TOTAL AGGREGATE
NUMBER OF PAGES:_27_
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended: June 30, 1995
Commission File Number: 0-12985
DELAWARE OTSEGO CORPORATION
---------------------------------------------------------------------
NEW YORK 16-0913491
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 Railroad Avenue, Cooperstown, New York 13326
---------------------------------------------------------------------
(Address of principal executive offices)
(607) 547-2555
---------------------------------------------------------------------
(Registrant's telephone number, including area code)
No Change
---------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed
from last report.)
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $ .125 Par Value 1,536,880
------------------------------ -----------------------------
(Title of Class) Outstanding at June 30, 1995
INDEX
-----
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
--------------------------------------------
Page
----
PART 1. FINANCIAL INFORMATION
-------------------------------
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - 3
June 30, 1995 and December 31, 1994
Condensed Consolidated Statements of 5
Income - Three months ended June 30, 1995
and June 30, 1994; Six months ended
June 30, 1995 and June 30, 1994
Condensed Consolidated Statement of 6
Cash Flows - Six months ended June 30,
1995 and June 30, 1994
Notes to Condensed Consolidated 7
Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis 8
of Financial Condition and Results
of Operations
PART II. OTHER INFORMATION 11
----------------------------
SIGNATURES 15
----------
2
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
-----------------------------------------------------------------------------
<CAPTION>
ASSETS
June 30, 1995 December 31, 1994
(Unaudited)
----------------- -----------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 1,427 $ 1,308
Accounts receivable 6,179 6,085
Reimbursable construction costs 392 1,106
Materials and supplies 760 587
Deferred income taxes 317 317
Prepaid expenses 1,034 179
Other current assets 405 288
----------------- -----------------
Total Current Assets 10,514 9,870
Property, Plant, and Equipment 89,913 84,185
Less: Accumulated depreciation and amortization (27,320) (25,961)
----------------- -----------------
Total Property, Plant, and Equipment-Net 62,593 58,224
Other Assets 1,234 783
----------------- -----------------
Total Assets $ 74,341 $ 68,877
================= =================
The accompanying notes are an integral part of the financial statements.
</TABLE>
3
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONDOLIDATED BALANCE SHEETS
(Dollars in Thousands)
-----------------------------------------------------------------------------
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, 1995 December 31, 1994
(Unaudited)
----------------- -----------------
<S> <C> <C>
Current Liabilities
Notes payable $ 0 $ 3,400
Accounts payable 10,791 10,018
Accrued and other current liabilities 2,742 2,481
Current maturities of long-term debt 935 1,120
----------------- -----------------
Total current liabilities 14,468 17,019
Long-Term Liabilities
Long-term debt less current maturities 13,146 10,066
Deferred income tax 10,367 8,582
Deferred revenue and other liabilities 0 119
Subordinated Notes
Convertible Subordinated Notes 3,580 3,580
----------------- -----------------
Total Long-Term Liabilities 27,093 22,347
Stockholders' Equity
Common stock and paid-in-capital 3,470 3,470
Contributed capital 17,763 16,687
Retained earnings 11,547 9,354
----------------- -----------------
Total Stockholders' Equity 32,780 29,511
----------------- -----------------
Total Liabilities and
Stockholders' Equity $ 74,341 $ 68,877
================= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
<TABLE>
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands Except Per Share Data)
-----------------------------------------------------------------------------
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------- ----------------------
6/30/95 6/30/94 6/30/95 6/30/94
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating Revenues
Railway operating revenue $ 8,383 $ 5,520 $ 15,596 $ 10,064
Other operating revenue 559 521 1,200 957
---------- ---------- ---------- ----------
Total Operating Revenues 8,942 6,041 16,796 11,021
Operating Expenses
Maintenance, transportation,
and car hire 7,078 4,599 13,389 8,820
Depreciation & amortization 1,033 977 2,047 1,959
General, administrative, and other 1,535 1,164 2,664 2,272
---------- ---------- ---------- ----------
Total Operating Expenses 9,646 6,740 18,100 13,051
---------- ---------- ---------- ----------
Income (Loss) from Operations (704) (699) (1,304) (2,030)
Other Income and (Expense)
Interest expense, net (316) (287) (636) (559)
Gain on sale of property,
equipment and other 5,183 21 5,223 18
---------- ---------- ---------- ----------
Other Income (Expense), Net 4,867 (266) 4,587 (541)
Income (Loss) Before Income Taxes
and Extraordinary Item 4,163 (965) 3,283 (2,571)
Provision For Income Tax
(Expense) Benefit (1,354) 364 (1,083) 873
---------- ---------- ---------- ----------
Income (Loss) Before
Extraordinary Item 2,809 (601) 2,200 (1,698)
Extraordinary Item Net of Tax 0 (228) 0 (228)
---------- ---------- ---------- ----------
Net Income (Loss) $ 2,809 $ (829) $ 2,200 $ (1,926)
========== ========== ========== ==========
Primary Earnings (Loss) Per Share (Note 4):
Income Before Extraordinary Item $ 1.83 $ (0.39) $ 1.43 $ (1.10)
Extraordinary Item $ 0 $ (0.15) $ 0 $ (0.15)
---------- ---------- ---------- ----------
Net Income (Loss) $ 1.83 $ (0.54) $ 1.43 $ (1.25)
========== ========== ========== ==========
Fully Diluted Earnings (Loss) Per Share (Note 4):
Income Before Extraordinary Item $ 1.76 $ (0.39) $ 1.34 $ (1.10)
Extraordinary Item $ 0 $ (0.15) $ 0 $ (0.15)
---------- ---------- ---------- ----------
Net Income (Loss) $ 1.76 $ (0.54) $ 1.34 $ (1.25)
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDING JUNE 30, 1995 AND 1994
(Unaudited)
(Dollars in Thousands)
-----------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
--------------------------------
Jun 30, 1995 Jun 30, 1994
--------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) $ 2,200 $ (1,926)
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Depreciation and amortization 2,047 1,959
Provision for losses on accounts receivable (10) 13
Provision for deferred income taxes 1,011 (979)
Gain on sale of fixed assets (5,226) (5)
Amortization of deferred income (127) (4)
Write-off of loan origination fees 0 334
Changes in operating assets and liabilities:
(Increase) in accounts receivable (84) (1,227)
(Increase) decrease in materials and supplies,
prepaids and other current assets (432) 1,221
Increase in accounts payable and accrued expenses 1,188 1,182
(Increase) in other assets (31) (33)
--------------- ---------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 536 535
INVESTING ACTIVITIES
Additions to property, plant and equipment (7,411) (3,409)
Contributed capital 1,633 2,818
Acquisition of intangible assets (36) (237)
Proceeds from sale of assets 6,315 16
--------------- ---------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 501 (812)
FINANCING ACTIVITIES
(Decrease) increase in notes payable (3,400) 1,585
Proceeds from long-term borrowings 4,444 5,564
Principal payments on long-term debt (1,549) (6,529)
(Payments) proceeds from other borrowings (406) 406
Dividends paid (7) (6)
--------------- ---------------
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES (918) 1,020
INCREASE IN CASH AND CASH EQUIVALENTS 119 743
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,308 810
--------------- ---------------
CASH AND CASH EQUIVALENTS AT JUNE 30 $ 1,427 $ 1,553
=============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
DELAWARE OTSEGO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included.
2. The results of operations for the three and six month periods
ended June 30, 1995, are not necessarily indicative of the
results to be expected for the year ended December 31, 1995,
due to certain freight revenues subject to seasonal
variations. For further information, refer to the
consolidated financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the
year ended December 31, 1994.
3. Certain amounts in the 1994 financials have been reclassified
to conform to the 1995 presentation.
4. Earnings per common share have been adjusted retroactively to
reflect a 5% stock dividend declared January 12, 1995.
Primary earnings per share were computed based on the weighted
average number of shares of common stock outstanding during
the periods. Fully diluted earnings per share were computed
based on the assumption that the convertible subordinated
notes were converted on January 1, 1995.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (THOUSANDS)
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents at June 30, 1995, totaled
$1,427. Cash generated from operations, sales of property, additional
debt and contributed capital are the Company's principal sources of
liquidity and are used primarily for capital expenditures, debt service,
and working capital requirements.
At June 30, 1995, the Company's working capital deficit was $3,954,
compared to $7,149 at December 31, 1994, resulting in a working capital
ratio of 72.7% compared to 58.0% at December 31, 1994. Total long-term
liabilities at June 30, 1995 were $27,093. Long-term debt (exclusive of
current maturities) including convertible subordinated notes, as a
percentage of equity at June 30, 1995, was 51.0% compared to 46.2% at
December 31, 1994, and total capitalization (long-term debt, convertible
subordinated notes and equity) was $49,506 compared to $43,157 at
December 31, 1994.
On May 15, 1995, the Company sold an 8.8 mile long railroad line,
abandoned since 1992, located in Union County, New Jersey to the State
of New Jersey for $6.4 million. The transaction resulted in gain of
approximately $5.2 million. The Company intends to treat the
transaction as an involuntary conversion for income tax purposes,
resulting in favorable tax treatment. A portion of the proceeds was
used to partially pay down debt, pay bonuses to employee's who were
affected by the Company's wage freeze, and improve working capital.
At June 30, 1995, the Company had no principal balance outstanding on
its $5 million accounts receivable line of credit with Manufacturers and
Traders Trust Company. At June 30, 1995, the Company had $4,010
available to draw from the line of credit based upon eligible accounts
receivable pledged under the line of credit. The interest rate is 1%
over Prime. Prime at June 30, 1995 was 9%.
The Company may borrow up to $400 from an equipment line of credit with
Key Bank of New York. At June 30, 1995, the Company had drawn down $240
on the line. The interest rate is the lender's base rate plus three
quarters percent (3/4%). The line of credit expires on April 30, 1996.
In the six month period ended June 30, 1995, additions to property,
plant and equipment were $7,411 of which $1,633 or 22.0% was funded by
grants from the New York and New Jersey Departments of Transportation.
The balance was provided from operations and additional long-term debt.
During the quarter, the Company took delivery on three (3) new General
Motors, 4,000 horsepower, 6-axle, SD-70 locomotives at a total cost of
approximately $4.2 million. The purchase was wholly financed by a loan
from the Federal Financing Bank at a rate of 6.4% over twenty years.
The Company has entered into tentative agreements, together with other
investors, including two non-officer directors of the Company, to
acquire the Toledo, Peoria & Western Railway ("TP&W"). Pursuant to the
agreements, which are subject to several contingencies, including
financing, Board of Directors and lender approvals, the Company will
acquire 40% of the TP&W for cash and stock valued at $2.25 million,
including the issuance of 100,000 shares of its common stock to one of
the other non-director investors. To date, the Company has not obtained
satisfactory financing for the transaction. Subject to obtaining
8
<PAGE>
financing and the satisfaction of several other contingencies, the
transaction is expected to occur in the fourth quarter of 1995.
It is anticipated that funding for the Company's capital program for the
balance of 1995 will be met by grants from participating state
governments, cash generated by operations, available funds from the
lines of credit, and proceeds from the sales of non-operating assets.
The Company believes it has adequate working capital to fund existing
and anticipated operations for at least the next twelve months.
RESULTS OF OPERATIONS
Railway operating revenues, consisting of intermodal, carload and other
railway operating revenues, improved $2,863 and $5,532 for the three and
six month periods ended June 30, 1995, respectively, compared to the
same periods in 1994. For the three and six month periods ended June
30, 1995, intermodal revenue, the largest component of railway operating
revenue, increased $2,599 and $5,116 respectively, compared to the same
periods in 1994, due principally to additional containerized traffic
being transported to the CSX Intermodal, Inc. facility in New Jersey.
Carload revenues for the three and six month periods ended June 30,
1995, improved $166 and $326 respectively, compared to the same periods
in 1994, due mostly to improved volumes in certain market groups offset
by declines in others.
Other railway operating revenues for the three and six month periods
ended June 30, 1995, increased $98 and $90 respectively, compared to the
same periods in 1994, due mostly to improved passenger revenues from
shuttle and scenic excursion activity in the second quarter.
Other operating revenues for the three and six month periods ended June
30, 1995, increased $38 and $243 respectively, compared to the same
periods in 1994, due mainly to greater construction and rental income.
Maintenance, transportation and car hire expenses in the aggregate for
the three and six month periods ended June 30, 1995 increased $2,479 and
$4,569 respectively, compared to the same periods in 1994.
In the three and six month periods of 1995, expenses for maintenance of
way and other equipment increased by $46 and $82 respectively, compared
to the 1994 periods, due mostly to additional expenses for compensation
and benefits, and materials and supplies. Trackage rights expenses for
the three and six month periods of 1995 increased $277 and $562
respectively, compared to the 1994 periods, due mostly to increased
intermodal traffic. Maintenance of locomotives for the three and six
month periods of 1995 increased $154 and $306 respectively, compared to
the 1994 periods, as a result of increased locomotive usage and costs
incurred to improve locomotive reliability in order to meet the service
standards required for the intermodal business.
Transportation expenses for the three and six month periods ended June
30, 1995 increased $1,869 and $3,374 respectively, compared to the same
periods in 1994. Included in these expenses are the following increases
principally resulting from the intermodal traffic: $209 and $336 for
diesel fuel; $276 and $411 for compensation and benefits; $107 and $124
for leasing of locomotives; $949 and $2,115 for haulage and terminal
operations. Increased activity for the Company's passenger shuttle and
scenic excursions resulted in $250 and $322 of additional expenses
during the periods.
9
<PAGE>
Car hire expenses for the three and six month periods ended June 30,
1995 were up $132 and $245 respectively, compared to the 1994 periods,
due principally to greater carload volumes in which car hire expense
reclaim is not available and to car hire expenses for the new domestic
intermodal service which began on August 1, 1994.
Depreciation and amortization expenses for the three and six month
periods ended June 30, 1995 increased $56 and $88 respectively, compared
to the 1994 periods, due principally to additional capital expenditures.
General, administrative, and other expenses for the three and six month
periods ended June 30, 1995 increased $371 and $392 respectively,
compared to the 1994 periods, due principally to additional compensation
and benefit costs associated with the bonus paid during the quarter.
As a result of the foregoing, the operating ratios for the three and six
month periods ended June 30, 1995 were 107.9% and 107.8% respectively,
compared to 111.6% and 118.4% for the comparable 1994 periods.
Excluding the non-recurring bonus charge of $563, the operating ratios
for the three and six month periods in 1995 would have been 101.5% and
104.4% respectively.
Interest expense net, comprised of interest expense (net of capitalized
interest) and interest income for the three and six month periods ended
June 30, 1995 increased $29 and $77 respectively, compared to the 1994
periods. In the three and six month periods of 1995, total interest
expense was $360 and $721 respectively, compared to $322 and $614 in the
respective 1994 periods, due principally to interest rate and average
outstanding debt differentials.
Gain on sale of property, equipment and other for the three and six
month periods, ended June 30, 1995 increased approximately $5.2 million
compared to the 1994 periods, due principally to the sale of an 8.8 mile
railroad line located in Union County, New Jersey to the State of New
Jersey for $6.4 million. The Company intends to treat the transaction
as an involuntary conversion for income tax purposes, resulting in
favorable tax treatment.
The Company's effective income tax rate on income before income taxes
for the six month period ended June 30, 1995 and 1994 was 33.0% and
34.0% respectively.
During the six month period ended June 30, 1994, the Company completed
its financing with Manufacturers and Traders Trust Company. In
conjunction with this financing, the Company wrote-off $334,
representing the unamortized balance of deferred financing costs
incurred in 1990 pursuant to the Chemical Bank loan. The write-off was
recorded as an extraordinary item in the statement of income, net of
applicable income taxes of $106.
10
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
---------------------------
None.
Item 2. Changes in Rights of Security Holders
-----------------------------------------------
None.
Item 3. Defaults on Senior Securities
---------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
-------------------------------------------------------------
At the Annual Meeting of Shareholders held in Cooperstown, New York
on June 3, 1995, at which 1,245,859 shares, or 81% of the shares outstanding,
were present in person or by proxy, the nominees listed in the Registrant's
Proxy Statement were elected and other actions taken as follows:
For Against Abstain
--------- --------- ---------
1. Election of Directors
Robert L. Marcalus 1,243,309 2,550 -
Everett A. Gilmour 1,243,175 2,684 -
Albert B. Aftoora 1,243,197 2,662 -
2. Ratification of
Appointment of
Independent Accountants 1,243,194 1,650 1,015
Item 5. Other Information
---------------------------
None.
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
------------------------------------------
a) Exhibits:
Filed herewith (-) or
Incorporated by Reference
to
-------------------------
3.1 Restated Certificate of Exhibit 3.1 to Regis-
Incorporation of the trant's Annual Report on
Delaware Otsego Corporation Form 10-K dated December
dated June 1, 1991 31, 1991
3.2 By-Laws of DOC dated April 5, Exhibit 3.8 to Regis-
1988 trant's Annual Report on
Form 10-K dated December
31, 1988
10.1 Employment Agreement between -
DOC and Walter Rich dated
June 3, 1995
10.2 Direct Loan Agreement between Exhibit 10(g) to Registra-
New Jersey Economic Develop- tion Statement on Form
ment Authority and NYS&W S-1, No. 2-94319
dated August 6, 1982
10.3 Agreement between Conrail Exhibit 10(p) to Registra-
and NYS&W dated March 30, tion Statement on Form
1982 relating to trackage S-1, No. 2-94319
rights over line of Conrail
from Binghamton, New York to
Warwick, New York via
Campbell Hall and Maybrook,
New York
10.4 Financing Agreement between Exhibit 19.11 to Form 10-Q
NYS&W and FRA dated dated November 13, 1986
September 30, 1985
10.5 Agreement Amending Financing Exhibit 19.12 to Form 10-Q
Agreement between FRA and dated November 13, 1986
NYS&W dated July 30, 1986
10.6 Amendment to Direct Loan Exhibit 19.18 to Form 10-Q
Agreement between New Jersey dated November 13, 1986
Economic Development
Authority and NYS&W dated
July 15, 1986
10.7 Amendment to Direct Loan Exhibit 19.19 to Form 10-Q
Agreement between New Jersey dated November 13, 1986
Economic Development
Authority and NYS&W dated
September 2, 1986
12
<PAGE>
10.8 Amended and Restated Credit Exhibit 10.8 to Form 10-Q
Agreement between Manufac- dated November 11, 1994
turers and Traders Trust
Company and DOC dated
May 27, 1994
10.9 Agreement between NYS&W and Exhibit 10.9 to Regis-
Brotherhood of Locomotive En- trant's Annual Report on
gineers dated March 30, 1994 Form 10-K dated March 27,
1995
10.11 Modification to Direct Loan Exhibit 10(hh) to Regis-
Agreement and Direct Loan tration Statement on Form
Promissory Note dated as of S-1, No. 2-94319
August 6, 1982 between the
New Jersey Economic Develop-
ment Authority and NYS&W
dated July 17, 1984
10.15 Transportation Agreement Exhibit 10.15 to Regis-
between NYS&W and CSX/ trant's Form 8-K dated
Sea-Land Intermodal, Inc. May 20, 1992
dated December 30, 1989
10.22 Delaware Otsego Corporation Exhibit B to Definitive
1987 Stock Option Plan Proxy Statement Dated
October 7, 1987
10.23 Delaware Otsego Corporation Exhibit B to Definitive
1993 Stock Option Plan Proxy Statement Dated
May 5, 1993
10.25 Employment Agreement between -
DOC and C. David Soule dated
June 3, 1995
10.26 Employment Agreement between Exhibit 10.30 to Regis-
DOC and William B. Blatter trant's Quarterly Report
dated June 4, 1994 on Form 10-Q dated June
30, 1994
10.27 Form of Delaware Otsego Exhibit 1 to Registrant's
Corporation 6.5% Convertible Form 8-K dated October 19,
Subordinated Note Due on 1993
September 1, 2003
10.28 Guarantee Commitment between Exhibit 10.28 to Regis-
the Federal Railroad trant's Annual Report on
Administration and DOC Form 10-K dated March 27,
dated September 29, 1994 1995
21 Subsidiaries of Registrant Exhibit 21 to Registrant's
Annual Report on Form 10-K
dated March 27, 1995
13
<PAGE>
b) Reports on Form 8-K:
1. By Current Report on Form 8-K dated May 2, 1995, Registrant
filed a press release which reported that Registrant has
entered into tentative agreements, with other investors, to
acquire the Toledo, Peoria & Western Railway.
2. By Current Report on Form 8-K dated May 12, 1995, Registrant
reported the completion of the sale of substantially all of
the assets of its Rahway Valley Railroad Company subsidiary.
14
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DELAWARE OTSEGO CORPORATION
(Registrant)
Date: August 14, 1995
WALTER G. RICH
------------------------------
Walter G. Rich
President and
Chief Executive Officer
WILLIAM B. BLATTER
------------------------------
William B. Blatter
Senior Vice President &
Chief Financial Officer
15
EMPLOYMENT AGREEMENT
____________________
AGREEMENT made this 3rd day of June, 1995, by and between DELAWARE
OTSEGO CORPORATION, a New York corporation, with its principal
office and place of business at 1 Railroad Avenue, Cooperstown, New
York 13326 (hereinafter called "Employer") and WALTER G. RICH, an
individual, residing at 122 Main Street, Franklin, NY 13775
(hereinafter called "Employee").
W I T N E S S E T H :
WHEREAS, Employee currently serves as President, Chief
Executive Officer and Director of Employer; and
WHEREAS, Employer acknowledges and recognizes the value of
Employee's services and deems it necessary and desirable to retain
Employee's full-time services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms
and conditions of Employee's employment in a written agreement
which will supersede all prior agreements of employment, whether
written or oral; and
WHEREAS, the employment, the duration thereof, the
compensation to be paid to Employee, and the other terms and
provisions of this Agreement were duly approved by action of
Employer's Board of Directors at a meeting held on the 3rd day of
June, 1995.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM:
Employer does hereby employ Employee as its President and
Chief Executive Officer for an initial term of five (5) years
commencing on the date hereof. The Employer shall have the option
to renew this Agreement and extend Employee's employment upon the
same terms and provisions as are contained herein except as to
compensation for an additional period of five (5) years. The
minimum compensation to be paid to Employee during such renewal
term shall be an amount mutually agreeable to the Employer and
Employee. The Employer shall give to Employee written notice of
its election to renew this Agreement at least six (6) months prior
to expiration of the initial term.
SECOND: COMPENSATION:
Employer shall pay to Employee for services to be rendered
hereunder compensation at a minimum rate of $187,000.00 per annum
during the initial term hereof, payable in weekly installments or
on such other basis as may be agreed upon. Employee's compensation
16
<PAGE>
shall be reviewed from time to time by the Board of Directors of
Employer or an appropriate committee thereof, after which such
compensation may be increased in such amount as may be determined
by such Board or committee, as the case may be, in its sole discretion.
Nothing contained in this Agreement shall preclude Employer from
granting or Employee from receiving benefits under or participating
in any bonus, incentive, profit sharing, stock option, stock purchase,
retirement, pension, insurance or similar benefit plan of Employer
now or hereinafter in effect for its management personnel.
THIRD: OTHER BENEFITS:
Employee will be provided continued coverage at not less than
current levels under all Employer's life insurance, health,
hospitalization, dental and Major Medical plans. Employee shall
also be provided an automobile suitable and appropriate to his
position with Employer.
FOURTH: DUTIES AND SERVICES:
Employee is engaged as President and Chief Executive
Officer of Employer during the term hereof. Employer will use its
best efforts and powers to sustain and continue Employee's election
as Director and his designation as President and Chief Executive
Officer; and Employee will serve in such capacity or capacities for
Employer, and will serve in such other capacities for any
controlled affiliate of Employer to which he may be elected or
appointed from time to time. Employee shall devote his full time,
attention and efforts to the business and affairs of Employer,
except during usual vacation periods and reasonable periods of
illness or incapacity, and shall perform his duties faithfully,
diligently and to the best of his ability. Subject to Paragraph
SEVENTH, nothing contained herein shall be construed to prevent
Employee: (1) from acting as a member of the Board of Directors of
any other corporation and from receiving compensation therefor; (2)
from making investments of any character in any business; or (3)
from otherwise engaging in other business activities, provided in
each case, however, that such service as a director, investments,
or any business activities do not interfere substantially with the
performance of Employee's duties hereunder. If Employee is not
elected as Director or designated as President and Chief Executive
Officer of Employer, or is removed from either of such positions,
in each case without cause and without his approval, such failure
to elect or designate or such removal shall constitute a default
hereunder on the part of Employer and Employee shall continue to be
compensated as provided in Paragraph SECOND hereof, as the case may
be, but from and after any such default (1) Employee's employment
shall, nevertheless, continue in accordance with the terms and
provisions of this Agreement and as a consultant to the Employer,
(2) Employee shall thereupon be obligated to perform consulting
services for the Employer at the Employer's offices in Cooperstown,
New York for a maximum of four (4) days during each calendar month,
and (3) Employee shall not be restricted in performing services
elsewhere for other parties. In such event, Employee shall also
receive service credit under any retirement or pension plan of
17
<PAGE>
Employer then in effect as if Employee had continued to render
uninterrupted services for the remainder of the term of this
Agreement. For the purpose of this Paragraph, a substantial
reduction in Employee's authority, powers or duties shall
constitute removal from his position.
FIFTH: EXPENSES:
The Employer will arrange for the payment of expenses incurred
by Employee in furtherance of or in connection with the business of
the Employer, including but not limited to all traveling expenses and
all entertainment expenses (whether incurred at Employee's residence,
while traveling, or otherwise). If any such expenses are paid in
the first instance by Employee, the Employer will arrange for his
reimbursement therefor. The Employer recognizes that, in the
performance of his duties, Employee may be required to entertain
various persons and representatives of organizations with whom the
Employer has or would like to have business relationships.. The
Employer will arrange for the reimbursement of Employee upon
presentation of expense vouchers for any such expenses which are
adaptable to the usual accounting procedures established by the
Employer.
SIXTH: WORKING FACILITIES:
Employee shall be furnished with a private office in
Cooperstown, New York and a secretary and such other facilities and
services suitable to his positions and adequate to his needs for
the performance of his duties including, without limitation,
suitable transportation at least equal to that which Employee
currently receives from Employer. Employee shall, on a monthly
basis, furnish Employer with itemized information in conformity
with its usual accounting procedures concerning his personal use of
any such facilities or services and shall reimburse Employer for
such personal use at rates prescribed by it.
SEVENTH: CONFIDENTIAL INFORMATION:
Employee shall not, during or subsequent to his employment
hereunder, divulge, furnish or make accessible to anyone (otherwise
than in the regular course of the business of Employer) any knowledge
or information, techniques, plans, trade or business secrets or
confidential information relating to the business of Employer or with
respect to any other confidential or secret aspect of the business of
Employer, nor shall Employee make any use of the same for his own
purposes or for the benefit of anyone under any circumstances; provided
that, after the term of his employment, these restrictions shall not
apply to such knowledge, techniques, plans, trade or business secrets
or confidential information which is then in, or subsequently becomes
part of, the public domain, except because of disclosure by Employee
without Employer's consent.
It is the desire of the parties that the provisions of
this Paragraph be enforced to the fullest extent permissible under
the laws and public policies in each jurisdiction in which
enforcement might be sought. Accordingly, if any particular
portion of this Paragraph be adjudicated as invalid or
unenforceable, this Paragraph shall be deemed amended to delete
18
<PAGE>
therefrom such portion so adjudicated, such deletion to apply only
with respect to the operation of this Paragraph in the particular
jurisdiction so adjudicating. If there be a breach or threatened
breach of this Paragraph, Employer shall be entitled to an
injunction restraining Employee from such breach, but nothing
herein shall be construed as prohibiting Employer from pursuing any
other remedies for such breach or threatened breach. The
provisions of this paragraph SEVENTH shall survive the termination
or expiration of this Agreement.
EIGHTH: DISABILITY:
If (1) Employee shall suffer any illness, disability or
incapacity so that he is unable to perform his duties hereunder
and such illness, disability or incapacity shall be deemed by a
duly licensed physician (who may be Employee's personal physician)
to be permanent or (2) Employee is unable to render full-time
services to the Employer of the character required hereunder for
a period of six (6) consecutive months by reason of illness,
disability or incapacity and the Board of Directors of the Employer
and if the Company determines that Employee has been permanently
disabled, then and in either of such events, Employee will continue
to render such advisory and consultative services as he is able, and
as may be reasonably requested of him by the directors and officers
of the Employer and he shall receive his annual compensation for the
balance of the term of this Agreement in such installments as he
shall then be currently receiving. Compensation during any period
of disability shall be adjusted for reimbursement from any
disability insurance paid for by Employer.
NINTH: DEATH:
In the event of Employee's death during the term of this
Agreement, the Employer shall pay to Employee's designated beneficiary
or beneficiaries, or, in default of such designation, to his estate,
the annual salary due for the balance of the Agreement prorated for
any partial year thereof and payable in a lump sum within ninety (90)
days from the date of his death.
TENTH: EARLY TERMINATION:
This Agreement may be terminated prior to the end of the Term
provided in paragraph FIRST under and subject to the following conditions:
a) Employee shall have the right to terminate this
Agreement during the Term by giving thirty (30) days advance
written notice. Upon the expiration of such notice period,
Employee shall not be entitled to any further compensation
hereunder.
b) In the event of any change in control of Employer
from and after the date hereof, either Employer or Employee may,
at his/its independent election, such election to be evidenced by
written notice, terminate this Agreement. Effective upon the giving
of such notice, regardless of which party elects to give such notice,
Employer shall pay to Employee a sum equal to Employee's then
19
<PAGE>
current annual salary multiplied by the years (including fractional
years) remaining in the Term of this Agreement prior to the giving
of such notice, less any legally required withholdings. As used in
this Paragraph THIRD, "change in control" means (i) any such change
required to be reported to the Securities and Exchange Commission
under Item 1 in a Current Report on Form 8-K (or a successor
provision thereof); provided, however, that no change in control
shall be deemed to have occurred which involves the acquisition,
holding, voting or disposing of less than 40% of Employer's
outstanding voting securities, or (ii) the sale of all or a
substantial portion of the productive assets of Employer. For
purposes of this Paragraph, "Employer" shall include both jointly
and severally, Delaware Otsego Corporation and The New York,
Susquehanna and Western Railway Corporation.
c)Employer may terminate this Agreement at any time
without cause by giving thirty (30) days advance written notice
to Employee. Effective upon the giving of such notice, Employer
shall pay to Employee a sum equal to Employee's then current annual
salary multiplied by the years (including fractional years) remaining
in the Term of this Agreement prior to the giving of such notice, less
any legally required withholdings.
d)Employer may terminate this Agreement at any time for cause.
For purposes of this Agreement, "cause" shall include any one or more
of the following:
1. A material breach of any covenant, provision or condition
of this Agreement by Employee.
2. Commission by Employee of a felony or a crime involving
moral turpitude.
3. Any gross negligence or willful misconduct in the
performance of Employee's duties that results in detriment to Employer.
Upon any such termination, Employee shall not be entitled to any
further compensation hereunder.
ELEVENTH: NOTICE:
Any notice required or given under this Agreement shall be sufficient
if in writing and sent by registered or certified mail to his residence
in the case of Employee or to Attention: Secretary, Delaware Otsego
Corporation in the case of Employer, at the addresses hereinabove
set forth, or to such other addresses as may be designated
20
<PAGE>
subsequently by the parties hereto. Any such notice shall be
deemed given when so addressed and mailed.
TWELFTH: WAIVER OF BREACH:
A waiver by Employer or Employee of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by the other party.
THIRTEENTH: ENTIRE AGREEMENT:
This Agreement contains the entire understanding and agreement
between the parties and cannot be amended, modified or supplemented
in any respect, except by an agreement in writing signed by the party
against whom enforcement of any amendment, modification or supplement
is sought.
FOURTEENTH: SUCCESSORS AND ASSIGNS:
This Agreement shall inure to the benefit of and be binding upon
Employer and its successors and assigns including, without limitation,
any corporation or other entity which may acquire all or substantially
all of the capital stock, assets and/or business of Employer or with
or into which Employer may be consolidated or merged, and Employee,
his heirs, executors, administrators and legal representatives.
FIFTEENTH: GOVERNING LAW:
This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day first hereinabove written.
DELAWARE OTSEGO CORPORATION
s/ EVERETT A. GILMOUR
______________________________
Everett A. Gilmour
Chairman of the Board
s/ WALTER G. RICH
______________________________
Walter G. Rich
Chief Executive Officer
21
EMPLOYMENT AGREEMENT
____________________
AGREEMENT made this 3rd day of June, 1995, by and between DELAWARE
OTSEGO CORPORATION, a New York corporation, with its principal
office and place of business at 1 Railroad Avenue, Cooperstown, New
York 13326 (hereinafter called "Employer") and C. DAVID SOULE, an
individual, residing at P.O. Box 174, Cooperstown, New York 13326
(hereinafter called "Employee").
W I T N E S S E T H :
WHEREAS, Employee currently serves as Executive Vice President
and Chief Operating Officer of Employer; and
WHEREAS, Employer acknowledges and recognizes the value of
Employee's services and deems it necessary and desirable to retain
Employee's full-time services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms
and conditions of Employee's employment in a written agreement
which will supersede all prior agreements of employment, whether
written or oral; and
WHEREAS, the employment, the duration thereof, the
compensation to be paid to Employee, and the other terms and
provisions of this Agreement were duly approved by action of
Employer's Board of Directors at a meeting held on the 3rd day of
June, 1995.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM:
Employer does hereby employ Employee as its Executive Vice President
and Chief Operating Officer for a period of five (5) years
commencing on the date hereof, unless sooner terminated as provided
herein. This Agreement may be renewed for such term or terms as may
be mutually agreed upon by Employer and Employee. Not later than six
(6) months prior to the expiration date of the initial term of this
Agreement, Employer shall, at the request of Employee, discuss with
Employee the subject of the renewal of the term of this Agreement.
Notwithstanding any other provision of this Agreement to the
contrary, this Agreement, if still then in effect, shall terminate
on Employee's 65th birthday.
22
<PAGE>
SECOND: COMPENSATION:
Employer shall pay to Employee for services to be rendered
hereunder compensation at a minimum rate of $125,000.00 per annum,
payable in weekly installments or on such other basis as may be
agreed upon. Employee's compensation shall be reviewed from time
to time by the Board of Directors of Employer or an appropriate
committee thereof, after which such compensation may be increased
in such amount as may be determined by such Board or committee, as
the case may be, in its sole discretion. Nothing contained in this
Agreement shall preclude Employer from granting or Employee from
receiving benefits under or participating in any bonus, incentive,
profit sharing, stock option, stock purchase, retirement, pension,
insurance or similar benefit plan of Employer now or hereinafter in
effect for its management personnel.
THIRD: DUTIES AND SERVICES:
Employee is engaged as Executive Vice President and
Chief Operating Officer of Employer during the term hereof.
Employer will use its best efforts and powers to sustain and
continue Employee's election as Executive Vice President and Chief
Operating Officer and his designation as Executive Vice President
and Chief Operating Officer; and Employee will serve in such
capacity or capacities for Employer, and will serve in such
capacity or capacities for any controlled affiliate of Employer to
which he may be elected or appointed from time to time. Employee
shall devote his full time, attention and efforts to the business
and affairs of Employer, except during usual vacation periods and
reasonable periods of illness or incapacity, and shall perform his
duties faithfully, diligently and to the best of his ability.
Subject to Paragraph SEVENTH, nothing contained herein shall be
construed to prevent Employee: (1) from acting as a member of the
Board of Directors of any other corporation and from receiving
compensation therefor; (2) from making investments of any character
in any business; or (3) from otherwise engaging in other business
activities, provided in each case, however, that such service as a
director, investments, or any business activities do not interfere
substantially with the performance of Employee's duties hereunder.
In the event of Employer's breach of Paragraph SIXTH herein, or if
Employee is not designated as Executive Vice President and Chief
Operating Officer of Employer, or is removed from such
position(s), in each case without cause and without his approval,
Employee shall continue to be compensated for the remainder of the
Term of this Agreement as provided in Paragraph SECOND hereof, but
from and after any such default Employee's employment shall,
nevertheless, continue in accordance with the terms and provisions
of this Agreement and as a consultant to the Employer, (2) Employee
shall thereupon be obligated to perform consulting services for the
Employer at the Employer's offices in Cooperstown, New York for a
maximum of four (4) days during each calendar month, and (3)
Employee shall not be restricted in performing services elsewhere
for other parties. In the event of any such default, Employee
shall also receive service credit under any retirement or pension
plan of Employer then in effect as if Employee had continued to
23
<PAGE>
render uninterrupted services for the remainder of the term of this
Agreement had it remained in full force and effect. For the
purpose of this Paragraph, a substantial reduction in Employee's
authority, powers or duties shall constitute removal from his
position.
FOURTH: EXPENSES:
Employee is authorized to incur reasonable and necessary expenses
for promoting the business of Employer, including expenses for
entertainment, travel and similar items. Employer will reimburse
Employee for all such expenses upon presentation by him, from time
to time, of an itemized account thereof in conformity with
Employer's usual accounting procedures.
FIFTH: WORKING FACILITIES:
Employee shall be furnished with a private office in
Cooperstown, New York, or such other location as may be mutually
agreed upon, and a secretary and such other facilities and services
suitable to his positions and adequate to his needs for the
performance of his duties including, without limitation, suitable
transportation, at least equal to that which Employee currently
receives from Employer. Employee shall, on a monthly basis,
furnish Employer with itemized information in conformity with its
usual accounting procedures concerning his personal use of any such
facilities or services and shall reimburse Employer for such
personal use at rates prescribed by it.
SIXTH: CONFIDENTIAL INFORMATION:
Employee shall not, during or subsequent to his employment
hereunder, divulge, furnish or make accessible to anyone (otherwise
than in the regular course of the business of Employer) any
knowledge or information, techniques, plans, trade or business
secrets or confidential information relating to the business of
Employer or with respect to any other confidential or secret aspect
of the business of Employer, nor shall Employee make any use of the
same for his own purposes or for the benefit of anyone under any
circumstances; provided that, after the term of his employment,
these restrictions shall not apply to such knowledge, techniques,
plans, trade or business secrets or confidential information which
is then in, or subsequently becomes part of, the public domain,
except because of disclosure by Employee without Employer's
consent.
It is the desire of the parties that the provisions of
this Paragraph be enforced to the fullest extent permissible under
the laws and public policies in each jurisdiction in which
enforcement might be sought. Accordingly, if any particular
portion of this Paragraph be adjudicated as invalid or
unenforceable, this Paragraph shall be deemed amended to delete
therefrom such portion so adjudicated, such deletion to apply only
with respect to the operation of this Paragraph in the particular
jurisdiction so adjudicating. If there be a breach or threatened
breach of this Paragraph, Employer shall be entitled to an
injunction restraining Employee from such breach, but nothing
herein shall be construed as prohibiting Employer from pursuing any
other remedies for such breach or threatened breach. The
24
<PAGE>
provisions of this paragraph SEVENTH shall survive the termination
or expiration of this Agreement.
SEVENTH: DISABILITY:
If (1) Employee shall suffer any illness, disability or
incapacity so that he is unable to perform his duties hereunder
and such illness, disability or incapacity shall be deemed by a
duly licensed physician (who may be Employee's personal physician)
to be permanent; or (2) Employee shall suffer any illness, disability
or incapacity so that he is unable to render full-time services to
Employer of the character required hereunder with reasonable
efficiency for a period of six (6) consecutive months by reason of
illness, disability or incapacity and the Employer determines that
Employee has been permanently disabled, then, and in either of such
events, Employee will continue to render such advisory and
consultative services as he is able, and as may be reasonably
requested of him by the directors and officers of Employer, and he
shall receive his annual compensation for the balance of the term
of this Agreement in such installments as he shall then be
currently receiving. Compensation during any period of disability
shall be adjusted for reimbursement from any disability insurance
paid for by Employer.
EIGHTH: DEATH:
In the event of Employee's death during the term of this Agreement,
the Employer shall pay to Employee's designated beneficiary or
beneficiaries, or, in default of such designation, to his estate, the
annual salary due for the balance of the Agreement prorated for any
partial year thereof and payable in a lump sum within ninety (90) days
from the date of his death.
NINTH: EARLY TERMINATION:
This Agreement may be terminated prior to the end of the Term
provided in paragraph FIRST under and subject to the following conditions:
a) Employee shall have the right to terminate this
Agreement during the Term by giving thirty (30) days advance
written notice. Upon the expiration of such notice period,
Employee shall not be entitled to any further compensation
hereunder.
b) In the event of any change in control of Employer from
and after the date hereof, either Employer or Employee may, at his/its
independent election, such election to be evidenced by written
notice, terminate this Agreement. Effective upon the giving of
such notice, regardless of which party elects to give such notice,
Employer shall pay to Employee a sum equal to Employee's then
current annual salary multiplied by the years (including fractional
years) remaining in the Term of this Agreement prior to the giving
of such notice, less any legally required withholdings. As used in
this Paragraph THIRD, "change in control" means (i) any such change
required to be reported to the Securities and Exchange Commission
25
<PAGE>
under Item 1 in a Current Report on Form 8-K (or a successor
provision thereof); provided, however, that no change in control
shall be deemed to have occurred which involves the acquisition,
holding, voting or disposing of less than 40% of Employer's
outstanding voting securities, or (ii) the sale of all or a
substantial portion of the productive assets of Employer. For
purposes of this Paragraph, "Employer" shall include both jointly
and severally, Delaware Otsego Corporation and The New York,
Susquehanna and Western Railway Corporation.
c)Employer may terminate this Agreement at any time without
cause by giving thirty (30) days advance written notice to Employee.
Effective upon the giving of such notice, Employer shall pay to
Employee a sum equal to Employee's then current annual salary
multiplied by the years (including fractional years) remaining in
the Term of this Agreement prior to the giving of such notice, less
any legally required withholdings.
d)Employer may terminate this Agreement at any time for cause
by written notice. For purposes of this Agreement, "cause" shall
include any one or more of the following:
1. A material breach of any covenant, provision or condition
of this Agreement by Employee.
2. Commission by Employee of a felony or a crime involving
moral turpitude.
3. Any gross negligence or willful misconduct in the
performance of Employee's duties that results in detriment to
Employer.
Upon any such termination, Employee shall not be entitled to any
further compensation hereunder.
e) In the event of termination under subparagraphs (a)
or (d) above, Employee hereby expressly agrees that the giving of
such notice under such subparagraphs shall also constitute the
termination and cancellation of any incentive stock options to
purchase the common stock of Delaware Otsego Corporation Employee
may then hold.
TENTH: NOTICE:
Any notice required or given under this Agreement shall be
sufficient if in writing and sent by registered or certified mail to
his residence in the case of Employee or to Attention: Secretary,
26
<PAGE>
Delaware Otsego Corporation in the case of Employer, at the addresses
hereinabove set forth, or to such other addresses as may be designated
subsequently by the parties hereto. Any such notice shall be
deemed given when so addressed and mailed.
ELEVENTH: WAIVER OF BREACH:
A waiver by Employer or Employee of a breach of any provision of
this Agreement by the other party shall not operate or be construed as
a waiver of any subsequent breach by the other party.
TWELFTH: ENTIRE AGREEMENT:
This Agreement contains the entire understanding and agreement
between the parties and cannot be amended, modified or supplemented
in any respect, except by an agreement in writing signed by the
party against whom enforcement of any amendment, modification or
supplement is sought.
THIRTEENTH: SUCCESSORS AND ASSIGNS:
This Agreement shall inure to the benefit of and be binding
upon Employer and its successors and assigns including, without
limitation, any corporation or other entity which may acquire all or
substantially all of the capital stock, assets and/or business of
Employer or with or into which Employer may be consolidated or merged,
and Employee, his heirs, executors, administrators and legal
representatives.
FOURTEENTH: GOVERNING LAW:
This Agreement shall be governed by the laws of the State
of New York.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day first hereinabove written.
DELAWARE OTSEGO CORPORATION
By: s/ WALTER G. RICH
________________________
Title: President and Chief
Executive Officer
________________________
s/ C. DAVID SOULE
________________________
C. David Soule
27
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-START> Jan-01-1995
<PERIOD-END> Jun-30-1995
<PERIOD-TYPE> 6-MOS
<CASH> 1427
<SECURITIES> 0
<RECEIVABLES> 6179
<ALLOWANCES> 0
<INVENTORY> 760
<CURRENT-ASSETS> 10514
<PP&E> 89913
<DEPRECIATION> 27320
<TOTAL-ASSETS> 74341
<CURRENT-LIABILITIES> 14468
<BONDS> 16726
0
0
<COMMON> 192
<OTHER-SE> 32588
<TOTAL-LIABILITY-AND-EQUITY> 74341
<SALES> 16796
<TOTAL-REVENUES> 16796
<CGS> 0
<TOTAL-COSTS> 18100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 721
<INCOME-PRETAX> 3283
<INCOME-TAX> 1083
<INCOME-CONTINUING> 2200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2200
<EPS-PRIMARY> 1.43
<EPS-DILUTED> 1.34
</TABLE>
