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Exhibit Index on
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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
For the fiscal year ended May 31, 1998 Commission File Number 0-9086
BANKERS BUILDING LAND TRUST
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Illinois 36-6067489
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
AMCORE Bank N.A., Rockford
501 Seventh Street
Rockford, Illinois, Trustee 61104
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 815-968-2241
Securities registered pursuant to Section 12(g) of the Act:
5,000 Units representing beneficial interest in the Registrant.
Indicate by check mark if disclosure of delinquent files pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrant's knowledge, in definitive proxy or information statements
incorporated by reference 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 (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
--- ---
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PART I
Item 1. Business
Registrant, Bankers Building Land Trust (the "Trust") is a trust organized under
the laws of the State of Illinois, which is engaged in the single business
activity of holding title to certain land at the southwest corner of Clark and
West Adams Streets in Chicago, Illinois, collecting rent under the lease
described below and disbursing the net proceeds. The Trust was formed under a
Trust Agreement and Declaration of Trust (the "Trust Agreement") dated June 1,
1926 with the National Bank of the Republic of Chicago, as Trustee, and will
terminate upon the occurrence of certain conditions set forth in the Trust
Agreement. In 1933, Illinois National Bank and Trust Company (the "Bank"), 501
Seventh Street, P.O. Box 1537, Rockford, Illinois 61110-0037 (AMCORE Bank N.A.,
Rockford after 1985) became Trustee of the Trust (the "Trustee") as a result of
the resignation of the original Trustee. AMCORE Bank N.A., Rockford utilizes
AMCORE Investment Group, N.A., formerly AMCORE Trust Company, ("Trust Company")
to perform its duties as Trustee. The Trust has no employees but the Trust
Company currently employs 149 persons.
The sole assets of the Trust (the "Trust Estate") are the above-mentioned land
and cash. The Bankers Building, a 41 story office building which was completed
in 1927, is situated on the land owned by the Trust. The land is subject to a 99
year lease commencing on June 1, 1926 and expiring on May 31, 2025 (the
"Lease").
The annual rental for the leased property is $275,000 payable in equal quarterly
installments to the Trustee on the first day of March, June, September and
December of each year, plus fees and expenses of the Trustee. The current Lessee
is LaSalle National Bank as Trustee of Trust Number 49371 dated August 25, 1975
(the "Lessee").
Due to bankruptcy, the former lessee of the land transferred ownership of the
building located on the land in satisfaction of the lessee's mortgage. The new
owner of the building assumed the lease of the land owned by the Trust. In
addition, the Trust entered into an agreement with the new owner to sell the
land and the building as one entity. On June 17, 1998 the Trust sold the land
subject to the operating lease in accordance with the agreement they entered
with the lessee that the land and building would be sold as one entity
Beneficial interest in the Trust is divided into 5,000 equal units (the "Units")
which are represented by Bankers Building Land Trust Certificates (the
"Certificates"). Each owner of a Certificate (the "Certificate Holder") is
distributed quarterly a pro rata portion of the rentals, which the Trustee
understands have equaled $55 per unit per year since the inception of the Trust,
except as described in Item 11. However, this amount may be reduced by expenses
of the Trustee which are not reimbursed by the Lessee.
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Item 2. Properties
The sole asset of the Trust (other than cash) is property consisting of a fee
interest, subject to a 99 year lease entered into on June 1, 1926 and expiring
on May 31, 2025, in the land under the Bankers Building at 105 West Adams
Street, Chicago, Illinois. The land has an area of approximately 22,300 square
feet and is located at the southwest corner of Clark and West Adams Streets in
the central business district of the City of Chicago in an area known as the
Loop. The land is improved with a 420,000 square foot 41 story brick and steel
frame commercial office building built in 1926-27 as a condition of the Lease.
The Lease was recorded in the Cook County deed records on July 12, 1926 with the
original Lessee, Adams Clark Building Corporation, assuming the obligation to
wreck the existing buildings on the premises and construct a new office building
at a cost of not less than $4,650,000. The original lessors were Ernest M.
Jackson and Carrie M. Jackson, who after assigning their interest to the Trust
on July 10, 1926, shortly thereafter sold the Certificates for an amount which
the Trustee understands to have been approximately $1,000 per Unit. The current
Lessee of the trust property is LaSalle National Bank, as Trustee of Trust
Number 49371 dated August 25, 1925, which obtained the leasehold interest by an
Assignment dated August 25, 1975. The Lease provided for an option to purchase
the property for $5,500,000 but the option expired on June 1, 1976 unexercised.
There are no further options outstanding.
Rents of $275,000 per year with no provision for increase (except that interest
of 7% per annum is assessed for late payments) are payable under the Lease
quarterly in advance on the first day of March, June, September and December.
The Lease requires the Lessee to pay all taxes, assessments and other fees and
expenses, incurred in connection with the land or building including reasonable
compensation and expenses of the Trustee that would act to diminish the annual
net income distribution of $275,000 to the Certificate Holders. In addition, the
Lease provides for a trustee of insurance who is responsible for collecting
premiums from the Lessee and purchasing insurance for the Bankers Building.
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Item 3. Legal Proceedings
There are no material pending legal proceedings to which the Trustee is a party
or of which the property in the Trust is the subject.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of the 1998 fiscal year to a
vote of Security Holders.
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
The Trustee understands that there is no regular market for the Certificates but
that certain brokers have from time to time handled occasional transactions in
the Certificates. The price for the Units in transactions in which the Trustee
was aware of the sales price was approximately $750 to 850 in fiscal year 1998
and $870 to $880 in fiscal year 1997.
As of May 31, 1998, the number of Certificate Holders of record was 428. (See
Item 1. Business for a description of the distribution to Certificate Holders of
the proceeds payable under the Lease.)
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Item 6. Selected Financial Data
This selected financial data should be read in conjunction with the financial
statements and related notes of Bankers Building Land Trust appearing elsewhere
herein.
<TABLE>
<CAPTION>
Year ended May 31,
---------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating revenues:
Rent $ 275,000 $ 275,000 $ 275,000 $ 275,000 $ 275,000
Servicing fees 30,095 33,237 7,950 7,950 7,950
Interest 10,919 3,223 -- -- --
---------- ---------- ---------- ---------- ----------
Total operating
revenues 316,014 311,460 282,950 282,950 282,950
---------- ---------- ---------- ---------- ----------
Operating expenses:
Trustee fees and
other expenses 7,950 7,950 27,950 7,950 27,950
---------- ---------- ---------- ---------- ----------
Total operating
expenses 7,950 7,950 27,950 7,950 27,950
---------- ---------- ---------- ---------- ----------
Net income $ 308,064 $ 303,510 $ 255,000 $ 275,000 $ 255,000
========== ========== ========== ========== ==========
Distributions to
certificate
holders $ 275,000 $ 295,000 $ 255,000 $ 275,000 $ 255,000
========== ========== ========== ========== ==========
Total assets
at year-end $4,538,807 $4,596,783 $4,399,995 $4,329,335 $4,329,575
========== ========== ========== ========== ==========
</TABLE>
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Due to the passive nature of the Registrant's activities, which generally
include only the collection of rent and the disbursements of these proceeds less
expenses to the Certificate Holders of the Registrant, there has been no
material variation, in the Registrant's financial condition or results of
operations, during the year ended May 31, 1998. However, on June 17, 1998 the
sole asset of the Trust was sold (see Item 1. Business) for $8,354,000. It is
expected that the Trust will be liquidated, and the net assets will be
distributed to certificate holders.
Item 8. Index to Financial Statements and Schedules
Pages
-----
Independent Auditor's Report F-l
Financial Statements:
Balance Sheets as of May 31, 1998 and 1997 F-2
Statements of Operations and Retained Earnings
for the years ended May 31, 1998, 1997 and 1996 F-3
Statements of Cash Flows for the years ended
May 31, 1998, 1997 and 1996 F-4
Notes to Financial Statements F-5 - F-6
All schedules are omitted because they are not applicable, are not required, or
the information is included in the financial statements or footnotes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
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PART III
Item 10. Directors and Executive Officers of the Registrant
The Trust has no directors or executive officers. The Trust Company administers
the Trust pursuant to a Trust Agreement which sets out the responsibilities and
duties of the Trustee. Such duties include, but are not limited to, the
following tasks: keeping the register of names of the Certificate Holders,
maintaining records showing receipts and disbursements of the Trust, collecting
rents and distributing income to the Certificate Holders and other ministerial
duties relating to the operation of the Trust. The self-executing provisions of
the Trust Agreement and the 99 year Lease, along with the passive nature of the
Trust, limits the involvement of the Trustee to the above activities. However,
in the event of a default by the Lessee, the Trustee has the authority to take
such action as is necessary and proper for the best interests of the Trust with
respect to managing, leasing, operating, selling or otherwise disposing of the
Trust Estate. The Trustee may in the event of default terminate the Trust by
transferring title to the Certificate Holders for them to hold as tenants in
common. In addition, the Trustee is empowered upon such default to sell a
portion of or the entire Trust Estate and distribute ratably the net proceeds of
such sale after deducting all necessary expenses of the sale including
reasonable compensation for the Trustee. If the Trust is not terminated by other
provisions in the Trust Agreement, the Trust will terminate 21 years after the
death of the last to die of the persons specified in the Trust Agreement. As of
October 1996, the Trustee was aware of one individual specified in the Trust
Agreement who was still living.
Although not required to do so, the Trustee may in its absolute discretion seek
the advice of the Certificate Holders. If a majority interest of the Certificate
Holders agree on a course of action that is not inconsistent with express
provisions of the Trust Agreement, the Trustee may, but is not obligated to,
effectuate such course of action.
The Bank is chartered as a national bank and the Trust Company is chartered as a
non-depository national bank. As such, the Bank and the Trust Company are under
the supervision of, and subject to regular examination by, the Comptroller of
the Currency. In addition, the Bank is subject to the rules and regulations of
the Federal Reserve Board and the Federal Deposit Insurance Corporation. As of
May 31, 1998, the total assets and deposits of the Bank were approximately
$1,732,748,000 and $1,106,141,000, respectively. The Trust Company had
approximately 3,884 accounts and the market value of assets held in accounts
over which the Trust Company exercised investment discretion was approximately
$3,484,499,000 as of May 31, 1998. The Trust Company consists of 149 employees
and officers. The principal persons in the Trust Company are: John M. Pepe,
Chairman of the Board; Carl J. Dargene, Vice Chairman of the Board; Alan W.
Kennebeck, President, and Chief Executive Officer; Lee R. Mayer, Secretary;
Marvin R. Anderson, Treasurer, Senior Vice President and Trust Officer; Jay R.
Maddox, Executive Vice President, Trust Officer.
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Item 11. Executive Compensation
Unless paid by the Lessee, the Trustee is entitled to reasonable compensation
out of the gross rental proceeds payable under the Lease for its services and
management of the Trust and reimbursement for expenses reasonably incurred in
connection with the administration of the Trust. In the event the Trustee
renders extraordinary services to the Trust, it is entitled to additional
reasonable compensation from the same sources. Such amounts are payable from the
gross income or proceeds of the Trust Estate prior to distribution of the net
proceeds to the Certificate Holders. The Lease requires the Lessee to pay the
Trustee its compensation and any amount incurred in connection with the Trust's
administration which would otherwise be payable out of the gross income of the
Trust Estate and would act to reduce the net income of $55 per year per Unit
($275,000/5,000 Units = $55) that was intended under the Lease for distribution
to the Certificate Holders. The current Trustee is not aware of any period
during which the Certificate Holders were entitled to receive their distribution
of $55 per annum per Certificate and received less than this amount except for
the years ended May 31, 1987, May 31, 1994, and May 31, 1996. During 1987, the
Trust incurred a $5,000 fee for an appraisal of the land owned by the Trust. The
distribution for 1987 was $54 per Certificate. During 1994, the Trust incurred
$20,000 in legal fee. The distribution for 1994 was $51 per certificate. During
1996, the Trust incurred $20,000 in legal fees. The distribution for 1996 was
$51 per certificate. During 1997, the Trust recovered the $20,000 in legal fees
incurred during 1996. The distribution for 1997 was $59 per certificate. As
provided in the Lease, the Lessee is currently reimbursing the Trustee for the
costs associated with the reporting requirements of the Securities Exchange Act
of 1934, as amended.
The Lease requires the Lessee to pay rents quarterly in advance. Payment to the
Certificate Holders is not made until the first day of the following quarter.
The Trust Agreement does not obligate the Trustee to pay interest to the
Certificate Holders for the interest earned, if any, during the period in which
the Trustee has receipt of the rents but is not yet obligated to make
distributions to the Certificate Holders. Total trust fees were $7,950 for the
year ended May 31, 1998.
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Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table lists the beneficial ownership of the Trust's certificates
of beneficial interest with respect to all persons known by the Trust as of May
31, 1998 to be beneficial owners of more than five percent of such certificates.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Amount of Beneficial Interest Percent of Class
- ------------------------------------- ----------------------------- ----------------
<S> <C> <C>
Cede & Co. 2,794 55.88%
Box 222
Bolling Green Station
New York, NY 10004
Smith Barney Shearson 349 6.98%
1235 North Mulford
Rockford, IL 61107
</TABLE>
Item 13. Certain Relationships and Related Transactions
See Item 12. above.
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PART IV
Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K
(a) See Item 8. Index to Financial Statements and Schedules on Page 6.
(b) See "Exhibit Index" on Page 11.
(c) Subsequent to the fiscal year end, a report on Form 8-K was filed June
18, 1998 notifying the SEC of the sale of the land.
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SIGNATURES
Pursuant to the requirements of Date July 16, 1998
---------------------------
the Securities Exchange Act of
1934, the Registrant has duly Bankers Building Land Trust
--------------------------------
caused this report to be signed (Registrant)
on its behalf by the undersigned,
thereunto duly authorized.
AMCORE Bank N.A.,
By Rockford, Trustee
-----------------------------
By /s/ Lee R. Mayer
-----------------------------
Lee R. Mayer,
Senior Vice President
and Trust Officer
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EXHIBIT INDEX
The following exhibits are filed with this Registration Statement:
4.01 Trust Agreement and Declaration of Trust dated June 1, 1926, naming the
National Bank of the Republic of Chicago as Trustee, (previously filed in
paper as Exhibit 1 to the Registrant's Form 10 Registration Statement, File
No. 0-9086, and incorporated herein by reference).
10.01 Indenture of Lease dated June 1, 1926, between Ernest A. Jackson and
Carrie M. Jackson and Adams Clark Building Corporation, (previously filed in
paper as Exhibit 2 to the Registrant's Form 10 Registration Statement, File
No. 0-9086, and incorporated herein by reference).
10.02 Trustee's deed dated June 27, 1933, from the National Bank of the
Republic of Chicago as Trustee, to the Illinois National Bank and Trust
Company, as Trustee, (previously filed in paper as Exhibit 3 to the
Registrant's Form 10 Registration Statement, File No. 0-9086, and
incorporated herein by reference).
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