FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-8016
OLD STONE CORPORATION
(Exact name of registrant as specified in its charter)
Rhode Island 05-0341273
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Four Davol Square, Suite 320
Providence, Rhode Island 02903
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (401) 434-4632
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($1.00 par value)
Cumulative Voting Convertible Preferred Stock, Series B
($20.00 Stated Value, $1.00 Par Value)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant to Rule
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 amendments to
this Form 10-K. [X]
On January 29, 1993, the Registrant's Common Stock and Preferred Stock were
delisted from listing on NASDAQ; accordingly, since that date there has been no
established trading market, and no ascertainable market value, for such stock.
See "Business--Background".
As of the close of business on March 25, 1997, 8,246,175 shares of the
Registrant's Common Stock were outstanding.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Exhibit 21
<PAGE>
PART I
ITEM 1. BUSINESS
Background
Old Stone Corporation (the "Corporation") is a general business corporation
incorporated in 1969 under the laws of the State of Rhode Island. The principal
offices of the Corporation are located at 957 Warren Avenue, East Providence,
Rhode Island 02914.
On January 29, 1993, the Office of Thrift Supervision ("OTS") declared Old
Stone Bank, a Federal Savings Bank, a federally chartered stock savings bank
organized under the laws of the United States (the "Bank"), insolvent, and
appointed the Resolution Trust Company ("RTC") as receiver (the "Bank Closing").
The RTC formed a bridge bank, Old Stone Federal Savings Bank (the "Bridge Bank")
which assumed all of the deposit liabilities and substantially all of the other
liabilities of the Bank and acquired substantially all of the assets of the Bank
(including the stock of all of its subsidiaries). Immediately prior to the Bank
Closing, the Bank constituted substantially all of the assets of the
Corporation. Immediately following the Bank Closing, all of the officers of the
Corporation resigned and were hired by the Bridge Bank. A limited slate of new
officers was elected on March 8, 1993. See Item 10 below.
The Corporation continues to hold its equity interest in Old Stone
Securities Company ("Old Stone Securities"). See "Significant Subsidiary" below.
The Corporation has no equity interest in any other significant entity.
Significant Subsidiary
The Corporation's only surviving active subsidiary after the Bank Closing
is Old Stone Securities, a registered securities broker-dealer which provides
brokerage services to retail and institutional clients. In addition, Old Stone
Securities participates in Rhode Island underwritings of tax-exempt securities,
maintains an inventory of tax-exempt securities for resale, and also trades
government securities both at auction and in the secondary market. See
"Regulation" below.
Regulation
Old Stone Securities is subject to regulation by the Securities and
Exchange Commission, the State of Rhode Island, and the National Association of
Securities Dealers, Inc.
Employees
As of December 31, 1996, the Corporation had one part-time employee. As of
such date, Old Stone Securities employed 3 persons, all of whom were full-time,
two of whom also serve as officers of the Corporation, and who handle certain
administrative functions on behalf of the Corporation.
ITEM 2. PROPERTIES
The administrative offices of the Corporation and Old Stone Securities are
located at 957 Warren Avenue, East Providence, Rhode Island. Such offices are
leased on a month-to-month basis at a per month rental of $750.00, which amount
is paid by Old Stone Securities.
ITEM 3. LEGAL PROCEEDINGS
The Corporation is not aware of any pending or threatened legal proceedings
against the Corporation or Old Stone Securities, except as noted in the
counterclaim discussed below.
On January 29, 1993, the OTS declared the Bank insolvent, and appointed the
RTC as receiver. See Item 1 above, "Business--Background".
On September 16, 1992, the Corporation and the Bank ("Plaintiffs")
instituted a suit against the United States ("Defendant") in the U.S. Court of
Federal Claims. In connection with certain government-assisted acquisitions by
Plaintiffs in the 1980's, the Defendant (through its agencies the Federal Home
Loan Bank Board ("FHLBB") and the Federal Savings and Loan Insurance
Corporation) in exchange for the Bank purchasing certain assets and assuming
certain liabilities of Defendant, agreed among other things to provide
Plaintiffs with certain valuable capital credits and authorized Plaintiffs to
treat those credits and supervisory goodwill as regulatory capital to be
amortized over a period of 25 to 30 years on the Bank's financial statements.
Following the passage of the Financial Institutions Reform, Recovery, and
Enforcement Act in August, 1989, the OTS (successor in interest to the FHLBB)
required the Bank to discontinue treating these capital credits and supervisory
goodwill as part of regulatory capital and caused the Bank to write off
immediately approximately $80 million of such capital credits and supervisory
goodwill. In this suit Plaintiffs allege breach of contract by the United
States, resulting in substantial injury to Plaintiffs, effecting a taking of
Plaintiffs' property without just compensation, and unjustly enriching the
Defendant at the expense of Plaintiffs. Plaintiffs seek compensation for the
damages caused by the breach, just compensation for the property taken, and
disgorgement of the amounts by which the Defendant has been unjustly enriched.
The Defendant has filed a counterclaim against the Corporation for alleged
breach of its net worth maintenance agreement. The Corporation has filed an
answer denying such counterclaim. The Corporation's claims are separate and
distinct from the claims of the Bank. An agency of the Defendant serves as
receiver for the Bank and is maintaining the Bank's claims against the
Defendant. There are several similar cases pending before the U.S. Court of
Federal Claims. No prediction as to the outcome of the Corporation's case can be
made at this time.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Until January 29, 1993, the Corporation's Common Stock, $1.00 par value
(the "Common Stock"), was quoted on the NASDAQ National Market and was traded
under the symbol "OSTN". As of the date hereof, there is no established public
trading market for the Common Stock. At March 25, 1996, there were approximately
8,246,175 shares of Common Stock of the Corporation outstanding held by
approximately 40,300 shareholders of record.
The Corporation discontinued dividends to holders of its Common Stock and
its Cumulative Voting Convertible Preferred Stock, Series B (the "Preferred
Stock"), during 1991 and does not expect to pay any dividends on such stock for
the foreseeable future. As a result of the failure to pay dividends on the
Preferred Stock for more than four quarters, the holders of the Preferred Stock
collectively are entitled to elect a number of directors of the Corporation
constituting twenty percent (20%) of the total number of directors of the
Corporation at the next meeting of stockholders at which directors are to be
elected. Until the aggregate deficiency of $13,191,116 as of December 31, 1996
is declared and fully paid on the Preferred Stock, the Corporation may not
declare any dividends or make any other distributions on or redeem the Common
Stock.
ITEM 6. SELECTED FINANCIAL DATA
On January 29, 1993, the OTS declared the Bank insolvent, and appointed the
RTC as receiver. See Item 1 above, "Business--Background". Operations of the
Bank, which accounted for substantially all of the Corporation's operations,
have been reflected as discontinued operations in 1992. Bank operations are not
included in 1994, 1995 or 1996 operations. The Corporation has recognized losses
from discontinued operations of the Bank only to the extent of its investment in
and advances to the former subsidiary savings and loan (determined on a basis
consistent with generally accepted accounting principles). At December 31, 1995
and 1996 the Corporation's statements of financial condition do not include any
assets or liabilities of the Bank. The following schedule of selected financial
information includes the three years ending December 31, 1994, 1995 and 1996.
Old Stone Corporation three year comparison ($ in thousands, except for
share and per share amounts):
Fiscal Year Ended: December 31, December 31, December 31,
1994 1995 1996
INCOME:
Interest income $ 47 $42 $20
Other income 230 229 231
Total income 277 271 251
EXPENSES:
Interest expense 0 0 0
Salaries and benefits 211 166 168
Other operating expenses 420 385 382
Total expense 631 551 544
INCOME:
(loss) from continuing operations
before income taxes $ (354) $ (280) $ (293)
Income taxes (credit) 26 9 6
(loss) from continuing operations (380) (289) (299)
(loss) from discontinued operations
0 182 0
------ -------- ------
NET (LOSS) (380) (471) (299)
Net loss available
to common shareholders $ (3,088) $ (3,179) $(3,007)
Loss per share:
From continuing operations ($.37) ($.36) ($.36)
From discontinued 0 (.02) 0
operations
Net ($.37) ($.38) ($.36)
Average shares outstanding 8,246,175 8,246,175 8,246,175
ASSETS:
Cash $ 32 $ 272 $33
Short-term investments 797 424 401
Loans receivable, net 117 76 56
Other assets 540 293 80
----- --- --
TOTAL $1,486 $ 1,065 $570
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES:
Long-term debt 0 0 0
Other liabilities 1,319 1,369 1,173
Total liabilities 1,319 1,369 1,173
Redeemable preferred stock 19,711 19,908 20,104
Stockholders' equity (deficit) (19,544) (20,212) (20,707)
-------- -------- --------
$1,486 $ 1,065 $570
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
On January 29, 1993, the OTS declared the Bank insolvent, and appointed the
RTC as receiver. See Item 1 above, "Business--Background". Operations of the
Bank, which accounted for substantially all of the Corporation's operations,
have been reflected as discontinued operations in 1992. Bank operations are not
included in 1993, 1994 or 1995 operations. The Corporation has recognized losses
from discontinued operations of the Bank only to the extent of its investment in
and advances to the former subsidiary savings and loan (determined on a basis
consistent with generally accepted accounting principles). At December 31, 1994
and 1995 the Corporation's statements of financial condition do not include any
assets or liabilities of the Bank.
Current Operations
As a result of the Bank Closing, the Corporation's present business
activities include its only surviving significant subsidiary, Old Stone
Securities, a registered securities broker-dealer which provides brokerage
services to retail and institutional clients.
Old Stone Securities' loss before income taxes was $69,064 for the year
ended December 31, 1996, compared to a loss of $67,032 for the year ended
December 31, 1995.
Management has invested, and intends in the future to invest, the
Corporation's assets on a short-term basis. The Corporation's Board of Directors
has instituted various expense saving measures at Old Stone Securities designed
to take effect in 1997.
Since the Bank Closing, and except for the operation of Old Stone
Securities, the Corporation's primary expenses have been legal, insurance,
accounting, and transfer agent expenses. At the end of 1996, the Corporation
terminated its transfer agent relationship with American Stock Transfer & Trust
Company and brought this activity in-house pursuant to software license
agreement with TS Partners, Inc.
Liquidity and Capital Resources
At December 31, 1996, the Corporation had $.6 million in assets, $1.2
million in total liabilities, $20.1 million in redeemable preferred stock, and a
stockholder's deficit of ($20.7) million, compared to $1.1 million in assets,
$1.4 million in total liabilities, $19.9 million in redeemable preferred stock
and stockholders' deficit of ($20.2) million at December 31, 1995.
The Corporation's assets are currently being invested short-term, and
expenses have been reduced to a level that management believes is commensurate
with the Corporation's current activities pending resolution of any potential
claims. See "Current Operations" above.
Results for Year Ended December 31, 1996 Compared to Year Ended December, 31,
1995
The Corporation reported net loss of ($299,000) for the year ended December
31, 1996 compared to a loss of ($471,000) for the year ended December 31, 1995.
Interest income was $20,000 for the year ended December 31, 1996, compared
to $42,000 for the year ended December 31, 1995.
All other income, including securities gains was $231,000 for the year
ended December 31, 1996, compared to $229,000 for the year ended December 31,
1995.
Since the Bank Closing, the Corporation's primary operating expenses have
been legal, insurance and accounting expenses as well as the operating expenses
of Old Stone Securities. Operating expenses (including salaries and benefits and
excluding interest expense) were $544,000 for the year ended December 31, 1996,
compared to $551,000 for the year ended December 31, 1995.
Salaries and benefits for the year ended 1996 were $168,000 compared to
$166,000 for 1995.
The loss from discontinued operations in the amount of ($182,000) for the
year ended December 31, 1995 is a direct result of a settlement between the
Resolution Trust Corporation (the "RTC") and the former directors and officers
of Old Stone Bank. Under the terms of the agreement, the Corporation paid
$100,000 to the RTC as full settlement and released the former directors and
officers of Old Stone Bank from any and all obligations owed Old Stone Bank and
its successors-in-interest. The loss is comprised of the payment to the RTC in
the amount of $100,000 as well as legal expenses of $82,492.
The loss per share from continuing operations was ($.37) for the year ended
December 31, 1996 after the deduction of preferred dividends of $2.7 million.
The loss per share from continuing operations was ($.36) for the year ended
December 31, 1995 after the deduction of preferred dividends of $2.7 million.
The loss per share from discontinued operations was ($.02) for the year ended
December 31, 1995. The total loss per share was $.37 for the year ended December
31, 1996 compared to $.38 for the year ended December 31, 1995. No preferred or
common dividends have been paid since the second quarter of 1991 and the
Corporation does not expect to pay dividends in the foreseeable future. Further,
the Corporation is prohibited from paying dividends on the common stock until
the aggregate deficiency (totaling $13,191,116 as of December 31, 1996) on the
preferred stock dividends is paid in full.
The Corporation has total assets of $.6 million at December 31, 1996,
compared to $1.1 million at December 31, 1995. The reduction in assets from 1995
was primarily due to the funding of the 1996 cash operating losses and the cash
payments made in 1996 resulting from the RTC settlement that was booked in 1995.
Results for Year Ended December 31, 1995 Compared to Year Ended December 31,
1994
The Corporation reported net loss of ($471,000) for the year ended December
31, 1995 compared to a loss of ($380,000) for the year ended December 31, 1994.
Interest income was $42,000 for the year ended December 31, 1995, compared
to $47,000 for the year ended December 31, 1994.
All other income, including securities gains was $229,000 for the year
ended December 31, 1995, compared to $230,000 for the year ended December 31,
1994.
Since the Bank Closing, the Corporation's primary operating expenses have
been legal, insurance and accounting expenses as well as the operating expenses
of Old Stone Securities. Operating expenses (including salaries and benefits and
excluding interest expense) were $551,000 for the year ended December 31, 1995,
compared to $631,000 for the year ended December 31, 1994.
Salaries and benefits for the year ended 1994 were $166,000 compared to
$211,000 for 1994.
The loss from discontinued operations in the amount of ($182,000) for the
year ended December 31, 1995 is a direct result of a settlement between the
Resolution Trust Corporation (the "RTC") and the former directors and officers
of Old Stone Bank. Under the terms of the agreement, the Corporation paid
$100,000 to the RTC as full settlement and released the former directors and
officers of Old Stone Bank from any and all obligations owed Old Stone Bank and
its successors-in-interest. The loss is comprised of the payment to the RTC in
the amount of $100,000 as well as legal expenses of $82,492.
The loss per share from continuing operations was ($.36) for the year ended
December 31, 1995 after the deduction of preferred dividends of $2.7 million.
The loss per share from continuing operations was ($.37) for the year ended
December 31, 1994 after the deduction of preferred dividends of $2.7 million.
The loss per share from discontinued operations was ($.02) for the year ended
December 31, 1995. The total loss per share was ($.38) for the year ended
December 31, 1995 compared to ($.37) for the year ended December 31, 1994. No
preferred or common dividends have been paid since the second quarter of 1991
and the Corporation does not expect to pay dividends in the foreseeable future.
Further, the Corporation is prohibited from paying dividends on the common stock
until the aggregate deficiency on the preferred stock dividends is paid in full.
The Corporation had total assets of $1.1 million at December 31, 1995,
compared to $1.5 million at December 31, 1994. The reduction in assets from 1994
was primarily due to the funding of the 1995 cash operating losses.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Corporation's Consolidated Financial Statements for the year ended
December 31, 1996 is filed as Exhibit 99 to this report.
Lefkowitz, Garfinkel, Champi & DiRienzo P.C. ("LGC&D") has been engaged by
the Corporation to audit the Corporation's financial statements for the year
ended December 31, 1996.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information concerning the directors
of the Corporation. Management is saddened to report that during the year,
Richmond Viall, Jr., a Director of the Corporation from 1974 to 1991 and since
1992, passed away. As a result of Mr. Viall's death and other vacancies on the
Board, on January 28, 1997 the Directors elected Thomas F. Hogg, Winfield W.
Major and James V. Rosati to serve as interim Directors of the Corporation to
serve until the next meeting of shareholders for the purpose of electing
directors. Other than these individuals, there are no persons nominated or
chosen to become directors of the Corporation. (See "Market for the Registrant's
Common Equity and Related Stockholder Matters" for a discussion of the right of
the holders of the Corporation's Preferred Stock to elect 20% of the directors
of the Corporation.)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name Age Principal Occupation Since Expires**
Howard W. Armbrust 69 Chairman of Vargas Manufacturing 1974 1995
Corporation (costume jewelry
manufacturer)
Bernard V. Buonanno, Jr. 59 Partner, Edwards & Angell (law 1979 1994
firm) Partner, Riparian Partners
(investment firm)
Director, A.T. Cross Company
Robert E. DeBlois 63 Chairman of DB Companies, Inc. 1974 1995
and its subsidiaries (gasoline
and convenience store chain)
Thomas P. Dimeo 66 Chairman, The Dimeo Group of 1974 1995
Companies (construction industry)
Thomas F. Hogg * 49 Chief Financial Officer, R.I. 1997 ----
Housing & Mortgage Finance
Corporation (state chartered
housing finance agency)
Allen H. Howland 76 Chairman, Original Bradford Soap 1992*** 1994
Works, Inc. (manufacturer of
private label soaps)
Beverly E. Ledbetter 53 Vice President and General 1981 1995
Counsel, Brown University
Winfield W. Major * 49 Counsel, Edwards & Angell (law 1997 ----
firm)
James V. Rosati * 47 Chief Executive Officer, 1997 ---
Telecommunications Sector,
Plastics Division, Cookson Group
plc, Senior Vice President,
Cookson America, Inc.
(industrial manufacturing
company)
Alfred J. Verrecchia 54 President, Global Operations and 1987 1993
Director, Hasbro, Inc. (toy
manufacturer)
* Elected to serve as interim directors until the next meeting of shareholders.
** The Directors serve until the end of their term or until such time as a successor
is elected. No election of Directors has been held since 1992.
*** Also served as a Director from 1981 to 1991.
</TABLE>
With respect to information regarding executive officers of the
Corporation, immediately following the Bank Closing, all of the executive
officers of the Corporation resigned and were hired by the Bridge Bank. A
limited slate of new officers was elected by the Board of Directors on March 8,
1993, none of whom would be considered executive officers of the Corporation
under the Rules.
ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation
The Act and the Rules require disclosure of certain information on
Executive Compensation with respect to the Corporation and its subsidiaries for
the year ended December 31, 1996. Immediately following the Bank Closing, all of
the executive officers of the Corporation resigned and were hired by the Bridge
Bank and a limited slate of new officers was elected on March 8, 1993. None of
the new slate of officers elected on March 8, 1993 would be considered executive
officers of the Corporation under the Rules.
Meetings and Compensation of Board of Directors
For the fiscal year ended December 31, 1996, Directors received no
compensation for serving on the Board or attending committee meetings.
The Stock Purchase Plan of Old Stone Corporation for Employees and
Directors was originally approved by the shareholders of the Corporation on
April 29, 1988, and amended by the Directors of the Corporation on December 28,
1988 ("Stock Purchase Plan"). Under the Stock Purchase Plan, Directors and
employees were permitted to purchase Common Stock through payroll deductions. As
of the date of the Bank Closing, all participation in the Stock Purchase Plan
was discontinued.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Stockholders of the Corporation
The following table sets forth information as to the only persons known to
the Corporation to be beneficial owners of more than five percent (5%) of any
class of outstanding voting securities of the Corporation.
Amount and Nature of Beneficial Ownership of Common Stock (1)
Sole Shared Sole Shared Percent
Voting Voting Dispositive Dispositive of Class(2)
Power Power Power Power
Old Stone Employee
Stock Ownership Plan 0 0 0 2,065,175(3) 25.04
150 South Main Street
Providence, RI 02903
(1) This information with respect to beneficial ownership is based upon
information obtained by the Corporation as of December 31, 1994 from the
RTC as Trustee of the ESOP.
(2) This percentage is calculated assuming that no outstanding options are
exercised.
(3) Employees have sole voting power over all shares of Common Stock which have
been allocated to their accounts. Prior to December 31, 1991, shares of
Common Stock purchased by the ESOP with borrowed funds were allocated to
employees' accounts only as and to the extent that the ESOP's debt was
amortized. Unallocated shares were held in a suspense account and, in
accordance with the Ninth Amendment to the ESOP adopted on September 27,
1988, were at all times voted in the same proportion as allocated shares.
The borrowings were paid in full during 1991, and as a result, 465,524.747
unallocated shares were allocated to employees' accounts, 826,000
unallocated shares were returned to the Corporation and 17,596.813 shares
were held in a suspense account until July 6, 1992, at which time such
shares were sold to pay Plan expenses. The Ninth Amendment also provides
pass-through tender offer rights to Plan participants with respect to all
allocated ESOP shares. The Trustee has sole dispositive power with respect
to all ESOP shares in all circumstances other than a tender or exchange
offer.
Security Ownership of Directors
The following table sets forth information furnished to the Corporation by
all present Directors regarding amounts of Common Stock of the Corporation owned
by them on December 31, 1996. Only Mr. Rosati, who owns 2,500 shares directly,
owns any shares of Preferred Stock. Except as noted, all such persons possess
sole voting and investment power with respect to the securities listed below. An
asterisk in the column listing the percentage of securities beneficially owned
indicates the person owns less than one percent.
Name of Individual or Identity
of and Number of Person in Group Number of Shares Percent of Class
- -------------------------------- ---------------- ----------------
Howard W. Armbrust 2,000 *
Bernard V. Buonanno, Jr. 4,613 *
Robert E. DeBlois 4,742 *
Thomas P. Dimeo 11,000 (1) *
Thomas F. Hogg 6,204 *
Allen H. Howland 2,557 (2) *
Beverly E. Ledbetter 333 *
Winfield W. Major 7476.6258 *
James V. Rosati 22,550(3) *
Alfred J. Verrecchia 1,526 *
All current Directors of the Corporation
as a group (10 persons)
TOTAL of the Above Shares 63,001.6258 (4) *
- --------------------
(1) Excludes 1,000 shares owned by Mr. Dimeo's spouse, as to which he disclaims
beneficial ownership. Includes 1,000 shares owned indirectly by Mr. Dimeo
in the Dimeo Construction Company Profit Sharing Plan.
(2) Excludes 100 shares owned by Mr. Howland's spouse, as to which he disclaims
beneficial ownership.
(3) This number represents 20,550 shares owned directly and an estimated 2,000
shares purchased through the Employee Stock Purchase Plan (the "Plan").
Since the Bank Closing, the Corporation has not had access to the records
regarding the stock purchased by employees pursuant to the Plan which was
administered by the Bank. The number listed above includes Mr. Rosati's
best estimate as to the number of shares he purchased through the Plan.
(4) Includes shares held jointly, or in other capacities, as to which, in some
cases, beneficial ownership is disclaimed.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Interests of Directors, Officers and Others in Certain Transactions
Mr. Buonanno is a partner of Edwards & Angell, a law firm retained by the
Corporation on various legal matters. The dollar amount of fees paid to Edwards
& Angell during 1996 did not exceed 5% of Edwards & Angell's gross revenues for
1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. and 2. List of Financial Statements and Financial Statement
Schedules
(1) The following consolidated financial statements and report
of independent accountants of the Corporation and
subsidiaries are filed as Exhibit 99 to this report.
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Operations - Years ended December
31, 1996, 1995 and 1994
Consolidated Statements of Changes in Stockholders' Equity
(Deficit) - Years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flow - Years ended December
31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Independent Auditors' Report
Letter from Management regarding 1992 consolidated financial
statements
(2) Schedules to the consolidated financial statements required
by Article 9 of Regulation S-X are not required under the
related instructions or are inapplicable and therefore have
been omitted.
(3) List of Exhibits -- See Item 14(c) below.
(b) Reports on Form 8-K
None
(c) Exhibit Index.
Exhibit Page
(21) Subsidiaries of the Registrant (Exhibit 21 to the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996 is hereby incorporated by reference
herein.)
(99) Consolidated Financial Statements
(d) All other financial statement schedules required by
Regulation S-X promulgated by the Securities and Exchange
Commission are not required under the related instructions
or are inapplicable, and therefore have been omitted.
<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.
OLD STONE CORPORATION
(Registrant)
March 25, 1997 By:/s/ Geraldine Nelson
-----------------------
Geraldine Nelson
President
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 on March 25, 1997.
/s/ Geraldine Nelson President and Treasurer
Geraldine Nelson
- --------------------------
/s/ Howard W. Armbrust Director
- --------------------------
Howard W. Armbrust
/s/ Bernard V. Buonanno, Jr. Director
- --------------------------
Bernard V. Buonanno, Jr.
/s/ Robert E. DeBlois Director
- --------------------------
Robert E. DeBlois
/s/ Thomas P. Dimeo Director
- --------------------------
Thomas P. Dimeo
/s/ Thomas F. Hogg Director
- --------------------------
Thomas F. Hogg
/s/ Allen H. Howland Director
- --------------------------
Allen H. Howland
/s/ Beverly E. Ledbetter Director
- --------------------------
Beverly E. Ledbetter
/s/ Winfield W. Major Director
- --------------------------
Winfield W. Major
/s/ James V. Rosati Director
- --------------------------
James V. Rosati
/s/ Alfred J. Verrecchia Director
- --------------------------
Alfred J. Verrecchia
<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.
OLD STONE CORPORATION
(Registrant)
March , 1997 By:_______________________
Geraldine Nelson
President
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 on March , 1997.
President and Treasurer
- --------------------------
Geraldine Nelson
Director
- --------------------------
Howard W. Armbrust
Director
- --------------------------
Bernard V. Buonanno, Jr.
Director
- --------------------------
Robert E. DeBlois
Director
- --------------------------
Thomas P. Dimeo
Director
- --------------------------
Thomas F. Hogg
Director
- --------------------------
Allen H. Howland
Director
- --------------------------
Beverly E. Ledbetter
Director
- --------------------------
Winfield W. Major
Director
- --------------------------
James V. Rosati
Director
- --------------------------
Alfred J. Verrecchia
EXHIBIT 21
SUBSIDIARIES OF OLD STONE CORPORATION
Old Stone Securities Company is the Company's only significant subsidiary.
EXHIBIT 99
OLD STONE CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1996, 1995, AND 1994
[SEE ATTACHED STATEMENTS]
<TABLE> <S> <C>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 33,000
<RECEIVABLES> 56,000
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 401,000
<PP&E> 9,600
<TOTAL-ASSETS> 570,000
<SHORT-TERM> 0
<PAYABLES> 1,173,000
<REPOS-SOLD> 0
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 0
<LONG-TERM> 0
0
20,104,000
<COMMON> 8,300,000
<OTHER-SE> (20,707,000)
<TOTAL-LIABILITY-AND-EQUITY> 570,000
<TRADING-REVENUE> 50,000
<INTEREST-DIVIDENDS> 20,000
<COMMISSIONS> 165,000
<INVESTMENT-BANKING-REVENUES> 0
<FEE-REVENUE> 0
<INTEREST-EXPENSE> 0
<COMPENSATION> 168,000
<INCOME-PRETAX> (299,000)
<INCOME-PRE-EXTRAORDINARY> (299,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (299,000)
<EPS-PRIMARY> (.36)
<EPS-DILUTED> (.36)
</TABLE>
