SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
------------------------------
(X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 19951996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________to _________
------------------------------
Commission File Number 2-27985
1st FRANKLIN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 58-0521233
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
213 East Tugalo Street
Post Office Box 880
Toccoa, Georgia 30577
(Address of principal executive offices)
Registrant's telephone number, including area code: (706) 886-7571
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
(Cover page 1 of 2 pages)
State the aggregate market value of the voting stock held by nonaffiliatednon-
affiliated of the Registrant: Not Applicable.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
Class Outstanding at February 28, 19961997
------------------------------------- --------------------------------
Voting
Common Stock, $100 Par Value 1,700 shares
Non-Voting Common Stock, No Par Value 168,201 shares168,300 Shares
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Registrant's Annual Report to security holders for the
fiscal year ended December 31, 19951996 are incorporated by reference into Parts
I, II and IV of this Form 10-K.
(Cover page 2 of 2 pages)
PART I
Item 1. BUSINESS:
The Company, Page 1; Business, Pages 5 - 12; and Financial Statements,
Pages 18-3017-30 of Registrant's Annual Report to security holders for the
fiscal year ended December 31, 19951996 are incorporated herein by
reference.
Item 2. PROPERTIES:
ParagraphMap on inside front cover; paragraph 1 of The Company, Page 1;
Footnote 7 (Commitments) of Notes to Consolidated Financial
Statements, Page 28; and map on back
cover28 of Registrant's Annual Report to security holders
for the fiscal year ended December 31, 19951996 are incorporated herein by
reference.
Item 3. LEGAL PROCEEDINGS:
The Company has been named as defendant in the following legal
proceedings in the state of Alabama:
Debra Underwood v. 1st Franklin Financial Corporation, et al.;
Filed in the Court of Chilton County, Alabama;
Civil Action No. CV-96-001-R.
This lawsuit was filed in January 1, 1996. The plaintiffs
allege that the Company required them to purchase credit life
insurance before extending a loan to them. The plaintiffs
allege that, in so requiring, the Company violated the Alabama
Mini-Code, committed fraudulent misrepresentation and
suppression, and engaged in a conspiracy. Plaintiffs also
allege that the Company and the other defendants fraudulently
suppressed the costs of refinancing their existing loan. At
the present, it is too early to reach any type of informed
assessment of the liability of the case. The case is being
vigorously defended.
Annie Liptrot, et al. v 1st Franklin Financial Corporation,
et al.; Filed in the United States District Court for the Middle
District of Alabama; Civil Action No. CV-95-T-1656-N.
This lawsuit was filed November 28, 1995 as a putative
statewide class action, in which the plaintiff alleges that
the Company has violated the Alabama Mini-Code and committed
fraud arising out of the sale of credit life insurance. At
the present, it is too early to reach any type of informed
assessment of the liability of the case. The case is being
vigorously defended.
Earnestine B. Simmons v. 1st Franklin Financial, et al.; Filed
January, 1996 in Superior Court for Dougherty County, Georgia;
Civil Action No. 96-CV-020
This class action case seeks recovery for alleged violations
of fraud and deceit, breach of contract and violations under
the Georgia RICO act arising out of the sale of non-filing
and personal property insurance. At the present, it is too
early to reach any type of informed assessment of the
liability of the case. The case is being vigorously defended.
-1-
During recent months, the Company entered into settlement agreements
with certain borrowers who had previously asserted claims against the
Company. Although the Company and its employees deny that they are
guilty of any wrongdoing or any breach of any legal obligation or duty
to the Claimants, in recognition of the expense and uncertainty of
litigation, Management felt it was in the best interest of the Company
to dispose of these cases. The following cases previously reported
have been disposed of:
Mose BurksCarl J. White v. 1st Franklin Financial, et al.; Filed May, 1994, in the Circuit
Court of BarbourTalladega County, Alabama, Clayton Division; Civil Action No. CV-94-084;CV-94-374;
previously disclosed in the Company's Form 10-K for the period ended
December 31, 1994. The case was settled on December 29, 1995.
Karen HilliaryNovember 26, 1996.
Princess Nobels, et al. v. 1st Franklin Financial,, et al.; Filed September, 1994 in the CircuitUnited
States District Court for the Middle District of Bullock County, Alabama;Alabama, Southern
Division; Civil Action No. CV-94-92;CV-94-T-699-N; previously disclosed in the
Company's Form 10-K for the period ended December 31, 1994. The case
was settled on December 29, 1995.
Vicie Davisduring February 1997.
Annie Liptrot, et al. v. 1st Franklin Financial Corporation, et al.;
Originally filed on May 11, 1995Filed in Circuitthe United States District Court for the Middle District of Barbour
County,
Alabama; Civil Action No. CV-95-0139;CV-95-T-1656-N; previously disclosed in the
Company's Form 10-K for the period ended December 31, 1995. The case
was settled during March 1997.
Timothy Anthony and Sandrea M. Anthony vs 1st Franklin Financial
Corporation,et al.; Filed in the United States District Court for
the Middle District of Alabama, Northern Division, Civil Action No.
CV-95-D-479-N; previously reported in the Company's Form 10-Q for the
period ended JuneSeptember 30, 1995. The case was settled during February, 1996.
Corinthia Holman v. 1st Franklin Financial Corporation,March
1997.
Dorothy McCurdy vs American General Finance, Inc.; et al.; Filed May 11, 1995 in
the CircuitU.S. District Court for the Middle District of Barbour County,
Alabama;Alabama, Northern
Division, Civil Action No. CV-95-0142;95-D-1291-N; previously disclosedreported in the
Company's Form 10-Q for the period ended JuneSeptember 30, 1995. The case
was settled during February, 1996.
Teri Foster v. 1st Franklin Financial Corporation, et al.;
Filed May 11, 1995 in the Circuit Court of Barbour County,
Alabama; Civil Action No. CV-95-0123; previously disclosed in
the Company's Form 10-Q for the period ended June 30, 1995. The
case was settled during February, 1996.
Nine other cases in Alabama, similar in nature to the
aforementioned, were filed during January and February, 1996.
The Company settled all of these during the first quarter
of 1996.March 1997.
Other than ordinary routine litigation incidental to the finance
business, there are no other material pending legal proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
-2--1-
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS:
Source of Funds, Page 12 of Registrant's Annual Report to security
holders for the fiscal year ended December 31, 19951996 is incorporated
herein by reference.
Item 6. SELECTED FINANCIAL DATA:
Selected Consolidated Financial Information, Page 4 of Registrant's
Annual Report to security holders for the fiscal year ended December
31, 19951996 is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
Management's Discussion of Operations, Pages 13 - 1516 of Registrant's
Annual Report to security holders for the fiscal year ended December
31, 19951996 is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
Pages 1817 - 30 of Registrant's Annual Report to security holders for
the fiscal year ended December 31, 19951996 are incorporated herein by
reference.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:
Not applicable.
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Forward Looking Statements:
The statements contained herein under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Market for the
Registrant's Common Stock and Related Stockholders' Matters" and elsewhere in
this Annual Report on Form 10-K constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance, or achievements
of the Company to be materially different from any future results,
performance, or materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, business the ability to manage cash flow
and working capital, and other factors referenced elsewhere herein.
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PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
DIRECTORS
Director Since
and
Date on Which Position
Name of Director Age Term Will Expire With Company
---------------- --- ---------------- ------------
W. Richard Acree (1)(2) 6869 Since 1970; None
When successor
elected and qualified
Ben F. Cheek, III (3)(4)(5) 5960 Since 1967; Chairman of
When successor Board
elected and qualified
Lorene M. Cheek (2)(4)(6) 8687 Since 1946; None
When successor
elected and qualified
Jack D. Stovall (1)(2) 6061 Since 1983; None
When successor
elected and qualified
Robert E. Thompson (1)(2) 6465 Since 1970; None
When successor
elected and qualified
_______________________________________________________________________
(1) Member of Audit Committee.
(2) Mr. Acree is President of Acree Oil Company, a distributor of
petroleum products in Northeast Georgia; Mrs. Cheek is an honorary
member of the Board of Trustees of Tallulah Falls School;
Dr. Thompson is a physician at Toccoa Clinic; and Mr. Stovall is
President of Stovall Building Supplies, Inc. These positions have
been held by each respective Director for more than five years.
(3) Reference is made to the business experience of executive officers of
the Company as detailed below.
(4) Member of Executive Committee.
(5) Son of Lorene M. Cheek.
(6) Mother of Ben F. Cheek, III.
-4--3-
EXECUTIVE OFFICERS
Name, Age, Position
and Family Relationship Business Experience
- ----------------------- -----------------------------------------------------------------
Ben F. Cheek, III, 5960 Joined the Company in 1961 as attorney and became
Chairman of Board became Vice President in 1962, President in 1972 and
Chairman of Board in 1989.
T. Bruce Childs, 5960 Joined the Company in 1958 and was named Vice
President President in charge of Operations in 1973 and
No Family Relationship President in 1989.
Lynn E. Cox, 3839 Joined the Company in 1983 and became Secretary
Secretary in 1989.
No Family Relationship
A. Roger Guimond, 4142 Joined the Company in 1976 as an accountant and
Vice President and became Chief Accounting Officer in 1978, Chief
Chief Financial Officer Financial Chief Financial Officer Officer in 1991
No Family Relationship and Vice President in No Family Relationship 1992.
Linda L. Sessa, 4142 Joined the Company in 1984 and became Treasurer
Treasurer in 1989.
No Family Relationship
The term of office of each Executive Officer expires when a successor
is elected and qualified. There was no, nor is there presently any
arrangement or understanding between any officer and any other person
(except directors or officers of the registrant acting solely in
their capacities as such) pursuant to which the officer was selected.
No event such as bankruptcy, criminal proceedings or securities
violation proceeding has occurred within the past 5 years with regard
to any Director or Executive Officer of the Company.
-5--4-
Item 11. EXECUTIVE COMPENSATION:
(b) Summary Compensation Table:
Other All
Name Annual Other
and Compen- Compen-
Principal Salary Bonus sation sation
Position Year $ $ $ $ *
-------- ---- ------- ------- ------------- -------
Ben F. Cheek, III 1996 252,000 217,932 3,431 98,366
Chairman and 1995 240,000 220,466 3,033 146,114
Chairman andCEO 1994 228,000 189,693 2,760 38,594
CEO 1993 216,000 154,653 2,867 44,26834,268
T. Bruce Childs 1996 246,000 217,692 3,179 87,633
President 1995 228,000 219,986 4,236 130,447
President 19931994 210,000 188,973 4,682 31,071
1992 194,000 153,773 7,179 38,574
A. Roger Guimond 1996 132,000 74,362 1,650 29,589
Vice President 1995 120,000 74,816 1,650 40,959
Vice Presidentand CFO 1994 108,000 62,174 1,650 17,945
and CFO 1993 96,000 36,790 1,650 15,354
* Represents Company contributions to profit-sharing plan, and reported
compensation from premiums on life insurance policies for the benefit of
Ben F. Cheek, III in the amount of $4,931 for 1996, $4,425 for 1995 and
$3,816 for 1994 and
$5,984 for 1993.1994. Includes Company contributions to profit-sharing plan
for the benefit of T. Bruce Childs. Also represents contributions to
profit-sharing plan, and reported compensation from premiums on a life
insurance policy for the benefit of A. Roger Guimond in the amount of
$574 for 1995.
(g) Compensation of Directors:
Directors who are not employees of the Company receive $1,000 per year
for attending scheduled board meetings.
(k) Board Compensation Committee Report on Executive Compensation:
The Company has no official executive compensation committee. Ben F.
Cheek, III (Chairman of the Company) establishes the bases for all
executive compensation. The Company is a family owned business with Ben
F. Cheek, III being the majority stockholder.
-6--5-
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners as of March 26, 1996:January 1, 1997:
Name and Address of Amount and Nature of Percent
Beneficial Owner Title of Class Beneficial Ownership Of Class
-------------------- ---------------------- -------------- --------------------- --------
Ben F. Cheek, III Voting Common 1,160 Shares - Direct 68.24%
225 Valley Drive
Toccoa, Georgia 30577
John Russell Cheek Voting Common 441 Shares - Direct 25.94%
181 Garland Road
Toccoa, Georgia 30577
(b) Security Ownership of Management as of March 26, 1996:January 1, 1997:
Ownership listed below represents ownership in 1st Franklin Financial
Corporation, of (i) Directors and named Executive Officers of the
Company and (ii) all Directors and Executive Officers as a group:
Amount and Nature of Percent
Name Title of Class Beneficial Ownership Of Class
---- -------------- -------------------- ---------------
Ben F. Cheek, III Voting Common Stock 1,160 Shares - Direct 68.24%
Non-Voting Common Stock 114,840 Shares (1) 68.24%
T. Bruce Childs Voting Common Stock None None
Non-Voting Common Stock None None
A. Roger Guimond Voting Common Stock None None
Non-Voting Common Stock None None
__________________________________________
All Directors and
Executive Officers
as a Group Voting Common Stock 1,160 Shares - Direct 68.24%
Non-Voting Common Stock 114,840 Shares (1) 68.24%
(1) Such sharesEffective January 1, 1997, the Company elected S Corporation status for
income tax reporting purposes for the Company. Because partnerships are
owned byineligible as S Corporation shareholders, Cheek Investments, L.P.,
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distributed its shares of whichthe Company to its eight partners (six trusts,
Ben F. Cheek, III and hisElizabeth Cheek, wife of Ben F. Cheek,III). Ben
F. Cheek, III and Elizabeth Cheek are grantors of the general partners.trust. Below is a
recap of ownership in non-voting common stock attributable to Ben F.
Cheek, III:
No Of
Name Shares Percentage
---- ------ ----------
Ben F. Cheek, III 574 .34%
Elizabeth Cheek 574 .34%
Ben Cheek Trust A (f/b/o Ben F. Cheek, IV) 18,949 11.26%
Ben Cheek Trust B (f/b/o Virginia C. Herring) 18,949 11.26%
Ben Cheek Trust C (f/b/o David W. Herring) 18,949 11.26%
Elizabeth Cheek Trust A (f/b/o Ben F. Cheek, IV) 18,949 11.26%
Elizabeth Cheek Trust B (f/b/o Virginia C. Herring) 18,948 11.26%
Elizabeth Cheek Trust C (f/b/o David W. Cheek) 18,948 11.26%
------- -----
114,840 68.24%
======= =====
(c) The Company knows of no contractual arrangements which may at a
subsequent date result in a change in control of the Company.
-7-
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Company leases its Home Office building and print shop for a
total of $12,600 per month from Franklin Enterprises, Inc. under
leases which expire December 31, 2004. Franklin Enterprises, Inc.
is 66.67% owned by Ben F. Cheek, III, a director and executive
officer of the Company. In Management's opinion, these leases are
at rates which approximate those obtainable from independent third
parties.
Beneficial owners of the Company are also beneficial owners of
Liberty Bank & Trust ("Liberty"). The Company and Liberty have
management and data processing agreements whereby the Company
provides certain administrative and data processing services to
Liberty for a fee. Income recorded by the Company during the three
year period ended December 31, 19951996 related to these agreements was
$63,800 per year which in Management's opinion approximates the
Company's actual cost of these services.
Liberty leases its office space and equipment from the Company for
$4,200 per month, which in Management's opinion is at a rate which
approximates that obtainable from independent third parties.
At December 31, 1995,1996, the Company maintained $2,300,000 of
certificates of deposit and $2,360 in a money market account with Liberty at market rates and terms. The
Company also had $1,431,090$1,609,087 in demand deposits with Liberty at
December 31, 1995.
-8-1996.
-7-
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:
(a) 1. Financial Statements:
Incorporated by reference from the Registrant's Annual Report to
security holders for the fiscal year ended December 31, 1995:1996:
Report of Independent Public Accountants.
Consolidated Statements of Financial Position at
December 31, 19951996 and 1994.1995.
Consolidated Statements of Income and Retained Earnings for the
three years ended December 31, 1995.1996.
Consolidated Statements of Cash Flows for the three years ended
December 31, 1995.1996.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules:
None - Financial statement schedules are omitted because of the
absence of conditions under which they are required or because the
required information is given in the financial statements or notes
thereto.
3. Exhibits:
2. (a) Articles of Merger of 1st Franklin Corporation with and into
1st Franklin Financial Corporation dated December 31, 1994
(incorporated herein by reference to Exhibit 3(2)(a) from
Form 10-K for the fiscal year ended December 31, 1994).
3. (a) Restated Articles of Incorporation as amended January 26,
1996.1996 (incorporated herein by reference to Exhibit 3(3)(a)
from Form 10-K for the fiscal year ended December 31, 1995).
(b) Bylaws (incorporated herein by reference to Exhibit 3(3)(b)
from Form 10-K for the fiscal year ended December 31, 1995).
4. (a) Executed copy of Indenture dated October 31, 1984, covering
the Variable Rate Subordinated Debentures - Series 1
(incorporated herein by reference from Registration
Statement No. 2-94191, Exhibit 4a).
(b) Modification of Indenture dated March 29, 1995
(incorporated herein by reference to Exhibit 3(4)(b) from
Form 10-K for the fiscal year ended December 31, 1994).
9. Not applicable.
10. (a) Credit Agreement dated May, 1993 between the registrant and
SouthTrust Bank of Georgia, N.A.. (Incorporated herein by
reference from Form 10-K for the fiscal year ended December
31, 1993.)
(b) Revolving Credit Agreement dated October 1, 1985 as amended
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November 10, 1986; March 1, 1988; August 31, 1989 and May 1,
1990, among the registrant and the banks named therein
(Incorporated by reference to Exhibit 10 to the registrant's
Form SE dated November 9, 1990.)
-9-
(c) Fifth Amendment to Revolving Credit Agreement dated April
23, 1992. (Incorporated by reference to Exhibit 10(c) to the
Registrant's Form SE dated November 5, 1992.)
(d) Sixth Amendment to Revolving Credit Agreement dated July 20,
1992. (Incorporated by reference to Exhibit 10(d) to the
Registrant's Form SE dated November 5, 1992.)
(e) Seventh Amendment to Revolving Credit Agreement dated
June 20, 1994. (Incorporated by reference to Exhibit 10(e)
from Form 10-K for the fiscal year ended December 31, 1994.)
(f) Merger of 1st Franklin Corporation with 1st Franklin
Financial Corporation Consent, Waiver and Eighth Amendment
to Revolving Credit and Term Loan Agreement. (Incorporated
herein by reference to Exhibit 10(f) from Form 10-K for the
fiscal year ended December 31, 1994.)
(g) Ninth Amendment to Revolving Credit Agreement and Term
Loan Agreement dated June 20, 1996.
11. Computation of Earnings per Share is self-evident from the
Consolidated Statement of Income and Retained Earnings in the
Registrant's Annual Report to Security Holders for the fiscal
year ended December 31, 1995,1996, incorporated by reference herein.
12. Ratio of Earnings to Fixed Charges.
13. Registrant's Annual Report to security holders for fiscal year
ended December 31, 1995.1996.
18. Not applicable.
19. Not applicable.
21. Subsidiaries of Registrant.
22. Not applicable.
23. Consent of Independent Public Accountants.
24. Not applicable.
27. Financial Data Schedule
28. Not applicable.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 1995.
-10-1996.
-9-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized:
1st FRANKLIN FINANCIAL CORPORATION
March 29, 199627, 1997 By: s/Ben F. Cheek, III
-------------- -----------------------------------------------
Date Ben F. Cheek, III
Chairman of BoadBoard
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacity and on the dates indicated:
Signatures Title Date
---------- ----- ----
s/(Ben F. Cheek, III) Chairman of Board; March 27, 1997
- ---------------------- Chief Executive --------------
Ben F. Cheek, III Chairman of Board; March 29, 1996
- --------------------- Chief Executive --------------
Officer
s/(T. Bruce ChildsChilds) President March 29, 199627, 1997
- ------------------------------------------- --------------
T. Bruch Childs
s/(A. Roger Guimond) Vice President; March 27, 1997
- ---------------------- Chief Financial --------------
A. Roger Guimond Vice President;Officer
s/(W. Richard Acree) Director March 29, 199627, 1997
- --------------------- Chief Financial---------------------- --------------
Officer
s/
W. Richard Acree
s/(Lorene M. Cheek) Director March 29, 199627, 1997
- ------------------------------------------- --------------
s/
Lorene M. Cheek
s/(Jack D. Stovall) Director March 29, 199627, 1997
- ------------------------------------------- --------------
s/
Jack D. Stovall
s/(Robert E. Thompson) Director March 29, 199627, 1997
- ------------------------------------------- --------------
s/
Robert E. Thompson Director March 29, 1996
- --------------------- --------------
Supplemental Information to be Furnished with Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.
(a) Except to the extent that the materials enumerated in (1) and/or (2)
below are specifically incorporated into this Form by reference (in
which case see Rule 12b-23b), every registrant which files an annual
report on this Form pursuant to Section 15(d) of the Act shall
furnish to the Commission for its information, at the time of filing
its report on this Form, four copies of the following:
-11--10-
(1) Any annual report to security holders covering the registrant's
last fiscal year and
(2) Every proxy statement, form of proxy or other proxy soliciting
material sent to more than ten of the registrant's security
holders with respect to any annual or other meeting of security
holders.
(b) The foregoing material shall not be deemed to be "filed" with the
Commission or otherwise subject to the liabilities of Section 18 of
the Act, except to the extent that the registrant specifically
incorporates it in its annual report on this Form by reference.
(c) This Annual Report on Form 10-K incorporates by reference portions of
the Registrant's Annual Report to security holders for the fiscal
year ended December 31, 1995,1996, which is filed as Exhibit 13 hereto.
The Registrant is a privately held corporation and therefore does not
distribute proxy statements or information statements.
-12--11-