SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
or
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number: 0-795
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
BADGER PAPER MILLS, INC.
PROFIT SHARING PLAN AND TRUST FOR UNION EMPLOYEES
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
BADGER PAPER MILLS, INC.
200 West Front Street
Peshtigo, Wisconsin 54157
1
REQUIRED INFORMATION
The following financial statements and schedules of the Badger Paper
Mills, Inc. Profit Sharing Plan and Trust for Union Employees, prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974, as amended, are filed herewith.
2
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BADGER PAPER MILLS, INC. PROFIT SHARING PLAN
AND TRUST FOR UNION EMPLOYEES
December 31, 2000 and 1999
3
C O N T E N T S
Page
Report Of Independent Certified Public Accountants 5
Financial Statements
Statements Of Net Assets Available For Benefits 6
Statements Of Changes In Net Assets Available For Benefits 7
Notes To Financial Statements 8
Supplementary Information 12
Report Of Independent Certified Public Accountants
On Supplementary Information 13
Schedule H, Line 4(i) - Schedule Of Assets Held At End Of Year 14
Schedule G - Schedule Of Nonexempt Transactions 15
4
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Trust Administrative Committee
Badger Paper Mills, Inc. Profit Sharing Plan
and Trust For Union Employees
We have audited the accompanying statements of net assets available for benefits
of Badger Paper Mills, Inc. Profit Sharing Plan and Trust for Union Employees as
of December 31, 2000 and 1999, 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 audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Badger Paper
Mills, Inc. Profit Sharing Plan and Trust for Union Employees as of December 31,
2000 and 1999, 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.
/s/ Grant Thornton LLP
Appleton, Wisconsin
May 17, 2001
5
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
ASSETS 2000 1999
---- ----
Cash $ - $ 5,800
Investments, at fair value
(notes B3 and C)
Common trust funds 5,577,290 6,897,630
Mutual funds 29,268,470 30,370,374
Common stock 23,059 59,205
----------- -----------
34,868,819 37,327,209
Employer contributions receivable (note A2) 310,133 311,754
Accrued income 5 49
----------- -----------
Total Assets 35,178,957 37,644,812
----------- -----------
LIABILITIES
Miscellaneous payable 9,364 -
----------- -----------
Total Liabilities 9,364 -
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $35,169,593 $37,644,812
=========== ===========
The accompanying notes are an integral part of these statements.
6
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31,
2000 1999
---- ----
Additions to net assets available for benefits:
Investment income:
Interest income and dividends $ 368,536 $ 302,124
Net appreciation in fair value of investments - 5,927,382
------------ ------------
368,536 6,229,506
Contributions (note A2):
Employee contributions 532,572 536,375
Employer contributions 310,133 311,754
------------ ------------
842,705 848,129
------------ ------------
Total additions 1,211,241 7,077,635
------------ ------------
Deductions from net assets available for benefits:
Net depreciation in fair value of investments 1,408,584 -
Benefits paid to participants 2,201,477 4,654,582
Trust and other fees 32,712 36,401
------------ ------------
Total deductions 3,642,773 4,690,983
------------ ------------
(DECREASE) INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS (2,431,532) 2,386,652
Net assets available for benefits:
Beginning of year 37,644,812 35,270,389
Transfer to Badger Paper Mills, Inc. Profit Sharing
Plan and Trust for Non-Union Employees (43,687) (12,229)
------------ ------------
Net assets available for benefits at end of year $ 35,169,593 $ 37,644,812
============ ============
The accompanying notes are an integral part of these statements.
7
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
NOTE A - PLAN DESCRIPTION
The following brief description of Badger Paper Mills, Inc. Profit Sharing
Plan and Trust for Union Employees (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan agreement
for more complete information.
1. General
The Plan is a defined contribution pension plan which covers substantially
all union employees of Badger Paper Mills, Inc. and Subsidiary (the
"Company") who have completed at least one year of service with the Company
at the Peshtigo division and have attained the age of 18. It is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA) and subsequent legislation.
2. Contributions
The Company contributes to the Plan each year the greater of (1) 25% of its
adjusted net income, as defined in the Plan, for the year, (2) 25% of its
adjusted net income, as defined in the Plan, for the year, calculated
solely with reference to the Peshtigo division or (3) 4% of the total
compensation paid to Plan participants during the year plus 4% of the
excess compensation over the Social Security wage base. In addition, the
Company's contribution shall not exceed 15% of the total compensation paid
to Plan participants during the year and the Company reserves the right to
terminate contributions.
A cash or deferred arrangement plan, known as CODA, as authorized by
Section 401(k) of the Internal Revenue Code (IRC), allows employees to
defer a portion of their compensation up to the applicable IRC limits by
having it contributed by the Company to their individual account in the
Plan.
3. Vesting
Participants are at all times fully vested in the value of their accounts
attributable to their voluntary contributions.
Participants become 20% vested in the Company's profit sharing contribution
following three years of service and are additionally vested at 20% for
each year of additional service up to seven years of service, at which time
participants are fully vested. Upon death, disability or retirement,
participants are automatically 100% vested regardless of years of service.
8
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
NOTE A - PLAN DESCRIPTION - Continued
4. Benefits
On termination of service due to death, disability or retirement, the
participant or beneficiary is entitled to receive vested benefits within
two months following the participant's separation from service. Upon a
participant's termination from employment with the Company for a reason
other than death, disability or retirement, the participant is entitled to
the vested balance in their account.
The method of distribution for account balances exceeding $5,000 will be
determined by an election made by the Plan participant. The methods
available are lump sum, direct rollover, installment payments or part
installments and lump sum. The standard method for account balances less
than $5,000 is lump sum payments.
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. Participants will
become fully vested upon termination of the Plan.
6. Participant Accounts
Each participant's account is credited with the participant's contribution
and the Company's profit contribution, along with an allocation of Plan
earnings and forfeitures of terminated participants' nonvested accounts.
The participants share in the Company's contributions and forfeitures on
the basis of allocated shares. Shares are determined through a formula
based upon each participant's earnings and number of years of service with
the Company.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan have been prepared in conformity with
accounting principles generally accepted in the United States of America as
applied to profit sharing plans.
A summary of the significant accounting policies consistently applied in
the preparation of the accompanying financial statements follows.
1. Use of Estimates
In preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America, management
is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported period. Actual results
could differ from those estimates.
9
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
2. Basis of Accounting
The financial statements of the Plan are prepared on an accrual basis.
3. Valuation of Investments
The Plan's investments are held by Wells Fargo Bank Minnesota, N.A. (the
"Trustee"). Plan investments are stated at market value as reported by the
Plan Trustee.
Investments in securities traded on a national securities exchange are
valued at the last reported sales price on the last business day of the
year; securities traded in the over-the-counter market and listed
securities for which no sale was reported on that date are valued at the
mean between the last reported bid and asked prices. Investments in mutual
funds are stated at a value based upon the per unit allocation of the
funds' net assets, stated at fair value on the last business day of the
year.
NOTE C - INVESTMENTS
The following schedule presents the investments held by the Trustee in each
fund at December 31, 2000 and 1999. Investments that represent 5% or more
of the Plan's net assets are separately identified.
2000 1999
----------- -----------
Common Trust Funds:
Wells Fargo Stable Return Fund $ 5,575,211 $ 6,888,442
Other 2,079 9,188
Mutual Funds:
Wells Fargo Growth Balanced Fund 7,879,403 9,675,987
Wells Fargo Growth Equity Fund 4,721,807 4,604,824
Wells Fargo Diversified Equity Fund 4,489,943 9,958,165
Janus Overseas Fund 2,631,883 3,916,362
Wells Fargo Large Company Growth Fund 3,078,149 1,209,701
Wells Fargo Small Cap Fund 4,749,986 487,219
Other 1,717,299 518,116
Other 23,059 59,205
----------- -----------
$34,868,819 $37,327,209
=========== ===========
10
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
NOTE C - INVESTMENTS - Continued
The Plan's investments (including investments bought, sold and held during
the year) appreciated (depreciated) in value as follows for the years ended
December 31,
2000 1999
----------- -----------
Mutual Funds $(1,384,906) $ 5,957,418
Common Stock (23,678) (30,036)
----------- -----------
$(1,408,584) $ 5,927,382
=========== ===========
NOTE D - ADMINISTRATIVE EXPENSES
All administrative expenses in connection with the operation of the Plan
are paid from Plan earnings.
NOTE E - INCOME TAX STATUS
The Plan obtained its latest determination letter on February 25, 1999, in
which the Internal Revenue Service stated that the Plan was designed in
accordance with applicable requirements of the IRC. Since receiving the
determination letter, the Plan has been amended. However, the Plan
administrator and the Plan's tax counsel believe that the restated Plan is
designed, and is currently being operated in compliance with, the
applicable requirements of the IRC.
11
SUPPLEMENTARY INFORMATION
12
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON SUPPLEMENTARY INFORMATION
Trust Administrative Committee
Badger Paper Mills, Inc. Profit Sharing Plan
and Trust for Union Employees
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary schedules of Badger
Paper Mills, Inc. Profit Sharing Plan and Trust for Union Employees are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplementary schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Grant Thornton LLP
Appleton, Wisconsin
May 17, 2001
13
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS HELD AT END OF YEAR
Employer ID # 39-0143840 - Plan # 001
December 31, 2000
(b) Identity of issue, borrower, (c) Description of investment including maturity (e) Current
(a) lessor or similar party date, rate of interest, collateral, par or maturity value value
- ------- --------------------------------- ----------------------------------------------------------- ------------
* Wells Fargo Bank, N.A. Stable Return Fund $ 5,575,211
Short-Term Investment Fund 2,079
-----------
5,577,290
* Wells Fargo Bank, N.A. Growth Balanced Fund 7,879,403
Growth Equity Fund 4,721,807
Large Company Growth Fund 3,078,149
Strategic Income Fund 1,485,712
Diversified Equity Fund 4,489,943
S & P 500 Collective Fund 231,587
Small Cap Fund 4,749,986
-----------
26,636,587
* Badger Paper Mills, Inc. Common Stock 23,059
Janus Overseas Fund 2,631,883
-----------
$34,868,819
===========
* Indicates party-in-interest investment.
14
Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Union Employees
Schedule G - SCHEDULE OF NONEXEMPT TRANSACTIONS
Employer ID # 39-0143840 - Plan # 001
December 31, 2000
(b) (c) Description of (g) Expenses (j)
Relationship to transactions including incurred in (h) (i) Net gain
(a) plan, employer, maturity, date, rate of (d) (e) (f) connection Cost Current or (loss)
Identity of or other party- interest, collateral, Purchase Selling Lease with of value on each
party involved in-interest par or maturity value price price rental transaction asset of asset transaction
- -------------- --------------- ------------------------ -------- ------- ------- ----------- ----- -------- -----------
Employer Plan Sponsor In one instance, a N/A N/A $8,466 N/A N/A $8,466 N/A
non-periodic payroll
deferral was inadver-
tently deposited past
the 15 day requirement.
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Profit Sharing Trust Committee for Union Employees, which administers the
Plan, has duly caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Peshtigo, and State of
Wisconsin, on this 13th day of June, 2001.
BADGER PAPER MILLS, INC. PROFIT
SHARING PLAN AND TRUST FOR
UNION EMPLOYEES
By: /s/ Michael J. Bekes
-------------------------------------
Michael J. Bekes
By: /s/ Michael E. Staffeldt
------------------------------------
Michael E. Staffeldt
By: /s/ Kenneth W. Berman
-------------------------------------
Kenneth W. Berman
The foregoing persons are all of the members of the Profit Sharing
Trust Committee for Union Employees which is the administrator of the Badger
Paper Mills, Inc. Profit Sharing Plan and Trust for Union Employees.
16
EXHIBIT INDEX
BADGER PAPER MILLS, INC.
PROFIT SHARING PLAN AND TRUST FOR UNION EMPLOYEES
FORM 11-K
Exhibit No. Exhibit Page No.
---------- ------- --------
(23.1) Consent of Grant Thornton, LLP 19
17
Exhibit (23.1)
18