<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended January 31, 1998
Commission File Number 1-13099
THE MAXIM GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-2060334
- --------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
210 TownPark Drive, Kennesaw, Georgia 30144
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 590-9369
--------------
Securities registered pursuant to Section 12(b) of the Securities Exchange Act
of 1934:
Common Stock, $.001 par value New York Stock Exchange
9-1/4% Senior Subordinated Notes Due 2007 New York Stock Exchange
- ----------------------------------------- ---------------------------------
(Title of each class) (Name of each exchange on which
registered)
Securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934:
Common Stock $.001 par value
- --------------------------------------------------------------------------------
(Title of class)
<PAGE> 2
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
fiscal year ended January 31, 1998, as set forth below:
Part IV, Item 13(a) of the above-referenced Form 10-K
is amended to include as Exhibit 99 the information
required by Form 11-K with respect to The Maxim
Group, Inc. 401(k) Plan (the "Plan"), which exhibit
is filed as part of the above-referenced Form 10-K in
lieu of a separate filing of an Annual Report on Form
11-K for the Plan for the fiscal year ended December
31, 1997, in accordance with Rule 15d-21.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
THE MAXIM GROUP, INC.
By: /s/ A. J. Nassar
-------------------------------------
A. J. Nassar
President and Chief Executive Officer
Date: June 26, 1998
2
<PAGE> 3
EXHIBIT 99
Information required by Form 11-K with respect to The Maxim Group, Inc. 401(k)
Plan for the fiscal year ended December 31, 1997
1. The following financial statements prepared in accordance with the
financial reporting requirements of ERISA include the following:
a. Report of Independent Public Accountants
b. Statement of Net Assets Available for Benefits, with Fund
Information, as of December 31, 1997
c. Statement of Net Assets Available for Benefits, with Fund
Information, as of March 31, 1997
d. Statement of Changes in Net Assets Available for Benefits,
with Fund Information, for the Nine Months Ended
December 31, 1997
e. Notes to Financial Statements and Schedules
f. Schedule I: Schedule of Assets Held for Investment Purposes -
December 31, 1997
g. Schedule II: Schedule of Loans in Default - December 31, 1997
h. Schedule III: Schedule of Reportable Transactions - Nine
Months Ended December 31, 1997
2. Exhibits:
a. Consent of Independent Public Accountants--Arthur Andersen LLP
3
<PAGE> 4
THE MAXIM GROUP 401(K) PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1997 AND MARCH 31, 1997
TOGETHER WITH
AUDITORS' REPORT
<PAGE> 5
THE MAXIM GROUP 401(K) PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997 AND MARCH 31, 1997
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statement of Net Assets Available for Benefits, With Fund
Information--December 31, 1997
Statement of Net Assets Available for Benefits, With Fund
Information--March 31, 1997
Statement of Changes in Net Assets Available for Benefits, With Fund
Information, for the Nine Months Ended December 31, 1997
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a--Schedule of Assets Held for Investment
Purposes--December 31, 1997
Schedule II: Item 27b--Schedule of Loans in Default--December 31, 1997
Schedule III: Item 27d--Schedule of Reportable Transactions for the
Nine Months Ended December 31, 1997
<PAGE> 6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
The Maxim Group, Inc.:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of THE MAXIM GROUP 401(K) PLAN as of December
31, 1997 and March 31, 1997 and the related statement of changes in net assets
available for benefits, with fund information, for the nine months ended
December 31, 1997. These financial statements and the schedules referred to
below are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and schedules 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 Maxim Group
401(k) Plan as of December 31, 1997 and March 31, 1997 and the changes in its
net assets available for benefits for the nine months 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 of assets held
for investment purposes, loans in default and reportable transactions 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 Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for the purpose of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available
<PAGE> 7
- 2 -
for benefits of each fund. The supplemental schedules and the 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.
As explained in the notes thereto, information presented in the schedules of
assets held for investment purposes and reportable transactions does not contain
the historical cost of certain investments. Disclosure of this information is
required by the Department of Labor Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
/S/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
June 24, 1998
<PAGE> 8
THE MAXIM GROUP 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
-----------------------------------------------------------------------------
FEDERAL
THE MAXIM GLOBAL SECURITIES RETIREMENT
GROUP, INC. GROWTH ALLOCATION TRUST CAPITAL PRESERVATION
STOCK FUND FUND FUND FUND FUND TRUST FUND
---------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, AT FAIR VALUE (NOTES 1 AND 3):
The Maxim Group, Inc. common stock $2,202,603 $ 0 $ 0 $ 0 $ 0 $ 0
Mutual funds 0 1,436,553 819,449 204,056 876,132 0
Investments at contract value:
Collective trust 0 0 0 0 0 185,022
Loans to participants 0 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ------------
Total investments 2,202,603 1,436,553 819,449 204,056 876,132 185,022
CASH 0 0 0 0 0 0
PARTICIPANT CONTRIBUTIONS
RECEIVABLE 0 0 0 0 0 0
EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $2,202,603 $1,436,553 $ 819,449 $ 204,056 $ 876,132 $ 185,022
========== ========== ========== ========== ========== ============
<CAPTION>
PARTICIPANT-DIRECTED
----------------------------------------------------
QUEST FOR
VALUE EQUITY EMERGING
OPPORTUNITY INTERNATIONAL CONSTELLATION GROWTH PARTICIPANT
FUND EQUITY FUND FUND FUND LOANS OTHER TOTAL
----------- ------------- ------------- --------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS, AT FAIR VALUE (NOTES 1 AND 3):
The Maxim Group, Inc. common stock $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $2,202,603
Mutual funds 112,359 30,403 54,244 108,911 0 0 3,642,107
Investments at contract value:
Collective trust 0 0 0 0 0 0 185,022
Loans to participants 0 0 0 0 137,003 0 137,003
----------- ------------ ------------- --------- ----------- ------- ----------
Total investments 112,359 30,403 54,244 108,911 137,003 0 6,166,735
CASH 0 0 0 0 0 303 303
PARTICIPANT CONTRIBUTIONS
RECEIVABLE 0 0 0 0 0 11,930 11,930
EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 59,931 59,931
----------- ------------ ------------- --------- ----------- ------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $ 112,359 $ 30,403 $ 54,244 $ 108,911 $ 137,003 $72,164 $6,238,899
=========== ============ ============= ========= =========== ======= ==========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 9
THE MAXIM GROUP 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
MARCH 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
---------------------------------------------------------------------------------------
FEDERAL QUEST FOR
THE MAXIM GLOBAL SECURITIES RETIREMENT VALUE
GROUP, INC. GROWTH ALLOCATION TRUST CAPITAL PRESERVATION OPPORTUNITY
STOCK FUND FUND FUND FUND FUND TRUST FUND FUND
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS, AT FAIR VALUE (NOTES 1 AND 3):
The Maxim Group, Inc. common stock $1,595,670 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Mutual funds 0 1,192,835 690,345 141,250 679,851 0 2,853
Money market fund 0 0 0 0 0 0 0
INVESTMENTS, AT CONTRACT VALUE:
Collective trust 0 0 0 0 0 0 0
Loans to participants 0 0 0 0 0 399,442 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total investments 1,595,670 1,192,835 690,345 141,250 679,851 399,442 2,853
ACCRUED INTEREST 0 0 0 0 0 0 0
PARTICIPANT CONTRIBUTIONS
RECEIVABLE 0 0 0 0 0 0 0
EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0 0
DUE FROM BROKER 0 0 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,595,670 $1,192,835 $ 690,345 $ 141,250 $ 679,851 $ 399,442 $ 2,853
========== ========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
------------------------------------------
EQUITY EMERGING
INTERNATIONAL CONSTELLATION GROWTH PARTICIPANT
EQUITY FUND FUND FUND LOANS OTHER TOTAL
----------- ----------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, AT FAIR VALUE (NOTES 1 AND 3):
The Maxim Group, Inc. common stock $ 0 $ 0 $ 0 $ 0 $ 0 $1,595,670
Mutual funds 11,194 7,074 12,135 0 0 2,737,537
Money market fund 0 0 0 0 313,575 313,575
INVESTMENTS, AT CONTRACT VALUE:
Collective trust 0 0 0 105,675 0 105,675
Loans to participants 0 0 0 0 0 399,442
----------- ----------- ----------- ---------- -------- ----------
Total investments 11,194 7,074 12,135 105,675 313,575 5,151,899
ACCRUED INTEREST 0 0 0 0 596 596
PARTICIPANT CONTRIBUTIONS
RECEIVABLE 0 0 0 0 64,739 64,739
EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 0 12,274 12,274
DUE FROM BROKER 0 0 0 0 30,620 30,620
----------- ----------- ----------- ---------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $ 11,194 $ 7,074 $ 12,135 $ 105,675 $421,804 $5,260,128
=========== =========== =========== ========== ======== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 10
THE MAXIM GROUP 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND
INFORMATION,
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
---------------------------------------------------------------------
FEDERAL
THE MAXIM GLOBAL SECURITIES
GROUP, INC. GROWTH ALLOCATION TRUST CAPITAL
STOCK FUND FUND FUND FUND FUND
----------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions:
Deferrals $ 169,175 $ 174,140 $ 109,829 $ 25,078 $ 110,286
Rollovers 2,855 1,034 1,293 0 0
----------- ----------- --------- --------- ---------
Total participant contributions 172,030 175,174 111,122 25,078 110,286
----------- ----------- --------- --------- ---------
Employer contributions, net of forfeitures 31,963 32,875 21,412 5,089 21,909
----------- ----------- --------- --------- ---------
Investment income:
Dividends 0 106,460 97,111 8,276 67,513
Interest 1,090 1,437 842 73 549
Net appreciation (depreciation) in fair
value of investments 344,338 105,304 (36,512) 5,749 69,883
----------- ----------- --------- --------- ---------
Total investment income 345,428 213,201 61,441 14,098 137,945
----------- ----------- --------- --------- ---------
Total additions 549,421 421,250 193,975 44,265 270,140
DEDUCTIONS:
Benefits paid to participants (199,645) (134,057) (52,626) (21,131) (66,730)
LOANS ISSUED TO PARTICIPANTS (25,256) (32,642) (12,014) (9,240) (27,400)
LOAN PRINCIPAL PAYMENTS 43,887 9,059 6,341 306 1,628
INTERFUND TRANSFERS 238,526 (19,892) (6,572) 48,606 18,643
----------- ----------- --------- --------- ---------
NET INCREASE (DECREASE) 606,933 243,718 129,104 62,806 196,281
TRANSFER IN FROM OTHER PLAN (NOTE 1) 0 0 0 0 0
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of the year 1,595,670 1,192,835 690,345 141,250 679,851
----------- ----------- --------- --------- ---------
End of the year $ 2,202,603 $ 1,436,553 $ 819,449 $ 204,056 $ 876,132
=========== =========== ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
-------------------------------------------------------------------
QUEST FOR
RETIREMENT VALUE EQUITY EMERGING
PRESERVATION OPPORTUNITY INTERNATIONAL CONSTELLATION GROWTH PARTICIPANT
TRUST FUND VALUE FUND EQUITY FUND FUND FUND LOANS
------------ ----------- ------------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions:
Deferrals $ 24,525 $ 15,968 $ 10,783 $ 7,679 $ 20,360 $ 0
Rollovers 33,167 17,764 0 0 1,034 0
--------- --------- -------- -------- --------- ---------
Total participant contributions 57,692 33,732 10,783 7,679 21,394 0
--------- --------- -------- -------- --------- ---------
Employer contributions, net of forfeitures (39,898) 3,093 2,034 1,241 3,179 0
--------- --------- -------- -------- --------- ---------
Investment income:
Dividends 10,589 3,325 5,304 3,709 929 0
Interest 233 85 27 1 82 0
Net appreciation (depreciation) in fair
value of investments 0 (337) (9,168) (4,081) 3,711 0
--------- --------- -------- -------- --------- ---------
Total investment income 10,822 3,073 (3,837) (371) 4,722 0
--------- --------- -------- -------- --------- ---------
Total additions 28,616 39,898 8,980 8,549 29,295 0
DEDUCTIONS:
Benefits paid to participants (11,847) (1,102) (83) (2,038) (4,438) (10,318)
LOANS ISSUED TO PARTICIPANTS (10,656) (23) (26) (6) (11) 117,274
LOAN PRINCIPAL PAYMENTS 509 4,685 63 4,472 4,678 (75,628)
INTERFUND TRANSFERS (428,460) 66,048 10,275 36,193 67,252 0
--------- --------- -------- -------- --------- ---------
NET INCREASE (DECREASE) (421,838) 109,506 19,209 47,170 96,776 31,328
TRANSFER IN FROM OTHER PLAN (NOTE 1) 207,418 0 0 0 0 0
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of the year 399,442 2,853 11,194 7,074 12,135 105,675
--------- --------- -------- -------- --------- ---------
End of the year $ 185,022 $ 112,359 $ 30,403 $ 54,244 $ 108,911 $ 137,003
========= ========= ======== ======== ========= =========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
-------------------------
OTHER TOTAL
--------- -----------
<S> <C> <C>
ADDITIONS:
Participant contributions:
Deferrals $ (4,808) $ 663,015
Rollovers (5,235) 51,912
--------- -----------
Total participant contributions (10,043) 714,927
--------- -----------
Employer contributions, net of forfeitures (344) 82,553
--------- -----------
Investment income:
Dividends (596) 302,620
Interest 0 4,419
Net appreciation (depreciation) in fair
value of investments 0 478,887
--------- -----------
Total investment income (596) 785,926
--------- -----------
Total additions (10,983) 1,583,406
DEDUCTIONS:
Benefits paid to participants (308,038) (812,053)
LOANS ISSUED TO PARTICIPANTS 0 0
LOAN PRINCIPAL PAYMENTS 0 0
INTERFUND TRANSFERS (30,619) 0
--------- -----------
NET INCREASE (DECREASE) (349,640) 771,353
TRANSFER IN FROM OTHER PLAN (NOTE 1) 0 207,418
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of the year 421,804 5,260,128
--------- -----------
End of the year $ 72,164 $ 6,238,899
========= ===========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 11
THE MAXIM GROUP 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997 AND MARCH 31, 1997
1. DESCRIPTION OF PLAN
The following description of The Maxim Group 401(k) Plan (the "Plan")
is provided for informational purposes only. Participants should refer
to the plan document for more complete information.
GENERAL
The Plan is a defined contribution plan covering substantially all
employees of The Maxim Group, Inc. and its wholly owned subsidiaries
(the "Company"). The Plan was adopted effective April 1, 1994 and is
subject to the Employee Retirement Income Security Act of 1974
("ERISA"), as amended. Employees are eligible to participate in the
Plan after attaining age 21 and completing one year of service.
Effective January 1, 1998, the Plan has been amended to change the
eligibility service requirement from one year to six months. Plan entry
dates are the first day of each calendar quarter. Effective April 1,
1997, the Plan was amended to change plan entry dates to the first day
of each month.
Merrill Lynch Trust Company ("Merrill Lynch") acts as trustee and
custodian for the Plan.
Effective July 1, 1997, the assets of a 401(k) plan sponsored by Bailey
& Roberts Flooring, Inc. were merged into the Plan.
CONTRIBUTIONS
Participants can elect to contribute up to 20% of their pretax
compensation to the Plan, subject to certain limitations of the
Internal Revenue Code. The Company may provide a discretionary matching
contribution up to 25% of the first 6% of compensation that a
participant defers as a pretax contribution. For the nine months ended
December 31, 1997, the Company matched at this rate.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution, the Company's matching contribution, and an allocation of
investment earnings. Investment earnings are allocated to participants
based on proportionate account balances in individual investment funds.
<PAGE> 12
-2-
VESTING
Participants are 100% vested in their own pretax contributions. After
one year of employment, participants vest ratably over five years in
the Company's matching contributions such that they become fully vested
after six years of service.
Participants become fully vested upon death, disability, or reaching
normal (65) or early retirement age (55).
FORFEITURES
Terminated participants' nonvested balances are forfeited and used to
reduce future matching contributions of the Company. Unused forfeitures
at December 31, 1997 and March 31, 1997 were $28,955 and $47,213,
respectively, and are included in the Retirement Preservation Trust
Fund in the accompanying financial statements. Forfeitures used in this
manner totaled $45,068 for the nine months ended December 31, 1997.
PAYMENT OF BENEFITS
A participant or his/her beneficiary may elect to receive a lump-sum
distribution equal to the value of his/her vested account balance upon
retirement, disability, death, termination of employment, or
termination of the Plan. If the participant's account balance is less
than $3,500, a lump-sum distribution is made after termination of
service. In-service withdrawals may be made in the event of financial
hardship, as defined in the plan document, or upon attainment of age 59
1/2.
INVESTMENT OPTIONS
Each participant in the Plan may elect to have contributions invested
in any one or combination of the investment options listed below.
Changes in investment elections and transfers among options may be made
on a daily basis.
THE MAXIM GROUP, INC. STOCK FUND
This fund invests exclusively in the common stock of the
Company.
GROWTH FUND
This fund invests in the Merrill Lynch Growth Fund, a mutual
fund which primarily invests in the equity securities of
companies that are considered in the opinion of the mutual
fund's management to be undervalued.
GLOBAL ALLOCATION FUND
This fund invests in the Merrill Lynch Global Allocation Fund,
a mutual fund which invests in U.S. and foreign equity, debt,
and money market securities. The mutual fund may invest up to
35% of its total assets in noninvestment-grade debt
securities.
<PAGE> 13
- 3 -
FEDERAL SECURITIES TRUST FUND
This fund invests in the Merrill Lynch Federal Securities
Trust, a mutual fund which invests primarily in U.S.
government and agency securities, including mortgage-backed
securities. This mutual fund may use strategies which would
include options and futures transactions.
CAPITAL FUND
This fund invests in the Merrill Lynch Capital Fund, a mutual
fund which invests in stocks, corporate bonds, and cash
equivalents, and may invest up to 25% of its assets in foreign
securities.
RETIREMENT PRESERVATION TRUST FUND
This fund invests in a collective Merrill Lynch trust which
invests in guaranteed investment contracts and U.S. government
and government agency securities. The objective of this trust
is to provide preservation of capital and liquidity and
current income at levels typically higher than money market
funds.
QUEST FOR VALUE OPPORTUNITY FUND
This fund invests in the Oppenheimer Quest Funds: Opportunity
Value Fund, a mutual fund which seeks growth of capital over
time through a diversified mix of common and convertible
stocks, bonds, and money market instruments.
INTERNATIONAL EQUITY FUND
This fund invests in the Merrill Lynch International Equity
Fund, a mutual fund which seeks capital appreciation and,
secondarily, income through investment in a diversified
portfolio of equity securities of issues located in countries
other than the United States. The mutual fund may seek to
hedge its portfolio through the use of options and futures.
EQUITY CONSTELLATION FUND
This fund invests in the AIM Constellation Fund, a mutual fund
that seeks capital appreciation through investment in common
stocks, with an emphasis on medium-sized and smaller
emerging-growth companies.
EMERGING GROWTH FUND
This fund invests in the MFS Emerging Growth Fund, a mutual
fund that seeks long-term growth of capital through investment
in the common stocks of small and medium-sized companies early
in their life cycles. The mutual fund is permitted to invest
in foreign securities as well as derivative securities.
<PAGE> 14
- 4 -
OTHER
Unallocated participant funds are held in a money market fund until
they can be invested or disbursed in accordance with the terms of the
Plan and/or participant elections.
PARTICIPANT LOANS
Participants may borrow funds from their accounts, subject to certain
limitations (generally the lesser of 50% of the participant's vested
account balance or $50,000). Repayment of loans must be made at least
quarterly and must be completed within five years, unless the loan was
for the purchase of a residence.
PLAN TERMINATION
Although the Company has not expressed any intent to do so, it has the
right to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event the Plan
terminates, each participant shall become fully vested in his/her
account balances as of the termination date.
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the accrual
basis of accounting. The Plan was amended during the plan year to
change the plan year-end to December 31. Therefore, the accompanying
statement of changes in net assets available for benefits, with fund
information, is for the nine months ended December 31, 1997.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan's management to use
estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from these
estimates.
INVESTMENTS
Investments, with the exception of the Merrill Lynch Retirement
Preservation Trust and participant loans, are recorded at fair value as
determined by quotations of national securities exchanges. Purchases
and sales of investment securities are recorded on a trade date basis.
American Institute of Certified Public Accountants Statement of
Position, "Reporting of Investment Contracts Held by Health and Welfare
Benefit Plans and Defined Contribution Pension Plans," permits
reporting of investment contracts that are fully benefit-responsive at
contract value. The Plan's investment in the Merrill Lynch Retirement
Preservation Trust, a collective trust which invests in guaranteed
investment contracts, is fully
<PAGE> 15
- 5 -
benefit-responsive and is presented at contract value in the
accompanying statements of net assets available for benefits, with
fund information.
3. INVESTMENTS
The following investments represent 5% or more of the Plan's net assets
as of December 31, 1997 and March 31, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, March 31,
1997 1997
----------- ----------
<S> <C> <C>
The Maxim Group, Inc. common stock $ 2,202,603 $1,595,670
Merrill Lynch Growth Fund (Class D) 1,436,553 1,192,835
Merrill Lynch Global Allocation Fund (Class D) 819,449 690,345
Merrill Lynch Capital Fund (Class D) 876,132 679,851
Merrill Lynch Retirement Preservation Trust 185,022 399,442
Merrill Lynch CMA Money Fund 0 313,575
</TABLE>
The net appreciation in fair value of investments by type of investment
for the nine months ended December 31, 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Common stock $344,338
Mutual funds 134,549
--------
$478,887
========
</TABLE>
4. TAX STATUS
The Plan received a favorable determination letter from the Internal
Revenue Service on November 1, 1995 stating that the Plan was designed
in accordance with applicable Internal Revenue Code requirements. The
Plan has been amended since receiving the letter; however, the plan
administrator believes that the Plan is currently designed and is being
operated in compliance with the applicable requirements of the Internal
Revenue Code. Therefore, the plan administrator believes that the Plan
was qualified and the related trust was tax-exempt as of December 31,
1997 and March 31, 1997.
5. SUBSEQUENT EVENT
Effective July 1, 1998, the Plan's trustee and custodian will change
from Merrill Lynch Trust Company to Prudential Investments. Prudential
Investments Retirement Services will provide administration and
record-keeping services for the Plan.
Also effective July 1, 1998, 100% of the employer matching
contributions will be contributed to The Maxim Group, Inc. Stock Fund.
<PAGE> 16
SCHEDULE I
THE MAXIM GROUP 401(K) PLAN
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
CURRENT
DESCRIPTION OF INVESTMENT COST VALUE
- ------------------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
COMMON STOCK:
* The Maxim Group, Inc., 141,537.2705 shares (a) $2,202,603
MUTUAL FUNDS:
* Merrill Lynch Growth Fund, 50,299.4606 Class D shares $1,320,713 1,436,553
* Merrill Lynch Global Allocation Fund, 57,993.5851 Class D
shares 872,896 819,449
* Merrill Lynch Federal Securities Trust Fund, 20,928.7915
Class D shares 200,301 204,056
* Merrill Lynch Capital Fund, 25,424.5979 Class D shares 802,456 876,132
* Merrill Lynch Retirement Preservation Trust, 185,021.9200 185,022 185,022
units
* Merrill Lynch International Equity Fund, 3,470.6217 Class D
shares 40,288 30,403
MFS Emerging Growth Fund, 3,010.2546 Class A shares 109,195 108,911
Oppenheimer Quest Funds--Opportunity Value Fund,
3,172.2011 Class A shares 112,945 112,359
AIM Constellation Fund, 2,056.2608 Retail A shares 59,287 54,244
* LOANS TO PARTICIPANTS, WITH INTEREST RATES RANGING FROM
8.25% TO 8.5% 137,003 137,003
----------
$6,166,735
==========
</TABLE>
*Represents a party in interest.
(a) Historical cost information has been requested
from, but is unable to be provided by, the
custodian.
The accompanying notes are an integral part of this schedule.
<PAGE> 17
SCHEDULE II
THE MAXIM GROUP 401(K) PLAN
ITEM 27B--SCHEDULE OF LOANS IN DEFAULT
DECEMBER 31, 1997
<TABLE>
<CAPTION>
AMOUNT
RECEIVED DURING UNPAID
ORIGINAL REPORTING YEAR BALANCE AMOUNT OVERDUE
AMOUNT OF ------------------- AT END OF --------------------
IDENTITY OF OBLIGOR LOAN PRINCIPAL INTEREST YEAR DETAILED DESCRIPTION OF LOANS PRINCIPAL INTEREST
- -------------------------------- --------- --------- -------- --------- ------------------------------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
* PLAN PARTICIPANT $2,500 $89 $32 $2,411 Issued July 14, 1997; maturity $2,411 $ 0
date March 21, 2001, interest
rate 8.5%
</TABLE>
*Represents a party-in-interest transaction.
The accompanying notes are an integral part of this schedule.
<PAGE> 18
SCHEDULE III
THE MAXIM GROUP 401(K) PLAN
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS (A)
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PURCHASE SALES
-------------------------- ---------------------------------------------
NUMBER OF NUMBER OF SELLING
DESCRIPTION OF ASSETS TRANSACTIONS COST TRANSACTIONS PRICE COST NET GAIN
- ----------------------------------------------- --------------- -------- ------------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK:
* The Maxim Group, Inc. common stock 84 $582,961 97 $308,183 (b) (b)
MUTUAL FUNDS:
* Merrill Lynch Growth Fund--Class D 80 385,228 85 245,353 $208,170 $37,184
* Merrill Lynch Global Allocation Fund--Class D 68 293,724 77 127,296 122,039 5,257
* Merrill Lynch Capital Fund--Class D 62 245,848 72 117,693 106,456 11,237
COLLECTIVE TRUST:
* Merrill Lynch Retirement Preservation Trust 113 308,560 38 522,980 522,980 0
</TABLE>
*Represents a party in interest.
(a) Represents a transaction or a series of transactions in excess of 5% of
the current value of plan assets as of the beginning of the year.
(b) Historical cost for these assets has been requested from, but is unable
to be provided by, the custodian.
The accompanying notes are an integral part of this schedule.
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan has caused this annual report to be signed on the 26th day of June,
1998, by the undersigned thereunto duly authorized.
THE MAXIM GROUP, INC. 401(k) PLAN
By: /s/ Thomas P. Leahey
----------------------------------------------
Thomas P. Leahey
Executive Vice President, Finance
(Plan Administrator)
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report, dated June 24, 1998 which appears in Exhibit 99 of
this amendment No. 1 to the Annual Report on Form 10-K/A for the fiscal year
ended January 31, 1998 of The Maxim Group, Inc. into the Company's previously
filed Registration Statements on Form S-8 (File Nos. 33-80984, 33-81002,
333-19691, 333-19693 and 333-47299).
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 24, 1998
