EXHIBIT 3

DIRECTOR COMPENSATION

The Company pays each director who is not also a full-time employee of the
Company an annual retainer of $15,000, payable quarterly, for his or her
services as a director of the Company. In addition, each such director
generally receives $500 for each meeting of any Board committee attended by
such director. All directors are reimbursed for their reasonable out-of-pocket
expenses incurred in connection with attendance at meetings of, and other
activities relating to, serving on the Board and any Board committee. No
compensation has been paid for attendance at meetings of the Executive
Committee.

COMPENSATION OF EXECUTIVE OFFICERS

COMPENSATION SUMMARY

The following table summarizes the compensation of the persons who served as
Chief Executive Officer of the Company during Fiscal Year 1995 and each of the
other executive officers of the Company who were serving as such at the end of
Fiscal Year 1995 (collectively, the "Named Executives") for the Company's last
three fiscal years for services rendered in all capacities to the Company and
its subsidiaries.

SUMMARY COMPENSATION TABLE

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- -----------------
SECURITIES
NAME AND FISCAL YEAR UNDERLYING OPTION ALL OTHER
PRINCIPAL POSITION ENDED MARCH 31, SALARY($) BONUS($) AWARDS (#) COMPENSATION($)
------------------ --------------- ---------- --------- ----------------- ---------------

Mark L. Pacala, 1995(1) $ 190,385 $ 100,000 800,000 $14,130(2)
President and Chief 1994 -- -- -- --
Executive Officer 1993 -- -- -- --
Robert A. Whitman, 1995 -0- -0- -0- -0-
Chairman of the Board, 1994 -0- -0- -0- -0-
Interim President and 1993 -- -- -- --
Chief Executive
Officer(3)
Paul A. Shively 1995 230,000 -0- -0- 5,319(4)
Senior Vice President, 1994 230,000 82,500 -0- 3,049
Chief Financial Officer 1993 169,583 -0- -0- 208,057
and Treasurer
Brian C. Swinton 1995 153,635 91,000 100,000 74,372(6)
Senior Vice President-- 1994(7) 25,961 39,063 -0- 500
Chief Financial Officer 1993 -- -- -- --
and Treasurer(5)
Richard A. Huber 1995 87,077 65,000 55,000 822(8)
Vice President-- 1994(9) 49,039 36,095 -0- 39,788
Operations 1993 -- -- -- --
Finance and Secretary

- --------
(1) Mr. Pacala became President and Chief Officer of the Company on October
24, 1994. Prior to that time, he was not an officer or employee of the
Company.
(2) The amount shown represents payments made to Mr. Pacala in reimbursement
of temporary living and relocation expenses incurred by him in connection
with the commencement of his employment with the Company.

(3) While concurrently serving as President and Co-Chief Executive Officer of
Hampstead, Mr. Whitman served as interim President and Chief Executive
Officer of the Company from July 19, 1993 until Mr. Pacala commenced his
employment with the Company on October 24, 1994. Prior to July 19, 1993,
Mr. Whitman was not an officer of the Company. Mr. Whitman received no
compensation from the Company for services rendered by him as interim
President and Chief Executive Officer of the Company. See "The Board of
Directors and its Committees--Director Compensation" with respect to
compensation paid to members of the Board, including Mr. Whitman, and
"Certain Relationships and Transactions--General and Administrative
Services" for a discussion of a payment made in June 1994 by the Company
to Forum Holdings in respect of various general and administrative
services provided to the Company by Forum Holdings and its
representatives, including, among others, Mr. Whitman's services as
interim President and chief Executive Officer of the Company.
(4) The amount shown represents employer contributions of $2,494 and $2,825
made to the Company's 401(k) Savings Plan and Employee Stock Purchase
Plan, respectively, on behalf of Mr. Shively.
(5) Mr. Shively resigned all positions held by him with the Company and its
subsidiaries and affiliates effective as of June 30, 1995 and received a
severance payment of $254,200. Mr. Shively, however, has agreed to serve
as a consultant to the Company on matters pertaining to the conduct of the
business and operations of the Company and its affiliates.
(6) The amount shown represents payments made to Mr. Swinton in reimbursement
of relocation expenses incurred by him in connection with the commencement
of his employment with the Company.
(7) Mr. Swinton became Senior Vice President--Product Development, Research
and Marketing of the Company on January 24, 1994. Prior to that time, he
was not an officer or employee of the Company.
(8) The amount shown represents (i) payments of $416 made to Mr. Huber in
reimbursement of relocation expenses incurred by him in connection with
the commencement of his employment with the Company and (ii) employer
contributions of $406 made to the Company's 401(k) Savings Plan on behalf
of Mr. Huber.
(9) Mr. Huber became Vice President--Operations Finance of the Company on
November 10, 1993. Prior to that time, he was not an officer or employee
of the Company.

FISCAL YEAR 1995 STOCK OPTION GRANTS

The following table sets forth certain information regarding grants of stock
options made during Fiscal Year 1995 to the Named Executives pursuant to the
Company's Equity Incentive Plan (the "Incentive Plan"). No grants of stock
appreciation rights were made during Fiscal Year 1995 to any of the Named
Executives.

STOCK OPTION GRANTS IN FISCAL YEAR 1995

POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM
- ------------------------------------------------------------------------------ -----------------------------
% OF TOTAL
OPTIONS MARKET
SECURITIES GRANTED TO PRICE ON
UNDERLYING EMPLOYEES EXERCISE GRANT
OPTIONS IN FISCAL PRICE DATE EXPIRATION
NAME GRANTED (#) YEAR 1995 ($/SH) ($/SH)(1) DATE 0% ($) 5% ($) 10% ($)
---- ----------- ---------- -------- --------- ---------- ------- ---------- ----------

Mark L. Pacala.......... 800,000(2) 60.9% $5.875 $5.875 8/7/2004 $ -0- $2,955,805 $7,490,590
Robert A. Whitman....... N/A N/A N/A N/A N/A N/A N/A N/A
Paul A. Shively......... N/A N/A N/A N/A N/A N/A N/A N/A
Brian C. Swinton........ 100,000(3) 7.6% 4.00 7.00 10/24/2004 300,000 740,226 1,415,620
Richard A. Huber........ 55,000(3) 4.2% 4.00 7.00 10/24/2004 165,000 407,124 778,591

- --------
(1) The "market price" shown is the average of the closing bid and asked
prices for shares of Common Stock as reported on the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") on the
grant date or, if such date was not a trading day, the trading day
immediately preceding such date.
(2) The option vests in five equal annual installments commencing August 7,
1995.
(3) The option vests in five equal annual installments commencing October 24,
1995.

FISCAL YEAR-END OPTION VALUES

The following table sets forth certain information regarding the total
number of stock options held by each of the Named Executives, and the
aggregate value of such stock options, on March 31, 1995. None of such stock
options was exercisable as of such date.

AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1995
AND FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES
SHARES UNDERLYING VALUE OF IN-THE-MONEY
ACQUIRED ON VALUE UNEXERCISED OPTIONS UNEXERCISED OPTIONS AT
NAME EXERCISE (#) REALIZED($) AT FISCAL YEAR-END FISCAL YEAR-END ($)(1)
---- ------------ ----------- -------------------- ----------------------

Mark L. Pacala.......... 0 0 800,000 $750,000
Robert A. Whitman....... 0 0 N/A N/A
Paul A. Shively......... 0 0 N/A N/A
Brian C. Swinton........ 0 0 100,000 281,250
Richard A. Huber........ 0 0 55,000 154,688

- --------
(1) In-the-money options are options having a per share exercise price below
$6.8125, the average of the closing bid and asked prices for shares of
Common Stock as reported on NASDAQ on March 31, 1995. The dollar amounts
shown represent the amount by which the product of $6.8125 and the number
of shares purchasable upon the exercise of such in-the-money options
exceeds the aggregate exercise price payable upon such exercise.

EMPLOYMENT AGREEMENT WITH CHIEF EXECUTIVE OFFICER

Mr. Pacala's employment agreement provides for his employment as President
and Chief Executive Officer of the Company for a term expiring on October 24,
1998. The agreement provides for a base salary of not less than $450,000 per
year, plus an annual performance bonus in an amount up to 60% of his then-
current annual base salary, such bonus to be determined by the Board or the
Compensation Committee based upon performance objectives established by the
Board or the Compensation Committee after consultation with Mr. Pacala.
However, Mr. Pacala will not receive a bonus in respect of Fiscal Year 1995.
Rather, he will receive a bonus in the amount of $270,000 on October 24, 1995,
and any bonus otherwise payable to Mr. Pacala following the Company's fiscal
year ending March 31, 1996 will be reduced by approximately $152,000. Pursuant
to his employment agreement, Mr. Pacala was paid, in connection with the
commencement of his employment with the Company, a one-time payment of
$100,000 in order to induce him to forego the payment of an equivalent amount
that would have been paid to him by his previous employer had he continued in
his former employment and was granted an option to purchase 800,000 shares of
Common Stock at $5.875 per share, the average of the closing bid and asked
prices for shares of Common Stock on NASDAQ on the trading day immediately
preceding the date of grant, which option becomes exercisable in five equal
annual installments commencing on August 7, 1995. The agreement also provides
Mr. Pacala certain welfare benefits.

If Mr. Pacala's employment is terminated by the Company other than for cause
or as a result of death, disability or a change in control, the Company will
for two years following such termination pay Mr. Pacala his then-current base
salary (subject to offset for compensation received by Mr. Pacala from other
parties) and provide him the welfare benefits that he was receiving
immediately prior to his termination (subject to termination in the event that
Mr. Pacala receives comparable benefits from a subsequent employer). If Mr.
Pacala's employment is terminated by the Company (other than as a result of
death or disability or for cause) or by Mr. Pacala (for any reason) within 12
months following a change in control, the Company will pay to Mr. Pacala a
lump sum severance payment equal to two times his then-current base salary and
will provide him the welfare benefits that he was receiving immediately prior
to such termination. In those circumstances, in the event that the change in
control occurs prior to April 24, 1996, Mr. Pacala would also have the right
to cause the Company to repurchase the then-unexercised portion of his stock
option at a price of $0.625 per share of Common Stock then underlying such
option.

SEVERANCE PAY POLICY

Under the Company's severance pay policy, severance pay may be granted to
eligible employees, including the Named Executives (other than Messrs.
Whitman, Pacala and Shively), if the termination of their employment is
initiated by the Company as the result of any one of certain qualifying
events, including reductions in force, position elimination and the inability
to meet the requirements of a position, but not as a result of voluntary
resignation, retirement, merger into or acquisition by another organization
(if the employee is offered employment with the successor organization),
discharge for misconduct and certain other reasons. Under the severance pay
policy, executive officers generally are entitled to receive severance pay
equal to one month's pay plus two additional weeks' pay for each year of
continuous service, up to a maximum of eight months' pay.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

After the Investors acquired a majority interest in the Company in
connection with the recapitalization of the Company in June 1993 (the "1993
Recapitalization"), the Company undertook to assemble a top-quality management
team consisting of experienced executives capable of pursuing the Company's
growth strategy. Following an extensive search, during Fiscal Year 1995, the
Company hired Mark L. Pacala, formerly a senior executive at The Walt Disney
Company, as President and Chief Executive Officer. Mr. Pacala commenced his
employment with the Company on October 24, 1994. His compensation arrangements
are described under the caption "Compensation of Executive Officers--
Employment Agreement with Chief Executive Officer" above.

The Company has hired other new senior executives in addition to Mr. Pacala,
including James R. Foulger, Senior Vice President--Acquisitions, Dennis L.
Lehman, Senior Vice President and Chief Financial Officer, Brian C. Swinton,
Senior Vice President--Product Development, Research and Marketing, and
Richard A. Huber, Vice President--Operations Finance. Each of Messrs. Swinton
and Huber commenced his employment with the Company prior to the beginning of
Fiscal Year 1995, and each of Messrs. Foulger and Lehman commenced his
employment with the Company after the end of Fiscal Year 1995. Each of Messrs.
Foulger, Lehman, Swinton and Huber has had substantial senior management
experience with other companies engaged in the senior living or healthcare
fields.

The compensation arrangements entered into with the Company's new executive
officers reflect the Company's principal objectives with respect to executive
compensation, which are to (i) provide appropriate incentives for the
achievement of the Company's performance objectives, (ii) help ensure that the
Company is able to attract and retain top-quality management personnel, and
(iii) ensure that an appropriate portion of executive compensation is variable
and dependent upon increases in the value of an investment in the Company.

The compensation packages for the Company's new executive officers are
comprised of cash salary, cash bonus and stock options granted under the
Incentive Plan. The Compensation Committee believes that the nature and level
of the compensation of these executives is reasonable and appropriate in light
of the objectives underlying the Company's executive compensation policy, the
Company's financial and operational performance and prospects, individual
levels of experience and prevailing executive compensation practices.

Following the 1993 Recapitalization, Mr. Whitman served as interim President
and Chief Executive Office of the Company from July 19, 1993 until October 24,
1994, when Mr. Pacala commenced his employment with the Company. Mr. Whitman
received no compensation from the Company for services rendered by him in that
capacity. See "The Board of Directors and its Committees--Director
Compensation" with respect to compensation paid to members of the Board,
including Mr. Whitman, and "Certain Relationships and Transactions--General
and Administrative Services" for a discussion of a payment made in June 1994
by the Company to Forum Holdings in respect of various general and
administrative services provided to the Company by Forum Holdings and its
representatives, including, among others, Mr. Whitman's services as interim
President and Chief Executive Officer of the Company.

In addition, at the Company's request, Mr. Shively, who until his recent
resignation had been an executive officer of the Company since 1974, continued
as an executive officer of the Company following the 1993 Recapitalization in
order to ease the transition to a new management team. Mr. Shively's
compensation package for Fiscal year 1995 was determined considering the
Company's financial and operational performance, the Company's historical
compensation levels and practices as they relate to Mr. Shively, his levels of
responsibility and experience and subjective judgments regarding his
individual performance. No relative weights were assigned to such factors. The
Compensation Committee believes that the level of Mr. Shively's compensation
was appropriate in light of such factors.

The Company believes that the compensation paid to its executive officers
during Fiscal Year 1995 is deductible for federal income tax purposes. In
connection with future executive compensation determinations, the Company
presently intends to consider, together with such other factors as may be
deemed pertinent under the circumstances, whether such compensation will be
deductible for federal income tax purposes.

The members of the Compensation Committee are directors whose principal
employment is with affiliates of the Investors. The Investors, in the
aggregate, beneficially own a majority of the Company's outstanding Common
Stock. See "Security Ownership of Certain Beneficial Owners and Management"
and "Certain Relationships and Transactions."

Respectfully submitted,

Peter P. Copses
Daniel A. Decker

CERTAIN RELATIONSHIPS AND TRANSACTIONS

SETTLEMENT OF CERTAIN LITIGATION

Pursuant to a court-approved settlement agreement, during Fiscal Year 1995,
the Company settled certain claims asserted by Forum/Classic, L.P., an entity
affiliated with the Pritzker family, and others against the Company, the
Investors and certain other persons (including persons who comprised the Board
immediately prior to the 1993 Recapitalization) in a suit filed in connection
with the 1993 Recapitalization. In connection with the settlement, the Company
reimbursed the plaintiffs for $500,000 of the expenses incurred by them in
that litigation.

CERTAIN CONSULTING SERVICES

The Company and Mr. Eden have entered into an agreement, effective as of
March 31, 1995, pursuant to which Mr. Eden will render to the Company such
consulting and advisory services as the Company's Chief Executive Officer may
from time to time request regarding the Company and the retirement industry.
In connection with the execution of the agreement, the Company paid to Mr.
Eden $137,500 in respect of certain consulting services provided by him to the
Company prior to such time, including services provided during Fiscal Year
1995. Under this agreement, which terminates on December 31, 1996, the Company
will pay to Mr. Eden an annual retainer of $31,250 and certain additional
amounts in certain circumstances.

GENERAL AND ADMINISTRATIVE SERVICES

In July 1994, the Company paid $750,000 to Forum Holdings in respect of
various general and administrative services provided to the Company by Forum
Holdings prior to such date. Such services include, among others, arranging
for and negotiating the Company's debt refinancing which was completed in
February 1994 and negotiating the co-investment agreement which was entered
into by the Company and National Guest Homes, LLC in July 1994. Services
covered by such payment also include Mr. Whitman's services as interim
President and Chief Executive Officer of the Company.

CERTAIN ACQUISITIONS

In May 1995, the Company acquired from Autumn America, an affiliate of Forum
Holdings, for $1.3 million, Autumn America's rights as the manager of five
retirement communities and entered into new management contacts with the
owners of such facilities (two of which are affiliates of Forum Holdings).
Under each such management contract, the Company will receive in respect of
management services to be provided by it thereunder a monthly management fee
equal to 5% of gross collections. In connection with such acquisition, the
Company also paid to Autumn America for disbursement to its management
personnel $250,000 in cash in lieu of granting certain rights with respect to
future acquisitions by the Company. Of such amount, $150,000 was disbursed to
James R. Foulger, formerly the President of Autumn America, who, upon the
consummation of such acquisition, became Senior Vice President--Acquisitions
of the Company.

In May 1995, the Company acquired for $1.7 million an 80% interest in the
retirement community now known as The Forum at the Woodlands (the "Woodlands
Property"). The remaining 20% interest in the Woodlands Property is owned by
an unaffiliated co-investor. In connection with such acquisition, an affiliate
of Forum Holdings (the "Holdings Affiliate") was granted a carried interest in
the Woodlands Property in exchange for assigning its rights to purchase such
property to the Company and its co-investor. Commencing May 1996, the Holdings
Affiliate may require the Company to purchase, and the Company may require the
Holdings Affiliate to sell to the Company, such carried interest for a price
between $0.8 million and $1.7 million, depending on the performance of the
Woodlands Property and sales of related tax-exempt bonds.

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information as to the beneficial ownership of
each person known to the Company, as of July 24, 1995, to own more than 5% of
the Company's outstanding Common Stock.

AMOUNT AND NATURE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) CLASS (2)
- ------------------------------------ --------------------------- ----------

Apollo FG Partners, L.P. 9,428,203(3) 40.6%
c/o Apollo Advisors, L.P
1999 Avenue of the Stars, Suite
1900
Los Angeles, California 90067
Forum/Classic, L.P. 2,550,544(4) 11.0%
200 West Madison Street
39th Floor
Chicago, Illinois 60606
Forum Holdings, L.P. 9,428,203(5) 40.6%
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75201

- --------
(1) The amounts shown represent shares of Common Stock with respect to which
the named person has sole dispositive power. As a result of the provisions
of the shareholders' agreement described below, each of AFG and Forum
Holdings may be deemed to have shared voting power with respect to, and
thus to beneficially own, all of the 18,856,406 shares of Common Stock
beneficially owned by such persons in the aggregate (constituting 81.3% of
shares of Common Stock treated as outstanding as described in Note 2
below).
(2) The percentages shown are based on 23,206,113 shares of Common Stock
outstanding. This number includes (i) 5,760 shares of Common Stock
presently issuable at a nominal purchase price upon exercise of certain
warrants ("Investor Warrants") issued pursuant to the Acquisition
Agreement, dated as of April 18, 1993, among the Company, the Investors
and the other parties thereto, (ii) 149,607 shares of Common Stock
presently issuable at a nominal purchase price upon the exercise of
certain warrants ("Special Warrants") issued pursuant to the Warrant
Agreement, dated June 10, 1993 (the "Warrant Agreement"), between the
Company and Citicorp USA, Inc., and (iii) 550,537 shares of Common Stock
presently issuable at a purchase price equal to $3.98 per share (subject
to adjustment) upon the exercise of certain other warrants ("Warrants")
issued pursuant to the Warrant Agreement.
(3) According to Amendment No. 8 to a Schedule 13D dated January 10, 1995 and
filed with the Securities and Exchange Commission (the "SEC") by AFG. The
number of shares listed includes (i) 2,880 shares of Common Stock
presently purchasable by AFG upon exercise of Investor Warrants, (ii)
74,804 shares of Common Stock purchasable by AFG upon exercise of Special
Warrants, and (iii) 275,268 shares of Common Stock purchasable by AFG upon
exercise of Warrants. The general partner of AFG is AIF, the managing
general partner of AIF is Apollo Advisors, and the general partner of
Apollo Advisors is ACM. By reason of various relationships among Messrs.
Berg, Copses and Ressler and AFG and its affiliates, Messrs. Berg, Copses
and Ressler may be deemed to beneficially own the shares of Common Stock
owned by AFG. Each of Messrs. Berg, Copses and Ressler disclaims
beneficial ownership of such shares.
(4) According to Amendment No. 1 to a Schedule 13D dated January 18, 1995 and
filed with the SEC by Forum/Classic, L.P.

(5) According to Amendment No. 13 to a Schedule 13D dated January 10, 1995
(the "Forum Holdings 13D") and filed with the SEC by Forum Holdings and
certain related entities (collectively, the "Forum Holdings Reporting
Persons"). The number of shares listed includes (i) 2,880 shares of Common
Stock presently purchasable by Forum Holdings upon exercise of Investor
Warrants, (ii) 74,803 shares of Common Stock purchasable by Forum Holdings
upon exercise of Special Warrants, and (iii) 275,269 shares of Common
Stock purchasable by Forum Holdings upon exercise of Warrants. According
to Forum Holdings 13D, each of the Forum Holdings Reporting Persons may,
by reason of certain control relationships, be deemed to beneficially own
all of the shares of Common Stock owned directly by Forum Holdings. By
reason of various relationships among Messrs. Decker, Read and Whitman and
the Forum Holdings Reporting Persons, Messrs. Decker, Read and Whitman may
be deemed to beneficially own the shares of Common Stock owned by the
Forum Holdings Reporting Persons. Each of Messrs. Decker, Read and Whitman
disclaims beneficial ownership of such shares.

Shareholders' Agreement. Pursuant to a shareholders' agreement (the
"Shareholders' Agreement") entered into between the Investors, the Investors
have agreed that, from and after the Annual Meeting, the right to nominate a
majority of the Company's directors will be allocated between the Investors in
proportion to their relative percentages of share ownership and that the
remaining directors will consist of the Chief Executive Officer of the Company
and other persons acceptable to each of the Investors. Pursuant to the
Shareholders' Agreement, AFG has nominated Messrs. Berg, Copses and Ressler
for election as directors at the Annual Meeting, and Forum Holdings has
nominated Messrs. Decker, Read and Whitman. The Shareholders' Agreement also
provides that the Investors will use their respective best efforts to cause
the Executive Committee to consist of at least three persons, one designee
designated by each Investor and the Chief Executive Officer of the Company,
and such additional directors of the Company, if any, as shall be acceptable
to each of the Investors.

The Shareholders' Agreement includes reciprocal rights of first refusal and
other provisions and will terminate on June 14, 1998 or earlier under certain
circumstances.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information as of the close of business on
the Record Date with respect to shares of Common Stock beneficially owned by
(i) each director nominee, (ii) each Named Executive, and (iii) all directors
and executive officers of the Company as a group. All shares of Common Stock
listed below are beneficially owned directly by the person indicated in the
table and all persons own less than 1% of the total number of outstanding
shares of Common Stock

AMOUNT AND NATURE
OF BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP (1)
------------------------ -----------------

Laurence M. Berg (2)..................................... -0-
Peter P. Copses (2)...................................... -0-
Daniel A. Decker (3)..................................... -0-
James E. Eden............................................ -0-
Mark L. Pacala........................................... 160,000(4)
Kurt C. Read (3)......................................... -0-
Antony P. Ressler (2).................................... -0-
Robert A. Whitman (3).................................... -0-
Margaret A. Wylde........................................ -0-
Paul A. Shively.......................................... 18,055
Brian C. Swinton......................................... 24,950
Richard A. Huber......................................... 500
All directors and executive offers as a group............ 195,601

- --------
(1) Excludes the 18,856,406 shares of Common Stock beneficially owned by the
Investors.

(2) By reason of various relationships between Messrs. Berg, Copses and
Ressler and AFG and its affiliates, Messrs. Berg, Copses and Ressler may
be deemed to beneficially own the shares of Common Stock owned by AFG.
Each of Messrs. Berg, Copses and Ressler disclaims beneficial ownership of
such shares.
(3) By reason of various relationships between Messrs. Decker, Read and
Whitman and the Forum Holdings Reporting Persons, Messrs. Decker, Read and
Whitman may be deemed to beneficially own the shares of Common Stock owned
by the Forum Holdings Reporting Persons. Each of Messrs. Decker, Read and
Whitman disclaims beneficial ownership of such shares.
(4) Consists of 160,000 shares of Common Stock purchasable upon the exercise
of Mr. Pacala's option within 60 days after July 24, 1995.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires directors and executive officers
of the Company, and persons who own more than 10% of the issued and
outstanding shares of Common Stock, to file reports of ownership and changes
in ownership with the SEC. Directors, executive officers and greater than 10%
shareholders are required by SEC regulation to furnish the Company copies of
all Section 16(a) forms they file. Except as described below, to the Company's
knowledge, based solely on review of those copies and written representations
that no Forms 5 were required, the Company's directors, executive officers and
greater than 10% shareholders complied with all applicable Section 16(a)
filing requirements during Fiscal Year 1995. Mr. Swinton has failed to file
the required forms with the SEC in connection with three transactions
resulting in changes in his beneficial ownership of Common Stock that occurred
during Fiscal Year 1995 and two such transactions that occurred during the
Company's current fiscal year.