SHEPMYERS INVESTMENT COMPANY
ANNUAL REPORT TO SHAREHOLDERS
December 31, 1997
P.O. Box 339
Hanover, Pennsylvania 17331
<PAGE>
/LOGO/
Shepmyers Investment Company
P.O. Box 339
Hanover, Pennsylvania 17331
February 11, 1998
We are pleased to forward the Annual Report reflecting the company's financial
results for the year ended December 31, 1997.
The combination of low inflation, a strong U.S. economy, the unexpected decline
in the federal budget deficit, and turbulent financial markets in Asia has led
to considerable volatility in long-term interest rates during 1997. Early in the
year, it appeared the expected economic slowdown was not materializing. This
prompted the Federal Reserve to increase the Fed Funds Rate by .25% to 5.50% and
the 30-year Treasury yield drifted above 7%. The Federal Reserve has since
stayed on the sidelines as the dissipation of inflation expectations combined
with the turmoil in Asia has increased the demand for Treasuries helping to
bring long-term interest rates below 6% in December 1997.
Contrary to broadly-held expectations for higher rates at the beginning of 1997,
municipal yields declined during the year. The yield on the Bond Buyer Index
decreased from 5.66% at the end of 1996 to 5.15% at the close of 1997. The
portfolio's yield likewise declined from 5.54% at December 31, 1996 to 5.34% at
December 31, 1997.
The portfolio continues to embody the goals of strong credit quality,
diversification of holdings and conservative maturity structure. Eighty-nine
percent of the bonds are rated at least "AA-" by either Standard & Poor's or
Moody's Investors Service. The portfolio is diversified among fifty-three
separate issuers across twenty-one states. This diversification mitigates the
risks associated with economic events occurring in any one state or region.
Fifty-nine percent of the bonds mature in eight years or less and the longest
maturity in the portfolio is sixteen years. The weighted average maturity of the
portfolio is conservative at 7.17 years.
On behalf of the Board of Directors, I am pleased to report the declaration of
an extra dividend of $0.362 per share from
<PAGE>
earnings generated by the company during 1997. This is payable March 2, 1998 to
shareholders of record February 20, 1998. This brings the total distributions
from 1997 earnings to $1.009674.
To assist you in preparation of your 1997 income tax returns, listed below are
certain tax attributes concerning the dividends paid to you during 1997.
1) Capital gain distribution represented $.047674 per share. Of
this amount 61.20% is considered "28% type capital gains".
2) The remainder of the distributions to you ($.99 per share)
during 1997 represented tax-exempt interest dividends for
federal income tax purposes.
3) For Pennsylvania residents, 48.30% of the federally tax-exempt
interest dividends should be considered Pennsylvania
exempt-interest dividends and are not subject to Pennsylvania
Personal Income Tax in 1997.
We appreciate the confidence you have expressed in the Board and welcome your
questions and suggestions.
Sincerely,
/s/ Paul E. Spears
- ----------------------------
Paul E. Spears
President and Chairman of the Board
<PAGE>
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
Shareholders and Board of Directors
Shepmyers Investment Company
We have audited the accompanying statement of assets and liabilities of
Shepmyers Investment Company, including the schedule of investments, as of
December 31, 1997, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial highlights 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 and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and broker. 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.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Shepmyers Investment Company as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
January 16, 1998
<PAGE>
Shepmyers Investment Company
Statement of Assets and Liabilities
December 31, 1997
Assets
Investments at market value (cost $14,967,826) $15,517,861
Accrued interest receivable and other assets 212,288
-----------
Total assets 15,730,149
Liabilities
Dividends payable 115,236
Accrued liabilities 63,004
-----------
Total liabilities 178,240
-----------
Net assets at market, applicable to 768,238
issued and outstanding common shares
at $.50 par value per share, equivalent
to $20.24 a share (2,000,000 shares authorized) $15,551,909
===========
See accompanying notes.
2
<PAGE>
Shepmyers Investment Company
Investments
December 31, 1997
<TABLE>
<CAPTION>
Principal Market
Amount Description Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Housing finance agency bonds--5.45%
$125,000 Minnesota Housing Finance Agency, Single Family Mortgage, 6.80%,
due 1/1/99, callable 1/1/96 at 102 $ 128,125
190,000 Massachusetts Housing Finance Agency, 6.75%, due 6/1/99, callable
12/1/96 at 102 195,225
100,000 Oregon State Housing and Community Service Department, Single
Family Mortgage, 4.20%, due 7/1/99 100,190
400,000 Pennsylvania Housing Finance System, Single Family Mortgage,
Series S, 7.25%, due 10/1/03 423,000
-----------
Total housing finance agency bonds 846,540
General obligation bonds--54.58%
200,000 Port Corpus Christi Authority, 4.40%, due 2/1/98 200,000
250,000 Wisconsin State, 6.40%, due 5/1/00,
pre-refunded 5/1/98 at 101 254,450
175,000 Birmingham, Alabama, 7.00%, due 7/1/98 177,748
640,000 Commonwealth of Pennsylvania, First Series, 6.60%,
due 6/1/01, pre-refunded 6/1/99 at 101.5 672,064
300,000 New Hampshire, 6.50%, due 10/1/99, callable
4/1/99 at 102 312,480
300,000 Dauphin County Pennsylvania, 4.90%, due 3/15/00 (MBIA) 304,890
200,000 Pleasant Valley Pennsylvania School District, 6.00%,
due 3/15/07, pre-refunded 3/15/00 at 100 (MBIA) 208,160
300,000 New Mexico State Severance, 5.20%, due 7/1/01, callable 7/1/99 at
100 304,890
</TABLE>
See accompanying notes.
3
<PAGE>
Shepmyers Investment Company
Investments (continued)
December 31, 1997
<TABLE>
<CAPTION>
Principal Market
Amount Description Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
General obligation bonds--54.58% (continued)
$500,000 Washington Suburban Sanitation District, Maryland
Water Supply, 6.80%, due 6/1/05, pre-refunded
11/1/01 at 102 $ 554,700
350,000 Montgomery County Pennsylvania, 5.20%, due
10/15/07, pre-refunded 10/15/00 at 100 360,605
215,000 Utah State Municipal Finance Coop., Salt Lake,
6.90%, due 3/1/02 (LOC - Government Revenue Pooled), callable
3/1/01 at 100 231,813
155,000 Cambria County Pennsylvania, 5.20%, due 8/15/02 (FGIC) 160,394
350,000 Erie County Pennsylvania, 4.90%, due 9/1/04
callable 9/1/98 at 100 350,700
250,000 Wissahickon Pennsylvania School District, 4.75%, due
11/15/05, callable 11/15/02 at 100 253,475
510,000 Indiana Bond Bank, Series A2, 6.75%, due 1/1/06, callable 1/1/01
at 102 (LOC Sumitomo Bank Ltd.) 548,760
300,000 Haverford Township, Pennsylvania School District (Delaware
County), 6.00%, due 6/1/09, pre-refunded 6/1/04 at 100 (FGIC) 325,830
225,000 Wilkes-Barre, Pennsylvania School District, (Luzerne
County), 6.00%, due 4/1/08, callable 10/1/04 at 100 (FGIC) 245,250
210,000 Delaware County, Pennsylvania, 5.35%, due 10/1/08,
callable 10/1/00 at 100 219,933
200,000 Seneca Valley Pennsylvania School District, 5.50%,
due 2/15/09, callable 8/15/05 at 100 209,640
290,000 Ephrata Pennsylvania Area School District, 5.40%, due
10/15/09, callable 10/15/01 at 100 (FGIC) 298,265
275,000 Shippensburg Pennsylvania, 5.00%, due 11/15/09, callable 11/1/02
at 100 (FGIC) 277,255
200,000 Connecticut State, 5.35%, due 5/15/10, callable 5/15/06 at 101 208,360
</TABLE>
See accompanying notes.
4
<PAGE>
Shepmyers Investment Company
Investments (continued)
December 31, 1997
<TABLE>
<CAPTION>
Principal Market
Amount Description Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
General obligation bonds--54.58% (continued)
$125,000 Berks County Pennsylvania, 5.00%, due 5/15/10 (FGIC) $ 125,850
210,000 Beaver County Pennsylvania, 5.50%, due 10/1/10,
callable 10/1/06 at 100 (MBIA) 219,135
325,000 Port Houston Authority, Harris County Texas, 5.00%, due 10/1/10,
callable 10/1/07 at 100 327,925
100,000 Arlington Heights, Illinois, 5.00%, due 12/1/11, callable 12/1/05
at 100 100,720
250,000 Pennsylvania State Refunding and Projects, 5.375%, due
4/15/12, callable 4/15/03 at 101.50 257,725
450,000 Florida State Board of Education, 5.30%, due 6/1/13, callable
6/1/03 at 101 458,685
300,000 Armstrong Pennsylvania School District, 5.00%, due 9/15/14,
callable 9/15/04 at 100 (FGIC) 300,060
-----------
Total general obligation bonds 8,469,762
Special obligation bonds--1.97%
300,000 Pennsylvania Intergovernmental Coop Authority,
Special Tax Revenue, Philadelphia Fund, 4.70%,
due 6/15/01 (FGIC) 304,980
-----------
Total special obligation bonds 304,980
Revenue bonds--33.98%
150,000 Memphis-Shelby County Tennessee Airport
Authority, 4.25%, due 2/15/98 150,000
245,000 Kenton County Kentucky School District, Finance Corporate School
Building, 4.25%, due 7/1/98 245,465
500,000 Hillsborough County Florida Aviation Authority (Tampa
International Airport), 4.25%, due 10/1/98 501,700
250,000 Kane County Illinois Public Building, Elgin Community College,
6.80%, due 12/1/02, pre-refunded 12/1/99 at 100 263,000
</TABLE>
See accompanying notes.
5
<PAGE>
Shepmyers Investment Company
Investments (continued)
December 31, 1997
<TABLE>
<CAPTION>
Principal Market
Amount Description Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenue bonds--33.98% (continued)
$230,000 Intermountain Power Agency, Utah, 6.80%, due 7/1/02, callable
1/1/97 at 102 $ 234,968
300,000 Pennsylvania State Certificates of Participation, Lease Revenue,
4.90%, due 7/1/02 (AMBAC) 306,540
350,000 District of Columbia, Georgetown University, 6.90%, due 4/1/04,
callable 4/1/99 at 102 366,695
450,000 Chester County Pennsylvania Health and Education Authority (Main
Line Health System), 4.90% due 5/15/04 458,730
200,000 Allegheny County Pennsylvania Hospital Authority, (Children's
Hospital), 4.85%, due 7/1/05 (MBIA) 203,920
175,000 State Public Schools Pennsylvania College Revenue (Harrisburg
Community), 5.10%, due 4/1/06 (MBIA) 180,985
250,000 Lancaster County Pennsylvania Vo-Tech School Authority, 6.50%, due
2/15/07, callable 2/15/04 at 100 275,850
200,000 Tennessee State LOC Development Authority, 4.75%, due 3/1/08,
callable 3/1/06 at 100 (MBIA) 200,000
200,000 Salt River Project Arizona, Agricultural and Power System
Electric System, 5.00%, due 1/1/10, callable 1/1/99 at 100 203,120
200,000 Kentucky State Property and Building, 5.00%, due 9/1/10 201,360
200,000 Lincoln Nebraska Electric System, 5.25%, due 9/1/11, callable
9/1/03 at 102 205,200
125,000 East Penn Pennsylvania School District, 5.45%, due 11/15/11,
callable 5/15/02 at 100 (MBIA) 127,350
200,000 Madison Wisconsin Sewer System, 5.00%, due 12/1/11, callable
12/1/06 at 100 201,640
</TABLE>
See accompanying notes.
6
<PAGE>
Shepmyers Investment Company
Investments (continued)
December 31, 1997
<TABLE>
<CAPTION>
Principal Market
Amount Description Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenue bonds--33.98% (continued)
$350,000 Lancaster Pennsylvania Area Sewer Authority, 5.50%,
due 4/1/12, callable 10/1/03 at 100 (MBIA) $ 360,815
200,000 Governor Mifflin Pennsylvania School District, 5.40%,
due 9/15/12, callable 9/15/03 at 100 (AMBAC) 203,420
100,000 Virginia Resource Authority (Appromattox River Water Authority),
5.25%, due 10/1/13, callable 10/1/03 at 102 101,330
275,000 East Penn Pennsylvania School District, 5.55%, due 11/15/13,
callable 5/15/02 at 100 280,170
-----------
Total revenue bonds 5,272,258
Industrial revenue bonds--.84%
130,000 Chester County Pennsylvania Industrial Development Authority, Glenn
Avenue Associates, 4.375%, due 11/15/98 (Guaranteed by Provident
Mutual Life) 130,442
-----------
Total industrial revenue bonds 130,442
Short-term investments--at cost, approximating market--3.18%
493,879 Muni Fund Portfolio of Municipal Funds for Temporary Investment 493,879
-----------
Total short-term investments 493,879
-----------
Total investments--100% (cost $14,967,826) $15,517,861
===========
</TABLE>
See accompanying notes.
7
<PAGE>
Shepmyers Investment Company
Statement of Operations
Year ended December 31, 1997
Investment income:
Interest $848,096
Expenses:
Investment advisory fees 25,000
Custodian fees 7,563
Transfer and dividend disbursing agent fees 2,250
Legal and professional fees 31,050
Officers' salaries and directors' fees 29,350
Capital stock tax 2,407
Clerical 2,500
Insurance 2,539
Miscellaneous 12,604
--------
115,263
--------
Net investment income 732,833
Realized and unrealized gain on investments:
Net realized gain from investment transactions 42,711
Net unrealized appreciation of investments 17,992
--------
Net gain on investments 60,703
--------
Net increase in net assets resulting from operations $793,536
========
See accompanying notes.
8
<PAGE>
Shepmyers Investment Company
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31
------------------------------
1997 1996
----------- -----------
<S> <C> <C>
Changes resulting from operations:
Net investment income $ 732,833 $ 769,442
Net realized gain from investment transactions 42,711 16,057
Net unrealized appreciation (depreciation) of
investments 17,992 (180,868)
----------- -----------
Net increase in net assets resulting from operations 793,536 604,631
Distributions to shareholders:
Dividends from net investment income (760,556) (793,590)
Dividends from realized capital gains (36,624) --
----------- -----------
Total decrease in net assets (3,644) (188,959)
Net assets:
Beginning of year 15,555,553 15,744,512
----------- -----------
End of year (including undistributed net investment
income of $269,297 and $297,020, respectively) $15,551,909 $15,555,553
----------- -----------
</TABLE>
See accompanying notes.
9
<PAGE>
Shepmyers Investment Company
Financial Highlights
<TABLE>
<CAPTION>
Year ended December 31
------------------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA (for a share outstanding
throughout the indicated year)
Net asset value, beginning of year $ 20.25 $ 20.49 $ 19.81 $ 20.82 $ 20.82
Income from investment operations:
Investment income 1.10 1.15 1.16 1.15 1.19
Expenses .15 .15 .14 .15 .14
------- ------- ------- ------- -------
Net investment income .95 1.00 1.02 1.00 1.05
Net realized and unrealized gain (loss)
on investments .08 (.21) .67 (.95) .11
------- ------- ------- ------- -------
Total from investment operations 1.03 .79 1.69 .05 1.16
Less distributions:
Dividends from net investment income (.99) (1.03) (1.01) (1.06) (1.13)
Distribution from net realized gain
from investment transactions (.05) -- -- -- (.03)
------- ------- ------- ------- -------
Total distributions (1.04) (1.03) (1.01) (1.06) (1.16)
------- ------- ------- ------- -------
Net asset value, end of year $ 20.24 $ 20.25 $ 20.49 $ 19.81 $ 20.82
======= ======= ======= ======= =======
Total return based on net asset value
per share (1) 5.09% 3.80% 8.58% .10% 5.57%
======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $15,552 $15,556 $15,745 $15,220 $15,994
Ratio of expenses to average net assets .75% .75% .72% .73% .67%
Ratio of net investment income to
average net assets 4.78% 4.99% 5.10% 5.02% 5.14%
Portfolio turnover rate 21.71% 12.61% 11.00% 12.68% 14.92%
Number of shares outstanding at end of year 768,238 768,238 768,238 768,238 768,238
</TABLE>
- ----------
(1) Total return based on market price has not been disclosed due to lack of
market price information.
See accompanying notes.
10
<PAGE>
Shepmyers Investment Company
Notes to Financial Statements
December 31, 1997
1. Summary of Significant Accounting Policies
The Company is registered under the Investment Company Act of 1940, as amended,
as a diversified, closed-end management company and intends to meet the
requirements of a regulated investment company as defined under Subchapter M of
the Internal Revenue Code. The following is a summary of significant accounting
policies followed by the Company in the preparation of its financial statements.
The Company's investment objective is to seek as high a level of income and
capital gains, net of federal income tax as is consistent with the preservation
of capital. The Company will invest primarily in tax-exempt obligations, but may
also own taxable obligations, preferred stock (including convertible preferred
stocks), other fixed-income securities and common stocks (including warrants and
rights to purchase common stocks). The relative proportions of the types of the
Company's portfolio securities will vary from time to time but not less than 50%
of the portfolio will be invested in obligations issued by states, territories,
and possessions of the United States and the District of Columbia, and their
political subdivisions, duly constituted authorities and corporations, the
interest on which is exempt from federal income tax in the opinion of bond
counsel to the issuers.
Valuation of Investments
Investments are valued based on prices furnished by an independent pricing
service. This service determines the valuations based on valuations for normal
institutional size trading units of debt securities. In most instances, these
valuations represent the mean between the most recently quoted bid and ask
prices. In the event that market quotations are not readily available,
securities are valued at their fair value by the investment advisor under the
supervision and responsibility of the Company's Board of Directors. These
valuations are believed to accurately reflect the fair market value of such
securities.
Recording of Transactions
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Dividends and distributions to shareholders are recorded
on the declaration date.
11
<PAGE>
Shepmyers Investment Company
Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Determination of Realized Gains or Losses from Investment Transactions
Realized gains or losses from investment transactions are calculated on the
identified cost basis.
Federal Income Tax
It is the Company's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its net investment income and realized net gain from
investment transactions to its shareholders and, accordingly, no provision has
been made for Federal income taxes.
Investment Income
The Company records interest income on the accrual basis. In computing net
investment income, the Company amortizes premium over the life of the security,
unless said premium is in excess of any call price, in which case the excess is
amortized to the earliest call date. Original issue discount is accreted over
the life of the security.
2. Dividends
On October 6, 1997, the Board of Directors declared a cash dividend from net
investment income of $.15 per share payable January 2, 1998 to shareholders of
record on December 2, 1997.
12
<PAGE>
Shepmyers Investment Company
Notes to Financial Statements (continued)
3. Investment Advisory Fee and Other Transactions With Affiliates
Effective August 31, 1997, the Investment Advisory Agreement between Rittenhouse
Financial Services, Inc. (RFS) and the Company was transferred to The
Rittenhouse Trust Company, an affiliate company of RFS.
The Investment Advisory Agreement provides that the Company will pay to the
Investment Advisor, as compensation for services provided, a fee at an annual
rate of $25,000. At December 31, 1997, $6,250 is payable.
An officer of the Company is a partner in a law firm that provides legal
services to the Company. Fees to the firm for legal services aggregated $17,000
in 1997, of which $4,250 is payable at December 31, 1997.
The Board of Directors has resolved that each director be paid $250 per meeting
attended plus an annual fee of $600, and that the Chairman of the Board be paid
an annual consulting fee of $15,000 and other officers an annual salary of $100
as compensation for their services. Directors and officers are reimbursed by the
Company for out-of-pocket expenses incurred in attending meetings of the Board
of Directors.
4. Cost, Purchases, and Sales of Security Investments
Cost of purchases and proceeds from sales and maturities of investment
securities, other than short-term investments, aggregated $3,269,550 and
$3,531,187, respectively, during the year ended December 31, 1997.
At December 31, 1997, the cost of investment securities owned is the same for
financial reporting and federal income tax purposes. Net unrealized appreciation
of investment securities is $550,035 (aggregate gross unrealized appreciation of
$550,035 less aggregate gross unrealized depreciation of $0).
13
<PAGE>
Shepmyers Investment Company
Notes to Financial Statements (continued)
5. Components of Net Assets
The components of net assets at December 31, 1997, are as follows:
Common stock issued and outstanding, including
additional paid-in capital $14,723,326
Undistributed net investment income 269,297
Undistributed net capital gains 9,251
Net unrealized appreciation of investments 550,035
-----------
Net assets $15,551,909
===========
14
<PAGE>
Shepmyers Investment Company
Matters Submitted to Shareholders for Approval - Unaudited
At the annual meeting of shareholders, the following matters were submitted to
the shareholders, and the results of their voting is as follows:
1. Approval of Directors
Name of Candidate In Favor Against Abstain
- ----------------- -------- ------- -------
P. E. Spears 571,656 1 -
G. P. King 571,656 1 -
L. S. DeVan 525,693 45,964 -
J. M. Fuss 571,656 1 -
R. E. Lemmon, Jr. 571,656 1 -
R. P. Myers 571,656 1 -
P. F. Spears 571,656 1 -
J. F. Thompson, III 571,656 1 -
C. D. Weber 571,656 1 -
2. Continuation of Existing Investing Advisory Contract
570,257 - 1,400
3. Selection of Ernst & Young LLP as Independent Certified Public Accountants
571,257 200 200
15
<PAGE>
Effective October 1997, Joseph McLaughlin, Executive Vice President of The
Rittenhouse Trust Company ("RTC"), became the Company's co-portfolio manager
with George Connell, President, Chief Executive Officer and sole shareholder of
RTC. Mr. Connell has been the Company's portfolio manager since its inception.
As co-portfolio managers, Mr. McLaughlin and Mr. Connell are primarily
responsible for the day-to-day management of the Company's portfolio.
Mr. McLaughlin had previously been a Vice President, portfolio manager and
Manager of the Private Client Group at Rittenhouse Financial Services, Inc.
("RFS"). Prior to joining RTC and RFS in 1992, Mr. McLaughlin had been a Vice
President of JP Morgan since 1986. Mr. Connell had previously been Principal
Executive Officer, sole shareholder and a director of RFS as well as President
and a director of Rittenhouse Capital Management, Inc. and President, Director
and Principal of Rittenhouse Financial Securities, Inc.
<PAGE>
CORPORATE DIRECTORY
DIRECTORS AND OFFICERS
P.E. Spears*
President and Chairman of the Board
G.P. King*
Vice President & Treasurer
W.B. McConnel, III
Secretary
L.S. DeVan*
J.M. Fuss*
R.E. Lemmon, Jr.*
R.P. Myers*
P.F. Spears*
J.F. Thompson, III*
C.D. Weber*
*Director
<PAGE>
AUDITOR
Ernst & Young LLP
Harrisburg, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INVESTMENT ADVISOR
The Rittenhouse Trust Company
Radnor, Pennsylvania
CUSTODIAN, TRANSFER AGENT, REGISTRAR & DIVIDEND DISBURSING AGENT
Investors Trust Company
Wyomissing, Pennsylvania
