UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
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 0-15105
A. Full title of the plan:
Scott & Stringfellow Financial, Inc. Employee Stock Purchase Plan
B. Name of the issuer of the securities held pursuant to the Plan and
the address of its principal executive offices:
Scott & Stringfellow Financial, Inc.
909 East Main Street
Richmond, Virginia 23219
SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
INDEX
Page Number
FINANCIAL STATEMENTS
Independent Auditors' Report 3
Statements of Financial Condition -
December 31, 1996 and 1995 4
Statements of Income and Changes in Plan Equity
Years ended December 31, 1996, 1995, and 1994 5
Notes to Financial Statements 6
Signatures 10
Exhibit 23 - Consent of Independent Auditors
Independent Auditors' Report
Administrative Committee
Scott & Stringfellow Financial, Inc.
Employee Stock Purchase Plan:
We have audited the accompanying statements of financial condition of the Scott
& Stringfellow Financial, Inc. Employee Stock Purchase Plan as of December 31,
1996 and 1995, and the related statements of income and changes in plan equity
for each of the years in the three-year period 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 financial position of the Scott & Stringfellow
Financial, Inc. Employee Stock Purchase Plan as of December 31, 1996 and 1995,
and the results of its operations and changes in plan equity for each of the
years in the three-year period ended December 31, 1996 in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Richmond, Virginia
March 13, 1997
SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 1996 and 1995
1996 1995
ASSETS
Investment - 170,619 shares in 1996 and 125,337
shares in 1995 of Scott & Stringfellow
Financial, Inc. common stock, at fair
value (cost of $2,022,607 in 1996 and
$1,347,631 in 1995 (note 7)) $ 3,284,416 1,723,410
Cash in trust 215,191 149,719
Dividends and interest receivable 19,465 11,397
Receivable from Scott & Stringfellow
Financial, Inc. (note 3) 11,348 627
Total assets $ 3,530,420 1,885,153
LIABILITIES AND PLAN EQUITY
Due to Scott & Stringfellow Financial, Inc. (Note 3) $ 144,723 143,509
Plan equity 3,385,697 1,741,644
Total liabilities and plan equity $ 3,530,420 1,885,153
See accompanying notes to financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Income and Changes in Plan Equity
Years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Investment income:
Dividend income on Scott & Stringfellow
Financial, Inc. common stock $ 74,310 43,408 25,879
Interest 4,483 3,157 1,698
Unrealized appreciation (depreciation) in
fair value of Scott & Stringfellow
Financial, Inc. common stock (note 4) 886,030 316,956 -6,868
Realized gains on sales and distributions
of investments in Scott & Stringfellow
Financial, Inc. common stock (note 5) 72,778 15,509 14,004
Total investment income 1,037,601 379,030 34,713
Participant contributions 825,364 549,268 426,426
Participant withdrawals -218,912 -106,112 -74,142
Net increase in plan equity 1,644,053 822,186 386,997
Plan equity - beginning of year 1,741,644 919,458 532,461
Plan equity - end of year $3,385,697 1,741,644 919,458
See accompanying notes to financial statements.
SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 1996, 1995 and 1994
(1) Description of the Plan and Significant Accounting Policies
General
The Scott & Stringfellow Financial, Inc. Employee Stock Purchase Plan
(the 'Plan') covers all full time and some qualified part-time employees
('Participants') of Scott & Stringfellow Financial, Inc. (the 'Company')
and its subsidiaries. The Company believes that the Plan is not presently
subject to the provisions of the Employee Retirement Income Security Act of
1974. The Plan is administered by a committee appointed by the Board of
Directors of Scott & Stringfellow Financial, Inc. ('Administrative Committee').
The Trustee of the plan is Mellon Bank, N.A. ('Trustee'). The Trustee may
acquire shares of Company stock from the Company or, if directed by the
Administrative Committee, by purchase on the open market. The Company has
reserved 294,000 shares of its common stock for issuance and purchase by
employees under the Plan.
Basis of Presentation
The accompanying financial statements have been prepared on the accrual basis of
accounting. Accordingly, interest and dividend income are recognized as earned;
Plan contributions and withdrawals are recognized when incurred; and realized
gains or losses on sales and distributions of investments and unrealized
appreciation or depreciation of investments are recognized as they occur.
Investments
Marketable investments, including the Plan's investment asset, common stock of
Scott & Stringfellow Financial, Inc., are stated at estimated fair value as
determined by the Plan's Trustee (generally based upon quoted market prices).
Purchases and sales of investments are recorded as of the trade date. The cost
of investments sold in each Participant's account is based on the first-in,
first-out method.
Federal Income Taxes
The Plan is intended to qualify as an employee stock purchase plan under section
423 of the Internal Revenue Code of 1986, as amended (Section 423). Under
Section 423, neither the Plan nor its participants will incur federal income tax
as a result of purchasing Scott & Stringfellow Financial, Inc. common stock
under the Plan at not less than 85% of fair market value. Interest and dividend
income of the Plan allocated to the Participants are taxed directly to the
Participants. Participants disposing of the common stock acquired under the
Plan will recognize capital gain or loss and may also have ordinary income under
the circumstances specified by Section 423.
(2) Summary of Significant Provisions of the Plan
The following brief description of the Plan is provided for general information
purposes only. Participants should refer to the Plan document for more complete
information.
Contributions
Participants may contribute a minimum of $75 per calendar quarter and a maximum
of 15% of quarterly base compensation, subject to the annual purchase limitation
of Section 423. During 1996, this limitation was $25,000. All Participant
contributions, including reinvestment of dividend and interest income, are
invested in the common stock of Scott & Stringfellow Financial, Inc. at 85% of
the fair market value, as defined, of the shares on each investment date, which
is the last business day of each calendar quarter on which shares of the common
stock are traded over-the-counter. Company contributions are made to the plan
equal to the difference between participant contributions and the purchase price
of Scott & Stringfellow Financial, Inc. common stock when shares are purchased
in the open market. There were no Company contributions in 1996, 1995 and 1994.
Participant Accounts
Each participant's account ('Account') is credited with an allocation of shares
purchased with the Participant's and Company's contributions and reinvested
dividend and interest income allocable to the shares maintained in the
Participant's Account. Participants are immediately 100% vested in their
Account. As of December 31, 1996 there were 203 employees participating in the
plan.
Withdrawals and Sales
Participants may withdraw from the Plan at any time and may direct the Trustee
to either sell or withdraw the shares held in their Account. Participants may
make partial withdrawals once per calendar year. Proceeds of shares sold, less
expenses of the sale and any required income tax withholding, are remitted to
the withdrawing Participant.
Plan Termination
The Plan shall terminate when there are no remaining shares of the Company's
common stock reserved for the Plan or at any time at the discretion of the
Company's Board of Directors.
(3) Receivable From and Due to Scott & Stringfellow Financial, Inc.
The amounts receivable from Scott & Stringfellow Financial, Inc. at December 31,
1996 and 1995 totaling $11,347 and $627, respectively, represent amounts due as
a result of sales of shares of Scott & Stringfellow Financial, Inc. common stock
by Participants.
Amounts due to Scott & Stringfellow Financial, Inc. at December 31, 1996 and
1995 totaling $144,723 and $143,509, respectively, represent amounts due for the
purchase of 8,408 and 11,848 share, respectively, of Scott & Stringfellow
Financial, Inc. common stock. The common stock was acquired at an average per
share cost of $17.21 in 1996 and $12.11 in 1995.
(4) Unrealized Appreciation (Depreciation) in Fair Value of Investments
During 1996, 1995 and 1994, the Plan's investment in Scott & Stringfellow
Financial, Inc. common stock appreciated (depreciated) as follows:
Year ended December 31,
1996 1995 1994
Unrealized appreciation, end of year $1,261,808 375,778 58,822
Unrealized appreciation, beginning of year 375,778 58,822 65,690
Increase (decrease) in unrealized appreciation $ 886,030 316,956 -6,868
Unrealized appreciation includes the increase in value to Participants as a
result of the purchase of shares at 85% of fair market value.
(5) Realized Gains on Sales and Distributions
The aggregate cost and proceeds/market value relating to realized gains on
Scott & Stringfellow Financial, Inc. common stock was as follows:
Proceeds/fair
value at date of Realized
distribution Cost gains
Year ended December 31, 1996:
Sale of common stock $ 204,075 147,371 56,704
Distribution of common stock to
participants 90,567 74,493 16,074
Total $ 294,642 221,864 72,778
Year ended December 31, 1995:
Sale of common stock $ 30,073 25,674 4,399
Distribution of common stock to
participants 59,489 48,379 11,110
Total $ 89,562 74,053 15,509
Year ended December 31, 1994:
Sale of common stock $ 73,144 62,182 10,962
Distribution of common stock to
participants 29,297 26,255 3,042
Total $ 102,441 88,437 14,004
(6) Administrative Expenses
Under the Plan, expenses incurred in the purchase of shares and the expenses of
the Trustee are payable by the Company. Expenses incurred in the sale of shares
for a withdrawing participant are netted from the proceeds of such sale. All
other administrative expenses of the Plan are the responsibility of the Plan.
However in 1996, 1995 and 1994, the Company elected to pay for all
administrative expenses of the Plan.
(7) Subsequent Event
On February 26, 1997, Scott & Stringfellow Financial, Inc. announced a 3:2 stock
split effected in the form of a 50% stock dividend. The stock dividend will be
distributed on May 6, 1997 to shareholders of record on April 18, 1997. Share
and per share data included in the accompanying financial statements and related
notes have not been adjusted for the split.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the members of the Plan Committee have duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
By: Date:
/s/ David Plageman March 27, 1996
David Plageman
Chairman of the Plan Administration Committee
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Exhibit 23
Consent of Independent Auditors
Administrative Committee
Scott & Stringfellow Financial, Inc.
Employee Stock Purchase Plan:
We consent to incorporation by reference in the Registration Statement No.
33-54700 on Form S-8 of Scott & Stringfellow Financial, Inc. of our report dated
March 13, 1997, relating to the statements of financial condition of the Scott
& Stringfellow Financial, Inc. Employee Stock Purchase Plan as of December 31,
1996 and 1995, and the related statements of income and changes in plan equity
for each of the years in the three-year period ended December 31, 1996, which
report appears in the December 31, 1996 annual report on Form 11-K of the Plan.
KPMG PEAT MARWICK LLP
Richmond, Virginia
March 24, 1997
