SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
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, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ---to---
Commission File Number 1-14416
A. Full title of the plan and address of the plan, if different from
that of the issuer named below:
FAHNESTOCK & CO.,INC. 401(k) PLAN
110 Wall Street
New York, New York 10005
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FAHNESTOCK VINER HOLDINGS INC.
P.O. Box 2015, Suite 1110
20 Eglinton Avenue West
Toronto, Ontario, Canada M4R 1K8
REQUIRED INFORMATION
ITEM 1. Not Applicable
ITEM 2. Not applicable
ITEM 3. Not applicable
ITEM 4. Financial Statements and Supplemental Information
FAHNESTOCK & CO.,INC. 401(k) PLAN
FINANCIAL STATEMENTS and SCHEDULES
INDEX
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 1996 and 1995 with Fund Information
as of December 31, 1996
Statement of Changes in Net Assets Available for
Benefits with Fund Information for the Year Ended
December 31, 1996
Notes to Financial Statements
Supplemental Schedules:
Schedule I - Item 27a - Schedule of Assets Held
for Investment as of December 31, 1996
Schedule II - Item 27d - Schedule of Reportable
Transactions as of December 31, 1996
REPORT of INDEPENDENT ACCOUNTANTS
To the Trustees of the Fahnestock & Co.,Inc.
401(k) Plan:
We have audited the accompanying statements of net assets
available for benefits, (with fund information as of December
31, 1996), of FAHNESTOCK & CO.,INC. 401(k) PLAN (the "Plan")
as of December 31, 1996 and 1995, and the related statement
of changes in net assets available for benefits, with fund
information, for the year ended December 31, 1996. 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 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, 1996 and
1995, and the changes in its net assets available for benefits
for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules as listed on the accompanying index 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 Fund
Information in the statement of net assets available for
benefits and the statement of changes in net assets available
for benefits is presented for purposes of additional analysis
rather than to present the net assets available for benefits
and changes in net assets available for benefits of each fund.
The supplemental schedules and Fund Information 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.
COOPERS & LYBRAND L.L.P.
New York, New York
June 3, 1997.
FAHNESTOCK & CO.,INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996 AND 1995
Page 1 of 3
Fund Information
Money Vanguard
Equity Bond Market Index
Fund Fund Fund Trust Fund
ASSETS:
Investments,
at fair value - $2,057,687 $7,421,528 $4,669,063
Contributions
receivable from
Fahnestock & Co.Inc. - - - -
Loans receivable
from participants - - - -
Accrued income
receivable - 36,910 - -
Net assets available
for benefits - $2,094,597 $7,421,528 $4,669,063
FAHNESTOCK & CO.,INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION - CONTINUED
DECEMBER 31, 1996 AND 1995
Page 2 of 3
Fund Information
AIM Value MFS Emerging Templeton
Fund Growth Fund World Fund
ASSETS:
Investments,
at fair value $4,920,268 $6,086,516 $2,146,589
Contributions
receivable from
Fahnestock & Co.
Inc. - - -
Loans receivable
from participants - - -
Accrued income
receivable - - -
Net assets available
for benefits $4,920,268 $6,086,516 $2,146,589
FAHNESTOCK & CO.,INC 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION - CONTINUED
DECEMBER 31, 1996 AND 1995
Page 3 of 3
Fund Information
Fahnestock
Viner
Holdings
Inc. Certif-
Common icate of Loans to
Stock Deposit Partic- Total Total
Fund Fund ipants 1996 1995
ASSETS:
Investments,
at fair value $7,664,700 $580,054 - $35,546,405 $26,963,648
Contributions
receivable from
Fahnestock & Co.
Inc. 22,372 - - 22,372 80,705
Loans receivable
from participants - - $732,748 732,748 492,985
Accrued income
receivable - - - 36,910 43,289
Net assets available
for benefits $7,687,072 $580,054 $732,748 $36,338,435 $27,580,627
The accompanying notes are an integral part of these financial statements.
FAHNESTOCK & CO.,INC. 401(k) PLAN
STATEMENT of CHANGES in NET ASSETS AVAILABLE for BENEFITS,
WITH FUND INFORMATION
For the year ended December 31, 1996
Page 1 of 3
Fund Information
Money Vanguard
Equity Bond Market Index
Fund Fund Fund Trust Fund
Additions to net assets attributed to:
Investment income:
Net realized and
unrealized gains
(losses) on
investments $ 5,323 $(68,917) - $711,719
Interest 75,829 123,299 193,063 -
Dividends 90,235 - - 80,565
Net investment income 171,387 54,382 193,063 792,284
Contributions:
Participants 1,084,937 213,845 510,206 599,201
Employer - - 1,900,000 -
Total contributions 1,084,937 213,845 2,410,206 599,201
Total additions 1,256,324 268,227 2,603,269 1,391,485
Deductions from net assets attributed to:
Benefits paid to
participants (406,130) (145,719) (934,925) (139,096)
Net increase (decrease)
prior to interfund
transfers 850,194 122,508 1,668,344 1,252,389
Interfund transfers (15,220,725) (291,864) 1,957,535 1,124,193
Net increase (decrease) (14,370,531) (169,356) 3,625,879 2,376,582
Net assets available for benefits:
Beginning of year 14,370,531 2,263,953 3,795,649 2,292,481
End of year $ - $2,094,597 $7,421,528 $4,669,063
FAHNESTOCK & CO.,INC. 401(k) PLAN
STATEMENT OF CHANGES in NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION - CONTINUED
For the year ended December 31, 1996
Page 2 of 3
Fund Information
AIM Value MFS Emerging Templeton
Fund Growth Fund World Fund
Additions to net assets attributed to:
Investment income:
Net realized and
unrealized gains
(losses) on
investments $472,749 $473,245 $201,607
Interest - - -
Dividends 65,460 36,392 48,031
Net investment income 538,209 509,637 249,638
Contributions:
Participants 212,601 313,357 100,695
Employer - - -
Total contibutions 212,601 313,357 100,695
Total additions 750,810 822,994 350,333
Deductions from net assets attributed to:
Benefits paid to
participants (79,742) (69,270) (61,494)
Net increase (decrease)
prior to interfund
transfers 671,068 753,724 288,839
Interfund transfers 4,249,200 5,332,792 1,857,750
Net increase (decrease) 4,920,268 6,086,516 2,146,589
Net assets available for benefits:
Beginning of year - - -
End of year $4,920,268 $6,086,516 $2,146,589
FAHNESTOCK & CO.,INC. 401(k) PLAN
STATEMENT of CHANGES in NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION - CONTINUED
For the year ended December 31, 1996
Page 3 of 3
Fund Information
Fahnestock
Viner
Holdings Certif- Loans
Inc. icate of to
Common Deposit Parti- Total
Stock Fund Fund cipants 1996
Additions to net assets attributed to:
Investment income:
Net realized and
unrealized gains
(losses) on
investments $2,924,250 - - $4,719,976
Interest - $36,131 $41,381 469,703
Dividends 185,010 - - 505,693
Net investment income 3,109,260 36,131 41,381 5,695,372
Contributions:
Participants - - - 3,034,842
Employer 22,372 - - 1,922,372
Total contributions 22,372 - - 4,957,214
Total additions 3,131,632 36,131 41,381 10,652,586
Deductions from net assets attributed to:
Benefits paid to participants - - (58,402) (1,894,778)
Net increase (decrease)
prior to interfund
transfers 3,131,632 36,131 (17,021) 8,757,808
Interfund transfers 734,335 - 256,784 -
Net increase (decrease) 3,865,967 36,131 239,763 8,757,808
Net assets available for benefits:
Beginning of year 3,821,105 543,923 492,985 27,580,627
End of year $7,687,072 $580,054 $732,748 $36,338,435
The accompanying notes are an integral part of these financial statements.
FAHNESTOCK & CO.,INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan:
The following description of the Fahnestock & Co.,Inc. 401(k)
Plan (the "Plan") provides only general information. Participants
should refer to the plan agreement for a more complete
description of the Plan's provisions.
General:
The Plan was established on January 1, 1987 and was amended and
restated to add a profit-sharing provision effective January 1,
1991. The Plan was subsequently amended effective January 1,
1996 to change the rates used in computing the discretionary
profit sharing contribution from Fahnestock & Co. Inc. (the
"Company"). Employees of the Company who are 21 and have
completed one year of service shall be eligible to receive an
allocation of the discretionary profit sharing contribution.
Employees of the Company who are 21 and have completed six
months of service shall be eligible to make elective deferrals
into the Plan.
Allocation provisions:
Under the terms of the Plan, the individual makes all investment
decisions with respect to his/her account balance, subject to
available investment alternatives. These include:
Bond Fund - Funds are invested in government and high quality corporate
securities.
Money Market Fund - Funds are invested in the Fahnestock Prime Cash Series
Fund.
Vanguard Index Trust Fund - Funds are invested in shares of a registered
investment company that invests in large capitalization stocks that mirrors
the performance of the Standard and Poors 500 Index.
AIM Value Fund - Funds are invested in shares of a registered investment
company that seeks long term growth by investing in under valued securities.
MFS Emerging Growth Fund - Funds are invested in shares of a registered
investment company that seeks long term growth by investing primarily in
stocks of small and emerging companies.
Templeton World Fund - Funds are invested in shares of a registered
investment company that seeks long term growth by investing in companies
throughout the world.
Certificate of Deposit Fund - Funds are invested in certificates of deposits
and the Fahnestock Prime Cash Series Fund.
Fahnestock Viner Holdings Inc. Common Stock Fund - Funds are invested in
the common stock of the Company's parent, Fahnestock Viner
Holdings Inc.
The Equity Fund was closed on July 31, 1996, and all the assets in this fund
were subsequently transferred to other funds based upon each participant's
election.
Company Contributions:
As discussed above, the Company may contribute to the Plan a
discretionary profit-sharing amount (the "Employer Regular
Contribution"). The Employer Regular Contribution is determined
by its Board of Directors and is subject to guidelines set forth
in the Plan description.
Employer Regular Contributions for the year ending December 31,
1996 were determined as follows:
3.2% of the first $30,000 of a participant's compensation;
5.7% of the next $10,000 of a participant's compensation;
7.9% of the next $25,000 of a participant's compensation;
7.5% of the next $35,000 of a participant's compensation;
1.2% of the next $50,000 of a participant's compensation; and
0% above $150,000 of a participant's compensation.
Should participants elect to receive their Employer Regular
Contribution in the form of common stock of Holdings, the
Company may make an additional contribution of Holdings common
stock equal in market value to 15 percent of the purchase price
of the common stock ("the Employer Stock Contribution"). For
the year ended December 31, 1996 approximately $153,000 was
contributed by the Company under this provision.
Employees may make salary deferral contributions of up to 14% of
compensation. Current law limits participant deferrals to
$9,500 for the plan year ended December 31, 1996.
Vesting:
All participants are immediately and fully vested in all
Employee Elective Deferrals and the income derived from the
investment of such contributions.
Participants will be vested in Employer Regular Contributions
plus the income thereon upon the completion of service with the
Company or an affiliate at the following rate:
Less than 3 years of service 0%
After 3 years of service 20%
After 4 years of service 40%
After 5 years of service 60%
After 6 years of service 80%
After 7 years of service 100%
All years of service with the Company or an affiliate are
counted to determine a participant's nonforfeitable percentage
except years of service before the Plan was restated in 1991.
Participants will be 100 percent vested in Employer Stock
Contributions only upon completion of 5 years service.
At December 31, 1996, forfeited nonvested accounts totaled
approximately $360,000. These accounts will be used to reduce
future employer contributions. The 1996 employer contributions
included approximately $330,000 from forfeited nonvested accounts.
Company Qualified Matching and Qualified Non-Elective Contributions as
defined in the Plan document, if required, are vested when made. No
payment was required during the year ended December 31, 1996.
Notwithstanding the vesting schedules specified above, with
respect to retirement, a Participant's right to his or her
accounts will be nonforfeitable upon the attainment of: the
later of age 65 or the fifth anniversary of the participation
commencement date; death; or disability, as defined.
Payment of Benefits:
Payment of vested benefits under the Plan will be made in the
event of a participant's termination of employment, death,
retirement, or financial hardship and may be paid in either a
lump-sum distribution or over a certain period of time as
determined by IRS rules or by participant election.
Loans to Participants:
Loans are made available to all participants. Loans must be
adequately collateralized using not more than fifty percent of
the participant's vested account balance and bear a fixed interest
rate of 8%. Loan and interest payments are applied to fund
balances from which proceeds were drawn unless otherwise
specified by the participant.
Income Tax Status:
The Plan received a determination letter on August 2, 1994 from
the Internal Revenue Service (IRS) qualifying the Plan under the
IRS code as exempt from Federal income taxes. The Plan has been
amended since receiving the determination letter. However, the
Plan administrator believes that the Plan continues to be designed
and operated in compliance with the applicable requirements of the
Internal Revenue Code.
2. Significant Accounting Policies:
Securities transactions are recorded on a trade date basis with
gains and losses reflected in income. Interest and dividend income
are recorded on the accrual basis.
Investments are stated at fair value, based on quoted market prices
for valuation of common stock, debt obligations, and mutual funds. Assets
held in money market accounts are valued at cost which approximates
fair value.
Benefits are recorded when paid.
Interfund transfers include loan repayments and dividends from
Fahnestock Viner Holdings Inc. common stock.
The Plan presents in the statement of changes in net assets
available for benefits the net appreciation (depreciation) in
the fair value of its investments which consists of the realized
gains or losses and the unrealized appreciation (depreciation)
on those investments.
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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.
The Plan provides for various investment options in any
combination of stocks, bonds, fixed income securities,
mutual funds, and other investment securities. Investment
securities are subject to interest rate, market and credit risks.
Due to the level of risk associated with certain investment securities
and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes
in the near term would materially affect participants' account
balances and the amounts reported in the statement of net assets
avaiable for plan benefits and the statement of changes in net assets
available for plan benefits.
3. Related Parties:
The Company acts as investment advisor, administrator and
custodian of the Plan assets in the Equity Fund, the Bond Fund, the
Money Market Fund, the Certificate of Deposit Fund and the Fahnestock
Viner Holdings Inc. Common Stock Fund, executes the Plan's transactions,
and provides accounting and other administrative services for
which no charge is made to the Plan. The Trustees of the Plan
are also officers and directors of the Company.
4. Reich & Co. Merger:
Effective January 5, 1995, the assets of Reich & Co. 401(k) plan,
approximately $685,000, were transferred into the Plan. Reich & Co.,
a wholly-owned subsidiary of the Company, was acquired by the
Company on December 31, 1993. The Reich & Co. 401(k) plan was
terminated upon transfer of its assets to the Plan.
5. Concentration of Investments:
The following are investments that represent 5% or more of net
assets available for plan benefits as of December 31, 1996:
Percent of
Net Assets
Avaiable for
Investment Market Value Plan Benefits
Fahnestock Prime Cash Series
(Money Market Fund $7,421,528,
Bond Fund $70,044, Certificate
of Deposit Fund $55,054) $7,546,626 20.77%
Fahnestock Viner Holdings Inc.
- -Common Stock Fund 7,664,700 21.09%
Vanguard Index Trust Fund 4,669,063 12.85%
AIM Value Fund 4,920,268 13.54%
MFS Emerging Growth Fund 6,086,516 16.75%
Templeton World Fund 2,146,589 5.91%
6. 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 the Employee
Retirement Income Security Act of 1974 ("ERISA"). In the event of
Plan termination, participants will become 100 percent vested in
their contributions.
SCHEDULE 1
FAHNESTOCK & CO.,INC. 401(k) PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
Shares, Fair or
Units, or Stated
Description Face Value Cost Value
BOND FUND:
Fahnestock Prime Cash Series Fund 70,044 $ 70,044 $ 70,044
Notes-
U.S. Treasury Notes, 6.125%,
due September 30, 2000 250,000 249,115 249,845
U.S. Treasury Notes, 7.875%,
due April 15, 1998 250,000 251,460 255,860
U.S. Treasury Notes, 5.5%,
due April 15, 2000 150,000 151,281 147,470
U.S. Treasury Notes, 6.75%,
due May 31, 1999 125,000 125,249 127,110
U.S. Treasury Notes, 6.875%
due July 31, 1999 300,000 300,065 306,093
U.S. Treasury Notes, 7.5%,
due January 31, 1997 100,000 100,030 100,125
U.S. Treasury Notes, 6.25%,
due May 31, 2000 100,000 100,850 100,438
U.S. Treasury Notes, 6.125%,
due July 31, 2000 100,000 100,808 100,000
U.S. Treasury Notes, 7.875%.
due January 15, 1998 50,000 49,962 50,952
U.S. Treasury Notes, 7.125%,
due October 15, 1998 250,000 253,365 255,000
U.S. Treasury Notes, 5%,
due January 31, 1999 300,000 293,069 294,750
Total Notes 1,975,254 1,987,643
Total Bond Fund 2,045,298 2,057,687
FAHNESTOCK VINER HOLDINGS
INC. - COMMON STOCK FUND 528,600 3,889,063 7,664,700
VANGUARD INDEX TRUST FUND 67,511 3,547,130 4,669,063
MONEY MARKET FUND
Fahnestock Prime Cash Series Fund 7,421,528 7,421,528 7,421,528
CERTIFICATE OF DEPOSIT FUND:
Fahnestock Prime Cash Series Fund 55,054 55,054 55,054
MBNA America Bank C.D. 6.25%,
due May 12, 1997 525,000 520,800 525,000
Total C.D. Fund 575,854 580,054
AIM VALUE FUND 168,791 4,623,637 4,920,268
MFS EMERGING GROWTH FUND 200,941 5,649,565 6,086,516
TEMPLETON WORLD FUND 129,703 2,061,360 2,146,589
Total investments $29,813,435 $35,546,405
LOANS TO PARTICIPANTS
Number Interest Maturity
Description of loans Rates Dates
Participant
loans 116 8% January 1997-
December 2009 - 732,748
Total assets held for investment $29,813,435 $36,279,153
SCHEDULE II
FAHNESTOCK & CO.,INC. 401(k) PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
SINGLE TRANSACTIONS INCLUDING AN AMOUNT IN EXCESS OF 5% OF PLAN ASSETS
For the year ended December 31, 1996
Sales Purchase Net Gain
Description Date Price Price (Loss)
AIM Value Fund 8/1/96 - $4,274,663 -
MFS Emerging Growth Fund 8/1/96 - 4,860,260 -
Templeton World Fund 8/1/96 - 1,702,022 -
Cortland Trust General 7/12/96 2,961,162 - -
Cortland Trust General 7/12/96 4,626,702 - -
Cortland Trust General 7/5/96 - 2,323,450 -
Fahnestock Prime Cash Series Fund 7/12/96 - 2,961,162 -
Fahnestock Prime Cash Series Fund 12/26/96 - 1,900,000 -
Fahnestock Prime Cash Series Fund 8/1/96 - 3,599,056 -
Fahnestock Prime Cash Series Fund 7/12/96 - 4,626,703 -
Fahnestock Prime Cash Series Fund 8/1/96 4,274,663 - -
Fahnestock Prime Cash Series Fund 8/1/96 3,599,056 - -
Fahnestock Prime Cash Series Fund 8/1/96 4,860,260 - -
Fahnestock Prime Cash Series Fund 8/1/96 1,702,022 - -
SERIES OF TRANSACTIONS INCLUDING AN AMOUNT IN EXCESS OF 5% OF PLAN ASSETS
For the year ended December 31, 1996
Number Sales Number of Purchase Net Gain
Description of Sales Price Purchases Price (Loss)
Vanguard Index Trust Fund - - 16 $1,836,665 -
AIM Value Fund - - 6 4,641,514 -
MFS Emerging Growth Fund - - 6 5,619,340 -
Templeton World Fund - - 9 2,094,712 -
Cortland General Trust 11 $11,879,210 9 4,905,629 -
Fahnestock Prime Cash
Series Fund 8 15,779,708 6 14,020,793 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees for Fahnestock & Co.,Inc 401(k) Plan have duly caused this
annual report to be signed on thier behalf by the undersigned thereunto
duly authorized.
FAHNESTOCK & CO.,INC 401(k) PLAN
/S/ A.G. LOWENTHAL
Albert G. Lowenthal, as Trustee of the
Fahnestock & Co.,Inc. 401(k) Plan
Date: June 25, 1997
EXHIBIT INDEX
Exhibit No.
23 Consent of Independent Accountants