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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 (Fee Required)
For the Fiscal Year Ended December 31, 1996
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE OF 1934 (No Fee Required)
For the transition period from __________ to __________
Commission File Number 1-8987
INOVISION CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
06-1043736
(I.R.S. Employer Identification Number)
c/o Proskauer Rose Goetz & Mendelsohn LLP,
1585 Broadway, New York, NY 10036
(Address of principal executive offices)(Zip Code)
(212) 969-3000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities Registered Pursuant to Section 12 (g) of the Act: Common Stock, par
value $.01 per share
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 |_| NO |_|
Indicate by check mark if disclosure of delinquent files pursuant to Item 405 of
Regulation S-K (229.405 of this chapter) 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 of this Form 10-K. |_|
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
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Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES |X| NO |_|
Number of shares outstanding of the Registrant's Common Stock, as of the latest
practicable date:
37,462,569 shares of Common Stock, par value $.01 per share, were outstanding as
of November 9, 1994 on which date the registrant closed its transfer book for
purposes of making liquidating distributions.
DOCUMENTS INCORPORATED BY REFERENCE: None.
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PART I
ITEM 1. BUSINESS
Inovision Corporation (formerly Vestron Inc.) (the "Company") conducted no
business operations during 1996. Historically, the revenues of the Company were
derived principally from the worldwide distribution, in home video and in other
media and markets, of feature films acquired from third parties. In July, 1991,
the Company sold substantially all of its operating assets and liabilities to
Vestron Acquisition Corporation ("VAC"), an indirect, wholly-owned subsidiary of
LIVE Entertainment Inc. and changed its name from Vestron Inc. to Inovision
Corporation. Immediately after the closing of the sale to VAC, the Company's
assets consisted principally of: (1) rights under litigations and settlement
agreements not acquired by VAC, including a claim against Security Pacific
National Bank (the "Security Pacific Litigation") and the Settlement Rights
described below; and (2) miscellaneous other assets. In May, 1993, the Company
received $100,000,000 (before legal fees and other costs) in full settlement of
its claims against Security Pacific. After 1991 the Company had no paid
employees but retained consultants who supplied services on an as needed basis.
Effective November 9, 1994 (the "Record Date"), the Company adopted a Plan of
Complete Liquidation and Dissolution (the "Plan" or "Plan of Liquidation").
Substantially all assets of the Company other than the Contingency Reserve and
the Settlement Rights described below were distributed to holders of the
Company's Common Stock on November 9, 1994 ("Record Date Holders") in a
liquidating distribution (the "Record Date Distribution") in the amount of $2.50
per share. Through December 31, 1996, assets aggregating $92,814,000 of the
Record Date Distribution were distributed to Record Date Holders, and the
remaining $842,000 of the Record Date Distribution, payable to Record Date
Holders who had not surrendered their share certificates as of December 31,
1996, is recorded as a liability on the Company's December 31, 1996 statement of
net assets in liquidation.
In addition to the Contingency Reserve and the Settlement Rights, the Company
may be entitled to the payment of an Overage Amount by Frogtown Holdings, Inc.,
the Company's majority stockholder (the "Majority Stockholder"), as described in
"Item 13. Certain Relationships and Related Transactions". The Company, prior to
September 30, 1998, will either liquidate its remaining assets and make a final
distribution of the aggregate amount of cash held by the Company (after payment
or provision for payment of the Company's indebtedness and other obligations),
if any, pro rata per share to each Record Date Holder or, in lieu of making such
distributions, in the discretion of the Board, the Company may transfer all of
its assets to a liquidating trust. In such event, the Company would distribute
beneficial interests in such liquidating trust pro rata per share to the Record
Date Holders, in complete liquidation. No distribution shall be made by the
Company or a liquidating trust, if any, to any Record Date
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Holder if the aggregate amount of the final distribution to the Record Date
Holder would be less than $1.00.
Pursuant to the Plan, a contingency reserve (the "Contingency Reserve") had been
established to prosecute a litigation relating to the production of an animated
motion picture featuring music by the Beatles. The litigation was settled in
1995 and the remaining portion of the Contingency Reserve was reversed. Pursuant
to the settlement (the "ITC Settlement") the Company has rights to future
payments of (i) $33,333 payable in January 1998, and (ii) depending upon an
amount in respect to taxes which may be payable, between $282,500 and $332,500
payable in January 2000. If principal photography on this motion picture
commences, each of the foregoing payments will be accelerated to the date on
which such principal photography commences. The Company also is a party to a
settlement and escrow agreement (the "Benji Settlement") with the producers of
the theatrical motion picture, "Benji, the Hunted," pursuant to which the
Company shares in the royalties periodically generated by the film. Pursuant to
the Benji Settlement, the Company has received $1.5 million prior to 1995, an
additional $9,302 during 1995 and an additional $41,688 during 1996. The Company
will receive 30% of all future royalties, until the total royalties received by
the Company under the settlement reaches $3,000,000. At that point, the Company
will not be entitled to share in any future royalties. The Benji Settlement and
the ITC Settlement are referred to herein as the "Settlement Rights."
ITEM 2. DESCRIPTION OF PROPERTIES
The Company does not own or lease any real property.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Market Information
The Company closed its transfer books on the Record Date and at such time the
Company's transfer agent ceased recording stock transfers and issuing stock
certificates. Accordingly, trading in the shares ceased on that date. Future
distributions, if any, under the Plan (including distributions by the
liquidating trust, if any) will be made to Record Date Holders according to
their stockholdings as of the Record Date. Interests in any liquidating trust
will not be transferable except by bequest or inheritance, in the case of an
individual, or by operation of law. Each Record Date Holder is required to
surrender certificates representing his, her or its shares of Common Stock in
order to receive any liquidating distribution. Accordingly, most stockholders
have forwarded their stock certificates, together with the letter of transmittal
properly executed and completed, to the Company's transfer agent. All
distributions otherwise payable by the Company, if any, under the Plan to Record
Date Holders who have not surrendered their stock certificates will be held for
such stockholders, without interest, until the surrender of their certificates
(subject to escheat pursuant to applicable laws relating to unclaimed property).
There are 2,089 Record Date Holders.
Dividends
Except for the Record Date Distribution and any future distributions that may
occur under the Plan, the Company has not paid, and will not pay, any dividends.
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ITEM 6. SELECTED FINANCIAL DATA
Statement of Operations Data (5)
- -------------------------------- Period Period
(in thousands except for per share information) Year Year 11/9/94 1/1/94 Year Ended December 31,
Ended Ended to to ---------------------------------
12/31/96 12/31/95 12/31/94 11/8/94 1993 1992 1991
------ ------ ------ -------- -------- -------- ---------
Continuing Operations:
Litigation (expense) settlement N/A N/A N/A (129) 94,251 (1,283) (2,399)
Unrealized (loss) on marketable securities N/A N/A N/A (3,226) -- -- --
Realized loss on marketable securities N/A N/A N/A (531) -- -- --
Interest income N/A N/A N/A 3,034 2,038 -- --
General and administrative expenses, net of
miscellaneous income N/A N/A N/A (328) (375) (254) (525)
------ ------ ------ -------- -------- -------- ---------
Income (loss) before reorganization expense
and income tax benefit N/A N/A N/A (1,180) 95,914 (1,537) (2,924)
Reorganization expenses N/A N/A N/A -- -- -- 3,604
------ ------ ------ -------- -------- -------- ---------
Income (loss) before income tax benefit N/A N/A N/A (1,180) 95,914 (1,537) (6,528)
Income tax benefit N/A N/A N/A -- -- -- --
------ ------ ------ -------- -------- -------- ---------
Income (loss) from continuing operations N/A N/A N/A (1,180) 95,914 (1,537) (6,528)
Discontinued Operations:
Loss from discontinued operations N/A N/A N/A -- -- -- --
Gain (loss) on disposal of discontinued operations N/A N/A N/A -- -- -- 119,138
------ ------ ------ -------- -------- -------- ---------
Income (loss) from discontinued operations N/A N/A N/A -- -- -- 119,138
------ ------ ------ -------- -------- -------- ---------
Net income (loss) before cumulative effect of
change in accounting principle N/A N/A N/A (1,180) 95,914 (1,537) 112,610
Cumulative effect of change in accounting principle (2) N/A N/A N/A 1,413 -- -- --
Net income (loss) $ N/A $ N/A $ N/A $ 233 $ 95,914 $ (1,537) $ 112,610
====== ====== ====== ======== ======== ======== =========
Net income (loss) per share:
Continuing operations $ N/A $ N/A $ N/A $ (0.03) $ 2.56 $ (0.04) $ (0.17)
Discontinued operations N/A N/A N/A -- -- -- 3.18
Cumulative effect of change in accounting
principle per share N/A N/A N/A 0.04 -- -- --
------ ------ ------ -------- -------- -------- ---------
Total income (loss) per share (3) N/A N/A N/A 0.01 2.56 (0.04) 3.01
====== ====== ====== ======== ======== ======== =========
Weighted average number of common shares outstanding N/A N/A N/A 37,463 37,463 37,463 37,463
====== ====== ====== ======== ======== ======== =========
Balance Sheet Data
Assets of discontinued operations N/A N/A N/A N/A -- -- --
Total assets N/A N/A N/A N/A 95,331 102 1,354
Stockholders' equity (deficit) (4) N/A N/A N/A N/A 93,837 (2,077) (540)
Net assets in liquidation (1) 1,798 1,636 1,135 N/A N/A N/A N/A
Net assets in liquidation per share 0.05 0.04 0.03 N/A N/A N/A N/A
- ----------
(1) The Company adopted a the Plan of liquidation effective November 9, 1994.
The financial statements have been presented on a going concern basis for
the periods on and before November 8, 1994, and on a liquidation basis
effective on and after November 9, 1994.
(2) The Company adopted Statement of Financial Accounting Standards No. 115
"Accounting for Certain Investments in Debt and Equity Securities",
effective January 1, 1994.
(3) The effect of the fully diluted earnings per share calculation is either
anti-dilutive or inapplicable for all other years presented.
(4) The Company has not paid any cash dividends.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company conducted no business operations after 1991.
On November 9, 1994, the Plan of Liquidation became effective and for periods
thereafter the Company's financial statements are presented on a liquidation
basis. Under the liquidation basis of accounting, assets are stated at their
anticipated net realizable value. The adjustments to reflect the change to
liquidation basis of accounting was an increase in net assets in liquidation of
$698,000. Pursuant to the Plan of Liquidation, assets aggregating $92,814,000 of
the Record Date Distribution were distributed to Record Date Holders through
December 31, 1996. The remaining $842,000 of the Record Date Distribution,
payable to Record Date Holders who had not surrendered their share certificates
as of December 31, 1996, is recorded as a liability on the Company's December
31, 1996 Statement of Net Assets in Liquidation. The Company's Statement of Net
Assets in Liquidation as of December 31, 1996 includes cash equivalents,
marketable securities and the Settlement Rights. The Company also may be
entitled to the Overage Amount, if any. See "Item 13.
Certain Relationships and Related Transactions."
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ITEM 8. FINANCIAL STATEMENTS
Index to Financial Statements
Page:
Independent Auditors' Report 9
Financial Statements:
Statement of Net Assets in Liquidation 10
as of December 31, 1995 and 1996
(Liquidation Basis)
Statement of Changes in Net Assets in Liquidation 11
Period November 9, 1994 to December 31, 1994
and Years Ended December 31, 1995 and 1996
(Liquidation Basis)
Statement of Operations 12
Period January 1, 1994 to November 8, 1994
(Going Concern Basis)
Statement of Stockholders' Equity (Deficit) 13
Period January 1, 1994 to November 8, 1994
(Going Concern Basis)
Statement of Cash Flows 14
Period January 1, 1994 to November 8, 1994
(Going Concern Basis)
Notes to Financial Statements 15
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[LOGO] Peat Marwick LLP
Stamford Square
3001 Summer Street
Stanford, CT 06905
Independent Auditors' Report
The Board of Directors and Stockholders
Inovision Corporation:
We have audited the statement of net assets in liquidation of Inovision
Corporation as of December 31, 1996 and 1995, and the related statement of
changes in net assets in liquidation for the years ended December 31, 1996 and
1995 and the period from November 9, 1994 to December 31, 1994. We have also
audited the statement of operations, stockholders' equity and cash flows for the
period from January 1, 1994 to November 8, 1994. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As described in Note I to the financial statements, the stockholders of
Inovision Corporation approved a plan of liquidation effective November 9,
1994, and the Company commenced liquidation shortly thereafter. As a result,
the Company has changed its basis of accounting for periods subsequent to
November 8, 1994 from the going concern basis to a liquidation basis.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation as of December 31, 1996
and 1995, and the changes in its net assets in liquidation for the years ended
December 31, 1996 and 1995 and the period from November 9, 1994 to December 31,
1994, and the results of its operations and its cash flows for the period from
January 1, 1994 to November 8, 1994, in conformity with generally accepted
accounting principles applied on the bases described in the preceding
paragraph.
As discussed in Note 7 to the financial statements, Inovision Corporation
changed its method of accounting for securities, effective January 1, 1994, to
adopt the provisions of Statement of Financial Accounting Standards No. 115
"Accounting for Certain Investments in Debt and Equity Securities".
/s/ KPMG PEAT MARWICK LLP
Stanford Connecticut
March 21, 1997
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INOVISION CORPORATION
STATEMENT OF NET ASSETS IN LIQUIDATION
AS OF DECEMBER 31, 1995
AND DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(LIQUIDATION BASIS)
December 31, December 31,
1996 1995
----------- -----------
ASSETS
Cash and cash equivalents (note 1) $ 724 $ 200
Marketable Securities (note 1) 2,459 2,972
Settlement rights (note 5) 253 291
----------- -----------
$ 3,436 $ 3,463
----------- -----------
LIABILITIES
Accrued expenses and other liabilities
including liquidation costs (note 3) $ 796 $ 964
Liquidation distribution payable (note 4) 842 863
----------- -----------
1,638 1,827
----------- -----------
Net assets in liquidation (note 1) $ 1,798 $ 1,636
=========== ===========
Number of common shares as of Record Date (note 1) 37,462,569 37,462,569
=========== ===========
Net assets in liquidation per share $ 0.05 $ 0.04
=========== ===========
See accompanying notes to financial statements.
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INOVISION CORPORATION
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
FOR THE PERIOD NOVEMBER 9, 1994 TO DECEMBER 31, 1994
AND FOR THE YEAR ENDED DECEMBER 31, 1995 and 1996
(IN THOUSANDS)
(LIQUIDATION BASIS)
Shareholders' equity at November 9, 1994 (going concern basis) $ 94,070
Adjustments to reflect change to liquidation basis of accounting (note 1) 698
--------
Net assets in liquidation at November 9, 1994 94,768
Interest income 23
Liquidation distributions declared (note 4) (93,656)
--------
Net assets in liquidation at December 31, 1994 $ 1,135
--------
Interest income 144
Reduction in remaining unapplied ITC Settlement contingency reserve 343
Unrealized Gain in Marketable Securities 5
Other Income 9
--------
Net assets in liquidation at December 31, 1995 $ 1,636
--------
Interest income 155
Adjustment to Settlement Rights 38
Unrealized (Loss) in Marketable Securities (28)
Realized (Loss) in Marketable Securities (3)
--------
Net assets in liquidation at December 31, 1996 $ 1,798
========
See accompanying notes to financial statements.
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INOVISION CORPORATION
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(GOING CONCERN BASIS)
Period
1/1/94
to
11/8/94
--------
Litigation (expense) settlement (note 6) (129)
Unrealized loss on marketable securities (note 7) (3,324)
Realized loss on marketable securities (433)
Interest income 3,034
General and administrative expenses (332)
Other income 4
--------
Net income (loss) before cumulative effect of
change in accounting principle (1,180)
Cumulative effect of change in accounting principle (note 7) 1,413
--------
Net income (loss) 233
========
Per common and common equivalent share(1):(note 7)
Primary:
Net income (loss) per share before cumulative effect of
change in accounting principle (0.03)
Net income per share from cumulative effect of change
in accounting principle 0.04
--------
Net income (loss) per share 0.01
========
Weighted average number of common and
common equivalent shares outstanding:
Primary 37,463
========
(1) The effect of the fully diluted earnings per share computation is either
anti-dilutive or not applicable and is therefore not presented.
See accompanying notes to financial statements.
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INOVISION CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)
(GOING CONCERN BASIS)
ADDITIONAL ACCUMULATED
COMMON PAID-IN EARNINGS TREASURY
STOCK CAPITAL (DEFICIT) STOCK TOTAL
------ ---------- ----------- -------- -----
Balance, December 31, 1993 $375 $67,421 $26,204 $(163) $93,837
Net income -- -- 233 -- 233
---- ------- ------- ----- -------
Balance, November 9, 1994 $375 $67,421 $26,437 $(163) $94,070
==== ======= ======= ===== =======
See accompanying notes to financial statements.
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INOVISION CORPORATION
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(GOING CONCERN BASIS)
Period
1/1/94
To
11/8/94
-------
Cash flows from operating activities:
Net income (loss) $ 233
Adjustments to reconcile net income (loss) to cash (used in)
provided by operations:
Cumulative effect of change in accounting principle (1,413)
Realized loss on sale of securities not matured 433
Unrealized loss on marketable securities 3,324
Amortization of bond premium 1,032
Proceeds from sale of marketable securities not matured 10,321
(Increase) decrease in accrued interest receivable 496
Increase (decrease) in accrued litigation expenses
and other liabilities (345)
--------
Net cash provided by (used in) operating activities 14,081
Cash flows used by (used in) investing activities --
Cash flows provided by (used in) financing activities --
--------
Net increase (decrease) in cash and cash equivalents 14,081
Balance at beginning of period, cash and cash equivalents 22,951
--------
Balance at end of period, cash and cash equivalents $ 37,032
========
Supplemental disclosure of cash information:
Interest paid $ --
Income and franchise taxes paid $ 66
See accompanying notes to financial statements.
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INOVISION CORPORATION
Notes to Financial Statements
December 31, 1996, 1995 and 1994
Liquidation Basis Statements - Notes to Financial Statements
(1) Summary of Significant Accounting Policies
On June 16, 1994, the Board of Directors authorized and adopted the Company's
Plan of Complete Liquidation and Dissolution (the "Plan"), which Plan was
approved by Frogtown Holdings, Inc., the Company's majority stockholder (the
"Majority Stockholder"), effective November 9, 1994 (the "Record Date"). The
Plan provides for (a) the distribution to the Company's shareholders in kind or
in proceeds from sales or disposition of all of the Company's assets, (b) the
payment of or provision for all of the Company's liabilities and obligations,
(c) the transfer of any remaining assets to a liquidating trust by September 30,
1998, if applicable, and (4) the dissolution of the Company. Pursuant to the
Plan, a contingency reserve (the "Contingency Reserve") was established to
prosecute the litigation with ITC. The remaining ITC Contingency Reserve was
eliminated in 1995 after receipt of settlement funds (see note 5).
The Company, prior to September 30, 1998, will either liquidate its remaining
assets and make a final distribution of the aggregate amount of cash held by the
Company (after payment or provision for payment of the Company's indebtedness
and other obligations), if any, pro rata per share to each Record Date Holder
or, in lieu of making such distributions, in the discretion of the Board, the
Company may transfer all of its assets to a liquidating trust. In such event,
the Company would distribute beneficial interests in such liquidating trust pro
rata per share to the Record Date Holders, in complete liquidation.
As a result, the Company has adopted the liquidation basis of accounting for all
periods subsequent of November 8, 1994. Under the liquidation basis of
accounting, assets are stated at their estimated net realizable value and
liabilities are stated at their estimated amounts. Investments held at November
9, 1994 were valued based upon their fair market value as determined by the
current trading value as of that date. The Record Date Distribution (see note 4)
was made solely in cash to all stockholders other than the Majority Stockholder.
The Majority Stockholder received its Record Date Distribution by delivery of
(A) certain assets of the Company with an ascribed value of $120,000 (the "In
Kind Assets") and (B) the remainder in cash, cash equivalents and marketable
tax-exempt municipal debt securities with an ascribed value equal to the average
of the quotes thereon by two independent valuation sources on November 8, 1994.
The valuation of assets and liabilities necessarily requires many estimates and
assumptions, and there are substantial uncertainties in carrying out the
provisions of the Plan. The actual value of any additional liquidating
distributions will depend upon a variety of factors not presently determinable.
The valuations presented in the accompanying Statement of
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INOVISION CORPORATION
Notes to Financial Statements
Net Assets in Liquidation represent estimates, based on present facts and
circumstances, of the estimated realizable values of assets, estimated
liabilities and estimated costs associated with carrying out the provisions of
the Plan. The actual values and costs could be higher or lower than the amounts
recorded.
Cash and Cash Equivalents
Cash equivalents consist of cash and tax-exempt municipal debt instruments
having maturities of 90 days or less. The carrying amount is a reasonable
estimate of fair value.
Marketable Securities
Marketable securities consists of tax-exempt municipal obligations with
maturities ranging from 1996 and 1998. Interest income is accrued as earned and
is reflected in the asset value of the marketable securities. Marketable
Securities are valued at approximate market price.
(2) Liquidation Related Party Transactions
On October 11, 1994, the Majority Stockholder of the Company authorized and
adopted the Plan effective on November 9, 1994. The Majority Stockholder voted a
sufficient number of shares to approve the Company's Plan without the vote of
any other stockholder. The sole stockholder of the Majority Stockholder is an
entity controlled by Austin O. Furst, Jr., the Company's Chief Executive Officer
and Chairman of its Board of Directors.
Pursuant to the Company's Plan of Liquidation, certain In Kind Assets with no
book value consisting of remaining development and sequel rights, insurance
claims, incidental tangible assets, and tradenames were treated as part of the
liquidating distribution to the Company's Majority Stockholder at an ascribed
value of $120,000. The Company believes its ascribed values of the In Kind
Assets were reasonable estimates as of the Record Date. To the extent that the
In Kind Assets generate net proceeds to the Majority Stockholder substantially
in excess of the values ascribed, the Company will receive additional proceeds
to distribute to minority stockholders.
The Company believes that it has tax net operating loss carryforwards which, due
to the Company's liquidation, it may not utilize (see note 10). The NOLs are
generally available to offset future income of the Company or other members of
its consolidated group. Furst Holdings, Inc., a company owned by Austin O.
Furst, Jr., the Company's chairman, and members of his family, and Frogtown
Holdings, Inc., a wholly-owned subsidiary of Furst Holdings, Inc., are the
parent of the consolidated group of which the Company is a member and the
Company's immediate parent
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INOVISION CORPORATION
Notes to Financial Statements
company, respectively, and accordingly, under applicable tax law, may utilize
the NOLs. As Furst Holdings or Frogtown Holdings utilizes all or any portion of
the NOLs to offset future income, the portion of the NOLs so utilized will not
inure to the benefit of the Company's other stockholders. If all of such NOLs
had been utilized by the Company prior to liquidation, such utilization would
have resulted in a maximum tax benefit to the Company in an amount not exceeding
approximately 15 cents per share. Frogtown Holdings and Furst Holdings have
entered into a Tax Assumption and Acknowledgment Agreement dated as of October
11, 1994 ("Tax Agreement").
Under the Tax Agreement, Furst Holdings and Frogtown Holdings have acknowledged
that as a matter of law they are liable for any unpaid federal income tax
liability of the Company in excess of the assets of the Company available for
the payment thereof; have agreed to be liable for any unpaid state and local
income tax liability of the Company in excess of the assets of the Company
available for the payment thereof; have agreed to indemnify the Company's other
stockholders in respect of any such federal, state and local income tax
liability; and have waived any rights they may have to seek contribution from
such stockholders in respect of the payment of these taxes or any other
liabilities on behalf of the Company, although Furst Holdings and Frogtown
Holdings have retained any rights they may have in respect thereof against the
Company or any liquidating trust established by the Company.
(3) Accrued Expenses and Other Liabilities
Accrued expenses at December 31, 1996, 1995 and 1994 include estimates of costs
to be incurred in carrying out the Plan. These costs include a reserve for legal
fees and other estimated liabilities. The actual costs could vary significantly
from the related provisions due to uncertainty related to the length of time
required to complete the Plan and complexities and contingencies which may
arise.
(4) Liquidating Distributions
Pursuant to the Plan, substantially all assets of the Company other than the
Contingency Reserve and the Settlement Rights (see note 5) were distributed to
holders of the Company's Common Stock on November 9, 1994 ("Record Date
Holders") in a liquidating distribution (the "Record Date Distribution") in the
amount of $2.50 per share. Through December 31, 1996, assets aggregating
$92,814,000 of the Record Date Distribution were distributed to Record Date
Holders, and the remaining $842,000 of the Record Date Distribution, payable to
Record Date Holders who had not surrendered their share certificates as of
December 31, 1996, is recorded as a liability on the Company's December 31, 1996
Statement of Net Assets in Liquidation.
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INOVISION CORPORATION
Notes to Financial Statements
(5) Settlement Rights
The Company is a party to a settlement agreement (the "ITC Settlement") relating
to the production of an animated motion picture featuring music by the Beatles.
In January 1989, the Company brought an action against ITC Productions, Inc.
("ITC"), Computer Graphics Laboratories, Inc. and GCL Studios, Inc. The Company
agreed to settle the litigation on April 19, 1994. Pursuant to the Company's
Plan of Liquidation a $500,000 contingency reserve was recorded on the
liquidation basis accounting records to provide for liabilities, if necessary,
to be incurred to prosecute the litigation pending the closing of the
settlement. During 1995 this $500,000 Contingency Reserve was applied against
$157,000 of professional fees and expenses, and the remaining balance of
$343,000 was reversed. Pursuant to the ITC Settlement, the Company received
$908,333 in January 1995, $33,333 in January 1996, and has rights to future
payments of (i) $33,333 payable in January 1998, and (ii) depending upon an
amount in respect to taxes which may be payable, between $282,500 and $332,500
payable in January 2000. If principal photography on this motion picture
commences, each of the foregoing payments will be accelerated to the date on
which such principal photography commences.
The Company also is a party to a settlement and escrow agreement (the "Benji
Settlement") with the producers of the theatrical motion picture, "Benji, the
Hunted," pursuant to which the Company shares in the royalties periodically
generated by the film. Pursuant to the Benji Settlement, the Company has
received $1.5 million prior to 1995, an additional $9,302 during 1995 and an
additional $41,688 during 1996. The Company will receive 30% of all future
royalties, until the total royalties received by the Company under the
settlement reaches $3.0 million. At that point, the Company will not be entitled
to share in any future royalties.
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INOVISION CORPORATION
Notes to Financial Statements
Going Concern Basis Statements - Notes to Financial Statements
(6) Description of Business
The Company sold substantially all of its operating assets on July 17, 1991 (the
"Sale") to an indirect wholly-owned subsidiary of Live Entertainment, Inc. Since
the Sale, the Company's principal business activity has been seeking to realize
on its remaining assets.
On May 20, 1993, the Company received $100 million in full settlement of the
litigation against Security Pacific National Bank arising out of Security
Pacific's failure to honor a contractual commitment to provide the Company with
a six-year $100 million line of credit.
(7) Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash equivalents consist of cash and tax-exempt municipal debt instruments
having maturities of 90 days or less. The carrying amount is a reasonable
estimate of fair value.
Marketable Securities
At November 8, 1994, marketable securities consisted of tax-exempt municipal
obligations with maturities ranging from 1996 to 2001. Market value was based on
quoted market prices. Interest income was accrued as earned and was reflected in
the asset value of the marketable securities.
Effective January 1, 1994, the Company implemented Statement of Financial
Accounting Standards (SFAS No. 115), "Accounting for Certain Investments in Debt
and Equity Securities". This statement establishes accounting standards for
investments in equity securities that have readily determinable fair market
values and for all investments in debt securities. This statement superseded the
previous accounting standard for valuation of marketable securities under which
marketable securities were to be reported at the lower-of-cost-or-market. The
cumulative effect of the change in accounting principle increased net income by
$1,413,000 or $0.04 per common share relating to an unrealized gain on
revaluation from cost to fair market value as of January 1, 1994.
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INOVISION CORPORATION
Notes to Financial Statements
Net Income (Loss) Per Share
Net income (loss) per share is based on the weighted average number of shares of
outstanding common stock and common stock equivalents of the Company. Common
stock equivalents consisted of stock options for 51,700 shares of common stock
all of which were effectively canceled on the Record Date.
(8) Stock Options and Warrants
During 1994 no stock options or warrants were granted or exercised. Under the
Plan of Liquidation, the Company closed its transfer books and will not issue
any new stock certificates, effectively canceling all remaining stock options as
of the Record Date of November 9, 1994.
(9) Lease and Commitments
Since 1990, the Company has had no rent commitments and has been supplied office
space on a rent free basis by its outside consultants.
In connection with the Sale (see note 6), the Company, the Company's chairman
and several companies controlled by the chairman entered into an Indemnification
Agreement with the purchaser (the "Agreement"), primarily to provide
indemnification for breaches of representations, warranties and covenants of the
Company contained in the agreement relating to the Sale. The same parties also
entered into a Securities Indemnification Agreement to provide indemnification
for certain securities and other claims relating to the Company. The amount of
such indemnification under the Agreement (but not under the Securities
Indemnification Agreement) will be subject to a threshold of $600,000 and will
be limited to the net proceeds received under the contingent rights distributed
to the chairman's company as a stockholder in the Sale.
(10) Income Taxes
There is no current or deferred federal or state income tax expense in the
current period.
Income tax expense differed from the amounts computed by applying the U.S.
federal income tax rate of 35 percent for the period January 1, 1994 to November
8, 1994, to pretax income from continuing operations as a result of the
following (in percentages):
1994
----
Computed "expected" tax expense (benefit) 35.0%
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Benefit not recognizable --
Other (35.0%)
----
Income tax expense(benefit) -- %
====
The tax effect of temporary differences that give rise to significant portions
of the deferred tax assets at November 8, 1994, are presented below:
November 8, 1994
----------------
Federal net operating loss carryforwards $ 5,950,000
(approximately $17,000,000 at November 8, 1994)
Unrealized losses on marketable securities 668,000
Less valuation allowance (6,618,000)
-----------
Net deferred tax assets $ --
===========
The valuation allowance for deferred tax assets as of January 1, 1994 was
$5,600,000. The net change in the total valuation allowance for the period ended
November 9, 1994 was an increase of $ 1,018,000.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
See Item 12.
ITEM 11. EXECUTIVE COMPENSATION
The following sets forth compensation for services in all capacities to the
Company paid to the Company's Chief Executive Officer for the fiscal years ended
December 31, 1996, 1995 and 1994. The Company had no other executive officers
during this period.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and Principal Position Year Salary Bonus
Austin O. Furst, Jr 1996 None None
Chairman of the Board
of the Company 1995 None None
1994 None None*
* In 1994, the Directors and certain former officers and/or Directors of the
Company received an aggregate $42,500 of compensation for services and past
services, which amount included $5,000 paid to each Director of the Company.
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ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the following Record
Date Holders by: (i) each director of the Company and (ii) all directors and
officers as a group.
Number and Percentage of
Shares of Common Stock
Principal Occupation Director Owned Beneficially as of
Name and Age or Employment Since November 9, 1994 (a)
- ------------------------ -------------------------------- ----------- ---------------------------------
Austin O. Furst, Jr., 53* Chairman of the Board 1981 30,767,400 (b) 82.13%
Natural World, Inc.
Stephen L. Einhorn, 54 President 1985 101,000 **
New Line Home Video
Klaus Eppler, 66 Partner 1985 -- (c) **
Proskauer Rose Goetz
& Mendelsohn LLP, attorneys-at-law
Donald Sting, 56 Private Investor 1988 -- **
All directors and officers as a group 30,868,400 82.40%
(4 persons)
- ----------
* Chairman of the Board and sole executive officer of the Company.
** Less than 1%
See accompanying notes to financial statements.
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(a) The table lists all shares of Common Stock as to which the listed person
have or share the power to vote or direct disposition, as reported to the
Company on November 9, 1994, the date on which trading in Common Stock ceased.
Unless otherwise indicated, each person listed had the sole power to vote and
direct disposition of the shares shown as beneficially owned (under the
applicable rules of the Securities and Exchange Commission) by him.
(b) All shares of the Company listed were held indirectly by Furst Holdings,
Inc. ("Furst Holdings"). Mr. Furst is a director and owns 3,271 shares of the
voting common stock of Furst Holdings (which constitutes 59.15% of the
outstanding voting common stock and 32.71% of the outstanding capital stock of
Furst Holdings). For purposes other than Section 13(d) and 13(g) of the
Securities Exchange Act of 1934, Mr. Furst disclaims (A) beneficial ownership of
1,624,519 (5.28%) of the shares of the Company held indirectly by Furst Holdings
that represent the proportionate interest in such shares of Leslie F. Furst, Mr.
Furst's wife, arising from her (and a family trust formed by her) ownership of
528 shares of the voting common stock of Furst Holdings, (B) beneficial
ownership of 5,325,837 (17.31%) of such shares that represent the proportionate
interest in such shares of certain trusts (the "Trusts") for the benefit of Mr.
Furst's family and of which Mr. Eppler is trustee, arising from the Trusts'
ownership of 1,731 shares of the voting common stock of Furst Holdings and (C)
pecuniary interest in 13,753,027 (44.7%) of such shares that represent the
proportionate interest in such shares of the Trusts, arising from the Trusts'
ownership of 4,470 shares of non-voting common stock of Furst Holdings. Does not
include 479,000 shares of the Company's Common Stock held by the charitable
foundations referred to in footnote (c) below. Mr. Furst is one of the directors
of one such foundation and Mrs. Furst is one of the directors of the other such
foundation. Mr. Furst disclaims beneficial ownership of the shares held by such
foundations.
(c) Does not include any shares held by Furst Holdings. Mr. Eppler is a director
of Furst Holdings and acts as trustee of the Trusts, which own 31.3% of the
outstanding voting common stock and 100% of the outstanding non-voting common
stock of Furst Holdings, which together constitutes 62.01% of the outstanding
capital stock of Furst Holdings. Mr. Eppler disclaims beneficial ownership of
all the shares held indirectly by Furst Holdings for the purposes of Section 13
(d) and 13 (g) of the Securities Exchange Act of 1934 and disclaims beneficial
ownership of all but 19,078,864 (62.01%) of the shares held indirectly by Furst
Holdings (which corresponds to the aggregate percentage of the outstanding
capital stock of Furst Holdings held by Mr. Eppler as trustee for the benefit of
Mr. Furst's family) for all other purposes. Does not include 479,000 shares of
the Company's Common Stock owned by two charitable foundations of which Mr.
Eppler serves as director. One such foundation owns 239,000 shares of the
Company's Common Stock and the other foundation owns 240,000 shares of the
Company's Common Stock. Mr. Eppler shares voting power and power to direct
disposition of the shares held by these foundations and disclaims beneficial
ownership of shares held by them. Mr.
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Eppler serves as a director of Bed Bath & Beyond Inc. and The Dress Barn, Inc.
The following table sets forth, as of November 9, 1994, the date on which
trading on the shares ceased, certain information with respect to the beneficial
ownership of the Company's Common Stock, within the meaning of the Rule 13d-3
under the Securities Exchange Act of 1934, by each person who is known by the
Company to own beneficially more than 5% of the Company's Common Stock as
furnished to the Company:
Shares Beneficially % of Shares
Name (a) Owned Outstanding
Austin O. Furst, Jr.
Furst Holdings, Inc. 30,767,400 (b) 82.13%
Frogtown Holdings, Inc.
(a) The address of Austin O. Furst, Jr., Furst Holdings and Frogtown Holdings,
Inc. ("Frogtown Holdings") is P.O. Box 392, Lewes, Delaware. Mr. Furst, Furst
Holdings and Frogtown Holdings are controlling persons of the Company. All the
shares listed were owned by Frogtown Holdings, which is a wholly-owned
subsidiary of Furst Holdings. Mr. Furst, a director of Frogtown Holdings and
Furst Holdings, owns 59.15% of the outstanding voting common stock of Furst
Holdings. The other directors are Leslie F. Furst, Mr. Furst's wife, and Mr.
Eppler. For all purposes other than Section 13(d) and 13(g) of the Securities
Exchange Act of 1934, Mr. Furst disclaims (A) beneficial ownership of 1,624,519
(5.28%) of the shares of the Company held indirectly by Furst Holdings that
represent the proportionate interest in such shares by Mrs. Furst, arising from
her, and her family trust's, ownership of 528 shares of the voting common stock
of Furst Holdings, (B) beneficial ownership of 5,325,837 (17.31%) of such shares
that represent the proportionate interest in such shares of the Trusts, arising
from the Trusts' ownership of 1731 shares of the voting common stock of Furst
Holdings, and (C) pecuniary interest in 13,753,027 (44.7%) of such shares that
represent the proportionate interest in such shares of the Trusts, arising from
the Trusts' ownership of 4,470 shares of the non-voting common stock of Furst
Holdings.
(b) Does not include 239,000 shares of the Company's Common Stock owned by a
charitable foundation of which Messrs. Furst and Eppler serve as directors and
240,000 shares of the Company's Common Stock owned by a second charitable
foundation of which Mrs. Furst and Mr. Eppler serve as directors.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company believes that it has tax net operating loss carryforwards, which due
to the Company's liquidation, it may not utilize (see note 2 - "Liquidation
Related Party Transactions"). The NOLs are generally available to offset future
income of the Company or other members of its consolidated group. As a result of
its liquidation, the Company does not anticipate utilizing the NOLs. Furst
Holdings, Inc., a company owned by Austin O. Furst, Jr., the Company's chairman,
and members of his family, and Frogtown Holdings, Inc., a wholly-owned
subsidiary of Furst Holdings, Inc., are the parent of the consolidated group of
which the Company is a member and the Company's immediate parent company,
respectively, and accordingly, under applicable tax law, may utilize the NOLs.
As Furst Holdings or Frogtown Holdings utilizes all or any portion of the NOLs
to offset future income, the portion of the NOLs so utilized will not inure to
the benefit of the Company's other stockholders. If all of such NOLs had been
utilized by the Company prior to liquidation, such utilization would have
resulted in a maximum tax benefit to the Company in an amount not exceeding
approximately 15 cents per share. Frogtown Holdings and Furst Holdings have
entered into a Tax Assumption and Acknowledgment Agreement dated as of October
11, 1994 ("Tax Agreement"). Under the Tax Agreement, Furst Holdings and Frogtown
Holdings have acknowledged that as a matter of law they are liable for any
unpaid federal income tax liability of the Company in excess of the assets of
the Company available for the payment thereof; have agreed to be liable for any
unpaid state and local income tax liability of the Company in excess of the
assets of the Company available for the payment thereof; have agreed to
indemnify the Company's other stockholders in respect of any such federal, state
and local income tax liability; and have waived any rights they may have to seek
contribution from such stockholders in respect of the payment of these taxes or
any other liabilities on behalf of the Company, although Furst Holdings and
Frogtown Holdings have retained any rights they may have in respect thereof
against the Company or any liquidating trust established by the Company.
The Record Date Distribution was made solely in cash to all stockholders other
than the Majority Stockholder. The Majority Stockholder received its Record Date
Distribution by delivery of (A) certain assets of the Company with an ascribed
value of $120,000 (the "In Kind Assets") and (B) the remainder in cash, cash
equivalents and marketable tax-exempt municipal debt securities with an ascribed
value equal to the average of the quotes thereon by two independent valuation
sources on November 8, 1994.
The In Kind Assets, which constituted less than 0.2% of the Majority
Stockholder's Record Date Distribution, consisted of certain development and
sequel rights, an insurance claim, and certain incidental tangible assets and
tradenames, none of which had any book value. While no substantial effort was
made by the Company to market the development and sequel rights, the Company
believed that there was no current market for any of
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27
the In Kind Assets and that any sale thereof to a third party would result in
little, if any, consideration therefor received by the Company. Accordingly, the
Company believed that a transfer in kind of such assets to the Majority
Stockholder in partial payment of the Majority Stockholder's Record Date
Distribution would result in a benefit to the Company's minority stockholders by
increasing the Record Date Distribution they received in comparison to that
which they would have received had the In Kind Assets been disposed of prior to
the Record Date. While the Company believes its ascribed values of the In Kind
Assets were reasonable estimates as of the Record Date, these values were
arbitrarily ascribed rather than determined through appraisal, arms' length
negotiation or in any other manner. These prices may not have been as high as
the price a third party might have been willing to pay for the In Kind Assets,
if such a purchaser had been found.
Notwithstanding the foregoing, in connection with the Plan, the Majority
Stockholder executed and delivered to the Company an agreement to pay to the
Company between August 1, 1998 and August 31, 1998 an amount (the "Overage
Amount") equal to 17.95% of the difference between (i) the excess, if any, of
(A) all cash amounts theretofore received in respect of a sale, transfer,
license or other disposition of the In Kind Assets after the Record Date (net of
all costs and expenses incurred in connection with such sale, transfer, license
or other disposition) over (B) $250,000 (the "Minimum Value"); minus (ii) the
amount of any liabilities of the Company paid by the Majority Stockholder;
provided, however, that in no event will the Majority Stockholder be required to
make any payment to the Company if the Overage Amount is not, on the sixtieth
day prior to the third anniversary of the close of the Company's taxable year
during which the Record Date Distribution is made, in an amount equal to or
greater than $50,000 (the "Overage Minimum").
Austin O. Furst, Jr., Chairman of the Board of the Company, is a director and
substantial stockholder of Furst Holdings and members of his immediate family or
trusts for their benefit (the "Trusts") own the balance of the stock in Furst
Holdings. Klaus Eppler, a Director of the Company, is a director of Furst
Holdings and acts as trustee of certain of the Trusts. The law firm in which Mr.
Eppler is a partner has served as general counsel to the Company since its
inception and represented the Company in connection with the Security Pacific
Litigation, the litigations which resulted in the Settlement Rights and the
Plan of Complete Liquidation and Dissolution, and continues to represent the
Company.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Page:
(a) (1) The following financial statements
are included in Part II, Item 8:
Independent Auditors' Report 9
Statement of Net Assets in Liquidation 10
as of December 31, 1995 and 1996
(Liquidation Basis)
Statement of Changes in Net Assets in Liquidation 11
Period November 9, 1994 to December 31, 1994
and Years Ended December 31, 1995 and 1996
(Liquidation Basis)
Statement of Operations 12
Period January 1, 1994 to November 8, 1994
(Going Concern Basis)
Statement of Stockholders' Equity (Deficit) 13
Period January 1, 1994 to November 8, 1994,
(Going Concern Basis)
Statement of Cash Flows 14
Period January 1, 1994 to November 8, 1994
(Going Concern Basis)
Notes to Financial Statements 15
(a)(2) The following financial statement schedule for the year 1994 is submitted
herewith:
None.
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29
(a)(3) Exhibits included herein:
Exhibit Number Exhibits Page
2 (a) Plan of Complete Liquidation and Dissolution incorporated by reference
from exhibit to Information Statement dated October 11, 1994
3 (a) Certificate of Incorporation of the Registrant, as amended.*
b) By-Laws of the Registrant.**
(c)Amendment to Certificate of Incorporation of the Registrant, as amended,
effecting the change of the Registrant's name from Vestron Inc. to Inovision
Corporation.***
10 (a) Tax Assumption and Acknowledgment Agreement dated as of October 11,
1994.****
(b) Letter from Frogtown Holdings, Inc. dated as of October 11, 1994.****
(c) Indemnification Agreement dated as of October 30, 1990 by and among Vestron
Acquisition Corp., Furst Holdings Inc., Frogtown Holdings, Inc., Austin O.
Furst, Jr. and the Registrant (Incorporated by reference to Exhibit 2 to the
Registrant's Current Report on Form 8-K dated October 30, 1990).
(d) Securities Indemnification Agreement dated as of October 30, 1990 by and
among Vestron Acquisition Corp., Furst Holdings Inc., Frogtown Holdings, Inc.,
Austin O. Furst, Jr. and the Registrant (Incorporated by reference to Exhibit 3
to the Registrant's Current Report on Form 8-K dated October 30, 1990).
(e) Key Debenture holder Agreement dated as of October 31, 1990 among the
Registrant, LIVE Entertainment, Inc., Vestron Acquisition Corp., et al.
(Incorporated by reference to Exhibit 4 to the Registrant's Current Report on
Form 8-K dated October 30, 1990).
- ----------
* Incorporated by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1987 (File No. 1-8987). The exhibit number of such
exhibits on said Form 10-K are the same as such number specified above.
** Incorporated by reference to the Company's Registration Statement on Form S-1
(No. 2-99947) which became effective on October 8, 1985. The exhibit numbers of
such exhibits on said Form S-1 are the same as such number specified above.
*** Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1991 (File No. 1-8987). The exhibit
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30
number of such exhibits on said Form 10-K are the same as such numbers specified
above.
**** Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 (File No. 1-8987). The exhibit number of such
exhibits on said Form 10-K are the same as such number specified above.
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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.
March 30, 1997 INOVISION CORPORATION
Registrant
By: /s/ Austin O. Furst, Jr.
----------------------------
Austin O. Furst, Jr.
Chairman of the Board
Principal Executive Officer,
Principal Financial and Accounting 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 dates indicated.
March 30, 1997 /s/ Austin O. Furst, Jr.
--------------------------------
Austin O. Furst, Jr.
Chairman of the Board
and Chief Executive Officer
March 30, 1997 /s/ Stephen L. Einhorn
--------------------------------
Stephen L. Einhorn
Director
March 30, 1997 /s/ Klaus Eppler
--------------------------------
Klaus Eppler
Director
March 30, 1997 /s/ Donald Sting
--------------------------------
Donald Sting
Director
31