SECURITIES 1AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORT OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 33-41313
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
Bairnco Corporation 401(k)
Savings Plan and Trust
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office:
Bairnco Corporation
300 Primera Boulevard, Suite 432
Lake Mary, Florida 32746
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Advisory Committee of
Bairnco Corporation 401(k) Savings Plan and Trust:
We have audited the accompanying statements of net assets available
for benefits of Bairnco Corporation 401(k) Savings Plan and Trust as
of December 31, 1999 and 1998, and the related statement of changes in
net assets available for benefits for the year ended December 31,
1999. These financial statements and the supplemental schedules
referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial
statements and supplemental schedules 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 net assets available for
benefits of the Plan as of December 31, 1999 and 1998, and the changes
in its net assets available for benefits for the year ended December
31, 1999, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules of reportable transactions, assets held for investment and
transactions with parties in interest are presented for purposes 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 supplemental 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/Arthur Andersen LLP
Orlando, Florida,
March 3, 2000
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
ASSETS
CASH $ 300,000 $ --
INVESTMENTS, at fair market value
(Notes 2 & 3)
Bairnco Corporation common stock fund 179,432 194,962
Mutual funds 8,698,207 5,131,997
Participant notes receivable 482,552 193,146
TOTAL INVESTMENTS 9,360,191 5,520,105
PARTICIPANTS' CONTRIBUTIONS RECEIVABLE 92,387 71,745
TOTAL ASSETS 9,752,578 5,591,850
NET ASSETS AVAILABLE FOR BENEFITS $ 9,752,578 $ 5,591,850
The accompanying notes are an integral part of these financial
statements.
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
1999
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year $ 5,591,850
ADDITIONS:
Participants' contributions (Note 1) 1,170,312
Interest and dividends 491,177
Net realized and unrealized appreciation on
investments (Note 2) 1,518,546
3,180,035
DEDUCTIONS:
Distributions 1,276,579
Administrative expenses 7,715
1,284,294
TRANSFER OF ASSETS FROM MERGED PLAN 2,264,987
NET INCREASE 4,160,728
NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 9,752,578
The accompanying notes are an integral part of this financial
statement.
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. PLAN DESCRIPTION:
The following description of the Bairnco Corporation 401(k)
Savings Plan and Trust (the "Plan") provides only general information.
Participants of the Plan should refer to the Plan document for a
complete description of the Plan's provisions. The Plan document is
available from Bairnco Corporation ("Bairnco" or the "Corporation") at
its offices in Lake Mary, Florida.
General
Bairnco established the Plan effective July 1, 1991. The Plan is
a defined contribution plan under which all full-time employees become
eligible for participation on the first day of the month following
completion of thirty days of service. Once an employee becomes
eligible for participation, salary deferrals (contributions) may
commence on any subsequent date. The Plan excludes non-resident
aliens, leased employees and independent contractors from
participating in the Plan. Union employees of the Corporation are
permitted to participate in the Plan. The Plan is subject to the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974
("ERISA").
Effective October 31, 1998, Bairnco purchased MII International,
Inc. ("MII"). On December 11, 1998, Bairnco's Board of Directors
elected to merge the MII 401(k) plan into the Plan effective
January 1, 1999, at which time the employees of MII began
participating in the Plan. In February 1999, the MII 401(k) plan
assets were transferred to the Plan, resulting in an increase of
investments by $2,264,987.
Contributions
Under the terms of the Plan, allowable contributions are outlined
as follows:
Participant Contributions - The participants may elect to
defer a minimum of 1 percent and a maximum of 20 percent of
compensation, as defined in the Plan, not to exceed $10,000
for 1999. The maximum dollar amount that may be deferred is
adjusted annually by the Internal Revenue Service. The amount
of the compensation which is deferred, plus any earnings or
losses on that amount, is not subject to federal income tax
until the funds are actually distributed to the participant by
the Plan. However, contributions are subject to FICA (Social
Security and Medicare Taxes).
Employer Contributions - The Corporation does not match
elective deferrals pursuant to the Plan.
Participant Accounts
Each participant's account is credited with the participant's
contribution and allocations of Plan earnings or losses, and charged
with an allocation of administrative expenses. Allocations are based
on participant account balances, as defined in the Plan. The benefit
to which a participant is entitled is the amount that can be provided
from the participant's vested account.
Vesting
A participant shall at all times have a 100 percent
nonforfeitable interest in the value of his/her account attributable
to all contributions made plus or minus investment earnings and losses
thereon and related administrative costs.
Transfers From Other Qualified Plans
Participants who have an interest in any other qualified employee
benefit plan (as described in Section 401(a) of the Internal Revenue
Code) may transfer the distributions from these plans directly into
the Plan at the discretion of the Administrative Committee (see Note
4).
Distributions
A participant who has attained age 59-1/2 may elect, by filing a
written application with the Administrative Committee, to withdraw any
amount up to 100 percent of the vested portion of his/her account, for
any reason. For participants who have not attained age 59-1/2, the
reasons for such withdrawals are restricted to those defined in the
Plan.
Upon termination of employment, a participant can elect to have
the balance in the participant's account distributed to the
participant in a single lump sum cash distribution or a partial
distribution, if requested in writing by the participant. As an
alternative, the participant may also elect to leave the related funds
in the Plan or transfer the related funds into another qualified plan.
Participant Notes Receivable
An active participant may borrow from his/her account a minimum
of $1,000 up to a maximum equal to the lesser of (1) a total of
$50,000 of borrowings within one year or (2) 50 percent of the
participant's account balance.
Loan transactions are treated as transfers between the investment
fund and the participant notes receivable account. Loan terms range
from 1-5 years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's
account and bear interest at the prime rate at the time of borrowing
plus 2 percent. During 1999, interest rates ranged from 9.75 percent
to 10.5 percent. Principal and interest are paid quarterly through
payroll deductions. As of December 31, 1999 and 1998, there were 84
and 61 loans outstanding, respectively.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that 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 the net assets available for benefits
during the reporting period. Actual results could differ from those
estimates.
Basis Of Accounting
For the year ended December 31, 1999, the accounting records of
the Plan and the Plan's assets were maintained by Schwab Retirement
Plan Services, Inc. ("Schwab"), a subsidiary of the Charles Schwab
Corporation. The participants' account balances are determined on the
cash basis of accounting; however, the Plan's financial statements
contained herein are presented on the accrual basis.
Investment Valuation and Income Recognition
Investments are stated at fair market value. Securities which
are traded on a national securities exchange are valued at the last
reported sales price on the last business day of the year. Any
unlisted securities are valued at the bid price next preceding the
close of business on the valuation date. Participant notes receivable
are valued at cost, which approximates fair market value.
Any unrealized appreciation/depreciation on investments
represents the difference between fair market value of investments at
the beginning of the Plan year or when acquired, whichever is later,
and the fair market value of investments at the end of the Plan year.
Interest income is recognized on the accrual basis of accounting.
Administrative Expenses
Certain administrative expenses of the Plan are paid directly by
Bairnco on behalf of the Plan. During the year ended December 31,
1999, Bairnco paid administrative expenses of approximately $22,400.
Benefit Payments
Benefits are recorded when paid.
New Accounting Pronouncement
The Accounting Standards Executive Committee issued Statement of
Position 99-3, "Accounting For and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters" (SOP 99-
3), which eliminates the requirement for a defined contribution plan
to disclose participant-directed investment options. SOP 99-3 was
adopted for the 1999 financial statements and, as such, the 1998
financial statements have been reclassified to eliminate the
participant-directed investment option disclosures.
3. INVESTMENTS:
There are currently eight investment options into which
participants may direct the investment of their accounts. These are
Invesco Strategic Technology Fund, Founders Growth Fund, Schwab 1000
Equity Fund, Strong Government Securities Fund, Schwab Retirement
Money Fund, Neuberger & Berman Partners Fund and Neuberger & Berman
Guardian Fund (collectively the "mutual funds"), and Bairnco
Corporation Common Stock Fund. Participants invest in units of
participation of the fund which represents an undivided interest in
the underlying assets of the fund. Participants may separately direct
the investment of future deferrals and existing account balances into
these eight investment options in increments of 5 percent.
Participants are permitted to modify their elections for future
deferrals and existing account balances between investment funds on a
daily basis.
Investments that represent 5 percent or more of the Plan's net assets
available for benefits, as of December 31, 1999 and 1998, are as
follows:
December 31,
1999 1998
Invesco Strategic Technology Fund $1,619,941 $ 476,615
Founders Growth Fund 1,950,554 844,891
Schwab 1000 Equity Fund 3,399,751 2,379,812
Strong Government Securities Fund 730,935 758,197
Schwab Retirement Money Fund 826,741 637,965
During 1999, the Plan's investments (including gains and losses on
investments bought, sold and held during the year) appreciated in
value $1,518,546, as follows:
Amount
Mutual Funds $1,544,469
Bairnco Corporation Common Stock Fund (25,923)
$1,518,546
4. TRUST AGREEMENT:
Schwab is the Plan's Trustee pursuant to the Plan document which is
signed by the Corporation and Plan Trustee. Schwab manages the Plan
assets and makes distributions to participants as directed by the
Administrative Committee of the Corporation (the "Plan
Administrator"). Expenses incurred by the Plan Trustee or the Plan
Administrator in the performance of their duties may be paid by the
Plan or the Corporation at the Corporation's discretion. During 1999,
all investment managers' fees were paid directly by the Plan.
5. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Corporation
reserves the right under the Plan to terminate the Plan, in whole or
in part, at any time. In the event of the Plan's termination, the
Plan assets will be distributed to the participants in lump sum
distributions or transferred to another qualified plan at the
direction of the participant.
6. TRANSACTIONS WITH PARTIES IN INTEREST:
Under ERISA, the Plan is required to report investment
transactions with and compensation paid to a "party in interest". The
term "party in interest" is broadly defined but includes Bairnco as
the Plan's sponsor, Schwab, as Plan Trustee, and any person or
corporation which renders services to the Plan. Certain fees for
legal and accounting services provided in connection with the Plan
were paid by the Plan sponsor on behalf of the Plan during these years
and are not included in the accompanying financial statements.
Additional fees paid by the Plan during 1999 for services rendered by
parties in interest were based on rates which the Plan's Administrator
believes were customary and reasonable.
7. INCOME TAX STATUS:
The Plan obtained its latest determination letter on April 29,
1997, in which the Internal Revenue Service stated that the Plan, as
then designed, was in compliance with the applicable requirements of
the Internal Revenue Code. The plan administrator and legal counsel
believe that the Plan is currently being operated in compliance with
the applicable requirements of the Internal Revenue Code.
8. SUPPLEMENTAL SCHEDULES:
Supplemental Schedule I lists the reportable transactions of the Plan
for the year ended December 31, 1999. Purchases and sales are made at
fair market value on the date of transaction.
Supplemental Schedule II lists the Plan assets held for investment as
of December 31, 1999.
Supplemental Schedule III lists transactions with parties in interest
of the Plan for the year ended December 31, 1999.
SCHEDULE I
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
Series of Transactions in excess
of 5 percent of the fair value Sales
of plan assets at the beginning Sales Sales Gain
of the year Purchases Cost Proceeds (Loss)
Invesco Strategic Technology Fund $ 656,092 $ 241,226 $ 318,299 $ 77,073
Founders Growth Fund 2,045,901 1,106,940 1,189,156 82,216
Schwab 1000 Equity Fund 1,554,323 842,662 1,100,007 257,345
Strong Government Securities Fund 374,849 358,821 354,485 (4,336)
Schwab Retirement Money Fund 1,120,240 931,464 931,464 --
Neuberger & Berman Guardian Fund 239,401 116,212 115,356 (856)
Participant Notes Receivable 399,098 109,692 109,692 --
Individual Transactions in excess
of 5 percent of the fair value
of plan assets at the beginning
of the year
Founders Growth Fund $1,089,174 $ 344,258 $ 381,956 $ 37,698
Schwab 1000 Equity Fund 708,012 233,313 254,883 21,570
Schwab Retirement Money Fund 639,820 300,000 300,000 --
The preceding notes are an integral part of this schedule.
SCHEDULE II
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
SCHEDULE OF ASSETS HELD FOR INVESTMENT
AS OF DECEMBER 31, 1999
Fair Market
Description Value (Note 2) Cost
Bairnco Corporation Common Stock Fund:
Schwab Money Market Fund $ 764 $ 764
Bairnco Corporation Common Stock 178,668 192,439
Total Bairnco Corporation
Common Stock Fund 179,432 193,203
Mutual Funds:
Invesco Strategic Technology Fund 1,619,941 833,908
Founders Growth Fund 1,950,554 1,699,924
Schwab 1000 Equity Fund 3,399,751 2,232,997
Strong Government Securities Fund 730,935 757,985
Schwab Retirement Money Fund 826,741 826,741
Neuberger & Berman Partners Fund 61,778 69,167
Neuberger & Berman Guardian Fund 108,507 130,681
Total Mutual Funds 8,698,207 6,551,403
Other Investments:
Participant Notes Receivable 482,552 482,552
Total $9,360,191 $7,227,158
The preceding notes are an integral part of this schedule.
SCHEDULE III
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
SCHEDULE OF TRANSACTIONS WITH PARTIES IN INTEREST
FOR THE YEAR ENDED DECEMBER 31, 1999
Description Amount
Sold 10,438.924 units of Bairnco Corporation Common
Stock between $2.435 and $7.50 per unit $ 71,714
Purchased 13,051.924 units of Bairnco Corporation Common
Stock between $5.0599 and $7.9239 per unit $ 82,755
The preceding notes are an integral part of this schedule.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
BAIRNCO CORPORATION 401(K)
SAVINGS PLAN AND TRUST
(Name of Plan)
Date: March 10, 2000 By: /s/ JAMES W. LAMBERT
JAMES W. LAMBERT
Administrative Committee Member