SECUITIES AND EXCHANGE COMMISSION
WASHINGTON, C.D. 20542
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, 1997
or
X TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 for the
transition period from --- to ---
Commission file Number 1-12043
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
125 Broad Street
New York, New York 10004
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
FAHNESTOCK VINER HOLDINGS INC.
Suite 1110, P.O. Box 2015
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, 1997 and 1996, with Fund Information as of
December 31, 1997
Statement of Changes in Net Assets Available for Benefits,
with Fund Information for the Year Ended December 31, 1997
Notes to Financial Statements
Supplemental Schedules:
Schedule I - Item 27a - Schedule of Assets Held for
Investment as of December 31, 1997
Schedule II - Item 27d - Schedule of Reportable
Transactions as of December 31, 1997
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,
1997 of FAHNESTOCK & CO., INC. 401(k) PLAN (the
"Plan") as of December 31, 1997 and 1996, and the related
statement of changes in net assets available for benefits, with fund
information for the year ended December 31, 1997. 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, 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 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. These
supplemental schedules are the responsibility of the Plan's
management. 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 16, 1998.
FAHNESTOCK & CO., INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997 AND 1996
Page 1 of 3
Fund Information
Hudson Capital Money Vanguard
Appreciation Bond Market Index
Fund Fund Fund Trust Fund
ASSETS:
Investments,
at fair value $4,234,202 $1,528,395 $6,135,405 $6,683,716
Contributions
receivable from
Fahnestock & Co.Inc.
Loans receivable
from participants
Accrued income
receivable 25,073
Net assets available
for benefits $4,234,202 $1,553,468 $6,135,405 $6,683,716
The accompanying notes are an integral part of these financial
statements.
FAHNESTOCK & CO., INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997 AND 1996
Page 2 of 3
Fund Information
Fahnestock
Viner
Holdings Inc.
AIM Value MFS Emerging Templeton Common
Fund Growth Fund World Fund Stock Fund
ASSETS:
Investments,
at fair value $5,697,313 $5,540,422 $4,133 192 $10,438,087
Contributions
receivable from
Fahnestock & Co.Inc. 169,782
Loans receivable
from participants
Accrued income
receivable
Net assets available
for benefits $5,697,313 $5,540,422 $4,133,192 $10,607,869
The accompanying notes are an integral part of these financial
statements.
FAHNESTOCK & CO., INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997 AND 1996
Page 3 of 3
Fund Information
Certificate of Loans to Total Total
Deposit Fund Participants 1997 1996
ASSETS:
Investments,
at fair value $1,146,625 - $45,537,357 $35,546,405
Contributions
receivable from
Fahnestock & Co. Inc. - - 169,782 22,372
Loans receivable
from participants - $948,481 948,481 732,748
Accrued income
receivable - - 25,073 36,910
Net assets available
for benefits $1,146,625 $948,481 $46,680,693 $36,338,435
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, 1997
Page 1 of 3
Fund Information
Hudson Capital Money Vanguard
Appreciation Bond Market Index
Fund Fund Fund Trust Fund
Additions to net assets
attributed to:
Investment income:
Net realized and
unrealized gains
(losses) on
investments $111,818 $ 6,896 - $1,619,167
Interest - 98,055 $232,645 -
Dividends - - - 100,285
Net investment income 111,818 104,951 232,645 1,719,452
Contributions:
Participants 167,226 135,057 474,184 672,739
Employer - - 1,629,569 -
Total contributions 167,226 135,057 2,103,753 672,739
Total additions 279,044 240,008 2,336,398 2,392,191
Deductions from net
assets attributed to:
Benefits paid to
participants (14,849) (115,017) (922,216) (201,219)
Net increase (decrease)
prior to interfund
transfers 264,195 124,991 1,414,182 2,190,972
Interfund transfers 3,970,007 (666,120) (2,700,305) (176,319)
Net increase
(decrease) 4,234,202 (541,129) (1,286,123) 2,014,653
Net assets available
for benefits:
Beginning of year - 2,094,597 7,421,528 4,669,063
End of year $4,234,202 $1,553,468 $6,135,405 $6,683,716
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, 1997
Page 2 of 3
Fund Information
Fahnestock
Viner
Holdings Inc.
AIM Value MFS Emerging Templeton Common
Fund Growth Fund World Fund Stock Fund
Additions to net assets
attributed to:
Investment income:
Net realized and
unrealized gains
(losses) on
investments $1,192,259 $1,155,848 $567,036 $1,767,137
Interest - - - -
Dividends 5,957 11,789 99,290 143,664
Net investment income 1,198,216 1,167,637 666,326 1,910,801
Contributions:
Participants 552,607 619,220 516,551 -
Employer - - - 169,782
Total contributions 552,607 619,220 516,551 169,782
Total additions 1,750,823 1,786,857 1,182,877 2,080,583
Deductions from net
assets attributed to:
Benefits paid to
participants (190,823) (229,594) (139,999) -
Net increase (decrease)
prior to interfund
transfers 1,560,000 1,557,263 1,042,878 2,080,583
Interfund transfers (782,955) (2,103,357) 943,725 840,214
Net increase (decrease) 777,045 (546,094) 1,986,603 2,920,797
Net assets available for
benefits:
Beginning of year 4,920,268 6,086,516 2,146,589 7,687,072
End of year $5,697,313 $5,540,422 $4,133,192 $10,607,869
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, 1997
Page 3 of 3
Fund Information
Certificate of Loans to Total
Deposit Fund Participants 1997
Additions to net assets
attributed to:
Investment income:
Net realized and
unrealized gains
(losses) on
investments - - $6,420,161
Interest $60,356 $66,288 457,344
Dividends - - 360,985
Net investment income 60,356 66,288 7,238,490
Contributions:
Participants - - 3,137,584
Employer - - 1,799,351
Total contributions - - 4,936,935
Total additions 60,356 66,288 12,175,425
Deductions from net
assets attributed to:
Benefits paid to
participants - (19,450) (1,833,167)
Net increase (decrease)
prior to interfund
transfers 60,356 46,838 10,342,258
Interfund transfers 506,215 168,895 -
Net increase (decrease) 566,571 215,733 10,342,258
Net assets available for
benefits:
Beginning of year 580,054 732,748 36,338,435
End of year $1,146,625 $948,481 $46,680,693
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, 1997 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. Participants should refer to the
respective fund prospectus for a more complete description of the
investment objectives. These include:
Bond Fund - Funds are invested in U.S. government and high
quality U.S. 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
primarily investing 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 common stock of the Company's parent, Fahnestock
Viner Holdings Inc.
The Hudson Capital Appreciation Fund was opened on August 1,
1997. Funds are invested in shares of a registered investment
company that seeks long term growth through capital appreciation
by investing primarily in equity securities.
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,
1997 were determined as follows:
2.9% of the first $30,000 of a participant's compensation;
5.1% of the next $10,000 of a participant's compensation;
7.1% of the next $25,000 of a participant's compensation;
6.7% of the next $35,000 of a participant's compensation;
1.1% 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 Fahnestock Viner
Holdings Inc. ("Holdings"), the Company may make an additional
contribution of Holdings common stock up to or equal to 15%
of the purchase price of the common stock (the "Employer Stock
Contribution") at the discretion of the Directors of the Board. For
the year ended December 31, 1997 approximately $157,000 was
contributed by the Company under this provision and is included in
the Company contribution of $1,629,569.
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, 1997.
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 the Employer Regular Contributions
plus the income derived 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 the discounted portion of the Employer Stock
Contributions only upon completion of 5 years service.
At December 31, 1997, forfeited nonvested accounts totaled
approximately $355,800. These accounts will be used to reduce
future employer contributions. The 1997 employer contributions
included approximately $320,000 from forfeited nonvested
accounts.
Company Qualified Matching and Qualified Non-Elective
Contributions as defined in the Plan document, if required, are fully
vested when made. No payment was required during the year ended
December 31, 1997.
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 originations and repayments as well
as dividends from Fahnestock Viner Holdings Inc. common stock
which are invested in the Money Market Fund.
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 risk associated with certain investment securities and the
level of uncertainty related to changes in the value of investment
securities, it is at least reasonable possible that changes in the near
term would materially affect participants' account balances and the
amounts reported in the statement of net assets available 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 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. An affiliate of the
Company acts as investment advisor for the Hudson Capital
Appreciation Fund. The Trustees of the Plan are also officers and
directors of the Company.
4. Concentration of Investments:
The following investments represent 5% or more of net assets
available for plan benefits as of December 31, 1997:
Percent of Net
Assets Available
Investment Market Value for Plan Benefits
Fahnestock Prime Cash Series
Held by: Money Market Fund $6,135,405
Bond Fund 86,126
Certificate of
Deposit Fund 46,625
Total Fahnestock Prime Cash Series 6,268,156 13.43%
Fahnestock Viner Holdings Inc.
Common Stock Fund 10,438,087 22.36%
Vanguard Index Trust Fund 6,683,716 14.32%
AIM Value Fund 5,697,313 12.20%
MFS Emerging Growth Fund 5,540,422 11.87%
Templeton World Fund 4,133,192 8.85%
Hudson Capital Appreciation Fund 4,234,202 9.07%
5. 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 the Plan termination, participants will become 100 percent vested
in their contributions.
SCHEDULE I
FAHNESTOCK & CO., INC. 401(k) PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES
December 31, 1997
Shares, Units Fair or
Description or Face Value Cost Stated Value
Bond Fund:
Fahnestock Prime Cash Series Fund 86,126 $86,126 $86,126
Notes:
U.S. Treasury Notes, 6.125%,
due September 30, 2000 250,000 249,115 252,658
U.S. Treasury Notes, 5.5%,
due April 15, 2000 150,000 150,910 149,437
U.S. Treasury Notes, 6.75%,
due May 31, 1999 125,000 125,147 126,797
U.S. Treasury Notes, 6.875%,
due July 31, 1999 300,000 300,032 305,250
U.S. Treasury Notes, 7.25%,
due May 15, 2004 100,000 103,924 107,938
U.S. Treasury Notes, 6.25%,
due May 31, 2000 100,000 100,617 101,250
U.S. Treasury Notes, 6.125%,
due July 31, 2000 100,000 100,597 101,000
U.S. Treasury Notes, 5%,
due January 31, 1999 300,000 293,069 297,939
Total Notes 1,423,411 1,442,269
Total Bond Fund 1,509,537 1,528,395
Fahnestock Viner Holdings Inc.
Common Stock Fund 598,600 4,895,313 10,438,087
Vanguard Index Trust Fund 74,206 4,155,647 6,683,716
Money Market Fund:
Fahnestock Prime Cash Series Fund 6,135,405 6,135,405 6,135,405
Certificate of Deposit Fund:
Fahnestock Prime Cash Series Fund 46,625 46,625 46,625
Advanta National Bank C.D. 6.25%
due May 14, 1999 1,100,000 1,092,850 1,100,000
Total C.D. Fund 1,139,475 1,146,625
Hudson Capital Appreciation Fund 261,694 4,629,926 4,234,202
AIM Value Fund 175,735 4,973,129 5,697,313
MFS Emerging Growth Fund 153,135 4,317,434 5,540,422
Templeton World Fund 245,731 4,123,335 4,133,192
Total investments 35,879,201 45,537,357
Loans to Participants
Number Interest Maturity
Description of loans rate Dates
Participant loans 128 8% January 1997-
December 2006 - 948,481
Total assets held for investment $35,879,201 $46,485,838
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, 1997
Sales Purchase Net Gain
Description Date Price Price (Loss)
Hudson Capital Appreciation Fund 8/1/97 - $2,444,738 -
SCHEDULE II
FAHNESTOCK & CO., INC. 401(k) PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Series of Transactions Including an Amount in Excess of 5% of Plan Assets
For the year ended December 31, 1997
Number
of Sales Number of Purchase Net Gain
Description Sales Price Purchases Price (Loss)
Templeton World Fund 2 $ 570,959 11 $2,497,828 $56,260
Fahnestock Prime Cash
Series Fund 9 3,339,426 18 2,047,576 -
Hudson Capital
Appreciation Fund - - 7 4,629,926 -
MFS Emerging Growth
Fund 3 1,761,991 3 79,415 344,517
AIM Value Fund 2 1,128,115 6 1,229,034 180,147
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Trustees for the Fahnestock & Co., Inc. 401(k) Plan have duly
caused this annual report to be signed on their behalf by the
undersigned thereunto duly authorized.
FAHNESTOCK & CO., INC. 401(k) PLAN
Albert G. Lowenthal, as Trustee of the
Fahnestock & Co., Inc. 401(k) Plan
Date: June 25, 1998
EXHIBIT INDEX
Exhibit No. Description
23 Consent of Independent Accountants