MERIDIAN FUND
July 20, 1999
To Our Shareholders:
The Meridian Fund's net asset value per share at June 30, 1999 was $26.28. This
represents a total return of 3.05% for the fiscal year ended June 30, 1999 and
8.19% for the calendar year to date. The Fund's total return and average
compound rate of return since inception, August 1, 1984, were 653.80% and
14.51%, respectively. The Fund's ten-year total return and ten-year average
compound rate of return were 297.82% and 14.81%, respectively. The Fund's net
assets at the close of the quarter were invested 10.9% in cash and other assets
less liabilities and 89.1% in stocks. Total net assets were $185,683,505
and there were 6,823 shareholders.
Stocks performed well during the calendar second quarter. Strong economic growth
domestically and a more stable economic landscape throughout most of Asia proved
reassuring to investors. The advance was broad and included smaller and
medium-sized companies. The S&P 500 gained 6.7 percent while the Russell 2000,
after a dismal first quarter, surged 15.1 percent. The best performing sectors,
in addition to the large technology stocks, included classic cyclicals such as
steel, aluminum and construction. The worst performing groups consisted of
cosmetics, consumer services, and savings and loans. Calendar year to date, the
S&P 500 is up 11.67 percent and the Russell 2000 has gained a respectable 8.47
percent.
The Dow Jones Bond Index dropped to 100.81 from 104.07 at the end of March. The
yield on the closely watched 30-year government bond increased from 5.62 percent
to 5.97 percent.
The economy continues to grow at a strong pace. It is estimated that GDP grew at
almost 4 percent during the second quarter. Retail sales, home sales, industrial
production and employment are all strong. Consumer confidence remains near
record levels. The economic recovery throughout Asia is important also. The
primary concerns are inflation and interest rates. Inflation has accelerated
somewhat and interest rates, as pointed out above, have moved higher this year.
The Federal Reserve Board recently raised the federal funds rate one-quarter of
a point to 5 percent, possibly indicating a change in policy. Our outlook is for
a strong economy with modest increases in interest rates and the rate of
inflation during the balance of 1999.
Our investment strategy remains unchanged. The portfolio consists predominately
of small and medium-sized growth stocks that, in our opinion, have excellent
prospects and reasonable valuations. This sector has under-performed the market
for five consecutive years, relative valuations are compelling, and earnings
growth is far superior to that of the S&P 500. Sooner or later, in our opinion,
these positive characteristics will be recognized in the market place.
<PAGE>
New purchases during the quarter included Adtran Inc., Airborne Freight
Corporation, Genesys Telecommunications Laboratories, Inc., and Mentor Graphics
Corporation. Existing positions that were increased included Extended Stay
America, Inc., Province Healthcare Corporation and Wackenhut Corrections
Corporation. We sold American Management Systems, Inc., Heilig-Meyers Company,
Kilroy Realty Corporation, Suburban Lodges of America, Inc. and Superior
Services, Inc.
Zale Corporation, purchased earlier this year, is the largest specialty retailer
of fine jewelry in the U.S., with only 4 percent market share. The company
operates over one thousand stores under three unique brands: Zales, Gordon's,
and Bailey, Banks & Biddle. Zale also sells jewelry through a catalog and the
Internet. Volumes at existing stores continue to grow as the company leverages
its powerful brand names and remodels 100 stores each year. Zale plans to open
70 new stores annually. The current management team took over five years ago.
Their effectiveness is exemplified by Zale's increasing return on equity,
expected to eventually reach 18 percent. The company recently purchased People's
Jewelers of Canada and we expect increased productivity from the acquired
stores. We believe the company can grow earnings 20 percent for the foreseeable
future. The shares sell at a reasonable valuation.
We welcome those new shareholders who joined the Meridian Fund during the
quarter and appreciate the continued confidence of our existing shareholders.
Sincerely,
/s/ RICHARD F. ASTER, JR.
------------------------------------------------
Richard F. Aster, Jr.
2
<PAGE>
MERIDIAN FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------- ------------
<S> <C> <C>
COMMON STOCK - 94.3%
BANKING & FINANCE - 3.0%
Pacific Century Financial Corp.*........................ 255,000 $5,498,438
CONSUMER PRODUCTS - 1.9%
Nu Skin Enterprises, Inc. .............................. 180,000 3,588,750
CONSUMER SERVICES - 3.9%
Regis Corporation*...................................... 173,500 3,329,031
Sotheby's Holdings, Inc. - Class A*..................... 102,000 3,888,750
CORRECTIONAL & DETENTION FACILITIES - 3.2%
Wackenhut Correction Corp. ............................. 299,400 5,931,862
ENERGY - 4.2%
Marine Drilling Companies, Inc. ........................ 275,000 3,764,063
Precision Drilling Corp. ............................... 217,000 4,136,563
HEALTH SERVICES - 4.9%
Beverly Enterprises, Inc. .............................. 400,000 3,225,000
Health Management Associates, Inc. - Class A............ 235,000 2,643,750
Province Healthcare Company............................. 170,000 3,315,000
HOTELS & LODGING - 2.4%
Extended Stay America, Inc. ............................ 365,000 4,380,000
INDUSTRIAL SERVICES - 8.1%
Airborne Freight Corporation*........................... 117,000 3,239,438
Catalina Marketing Corporation.......................... 45,000 4,140,000
Expeditors International of Washington, Inc.*........... 130,000 3,542,500
Paychex, Inc.*.......................................... 127,500 4,064,062
INDUSTRIAL PRODUCTS - 3.4%
Tektronix, Inc.*........................................ 207,550 6,265,416
INSURANCE - 1.2%
Annuity and Life Re (Holdings), Ltd. ................... 102,000 2,288,625
LEISURE & AMUSEMENT - 1.2%
Scientific Games Holdings Corp. ........................ 115,100 2,244,450
REAL ESTATE INVESTMENT TRUSTS - 5.6%
Arden Realty Group, Inc.*............................... 245,500 6,045,437
The Town and Country Trust*............................. 240,000 4,290,000
RESTAURANTS - 9.7%
CBRL Group, Inc.*....................................... 175,000 3,029,688
CEC Entertainment, Inc. ................................ 100,000 4,225,000
Foodmaker, Inc. ........................................ 148,000 4,199,500
P.F. Chang's China Bistro............................... 102,500 2,216,563
Sonic Corporation....................................... 135,000 4,404,375
</TABLE>
The accompanying notes are an integral part of the financial statements
3
<PAGE>
MERIDIAN FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------- ------------
COMMON STOCK (continued)
<S> <C> <C>
RETAIL - 19.9%
Bed, Bath and Beyond, Inc. ............................. 110,000 $4,235,000
Cost Plus, Inc. ........................................ 105,000 4,777,500
Family Dollar Stores, Inc.*............................. 180,000 4,320,000
Kohl's Corporation...................................... 85,000 6,560,936
Mazel Stores, Inc. ..................................... 150,000 1,631,250
PETsMart, Inc. ......................................... 407,650 4,178,412
West Marine, Inc. ...................................... 297,500 4,332,344
Williams-Sonoma, Inc. .................................. 65,000 2,262,812
Zale Corporation........................................ 115,000 4,600,000
TECHNOLOGY - 13.3%
Gartner Group, Inc. .................................... 173,000 3,546,500
KEMET Corporation....................................... 190,000 4,358,125
Mentor Graphics Corp. .................................. 271,500 3,478,594
Molex Inc. - Class A*................................... 140,000 4,410,000
National Data Corp.*.................................... 120,000 5,130,000
Synopsys, Inc. ......................................... 70,000 3,863,125
TELECOMMUNICATIONS/CABLE EQUIPMENT - 6.9%
ANTEC Corporation....................................... 135,000 4,328,438
Adtran, Inc. ........................................... 120,500 4,383,187
Genesys Telecommunications Labs, Inc. .................. 164,900 4,122,500
TRANSPORTATION - 1.5%
Atlantic Coast Airlines Holdings, Inc. ................. 145,000 2,755,000
------------
TOTAL COMMON STOCK
(Identified cost $138,662,625)..................................... 175,169,984
U.S. GOVERNMENT OBLIGATIONS (Identified cost $9,991,898) - 5.4%
U.S. Treasury Bills @ 4.27% due 7/8/99 (par value $10,000,000)..... 9,991,898
------------
TOTAL INVESTMENTS
(Identified cost $148,654,523) - 99.7%............................. 185,161,882
CASH AND OTHER ASSETS LESS LIABILITIES - 0.3%........................ 521,623
------------
NET ASSETS - 100%.................................................... $185,683,505
============
</TABLE>
*income producing
The accompanying notes are an integral part of the financial statements
4
<PAGE>
MERIDIAN FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments (Cost $148,654,523)........................... $185,161,882
Cash and cash equivalents................................. 10,334,878
Receivables for:
Dividends.............................................. 120,347
Interest............................................... 7,663
Capital shares......................................... 15,233
Securities sold........................................ 835,678
Prepaid expenses.......................................... 2,550
------------
TOTAL ASSETS........................................... $196,478,231
------------
LIABILITIES
Payable for:
Capital shares......................................... 10,568,586
Accrued expenses.......................................... 226,140
------------
TOTAL LIABILITIES...................................... 10,794,726
------------
NET ASSETS.................................................. $185,683,505
============
Capital shares issued and outstanding, par value $.01
(25,000,000 shares authorized)............................ 7,065,474
============
Net asset value per share (offering and redemption price)... $26.28
============
Net assets consist of:
Paid in capital........................................... $136,187,492
Accumulated net realized gain............................. 11,919,516
Accumulated net unrealized appreciation on investments.... 36,507,359
Undistributed net investment income....................... 1,069,138
------------
$185,683,505
============
</TABLE>
The accompanying notes are an integral part of the financial statements
5
<PAGE>
MERIDIAN FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends............................................ $1,754,384
Interest............................................. 1,520,627
-----------
Total investment income......................... $3,275,011
-----------
EXPENSES
Investment advisory fees............................. 1,769,180
Transfer agent fees.................................. 179,550
Pricing fees......................................... 63,285
Custodian fees....................................... 50,490
Reports to shareholders.............................. 49,305
Professional fees.................................... 33,895
Miscellaneous expenses............................... 28,942
Registration and filing fees......................... 27,164
Directors' fees and expenses......................... 4,380
-----------
Total expenses.................................. 2,206,191
-----------
Net investment income........................... 1,068,820
-----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gain on investments..................... 11,913,210
Net unrealized depreciation on investments........... (17,968,517)
-----------
Net loss on investments.............................. (6,055,307)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($4,986,487)
===========
</TABLE>
The accompanying notes are an integral part of the financial statements
6
<PAGE>
MERIDIAN FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
OPERATIONS
Net investment income.................................. $1,068,820 $2,577,916
Net realized gain on investments....................... 11,913,210 67,313,691
Net unrealized depreciation on investments............. (17,968,517) (15,072,297)
------------ ------------
Net (decrease) increase from operations.............. (4,986,487) 54,819,310
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income............... (1,187,972) (3,292,042)
Distributions from net realized capital gain........... (54,557,125) (49,775,120)
------------ ------------
Total distributions.................................. (55,745,097) (53,067,162)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales of shares.......................... 11,727,850 25,470,981
Reinvestment of distributions.......................... 53,097,094 50,421,264
Less: redemptions...................................... (115,212,451) (133,870,770)
------------ ------------
Decrease resulting from capital share transactions... (50,387,507) (57,978,525)
------------ ------------
Total decrease in net assets........................... (111,119,091) (56,226,377)
NET ASSETS
Beginning of year...................................... 296,802,596 353,028,973
------------ ------------
End of year (includes undistributed net investment
income of $1,069,138 and $1,188,290, respectively)... $185,683,505 $296,802,596
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
7
<PAGE>
MERIDIAN FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year June 30,
-------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value -- Beginning of
period........................ $33.26 $33.20 $32.21 $27.29 $24.27 $23.87 $18.97
-------- -------- -------- -------- -------- -------- -------
Income from Investment
Operations
- --------------------------
Net Investment Income (loss)... .16 .27 .40 .30 .27 .09 (.01)
Net Gains (Losses) on
Securities (both realized and
unrealized)................... (.50) 4.92 3.71 5.47 3.63 .76 5.51
-------- -------- -------- -------- -------- -------- -------
Total From Investment
Operations.................... (.34) 5.19 4.11 5.77 3.90 .85 5.50
-------- -------- -------- -------- -------- -------- -------
Less Distributions
- -------------
Distributions from net
investment income............. (0.14) (0.32) (0.36) (.31) (.18) (.02) (.04)
Distributions from net realized
capital gains................. (6.50) (4.81) (2.76) (.54) (.70) (.43) (.56)
-------- -------- -------- -------- -------- -------- -------
Total Distributions............ (6.64) (5.13) (3.12) (.85) (.88) (.45) (.60)
-------- -------- -------- -------- -------- -------- -------
Net Asset Value -- End of
Period........................ $26.28 $33.26 $33.20 $32.21 $27.29 $24.27 $23.87
======== ======== ======== ======== ======== ======== =======
Total Return................... 3.05% 16.92% 13.92% 21.40% 16.44% 3.48% 29.50%
======== ======== ======== ======== ======== ======== =======
Ratios/Supplemental Data
- -------------------
Net Assets, End of Period (in
thousands).................... $185,683 $296,803 $353,029 $384,087 $328,153 $199,191 $78,581
Ratio of Expenses to Average
Net Assets.................... 1.01% 0.95% 0.96% 0.96% 1.06% 1.22% 1.47%
Ratio of Net Investment Income
(Loss) to Average Net
Assets........................ 0.49% 0.76% 1.23% 0.99% 1.18% .38% (.01%)
Portfolio Turnover Rate........ 51% 38% 37% 34% 29% 43% 61%
<CAPTION>
For the year June 30,
---------------------------
1992 1991 1990
------- ------- -------
<S> <C> <C> <C>
Net Asset Value -- Beginning of
period........................ $17.24 $17.71 $15.93
------- ------- -------
Income from Investment
Operations
- --------------------------
Net Investment Income (loss)... .07 .20 .06
Net Gains (Losses) on
Securities (both realized and
unrealized)................... 3.45 .49 2.84
------- ------- -------
Total From Investment
Operations.................... 3.52 .69 2.90
------- ------- -------
Less Distributions
- -------------
Distributions from net
investment income............. (.09) (.12) (.48)
Distributions from net realized
capital gains................. (1.70) (1.04) (.64)
------- ------- -------
Total Distributions............ (1.79) (1.16) (1.12)
------- ------- -------
Net Asset Value -- End of
Period........................ $18.97 $17.24 $17.71
======= ======= =======
Total Return................... 21.00% 5.62% 19.71%
======= ======= =======
Ratios/Supplemental Data
- -------------------
Net Assets, End of Period (in
thousands).................... $18,363 $12,350 $11,058
Ratio of Expenses to Average
Net Assets.................... 1.75% 1.68% 2.08%
Ratio of Net Investment Income
(Loss) to Average Net
Assets........................ .24% .98% .14%
Portfolio Turnover Rate........ 61% 85% 66%
</TABLE>
The accompanying notes are an integral part of the financial statements
8
<PAGE>
MERIDIAN FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES: Meridian Fund (the "Fund")
a series of Meridian Fund, Inc. (the "Company"), began operations on August
1, 1984. The Fund was registered on August 1, 1984, under the Investment
Company Act of 1940, as amended, as a no-load, diversified, open-end
management investment company. The primary investment objective of the Fund
is to seek long-term growth of capital. In addition to the Meridian Fund,
the Company also offers the Meridian Value Fund. The following is a summary
of significant accounting policies:
a. INVESTMENT VALUATIONS: Marketable securities are valued at the last
sales price on the principal exchange or market on which they are
traded; or, if there were no sales that day, at the last reported bid
price. Short-term investments that will mature in 60 days or less are
stated at amortized cost, which approximates value.
b. FEDERAL INCOME TAXES: It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders; therefore, no federal income tax provision is required.
The aggregate cost of investments for federal income tax purposes is
$148,654,523, the aggregate gross unrealized appreciation is
$49,671,440, and the aggregate gross unrealized depreciation is
($13,164,081), resulting in net unrealized appreciation of $36,507,359.
c. SECURITY TRANSACTIONS: Security transactions are accounted for on the
date the securities are purchased or sold (trade date). Realized gains
and losses on security transactions are determined on the basis of
specific identification for both financial statement and federal income
tax purposes. Dividend income is recorded on the ex-dividend date.
Interest income and accretion income are accrued daily.
d. CASH AND CASH EQUIVALENTS: All highly liquid investments with an
original maturity of three months or less are considered to be cash
equivalents. Available funds are automatically swept into a Cash Reserve
account which preserves capital with a consistently competitive rate of
return. Earnings are indexed to the Federal Reserve "Fed Funds Rate."
Interest accrues daily and is credited by the third business day of the
following month.
e. EXPENSES: Expenses arising in connection with the Fund are charged
directly to the Fund. Expenses common to both series of Meridian Fund,
Inc. are allocated to each series in proportion to their relative net
assets.
f. USE OF ESTIMATES: The preparation of financial statements requires
management to make estimates and assumptions that affect the reported
amount of assets and liabilities at the date of the financial
statements. Actual amounts could differ from those estimates.
g. DISTRIBUTIONS TO SHAREHOLDERS: The Fund records distributions to its
shareholders on the ex-date. The amount of distributions from net
investment income and net realized capital gains are determined in
accordance with federal income tax regulations which may differ from
generally accepted accounting principles. These "book/tax" differences
are either considered temporary or permanent in nature. To the extent
these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Distributions
which exceed net investment income and net realized capital gains are
reported as dividends in excess of net investment income or
9
<PAGE>
MERIDIAN FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
distributions in excess of net realized capital gains for financial
reporting purposes but not for tax purposes. To the extent they exceed
net investment income and net realized capital gains for tax purposes,
they are reported as distributions of paid-in-capital.
2. RELATED PARTIES: The Fund has entered into a management agreement with Aster
Capital Management, Inc. (the "Investment Advisor"). Certain Officers and/or
Directors of the Fund are also Officers and/or Directors of the Investment
Advisor.
The Investment Advisor receives from the Fund as compensation for its
services an annual fee of 1% of the first $50,000,000 of the Fund's net
assets and 0.75% of the Fund's net assets in excess of $50,000,000. The fee
is paid monthly and calculated based on that month's average net assets.
3. CAPITAL SHARE TRANSACTIONS: The Fund has authorized 25,000,000 common shares
at a par value of $.01 per share. Transactions in capital shares for the
year ended June 30, 1999, and June 30, 1998, were as follows:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Shares sold 466,943 776,646
Shares issued on reinvestment of distributions 2,431,185 1,590,893
---------- ----------
2,898,128 2,367,539
Shares redeemed (4,756,060) (4,078,171)
---------- ----------
Net decrease (1,857,932) (1,710,632)
========== ==========
</TABLE>
4. COMPENSATION OF DIRECTORS AND OFFICERS: Directors and officers of the Fund
who are directors and/or officers of the Investment Advisor receive no
compensation from the Fund. Directors of the Company who are not interested
persons as defined in the Investment Company Act of 1940 receive
compensation in the amount of $1,000 per annum and a $1,000 purchase of
Meridian Fund or Meridian Value Fund shares, plus expenses for each Board of
Directors meeting attended. The aggregate compensation due the unaffiliated
Directors of the Fund as of June 30, 1999, was $4,380.
5. COST OF INVESTMENTS: The cost of investments purchased and the proceeds from
sales of investments, excluding short-term obligations, for the year ended
June 30, 1999, were $94,676,795 and $155,313,729, respectively. The cost of
the U.S. Government securities purchased and the proceeds from sales of such
investments were $118,729,144, and $159,861,872, respectively for the year
ended June 30, 1999.
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders
of Meridian Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Meridian Fund (the "Fund") at June
30, 1999, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as the "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
San Francisco, California
July 26, 1999
11
<PAGE>
MERIDIAN FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This report is submitted for
the information of shareholders of
Meridian Fund, Inc. It is not
authorized for distribution to
prospective investors unless
preceded or accompanied by an
effective prospectus.
-----------------------------------------------------------------
Officers and Directors
RICHARD F. ASTER, JR.
President and Director
MICHAEL S. ERICKSON
HERBERT C. KAY
JAMES B. GLAVIN
MICHAEL STOLPER
Directors
GREGG B. KEELING
Treasurer and Secretary
Custodian
BANK OF NEW YORK
New York, New York
Transfer Agent and Disbursing Agent
FIRST DATA
King of Prussia, Pennsylvania
(800) 446-6662
Counsel
MORRISON & FOERSTER LLP
Washington, D.C.
Auditors
PRICEWATERHOUSECOOPERS LLP
San Francisco, California
ANNUAL REPORT
LOGO
60 E. Sir Francis Drake Blvd.
Wood Island, Suite 306
Larkspur, CA 94939
(415) 461-6237
Telephone (800) 446-6662
JUNE 30, 1999
<PAGE>
