UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K*
*Amendment No. 1 to Form 10-K for the fiscal year ended 12-31-94

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
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 0-1490
FRANK E. BEST, INC.
(Exact name of registrant as specified in its charter)

WASHINGTON 35-1142810
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

P.O. BOX 50444, INDIANAPOLIS, INDIANA 46250
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (317) 849-2250

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
NONE

Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK PAR VALUE $1.00
(Title of class)

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 (or for such shorter period that the
registrant was required to file such reports) 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 the 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 ]

State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.

(Any sales of the registrant's stock by nonaffiliates within 60 days prior to
the date of filing would have sold at a price unknown to the registrant.)

Indicate the number of shares outstanding of each of the registrant's classes
of common, as of March 15, 1995.

COMMON STOCK 598,710 SHARES

Documents incorporated by reference: List the following documents if
incorporated by reference and the part of the form 10-K into which the
document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or information statement; and (3) Any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1993. The listed documents should
be clearly described for identification purposes.

NONE

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Since Frank E. Best, Inc. and Best Universal Lock Co. are
non-operating parents of Best Lock Corporation, a discussion of
Best Lock Corporation's business is necessary in order to
understand the character and development of the total enterprise.
As the variations between the consolidated financial statements
of these three companies are not significant, the discussion and
analysis of Best Lock Corporation is representative of all. The
following, therefore, is a discussion of the business of Best
Lock Corporation.

RESULTS OF OPERATIONS - 1994 vs. 1993

In order to more efficiently manage its operations, the
Company reorganized into two divisions during 1994. The Best
Lock Manufacturing (BLM) Division is responsible for
manufacturing and supplying security products to the Company's
distribution division, Best Locking Systems (BLS).

The Company's net sales for 1994 increased 6% over 1993,
primarily due to improved sales volume in the Best Locking
Systems Division and the recognition of a full year of sales for
offices that began operations during 1993. The overall higher
level of retail sales at the distribution level improved gross
margins to 48.4%, compared to 45.2% in 1993. The Company also
negotiated a three year purchase agreement with its major brass
supplier which resulted in the Company not experiencing an
increase in the per pound cost of brass despite the market price
for brass, the largest raw material component of its products,
increasing approximately 11% in 1994.

Salaries and wages were $4.3 million higher than 1993
levels. A portion of the increase relates to a charge of $2.1
million in the fourth quarter for anticipated employee-related
expenses related to the settlement of claims arising from a
derivative action. The material financial components of this
settlement, which was concluded on February 15, 1995 and is
described in Item 13, include the payment of the total sum of
$2,134,349 as severance, vacation and bonus payments to Walter E.
Best, Robert W. Best, Richard E. Best, Marshall W. Best and
Edwina McLemore, the payment of the total sum of $1,240,000 in
exchange for covenants not to compete from Walter E. Best, Robert
W. Best, Richard E. Best and Marshall W. Best, and the payment by
Best Lock Corporation of $8,178,296 for the acquisition of shares
of Best Lock Corporation and interests in a partnership described
in Item 13. The severance, vacation and bonus payments made to
these individuals were accrued as expense in 1994. The aggregate
payment for the covenants not to compete will be amortized as
follows: $206,667 in 1995, $248,000 in each of the years 1996-
1999, and $41,333 in 2000. Best Lock Corporation does not
believe that the departure of Walter E. Best will have a material
adverse impact on its business or future results of operations.

Expansion of the Company's sales distribution offices during
1993, when only a partial year of operating expenses were
recognized, also resulted in an increase in salaries and wages
during 1994. Employee benefit costs increased $2 million over
1993 due primarily to (1) an increase in health insurance claims

costs of approximately $1.0 million, which the company is
self-funding; and (2) a change in the assumptions used in
calculating the present value of the retirement benefit for the
former President, Walter E. Best, which increased expense by
$800,000. The discount rate used to calculate the actuarial
present value of the accumulated retirement benefit obligation
was changed from 7.5% in 1993 to 8% in 1994, resulting in a
reduction in employee benefits expense of $434,000.

Total selling, general and administrative and engineering
expenses increased $5.3 million, or 12% over 1993. Reductions
in bad debt expense of approximately $500,000 and lower repairs
and utilities expenditures of approximately $500,000 partially
offset the increase in salaries and benefits costs described
above. Professional fees increased by $1.1 million as the
Company sought assistance in selecting software for the order
processing, inventory management, and accounting functions as
well as for other special projects. Research and development
expenditures increased to $2.7 million in 1994 over the 1993
total of $2.2 million. The Company is continuing to develop an
electronic access security product. The costs of this
development are being expensed currently.

Net income of $2.2 million increased 23% over 1993. Income
taxes decreased to 8% of income before taxes, compared to an
effective tax rate of 43% in 1993. The reduction in the
effective tax rate for 1994 is primarily attributable to the
recognition of a $656,000 income tax benefit in 1994 and certain
other tax credits. In connection with the finalization of the
Company's 1993 U. S. Federal income tax return in September,
1994, it was determined that the Company would have $656,000 of
unutilized foreign tax credits available to offset certain future
U. S. tax obligations. The Company believes these foreign tax
credits will be utilized during the carryover period and thus has
recorded the benefit of the item as a reduction to the provision
for income taxes for the year ended December 31, 1994.

On February 15, 1995, the Company settled all claims arising
from a derivative action that had been threatened by a director
during the third quarter of 1994. Professional fees incurred
related to the settlement of the claims increased other
non-operating expenses by $700,000 during 1994.

RESULTS OF OPERATIONS - 1993 VS. 1992

Net sales for 1993 increased 16% over 1992. The increase
was principally due to expansion of corporate owned sales
distribution offices throughout the country and a price increase
of approximately 5%. The expansion of the sales offices at the
distribution level allows for greater sales at retail compared to
wholesale sales to independent distributors, which improved the
gross margin to 45.2%, compared with 41.4% in 1992. These higher
sales and margins were partially offset by higher selling and
general and administrative expenses required by operating the
additional offices, such as sales and support personnel.

The Company has continued to enhance its distribution
structure in anticipation of a higher level of sales in the
future. During 1993, the Company established regions across the
United States, each of which has a manager who will assist the

company in providing greater customer service and satisfaction.
In addition, a sales training program was presented across the
nation in the fall of 1993 to enhance the abilities and knowledge
of the Company's sales force, at a cost of approximately
$350,000.

Net income decreased in 1993 to $1.8 million , or 1.8% of
sales, from $2.46 million or 2.9% of sales in 1992. Operating
expenses increased $11 million primarily due to higher salaries,
wages, related taxes and benefits of $6.9 million. Repairs and
rent, travel, and professional fees also increased $1.2 million,
$660,000 and $705,000, respectively, mainly due to the expansion
and development of the Company's sales distribution offices as
described above. Profitability was affected by a variety of
specific factors, several of which were determined during the
fourth quarter of 1993. The Company paid a discretionary bonus
to all employees in November, 1993, in the amount of slightly
over $1.1 million. Furthermore, the change in the discount rate
for the retirement benefit obligation from 8% in 1992 to 7.5% in
1993 resulted in additional pension expense of approximately
$431,000 in 1993. Year end physical inventories resulted in an
unexpected charge of $700,000.

Total research and development expenditures were
approximately $2.2 million in 1993 compared to $2.0 million in
1992, as the Company continued to develop an electronic security
access product, the costs of which are being expensed currently.
The increased expenditures for research and development, the
enhancements made related to expanding the corporate owned sales
distribution offices, and the increase in capital expenditures
represent the Company's investment in the future, which will
result in an increased emphasis on the customer and will enhance
the growth potential and profitability of the Company in future
years.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The Company's current ratio, while continuing to be strong,
decreased to 2.6 at December 31, 1994 compared to 3.9 at December
31, 1993. Cash and cash equivalents increased $3.2 million as a
result of (1) the implementation of a company-wide enhanced cash
management system in late 1993 and (2) a modest reduction in days
sales outstanding. Any excess cash generated over current
operating needs is invested in a daily money market fund at a
variable interest rate. At December 31, 1994, $2.3 million was
invested in this fund. The current ratio was affected by an
increase in current liabilities of $5.9 million due to the
establishment of an accrual for estimated severance expenses,
increases in customer advances, and an increase in accrued
medical claims.

The Company's continued emphasis on inventory management and
control in 1994 resulted in a slight decrease in finished goods
inventory from 1993, even though the number of corporate owned
sales distribution facilities increased. The overall inventory
increased less than 1%.

Property, plant and equipment additions decreased by
approximately $800,000 to $3.9 million in 1994 from the 1993
total of $4.7 million and by $1.2 million from the 1992 total of

$5.1 million. Expenditures in 1993 and 1992 included costs of
the expansion of the corporate owned sales distribution offices,
which slowed slightly during 1994. The majority of the capital
additions were to improve productivity and efficiency. Capital
expenditures for 1995 are expected to be in the $7 million range,
which includes approximately $3 million for enhanced computer
systems and related software. From time to time, the Company
acquires property that is constructed over time, normally at a
vendor's facility. Such costs are accumulated in a construction
in progress account until placed into service.

On May 18, 1994, the Company loaned $3.4 million to Russell
C. Best, Chief Executive Officer, under the terms of an
Employment Agreement entered into by Best Lock Corporation and
Russell C. Best on May 5, 1994. The terms of the loan include
repayment over a 30 year period and interest at 7.2%.

Total current liabilities increased by $5.8 million from
1993 to 1994. The Company continues to do more business in the
construction industry, which resulted in an increase of $685,000
in customer advances. Payments are received from these customers
prior to the fulfillment of the orders, and the income is not
recognized until the completion of the work. Accrued income
taxes increased by $692,000. As described above, the Company
established a $2.3 million liability for estimated severance
costs, a portion of which were incurred on February 15, 1995.
The severance is expected to reduce annual employee costs by
approximately $1.0 million beginning in the third quarter of
1995. The liability for estimated medical claims was increased
by $635,000 due to an overall increase in 1994 health insurance
claims.

The Company desires to retain its strong credit rating, and
therefore attempts to pay all vendors according to terms and take
all discounts offered.

During 1994, the principal source of the Company's funds was
from operations. Cash provided by operating activities totaled
$11 million for 1994, compared with $5.4 million in 1993. The
increase was due primarily due to a $4.1 million increase in
accounts payable, customer advances, and accrued liabilities. In
addition, accounts and notes receivable increased only $703,000
in 1994 compared to an increase of $3 million in 1993 and $2
million in 1992.

Prior to the refinancing in February 1995, the Company
maintained an unsecured bank line of credit under which it could
borrow up to $7 million. No borrowings were needed during 1994.
The line was utilized for short-term needs during 1993, the
largest amount borrowed being $2 million. In February 1995, the
Company negotiated a $25 million unsecured bank line of credit,
in part for the purpose of acquiring shares of Best Lock
Corporation and an 87% interest in a partnership which owns
directly or indirectly shares in Best Lock Companies, as
discussed in Note 14 to the consolidated financial statements.
On February 15, 1995, $12 million was borrowed under the line of
credit in order to finance this and other transactions as
described in Note 14 to the consolidated financial statements.
The remainder of the line remains available for additional funds,
if required. The Company expects to repay the loan from current

operating funds. The Company believes that the amounts available
from operating cash flows and under the line of credit will be
sufficient to meet its expected cash needs, including planned
capital expenditures.

While not having a material impact on the current level of
sales, the growth potential of future sales may be affected by
the outcome of the following action: Best Lock Corporation vs.
ILCO - Unican Corporation (Federal District Court, Indianapolis,
Cause No. IP 93-1092C). This action by the Company against ILCO,
a North Carolina corporation, charges ILCO with infringement of
the Company's trade dress and trademark right in certain patented
keys and other keys, and with unfair competition. The trial was
concluded on March 14, 1995, but no verdict has been rendered in
the case to date. Management is not able to assess the
likelihood of a favorable outcome in this case.

OTHER

Foreign sales continued at approximately 7% of total sales
during 1994 and 1993. The profit on these sales improved
slightly during 1994. The profit on foreign sales improved more
significantly from 1992 to 1993, because, in 1992, significant
costs related to the installation of a retirement benefit in the
Company's Canadian subsidiary were recognized in the amount of
$813,000.

The Best Lock Corporation Stock Bonus Plan was amended in
1994. Under the plan, participants, upon reaching certain
eligibility requirements, may receive cash or shares of the
Company. In the event the participants elect or are required to
receive shares, the participants have the right to require Lock
to repurchase such shares in cash at its fair market value. As a
result, in 1994, the fair market value of the shares, determined
based on an independent appraisal, held by the Stock Bonus Plan,
has been reflected in the accompanying balance sheet as "Common
Stock and Common Stock of Universal and Best, Redeemable Under
Stock Bonus Plan."

The firm backlog of approximately $6.4 million as of March
15, 1995 is slightly lower than the level of the prior year. The
Company continues to focus on customer satisfaction in the areas
of delivery and service, which includes shorter lead times.

The Company has not experienced any unusual inflation in its
purchases or sales for the years 1994, 1993, or 1992.

The Company is not aware of any environmental expenses, past
or present, which the Company believes will result in a
significant liability or cost.

Item 13. Certain Relationships and Related Transactions

A change in control of Frank E. Best, Inc. occurred on May
18, 1994. On that date, Russell C. Best, then Vice-President
and a Director of Frank E. Best, Inc., purchased 114,325 shares
of the common stock of Frank E. Best, Inc. Frank E. Best, Inc.
has 598,710 shares of common stock issued and outstanding. After
the purchase, Russell C. Best controlled, directly or indirectly,
50.27% of the outstanding common stock of Frank E. Best, Inc.
This voting control of Frank E. Best, Inc. was based on the
following stock ownership:

Name of Shareholder Number of Shares

Russell C. Best 115,812

Walter E. Best Co., Inc.* 185,188
-------

Total 301,000
=======

* Russell C. Best owns all of the voting common
stock of Walter E. Best Co., Inc. ("WEBCO").
Accordingly, he is in effective control of
the manner in which the shares of Frank E.
Best, Inc. owned by WEBCO are voted.

After the purchase of Frank E. Best, Inc.'s stock as
described above, Russell C. Best beneficially owned, directly or
indirectly, approximately 50.27% of the voting securities of
Frank E. Best, Inc., taking into consideration the 185,188 shares
of Frank E. Best, Inc.'s common stock owned by WEBCO and the
115,812 shares of the Corporation's common stock individually
owned by Russell C. Best. Currently, Russell C. Best
beneficially owns approximately 66% of Frank E. Best, Inc.'s
common stock as a result of the attribution to him of shares held
by the Best Lock Partnership in which Russell C. Best, WEBCO and
Best Lock Corporation are general partners and shares held by the
Best Lock Stock Bonus Plan with respect to which he has shared
powers of voting and disposition in addition to the shares
individually owned by him.

Russell C. Best purchased the 114,325 shares of Frank E.
Best, Inc.'s common stock from Bank One, Indianapolis, NA, as
Trustee of the Walter E. Best Irrevocable Trust, under a Trust
Agreement dated December 28, 1972, at a price of $29.36 per
share, for a total consideration of $3,356,582. Russell C. Best
purchased the 114,325 shares with the proceeds of a loan in the
amount of $3,400,000 from Best Lock Corporation, a subsidiary of
a subsidiary of Frank E. Best, Inc. The loan was made in
accordance with the terms of the Employment Agreement between
Best Lock Corporation and Russell C. Best, dated May 5, 1994 and
described below. Prior to the acquisition of control by Russell
C. Best, no single person possessed control of Frank E. Best,
Inc.

Shortly after the change in control of Frank E. Best, Inc.
described above, Russell C. Best began to implement
organizational changes in Best Lock Corporation for the purpose

of streamlining operations to reduce costs that would have
resulted in a diminution in pay for certain management positions.
Walter E. Best objected to these changes and in August, 1994
threatened Best Lock Corporation, Russell C. Best and Gregg A.
Dykstra, then General Counsel of Best Lock Corporation, with a
stockholder derivative action for mismanagement and the two
individuals with an action for common law fraud (not securities
fraud). On February 15, 1995, Best Lock Corporation settled all
claims arising from the threatened derivative action as well as
the claims threatened against the two individuals (the
"Settlement"). The material components of the settlement
include: (i) the resignation of Walter E. Best from the Board of
Directors and as President of each of Frank E. Best, Inc., Best
Lock Corporation and Best Universal Lock Co.; (ii) the
resignation of Richard E. Best and Marshall W. Best as officers
and employees of Best Lock Corporation and the resignation of
Robert W. Best as an employee; (iii) the payment of the total sum
of approximately $2,050,000 as severance, vacation and bonus
payments to Walter E. Best, Robert W. Best, Richard E. Best,
Marshall W. Best and Edwina McLemore, an employee of Best Lock
Corporation; (iv) the payment of the total sum of $1,240,000 in
exchange for covenants not to compete from Walter E. Best, Robert
W. Best, Richard E. Best and Marshall W. Best; and (v) the
payment of the total sum of $8,178,296 for the acquisition of
shares of Best Lock Corporation and interests in a partnership as
described below. As a part of the Settlement, Lock cancelled
indebtedness in the approximate amount of $28,690.97 owed as of
February 15, 1995 by each of Robert W. Best, Richard E. Best and
Marshall W. Best to Best Lock Corporation in connection with Best
Lock Corporation's prior interest in part of the proceeds of a
joint and survivor life insurance policy owned by Robert W. Best
as Trustee of the Walter Edwin Best Irrevocable Life Insurance
Trust and agreed to reimburse Walter E. Best for up to
approximately $82,000 in legal fees incurred by Mr. Best in
formulating and considering the claims threatened against Best
Lock Corporation and the two individuals. The covenants not to
compete referenced above prohibit each of the individuals for a
period of five years from engaging in or having an interest in
any business in the locking or security business or from using
the name "Best" in association with any business in competition
with Best Lock Corporation except, however, that in the case of
Richard E. Best, Marshall W. Best and Robert W. Best the
prohibition against engaging in, or having an interest in, a
competing business extends for only two years provided that a
member of the Best family does not own more than a de minimus
equity interest in such a business.

On February 15, 1995, Best Lock Corporation, which is a
subsidiary of Best Universal Lock Co., which is in turn a
subsidiary of Frank E. Best, Inc., purchased an eighty-seven
percent (87%) non-voting partnership interest in Best Lock
Partnership, a newly formed Indiana general partnership (the
"Partnership") for the total consideration of $5,582,625.59.
This acquisition was made in two steps. First, on February 15,
1995, Best Lock Corporation acquired an eighty-four and one-half
percent (84.5%) interest in the Partnership by purchasing non-
voting interests in the Partnership from members of the Best
family for a total consideration of $4,521,433.67. Second, Best
Lock Corporation acquired a two and one-half percent (2.5%)

interest in the Partnership directly from the Partnership for
$1,061,191.92.

The Partnership then acquired shares of capital stock in
Frank E. Best, Inc. and Best Universal Lock Co. from members of
the Best family for the aggregate purchase price of
$1,061,191.92.

Finally, Best Lock Corporation acquired shares of its own
common stock from members of the Best family at an aggregate
purchase price of $2,595,670.

After the consummation of these transactions, the total
assets of the Partnership were $6,571,711.60. Russell C. Best,
President of Frank E. Best, Inc. and a member of Frank E. Best,
Inc.'s Board of Director's, and Walter E. Best Company, Inc., an
affiliated corporation the voting shares of which are all owned
by Russell C. Best, are the holders of the remaining thirteen
percent (13%) interest in the Partnership, which thirteen percent
(13%) interest represents the entire voting interests of the
Partnership.

The information in the following table discloses payments
received by members of the Best family in connection with the
settlement in the categories identified.

Purchase Purchase Purchase Purchase Severance
Price for Price for Price for Price for Best and Vacation Noncom-
Partnership Frank E. Best Lock Universal /Bonus petition
Name Interests Best, Inc.'s Corporation Lock Co. Payments Payments
Shares Shares Shares

Walter E. Best -0- $ 293.60 $ 770.00 $ 329.80 $ 695,132.80 $640,000.00
The Huntington Trust -0- 349,119.76 -0- -0- -0- -0-
Company, NA, as the
trustee of the
Walter E. Best
Irrevocable Trust
Walter E. Best, as 3,532,521.46 -0- -0- -0- -0- -0-
the trustee of the
Walter E. Best
Revocable Trust
Robert W. Best 250,323.45 43,746.40 734,195.00 140,737.88 429,774.56 200,000.00
Denise Best 31,223.14 -0- -0- -0- -0- -0-
Richard E. Best 250,323.45 43,658.32 649,495.00 140,737.88 442,563.08 200,000.00
Amber Best 31,223.14 -0- -0- -0- -0- -0-
Marshall W. Best 250,323.45 43,658.32 649,495.00 140,737.88 439,360.24 200,000.00
Tracey Best 31,223.14 -0- -0- -0- -0- -0-
Dona J. Best, as 144,272.44 -0- 561,715.00 158,172.08 -0- -0-
trustee of the
Dona J. Best
Revocable Trust

The relationships among the parties are as follows: Prior
to February 15, 1995, Walter E. Best was President, Chairman, and
a member of the Board of Directors of each of Frank E. Best, Inc.
Best Universal Lock Co. and Best Lock Corporation and Walter E.
Best Company, Inc. He is the father of Frank E. Best, Inc.'s
current President, Russell C. Best, Robert W. Best, Richard E.
Best and Marshall W. Best. Prior to February 15, 1995, Robert W.
Best was Assistant to the President of Best Lock Corporation. He
is a brother of Frank E. Best, Inc.'s current President, Russell
C. Best. Prior to February 15, 1995, Richard E. Best was a Vice
President of Best Lock Corporation. He also is a brother of
Frank E. Best, Inc.'s current President, Russell C. Best. Prior
to February 15, 1995, Marshall W. Best was a Vice President of
Best Lock Corporation. He also is a brother of Frank E. Best,
Inc.'s current President, Russell C. Best. The Walter E. Best
Revocable Trust is a revocable trust established by Walter E.
Best. The Dona J. Best Revocable Trust is a revocable trust
established by Dona J. Best who is the mother of Russell C. Best,
Robert W. Best, Richard E. Best and Marshall W. Best. Denise
Best is the spouse of Robert W. Best; Amber Best is the spouse of
Richard E. Best; and Tracey Best is the spouse of Marshall W.
Best.

The purchase price of the shares of Frank E. Best, Inc.,
Best Universal Lock Co. and Best Lock Corporation were based on
the respective appraised values of such shares as of December 31,
1993 as determined by an independent appraiser, Sigurd R. Wendin
& Associates, Inc. of Birmingham, Michigan.

Best Lock Corporation's acquisition of its interest in the
Partnership and its redemption of its own common shares were
funded through a line of credit obtained by Best Lock Corporation
from Huntington National Bank of Indianapolis, Indiana.

The series of transactions described above was approved
unanimously by the Boards of Directors of Frank E. Best, Inc. and
of Best Lock Corporation and was undertaken pursuant to an
Agreement dated February 15, 1995. An opinion was rendered by
Merrill Lynch, Pierce, Fenner & Smith Incorporated to Lock's
Board of Directors that the settlement transactions, including
the severance and non-competition payments, were fair to Best
Lock Corporation from a financial point of view.

Employment Agreement and Agreement Respecting Sale Of Stock

On May 5, 1994, Lock and Russell C. Best entered into an
Employment Agreement pursuant to which Russell C. Best assumed
the duties of Chief Executive Officer of Best Lock Corporation.
The initial term of the Employment Agreement expires December 31,
1998; however, the term is automatically extended by one
additional year on December 31 of each year unless earlier
terminated by notice by either party to the other at least thirty
(30) days prior to December 31 of such year.

The Employment Agreement provides for a base salary of a
minimum of $425,000 per year, subject to increases for inflation
and other factors, plus the participation of Russell C. Best in
all general and executive compensation and benefit plans of Best
Lock Corporation, including any incentive or bonus plans. The
Employment Agreement further provides for a loan of up to

$3,400,000 to Russell C. Best, to be repaid to Best Lock
Corporation over a thirty year period with interest at 7.2% per
annum.

The Employment Agreement also provides severance benefits in
the event of termination of employment under certain
circumstances. In the event of termination of employment by Best
Lock Corporation without "cause" or by Russell C. Best with
"cause" (as such terms are defined in the Employment Agreement),
he will receive in each year throughout the unexpired portion of
the term of the Employment Agreement, including any extensions
occurring prior to the date of termination, his then current base
salary, plus the average of the aggregate amounts of any bonuses,
incentive payments, and/or contingent compensation received by
him in each of the three immediately preceding calendar years.
If Best Lock Corporation terminates Russell C. Best's employment
with "cause," or if he terminates employment without "cause,"
Russell C. Best would forfeit all compensation and benefits
following such termination.

Consistent with the terms of the Employment Agreement, on
May 18, 1994, Best Lock Corporation loaned $3,400,000 to Russell
C. Best pursuant to the terms of a Loan Agreement dated May 5,
1994, to which Best Lock Corporation and Russell C. Best are
parties. The terms of the loan were as provided in the
Employment Agreement. The current outstanding principal balance
of the loan is $3,334,001. The loan is secured by 113,311 shares
of Frank E. Best, Inc.'s Common Stock and 451 shares of Best
Universal Lock Co. Such shares will be released pro rata from
the pledge as the principal of the loan is repaid to Best Lock
Corporation.

On May 16, 1994, Best Lock Corporation entered into an
Agreement Respecting Sale of Stock (the "Put Agreement") with
Russell C. Best. The Put Agreement provides that Russell C. Best
has the right, exercisable at any time on or before December 31,
1994, to require Best Lock Corporation to purchase from him any
shares of Frank E. Best, Inc. owned by him at the time of
exercise at a price of $29.36 per share. The right was not
exercised and the Put Agreement has expired.

Other Transactions

Walter E. Best is the president and owns in excess of 10% of
the stock of Best Aircraft Corporation. During the past fiscal
year, Best Lock Corporation leased aircraft and automobiles from
Best Aircraft Corporation, paying $180,656 for such services. As
part of the Settlement, all of the automobile leases were
cancelled and Lock purchased the automobiles used by its
employees for an amount equal to the bank indebtedness owed by
Best Aircraft Corporation with respect to each such automobile as
of February 15, 1995. Larry Rottmeyer, who became Vice President
of Marketing of Best Lock Corporation in 1994, was the president
of, and owned in excess of 10% of, Marcon, Inc. Best Lock
Corporation purchased market research services from Marcon, Inc.
during 1994 paying $291,716 for such services. Mr. Rottmeyer is
no longer a shareholder or officer of Marcon, Inc.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

(a) Financial Statements: All required financial
statements and schedules are included in Item 8 of this Form
10-K.

(b) Reports on Form 8-K: None filed in the last
quarter of 1994.

Exhibit
10-A Settlement Agreement, dated February 15,
1995, by and among certain members of the
Best family and their affiliates and Best
Lock Corporation, Frank E. Best, Inc. and
Best Universal Lock Co. (incorporated by
reference to Exhibit 99 to the Form 10-Q of
Frank E. Best, Inc. for the Quarter ended
March 31, 1995)

10-B Loan Agreement, dated May 5, 1994, between
Best Lock Corporation and Russell C. Best as
amended by Amendment To Loan Agreement, dated
February 15, 1995

10-C Best Lock Partnership Agreement of General
Partnership, dated February 13, 1995, as
amended by First Amendment, Second Amendment
and Third Amendment thereto

10-D Indemnification Agreement among Best Lock
Corporation, Best Aircraft, Inc. and Walter
E. Best

10-E Amendment to Supplemental Retirement Benefits
Agreement between Best Lock Corporation and
Walter E. Best

10-F Employment Agreement, dated May 5, 1994,
between Russell C. Best and Best Lock
Corporation

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.

Date: October 12, 1995

FRANK E. BEST, INC.

/s/ Russell C. Best
------------------------------
Russell C. Best, President and
Chief Executive Officer

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 capacities and on
the date indicated.

Signature Title Date

1. Principal Executive Officer:

/s/ Russell C. Best President and Chief October 12, 1995
------------------------ Executive Officer
Russell C. Best

2. Principal Financial Officer:

/s/ Gregg A. Dykstra Secretary and Treasurer October 12, 1995
------------------------
Gregg A. Dykstra

/s/ Paula J. Tinkey Manager of Accounting October 12, 1995
------------------------
Paula Tinkey

3. A majority of the
Board of Directors:

/s/ Russell C. Best Director October 12, 1995
------------------------
Russell C. Best

/s/ Mariea L. Best Director October 12, 1995
------------------------
Mariea L. Best