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424(b)(3)
Prospectus
FCNB CORP
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
150,000 Shares of Common Stock
($1.00 Par Value Per Share)
___________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is March 11, 1996
It is suggested that this Prospectus
be retained for future reference
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No person is authorized to give any information or to make any representation
other than those contained or incorporated by reference in this Prospectus in
connection with the offer contained in this Prospectus and, if given or made,
any such information or representation must not be relied upon as having been
authorized by FCNB Corp. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of FCNB Corp since the date hereof.
TABLE OF CONTENTS
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PAGE
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Available Information........................................................................... 3
Incorporation of Certain Documents by Reference ................................................ 3
FCNB Corp ...................................................................................... 4
Description of Plan ............................................................................ 4
Purpose ....................................................................................... 4
Advantages .................................................................................... 4
Administration ................................................................................ 5
Participation ................................................................................. 5
Optional Cash Investments ..................................................................... 6
Purchases ..................................................................................... 7
Costs ......................................................................................... 8
Reports to Participants ....................................................................... 8
Dividends ..................................................................................... 8
Certificates for Shares ....................................................................... 8
Changing Method of Participation and Withdrawal ............................................... 9
Other Information ............................................................................. 9
Use of Proceeds................................................................................. 12
Legal Opinion................................................................................... 12
Experts......................................................................................... 12
Securities and Exchange Commission Position on Indemnification for Securities Act Liabilities .. 12
</TABLE>
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AVAILABLE INFORMATION
FCNB Corp (the "Company") is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at the Commission's office at
450 Fifth Street, N.W., Washington, D.C. 20549 and the Commission's Regional
Offices in New York (75 Park Place, Room 1400, New York, New York 10007) and
Chicago (Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661-2511), and copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. This Prospectus does not contain all information set
forth in the Registration Statement and exhibits thereto which the Company has
filed with the Commission under the Securities Act of 1933 (the "Securities
Act") and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents of the
Company filed by it with the Commission:
(a) Annual Report on Form10-K for the year ended December 31, 1991;
(b) Quarterly Reports on Form10-Q for the quarters ended March 31, June 30
and September 30, 1992; and
(c) The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed April 24, 1987.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing such documents.
Any person to whom a copy of this Prospectus is delivered may obtain without
charge, upon written or oral request, a copy of any and all of the information
that has been incorporated by reference herein (not including exhibits to such
information unless such exhibits are specifically incorporated by reference into
the information that the Prospectus incorporates). Requests for such information
should be directed to Office of the Secretary, FCNB Corp, 7200 FCNB Court,
Frederick, Maryland 21703, telephone (301) 662-2191.
Any statement or information contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement or
information contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement or information. Any such statement or information so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
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FCNB CORP
FCNB Corp (the "Company"), a Maryland corporation, is a two bank holding
company registered under the Bank Holding Company Act of 1956, as amended. The
Company's principal subsidiaries are FCNB Bank and Elkridge Bank. FCNB Bank, a
state-chartered commercial bank under the laws of the State of Maryland was
converted from a national bank in June 1993, and was originally chartered in
1818. Elkridge Bank, a state-chartered commercial bank under the laws of the
State of Maryland was converted from a national bank in March 1995, and was
originally chartered in 1961. The Banks are engaged in general commercial and
retail banking business serving individuals and businesses in Frederick,
Carroll, Howard, Prince George's, Anne Arundel and Montgomery counties located
in Maryland.
The principal executive offices of the Company are located at 7200 FCNB
Court, Frederick, Maryland 21703 (telephone 301-662-2191).
DESCRIPTION OF THE PLAN
The following is a question and answer statement which constitutes the
provisions of the Company's Dividend Reinvestment and Stock Purchase Plan (the
"Plan"). The Plan has been authorized by the Company's Board of Directors and
will continue until terminated by the Company.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of the Company's Common
Stock, $1.00 par value per share (the "Common Stock"), with a convenient
method of investing some or all of their cash dividends in shares of Common
Stock and of making optional cash investments in additional shares of Common
Stock. The shares of Common Stock acquired for participants in the Plan
("Participants") will be purchased in the over-the-counter market. In the
event that the Company's Articles of Incorporation are amended to negate the
applicability of pre-emptive rights with respect to new issuances of stock
pursuant to the Plan, the Company may elect to issue shares of stock to
satisfy purchase requirements under the Plan.
Advantages
2. What are the advantages of the Plan?
Participants in the Plan may have some or all of the cash dividends paid
on their shares of Common Stock automatically reinvested in additional shares
of Common Stock. The Company will contribute three percent of the purchase
price for shares purchased with reinvested dividends. Participants also may
make optional cash investments (a minimum of $20 and a maximum of $2,500 per
quarter) at any time, whether or not they elect to reinvest dividends. The
three percent contribution does not apply to purchases of shares with
optional cash investments. Full investment of funds is possible under the
Plan, whether or not there is a sufficient amount to buy a whole share,
because the Plan permits fractions of shares to be credited to Participants'
accounts. In addition, dividends in respect of such fractions, as well as
full shares, will be credited to Participants' accounts. Participants avoid
safekeeping requirements and recordkeeping costs for shares credited to their
accounts through the free custodial service and reporting provisions of the
Plan. Statements of account will be furnished to Participants on a quarterly
basis to provide simplified recordkeeping.
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Administration
3. Who administers the Plan?
Wachovia Bank of North Carolina, N.A. (the "Agent"), a national banking
association independent of, and not affiliated with, the Company, administers
the Plan for Participants, keeps records, sends statements of account to
Participants, and performs other duties related to the Plan. Shares purchased
through the Plan will be registered in the name of the Agent or its nominee
as agent for Participants.
All inquiries and communications regarding the Plan should include your
account number and should be directed to the Agent at:
Wachovia Bank of North Carolina, N.A.
Corporate Trust Department
Dividend Reinvestment Section
P.O. Box 3001
Winston-Salem, North Carolina 27102
(910) 770-6000
(800) 633-4236
Participation
4. Who is eligible to participate in the Plan?
All holders of record of shares of Common Stock are eligible to
participate in the Plan. In order to participate, beneficial owners whose
shares are registered in names other than their own (for instance, in the
name of a broker) must become stockholders of record by having the shares
indicated on the Authorization Form transferred into their own names.
Although shares purchased with reinvested dividends and optional cash
investments will be registered in the name of the Agent or its nominee,
stockholders may continue to hold those shares presently held by them in
their own names.
A stockholder will not be eligible to participate in the Plan if he
resides in a jurisdiction in which it is unlawful for the Company to permit
his participation. A stockholder's right to participate in the Plan is not
transferable apart from a transfer of his Common Stock to another person.
5. How does a stockholder elect to participate?
A stockholder may participate in the Plan at any time by completing the
Authorization Form and returning it to the Agent at the address set forth in
Question 3 above. A stockholder who does not wish to participate in the Plan
will continue to receive dividends, as declared, by check without any further
action on his part.
6. When will participation begin?
If the Authorization Form is received by the Agent at least 5 business
days before the record date for a dividend, reinvestment will begin with that
dividend payment. For example, in order to invest the quarterly dividend
expected to be payable to holders of record at April 19, 1996, the
Authorization Form must be received by the Agent no later than April 12,
1996. If the Authorization Form is received after April 12, 1996, then
reinvestment would begin with the next dividend payment date. See Question 8
for information concerning optional cash investments.
7. What does the Authorization Form provide?
The Authorization Form allows each stockholder to authorize the
reinvestment of dividends on some or all shares registered in his name,
together with optional cash investments. Alternatively, the stockholder may
elect to make optional cash investments even if he does not elect to have
dividends reinvested.
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The Agent will use the cash dividends, plus any optional cash investments
received from a Participant, to purchase additional shares of Common Stock.
Cash dividends on shares of Common Stock credited to a Participant's account
under the Plan are always automatically reinvested regardless of which
investment option is selected.
Optional Cash Investments
8. Who is eligible to make optional cash investments?
Participants who have submitted an appropriately completed Authorization
Form, whether or not they have authorized the reinvestment of dividends, are
eligible to make optional cash investments. The Agent will apply any optional
cash investments to the purchase of shares of Common Stock for the account of
the Participant.
If a stockholder chooses to participate by optional cash investments only,
the Company will continue to pay cash dividends on shares registered in the
Participant's name in the usual manner, and the Agent will apply any optional
cash investments to the purchase of additional shares of Common Stock for the
Participant's account under the Plan. However, dividends payable on shares of
Common Stock credited to the account of the Participant under the Plan will
be automatically reinvested in additional shares of Common Stock.
An initial optional cash investment may be made by a stockholder when
enrolling in the Plan by enclosing a check with the Authorization Form.
Thereafter, optional cash investments may be made by the use of the cash
investment form included with the quarterly statement sent to Participants by
the Agent.
Checks for optional cash investments must be made payable to "Wachovia
Bank of North Carolina, N.A., Agent."
9. What are the limitations on making optional cash investments?
Optional cash investments cannot be less than $20 or more than $2,500 per
calendar quarter. The same amount need not be sent each quarter and there is
no obligation to make an optional cash investment in every quarter.
10. When will optional cash investments received by the Agent be invested?
Optional cash investments received at least five business days before a
dividend record date will be held by the Agent and applied to the purchase of
shares at the same time that dividend reinvestment purchases are made. Any
optional cash investment received less than five business days prior to the
dividend record date will be returned to the Participant.
Since no interest will be paid on funds held by the Agent, each
Participant is urged to mail any optional investment check so that it reaches
the Agent shortly before the fifth business day prior to the dividend record
date.
Purchases
11. How many shares of Common Stock will be purchased for Participants?
Each Participant's account will be credited with a number of shares,
including fractional shares computed to four decimal places, equal to the
total amount to be invested (the amount of cash dividends reinvested, the
Company's 3% contribution, and optional cash investments) divided by the
applicable purchase price per share (see Question 12).
12. What will be the price of shares of Common Stock purchased under the
Plan?
Shares of Common Stock will be purchased with reinvested dividends and
optional cash investments under the Plan at such times as the Agent may
determine, as promptly as possible after a dividend payment date, and in no
event later than 30 days from the dividend payment date. No interest will be
paid on funds held by the Agent under the Plan. For the purposes of making
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purchases, the Agent will commingle the dividends to be reinvested and
optional cash investments of all Participants, and the per share price for
shares purchased for each Participant's account will be the average price of
all shares purchased with the funds available. For purchases made on the
Nasdaq National Market or in the over-the-counter market, such prices will
include a dealer mark-up or a brokerage commission. Participants will
therefore indirectly bear the cost of such mark-up or commission.
If shares are purchased directly from the Company, the price for such
purchases will be established in one of two ways. If the purchases for a
particular investment period include purchases both on the Nasdaq National
Market or in the over-the-counter market and from the Company, the per share
price to be paid to the Company will be equal to the average price paid for
shares on the Nasdaq National Market or in the over-the-counter market. If
the purchases for an investment period are to be made solely from the
Company, the per share price will be equal to the average of the daily market
prices quoted for the Common Stock for the three trading days on which quotes
were published preceding the dividend payment date. For this purpose, the
daily market price will be the mean between the highest bid quotation and the
lowest ask quotation. If the Company elects to have the Agent purchase shares
from the Company, it must notify the Agent at least ten days prior to the
dividend payment date for the particular investment period.
The Common Stock is thinly traded, and transactions in the Common Stock
may be infrequent. For this reason, depending on the number of shares
involved, purchases on the Nasdaq National Market or in the over-the-counter
market to satisfy the requirements of the Plan may have a significant effect
on prevailing market prices, which could result in the payment of higher
prices for shares than would be the case were the Plan not in effect.
13. May a stockholder purchase shares through the Plan but have dividends on
those shares sent directly to him?
No. The purpose of the Plan is to provide the Participant with a
convenient method of purchasing shares of Common Stock and having the
dividends on those shares reinvested. Accordingly, dividends paid on shares
held in the Plan will be automatically reinvested in additional shares of
Common Stock. A Participant may, of course, receive certificates for full
shares accumulated in his account under the Plan at any time by sending a
written request to the Agent. When certificates are issued to the
Participant, future dividends on these shares will be treated in accordance
with the Participant's instructions as indicated by his Authorization Form.
Costs
14. Is there any expense charged to Participants in connection with
participation in the Plan?
No. There are no service charges. All costs of administration of the Plan
will be paid by the Company.
Reports to Participants
15. How will Participants be advised of purchases of stock?
As soon as practicable after each purchase, all Participants will receive
a statement of account. These statements are the Participant's continuing
record of the cost basis of shares and should be retained for tax purposes.
Participants also will receive quarterly statements of account as well as
copies of the same communications sent to all other stockholders, including
the quarterly reports, annual report, notice of annual meeting and proxy
statement, and income tax information for reporting dividends paid.
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Dividends
16. Will Participants be credited with dividends on shares held in their
accounts under the Plan?
Yes. The Company pays dividends, as declared, to the record holders of all
its shares of Common Stock. As the record holder for Participants, the Agent
will receive dividends for all Plan shares held on the record date. It will
credit such dividends to Participants' accounts in the Plan on the basis of
full and fractional shares held in their respective accounts, and will
reinvest such dividends in additional shares.
Certificates for Shares
17. Will stock certificates be issued for shares of Common Stock purchased?
No. Certificates for shares of Common Stock purchased under the Plan will
not be issued to Participants. The number of shares credited to an account
under the Plan will be shown on the Participant's statement of account. This
additional service protects against loss, theft or destruction of stock
certificates.
However, certificates for any number of shares, up to the total number of
full shares credited to an account under the Plan, will be issued upon
written request of a Participant. This request should be mailed to the Agent.
Any remaining full shares and all fractional shares will continue to be
credited to the Participant's account.
Shares credited to the account of a Participant under the Plan may not be
pledged. A Participant who wishes to pledge such shares must request that a
certificate for such shares be issued in his name.
Certificates for fractional shares will not be issued.
18. In whose name will accounts be maintained and certificates registered
when issued?
An account will be maintained in each Participant's name as shown on the
stockholder records at the time the Participant joins the Plan. When issued,
certificates for full shares will be registered in the account name.
Upon written request, certificates also can be registered and issued in
names other than the account name, subject to compliance with any applicable
laws and the payment by the Participant of any applicable taxes, provided
that the request bears the signatures of the Participant and the signature is
guaranteed by a financial institution or brokerage firm, having membership in
good standing, in a recognized guarantee program (Securities Transfer Agent
Medallion Program, New York Stock Exchange Medallion Signature Program or
Stock Exchanges Medallion Program). No guarantee will be accepted if the
aggregate value of the transaction exceeds the authorized limit as defined in
the program.
Changing Method of Participation and Withdrawal
19. How does a Participant change his method of participation?
A Participant may change his method of participation at any time by
completing a subsequent Authorization Form and returning it to the Agent. The
change will apply as of the dividend record date that is five or more
business days after the Agent receives the new Authorization Form.
20. May a Participant withdraw from the Plan?
Yes. The Plan is entirely voluntary and a Participant may withdraw at any
time.
If the request to withdraw is received by the Agent at least five business
days prior to any record date, the amount of the dividend, and any optional
cash investment which would otherwise have been invested, will be paid as
soon as practicable to the withdrawing Participant. Thereafter, all dividends
will be paid in cash. A stockholder may elect to re-enroll in the Plan at any
time.
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21. How does a Participant withdraw from the Plan?
In order to withdraw from the Plan, a Participant must notify the Agent in
writing that he wishes to withdraw. Written notice should be mailed to the
Agent. When a Participant withdraws from the Plan, or upon termination of the
Plan by the Company, a certificate for full shares credited to the
Participant's account under the Plan will be issued and a cash payment will
be made for any fraction of a share.
Upon withdrawal from the Plan, the Participant may, if he desires, request
the Agent to sell all of the shares, both full and fractional, credited to
his account in the Plan. If the Participant requests that his shares be sold,
the Agent will place a sell order, within five business days after receipt of
the request, through an independent brokerage firm selected by the Agent. The
Participant will receive the proceeds of the sale less any brokerage
commissions and any transfer tax.
22. What happens to a fraction of a share when a Participant withdraws from
the Plan?
When a Participant withdraws from the Plan, a cash adjustment representing
any fraction of a share will be mailed directly to the Participant. The cash
payment will be based on the average market price of a share determined
pursuant to the market quote formula set forth in Question 12 above.
Other Information
23. What happens when a Participant sells or transfers all of the shares
registered in his name (i.e., those that are not held in his Plan account)?
If a Participant disposes of all shares of stock registered in his name,
the Agent will, unless otherwise instructed by the Participant, continue to
reinvest the dividends on the shares credited to his account under the Plan.
24. If the Company offers additional shares of Common Stock or other
securities through a rights offering, how will the rights be handled with
respect to shares credited to a Participant's account under the Plan?
In a rights offering, rights issued with respect to shares held in the
Plan will be issued to a Participant in his own name. Therefore, a
Participant will directly receive a total number of rights based upon the
aggregate shares held of record in his name and the whole shares credited to
his account under the Plan.
25. What happens if the Company issues a stock dividend or declares a stock
split?
Any stock dividend or split shares distributed by the Company on shares
credited to the account of a Participant under the Plan will be added to his
account. Stock dividends or split shares distributed on shares held directly
by a Participant will be mailed to him in the same manner as to stockholders
who are not participating in the Plan.
26. How will a Participant's shares held under the Plan be voted at meetings
of stockholders?
If shares registered in the name of a Participant are voted by him on any
matter submitted to a meeting of stockholders, the Agent will vote any full
shares held in the Participant's account under the Plan in accordance with
the voting instruction in the Participant's proxy for the shares registered
in his name. If no shares are registered in a Participant's name, shares
credited to the Participant's account under the Plan will be voted in
accordance with instructions given on an instruction form which will be
furnished to the Participant. If the Participant desires to vote in person at
the meeting, a proxy for shares credited to his account under the Plan may be
obtained upon written request received by the Agent at least 15 days before
the meeting.
If no voting instruction is set forth on a properly signed and returned
proxy card or instruction form, with respect to any item thereon, all of a
Participant's shares -- those registered in his name, if any, and those
credited to his account under the Plan -- will be voted (in the same manner
as for non-participating stockholders who return proxies and do not provide
instructions) in accordance
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with the recommendations of the Company's management. If the proxy card or
instruction form is not returned, or if it is returned unsigned, none of the
Participant's shares will be voted unless the Participant votes in person.
27. What are the Federal income tax consequences of participation in the
Plan?
Cash dividends paid by the Company on its Common Stock are taxable as
ordinary income to the holders of such shares, even though, to the extent a
shareholder participates in the Plan, such dividends are not actually
received by the shareholder, but instead are reinvested in Common Stock. The
amount of dividend income realized for federal income tax purposes is equal
to the full fair market value of the shares of Common Stock acquired under
the Plan through reinvested dividends, although such Common Stock is acquired
under the Plan at a discount as a result of the Company's 3% contribution.
Thus, each Participant will be taxed on the amount of the discount applicable
to shares purchased for the Participant's account. Also, with regard to
either the reinvestment of dividends, or the purchase of additional Common
Stock as a result of optional cash investments, to the extent the Company
pays any brokerage fees, commissions or service charges ("Other Charges") in
connection with the purchase of Common Stock under the Plan, such Other
Charges will be taxable to Participants as additional dividends.
A Participant's tax basis in shares of Common Stock acquired under the
Plan through the reinvestment of dividends will be equal to the amount
treated as a dividend to such Participant, which is the fair market value of
such shares on the dividend payment date plus applicable Other Charges. The
tax basis of shares of Common Stock acquired under the Plan through optional
cash investments will be the cost of the shares plus applicable Other
Charges.
There are no income tax consequences at the time certificates for full
shares accumulated in a Participant's account are issued to the Participant.
When, at the request of a Participant, the Agent sells shares of Common
Stock credited to a Participant's account or distributes cash with respect to
a fractional share interest to a Participant, gain or loss will be realized
by the Participant in an amount equal to the difference between the proceeds
received and the Participant's tax basis in the shares or fractional shares
sold. If the shares are capital assets in the Participant's hands, such gain
or loss will be capital gain or loss. Whether the capital gain or loss
realized is long-term or short-term depends upon the holding period of the
shares giving rise to the gain or loss. In general, if the holding period is
more than one year, such capital gain or loss will be long-term. A
Participant's holding period for shares of Common Stock purchased under the
Plan will begin on the day following the day on which such shares were
credited to the Participant's account.
In the case of those Participants whose dividends are subject to United
States income tax withholding, the Agent applies an amount equal to the cash
dividends payable to such Participant, less the amount of tax required to be
withheld, to the purchase of shares of Common Stock for the Participant's
account. The statements confirming purchases made for such Participants will
indicate the amount of tax withheld.
For further information as to tax consequences of participation in the
Plan, including state, local and foreign taxation, each Participant should
consult with his own tax adviser.
28. May the Plan be changed or discontinued?
The Company reserves the right to make modifications to the Plan or to
suspend or terminate the Plan at any time. Any such modification, suspension
or termination will be announced to both participating and non-participating
stockholders.
29. What is the responsibility of the Agent under the Plan?
In administering the Plan, the Agent will not be liable for any act done
or any omission to act in good faith, including, without limitation, any
claim of liability arising out of failure to terminate a Participant's
account upon the Participant's death prior to receipt of written notice of
such death. The Agent may not create a lien on any funds, securities or other
property held under the Plan.
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The Participant should recognize that the Agent cannot assure him of a
profit or protect him against a loss on the shares purchased for him under
the Plan in accordance with his instructions as indicated on the
Authorization Form. It is up to each Participant to make his own decision
regarding the purchase or sale of any shares for his account under the Plan.
30. Who interprets and regulates the Plan?
The Company reserves the right to interpret and regulate the Plan as may
be necessary or desirable in connection with the operation of the Plan.
31. When can purchases or sales of Common Stock be temporarily curtailed?
Temporary curtailment or suspension of purchases or sales of Common Stock
may be made at any time when such purchases or sales would in the Agent's
judgment contravene, or be restricted by, applicable regulations,
interpretations or orders of the Securities and Exchange Commission, any
other governmental commission, agency or instrumentality, any court,
securities exchange or the National Association of Securities Dealers, Inc.
The Agent shall not be accountable, or otherwise liable, for failure to make
purchases or sales at such times and under such circumstances.
USE OF PROCEEDS
In the event any shares of Common Stock are purchased under the Plan from the
Company, the proceeds received by the Company will be used for general corporate
purposes.
LEGAL OPINION
Certain matters with respect to the legality of the issuance of the shares of
Common Stock offered hereby have been passed upon for the Company by Weinberg
and Green, 100 South Charles Street, Baltimore, Maryland 21201.
EXPERTS
The consolidated audited financial statements of the Company incorporated by
reference in this Prospectus and Registration Statement have been examined by
Keller Bruner& Company (formerly known as Keller, Zanger, Bissell& Company),
independent accountants, for the periods indicated in their report thereon which
is included in the Annual Report on Form10-K for the year ended December 31,
1991. The financial statements examined by Keller Bruner& Company have been
incorporated herein by reference in reliance on their report given on their
authority as experts in accounting and auditing.
SECURITIES AND EXCHANGE COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Articles of Incorporation of the Company provide for the indemnification
of its officers and directors under certain circumstances. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") may be permitted to directors, officers or persons controlling the
Company pursuant to such provisions, the Company has been informed 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.
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