THE MIDLAND COMPANY 				Annual Report 				 on Form 11-K 				 to the 		 Securities and Exchange Commission 				 for the 			 Year Ended December 31, 1999 				UNITED STATES 		 SECURITIES AND EXCHANGE COMMISSION 			 Washington, D.C. 20549 				 Form 11-K (Mark one) [x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE 	ACT OF 1934 [FEE REQUIRED]. 	For the Fiscal Year Ended December 31, 1999. [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES 	EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. 	For the transition period from _____ to _____. 			MIDLAND-GUARDIAN CO. SALARIED 			EMPLOYEES 401(K) SAVINGS PLAN 			 (Full title of the Plan) 			 THE MIDLAND COMPANY 			 7000 Midland Boulevard 			 Amelia, Ohio 45102-2607 (Name of issuer of the securities held pursuant to the Plan and the 		 address of its principal executive office) Registrant's telephone number including area code (513) 943-7100 Required information: 	(a) Financial statements filed as a part of this report: 		Independent Auditors' Report 		Statements of Net Assets Available for Plan Benefits as of 			December 31, 1999 and 1998 		Statements of Changes in Net Assets Available for Plan 			Benefits for the Years Ended December 31, 1999 and 1998 		Notes to Financial Statements - December 31, 1999 and 1998 		Supplemental Schedules: 			Form 5500, Schedule of Assets Held for Investment 				Purposes - December 31, 1999 	(b) Exhibits 		Exhibit 23 Independent Auditors' Consent 					Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Investment Committee of the Plan has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. 			MIDLAND-GUARDIAN CO. SALARIED 			EMPLOYEES 401(K) SAVINGS PLAN 				(Name of Plan) /s/John I. Von Lehman John I. Von Lehman Executive Vice President, Chief Financial Officer and Secretary of The Midland Company For the Midland-Guardian Co. Salaried Employees 401(k) Savings Plan Dated: June 29, 2000 INDEPENDENT AUDITORS' REPORT We have audited the accompanying statements of net assets available for benefits of The Midland-Guardian Company Salaried Employees' 401(k) Savings Plan as of December 31, 1999 and 1998, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1999 and 1998, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such supplemental schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/Deloitte & Touche, LLP Deloitte & Touche, LLP Cincinnati, Ohio June 2, 2000 			 MIDLAND-GUARDIAN CO. 		 SALARIED EMPLOYEES' 401(k) SAVINGS PLAN 		STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 			 DECEMBER 31, 1999 AND 1998 	 ASSETS 1999 1998 				 ----------------------------------- INVESTMENTS - At market value: MARKETABLE SECURITIES $25,916,266 $21,184,410 (Cost - 1999, $22,438,036; 	 1998, $17,942,890) LOANS TO PARTICIPANTS 441,522 324,644 				 ----------------------------------- TOTAL INVESTMENTS 26,357,788 21,509,054 CASH - 69 CONTRIBUTIONS RECEIVABLE 9,714 2,508 ACCRUED INCOME 3,707 - 				 ----------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $26,371,209 $21,511,631 				 =================================== See notes to financial statements. 			 MIDLAND-GUARDIAN CO. 		 SALARIED EMPLOYEES' 401(k) SAVINGS PLAN 	 STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 		FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 						 1999 1998 					 ---------------------------- INCOME: Contributions from Midland-Guardian Co. $ 672,179 $ 358,980 Contributions from Employees 2,131,776 1,513,245 Dividend and Interest Income 1,830,689 1,872,644 Net Appreciation in Market Value of Investments 1,572,777 836,677 Rollovers 693,366 265,639 Other 60,242 13,272 					 ---------------------------- Total 6,961,029 4,860,457 BENEFIT PAYMENTS (2,101,451) (1,641,706) OTHER DEDUCTIONS - (40,636) 					 ---------------------------- INCREASE IN NET ASSETS 4,859,578 3,178,115 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of Year 21,511,631 18,333,516 					 ---------------------------- End of year $26,371,209 $21,511,631 					 ============================ See notes to financial statements. 			 MIDLAND-GUARDIAN CO. 		 SALARIED EMPLOYEES' 401(K) SAVINGS PLAN 			NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies 	Basis of Accounting 	The accompanying financial statements conform to accounting principles 	generally accepted in the United States of America and with the 	applicable accounting requirements of the Department of Labor's Rules 	and Regulations for Reporting and Disclosure under the Employee 	Retirement Income Security Act of 1974 ("ERISA"). 	Expenses of the Plan 	Midland-Guardian Co. Salaried Employees' 401(K) Savings Plan (the 	"Plan") sponsor, Midland-Guardian Co. (the "Company"), pays certain 	expenses of the Plan. 	Investments 	The Plan's investments in mutual funds are stated at fair value, based 	on market quotations provided by the trustee, and The Midland Company 	stock is valued at its quoted market price. Participant loans are 	valued at cost that approximates fair value. 	Method of Funding 	The Company's annual contribution to the Plan consists of matching 50 	percent of the basic contributions made by plan participants up to 6 	percent of the participant's wages. 	Estimates 	The preparation of financial statements in conformity with accounting 	principles generally accepted in the United States of America requires 	management to make estimates and assumptions. These estimates and 	assumptions affect the reported amounts of assets and liabilities and 	disclosure of contingent assets and liabilities at the date of the 	financial statements and the reported amounts of additions to and 	deductions from net assets available for benefits during the reporting 	period. Actual results could differ from those estimates. 	Reclassifications 	The Plan has apopted Statement of Position 99-3 "Accounting for and 	Reporting of Certain Defined Contribution Plan Investments and 	Disclosure Matters." As a result, the reclassification of the prior 	year financial statements has been made to eliminate the by fund 	disclosure. 	presentation. 2. Description of the Plan 	All full-time salaried employees of Midland-Guardian Co. and part time 	employees who anticipate working 1,000 hours or more annually are 	eligible to participate in the Plan upon their hire date. An employee 	may authorize (matched) basic contributions between one percent and six 	percent of base salary through payroll deductions. Supplemental 	(unmatched) contributions ranging from one to ten percent of the base 	salary are also permitted above the basic contribution. Participants 	are 100 percent vested in their contributions. The Company matches 50 	percent of an employee's basic contribution. The vesting period in 	Company matching contributions is five (5) years. At the end of each 	year of employment, the employee will vest in 20 percent of 	the Company's matching contribution. Vesting is based on the date of 	hire, not the date of enrollment in the Plan. Forfeitures are used to 	reduce future Company contributions. 	Upon enrollment in the Plan, a participant may direct employee 	contributions in one-percent increments in any of ten investment 	options. The investment options (funds and fund investment information 	obtained from fund publications) are as follows: 	a) EB Money Market Fund (formerly Prism Money Market Fund) - Funds are 	 invested primarily in high-grade money market instruments with the 	 objective of providing stability and liquidity. 	b) Victory Fund for Income - Funds are invested to provide a high level 	 of current income consistent with preservation of shareholders' 	 capital. 	c) Victory Balanced Fund - Funds are invested in common stock, 	 securities convertible into common stock, preferred stock, corporate 	 debt securities and U.S. Government securities. 	d) Victory Value Fund - Funds are invested primarily in a diversified 	 group of common stocks with an emphasis on companies with above 	 average total return potential. 	e) Victory Stock Index Fund - Funds are invested primarily in equity 	 securities with the objective of matching the performance of the 	 Standard & Poor's 500 stock index. 	f) American Capital Income Builder, Inc. - Funds are invested to seek 	 above-average current income, a growing stream of income, and 	 secondarily growth of capital. 	g) Janus Twenty Fund - Funds are invested to provide long-term growth of 	 capital by concentrating its investments in a core position of 20-30 	 common stocks. 	h) Janus Overseas Fund - Funds are invested to seek long-term growth of 	 capital by investing primarily in the common stocks of companies 	 outside the United States, normally investing at least 65% of its 	 assets in securities of issuers from at least five different 	 countries, excluding the U.S. 	i) INVESCO Dynamics Fund - Funds are invested in equity securities of 	 mid-sized core growth companies with the objective of long-term 	 capital appreciation through aggressive investment policies. 	j) Midland Stock Fund - Funds are invested in common stock of The 	 Midland Company. 	In 1998 the Victory Intermediate Income Fund and the Special Growth 	Fund were investment options. In 1999 these funds were terminated and 	replaced with the Victory Fund for Income and INVESCO Dynamics Fund, 	respectively. 	Participants may change their investment elections daily. 	The contributions are invested in pooled accounts maintained by the 	Plan's trustee. Individual accounts are maintained for each 	participant. Income from investments and the change in the market value 	of the investments are allocated to the participants' accounts based on 	the percentage that each account balance bears to the total pool 	balance. 	The Plan allows participants to borrow funds from their vested account 	balance subject to certain restrictions. Loans are repayable in one to 	five years unless the loan is related to the purchase of the 	participant's primary residence, in which case the term may be up to 	thirty years. The interest rate applicable to Plan loans is established 	at 1% over Firstar Corporation's prime rate (9.50% at December 31, 	1999). 	Participants should refer to the Plan agreement for a more complete 	description of the Plan's provisions. 	The Company expects to continue the Plan indefinitely, but reserves the 	right to terminate it by duly adopted written resolution of the Board of 	Directors of the Company. In the event of termination, the value of 	each participant's interest in Company matching contributions will 	become fully vested and Plan assets will be allocated to provide 	benefits to participants as set forth in the Plan, or as otherwise 	required by law. 3. Investments 	Investments representing more than five percent of net assets available 	for benefits are as follows: 								 Market 						 Cost Value 	1999 ---- ----- 	Key Trust Investment Management: 	 EB Money Market Fund $3,754,681 $4,136,761 	 Victory Balanced Fund 2,827,618 3,022,349 	 Victory Value Fund 6,681,384 7,953,734 	 INVESCO Dynamics 2,101,624 2,937,573 	 Victory Fund for Income Fund 1,419,664 1,351,958 	 Janus Twenty Fund 3,052,543 3,717,666 	1998 	Key Trust Investment Management: 	 EB Money Market Fund $3,629,911 $4,152,262 	 Victory Intermediate Income Fund 1,733,526 1,784,359 	 Victory Balance Fund 2,877,495 3,327,038 	 Victory Value Fund 7,432,993 9,571,252 	 Victory Special Growth Fund 1,260,197 1,210,630 	The Midland Company Common Stock 1,008,768 1,138,869 	The net appreciation (depreciation) of investments is as follows: 						 1999 1998 						 ---------- ---------- 	EB Money Market Fund $ 207,277 $ 211,578 	Victory Intermediate Income Fund - 32,052 	Victory Balance Fund (121,552) 212,329 	Victory Value Fund (134,999) 496,933 	Victory Special Growth (19,831) (124,854) 	INVESCO Dynamics Fund 870,419 - 	Victory Fund for Income (88,474) - 	Janus Overseas Fund 239,073 - 	Janus Twenty Fund 774,663 - 	American Capital Income Builder (2,517) - 	Victory Stock Index 44,037 - 	The Midland Company Common Stock (195,319) 8,639 						 ----------- ----------- 		Total $1,572,777 $ 836,677 						 =========== =========== 4. Tax Status 	The Plan has received a letter of determination dated January 25, 1996 	from the Internal Revenue Service which indicates that the Plan as 	designed at the date of the letter is in compliance with the applicable 	requirements of the Internal Revenue Code. The Plan Administrator 	believes that the Plan has been operated in compliance with the 	applicable requirements of the Internal Revenue Code and that it is 	qualified and the related trust is tax exempt. SUPPLEMENTAL SCHEDULE I ASSETS HELD FOR INVESTMENT PURPOSES 			 MIDLAND-GUARDIAN CO. 		 SALARIED EMPLOYEES' 401(K) SAVINGS PLAN 			 DECEMBER 31, 1999 								 MARKET 						 UNITS VALUE 						 ----------- -------------- Key Trust Investment Management: EB Money Market Fund 329,208 $ 4,136,761 Victory Balanced Fund 213,896 3,022,349 Victory Value Fund 463,702 7,953,734 INVESCO Dynamics Fund 113,595 2,937,573 Victory Fund for Income 107,128 1,351,958 Janus Overseas Fund 27,413 1,018,308 Janus Twenty Fund 44,560 3,717,666 American Capital Income Builder 978 41,746 Victory Stock Index Fund 24,054 582,777 The Midland Company Common Stock 53,544 1,153,394 							 ------------ Total before Participant Loans 25,916,266 Participant Loans (interest rates: 6% to 10%) 441,522 							 ------------ TOTAL INVESTMENTS $26,357,788 							 ============