<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 24 , 1999
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Date of Report (Date of earliest event reported)
FOUR CORNERS FINANCIAL CORPORATION
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(Exact Name of registrant as specified in its charter)
New York 0-8628
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State or other jurisdiction Commission File Number
22-2044086
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IRS Employer ID Number
370 East Avenue, Rochester, New York 14604
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(Address of Principal Executive Offices
(716) 454-2263
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(Registrant's telephone number, including area code)
The Exhibit Index is located at Page 6 of this Report
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ITEM 1: CHANGES IN CONTROL OF REGISTRANT
Not Applicable
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable
ITEM 3: BANKRUPTCY OR RECEIVERSHIP
Not Applicable
ITEM 4: CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On March 23, 1999, Bonadio & Co., LLP resigned as the principal
accountant to audit the Registrant's financial statements, specifically with
respect to the audit of the Registrant's financial statements for its fiscal
year ended December 31, 1998.
Bonadio & Co., LLP's report on the Registrant's financial statements
for either of the Registrant's past two fiscal years did not contain an adverse
opinion or a disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
The decision to change the Registrant's principal accountant was
mandated by the Staff of the Securities and Exchange Commission and was formally
approved by the Registrant's Board of Directors.
During the Registrant's two most recent fiscal years and any subsequent
interim period preceding such resignation, there were no disagreements with
Bonadio & Co., LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure.
During the Registrant's two most recent fiscal years and any subsequent
interim period preceding such resignation, there were no "reportable events" as
such term is defined in Item 304(a)(1)(v)(A)-(D) and Item 304(a)(2)(A)-(D) of
Regulation S-K.
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On March 15, 1999, the Registrant engaged Freed Maxick Sachs & Murphy,
PC as its new principal accountant to audit the Registrant's financial
statements, specifically its financial statements for its fiscal year ended
December 31, 1998.
The letter of Bonadio & Co., LLP, dated March 24, 1999, stating that
such firm is in agreement with the response to Item 304(a) of Regulation S-K as
set forth in this Current Report (Form 8-K) is hereby filed as an exhibit to
this Current Report.
ITEM 5: OTHER EVENTS
None
ITEM 6: RESIGNATION OF REGISTRANT'S DIRECTORS
Not Applicable
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
A. Financial Statement of Business Acquired
Not Applicable
B. Pro Forma Financial Information
Not Applicable
C. Exhibits
The following Exhibits, as applicable, are attached
to this Current Report (Form 8-K). The Exhibit Index is found on the page
immediately succeeding the signature page and the Exhibits follow on the pages
immediately succeeding the Exhibit Index.
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1. Underwriting Agreement
Not Applicable
2. Plan of acquisition, reorganization,
arrangement, liquidation or succession
Not Applicable
4. Instruments defining the rights of security
holders, including debentures
Not Applicable
16. Letter re: change in certifying accountant
16.1 Letter of Bonadio & Co., LLP dated
March 23, 1999 resigning as
Registrant's principal accountant
16.2 Letter of Bonadio & Co., LLP dated
March 24, 1999 expressing agreement
with the statements made in the
Registrant's Current Report (Form
8-K).
17. Letter re: director resignation
Not Applicable
20. Other documents or statements to security
holders
Not Applicable
24. Consents of experts and counsel
Not Applicable
25. Power of Attorney
Not Applicable
27. Financial Data Schedule
Not Applicable
99. Additional Exhibits
99.1 February 4, 1999 letter of the Staff
of Securities and Exchange
Commission mandating change in
principal accountant
99.2 Letter of March 15, 1999 engaging
Freed Maxick Sachs & Murphy, PC as
the Registrant's principal
accounting firm.
ITEM 8: CHANGE IN FISCAL YEAR
Not Applicable
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 24, 1999 FOUR CORNERS FINANCIAL CORPORATION
By: /s/ Frank B. Iacovangelo
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Frank B. Iacovangelo
President, Treasurer (Chief Executive
Officer and Chief Financial Officer)
Dated: March 24, 1999 By: /s/ William S. Gagliano
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William S. Gagliano
Executive Vice President and Chief
Accounting Officer
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INDEX TO EXHIBITS
Page
1. Underwriting Agreement N/A
2. Plan of acquisition, reorganization, N/A
arrangement, liquidation or succession
4. Instruments defining the rights of security N/A
holders, including debentures
16. Letter re: change in certifying accountant
16.1 Letter of Bonadio & Co., LLP dated 7
March 23, 1999 resigning as
Registrant's principal accountant
16.2 Letter of Bonadio & Co., LLP dated 8
March 24, 1999 expressing agreement
with the statements made in the Registrant's
Current Report (Form 8-K).
17. Letter re: director resignation N/A
20. Other documents or statements to security holders N/A
24. Consents of experts and counsel N/A
25. Power of Attorney N/A
27. Financial Data Schedule N/A
99. Additional Exhibits
99.1 February 4, 1999 letter of the Staff of 9
Securities and Exchange Commission
mandating change in principal accountant
99.2 Letter of March 15, 1999 engaging 12
Freed Maxick Sachs & Murphy, PC
as the Registrant's principal accounting firm.
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[Letterhead of Bonadio & Co., LLP]
March 23, 1999
Mr. William S. Gagliano
Four Corners Financial Corporation and Subsidiary
376 East Avenue
Rochester, New York 14604
Dear Bill:
This is to confirm that the client - auditor relationship between Four Corners
Financial Corporation and Subsidiary (005-38517) and Bonadio & Co., LLP has
ceased.
Very truly yours,
BONADIO & CO., LLP
by /s/ Thomas F. Bonadio
Thomas F. Bonadio
cc: Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, D.C. 20549
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[Letterhead of Bonadio & Co., LLP]
March 24, 1999
Securities and Exchange Commission
Gentlemen:
We have read Item 4 included in Form 8-K dated March 24, 1999 of Four Corners
Financial Corporation and Subsidiary file with the Securities and Exchange
Commission and are in agreement with the statements contained therein.
Very truly yours,
BONADIO & CO., LLP
by /s/ Thomas F. Bonadio
Thomas F. Bonadio
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
[SEAL]
DIVISION OF
CORPORATION FINANCE February 4. 1999
Mail Stop 4-9
By facsimile to (716) 232-3882 and U.S. Mail
Bernard J. Iacovangelo, Secretary
Four Corners Financial Corporation
370 East Avenue
Rochester, New York 14604
RE: Four Corners Financial Corporation
Revised Schedule 14A
Revised Schedule 13E-3
Filed on November 2,1998
Form 1O-K for the year ended December 31, 1997
Filed March 31, 1998
File No. 0-8628
Dear Mr. Iacovangelo:
We have the following comments on your filings. Unless directed
otherwise, please revise your documents in response to these comments.
Schedule 13E-3
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Certain Potential Detriments of the Reverse Stock Split, page 4
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1. We note your response to prior comment no. 4. We respectfully disagree with
your determination that the offer price is 16% of the price paid in 1992.
We still believe that it is only 4% of the 1992 price. One post-1992 stock
split share was valued at $3 in the 1992 split. As the hypothetical example
below illustrates, that same share is now valued at $.12 in the 1998 stock
split.
Assume a shareholder held four shares prior to the 1992 reverse stock
split:
Pre-1992 Split Shares: 4
Post-1992 Split Shares: 1
Valuation of Shares in 1992 Split: $3
Pre-1998 Split Shares: 1
Post-1998 Split Shares: .01
Valuation of Shares in 1998 Split: $.12
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Bernard J. Iacovangelo
Page 2
The Reverse Stock Split--Fairness, page 13
2. We note your response to prior comment no. 6. We could not locate the
specific results of the net book value analysis or the liquidation
analysis. Please revise.
3. We note the statement that the Board believes that Bonadio considered the
purchase of shares held by the former director at $.50 per share.
However, we were unable to locate any mention of this consideration in
Bonadio's report or the summary of its analysis. The discussion of
Bonadio's analysis should be expanded to clarify what consideration
Bonadio gave to this transaction.
Exhibit B - Valuation Report of the Fair Market Value of the Common Stock of
Four Corners Financial Corporation
4. Refer to response 9. We continue to believe that the service provided by
your auditors, Bonadio & Co. creates an impairment of the firm's
independence. Please provide the staff with a representation that the
registrant will undertake to engage new auditors to audit the financial
statements for the fiscal year ended December 31, 1998.
General
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File amended materials in response to these comments. We may have more
comments after we review your responses and the amendment, so you must leave
time for further staff review prior to requesting acceleration. Provide a cover
letter keying your responses to our comments and provide any supplemental
information we have requested. If you believe complying with a comment is not
appropriate, tell us why in your letter.
You should direct questions regarding the financial statements and
related issues to Claire De Labar at (202) 942-1852, or Hugh Miller III,
Assistant Chief Accountant, at (202) 942-1962. Direct any other questions to
undersigned at (202) 942-1983. In this regard, you may
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Bernard J. lacovangelo
Page 3
contact Paula Dubberly, Assistant Director, at (202) 942-1960, who supervised
the review of your filing.
Very truly yours,
/s/ Nicole Maddrey
Nicole M. Maddrey
Senior Counsel
cc: Richard B. Sullivan, Esq.
Chamberlain, D'Amanda,
Oppenheimer & Greenfield
1600 Crossroads Building
Two State Street
Rochester, NY 14614
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Letterhead of Freed Maxick
March 15, 1999
Four Corners Financial Corporation & Subsidiary
370 East Avenue
Rochester, New York 14604
Gentlemen:
This letter is to explain our understanding of the arrangements for the services
we are to perform for Four Corners Financial Corporation and Subsidiary for the
year ending December 31, 1998.
We will perform an audit of Four Corners Financial Corporation and Subsidiary's
financial statements as of and for the year ended December 31, 1998. We
understand that the financial statements will be prepared in accordance with
generally accepted accounting principles.
We will conduct the audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable, rather than absolute, assurance about whether the financial
statements are free of material misstatement whether caused by error, fraudulent
financial reporting, or misappropriation of assets. Accordingly, a material
misstatement, whether caused by error, fraudulent financial reporting or
misappropriation of assets, may remain undetected. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. As a result, an audit is not designed to detect errors or
fraud that are immaterial to 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 audit will provide a reasonable basis for our report.
An audit also includes obtaining an understanding of internal control sufficient
to plan the audit and to determine the nature, timing and extent of audit
procedures to be performed. An audit is not designed to provide assurance on
internal control or to identify reportable conditions.
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On January 1, 2000, information technology experts believe that many application
systems may fail as a result of erroneous calculations and data integrity
problems. The effects of this issue will vary from system to system and may
adversely affect an entity's operations as well as its ability to prepare
financial statements.
An audit of the financial statements made in accordance with generally accepted
auditing standards is not designed to determine whether your information systems
are Year 2000 compliant. Furthermore, we remind you that we have no
responsibility in regards to Four Corners Financial Corporation and Subsidiary's
efforts to make your information systems Year 2000 compliant nor to provide you
with assurance on whether the Company has addressed or will be able to address
all of the affected systems on a timely basis. The responsibilities necessary to
conform the Company's information systems to be Year 2000 compliant are those of
the Company's management.
If circumstances arise relating to the conditions of your records, the
availability of sufficient, competent evidential matter, or indications of a
significant risk of material misstatement of the financial statements because of
error, fraudulent financial reporting, or misappropriation of assets which in
our professional judgment prevent us from completing the audit, we retain the
unilateral right to take any course of action permitted by professional
standards, including withdrawal from the engagement.
Our audit is for the use of the company and its shareholders. The audit will not
be planned or conducted in contemplation of reliance by any third party or with
respect to any specific transaction. Therefore, items of a possible interest to
a third party will not be specifically addressed or matters may exist that will
be assessed differently by a third party, possibly in connection with a specific
transaction.
As you know, management is responsible for (1) the preparation of Four Corners
Financial Corporation and Subsidiary's financial statements, (2) establishing
and maintaining effective internal control over financial reporting and
safeguarding assets, (3) properly recording transactions in the records, (4)
identifying and ensuring that Four Corners Financial Corporation and Subsidiary,
complies with the laws and regulations applicable to its activities and (5)
making all financial records and related information available to us. At the
conclusion of our audit, we will request certain written representations from
management about the financial statements and matters related thereto. Four
Corners Financial Corporation and Subsidiary agrees to indemnify Freed Maxick
Sachs & Murphy, P.C. for any damages, including attorney fees, caused, in whole
or in part, by Four Corners Financial Corporation and Subsidiary's knowing or
willful failure to fulfill these responsibilities.
During the course of the engagement, we may accumulate records containing data,
which should be reflected in your books and records. You will determine that all
such data, if necessary will be so reflected. Accordingly, you will not expect
us to maintain copies of such records in our possession.
Your accounting department will be asked to assist us to the extent practicable
by providing us with trial balances, analyses and supporting schedules.
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The fee for the above services is estimated at $5,000, computed at our standard
per hour rates (a copy of which is available upon request), plus any
out-of-pocket costs, and will be invoiced as work progresses and as expenses are
incurred. These fees are due and payable by Bonadio & Co., LLP within 30 days
from the billing date.
This fee estimate will be subject to adjustments based on unanticipated changes
in the scope of our work and/or the untimely receipt by us of the information on
the client participation list. All other provisions of this letter will survive
any fee adjustment.
Certain services and products to be provided pursuant to this engagement letter
will be provided to Freed Maxick Sachs & Murphy, P.C. (FMSM) by FM Business
Services, Inc. (FMBS) pursuant to a contract between FMSM and FMBS. It should be
noted that FMSM is a separate and distinct legal entity from FMBS. FMBS provides
certain personnel, supplies, space and other services and products to FMSM, and
FMSM will be using same to perform its obligations under this engagement letter.
FMSM and its shareholders are responsible for services provided by FMBS and FMBS
is not a certified public accounting firm and is not licensed or permitted as
such by New York State. By signing this engagement letter, you agree that both
FMSM and FMBS will have access to certain files, records and information about
Four Corners Financial Corporation and Subsidiary in connection with the
performance by FMSM of its obligations under this engagement letter. In
addition, you consent to the use by FMBS and its affiliates of information about
Four Corners Financial Corporation and Subsidiary for the purpose of marketing
services and products of FMBS and/or its affiliates to Four Corners Financial
Corporation and Subsidiary. Any information obtained by FMSM and FMBS about Four
Corners Financial Corporation and Subsidiary shall be kept confidential in
accordance with, and to the extent required by the laws of New York State.
By signing this engagement letter you agree that any dispute that may arise
regarding the meaning, performance, or enforcement of this engagement will,
prior to resorting to litigation, be submitted to mediation upon the written
request of any party to the engagement. All mediations initiated, as a result of
this engagement shall be administered by the American Arbitration Association
(AAA). The results of this mediation shall be binding only upon agreement of
each party to be bound. Costs of any mediation proceeding shall be shared
equally by both parties. It is further agreed that the place for performance of
this mediation is Buffalo, New York.
In the event we are requested or authorized by Four Corners Financial
Corporation and Subsidiary or are required by government regulation, subpoena,
or other legal process to produce our documents or our personnel as witnesses
with respect to our engagements for Four Corners Financial Corporation and
Subsidiary, Four Corners Financial Corporation and Subsidiary will, so long as
we are not a party to the proceeding in which the information is sought,
reimburse us for our professional time and expenses, as well as the fees and
expenses of our counsel, incurred in responding to such requests.
It is agreed by Four Corners Financial Corporation and Subsidiary and Freed
Maxick Sachs & Murphy, P.C. or any successors in interest that no claim by or on
behalf of either party
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arising out of services rendered pursuant to this agreement shall be asserted
more than three years after the date of the audit report or one year after the
date of termination of Freed Maxick Sachs & Murphy, PC's services, whichever
date is earlier.
This letter constitutes the complete and exclusive statement of agreement
between Freed Maxick Sachs & Murphy, P.C. and Four Corners Financial Corporation
and Subsidiary.
If the foregoing agrees with your understanding of the terms of our engagement,
please sign the duplicate copy of this letter and return same to us.
Very truly yours,
/s/ FREED MAXICK SACHS & MURPHY, P.C.
FREED MAXICK SACHS & MURPHY, P.C.
Acknowledge:
Four Corners Financial Corporation and Subsidiary
/s/ William S. Gagliano
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William S. Gagliano
President
3/22/99
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Date
