<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BAIRNCO CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
BAIRNCO CORPORATION
2251 LUCIEN WAY, SUITE 300
MAITLAND, FLORIDA 32751
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 19, 1996
To Shareholders:
The Annual Meeting of Shareholders of Bairnco Corporation ("Bairnco") will
be held on Friday April 19, 1996, at the Sheraton Orlando North, 600 N. Lake
Destiny Road, Maitland, Florida at 9:00 am., local time, for the following
purposes:
1. To elect the Board of Directors of Bairnco.
2. To ratify management's selection of Bairnco's auditors.
3. To transact such other business as may properly come before the meeting
and any adjournment thereof.
------------------------
Only shareholders of record at the close of business on March 5, 1996 will
be entitled to notice of and to vote at the meeting.
If you do not expect to attend the meeting in person, please date and sign
the enclosed proxy and return it promptly by mail in the envelope provided.
By Order of the Board of Directors
Barry M. Steinhart
Secretary
Maitland, Florida
March 21, 1996
THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND IMMEDIATE RETURN OF THE
ACCOMPANYING PROXY. PLEASE DATE, SIGN AND RETURN THE PROXY IN THE ENCLOSED
ADDRESSED ENVELOPE.
<PAGE> 3
BAIRNCO CORPORATION
2251 LUCIEN WAY, SUITE 300
MAITLAND, FLORIDA 32751
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 19, 1996
------------------------
INTRODUCTION
The Annual Meeting of Shareholders of Bairnco Corporation ("Bairnco") will
be held on Friday, April 19, 1996, at the Sheraton Orlando North, 600 North Lake
Destiny Road, Maitland, Florida at 9:00 am., local time, for the purposes set
forth in the accompanying notice. This Proxy Statement is furnished in
connection with the solicitation by Bairnco's Board of Directors of proxies to
be voted at such meeting and at any and all adjournments thereof. Proxies
properly executed, duly returned and not revoked will be voted at the Annual
Meeting (including adjournments) in accordance with the specifications therein.
If a proxy in the accompanying form is executed and returned, it
nevertheless may be revoked at any time prior to the exercise thereof by
executing and returning a proxy bearing a later date, by giving notice of
revocation to the Secretary of Bairnco, or by attending the Annual Meeting and
voting in person. On the matters coming before the meeting as to which a choice
has been specified by a shareholder by means of the ballot on the proxy, the
shares will be voted accordingly. If no choice is so specified, the shares will
be voted for the nominees listed in this Proxy Statement, and in favor of the
ratification of auditors. Abstentions (including broker non-votes) will be
counted for quorum purposes, but will have no affect on the outcome of the
voting.
Only shareholders of record at the close of business on March 5, 1996, are
entitled to notice of, and to vote at, the Annual Meeting. At the close of
business on such date there were 9,834,934 shares of common stock of Bairnco
("Bairnco Common Stock") outstanding. Each such share will be entitled to one
vote on each matter submitted to shareholders.
The Proxy Statement and accompanying form of proxy are first being sent to
shareholders on or about March 21, 1996. Bairnco's Annual Report to shareholders
accompanies this Proxy Statement.
<PAGE> 4
PROPOSAL 1. ELECTION OF DIRECTORS
DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTORS
The persons designated as proxies in the accompanying form of proxy have
been selected by the Board of Directors of Bairnco and have indicated that they
intend to vote all proxies received by them for the election of each of the
following nominees for the office of director of Bairnco, unless instructed
otherwise. The terms of all incumbent directors expire at the 1997 Annual
Meeting of Shareholders, or at such later time as their successors have been
duly elected and qualified. Nominees elected at the Annual Meeting will serve
until the Annual Meeting of Shareholders next succeeding their election or until
their successors have been duly elected and qualified. All such nominees are
currently directors of Bairnco, and all were elected by shareholders at the 1995
Annual Meeting of Shareholders.
If for any reason any of the following nominees is not a candidate when the
election occurs, proxies will be voted for the election of a substitute nominee
designated by the Board of Directors. The Board of Directors has no reason to
believe that any substitute nominees will be required.
NAMES AND AGES OF NOMINEES DATA PERTAINING TO NOMINEES
Luke E. Fichthorn III
(54)....................... Since May 23, 1990, Mr. Fichthorn has served as the
Chairman and on December 18, 1991, Mr. Fichthorn
became Chief Executive Officer of Bairnco. For
over twenty-one years, Mr. Fichthorn has been a
private investment banker and partner of Twain
Associates, a private investment banking and
consulting firm. Mr. Fichthorn became a director
of Bairnco in January, 1981. Mr. Fichthorn is also
a director of Florida Rock Industries, Inc. and
FRP Properties, Inc.
Charles T. Foley (57)...... For the past 25 years, Mr. Foley has been President,
Chief Investment Officer and a director of
Estabrook Capital Management, Inc., an investment
advisory firm providing asset management services
for individuals and institutions. Mr. Foley is
Chairman of the Audit Committee and a member of
the Nominating and Compensation Committees. Mr.
Foley has been a director of Bairnco since May,
1990.
Richard A. Shantz (60)..... Mr. Shantz was President of Bairnco from August,
1990, until his retirement on January 2, 1992. He
has served as a director of Bairnco since August,
1990. Mr. Shantz is Chairman of the Compensation
Committee and a member of the Audit and Nominating
Committees.
William F. Yelverton
(54)....................... Since September, 1995, Mr. Yelverton has been CEO of
the Individual Insurance Group of Prudential Life
Insurance Company. From September 1988 until
September 1995 he was Chairman and CEO of New York
Life Worldwide Holding, Inc., an insurance holding
company. Mr. Yelverton was elected as a director
in August, 1991. Mr. Yelverton is Chairman of the
Nominating Committee and is a member of the Audit
and Compensation committees.
Assuming that a quorum is present, nominees receiving a plurality of the
votes cast at the Annual Meeting will be elected to the Board of Directors of
Bairnco. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITS NOMINEES FOR ELECTION
TO THE BOARD OF DIRECTORS.
2
<PAGE> 5
MEETINGS OF THE BOARD OF DIRECTORS
During 1995, Bairnco's Board of Directors met ten times for regular
meetings and two times for special meetings. No member of the Board attended
fewer than 90% of the aggregate of (1) the total number of meetings of the Board
of Directors, and (2) the total number of meetings held by all committees of the
Board on which he served. Each non-employee director received an annual retainer
of $12,000 per year payable quarterly and a fee of $1,000 for each regular or
special meeting attended in person. Under this policy, attendance fees for all
regular meetings, special meetings and committee meetings held on a single day
are limited to $1,000. Mr. Shantz received fees of $34,250 for serving on a
Special Committee of the Board that met during 1995.
In addition, each director and former director of Bairnco, who is not at
the time an employee of Bairnco or any of its subsidiaries, is entitled to
$1,500 per day when called upon by Bairnco to perform extraordinary services
(not incidental to attendance at directors' meetings) on its behalf. No payments
were made during 1995.
During 1995, Bairnco's outside directors received the following
compensation: Charles T. Foley -- $22,000, Richard A. Shantz -- $56,250, William
F. Yelverton -- $22,000.
It is the present policy of Bairnco that outside directors upon retirement
from the Board of Directors shall receive for the number of years equal to the
number of years he or she has served on the Board of Directors of Bairnco,
annually an amount equal to the non-employee director annual retainer in effect
at the time of his or her retirement. Such amount shall be payable in quarterly
installments. If the retired non-employee director should die prior to receiving
payments equal to the number of years served on the Board, the director's estate
will have the choice of either continuing to receive the remaining payments on a
quarterly basis; or receiving in a lump sum, the net present value of the
remaining payments discounted at the then thirty year U.S. Government bond
yield.
COMMITTEES OF THE BOARD OF DIRECTORS
Bairnco has standing Audit, Compensation and Nominating Committees of the
Board of Directors. The Compensation Committee met six times during 1995 and the
Audit Committee met two times during 1995. The non-employee directors who are
members of the Audit, Compensation and Nominating Committees of Bairnco were
entitled to receive a fee for each meeting attended in person on a day during
which the Board of Directors did not meet. During 1995, the Audit, and
Compensation Committees met only on days on which the Board of Directors met
and, accordingly, no additional fees were paid with respect to such meetings.
The Audit Committee reviews and recommends to the Board of Directors the
engagement of the independent auditors of Bairnco and its subsidiaries, and
reviews with the auditors their work, fees and the accounting policies and
practices of Bairnco and its subsidiaries.
The Compensation Committee reviews and recommends to the Board of Directors
the base salaries proposed to be paid to officers of Bairnco, Presidents of its
subsidiaries, Presidents of divisions of its subsidiaries, and other employees
whose base salaries exceed $100,000. The Compensation Committee also reviews and
approves management incentive compensation and reviews and administers the stock
option plan.
The Nominating Committee reviews and recommends to the Board of Directors
the appropriate size and composition of the Board of Directors. The Nominating
Committee will not consider recommendations from shareholders; the Committee
believes it has sufficient resources and contacts to fulfill its obligations.
3
<PAGE> 6
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of December 31, 1995,
regarding the beneficial ownership of Bairnco Common Stock by the only persons
known to Bairnco to be the beneficial owners of more than 5% of Bairnco's issued
and outstanding Common Stock:
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT AND NATURE OF
OF BENEFICIAL ISSUED AND
OWNERSHIP OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
----------------------------------------------------- ----------------- ------------
<S> <C> <C>
Cornelia Bailey...................................... 1,000,000 9.80%
14 Bassett Creek Trail North
Hobe Sound, FL 33455
Dimensional Fund Advisors Inc(1)..................... 565,800 5.54%
1299 Ocean Avenue
Santa Monica, CA 90401
</TABLE>
- ---------------
(1) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 565,800 shares of
Bairnco Corporation stock as of December 31, 1995 all of which shares are
held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares.
The following table presents information regarding beneficial ownership of
Bairnco Common Stock by each member of the Board of Directors, each nominee for
election as a director, each of the executive officers of Bairnco named in the
summary compensation table below and by all directors and executive officers of
Bairnco as a group, as of December 31, 1995.
<TABLE>
<CAPTION>
ISSUED AND PERCENTAGE OF
OUTSTANDING AMOUNT AND NATURE
COMMON STOCK ON OF BENEFICIAL
DECEMBER 31, OWNERSHIP OF
NAME OF INDIVIDUAL OR GROUP 1995 COMMON STOCK
--------------------------------------------------- --------------- -----------------
<S> <C> <C>
Luke E. Fichthorn III.............................. 319,398(1) 3.11%
Charles T. Foley................................... 387,929(2) 3.77%
Elmer G. Pruim III................................. 2,275(3) (9)
Richard A. Shantz.................................. 365,999(4) 3.57%
Barry M. Steinhart................................. 33,715(5) (9)
J. Robert Wilkinson................................ 62,566(6) (9)
William F. Yelverton............................... 31,899(7) (9)
All executive officers and directors as a group (7
persons)......................................... 1,203,151(8) 11.72%
</TABLE>
- ---------------
(1) Includes 2,000 shares owned by Mrs. Fichthorn, an aggregate of 18,700 shares
owned by his children and 1,500 shares owned by two trusts of which Mr.
Fichthorn is a co-trustee. Mr. Fichthorn disclaims beneficial ownership of
all shares referenced thus far in this Note (1). Also includes shares that
would be issued upon exercise of 183,333 vested unexercised stock options
granted under the 1990 Bairnco Stock Option Plan.
(2) Includes 37,600 shares owned by Estabrook Capital Management, Inc.
("Estabrook") which represents less than 1% of the issued and outstanding
shares. Mr. Foley is President, Chief Investment Officer and a director of
Estabrook. Estabrook has represented to Bairnco that it has created a
"Chinese wall" that prevents Mr. Foley from participating in any investment
or voting decisions with respect to such shares. Accordingly, Mr. Foley
disclaims beneficial ownership of the shares of Bairnco Common Stock held
by Estabrook. Also includes shares that would be issued upon the exercise
of 7,999 vested unexercised stock options granted under the 1990 Bairnco
Stock Option Plan.
(3) Includes shares that would be issued upon the exercise of 625 vested
unexercised stock options granted under the 1990 Bairnco Stock Option Plan.
4
<PAGE> 7
(4) Includes 37,600 shares owned by Mrs. Shantz as to which Mr. Shantz disclaims
beneficial ownership. Also, includes shares that would be issued upon the
exercise of 5,999 vested unexercised stock options granted under the 1990
Bairnco Stock Option Plan.
(5) Includes 100 shares owned by each of his two children (under the Uniform
Gift to Minors Act). Also includes shares that would be issued upon
exercise of 30,000 vested unexercised stock options granted under the 1990
Bairnco Stock Option Plan.
(6) Includes 400 shares owned by each his three children (under the Uniform
Gifts to Minors Act) with Mrs. Wilkinson as custodian with respect to which
Mr. Wilkinson disclaims beneficial ownership. Also includes shares that
would be issued upon exercise of 50,000 vested unexercised stock options
granted under the 1990 Bairnco Stock Option Plan. Mr. Wilkinson also
indirectly owns an indeterminate number of shares through ownership of
2923.141 units in trust under the Bairnco Corporation 401(K) Savings Plan.
(7) Includes shares that would be issued upon the exercise of 6,999 vested
unexercised stock options granted under the 1990 Bairnco Stock Option Plan.
(8) Includes a total of 96,700 shares owned by the wives, children or in trusts
or custodial accounts for relatives of executive officers or directors but
as to which each executive officer or director, respectively, disclaims
beneficial ownership. Also includes shares that would be issued upon the
exercise of 284,955 vested unexercised stock options granted under the 1990
Bairnco Stock Option Plan.
(9) The percentage of shares owned by such executive officer or director does
not exceed 1% of the issued and outstanding Bairnco Common Stock.
Based on Bairnco's review of Securities and Exchange Commission Forms 3, 4,
and 5 submitted to Bairnco and written representation from directors and
executive officers, no director, executive officer or beneficial holder of 10%
of Bairnco common stock, other than Mr. Wilkinson on one occasion, failed to
file a report covering a single transaction on a timely basis, during 1995, any
reports required by Section 16(a) of the Securities Exchange Act of 1934.
5
<PAGE> 8
COMPENSATION OF MANAGEMENT
GENERAL
The following table sets forth information regarding the compensation paid,
distributed or accrued by Bairnco and its subsidiaries for services rendered
during 1993, 1994, and 1995 to the Chairman of the Board and each of the three
other most highly compensated executive officers of Bairnco (collectively the
"Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- AWARDS
SALARY BONUS ------------
NAME AND PRINCIPAL POSITION YEAR -------- -------- OPTIONS
- ------------------------------------------------- ---- ($) ($) ------------
<S> <C> <C> <C> <C>
Luke E. Fichthorn III............................ 1995 $339,167 $168,800
Chairman of the Board 1994 $330,000 $146,300
1993 $320,833 $ 0
J. Robert Wilkinson.............................. 1995 $167,300 $ 65,000
V. P. Finance 1994 $165,950 $ 55,600
1993 $162,933 $ 0
Barry M. Steinhart............................... 1995 $100,000 $ 36,500
V. P. Administration 1994 $ 98,500 $ 27,400
1993 $ 96,500 $ 0
Elmer G. Pruim III............................... 1995 $ 82,083 $ 64,000
Corporate Controller 1994 $ 33,333 $ 18,500 2,500
</TABLE>
The following table sets forth information for each Named Executive with
regard to the aggregate stock options held as of December 31, 1995. No stock
options were granted to or exercised by Named Executives during 1995.
FISCAL YEAR END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS
OPTIONS AT FY-END
AT FY-END (#) ($)(1)
--------------- --------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
----------------------------------------------------- --------------- --------------
<S> <C> <C>
Luke E. Fichthorn III................................ 183,333/166,667 $0/$0
J. Robert Wilkinson.................................. 50,000/0 $37,500/$0
Barry M. Steinhart................................... 30,000/0 $22,500/$0
Elmer G. Pruim III................................... 625/1,875 $938/$2,813
</TABLE>
- ---------------
(1) Value is determined by multiplying the number of unexercised in-the-money
options by the difference between the stock price on December 31, 1995 and
the option grant price.
BAIRNCO RETIREMENT PLAN
Bairnco maintains the Bairnco Corporation Retirement Plan (the "Bairnco
Plan"), a non-contributory defined benefit pension plan, in which all salaried
employees and certain hourly employees of Bairnco, and its U.S. subsidiaries,
KASCO Corporation and Arlon, Inc., participate.
Remuneration covered by the Bairnco Plan in a particular year includes that
year's base salary, overtime pay, commissions, stock purchase plan payments,
other incentive compensation and amounts that are deferred under a 401(k) plan
that is at any time maintained by Bairnco, but excludes, among other items,
compensation received in that year under the Management Incentive Compensation
Plan in excess of 50% of the participant's basic pay rate as of the December 31
preceding the date of payment. The 1995 remuneration
6
<PAGE> 9
covered by the Bairnco Plan for each participant therefore includes management
incentive compensation (up to such 50% ceiling) paid during 1996 in respect of
1995 awards.
The following table presents information regarding estimated annual
benefits payable in the form of a straight life annuity upon retirement to
persons in specified remuneration and years of service classifications:
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE AT RETIREMENT
COMPENSATION ----------------------------------------------------------
AT RETIREMENT 5 10 15 20 25 OR MORE
--------------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C>
$ 50,000........................ $ 4,033 $ 8,065 $12,098 $16,130 $ 20,163
75,000........................ 6,470 12,940 19,410 25,880 32,351
100,000........................ 8,908 17,815 26,723 35,630 44,538
150,000 or more................ 13,783 27,565 41,348 55,130 68,913
</TABLE>
In accordance with IRS regulation, the maximum allowable compensation
permitted in computing a benefit is $150,000 for 1995. However, employees will
receive the greater of the benefit outlined above or the accrued benefit as of
December 31, 1993 which was based on compensation in excess of $150,000 plus a
benefit based on service after December 31, 1993 and final average compensation
based on the $150,000 limit.
For each of the following, the credited years of service under the Bairnco
Plan as of December 31, 1995, and the remuneration received during 1995 covered
by the Retirement Plan, were, respectively, as follows: Mr. Fichthorn, 6 years
and $150,000; Mr. Wilkinson, 9 years and $150,000; Mr. Steinhart, 13 years and
$136,500; and Mr. Pruim, 1 year and $123,125.
In addition, Bairnco sponsors a non-qualified retirement plan such that
retirement benefits as determined under the Bairnco Plan are supplemented to
provide an aggregate pension benefit based on adjusted dates of hire and
remuneration. Pursuant to his employment agreement, a non-qualified retirement
plan provides Mr. Fichthorn an estimated annual benefit of $43,294 payable upon
normal retirement date, based upon 25 projected years of credited service, and
1995 covered remuneration of $150,000.
EXECUTIVE CONTRACTS
Employment Agreement with Mr. Fichthorn
On May 23, 1990, Bairnco entered into an agreement with Mr. Fichthorn,
Chairman of Bairnco, under which Mr. Fichthorn became an employee. The initial
term of the agreement was for four years, but the agreement generally
automatically renews so that at no time will the term of the agreement be less
than four years. Under the agreement, Mr. Fichthorn presently receives a base
salary of $342,500 and is entitled to participate in the Bairnco Headquarters
management incentive compensation plan, where he is entitled to receive 25% of
an annual pool that is generated at the rate of $15,000 for each $.01 per share
of net income of Bairnco and its consolidated subsidiaries as reported to
shareholders in excess of $.30 per share after reflecting the management
incentive compensation annual pool as a cost in arriving at pre-tax income.
In accordance with the agreement, Mr. Fichthorn received on the date when
he became an employee of Bairnco stock options for 350,000 shares of Bairnco
Common Stock at an exercise price equal to the book value of a share of stock
determined on the last day of the month in which he became an employee ($5.94
per share). One hundred thousand of the option shares became exercisable on the
first anniversary of the date of grant; of the remaining 250,000 shares, 83,333
shares became exercisable on January 28, 1993 for earnings of $.70 per share for
the calendar year 1992. An additional 83,333 shares became exercisable on
January 26, 1996 for earnings at $.75 per share for the calendar year 1995. The
remaining 83,334 become exercisable on the tenth anniversary of the date of
grant, if Mr. Fichthorn is an employee on such date.
All options will remain exercisable for ten years from the first date they
become exercisable. Except in the case of a voluntary termination or a
termination for cause, as defined in the agreement, exercisable options will
generally remain exercisable for three years following termination. The
exercisability of all of the options granted to Mr. Fichthorn generally will
accelerate in the event of a change of control. Each option share is to be
accompanied by a limited stock appreciation right that will become exercisable
for six months following a change of control. Upon exercise of such right, Mr.
Fichthorn will receive the excess of the fair market value per share (or, if
greater, $10 per share) over the exercise price per share for the underlying
option. In the event that the payments received by Mr. Fichthorn with respect to
his options and under any other provision of the agreement by reason of a change
of control are subject to the excise tax on excess parachute payments,
7
<PAGE> 10
Bairnco will pay Mr. Fichthorn such amounts as are necessary to place him in the
same position as he would have been in if no excise tax had been payable.
Mr. Fichthorn will also receive a special retirement supplement that is
intended to provide him a retirement benefit comparable to what he would have
received under the Bairnco Plan (described above) if his combined past service
as a director of Bairnco's former subsidiary, Keene Corporation, and Bairnco (21
years) were treated as years of service under that plan. The supplemental, non
qualified benefit (as described above) is fully vested.
The Agreement provides that if Mr. Fichthorn dies while an employee, his
surviving spouse or estate will receive a death benefit equal to three times the
sum of (i) his base salary, and (ii) the highest bonus paid to him during the
prior three years or the current year. If Mr. Fichthorn's employment terminates
due to disability, he will receive 75% of his base salary for two years and 55%
of such salary thereafter until the disability ends or his supplemental
retirement benefits commence.
If Bairnco terminates Mr. Fichthorn's employment without cause or breaches
the agreement in a material fashion leading Mr. Fichthorn to terminate his
employment, Bairnco will pay Mr. Fichthorn a lump sum benefit equal to the sum
of (i) four times his then base salary, and (ii) the highest bonus paid or
payable to him during the prior three years or the current year. Regardless of
the reason for his termination, Bairnco will also provide Mr. Fichthorn and his
spouse with medical, health and hospitalization benefits following his
termination until he attains age 65 (or, in the event of his death, until his
spouse attains age 65).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Compensation Committee consisted of the following members during all of
1995: Messrs. Charles Foley, Richard Shantz and William Yelverton. All the
members of the Committee are outside directors. Prior to his retirement on
January 2, 1992, Mr. Shantz was President of the Corporation. He was elected to
the Compensation Committee on February 20, 1992.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The Company's executive compensation program is based on two objectives:
Providing market-competitive compensation opportunities, and
Creating a strong link between the interests of the shareholders, the
Company's financial performance, and the total compensation of the
Company's executive officers.
The components of the Company's executive compensation program include:
annual base cash compensation, management incentive compensation (MIC), and
longer term incentives consisting of stock options.
Base salaries are targeted at the median of competitive data for industrial
companies. (These companies differ from those shown as the Company's peer group
in the Performance Graph on page 10 because the Company competes for talent with
a broader group of employers than just those in its industry.) During 1995, the
Company retained the services of Hewitt Associates, LLC to assist with a review
of the Company's compensation program. As a result of this study, upward
adjustments were made in salary ranges to maintain competitiveness. Individual
variability is based on performance and experience. Adjustments are normally
considered annually, based upon general movement in external salary levels,
individual performance and potential, and/or changes in the positions, duties
and responsibilities in accordance with a formal Compensation Policy.
INCENTIVE COMPENSATION
Incentive compensation is a function of company performance namely, net
income per share, and is administered through Bairnco's Management Incentive
Compensation (MIC) Program. The annual pool for the MIC Program for executives
is generated at the rate of $15,000 for each $.01 per share of net income of
Bairnco and its consolidated subsidiaries as reported to shareholders in excess
of $.30 per share, after reflecting the management incentive compensation annual
pool as a cost in arriving at pre-tax income. Over the past fiscal year, net
income was equal to $.75 per share, generating a total bonus pool of $675,000.
8
<PAGE> 11
Distribution of MIC awards to eligible employees is dependent upon the
Compensation Committee's objective evaluation of the individual employee's
achievement, as measured against predetermined specific objectives for each
employee, and distributions are made on an annual basis.
STOCK OPTION PLAN
The 1990 Bairnco Stock Incentive Plan (the "Option Plan") was approved by
shareholders at the 1990 Annual Meeting of Shareholders. Under the terms of the
Option Plan, the Committee has complete discretion in determining the
participation and number of options, if any, to be granted to a Participant. The
Committee has established and follows guidelines with respect to the granting of
options under the Option Plan to employees upon their hire or promotion to
important managerial or supervising classifications. No grants were issued to
executive officers during the fiscal year ending December 31, 1995.
COMPENSATION EARNED BY THE CHIEF EXECUTIVE OFFICER
In considering the Chairman's base salary, the Committee reviewed Bairnco's
general financial performance and the progress in turning around problem
operations. The Committee also reviewed the Chairman's base salary against
recent salary surveys, (most notably Project 777 from the Management
Compensation Service, a division of Hewitt Associates). This information showed
Mr. Fichthorn's salary to be in the average range for industrial companies the
size of Bairnco. The Committee also considered the time period elapsed from Mr.
Fichthorn's date of last increase in May 1994. On May 1, 1995 he received a
salary increase of 3.0% resulting in a current salary for Mr. Fichthorn of
$342,500.
162 (M) DISCLOSURE
Based on current levels of compensation, no executive officer is expected
to receive compensation for 1996 services which would be non deductible under
Section 162 (m) of the Internal Revenue Code. Accordingly, the Compensation
Committee has not considered any revisions to its policies and programs in
response to this new provision of law.
Respectfully submitted,
The Compensation Committee
Richard A. Shantz
Charles T. Foley
William F. Yelverton
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<PAGE> 12
PERFORMANCE GRAPH
Presented in the graph below is a comparison of the five year cumulative
returns among Bairnco common stock, the S&P 500 Index and a Dow Jones composite
peer group index. The cumulative returns shown in the graph assume an initial
investment of $100 as of December 31, 1990, and reinvestment of all cash and
cash equivalent dividends declared as of the ex-date of the dividend.
Due to the diversity of Bairnco's operations, no single, published,
industry or line-of-business index was determined to be relevant for comparative
purposes to the total return on an investment in Bairnco Common Stock over the
last five years. Accordingly, a composite peer group index was developed using
three industry group indices published by Dow Jones. The indices used, each of
which was weighted equally in deriving the composite index, are the Dow Jones
Electrical Components and Equipment Index, the Dow Jones
Industrial -- Diversified Index and the Dow Jones Diversified Technology Index.
PERFORMANCE GRAPH
FIVE YEAR CUMULATIVE RETURN COMPARISON
AMONG BAIRNCO, S&P 500 AND COMPOSITE PEER GROUP
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD COMPOSITE
(FISCAL YEAR COVERED) BAIRNCO S&P 500 PEER GROUP
<S> <C> <C> <C>
1990 100 100 100
1991 153 130 123
1992 145 140 133
1993 86 155 155
1994 97 157 153
1995 141 215 203
</TABLE>
On December 31, 1993, a restructuring plan was adopted by Bairnco pursuant
to which the businesses comprising the Specialty Construction Products segment
and certain other non-core businesses were to be divested. Losses from these
discontinued operations in 1993, net of related tax benefits, amounted to
($23,395,000) or ($2.23) per share and included a substantial write-down of the
net assets of these operations to their expected net realizable value as of
December 31, 1993. Restructuring costs were also incurred at KASCO Corporation
in conjunction with programs underway to focus this unit on those lines of
business that have the greatest growth and profit potential and to rationalize
its North American production facilities. In the fourth quarter of 1993, Bairnco
also recorded a $3.0 million pre-tax provision for anticipated litigation
expenses. (See Notes 2 and 3 to the Consolidated Financial Statements on page 19
of Bairnco's 1995 Annual Report).
10
<PAGE> 13
PROPOSAL 2. RATIFICATION OF AUDITORS
The Board of Directors has voted unanimously to retain the firm of Arthur
Andersen LLP, independent certified public accountants, as auditors for Bairnco
and its subsidiaries for the 1996 fiscal year. The Board of Directors is
submitting its selection of Arthur Andersen LLP to shareholders for
ratification. Representatives of Arthur Andersen LLP are expected to be present
at the Annual Meeting and to be available to respond to appropriate questions.
These representatives will have the opportunity to make a statement at the
Annual Meeting if they desire to do so. Ratification of management's selection
of auditors will require the affirmative vote of the holders of a majority of
the shares of Bairnco Common Stock present at the Annual Meeting (assuming that
a quorum is present). THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION
OF MANAGEMENT'S SELECTION OF AUDITORS.
PROPOSALS BY HOLDERS OF COMMON STOCK
Any proposal that a shareholder of Bairnco desires to have included in the
Proxy Statement relating to the 1997 Annual Meeting of Shareholders must be
received by Bairnco at its executive offices no later than December 1, 1996. The
executive offices of Bairnco currently are located at 2251 Lucien Way, Suite
300, Maitland, Florida 32751.
EXPENSES AND OTHER MATTERS
Bairnco will pay the costs of preparing, assembling and mailing this Proxy
Statement and the material enclosed herewith. Bairnco has requested brokers,
nominees, fiduciaries and other custodians who hold shares of Bairnco Common
Stock in their names to solicit proxies from their clients who own such shares,
and Bairnco has agreed to reimburse them for their expenses in so doing.
In addition to the use of the mails, certain officers, directors and
regular employees of Bairnco, at no additional compensation, may request the
return of proxies by personal interview or by telephone or telegraph.
Management does not intend to present any further items of business to the
Annual Meeting, and knows of no such items that will or may be presented by
others. If, however, any other matter properly comes before the meeting, the
persons named in the enclosed proxy form will vote thereon in such manner as
they may in their discretion determine.
By Order of the Board of Directors
Barry M. Steinhart
Secretary
Maitland, Florida
March 21, 1996
PLEASE DATE, SIGN AND IMMEDIATELY RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED ADDRESSED ENVELOPE
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<PAGE> 14
APPENDIX A
<TABLE>
PROXY
BAIRNCO CORPORATION
ANNUAL MEETING OF SHAREHOLDERS, APRIL 19, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BAIRNCO CORPORATION
The undersigned hereby appoints LUKE E. FICHTHORN III, J. ROBERT WILKINSON, and BARRY M. STEINHART, and each of them, the proxies of
the undersigned, with power of substitution in each, to vote all stock of BAIRNCO CORPORATION that the undersigned is entitled to
vote at the Annual Meeting of Shareholders of such Corporation to be held at the Sheraton Orlando North, 600 North Lake Destiny
Road, Maitland, Florida, on Friday, April 19, 1996, at 9:00 A.M., local time, and at any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
- ------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
<S> <C> <C>
1. ELECTION OF DIRECTORS NOMINEES: Luke E. Fichthorn, III, Charles T. Foley
FOR all nominees listed WITHHOLD AUTHORITY Richard A. Shantz, William F. Yalvarton
to the right except as To vote for all nominees (INSTRUCTIONS: to withhold your vote from any individual nominee or
marked (to the contrary) listed to the right nominees, check the FOR box hereon and write each nominee's name on
[ ] [ ] the space provided below.)
----------------------------------------------------------------------
2. RATIFICATION OF MANAGEMENT'S SELECTION OF AUDITORS 3. TO VOTE IN THEIR DISCRETION, UPON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING
FOR AGAINST ABSTAIN
[ ] [ ] [ ] If no contrary instructions are indicated on this Proxy, this
Proxy will be voted FOR Proposals 1 and 2.
Dated:
----------------------------------------
-----------------------------------------------
(Signature)
-----------------------------------------------
(Signature)
Please sign as name appears at left. Joint
owners should each sign. When signing as
attorney, executor, administrator, trustee,
or guardian, please give full title as such.
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE
FOLD AND DETACH HERE
</TABLE>
