SECURITIES 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, 1999
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, 1999 and 1998
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1999
Notes to Financial Statements
Supplemental Schedules:
Schedule I - Item 27a - Schedule of Assets Held for
Investment as of December 31, 1999
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of the Fahnestock & Co., Inc. 401(k) Plan:
In our opinion, the accompanying statements of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of the Fahnestock & Co., Inc. 401(k) Plan (the "Plan") as of
December 31, 1999 and 1998 and the changes in net assets available for benefits
for the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States. 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 of these statements in accordance with auditing standards generally
accepted in the United States, which 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, assessing the accounting principles used and significant
estimates made by the Plan's management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule
as listed on the accompanying index is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is 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. This
supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
June 27, 2000
PricewaterhouseCoopers LLP
FAHNESTOCK & CO., INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
1999 1998
ASSETS:
Investments, at fair value $71,995,055 $52,460,703
Contributions receivable from
Fahnestock & Co.Inc. 7,133 1,811,294
Loans receivable from participants 1,289,030 1,023,100
Accrued income receivable 35,513 43,558
Net assets available for benefits $73,326,731 $55,338,655
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
FOR THE YEAR ENDED DECEMBER 31, 1999
Additions to net assets attributed to:
Investment income:
Net realized and unrealized gains on investments $9,601,694
Interest 280,135
Dividends 710,290
Net investment income 10,592,119
Contributions:
Participants 9,296,666
Employer 2,333,051
Total contributions 11,629,717
Total additions 22,221,836
Deductions from net assets attributed to:
Benefits paid to participants 4,233,760
Net increase 17,988,076
Net assets available for benefits:
Beginning of year 55,338,655
End of year $73,326,731
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, 1998 to
change the rates used in computing the discretionary profit sharing
contribution from Fahnestock & Co. Inc. (the "Company").
Effective January 1, 1999, employees of the First of Michigan division
of the Company became eligible to participate in the Plan.
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 is designed to replicate 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.
Putnam Fund for Growth and Income - Funds are invested in shares
of a registered investment company that seeks capital growth
and current income.
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.
Ivy U.S. Emerging Growth Fund - Funds are invested in shares of
a registered investment company that seeks long-term capital
growth primarily through investment in equity securities. The
assets of the Hudson Capital Appreciation Fund were merged into
the Ivy U.S. Emerging Growth Fund in 1999.
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,
1999 were determined as follows:
2.0% of the first $30,000 of a participant's compensation;
5.0% of the next $10,000 of a participant's compensation;
6.0% of the next $25,000 of a participant's compensation;
6.2% of the next $35,000 of a participant's compensation;
2.5% of the next $60,000 of a participant's compensation; and
0% above $160,000 of a participant's compensation.
If 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 percent
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, 1999 approximately $131,000 was
contributed by the Company under this provision and is included in
the Company contribution of approximately $2,333,000.
Employees may make salary deferral contributions of up to 14% of
compensation. Current law limits participant deferrals to $10,000 for
the plan year ended December 31, 1999.
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 additional portion of the Employer Stock
Contributions only upon completion of 5 years service.
At December 31, 1999, forfeited nonvested accounts totaled
approximately $201,000. These accounts will be used to reduce
future employer contributions. The 1999 employer contributions
included approximately $100,000 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, 1999.
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.
The Plan presents in the statement of changes in net assets available
for benefits the net appreciation 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 dates of the financial statements and the reported
amounts of additions and contribution to, and deductions from net assets
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 reasonably possible that changes in the near
term could materially affect participants' account balances and the
amounts reported in the statements of net assets available for
benefits and the statement of changes in net assets available for 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.
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, 1999:
Percent of Net
Assets Available
Investment Market Value for Plan Benefits
Fahnestock Prime Cash Series
Held by: Money Market Fund $6,431,395
Bond Fund 51,210
Certificate of
Deposit Fund 37,866
Total Fahnestock Prime Cash Series 6,520,471 8.89%
Fahnestock Viner Holdings Inc.
Common Stock Fund 10,449,000 14.25%
Vanguard Index Trust Fund 12,805,665 17.46%
AIM Value Fund 15,083,546 20.57%
MFS Emerging Growth Fund 11,088,368 15.12%
Templeton World Fund 5,534,056 7.55%
Ivy U.S. Emerging Growth Fund 4,918,764 6.71%
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 and related investment earnings.
6. Subsequent Events:
In January 2000 the Plan received the employer contribution which was
Vested in accordance with the participants' elections.
SCHEDULE I
FAHNESTOCK & CO., INC. 401(k) PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES
December 31, 1999
Shares, Units Fair or
Description or Face Value Stated Value
Bond Fund:
Fahnestock Prime Cash Series Fund 51,211 $ 51,211
Notes:
U.S. Treasury Notes, 5.50%,
due April 15, 2000 150,000 149,954
U.S. Treasury Notes, 6.125%,
due July 31, 2000 100,000 100,141
U.S. Treasury Notes, 6.125%,
due September 30, 2000 250,000 250,040
U.S. Treasury Notes, 6.375%,
due September 30, 2001 150,000 150,304
U.S. Treasury Notes, 6.00%,
due July 31, 2002 100,000 99,406
U.S. Treasury Notes, 5.75%,
due August 15, 2003 100,000 97,953
U.S. Treasury Notes, 7.25%,
due May 15, 2004 100,000 103,016
U.S. Treasury Notes, 7.25%,
due August 15, 2004 125,000 128,906
U.S. Treasury Notes, 6.50%,
due August 15, 2005 150,000 150,000
U.S. Treasury Notes, 5.875%,
due November 15, 2005 100,000 97,078
U.S. Treasury Notes, 6.50%,
due October 15, 2006 100,000 99,734
U.S. Treasury Notes, 6.50%,
due October 15, 2006 150,000 149,601
U.S. Treasury Notes, 6.25%,
due February 15, 2007 100,000 98,391
U.S. Treasury Notes, 6.125%
Due August 15, 2007 100,000 97,500
U.S. Treasury Notes, 5.625%,
due May 15, 2008 100,000 94,062
Total Notes 1,875,000 1,866,086
Total Bond Fund 1,917,297
Fahnestock Viner Holdings Inc.
Common Stock Fund 696,600 10,449,000
Vanguard Index Trust Fund 94,625 12,805,665
Money Market Fund:
Fahnestock Prime Cash Series Fund 6,431,395 6,431,395
Certificate of Deposit ("C.D.")Fund:
Fahnestock Prime Cash Series Fund 37,866 37,866
Merrick BC Murray C.D. 5.50%
due May 29, 2001 1,295,000 1,295,000
Total C.D. Fund 1,332,866
Ivy U.S. Emerging Growth Fund 104,013 4,918,764
AIM Value Fund 308,899 15,083,546
MFS Emerging Growth Fund 178,456 11,088,368
Templeton World Fund 296,097 5,534,056
Putnam Fund for Growth and Income 129,819 2,434,098
Total investments 71,995,055
Loans to Participants
Number Interest Maturity
Description of loans rate Dates
Participant loans 150 8% January 2000 -
May 2023 1,289,030
Total assets held for investment $73,284,085
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
/s/ A.G. Lowenthal
Albert G. Lowenthal, as Trustee of the
Fahnestock & Co., Inc. 401(k) Plan
Date: June 28, 2000
EXHIBIT INDEX
Exhibit No. Description
23 Consent of Independent Accountants
