SCHEDULE A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
X Preliminary Proxy Statement
Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CenCor, Inc.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
__ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), of 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).
X 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:
Common Stock
(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:
$18,110,000 (Aggregate of cash and property to be distributed to
security holders.)
(5) Total fee paid:
$3,620.00
__ Fee paid previously with preliminary materials.
CENCOR, INC.
City Center Square
1100 Main Street, Suite 416A
Post Office Box 26098
Kansas City, Missouri 64196
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 11, 1996
TO ALL STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of the
Stockholders of CenCor, Inc. ("CenCor"), a Delaware corporation,
will be held on the 11th day of July, 1996, at 2:00 p.m., Kansas
City Time, at City Center Square, 2nd Floor Conference Room, Suite
202, 1100 Main Street, Kansas City, Missouri, for the following
purposes:
(1)To elect four members of the Board of Directors for the
ensuing year or until their successors are duly elected and
qualified;
(2)To ratify and approve the appointment of the independent
auditors for CenCor for 1996;
(3)To authorize and approve the plan of dissolution and
liquidation (the "Plan of Liquidation") recommended by the Board of
Directors; and
(4)To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on June
5, 1996, as the record date for the determination of the stockhold-
ers entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Lisa Henak
Secretary
Dated: June 12, 1996.
IMPORTANT--YOUR PROXY IS ENCLOSED
You are urged to sign, date and mail your proxy even though
you may plan to attend the meeting. No postage is required if
mailed in the United States. If you attend the meeting, you may
vote by proxy or you may withdraw your proxy and vote in person.
By returning your proxy promptly, a quorum will be assured at the
meeting, which will prevent costly follow-up and delays.
CENCOR, INC.
City Center Square
1100 Main Street, Suite 416A
Post Office Box 26098
Kansas City, Missouri 64196
________________________________________
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 11, 1996
________________________________________
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors
of CenCor, Inc. ("CenCor") for use at its Annual Meeting of
Stockholders to be held on Thursday, July 11, 1996, at 2:00 p.m.,
Kansas City Time, at City Center Square, 2nd Floor Conference Room,
Suite 202, 1100 Main Street, Kansas City, Missouri, and any
adjournment or postponement thereof. As used herein, and unless
the context indicates otherwise, the term "Company" refers to
CenCor collectively with its subsidiaries, including Century
Acceptance Corporation ("Century"). Shares represented by duly
executed proxies received prior to the meeting will be voted at the
meeting. If a stockholder specifies a choice on the form of proxy
with respect to any matter to be acted upon, the shares will be
voted in accordance with the recommendations made therein with
respect to the proposals described in this Proxy Statement. Any
person giving a proxy has the power to revoke it at any time before
it is exercised by giving written notice to the Secretary of the
Company at any time prior to its use.
The Company will bear all the costs of solicitation of
proxies. In addition to the use of the mail, proxies may be
solicited by personal contact or telephone by certain directors, officers and
employees of the company, without payment of additional compensation for doing
so. The Company may reimburse brokers or other persons holding stock in their
names or in the names of nominees for their expenses in sending proxy
soliciting material to beneficial owners. This Proxy Statement and the
accompanying form of proxy are being mailed or given to stockhold-
ers on or about June 12, 1996.
Only stockholders of record at the close of business on June
5, 1996, will be entitled to notice of, and to vote at, the
meeting. On the record date, the Company had _____ shares of
common stock issued and outstanding and entitled to vote at the
meeting. Each outstanding share of common stock is entitled to one
vote on each matter brought to a vote. Provided a quorum is
present, the affirmative vote of a plurality of the shares of
common stock voting present in person or represented by proxy at
the meeting is required for the election of each nominee. The
affirmative vote of a majority of the issued and outstanding shares
of common stock present in person or represented by proxy at the
meeting is required for ratification and approval of the appoint-
ment of the independent auditors for 1996. The affirmative
vote of a majority of the issued and outstanding shares of common
stock is required for authorization and approval of the Plan of Liquida-
tion.
Management does not know of any matter, other than those
referred to in the accompanying Notice of Annual Meeting, which is
to come before the meeting. If any other matters are properly
presented to the meeting for action, it is intended that the
persons named in the accompanying form of proxy, or their substi-
tutes, will vote in accordance with their judgment of the best
interests of the Company on such matters.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, with respect to the Company's
common stock (the only class of voting securities), the only person
known to be a beneficial owner of more than five percent (5%) of
any class of the Company's voting securities as of June 5, 1996.
Number of Shares and
Name and Address Nature of Beneficial
of Beneficial Owner Ownership<F1> Percent of Class
Jack L. Brozman, Trustee
Robert F. Brozman Trust
1100 Main St.
Kansas City, Missouri 64105 272,423<F2> 18%
<FN>
<F1> Nature of ownership of securities is direct. Beneficial
ownership as shown in the table arises from sole voting power and
sole investment power.
<F2> Does not include 34,344 shares held by Jack L. Brozman or 20,025
shares held by or for the benefit of Robert F. Brozman's other
children, in which the Robert F. Brozman Trust (the "Trust")
disclaims any beneficial interest.
</FN>
The following table sets forth, with respect to the Company's
common stock (the only class of voting securities), (i) shares
beneficially owned by all directors of the Company and nominees for
director, and (ii) total shares beneficially owned by directors and
officers as a group, as of June 5, 1996.
Number of Shares and
Name and Address of Nature of Beneficial
Beneficial Owner Ownership<F1> Percent of Class
Jack L. Brozman 306,767<F2> 21%
Edward G. Bauer, Jr. -- --
George L. Bernstein -- --
Marvin S. Riesenbach -- --
Directors and Officers as a Group 306,767<F2> 21%
<FN>
<F1> Nature of ownership of securities is indirect. Beneficial
ownership as shown in the table arises from sole voting power and
sole investment power.
<F2> Includes 34,344 shares held by Jack L. Brozman and 272,423
shares held by the Trust. Does not include 20,025 shares held by
or for the benefit of Robert F. Brozman's other children, in which
the Trust disclaims any beneficial interest. Jack L. Brozman is
the sole trustee and is also one of the beneficiaries of the Trust.
ELECTION OF DIRECTORS
(Item 1)
The shares represented by the enclosed proxy will be voted,
unless otherwise indicated, for the election of the four nominees
for director named below. The directors to be elected at the
Annual Meeting will serve for one year or until their successors
are duly elected and qualified. In the unanticipated event that
any nominee for director should become unavailable, the Board of
Directors, at its discretion, may designate a substitute nominee,
in which event such shares will be voted for such substitute
nominee. The Board recommends a vote FOR the election of the four
nominees for director named below.
Name of Served Principal Occupation for
Nominees Since Age Last Five Years and Directorships
Jack L. Brozman<F1> 1979 46 Chairman of the Board, President and Chief
Executive Officer of CenCor and Concorde
Career Colleges, Inc. ("Concorde") since
June 1991. Chief Executive Officer of
Century from July 1991 to August 1992.
Chairman of the Board and Treasurer, from
June 1991 until July 23, 1993, and
President and Director, for more than five
years prior to July 23, 1993, of La Petite
Academy, Inc. Director of Century and Concorde.
Edward G. Bauer, Jr.<F2><F3> 1991 68 Vice President and General Counsel of Philadelphia
Electric Company for more than the
five-year period prior to August 1988. Retired
from this position at the end of August 1988.
George L. Bernstein<F2><F3> 1991 64 Chief Financial and Administrative Officer
of Howard Fischer Associates, Inc. (execu-
tive search firm) since October 1994. Chief
Operating Officer of Dilworth, Paxson, Kalish
& Kauffman, Philadelphia, Pennsylvania
(law firm) from November 1991 to September 1994.
Director of R & B, Inc. (distributor of automotive
parts). Director of Century effective April 8, 1993.
Marvin S. Riesenbach<F2><F3> 1991 66 Executive Vice President and Chief Financial Officer
of Subaru of America, Inc. for more than the five years
prior to October 1990. Retired from
this position at the end of October 1990.
<FN>
<F1> Jack L. Brozman is sole trustee of the Trust.
<F2> Director effective July 1, 1991.
<F3> Member of Special and Audit Committees beginning July 1, 1991.
Elected to Executive Compensation Committee on August 21, 1991.
</FN>
The Board of Directors of CenCor held 12 meetings and acted by
unanimous written consent on one occasion during the last fiscal
year. Standing committees, consisting of the Executive Compensa-
tion Committee, the Audit Committee and the Special Committee, held
five meetings during the last fiscal year. The Executive Compensa-
tion Committee makes salary and bonus recommendations for certain
executive officers. The Audit Committee oversees the work of
CenCor's independent auditors. The Special Committee has the final
authority to thoroughly investigate and report to the Board of
Directors on certain matters concerning the misappropriation of
CenCor's assets by CenCor's previous chairman of the board, Robert
F. Brozman, or certain of his affiliated privately held companies.
The Special Committee also has the power and authority to consider
the adequacy of CenCor's internal controls and procedures and to
investigate and report upon such other matters as the Special
Committee considers appropriate. The Special Committee, the
Executive Compensation Committee, and the Audit Committee are
composed of Messrs. Bauer, Bernstein and Riesenbach. CenCor's
Board of Directors does not have a nominating committee.
Except as described below, the Company believes, based on
information filed with the Company, that all reports required to be
filed for the past two years with the Securities and Exchange
Commission under Section 16 by the Company's executive officers,
directors, and ten percent stockholders have been filed in
compliance with applicable rules:
Terri Rinne failed to file this report on Form 3 with respect
to her appointment as an executive officer of the Company in July
1995. A report on Form File 5 disclosing the information required
by Form 3 (and reporting no common stock ownership or transactions)
was subsequently filed, on an untimely basis, with the Securities
and Exchange Commission.
Edward Bauer reported, on an untimely basis, a transaction
in CenCor common stock in May 1995.
Executive Officers and Key Employees
of the Company
For information concerning the person, in addition to Jack L.
Brozman, who serves as executive officer of CenCor or Century, see
Item 10 "Directors and Executive Officers of the Registrant" in the
accompanying Annual Report on Form 10-K for the year ended December
31, 1995 (the "10-K Report").
Executive Compensation and Certain
Transactions
Summary Compensation Table
For information concerning the Company's executive and
director compensation, see Item 11 "Executive Compensation" in the
10-K Report.
Executive Compensation Committee Report
The Executive Compensation Committee (the "Committee") which
consists of three non-employee directors of the Company, has
prepared this report for inclusion in the Proxy Statement. The
Committee, which has actively functioned since early 1993, makes
salary and bonus recommendations for certain of the Company's
executive officers. The Committee attempts to set executive
officers' compensation at levels which are fair and reasonable to
the stockholders of the Company and which will attract, motivate,
retain and appropriately reward experienced executive officers who
contribute to the success of the Company.
Due in part to the limited number of executive officers of the
Company, the Committee's compensation policies are informal.
Executive officers' compensation is recommended by the Committee
after a review which utilizes the business experience and knowledge
of the Committee members. Its decisions are not based upon any
specific criteria or financial performance measure. In determining
compensation, the Committee considers a number of factors,
including the financial condition of the Company, the Company's
recent financial performance, the past performance of the executive
officer, and the Company's operating plans for the current year.
Given the Company's turbulent financial conditions since the summer
of 1991, the Committee has given particular significance to the
ability of the executive officer to reestablish credibility with
the Company's creditors.
The Committee only reviewed and recommended the compensation
of two executive officers during 1995, Mr. Jack Brozman, the
Company's Chief Executive Officer, and Ms. Terri Rinne, the
Company's Vice President. During 1995, the Committee also reviewed
and recommended certain modifications to outstanding stock
appreciation right agreements with Mr. Brozman, and two other
Company executives, Patrick Healy, the Company's former Chief
Financial Officer, and Dennis Berglund, Century's former Chief
Executive Officer.
With respect to Mr. Brozman, the Committee determined in 1995
that it would be beneficial to the Company if the Company had an
employment agreement with Mr. Brozman, which was not then the case.
Accordingly, the Committee negotiated the terms of a three-year
employment contract with Mr. Brozman commencing on July 3, 1995 and
continuing until June 30, 1998. Mr. Brozman's employment agreement
provides for the following annual salary amounts for the periods
indicated:
Year Salary
July 3, 1995 - June 30, 1996 $225,000
July 1, 1996 - June 30, 1997 175,000
July 1, 1997 - June 30, 1998 125,000
In arriving at these amounts, the Committee considered Mr.
Brozman's cash compensation (salary plus bonuses) for the preceding
two years ($160,000 and $150,000 for 1994 and 1993 respectively),
the time he devotes to the affairs of the Company (approximately
one-third to one-fourth of his time), the degree of responsibility
that he assumed during the extremely turbulent prior three years,
his performance to the Company in the negotiation and sale of
Century, and his projected reduced responsibilities occasioned by
the anticipated winding-up of the Company's affairs. With respect
to Ms. Rinne, the Committee determined that her salary should be
increased as a result of her being promoted to the position of
Vice-President. Her salary was set at $50,000 per year effective
July 1, 1995 and subsequently increased to $60,000 per year
effective January 1, 1996.
With respect to the stock appreciation rights ("SARs") in
1994, the Committee approved the execution by the Company of stock
appreciation rights agreements with Messrs. Brozman, Healy and
Berglund. Mr. Berglund, Mr. Brozman and Mr. Healy were granted
30,000, 15,000 and 10,000 SARs effective June 28, 1994. These
agreements further provided that each executive would further be
entitled to a like number of SAR units on June 28, 1995, provided
the executive was still employed by the Company at that time.
Pursuant to these SAR agreements, the executive would receive
compensation for his units at the earlier of his death, permanent
disability, involuntary termination of employment without cause, or
December 31, 1998, equal to that amount by which the per share
value of Century at such time (as determined by a formula in the
Agreement) exceeds $13.72. If substantially all of the assets or
stock of Century were sold prior to December 31, 1998, the amount
to be paid to the Executive would be equal to the amount by which
the net liquidation recovery per share of Century stock exceeded
$13.72. The Committee agreed, for purposes of the SARs, that the
net liquidation recovery per share of Century stock was $13.72 as
of December 31, 1993.
The Committee reviewed these outstanding SARs in early 1995
and determined that the grant date for the 1995 SARs should be
changed to March 1, 1995 instead of June 28, 1995.
The Committee also took up Mr. Healy's stock appreciation
rights in light of his resignation from full-time employment with
CenCor in January 1995. At the time he resigned, Mr. Healy agreed
to part-time employment with CenCor and to act as CenCor's
representative on the Board of Directors of Century. In recogni-
tion of Mr. Healy's continuing part-time services and his designa-
tion as CenCor's representative on the Century Board of Directors,
the Committee recommended that his benefits under his outstanding
SARs should continue, but only with respect to a sale of Century at
any time on or before December 31, 1995.
The 1995 employment terms for the other key executives of
Century were negotiated by Century's President. The CenCor Board
of Directors received general informational reports about any
changes in compensation arrangements for continuing executives of
Century and arrangements with newly hired Century executives.
These matters were considered by the CenCor Board primarily in the
context of an overall budget and not as part of an in-depth
consideration of compensation arrangements of the individual
Century executives.
Except for increasing Ms. Rinne's salary effective January 1,
1996 as discussed above, the Compensation Committee has not made
any recommendations concerning 1996 compensation for the Company's
remaining executive officers.
Executive Compensation Committee: Marvin S. Riesenbach,
Chairman; Edward G. Bauer, Jr. and George L. Bernstein.
Common Stock Performance
The following graph shows a comparison of cumulative total
returns for the Company, a broad market NASDAQ Index, and an
industry index for the five-year period ended December 31, 1995.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
Table depicts the following total return analysis:
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
CenCor, Inc. $100.00 $82.14 $7.14 $7.14 $8.00 $50.00
Peer Group $100.00 $309.21 $582.01 $770.85 $564.62 $771.43
Nasdaq Composite (US) $100.00 $160.56 $186.87 $214.51 $209.69 $296.30
The above graph compares the performance of the Company's
common stock with that of a broad market index for NASDAQ Stock
Market (U.S. Companies) and an Industry Index. The Industry Index
is made up of companies quoted on NASDAQ that have the following
Standard Industrial Classification Codes: 6140 through 6149. The
Company's common stock was delisted from the NASDAQ National Market
System on December 7, 1992 because of the Company's failure to meet
the NASDAQ capital and surplus requirements. Since that time, the
Company's common stock has been quoted on an inter-dealer basis in
the over-the-counter market on the OTC Bulletin Board.
Certain Relationships and
Related Transactions
For information concerning certain relationships and related
transactions, see Item 13 "Certain Relationships and Related
Transactions" in the 10-K Report.
APPROVAL OF AUDITORS FOR THE COMPANY
(Item 2)
The Board of Directors has selected and appointed Ernst &
Young LLP as the auditors for the Company for the year 1996.
The following resolution will be offered at the Annual
Meeting:
"RESOLVED, the action of the Board of Directors in appointing Ernst
& Young LLP as the independent auditors of the Company for 1996 is hereby
ratified and approved."
It is anticipated that representatives of Ernst & Young LLP
will attend the Annual Meeting. The representatives of Ernst &
Young will be given the opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
The Board recommends you vote FOR the appointment of Ernst &
Young LLP as the independent auditors and your proxy will be so
voted unless you specify otherwise.
PROPOSAL TO ADOPT PLAN OF
DISSOLUTION AND LIQUIDATION
(Item 3)
On January 22, 1996, the CenCor Board adopted a resolution
deeming it advisable that CenCor should be dissolved and adopted at
that time a plan of dissolution and liquidation (the "Plan of
Liquidation"). The CenCor Board further resolved that the Plan of
Liquidation be submitted to the stockholders for approval.
Accordingly, the following resolution will be offered at the Annual
Meeting:
"RESOLVED, that the Plan of Liquidation recommended by the Board of
Directors be authorized and approved."
The Board recommends a vote FOR authorization and approval of the
Plan of Liquidation.
Background of Proposed Liquidation
Prior to June 30, 1995, CenCor was engaged in the consumer
financing business through its wholly-owned subsidiary, Century.
CenCor functioned as a holding company. As a result of a number of
adverse developments, the Company began experiencing severe
liquidity problems in 1991. In response to these liquidity
problems, CenCor's Board initially formulated a plan in 1992
whereby CenCor eventually would be dissolved and its net assets
distributed to stockholders pro rata after its assets had been sold
and after its direct and contingent liabilities had been paid or
provided for. Unfortunately, CenCor was unable to receive a
satisfactory offer for its principal business, Century, at that
time. In 1993, CenCor obtained confirmation of its prepackaged
bankruptcy plan of reorganization (the "Plan of Reorganization")
under Chapter 11 of the United States Bankruptcy Code. The purpose
of the Plan of Reorganization was to modify and defer CenCor's debt
service obligations to a time when CenCor's investment in Century
would have grown such that CenCor could liquidate its investment in
Century and have funds available to distribute to its creditors and
stockholders.
Effective June 30, 1995, Century consummated the sale of its
consumer finance business. Under the terms of the sale, Century
received $128.7 million for substantially all of its assets. As a
result of the sale, Century was able to redeem all of its outstand-
ing secured notes held by its lenders for a purchase price equal to
the principal amount of the secured notes (approximately $102
million together with interest). The lenders also surrendered for
cancellation outstanding warrants which would have allowed them to
acquire up to 30% of Century.
With the sale of its consumer finance business, CenCor's
business purpose as a holding company no longer exists. The
Company has not conducted ongoing operations since the sale.
Moreover, based upon the amount obtained from its investment in
Century, plus the amounts received in settlement of claims against
third parties, the Board believes that the objectives of its Plan
of Reorganization have been achieved. Assuming CenCor had fully
liquidated and distributed its assets by December 31, 1995 and
assuming further that the Company's actual realizable value of its
assets and liabilities as identical to the Company's estimated fair
value of these items, CenCor's stockholders would have received
$18,110,000 in distributions or approximately $12.17 per share,
less expenses. The actual amount to be received upon complete
liquidation may be adversely effected by claims arising from
indemnification obligations resulting from the sale of Century's
assets, unanticipated tax liabilities, the ultimate amount
collected on the Company's investment in Concorde or other foreseen
factors. The actual liquidation amount may be reduced by legal
matters, including class action lawsuits pending in Alabama against
Century.
For the reasons described above, the Board determined that it
was in the best interest of the stockholders that CenCor be
liquidated. Prior to deeming it advisable that the Company should
be dissolved, the Board considered the alternative of acquiring
another ongoing business. The Board rejected this alternative
believing it not to be in the best interest of the stockholders as
well as not being within the spirit of the Plan of Reorganization.
Terms of the Plan of Liquidation
The Plan of Liquidation, which is attached hereto as Exhibit
A, provides that, if requisite stockholder approval is received,
the officers and directors of CenCor will promptly execute and file
a Certificate of Dissolution (the "Certificate of Dissolution")
with the Secretary of State of the State of Delaware. The Plan of
Liquidation provides that CenCor will be fully liquidated within
three years of the effective date of the Certificate of Dissolution
which is October 1, 1996. During this three-year period, CenCor
will not engage in any business activities, except for preserving
the value of its assets, adjusting and winding-up its business and
affairs, and distributing its assets in accordance with the Plan of
Liquidation. The Company's debts and liabilities will either be
paid, as they become due, or otherwise provided for prior to
distributions being made to stockholders.
Under Delaware law, CenCor will continue at a corporate entity
for three years after the dissolution becomes effective, or for
such longer period as the Delaware Court of Chancery directs in its
own discretion, for the purpose of prosecuting and defending suits
by or against CenCor and winding up the business and affairs of
CenCor, but not for the purpose of continuing the business of
CenCor.
At such time as the Board has determined that all claims and
liabilities have been identified and paid or provided for, which
the Board does not expect to occur prior to 1999, CenCor will
distribute in one or a series of distributions, at any time and
from time to time, as the Board in its discretion may determine,
all funds resulting from CenCor's liquidation to the stockholders
in accordance with the respective rights of each. The proportion-
ate interest of the respective stockholders and the assets of
CenCor would be fixed on the basis of their ownership of the
outstanding shares of CenCor on a record date to be determined by
the Board.
Activities During Period of Liquidation
The Company's activities during the period of liquidation will
focus on collection of various amounts owed to it, including the
collection of its investment in Concorde Career Colleges, Inc.
("Concorde") and the previous charged-off Concorde receivables
received in payment of accrued interest. The Company will also
closely monitor claims arising from indemnification obligations to
the buyer of Century in order to maximize the value of the escrow
fund established as a result of the sale. Until the Company's
long-term debt becomes payable and distributions are made to its
stockholders, the board will invest the available proceeds from the
sale of Century and the Company's other cash in short-term
government and government agency instruments. The Company's
expenses during the period of liquidation are expected to consist
primarily of salaries, professional fees, stockholder communication
expenses and other liquidation expenses. To the extent not offset
by interest income, these expenses will reduce the amount available
for ultimate distribution to stockholders. During the period of
liquidation, CenCor's directors and officers would implement and
carry out the provisions of the Plan of Liquidation and would
receive compensation for their services. The compensation for
these individuals could be more or less than historically paid to
them.
Required Stockholder Vote
Under Delaware law, the Plan of Liquidation requires the
affirmative approval of a majority of the issued and outstanding
shares of common stock entitled to vote. The Board of Directors
has been informed that Jack Brozman, who has the authority to vote
21% of the common stock, intends to vote all of these shares in
favor of the Plan of Liquidation.
Under Delaware law, stockholders of CenCor do not have the
right to dissent or demand appraisal of their shares if the Plan of
Liquidation is adopted. Accordingly, if the Plan of Liquidation is
adopted, all stockholders will be bound by its terms whether or not
they vote for the Plan.
If the stockholders do not approve the Plan of Liquidation,
the Board will in all likelihood seek liquidation of CenCor under
the supervision of the United States Bankruptcy Court that has
retained jurisdiction of the Plan of Reorganization, on the basis
that the sale of Century accomplished the Plan of Reorganization.
The Board believes that a bankruptcy court-supervised liquidation
would result in additional legal and administrative fees and
expenses, which would reduce the amount payable to stockholders
upon liquidation.
Certain Federal Tax Consequences
Until CenCor is regarded for federal income tax purposes as
having completely liquidated, CenCor will remain subject to federal
income tax on its taxable income, including any gain derived from
the sale of its assets and any interest income earned on amounts
retained by CenCor. If CenCor distributes any property in kind to
its stockholders, it will be required to recognized gain (or loss)
as if it sold such property for its fair market value.
CenCor expects to make one or more distributions to its
stockholders through pro rata distributions. The amount of cash
and the fair market value of any property received by a stockholder
as a pro rata distribution generally will be treated first as a
tax-free return of capital to the extent of such stockholder's tax
basis in such stockholder's shares of CenCor common stock (and
result in a corresponding reduction in such stockholder's tax basis
in such shares) and any distribution in excess of such stockholder-
's tax basis in such stockholder's shares of CenCor common stock
generally will be treated as capital gain. If any stockholder does
not obtain a full recovery of such stockholder's tax basis in such
stockholder shares of CenCor common stock, such stockholder
generally will realize a capital loss when the final liquidating
distribution is made by CenCor. The foregoing determinations of
basis recovery and gain (or loss) will be made separately for each
share of CenCor capital stock held by a stockholder.
THE FOREGOING DISCUSSION DOES NOT ATTEMPT TO COMMENT UPON ALL
THE VARIOUS PROVISIONS OF THE INTERNAL REVENUE CODE THAT MAY BE
APPLICABLE TO CENCOR OR ITS STOCKHOLDERS WITH RESPECT TO THE PLAN
OF LIQUIDATION. EACH STOCKHOLDER IS ADVISED TO CONSULT SUCH
STOCKHOLDER'S OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL, STATE,
LOCAL AND OTHER TAX CONSEQUENCES TO SUCH STOCKHOLDER OF THE PLAN OF
LIQUIDATION IN LIGHT OF SUCH STOCKHOLDER'S OWN PARTICULAR TAX
SITUATION.
Regulation During the Liquidation
Because of the sale of Century's consumer finance business,
CenCor may be an "investment company" as defined in the Investment
Company Act of 1940 (the "1940 Act"). The 1940 Act generally
requires investment companies to register with the Securities and
Exchange Commission after which their capital structure, securities
issuances, investments and transactions with affiliates, along with
numerous other activities would become subject to extensive
regulation. The 1940 Act does not, however, require an investment
company to register if its only activities are those "merely
incidental to its dissolution". CenCor believes that in light of
the dissolution exception from registration under the 1940 Act,
CenCor will not have to register under such act, assuming that the
Plan of Liquidation is approved by the stockholders.
Surrender of Certificates for Common Stock
At such time as the respective interest of the stockholders
are fixed on the basis of the ownership of their outstanding shares
of common stock of CenCor on a record date determined by the Board
(the "Record Date"), it is anticipated that the stock transfer
books of CenCor will be closed, no further transfers will be
recorded on CenCor's books, and no further stock certificates will
be issued, other than replacement certificates. All distributions
from CenCor on or after the Record Date will be made to stockhold-
ers according to their stockholdings as of the Record Date. As
soon as practicable after the determination of the Record Date,
stockholders will be advised of the procedures for surrendering
certificates representing their shares of common stock. Stockhold-
ers should not forward their stock certificates before receiving
those instructions. All distributions otherwise payable by CenCor
to stockholders who have not surrendered their stock certificate
and executed and returned such documents may be held for such
stockholders, without interest, until the surrender of their
certificates (subject to the laws relating to unclaimed property).
STOCKHOLDER PROPOSALS
In the event any stockholder intends to present a proposal at
the Annual Meeting of Stockholders to be held in 1997, such
proposal must be received by the Company, in writing, on or before
January 6, 1997, to be considered for inclusion in the Company's
next Proxy Statement.
VOTING PROXIES AND OTHER MATTERS
Proxies will be voted in accordance with the choices specified
on the form of proxy. If no choice is specified, shares will be
voted: (i) "FOR" the nominees listed on the proxy and in this Proxy
Statement; (ii) "FOR" ratification and approval of the appointment
of Ernst & Young LLP as the independent auditors for the
Company for 1996; and (iii) "FOR" authorization and approval of the
Plan of Liquidation.
Management of the Company does not intend to present any
business to the Annual Meeting except as indicated herein and
presently knows of no other business to be presented at the Annual
Meeting. Should any other business come before the Annual Meeting,
the persons named in the accompanying form of proxy will vote the
proxy in accordance with their judgment of the best interests of
the Company on such matters.
ANNUAL REPORT
The Company's 1995 Annual Report, which includes audited
financial statements, has been mailed to stockholders of the
Company with these proxy materials. The Annual Report does not
form any part of the material for the solicitation of proxies.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN TO THE COMPANY THE ACCOMPANYING
PROXY. IF YOU ARE PRESENT AT THE MEETING, YOU MAY WITHDRAW YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
BY THE BOARD OF DIRECTORS
Lisa Henak
June 12, 1996 Secretary