________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 (fee required)
For the Year Ended December 31, 1997
Commission file number 0-3417
CENCOR, INC.
(Exact name of registrant as specified in its charter)
1100 Main Street, City Center Square, Suite 416A
P.O. Box 26098
Kansas City, MO 64196-6098
Telephone (816) 221-5833
Incorporated in the State of Delaware
43-0914033
(I.R.S. Employer
Identification No.)
Securities registered pursuant to Section 12(g) of the Act:
TITLE OF CLASS
Regular Common Stock, $1.00 par value
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
<PAGE>
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated
by references in Part III of this Form 10-K or any amendment to
this Form 10-K.{}
Yes X No ___
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
distribution of securities under a plan confirmed by a court:
Yes X No ___
Indicate the number of shares outstanding of each of the
issuer's classes of Common Stock, as of March 10, 1997.
1,338,140 Shares of Common Stock, $1.00 par value
Market value at March 10, 1998 was $6,088,537.
Documents incorporated by reference--None
_________________________________________________________________
<PAGE>
CENCOR, INC.
FORM 10-K
YEAR ENDED DECEMBER 31, 1997
INDEX
Item Page
PART I
Item 1. Business 3
Item 2. Properties 3
Item 3. Legal Proceedings 3
Item 4. Submission of Matters to a Vote of
Security Holders 3
PART II
Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters 4
Item 6. Selected Financial Data 5
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Item 8. Financial Statements and Supplementary Data 11
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 20
PART III
Item 10. Directors and Executive Officers
of the Registrant 21
Item 11. Executive Compensation 22
Item 12. Security Ownership of Certain
Beneficial Owners and Management 25
Item 13. Certain Relationships and Related Transactions 26
PART IV
Item 14. Exhibits, Financial Statements
Schedules, and Reports on Form 8-K 27
<PAGE>
PART 1
Item 1. Business
CenCor, Inc. was incorporated under the laws of Delaware on May
27, 1968. Prior to June 30, 1995, CenCor, was engaged in the
consumer finance business through its wholly-owned subsidiary,
Century Acceptance Corporation ("Century"). As used herein, the
term "the Company" refers to CenCor and Century collectively.
Effective June 30, 1995, substantially all of the assets of
Century were sold. For additional information regarding the sale
of Century, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Financial
Conditions--Sale of Century".
The Company has not conducted on-going operations since the sale
of its consumer finance business and is in the process of
liquidation. On September 12, 1996, the Company's stockholders
approved a Plan of Dissolution and Liquidation (the "Plan of
Liquidation") which the Board of Directors submitted for
stockholder approval at the Company's annual meeting of
stockholders. CenCor is expected to be fully liquidated by
October 1999. See "Management's Discussion and Analysis of
Financial Condition and Results of Operation--Financial Condition--
Plan of Liquidation".
<PAGE>
Item 2. Properties
Since the sale of its consumer finance business, the Company's
need for office space has decreased significantly. The Company
currently subleases approximately 800 sq. feet of office space on
a month to month basis (see "Certain Relationships and Related
Transactions"). The Company believes that its office space is
adequate for its needs.
Item 3. Legal Proceedings
There are no pending legal actions against the Company.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
As a result of the stockholders approval of the Company's Plan
of Liquidation on September 12, 1996, the Company is not required
to submit any further matters to a vote of security holders.
No matter was submitted to a vote of security holders during the
fourth quarter of the Company's fiscal year ended December 31, 1997.
<PAGE>
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters
CenCor's common stock is quoted on the OTC Bulletin Board under
the symbol CNCR. The range of high and low sales price as quoted
on the OTC Bulletin Board for each quarter of 1996 and 1997 is as
follows:
<TABLE>
<CAPTION>
1995 1996
Quarter Ended High Low High Low
<S> <C> <C> <C> <C>
March 31 3 3 7-5/8 7-5/8
June 30 6 6 9-1/8 9-1/8
September 30 6-1/2 6-1/2 9-1/8 9-1/8
December 31 6-5/8 6-5/8 9-1/4 9-1/4
</TABLE>
The quotations from the OTC Bulletin Board reflect inter-dealer
prices without retail mark-up, mark-down, or commission and may
not represent actual transactions.
On March 10, 1998, the quoted bid price of the common stock on
the OTC Bulletin Board was $4.55.
At March 10, 1998, CenCor had approximately 628 shareholders of
record. A partial liquidating distribution of $5.35 per share was
paid on March 9, 1998, to common stockholders of record as of
February 16, 1998.
(The remainder of this page is intentionally blank.)
<PAGE>
Item 6. Selected Financial Data
<TABLE>
December 31, December 31,
1997 1996
<S> <C> <C>
Net Assets in Liquidation:
Assets:
Cash and cash equivalents $ 11,248,000 $ 14,513,000
Other assets 6,182,000 10,320,000
Total Assets 17,430,000 24,833,000
Liabilities:
Accounts payable and
accrued liabilities 432,000 648,000
Income taxes payable --- 1,110,000
Long-term debt --- 5,681,000
Partial liquidating distribution payable 7,225,000 ---
Total Liabilities 7,657,000 7,439,000
Net assets in liquidation $ 9,773,000 $ 17,394,000
Number of common shares
outstanding 1,350,384 1,488,411
Net assets in liquidation per $ 7.24 $11.69
share
Change in Net Assets in
Liquidation for the year
ended:
<PAGE>
Income from liquidating
activities:
Investment income $1,101,000 $1,655,000
Other interest income --- 903,000
Gain on extinguishment of debt --- 208,000
Loss on liquidation of other assets --- <131,000>
1,101,000 2,635,000
Expenses from liquidating
activities:
Salaries and related benefits 265,000 457,000
Interest expense 709,000 1,052,000
Professional fees 76,000 242,000
Income tax <1,232,000> 1,275,000
Other expenses 531,000 325,000
340,000 3,351,000
Retirement of common stock $1,157,000 --
Partial liquidation distribution 7,225,000 --
8,382,000 --
Decrease in net assets in liquidation $<7,621,000> $<716,000>
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition
Sale of Century
Effective June 30, 1995, Century consummated the sale of its
consumer finance business to Fidelity Acceptance Corporation, a
subsidiary of the Bank of Boston Corporation.
Under the terms of the sale, Century received $128.7 million for
substantially all of its assets. In accordance with the
provisions of the sales agreement, $5 million of the sale
proceeds were placed in escrow to secure certain indemnification
obligations of the Company that expire on July 1, 1998. Fidelity
had made two claims for $48,000 against the escrow and has notified
the Company of other claims which may be asserted against the escrow
balance. Management does not believe the amount of the other claims,
if any, will be material to the consolidated financial statements.
As part of the sale, Century also assigned to Fidelity, its benefits,
rights, and interests (including interests in future insurance commissions
receivable) in a service expense reimbursement agreement (the "SER
Agreement(s)") with a third party. Century also agreed to indemnify
Fidelity in an amount up to $750,000 if it was determined that any of
Century's rights under the SER Agreement were impaired as a result of the
sale of Century's assets such that Fidelity did not receive up to $750,000
in payments under the SER Agreement. During 1997, Norwest Financial, Inc.
("Norwest") acquired certain assets and liabilities of Fidelity including
Fidelity's rights under the SER Agreement and to claims against the escrow.
On March 12, 1998 Norwest agreed to relinquish any indemnification against
the Company and the escrow related to payments under the SER Agreement.
<PAGE>
On December 12, 1997, Fidelity also asserted a claim of
approximately $2.5 million against the escrow account. Fidelity's claim is
based upon a claim by a third party against Fidelity, as Century's
successor in interest, for amounts allegedly due for reserves that were to
be established by Century under certain agreements with the third party.
While the company has agreed to indemnify Fidelity in this matter, the
Company believes the third party's claim is without merit and is vigorously
defending the third party claims.
Plan of Liquidation
With the sale of its consumer finance business, CenCor's business
purpose no longer exists. For that reason, CenCor's Board of Directors
adopted a resolution on January 22, 1996 that CenCor be liquidated and that
the Plan of Liquidation be submitted to the stockholders for approval. The
Company's stockholders approved the Plan of Liquidation at the Company's
annual meeting of stockholders held on September 12, 1996 and a Certificate
of Dissolution was subsequently filed with the State of Delaware.
Under Delaware Law, CenCor will continue as a corporate entity for three
years after the effective date of the dissolution (October 1, 1996) or for
such longer period as the Delaware Court of Chancery directs in its own
discretion, for the purpose of prosecuting and defending suits by or
against CenCor and winding up the business and affairs of CenCor, but not
for the purpose of continuing the business of CenCor.
The Plan of Liquidation provides that the implementation of the plan is
intended to be completed by October 1, 1999. During this three year period,
CenCor will not engage in any business activities, except for preserving the
value of its assets, adjusting and winding up its business and affairs, and
distributing its assets in accordance with the Plan of Liquidation.
CenCor's debts and liabilities, whether fixed, conditioned or contingent,
will either be paid as they become due or provided for.
<PAGE>
The Board determined that a partial liquidating distribution of $5.35
per share would be issued to stockholders of record on February 16, 1998.
At such time as the Board has determined that all claims and liabilities
have been indentified and paid or provided for, the Board will determine a
record date and issue a final liquidating distribution. Cencor does not
expect this to occur prior to 1999.
During the period of liquidation, CenCor's directors and officers are
authorized to implement and carry out the provisions of the Plan of
Liquidation and to receive compensation for their services. The Board
determined that, in addition to the regular directors fees paid to each
member of the Board of Directors, each Director shall receive a payment
equal to $75,000 immediately prior to the final distribution of the
liquidation proceeds to the shareholders as additional consideration for
the performance of services to the Company. In addition, the Vice President
of the Company will receive a bonus of $100,000 if the officer is still
employed by the Company on the date the Company makes its final liquidation
distribution to its shareholders. The purpose of the additional payments is
to encourage these individuals to continue their services to the Company
through the Company's final liquidation and to recognize the directors for
their past performance. The additional payments have been recorded as a
liability in the December 31, 1997 financial statements.
<PAGE>
As discussed below, on February 2, 1998, CenCor announced a
partial liquidating distribution in the amount of $5.35 per share to be paid
on March 9, 1998. After the parties liquidating distribution and assuming
CenCor had fully liquidated and distributed its assets by December 31, 1997,
and the Company's actual realizable value of its assets and liabilities is
identical to the Company's estimated realized value of these items,
CenCor's stockholders would have received an additional $9,773,000 in
distributions or approximately $7.24 per share, less costs to liquidate.
The actual amount to be received upon complete liquidation my be adversely
affected by claims arising from the indemnification obligations resulting
from the sale of Century's assets, unanticipated tax liabilities, other
liquidating costs, or other unforseen factors.
Stock Tender Offer
On June 13, 1997, CenCor commenced an offer to purchase 570,000 shares
of its common stock at $8.75 per share. The offer expired on August 12,
1997 at which time CenCor paid $1,106,158 for 126,418 shares of its common
stock. The purpose of the offer was to provide the shareholders, who did
not wish to hold their shares until CenCor completes its liquidation, an
opportunity to sell their shares and to enhance the liquidation value to
the non-tendering shareholders.
Partial Liquidating Distribution
On February 2, 1998, CenCor announced payment of a partial liquidating
distribution on March 9, 1998 in the amount of $5.35 per share to common
stockholders of record as of February 16, 1998. The Company distributed
$7,159,049 on 1,338,140 outstanding shares of common stock on March 9, 1998.
<PAGE>
The partial liquidating distribution represents approximately 65%
of the Company's cash and cash equivalents available as of December 31,
1997. After the $5.35 per share partial liquidating distribution and based
upon the December 31, 1997 per share estimated liquidation value, each
outstanding share of common stock of the Company will have a remaining
projected liquidation value of approximately $7.24 per share.
CenCor's 1993 plan of reorganization entitled holders of Old Notes to
receive Non-Convertible Notes, Convertible Notes, and common stock in
exchange for their Old Notes. The Convertible Notes were converted into
shares of common stock at a ratio of one share of common stock for each $20
principal amount of Convertible Notes on April 1, 1996.
The outstanding shares of common stock of 1,338,140 on February 16, 1998
is exclusive of 12,140 shares of common stock issuable to Old Noteholders
who have failed to surrender their Old Notes. The Company has submitted an
application to the Bankruptcy Court to confirm the Company's right to
disregard recognition of the ownership rights claimed by holders of Old
Notes in accordance with the 1993 plan of reorganiztion. However, as of
the payment record date of February 16, 1998, three holders of Old Notes had
notified the Company of their intention to file a motion with the Bankruptcy
Court to request a late exchange of their Old Notes for Non-Convertible Notes,
Convertible Notes, and common stock. The Company anticipates that the
Bankruptcy Court will grant those motions and that those
holders will be entitled to receive 531 shares of common stock as a result
of the exhange of their Old Notes and the surrender of the Convertible Notes.
The partial liquidation distribution payable and the outstanding shares of
common stock at December 31, 1997 includes the 531 shares, but does not
include any amounts owed to the remaining holders of Old Notes.
<PAGE>
Further, the outstanding shares of stock at February 16, 1998 that
received partial liquidating distribution on March 9, 1998 does not include
11,713 of common shares issuable to Convertible Noteholders who have failed
to surrender their Convertible Notes in exchange for common stock. The
Company is attempting to contact the unsurrended Convertible Noteholders
and advise them of the partial liquidating distribution that they woud be
entitled to receive upon surrender of the Convertible Notes. If the shares
of common stock and partial liquidating distribution underlying the
unsurrendered Convertible Notes are not claimed, the Company expects to
release the unclaimed funds based upon the applicable escheat laws. As a
result, the partial liquidation distribution payable and the outstanding
shares of common stock at December 31, 1997 is inclusive of the 11,713
shares and the partial liquidating distribution due to the unsurrendered
Convertible Noteholder.
Conversion of Convertible Notes
On December 31, 1995, ConCor had outstanding non-interest bearing
Convertible Notes due July 1, 1999 in the principal amount of $11,449,771.
Effective April 1, 1996, CenCor converted these Convertible Notes into
shares of CenCor's common stock at a ratio of one share of common stock for
each $20 principal amount of Convertible Notes. As a result of this
conversion, the holders of the Convertible Notes are entitled to be issued
572,554 shares of CenCor common stock upon surrender of their Convertible
Notes.
<PAGE>
Long-Term Debt
On August 19, 1996 CenCor offered to redeem all of its outstanding
Non-Convertible Notes due July 1, 1999 at a cash equal to 74% of their
principal amount. Prior to the offer, the principal balance of the
Non-Convertible Notes was $17,174,656. CenCor redeemed outstanding
Non-Convertible Notes in the principal amount of $9,970,930 as of the
November 18, 1996 offer expiration date at a cost of $7,374,415. On May 30,
1997, pursuant to the indenture governing the Non-Convertible Notes, CenCor
defeased its outstanding Non-Convertible Notes in the principal amount of
$7,203,726 by delivering approximately $6.4 million in U.S. Government
Securities to the indenture trustee.
Concorde Career Colleges, Inc. Agreements
At December 31, 1996, the Company held a junior secured debenture (the
"Debenture") of Concorde Career Colleges, Inc. ("Concorde") in the
principal amount of approximately $2.4 million and 260,385 shares of
Concorde's cumulative preferred stock (the "Preferred Stock"). Further,
the Company held an unsecured debt of Concorde in the principal amount of
approximately 190,000 (the "Unsecured Debt").
<PAGE>
The Debenture, which was to have matured on July 31, 1997, called
for principal and interest payments commencing June 30, 1996 based on a
10-year amortization schedule. Interest on the Debenture compounded and
accrued quarterly at a variable rate not to exceed 12%. The Debenture
further called for an additional contingent payment at the maturity of the
Debenture in an amount equal to 25% of the amount by which the "market
capitalization" of Concorde exceeded $3.5 million.
The Preferred Stock, $.10 par value, had a per share liquidation
preference of $10.00 per share. Cumulative quarterly dividends accrued at
a rate equal to 73% of the then current interest rate on the Debenture.
Dividends were to have accrued until such time as the Debenture was paid in
full. While Concorde could redeem the Preferred Stock in whole or in part
at liquidation value plus accrued cumulative dividends, the Preferred Stock
did not provide for mandatory redemption.
On December 30, 1996, CenCor and Concorde amended the Restructuring,
Security and Guaranty Agreement (the "Fourth Amendment") between the
parties to facilitate the early redemption of the Preferred Stock and
payment in full of all of the obligations of Concorde to CenCor. The Fourth
Amendment provided that if CenCor received a "repayment price" of
approximately $4.8 million prior to February 28, 1997, inclusive of any
Preferred Stock redemption payments and debt service payments on the
Debenture subsequent to September 30, 1996, that Debenture and the
Unsecured Debt would be retired and the Preferred Stock redeemed in full.
<PAGE>
During 1996, CenCor received $452,498 from Concorde in redemption
of 39,615 shares of Preferred Stock and $411,890 in payments from Concorde
on the Debenture
In February 1997, CenCor retired in full of all of Concorde's debt
obligations to CenCor and redeemed in full of all of the remaining shares
of Preferred Stock in accordance with the terms of the Fourth Amendment. In
exchange, CenCor agreed to release Concorde from all liabilities and
obligations, except its continuing obligation to convey written- off
receivables in connection with discharged interest, as described below.
In 1993 and 1994, Concorde agreed to assign certain charged-off
receivables to CenCor in full payment of the accrued interest due on the
Junior Secured Debenture through December 31, 1993 and 1994, respectively.
The receivables, which consist of account and notes receivable from
students who attended schools operated by Concorde or its subsidiaries,
were assigned to CenCor without recourse with CenCor assuming all risk of
non-payment of the receivables. The agreement with Concorde grants CenCor
limited rights of substitution until such time as it collects full payment
of the accrued interest, exclusive of out-of-pocket collection fees and
expenses paid to third parties. CenCor has engaged a collection agent to
pursue recovery of such receivables assigned to the Company. As of
December 31, 1997, CenCor has collected approximately $1,046,000 of the
total $1,057,000 discharged interest due from the charged-off receivables.
The balance of the discharged interest was collected in January, 1998
and CenCor has subsequently reassigned the charged-off receivables to
Concorde.
<PAGE>
Assets and Liabilities During the Liquidation Period
The Company's assets at December 31, 1997 consist primarily of cash and
cash equivalents, an income tax receivable fund, and the escrow account
established to secure the indemnification obligations of the Company to the
buyer of the consumer finance business.
The Company's remaining liabilities at December 31, 1997 consist
primarily of accounts payable and other accrued libilities, including the
accrued additional payments due to the Company's officers and directors
prior to liquidation. At December 31, 1997 the Company has also recorded a
liability for the partial liquidating distribution payable to its
shareholders on March 9, 1998. Further, at December 31, 1996, CenCor had
outstanding long-term debt at a fair value of $5,681,000. As previously
mentioned on May 30, 1997, CenCor had outstanding long-term debt by
delivering approximately $6.4 million in U.S. Government Securities to its
indenture trustee. As a result of being in the process of liquidation, the
Company is required to adopt the liquidation basis of accounting. Generally
accepted accounting principles require the adjustment of liabilities to
estimated fair value under the liquidation basis of accounting. For
information concerning the estimated fair values given these items by the
Company and the methods and assumptions used to arrive at such values, see
the Company's Financial Statements and the notes thereto.
<PAGE>
Results of Operations
During the year ended December 31, 1997, the Company's sources of income
consisted primarily of investment income, interest income on the Debenture,
and collections from the Concorde charged-off receivables received in
payment of accrued interest on the Debenture.
The Company's expenses during the year ended December 31, 1997
consisted mainly of salaries, including accrued additional payments due
to its directors prior to liquidation, accretion of interest on the
Company's long-term debt through May 30, 1997, professional and
consulting fees, and other liquidating expenses. The company also
incurred $1,157,000 for costs related to the purchase of its common
stock and $7,225,000 for accrued expenses related to the partial
liquidating distribution as previously discussed. The Company also
recorded a reduction to income tax expense as a result of expected
refunds from prior years income tax returns.
Activities During Liquidation Period
The Company's activities during the period of liquidation will focus on
the collection of various amounts owed to it, including monitoring claims
arising from indemnification obligations to the buyer of Century in order
to maximize the value of the escrow fund established as a result of the
sale. Until the distributions are made to stockholders, management expects
to invest the available proceeds from the sale of Century and the
Company's other cash in short- term government or government agency
instruments.
The Company's expenses during the period of liquidation are expected to
consist mostly of salaries, professional fees, stockholder communication
expenses, income taxes and other liquidating expenses.
<PAGE>
The Company will be required to satisfy all liabilities prior to
any final distribution on its outstanding common stock. The Company
believes that it has adequate reserves for all of its material known
contingent, conditional, and unmature liabilities.
Liquidity and Capital Resources
Capital Obligations
The Company has no significant obligations for capital purchases.
Internal Revenue Service Examination
The Company's 1990, 1991, and 1992 federal income tax returns were
examined by the Internal Revenue Service (IRS), which has proposed certain
adjustments, a portion of which have been protested by the Company. The
Company has recently reached a tentative agreement with the IRS. Based
upon the tentative agreement, the Company's NOL carryforward for federal
income tax purposes, at December 31, 1997 is expected to be approximately
$30,000 and the Company's alternative minimum tax (AMT) credit carryforward
is expected to be approximately $577,000.
The Company has recorded in other assets a net recoverable for income
taxes of $595,000 (including a $100,000 refund for state income taxes) based
upon the terms of the tentative agreement. Although no assurances can be
made, the Company believes it will settle the IRS exam under the tentative
agreement and that the amount of the net recoverable is reasonable.
(The remainder of this page is intentionally blank.)
<PAGE>
Item 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
Page CenCor, Inc.
Report of Independent Auditors 12
Audited Consolidated Financial Statements:
Consolidated Statement of Net Assets in Liquidation 13
Consolidated Statement of Changes in Net
Assets in Liquidation 14
Notes to Consolidated Financial Statements 15
<PAGE>
Report of Independent Auditors
The Board of Directors and Stockholders
CenCor, Inc.
We have audited the accompanying consolidated statements of net assets in
liquidation of CenCor, Inc. (the Company) as of December 31, 1997 and 1996,
and the related statement of changes in net assets in liquidation for the
years ended December 31, 1997 and 1996. 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 misstatement. 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 1 to the financial statements, as a result of the
Board of Directors' intent to liquidate effective December 31, 1995, the
Company changed its basis of accounting from the going-concern basis to the
liquidation basis.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets in liquidation of CenCor, Inc. as
of December 31, 1997 and 1996, the changes in net assets in liquidation for
the years ended December 31, 1997 and 1996, in conformity with generally
accepted accounting principles applied on the basis described in the
preceding paragraph.
Ernst & Young LLP
March 12, 1998
Kansas City, Missouri
<PAGE>
<TABLE>
<CAPTION>
CenCor, Inc.
(In Process of Liquidation)
Consolidated Statement of Net Assets in Liquidation
December 31, December 31,
1997 1996
<S> <C> <C>
Assets:
Cash and cash equivalents $11,248,000 $14,513,000
Other assets 6,182,000 10,320,000
Total assets 17,430,000 24,833,000
Liabilities:
Accounts payable and accrued
liabilities 432,000 648,000
Income taxes payable --- 1,110,000
Long-term debt --- 5,681,000
Partial liquidating
distribution payable 7,225,000 ---
Total liabilities 7,657,000 7,439,000
Net assets in liquidation $9,773,000 $17,394,000
Number of common shares
outstanding 1,350,384 1,488,411
Net assets in liquidation per share $ 7.24 $11.69
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CenCor, Inc.
(In Process of Liquidation)
Consolidated Statement of Changes in Net Assets in Liquidation
For the Years Ended December 31, 1997 and 1996
<S> <C> <C>
Net assets in liquidation,
December 31, 1996 and 1997 $17,394,000 $18,110,000
Income from liquidating activities:
Investment income 1,101,000 1,655,000
Other interest income --- 903,000
Gain on extinguishment of debt --- 208,000
Loss on liquidation of other assets --- (131,000)
1,101,000 2,635,000
Expenses from liquidating activities:
Salaries and related benefits 256,000 457,000
Interest expense 709,000 1,052,000
Professional fees 76,000 242,000
Income tax (1,232,000) 1,275,000
Other expenses 531,000 325,000
340,000 3,351,000
Retirement of common stock 1,157,000 ---
Partial liquidation
distribution 7,225,000 ---
8,382,000
Decrease in net assets in liquidation (7,621,000) (716,000)
Net assets in liquidation,
December 31, 1997 and 1996 $9,773,000 $17,394,000
See accompanying notes.
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
(In Process of Liquidation)
December 31, 1997 and 1996
1. Summary of Significant Accounting Policies
Basis of Presentation and Plan of Liquidation
The accompanying consolidated financial statements include accounts of
CenCor, Inc. and its wholly-owned subsidiary Century Acceptance Corporation
("Century") (collectively, "the Company"). Effective June 30, 1995, the
Company sold substantially all of the assets of Century its then only
operating subsidiary. Since the date of the sale of Century, the Company
has had no ongoing operations. As a result, the Company has changed its
basis of accounting from going concern basis to liquidation basis.
As a result of Board of Directors' intent as of December 31, 1995, the
Company adopted a Plan of Dissolution and Liquidation (the "Plan of
Liquidation"). In connection with the Plan of Liquidation, the officers
and directors of CenCor are authorized to (i) dissolve CenCor, including
the execution and filing of a Certificate of Dissolution with the Secretary
of State of the State of Delaware, (ii) wind up CenCor's affairs, including
satisfaction of all liabilities and long-term debt of CenCor and (iii)
liquidate CenCor's assets on a pro rata basis in accordance with the
respective interests of its common stockholders. The Company's stockholders
approved the Plan of Liquidation on September 12, 1996 at the Company's
annual meeting of stockholders. CenCor is expected to be fully liquidated
by October 1999.
<PAGE>
Generally accepted accounting principles require the adjustment of
assets and liabilities to estimated fair value under the liquidation basis
of accounting. Accordingly, the statements of net assets in liquidation at
December 31, 1997 and 1996, reflect assets and liabilities on this basis.
Adjustments for changes in estimated liquidation value are recognized
currently. Estimated costs of liquidation have not been provided since
such costs are not reasonably estimable.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles under the liquidation basis of accounting
requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes.
Actual results could differ significantly from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash, money market accounts, and
short-term government or government agency instruments.
Fair Values of Assets and Liabilities
The following methods and assumptions were used by the Company in
estimating the liquidation value of its assets and liabilities:
Cash and cash equivalents: The carrying amounts reported in the
statement of net assets in liquidation for cash and cash equivalents
approximate their fair value.
<PAGE>
Concorde Career Colleges, Inc. ("Concorde") Securities: Other
assets at December 31, 1996 include the fair value of CenCor's investments
in Concorde based upon the terms of repayment as defined in the December
30, 1996 agreement (the "Fourth Amendment") with Concorde. See Note 3.
Other Assets: The Company's other assets, excluding
CenCor's investment in Concorde, are reported in the statement of net assets
in liquidation at their fair values.
Accounts Payable and Accrued Liabilities: The carrying amount
reported in the statement of net assets in liquidation for accounts payable
and accrued liabilities approximate their fair value.
Income Tax Payable: The carrying amount reported in the statement
of net assets in liquidation approximates the fair value of taxes currently
payable.
Long-Term Debt: The fair value of the Company's long-term debt at
December 31, 1996 was estimated using discounted cash flow analyses, based
on the Company's current incremental borrowing rates for similar types of
borrowing arrangements (10% at December 31, 1996). The fair value at
December 31, 1996 reflects a conversion of the convertible notes in
accordance with the bankruptcy plan and the Company's purchase of a portion
of the outstanding long-term debt (see Note 4).
<PAGE>
2. Litigation and Contingencies
Century was a defendant, along with a number of other consumer finance
companies, in two class action lawsuits in the State of Alabama. The suits
were filed by certain alleged borrowers of the defendant creditor/lenders
and assert various violations. While Century denied the allegations,
Century has settled the claims, in order to avoid time, expense, and
uncertainty of litigation by agreeing to pay the class-action plaintiffs
$295,000, which includes certain administrative costs of the settlements of
the claims.
3. Other Assets
At December 31, 1996, the Company held a junior secured debenture (the
"Debenture") of Concorde Career Colleges, Inc. ("Concorde") in the
principal amount of approximately $2.4 million and 260,385 shares of
Concorde's cumulative preferred stock (the "Preferred Stock"). Further,
the Company held an unsecured debt of Concorde in the principal amount of
approximately $190,000 (the "Unsecured Debt").
<PAGE>
The Debenture, which was to have matured on July 31, 1997, called
for principal and interest payments commencing June 30, 1996 based on a
10-year amortization schedule. Interest on the Debenture compounded and
accrued quarterly at a variable rate not to exceed 12%. The Debenture
further called for an additional contingent payment at the maturity of the
Debenture in an amount equal to 25% of the amount by which the "market
capitalization" of Concorde exceeded $3.5 million. The Preferred Stock,
$.10 par value, had a per share liquidation preference of $10.00 per
share. Cumulative quarterly dividends accrued at a rate equal to 73% of
the then current interest rate on the Debenture. Dividends were to have
accrued until such time as the Debenture was paid in full. While Concorde
could redeem the Preferred Stock in whole or in part at liquidation value
plus accrued cumulative dividends, the Preferred Stock did not provide for
mandatory redemption.
On December 30, 1996, CenCor and Concorde amended the Restructuring,
Security and Guaranty Agreement (the "Fourth Amendment") between the
parties to facilitate the early redemption of the Preferred Stock and
payment in full all of the obligations of Concorde to CenCor. The Fourth
Amendment provided that if CenCor received a "repayment price" of
approximately $4.8 million prior to February 28, 1997, inclusive of any
Preferred Stock redemption payments and debt service payments on Debenture
subsequent to September 30, 1996, that Debenture and the Unsecured Debt
would be retired and the Preferred Stock redeemed in full.
During 1996, CenCor received $452,498 from Concorde in redemption of 39,615
shares of Preferred Stock and $411,890 in payments from Concorde on the
Debenture.
In February 1997, CenCor retired in full of all of Concorde's debt
obligations to CenCor and redeemed in full of all of the remaining shares
of Preferred Stock in accordance with the terms of the Fourth Amendment. In
exchange, CenCor agreed to release Concorde from all liabilities and
obligations, except its continuing obligation to convey written- off
receivables in connection with discharged interest, as described below.
<PAGE>
In 1993 and 1994, Concorde agreed to assign certain charged-off
receivables to CenCor in full payment of the accrued interest due on the
Junior Secured Debenture through December 31, 1993 and 1994, respectively.
The receivables, which consist of account and notes receivable from
students who attended schools operated by Concorde or its subsidiaries,
were assigned to CenCor without recourse with CenCor assuming all risk of
non-payment of the receivables. The agreement with Concorde grants CenCor
limited rights of substitution until such time as it collects full payment
of the accrued interest, exclusive of out-of-pocket collection fees and
expenses paid to third parties. CenCor has engaged a collection agent to
pursue recovery of such receivables assigned to the Company. As of
December 31, 1997, and December 31, 1996 CenCor has collected approximately
$1,046,000, and $672,000 respectively, of the total $1,057,000 discharged
interest due from the charged-off receivables. The balance of the
discharged interest was collected in January, 1998 and CenCor has
subsequently reassigned the charged-off receivables to Concorde.
In addition, an escrow account was established in accordance with the
provisions of the agreement pertaining to the sale of Century's assets.
Such amount, including accrued interest ($5,549,000 and $5,277,000 at
December 31, 1997 and December 31, 1996, respectively), is included in
other assets. The escrow was established in order to secure certain
indemnification obligations of Century and CenCor to the buyer that run
through July 1, 1998.
<PAGE>
As part of the sale, Century also assigned to the buyer its benefits,
rights and interests (including interests in future insurance commissions
receivable) in a service expense reimbursment agreement (the "SER
Agreement(s)" with a third party. Century also agreed to indemnify the
buyer in an amount up to $750,000 if it was determined that any of Century's
rights under the SER Agreement were impaired as a result of the sale of
Century's assets such that Century's buyer did not receive up to $750,000 in
payments under the SER Agreement. During 1997, Norwest Financial, Inc.
("Norwest") acquired certain assets and liabilities of Fidelity including
Fidelity's rights under the SER Agreement and to claims against the escrow.
On March 2, 1998 Norwest agreed to relinquish and indemnification claims
against the Company and the escrow related to payments under the SER
Agreement.
On December 12, 1997 Fidelity also asserted a claim of approximately $2.5
million against the escrow account. Fidelity's claim is based upon a claim
by a third party against Fidelity as Century's successor in interest for
amounts allegedly due for reserves that were to be established by Century
under certain agreements with the third party. While the company has agreed
to indemnify Fidelity in this matter, the Company believes the third
party's claim is without merit and is vigorously defending the third party
claim.
Other assets at December 31, 1997 also include a $595,000 net income tax
receivable refund from the Company's prior years federal and state income
tax returns.
<PAGE>
4. Long-Term Debt
Pursuant to a 1993 plan of
reorganization, CenCor's noteholders received the following securities for
each $1,000 aggregate amount of principal and accrued but unpaid interest
at December 31, 1992:
(i) $600 principal amount of non-interest bearing Non-
Convertible Notes
(ii) $400 principal amount of non-interest bearing Convertible
Notes
(iii) 5.2817 shares of CenCor common stock, par value of $1
per share
The Non-Convertible Notes are non-interest bearing and will mature on July
1, 1999. On August 19, 1996, CenCor offered to retire all of its
outstanding Non-Convertible Notes due July 1, 1999 at a cash price equal to
74% of their principal amount. Prior to the offer, the principal balance
of the Non-Convertible Notes was $17,174,656. CenCor purchased and retired
outstanding Non-Convertible Notes in the principal amount of $9,970,930 as
of the November 18, 1996 offer expiration date at a cost of $7,374,415. The
fair value of the non-tendered Non-Convertible Notes was $5,680,770 at
December 31, 1996.
On May 30, 1997, pursuant to the indenture governing the Non- Convertible
Notes, the Company delivered approximately $6.4 million in the U.S.
government securities to the indenture trustee as an irrevocable pledge to
defease the $7,203,726 outstanding principal amount of Non-Convertible
Notes. Accordingly, long-term debt is not reflected in the financial
statements at December 31, 1997.
<PAGE>
On December 31, 1995, CenCor had outstanding non-interest bearing
convertible notes due July 1, 1999 (the "Convertible Notes") in the
principal amount of $11,449,771. Effective April 1, 1996, CenCor converted
these Convertible Notes into shares of CenCor's common stock at a ratio of
one share of common stock for each $20 principal amount of Convertible
Notes. As a result of this conversion, the holders of the Convertible
Notes are entitled to be issued 572,554 shares of CenCor common stock upon
surrender of their Convertible Notes. As of December 31, 1997, 11,713
shares issuable remain unclaimed by the holders of the Convertible Notes.
5. Per Share Information
Net assets in liquidation per common share was computed by dividing net
assets in liquidation by the outstanding shares of common stock at December
31, 1997 and 1996. The outstanding share amount reflected in the financial
statements assumes all 572,554 shares issued as a result ofthe conversion of
the Convertible Notes are outstanding.
On June 13, 1997 CenCor commenced an offer to purchase 570,000 shares of
its common stock at $8.75 per share. The offer expired on August 12, 1997 at
which time CenCor paid $1,106,158 for 126,418 shares of its common stock.
The outstanding shares at December 31, 1997 have been reduced by 126,418 to
reflect the purchase and retirement by CenCor of its common stock on August
12, 1997.
On February 2, 1998 CenCor announced payment of a partial liquidating
distribution on March 9, 1998 in the amount of $5.35 per share to common
stockholders of record as of February 16, 1998. The Company distributed
$7,159,049 on 1,338,140 outstanding shareholders of record of common stock
on March 9, 1998.
<PAGE>
The outstanding shares of common stock of 1,338,140 on February 16,
1998 is exclusive of 12,140 shares of common stock issuable to holders of
Old NOtes who have failed to surrender their Old Notes. The Company has
submitted an application to the Bankruptcy Court to confirm the Company's
right to disregard recognition of the ownership rights claimed by holders of
Old Notes in accordance with the 1993 plan of reorganization. However, as of
the payment record date of February 16, 1998, three holders of Old Notes
had notified the Company of their intention to file a motion with the
Bankruptcy Court to request a late exchange of their Old Notes for
Non-Convertible Notes, Convertible Notes, and common stock. The Company
anticipates that the Bankruptcy Court will grant those motions and that those
holders of Old Notes will be entitled to receive 53 shares of common stock as
a result of the exchange of their Old Notes and the surrender of the
convertible Notes. The partial liquidation distribution payable and the
outstanding shares of common stock at December 31, 1997 includes the 531
shares, but does not include any amounts owed to the remaining holders of
Old Notes.
Further, the outstanding shares of stock at February 16, 1998 that received
the partial liquidating distribution on March 9, 1998 does not include
11,713 of common shares issuable to Convertible Noteholders who have failed
to surrender their Convertible Notes in exchange for common stock. The
Company is attempting to contact the unsurrendered Convertible Noteholders
and advise them of the partial liquidating distribution that they would be
entitled to receive upon surrender of their Convertible Notes. If the
shares of common stock and partial liquidating distribution underlying the
unsurrendered Convertible Notes are not claimed, the Company expects to
release the unclaimed funds based upon the applicable escheat laws. As a
result, the partial liquidation distribution payable and the outstanding
shares of common stock reflected in the financial statements at December 31,
1997 includes the 11,713 shares and the resulting partial liquidating
distribution due to the unsurrendered Convertible Noteholders.
<PAGE>
6. Income Taxes
The Company's 1990, 1991 and 1992 federal income tax returns were examined
by the Internal Revenue Service (IRS), which has proposed certain
adjustments, a portion of which have been protested by the Company. The
Company has recently reached a tentative agreement with the IRS. Based upon
the tentative agreement, the Company's net operating loss ("NOL")
carryforward, for federal income tax purposed, at December 31, 1997 is
expected to be approximately $30,000 and the Company's alternative minimum
tax ("AMT") credit carryforward is expected to be approximately $577,000.
The NOL carryforward expires on December 31, 2008and the AMT credit can be
carried forward indefinitely.
The Company has recorded in other
assets a net recoverable for income taxes of 595,000 (including a $100,000
refund for state income taxes) based upon the terms of the tentative
agreement. Although no assurances can be made, the Company believes it will
settle the IRS exam under the tentative agreement and that the amount of
the net recoverable is reasonable.
7. Stock Option Plan
In 1993, CenCor granted 90,000 phantom share options to certain officers of
CenCor. For each option exercised, the holders were granted the right to
receive a cash payment equal to the excess, if any, over $1.00 per share of
the greater of (i) the closing price of the Common Stock on the NASDAQ
National Market (as determined on the date the option is exercised), (ii)
the stockholders' equity of CenCor at the end of its most recent fiscal
quarter, or (iii) the aggregate distributions per share received by
CenCor's stockholders in the event CenCor is liquidated.
<PAGE>
During 1996, 65,000 phantom share options were exercised by the
holders at a per share value of $11.17. The per share value represented
the difference between the Company's estimated net assets in liquidation
per share at December 31, 1995 and $1.00 per share. A liability for $
287,600 has been recorded at December 31, 1996 for the remaining 25,000
phantom share options. In January 1997 the remaining 25,000 phantom share
options were exercised at a per share value of $11.17.
The Company had 50,000 Stock Appreciation Rights (SARs) outstanding to
certain officers of the Company at December 31, 1995. The SARs permit the
holders to receive a cash payment of the excess of the fair value of
Century's stock at the date of exercise over the fair value of Century's
stock as of the date of grant. As a result of the sale of Century during
1995, the holders of the SARs became entitled to payment. The fair market
value of Century's stock has been determined as the net proceeds from the
sale less liabilities retained by Century. $505,500 of the payment due on
the SARs was disbursed in January of 1996 and an additional $105,000 was
disbursed in July of 1996 and $69,000 was disbursed in July of 1997. The
liability related to the SARs was $32,000, and $98,000 at December 31, 1997
and December 31, 1996 respectively. The remaining liability is scheduled
to be paid in July of 1998.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
(The remainder of this page is intentionally blank.)
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The following tables set forth the names of the directors of the
registrant and certain related information as of December 31, 1997.
Pursuant to the Plan of Liquidation, each of the directors is entitled to
serve until the Plan of Liquidation is fully implemented.
<TABLE>
<CAPTION>
Name of Served Principal Occupation for
Director Since Age Last Five Years and Directorships<F1>
<S> <C> <C> <C>
Jack L. Brozman<F1> 1979 47 Chairman of the Board, President and
ChiefExecutive Officer of
CenCor and Concorde since June 1991.
Chief Executive Officer
of Century from July 1991 to
August 1992. Chairman of the Board
and Treasurer, from June 1991 until
July 23, 1993, and President and Director,
for more than five years prior to July 23,
1993, of La Petite Academy, Inc. Director
of Century and Concorde.
Edward G. Bauer, Jr.<F2> 1991 69 Vice President and General Counsel
of Philadelphia Electric
Company for more than the
five-year period prior to
August 1988. Retired from this
position at the end of August
1988.
<PAGE>
George L. Bernstein<F2> 1991 65 Chief Financial and Administrative
Officer of Howard Fischer Associates,
Inc. (executive search firm)
since October 1994. Chief Operating
Officer of Dilworth, Paxson, Kalish
& Kauffman, Philadelphia,
Pennsylvania (law firm) from
November 1991 to September
1994. Director of R & B, Inc.
(distributor of automotive parts).
Director of Century effective
April 8, 1993.
Marvin S. Riesenbach<F2> 1991 68 Executive Vice
President and Chief Financial
Officer of Subaru of America,
Inc. for more than the five years
prior to October 1990. Retired from
this position at the end of October 1990.
<FN>
<F1> Jack L. Brozman
is the sole executor of the Estate of Robert F. Brozman.
<F2> Member of Special and Audit Committees beginning July 1,
1991. Elected to Executive Compensation Committee on August
21, 1991.
</FN>
</TABLE>
<PAGE>
The Board of Directors of CenCor held three meetings and acted by
unanimous written consent on no occasions during the last fiscal year.
Standing committees, consisting of the Special Committee and the Audit
Committee, held one meeting during the last fiscal year. The Executive
Compensation Committee makes salary and bonus recommendations for certain
executive officers. The Audit Committee oversees the work of CenCor's
independent auditors. CenCor's Board of Directors does not have a
nominating committee. The Special Committee considers the adequacy of
CenCor's internal controls and procedures and may investigate and report
upon such other matters as the Special Committee considers appropriate. The
Special Committee, the Executive Compensation Committee, and the Audit
Committee are composed of Messrs. Bauer, Bernstein and Riesenbach.
In addition to Jack L. Brozman, the following person also serves as
an executive officer of the Company as of December 31, 1997.
<TABLE>
Name Age Principal Occupation for Last Five Years
<S> <C> <C>
Terri Rinne 30 Vice President CenCor since July 1,
1995. Controller of CenCor from April
1994 through June 1995. Tax manager
of CenCor and Century from August 1993
through March 1994. Accountant with
Arthur Andersen, LLP from October
1989 through August 1993.
</TABLE>
<PAGE>
Disclosure of Delinquent Files
Except as described below, the Company believes, based on
information filed with the Company, that all reports required to be filed
for the past two years with the Securities and Exchange Commission under
Section 16 by the Company's executive officers, directors, and ten percent
stockholders have been filed in compliance with applicable rules.
Edward Bauer and Marvin Riesenbach, failed to timely file
Form 4's with respect to the transfer shares of CenCor common stock to
CenCor during 1997. Form 5's reflecting these transactions were
subsequently filed, on an untimely basis, with the Securities and
Exchange Commission.
The Estate of Robert F. Brozman and Jack L. Brozman failed to timely
file a Form 4 with respect to the transfer of CenCor common stock to
CenCor during 1996. A Form 5 reflecting this transaction has been filed.
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth information as to the compensation
of the Chief Executive Officer and each of the other executive officers of
CenCor and Century whose total annual salary and bonus exceeded $100,000,
during the year ended December 31, 1997 for services in all capacities to
CenCor and its subsidiaries in 1995, 1996, and 1997.
<PAGE>
<TABLE>
<CAPTION>
Long-Term All Other
Annual Compensation Compensation
Compensation Awards
Other Annual
Name and Principal Salary Bonus Compensation Options/SARs
Position Year ($) ($) ($) #
<S> <C> <C> <C> <C> <C> <C>
Jack L. Brozman, 1997 $151,000<F1> $42,700<F2> $279,250<F3>
Chairman of the
Board and
Chief Executive
Officer 1996 $201,900<F1> $753,900<F2>
1995 $178,300<F1> $15,000<F5>
<FN>
<F1> Mr. Brozman also received compensation as an executive
officer of Concorde.
<F2> Consists of installment payments received during
1997 with respect to payout received on 30,000 units of stock
appreciation rights (SARs) exercised during 1997.
<F3> Represents payout received on the exercise of phantom stock options
representing 25,000 shares of CenCor common stock. See "Option Exercises and
Fiscal Year-End Option Value Table".
<PAGE>
<F4> Consists of (i) installment payments received during 1996 with
respect to payout received on 30,000 units of stock appreciation
rights (SARs) deemed exercised during 1996 in the amount of $427,000
but payable beginningin 1996 and ending in 1998 and (ii) payout
received on the excercise of phantom share options with respect to
35,000 shares of CenCor common stock.
<F5> In 1995, CenCor approved SARs for Mr. Brozeman relating to
appreciation in value of Century's common stock. Mr. Brozeman
will receive cash compensation for his units at
the earlier of his death, permanent disability, involuntary
termination without cause, or December 31, 1998 equal to the amount by
which the per share value of Century's stock at such time (determined
by formula) exceeds the base amount of $13.72. The base amount of
$13.72 was selected by CenCor's Executive Compensation Committee as
the estimated value per share of Century Stock as of December 31, 1993.
(The remainder of this page is intentionally blank).
</FN>
</TABLE>
<PAGE>
Option Exercises and Fiscal Year-End Option Value Table
The following table provides information with respect to the named
executive officers concerning options exercised during 1997 and unexercised
options held as of December 31, 1997.
<TABLE>
<CAPTION>
Value # of Securities Underlying Value of Unexercised In-the-
Name Options Realized Unexercised Options Money Options
Exercised ($) at FY-End at FY-End ($)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Jack L. Brozman, 25,000<F1> $279,250 N/A N/A N/A N/A
CEO
<FN>
<F1> Consists of phantom share options relating to CenCor common stock.
</FN>
</TABLE>
Compensation of Directors
Each non-officer/director of CenCor is paid an annual retainer of
$25,000 plus a fee (based on time spent on corporate matters, including
attendance at board and committee meetings) and expenses.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth, with respect to CenCor common stock
(the only class of voting securities), the only persons known to be a
beneficial owner of more than five percent (5%) of any class of CenCor
voting securities as of March 10, 1998.
<TABLE>
Names and Addresses Number of Shares and
of Beneficial Owners Nature of Beneficial Ownership<F1> Percent of Class
<S> <C> <C>
Jack L. Brozman, Trustee 272,423<F2> 20%
Robert F. Brozman Trust
1100 Main St.
Kansas City, Missouri
64105
A. Baron Cass III 134,392 10%
5005 LBJ Freeway
Suite 1130, LB 119
Dallas, Texas
75244
<FN>
<F1> Nature of ownership of securities is direct. Beneficial
ownership as shown in the table arises from sole voting power and sole
investment power.
<F2> Does not include 34,344 shares held by Jack L. Brozman or
20,025 shares held by or for the benefit of Robert F.
Brozman's other children, in which the Robert F. Brozman Trust
disclaims any beneficial interest.
(The remainder of this page is intentionally blank.)
</FN>
</TABLE>
<PAGE>
The following table sets forth, with respect to CenCor
common stock (the only class of voting securities), (i) shares
beneficially owned by all directors of the Company and nominees for
director, and (ii) total shares beneficially owned by directors and
officers as a group, as of March 10, 1998.
<TABLE>
Number of Shares and
Name and Address Nature of Beneficial
of Beneficial Owner Ownership<F1> Percent of Class
<S> <C> <C>
Jack L. Brozman 306,767<F2> 23%
Edward G. Bauer, Jr. --- ---
George L. Bernstein --- ---
Marvin S. Riesenbach 9,250 *
Directors and Officers as a Group 316,017<F2> 23%
*Less than 1%
<FN>
<F1> Nature of ownership of securities is indirect. Beneficial
ownership as shown in the table arises from sole voting power
and sole investment power.
<F2> Includes 34,344 shares held by Jack L. Brozman and
272,423 shares held by the Robert F. Brozman Trust. Does not include
20,025 shares held by or for the benefit of Robert F. Brozman's
other children, in which the Robert F. Brozman Trust disclaims any
beneficial interest. Jack L. Brozman is the sole trustee and
is also one of the beneficiaries of the Robert F. Brozman Trust.
</FN>
</TABLE>
Item 13. Certain Relationships and Related Transactions
The Company currently subleases its approximately 800 sq. feet
office space from Concorde on a month to month basis. The Company pays
rentof $990 per month for the space.
<PAGE>
Jack L. Brozman, who is Chairman of the Board of CenCor and Century, is
Chairman of the Board of Concorde. Mr. Brozman owns 171,724 shares of
Concorde (2.5% of the outstanding class). As sole fiduciary for the
the Robert F. Brozman Trust (he is one of the beneficiaries of the
trust), he owns 2,435,324 shares of Concorde common stock (36% of the
outstanding class).
During 1997, the Board determined that, in addition to the regular
directors' fees paid to each member of the Board of Directors, each Director
shall receive a payment equal to $75,000 immediately prior to the final
distribution of the liquidation proceeds to the shareholders of the Company
as additional consideration for the performance of services to the Company
between 1993 and the final distribution of the liquidation proceeds to the
Company's shareholders. In addition, Terri Rinne, Vice President of the
Company, will receive a bonus of $100,000 if she is still employed by the
Company on the date of Company makes its final liquidation distribution to
its shareholders. The purpose of the additional payments and the bonus is
to encourage these individuals to continue in their service to the Company
through the Company's final liquidation.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form
8-K.
(a) The following documents are filed as part of this Annual Report on
Form 10-K.
The following Consolidated Financial Statements of CenCor, Inc. and
Subsidiaries are included in Item 8:
Consolidated Statement of Net Assets in Liquidation.
Consolidated Statement of Changes in Net Assets in
Liquidation.
Note to Consolidated Financial Statements
(ii) Exhibits.
Exhibit Number Description
2.1 Plan of Dissolution and Liquidation (Incorporated by
reference--Exhibit 2 to the Company's Schedule 14-A
dated August 15, 1996)
3.1 Certificate of Incorporation and all Amendments
thereto through August 31, 1990. (Incorporated by
reference--Exhibit 3(a) to the Company's Annual
Report on Form 10-K for the year ended December
31, 1990.)
3.2 Bylaws amended through July 29, 1991.
(Incorporated by reference--Exhibit 3(a) to
the Company's Annual Report on Form 10-K for
the year ended December 31, 1991.)
4.1 Specimen common stock certificate. (Incorporated
by reference--Exhibit 4(a) to the Company's Annual
Report on Form 10-K for the year ended December
31, 1990.)
4.2 Certificate of Incorporation and all Amendments and
Amended and Restated Bylaws. (Incorporated by
reference--Exhibit 3(a) to the Company's Annual
Report on Form 10-K for the year ended December 31,
1990 and included as Exhibit 3(b) hereto.)
10.3 Stock Appreciation Agreement with Jack Brozman
dated October 4, 1994. (Incorporated by reference
--Exhibit 10(j) to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.)
10.4 Minutes of Compensation Committee dated February 7,
1995 relating to amendments to Stock Appreciation
Agreements. (Incorporated by reference--exhibit 10(k)
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994.
10.5 Mutual Release between First Portland Corporation,
FP Holdings, Inc. and Leonard and Sharlene Ludwig,
Arthur and Phyllis Levinson, CEL-CEN Corp. and CenCor,
Inc. dated February 14, 1995. (Incorporated by
reference--Exhibit 10(l) to the Company's Annual
Report on Form 10-K for the year ended December
31, 1994.)
10.8 Purchase Agreement dated May 19, 1995 by and among
CenCor, Century and Fidelity Acceptance Corporation.
(Incorporated by reference--Exhibit 10.13 to the Company's
Annual report on Form 10-K for the year ended December 31,
1995.)
10.9 Employment Agreement dated July 3, 1995 between
CenCor and Jack Brozman. (Incorporated by reference--
Exhibit 10.14 to the Company's Annual report on Form
10-K for the year ended December 31, 1995.)
21 Subsidiaries of the Registrant.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ending
December 31, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 159(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this reportto be signed
on its behalf by the undersigned, thereunto duly authorized.
CENCOR, INC.
By: /s/ Jack L. Brozman
Jack L. Brozman
Chairman of the Board
Date: April 8, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of
Registrant and in the capacities and on the dates indicated.
By: /s/ Jack L. Brozman April 8, 1998
Jack L. Brozman
(Chairman of the Board,
Chief Executive Officer
and Director)
By: /s/ Terri L. Rinne April 8, 1998
Terri L. Rinne
(Vice President and
Chief Financial Officer)
<PAGE>
By: /s/ Edward G. Bauer, Jr. April 8, 1998
Edward G. Bauer, Jr.
(Director)
By: /s/ George L. Bernstein April 8, 1998
George L. Bernstein
(Director)
By: /s/ Marvin S. Riesenbach April 8, 1998
Marvin S. Riesenbach
(Director)
EX-21
CENCOR, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
Century Acceptance Corporation, 100% owned The Company is in the process of
dissolving Century's subsidiaries. Although the following subsidiaries
were inactive during 1997, they remain incorporated at December 31, 1997:
Name State of Incorporation
Century Finance Company of Colorado Colorado
Century Finance Company of Missouri Missouri
Century Finance Company of Omaha, Inc Nebraska
Century Acceptance Corporation of Texas Texas
Century Finance Company of Utah Utah
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<PERIOD-END> DEC-31-1997
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<CURRENT-ASSETS> 17,430,000
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