<PAGE>
Filed with the Securities and Exchange Commission, via
Edgar, on August , 1996
---
Registration No. 333-
=========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
BUCK HILL FALLS COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 7999 24-0536840
- ------------------------- ------------------- -----------------
(State or other jurisdic- (Primary Standard (I.R.S. Employer
tion of incorporation Industrial Identification
or organization) Classification Code No.)
Number)
Cresco Road, Buck Hill Falls, Pennsylvania 18323, 717-595-7511
-----------------------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
David B. Ottaway
Chairman of the Board
Buck Hill Falls Company
Cresco Road
Buck Hill Falls, Pennsylvania 18323
717-595-7511
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------
Copy to:
William J. Morehouse
Wolf, Block, Schorr and Solis-Cohen
Twelfth Floor Packard Building
Philadelphia, Pennsylvania 19102
(215) 977-2190
<PAGE>
<PAGE>
Approximate date of commencement of proposed sale to the public:
As promptly as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933 check the following box. / /
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. / /
---------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------
Proposed Proposed
Title of each offering maximum Amount of
class to Amount to price aggregate registration
be registered be registered per share(1) offering price fee
- --------------------------------------------------------------------------
Class A Common 75,000 $20.00 $1,500,000 $517.24
Stock, no shares
par value
Common Stock 31,463 20.00 629,260 216.99
no par value shares -------
$734.23
=======
- --------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
==========================================================================
<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY
Cross-Reference Sheet Required by Item 501(b) of
Regulation S-K Showing Location in Prospectus of
Information Required by Items of Part I of Form S-1
Item No. Form S-1 Item and Caption Location in Prospectus
- -------- ------------------------- -----------------------
1. Forepart of the Registration Forepart of the
Statement and Outside Front Statement and Front Cover
Cover Page of Prospectus Page of Prospectus
2. Inside Front and Outside Back Inside Front
Cover Pages of Prospectus Cover Page of Prospectus
3. Summary Information and Risk Prospectus Summary; Risk
Factors and Ratio of Earnings Factors; Selected
to Fixed Charges Consolidated Financial
Data
4. Use of Proceeds Use of Proceeds
5. Determination of Offering The Offering
Price
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Front Cover Page of
Prospectus; The Offering
9. Description of Securities Front Cover Page of
to be Registered Description of Capital
Stock
10. Interests of Named Experts Not Applicable
and Counsel
11. Information with Respect Prospectus Summary; Risk
to the Registrant Factors The Company;
Dilution; Selected
Consolidated Financial
Data; Management's
Discussion and Analysis of
Financial Condition and
Results of Operations;
Business; Management;
Security Ownership of
Certain Beneficial Owners
and Management;
Description of Capital
Stock; Legal Matters;
Experts; Additional
Information; Consolidated
Financial Statements
12. Disclosure of Commission Not Applicable
Position on Indemnification
for Securities Act Liabilities
<PAGE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an
offer to sell or the solicitation of any offer to buy nor shall there be
any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
<PAGE>
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST , 1996.
PROSPECTUS ---
75,000 Shares
BUCK HILL FALLS COMPANY
Class A Common Stock
(No Par Value)
The Class A Common Stock (the "Class A Stock") is being offered by
Buck Hill Falls Company (the "Company") only to those persons who own
Common Stock in the Company and are an owner or co-owner of a cottage
and/or lot in the Buck Hill Falls community ("Qualified Owners").
Qualified Owners are offered the opportunity to purchase 200 shares per
property for $20 per share or an aggregate price of $4,000, payable over
five years at $800 annually or, if paid in full by October 31, 1996, for
$17.50 per share or an aggregate price of $3500 for 200 shares. All 200
shares must be purchased by a Qualified Owner if any are purchased. If
all shares of Class A Stock are not subscribed within 15 days after the
date of this Prospectus, the Company intends to offer Qualified Owners who
did subscribe the opportunity to purchase up to 200 additional shares per
property on the same terms. See "The Offering." The shares of Class A
Stock are identical to the outstanding shares of the Company's Common
Stock except that the Class A Stock may, with certain exceptions, only be
held by or transferred to a Qualified Owner. See "Description of Capital
Stock."
Upon completion of this offering, the Company intends to offer the
holders of its Common Stock who are not Qualified Owners the opportunity
to purchase additional shares of Common Stock at $20 per share. See
"The Offering".
There is no market for the Class A Stock and, because its
transferability is severely restricted, none is expected to develop
following this offering.
THE CLASS A COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY SUCH STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
==========================================================================
Price to Underwriting Proceeds to
Public (1) Discount (2) Company (1)(3)
- --------------------------------------------------------------------------
Per Share $20.00 $ None $ 20.00
Total $1,500,000 $ None $1,500,000
==========================================================================
(1) Assumes all shares are subscribed and are paid for over five
years. If payment for all shares is made on or prior to
October 31, 1996, the Price to Public would be $17.50 per share
and the total Proceeds to Company would be $1,312,500 (less
expenses). There is no minimum number of shares that must be sold
if any shares are to be sold.<PAGE>
<PAGE>
(2) This offering is made directly by the Company through its regular
officers and directors. No commissions or fees will be paid.
(3) Before deducting expenses of the offering to be paid by the
Company, estimated at $50,000.
The date of this Prospectus is , 1996.
--------------------
<PAGE>
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST , 1996.
PROSPECTUS
SHARES
------
BUCK HILL FALLS COMPANY
COMMON STOCK
(NO PAR VALUE)
Buck Hill Falls Company (the "Company") has completed an offering
of Class A Common Stock (the "Class A Stock") limited to those persons who
own Common Stock in the Company and are an owner or co-owner of a cottage
and/or lot in the Buck Hill Falls community ("Qualified Owners"). A total
of shares of Class A Stock were subscribed by Qualified Owners
-------
at an average price of $ per share. For a description of the terms
-----
of the offering of Class A Stock, see "The Offering -- Class A Stock."
The shares of Class A Stock are identical to the shares of the Company's
Common Stock offered hereby except that the Class A Stock may, with
certain exceptions, only be held by or transferred to a Qualified Owner.
See "Description of Capital Stock."
The purpose of this offering is to give the holders of the
Company's Common Stock of record on the date of the offering of Class A
Stock, and who are not Qualified Owners, the opportunity to purchase at
$20 per share up to that number of additional shares of Common Stock
which, in the judgment of the Company, would enable each such person who
so desires to maintain his or her percentage interest in the Company. For
more information concerning this offering and how to subscribe, see "The
Offering -- Common Stock."
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY SUCH STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
==========================================================================
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(1)(3)
- --------------------------------------------------------------------------
Per Share $20 $ None $20
Total $ $ None $
----- ------
==========================================================================
(1) Assumes all shares are sold. There is no minimum number of shares
that must be sold if any shares are to be sold.
(2) This offering is made directly by the Company through its regular
officers and directors. No commissions or fees will be paid.
(3) Before deducting expenses of the offering to be paid by the
Company, estimated at $5,000.
The date of this Prospectus is , 1996.
-------------------
[ALTERNATIVE COVER PAGE]<PAGE>
<PAGE>
Until , 1996 all dealers effecting
------------------- transactions in the registered
securities, whether or not participating in this distribution, may be
required to deliver a prospectus.
TABLE OF CONTENTS
-----------------
PAGE
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . 3
Selected Consolidated Financial Data . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . 8
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Security Ownership of Certain Beneficial Owners and Management . . . 20
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . 21
The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Additional Information . . . . . . . . . . . . . . . . . . . . . . . 24
Index to Financial Statements . . . . . . . . . . . . . . . . . . . F-1
AVAILABLE INFORMATION
---------------------
The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934 ("Exchange Act") and in accordance
therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at its regional offices located
at Seven World Trade Center, 13th Floor, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained at prescribed rates from the Public
Reference Section of the Commission, Washington, D.C. 20549.
The Company delivers to its shareholders annual reports
containing audited financial statements with a report thereon by its
independent certified public accountants.
2<PAGE>
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE
DETAILED INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS
PROSPECTUS. AS USED IN THIS PROSPECTUS, THE TERM "COMPANY" INCLUDES BUCK
HILL FALLS COMPANY AND ITS WHOLLY-OWNED SUBSIDIARY, BUCK HILL WATER
COMPANY, UNLESS THE CONTEXT OTHERWISE INDICATES.
THE COMPANY
Buck Hill Falls Company is engaged in the provision of a variety
of services, many of which are for the benefit of residents of Buck Hill
Falls, Barrett Township, Pennsylvania. In addition, certain of the
Company's facilities are made available to the general public. The
Company's services include (a) provision of recreational facilities, (b)
provision of various water and sewage services and (c) miscellaneous
maintenance services.
The principal executive office of the Company is located at P. O.
Box 426, Cresco Road, Buck Hill Falls, Pennsylvania 18323. Its telephone
number is 717-595-7511.
THE OFFERING
Type of security offered Class A Common Stock
Number of shares offered 75,000
Shares to be outstanding after the offering(1) 75,000 shares of
Class A Common Stock
73,537 shares of
Common Stock
Use of Proceeds Reduction of debt
- ---------------
(1) Assumes all shares are sold. There is no specified minimum number
that will be sold. Upon completion of this offering of Class A
Stock, the Company intends to offer up to 31,463 additional shares
of Common Stock to the holders of Common Stock who are not
Qualified Owners. See"The Offering."
Shares of Class A Stock will be offered only to persons who
are owners or co-owners of a lot and/or cottage in the Buck Hill Falls
community. See "The Offering".
RISK FACTORS
An investment in Class A Stock involves substantial risks in
addition to the risks associated with ownership of the Company's Common
Stock. The transferability of the Class A Stock is severely limited. See
"Risk Factors."
3<PAGE>
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data for each of the
fiscal years in the five year period ended October 31, 1995, have been
derived from audited consolidated financial statements of the Company. The
following selected consolidated financial data for the six months ended
April 30, 1996 and April 30, 1995 have been derived from unaudited
consolidated financial statements of the Company. This information should be
read in conjunction with the Consolidated Financial Statements and related
notes and Managements' Discussion and Analysis of Financial Condition and
Results of Operations appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue $2,218,139 $2,203,529 $2,048,529 $1,938,239 $1,874,303
Income (loss) from
operations 37,094 136,294 133,895 (3,201) 51,131
Other income
(expense) (125,834) (67,914) (34,412) 147,846 (99,620)
Income (loss) before
extraordinary credit (88,740) 33,080 65,683 (64,982) (82,070)
Extraordinary credit - - 33,800 138,000 19,000
Cumulative effect of
accounting change - 21,600 - - -
---------- ---------- ---------- ---------- ----------
Net income (loss) $ (88,740) $ 54,680 $ 99,483 $ 73,018 $ (63,070)
========== ========== ========== ========== ==========
PER SHARE DATA:
Income (loss) before
extraordinary credit $ (1.21) $ .45 $ .89 $ (.88) $ (1.12)
Extraordinary credit - - .46 1.87 .26
Cumulative effect of
accounting change - .29 - - -
---------- ---------- ---------- ---------- ----------
Net income (loss) $ (1.21) $ .74 $ 1.35 $ .99 $ (.86)
========== ========== ========== ========== ==========
OCTOBER 31,
-------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
FINANCIAL POSITION DATA:
Working capital $ (772,266) $ (973,993) $ (822,191) $(1,082,662) $ (516,834)
Total assets 3,149,870 3,104,106 2,536,541 2,299,853 2,373,373
Total long-term
liabilities 1,170,018 921,804 599,360 176,111 865,347
Stockholders' equity 900,529 989,269 934,589 835,106 762,088
4<PAGE>
<PAGE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30
----------------------------
1996 1995
---- ----
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue $ 631,603 $ 633,715
Income (loss) from
operations (212,123) (234,943)
Other income
(expense) (48,725) 7,687
Income (loss) before
extraordinary credit (260,848) (227,256)
Extraordinary credit - -
Cumulative effect of
accounting change - -
------------ ------------
Net income (loss) $ (260,848) $ (227,256)
============ ============
PER SHARE DATA:
Income (loss) before
extraordinary credit $ (3.55) $ (3.09)
Extraordinary credit - -
Cumulative effect of
accounting change - -
------------ ------------
Net income (loss) $ (3.55) $ (3.09)
=========== ===========
April 30
----------------------------
1996 1995
---- ----
FINANCIAL POSITION DATA
Working capital $ (977,714) $(1,251,338)
Total assets 3,093,347 3,151,450
Total long-term
liabilities 1,177,860 943,571
Stockholders' equity 639,682 762,011
</TABLE>
RISK FACTORS
AN INVESTMENT IN THE COMPANY INVOLVES A HIGH DEGREE OF RISK. THE FOLLOWING
FACTORS, IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS,
SHOULD BE CAREFULLY CONSIDERED BEFORE MAKING AN INVESTMENT DECISION.
1. FINANCIAL CONDITION. The Company incurred a net loss of $88,740
for the fiscal year ended October 31, 1995 as compared to a net income of
$54,680 for the preceding fiscal year. It incurred a net loss of $260,848
for the six months amended April 30, 1996 as compared to a net loss of
5<PAGE>
<PAGE>
227,256 for the corresponding period of the prior year. At April 30, 1996 the
Company had a cumulative deficit of $1,410,915 and a working capital deficiency
of $977,714. While, due to the seasonal nature of the company's business, the
Company's revenues and cost of revenues typically increase significantly in its
third and fourth fiscal quarters, the continuation of the Company as a going
concern is dependent upon continued compliance with its debt terms, its ability
to obtain additional financing if needed and the eventual achievement of
sustained profitable operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations".
2. NO DIVIDENDS ANTICIPATED. The Company has not paid a dividend
since 1966. The Company anticipates that its revenues will be used primarily
to maintain the various facilities it operates and for debt service and it does
not expect to pay dividends in the foreseeable future. In addition, debt
instruments to which the Company is a party restrict the payment of dividends.
3. RESTRICTIONS ON TRANSFERABILITY. Under the Articles of
Incorporation of the Company, as amended in July 1996, the shares of Class A
Stock may only be issued to, transferred to, or be held by a person, company or
other entity that it an owner or co-owner of a cottage and/or lot in the Buck
Hill Falls community (a "Qualified Owner"); provided, however, that a holder of
Class A Stock may transfer the shares to the Company, to the Buck Hill
Conservation Foundation, or to any other person with the specific approval of
the Board of Directors of the Company and the holders of a majority of the
other Class A shares. The Company will not recognize any purported transfer in
violation of these provisions. With this limited universe of transferees it is
highly unlikely that any trading market will develop, or that a Class A
stockholder in need of liquidity would be able to effect an expeditious sale of
his or her shares.
4. DEPENDENCE ON DUES AND FEES PAID BY PROPERTY OWNERS. In addition
to fees that residents of Buck Hill Falls pay to the Company for water and
sewer services and for the use of recreational facilities, property owners pay
dues to the Company in connection with road maintenance, trash collection,
security, general maintenance and other services provided by the Company, and
are subject to special assessments in certain situations. Deed covenants are
not uniform in this regard. Residents have recently instituted litigation
challenging the right of the Company to levy dues and assessments. While a
settlement agreement was signed in June 1996, continued opposition could have a
material adverse effect on the Company. See "Business -- Dues and Fees Paid by
Property Owners".
5. COMPETITION. Revenues derived from the use of the Company's
recreational facilities (particularly the golf course) by members of the
general public have become increasingly important in recent years. In this
regard the Company is in competition with a number of resorts in the Pocono
Mountains area.
6. GOVERNMENT REGULATION. The Company's water and sewer services are
subject to regulation by state and federal environmental regulatory bodies,
primarily the Pennsylvania Department of Environmental Protection ("DEP"), and
the Company's water services are regulated by the Pennsylvania Public Utility
Commission ("PUC") which, among other things, fixes the rates charged by the
Company. In 1995 the Company completed the installation of a water filtration
plant ordered by the DEP at a cost to the Company of approximately $900,000.
See "Business -- Government Regulation". The Company could be subjected to
6<PAGE>
<PAGE>
significant and unanticipated expenses in the future.
FOR THESE REASONS, THE COMPANY BELIEVES THAT THE SHARES OF CLASS A
STOCK OFFERED BY THIS PROSPECTUS ARE SUITABLE INVESTMENTS ONLY FOR BUCK HILL
FALLS PROPERTY OWNERS WHO BELIEVE THAT THE CONTINUED VIABILITY OF THE COMPANY
IS IMPORTANT TO THE HEALTH AND WELFARE OF THE COMMUNITY.
USE OF PROCEEDS
The maximum net proceeds to be received by the Company from this
offering are estimated to be approximately $1,450,000. There is no minimum and
the total net proceeds could be substantially less. The net proceeds will be
used primarily for the reduction of indebtedness.
At June 30, 1996 the Company had an outstanding, unpaid balance of
$690,900 on its $1,000,000 revolving credit facility with a bank, all of which
is classified as a current liability on the Company's financial statements.
This line of credit bears interest at prime (8.25% at June 30, 1996) plus 1.25%
and is secured by a mortgage and by a pledge of all dues, assessments and fee
revenues. Approximately $617,000 was drawn on this facility in 1993 to fund
the payment at maturity of debentures (the "1993 Debentures") issued by the
Company in 1968. Liability for the payment of the 1993 Debentures had been
assumed in 1977 by an unrelated entity, the Buck Hill Inn Corporation (the "Inn
Co.") as part of its consideration for the purchase of the Buck Hill Inn from
the Company. The Inn Co. subsequently filed for protection under the
bankruptcy laws. Approximately $140,000 in principal amount of the 1993
Debentures were exchanged by the holders for unsecured 6 1/4% Subordinated
Notes of the Company due July 1, 1998 (the "1998 Notes") and the balance of the
1993 Debentures were paid by the Company. The revolving credit facility has
also been used to fund the Company's working capital deficiency which normally
intensifies during the first and second quarter of each fiscal year due to the
seasonal nature of much of the Company's activity.
In May of 1995 the Company entered into an additional $900,000 loan
agreement with a bank to refinance existing debt incurred in connection with
the required improvements to its water system and to fund the completion of
those improvements. The loan is payable in monthly installments through May
2015 and bears interest at prime (8.25% atJune 30, 1996) plus 1.50%, and is
secured by a real estate mortgage and all revenues of the Company's water
operations.
The Company expects to apply the net proceeds of the offering first to
the payment of all or a substantial portion of its revolving credit facility.
The balance may be applied to reduce the term loan and for general corporate
purposes, primarily involving the maintenance of the Company's various
facilities, and possibly for repayment of the 1998 Notes upon their maturity.
Proceeds, if any, from the sale of Common Stock will be used for the
same purposes.
Pending the use of the proceeds for the purposes set forth above, the
Company may invest or deposit such sums as it deems appropriate.
DILUTION
The following table sets forth the effect of the Company's issuance of
Class A Stock in this offering on net tangible book value per share of the
7<PAGE>
<PAGE>
Company's Common Stock as of April 30, 1996, as adjusted to reflect the
immediate dilution which the purchasers of the Class A Stock offered hereby
will experience if all shares are sold at $20.00 per share. Dilution will be
greater if fewer shares are sold at that price. Dilution per share will be
less with respect to shares purchased at $17.50 per share. See "The Offering."
Offering price per share $20.00
Net tangible book value per share at
April 30, 1996(1) $8.37
Increase in net tangible book value attributable
to estimated proceeds to the Company per
share from its sale of Class A Stock 5.54
-----
Net tangible book value per share after offering 13.91
------
Dilution of shareholders purchasing shares after
the date of this Prospectus(2) $ 6.09
======
(1) Net tangible book value per share is determined by dividing the number of
shares of Common Stock of both classes outstanding into the tangible net worth
(total tangible assets less total liabilities) of the Company.
(2) "Dilution" means the difference between the offering price of the Class A
Stock and the net tangible book value per share of the Common Stock of both
classes after giving effect to the offering and payment of the estimated
expenses of the offering.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The Company's business, insofar as it relates to the provision of
recreational facilities, is largely seasonal in nature. As a result, the
Company's revenues and cost of revenues typically increase in its third and
fourth fiscal quarters.
RESULTS OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 COMPARED TO THE SIX MONTHS ENDED
APRIL 30,1995
Revenues for the six months ended April 30, 1996, were comparable to
the same period in the prior year. The Company had an increase of $9,812 in
its water operations revenues as a result of a rate increase, and an increase
of $19,000 in snow plowing revenues as a result of heavy snowfall amounts in
1996, but these increases were offset by a decrease in golf cart rentals of
$8,626 as a result of weather conditions in 1996 and a decrease in golf and
tennis dues revenues of approximately $3,000 as a result of the Company's not
offering a 5% discount for early payment of dues as was done in 1995. The
8<PAGE>
<PAGE>
Company also reduced annual dues billed to the residents at Buck Hill Falls
from $2,400 to $2,300 in 1996.
Cost of revenues increased 12% as compared to the same period in the
previous fiscal year, primarily due to an increase in depreciation expense of
$34,000 related to capital improvements to the water system which was put into
operation in February 1995 and to the reallocation of approximately $30,000 in
administrative salaries to the related community service operations to which
the employees are currently performing services. In addition, snow plowing
costs increased $15,000 due to severe weather conditions during 1996.
General and administrative costs decreased 37% in the first six months
of 1996 as compared to the same period in 1995. This decrease relates to the
reallocation of administrative salaries discussed above. Bad debts decreased
$29,814 due to the write off of uncollectible accounts in 1995. During 1995,
legal and accounting fees were incurred primarily for an evaluation of a
purchase offer from the Lot and Cottages Owners' Association. Such costs were
not incurred during 1996, resulting in a decrease in legal and accounting fees
of $32,615.
Other income decreased 33% during 1996. During 1995, there was a gain
on sale of land of $15,013, proceeds from the sale of timber of $11,202 and a
bad debt recovery of $3,000, which were not present in 1996. This decrease was
partially offset by an increase in interest income of $10,000.
Interest expense increased 71% as a result of interest of $37,680 on
borrowings related to the water filtration system which was placed in service
in February 1995. There was also capitalized interest in 1995, which is not
present in 1996 due to the completion of the water filtration system.
YEAR ENDED OCTOBER 31, 1995 COMPARED TO YEAR ENDED OCTOBER 31, 1994
Revenues increased 0.7% in 1995 as compared to 1994, principally due to
increased golf and pool revenues, annual dues, lumber sales, water and sewer
service revenues. Revenues from golf and pool increased approximately $92,500
due to an increase in the annual membership fee and the number of memberships.
Management believes that golf memberships have increased as a result of
improvements made to the golf course. In addition, due to more favorable
weather in 1995, more rounds were played and, as a consequence, revenues from
greens fees and cart rentals increased. The Company increased annual dues
billed to residents at Buck Hill Falls from $2,200 in 1994 to $2,400 in 1995.
The $200 increase resulted in additional revenues of approximately $58,000 in
1995. Lumber sales increased approximately $24,100 due to additional timbering
in fiscal 1995. Revenues from water and sewer services increased approximately
$13,000 due to an increase in water rate in 1995. The increase in revenues was
partially offset by a decrease in snow plowing revenues of approximately
$16,500 due to more favorable weather in 1995, decreased tennis and camp
revenues of approximately $9,600 attributable to decreased participation and
decreased special assessment revenues of approximately $126,700 due to no
special assessments raised in 1995. In addition, a change in the Company's
water and sewer billing policy to Inn Co. resulted in a decrease in water and
sewer service revenues of approximately $20,200.
Cost of revenue increased 3.8% in 1995 as compared to 1994 due to a
variety of factors. The operating expenses of golf increased approximately
$44,500, primarily due to additional lease payments of $26,300 on golf carts.
In addition, the cost of maintenance and material and supplies expenses
increased approximately $18,200 due to increased rounds played in 1995. The
9<PAGE>
<PAGE>
operating expenses of camp club increased approximately $4,300 due to increased
repair and maintenance expenses on play grounds. The operating expenses of
water and sewer service increased approximately $4,800, principally due to
increased sewer plant repair and maintenance expenses. However, the increased
expenses related to sewer service operations were offset by a decrease of
approximately $13,400 in salary expense because of one employee's disability
absence for six months in 1995. Lumber commission expense and real estate taxes
increased approximately $2,100 and $7,500 in 1995, respectively. The cost of
contracted security services and repair and maintenance expenses related to
security vehicle increased approximately $6,600. Maintenance expenses
associated with the Cottages at Buck Hill Falls increased approximately
$12,500, primarily due to an increase in the price of contracted services and
additional cleaning services. Depreciation expense increased approximately
$34,300 resulting from the completion of water system capital improvements in
March 1995. The increase in cost of revenues was partially offset by an
insurance refund of approximately $17,500, decreased road repair work of
approximately $12,100 in Buck Hill Falls community, decreased snow plowing
expense of approximately $10,200 and decreases in a variety of minor expenses
relating to cost of revenues.
General and administrative expenses increased 11.2% in 1995 as compared
to 1994, principally resulting from increases in legal and accounting fees, bad
debt expense and depreciation expense. Legal and accounting fees increased
approximately $64,700, primarily due to Securities and Exchange Commission
filings in 1995, legal services on the water rate increase in 1995, consulting
services rendered on the examination of the Company's rights in the setting of
dues and assessments on the cottages at Buck Hill Falls. Bad debt expense
increased approximately $10,500 because of increased provision for
uncollectible receivables. The purchase of property and equipment in 1995
resulted in an increase of approximately $2,900 in depreciation expense.
Additionally, repair and maintenance expenses increased approximately $10,100,
due to water pipe leakage in the residential area. Bank charges on credit card
collection increased approximately $4,700. The increase in expense was
partially offset by an insurance refund of approximately $4,800 and a $34,800
decrease in salary expense and related payroll tax, fringe benefits and travel
and entertainment due to the resignation of the Company's President in January
1994.
Miscellaneous income increased 173.8%, principally due to an increase
on a gain from the sale of property and equipment of approximately $23,000.
The increase in other expense is attributable primarily to increased
interest expense resulting from increased interest rates and borrowings in
fiscal 1995 as well as interest expense on the water system capital
improvements loan.
YEAR ENDED OCTOBER 31, 1994 COMPARED TO YEAR ENDED OCTOBER 31, 1993
Revenues increased 7.0% in 1994 compared to 1993, principally due to
increased golf revenues, special assessments and water and sewer revenues.
Golf revenues increased approximately $29,000 due to an increase in the number
of memberships and more favorable weather in 1994. Management believes that
memberships have increased as a result of improvements made to the golf course,
as well as more aggressive marketing efforts by the Company. In addition, due
to more favorable weather conditions experienced in 1994, more rounds were
played and, as a consequence, revenues from greens fees and cart rentals
10<PAGE>
<PAGE>
increased. In order to fund expenditures of major repairs and replacements in
the community, the Company raised special assessments from $400 in 1993 to $650
in 1994. The $250 increase resulted in additional revenues of approximately
$77,000 in 1994. Water and sewer service revenues increased approximately
$48,000 in 1994. In March 1993, the Company obtained an approval from the PUC
to increase water rates. The increased revenues resulted from a full year
increase in the water rate during 1994.
Cost of revenues increased 5.2% in 1994 compared to 1993, principally
due to increased salary expenses and related payroll tax of approximately
$88,000, insurance costs of approximately $16,000 and snowplowing expenses of
approximately $12,000. Salary and salary related expenses of golf operations
increased approximately $53,100, primarily due to an increase in the number of
rounds played in 1994, as discussed above, which resulted in increased manpower
for maintenance in connection with golf operations. Additionally, more
maintenance employees were hired in 1994. In addition, salary and related
expenses increased in 1994 due to a 3% to 5% increase in wages.
During fiscal 1994, the Company changed the premium period for its
insurance policies from a fiscal to calendar year, which accounts for the
additional insurance costs. Snowplowing services were contracted to an outside
contractor in 1994 which accounts for the increase. The increases were offset
by reduced maintenance expenses of approximately $30,000 due to hiring a new
contractor at reduced rates.
General and administrative expenses increased 18%, principally due to
increased legal expense. Legal expense increased approximately $56,600,
primarily due to increased legal services rendered on the evaluation of a
purchase offer from the Lot & Cottage Owners' Association for the Company's
properties and preparation of the agreement between the Company and New Hope
Lodge (a potential buyer) relating to assumption of Inn Co.'s obligations to
the Company. However, no agreement was consummated on the sale of the
Company's properties. In addition, administrative salaries and related
benefits increased approximately $12,300 due to a 3% to 5% increase in wages
during 1994. A variety of minor expenditures relating to general and
administrative services also contributed to the increase in general and
administrative expenses.
The increase in other expense is attributable primarily to increased
interest expense resulting from increased interest rates and borrowings in
1994. Additionally, in 1993 the Company received a real estate tax refund of
$13,253 as a result of a real estate tax appeal.
The provision for income taxes reflects state income taxes due on 1994
taxable income and deferred federal taxes resulting from utilization of net
operating loss carryforwards.
Beginning in fiscal 1994, the Company adopted Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), Accounting for Income Taxes. The
adoption of SFAS 109 resulted in a tax benefit of approximately $21,600.
INFLATION.
Inflation has not had a significant impact on the Company's comparative
results of operation.
11<PAGE>
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LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1996, the Company had a working capital deficiency of
$977,714. Included in current liabilities was the entire $911,120 outstanding
on the Company's $1,000,000 line of credit with a bank (described in the
following paragraph), which is payable on demand. At June 30, 1996 the
outstanding balance had been reduced to $690,900. An additional $35,442 in
scheduled principal payments on long-term debt are due by May 1, 1997.
On July 24, 1992, the Company entered into a loan agreement with a bank
relating to a secured revolving line of credit in the amount of $1,000,000 (the
"Revolving Credit Facility"). Amounts borrowed under the Revolving Credit
Facility bear interest at the prime rate (8.25% at
April 30, 1996) plus 1-1/2%. Pursuant to the loan agreement, approximately
2,600 acres of land and land improvements located in Barrett Township, Monroe
County, Pennsylvania, are pledged as collateral, along with dues, assessments
and fee revenues. The Revolving Credit Facility is available through May 31,
1997, contingent upon the Company maintaining a satisfactory financial position
and subject to annual review of the Company's financial statements by the bank.
The loan agreement with the bank provides that if, in the opinion of the
authorized lending officers of the bank, the Company's credit worthiness
materially declines, the credit line will cease to be available for future
draws, and any existing balance will be required to be fully amortized over a
reasonable term.
The Company was required to make certain improvements in its water
system. See "Business -- Government Regulation". In May of 1995, the Company
entered into a $900,000 term loan agreement with a bank to refinance existing
debt incurred for this project and to complete the improvements. Principal is
payable in monthly installments of $8,985 over a 20-year amortization period.
Interest is payable at the bank's base rate (8.25% at April 30, 1996) plus
1.50%. The loan matures in May 2015 and is secured by a first mortgage on
approximately 2,200 acres of land and land improvements and a collateral
assignment of all revenue and assessments of the Company's water operations.
The term loan is guaranteed by the Company.
The 1998 Notes in the aggregate principal amount of $140,000 are
unsecured obligations of the Company maturing on July 1, 1998. The 1998 Notes
accrue interest at an annual rate of 6-1/4%. Payments of principal and
interest on the Notes are subordinated to payments of other indebtedness of the
Company. Upon written notice to the holders thereof, the 1998 Notes are
redeemable in whole or in part by the Company at any time at 100% of their
principal amount, plus interest accrued to the date of redemption.
The Company expects to meet its current liabilities (other than payment
of the entire $911,120 under the Revolving Credit Facility, which, although not
currently due, is classified as a current liability because of the Revolving
Credit Facility's demand terms) through increased collections as a result of
the seasonal increase in revenues which typically occurs during the Company's
third and fourth quarters through the provision of recreational services. The
Company does not anticipate that the bank will demand payment under the
Revolving Credit Facility.
Cash increased $32,692 for the six months ended April 30, 1996. Cash
provided by borrowings of $95,000 under the Company's revolving line of credit
and $16,000 in additional long-term debt was used to make scheduled principal
payments of $15,811 on long-term debt, pay operating expenditures of $12,490
and capital expenditures of $50,007. Such capital expenditures included
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improvements to roads and paving of $16,832, purchase of a new automobile for
$17,816 and purchase of furniture and equipment for the golf club of $15,359.
The Company incurred a net loss of $260,848 for the six months ended
April 30, 1996 and at April 30, 1996, the Company had a cumulative deficit of
$1,410,915 and a working capital deficiency of $977,714. Although the
Company's line of credit is available through May 31, 1997, the ability to
borrow under the line is contingent upon certain factors. As a result,
continuation of the Company in its present form is dependent upon the continued
compliance with its debt terms, its ability to obtain additional financing if
needed and the eventual achievement of sustained profitable operations.
Management believes that revisions in the Company's operating
requirements, including rate increases for amenities and the effect of the
water rate increase implemented in August 1995, provide the opportunity for the
Company to continue as a going concern. However, there is no assurance that
management's actions will be successful or, if they are not successful, that
the Company would be able to continue as a going concern.
BUSINESS
Buck Hill Falls Company (the "Company") is engaged in the provision of
a variety of services, many of which are for the benefit of residents of Buck
Hill Falls, Pennsylvania. In addition, certain of the Company's facilities are
made available to the general public. The Company's services include (a)
provision of recreational facilities, (b) provision of various water and sewage
services and (c) miscellaneous maintenance services.
RECREATIONAL FACILITIES
The Company provides and maintains various recreational facilities for
the use of residents of the Buck Hill community and the general public.
The recreational facilities owned and operated by the Company are as
follows:
GOLF. The Company owns and operates a 27 hole golf course facility
which also includes a clubhouse and restaurant. The restaurant has a capacity
for 50 persons and can seat an additional 20 persons at an adjoining patio.
TENNIS. The Company's tennis facilities consist of 10 clay tennis
courts, a tennis clubhouse and a small dining room that can accommodate 20
persons.
SWIMMING. The Company owns and operates an olympic-sized outdoor
swimming pool along with a small bath house and dressing rooms.
BOWLING GREENS. The Company owns and operates two lawn bowling greens.
MISCELLANEOUS. The Company administers deer hunting on its properties
and stocks streams on its properties for trout fishing. The Company also
operates a day camp for children, including children of
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residents of Buck Hill Falls, on weekdays during the months of June, July and
August.
Of the Company's recreational facilities, its golf facilities are by
far the most significant, generally accounting for more than 50% of the
Company's revenues from its recreational facilities.
Residents of Buck Hill Falls pay annual or daily use fees to the
Company for each of the facilities that they utilize. In recent years,
revenues from the general public and various groups that utilize the Company's
golf facilities have become increasingly important.
WATER AND SEWAGE OPERATIONS
Through its wholly owned subsidiary, Buck Hill Water Company ("BHW"),
the Company supplies water to residential customers. As of June 30, 1996, the
Company had 290 residential customers and one commercial customer (the post
office), including all owners of residences in Buck Hill Falls that do not use
well water and some residences outside the community. The operations of BHW
are subject to regulation by the Pennsylvania Department of Environmental
Protection (the "DEP") and the Pennsylvania Public Utility Commission (the
"PUC"). See "Government Regulations."
For the purposes of supplying water to its customers, the Company owns
a reservoir with a 550,000 gallon capacity, a filtration plant, a chlorinator
pump house and distribution system. The reservoir is fed by Buck Hill Creek, a
spring and one or more wells. The Company also operates a sewage treatment
facility that serves most of the residences in Buck Hill Falls and formerly
served the Buck Hill Inn.
Because a substantial majority of the residents of the Buck Hill Falls
community occupy their units on a seasonal basis, the demand for the Company's
water and sewage services is significantly greater in the summer months.
GOVERNMENT REGULATION
The Company's water and sewer services are subject to regulation by the
DEP and the Company's water services are regulated by the PUC.
The DEP regulates all sewage treatment plants in Pennsylvania, annually
inspects sewage treatment facilities and issues annual permits for the
operation of such facilities. It has authority to cause changes to be made in
the operation of a facility and to require capital improvements to ensure that
the facility is operating in accordance with its standards. In addition, the
DEP evaluates the water quality provided to residents of Buck Hill Falls by
BHW, the Company's wholly-owned subsidiary. The DEP has the authority to
mandate changes in the operation of BHW or its facilities to ensure that the
water supply provided to the Buck Hill Falls community remains within the
standards adopted by the DEP. In the event that the DEP were to mandate any
changes in the Company's
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sewage treatment plant or in the facilities operated by BHW, the Company would
be required to make the necessary capital expenditures in order to ensure that
the sewage and water facilities meet with applicable regulations.
The PUC regulates the quality of the water service provided by BHW, and
the rates charged for such services. The PUC establishes, upon application,
the rates that BHW may charge for water service. Any requests for an increase
in water rates must be submitted to and approved by the PUC prior to the
effectiveness of such increases.
Pursuant to amendments to the Pennsylvania Safe Drinking Water Act
enacted in 1989 (the "Water Act Amendments"), public water systems using
unfiltered surface water sources were required to install filtration-
disinfection systems for unfiltered surface water supplies not later than
December 31, 1995. In 1993, the Company was informed by the DEP that its water
system exceeded the maximum contaminant level specified for coliform bacteria
under regulations enacted pursuant to the Water Act Amendments, and that the
Company would be required to install and begin operation of continuous
filtration and disinfection in accordance with applicable regulations, or
abandon its surface water source no later than May 17, 1993. Pursuant to these
requirements, the Company commenced construction of a water filtration plant
for Buck Hill Creek. In addition, pursuant to applicable regulations, the
Company was required to cover its reservoir, which was accomplished in 1993.
While the DEP is responsible for enforcing the requirements of the Water Act
Amendments, the PUC regulates water aesthetics, and may require BHW to take
certain actions or install facilities to maintain standards of water aesthetics
in excess of the requirements of the Water Act Amendments.
As a result of delays in the review process and delays in construction
and start up of the filtration plant, the filtration plant was first placed
into service in February 1995. The cost of approximately $900,000 was financed
through a term bank loan. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations".
In the fiscal year ended October 31, 1993, BHW sought and obtained PUC
approval to raise the rates charged for water services by 121%. During the
same period, the Company raised the rates charged for sewer services by 100%.
On January 18, 1995, BHW filed an application with the PUC to increase its
rates for water service effective March 20, 1995, partially to offset the costs
associated with construction of the water filtration facility. The Company
sought approval of rates that would produce $114,828 in additional annual
revenue, but, effective July 20, 1995, was granted rates that are expected to
produce additional annual revenues of $82,000.
OTHER OPERATIONS
In addition to the services described above, the Company also provides
road maintenance for approximately 23 miles of paved roads presently in the
Buck Hill Falls community, plowing and cindering, trash pickups, street
lighting and 24 hour security patrols. Costs of such services are borne by
residents of Buck Hill Falls. See "Dues and Fees Paid By Property Owners,"
below.
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DUES AND FEES PAID BY PROPERTY OWNERS
In addition to fees which residents of Buck Hill Falls pay to the
Company for water and sewer services and the use of recreational facilities,
each of the property owners is assessed dues to the Company in connection with
road maintenance, trash collection, security and other general maintenance
services provided by the Company for the Buck Hill Falls community. The
utilization by the Company of certain of the dues and assessments has been
contested by certain residents and by the Lot and Cottage Owners Association of
Buck Hill Falls, Inc. (the "Association"), a non-profit organization whose
members consist of most owners, other than the Company, of homes or lots in
Buck Hill Falls. The Association has also expressed opposition to increases in
such charges that the Company believed were necessary to provide for operation
of Company facilities in the community and to meet certain other of the
Company's obligations. The Company set dues for the fiscal year ended
October 31, 1995 at $2,400 per resident. In July 1995, the Association and
certain individual property owners brought suit against the Company and certain
of its officers and directors challenging the right of the Company to make
assessments and dues charges and seeking to enjoin certain collection actions
instituted by the Company to collect unpaid dues. On June 8, 1996, an
agreement was signed by the Association and the Company recognizing the
obligation of residents to pay dues to the Company for services rendered for
their benefit and giving the Association a role in setting the amount. Under
the Agreement a joint committee is to be established, consisting of two members
nominated by the Chairman of the Company, two members nominated by the
President of the Association, and a fifth member chosen by mutual agreement of
the Company Chairman and the Association President. The committee is to make
recommendations to the Company's Board of Directors as to the level of dues to
be assessed. The Agreement provides that special assessments to repay debt,
acquire property for development purposes, purchase Company Stock and develop
land will only be considered if the Company grants property owners an option to
purchase Common Stock, or a new class of stock, in consideration for payment
of the special assessment. Both sides agreed to dismiss their litigation.
Owners of properties in The Cottages at Buck Hill Falls ("The
Cottages"), a separate residential complex in Buck Hill Falls, pay an
additional fee of $100 - $125 per month, depending on the type of residence, a
portion of which is placed in a restricted reserve fund for long range capital
improvements for these properties, and the remainder of which is used for
exterior maintenance of such residences. Exterior maintenance services are not
provided to other residents of Buck Hill Falls.
Purchasers of lots in The Cottages who have not yet had the design of
their proposed home approved by the Company pay an amount equal to 25% of the
total dues charged to owners of residences in the first year following their
purchase of a lot, 50% in the second year and 75% in the third year.
Thereafter, lot owners at The Cottages pay approximately the same dues as
owners of residences. However, once the design of a proposed residence has
been approved by the Company, the owner of the lot is required to pay the same
dues as all owners of residences.
16<PAGE>
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DEVELOPMENT OF THE COTTAGES
Pursuant to a series of agreements executed in May 1985, the Company
transferred 600 acres of its land to Buck Hill Falls Associates (the
"Partnership"), a Pennsylvania limited partnership in which the Company had a
29% limited partnership interest. Thereafter, the Partnership developed The
Cottages on the transferred property. However, the sales of properties in The
Cottages ran significantly behind expectations, and the Partnership was not
able to pay the principal amount due on certain loan obligations incurred in
connection with the development of The Cottages. As a result, the Partnership
ceased development of The Cottages in 1990, and in early 1991 gave to First
Eastern Bank (now PNC Bank, N.A.) (the "Bank"), its principal lender, a deed on
the remaining property it held, in lieu of foreclosure on the property. The
Partnership dissolved in 1991, and all selling efforts relating to The Cottages
was suspended. In April 1996 the Company was advised that the Bank had agreed
to convey the property to a purchaser for $900,000.
MARKETING AND COMPETITION
The Company's marketing efforts generally have been limited in recent
years and directed primarily to promoting the use of its recreational
facilities, principally its golf course. Marketing of homes for sales and
rentals in the community has been left to local realtors, but the depressed
market for second homes in the area has slowed real estate sales generally,
particularly in Barrett Township where Buck Hill Falls is located. However, in
1996 the Company undertook a study on ways and means to promote the community
as a whole and identified various steps it could pursue in the coming years to
achieve this goal. These include the formation of a real estate group composed
of a number of local and regional realtors committed to working together for
both the sales and rentals of homes. This group is scheduled to begin
functioning in the Fall of 1996. Other steps under serious consideration
include a joint effort between the Company and this group of realtors to
advertise and promote the community, including the production of a video tape
featuring the homes and facilities of the community, and utilization of the
Internet to promote sales and rentals.
Revenues derived from the use of the Company's golf course by members of
the general public have become increasingly important in recent years,
accounting for about 65 percent of total golf revenues in 1995. The company is
in competition with a number of resorts in the Pocono Mountains area, and many
of its competitors have substantially greater financial and marketing
resources.
17<PAGE>
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EMPLOYEES
As of April 30, 1996, the Company had 17 persons employed on a full
year basis. An additional 42 persons are employed on a seasonal basis during
the summer season in 1996 (demand for the Company's services increases
substantially during the summer months).
OTHER PROPERTIES
Aside from the various facilities described above, the Company owns
approximately 4,000 acres of undeveloped wooded land contiguous to the Buck
Hill Falls community and The Cottages. Of the 4,000 acres, approximately 2,400
acres are owned by BHW and serve as a watershed. Company management does not
believe that development of the watershed land is feasible in the foreseeable
future. Over 98 percent of the Company's land was acquired prior to 1947, and
no land has been acquired in the last 30 years. The land is zoned residential.
The Company has mortgaged approximately 2,600 acres of the land together with
certain of its amenities to its principal lending bank as collateral for
amounts borrowed under a line of credit. However, the mortgage is subordinated
to the rights of community members of Buck Hill Falls under a non-exclusive
easement granted to such persons for access to and use of certain areas
(consisting of various recreational amenities and various roads, pathways and
private rights-of-ways in Buck Hill Falls).
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are as follows:
Term as
Director
Name Age Position Expires
- ---- --- -------- --------
David B. Ottaway 56 Chairman of the Board 1998
and President, Director
Anthony C. Bowe 39 Vice President, Treasurer 1999
and Chief Financial Officer,
Director
Frank J. Dracos, M.D. 66 Vice President Operations 1998
and Chief Operating Officer,
Director
Richard C. Unger, Jr. 44 Secretary, Director 1999
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George J. Byron 72 Director 1998
Edwin A. Gee 76 Director 1997
Grace M. Godshalk 58 Director 1997
Clifford Press 42 Director 1997
James T. Sygenda 63 Director 1999
Carl R. Benasutti 54 General Manager N/A
Mr. Ottaway was elected Chairman and Chief Executive Officer in July
1995, and President in 1996. Mr. Ottaway has been employed by the Washington
Post for the past 25 years and is currently an investigative reporter.
Mr. Bowe was elected to the Board and as Vice President, Treasurer and
Chief Financial Officer in July 1996. He is a Managing Director of Bankers
Trust Company, New York City, and has held a variety of line and management
positions with that firm for more than the past five years.
Dr. Dracos has been a director of the Company since 1992. He was
elected Vice President Operations and Chief Operating Officer in July 1996.
Dr. Dracos has been a practicing orthopedic surgeon with Pocono Orthopedic for
over five years. He is also a director of Mellon Bank (Northeast).
Mr. Unger was elected to the Board and as Secretary of the Company in
July 1996. He is an attorney practicing in West Conshohocken, Pennsylvania.
Until forming his own firm in 1995, he was for many years a partner in the
Philadelphia based firm of Duane, Morris & Hecksher.
Mr. Byron has been a director of the Company since 1992. Mr. Byron has
been co-owner of Lord Byron, Inc., a manufacturer of hospital linens and
nuclear energy protective clothing, for over five years.
Mr. Gee has been a director of the Company since 1995. Mr. Gee retired
as Chairman of the Board of International Paper in 1985.
Mrs. Godshalk has been a director of the Company since March, 1995 and
she was elected President of BHW in July 1996. Mrs. Godshalk has been the Vice
President of Ultra-Mold Corporation in Yardley, Pennsylvania, since 1984. For
the past eighteen years, she has been an elected Supervisor of Lower Makefield
Township, Bucks County, Pennsylvania.
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Mr. Press has been a director of the Company since 1994. Since 1986,
Mr. Press has served as President of Hyde Park Holdings, Inc. Mr. Press also
has served as a director of High Voltage Engineering Corporation since 1988.
Mr. Sygenda has been a director of the Company since 1993.
Mr. Sygenda was district sales manager and national account manager for UARCO
Business Forms until he retired in 1993.
Mr. Benasutti has been general manager of the Company since 1994. Mr.
Benasutti also served as community manager for Pine Crest Development Corp.
from 1988 through 1993.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation for services rendered by the Company's General Manager. The
Company's other executive officers serve on a voluntary basis and are not
compensated.
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation
-----------------------
Other Annual Other
Name and Principal Position Year Salary Compensation Compensation
- --------------------------- ---- ------ ------------ ------------
<S> <C> <C> <C> <C>
Carl Benasutti............. 1995 $43,000 $ 1,000 ---
General Manager(1) 1994 $31,826 $ 2,403(2) ---
1993 --- --- ---
</TABLE>
- ------------
(1) Mr. Benasutti has been compensated as General Manager since
January 1994, although formally elected to this position in July
1994.
(2) Received for the period from November 1, 1993 through January 2,
1994, during which Mr. Benasutti served in an informal capacity as
assistant to the President.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information concerning ownership
of the Common Stock of the Company as of April 30, 1996 by each shareholder
known to the Company to own beneficially more than 5% of its Common Stock, each
director of the Company and all directors and executive officers of the Company
as a group. Except as otherwise noted, each
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person listed below has sole voting and dispositive power with respect to the
shares listed next to his or her name. All persons listed below are directors
of the Company.
Shares
Beneficially
Name Owned Percent of Class
- ---- ------------ ----------------
David B. Ottaway . . . . . . . . 5,980(1) 8.1%
Anthony C. Bowe. . . . . . . . . 100(2) *
Frank J. Dracos, M.D . . . . . . 400(3) *
Richard C. Unger, Jr . . . . . . 100(2) *
George J. Byron. . . . . . . . . 100 *
Edwin A. Gee . . . . . . . . . . 2,301(4) 3.1%
Grace M. Godshalk . . . . . . . 90(5) *
Clifford Press . . . . . . . . . 100 *
James T. Sygenda . . . . . . . . 100(2) *
All executive officers and
directors as a group . . . . . 9,271 12.6%
- -------------
* Less than 1%
(1) Includes 1,583 shares held by Mr. Ottaway and 4,397 shares held by
a non-profit charitable Trust of which Mr. Ottaway is President
and a trustee. Mr. Ottaway disclaims beneficial ownership of the
shares held by the Trust. Mr. Ottaway's address is 327 A Street,
S.E., Washington, D.C. 20003.
(2) Held jointly with wife.
(3) Includes 100 shares held by Dr. Dracos' wife and 100 shares held by
an adult son, as to which shares Dr. Dracos disclaims beneficial
ownership.
(4) Includes 25 shares held by Mr. Gee's wife, 105 shares held jointly
with his wife and 60 shares held by Mr. and Mrs. Gee in trusts for
the benefit of their children. Does not include an additional
4,002 shares held by other family members, as to which shares
Mr. Gee disclaims beneficial ownership.
(5) Includes 50 shares held jointly with Mrs. Godshalk's husband.
DESCRIPTION OF CAPITAL STOCK
The authorized capital of the Company consists of 105,000 shares of
Common Stock and 100,000 shares of Class A Common Stock. All shares are
entitled to participate equally and ratably in dividends, when and as declared
by the Board of Directors out of assets legally available
21<PAGE>
<PAGE>
therefore, and in distributions upon liquidation. Each share is entitled to
one vote for all matters on which shareholders may vote other than the election
of directors. Cumulative voting rights apply in the election of directors,
which means that each share is entitled to as many votes as is equal to the
number of directors to be elected, and all votes may be cast for a single
director or may be distributed among any number of directors. However, because
the Board of Directors of the Company consists of three classes, the number of
votes to which each share is entitled in the election of directors as a result
of the cumulative voting rights is either 30% or 40% (depending on the number
of directors standing for election) as large as would be the case if the Board
of Directors was not classified. There are no preemptive, conversion, or
redemption rights.
The Company's Articles of Incorporation, as amended by the shareholders
on July 7, 1996, provide that the shares of Common Stock and the shares of
Class A Common Stock each have one vote per share and are equal in all other
respects except that the shares of Class A Common Stock may only be issued to,
transferred to or held by any person, company or other entity that is an owner
or co-owner of a cottage and/or lot in the Buck Hill Falls community (a
"Qualified Owner"); provided, however, that (i) the Company and The Buck Hill
Conservation Foundation may acquire and hold shares of Class A Common Stock;
(ii) a holder of Class A Common Stock may transfer shares of Class A Common
Stock other than to a Qualified Owner if the transferee and the terms of the
transfer are disclosed to, and approved by, the Board of Directors of the
Company and, upon recommendation of the Board of Directors, approved by the
affirmative vote of the holders of a majority of the outstanding shares of
Class A Common Stock other than those proposed to be transferred; and (iii) a
transferee of Class A Common Stock pursuant to the approvals required by clause
(ii) above may hold the Class A Common Stock but may not transfer them,
willfully, by operation of law or otherwise, except as permitted by the
foregoing provisions.
MARKET QUOTATIONS FOR COMMON STOCK
The Company believes that market transactions in its Common Stock occur
very infrequently, rendering it unlikely that there exists an established
trading market for the Common Stock, and that quotations would be markedly
affected by a modest volume of transactions.
Based upon information provided to the Company by the National
Quotation Bureau, Inc., quotations reported by the National Daily Quotation
Service and the National Association of Securities Dealers, Inc. Non-NASDAQ OTC
Bulletin Board indicate a range of bid prices of $11.00 to $16.00 during the
period from November 1, 1993 through January 31, 1994; $11.00 to $17.00 during
the period from February 1, 1994 through April 29, 1994; $15.00 to $18.00
during the period from May 2, 1994 through July 29, 1994; $15.00 to $25.00
during the period from August 1, 1994 through October 31, 1994; $21.00 to
$26.00 during the period from November 1, 1994 through January 31, 1995; $25.00
to $28.00 during the period from
February 1, 1995 through April 30, 1995; $28.00 to $31.00 during the period
from May 1, 1995 through July 31, 1995; $28.00 to $31.00 during the period from
August 1, 1995 through October 31, 1995; $31.00 during the
22<PAGE>
<PAGE>
period from November 1, 1995 through January 31, 1996; and $31.00 during the
period from February 1, 1996 through April 30, 1996.
These quotations reflect inter-dealer prices, without retail markup,
mark-down or commission and may not necessarily reflect actual transactions.
The Company has not declared or paid dividends on its Common Stock in
thirty years and anticipates that all earnings will be retained for use in its
business. The Company does not anticipate that dividends will be declared or
paid in the foreseeable future.
As of April 30, 1996, the Company had approximately 497 shareholders of
record.
Since the transferability of the Class A Stock is essentially
restricted to Qualified Owners it is unlikely that any trading market will
develop for that class. The Company will act as the transfer agent for the
Class A Stock.
THE OFFERING
CLASS A STOCK
The shares of Class A Stock offered by this Prospectus will be offered
only to those persons who own Common Stock in the Company and are an owner or
co-owner of a cottage and/or lot in the Buck Hill Falls community ("Qualified
Owner"). Qualified Owners are offered the opportunity to purchase 200 shares
per property for $20 per share or an aggregate price of $4,000, payable over
five years at $800 annually or, if paid in full by October 31, 1996, with a
$500 discount. All 200 shares must be purchased by a Qualified Owner if any
are purchased. If all shares of Class A Stock are not subscribed within 15
days after the date of this Prospectus (as set forth on the cover page) then it
is the current intention of the Board of Directors to offer Qualified Owners
who did subscribe the opportunity to purchase up to 200 additional shares per
property (up to a total purchase of 400 shares of Class A Stock per property)
on the same terms, subject to pro rata reduction if subscriptions are received
for more than 75,000 Class A shares. There is no minimum number of shares that
must be sold.
All subscribers electing to pay over the five year term will be
required to sign a subscription agreement irrevocably obligating them to
complete payment for the shares. This will be a legally binding obligation of
the subscriber and the unpaid balance will be represented by a promissory note
payable to the Company. Share certificates will be issued within 30 days after
payment is made and, in the case of installment payments, will be issued pro
rata within 30 days after each installment is made. No voting or other rights
of share ownership will attach until share certificates are issued.
All certificates representing Class A Stock will contain a legend
calling attention to the restrictions on transferability set forth in the
Company's Articles of Incorporation.
23<PAGE>
<PAGE>
The offering price of the Class A Stock was determined by the Board of
Directors of the Company based upon the historical prices of the Common Stock,
the inactive nature of that market, the restrictions on transferability of the
Class A Stock and the unlikely prospect of any dividend being paid.
The amendment to the Company's Articles of Incorporation authorizing the
Class A Stock was proposed by the Board of Directors for adoption by the
shareholders at the annual meeting held on July 7, 1996. The Company
distributed proxy materials describing the proposed amendment and the Company's
intentions with respect to this offering if the amendment were approved.
Certain shareholders who are not Qualified Owners objected to the proposal,
asserting that the proposed offering price was inadequate and that the Company
should make a rights offering to all its shareholders. The Board concluded
that the offering of Class A Stock to Qualified Owners was fair and in the best
interest of the Company and its shareholders. The Common Stock does not have
any pre-emptive right to subscribe to new securities. After discussion, the
amendment was approved by the Common shareholders by a vote of 31,766 for and
11,375 against, with 11,836 abstentions.
COMMON STOCK
Upon completion of the offering of the Class A Stock to Qualified
Owners as set forth above, expected to be in September 1996, the Company
intends to offer to all holders of its Common Stock (other than Qualified
Owners) the opportunity to purchase at $20 per share that number of shares
of Common Stock which, in the judgment of the Company, would be sufficient to
enable each such holder of Common Stock to maintain his or her percentage
interest in the Company. A record date for this offering of Common Stock will
be fixed to coincide with the date of this Prospectus as set forth on the cover
page.
Upon completion of the offering of Class A Stock the Company intends to
send to each holder of record of the Common Stock on the record date a notice
and subscription form by which such holder can subscribe to purchase that
number of shares necessary to maintain such holder's percentage interest in the
Company on the record date. The subscribing holder would also be able to
specify a maximum number of shares to be purchased. This right to purchase
additional shares of Common Stock will not be transferable and must be
exercised by return of the executed subscription within ten days, after which
time the right will expire. Upon expiration of this ten day period, the
Company will determine the number of additional shares of Common Stock
purchased by each subscribing holder based upon (i) the number of Class A
shares sold by the Company (ii) the number of shares of Common Stock held on
the record date by the subscribing Common holders and (iii) any maximum
specified by a subscribing Common holder.
The Company's authorized capital includes 105,000 shares of Common
Stock, of which 73,537 shares are issued and outstanding. Accordingly,
subscriptions for additional shares of Common Stock will be subject to pro rata
reduction if more than 31,463 shares are subscribed.
<PAGE>
<PAGE>
LEGAL MATTERS
Wolf, Block, Schorr and Solis-Cohen, Philadelphia, Pennsylvania, has
rendered its opinion to the Company that the Class A Common Stock and Common
Stock to be sold by the Company, when issued and paid for in accordance with
the plan of distribution described herein, will be duly authorized, validly
issued, fully paid and non-assessable.
EXPERTS
The audited consolidated financial statements of Buck Hill Falls
Company included in this Prospectus have been so included in reliance on the
report of Parente, Randolph, Orlando, Carey & Associates, independent
accountants, given on the authority of said firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 under the Securities Act of
1933, as amended, with respect to the shares of Class A Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in
the Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Class A Common Stock, reference
is made to the Registration Statement, and the exhibits and schedules thereto,
which may be inspected and copied at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, NW, Washington, DC 20549, and
at the Commission's Regional Offices located at 7 World Trade Center, 13th
Floor, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
can also be obtained at prescribed rates from the Public Reference Section of
the Commission, 450 Fifth Avenue, NW, Washington, DC 20549. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete and, in each instance, reference is made
to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.
24<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
=============================
AUDITED FINANCIAL STATEMENTS: Page
----
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS . . . . . . . . . F-2
CONSOLIDATED FINANCIAL STATEMENTS:
Balance Sheet as of October 31, 1995 and 1994. . . . . . . . . . . F-3
Statement of Operations for the Years Ended
October 31, 1995, 1994 and 1993. . . . . . . . . . . . . . . . . F-5
Statement of Changes in Stockholders' Equity for the
Years Ended October 31, 1995, 1994 and 1993. . . . . . . . . . . F-6
Statement of Cash Flows for the Years Ended
October 31, 1995, 1994 and 1993. . . . . . . . . . . . . . . . . F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . F-9
UNAUDITED INTERIM FINANCIAL DATA:
Condensed Consolidated Balance Sheet -
April 30, 1996 and October 31, 1995. . . . . . . . . . . . . . . F-18
Condensed Consolidated Statement of Operations -
Six Months and Three Months Ended April 30, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-19
Condensed Consolidated Statement of Cash Flows -
Six months Ended April 30, 1996 and 1995 . . . . . . . . . . . . F-20
Notes to Condensed Consolidated
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . F-21
-----------------
F-1<PAGE>
<PAGE>
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
============================
To the Board of Directors and Stockholders of
Buck Hill Falls Company:
We have audited the accompanying consolidated balance sheets of Buck
Hill Falls Company and subsidiary as of October 31, 1995 and 1994, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for each of the three years in the period ended October 31,
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 principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Buck Hill
Falls Company and subsidiary as of October 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended October 31, 1995 in conformity with generally accepted accounting
principles.
As discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for income taxes by adopting Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes," in
1994.
PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES
Wilkes-Barre, Pennsylvania
December 13, 1995
F-2<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
CONSOLIDATED BALANCE SHEET
October 31, 1995 and 1994
- --------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------
ASSETS
======
<S> <C> <C>
CURRENT ASSETS:
Cash. . . . . . . . . . . . . . . . . . . . $ 31,460 $ 20,194
Accounts receivable, trade net of
allowance for doubtful accounts of
$79,860 in 1995 and $35,000 in 1994 . . . 245,369 175,758
Prepaid expenses:
Insurance . . . . . . . . . . . . . . . . 25,683 19,822
Other . . . . . . . . . . . . . . . . . . 4,545 3,176
---------- ----------
Total current assets . . . . . . . 307,057 218,950
RESTRICTED CASH . . . . . . . . . . . . . . . 73,799 105,876
PROPERTY, PLANT AND EQUIPMENT . . . . . . . . 2,756,391 2,761,827
DEFERRED COSTS, net of accumulated
amortization of $11,060 and
$6,320 in 1995 and 1994,
respectively. . . . . . . . . . . . . . . . 12,623 17,363
---------- ----------
TOTAL . . . . . . . . . . . . . . . $3,149,870 $3,104,016
========== ==========
F-3<PAGE>
<PAGE>
- --------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
====================================
<S> <C> <C>
CURRENT LIABILITIES:
Demand note payable, 5%, unsecured . . . . $ 11,300 $ 11,300
Current portion of long-term debt. . . . . 847,385 847,586
Accounts payable, trade. . . . . . . . . . 37,283 114,370
Accrued expenses and other . . . . . . . . 183,355 219,687
---------- ----------
Total current liabilities. . . . . 1,079,323 1,192,943
CUSTOMER DEPOSITS. . . . . . . . . . . . . . 73,800 105,882
LONG-TERM DEBT . . . . . . . . . . . . . . . 956,218 675,922
6-1/4% SUBORDINATED NOTES. . . . . . . . . . 140,000 140,000
---------- ----------
Total liabilities. . . . . . . . . 2,249,341 2,114,747
COMMITMENTS. . . . . . . . . . . . . . . . .
STOCKHOLDERS' EQUITY . . . . . . . . . . . . 900,529 989,269
---------- ----------
TOTAL. . . . . . . . . . . . . . . $3,149,870 $3,104,016
========== ==========
</TABLE>
- --------------------------------------------------------------------------
See notes to Consolidated Financial Statements
F-4<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
- --------------------------------------------------------------------------
1995 1994 1993
- --------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES . . . . . . . . . . . . . . . $2,218,139 $2,203,529 $2,048,295
COST OF REVENUES . . . . . . . . . . . 1,653,362 1,592,863 1,513,458
---------- ---------- ----------
GROSS PROFIT . . . . . . . . . . . . . 564,777 610,666 534,837
GENERAL AND ADMINISTRATIVE EXPENSES. . 527,683 474,372 400,942
---------- ---------- ----------
INCOME FROM OPERATIONS . . . . . . . . 37,094 136,294 133,895
---------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense, net of capitalized
interest of $21,455 and $49,096 in
1995 and 1994, respectively. . . . (161,515) (80,944) (61,497)
Miscellaneous. . . . . . . . . . . . 10,292 13,030 13,832
Real estate tax refund . . . . . . . - - 13,253
Gain on sale of property, plant
and equipment. . . . . . . . . . . 25,389 - -
---------- ---------- ----------
Other income (expense). . . . . (125,834) (67,914) (34,412)
---------- ---------- ----------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES, EXTRAORDINARY CREDIT
AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE. . . . . . . . (88,740) 68,380 99,483
PROVISION FOR INCOME TAXES. . . . . . - 35,300 33,800
---------- ---------- ----------
INCOME (LOSS) BEFORE EXTRAORDINARY
CREDIT AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE. . . (88,740) 33,080 65,683
EXTRAORDINARY CREDIT - Reduction of
income taxes arising from carry-
forward of prior year's operating
losses. . . . . . . . . . . . . . . - - 33,800
---------- ---------- ----------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE . . . . . . . . . . . . . (88,740) 33,080 99,483
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE. . . . . . . . . . . . . . . - 21,600 -
---------- ---------- ----------
NET INCOME (LOSS) . . . . . . . . . . $ (88,740) $ 54,680 $ 99,483
========== ========== ==========
F-5<PAGE>
<PAGE>
<S> <C> <C> <C>
EARNINGS (LOSS) PER COMMON SHARE:
Before extraordinary credit. . . . . $ (1.21) $ .45 $ .89
Extraordinary credit . . . . . . . . - - .46
Cummulative effect of
accounting change . . . . . . . . - .29 -
---------- ---------- ----------
NET INCOME (LOSS) PER COMMON SHARE . . $ (1.21) $ .74 $ 1.35
========== ========== ==========
</TABLE>
- --------------------------------------------------------------------------
See Notes to Consolidated Financial Statement
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
- --------------------------------------------------------------------------------------------
.COMMON STOCK (1). TOTAL
SHARES ADDITIONAL STOCKHOLDERS'
ISSUED AMOUNT CAPITAL DEFICIT EQUITY
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, OCTOBER 31, 1992 . . . 73,537 $1,251,370 $ 799,227 $(1,215,491) $ 835,106
NET INCOME. . . . . . . . . . . 99,483 99,483
------- ---------- ---------- ----------- ----------
BALANCE, OCTOBER 31, 1993 . . . 73,537 1,251,370 799,227 (1,116,008) 934,589
NET INCOME. . . . . . . . . . . 54,680 54,680
------- ---------- ---------- ----------- ----------
BALANCE, OCTOBER 31, 1994 . . . 73,537 1,251,370 799,227 (1,061,328) 989,269
NET LOSS. . . . . . . . . . . . (88,740) (88,740)
------- ---------- ---------- ----------- ----------
BALANCE, OCTOBER 31, 1995 . . . 73,537 $1,251,370 $799,227 $(1,150,068) $900,529
======= ========== ========== =========== ==========
</TABLE>
(1) No par value; authorized 105,000 shares.
- --------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
F-6<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
- --------------------------------------------------------------------------
1995 1994 1993
- --------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss). . . . . . . . . $ (88,740) $ 54,680 $ 99,483
----------- ---------- ----------
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation . . . . . . . . . 193,234 160,778 156,232
Amortization . . . . . . . . . 4,740 4,740 1,580
Gain on sale of property, plant
and equipment. . . . . . . . (25,389) (2,000) -
Cumulative effect of change in
accounting principle . . . . - (21,600) -
Deferred tax expense . . . . . - 21,600 -
Changes in assets and
liabilities:
Accounts receivable, trade . (69,611) (33,563) (2,003)
Prepaid expenses and other . (7,230) 1,824 36,386
Restricted cash. . . . . . . 32,077 (5,814) (14,003)
Deferred costs . . . . . . . - - (23,683)
Accounts payable, trade. . . (77,087) (5,250) 52,201
Accrued expenses and other . (36,332) 59,046 (115,807)
Customer deposits. . . . . . (32,082) 5,032 13,146
----------- ---------- ----------
Total adjustments . . . . . (17,680) 184,793 104,049
----------- ---------- ----------
Net cash provided by
(used in) operating
activities. . . . . . . . . (106,420) 239,473 203,532
----------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and
equipment. . . . . . . . . . . . (188,297) (688,630) (381,787)
Proceeds from sale of property, plant
and equipment. . . . . . . . . . . 25,888 2,000 -
----------- ---------- ----------
Net cash used in investing
activities . . . . . . . . (162,409) (686,630) (381,787)
----------- ---------- ----------
F-7<PAGE>
<PAGE>
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt. . . . . . . . . (1,106,517) (460,056)(1,151,554)
Proceeds from issuance of debt . . 1,386,612 914,023 1,339,219
----------- ---------- ----------
Net cash provided by
financing activities . . . 280,095 453,967 187,665
----------- ---------- ----------
NET INCREASE IN CASH . . . . . . . . 11,266 6,810 9,410
CASH, BEGINNING OF YEAR. . . . . . . 20,194 13,384 3,974
----------- ---------- ----------
CASH, END OF YEAR. . . . . . . . . . $ 31,460 $ 20,194 $ 13,384
=========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid (refunded) for:
Interest . . . . . . . . . . . $ 164,375 $ 129,634 $ 70,065
=========== ========== ==========
Income taxes . . . . . . . . . . $ - $ (500)$ 25,546
=========== ========== ==========
SUPPLEMENTAL NONCASH INVESTING
ACTIVITY:
Liabilities incurred for purchase
of property, plant and equipment . $ - $ 61,711 $ -
=========== ========== ==========
</TABLE>
- -------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
F-8<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Buck
Hill Falls Company and its wholly-owned subsidiary, Buck Hill
Water Company (the "Company"). All significant intercompany
balances and transactions are eliminated.
The accompanying consolidated financial statements have been
prepared on a going-concern basis which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. The Company incurred a net loss of
$88,740 for the year ended October 31, 1995 and at October 31,
1995, the Company has a cumulative deficit of $1,150,068 and a
working capital deficiency of $772,266. As described in Note 4,
although the Company's line of credit is available through May 31,
1997, the ability to borrow under the line is contingent upon
certain factors. As a result, continuation of the Company in its
present form is dependent upon the successful maintenance of its
debt terms, its ability to obtain additional financing if needed
and the eventual achievement of sustained profitable operations.
Management believes that revisions in the Company's operating
requirements, including rate increases for amenities and the
effect of the water rate increase implemented in August 1995,
provide the opportunity for the Company to continue as a going
concern. However, there is no assurance that management's actions
will be successful, or if they are not successful, that the
Company would be able to continue as a going concern.
PROPERTY, PLANT AND EQUIPMENT
The Company recognizes real and personal property to which it has
title at cost.
Depreciation is computed using both straight-line and accelerated
methods over the estimated useful lives of the assets.
DEFERRED COSTS
Costs incurred for issuance of the 6-1/4% subordinated notes have
been deferred and are amortized using the straight-line method
over the term of the notes.
F-9 <PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------
EARNINGS (LOSS) PER COMMON SHARE
--------------------------------
Earnings (loss) per common share is based on the weighted average
number of shares outstanding (73,537 in 1995, 1994 and 1993).
STATEMENT OF CASH FLOWS
-----------------------
For purposes of the statement of cash flows, restricted cash (Note
2) is not considered to be cash since such funds are restricted in
use for capital improvements and repairs to The Cottages at Buck
Hill Falls.
ACCOUNTING PRINCIPLES
---------------------
In fiscal 1994, the Company adopted Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), Accounting for Income
Taxes. SFAS 109 requires an asset and liability approach for
accounting and reporting for income taxes. The cumulative effect
of the change in accounting principle as of November 1, 1993
resulted in a benefit to net income of approximately $21,600.
2. RESTRICTED CASH AND CUSTOMER DEPOSITS:
The Company is responsible for repairs and replacements at The
Cottages at Buck Hill Falls ("The Cottages"), a residential
development. The Company has a funding program to meet this
obligation, under which purchasers of properties in The Cottages
pay a fee of $100 to $125 per month, depending on the type of
residence. These fees are accounted for as customer deposits. A
portion of the fee is placed in a restricted fund for long-range
capital improvements for units in The Cottages and the balance of
the fee is used for exterior maintenance of such residences.
Under terms of restrictive covenants signed by purchasers of
properties in The Cottages, the Company has management
responsibility for these funds. Accumulated funds are held in
separate savings accounts and are generally not available for
expenditures for normal operations. If additional funds are
needed for long-range capital improvements, the Company has the
right, under the restrictive covenants, to increase regular
assessments, pass special assessments or delay major repairs and
replacements until funds are available. The Company seeks the
advice of a special committee of property owners regarding the
management of these funds.
F-10<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------
3. PROPERTY, PLANT AND EQUIPMENT:
The components of property, plant and equipment at October 31,
1995 and 1994 are summarized as follows:
<TABLE>
1995 1994
---- ----
<S> <C> <C>
Land . . . . . . . . . . . . . . $ 445,831 $ 446,330
Buildings. . . . . . . . . . . . 941,913 932,136
Recreational facilities. . . . . 1,384,356 1,356,771
Sewer and water facilities . . . 1,340,588 423,168
Machinery and equipment . . . . 381,285 407,605
Automotive equipment . . . . . . 163,069 122,943
Furniture and fixtures . . . . . 92,528 92,528
Construction in progress . . . . - 832,211
----------- ----------
Total . . . . . . . . . . 4,749,570 4,613,692
Less accumulated depreciation. . (1,993,179)(1,851,865)
----------- ----------
Property, plant and equipment. . $ 2,756,391 $2,761,827
=========== ==========
</TABLE>
4. LONG-TERM DEBT:
Long-term debt at October 31, 1995 and 1994 is summarized as
follows:
<TABLE>
1995 1994
---- ----
<S> <C> <C>
Borrowings under revolving loan
agreement (see below). . . . . . $ 816,120 $ 797,708
Note payable - bank, payable in
monthly installments of $8,985,
including interest at the bank's
base rate (8.75% at October 31,
1995) plus 1-1/2%, maturing
May 4, 2015. The loan is secured
by a first mortgage on
approximately 2,200 acres of land
and land improvements located in
Barrett Township, Monroe County,
Pennsylvania, along with
assessments and fee revenues . . 892,852 650,000
Note payable - bank, payable in
F-11<PAGE>
<PAGE>
monthly installments of $1,250
including interest at the bank's
base rate (8.75% at October 31,
1995) plus 1-1/4%, maturing
November 2002. The note is
secured by a second mortgage on
approximately 2,600 acres of
land and land improvements
located in Barrett Township,
Monroe County, Pennsylvania.
Additionally, a ten-year lease
between the Company and the U.S.
Postal Service is pledged as
collateral . . . . . . . . . . . 55,697 60,677
Note payable - bank, payable in
monthly installments of $586
including interest at 9.5%,
maturing June 2000; secured by
equipment with a depreciated
cost of $22,330. . . . . . . . . 26,056 -
Note payable - financial
institution, payable in monthly
Installments of $235 including
interest at 11.5%, maturing July
2000; secured by equipment with
a depreciated cost of $8,973 . . . 10,188 -
Note payable - bank, payable in
monthly installments of $199
including interest at the
bank's base rate (8.75% at
October 31, 1995) plus 1-1/2%,
maturing December 15, 1996;
secured by equipment with a
depreciated cost of $2,368 . . . 2,690 4,747
Note payable - bank, repaid in
August 1995. . . . . . . . . . . - 10,376
--------- ----------
Total . . . . . . . . . . . . 1,803,603 1,523,508
Less current portion . . . . . . . 847,385 847,586
---------- ----------
Long-term debt . . . . . . . . . . $ 956,218 $ 675,922
========== ==========
</TABLE>
The Company has a secured revolving line of credit with a bank for
$1,000,000. Borrowings under this agreement bear interest at the
prime rate (8.75% at October 31, 1995) plus 1-1/2%. Approximately
2,600 acres of land and land improvements located in Barrett
Township, Monroe County, Pennsylvania are pledged as collateral,
along with dues, assessments and fee revenues. The line of
credit is available through May 31, 1997, although amounts
borrowed are payable on demand. The ability to borrow under the
line is contingent upon the Company maintaining a satisfactory
F-12<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------
financial position and subject to annual review by the bank of the
Company's financial statements. If, in the opinion of the
authorized lending officers of the bank, the Company's credit
worthiness materially declines, the credit line will cease to be
available for future draws and any existing balance will be
required to be fully amortized over a reasonable term.
The aggregate principal payments required on long-term debt at
October 31, 1995 are as follows:
YEARS ENDING OCTOBER 31:
-----------------------
[S] [C]
1996 . . . . . . . . . . . . . . . . . . . . . . . $ 847,385
1997 . . . . . . . . . . . . . . . . . . . . . . . 31,889
1998 . . . . . . . . . . . . . . . . . . . . . . . 33,956
1999 . . . . . . . . . . . . . . . . . . . . . . . 36,802
2000 . . . . . . . . . . . . . . . . . . . . . . . 36,022
Thereafter . . . . . . . . . . . . . . . . . . . . 817,549
----------
Total . . . . . . . . . . . . . . . . . $1,803,603
==========
5. ACCRUED EXPENSES AND OTHER
CURRENT LIABILITIES:
Accrued expenses and other current liabilities are comprised of
the following at October 31, 1995 and 1994:
<TABLE>
1995 1994
----- ----
<S> <C> <C>
Real estate taxes. . . . . . . . . $ 66,879 $ 60,746
Unearned revenue . . . . . . . . . 51,796 70,006
Professional fees. . . . . . . . . 21,780 35,079
Wages and employee withholdings. . 15,923 26,742
Vacation pay . . . . . . . . . . . 11,406 9,002
Interest . . . . . . . . . . . . . 9,673 12,533
Other taxes. . . . . . . . . . . . 5,898 5,579
-------- --------
Total. . . . . . . . . . . . $183,355 $219,687
======== ========
</TABLE>
6. SUBORDINATED DEBT:
The 6-1/4% subordinated notes are due July 1, 1998. The notes may
be redeemed prior to maturity at the election of the Company upon
at least 30 days written notice to the holders thereof, in whole
or in multiples of $1,000. The redemption price is equal to the
principal amount plus accrued interest to the date fixed for
redemption. No premium is payable upon redemption.
F-13<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------
7. INCOME TAXES:
Significant components of the Company's deferred tax assets as of
October 31, 1995 and 1994 are as follows:
<TABLE>
1995 1994
---- ----
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards . . . . . $219,600 $191,000
Allowance for bad debts. . . . . . . . . . 24,700 11,100
Accrued vacation . . . . . . . . . . . . . 800 1,000
Unearned revenue . . . . . . . . . . . . . 13,800 20,000
Depreciation . . . . . . . . . . . . . . . 2,900 14,000
Reorganization cost. . . . . . . . . . . . 42,300 43,700
-------- --------
304,100 280,800
Valuation allowance . . . . . . . . . (304,100) (280,800)
-------- --------
Total . . . . . . . . . . . . . . $ - $ -
======== ========
</TABLE>
The Company has established a valuation allowance for deferred tax
assets. SFAS 109 requires that such a valuation allowance be
recorded when it is more likely than not that the deferred tax
assets will not be realized.
The provision for income taxes is comprised of the following:
<TABLE>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current:
Federal . . . . . . . . . . . $ - $ - $33,800
State . . . . . . . . . . . . - 13,700 -
Deferred federal, net of tax
benefit of operating loss
carryforward of approximately
$34,800 in 1995 . . . . . . . - 21,600 -
------ ------- -------
Total . . . . . . . . . . 0 35,300 33,800
====== ======= ======
</TABLE>
A reconciliation between the expected statutory income tax rate
and the effective income tax rate on income before income taxes is
summarized as follows:
F-14<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------
<TABLE>
. . . .1995 . . . . . .1994 . . . . . . . .1993 . . .
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
<S> <C> <C> <C> <C> <C> <C>
Provision (credit) at expected
statutory rate . . . . . . . . . $(19,500) 22.0% $15,000 22.0% $33,800 34.0%
State income tax, net of federal
income tax benefit . . . . . . . (8,300) - 11,800 17.3 - -
Change in valuation allowance. . . 26,100 22.1 7,500 10.9 - -
Other. . . . . . . . . . . . . . . 1,700 (0.1) 1,000 1.4 - -
-------- ----- ------- ---- ------- ----
Effective income tax provision
and rate . . . . . . . . . . . . $ - - $35,300 51.6% $33,800 34.0%
======== ===== ======= ==== ======= ====
</TABLE>
At October 31, 1995, the Company has approximately $654,000 and
$883,700 of net operating losses available to carryforward for
federal and state income tax purposes, respectively. The federal
net operating loss carryforwards will expire between fiscal 2008
and 2010 and the state net operating loss carryforwards will expire
between fiscal 1996 and 1998.
8. COMMITMENTS:
At October 31, 1995, the Company was obligated under various
noncancelable operating leases for golf carts and office
equipment. The Company anticipates these leases will be replaced
by other leases in the normal course of business. Minimum future
rental obligations under noncancelable operating leases in effect
at October 31, 1995 are as follows:
<TABLE>
YEARS ENDING OCTOBER 31:
-----------------------
<S> <C>
1996 . . . . . . . . . . . . . . . . . . . . . $ 112,679
1997 . . . . . . . . . . . . . . . . . . . . . 70,829
1998 . . . . . . . . . . . . . . . . . . . . . 49,876
1999 . . . . . . . . . . . . . . . . . . . . . 34,830
---------
Total minimum payments required $ 268,214
=========
</TABLE>
Rentals charged to operations were $124,151, $85,230 and $81,708
in 1995, 1994 and 1993, respectively.
F-15<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------
9. CONTINGENCIES:
The Company was informed by the Department of Environmental
Protection (DEP) that it must install and begin operation of a
continuous water filtration and disinfection system pursuant to
amendments to the Pennsylvania Safe Drinking Water Act enacted in
1989 no later than May 1993. The Company began installation of
the water treatment system, however, due to circumstances beyond
its control, was delayed and not able to meet DEP's deadline. The
filtration system was placed into service, inspected and a final
permit authorizing operation was issued by DEP on February 7,
1995. Under regulations, DEP can assess a civil penalty against
the Company up to $5,000 per day for the violation.
Legal counsel has assisted the Company in discussion with its
consultants and DEP regarding this matter. DEP intended to wait
until the Company complied with the regulations and completed
installation of the system prior to considering any formal action,
including assessing civil penalties against the Company. DEP has
taken no formal action against the Company in regard to its
delayed compliance. In the event a civil penalty is assessed, the
Company has thirty days to appeal by filing an action with the
Environmental Hearing Board to contest either the amount of the
penalty or the fact of the violation. Legal counsel believes
there are defenses on behalf of the Company concerning any claimed
civil penalty. However, management and legal counsel are unable
to determine whether DEP will take any formal action or the
possible effects of this matter, if any.
The Company is a defendant in a declaratory judgment action filed
in 1995 wherein the plaintiffs ask for a declaratory judgment
determining the rights of the individual plaintiffs and others
under certain covenants imposed by the Company, rights to the use
of Company owned common areas and the right to the Company to
assess owners for the purpose of retiring debt. The suit also
challenges the right of the Company to make assessments and dues
charges and seeks an injunction against collection actions filed
by the Company and against the sale or subdivision of any lands
which make up The Buck Hill Falls community, except subdivided
residential building lots in the normal course of business. The
plaintiffs also ask the Court to declare that the Company has
waived all rights to make assessment and dues charges and that
members of the Lot and Cottage Owners' Association of Buck Hill
Falls (the "Association") have common ownership rights, interest
or easement rights in all Company property.
No monetary damages are sought. However, in the opinion of legal
counsel, a judgment in favor of the plaintiffs would have a
material adverse effect on the Company.
F-16<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------
Settlement negotiations are being pursued. The Company and the
Association drafted an agreement which will provide for a joint
committee, consisting of members of the Company and the
Association, who will recommend the amount of annual dues to be
approved by the Company's Board of Directors. Special assessments
related to capital expenditures that benefit the community will be
consolidated with annual dues. Special assessments related to
acquire property, repay debt, develop land, etc., will be
considered if the Company grants property owners an option to
purchase common stock in consideration for payment of this special
assessment. Upon adoption of the draft agreement, the Company
will dismiss its collection actions against those Association
members involved in the declaratory judgment, the Association will
dismiss its declaratory action against the Company, the
Association will exercise efforts to cause individual plaintiffs
to concur in dismissal of the declaratory judgment and to pay in
full their dues assessments. The Company's Board of Directors
unanimously approved the terms of the draft agreement. Management
believes the Association's Board of Directors will adopt the terms
of the draft agreement and the aforementioned declaratory judgment
will be dismissed.
10. SIGNIFICANT CONCENTRATIONS OF CREDIT RISK:
The Company provides recreational facilities, water and sewage
services, and miscellaneous maintenance services, and grants
credit, primarily to residents of Buck Hill Falls, Monroe
County, Pennsylvania.
All cash and restricted cash is maintained in one bank and
insured by the Federal Deposit Insurance Corporation up to
$100,000.
- -----------------------------------------------------------------
F-17<PAGE>
<PAGE>
INTERIM FINANCIAL DATA
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------
APRIL 30,
1996 OCTOBER 31,
(UNAUDITED) 1995*
- --------------------------------------------------------------------------
ASSETS
======
<S> <C> <C>
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . $ 64,152 $ 31,460
Accounts receivable, net . . . . . . . 220,144 245,369
Prepaid expenses and other current
assets . . . . . . . . . . . . . . . 13,795 30,228
---------- ----------
Total current assets . . . . . . . 298,091 307,057
RESTRICTED CASH. . . . . . . . . . . . . 85,616 73,799
PROPERTY, PLANT AND EQUIPMENT, Net . . . 2,699,387 2,756,391
DEFERRED COSTS, Net. . . . . . . . . . . 10,253 12,623
---------- ----------
TOTAL. . . . . . . . . . . . . . . $3,093,347 $3,149,870
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
====================================
CURRENT LIABILITIES:
Note payable, unsecured . . . . . . . $ 11,300 $ 11,300
Current portion of long-term debt . . 946,562 847,385
Accounts payable, trade . . . . . . . 12,356 37,283
Accrued expenses and other. . . . . . 305,587 183,355
---------- ----------
Total current liabilities . . . . 1,275,805 1,079,323
CUSTOMER DEPOSITS . . . . . . . . . . . 85,616 73,800
LONG-TERM DEBT. . . . . . . . . . . . . 952,244 956,218
6-1/4% SUBORDINATED NOTES . . . . . . . 140,000 140,000
---------- ----------
Total liabilities . . . . . . . . 2,453,665 2,249,341
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock. . . . . . . . . . . . . 1,251,370 1,251,370
Contributed capital . . . . . . . . . 799,227 799,227
Deficit . . . . . . . . . . . . . . . (1,410,915) (1,150,068)
---------- ----------
Total stockholders' equity. . . . 639,682 900,529
---------- ----------
TOTAL . . . . . . . . . . . . . $3,093,347 $3,149,870
========== ==========
</TABLE>
*Condensed from audited financial statements
The accompanying notes are an integral part of these
condensed consolidated financial statements.
F-18<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
=======================================
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
- ------------------------------------------------------------------------------------
SIX MONTHS ENDED THREE MONTHS ENDED
......APRIL 30...... ......APRIL 30.....
1996 1995 1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES . . . . . . . . . . . . . . . $ 631,603 $ 633,715 $ 339,990 $ 332,524
COST OF REVENUES . . . . . . . . . . . 679,610 607,509 355,654 342,411
--------- --------- --------- ---------
GROSS (LOSS) PROFIT FROM OPERATIONS. . (48,007) 26,206 (15,664) (9,887)
GENERAL AND ADMINISTRATIVE EXPENSES. . 164,116 261,149 101,501 131,946
--------- --------- --------- ---------
LOSS FROM OPERATIONS . . . . . . . . . (212,123) (234,943) (117,165) (141,833)
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Miscellaneous. . . . . . . . . . . . 39,367 59,170 16,398 21,974
Interest expense . . . . . . . . . . (88,092) (72,938) (38,767) (31,842)
Capitalized interest . . . . . . . . - 21,455 - 5,528
--------- --------- --------- ---------
Other income (expense), net. . . . (48,725) 7,687 (22,369) (4,340)
--------- --------- --------- ---------
NET LOSS . . . . . . . . . . . . . . . $(260,848) $(227,256) $(139,534) $(146,173)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING. . . . . . . . . . . . . 73,537 73,537 73,537 73,537
NET LOSS PER COMMON SHARE. . . . . . . $ (3.55) $ (3.09) $ (1.90) $ (1.99)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
F-19<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------
SIX MONTHS ENDED
.......APRIL 30......
1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . $(260,848) $(227,256)
Adjustments for noncash charges:
Depreciation and amortization. . . . . . 107,011 89,823
Gain on sale of land . . . . . . . . . . - (15,013)
Changes in assets and liabilities . . . . 141,333 133,478
--------- ---------
Net cash used in operating activities. . (12,504) (18,968)
--------- ---------
INVESTING ACTIVITIES:
Purchase of property and equipment . . . . (50,007) (94,411)
Proceeds from sale of land . . . . . . . . - 15,513
--------- ---------
Net cash used in investing activities. . (50,007) (78,898)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of debt . . . . . . 171,014 102,270
Repayment of debt. . . . . . . . . . . . . (75,811) (7,008)
--------- ---------
Net cash provided by financing
activities . . . . . . . . . . . . . . 95,203 95,262
--------- ---------
INCREASE (DECREASE) IN CASH. . . . . . . . . . 32,692 (2,604)
CASH, BEGINNING OF PERIOD. . . . . . . . . . . 31,460 20,194
--------- ---------
CASH, END OF PERIOD. . . . . . . . . . . . . . $ 64,152 $ 17,590
========= =========
CASH PAYMENTS FOR:
Interest . . . . . . . . . . . . . . . . . . $ 92,467 $ 58,298
========= =========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
F-20<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------
NOTE 1: BASIS OF PRESENTATION
Although the interim condensed consolidated financial
statements of Buck Hill Falls Company and Subsidiary (the "Company") are
unaudited, it is the opinion of the Company's management that all normal
recurring adjustments necessary for a fair statement of the results for
the interim periods presented have been reflected therein. The results of
operations for any interim period are not necessarily indicative of
results that may be expected for the entire year.
These statements should be read in conjunction with the
consolidated financial statements and related notes included in the
Company's annual report on Form 10-K for the year ended October 31, 1995.
F-21<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in
connection with the issuance and distribution of the securities being
registered, all of which are being borne by the Registrant.
Securities and Exchange Commission
registration fee . . . . . . . . . $ 734
Accountants' fees and expenses . . . 7,500
Legal fees and expenses. . . . . . . 35,000
Blue sky qualification fees
and expenses . . . . . . . . . . . 2,000
Miscellaneous. . . . . . . . . . . . 4,766
--------
TOTAL. . . . . . . . . . . . . . . . $ 50,000
========
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Sections 1741-1750 of the Pennsylvania Business
Corporation Law, as amended, the Company has the power to indemnify
directors and officers under certain prescribed circumstances and subject
to certain limitations against certain costs and expenses, including
attorneys' fees actually and reasonably incurred in connection with any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, to which any of them is a party by reason of his or her
being a director or officer of the Company if it is determined that he or
she acted in accordance with the applicable standard of conduct set forth
in such statutory provision.
Article 21 of the By-laws of the Company provides that the
Company is authorized to indemnify any of its directors and officers who
is a party to, or threatened to be made a party to, or called as a witness
in connection with any action, suit or proceeding by reason of the fact
that he or she is or was a director or officer of the Company or is or was
serving at the request of the Company as a director, officer, employee or
agent of another enterprise, against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and reasonably
incurred by him if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interest of the Company
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. There is a presumption that
the person is entitled to indemnification unless either a majority of the
directors who are not involved in such proceeding, or if there are fewer
II-1<PAGE>
<PAGE>
than three such directors, the holders of one-third of the outstanding
shares of the Company, determine that the person is not entitled to such
presumption.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
None.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
Exhibit
No.
- -------
3.1 Articles of Incorporation, as amended.
3.2 By-laws, as amended.
5* Opinion of Wolf, Block, Schorr and Solis-Cohen with respect
to the legality of the securities being offered.
10.1.1 Loan Agreement, dated July 24, 1992, between Penn Security
Bank and Trust Company and the Registrant - Incorporated by
reference to Exhibit 10.6.1 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended October 31, 1992,
filed with the Commission on February 24, 1993.
10.1.2 Promissory Note, dated July 24, 1992, issued by the
Registrant to Penn Security Bank and Trust Company -
Incorporated by reference to Exhibit 10.6.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1992, filed with the Commission on
February 24, 1993.
10.1.3 Open-End Mortgage, dated July 24, 1992, issued by the
Registrant to Penn Security Bank and Trust Company -
Incorporated by reference to Exhibit 10.6.3 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1992, filed with the Commission on
February 24, 1993.
10.1.4 Collateral Assignment of Dues, Assessments and Fee Income,
dated July 24, 1992, issued by the Registrant to Penn
Security Bank and Trust Company - Incorporated by reference
to Exhibit 10.6.4 to the Registrant's Annual Report on Form
10-K for the fiscal year ended October 31, 1992, filed with
the Commission on February 24, 1993.
10.2 Loan Agreement, dated August 12, 1993, between the Registrant
and Penn Security Bank and Trust Company, incorporated by
reference to Exhibit 10.8 to the Registrant's Annual Report on
II-2<PAGE>
<PAGE>
Form 10-K for the fiscal years ended October 31, 1994 and
1993.
10.3 Loan Agreement, dated May 4, 1995, between the Buck Hill
Water Company and Penn Security Bank and Trust Company,
incorporated by reference to Exhibit 10.9 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
October 31, 1995.
10.4 Agreement dated June 8, 1996, between the Company and the Lot
and Cottage Owners' Association of Buck Hill Falls, Inc.
21 List of Subsidiaries of the Registrant.
22.1 Consent of Independent Certified Public Accountants and
Report on Schedules.
22.3 Consent of Wolf, Block, Schorr and Solis-Cohen (included as
part of Exhibit 5).
24 Power of Attorney (included on signature page of this
Registration Statement).
- ----------------------
* To be filed by amendment
(b) Consolidated Financial Statement Schedules
See page S-1 for an Index to the Consolidated Financial
Statement Schedules filed with this Registration Statement.
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable or the required information is given in the consolidated
financial statements or notes thereto, and therefore have been omitted.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Registrant pursuant to Item 14
above, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
II-3<PAGE>
<PAGE>
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by
a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, at Buck Hill
Falls, Pennsylvania, on the 19th day of July, 1996.
BUCK HILL FALLS COMPANY
By: /s/ David B. Ottaway
-------------------------------
David B. Ottaway
Chairman and President
II-4<PAGE>
<PAGE>
Each person whose signature appears below constitutes and
appoints David B. Ottaway and Anthony C. Bowe, and each of them, such
person's true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in such person's
name, place and stead, in any and all capabilities, to sign any and all
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documentation in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ------ -----
/s/ David B. Ottaway
- ----------------------- Chairman and President, July 19, 1996
David B. Ottaway Director (Principal
Executive Officer)
/s/ Anthony C. Bowe
- ---------------------- Vice President, Treasurer August 1, 1996
Anthony C. Bowe and Chief Financial Officer
(Principal Financial and
Accounting Officer)
- ---------------------- Director July , 1996
George J. Byron ---
/s/ Frank J. Dracos
- ---------------------- Director August 2, 1996
Frank J. Dracos, M.D.
- ---------------------- Director July , 1996
Edwin A. Gee ---
/s/ Grace M. Godshalk
- ---------------------- Director July 29, 1996
Grace M. Godshalk
/s/ Clifford Press
- ---------------------- Director July 29, 1996
Clifford Press
/s/ James T. Sygenda
- ---------------------- Director July 29, 1996
James T. Sygenda
/s/ Richard C. Unger
- ---------------------- Director Jul 29, 1996
Richard C. Unger, Jr.
II-5<PAGE>
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
===================================================
Property, Plant and Equipment for the Years Ended
October 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . S-2
Accumulated Depreciation of Property, Plant and
Equipment for the Years Ended October 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Valuation and Qualifying Accounts for the Years Ended
October 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . S-4
Short-term Borrowings for the Years Ended
October 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . S-5
Supplementary Statement of Operations Information for
the Years Ended October 31, 1995, 1994 and 1993 . . . . . . . . . . S-6
S-1<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
<TABLE>
- ----------------------------------------------------------------------------------------------------
BALANCE AT OTHER CHANGES -
BEGINNING ADDITIONS ADD (DEDUCT) - BALANCE AT
CLASSIFICATION OF YEAR AT COST (1) RETIREMENTS DESCRIBE END OF YEAR
- ----------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED
OCTOBER 31, 1995
----------------
<S> <C> <C> <C> <C> <C>
Land . . . . . . . . . . . . $ 446,330 $ (500) $ 445,831
Buildings. . . . . . . . . . 932,136 $ 9,777 941,913
Recreational facilities. . . 1,356,771 27,585 1,384,356
Sewer and water facilities . 423,168 37,100 $ 880,320 (2) 1,340,588
Machinery and equipment. . . 407,605 25,600 (51,920) 381,285
Automotive equipment . . . . 122,943 40,126 163,069
Furniture and fixtures . . . 92,528 92,528
Construction in progress . . 832,211 48,109 (882,320)(2) -
---------- --------- ---------- --------- ---------
TOTALS $4,613,692 $ 188,297 $ (52,420) $ (2,000) $4,749,570
========== ========= ========== ========= ==========
FOR THE YEAR ENDED
OCTOBER 31, 1994
----------------
Land . . . . . . . . . . . . $ 446,330 $ 446,330
Buildings. . . . . . . . . . 913,356 $ 18,780 932,136
Recreational facilities. . . 1,253,568 103,203 1,356,771
Sewer and water facilities . 407,854 15,314 423,168
Machinery and equipment. . . 397,080 10,525 407,605
Automotive equipment . . . . 121,127 18,091 $ (16,275) 122,943
Furniture and fixtures . . . 79,042 13,486 92,528
Construction in progress . . 822,980 509,231 (1) 832,211
---------- --------- ---------- --------- ---------
TOTALS $3,941,337 $ 688,630 $ (16,275) $ - $4,613,692
========== ========= ========== ========= ==========
S-2<PAGE>
<PAGE>
- ----------------------------------------------------------------------------------------------------
BALANCE AT OTHER CHANGES -
BEGINNING ADDITIONS ADD (DEDUCT) - BALANCE AT
CLASSIFICATION OF YEAR AT COST (1) RETIREMENTS DESCRIBE END OF YEAR
- ----------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED
OCTOBER 31, 1993
----------------
<S> <C> <C> <C> <C> <C>
Land . . . . . . . . . . . . $ 446,330 $ 446,330
Buildings. . . . . . . . . . 911,756 $ 1,600 913,356
Recreational facilities. . . 1,196,063 57,505 1,253,568
Sewer and water facilities . 405,035 2,819 407,854
Machinery and equipment. . . 368,641 28,439 397,080
Automotive equipment . . . . 98,637 22,490 121,127
Furniture and fixtures . . . 78,388 654 79,042
Construction in progress . . 54,700 268,280 (1) 322,980
---------- --------- ---------- --------- ---------
TOTALS $3,559,550 $ 381,787 $ - $ - $3,941,337
========== ========= ========== ========= ==========
</TABLE>
(1) Installation of water treatment system.
(2) Reclassification.
S-3<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
SCHEDULE VI
ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
<TABLE>
- ----------------------------------------------------------------------------------------------------
ADDITIONS
BALANCE AT CHARGED TO OTHER CHANGES -
BEGINNING COSTS AND ADD (DEDUCT) - BALANCE AT
CLASSIFICATION OF YEAR EXPENSES RETIREMENTS DESCRIBE END OF YEAR
- ----------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED
OCTOBER 31, 1995
------------------
<S> <C> <C> <C> <C> <C>
Buildings. . . . . . . . . . $ 358,388 $ 18,470 $ 376,858
Recreational facilities. . . 712,839 77,872 790,711
Sewer and water facilities . 266,929 46,715 313,644
Machinery and equipment. . . 352,683 20,142 $ (51,920) 320,905
Automotive equipment . . . . 91,893 22,480 114,373
Furniture and fixtures . . . 69,133 7,555 76,688
---------- -------- ---------- --------- ----------
TOTALS $1,851,865 $193,234 $ (51,920) $ - $1,933,179
========== ========= ========= ========= ==========
FOR THE YEAR ENDED
OCTOBER 31, 1994
------------------
<S> <C> <C> <C> <C> <C>
Buildings. . . . . . . . . . $ 339,606 $ 18,782 $ 358,388
Recreational facilities. . . 644,028 68,811 712,839
Sewer and water facilities . 255,152 11,777 266,929
Machinery and equipment. . . 312,904 39,799 352,683
Automotive equipment . . . . 93,744 14,424 $ (16,275) 91,893
Furniture and fixtures . . . 61,928 7,205 69,133
---------- -------- ---------- --------- ----------
TOTALS $1,707,362 $160,788 $ (16,275) $ - $1,851,865
========== ======== ========== ========= ==========
S-4<PAGE>
<PAGE>
- ----------------------------------------------------------------------------------------------------
ADDITIONS
BALANCE AT CHARGED TO OTHER CHANGES -
BEGINNING COSTS AND ADD (DEDUCT) - BALANCE AT
CLASSIFICATION OF YEAR EXPENSES RETIREMENTS DESCRIBE END OF YEAR
- ----------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED
OCTOBER 31, 1993
------------------
<S> <C> <C> <C> <C> <C>
Buildings. . . . . . . . . . $ 320,290 $ 19,316 $ 339,606
Recreational facilities. . . 584,752 59,276 644,028
Sewer and water facilities . 243,806 11,346 255,152
Machinery and equipment. . . 266,720 46,184 312,904
Automotive equipment . . . . 79,687 14,057 93,744
Furniture and fixtures . . . 55,875 6,053 61,928
---------- -------- ---------- --------- ----------
TOTALS $1,551,130 $156,232 $ - $ - $1,707,362
========== ========= ========== ========= ==========
</TABLE>
S-5<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
SCHEDULE VII
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
<TABLE>
- ------------------------------------------------------------------------------------------------------------
ADDITIONS
---------------------------
BALANCE AT CHARGED TO CHARGED TO OTHER CHANGES -
BEGINNING COSTS AND OTHER ACCOUNT - ADD (DEDUCT) - BALANCE AT
YEAR DESCRIPTION OF YEAR EXPENSES DESCRIBE DESCRIBE END OF YEAR
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1995 Allowance for doubtful
accounts . . . . . . . . $35,000 $150,631 $(105,771) (1) $ 79,860
Accumulated amortization,
deferred costs . . . . . 17,363 4,740 (2) 12,623
1994 Allowance for doubtful
accounts . . . . . . . . 35,000 95,241 (95,241) (1) 35,000
Accumulated amortization,
deferred costs . . . . . 22,103 4,740 (2) 17,363
1993 Allowance for doubtful
accounts . . . . . . . . 25,000 101,420 (91,420) (1) 35,000
Accumulated amortization,
deferred costs . . . . . 23,683 1,580 (2) 22,103
</TABLE>
(1) Accounts written off.
(2) Amounts represent amortization of deferred costs incurred for
issuance of the 6-1/4% subordinated notes.
S-6<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
<TABLE>
- ----------------------------------------------------------------------------------------------------
MAXIMUM AVERAGE WEIGHTED
WEIGHTED AMOUNT AMOUNT AVERAGE
CATEGORY OF AVERAGE OUTSTANDING OUTSTANDING INTEREST
AGGREGATE BALANCE AT INTEREST DURING DURING RATE DURING
BORROWINGS END OF YEAR RATE THE YEAR THE YEAR THE YEAR
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial paper:
1995 $11,300 5% $11,300 $11,300 5%
1994 $11,300 5% $11,300 $11,300 5%
1993 $11,300 5% $11,300 $11,300 5%
</TABLE>
Commercial paper represents an unsecured borrowing with no specified
repayment terms from the Lot and Cottage Owners Association of Buck Hill
Falls.
The average amount outstanding during the year represents the average monthly
principal balances outstanding during the year.
The weighted average interest rate during the year was computed by dividing
the actual interest expense incurred on short-term borrowings by the average
amount outstanding during the year.
S-7<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
SCHEDULE X
SUPPLEMENTARY STATEMENT OF OPERATIONS INFORMATION
YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993
<TABLE>
- --------------------------------------------------------------------------
ITEM CHARGED TO COSTS AND EXPENSES
- --------------------------------------------------------------------------
1995 1994 1993
----- ---- ----
<S> <C> <C> <C>
Maintenance and repairs . . . . . . . . $ 137,058 $116,301 $145,794
========= ======== ========
Depreciation and amortization of
intangible assets, pre-operating costs
and similar deferrals:
Depreciation. . . . . . . . . . . . . $ 193,234 $160,778 $156,232
Deferred debt issuance costs. . . . . 4,740 4,740 1,580
--------- -------- --------
$ 197,974 $165,518 $157,812
========= ======== ========
Taxes, other than payroll and
income taxes:
Real estate. . . . . . . . . . . . . $ 83,120 $ 60,746 $ 59,896
Capital stock. . . . . . . . . . . . 8,647 4,226 4,754
--------- -------- --------
$ 91,767 $ 64,972 $ 64,650
========= ======== ========
</TABLE>
Royalties, amortization and advertising costs are not set forth inasmuch
as such items do not exceed 1% of gross revenues as shown in the
consolidated statement of operations.
S-8<PAGE>
<PAGE>
LIST OF EXHIBITS ATTACHED HERETO
-------------------------------
3.1 Articles of Incorporation, as amended.
3.2 By-laws, as amended.
10.4 Agreement dated June 8, 1996, between the Company
and the Lot and Cottage Owners' Association of Buck
Hill Falls, Inc.
21 List of Subsidiaries of the Registrant.
22.1 Consent of Independent Certified Public Accountants
and Report on Schedules.
<PAGE>
Restated Articles of Incorporation
ARTICLES OF INCORPORATION
(PREPARE IN TRIPLICATE)
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE - CORPORATE BUREAU
308 NORTH OFFICE BUILDING, HARRISBURG, PA 17120
PLEASE INDICATED (CHECK ONE) TYPE CORPORATION:
/X/ DOMESTIC BUSINESS CORPORATION
/ / DOMESTIC BUSINESS CORPORATION A CLOSE CORPORATION COMPLETE BACK
/ / DOMESTIC PROFESSIONAL CORPORATION ENTER BOARD LICENSE NO.
FEE
$75.00
010 NAME OF CORPORATION (MUST CONTAIN A CORPORATE INDICATOR UNLESS
EXEMPT UNDER 15 P.S. 2908 B)
BUCK HILL FALLS COMPANY
011 ADDRESS OF REGISTERED OFFICE IN PENNSYLVANIA (P.O. BOX NUMBER NOT
ACCEPTABLE)
Post Office Box D-2
012 CITY 033 COUNTY 013 STATE 064 ZIP CODE
Buck Hill Falls Monroe PA 18323
050 EXPLAIN THE PURPOSE OR PURPOSES OF THE CORPORATION
"To engage in and do any lawful act concerning any or all lawful
business for which corporations may be incorporated under the
Pennsylvania Business Corporation Law of 1933, as amended and
supplemented, and to do all things and exercise all powers, rights
and privileges which a business corporation may now or hereafter be
organized or authorized to do or to exercise under the said
Business Corporation Law of Pennsylvania, as amended and
supplemented."
(ATTACH 8 1/2 x 11 SHEET IF NECESSARY)
The Aggregate Number of Shares, Classes of Shares and Par Value of Shares
which the Corporation Shall have Authority to Issue:
040 Number and Class of Shares 105,000
041 Stated Par Value Per Share if Any NONE
042 Total Authorized Capital
031 Term of Existence Perpetual
The Name and Address of Each Incorporator, and the Number and Class of
Shares Subscribed to by each Incorporator
060 Name <PAGE>
<PAGE>
061, 062
063, 064 Address (Street, City, State, Zip Code) Number & Class of Shares
(ATTACHED 8 1/2 x 11 SHEET IS NECESSARY)
IN TESTIMONY WHEREOF, THE INCORPORATOR(S) HAS (HAVE) SIGNED AND SEALED THE
ARTICLES OF INCORPORATION THIS 21st DAY OF December 1985.
/s/ Doris M. Urice /s/ Karl Weiler
- ----------------------------------- --------------------------------
Doris M. Urice, Assistant Secretary Karl Weiler, President
- ----------------------------------- --------------------------------
-FOR OFFICE USE ONLY-
030 FILED
December 26, 1985
002 CODE
REVIEWED BY
DATE APPROVED
DATE REJECTED
MAILED BY DATE
003 REV BOX
004 SICC
CERTIFY TO
/ / REV.
/ / L&I
/ / OTHER
SEQUENTIAL NO.
AMOUNT
$<PAGE>
<PAGE>
INPUT BY
VERIFIED BY
100 MICROFILM NUMBER
86031987
001 CORPORATION NUMBER
LOG IN LOG IN (REFILE)
LOG OUT LOG OUT (REFILED)
SECRETARY OF COMMONWEALTH
DEPARTMENT OF STATE
COMMONWEALTH OF PENNSYLVANIA
<PAGE>
<PAGE>
Microfilm Number
----------------------------
Filed with the Department of State on July 30, 1996
Entity Number
------------------------------
- ----------------------------------------------
Secretary of the Commonwealth
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB:15-1915 (Rev 89)
In compliance with the requirements of 15 Pa.C.S. Section 1915
(relating to articles of amendment), the undersigned business corporation,
desiring to amend its Articles, hereby states that:
1. The NAME of the corporation is: BUCK HILL FALLS COMPANY
-------------------------------------
2. The (a) ADDRESS of this corporation's current registered office in
this Commonwealth or (b) commercial registered office provider and the
county of venue is (the Department is hereby authorized to correct the
following address to conform to the records of the Department):
(a) PO BOX D-2 BUCK HILL FALLS, PA 18323 MONROE
---------------------------------------------------------------------
Number and Street City State Zip County
(b)
----------------------------------------------------------------------
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office
provider, the county in (b) shall be deemed the county in which the
corporation is located for venue and official publication purposes.
3. The STATUTE by or under which it was incorporated is:
PENNSYLVANIA BUSINESS CORPORATION LAW
----------------------------------------------------------------------
4. The original DATE of its incorporation is: DECEMBER 30, 1900
----------------------------
5. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
X The amendment shall be effective upon filing these Articles
----
of Amendment in the Department of State.
The amendment shall be effective on:
---- --------------------<PAGE>
<PAGE>
DSCB:15-1915 (Rev 89)-2
6. (CHECK ONE OF THE FOLLOWING):
X The amendment was adopted by the shareholders pursuant to
----
15 Pa.C.S. section 1914(a) and (b).
The amendment was adopted by the board of directors pursuant
----
to 15 Pa.C.S. section 1914 (c).
7. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
The amendment adopted by the corporation, set forth in full,
----
is as follows:
X The amendment adopted by the corporation as set forth in
----
full in Exhibit A, attached hereto and made a part hereof.
8. (CHECK IF THE AMENDMENT RESTATES THE ARTICLES):
The restated Articles of Incorporation supersede the original
----
Articles and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer thereof
this 19th day of July , 1996.
------ --------
BUCK HILL FALLS COMPANY
----------------------------------------
(Name of Corporation)
BY: /s/ David B. Ottaway
---------------------------------------
David B. Ottaway, President
<PAGE>
<PAGE>
EXHIBIT A
Attached to Articles of Amendment
of
BUCK HILL FALLS COMPANY
RESOLVED, that the Articles of Incorporation of this Corporation be
amended by changing the statement of the aggregate number of shares,
classes of shares and par value of shares which the Corporation shall
have the authority to issue so as to read in its entirety as follows:
"The aggregate number of shares, classes of shares and
par value of shares which the Corporation shall have
the authority to issue is:
(a) 105,000 shares of Common Stock, having no par
Value; and
(b) 100,000 shares of Class A Common Stock having
no par value.
The shares of Common Stock and the shares of Class A
Common Stock shall each have one vote per share and
shall be equal in all other respects except that the
shares of Class A Common Stock may only be issued to,
transferred to or held by any person, company or other
entity that is an owner or co-owner of a cottage and/or
lot in the Buck Hill Falls Community (a "Qualified Owner");
provided, however, that (i) this Corporation and The Buck
Hill Conservation Foundation may acquire and hold shares
of Class A Common Stock; (ii) a holder of Class A Common
Stock may transfer shares of Class A Common Stock other
than to a Qualified Owner if the transferee and the terms
of the transfer are disclosed to, and approved by, the
Board of Directors of this Corporation and, upon
recommendation of the Board of Directors, approved by the
affirmative vote of the holders of a majority of the
outstanding shares of Class A Common Stock other than
those proposed to be transferred; and (iii) a transferee
of Class A Common Stock pursuant to the approvals required
by clause (ii) above may hold the Class A Common Stock but
may not transfer them, willfully, by operation of law or
otherwise, except as permitted by these Articles."
EXHIBIT 3.1
<PAGE>
BUCK HILL FALLS COMPANY
BY LAWS OF BUCK HILL FALLS COMPANY
----------------------------------
ARTICLE 1 - CORPORATION OFFICE
- ---------
SECTION 1.1 The name of the Corporation as filed in the Charter
is Buck Hill Falls Company, incorporated under the Laws of the
Commonwealth of Pennsylvania on December 31, 1900.
SECTION 1.2 The Corporation shall maintain its principal office
in Buck Hill Falls, Monroe County, Pennsylvania.
SECTION 1.3 The Corporation may also have offices at such other
places as the Board of Directors may from time to time designate of the
business of the Corporation may require.
ARTICLE 2 - SHAREHOLDERS MEETINGS
- ---------
SECTION 2.1 All meetings of the shareholders shall be held at
such time and place as may be fixed from time to time by the Board of
Directors.
SECTION 2.2 The annual meeting of the shareholders shall be
held on such date and at such time as shall be determined by the Board of
Directors, when they shall elect a Board of Directors and transact such
other business as may properly be brought before the meeting.
SECTION 2.3 Special meetings of the shareholders may be called
at any time by the president, a majority of the Board of Directors or by
shareholders entitled to cast at least one-fifth of the votes that all
shareholders are entitled to cast at the particular meeting. If such
request is addressed to the Secretary, it shall be signed by the persons
making the same and shall state the purpose or purposes of the proposed
meeting. Upon receipt of any such request, it shall be the duty of the
Secretary to call a special meeting of the shareholders to be held at a
time, not less than ten nor more than sixty days thereafter, as the
Secretary may fix. If the Secretary shall neglect or refuse to issue such
call within five days from the receipt of such request, the person or
persons making the request may issue the call.
SECTION 2.4 Written notice of all meetings other than adjourned
meetings of shareholders, stating the place, date and hour, and, in case
of special meetings of shareholders, the purpose thereof, shall be served
upon, or mailed, postage prepaid, or telegraphed, charges prepaid, at
least five days before such meeting, unless a greater period of notice is
required by statute or by these By-Laws, to each shareholder entitled to
vote thereat at such address as appears on the stock transfer books of the
Corporation.
<PAGE>
<PAGE>
ARTICLE 3 - QUORUM Of SHAREHOLDERS
- ---------
Section 3.1 The presence, in person or by proxy of shareholders
entitled to cast at least a majority of the votes that all shareholders
are entitled to cast on the particular matter shall constitute a quorum
for purposes of considering such matter, and unless otherwise provided by
statute, the acts of such shareholders at a duly organized meeting shall
be the acts of the shareholders. If, however, any meeting of shareholders
cannot be organized because of lack of a quorum, those present in person
or by proxy shall have the power, except as otherwise provided by statute,
to adjourn the meeting to such time and place as they may determine,
provided that if the meetings adjourned beyond midnight of the date of the
scheduled meeting, then 48 hours notice of such reconvened meeting shall
be given to the shareholders by public notice in a newspaper of general
circulation in the area, until the requisite number of shareholders for a
quorum shall be present in person or by proxy and those attending the
second of such adjourned meetings, although less than a quorum, shall
nevertheless constitute a quorum for the purpose of electing directors.
At any adjourned meeting at which a quorum shall be present or so
represented, any business may be transacted that might have been
transacted at the original meeting if a quorum had been present. The
shareholders present in person or by proxy at a duly organized meeting may
continue to do business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
ARTICLE 4 - VOTING RIGHTS
- ---------
SECTION 4.2 Except as may be otherwise provided by law or by
the Articles of Incorporation, at every shareholders meeting, every
shareholder entitled to vote thereat shall have the right to one vote for
every share having voting power standing in his name on the books of the
Corporation on the record date fixed for the meeting. Each shareholder
shall be entitled to cumulate his vote for election of Directors. No
share shall be voted at any meeting if any installment is due and unpaid
thereon.
SECTION 4.2 When a quorum is present at any meeting, the voice
vote of the holders of a majority of the stock having voting power,
present in person or by proxy shall decide any question brought before
such meeting except as otherwise provided by law or by the Articles of
Incorporation, and by Section 4.3.
SECTION 4.3 Upon demand made before the voting begins by a
shareholder entitled to vote on any matter coming before the Shareholders,
the voting shall be by written ballot.
ARTICLE 5 - PROXIES
- ---------
SECTION 5.1 Every Shareholder entitled to vote at a meeting of
Shareholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act
for him by proxy. Every Proxy shall be executed in writing by the
shareholder or his duly authorized attorney in fact and filed with the
Secretary of the Corporation. A proxy, unless coupled with an interest,
2<PAGE>
<PAGE>
shall be revocable at will, notwithstanding any other agreement or any
provision in the proxy to the contrary, but the revocation of a proxy
shall not be effective until notice thereof has been given to the
Secretary of the Corporation. No unrevoked proxy shall be valid after
eleven months from the date of its execution, unless a longer time is
expressly provided therein, but in no event shall a proxy, unless coupled
with an interest, be voted after three years from the date of its
execution. A proxy shall not be revoked by the death or incapacity of the
maker, unless before the vote is counted or the authority is exercised,
written notice of such death or incapacity is given to the Secretary of
the Corporation.
ARTICLE 6 - RECORD DATE
- ---------
SECTION 6.1 The Board of Directors may fix a time, not more
than fifty days prior to the date of any meeting of shareholders, as a
record date for the determination of the shareholders entitled to notice,
of, and to vote at, any such meeting. In such case, only such
shareholders as shall be shareholders of record on the date so fixed shall
be entitled to notice of, or to vote at, such meeting. If no record date
is fixed by the Board of Directors for the determination of shareholders
entitled to receive notice of, and vote at, a shareholders meeting,
tranferees of shares that are transferred on the books of the Corporation
within ten days next preceding the date of such meeting shall not be
entitled to notice of or to vote at such meeting.
ARTICLE 7 - VOTING LISTS
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SECTION 7.1 The officer or agent having charge of the Stock
transfer books of the Corporation Shall make, at least five days before
each meeting of shareholders, a complete alphabetical list of the
shareholders entitled to vote at the meeting, with their addresses and the
number of shares held by each, which list shad be kept on file at the
registered office or principal place of business of the Corporation and
shall be subject to inspection by any shareholder at any time during usual
business hours. Such list shall be produced at and kept open for
inspection by any shareholder during the entire meeting. The original
stock transfer books for shares of the Corporation, or a duplicate thereof
kept in this Commonwealth, shall be prima facie evidence as to who are the
shareholders entitled to exercise the rights of a shareholder.
ARTICLE 8 - JUDGES OF ELECTION
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SECTION 8.1 In advance of any meeting of shareholders, the
Board of Directors shall appoint three judges of election, who need not be
shareholders, to act at such meeting and any adjournment thereof. No
person who is a candidate for office shall act as a judge. The decision,
act or certificate of a majority of the judges shall be the decision, act
or certificate of all.
ARTICLE 9 - DIRECTORS
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SECTION 9.1 The number of members of the Board of Directors
shall be nine, or such other number as may be determine from time to time
3<PAGE>
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by the Board of Directors, but shall in no even be less than five or more
than twelve. Each Director shall be a natural person of full age who need
not be a resident of Pennsylvania or a shareholder of the Corporation.
SECTION 9.2 The Directors shall be classified in respect of the
time for which they shall severally hold office as follows:
(i) Each class shall be as nearly equal as possible;
subject to the foregoing, the number of Directors in each class shall be
determined from time to time by the Board of Directors.
(ii) The term of office of at least one class shall
expire at the annual meeting of shareholders in each year.
(iii) The members of each class shall be elected for a
term expiring at the annual meeting of shareholders in the third calendar
year following the year of their election (such term is hereinafter
referred to in this Article 9 as a "Three Year Term"); provided, that at
the Annual Meeting of Shareholders to be held in 1992, one director shall
be elected to the class of Directors whose term expires at the Annual
Meeting of Shareholders to be held in 1994.
SECTION 9.3 The Board of Directors may declare vacant the
office of a Director who has been judicially declared or unsound mind or
who has been convicted of an offense punishable by imprisonment for a term
of more than one year or if, within 30 days after notice of his selection,
he does not accept the office either in writing or by attending a meeting
of the board of Directors.
SECTION 9.4 A Director who has served on the Board of Directors
for two full consecutive Three Year Terms may not again stand for election
until the Annual Meeting of Shareholders occurring in the first year
following the year in which such second consecutive term ended; provided,
that a Director who has served for two full consecutive Three Year Terms
ending at the Annual Meeting of Shareholders in 1992 may be elected at the
Annual Meeting of Shareholders in 1992 for the term expiring at the Annual
Meeting of Shareholders to be held in 1994, in which case, for the
purposes of this Section 9.4, such Director will be deemed to have
completed two full consecutive Three Year Terms at the completion of his
term expiring at the Annual Meeting of Shareholders in 1994.
SECTION 9.5 The Board of Directors shall approve a slate of
nominees for the class of Directors whose terms expire at the annual
meeting of shareholders. A copy of this slate together with a resume and
statement of purpose for each candidate shall accompany the notice of the
annual meeting of shareholders. Additional nominations may be made at the
annual meeting by any shareholder entitled to vote provided that notice of
such intent together with resume and statement of purpose from the
proposed nominee shall be delivered to the Secretary of the Company no
later than 21 days prior to the annual meeting. It shall be the duty of
4<PAGE>
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the Secretary to send this information in writing to all shareholders of
record no later than 14 days prior to the annual meeting. Failure of the
Secretary to perform such duty shall not prejudice the shareholder right
of nomination.
ARTICLE 10 - VACANCIES ON THE BOARD OF DIRECTORS
- ----------
SECTION 10.1 Each Director shall hold office until the
expiration of the term for which he was selected and until his successor
has been selected and qualified, or until his earlier death, resignation
or removal. Any vacancies on the Board of Directors, including vacancies
resulting from an increase in the number of Directors, may be filled by a
majority vote of the remaining members of the Board of Directors (though
less than a quorum) or by a sole remaining Director, and each person so
selected shall be a Director to serve for the balance of the unexpired
term.
ARTICLE 11 - POWERS OF BOARD OF DIRECTORS
- ----------
SECTION 11.1 The business and affairs of the Corporation shall
be managed by its Board of Directors, which may exercise all such powers
of the Corporation and do all such lawful acts and things as are not by
law or by the Articles of Incorporation or by these By-Laws directed or
required to be exercised and done by the shareholders.
SECTION 11.2 The Board of Directors shall have the power and
authority to appoint an Executive Committee and such other committees as
may be deemed necessary by the Board of Directors for efficient operation
of, the Corporation. The Executive Committee shall consist of the
President, and not less than two other directors. The Executive Committee
shall meet at such time as may be fixed by the Board of Directors, or upon
call of the President. A majority of members of the Executive Committee
shall constitute a quorum. The Executive Committee shall have and
exercise the authority of the Board of Directors as may be delegated to it
by the Board.
ARTICLE 12 - MEETINGS OF THE BOARD OF DIRECTORS
- ----------
SECTION 12.1 An organization meeting may be held immediately
following the annual shareholders meeting without the necessity of notice
to the directors to constitute a legally convened meeting, or the
directors may meet at such time and place as may be fixed by either a
notice or waiver of notice or consent signed by all such directors.
SECTION 12.2 Regular meetings of the Board of Directors shall be
held on such dates and at such times as shall be determined by the Board
of Directors. One or more directors may participate in any meeting of the
Board of Directors, or of any committee thereof, by means of a conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear one another.
SECTION 12.3 Special meetings of the Board of Directors may be
called by the President on one day's notice to each director, either
5<PAGE>
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personally or by mail, telegram or telephone. Special meetings shall be
called by the President in like manner and one like notice upon the
written request of three directors.
SECTION 12.4 At all meetings of the Board of Directors, a
majority of the directors shall constitute a quorum for the transaction of
business, and the acts of a majority of the directors present at a meeting
in person or by conference telephone or similar communications equipment
by means of which all persons at the meeting can hear one another, at
which a quorum is present in person or by such authorized communications
equipment shall be the acts of the Board of Directors, except as may be
otherwise specifically provided by law by the Articles of Incorporation or
by these By-Laws. If a quorum is not present in person or by
communications equipment at any meeting of the directors, the directors
present may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum is present or as
permitted herein.
ARTICLE 13 - INFORMAL ACTION BY THE BOARD OF DIRECTORS
- ----------
SECTION 13.1 If all the directors shall severally or
collectively consent in writing, including by not limited to telegrams and
radiograms, to any action to be taken by the Corporation, such action
shall be as valid a corporate action as though it had been authorized at a
meeting of the Board of Directions.
ARTICLE 14 - COMPENSATION OF DIRECTORS
- ----------
SECTION 14.1 Directors, as such, may received a stated fee for
their services, or a fixed sum and expenses for attendance at regular and
special meetings, or any combination of the foregoing as may be determined
from time to time by resolution of the Board of Directors and nothing
contained herein shall be construed to preclude any director from serving
the Corporation in any other capacity and receiving compensation thereof.
ARTICLE 15 - OFFICERS
- ----------
SECTION 15.1 The Officers of the Corporation shall be elected by
the Board of Directors at its organization meeting and shall consist of a
President, a Vice-President, a Secretary, and a Treasurer. The Board of
Directors may also elect one or more Vice Presidents and such other
officers and appoint such agents as it shall deem necessary. Each Officer
shall hold office for such term, shall have such authority and shall
perform such duties as may from time to time be prescribed by the Board of
Directors and in these By-Laws. Any two or more offices may be held by
the same person.
SECTION 15.2 The compensation of all officers of the Corporation
shall be approved by the Board of Directors.
SECTION 15.3 The Board of Directors may remove any officer or
agent elected or appointed, at any time and within the period, if any, for
6<PAGE>
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which such person was elected or employed, whenever in the Board's
judgment it is in the best interests of the Corporation, and all persons
shall be elected and employed subject to the provisions hereof. If the
office of any officer becomes vacant for any reason, the vacancy shall be
filled by the Board of Directors.
ARTICLE 16 - THE PRESIDENT
- ----------
SECTION 16.1 The President shall be the chief executive officer
of the Corporation; shall have general and active management of the
business of the Corporation; shall see that all orders and resolutions of
the Board are put into effect, subject, however, to the right of the Board
of Directors to delegate any specific powers, except such as may be by
statute exclusively conferred on the President, to any other officer or
officers of the Corporation; and shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the Corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or agent of the
Corporation.
ARTICLE 17 - THE VICE PRESIDENT
- ----------
SECTION 17.1 The Vice President or, if more than one, the Vice
Presidents in the order established by the Board of Directors shall, in
the absence or incapacity of the President, exercise all the powers and
perform the duties of the President. The Vice Presidents, respectively,
shall also have such other authority and perform such other duties as may
be provided in these By-Laws, or as shall be determined by resolution of
the Board of Directors. Any Vice President may, in the discretion of the
Board of Directors, be designated as "executive," "senior," or by any
succeeding ordinal number or by departmental or functional classification.
ARTICLE l8 - THE SECRETARY
- ----------
SECTION 18.1 The Secretary shall attend all meetings of the
Board of Directors and of the shareholders and shall keep accurate records
thereof in one or more minutes books kept for that purpose; shall give, or
cause to be given, the required notice of all meetings of the
shareholders, of the Board of Directors and of special meetings of the
Executive Committee; shall keep in safe custody the corporate seal of the
Corporation and affix the same to any instrument, requiring it, and when
so fixed, it shall be attested by the Secretary's signature or the
signature of the Treasurer or an Assistant Secretary or Assistant
Treasurer. The Secretary shall oversee, in conjunction with an transfer
agent appointed by the Board of Directors, the stock certificate books and
stock ledgers of the Corporation, in which shall be recorded all stock
issues, transfers, the dates of same the names and addresses of all
shareholders and the number of shares held by each; shall, when necessary,
prepare new certificates upon the transfer of shares and surrender of the
old certificates; shall cancel such surrendered certificates; and shall
perform such other duties as may be assigned to him by the Board of
Directors.
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ARTICLE 19 - THE TREASURER
- ----------
SECTION 19.1 The Treasurer shall have the custody of the
corporate funds and securities; shall keep or cause to be kept full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation. The Treasurer, or such other Officer or Employee of the
Corporation as the Board of Directors may designated, shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as shall be designated by the Board of
Directors; shall disburse the funds of the Corporation as may be ordered
by the Board of Directors, taking proper vouchers for such disbursements;
shall render to the Board of Directors, at the regular meetings of the
Board of Directors, or whenever they may require it, an account of all
transactions and of the financial condition of the Corporation; and shall
have the right to affix the corporate seal to any instrument requiring it,
and to attest to the same by his signature; and if so required by the
Board of Directors, he shall give bond in such sum and with such surety as
the Board of Directors may from time to time direct.
ARTICLE 20 - ASSISTANT OFFICERS
- ----------
SECTION 20.1 Each assistant officer shall assist in the
performance of the duties of the officer to whom he is assistant and shall
perform such duties in the absence of the officer. He, shall perform such
additional duties as the Board of Directors, the President, or the officer
to whom he is assistant, may from time to time assign him.
ARTICLE 21 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ----------
SECTION 21.1 The Corporation is authorized to indemnify and
director, officer, or employee, or any former director, officer, or
employee, who was or is a party to, or is threatened to be made a party
to, or who is called as a witness in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right
of the Corporation) by reason of the fact that such person is or was a
director or officer, or employee of the Corporation as is or was serving
at the request of the Corporation or a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the
best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that the person did
not act in good faith and in a manner that he reasonably believes to be
in, or not opposed to, the best interest of the Corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
SECTION 21.2 The Corporation is authorized to indemnify any
director, officer, or employee who was or is a party to, or is threatened
8<PAGE>
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to be made a party to, or who is called as a witness in connection with
any threatened, pending or completed action or suit by or in the right of
the Corporation to procure a judgment in its favor by reason of the fact
that such person is or was a director, officer, or employee of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer or agent of another corporation, partnership, joint
venture, trust or other enterprise, against amounts paid in settlement and
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of, or serving as a
witness in, such action of suit if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and except that no indemnification shall be made in
respect of any such claim, issue or matter as to which such person shall
have been adjudged to be liable for misconduct in the performance of his
duty to the Corporation.
SECTION 21.3 Except as may be otherwise ordered by a court,
there shall be a presumption that any director or officer is entitled to
indemnification as provided in Section 21.1 and 21.2, of these By-Laws
unless either a majority of the directors who are not involved in such
proceedings ("disinterested directors") or, if there are less than three
disinterested directors, the holders of one-third of the outstanding
shares of the Corporation determine that the person is not entitled to
such presumption by certifying such determination in writing to the
Secretary of the Corporation. In such event the disinterested director(s)
or, in the event of certification by shareholders, the Secretary of the
Corporation, shall request of independent counsel, who may be the outside
general counsel of the Corporation, a written opinion as to whether or not
the parties involved are entitled to indemnification under Section 21.1
and 21.2 of these By-Laws.
SECTION 21.4 Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized in
the manner provided under Section 2.3 of these By-Laws upon receipt of an
undertaking by or on behalf of the director or officer to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation as authorized in this Article 2. Nothing
contained herein shall require the corporation to pay any expenses
incurred in defending any civil or criminal suit or any judgments or fines
levied or settlements reached as a result of such suit prior to a
determination by the Board of Directors or Shareholders pursuant to
Section 2.3 that such directors or officers are entitled to
indemnification hereunder.
SECTION 21.5 The indemnification provided by this Article 2
shall not be deemed exclusive of any other rights to which a person
seeking indemnification may be entitled under any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action
in his official capacity while serving as a director, officer and/or
employee, and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer
and/or employee and shall inure to the benefit of the heirs and persona1
representatives of such a person.
9<PAGE>
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ARTICLE 22 - CERTIFICATE OF SHARES
- ----------
SECTION 22.1 The share certificates of the corporation shal1 be
numbered and registered in a share register as they are issued; shall bear
the name of the registered holder, the number and class of shares
represented thereby, the par value of each share or a statement that such
shares are without par value, as the case maybe; shall be signed by the
President or a Vice President, and the Secretary or the Treasurer, or any
other person properly authorized by the Board of Directors and shall bear
the corporate seal, which seal may be a facsimile engraved or printed.
Where the certificate is signed by a transfer agent or a registrar, the
signature of any corporate officer on such certificate may be a facsimile
engraved or printed. In case any officer who has signed, or whose
facsimile signature has been placed upon, any share certificate shall have
ceased to be such officer because of death, resignation or otherwise,
before the certificate is issued, it may be issued by the Corporation with
the same effect as if the officer had not ceased to be such at the date of
its issue.
ARTICLE 23 - TRANSFER OF SHARES
- ----------
SECTION 23.1 Upon surrender to the Corporation of a share
certificate duly endorsed by the person named in the certificate or by
attorney duly appointed in writing and accompanied where necessary by
proper evidence of succession, assignment or authority to transfer, a new
certificate shall be issued to the person entitled thereto and the old
certificate cancelled and the transfer recorded upon the share register of
the Corporation.
ARTICLE 24 - LOST CERTIFICATES
- ----------
SECTION 24.1 Where a shareholder of the Corporation alleges the
loss, theft or destruction of one or more certificates for shares of the
Corporation and requests the issuance of a substitute certificate
therefor, the Board of Directors, or designee, may direct a new
certificate of the same tenor and for the same number of shares to be
issued to such person upon such person's making of an affidavit in form
satisfactory to the Board of Directors setting forth the facts in
connection therewith, provided that prior to the receipt of such request
the Corporation shall not have either registered a transfer of such
certificate or received notice that such certificate has been acquired by
a bona fide purchaser. When authorizing such issue of a new certificate
the Board of Directors may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his heirs or legal representatives, as the case
may be, to advise the same in such manner as it shall require and/or to
give the Corporation a bond in such form and sum and with surety or
sureties, with fixed or open penalty, as shall be satisfactory to the
Board of Directors, as indemnity for any liability or expense that it may
incur by reason of the original certificate remaining outstanding.
ARTICLE 25 - DIVIDENDS
- ----------
SECTION 25.1 The Board of Directors may, from time to time, at
any duly convened regular or special meeting or by unanimous consent in
10<PAGE>
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writing, declare and pay dividends upon the outstanding shares of capital
stock of this corporation in cash, property or shares of this Corporation,
as long as any dividend shall not be in violation of law, other agreement,
or the Articles of Incorporation.
SECTION 25.2 Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum
or sums as the Board of Directors from time to time, in their absolute
discretion, deem proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purposes as the Board of Directors shall
believe to be for the best interests of the Corporation, and the Board of
Directors may reduce of abolish any such reserve in the manner in which it
was created.
ARTICLE 26 - FINANCIAL REPORT TO SHAREHOLDERS
- ----------
SECTION 26.1 The President and the Board of Directors shall
present at each annual meeting of the shareholders a full and complete
statement of the business and affairs of the Corporation for the preceding
year.
ARTICLE 27 - CHECKS AND NOTES
- ----------
SECTION 27.1 All checks or demands for money and notes of the
Corporation shall be signed by such officer of officers, or such other
person or persons, as the Board of Directors may from time to time
designate.
ARTICLE 28 - FISCAL YEAR
- ----------
SECTION 28.1 The fiscal year of the corporation shall end on
October 31 of each year.
ARTICLE 29 - SEAL
- ----------
SECTION 29.1 The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the words
"Corporate Seal of Pennsylvania." Said seal may be used by causing it or
a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE 3O - NOTICES AND WAIVERS THEREOF
- ----------
SECTION 30.1 Whenever, under the provisions of law or of the
Articles of Incorporation or of these By-Laws, written notice is required
to be given to any person, it may be given to such person either
personally or by sending a copy thereof through the mail or by telegram,
charges prepaid, to his address appearing on the books of the Corporation
or supplied by him to the Corporation for the purpose of notice. If the
notice is sent by mail or telegraph, it shall be deemed to have been given
to the person entitled thereto when deposited in the United States mail or
with a telegraph office for transmission to such person. Such notice
11<PAGE>
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shall specify the place, day and hour of the meeting and, in the case of a
special meeting of shareholders, the general nature of the business to be
transacted.
SECTION 30.2 Any written notice required to be given to any
person may be waived in writing signed by the person entitled to such
notice whether before or after the time stated there. Attendance of any
person entitled to notice, whether in person or by proxy, at any meeting
shall constitute a waiver of notice of such meeting, except where any
person attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting was not lawfully called or
convened. Where written notice is required of any meeting, the waiver
thereof must specify the purpose only if it is for a special meeting of
the shareholders.
ARTICLE 31 - AMENDMENTS
- ----------
SECTION 31.1 The authority to make, alter, amend, or repeal the
By-Laws of the Corporation is vested in the Board of Directors of the
Corporation, subject always to the power of the shareholders to make,
alter, amend or repeal the By-Laws of the Corporation by the affirmative
vote of holders of a majority of the shares of the Corporation's common
stock issued, outstanding and entitled to vote.
ARTICLE 32 - LIMITATION OF SALE OF REAL ESTATE
- ----------
Section 32.1 The Corporation shall not sell, convey, transfer
or otherwise dispose of all or any portion of either its real estate or
its utility assets, or subdivide all or any portion of its real estate,
without the prior consent of the holders of a majority of the stock having
voting power, present in person or by proxy, at a valid meeting of the
shareholders such meeting to be held at a time not less than forty-five
days nor more than sixty days after the call of the Secretary.
Notwithstanding. the above, the requirements for shareholder
approval set forth in this Article shall not be applicable to the
following transactions, which occur in the ordinary course of the
Corporation's business:
1. The granting of routine utility easements related to the
delivery of utility services to the Corporation or to lot owners in the
Buck Hill settlement.
2. The encumbering or mortgaging of the Corporation's real
estate or utility assets as security for loans to the Corporation made
after the effective date of this Article, providing the amount of any such
loan or loans in the aggregate does not exceed $500,000.
3. The dedication of public roads, causeways or other means of
ingress or egress.
4. The sale, conveyance, transfer or other disposal of
individual home building lots of three (3) acres or less held by the
Corporation for sale in the ordinary course of its business.
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5. The sale, conveyance, transfer or other disposal of de
minimus parcels of land to lot owners for the -purposes of the expansion
of a lot, improvement of ingress or egress or utility services to a lot
compliance with land use regulations or' other similar purposes.
Section 32.2 Notwithstanding any provision of these By-Laws to
the contrary, including without limitation Article 31, this Article 32
shall not be altered, amended or repealed without the consent of the
holders of a majority of the stock having voting power, present in person
or by proxy, at a valid meeting of the shareholders to be held at a time
not less than forty-five or more than sixty days after the call of the
Secretary.
13
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Agreement
Between
Buck Hill Falls Company (the "Company")
and
Lot and Cottage Owners' Association of Buck Hill Falls, Inc.
("The Association")
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The Company is a public corporation engaged in, among other
things, the provision of a variety of services for the benefit of the
Residents (which shall include homeowners, renters and lot owners) of Buck
Hill Falls, Pennsylvania. The Company's services include (a) providing
maintenance and operation of recreational facilities and common areas, (b)
providing various water and sewage services, (c) providing miscellaneous
maintenance services, and (d) providing maintenance of substantial
undeveloped land for community protection and use. In addition, the
Company makes available certain recreational facilities to the general
public.
The Association is a voluntary organization incorporated under the
Non-Profit Corporation Law of the Commonwealth of Pennsylvania to (a)
perpetuate the character, spirit and traditions of the Buck Hill Falls
Community and (b) represent the interests of owners of residential
dwellings, cottages and lots in the Buck Hill Falls Community in dealing
with the Company.
The Association recognizes that the Company manages and
administers each year the Buck Hill Falls Community and expends monies to
provide a broad array of services to Residents. Such services include but
are not limited to providing general administration, road maintenance,
trash collection, security, maintenance for common areas such as the
Community Flower Garden, bowling greens, Glenn and Falls, Jenkins Woods,
Metzgar's Farm and such additional facilities as may be determined from
time to time to benefit the entire Buck Hill Falls Community. These above
mentioned services are hereafter defined as "Community Services" to
distinguish them from other services such as recreational facilities,
water and sewer services, individual property inspections, and other
services, all of which are billed to individual customers based on usage.
The Association recognizes the obligation of Residents to pay the
Company for the Community Services rendered for their benefit.
Notwithstanding the variety of deed covenants, all owners of residential
units, cottages and lots benefiting from Community Services have a duty to
pay their share of the costs. The annual amount to be paid by Residents
is hereafter defined as "Dues".
Notwithstanding the rights of the Company under the various deed
covenants, the Company agrees to seek the advice and support of the
Association in setting the level of annual Dues as hereafter provided.
The company agrees to exercise its best efforts to publish its proposed
annual Dues no later than 30 days prior to the commencement of its annual
fiscal year.
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The Dues each year will be proposed and recommended to the Board
of Directors of the Company by a sub-committee of the Company's Finance
Committee (hereafter "Joint Committee") consisting of two members
nominated by the Chairman of the Company, two members nominated by the
President of the Association, and a fifth member chosen by mutual
agreement of the Company Chairman and Association President.
The Dues will be determined on the basis of the expense allocation
formula worked out by the Company and the Association and attached as an
appendix to this agreement. It is recognized that the Dues should not
simply cover the reimbursement of expenses but should provide some
reasonable margin of profit to the Company.
The recommendations of the Joint Committee will be submitted to
the Company's Board of Directors for final consideration. Should the Board
of Directors not accept the recommendation of the Joint Committee as to
the level of assessment, the Board agrees to meet and confer with the
Joint Committee in an effort to establish an agreed upon level of Dues,
prior to adoption of a level of Dues other than that recommended. The
Association will follow its own procedures in presenting the proposal to
its members for consideration.
It is the goal of goal of both the Company and the Association to
reach consensus every year concerning the Dues and otherwise promote
consensus as to matters of general community interest. For this purpose,
the President of the Association, or his/her nominee, is invited to
participate as an observer in all meetings of the Company's Board of
Directors and the Chairman of the Company is invited to attend, or send a
representative to, all Association meetings in a similar capacity.
The Company and the Association recognize the need for the Company
to periodically raise capital for projects that benefit the community, and
for other corporate purposes. In years when the Company needs to raise
capital it will follow the same process of seeking the advice and support
of the Association's members.
Special Assessments that relate to capital expenditures incurred
to provide Community Services will be consolidated with annual Dues.
Capital to repay debt, acquire real property, purchase Company
stock, and develop land will only be considered for Special Assessment if
the Company grants property owners an option to purchase common stock, or
a new class of stock, in consideration for payment of the Special
Assessment.
In recognition of this agreement, the Company and the Association
agree to undertake the following: (l) the Company agrees to dismiss
pending litigation against those Association members who have 'failed to
pay in full the 1994-1995 Dues of $2400 and further agrees to waive
payment of late charges and interest for non-payment thereof, provided
that payment is made in full within thirty days of notice of this
agreement; (2) the Association agrees to dismiss, without prejudice, the
declaratory judgment action filed by it in the Court of Common Pleas of
Monroe County to docket number 1902 Civil 1995 as against the Company, and
shall dismiss with prejudice the aforesaid action as against the
2<PAGE>
<PAGE>
individual defendants named therein; and (3) the Association shall
exercise its best efforts to cause the individual plaintiffs named in the
aforesaid action to concur in dismissal of the aforesaid action without
prejudice as to Company and with prejudice as to the individual defendants
named therein; (4) the Association agrees to call upon its members and to
encourage its members to pay in full the 1994-1995 dues assessments.
The parties acknowledge that dues would be determined on the basis
of an expense formula as herein provided and is attached subsequently to
this Agreement as an appendix. Parties further agree that as it pertains
to the dues formula, this Agreement will not be deemed in effect and
implementable until the following conditions are satisfied:
1. The Company and Association agree to an expense allocation
formula and sign the appropriate appendix referred to on Page three of the
Agreement not later than May 1, 1996. This date may be extended' upon
mutual agreement (and in fact has been extended, and the expense
allocation formula agreed upon is as attached hereto).
2. The Agreement and Appendix are approved by the respective
Boards of the Company and Association not later than June 1, 1996.
3. The Association's by-law are amended not later than July l,
1996 to permit the implementation of the terms and conditions of the
Agreement and Appendix.
4. All other provisions of this Agreement apply as of the date
of signing.
The Company and the Association acknowledge that in the event of
litigation in connection with any issue addressed by this agreement,
neither this settlement agreement nor any term of this settlement
agreement shall be submitted as evidence on any issue in any proceeding.
The Association and the Company acknowledge that this agreement
constitutes an offer and acceptance of settlement which is not admissible
in evidence in any proceeding. Further, in consideration of the dismissal
with prejudice of individual defendants named in the declaratory judgment
action at No. 1902 CIVIL 1995 in the Court of Common Pleas of Monroe
County, Pennsylvania, the Company agrees that in the event of future
litigation between the Association and the Company, the Company will not
raise as a defense, new matter, or in any other way a claim that names the
individual defendants as indispensable parties.
3<PAGE>
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IN WITNESS WHEREOF, the undersigned officers on behalf of the
Company and Association set their hands and seals acknowledging the
adoption of this Agreement by their respective Board of Directors on this
8th day of June, 1996.
- --- ----
LOT AND COTTAGE OWNERS' ASSOCIATION
OF BUCK HILL FALLS, INC.
By: /s/ Richard J. Boyle
------------------------------------
RICHARD J. BOYLE, President
BUCK HILL FALLS COMPANY
By: /s/ David B. Ottaway
------------------------------------
DAVID B. OTTAWAY, Chairman
4<PAGE>
<PAGE>
APPENDIX
TO AGREEMENT BETWEEN
BUCK HILL FALLS COMPANY AND
LOT AND COTTAGE OWNERS' ASSOCIATION OF BUCK HILL FALLS, INC.
-------------------------------------------
BASIC PRINCIPLES OF THE DUES FORMULA
Community Dues at Buck Hill are to be based on a formula that is fair,
consistent from year to year and controllable. The formula must be
equitable to the community, the Buck Hill Falls Company and the Company's
shareholders.
Our dues structure is based on the principle that each community member
pay an appropriate, proportionate cost of maintaining the quality of the
community. To maintain this quality, the Company provides a broad array
of services including, but not limited to, security, garbage and trash
removal, road maintenance and snow plowing. The Company also preserves and
maintains certain lands and properties for the use and benefit of the
community. These include the community Flower Garden, Metzgers Farm, the
Bowling Greens, the Glen and Falls, the Tennis Tea meeting facility and
certain protective lands that serve as an environmental buffer for the
community.
The Company has adopted an accounting methodology based on "cost centers."
One such center is "Community Services" under which are grouped the Direct
Costs associated with providing to the community the services described in
the preceding paragraph. Such costs include salaries, benefits, and
associated payroll costs, taxes, contracted services, insurance premiums
related to community services, uncollectible Dues billings, telephone
charges, materials, water, sewer and other expenses associated with
providing Community Services.
In the process of operating the Company each year, the Company incurs a
series of Indirect Costs which are operating costs that are not readily
attributable to other cost centers. These Indirect Costs are grouped in
the cost center labeled "General and Administrative Expenses." It is
reasonable to allocate these Indirect costs to all of the Company's
functions that receive benefit from such expenses. The Dues Formula is to
include an allocation for these Indirect Costs. This allocation is to be
based on the proportion. of total direct expenses to provide Community
Services relative to the total of all direct expenses incurred by the
Company. In calculating this percentage for any given fiscal year, the
prior year's audited results will be used.
In consideration of the overall value provided the community by the
Company and to mitigate against contingencies, a margin is to be added to
the total of direct Community Services and the apportioned amount of
Indirect Costs. For the fiscal year 1996, this margin was ten percent.
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The cost incurred to provide various sports amenities (golf, tennis, pool,
fishing etc.) should be supported by fees charged directly to the users of
these amenities. It is the Company's intention to manage these amenities
to assure that each is, at the very least, self-sustaining by the year
2000.
In developing the Dues formula each year, attention must be paid to
assuring clarity, consistency and control. With respect to clarity, each
element of cost must be defined as reasonably and accurately as possible.
Consideration must be given to potential future variations in costs. The
methodology to calculate costs must be consistent from year to year.
Control is employed through careful monitoring of variances between actual
costs incurred versus the original annual budget. The cumulative
experience gained over the years will help fine tune each year's budget
and best assure common understanding by the parties engaged in the budget
and dues setting process.
In the future, consideration should be given to developing a methodology
to deal with carryover credits and charges. Such a process would minimize
the impact of unforeseeable costs or profits in a manner that would be
equitable to the community and the Company.
The aggregate dues to be paid by the community will be apportioned between
and among the owners of lots and cottagers within the community.
We believe this formula approach to dues to be fair to the community, the
company and the Company's shareholders.
LOT AND COTTAGE OWNERS' ASSOCIATION
OF BUCK HILL FALLS, INC.
By: /s/ Richard J. Boyle
-----------------------------------
RICHARD J. BOYLE, President
BUCK HILL FALLS COMPANY
By: /s/ David B. Ottaway
-----------------------------------
DAVID B. OTTAWAY, Chairman
6
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LIST OF SUBSIDIARIES OF THE REGISTRANT
--------------------------------------
Name State of Incorporation
---- ----------------------
Buck Hill Water Company Pennsylvania
EXHIBIT 21
<PAGE>
CONSENT AND REPORT ON SCHEDULES
OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
===============================
To the Board of Directors and Stockholders of
Buck Hill Falls Company:
We consent to the use in this Registration Statement of Buck Hill Falls
Company on Form S-1 of our report dated December 13, 1995, appearing in the
Prospectus, which is a part of this Registration Statement, and to the
references to us under the headings "Selected Financial Data" and "Experts" in
such Prospectus.
Our audits of the consolidated financial statements referred to in our
aforementioned report also included the financial statement schedules of Buck
Hill Falls Company listed in Item 16(b). These financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for income taxes in 1994.
PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES
Wilkes-Barre, Pennsylvania
July 26, 1996
Exhibit 22.1
