Board of Directors, including a majority of all of the directors who are not "interested persons" (as defined in the Act), and by the vote of a majority of the outstanding shares of the Fund (as defined in the Act). Agreements, if approved, may be for a term of up to two years, and thereafter their continuance must be approved at least annually by a majority of the directors of the Fund, including a majority of those directors of the Fund who are not "interested persons", or by such a vote of "disinterested" directors and the vote of a majority of the outstanding shares of the Fund. In addition, all such agreements are subject to termination on 60 days' notice by majority vote of the Board of Directors or the shareholders and are subject to automatic termination in the event of assignment. Effective July 31, 2001, Bexil's officers assumed the internal management of Bexil's affairs, including portfolio management. Effective November 30, 2001, Tuxis' officers assumed the internal management of Tuxis' affairs, including portfolio management. Depending on the assets of the Fund involved and other factors, the termination of any agreements for investment management services between any of the Funds, CEF, and MMC or the termination of the relationship of the Company with the management of Bexil and Tuxis may have a serious adverse impact upon the Company. Under the investment management contracts, CEF and MMC are required to reimburse the Funds for certain expenses to the extent that such expenses exceed limitations prescribed by any state in which shares of the Funds are qualified for sale, although currently the Funds are not subject to any such limits. In addition, from time to time CEF and MMC may waive or reimburse management fees to increase a Fund's performance. Each of the open-end Funds has adopted a plan of distribution pursuant to Rule 12b-1 under the Act (the "Plan"). Pursuant to the Plans, ISC may receive as compensation amounts ranging from one-quarter of one percent to one percent per annum of the Funds' average daily net assets for distribution and service activities. The service fee portion is intended to cover services provided to shareholders in the Funds and the maintenance of shareholder accounts. The distribution fee portion is to cover all other activities and expenses primarily intended to result in the sale of the Funds' shares. The Act requires that a plan of distribution be initially approved by the Fund's Board of Directors, including a majority of the directors who are not "interested persons" and who have no financial interest in the Plan, and by the vote of a majority of the outstanding shares of the Fund. If approved, a plan of distribution may be for a term of one year, and thereafter it must be approved at least annually by the entire Board of Directors and by a majority of the "disinterested" directors. In addition, all plans of distribution are subject to termination at any time by majority vote of the disinterested directors or shareholders. CEF and MMC are registered with the SEC as investment advisers under the Investment Advisers Act of 1940. ISC is registered with the SEC as a broker/dealer under the Securities Exchange Act of 1934 and is a member of the NASD. The Funds, Tuxis and Bexil are registered with the SEC under the Act. The activities of CEF and MMC and of the Funds are subject to regulation under Federal and state securities laws. The provisions of these laws, including those relating to the contractual arrangements between the Funds and their investment managers, are primarily designed to protect the shareholders of the Funds, Tuxis and Bexil, and not the shareholders of the Company. Forward-Looking Information Information or statements provided by or on behalf of the Company from time to time, including those within this Form 10-KSB Annual Report, may contain certain "forward-looking information", including information relating to anticipated growth in revenues or earnings per share, anticipated changes in the amount and composition of assets under management, anticipated expense levels, and expectations regarding financial market conditions. The Company cautions readers that any forward-looking information provided by or on behalf of the Company is not a guarantee of future performance and that actual results may differ materially from those in forward-looking information as a result of various factors, including but not limited to those discussed below. Further, such forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. The Company's future revenues may fluctuate due to factors such as: the total value and composition of assets under management and related cash inflows or outflows in mutual funds; fluctuations in the financial markets resulting in appreciation or depreciation of assets under management; the relative investment performance of the Company's sponsored investment products as compared to competing products and market indices; the expense ratios and fees of the Company's sponsored products and services; investor sentiment and investor confidence in mutual funds; the ability of the Company to maintain investment management fees at current levels; competitive conditions in the mutual funds industry; the introduction of new mutual funds and investment products; the ability of the Company to contract with the Funds for payment for services offered to the Funds and Fund shareholders; the continuation of trends in the retirement plan marketplace favoring defined contribution plans and participant-directed investments; and the amount and timing of income from the Company's proprietary securities trading portfolio. The Company's future operating results are also dependent upon the level of operating expenses, which are subject to fluctuation for the following or other reasons: changes in the level of advertising expenses in response to market conditions or other factors; the level of expenses assumed by the Company for the Funds as a result of expense reimbursement plan or waiver of expenses to increase a Fund's performance; variations in the level of compensation expense incurred by the Company, including performance-based compensation based on the Company's financial results, as well as changes in response to the size of the total employee population, competitive factors, or other reasons; expenses and capital costs, including depreciation, amortization and other non-cash charges, incurred by the Company to maintain its administrative and service infrastructure; and unanticipated costs that may be incurred by the Company from time to time to protect investor accounts and client goodwill. The Company's operating results will also depend on the results of its holdings in Bexil and Tuxis. The Company's revenues are substantially dependent on revenues from the Funds, which could be adversely affected if the independent directors of one or more of the Funds determined to terminate or renegotiate the terms of one or more investment management agreements. The Company's business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on the Company's business and results of operations, including but not limited to effects on the level of costs incurred by the Company and effects on investor interest in mutual funds in general or in particular classes of mutual funds. Item 2. Properties The principal office of the Company is located at 11 Hanover Square, New York, New York 10005. For the office of 3,800 rentable square feet, the rent is approximately $96,000 per annum plus $12,800 per annum for electricity. The lease expires on December 31, 2003. Item 3. Legal Proceedings From time to time, the Company and/or its subsidiaries are threatened or named as defendants in litigation arising in the normal course of business. As of December 31, 2002, neither the Company nor any of its subsidiaries was involved in any other litigation that, in the opinion of management, would have a material adverse impact on the consolidated financial statements. -11- Park II Item 4. Market for the Company's Common Equity and Related Stockholder Matters The Company's Class A Common Stock (non-voting) trades on the Nasdaq SmallCap Market tier of the Nasdaq Stock Market under the symbol WNMLA. The Company's Class B Common Stock (voting) has no public trading market. There are approximately 219 holders of record of Class A Common Stock and 1 holder of Class B Common Stock as of December 31, 2002. In addition, there are an indeterminate number of beneficial owners of Class A Common Stock that are held in "street name." No dividends have been paid on either class of Common Stock in the past five years and the Company does not expect to pay any such dividends in the foreseeable future. The high and low sales prices of the Class A Common Stock during each quarterly period over the last two years were as follows: 2002 2001 -------------------- ------------------- High Low High Low First Quarter $1.6700 $1.4800 $1.6250 $1.1563 Second Quarter $1.8500 $1.4200 $1.8900 $1.3000 Third Quarter $1.7000 $1.4600 $1.9400 $1.5500 Fourth Quarter $1.7500 $1.4200 $1.7000 $1.3500 Equity Compensation Plan Information
Number of Number of Class A Weighted- Class A shares shares to be issued average price remaining available upon exercise of of outstanding for future issuance outstanding options options, warrants under equity warrants and rights and rights compensation plans Equity Compensation Plans approved by security holders 281,500 $ 1.59 33,500 Equity Compensation Plans not approved by security holders - - - --------- ------ -------- Total 281,500 $ 1.59 33,500 ========= ====== ========
Item 5. Management's Discussion and Analysis of Financial Condition and Results of Operations 2002 Compared to 2001 Declines in the securities markets can have a significant effect on the Company's business. Volatile stock markets may affect management and distribution fees earned by the Company's subsidiaries. If the market value of securities owned by the Funds declines, shareholder redemptions may occur, either by transfer out of the equity Funds and into the money market fund, which has lower management and distribution fees rates than the equity Funds, or by transfer out of the Funds entirely. Lower net asset levels in the Funds may also cause or increase reimbursements to the Funds pursuant to expense limitations as described in Note 9 of the financial statements. Total revenues decreased $99,638 or 5% which was primarily due to the decrease in management, distribution and other fees, consulting fee and dividends and interest income offset by an increase in realized and unrealized gains on investments. Management, distribution and other fees decreased $289,531 or 16% due to lower net assets in the Funds and the termination of the investment management agreement with Bexil and Tuxis effective July 31, 2001 and November 30, 2001 respectively. Average net assets under management were less in the twelve months ended December 31, 2002 verses December 31, 2001. Total net assets under management were approximately $116 million at December 31, 2001, $125 million at March 31, 2002, $123 million at June 30, 2002, $129 million at September 30, 2002 and $129 million at December 31, 2002. Net realized and unrealized gains on proprietary securities trading were $161,794. Consulting fees decreased $246,923 which was due to the termination of the Company's consulting agreement with Bull & Bear Securities, Inc. ("BBSI") during the second quarter of 2001. Total expenses decreased $600,182 or 27% over this period of last year. General and administrative expenses decreased $143,924 or 16% due to lower employee costs. Marketing expense decreased $225,579 or 31% due to lower fulfillment and printing costs. Expense reimbursement to the Funds decreased $104,659 or 37%. Professional fees decreased $89,289 or 49%. Net income for the period was $137,326 or $.08 per share on a diluted basis as compared to net loss of $199,065 or $(.12) per share on a diluted basis for last year. 2001 Compared to 2000 Declines in the securities markets can have a significant effect on the Company's business. Volatile stock markets may affect management and distribution fees earned by the Company's subsidiaries. If the market value of securities owned by the Funds declines, shareholder redemptions may occur, either by transfer out of the equity Funds and into the money market fund, which has lower management and distribution fees rates than the equity Funds, or by transfer out of the Funds entirely. Lower net asset levels in the Funds may also cause or increase reimbursements to the Funds pursuant to expense limitations as described in Note 9 of the financial statements. Total revenues decreased $2,253,399 or 54% which was primarily due to the decrease in management, distribution and other fees, net realized and unrealized gains on proprietary securities trading and real estate, rental income and dividends and interest income. Management, distribution and other fees decreased $526,278 or 23% due to lower net assets in the Funds and the termination of the investment management agreement with Bexil and Tuxis effective July 31, 2001 and November 30, 2001 respectively. Net assets under management were approximately $181 million at December 31, 2000, $172 million at March 31, 2001 $140 million at June 30, 2001, $128 million at September 30, 2001 and $116 million at December 31, 2001. Net realized and unrealized losses on proprietary securities trading were $360,418. Consulting fees increased $46,923 which was primarily due to the termination and settlement of the Company's consulting agreement with BBSI during the second quarter of 2001. Rental income declined to $0 as compared to $250,941 due to the sale of the real estate held for investment in December 2000 for a pre-tax profit of $901,046. Total expenses decreased $977,041 or 31% over this period of last year, as a result of decreases in general and administrative expense of $373,560 or 29%, marketing expenses of $230,925 or 24%, and amortization and depreciation expense of $32,865 or 26%. General and administrative expenses decreased due to lower employee costs, in part due to the assumption by Bexil, effective August 1, 2001, of compensation expense of certain Company personnel at the annual rate of $200,000. Marketing expense decreased due to lower fulfillment and printing costs. Expense reimbursement to the Funds decreased $3,180 or 1%. Professional fees decreased $11,511 or 6%. Net loss for the period was $199,065 or $(.12) per share on a diluted basis as compared to net income of $508,314 or $.31 per share on a diluted basis for last year. Liquidity and Capital Resources The following table reflects the Company's consolidated working capital, total assets, long-term debt and shareholders' equity as of the dates indicated. December 31, 2002 2001 ---- ---- Working Capital $6,768,292 $7,063,441 Total Assets $8,106,436 $8,036,785 Long-Term Debt $ - $ - Shareholders' Equity $7,889,020 $7,748,846 For the year ended 2002, working capital decreased $295,149 primarily due to a reduction in cash from the purchase of additional investments. Total assets and shareholders' equity increased by $69,651 and $140,174. Total assets and shareholders' equity increased primarily due to net income recorded for the year. For the year ended 2001, working capital, total assets and shareholders' equity decreased $69,445, $340,437 and $212,900, respectively. Working capital, total assets and shareholders' equity decreased primarily due to the realized and unrealized losses from proprietary securities trading. Management knows of no contingencies that are reasonably likely to result in a material decrease in the Company's liquidity or that are likely to adversely affect the Company's capital resources. This includes the restrictions placed on the transfer of funds to ISC as a result of its regulatory net capital requirements. At December 31, 2002, the amount subject to these restrictions was $100,000 or 1.2% of total assets. Effects of Inflation and Changing Prices Since the Company derives revenue primarily from investment management and distribution services from the Funds and proprietary securities trading, it is not possible for it to discuss or predict with accuracy the impact of inflation and changing prices on its revenues from continuing operations. Item 6. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure There were no changes in or disagreements with the Company's accountants on accounting and financial disclosure matters during the two years ended December 31, 2002. Item 7. Financial Statements and Supplementary Data Financial Statements required by Regulation S-X and Supplementary Financial Information required by Regulation S-B are presented herein. FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES TABLE OF CONTENTS Page Report of Independent Certified Public Accountants 9 Consolidated Balance Sheet, December 31, 2002 10 Consolidated Statements of Income, Years ended December 31, 2002 and 2001 11 Consolidated Statements of Changes in Shareholders' Equity, Years ended December 31, 2002 and 2001 12 Consolidated Statements of Cash Flows, Years ended December 31, 2002 and 2001 13 Notes to Consolidated Financial Statements 15 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors and Shareholders of Winmill & Co. Incorporated We have audited the accompanying consolidated balance sheet of Winmill & Co. Incorporated and subsidiaries as of December 31, 2002, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for each of the two years in the period ended December 31, 2002. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits 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 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 consolidated financial position of Winmill & Co. Incorporated and subsidiaries at December 31, 2002, and the consolidated results of their operations and their consolidated cash flows for each of the two years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. TAIT, WELLER & BAKER Philadelphia, Pennsylvania February 7, 2003
WINMILL & CO. INCORPORATED CONSOLIDATED BALANCE SHEET December 31, 2002 ASSETS Current Assets: Cash and cash equivalents $ 1,254,528 Marketable securities (Note 2) 5,287,080 Management, distribution and other fees receivable 114,216 Dividends, interest and other receivables 56,475 Prepaid expenses and other current assets 100,115 Refundable income taxes 173,294 ------------ Total Current Assets 6,985,708 ------------ Equipment, furniture and fixtures, net 58,502 Intangible assets, net 635,795 Deferred income taxes (Note 8) 22,000 Other assets (Note 10) 404,431 ------------ 1,120,728 Total Assets $ 8,106,436 ============
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 12,585 Accrued professional fees 99,024 Accrued payroll and other related costs 25,000 Accrued other expenses 24,504 Other current liabilities 56,303 ------------ Total Current Liabilities 217,416 ------------ Shareholders' Equity (Notes 2, 4, 5, and 6) Common Stock, $.01 par value Class A, 10,000,000 shares authorized; 1,628,320 shares issued 16,283 Class B, 20,000 shares authorized; 20,000 shares issued and outstanding 200 Additional paid-in capital 6,807,985 Retained earnings 1,649,878 Notes receivable for common stock issued (527,041) Accumulated other comprehensive loss (177) ------------ 7,947,128 Less treasury stock (58,108) ------------ Total Shareholders' Equity 7,889,020 ------------ Total Liabilities and Shareholders' Equity $ 8,106,436 ============
See accompanying notes to consolidated financial statements.
WINMILL & CO. INCORPORATED CONSOLIDATED STATEMENTS OF INCOME Years Ended December 31, 2002 2001 ---- ---- Revenues: Management, distribution and other fees $ 1,469,731 $ 1,759,262 Consulting fee - 246,923 Realized and unrealized gains (losses) from investments 161,794 (360,418) Dividends, interest and other 179,243 264,639 ------------ ------------ 1,810,768 1,910,406 ------------ ------------ Expenses: General and administrative 772,827 916,751 Marketing 493,405 718,984 Expense reimbursements to the Funds (Note 11) 179,716 284,375 Professional fees 92,035 181,324 Depreciation and amortization 57,159 93,890 ------------ ------------ 1,595,142 2,195,324 ------------ ------------ Income (loss) before income taxes 215,626 (284,918) Income taxes (benefit) (Note 8) 78,300 (85,853) ------------ ------------ Net Income (Loss) $ 137,326 $ (199,065) ============ ============ Per Share Data: Basic Net income (loss) $ .08 $(.12) ====== ===== Diluted Net income (loss) $ .08 $(.12) ====== ===== Average Shares Outstanding: Basic 1,638,403 1,653,343 ========= ========= Diluted 1,649,129 1,653,343 ========= =========
See accompanying notes to consolidated financial statements. See accompanying notes to consolidated financial statements. WINMILL & CO. INCORPORATED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Years Ended December 31, 2002 and 2001
Number of Shares Amount ---------------- ------------------------------------------------------------------------------------- Notes Receivable For Accumulated Additional Common Retained Treasury Other Class A Class B Class A Class B Paid-In Stock Earnings Stock Comprehensive Common Common Common Common Capital Issued (Deficit) Class A Income --------- ------- ------- ------- ---------- ---------- ---------- --------- ------------- Balance, December 31, 2000 1,635,017 20,000 $16,351 $200 $6,872,454 $(603,675) $1,711,617 $ - $(35,201) Net loss - - - - - - (199,065) - - Other comprehensive income Unrealized gains on marketable securities - - - - - - - - 44,763 -------- ------- ------- ---- ----------- --------- ---------- -------- -------- Comprehensive income Redemption of stock (6,697) - (68) - (64,469) - - - - Repayment of notes receivable - - - - - 5,939 - - - -------- ------ ------- ---- ----------- --------- ---------- -------- -------- Balance, December 31, 2001 1,628,320 20,000 16,283 200 6,807,985 (597,736) 1,512,552 - 9,562 Net income - - - - - - 137,326 - - Other comprehensive income Unrealized losses on investments - - - - - - - - (9,739) ------- ------ ------ ---- ---------- -------- ---------- -------- -------- Comprehensive income Repayment of notes receivable - - - - - 70,695 - - - Purchase of treasury stock (39,500) - - - - - - (58,108) - -------- ------ ------ ---- ---------- -------- ---------- -------- -------- Balance, December 31, 2002 1,588,820 20,000 $16,283 $200 $6,807,985 $(527,041) $1,649,878 $(58,108) $(177) ========= ====== ======= ==== ========== ========= ========== ======== ======== Total Shareholders' Equity ------------- Balance, December 31, 2000 $ 7,961,746 Net loss (199,065) Other comprehensive income Unrealized gains on marketable securities 44,763 -------- Comprehensive income (154,302) --------- Redemption of stock (64,537) Repayment of notes receivable 5,939 -------- Balance, December 31, 2001 7,748,846 Net income 137,326 Other comprehensive income Unrealized losses on investments (9,739) -------- Comprehensive income 127,587 -------- Repayment of notes receivable 70,695 Purchase of treasury stock (58,108) -------- Balance, December 31, 2002 $ 7,889,020 ==========
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WINMILL & CO. INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2002 2001 ---- ---- Cash Flows from Operating Activities: Net income (loss) $ 137,326 $ (199,065) ------------- ------------- Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 57,159 93,890 Decrease (increase) deferred income taxes 69,000 47,000 Decrease (increase) in cash value of life insurance (32,160) 21,463 Unrealized (gain) on proprietary securities trading (163,105) (54,591) (Increase) decrease in: Management, distribution and other fees receivable (8,499) 56,057 Dividends, interest and other receivables (32,229) 159,570 Prepaid expenses and other current assets (27,699) 118,094 Refundable income taxes 86,126 (259,420) Other assets (26,538) (13,275) Increase (decrease) in: Accounts payable (15,286) (10,778) Accrued expenses (54,322) 57,557 Accrued income taxes 9,300 (231,000) Other current liabilities (10,215) 56,682 ------------- ------------- Total adjustments (148,468) 41,249 ------------- ------------- Net cash provided by (used for) operating activities (11,142) (157,816) ------------- -------------
WINMILL & CO. INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) Years Ended December 31,
2002 2001 ---- ---- Cash Flows from Investing Activities: Capital expenditures $ (18,874) $ (5,623) Proprietary securities trading sales 27,173 1,253,790 Proprietary securites trading purchases (722,438) (1,674,147) Acquisition of intangible asset (476,471) - ------------- ------------- Net cash used in investing activities (1,190,610) (425,980) ------------- ------------- Cash Flows from Financing Activities: Repayments of notes receivable 70,695 5,939 Redemption of Class A Common Stock - (64,537) Purchase of treasury stock (58,108) - ------------- ------------- Net cash provided by (used in) financing activities 12,587 (58,598) ------------- ------------- Net decrease in cash and cash equivalents (1,189,165) (642,394) Cash and cash equivalents: Beginning of year 2,443,693 3,086,087 ------------- ------------- End of year $ 1,254,528 $ 2,443,693 ============= =============
SUPPLEMENTAL DISCLOSURE: The Company paid $0 and $0 in Federal income taxes in 2002 and 2001, respectively. See accompanying notes to consolidated financial statements. WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2002 and 2001 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS Winmill & Co. Incorporated ("Company") is a holding company. Its subsidiaries' business consists of providing investment management and distribution services for the Midas Funds (three open-end funds), two closed-end funds, and proprietary securities trading. BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company and all of its subsidiaries. Substantially all intercompany accounts and transactions have been eliminated. ACCOUNTING ESTIMATES In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and other liabilities approximate fair value because of the short maturity of these items. Marketable securities are recorded at market value which represents the fair value of the securities. CASH AND CASH EQUIVALENTS Investments in money market funds are considered to be cash equivalents. At December 31, 2002, the Company and subsidiaries had invested approximately $983,100 in an affiliated money market fund. MARKETABLE SECURITIES The Company and its non-broker/dealer subsidiaries' marketable securities are considered to be "available-for-sale" and recorded at market value, with the unrealized gain or loss included in stockholders' equity as "accumulated other comprehensive income." Marketable securities of the broker/dealer subsidiary are valued at market with unrealized gains and losses included in earnings. WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2002 and 2001 INCOME TAXES The Company's method of accounting for income taxes conforms to Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes." This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. The Company and its wholly-owned subsidiaries file consolidated income tax returns. EQUIPMENT Equipment, furniture and fixtures are recorded at cost and are depreciated on the straight-line basis over their estimated useful lives, 3 to 10 years. At December 31, 2002, accumulated depreciation on equipment, furniture and fixtures amounted to approximately $823,700. INTANGIBLE ASSETS The Company adopted Statements of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets ("SFAS 142") in 2002. In accordance with SFAS 142, intangible assets with a finite useful life are amortized over the useful life. In addition, intangible assets are reviewed for impairment and the remaining useful life evaluated at least annually to determine whether events and circumstances warrant a revision to the remaining period of amortization. As such, the Company has amortized its intangible assets over fifteen years using the straight-line method. At December 31, 2002, accumulated amortization on intangible assets amounted to approximately $174,900. COMPREHENSIVE INCOME The Company discloses comprehensive income in the financial statements. Comprehensive income includes net income and unrealized gains and losses on non-broker/dealer marketable securities, which is reported as other comprehensive income in stockholders' equity. SEGMENT INFORMATION The Company's operating segment is organized around services provided and classified into one group - investment management. EARNINGS PER SHARE Basic earnings per share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributed to outstanding options to purchase common stock. WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2002 and 2001 The following table sets forth the computation of basic and diluted earnings per share:
2002 2001 ---- ---- Numerator for basic and diluted earnings per share: Net income (loss) $ 137,326 $ (199,065) =========== =========== Denominator: Denominator for basic earnings per share: weighted - average shares 1,638,403 1,653,343 Effect of dilutive securities: employee stock options 10,726 - ----------- ----------- Denominator for diluted earnings per share: adjusted weighted - average shares and assumed conversions 1,649,129 1,653,343 =========== ===========
2. MARKETABLE SECURITIES At December 31, 2002 marketable securities consisted of: Broker/dealer securities - at market Affiliated investment companies $ 4,389,555 Equity securities 895,020 ------------ Total broker/dealer securities (cost - $5,272,185) 5,284,575 ------------ Other companies Unaffiliated investment companies 2,505 ------------ Total available-for-sale securities (cost - $2,682) 2,505 ------------ $ 5,287,080
At December 31, 2002, the Company had $(177), net of deferred income taxes, of unrealized losses on "available-for-sale securities" which is reported as a separate component of consolidated shareholders' equity. Included in the investments in affiliated investment companies are investments of $2,302,945 (representing approximately 25% of the outstanding shares) in Bexil and $1,817,329 (representing approximately 19% of the outstanding shares) in Tuxis, both of which have received shareholder approval to change from registered investment companies to operating companies. WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2002 and 2001 3. LEASE COMMITMENTS The Company leases office space under a lease which expires December 31, 2003. The rent is approximately $109,000 per annum including electricity. 4. SHAREHOLDERS' EQUITY The Class A and Class B Common Stock are identical in all respects except for voting rights, which are vested solely in the Class B Common Stock. The Company also has 1,000,000 shares of Preferred Stock, $.01 par value, authorized. As of December 31, 2002 and 2001, none of the Preferred Stock was issued. 5. NET CAPITAL REQUIREMENTS The Company's broker/dealer subsidiary is a member firm of the National Association of Securities Dealers, Inc. ("NASD") and is registered with the Securities and Exchange Commission as a broker/dealer. Under its membership agreement with the NASD, the broker/dealer must maintain minimum net capital, as defined, of not less than $100,000, or 6-2/3% of aggregate indebtedness, whichever is greater; and a ratio of aggregate indebtedness to net capital, as defined, of not more than 15 to 1. At December 31, 2002, the subsidiary had net capital of approximately $4,623,900; net capital requirements of $100,000; excess net capital of approximately $4,523,900; and the ratio of aggregate indebtedness to net capital was approximately .05 to 1. 6. STOCK OPTIONS On December 6, 1995, the Company adopted a Long-Term Incentive Plan which, as amended, provides for the granting of a maximum of 600,000 options to purchase Class A Common Stock to directors, officers and key employees of the Company or its subsidiaries. With respect to non-employee directors, only grants of non-qualified stock options and awards of restricted shares are available. The three non-employee directors were granted 2,500 options each on December 10, 2002. The option price per share may not be less than the fair value of such shares on the date the option is granted, and the maximum term of an option may not exceed ten years except as to non-employee directors for which the maximum term is five years. WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2002 and 2001 The Company applies APB Opinion 25 and related interpretations in accounting for its stock option plans. Accordingly, no compensation cost has been recognized for its stock option plans. Pro forma compensation cost for the Company's plans is required by Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation (SFAS 123)" and has been determined based on the fair value at the grant dates for awards under these plans consistent with the method of SFAS 123. For purposes of pro forma disclosure, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows:
Years Ended December 31, 2002 2001 ---- ---- Net income (loss) As reported $137,326 $(199,065) Pro forma $102,381 $(213,005) Earnings per share Basic As reported $.08 $(.12) Pro forma $.06 $(.13) Diluted As reported $.08 $(.12) Pro forma $.06 $(.13)
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 2002 and 2001: expected volatility of 41.18% and 46.98%, risk-free interest rate of 1.17% and 3.95% and expected life of three years for each year. A summary of the status of the Company's stock option plans as of December 31, 2002 and 2001, and changes during the years ending on those dates is presented below:
Weighted Number Average Of Exercise Stock Options Shares Price Outstanding at December 31, 2000 226,000 $1.61 Granted 15,000 $1.80 Canceled (20,000) $1.94 -------- Outstanding at December 31, 2001 221,000 $1.60 Granted 77,500 $1.61 Canceled (17,000) $1.76 -------- Outstanding at December 31, 2002 281,500 $1.59 ========
There were 266,500 and 174,000 options exercisable at December 31, 2002 and 2001 with a weighted-average exercise price of $1.59 and $1.59, respectively. The weighted-average fair value of options granted using the Black Scholes option-pricing model was $.40 and $.64 for the years ended December 31, 2002 and 2001, respectively. WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2002 and 2001 The following table summarizes information about stock options outstanding at December 31, 2002:
Weighted-Average Range of Number Remaining Weighted-Average Exercise Prices Outstanding Contractual Life Exercise Price $1.50 - $1.60 121,500 3.4 years $1.50 $1.60 - $1.66 160,000 3.6 years $1.65
In connection with the exercise of the options, the Company has received from certain officers notes with interest rates ranging from 2.45% to 2.48% per annum payable December 31, 2004. The balance of the notes at December 31, 2002 was $527,041, which was classified as "notes receivable for common stock issued." 7. PENSION PLAN The Company has a 401(k) retirement plan for substantially all of its qualified employees. Contributions are based upon a percentage of earnings of eligible employees and are accrued and funded on a current basis. Total pension expense for the years ended December 31, 2002 and 2001 was approximately $49,500 and $33,700, respectively. 8. INCOME TAXES The provision for income tax expense (benefit) was as follows:
2002 2001 ---- ---- Current Federal $ (4,500) $ (114,000) State and local 13,800 (18,853) --------- ----------- 9,300 (132,853) Deferred 69,000 47,000 --------- ----------- $ 78,300 $ (85,853) ========= ===========
Deferred tax assets (liabilities) are comprised of the following at December 31, 2002 and 2001:
2002 2001 ---- ---- Unrealized (appreciation) depreciation on investments $ (5,000) $ 53,000 Accrued expenses 2,000 19,000 Net capital loss carryforwards 25,000 19,000 --------- --------- Net deferred tax assets $ 22,000 $ 91,000 ========= =========
WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2002 and 2001 A reconciliation of the federal statutory income tax rate to the Company's effective tax rate is as follows:
2002 2001 ---- ---- Statutory rate 34.0% 34.0% Increase in effective tax rate resulting from: State income taxes, net of federal benefit 4.2 4.4 Write-down of non-deductible intangible assets - (6.2) Non-deductible income and expenses - net (1.9) (2.1) ----- ----- 36.3 30.1% ===== =====
9. RELATED PARTIES All investment management and distribution fees are a result of services provided to the Funds. All such services are provided pursuant to agreements that set forth the fees to be charged for these services. These agreements are subject to annual review and approval by each Fund's Board of Directors and a majority of the Fund's non-interested directors. In addition, during the years ended December 31, 2002 and 2001, the Funds paid approximately $44,000 and $69,000, respectively, for recordkeeping services to ISC, which paid such amounts to certain brokers for performing such services. These reimbursements for recordkeeping services were recorded in management, distribution and other fees. The Company's investment manager and distributor subsidiaries waived management and distribution fees from the Funds in the amount of approximately $179,700 and $284,400 for the years ended December 31, 2002 and 2001, respectively. On March 31, 1999, the Company sold its discount brokerage business, Bull & Bear Securities, ("BBSI") to a subsidiary of Royal Bank of Canada. In connection with the sale, Royal Bank agreed that it would cause for the three-year period following the sale, BBSI to offer exclusively Dollar Reserves to its customers as the sole money market fund into which cash balances held by BBSI's customers would be swept on a daily basis. In addition, the Company agreed to provide to BBSI for a period of three years following the sale certain services with respect to the operation of a securities brokerage business for a monthly consulting fee of $16,666.67, subject to certain conditions. The agreement was terminated in June 2001 by Royal Bank which provided a final settlement payment of approximately $164,000. Certain officers of the Company also serve as officers and/or directors of the Funds. Commencing August 1992, the Company has a key man life insurance policy on the life of the Company's Chairman which provides for the payment of $1,000,000 to the Company upon his death. As of December 31, 2002, the policy had a cash surrender value of approximately $274,200 and is included in other assets in the balance sheet. WINMILL & CO. INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2002 and 2001 10. CONTINGENCIES From time to time, the Company and/or its subsidiaries are threatened or named as defendants in litigation arising in the normal course of business. As of December 31, 2002, neither the Company nor any of its subsidiaries was involved in any other litigation that, in the opinion of management, would have a material adverse impact on the consolidated financial statements. In April 2002, the Company entered into a Death Benefit Agreement ("Agreement") with the Company's Chairman. Following his death, the Agreement provides for annual payments, equal to 80% of his average annual salary received from the Company, its affiliates, subsidiaries and other related entities for the three year period prior to his death subject to certain adjustments to his wife until her death. The Company's obligations under the Agreement are not secured and will terminate if he leaves the Company's employ under certain conditions. PART III Item 8. Directors and Executive Officers The following list contains the names, ages, positions and lengths of service of all directors and executive officers of the Company.
Name Position Years of Service Age Director Officer Bassett S. Winmill Chairman of the Board 26 26 72 Robert D. Anderson Vice Chairman of the Board 26 26 73 Thomas B. Winmill, Esq. President, 14 15 43 General Counsel, Director Edward G. Webb, Jr. Director 17* 14** 63 Charles A. Carroll Director 11 - 72 Mark C. Winmill Director 13*** 15**** 45 Marion E. Morris Senior Vice President - 2 57 William G. Vohrer Treasurer, - 2 52 Chief Accounting Officer Monica Pelaez, Esquire Vice President, Secretary, Associate General Counsel - 3 31
* 1985 to 1990 and 1992 to present. ** 1979 to 1990 *** 1989 to 1999 and 2000 to present. **** 1987 to 1999 Set forth below is a description of the business experience of the directors and executive officers of the Company during the past five years. BASSETT S. WINMILL - Chairman of the Board of Directors. He is also Chairman of certain investment companies managed by Company subsidiaries and Tuxis Corporation and Bexil Corporation. He is a member of the New York Society of Security Analysts, the Association for Investment Management and Research, and the International Society of Financial Analysts. He is the father of Thomas B. Winmill and Mark C. Winmill. ROBERT D. ANDERSON - Vice Chairman of the Board of Directors. He is also Vice Chairman of certain investment companies managed by Company subsidiaries and certain subsidiaries of the Company. THOMAS B. WINMILL, ESQ. - President, General Counsel, Chief Executive Officer and Director. He is also President of the investment companies managed by Company subsidiaries and of certain subsidiaries of the Company. He is also a director and President of Bexil Corporation and a director and general counsel of Tuxis Corporation. He is a member of the New York State Bar. He is a son of Bassett S. Winmill and brother of Mark C. Winmill. EDWARD G. WEBB, JR. - Director. He is Equity Portfolio Manager of Advanced Asset Management Advisers, Inc. He was President of Webb Associates, Ltd. since 1996. Prior to that, he served as a Senior Vice President and Director of the Company. CHARLES A. CARROLL - Director. From 1989 to the present, he has been affiliated with Kalin Associates, Inc., a member firm of the New York Stock Exchange. MARK C. WINMILL - Director. He is currently President of Tuxis Corporation. He was Co-President and Director of the Company from June 1990 to March 1999 and an Officer and Director of its various Funds and subsidiaries from June 1987 to March 1999. He was President and Director of Bull & Bear Securities, Inc. ("BBSI"), a nationwide discount broker, from June 1987 until March 1999 when the Company sold BBSI to The Royal Bank of Canada. He was also Chief Operating Officer of BBSI from April 1999 to February 2000. He is a son of Bassett S. Winmill and a brother of Thomas B. Winmill. WILLIAM G. VOHRER - Chief Financial Officer, Treasurer and Chief Accounting Officer. He joined the Company in February 2001. He is also Chief Financial Officer and Treasurer of certain investment companies managed by Company subsidiaries and certain subsidiaries of the Company, Bexil Corporation and Tuxis Corporation. From 1999 to 2001, he consulted on accounting matters. From 1994 to 1999 he was Chief Financial Officer and Financial Operations Principal for Nafinsa Securities, Inc., a Mexican Securities broker/dealer. From 1978 to 1994, he held Chief Financial Officer/Controller positions with various international banks. MARION E. MORRIS - Senior Vice President. Since 2000, she has served as Senior Vice President of the Company, certain investment companies managed by Company subsidiaries and certain subsidiaries of the Company. She is Director of Fixed Income and a member of the Investment Policy Committee. From 1997 to 2000, she acted as general manager of Michael Trapp. Previously, she had served as Vice President of Salomon Brothers, The First Boston Corporation and Cantor Fitzgerald. MONICA PELAEZ, ESQ. - Vice President, Secretary and Chief Compliance Officer. She is also Vice President, Secretary and Chief Compliance Officer of certain investment companies managed by Company subsidiaries and certain subsidiaries of the Company, Bexil Corporation and Tuxis Corporation. Previously, she was Special Assistant Corporation Counsel to New York City Administration for Children's Services from 1998 to 2000 and an attorney with Debevoise & Plimpton from 1997 to 1998. She earned her Juris Doctor from St. John's University School of Law in 1997. She is a member of the New York State Bar. Each director is elected by the vote or written consent of the holder of a majority of the Class B Common Stock and holds office until the next meeting of the Class B common stockholder and until his successor is elected and qualified, or until his earlier death, resignation or removal. Based solely on the information from Forms 3, 4, and 5 furnished to it, the Company believes that the directors, officers, and owners of more than 10 percent of the Class A Common Stock of the Company have filed on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934 during the most recent fiscal year, except for Forms 5 filed on behalf of Robert D. Anderson, Charles A. Carroll, William G. Vohrer, Edward G. Webb, Jr., Bassett S. Winmill, Mark C. Winmill, and Thomas B. Winmill, on February 28, 2003, 14 days following the February 14, 2003 filing deadline. Item 9. Executive Compensation The following information and tables set forth the information required under the Securities and Exchange Commission's executive compensation rules. Summary Compensation Table The following table sets forth, for the three years ended December 31, 2002, the compensation paid to the chief executive and the other officers whose total annual salary and bonus exceeded $100,000 in 2002. SUMMARY COMPENSATION TABLE
Long-Term Annual Compensation Compensation ------------ ------------------- Securities All Other Name And Salary Bonus Other Annual Underlying Compensation Principal Position Year ($) ($) Compensation* Options ----------------- - ------------------ ---- (a) (b) Bassett S. Winmill 2002 $ 131,733(c) $ - - 80,000 $ 1,174 $ 6,888 Chairman 2001 $ 315,000 $ 13,125 - 55,000 $ 3,584 $ 6,300 2000 $ 315,000 $ 7,450 - 55,000 $ 3,504 $ 5,883 Thomas B. Winmill 2002 $ 110,970(d) $ - - 80,000 $ 120 $ 6,600 President and 2001 $ 187,500(d) $ 10,416 - 55,000 $ 300 $ 6,300 Chief Executive Officer 2000 $ 250,000 $ 10,416 - 55,000 $ 300 $ 6,000
* Information omitted as perquisites do not exceed the lesser of $50,000 or 10% of the total annual salary and bonus for the year for the named executive officers. (a) Represents term life insurance (b) Represents Company's matching contributions to 401(k) Plan. (c) Bassett Winmill also received $200,000 in bonus from Bexil Corporation and $175,000 in compensation from Tuxis Corporation for his services as Executive Chairman. (d) Thomas Winmill also received $350,000 and $62,500 in 2002 and 2001, respectively, in compensation and bonus from Bexil Corporation for his services as President. Option Grants Table The following table sets forth, for the year ended December 31, 2002, information regarding the options granted for each of the executive officers named in the Summary Compensation Table.
Potential Realizable Value At Assumed Annual Rates Of Stock Price Appreciation For Individual Grants Option Term Number Of % Of Total Securities Options Underlying Granted To Options Employees In Exercise Expiration Name Granted Fiscal Year Price Date 5% 10% ---- ------------ --------------- ---------- -------------- -- --- Bassett S. Winmill 25,000 32 1.66 12/9/07 $11,480 $25,368 Thomas B. Winmill 25,000 32 1.66 12/9/07 $11,480 $25,368
All of the above options are exercisable as of December 31, 2002. Aggregated Option Exercises and Fiscal Year-End Option Value Table The following table sets forth, for the year ended December 31, 2002, information regarding the outstanding options for each of the executive officers named in the Summary Compensation Table.
Number of Shares of Class A Stock Value of Number of Underlying Unexercised Shares of Unexercised In-The-Money Class A Options at Options at Stock Dollar 12-31-02 (#) 12-31-02 (*) Aquired on Value Exercisalbe/ Exercisable/ Exercise Realized Unexercisable Unexercisable ------------ ---------- --------------- --------------- Bassett S. Winmill 0 $0 80,000 / 0 $6,898 / $0 Thomas B. Winmill 0 $0 80,000 / 0 $6,898 / $0
Long-Term Incentive Plan Awards Table There were no long-term incentive plan awards other than options made during the year ended December 31, 2002 to the executive officers named in the Summary Compensation Table. Compensation of Directors Edward G. Webb, Jr., Charles A. Carroll and Mark C. Winmill were the only individuals who received compensation for their service as directors of the Company in 2002. They were each paid $500 per quarter as a retainer and $2,000 per quarterly meeting attended plus expenses. For the year ended December 31, 2002, Mr. Webb, Mr. Carroll and Mr. Mark C. Winmill were each paid $10,000 for attending four regular meetings and annual retainer and each received an option to purchase 2,500 shares of Class A Common Stock at an exercise price of $1.511 per share in December 2002. Employment Contracts The Company has no employment or termination contracts with any of its employees except to the extent of the agreement described in Note 10 to the financial statements. 1995 Long-Term Incentive Plan On December 6, 1995, the Board of Directors of the Company ("Board") and the Class B voting common stockholder adopted the Winmill & Co. Incorporated 1995 Long-Term Incentive Plan ("Plan"), as amended, under which a maximum of 600,000 options and stock-based awards (collectively, "Awards") may be made to directors, officers and employees of the Company or its subsidiaries. The amended Plan is described below. The purpose of the Plan is to assist the Company and its subsidiaries in attracting and retaining highly competent officers and directors and otherwise on behalf of the Company. The Plan also acts as an incentive in motivating selected officers and key employees to achieve long-term objectives of the Company, which will inure to the benefit of all stockholders of the Company. Any proceeds raised by the Company under the Plan will be used for working capital purposes. General Provisions Duration of the Plan; Share Authorization. The Plan will terminate on December 6, 2005, unless terminated earlier by the Board. Six hundred thousand (600,000) shares of the Company's Class A Common Stock ("Shares") have been available for Awards under the Plan. The Shares to be offered under the Plan are authorized and unissued Shares, or issued Shares that have been reacquired by the Company and held in its treasury. Holders of Shares do not have voting rights except as specifically provided by the Delaware General Corporation Law. Shares covered by any unexercised portions of terminated options, Shares forfeited by Participants, and Shares subject to any Awards that are otherwise surrendered by a Participant without receiving any payment or other benefit with respect thereto may again be subject to new Awards under the Plan. In the event the purchase price of an option or tax withholding relating to an Award is paid in whole or in part through the delivery of Shares, the number of Shares issuable in connection with the exercise of the option may not again be available for the grant of Awards under the Plan. Plan Administration. The Plan is administered by the Board or Compensation Committee ("Committee") of the Board. The Committee is composed of at least two directors of the Company, each of whom is a "Non-Employee Director" as defined in Rule 16b-3 promulgated by the SEC ("Rule 16b-3") under Section 16 of the Securities Exchange Act of 1934, as amended ("Exchange Act"). When the Committee is administering the Plan, the Committee will determine the officers and other key employees who will be eligible for and granted Awards, determine the amount and type of Awards, establish and modify administrative rules relating to the Plan, impose such conditions and restrictions on Awards as it determines appropriate and take such other action as may be necessary or advisable for the proper administration of the Plan. The Board or Committee may, with respect to Participants who are not subject to Section 16 of the Exchange Act, delegate such of its powers and authority under the Plan as it deems appropriate to certain officers or employees of the Company. Plan Participants. Any employee of the Company or its subsidiaries, whether or not a director of the Company, may be selected by the Board or Committee to receive an Award under the Plan. Non-Employee Directors shall receive such Awards (other than Incentive Stock Options) as the Board in its discretion may designate. Awards Available Under the Plan Awards to employees under the Plan may take the form of stock options or Restricted Share Awards. Awards under the Plan may be granted alone or in combination with other Awards. The consideration for issuance of Awards under the Plan is the continued services of the employees and non-employee directors to the Company and its subsidiaries. Stock Options Granted to Employees. Stock options ("Incentive Stock Options") meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto ("Code"), and stock options that do not meet such requirements ("Non-Qualified Stock Options") are both available for grant to employees under the Plan. The term of each option will be determined by the Board or Committee, but no option will be exercisable more than ten years after the date of grant. If, however, an Incentive Stock Option is granted to a Participant who, at the time of grant of the option, owns (or is deemed to own under Section 424(d) of the Code) more than 10% (a "Ten Percent Shareholder") of the Company's Class B common stock, par value $0.01 per share ("Company Voting Securities"), the option is not exercisable more than five years after the date of grant. Options may also be subject to restrictions on exercise, such as exercise in periodic installments, performance targets and waiting periods, as determined by the Board or Committee. The exercise price of each option is determined by the Board or Committee; however, the per share exercise price of an option must be at least equal to 100% of the Fair Market Value (as defined below) of a Share on the date of grant of such option. If, however, an Incentive Stock Option is granted to a Ten Percent Shareholder, the per share exercise price of the option must be at least equal to 110% of the Fair Market Value of a Share on the date of grant of such option. Fair Market Value of a Share means, as of any given date, the most recently reported sale price of a Share on such date as of the time when Fair Market Value is being determined on the principal national securities exchange on which the Shares are then traded or, if the Shares are not then traded on a national securities exchange, the most recently reported sale price of the Shares on such date as of the time when Fair Market Value is being determined on Nasdaq; provided, however, that, if there were no sales reported as of such date, Fair Market Value is the last sale price previously reported. In the event the Shares are not admitted to trade on a securities exchange or quoted on Nasdaq, the Fair Market Value of a Share as of any given date is as determined in good faith by the Board or Committee. Notwithstanding the foregoing, the Fair Market Value of a Share will never be less than par value per share. Subject to whatever installment exercise and waiting period provisions the Board or Committee may impose, options may be exercised in whole or in part at any time prior to expiration of the option by giving written notice of exercise to the Company specifying the number of Shares to be purchased. Such notice must be accompanied by payment in full of the purchase price in such form as the Board or Committee may accept (including payment in accordance with a cashless exercise program under which, if so instructed by the Participant, Shares may be issued directly to the Participant's broker or dealer upon receipt of the purchase price in cash from the broker or dealer). If and to the extent determined by the Board or Committee in its discretion at or after grant, payment in full or in part may also be made in the form of Shares duly owned by the Participant (and for which the Participant has good title, free and clear of any liens and encumbrances) or by reduction in the number of Shares issuable upon such exercise based, in each case, on the Fair Market Value of the Shares on the date the option is exercised. In the case of an Incentive Stock Option, however, the right to make payment of the purchase price in the form of Shares may be authorized only at the time of grant. Stock options granted under the Plan are not transferable except by will or the laws of descent and distribution and may be exercised, during the Participant's lifetime, only by the Participant. Unless the Board or Committee provides for a shorter period of time, upon a Participant's termination of employment other than by reason of death or disability, the Participant may, within three months from the date of such termination of employment, exercise all or any part of his or her options as were exercisable at the date of termination of employment but only if (x) the Participant resigns or retires and the Board or Committee consents to such resignation or retirement and (y) such termination of employment is not for cause. In no event, however, may any option be exercised after the time when it would otherwise expire. If such termination of employment is for cause or the Board or Committee does not so consent, the right of such Participant to exercise such options will terminate at the date of termination of employment. Further, unless the Board or Committee provides for a shorter period of time, upon a Participant's becoming disabled (such date being the "Disability Date"), the Participant may, within one year after the Disability Date, exercise all or a part of his or her options that were exercisable upon such Disability Date. In no event, however, may any option be exercised after the time when it would otherwise expire. Further, unless the Board or Committee provides for a shorter period of time, in the event of the death of a Participant while employed by the Company or prior to the expiration of the option as provided for in the event of disability, to the extent all or any part of the option was exercisable as of the date of death of the Participant, the right of the Participant's beneficiary to exercise the option will expire upon the expiration of one year from the date of the Participant's death (but in no event more than one year from the Participant's Disability Date) or on the stated termination date of the option, whichever is earlier. In the event of the Participant's death, the Board or Committee may, in its sole discretion, accelerate the right to exercise all or any part of an Option that would not otherwise be exercisable. To the extent all or any part of an option was not exercisable as of the date of a Participant's termination of employment, such right will expire at the date of such termination of employment. Notwithstanding the foregoing, the Board or Committee, in its sole discretion and under such terms as it deems appropriate, may permit a Participant who will continue to render significant services to the Company after his or her termination of employment to continue to accrue service with respect to the right to exercise his or her options during the period in which the individual continues to render such services. Restricted Shares. The Board or Committee may award restricted Shares ("Restricted Shares") to a Participant. Such a grant gives a Participant the right to receive Shares subject to a risk of forfeiture based upon certain conditions. The forfeiture restrictions on the Restricted Shares may be based upon performance standards, length of service or other criteria as the Board or Committee may determine. Until all restrictions are satisfied, lapsed or waived, the Company will maintain control over the Restricted Shares but the Participant will be entitled to receive dividends on the Restricted Shares; provided, however, that any Shares distributed as a dividend or otherwise with respect to any Restricted Shares as to which the restrictions have not yet lapsed will be subject to the same restrictions as such Restricted Shares. When all restrictions have been satisfied and/or waived or have lapsed, the Company will deliver to the Participant or, in the case of the Participant's death, his or her beneficiary, stock certificates for the appropriate number of Shares, free of all restrictions (except those imposed by law). None of the Restricted Shares may be assigned or transferred (other than by will or the laws of descent and distribution), pledged or sold prior to lapse or release of the applicable restrictions. All of a Participant's Restricted Shares and rights thereto are forfeited to the Company unless the Participant continues in the service of the Company or any parent or subsidiary of the Company as an employee until the expiration of the forfeiture period, and all other applicable restrictions of the Restricted Shares. Notwithstanding the foregoing, the Board or Committee may, in its sole discretion, waive the forfeiture period and any other applicable restrictions on a Participant's Restricted Share Award, provided that the Participant must at that time have completed at least one year of employment after the date of grant. Awards Granted to Non-Employee Directors. Non-Employee Directors are eligible only to receive Non-Qualified Stock Options and Awards of Restricted Shares. All such grants may be made only by the Board. The terms and conditions applicable to grants of such Awards to Non-Employee Directors (except where specifically stated herein to the contrary) are the same as those applicable to grants of Non-Qualified Options and Restricted Shares to employees, except that references to (a) the Committee shall be deemed to refer to the Board (b) employees shall be deemed to refer to Non-Employee Directors and (c) termination of employment shall be deemed to refer to termination of service. Termination and Amendment The Board may amend or terminate the Plan at any time it is deemed necessary or appropriate; provided, however, that no amendment may be made, without the affirmative approval of the holder of Company Voting Securities, that would require stockholder approval under Rule 16b-3, the Code or other applicable law unless the Board determines that compliance with Rule 16b-3 and/or the Code is no longer desired. Except as provided by the Board or Committee, in its sole discretion, at the time of an Award or pursuant to certain antidilution provisions (as discussed below), no Award granted under the Plan to a Participant may be modified (unless such modification does not materially decrease the value of the Award) after the date of grant except by express written agreement between the Company and the Participant, provided that any such change (a) may not be inconsistent with the terms of the Plan, and (b) must be approved by the Board or Committee. The Board has the right and the power to terminate the Plan at any time. No Award may be granted under the Plan after the termination of the Plan, but the termination of the Plan will not have any other effect and any Award outstanding at the time of the termination of the Plan may be exercised after termination of the Plan at any time prior to the expiration date of such Award to the same extent such Award would have been exercisable had the Plan not terminated. Antidilution Provisions Recapitalization. The number and kind of shares subject to outstanding Awards, the purchase price or exercise price of such Awards, and the number and kind of shares available for Awards subsequently granted under the Plan will be appropriately adjusted to reflect any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other change in capitalization with a similar substantive effect upon the Plan or the Awards granted under the Plan. The Board or Committee has the power and sole discretion to determine the nature and amount of the adjustment to be made in each case. However, in no event will any adjustment be made in accordance with the Plan's antidilution provisions to any previous grant of Restricted Shares if an adjustment has been or will be made to the Shares awarded to a Participant in such person's capacity as a stockholder. Sale or Reorganization. After any reorganization, merger or consolidation in which the Company is the surviving entity, each Participant will, at no additional cost, be entitled upon the exercise of an Award outstanding prior to such event, and in connection with the payout after such event of any Award outstanding at the time of such event, to receive (subject to any required action by stockholders), in lieu of the number of Shares receivable or exercisable pursuant to such option, the number and class of shares of stock or other securities to which such Participant would have been entitled pursuant to the terms of the reorganization, merger or consolidation if, at the time of such reorganization, merger or consolidation, such Participant had been the holder of record of a number of Shares equal to the number of Shares receivable or exercisable pursuant to such Award. Comparable rights will accrue to each Participant in the event of successive reorganizations, mergers or consolidations of the character described above. Options to Purchase Stock of Acquired Companies. After any reorganization, merger or consolidation in which the Company is a surviving entity, the Board or Committee may grant substituted options under the provisions of the Plan, pursuant to Section 424 of the Code, replacing old options granted under a plan of another party to the reorganization, merger or consolidation whose stock subject to the old options may no longer be issued following such merger or consolidation. The foregoing adjustments and manner of application of the foregoing provisions will be determined by the Board or Committee in its sole discretion. Any such adjustments may provide for the elimination of any fractional Shares that might otherwise become subject to any options. Item 10. Security Ownership of Certain Beneficial Owners and Management. (a) Bassett S. Winmill, Chairman of the Board of Directors, owns all of the issued and outstanding shares of the Company's Class B Common Stock, which represents 100% of the Company's voting securities. (b) The following table sets forth, as of December 31, 2002, information relating to beneficial ownership by individual directors of the Company, executive officers named in the Summary Compensation Table and by directors and executive officers of the Company as a group, of the currently issued and outstanding Class A Common Stock of the Company.
Amount and Nature of Percent Name of Beneficial Owner Beneficial Ownership (5) of Class ------------------------ ------------------------ -------- Bassett S. Winmill 356,104 (1) 21.3% Thomas B. Winmill 202,520 (2) 12.1% Robert D. Anderson 99,414 (3) 6.1% Edward G. Webb, Jr. 21,164 (4) 1.3% Charles A. Carroll 40,600 (4) 2.5% Mark C. Winmill 109,300 (4) 6.8% All directors and executive officers as a group (6 persons) 829,102 45.3%
(1) Includes options exercisable to purchase 80,000 shares at December 31, 2002. (2) Includes 10,000 shares held by Thomas B. Winmill's sons, of which he disclaims beneficial ownership and options exercisable to purchase 80,000 shares. (3) Includes options exercisable to purchase 30,000 shares. (4) Includes options exercisable to purchase 17,500 shares. (5) The nature of the beneficial ownership for all the Class A Common Stock is investment power. Item 11. Certain Relationships and Related Transactions The following sets forth the reportable items regarding indebtedness of management in excess of $60,000.
Largest Amount Amount Of Outstanding At Name and Relationship Indebtedness December 31, 2002 Bassett S. Winmill, Chairman * $265,816 $223,958 Thomas B. Winmill, President * $197,398 $179,835 Mark C. Winmill, Director * $225,158 $225,158
* In connection with the exercise of stock options and related tax expense, the Company received notes with interest rates ranging from 2.45% to 2.48% per annum payable on December 31, 2004. PART IV Item 12. Exhibits, Consolidated Financial Statements and Schedules, and Reports on Form 8-K (a) (1) Financial Statements See Item 7 for a list of the financial statements filed as part of this report. (2) Financial Statement Schedules by Regulation S-X are not required under the related instructions or are inapplicable, and therefore have been omitted. (3) Exhibits (2) Not applicable (3) Certificate of Incorporation as amended October 24, 1989 as filed as an exhibit to Form 10-K for the year ended December 31, 1992 and incorporated herein by reference; Certificate of Incorporation as amended April 1, 1999 as filed as an exhibit to Form 10-K/A for the year ended December 31, 1998 and incorporated herein by reference; By-Laws amended as of October 1, 1993 as filed as an exhibit to Form 10-K for the year ended December 31, 1993 and incorporated herein by reference, and By-Laws amended as of April 1, 1999 as filed as an exhibit to Form 10-K/A for the year ended December 31, 1998 and incorporated herein by reference. (4) Instruments defining the rights of security holders, including indentures (see Article Four of Certificate of Incorporation). (9) Not applicable. (10) Material Contracts (a) Investment Management Agreements, Distribution Agreements and Plans of Distribution ("12b-1 Plans") between subsidiaries of the Company and the Funds and Non-Exclusive License Agreements between the Company and the Funds:
Non-Exclusive Management Distribution 12b-1 License Fund Agreement Agreement Plan Agreement (i) Dollar Reserves, Inc. (1) (1) (1) (3) (ii) Global Income Fund, Inc. (4) - - - (iii) Midas Special Equities Fund, Inc. (1) (1) (1) (3) (iv) Midas Fund, Inc. (2) (2) (2) (3) (v) Internet Growth Fund, Inc. (5) - - (5)
(1) Filed as exhibits to Form 10-K for the year ended December 31, 1993 and incorporated herein by reference. (2) Filed as exhibits to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (3) Filed as exhibits to Form 10-K for the year ended December 31, 1997 and incorporated herein by reference. (4) Filed as exhibits to Form 10-K for the year ended December 31, 1999 and incorporated herein by reference. (5) Filed as exhibits to Form 10-KSB for the year ended December 31, 2002 and filed herein. (b) Winmill & Co. Incorporated 1995 Long-Term Incentive Plan, as adopted December 6, 1995 and amended February 6, 1996, filed as exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (c) Section 422A Incentive Stock Option Plan, as adopted December 5, 1990, filed as exhibit to Form 10-K for the year ended December 31, 1990 and incorporated herein by reference. (d) Investment Management Transfer Agreements between the investment management subsidiaries of the Company and filed as exhibit to Form 10-K for the year ended December 31, 1992 and incorporated herein by reference. (e) Winmill & Co. Incorporated Investment Plan, filed as an exhibit to Form 10-K for the year ended December 31, 1993 and incorporated herein by reference. (f) Death Benefit Agreement dated July 22, 1994 and filed as exhibit to Form 10-K for the year ended December 31, 1994 and incorporated herein by reference. (g) Winmill & Co. Incorporated Incentive Stock Option Agreement for Employees - Bassett S. Winmill filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (h) Winmill & Co. Incorporated Incentive Stock Option Agreement for Employees - Robert D. Anderson filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (i) Winmill & Co. Incorporated Incentive Stock Option Agreement for Employees - Mark C. Winmill filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (j) Winmill & Co. Incorporated Incentive Stock Option Agreement for Employees - Thomas B. Winmill filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (k) Winmill & Co. Incorporated Stock Option Agreement - Edward G. Webb, Jr. filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (l) Winmill & Co. Incorporated Stock Option Agreement - Charles A. Carroll filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference. (m) Winmill & Co. Incorporated 1995 Long-Term Incentive Plan, (as Amended and Restated as of October 29, 1997), filed as exhibit to Form 10-K for the year ended December 31, 1997 and incorporated herein by reference. (n) Option Certificate for Bassett S. Winmill filed as an exhibit to Form 10-K for the year ended December 31, 1997 and incorporated herein by reference. (o) Option Certificate for Edward G. Webb, Jr. filed as an exhibit to Form 10-K for the year ended December 31, 1997 and incorporated herein by reference. (p) Option Certificate for Charles A. Carroll filed as an exhibit to Form 10-K for the year ended December 31, 1997 and incorporated herein by reference. (q) Option Certificate for Thomas B. Winmill filed as an exhibit to Form 10-K for the year ended December 31, 1997 and incorporated herein by reference. (r) Option Certificate for Robert D. Anderson filed as an exhibit to Form 10-K for the year ended December 31, 1997 and incorporated herein by reference. (s) Purchase Agreement, dated as of December 17, 1998, by and among Winmill & Co. Incorporated (formerly Bull & Bear Group, Inc.), Bull & Bear Securities, Inc. and RBC Holdings (USA) Inc., with all exhibits thereto filed as an exhibit to Form 8-K on December 18, 1998 and incorporated herein by reference. (t) Death Benefit Agreement as amended April 2002 filed as exhibit to Form 10-KSB for the year ended December 31, 2002 and filed herein. (11) Statement Regarding Computation of Per Share Earnings (12) Not applicable. (13) Not applicable. (16) Not applicable. (18) Not applicable. (21) Wholly-Owned Subsidiaries of the Company (23) Not applicable. (24) Not applicable. (27) Not applicable. (28) Not applicable. (99) Not applicable. (b) Reports on Form 8-K. No reports on Form 8-K were filed during the last quarter of the period covered by this report. -36- Item 13. Controls and Procedures (a) Evaluation of disclosure controls and procedures. The Company's chief executive officer and chief financial officer, after evaluating the effectiveness of the Company's "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c)) as of a date (the "Evaluation Date") within 90 days before the filing date of this annual report, have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective. (b) Changes in internal controls. There were no significant changes in the Company's internal controls or to the Company's knowledge, in other factors that could significantly affect the Company's disclosure controls and procedures subsequent to the Evaluation Date. -37- SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WINMILL & CO. INCORPORATED March 31, 2003 By: /s/ William G. Vohrer ------------------------------------------------------- William G. Vohrer Chief Financial Officer, Treasurer, Chief Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Company and in the capacities and on the dates indicated. March 31, 2003 By: /s/ Bassett S. Winmill ------------------------------------------------------- Bassett S. Winmill, Chairman of the Board, Director March 31, 2003 By: /s/ Robert D. Anderson ------------------------------------------------------- Robert D. Anderson, Vice Chairman, Director March 31, 2003 By: /s/ Thomas B. Winmill ------------------------------------------------------- Thomas B. Winmill, Esq., President Chief Executive Officer, General Counsel, Director March 31, 2003 By: /s/ Edward G. Webb, Jr. ------------------------------------------------------- Edward G. Webb, Jr. Director March 31, 2003 By: /s/ Charles A. Carroll ------------------------------------------------------- Charles A. Carroll, Director March 31, 2003 By: /s/ Mark C. Winmill ------------------------------------------------------- Mark C. Winmill, Director -38- Certification Under Section 906 Of The Sarbanes-Oxley Act of 2002 Certification of Periodic Financial Report Pursuant to 18 U.S. C. Section 1350 Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Winmill & Co. Incorporated (the "Company") certifies that the Annual Report on Form 10-KSB of the Company of the fiscal year ended December 31, 2002 fully complies with the requirements of Section 13(a) or 15 (d), as applicable, of the Securities Exchange Act of 1934 and information contained in that Form 10-KSB fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 31, 2003 /s/ Thomas B. Winmill ------------------------------------------------------- Thomas B. Winmill Chief Executive Officer and President Dated: March 31, 2003 /s/ William G. Vohrer ------------------------------------------------------- Chief Financial Officer, Treasurer, Chief Accounting Officer -47- Certification- Exchange act rules 13a-14 and 15d-14 I, Thomas B. Winmill, certify that: 1. I have reviewed this annual report on Form 10-KSB of Winmill & Co. Incorporated; 2. Based on my knowledge, this Annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 31, 2003 /s/ Thomas B. Winmill ------------------------ Chief Executive Officer Certification- Exchange act rules 13a-14 and 15d-14 I, William G. Vohrer, certify that: 1. I have reviewed this annual report on Form 10-KSB of Winmill & Co. Incorporated; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 31, 2003 /s/ William G. Vohrer ------------------------ Chief Financial Officer, Treasurer and Chief Accounting Officier INDEX TO EXHIBITS (3) Exhibits (10) Material Contracts (a) Management Agreement between Internet Growth Fund, Inc. and CEF Advisers, Inc. (b) Non-Exclusive License Agreement between Internet Growth Fund, Inc. and CEF Advisers, Inc. (c) Amended Death Benefit Agreement (11) Statement Regarding Computation of Per Share Earnings (21) Wholly-Owned Subsidiaries of the Company Exhibit 11 - Statement Regarding Computation of Per Share Earnings
2002 2001 -------------------------------- -------------------- Basic Diluted Basic Diluted Weighted average common shares outstanding 1,638,403 1,638,403 1,653,343 1,653,343 Weighted average common shares issuable upon exercise of stock options under the treasury stock method - 10,726 - - Weighted average common shares issuable upon exercise of warrants under the treasury stock method - - - - Weighted average common shares and common share equivalents utilized for earnings per share computation 1,638,403 1,649,129 1,653,343 1,653,343
Exhibit 21 - Wholly-Owned Subsidiaries of the Company CEF Advisers, Inc., a Delaware corporation Investor Service Center, Inc., a Delaware corporation Midas Management Corporation, a Delaware corporation INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made on July 12, 2002, by and between Internet Growth Fund, Inc., a Maryland corporation (the "Fund") and CEF Advisers, Inc., a Delaware corporation (the "Investment Manager"). WHEREAS the Fund is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a closed-end management investment company; and WHEREAS, the Fund desires to retain the Investment Manager to furnish certain investment advisory and portfolio management services to the Fund, and the Investment Manager desires to furnish such services; NOW THEREFORE, in consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, it is hereby agreed between the parties hereto as follows: 1. The Fund hereby employs the Investment Manager to manage the investment and reinvestment of its assets, including the regular furnishing of advice with respect to the Fund's portfolio transactions subject at all times to the control and oversight of the Fund's Board of Directors, for the period and on the terms set forth in this Agreement. The Investment Manager hereby accepts such employment and agrees during such period to render the services and to assume the obligations herein set forth, for the compensation herein provided. The Investment Manager shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Fund in any way, or otherwise be deemed an agent of the Fund. The Investment Manager may enter into a contract ("Subadvisory Agreement") with an investment adviser in which the Investment Manager delegates to such investment adviser any or all of its duties specified in this Paragraph 1, provided that such Subadvisory Agreement meets all requirements of the 1940 Act and rules thereunder. 2. The Fund assumes and shall pay all the expenses required for the conduct of its business including, but not limited to, salaries of administrative and clerical personnel, brokerage commissions, taxes, insurance, fees of the transfer agent, custodian, legal counsel and auditors, association fees, costs of filing, printing and mailing proxies, reports and notices to shareholders, preparing, filing and printing the prospectus and statement of additional information, payment of dividends, costs of stock certificates, costs of shareholders meetings, fees of the independent directors, necessary office space rental, all expenses relating to the registration or qualification of shares of the Fund under applicable Blue Sky laws and reasonable fees and expenses of counsel in connection with such registration and qualification and such non-recurring expenses as may arise, including, without limitation, actions, suits or proceedings affecting the Fund and the legal obligation which the Fund may have to indemnify its officers and directors with respect thereto. 3. If requested by the Fund's Board of Directors, the Investment Manager may provide other services to the Fund such as, without limitation, the functions of billing, accounting, certain shareholder communications and services, administering state and Federal registrations, filings and controls and other administrative services. Any services so requested and performed will be for the account of the Fund and the costs of the Investment Manager in rendering such services shall be reimbursed by the Fund, subject to examination by those directors of the Fund who are not interested persons of the Investment Manager or any affiliate thereof. 4. The services of the Investment Manager are not to be deemed exclusive, and the Investment Manager shall be free to render similar services to others in addition to the Fund so long as its services hereunder are not impaired thereby. 5. The Investment Manager shall create and maintain all necessary books and records in accordance with all applicable laws, rules and regulations, including but not limited to records required by Section 31(a) of the 1940 Act and the rules thereunder, as the same may be amended from time to time, pertaining to the investment management services performed by it hereunder and not otherwise created and maintained by another party pursuant to a written contract with the Fund. Where applicable, such records shall be maintained by the Investment Manager for the periods and in the places required by Rule 31a-2 under the 1940 Act. The books and records pertaining to the Fund which are in the possession of the Investment Manager shall be the property of the Fund. The Fund, or the Fund's authorized representatives, shall have access to such books and records at all times during the Investment Manager's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by the Investment Manager to the Fund or the Fund's authorized representatives. 6. The Fund will pay the Investment Manager a fee for its services (the "Advisory Fee") at the annual rate of 1.00% of the Fund's average daily net assets. The Advisory Fee shall be accrued each calendar day during the term of this Agreement and the sum of the daily fee accruals shall be paid monthly as soon as practicable following the last day of each month. The daily fee accruals will be computed by multiplying 1/365 by the annual rate and multiplying the product by the net asset value of the Fund as determined in accordance with the Fund's registration statement as of the close of business on the previous day on which the American Stock Exchange (or such other exchange on which the Fund's shares are principally traded) was open for business, or in such other manner as the parties agree. The Investment Manager may from time to time and for such periods as it deems appropriate reduce its compensation and/or assume expenses of the Fund. If this Agreement becomes effective or terminates before the end of any month, the fee for the period from the effective date to the end of the month or from the beginning of such month to the date of termination, as the case may be, shall be pro-rated according to the proportion which such period bears to the full month in which such effectiveness or termination occurs. 7. The Investment Manager shall direct portfolio transactions to broker/dealers for execution on terms and at rates which it believes, in good faith, to be reasonable in view of the overall nature and quality of services provided by a particular broker/dealer, including brokerage and research services and sales of shares of the Fund and shares of other investment companies or series thereof for which the Investment Manager or an affiliate thereof serves as investment adviser. The Investment Manager may also allocate portfolio transactions to broker/dealers that remit a portion of their commissions as a credit against Fund expenses. With respect to brokerage and research services, the Investment Manager may consider in the selection of broker/dealers brokerage or research provided and payment may be made of a fee higher than that charged by another broker/dealer which does not furnish brokerage or research services or which furnishes brokerage or research services deemed to be of lesser value, so long as the criteria of Section 28(e) of the Securities Exchange Act of 1934, as amended, or other applicable laws are met. Although the Investment Manager may direct portfolio transactions without necessarily obtaining the lowest price at which such broker/dealer, or another, may be willing to do business, the Investment Manager shall seek the best value for the Fund on each trade that circumstances in the market place permit, including the value inherent in on-going relationships with quality brokers. To the extent any such brokerage or research services may be deemed to be additional compensation to the Investment Manager from the Fund, it is authorized by this Agreement. The Investment Manager may place brokerage for the Fund through an affiliate of the Investment Manager, provided that: the Fund not deal with such affiliate in any transaction in which such affiliate acts as principal; the commissions, fees or other remuneration received by such affiliate be reasonable and fair compared to the commissions, fees or other remuneration paid to other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time; and such brokerage be undertaken in compliance with applicable law. The Investment Manager's fees under this Agreement shall not be reduced by reason of any commissions, fees or other remuneration received by such affiliate from the Fund. 8. A. This Agreement shall become effective upon the date hereinabove written provided that this Agreement shall not take effect unless it has first been approved (i) by a vote of a majority of the Directors of the Fund who are not parties to this Agreement, or interested persons of any such party and (ii) by vote of a majority of the Fund's outstanding voting securities. B. Unless sooner terminated as provided herein, this Agreement shall continue in effect for two years from the above written date. Thereafter, if not terminated, this Agreement shall continue automatically for successive periods of twelve months each, provided that such continuance is specifically approved at least annually (i) by a vote of a majority of the Directors of the Fund who are not parties to this Agreement, or interested persons of any such party and (ii) by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Fund. C. This Agreement may be terminated without penalty at any time either by vote of the Board of Directors of the Fund or by vote of a majority of the Fund's outstanding voting securities on 60 days' written notice to the Investment Manager, or by the Investment Manager on 60 days' written notice to the Fund. This Agreement shall immediately terminate in the event of its assignment. 9. The Investment Manager shall not be liable to the Fund or any shareholder of the Fund for any error of judgment or mistake of law or for any loss suffered by the Fund or the Fund's shareholders in connection with the matters to which this Agreement relates, but nothing herein contained shall be construed to protect the Investment Manager against any liability to the Fund or the Fund's shareholders by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties or by reason of its reckless disregard of obligations and duties under this Agreement. 10. As used in this Agreement, the terms "interested person," "assignment," and "majority of the outstanding voting securities" shall have the meanings provided therefore in the 1940 Act, and the rules and regulations thereunder. 11. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement, with respect to the subject hereof whether oral or written. If any provision of this Agreement shall be held or made invalid by a court or regulatory agency, decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 12. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, provided, however, that nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or regulation promulgated thereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. ATTEST: INTERNET GROWTH FUND, INC. /s/ Monica Pelaez By: /s/ Thomas B. Winmill - --------------------------------- ----------------------------- ATTEST: CEF ADVISERS, INC. /s/ Irene K. Kawczynski By: /s/ William G. Vohrer - --------------------------------- ----------------------------- NON-EXCLUSIVE LICENSE AGREEMENT AGREEMENT dated as of December 11, 2002 between WINMILL & CO. INCORPORATED, a Delaware corporation (the "Licensor") and INTERNET GROWTH FUND, INC., a Maryland corporation (the "Licensee"). -49- W I T N E S S E T H WHEREAS, the Licensor is the owner of all right, title and interest in and to the service mark listed on Schedule A hereto, as such Schedule may be amended from time to time, (hereinafter collectively referred to as the "Licensed Mark"), and WHEREAS, the Licensee has requested a non-exclusive license to use the Licensed Mark in connection with its corporate activities, NOW, THEREFORE, the parties hereto agree as follows: 1. The Licensor grants to the Licensee the non-exclusive right to use the Licensed Mark in connection with its activities as an investment company. 2. The grant of the license provided for in paragraph 1 herein is personal, indivisible, non-exclusive and not subject to succession or transfer. 3. The Licensee agrees to follow all rules reasonably imposed by the Licensor to protect the Licensor's rights in the Licensed Mark. 4. The Licensee agrees that the nature and quality of all services rendered by the Licensee in connection with the Licensed Mark shall conform to standards set by the Licensor and be under control of the Licensor. 5. The license may be withdrawn by the Licensor at any time, in its sole discretion and without prior notice, in which case the Licensee shall have no further right whatsoever to use the Licensed Mark and the Licensee's shareholders, officers and directors shall promptly take whatever action may be necessary to eliminate all use of and reference to the Licensed Mark in the Licensor's name and otherwise. 6. In the event of termination as provided for in paragraph 5 herein, the Licensee agrees to promptly do all such acts and things as may be necessary to terminate its use of the Licensed Mark and will, after such termination, make no further reference to the Licensed Mark or any confusingly similar term in its business. 7. The Licensor and the Licensee agree to do all such further acts and things to effect the purposes of this Agreement. 8. The representations and warranties contained herein shall continue after and survive the termination of this Agreement. No provision of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by each party hereto. This agreement may not be assigned by the Licensee without the prior written consent of the Licensor, although the Licensor may assign this Agreement at any time without notice or penalty. Subject to the Licensee's Articles of Incorporation, with such amendments, if any, as may be in effect as of the date hereof, this Agreement supersedes any prior agreement between the parties. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. WINMILL & CO. INCORPORATED By: ----------------------------- INTERNET GROWTH FUND, INC. By: ----------------------------- AMENDED DEATH BENEFIT AGREEMENT THIS AGREEMENT, made and entered into this 16th day of April, 2002, by and between WINMILL & CO. INCORPORATED, a corporation organized and existing under the laws of the State of Delaware (hereinafter referred to as the "Employer") and BASSETT S. WINMILL (hereinafter referred to as the "Employee"). WHEREAS, It is the consensus of the Board of Directors of the Employer that the Employee's service to the Employer in the past has been of exceptional merit and has constituted an invaluable contribution to the general welfare of the Employer and to achieving its present status of operating efficiency and position in its field of activity; and The ability and experience of the Employee are such that assurance of his continued services is essential to the growth and performance of the Employer and it is in the best interests of the Employer to arrange terms of continued employment for the Employee so as to reasonably assure his remaining in the Employer's employment until his death; and It is the desire of the Employer that the Employee's services be retained as herein provided; and The Employee is willing to continue in the employ of the Employer provided the Employer agrees to pay certain benefits in accordance with the terms and conditions hereinafter set forth; NOW THEREFORE, In consideration of services performed in the past and to be performed in the future by the Employee, as well as of the mutual promises and covenants herein contained, it is hereby agreed as follows: Article FIRST: Definitions For the purposes of this Agreement, the following terms shall have meanings indicated below: (1) The term "Employee's Spouse" shall mean Sarah J. Winmill. (2) The term "CPI - U" shall mean the "Consumer Price Index for All Urban Consumers: U.S. City Average for All Items" published monthly by the Bureau of Labor Statistics of the United States Department of Labor. If the CPI - U is discontinued, the Employer shall use in lieu thereof a comparable consumer index pertaining to the purchasing power of the U.S. dollar published by the United States government, such comparable index to be chosen by the Employer in its sole discretion. (3) The term "Employee's Average Salary" shall mean 80% of the average annual salary of the Employee, including bonuses, calculated for the three (3) year period ending December 31 prior to the date of death of the Employee, as paid by Employer, its affiliates and subsidiaries, and any entities of which Employer owns at least 10%. (4) The term "Index Factor" shall mean a factor equal to the percentage increase or decrease in the CPI - U as measured from and after the preceding calendar year. (5) The term Annual Death Benefit Sum shall mean (i) an amount equal to the Employee's Average Salary increased or decreased on the first day of each year next following the date of the Employee's death by an amount which shall be equal to the product of the Employee's Average Salary multiplied by the Index Factor and (ii) such amount as shall be required from time to time to pay premiums for health insurance for the Employee's Spouse during her lifetime that shall be comparable to the health insurance provided by the Employer to its employees. Article SECOND: Death Benefit The Employer agrees to pay as a death benefit the Annual Death Benefit Sum in semi-monthly installments to the Employee's Spouse each year during her lifetime. The first installment shall be due the first day of the month next following the Employee's death. In no event shall the Employee or his estate have any right to receive the, death benefit or any installments described herein or in any way to alter the receipt of such semi-monthly installments. Article THIRD: Forfeitable Benefits - Voluntary or Other Termination of Services, or Discharge In the event that prior to the Employee's death, the Employee shall terminate his employment with the Employer or shall be discharged for action inimical to the corporate interests of the Employer, which shall be in the sole determination of the Board of Directors of the Employer, this Agreement shall terminate upon the date of such termination of employment or discharge and no benefits or payments of any kind shall be made hereunder. Article FOURTH: Non-Alienability Neither the Employee nor the Employee's Spouse under this Agreement shall have the power or right to transfer, assign, anticipate, mortgage, commute, or otherwise encumber in advance any installment payable hereunder, nor shall any said monthly installment be subject to seizure for the payment of any debts or judgments or be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. In the event the foregoing restriction is violated, all installments shall cease and terminate. Article FIFTH: Participation in Other Plans Nothing contained in this Agreement shall be construed to alter, abridge or in any manner affect the rights and privileges of the Employee to participate in any pension or profit-sharing plan that the Employer may now or hereafter provide. Article SIXTH: Benefits and Burdens This Agreement shall be binding upon and inure to the benefit of the Employee and the Employee's Spouse and it shall be binding, on the Employer and any successor organization which shall succeed to substantially all of the Employer s assets. Article SEVENTH: Governing Law, Etc. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. This Agreement sets forth the entire Agreement between the parties concerning the subject matter thereof, and any amendment or discharge to this Agreement shall be in writing and signed by the parties hereto. This Amended Agreement is intended to replace the Death Benefit Agreement dated July 22, 1994 between the Employer and Employee, which shall be of no further force or effect. Article EIGHTH: Not an Employment Contract This Agreement shall not be deemed to constitute a contract of employment between the parties hereto, nor shall any provision herein restrict the right of the Employer to discharge the Employee or restrict the right of the Employee to terminate his employment. IN WITNESS WHEREOF, the Employer has caused its name to be here under executed by its duly authorized officer, duly attested by its Secretary, and the Employee has hereunto set his hand seal the day and year first above written. WINMILL & CO. INCORPORATED Attest: /s/ By: /s/ ---------------- ------------------ /s/ (L.S.) ------------------------ Bassett S. Winmill -----END PRIVACY-ENHANCED MESSAGE-----