As filed with the Securities and Exchange Commission on MARCH 31, 1998
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(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, 1997
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 BULL &
BEAR GROUP, INC.
(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-K 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 III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
No voting stock was held by non-affiliates of the registrant as of March
15, 1998.
The number of shares outstanding of each of the registrant's classes of
common stock, as of March 15, 1998:
Class A Non-Voting Common Stock, par value $.01 per share - 1,350,017 shares
Class B Voting Common Stock, par value $.01 per share - 20,000
<PAGE>
PART I
ITEM PAGE
1. Business 2
2. Properties 6
3. Legal Proceedings 7
PART II
4. Submission of Matters to a Vote of Security Holder 8
5. Market for Company's Common Equity and Related
Stockholder Matters 8
6. Selected Financial Data 8
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
8. Financial Statements and Supplementary Data 12
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 29
PART III
10. Directors and Executive Officers 30
11. Executive Compensation 32
12. Security Ownership of Certain Beneficial Owners and
Management 38
13. Certain Relationships and Related Transactions 39
PART IV
14. Exhibits, Consolidated Financial Statements and Schedules,
and Reports on Form 8-K 40
<PAGE>
PART I
ITEM 1. BUSINESS
Bull & Bear Group, Inc., a Delaware corporation (the "Company"), is a
holding company with seven principal subsidiaries: Bull & Bear Advisers, Inc.
("BBAI"), Bull & Bear Securities, Inc. ("BBSI"), Investor Service Center, Inc.
("ISC"), Midas Management Corporation ("MMC"), Rockwood Advisers, Inc. ("RAI"),
Performance Properties, Inc. ("Performance Properties") and Hanover Direct
Advertising Company, Inc.("Hanover Direct").
BBAI, MMC and RAI 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: Bull & Bear Special
Equities Fund, Inc.; Bull & Bear Gold Investors Ltd.; Bull & Bear U.S. and
Overseas Fund, a series of shares issued by Bull & Bear Funds I, Inc.; Bull &
Bear Dollar Reserves, a series of shares of Bull & Bear Funds II, Inc.; Midas
Fund, Inc.; and Rockwood Fund, Inc. The closed-end funds are: Bull & Bear Global
Income Fund, Inc., Bull & Bear U.S. Government Securities Fund, Inc. and Bull &
Bear Municipal Income Fund, Inc.
BBSI was organized in 1984 to operate a discount brokerage service. BBSI
has access to every major U.S. stock, option and bond exchange as well as the
over-the-counter market. Investors may use the discount brokerage services
provided by BBSI to trade stocks, bonds and options at substantial commission
discounts from full cost rates, access their investment in any of the Funds to
pay for securities purchased, or invest proceeds of sales of securities in the
Funds. BBSI is registered with the Securities and Exchange Commission ("SEC") as
a broker/dealer and is a member of the National Association of Securities
Dealers, Inc. ("NASD") and Securities Investor Protection Corporation ("SIPC").
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 and shareholder administrator for the open-end Funds.
Performance Properties was organized in 1994 to invest in real estate.
Hanover Direct was organized in 1988 and acts as an advertising agency,
which places advertising for ISC on behalf of the Funds and for BBSI. Currently,
the commission revenue generated by Hanover Direct from ISC and BBSI represents
a recapture of sums paid for advertising and, rather than additional income,
represents a reduction in advertising expense of ISC and BBSI. Hanover Direct
has not performed any work for unaffiliated clients.
The Company has granted the Funds and its subsidiaries a non-exclusive
license to use service marks owned by the Company, including "Bull & Bear,"
"Bull & Bear Performance Driven," "Midas," and "Performance Driven" 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.
2
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INVESTMENT MANAGEMENT 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, 1997 were as follows:
Bull & Bear Dollar Reserves $ 61,590,000
Bull & Bear Global Income Fund, Inc. 24,148,000
Bull & Bear Gold Investors Ltd. 9,363,000
Bull & Bear Municipal Income Fund, Inc. 12,139,000
Bull & Bear Special Equities Fund, Inc. 44,773,000
Bull & Bear U.S. and Overseas Fund 8,877,000
Bull & Bear U.S. Government Securities Fund, Inc. 10,985,000
Midas Fund, Inc. 100,821,000
Rockwood Fund, Inc. 1,365,000
---------------
TOTAL NET ASSETS $274,061,000
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 Congress, governmental agencies and special interest groups have
been struggling with regulatory problems created by consolidation of the
financial services industry, the Company continues to develop products to meet
the specialized requirements of investors. 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, Bull & Bear 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, BBAI, MMC and RAI may receive management fees ranging from 0.4% to
1.0% per annum of the Funds' average daily net assets. 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. Depending on the assets of the Fund involved and other factors, the
termination of any of the agreements for investment management services between
any of the Funds, BBAI, MMC and RAI may have a serious adverse impact upon the
Company.
3
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Pursuant to contracts with these Funds, BBAI, MMC and RAI are entitled to
management fees, which are received monthly and are based on annual percentages
of the average daily net assets of the Funds. Under the contracts, BBAI, MMC and
RAI 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 BBAI, MMC and RAI may waive or
reimburse management fees to increase a Fund's performance. MMC has entered into
a subadvisory agreement with respect to Midas Fund, Inc. MMC not the respective
Fund, pays the Subadviser, Lion Resource Management Limited, based upon the net
fees, performance and net assets of the Fund.
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.
Bull & Bear U.S. Government Securities Fund, Bull & Bear Municipal Income
Fund, and Bull & Bear Global Income Fund converted from an open-end investment
company to a closed-end investment company in October 1996, November 1996, and
February 1997, respectively, pursuant to the vote of the Fund's shareowners and
their shares commenced trading on the American Stock Exchange under the symbols
BBG, BBM and BBZ, respectively. Upon conversion, the Distribution, 12b-1 Plan,
and Shareholder Administration Agreements between the respective Fund and ISC
were terminated and substantially similar Investment Management Agreements
between BBAI and each Fund were approved.
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.
BBAI, MMC and RAI 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 are registered with the SEC under the Act. The activities of
BBAI, MMC and RAI 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 manager, are
primarily designed to protect the shareholders of the Funds and not the
shareholders of the Company.
DISCOUNT BROKERAGE BUSINESS
BBSI, with access to every major U.S. stock, option and bond exchange as
well as the over-the-counter market, provides discount brokerage services to
investors throughout the United States and various foreign countries.
Substantial commission savings off full service rates as well as prompt,
courteous service and professional order execution are available to all accounts
regardless of how often trades are made. All accounts are carried by U.S.
Clearing Corp., a division of Fleet Securities, Inc., a New York Stock Exchange
member firm.
The SIPC, of which BBSI and U.S. Clearing Corp. are members, protects each
account against broker/dealer insolvency (not market losses) for up to $500,000,
of which $100,000 may be in cash. In addition, Aetna Casualty and Surety Company
protects each account for an additional $49,500,000 in securities value.
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BBSI offers investors commission savings of up to 84% over full cost
brokers and guarantees commissions 20% less than Charles Schwab & Co. on every
stock, bond and option trade. BBSI customers may save an additional 10% in
commissions with every trade entered via touch-tone telephone (Market Touch) or
through proprietary PC software (Market Touch Plus).
Investors may also buy and sell listed and NASDAQ stocks for a flat $19.95
for up to 1,000 shares, $.02 per share thereafter through the internet at Bull &
Bear Securities' web page, ebullbear.com. In addition to efficiency and low
commissions, ebullbear.com customers receive free investment information on over
6,000 companies, plus quotes, charts, market averages, and free live market and
business news through Reuters, one's of the world's leading news and financial
information companies. BBSI customers are provided with free investment
information from Standard & Poor's, including the year-end Stock Guide, Market
Month, Stock Reports, Stock Screens, Industry Reports, The Outlook, and Emerging
& Special Situations.
In May of 1997, BBSI became an AAdvantage Participant with American
Airlines whereby BBSI customers may earn AAdvantage miles for their investing
activities: 1,000 miles for opening an account, 200 miles for every trade, up to
2,000 miles for each full account transfer, up to 5,000 miles per year for
maintaining account equity at certain levels, 500 miles for the first electronic
trade and 500 miles per customer referral.
BBSI also offers its customers a no-fee cash management service featuring
unlimited free check writing with no check writing minimum (Bull & Bear
Performance Plus Account7), the Bull & Bear No-Fee IRA7, and Bull & Bear Mutual
Funds Network (a no transaction fee, no-load mutual funds service).
Volatile stock markets could have a significant effect on the brokerage
commissions earned by BBSI by affecting the number of transactions processed.
BBSI is responsible for potential losses resulting from trade errors of BBSI
personnel and customers' bad debts, including under-margined accounts. As a
discount broker, BBSI does not give investment advice and therefore management
believes it is less likely to be involved in significant litigation with
customers, as may be typical in the ordinary course of business of a broker that
does give investment advice to its customers.
FORWARD-LOOKING INFORMATION
Information or statements provided by or on behalf of the Company from
time to time, including those within this Form 10-K 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 and discount brokerage
customers' equity and trading, 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.
5
<PAGE>
The Company's future revenues may fluctuate due to factors such as: the
total value and composition of assets under management and discount brokerage
customers' equity and trading, and related cash inflows or outflows in mutual
funds and discount brokerage firms; fluctuations in the financial markets
resulting in appreciation or depreciation of assets under management and
discount brokerage customers' equity and trading; 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 and discount brokerage firms; the ability of the
Company to maintain investment management fees and brokerage commissions at
current levels; competitive conditions in the mutual funds and discount
brokerage industries; the introduction of new mutual funds and investment
products and new discount brokerage services; the ability of the Company to
contract with the Funds for payment for administrative 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 investment
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; 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 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. The approximate area of the office is 11,400 square feet.
The rent is approximately $144,000 per annum plus $32,550 per annum for
electricity. The lease expires on December 31, 1998 and is cancelable at the
option of the Company on three months' notice. BBSI has a branch office at 395
East Palmetto Boulevard, Boca Raton, Florida consisting of approximately 2,000
square feet. A portion of the rent is approximately $55,000 per annum and the
lease expires on August 30, 1999.
Performance Properties purchased land and a two story office building
located in Red Bank, New Jersey in 1994. The building consists of approximately
13,000 square feet. The building was purchased for cash, has no mortgage and was
purchased as an investment. A portion of the second floor of the building is
currently being rented under a five-year lease to a tenant. The current rent is
approximately $33,000 per annum and increases each year over the life of the
lease.
6
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ITEM 3. LEGAL PROCEEDINGS
The Company and its directors are defendants in a lawsuit brought on April
24, 1995 by Maxus Investment Group, Maxus Capital Partners, Maxus Asset
Management, Inc., and Maxus Securities Corp. (collectively "Maxus"), which now
claim to collectively own or control 144,000 shares, or approximately 10.7% of
the Class A common stock of the Company. The action, seeking declaratory and
injunctive relief, was filed in the federal district court for the Southern
District of New York and purports to be brought on the plaintiffs' own behalf
and derivatively on behalf of the Company. On April 11, 1996, the district court
dismissed as a matter of law all claims brought by the plaintiffs except those
relating to the voiding of 1993 exercises, the exercise of certain 1990 stock
options and plaintiffs' request for attorneys' fees from the Company. Defendants
thereafter filed answers denying liability. The Company believes that the
lawsuit is without merit and intends to continue defending the remaining claims
vigorously.
Although a group called Karpus Investment Management ("KIM") previously
failed to elect its slate of nominees in opposition to management at the 1997
annual meeting of stockholders of Bull & Bear U.S. Government Securities Fund,
Inc. ("BBG"), a closed-end fund managed by BBAI, another BBG annual meeting is
scheduled for 1998. In addition, on February 19, 1998, BBG filed a lawsuit
against KIM in the United States District Court for the Southern District of New
York, 98 Civ. 1190, and KIM filed a lawsuit against BBG in the Circuit Court for
Baltimore City, Maryland, Case No. 9805005. The outcome of these matters and
their effect on the Company or BBAI's management agreement with BBG cannot be
predicted with certainty.
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, 1997, 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.
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PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS DURING FOURTH
QUARTER OF THE YEAR ENDED DECEMBER 31, 1997
- -------
By unanimous written consent of the Class B shareholder on October 29,
1997, the actions of the Board of Directors of the Company in adopting the Bull
& Bear Group, Inc. 1995 Long-Term Incentive Plan, As Amended, were ratified and
approved.
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Class A Common Stock trades on the Nasdaq SmallCap Market
tier of the Nasdaq Stock Market under the symbol BNBGA. The Company's Class B
Common Stock has no public trading market. There are approximately 300 holders
of record of Class A Common Stock and 1 holder of Class B Common Stock as of
December 31, 1997. 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:
1997 1996
-------------- --------------
HIGH LOW HIGH LOW
First Quarter $4-3/8 $2-3/4 $6-3/4 $1-5/8
Second Quarter $4-3/8 $2-7/8 $5-3/8 $3-1/4
Third Quarter $3-1/8 $2-5/8 $4 $2-1/2
Fourth Quarter $3-5/16 $2-1/4 $3-1/4 $2-7/8
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data for the five years ended December 31, 1997 is
presented on the following pages.
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<TABLE>
<CAPTION>
BULL & BEAR GROUP, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
FOR THE YEARS ENDED DECEMBER 31,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
REVENUES:
<S> <C> <C> <C> <C> <C>
Management, distribution and administration fees $4,313,947 $4,922,945 $3,322,348 $3,786,066 $4,092,229
Brokerage commissions 2,452,272 2,351,983 1,821,513 1,768,527 2,047,999
Dividends, interest and other 221,198 142,084 147,169 (7,378) 227,422
------------ ------------ ------------ ------------- -----------
6,987,417 7,417,012 5,291,030 5,547,215 6,367,650
----------- ----------- ----------- ----------- -----------
EXPENSES:
General and administrative 3,903,524 4,040,219 3,195,115 3,225,891 3,519,704
Marketing 1,081,050 1,821,297 779,026 1,361,155 1,389,204
Clearing and brokerage charges 621,412 708,535 576,096 532,832 619,673
Subadvisory fees 387,593 705,248 22,496 37,728 34,629
Professional fees 201,417 296,874 431,934 170,284 170,687
Amortization and depreciation 131,992 138,116 97,399 98,094 125,399
------------ ------------ ------------- ------------ -----------
6,326,988 7,710,289 5,102,066 5,425,984 5,859,296
----------- ----------- ----------- ----------- -----------
Income (loss) before provision for income taxes 660,429 (293,277) 188,964 121,231 508,354
INCOME TAXES 34,704 27,248 32,588 37,771 39,149
------------ ------------- ------------- ------------ -----------
NET INCOME (LOSS) $ 625,725 $ (320,525) $ 156,376 $ 83,460 $ 469,205
=========== =========== =========== ============ ===========
NET INCOME (LOSS) PER SHARE OF WEIGHTED
AVERAGE COMMON STOCK OUTSTANDING:
Basic $.46 $(.23) $.10 $.05 $.37
==== ===== ==== ==== ====
Diluted $.43 $(.23) $.10 $.05 $.32
==== ===== ==== ==== ====
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic 1,370,017 1,369,555 1,499,516 1,523,152 1,257,844
=========== =========== =========== =========== ===========
Diluted 1,468,252 1,369,555 1,549,815 1,610,658 1,480,654
=========== =========== =========== =========== ===========
TOTAL ASSETS $4,827,074 $4,273,110 $4,963,792 $4,240,241 $4,711,438
========== ========== ========== ========== ==========
LONG-TERM OBLIGATIONS $ 7,460 $ 22,093 $ - $ - $ -
========== ========== =========== ========== =========
</TABLE>
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
1997 Compared to 1996
Total revenues for the year decreased $429,595 or 5.8%. Management and
distribution fees decreased $215,407 or 6.9% and $429,986 or 27.4%,
respectively, and shareholder administration fees increased $36,395 or 14.6%.
The decrease in management and distribution fees was due to an overall decrease
in the net asset levels of the Funds from which these revenues are generated.
Shareholder administration fees represent reimbursement for actual expenses
incurred. Such fees increase as the costs for providing these services increase.
Net assets under management were approximately $401 million to December 31,
1996, $359 million at March 31, 1997, $328 million at June 30, 1997, $353
million at September 30, 1997 and $274 million at December 31, 1997. Brokerage
commissions increased $100,289 or 4.3% while brokerage customers' equity
increased to $244 million or 30%. The increase in brokerage commissions was due
to an increase in customer transaction activity. Dividends, interest and other
income increased $79,114 or 55.7% primarily due to gains on sales of
investments.
Total expenses, including income taxes decreased $1,375,845 or 17.8% for
the year. General and administrative expenses decreased $136,695 or 3.4%.
Marketing expenses decreased $740,247 or 40.6% due to lower marketing costs for
the Midas Fund. Clearing and brokerage charges decreased $87,123 or 12.3% due to
the savings from a new clearing agreement beginning July 1996. Subadvisory fees
decreased $317,655 or 45.0% because of lower net assets in the Midas Fund.
Professional fees decreased $95,457 or 32.2% due to lower litigation costs
relating to the Maxus lawsuit. Amortization and depreciation decreased $6,124 or
4.4% for the year.
Net income for 1997 was $625,725 or $.46 per share as compared to net loss
of $320,525 or $.23 per share in 1996.
1996 COMPARED TO 1995
Total revenues for the year increased $2,125,982 or 40.2%. Management and
distribution fees increased $1,429,766 or 85.5% and $284,319 or 22.1%,
respectively, and shareholder administration fees decreased $113,488 or 31.2%.
The increase in management and distribution fees was due to an overall increase
in the net asset levels of the Funds from which these revenues are generated.
Shareholder administration fees represent reimbursement for actual expenses
incurred. Such fees decreased as the costs for providing these services
decreased. Net assets under management were approximately $237.4 million at
December 31, 1995, $317.6 million at March 31, 1996, $393.2 million at June 30,
1996, $432.1 million at September 30, 1996, and $400.9 million at December 31,
1996. Brokerage commissions increased $530,470 or 29.1% while brokerage
customers' equity increased to $187 million or 28%. The increase in brokerage
commissions was due to an increase in customer transaction activity and the
continued growth in the number of discount brokerage accounts and customers'
equity. Dividends, interest and other amounted to $142,084 in 1996 compared to
$147,169 in 1995. Dividends and interest decreased $5,085 or 3.5% due to lower
earnings on the Company's short term investments.
Total expenses increased $2,608,223 or 51.1% for the year. General and
administrative expenses increased $845,104 or 26.4% because of higher
compensation, higher bonuses paid to employees of the Company relating to the
growth in the Company's businesses and higher expense reimbursements for the
Funds. Marketing expenses increased $1,042,271 or 133.8% primarily related to
the launching of the Midas Fund during the first six months of 1996. In
addition, the Company incurred increased marketing expenses relating to the
introduction of Bull & Bear Online Investment Center and the promotion of the
American Airlines7 AAdvantage Miles7 program through Bull & Bear Securities,
Inc. Clearing and brokerage charges increased $132,439 or 23.0% because of an
increased level of discount brokerage customer transactions processed.
Professional fees decreased $135,060 or 31.3% due to lower litigation costs
relating to the Maxus lawsuit. Subadvisory fees increased $682,752 because of
the growth in assets of the Midas Fund.
Amortization and depreciation increased $40,717 or 41.8% for the year.
Net loss for 1996 was $320,525 or $.22 per share as compared to net income
of $156,376 or $.10 per share in 1995.
10
<PAGE>
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,
1997 1996 1995
---- ---- ----
Working Capital $2,662,917 $2,293,200 $2,792,059
Total Assets $4,827,074 $4,273,110 $4,963,792
Long-Term Debt $ 7,460 $ 22,093 $ -
Shareholders' Equity $4,455,111 $3,917,886 $4,170,095
For the year ended 1997, working capital, total assets and shareholders'
equity increased $369,717, $553,964 and $537,225, respectively. Long-term debt
decreased $14,633.
Working capital increased primarily as a result of the net income and the
non-cash items of depreciation and amortization for 1997 offset by improvements
to real estate held for investment, purchases of equipment and the decrease in
unrealized capital gains on marketable securities. The increase in shareholders'
equity was primarily the result of the net income for 1997 of $625,725 offset by
the decrease in unrealized capital gains on marketable securities of $88,500.
Total assets increased primarily as a result of the net income for 1997 offset
by the decrease in unrealized capital gains on marketable securities of $88,500.
Long-term debt decreased due to payments on the capitalized lease obligations.
For the year ended 1996, working capital, total assets and shareholders'
equity decreased $498,859, $690,682 and $252,209, respectively. Long-term debt
increased $22,093.
Working capital decreased as a result of the net loss for 1996 and the
acquisition of intangible assets and fixed assets offset by the non-cash items
of depreciation and amortization. The decrease in shareholders' equity was
primarily the result of the net loss for 1996 of $320,525 offset by the issuance
of common stock on exercise of stock options of $3,750 and the increase in
unrealized capital gains on marketable securities of $64,566. Total assets
decreased as a result of the net loss and the decrease in current liabilities
offset by the increase in unrealized gains on marketable securities. Long-term
debt increased due to the capitalized lease obligations for equipment.
For the year 1995, working capital, total assets and shareholders' equity
increased $12,337, $723,551 and $260,396, respectively.
Working capital increased as a result of the net income for 1995, the
non-cash expense items of depreciation and amortization offset by the
acquisition of intangible assets and fixed assets. The increase in shareholders'
equity was primarily the result of the net income for 1995 of $156,376, the
issuance of common stock on exercise of stock options of $33,000 and the
unrealized capital gains on marketable securities of $66,020. Total assets
increased as a result of net income, the unrealized gains on marketable
securities and the increase in current liabilities.
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 the Company from BBSI and ISC as a result of
their regulatory net capital requirements. At December 31, 1997, the amount
subject to these restrictions was $275,000 or 5.7% of total assets.
EFFECTS OF INFLATION AND CHANGING PRICES
Since the Company derives revenue from investment management, distribution
and shareholder administration services from the Funds and from discount
brokerage services, 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.
11
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements required by Regulation S-X and Supplementary
Financial Information required by Regulation S-K are presented herein.
FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES
TABLE OF CONTENTS
PAGE
Report of Independent Certified Public Accountants 13
Consolidated Balance Sheets,
December 31, 1997 and 1996 14
Consolidated Statements of Income,
Years ended December 31, 1997, 1996 and 1995 15
Consolidated Statements of Changes in Shareholders' Equity,
Years ended December 31, 1997, 1996 and 1995 16
Consolidated Statements of Cash Flows,
Years ended December 31, 1997, 1996 and 1995 17
Notes to Consolidated Financial Statements 19
12
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
BULL & BEAR GROUP, INC.:
We have audited the accompanying consolidated balance sheets of Bull & Bear
Group, Inc. and subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1997. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Bull & Bear Group,
Inc. and subsidiaries at December 31, 1997 and 1996, and the consolidated
results of their operations and their consolidated cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
PHILADELPHIA, PENNSYLVANIA
FEBRUARY 19, 1998
13
<PAGE>
BULL & BEAR GROUP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
<TABLE>
<CAPTION>
1997 1996
---- ----
ASSETS
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 312,633 $ 747,444
Marketable securities (Note 3) 1,846,028 1,176,547
Management, distribution and shareholder administration
fees receivable 268,984 207,944
Interest, dividends and other receivables 187,954 204,684
Prepaid expenses and other current assets 411,821 289,712
------------- -------------
TOTAL CURRENT ASSETS 3,027,420 2,626,331
------------- -------------
REAL ESTATE HELD FOR INVESTMENT, NET 632,682 438,187
EQUIPMENT, FURNITURE AND FIXTURES, NET 196,416 237,851
EXCESS OF COST OVER NET BOOK VALUE OF SUBSIDIARIES, NET (Note 2) 727,373 765,665
OTHER ASSETS 243,183 205,076
------------- -------------
1,799,654 1,646,779
------------- -------------
TOTAL ASSETS $ 4,827,074 $ 4,273,110
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 160,849 $ 134,544
Accrued professional fees 93,335 81,285
Accrued payroll and other related costs 41,042 53,012
Accrued other expenses 45,225 40,388
Current portion of capitalized lease obligation (Note 4) 13,644 12,282
Other current liabilities 10,408 11,620
------------- -------------
TOTAL CURRENT LIABILITIES 364,503 333,131
------------- -------------
CAPITALIZED LEASE OBLIGATION (Note 4) 7,460 22,093
------------- -------------
CONTINGENCIES (Note 11) - -
SHAREHOLDERS' EQUITY (Notes 3, 5, 6, and 7) Common Stock, $.01 par value Class
A, 10,000,000 shares authorized;
1,350,017 shares issued and outstanding 13,501 13,501
Class B, 20,000 shares authorized;
20,000 shares issued and outstanding 200 200
Additional paid-in capital 6,236,077 6,236,077
Retained earnings (deficit) (1,836,753) (2,462,478)
Unrealized gains on marketable securities 42,086 130,586
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 4,455,111 3,917,886
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 4,827,074 $ 4,273,110
============= =============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
14
<PAGE>
BULL & BEAR GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
REVENUES:
Management, distribution and shareholder
<S> <C> <C> <C>
administration fees $ 4,313,947 $ 4,922,945 $ 3,322,348
Brokerage commissions and fees 2,452,272 2,351,983 1,821,513
Realized gains from investments 83,608 22,092 -
Dividends, interest and other 137,590 119,992 147,169
------------- ------------ ------------
6,987,417 7,417,012 5,291,030
------------- ------------ ------------
EXPENSES:
General and administrative 3,287,781 3,504,317 2,924,882
Marketing 1,081,050 1,821,297 779,026
Clearing and brokerage charges 621,412 708,535 576,096
Expense reimbursements to the Funds (Note 10) 615,743 535,902 270,233
Subadvisory fees 387,593 705,248 22,496
Professional fees 201,417 296,874 431,934
Amortization and depreciation 131,992 138,116 97,399
------------- ------------ ------------
6,326,988 7,710,289 5,102,066
------------- ------------ ------------
Income (loss) before income taxes 660,429 (293,277) 188,964
Income taxes (Note 9) 34,704 27,248 32,588
------------- ------------ ------------
NET INCOME (LOSS) $ 625,725 $ (320,525) $ 156,376
============= ============ ============
PER SHARE DATA:
Basic $.46 $(.23) $.10
==== ===== ====
Diluted $.43 $(.23) $.10
==== ===== ====
AVERAGE SHARES OUTSTANDING:
Basic 1,370,017 1,369,555 1,499,516
========= ========= =========
Diluted 1,468,252 1,369,555 1,549,815
========= ========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
15
<PAGE>
<TABLE>
<CAPTION>
BULL & BEAR GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
NUMBER OF SHARES AMOUNT
NOTES
RECEIVABLE
FOR UNREALIZED
ADDITIONAL COMMON RETAINED GAINS ON TOTAL
CLASS A CLASS B CLASS A CLASS B PAID-IN STOCK EARNINGS MARKETABLE SHAREHOLDERS'
COMMON COMMON COMMON COMMON CAPITAL ISSUED (DEFICIT) SECURITIES EQUITY
------ ------ ------ ------ ---------- ---------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 1,503,152 20,000 $15,032 $200 $6,497,796 $(305,000) $(2,298,329) $ - $3,909,699
Voiding of 1993 exercise of
stock options and
cancellation of notes
receivable (Note 7) (280,000) - (2,800) - (297,200) 300,000 - - -
Issuance of Class A common
stock on exercise
of stock options 274,020 - 2,740 - 291,280 - - - 294,020
Received in exchange for
exercise of stock options (149,155) - (1,491) - (259,529) - - - (261,020)
Collection of note receivable - - - - - 5,000 - - 5,000
Net income - - - - - - 156,376 - 156,376
Unrealized gains on
marketable securities - - - - - - - 66,020 66,020
------------------------------------------------ ------------------------------------------------------
BALANCE, DECEMBER 31, 1995 1,348,017 20,000 13,481 200 6,232,347 - (2,141,953) 66,020 4,170,095
Issuance of Class A common
stock on exercise
of stock options 2,000 - 20 - 3,730 - - - 3,750
Net loss - - - - - - (320,525) - (320,525)
Unrealized gains on
marketable securities - - - - - - - 64,566 64,566
--------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1996 1,350,017 20,000 13,501 200 6,236,077 - (2,462,478) 130,586 3,917,886
Net income - - - - - - 625,725 - 625,725
Unrealized losses on
marketable securities - - - - - - - (88,500) (88,500)
----------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 1,350,017 20,000 $13,501 $200 $6,236,077$ - $(1,836,753) $ 42,086 $4,455,111
========= ====== ======= ==== ===================================== ========= ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
16
<PAGE>
BULL & BEAR GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
NET INCOME (LOSS) $ 625,725 $ (320,525) $ 156,376
------------ ------------ --------------
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Depreciation and amortization 131,992 138,116 97,399
Increase in cash value of life insurance (32,333) (30,000) (30,000)
Realized/unrealized (gain) loss on investments (83,608) (32,725) (26,048)
(Increase) decrease in:
Management, distribution and shareholder
administration fees receivable (61,040) (28,735) (18,642)
Interest, dividends and other receivables 16,730 43,557 (32,387)
Prepaid expenses and other current assets (122,109) 143,858 (199,301)
Other assets (5,774) (48,401) 12,802
Increase (decrease) in:
Accounts payable 26,305 (475,698) 412,719
Accrued expenses 4,917 4,610 51,156
Other current liabilities (1,212) (1,760) (720)
------------ ------------ --------------
TOTAL ADJUSTMENTS (126,132) (287,178) 266,978
------------ ------------ -------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 499,593 (607,703) 423,354
------------ ------------ -------------
</TABLE>
17
<PAGE>
BULL & BEAR GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
<S> <C> <C> <C>
Improvement to real estate held for investment $ (218,956) $ (204,642) $ (2,105)
Capital expenditures (27,804) (100,799) (58,744)
Proceeds from sale of Bull & Bear Properties, Inc. - 43,763 -
Proceeds from sales of investments 556,831 963,318 414,790
Purchases of investments (1,231,204) (785,512) (1,396,250)
Acquisition of intangible assets - (66,780) (267,411)
-------------- ------------ --------------
NET CASH USED IN INVESTING ACTIVITIES (921,133) (150,652) (1,309,720)
-------------- ------------ --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Collection of note receivable - - 5,000
Increase in capitalized lease obligation - 46,416 -
Repayments of capitalized lease obligation (13,271) (12,041) -
Proceeds from issuance of Class A Common Stock - 3,750 33,000
-------------- ----------- -------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (13,271) 38,125 38,000
-------------- ----------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (434,811) (720,230) (848,366)
CASH AND CASH EQUIVALENTS:
Beginning of year 747,444 1,467,674 2,316,040
-------------- ----------- -------------
END OF YEAR $ 312,633 $ 747,444 $ 1,467,674
============== =========== =============
</TABLE>
SUPPLEMENTAL DISCLOSURE:
The Company did not pay any Federal income taxes in 1997, 1996 or 1995.
The Company paid $916 and $1,309 in interest in 1997 and 1996 and no interest
in 1995.
Common stock received and retired in exchange for exercise of stock options
was $261,020 in 1995.
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
18
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Bull & Bear Group, Inc. ("Company") is a holding company. Its
subsidiaries' business consists of providing investment management,
distribution and shareholder administration services for the Bull &
Bear Funds, Midas Fund and Rockwood Fund ("Funds") and discount
brokerage services.
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 generally accepted
accounting principles, 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, 1997 and 1996, the Company and
subsidiaries had invested approximately $260,300 and $657,500,
respectively, 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. Marketable securities for the broker/dealer
subsidiaries are valued at market with unrealized gains and losses
included in earnings.
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
In the normal course of business, the Company's customer activities
involve the execution and settlement of customer transactions. These
activities may expose the Company to risk of loss in the event the
customer is unable to fulfill its contracted obligations, in which case
the Company may have to purchase or sell financial instruments at
prevailing market prices. Any loss from such transactions is not
expected to have a material effect on the Company's financial
statements.
19
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
BROKERAGE INCOME AND EXPENSES
Brokerage commission and fee income and clearing and brokerage expenses
are recorded on a settlement date basis. The difference between
recording such income and expenses on a settlement date basis as
opposed to trade date, as required by generally accepted accounting
principles, is not material to the consolidated financial statements.
INCOME TAXES
The Company and its wholly-owned subsidiaries file consolidated income
tax returns. 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.
REAL ESTATE HELD FOR INVESTMENT AND EQUIPMENT
Real estate held for investment is recorded at cost and is depreciated
on the straight-line basis over its estimated useful life. At December
31, 1997 and 1996, accumulated depreciation amounted to approximately
$51,600 and $27,400, respectively. 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, 1997
and 1996, accumulated depreciation amounted to approximately $818,900
and $749,300, respectively.
EXCESS OF COST OVER NET BOOK VALUE OF SUBSIDIARIES
The excess of cost over net book value of subsidiaries is capitalized
and amortized over fifteen and forty years using the straight-line
method. At December 31, 1997 and 1996, accumulated amortization
amounted to approximately $623,400 and $585,100, respectively.
Periodically, the Company reviews its intangible assets for events or
changes in circumstances that may indicate that the carrying amounts of
the assets are not recoverable.
EARNINGS PER SHARE
The Company adopted Statement of Financial Accounting Standards No. 128
"Earnings Per Share" in 1997. The earnings per share for 1996 and 1995
have been restated to conform to the provisions of this statement.
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.
20
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
The following table sets forth the computation of basic and diluted
earnings per share:
1997 1996 1995
---- ---- ----
Numerator for basic and diluted
earnings per share:
Net income (loss) $ 625,725 $ (320,525) $ 156,376
=========== ============ ===========
Denominator:
Denominator for basic earnings
per share weighted-average shares 1,370,017 1,369,555 1,499,516
Effect of dilutive securities:
Employee Stock Options 98,235 - 50,299
------------ ------------ -----------
Denominator for diluted earnings
per share adjusted weighted
average shares and assumed
conversions 1,468,252 1,369,555 1,549,815
=========== =========== ===========
RECLASSIFICATIONS
Certain reclassifications of the 1996 and 1995 financial statements
have been made to conform to the 1997 presentation.
2. ACQUISITION
During the year ended December 31, 1996, the Company acquired the
management of Rockwood Fund for approximately $31,300. This purchase was
capitalized as part of excess of cost over net book value and is being
amortized over 15 years using the straight-line method.
During the year ended December 31, 1995, the Company purchased the assets
relating to the management of Midas Fund, Inc. for $182,500, plus related
costs of approximately $84,900. In addition, the Company expended
approximately $35,500 in connection with this purchase in 1996. This
purchase was capitalized as part of excess of cost over net book value and
is being amortized over 15 years using the straight-line method.
21
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
3. MARKETABLE SECURITIES
At December 31, 1997, marketable securities consisted of:
Broker/dealer securities - at market
U.S. Treasury Notes, due 6/30/99 - 9/30/00 (cost $1,260,380) $1,265,943
----------
Other companies
Available-for-sale securities - at market
Unaffiliated mutual funds 36,324
Affiliated mutual funds 3,157
Equity securities 186,884
U.S. Treasury Notes, due 9/30/00 353,720
------------
Total available-for-sale securities (cost - $537,999) 580,085
------------
$1,846,028
At December 31, 1996, marketable securities consisted of:
Broker/dealer securities - at market
U.S. Treasury Notes, due 5/15/97 - 6/30/99 (cost $956,925) $ 961,000
-----------
Other companies
Available-for-sale securities - at market
Unaffiliated mutual funds 37,251
Affiliated mutual funds 7,662
Equity securities 170,634
------------
Total available-for-sale securities (cost - $84,961) 215,547
------------
$1,176,547
At December 31, 1997 and 1996, the Company had $42,086 and $130,586,
respectively, of unrealized gains on "available-for-sale securities" which
is reported as a separate component of consolidated shareholders' equity.
4. LEASE COMMITMENTS
The Company has a lease for approximately 11,400 square feet of office
space. The rent is approximately $144,000 per annum plus $32,550 per annum
for electricity. The lease expires December 31, 1998 and is cancelable at
the option of the Company on three months' notice. In addition, the
Company's discount broker/dealer has a branch office in Boca Raton,
Florida consisting of approximately 2,000 square feet. The rent is
approximately $55,000 per annum and expires on August 30, 1999.
22
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
The Company leases office equipment under capital leases expiring in 1999.
The related property is included in furniture and equipment at a cost of
$45,457 at December 31, 1997. Depreciation expense of $29,042 has been
recognized on this property as of December 31, 1997. Future annual minimum
lease payments under the capital leases together with the present value of
the net minimum lease payments are as follows:
YEAR ENDING DECEMBER 31,
1998 $14,188
1999 7,586
---------
Total minimum lease payments 21,774
Less amount representing interest and executory costs 670
----------
Present value of minimum lease payments $ 21,104
=========
5. 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, 1997 and 1996, none of the Preferred Stock
was issued.
6. NET CAPITAL REQUIREMENTS
The Company's broker/dealer subsidiaries are member firms of the National
Association of Securities Dealers, Inc. and are registered with the
Securities and Exchange Commission as broker/dealers. Under the Uniform
Net Capital Rule (Rule 15c3-1 under the Securities Exchange Act of 1934),
a broker/dealer must maintain minimum net capital, as defined, of not less
than (a) $250,000 or, when engaged solely in the sale of redeemable shares
of registered investment companies, $25,000, or (b) 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,
1997, these subsidiaries had net capital of approximately $553,700 and
$614,900; net capital requirements of $250,000 and $25,000; excess net
capital of approximately $303,700 and $589,900; and the ratios of
aggregate indebtedness to net capital were approximately .45 to 1 and .28
to 1, respectively.
23
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
7. STOCK OPTIONS
On December 6, 1995, the Company adopted a Long-Term Incentive Plan which
provides for the granting of a maximum of 300,000 options to purchase
Class A Common Stock to directors, officers and key employees of the
Company or its subsidiaries. The plan was amended on February 5, 1996 and
October 29, 1997 increasing the maximum number of options to 450,000. With
respect to non-employee directors, only grants of non-qualified stock
options and awards of restricted shares are available. The current two
non-employee directors were granted 10,000 options each on December 6,
1995 and 5,000 options each on October 29, 1997. 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. If the recipient of any option owns 10% or more of the Class B
shares, the option price must be at least 110% of the fair market value
and the option must be exercised within five years of the date the option
is granted.
The 1990 Incentive Stock Option Plan provided for the granting of a
maximum of 500,000 options to purchase Class A Common Stock to directors,
officers and key employees of the Company. The option price per share may
not be less than the greater of 100% of the fair market value or the par
value of such shares on the date the option is granted, and the maximum
term of an option may not exceed ten years. If the recipient of any option
owns 10% or more of the total combined voting power of all classes of
stock, the option price must be at least 110% of the fair market value and
the option must be exercised within five years of the date the option is
granted.
The Company applied 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. Proforma 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
proforma disclosure, the estimated fair value of the options is amortized
to expense over the options' vesting period. The Company's proforma
information follows:
YEARS ENDED DECEMBER 31,
1997 1996
---- ----
Net income (loss): As Reported $625,725 $(320,525)
Proforma $246,394 $(463,738)
Earnings per share
Basic As Reported $.46 $(.23)
Proforma $.18 $(.34)
Diluted As Reported $.43 $(.23)
Proforma $.17 $(.34)
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 1997 and 1996, respectively:
expected volatility of 92.83% and 93.82%, risk-free interest rate of 5.85%
and 5.29% and expected life of three years and five years.
24
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
A summary of the status of the Company's stock option plans as of December
31, 1997 and 1996, 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, 1995 49,000 $1.76
Granted 229,000 $2.04
Exercised (2,000) $1.88
Canceled (27,000) $1.91
--------
OUTSTANDING AT DECEMBER 31, 1996 249,000 $2.00
Granted 167,000 $2.53
Canceled (34,000) $1.97
--------
OUTSTANDING AT DECEMBER 31, 1997 382,000 $2.23
=======
There were 146,000 options exercisable at December 31, 1997 with a
weighted-average exercise price of $2.37. There were no options
exercisable at December 31, 1996. The weighted-average fair value of
options granted
was $1.41 and $1.42 for the years ended December 31, 1997 and 1996,
respectively.
The following table summarizes information about stock options outstanding
at December 31, 1997:
OPTIONS OUTSTANDING
WEIGHTED-AVERAGE
RANGE OF NUMBER REMAINING WEIGHTED-AVERAGE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICE
--------------- ----------- ------------------- ------------------
$1.50 - $1.625 15,000 2.0 years $1.52
$1.875 - $2.475 334,000 3.8 years $2.20
$2.75 - $3.00 33,000 4.0 years $2.92
In addition, there were 30,000 non-qualified stock options with a range of
exercise prices of $1.75 - $2.25 outstanding and exercisable as of
December 31, 1997.
PENSION PLAN
The Company has a 401(k) retirement plan for substantially all of its
qualified employees. Contributions to this 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, 1997, 1996
and 1995 was approximately $44,800, $39,900 and $31,100, respectively.
25
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
9. INCOME TAXES
The provision for income taxes charged to operations was as follows:
1997 1996 1995
---- ---- ----
Current
State and local $34,704 $27,248 $32,588
Federal - - -
------------ ------------ ---------
$34,704 $27,248 $32,588
======= ======= =======
Deferred tax assets (liabilities) are comprised of the following at
December 31, 1997 and 1996:
1997 1996
---- ----
Unrealized appreciation on investments $ (16,200) $ (45,800)
Net operating loss carryforwards 277,100 509,500
---------- ----------
Net deferred tax assets 260,900 463,700
Deferred tax asset valuation allowance (260,900) (463,700)
---------- -----------
Net deferred tax assets $ - $ -
======== ========
The full amount of the deferred tax asset was offset by a valuation
allowance due to uncertainties associated with the ultimate realization of
the net operating loss carryforwards. The change in the valuation
allowance for the year ended December 31, 1997 was the result of the net
income for the year and the decrease in the unrealized appreciation on
investments.
For the year ended December 31, 1997, the provision for income taxes
differs from the amount of income taxes determined by applying the
applicable U.S. statutory federal tax rates to pre-tax income as a result
of utilization of net operating loss carryforwards.
At December 31, 1997, the Company had net operating loss carryforwards for
Federal income tax purposes of approximately $815,000, of which $298,600,
$187,800, $62,700 and $265,900 expire in 2004, 2005, 2006 and 2011,
respectively.
26
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
10. RELATED PARTIES
All management and distribution fees are from providing services 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. Shareholder
administration fees represent reimbursement of costs incurred by
subsidiaries of the Company on behalf of the open-end Funds. Such
reimbursement amounted to approximately $286,100, $249,700 and $363,200
for the years ended December 31, 1997, 1996 and 1995, respectively.
In connection with investment management services, the Company's
investment managers waived management fees from the Funds in the amount of
approximately $615,700, $535,900 and $270,200 for the years ended December
31, 1997, 1996 and 1995, respectively.
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, 1997, the
policy had a cash surrender value of approximately $109,000 and is
included in other assets in the balance sheet.
The Company's discount broker/dealer received brokerage commissions of
approximately $259,400, $179,500 and $153,200 from the Funds for the years
ended December 31, 1997, 1996 and 1995, respectively.
27
<PAGE>
BULL & BEAR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
DECEMBER 31, 1997, 1996 AND 1995
11. CONTINGENCIES
The Company and its directors are defendants in a lawsuit brought on April
24, 1995 by Maxus Investment Group, Maxus Capital Partners, Maxus Asset
Management, Inc., and Maxus Securities Corp. (collectively "Maxus"), which
now claim to collectively own or control 144,000 shares, or approximately
10.7% of the Class A Common stock of the Company. The action, seeking
declaratory and injunctive relief, was filed in the federal district court
for the Southern District of New York and purports to be brought on the
plaintiffs' own behalf and derivatively on behalf of the Company. On April
11, 1996, the district court dismissed as a matter of law all claims
brought by the plaintiffs except those relating to the voiding of 1993
exercises, the exercise of certain 1990 stock options and plaintiffs'
request for attorneys' fees from the Company. Defendants thereafter filed
answers denying liability. The Company believes that the lawsuit is
without merit and intends to continue defending the remaining claims
vigorously.
Although a group called Karpus Investment Management ("KIM") previously
failed to elect its slate of nominees in opposition to management at the
1997 annual meeting of stockholders of Bull & Bear U.S. Government
Securities Fund, Inc. ("BBG"), a closed-end fund managed by BBAI, another
BBG annual meeting is scheduled for 1998. In addition, on February 19,
1998, BBG filed a lawsuit against KIM in the United States District Court
for the Southern District of New York, 98 Civ. 1190, and KIM filed a
lawsuit against BBG in the Circuit Court for Baltimore City, Maryland,
Case No. 9805005. The outcome of these matters and their effect on the
Company or BBAI's management agreement with BBG cannot be predicted with
certainty.
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, 1997, 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 July 1994, 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 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.
28
<PAGE>
<TABLE>
<CAPTION>
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED
MARCH 31, JUNE 30, SEPT. 30, DEC. 31,
1997
<S> <C> <C> <C> <C>
REVENUES $1,911,891 $1,765,995 $1,684,132 $1,625,399
========== ========== ========== ==========
INCOME
Net Income $ 115,655 $ 163,587 $ 215,744 $ 130,739
=========== =========== =========== ===========
INCOME PER SHARE
Net Income $.08 $.12 $.16 $.10
==== ==== ==== ====
1996
REVENUES $1,526,469 $2,054,758 $1,904,869 $1,930,916
========== ========== ========== ==========
INCOME (LOSS)
Net Income (Loss) $ (418,274) $ (199,710) $ 134,673 $ 162,786
=========== =========== =========== ===========
INCOME (LOSS) PER SHARE
Net Income (Loss) $(.30) $(.13) $.09 $.12
===== ===== ==== ====
1995
REVENUES $1,292,575 $1,323,620 $1,362,963 $1,311,872
========== ========== ========== ==========
INCOME (LOSS)
Net Income (Loss) $ 113,764 $ 115,490 $ 50,894 $ (123,772)
=========== =========== ============ ===========
INCOME (LOSS) PER SHARE
Net Income (Loss) $.07 $.07 $.03 $(.07)
==== ==== ==== =====
</TABLE>
ITEM 9. 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, 1997.
29
<PAGE>
PART III
ITEM 10. 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 21 21 68
Robert D. Anderson Vice Chairman of the Board 21 21 68
Mark C. Winmill Co-President, 9 11 40
Chief Financial Officer,
Director
Thomas B. Winmill, Esq. Co-President, 9 10 38
General Counsel, Director
Edward G. Webb, Jr. Director 12* - 58
Charles A. Carroll Director 6 - 67
Steven A. Landis Senior Vice President - 3 42
James R. Mitchell, II Senior Vice President - 4 36
Joseph Leung Treasurer, - 3 32
Chief Accounting Officer
Deborah Ann Sullivan Vice President,
Secretary - 1 28
* 1985 TO 1990 AND 1992 TO PRESENT.
30
<PAGE>
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.
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.
ROBERT D. ANDERSON - Vice Chairman of the Board of Directors. He is also
Vice Chairman of certain investment companies managed by Company
subsidiaries and of the subsidiaries of the Company.
MARK C. WINMILL - Co-President, Chief Financial Officer and Director. He
is also President of Bull & Bear Securities, Inc. and Co-President of the
investment companies managed by Company subsidiaries and of certain other
subsidiaries of the Company. He is a son of Bassett S. Winmill and a
brother of Thomas B. Winmill.
THOMAS B. WINMILL, ESQ. - Co-President, General Counsel and Director. He
is also President of Bull & Bear Advisers, Inc. and Co-President of the
investment companies managed by Company subsidiaries and of certain
other subsidiaries of the Company. He is a member of the New York State
Bar. He is a son of Bassett S. Winmill and a brother of Mark C. Winmill.
EDWARD G. WEBB, JR. - Director. He has been President of Webb Associates,
Ltd. since 1996. From 1990 to 1996, he was Investment Director for Home
Insurance Company. 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.
STEVEN A. LANDIS - Senior Vice President. He is also Senior Vice President
of the investment companies managed by Company subsidiaries. From 1993 to 1995
he was Associate Director of Proprietary Trading at Barclays De Zoete Wedd
Securities, Inc., from 1992 to 1993 he was Director, Bond Arbitrage at WG
Trading Company, and from 1989 to 1992 he was Vice President of Wilkinson Boyd
Capital Markets.
JAMES R. MITCHELL, II - Senior Vice President. He is also Senior Vice
President of BBSI since 1994.
From 1992 to 1994 he was Vice President of BBSI.
JOSEPH LEUNG, CPA - Treasurer and Chief Accounting Officer. He is also
Treasurer and Chief Accounting Officer of the investment companies managed by
Company subsidiaries. From 1992 to 1995 he held various positions with Coopers &
Lybrand L.L.P., a public accounting firm. From 1991 to 1992 he was the
accounting supervisor at Retirement Systems Group, a mutual fund company.
DEBORAH ANN SULLIVAN - Vice President, Secretary. She is also Vice
President and Secretary of the investment companies managed by Company
subsidiaries. From 1993 to 1994 she was a Blue Sky Paralegal for Sun America
Asset Management Corporation and from 1992 through 1993 she was Compliance
Administrator and Blue Sky Administrator with Prudential Inc. and Prudential
Fund Management, Inc. She earned her Juris Doctor at Hofstra University, School
of Law.
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.
31
<PAGE>
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 or prior fiscal years except as follows: Bassett S.
Winmill with respect to transactions in April 1997 filed a Form 4 on May 5,
1997, and amendments thereto on May 16, 1997 and March 24, 1998, and an amended
Form 5 on March 24, 1998.
Based on information available to the Company, including a December 4,
1996 letter from Maxus' counsel, Maxus (See Note 11) owns 144,000 shares or
10.7% of the outstanding Class A Common Stock of the Company. Such entities have
not furnished the Company with any form under Section 16 of the Securities
Exchange Act of 1934.
ITEM 11. EXECUTIVE COMPENSATION
The following information and tables set forth the information required
under the Securities and Exchange Commission's executive compensation rules. Any
information not presented is omitted because the item is not applicable or not
required since the Company qualifies as a small business issuer.
SUMMARY COMPENSATION TABLE
The following table sets forth, for the three years ended December 31,
1997, the compensation paid to the chief executive officers and the other
executive officers whose total annual salary and bonus exceeded $100,000 in
1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION ALL OTHER
NAME AND SALARY BONUS OTHER ANNUAL COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) COMPENSATION* (A) (B)
- ------------------ ---- --------- --------- ------------ --- ---
<S> <C> <C> <C> <C> <C> <C>
Bassett S. Winmill 1997 $170,000 $17,708 - $5,166 $4,750
Chairman 1996 $170,000 $28,333 - $5,166 $4,750
1995 $160,000 $10,000 - $4,788 $4,620
Robert D. Anderson 1997 $ 90,000 $ 9,375 - $2,142 $2,925
Vice Chairman 1996 $ 90,000 $15,000 - $2,142 $3,211
1995 $ 89,000 $ 5,562 - $2,104 $3,310
Mark C. Winmill 1997 $122,500 $13,021 - $ 269 $3,941
Co-President 1996 $110,000 $18,115 - $ 152 $3,997
1995 $100,000 $ 6,250 - $ 132 $3,462
Thomas B. Winmill 1997 $122,500 $13,021 - $ 177 $4,272
Co-President 1996 $110,000 $18,115 - $ 152 $4,066
1995 $100,000 $ 6,250 - $ 132 $3,678
Steven A. Landis 1997 $120,667 $ 7,542 - $ 267 $2,564
Senior Vice President 1996 $112,000 $18,667 - $ 241 $1,750
1995 $ 86,167 $ 8,250 - $ 150 $ -
</TABLE>
* 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.
32
<PAGE>
OPTION GRANTS TABLE
The following table sets forth, for the year ended December 31, 1997,
information regarding the options granted to each of the executive officers
named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
---- ------------------------------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bassett S. Winmill 40,000 24.0 $2.475 10/29/02 $15,880 $45,960
Mark C. Winmill 40,000 24.0 $2.475 10/29/02 $15,880 $45,960
Thomas B. Winmill 40,000 24.0 $2.475 10/29/02 $15,880 $45,960
Robert D. Anderson 5,000 3.0 $2.250 10/29/02 $ 3,110 $ 6,870
</TABLE>
All of the above options are exercisable as of December 31, 1997.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth, for the year ended December 31, 1997,
information regarding the outstanding options for each of the executive officers
named in the Summary Compensation Table.
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED DOLLAR 12-31-97 (#) 12-31-97 ($)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
Bassett S. Winmill - - 40,000/50,000 $21,000/$46,875
Mark C. Winmill - - 40,000/50,000 $21,000/$46,875
Thomas B. Winmill - - 40,000/50,000 $21,000/$46,875
Robert D. Anderson - - 5,000/20,000 $3,750/$22,500
Steven A. Landis - - 0/20,000 $0/$22,500
LONG-TERM INCENTIVE PLAN AWARDS TABLE
There were no long-term incentive plan awards made during the year ended
December 31, 1997.
COMPENSATION OF DIRECTORS
Edward G. Webb, Jr. and Charles A. Carroll were the only individuals who
received compensation for their service as directors of the Company in 1997.
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, 1997, Mr. Webb
and Mr. Carroll were each paid $10,000 for attending all four meetings. Mr.
Webb and Mr. Carroll each also received an option to purchase
5,000 shares of Class A Common Stock at an exercise price of $2.25 per share.
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 11 to the
financial statements.
33
<PAGE>
REPRICING OF OPTIONS TABLE
During 1997, the Stock Option Committee amended the exercise price on the
Stock Options issued to Mark C. Winmill and Thomas B. Winmill in 1996. The
exercise price on the stock options was increased to $2.0625 from $1.875.
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 Bull & Bear Group, Inc. 1995
Long-Term Incentive Plan ("Plan"), under which options and stock-based awards
(collectively, "Awards") may be made to directors, officers and employees of the
Company or its subsidiaries. The Plan was amended by the Board and the Class B
voting common stockholder on February 5, 1996 and October 29, 1997. 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.
Four hundred fifty thousand (450,000) shares of the Company's Class A
Common Stock ("Shares") are 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 Stock Option
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 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 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.
34
<PAGE>
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 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 Committee.
The exercise price of each option is determined by the 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 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
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
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
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.
35
<PAGE>
Unless the 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 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 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 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 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 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
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 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 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 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.
36
<PAGE>
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 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 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 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.
37
<PAGE>
Options to Purchase Stock of Acquired Companies. After any reorganization,
merger or consolidation in which the Company is a surviving entity, the
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 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.
LOANS
The Company is entitled, if the Committee in its sole discretion deems it
necessary or desirable, to lend money to a Participant for purposes of (A)
exercising his or her rights under an Award hereunder or (B) paying any income
tax liability related to an Award; provided, however, that Non-Employee
Directors are not eligible to receive such loans and provided, further, that the
portion of the per share exercise price of an option equal to the par value per
Share may not be paid by means of a promissory note. Such a loan must be
evidenced by a recourse promissory note payable to the order of the Company
executed by the Participant and containing such other terms and conditions as
the Committee may deem desirable. The interest rate on such loans must be
sufficient to avoid imputed interest under the Code.
ITEM 12. 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, 1997, 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 247,604 (1) 17.8%
Robert D. Anderson 103,414 (2) 7.6%
Thomas B. Winmill 119,870 (3) 8.6%
Mark C. Winmill 70,800 (1) 5.1%
Edward G. Webb, Jr. 21,684 (4) 1.6%
Charles A. Carroll 25,000 (4) 1.8%
All directors and executive
officers as a group (10 persons) 588,372 39.1%
(1) Includes options exercisable to purchase 40,000 shares and
excludes 50,000 options not exercisable at December 31, 1997.
(2) Includes options exercisable to purchase 5,000 shares and
excludes 20,000 options not exercisable at December 31, 1997.
(3) Includes 36,000 and 10,000 shares held by Thomas B. Winmill's
wife and sons, respectively of which he disclaims beneficial
ownership and options exercisable to purchase 40,000 shares
and excludes 50,000 options not exercisable at December 31,
1997.
(4) Includes options exercisable to purchase 15,000 shares.
(5) The nature of the beneficial ownership for all the Class A Common
Stock is investment power.
38
<PAGE>
(C) OTHER INFORMATION
In June 1994, the Board of Directors of the Company rejected an offer
of $3.50 per share contained in a letter dated May 17, 1994 to the Company from
Maxus Investment Group. Maxus, of Pepper Pike, Ohio, which was part of a group
that purportedly at that time owned 26.5% of the Company's Class A stock,
offered $3.50 per share for the balance of the Class A stock outstanding subject
to due diligence and the agreement by the holder of the Class B voting stock, to
sell all his Class B voting stock. The holder of the Class B voting stock
indicated to Maxus, as he had on numerous previous occasions, that he had no
intention of selling his Class B voting stock. In July 1994, the Board of
Directors of the Company unanimously determined not to proceed with a revised
proposal of Maxus Investment Group to liquidate the Company and guarantee
shareholders no less than $5.00 per share, as reflected in Maxus' letters dated
June 17, 1994 and June 28, 1994. The holder of the Class B voting stock advised
Maxus that he had no intention of selling his Class B stock or voting such stock
for any proposal or transaction involving the merger, sale, acquisition,
reorganization, dissolution, or any like extraordinary transaction involving the
Company (See also Note 11).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following sets forth the reportable items regarding indebtedness of
management in excess of $60,000. In connection with the exercise of stock
options and related tax expense, the Company received notes with an interest
rate of 4.86% per annum payable on the earlier of November 1, 1998 or within 60
days of termination of employment.
LARGEST AMOUNT
AMOUNT OF OUTSTANDING AT
NAME AND RELATIONSHIP INDEBTEDNESS DECEMBER 31, 1997
Bassett S. Winmill, Chairman $83,888 $80,000
39
<PAGE>
PART IV
ITEM 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES, AND
REPORTS ON FORM 8-K
(a) (1) Financial Statements
See Item 8 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 and ByLaws
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.
(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, Plans of
Distribution ("12b-1 Plans") and Shareholder
Administration Agreements between
subsidiaries of the Company and the Funds
and Non-Exclusive License Agreements between
the Company and the Funds:
<TABLE>
<CAPTION>
SHAREHOLDER NON-EXCLUSIVE
MANAGEMENT DISTRIBUTION 12B-1 ADMINISTRATION LICENSE
FUND AGREEMENT AGREEMENT PLAN AGREEMENT AGREEMENT
<S> <C> <C> <C> <C> <C>
(i) Bull & Bear Dollar Reserves (2) (2) (2) (5) (8)
(ii) Bull & Bear Gold Investors Ltd. (2) (2) (2) (5) (8)
(iii) Bull & Bear Global Income Fund, Inc. (7) - - - (8)
(iv) Bull & Bear U.S. and Overseas Fund (2) (2) (2) (5) (8)
(v) Bull & Bear Special Equities Fund, Inc. (2) (2) (2) (5) (8)
(vi) Bull & Bear Municipal Income Fund, Inc. (7) - - - (8)
(vii) Bull & Bear U.S. Government Securities
Fund, Inc. (7) - - - (8)
(viii) Midas Fund, Inc. (6) (6) (6) (6) (8)
(ix) Rockwood Fund, Inc. (7) (7) (7) (7) (8)
</TABLE>
(1) Filed as exhibits to Form 10-K for the
year ended December 31, 1991 and
incorporated herein by reference.
(2) Filed as exhibits to Form 10-K for the
year ended December 31, 1993 and
incorporated herein by reference.
(3) Filed as exhibits to Form 10-K for the
year ended December 31, 1989 and
incorporated herein by reference.
(4) Filed as exhibits to Form 10-K for the
year ended December 31, 1990 and
incorporated herein by reference.
(5) Filed as exhibits to Form 10-K for the
year ended December 31, 1994 and
incorporated herein by reference.
40
<PAGE>
(6) Filed as exhibits to Form 10-K for the
year ended December 31, 1995 and
incorporated herein by reference.
(7) Filed as exhibits to Form 10-K for the
year ended December 31, 1996 and
incorporated herein by reference.
(8) Filed as exhibits to Form 10-K for the
year ended December 31, 1997 and filed
herewith.
(b) Bull & Bear Group, Inc. 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.
(e) 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) Bull & Bear 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) Bull & Bear Group, Inc. 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) Bull & Bear Group, Inc. 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) Bull & Bear Group, Inc. 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) Bull & Bear Group, Inc. 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) Bull & Bear Group, Inc. Incentive Stock
Option Agreement for Employees- Steven A.
Landis filed as an exhibit to Form 10-K for
the year ended December 31, 1995 and
incorporated herein by reference.
(l) Bull & Bear Group, Inc. 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.
41
<PAGE>
(m) Bull & Bear Group, Inc. 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.
(n) Bull & Bear Group, Inc. 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 filed herewith.
(o) Option Certificate for Bassett S. Winmill
filed as an exhibit to Form 10-K for the
year ended December 31, 1997 and filed
herewith.
(p) Option Certificate for Edward G. Webb, Jr.
filed as an exhibit to Form 10-K for the
year ended December 31, 1997 and filed herewith.
(q) Option Certificate for Charles A. Carroll
filed as an exhibit to Form 10-K for the
year ended December 31, 1997 and filed
herewith.
(r) Option Certificate for Thomas B. Winmill
filed as an exhibit to Form 10-K for the
year ended December 31, 1997 and filed
herewith.
(s) Option Certificate for Mark C. Winmill filed
as an exhibit to Form 10-K for the year
ended December 31, 1997 and filed herewith.
(t) Option Certificate for Robert D. Anderson
filed as an exhibit to Form 10-K for the
year ended December 31, 1997 and filed
herewith.
(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
(22) Not applicable.
(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.
42
<PAGE>
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.
BULL & BEAR GROUP, INC.
March 31, 1998 By:/s/ Joseph Leung
-------------------
Joseph Leung
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, 1998 By:/s/ Bassett S. Winmill
-------------------------
Bassett S. Winmill,
Chairman of the Board, Director
March 31, 1998 By:/s/ Robert D. Anderson
-------------------------
Robert D. Anderson,
Vice Chairman, Director
March 31, 1998 By:/s/ Mark C. Winmill
----------------------
Mark C. Winmill,
Co-President, Chief Financial Officer,
Director
March 31, 1998 By:/s/ Thomas B. Winmill
------------------------
Thomas B. Winmill, Esq.
Co-President, General Counsel, Director
March 31, 1998 By:/s/ Edward G. Webb, Jr.
---------------------------
Edward G. Webb, Jr.
Director
March 31, 1998 By:/s/ Charles A. Carroll
-------------------------
Charles A. Carroll,
Director
43
<PAGE>
INDEX TO EXHIBITS
(3) Exhibits
(10) Material Contracts
(a) Bull & Bear Group, Inc. 1995 Long-Term Incentive Plan
(As Amended And Restated As Of
October 29, 1997).
(b) Option Certificate for Bassett S. Winmill
(c) Option Certificate for Edward G. Webb, Jr.
(d) Option Certificate for Charles A. Carroll
(e) Option Certificate for Thomas B. Winmill
(f) Option Certificate for Mark C. Winmill
(g) Option Certificate for Robert D. Anderson
(h) Non-Exclusive License Agreement between the Company and Bull
& Bear Funds I, Inc.
(i) Non-Exclusive License Agreement between the Company and Bull
& Bear Funds II, Inc.
(j) Non-Exclusive License Agreement between the Company and Bull
& Bear Gold Investors, Ltd.
(k) Non-Exclusive License Agreement between the Company and Bull
& Bear Global Income Fund, Inc.
(l) Non-Exclusive License Agreement between the Company and
Midas Fund, Inc.
(m) Non-Exclusive License Agreement between the Company and Bull
& Bear Municipal Income Fund, Inc.
(n) Non-Exclusive License Agreement between the Company and
Rockwood Fund, Inc.
(o) Non-Exclusive License Agreement between the Company and Bull
& Bear Special Equities Fund, Inc.
(p) Non-Exclusive License Agreement between the Company and Bull
& Bear U.S. Government Securities Fund, Inc.
(11) Statement Regarding Computation of Per Share Earnings
(21) Wholly-Owned Subsidiaries of the Company
44
<PAGE>
BULL & BEAR GROUP, INC.
1995 LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED AS OF OCTOBER 29, 1997)
ARTICLE I. PURPOSE AND TERM OF THE PLAN
1.01 PURPOSE. The purpose of the Bull & Bear Group, Inc. 1995 Long-Term
Incentive Plan (as Amended and Restated as of October 29, 1997) (hereinafter
referred to as the "Plan") is to assist the Company (as hereinafter defined) and
its subsidiaries in attracting and retaining individuals to serve as directors
and highly competent personnel who will contribute to the success of the Company
and its subsidiaries and to act as an incentive in motivating selected officers,
key employees and directors to achieve long-term objectives, which will inure to
the benefit of all stockholders of the Company.
1.02 TERM. The Plan shall terminate without further action of the Board
on December 5, 2005.
ARTICLE II. DEFINITIONS
For purposes of the Plan, capitalized terms shall have the following
meanings:
2.01 AWARD means any grant to a Participant of any one or a combination
of Non-Qualified Stock Options or Incentive Stock Options described in Article
VI, or Restricted Shares described in Article VII.
2.02 AWARD AGREEMENT means, with respect to an Option, a certificate of
Option signed by a President of the Company, and with respect to a Restricted
Share Award, a written agreement between the Company and a Participant,
specifically setting forth the terms and conditions of an Award granted to a
Participant under the Plan.
2.03 AWARD PERIOD means, with respect to an Award, the period of time,
if any, set forth in the Award Agreement during which specified target
performance goals must be achieved or other conditions set forth in the Award
Agreement must be satisfied.
2.04 BENEFICIARY means an individual, trust or estate who or that, by
will or the laws of descent and distribution, succeeds to the rights and
obligations of the Participant under the Plan and an Award Agreement upon the
Participant's death.
2.05 BOARD means the Board of Directors of the Company.
2.06 CAUSE means termination for, as determined by the Committee in its
sole discretion, (i) dishonest or fraudulent conduct relating to the Company or
any of its subsidiaries or their businesses; (ii) conviction of any felony that,
in the judgment of the Board, involves moral turpitude or otherwise reflects on
the Company or any of its subsidiaries in a significantly adverse way; or (iii)
gross neglect by the Participant in the performance of his or her duties as an
employee or director, or any material breach by a Participant under any
employment agreement with the Company or any of its subsidiaries.
2.07 CODE means the Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto. References to a section of the Code shall
include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said section.
2.08 COMMITTEE means a Committee of the Board as may be designated by
the Board. The Committee shall be composed of at least two directors of the
Company, each of whom is a "Non-Employee Director" as defined in Rule 16b-3. The
Committee shall have the power and authority to administer the Plan in
accordance with Section 3.01.
2.09 COMMON STOCK means the Class A Common Stock, par value $.01 per
share, of the Company.
<PAGE>
2.10 COMPANY means Bull & Bear Group, Inc., a corporation organized
under the laws of the State of Delaware, and its successors.
2.11 COMPANY VOTING SECURITIES means the Class B Common Stock, par
value $.01 per share, which is entitled to vote generally in the election of the
Board.
2.12 DATE OF GRANT means the date designated by the Committee as the
date as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
2.13 DISABILITY means any physical or mental impairment or disability
that prevents a Participant from performing the duties of his or her employment
(or service as a member of the Board in the case of Non-Employee Directors) and
that is expected to be of permanent duration. A determination of whether a
Participant is disabled shall be made by a licensed physician appointed by the
Committee.
2.14 DISABILITY DATE means the date that is 120 days after the date on
which a Participant is first absent from active employment with the Company (or
any of its subsidiaries) or service as a Non-Employee Director, as the case may
be, by reason of a Disability.
2.15 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.16 FAIR MARKET VALUE of a share of Common Stock means, as of any
given date, the most recently reported sale price of a share of Common Stock on
such date as of the time when Fair Market Value is being determined on the
principal national securities exchange on which the Common Stock is then traded
or, if the Common Stock is not then traded on a national securities exchange,
the most recently reported sale price of the Common Stock on such date as of the
time when Fair Market Value is being determined on the National Association of
Securities Dealers Automated Quotation System ("Nasdaq"); provided, however,
that, if there were no sales reported as of such date, Fair Market Value shall
be the last sale price previously reported. In the event the Common Stock is not
admitted to trade on a securities exchange or quoted on Nasdaq, the Fair Market
Value of a share of Common Stock as of any given date shall be as determined in
good faith by the Committee. Notwithstanding the foregoing, the Fair Market
Value of a share of Common Stock shall never be less than par value per share.
2.17 INCENTIVE STOCK OPTION means an Option designated as an incentive
stock option and that complies with Section 422 of the Code.
2.18 NON-EMPLOYEE DIRECTOR means each member of the Board who is not an
employee of the Company or any of its subsidiaries.
2.19 NON-QUALIFIED STOCK OPTION means an Option that is not an
Incentive Stock Option.
2.20 OPTION means any option to purchase Common Stock granted pursuant
to Article VI, including any Reload Option.
2.21 PARTICIPANT means any employee of the Company or any of its
subsidiaries selected by the Committee, and any Non-Employee Director selected
by the Board, to receive an Award under the Plan in accordance with Article V.
2.22 PLAN means the Bull & Bear Group, Inc. 1995 Long-Term Incentive
Plan (as Amended and Restated as of October 29, 1997) as set forth herein, and
as the same may be amended from time to time.
2.23 RESTRICTED SHARES means shares of Common Stock subject to
restrictions imposed in connection with Awards granted under Article VII.
2.24 RULE 16B-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as the same may be
amended from time to time, and any successor rule.
<PAGE>
2.25 TEN PERCENT SHAREHOLDER means a Participant who, at the time of
grant of an Option, owns (or is deemed to own under Section 424(d) of the Code)
more than 10% of Company Voting Securities.
2.26 TERMINATION OF EMPLOYMENT OR SERVICE means the voluntary or
involuntary termination of a Participant's employment with, or service as a
Non-Employee Director of, the Company or any of its subsidiaries for any reason,
including death, Disability, retirement or as the result of the sale or other
divestiture of the Company or any of its subsidiaries or any similar transaction
in which the Participant's employer or service recipient ceases to be the
Company or one of its subsidiaries. Whether entering military or other
government service shall constitute Termination of Employment or Service, and
whether a Termination of Employment or Service is a result of Disability, shall
be determined in each case by the Committee.
ARTICLE III. ADMINISTRATION
3.01 COMMITTEE. The Plan shall be administered by the Board or the
Committee, each of which shall have exclusive and final authority in each
determination, interpretation or other action affecting the Plan and its
Participants. During any period in which the Plan is administered by the Board,
and with respect to any Awards granted to Non-Employee Directors, all references
in the Plan to the Committee shall be deemed to refer to the Board. The
Committee shall have the sole and absolute discretion to interpret the Plan, to
establish and modify administrative rules for the Plan, to select the officers
and other key employees to whom Awards may be granted, to determine all claims
for benefits under the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate and to take such steps in connection with
the Plan and Awards granted hereunder as it may deem necessary or advisable. The
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 designated officers or employees of the Company.
ARTICLE IV. SHARES OF COMMON STOCK
4.01 NUMBER OF SHARES OF COMMON STOCK ISSUABLE. Subject to adjustments
as provided in Section 8.06, 450,000 shares of Common Stock shall be available
for Awards of Non-Qualified Stock Options, Incentive Stock Options and
Restricted Shares under the Plan. Any and all of such shares may be issued in
respect of any of the types of Awards. The Common Stock to be offered under the
Plan shall be authorized and unissued Common Stock, or issued Common Stock that
shall have been reacquired by the Company and held in its treasury. The Company
may, but shall not be required to, register any shares of Common Stock issuable
pursuant to the Plan, under the Securities Act of 1933, as amended.
4.02 NUMBER OF SHARES OF COMMON STOCK AWARDED TO ANY PARTICIPANT. In
the event the purchase price of an Option is paid in whole or in part through
the delivery of shares of Common Stock issuable in connection with the exercise
of the Option, a Participant will be determined to have received an Award with
respect to those shares of Common Stock.
4.03 SHARES OF COMMON STOCK SUBJECT TO TERMINATED AWARDS. The shares of
Common Stock covered by any unexercised portions of terminated Options granted
under Article VI, shares of Common Stock forfeited as provided in Section
7.02(a) and shares of Common Stock subject to any Awards that are otherwise
surrendered by the 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 of Common Stock, the
number of shares of Common Stock issuable in connection with the exercise of the
Option shall not again be available for the grant of Awards under the Plan.
<PAGE>
ARTICLE V. PARTICIPATION
5.01 ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such
officers and other key employees of the Company or its subsidiaries, whether or
not directors of the Company, as the Committee, in its sole discretion, may
designate from time to time. The Committee's designation of a Participant in any
year shall not require the Committee to designate such person to receive Awards
in any other year. The Committee shall consider such factors as it deems
pertinent in selecting Participants and in determining the type and amount of
their respective Awards.
Non-Employee Directors shall receive such Awards (other than Incentive
Stock Options) as the Board, in its discretion, may designate from time to time.
ARTICLE VI. STOCK OPTIONS
6.01 GRANT OF OPTION. Any Option granted under the Plan shall have such
terms as the Committee may, from time to time, approve, and the terms and
conditions of Options need not be the same with respect to each Participant. The
Committee shall have the authority to grant to any Participant one or more
Incentive Stock Options, Non-Qualified Stock Options, or both types of Options.
To the extent that any Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time or manner of its exercise or
otherwise), such Option or the portion thereof that does not qualify shall
constitute a separate Non-Qualified Stock Option.
6.02 INCENTIVE STOCK OPTIONS. In the case of any grant of an Option
intended to be an Incentive Stock Option, whenever possible, each provision in
the Plan and in any related Award Agreement (other than those relating to the
exercise of Options following Termination of Employment or Service) shall be
interpreted in such a manner as to entitle the Option holder to the tax
treatment afforded by Section 422 of the Code and, if any such provision of the
Plan or such Award Agreement shall be held not to comply with requirements
necessary to entitle such Option to such tax treatment, then (a) such provision
shall be deemed to have contained from the outset such language as shall be
necessary to entitle the Option to the tax treatment afforded under Section 422
of the Code, and (b) all other provisions of the Plan and the Award Agreement
relating to such Option shall remain in full force and effect. If any Award
Agreement covering an Option designated by the Committee to be an Incentive
Stock Option shall not explicitly include any terms required to entitle such
Incentive Stock Option to the tax treatment afforded by Section 422 of the Code
(other than those relating to the exercise of Options following Termination of
Employment or Service), all such terms shall be deemed implicit in the
designation of such Option as an Incentive Stock Option and the Option shall be
deemed to have been granted subject to all such terms.
6.03 TERMS OF OPTIONS. Options granted under the Plan shall be subject
to the following terms and conditions and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock purchasable
under an Option shall be determined by the Committee at the
time of grant but shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the Date of Grant;
provided, however, that, if an Incentive Stock Option is
granted to a Ten Percent Shareholder, the option price per
share shall be at least ll0% of the Fair Market Value of a
share of Common Stock on the Date of Grant.
(b) Option Term. The term of each Option shall be fixed by the Committee,
but no Option shall be exercisable more than ten years after
the Date of Grant; provided, however, that, if an Incentive
Stock Option is granted to a Ten Percent Shareholder, the
Option shall not be exercisable more than five years after the
Date of Grant.
<PAGE>
(c) Exercisability. An Award Agreement with respect to Options may contain
such performance targets, waiting periods, exercise dates and
restrictions on exercise (including, but not limited to, a
requirement that an Option is exercisable in periodic
installments) as may be determined by the Committee at the
time of grant; provided, however, that, unless the Board
determines otherwise, no Option may be exercised prior to the
holder's completion of two years of employment with, or
service as a Non-Employee Director of, the Company or any of
its subsidiaries.
(d) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (c) above, Options may
be exercised in whole or in part at any time during the Award Period,
by giving written notice of exercise to the Company specifying the
number of shares of Common Stock to be purchased. Such notice shall be
accompanied by payment in full of the purchase price in such form as
the Committee may accept, including cash for the par value and a
promissory note for the balance with interest and terms acceptable to
the Committee as provided in Section 8.07. If and to the extent
determined by the Committee in its sole discretion at or after grant,
payment in full or in part may also be made in the form of Common Stock
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 of Common Stock issuable upon such exercise based,
in each case, on the Fair Market Value of the Common Stock on the date
the Option is exercised; provided, however, that, in the case of an
Incentive Stock Option, the right to make payment of the purchase price
in the form of Common Stock may be authorized only at the time of
grant. No Common Stock shall be issued until payment, as provided
herein, therefor has been made. A Participant shall generally have the
rights to dividends or other rights of a stockholder with respect to
Common Stock subject to the Option when the Participant has given
written notice of exercise and has paid for such Common Stock as
provided herein.
(f) Non-Transferability of Options. No Option shall be transferable by
the Participant otherwise than by will or by the laws of descent and
distribution, and all Options shall be exercisable, during the
Participant's lifetime, only by the Participant.
(g) Exercise of Options Upon Termination of Employment or Service.
(i) Exercise of Vested Options Upon Termination of Employment
or Service.
(A) Termination. Unless the Committee, in its sole discretion,
provides for a shorter period of time in the Award Agreement,
upon a Participant's Termination of Employment or Service
other than by reason of death or Disability, the Participant
may, within three months from the date of such Termination of
Employment or Service, exercise all or any part of his or her
Options as were exercisable at the date of Termination of
Employment or Service but only if (x) the Participant resigns
or retires and the Committee consents to such resignation or
retirement and (y) such Termination of Employment or Service
is not for Cause. If such Termination of Employment or Service
is for Cause or the Committee does not so consent, the right
of such Participant to exercise such Options shall terminate
at the date of Termination of Employment or Service. In no
event, however, may any Option be exercised later than the
date described in Section 6.03(b).
(B) Disability. Unless the Committee, in its sole discretion,
provides for a shorter period of time in the Award Agreement,
upon a Participant's 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 later than the date described in Section 6.03(b).
<PAGE>
(C) Death. Unless the Committee, in its sole discretion,
provides for a shorter period of time in the Award Agreement,
in the event of the death of a Participant while employed by,
or serving as a Non-Employee Director of, the Company or prior
to the expiration of the Option as provided in Section 6.03(g)
(i) (B) above, 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
shall 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 date of
expiration of the Option determined pursuant to Section
6.03(b), whichever is earlier. In all other cases of death
following a Participant's Termination of Employment or
Service, the Participant's Beneficiary may exercise the Option
within the remaining time, if any, provided in Section 6.03(g)
(l) (A) above. In the event of the Participant's death, the
Committee may, in its sole discretion, accelerate the right to
exercise all or any part of an Option that would not otherwise
be exercisable.
(ii) Expiration of Unvested Options Upon Termination of
Employment or Service. To the extent all or any part of an
Option was not exercisable as of the date of Termination of
Employment or Service, such right shall expire at the date of
such Termination of Employment or Service. Notwithstanding the
foregoing, the 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 or Service
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.
ARTICLE VII. RESTRICTED SHARES
7.01 RESTRICTED SHARE AWARDS. Restricted Shares may be issued either
alone or in addition to other Awards granted under the Plan. The Committee may
grant to any Participant an Award of shares of Common Stock in such number, and
subject to such terms and conditions relating to forfeitability and restrictions
on delivery and transfer (whether based on performance standards, periods of
service or otherwise) as the Committee shall establish. The terms of any
Restricted Share Award granted under the Plan shall be set forth in an Award
Agreement, which shall contain provisions determined by the Committee and not
inconsistent with the Plan. The provisions of Restricted Share Awards need not
be the same for each Participant receiving such Awards.
(a) Issuance of Restricted Shares. As soon as practicable after the
Date of Grant of a Restricted Share Award by the Committee, the Company
shall cause to be transferred on the books of the Company shares of
Common Stock, registered on behalf of the Participant in nominee form,
evidencing the Restricted Shares covered by the Award, but subject to
forfeiture to the Company retroactive to the Date of Grant if an Award
Agreement delivered to the Participant by the Company with respect to
the Restricted Shares covered by the Award is not duly executed by the
Participant and timely returned to the Company. Each Participant, as a
condition to the receipt of a Restricted Share Award, shall pay to the
Company in cash the par value of a share of Common Stock multiplied by
the number of shares of Common Stock covered by such Restricted Share
Award. All shares of Common Stock covered by Awards under this Article
VII shall be subject to the restrictions, terms and conditions
contained in the Plan and the Award Agreement entered into by and
between the Company and the Participant. Until the lapse or release of
all restrictions applicable to an Award of Restricted Shares, the stock
certificates representing such Restricted Shares shall be held in
custody by the Company or its designee. Upon the lapse or release of
all restrictions with respect to an Award as described in Section
7.01(d), one or more stock certificates, registered in the name of the
Participant, for an appropriate number of shares of Common Stock as
provided in Section 7.01(d), free of any restrictions set forth in the
Plan and the Award Agreement, shall be delivered to the Participant.
<PAGE>
(b) Shareholder Rights. Beginning on the Date of Grant of the
Restricted Share Award and subject to execution of the Award Agreement
as provided in Section 7.01(a), the Participant shall become a
shareholder of the Company with respect to all shares of Common Stock
subject to the Award Agreement and shall have all of the rights of a
holder of Common Stock, including, but not limited to, the right to
receive dividends (or dividend equivalents); provided, however, that
any shares of Common Stock distributed as a dividend or otherwise with
respect to any Restricted Shares as to which the restrictions have not
yet lapsed shall be subject to the same restrictions as such Restricted
Shares and shall be represented by book entry and held as prescribed in
Section 7.01(a)
(c) Restriction on Transferability. 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
restrictions applicable thereto.
(d) Delivery of Shares of Common Stock Upon Release of Restrictions.
Upon expiration or earlier termination of the forfeiture period without
a forfeiture and the satisfaction of or release from any other
conditions prescribed by the Committee, the restrictions applicable to
the Restricted Shares shall lapse. As promptly as administratively
feasible thereafter, subject to the requirements of Section 8.05, the
Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's Beneficiary, one or more
stock certificates for the appropriate number of shares of Common
Stock, free of all such restrictions, except for any restrictions that
may be imposed by law.
7.02 TERMS OF RESTRICTED SHARES.
(a) Forfeiture of Restricted Shares. Subject to Section 7.02(b), all
Restricted Shares shall be forfeited and returned to the Company and
all rights of the Participant with respect to such Restricted Shares
shall terminate unless the Participant continues in the service of the
Company or any parent or subsidiary of the Company as an employee or
Non-Employee Director until the expiration of the forfeiture period for
such Restricted Shares and satisfies any and all other conditions set
forth in the Award Agreement. The Committee, in its sole discretion,
shall determine the forfeiture period (which may, but need not, lapse
in installments) and any other terms and conditions applicable with
respect to any Restricted Share Award.
(b) Waiver of Forfeiture Period. Notwithstanding anything contained in
this Article VII to the contrary, the Committee may, in its sole
discretion, waive the forfeiture period as may be determined pursuant
to Section 7.02(a) or otherwise and any other conditions set forth in
any Award Agreement under appropriate circumstances (including the
death, disability or retirement of the Participant or a material change
in circumstances arising after the date of an Award) and subject to
such terms and conditions (including forfeiture of a proportionate
number of Restricted Shares) as the Committee shall deem appropriate,
provided that, unless the Board determines otherwise, the Participant
shall at that time have completed at least two years of employment
with, or service as a Non-Employee Director of, the Company or any of
its subsidiaries.
ARTICLE VIII. TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
8.01 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant to a Participant any Award under the Plan that is
contrary to any provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any of the terms in the Plan as
constituted on the Date of Grant of such Award, the terms in the Plan as
constituted on the Date of Grant of such Award shall control.
8.02 AWARD AGREEMENT. If there is any conflict between the provisions
of an Award Agreement and the terms of the Plan, the terms of the Plan shall
control.
<PAGE>
8.03 MODIFICATION OF AWARD AFTER GRANT. Except as provided by the
Committee, in its sole discretion, in the Award Agreement or as provided in
Section 8.06, 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) shall not be inconsistent
with the terms of the Plan, and (b) shall be approved by the Committee.
8.04 LIMITATIONS ON TRANSFER. The rights and interest of a Participant
under the Plan may not be assigned or transferred other than by will or the laws
of descent and distribution. During the lifetime of a Participant, only the
Participant personally may exercise rights under the Plan. Except as otherwise
specifically provided in the Plan, a Participant's Beneficiary may exercise the
Participant's rights only to the extent they were exercisable under the Plan at
the date of the death of the Participant and are otherwise currently
exercisable.
8.05 TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares of Common Stock issuable under such Participant's Award, or with respect
to any income recognized upon lapse of restrictions applicable to an Award or
upon a disqualifying disposition of Common Stock received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer issuance of
Common Stock upon the grant, exercise or vesting of an Award unless indemnified
to its satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Committee or its delegate
and shall be payable by the Participant at such time as the Committee
determines. The methods of withholding may include, without limitation, the
payment of cash by the Participant to the Company and the withholding from the
Award, at the appropriate time, of a number of shares of Common Stock
sufficient, based upon the Fair Market Value of such Common Stock, to satisfy
such tax withholding requirements. The Committee shall be authorized, in its
sole discretion, to establish such rules and procedures relating to any such
withholding methods as it deems necessary or appropriate.
8.06 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) 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 shall 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 Committee shall have the power and sole discretion to
determine the nature and amount of the adjustment to be made in each
case. In no event shall any adjustment be made under the provisions of
this Section 8.06(a) to any previous grant of Restricted Shares if an
adjustment has been or will be made to the shares of Common Stock
awarded to a Participant in such person's capacity as a stockholder.
(b) Sale or Reorganization. After any reorganization, merger or
consolidation in which the Company is the surviving entity, each
Participant shall, 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 of Common Stock 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 of
Common Stock equal to the number of shares of Common Stock receivable
or exercisable pursuant to such Award. Comparable rights shall accrue
to each Participant in the event of successive reorganizations, mergers
or consolidations of the character described above.
<PAGE>
(c) Options to Purchase Stock of Acquired Companies. After any
reorganization, merger or consolidation in which the Company shall be a
surviving entity, the 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 shall be determined by the Committee in its sole discretion.
Any such adjustments may provide for the elimination of any fractional
shares of Common Stock that might otherwise become subject to any
Options.
8.07 LOANS. The Company shall be entitled, if the Committee in its sole
discretion deems it necessary or desirable, to lend money to a Participant for
purposes of (a) exercising his or her rights under an Award hereunder or (b)
paying any income tax liability related to an Award; provided, however, that
Non- Employee Directors shall not be eligible to receive such loans and
provided, further, that the portion of the per share exercise price of an Option
equal to the par value per share of Common Stock shall not be paid by means of a
promissory note. Such a loan shall be evidenced by a recourse promissory note
payable to the order of the Company executed by the Participant and containing
such other terms and conditions as the Committee may deem desirable. The
interest rate on such loans shall be sufficient to avoid imputed interest under
the Code.
8.08 SURRENDER OF AWARDS. Any Award granted to a Participant under the
Plan may be surrendered to the Company for cancellation on such terms as the
Committee and holder approve.
8.09 NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT OR SERVICE. No employee,
Non-Employee Director or other person shall have any claim or right to be
granted an Award. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee or Non-Employee Director any right to be
retained in the employ or service of the Company or any of its subsidiaries.
8.10 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Income recognized by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any employee pension benefit plan (as such term
is defined in Section 3(2) of the Employee Retirement Income Security Act of
1974) or group insurance or other benefit plans applicable to the Participant
that are maintained by the Company or any of its subsidiaries, except as may be
provided under the terms of such plans or determined by resolution of the Board.
8.11 GOVERNING LAW. Except to the extent required by Delaware corporate
law, the Plan and all determinations made and actions taken pursuant to the Plan
shall be governed by the laws of the State of New York other than the conflict
of laws provisions of such laws, and shall be construed in accordance therewith.
8.12 NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
8.13 CAPTIONS. The captions (i.e., all Section and Article headings)
used in the Plan are for convenience only, do not constitute a part of the Plan,
and shall not be deemed to limit, characterize or affect in any way any
provisions of the Plan, and all provisions of the Plan shall be construed as if
no captions have been used in the Plan.
8.14 SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.
<PAGE>
8.15 LEGENDS. All certificates for Common Stock delivered under the
Plan shall be subject to such transfer restrictions set forth in the Plan and
such other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed and any applicable
federal or state securities law, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate references to such
restrictions.
8.16 AMENDMENT AND TERMINATION.
(a) Amendment. The Board shall have complete power and authority to
amend the Plan at any time it is deemed necessary or appropriate;
provided, however, that the Board shall not, without the affirmative
approval of the holder of Company Voting Securities, make any amendment
that requires stockholder approval under the Code or under any other
applicable law, unless the Board determines that compliance with the
Code or such other applicable law is no longer desired. No termination
or amendment of the Plan may, without the consent of the Participant to
whom any Award shall theretofore have been granted under the Plan,
adversely affect the right of such individual under such Award;
provided, however, that the Committee may, in its sole discretion, make
such provision in the Award Agreement for amendments that, in its sole
discretion, it deems appropriate.
Termination. The Board shall have the right and the power to terminate
the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the
Plan shall 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.
<PAGE>
OPTION CERTIFICATE
INCENTIVE STOCK OPTION
(Non-Assignable)
40,000 Shares
To Purchase Class A Common Stock of
BULL & BEAR GROUP, INC.
Issued Pursuant to the Bull & Bear Group, Inc.
1995 Long-Term Incentive Plan (as
Amended and Restated as of October 29, 1997)
THIS CERTIFIES that on October 29, 1997, Bassett S. Winmill
(the "Holder") was granted an option ("Option") to purchase at the Option price
of $2.475 per share all or any part of 40,000 fully paid and non-assessable
shares ("Shares") of the Class A Common Stock, par value $.01 per share, of BULL
& BEAR GROUP, INC. ("Corporation"), a Delaware corporation, upon and subject to
the following terms and conditions.
This Option shall expire on October 28, 2002.
This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder. This Option shall not be transferable by
the Holder otherwise than by will or by the laws of descent and distribution.
Except as otherwise provided pursuant to the Bull & Bear
Group, Inc. 1995 Long-Term Incentive Plan (as Amended and Restated as of October
29, 1997) (the "Plan"), this Option may be exercised in whole or in part with
respect to 100% of the Shares subject to this Option on and after the later of
(i) the date of grant of this Option or (ii) the date on which the Holder has
completed two years of employment with the Corporation or any of its
subsidiaries. In no event, however, may this Option be exercised after the
Option's expiration date.
Upon any exercise of this Option, payment of the purchase
price for the Shares to be purchased pursuant to such exercise shall be made (i)
in cash or by check to the order of the Corporation, (ii) by the delivery to the
Corporation of Shares already owned by the Holder, which Shares shall be valued
at their fair market value on the date of exercise of the Option, (iii) if
permitted by the Committee under the Plan, by delivering to the Corporation a
recourse promissory note in accordance with and subject to the terms of Section
8.07 of the Plan, or (iv) by any combination of the foregoing.
The Option and this Option certificate are issued pursuant to
and are subject to all of the terms and conditions of the Plan, the terms and
conditions of which are hereby incorporated as though set forth at length and a
copy of which is attached hereto.
WITNESS the signature of the Corporation's duly authorized
officer.
Dated as of October 29, 1997
BULL & BEAR GROUP, INC.
By:/s/ Thomas B. Winmill
55
<PAGE>
OPTION CERTIFICATE
NON-QUALIFIED STOCK OPTION
(Non-Assignable)
5,000 Shares
To Purchase Class A Common Stock of
BULL & BEAR GROUP, INC.
Issued Pursuant to the Bull & Bear Group, Inc.
1995 Long-Term Incentive Plan (as
Amended and Restated as of October 29, 1997)
THIS CERTIFIES that on October 29, 1997, Edward G. Webb, Jr.
(the "Holder") was granted an option ("Option"), which is not an incentive stock
option, to purchase at the Option price of $2.25 per share all or any part of
5,000 fully paid and non-assessable shares ("Shares") of the Class A Common
Stock, par value $.01 per share, of BULL & BEAR GROUP, INC. ("Corporation"), a
Delaware corporation, upon and subject to the following terms and conditions.
This Option shall expire on October 28, 2002.
This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder. This Option shall not be transferable by
the Holder otherwise than by will or by the laws of descent and distribution.
Except as otherwise provided pursuant to the Bull & Bear
Group, Inc. 1995 Long-Term Incentive Plan (as Amended and Restated as of October
29, 1997) (the "Plan"), this Option may be exercised in whole or in part with
respect to 100% of the Shares subject to this Option on and after the later of
(i) the date of grant of this Option or (ii) the date on which the Holder has
completed two years of employment with, or service as a non-employee director
of, the Corporation. In no event, however, may this Option be exercised after
the Option's expiration date.
Upon any exercise of this Option, payment of the purchase
price for the Shares to be purchased pursuant to such exercise shall be made (i)
in cash or by check to the order of the Corporation, (ii) by the delivery to the
Corporation of Shares already owned by the Holder, which Shares shall be valued
at their fair market value on the date of exercise of the Option, or (iii) by
any combination of the foregoing.
The Option and this Option certificate are issued pursuant to
and are subject to all of the terms and conditions of the Plan, the terms and
conditions of which are hereby incorporated as though set forth at length and a
copy of which is attached hereto.
WITNESS the signature of the Corporation's duly authorized
officer.
Dated as of October 29, 1997
BULL & BEAR GROUP, INC.
By:/s/ Thomas B. Winmill
56
<PAGE>
OPTION CERTIFICATE
NON-QUALIFIED STOCK OPTION
(Non-Assignable)
5,000 Shares
To Purchase Class A Common Stock of
BULL & BEAR GROUP, INC.
Issued Pursuant to the Bull & Bear Group, Inc.
1995 Long-Term Incentive Plan (as
Amended and Restated as of October 29, 1997)
THIS CERTIFIES that on October 29, 1997, Charles A. Carroll
(the "Holder") was granted an option ("Option"), which is not an incentive stock
option, to purchase at the Option price of $2.25 per share all or any part of
5,000 fully paid and non-assessable shares ("Shares") of the Class A Common
Stock, par value $.01 per share, of BULL & BEAR GROUP, INC. ("Corporation"), a
Delaware corporation, upon and subject to the following terms and conditions.
This Option shall expire on October 28, 2002.
This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder. This Option shall not be transferable by
the Holder otherwise than by will or by the laws of descent and distribution.
Except as otherwise provided pursuant to the Bull & Bear
Group, Inc. 1995 Long-Term Incentive Plan (as Amended and Restated as of October
29, 1997) (the "Plan"), this Option may be exercised in whole or in part with
respect to 100% of the Shares subject to this Option on and after the later of
(i) the date of grant of this Option or (ii) the date on which the Holder has
completed two years of employment with, or service as a non-employee director
of, the Corporation. In no event, however, may this Option be exercised after
the Option's expiration date.
Upon any exercise of this Option, payment of the purchase
price for the Shares to be purchased pursuant to such exercise shall be made (i)
in cash or by check to the order of the Corporation, (ii) by the delivery to the
Corporation of Shares already owned by the Holder, which Shares shall be valued
at their fair market value on the date of exercise of the Option, or (iii) by
any combination of the foregoing.
The Option and this Option certificate are issued pursuant to
and are subject to all of the terms and conditions of the Plan, the terms and
conditions of which are hereby incorporated as though set forth at length and a
copy of which is attached hereto.
WITNESS the signature of the Corporation's duly authorized
officer.
Dated as of October 29, 1997
BULL & BEAR GROUP, INC.
By:/s/ Thomas B. Winmill
57
<PAGE>
OPTION CERTIFICATE
INCENTIVE STOCK OPTION
(Non-Assignable)
40,000 Shares
To Purchase Class A Common Stock of
BULL & BEAR GROUP, INC.
Issued Pursuant to the Bull & Bear Group, Inc.
1995 Long-Term Incentive Plan (as
Amended and Restated as of October 29, 1997)
THIS CERTIFIES that on October 29, 1997, Thomas B. Winmill
(the "Holder") was granted an option ("Option") to purchase at the Option price
of $2.475 per share all or any part of 40,000 fully paid and non-assessable
shares ("Shares") of the Class A Common Stock, par value $.01 per share, of BULL
& BEAR GROUP, INC. ("Corporation"), a Delaware corporation, upon and subject to
the following terms and conditions.
This Option shall expire on October 28, 2002.
This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder. This Option shall not be transferable by
the Holder otherwise than by will or by the laws of descent and distribution.
Except as otherwise provided pursuant to the Bull & Bear
Group, Inc. 1995 Long-Term Incentive Plan (as Amended and Restated as of October
29, 1997) (the "Plan"), this Option may be exercised in whole or in part with
respect to 100% of the Shares subject to this Option on and after the later of
(i) the date of grant of this Option or (ii) the date on which the Holder has
completed two years of employment with the Corporation or any of its
subsidiaries. In no event, however, may this Option be exercised after the
Option's expiration date.
Upon any exercise of this Option, payment of the purchase
price for the Shares to be purchased pursuant to such exercise shall be made (i)
in cash or by check to the order of the Corporation, (ii) by the delivery to the
Corporation of Shares already owned by the Holder, which Shares shall be valued
at their fair market value on the date of exercise of the Option, (iii) if
permitted by the Committee under the Plan, by delivering to the Corporation a
recourse promissory note in accordance with and subject to the terms of Section
8.07 of the Plan, or (iv) by any combination of the foregoing.
The Option and this Option certificate are issued pursuant to
and are subject to all of the terms and conditions of the Plan, the terms and
conditions of which are hereby incorporated as though set forth at length and a
copy of which is attached hereto.
WITNESS the signature of the Corporation's duly authorized
officer.
Dated as of October 29, 1997
BULL & BEAR GROUP, INC.
By:/s/ Thomas B. Winmill
58
<PAGE>
OPTION CERTIFICATE
INCENTIVE STOCK OPTION
(Non-Assignable)
40,000 Shares
To Purchase Class A Common Stock of
BULL & BEAR GROUP, INC.
Issued Pursuant to the Bull & Bear Group, Inc.
1995 Long-Term Incentive Plan (as
Amended and Restated as of October 29, 1997)
THIS CERTIFIES that on October 29, 1997, Mark C. Winmill (the
"Holder") was granted an option ("Option") to purchase at the Option price of
$2.475 per share all or any part of 40,000 fully paid and non-assessable shares
("Shares") of the Class A Common Stock, par value $.01 per share, of BULL & BEAR
GROUP, INC. ("Corporation"), a Delaware corporation, upon and subject to the
following terms and conditions.
This Option shall expire on October 28, 2002.
This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder. This Option shall not be transferable by
the Holder otherwise than by will or by the laws of descent and distribution.
Except as otherwise provided pursuant to the Bull & Bear
Group, Inc. 1995 Long-Term Incentive Plan (as Amended and Restated as of October
29, 1997) (the "Plan"), this Option may be exercised in whole or in part with
respect to 100% of the Shares subject to this Option on and after the later of
(i) the date of grant of this Option or (ii) the date on which the Holder has
completed two years of employment with the Corporation or any of its
subsidiaries. In no event, however, may this Option be exercised after the
Option's expiration date.
Upon any exercise of this Option, payment of the purchase
price for the Shares to be purchased pursuant to such exercise shall be made (i)
in cash or by check to the order of the Corporation, (ii) by the delivery to the
Corporation of Shares already owned by the Holder, which Shares shall be valued
at their fair market value on the date of exercise of the Option, (iii) if
permitted by the Committee under the Plan, by delivering to the Corporation a
recourse promissory note in accordance with and subject to the terms of Section
8.07 of the Plan, or (iv) by any combination of the foregoing.
The Option and this Option certificate are issued pursuant to
and are subject to all of the terms and conditions of the Plan, the terms and
conditions of which are hereby incorporated as though set forth at length and a
copy of which is attached hereto.
WITNESS the signature of the Corporation's duly authorized
officer.
Dated as of October 29, 1997
BULL & BEAR GROUP, INC.
By:/s/ Thomas B. Winmill
59
<PAGE>
OPTION CERTIFICATE
INCENTIVE STOCK OPTION
(Non-Assignable)
5,000 Shares
To Purchase Class A Common Stock of
BULL & BEAR GROUP, INC.
Issued Pursuant to the Bull & Bear Group, Inc.
1995 Long-Term Incentive Plan (as
Amended and Restated as of October 29, 1997)
THIS CERTIFIES that on October 29, 1997, Robert D. Anderson
(the "Holder") was granted an option ("Option") to purchase at the Option price
of $2.25 per share all or any part of 5,000 fully paid and non-assessable shares
("Shares") of the Class A Common Stock, par value $.01 per share, of BULL & BEAR
GROUP, INC. ("Corporation"), a Delaware corporation, upon and subject to the
following terms and conditions.
This Option shall expire on October 28, 2002.
This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder. This Option shall not be transferable by
the Holder otherwise than by will or by the laws of descent and distribution.
Except as otherwise provided pursuant to the Bull & Bear
Group, Inc. 1995 Long-Term Incentive Plan (as Amended and Restated as of October
29, 1997) (the "Plan"), this Option may be exercised in whole or in part with
respect to 100% of the Shares subject to this Option on and after the later of
(i) the date of grant of this Option or (ii) the date on which the Holder has
completed two years of employment with the Corporation or any of its
subsidiaries. In no event, however, may this Option be exercised after the
Option's expiration date.
Upon any exercise of this Option, payment of the purchase
price for the Shares to be purchased pursuant to such exercise shall be made (i)
in cash or by check to the order of the Corporation, (ii) by the delivery to the
Corporation of Shares already owned by the Holder, which Shares shall be valued
at their fair market value on the date of exercise of the Option, (iii) if
permitted by the Committee under the Plan, by delivering to the Corporation a
recourse promissory note in accordance with and subject to the terms of Section
8.07 of the Plan, or (iv) by any combination of the foregoing.
The Option and this Option certificate are issued pursuant to
and are subject to all of the terms and conditions of the Plan, the terms and
conditions of which are hereby incorporated as though set forth at length and a
copy of which is attached hereto.
WITNESS the signature of the Corporation's duly authorized
officer.
Dated as of October 29, 1997
BULL & BEAR GROUP, INC.
By:/s/ Thomas B. Winmill
60
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and BULL & BEAR FUNDS I, INC., a Maryland
corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks shall
conform to standards set by the Licensor and be under control of the
Licensor.
5. The license provided for in this Agreement may be terminated in the
event the Investment Manager of the Licensee shall not be Bull & Bear
Advisers, Inc. or some other corporation controlling, controlled by, or
under the common control of the Licensor.
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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
1.
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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
BULL & BEAR FUNDS I, INC.
By:/s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
9. Bull & Bear No-Fee IRA
10. Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and BULL & BEAR FUNDS II, INC., a Maryland
corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks shall
conform to standards set by the Licensor and be under control of the
Licensor.
5. The license provided for in this Agreement may be terminated in the
event the Investment Manager of the Licensee shall not be Bull & Bear
Advisers, Inc. or some other corporation controlling, controlled by, or
under the common control of the Licensor.
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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
BULL & BEAR FUNDS II, INC.
By:/s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
9. Bull & Bear No-Fee IRA
10. Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and BULL & BEAR GOLD INVESTORS LTD., a
Maryland corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks shall
conform to standards set by the Licensor and be under control of the
Licensor.
5. The license provided for in this Agreement may be terminated in the
event the Investment Manager of the Licensee shall not be Bull & Bear
Advisers, Inc. or some other corporation controlling, controlled by, or
under the common control of the Licensor.
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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
BULL & BEAR GOLD INVESTORS LTD.
By:/s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
9. Bull & Bear No-Fee IRA
10. Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and BULL & BEAR GLOBAL INCOME FUND, INC.,
a Maryland corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks 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 Marks 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 Marks 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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
BULL & BEAR GLOBAL INCOME FUND, INC.
By:/s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
9. Bull & Bear No-Fee IRA
10. Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and MIDAS FUND, INC., a Maryland
corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks 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 Marks 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 Marks 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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
MIDAS FUND, INC.
By:/s/ Thomas B. Winmill
<PAGE>
Schedule A
Bull & Bear Performance Account
Bull & Bear Performance Plus Account
Performance
Bull & Bear
Performance Driven
Bull & Bear Performance Driven
Bull & Bear Stockfax
Bull & Bear No-Fee IRA
Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and BULL & BEAR MUNICIPAL INCOME FUND,
INC., a Maryland corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks 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 Marks 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 Marks 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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
BULL & BEAR MUNICIPAL INCOME FUND, INC.
By:/s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
8. Bull & Bear No-Fee IRA
9. Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and ROCKWOOD FUND, INC., a Maryland
corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks 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 Marks 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 Marks 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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
ROCKWOOD FUND, INC.
By: /s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
9. Bull & Bear No-Fee IRA
10. Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and BULL & BEAR SPECIAL EQUITIES FUND,
INC., a Maryland corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks shall
conform to standards set by the Licensor and be under control of the
Licensor.
5. The license provided for in this Agreement may be terminated in the
event the Investment Manager of the Licensee shall not be Bull & Bear
Advisers, Inc. or some other corporation controlling, controlled by, or
under the common control of the Licensor.
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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
BULL & BEAR SPECIAL EQUITIES FUND, INC.
By:/s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
9. Bull & Bear No-Fee IRA
10. Performance Plus
<PAGE>
NON-EXCLUSIVE LICENSE AGREEMENT
AGREEMENT dated as of March 4, 1998 between BULL & BEAR GROUP, INC., a
Delaware corporation (the "Licensor") and BULL & BEAR U.S. GOVERNMENT SECURITIES
FUND, INC., a Maryland corporation (the "Licensee").
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 marks listed on Schedule A hereto, as such Schedule may be
amended from time to time, (hereinafter collectively referred to as the
"Licensed Marks"), and
WHEREAS, the Licensee has requested a non-exclusive license to use the
Licensed Marks 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 Marks 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 Marks.
4. The Licensee agrees that the nature and quality of all services
rendered by the Licensee in connection with the Licensed Marks 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 Marks 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 Marks 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 Marks and will, after
such termination, make no further reference to the Licensed Marks 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.
<PAGE>
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.
BULL & BEAR GROUP, INC.
By:/s/ Robert D. Anderson
BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.
By: /s/ Thomas B. Winmill
<PAGE>
Schedule A
1. Bull & Bear Performance Account
2. Bull & Bear Performance Plus Account
3. Performance
4. Bull & Bear
5. Performance Driven
6. Bull & Bear Performance Driven
7. Bull & Bear Stockfax
9. Bull & Bear No-Fee IRA
10. Performance Plus
<PAGE>
EXHIBIT 11 - STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
1997 1996 1995
---------------------- ---------------------- -------------------------
BASIC DILUTED BASIC DILUTED BASIC DILUTED
Weighted average common
<S> <C> <C> <C> <C> <C> <C>
shares outstanding 1,370,017 1,370,017 1,369,555 1,369,555 1,499,516 1,499,516
Weighted average common shares
issuable upon exercise of stock
options under the
treasury stock method - 98,235 - - - 50,299
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 1,370,017 1,468,252 1,369,555 1,369,555 1,499,516 1,549,815
</TABLE>
89
<PAGE>
EXHIBIT 21 - WHOLLY-OWNED SUBSIDIARIES OF THE COMPANY
Bull & Bear Advisers, Inc.,
a Delaware corporation
Bull & Bear Securities, Inc.,
a Delaware corporation
Hanover Direct Advertising Company, Inc.,
a Delaware corporation
Investor Service Center, Inc.,
a Delaware corporation
Lion Exploration, Inc.,
a Delaware corporation
Midas Management Corporation
a Delaware corporation
Performance Properties, Inc.,
a Delaware corporation
Rockwood Advisers, Inc.
a Delaware Corporation
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000052234
<NAME> Bull & Bear Group, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Dec-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 312,633
<SECURITIES> 1,846,028
<RECEIVABLES> 456,938
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,027,420
<PP&E> 1,699,598
<DEPRECIATION> 870,500
<TOTAL-ASSETS> 4,827,074
<CURRENT-LIABILITIES> 364,503
<BONDS> 0
0
0
<COMMON> 13,701
<OTHER-SE> 4,441,410
<TOTAL-LIABILITY-AND-EQUITY> 4,455,111
<SALES> 0
<TOTAL-REVENUES> 6,987,417
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,326,988
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 660,429
<INCOME-TAX> 34,704
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 625,725
<EPS-PRIMARY> .46
<EPS-DILUTED> .43
</TABLE>
