===============================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934
MIMBRES VALLEY FARMER'S ASSOCIATION, INC.
dba FARMER'S INC.
(Name of subject Company)
John Brownfield, John Keck, J.W. Donaldson Jr., Frederick H. Sherman, Kenneth
Stevens, Harold Morrow, Marsha M. Brownfield, D. Keith Brownfield, Jesse L.
Brownfield, Ella Rose MacGibbon, W. Chris Sanders, Pam Sanders, Bradley T.
Sanders, Clinton C. Sanders, Cory S. Sanders, Linda C. Keck, Melinda E.
Dougherty, Sean P. Dougherty, S. Patrick Dougherty, Jr., Christopher J.
Dougherty, Albert P. Keck, II, Caroline C. Keck, Alexandra M. Keck, Julianna D.
Keck, Edward K. Saylor, Victoria M. Saylor, Dianne Donaldson, Jeremy W.
Donaldson, Luke Donaldson, Sarah Donaldson, J.W. Donaldson Company, John Bryan
Johnson, Jill M. Johnson, Johnnie E. Johnson, Kimberly K. Johnson, Ruth Ann
Johnson, Ruth D. Johnson, Janie Jontz Sherman, Jerah E. Sherman, F. Jakub
Sherman, Benjamin M. Sherman, Kathy Strauss, David Strauss, Amy Strauss, Kristin
Strauss, Benjamin K. Sherman, Rena Beth Stevens, Craig Elliot Stevens, Nathaniel
Stevens, Joel Bradley Stevens, Kyle Edward Stevens, Katherine Stevens, Kelley
Stevens, Diane W. Morrow, Ashlee M. Morrow, Dustin W. Morrow, Jordan C. Morrow,
Jack F. Morrow, Betty M. Morrow, Patsy T. Merrill, Frank Merrill, and Morrow &
Company, P.A.
(Bidders)
COMMON STOCK, $25.00 PAR VALUE
(Title of Class of Securities)
FREDERICK H. SHERMAN, Esq.
SHERMAN AND SHERMAN, P.C.
210 S. Silver
P.O. Box 850
Deming, NM 88030
(505)546-8846
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
CALCULATION OF FILING FEE
===============================================================================
Transaction
Valuation Amount of Filing Fee
- --------------------------------------------------------------------------------
$671,598.00 $150.00
================================================================================
For purposes of calculating fee only. This amount assumes the purchase
of 13,431.46 shares of Common Stock of Mimbres Valley Farmer's Association,
Inc. at $50 in cash per share. The amount of the filing fee calculated in
accordance with Regulation 240.0-11 of the Securities Exchange Act of 1934,
equals 1/50 of one percentum of the value of the shares to be purchased.
[_] Check box if any part of the fee is offset by Rule 0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the Form or Schedule and
the date of its filing.
Amount Previously Paid:____________________________________________________
Form or Registration No.:_____________________________________________________
Filing Party:_________________________________________________________________
Date filed:__________________________________________________________________
===============================================================================
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John E. Keck ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- ------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
John Keck owns 71 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-2
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Linda C. Keck ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Linda C. Keck owns 0 shares and the Group owns 491.50 group shares
- ------------------------------------------------------------------------------
- --
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- ------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-3
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Melinda E. Dougherty ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Melinda E. Dougherty owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-4
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sean P. Dougherty ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Sean P. Dougherty owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-5
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
S. Patrick Dougherty, Jr. ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
S. Patrick Dougherty, Jr. owns 0 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-6
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Christopher J. Dougherty ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Christopher J. Dougherty owns 0 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-7
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Albert P. Keck II ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- ------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Albert P. Keck II owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-8
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Caroline C. Keck ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Caroline C. Keck owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-9
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alexandra M. Keck ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Alexandra M. Keck owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-10
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Julianna D. Keck ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Julianna D. Keck owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-11
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edward Saylor ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Edward Saylor owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-12
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Victoria M. Saylor ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Victoria M. Saylor owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES |_|
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- -------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-13
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Frederick H. Sherman ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Frederick H. Sherman owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-14
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Janie Jontz Sherman ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Janie Jontz Sherman owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-15
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Benjamin M. Sherman ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Benjamin M. Sherman owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-16
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jerah E. Sherman ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Jerah E. Sherman owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-17
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
F. Jakub Sherman ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
F. Jakub Sherman owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-18
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kathy Strauss ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Kathy Strauss owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-19
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David Strauss ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
David Strauss owns 0 shares and the Group owns 491.50 group shares
- -------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-20
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Amy Strauss ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Amy Strauss owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-21
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kristin Strauss ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Kristin Strauss owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-22
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Benjamin K. Sherman ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Benjamin K. Sherman owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-23
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sherman Corporation 85-0172600
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Sherman Corporation owns 36 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-24
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J.W. or Dianne Donaldson, Jr. ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
J.W. and Dianne Donaldson own 100.50 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-25
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jeremy W. Donaldson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Jeremy W. Donaldson owns 4.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-26
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Luke Donaldson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Luke M. Donaldson owns 4.00 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-27
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sarah Donaldson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Sarah E. Donaldson owns 4.00 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-28
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J.W. Donaldson Company 85-0148999
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
J.W. Donaldson Co. owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-29
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ruth Ann or Johnnie Johnson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Ruth Ann and Johnnie Johnson own 8.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-30
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Johnnie E. or Ruth D. Johnson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Johnnie E. and Ruth D. Johnson own 3.00 shares and the Group owns 491.50
group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-31
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ruth D. or Kimberly K. Johnson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Ruth D. & Kimberly K. Johnson own 3.00 shares and the Group owns 491.50
group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-32
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Donaldson Revocable Trust ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Donaldson Rev. Trust owns 56.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.4%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-33
<PAGE>
APPENDIX B37
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John Bryan Johnson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
John Bryan Johnson owns 4.00 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-34
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jill M. Johnson ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Jill M. Johnson owns 3.00 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-35
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Harold C. Morrow ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Harold C. Morrow owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-36
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dianne W. Morrow ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Diane W. Morrow owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-37
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ashlee M. Morrow ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Ashlee M. Morrow owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-38
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dustin W. Morrow ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Dustin W. Morrow owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-39
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jordan C. Morrow ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Jordan C. Morrow owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-40
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Morrow & Company, P.A. 85-0320943
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Morrow & Co. owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-41
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jack F. Morrow ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Jack F. Morrow owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-42
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Betty M. Morrow ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Betty M. Morrow owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-43
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Patsy T. Merrill ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Patsy T. Merrill owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-44
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Frank Merrill ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Frank Merrill owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-45
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John V. Brownfield ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
John V. Brownfield owns 26.50 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-46
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John V. or Marsha M. Brownfield ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
John V. and Marsha M. Brownfield own 40.00 shares and the Group owns 491.50
group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-47
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
D. Keith or John V. Brownfield ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Keith D. and John V. owns 10.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-48
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jesse L. or John V. Brownfield ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Jesse and John V. Brownfield own 10.00 shares and the Group owns 491.50
group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-49
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ella Rose MacGibbon ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Ella Rose MacGibbon owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-50
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
W. Chris Sanders ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
W. Chris Sanders owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-51
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pam M. Sanders ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Pam M. Sanders owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-52
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bradley T. Sanders ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Bradley T. Sanders owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-53
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Clinton C. Sanders ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Clinton C. Sanders owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-54
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cory S. Sanders ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Cory S. Sanders owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-55
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
A.D. Brownfield III ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
A.D. Brownfield Keck owns 1.50 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-56
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alva D. Brownfield Trust 86-6105852
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
A.D. Brownfield Trust owns 19.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-57
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kenneth E. or Rena Beth Stevens ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Kenneth E. & Rene Beth owns 49.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-58
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Craig Elliot Stevens ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Craig Elliot Stevens owns 3.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-59
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Joel Bradley Stevens ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Joel Bradley Stevens owns 3.00 shares and the Group owns 491.50 group
shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-60
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kyle Edward Stevens ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Kyle E. Stevens owns 3.00 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-61
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kenneth or Katherine Stevens ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Kenneth and Katherine Stevens own 30.00 shares and the Group owns 491.50
group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-62
<PAGE>
APPENDIX B
- --------------------------------------------------------------------------------
14D-1
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kelley Stevens ###-##-####
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCES OF FUNDS*
PF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(e) OR 2(f)
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Kelley Stevens owns 0 shares and the Group owns 491.50 group shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
3.5%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
IN, GM
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
B-63
<PAGE>
This Statement relates to a tender offer by John Brownfield, John
Keck, J.W. Donaldson, Jr., Frederick H. Sherman, Kenneth Stevens, Harold Morrow,
(the "Purchasers" to purchase 13,910.46 shares of Common Stock, $25.00 par value
(the "Shares") of Mimbres Valley Farmer's Association, Inc. dba Farmer's Inc.,
a New Mexico corporation at $50.00 per Share in cash, net to the seller,
upon the terms and subject to the conditions set forth in the Offer to
Purchase dated June 1, 1996 (the "Offer to Purchase") and the related Letter
of Transmittal (which together constitute the "Offer"), which are annexed to
and filed with this Statement as Exhibits (a)(1) and (a)(2), respectively.
Item 1. Security and Subject Company.
(a) The name of the subject company is Mimbres Valley Farmer's Association,
Inc. dba Farmer's Inc., a New Mexico corporation (the "Company") and the
address of its principal executive offices is 811 S. Platinum, Deming, New
Mexico 88030.
(b) The class of equity securities to which this statement relates is the
Common Stock, $25.00 par value (the "Shares") of the Company. The information
set forth in "Introduction" and "Special Factors" of the Offer, pg. 3 of
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Special Factors--Fairness" of the Offer
to Purchase on pg. 7 is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d);(g) The information set forth in "Special Factors--Purpose and
Effects of the Transaction" on pg. 3 and "Identity and Background of the
Purchasers" on pg. 18 of the Offer to Purchase is incorporated herein by
reference.
(e)-(f) During the last five years, none of the Purchasers have been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding (of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) and (b) The information set forth in "Introduction", pg. 3, "Special
Factors--Fairness, pg. 7, "Background of the Offer; Contacts with the Company",
pg. 19, and "Directors' Position", pg. 20, of the Offer to Purchase are
incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
B-64
<PAGE>
(a) The information set forth in "Source and Amount of Funds or Other
Consideration" on pg. 17 of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in "Solicitation and other Fees and Expenses"
on pp. 19 and 20 of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Source and Amount of Funds or Other
Consideration" on pg. 17 of the Offer to Purchase is incorporated herein by
reference.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(g) The information set forth in "Special Factors--Purposes and Effects
of the Transaction, pp. 3-6 and "Purpose of the Tender Offer; Prior Agreements;
Plans of the Purchasers" on pp. 15 and 16 of the Offer to Purchase are
incorporated herein by reference.
Item 6. Interest in Securities of the Subject Company.
(a) The information set forth in "Special Factors--Purpose and Effects of
the Transaction" on pg. 6, "Special Factors--Fairness" on pg. 7, and "Purpose of
the Tender Offer; Prior Agreements; Plans of the Purchasers--Beneficial
Ownership of Shares" on pg. 16 of the Offer to Purchase are incorporated herein
by reference.
(b) The information set forth in "Special Factors--Fairness" on pg. 7 of
the Offer to Purchase is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect to
the Subject Company's Securities.
The information set forth in "Purpose of the Offer; Prior Agreements; Plans
of the Purchasers--Beneficial Ownership of Shares", on pg. 16 of the Offer to
Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
(a) The information set forth in "Special Factors--Purpose and Effects of
the Transaction" on pg. 4 and "Purpose of the Tender Offer; Prior Agreements;
Plans of the Purchasers--Plans of the Purchasers" on pg. 15 are incorporated
herein by reference.
(b) The information set forth in "Purpose of the Tender Offer; Prior
Agreements; Plans of the Purchasers--Plans of the Purchasers" on pg. 15 are
incorporated herein be reference.
Item 9. Financial Statements
B-65
<PAGE>
(a)-(b) The information set forth in "Financial Statements" on pg. 20 of
the Offer to Purchase is incorporated herein by reference.
Item 10. Additional Information
Not applicable.
Item 11. Material to be Filed as Exhibits.
(a)(1)-Offer to Purchase, dated June 1, 1996
(a)(2)-Auditor's Consent
(a)(3)-Letter of Transmittal
(a)(4)-Notice of Guaranteed Delivery
(a)(5)-Guidelines for Certification of Taxpayer Identification Number on
substitute Form W-9
(a)(6)-Agreement between Purchasers
After due inquiry and to the best of my knowledge and belief, I certify
for all the Purchasers as their attorney-in-fact that the information set forth
in this Statement is true, complete and correct.
SIGNATURE
5/29/96
------------------
(Date)
Frederick H. Sherman
---------------------
(Signature)
Frederick H. Sherman
----------------------
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
Any and All of the Outstanding Shares of Common Stock
of
MIMBRES VALLEY FARMER'S ASSOCIATION, INC.
811 S. Platinum
Deming, NM 88030
by
JOHN BROWNFIELD, JOHN KECK, J.W. DONALDSON JR., FREDERICK H. SHERMAN, KENNY
STEVENS, HAROLD MORROW, MARSHA M. BROWNFIELD, D. KEITH BROWNFIELD, JESSE L.
BROWNFIELD, ELLA ROSE MACGIBBON, W. CHRIS SANDERS, PAM SANDERS, BRADLEY T.
SANDERS, CLINTON C. SANDERS, CORY S. SANDERS, LINDA C. KECK, MELINDA E.
DOUGHERTY, SEAN P. DOUGHERTY, S. PATRICK DOUGHERTY, JR., CHRISTOPHER J.
DOUGHERTY, ALBERT P. KECK, II, CAROLINE C. KECK, ALEXANDRA M. KECK, JULIANNA D.
KECK, EDWARD K. SAYLOR, VICTORIA M. SAYLOR, DIANNE DONALDSON, JEREMY W.
DONALDSON, LUKE DONALDSON, SARAH DONALDSON, J.W. DONALDSON COMPANY, JOHN BRYAN
JOHNSON, JILL M. JOHNSON, JOHNNIE E. JOHNSON, KIMBERLY K. JOHNSON, RUTH ANN
JOHNSON, RUTH D. JOHNSON, JANIE JONTZ SHERMAN, JERAH E. SHERMAN, F. JAKUB
SHERMAN, BENJAMIN M. SHERMAN, KATHY STRAUSS, DAVID STRAUSS, AMY STRAUSS, KRISTIN
STRAUSS, BENJAMIN K. SHERMAN, RENA BETH STEVENS, CRAIG ELLIOT STEVENS,
NATHANIEL STEVENS, JOEL BRADLEY STEVENS, KYLE EDWARD STEVENS, KATHERINE STEVENS,
KELLEY STEVENS, DIANE W. MORROW, ASHLEE M. MORROW, DUSTIN W. MORROW, JORDAN C.
MORROW, JACK F. MORROW, BETTY M. MORROW, PATSY T. MERRILL, FRANK MERRILL, AND
MORROW & COMPANY, P.A.
(hereinafter Purchasers)
at
$50.00 Net Cash Per Share
June 3, 1996
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON JULY 1, 1996, UNLESS THIS OFFER IS EXTENDED.
- ----------------------------------------------------------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Any shareholder desiring to sell all or any portion of his or her shares
(the "Shares") of the common stock of Mimbres Valley Farmer's Association, Inc.
pursuant to the procedures set forth in Section 2 of this Offer to Purchase (the
"Offer to Purchase") should either (i) complete and sign the enclosed letter of
transmittal (the "Letter of Transmittal") or a facsimile copy thereof in
accordance with the instructions in the Letter of Transmittal and mail or
deliver it together with the stock certificate(s) representing such Shares and
any other required documents to Mimbres Valley Abstract and Title Co., the
Depository, or (ii) request his or her broker, dealer, bank, or trust company to
effect the transaction on his or her behalf. A shareholder whose Shares are
registered in the name of a broker, dealer, bank, trust company, or other
nominee must contact such person in order to tender the Shares so registered.
A shareholder who desires to tender Shares and whose certificates for such
Shares are not immediately available may tender such Shares by following the
<PAGE>
procedure for guaranteed delivery set forth in Section 5 of this Offer to
Purchase. Questions, requests for assistance, and requests for additional
copies of documents of this Offer to Purchase, the Letter of Transmittal and
related documents may be directed to Frederick H. Sherman at P.O. Box 850,
Deming, New Mexico 88030, telephone number: (505) 546-8846 or fax number: (505)
546-8847. A shareholder may also contact brokers, dealers, commercial banks or
trust companies for assistance concerning the Offer.
TABLE OF CONTENTS
Page
----
1. Introduction 3
2. Special Factors 3
3. Terms of the Offer; Termination; Amendment; Number of Shares 8
4. Conditions to the Offer 9
5. Procedure for Tendering Shares 11
6. Withdrawal Rights 13
7. Acceptance of Tendered Shares; Payment of Purchase Price 14
8. Tax Consequences 15
9. Purpose of the Tender Offer; Prior Agreements; Plans of the Purchasers 15
10. Source and Amount of Funds or Other Consideration 18
11. Certain Information Concerning the Company 18
12. Identity and Background of the Beneficial Owners and Purchasers 19
and Exhibit A
13. Background of the Offer; Contacts with the Company 20
14. Solicitation and Other Fees and Expenses 20
15. Market for Stock; Dividends 21
16. Directors' Position 21
17. Financial Statements 21
18. Miscellaneous 22
2
<PAGE>
1. INTRODUCTION
To the Holders of Common Stock of Mimbres Valley Farmer's Association, Inc.:
John Brownfield, John Keck, J.W. Donaldson Jr., Frederick H. Sherman,
Kenny Stevens, Harold Morrow, and other family members as set forth in Exhibit
A hereto (the "Purchasers") hereby offer to purchase any and all of the
outstanding shares (the "Shares") of the common stock (the "Common Stock"), par
value $25.00 per share, of Mimbres Valley Farmer's Association, Inc., dba
Farmer's, Inc., Deming, New Mexico, a New Mexico corporation (the "Company"),
a corporation whose Common Stock is registered with the Securities and Exchange
Commission (the "SEC" under the Exchange Act), at a purchase price of $50.00 per
share, net in cash to the seller, upon the terms and conditions set forth in
this Offer to Purchase (the "Offer to Purchase") and in the accompanying Letter
of Transmittal (the "Letter of Transmittal"). The Offer to Purchase and the
Letter of Transmittal together constitute the Purchasers' "Offer." Tendering
shareholders will not be obligated to pay brokerage commissions, or fees. The
offer is subject to certain conditions outlined in Section 4 of this Offer to
Purchase. Shareholders are urged to review carefully all of the material
contained in the Offer to Purchase before making any decisions with respect to
this offer.
2. SPECIAL FACTORS. Shareholders should carefully consider the following
special factors in determining whether to tender or hold their Shares.
Purpose and Effects of the Transaction.
The Purchasers are engaging in this transaction in order to gain control
over the management, operations and assets of the Company. On May 24, 1996, the
Purchasers entered into an Agreement (the "Agreement") contemplating their
acquisition of up to all of the issued Shares of Common Stock not currently
owned by any of the Purchasers. As of May 15, 1996, according to the company's
shareholder list, there were 13,910.46 Shares issued and outstanding, and the
Purchasers own collectively 491.5 Shares or 3.5% of the Company's Shares. The
Agreement contemplates that the Purchasers offer to acquire the remaining Shares
of Common Stock and procedures for purchase, and this Offer is being made in
compliance with that Agreement. Alternative methods were considered for the
acquisition of the remaining Shares, a tender offer was deemed to be the most
expedient method of effecting the transaction, the fairest method, because each
shareholder will be permitted to tender or continue to hold his or her Shares of
Common Stock, in a method in compliance with the requirements of the Exchange
Act.
Two of the Purchasers, John Brownfield and J.W. Donaldson, are currently
directors of the Company. Kenny Stevens has been manager of the Company for
the last 16 years until resigning on March 8, 1996. Kenny has agreed to stay
on in an advisory capacity to help the new manager, Danny Gonzales, in the
<PAGE>
transition until June 30, the end of the fiscal year for the Company. Harold
Morrow is also the outside accountant/auditor for the Company and has been
employed in such position for approximately the last ten years. This offer may
be deemed to be an offer to purchase securities by "affiliates" of the Company,
governed by Rule 13e-3 promulgated by the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the Offer is being made in compliance with that
regulation.
Following the consummation of the Offer, the Purchasers intend to seek
control of the business and affairs of the Company, including appropriate
representation on the Board of Directors of the Company, at the earliest
practicable opportunity. The Purchasers intend that the Board of Directors
consist of persons designated by the Purchasers, some of whom may presently be
directors of the Company. It is contemplated that Mr. Morrow will become a
Director of the Company and as required, Morrow & Co. will resign as the
Company's independent public accountants. Because the Company does not have
cumulative voting, the Purchasers may have the power to elect all of the
directors of the Company, and the remaining shareholders will not be able to
elect any directors. Purchasers desire to change the bylaws to allow cumulative
voting to provide minority shareholders some protection which is currently not
provided for under the current Bylaws. Additionally, shareholders owning only a
small number of Shares cause significant inefficiencies for the Company. It
costs more for the reporting requirements for many shareholders owning a small
number of Shares than the historical market value for such Shares. The expenses
incurred by the Company related to their shareholders holding a small number
of Shares makes the Company less competitive. It is the Purchaser's proposal
to change the Bylaws and Articles of Incorporation to allow shareholders to hold
larger numbers of Shares. The current Articles of Incorporation and Bylaws allow
240 Shares as the maximum that can be owned by any shareholder. While under the
current practice extended family members to Directors have been permitted to
also acquire shares, the Purchasers believe that such restrictions are adverse
to the Company and its shareholders. The average stockholder in the Company owns
only 16 Shares, and as such, most shareholders do not have enough money invested
in the Company to make the Company Management responsive and accountable to
them. This restriction also gives an unfair advantage to those with larger
families. If all of the Shares are not acquired in this purchase and the
Purchasers deem that it will be beneficial to the Company in making the Company
more accountable, responsible, and more competitive, efforts may continue to be
made to acquire all of the Shares in accordance with New Mexico Corporate Law
and as allowed under the Exchange Act. Purchasers have made no decision as to
future dividends as such depends on the financial situation of the Company. In
that connection, if less than all the outstanding Shares are acquired pursuant
to the Offer, the Purchasers may propose a merger or similar combination of the
Company to be formed by the Purchasers, on a basis whereby the remaining share-
holders of the Company other than the Purchasers will receive cash (or debt or
other nonvoting securities) for each of their Shares. Such merger would require
approval by the majority of the Board of Directors and majority of the Shares
voted by the Shareholders. The timing and the details of any such merger or
similar combination will necessarily depend on a variety of factors, such as the
future prospects, asset values and earnings of the Company, tax considerations
<PAGE>
and the number of Shares acquired by the Purchasers pursuant to the Offer.
Shareholders' approval in this Offer is not required and has not been approved
or submitted to the Company for approval.
The courts have held that a corporate transaction caused by a majority
shareholder solely for the purpose of compelling the minority shareholders of a
corporation to relinquish their shares in exchange for a cash payment may be a
violation of a fiduciary duty owed by the former to the latter. The courts have
indicated, however, that such a transaction is permissible if there is a "proper
business purpose" for the transaction, including a bona fide purpose of the
majority stockholder itself, and if the circumstances indicate compliance with
principles of "entire fairness." The Purchasers believe that any proposal for
the acquisition by the Purchasers of any remaining equity interest in the
Company after completion of the Offer would be for bona fide business purposes
and would be entirely fair to the minority stockholders of the Company. There
can be no assurance that such proposal would, if challenged in court, ultimately
be sustained.
Moreover, any merger transaction would have to comply with any applicable
state and federal law operative at such time. Under certain circumstances,
including that such merger transaction is consummated more than one year after
the termination of the Offer or provides for the payment of consideration less
than that paid pursuant to the Offer, compliance by the Purchasers with Rule
13e-3 would be required. Rule 13e-3 requires, among other things, that certain
financial information relating to the fairness of the proposed merger
transaction and the consideration offered to minority stockholders therein be
filed with the SEC and be disclosed to minority stockholders prior to
consummation of the merger transaction.
Although the Purchasers' present intention is as described above, there can
be no assurance as to the terms of any merger or other combination that might
take place, or that any such merger or combination will be proposed by the
Purchasers or be consummated, or that it would be consistent with the foregoing
cases, and the Purchasers reserve the right to act with respect to these matters
in accordance with their judgment. In the event of such a merger or combination,
holders of Shares might have certain rights to dissent and demand appraisal of
their securities under applicable law. Such rights under the statutory
procedures could lead to a judicial determination of the fair value required to
be paid to such dissenting holders for their securities. The value so determined
could be more or less than the purchase price per Share offered pursuant to the
Offer or in any subsequent cash merger. Any such judicial determination of the
fair value of Shares could be based upon consideration other than or in addition
to the market value of the Shares, including asset values and earning capacity.
The Purchasers reserve the right to acquire additional Shares after the
expiration or termination of the Offer through open market or private purchases,
through another tender offer or otherwise, and on terms which may be the same
as, or more or less favorable than, those of the Offer. The Purchasers also
reserve the right to dispose of Shares after expiration or termination of the
Offer in the open market or in private transactions, or otherwise.
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Common Stock, the number of Shares that might otherwise trade
publicly and, depending on the number of Shares so purchased, could adversely
affect the liquidity and market value of the remaining Shares held by the
public.
The Shares are registered under the Exchange Act. Such registration may
be terminated upon application of the Company to the Commission if there are
fewer than 300 record holders of Shares. According to the Company's May 5, 1996
stock list, there were 859 record holders of 13,910.46 Shares. It is the present
intention of the Purchasers to cause the Company to make application to
deregister its Common Stock under the Exchange Act if the Company has fewer than
300 record holders of Shares after the Expiration Date (as defined in Section 3
of this Offer to Purchase) or at any time thereafter. Termination of
registration under the Exchange Act of the Common Stock would reduce the
information required to be furnished by the Company to its shareholders and to
the SEC and would make certain other provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) and the requirement of
furnishing a proxy statement in connection with shareholders' meetings, no
longer applicable to the Company. As a result, certain information concerning
the financial condition, business and officers of the Company would not be
available, which may adversely affect the market for the Shares and shareholders
of the Company who retain any of their Shares may encounter greater difficulties
in selling their Shares than under present circumstances. Furthermore, in the
event of termination of Exchange Act registration, any "affiliate" of the
Company and persons, if any, holding "restricted securities" of the Company may
be deprived of the ability to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended.
As a result of the consummation of the transaction described in the
Agreement and this Offer, the Purchasers may acquire all of the Shares or 100%
of the outstanding Common Stock. Such an interest would represent 100% of the
stockholder's equity as reflected in the most current financial statements of
1995 set forth hereinafter. Purchasers or their extended families in this group
own Shares as follows: John or Jesse Brownfield - 10; John or Keith Brownfield
- -10; John or Marsha Brownfield - 66.5; A.D. Brownfield III - 1.5;
Alva BrownfieldTrust - 19; Jeremy Donaldson - 4; Luke Donaldson - 4; Sarah
Donaldson - 4; J.W. or Dianne Donaldson, Jr. - 100.5; Donaldson Revocable Trust,
Ruth Johnson, Trustee - 56; Johnnie E. or Ruth D. Johnson - 3; Ruth Ann or
Johnnie Johnson - 8; Ruth D. or Kimberly Kay Johnson - 3; John Bryan Johnson -
4
; Jill M. Johnson -3; Sherman Corporation - 36; John Keck - 71; Craig Stevens -
3; Katherine or Kenneth Stevens - 30; Kenneth or Rena Beth Stevens - 49; Joel
Bradley Stevens - 3; Kyle Edward Stevens - 3.
As of the date hereof, the total Shares owned by all the Purchasers in the
aggregate and their extended families or related corporations or trusts in which
they may have an interest constitutes 4% of the outstanding Shares. Each
individual Purchaser has less than 1% of the outstanding shares.
Fairness. The Purchasers believe that the terms of the Offer are fair to
the shareholders of the Company. The Offer is being made to all shareholders
of the Company. There is no established market for the Common Stock and,
therefore, no established market price; however, to Purchasers' knowledge, the
price offered for the Shares is greater than that historically paid to previous
shareholders who had sold Shares and which were the result of arms-length
transactions in light of (a) current sales, (b) historical market prices, and (c
firm offers made by unaffiliated persons. To Purchasers' knowledge, the purchase
price for previous purchases of Shares have historically ranged from $12.00 per
Share to as much as the par value price for $25.00 per Share. These purchases
have included members of the current Board of Directors, as well as others. The
highest sale for the stock is recent sale from Kenny Stevens at $30.00 per Share
but the most recent purchases by John Keck have been for $25.00 per Share of 60
Shares on 4/15/96 and 8 Shares on 5/15/96. Prospective sellers were solicited
by Mr. Keck by inquiry through the Company Management of shareholders desiring
to sell Shares. This Offer is 40% higher than the highest known price ever paid
for Shares. The most recent sale of Shares was at a purchase price of $25.00 per
Share, and as such the Offer would be 100% higher than the most recent
purchases. Dividends have been $1/share for the last five years according to
the Company's Form 10-K for the fiscal year ending June 30, 1995 or 2% of this
Offer. Shareholders who sold Shares to any Purchasers within the six months
preceding the date hereof will be paid an amount equal to $50 minus the sale
price for their Shares to the Purchaser to ensure that such shareholders are
treated fairly. The price of the Offer is less than book value as set forth in
Section 16 hereinafter and the Financial Statements of the Company set forth as
Exhibit B. This is because (1) the last quarter has shown a $5.53 decline in
book value and "Peppers" has not even started its business yet. All or a part
of this may be from acquisition of the Farmer's K-Mart premises for the True
Value hardware. It is anticipated there will be substantial decline in market
share and book value once "Peppers" starts its business; (2) market value is
also decreased by the 240 share restriction and how that affects the control of
the company. Having so little control, so little ability to affect
accountability of the Company and the minimal risk any shareholder has in the
Company significantly decreases value in Purchasers' lay opinions. (3) If
decreased profits continue and if an aggressive management team is not quickly
put in place, if historic suppliers of the Company decrease or eliminate
support, Purchasers believe the Company could be in jeopardy and there is no
assurance liquidation value will exceed this Offer.
Purchasers expect the market share the Company has enjoyed in the past will
be decreased, at least in proportion to a one-third share, in light of "Peppers"
being a major competitor. It is expected additional market share could be lost
from the appeal of a new facility and aggressive competition. The Company could
decrease this loss, which is an additional reason Purchasers feel it is
important to gain control of the Company. Purchasers understand "Peppers" was
constructed in light of projections that the Deming area would benefit by a 5%
increase in population each year. While this increase has not occurred yet,
these projections are encouraging and it is hoped they will in fact occur. With
Aggressive management, the future for the Company and its diversification into
Deming, New Mexico furniture business, Radio Shack, New hardware store, feed,
deli, grocery, and crafts store should limit the effect of the increase in
competition.
This Offer may be consummated even though less than a majority of the
shareholders tender their Shares. No representative has been retained to act on
behalf of the unaffiliated shareholders for the purposes of negotiating the
terms of the Offer or evaluating the fairness of the transaction. Value has not
been determined by appraisal, net book value; going concern value, liquidation
value or other valuation techniques and shareholders are encouraged to explore
all such techniques or hire others to analyze the fairness of this Offer and
their decision of whether to sell or not and at their own cost.
Appraisals. The Purchasers have not received any reports, opinions or
appraisals relating to the type or amount of consideration being offered or the
fairness of the consideration or of the terms of the Offer or otherwise
materially related to the Offer.
3. TERMS OF THE OFFER; TERMINATION; AMENDMENT; NUMBER OF SHARES. Upon
the terms and subject to the conditions set forth in the Offer, the Purchasers
will accept for payment all Shares which have been properly tendered prior to
the Expiration Date, as defined below and not withdrawn in accordance with
Section 5 of this Offer to Purchase. As used in the Offer, the term "Expiration
Date" means 12:00 midnight, New York City time, on July 1, 1996; provided,
however, that if the Purchasers, in their sole discretion, have extended the
period of time for which the Offer is open, the term "Expiration Date" means the
latest time and date to which the Offer is extended. The Purchasers expressly
reserve the right (but will not be obligated), in their sole discretion, at any
time and from time to time, to extend the Offer by giving oral or written notice
of such extension to the Depository and making a public announcement of the
extension. During any such extension, all Shares that have been tendered will
remain subject to the Offer and may be accepted for payment by the Purchasers at
the conclusion of the Offer, except to the extent such Shares may be withdrawn
as set forth in Section 6 of the Offer to Purchase.
If the Purchasers shall decide to increase the consideration offered in
the Offer to holders of Shares and, at the time that notice of such increase is
first published, sent or given to holders of Shares in the manner specified
below, the Offer is scheduled to expire at any time earlier than the expiration
of a period ending on the tenth business day from, and including, the date that
such notice is first so published, sent or given, the Offer will be extended
until the expiration of such period of ten business days.
The Purchasers also expressly reserve the right (i) to terminate the Offer
and not accept for payment or pay for any Shares not theretofore accepted for
payment or paid for, upon the occurrence of any of the conditions specified in
Section 3 of this Offer to Purchase by giving oral or written notice of such
termination to the Depository, and (ii) at any time or from time to time, to
amend the Offer in any respect. Any extension, termination or amendment will be
followed as promptly as practicable by public announcement or other notice to
shareholders thereof, such announcement in the case of an extension to be issued
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Deming Headlight.
A request is being made to the Company for use of an undefined Company's
shareholder list for the purpose of disseminating the Offer to holders of
Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
shareholder list, or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
4. CONDITIONS TO THE OFFER. Notwithstanding any other provisions of the
Offer, the Purchasers will not be required to accept for payment or pay for any
Shares tendered, may amend or terminate the Offer, or may postpone the
acceptance for payment and payment for any Shares tendered, if any of the
following shall occur:
(a) There shall exist any preliminary or permanent injunction or other
order of any domestic or foreign court, legislative body, or governmental
agency or other regulatory or administrative agency or commission (or
there shall be pending before any such body or agency a lawsuit which
would have the effect of ) (i) making illegal, delaying, or otherwise
directly or indirectly restraining or prohibiting the making of the Offer,
the acceptance for payment of, or payment for any Shares by Purchasers (or
any of their affiliates), or the consummation of the Merger, (ii)
prohibiting or restricting the ownership or operation by the Purchasers
(or any of their affiliates) of any material portion of the Company's
business or assets, or compelling the Purchasers ( or any of their
affiliates) to dispose of or hold, separate all or any material portion of
the Company's business or assets as a result of the Offer or the Merger,
(iii) imposing material limitations on the ability of the Purchasers
effectively to exercise full rights of ownership of the Shares, (iv)
imposing any limitations on the ability of the Purchasers or any of their
affiliates effectively to control in any material respect the business and
operations of the Company, (v) which otherwise is reasonably likely to
materially adversely affect the Company, or (iv) which causes a material
diminution in the benefits to be derived by the Purchasers as a result of
the Offer or the Merger; or
(b) any statute, rule, regulation, or order shall be enacted,
promulgated, entered, or deemed applicable to the Offer or the Merger, or
any other action shall have been taken, by any domestic or foreign
government or governmental authority or by any court, domestic or foreign,
which, in the sole judgment of the Purchasers is likely, directly or
indirectly, to result in any of the consequences referenced to in clauses
(i) through (vi) of subsection (a) above; or
(c) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, financial condition,
operations, results of operations, or prospects of the Company which in
the sole judgment of the Purchasers is, or is likely to be, materially
adverse to the Company, or the Purchasers shall become aware of any fact
(including), but not limited to, any such change or developmental value in
the sole judgment of the Purchasers has or is likely to have materially
adverse significance with respect to the Company; or
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any United States stock
exchange, (ii) the declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (iii) the
commencement of a war, armed hostilities, or other international or
national calamity materially affecting the United States, (iv) any
limitation by any governmental authority on, or any other event which is
reasonably likely to affect the extension of credit by banks or other
lending institutions, or (v) in the case of any of the foregoing existing
at the time of the Offer, any material acceleration thereof; or
(e) other than the Merger, the Company shall have authorized,
recommended, or proposed, or shall have announced an intention to
authorize, recommend, or propose, or shall have entered into an agreement
or agreement in principle with respect to, any merger, consolidation, or
business combination, any acquisition or disposition of a material amount
of stocks or securities, or any material change in its capitalization;
which in the sole judgment of the Purchasers with respect to each and every
matter referred to in clauses (a) through (e) above and regardless of the
circumstances (including any action or inaction by the Purchasers) giving rise
to any such condition, makes it inadvisable to proceed with the Offer or the
acceptance for payment for the Shares or the Merger.
The foregoing conditions are for the sole benefit of the Purchasers and may
be asserted regardless of the circumstances giving rise to any such conditions
(including action or inaction to Purchasers).
Such termination may be effected by the Purchasers by giving oral or written
notice of termination to the Depository. The Purchasers retain the right to
extend the period during which the Offer is open, and subject to withdrawal
rights, retain all tendered Shares through the expiration of the Offer.
Purchasers may waive any of the conditions of the Offer, in whole or in part, to
the extent permitted by law, from time to time in their sole discretion and
accept for payment all tendered Shares and not extend the Offer. The failure of
the Purchasers at any time to exercise any of the foregoing rights shall not be
deemed a waiver of such right and each such right shall be deemed an ongoing
right which may be asserted at any time or from time to time. Any determination
by the Purchasers concerning the events described in this Section 4 shall be
final and binding on all parties. Any extension, termination, or amendment of
the Offer will be followed as promptly as practicable by public announcement
thereof.
In a public release, the SEC has stated that in its view an Offer must
remain open for a minimum period of time following a material change in the
terms of the Offer, and that the waiver of a condition is a material change in
the terms of the Offer. The release states that an Offer should remain open for
a minimum of five business days from the date a material change is first
published, sent, or given to shareholders, and that if material changes are made
with respect to information not materially less significant than the offer price
and the number of Shares being sought, a minimum of ten days may be required to
allow adequate dissemination and investor response.
5. PROCEDURE FOR TENDERING SHARES. For Shares to be properly tendered
pursuant to the Offer, a properly completed and duly executed (1) Letter Of
Transmittal, including irrevocable proxies (or facsimile thereof), and (2)
properly signing the back of the Stock Certificate(s) for negotiation to
Purchasers must be received by the Depository at Mimbres Valley Abstract and
Title Co., 210 E. Poplar, Deming, New Mexico 88031 by the Expiration Date.
Either the certificates for such Shares must be delivered to the Depository
along with the Letter of Transmittal, or the tendering shareholder must comply
with the guaranteed delivery procedure set forth below. It is recommended you
also sign (3) the W-9 form as to withholding as set forth hereinafter.
Withholding. Under the backup withholding rules, unless an exception
applies under the applicable law and regulations, the Depository will be
required to withhold, and will withhold, thirty-one percent (31%) of the gross
proceeds paid to a shareholder or other payee pursuant to the Offer unless the
shareholder or other payee provides his tax identification number (employer
identification number or social security number) and certifies that such number
is correct. Therefore, unless such an exception exists and is proved in a manner
satisfactory to the Purchasers and the Depository, each tendering shareholder
should complete and sign the main signature form, and, if applicable, each other
payee should complete and sign the Substitute Form W-9 included as part of the
Letter of Transmittal, so as to provide the information and certification
necessary to avoid backup withholding.
Guarantee of Signatures. No signature guarantee is required (i) if the
Letter of Transmittal is signed by the registered holder of the Shares tendered
therewith, payment is to be made directly to such registered holder and
certificates representing Shares not tendered or not purchased are to be issued
in the name of and delivered to such registered holder, or (ii) if such Shares
are tendered for the account of a member firm of any registered national
securities exchange in the United States or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office,
branch or agency in the United States (each of the foregoing being herein called
an "Eligible Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution.
Guarantee of Delivery. If a shareholder desires to tender Shares pursuant
to the Offer and the certificates representing such Shares are not immediately
available or time will not permit all of the above documents to reach the
Depository prior to the Expiration Date, such Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
(a) Such tenders are made by or through an Eligible Institution;
(b) A properly completed Notice of Guaranteed Delivery
substantially in the form made available by the Purchasers is
received by the Depository as provided below prior to the
Expiration Date; and
(c) The certificates for all tendered Shares and a properly
completed and duly executed Letter of Transmittal or facsimile
thereof and any other documents required by the Letter of
Transmittal are received by the Depository within eight
business days after the date of execution of such Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or sent by
written, telegraphic, or facsimile transmission to the Depository and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice.
Other Matters. In all cases, payment for Shares tendered and purchased
pursuant to the Offer will be made only after timely deposit with the Depository
of the certificates for all tendered Shares, a properly completed and duly
executed Letter of Transmittal, and all other required documents, all in proper
form. The method of delivery of all required documents is at the election and
risk of the shareholder. Registered mail, return receipt requested, and
properly insured is recommended.
The tender of Shares pursuant to any of the procedures described above will
constitute a binding agreement between the tendering shareholder and the
Purchasers upon the terms and subject to the conditions of the Offer. By
executing a Letter of Transmittal, a tendering shareholder irrevocably appoints
the Purchasers or their designees as their proxies, in the manner set forth in
the Letter of Transmittal, to the full extent of such shareholder's rights with
respect to the Shares tendered by such shareholder and purchased by the
Purchasers prior to the time of any shareholder vote or other action and with
respect to any and all other Shares issued or issuable in respect of such Shares
on or after June 3, 1996. Such appointment will be effective when, and only to
the extent that, the Purchasers purchase and pay for such Shares. Upon such
purchase and payment, all prior proxies given by such shareholder with respect
to such purchased Shares will be revoked and no subsequent proxies may be given.
The Purchasers or their designees will, with respect to such purchased Shares,
be empowered to exercise all voting and other rights of such shareholder as
they, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of the Company's shareholders, by written consent or
otherwise.
All questions as to the validity, form, eligibility (including time of
receipt) of acceptance of any tender of Shares will be determined by the
Purchasers, in their sole discretion, which determination shall be final and
binding. The Purchasers reserve the absolute right to reject any or all tenders
of any particular Shares if the tenders are not in the appropriate form or if
the acceptance of or payment for such Shares would, in the opinion of the
Purchasers' counsel, be unlawful. The Purchasers also reserve the right to
waive any of the conditions of the Offer or any defect in the tender of any
particular Shares, the Purchasers' interpretation of the terms and conditions of
the Offer (including the Letter of Transmittal and the instruction thereto) will
be final and binding. No tender of Shares will be deemed to have been validly
made until all defects and irregularities have been cured or waived to the
satisfaction of the Purchasers. Neither the Purchasers nor the Depository shall
be under any duty to give notification of any defects or irregularities in
tenders, nor will either of them incur any liability for failure to give such
notification.
A valid tender of Shares pursuant to any of the procedures described above
will constitute the tendering shareholders' acceptance of the terms and
conditions of the Offer. The Purchasers' acceptance for payment of Shares
pursuant to the Offer will constitute a binding agreement between the tendering
shareholder and the Purchasers, upon the terms and subject to the conditions of
the Offer.
6. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section,
tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth herein at any time prior to the
Expiration Date and unless theretofore accounted for payment and paid for by the
Purchasers as provided herein (or this Offer is otherwise extended), may also be
withdrawn at any time after August 2, 1996. In addition, if another tender
offer for some or all of the Shares is made (other than by the Company), Shares
not yet accepted for payment pursuant to Section 6 of this Offer to Purchase,
may be withdrawn on the date of, and for ten business days after, the
commencement (other than by public announcement) of such other tender offer,
provided that the Purchasers have received notice or otherwise have knowledge of
the commencement of such other tender offer. For the purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday,
and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time. If the Purchasers extend the Offer, are delayed in their purchase
of Shares, or are unable to purchase Shares for any reason, then, without
prejudice to the Purchasers' rights under Sections 2 and 3, tendered Shares may
be retained by the Depository on behalf of the Purchasers and may not be
withdrawn except to the extent that tendering shareholders are entitled to
withdrawal rights as set forth in this Section 6.
To be effective, a written, telegraphic, or facsimile transmission notice
of withdrawal must be timely received by the Depository at its address specified
at the end of this Offer. Any notice of withdrawal must specify the name of the
person who tendered the Shares, the number of such Shares to be withdrawn, and
the name of the registered holder(s), if different from the name of the person
who tendered the Shares. If certificates have been delivered to the Depository,
the serial numbers shown on the particular certificate(s) evidencing the Shares
to be withdrawn and a signed notice of withdrawal with such signature guaranteed
by an Eligible Institution (except in the case of Shares tendered by an Eligible
Institution) must be submitted prior to the physical release of the
certificate(s) for the Shares to be withdrawn. All questions as to the form and
validity (including time of receipt) of such notices of withdrawal will be
determined by the Purchasers, and their determination shall be final and
binding. All questions as to the validity, form, eligibility (including time of
receipt) of acceptance of any tender of Shares will be determined by the
Purchasers, in their sole discretion, which determination shall be final and
binding. None of the Purchasers, or any other person will be under any duty to
give notification of any defects or irregularities in any notes of withdrawal or
incur any liability for failure to give any such notification. Any Shares
properly withdrawn will be deemed not validly tendered for purposes of the
Offer, however, withdrawn Shares may be re-tendered by following any of the
procedures described in Section 4 of the Offer to Purchase at any subsequent
time prior to the Expiration Date.
7. ACCEPTANCE OF TENDERED SHARES; PAYMENT OF PURCHASE PRICE. Upon the
terms and subject to the conditions of the Offer the Purchasers will purchase,
by accepting for payment and will pay for, Shares properly tendered and not
withdrawn by the Expiration Date, as soon as practicable after the latest of:
(i) the Expiration Date, or (ii) with respect to any Shares not theretofore
accepted for payment as provided herein, the expiration of any additional
withdrawal period resulting from the commencement of a tender offer for Shares
by another bidder (other than by the Company) as described in Section 6 of this
Offer to Purchase. The acceptance for purchase of, and payment for, tendered
Shares may be delayed or prevented as a result of, among other things,
proceedings instituted under the takeover statutes of various states or any
other legal proceedings that may arise in connection with the Offer.
For purposes of the Offer, the Purchasers shall be deemed to have accepted
for payment (and thereby purchased) Shares properly tendered to the Purchaser
and not withdrawn if, as, and when the Purchasers give oral or written notice to
the Depository of the Purchasers' acceptance of such Shares for payment pursuant
to the Offer. Payment for Shares accepted for payment pursuant to the Offer
will be made through the Depository, which will act as agent for the tendering
shareholders for the purposes of receiving payment from the Purchasers. Under
no circumstances will interest be paid. If the Purchasers are delayed in its
acceptance for payment of, or payment for, Shares, or are unable to accept for
payment or pay for Shares pursuant to the Offer for any reason, then, without
prejudice to the Purchasers' rights pursuant to the Offer (including without
limitation, as set forth in "The Offer--Section 4. Conditions to the Offer"),
the Depository may nevertheless, on behalf of the Purchasers retain tendered
Shares subject to withdrawal rights described in "The Offer--Section 6.
Withdrawal Rights". The Purchasers confirm that such reservation of the right
to delay payment for Shares which they have accepted for payment ins limited by
Rule 14e-1(e) under the Exchange Act which requires any persons making a tender
offer to pay the consideration offered or return the tendered securities
promptly after the termination or withdrawal of a tender offer.
If any tendered Shares are not accepted for payment or paid for pursuant
to the terms and subject to the conditions of the Offer for any reason, or if
Stock Certificates submitted represent more Shares than are tendered, Stock
Certificates for such unpurchased or untendered Shares will be returned, without
expense to the tendering shareholder as promptly as practicable after the
expiration, termination, or withdrawal of the Offer.
If, prior to the Expiration Date, the Purchasers shall increase the
consideration offered to shareholders pursuant to the Offer, such increased
consideration shall be paid to all shareholders whose Shares have previously
been accepted for payment pursuant to the Offer.
8. TAX CONSEQUENCES. Sales of Shares by shareholders of the Company
pursuant to the Offer will be taxable transactions for federal income tax
purposes and may also be taxable transactions under applicable state and local
laws. For federal income tax purposes, gain or loss resulting from such a sale
will generally be a capital gain or loss if the tendered Shares are a capital
asset in the hands of the tendering stockholder. Any such capital gain or loss
will be long-term or short-term depending upon whether the Shares have been held
for more than six months at the time of the sale. Because the tax consequences
of acceptance of the Offer may vary depending upon the particular circumstances
of each shareholder, each shareholder of the Company is urged to consult his or
her own tax advisor as to the tax consequences of accepting the Offer.
9. PURPOSE OF THE TENDER OFFER; PRIOR AGREEMENTS; PLANS OF THE PURCHASERS.
The Purchasers are engaged in this Offer in order to obtain control of the
Company to try and make this Company more efficient and more competitive in an
increasingly competitive environment. A new group of stores named "Peppers" is
being constructed and a Furr's grocery store is pursuing significant marketing
tactics. Substantial risk is perceived by the Purchasers that if they do not
take action and use the substantial expertise of Kenny Stevens who has been
critical in building the Company in retaining the trade relationships built by
Kenny Stevens over the last 15 years; and implement more competitive strategies.
Substantial market share may be lost which may adversely impact profits,
jeopardize loans to the Company, decrease the employment of over 200 employees
in the community and limit the services provided to the community by the
Company.
Conditions to the Agreement. The Purchasers agreed to offer to acquire all
of the outstanding Common Stock through a tender offer or by other means upon
which the Shareholders of the Company and the Purchasers would agree. It was
determined that such acquisition would take the form of a tender offer pursuant
to Section 14(d) of the Exchange Act and Rule 13e-3, and this Offer is being
made pursuant to and in order to comply with the Agreement. Pursuant to the
Agreement, the price to be paid for Shares acquired in the tender offer is
$50.00 per share. All Purchasers' will be soliciting and recommending the sale
to them of all Shares without any rights to compensation beyond reimbursement
for expenses incurred.
Plans of the Purchasers. The plans of the Purchasers will be to acquire
a sufficient number of Shares to elect at least a majority of the Directors of
the Company and then to modify the Company's Articles of Incorporation and
Bylaws to allow ownership of shares without restrictions of the number of shares
that can be owned by any one shareholder. The Purchasers believe that this
change will result in more accountability for the Company Management, obtain
increased professional advice and experience on the Board, and rehire Kenny
Stevens to manage the Company. Purchasers have significant fear that many of
the contacts that Kenny has made over the past years will be put in jeopardy
with Kenny's resignation, and Kenny has agreed to take the position of Manager
if this Offer is effective in gaining majority control of the Board of Directors
so the Company can implement the changes needed to make the Company efficient
and more competitive, including decreasing the number of Directors, increasing
the number of shares an individual can own to an unlimited number, implementing
cumulative voting to protect the interest of minority shareholders, replacing
such directors as necessary to effectuate this plan, and considering other legal
forms of operation for the Company that might be necessary should business and
economic forces require such for the Company to be more efficient and
competitive.
If less than all of the outstanding Shares are acquired pursuant to the
Offer, the Purchasers may propose a merger or similar combination of the Company
with a company to be formed by the Purchasers on a basis whereby the remaining
shareholders of the Company other than the Purchasers will receive cash (or debt
or other nonvoting securities) for their Shares or other action including filing
suit to protect the interests of the Company and its shareholders. If an
insufficient number of Shares is obtained to gain sufficient control of the
Company to allay Purchasers' fears as to the future of the Company, a
stockholder derivative action may also be filed against the Company for the
perceived harm caused to the shareholders for actions taken by the Directors.
The services of Gene Rush of Mimbres Valley Abstract and Title Company and
Frederick H. Sherman, both of Deming, New Mexico with the assistance of Jenkens
& Gilchrist firm in Dallas, Texas have been employed to make recommendations and
prepare the documents for this tender offer. Any merger or change in the
Articles of Incorporation requires the affirmative vote of the majority of the
Shares owned.
Beneficial Ownership of the Shares. If the Offer is consummated, each of
the Purchasers will be the legal owners of up to 240 Shares of Common Stock.
Certain Purchasers will provide other Purchasers (the "Beneficial Owners") with
proxies and powers of attorney so that the Beneficial Owners will have the power
to vote and dispose of said Shares. Should the Articles of Incorporation and
Bylaws be amended to allow unlimited ownership of the Shares by any shareholder,
each of the Beneficial Owners herein will be able to acquire Shares from the
members of their families as agreed upon, ie: each Beneficial Owner with each
member of his family or extended family. The Company currently has Articles of
Incorporation and Bylaws that restrict maximum ownership of any one individual
to 240 Shares which requirement will be complied with by the Beneficial Owners
and their family and extended family consistent with "Caveat Emptor"; however,
this restriction is not believed to be in the best interests of the Company or
its shareholders as the average stock ownership by any one shareholder is 16
shares. At a recent price of $25.00 per share, the maximum value of the Shares
of any one shareholder would be $400.00 on average, which is so small that very
few shareholders have enough financial interest in the Company to be at any
material risk to take an active interest in the affairs of the Company, even
when, as now, the Company faces adverse consequences due to the recent change in
Management when Kenny Steven resigned and due to the increased competition
within the Community. These potential difficulties may be substantially helped
by fewer owners who would have more at risk and who will gain or lose through
the commitment of their time and expertise to the success of the Company
commensurate with the risk position they have with the Company. There is no
guarantee or assurances that such will occur, however, it is believed that this
would generally be the consequence of increased ownership of the Shares by a
shareholder group, such as the Purchasers. The Purchasers herein have entered
into an Agreement for sharing the expenses of this Offer, implementing decisions
to make the Company more efficient, rehiring Kenny Stevens as manager if he will
accept such employment, allowing, if permitted by the Articles of Incorporation
and the Bylaws, Beneficial Owners to buy a 1/6 share of all Shares purchased in
the Offer and to restrict the group of Purchasers from selling their shares for
a period of two years to implement stability in the Company and to allow the
restructuring of the Board, Articles of Incorporation, Bylaws, or other actions
that need to be taken to make the Company more efficient in this new, more
competitive environment. Each of the Purchasers have also agreed to mediate or
arbitrate all the disputes they have with each other and to become equal owners
of shares to avoid as many power or control problems as possible so that all
parties are focused on enhancing the performance of the Company and for the
appointment of a power of attorney to complete the Offer as agreed.
Although it has not been determined at this time how many Shares each
individual Purchaser will acquire, it is the goal of the Purchasers herein that
they will acquire, in the aggregate, at least a controlling interest in the
Company so that they can implement the changes in the Articles of Incorporation
and Bylaws and in the business that will cause Kenny Stevens to agree to come
back as manager for the Company and otherwise make this Company more efficient
and economically viable. While beneficial ownership of each of the Beneficial
Owners may be as large as 16 2/3%, legal ownership in the family group will
comply with the Articles of Incorporation and Bylaws for owning a maximum of 240
shares or 1.2% of the total Common Stock of the Company until the Articles of
Incorporation and Bylaws can be changed. Until the Articles of Incorporation
and Bylaws are changed, extended family members will be purchasing up to 100% of
the Shares to be purchased under the restriction.
10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The Purchasers
will obtain the funds for the purchase of the Shares from personal funds on hand
and when insufficient, using their personal credit to borrow the funds necessary
for the purchase of Shares here and in payment of all expenses. John Keck,
through Alamo Ranch Co. has a revolving line of credit through Wells Fargo of
Bakersfield, California, sufficient to purchase all the shares tendered. The
line of credit is at National Prime requiring monthly payments of interest only.
The loan is made in the ordinary course of business. Any Beneficial Owner
herein that is not able to purchase the Shares for some reason, remaining
Purchasers may buy the additional Shares for legal ownership with family
members, subject to the right to purchase their pro-rata portion of the Shares
for a period of 60 days, except for Kenny who will have up to five years to
purchase, will equally share in the costs and expenses and Shares purchased, to
implement the plan as set forth herein. Any Purchaser who fails to purchase
their pro-rata number of Shares will continue to have a fiduciary obligation to
the Purchasers to implement the plan. The sale of Shares will be subject to a
first right of refusal by other Purchasers after the expiration of the two-year
period.
11. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a New
Mexico corporation with its principal offices located at 811 S. Platinum,
Deming, New Mexico. This is a retail, grocery, hardware, Ben Franklin
franchise, Radio Shack franchise, feed store, new furniture store, convenience
store operation with gas and leasing facilities for other businesses in Deming.
The Company is subject to the informational filing requirements of the Exchange
Act and in accordance therewith is obligated to file periodic reports and other
information with the SEC. Information as of particular dates concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of its securities and any material interest of such
persons in transactions with the Company is required to be disclosed in proxy
statements distributed to the Company's stockholders and filed with the SEC.
Such reports, proxy statements and other information filed by the Company may be
inspected at the SEC's office in the Public Reference room, 450 Fifth Street,
N.W., Washington, D.C., and should also be available for inspection at the
regional offices of the SEC in Chicago, Los Angeles and New York, and copies'
customary charges at 450 Fifth Street, N.W., Washington, D.C. 20549
Shareholders are urged to review the publicly available information
concerning the Company before acting on the Offer, including the Company's 10-K,
the Company's Proxy Statement dated September 1995 and every September of each
year to comply with SEC rules relating to proxy statements for use at its Annual
Meeting of Shareholders held the third Wednesday of October of each year and its
10-Q's, each of which is on file with the Commission. The Company's auditor,
Harold Morrow, J.W. Donaldson, Jr. and John Brownfield, as current Directors,
and Kenny Stevens, the former manager of the Company, believe the statements
contained herein are true to the best of their knowledge as to their accuracy,
completeness, and disclosure. The Company has available for any shareholder a
list of all shareholders, dates they purchased Shares, Bylaws, Articles of
Incorporation, minutes of each meeting, financial information which should be
examined by any shareholder desiring to sell herein at the Company location at
811 S. Platinum. All material information should be set forth in the minutes,
financial reports, data, and information filed with the Company and available to
shareholders as required by New Mexico statutes.
12. IDENTITY AND BACKGROUND OF THE BENEFICIAL OWNERS AND PURCHASERS. The
Purchasers are as follows:
(1) John Brownfield. Mr. Brownfield currently serves as Director of the
Company and has been a director since 1980. Mr. Brownfield's primary business
is in ranching for himself for Goodsight, Inc., HC 66, Box 23, Deming, New
Mexico for the last 15 years. He is a franchisee of The Medicine Shop, Inc. out
of St. Louis, Missouri and has an interest in Sun Products, Inc., a New Mexico
corporation. Mr. Brownfield resides at HC 66, Box 28, Deming, New Mexico.
(2) Harold Morrow. Mr. Morrow is a owner in the accounting firm of Morrow
& Co., which currently serves as the auditor for the Company and has been since
June 30, 1985 after taking over the position that was vacated by Richard
Patterson, CPA. Mr. Morrow resides at 1319 Shelly Drive, Deming, New Mexico.
He is a Certified Public Accountant with Morrow and Co. at 800 W. Florida since
1984. He was a director of Home Federal Savings Bank & Loan, 520 S. Gold from
1990-1995. He is a Vice-President of Sun Data Conversions of Dallas, Texas.
(3) John Keck. Mr. Keck's principal occupation is in agriculture. He is
the President of Alamo Ranch Company, an Arizona corporation at 83-555 Airport
Blvd. Thermal, California 92274 with properties in California, Arizona, and
Luna County, New Mexico. He has been the President of the corporation since
1968. Alamo Ranch Company is a 50% owner of Valley Grain Growers, Inc. of
McNeal, Arizona and President of Hadley Dates Gardens, Inc. 83-555 Airport Blvd,
a California corporation of Thermal, California. Mr. Keck is a shareholder in
Farmer's Inc. with 71 shares.
(4) Kenneth Stevens. Mr. Stevens's principal occupation is in retail
management. Mr. Stevens was the general manager for the Company since 1981 and
Secretary to the Board since 1991 until March 8, 1996 when he resigned. He is
currently working with Farmer's, Inc. in an advisory capacity until the end of
June, 1996. He is currently also employed by Sun Products, Inc., Box 2848,
Deming, New Mexico where he has worked for seven years and is a half owner in a
commercial car wash enterprise in Deming, New Mexico. Mr. Stevens resides at
Rt. 2, Box 1285, East Dona Ana Road in Deming, New Mexico.
(5) James Walter Donaldson, II. Mr. Donaldson's principal occupation is
in agriculture, primarily in farming. He is currently the President and owner
of J.W. Donaldson Company, Rt 2, box 129, Deming, New Mexico from 1973 to the
present time. He is the former manager of Sun Products, a chile dehydrating
plant, P.O. Box 2848, Deming, New Mexico from January 1, 1991 - March 30, 1995.
He has been a director of the Company since 1979 and is currently a board member
and Treasurer of the Company. Mr. Donaldson resides at address is Rt. 2, Box
129, Deming, New Mexico.
(6) Frederick H. Sherman. Mr. Sherman is an attorney practicing law since
1973 and is the President and owner of Sherman and Sherman, P.C., a New Mexico
corporation. He is Secretary of Sherman Corporation, President of Sherman
Farms, Inc., each New Mexico corporations primarily involved with investments of
Deming, New Mexico, and is President of Sherman Family Charitable Foundation, a
501(c)3 non-profit New Mexico corporation all located at 210 S. Silver, Deming,
New Mexico. Mr. Sherman resides at 315 S. Tin, Deming, New Mexico. Sherman
Corporation owns 36 Shares of Farmer's Inc.
See Exhibit A of this tender offer.
All Purchasers are citizens of the United States.
13. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. On approximately
the 24th day of April, 1996, John Keck contacted Kenny Stevens and then
Frederick Sherman to discuss concerns he had concerning matters and issues, that
in his views were materially affecting the viability of the Company in this
increasingly competitive market that he felt were harmful to shareholders
interests and to the customers of Farmer's Inc. Purchasers John Keck and
Frederick Sherman came to the conclusion that it is fundamentally important for
the continued success of this Company for Kenny Stevens to be manager of the
Company and for substantial changes as outlined above to take place for this
Company to be strong. Since that time, there have been contacts with Kenny
Stevens, Harold Morrow, John Brownfield, and J.W. Donaldson, who are directors
with the Company as to ways in which the Purchasers could make this Company more
competitive. It was concluded that the best way to make the Company more
competitive was to form a group to make a tender offer for the remaining
outstanding Shares of the Company and to gain control of the Company. After
control has been obtained, the Purchasers could seek control of a majority of
seats on the Board of Directors, elect Kenny Stevens to the position of manager,
and change the provision in the Articles of Incorporation and the Bylaws that
restricts ownership by any shareholder by 240 shares if approved by a majority
of Shares held by shareholders. There have been no contacts, negotiations or
transactions until this offering between the Purchasers and the Company or any
of its other directors, executive officers or affiliates, which are required to
be disclosed pursuant to the rules and regulations of the SEC and no
recommendations by the Company made with respect to this Offer.
14. SOLICITATION AND OTHER FEES AND EXPENSES. The Purchasers will
not pay any fees or commissions to any broker, dealer, or other person for
soliciting tenders of Shares pursuant to the Offer. If the Purchasers are
successful with respect to the Offer and the results of this success are
beneficial to the Company, the Purchasers will request the Board of Directors to
reimburse the Purchasers for certain of their expenses in conferring such
benefit on the Company. Such expenses that are not reimbursed by the Company
will be borne by the Purchasers. The expenses are estimated to be as follows:
SEC Filing Fees $ 134.32
Legal Fees 50,000.00 (estimate of Dallas office)
Printing Costs 1,600.00
Edgar filing 1,000.00
Depository Fees 2,500.00
Miscellaneous 3,500.00
Total $ 58,734.32
15. MARKET FOR STOCK; DIVIDENDS. According to the Company's 10-Q, there
were 13,910.46 Shares issued and outstanding on June 30, 1995 and currently.
According to the Company's 10-K, the Company had 859 shareholders of record as
of May 15, 1996. For the last five years, dividends have been $1/year according
to the 10-K. There is no established market in which the Common Stock is
traded. To the best knowledge of management of the Company, the range of sales
prices of the Shares of the Company since 1994 are as follows:
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
1994 $18 $15 $15-$25
1995 $15 $25 $25 $25
1996 $18 - $30 $25
16. DIRECTORS' POSITION. It is believed that the board of directors
position will be to support this tender offer as it is the Purchasers' desire to
use this tender offer to advance the interests of the Company, to make it more
efficient, and to eliminate inefficiencies caused by the present structure.
Since the Purchase Price is $50.00 per Share and the directors have purchased
shares for themselves or their extended family members at $25.00 or less, as
fiduciaries of the Company, it is believed that they also will agree that this
Purchase Offer represents fair value in light of all relevant market or other
factors.
17. FINANCIAL STATEMENTS. Audited financial statements of the Company as
of and for the two years ended June 30, 1995, reviewed balance sheets and
comparative year to year to day income statements, and statements of changes in
financial position, with related information for calculating earnings per share
amounts in the most recent quarterly report filed pursuant to the Act as of and
for the period ended March 31, 1996, the most recent quarterly report filed
pursuant to the Act would include the information concerning the Company's ratio
of earnings to expenses and value per share are attached to the Offer of
Purchase as Exhibit A. As of June 30, 1994, Net Earnings were $242,848.00; fixed
costs --$132,881.00; amortization--$470.00; interest--$132,411.00 for a ratio of
2.3 to 1 and a book value per share of $173.98. For the three month period
ended September 30, 1994, Net Earnings were $136,906.00; fixed costs--
$28,094.00; amortization--$117.00; interest--$27,977 for a ratio of 5.87 to 1
and a book value per share of $183.92. For the six months ended December 31,
1994, earnings were 136,906; fixed costs--54,131, amortization--373, interest--
53,758 for a ratio of 5.53 to 1 and a book value per share of 191.78. For the
nine months ended March 31, 1995, Net Earnings were $481,144.00; fixed costs--
$80,943.00; amortization--$490.00; interest--$80,453.00 for a ratio of 6.94 to
1
and a book value per share of $208.91. For the year ended of June 30, 1995, Net
Earnings were $425,420.00; fixed costs--$111,815.00; amortization--$470.00;
interest--$111,345.00 for a ratio of 4.80 to 1 and a book value per share of
$203.86. For the three months ended September 30, 1995, Net Earnings were
$133,025.00; fixed costs--$25,969.00; amortization--$117.00; interest--
$25,852.00 for a ratio of 6.12 to 1 and a book value per share of $213.52. For
the six months ended December 31, 1995, Net Earnings were $229,898.00; fixed
costs--$57,499.00; amortization--$373.00; interest--$57,126.00 for a ratio of 5
to 1 and a book value per share of $220.55. For the nine months ended March 31,
1996, Net Earnings were $153,656.00; fixed costs--$114,228.00; amortization--
$490.00; interest--$113,738.00 for a ratio of 2.35 to 1 and a book value per
share of $215.02.
18. MISCELLANEOUS. The Offer is being made to all shareholders. The
Purchasers are not aware of any jurisdiction in which the making of the Offer is
prohibited by administrative or judicial action pursuant to statute. The
Purchasers will make a good faith effort to comply with any such statute or seek
to have such statute declared inapplicable to the Offer. If, after such good
faith effort, the Purchasers cannot comply with any applicable statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the shareholders in such jurisdiction. In those jurisdictions where securities,
blue sky, or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Purchasers by one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Purchasers not contained in this Offer, and, if
given or made, such information or representation must not be relied upon as
having been authorized.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, the Purchasers have filed with the SEC the Schedule 14D-1 together
with exhibits with respect to the Offer. The Purchasers also have filed with
the SEC the Schedule 13E-3, together with exhibits, with respect to the Offer.
These Schedules, including exhibits and any amendments to such Schedules, which
furnish certain additional information with respect to the Offer, may be
examined and copies may be obtained at the same places and in the same manner as
set forth with respect to information concerning the Company in "The Offer--
Section 11, "Certain Information Concerning the Company" (except that they will
not be available at the regional offices of the SEC).
The Purchasers are not aware of any license or other regulatory permit that
appears to be material to the business of the Purchasers and that is likely to
be adversely affected by the Purchasers' acquisition of Shares pursuant to the
Offer of any approval or other action by any domestic or foreign governmental or
administrative agency that would be required prior to the acquisition of Shares
by the Purchasers pursuant to the Offer. Should any approval or other action be
required, the Purchasers presently intend, but are not obligated, to seek such
approval or take such action. The Purchaser does not presently intend to delay
the purchase of Shares pursuant to the Offer pending the outcome of any such
action or receipt of such approval (subject to the Purchasers' right to decline
to purchase Shares if any of the conditions in "The Offer--Section 4.
Conditions to the Offer" shall not have been satisfied (or waived). There can
be no assurance that any such approval or action, if needed, would be obtained,
or, if obtained, that it will be obtained without substantial conditions, or
that adverse consequences might not result to the Company's businesses. The
Purchasers' obligations under the Offer are subject to certain conditions, among
them conditions which might not be satisfied if there is a failure to obtain
regulatory approval and such failure were material. See "The Offer--Section 4--
Conditions to the Offer."
A number of states have adopted takeover laws which by their terms are
applicable to attempts to acquire securities of corporations which are
incorporated in such states, or whose business operations have substantial
economic effects in such states, or which have substantial assets, security
holders, employees, principal executive offices, or principal places of business
in such states. To the extent that certain provisions of these state takeover
statutes purport to apply to the Offer, the Purchasers believe that such laws
conflict with federal law and constitute an unconstitutional burden on
interstate commerce. In Edger v. MITE Corporation, the Supreme Court of the
United States (invalidated on constitutional grounds the Illinois Business
Takeover Act, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. In CTS Corp. v.
Dynamics Corp. of America, however, the Supreme Court held that a state may, as
a matter of corporate law and, in particular, as a matter of that part of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiring person from voting on the affairs of a target corporation
without the prior approval of the remaining shareholders, provided that such
disqualification is applicable only under certain conditions, in particular, .
that the corporation has a substantial number of shareholders in the state and
is incorporated there.
The Company was formed under the laws of the State of New Mexico, which
currently has no statute that is similar to that approved in the CTS Corp. case,
and the Purchasers do not expect any such statute to be enacted in New Mexico
during the pendency of the Offer. The Purchasers do not believe any of the
statutes adopted by states in which the Company conducts business, by their
terms apply to the Offer, and the Purchasers have not complied with any state
takeover law.
23
<PAGE>
Exhibit A
Linda C. Keck is the Executive Vice-President of Alamo Ranch. Melinda
E. Dougherty is the Vice-President of Sales of Hadley Date Gardens. Sean
P. Dougherty is the Controller and Vice-President of Alamo Ranch. Sean
P. Dougherty, Jr. and Christopher J. Dougherty are the children of Melinda and
Sean P. Dougherty. Albert P. Keck II is the Vice-President of Alamo Ranch.
Caroline D. Keck is a School teacher at Desert Sands Unified School District
in Indio, California. Alexandra M. Keck and Julianna D. Keck are the children of
Albert P. Keck, II and Caroline D. Keck. Edward K. Saylor is the Manager at
Dillard's Department Store in Phoenix, Arizona. Victoria M. Saylor is a school
teacher at Glendale School District of Glendale, Arizona. Alamo Ranch Co. The
address for each is 83-555 Airport Blvd., Thermal, California 92274
Janie Sherman is an Educational diagnostician with Deming Public Schools for
the last 5 years and wife of Frederick H. Sherman. Ben Sherman resides at
704 S. Zinc, Deming, New Mexico, and is an attorney in Sherman and Sherman
P.C. for over five years, Director Emeritus with First New Mexico Bank in
Deming, Director emeritus with former Home Federal Savings and Loan in Deming,
and the President of Sherman Corporation of Deming, New Mexico. Jerah E.
Sherman and F. Jakub Sherman are the children of Janie Sherman and Frederick H.
Sherman. Kathy Strauss is a Dental Hygienist with Dr. Cordova. David Strauss is
a Student. Amy Strauss and Kristin Strauss are the children of Kathy Strauss
and David Strauss residing at 14255 Telshor, Las Cruces, New Mexico. Ben K.
Sherman is a Dentist and has been for over five years at 300 Stratford, Santa
Monica, California 93454.
John Bryan Johnson resides at 1846 S. Las Palomas, Mesa Arizona 85202. He is
a Pilot and has worked for Market Air since 1995. Jill M. Johnson is an
America West Airliner Reservations and has been for 5 years.
Diane Donaldson works on the farm with her husband, J.W. Donaldson
since approximately 1975. Jeremy Donaldson, Luke Donaldson, and Sara
Donaldson are students. J.W. Donaldson Co. The address for all are Rt. 2, Box
129, Deming, New Mexico. Johnny M. Donaldson and Ruth Ann Johnson have been
farmers for over five years residing at Rt. 2, Box 336, Deming, New Mexico.
Diane W. Morrow is a worker for Morrow & Company, P.A. Ashlee M. Morrow,
Dustin W. Morrow, and Jordan C. Morrow are students and all reside at 1319
Shelly Drive, Deming, New Mexico Morrow & Company, P.A. is at 800 W. Florida in
Deming, New Mexico. Jack F. Morrow and Betty M. Morrow are retired and reside
P.O. 1184, Raton, New Mexico. Patsy T. Merrill Miller is a legal secretary at
Stratvert, Torgerson, 500 Marquette, NW Ste. 1100 Albuquerque, New Mexico. Frank
Merrill is self- employed. They reside at La Costa NE Albuquerque, New Mexico
Marsha M. Brownfield, Keith D. Brownfield, Jesse L. Brownfield all work
for Goodsight, Inc. Marsha has worked there since 1973; Keith and Jesse have
worked there for 15 years. They reside at Rt. 2, Box 28, Deming New Mexico.
Ella Rose MacGibbon resides at 1101 Allen in Deming, New Mexico and is retired.
<PAGE>
Chris and Pam Sanders work at 330 E. Motel Drive, Lordsburg, New Mexico since
1978 and operate The Medicine Shoppe at drugstore in Silver City, 1123 N.
Pope Street, Silver City, New Mexico. Bradley Sanders, Clinton Sanders,
and Cory Sanders are students and reside at Duncan Highway, Lordsburg, New
Mexico.
Joel Bradley Stevens is the Farmer's Inc. Manager at Radio Shack since
February 1996. Kyle Edward Stevens is a Farmer's Inc. Feedstore laborer and has
been for two summers. Beth Stevens is an Office clerk at Farmer's Inc. and has
been for two years. They reside at East Dona Ana Rd., Deming, New Mexico.
Katherine Stevens resides at 1300 S. Platinum, Deming, New Mexico, and is
retired. Craig Elliot Stevens is the Special Events Manager for S.W.
Bottling Co., 3050 Harrelson, Mesilla Park, New Mexico and has been since
1989. Kelly Stevens is the wife of Craig Stevens and mother of Nathaniel
Stevens, a baby, mailing address is East Dona Ana Rd, Deming, New Mexico.
2
<PAGE>
EXHIBIT B
[Letterhead of Morrow & Company]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Mimbres Valley Farmers Association, Inc.
dba Farmers, Inc.
We have audited the accompanying balance sheets of Mimbres Valley Farmers
Association, Inc., dba Farmers, Inc. (a corporation) as of June 30, 1995 and
1994, the related statements of operations and retained earnings and the
statements of cash flows for each of the three years in the period ended June
30, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principals [sic] used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mimbres Valley Farmers
Association, Inc. dba Farmers, Inc. as of June 30, 1995 and 1994, and the
results of their operations and their cash flows for each of the three years
in the period ended June 30, 1995, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplementary information included in the
report (shown on pages 14 and 15) are presented for the purpose of additional
analysis and are not a required part of the financial statements of Mimbres
Valley Farmers Association Inc. dba Farmers Inc. Such information has been
subjected to the auditing procedures applied in the audit of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Morrow & Company
Morrow & Company, CPA's
August 31, 1995
<PAGE>
PAGES 2 THROUGH 13 ARE INTENTIONALLY OMITTED
<PAGE>
Schedule I
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
SCHEDULE OF OTHER INCOME
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
1995 1994 1993
-------- -------- --------
Interest Income $ 13,557 $ 13,779 $16,596
Gain on sale of assets 765 64,954 1,087
Service charges 9,367 8,529 3,676
Gasoline commission 20,306 18,643 24,352
Check cashing income 44,390 50,789 47,041
Rent income
Less: depreciation of $34,292 in
1995, $26,464 in 1994 and
$31,854 in 1993 78,864 69,366 60,426
Insurance recovery -- -- 41,465
-------- -------- --------
$167,249 $226,060 $194,643
======== ======== ========
See accompanying notes and accountants' reports.
14
<PAGE>
Schedule II
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
1995 1994 1993
---------- ---------- ----------
Management Salaries $ 88,603 $ 101,553 $ 92,567
Store Salaries 1,728,530 1,643,950 1,528,292
Office Salaries 98,753 102,868 96,738
Contract Labor 10,110 7,838 3,619
Employee Benefits & Insurance 76,622 80,422 94,994
Payroll Taxes 173,369 169,967 151,770
Other Taxes and Licenses 31,487 31,657 29,836
Depreciation and Amortization 198,652 169,765 133,672
Accounting & Legal 48,630 41,939 36,839
Advertising and Promotion 189,511 133,460 118,902
Bad Debts 1,122 6,157 6,456
Cash Shortage, Net 5,367 15,380 3,695
Computer Processing 1,256 1,221 2,147
Contributions 5,040 5,117 3,588
Credit Card Fees 11,295 8,463 6,907
Directors Fees 5,600 6,500 5,300
Dues and Subscription 5,473 6,139 2,518
Entertainment 3,128 2,097 1,503
Equipment Lease - B/H Lease 83,506 66,024 37,642
Insurance 175,692 169,579 131,487
Inventory Service 9,335 8,425 7,571
Linen Services 2,061 1,943 1,110
Miscellaneous 9,564 3,582 1,367
Postage and Freight 7,256 8,151 9,761
Repairs and Maintenance 127,541 126,253 137,648
Security 22,759 21,305 12,134
Supplies 188,318 198,363 195,227
Travel 20,639 13,337 15,387
Utilities and Telephone 248,087 250,301 242,248
Vehicle Expense 40,241 43,646 32,277
Rent 3,245 3,774 3,650
Merchandise loss 5,431 6,850 7,574
---------- ---------- ----------
TOTAL GENERAL AND
ADMINISTRATION EXPENSES $3,626,223 $3,456,026 $3,154,156
========== ========== ==========
See accompanying notes and accountants' report.
15
<PAGE>
Attachment 1
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
BALANCE SHEETS
JUNE 30, 1995, AND 1994
ASSETS
1995 1994
---- ----
Current Assets:
Cash $ 163,870 $ --
Trade accounts receivable
Less: Allowance for doubtful accounts
of $6,194 in 1995 and $6,194 in 1994 238,849 350,327
Inventories, at cost 2,586,356 2,459,100
Prepaid taxes & expenses 49,122 62,372
Other receivables 34,959 26,641
---------- ----------
Total Current Assets 3,073,156 2,898,440
Property, plant and equipment, at cost:
Buildings and land 2,154,500 2,142,801
Equipment and fixtures 2,320,456 2,106,520
---------- ----------
4,474,956 4,249,321
Less: Accumulated depreciation 2,758,057 2,538,073
---------- ----------
Net property, plant and equipment 1,716,899 1,711,248
Other Assets:
Notes receivable - suppliers 104,730 101,742
Investment in suppliers, at cost 89,220 83,716
Loan origination costs less amortization 4,812 5,283
Franchises 16,500 4,500
---------- ----------
Total Other Assets 215,262 195,241
---------- ----------
TOTAL ASSETS $5,005,317 $4,804,929
========== ==========
See accompanying notes and accountants' report.
15
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
BALANCE SHEETS (CONTINUED)
JUNE 30, 1995, AND 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
1995 1994
---- ----
Current Liabilities:
Cash overdraft $ -- $ 61,112
Accounts payable 760,832 803,749
Notes and mortgages payable
current maturities 266,707 245,477
Interest payable 2,453 3,080
Payroll, sales and property taxes 105,400 107,914
Income taxes payable 119,769 5,725
Accrued payroll 72,139 91,409
--------- ---------
Total Current Liabilities 1,327,300 1,318,466
Notes and mortgages payable, less
current maturities 764,952 966,850
Deferred income taxes 104,656 122,848
--------- ---------
Total Liabilities 2,196,908 2,408,164
Stockholders' Equity:
Capital stock, par value $25 per share;
authorized 20,000 shares, issued 13,910
shares, outstanding 13,776 shares 348,792 348,792
Retained earnings 2,462,967 2,051,323
--------- ---------
2,811,759 2,400,115
Less: Treasury stock, 134 shares,
at cost 3,350 3,350
--------- ---------
Total Stockholders' Equity 2,808,409 2,396,765
--------- ---------
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $5,005,317 $4,804,929
========== ==========
See accompanying notes and accountants' report.
16
<PAGE>
Schedule I
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
SCHEDULE OF OTHER INCOME
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
1995 1994 1993
-------- -------- --------
Interest income $ 13,557 $ 13,779 $ 16,596
Gain on sale of assets 765 64,954 1,087
Service charges 9,367 8,529 3,676
Gasoline commission 20,306 18,643 24,352
Check cashing income 44,390 50,789 47,041
Rent income
Less: depreciation of $34,292 in
1995, $26,464 in 1994 and
$31,854 in 1993 78,864 69,366 60,426
Insurance recovery -- -- 41,465
-------- -------- --------
$167,249 $226,060 $194,643
======== ======== ========
See accompanying notes and accountants' report.
17
<PAGE>
Schedule II
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
1995 1994 1993
---------- ---------- ----------
Management Salaries $ 88,603 $ 101,553 $ 92,567
Store Salaries 1,728,530 1,643,950 1,528,292
Office Salaries 98,753 102,868 96,738
Contract Labor 10,110 7,838 3,619
Employee Benefits & Insurance 76,622 80,422 94,994
Payroll Taxes 173,369 169,967 151,770
Other Taxes and Licenses 31,487 31,657 29,836
Depreciation and Amortization 198,652 169,765 133,672
Accounting & Legal 48,630 41,939 36,839
Advertising and Promotion 189,511 133,460 118,902
Bad Debts 1,122 6,157 6,456
Cash Shortage, Net 5,367 15,380 3,695
Computer Processing 1,256 1,221 2,147
Contributions 5,040 5,117 3,588
Credit Card Fees 11,295 8,463 6,907
Directors Fees 5,600 6,500 5,300
Dues and Subscription 5,473 6,139 2,518
Entertainment 3,128 2,097 1,503
Equipment Lease - B/H Lease 83,506 66,024 37,642
Insurance 175,692 169,579 131,487
Inventory Service 9,335 8,425 7,571
Linen Services 2,061 1,943 1,110
Miscellaneous 9,564 3,582 1,367
Postage and Freight 7,256 8,151 9,761
Repairs and Maintenance 127,541 126,253 137,648
Security 227,759 21,305 12,134
Supplies 188,318 198,363 195,227
Travel 20,639 13,337 15,387
Utilities and Telephone 248,087 250,301 242,248
Vehicle Expense 40,241 43,646 32,277
Rent 3,245 3,774 3,650
Merchandise loss 5,431 6,850 7,574
---------- ---------- ----------
TOTAL GENERAL AND
ADMINISTRATION EXPENSES $3,626,223 $3,456,026 $3,154,156
========== ========== ==========
See accompanying notes and accountants' report.
18
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- --------- ------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Cash received from customers $19,718,270 $18,469,707 $16,903,103
Cash paid to Suppliers (15,593,893) (14,888,592) (13,661,430)
Cash paid for operating
expenses (3,402,598) (3,222,561) (3,053,679)
Miscellaneous income 200,797 187,570 225,410
Interest paid (111,973) (132,722) (140,952)
Income taxes paid (133,325) (119,488) (109,891)
----------- ----------- -----------
Total Cash Provided by (used by)
Operating Activities 677,278 293,914 162,561
Cash Flows From Investing Activities:
Proceeds from sale of assets 765 64,954 1,087
Capital Expenditures (238,125) (164,209) (226,851)
Increase in Notes Receivable (24,190) (45,735) (3,507)
Collections on Notes Receivable 21,922 48,411 12,597
Increase in Stock in Suppliers (5,504) (4,564) (21,115)
Decrease in Stock Suppliers -- 74,878 --
----------- ----------- -----------
Net Cash Provided by (used by)
Investing Activities (245,852) (26,265) (237,789)
Cash Flows From Financing Activities:
Long Term Borrowing 297,035 74,802 260,651
Debt Reduction (477,703) (350,823) (333,483)
Dividends Paid (13,776) (13,776) (13,776)
Cash Overdraft (61,112) 22,868 38,244
Franchise Acquired (12,000) -- --
----------- ----------- ----------
Total Cash Provided by (used by)
Financing Activities (267,556) (267,649) (48,364)
----------- ----------- -----------
Net Increase (Decrease) in Cash 163,870 -- (123,592)
Cash at Beginning of Period -- -- 123,592
----------- ----------- -----------
Cash at End of Period $ 163,870 $ -- $ --
=========== =========== ==========
</TABLE>
19
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
Reconciliation of Net Income to Net Cash
Provided by Operating Activities
1995 1994 1993
---- ---- ----
Net Income $ 425,420 $ 242,848 $ 222,692
--------- --------- ---------
Non Cash Items Included in Net Income:
Depreciation and Amortization 232,944 196,229 165,525
Deferred Income Taxes (18,192) 18,441 15,550
Gain on Sale of Assets (765) (64,954) (1,087)
Changes In:
Accounts Receivable 111,478 (122,380) (52,367)
Inventory (127,256) (151,119) (78,105)
Prepaid Expenses 13,251 11,699 (33,195)
Other Receivables (8,318) (4,409) 42,829
Accounts Payable (42,917) 106,533 (104,949)
Accrued Liabilities 91,633 61,026 (14,332)
--------- --------- ---------
Total Adjustments 251,858 51,066 (60,131)
--------- --------- ---------
Net Cash Provided By (Used By)
Operating Activities $ 677,278 $ 293,914 $ 162,561
========== ========== ==========
See accompanying notes and accountants's report.
20
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
1995 1994 1993
----------- ----------- -----------
Net Sales $19,615,130 $18,596,846 $16,955,470
Cost of Sales 15,639,294 14,848,855 13,501,224
----------- ----------- -----------
Gross Profit 4,245,836 3,747,991 3,454,246
General & Administrative
Expenses 3,626,223 3,456,026 3,154,156
----------- ----------- -----------
Operating Income 619,613 291,965 300,090
Other Income (Expense):
Other income 167,249 226,060 194,643
Interest expense (111,345) (132,411) (141,125)
----------- ----------- -----------
Income before taxes 675,517 385,614 353,608
Federal and State Income Taxes 250,097 142,766 130,916
----------- ----------- -----------
Net Income 425,420 242,848 222,692
Retained Earnings:
Balance at beginning of period 2,051,323 1,822,251 1,613,335
Dividends paid (13,776) (13,776) (13,776)
----------- ----------- -----------
Balance at End of Period $ 2,462,967 $ 2,051,323 $ 1,822,251
=========== =========== ===========
Earnings per share, Based on
weighted average number of
shares outstanding $ 30.88 $ 17.63 $ 16.16
=========== =========== ===========
See accompanying notes and accountants' report.
21
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 AND 1994
1. SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting. Assets, liabilities, revenues and expenses are
recognized on the accrual basis of accounting.
Depreciation. Depreciation has been computed on a straight-line basis
over the estimated useful lives of the respective assets. The estimated
useful lives for financial statement purposes are:
Building - 30 years
Equipment - 3 to 10 years
For income tax purposes depreciation, is calculated under the
applicable accelerated depreciation methods allowed for income tax
reporting. The depreciable lives for tax purposes are:
Building - 15 to 30 years
Equipment - 3 to 10 years
Inventories. Inventories are stated at cost determined by applying the
retail method of valuation. The ending inventories are valued at average
cost.
Net Income Per Share. Net income per share is computed based on the
weighted average number of shares outstanding throughout the year.
Income Taxes. Due to differences in the tax and financial accounting
rules, there are timing differences in expenses. Therefore income taxes are
calculated on a financial basis and require a deferred income taxes payable
account to be used. The sources of these differences and the tax effect of
each are as follows:
1995 1994
--------- --------
Section 263A Inventory costs $ (53,749) $ --
Excess of tax over book depreciation 11,787 48,799
--------- --------
Tax Effect $ (18,192) $ 18,441
Accounts Receivable. Farmers Inc. is a retailer of various goods with
company operations in Deming, N.M. The Corporation grants credit to
customers, substantially all of whom are local residents.
Bad Debts. The company incurred a theft of cash and checks in June, 1992.
The loss was recorded in total in bad debts in 1992 fiscal year end. The
company has received full insurance recovery. The recovery is included in
other income as follows, $25,000 in June 1992 fiscal year end and $41,465
in December 1992.
An allowance for doubtful accounts has been established. It is the policy
of the company to maintain an allowance of approximately 1.75% to 2.5% of
accounts receivable.
21
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
JUNE 30, 1995 AND 1994
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Loan Origination Costs. In March 1986 Farmers, Inc. incurred loan
origination cost on the first mortgage note to United New Mexico Bank in
the amount of $5,952. These costs are being amortized over a period of
192 months. At June 30, 1995 and 1994, the accumulated amortization is
$3,467 and $3,096 respectively.
Also in February 1989 Farmers acquired the feed store building and
incurred closing costs of $2,954. These costs are being amortized at the
rate of $8.25 per month, accumulated amortization at June 30, 1995 and 1994
is $627 and $528 respectively.
Cash and Cash Equivalents. For the purposes of the statement of cash
flows, the Company considers all highly liquid investments with a maturity
of three months or less to be cash equivalents.
2. INVENTORIES
Inventories at June 30, 1995 and 1994 consisted of the following:
1995 1994
---------- ----------
Store #1
Appliances $ 47,990 $ 43,923
Sporting Goods 169,737 144,427
Hardware 644,910 588,023
Groceries 561,919 519,182
Feed 298,180 282,130
Meat 55,910 54,068
Produce 39,023 27,603
Snack Bar 8,306 11,241
V & S 452,304 494,892
Radio Shack 246,408 234,908
Service Center -- 2,500
---------- ----------
2,524,687 2,402,897
Store #2
Groceries 60,980 53,345
Meat -- 1,299
Produce 689 559
---------- ----------
61,669 56,203
---------- ----------
Total Inventories $2,586,356 $2,459,100
========== ==========
22
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
JUNE 30, 1995 AND 1994
3. INVESTMENT IN SUPPLIERS
Investment in suppliers, at cost, as of June 30, 1995 and 1994 consisted
of the following:
1995 1994
-------- --------
10 shares of Class A nonvoting stock in
Cotter & Co. 1,000 1,000
874 and 821 shares of Class B nonvoting
stock in Cotter & Co. 88,220 82,716
-------- --------
Total Investment in Suppliers $ 89,220 $ 83,716
======== ========
The Class A and B stock of Cotter & Co. were received as patronage
dividends. None of the stock shown as investment in suppliers is readily
marketable. The market values are as follows:
Cotter & Co., 884 shares at $103.85 each, $91,803.
All investments are carried at cost in the financial statements.
4. NOTES RECEIVABLE
Notes receivable at June 30, 1995 and 1994 consisted of the following:
1995 1994
--------- ---------
Notes receivable from Cotter & Co.
maturing at various dates with various
interest rates $ 104,730 $ 101,742
--------- ---------
Total Notes Receivable $ 104,730 $ 101,742
========= =========
23
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
JUNE 30, 1995 AND 1994
5. FRANCHISE COSTS
September 10, 1990, Farmers, Inc. acquired a limited, non-exclusive
license to sale [sic] products and to use the name "Radio Shack". This
agreement is for a term of five years with automatic extensions for
additional one year
terms each unless either party provides written notice to the other party
of its intent not to renew at least 30 days prior to the end of any term.
The Franchise cost is carried at cost in the financial statements.
In June 1995, Farmers Inc. acquired the franchise from Ben Franklin to
operate a Ben Franklin Crafts store. Operations will begin in August 1995
in the store space where V & S operated in the past.
6. PROPERTY, PLANT AND EQUIPMENT
Balance Addition Balance
6/30/94 At Cost Retirements 6/30/95
---------- --------- ----------- ----------
Building $2,062,598 $ 11,699 $ -- $2,074,297
Land 80,203 -- -- 80,203
Equipment and
Fixtures 2,106,520 226,426 12,490 2,320,456
---------- -------- ------- ----------
$4,249,321 $238,125 $12,490 $4,474,956
========== ======== ======= ==========
Accumulated Depreciation
Balance Addition Balance
6/30/94 At Cost Retirements 6/30/95
---------- --------- ----------- ----------
Buildings $965,965 $ 70,469 $ -- $1,036,434
Equipment and
Fixtures 1,572,108 162,005 12,490 1,721,623
---------- -------- ------- ----------
$2,538,073 $232,474 $12,490 $2,758,057
========== ======== ======= ==========
7. LEASES
The Company leased point of sale computer equipment through TSC Leasing
Corporation in November 1989. The final lease payment is due March 1,
1995. The Company has a purchase option at the end of this lease period at
a price of $7,024 by April 1, 1995. This option was exercised 4-1-95.
The Company leased their Monarch Marking System for the variety store
through Pitney Bowes Credit Corp. in January 1992. The lease is for a
60-month period. Future lease payments are due as follows:
June 30, 1996 $4,775
June 30, 1997 2,389
------
$7,164
======
In January 1994 the Company leased a cash register system including
computer software from NCR Corporation. The lease is for a period of 36
months. Future lease payments are due as follows:
June 30, 1996 $43,680
June 30, 1997 21,840
------
$65,520
=======
24
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
JUNE 30, 1995 AND 1994
8. LONG-TERM DEBT
Future maturities of long-term debt are as follows:
Maturing
Fiscal year end Amount
--------------- ------------
June 30, 1996 $ 266,707
June 30, 1997 161,428
June 30, 1998 156,390
June 30, 1999 130,631
June 30, 2000 149,720
Later years 166,783
----------
Total long-term debt $1,031,659
==========
Long-term debt at June 30, 1995 and 1994 consisted of the following:
<TABLE>
<CAPTION>
1995 1994
-------------------------- ------------------------
Current Long-Term Current Long-Term
Maturities Maturities Maturities Maturities
--------------------------- ------------------------
<S> <C> <C> <C> <C>
Note payable to Norwest Bank,
due in monthly installments
of $8,237, plus interest at
10.5%; secured by first
mortgage. $ 98,850 $ 545,831 $ 98,850 $ 771,391
Note payable to Triad,
due in monthly installments
of $634, including interest
at 14.85% per annum; secured
by equipment. 5,372 -- -- --
Note payable to Cotter & Co.,
due in monthly installments of
$402, including interest at 10%
per annum, secured by paint
analyzer. 4,465 1,188 4,042 5,653
Note payable to First New
Mexico Bank due in monthly
installments of $676, including
interest at 11.0% per annum,
secured by Ford Explorer. -- -- 2,528 --
Note payable to IBM Credit
Corporation due in monthly
installments of $76, including
interest at 20.25%, secured by
IBM computer. 343 -- 754 343
Note payable to IGA, due in
monthly installments of $170 and
$100, including interest at 10.0%
and 15.0%, respectively per annum,
secured by IGA signs. 2,770 1,013 2,454 3,783
</TABLE>
25
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
JUNE 30, 1995 AND 1994
LONG-TERM DEBT (CONTINUED)
<TABLE>
<CAPTION> 1995 1994
--------------------------- ------------------------
Current Long-Term Current Long-Term
Maturities Maturities Maturities Maturities
--------------------------- ------------------------
<S> <C> <C> <C> <C>
Note payable to Cotter & Co.,
due in monthly installments of
$272, including interest at 8.0%
per annum, secured by rental
equipment. 2,576 7,142 2,378 9,719
Note payable to First New
Mexico Bank, due in monthly
installments of $1,781
including interest at 9.0%,
secured by computer equipment. -- -- 18,751 --
Note payable to Norwest Bank,
due in monthly installments
of $896 including interest
at 9.9%, secured by real
estate mortgage. 5,843 46,437 5,294 52,278
Note payable to Norwest Bank,
due in monthly installments of
$763 including interest of
10.25%, secured by laundromat. -- -- 5,858 --
Note payable to Norwest Bank,
due in monthly installments
of $2,617, including interest
at 11.5%; secured by equipment.
24,182 64,516 22,010 87,528
Note payable to Norwest Bank,
due November 1, 1995 with
interest at 9.75%, line of
credit. 90,000 -- 50,000 --
Note payable to Cotter & Co.,
due in monthly installments
of $2,333 including interest at
8.5% per annum, secured by
rental equipment. 13,656 -- 25,636 13,656
Note payable to Norwest Bank,
due in monthly installments
of $1,675. Plus interest at
9.75%, secured by fuel tanks.
11,338 83,637 -- --
</TABLE>
26
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
JUNE 30, 1995 AND 1994
LONG-TERM DEBT (CONTINUED)
<TABLE>
<CAPTION>
1995 1994
--------------------------- ------------------------
Current Long-Term Current Long-Term
Maturities Maturities Maturities Maturities
--------------------------- ------------------------
<S> <C> <C> <C> <C>
Note payable to Kubora
Credit, due in monthly
installments of $697
including interest at 5.5%
per annum, secured by
Kubota tractor $ 7,312 $ 15,188 $ 6,922 $ 22,499
--------- --------- --------- ---------
$ 266,707 $ 764,952 $ 245,477 $ 966,850
========= ========= ========= =========
</TABLE>
All property, plant, equipment and inventory are subject to
security interest liens.
9. OPERATING LEASES
The following is a schedule by years of future minimum rental payments to
be received under operating leases that have initial or remaining
noncancelable lease terms in excess of one year as of June 30, 1995:
Year ending June 30:
1996 $ 113,805
1997 42,864
1998 9,600
1999 6,400
2000 --
Thereafter --
---------
Total minimum payments required $ 172,669
The following schedule provides an analysis of the Company's investment
in property held for lease by major classes as of June 30, 1995
Building $ 973,460
Less: Accumulated
Depreciation 374,092
---------
$ 599,368
27
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
JUNE 30, 1995 AND 1994
10. INCOME TAXES:
Effective July 1, 1993, Farmers, Inc. adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109).
Under the asset and liability method of SFAS 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts existing
assets and liabilities and their respective tax bases. To the extent that
current available evidence about the future raises doubt about the
realization of a deferred tax asset, a valuation allowance must be
established. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
SFAS 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in the period that includes the enactment date.
Farmers, Inc. previously used the asset and liability method under SFAS
96. Under the asset and liability method of SFAS 96, deferred tax assets
and liabilities were recognized for all events that had been recognized in
the financial statements. Under SFAS 96, the future tax consequences of
recovering assets or settling liabilities at their financial carrying
amounts were not considered in calculating deferred taxes. Generally,
SFAS 96 prohibited consideration of any other future events in calculating
deferred taxes.
28
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
Schedule V: Property and Equipment.
Balance Balance
June 30 Additions Retirement June 30
1990 At Cost At Cost 1991
----------------------------------------------------
Buildings $2,036,690 $ 2,282 $ -- $2,038,972
Land 80,203 -- -- 80,203
Equipment and
Fixtures 1,559,762 83,795 3,422 1,640,135
---------- -------- -------- ----------
Total $3,676,655 $ 86,077 $ 3,422 $3,579,310
========== ======== ======== ==========
Balance Balance
June 30 Additions Retirement June 30
1991 At Cost At Cost 1992
----------------------------------------------------
Buildings $2,038,972 $ 17,992 $ -- $2,056,964
Land 80,203 -- -- 80,203
Equipment and
Fixtures 1,640,135 130,147 -- 1,770,282
---------- -------- -------- ----------
Total $3,579,310 $148,139 $ -- $3,907,449
========== ======== ======== ==========
Balance Balance
June 30 Additions Retirement June 30
1992 At Cost At Cost 1993
----------------------------------------------------
Buildings $2,056,964 $ 3,878 $ -- $2,060,842
Land 80,203 -- -- 80,203
Equipment and
Fixtures 1,770,282 222,973 49,188 1,944,067
---------- -------- -------- ----------
Total $3,907,449 $226,851 $ 49,188 $4,085,112
========== ======== ======== ==========
Balance Balance
June 30 Additions Retirement June 30
1993 At Cost At Cost 1994
----------------------------------------------------
Building $2,060,842 $ 1,766 $ -- $2,062,598
Land 80,203 -- -- 80,203
Equipment and
Fixtures 1,944,067 162,453 -- 2,106,520
---------- -------- -------- ----------
Total $4,085,112 $164,209 $ -- $4,249,321
========== ======== ======== ==========
29
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
Schedule VI: Accumulated Depreciation, Property, Plant and Equipment.
Balance Balance
June 30 Depreciation June 30
1990 Expense Retirements 1991
----------------------------------------------------
Buildings $ 682,347 $ 63,894 $ -- $ 746,331
Equipment and
Fixtures 1,258,917 72,758 1,964 1,329,711
---------- -------- ------- ----------
Total $1,941,264 $136,742 $ 1,964 $2,076,042
========== ======== ======= ==========
Balance Balance
June 30 Depreciation June 30
1991 Expense Retirements 1992
----------------------------------------------------
Buildings $ 746,331 $ 74,333 $ -- $ 820,664
Equipment and
Fixtures 1,329,711 76,072 -- 1,405,783
---------- -------- ------- ----------
Total $2,076,042 $150,405 $ -- $2,226,447
========== ======== ======= ==========
Balance Balance
June 30 Depreciation June 30
1992 Expense Retirements 1993
----------------------------------------------------
Buildings $ 820,664 $ 72,463 $ -- $ 893,127
Equipment and
Fixtures 1,405,783 92,592 49,188 1,499,187
---------- -------- ------- ----------
Total $2,226,447 $165,055 $49,188 $2,342,314
========== ======== ======= ==========
Balance Balance
June 30 Depreciation June 30
1993 Expense Retirements 1994
----------------------------------------------------
Buildings $ 893,127 $ 72,838 $ -- $ 965,965
Equipment and
Fixtures 1,499,187 122,921 -- 1,572,108
---------- -------- ------- ----------
Total $2,342,314 $195,759 $ -- $2,538,073
========== ======== ======= ==========
30
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
Schedule X: Supplementary Income Statement Information:
_______________COLUMN A_____________ ______________COLUMN B_______________
Item Charged to costs
and expenses
6-30-92; 6-30-93; 6-30-94; 6-30-95
- ------------------------------------
- --------------------------------------
1. Maintenance and repairs. Expenses are less than 1% of total
sales and revenues in all years.
2. Depreciation and amortization
of intangible assets, pre-
operating costs and similar
deferral. $150,875 $165,525 $196,229 $232,474
3. Taxes other than payroll Expenses are less than 1% of total
and income taxes. sales and revenues in all years.
4. Royalties. None in all years.
5. Advertising costs. $116,780 $118,902 $133,460 $189,509
31
<PAGE>
The supplementary financial information addressed by item 302 of
regulation S-K is not required of the company.
Disagreements with accountants on accounting and financial disclosure:
There have been no disagreements between the accounting firm of Morrow &
Company, certified public accountants and the company concerning accounting
and financial disclosure.
ITEM 301. SELECTED FINANCIAL INFORMATION.
The following is selected financial data which highlights certain significant
trends in the company's financial condition and results of operations.
YEAR
----------------------------------------
1995 1994 1993
Operating Revenues $19,615,130 $18,596,846 $16,955,470
Income from Continuing
Operations 425,420 242,848 222,692
Income per Common Share 30.88 17.63 16.16
Total Assets 5,005,317 4,804,929 4,643,730
Long-Term Debt 764,952 966,850 1,126,970
Redeemable Preferred
Stock -- -- --
Capital Leases -- -- --
Cash Dividends
Declared per share 1.00 1.00 1.00
YEAR
----------------------------------------
1992 1991
Operating Revenues $16,347,288 $15,914,317
Income from Continuing
Operations 219,612 229,021
Income per Common Share 15.94 16.62
Total Assets 4,573,133 4,130,666
Long-Term Debt 1,300,745 1,407,683
Redeemable Preferred
Stock -- --
Capital Leases -- --
Cash Dividends
Declared per share 1.00 1.00
There have been no business combinations or dispositions of business
operations during the fiscal year ended June 30, 1995.
32
<PAGE>
Attachment 2
[Letterhead of Morrow & Company]
To the Board of Directors
Mimbres Valley Farmers Association, Inc.
dba Farmers, Inc.
We have reviewed the accompanying balance sheets of Mimbres Valley Farmers
Association, Inc. dba Farmers, Inc. as of March 31, 1996 and 1995, and the
related statements of operations and retained earnings, and cash flows for the
nine months ended March 31, 1996, 1995 and 1994, in accordance with Statements
on Standards for Accounting and Review Services issued by the American
Institute of Certified Public Accountants. All information included in these
financial statements is the representation of the management of Farmers, Inc. We
have audited the accompanying June 30, 1995 balance sheet.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than
an audit in accordance with generally accepted auditing standards, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our view [sic], we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to be
in conformity with generally accepted accounting principles.
Our review was made for the purpose of expressing limited assurance that there
are no material modifications that should be made to the financial statements
in order for them to be in conformity with generally accepted accounting
principles. The information included in the supplementary information is
presented only for additional analysis purposes. Such information has been
subjected to the inquiry and analytical procedures applied in the review of
the basic financial statements, and we are not aware of any material
modifications that should be made to it.
/s/ Morrow & Company
Morrow & Company
May 9, 1996
1
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
BALANCE SHEETS
MARCH 31, 1996, 1995 AND JUNE 30, 1995
ASSETS
1996 1995 June 1995
---------- ---------- ----------
Current Assets:
Cash $ 511,484 $ 7,732 $ 163,870
Trade accounts receivable
Less: Allowance for doubtful accounts
of $6,194 in 1996 and $6,194 in 1995 311,133 205,259 238,849
Inventories, at cost 3,235,093 2,770,816 2,586,356
Prepaid taxes and expenses 189,800 61,182 49,122
Other receivables 18,471 18,819 34,959
---------- ---------- ----------
Total Current Assets 4,265,981 3,063,808 3,073,156
Property, plant and equipment, at cost:
Buildings and land 2,185,949 2,150,569 2,154,500
Equipment and fixtures 2,758,609 2,190,916 2,320,456
---------- ---------- ----------
4,944,558 4,341,485 4,474,956
Less: Accumulated depreciation 2,904,874 2,681,430 2,758,057
---------- ---------- ----------
Net property, plant and equipment 2,039,684 1,660,055 1,716,899
Other Assets:
Notes receivable - suppliers 59,667 104,730 104,730
Investment in suppliers, at cost 68,051 89,220 89,220
Loan origination costs less amortization 4,460 4,930 4,812
Franchises 16,500 4,500 16,500
---------- ---------- ----------
Total Other Assets 148,678 203,380 215,262
---------- ---------- ----------
Total Assets $6,454,343 $4,927,243 $5,005,317
========== ========== ==========
See accompanying notes and accountants' report.
2
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
BALANCE SHEETS (CONTINUED)
MARCH 31, 1996, 1995 AND JUNE 30, 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION> 1996 1995 June 1995
---- ---- ---------
<S> <C> <C> <C>
Current Liabilities:
Accounts payable $1,217,228 $ 654,411 $ 760,832
Notes and mortgages payable
current maturities 211,988 255,546 266,707
Interest payable 4,935 2,635 2,453
Payroll, sales and property taxes 125,532 113,984 105,400
Income taxes payable -- 137,032 119,769
Accrued payroll 66,649 31,800 72,139
---------- ---------- ---------
Total Current Liabilities 1,626,332 1,195,488 1,327,300
Notes and mortgages payable, less
current maturities 1,759,938 753,455 764,952
Deferred income taxes 106,008 100,431 104,656
---------- --------- ---------
Total Liabilities 3,492,278 2,049,334 2,196,908
Stockholders' Equity:
Capital stock, par value $25 per share;
authorized 20,000 shares, issued 13,910
shares, outstanding 13,776 shares 348,792 348,792 348,792
Retained earnings 2,616,623 2,532,467 2,462,967
---------- ---------- ---------
2,965,415 2,881,759 2,811,759
Less: Treasury stock, 134 shares,
at cost 3,350 3,350 3,350
---------- ---------- ---------
Total Stockholders' Equity 2,962,065 2,877,909 2,808,409
---------- ---------- ---------
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $6,454,343 $4,927,243 $5,005,317
========== ========== ==========
</TABLE>
See accompanying notes and accountants' report.
3
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
FOR THE NINE MONTHS ENDED MARCH 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
S> <C> <C> <C>
Net Sales $16,337,777 $14,864,934 $13,677,599
Cost of Sales 12,809,771 11,580,794 10,865,653
----------- ----------- -----------
Gross Profit 3,528,006 3,284,140 2,811,946
General & Administrative Expenses
3,285,186 2,607,263 2,508,220
----------- ---------- -----------
Operating Income 242,820 676,877 303,726
Other Income (Expense):
Other Income 129,600 115,995 169,106
Interest Expense (113,738) (80,453) (103,416)
----------- ----------- -----------
Income before taxes 258,682 712,419 369,416
Federal and State Income Taxes 105,026 231,275 130,296
----------- ----------- -----------
Net Income 153,656 481,144 239,120
Retained Earnings:
Balance at beginning of period2,462,967 2,051,323 1,822,251
Dividends paid -- -- (13,776)
----------- ----------- -----------
Balance at End of Period $ 2,616,623 $ 2,532,467 $ 2,047,595
=========== =========== ===========
Earnings per share, based on weighted
average number of shares outstanding $11.15 $34.93 $17.36
=========== =========== ===========
</TABLE>
See accompanying notes and accountants' report.
4
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE NINE MONTHS ENDED MARCH 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Cash received from customers $16,281,981 $14,678,600 $13,611,701
Cash paid to suppliers (12,933,127) (11,730,132) (10,822,654)
Cash paid for operating expenses (3,266,214) (2,520,210) (2,386,826)
Miscellaneous income 155,290 149,628 138,010
Interest paid (111,256) (80,898) (103,754)
Income taxes paid (315,957) (122,345) (100,945)
----------- ----------- -----------
Total Cash Provided by (used by)
Operating Activities (189,283) 374,643 335,532
Cash Flows From Investing Activities:
Proceeds from sale of assets -- 1,290 64,954
Capital Expenditures (469,602) (95,271) (112,204)
Increase in Notes Receivable -- (3,509) (45,735)
Collections on Notes Receivable 45,063 521 48,411
Increase in Stock in Supplier (7,975) (5,504) (4,564)
Decrease in Stock Supplier 29,144 -- 74,878
----------- ----------- -----------
Net Cash Provided by (used by)
Investing Activities (403,370) (102,473) 25,740
Cash Flows From Financing Activities:
Long Term Borrowing 1,827,278 190,000 44,101
Debt Reduction (887,011) (393,326) (322,179)
Dividends Paid -- -- (13,776)
Cash Overdraft -- (61,112) (38,244)
----------- ----------- -----------
Total Cash Provided by (used by)
Financing Activities 940,267 (264,438) (330,098)
----------- ----------- -----------
Net Increase (Decrease) in Cash 347,614 7,732 31,174
Cash at Beginning of Period 163,870 -- --
----------- ----------- -----------
Cash at End of Period $ 511,484 $ 7,732 $ 31,174
=========== =========== ===========
</TABLE>
See accompanying notes and accountants' report.
5
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE NINE MONTHS ENDED MARCH 31, 1996, 1995 AND 1994
Reconciliation of Net Income to Net Cash
Provided by Operating Activities
1996 1995 1994
--------- --------- ---------
Net Income $ 153,656 $ 481,144 $ 239,120
--------- --------- ---------
Non Cash Items Included in Net Income:
Depreciation and Amortization 147,169 145,992 135,568
Deferred Income Taxes 1,352 (22,417) 11,106
Gain on Sale of Assets -- (465) (64,954)
Changes In:
Accounts Receivable (72,284) 145,068 (79,005)
Inventory (648,737) (311,716) (72,031)
Prepaid Expenses (140,678) 1,190 23,931
Other Receivables 16,488 7,822 13,107
Accounts Payable 456,396 (149,338) 42,999
Accrued Liabilities (102,645) 77,363 84,691
--------- --------- ---------
Total Adjustments (342,939) (106,501) 96,412
--------- --------- ---------
Net Cash Provided By (Used By)
Operating Activities $ (189,283) $ 374,643 $ 335,532
========== ========== ==========
See accompanying notes and accountants' report.
6
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting. Assets, liabilities, revenues and expenses are
recognized on the accrual basis of accounting.
Depreciation. Depreciation has been computed on a straight-line basis
over the estimated useful lives of the respective assets. The estimated
useful lives for financial statement purposes are:
Buildings - 30 years
Equipment - 3 to 10 years
For income tax purposes depreciation is calculated under the applicable
accelerated depreciation methods allowed for income tax reporting. The
estimated useful lives for financial statement purposes are:
Buildings - 15 to 30 years
Equipment - 3 to 10 years
Inventories. Inventories are stated at cost determined by applying the
retail method of valuation. The ending inventories are valued at average
cost.
Net Income Per Share. Net income per share is computed based on the
weighted average number of shares outstanding throughout the year.
Income Taxes. Due to differences in the tax and financial accounting
rules, there are timing differences in expenses. Therefore, income taxes
are calculated on a financial basis and require a deferred income taxes
payable account to be used. The sources of these differences and the tax
effect of each are as follows:
1995 1994
---- ----
Section 263A Inventory costs $ (9,550) $ (54,394)
Excess of tax over book depreciation 13,125 49,000
--------- ---------
Tax Effect $ 1,352 $ (1,497)
Accounts Receivable. Farmers Inc. is a retailer of various goods with
company operations in Deming, N.M. The Corporation grants credit to
customers, substantially all of whom are local residents.
An allowance for doubtful accounts has been established. It is the policy
of the company to maintain an allowance of approximately 1.75% to 2.5% of
accounts receivable.
7
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Loan Origination Costs. In March 1986 Farmers, Inc. incurred loan
origination cost on the first mortgage note to Norwest Bank in the amount
of $5,952. These costs are being amortized over a period of 192 months.
At March 31, 1996 and 1995, the accumulated amortization is $3,745 and
$3,374 respectively.
Also in February 1989, Farmers acquired the feed store building and
incurred closing costs of $2,954. These costs are being amortized at the
rate of $8.25 per month, accumulated amortization at March 31, 1996 and
1995 is $702 and $603 respectively.
Cash and Cash Equivalents. For the purposes of the statement of cash
flows, the Company considers all highly liquid investments with a maturity
of three months or less to be cash equivalents.
2. INVENTORIES
Inventories at March 31, 1996 and 1995 consisted of the following:
1996 1995
---------- ----------
Store #1
Appliances $ 46,751 $ 25,550
Sporting Goods 151,807 100,929
Hardware 1,064,742 657,352
Groceries 720,278 700,602
Feed 320,399 314,477
Meat 18,220 63,072
Produce 23,861 42,110
Snack Bar 6,945 20,707
V & S 246,074 475,733
Radio Shack 284,845 279,140
Service Center -- 2,500
Ben Franklin Crafts 281,166 --
---------- ----------
3,165,088 2,682,172
Store #2
Groceries 54,673 82,895
Meat 1,000 4,667
Produce 2,500 1,082
Gasoline 11,832 --
---------- ----------
70,005 88,644
---------- ----------
Total Inventories $3,235,093 $2,770,816
========== ==========
8
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
3. INVESTMENT IN SUPPLIERS
Investment in suppliers, at cost, as of June 30, 1996 and 1995 consisted
of the following:
1996 1995
---- ----
10 shares of Class A nonvoting stock in
Cotter & Co. 1,000 1,000
663 and 874 shares of Class B nonvoting
stock in Cotter & Co. 67,051 88,220
-------- --------
Total Investment in Suppliers $ 68,051 $ 89,220
======== ========
The Class A and B stock of Cotter & Co. were received as patronage
dividends. None of the stock shown as investment in suppliers is readily
marketable. The market values are as follows:
Cotter & Co., 673 shares at $103.57 each, $69,703.
All investments are carried at cost in the financial statements.
4. NOTES RECEIVABLE
Notes receivable at March 31, 1996 and 1995 consisted of the following:
1996 1995
---- ----
Notes receivable from Cotter & Co.
maturing at various dates with various
interest rates $ 59,667 $ 104,730
-------- ---------
Total Notes Receivable $ 59,667 $ 104,730
======== =========
9
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
5. FRANCHISE COSTS
September 10, 1990, Farmers, Inc. acquired a limited, non-exclusive
license to sale [sic] products and to use the name "Radio Shack". This
agreement is for a term of five years with automatic extensions for
additional one year terms each unless either party provides written notice
to the other party of its intent not to renew at least 30 days prior to the
end of any term. The franchise cost is carried at cost in the financial
statements.
In June 1995, Farmers Inc. acquired the franchise from Ben Franklin to
operate a Ben Franklin Crafts store. Operations will begin in August 1995
in the store space operated by V & S in the past.
6. PROPERTY, PLANT AND EQUIPMENT
Balance Addition Balance
6/30/95 At Cost Retirements 3/31/96
---------- -------- ----------- -------
Buildings $2,074,297 $ 31,449 $ -- $2,105,746
Land 80,203 -- -- 80,203
Equipment and
Fixtures 2,320,456 438,153 -- 2,758,609
---------- -------- ------- ----------
$4,474,956 $469,602 $ -- $4,944,558
========== ======== ======= ==========
Accumulated Depreciation
Balance Addition Balance
6/30/95 At Cost Retirements 3/31/96
-------- -------- ----------- -------
Buildings $1,036,434 $ 51,759 $ -- $1,088,193
Equipment and
Fixtures 1,721,623 95,058 -- 1,816,681
---------- -------- ------- ----------
$2,758,057 $146,817 $ -- $2,094,874
========== ======== ======= ==========
7. LEASES
The Company leased their Monarch Marking System for the variety store
through Pitney Bowes Credit Corp. in January 1992. The lease is for a
60-month period. Future lease payments are due as follows:
June 30, 1996 $1,194
June 30, 1997 2,389
------
$3,583
======
10
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
7. LEASES (CONTINUED)
January 1, 1996, the Company leased real estate from K-Mart Corporation
to
house the Company's True Value Hardware store. The initial term of the
lease expires November 30, 2002. Farmers, Inc. shall have the option to
extend the term of this lease for additional five year periods. Future
lease payments are due as follows:
June 30, 1996 $ 27,500
June 30, 1997 110,000
June 30, 1998 110,000
June 30, 1999 110,000
June 30, 2000 110,000
June 30, 2001 110,000
June 30, 2002 110,000
---------
$ 687,500
In January 1994, the Company leased a cash register system including
computer software from NCR Corporation. The lease is for a period of 36
months. Future lease payments are due as follows:
June 30, 1996 $ 10,920
June 30, 1997 21,840
--------
$ 32,760
========
8. LONG-TERM DEBT
Future maturities of long-term debt are as follows:
Maturing
Fiscal year end Amount
--------------- --------
June 30, 1996 $ 211,988
June 30, 1997 281,528
June 30, 1998 276,490
June 30, 1999 215,300
June 30, 2000 269,270
Later years 717,350
----------
Total long-term debt $1,971,926
==========
11
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
8. LONG-TERM DEBT (CONTINUED)
Long-term debt at March 31, 1996 and 1995 consisted of the following:
<TABLE>
<CAPTION>
1995 1994
--------------------------- ------------------------
Current Long-Term Current Long-Term
Maturities Maturities Maturities Maturities
--------------------------- ------------------------
<S> <C> <C> <C> <C>
Note payable to Norwest Bank,
due in monthly installments of
$16,788, plus interest at 9.5%;
secured by first mortgage.
$ 51,686 $ 1,547,747 $ 98,850 $ 602,769
Note payable to Tennant, due in
monthly installments of $521,
including interest at 10.3%
per annum; secured by
Power Scrubber 4,873 4,778 -- --
Note payable to Cotter & Co.,
due in monthly installments of
$402, including interest at 10%
per annum, secured by paint
analyzer. 2,726 -- 4,042 2,659
Note payable to IBM Credit
Corporation, due in monthly
installments of $76, including
interest at 20.25%, secured by
IBM computer. -- -- 491 --
Note payable to IGA, due in
monthly installments of $170 and
$100 including interest at 10.0%
and 15.0%, respectively per annum,
secured by IGA signs. 1,371 -- 2,454 1,789
</TABLE>
12
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
LONG-TERM DEBT (CONTINUED)
<TABLE>
<CAPTION>
1995 1994
--------------------------- ------------------------
Current Long-Term Current Long-Term
Maturities Maturities Maturities Maturities
--------------------------- ------------------------
<S> <C> <C> <C> <C>
Note payable to Cotter & Co.,
due in monthly installments of
$272, including interest at 8.0%
per annum, secured by rental
equipment. 2,378 5,428 2,378 7,953
Note payable to First New Mexico
Bank, due in monthly installments
of $1,781 including interest at 9.0%,
secured by computer equipment.
-- -- 3,535 --
Note payable to Norwest Bank,
due in monthly installments of
$896 including interest at 9.9%,
secured by real estate mortgage.
5,294 42,651 5,294 48,349
Note payable to Norwest Bank,
due in monthly installments of
$2,617, including interest at 11.5%;
secured by equipment. -- -- 22,010 71,869
Note payable to Norwest Bank,
due June 1, 1996 with interest
at 8.75%, line of credit. 100,000 -- 90,000 --
Note payable to Cotter & Co., due
in monthly installments of $2,333
including interest at 8.5% per
annum, secured by rental equipment.
-- -- 20,270 --
Note payable to Norwest Bank, due
in monthly installments of $1,675
plus interest at 9.0%, secured by
fuel tanks. 20,100 59,800 -- --
</TABLE>
13
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
LONG-TERM DEBT (CONTINUED)
<TABLE>
<CAPTION>
1995 1994
--------------------------- ------------------------
Current Long-Term Current Long-Term
Maturities Maturities Maturities Maturities
--------------------------- ------------------------
<S> <C> <C> <C> <C>
Note payable to Cotter & Co.,
due in monthly installments of
$2,332 including interest at 10.5%,
secured by rental equipment.
17,338 89,307 -- --
Note payable to Kubota Credit,
due in monthly installments of
$697 including interest at 5.5%
per annum, secured by Kubota
tractor 6,222 10,227 6,922 18,067
--------- ---------- --------- ---------
$ 211,988 $1,759,938 $ 255,546 $ 753,455
========= ========== ========= =========
</TABLE>
All property, plant, equipment and inventory are subject to security
interest liens.
9. OPERATING LEASES
The following is a schedule by years of future minimum rental payments to
be received under operating leases that have initial or remaining
noncancelable lease terms in excess of one year as of March 31, 1996:
Year ending March 31:
1996 $ 57,890
1997 42,864
1998 9,600
1999 6,400
2000 --
Thereafter --
---------
Total minimum payments required $ 116,754
The following schedule provides an analysis of the Company's investment
in property held for lease by major classes as of June 30, 1995
Building $ 973,460
Less: Accumulated
Depreciation 399,782
---------
$ 573,678
14
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1996 AND 1995
10. INCOME TAXES:
Effective July 1, 1993, Farmers, Inc. adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109).
Under the asset and liability method of SFAS 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts existing
assets and liabilities and their respective tax bases. To the extent that
current available evidence about the future raises doubt about the
realization of a deferred tax asset, a valuation allowance must be
established. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
SFAS 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in the period that includes the enactment date.
Farmers, Inc. previously used the asset and liability method under SFAS
96. Under the asset and liability method of SFAS 96, deferred tax assets
and liabilities were recognized for all events that had been recognized in
the financial statements. Under SFAS 96, the future tax consequences of
recovering assets or settling liabilities at their financial carrying
amounts were not considered in calculating deferred taxes. Generally,
SFAS 96 prohibited consideration of any other future events in calculating
deferred taxes.
15
<PAGE>
SUPPLEMENTARY INFORMATION
16
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
SCHEDULE OF OTHER INCOME
FOR THE NINE MONTHS ENDED MARCH 31, 1996, 1995 AND 1994
1996 1995 1994
---- ---- ----
Interest income $ 11,613 $ 7,644 $ 8,659
Gain on sale of assets -- 465 64,954
Service charges 10,984 7,710 6,684
Gasoline commission 5,587 16,480 15,928
Check cashing income 40,571 35,071 40,801
Rent income
Less: depreciation of $25,690 in
1996, $34,098 in 1995 and
$33,858 in 1994. 60,845 48,625 32,080
-------- -------- --------
$129,600 $115,995 $169,106
======== ======== ========
See accompanying notes and accountants' report.
17
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
dba FARMERS, INC.
SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE SIX MONTHS ENDED MARCH 31, 1996, 1995 AND 1994
1996 1995 1994
---- ---- ----
Management Salaries $ 81,560 $ 65,546 $ 70,129
Store Salaries 1,595,929 1,271,410 1,208,671
Office Salaries 85,873 74,418 75,279
Contract Labor 19,470 5,872 6,570
Employee Benefits & Insurance 58,997 60,294 63,508
Payroll Taxes 154,779 132,097 123,314
Other Taxes and Licenses 30,774 23,330 23,602
Depreciation and Amortization 121,617 111,894 102,710
Accounting & Legal 38,884 38,122 30,055
Advertising and Promotion 176,204 115,863 101,101
Bad Debts 2,182 1,915 6,704
Cash Shortage, Net 20,117 3,603 6,585
Computer Processing 893 244 994
Contributions 3,165 3,372 3,775
Credit Card Fees 13,331 7,655 6,065
Directors Fees 4,100 3,700 5,100
Dues and Subscriptions 6,658 4,122 5,075
Entertainment 5,706 1,997 1,657
Equipment Lease - B/H Lease 58,133 62,627 42,017
Insurance 141,899 115,719 115,395
Inventory Service 10,125 9,335 8,425
Linen Service 2,386 1,477 1,433
Miscellaneous 3,939 3,480 3,620
Postage and Freight 5,042 5,485 4,616
Repairs and Maintenance 132,649 96,861 90,581
Security 12,472 20,197 16,176
Supplies 175,093 131,762 147,857
Travel 32,302 10,475 8,651
Utilities and Telephone 206,593 191,806 191,092
Vehicle Expense 37,239 27,498 29,666
Rent 34,681 2,345 2,800
Merchandise loss 4,982 2,742 4,997
Ben Franklin Royalties 7,322 -- --
---------- ---------- ----------
TOTAL GENERAL AND
ADMINISTRATION EXPENSES $3,285,186 $2,607,263 $2,508,220
========== ========== ==========
See accompanying notes and accountants' report.
18
Exhibit (a)(2)
[Letterhead of Morrow & Company]
June 3, 1996
To Whom It May Concern:
The financial statements prepared by Morrow & Company, CPA's may be released
to
the public. These financial statements and auditors report are a true and
accurate copy.
Sincerely,
/S/ Harold C. Morrow
Harold C. Morrow, CPA
Exhibit (a)(3)
LETTER OF TRANSMITTAL
to Tender Common Stock
of
MIMBRES VALLEY FARMER'S ASSOCIATION, INC.
dba FARMER'S INC.
Pursuant to the Offer to Purchase
Dated June 1, 1996
by
JOHN BROWNFIELD, JOHN KECK, J.W. DONALDSON, JR., FREDERICK H. SHERMAN, KENNY
STEVENS, HAROLD MORROW, MARSHA M. BROWNFIELD, D. KEITH BROWNFIELD, JESSE L.
BROWNFIELD, ELLA ROSE MACGIBBON, W. CHRIS SANDERS, PAM SANDERS, BRADLEY T.
SANDERS, CLINTON C. SANDERS, CORY S. SANDERS, LINDA C. KECK, MELINDA E.
DOUGHERTY, SEAN P. DOUGHERTY, S. PATRICK DOUGHERTY, JR., CHRISTOPHER J.
DOUGHERTY, ALBERT P. KECK, II, CAROLINE C. KECK, ALEXANDRA M. KECK, JULIANNA D.
KECK, EDWARD K. SAYLOR, VICTORIA M. SAYLOR, DIANNE DONALDSON, JEREMY W.
DONALDSON, LUKE DONALDSON, SARAH DONALDSON, J.W. DONALDSON COMPANY, JOHN BRYAN
JOHNSON, JILL M. JOHNSON, JOHNNIE E. JOHNSON, KIMBERLY K. JOHNSON, RUTH ANN
JOHNSON, RUTH D. JOHNSON, JANIE JONTZ SHERMAN, JERAH E. SHERMAN, F. JAKUB
SHERMAN, BENJAMIN M. SHERMAN, KATHY STRAUSS, DAVID STRAUSS, AMY STRAUSS, KRISTIN
STRAUSS, BENJAMIN K. SHERMAN, RENA BETH STEVENS, CRAIG ELLIOT STEVENS, NATHANIEL
STEVENS, JOEL BRADLEY STEVENS, KYLE EDWARD STEVENS, KATHERINE STEVENS, KELLEY
STEVENS, DIANE W. MORROW, ASHLEE M. MORROW, DUSTIN W. MORROW, JORDAN C. MORROW,
JACK F. MORROW, BETTY M. MORROW, PATSY T. MERRILL, FRANK MERRILL, AND MORROW &
COMPANY, P.A.
Purchasers are offering $50.00 per Share net cash. You may be aware that
in the last two years, Shares have traded between $12.00 per Share and $30.00
per Share. In the last quarter, since Kenny Stevens resigned, book value
has declined $5.53. We want to get Kenny Stevens back as manager and help
the Company become more competitive. If you desire to sell your Shares, please
sign the back of all your Stock Certificates and sign the blue pages. If you
have lost your Shares, please tell us that on any of the blue pages in writing.
This is an incomplete Statement and you should read the full Offer for
a more complete Statement.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION WILL
NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders
(the "Shareholders" of the Offer to Purchase (as defined below). Shareholders
who tender shares are referred to herein as "Certificate Shareholders."
Shareholders whose Shares are not immediately available or who cannot deliver
their shares and all other documents required hereby to the Depository on a
timely basis on or prior to the Expiration Date (as defined in the Offer to
Purchase ) must tender their Shares according to the guaranteed delivery
procedure set forth in "The Offer - Section 4" of the Offer to Purchase.
All Stock Certificates should be returned to the Depository at:
MIMBRES VALLEY ABSTRACT AND TITLE CO
210 E. Poplar
Deming, NM 88030
(505) 546-8896
<PAGE>
- --------------------------------------------------------------------------------
|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE Depository AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s)____________________________________________
Window Ticket Number (if any)______________________________________________
Date of Execution of Notice of Guaranteed Delivery_________________________
Name of Institution which Guaranteed Delivery______________________________
- --------------------------------------------------------------------------------
================================================================================
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
Name(s) and address(es) of Registered Holder(s) Share(s) Tendered
(please fill in, if blank) (attach additional
signed list if necessary)
- --------------------------------------------------------------------------------
Share Total Number of
Number(s) Number of Shares
Shares tendered*
- ------------------------------------
- ------------------------------------
- ------------------------------------
- ------------------------------------
- ------------------------------------
- ------------------------------------
- ------------------------------------
- ------------------------------------
- ------------------------------------
Total
Shares
Tendered
- --------------------------------------------------------------------------------
*If you wish to tender fewer than all Shares, please indicate in this column
the number of Shares you wish to tender; otherwise all Shares will be
deemed to have been tendered.
================================================================================
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW, PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to the Purchasers Shares in Mimbres
Valley Farmer's Association, Inc. pursuant to the Purchasers' Offer to Purchase,
dated June 1, 1996 (the "Offer to Purchase"), at a price of $50.00 per Share,
net to the seller in cash and without interest, all duly tendered outstanding
Shares, upon the terms and subject to the conditions set forth in the Offer to
Purchase, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer). The Purchasers reserve
the right to transfer or assign to one or more of its affiliates the right to
purchase Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
Shares pending tendered herewith in accordance with the terms of the Offer,
the undersigned hereby sells, assigns, and transfers to, or upon the order of,
the Purchaser all right, title, and interest in and to all Shares being
tendered hereby (and any and all other Shares, securities, or distributions
issued or issuable in respect thereof on or after June 1, 1996 and hereby
irrevocably appoints the Depository the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and any such
other Shares, securities, or distributions) with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with
an interest), to (a) deliver Stock Certificates for such Shares (and any such
other shares, securities, or distributions) together with all accompanying
evidence of transfer and authenticity to or upon the order of the Purchaser,
(b) present such Shares (and any such other Shares, securities, or
distributions) for registration and transfer on the books of the Company, and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares ( and any such other Shares, securities or
distributions), all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints John Brownfield, John
Keck, J.W. Donaldson, Jr., Frederick H. Sherman, Kenny Stevens, and Harold
Morrow, and each of them, attorneys-in-fact and proxies of the undersigned,
each with full power of substitution, to the full extent of the undersigned's
rights, including to vote in such manner as each such attorney-in-fact and proxy
or his substitute shall, in his sole discretion, deem proper, and otherwise
act (including pursuant to written consent) at any meeting of shareholders
(whether annual or special and whether or not an adjourned meeting) or
otherwise. This power of attorney and proxy is irrevocable and is granted in
consideration of, and is effective upon, the Purchaser's oral or written notice
to the Depository of its acceptance for payment of such Shares in accordance
with the terms of the Offer. Such acceptance for payment shall revoke prior
powers of attorney and proxies granted by the undersigned at any time with
respect to such Shares (and any such other Shares, securities, or distributions)
and no subsequent powers of attorney or proxies will be given, nor any
subsequent written consent executed, with respect thereto by the undersigned
(and if given will not be effective). The Purchaser reserves the right to
require that, in order for Shares to be validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be
able to exercise full voting rights and other rights of a record and
beneficial holder, including rights in respect of acting by written consent,
with respect to the Shares.
The undersigned hereby represents and warrants that: (i) the
undersigned has full power and authority to tender, sell, assign, and transfer
the Shares tendered hereby (and any and all other Shares, securities, or
distributions issued or issuable in respect thereof on or after June 1, 1996,
and (ii) when the same are accepted for payment by the Purchaser, the Purchaser
will acquire good, marketable, and unencumbered title thereto, free and clear
of all liens, restrictions, charges, claims, and encumbrances and the same will
not be subject to any adverse claim. The undersigned, upon request, will
execute and deliver any additional documents deemed by the Depository or
the Purchaser to be necessary or desirable to complete or confirm the sale,
assignment, and transfer of the Shares tendered hereby (and any such other
Shares, securities, or distributions).
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors, and assigns of the undersigned. Except as stated in the Offer,
this tender is irrevocable.
The undersigned understands that tenders of Shares and acceptance
for payment of Shares pursuant to any of the procedures described in "The
Offer -Section 4" of the Offer to Purchase and in the instructions hereto
will constitute a binding agreement between the undersigned and the Purchaser
upon the terms and subject to the conditions set forth in the Offer.
<PAGE>
Unless otherwise indicated herein under "Special Payment
Instructions," please issue the check for the purchase price of Shares purchased
and/or return any Stock Certificates for Shares not tendered or accepted for
payment in the name(s) of the registered holder(s) appearing under
"Description of Shares Tendered." Similarly, please mail the check for the
purchase price and/or return any Stock Certificates for Shares not tendered
or accepted for payment (and accompanying documents, as appropriate) to the
undersigned at the address appearing under "Description of Shares Tendered".
In the even that the Special Payment Instructions are completed, please
issue the check for the purchase price and/or return such Stock Certificates
to the person or persons so indicated. The undersigned recognizes that the
Purchasers have no obligation pursuant to the Special Payment Instructions to
transfer any Shares from the name of the registered holder thereof if none of
the Shares of such registered holder are tendered to the Purchaser for purchase
pursuant to the Offer or the Purchaser does not accept for payment any of the
Shares so tendered and subject to conditions in the Offer to Purchase.
Purchasers are authorized and have a power of attorney for me by this
document to obtain a replacement certificate for my Farmer's Inc. Shares and
get a replacement for transfer to Purchasers.
Dated:___________________ ________________________________________
Shareholder's signature
STATE OF NEW MEXICO )
) ss.
COUNTY OF )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me this _______ day
of
____________, 1996, by _____________.
___________________________
NOTARY PUBLIC
My Commission Expires:
- ----------------------
________________________________________
SPECIAL PAYMENT INSTRUCTIONS
To be completed ONLY if Shares not
tendered or not accepted for payment
and/or the check for the purchase price
of Shares purchased are to be issued in
the name of someone other than the
undersigned.
Issue: |_| Check and/or
|_| Stock Certificates to:
Name____________________________________
(Please Print)
Address_________________________________
________________________________________
(Include Zip code)
________________________________________
(Tax Identification or Social
Security No.) (See Substitute Form
W-9 on reverse side)
________________________________________
2
<PAGE>
Exhibit (a)(4)
Notice of Guaranteed Delivery
for
Tender of Shares
of
MIMBRES VALLEY FARMER'S ASSOCIATION INC.
dba FARMER'S INC.
This Notice of Guaranteed Delivery, or a form substantially equivalent
to this form, must be used to accept the Offer (as defined below) if (i)
stock certificates ("Stock Certificates") for shares (Shares) representing
ownership of Mimbres Valley Farmer's Inc. dba Farmer's Inc., a New Mexico
corporation, are not immediately available or (ii) if time will not permit all
required documents to reach Mimbres Valley Abstract and Title Company (the
"Depository") prior to the Expiration Date (as defined in "The Offer -
Section 1" of the Offer to Purchase (as defined below)). This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier, or mail or
transmitted by telegram or facsimile transmission to the Depository. See
"The Offer - Section 4" of the Offer to Purchase.
The Depository for this Offer is:
MIMBRES VALLEY ABSTRACT AND TITLE COMPANY
210 E. Poplar
Deming, NM 88031
(505) 546-8896
Delivery of this Notice of Guaranteed Delivery to an address other than
as set forth above, or transmission of instructions via facsimile
transmission other than as set forth above, will not constitute a valid
delivery.
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by a financial
institution that is a member of the Stock Transfer Association's approved
medallion program under the instructions thereto, such signature guarantee
must appear in the applicable space provided in the signature box on the
Letter of Transmittal.
Check with your local bank to see if they have a medallion certificate
to transfer stock or talk with your broker.
Ladies and Gentlemen:
The undersigned tenders to Purchasers upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 1, 1996 and the related
Letter of Transmittal (which together constitute the "Offer"), receipt of
each of which is hereby acknowledged the number of Shares indicated below
pursuant to the guaranteed delivery procedure set forth in "The Offer -
Section 4" of the Offer to Purchase.
Number of Shares:___________________ SIGN HERE
Share Certificate Nos. (if available):
Signature(s)___________________________________________________________________
Name(s)______________________________________________________________________
(Please Print)
Address_______________________________________________________________________
______________________________ ______________________________________
Zip Code
Area Code & Telephone No._____________
Date:___________________
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution (as defined in the Offer
to Purchase), hereby guarantees that the certificates representing the
Shares tendered hereby in proper form for transfer, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantee and any other documents required by the
Letter of Transmittal, will be received by the Depository at one of its
addresses set forth above within five (5) American Stock Exchange trading days
after the date of execution hereof.
------------------------------------
Name of Firm
------------------------------------
Authorized Signature
------------------------------------
Name (print)
------------------------------------
Address
------------------------------------
City, State Zip Code
Dated:_____________________ ________________________________
Area Code and Telephone No.
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM. CERTIFICATES
FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
Exhibit (A)(5)
TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS
PAYER'S NAME: MIMBRES VALLEY ABSTRACT AND TITLE COMPANY
=============================================================================
TIN___________________
Part 1--PLEASE PROVIDE YOUR TIN Social Security Number
SUBSTITUTE IN THE BOX AT RIGHT AND CERTIFY or Employer
FORM W-9 BY SIGNING AND DATING BELOW Identification Number
Department of the -----------------------------------------------------------
Treasury and Part 2
Awaiting TIN
----------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT (1) the number shown on this form is my correct
taxpayer Identification number (or I am waiting for
a number to be issued to me), (2) I am not subject to
backup withholding either because I have not been notified
by the Internal Revenue Service ("IRS") that I am subject
to backup withholding as a result of a failure to report
all interest or dividends or the IRS has notified me that
I am no longer subject to backup withholding, and (3) any
other information provided on this form is true and correct.
Payer's Request for Taxpayer
SIGNATURE_________________________________________
Identification Number (TIN) DATE______________________________________________
and Certification You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup
withholding because of underreporting interest or
dividends on your tax return and you have not been
notified by the IRS that you are no longer subject to
backupwithholding.
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO
THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or
delivered an application to receive a taxpayer identification number to the
appropriate Interman Revenue Service Center or Social Security Administration
Office or (2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the time
of payment, 31% of all payments of the purchase price made to me thereafter will
be withheld if I then provide a number within 60 days.
Signature________________________________ Date______________________
- --------------------------------------------------------------------------------
Questions and requests for assistance or additional copies of the Offer
to Purchase, The Letter of Transmittal, and other tender offer materials may
be directed to the Information Agent as set forth below:
The Information Agent for the Offer is:
Sherman and Sherman, P.C., 210 South Silver, P.O. Box 850, Deming, NM 88030
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT
SHAREHOLDERS SIGN HERE
Complete substitute Form W-9 on reverse side
Signature(s) of
Owner(s)______________________________________________________________________
__________________________________________________________________
Dated________________________
Must be signed by registered holder(s) exactly as name(s) appear(s)
on Stock Certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by an attorney-in-fact,
executor, administrator, trustee, guardian, officer of a corporation, agent, or
any other person acting in a fiduciary or representative capacity, please
provide the necessary information.
Name(s)_________________________________________________________________________
______________________________________________________________________________
__
(Please Type or Print)
Capacity (full
title)___________________________________________________________
Address_____________________________________________________________________ __
________________________________________________________________________________
Zip Code
- --------------------------- ----------------------------------------------
Area Code and Telephone No. Tax Identification or Social Security No(s).
(See Substitute Form W-9 on reverse side)
GUARANTEE OF SIGNATURE(S)
Authorized
Signature____________________________________________________________
Name____________________________________________________________________________
(Please Type or Print)
Title___________________________________________________________________________
Name of
Firm____________________________________________________________________
Address_________________________________________________________________________
Zip Code
_____________________________
Dated________________________________________
Area Code and Telephone No.
________________________________________
<PAGE>
INSTRUCTIONS
Constituting Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Stock Certificates need not be endorsed
and share powers and signature guarantees are unnecessary unless (a) a Share
is registered in a name other than that of the person surrendering the Share or
(b) such registered holder completes the box entitled "Special Payment
Instructions" or "Special Delivery Instructions." In the case of (a) above, such
Share must be duly endorsed or accompanied by a properly executed share
power, with the endorsement or signature on the share power and on the Letter
of Transmittal guaranteed by a financial institution that is a member of the
Stock Transfer Association's approved medallion program (such as STAMP,
SEMP, OR MSP) (an "Eligible Institution"), unless surrendered on behalf
of such Eligible Institution. In the case of (b) above, the signature on
the Letter of Transmittal must be similarly guaranteed.
The method of delivery of Shares, this Letter of Transmittal, and all
other required documents is at the option and risk of the tendering shareholder
and will be deemed made only when actually received by the Depository. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
2. Inadequate Space. If the space provided herein is inadequate, the
Share certificate numbers and/or the number of Shares and any other
required information should be listed on a separate schedule attached
hereto and separately signed on each page hereof in the same manner as this
Letter of Transmittal is signed.
3. Partial Tenders. If fewer than all the Shares evidenced by
any certificate submitted are to be tendered, fill in the number of Shares which
are to be tendered in the box entitled "Number of Shares Tendered." In such
case, new Certificate(s) for the remainder of the Shares that were evidenced
by old Certificate(s) will be sent to the Company as soon as practicable
after the expiration of the Offer. All Shares represented by Certificate(s)
delivered to the Depository will be deemed to have been tendered unless
otherwise indicated.
4. Signature on Letter of Transmittal, Share Powers, and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face(s) of the Stock Certificate(s) without alteration,
enlargement, or any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or
more joint owners, all such owners must sign the Letter of Transmittal.
If any tendered Shares are registered in different names on the
stock certificate(s), it will be necessary to complete, sign and submit
as many separate Letters of Transmittal as there are different registrations
of Stock Certificates.
<PAGE>
When this Letter of Transmittal is signed by the registered holder(s)
of the Shares evidence by Stock Certificates listed and submitted herewith,
no endorsements of Stock Certificates or separate stock powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Stock Certificates listed and tendered hereby, or if
payment is to be made or Stock Certificates for Shares not accepted for
payment or not tendered are to be issued to a person other than the registered
holder, then the tendered Stock Certificates must be endorsed or accompanied by
appropriate stock powers in either case signed exactly as the name or names
of the registered holder or holders appear(s) on the Stock Certificates with the
signatures on the Stock Certificates or stock powers guaranteed as aforesaid.
See Instruction 1.
If this Letter of Transmittal, or any Stock Certificate of stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation, or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing, and proper evidence satisfactory to the Purchasers of such person's
authority so to act must be submitted.
If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the Shares evidenced by Stock Certificate(s) listed
and submitted herewith, the Stock Certificate(s) must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name(s) of
the registered holder(s) appear(s) on the Stock Certificate(s) unless this
Letter of Transmittal is signed by an Eligible Institution. Signatures on such
Stock Certificates or stock powers must be guaranteed by an Eligible
Institution.
5. Special Payment and Delivery Instructions. If a check and/or
Stock Certificates for unpurchased Shares and/or Shares not accepted for
payment or not tendered are to be issued in the name of a person other than the
signer of this Letter of Transmittal, or if a check is to be sent
and/or Stock Certificates are to be returned to someone other than the signer
of this Letter of Transmittal or to an address other than that shown above,
the appropriate boxes (entitled "Special Payment Instructions" or
"Special Delivery Instruction") on this Letter of Transmittal should be
completed. See Instruction 1.
6. Requests for Assistance or Additional Copies. Requests for
assistance may be directed to the Information Agent at the address set
forth below. Additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery, and the Guidelines for
Certification of Taxpayer Identification Number of Substitute Form W-9 may
be obtained from the Information Agent at the address set forth below or form
your broker, dealer, commercial bank, trust company, or other nominee.
7. Tax Identification Number. Federal income tax law generally
requires that a shareholder whose Shares are accepted for payment must
provide the Depository with his correct Taxpayer Identification Number ("TIN"),
which, in the case of a shareholder who is an individual, is his social security
number. If the Depository is not provided with
2
<PAGE>
the correct TIN or an adequate basis for an exemption, such shareholder may
be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, backup withholding at the rate of 31% may be imposed upon the gross
proceeds resulting from the Offer. If withholding results in an overpayment of
taxes, a refund may be obtained.
Exempt shareholders (including, among other, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. To prevent possible erroneous backup withholding,
an exempt shareholder must enter its correct TIN IN Part 1 of Substitute Form
W-9, write "Exempt" in Part 2 of such form, and sign and date the form. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 (the "W-9 Guidelines") for additional instructions. In
order for a non-resident alien or foreign entity to qualify as exempt, such
person must submit a completed Form W-8, "Certificate of Foreign Statue." Such
forms may be obtained from the Depository.
If the Shares are held in more than one name or are not in the name of
the actual owner, consult the W-9 Guidelines for information on which TIN to
report.
If you do not have a TIN, consult the W-9 Guidelines for instructions
on applying for a TIN, check the box in Part 2 of the Substitute Form W-9, and
sign and date the form. If the box in Part 2 is checked, the shareholder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below. If you provide you TIN to the Depository within
60 days of the date the Depository receives such form, any amounts withheld
during such 60-day period will be refunded to you by the Depository. Note:
Checking the box in Part 2 on the form means that you have already applied for
a TIN or that you intend to apply for one in the near future.
IMPORTANT: This Letter of Transmittal (or a facsimile hereof),
properly completed and duly executed, together with Stock Certificates and
all other required documents or the Notice of Guaranteed Delivery must be
received by the Depository prior to the Expiration Date.
Exhibit (a)(6)
AGREEMENT
1. The undersigned John Brownfield, John Keck, Kenny Stevens, Frederick
H. Sherman, J.W. Donaldson Jr., and Harold Morrow (hereinafter "Beneficial
Owners") desire to invest by the purchase of as many shares as possible
either as a friendly or hostile take-over of Mimbres Valley Farmer's
Association, Inc. (hereinafter Farmer's). We each agree to pay our pro-rata
share of all the expenses incident to the take-over, including filing fees and
attorney's fees. The estimated cost of the attorney's fees through Jenkens &
Gilchrist's firm are estimated to be $25,000.00 to $50,000.00, however, if each
of the parties takes the responsibility for filling out their own
documentation, and if Frederick Sherman does as much of the legal work as
possible at a lesser rate than charged by the Jenkens & Gilchrist firm, then
that will reap substantial savings to the parties. Sherman is not an expert
in securities work and will have all work reviewed by either a New Mexico or
Texas securities expert. If any of the parties have to hire services done
which is to the benefit of the parties, then those costs would also be
shareable costs. Sherman would not charge for any costs that would not be to
the benefit of all the parties, or that would not be the kind of expenses that
would decrease the expenses of the Jenkens & Gilchrist firm.
2. It is contemplated that there would be six (6) families with eight
or more of the Beneficial Owners each participating in this tender to
purchase shares. Any of the Beneficial Owners that was not able to purchase as
much stock at this time would be authorized to buy sufficient stock from
each of the Beneficial Owners, and each of the Beneficial Owners herein
agree to sell sufficient stock so that each of the six of the Beneficial Owners
of this buying group, together with their families, will each be able to have
blocks of six (6) equal shares of stock. This right to buy would be open for
a period of 5 years at the prevailing rate of interest paid by that Purchaser
for Kenny and 60 days for everyone else as Kenny has a particular financial
problem requiring more time.
3. It is recognized that each of the of the Beneficial Owners of this
group and their respective families bring certain expertise to the group. No one
will charge for the respective services or expertise toward the common goal of
this or subsequent offers of purchase except as provided above.
4. It is agreed that the purpose of this tender offer is to actually
help Farmer's Inc. become more competitive in a market with increased
competition. There is a new store being built named Pepper's. Furr's Grocery
Store is also getting very competitive. With the current management at
Farmer's, there is a good likelihood that Farmer's will not be competitive in
this environment and will lose substantial money and market share. In
addition, the number of stockholders and the current structure of the Board and
management are such that the likelihood of being competitive is significantly
decreased. In addition, the amounts of dividends that are given to stockholders
are highly inadequate, such that the interests of the stockholders are not
adequately being represented. If the current Board is receptive to making
Farmer's more competitive in these ways, then it is likely that this will not
be a hostile take-over but a friendly take-over, however, personalities of
the Beneficial Owners of the current Board may prevent improvement of Farmer's
which would be adverse to the interests of the shareholders and the community
necessitating this tender offer. It is the desire for all the shares to be
purchased and to eliminate the tremendous waste that has been caused by
ownership of fractional shares.
<PAGE>
The restrictions on ownership of small numbers of shares has led to the lack
of accountability to the shareholders who have so little power and lack of
interest by the shareholders as they each have so little invested. The cost
to comply with SEC regulations is currently costing more each year to comply
with than the shares have customarily been sold for. It is envisioned that
this group will acquire shares and the families may be included as part of the
group with legal ownership in several of the members of the family but
beneficial ownership in the six Beneficial Owners. Each family member will
also need to sign this agreement by fax or otherwise. There may be a new Board
of Directors elected and the Bylaws amended to allow the restructuring to
permit ownership of greater numbers of shares in any one individual and to
restructure the corporation to increase its competitiveness. If not enough
shares are purchased to allow changing the Bylaws and for electing such new
Directors as necessary to accomplish these purposes, attempts will continue to
be made to gain control of Farmer's to the benefit of the shareholders and to
make it more competitive. Attempts will be made to pass on all costs incurred
in this take-over, beyond the actual cost of shares, to Farmer's if this
public offering is either partially or wholly successful. It is contemplated
that the organization will allow cumulative voting to protect the interests of
any minority shareholder, and that each of the six (6) Beneficial Owners
herein will be willing to serve as Directors as soon as they may qualify
under the current Bylaws or amended Bylaws.
5. Each of the signatories herein trust each other and are joining
together in the hopes that they can accomplish good goals for Farmer's and
for the shareholders of Farmer's. As an example, in the past the most that
shares were customarily sold for was between $15.00 and $30.00. Under the
offering, each shareholder will be offered $50.00 for their shares. Each of the
parties agree that if there is any dispute with each other, they will initially
mediate the matter through a professional mediator, and if that does not
work, that all disputes between any of participants herein or their families
regarding any of the subject matter of this Agreement or this tender offer,
or their future relationships in the current organization will be
resolved by binding arbitration through an individual each of the parties can
agree to, and if that cannot be implemented, they agree to Earl Spruiell as an
independent arbiter. If no one can be agreed to or is unwilling to act, then the
selection will be made by the District Court Judge in Deming or as otherwise
designated by the New Mexico Supreme Court. In no event will any of the
disputes between the parties or families involving these transactions be
submitted to Court for anything other than enforcement of the Agreement or as
provided for in paragraph 7, and if such does occur, the parties or persons that
cause such expense agree to be obligated for all the attorney's fees and the
costs of those that have to defend such action.
6. It is understood that attempts will be made to gain concurrence on
all major matters, and that no costs or expenses will be incurred by any
person obligating the others that is not agreed to by at least the majority
of the Beneficial Owners.
7. If any person herein changes their mind regarding this association,
they will still keep confidential all matters relating herein, and will
continue to have a fiduciary obligation to this association. The
association will be entitled, and are authorized to obtain a restraining order
against any person, including family members that violate this,
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or in any way jeopardize the public offering being initiated as well as
an action for damages.
8. Kenny Stevens has done an exemplary job of management of Farmer's in
the past, and it is hoped he will be the manager of Farmer's. However, there
is no contract agreement with Mr. Stevens that would require an articulated
cause for his dismissal if he chooses to be the manager. Nor would any of the
parties in this group have any right to any position or continuing positions
with Farmer's.
9. Should any party herein withdraw their capital or support, then
such party agrees and understands that the group may borrow the funds or
obtain alternative investors to take his place. That individual along with
family will be obligated for such sum until completion of the offering or
replacement, at which time all the remaining participants shall have an equal
right to buy out that party's and family's interests together with his share
of costs so all of the remaining family initiators have an equal share or
opportunity for an equal share. It is agreed that the sales of stock will be
subject to the rights of each of the of the Beneficial Owners hereto to first
purchase shares before any of the shares offered to other parties not signatory
herein. No shares will be sold outside this group for a period of 2 years
to allow stability and confidence in the community as well as implementing the
goals of making Farmer's more competitive. Each of the undersigned will obtain
a power of attorney from family members or will have family members agree to
the agreement by fax or otherwise and will indemnify and hold harmless all the
other of the Beneficial Owners and their families from any actions of family
members who have not agreed to this agreement.
10. Genie Rush of Mimbres Valley Abstract and Title Company is hereby
given a limited power of attorney to divide the shares so that each of
the six Beneficial Owners and their extended families have an equal 1/6 share
of all stock. If extended family members already have stock, they will get less
shares so that all six family groups will end up with equal voting power.
Genie Rush will follow the directions of each beneficial owner as to how many
shares will be purchased by each extended family member. This equal number of
shares may be decreased by any Beneficial Owner who is unable to purchase their
equal share at which time the remaining of the Beneficial Owners or their
extended families or Alamo Ranch Co. or its Beneficial Owners may purchase
those Shares not purchased, subject to the right of purchase for five years for
Kenny or 60 days for the others plus interest costs incurred. Frederick H.
Sherman is hereby given a limited power of attorney by each Beneficial Owner
and extended family member to sign their respective names to all documents to
be filed pursuant to the Offer to Purchase, any extensions of time, any
amendments to be filed or anything else that needs to be done to effectuate the
purposes contemplated by this agreement and the Offer to Purchase.
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/s/ John E. Keck /s/ Linda C. Keck
- ------------------------------- -------------------------------
John E. Keck Linda C. Keck
/s/ Melinda E. Dougherty /s/ Sean P. Dougherty
- ------------------------------- -------------------------------
Melinda E. Dougherty Sean P. Dougherty
/s/ Sean P. Dougherty, Jr. /s/ Christopher J. Dougherty
by Sean Dougherty by Melinda Dougherty
- ------------------------------- -------------------------------
Sean P. Dougherty, Jr. Christopher J. Dougherty
/s/ Albert P. Keck, II /s/ Caroline D. Keck
- ------------------------------- -------------------------------
Albert P. Keck, II Caroline D. Keck
/s/ Alexandra M. Keck /s/ Julianna D. Keck
by Caroline Keck by Caroline Keck
- ------------------------------- -------------------------------
Alexandra M. Keck Julianna D. Keck
/s/ Edward K. Saylor /s/ Victoria M. Saylor
- ------------------------------- -------------------------------
Edward K. Saylor Victoria M. Saylor
/s/ John E. Keck
- -------------------------------
John E. Keck, President of Alamo Ranch Co.
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<PAGE>
/s/ Frederick H. Sherman /s/ Janie Jontz Sherman
- ------------------------------- -------------------------------
Frederick H. Sherman Janie Jontz Sherman
/s/ Jerah E. Sherman /s/ F. Jakub Sherman
- ------------------------------- -------------------------------
Jerah E. Sherman F. Jakub Sherman
/s/ Ben Sherman /s/ Kathy Strauss
- ------------------------------- -------------------------------
Ben Sherman Kathy Strauss
/s/ David Strauss /s/ Amy Strauss
- ------------------------------- -------------------------------
David Strauss Amy Strauss
/s/ Kristin Strauss /s/ Ben K. Sherman ###-##-####
- ------------------------------- -------------------------------
Kristin Strauss Ben K. Sherman
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<PAGE>
/s/ John Bryan Johnson /s/ Jill M. Johnson
- ------------------------------- -------------------------------
John Bryan Johnson Jill M. Johnson
/s/ J.W. Donaldson, Jr. /s/ Dianne Donaldson
- ------------------------------- -------------------------------
J.W. Donaldson, Jr. Dianne Donaldson
/s/ Jeremy Donaldson /s/ Luke Donaldson
- ------------------------------- -------------------------------
Jeremy Donaldson Luke Donaldson
/s/ Sarah Donaldson /s/ J.W. Donaldson, Pres. J.W. Donaldson
Co.
- -------------------------------
- --------------------------------------------
Sarah Donaldson J.W. Donaldson, President J.W. Donaldson,
Co.
/s/ Johnny M. Johnson /s/ Ruth Ann Johnson
- ------------------------------- -------------------------------
Johnny M. Johnson Ruth Ann Johnson
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<PAGE>
/s/ John Brownfield /s/ Marsha M. Brownfield
- ------------------------------- -------------------------------
John Brownfield Marsha M. Brownfield
/s/ Keith D. Brownfield /s/ Jesse L. Brownfield
- ------------------------------- -------------------------------
Keith D. Brownfield Jesse L. Brownfield
/s/ Ella Rose MacGibbon /s/ Chris Sanders
- ------------------------------- -------------------------------
Ella Rose MacGibbon Chris Sanders
/s/ Pam Sanders /s/ Brad Sanders by Chris Sanders
- ------------------------------- ---------------------------------
Pam Sanders Bradley Sanders
/s/ Clinton Sanders by Chris Sanders /s/ Cory Sanders by Chris Sanders
- ------------------------------- -------------------------------
Clinton Sanders Cory Sanders
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<PAGE>
/s/ Kenneth E. Stevens /s/ Craig Elliot Stevens
- ------------------------------- -------------------------------
Kenneth Stevens Craig Elliot Stevens
/s/ Joel Stevens /s/ Kyle Stevens
- ------------------------------- -------------------------------
Joel Bradley Stevens Kyle Edward Stevens
/s/ Katherine Stevens /s/ Beth Stevens
- ------------------------------- -------------------------------
Katherine Stevens Beth Stevens
/s/ Kelley Stevens /s/ Nathaniel Stevens
- ------------------------------- -------------------------------
Kelly Stevens Nathaniel Stevens by Kelly Stevens
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<PAGE>
/s/ Harold Morrow /s/ Diane W. Morrow
- ------------------------------- -------------------------------
Harold Morrow Diane W. Morrow
/s/ Ashlee M. Morrow /s/ Dustin Morrow
- ------------------------------- -------------------------------
Ashlee M. Morrow Dustin W. Morrow
/s/ Jordon Morrow /s/ Harold Morrow
- ------------------------------- -------------------------------
Jordon C. Morrow Harold Morrow, President Morrow & Company
/s/ Jack F. Morrow /s/ Betty M. Morrow
- ------------------------------- -------------------------------
Jack F. Morrow Betty M. Morrow
/s/ Patsy T. Merrill /s/ Frank Merrill
- ------------------------------- -------------------------------
Patsy T. Merrill Frank Merrill
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