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, 1997
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, 1997 and 1996, and the related statement of changes in
net assets available for benefits for the year ended December 31,
1997. 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, 1997 and 1996, and the changes in its net assets
available for benefits for the year ended December 31, 1997, 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, 1998
Arthur Andersen LLP
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997 AND 1996
1997 1996
ASSETS
INVESTMENTS, at fair market value (Notes 2 & 3)
Bairnco common stock $ 277,830 $ 181,378
Mutual funds 3,873,674 2,805,520
Participant notes receivable 108,523 42,633
TOTAL INVESTMENTS 4,260,027 3,029,531
RECEIVABLES
Participants' contributions 69,647 67,678
Accrued investment income 1,396 1,289
TOTAL RECEIVABLES 71,043 68,967
TOTAL ASSETS 4,331,070 3,098,498
NET ASSETS AVAILABLE FOR BENEFITS $4,331,070 $3,098,498
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, 1997
(Note 6)
1997
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year $3,098,498
ADDITIONS:
Participants' contributions 1,172,323
Interest and dividends 216,775
Net realized and unrealized appreciation on
investments (Note 2) 505,548
1,894,646
DEDUCTIONS:
Distributions 659,088
Administrative expenses 2,986
662,074
NET INCREASE 1,232,572
NET ASSETS AVAILABLE FOR BENEFITS, end of year $4,331,070
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, 1997 and 1996
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 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:
Participant 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 for 1997. 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 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 1997, interest
rates ranged from 10.25% to 10.5%. Principal and interest are paid
quarterly through payroll deductions. As of December 31, 1997, there were
43 loans outstanding.
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 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, 1997, 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;
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, 1997, Bairnco paid
administrative expenses of approximately $15,205.
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 Fund, 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.
All the investments represent 5% or more of the net assets available
for benefits (see Note 6).
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 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 1997, 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 available
for benefits of the investment funds for the year ended December 31, 1997:
Invesco Schwab Strong Schwab Bairnco
Strategic Founders 1000 Government Retirement Common Participant
Technology Growth Equity Securities Money Stock Notes Other
Fund Fund Fund Fund Fund Fund Receivable Receivable Total
Net assets
available
for benefits,
01-01-97 $142,077 172,271 1,391,710 474,789 624,673 181,378 42,633 68,967 3,098,498
Additions:
Participant
contributions 202,107 340,361 278,904 128,233 97,466 48,485 5,831 70,936 1,172,323
Interest and
dividends 61,294 76,126 18,688 28,289 26,138 6,133 -- 107 216,775
Net
realized and
unrealized
appreciation
(depreciation)
on investments (44,641) 8,435 438,062 13,751 -- 89,941 -- -- 505,548
Loan repayments 1,094 1,458 2,418 447 173 241 (5,831) -- --
Transfers from
other funds 38,885 63,160 87,815 49,752 33,120 25,676 -- -- 298,408
258,739 489,540 825,887 220,472 156,897 170,476 -- 71,043 2,193,054
Deductions:
Distributions (55,939) (76,835) (221,550) (82,419) (109,615) (37,314) (6,449) (68,967) (659,088)
Loans (13,472) (11,624) (42,294) (10,067) (9,150) (6,187) 92,794 -- --
Administrative
expenses (351) (456) (1,280) (376) (381) (142) -- -- (2,986)
Transfers to
other funds (19,036) (20,975) (45,303) (36,905) (125,353) (30,381) (20,455) -- (298,408)
(88,798) (109,890) (310,427) (129,767) (244,499) (74,024) 65,890 (68,967) (960,482)
Net assets
available
for benefits,
12-31-97 $312,018 551,921 1,907,170 565,494 537,071 277,830 108,523 71,043 4,331,070
7. 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 Corporation 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
1997 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 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.
9. SUPPLEMENTAL SCHEDULES:
Supplemental Schedule I lists the reportable transactions of the Plan
for the year ended December 31, 1997. Purchases and sales are made at
fair market value on the date of transaction.
Supplemental Schedule II lists the Plan assets held for investment at
December 31, 1997.
Supplemental Schedule III lists transactions with parties in interest
of the Plan for the year ended December 31, 1997.
SCHEDULE I
BAIRNCO CORPORATION
401(k) SAVINGS PLAN AND TRUST
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
Sales
Sales Sales Net Gain
Description of Transaction Purchases Cost Proceeds (Loss)
Purchases:
Founders Growth Fund $ 479,647
Invesco Strategic Technology Fund 302,286
Schwab Retirement Money Fund 156,724
Schwab 1000 Equity Fund 385,407
Strong Government Securities Fund 206,274
Sales:
Founders Growth Fund $ 95,468 $108,432 $12,964
Invesco Strategic Technology Fund 86,306 87,704 1,398
Schwab Retirement Money Fund 244,691 244,326 (365)
Schwab 1000 Equity Fund 250,400 308,009 57,609
Strong Government Securities Fund 126,563 129,320 2,757
Total All Funds $1,530,338 $803,428 $877,791 $74,363
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, 1997
Fair Market
Description Value (Note 2) Cost
Cash Equivalents
Schwab Money Market Fund $ 335 $ 326
Common Stocks
Bairnco Corporation 277,495 172,105
Total Bairnco Common Stock Fund $ 277,830 $ 172,431
Mutual Funds
Invesco Strategic Technology Fund $ 312,018 $ 371,255
Founders Growth Fund 551,921 563,904
Schwab 1000 Equity Fund 1,907,170 1,399,708
Strong Government Securities Fund 565,494 541,725
Schwab Retirement Money Fund 537,071 536,706
Total Mutual Funds $3,873,674 $3,413,298
Other Investments
Participant Notes Receivable $ 108,523 $ 108,523
Total $4,260,027 $3,694,252
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, 1997
Description Amount
Sold 9,222 shares of Bairnco Corporation Common
Stock between $6.875 and $10.8125 per share $73,991
Purchased 9,866 shares of Bairnco Corporation Common
Stock between $7.125 and $10.4375 per share $80,294
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, 1998 By: /s/ J. ROBERT WILKINSON
J. ROBERT WILKINSON
Administrative Committee Member