SECURITIES AND 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, 1996
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
2251 Lucien Way
Maitland, Florida 32751
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, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and 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 Bairnco
Corporation 401(k) Savings Plan and Trust as of December 31, 1996 and 1995,
and the changes in net assets available for benefits for the year ended
December 31, 1996 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 complying with the
Department of Labor Rules and Regulations for reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 and are not a required
part of the basic financial statements. Such 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.
Orlando, Florida
February 13, 1997
Arthur Andersen LLP
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996 AND 1995
1996 1995
ASSETS
INVESTMENTS, at fair market value (Notes 2 & 3)
Bairnco common stock fund $ 181,378 $ 154,559
Mutual funds 2,805,520 2,161,181
Participant notes receivable 42,633 12,744
TOTAL INVESTMENTS 3,029,531 2,328,484
RECEIVABLES
Participants' contributions 67,678 46,494
Accrued investment income 1,289 6,865
TOTAL RECEIVABLES 68,967 53,359
TOTAL ASSETS 3,098,498 2,381,843
NET ASSETS AVAILABLE FOR BENEFITS $ 3,098,498 $ 2,381,843
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, 1996
(Note 6)
1996
NET ASSETS AVAILABLE FOR BENEFITS,
beginning of year $ 2,381,843
ADDITIONS:
Participants' contributions 797,786
Interest and dividends 116,976
Net realized and unrealized appreciation
on investments (Note 2) 226,560
1,141,322
DEDUCTIONS:
Distributions 424,267
Administrative expenses 400
424,667
NET INCREASE 716,655
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $ 3,098,498
The accompanying notes are an integral part of these financial statements.
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 and 1995
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 Maitland, 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).
Contributions
Under the terms of the Plan, allowable contributions are outlined as follows:
Employee Contributions - The participants may elect to defer a minimum of 1%
and a maximum of 20% of compensation, as defined in the Plan, not to exceed
$9,500 and $9,240 for 1996 and 1995, respectively. 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, and charged with an allocation of
administrative expenses. Allocations are based on participant earnings or
account balances, as defined. 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% 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%. During 1996, interest rates
ranged from 9.5% to 10.5%. Principal and interest are paid quarterly through
payroll deductions. As of December 31, 1996, there were 14 loans
outstanding.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Reclassifications-
Certain reclassifications were made to prior year balances in order to
conform to the current year presentation.
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 and deductions from the net assets
available for plan benefits during the reporting period. Actual results
could differ from those estimates.
Basis Of Accounting-
Through June 30, 1996, the accounting records of the Plan and the Plan's
assets were maintained by SunTrust Banks of Florida, Inc. ("SunTrust").
Effective July 1, 1996, the accounting records of the Plan and the Plan's
assets were transferred from SunTrust to Schwab Retirement Plan Services, Inc.
("Schwab") a subsidiary of the Charles Schwab Corporation. The participants'
account balances are determined on the cash basis; however, the Plan's
financial statements contained herein are presented on an 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
value.
Any unrealized appreciation/depreciation on investments represents the
difference between fair value of investments at the beginning of the Plan
year or when acquired, whichever is later, and the fair value of investments
at the end of the Plan year.
Interest income is recognized on the accrual basis.
Administrative Expenses-
Administrative expenses of the Plan are paid directly by Bairnco on behalf of
the Plan. During the year ended December 31, 1996, Bairnco paid
administrative expenses of approximately $11,500.
Benefit Payments-
Benefits are recorded when paid.
3. INVESTMENTS:
There are currently six investment options into which participants may direct
the investment of their accounts. These are the Invesco Strategic Technology
Fund, Founders Growth Funds, Schwab 1000 Equity Fund, Strong Government
Securities Fund and the Schwab Retirement Money Fund (collectively the
"mutual funds"), and the Bairnco Corporation Common Stock Fund ("Bairnco
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 six investment options in increments
of 5%. Participants are permitted to modify their elections for future
deferrals and existing account balances between investment funds on a daily
basis.
Except for the Invesco Strategic Technology Fund, all the investments
represent 5% or more of the net assets available for benefits (see Note 6).
4. TRUST AGREEMENT:
From the Plan's inception through June 30, 1996, SunTrust acted as the Plan
Trustee. Effective July 1, 1996, Schwab became 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 Plan Administrator. The Administrative Committee of the
Corporation is 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 1996 and
1995, 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. CHANGES IN NET ASSETS BY INVESTMENT FUND:
The following schedule presents changes in the net assets of the investment
funds for the year ended December 31, 1996:
STI Classic STI Classic STI Classic Bairnco
Capital Investment Prime Common Participants
Growth Grade Bond Quality Stock Notes Other
Fund Fund MM Fund Fund Receivable Receivables Total
Net Assets available for
Plan Benefits, 01-01-96 $ 1,120,700 $ 409,483 $ 630,998 $154,559 $12,744 $ 53,359 $ 2,381,843
Additions:
Participants'
contributions 160,825 60,903 102,512 20,453 -- (46,494) 298,199
Interest and dividends 5,257 11,789 15,626 2,506 -- (6,865) 28,313
Net realized and
unrealized appreciation
(depreciation)on
investments 113,089 (24,339) -- 39,867 -- -- 128,617
Loan repayments 955 594 236 75 (1,860) -- --
Transfers from other
funds 17,158 5,097 662 -- -- 2,388,301 2,411,218
297,284 54,044 119,036 62,901 (1,860) 2,334,942 2,866,347
Deductions:
Distributions (108,765) (46,029) (78,412) (16,148) (3,135) -- (252,489)
Loans (1,051) (477) (472) -- 2,000 -- --
Transfers to other funds (1,308,168) (417,021) (671,150) (14,879) -- -- (2,411,218)
(1,417,984) (463,527) (750,034) (31,027) (1,135) -- (2,663,707)
Net Assets available for
Plan Benefits, 06-20-96 $ -- $ -- $ -- $186,433 $ 9,749 $2,388,301 $ 2,584,483
Invesco Strong Schwab Bairnco
Strategic Founders Schwab Government Retirement Common Participants
Technology Growth 1000 Securities Money Stock Notes Other
Fund Fund Fund Fund Fund Fund Receivable Receivable Total
Transfers (from)
to other funds $ -- $ -- $1,308,168 $415,615 $ 664,518 $ -- $ -- $(2,388,301) $ --
Net Assets
available for
Plan Benefits,
06-21-96 -- -- 1,308,168 415,615 664,518 186,433 9,749 -- 2,584,483
Additions:
Participants
contributions 78,359 119,235 107,664 60,671 45,670 20,310 -- 67,678 499,587
Interest and
dividends 18,850 13,445 18,271 15,815 18,369 2,624 -- 1,289 88,663
Net realized
and unrealized
apprec (deprec)
on investments (13,525) (7,295) 124,716 13,686 -- (19,639) -- -- 97,943
Loan repayments 712 504 462 78 416 168 (2,340) -- --
Transfers from
other funds 58,827 48,420 -- -- -- 1,050 -- -- 108,297
143,223 174,309 251,113 90,250 64,455 4,513 (2,340) 68,967 794,490
Deductions:
Distributions (583) (1,487) (97,003) (17,722) (47,894) (7,089) -- -- (171,778)
Loans (555) (534) (24,190) (3,142) (5,722) (1,081) 35,224 -- --
Admin expenses (8) (17) (280) (18) (66) (11) -- -- (400)
Transfers to
other funds -- -- (46,098) (10,194) (50,618) (1,387) -- -- (108,297)
(1,146) (2,038) (167,571) (31,076) (104,300) (9,568) 35,224 -- (280,475)
Net Assets
available for
Plan Benefits,
12-31-96 $142,077 $172,271 $1,391,710 $474,789 $ 624,673 $181,378 $42,633 $ 68,967 $3,098,498
7. TRANSACTIONS WITH PARTIES IN INTEREST:
Under Department of Labor Rules and Regulations for Reporting and Disclosure,
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 Corporation as the Plan's sponsor, SunTrust and
Schwab, as Plan Trustees, and any person or corporation which renders
services to the Plan. Certain 1996 and 1995 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. Additional fees paid by the Plan
during 1996 and 1995 for services rendered by parties in interest were based
on rates which the Plan's Administrator believes were customary and
reasonable.
8. INCOME TAX STATUS:
The Plan obtained its latest determination letter on March 5, 1996, 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.
Effective July 1, 1996, as a result of the transfer from SunTrust to Schwab,
a revised Plan document was filed with the Internal Revenue Serivce. The
plan administrator and legal counsel believe that the Plan is designed and
currently being operated in compliance with the applicable requirements of
the Internal Revenue Code.
9. SUPPLEMENTAL SCHEDULES:
Supplemental Schedule I lists the reportable transactions of the Plan for the
year ended December 31, 1996. Purchases and sales are made at market value
on the date of transaction.
Supplemental Schedule II lists the Plan assets held for investment at December
31, 1996.
Supplemental Schedule III lists transactions with parties in interest of the
Plan for the year ended December 31, 1996.
SCHEDULE I
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
Sales Sales Sales
Description of Transaction Purchases Cost Proceeds Net Gain
Purchases:
STI Classic Prime Quality
Money Market Fund, Class A
Trust Shares $ 128,652
STI Classic Capital Growth
Fund 199,773
STI Classic Investment Grade
Bond Fund 84,799
Founders Growth Fund 190,992
Invesco Strategic Technology
Fund 162,410
Schwab Money Market Fund 2,436,833
Schwab Retirement Money Fund 743,117
Schwab 1000 Equity Fund 1,474,332
Strong Government Securities 515,755
Sales:
STI Classic Prime Quality
Money Market Fund, Class A
Trust Shares $ 759,650 $ 759,650 $ --
STI Classic Capital Growth
Fund 1,212,280 1,433,562 221,282
STI Classic Investment Grade
Bond Fund 465,535 469,943 4,408
Founders Growth Fund 11,092 11,426 334
Invesco Strategic Technology
Fund 6,600 6,809 209
Schwab Money Market Fund 2,435,821 2,435,821 --
Schwab Retirement Money Fund 118,442 118,442 --
Schwab 1000 Equity Fund 199,956 207,338 7,382
Strong Government Securities 53,541 54,652 1,111
Total All Funds $5,936,663 $5,262,917 $5,497,643 $234,726
The accompanying 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, 1996
Fair Value
Description (Note 2) Cost
Cash Equivalents
Schwab Money Market Fund $ 1,012 $ 1,012
Common Stocks
Bairnco Corporation 180,366 196,459
Total Bairnco Common Stock Fund $ 181,378 $ 197,471
Mutual Funds
Invesco Strategic Technology Fund $ 142,077 $ 155,275
Founders Growth Fund 172,271 179,725
Schwab 1000 Equity Fund 1,391,710 1,264,701
Strong Government Securities Fund 474,789 462,014
Schwab Retirement Money Fund 624,673 624,673
Total Mutual Funds $2,805,520 $2,686,388
Other Investments
Participant Notes Receivable $ 42,633 $ 42,633
Total $3,029,531 $2,926,492
The accompanying 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, 1996
Description Amount
Sold 6,411 shares of Bairnco Corporation Common
Stock between $6.125 and $7.625 per share $42,279
Purchased 7,910 shares of Bairnco Corporation Common
Stock between $6.125 and $7.375 per share $52,614
The accompanying 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: February 13, 1997 By: /s/ J. ROBERT WILKINSON
J. ROBERT WILKINSON
Administrative Committee Member