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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2002
Commission File No. 000-4829
| A. | Full title of the plan and address of the plan, if different from that of the issuer named below: Nabi Savings & Retirement Plan |
|
| B. | Name of Issuer of the securities held pursuant to the plan and the address of its principal executive office: Nabi Biopharmaceuticals 5800 Park of Commerce Blvd., NW Boca Raton, FL 33487 (561) 989-5800 |
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NABI SAVINGS & RETIREMENT PLAN
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Report of Independent Certified Public Accountants |
3 | |||
Financial Statements |
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Statements of Net Assets Available for Benefits |
4 | |||
Statement of Changes in Net Assets Available for Benefits |
4 | |||
Notes to Financial Statements |
5 | |||
Signature |
9 | |||
Supplemental Schedule |
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Schedule H, Line 4i — Schedule of Assets (Held at End of Year) |
10 | |||
Index to Exhibits |
11 |
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Participants and Administrator of Nabi Savings & Retirement Plan
We have audited the accompanying statements of net assets available for benefits of Nabi Savings & Retirement Plan as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the year ended December 31, 2002. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 net assets available for benefits of the Plan at December 31, 2002 and 2001, and the changes in its net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2002, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
| /s/ ERNST & YOUNG LLP |
Fort Lauderdale, Florida
June 13, 2003
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NABI SAVINGS & RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
| December 31, | |||||||||
| 2002 | 2001 | ||||||||
Assets |
|||||||||
Investments, at fair value |
$ | 11,050,063 | $ | 9,455,387 | |||||
Receivables: |
|||||||||
Contribution from employer |
936,250 | 300,253 | |||||||
Contribution from plan participants |
33,282 | 27,308 | |||||||
Net assets available for benefits |
$ | 12,019,595 | $ | 9,782,948 | |||||
See accompanying notes.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2002
Additions: |
||||||
Investment results: |
||||||
Net depreciation in fair value of investments |
$ | (3,053,317 | ) | |||
Interest and dividend income |
189,228 | |||||
Contributions: |
||||||
Transfer from Nabi – Rockville Savings and Retirement Plan |
3,825,300 | |||||
From employer |
936,250 | |||||
From plan participants |
1,847,679 | |||||
Total additions |
3,745,140 | |||||
Deductions: |
||||||
Participant withdrawals |
1,447,422 | |||||
Administrative expenses |
61,071 | |||||
Total deductions |
1,508,493 | |||||
Net increase |
2,236,647 | |||||
Net assets available for benefits at beginning of year |
9,782,948 | |||||
Net assets available for benefits at end of year |
$ | 12,019,595 | ||||
See accompanying notes.
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NABI SAVINGS & RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan
The following description of the Nabi Savings & Retirement Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions. Copies of this document are available from the plan administrator.
General. The Plan is a defined contribution plan covering all eligible employees of Nabi Biopharmaceuticals. The Plan was adopted April 1, 1985. Employees are eligible for participation in the Plan on the first day of the calendar quarter following the employee’s date of hire.
The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Effective January 1, 2002, the Company amended the Plan to incorporate certain required legislative amendments.
Effective January 1, 2002, $3,825,300, which represented all remaining net assets of the Nabi-Rockville Savings & Retirement Plan, was transferred to the Plan, in connection with the merger of the Nabi-Rockville Savings & Retirement Plan with and into the Plan. As a result of such merger the Nabi-Rockville Savings & Retirement Plan ceased to exist as a separate entity as of January 1, 2002.
Contributions. Each year, participants may contribute up to 15% of their pre-tax annual compensation, as defined by the Plan. Participants may also contribute amounts representing eligible rollover distributions from other qualified retirement plans. Nabi Biopharmaceuticals’ contributions are discretionary at the option of Nabi Biopharmaceuticals’ Board of Directors. In 2002, Nabi Biopharmaceuticals contributed to the Plan a discretionary company match equal to 100% for employee contributions up to 4% of the participant’s earnings. In 2001, Nabi Biopharmaceuticals contributed to the Plan a discretionary company match equal to 50% for employee contributions up to 4% of the participant’s earnings.
Investment Options. Upon enrollment in the Plan, a participant may direct participant and employer contributions to any of the Plan’s fund options. Participants may change their investment options on a daily basis. In 2000, Nabi Biopharmaceuticals amended the Plan to permit investment in Nabi Biopharmaceuticals common stock.
Participant Accounts. Each participant’s account is credited with the participant’s contributions and allocations of (a) employer contributions and (b) Plan investment results, and is charged with an allocation of administrative expenses. Allocations are based on participants’ account balances or contributions, as defined. The benefit to which a participant is entitled is the benefit that can be provided by the participant’s vested account balance.
Vesting. Participants are immediately vested in their own contributions, current employer contributions and earnings thereon.
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Participant Loans. Participants may borrow from their fund accounts subject to a minimum of $1,000 and a maximum equal to the lesser of $50,000 or 50% of their vested account balances. Loan repayment periods are for a maximum of 5 years unless the loan is for the purchase of a primary residence, in which case a reasonable repayment period not to exceed 30 years is determined at the time of the loan. The loans are secured by 50% of the participant’s vested account balance and bear a reasonable rate of interest based on the local prevailing rate on the date approved. Principal and interest are paid ratably through payroll deduction.
Payment of Benefits. Upon death, disability, retirement, termination of service, or financial hardship, participants or their designated beneficiaries may receive a lump-sum amount equal to the vested amount of their accounts.
Forfeitures. Forfeitures resulted from non-vested benefit payments remaining in the Plan for all terminated employees who were participants in the Nabi-Rockville Savings & Retirement Plan. The balance of forfeited non-vested accounts at December 31, 2002 in the amount of $12,000 was used to partially offset the employer contribution to the Plan relating to the 2002 fiscal year.
2. Summary of Significant Accounting Policies
Basis of Presentation. The accompanying financial statements have been prepared on the accrual basis of accounting.
Valuation of Investments. The Plan’s investments are stated at fair value. The shares of registered investment companies are valued at quoted market prices that represent the net asset values of shares held by the Plan at year-end. Shares of Nabi Biopharmaceuticals common stock included in participant accounts are valued at quoted market price at year-end. Participant loans are valued at their outstanding balances, which approximate fair value.
Administrative Expenses. Fees and expenses of the Plan for legal, accounting and other administrative services may be paid out of Plan assets or, at Nabi Biopharmaceuticals’ discretion, directly by Nabi Biopharmaceuticals in whole or in part. Nabi Biopharmaceuticals has elected for the Plan to pay substantially all administrative fees incurred by the Plan during 2002.
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
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3. Investments
The fair values of individual investments that represent 5% or more of the Plan’s net assets at December 31, 2002 and December 31, 2001 are as follows:
| 2002 | 2001 | ||||||||
Smith Barney Corporate Trust Company: |
|||||||||
Gabelli Growth Fund |
$ | 2,021,018 | $ | 2,219,436 | |||||
Smith Barney Money Market — Government Portfolio |
1,475,467 | 1,022,519 | |||||||
Janus Twenty Fund |
1,093,680 | 783,926 | |||||||
T. Rowe Price Equity Income Fund |
1,031,788 | * | |||||||
Strong Government Securities Fund |
985,999 | 606,008 | |||||||
Skyline Special Equities Fund |
946,912 | 630,954 | |||||||
Dreyfus Founders Discovery Fund |
893,724 | 852,055 | |||||||
Nabi Biopharmaceuticals common stock |
665,635 | 583,749 | |||||||
Lazard International Equity Portfolio |
651,634 | 477,443 | |||||||
Neuberger Berman Focus Trust |
* | 1,027,547 | |||||||
Participant Loans |
* | 550,179 | |||||||
| * | Investment not greater than 5% |
The Plan’s investments, including investments bought, sold and held during the year, (depreciated) appreciated in fair value as follows:
| December 31, | ||||
| 2002 | ||||
Mutual funds |
$ | (2,741,340 | ) | |
US government securities |
51 | |||
Common stocks |
(312,028 | ) | ||
| $ | (3,053,317 | ) | ||
4. Plan Termination
Although it has not expressed any intent to do so, Nabi Biopharmaceuticals has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.
5. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated March 27, 2000, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. The Plan has been amended since receiving the determination letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax-exempt.
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6. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets per the financial statements to the Form 5500:
| December 31, | December 31, | |||||||
| 2002 | 2001 | |||||||
Net assets available for benefits per the financial statements |
$ | 12,019,595 | $ | 9,782,948 | ||||
Benefits approved but unpaid |
(12,906 | ) | (35,387 | ) | ||||
Net assets available for benefits per the Form 5500 |
$ | 12,006,689 | $ | 9,747,561 | ||||
The following is a reconciliation of the benefits paid per the financial statements to the Form 5500:
| Year ended | ||||
| December 31, | ||||
| 2002 | ||||
Participant withdrawals per the financial statements |
$ | 1,447,422 | ||
Benefit claim payable from December 31, 2001 Form 5500 |
(35,387 | ) | ||
Amounts allocated on Form 5500 to withdrawn
participants at December 31, 2002 |
12,906 | |||
Benefits paid per the Form 5500 |
$ | 1,424,941 | ||
Amounts allocated to withdrawn participants are recorded on the Form 5500 as benefits paid including benefits that have been processed and approved for payment prior to year-end but not yet paid.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan administrator has duly caused this annual report to be signed by the undersigned hereunto duly authorized.
| Nabi Savings & Retirement Plan | ||||
| By: | Nabi Biopharmaceuticals, Plan Administrator | |||
| Date: June 30, 2003 | By: | /s/ Mark Smith |
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| Mark L. Smith Senior Vice President, Finance, Chief Financial Officer, Chief Accounting Officer, and Treasurer |
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Nabi Savings and Retirement Plan
EIN: 59-1212264 Plan No.: 001
Schedule H, Line 4i—
Schedule of Assets (Held at End of Year)
December 31, 2002
| (b) | (c) | |||||||||||
| Identity of Issue, | Description of Investment, Including | (e) | ||||||||||
| Borrower, Lessor, or | Maturity Date, Rate of Interest, | Current | ||||||||||
| (a) | Similar Party | Collateral, Par, or Maturity Value | Value | |||||||||
* |
Smith Barney Corporate Trust | Gabelli Growth Fund | $ | 2,021,018 | ||||||||
| Smith Barney Money Market - Government Portfolio | 1,475,467 | |||||||||||
| Janus Twenty Fund | 1,093,680 | |||||||||||
| T. Rowe Price Equity Income Fund | 1,031,788 | |||||||||||
| Strong Government Securities Fund | 985,999 | |||||||||||
| Skyline Special Equities Fund | 946,912 | |||||||||||
| Dreyfus Founders Discovery Fund | 893,724 | |||||||||||
| Lazard International Equity Portfolio | 651,634 | |||||||||||
| ING GNMA Income Fund | 270,348 | |||||||||||
| Credit Suisse Emerging Markets Fund | 259,294 | |||||||||||
| Loomis Sayles Bond Fund | 182,887 | |||||||||||
| Credit Suisse Global Fixed Income Fund | 157,066 | |||||||||||
| Neuberger Berman Focus Trust | 6 | |||||||||||
* |
Nabi Biopharmaceuticals | Common Stock, par value $.10 per share | 665,635 | |||||||||
* |
Participant Loans | Interest rates between 5.25% - 10.50% | 414,605 | |||||||||
| $ | 11,050,063 | |||||||||||
| * | Represents a party in interest |
Note: Cost information has not been included in column (d) because all investments are participant-directed.
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INDEX TO EXHIBITS
| Exhibits | Page Number | |||||
| 23.1 | Consent of Ernst & Young LLP | 12 | ||||
| 99.1 | Statement under Section 906 of the Sarbanes-Oxley Act of 2002 | 13 | ||||
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Exhibit 23.1
Consent of Independent Certified Public Accountants
We consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-38868) pertaining to Nabi Savings & Retirement Plan of our report dated June 13, 2003, with respect to the financial statements and supplemental schedule of Nabi Savings & Retirement Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2002.
| /s/ Ernst & Young LLP |
Fort Lauderdale, Florida
June 25, 2003
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Exhibit 99.1
STATEMENT UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned plan administrator of Nabi Savings & Retirement Plan (the “Plan”) hereby certifies that, as of the date of this statement, the Plan’s annual report on Form 11-K for the year ended December 31, 2002 (the “Report”) fully complies with the requirements of section 15(d) of the Securities Exchange Act of 1934, as amended (the “Act”), and that, to the best of its knowledge, information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan as of and for the year ended December 31, 2002.
The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002. This statement is not “filed” for the purposes of Section 18 of the Act or otherwise subject to the liabilities of the Act or any other federal or state law or regulation.
| Date: June 30, 2003 | Nabi Biopharmaceuticals, plan administrator |
| By: /s/ Mark Smith Name: Mark L. Smith Title: Senior Vice President, Finance, Chief Financial Officer, Chief Accounting Officer, and Treasurer |
A signed original of this written statement required by Section 906 has been provided to the Plan and will be retained by the Plan and furnished to the Securities and Exchange Commission or its staff upon request.
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