HELLER FINANCIAL INC, 10-K, 1997-02-11

HELLER FINANCIAL INC
10-K, 1997-02-11
SHORT-TERM BUSINESS CREDIT INSTITUTIONS

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<PAGE>

1996

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the Fiscal Year Ended December 31, 1996

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]

Commission file number 1-6157

HELLER FINANCIAL, INC.
(Exact name of registrant as specified in its charter)

Delaware 36-1208070
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

500 West Monroe Street, Chicago, 60661
Illinois (Zip Code)
(Address of principal executive
offices)

Registrant's telephone number, including area code: (312) 441-7000

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
------------------- ------------------------------------
<S> <C>
Cumulative Perpetual Senior Preferred Stock, Series A New York Stock Exchange, Inc.
</TABLE>

Securities registered pursuant to Section 12(g) of the Act: None

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 .

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 reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

Aggregate market value of voting stock held by non-affiliates: None.

Number of shares of Common Stock outstanding at February 11, 1997: 100.
Documents incorporated by reference: None.

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Website is http://www.hellerfin.com
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
ITEM NO. NAME OF ITEM PAGE
-------- ------------ ----

PART I
<C> <S> <C>
Item 1. Business....................................................... 3
Description of the Business................................... 3
Product Categories............................................ 3
Asset Based Finance.......................................... 3
Cash Flow Lending............................................ 5
Real Estate Finance.......................................... 5
International Asset Based Finance and Factoring.............. 5
Specialized Finance.......................................... 5
Syndication, Securitization and Loan Sale Activities.......... 5
Ownership..................................................... 6
Summary of Total Revenues, Lending Assets and Investments..... 6
Rates Charged; Competition; Regulation........................ 6
Item 2. Properties..................................................... 6
Item 3. Legal Proceedings.............................................. 6
Item 4. Submission of Matters to a Vote of Security Holders............ 6

PART II
Market for Registrant's Common Equity and Related Stockholder
Item 5. Matters........................................................ 7
Item 6. Selected Financial Data........................................ 8
Management's Discussion and Analysis of Financial Condition and
Item 7. Results of Operations.......................................... 9
Results of Operations......................................... 9
Portfolio Composition......................................... 11
Product Categories............................................ 13
Credit Management............................................. 20
Portfolio Quality............................................. 21
Liquidity and Capital Resources............................... 24
Risk Management............................................... 24
Accounting Developments....................................... 25
Item 8. Financial Statements and Supplementary Data.................... 26
Changes in and Disagreements with Accountants on Accounting and
Item 9. Financial Disclosure........................................... 53

PART III
Item 10. Directors and Executive Officers of the Registrant............. 54
Item 11. Executive Compensation......................................... 58
Summary Compensation Table.................................... 58
Retirement and Other Defined Benefit Plans.................... 59
Compensation of Directors..................................... 60
Employment Contracts and Termination of Employment and Change
of Control Arrangements...................................... 60
Compensation Committee Interlocks and Insider Participation... 61
Item 12. Security Ownership of Certain Beneficial Owners and Management. 61
Voting Securities............................................. 61
Equity Securities............................................. 61
Item 13. Certain Relationships and Related Transactions................. 62
Keep Well Agreement with Fuji Bank............................ 62
Tax Allocation Agreements..................................... 63
Certain Transactions with Fuji Bank and with the Parent and
Its Subsidiaries............................................... 64
Certain Other Relationships................................... 65

PART IV
Exhibits, Financial Statement Schedules and Reports on Form 8-
Item 14. K.............................................................. 66
</TABLE>

2
<PAGE>

PART I

ITEM 1. BUSINESS

DESCRIPTION OF THE BUSINESS

Heller Financial, Inc. (the "Company") was incorporated in 1919 under the
laws of the State of Delaware and is engaged in various aspects of the
commercial finance business. The Company and its consolidated subsidiaries
employ approximately 1,500 people. The executive offices are located at 500
West Monroe Street, Chicago, Illinois 60661 (telephone: (312) 441-7000).
Unless the context indicates otherwise, references to the Company include
Heller Financial, Inc. and its consolidated subsidiaries.

The Company is a diversified financial services company which provides a
broad array of commercial financial products and services primarily to middle-
market companies in the United States and internationally. The Company
provides its products and services through five product categories: (1) asset
based finance, (2) cash flow lending, (3) real estate finance, (4)
international asset based finance and factoring and (5) specialized finance.
The middle-market segment served includes entities primarily in the
manufacturing and service sectors with annual sales in the range of $15
million to $200 million and in the real estate sector with property values
generally in the range of $5 million to $40 million.

The Company's emphasis has been to grow the lower risk asset based finance
businesses, maintain significant franchises in corporate finance and real
estate finance and continue to grow its international asset based lending
businesses. The asset based businesses have developed to become the largest
product category in assets and revenues. Earnings quality has been
strengthened through the growth in the asset based businesses which provide
more consistent revenue streams and produce lower and less volatile credit
quality costs. The Company manages asset quality through the use of
disciplined underwriting standards and aggressive account management
techniques. The underwriting standards and credit disciplines employed on the
post-1990 corporate finance and real estate finance portfolios have resulted
in strong credit quality for these portfolios. In addition, the Company
continues to significantly reduce its pre-1990 corporate finance and real
estate finance portfolios. The Company has maintained a conservative capital
structure with substantial equity, low leverage and moderate reliance for
funding on the commercial paper market.

PRODUCT CATEGORIES

The Company offers a wide range of financial products and services to its
customers through five product categories.

ASSET BASED FINANCE

Asset based financing is offered by six distinct product groups: Heller
Current Asset Management ("Current Asset Management"), Heller Business Credit
("Business Credit"), Heller Equipment Finance and Leasing ("Equipment Finance
and Leasing"), Heller Vendor Finance ("Vendor Finance"), Heller First Capital
("First Capital") and Heller Sales Finance ("Sales Finance").

Current Asset Management provides working capital financing, receivables
management, and credit protection to companies in a broad range of industries.
Current Asset Management is the fourth largest domestic factor in the United
States and is the Company's oldest business with over 50 years of operations.
The group offers factoring services to over 600 clients and 80,000 customers
primarily in the apparel, textile, houseware, transportation, and home
furnishings industries. In return for a commission, the group purchases the
client's accounts receivables and provides collection, credit protection and
management information services. Working capital is provided by advancing on a
formula basis a percentage of the purchase price of the client's factored
accounts receivables. Current Asset Management also provides advances against
inventory on a formula basis.

3
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Business Credit provides asset based working capital and term financing to
middle market companies for refinancings, recapitalizations, acquisitions,
seasonal borrowing, debtor-in-possession (DIP) and post-DIP transactions
through senior loans secured primarily by accounts receivables and inventory.
The group provides financing to manufacturers, retailers, wholesalers,
distributors, exporters, and service firms. The group also serves as co-lender
or participant in transactions agented by other asset based lenders. Revolving
credit facilities and term loans are generally cross-collateralized. The
Company protects its position against deterioration of a borrower's
performance by using established advance rates against eligible collateral.
Transaction sizes range from $5 million to $75 million, and the group utilizes
syndication capabilities to lower the average retained transaction size to
approximately $20 million in commitments and $10 million in fundings.

Equipment Finance and Leasing is comprised of four direct origination
finance divisions: Heller Commercial Equipment Finance ("Commercial Equipment
Finance"), Heller Aircraft Finance ("Aircraft Finance"), Heller Public Finance
("Public Finance") and Heller Industrial Equipment Finance ("Industrial
Equipment Finance"). Commercial Equipment Finance provides leasing and
financing programs to a diverse group of middle market companies
collateralized by equipment for expansion, replacement or modernization or to
refinance existing equipment obligations. Typically the equipment is essential
to the operations of the borrower, and the amount financed is generally not a
substantial part of the borrower's capital structure. Commercial Equipment
Finance serves various markets including transportation, supermarket,
manufacturing, energy, restaurant and food processing. Transaction sizes
generally range from $500,000 to $15 million with terms ranging from three to
ten years with an average transaction size in 1996 of approximately $4
million. Aircraft Finance offers financing for commercial aircraft and
aircraft engines through operating leases, senior and junior secured loans.
Transaction sizes range from $5 million to $40 million with terms ranging from
five to fifteen years and an average transaction size of approximately $13
million. During 1996, the Company formed Public Finance to provide equipment
and project/facility financing to state and local governments and Industrial
Equipment Finance to provide collateral based equipment financing to smaller
middle market companies in the machine tool, construction, printing and
trucking industries. The targeted average transaction size is approximately $2
million for Public Finance and less than $1 million for Industrial Equipment
Finance.

Vendor Finance provides customized equipment leasing and financing programs
to manufacturers and distributors of a wide variety of commercial, industrial
and technology based products. These services, offered through approximately
75 programs with manufacturers and vendors, are established to finance sales
to end users. Transactions under these programs generally have partial or in
some cases full recourse to the vendor. The group serves the financing needs
of the machining, graphic arts, information technology, energy management,
healthcare, communication, and food processing markets. Transactions sizes
range from $50,000 to approximately $3 million with an average transaction
size of approximately $150,000. The group also provides capital to independent
finance and leasing companies.

First Capital provides long-term financing to independent small businesses
and franchises under the United States Small Business Administration ("SBA")
loan programs. First Capital is one of the largest participants in the SBA's
7(A) loan program under which up to 80% of each loan is guaranteed by the SBA.
The Company also makes loans under the SBA's 504 program. These loans are
senior to an accompanying SBA loan and have an average loan to collateral
value of 50%. First Capital's SBA 7(A) and 504 loans include financing for
real estate acquisition, refinancing or construction financing, equipment or
business acquisition, permanent working capital for expansion efforts, and
debt consolidation. The guaranteed portions of the SBA 7(A) loans are
sometimes sold in the secondary market, with servicing rights retained by
First Capital. Transaction sizes generally range from $50,000 to $2 million
with an average transaction size of approximately $400,000.

Sales Finance provides financing primarily through senior lines and to a
lesser extent subordinated debt to originators of consumer receivables.
Financing is primarily provided for vacation ownership, home equity and
improvement, non-prime auto, security alarm monitoring contracts and municipal
tax liens. Sales Finance is a major capital source in the United States in the
vacation ownership industry. Transaction sizes generally range from $3 million
to $25 million with an average transaction size of approximately $7 million.

4
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CASH FLOW LENDING

Heller Corporate Finance ("Corporate Finance") is a leading provider of
middle market financing based on the cash flows underlying a client's
business. This lending is generally provided through coordination with private
equity sponsors and includes the financing of corporate recapitalizations,
refinancings, expansions, acquisitions and buy-outs of publicly and privately
held entities in a wide variety of industries. Loans are provided on both a
term and revolving basis for periods of up to ten years and are typically
collateralized by senior liens on the borrower's stock or assets or both.
Transactions may also include some unsecured or subordinated financings or
modest non-voting equity investments. The group also serves as co-lender or
participant in transactions agented by other asset based lenders. Transaction
sizes range from $5 million to $50 million, and the group utilizes syndication
capabilities to lower the average retained transaction size to approximately
$16 million in commitments and $9 million in fundings for 1996. Corporate
Finance also invests in equity funds generally originated by equity sponsors.

REAL ESTATE FINANCE

Heller Real Estate Financial Services ("Real Estate Finance") specializes in
providing financing products to real estate owners, investors and developers
primarily for the acquisition, refinancing and renovation of commercial
income-producing properties in a wide range of property types and geographic
areas. The group is one of the nation's largest providers of loans secured by
manufactured housing communities and self storage facility property types to
be sold in the capital markets through a commercial mortgage securitization.
The group also offers financing for discounted loan portfolio acquisitions,
single family housing developments, credit sale-leasebacks and to be built
properties with credit tenants. The group also holds investments in
acquisition, development and construction transactions as well as certain
available for sale debt securities. Loans generally have terms ranging from
one to five years and are principally collateralized by first mortgages.
Transaction sizes generally range from $1 million to $15 million with an
average transaction size of approximately $3 million.

INTERNATIONAL ASSET BASED FINANCE AND FACTORING

Heller International Group ("International Group") offers financial products
through commercial finance subsidiaries and joint ventures in 18 countries in
Europe, Asia/Pacific and Latin America. The joint ventures and subsidiaries
primarily provide factoring, asset based financing and receivables management
services, and also make loans for acquisition financing, leasing, vendor
finance and/or trade finance programs, primarily to small and mid-sized
businesses outside the United States. The International Group also makes
modest investments in international equity funds.

SPECIALIZED FINANCE

Heller Project Finance ("Project Finance"), formerly known as Project
Investment and Advisory Division, consists of transactions in project finance
offering financing to independent power producers and industrial projects in
the oil and gas, coal, mining, paper and environmental industries. Financing
is provided in the form of senior and junior secured loans and equity
investments. Transaction sizes generally range from $5 million to $25 million
with terms of seven to fifteen years.

SYNDICATION, SECURITIZATION AND LOAN SALE ACTIVITIES

A key element of the Company maintaining strong asset quality is its focus
on managing exposure to individual credits and industry concentrations. A
major part of the effort is syndicating loans or selling participations to
control the concentration of credit risk. The Company has established
syndication programs in most of its businesses with receivable syndications
and participations totaling $453 million during 1996. In addition, Real Estate
Finance originates loans to manufactured housing communities, self storage
facilities and multi-tenant industrial property types which may be sold as
whole loans or in the capital markets through a commercial mortgage
securitization. Other business groups also originate receivables which may be
sold as

5
<PAGE>

whole loans or through a securitization to take advantage of market pricing
and to reduce concentrations of credit risk. During 1996, the Company had loan
sales totaling $304 million.

OWNERSHIP

All of the outstanding Common Stock of the Company is owned by Heller
International Corporation (the "Parent"), a wholly-owned subsidiary of The
Fuji Bank, Limited ("Fuji Bank"), headquartered in Tokyo, Japan. Fuji Bank
also directly owns 21% of the outstanding shares of Heller International
Group, Inc., a consolidated subsidiary of the Company engaged in international
asset based financing and factoring activities. Fuji Bank is one of the
largest banks in the world, with total deposits of approximately $340 billion
at September 30, 1996. For a discussion of the "Keep Well Agreement" between
Fuji Bank and the Company, see "Certain Relationships and Related
Transactions--Keep Well Agreement with Fuji Bank."

SUMMARY OF TOTAL REVENUES, LENDING ASSETS AND INVESTMENTS

A summary of total revenues, lending assets and investments by product
category is included in the "Portfolio Composition" section of "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
page 11. For information about international operations, see Note 15 to the
Consolidated Financial Statements.

RATES CHARGED; COMPETITION; REGULATION

Rates charged by the Company vary depending on the risk and maturity of the
loan, competition, current cost of borrowing to the Company, state usury laws
and other governmental regulations. The Company's portfolio of receivables
primarily earns interest at variable rates. These variable rates float in
accordance with various agreed upon reference rates, including the London
Inter-Bank Offered Rate, the Prime rate, the Treasury Bill rate or corporate
based lending rates. Competition varies by business group. In general, the
Company is subject to competition from a variety of financial institutions,
including commercial finance companies, banks and leasing companies.

As a subsidiary of Fuji Bank, the Company is subject to the limitations
imposed by the Bank Holding Company Act of 1956, as amended, and related
regulations adopted by the Board of Governors of the Federal Reserve System.
Those regulations restrict the Company to activities that have been defined as
being so closely related to banking as to be incidental thereto and also
restrict certain lending activities. Certain of the Company's equity
investments and small business lending activities are subject to the
supervision and regulation of the Small Business Administration. To date, such
regulations have not had a material adverse effect on the Company.

ITEM 2. PROPERTIES

The Company leases executive offices located at 500 West Monroe Street,
Chicago, Illinois 60661 and maintains various offices throughout the United
States, Europe, Asia, Australia and Latin America, all of which are leased
premises. For information concerning the Company's lease obligations, see Note
7 to the Consolidated Financial Statements.

ITEM 3. LEGAL PROCEEDINGS

The Company is party to a number of legal proceedings as plaintiff and
defendant, all arising in the ordinary course of its business. The Company
believes that the amounts, if any, which may ultimately be funded or paid with
respect to these matters, will not have a material adverse effect on the
financial condition or results of operations of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were acted upon in the fourth quarter of 1996.

6
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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The outstanding Common Stock of the Company is owned entirely by the Parent,
which is wholly-owned by Fuji Bank. There is no public trading market for the
Company's Common Stock. The Company is prohibited from paying cash dividends
on Common Stock unless full cumulative dividends on all outstanding shares of
Perpetual Preferred, Convertible Preferred and NW Preferred Stock have been
paid. All Preferred Stock dividends have been paid, and in 1996 the Company
declared and paid $56 million in cash dividends on Common Stock to its Parent.

7
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ITEM 6. SELECTED FINANCIAL DATA

The following table presents information from the Company's Consolidated
Financial Statements for the five years ended December 31, 1996, which have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report included herein. This information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and the "Financial Statements and Supplementary
Data."

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Interest income........................ $ 807 $ 851 $ 702 $ 620 $ 634
Interest expense....................... 452 464 336 264 295
------ ------ ------ ------ ------
Net interest income................... 355 387 366 356 339
Fees and other income.................. 134 198 170 138 101
Income of international joint ventures. 44 35 21 23 26
------ ------ ------ ------ ------
Operating revenues.................... 533 620 557 517 466
Operating expenses..................... 247 216 195 174 169
Provision for losses................... 103 223 188 210 252
------ ------ ------ ------ ------
Income before income taxes, minority
interest and change in accounting
principle............................ 183 181 174 133 45
Income tax provision/(benefit)......... 43 49 51 11 (5)
Minority interest in income of Heller
International Group, Inc.............. 7 7 5 5 3
------ ------ ------ ------ ------
Income before change in accounting
principle............................ 133 125 118 117 47
Cumulative effect of a change in
accounting principle for income taxes. -- -- -- -- 41
------ ------ ------ ------ ------
Net income............................ $ 133 $ 125 $ 118 $ 117 $ 88
====== ====== ====== ====== ======
Common dividends paid.................. $ 56 $ 52 $ 20 $ -- $ --
====== ====== ====== ====== ======
Ratio of earnings to combined fixed
charges and preferred stock dividends
(See exhibit 12)...................... 1.35x 1.34x 1.44x 1.43x 1.14x
====== ====== ====== ====== ======
<CAPTION>
DECEMBER 31,
--------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Receivables............................ $8,529 $8,085 $7,616 $7,062 $7,465
Allowance for losses of receivables.... 225 229 231 221 224
Investments............................ 805 693 634 370 280
Investments in international joint
ventures.............................. 272 233 174 144 140
Total assets........................... $9,926 $9,638 $8,476 $7,913 $7,952
====== ====== ====== ====== ======
Senior debt:
Commercial paper and short-term
borrowings........................... $2,745 $2,223 $2,451 $1,981 $2,422
Notes and debentures.................. 4,761 5,145 3,930 3,893 3,521
Junior subordinated debt............... -- -- -- 75 225
------ ------ ------ ------ ------
Total debt............................ $7,506 $7,368 $6,381 $5,949 $6,168
====== ====== ====== ====== ======
Total liabilities...................... $8,402 $8,208 $7,107 $6,625 $6,777
Preferred stock........................ $ 150 $ 150 $ 150 $ 150 $ 150
Common equity.......................... 1,317 1,234 1,180 1,103 994
------ ------ ------ ------ ------
Total stockholders' equity............ $1,467 $1,384 $1,330 $1,253 $1,144
====== ====== ====== ====== ======
Ratio of commercial paper and short-
term borrowings to total debt......... 37% 30% 38% 33% 39%
====== ====== ====== ====== ======
Ratio of debt (net of short-term
investments) to total stockholders'
equity................................ 5.0x 5.0x 4.7x 4.7x 5.4x
====== ====== ====== ====== ======
</TABLE>

8
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

During 1996, the Company continued to make significant progress in
strengthening earnings, diversifying assets, strengthening asset quality and
maintaining a conservative capital structure. Due to significantly lower
credit costs in 1996, the Company achieved a fifth consecutive year of
increased net income. The lower risk asset based businesses grew to become the
largest product category and source of revenue. The asset based businesses
provide the Company with a more balanced portfolio, more consistent revenue
streams and reduced volatility of credit quality costs. Asset quality is
demonstrated by the strong credit performance of the post-1990 portfolio and
the significant reduction in the pre-1990 portfolio. The Company's capital
structure remained conservative as evidenced by a debt to equity ratio (net of
short-term investments) of 5 to 1. Commercial paper and short-term borrowing
as a percentage of total debt remained conservative at 37%.

RESULTS OF OPERATIONS

The following table summarizes the Company's operating results for the years
ended December 31, 1996, 1995 and 1994.

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED DECEMBER ENDED DECEMBER
31, 31,
----------------- -----------------
PERCENT PERCENT
1996 1995 CHANGE 1995 1994 CHANGE
---- ---- ------- ---- ---- -------
(DOLLARS (DOLLARS
IN IN
MILLIONS) MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Interest income............................ $807 $851 (5)% $851 $702 21%
Interest expense........................... 452 464 (3) 464 336 38
---- ---- ---- ----
Net interest income...................... 355 387 (8) 387 366 6
Fees and other income...................... 134 198 (32) 198 170 16
Income of international joint ventures..... 44 35 26 35 21 67
---- ---- ---- ----
Operating revenues....................... 533 620 (14) 620 557 11
Operating expenses......................... 247 216 14 216 195 11
Provision for losses....................... 103 223 (54) 223 188 19
---- ---- ---- ----
Income before income taxes and minority
interest................................ 183 181 1 181 174 4
Income tax provision....................... 43 49 (12) 49 51 (4)
Minority interest in income of Heller
International Group, Inc.................. 7 7 -- 7 5 40
---- ---- ---- ----
Net income............................. $133 $125 6% $125 $118 6%
==== ==== ==== ====
</TABLE>

1996 vs. 1995

The Company achieved record net income for the fourth consecutive year,
reporting a 6% increase in 1996 due to a significantly lower provision for
losses which offset a reduction in operating revenues and an increase in
spending for developing businesses. The decline in the provision for losses is
a result of the continued strong credit quality of the newer asset based
products and the post-1990 corporate finance and real estate finance
portfolios, a significant decrease in gross writedowns on the pre-1990
portfolio and the recognition of several large recoveries on the pre-1990
portfolio. The reduction in operating revenues reflects the shift in the
portfolio to lower risk, lower priced products coupled with lower net gains
from the sale of investments and a decline in the level of fee accelerations.

Net interest income decreased by 8% reflecting the continued shift of the
portfolio to lower risk, lower return products, competitive pricing pressures,
lower levels of fee accelerations and lower average market interest rates.
Interest income yields decreased during 1996 to 10.8% from 11.7% in 1995.
Interest expense decreased during 1996 due to the decline in the average
borrowing rate to 6.5% from 6.9% in 1995.

9
<PAGE>

Fees and other income is comprised of factoring commissions, fees,
participating and other income and net investment gains. Factoring commissions
totaled $55 million, increasing 10% during 1996 due to an increase in
factoring volume. Fees, participating and other income totaled $76 million and
$74 million for 1996 and 1995, respectively. Net investment gains were $3
million for 1996 as compared to $74 million in 1995. Gross investment gains
were $106 million and $133 million, while losses and writedowns were $103
million and $59 million in 1996 and 1995, respectively. Losses and writedowns
on equity investments were higher in 1996 due to writedowns during the year
totaling $53 million on one pre-1990 corporate finance investment. Due to the
timing and recognition of investment activity, the Company expects net
investment gains to vary from year to year.

Income of international joint ventures increased by 26% during 1996
primarily due to earnings growth from European joint ventures in the
Netherlands and France.

Operating expenses grew 14% due to continued investments in developing
businesses. Management expects the rate of expense growth to decline as the
asset based businesses continue to develop.

The provision for losses decreased dramatically as a result of the continued
excellent credit quality of the post-1990 portfolio combined with lower
writedowns and increased recoveries, primarily from the pre-1990 portfolio.
Gross writedowns were $163 million and $259 million, while recoveries totaled
$55 million and $28 million for 1996 and 1995, respectively. Net writedowns on
the post-1990 portfolio totaled only $41 million or 50 basis points of total
average lending assets in 1996 versus $45 million or 56 basis points of total
average lending assets in 1995.

The effective income tax rate was 23% for 1996 and 27% for 1995, below the
statutory rate due to the effect of earnings from international joint
ventures, the use of foreign tax credits and favorable tax issue resolution.

1995 vs. 1994

Net income for 1995 increased by $7 million or 6% due to increased net
interest income, higher revenues from fees and other income and increased
income of international joint ventures. These increases were partially offset
by continued spending for developing businesses and a higher provision for
losses related to resolution of pre-1990 accounts.

Net interest income increased 6% from the prior year period due to growth in
earning funds and a moderate increase in net interest margin which exceeded
the costs of carrying higher average levels of equity investments. Average
earning funds grew by 8% during 1995. Rates charged on 81% of average earning
funds for 1995 were based on floating indices such as the average three month
London Inter-Bank Offered Rate, which increased to 6.0% in 1995 from 4.7% in
1994 and contributed to the increase in interest income for the year. Interest
expense increased during 1995 partly due to the rise in the average borrowing
rate to 6.9% from 5.5% in 1994 and the higher level of debt used to finance
portfolio growth.

Fees and other income increased $28 million or 16% for 1995 due to increased
net gains from sales of investments and increased revenues from real estate
transactions. Net gains on sales of investments increased 51% during 1995
primarily due to the sale of several equity investments at substantial gains.
Realized gains from sales of investments during 1995 were $133 million, which
were partially offset by writedowns and realized losses of $59 million. Due to
the timing and recognition of investment activity, the Company expects net
investment gains to vary from year to year.

Income of international joint ventures increased by $14 million during 1995
primarily due to growth in earnings from European joint ventures in the
Netherlands and France, and benefits from changes in foreign exchange rates
relative to the U.S. dollar.

10
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Operating expenses were higher principally due to increased spending to
support growth of the asset based businesses.

The provision for losses increased by $35 million or 19% over prior year
levels as the Company continued to aggressively resolve pre-1990 real estate
and corporate finance problem accounts through paydown, sale, restructure or
writedown of these accounts. Net writedowns of receivables and repossessed
assets increased by $52 million compared to the prior year periods due to this
aggressive account management. The Company's newer business portfolios
continued to exhibit strong credit quality resulting in a very low level of
writeoffs for this portfolio during 1995.

The Company's effective tax rate decreased to 27% and was below statutory
rates primarily due to the favorable resolution of certain state tax issues in
1995.

PORTFOLIO COMPOSITION

Lending assets and investments increased $581 million or 6% during 1996 as
the Company continued to effectively grow the lower risk asset based
businesses and reduce the pre-1990 corporate finance and real estate finance
portfolios. During 1996, the asset based portfolio became the largest product
category and now totals 44% of lending assets and investments. Consistent with
this asset growth, asset based finance also became the Company's largest
source of revenues at 41%. Due to the secured nature of asset based lending,
this portfolio provides more consistent revenue streams and reduces the level
and volatility of credit quality costs. The following tables present lending
assets and investments by product category and asset type.

<TABLE>
<CAPTION>
LENDING ASSETS AND INVESTMENTS AS OF
DECEMBER 31,
--------------------------------------------
1996 1995 1994
-------------- -------------- --------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
BY PRODUCT CATEGORY:
Asset based finance............... $4,270 44% $3,157 35% $2,305 27%
Corporate finance................. 2,447 26 3,092 34 3,309 39
Real estate finance............... 2,062 21 1,966 22 2,152 25
International asset based finance
and factoring.................... 609 6 506 6 374 5
Specialized finance............... 232 3 318 3 303 4
------ --- ------ --- ------ ---
Total lending assets and
investments.................... $9,620 100% $9,039 100% $8,443 100%
====== === ====== === ====== ===

Lending assets include receivables and repossessed assets.

BY ASSET TYPE:
Receivables....................... $8,529 89% $8,085 89% $7,616 90%
Repossessed assets................ 14 -- 28 1 19 1
------ --- ------ --- ------ ---
Total lending assets............ 8,543 89 8,113 90 7,635 91
Investments....................... 805 8 693 8 634 7
International joint ventures...... 272 3 233 2 174 2
------ --- ------ --- ------ ---
Total investments............... 1,077 11 926 10 808 9
------ --- ------ --- ------ ---
Total lending assets and
investments.................... $9,620 100% $9,039 100% $8,443 100%
====== === ====== === ====== ===
</TABLE>

Lending Assets and Investments. The Company continues to develop a more
balanced, lower risk asset based portfolio while maintaining strong market
positions in corporate finance and real estate finance. The asset
diversification goal has been accomplished with asset growth of over $1
billion in the asset based businesses in 1996 with all six asset based
business groups contributing to this growth. Corporate finance assets and
investments decreased by $645 million as fundings of approximately $900
million were offset primarily by portfolio runoff in pre-1990 and post-1990
accounts and syndications in the post-1990 portfolio.

11
<PAGE>

Investments increased primarily due to increased acquisition, development
and construction transactions, operating leases on commercial aircraft and
investments in debt securities. The Company's investment in international
joint ventures increased due to the impact of undistributed income and an
investment made in a factoring company in Chile.

Concentrations of lending assets of 5% or more at December 31, 1996 and
1995, based on the standard industrial classifications of the borrowers, are
as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1996 1995
-------------- --------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Department and general merchandise retail
stores...................................... $987 12% $774 10%
Food, grocery and miscellaneous retail....... 669 8 568 7
General industrial machines.................. 500 6 392 5
Business services............................ 435 5 387 5
Textiles and apparel manufacturing........... 403 5 529 7
</TABLE>

The department and general merchandise retail stores and the textiles and
apparel manufacturing categories are primarily comprised of factored accounts
receivable which represent short-term trade receivables from numerous
customers. The majority of lending assets in the food, grocery and
miscellaneous retail category are revolving and term facilities with borrowers
primarily in the business of manufacturing and retailing of food products. The
general industrial machines classification is distributed among machinery used
for many different industrial applications. Business Services is primarily
comprised of computer and data processing services, credit reporting and
collection, and miscellaneous business services.

Total Revenues. Total revenues include interest income, net fees and other
income from domestic and consolidated international operations, and the
Company's share of the net income of its international joint ventures.

<TABLE>
<CAPTION>
TOTAL REVENUES FOR THE YEAR ENDED DECEMBER
31,
--------------------------------------------
1996 1995 1994
-------------- -------------- --------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Asset based finance............ $400 41% $ 308 28% $224 25%
Corporate finance.............. 240 24 388 36 367 41
Real estate finance............ 239 24 253 23 218 25
International asset based
finance and factoring......... 82 8 64 6 46 5
Specialized finance............ 24 3 71 7 38 4
---- --- ------ --- ---- ---
Total revenues............... $985 100% $1,084 100% $893 100%
==== === ====== === ==== ===
</TABLE>

The decline in total revenues of $99 million or 9% in 1996 is primarily
attributable to a shift in the portfolio mix to lower risk, lower yielding
products, the impact of competitive pricing pressures and lower net gains from
the sale of investments. Asset based finance revenue growth is attributable to
the growth in lending assets and investments. Corporate finance revenues have
declined as a result of a reduction in lending assets and the run-off of
older, higher yielding transactions. Real estate finance revenues have also
declined due to a shift in the asset mix. International asset based finance
and factoring revenues grew due to an increase in income from European joint
ventures and the impact of consolidating the Mexico subsidiary. Specialized
finance revenues declined due to lower net equity gains.

12
<PAGE>

PRODUCT CATEGORIES

Asset based finance. The asset based lending portfolio is comprised of
factored accounts receivable, secured working capital finance, equipment loans
and leases to end users, vendor finance program loans and leases, small
business finance activities, and indirect consumer finance. Asset based
emerged as the largest product category in 1996 as the portfolio increased by
35% over the prior year. For the year fundings of over $2.5 billion were
offset by repayments and syndications totaling approximately $1.4 billion. The
asset based portfolio is described below.

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1995 1994
------ ------ ------
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Current Asset Management............................. $ 928 $ 802 $ 762
Business Credit...................................... 867 601 300
Equipment Finance and Leasing........................ 820 568 379
Vendor Finance....................................... 775 663 561
First Capital........................................ 403 208 98
Sales Finance........................................ 268 183 38
------ ------ ------
Total lending assets............................... $4,061 $3,025 $2,138
Investments.......................................... 209 132 167
------ ------ ------
Total lending assets and investments............... $4,270 $3,157 $2,305
====== ====== ======
Nonearning assets.................................... $ 23 $ 26 $ 22
====== ====== ======
Ratio of nonearning assets to total lending assets... 0.6% 0.9% 1.0%
====== ====== ======
</TABLE>

Current Asset Management provides factoring services and purchases short-
term trade receivables primarily due from department and general merchandise
retailers. These accounts are highly liquid with an average turnover of
approximately 50 days, and are continuously managed by evaluating the
consolidated exposure from all clients to a particular customer. Current Asset
Management is the fourth largest U.S. factor in the highly competitive United
States factoring industry with volume in excess of $7 billion in 1996. This
represents a 14% increase over the prior year, which substantially exceeded
the industry's growth rate due to the effective implementation of marketing
initiatives.

Business Credit offers senior secured revolving and term facilities based on
accounts receivable, inventory, and to a lesser extent, machinery and
equipment. Business Credit provides financing both as agent and on a
participation basis with other traditional asset-based lenders in senior
secured transactions. The Company protects its position against deterioration
of a borrower's performance by using established advance rates against
eligible collateral. The group provides financing to manufacturers, retailers,
wholesalers, distributors, exporters, and service firms. Transaction sizes
range from $5 million to $75 million, and the group utilizes syndication
capabilities to lower the average retained transaction size to approximately
$20 million in commitments and $10 million in fundings. Terms of transactions
usually range from one to seven years. The portfolio is diversified over 17
industries with food and grocery representing 19%, retail representing 13% and
no other industry representing more than 10% of lending assets. New business
volume increased 38% during 1996 to over $600 million.

Equipment Finance and Leasing is comprised of four distinct divisions:
Commercial Equipment Finance, Aircraft Finance, Public Finance, and Industrial
Equipment Finance. Commercial Equipment Finance offers general equipment
financing directly to customers in multiple industries collateralized by
equipment for expansion, replacement and modernization, or to refinance
existing equipment obligations. The portfolio is comprised of 20 industry
classifications with food and grocery representing 15%, computer-related and
transportation each representing 14%, and energy representing 10% of lending
assets with no other concentrations greater than 10%. Financings generally
range from $500,000 to $15 million with terms ranging from three to ten years.
Average transaction size is approximately $4 million as of December 31, 1996.
New

13
<PAGE>

business volume in 1996 was approximately $500 million representing a 37%
increase over 1995. Aircraft Finance offers financing for commercial aircraft
and equipment through operating leases, senior and junior secured loans.
Transaction sizes range from $5 million to $40 million with terms of five to
fifteen years. New business volume in 1996 was above $30 million.
Substantially all of these assets were under lease at December 31, 1996.
During 1996, the Company formed Public Finance to provide equipment and
project/facility financing to state and local governments, and Industrial
Equipment Finance to provide collateral based equipment financing to smaller
middle market companies in the machine tool, construction, printing and
trucking industries. The targeted average transaction size is approximately $2
million for Public Finance and less than $1 million for Industrial Equipment
Finance.

Vendor Finance provides customized equipment finance and lease programs to
manufacturers and distributors of a wide variety of commercial, industrial and
technology-based products. These services are offered through programs with
manufacturers and vendors established to finance their sales to end users.
Loans to purchasers of equipment are generally made with partial or in some
cases full recourse to the vendor. The portfolio is comprised of 32 industry
classifications with the graphic arts industry representing 24% of lending
assets. Graphic arts is comprised of nearly 400 transactions, the majority of
which have partial recourse to the vendor. The business services industry
represents 10% of lending assets with no other individual concentrations
greater than 10%. For the entire portfolio, individual transactions generally
range from $50,000 to approximately $3 million with an average transaction
size of approximately $150,000. Vendor Finance is also a provider of financing
to independent finance and leasing companies. New business volume increased
30% in 1996 to over $400 million.

First Capital is one of the largest lenders of Small Business Administration
loans providing long-term financing to independent small businesses and
franchises under Section 7(A) of the United States Small Business
Administration ("SBA") loan guarantee programs. Loans offered include real
estate, equipment and business acquisition, refinancing or construction
financing, permanent working capital for expansion efforts, and debt
consolidation. These loans are guaranteed up to 80% by the SBA. The guaranteed
portions of these loans are sometimes sold in the secondary market, with
servicing rights retained by the group. First Capital also makes loans under
the SBA 504 program. These loans are senior to an SBA accompanying loan and
have an average loan to collateral value of 50%. The loans in the SBA 7(A) and
504 programs are generally for amounts up to $2 million and have an average
transaction size of $400,000. New business volume increased significantly
during 1996 to nearly $400 million. The liquidity in this portfolio was
demonstrated by the sale of $122 million of loans in 1996.

Sales Finance provides primarily senior and to a lesser extent subordinate
consumer financing on an indirect basis or through strategic alliances with
originator and servicer companies. Financing is provided primarily for
vacation ownership, home equity and improvement, non-prime auto, security
alarm monitoring contracts and municipal tax liens. Transaction sizes
generally range from $3 million to $25 million with an average transaction
size of approximately $7 million in 1996. Terms generally range from three to
seven years. The group is one of the largest providers of capital to the
vacation ownership industry. In addition, the group has a warehouse facility
totaling $123 million at December 31, 1996 secured by home improvement loans
and first and second priority mortgages made to approximately 6,000 customers.
The group experienced a 7% increase in new business volume in 1996 to
approximately $300 million.

The significant growth in asset based lending was accomplished while the
Company continued to maintain a very low level of nonearning assets totaling
only $23 million or 0.6% of asset based lending assets. Disciplined
underwriting standards, strong collateral coverage and active portfolio
management have contributed to the low level of nonearning assets as of
December 31, 1996.

14
<PAGE>

The asset based revenues by product group are presented below:

<TABLE>
<CAPTION>
FOR THE YEAR
ENDED
DECEMBER 31,
----------------
1996 1995 1994
---- ---- ----
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Current Asset Management................................... $113 $104 $102
Business Credit............................................ 86 60 25
Equipment Finance and Leasing.............................. 73 54 32
Vendor Finance............................................. 62 61 48
First Capital.............................................. 47 18 15
Sales Finance.............................................. 19 11 2
---- ---- ----
Total revenues........................................... $400 $308 $224
==== ==== ====
Net writedowns of lending assets........................... $ 8 $ 15 $ 21
==== ==== ====
Ratio of net writedowns to average lending assets.......... 0.2% 0.4% 1.1%
==== ==== ====
</TABLE>

The asset based businesses emerged as the largest revenue producing group in
1996 with revenues increasing across all asset based businesses. Revenues
increased by $92 million or 30%. The most significant increases in revenues
came from First Capital with $29 million, Business Credit with $26 million,
and Equipment Finance and Leasing with $19 million. These increases were the
result of a related increase in lending assets and investments and gains
realized from First Capital's sales of receivables. Asset based products
continued to demonstrate very favorable credit experience as evidenced by the
low levels of writedowns during the year which totaled only 0.2% of average
asset based lending assets. Equipment Finance and Leasing, Vendor Finance and
Sales Finance did not experience any net writedowns during the year.

At December 31, 1996, the asset based groups were contractually committed to
finance an additional $970 million to new and existing borrowers, generally
contingent upon the maintenance of specific credit standards. Since many of
the commitments are expected to remain unused, the total commitment amounts do
not necessarily represent future cash requirements. No significant commitments
exist to provide additional financing related to nonearning assets.

Corporate finance. Corporate finance provides financing for corporate
recapitalizations, refinancings, expansions, acquisitions and buy-outs of
publicly and privately held companies. Loans are provided on both a term and
revolving basis for periods of up to ten years and are typically
collateralized by senior liens on the borrower's stock or assets or both.
Transactions may also include some unsecured or subordinated financings or
modest non-voting equity investments. Strong underwriting standards and credit
disciplines continue to be employed resulting in significantly improved asset
quality but lower yielding transactions in the post-1990 portfolio. Corporate
Finance has funded transactions with smaller retained balances and has
utilized syndication capabilities to reduce exposure to individual credits.
Average retained transaction sizes were approximately $9 million for 1996.

The portfolio is diversified among 25 industries with concentrations of 14%
in food and grocery, and 11% in both chemicals/plastics and general industrial
machinery with no other industry representing more than 10% of lending assets.
Investments are comprised of common and preferred stocks and warrants received
in connection with certain financings along with investments in funds
established through equity sponsors. Lending assets and investments decreased
by $645 million as fundings of approximately $900 million were offset by
portfolio run off, syndications and writedowns totaling approximately $1.6
billion. The pre-1990 portfolio decreased by over $350 million, representing
more than half of the decline in the corporate finance portfolio.

15
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1995 1994
------ ------ ------
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Lending assets...................................... $2,260 $2,930 $3,116
Investments......................................... 187 162 193
------ ------ ------
Total lending assets and investments.............. $2,447 $3,092 $3,309
====== ====== ======
Post-1990 nonearning assets......................... $ 39 $ 19 $ --
------ ------ ------
Total nonearning assets............................. $ 114 $ 89 $ 124
====== ====== ======
Ratio of post-1990 nonearning assets to post-1990
lending assets..................................... 2.1% 0.8% -- %
====== ====== ======
Ratio of total nonearning assets to total lending
assets............................................. 5.0% 3.0% 4.0%
====== ====== ======
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
----------------------
1996 1995 1994
------ ------ ------
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Interest income..................................... $ 271 $ 363 $ 330
Fees and other income............................... (31) 25 37
------ ------ ------
Total revenues.................................... $ 240 $ 388 $ 367
====== ====== ======
Post-1990 net writedowns of lending assets.......... $ 21 $ 18 $ --
====== ====== ======
Total net writedowns of lending assets.............. $ 51 $ 113 $ 77
====== ====== ======
Ratio of post-1990 net writedowns to post-1990
average lending assets............................. 1.0% 0.8% -- %
====== ====== ======
Ratio of total net writedowns to total average
lending assets..................................... 2.0% 3.7% 2.3%
====== ====== ======
</TABLE>

Interest income decreased due to the lower level of lending assets and
investments, a decline in market interest rates, and competitive pricing
pressures. Fees and other income decreased significantly during 1996 primarily
due to writedowns throughout the year totaling $53 million on one troubled
pre-1990 investment.

Net writedowns of corporate finance lending assets decreased by $62 million
primarily due to strong credit quality of the post-1990 lending assets and
significant recoveries recognized on the pre-1990 portfolio. The post-1990
portfolio, with net writedowns of $21 million in 1996 versus $18 million in
1995, continued to demonstrate strong credit quality. Gross writedowns and
recoveries for corporate finance were $95 million and $44 million compared to
$133 million and $20 million in 1996 and 1995, respectively. Pre-1990 gross
writedowns and recoveries were $74 million and $44 million for 1996 compared
to $115 million and $20 million in 1995.

At December 31, 1996, corporate finance was contractually committed to
finance an additional $887 million to new and existing borrowers, generally
contingent upon the maintenance of specific credit standards. Since many of
the commitments are expected to remain unused, the total commitment amounts do
not necessarily represent future cash requirements. No significant commitments
exist to provide additional financing related to nonearning assets.

Real estate finance. Real estate finance provides financing to owners,
investors and developers for acquisition, refinancing and renovation of
commercial income producing properties in a wide range of property types and
geographic areas. The Company's real estate finance lending and investment
philosophy since 1990 emphasizes financing small individual transactions while
maintaining geographic and property type diversification in the portfolio. The
effectiveness of this strategy is evidenced by extremely low levels of
writedowns and nonearning assets on transactions originated in the last six
years.

16
<PAGE>

The real estate finance portfolio is diversified across a wide range of
property types and geographic areas. At December 31, 1996 and 1995, real
estate finance lending assets and investments were distributed as follows:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
California.............. 26% 20%
Midwest................. 13 17
Mid-Atlantic States..... 12 10
Southwest............... 12 11
New York................ 11 12
Florida................. 11 13
New England............. 4 9
Other................... 11 8
---- ---
100% 100%
==== ===
</TABLE>
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Manufactured housing.... 16% 13%
General purpose office
building............... 16 18
Hotel................... 12 14
Industrial.............. 11 10
Apartments.............. 11 9
Retail.................. 9 13
Self Storage............ 9 4
Loan Portfolios......... 7 11
Other................... 9 8
---- ---
100% 100%
==== ===
</TABLE>

As is demonstrated by the above table, the real estate finance portfolio is
well diversified. Real estate finance actively manages the concentrations in
the portfolio by property type and geographic area. The group originates loans
to manufactured housing communities, self storage facilities, multi-tenant
industrial and other property types that may be sold as whole loans or in the
capital markets through commercial mortgage securitizations. Real estate
finance had whole loan sales of $182 million in 1996 and securitized $220
million of assets in 1995, of which $44 million was retained.

Real estate finance lending assets and investments increased 5% in 1996
reflecting fundings of approximately $975 million offset by portfolio
reduction and asset sales of nearly $900 million, of which over $180 million
relates to the pre-1990 portfolio. The majority of the 1996 fundings in real
estate finance lending assets is attributable to the financing of self storage
facilities, manufactured housing, apartments/condominiums, industrial property
and hotels. These loans generally range from $1 million to $15 million, have
terms ranging from one to five years and are principally collateralized by
first mortgages. The average retained size of real estate financings decreased
to less than $4 million at December 31, 1996, reflecting the impact of
investment activity where transactions are of a smaller individual size and
smaller hold positions in lending transactions.

The level of nonearning assets decreased as a result of the group's
continued efforts to resolve its pre-1990 problem accounts combined with
strong credit performance in the post-1990 real estate portfolio. The
Company's ongoing real estate lending and investment philosophy includes
financing smaller individual transactions and increasing the diversification
of the portfolio in terms of geographic location and property type. The
effectiveness of this strategy is evidenced by extremely low levels of
nonearning assets in post-1990 transactions.

17
<PAGE>

<TABLE>
<CAPTION>
FOR THE YEAR
ENDED DECEMBER
31,
----------------
1996 1995 1994
---- ---- ----
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Interest income........................................... $172 $202 $185
Fees and other income..................................... 67 51 33
---- ---- ----
Total revenues.......................................... $239 $253 $218
==== ==== ====
Post-1990 net writedowns of lending assets................ $-- $-- $ 3
==== ==== ====
Total net writedowns of lending assets.................... $ 37 $ 89 $ 79
==== ==== ====
Ratio of post-1990 net writedowns to post-1990 average
lending assets........................................... -- % -- % 0.3%
==== ==== ====
Ratio of total net writedowns to total average lending
assets................................................... 2.2% 4.8% 4.0%
==== ==== ====
</TABLE>

Interest income declined primarily as a result of a lower interest rate
environment coupled with a shift in the mix of the portfolio to lower yielding
products. Fees and other income increased primarily due to income from
participating interests in acquisition, development and construction
transactions.

Total net writedowns have decreased considerably reflecting the continued
excellent credit performance of the post-1990 portfolio combined with a
decrease in writedowns on the pre-1990 portfolio. All of the writedowns for
1996 were on the pre-1990 portfolio.

At December 31, 1996, real estate finance was contractually committed to
finance an additional $79 million to new and existing borrowers, generally
contingent upon the maintenance of specific credit standards. Since many of
the commitments are expected to remain unused, the total commitment amounts do
not necessarily represent future cash requirements. No significant commitments
exist to provide additional financing related to nonearning assets.

International asset based finance and factoring. The financial information
presented below for the international group includes majority and wholly-owned
subsidiaries and joint ventures in commercial finance companies in 18
countries. The assets of consolidated subsidiaries are located in Singapore,
Australia and Mexico, while joint ventures consist of investments in 50% or
less owned companies in 15 countries in Europe, Latin America and
Asia/Pacific. Several of these companies hold leading positions in their
served markets. The Company also has modest investments comprised of trading
securities in Brazil.

Consistent with the presentation in the Consolidated Financial Statements,
the investments in and income of international joint ventures set forth below
represents the Company's ownership share of the net assets and income of the
international joint ventures. The following table presents lending assets and
investments by region:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1996 1995 1994
---- ---- ----
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Lending assets and investments of consolidated subsidiaries
Asia/Pacific.............................................. $257 $212 $176
Latin America............................................. 80 61 24
---- ---- ----
337 273 200
Investments in international joint ventures
Europe.................................................... 238 216 165
Latin America............................................. 20 5 2
Asia/Pacific.............................................. 14 12 7
---- ---- ----
272 233 174
---- ---- ----
Total lending assets and investments.................... $609 $506 $374
==== ==== ====
Nonearning assets of consolidated subsidiaries............ $ 25 $ 9 $ 1
==== ==== ====
</TABLE>

18
<PAGE>

The increase in lending assets and investments of consolidated subsidiaries
is a result of asset growth in all three subsidiaries. Investments in
international joint ventures have increased as a result of an investment made
in a factoring company in Chile and the effect of undistributed income in the
European region. Nonearning assets are primarily related to receivables of the
consolidated Mexican subsidiary.

On a combined basis, the international joint ventures, which are
substantially independently financed, had total receivables of $5.2 billion at
December 31, 1996, factoring volume and net income of $29.5 billion and $90
million, respectively, for the year ended December 31, 1996. The Company owns
interests from 40% to 50% of these joint ventures. The comparable amounts for
1995 for receivables, factoring volume and net income were $5.2 billion, $27.2
billion and $74 million, respectively. The Company's two largest investments
in international joint ventures are Factofrance Heller, S.A. and NMB-Heller
Holding N.V., which account for 72% of the total investment in and 86% of
income of unconsolidated joint ventures. Factofrance Heller, S.A. provides
factoring services principally in France. NMB-Heller Holding N.V. operates
finance companies primarily located in Holland, Germany and the United
Kingdom.

On February 5, 1997 the Company's subsidiary, Heller International Group,
entered into an agreement to acquire the interests of its joint venture
partner, Compagnie de Suez, in Factofrance Heller S.A., the largest factoring
company in France. As a result, the Company will increase its ownership
interest in Factofrance from 48.8% to 97.6%. Heller International Group has
been an owner of Factofrance for over 30 years, using the equity method of
accounting for its 48.8% ownership position. At December 31, 1996, the
International Group's investment in Factofrance is included on the balance
sheet in Investments in International Joint Ventures with its share of
earnings included in Income of International Joint Ventures on the income
statement.

The acquisition will result in the consolidation of Factofrance's operations
which had assets and equity of $1.8 billion and $156 million, respectively, as
of December 31, 1996. The purchase is subject to approval by French banking
regulators. The purchase price is approximately $190 million and the
acquisition is expected to be completed by April 30, 1997.

<TABLE>
<CAPTION>
FOR THE YEAR
ENDED DECEMBER
31,
---------------
1996 1995 1994
---- ---- ----
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Revenues of consolidated subsidiaries
Asia/Pacific............................................... $26 $23 $16
Latin America.............................................. 12 6 9
--- --- ---
38 29 25
Income of international joint ventures
Europe..................................................... 42 35 20
Asia/Pacific............................................... 2 1 1
Latin America.............................................. -- (1) --
--- --- ---
44 35 21
Total international revenues................................. $82 $64 $46
=== === ===
</TABLE>

Total international revenues grew $18 million in 1996 compared to the prior
year due to growth in income from European joint ventures and the impact of
consolidating the Mexican subsidiary.

At December 31, 1996, the international group's consolidated subsidiaries
were contractually committed to finance an additional $4 million to new and
existing borrowers, generally contingent upon the maintenance of specific
credit standards. Since many of the commitments are expected to remain unused,
the total commitment amounts do not necessarily represent future cash
requirements.

Specialized finance. Project finance consists primarily of transactions
originated through structured financing of power producers and industrial
projects in the oil and gas, coal, mining, paper and environmental industries.

19
<PAGE>

Financing is provided through senior and junior secured loans and equity
investments. Equity finance is composed of subordinated debt and investments
originated on a direct basis in middle market companies. The Company is no
longer pursuing direct equity investments.

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1996 1995 1994
---- ---- ----
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Project finance.............................................. $160 $186 $156
Equity finance............................................... 72 132 147
---- ---- ----
Total lending assets and investments....................... $232 $318 $303
---- ---- ----
Nonearning assets............................................ $ 25 $ 23 $ 6
==== ==== ====
</TABLE>

Total lending assets and investments decreased $86 million primarily due to
the sale of several equity finance investments and the run-off and writedown
of several project finance transactions.

Interest income decreased due to a decline in average levels for lending
assets and lower variable rates of interest. Fees and other income decreased
primarily due to lower net gains from the sale of equity investments. Gains
from the sale of investments were $44 million and $53 million for the years
ended December 31, 1996 and 1995, respectively, offset by losses and
writedowns of $37 million and $20 million in 1996 and 1995, respectively.

At December 31, 1996, specialized finance was contractually committed to
finance an additional $125 million to new and existing borrowers, generally
contingent upon the maintenance of specific credit standards. Since many of
the commitments are expected to remain unused, the total commitment amounts do
not necessarily represent future cash requirements. No significant commitments
exist to provide additional financing related to nonearning assets.

CREDIT MANAGEMENT

The Company manages credit risk through its underwriting procedures,
centralized approval of individual transactions and active portfolio and
account management. Underwriting procedures have been developed for each
product category enabling the Company to assess a prospective borrower's
ability to perform in accordance with established loan terms. These procedures
may include analyzing business or property cash flows and collateral values,
performing financial sensitivity analyses and assessing potential exit
strategies. Financing and restructuring transactions over a certain amount are
reviewed by an independent corporate credit function and require approval by a
centralized credit committee.

The Company manages its portfolio by monitoring transaction size and
diversification by industry, geographic area and property type. Through these
methods, management identifies and limits exposure to unfavorable risks, and
seeks favorable financing opportunities. Loan grading systems are used to
monitor the performance of loans by product category and an overall risk
classification system is used to monitor the risk

20
<PAGE>

characteristics of the total portfolio. These systems generally consider debt
service coverage, the relationship of the loan to underlying business or
collateral value, industry characteristics, principal and interest risk and
credit enhancements such as guarantees, irrevocable letters of credit and
recourse provisions. When a problem account is identified, professionals that
specialize in the relevant industry formulate strategies to optimize and
accelerate the resolution process. A centralized internal audit department,
independent of operations, periodically reviews the ongoing credit management
of the individual portfolios and reports its findings to senior management and
the Audit Committee of the Board of Directors.

PORTFOLIO QUALITY

The credit quality of the portfolio has continued to improve as a result of
the strong credit quality of the post-1990 portfolio and the continued
resolution and reduction of pre-1990 accounts. To limit credit exposures the
portfolio has been diversified among product lines, industry and geographic
concentrations have been reduced, and hold size limits have been established.
In addition, disciplined underwriting standards and active portfolio
management have been maintained for each business group.

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1995 1994
------ ------ ------
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
LENDING ASSETS AND INVESTMENTS:
Receivables......................................... $8,529 $8,085 $7,616
Repossessed assets.................................. 14 28 19
------ ------ ------
Total lending assets............................ 8,543 8,113 7,635
Investments......................................... 805 693 634
Investments in international joint ventures......... 272 233 174
------ ------ ------
Total investments............................... 1,077 926 808
------ ------ ------
Total lending assets and investments............ $9,620 $9,039 $8,443
====== ====== ======
NONEARNING ASSETS:
Impaired receivables................................ $ 264 $ 261 $ 284
Repossessed assets.................................. 14 28 19
------ ------ ------
Total nonearning assets......................... $ 278 $ 289 $ 303
====== ====== ======
Ratio of nonearning impaired receivables to
receivables........................................ 3.1% 3.2% 3.7%
====== ====== ======
Ratio of total nonearning assets to total lending
assets............................................. 3.3% 3.6% 4.0%
====== ====== ======
ALLOWANCES FOR LOSSES:
Allowance for losses of receivables................. $ 225 $ 229 $ 231
Valuation allowance for repossessed assets -- 2 6
------ ------ ------
Total allowance for losses...................... $ 225 $ 231 $ 237
====== ====== ======
Ratio of allowance for losses of receivables to:
Receivables....................................... 2.6% 2.8% 3.0%
====== ====== ======
Nonearning impaired receivables................... 85% 88% 81%
====== ====== ======
DELINQUENCIES:
Earning loans delinquent 60 days or more............ $ 143 $ 117 $ 103
====== ====== ======
Ratio of earning loans delinquent 60 days or more to
receivables........................................ 1.7% 1.4% 1.4%
====== ====== ======
</TABLE>

21
<PAGE>

<TABLE>
<CAPTION>
FOR THE YEAR
ENDED DECEMBER
31,
----------------
1996 1995 1994
---- ---- ----
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
NET WRITEDOWNS OF LENDING ASSETS:
Net writedowns on receivables............................. $104 $215 $163
Net writedowns on repossessed assets...................... 4 16 16
---- ---- ----
Total net writedowns.................................. $108 $231 $179
==== ==== ====
Ratio of net writedowns to average lending assets..... 1.3% 2.9% 2.4%
==== ==== ====
Net writedowns on post-1990 lending assets................ $ 41 $ 45 $ 26
==== ==== ====
Ratio of post-1990 net writedowns to average total lending
assets................................................... 0.50% 0.56% 0.34%
==== ==== ====
</TABLE>

Pre-1990 Portfolio. The pre-1990 corporate finance and real estate finance
portfolios experienced a significant decline of $547 million or 36% in 1996
primarily attributable to the continued run-off of accounts and writedowns
taken on troubled credits. These portfolios have been reduced by over $1
billion or 51% since 1994 and now comprise only 10% of the Company's total
portfolio. The following table provides a breakdown of the pre-1990 portfolio.

<TABLE>
<CAPTION>
PRE-1990 PORTFOLIO
PROFILE
--------------------
1996 1995 1994
---- ------ ------
<S> <C> <C> <C>
Pre-1990 lending assets and investments............... $979 $1,526 $2,012
==== ====== ======
Pre-1990 nonearning assets............................ $163 $ 202 $ 274
==== ====== ======
Net writedowns on pre-1990 lending assets............. $ 67 $ 186 $ 153
==== ====== ======
Ratio of pre-1990 net writedowns to average total
lending assets....................................... 0.8% 2.3% 2.0%
==== ====== ======
Ratio of pre-1990 lending assets and investments to
total lending assets and investments................. 10.2% 16.9% 23.8%
==== ====== ======
</TABLE>

Nonearning Assets. Receivables are classified as nonearning when there is
significant doubt as to the ability of the debtor to meet current contractual
terms as evidenced by loan delinquency, reduction of cash flows, deterioration
in the loan to value relationship or other considerations. Nonearning assets
decreased from 3.6% to 3.3% of total lending assets at December 31, 1996. This
decrease reflects the strong credit performance of the post-1990 portfolio
combined with the continued resolution of the pre-1990 corporate finance and
real estate finance troubled accounts. The table below presents nonearning
assets by product category.

<TABLE>
<CAPTION>
NONEARNING ASSETS BY PRODUCT CATEGORY
--------------------------------------------
1996 1995 1994
-------------- -------------- --------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Asset based finance............ $ 23 8% $ 26 9% $ 22 7%
Corporate finance.............. 114 41 89 31 124 41
Real estate finance............ 91 33 142 49 150 50
International asset based
finance and factoring......... 25 9 9 3 1 --
Specialized finance............ 25 9 23 8 6 2
---- --- ---- --- ---- ---
Total nonearning assets...... $278 100% $289 100% $303 100%
==== === ==== === ==== ===
</TABLE>

The post-1990 portfolio has nonearning assets of only $115 million or 1.3%
of total lending assets. The low level of nonearning assets in the post-1990
portfolio is the result of the excellent credit quality of the asset based
portfolio and the post-1990 corporate finance and real estate finance
portfolios. Asset based finance nonearning assets total only 27 basis points
of total lending assets. This portfolio continues to exceed management's

22
<PAGE>

expectations relative to anticipated normal nonearning levels. Corporate
finance and real estate finance nonearning assets are principally comprised of
accounts which were underwritten prior to 1990. Nonearning assets in the
corporate finance portfolio increased $25 million from December 31, 1995 to
December 31, 1996 due to the net addition of a few pre-1990 accounts.
Nonearning assets in the real estate finance portfolio decreased by $51
million due to a combination of collections, restructurings and writedowns on
pre-1990 troubled credits. The increase in nonearning assets in international
asset based finance and factoring is due principally to troubled credits in
Mexico.

Allowance for Losses. The allowance for losses of receivables is a general
reserve available to absorb losses in the entire portfolio. This allowance is
established through direct charges to income, and losses are charged to the
allowance when all or a portion of a receivable is deemed uncollectible. The
allowance is reviewed periodically and adjusted when appropriate given the
size and loss experience of the overall portfolio, the effect of current
economic conditions and the collectibility and workout potential of identified
risk and nonearning accounts. For repossessed assets, if the fair value
declines after the time of repossession, a writedown is recorded or a
valuation allowance may be established to reflect this reduction in value.

The allowance for losses of receivables totals $225 million or 2.6% of
receivables at December 31, 1996 versus $229 million or 2.8% of receivables at
December 31, 1995. The decrease as a percentage of receivables reflects the
continued strong credit profile of the post-1990 portfolio and the continued
reduction in the size and exposure of the pre-1990 portfolio.

Delinquent Earning Accounts and Loan Modifications. The level of delinquent
earning accounts changes between periods based on the timing of payments and
the effects of changes in general economic conditions on the Company's
borrowers. Troubled debt restructurings remained stable at $14 million at
December 31, 1996 and 1995.

The Company had $55 million of receivables at December 31, 1996 that were
restructured at market rates of interest, written down from the original loan
balance and returned to earning status. The recorded investment of these
receivables is expected to be fully recoverable.

Writedowns. Total net writedowns have decreased considerably during 1996
reflecting the strong credit performance of the post-1990 portfolio along with
sizable recoveries recognized primarily on the pre-1990 portfolio.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994
-------------- -------------- --------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
NET WRITEDOWNS OF LENDING
ASSETS:
Asset based finance............ $ 8 8% $ 15 6% $ 21 12%
Corporate finance.............. 51 47 113 49 77 43
Real estate finance............ 37 34 89 39 79 44
International asset based
finance and factoring......... -- -- -- -- 2 1
Specialized finance............ 12 11 14 6 -- --
---- --- ---- --- ---- ---
Total net writedowns......... $108 100% $231 100% $179 100%
==== === ==== === ==== ===
</TABLE>

Gross writedowns declined to $163 million in 1996 from $259 million and $201
million in 1995 and 1994, respectively, while gross recoveries increased to
$55 million in 1996 as compared to $28 million and $22 million in 1995 and
1994, respectively. Gross writedowns were concentrated in the pre-1990 lending
assets representing 69%, 79% and 82% of gross writedowns in 1996, 1995 and
1994, respectively. The Company experienced a decline in gross writedowns on
the pre-1990 portfolio in 1996 and expects this trend to continue in 1997. In
addition, the mix of writedowns should shift to post-1990 assets as credit
performance on those portfolios approaches normalized levels.

23
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company has a total of $3.0 billion of liquidity support from
unaffiliated entities through its bank credit and receivable sale facilities.
The Company's domestic bank credit facilities were increased and extended
during 1996 to provide $2.3 billion in liquidity support. These facilities
include a $1,162 million one-year credit facility expiring April 9, 1997 and a
$1,162 million five-year credit facility expiring April 10, 2001. The one-year
credit facility includes a term loan option which expires one year after the
option exercise date. The terms of the revised bank credit facilities, which
require the Company to maintain stockholders' equity of $900 million, also
include reduced pricing. In addition, the Company has $35 million available
credit under two foreign currency revolving credit agreements.

The consolidated international subsidiaries are funded primarily through
committed and uncommitted foreign bank credit facilities in local currencies
totaling $145 million and $173 million U.S. dollar equivalent, respectively,
at December 31, 1996.

The Company replaced its $500 million factored accounts receivable sales
program with a new larger facility. This new facility allows the Company to
sell an undivided interest of up to $550 million in a designated pool of its
factored accounts receivables to five bank-supported conduits.

The bank credit facilities together with $550 million available under the
factored accounts receivable sale program represent 112% of outstanding
commercial paper and short-term borrowings at December 31, 1996 from
unaffiliated entities.

The loan portfolio continued to demonstrate a high degree of liquidity
during 1996 as evidenced by the loan repayments and payoffs of $2.5 billion
and asset syndications and loan sales of $757 million during 1996.

During 1996, lending assets and investments increased by $581 million, notes
and debentures totaling $1,358 million were retired, and dividends of $68
million were paid to common and preferred stockholders. To meet these funding
requirements, the Company supplemented its cash flow from operations by
issuing $976 million of senior notes and debentures and increased the level of
commercial paper and short-term borrowings by $522 million.

The Company plans to continue to be active in issuing senior debt during
1997 to support the replacement of $1.4 billion of maturing term debt as well
as the combined growth of the asset based and other portfolios. As of December
31, 1996, the Company had $1.3 billion remaining under a shelf registration
for the sale of $2.5 billion in debt to be issued from time to time.

The Company continues to maintain a conservative funding posture as
demonstrated by the ratio of commercial paper and short-term borrowings to
total debt of 37% at December 31, 1996 compared with 30% at December 31, 1995.
The ratio of debt (net of short-term investments) to total stockholders'
equity at December 31, 1996, remains conservative at 5.0x at December 31, 1996
and 1995.

The Company and Fuji Bank are parties to a Keep Well Agreement which
provides $500 million of additional liquidity support. This agreement is not
cancelable by either party and expires December 31, 2002.

RISK MANAGEMENT

The Company uses derivatives as an integral part of its asset/liability
management program to reduce its overall level of financial risk arising from
normal business operations. These derivatives, particularly interest rate swap
agreements, are used to lower funding costs, diversify sources of funding or
alter interest rate exposure arising from mismatches between assets and
liabilities or reduce exposures to foreign exchange fluctuations. All of the
derivative instruments are related to accomplishing these risk management
objectives. The Company is not an interest rate swap dealer nor is it a trader
in derivative securities, and it has not used speculative derivative products
for the purpose of generating earnings from changes in market conditions.

24
<PAGE>

Before entering into a derivative agreement, management determines that an
inverse correlation exists between the value of a hedged item and the value of
the derivative. At the inception of each agreement, management designates the
derivative to specific assets, pools of assets or liabilities. The risk that a
derivative will become an ineffective hedge is generally limited to the
possibility that an asset being hedged will prepay before the related
derivative expires. Accordingly, after inception of a hedge, asset/liability
managers monitor its effectiveness through an ongoing review of the amounts
and maturities of asset, liability and swap positions. This information is
reported to the Financial Risk Management Committee ("FRMC") which determines
the direction the Company will take with respect to its asset/liability
position. This position and the related activities of the FRMC are reported
regularly to the Executive Committee of the Board of Directors and to the
Board of Directors.

The Company has numerous swap agreements with commercial banks and
investment banking firms with notional amounts aggregating approximately $4.7
billion at December 31, 1996. This includes $1 billion of basis swaps entered
into during 1996, effective January 2, 1997, which have the effect of changing
the index on an equivalent amount of debt from a rate based on three month
LIBOR to a rate based on Prime. Before the effect of these swap agreements,
the Company's variable rate assets exceeded variable rate liabilities by $1.2
billion. After the effect of these interest rate swap agreements, variable
rate liabilities exceeded variable rate assets by approximately $408 million.
The average interest rates paid by the Company on outstanding indebtedness,
before and after the effect of swap agreements, during the three years ended
December 31, 1996 are summarized below. The effect of the swap agreements
increased interest expense by $13 million during 1996.

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
INTEREST RATES
INTEREST RATES INTEREST RATES ON TOTAL DEBT
INTEREST ON OTHER DEBT ON OTHER DEBT INCLUDING THE
RATES ON EXCLUDING THE INCLUDING THE EFFECT OF
COMMERCIAL EFFECT OF SWAP EFFECT OF SWAP SWAP
YEAR PAPER AGREEMENTS AGREEMENTS AGREEMENTS
---- ---------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
1996.............. 5.7% 6.6% 6.9% 6.5%
1995.............. 6.1 7.0 7.4 6.9
1994.............. 4.6 7.1 6.0 5.5
</TABLE>

In order to minimize the effect of movements in exchange rates on its
financial results, the Company periodically enters into forward contracts and
purchases options. The Company held $262 million of forward contracts, $42
million of purchased options and $2 million of interest rate cap agreements at
December 31, 1996. These financial instruments serve as hedges of its foreign
investment in international subsidiaries and joint ventures or effectively
hedge the translation of the related foreign currency income. The Company
invests in and operates commercial finance companies throughout the world.
Over the course of time, reported results from the operations and investments
in foreign countries may fluctuate in response to exchange rate movements in
relation to the U.S. dollar. While the Western European operations and
investments are the largest areas of the Company's activities, reported
results will be influenced to a lesser extent by the exchange rate movements
in the currencies of other countries in which our subsidiaries and investments
are located.

ACCOUNTING DEVELOPMENTS

The Financial Accounting Standards Board has released Statement of
Accounting Standards No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," effective for transfers
and servicing of financial assets and extinguishments of liabilities occurring
after December 31, 1996. This Statement provides accounting and reporting
standards for transfers and servicing of financial assets and extinguishment
of liabilities. After a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. This Statement provides standards
for distinguishing transfers of financial assets that are sales from transfers
that are secured borrowings.

This pronouncement will not have a significant impact on the Company's
financial position or results of operations.

25
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

HELLER FINANCIAL, INC. AND SUBSIDIARIES

MANAGEMENT REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING

The management of Heller Financial, Inc. and its subsidiaries is responsible
for the preparation, integrity and objectivity of the accompanying
consolidated financial statements. The statements were prepared in accordance
with generally accepted accounting principles reflecting, where applicable,
management's best estimates and judgments. The other financial information in
the December 31, 1996 annual report filed on Form 10-K is consistent with that
contained in the consolidated financial statements.

The Company's consolidated financial statements have been audited by Arthur
Andersen LLP, independent public accountants, selected by the holder of the
common stock. Arthur Andersen LLP is engaged to audit the consolidated
financial statements and conducts such tests and related procedures as it
deems necessary in conformity with generally accepted auditing standards. The
opinion of the independent auditors, based upon their audits of the
consolidated financial statements, is contained in this Form 10-K. Management
has made available to Arthur Andersen LLP all the Company's financial records
and related data, as well as the minutes of the stockholders' and directors'
meetings.

Management is responsible for establishing and maintaining a system of
internal accounting controls and procedures to provide reasonable assurance,
at an appropriate cost/benefit relationship, that assets are safeguarded and
that transactions are authorized, recorded and reported properly. The internal
accounting control system is augmented by a program of internal audits and
appropriate reviews by management, written policies and guidelines, and
careful selection and training of qualified personnel. Management considers
the internal auditors' and Arthur Andersen LLP's recommendations concerning
the Company's system of internal accounting controls and takes action in a
cost effective manner to appropriately respond to these recommendations.
Management believes that the Company's internal accounting controls provide
reasonable assurance that assets are safeguarded against material loss from
unauthorized use or disposition and that the financial records are reliable
for preparing financial statements and other data and for maintaining
accountability of assets.

Management also recognizes its responsibility for fostering a strong ethical
climate so that the Company's affairs are conducted according to the highest
standards of personal and corporate conduct. This responsibility is
characterized and reflected in the Company's code of ethical business
practices, which is publicized throughout the Company. The code of ethical
business practices addresses, among other things, the necessity of ensuring
open communication within the Company, potential conflicts of interest,
compliance with all domestic and foreign laws, including those relating to
financial disclosure, and the confidentiality of proprietary information.

Richard J. Almeida
Chairman and Chief Executive Officer

Lauralee E. Martin
Executive Vice President and Chief
Financial Officer

Lawrence G. Hund
Senior Vice President and Controller

26
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Heller Financial, Inc.:

We have audited the accompanying consolidated balance sheets of HELLER
FINANCIAL, INC. (a Delaware corporation) AND SUBSIDIARIES as of December 31,
1996 and 1995, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 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.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Heller Financial Inc. and
Subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles.

We have also previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheets as of December 31, 1994,
1993 and 1992, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the two years in the period
ended December 31, 1993 (none of which are presented herein), and we have
expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the selected financial data for each of
the five years in the period ending December 31, 1996, appearing on page 8 is
fairly stated in all material respects in relation to the consolidated
financial statements from which it has been derived.

ARTHUR ANDERSEN LLP

Chicago, Illinois
January 24, 1997
(Except with the matter
discussed in Note 18, as to
which the date is February
5, 1997)

27
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT FOR INFORMATION ON SHARES)

ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1996 1995
------ ------
<S> <C> <C>
Cash and cash equivalents........................................ $ 296 $ 599
Receivables (Note 2)
Commercial loans
Term loans................................................... 2,434 2,743
Revolving loans.............................................. 1,493 1,425
Real estate loans.............................................. 1,726 1,677
Equipment loans and leases..................................... 1,614 1,241
Factored accounts receivable................................... 994 816
Indirect consumer loans........................................ 268 183
------ ------
Total receivables.......................................... 8,529 8,085
Less: Allowance for losses of receivables (Note 2)............. 225 229
------ ------
Net receivables............................................ 8,304 7,856
Investments (Note 3)............................................. 805 693
Investments in international joint ventures (Note 3)............. 272 233
Other assets (Note 3)............................................ 249 257
------ ------
Total assets............................................... $9,926 $9,638
====== ======

LIABILITIES AND STOCKHOLDERS' EQUITY

Senior debt (Note 4)
Commercial paper and short-term borrowings..................... $2,745 $2,223
Notes and debentures........................................... 4,761 5,145
------ ------
Total debt................................................. 7,506 7,368
Credit balances of factoring clients............................. 590 497
Other payables and accruals...................................... 306 343
------ ------
Total liabilities.......................................... 8,402 8,208
Minority interest in equity of Heller International Group, Inc... 57 46
Stockholders' equity (Notes 8 and 9)
Cumulative Perpetual Senior Preferred Stock, Series A
("Perpetual Preferred Stock") ($.01 Par Value; stated value,
$25; 8.125%; 5,000,000 shares authorized and outstanding)..... 125 125
Cumulative Convertible Preferred Stock, Series D (No Par Value;
1/2% under prime; 1,000 shares authorized and outstanding).... 25 25
Common Stock ($.25 Par Value; 1,000 shares authorized; 100
shares outstanding) and additional paid-in capital............ 663 663
Retained earnings.............................................. 654 571
------ ------
Total stockholders' equity................................. 1,467 1,384
------ ------
Total liabilities and stockholders' equity................. $9,926 $9,638
====== ======
</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

28
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)

<TABLE>
<CAPTION>
FOR THE YEAR
ENDED DECEMBER
31,
--------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Interest income................................................. $807 $851 $702
Interest expense................................................ 452 464 336
---- ---- ----
Net interest income........................................... 355 387 366
Fees and other income........................................... 134 198 170
Income of international joint ventures.......................... 44 35 21
---- ---- ----
Operating revenues............................................ 533 620 557
Operating expenses (Note 10).................................... 247 216 195
Provision for losses (Note 2)................................... 103 223 188
---- ---- ----
Income before taxes and minority interest..................... 183 181 174
Income tax provision (Note 12).................................. 43 49 51
Minority interest in income of Heller International Group, Inc.. 7 7 5
---- ---- ----
Net income.................................................... $133 $125 $118
==== ==== ====
</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

29
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
-------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income........................................ $ 133 $ 125 $ 118
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for losses............................ 103 223 188
Losses from equity investments.................. 103 59 15
Provision for deferred tax asset................ 12 (50) 46
Loans originated for resale..................... -- (39) (90)
Net proceeds from sales of loans originated for
resale......................................... -- 42 81
(Decrease) increase in accounts payable and
accrued liabilities............................ (1) 34 11
Undistributed income of international joint
ventures....................................... (38) (26) (12)
(Decrease) increase in interest payable......... (11) 12 14
Other........................................... (22) 4 8
------- ------- -------
Net cash provided by operating activities..... 279 384 379
INVESTING ACTIVITIES
Longer-term loans funded.......................... (3,372) (3,202) (2,796)
Collections of principal.......................... 2,521 2,248 1,836
Sales and syndications of longer-term loans....... 757 708 583
Net increase in short-term loans and advances to
factoring clients................................ (427) (510) (343)
Investment in equity interests, equipment on
lease, and other investments..................... (305) (186) (158)
Sales of investments and equipment on lease....... 168 148 55
Other............................................. 3 (17) (29)
------- ------- -------
Net cash used for investing activities........ (655) (811) (852)
FINANCING ACTIVITIES
Retirement of notes and debentures................ (1,358) (459) (878)
Senior note issues................................ 976 1,674 841
Increase (decrease) in commercial paper and other
short-term borrowings............................ 522 (228) 470
Net decrease in advances to affiliates............ 5 4 2
Dividends paid on preferred and common stock...... (68) (64) (32)
Other............................................. (4) -- (1)
------- ------- -------
Net cash provided by financing activities..... 73 927 402
(Decrease) increase in cash and cash equivalents.... (303) 500 (71)
Cash and cash equivalents at the beginning of the
year............................................... 599 99 170
------- ------- -------
Cash and cash equivalents at the end of the year.... $ 296 $ 599 $ 99
======= ======= =======
</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

30
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN MILLIONS)

<TABLE>
<CAPTION>
CUMULATIVE COMMON
PERPETUAL CONVERTIBLE STOCK AND
SENIOR PREFERRED ADDITIONAL
PREFERRED STOCK PAID IN RETAINED
STOCK SERIES D CAPITAL EARNINGS TOTAL
--------- ----------- ---------- -------- ------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1993. $125 $25 $663 $440 $1,253
Net income................... -- -- -- 118 118
Preferred stock dividends
(Notes 8 and 9)............. -- -- -- (12) (12)
Unrealized gains on
securities available for
sale, net of tax (Note 3)... -- -- -- (20) (20)
Changes in unrealized gains
on securities available for
sale, net of tax (Note 3)... -- -- -- (4) (4)
Deferred translation
adjustment, net of tax...... -- -- -- (5) (5)
---- --- ---- ---- ------
BALANCE AT DECEMBER 31, 1994. 125 25 663 517 1,330
Net income................... -- -- -- 125 125
Preferred stock dividends
(Notes 8 and 9)............. -- -- -- (12) (12)
Common stock dividends (Note
9).......................... -- -- -- (52) (52)
Changes in unrealized gains
on securities available for
sale, net of tax (Note 3)... -- -- -- (10) (10)
Deferred translation
adjustment, net of tax...... -- -- -- 3 3
---- --- ---- ---- ------
BALANCE AT DECEMBER 31, 1995. 125 25 663 571 1,384
Net income................... -- -- -- 133 133
Preferred stock dividends
(Notes 8 and 9)............. -- -- -- (12) (12)
Common stock dividends (Note
9).......................... -- -- -- (56) (56)
Changes in unrealized gains
and losses on securities
available for sale, net of
tax (Note 3)................ -- -- -- 18 18
Deferred translation
adjustment, net of tax -- -- -- -- --
---- --- ---- ---- ------
BALANCE AT DECEMBER 31, 1996. $125 $25 $663 $654 $1,467
==== === ==== ==== ======
</TABLE>
- --------
The retained earnings balance included $13 of unrealized gains, $5 of
unrealized losses and $5 of unrealized gains on securities available for sale
at December 31, 1996, 1995 and 1994, respectively. Retained earnings also
included deferred foreign currency translation adjustments of $(14), $(14) and
$(17) at December 31, 1996, 1995 and 1994, respectively.

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

31
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Reporting Entity--

Heller Financial, Inc. and its subsidiaries (the "Company") are engaged
principally in furnishing commercial finance services to businesses in the
United States and investing in and operating commercial finance companies
throughout the world. The Company operates in the middle market segment of the
commercial finance industry, which generally includes entities in the
manufacturing and service sectors with annual sales in the range of $15
million to $200 million and in the real estate sector with property values
generally in the range of $5 million to $40 million. The Company currently
provides services in five product categories: 1) asset based finance, 2)
corporate finance, 3) real estate finance, 4) international asset based
finance and factoring and 5) specialized finance.

All of the common stock of the Company is owned by Heller International
Corporation (the "Parent"), which is a wholly-owned subsidiary of The Fuji
Bank, Limited ("Fuji Bank") of Tokyo, Japan. Fuji Bank also directly owns 21%
of the outstanding shares of Heller International Group, Inc. ("International
Group"), a consolidated subsidiary, through which the Company holds its
international operations. The remaining 79% of the outstanding shares of
International Group are owned by the Company.

Basis of Presentation--

The accompanying consolidated financial statements include the accounts of
the Company and its majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation. Investments
in affiliated companies owned 50% or less are accounted for by the equity
method. Certain temporary interests are included in investments and carried at
cost.

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
disclosure 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.

Cash and Cash Equivalents--

Cash and cash equivalents consist of cash deposits maintained in banks and
short-term debt securities with original maturities of less than 60 days.

Receivables--

Receivables are presented net of unearned income which generally includes
deferred loan origination and commitment fees, direct loan origination costs
and other amounts attributed to the fair value of equity interests and other
investments received in connection with certain financings. These amounts are
amortized to interest income using the effective interest method over the life
of the related loan or commitment period. From time to time, the Company
finances certain loans which it may elect to sell if the aggregate amount of
these loans reaches a sufficient size and market conditions are favorable.
These receivables are also presented net of unearned income. In the event the
Company sells a portion of a loan that it had originated, any deferred fees or
discounts relating to the portion of the loan sold are recognized in interest
income. For loan sales that qualify as syndications, fees received are
generally recognized in income, subject to certain yield tests, when the
syndication is complete.

32
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Income recognition is reviewed on an account by account basis. Collateral is
evaluated regularly primarily by assessing the related current and future cash
flow streams. Loans are classified as nonearning and all interest and unearned
income amortization is suspended when there is significant doubt as to the
ability of the debtor to meet current contractual terms. Numerous factors
including loan covenant defaults, deteriorating loan-to-value relationships,
delinquencies greater than 90 days, the sale of major income generating assets
or other major operational or organizational changes may lead to income
suspension. An account taken nonearning may be restored to earning status
either when all delinquent principal and interest have been paid under the
original contractual terms or the account has been restructured and has
demonstrated both the capacity to service the amended terms of the debt and
has adequate loan to value coverage.

Allowance for Losses--

The allowance for losses of receivables is established through direct
charges to income. Losses are charged to the allowance when all or a portion
of a receivable is deemed impaired and uncollectible as determined by account
management procedures. These procedures include assessing how the borrower is
affected by economic and market conditions, evaluating operating performance
and reviewing loan-to-value relationships. Impaired receivables are measured
based on the present value of expected future cash flows discounted at the
receivable's effective interest rate, at the observable market price of the
receivable, or at the fair value of the collateral if the receivable is
collateral dependent. When the recorded balance of an impaired receivable
exceeds the relevant measure of value, impairment is recorded through an
increase in the provision for losses.

Management evaluates the allowance for losses on a quarterly basis.
Nonearning assets and loans with certain loan grading characteristics are
reviewed to determine if there is a potential risk of loss under varying
scenarios of performance. The estimates of potential loss for these individual
loans are aggregated and added to a general allowance requirement, which is
based on the total of all other loans in the portfolio. This total allowance
requirement is then compared to the existing allowance for losses and
adjustments are made, if necessary.

Securitized Receivables--

From time to time certain receivables are securitized and sold to investors.
In certain instances, such sales may have limited recourse to the Company.
Upon sale of the loans, a gain is recognized for the difference between the
net carrying value of the receivables and the fair value of the securities
sold. The gain on the sale is reduced by a reserve established for estimated
future losses. The gain recognized is recorded in fees and other income.
Income from the acceleration of discounts and deferred fees attributed to the
loans sold is recorded as interest income. The Company may choose to retain a
portion of the securitized receivables. Under these circumstances, the amount
of the gain related to the retained portion is deferred and amortized over the
life of the securities. The retained securities are recorded as debt
securities available for sale. To date, the servicing rights to securitized
receivables have been retained by the Company.

Effective January 1, 1996, the Company adopted the provisions of Statement
of Accounting Standards ("SFAS") No. 122, "Accounting for Mortgage Servicing
Rights." SFAS No. 122 requires that a separate asset be recognized for rights
to service mortgage loans for others, however those servicing rights are
acquired. The total cost of the mortgage loan is allocated between the
servicing rights and the loans sold and retained without the servicing rights,
based on their relative fair values. The adoption of this pronouncement did
not have a significant effect on the Company's financial position.

33
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Investments in Joint Ventures--

Investments in unconsolidated joint ventures represent investments in
companies in 15 foreign countries. The Company accounts for its investments in
joint ventures under the equity method of accounting. Under this method, the
Company recognizes its share of the earnings or losses of the joint venture in
the period in which they are earned by the joint venture. Dividends received
from joint ventures reduce the carrying amount of the investment.

Investments--

Equity interests and investments--Investments in warrants, certain common
and preferred stocks and other equity investments, which are not subject to
the provisions of SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities," are carried at cost. The valuation of these
investments is periodically reviewed and the investment balance is written
down to reflect declines in value determined to be other than temporary. Gains
or losses recognized upon sale or write-down of these investments are recorded
as a component of fees and other income.

Equipment on lease--Aircraft and equipment under lease are recorded at cost
and depreciated over their estimated useful lives principally using the
straight line method for financial reporting purposes and accelerated methods
for tax purposes. Rental revenue is reported over the lease term as it becomes
receivable according to the provisions of the lease.

Available for sale, trading, and held to maturity securities--Investments
designated as available for sale securities are carried at fair value using
the specific identification method with unrealized gains or losses included in
stockholders' equity, net of related taxes. Trading securities are carried at
fair value with the related unrealized gains or losses included currently in
fees and other income. Securities that are held to maturity are recorded at
amortized cost. Available for sale and held to maturity securities may be
written down to fair value to reflect declines in value determined to be other
than temporary. The amount of the writedown is included in fees and other
income.

Real Estate Investments--The Company provides financing through certain real
estate loan arrangements that are recorded as investments by the Company.
Income is generally recognized only to the extent that cash received exceeds
the investment carrying amount.

Other Assets--

Repossessed Assets--Assets which have been legally acquired in satisfaction
of receivables are carried at fair value less selling costs and are included
in other assets, net of the related valuation allowance. After repossession,
operating costs are expensed and cash receipts are applied to reduce the asset
balance.

Income Taxes--

The Company and its wholly-owned domestic subsidiaries are included in the
consolidated United States federal income tax return of the Parent. The
International Group files a separate United States federal income tax return.
The Company reports income tax expense as if it were a separate taxpayer and
records future tax benefits as soon as it is more likely than not that such
benefits will be realized.

Derivative Financial Instruments--

Derivatives are used as an integral part of asset/liability management to
reduce the overall level of financial risk arising from normal business
operations. These derivatives, particularly interest rate swap agreements, are

34
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
used to lower funding costs, diversify sources of funding or alter interest
rate exposure arising from mismatches between assets and liabilities. The swap
agreements are generally held to maturity and the differential paid or
received under these agreements is recognized over the life of the related
agreement. The Company is not an interest rate swap dealer nor is it a trader
in derivative securities, and it has not used speculative derivative products
for the purpose of generating earnings from changes in market conditions.

The Company periodically enters into forward currency exchange contracts
which are designated as hedges of its exposure to foreign currency
fluctuations from the translation of its foreign currency denominated
investments in certain European, Asian and Latin American joint ventures and
subsidiaries. Through these contracts, the Company primarily sells the local
currency and buys U.S. dollars. Gains and losses resulting from translation of
foreign currency financial statements and the related effects of the hedges of
net investments in joint ventures and subsidiaries outside the United States
are accumulated in stockholders' equity, net of related taxes, until the
international investment is sold or substantially liquidated.

The Company also periodically enters into forward contracts or purchases
options. These financial instruments serve as hedges of its foreign investment
in international subsidiaries and joint ventures or effectively hedge the
translation of the related foreign currency income. The contracts which serve
as hedges of investments in international subsidiaries and joint ventures are
carried at fair value with gains or losses deferred and included in the basis
of the investment. The change in fair value of contracts which serve to
effectively hedge the translation of foreign currency income is recognized
immediately and included in the determination of net income.

Reclassifications--

Certain prior year amounts have been reclassified in order to conform to the
current year's presentation.

2. LENDING ASSETS

Lending assets include receivables and repossessed assets.

Diversification of Credit Risk--

Concentrations of lending assets of 5% or more at December 31, 1996 and
1995, based on the standard industrial classification of the borrower, are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1996 1995
-------------- --------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Department and general merchandise retail
stores...................................... $987 12% $774 10%
Food, grocery and other miscellaneous retail. 669 8 568 7
General industrial machines.................. 500 6 392 5
Business services............................ 435 5 387 5
Textiles and apparel manufacturing........... 403 5 529 7
</TABLE>

The department and general merchandise retail stores and the textiles and
apparel manufacturing categories are primarily comprised of factored accounts
receivable which represent short-term trade receivables from numerous
customers. The majority of lending assets in the food, grocery and
miscellaneous retail category are revolving and term facilities with borrowers
primarily in the business of manufacturing and retailing of food products. The
general industrial machines classification is distributed among machinery used
for many different industrial applications. Business services is primarily
comprised of computer and data processing services, credit reporting and
collection, and miscellaneous business services.

35
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Contractual Maturity of Loan Receivables--

The contractual maturities of the Company's receivables at December 31,
1996, which are presented in the table below, should not be regarded as a
forecast of cash flows (in millions):

<TABLE>
<CAPTION>
AFTER
1997 1998 1999 2000 2001 2001 TOTAL
------ ------ ------ ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Commercial loans................ $ 786 $ 653 $ 662 $483 $489 $ 854 $3,927
Real estate loans............... 323 278 275 208 204 438 1,726
Equipment loans and leases...... 394 333 267 207 180 233 1,614
Factored accounts receivable.... 994 -- -- -- -- -- 994
Indirect consumer loans......... 8 119 13 19 35 74 268
------ ------ ------ ---- ---- ------ ------
Total....................... $2,505 $1,383 $1,217 $917 $908 $1,599 $8,529
====== ====== ====== ==== ==== ====== ======
</TABLE>

Commercial loans consist principally of corporate finance and asset based
receivables. Corporate finance receivables are predominantly collateralized by
senior liens on the borrower's stock or assets or both. Asset based
receivables are collateralized by inventory, receivables and property, plant
and equipment owned by the borrowers. Real estate loans are principally
collateralized by first mortgages on commercial and residential real estate.
Equipment loans and leases are secured by the underlying equipment and the
Company often has at least partial recourse to the equipment vendor. Factored
accounts receivable are purchased from clients in return for a commission.
Indirect consumer loans are primarily to originator or servicer companies of
consumer loans on a secured basis.

Impaired Receivables, Repossessed Assets, and Troubled Debt Restructurings--

The Company does not recognize interest and fee income on impaired
receivables classified as nonearning and on repossessed assets, which are set
forth in the following table:

<TABLE>
<CAPTION>
DECEMBER
31,
----------
1996 1995
---- ----
(IN
MILLIONS)
<S> <C> <C>
Impaired receivables............................................. $264 $261
Repossessed assets............................................... 14 28
---- ----
Total nonearning assets...................................... $278 $289
==== ====
Ratio of total nonearning assets to total lending assets......... 3.3% 3.6%
==== ====
</TABLE>

Nonearning assets have decreased to 3.3% from 3.6% of total lending assets
during 1996. Nonearning assets are principally comprised of $91 million from
real estate finance and $114 million from corporate finance both of which are
primarily attributed to accounts underwritten prior to 1990.

The average investment in impaired receivables was $283 million, $344
million and $225 million for the years ended December 31, 1996, 1995 and 1994,
respectively.

The Company had $14 million of loans that are considered troubled debt
restructures at December 31, 1996 and 1995. The following table indicates the
effect on income if interest on nonearning impaired receivables and troubled
debt restructurings outstanding at year-end had been recognized at original
contractual rates during the year.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------
1996 1995 1994
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Interest income which would have been recorded................ $46 $43 $36
Interest income recorded...................................... 14 21 16
--- --- ---
Effect on interest income..................................... $32 $22 $20
=== === ===
</TABLE>

36
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Loan Modifications--

The Company had $55 million of receivables at December 31, 1996 that were
restructured at a market rate of interest and written down from the original
loan balance. The recorded investment of these receivables is expected to be
fully recoverable. Interest income of approximately $2 million has been
recorded on these receivables under the modified terms, along with
approximately $1 million of cash interest collections during 1996. At December
31, 1996, the Company was not committed to lend significant additional funds
under the restructured agreements.

Allowance for Losses--

The changes in the allowance for losses of receivables and repossessed
assets were as follows:

<TABLE>
<CAPTION>
ALLOWANCE FOR
LOSSES
----------------
1996 1995 1994
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Balance at the beginning of the year....................... $231 $237 $226
Provision for losses....................................... 103 223 188
Writedowns................................................. (163) (259) (201)
Recoveries................................................. 55 28 22
Transfers and other........................................ (1) 2 2
---- ---- ----
Balance at the end of the year............................. $225 $231 $237
==== ==== ====
</TABLE>

The valuation allowance for repossessed assets of $2 million at December 31,
1995 is included in other assets on the balance sheet. Writedowns occurring at
the time of repossession are considered writedowns of receivables.

Impaired receivables with identified reserve requirements were $176 million
and $234 million at December 31, 1996 and 1995, respectively.

<TABLE>
<CAPTION>
DECEMBER
31,
----------
1996 1995
---- ----
(IN
MILLIONS)
<S> <C> <C>
Identified reserve requirements for impaired receivables........ $ 57 $ 57
Additional allowance for losses of receivables.................. 168 172
---- ----
Total allowance for losses of receivables................... $225 $229
==== ====
Ratio of total allowance for losses of receivables to nonearning
impaired receivables........................................... 85% 88%
==== ====
</TABLE>

The Company maintains an allowance for losses of receivables based upon
management's best estimate of future possible losses in the portfolio of
receivables. Management's estimate is based upon current economic conditions,
previous loss history, and knowledge of clients' financial position. Changes
in these estimates could result in an increase or decrease in the reserve
maintained.

37
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. INVESTMENTS AND OTHER ASSETS

Investments in International Joint Ventures--

The international joint ventures, which are substantially independently
financed, on a combined basis had total receivables of $5.2 billion at
December 31, 1996, factoring volume and net income of $29.5 billion and $90
million, respectively, for the year ended December 31, 1996. The Company owns
interests from 40% to 50% of these joint ventures. The comparable amounts for
1995 for receivables, factoring volume and net income were $5.2 billion, $27.2
billion and $74 million, respectively. The Company's two largest investments
in international joint ventures are Factofrance Heller S.A. and NMB-Heller
Holding N.V., which account for 72% of the total investments in and 86% of
income of unconsolidated joint ventures. Factofrance Heller, S.A. provides
factoring services principally in France. NMB-Heller Holding N.V. operates
finance companies primarily located in the Netherlands, Germany and the United
Kingdom. During 1996, the Company acquired a 50% ownership interest in a
factoring company in Chile.

Other Investments and Assets--

The following table sets forth a summary of the major components of
investments and other assets (in millions):

<TABLE>
<CAPTION>
DECEMBER
31,
---------
1996 1995
---- ----
<S> <C> <C>
Investments:
Real estate investments......................................... $205 $155
Equity interests and investments................................ 171 256
Equipment on lease.............................................. 135 113
Available for sale securities
Debt securities............................................... 223 128
Equity securities............................................. 43 17
Trading securities.............................................. 28 24
---- ----
Total investments........................................... $805 $693
==== ====
Other Assets:
Repossessed assets, net of allowance of $2 in 1995.............. $ 14 $ 26
Deferred income tax benefits, net of allowance of $16 and $15 in
1996 and 1995, respectively.................................... 127 121
Prepaid expenses and other assets............................... 69 64
Net advances to affiliates...................................... 20 25
Furniture, fixtures and equipment............................... 19 21
---- ----
Total other assets.......................................... $249 $257
==== ====
</TABLE>

Real estate investments are acquisition, development and construction
investment transactions. At December 31, 1996, the Company held investments in
146 projects with balances ranging up to $5 million.

Equity interests and investments principally include common and preferred
stocks received in connection with certain financings, investments in limited
partnerships and warrants.

Equipment on lease is comprised of aircraft and related equipment.
Noncancellable future minimum rental receipts under the leases are $19
million, $17 million, $12 million, $8 million and $3 million for 1997 through
2001. Substantially all equipment was under lease as of December 31, 1996.

38
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The available for sale debt securities consist of purchased investments in
debt securities as well as subordinated securities retained in connection with
the securitization of certain receivables on mobile home parks, self storage
facilities and limited service hotels. The subordinated securities mature on
various dates through 2028 based on the related stated maturity dates of the
underlying receivables. The Company has established a reserve of $2 million
for possible losses related to the subordinated securities, which is included
in other payables and accruals on the balance sheet. Net unrealized holding
losses on total available for sale debt securities amounted to $7 million at
December 31, 1996 and 1995 and $9 million at December 31, 1994 and are
recorded in stockholder's equity on a net of tax basis. Cash and cash
equivalents includes $2 million of short-term debt securities at December 31,
1996 which are available for sale.

The available for sale equity securities are principally comprised of common
stocks. Net unrealized holding gains on these securities were $28 million at
December 31, 1996, net unrealized holding losses were $2 million at December
31, 1995 and net unrealized holding gains were $16 million at December 31,
1994. These amounts are recorded in stockholders' equity on a net of tax
basis.

The Company had realized gains from sales of total investment securities of
$106 million, $133 million and $64 million during the year ended December 31,
1996, 1995 and 1994, respectively, and had realized losses and writedowns
totaling $103 million, $59 million and $15 million for 1996, 1995 and 1994,
respectively. Proceeds from the sale of equity investments may be subject to
normal post-closing adjustments, the impact of which is estimated at the time
of closing.

Included in cash and cash equivalents at December 31, 1996 and 1995,
respectively, are $198 million and $409 million of short-term debt securities
that are held to maturity.

The Company holds certain dollar denominated investments in debt and equity
securities in Brazil which are classified as trading securities. Net gains of
$3 million, $4 million and $7 million related to these investments were
recorded in income for the years ended December 31, 1996, 1995 and 1994,
respectively.

Noncash investing activities which occurred during the period ended December
31, 1996 include $15 million of receivables which were classified as
repossessed assets. During 1995, $62 million of receivables were classified as
repossessed assets. Also during 1995, receivables of $34 million were
exchanged for investments of the same amount, and a $12 million gain was
realized on an exchange of available for sale equity securities.

4. SENIOR DEBT

Commercial paper and short-term borrowings--The table below sets forth
information concerning commercial paper. The average amounts are computed
based on the average daily balances outstanding during the year. The Company
issues commercial paper with maturities ranging up to 270 days.

<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Commercial Paper:
End of period borrowings................................ $2,576 $2,067 $2,338
Average borrowings...................................... 2,367 2,483 2,228
Maximum month-end borrowings............................ 2,613 2,860 2,486
Average interest rate --
During the year....................................... 5.50% 5.96% 4.30%
During the year, including the effect of commitment
fees................................................. 5.65% 6.10% 4.57%
At year-end, including the effect of commitment fees.. 5.63% 5.96% 5.83%
</TABLE>

39
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Commercial paper borrowings represent 34% of total debt at December 31,
1996. The consolidated international subsidiaries had short-term borrowings of
$169 million, $156 million and $113 million at December 31, 1996, 1995 and
1994, respectively, which were used to finance international operations.
Combined commercial paper and short-term borrowings represent 37% of total
debt at December 31, 1996.

Available credit and asset sale facilities--At December 31, 1996, the
Company had committed credit and asset sale facilities from unaffiliated
entities which totaled $3.0 billion. This total includes $2.4 billion in
foreign and domestic bank facilities and $550 million of additional liquidity
available under a factored accounts receivables program.

In August 1996, the Company replaced its $500 million factored accounts
receivable sales program with a new facility. This new facility allows the
Company to sell an undivided interest of up to $550 million in a designated
pool of its factored accounts receivables to five bank-supported conduits. The
underlying liquidity support for the conduits is provided by unaffiliated
entities. One of the conduits has an operating agreement with Fuji Bank.

In April of 1996, the Company replaced its existing domestic bank credit
facilities with a new agreement that provides $2.3 billion of liquidity
support. These facilities include a $1,162 million one-year credit facility
expiring April 9, 1997 and a $1,162 million five-year credit facility expiring
April 10, 2001. The one-year credit
facility includes a term loan option which expires one year after the option
exercise date. The terms of the revised bank credit facilities, which require
the Company to maintain stockholders' equity of $900 million, include reduced
pricing and the ability to increase the aggregate facility to $3 billion.
Under the terms of the debt covenants of the agreement, the Company could have
borrowed an additional $4.8 billion of debt at December 31, 1996. In addition,
the Company has $35 million available credit under two foreign currency
revolving credit agreements.

Notes and debentures--The scheduled maturities of debt outstanding at
December 31, 1996, other than commercial paper and short-term borrowings and
excluding the unamortized discount of $3 million, are as follows:

<TABLE>
<CAPTION>
SCHEDULED MATURITIES AT DECEMBER 31,
-------------------------------------------------
AFTER
1997 1998 1999 2000 2001 2001 TOTAL
------ ------ ------ ---- ---- ----- ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Various fixed rate notes
and debentures........... $ 359 $ 750 $ 706 $706 $213 $171 $2,905
Fixed weighted average
rate................... 6.13% 8.93% 7.77% 4.85% 6.54% 7.03% 7.02%
Various floating rate
notes and debentures..... $1,049 $ 407 $ 325 $ 78 $-- $-- $1,859
Floating weighted
average rate........... 5.08% 3.36% 5.75% 5.81% -- % -- % 4.85%
Total notes and
debentures............... $1,408 $1,157 $1,031 $784 $213 $171 $4,764
</TABLE>

Notes redeemable solely at the option of the Company prior to the final
maturity date are reflected in the table above as maturing on the final
maturity date.

The Company's various fixed and floating rate notes and debentures are
denominated in U.S. dollars and Japanese yen. In order to fix the exchange
rate of Japanese yen to U.S. dollars on the yen denominated debt, the Company
has entered into cross currency interest rate swap agreements. In order to
convert certain of the Company's fixed rate debt to floating rate debt and
vice-versa, the Company entered into interest rate and basis swap agreements.
The following table provides the weighted average interest rate of the U.S.
dollar and Japanese yen denominated debt before and after the effect of the
swap agreements.

40
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
WEIGHTED AVERAGE INTEREST RATE
-------------------------------------------------------------------------------------------
FIXED DEBT BEFORE EFFECT AFTER EFFECT VARIABLE DEBT BEFORE EFFECT AFTER EFFECT TOTAL DEBT
OUTSTANDING OF SWAP OF SWAP OUTSTANDING OF SWAP OF SWAP OUTSTANDING
----------- ------------- ------------ ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1996:
United States dollar.... $2,453 7.68% 6.76% $1,531 5.70% 5.71% $3,984
Japanese yen............ 452 3.43 5.87 328 0.87 6.12 780
------ ------ ------
Total................. $2,905 7.02% 6.62% $1,859 4.85% 5.78% $4,764
====== ====== ======
1995:
United States dollar.... $2,247 8.03% 7.00% $2,119 6.07% 6.10% $4,366
Japanese yen............ 452 3.40 6.46 330 2.50 8.06 782
------ ------ ------
Total................. $2,699 7.26% 6.91% $2,449 5.59% 6.36% $5,148
====== ====== ======
</TABLE>

The contractual interest rates for the U.S. dollar denominated fixed rate
debt range between 5.63% and 9.63% at December 31, 1996 and 1995. The
contractual rates on the U.S. dollar denominated floating rate debt are based
primarily on indices such as the Constant Maturity Treasury Index less a range
of .12% to .40%, the Federal Funds rate plus .18% to .38%, the three month
Treasury bill rate plus .46%, the London Inter-Bank Offered Rate ("LIBOR")
plus .05% to .95%, or the Prime rate less 2.56% to 2.79%.

5. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company is a party to several agreements involving financial instruments
with off-balance sheet risk. These instruments are used to meet the financing
needs of borrowers and to manage the Company's own exposure to interest rate
and currency exchange rate fluctuations. These instruments principally include
interest rate swap agreements, forward currency exchange contracts, purchased
options, loan commitments, letters of credit, and guarantees.

Derivative financial instruments used for risk management purposes--The
Company utilizes derivatives as an integral part of its asset/liability
management program to reduce its overall level of financial risk. These
derivatives, particularly interest rate swap agreements, are used to lower
funding costs, diversify sources of funding or alter interest rate exposure
arising from mismatches between assets and liabilities. The Company's
derivative instruments are entirely related to accomplishing these risk
management objectives which arise from normal business operations. The Company
is not an interest rate swap dealer nor is it a trader in derivative
securities, and it has not used speculative derivative products for the
purpose of generating earnings from changes in market conditions.

Before entering into a derivative agreement, management determines that an
inverse correlation exists between the value of the hedged item and the value
of the derivative. At the inception of each agreement, management designates
the derivative to specific assets, pools of assets or liabilities. The risk
that a derivative will become an ineffective hedge is generally limited to the
possibility that an asset or liability being hedged will prepay before the
related derivative expires. Accordingly, after inception of a hedge,
asset/liability managers monitor its effectiveness through an ongoing review
of the amounts and maturities of assets, liabilities and swap positions. This
information is reported to the Company's Financial Risk Management Committee
(FRMC) which determines the direction the Company will take with respect to
its asset/liability position. The asset/liability position of the Company and
the related activities of the FRMC are reported regularly to the Executive
Committee of the Board of Directors and to the Board of Directors.

The following table summarizes the notional amounts of the Company's
interest rate swap agreements, foreign exchange contracts, purchased options
and interest rate cap agreements. The credit risk associated with

41
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
these instruments is limited to amounts earned but not collected and to any
additional amounts which may be incurred to replace the instrument under then
current market conditions. These amounts are substantially less than the
notional amounts of these agreements. The Company manages this risk by
establishing minimum credit ratings for each counterparty and by limiting the
exposure to individual counterparties as measured by the total notional amount
and the current replacement cost of existing agreements. The Company has not
experienced nonperformance by any counterparty related to its derivative
financial instruments.

<TABLE>
<CAPTION>
CONTRACT OR
NOTIONAL
AMOUNT
-------------
1996 1995
------ ------
(IN MILLIONS)
<S> <C> <C>
Interest rate swap agreements................................. $2,634 $2,681
Cross currency interest rate swap agreements.................. 780 780
Basis swap agreements......................................... 1,255 1,614
Spot and forward currency exchange contracts.................. 262 243
Purchased options............................................. 42 20
Interest rate cap agreements.................................. 2 4
</TABLE>

Interest rate swaps are primarily used to convert fixed rate financings to
variable rate debt. Less frequently, when the issuance of debt denominated in
a foreign currency is deemed more cost effective, cross currency interest rate
swaps are employed to convert foreign currency denominated debt to U.S. dollar
denominated debt and U.S. based indices. The Company also uses swap agreements
to alter the characteristics of specific asset pools to more closely match the
interest terms of the underlying financing. These agreements enhance the
correlation of the interest rate and currency characteristics of the Company's
assets and liabilities and thereby mitigate its exposure to interest rate
volatility. Basis swap agreements involve the exchange of two different
floating rate interest payment obligations and are used to manage the basis
risk between different floating rate indices. The Company has entered into $1
billion of basis swaps effective January 2, 1997 which have the effect of
changing the index on an equivalent amount of debt from a rate based on three
month LIBOR to a rate based on Prime. The amount of these basis swaps is
included in the table above.

Forwards are contracts for the delivery of an item in which the buyer agrees
to take delivery of an instrument or currency at a specified price and future
date. To minimize the effect of exchange rate movements in the currencies of
foreign countries, in which certain of our subsidiaries and investments are
located, the Company will periodically enter into forward currency exchange
contracts and purchase options. These financial instruments serve as hedges of
its foreign investment in international subsidiaries and joint ventures or
effectively hedge the translation of the related foreign currency income. The
Company also periodically enters into forward contracts to hedge receivables
denominated in foreign currencies or may purchase foreign currencies in the
spot market in order to settle a foreign currency denominated liability.

Commitments, letters of credit and guarantees--The Company generally enters
into various commitments, letters of credit and guarantees in response to the
financing needs of its customers. As many of the agreements are expected to
expire unused, the total commitment amount does not necessarily represent
future cash requirements. The credit risk involved in issuing these
instruments is essentially the same as that involved in extending loans to
borrowers and the credit quality and collateral policies are similar to those
involved in the Company's normal lending transactions. The contractual amount
of the Company's commitments, letters of credit and guarantees are shown
below:

<TABLE>
<CAPTION>
CONTRACT
AMOUNT
-------------
1996 1995
------ ------
(IN MILLIONS)
<S> <C> <C>
Loan and investment commitments............................... $2,065 $1,772
Letters of credit and financial guarantees.................... 561 513
Factoring credit guarantees................................... 286 300
</TABLE>

42
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Commitments to fund new and existing borrowers generally have fixed
expiration dates and termination clauses and typically require payment of a
fee. Investment commitments are primarily comprised of commitments from
corporate finance and real estate finance and totaled $106 million and $63
million at December 31, 1996 and 1995, respectively. Letters of credit and
financial guarantees are conditional commitments issued by the Company to
guarantee the performance of a borrower or an affiliate to a third party. At
December 31, 1996, the contractual amount of guarantees includes $22 million
related to affiliates. For factoring credit guarantees, the Company receives a
fee for guaranteeing the collectibility of certain factoring clients' accounts
receivable. Under this arrangement, clients generally retain the
responsibility for collection and bookkeeping. Losses related to these
services have historically not been significant.

6. LEGAL PROCEEDINGS

The Company is party to a number of legal proceedings as plaintiff and
defendant, all arising in the ordinary course of its business. Although the
ultimate amount for which the Company may be held liable, if any, is not
ascertainable, the Company believes that the amounts, if any, which may
ultimately be funded or paid with respect to these matters will not have a
material adverse effect on the financial condition or results of operations of
the Company.

7. RENTAL COMMITMENTS

The Company and its consolidated subsidiaries have minimum rental
commitments under noncancellable operating leases at December 31, 1996, as
follows (in millions):

<TABLE>
<S> <C>
1997................................. $15
1998................................. 16
1999................................. 15
2000................................. 13
2001................................. 15
Thereafter........................... 10
---
$84
===
</TABLE>

The total rent expense, net of rental income from subleases, was $23
million, $18 million and $17 million for the years ended December 31, 1996,
1995 and 1994, respectively.

8. PREFERRED STOCK

Perpetual Preferred Stock--The Company's Cumulative Perpetual Senior
Preferred Stock, Series A, ("Perpetual Preferred Stock") is not redeemable
prior to September 22, 2000. On or after that date, the Perpetual Preferred
Stock will be redeemable at the option of the Company, in whole or in part, at
a redemption price of $25 per share, plus accrued and unpaid dividends. The
Perpetual Preferred Stock has an annual dividend rate of 8.125%. Dividends are
cumulative and payable quarterly. The Perpetual Preferred Stock ranks senior
with respect to payment of dividends and liquidation to other preferred stock
of the Company.

Convertible Preferred Stock--The Company's Cumulative Convertible Preferred
Stock, Series D (no par value) ("Convertible Preferred Stock") is held by the
Parent. The Convertible Preferred Stock has a dividend yield established
quarterly at a rate of 1/2% less than the announced prime commercial lending
rate of Morgan Guaranty Trust Company of New York, payable quarterly. Under
the terms of the Convertible Preferred Stock, the Company is prohibited from
paying cash dividends on Common Stock unless full cumulative dividends on all
outstanding shares of Convertible Preferred Stock for all past dividend
periods have been paid. The

43
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Convertible Preferred Stock is convertible into Common Stock of the Company at
the conversion price of one share of Common Stock for each 200 shares of
Convertible Preferred Stock. Subject to certain conditions, the Convertible
Preferred Stock is redeemable at any time at the option of the Company at a
redemption price equal to the price paid for such stock plus accumulated
dividends.

Redeemable Preferred Stock--The Company has authorized the issuance of
100,000 shares of a series of preferred stock designated NW Preferred Stock,
Class B (No Par Value) ("NW Preferred Stock"), pursuant to the "Keep Well
Agreement" between the Company and Fuji Bank wherein, among other things, Fuji
Bank has agreed to purchase NW Preferred Stock in an amount required to
maintain the Company's net worth at $500 million. The Company's net worth was
$1,467 million at December 31, 1996. If and when issued, dividends will be
paid quarterly on NW Preferred Stock at a rate per annum equal to 1% over the
three-month London Inter-bank Offered Rate. Subject to certain conditions, NW
Preferred Stock will be redeemable at the option of the holder within a
specified period of time after the end of a calendar quarter in an aggregate
amount not greater than the excess of the net worth of the Company as of the
end of such calendar quarter over $500 million and at a redemption price equal
to the price paid for such stock plus accumulated dividends. No purchases of
NW Preferred Stock have been made by Fuji Bank under this agreement.

9. DIVIDEND RESTRICTIONS AND PAYMENTS

Dividends may legally be paid only out of the Company's surplus, as
determined under the provisions of the Delaware General Corporation Law, or
net profits for either the current or preceding fiscal year, or both. In
addition, the Company is prohibited from paying cash dividends on Common Stock
or any other preferred stock that ranks, with respect to payment of dividends,
equal or junior to the Perpetual Preferred Stock, unless full cumulative
dividends on the Perpetual Preferred Stock have been paid.

The Company declared and paid dividends on the Perpetual Preferred Stock of
$10 million in 1996 and 1995. Dividends declared and paid on the Company's
Convertible Preferred Stock amounted to $2 million each year during 1996 and
1995. The Company also declared and paid cash dividends of $56 million and $52
million on Common Stock in 1996 and 1995, respectively.

10. OPERATING EXPENSES

The following table sets forth a summary of the major components of
operating expenses:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------
1996 1995 1994
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Employee salaries............................................. $ 92 $ 85 $ 76
Other compensation............................................ 62 50 46
Space costs................................................... 23 18 17
Equipment costs............................................... 12 13 13
Travel and entertainment...................................... 12 10 10
Other......................................................... 46 40 33
---- ---- ----
Total..................................................... $247 $216 $195
==== ==== ====
</TABLE>

The Parent performs services for the Company and charges the Company for the
related costs incurred. These charges are reflected in certain of the above
captions.

44
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

11. BENEFIT PLANS AND OTHER POST RETIREMENT BENEFITS

The Company has various incentive compensation plans and a savings and
profit-sharing plan which provide for annual contributions to eligible
employees based on the Company's achievement of certain financial objectives
and employee achievement of certain objectives.

In addition, the Company has a noncontributory defined benefit pension plan
covering substantially all of its domestic employees and a supplemental
retirement plan in which certain employees participate. The Company's policy
is to fund, at a minimum, pension contributions as required by the Employee
Retirement Income Security Act of 1974. Benefits under the defined benefit and
supplemental retirement plans are based on an employee's years of service and
average earnings for the five highest consecutive years of compensation
occurring during the last ten years before retirement. The assets of the
defined benefit plan are held in a collective investment fund of the Multiple
Fund Investment Trust for Employee Benefit Plans. The assets are managed by
American National Bank Investment Management and Trust Company.

The following table summarizes the funding status of the defined benefit and
supplemental retirement plans at the end of each year and identifies the
assumptions used to determine the projected benefit obligation.

<TABLE>
<CAPTION>
SUPPLEMENTAL
DEFINED RETIREMENT
BENEFIT PLAN PLAN
---------------- ----------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------- ----------------
1996 1995 1994 1996 1995 1994
---- ---- ---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Actuarial present value of benefit
obligations
Vested benefit obligation................ $ 21 $ 17 $ 10 $ 2 $ 2 $ 1
Nonvested benefit obligation............. 3 3 2 0 0 0
---- ---- ---- ---- ---- ----
Accumulated benefit obligation............. 24 20 12 2 2 1
Effect of projecting future salary
increases on past service................. 14 12 8 2 2 2
---- ---- ---- ---- ---- ----
Projected benefit obligation............... 38 32 20 4 4 3
Plan assets at market value................ 37 34 28 0 0 0
---- ---- ---- ---- ---- ----
Plan assets in excess of (less than)
projected benefit obligation.............. $ (1) $ 2 $ 8 $ (4) $ (4) $ (3)
==== ==== ==== ==== ==== ====
Assumptions:
Discount rate............................ 7.75% 7.25% 8.50% 7.75% 7.25% 8.50%
Expected return on assets................ 9.00% 9.00% 9.00% N/A N/A N/A
Rate of salary increases................. 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
</TABLE>

Components of net pension cost for the defined benefit plan for the
following periods are:

<TABLE>
<CAPTION>
DEFINED BENEFIT PLAN
----------------------
YEAR ENDED
DECEMBER 31,
----------------------
1996 1995 1994
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost-benefits earned during the year....... $ 3 $ 2 $ 2
Interest accrued on projected benefit obligation... 2 2 2
Actual return on assets............................ 3 6 0
Net amortization and deferral...................... -- 3 (3)
------ ------ ------
Net periodic pension cost...................... $ 2 $ 1 $ 1
====== ====== ======
</TABLE>

45
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Supplementary Retirement Plan had a net periodic pension cost of
approximately $1 million in the years ended December 31, 1996, 1995 and 1994.

The prepaid pension cost (liability) of the defined benefit and supplemental
retirement plans were as follows:

<TABLE>
<CAPTION>
SUPPLEMENTAL
RETIREMENT
DEFINED BENEFIT PLAN PLAN
------------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------ ---------------
<CAPTION>
1996 1995 1994 1996 1995 1994
------ ------ ------ ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Plan assets in excess of (less than)
projected benefit obligation........ $ (1) $ 2 $ 8 $(4) $(4) $(3)
Unrecognized prior service (asset)
cost................................ (1) (1) (2) 2 1 1
Unrecognized net (gain) loss from
past experience different from that
assumed............................. 2 2 (3) (1) 1 --
Unrecognized net (asset) obligation
from initial application............ (1) (1) (1) -- -- --
------ ------ ------ --- --- ---
Pension (liability) prepaid cost. $ (1) $ 2 $ 2 $(3) $(2) $(2)
====== ====== ====== === === ===
</TABLE>

In accordance with the provisions of SFAS No. 87 "Employers' Accounting for
Pensions" the Company adjusts the discount and salary rates, as well as the
rates of return on assets, to reflect market conditions at the measurement
date. Changes in these assumptions will impact the amount of the pension
expense in future years. The Company increased the discount rate to 7.75% at
December 31, 1996 from 7.25% at December 31, 1995 to calculate the projected
pension benefit obligation at December 31, 1996. The increase in discount rate
at December 31, 1996 is expected to decrease pension expense by approximately
$1 million. The change in discount rate at December 31, 1996 reflects the
change in the interest rate environment. At December 31, 1995, the Company
decreased the discount rate to 7.25% from 8.50% at December 31, 1994,
reflecting the change in the interest rate environment. The decrease in the
discount rate at December 31, 1995 increased 1996 pension expense by
approximately $1 million. The Company maintained the salary rate assumption at
6% at December 31, 1996, based on the Company's experience.

The Company also provides health care benefits for eligible retired
employees and their eligible dependents. The following table presents the
funded status of the postretirement benefits other than pensions of active and
retired employees as of December 31, 1996, 1995 and 1994.

<TABLE>
<CAPTION>
POSTRETIREMENT
HEALTH CARE
PLAN
----------------
DECEMBER 31,
----------------
1996 1995 1994
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Accumulated postretirement obligation:
Retirees................................................... $ 4 $ 4 $ 4
Fully eligible active plan participants.................... 1 1 1
Other active plan participants............................. 2 2 2
---- ---- ----
Total unfunded accumulated postretirement benefit
obligation.............................................. 7 7 7
Unrecognized net gain (loss) from past experience different
from that assumed........................................... 1 1 --
Unrecognized net (asset) obligation from initial application. (6) (6) (6)
---- ---- ----
Accrued postretirement benefit cost...................... $ 2 $ 2 $ 1
==== ==== ====
Assumptions:
Discount rate.............................................. 7.75% 7.25% 8.50%
</TABLE>

46
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In accordance with the provisions of SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," the Company adjusts the
discount, salary, and health care cost trend rates to reflect market
conditions at the measurement date. Changes in these assumptions will impact
the amount of the benefit expense in future years. The accumulated
postretirement benefit obligation, under the terms of the amended healthcare
plan, was calculated using relevant actuarial assumptions and health care cost
trend rates projected at annual rates ranging from 9.5% in 1996 to 5.5% in
2004 and thereafter. The effect of a 1.0% annual increase in these assumed
cost trend rates would increase the accumulated postretirement benefit
obligation by less than $1 million, while annual service and interest cost
components in the aggregate would not be materially affected. The Company
increased the discount rate to 7.75% at December 31, 1996 from 7.25% at
December 31, 1995 to calculate the accumulated postretirement benefit
obligation. The increase in the discount rate at December 31, 1996 had no
effect on the 1996 expense and it is expected to decrease 1997 expense by less
than $1 million. Consistent with the changes in the pension plan discount rate
at December 31, 1995 the discount rate used to calculate the accumulated
postretirement benefit obligation was decreased to 7.25% at December 31, 1995
from 8.50% at December 31, 1994. The decrease in the discount rate at December
31, 1995 increased 1996 expense by less than $1 million. At December 31, 1996,
1995, and 1994, $6 million of the transition asset remained unamortized. The
net periodic postretirement benefit cost was $1 million for the years ended
December 31, 1996, 1995 and 1994.

The Parent has established the Executive Deferred Compensation Plan (the
"Plan"), a nonqualified deferred compensation plan, in which certain employees
of the Parent and the Company may elect to defer a portion of their annual
compensation on a pre-tax basis. The amount deferred remains an asset of the
Company and may be invested in any of certain mutual funds at the
participant's direction. Payment of amounts deferred are made in a lump sum or
in annual installments over a five, ten or fifteen year period as determined
by the participant. Plan assets were approximately $13 million and $10 million
at December 31, 1996 and 1995, respectively.

12. INCOME TAXES

Although the Company files a consolidated U.S. tax return with its Parent,
the Company reports income tax expense as if it were a separate taxpayer and
records deferred tax benefits for deductible temporary differences if it is
more likely than not that these benefits will be realized. Included in income
tax expense are amounts relating to the International Group, which files a
separate United States federal income tax return. United States federal income
taxes paid by the International Group amounted to $5 million in 1996 and $1
million in 1995.

The provision for income taxes is summarized in the following table:

<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Current:
Federal.................................................. $ 60 $116 $33
Utilization of investment and foreign tax credits........ (29) (22) (29)
---- ---- ---
Net federal............................................ 31 94 4
State.................................................... (4) 2 (2)
Foreign.................................................. 4 3 1
---- ---- ---
Total current.......................................... 31 99 3
==== ==== ===
Deferred:
Federal.................................................. 11 (43) 41
State.................................................... 1 (7) 7
==== ==== ===
Total deferred......................................... 12 (50) 48
==== ==== ===
$ 43 $ 49 $51
==== ==== ===
</TABLE>

47
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In accordance with the provisions of the current tax allocation agreement,
net payments of $43 million were made to the Parent in 1996, of which $25
million related to the Company's 1995 current federal and state income tax
liability. In 1995 and 1994, income taxes paid amounted to $70 million and $1
million, respectively.

The reconciliation between the statutory federal income tax provision and
the actual effective tax provision for each of the three years ended December
31 is as follows:

<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Tax provision at statutory rate.............................. $64 $63 $61
State and foreign income taxes, net of federal income tax
effects..................................................... 8 4 9
Income of foreign subsidiaries and joint ventures............ (13) (12) (12)
Net foreign tax rate differential............................ -- 4 4
Resolution of tax issues..................................... (7) (13) (6)
Change in valuation allowance................................ -- -- (2)
Other, net................................................... (9) 3 (3)
--- --- ---
$43 $49 $51
=== === ===
</TABLE>

The significant components of the deferred tax assets and deferred tax
liabilities at December 31, 1996 and 1995 are shown below:

<TABLE>
<CAPTION>
DECEMBER
31,
----------
1996 1995
---- ----
(IN
MILLIONS)
<S> <C> <C>
Deferred Tax Assets:
Allowance for loan losses..................................... $ 77 $ 87
Repossessed properties........................................ 1 13
Foreign tax credits........................................... 16 13
Alternative minimum tax credit carryforward................... 1 2
Unrealized depreciation of securities available for sale...... -- 3
Net operating losses.......................................... 28 --
Equity interests and other investments........................ 10 --
Terminated swap income........................................ 17 32
Accrued expenses.............................................. 18 9
---- ----
Gross deferred tax assets....................................... 168 159
Valuation allowance............................................. (16) (15)
---- ----
Gross deferred tax assets, net of valuation allowance........... 152 144
Deferred Tax Liabilities:
Equity interests and other investments........................ $ -- $ (6)
Fixed assets and deferred income from lease financing......... (17) (17)
Unrealized appreciation of securities available for sale...... (8) --
---- ----
Gross deferred tax liabilities.................................. (25) (23)
---- ----
Net deferred tax asset.......................................... $127 $121
==== ====
</TABLE>

The tax benefits of deductible temporary differences are shown net of a
valuation allowance of $16 million and $15 million, as of December 31, 1996
and 1995, respectively.

Provision has not been made for United States or additional foreign taxes on
$56 million of undistributed earnings of subsidiaries outside the United
States, as those earnings are intended to be reinvested. Such earnings

48
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
would become taxable upon the sale or liquidation of these international
operations or upon the remittance of dividends. Given the availability of
foreign tax credits and various tax planning strategies, management believes
any tax liability which may ultimately be paid on these earnings would be
substantially less than that computed at the statutory federal income tax
rate. Upon remittance, certain foreign countries impose withholding taxes that
are then available, subject to certain limitations, for use as credits against
the Company's U.S. tax liability. The amount of withholding tax that would be
payable upon remittance of the entire amount of undistributed earnings would
be approximately $14 million.

During 1994, the Company utilized alternative minimum tax credit and
investment tax credit carryforwards of $5 million. The Company had unused
foreign tax credit carryforwards of $16 million and $13 million at December
31, 1996 and 1995, respectively. Due to substantial restrictions on the
utilization of foreign tax credits imposed by the Tax Reform Act of 1986, the
Company may not be able to utilize a significant portion of foreign tax credit
carryforwards prior to expiration. Accordingly, the Company has recognized a
valuation allowance for the amount of foreign tax credits recorded at December
31, 1996 and 1995.

The Company has recorded a net deferred tax asset of $127 million as of
December 31, 1996. Although realization is not assured, management believes it
is more likely than not that the deferred tax assets will be realized. The
amount of the deferred tax assets considered realizable, however, could be
reduced if estimates of future taxable income are reduced.

13. RELATED PARTIES

Several financial, administrative or other service arrangements exist
between the Company and Fuji Bank, the Parent or related affiliates. In
management's opinion, the terms of these arrangements are similar to those the
Company would have been able to obtain in like agreements with unaffiliated
entities in an arms-length transaction.

Keep Well Agreement with Fuji Bank. The Company and Fuji Bank are parties to
a "Keep Well Agreement," which provides that if the Company should lack
sufficient cash or credit facilities to meet its commercial paper obligations,
Fuji Bank will lend the Company up to $500 million. That loan would be payable
on demand and the proceeds from the loan could only be used by the Company to
meet its commercial paper obligations. The Keep Well Agreement further
provides that Fuji Bank will maintain the Company's net worth in an amount
equal to $500 million. Accordingly, if the Company should determine, at the
close of any month, that its net worth is less than $500 million, then Fuji
Bank will purchase, or cause one of its subsidiaries to purchase, shares of
the Company's NW Preferred Stock in an amount necessary to increase the
Company's net worth to $500 million. Commitment fees paid by the Company to
Fuji Bank under the Keep Well Agreement amounted to less than $1 million in
1996, 1995 and 1994. Interest on any loans will be charged at the prime rate
of Morgan Guaranty Trust Company of New York plus .25% per annum. No loans or
purchases of NW Preferred Stock have been made by Fuji Bank under this
agreement.

The Keep Well Agreement cannot be terminated by either party prior to
December 31, 2002. After December 31, 2002, either Fuji Bank or the Company
may terminate the agreement upon 30 business days prior written notice. As
long as the Perpetual Preferred Stock is outstanding and held by third parties
other than Fuji Bank, the agreement may not be terminated by either party
unless the Company has received written certifications from Moody's Investors
Services, Inc. and Standard and Poor's Corporation that, upon such
termination, the Perpetual Preferred Stock will be rated no lower than "a3"
and "A-", respectively.

Services Provided by Fuji Bank and the Parent for the Company. Certain
employees of Fuji Bank and the Parent perform managerial and administrative
and other related functions for the Company. The Company compensates Fuji Bank
and the Parent for the use of such individuals' services at a rate which
reflects current

49
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
costs to Fuji Bank and the Parent. The amounts paid to Fuji Bank and the
Parent for these services were $2 million and $60 million, respectively for
1996, and $2 million and $53 million for 1995. Additionally, certain
subsidiaries of Fuji Bank periodically serve as managers for various offerings
of the Company's debt securities and acts as registrar and paying agent for
certain debt issuances by the Company.

Services Provided by the Company for Fuji Bank and the Parent. The Company
performs services for its affiliates and charges them for the cost of the work
performed. The Company may also guarantee the obligations of its clients or
the clients of certain joint ventures, under letters of credit issued by
financial institutions, some of which are affiliates of the Company.
Additionally, the Company guarantees payment under a deferred compensation
arrangement between the Parent and certain of its employees. The Company has
agreements with the Parent and certain other subsidiaries of the Parent which
provide for the Company to receive an annual negotiated fee for servicing
assets which have been sold by the Company to the Parent and these affiliates.
The Company continues to service these assets and all other direct costs and
expenses, including any additional advances made after the date of the
agreement, are borne by the subsidiaries of the Parent. The amount of fees for
servicing these assets in 1996, 1995 and 1994, was approximately $1 million,
$1 million and $2 million, respectively. These amounts are recorded as a
reduction of operating expenses in the consolidated statements of income.

Heller Capital Markets Group, Inc. ("CMG"), a wholly-owned subsidiary of the
Company, acts as placement agent for the sale of commercial paper issued by
the Parent. CMG received compensation based upon the face amount of the
commercial paper notes sold. For the year ending December 31, 1996, the Parent
paid less than $1 million to CMG as compensation pursuant to this arrangement.

Intercompany Receivables, Payables, Transactions and Financial Instruments.
At December 31, 1996 and 1995, other assets included net amounts due from
affiliates of $20 million and $25 million, respectively. The amounts are
comprised principally of interest bearing demand notes representing amounts
due to the Company arising from the interest rate swap agreement with the
Parent, advances, administrative fees and costs charged to other subsidiaries
of the Parent. The notes bear interest at rates which approximate the average
rates on the Company's commercial paper obligations or short-term bank
borrowing rates outstanding during the period.

The Company is a party to a $200 million interest rate swap agreement with
the Parent, which expires December 15, 2000, and was a party with the Parent
for a $250 million interest rate swap agreement which expired on July 31,
1995. The purpose of these agreements is to manage the Company's exposure to
interest rate fluctuations. Under these agreements, the Company pays interest
to the Parent at a variable rate based on the commercial paper rate published
by the Board of Governors of the Federal Reserve System and the Parent pays
interest to the Company at fixed rates of 5.57% and 5.0%, respectively. These
agreements had no significant effect on 1996 interest expense and had the
effect of increasing the Company's interest expense $3 million in 1995.

In the ordinary course of its business, the Company participates in joint
financings with Fuji Bank or certain affiliates. During 1996, the Company
jointly participated with Fuji Bank in a $53 million financing, of which the
Company retained an $8 million interest. During 1995, the Company sold to Fuji
Bank its $25 million interest in a joint financing with Fuji Bank.

During 1995, the Company terminated two cross-currency basis swap agreements
with a subsidiary of Fuji Bank. Fuji Bank paid to the Company net amounts of
approximately $1 million under these agreements during 1995.

Fuji Bank and one of its subsidiaries provided uncommitted lines of credit
to consolidated international subsidiaries totaling $15 million and $14
million at December 31, 1996 and 1995, respectively. Borrowings under these
facilities totaled $4 million and $10 million at both December 31, 1996 and
1995, respectively. In addition, Fuji Bank provides committed and uncommitted
lines of credit to certain international joint ventures.

50
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

14. FAIR VALUE DISCLOSURES

Statement of Financial Accounting Standards No. 107 "Disclosures about Fair
Value of Financial Instruments," requires disclosure of fair value information
for certain financial instruments, for which it is practicable to estimate
that value. Since there is no well established market for many of the
Company's assets and financial instruments, fair values are estimated using
present value, property yield, historical rate of return and other valuation
techniques. These techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. These
assumptions are inherently judgmental and changes in such assumptions could
significantly affect fair value calculations. The derived fair value estimates
may not be substantiated by comparison to independent markets and may not be
realized in immediate liquidation of the instrument.

The carrying values and estimated fair values of the Company's financial
instruments at December 31, 1996 and 1995, are as follows:

<TABLE>
<CAPTION>
1996 1995
------------------ ------------------
ESTIMATED ESTIMATED
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- --------- -------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net receivables....................... $8,304 $8,509 $7,856 $7,984
Total investments..................... 805 863 693 749
Debt.................................. 7,506 7,514 7,368 7,527
Swap agreements in a net payable
position............................. 2 (17) 2 127
</TABLE>

The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments. Carrying values
approximate fair values for all financial instruments which are not
specifically addressed.

For variable rate receivables that reprice frequently and are performing at
acceptable levels, fair values were assumed to equal carrying values. All
other receivables were pooled by loan type and risk rating. The fair value for
these receivables was estimated by employing discounted cash flow analyses,
using interest rates equal to the London Inter-Bank Offered Rate or the Prime
Rate offered as of December 31, 1996 and 1995 plus an adjustment for normal
spread, credit quality and the remaining terms of the loans.

Carrying and fair values of the trading securities and securities available
for sale are based on quoted market prices. The fair values of equity
interests and other investments are calculated by using the Company's business
valuation model to determine the estimated value of these investments as of
the anticipated exercise date. The business valuation model analyzes the cash
flows of the related company and considers values for similar equity
investments. The determined value is then discounted back to December 31, 1996
and 1995, using a rate appropriate for returns on equity investments. Although
the investments in international joint ventures accounted for by the equity
method are not considered financial instruments and, as such, are not included
in the above table, management believes that the fair values of these
investments significantly exceed the carrying value of these investments.

The fair value of the notes and debentures was estimated using discounted
cash flow analyses, based on current incremental borrowing rates for
arrangements with similar terms and remaining maturities, as quoted by
independent financial institutions as of December 31, 1996 and 1995. Fair
values were assumed to equal carrying values for commercial paper and other
short term borrowings.

The carrying value of the swaps represents the net interest payable as of
December 31, 1996 and 1995. The estimated fair value represents the mark to
market loss and mark to market gain outstanding as of December 31, 1996 and
1995, respectively, as based upon quoted market prices obtained from
independent financial institutions. The fair values of loan commitments,
letters of credit and guarantees are negligible.

51
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

15. FINANCIAL DATA BY REGION

The following table shows certain financial information by geographic region
for the years ended December 31, 1996, 1995 and 1994.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------------
UNITED STATES EUROPE ASIA-PACIFIC LATIN AMERICA CONSOLIDATED
------------- ------ ------------ ------------- ------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Assets
1996.................. $9,157 $330 $306 $133 $9,926
1995.................. 8,981 295 265 97 9,638
1994.................. 7,913 271 241 51 8,476
Interest income, fees
and other income, and
income of international
joint ventures
1996.................. $ 893 $ 47 $ 30 $ 15 $ 985
1995.................. 1,009 39 28 8 1,084
1994.................. 839 24 19 11 893
Income before taxes and
minority interest
1996.................. $ 145 $ 36 $ 6 $ (4) $ 183
1995.................. 148 23 7 3 181
1994.................. 145 12 7 10 174
Net income
1996.................. $ 100 $ 31 $ 5 $ (3) $ 133
1995.................. 95 21 5 4 125
1994.................. 92 11 6 9 118
</TABLE>

16. SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following financial information for the calendar quarters of 1996, 1995
and 1994, is unaudited. In the opinion of management, all adjustments necessary
to present fairly the results of operations for such periods have been
included.

<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------
MARCH 31 JUNE 30 SEPT. 30 DEC. 31
-------- ------- -------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net interest income--
1996........................................ $ 90 $ 87 $ 87 $ 91
1995........................................ 94 95 98 100
1994........................................ 82 90 99 95
Operating revenues--
1996........................................ $131 $129 $124 $149
1995........................................ 146 132 161 181
1994........................................ 140 125 145 147
Provision for losses--
1996........................................ $ 24 $ 25 $ 12 $ 42
1995........................................ 50 28 56 89
1994........................................ 50 40 48 50
Net income--
1996........................................ $ 34 $ 35 $ 35 $ 29
1995........................................ 30 34 35 26
1994........................................ 28 35 30 25
</TABLE>

52
<PAGE>

HELLER FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
17. ACCOUNTING DEVELOPMENTS

This pronouncement will not have a significant impact on the Company's
financial position or results of operations.

18. SUBSEQUENT EVENT

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

53
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The names and ages of all directors and all persons nominated or chosen to
become directors and executive officers of the Company as of December 31,
1996, and a biographical summary for each such person appear in the following
pages. No family relationship exists among the persons named below. Company
shall mean Heller Financial, Inc.; Parent shall mean Heller International
Corporation; International Group shall mean Heller International Group, Inc.;
Holdings shall mean Heller International Holdings, Inc.; and Fuji Bank shall
mean The Fuji Bank, Limited.

DIRECTORS

<TABLE>
<CAPTION>
NAME, AGE & POSITIONS FROM TO
- --------------------- ---- --
<S> <C> <C>
RICHARD J. ALMEIDA (54)
Chairman of the Board and Chief Executive
Officer, the Company, Parent, International
Group and Holdings............................. November, 1995 Present
Director, the Company, Parent and International
Group.......................................... November, 1987 Present
Director, Holdings.............................. December, 1992 Present
Executive Vice President and Chief Financial
Officer, the Company, Parent and International
Group.......................................... November, 1987 1995
Executive Vice President and Chief Financial
Officer, Holdings.............................. December, 1992 1995
HAJIME MAEDA (55)
Director, the Company, Parent, International
Group and Holdings............................. January, 1995 Present
Managing Director, Fuji Bank.................... November, 1994 Present
Director and General Manager, Fuji Bank, Head
Office Corporate Banking Division I............ 1992 1994
General Manager, Fuji Bank, Business Information
Division....................................... 1990 1992
MITCHELL F. VERNICK (41)
Vice Chairman, the Company, Parent,
International Group and Holdings; Director,
International Group and Holdings............... November, 1995 January, 1997*
Director, the Company and Parent................ May, 1991 January, 1997
Executive Vice President, Holdings.............. December, 1992 1995
Senior Group President, the Company............. October, 1990 1995
Executive Vice President, International Group... June, 1989 1995
YUKIHIKO CHAYAMA (49)
Director, the Company, Parent, International
Group and Holdings ............................ July, 1996 Present
Chief Representative, Fuji Bank, Washington, DC
Representative Officer......................... October, 1996 Present
Executive Vice President and General Manager,
Fuji Bank, Americas Division................... July, 1996 Present
General Manager, Fuji Bank, OJI Branch ......... May, 1994 1996
Deputy General Manager, Fuji Bank, Head Office
Corporate Banking
Division I..................................... April 1991 1994
HIDEHIKO IDE (49)
Director, the Company and Parent................ May, 1995 Present
Executive Vice President and General Manager,
Fuji Bank, Chicago Branch...................... May, 1995 Present
Chief Representative, Fuji Bank, Washington, DC
Representative Office.......................... October, 1991 1995
TSUTOMU HAYANO (50)
Director, the Company and Parent................ May, 1996 Present
General Manager, Fuji Bank, New York Branch;
Chairman,
The Fuji Bank and Trust Co..................... May, 1996 Present
General Manager, Fuji Bank, Hamamatsucho Branch. May, 1994 1996
President, Fuji Bank, Nederland N.V............. February, 1990 1994
</TABLE>
- --------
*Mr. Vernick resigned from his positions at the Company in January, 1997.

54
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE & POSITIONS FROM TO
- --------------------- ---- --
<S> <C> <C>
MARK KESSEL (55)
Director, the Company and Parent....................... July, 1992 Present
Partner, Shearman & Sterling........................... December, 1977 Present
MICHAEL J. LITWIN (49)
Director, International Group and Holdings............. January, 1997 Present
Director, the Company and Parent....................... April, 1990 Present
Senior Group President, the Company.................... October, 1990 Present
Executive Vice President, Parent....................... January, 1997 Present
Executive Vice President, Holdings..................... December, 1992 Present
Executive Vice President, International Group.......... January, 1989 Present
DENNIS P. LOCKHART (50)
Director, the Company, Parent and International Group;
President, International Group; Executive Vice
President, Parent..................................... January, 1988 Present
Director and President, Holdings....................... December, 1992 Present
Director, Tri Valley Corporation....................... April, 1981 Present
LAURALEE E. MARTIN (46)
Director, International Group and Holdings; Executive
Vice President and Chief Financial Officer, the
Company, Parent, International Group and Holdings..... May, 1996 Present
Director, the Company and Parent....................... May, 1991 Present
Senior Group President, the Company.................... October, 1990 1996
Director, Gables Residential Trust..................... January, 1994 Present
KENJI MIYAMOTO (49)
Director, the Company, Parent, International Group and
Holdings; Executive Vice President, Parent............ May, 1994 Present
General Manager, Fuji Bank, Atlanta Agency............. May, 1992 1994
Senior Vice President, Fuji Investment Management Co.,
Ltd................................................... May, 1987 1992
HIDEO NAKAJIMA (47)
Director, the Company and Parent....................... May, 1996 Present
General Manager, Fuji Bank, Los Angeles Agency......... May, 1996 Present
Managing Director, Fuji Bank Nederland N.V. ........... July, 1993 1996
Deputy General Manager, Fuji Bank, Head Office
Corporate Banking
Division I............................................ February, 1990 1993
OSAMU OGURA (39)
Director, International Group and Holdings............. May, 1996 Present
Director, the Company and Parent....................... November, 1994 Present
Senior Vice President and Deputy General Manager, Fuji
Bank, Americas Division............................... November, 1994 Present
Senior Manager, Fuji Bank, Americas Division........... 1993 1994
Manager, Fuji Bank, International Division............. 1992 1993
Manager, Fuji Bank, Personnel Affairs Division......... 1987 1992
MASAHIRO SAWADA (43)
Director, the Company, Parent, International Group and
Holdings.............................................. December, 1995 Present
Senior Vice President, Parent.......................... May, 1995 Present
Joint General Manager, Fuji Bank, Paris Branch......... May, 1992 1995
Deputy General Manager, Systems Planning Division, Fuji
Bank.................................................. October, 1990 1992
</TABLE>

55
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE & POSITIONS FROM TO
- --------------------- ---- --
<S> <C> <C>
KENICHI TOMITA (47)
Director, the Company and Parent...................... May, 1996 Present
Executive Vice President and General Manager, Fuji
Bank, Credit Division for the Americas............... April, 1996 Present
Deputy General Manager, Fuji Bank, Credit Division for
the Americas......................................... March, 1992 1996

EXECUTIVE OFFICERS

ANTHONY O'B. BEIRNE (48)
Senior Vice President and Treasurer, the Company and
Parent............................................... May, 1995 Present
Senior Vice President and Controller, Holdings........ December, 1992 1995
Senior Vice President and Controller, the Company,
Parent and International Group....................... March, 1988 1995
LAWRENCE P. CHAPMAN (38)
Senior Vice President and Senior Credit Officer, the
Company and Parent................................... January, 1995 Present
Vice President, Manager of Corporate Credit, the
Company and Parent................................... July, 1993 1995
Vice President, Aircraft Finance Division, the
Company.............................................. June, 1990 1993
ROBERT J. DENNIS (39)
Executive Vice President, Sales Finance Division, the
Company.............................................. December, 1995 Present
Executive Vice President, Heller Real Estate Financial
Services, the Company................................ September, 1994 1995
Senior Vice President, Heller Real Estate Financial
Services, the Company................................ July, 1992 1994
Vice President, Heller Real Estate Financial Services,
the Company.......................................... April, 1988 1992
MICHAEL P. GOLDSMITH (43)
Group President, Heller Real Estate Financial
Services, the Company................................ April, 1994 Present
Executive Vice President, Division Manager, Project
Management Organization.............................. May, 1990 1994
JOHN L. GUY, JR. (44)
Executive Vice President, Heller First Capital
Division, the Company; President, Heller First
Capital Corp......................................... May, 1996 Present
Senior Vice President, Heller First Capital Division,
the Company.......................................... May, 1995 1996
Senior Vice President and Treasurer, the Company and
Parent............................................... July, 1992 1995
Senior Vice President, Internal Audit, the Company.... April, 1992 1992
Vice President, Internal Audit, the Company........... November, 1989 1992
Director, Monetta Trust............................... November, 1994 Present
JAY S. HOLMES (50)
Group President, Equipment Finance and Leasing Group,
the Company.......................................... December, 1995 Present
President, Heller Financial Leasing, Inc.............. May, 1996 Present
Executive Vice President, Commercial Equipment Finance
Division, the Company................................ September, 1992 1995
Senior Vice President and Director, Chrysler Capital
Corporation.......................................... May, 1990 1992
LAWRENCE G. HUND (40)
Senior Vice President and Controller, the Company,
Parent, International Group and Holdings............. May, 1995 Present
Senior Vice President, Liability Management &
Assistant Treasurer, the Company and Parent.......... January, 1995 1995
Senior Vice President, Accounting & Operations, the
Company and Parent................................... January, 1993 1994
Vice President, Finance & Planning, the Company and
International Group.................................. August, 1990 1992
</TABLE>

56
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE & POSITIONS FROM TO
- --------------------- ---- --
<S> <C> <C>
DAVID J. KANTES (53)
Group President, Heller Business Credit Group, the
Company.............................................. December, 1995 Present
Executive Vice President, Heller Business Credit
Division, the Company................................ June, 1993 1995
Executive Vice President, NatWest Credit Corp......... July, 1986 1993
Executive Vice President & Chief Credit Officer,
NatWest Bancorp...................................... November, 1991 1992
CHALLIS M. LOWE (51)
Executive Vice President, Human Resources, the Company
and Parent........................................... December, 1995 Present
Senior Vice President, Human Resources, the Company
and Parent........................................... November, 1993 1995
Senior Vice President, Administrative Services, Sanwa
Business Credit Corporation.......................... January, 1985 1993
KATHY J. MANKIN (43)
Group President, Corporate Finance Group, the Company. May, 1996 Present
Executive Vice President, Corporate Finance Group, the
Company.............................................. November, 1993 1996
Senior Vice President, Midwest Leveraged Funding, the
Company.............................................. November, 1990 1993
MICHAEL J. ROCHE (45)
Group President, Current Asset Management Group, the
Company.............................................. November, 1994 Present
Senior Vice President and Chief Information Officer,
Information Technology, the Company.................. October, 1990 1994
Senior Vice President and Chief Information Officer,
Information Technology, Parent....................... May, 1991 1994
CHARLES G. SCHULTZ (50)
Executive Vice President, Vendor Finance Division, the
Company.............................................. September, 1995 Present
President, Financial Alliance Corporation............. January, 1994 1995
Executive Vice President, Sanwa Business Credit
Corporation.......................................... February, 1991 1994
DEBRA H. SNIDER (42)
General Counsel, the Company, Parent, International
Group and Holdings................................... October, 1995 Present
Executive Vice President and Secretary, the Company,
Parent, International Group and Holdings............. April, 1995 Present
Acting General Counsel, the Company, Parent,
International Group and Holdings..................... April, 1995 1995
Partner, Katten Muchin & Zavis........................ February, 1991 1995
ROBERT J. SZAMBELAN (41)
Senior Vice President and Chief Information and
Technology Officer, the Company and Parent........... May, 1995 Present
Associate Partner, Andersen Consulting................ September, 1994 1995
Senior Manager, Andersen Consulting................... January, 1991 1994
</TABLE>

Each of the officers and directors of the Company are elected at the annual
meeting for a term of one year or until their successors are duly elected and
qualified.

During 1996 and 1997, an Initial Statement of Beneficial Ownership of
Securities on Form 3 was filed by: (i) Tsutomu Hayano (elected May 23, 1996 as
Director) on May 31, 1996; (ii) Kathy J. Mankin (elected Group President on
May 16, 1996) on May 31, 1996; (iii) Hideo Nakajima (elected as Director on
May 23, 1996) on June 4, 1996; (iv) Kenichi Tomita (elected as Director on May
23, 1996) on July 23, 1996; (v) Yukihiko Chayama (elected as Director on July
29, 1996) on August 6, 1996; (vi) Robert J. Dennis (elected as Executive Vice
President on September 1, 1994) on January 15, 1997; and (vii) Charles G.
Schultz (elected as Executive Vice President on September 1, 1995) on January
15, 1997. No Forms 4 or Forms 5 were filed during the year. In all filings,
there were no reported holdings of the Registrant's equity securities.

57
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

The following information is furnished as to all plan and non-plan
compensation awarded to, earned by, or paid to the Chief Executive Officer of
the Company and the four next most highly compensated executive officers of the
Company (as determined at December 31, 1996) for services rendered in all
capacities to the Company and its subsidiaries during the years ended December
31, 1996, 1995 and 1994.

SUMMARY COMPENSATION TABLE (1)(2)

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------
NAME AND PRINCIPAL OTHER ANNUAL ALL OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(4) COMPENSATION($)(6)
- ------------------ ---- --------- -------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Richard J. Almeida..... 1996 475,000 (3) 282,019 4,750
(Chairman of the Board
and Chief 1995 318,375 225,000 141,758 4,620
Executive Officer) 1994 291,000 175,000 229,026 4,620
Mitchell F. Vernick.... 1996 310,000 (3) 144,047 4,746
(Vice Chairman) 1995 257,750 200,000 130,292(5) 4,620
1994 245,667 175,000 300,574(5) 4,620
Lauralee E. Martin..... 1996 270,000 (3) 109,843 4,318
(Chief Financial
Officer) 1995 254,417 175,000 104,896 4,620
1994 245,667 175,000 197,418 4,620
Dennis P. Lockhart..... 1996 270,000 (3) 109,674 4,390
(President,
International Group) 1995 254,417 150,000 104,896 4,620
1994 246,667 120,000 197,418 4,620
Michael J. Litwin...... 1996 255,000 (3) 104,106 4,748
(Senior Group
President) 1995 240,333 140,000 99,089 4,620
1994 232,584 115,000 186,904 4,620
</TABLE>
- --------

(1) All numbers are rounded to the nearest whole dollar.

(2) Certain executive officers of the Company whose compensation is included
above are employed and paid by the Parent. Pursuant to a management
agreement between the Company and the Parent, the Company reimburses the
Parent for their services.

(3) The cash bonus under the management incentive plan for services rendered to
the Company and its subsidiaries during the year ended December 31, 1996
was not calculable as of the date of this report. Such amounts will be
disclosed in the Company's annual report for the subsequent fiscal year in
the appropriate column for the year in which earned. Annual bonus amounts
are earned and accrued for the year shown and paid subsequent to the end of
such year.

(4) Accruals under the Company's Long Term Incentive Plans ("LTIPs") are earned
and recorded annually during the plan period based upon the Company's
performance during each applicable year. The Company revised the terms of
its LTIP commencing with the 1996-1998 LTIP. Under the terms of the former
LTIP, once determined, accruals were not affected by the Company's
performance in subsequent years. As a result, the Company reports annual
accruals under its LTIPs as other annual compensation as defined by the
SEC. During 1996, the Company had an LTIP that commenced on January 1, 1994
and terminated on December 31, 1996 ("1994-96 LTIP"). Accruals under the
1994-96 LTIP for calendar year 1996 are reflected in the Summary
Compensation Table.

Under the terms of the 1994-96 LTIP, payouts of all accruals are made after
the termination of the
1994-96 LTIP to officers who are active employees of the Company and
participants in the 1994-96 LTIP through its termination date (subject to
exceptions in the case of disability, death or retirement). In March, 1995,
payouts were made to the named executive officers of previously reported
accruals under an LTIP that commenced January 1, 1992 and terminated
December 31, 1994.

58
<PAGE>

Perquisites and other personal benefit amounts for each of the named
executive officers fall below the minimum level for disclosure and
therefore have been excluded.

(5) Mr. Vernick received the following special payments, attributable to the
performance of specific business units and investments in 1995 and 1994,
respectively: $22,500, and $103,156.

(6) Amounts reported reflect the Company's contribution made in the form of a
match on amounts deferred by the officer in the Company's Savings and
Profit Sharing Plan, which is qualified under Section 501(a) of the
Internal Revenue Code. This Plan is available to all employees who work at
least 900 hours per year. The Company makes matching contributions equal
to 50% of the employee's contribution provided, however, that the
Company's contribution will not exceed 2.5% of the employee's base salary.

The table below shows long term incentive plan awards for the 1996-1998 LTIP
to the Chief Executive Officer and the four next most highly compensated
executive officers of the Company as determined at December 31, 1996.

LONG TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR (1)

<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-BASED
PLANS
---------------------------
(A) (B) (C) (D) (E) (F)
PERFORMANCE OR
NUMBER OF OTHER PERIOD
SHARES, UNITS UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME OR OTHER RIGHTS OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ---- --------------- ---------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Almeida, Richard J...... 3,325 3 Years $249,375 $332,500 $565,250
Vernick, Mitchell F..... 1,700 3 Years $127,500 $170,000 $289,000
Martin, Lauralee E...... 1,350 3 Years $101,250 $135,000 $229,500
Lockhart, Dennis P...... 1,350 3 Years $101,250 $135,000 $229,500
Litwin, Michael J....... 1,275 3 Years $ 95,625 $127,500 $216,750
</TABLE>
- --------
(1) The long term incentive plan consists of performance units that are
granted at the beginning of a three year performance period. The value of
a performance share is based on the three year average return on equity
target for the Company. For the 1996-1998 LTIP, a total of 46,000 units
were allocated. If the Company achieves its target, this would create a
pool of $4,600,000. The information reported represents the long term
incentive plan beginning January 1, 1996 and ending December 31, 1998. In
the event an employee ceases to be an active employee prior to the end of
the Performance Period, no incentive compensation will be deemed to be
earned.

RETIREMENT AND OTHER DEFINED BENEFIT PLANS

The Company has a defined benefit retirement income plan (the "Retirement
Plan") for the benefit of its employees that is a qualified plan under Section
401 of the Internal Revenue Code. Substantially all domestic employees of the
Company who have one year of service, including executive officers and
directors of the Company, and also certain executive officers and directors of
International Group, participate in the Retirement Plan. Non-employee
directors are not eligible for retirement benefits. Under a defined benefit
plan, such as the Company's, contributions are not specifically allocated to
individual participants.

The Company adopted a Supplemental Executive Retirement Plan, effective
October 28, 1987 and amended and restated effective January 1, 1996, which
provides a benefit to all employees whose full benefit under the Retirement
Plan is reduced by 1) participation in the Company's Executive Deferred
Compensation Plan, and 2) limitations imposed by Sections 401(a)(17) and 415
of the Internal Revenue Code, as amended.

59
<PAGE>

The table below shows estimated annual retirement benefits for executives in
specified remuneration and service classifications.

ESTIMATED ANNUAL RETIREMENT BENEFITS

<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
-----------------------------------------
25 AND
FINAL AVERAGE PAY 5 10 15 20 OVER
- ----------------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
$200,000.............................. $26,000 $52,000 $78,000 $104,000 $130,000
225,000.............................. 29,250 58,500 87,750 117,000 146,250
250,000.............................. 32,500 65,000 97,500 130,000 162,500
275,000.............................. 35,750 71,500 107,250 143,000 178,750
300,000.............................. 39,000 78,000 117,000 156,000 195,000
400,000.............................. 52,000 104,000 156,000 208,000 260,000
450,000.............................. 58,500 117,000 175,500 234,000 292,500
500,000.............................. 65,000 130,000 195,000 260,000 325,000
600,000.............................. 78,000 156,000 234,000 312,000 390,000
</TABLE>

In general, remuneration covered by the Retirement Plan consists of the
annual base salary determined before any salary reduction contributions to the
Company's Savings and Profit Sharing Plan. The figures shown in the table
above include benefits payable under the Retirement Plan and SERP as described
above. However, the figures shown are prior to offsets for Social Security and
Company match benefits (under its Savings and Profit Sharing Plan). The
estimates assume that benefits commence at age 65 under a straight life
annuity form.

The number of years of credited service as of December 31, 1996, and the
actual average remuneration for their respective years of credited service
with the Company for those individuals listed on the Summary Compensation
Table are as follows: Richard J. Almeida, 9 years 5 months, $322,450; Mitchell
F. Vernick, 10 years 4.5 months, $251,550; Lauralee E. Martin, 10 years 4.5
months, $240,100; Dennis P. Lockhart, 9 years, $245,383; and Michael Litwin,
25 years 2 months, $231,273.

COMPENSATION OF DIRECTORS

Directors of the Company are not compensated for provision of services as
directors.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS

Richard J. Almeida has an employment contract with the Parent which became
effective as of November 13, 1995, the date on which he was elected Chairman,
and expires on December 31, 1997. The contract provides that if Mr. Almeida's
employment is terminated by the Parent without cause (as defined in the
contract), or if he resigns with cause (as specified in the contract), he will
be entitled to receive full salary through the later of December 31, 1997 or
the date fifteen months from the date of termination. In the event of a
termination under either of the situations described above, Mr. Almeida is
also entitled to receive a pro rata portion of his incentive plan payments and
will continue to be covered under certain benefit plans through the later of
December 31, 1997 or the date fifteen months from the date of termination.
Additionally, if Mr. Almeida and the Parent do not reach an agreement
regarding the terms of an extension or renewal of his contract, Mr. Almeida is
entitled to full salary until the later of December 31, 1997 or the date
fifteen months from the date the Parent informs him that it does not intend to
extend his employment. Under this circumstance, Mr. Almeida would also receive
incentive compensation until December 31, 1997 and coverage under certain
benefit plans during the period he receives salary continuation.

60
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS

Richard J. Almeida, Kenji Miyamoto and Hajime Maeda served as members of the
Compensation Committee of the Board of Directors of the Company throughout
calendar year 1996. Messrs. Almeida, Miyamoto and Maeda also served
concurrently as members of the Compensation Committees of the Parent,
International Group and Holdings.

Mr. Almeida served as Chairman and Chief Executive Officer of the Company
and its subsidiaries, International Group and Holdings. In addition, Mr.
Almeida served as the Chairman of the Board, Chief Executive Officer and
President of the Parent and as a member of the Compensation Committees of the
Parent, International Group, and Holdings. Messrs. Miyamoto and Maeda each
also served as executive officers of the Parent during their tenure as members
of the Compensation Committees.

As identified below, several directors of the Company also served as
executive officers of one or more of the other companies for whom Mr. Almeida
served as a member of the Compensation Committee of the Board of Directors:
Mr. Lockhart, Parent, International Group and Holdings; and Mr. Vernick,
International Group and Holdings.

No other relationships exist between the members of the Compensation
Committee of the Company, the Parent, International Group or Holdings and the
directors and executive officers of those companies.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

VOTING SECURITIES

The following table sets forth the ownership of all of the outstanding
common stock of the Company, as of February 1, 1997:

<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------
<S> <C> <C>
Heller International Corporation 100 Shares 100%
(Parent).................................
500 West Monroe Street
Chicago, Illinois 60661
</TABLE>

EQUITY SECURITIES

All of the outstanding common stock of the Parent is owned by Fuji Bank. As
of December 31, 1996, certain directors and executive officers of the Company
owned beneficially certain amounts of Fuji Bank's common stock, all as
indicated below.

<TABLE>
<CAPTION>
NAME AND AMOUNT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP
---------------- --------------------
<S> <C>
Richard J. Almeida.................................... 0
Hajime Maeda.......................................... 22,716 Shares
Mitchell F. Vernick................................... 0
Yukihiko Chayama...................................... 701 Shares
Tsutomu Hayano........................................ 2,315 Shares
Hidehiko Ide.......................................... 3,210 Shares
Mark Kessel........................................... 0
Michael J. Litwin..................................... 0
Dennis P. Lockhart.................................... 0
Lauralee E. Martin.................................... 0
Kenji Miyamoto........................................ 2,192 Shares
Hideo Nakajima........................................ 13,428 Shares
Osamu Ogura........................................... 0
Masahiro Sawada....................................... 2,205 Shares
Kenichi Tomita........................................ 620 Shares
-------------
Total Shares...................................... 47,387 Shares
=============
</TABLE>

61
<PAGE>

In addition, Messrs. Chayama, Hayano, Ide, Miyamoto, Nakajima, Ogura,
Sawada, and Tomita participate in a Fuji Bank employee stock purchase plan
and, as of December 31, 1996, beneficially held, in aggregate, approximately
39,887 shares.

The aggregate number of shares of Fuji Bank common stock that are
beneficially owned by the Company's directors and officers, considered as a
group, including those shares held in the Fuji Bank employee stock purchase
plan, does not exceed 1% of the outstanding shares of such stock.

The following table sets forth the ownership by all directors, nominees and
executive officers, of all outstanding equity securities of the Company, and
its subsidiaries, as of February 1, 1997:

<TABLE>
<CAPTION>
AMOUNT OF
NAME OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
-------------- --------------------------- ------------ --------
<S> <C> <C> <C>
HELLER FINANCIAL, INC.
Cumulative Convertible
Preferred Stock, Series Heller International
D ..................... Corporation (Parent) 1,000 Shares 100%
8 1/8% Cumulative
Perpetual Senior
Preferred Stock, Series
A...................... Richard J. Almeida 0 0
Hajime Maeda 0 0
Yukihiko Chayama 0 0
Tsutomu Hayano 0 0
Hidehiko Ide 0 0
Mark Kessel 0 0
Michael J. Litwin 0 0
Dennis P. Lockhart 0 0
Lauralee E. Martin 0 0
Kenji Miyamoto 0 0
Osamu Ogura 0 0
Masahiro Sawada 0 0
Kenichi Tomita 0 0
All Directors and Executive
Officers as a Group 0 0
</TABLE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

KEEP WELL AGREEMENT WITH FUJI BANK

The Company entered into a Keep Well Agreement (the "Agreement") with Fuji
Bank on April 23, 1983 in order to assist the Company in maintaining its
credit rating. The Agreement was amended and supplemented on January 26, 1984,
in connection with the consummation of the purchase of the Company by Fuji
Bank and has been amended since that date from time to time. Most recently, on
May 3, 1995, the Company and Fuji Bank agreed to extend the term of the Keep
Well Agreement for an additional two years from December 31, 2000 to December
31, 2002.

The Agreement provides that Fuji Bank will maintain the Company's net worth
in an amount equal to $500 million. Accordingly, if the Company should
determine, at the close of any month, that its net worth is less than $500
million, then Fuji Bank will purchase, or cause one of its subsidiaries to
purchase, shares of the Company's NW Preferred Stock, Class B (No Par Value)
("NW Preferred Stock") in an amount necessary to increase the Company's net
worth to $500 million. If and when issued, dividends will be paid quarterly on
the NW Preferred Stock at a rate per annum equal to 1% over the three-month
London Inter-bank Offered Rate. Such dividends will not be paid during a
default in the payment of principal or interest on any of the outstanding
indebtedness for money borrowed by the Company. Subject to certain conditions,
the NW Preferred Stock will be redeemable at the option of the holder within a
specified period of time after the end of a calendar quarter, in an aggregate
amount not greater than the excess of the net worth of the Company as of the
end of such calendar quarter over $500 million.

62
<PAGE>

The Agreement further provides that if the Company should lack sufficient
cash, other liquid assets or credit facilities to meet its payment obligations
on its commercial paper, then Fuji Bank will lend the Company up to $500
million (the "Liquidity Commitment"), payable on demand, which the Company may
use only for the purpose of meeting such payment obligations. Any such loan by
Fuji Bank to the Company (a "Liquidity Advance") will bear interest at a
fluctuating interest rate per annum equal to the announced prime commercial
lending rate of Morgan Guaranty Trust Company of New York plus .25% per annum.
Each Liquidity Advance will be repayable on demand at any time after the
business day following the 29th day after such Liquidity Advance was made. No
repayment of the Liquidity Advance will be made during a period of default in
the payment of the Company's senior indebtedness for borrowed money.

No Liquidity Advances or purchases of NW Preferred Stock have been made by
Fuji Bank under the Agreement; other infusions of capital in the Company have
been made by the Parent, the last one of which occurred in 1992.

Under the Agreement, the Company has covenanted to maintain, and Fuji Bank
has undertaken to assure that the Company will maintain, unused short-term
lines of credit and committed credit facilities in an amount approximately
equal to 75% of the amount of its commercial paper obligations from time to
time outstanding. In addition, under the Agreement, neither Fuji Bank nor any
of its subsidiaries can sell, pledge or otherwise dispose of any shares of the
Company's Common Stock or permit the Company to issue shares of its Common
Stock except to Fuji Bank or a Fuji Bank affiliate.

Neither Fuji Bank nor the Company may terminate the Agreement for any reason
prior to December 31, 2002. After December 31, 2002 either Fuji Bank or the
Company may terminate the Agreement upon 30 business days prior written
notice. So long as the 8 1/8 Cumulative Perpetual Senior Preferred Stock,
Series A ("Perpetual Preferred Stock") is outstanding and held by third
parties other than Fuji Bank, the Agreement may not be terminated by either
party unless the Company has received written certifications from Moody's
Investors Services, Inc. and Standard & Poor's Corporation that upon
termination the Perpetual Preferred Stock will be rated by them no lower than
a3 and A-, respectively. For these purposes the Perpetual Preferred Stock will
no longer be deemed outstanding at such time as an effective notice of
redemption of all of the Perpetual Preferred Stock shall have been given by
the Company and funds sufficient to effectuate such redemption shall have been
deposited with the party designated for such purpose in the notice. In
addition, any termination of the Keep Well Agreement by the Company must be
consented to by Fuji Bank. Any such termination will not relieve the Company
of its obligations in respect of any NW Preferred Stock outstanding on the
date of termination or the dividends thereon, any amounts owed in respect of
Liquidity Advances on the date of termination or the unpaid principal or
interest on those Liquidity Advances or Fuji Bank's fee relating to the
Liquidity Commitment. Any such termination will not adversely affect the
Company's commercial paper obligations outstanding on the date of termination.
The Agreement can be modified or amended by a written agreement of Fuji Bank
and the Company. However, no such modification or amendment may change the
prohibition against termination before December 31, 2002 or adversely affect
the Company's then-outstanding commercial paper obligations.

Under the Agreement, the Company's commercial paper obligations and any
other debt instruments are solely the obligations of the Company. The
Agreement is not a guarantee by Fuji Bank of the payment of the Company's
commercial paper obligations, indebtedness, liabilities or obligations of any
kind.

TAX ALLOCATION AGREEMENT

Under the terms of the tax allocation agreement between the Parent and the
Company, as amended, each company covered by the agreement calculates its
current and deferred income taxes based on its separate company taxable income
or loss, utilizing separate company net operating losses, tax credits, capital
losses and deferred tax assets or liabilities. Under the terms of other tax
allocation agreements with certain of the Company's subsidiaries, the Company
and the Parent, in calculating their current income taxes, can utilize the
taxable income or loss of the subsidiaries.

63
<PAGE>

CERTAIN TRANSACTIONS WITH FUJI BANK AND WITH THE PARENT AND ITS SUBSIDIARIES

Several financial, administrative or other service arrangements exist between
the Company and Fuji Bank, the Parent or related affiliates. In management's
opinion, the terms of these arrangements are similar to those the Company would
have been able to obtain in like agreements with unaffiliated entities in arms-
length transactions.

Services Provided by Fuji Bank and the Parent for the Company. Certain
employees of Fuji Bank and the Parent perform managerial, administrative and
other related functions for the Company. The Company compensates Fuji Bank and
the Parent for the use of such individuals' services at a rate which reflects
current costs to Fuji Bank and the Parent. The amounts paid to Fuji Bank and
the Parent for these services in 1996 were $2 million and $60 million,
respectively. Additionally, certain subsidiaries of Fuji Bank periodically
serve as managers for various offerings of the Company's debt securities and
may act as registrar and paying agent for certain debt issuances by the
Company.

Services Provided by the Company for Affiliates. The Company performs
services for its affiliates and charges them for the cost of the work
performed. The Company may also guarantee the obligations of its clients or the
clients of certain joint ventures under letters of credit issued by financial
institutions, some of which are affiliates of the Company. Additionally, the
Company guarantees payment under a deferred compensation arrangement between
the Parent and certain of its employees. The Company has agreements with the
Parent and certain other subsidiaries of the Parent which provide for the
Company to receive an annual negotiated fee for servicing assets which have
been sold by the Company to the Parent and these affiliates. The Company
continues to service these assets and all other direct costs and expenses,
including any additional advances made after the date of the agreement, are
borne by the subsidiaries of the Parent. The amount of fees for servicing these
assets in 1996 was approximately $1 million.

Heller Capital Markets Group, Inc. ("CMG"), a wholly-owned subsidiary of the
Company, acts as placement agent for the sale of commercial paper issued by the
Parent. CMG receives compensation, based upon the face amount of the commercial
paper notes sold. For the year ending December 31, 1996, the Parent paid less
than $1 million to CMG as compensation pursuant to this arrangement.

Intercompany Receivables, Payables, Transactions and Financial Instruments.
At December 31, 1996, the net amount due from affiliates was $20 million. The
amounts are comprised principally of interest bearing demand notes representing
amounts due to the Company arising from the interest rate swap agreement with
the Parent, advances, administrative fees and costs charged to other
subsidiaries of the Parent. The notes bear interest at rates which approximate
the average rates on the Company's commercial paper obligations or short-term
bank borrowing rates outstanding during the period.

Fuji Bank and one of its subsidiaries provided uncommitted lines of credit to
consolidated international subsidiaries totaling approximately $15 million at
December 31, 1996. Borrowings under these facilities totaled $4 million at
December 31, 1996. In addition, Fuji Bank provides uncommitted lines of credit
to certain international joint ventures.

The Company is a party to a $200 million interest rate swap agreement with
the Parent, which expires December 15, 2000. The purpose of this agreement is
to manage the Company's exposure to interest rate fluctuations. Under this
agreement, the Company pays interest to the Parent at a variable rate based on
the commercial paper rate published by the Board of Governors of the Federal
Reserve System and the Parent pays interest to the Company at a fixed rate of
5.57%. This agreement had the effect of increasing the Company's interest
expense by less than $1 million in 1996.

64
<PAGE>

On February 15, 1985, the Company issued to the Parent 1,000 shares of
previously subscribed Cumulative Convertible Preferred Stock, Series D (No Par
Value) ("Convertible Preferred Stock"), which has a dividend yield established
quarterly at the rate of 1/2% under the announced prime commercial lending
rate of Morgan Guaranty Trust Company of New York, cumulative from March 30,
1984 and payable quarterly commencing on March 31, 1989. During 1996, the
Company declared and paid $2 million of dividends on the Convertible Preferred
Stock. The Convertible Preferred Stock is convertible into Common Stock of the
Company at the conversion price of one share of Common Stock for each 200
shares of Convertible Preferred Stock. Subject to certain conditions, the
Convertible Preferred Stock is redeemable, in whole or in part, at any time at
the option of the Company at a redemption price equal to the price paid for
such stock plus accumulated dividends. Upon voluntary or involuntary
liquidation, the holder of the Convertible Preferred Stock is entitled to be
paid an amount equal to the price paid for each share plus accumulated
dividends.

CERTAIN OTHER RELATIONSHIPS

Mr. Kessel, a director of the Company and Parent, is a partner of the law
firm of Shearman & Sterling, which from time to time acts as counsel in
certain matters for Fuji Bank, the Company and the Parent.

In August, 1996, the Company replaced its $500 million factored accounts
receivable sales program with a new facility. This new facility allows the
Company to sell an undivided interest of up to $550 million in a designated
pool of its factored accounts receivable to five bank-supported conduits. The
underlying liquidity support for the conduits is provided by unaffiliated
entities. One of the conduits has an operating agreement with Fuji Bank.

65
<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents Filed as Part of This Report:

1. Financial Statements (All Financial Statements listed below are those
of the Company and its consolidated subsidiaries):

Report of Independent Public Accountants -- Arthur Andersen LLP

Consolidated Balance Sheets--December 31, 1996 and 1995

Consolidated Statements of Income for the Years Ended December 31,
1996, 1995 and 1994

Consolidated Statements of Cash Flows for the Years Ended December
31, 1996, 1995 and 1994

Consolidated Statements of Changes in Stockholders' Equity for the
Years Ended December 31, 1996, 1995 and 1994

Notes to Consolidated Financial Statements

2. Financial Statement Schedules:

Schedules are omitted because they are not applicable or because the
required information appears in the financial statements or the
notes thereto.

3. Exhibits:

<C> <S> <C>
(3)(a) Amended and Restated Certificate of Incorporation of the
Company as amended on September 2, 1992 [Incorporated by
reference to Exhibits 4(a) and 4(b) to the Company's Reg-
istration Statement on Form S-3 filed September 4, 1992
(File No. 33-51692)]
(3)(b) By-laws of the Company, as amended on June 17, 1996 [In-
corporated by reference to Exhibit 3(ii) to the Company's
Quarterly Report on Form 10-Q for the Quarter Ended June
30, 1996 (File No. 1-6157)]
(4)(a) Certificate of Designation, Preferences and Rights of Cu-
mulative Perpetual Senior Preferred Stock, Series A, filed
September 16, 1992 [Incorporated by reference to Exhibit
4(a) to the Company's Annual Report on Form 10-K for the
Fiscal Year Ended December 31, 1992 (File No. 1-6157)]
(4)(b) Heller Financial, Inc. Standard Multiple-Series Indenture
Provisions dated February 5, 1987 [Incorporated by refer-
ence to Exhibit (4)(a) to the Company's Registration
Statement on Form S-3 dated February 5, 1987 (File No. 33-
11757)]
(4)(c) Form of Indenture dated as of February 5, 1987 between the
Company and The First National Bank of Chicago, Trustee,
with respect to Senior Securities [Incorporated by refer-
ence to Exhibit (4)(b) to the Company's Registration
Statement on Form S-3 dated February 5, 1987 (File No. 33-
11757)]
(4)(d) Form of Indenture dated as of February 5, 1987 between the
Company and Chemical Bank, Trustee, with respect to Senior
Securities [Incorporated by reference to Exhibit (4)(c) to
the Company's Registration Statement on Form S-3 dated
February 5, 1987 (File No. 33-11757)]
(4)(e) First Supplemental Indenture dated as of December 1, 1989
to the Indenture dated as of February 5, 1987 between
Chemical Bank, as Trustee and the Company [Incorporated by
reference to Exhibit (4)(e) to the Company's Annual Report
on Form 10-K for the Fiscal Year Ended December 31, 1994
(File No. 1-6157)]
</TABLE>

66
<PAGE>

<C> <S> <C>
(4)(f) Form of Indenture dated as of September 30, 1991 between
the Company and The Bank of New York, Trustee, with re-
spect to Senior Securities. [Incorporated by reference to
Exhibit (4)(h) to the Company's Registration Statement on
Form S-3 dated September 30, 1991 (File No. 33-43020)]
(4)(g) Form of Indenture dated as of September 30, 1991 between
the Company and Chemical Bank, Trustee, with respect to
the Subordinated Securities [Incorporated by reference to
Exhibit (4)(h) to the Company's Registration Statement on
Form S-3 dated September 30, 1991 (File No. 33-43020)]
(4)(h) Form of Indenture dated as of September 1, 1995 between
the Company and Fleet National Bank formerly known as
Shawmut Bank Connecticut, National Association, as Trust-
ee, with respect to Senior Securities [Incorporated by
reference to Exhibit (4)(b) to the Company's Registration
Statement on Form S-3 dated September 8, 1995 (File No.
33-62479)]
(4)(i) Form of Indenture dated as of September 1, 1995 between
the Company and Fleet National Bank f/k/a Shawmut Bank
Connecticut, National Association, as Trustee, with re-
spect to Subordinated Securities [Incorporated by refer-
ence to Exhibit (4)(c) to the Company's Registration
Statement on Form S-3 dated September 8, 1995 (File No.
33-62479)]
(4)(j) Form of Indenture dated as of September 1, 1995 between
the Company and Fleet National Bank f/k/a Shawmut Bank
Connecticut, National Association, as Trustee, with re-
spect to Junior Subordinated Securities [Incorporated by
reference to Exhibit (4)(d) to the Company's Registration
Statement on Form S-3 dated September 8, 1995 (File No.
33-62479)]
(4)(k) First Supplemental Indenture with respect to Senior Secu-
rities between Heller Financial, Inc. and Fleet National
Bank f/k/a Shawmut Bank Connecticut, National Association
("Shawmut") dated September 29, 1995 [Incorporated by ref-
erence to Exhibit (4)(a) to the Company's Current Report
on Form 8-K dated October 3, 1995 (File No. 1-6157)]
(4)(l) First Supplemental Indenture with respect to Junior Subor-
dinated Securities between Heller Financial, Inc. and
Fleet National Bank f/k/a Shawmut Bank Connecticut, Na-
tional Association dated September 29, 1995 [Incorporated
by reference to Exhibit (4)(b) to the Company's Current
Report on Form 8-K dated October 3, 1995 (File No. 1-
6157)]
(4)(m) First Supplemental Indenture dated October 13, 1995 be-
tween Heller Financial, Inc. and Fleet National Bank f/k/a
Shawmut Bank Connecticut, National Association with re-
spect to Senior Securities [Incorporated by reference to
Exhibit 4(b)(i) to the Company's Current Report on Form 8-
K filed October 17, 1995 (File No. 1-6157)]
(4)(n) First Supplemental Indenture dated October 13, 1995 be-
tween Heller Financial, Inc. and Fleet National Bank f/k/a
Shawmut Bank Connecticut, National Association with re-
spect to Subordinated Securities [Incorporated by refer-
ence to Exhibit 4(c)(i) to the Company's Current Report on
Form 8-K filed October 17, 1995 (File No. 1-6157)]
(4)(o) First Supplemental Indenture dated October 13, 1995 be-
tween Heller Financial, Inc. and Fleet National Bank f/k/a
Shawmut Bank Connecticut, National Association with re-
spect to Junior Subordinated Securities [Incorporated by
reference to Exhibit 4(d)(i) to the Company's Current Re-
port on Form 8-K filed October 17, 1995 (File No. 1-6157)]
(10)(a) Amended and Restated Keep Well Agreement between Fuji Bank
and the Company dated as of August 28, 1992 (including, as
Appendix A, the Keep Well Agreement dated as of April 23,
1983 between Fuji Bank and the Company) [Incorporated by
reference to Exhibit 28(a) to the Company's Registration
Statement on Form S-3 filed September 4, 1992 (File No.
33-51692)]
</TABLE>

67
<PAGE>

<C> <S> <C>
(10)(b) First Amendment to Amended and Restated Keep Well Agree-
ment between Fuji Bank and the Company dated as of May 3,
1995 [Incorporated by reference to Exhibit 10 to the
Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1995 (File No. 1-6157)]
(10)(c) Nonrecourse Participation Agreement dated September 30,
1985 between the Company and Heller Interstate, Inc. [In-
corporated by reference to Exhibit 10(b) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended De-
cember 31, 1992 (File No. 1-6157)]
(10)(d) Service Agreement dated January 1, 1985 between the Parent
and Fuji Bank [Incorporated by reference to Exhibit
(10)(e) to the Company's Annual Report on Form 10-K for
the Fiscal Year Ended December 31, 1992 (File No. 1-6157)]
*(10)(e) Supplemental Executive Retirement Benefit Plan, amended
and restated effective January 1, 1996.
(10)(f) Management Agreement dated as of January 1, 1991 between
Heller International Corporation and Heller Financial,
Inc. [Incorporated by reference to Exhibit (10)(m) to the
Company's Quarterly Report on Form 10-Q for the period
ending March 31, 1991 (File No. 1-6157)]
*(10)(g) Agreement for the Allocation of Federal, State and Foreign
Income Tax Liability and Benefits Among Heller Interna-
tional Corporation and its Subsidiaries, effective as of
July 1, 1996
(10)(h) Heller Financial Inc., Capital Markets Group/Merchant
Banking Division Equity Investment Compensation Plan ef-
fective August 1, 1988 and letter amendment dated April
18, 1989 [Incorporated by reference to Exhibit 10(k) to
the Company's Annual Report on Form 10-K for the Fiscal
Year Ended December 31, 1992 (File No. 1-6157)]
(10)(i) Summary of Special Long Term Incentive Plan [Incorporated
by reference to Exhibit (10)(l) to the Company's Annual
Report on Form 10-K for the Fiscal Year Ended December 31,
1993 (File No. 1-6157)]
(10)(j) Long Term Incentive Plan, effective January 1, 1994 [In-
corporated by reference to Exhibit 10(n) to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended De-
cember 31, 1994 (File No. 1-6157)]
(10)(k) Executive Deferred Compensation Plan, dated January 1,
1994 as amended on October 1, 1994 [Incorporated by refer-
ence to Exhibit 10(o) to the Company's Annual Report on
Form 10-K for the Fiscal Year Ended December 31, 1994
(File No. 1-6157)]
(10)(l) Second Amendment to the Executive Deferred Compensation
Plan, dated December 29, 1995 [Incorporated by reference
to Exhibit 10(n) to the Company's Annual Report on Form
10-K for the Fiscal Year Ended December 31, 1995 (File No.
1-6157)]
*(10)(m) Third Amendment to the Executive Deferred Compensation
Plan, dated January 1, 1996
*(10)(n) Fourth Amendment to the Executive Deferred Compensation
Plan, dated November 26, 1996
(10)(o) Cross Guaranty for the Executive Deferred Compensation
Plan [Incorporated by reference to Exhibit 10(p) to the
Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 31, 1994 (File No. 1-6157)]
(10)(p) Management Incentive Plan (the Parent) (Effective January
1, 1987, Revised January 1, 1989)[Incorporated by refer-
ence to Exhibit 10(m) to the Company's Annual Report on
Form 10-K for the Fiscal Year Ended December 31, 1995
(File No. 1-6157)]
*(10)(q) Savings and Profit Sharing Plan, amended and restated ef-
fective as of January 1, 1989
</TABLE>

68
<PAGE>

<C> <S> <C>
*(10)(r) First Amendment to Savings and Profit Sharing Plan, dated
December 23, 1993
*(10)(s) Second Amendment to Savings and Profit Sharing Plan, dated
December 20, 1994
*(10)(t) Third Amendment to Savings and Profit Sharing Plan, dated
September 9, 1996
(10)(u) Employment Letter Agreement, dated February 1, 1996 be-
tween the Parent and Richard J. Almeida [Incorporated by
reference to Exhibit 10(o) to the Company's Annual Report
on Form 10-K for the Fiscal Year Ended December 31, 1995
(File No. 1-6157)]
*(12) Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends
*(21) Subsidiaries of the Registrant
*(23) Consent of Independent Public Accountants
*(24) Powers of Attorney
*(27) Financial Data Schedule
</TABLE>
- --------
*Filed herewith.

Instruments defining the rights of holders of certain issues of long-
term debt of the Company have not been filed as exhibits to this Report
because the authorized principal amount of any one of such issues does
not exceed 10% of the total assets of the Company. In accordance with
paragraph (b)(4)(iii) of Item 601 of Regulation S-K, the Company hereby
agrees to furnish to the Securities and Exchange Commission, upon
request, a copy of each instrument that defines the rights of holders
of the Company's long-term debt.

(b) Current Reports on Form 8-K:

During the fourth quarter of 1996, the Company filed a Current Report
on Form 8-K dated October 23, 1996.

On January 28, 1997, the Company filed with the U.S. Securities and
Exchange Commission a Current Report on Form 8-K, dated January 27,
1997, to announce the Company's earnings for the year ended December
31, 1996.

69
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

Heller Financial, Inc.

Richard J. Almeida
By:__________________________________
Richard J. Almeida
Chairman and Chief Executive
Officer

Dated: February 11, 1997

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
Richard J. Almeida
By: _________________________________
Richard J. Almeida
Chairman, Chief Executive Officer and Director

*
By: _________________________________
Hajime Maeda
Director

*
By: _________________________________
Yukihiko Chayama
Director

*
By: _________________________________
Hidehiko Ide
Director

*
By: _________________________________
Tsutomu Hayano
Director

*
By: _________________________________
Mark Kessel
Director

*
By: _________________________________
Michael J. Litwin
Director

*
By: _________________________________
Dennis P. Lockhart
Director

Dated: February 11, 1997

Lauralee E. Martin
By: _________________________________
Lauralee E. Martin
Executive Vice President, Chief Financial Officer and Director

*
By: _________________________________
Kenji Miyamoto
Director

*
By: _________________________________
Hideo Nakajima
Director

*
By: _________________________________
Osamu Ogura
Director

*
By: _________________________________
Masahiro Sawada
Director

*
By: _________________________________
Kenichi Tomita
Director

Lawrence G. Hund
By: _________________________________
Lawrence G. Hund
Senior Vice President, Controller and Chief Accounting Officer

D. H. Snider
*By: ________________________________
Debra H. Snider
Attorney-in-Fact

<PAGE>

Exhibit 10(e)

HELLER FINANCIAL, INC.
----------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------

(As Amended and Restated Effective January 1, 1996)

McDermott, Will & Emery
Chicago
<PAGE>

TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>

PAGE
----
<S> <C>
SECTION 1 1
Introduction 1
Plan 1
Effective Date 1
Employers 1
Purpose 2

SECTION 2 2
Participation and Supplemental Benefits 2
Eligibility 2
Supplemental Benefits 2
Survivor's Benefits 4
Payment of Benefits 4
Payment Modifications 5
Benefits Provided by Employers 5

SECTION 3 5
Other Employment 5

SECTION 4 5
General 5
Administration 5
Beneficiary 6
Interests Not Transferable 6
Facility of Payment 6
Gender and Number 6
Controlling Law 7
Successors 7
Continued Employment 7

SECTION 5 7
Amendment and Termination 7
</TABLE>

-i-
<PAGE>

HELLER FINANCIAL, INC.
----------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------

(As Amended and Restated Effective January 1, 1996)

SECTION 1
---------
Introduction
------------

1.1. Plan. The HELLER FINANCIAL, INC. SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN (the "Plan") is maintained by HELLER FINANCIAL, INC., (the
"Company") for the benefit of eligible employees of the Company and those
subsidiaries and affiliates of the Company which are designated by the Company
as participating employers.

1.2. Effective Date. The Plan was established effective October 28,
1987. The effective date of the amendment and restatement of the Plan as set
forth herein is January 1, 1996.

1.3. Employers. The Company and each other Heller Controlled Group
Member which has been designated by the Company as a participating employer is
referred to herein as an "Employer" and may be referred to collectively as the
"Employers." A "Heller Controlled Group Member" means the Company and any
affiliated or related Company which is a member of a controlled group of
corporations (within the meaning of Section 1563(a) of the Internal Revenue Code
of 1986, as amended ("Code") determined without regard to Sections 1563(a)(4)
and 1563(e)(3)(C)) which includes the Company or
<PAGE>

any trade or business (whether or not incorporated), which is under the common
control with the Company (within the meaning of Section 414(c) of the Code).

1.4. Purpose. The Plan has been established to supplement the
retirement benefits provided by the Heller Financial, Inc. Retirement Plan (the
"Retirement Plan"). The Plan is intended to constitute an unfunded deferred
compensation plan for a select group of management or highly compensated
employees within the meaning of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").

SECTION 2
---------
Participation and Supplemental Benefits
---------------------------------------

2.1. Eligibility. Each employee of an Employer who participates in
the Retirement Plan will become a Participant in this Plan on the earlier of the
following to occur:

(a) the date that the benefits the employee would otherwise accrue in the
Retirement Plan are limited by operation of Code Sections 415 or
401(a)(17),

(b) the date that the benefits the employee would otherwise accrue in the
Retirement Plan are limited because the employee's Supplemental
Compensation (as defined in subsection 2.2 below) is not considered in
determining benefits under the Retirement Plan.

2.2. Supplemental Benefits. At a Participant's retirement or earlier
termination of employment with all Heller Controlled Group Members, the
Participant shall be entitled to the "Supplemental Benefit" that has accrued for
him under the Plan. A

-2-
<PAGE>

Participant's accrued Supplemental Benefit as of any date shall be the full
amount of retirement benefit produced for the Participant by the pension formula
applicable to the Participant under the Retirement Plan as of such date (the
"Full Benefit") less the maximum amount of retirement benefit that can be
provided under the Retirement Plan after application of the limitations imposed
by Sections 401(a)(17) and 415 of the Code. In determining the Participant's
Full Benefit, the Participant's Supplemental Compensation, if any, shall be
treated as compensation considered under the Retirement Plan. A Participant's
"Supplemental Compensation" for a plan year shall consist of base salary
deferred under any deferred compensation plan maintained by the Employers, if
any, provided any such amount of deferred compensation shall be considered
compensation in the plan year deferred. In determining a Participant's Full
Benefit under this subsection 2.2, only service with an Employer while it is a
Heller Controlled Group Member shall be considered; provided, however, that
service with an Employer prior to the date the Employer first became a Heller
Controlled Group Member and service with a predecessor employer shall be
considered only if such service formed the basis of a benefit under an unfunded,
non-qualified retirement plan maintained by such Employer prior to the date it
first became a Heller Controlled Group Member or by such predecessor employer (a
"prior plan") and the liability for benefits under that prior plan were assumed
by the Company pursuant to the terms of an asset or stock purchase agreement. A
Participant's accrued Supplemental Benefit shall become nonforfeitable on the
same basis and at the same time as such Participant's accrued benefit under the
Retirement Plan becomes nonforfeitable.

-3-
<PAGE>

2.3. Survivor's Benefits. If a Participant dies leaving a survivor
entitled to a benefit under the Retirement Plan the benefits payable to such
survivor hereunder shall be based upon the difference between:

(a) the full amount of retirement benefit for the Participant as
determined under subsection 2.2 above multiplied by the percentage of
such benefit payable to the survivor, less

(b) the amount of survivor's benefit being provided under the
Retirement Plan.

In no event will any payments be made hereunder to or on account of a survivor
after the month in which the survivor's death occurs.

2.4. Payment of Benefits. Subject to the further provisions of this
Plan, a Participant's Supplemental Benefit shall be payable on a monthly basis
to or on account of the Participant beginning at the same time, in the same
manner, over the same period and under the same terms and conditions as the
Participant's benefits in the Retirement Plan are paid. Notwithstanding the
foregoing, if the present value of a Participant's Supplemental Benefit
determined under this subsection 2.4 is $10,000 or less, the Administrator shall
have the discretion to pay the present value of such benefit to the Participant,
(or in the event of the Participant's death, to the Participant's survivor) in a
lump sum. The present value of a Participant's Supplemental Benefit under
subsection 2.2 shall be determined by using the interest, mortality and other
actuarial assumptions used at the time under the Retirement Plan for purposes of
determining an actuarially equivalent lump sum.

-4-
<PAGE>

2.5. Payment Modifications. Regardless of any other provisions of
this Plan, the period during which any monthly installments hereunder are to be
paid to a Participant or to the Participant's survivor may be modified by the
Company after consulting with the person or persons to whom such monthly
installments are to be paid.

2.6. Benefits Provided by Employers. Benefits payable under this
Plan to a Participant or the Participant's survivor shall be paid directly by
the Participant's Employer. No Employer shall be required to segregate any
assets to be applied for the payment of benefits under this Plan.

SECTION 3
---------
Other Employment
----------------

A Participant or survivor receiving Supplemental Benefits hereunder
will continue to be entitled thereto regardless of other employment or self-
employment.

SECTION 4
---------
General
-------

4.1. Administration. The Plan will be administered by the Company or
its designee (the "Administrator") which shall have the authority to interpret
the Plan and issue such regulations as it deems appropriate to administer the
Plan. The Administrator shall

-5-
<PAGE>

have the duty and responsibility of maintaining records, making the requisite
calculations and disbursing the payments hereunder. The Administrator shall
afford any Participant or survivor a reasonable opportunity for full and fair
review of a denied claim for benefits in accordance with ERISA. The
Administrator's interpretations, determinations, regulations and calculations
shall be final and binding on all persons and parties concerned.

4.2. Beneficiary. Each Participant under this Plan, by writing filed
with the Administrator, may designate such person or persons as the Participant
shall select as the Participant's "beneficiary" to receive any Supplemental
Benefits which may be payable at the Participant's death. In the absence of any
such designation, any such benefits shall be paid to the Participant's estate.

4.3. Interests Not Transferable. Except as to any withholding of tax
under the laws of the United States or any State, the interest of any
Participant, the Participant's beneficiary or minor children under the Plan is
not subject to the claims of creditors and may not be voluntarily or
involuntarily sold, transferred, assigned, alienated or encumbered.

4.4. Facility of Payment. Any amounts payable hereunder to any
person under legal disability or who, in the judgment of the Administrator, is
unable to properly manage their financial affairs may be paid to the legal
representative of such person or

-6-
<PAGE>

may be applied for the benefit of such person in any manner which the
Administrator may select.

4.5. Gender and Number. Where the context admits, words in the
masculine gender shall include the feminine gender, the plural shall include the
singular, and the singular shall include the plural.

4.6. Controlling Law. To the extent not superseded by the laws of
the United States, the laws of Illinois shall be controlling in all matters
relating to the Plan.

4.7. Successors. This Plan is binding on each Employer and will
inure to the benefit of any successor of an Employer, whether by way of
purchase, merger, consolidation or otherwise.

4.8. Continued Employment. The establishment of this Plan shall not
be construed to give any Participant the right to be retained in service of any
Employer.

SECTION 5
---------
Amendment and Termination
-------------------------

While the Employers expect to continue the Plan indefinitely, the
right to amend or terminate the Plan by action of the Board of Directors of the
Company is hereby

-7-
<PAGE>

reserved, provided that in no event shall any Participant's Supplemental Benefit
accrued to the date of such amendment or termination be reduced or modified by
such action.

IN WITNESS WHEREOF, Heller Financial, Inc. has caused this amendment
and restatement to be signed by a duly authorized officer of Heller Financial,
Inc. this 26th day of November, 1996.

HELLER FINANCIAL, INC.

By: /s/ Challis M. Lowe
-----------------------------
Its: Executive Vice President
-----------------------------

Attest: /s/ David M. Sherbin
-------------------------
By: Asst. Sec.

-8-

<PAGE>

Exhibit 10(g)

AGREEMENT FOR THE ALLOCATION OF FEDERAL, STATE
AND FOREIGN INCOME TAX LIABILITY AND BENEFITS AMONG
HELLER INTERNATIONAL CORPORATION AND ITS SUBSIDIARIES
-----------------------------------------------------

This Agreement, effective as of July 1, 1996, is made by and between Heller
International Corporation and its affiliates ("HIC Group"). Each affiliate and
its member designation ("Member") is set forth in Exhibit I.

1. GENERAL PURPOSE
---------------

Each of the Members agrees that it shall adhere to the following policy with
respect to the annual allocation of the consolidated U.S. federal income,
aggregate state income and foreign tax liabilities or refunds of the Group, and
in the calculation of deferred income tax liability or assets under Statement of
Financial Accounting Standards ("SFAS") No. 109 (Accounting for Income Taxes).

2. DEFINITION
----------

For purposes of this Agreement, the term "tax provision and/or benefit" means
(1) the tax provision or benefit reported as such in the financial statements of
the applicable Member plus or minus (2) any additional net tax benefit or
expense reported or otherwise reflected elsewhere in such financial statements.

3. CALCULATION OF TAX
------------------

I. HIC Group

The HIC Group is comprised of two Members: the HFI Member and the Non-HFI
Member. For the HIC Group, the total current and deferred tax provision and/or
benefit is equal to the sum of the total current and deferred tax provision
and/or benefit based on the filing of the following federal and state income tax
returns and foreign tax provision:

A. Heller International Corporation and Consolidated Subsidiaries tax
return; and

B. Heller International Group, Inc. and Consolidated Subsidiaries tax
return.
<PAGE>

II. HFI Member

The total current and deferred tax provision and/or benefit of the HFI Member is
equal to the sum of the total current and deferred tax provision and/or benefit
of:

A. Heller Financial, Inc. and its 100%-owned subsidiaries ("HFI
Component"); and

B. Heller International Group, Inc. and its consolidated subsidiaries
("HIG Component").

III. Non-HFI Member

The total current and deferred tax provision and/or benefit of the Non-HFI
Member is equal to the total current and deferred tax provision and/or benefit
of the HIC Group less the total current and deferred tax provision and/or
benefit of the HFI Member.

4. CURRENT TAX PROVISION OF HFI MEMBER
-----------------------------------

I. HFI Component

A. The HFI Component will determine its U.S. federal income tax provision
for regular or alternative minimum tax ("AMT") or refunds for any
period for which tax is computed as if it had filed a separate
consolidated U.S. federal income tax return.

B. The HFI Component will determine the aggregate state income tax
provision for regular or AMT or refunds for any period for which tax
is computed as if HFI and its 100%-owned subsidiaries and HIG and its
consolidated subsidiaries had filed separate single entity state
returns, combined state returns or consolidated state returns
(depending on the states' applicable laws)./1/

C. The foreign tax provision will be attributed to the HFI Component if
it bears the tax liability and any refund shall be attributed to the
HFI Component if it had originally been attributed the foreign tax
provision being refunded.

- ----------
/1/ Since the HIG Component files state tax returns only as a part of the
HFI Component, any state tax provision will be included in the
calculation of the HFI Component's state income tax provision.
<PAGE>

II. HIG Component

A. The HIG Component will determine its U.S. federal income tax provision
for regular or alternative minimum tax ("AMT") or refunds for any
period for which tax is computed based on its own separate
consolidated U.S. federal tax return.

B. The foreign tax provision will be attributed to the HIG Component if
it bears the tax liability and any refund shall be attributed to the
HIG Component if it had originally been attributed the foreign tax
provision being refunded.

5. DEFERRED TAX PROVISION OR BENEFIT OF HFI MEMBER
-----------------------------------------------

The deferred tax provision and benefit shall be computed in accordance with SFAS
No. 109 and allocated in the same manner as the current tax provision; that is,
the HIC Group's consolidated deferred tax provision or benefit for regular tax
or AMT shall be

allocated to the HFI Member as follows:

A. HFI Component:

1. As if the HFI Component had filed a consolidated U.S. federal
return on a separate basis; and

2. As if the HFI and its 100%-owned subsidiaries and HIG and its
consolidated subsidiaries had filed separate single entity state
returns, combined state reports or consolidated state returns
(depending on the states' applicable laws).

B. HIG Component:

1. Based on its own separate consolidated U.S. federal tax return.

6. ALLOCATION OF ADDITIONAL CURRENT TAX PROVISION
----------------------------------------------

If an additional HIC Group current tax provision is required due to a tax
assessment by the Internal Revenue Service or state departments of revenue, or
due to the filing of an amended return, such additional current provision shall
be allocated to the Members of the Group on the same basis as the current tax
provision is allocated.
<PAGE>

7. PAYMENT OF CURRENT TAX PROVISION TO PARENT
------------------------------------------

On or about last day of the each calendar quarter, the HFI Component will pay a
prorated estimate of its current year tax provision, if any, to its parent
(Heller International Corporation). If the total estimated current year tax
provision differs from the HFI Component's final tax provision (as determined
from the federal and state tax returns for Heller International Corporation and
Consolidated Subsidiaries filed in the subsequent year), then, as appropriate,
Heller International Corporation shall refund any overpayment to the HFI
Component or the HFI Component shall pay to Heller International Corporation any
deficiency.

8. INTRA-MEMBER ALLOCATION OF CURRENT & DEFERRED TAX PROVISION OR BENEFITS
------------------------------------------------------------------------

The intra-Member allocation of current and deferred federal, state and foreign
income tax provisions and benefits among the corporations and subsidiaries will
be consistent with the methodology described in Section 4 of this Agreement.

This Agreement between the parties amends and supersedes the prior Agreement
dated as of January 1, 1993 on the subject matter thereof and is effective as of
July 1, 1996.

IN WITNESS WHEREOF, each of the undersigned corporations has executed this
Agreement by an officer thereunto duly authorized.

HELLER FINANCIAL, INC.

By: /s/ Deborah Samz
Name: Deborah Samz
Title: Senior Vice President

HELLER INTERNATIONAL GROUP, INC.

By: /s/ Deborah Samz
Name: Deborah Samz
Title: Senior Vice President

[signatures continued on following page]
<PAGE>

HELLER INTERNATIONAL CORPORATION

By: /s/ Deborah Samz
Name: Deborah Samz
Title: Senior Vice President

WALTER E. HELLER & COMPANY

By: /s/ Judith L. McCoy
Name: Judith L. McCoy
Title: Assistant Treasurer

HELLER ADVISORY CORPORATION

By: /s/ Judith L. McCoy
Name: Judith L. McCoy
Title: Assistant Treasurer

HELLER INVESTMENT CORPORATION

By: /s/ Deborah Samz
Name: Deborah Samz
Title: Vice President

HELLER DELAWARE HOLDINGS, INC.

By: /s/ Judith L. McCoy
Name: Judith L. McCoy
Title: Treasurer
<PAGE>

AGREEMENT FOR THE ALLOCATION OF FEDERAL AND
STATE INCOME TAX LIABILITY AND BENEFIT AMONG
THE
MEMBERS OF THE HELLER INTERNATIONAL CORPORATION
AFFILIATED (AT LEAST 80% OWNED) GROUP
--------------------------------------

EXHIBIT I
MEMBERS OF THE GROUP
--------------------

The term "Members" as used in this Agreement is defined as follows:

1. Heller Financial, Inc. and subsidiaries Member ("HFI Member") which is
comprised of:

A. Heller Financial, Inc. and its 100%-owned subsidiaries ("HFI
Component"); and

B. Heller International Group, Inc. and its subsidiaries ("HIG
Component");

2. All other non-HFI Member corporations (collectively referred to as the
"Non-HFI Member") which are comprised of the following:

a. Heller International Corporation;

b. Walter E. Heller & Company and its Subsidiaries;

c. Heller Advisory Corporation;

d. Heller Investment Corporation; and

e. Heller Delaware Holdings, Inc.

<PAGE>

Exhibit 10(m)

THIRD AMENDMENT
OF
HELLER INTERNATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
------------------------------------

Heller International Corporation ("HIC") hereby amends its Executive Deferred
Compensation Plan (the "Plan") as of January 1, 1996.

WHEREAS, HIC has established the Plan for a select group of management and
highly compensated employees;

WHEREAS, Heller Financial, Inc. ("HFI"), Heller Financial Leasing, Inc.
("HFLI"), Heller International Group, Inc. ("HIG") and Heller International
Holdings, Inc. ("HIHI") have adopted the Plan for certain of their respective
management and highly compensated employees in accordance with Section 7 of the
Plan;

WHEREAS, HIC has determined that this amendment is necessary and desirable
and hereby amends the Plan in accordance with Section 8 of the Plan;

NOW, THEREFORE, the Plan is amended effective as of January 1, 1996, by
substituting the following for Section 5.1 of the Plan:

"5.1 Time and Method of Payment. Payment of a Participant's Deferral
Account shall be made in the form of a single lump sum or shall commence in
the form of installments as elected by the Participant at the time of his
initial Deferral Election. A Participant may make a one-time election
after the Eligible Employee's initial Deferral Election to change the form
of payment elected by the Participant; provided that such election shall
not be effective unless the election to change the form of payment is
received by the Committee at least one year and one day before the
Participant's Distribution Date.

If a Participant's Deferral Account is payable in a single lump sum, the
payment shall be made as soon as possible following the Valuation Date
coinciding with or next following the Participant's Distribution Date in an
amount equal to the value of the Participant's Deferral Account as of the
most recent valuation completed prior to the date on which the balance of
the Deferral Account is paid to the Participant.

If a Participant's Deferral Account is payable in the form of installment
payments, then the Participant's Deferral Account shall be paid in
<PAGE>

substantially equal annual installments over a five, ten or fifteen year
period (as elected by the Participant in accordance with this Section 5.1)
commencing as soon as practical after the Valuation Date coinciding with or
next following the Participant's Distribution Date.

Each installment payment shall be computed by dividing the balance of the
Participant's Deferral Account as of the most recent valuation completed
prior to the installment payment date by the number of payments remaining
in the installment period."

Executed this ____ day of April, 1996.

HELLER INTERNATIONAL CORPORATION

/s/ Peggi L. Sturm
By ____________________________________
VP
Its ___________________________________

-2-

<PAGE>

Exhibit 10(n)

FOURTH AMENDMENT
OF
HELLER INTERNATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
------------------------------------

WHEREAS, Heller International Corporation ("HIC") has established the
Heller International Corporation Executive Deferred Compensation Plan effective
as of January 1, 1994 (the "Plan") for a select group of its management and
highly compensated employees; and

WHEREAS, the Plan has previously been amended and HIC has determined that
further amendment thereof is necessary and desirable;

NOW, THEREFORE, in exercise of the power reserved to the Compensation
Committee of the Board of Directors of HIC by Section 8 of the Plan, the Plan is
amended, effective December 1, 1996, in the following particulars:

1. By substituting the following for subsection 2.2(c) of the Plan:

"(c) Deferred amounts will be deferred to the date specified by the
Eligible Employee at the time of his initial Deferral Election
(the "Distribution Date"). Except as provided in subsections
2.2(f) or 2.2(k) below, the Distribution Date specified at the
time of the Eligible Employee's initial Deferral Election is
irrevocable and shall apply to all amounts deferred by the
Eligible Employee under the Plan."

2. By adding the following new subsection 2.2(k) to the Plan immediately
following subsection 2.2(j) thereof:

"(k) If a Participant makes a Deferral Election that will first
become effective after the Designated Distribution Date elected
in the Participant's initial
<PAGE>

Deferral Election, then the Participant must select a new
Distribution Date in the manner described in subsection 2.2(d)
as though such Deferral Election were his initial Deferral
Election; provided, that the new Distribution Date selected by
the Participant shall only apply to amounts deferred by the
Participant for calendar years following the year in which the
new Distribution Date is selected."

Executed this 26 day of November, 1996.

HELLER INTERNATIONAL CORPORATION

By /s/ Charles M. Lowe
--------------------------
Executive Vice President
Its
-------------------------

-2-

<PAGE>

2372 (NY) Exhibit 10(q)

HELLER FINANCIAL, INC.

SAVINGS AND PROFIT SHARING PLAN

As amended and restated,
effective January 1, 1989
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I Amendment and Restatement.............................. 1

1.1 Amendment and Restatement................................... 1

ARTICLE II Definitions........................................... 1

2.1 "Accounts".................................................. 1
2.2 "Accrued Benefit"........................................... 2
2.3 "Active Participant"........................................ 2
2.4 "Authorized Leave of Absence"............................... 3
2.5 "Beneficiary"............................................... 3
2.6 "Beneficiary Designation Form".............................. 3
2.7 "Board of Directors"........................................ 3
2.8 "Code" or "Internal Revenue Code"........................... 3
2.9 "Committee"................................................. 3
2.10 "Commonly Controlled Entity"................................ 3
2.11 "Company"................................................... 4
2.12 "Compensation".............................................. 4
2.13 "Compensation Reduction Election"........................... 5
2.14 "Disability" or "Disabled".................................. 5
2.15 "Effective Date"............................................ 5
2.16 "Eligible Employee"......................................... 5
2.17 "Employee".................................................. 6
2.18 "Employee Contributions".................................... 6
2.19 "Employer".................................................. 6
2.20 "Employer Contributions".................................... 6
2.21 "ERISA"..................................................... 6
2.22 "Forfeiture"................................................ 6
2.23 "Highly Compensated Employee"............................... 6
2.24 "Hour of Service"........................................... 8
2.25 "Normal Retirement Date".................................... 9
2.26 "Participant" .............................................. 9
2.27 "Plan"...................................................... 9
2.28 "Plan Administrator"........................................ 9
2.29 "Plan Year"................................................. 9
2.30 "Related Plan".............................................. 9
2.31 "Required Beginning Date"................................... 9
2.32 "Rollover Contribution"..................................... 10
2.33 "Termination of Employment"................................. 10
2.34 "Trust"..................................................... 10
2.35 "Trust Agreement"........................................... 10
2.36 "Trust Fund"................................................ 10
2.37 "Trustee"................................................... 11
2.38 "Valuation Date"............................................ 11
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ARTICLE III Participation........................................ 11

3.1 Participation................................................ 11
3.2 Certification of Participation and
Compensation to Committee................................... 11
3.3 Participation Upon Change of Job Status...................... 11
3.4 Participation Upon Reemployment.............................. 12

ARTICLE IV Contributions......................................... 12

4.1 Employer Profit Sharing Contributions
by the Company............................................. 12
4.2 Employer Compensation Reduction
Contributions.............................................. 13
4.3 Special Employer Contributions............................... 14
4.4 Employer Matching Contributions.............................. 15
4.5 Compensation Reduction Elections............................. 15
4.6 Prevented Contributions...................................... 16
4.7 Employee Contributions....................................... 16
4.8 Rollover Contributions....................................... 16
4.9 Determination and Amount of Employer
Contributions.............................................. 17

ARTICLE V Restrictions and Limitations
on Contributions....................................... 17

5.1 Order of Application of the Restrictions
on Certain Contributions................................... 17
5.2 Restrictions on Compensation Reduction
Contributions.............................................. 17
5.3 401(k) Discrimination Limits................................. 19
5.4 Restrictions on Employer Matching
Contributions.............................................. 22
5.5 Multiple Use of Section 5.3 and
Section 5.4................................................ 25
5.6 Limitations on Contributions................................. 26

ARTICLE VI Allocations of Contributions.......................... 29

6.1 Employer Profit Sharing Contributions
and Forfeitures............................................ 29
6.2 Special Employer Contributions............................... 29
6.3 Employer Compensation Reduction
Contributions.............................................. 30
6.4 Employer Matching Contributions.............................. 30
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ARTICLE VII Trustee and Trust Fund................................ 30

7.1 Trust Agreement.............................................. 30
7.2 Selection of Trustee......................................... 30
7.3 Trustee's Duties............................................. 30
7.4 Trust Expenses............................................... 31
7.5 Trust Entity................................................. 31
7.6 Separate Accounts............................................ 31
7.7 Investment Funds............................................. 31
7.8 Trust Income................................................. 33
7.9 Correction of Error.......................................... 33
7.10 Right of the Employers to Trust Assets....................... 33

ARTICLE VIII Benefits............................................. 34

8.1 Payment of Benefits in General................................ 34
8.2 Payment of Accrued Benefit on
Termination of Employment.................................... 35
8.3 Payment of Accrued Benefit on Death........................... 36
8.4 Participant Withdrawals....................................... 38
8.5 Vested Interests.............................................. 40
8.6 Deduction of Taxes from Amounts Payable....................... 40
8.7 Deadline for Payment of Benefits.............................. 41
8.8 Facility of Payment........................................... 41
8.9 Spousal Consent to a Waiver................................... 41
8.10 Lump Sum Payment Without Election............................. 42
8.11 Form of Payment............................................... 42
8.12 Participant Loans............................................. 42
8.13 Timing of Payment Due to Restrictions
on Liquidation of Investments............................... 44

ARTICLE IX Administration......................................... 44

9.1 Board of Directors Duties..................................... 44
9.2 Committee Membership.......................................... 45
9.3 Committee Structure........................................... 45
9.4 Committee Actions............................................. 45
9.5 Committee Duties.............................................. 45
9.6 Allocations and Delegations of Responsibility................. 47
9.7 Committee Bonding and Expenses................................ 47
9.8 Information to be Supplied by Employer........................ 48
9.9 Records....................................................... 48
9.10 Fiduciary Capacity............................................ 48
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9.11 Plan Administrator......................................... 48
9.12 Committee/Plan Administrator Decisions Final............... 48
9.13 Company, Committee and Trustees as Agent................... 48
9.14 Fiduciary Responsibility................................... 48

ARTICLE X Claims Procedure....................................... 49

10.1 Initial Claim for Benefits................................. 49
10.2 Review of Claim Denial..................................... 50

ARTICLE XI Amendment and Termination of the Plan................. 51

11.1 Discontinuance of Contributions............................ 51
11.2 Amendments................................................. 51
11.3 Plan Termination........................................... 51
11.4 Payment Upon Termination................................... 52
11.5 Withdrawal from the Plan by an Employer.................... 52

ARTICLE XII Top Heavy Provisions................................. 52

12.1 Application................................................ 52
12.2 Special Top Heavy Definitions.............................. 53
12.3 Special Top Heavy Provisions............................... 61

ARTICLE XIII Miscellaneous Provisions............................ 64

13.1 Employer Joinder........................................... 64
13.2 Company Merger............................................. 64
13.3 Plan Merger................................................ 64
13.4 Indemnification............................................ 64
13.5 Unclaimed Amounts.......................................... 65
13.6 Nonalienation of Benefits.................................. 65
13.7 Qualified Domestic Relations Order......................... 66
13.8 Contract of Employment..................................... 68
13.9 Source of Benefits......................................... 68
13.10 Employees' Trust........................................... 68
13.11 Gender and Number.......................................... 68
13.12 Headings................................................... 68
13.13 Uniform and Non-Discriminatory
Application of Provisions................................ 68
13.14 Invalidity of Certain Provisions........................... 68
13.15 Law Governing.............................................. 69

APPENDIX A - Plan History
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HELLER FINANCIAL, INC.

SAVINGS AND PROFIT SHARING PLAN

ARTICLE I

Amendment and Restatement

1.1 Amendment and Restatement. The Heller Financial, Inc. Savings and
Profit Sharing Plan (formerly the Heller Financial Inc. Profit Sharing Plan), as
established in 1951, and as amended from time to time (as described in more
detail in Appendix A), is hereby amended and restated, effective January 1,
1989, except as otherwise provided herein.

The Plan is intended to be a qualified profit sharing plan as described in
Sections 401(a) and 401(k) of the Internal Revenue Code. The rights of a person
who has had a Termination of Employment or has filed a claim for benefits prior
to the Effective Date and who is not rehired after the Effective Date shall be
determined under the terms of the Plan in effect on the date of his Termination
of Employment.

ARTICLE II

Definitions

When used herein the following words shall have the following meanings
unless the context clearly indicates otherwise.

2.1 "Accounts" means a Participant's share in the Trust. Each Participant
shall have the following separate Accounts which shall be reduced by any
distributions therefrom:

(a) A "Profit Sharing Contribution Account" to which shall be
credited Employer Profit Sharing Contributions made on or after January 1,
1989 in accordance with Section 4.1, Minimum Employer Contributions made in
accordance with Section 12.3(a), and Forfeitures, plus income and gains and
less expenses and losses attributable thereto.

(b) A "Compensation Reduction Account" to which shall be credited the
Participant's Employer Compensation Reduction Contributions and Special
Employer Contributions made to the Plan on or after January 1, 1989, in
accordance with Sections 4.2 and 4.3, plus income and gains and less
expenses and losses attributable thereto.

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(c) A "Matching Contribution Account" to which shall be credited
Employer Matching Contributions made to the Plan on or after March 1, 1990
in accordance with Section 4.4, plus income and gains and less expenses and
losses attributable thereto.

(d) A "Rollover Contribution Account" to which shall be credited a
Participant's Rollover Contributions made to the Plan on or after January
1, 1989, in accordance with Section 4.8, plus income and gains and less
expenses and losses attributable thereto.

(e) An "Employer Contribution Account" to which shall be credited
employer contributions, rollover amounts and deferred income contributions
made to the Plan prior to January 1, 1989, under the terms of the Plan as
in effect at the time such contributions were made, plus income and gains
and less expenses and losses attributable thereto.

(f) An "Employee Contribution Account" to which shall be credited
Employee Contributions made to the Plan prior to January 1, 1983, plus
income and gains and less expenses and losses attributable thereto.

2.2 "Accrued Benefit" means a Participant's interest in the Trust composed
of such Participant's Accounts. A Participant's Accrued Benefit at any time
during any Plan Year shall be its value on the coinciding or immediately
preceding Valuation Date.

2.3 "Active Participant" means:

(a) with respect to Employer Profit Sharing Contributions, a
Participant who (1) is an Eligible Employee employed by an Employer as of
the last business day of the Plan Year or was an Eligible Employee on any
day of the Plan Year and who as of the last business day of the Plan Year
was receiving severance payments from an Employer; (2) is credited with at
least 900 Hours of Service during such Plan Year; (3) effective for Plan
Years beginning after 1989, is not a Highly Compensated Employee for such
Plan Year and (4) was not eligible to participate in the Management
Incentive Plan, Workouts Incentive Plan or Sales Incentive Plan, on any day
in the Plan Year;

(b) with respect to Employer Compensation Reduction Contributions,
Special Employer Contributions, Forfeitures, Rollover Contributions, and
with respect to determining the actual deferral percentage under Section
5.3(c) and the actual contribution percentage under Section 5.4(c), a
Participant who is an Eligible Employee on any day of the Plan Year; and

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(c) with respect to Employer Matching Contributions, (1) attributable
to Employer Compensation Reduction Contributions made with respect to
Compensation paid for payroll periods beginning on or after January 1 and
ending on or before June 30 of each Plan Year, a Participant who is an
Eligible Employee employed by an Employer on the last business day on or
before June 30 of such Plan Year; and (2) attributable to Employer
Compensation Reduction Contributions made with respect to Compensation paid
for payroll periods beginning on or after July 1 and ending on or before
December 3l of each Plan Year, a Participant who is an Eligible Employee
employed by an Employer on the last business day on or before December 3l
of such Plan Year.

2.4 "Authorized Leave of Absence" means any absence authorized by an
Employer under the Employer's standard personnel practices, provided that all
persons under similar circumstances are treated alike in the granting of such
Authorized Leave of Absence. An absence due to service in the Armed Forces of
the United States shall be considered an Authorized Leave of Absence provided
that the Participant complies with all of the requirements of Federal Law in
order to be entitled to reemployment and provided further that the Participant
returns to employment with the Employer within the period provided by such law.

2.5 "Beneficiary" means any person designated by a Participant in
accordance with Section 8.3(c) to receive any death benefits which shall be
payable under the Plan.

2.6 "Beneficiary Designation Form" means the form provided or permitted by
the Committee on which the Participant, in accordance with Section 8.3(c), may
(a) designate his Beneficiary, (b) select the form of his Beneficiary's benefit
and (c) elect to permit his Beneficiary to change the form of the Beneficiary's
benefit.

2.7 "Board of Directors" means the board of directors of the Company.

2.8 "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time and any subsequent Internal Revenue Code.
References to any section of the Code shall be deemed to include similar
sections of the Code as renumbered or amended.

2.9 "Committee" means the committee appointed pursuant to Article IX to
administer the Plan.

2.10 "Commonly Controlled Entity" means a corporation, trade, or business
if it and an Employer are members of a

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controlled group of corporations as defined in Section 414(b) of the Code or
under common control as defined in Section 414(c) of the Code or members of an
affiliated service group as defined in Section 414(m) of the Code or members of
a group the members of which are required to be aggregated pursuant to
regulations under Section 414(o) of the Code.

2.11 "Company" means Heller Financial, Inc., or any successor corporation
by merger, consolidation, purchase, or otherwise, which elects to adopt the Plan
and Trust.

2.12 "Compensation" means the amounts described below.

(a) Except as provided in (b) and (c) and subject to (d),
Compensation means with respect to the Employees of each Employer the
regular base pay paid during the Plan Year to a Participant, while a
Participant in the Plan, by such Employer, and increased by any amounts by
which the Participant's Compensation is reduced by salary reduction or
similar arrangement under the Plan, any Related Plan or any cafeteria plan
(as described in Section 125 of the Code) maintained by such Employer and
excluding any commissions, overtime payments, bonuses, or other special
payments and any benefits paid under the Plan or under any other qualified
plan described in Section 401(a) of the Code and excluding other deferred
compensation, stock options, and any other distributions which receive
special tax benefit.

(b) For purposes of determining the limitations under Section 5.6 and
for purposes of Article XII (except for determining a Key Employee under
Section 12.2(d)), Compensation means the total compensation paid to an
individual by an Employer and Commonly Controlled Entities during the Plan
Year, not increased by any amount by which the individual's Compensation is
reduced by salary reduction or similar arrangement under the Plan, any
Related Plan or any cafeteria plan (as described in Section 125 of the
Code) maintained by an Employer or Commonly Controlled Entity, and
excluding any other benefits paid under the Plan or under any other
qualified plan described in Section 401(a) of the Code, and excluding other
deferred compensation, stock options, and any other distributions which
receive special tax benefit.

(c) For purposes of determining Highly Compensated Employees under
Section 2.23, Key Employees under Section 12.2(d), the actual deferral
percentage under Section 5.3(c) and the actual contribution percentage
under Section 5.4(c), Compensation means the total compensation paid to an
individual by an Employer and Commonly Controlled

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Entities during the Plan Year, increased by any amounts by which the
individual's compensation is reduced by salary reduction or similar
arrangement under the Plan, any Related Plan or any cafeteria plan (as
described in Section 125 of the Code) maintained by an Employer or Commonly
Controlled Entity, and excluding any benefits paid under the Plan or under
any other qualified plan described in Section 401(a) of the Code, and
excluding other deferred compensation, stock options, and any other
distributions which receive special tax benefit.

(d) For purposes of determining the amount of an allocation to a
Participant's Profit Sharing Contribution Account pursuant to Section 6.1,
Compensation means the Participant's Compensation as defined in
subparagraph (a), but excluding any such Compensation which is paid in any
month in which the Participant is eligible to participate in the Management
Incentive Plan, Workouts Incentive Plan or Sales Incentive Plan.

Except for purposes of Section 5.6 and for determining Highly Compensated
Employees under Section 2.23, the amount of an Employee's Compensation
taken into account under the Plan shall not exceed $200,000 (adjusted from
time to time by the Secretary of the Treasury at the same time and in the
same manner as under Section 415(d) of the Code). In determining the
Compensation of a family member, the rules of Code Section 414(q)(6) shall
apply, except that the term "family" shall include only the spouse of the
Participant and any lineal descendants who have not attained age 19 before
the close of the Plan Year.

2.13 "Compensation Reduction Election" means the properly completed and
executed Compensation Reduction Election Form which has been filed by the
Participant with the Committee as provided in Section 4.5.

2.14 "Disability" or "Disabled" means a physical or mental condition
resulting from a bodily injury, disease, or mental disorder, which renders a
Participant presumably permanently incapable of performing his normal employment
duties. Such determination shall be made by the Committee on the basis of such
medical and other competent evidence as the Committee shall deem relevant.

2.15 "Effective Date" of the Plan is January 1, 1989.

2.16 "Eligible Employee" means any Employee employed by an Employer but
excluding any temporary Employee and any Employee who is a member of a
collective bargaining unit represented by a collective bargaining agent with
which the Employer has or

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has had a bargaining agreement, unless an agreement between the Employer and the
collective bargaining agent requires that members of the collective bargaining
unit participate in the Plan.

2.17 "Employee" means any individual who is employed by an Employer or a
Commonly Controlled Entity, including a person on an Authorized Leave of
Absence. Such term does not include a consultant or an independent contractor.

2.18 "Employee Contributions" means amounts contributed to the Plan by
Participants prior to January 1, 1983, pursuant to Section 4.6.

2.19 "Employer" means the Company and any other Commonly Controlled Entity
which, pursuant to Section 13.1 of the Plan, elects to adopt the Plan.

2.20 "Employer Contributions" means the following payments made from time
to time by an Employer to the Trustee:

(a) "Employer Profit Sharing Contributions" made pursuant to Section
4.1;

(b) "Employer Compensation Reduction Contributions" made pursuant to
Section 4.2(a);

(d) "Special Employer Contributions" made pursuant to Section 4.3(a);
and

(e) "Minimum Employer Contributions" made pursuant to Section
12.3(a).

2.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

2.22 "Forfeiture" means the portion of a Participant's Accrued Benefit
which is forfeited as provided in Section 13.5.

2.23 "Highly Compensated Employee" means any employee of the Company or a
Commonly Controlled Entity who at any time during the Plan Year, who at the time
he has a Termination of Employment, or who at any time after he attains age
fifty-five (55):

(a) is a more than five percent (5%) owner (or is considered as
owning more than five-percent (5%) within the meaning of Section 318 of the
Code) ("5% Owner") of the Company or a Commonly Controlled Entity;

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(b) receives Compensation in excess of $54,480 (in 1989, adjusted as
determined in accordance with regulations prescribed by the Secretary of
the Treasury or his delegate pursuant to provisions of Section 415(d) of
the Code);

(c) (1) is an officer of the Company or a Commonly Controlled
Entity, provided that, subject to subparagraph (f) hereof, no more than a
total of fifty (50) persons (or, if lesser, the greater of three (3)
persons or ten percent (10%) of persons employed by the Company and
Commonly Controlled Entities) shall be treated as Highly Compensated
Employees under this subparagraph (c) for any Plan Year, and (2) receives
Compensation in excess of fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code (adjusted as determined in accordance with
regulations prescribed by the Secretary of the Treasury or his delegate
pursuant to the provisions of Section 415(d) of the Code), provided that,
if, for any Plan Year, no officer of the Company and all Commonly
Controlled Entities receives Compensation in excess of the applicable
amount under this subparagraph (c), then the highest paid officer of the
Company and Commonly Controlled Entities shall be treated as a Highly
Compensated Employee for such Plan Year.

(d) For purposes of this Section 2.23, an employee who performs
services for the Company or a Commonly Controlled Entity during a Plan Year
shall nevertheless be deemed to have had a Termination of Employment
(solely for purposes of determining whether such employee is a Highly
Compensated Employee for any period after he has an actual Termination of
Employment) if (1) in a Plan Year prior to his attainment of age 55, the
employee receives Compensation in an amount less than 50% of his average
annual Compensation for the three consecutive calendar years preceding such
Plan Year during which his Compensation was the greatest (or the total
period of the employee's service with the Company and Commonly Controlled
Entities, if less) and (2) after such Plan Year in which the employee is
deemed to have had a Termination of Employment and before the Plan Year in
which the employee has an actual Termination of Employment, the employee's
services for and Compensation from the Company and Commonly Controlled
Entities do not increase significantly.

(e) For purposes of this Section 2.23, the Compensation, (1) of any
Highly Compensated Employee in the group consisting of the ten (10) most
highly compensated employees of the Company and Commonly Controlled
Entities paid the greatest Compensation (without regard to this sentence)
or (2) of any 5% Owner of the Company or a Commonly Controlled Entity,
shall include any Compensation

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paid to a spouse, lineal ascendants or descendants, or any spouse of such
lineal ascendants or descendants ("Family Members") of such Highly
Compensated Employee or 5% Owner and such Family Members shall not be
treated as an employee for purposes of this Section 2.23.

(f) For purposes of this Section 2.23, Employees who are nonresident
aliens and who receive no earned income (within the meaning of Section
911(d)(2) of the Code) from the Company and Commonly Controlled Entities
which constitutes income from sources within the United States (within the
meaning of Section 861(a)(3) of the Code) shall not be treated as Highly
Compensated Employees.

2.24 "Hour of Service"

(a) "Hour of Service" means each hour for which an Employee is paid,
or entitled to payment, by an Employer or a Commonly Controlled Entity:

(1) for the performance of duties;

(2) on account of a period of time during which no duties were
performed; provided that Hours of Service shall not be credited for
payments made or due under a plan maintained solely for the purpose of
complying with applicable workers' compensation, unemployment
compensation or disability insurance laws, or for reimbursement of
medical expenses; and

(3) for which back pay, irrespective of mitigation of damages,
is awarded or agreed to by the Employer; provided that, no more than
501 Hours of Service shall be credited for any single continuous
period of time during which the Employee did not or would not have
performed duties and, provided that, the same Hours of Service have
not already been credited under (1) or (2) above.

(b) For Employees who are paid on other than an hourly basis, Hours
of Service shall be credited for each payroll period of the Employee for
which the Employee receives or is entitled to receive compensation
according to the following:

(1) 45 Hours of Service for each weekly payroll period;
(2) 90 Hours of Service for each bi-weekly payroll period;

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(3) 95 Hours of Service for each semi-monthly payroll period; or
(4) 190 Hours of Service for each monthly payroll period.

The determination of Hours of Service for reasons other than the
performance of duties shall be determined in accordance with the provisions
of Labor Department Regulations Section 2530.200b-2(b), and Hours of
Service shall be credited to computation periods in accordance with the
provisions of Labor Department Regulations Section 2530.200b-2(c).

To the extent not credited above, for periods of Authorized Leave of
Absence, an Employee shall be credited with a number of Hours of Service
for each week of such Authorized Leave of Absence equal to the Employee's
weekly average number of Hours of Service for the six-week period
immediately preceding such Authorized Leave of Absence.

2.25 "Normal Retirement Date" means the date on which a Participant attains
age 65.

2.26 "Participant" means an Eligible Employee participating in the Plan as
provided in Article III.

2.27 "Plan" means the Heller Financial, Inc. Savings and Profit Sharing
Plan, as set forth herein and as from time to time amended.

2.28 "Plan Administrator" means the person, persons or group appointed to
act as Plan Administrator under Section 9.11, and in the absence of such
appointment, the Committee.

2.29 "Plan Year" means the twelve-month period beginning on January 1 and
ending on December 31.

2.30 "Related Plan" means any other defined contribution plan or a defined
benefit plan (as defined in Section 415(k) of the Code) maintained by an
Employer or a Commonly Controlled Entity, respectively called a "Related Defined
Contribution Plan" and a "Related Defined Benefit Plan."

2.31 "Required Beginning Date" means April 1 of the calendar year following

(a) for a Participant who reaches age 70-1/2 on or after January 1,
1988, the calendar year in which the Participant reaches age 70-1/2,
provided that if a

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Participant attained age 70-1/2 during 1988, is not a 5% Owner and had not
retired prior to January 1, 1989, then the Participant's Required Beginning
Date shall be April 1, 1990; and

(b) for a Participant who reaches age 70-1/2 prior to January 1,
1988, the later of

(1) the calendar year in which the Participant reaches age
70-1/2, or

(2) if the Participant is not a 5% Owner of the Employer (as
determined under Code Section 416(i)) at any time during the Plan Year
ending with or within the calendar year in which he reaches age 70-1/2
or any of the four (4) prior Plan Years, the calendar year in which he
terminates employment with the Company and all Commonly Controlled
Entities, provided that if any such Participant becomes a 5% Owner
during any Plan Year after he reaches age 70-1/2, the "Required
Beginning Date" for such Participant shall be the April 1 of the
calendar year following the calendar year in which such Plan Year
ends.

2.32 "Rollover Contribution" means a rollover contribution as described in
Section 402(a)(5), Section 403(a)(4), or Section 408(d)(3) of the Code.

2.33 "Termination of Employment" means (a) a resignation by an Employee for
any reason, (b) a dismissal of an Employee for any reason, (c) death or
retirement, (d) a failure to return to work without reasonable cause, as
determined by the Employer, after the conclusion of an Authorized Leave of
Absence or (e) any other termination of employment. The transfer of an Employee
from employment by an Employer or a Commonly Controlled Entity to employment by
another Employer or a Commonly Controlled Entity shall not be regarded as a
Termination of Employment.

2.34 "Trust" means the trust established and maintained for the purposes of
the Plan, which is administered by the Trustee in accordance with the provisions
of the Trust Agreement.

2.35 "Trust Agreement" means the agreement between the Company and the
Trustee as from time to time amended.

2.36 "Trust Fund" means all property, real or personal, received or held by
the Trustee plus all income and gains and minus all losses, expenses, and
distributions chargeable thereto.

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2.37 "Trustee" means any corporation, individual or individuals who shall
accept the appointment as Trustee to execute the duties of the Trustee as
specifically set forth in the Trust Agreement.

2.38 "Valuation Date" means the last day of each calendar month, and such
additional dates as the Committee shall deem appropriate.

ARTICLE III

Participation

3.1 Participation. Each Eligible Employee who was a Participant in the
Plan on the day before the Effective Date shall be a Participant in this Plan
immediately upon the Effective Date in accordance with the terms hereof. Each
other Eligible Employee shall become a Participant in the Plan for purposes of
Employer Profit Sharing Contributions on the January l or July 1 next following
the date on which he becomes an Eligible Employee and for all other purposes
under the Plan on the date on which he becomes an Eligible Employee.

Admission to participation in the Plan shall only be made when an Eligible
Employee is not on an Authorized Leave of Absence or serving with the Armed
Forces of the United States. Each Participant shall continue as such until the
later of his Termination of Employment or the distribution of his entire Accrued
Benefit.

3.2 Certification of Participation and Compensation to Committee. Each
Employer shall certify to the Committee, within a reasonable time, the names of
all new Participants. Each Employer, within a reasonable time after the last
day of each Plan Year, shall certify to the Committee each Participant's
Compensation during such Plan Year and such other information as the Committee
may request.

3.3 Participation Upon Change of Job Status. An Employee who has met the
requirements of Section 3.1, but who is not a Participant because he is not an
Eligible Employee, shall become a Participant upon the date of his becoming an
Eligible Employee, but not earlier than the date he would have become a
Participant had he been an Eligible Employee at all times, provided that such
Eligible Employee's Compensation Reduction Election shall not be effective prior
to, if the Employee becomes a Participant prior to the 21st day of a calendar
month, the first day of the month following the month in which the Employee
becomes a Participant and, if the Employee becomes a Participant on or after the
21st day of any calendar month,

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the first day of the second calendar month beginning after the month in which
the Employee becomes a Participant.

3.4 Participation Upon Reemployment. An Eligible Employee who (a) has a
Termination of Employment, (b) was a Participant immediately before such
Termination of Employment, and (c) thereafter becomes an Eligible Employee shall
again become a Participant immediately upon becoming an Eligible Employee,
provided that such Eligible Employee's Compensation Reduction Election shall not
be effective prior to, if the Employee becomes a Participant prior to the 21st
day of a calendar month, the first day of the month following the month in which
the Employee becomes a Participant and, if the Employee becomes a Participant on
or after the 21st day of any calendar month, the first day of the second
calendar month beginning after the month in which the Employee becomes a
Participant.

ARTICLE IV

Contributions

4.1 Employer Profit Sharing Contributions by the Company.

(a) Employer Profit Sharing Contributions. Subject to Sections 11.1,
11.2 and 11.3, for each Plan Year the Company shall contribute to the Trust
(l) such total amount or (2) such amount or percentage of compensation for
each Active Participant who is an Employee of the Company as an Employer
Profit Sharing Contribution as may be determined by the Board of Directors,
but in no event shall the Company contribute an amount for any Plan Year
greater than the maximum amount deductible from income by the Company under
the provisions of the Code.

(b) Other Employer Profit Sharing Contributions. Subject to Sections
11.1, 11.2 and 11.3, each other Employer shall contribute to the Trust for
each Plan Year for Active Participants who are Employees of that Employer
as an Employer Profit Sharing Contribution an amount which is equal to the
product of (l) the total Compensation for the Plan Year paid to Active
Participants by such Employer, multiplied by (2) a fraction, the numerator
of which is the Company's Employer Profit Sharing Contribution for the Plan
Year and the denominator of which is the total Compensation for the Plan
Year paid to Active Participants by the Company.

All Employer Profit Sharing Contributions are fully vested and
nonforfeitable.

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<PAGE>

(c) Deadline for Employer Profit Sharing Contributions. The Employer
Profit Sharing Contributions for each Plan Year shall be delivered to the
Trustee on or before the due date (including extensions thereof) for the
filing of the federal income tax return of the Employer for the tax year
within which or during which the last day of such Plan Year occurs. If the
Employer makes Employer Profit Sharing Contributions to the Plan for a Plan
Year prior to the end of a Plan Year, the contributions shall be held in a
separate suspense account until allocated pursuant to Section 6.1.

4.2 Employer Compensation Reduction Contributions.

(a) Employer Compensation Reduction Contributions. Each Active
Participant shall have his Compensation and any bonus designated as a
Profit Sharing Bonus which may be payable to the Participant reduced for
each Plan Year by the amount (if any) specified in his Compensation
Reduction Election. Each Employer shall contribute to the Trust, as an
Employer Compensation Reduction Contribution on behalf of each Active
Participant employed by the Employer, the amount specified in his
Compensation Reduction Election. A Participant's Compensation Reduction
Election, if any, shall be made by written authorization and in accordance
with such rules as the Committee shall from time to time specify, and shall
equal the sum of (l) a dollar amount or a percentage of the Participant's
Compensation as permitted by the Committee, subject to such reasonable and
nondiscriminatory minimum as the Committee shall from time to time specify,
up to a maximum of sixteen percent (16%) of such Participant's Compensation
(or such lesser or greater percentage as the Committee, in its sole
discretion, may from time to time determine), as elected by the
Participant, plus (2) either one hundred percent (100%) or zero percent
(0%) (or such other percentages as the Committee, in its sole discretion,
may from time to time determine), as elected by the Participant, of such
Participant's Profit Sharing Bonus, if any, payable to the Participant for
the Plan Year; provided that no Employer Compensation Reduction
Contribution shall exceed an amount which may from time to time be
established by the Committee or the Board of Directors or a pro rata
portion of said amount for any partial calendar year of contributions; and
provided, notwithstanding the foregoing, the Employer Compensation
Reduction Contributions of any Active Participant for any calendar year
shall not exceed $7,627 (in 1989, adjusted in subsequent years as
determined in accordance with regulations or rulings prescribed by the
Secretary of Treasury or his delegate) pursuant to the provisions of
Section 415(d) of the Code and increased in

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<PAGE>

accordance with the provisions of Sections 402(g)(4) and 402(g)(8) of the
Code with respect to any Participant who participates in a plan described
in Section 403(b) of the Code or who is a qualified employee in a plan of a
qualified organization (as defined in Code Section 402(g)(8)); and provided
further that the Committee may, in its discretion, limit the monthly amount
of Compensation Reduction Contributions for Active Participants to a pro
rata portion of such annual limit with such rounding and other
administratively desirable provisions as it from time to time deems
appropriate.

All Employer Compensation Reduction Contributions are fully vested and
nonforfeitable.

(b) Deadline for Employer Compensation Reduction Contributions. Each
Employer shall contribute the Employer Compensation Reduction Contributions
for each Plan Year to the Trustee at such time as the Company shall from
time to time determine, but not later than twelve (12) months after the
last day of the Plan Year to which such Employer Compensation Reduction
Contribution relates or by such later date as may be permitted under
applicable law, Treasury regulations and rulings of the Internal Revenue
Service.

4.3 Special Employer Contributions.

(a) Special Employer Contributions. For each Plan Year, the Company
may, on or before the due date (including extensions) for filing the
Company's federal income tax return for such Plan Year, elect to have the
Company and the other Employers make a Special Employer Contribution to the
Trust in such amount (if any) as the Board of Directors may determine. In
any Plan Year in which the Company elects to have such a Special Employer
Contribution made, each Employer shall contribute a fractional portion of
the Special Employer Contribution in an amount equal to the total Special
Employer Contribution, multiplied by a fraction, the numerator of which is
the Compensation for such Plan Year paid by the Employer to non-Highly
Compensated Employees who are Active Participants, and the denominator of
which is the Compensation for the Plan Year paid to all non-Highly
Compensated Employees who are Active Participants.

All Special Employer Contributions are fully vested and
nonforfeitable.

(b) Deadline for Special Employer Contributions. Special Employer
Contributions for each Plan Year shall be

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<PAGE>

delivered to the Trustee on or before the due date for the filing of the
federal income tax return (including extensions) of the Employer for the
tax year during which the last day of such Plan Year occurs.

4.4 Employer Matching Contributions.

(a) Employer Matching Contribution. Effective with respect to Employer
Compensation Reduction Contributions made on or after March l, 1990, for
each Plan Year, each Employer shall contribute on behalf of each Active
Participant employed by an Employer an Employer Matching Contribution equal
to fifty percent (50%) (or such greater or lesser percentage determined by
the Committee) of such Active Participant's Employer Compensation Reduction
Contributions made during such Plan Year on or after March l, 1990 up to a
maximum of five percent (5%) (or such greater or lesser percentage
determined by the Committee) of the Active Participant's Compensation paid
for the Plan Year on or after March l, 1990; provided that no Employer
Matching Contribution for any Plan Year or other period established by the
Committee shall exceed an amount or a percentage of Compensation or
Employer Compensation Reduction Contributions which may from time to time
be established by the Committee.

Each Participant shall be bully vested in any Employer Matching
Contributions which are allocated to his Matching Contribution Account.

(b) Deadline for Employer Matching Contributions. Employer Matching
Contributions for each Plan Year shall be delivered to the Trustee as soon
as reasonably possible after the end of the Plan Year or such earlier time
during the Plan Year as the Employer may from time to time determine, but
not later than the due date for the filing of the federal income tax return
(including any extensions) of the Employer for the tax year during which
the last day of the Plan Year occurs.

4.5 Compensation Reduction Elections. A Participant may make, change or
revoke a Compensation Reduction Election, provided that a Compensation Reduction
Election or a change or revocation shall apply solely to Compensation and any
Profit Sharing Bonus not payable as of the date of such election, change or
revocation. An election or change in or revocation of a Participant's
Compensation Reduction Election with respect to Compensation may be made at any
time and shall be effective on the later of (a) if received by the Committee
prior to the 21st day of a calendar month, the first day of the month following
the month in which the Compensation Reduction

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<PAGE>

Election is received and, if received on or after the 21st day of any calendar
month, the first day of the second calendar month beginning after the month in
which the Compensation Reduction Election is received or (b) such later date as
the Participant shall specify, provided that the Committee, in its discretion,
may permit an election to be made or to become effective at any additional
times. An election or change in a Participant's Compensation Reduction Election
with respect to a Profit Sharing Bonus shall be made not later than thirty (30)
days prior to the date on which such Profit Sharing Bonus is payable to the
Participant and shall be effective immediately, provided that the Committee, in
its discretion, may permit an election to be made or to become effective at any
additional time. The Compensation Reduction Election by the Participant shall
continue in effect, notwithstanding any change in Compensation or Profit Sharing
Bonus, until such Participant shall change such Compensation Reduction Election
or until he shall cease to be a Participant.

4.6 Prevented Contributions. Notwithstanding the provisions of Sections
4.1, 4.2, 4.3, and 4.4 no Employer shall make any contribution for any Plan Year
in excess of the maximum amount deductible from income by the Employer for the
Plan Year under the provisions of the Code.

4.7 Employee Contributions.

(a) No Employee Contributions shall be made to the Plan on or after
January l, 1983. All Employee Contributions are fully vested and
nonforfeitable.

(b) A Participant may, upon written notice given to the Committee on
or prior to a Valuation Date, elect to withdraw all or any portion of such
Participant's Employee Contribution Account, valued as of such Valuation
Date. Distribution of such withdrawals shall be made within 60 days
following the Valuation Date.

4.8 Rollover Contributions. The Committee may, at the request of an
Eligible Employee, direct the Trustee to accept a Rollover Contribution
consisting of money to the Plan for such Eligible Employee to be held in the
Rollover Contribution Account for such person. Prior to the acceptance of a
Rollover Contribution, the Committee may require the submission of evidence so
that it may be reasonably satisfied that such Rollover Contribution qualifies as
a Rollover Contribution. If the Committee shall determine subsequent to any
Rollover Contribution that such contribution did not in fact constitute a
qualified Rollover Contribution, the amount of such Rollover Contribution
Account shall be returned to the Employee or Participant.

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<PAGE>

All Rollover Contributions are fully vested and nonforfeitable.

4.9 Determination and Amount of Employer Contributions. The Board of
Directors shall determine and shall certify to the Trustee the amount of any
contribution to be made by each Employer hereunder. In making such
determination, the Board of Directors shall be entitled to rely upon the
estimates of Compensation made by the chief accounting officer of the Employer.
Such determination shall be binding on all Participants, the Trustee, and the
Employer. Under no circumstances shall any Participant or Beneficiary have any
right to examine the books and records of any Employer.

Employer Contributions shall be made in cash or to the extent permitted
under federal law in other property (real or personal) provided that any noncash
Employer Contribution shall be valued at fair market value at the time it is
delivered to the Trustee.

ARTICLE V

Restrictions and Limitations on Contributions

5.1 Order of Application of the Restrictions on Certain Contributions.
Sections 5.2, 5.3, 5.4, 5.5 and 5.6 shall be applied in sequential order to
contributions under the Plan.

5.2 Restrictions on Compensation Reduction Contributions. Notwithstanding
the provisions of Section 4.2 or 4.5, Compensation Reduction Elections for any
Participant or group of Participants shall not exceed either the maximum dollar
amount permitted under Section 402(g) of the Code as set forth in subparagraphs
(a) and (b) of this Section or the amounts permitted under the non-
discrimination rules of Section 401(k) of the Code as set forth in Sections 5.3
and 5.5:

(a) Deferral Limits. Notwithstanding anything in Sections 4.2 or 4.5
to the contrary, (l) an Active Participant's Employer Compensation
Reduction Contributions under the Plan and his elective deferrals (as
defined in Section 402(g) of the Code) under any Related Plan for any
calendar year shall not exceed $7,627 (in 1989, adjusted in subsequent
years as determined in accordance with regulations prescribed by the
Secretary of Treasury or his delegate); and (2) the Committee may, in its
discretion, limit the periodic amount of Employer Compensation Reduction
Contributions for Active Participants to a pro rata portion of such annual
limit with such rounding and other administratively desirable provisions as
it from time to time deems appropriate.

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<PAGE>

(b) Aggregate Deferral. If for any calendar year, the Participant
notifies the Committee in writing prior to March l (or such later date as
the Committee permits, but no later than April 15) of the succeeding
calendar year that the sum of (l) the Participant's Employer Compensation
Reduction Contributions, (2) any elective deferrals (as defined in Section
402(g) of the Code) under a Related Plan, and (3) other elective deferrals
(as defined in Section 402(g) of the Code) exceeds $7,627 (in 1989,
adjusted in subsequent years as determined in accordance with regulations
prescribed by the Secretary of Treasury or his delegate, and increased in
accordance with the provisions of Sections 402(g)(4) and 402(g)(8) of the
Code as applicable), then the Committee shall, not later than the April 15
following the receipt of such notice, distribute to the Participant all or
such portion of the Participant's Employer Compensation Reduction
Contributions for such calendar year as requested in writing, but no more
than the amount necessary to eliminate the excess. Any income allocable to
such excess amount, determined under Section 5.2(c), shall also be
distributed.

(c) Allocation of Income. Income equal to the sum of the amounts
determined under (l) and (2) below shall be allocated to and distributed
with any amounts distributed to a Participant as follows:

(1) Income for Calendar Year. Income for a completed calendar
year shall equal the net income for the calendar year allocable to a
Participant's Compensation Reduction Account multiplied by a fraction,
the numerator of which is the amount of Employer Compensation
Reduction Contributions so distributed and the denominator of which is
the balance of such Account as of the last day of the calendar year
(prior to distribution of any Employer Compensation Reduction
Contribution for such calendar year and prior to allocation of income,
gains, losses and expenses thereto).

(2) Income for Period Between End of Calendar Year and
Distribution. Income for the period between the end of a calendar year
and the date of a distribution shall equal the product of the number
of months which have elapsed since the end of the preceding calendar
year and the date of the distribution multiplied by l0 percent
multiplied by the income allocated to such distributed amounts under
subsection (l) above. For this purpose, a distribution made on or
before the 15th day of a month shall be deemed to have been made on
the last day of

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<PAGE>

the prior month, and a distribution made after the 15th day of a month
shall be deemed to have been made on the first day of the next month.

5.3 401(k) Discrimination Limits.

(a) Limits on Deferral Percentages. For any Plan Year, Section
401(k)(3) Contributions, as defined below, shall in all events be caused to
comply with the requirements of Section 401(k)(3) of the Code. The
requirements of Section 401(k)(3) of the Code are as follows:

(1) either the excess of the actual deferral percentage (as
defined below) for such Plan Year for Active Participants who are
Highly Compensated Employees over that of Active Participants who are
non-Highly Compensated Employees is not more than two (2) percentage
points, and the actual deferral percentage for such Plan Year for
Active Participants who are Highly Compensated Employees is not more
than the actual deferral percentage for such Plan Year of Participants
who are non-Highly Compensated Employees multiplied by two (2), or

(2) the actual deferral percentage for such Plan Year for the
Active Participants who are Highly Compensated Employees is not more
than the actual deferral percentage for such Plan Year of Active
Participants who are non-Highly Compensated Employees multiplied by
1.25.

(b) Section 401(k)(3) Contributions. "Section 401(k)(3) Contributions"
include Employer Compensation Reduction Contributions and, at the
Committee's election, all or any portion of the Special Employer
Contributions, or the matching contributions (as defined in Section
401(m)(4)(A) of the Code) and/or qualified non-elective contributions (as
defined in Section 401(m)(4)(C) of the Code) made under any Related Plan
to the extent permitted in applicable regulations and to the extent the
Committee separately accounts therefor (including separate accounting for
income, gains, losses, withdrawals, and other credits or charges).

(1) The actual deferral percentage for a specified group of
Employees or a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of the amount
of Section

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<PAGE>

401(k)(3) Contributions actually made on behalf of each such Employee
for such Plan Year (excluding excess deferrals of non-Highly
Compensated Employees to the Plan or any Related Plan) divided by the
Employee's Compensation. Such ratios and the actual deferral
percentage for each group shall be calculated to the nearest one-
hundredth of one percent.

(2) The actual deferral percentage of an eligible Highly
Compensated Employee to whom the Family Member rules of Section
2.23(d) apply shall equal the actual deferral percentage determined by
combining the Section 401(k)(3) Contributions and Compensation of all
Family Members and the actual deferral percentage of Family Members
shall not be considered separately.

(d) Limits on Section 401(k)(3) Contributions.

(1) The Committee may establish, from time to time, such rules,
restrictions, and limitations as it may deem appropriate to ensure
that Section 401(k)(3) Contributions made to the Plan satisfy the
requirement of Section 401(k)(3) of the Code as set forth herein. If
the Committee determines that it is necessary or desirable, the
Committee may reduce or completely disallow Employer Compensation
Reduction Contributions for Highly Compensated Employees, including
Employer Compensation Reduction Contributions already made to the Plan
for that Plan Year.

(2) Upon reduction or disallowance by the Committee, the amount
by which the Employer Compensation Reduction Contributions of Highly
Compensated Employees exceed the Committee's determination of
allowable Employer Compensation Reduction Contributions for Highly
Compensated Employees for the Plan Year shall be reduced under the
following leveling method: the unmatched Employer Compensation
Reduction Contributions and then, if necessary, the matched Employer
Compensation Reduction Contributions, of the Highly Compensated
Employee with the highest actual deferral percentage shall be reduced
to the extent necessary to enable the Plan to satisfy the requirement
of Section 401(k)(3) of the Code or to reduce such Highly Compensated
Employee's actual deferral percentage to equal that of the Highly
Compensated Employee with the next highest actual deferral percentage.
This process shall be repeated until the Plan satisfies the
requirements of Section 401(k)(3) of the Code.

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<PAGE>

(3) Notwithstanding Section 5.3(d)(2), any reduction of
contributions for a Highly Compensated Employee to whom the Family
Member rules of Section 2.23(d) apply is accomplished by reducing the
actual deferral percentage as required under Section 5.3(d)(2) and the
excess contributions shall be allocated among the Family Members in
proportion to the Employer Compensation Reduction Contributions of
each Family Member that are combined to determine the actual deferral
percentage.

(4) The Committee shall, after the close of the Plan Year, and no
later than 12 months following the close of the Plan Year in which the
reduced Employer Compensation Reduction Contributions were deferred,
distribute the amount of such contributions, including any income
earned on such amounts (determined under Section 5.3(f)), to the
Highly Compensated Employees (or Family Member) on whose behalf such
contributions were made.

(e) Aggregation Rules. Notwithstanding the foregoing provisions in
this Section 5.3, if a Related Plan which contains a cash or deferred
arrangement and the Plan are treated as one plan for purposes of Section
401(a)(4) or 410(b) of the Code, such plans shall be treated as one
arrangement under this Section 5.3, and further provided that if a Highly
Compensated Employee is a participant under a cash or deferred arrangement
under the Plan and a Related Plan, such plans shall be treated as one
arrangement for purposes of determining the actual deferral percentage for
such Participant.

(f) Allocation of Income. Income equal to the sum of the amounts
determined under (l) and (2) below shall be allocated to and distributed
with any amounts distributed to a Participant as follows:

(1) Income for Plan Year. Income for a completed Plan Year shall
equal the net income for the Plan Year allocable to each of a
Participant's respective Accounts to which his Section 401(k)(3)
Contributions for the Plan Year are allocated prior to distribution of
any excess contributions, multiplied by a fraction, the numerator of
which is the amount of Employer Compensation Reduction Contributions
so distributed and the denominator of which is the total of such
Account balances as of the last day of the Plan Year (prior to
distribution of any excess contribution for such Plan Year and prior
to allocation of income, gains, losses and expenses thereto).

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<PAGE>

(2) Income for Period Between End of Plan Year and Distribution.
Income for the period between the end of a Plan Year and the date of a
distribution shall equal the product of the number of months which
have elapsed since the end of the preceding Plan Year and the date of
the distribution multiplied by 10 percent multiplied by the income
allocated to such distributed amounts under subsection (l) above. For
this purpose, a distribution made on or before the 15th day of a
month shall be deemed to have been made on the last day of the prior
month, and a distribution made after the 15th day of a month shall
be deemed to have been made on the first day of the next month.

5.4 Restrictions on Employer Matching Contributions.

(a) Limits on Contribution Percentages. For any Plan Year, Section
401(m) Contributions, as defined below, shall in all events be caused to
comply with the requirements of Section 401(m) of the Code. The
requirements of Section 401(m) of the Code are as follows:

(1) either the excess of the average contribution percentage (as
defined below) for the Plan Year for the group of Active Participants
who are Highly Compensated Employees over that of all Active
Participants who are non-Highly Compensated Employees is not more than
two (2) percentage points, and the average contribution percentage for
the Plan Year for the group of Active Participants who are Highly
Compensated Employees is not more than the average contribution
percentage for the Plan Year of all Active Participants who are non-
Highly Compensated Employees multiplied by two (2), or

(2) the average contribution percentage for the Plan Year for
Active Participants who are Highly Compensated Employees is not more
than the average contribution percentage for the Plan Year of all
Active Participants who are non-Highly Compensated Employees
multiplied by 1.25.

(b) Section 401(m) Contributions. "Section 401(m) Contributions"
include Employer Matching Contributions and, at the Committee's election,
(l) all or any portion of the Special Employer Contributions, or the
qualified nonelective contributions (as defined in Section 401(m)(4)(C) of
the Code) made under any Related Plan and (2) all or any portion of the
Employer Compensation Reduction Contributions or elective deferrals (as
defined in Section 402(g) of the Code) made under any

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<PAGE>

Related Plan to the extent permitted in applicable regulations and to the
extent the Committee separately accounts therefor (including separate
accounting for income, gains, losses, withdrawals, and other credits or
charges).

(1) The average contribution percentage for a specified group of
Participants for a Plan Year shall be the average of the ratios
(calculated separately for each Active Participant in such group) of
the amount of Section 401(m) Contributions actually paid over to the
Plan on behalf of each Active Participant divided by the Active
Participant's Compensation. Such ratios and the average contribution
percentage for each group shall be calculated to the nearest one-
hundredth of one percent.

(2) The average contribution percentage of a Highly Compensated
Employee to whom the Family Member rules of Section 2.23(d) apply
shall equal the average contribution percentage determined by
combining the Section 401(m) Contributions and Compensation of all
Family Members and the average contribution percentage of Family
Members shall not be considered separately.

(d) Limits on Section 401(m) Contributions.

(1) The Committee may establish, from time to time such rules,
restrictions and limitations as it may deem appropriate to ensure that
Section 401(m) Contributions made to the Plan satisfy the requirements
of Section 401(m) of the Code set forth herein. If the Committee
determines that it is necessary or desirable, the Committee may reduce
or disallow Employer Matching Contributions or Employer Compensation
Reduction Contributions for Highly Compensated Employees, including
Employer Matching Contributions or Employer Compensation Reduction
Contributions already made for that Plan Year.

(2) Upon reduction or disallowance by the Committee, the amount
by which the Employer Compensation Reduction Contributions or Employer
Matching Contributions of Highly Compensated Employees exceed the
Committee's determination of allowable Employer Compensation Reduction
Contributions or Employer Matching Contributions for Highly
Compensated Employees for the Plan Year shall be reduced under the
following leveling method: the Employer Matching

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<PAGE>

Contributions and, if necessary, the matched Employer Compensation
Reduction Contributions with respect thereto and the unmatched
Employer Compensation Reduction Contributions of the Highly
Compensated Employee with the highest average contribution percentage
shall be reduced to the extent necessary to enable the Plan to satisfy
the requirement of Section 401(m) of the Code or to reduce such Highly
Compensated Employee's average contribution percentage to equal that
of the Highly Compensated Employee with the next highest average
contribution percentage. This process shall be repeated until the Plan
satisfies the requirements of Section 401(m) of the Code.

(3) Notwithstanding Section 5.4(d)(2), any reduction of
contributions for a Highly Compensated Employee to whom the Family
Member rules of Section 2.23(d) apply is accomplished by reducing the
average contribution percentage as required under Section 5.4(d)(2),
and the excess contributions shall be allocated among the Family
Members in proportion to the Employer Compensation Reduction
Contributions or Employer Matching Contributions of each Family Member
that are combined to determine the average contribution percentage.

(4) The Committee shall, after the close of the Plan Year, and no
later than 12 months following the close of the Plan Year in which the
reduced Employer Compensation Reduction Contributions were deferred or
the reduced Employer Matching Contributions arose, distribute the
amount of such contributions, including any income earned on such
amounts (determined under Section 5.4(f)), to the Highly Compensated
Employees (or Family Members) on whose behalf such contributions were
made.

(e) Aggregation. Notwithstanding any provision in this Section 5.4 to
the contrary, if a Related Plan to which matching contributions and
employee contributions are made and the Plan are treated as one plan for
purposes of Code Section 401(a)(4) or Code Section 410(b), such plans shall
be treated as one arrangement under this Section, and if a Highly
Compensated Employee is a participant under any Related Plan to which
matching contributions and employee contributions are made, such plan and
the Plan shall be treated as one arrangement for purposes of determining
the average contribution percentage of much Highly Compensated Employee.

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<PAGE>

(f) Allocation of Income. Income equal to the sum of the amounts
determined under (1) and (2) below shall be allocated to and distributed
with any amounts distributed to a Participant as follows:

(1) Income for Plan Year. Income for a completed Plan Year shall
equal the net income for the Plan Year allocable to each of a
Participant's respective Accounts to which his Section 401(m)
Contributions for the Plan Year are allocated prior to distribution of
any excess contributions, multiplied by a fraction, the numerator of
which is the amount of Employer Compensation Reduction Contributions
and Employer Matching Contributions so distributed and the denominator
of which is the total of such Account balances as of the last day of
the Plan Year (prior to distribution of any excess contribution for
such Plan Year and prior to allocation of income, gains, losses and
expenses thereto).

(2) Income for Period Between End of Plan Year and Distribution.
Income for the period between the end of a Plan Year and the date of a
distribution shall equal the product of the number of months which
have elapsed since the end of the preceding Plan Year and the date of
the distribution multiplied by 10 percent multiplied by the income
allocated to such distributed amounts under subsection (1) above. For
this purpose, a distribution made on or before the 15th day of a month
shall be deemed to have been made on the last day of the prior month,
and a distribution made after the 15th day of a month shall be deemed
to have been made on the first day of the next month.

5.5 Multiple Use of Section 5.3 and Section 5.4. Notwithstanding Section
5.3 and Section 5.4, the sum of the actual deferral percentages and the average
contribution percentages, for a Plan Year, of the Highly Compensated Employees
who are Active Participants shall not exceed the sum of (a) plus (b) where:

(a) is one hundred and twenty-five percent (125%) of the greater of
(or, at the election of the Committee, the lesser of) (1) the actual
deferral percentages for such Plan Year of the non-Highly Compensated
Employees who are Active Participants, or (2) the average contribution
percentage for such Plan Year of such non-Highly Compensated Employees; and

(b) is two (2) percent plus the lesser of (or, at the election of the
Committee, the greater of) the amount

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<PAGE>

determined under Section 5.5(a)(1) or the amount determined under Section
5.5(a)(2), but in no event shall this amount exceed two hundred percent
(200%) of the lesser (or, at the election of the Committee, the greater of)
of the amount determined under Section 5.5(a)(1) or the amount determined
under Section 5.5(a)(2).

The Committee may establish, from time to time, such rules, restrictions and
limitations as it may deem appropriate to ensure that the above limitations are
met. If the Committee determines that the reduction or disallowance of Employer
Compensation Reduction Contributions or Employer Matching Contributions is
necessary or desirable with respect to Highly Compensated Employees, the
Committee may reduce or disallow Employer Compensation Reduction Contributions
or Employer Matching Contributions for such Highly Compensated Employees,
including Employer Compensation Reduction Contributions or Employer Matching
Contributions already made for that Plan Year, as provided in Section 5.3(d) and
(f) or Section 5.4(d) and (f).

5.6 Limitations on Contributions.

(a) Limitations on Contributions. Any of the provisions herein to the
contrary notwithstanding, a Participant's Annual Additions (as defined in
Section 5.6(b)(1) below) for any Plan Year shall not exceed his Maximum
Annual Additions (as defined in Section 5.6(b)(2) below) for the Plan Year.
If a Participant's Annual Additions exceed his Maximum Annual Additions,
the Participant's Annual Additions for the Plan Year shall be reduced
according to Section 5.6(c) by the amount necessary to eliminate such
excess (the "Annual Excess").

(b) Definitions.

(1) "Annual Additions" of a Participant for a Plan Year means the
sum of the following:

(A) Employer Profit Sharing Contributions, Minimum Employer
Contributions and Forfeitures for the Plan Year allocated to his
Profit Sharing Contribution Account,

(B) Employer Compensation Reduction Contributions for the
Plan Year allocated to his Compensation Reduction Account,

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(D) Employer Matching Contributions allocated to his
Matching Contribution Account,

(E) all employer contributions and forfeitures for such Plan
Year allocated to such Participant's accounts for such Plan Year
under any Related Defined Contribution Plan,

(F) the amount of nondeductible employee contributions under
any Related Plan made by the Participant during the Plan Year,
and

(G) solely for purposes of the limit described in Section
5.6(b)(2)(B), contributions allocated to any individual medical
account established for the Participant, which is part of a
Related Defined Benefit Plan, as provided in Code Section 415(1)
and any amount attributable to post-retirement medical benefits
allocated to an account, established under Code Section
419A(d)(1), for the Participant.

Rollover Contributions to the Plan shall not be included as a part of the
Participant's Annual Additions. Employer Contributions distributed under
Sections 5.2 and 5.3 in any Plan Year shall be included as a part of the
Participant's Annual Additions.

(2) "Maximum Annual Additions" of a Participant for a Plan Year
means the lesser of (A) and (B) below:

(A) 25% of the Participant's Compensation or

(B) the greater of (i) $30,000, or (ii) one-fourth (1/4) of
the amount in effect under Section 415(b)(1)(A) of the Code
($98,064 in 1989, adjusted in subsequent years as determined in
accordance with regulations prescribed by the Secretary of
Treasury or his delegate pursuant to the provisions of Section
415(d) of the Code).

(c) Elimination of Annual Excess. If a Participant has an Annual
Excess for a Plan Year, such excess shall not be allocated to the
Participant's Accounts but shall be eliminated as follows:

(1) The Participant's unmatched Employer Compensation Reduction
Contributions and his Special Employer Contributions allocated to his
Compensation Reduction Account shall be reduced by first reducing

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his Special Employer Contributions and thereafter his unmatched
Employer Compensation Reduction Contributions to the extent necessary
to eliminate the Annual Excess.

(2) If any Annual Excess remains, the Participant's matched
Employer Compensation Reduction Contributions and Employer Matching
Contributions shall be reduced in proportionate amounts to the extent
necessary to eliminate the Annual Excess.

(3) If any Annual Excess remains, the Participant's Employer
Profit Sharing Contributions, Minimum Employer Contributions and
Forfeitures shall be reduced in the order stated to the extent
necessary to eliminate the remaining Annual Excess.

(4) If any Annual Excess remains, contributions allocated to such
Participant's individual medical account, which is part of a Related
Defined Benefit Plan, as provided in Code Section 415(1), and any
amount attributable to post-retirement medical benefits allocated to
such Participant, established under Code Section 419A(d)(1), shall be
reduced in proportionate amounts to the extent necessary to eliminate
the remaining Annual Excess.

Any Employer Compensation Reduction Contributions or Employer Matching
Contributions reduced or eliminated under this Section 5.6 shall be
distributed to the Participant on whose behalf such contributions were
made. Any allocations of Employer Profit Sharing Contributions, Minimum
Employer Contributions, Forfeitures, and Special Employer Contributions
reduced or eliminated under this Section 5.6 shall, subject to the limits
of this Section 5.6, be reallocated to the Accounts of the other
Participants as of the last day of that Plan Year in the same manner as
such Contributions were initially allocated. Any Employer Profit Sharing
Contributions, Forfeitures, Minimum Employer Contributions and Special
Employer Contributions which cannot, under the limits of this Section 5.6,
be reallocated to the Accounts of other Participants in the Plan Year shall
be held, subject to the limits of this Section 5.6, in a suspense account
and reallocated in the subsequent Plan Year prior to making any Employer
Contributions in any subsequent Plan Year. On Plan termination any amounts
held in a suspense account which, under the limits of this Section 5.6,
cannot be reallocated to Participants in the Plan Year of the termination,
shall be returned to the Employers in such proportions as shall be
determined by the Committee.

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(d) If a Participant participates or has participated in any Related
Defined Benefit Plan, the sum of the Defined Benefit Plan Fraction (as
defined in Section 415(e)(2) of the Code) and the Defined Contribution Plan
Fraction (as defined in Section 415(e)(3) of the Code) for such Participant
shall not exceed 1.0 (called the "Combined Fraction"). If the Combined
Fraction of such Participant exceeds 1.0, the Participant's Defined Benefit
Plan Fraction shall be reduced (a) first, by limiting the Participant's
annual benefits payable from the Related Defined Benefit Plan in which he
participates to the extent provided therein and (b) second, by reducing the
Participant's Maximum Annual Additions to the extent necessary to reduce
the Combined Fraction of such Participant to 1.0.

(e) For purposes of this Section 5.6, the standard of control for
determining a Commonly Controlled Entity under Sections 414(b) and 414(c)
of the Code (and thus also Related Plans) shall be deemed to be "more than
50%" rather than "at least 80%".

ARTICLE VI

Allocations of Contributions

6.1 Employer Profit Sharing Contributions and Forfeitures. As of the last
day of the Plan Year, Employer Profit Sharing Contributions and Forfeitures
shall be allocated to the Employer Profit Sharing Contribution Account of each
Active Participant in an amount equal to the product of the aggregate amount of
the Employer Profit Sharing Contributions and Forfeitures, multiplied by a
fraction, the numerator of which is the Active Participant's Compensation and
the denominator of which is the Compensation of all Active Participants.

6.2 Special Employer Contributions. As of the last day of the Plan Year,
all Special Employer Contributions for the Plan Year shall be allocated to the
Compensation Reduction Account of each non-Highly Compensated Employee who is an
Active Participant for the Plan Year in an amount equal to the Special Employer
Contribution (a) pursuant to Section 5.3, multiplied by a fraction, the
numerator of which is such Active Participant's Employer Compensation Reduction
Contribution for the Plan Year, and the denominator of which is the total of all
Employer Compensation Reduction Contributions for the Plan Year made for all
non-Highly Compensated Employees who are Active Participants in the Plan, and
(b) pursuant to Section 5.4, multiplied by a fraction, the numerator of which is
such Active Participant's Employer Matching Contribution for the Plan Year,

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and the denominator of which is the total Employer Matching Contributions made
for all non-Highly Compensated Employees who are Active Participants in the
Plan.

6.3 Employer Compensation Reduction Contributions. As of each Valuation
Date, Employer Compensation Reduction Contributions made since the immediately
preceding Valuation Date shall be allocated to the Compensation Reduction
Account of the Active Participant on whose behalf they were made.

6.4 Employer Matching Contributions.

(a) Employer Matching Contributions made after the end of a Plan Year
on account of Employer Compensation Reduction Contributions made during
such Plan Year shall be allocated as of the last day of the Plan Year to
the Matching Contribution Account of each Active Participant on whose
behalf they were made.

(b) Employer Matching Contributions made during a Plan Year on account
of Employer Compensation Reduction Contributions made during such Plan Year
shall be allocated to the Matching Contribution Account of each Active
Participant on whose behalf they were made as soon as reasonably
practicable.

ARTICLE VII

Trustee and Trust Fund

7.1 Trust Agreement. The Company and the Trustee have entered into a Trust
Agreement which provides for the investment of the assets of the Plan and
administration of the Trust Fund. The Trust Agreement, as from time to time
amended, shall continue in force and shall be deemed to form a part of the Plan,
and any and all rights or benefits which may accrue to any person under the Plan
shall be subject to all the terms and provisions of the Trust Agreement.

7.2 Selection of Trustee. The Board of Directors shall select the Trustee
in accordance with the Trust Agreement. The subsequent resignation or removal of
a Trustee and the appointment of a successor Trustee and the approval of his or
its accounts shall all be accomplished in the manner provided in the Trust
Agreement.

7.3 Trustee's Duties. The powers, duties and responsibilities of the
Trustee shall be as stated in the Trust Agreement, and nothing contained in this
Plan either expressly or by implication shall be deemed to impose any additional

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powers, duties or responsibilities upon the Trustee. All Employer Contributions
and Rollover Contributions shall be paid into the Trust, and all benefits
payable under the Plan shall be paid from the Trust. An Employer shall have no
rights or claims of any nature in or to the assets of the Trust Fund except the
right to require the Trustee to hold, use, apply and pay such assets held by the
Trustee, in accordance with the directions of the Committee, for the exclusive
benefit of the Participants and their Beneficiaries, except as otherwise
provided in Sections 5.6 and 7.10.

7.4 Trust Expenses. All clerical, legal and other expenses of the Plan and
the Trust and Trustee's fees, if any, shall be paid by the Trust except to the
extent paid by an Employer.

7.5 Trust Entity. The Trust under this Plan from its inception shall be a
separate entity aside and apart from Employers or their assets. The Trust, and
the corpus and income thereof, shall in no event and in no manner whatsoever be
subject to the rights or claims of any creditor of any Employer.

7.6 Separate Accounts. The Committee, or the Trustee or other person
designated by the Committee, on the Committee's behalf, shall maintain separate
Accounts for each Participant as described in Section 2.1 hereof. Every
adjustment to a Participant's Accounts shall be considered as having been made
on the relevant Valuation Date regardless of the date of actual entry or receipt
by the Trustee of Employer Contributions and Employee Contributions for a Plan
Year.

7.7 Investment Funds.

(a) Each Participant (or Beneficiary) shall have the right to elect,
at such times, on such forms and in accordance with such rules and
procedures as the Committee may establish, to have his Accounts invested in
the following Investment Funds:

(i) Pooled Investment Funds.

(A) The Balanced Fund which is invested in stocks, bonds, and
other fixed income securities to provide a diversified account with
both the possibility of stock appreciation and the protection of fixed
income.

(B) The Current Yield Fund which is invested in guaranteed
investment contracts and other fixed income investments, including
money market securities such as commercial paper and certificates of
deposit.
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(D) The Performance Investment Fund which is aggressively
invested in common stock, bonds, or short-term money market
securities, depending on their prevailing relative attraction.

(E) The World Wide Equity Fund which is invested in both U.S. and
foreign common stocks.

(F) Other Funds. Such other funds as the Committee shall from
time to time establish.

(2) Separate Investment Funds, which are Investment Funds
(including but not limited to mutual funds or annuity contracts)
providing for investment in accordance with the direction of
individual Participants for whose account such Investment Funds
are maintained as the Committee shall from time to time
establish, subject to such conditions and limitations as it shall
impose.

The Committee, in its discretion, may eliminate any of the above Investment
Funds at any time.

(b) Participant Elections. A Participant's (or Beneficiary's)
investment election or change of election may be made at any time and shall
be effective on the later of (l) if received by the Committee prior to the
21st day of a calendar month, the first day of the month following the
month in which the election is received and, if received on or after the
21st day of any calendar month, the first day of the second calendar month
beginning after the month in which the election is received or (2) such
later date as the Participant shall specify, or as soon thereafter as
reasonably possible, provided that a Participant may change his investment
election not more than four times in any Plan Year and provided that the
Committee, in its discretion, may permit elections to be made, changed or
to become effective at any additional times as it may designate. A
Participant's (or Beneficiary's) investment election shall remain effective
until such time as the Participant (or Beneficiary) files a new investment
election and it becomes effective. The investment election of a deceased
Participant shall remain effective until such time as his Beneficiary files
a new investment election and it becomes effective. If a Participant (or
Beneficiary) fails to make an investment election, his Accounts shall be
invested in the Investment Fund designated from time to time by the
Committee.

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7.8 Trust Income. As of each Valuation Date the fair market value of the
Trust shall be determined, recorded and communicated in writing to the Committee
by the Trustee. The Trustee shall also determine the fair market value of each
Separate Investment Fund. The Trustee's determination of fair market value shall
be final and conclusive on all persons. As of each Valuation Date the Committee
shall determine the net income, gains or losses of the Trust Fund and of each
Separate Investment Fund since the preceding Valuation Date. The net income,
gains or losses thus derived from the Trust shall be accumulated and shall from
time to time be invested as a part of the Trust Fund. The net income gains or
losses of each Separate Investment Fund shall be credited or charged to such
Separate Investment Fund. The Committee shall proportionately allocate the net
income, gains or losses of each Pooled Investment Fund among (a) the sum of all
Participants' Accounts invested in such Pooled Investment Fund, and (b) the
suspense account maintained under Section 5.6(c), all as valued as of the
preceding Valuation Date (reduced by any distributions therefrom since the
preceding Valuation Date) by crediting (or charging) each such Account by an
amount equal to the net income, gains or losses of each Pooled Investment Fund
multiplied by a fraction, the numerator of which is the balance of such Account
invested in such Pooled Investment Fund as of the preceding Valuation Date
(reduced by any distributions therefrom since the preceding Valuation Date) and
the denominator of which is the total value of all Accounts invested in such
Pooled Investment Fund as of the preceding Valuation Date (reduced by any
distributions therefrom since the preceding Valuation Date).

7.9 Correction of Error. In the event of an error in the adjustment of a
Participant's Account, the Committee, in its sole discretion, may correct such
error by either crediting or charging the adjustment required to make such
correction to or against income or as an expense of the Trust for the Plan Year
in which the correction is made. Except as provided in this Section, the
accounts of other Participants shall not be readjusted on account of such error.

7.10 Right of the Employers to Trust Assets. Except as provided in Section
5.6, the Employers shall have no right or claims of any nature in or to the
Trust Fund except the right to require the Trustee to hold, use, apply, and pay
such assets in its possession in accordance with the Plan for the exclusive
benefit of the Participants or their Beneficiaries and for defraying the
reasonable expenses of administering the Plan and Trust; provided, that:

(a) if an Employer Contribution is conditioned upon the initial
qualification of the Plan under Sections 401(a)

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or 401(k) of the Code and if the Plan does not so qualify, Employer
Compensation Reduction Contributions conditioned on such qualification
shall be distributed to the appropriate Participant and other Employer
Contributions shall be returned to the appropriate Employer within one year
of the denial of qualification of the Plan;

(b) if, and to the extent that, a deduction for Employer Contributions
under Section 404 of the Code is disallowed, Employer Compensation
Reduction Contributions conditioned on deductibility shall be distributed
to the appropriate Participant and other Employer Contributions conditioned
upon deductibility shall be returned to the appropriate Employer within one
year after the disallowance of the deduction; and

(c) if, and to the extent that, an Employer Contribution is made
through mistake of fact, Employer Compensation Reduction Contributions
shall be distributed to the appropriate Participant and other Employer
Contributions shall be returned to the appropriate Employer within one year
of the payment of the contribution.

All Employer Contributions are conditioned on the Plan's being
initially qualified under Section 401(a) of the Code, all Employer
Compensation Reduction Contributions are conditioned on the Plan's being
initially qualified under Section 401(k) of the Code and all Employer
Contributions are conditioned upon their being deductible under Section 404
of the Code.

ARTICLE VIII

Benefits

8.1 Payment of Benefits in General. A Participant's benefits under this
Plan shall be payable in accordance with the provisions of this Article, on or
after the Valuation Date coinciding with or next following the Participant's or
Beneficiary's election or other right to commence to receive such benefits.

(a) If a Participant has a Termination of Employment due to
retirement on or after Normal Retirement Date, Disability, or for any other
reason other than death, the Participant's Accrued Benefit shall be payable
in a lump sum, in accordance with and subject to the limitations of Section
8.2.

(b) If a Participant dies, his Accrued Benefit shall be payable to
his surviving spouse, or to his other

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Beneficiary or Beneficiaries if he was not married at the time of his death
or to the extent he names a Beneficiary other than his surviving spouse, in
a lump sum, in accordance with and subject to the limitations of Section
8.3.

(c) If a Participant suffers a financial hardship, he may elect to
receive a distribution of all or a portion of his Accrued Benefit in
accordance with and subject to the limitations of Section 8.4(a).

(d) If a Participant attains age 59-1/2, he may elect to receive a
distribution of his Accrued Benefit, in a lump sum, in accordance with and
subject to the limitations of Section 8.4(b).

(e) If a Participant made Employee Contributions to the Plan prior to
January l, 1983, he may elect to receive a distribution of all or a portion
of such amounts in accordance with and subject to the limits of Section
4.7.

(f) If a Participant has made a Rollover Contribution to the Plan on
or after January l, 1989, he may elect to receive a distribution of such
amounts in accordance with and subject to Sections 8.2, 8.3 and 8.4(b).

(g) If a Participant is otherwise entitled to a distribution due to
retirement on or after Normal Retirement Date, Disability, death, or other
Termination of Employment, the Committee shall require the immediate
distribution of small Accrued Benefits in accordance with and subject to
the limitations of Section 8.10, notwithstanding the provisions of Sections
8.2, 8.3, and 8.9.

8.2 Payment of Accrued Benefit on Termination of Employment.

(a) Method of Payment. If a Participant has a Termination of
Employment for any reason other than the Participant's death, the Trustee
shall distribute to the Participant his Accrued Benefit after the later of
the Participant's Normal Retirement Date or Termination of Employment,
provided that the Participant may elect another date for distribution. If
the Participant's election is received by the Committee (or, if no election
is received, if the later of the Participant's Normal Retirement Date or
Termination of Employment occurs) prior to the 21st day of a calendar
month, the Participant's Accrued Benefit shall be valued as of the next
following Valuation Date and shall be distributed within the first week of
the second month following such Valuation Date. If the Participant's

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election is received (or, if no election is received, if the later of the
Participant's Normal Retirement Date or Termination of Employment occurs)
on or after the 21st day of any calendar month, the Participant's Accrued
Benefit shall be valued as of the Valuation Date next following the last
day of the calendar month in which the election is received (or, if
applicable, in which the later of the Participant's Normal Retirement Date
or Termination of Employment occurs) and shall be distributed within the
first week of the second month following such Valuation Date. Payment shall
be made in one lump sum.

(b) Notwithstanding any provision herein to the contrary, benefit
payments shall be made not later than the Required Beginning Date,
regardless of whether the Participant has elected to defer such payments
under this Section.

8.3 Payment of Accrued Benefit on Death.

(a) Payment to Spouse or Other Beneficiary. On the death of a
Participant before his Accrued Benefit has been paid from the Plan, the
Trustee shall pay the Participant's Accrued Benefit to the Participant's
surviving spouse, who shall be deemed to be the Participant's designated
Beneficiary, subject to the following sentence. If the Participant was not
married, or to the extent the Participant named a Beneficiary other than
his surviving spouse to receive some or all of his Accrued Benefit under
the Plan (and his surviving spouse consented in accordance with Section 8.9
to the naming of another Beneficiary), the Trustee shall pay the
Participant's Accrued Benefit to his Beneficiary.

(b) Method of Payment. Payments of the Participant's Accrued Benefit
shall be paid in the form of one lump sum to the Participant's surviving
spouse, or as permitted in Section 8.3(a), to the other Beneficiary or
Beneficiaries designated by the Participant. The Accrued Benefit shall be
(l) if the Participant dies prior to the 21st day of a calendar month,
valued as of the next following Valuation Date and distributed within the
first week of the second month following such Valuation Date and (2) if the
Participant dies on or after the 21st day of a calendar month, valued as of
the Valuation Date next following the last day of the calendar month in
which the Participant died and distributed within the first week of the
second month following such Valuation Date. The surviving spouse, or other
Beneficiary or Beneficiaries may elect (if they are not prohibited by an
election of the Participant from so electing) to defer the timing of the
receipt of the

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Accrued Benefit. If the timing of receipt is deferred, the Accrued Benefit
shall be (l) if the election for distribution is received by the Committee
prior to the 21st day of a calendar month, valued as of the next
following Valuation Date and distributed within the first week of the
second month following such Valuation Date and (2) if the election for
distribution is received on or after the 21st day of a calendar month,
valued as of the Valuation Date next following the last day of the calendar
month in which the election is received and distributed within the first
week of the second month following such Valuation Date.

(c) Beneficiary Designation. The Participant may designate a
Beneficiary or Beneficiaries to receive the undistributed portion of the
Participant's Accrued Benefit. Such Beneficiary or Beneficiaries shall be
designated by the Participant on a Beneficiary Designation Form provided by
the Committee, and may be changed from time to time by filing a new
Beneficiary Designation Form with the Committee. No designation of
Beneficiary or change of Beneficiary shall be effective until filed with
the Committee. If a Participant (l) fails to file a valid Beneficiary
Designation Form, or (2) if all persons designated on the Beneficiary
Designation Form predecease the Participant (or, in the case of a
Beneficiary other than an individual, ceases to exist prior to the
Participant's death) or, (3) if any Beneficiary other than the surviving
spouse survives the Participant but dies (or ceases to exist) prior to the
receipt of the total amount to which such Beneficiary would have been
entitled, and if there are no remaining contingent Beneficiaries, then the
Trustee shall distribute the portion of such Participant's Accrued Benefit
which is subject to the Beneficiary Designation Form in one lump sum to the
following who shall be deemed to have been designated as Beneficiaries by
the Participant in the following order of precedence:

(l) surviving spouse;

(2) lawful descendants including adopted children and descendants
of his deceased children, including adopted children, per stirpes, and

(3) estate.

(d) Period of Distribution. Notwithstanding any other provisions of
this Plan, if a Participant dies before his entire Accrued Benefit has been
distributed and before his Required Beginning Date, the Participant's
Accrued Benefit shall be distributed no later than December 31 of the
calendar year which contains the fifth anniversary of

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his death; except that if the Beneficiary is the Participant's surviving
spouse, his Accrued Benefit shall be distributed no later than December 31
of the calendar year in which the Participant would have attained the age
of 70-1/2 years.

(e) Any amount paid to a child, in accordance with regulations
prescribed by the Secretary of the Treasury, shall be treated as if it had
been paid to the Participant's surviving spouse if such amount will become
payable to the surviving spouse upon such child reaching majority (or such
other events as the Secretary of the Treasury may by regulations
prescribe).

8.4 Participant Withdrawals.

(a) Hardship Withdrawals. A Participant prior to a Termination of
Employment may, on such form and in such manner as the Committee shall
prescribe, request a distribution (from his Accounts in the order described
in Section 8.4(a)(3)) on account of an immediate and heavy financial need
of the employee (described in Section 8.4(a)(l) below) provided such
distribution does not exceed the amount necessary (described in Section
8.4(a)(2) below) to satisfy such immediate and heavy financial need.

(l) Immediate and Heavy Financial Need.

(A) A distribution will be deemed to be made on account of
an immediate and heavy financial need of the Participant if the
distribution is on account of:

(i) Medical expenses described in Section 213(d) of the
Code incurred by the Participant, the Participant's spouse
or any dependent of the Participant (as defined in Section
152 of the Code);

(ii) Purchase (excluding mortgage payments) of a
principal residence for the Participant;

(iii) Payment of tuition for the next semester or
quarter of post-secondary education for the Participant or
the Participant's spouse, children, or dependents; or

(iv) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage
of the Participant's principal residence.

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(B) If the Participant requests a distribution for a purpose
which is not enumerated in Section 8.4(a)(l)(A), the Committee
shall permit such distribution upon determining that such
distribution is on account of an immediate and heavy financial
need, based upon all the facts and circumstances.

(2) Distribution Deemed Necessary to Satisfy Immediate and
Heavy Financial Need. A distribution will be deemed to be
necessary to satisfy an immediate and heavy financial need of a
Participant if either (A) or (B) below is satisfied:

(A) (i) The distribution is not in excess of the amount of
the immediate and heavy financial need of the Participant;

(ii) The Participant has obtained all distributions
other than hardship distributions, and all non-taxable loans
currently available under the Plan and all Related Plans;

(iii) The Participant's elective deferrals (as defined
in Section 402(g) of the Code) and employee contributions under
the Plan or any Related Plan shall be suspended for twelve months
after receipt of the hardship distribution; and

(iv) Employer Compensation Reduction Contributions made
on behalf of such Participant under the Plan or any Related Plan
for the Participant's taxable year immediately following the
taxable year of the hardship distribution shall not exceed the
maximum amount (described in Section 4.2) for such next taxable
year less the amount of such Participant's Compensation Reduction
Contributions for the taxable year of the hardship distribution.

(B) Based upon the Participant's representation that the
need cannot be relieved:

(i) through reimbursement or compensation by
insurance or otherwise;

(ii) by reasonable liquidation of the Participant's
assets, to the extent such liquidation would not itself
cause an immediate and heavy financial need;

(iii) by cessation of elective contributions (as
defined in Code Section 402(g)) under the Plan, or

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(iv) by other distributions or nontaxable (at the time of
the loan) loans from plans maintained by the Employer, or by
borrowing from commercial sources on reasonable commercial terms.

(3) Withdrawals under this Section 8.4(a) shall be paid first from
the Participant's Employee Contribution Account, then from his
Rollover Contribution Account, then from amounts allocated to his
Profit Sharing Contribution Account, then from amounts allocated to
his Matching Contribution Account, and then from amounts allocated to
his Compensation Reduction Account (but excluding any earnings on such
amounts).

(b) Withdrawal at or after Age 59-1/2. Any Participant who has
attained age 59-1/2 may elect in writing delivered to the Committee to have
part or all of his Accrued Benefit distributed in one (1) lump sum from his
Accounts in the following order: Employee Contribution Account, Rollover
Contribution Account, Profit Sharing Contribution Account, Matching
Contribution Account, Compensation Reduction Account, and Employer
Contribution Account. The Accrued Benefit shall be valued (l) if the
election is received by the Committee prior to the 21st day of a calendar
month, as of the next following Valuation Date and (2) if the election is
received on or after the 21st day of any calendar month, as of the
Valuation Date next following the last day of the calendar month in which
the election is received, and any payment thereof shall be made within the
first week of the second month following the applicable Valuation Date.

(c) Continued Participation. A Participant who receives a distribution
pursuant to Section 8.4(a) or (b) shall continue to participate in the Plan
in accordance with the provisions thereof.

8.5 Vested Interests. A Participant's Accrued Benefit is fully vested and
nonforfeitable at all times.

8.6 Deduction of Taxes from Amounts Payable. The Trustees may deduct from
the amount to be distributed such amount as the Trustees, in their sole
discretion, deem proper to protect the Trustees and the Trust against liability
for the payment of death, succession, inheritance, income, or other taxes, and
out of the money so deducted, the Trustees may discharge any such liability and
pay the amount remaining to the Participant or his Beneficiary, as the case may
be.

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8.7 Deadline for Payment of Benefits. Notwithstanding any other provision
herein, payment of a Participant's benefits shall be made (unless the
Participant elects otherwise) not later than sixty (60) days after the latest of
the close of the Plan Year in which (a) the Participant attains age sixty-five
(65), (b) occurs the tenth (10th) anniversary of the date on which the
Participant commenced participation in the Plan, and (c) the Participant had a
Termination of Employment, provided, however, that in no event shall payment of
benefits be made after a Participant's Required Beginning Date.

8.8 Facility of Payment. If a Participant or Beneficiary is declared an
incompetent or is a minor, and a conservator, guardian, or other person legally
charged with his care has been appointed, any benefits to which such Participant
or Beneficiary is entitled shall be payable to such conservator, guardian, or
other person legally charged with his care.

If a Participant or Beneficiary is incompetent, is a minor, or, in the
opinion of the Committee would fail to derive benefit from distribution of
funds, and if a conservator, guardian, or other person charged with his care has
not been appointed, the Committee, in its sole and exclusive discretion, may (a)
require the appointment of a conservator or guardian, (b) distribute the
Participant's Accrued Benefit to relatives of the Participant or Beneficiary for
the benefit of the Participant or Beneficiary, or (c) distribute such Accrued
Benefit directly to or for the benefit of the Participant or Beneficiary.

The decision of the Committee in such matters shall be final, binding, and
conclusive upon the Employer and the Trustees and upon each Employee,
Participant, Beneficiary, and every other person or party interested or
concerned. An Employer, the Trustees and the Committee shall not be under any
duty to see to the proper application of such payments made to a Participant,
conservator, guardian, or relatives of a Participant.

8.9 Spousal Consent to a Waiver. A spousal consent to the Participant's
naming of a Beneficiary other than his spouse shall:

(a) be in a writing acknowledging the effect of the consent;

(b) be witnessed by the Committee or a notary public;

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(d) designate a Beneficiary which may be further changed without
spousal consent only if the consent of the spouse expressly so permits;

provided that the consent of a Participant's spouse shall not be required if it
is established to the satisfaction of the Committee that such consent may not be
obtained because there is no spouse, because the spouse cannot be located or
because of such other circumstances as the Secretary of the Treasury may by
regulations prescribe; and further provided that the Committee may provide a
spousal consent form which provides that such consent once given is irrevocable.

8.10 Lump Sum Payment Without Election. Notwithstanding the provisions of
this Article to the contrary, if the Participant or Beneficiary is entitled to a
distribution due to the Participant's retirement on or after his Normal
Retirement Date, death, Disability or other Termination of Employment, and if
the value of the Participant's Accrued Benefit does not exceed $3,500, the
Committee shall, before the commencement of such distribution, direct the
immediate distribution of such benefit, if any, regardless of any election or
consent of the Participant, his spouse, or other Beneficiary.

8.11 Form of Payment. All payments under the Plan shall be made in cash.
---------------

8.12 Participant Loans.

(a) Upon proper application of a Participant, the Committee shall
grant a loan to such Participant in such amount and for such period as the
Committee shall determine, but not less than $500 and not exceeding the
lesser of:

(l) $50,000, reduced by the aggregate amount of all outstanding
loans to the Participant from the Plan and all Related Plans, and
further reduced by the excess (if any) of:

(A) the Participant's highest outstanding balance of loans
from the Plan and all Related Plans during the one-year period
ending on the day before the date on which such loan is made,
over

(B) the Participant's outstanding balance of loans from the
Plan and all Related Plans on the date on which such loan is
made; or

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(2) In the case of loans made after October l8, 1989, 50% of the
Participant's Accrued Benefit valued as of the most recent Valuation
Date for which a valuation has been completed on or preceding the date
of approval of the loan and in the case of loans made on or before
October 18, 1989, the amount determined pursuant to the following
schedule:

If the Participant's
Accrued Benefit Is: Participant Can Borrow:
------------------- -----------------------

$0 --- $ 10,000 80% of the Accrued
Benefit

$10,000.01 --- $ 14,000 $8,000 plus 1/2
multiplied by (Accrued
Benefit minus $10,000)

$14,000.01 --- $ 20,000 $10,000

$20,000.01 --- $100,000 50% of Accrued Benefit

(b) Any loan made under this Section 8.12 shall, by its terms, be
required to be repaid within five (5) years unless the loan is used to
acquire a dwelling unit which within a reasonable time is to be used
(determined at the time the loan is made) as a principal residence of the
Participant. All loans, except as provided in the regulations prescribed by
the Secretary of the Treasury, shall be amortized over the term of the loan
in substantially level payments not less frequently than quarterly.

(c) The Committee may grant such loans and may direct the Trustees to
lend Trust Fund assets to such Participant, provided that such loans are
available to all Participants on a reasonably equivalent basis, are not
made available to Highly Compensated Employees in amounts greater than the
amounts made available to other Employees, bear a reasonable rate of
interest, and are adequately secured. Any loan will be paid from the
Participant's Employer Contribution Account first, then from his
Compensation Reduction Contribution Account (earnings first, then balance
of account), then from his Matching Contribution Account, then from his
Profit Sharing Contribution Account, and then from his Rollover
Contribution Account. (A loan shall not be paid from a Participant's
Employee Contribution Account). Any such loan, subject to the foregoing,
shall be under such terms and conditions as the Committee may in its sole
discretion deem appropriate. Such loan, and any interest with respect
thereto, shall

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constitute a first lien upon the interest of such Participant in the
Accounts from and to the extent to which the loan is paid and shall, to the
extent that the loan may be unpaid at the time the Participant's Accounts
shall become payable, be deducted from the amount payable to such
Participant or his Beneficiary at the time of distribution of any portion
of his Account. In the event that a Participant fails to repay a loan
according to its terms and foreclosure occurs, the Plan may foreclose on
the portion of the Participant's Accounts which secure the loan and which
would be distributable to the Participant as of the earliest date the
Participant could elect distribution.

(d) The note representing the loan (and other loans to the same
Participant) shall be segregated in a separate fund held by the Trustee as
a separate ear-marked investment solely for the account of the Participant.
A Participant's payments to the Trust of principal and interest on a note
held in such a segregated fund shall be invested by the Trustee as elected
by the Participant as soon as reasonably practicable. The interest and
principal repayments of a Participant's loan shall be allocated to the
Participant's accounts in the following order: first to his Rollover
Contribution Account, then to his Profit Sharing Contribution Account, then
to his Matching Contribution Account, then to his Compensation Reduction
Account and then to his Employer Contribution Account.

8.13 Timing of Payment Due to Restrictions on Liquidation of Investments.
Notwithstanding any other provision of the Plan, payments which cannot be made
within the prescribed time periods due to restrictions on the liquidation of
investments or due to administrative delays shall be made as soon as reasonably
practicable.

ARTICLE IX

Administration

9.1 Board of Directors Duties. The Board of Directors shall have overall
responsibility for the establishment, amendment, termination, administration and
operation of the Plan, which responsibility it shall discharge by the
appointment and removal (with or without cause) of the members of the Committee,
to which is delegated the overall responsibility for the administration and
operation of the Plan and for appointing, supervising and terminating the
Trustees and any Investment Manager in accordance with the Trust Agreement.

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9.2 Committee Membership. The Committee shall consist of three (3) or more
members, who shall be appointed by the Board of Directors. In the absence of
such appointment, if the Trustees are one or more individuals, the Trustees
shall serve as the Committee, and if the Trustees are not one or more
individuals, the Board of Directors shall serve as the Committee. The members of
the Committee shall remain in office at the will of the Board of Directors, and
the Board of Directors may from time to time remove any of said members with or
without cause and shall appoint their successors. The Committee shall have the
general responsibility for the administration of the Plan and for carrying out
its provisions.

9.3 Committee Structure. Each member of the Committee shall be an officer,
director or Employee of an Employer hereunder, and may be a Participant or
Beneficiary. Any member of the Committee shall automatically cease to be a
member of the Committee on his ceasing to be an officer, director or Employee of
an Employer. Each person, upon becoming a member of the Committee, shall file an
acceptance thereof in writing with the secretary of the Company and the
secretary of the Committee. Any member of the Committee may resign by delivering
his written resignation to the secretary of the Company and the secretary of the
Committee, and such resignation shall become effective upon the date specified
therein. In the event of a vacancy in membership, the remaining members shall
constitute the Committee with full power to act until said vacancy is filled.

9.4 Committee Actions. The action of the Committee shall be determined by
the vote or other affirmative expression of a majority of its members. Action
may be taken by the Committee at a meeting or in writing without a meeting. The
Board of Directors shall choose a chairman who shall be a member of the
Committee and a secretary who may (but need not) be a member of the Committee.
The secretary shall keep a record of all meetings and acts of the Committee and
shall have custody of all records and documents pertaining to its operations.
Either the chairman or secretary may execute any certificate or other written
direction on behalf of the Committee.

9.5 Committee Duties. The Committee, on behalf of the Participants and all
other Beneficiaries of the Plan and the Trust, shall enforce the Plan and the
Trust Agreement in accordance with the terms of the Plan and the Trust Agreement
and shall have all powers necessary to accomplish that purpose, including, but
not by way of limitation, the following:

(a) To appoint and remove, as it deems advisable, a Plan Administrator;

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(b) To issue rules and regulations necessary for the proper conduct
and administration of the Plan and to change, alter, or amend such rules
and regulations;

(d) To determine all questions arising in the administration of the
Plan, including those relating to the eligibility of persons to become
Participants, the rights of Participants and their Beneficiaries, and
Employer Contributions, and its decision thereon shall be final and binding
upon all persons hereunder;

(e) To compute and certify to the Trustee the amount and kind of
benefits payable to Participants or their Beneficiaries;

(f) To authorize all disbursements of the Trustees from the Trust Fund
in accordance with the provisions of the Plan;

(g) To employ and suitably compensate such accountants, attorneys (who
may but need not be the accountants or attorneys of the Company), and other
persons to render advice and clerical employees as it may deem necessary to
the performance of its duties;

(h) To hear, review and determine claims for benefits;

(i) To exercise any rights, powers or privileges granted to it by the
terms of the Trust Agreement;

(j) To communicate the Plan and its eligibility requirements to the
Employees and notify Employees when they become eligible to participate;

(k) To make available to Participants upon request, for examination
during business hours, such records as pertain exclusively to the examining
Participant;

(l) To invest all or a portion of the Trust Fund in loans to
Participants and to segregate the note representing any such loan in a
separate fund in accordance with Section 8.12; and

(m) To establish investment funds from time to time and to make
investment funds available for Participant investment elections pursuant to
Article VII.

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9.6 Allocations and Delegations of Responsibility.

(a) The Board of Directors, the Committee and, if the Trustees are one
or more individuals, the Trustees, respectively, shall have the authority
to delegate, from time to time, by instrument in writing filed in their
respective minute books, all or any part of their respective
responsibilities under the Plan to such person or persons as it may deem
advisable (and may authorize such person, upon receiving written consent of
the delegating entity, to delegate such responsibilities to such other
person or persons as the delegating entity shall authorize) and in the same
manner to revoke any such delegation or responsibility. Any action of the
delegate in the exercise of such delegated responsibilities shall have the
same force and effect for all purposes hereunder as if such action had been
taken by the delegating entity. Any Employer, the Board of Directors, the
Committee and, if the Trustees are one or more individuals, the Trustees
shall not be liable for any acts or omissions of any such delegate. The
delegate shall periodically report to the delegating authority concerning
the discharge of the delegated responsibilities.

(b) The Board of Directors, the Committee and, if the Trustees are one
or more individuals, the Trustees, respectively shall have the authority to
allocate, from time to time, by instrument in writing filed in their
respective minute books, all or any part of their respective
responsibilities under the Plan to one or more of their respective members
as they may deem advisable, and in the same manner to revoke such
allocation of responsibilities. Any action of the member to whom
responsibilities are allocated in the exercise of such allocated
responsibilities shall have the same force and effect for all purposes
hereunder as if such action had been taken by the allocating entity. An
Employer, the Board of Directors, the Committee and, if the Trustees are
one or more individuals, the Trustees shall not be liable for any acts or
omissions of such member. The member to whom responsibilities have been
allocated shall periodically report to the allocating authority concerning
the discharge of the allocated responsibilities.

9.7 Committee Bonding and Expenses. The members of the Committee shall
serve without bond (except as otherwise required by federal law) and without
compensation for their services as such; but all expenses of the Committee shall
be paid by the Trust except to the extent paid by an Employer.

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9.8 Information to be Supplied by Employer. Each Employer shall provide
the Committee and the Trustees or their delegate with such information as it
shall from time to time need in the discharge of its duties. The Committee and
the Trustees may rely conclusively on the information certified to it by an
Employer.

9.9 Records. The regularly kept records of the Committee, any Employer
and, if the Trustees are one or more individuals, the Trustees, shall be
conclusive evidence of the service of a Participant, his Compensation, his age,
his marital status, his status as an Eligible Employee, and all other matters
contained therein applicable to this Plan; provided that a Participant may
request a correction in the record of his age at any time prior to retirement,
and such correction shall be made if within 90 days after such request he
furnishes in support thereof a birth certificate, baptismal certificate, or
other documentary proof of age satisfactory to the Committee.

9.10 Fiduciary Capacity. Any person or group of persons may serve in more
than one fiduciary capacity with respect to the Plan.

9.11 Plan Administrator. The Committee may appoint a Plan Administrator
who may (but need not) be a member of the Committee; and in absence of such
appointment, the Committee shall be the Plan Administrator.

9.12 Committee/Plan Administrator Decisions Final. The Committee and the
Plan Administrator have discretionary authority to determine matters within
their jurisdiction and the decisions of the Committee and of the Plan
Administrator in matters within its jurisdiction shall be final, binding and
conclusive upon the Employers and the Trustee and upon each Employee,
Participant, former Participant, Beneficiary and every other person or party
interested or concerned.

9.13 Company, Committee and Trustees as Agent. The Company, the Committee
and/or, if the Trustees are one or more individuals, the Trustees, shall act as
agent for each Employer in the administration of the Plan.

9.14 Fiduciary Responsibility. If a Plan fiduciary acts in accordance with
ERISA, Title I, Subtitle B, Part 4,

(a) in determining that the Participant's spouse has consented to
the Participant's naming of a Beneficiary other than his spouse or that the
consent of the Participant's spouse may not be obtained because there is no
spouse, the spouse cannot be located or other circumstances prescribed by
the Secretary of the Treasury

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<PAGE>

by regulations, then to the extent of payments made pursuant to such
consent or determination, the Plan and its fiduciaries shall have no
further liability; or

(b) in treating a domestic relations order as being (or not being) a
Qualified Domestic Relations Order (defined in Section 13.7); or, during
any period in which the issue of whether a domestic relations order is a
Qualified Domestic Relations Order is being determined (by the Committee,
by a court of competent jurisdiction, or otherwise), in separately
accounting for the amounts ("Segregated Amounts") which would have been
payable to the alternate payee during such period if the order had been
determined to be a Qualified Domestic Relations Order; in paying the
Segregated Amounts (including any interest thereon) to the person entitled
thereto if within the 18-month period beginning with the date on which the
first payment would be required to be made under the domestic relations
order (the "18-Month Period") the domestic relations order (or a
modification thereof) is determined to be a Qualified Domestic Relations
Order; in paying the Segregated Amounts (including any interest thereon) to
the person entitled thereto if there had been no order if within the 18-
Month Period the domestic relations order is determined not to be qualified
or if the issue is not resolved within the 18-Month Period; and in
prospectively applying a domestic relations order which is determined to be
qualified after the close of the 18-Month Period, then the obligation of
the Plan and its fiduciaries to the Participant and each alternate payee
shall be discharged to the extent of any payment made pursuant to such
acts.

ARTICLE X

Claims Procedure

10.1 Initial Claim for Benefits. Each Participant or Beneficiary
("Claimant") may submit his application for benefits ("Claim") to the Committee
(or to such other person as may be designated by the Committee) in writing in
such form as is provided or approved by the Committee. A Claimant shall have no
right to seek review of a denial of benefits, or to bring any action in any
court to enforce a Claim prior to his filing a Claim and exhausting his rights
to review under Sections 10.1 and 10.2.

When a Claim has been filed properly, such Claim shall be evaluated and the
Claimant shall be notified of the approval or the denial of the Claim within
ninety (90) days after the receipt of such Claim unless special circumstances
require an

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extension of time for processing the Claim. If such an extension of time for
processing is required, written notice of the extension shall be furnished to
the Claimant prior to the termination of the initial ninety (90) day period,
which notice shall specify the special circumstances requiring an extension and
the date by which a final decision will be reached (which date shall not be
later than one hundred and eighty (180) days after the date on which the Claim
was filed). A Claimant shall be given a written notice in which the claimant
shall be advised as to whether the Claim is granted or denied, in whole or in
part. If a Claim is denied, in whole or in part, the notice shall contain (l)
the specific reasons for the denial, (2) references to pertinent plan provisions
upon which the denial is based, (3) a description of any additional material or
information necessary to perfect the Claim and an explanation of why such
material or information is necessary, and (4) the Claimant's rights to seek
review of the denial.

10.2 Review of Claim Denial. If a Claim is denied, in whole or in part,
the Claimant shall have the right to (i) request that the Committee (or such
other person as shall be designated in writing by the Committee) review the
denial, (ii) review pertinent documents, and (iii) submit issues and comments in
writing, provided that the Claimant files a written request for review with the
Committee within sixty (60) days after the date on which the Claimant received
written notification of the denial. Within sixty (60) days after a request for
review is received, the review shall be made and the Claimant shall be advised
in writing of the decision on review, unless special circumstances require an
extension of time for processing the review, in which case the Claimant shall be
given a written notification within such initial sixty (60) day period
specifying the reasons for the extension and when such review shall be completed
(provided that such review shall be completed within one hundred and twenty
(120) days after the date on which the request for review was filed). The
decision on review shall be forwarded to the Claimant in writing and shall
include specific reasons for the decision and references to Plan provisions upon
which the decision is based. A decision on review shall be final and binding on
all persons for all purposes.

If a Claimant shall fail to file a request for review in accordance with
the procedures herein outlined, such Claimant shall have no rights to review and
shall have no right to bring action in any court and the denial of the Claim
shall become final and binding on all persons for all purposes.

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ARTICLE XI

Amendment and Termination of the Plan

11.1 Discontinuance of Contributions. It is the expectation of the Company
that it will continue the Plan and the payment of contributions hereunder
indefinitely, but the continuation of the Plan and the payment of Employer
Contributions hereunder is not assumed as a contractual obligation of the
Company or any other Employer; and the right is reserved by the Company or any
other Employer at any time to reduce, suspend or discontinue its contributions
hereunder, provided, however, that the Employer Contributions for any Plan Year
accrued or determined prior to the end of said Plan Year shall not after the end
of said Plan Year be retroactively reduced, suspended or discontinued.

11.2 Amendments.

(a) The Company, by resolution of the Board of Directors or of the
Executive Committee of such Board, may amend, modify, change, revise or
discontinue the Plan or the Trust Agreement, at any time; provided, that,
except as provided in Sections 5.6 and 7.10, no amendment shall (i)
increase the duties or liabilities of the Trustees, the Committee or the
Plan Administrator without written consent of the entity affected; (ii)
have the effect of vesting in any Employer any interest in any funds,
securities or other property subject to the terms of this Plan and the
Trust Agreement; (iii) authorize or permit at any time any part of the
corpus or income of the Trust Fund to be used or diverted to purposes other
than for the exclusive benefit of Participants and their Beneficiaries; or
(iv) have any retroactive effect as to deprive any Participant or
Beneficiary of any benefit already accrued; provided that no amendment made
in conformance to provisions of the Code, or any other statute relating to
employees' trusts, or any official regulations or rulings issued pursuant
thereto, shall be considered prejudicial to the rights of any Participant
or Beneficiary.

(b) If a person is not an Employee on or after the effective date of
any amendment to the Plan, the amendment shall be deemed as having no
effect on the amount of such person's benefits or other rights under the
Plan unless the amendment specifically provides otherwise.

11.3 Plan Termination. Although it is the intention of the Company that
this Plan be permanent, the Company reserves the right to terminate the Plan and
the Trust at any time, by delivering to the Committee and to the Trustee a
written

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resolution signed on its behalf by an officer of the Company and stating the
fact of such termination.

11.4 Payment Upon Termination. Upon termination of the Plan or complete
discontinuance of Employer Contributions hereunder, each Participant's Accrued
Benefit shall become fully vested. Upon a partial termination of the Plan, the
Accrued Benefit of each former Participant who lost status as a Participant (or
otherwise suffered the partial termination) because of such partial termination
shall become fully vested. In the event of termination of the Plan and after
payment of all expenses and proportional adjustment of accounts to reflect such
expenses, fund losses or profits and reallocation to the date of termination,
except to the extent that the Board of Directors shall otherwise direct, each
Participant and each Beneficiary of a deceased Participant shall be entitled to
receive his entire Accrued Benefit. The Trustee may make payment of such amounts
in cash or in assets of the Trust Fund as the Trustee shall in its sole
discretion direct. If such amounts are not immediately distributed, then
continued allocations of the net earnings and losses of the Trust as provided in
Section 7.8 shall be made.

11.5 Withdrawal from the Plan by an Employer. While it is not the present
intention of any Employer to withdraw from the Plan and Trust Agreement, any
Employer other than the Company may withdraw from the Plan and Trust Agreement,
under such terms and conditions as the Board of Directors may prescribe, by
delivery to the Trustees and the Company of a resolution of its board of
directors electing to so withdraw.

ARTICLE XII

Top Heavy Provisions

12.1 Application. The definitions in Section 12.2 shall apply under this
Article XII and the special rules in Section 12.3 shall apply, notwithstanding
any other provisions of the Plan, for any Plan Year in which the Plan is a Top
Heavy Plan and for such other Plan Years as may be specified herein. Anything in
this Article XII to the contrary notwithstanding, if the Plan is a multi-
employer plan described In Internal Revenue Code Section 414(f) or a multiple
employer plan as described in Internal Revenue Code Section 413(c), the
provisions of this Article XII shall be applied separately to each Employer and
Commonly Controlled Entity taking account of benefits under the plan provided to
employees of the Employer or Commonly Controlled Entity because of service with
that Employer or Commonly Controlled Entity.

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12.2 Special Top Heavy Definitions. The following special definitions
shall apply under this Article XII.

(a) "Aggregate Employer Contributions" means the sum of all Employer
Contributions and Forfeitures under this Plan allocated for a Participant
to the Plan and employer contributions and forfeitures allocated for the
Participant to all Related Defined Contribution Plans in the Aggregation
Group; provided, however, that for Plan Years beginning before January 1,
1985 and after December 3l, 1988, employer contributions attributable to
salary reduction or similar arrangement under the Plan and Related Defined
Contribution Plans shall not be included in Aggregate Employer
Contributions.

(b) "Aggregation Group" means the group of plans in a Mandatory
Aggregation Group, if any, that includes the Plan, unless inclusion of
Related Plans in the Permissive Aggregation Group in the Aggregation Group
would prevent the Plan from being a Top Heavy Plan, in which case
"Aggregation Group" means the group of plans consisting of the Plan and
each other Related Plan in a Permissive Aggregation Group with the Plan.

(i) "Mandatory Aggregation Group" means each plan (considering
the Plan and Related Plans) that, during the Plan Year that contains
the Determination Date or any of the four preceding Plan Years,

(A) had a participant who was a Key Employee, or

(B) was necessary to be considered with a plan in which a
Key Employee participated in order to enable the plan in which
the Key Employee participated to meet the requirements of Section
401(a)(4) and Section 410 of the Internal Revenue Code.

If the Plan is not described in (A) or (B) above, it shall not be
part of a Mandatory Aggregation Group.

(ii) "Permissive Aggregation Group" means the group of plans
consisting of (A) the plans, if any, in a Mandatory Aggregation Group
with the Plan, and (B) any other Related Plan, that, when considered
as a part of the Aggregation Group, does not cause the Aggregation
Group to fail to satisfy the requirements of Section 401(a)(4) and
Section 410 of she Internal Revenue Code. A Related Plan in (B) of the
preceding sentence

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<PAGE>

may include a simplified employee pension plan, as defined in Internal
Revenue Code Section 408(k), and a collectively bargained plan, if
when considered as a part of the Aggregation Group such plan does not
cause the Aggregation Group to fail to satisfy the requirements of
Section 401(a)(4) and Section 410 of the Internal Revenue Code
considering, if the plan is a multiemployer plan as described in
Internal Revenue Code Section 414(f) or a multiple employer plan as
described in Internal Revenue Code Section 413(c), benefits under the
plan only to the extent provided to employees of the employer because
of service with the employer and, if the plan is a simplified employee
pension plan, only the employer's contribution to the plan.

(c) "Determination Date" means, with respect to a plan year, the last
day of the preceding plan year or, in the case of the first plan year, the
last day of such plan year. If the Plan is aggregated with other plans in
the Aggregation Group, the Determination Date for each other plan shall be,
with respect to any plan year, the Determination Date for each such other
plan which falls in the same calendar year as the Determination Date for
the Plan.

(d) "Key Employee" means, for the Plan Year containing the
Determination Date, any person or the beneficiary of any person who is an
employee or former employee of an Employer or a Commonly Controlled Entity
as determined under Internal Revenue Code Section 416(i) and who, at any
time during the Plan Year containing the Determination Date or any of the
four (4) preceding Plan Years (the "Measurement Period"), is a person
described in paragraph (i), (ii), (iii) or (iv), subject to paragraph (v).

(i) An officer of the Employer or Commonly Controlled Entity
who:

(A) in any Measurement Period, in the case of a Plan Year
beginning after December 31, 1983, is an officer during the Plan
Year and has annual Compensation for the Plan Year in an amount
greater than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for the calendar year in which
such Plan Year ends, ($98,064 in 1989, adjusted in subsequent
years as determined in accordance with regulations prescribed by
the Secretary of the Treasury or his delegate pursuant to the
provisions of Section 415(d) of the Code); and

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(B) in any Measurement Period, in the case of a Plan Year
beginning on or before December 31, 1983, is an officer during
the Plan Year, regardless of his Compensation (except to the
extent that applicable law, regulations and rulings indicate that
the fifty percent (50%) requirement set forth in subparagraph (A)
above is applicable).

No more than a total of fifty (50) persons (or, if lesser, the greater
of three (3) persons or ten percent (10%) of all persons or
beneficiaries of persons who are employees or former employees) shall
be treated as Key Employees under this paragraph (i) for any
Measurement Period. In the case of an Employer or Commonly Controlled
Entity which is not a corporation:

(A) in any Measurement Period, in the case of a Plan Year
beginning on or before February 28, 1985 no persons shall be
treated as Key Employees under this paragraph (i); and

(B) in any Measurement Period, in the case of a Plan Year
beginning after February 28, 1985, the term "officer" as used in
this subsection (d) shall include administrative executives as
described in Section 1.416-1(T-13) of the Treasury Regulations.

(ii) One (1) of the ten (10) persons who, during a Plan Year in
the Measurement Period:

(A) have annual Compensation from the Employer or a Commonly
Controlled Entity for such Plan Year greater than the amount in
effect under Section 415(c)(1)(A) of the Code for the calendar
year in which such Plan Year ends (the greater of $30,000 or one-
fourth (1/4) of the dollar limitation in effect under Section
415(b)(1)(A) of the Code, adjusted in subsequent years as
determined in accordance with regulations prescribed by the
Secretary of the Treasury or his delegate pursuant to the
provisions of Section 415(d) of the Internal Revenue Code); and

(B) own (or are considered as owning within the meaning of
Internal Revenue Code Section 318) in such Plan Year, the largest
percentage interests in the Employed or a Commonly Controlled
Entity, in such Plan Year, provided

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that no person shall be treated as a Key Employee under this
paragraph unless he owns more than one-half percent (1/2%)
interest in the Employer or a Commonly Controlled Entity.

No more than a total of ten (10) persons or beneficiaries of persons
who are employees or former employees shall be treated as Key
Employees under this paragraph (ii) for any Measurement Period.

(iii) A person who, for a Plan Year in the Measurement Period, is
a more than five percent (5%) owner (or is considered as owning more
than five percent (5%) within the meaning of Internal Revenue Code
Section 318) of the Employer or a Commonly Controlled Entity.

(iv) A person who, for a Plan Year in the Measurement Period, is
a more than one percent (1%) owner (or is considered as owning more
than one percent (1%) within the meaning of Internal Revenue Code
Section 318) of the Employer or a Commonly Controlled Entity and has
an annual Compensation for such Plan Year from the Employer and
Commonly Controlled Entities of more than $150,000.

(v) If the number of persons who meet the requirements to be
treated as Key Employees under paragraph (i) or (ii) exceed the
limitation on the number of Key Employees to be counted under
paragraph (i) or (ii), those persons with the highest annual
Compensation in a Plan Year in the Measurement Period for which the
requirements are met and who are within the limitation on the number
of Key Employees will be treated as Key Employees.

If the requirements of paragraph (i) or (ii) are met by a person in
more than one (1) Plan Year in the Measurement Period, each person
will be counted only once under paragraph (i) or (ii):

(A) under paragraph (i), the Plan Year in the Measurement
Period in which a person who was an officer and had the highest
annual Compensation shall be used to determine whether the person
will be treated as a Key Employee under the preceding sentence;

(B) under paragraph (ii), the Plan Year in the Measurement
Period in which the ownership percentage interest is the greatest
shall be used

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to determine whether the person will be treated as a Key Employee
under the preceding sentence.

Notwithstanding the above provisions of paragraph (v), a person may be
counted in determining the limitation under both paragraphs (i) and
(ii). In determining the sum of the Present Value of Accrued Benefits
for Key Employees under subsection (h) of this Section, the Present
Value of Accrued Benefits for any person shall be counted only once.

(e) "Non-Key Employee" means a person or the beneficiary of a person
who has an account balance in the Plan or an account balance or accrued
benefit in any Related Plan in the Aggregation Group, at any time during
the Measurement Period, and who is not a Key Employee.

(f) "Present Value of Accrued Benefits" means, for any Plan Year, an
amount equal to the sum of (i), (ii) and (iii) for each person who, in the
Plan Year containing the Determination Date, was a Key Employee or a Non-
Key Employee.

(i) Subject to (iv) below, the value of a person's Accrued
Benefit under the Plan and each Related Defined Contribution Plan in
the Aggregation Group, determined as of the valuation date coincident
with or immediately preceding the Determination Date, adjusted for
contributions due as of the Determination Date, as follows:

(A) in the case of a plan not subject to the minimum
funding requirements of Section 412 of the Internal Revenue Code,
by including the amount of any contributions actually made after
the valuation date but on or before the Determination Date, and,
in the first plan year of a plan, by including contributions made
after the Determination Date that are allocated as of a date in
that first plan year; and

(B) in the case of a plan that is subject to the minimum
funding requirements, by including the amount of any
contributions that would be allocated as of a date not later than
the Determination Date, plus adjustments to those amounts as
required under applicable rulings, even though those amounts are
not yet required to be contributed or allocated (e.g., because
they have been waived) and by including the amount of any
contributions actually made (or due to be

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made) after the valuation date but before the expiration of the
extended payment period in Section 412(c)(10) of the Internal
Revenue Code.

(ii) Subject to (iv) below, the sum of the actuarial present
values of a person's accrued benefits under each Related Defined
Benefit Plan in the Aggregation Group, determined for any person who
is employed by an Employer maintaining the Plan on a Determination
Date, expressed as a benefit commencing at Normal Retirement Date (or
the person's attained age, if later) and further determined using the
same method which is used for accrual purposes under all Related
Defined Benefit Plans in the Aggregation Group, and, if the same
method is not used for all Related Defined Benefit Plans, then as if
such benefit accrued no more rapidly than at the slowest permitted
accrual rate under Code Section 411(b)(1)(c) determined based on the
following actuarial assumptions:

(A) Interest rate 5%; and

(B) Mortality: 1984 Unisex Pension Table;

and determined in accordance with Internal Revenue Code Section
416(g), provided, however, that if a Related Defined Benefit Plan in
the Aggregation Group provides for different or additional actuarial
assumptions to be used in determining the present value of accrued
benefits thereunder for the purpose of determining the top heavy
status thereof, then such different or additional actuarial
assumptions shall apply with respect to each Related Defined Benefit
Plan in the Aggregation Group.

The present value of an accrued benefit for any person who is employed
by an employer maintaining a plan on the Determination Date is
determined as of the most recent valuation date which is within a 12-
month period ending on the Determination Date, provided however that:

(A) for the first plan year of the plan, the present value
for an employee is determined as if the employee had a
Termination of Employment (1) on the Determination Date or (2) on
such valuation date but taking into account the estimated accrued
benefit as of the Determination Date; and

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(B) for the second and subsequent plan years of the plan,
the accrued benefit taken into account for an employee is not
less than the accrued benefit taken into account for the first
plan year unless the difference is attributable to using an
estimate of the accrued benefit as of the Determination Date for
the first plan year and using the actual accrued benefit as of
the Determination Date for the second plan year.

For purposes of this paragraph (ii), the valuation date is the
valuation date used by the plan for computing plan costs for minimum
funding, regardless of whether a valuation is performed that year.

If the plan provides for a nonproportional subsidy as described
in Treasury Regulations Section 1.416-1 (T-26), the present value of
accrued benefits shall be determined taking into account the value of
nonproportional subsidized early retirement benefits and
nonproportional subsidized benefit options.

(iii) Subject to (iv) below, the aggregate value of amounts
distributed during the plan year that includes the Determination Date
or any of the four preceding plan years including amounts distributed
under a terminated plan which, if it had not been terminated, would
have been in the Aggregation Group.

(iv) The following rules shall apply in determining the Present
Value of Accrued Benefits:

(A) Amounts attributable to qualified voluntary employee
contributions, as defined in Section 219(e) of the Internal
Revenue Code, shall be excluded.

(B) In computing the Present Value of Accrued Benefits with
respect to rollovers or plan-to-plan transfers, the following
rules shall be applied to determine whether amounts which have
been distributed during the five (5) year period ending on the
Determination Date from or accepted into this Plan or any plan in
the Aggregation Group shall be included in determining the
Present Value of Accrued Benefits:

(1) Unrelated Transfers accepted into the Plan or any
plan in the Aggregation Group after December 31, 1983 shall
not be included.

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(2) Unrelated Transfers accepted on or before December
31, 1983 and all Related Transfers accepted at any time into
the Plan or any plan in the Aggregation Group shall be
included.

(3) Unrelated Transfers made from the Plan or any plan
in the Aggregation Group shall be included.

(4) Related Transfers made from the Plan or any plan
in the Aggregation Group shall not be included by the
transferor plan (but shall be counted by the accepting
plan).

The Accrued Benefit of any individual who has not performed any
services for an Employer maintaining the Plan at any time during the five
(5) year period ending on the Determination Date shall be excluded in
computing the Present Value of Accrued Benefits.

(g) "Related Transfer" means a rollover or a plan-to-plan transfer
which is either not initiated by the Employee or is made between plans each
of which is maintained by a Commonly Controlled Entity.

(h) A "Top Heavy Aggregation Group" exists in any Plan Year for
which, as of the Determination Date, the sum of the Present Value of
Accrued Benefits for Key Employees under all plans in the Aggregation Group
exceeds sixty percent (60%) of the sum of the Present Value of Accrued
Benefits for all employees under all plans in the Aggregation Group;
provided that, for purposes of determining the sum of Present Value of
Accrued Benefits for all employees, there shall be excluded the Present
Value of Accrued Benefits of any Non-Key Employee who was a Key Employee
for any Plan Year preceding the Plan Year that contains the Determination
Date. For purposes of applying the special rules herein with respect to a
Super Top Heavy Plan, a Top Heavy Aggregation Group will also constitute a
"Super Top Heavy Aggregation Group" if in any Plan Year as of the
Determination Date, the sum of the Present Value of Accrued Benefits for
Key Employees under all plans in the Aggregation Group exceeds ninety
percent (90%) of the sum of the Present Value of Accrued Benefits for all
employees under all plans in the Aggregation Group.

(i) "Top Heavy Plan" means the Plan in any Plan Year in which it is a
member of a Top Heavy Aggregation Group, including a Top Heavy Aggregation
group consisting solely of the Plan. For purposes of applying the rules
herein

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with respect to a Super Top Heavy Plan, a Top Heavy Plan will also
constitute a "Super Top Heavy Plan" if the Plan in any Plan Year is a
member of a Super Top Heavy Aggregation Group, including a Super Top Heavy
Aggregation Group consisting solely of the Plan.

(j) "Unrelated Transfer" means a rollover or a plan-to-plan transfer
which is both initiated by the Employee and (a) made from a plan maintained
by a Commonly Controlled Entity to a plan maintained by an employer which
is not a Commonly Controlled Entity or (b) made to a plan maintained by a
Commonly Controlled Entity from a plan maintained by an employer which is
not a Commonly Controlled Entity.

12.3 Special Top Heavy Provisions. For each Plan Year in which the Plan is
a Top Heavy Plan, the following rules shall apply, except that the special
provisions of this Section 12.3 shall not apply with respect to any employee
included in a unit of employees covered by an agreement which the Secretary of
Labor finds to be a collective-bargaining agreement between employee
representatives and one or more employees if there is evidence that retirement
benefits were the subject of good faith bargaining between such employee
representative and the Employer or Employers:

(a) Minimum Employer Contributions. In any Plan Year in which the
Plan is a Top Heavy Plan, the Employers shall make additional Employer
Contributions to the Plan as necessary for each Participant who is employed
on the last day of the Plan Year and who is a Non-Key Employee to bring the
amount of his Aggregate Employer Contributions for the Plan Year up to at
least three percent (3%) of his Compensation, or if the Plan is not
required to be included in an aggregation group in order to permit a
defined benefit plan in the aggregation group to satisfy the requirements
of Section 401(a)(4) or Section 410 of the Internal Revenue Code, such
lesser amount as is equal to the largest percentage of a Key Employee's
Compensation allocated to the Key Employee as Aggregate Employer
Contributions (including Employer Compensation Reduction Contributions)
unless such Participant is a participant in a Related Defined Benefit Plan
and receives a minimum benefit thereunder in accordance with Section 416(c)
of the Internal Revenue Code, in which case such Participant shall not
receive a minimum contribution under this Section 12.3(a).

For purposes of determining whether a Non-Key Employee is a Participant
entitled to have minimum Employer Contributions made on his behalf, a Non-
Key Employee will be treated as a

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<PAGE>

Participant even if he is not otherwise a Participant (or accrues no
benefit) under the Plan because:

(i) he has failed to complete the requisite number of hours of
service (if any) after becoming a Participant in the Plan,

(ii) he is excluded from participation in the Plan (or accrues
no benefit) merely because his compensation is less than a stated
amount, or

(iii) he is excluded from participation in the Plan (or accrues
no benefit) merely because of a failure to make mandatory employee
contributions or, if the Plan is a 401(k) plan, because of a failure
to make elective 401(k) contributions.

(b) Vesting. For each Plan Year in which the Plan is a Top Heavy Plan
and for each Plan Year thereafter, the Participant's Accrued Benefit shall
remain fully vested and nonforfeitable.

(c) Limitations. In computing the limitations under Section 5.6
hereof for years in which the Plan is not a Super Top Heavy Plan, the
special rules of Section 416(h) of the Code shall be applied in accordance
with applicable regulations and rulings so that, in determining the
denominator of the Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which "1.25" would have been used,
"1.00" shall be substituted, unless the special requirements of Section
416(h)(2) of the Internal Revenue Code have been satisfied.

Notwithstanding the provisions of Section 5.6, if the Plan is a Top
Heavy Plan, the maximum limitation on contributions and benefits described
in Section 5.6(c) shall be determined by substituting 1.0 for 1.25 in the
denominator of the Defined Benefit Plan Fraction (as defined in Section
415(e)(2) as modified by Section 416(h)(1) of the Internal Revenue Code)
and the Defined Contribution Plan Fraction (as defined in Section 415(e)(3)
as modified by Section 416(h)(1) of the Internal Revenue Code), and by
substituting $41,500 for $51,875 in the numerator of the transition
fraction described in Section 415(e)(6)(B) of the Internal Revenue Code.

(d) Transition Rule for a Top Heavy Plan. Notwithstanding the
provisions of Section 12.3(c), for each Plan Year in which the Plan is a
Top Heavy Plan and in which the Plan does not meet the special requirements
of Section 416(h)(2) of the Internal Revenue Code in order to

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Contribution Plan Fraction. Any provisions herein to the contrary
notwithstanding, if the Plan is a Super Top Heavy Plan, there shall be no
further Annual Additions for a Participant whose Combined Fraction is
greater than 1.00 when a factor of 1.00 is used in the denominator of the
Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction
until the Participant's Combined Fraction is not greater than 1.00.

(f) Terminated Plan. If the Plan becomes a Top Heavy Plan after it
has formally been terminated, has ceased crediting for benefit accruals and
vesting and has been or is distributing all plan assets to participants and
their beneficiaries as soon as administratively feasible or if a terminated
plan has distributed all benefits of participants and their beneficiaries,
the provisions of Section 12.3 shall not apply to the Plan.

(g) Frozen Plans. If the Plan becomes a top Heavy Plan after
contributions have ceased under the Plan but all assets have not been
distributed to participants or their beneficiaries, the provisions of
Section 12.3 shall apply to the Plan.

ARTICLE XIII

Miscellaneous Provisions

13.1 Employer Joinder. Any commonly Controlled Entity may, with the
written approval of the Board of Directors and subject to such terms and
conditions as the Board of Directors may prescribe, adopt the Plan and Trust
Agreement.

13.2 Company Merger. In the event that any successor corporation to the
Company or an Employer, by merger, consolidation, purchase or otherwise, shall
elect to adopt the Plan and Trust, such successor corporation shall be
substituted hereunder for the Company or the Employer upon filing in writing
with the Trustees its election so to do.

13.3 Plan Merger. The Plan shall not merge or consolidate with, or
transfer any assets or liabilities to any other plan, unless each Participant
would receive a benefit immediately after the merger, consolidation or transfer
(if the Plan were then terminated) which is equal to or greater than the benefit
he would have been entitled to immediately before the merger, consolidation, or
transfer (if the Plan were then terminated).

13.4 Indemnification. Each Employer shall indemnify and hold harmless each
member of the Board of Directors, each

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member of the Committee, the Plan Administrator and, if the Trustees are one or
more individuals, the Trustees, and each officer and employee of an Employer to
whom are delegated duties, responsibilities, and authority with respect to the
Plan, from and against all claims, liabilities, fines and penalties, and all
expenses reasonably incurred by or imposed upon him (including, but not limited
to, reasonable attorney fees) which arise as a result of his actions or failure
to act in connection with the operation and administration of the Plan to the
extent lawfully allowable and to the extent that such claim, liability, fine,
penalty, or expense is not paid for by liability insurance purchased or paid for
by an Employer. Notwithstanding the foregoing, an Employer shall not indemnify
any person for any such amount incurred through any settlement or compromise of
any action unless the Employer consents in writing to such settlement or
compromise.

13.5 Unclaimed Amounts. Unclaimed amounts shall consist of the amounts of
the Accounts of a retired, deceased or terminated Participant which cannot be
distributed because of the Committee's inability, after a reasonable search, to
locate a Participant or his Beneficiary within a period of two (2) years after
the payment of benefits becomes due. Unclaimed amounts for a Plan Year shall
become a Forfeiture and shall be allocated for such Plan Year as determined in
accordance with Section 6.1 hereof, within a reasonable time after the close of
the Plan Year in which such two-year period shall end. If an unclaimed amount is
subsequently properly claimed by the Participant or the Participant's
Beneficiary, said amount shall be paid to such Participant or Beneficiary, and
shall be treated as a charge against Forfeitures for such Plan Year, and to the
extent Forfeitures are insufficient, as an expense of the Trust during the Plan
Year in which the Participant or Beneficiary makes such claim, unless the
Company in its discretion makes a contribution to the Plan for such year in an
amount sufficient to pay such amount.

13.6 Nonalienation of Benefits.

(a) Benefits payable under this Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind, either
voluntary or involuntary, prior to actually being received by the person
entitled to the benefit under the terms of the Plan; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge,
garnish, execute on, levy or otherwise dispose of any right to benefits
payable hereunder, shall be void. The Trust Fund shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements
or torts of any person entitled to benefits hereunder.

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(b) Notwithstanding Section 13.6(a), the Trustee

(1) shall comply with an order entered on or after January 1,
1985, determined by the Committee to be a Qualified Domestic Relations
Order as provided in Section 13.7,

(2) shall comply with a domestic relations order entered before
January 1, 1985, if benefits are already being paid under such order,
and

(3) may treat an order entered before January 1, 1985, as a
Qualified Domestic Relations Order even if it does not meet the
requirements of Section 13.7.

13.7 Qualified Domestic Relations Order.

(a) "Qualified Domestic Relations Order" means any judgment, decree,
or order (including approval of a property settlement agreement):

(1) which is made pursuant to a state domestic relations law
(including a community property law),

(2) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse,
child, or other dependent of a Participant,

(3) which creates or recognizes the existence of an alternate
payee's right to receive all or a portion of the Participant's Accrued
Benefit under the Plan, and

(4) with respect to which the requirements of paragraphs (b) and
(c) are met.

(b) A domestic relations order can be a Qualified Domestic Relations
Order only if such order clearly specifies:

(1) the name and the last known mailing address, if any, of the
Participant and the name and mailing address of each alternate payee
covered by the order,

(2) the amount or percentage of the Participant's Accrued
Benefit to be paid by the Plan to each such alternate payee, or the
manner in which such amount or percentage is to be determined,

(3) the number of payments or period to which such order
applies, and

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(4) each Plan to which such order applies.

(1) require the Plan to provide any type or form of benefit, or
any option not otherwise provided under the Plan,

(2) require the Plan to provide increased benefits (determined
on the basis of actuarial value), or

(3) require the payment of benefits to an alternate payee which
are required to be paid to another alternate payee under another order
previously determined to be a Qualified Domestic Relations Order.

(d) A domestic relations order shall not be treated as failing to
meet the requirements of Section 13.7(c)(1) solely because such order
requires that payment of benefits be made to an alternate payee:

(1) before a Participant has had a Termination of Employment and
before such Participant could receive a distribution,

(2) as if the Participant had retired on the date on which such
payment is to begin under such order (but taking into account only the
present value of the benefits actually accrued and not taking into
account the present value of any employer subsidy for early
retirement), and

(3) in any form in which such benefits may be paid under the Plan
to the Participant (other than in the form of a qualified joint and
survivor annuity with respect to the alternate payee and his or her
subsequent spouse).

(e) To the extent provided in any Qualified Domestic Relations Order,
the former spouse of a Participant shall be treated as the surviving spouse
of such Participant for purposes of consenting to the naming of another
Beneficiary to the extent provided in Section 8.3 and 8.9.

(f) Payment of a Participant's benefits to an alternate payee shall
be made in a lump sum at any time specified in the Qualified Domestic
Relations Order, even if at such time, the Participant was not eligible to
receive such benefits.

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(g) In the case of any domestic relations order received by the Plan,
the Committee shall separately account for the amounts payable under the
domestic relations order. If it is determined that the order is not a
Qualified Domestic Relations Order, the amounts separately accounted for
during such determination shall no longer be separately accounted for.

13.8 Contract of Employment. Nothing contained herein shall be construed to
constitute a contract of employment between an Employer and any Employee.

13.9 Source of Benefits. All benefits payable under the Plan shall be paid
or provided for solely from the Trust and the Employers assume no liability or
responsibility therefore.

13.10 Employees' Trust. The Plan and Trust are created for the exclusive
purpose of providing benefits to the Participants in the Plan and their
Beneficiaries and defraying reasonable expenses of administering the Plan and
Trust. The Plan and Trust shall be interpreted in a manner consistent with their
being a Plan described in Section 401(a) of the Code and a Trust exempt under
Section 501(a) of the Code. At no time shall the Trust Fund be diverted from the
above purpose.

13.11 Gender and Number. Except when the context indicates to the contrary,
when used herein, masculine terms shall be deemed to include the feminine, and
singular the plural.

13.12 Headings. The headings of Articles and Sections are included solely
for convenience of reference, and if there is any conflict between such headings
and the text of this Plan, the text shall control.

13.13 Uniform and Non-Discriminatory Application of Provisions. The
provisions of this Plan shall be interpreted and applied in a uniform and non-
discriminatory manner with respect to all Participants, former Participants, and
Beneficiaries.

13.14 Invalidity of Certain Provisions. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof and the Plan shall be construed and enforced
as if such provisions, to the extent invalid or unenforceable, had not been
included.

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13.15 Law Governing the plan shall be enforced according to the laws of
Illinois other than its laws with respect to choice of law, to the extent not
preempted by ERISA.

Executed this 22nd day of August, 1990.

HELLER FINANCIAL, INC.

By: /s/ Gary J. Felsten
-------------------

ATTEST:

/s/ Eileen M. Quigley
- ---------------------

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APPENDIX A

PLAN HISTORY

In 1951, Walter E. Heller & Company, the predecessor to Heller Financial
Inc. (the "Company"), established a profit sharing plan, the terms of which were
embodied in a trust agreement amended from time to time and last amended on
December 7, 1981. Since the Company's establishment of its plan, certain
subsidiaries and affiliates of the Company established profit sharing plans
substantially identical with the Company's Profit Sharing Plan. All of these
profit sharing plans (including the Company's plan) were previously amended,
restated and continued and are referred to as "Prior Plans".

Before 1971, the Company's Prior Plan and certain of the other Prior Plans
provided that the employer contributions and forfeitures under that Plan would
be invested in capital stock of Walter E. Heller International Corporation. All
of such Prior Plans so providing were amended effective January 1, 1971 to
provide that no further investment would be made in such capital stock, that the
trustees of such Prior Plans would hold the capital stock up to that time
accumulated in a separate frozen fund under the respective Plan, and that each
participant in such Plan would have a separate employer contribution account
representing his interest in the capital stock held in the separate frozen fund.
In November of 1984, the stock of Walter E. Heller International Corporation was
liquidated and converted into cash. The separate employer contribution accounts
which formerly held the stock were then merged into the regular employer
contribution accounts.

Effective as of January 1, 1975, the Company amended and restated its Prior
Plan by amending and restating the trust provisions thereof in the form of a
separate trust agreement known as the Walter E. Heller & Company Profit Sharing
Trust (the "Trust"), which amendment and restatement also set forth the plan
provisions of the Prior Plan in a separate document known as the Walter E.
Heller & Company Profit Sharing Plan (the "Plan"). The Plan and Trust also
constituted an amendment, restatement and continuation of the Prior Plans.
Effective as of January 1, 1984, as a result of a desire to revise certain of
the Plan provisions and to comply with newly enacted legislation, the Company
again decided to amend, restate and continue the Plan. There have been seven
amendments to the Plan as amended and restated effective January 1, 1984, prior
to the amendment and restatement effective January 1, 1989.

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Exhibit 10(r)

FIRST AMENDMENT
TO THE
HELLER FINANCIAL, INC.
SAVINGS AND PROFIT SHARING PLAN

as amended and restated effective January 1, 1989
-------------------------------------------------

WHEREAS, Heller Financial, Inc. (the "Company") adopted a profit sharing
plan for the benefit of its employees in 1951 and amended and restated that plan
numerous times since and most recently amended and restated such plan, now known
as the Heller Financial, Inc. Savings and Profit Sharing Plan (the "Plan"),
effective January 1, 1989; and

WHEREAS, the Company retained the right to amend the Plan pursuant to
Section 11.2 thereof; and

WHEREAS, the Company now deems it desirable to further amend the Plan;

NOW, THEREFORE, BE IT RESOLVED, the Plan is hereby amended as follows:

1. The following is added to the end of Section 2.16 of the Plan to
read as follows:

Effective January 1, 1989, the term Eligible Employee shall include any
individual who (i) is a citizen or resident of the United States, (ii) is
employed by a foreign affiliate (as defined in Section 3121(l) (6) of the
Internal Revenue Code) of an Employer with respect to which the Employer
has entered into an agreement under Section 3121(l) of the Internal Revenue
Code, (iii) is not provided with contributions under any funded plan of
deferred compensation (whether or not qualified under Section 401(a) or
403(a) of the Internal Revenue Code) with respect to the remuneration paid
to such individual by such foreign affiliate, and (iv) was an Eligible
Employee immediately prior to becoming an employee of such foreign
affiliate. Such an Eligible Employee shall be treated as employed by an
Employer for purposes of the Plan and the compensation paid to an Eligible
Employee by a foreign affiliate shall be treated for purposes of Section
2.12 of the Plan as having been paid to the Eligible Employee by an
Employer.

2. Section 2.3 of the Plan is amended, effective February 1, 1993, to
read as follows:

(a) with respect to Employer Profit Sharing Contributions, a Participant
who (1) is an Eligible Employee employed by an Employer as of the last
business day of the Plan Year; (2) is credited with at least 900 Hours of
Service during such Plan Year; (3) effective for Plan Years beginning after
1989, is not a Highly Compensated Employee for such Plan Year and (4) was
not eligible to participate in an incentive plan maintained by an Employer
(excluding the Operations Plan), on any day in the Plan Year;
<PAGE>

(b) with respect to Employer Compensation Reduction Contributions,
Special Employer Contributions, Forfeitures, Rollover Contributions and
with respect to determining the actual deferral percentage under Section
5.3(c), a Participant who is an Eligible Employee on any day of the Plan
Year, and with respect to determining the actual contribution percentage
test under Section 5.4(c), an Eligible Employee who is participating under
the Plan for purposes of Employer Matching Contributions; and

(c) with respect to Employer Matching Contributions attributable to
Employer Compensation Reduction Contributions matchable under Section 4.4
and made with respect to Compensation paid for payroll periods: (I)
beginning on or after January 1 and ending on or before June 30 of each
applicable Plan Year, a Participant who is an Eligible Employee employed by
an Employer on the last business day on or before June 30; and (2)
beginning on or after July 1 and ending on or before December 31 of each
applicable Plan Year, a Participant who is an Eligible Employee employed by
an Employer on the last business day on or before December 31.

3. Section 2.14 of the Plan is amended effective January 1, 1993, to
read as follows:

2.14 "Disability" or "Disabled" means a physical or mental condition
which totally and presumably permanently prevents a Participant from
engaging in any substantially gainful activity, based on a medical
examination by a doctor or clinic acceptable to the Committee, and
which entitles the Participant to benefits under the Company's long-
term disability plan; provided, however, that "Disability" shall not
include any such condition which results from chronic alcoholism,
self-addition to narcotics, an injury suffered while engaged in a
felonious or criminal act or enterprise, or service in the Armed
Forces of the United States which entitles the Participant to a
veteran's disability pension. For purposes of Section 8.5(d) a
Disability shall be considered to have ended if the Participant (a) is
reemployed by an Employer, (b) engages in any substantially gainful
activity, except for such employment as is found by the Committee to
be for the primary purpose of rehabilitation or is not incompatible
with a finding of total and permanent disability, (c) has sufficiently
recovered, in the opinion of the Committee, based on a medical
examination by a doctor or clinic appointed by the Committee, to be
able to engage in regular employment with the Employer and refuses an
offer of employment of the Employer or (d) refuses to undergo any
medical examination requested by the Committee (but in no event shall
the Participant be required to undergo more than two (2) medical
examinations in any calendar year).

4. Section 3.1 of the Plan is amended, effective January 1, 1993, to
read as follows:

3.1 Participation. Each Eligible Employee who was a Participant
in the Plan on December 31, 1992 shall be a Participant in this Plan
immediately upon January 1, 1993 in accordance with the terms

2
<PAGE>

hereof. Each other Eligible Employee shall become a Participant in the
Plan:

(i) for purposes of Employer Profit Sharing Contributions, on the
January 1 or July 1 following the date on which he becomes an
Eligible Employee;

(ii) for purposes of Employer Compensation Reduction Contributions,
if the Eligible Employee is hired prior to the 21st day of a
calendar month, the first day of the month following the month
in which he is hired, and if the Eligible Employee is hired on
or after the 21st day of a calendar month, the first day of the
second calendar month following the month in which he is hired;
and

(iii) for purposes of Employer Matching Contributions, (A) if the
Eligible Employee was hired prior to January 1, 1993, the date
on which he became an Eligible Employee, or (B) if the Eligible
Employee is hired on or after January 1, 1993, the January 1 or
July 1 coinciding with or next following the date the Eligible
Employee completes a year of Continuous Service (as defined in
Section 8.5).

Admission to participation in the Plan shall only be made when an Eligible
Employee is not on an Authorized Leave of Absence or serving with the Armed
Forces of the United States. Each Participant shall continue as such until
the later of his Termination of Employment or the distribution of his
entire vested Accrued Benefit.

5. Subsection (a) of Section 4.4 of the Plan is amended, effective
January 1, 1993, to read as follows:

(a) Employer Matching Contributions.

(i) Pre-1993 Hires. If an Eligible Employee is hired prior to
January 1, 1993, effective with respect to Employer
Compensation Reduction Contributions made on or after March
1, 1990, each Employer shall contribute for each Plan Year
on behalf of each such Eligible Employee who is an Active
Participant for that Plan Year an Employer Matching
Contribution equal to fifty percent (50%) (or such greater
or lesser percentage determined by the Committee) of such
Contributions made during each month of such Plan Year up to
a maximum of five percent (5%) (or such greater or lesser
percentage determined by the Committee) of such Active
Participant's Compensation paid during such month; provided
that no Employer Matching Contribution for any Plan Year or
other period established by the Committee shall exceed an
amount or a percentage of Compensation or Employer
Compensation Reduction

3
<PAGE>

Contributions which may from time to time be established by
the Committee. Each such Participant shall be fully vested
in any such Employer Matching Contributions which are
allocated to his Matching Contribution Account.

(ii) Post-1992 Hires. If an Eligible Employee is hired on or
after January 1, 1993, effective for each applicable Plan
Year each Employer shall contribute, on behalf of each
Active Participant, an Employer Matching Contribution, with
respect to Employer Compensation Reduction Contributions
made on or after the date on which the Eligible Employee
became a Participant for purposes of Employer Matching
Contributions pursuant to Section 3.1(iii)(B), equal to
fifty percent (50%) (or such greater or lesser percentage
determined by the Committee) of such Active Participant's
Employer Compensation Reduction Contributions made during
each month of such Plan Year up to a maximum of five percent
(5%) (or such greater or lesser percentage determined by the
Committee) of the Active Participant's Compensation paid
during such month; provided that no Employer Matching
Contribution for any Plan Year or other period established
by the Committee shall exceed an amount or a percentage of
Compensation or Employer Compensation Reduction
Contributions which may from time to time be established by
the Committee. Each such Participant shall be vested in
his Employer Matching Contributions which are allocated to
his Matching Contribution Account in accordance with Section
8.5.

6. Section 8.5 of the Plan is amended, effective January 1, 1993, to read
as follows:

8.5 Vested Interests.

(a) Termination Upon Normal Retirement Date Death or
Disability. A Participant's Accrued Benefit shall be fully
vested and non-forfeitable if on or before the date he has a
Termination of Employment the Participant attains age 65, dies or
becomes Disabled.

(b) Other Termination. A Participant shall be fully vested
at all times in his Compensation Reduction Account, Rollover
Account, Profit Sharing Contribution Account, Employee
Contribution Account and Employer Contribution Account. A
Participant who is hired prior to January 1, 1993 shall be fully
vested at all times in his Matching Contribution Account. A
Participant who is hired on or after January 1, 1993 shall,
except as provided in 8.5(a), have a vested interest in his
Matching Contribution Account as follows:

4
<PAGE>

Years of Percent Percent
Continuous Service Vested Forfeitable
------------------ ------- -----------
<S> <C> <C>
Less than 1 0% 100%
1 year but less than 2 20% 80%
2 years but less than 3 40% 60%
3 years but less than 4 60% 40%
4 years but less than 5 80% 20%
5 years or more 100% 0%
</TABLE>

(c) Forfeitures. If a Participant has a Termination of
Employment, he shall forfeit any unvested portion of his Matching
Contribution Account as of the last day of the Plan Year in which
he receives a distribution from the Plan. If the participant has
not received a distribution before he incurs a five-year "Period
of Severance" (as defined below), he shall forfeit any unvested
portion of his Matching Contribution Account after such five year
Period of Severance. Forfeitures under this subsection (c) shall
be used to pay Employer Matching Contributions to the Plan and
any Plan expenses. If a Participant who has forfeited his
unvested Matching Contribution Account shall be reemployed by an
Employer before incurring a five-year Period of Severance, his
amount forfeited shall be restored to his Matching Contribution
Account. Thereafter, if such a Participant again incurs a
Termination of Employment under circumstances in which he is not
fully vested in his Matching Contribution Account, the portion of
his Matching Contribution Account distributable on the date of
his later Termination of Employment shall be calculated as
follows:

the amount distributed to the Participant from his Matching
Contribution Account upon his earlier Termination of Employment shall
be added to the balance of his Matching Contribution Account;

(ii) the amount determined under paragraph (i) shall be
multiplied by the vested percentage as of the date of his
later Termination of Employment determined under this
Section 8.5; and

(iii) the amount distributed to the Participant upon his earlier
Termination of Employment shall be deducted from the
product calculated under paragraph (ii) to determine the
amount distributable upon his later Termination of
Employment.

If a Participant who has forfeited his unvested Matching
Contribution Account shall be reemployed by an Employer after
incurring a five-year Period of Severance, his amount forfeited
shall not be restored to his Matching Contribution Account. If
all or a portion of the Participant's vested Matching
Contribution Account prior to his Termination of

5
<PAGE>

Employment was not distributed prior to his resumption of service
and was not 100% vested upon Termination of Employment, then: (i)
the vested portion of the Participant's Matching Contribution
Account prior to his five-year Period of Severance which has not
been distributed shall be held in a pre-break Matching
Contribution Account, which shall be 100% vested; and (ii) the
Participant's Employer Matching Contributions and forfeitures
attributable to service after the five-year Period of Severance
shall be held in a post-break Matching Contribution Account,
which, shall be vested in accordance with Section 8.5(b).

(d) "Continuous Service" means the period of employment of an
Employee by an Employer or Commonly Controlled Entity, including
periods of Authorized Leave of Absence and Disability, measured from
the date an Employee first performs an _____ Hour of Service upon
employment or reemployment to the date of an Employee's Termination of
Employment; provided that an Employee shall not be credited with more
than 12 months of Continuous Service with respect to any single period
of Disability or Authorized Leave of Absence (other than an absence
for military duty or jury duty) and provided, further, that if an
Employee who has a Termination of Employment is reemployed by an
Employer or a Commonly Controlled Entity and performs an Hour of
Service before he incurs a one-year Period of Severance, such
Termination of Employment shall be disregarded and his employment
shall be treated as continuous through the date he resumes employment
as an Employee.

(e) "Period of Severance" means the period of time from (A) an
Employee's Termination of Employment or (B) in the case of an Employee
who has a Termination of Employment while on or immediately following
an Authorized Leave of Absence, from the beginning of such Authorized
Leave of Absence, or (C) in the case of a "Parental Leave" (defined
below), from the date two years after the date on which such Parental
Leave began if the Parental Leave continues through such date, until
the date on which the Employee is credited with an Hour of Service
upon reemployment by an Employer or a Commonly Controlled Entity.

(f) "Parental Leave" means a period of time beginning after
December 31, 1984, during which an Employee is absent from work: (A)
by reason of the pregnancy of the Employee, (B) by reason of the birth
of a child of the Employee, (C) by reason of the placement of a child
with the Employee in connection with the adoption of such child by
such Employee, or (D) for purposes of caring for such child for a
period beginning immediately following such birth or placement. An
absence from work shall not be a Parental Leave unless the Employee
furnishes the Committee such timely information as may reasonably be
required to establish that the absence from work was for one of the
reasons specified in this Section 4.4(a)(v) and the number of days for
which there was such an absence. Nothing

6
<PAGE>

contained herein shall be construed to establish an Employer policy of
treating a Parental Leave as an Authorized Leave of Absence.

(g) "Vested". Notwithstanding any provision of the Plan to the
contrary, for purposes of Article VIII, the term Accrued Benefit shall
be read to mean vested Accrued Benefit.

7. A new Section 8.14 is added to this Plan, effective January 1, 1993,
to read as follows:

8.14 Eligible Rollover Distributions.

(a) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Section, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover; provided,
however, that an eligible rollover distribution of less than $200
shall not be eligible for a direct rollover.

(b) The Plan is considered an eligible retirement plan to which
Participants may direct an eligible rollover distribution from a prior
employer's plan be made. A direct rollover into the Plan shall be
treated as a Rollover Contribution and held in the Participant's
Rollover Account.

(i) "Eligible rollover distribution": An eligible rollover
distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except
that an eligible rollover distribution does not
include: any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution
to the extent such distribution is required under
Section 401(a) (9) of the Code; any distribution that
is made pursuant to Sections 5.2, 5.3, 5.4 or 5.5; and
the portion of any distribution that is not includable
in gross income.
<PAGE>

(ii) "Eligible retirement plan": An eligible retirement plan
is an individual retirement account described in
Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code,
or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity.

(iii) "Distributee": A distributee includes an employee or
former employee. In addition, the employee's or former
employee's surviving spouse and the employee's or
former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse
or former spouse.

(iv) "Direct rollover": A direct rollover is a distribution
by the Plan made payable to the trustee of the eligible
retirement plan specified by the distributee.

IN WITNESS WHEREOF, the amendment is executed by the Company this
23rd day of December, 1993 by its duly authorized officer.

HELLER FINANCIAL, INC.

By: /s/ Peggi L. Sturm
----------------------
Its: Vice President
---------------------

<PAGE>

Exhibit 10(s)
SECOND AMENDMENT

TO THE
HELLER FINANCIAL, INC.
SAVINGS AND PROFIT SHARING PLAN
as amended and restated effective January 1, 1989
-------------------------------------------------

WHEREAS, the Company retained the right to amend the Plan pursuant to
Section 11.2 thereof; and

WHEREAS, the Company now deems it desirable to further amend the Plan;

NOW, THEREFORE, BE IT RESOLVED, the Plan is hereby amended as follows:

1. The last paragraph of Section 2.12 of the Plan is hereby amended
effective for Plan Years commencing on or after January 1, 1994 to read as
follows:

Except for purposes of Section 5.6 and for determining Highly
Compensated Employees under Section 2.23, the amount of an Employee's
Compensation taken into account under the Plan shall not exceed
$150,000 (adjusted from time to time by the Secretary of the Treasury
in accordance with Section 401(a)(17) of the Code). In determining
the Compensation of a family member, the rules of Code Section
414(q)(6) shall apply, except that the term "family" shall include
only the spouse of the Participant and any lineal descendants who have
not attained age 19 before the close of the Plan Year.

2. 5.2(b) is hereby amended, effective January l, 1989, to read as
follows:

The sum of (1) the Participant's Employer Compensation Reduction
contributions, (2) any elective deferrals (as defined in Section
402(g) of the Code) under a Related Plan, and (3) if the Participant
notifies the committee in writing of any other plan under which
elective deferrals are excluded from gross income, any other elective
deferrals (as defined in Section 402(g) of the Code) made under any
other plan, shall not exceed
<PAGE>

$7,627 (in 1989, adjusted in subsequent years as determined in
accordance with regulations prescribed by the Secretary of Treasury or
his delegate, and increased in accordance with the provisions of
Sections 402(g)(4) and 402(g)(8) of the Code as applicable). If, for
any calendar year, a Participant's elective deferrals under the Plan,
any Related Plan and any other plan for which the Participant has
notified the committee exceed the limit described in the first
sentence of this subsection the Committee shall, not later than the
April 15 following the close of such calendar year, distribute to the
Participant, in a single sum, all or such portion of the Participant's
Compensation Reduction Contributions for such calendar year (A) as
requested in writing by the Participant by March 1 (or such later date
as the Committee permits, but not later than April 15) following the
close of such calendar year or (B) as determined by the committee as
is necessary to eliminate the excess (including any income earned and
minus any loss allocable to such amounts as determined in Section
5.2(c)). Effective January 1, 1994, Employer Matching Contributions
made with respect to matched Employer Compensation Reduction
Contributions which are reduced pursuant to this Section
5.2(b) (including any income earned and minus any loss allocable to
such amounts as determined in Section 5.2(c) as if such Section
applied to the Participant's Matching Contribution Account rather than
his Compensation Reduction Contribution Account) shall be forfeited
and allocated to the Matching Contribution Account of each Active
Participant (as defined in Section 2.3(c)(2)), including the Active
Participant from whose Account such contribution has been forfeited,
in the same proportion that the amount of such Active Participant's
Employer Matching Contributions bears to the total amount of Employer
Matching Contributions of all Active Participants for the Plan Year
after giving effect to the forfeitures prescribed in this sentence.

3. Section 5.2(c)(2) is hereby amended, effective January l, 1994, to
read as follows:

(2) Income for Period Between End of Calendar Year and Distribution.
No income or loss shall be distributed or forfeited with respect
to the period between the end of a calendar year and the date of
distribution or forfeiture.

4. A new sentence is hereby added to the end of Section 5.3(d)(2),
effective January 1, 1994, to read as follows:

Effective January 1, 1994, Employer Matching Contributions made with
respect to matched Employer Compensation Reduction Contributions which
are reduced pursuant to this Section 5.3(d)(and any income allocable
to such Employer Matching Contributions determined in

2
<PAGE>

accordance with Section 5.3(f) as if such Section applied to the
Participant's Matching Contribution Account rather than his
Compensation Reduction Contribution Account) shall be forfeited and
allocated to the Matching Contribution Account of each Active
Participant (as defined in Section 2.3(c)(2)) who is not a Highly
Compensated Employee for such Plan Year in the same proportion that
the amount of such Active Participant's Employer Matching
Contributions bears to the total amount of Employer Matching
Contributions of all such Active Participants for the Plan Year.

5. Section 5.3(f)(2) is hereby amended, effective January 1, 1994, to
read as follows:

(2) Income for Period Between End of Plan Year and Distribution. No
income or loss shall be distributed or forfeited with respect to
the period between the end of a Plan Year and the date of
distribution or forfeiture.

6. Section 5.4(f)(2) is hereby amended, effective January 1, 1994, to
read as follows:

7. Section 5.5 is hereby amended, effective January 1, 1989, to read as
follows:

5.5 Multiple Use of Section 5.3 and Section 5.4. Notwithstanding
Section 5.3 and Section 5.4, the sum of the actual deferral
percentages and the average contribution percentages, for a Plan Year,
of the Highly Compensated Employees who are Active Participants shall
not exceed the greater of (a) or (b) where:

(a) is the sum of (1) plus (2) where:

(l) is one hundred and twenty-five percent (125%) of the greater
of (i) the actual deferral percentage for such Plan Year of
the non-Highly Compensated Employees who are Active
Participants, or (ii) the average contribution percentage
for such Plan Year of such non-Highly compensated Employees;
and

(2) is two (2) percent plus the lesser of the amount determined
under Section 5.5(a)(l)(i) or the amount determined under
Section 5.5(a)(l)(ii), but in no event shall this amount
exceed two hundred percent (200%) of the lesser of the

3
<PAGE>

amount determined under Section 5.5(a)(1)(i) or the amount
determined under Section 5.5(a)(1)(ii); and

(b) is the sum of (l) plus (2) where:

(l) is one hundred and twenty-five percent (125%) of the lesser
of (i) the actual deferral percentage for such Plan year of
the non-Highly Compensated Employees who are Active
Participants, or (ii) the average contribution percentage
for such Plan Year of such non-Highly Compensated Employees;
and

(2) is two (2) percent plus the greater of the amount determined
under Section 5.5(a)(l)(i) or the amount determined under
Section 5.5(a)(1)(ii), but in no event shall this amount
exceed two hundred percent (200%) of the greater of the
amount determined under Section 5.5(a)(l)(i) or the amount
determined under Section 5.5(a)(1)(ii).

The Committee may establish, from time to time, such rules,
restrictions and limitations as it may deem appropriate to ensure that
the above limitations are met. If the Committee determines that the
reduction or disallowance of Employer Compensation Reduction
Contributions or Employer Matching Contributions is necessary or
desirable with respect to Highly Compensated Employees, the Committee
may reduce or disallow Employer Compensation Reduction Contributions
or Employer Matching Contributions for such Highly Compensated
Employees, including Employer Compensation Reduction Contributions or
Employer Matching Contributions already made for that Plan Year, as
provided in Section 5.3(d) and (f) or Section 5.4(d) and (f).

8. The last paragraph of Section 5.6(c) is hereby amended, effective
January 1, 1989, to read as follows:

Any Employer Compensation Reduction Contributions reduced or
eliminated under this Section 5.6 shall be distributed to the
Participant on whose behalf such contributions were made. Any
allocations of Employer Matching Contributions, Employer Profit
Sharing Contributions, Minimum Employer Contributions, Forfeitures,
and Special Employer Contributions reduced or eliminated under this
Section 5.6 shall, subject to the limits of this Section 5.6, be
reallocated to the Accounts of the other Participants as of the last
day of that Plan Year in the same manner as such Contributions were
initially allocated. Any Employer Matching Contributions, Employer
Profit Sharing Contributions, Forfeitures, Minimum Employer
Contributions and Special Employer Contributions which cannot, under
the limits of this Section 5.6, be reallocated to the Accounts of
other

4
<PAGE>

Participants in the Plan Year shall be held, subject to the limits of
this Section 5.6, in a suspense account and reallocated in the
subsequent Plan Year prior to making and Employer contributions in any
subsequent Plan Year. On Plan termination any amounts held in a
suspense account which, under the limits of this Section 5.6, cannot
be reallocated to Participants in the Plan Year of the termination,
shall be returned to the Employers in such proportions as shall be
determined by the Committee.

9. Section 8.1 is hereby amended effective upon execution hereof to add a
new subsection (h) to read as follows:

(h) Any distribution to which a Participant is otherwise entitled
under this Article VIII may commence less than 30 days after the
notice required under Treasury Regulation Section 1.411(a) -
11(c) is given, provided that (l) the Plan Administrator clearly
informs the Participant that the Participant has a right to a
period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution,
and (2) the Participant, after receiving the notice
affirmatively elects to receive a distribution.

10. Section 8.4(a)(1)(A)(i) is hereby amended, effective January 1, 1994,
to read as follows:

(i) Medical expenses described in Section 213(d) of the Code incurred
by the Participant, the Participant's spouse or any dependents of
the Participant (as defined in Section 152 of the Code) or
necessary for those persons to obtain medical care described in
Section 213(d);

11. Section 8.4(a)(1)(A)(iii) is hereby amended, effective January 1,
1994, to read as follows:

(iii) Payment of tuition (and - related educational fees) for the next
l2 months of postsecondary education for the Participant, his
spouse, children or dependents (as defined in Section 152 of the
Code); or

12. Section 8.4(a)(2)(A)(i) is hereby amended, effective January 1, 1994,
to read as follows:

(i) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant including the amount
needed to pay any federal, state and local income taxes and
penalties reasonably expected to be incurred by reason of the
distribution;

5
<PAGE>

IN WITNESS WHEREOF, the amendment is executed by the Company this 20th
day of December 1994 by its duly authorized officer.

HELLER FINANCIAL, INC.

By: /s/ Peggi L. Sturm
----------------------
Its: Vice President
----------------------

<PAGE>

Exhibit 10(t)

THIRD AMENDMENT OF
------------------
HELLER FINANCIAL, INC.
----------------------
SAVINGS AND PROFIT SHARING PLAN
-------------------------------

WHEREAS, Heller Financial, Inc. (the "Company") maintains the Heller
Financial, Inc. Savings and Profit Sharing Plan, as amended and restated
effective as of January 1, 1989, (the "Plan") for the benefit of its eligible
employees and the eligible employees of its affiliates that adopt the Plan with
the Company's consent; and

WHEREAS, the Plan has previously been amended and further amendment
thereof now is considered desirable;

NOW, THEREFORE, in exercise of the power reserved to the Company by
Section 11.2 of the Plan and pursuant to the authority granted to the
undersigned officer by resolutions adopted by the Board of Directors of the
Company, the Plan be and hereby is amended in the following particulars,
effective as of August 1, 1995:

1. By deleting the second sentence from Section 2.2 of the Plan.

Explanation. This particular deletes a sentence in the definition Accrued
Benefit regarding the valuation of the Accrued Benefit. The deleted
sentence was inaccurate given the change to daily valuation.

2. By deleting Section 2.12(d) from the Plan.

Explanation. This particular deletes an operative rule in the definition
of compensation dealing with participants in another incentive plan for a
portion of a plan year that has now been included in the profit sharing
allocation rules under Section 6.1.
<PAGE>

3. By deleting Section 2.3 from the Plan.

Explanation. Section 2.3 defining "active participant" has been deleted
from the plan in an effort to streamline some of the plan's complex
language. The operative rules that were included in the definition have
been moved to the eligibility and participation provisions of Section 3.1
and to the extent applicable to the allocation rules under Section 6.1,
6.2, 6.3 and 6.4. Hopefully this change will help make the document more
"user-friendly" with respect to these rules.

4. By substituting the following for the first sentence of Section
2.16 of the Plan:

"Eligible Employee" means any full or part-time Employee employed by an
Employer but excluding any Employee who is a member of a collective
bargaining unit represented by a collective bargaining agent with which the
Employer has or has had a bargaining agreement, unless such agreement
requires that the Employee participate in the Plan. A full-time Employee
is any regular Employee who is scheduled to work full-time hours (as
determined by the Employer) on a regular and continuous basis (i.e.
consistently for a period or six months or more) and a part-time Employee
is any regular Employee who is scheduled to work on a regular and
continuous basis (i.e. consistently for a period of six months or more)
fewer hours per week than the hours of a full-time Employee. Employees
whose period of employment is not expected to exceed six months shall not
be considered either full or part-time regular Employees until such time as
their period of employment has exceeded six months."

Explanation. The definition of eligible employee has been modified by this
particular to include references to full and part-time employees and to
revise the exclusion of temporary employees. As we discussed at our
meetings last summer on the summary plan description, temporary employees
who complete a minimum service requirement must be entitled to participate
in the plan. The complete exclusion of temporary employee under the prior
definition presented a qualification issue for the plan. As revised,
temporary employees will be eligible after they have been employed for six
months.

5. By deleting Section 2.32 from the Plan:

Explanation. The definition of "rollover contribution" in Section 3.23
needed to be revised to reflect the correct Code Section reference and in
an effort to streamline

-2-
<PAGE>

the plan language we incorporated the definition in Section 4.8 of the plan
since that is the only place in the document that the definition is used.

6. By substituting the following for Section 2.38 of the Plan:

"2.38. 'Valuation Date' means each business day during the Plan
Year."

Explanation. The definition of "valuation date" has been revised to
reflect daily valuation.

7. By renumbering the Sections in Article II and by making any
appropriate cross-reference changes to reflect the deletions of Sections 2.2,
2.12(d), 2.3 and 2.32 above.

8. By substituting the following for Section 3.1 of the Plan:

"3.1. Participation. Each Eligible Employee who was a Participant in
the Plan on December 31, 1992 shall continue to be a Participant in the
Plan on and after that date subject to the terms and conditions of the
Plan. Each other Eligible Employee shall become a Participant on his date
of hire provided that:

(a) for purposes of Employer Profit Sharing Contributions, the
Eligible Employee shall not be considered to be a Participant
until the first January 1 or July 1 coincident with or next
following his date of hire, and

(b) for purposes of Employer Matching Contributions, the Eligible
Employee shall not be considered to be a Participant until the
first January 1 or July 1 coincident with or next following the
date the Eligible Employee completes a year of Continuous Service
(as defined in Section 8.5).

Admission to participation in the Plan shall only be made when an Eligible
Employee is not on an Authorized Leave of Absence or serving with the Armed
Forces of the United States. For purposes of this Section 3.1, in the
event that a particular January 1 or July 1 is not a regular business day,
then this subsection

-3-
<PAGE>

shall be read to mean the first regular business day following such January
1 or July 1."

Explanation. Section 3.1 has been revised to delete the old timing rules
for participants' compensation reduction contribution elections now that
such elections can be made immediately.

9. By substituting the following for Sections 3.3 and 3.4 of the
Plan:

"3.3. Participation Upon Change of Job Status. An Employee who is
not a Participant because he is not an Eligible Employee, shall become a
Participant upon the date of his becoming an Eligible Employee; provided,
that (a) such an Employee shall not be eligible for Employer Profit Sharing
Contributions until the later of the date such Employee first satisfies the
requirements of Section 3.1(a) (whether before or after becoming an
Eligible Employee) and the date the Employee becomes an Eligible Employee
and (b) such an Employee shall not be eligible for Employer Matching
Contributions until the later of the date such Employee first satisfies the
requirements of Section 3.1(b) (either before or after becoming an Eligible
Employee) and the date such Employee becomes an Eligible Employee.

3.4. Participation Upon Reemployment. An Eligible Employee who has a
Termination of Employment and thereafter again becomes an Eligible
Employee, shall become a Participant immediately upon becoming an Eligible
Employee; provided, that (a) such an Employee shall not be eligible for
Employer Profit Sharing Contributions until the later of the date such
Employee first satisfies the requirements of Section 3.1(a) (whether before
or after becoming an Eligible Employee again) and the date the Employee
again becomes an Eligible Employee and (b) such an Employee shall not be
eligible for Employer Matching Contributions until the later of the date
such Employee first satisfies the requirements of Section 3.1(b) (either
before or after becoming an Eligible Employee again) and the date such
Employee again becomes an Eligible Employee.

3.5. Leaves of Absence. A paid Authorized Leave of Absence will not
interrupt continuity of service or participation in the Plan. A
Participant who is on an unpaid Authorized Leave of Absence shall have his
participation in the Plan suspended until the Participant returns to
employment with an Employer. Employer Contributions for the Plan Year in
which the Participant takes an unpaid Authorized Leave of Absence shall be
based on the amount of the Participant's Employer Compensation Reduction
Contributions made and Compensation earned as of the date the Participant's

-4-
<PAGE>

unpaid Authorized Leave of Absence commences. Upon return from an unpaid
Authorized Leave of Absence to active employment with an Employer, an
Eligible Employee shall be immediately eligible to commence participation
in the Plan and the Employer Compensation Reduction election in effect at
the time the Participant commenced his unpaid Authorized Leave of Absence
shall be reinstated.

3.6. Leased Employees. A Leased Employee, as defined below, shall
not be eligible to participate in the Plan. A 'Leased Employee' means any
person who is not an Employee of an Employer, but who has provided services
to an Employer of the type which have historically (within the business
field of such Employer) been provided by employees, on a substantially
full-time basis for a period of at least one year, pursuant to an agreement
between the Employer and a leasing organization. The period during which a
Leased Employee performs services for an Employer shall be taken into
account for purposes of this Article 3, unless (i) such Leased Employee is
a participant in a money purchase plan maintained by the leasing
organization which provides a non-integrated employer contribution rate of
at least 10 percent of compensation, immediate participation for all
employees and full and immediate vesting, and (ii) leased employees do not
constitute more than 20 percent of the Employer's nonhighly compensated
workforce."

3.7. Restricted Participation. When payment of all of a
Participant's Account Balance is not made following the Participant's
Termination of Employment, the Participant or the Participant's Beneficiary
will be treated as a Participant for all purposes of the Plan, except as
follows:

(a) The Participant will not be entitled to any Employer Profit
Sharing or Employer Matching Contributions and may not elect to
have further Employer Compensation Reduction Contributions made
on his behalf,

(b) The Participant may not request a loan under the Plan, and

Explanation. Sections 3.3 and 3.4 of the plan have been revised to reflect
the changes in the timing of participants' compensation reduction elections
on changes in job status and reemployment. In addition, new rules
regarding leaves of absence and leased employees have been added under
Sections 3.5 and 3.6 and a provision articulating the participant status of
a terminated participant has been added. Note

-5-
<PAGE>

that in both Sections 3.3 and 3.4 once an employee has satisfied the
requirements for receiving employer profit sharing contributions (the
occurrence of the first January 1 or July 1 coincident with or next
following date of hire) and for receiving employer matching contributions
(completion of a year of continuous service) the Employee is immediately
eligible upon becoming an eligible employee again by reason of rehire or
change in employment status. As we discussed, this may be somewhat
inconsistent with one reading of the summary plan description that the
employee becomes eligible immediately for all contributions. (See page 9
of SPD under "If You Leave Heller and Are Rehired").

10. By substituting the following for Sections 4.1 through 4.5 of the
Plan:

"4.1. Employer Profit Sharing Contributions. Subject to Sections
11.1, 11.2 and 11.3, for each Plan Year each Employer shall contribute to
the Trust on behalf of each of its Employees who is a Participant who is
eligible to receive an Employer Profit Sharing Contribution (as provided in
Section 6.1) an amount (generally expressed as a percentage of such
Participant's Compensation) if any, determined by the Employer's Board of
Directors. The Employer Profit Sharing Contribution shall be allocated and
credited in accordance with Section 6.1 of the Plan. The Employer shall
designate the Plan Year on account of which Employer Profit Sharing
Contributions shall be made and shall specify the amount or a definite
basis or formula by which the Employer Profit Sharing Contribution can be
determined. The Employer may also specify that a portion of any
contribution be designated as a "Special Employer Contribution" to be
allocated in accordance with Section 6.2. of the Plan. Once allocated to
Participants' Accounts, all Employer Profit Sharing Contributions,
including any such contributions designated as Special Employer
Contributions, shall be fully vested and nonforfeitable.

4.2. Employer Compensation Reduction Contributions. Each Plan Year
each Participant's Compensation shall be reduced by the amount (if any)
specified in the Participant's Compensation Reduction Election and the
amount by which the Participant's Compensation is reduced shall be
contributed to the Trust by the Participant's Employer as an Employer
Compensation Reduction Contribution. A Participant's Compensation Reduction
Election shall specify the percentage (from a minimum of 1% to a maximum of
16% in fractional increments of up to two decimal points) of the
Participant's Compensation the Participant elects to contribute to the Plan
for the Plan Year. In no event shall the Employer Compensation Reduction
Contributions of any Participant for any calendar year exceed $9,500 or
such other amount as may be determined in accordance with regulations or
rulings prescribed by the Secretary of the Treasury or his delegate
pursuant to the provisions of Section 415(d) of the Code. For the

-6-
<PAGE>

plan year ending December 31, 1995, a Participant may also elect, in such
amounts as the Committee may determine, to have all or a portion of the
Participant's profit sharing bonus contributed to the Plan as an Employer
Compensation Reduction Contribution. The Committee may, in its dis-
cretion, limit the monthly amount of Compensation Reduction Contributions
for Participants to a pro rata portion of such annual limit with such
rounding and other administratively desirable provisions as it from time to
time deems appropriate. Once allocated to Participants' Accounts, all
Employer Compensation Reduction Contributions shall be fully vested and
non-forfeitable.

4.3. Employer Matching Contributions. Effective for Plan Years
beginning on and after January 1, 1995, for each Matching Contribution
Period occurring during the Plan Year, each Employer shall contribute an
Employer Matching Contribution equal to fifty percent (50%) (or such
greater or lesser percentage determined by the Committee) of each eligible
Participant's Employer Compensation Reduction Contributions made each month
during the Matching Contribution Period up to a maximum of five percent
(5%) (or such greater or lesser percentage as determined by the Committee)
of the Participant's Compensation paid each month during such period;
provided, that a Participant shall not be entitled to an Employer Matching
Contribution unless the Participant was employed on the last regular
business day of the Matching Contribution Period and no Employer Matching
Contributions for any Matching Contribution Period shall exceed an amount
or percentage of Compensation or Employer Compensation Reduction
Contributions which may from time to time be established by the Committee.
A Matching Contribution Period shall mean (a) each period beginning on the
regular business day coincident with or next following January 1 and ending
on the regular business day coincident with or next preceding the following
June 30 and (b) each period beginning on the business day coincident with
or next following July 1 and ending on the business day coincident with or
next preceding the following December 31. Participants shall be vested in
the Employer Matching Contributions allocated to their Matching
Contribution Accounts in accordance with Section 8.5.

4.4. Payment of Contributions. Employer Compensation Reduction
Contributions shall be paid to the Trustee as soon as practicable after
being withheld from Participants' Compensation but in no event shall such
contributions be paid to the Trustee later than the time prescribed by law
for making such contributions. Employer Profit Sharing Contributions and
Employer Matching Contributions shall be contributed to the Trustee at such
time as the Company shall determine, but in no event shall such
contributions be made later than the due date for filing the Employer's
federal income tax return (including extensions) for the Tax Year during
which the last day of the Plan Year occurs.

-7-
<PAGE>

4.5. Compensation Reduction Elections. A Participant may make,
change or revoke a Compensation Reduction Election at any time, provided
that any such election, change or revocation shall apply solely to
Compensation that is not yet payable as of the date of such election,
change or revocation. A Participant's initial Compensation Reduction
Election may be made at any time and shall be effective commencing with the
first pay period following the date the Compensation Reduction Election is
received by the Committee. The Compensation Reduction Election shall
remain in effect, notwithstanding any change in Compensation, until such
Participant shall change such Compensation Reduction Election or until he
shall cease to be a Participant. A Participant's first Compensation
Reduction Election shall be in writing. A change in or revocation of a
Participant's Compensation Reduction Election may be made via telephone
voice response at any time and shall be effective on (a) the first regular
business day coincident or next following the 16th day of a month if the
change or revocation is made after the 25th day of the prior month and
before the 10th day of the current month, or (b) the first regular business
day of the month if the change or revocation is made after the 10th day of
the prior month, but before the 25th day of such prior month."

Explanation. Sections 4.1 through 4.5 of the plan have been completely
reworded in an attempt to make the rules contained in these Sections easier
to understand. The reworked language also reflects the new methodology for
matching contributions monthly but depositing matching contributions semi-
annually (Section 4.3) and the ability to change a compensation reduction
election via the telephone voice response system. Note that in Section 4.2
the profit sharing bonus election feature has been retained for the 1995
plan year only. This provision would be removed in the restatement to
follow.

11. By adding the following sentence to Section 4.8 of the Plan:

"A 'Rollover Contribution' means a rollover contribution as described in
Section 402(c), Section 403(a)(4) or 408(d)(3) of the Code."

Explanation. The definition of rollover contribution has been added to the
rollover contribution provision.

12. By substituting the term "Participant" for the term "Active
Participant" wherever the latter term occurs in Article V of the Plan.

-8-
<PAGE>

Explanation. The substitution of the term "participant" for the term
"active participant" was necessitated by the removal of the defined term
active participant as noted in 3 above.

13. By substituting the following for Article VI of the Plan:

"Article VI
Allocations of Contributions
----------------------------

6.1. Employer Profit Sharing Contributions. As of the last regular
business day of the Plan Year, any Employer Profit Sharing Contribution
(except for any portion designated as a Special Employer Contribution)
shall be allocated and credited to the Employer Profit Sharing Accounts of
Participants on whose behalf such a contribution is made. A Participant
shall be eligible for an Employer Profit Sharing Contribution if the
Participant (a) was employed by an Employer on the last business day of the
Plan Year and was either employed on or before July 1 (or the first regular
business day thereafter if July 1 is not a regular business day) or became
an Eligible Employee after July 1 of the Plan Year but was immediately
eligible to receive an Employer Profit Sharing Contribution as provided in
Article III, (b) is not a Highly Compensated Employee for the Plan Year,
(c) completed at least 900 Hours of Service during the Plan Year and (d) is
eligible to participate in the Heller Incentive Plan. If a Participant was
first employed after the first business day of the Plan but before the
first business day coincident with or next following July 1 of the Plan
Year, only the Participant's Compensation from July 1 through the end of
the Plan Year shall be considered in determining the Participant's Employer
Profit Sharing Contribution. In the case of a Participant who is eligible
for an incentive plan other than the Heller Incentive Plan for a portion of
the Plan Year, only that portion of the Participant's Compensation earned
while the Participant was eligible for the Heller Incentive Plan shall be
considered in determining the Participant's Employer Profit Sharing
Contribution. Employer Profit Sharing Contributions shall generally be
made and credited to Participants' Accounts by April 1 following the end of
the Plan Year for which a contribution is made.

6.2. Special Employer Contributions. As of the last business day of
the Plan Year, any Special Employer Contribution shall be allocated to the
Compensation Reduction Account of each Participant who is not a Highly
Compensated Employee for the Plan Year, pro rata, according to such
Participant's Employer Compensation Reduction Contributions for the Plan
Year. Special Employer Contributions shall generally be made and

-9-
<PAGE>

credited to Participants' Accounts by April 1 following the end of the Plan
Year for which a contribution is made.

6.3. Employer Compensation Reduction Contributions. Employer
Compensation Reduction Contributions shall be allocated and credited to the
Compensation Reduction Accounts of Participants on whose behalf such
contributions were made as soon as practicable following the date such
contributions are deposited with the Trustee.

6.4. Employer Matching Contributions. As of the last day of each
Matching Contribution Period occurring during a Plan Year, Employer
Matching Contributions made for such Matching Contribution Period shall be
allocated and credited to the Matching Contribution Accounts of
Participant's entitled to receive such Employer Matching Contributions.
Employer Matching Contributions for a matching contribution period shall
generally be made and credited in the first month following the end of the
Matching Contribution Period."

Explanation. Article 6 has been rewritten to reflect in a more concise
manner the way the various contributions to the plan are allocated. Please
note that these Sections need to be reviewed carefully with respect to when
contributions are made and when they are credited to participants'
accounts. These allocation provisions contain many of the operative rules
previously found in the definition of "active participant".

14. By deleting the last sentence from Section 7.6 of the Plan,
substituting the following for Section 7.7 of the Plan, deleting Section 7.8 of
the Plan and by redesignating existing Sections 7.9 and 7.10 thereof as Sections
7.8 and 7.9, respectively:

"7.7. Investment Funds and Investment Elections. The Trust Fund will
include one or more Investment Funds established by the Trustee at the
direction of the Committee, which Investment Funds may be changed from time
to time as determined by the Committee. The Investment Funds will be
maintained in accordance with such investment policies as shall be adopted
by the Committee and communicated to Participants. On any Valuation Date,
a Participant may elect via telephone voice response the Investment Funds
in which his Accounts are to be invested. Investment elections must be in
increments of 1% based on a percentage totalling 100%. A Participant may
elect to change his investment election with respect to the investment of
any contributions made by him or for his benefit on any

-10-
<PAGE>

Valuation Date in accordance with rules and procedures adopted by the
Committee for that purpose. Unless a Participant elects to change his
investment election with respect to his Accounts, his Accounts will be
invested in accordance with the Participant's last investment election.
During any period in which no direction as to the investment of a
Participant's Accounts is in effect, such Accounts will be invested in
accordance with rules and procedures adopted by the Committee for such
purpose. Investment election changes and transfers may be made on any
Valuation Date via telephone voice response in accordance with such rules
and procedures as the Committee shall adopt from time to time and
communicate to Participants."

Explanation. Substantial revisions have been made in the investment fund
election and accounting rules in Sections 7.6, 7.7 and 7.8 to reflect daily
valuations and the new telephone voice response system for investment
elections. Rather than specify each of the investment options (as was done
in the past) we have simply stated that one or more options as chosen by
the Committee will be available. This information can then be provided in
the SPD, as you have done, and the plan will not require an amendment each
time a change is made in the options.

15. By substituting the following for Section 8.2(a) of the Plan:

"(a) Method of Payment. If a Participant has a Termination of
Employment for any reason other than the Participant's death,
the Trustee shall distribute to the Participant his Accrued
Benefit after the later of the date the Participant attains age
70 1/2 or the Participant's Termination of Employment, provided
that the Participant may elect another date for distribution.
The Participant's Accrued Benefit shall be valued on the date
the Participant's Accrued Benefit is to be distributed or, if
later, the date the Participant's election is received and the
Participant's Accrued Benefit shall be distributed as soon as
practicable thereafter. Payment shall be made in one lump sum."

Explanation. Section 8.2(a) sets forth the rules for determining what
amount of benefit is paid on a normal distribution and when it is paid.
Accordingly, this particular revises the rules to reflect daily valuations.
Unlike the former language, the new language is not extremely precise and,
therefore, is more flexible. It simply provides that a participant's
account will be valued on the date it is to be distributed with actual
physical distribution made as soon as practicable after the valuation.
This gives the plan administrator a time to fix the amount or value of

-11-
<PAGE>

the distribution and then a time frame to physically get the check out.
This same language is employed below in Sections 8.3(b) regarding
distributions upon death and 8.4(b) with respect to age 59 1/2 withdrawals.

16. By substituting the following for Section 8.3(b) of the Plan:

"(b) Method of Payment. The distribution of the Participant's
Accrued Benefit shall be made in the form of one lump sum to the
Participant's surviving spouse, or as permitted in Section
8.3(a), to the other Beneficiary or Beneficiaries designated by
the Participant, as soon as practicable prior to last date by
which such distribution must be made by law as specified under
paragraph (d) below; provided, that the surviving spouse, or
other Beneficiary or Beneficiaries, may elect (if they are not
prohibited by an election of the Participant from doing so) to
receive distribution on an earlier date. The value of the
Accrued Benefit shall be determined on the Valuation Date
payment of the Accrued Benefit is processed and the value so
determined shall be paid as soon as practicable thereafter."

Explanation. Section 8.3(b) sets forth the rules for determining the
amount of benefit that gets paid as a death benefit and when it gets paid.
Payment is made prior to the last day by which payment must be made to
comply with the Internal Revenue Code (i.e, by December 31 of the year the
participant would have attained age 70 1/2 in the case of a surviving
spouse and by December 31 of the calendar year which contains the fifth
anniversary of the participant's death in the case of other beneficiaries)
unless the surviving spouse or beneficiary elects an earlier payment. As
with other valuation and timing rules, these rules have been revised to
reflect daily valuation. (See explanation to 15 above).

17. By adding the following sentence immediately following the first
sentence of Section 8.4(a) of the Plan:

"Notwithstanding the foregoing, a Participant may not request a
distribution from the portion of his Accounts that represent the balance
credited to a Participant's Accounts prior to January 1, 1989; earnings on
Employer Compensation Reduction Contributions credited on and after January
1, 1989, and Employer Profit Sharing contributions and any earnings thereon
credited on and after January 1, 1996."

-12-
<PAGE>

Explanation. The hardship withdrawal rules in Section 8.4 are revised by
this particular to indicate that participants may not withdraw the balance
credited to their accounts prior to January 1, 1984, earnings on employer
compensation reduction contributions credited after January 1, 1989 and
employer profit sharing contributions and earnings credited after January
1, 1996.

18. By substituting the following for Section 8.4(a)(3):

"(3) Withdrawals under this Section 8.4(a) shall be paid first
from the Participant's Employee Contribution Account, then
from his Rollover Contribution Account, then from his
Profit Sharing Contribution Account, then from his Matching
Contribution Account, and finally from his Compensation
Reduction Account."

Explanation. Section 8.4(a)(3) has been revised to correspond to the
changes made above in the introductory language to Section 8.4(a) on those
portions of a participant's accounts that cannot be accessed through a
hardship withdrawal.

19. By substituting the following for the second sentence of Section
8.4(b) of the Plan:

"The Participant's Accrued Benefit shall be valued on the Valuation Date on
which payment of the withdrawal is processed and the amount the Participant
has elected to receive under this Section shall be charged to the
Participant's Accounts and distributed as soon as practicable thereafter."

Explanation. Section 8.4(b) sets for the valuation rules on age 59 1/2
withdrawals and has been revised to reflect daily valuation. (See
explanation to 15 above).

20. By adding the following sentence at the end of Section 8.10 of
the Plan:

"Such distribution shall be made within 90 days of the last day of the
calendar quarter in which the Participant terminates employment or dies."

-13-
<PAGE>

Explanation. A 90-day distribution timing rule was added to the rules in
Section 8.10 regarding payment of small amounts (i.e., $3,500 or less) to
reflect plan administration.

21. By adding the parenthetical "(excluding Employee Contributions
made prior to July 1, 1983)" immediately after the words "Accrued Benefit" where
they appear in the first sentence of Section 8.12(a)(2) of the Plan.

Explanation. This particular amends the participant loan provision to
state that employee contributions are not eligible for a loan.

22. By substituting the following for Section 8.12(b) of the Plan:

"(b) Any loan made under this Section 8.12 shall comply with the
following rules:

(1) The loan, by its terms, shall be required to be repaid
within 5 years, unless the loan is used to acquire a
dwelling unit which within a reasonable time is to be used
(determined at the time the loan is made) as a principal
residence of the Participant, in which case the loan is
required to be repaid within 10 years.

(2) All loans, except as provided in the regulations prescribed
by the Secretary of the Treasury, shall be amortized over
the term of the loan in substantially level payments not
less frequently than quarterly.

(3) A Participant may not have more than two loans outstanding
at any time. Participants may not make application for any
loan within 18 months of receipt of a prior loan, unless the
last preceding loan has been prepaid in full prior to
application for such loan.

(4) Effective October 1, 1995, there shall be a one-time
administrative charge per loan for setting

-14-
<PAGE>

up the loan and an annual maintenance fee payable from
Participant's Accounts. The Committee shall determine a
reasonable amount for such charges from time to time and
communicate them to Participants.

(5) Each loan shall be repaid through payroll deductions. The
minimum loan repayment shall be $10 per pay period.

(6) A Participant may prepay the full amount of any outstanding
loan from the Plan, plus all interest accrued to the date of
prepayment at any time. Partial prepayment or acceleration
of loan repayment schedules shall be prohibited.

(7) If a Participant is on an unpaid Authorized Leave of
Absence, loan repayments must continue to be made by the
Participant by cashier's check or money order at such times
or in accordance with such schedule as the Committee shall
determine."

Explanation. This particular amends the loan provisions to reflect a
number of changes to the loan rules particularly; that participants may not
have more than two outstanding loans at any time; participants must wait 18
months before applying for a second loan; participants will be charged a
set up fee and yearly administration fees; and repayments must be made by
payroll deduction unless the participant is on a leave of absence in which
case payments must be made by cashier's check or money order.

23. By substituting the following for the last sentence of Section
8.12(c) of the Plan:

"In the event that a Participant fails to make a loan payment within 90
days of the date it is due, the Plan may foreclose on the portion of the
Participant's Accounts which secure the loan and which would be
distributable to the Participant as of the earliest date the Participant
could elect distribution. If a Participant has a Termination of Employment
with an outstanding loan balance, the loan is required to be repaid in full
within 90

-15-
<PAGE>

days of such Termination of Employment, or the then outstanding balance
plus any interest accrued to date will be treated as a taxable
distribution."

Explanation. This particular amends to loan provision covering foreclosure
on a loan to state that a loan payment must be made with 90 days and upon
termination any loan must be repaid in full within 90 days.

24. By substituting the following for the last sentence of Section
8.12(d) of the Plan:

"The interest and principal repayments of a Participant's loan shall be
allocated to the Participant's accounts from which amounts were withdrawn
to fund the loan pro rata according the amounts so withdrawn and shall be
invested in accordance with the Participant's investment election
applicable to new contributions made on the Participant's behalf."

Explanation. This particular amends the loan provision to state how loan
repayments will be credited to participant's accounts and how the
repayments will be invested.

IN WITNESS WHEREOF, the undersigned officer of Heller Financial, Inc.
has caused the foregoing amendment to be executed this 9th day of
September, 1996.

HELLER FINANCIAL, INC.

By /s/ Challis M. Lowe
--------------------------------
Its Executive Vice President
--------------------------------

ATTEST

By /s/ David M. Sherbin
- ----------------------------------------
Its Assistant Secretary & Senior Counsel
- ----------------------------------------

-16-

<PAGE>

EXHIBIT (12)

HELLER FINANCIAL, INC.

COMPUTATION OF RATIO OF EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(DOLLAR AMOUNTS IN
MILLIONS)
<S> <C> <C> <C> <C> <C>
Net income before income taxes and minority
interest in income of Heller International
Group, Inc...................................... $183 $181 $174 $133 $ 45
---- ---- ---- ---- ----
Add-Fixed charges
Interest and debt expense...................... 452 464 336 264 295
One-third of rentals........................... 7 7 6 5 5
---- ---- ---- ---- ----
Total fixed charges.......................... 459 471 342 269 300
---- ---- ---- ---- ----
Net income as adjusted........................... $642 $652 $516 $402 $345
---- ---- ---- ---- ----
Ratio of earnings to fixed charges............... 1.40x 1.38x 1.51x 1.49x 1.15x
==== ==== ==== ==== ====
Preferred stock dividends on a pre-tax basis..... 16 17 17 12 3
Total combined fixed charges and preferred
stock dividends............................. $475 $488 $359 $281 $303
---- ---- ---- ---- ----
Ratio of earnings to combined fixed charges and
preferred stock dividends....................... 1.35x 1.34x 1.44x 1.43x 1.14
==== ==== ==== ==== ====
</TABLE>

For purposes of computing the ratio of earnings to combined fixed charges
and preferred stock dividends, "earnings" includes income before income taxes,
the minority interest in Heller International Group, Inc. income and fixed
charges. "Combined fixed charges and preferred stock dividends" includes
interest on all indebtedness, one third of annual rentals (approximate portion
representing interest) and preferred stock dividends on a pre-tax basis.

<PAGE>

EXHIBIT (21)

SUBSIDIARIES OF THE REGISTRANT

<TABLE>
<CAPTION>
JURISDICTION IN
SUBSIDIARY WHICH INCORPORATED
- ---------- ------------------
<S> <C>
AmerSig Graphics, Inc......... Delaware
AmerSig Southwest, Inc...... Delaware
AS Mid-America, Inc......... Delaware
AS Memphis, Inc............. Delaware
AmerSig Southeast, Inc...... Delaware
AmerSig Technology, Inc..... Delaware
AS ASTEC, Inc............... Delaware
CHB Holdings, Inc............. Delaware
First Cove Investors, Inc..... Delaware
F.O. Building Corp............ Delaware
GlobaLease, Inc............... Delaware
Heller-ABB1, Inc.............. Delaware
Heller Affordable Housing,
Inc.......................... Delaware
Heller Air I, Inc............. Delaware
Heller Air IV, Ltd............ Bermuda
Heller Capital Markets Group,
Inc.......................... Delaware
Heller Equity Capital
Corporation.................. Delaware
Amspec, L.P................. Delaware
Crown Holding Company....... Delaware
Crown Textile Company..... Delaware
Kroy Holding Company........ Delaware
Kroy, Inc................. Delaware
Security Guard Holdings,
Inc........................ Delaware
Employers Security
Company, Inc............. Delaware
Heller Investments, Inc..... Delaware
H.E. Two Corporation........ Delaware
H.E. One Corporation...... Delaware
Heller Financial Leasing,
Inc.......................... Delaware
NCM, L.P.................... Delaware
Carlos Murphy's, Inc...... Delaware
Heller First Capital Corp..... Delaware
Heller International Group,
Inc.......................... Delaware
Heller International
Holdings, Inc.............. Delaware
HIG Asia Pacific
Management Pte Ltd....... Singapore
Heller Asia Capital....... Singapore
Heller De Chile, S.A...... Chile
Heller do Brasil-
Participacoes S/C, Ltda.. Brazil
Heller Europe Limited..... United Kingdom
Heller Financial Services
Limited.................. Australia
S.H. Lock Acceptances
Limited................ Australia
Heller Equipment
Finance, Limited....... Australia
Heller Commercial
Services Pty. Limited.. Australia
Heller Financial
Services Superannuation
Pty. Limited........... Australia
Heller Research Pty.
Limited................ Australia
Heller Holding France,
S.A...................... France
Heller Thai Holding
Company Limited.......... Thailand
Heller SGPS, Lda.......... Portugal
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
JURISDICTION IN
SUBSIDIARY WHICH INCORPORATED
- ---------- ------------------
<S> <C>
Heller Latin America Holdings, Inc........................... Delaware
Aurum-Heller Factoraje, S.A. de C.V........................ Mexico
Aurum-Heller Operacion, S.A. de C.V........................ Mexico
Heller NFP, Inc.............................................. Delaware
Heller North America Holdings, Inc........................... Delaware
Heller Premium Finance, Inc.................................. Delaware
Heller Premium Finance of California, Inc.................... Delaware
Heller Real Estate Holdings, Inc............................. Delaware
Heller Small Business Lending Corp........................... Delaware
Heller Trade Receivables Holding, Inc........................ Delaware
National Acceptance Company of America....................... Delaware
NCMR, Inc.................................................... Delaware
Famous Restaurants, Inc.................................... Delaware
NFMR, Inc.................................................... Delaware
Realty Holdings Co., Inc..................................... Delaware
Electronic Realty Associates, Inc.......................... Delaware
</TABLE>

The names of all other subsidiaries of the Company are omitted because such
unnamed subsidiaries, considered in the aggregate as a single subsidiary, would
not constitute a significant subsidiary.

<PAGE>

EXHIBIT (23)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Heller Financial, Inc.:

As independent public accountants, we hereby consent to the incorporation of
our report dated January 24, 1997, (Except with the matter discussed in Note
18, as to which the date is February 5, 1997) included in this Form 10-K at
page 27, into the Company's previously filed Registration Statement on Form S-3
No. 33-58716.

Arthur Andersen LLP

Chicago, Illinois
February 11, 1997

<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

The undersigned director of HELLER FINANCIAL, INC., a Delaware
corporation (the "Company"), hereby constitutes and appoints DEBRA H. SNIDER
his true and lawful attorney-in-fact and agent in the name and on behalf of the
undersigned, to sign the name of the undersigned to the Company's Annual Report
on Form 10-K for the year ended December 31, 1996, to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and to any and all amendments thereto or to any other
instrument or document filed as a part of or in connection with such Annual
Report on Form 10-K or any amendment thereto.

Dated: February 4, 1997

Richard J. Almeida
------------------
Richard J. Almeida
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 3, 1997

Hajime Maeda
------------
Hajime Maeda
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 3, 1997

Yukihiko Chayama
----------------
Yukihiko Chayama
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 4, 1997

Hidehiko Ide
------------
Hidehiko Ide
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 4, 1997

Tsutomu Hayano
--------------
Tsutomu Hayano
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 4, 1997

Mark Kessel
-----------
Mark Kessel
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: January 31, 1997

Michael J. Litwin
-----------------
Michael J. Litwin
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 3, 1997

Dennis P. Lockhart
------------------
Dennis P. Lockhart
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

The undersigned director of HELLER FINANCIAL, INC., a Delaware
corporation (the "Company"), hereby constitutes and appoints DEBRA H. SNIDER
her true and lawful attorney-in-fact and agent in the name and on behalf of the
undersigned, to sign the name of the undersigned to the Company's Annual Report
on Form 10-K for the year ended December 31, 1996, to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and to any and all amendments thereto or to any other
instrument or document filed as a part of or in connection with such Annual
Report on Form 10-K or any amendment thereto.

Dated: February 4, 1997

Lauralee E. Martin
------------------
Lauralee E. Martin
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 4, 1997

Kenji Miyamoto
--------------
Kenji Miyamoto
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 4, 1997

Hideo Nakajima
--------------
Hideo Nakajima
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 3, 1997

Osamu Ogura
-----------
Osamu Ogura
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 4, 1997

Masahiro Sawada
---------------
Masahiro Sawada
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

Dated: February 4, 1997

Kenichi Tomita
--------------
Kenichi Tomita
<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

The undersigned officer of HELLER FINANCIAL, INC., a Delaware
corporation (the "Company"), hereby constitutes and appoints DEBRA H. SNIDER
his true and lawful attorney-in-fact and agent in the name and on behalf of the
undersigned, to sign the name of the undersigned to the Company's Annual Report
on Form 10-K for the year ended December 31, 1996, to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and to any and all amendments thereto or to any other
instrument or document filed as a part of or in connection with such Annual
Report on Form 10-K or any amendment thereto.

Dated: February 3, 1997

Lawrence G. Hund
----------------
Lawrence G. Hund

<PAGE>

<ARTICLE> 9
<LEGEND> This schedule contains summary financial information extracted from the
Heller Financial, Inc. Annual Report Form 10K for the period ending December
31, 1996 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 0
<INT-BEARING-DEPOSITS> 296
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 28
<INVESTMENTS-HELD-FOR-SALE> 266
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 8,529
<ALLOWANCE> (225)
<TOTAL-ASSETS> 9,926
<DEPOSITS> 0
<SHORT-TERM> 2,745
<LIABILITIES-OTHER> 896
<LONG-TERM> 4,761
<COMMON> 663
0
150
<OTHER-SE> 654
<TOTAL-LIABILITIES-AND-EQUITY> 9,926
<INTEREST-LOAN> 807
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 807
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 452
<INTEREST-INCOME-NET> 355
<LOAN-LOSSES> 100
<SECURITIES-GAINS> 0<F1>
<EXPENSE-OTHER> 250
<INCOME-PRETAX> 183
<INCOME-PRE-EXTRAORDINARY> 183
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 133<F3>
<EPS-PRIMARY> 0<F2>
<EPS-DILUTED> 0<F2>
<YIELD-ACTUAL> 4.44
<LOANS-NON> 264
<LOANS-PAST> 113
<LOANS-TROUBLED> 14
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 229
<CHARGE-OFFS> 159
<RECOVERIES> 55
<ALLOWANCE-CLOSE> 225
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 225

<FN>

<F1> The Company is a finance company whose normal operations do not include the
trading of investment securities.

<F2> Earnings per share information not provided as Heller Financial, Inc. has
only one common shareholder.

<F3> Net income is net of $43 million income tax provision and $7 million of
minority interest in international income.

</FN>

</TABLE>