1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
COMMISSION FILE NUMBER 0-24752
WAVE SYSTEMS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3477246
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
480 PLEASANT STREET
LEE, MASSACHUSETTS 01238
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
413-243-1600
(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:
Class A Common Stock, $.01 par value
(Title of Class)
The undersigned registrant hereby amends its Annual Report on Form 10-K filed
March 24, 1997 solely for the purpose of including information required under
Part III (Items 10, 11, 12 and 13) of its Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS OF THE REGISTRANT
BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OR EMPLOYMENT
DURING PAST 5 YEARS; POSITIONS HELD WITH COMPANY; OTHER DIRECTOR
NAME AGE DIRECTORSHIPS SINCE
- ---- --- ---------------------------------------------------------------- --------
Peter J. Sprague(1)(4) 57 Chairman of the Company since 1988 and Chief Executive Officer 1991
of the Company since July 1991; Chairman of National
Semiconductor Corporation from 1965 until May 1995; Director of
Enlightened Software, Inc. and Pantepec International, Inc.;
Trustee of the Strang Clinic; Member of Academy of Distinguished
Entrepreneurs, Babson College.
John E. Bagalay, Jr., 63 Managing Director of Community Technology Fund, a venture 1993
Ph.D.(1)(2)(4) capital affiliate of Boston University, since September 1989;
General Counsel of Lower Colorado River Authority from October
1984 to September 1988; former General Counsel of Texas Commerce
Bancshares, Inc. and Houston First Financial Group; Director of
Seragen, Inc., Cytogen, Inc., Hymedix, Inc. and several
privately-held corporations.
Philippe Bertin(3) 47 Manager of Financiere Wagram Poncelet (direct marketing; media) 1993
since December 1991; Manager of Midial S.A. (consumer goods)
from 1984 until 1991.
George Gilder(4) 57 Chairman of the Executive Committee of the Company since 1996; 1993
Senior Fellow at the Discovery Institute in Seattle, Washington;
author of nine books, including Life After Television,
Microcosm, The Spirit of Enterprise and Wealth and Poverty;
contributing editor to Forbes Magazine; Director and President
of Gilder Technology Group, Inc. (publisher of monthly
technology reports); former chairman of the Lehrman Institute
Economic Roundtable; former Program Director for the Manhattan
Institute; recipient of White House award for Entrepreneurial
Excellence from President Reagan.
John E. McConnaughy, 67 Chairman and Chief Executive Officer of JEMC Corporation 1988
Jr. (1)(2)(3)(4) (private investments); Chairman
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BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OR EMPLOYMENT
DURING PAST 5 YEARS; POSITIONS HELD WITH COMPANY; OTHER DIRECTOR
NAME AGE DIRECTORSHIPS SINCE
- ---- --- ---------------------------------------------------------------- --------
and Chief Executive Officer of Peabody International Corporation
(an environmental services company) from 1969 through 1985;
Chairman and Chief Executive Officer of GEO International
Corporation (a nondestructive testing, screen printing and oil
field services company which was spun-off from Peabody) from
February 1981 to October 1992; Director of Riddell Sports, Inc.,
Levcor International, Inc., Transact International, Inc., De-Vlieg
Bullard, Inc. and Mego Financial Corp. Mr. McConnaughy is also a
member of the Board of Trustees of the Strang Clinic and the
Chairman of the Board of the Harlem School of the Arts.
Gene W. Ray, Ph.D.(3) 58 President and Chief Executive Officer and Director of The Titan 1993
Corporation (electronic equipment and communications systems
manufacturer) since 1985.
(1) Member of Nominating Committee.
(2) Member of Compensation Committee.
(3) Member of Audit Committee
(4) Member of Executive Committee
Dr. Gene W. Ray, a director, President and Chief Executive Officer of The
Titan Corporation, serves as a director of the Company pursuant to a
stockholders agreement between the Company and Titan.
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EXECUTIVE OFFICERS OF THE REGISTRANT
All officers are elected annually at the first meeting of the Board of
Directors following the annual meeting of the stockholders, and are subject to
removal at any time by the Board of Directors.
EXECUTIVE
BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OR EMPLOYMENT OFFICER
NAME AGE DURING THE PAST 5 YEARS; POSITIONS HELD WITH COMPANY SINCE
- ---- --- ---------------------------------------------------------------- ---------
Peter J. Sprague(1) 57 Chairman of the Company since 1988, Chief Executive Officer of 1991
the Company since 1991; Chairman of National Semiconductor
Corporation from 1965 to 1995.
Steven Sprague(1) 32 President and Chief Operating Officer of the Company since May 1996 and
1996; President of Wave Interactive Network from June 1995 to from 1994
December 30, 1996; Vice President of Operations of the Company to 1995
from April 1994 to June 1995; employee of the Company in the
areas of operations and strategic planning from November 1992 to
April 1994; consultant to the Company from March 1992 to
November 1992; President of Tech Support, Incorporated (hardware
technical support information on CD-ROM) from June 1992 to
November 1992; sole proprietor of SKS Environmental Sales
(manufacturers' representative for water treatment companies)
from June 1991 to November 1992.
James R. Franklin 54 Vice President of Product Development of the Company since 1996
February 1996; Vice President of Program Management and Software
Development of Kaye Instruments, Inc. from 1985 to 1995.
(1) Mr. Peter J. Sprague is the father of Mr. Steven Sprague.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and executive officers, and
persons owning more than ten percent of a registered class of the Company's
equity securities, to file with the Securities and Exchange Commission reports
of ownership and changes in ownership of equity securities of the Company. Such
persons are also required to furnish the Company with copies of all such forms.
Based solely upon a review of the copies of such forms furnished to the
Company and, in certain cases, written representations that no Form 5 filings
were required, the Company believes that, with respect to the 1996 fiscal year,
all required Section 16(a) filings were made, except that Mr. John E.
McConnaughy, Jr., a director of the Company, filed a Form 5 in connection with
the sale of 30,000 shares of Class A Common Stock which took place in December
1996.
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ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information with respect to the
compensation paid or awarded by the Company to the Chief Executive Officer and
the only other executive officers whose cash compensation exceeded $100,000
(collectively, the "Named Executive Officers") for services rendered in all
capacities during 1994, 1995 and 1996.
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------
-------------------------- NUMBER OF SHARES
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) UNDERLYING OPTIONS(#)
- --------------------------- ---- --------- -------- ---------------------
Peter J. Sprague 1996 $160,000 $ 50,000 -0-
Chairman and Chief 1995 $160,000 $ -0- 1,995
Executive Officer 1994 $125,200 $ 100,000 -0-
Steven Sprague(1) 1996 $131,666 $ -0- 150,000
President and 1995 $110,000 $ -0- 1,995
Chief Operating Officer 1994 $ 88,750 $ -0- -0-
(1) Mr. Steven Sprague was elected President and Chief Operating Officer on May
23, 1996 and was not previously an executive officer during 1996. Prior to
that, Mr. Steven Sprague was Vice President of Operations of the Company
from April 1994 to June 1995 and employee of the Company in the areas of
operations and strategic planning from November 1992 to April 1994.
Option Grants Table
The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1996 by the Company to the
Named Executive Officers.
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
NUMBER OF SHARES % OF TOTAL PRICE APPRECIATION FOR OPTION
UNDERLYING OPTIONS GRANTED EXERCISE TERM (1)
OPTIONS TO EMPLOYEES PRICE EXPIRATION ------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- ----------- ----------- --------- ---- ------ -------
Peter J. Sprague -0- -0- - - -0- -0-
Steven Sprague 150,000(2) 12% $3.09 5/23/06 291,493 738,700
- --------------
(1) The potential realizable value of the options reported above was calculated
by assuming 5% and 10% compounded annual rates of appreciation of the
common stock from the date of grant of the options until the expiration of
the options, based upon the market price on the date of grant. These
assumed annual rates of appreciation were used in compliance with the rules
of the Securities and Exchange Commission and are not intended to forecast
future price appreciation of the common stock.
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(2) These options vest in three installments on May 23, 1997, May 23, 1998 and
May 23, 1999 and may become fully vested upon certain sales of assets,
mergers and consolidations involving the Company.
Fiscal Year End Option Value Table
The following table sets forth information regarding the aggregate number
and value of options held by the Named Executive Officers as at December 31,
1996. No options were exercised by the Named Executive Officers during 1996.
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1996 (#) AT DECEMBER 31, 1996 ($)(1)
------------------------------------ --------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Peter J. Sprague....................... 330,665 1,330 $ 20,011 $ 1,623
Steven Sprague......................... 43,865 151,330 $ 811 $ 1,623
(1) The last reported sale price for the Company's Class A Common Stock on the
NASDAQ National Market System on December 31, 1996 was $2.31 per share.
Value is calculated on the basis of the difference between the respective
option exercise prices and $2.31, multiplied by the number of shares of
common stock underlying the respective options.
Compensation of Directors
Directors presently receive no cash compensation for serving on the Board
of Directors. Under the Company's Non-Employee Directors Stock Option Plan, each
director who is not an employee of the Company receives an annual grant of
options to purchase 10,000 shares of Class A Common Stock at fair market value.
The options are granted upon re-election after the annual meeting of the
stockholders and vest 25% after each three-month period following grant. Options
terminate upon the earliest to occur of (i) subject to (ii) below, three months
after the optionee ceases to be a director of the Company, (ii) one year after
the death or disability of the optionee, and (iii) ten years after the date of
grant. If there is a change of control of the Company, all outstanding stock
options will become immediately exercisable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Company's Class A and Class B Common Stock as of
March 31, 1997 (except as otherwise noted) by (i) each stockholder who is known
by the Company to own beneficially more than five percent of the outstanding
Class A or Class B Common Stock, (ii) each director of the Company, (iii) each
of the executive officers of the Company named in the Summary Compensation Table
above, and (iv) all directors and executive officers of the Company as a group.
Holders of Class A Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders of the Company. Holders of Class
B Common Stock are entitled to one vote per share on all matters submitted to a
vote of the stockholders, except that holders of Class B Common Stock will have
five votes per share in cases where one or more directors are nominated for
election by persons other than the Company's Board of Directors and where there
is a vote on any merger, consolidation or other similar transaction which is not
recommended by the Company's Board of Directors. In addition, holders of Class B
Common Stock will have five votes per share on all matters submitted to a vote
of the stockholders in the event that any person or group of persons acquires
beneficial ownership of 20% or more of the
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outstanding voting securities of the Company. Shares of Class B Common Stock are
convertible into shares of Class A Common Stock on a one-for-one basis at the
option of the holder.
PERCENT
OF ALL
NUMBER OF SHARES NUMBER OF SHARES OUTSTANDING
OF CLASS A COMMON PERCENT OF OF CLASS B COMMON PERCENT OF COMMON
BENEFICIAL OWNER(1) STOCK OWNED(2) CLASS STOCK OWNED CLASS STOCK(3)
------------------- -------------- ----- ----------- ----- --------
Peter J. Sprague(4) 1,330 * 1,898,834 31.5 10.4
Steven Sprague(5) 89,830 * 272,757 4.7 2.0
John E. Bagalay, Jr.(6) 36,000 * 637,804 11.0 3.7
Philippe Bertin(7) 36,000 * 16,000 * *
George Gilder(8) 52,667 * 2,000 * *
John E. McConnaughy, Jr.(9) 36,000 * 545,000 9.6 3.2
Gene W. Ray(10) 36,000 * 426,576 7.5 2.6
The Titan Corporation(11) 0 - 426,576 7.5 2.4
Boston University(12) 0 - 637,804 11.0 3.5
All executive officers and directors
as a group (8 persons)(13) 304,494 2.4 3,798,971 59.7 21.8
*Less than one percent.
(1) Each individual or entity has sole voting and investment power, except as
otherwise indicated.
(2) Does not include shares of Class A Common Stock issuable upon the
conversion of Class B Common Stock.
(3) In circumstances where the Class B Common Stock has five votes per share,
the percentages of total voting power would be as follows: Peter J.
Sprague, 22.4%; Steven Sprague, 3.5%; John E. Bagalay, Jr., 7.7%; Philippe
Bertin, less than 1%; George Gilder, less than 1%; John E. McConnaughy,
Jr., 6.8%; Gene W. Ray, 5.3%; The Titan Corporation, 5.2%; Boston
University, 7.7%; and all Executive Officers and Directors as a group,
43.6%.
(4) Includes 331,330 shares which are subject to options presently exercisable
or exercisable within 60 days. Also includes 320,000 shares held in trust
for the benefit of Mr. Sprague's adult children, and for which Mr. Sprague
is a trustee.
(5) Includes 94,530 shares which are subject to options presently exercisable
or exercisable within 60 days.
(6) Includes 32,000 shares which are subject to options presently
exercisable or exercisable within 60 days. Also includes 637,804 shares
beneficially owned by Boston University, comprised of: (a) 542,856
shares and (b) 94,948 shares subject to warrants presently exercisable.
Mr. Bagalay is Managing Director of Community Technology Fund, the
venture capital affiliate of Boston University, which holds and manages
the venture capital investments of Boston University. Mr. Bagalay
disclaims beneficial ownership of the shares held by Boston University.
The mailing address of Mr. Bagalay is 147 Bay State Road, Boston,
Massachusetts.
(7) Includes 32,000 shares which are subject to options presently
exercisable or exercisable within 60 days and 16,000 shares subject to
warrants presently exercisable. Excludes 464,286 shares beneficially
owned by Financiere Wagram Poncelet comprised of: (a) 442,857 shares,
and (b) 21,429 shares subject to warrants presently exercisable. Mr.
Bertin serves as Manager of Financiere Wagram Poncelet. Mr. Bertin
disclaims beneficial ownership of the shares held by Financiere Wagram
Poncelet, other than 16,000 shares subject to warrants granted to Mr.
Bertin by Financiere Wagram Poncelet.
(8) Includes 48,667 shares which are subject to options presently exercisable
or exercisable within 60 days.
(9) Includes 32,000 shares which are subject to options presently exercisable
or exercisable within 60 days.
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(10) Includes 32,000 shares which are subject to options presently exercisable
or exercisable within 60 days. Also includes 415,776 shares beneficially
owned by The Titan Corporation for which Mr. Ray serves as a director,
President and Chief Executive Officer and 10,800 shares subject to warrants
presently exercisable which are owned by The Titan Corporation. Mr. Ray
disclaims beneficial ownership of the shares held by The Titan Corporation.
The mailing address of Mr. Ray is c/o The Titan Corporation, 3033 Science
Park Road, San Diego, California 92121.
(11) Includes 10,800 shares subject to warrants presently exercisable. The
business address of The Titan Corporation is 3033 Science Park Road, San
Diego, California 92121.
(12) Includes 94,948 shares subject to warrants presently exercisable. The
business address of Boston University is 147 Bay State Road, Boston,
Massachusetts.
(13) Includes 913,798 shares which are subject to options and warrants presently
exercisable or exercisable within 60 days.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NOTE RECEIVABLE FROM DIRECTOR/OFFICER
On November 16, 1992, the Company made a personal loan to Mr. Peter J.
Sprague, Chairman and Chief Executive Officer of the Company, as evidenced by a
note for $150,000, which sum was due and payable to the Company on January 16,
1993 and which bore interest at the rate of 10% per annum. On the due date, the
note was canceled and the total amount owed was "rolled-over" into a subsequent
note, dated May 12, 1993 for $150,000, plus accrued interest. The note is due on
demand by the Company and accrues interest at the rate of 10% per annum. On
April 22, 1993, the Company made an additional loan to Mr. Sprague for $23,175
as evidenced by a subsequent note, which is due on demand by the Company and
which bears interest at a rate of 10% per annum. All of these loans were made to
Mr. Sprague for personal reasons. As of December 31, 1996, Mr. Sprague's
aggregate indebtedness (including accrued interest) to the Company under the
notes totaled $244,705. No demand has been made as of the date hereof. The notes
are secured by a pledge of 67,000 shares of Class B Common Stock.
WAVE INTERACTIVE NETWORK, INC.
Wave Interactive Network, Inc. ("WIN") was incorporated as a separate
subsidiary of the Company in June 1995 and spun out in November 1995, when
shares in the subsidiary were transferred in exchange for a demand note of
$668,000 accruing interest at a rate of Prime plus 1% (the "Note"). The amount
of the Note was based on the level of funding provided in 1995 to WIN by the
Company. In this transaction, the Company retained a 1% ownership in WIN and
transferred the remaining ownership to certain individuals, including former
employees (approximately 65% was transferred to Steven Sprague, President and
CEO of WIN, and three other children of Mr. Peter J. Sprague, Chairman and CEO
of the Company). Subject to certain limitations associated with WIN's ability to
raise additional capital, the note was convertible into an undiluted 20% of the
common shares of WIN at the option of Wave. The note was fully reserved as its
collectibility was dependent upon WIN's ability to raise additional capital.
On December 30, 1996 WIN was merged with and into the Company. Pursuant to
the Plan and Agreement of Merger between Wave and WIN, dated as of October 18,
1996 (the "Merger Agreement"), the Company issued to the shareholders of WIN,
other than the Company (the "WIN Shareholders"), a total of 375,000 unregistered
shares of the Company's Class B Common Stock based upon a conversion ratio of
37.88 shares of the Company's Class B Common Stock for each
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share of common stock, par value $.01, of WIN held by the WIN Shareholders.
Under the Merger Agreement, the Company also agreed to issue to the WIN
Shareholders 325,000 shares of the Company's Class B Common Stock contingent
upon the achievement of a specified operating milestone prior to December 30,
1999. On October 18, 1996, as part of the merger the Company assumed a debt
obligation of WIN owed to a third party by issuing a convertible note in the
principal amount of $455,911 due on April 18, 1998 bearing interest at a rate
equal to ten percent per annum (the "Convertible Note"). The Convertible Note is
convertible into a number of the Company's unregistered Class A Common Stock for
a period beginning on April 1, 1997 and ending April 18, 1998 calculated as the
greater of (a) the number of shares that would be acquired at 80% of the fair
market value of the Class A Common Stock or (b) 250,000 shares plus 2,000 shares
for each month the note is outstanding. Also, as part of the merger, the Company
issued a warrant for the purchase of unregistered shares of the Company's Class
A Common Stock to such third party at a price of $1.25 per share. The exercise
period of such warrant is defined as the period commencing on the earlier date
of the conversion of the Convertible Note or April 18, 1998 and ending five
years from the date of issuance of such warrant. The number of shares able to be
purchased under this warrant is based on a formula of $170,000 divided by 80% of
the fair market value of the Class A Common Stock at the time of conversion.
COMPENSATION TO STEVEN SPRAGUE
Steven Sprague received aggregate compensation of $131,666 and $110,000
for services rendered to the Company in 1996 and 1995, respectively. Steven
Sprague is the son of Mr. Peter J. Sprague, the Chairman and Chief Executive
Officer of the Company.
AMENDED AND RESTATED LICENSE AGREEMENT AND ASSIGNMENT
Pursuant to an Amended and Restated License Agreement, dated February 14,
1994, and related Patent Assignment and Security Agreement, Mr. Peter J. Sprague
assigned his interest in a patent for the metering and usage of serial data
information to the Company in exchange for a non-terminable royalty interest.
The Company has agreed to payment of royalties to Mr. Sprague of 2% of the gross
revenues (less actual amounts paid to information, database and content
providers, hardware manufacturers and suppliers, search and retrieval software
suppliers, consolidators of information and network providers) derived from the
Company's technology based on the patent. The royalty payments are allocated 75%
to Mr. Sprague and 25% to a former officer of the Company, and are secured by a
security interest in and to the patent.
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LICENSE AND CROSS-LICENSE AGREEMENT
On May 1, 1992, the Company entered into a Joint Technology Development
Agreement and License and Cross-License Agreement with The Titan Corporation
whereby Titan granted to the Company license rights to the use of certain
patents which are co-owned by Titan. Dr. Gene W. Ray, a director of the Company,
is a director, President and Chief Executive Officer of Titan. The Company
granted to Titan the exclusive right to make for, sell in, and lease in a
"Retained Market," as defined in the agreement, the subject matter described in
any Company patent. The Retained Market is defined generally as the market for
"Government Information," as defined in the agreement, used solely by a
government entity, and the market for products used to access such information.
On February 28, 1997 the Company and Titan executed an addendum to the License
and Cross-License Agreement whereby the Company received a sole license to the
licensed patent to develop and distribute products to the in-home consumer
microcomputer market segment. Under this addendum to the License and
Cross-License Agreement, Titan waived any and all defaults by the Company under
the License and Cross-License Agreement occurring prior to February 28, 1997.
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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 amendment No.1 to
Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: April 20, 1997
WAVE SYSTEMS CORP.
By: /s/ Peter J. Sprague
-------------------------------------
Name: Peter J. Sprague
Title: Chairman, Chief Executive Officer
(Principal Financial Officer and Duly
Authorized Officer of the Registrant)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
amendment No.1 to Annual Report on Form 10-K has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Peter J. Sprague
- ----------------------------
Peter J. Sprague Chairman and Chief Executive Officer April 20, 1997
(Principal Financial Officer and Duly
Authorized Officer of the Registrant)
/s/ Steven Sprague
- ----------------------------
Steven Sprague President and Chief Operating Officer April 20, 1997
/s/ James R. Franklin
- ----------------------------
James R. Franklin Vice President of Product Development April 20, 1997
/s/ Gail S. Titus
- ----------------------------
Gail S. Titus Controller April 20,1997
/s/ John E. Bagalay, Jr.
- ----------------------------
John E. Bagalay, Jr. Director April 20, 1997
/s/ Philippe Bertin
- ----------------------------
Philippe Bertin Director April 20, 1997
/s/ George Gilder
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George Gilder Director April 20, 1997
/s/ John E. McConnaughy, Jr.
- ----------------------------
John E. McConnaughy, Jr. Director April 20, 1997
/s/ Gene W. Ray
- ----------------------------
Gene W. Ray Director April 20, 1997
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