SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 25, 1996
__________________________________________________
(Date of report - date of earliest event reported)
Corcap, Inc.
______________________________________________________
(Exact name of registrant as specified in its charter)
Nevada 1-09964 06-1237135
__________________ _____________________ ________________
(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
120 Union Street, Willimantic, Connecticut 06226
(Address of Principal Executive Offices)
860-456-0200
(Registrant's telephone number, including area code)
90 State House Square, Hartford, Connecticut 06103-3720
(Former Address if Changed Since Last Report)
ITEM 2. ACQUISITION OF DISPOSITION OF ASSETS
On March 25, 1996, Corcap, Inc. ("Corcap") entered into a Settlement
Agreement, dated as of March 25, 1996 (the "Settlement Agreement"), with
Lydall, Inc. ("Lydall") pursuant to which Corcap transferred 120,000 shares
(the "Transferred Shares") of CompuDyne Corporation ("CompuDyne") common
stock, par value $.75 per share ("CompuDyne Common Stock"), to Lydall in
settlement of certain claims.
Pursuant to a Post-Distribution Agreement, dated as of July 1, 1988,
which Corcap and Lydall had entered into as part of the spin-off of
Corcap's predecessor, Acadia Polymers, from Lydall in 1988, certain
obligations and liabilities between Lydall and Corcap were allocated.
Lydall and Corcap had been in dispute over certain of their obligations and
liabilities under the Post-Distribution Agreement. Lydall claimed that
Corcap owed it $881,365 under the Post-Distribution Agreement as a result
of settlements Lydall had reached with the Internal Revenue Service for
each of the tax years from 1983 through 1989. Separately, Lydall
acknowledged owing Corcap $60,279 under the Post-Distribution Agreement as
a result of certain retrospective insurance adjustments made through 1995.
Under the Settlement Agreement, each of Lydall and Corcap released all
obligations arising out of such claims by the transfer from Corcap to
Lydall of 120,000 shares of CompuDyne Common Stock. In addition, Corcap
agreed to indemnify Lydall for all liabilities Lydall may incur in
connection with its former ownership of property in Dayville, Connecticut
which Corcap sold in August 1995 and which had previously been used in
connection with Acadia's operations. The Post-Distribution Agreement had
obligated Corcap to indemnify Lydall for certain environmental claims. In
all other respects, the Post-Distribution Agreement continues in effect.
As part of the Settlement Agreement, Lydall required as a condition to
signing, that CompuDyne enter into a registration rights agreement with
Lydall obligating CompuDyne to register the Transferred Shares upon demand
of Lydall two years following the date of the Agreement or in a "piggyback
registration" at any time upon the proposed registration by CompuDyne of
its stock. In order to induce CompuDyne to enter into such agreement,
Corcap agreed to issue an option (the "Option") to CompuDyne to purchase
16,666 shares of CompuDyne Common Stock at an exercise price of $.01 per
share exercisable immediately for a period of five years under a Stock
Option Agreement, dated as of March 25, 1996, between Corcap and CompuDyne
(the "Option Agreement"). Until recently, Corcap had included the accounts
of CompuDyne in Corcap's consolidated financial statements in light of the
significant ownership interest Corcap had in CompuDyne stock and
interlocking directors and officers. Due to the declining ownership
interest Corcap has in CompuDyne Common Stock and a diminished overlapping
of directors and officers, the financial statements of Corcap and CompuDyne
are no longer consolidated. Currently, three of the four Corcap directors
also serve on the CompuDyne Board of Directors.
Prior to Corcap entering into the Settlement Agreement and Option
Agreement, Corcap owned 428,881 shares of CompuDyne Common Stock, or 23.7%
of the issued and outstanding shares. As a result of the transfer of
120,000 shares of CompuDyne Common Stock to Lydall, Corcap owns 308,881
shares of CompuDyne Common Stock, or 17.1% of the issued and outstanding
shares, and upon exercise of the Option, Corcap will own 292,215 shares of
CompuDyne Common Stock, or 16.3% of the issued and outstanding shares.
On March 25, 1996, the high and low bids per share for CompuDyne
Common Stock as quoted on the OTC bulletin Board were $1.375 and $1.375.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits
(2)(a) Settlement Agreement, dated as of March 25,
1996, between Corcap and Lydall.
(2)(b) Stock Option Agreement, dated as of March 25,
1996, between Corcap and CompuDyne.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: April 2, 1996
CORCAP, INC.
By /s/ Diane Burns
_____________________________
Diane Burns
President