FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994. Commission File No. 0-12700
FRANKLIN REAL ESTATE INCOME FUND
(Exact Name of Registrant as Specified in its Charter)
California 77-0185558
- -------------------- ----------------------------------------------------
(State or other jurisdiction or incorporation or (I.R.S. Employer
organization) Identification number)
P.O. Box 7777, San Mateo, CA 94403-7777 (415) 312-2000
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(Address of principal and executive Office)Company's telephone number,
including Area Code
Securities registered pursuant to Section 12(b) of Act:*
Title of each class Name of each exchange on which registered
Common Stock Series A American Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
Warrants to purchase Common Stock, Series A
*On January 14, 1994, the Company registered and listed its Series A common
stock on the American Stock Exchange.
Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____
At January 31, 1995, 3,986,153 shares of the Company's Series A common stock
were held by non-affiliates of the Company. The aggregate market value of the
voting stock held by non-affiliates of the Company, based upon the closing price
of $4.875 as of January 31, 1995, is $19,432,496.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock at December 31, 1994. 3,999,653 shares of Series A common stock and
319,308 shares of Series B common stock and 2,861,420 warrants for Series A
common stock.
Documents Incorporated by Reference - Portions of the Company's Annual Report to
Shareholders for the fiscal year ended December 31, 1994, and Proxy Statement
for use in connection with its Annual Meeting of Shareholders to be held on June
13, 1995, are incorporated by reference in Parts I, II, III and IV.
Item 2.
F R A N K L I N R E A L E S T A T E I N C O M E F U N D
R E A L E S T A T E P O R T F O L I O
As of December 31, 1994, the Company's real estate portfolio consisted of the
Mira Loma Shopping Center located in Reno, Nevada; a 40% undivided interest in
the Shores Office Complex located in Redwood City, California; three separate
R&D buildings in the Northport Business Park located in Fremont, California, and
the Glen Cove Shopping Center located in Vallejo, California. The Company has
also purchased two small parcels of land located adjacent to the Mira Loma
Shopping Center. An affiliated real estate investment trust, Franklin Select
Real Estate Income Fund, owns the remaining 60% interest in the Shores.
With the exception of the Glen Cove Center, the Company's properties are not
generally subject to any mortgage, lien or other encumbrance. The Glen Cove
Center is owned subject to a loan with an outstanding balance of approximately
$1,981,000. The Company currently carries earthquake insurance coverage for its
properties and intends to continue to carry earthquake coverage to the extent
that it is available at economically reasonable rates. However, the Company's
earthquake insurance coverage is subject to substantial deductibles.
PORTFOLIO SUMMARY
At December 31, 1994, the Company's properties contained a total of 61 leases.
The following schedule lists the portfolio's lease expiration dates and the
related annual base rental income as of December 31, 1994.
LEASE EXPIRATIONS
- --------- ------------- -------------- --------------- ---------------
No. of Current % of
Leases Total Annual Current
Year Expiring Sq. Ft.1 Base Rent1 Annual Rent
- --------- ------------- -------------- --------------- ---------------
1995 11 73,676 $723,000 19%
1996 17 77,487 794,000 21%
1997 5 4,249 73,000 2%
1998 8 14,743 245,000 7%
1999 8 22,557 409,000 11%
2000 5 13,149 252,000 7%
2001 1 2,695 41,000 1%
2002 1 23,365 177,000 5%
2005 1 36,000 274,000 7%
2010 1 50,360 528,000 14%
2012 2 2,400 123,000 3%
2013 1 15,025 109,000 3%
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1 Total Square Feet and Annual Base Rent reflect the Company's 40%
interest in the Shores.
R E A L E S T A T E P O R T F O L I O
The Company's portfolio represents in the aggregate, 360,012 rentable square
feet. For the years ended December 31, 1992, 1993 and 1994, the following table
shows the number of lease agreements that the Company executed, the rentable
square feet covered by the agreements, and the amount of tenant improvements and
leasing commissions paid by the Company.
<TABLE>
<CAPTION>
LEASING ACTIVITY
- -------- ------------ ------------ ------------- ------------------- ------------------- ----------------
No. of Tenant Leasing
Leases % of Improvements Paid Commissions Paid
Year Executed Sq. Ft. Portfolio Total
- -------- ------------ ------------ ------------- ------------------- ------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
1992 16 70,004 19.4% $278,000 $121,000 $399,000
1993 19 66,924 18.6% $456,000 $101,000 $557,000
1994 21 35,656 9.9% $182,000 $ 96,000 $278,000
- -------- ------------ ------------ ------------- ------------------- ------------------- ----------------
</TABLE>
The reduced square footage leased in 1994 is primarily due to less space being
available for lease in that year.
At December 31, 1994, the Company's properties were 93% leased, which compares
to 95% leased at the end of 1993. The following tables indicate the occupancy
rates for each of the Company's properties and the average rental rates at
December 31 of each year that the Company has owned the properties:
OCCUPANCY RATES
- --- ------------- --------------- --------------- ------------ ----------------
Mira Loma The Shores Northport Glen
Year Buildings Cove Overall
- --- ------------- --------------- --------------- ------------ ----------------
94,026 55,4182 144,568 66,000 360,012
Sq. Ft. Sq. Ft. Sq. Ft. Sq. Ft. Sq. Ft.
- --- ------------- --------------- --------------- ------------ ----------------
1990 91% 92% N/A N/A 91%
1991 90% 95% 100% N/A 96%
1992 88% 84% 61% N/A 74%
1993 95%1 90% 97% N/A 95%
1994 82%1 99% 97% 97% 93%
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1 Includes 16%, which is leased by a drug store tenant, who has
vacated their space but remains current under the terms of the
lease.
2 Reflects the Company's 40% interest in the Shores.
R E A L E S T A T E P O R T F O L I O
AVERAGE ANNUAL RENTAL RATES/SQ. FT.3
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Mira Loma4
The Shores Northport Glen
Year Buildings Cove
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1990 $8.73 $24.20 N/A N/A
1991 $8.79 $24.77 $8.00 N/A
1992 $8.78 $21.29 $8.09 N/A
1993 $9.14 $21.94 $8.18 N/A
1994 $9.62 $21.52 $7.99 $12.60
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3. The average annual rental rates represent effective base
rental income, as recorded on a GAAP basis for each year,
excluding the amortization of lease buy-out payments, if any,
divided by the average monthly occupied square feet.
4. Average rental rate per square foot excludes income from the
land lease and ATM.
SIGNIFICANT TENANTS
Only one tenant provides 10% or more of the Company's total revenues; the
grocery store anchor at Glen Cove Shopping Center. The tenant leases 50,360
square feet, and makes base rental payments totaling approximately $528,000
annually, or about 12% of the Company's 1994 revenues. In addition, the tenant
is responsible for all allocable expenses of operating the property including
their pro rata share of real estate taxes, common area expenses and insurance.
The lease expires on January 31, 2010, and provides for four consecutive
five-year renewal options.
MIRA LOMA SHOPPING CENTER RETAIL 94,026 SQ. FT. RENO, NEVADA *
In 1988, the Company purchased a fee interest in the Mira Loma Shopping Center
("Mira Loma"), a neighborhood shopping center located on the southeast corner of
Mira Loma Drive and McCarran Boulevard in Reno, Nevada. Located in the southeast
quadrant of Reno, Mira Loma is surrounded by single family homes as well as
residential apartment complexes and city recreational facilities which includes
a golf course. The number of households within Mira Loma's primary market area
grew by approximately 15% during the period from 1990 to 1994. Mira Loma is in a
strong competitive position in a neighborhood which has a higher than average
household income compared to other parts of Reno. As the area continues to grow,
Mira Loma is expected to benefit. Mira Loma is the only neighborhood shopping
center in the area and, under present zoning laws, no other shopping centers may
be built in Mira Loma's immediate market area.
Reno is Nevada's second largest city with a population of approximately 150,000.
Its geographic proximity to California and generally favorable business climate
enables Reno to attract companies wishing to benefit from Nevada's lack of
corporate income, personal income and payroll taxes as well as other lower
costs, while taking advantage of major California markets, including Sacramento
and the San Francisco Bay Area.
R E A L E S T A T E P O R T F O L I O
While the competitive retail market in Reno is approximately 90% occupied, Mira
Loma was 82% leased at December 31, 1994. While Mira Loma's occupancy rate is
slightly below the market average, management believes that the occupancy will
improve once a replacement tenant is found for the center's drug store as
described below. The Company believes that the average effective rents payable
under existing leases at Mira Loma are at current market rates for comparable
space in the Reno area.
In 1993, the drug store tenant at the Mira Loma Shopping Center vacated the
premises. This tenant leases approximately 16% of the rentable space at Mira
Loma under a lease that expires in May, 2013. To date, the tenant has remained
current on its rental obligations and management has no reason to believe that
the tenant intends to default. Therefore, the Company does not expect that the
store closing will have any material short-term impact on the operations of the
property. The Company is engaged in negotiations with another drug store
retailer to assume the existing tenant's lease under similar terms. However, no
formal agreement has yet been signed.
THE SHORES OFFICE COMPLEX OFFICE 138,546 SQ. FT. REDWOOD SHORES, CA. *
On September 1, 1989, the Company purchased a 40% undivided fee interest in the
Shores Office Complex (the "Shores"). An affiliated real estate investment
trust, Franklin Select Real Estate Income Fund ("Select"), acquired the
remaining 60% fee interest as co-owner. This office complex consists of three
buildings located at 100 Marine World Parkway, 1 Twin Dolphin Drive and 3 Twin
Dolphin Drive, Redwood City, San Mateo County, California. The Company and
Select acquired the Shores as tenants in common and have entered into a
Co-Ownership Agreement which defines their respective rights and obligations
with respect to the property.
Located in the Redwood Shores community of Redwood City, California and near the
midpoint of the San Francisco Peninsula approximately 25 miles south of San
Francisco, the Shores is part of a 1,465 acre master-planned, mixed-use
development. Approximately 250 acres are devoted to commercial development
including office buildings, shopping centers, medical buildings, and hotels. The
remainder of Redwood Shores comprises residential properties, a 250 acre lagoon,
and 200 acres of reserved open space. The area contains other existing and
planned buildings which can be considered competitive with the Shores. The
Company believes that the average effective rents provided by existing leases at
the Shores are at current market rates for comparable space in the Redwood
Shores area.
During 1992 and continuing into 1993, the Redwood Shores office market
experienced a decline in rental rates, resulting from over-building and the
economic recession. These factors had a substantial impact on the Shores' cash
flow. The property's operating income declined as leases and renewals were
signed at lower rental rates, and while the Company incurred additional costs
associated with replacing tenants. However, late in 1993 the market stabilized,
and by the end of 1994 the area's vacancy rate had declined to less than 2%. As
a result, effective market rental rates increased about 9% during 1994 and rent
concessions have substantially ended. The Company believes that the long-term
outlook for the Redwood Shores office market remains favorable. There are no
competitive buildings currently under construction in the immediate vicinity,
and the area continues to attract potential tenants. Rental rates are increasing
and, with no speculative construction in progress, management expects this trend
to continue in 1995.
<PAGE>
R E A L E S T A T E P O R T F O L I O
NORTHPORT BUSINESS PARK INDUSTRIAL 144,568 SQ. FT. FREMONT, CA.
In 1991, the Company purchased three research and development ("R&D") buildings
in the Northport Business Park, located at 45875 and 45635 Northport Loop East
and 4545 Cushing Parkway in Fremont, California (the "Northport Buildings"). The
Northport Business Park is located in the Bayside/Northport area of Fremont,
California, on the southeastern side of the San Francisco Bay in southern
Alameda County. Fremont is located in the northeastern part of Silicon Valley
and its lower development costs, good transportation access and affordable
housing have attracted a significant portion of the recent research and
development growth in Silicon Valley. The area is improved with a wide variety
of industrial facilities, many of which are competitive with the light
industrial nature of the Northport Buildings. Management believes that the
average effective rents provided from the existing leases at the Northport
Buildings are at market rates for comparable space in the Fremont area.
The vacancy rate in the Fremont R&D market has declined to approximately 11%
from 18% on January 1, 1994, and 25% on January 1, 1993. As a result, market
rental rates have stabilized after declining approximately 10% in 1993. If this
positive absorption rate continues, rental rates may begin to increase by the
end of 1995.
GLEN COVE CENTER RETAIL 66,000 SQ. FT. VALLEJO, CA.
In January, 1994, the Company purchased the Glen Cove Center ("Glen Cove"),
located at 100-170 Robles Drive, Vallejo, California. Vallejo has a population
of approximately 116,000, and is located about 30 miles northeast of San
Francisco, and twenty miles north of Oakland. Glen Cove is strategically located
at the only entrance and exit to the Glen Cove neighborhood which contains over
2,500 dwelling units. Within a one mile radius surrounding the property, there
are no competing neighborhood shopping centers, giving Glen Cove Center a
competitive advantage in serving the neighborhood.
As of December 31, 1994, the Glen Cove Center was 97% occupied, while the
competitive retail market in the vicinity was approximately 90% occupied. At the
time of acquisition, in January, 1994, the property was 90% occupied. Over the
past twelve months, rental rates have remained stable. The Company believes that
the average effective rents payable under existing leases at Glen Cove are
substantially at current market rates for comparable space in the Vallejo area.
- ---------------
* Market vacancy and rental rate information is based on reports
from CB Commercial Real Estate Group for Mira Loma and The
Shores; Colliers Parrish International, Inc. for Northport and on
internal research reports prepared by management for Glen Cove.
Item 6.
S E L E C T E D F I N A N C I A L I N F O R M A T I O N
<TABLE>
<CAPTION>
---------------------------------------- ---------------- ---------------- --------------- ---------------- ---------------
(Dollars in 000's except per share 1994 1993 1992 1991 1990
amounts)
---------------------------------------- ---------------- ---------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Total revenue $ 4,480 $ 4,138 $ 3,903 $ 4,245 $ 4,015
Depreciation and amortization
1,122 1,069 959 965 532
Property operations expense 1,114 909 892 940 561
Related party expenses 213 226 222 187 152
General and
administrative expenses 218 219 133 118 161
Net income 1,566 1,431 1,274 2,035 2,609
Total assets 38,230 36,676 37,230 38,175 39,091
Note payable 1,981 0 0 0 0
Per share1:
Net income .39 .36 .32 .51 .65
Dividends declared .50 .50 .55 .76 .76
Tax status of dividends paid
Ordinary income .41 .14 .47 .55 .65
Return of capital .09 .24 .08 .21 .11
Capital gain - .12 - - -
Weighted average
number of shares of
Series A common stock
outstanding 3,999,958 4,000,000 4,000,000 4,000,000 4,000,000
</TABLE>
1Per weighted average number of shares of Series A common stock
outstanding.
Item 7.
M A N A G E M E N T ' S D I S C U S S I O N A N D A N A L Y S I S
INTRODUCTION
Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the Financial Statements and Notes
thereto.
RESULTS OF OPERATIONS
COMPARISON OF YEAR ENDED DECEMBER 31, 1994 TO YEAR ENDED DECEMBER 31, 1993
Net income for 1994 increased $135,000, or 9%, as compared to 1993 primarily due
to the acquisition of the Glen Cove Center in January, 1994, and due to improved
occupancy rates at two of the Company's properties.
Rental revenue for 1994 increased $1,045,000, or 31%, primarily due to the
recognition of approximately $913,000 of rental income from the Glen Cove
Center, and due to improved occupancy at the Shores Office Complex and Northport
Business Park properties. The average occupancy rate of net rentable square feet
during the years 1994 and 1993 at the Shores Office Complex was 93% and 83%; at
the Northport Buildings 97% and 87%; and at the Mira Loma Shopping Center 81%
and 92%, respectively. Average occupancy during 1994 at the Glen Cove Center was
95%.
Interest and dividend income decreased $246,000, or 79%, primarily due to the
sale of mortgage-backed securities and the investment of the proceeds in the
Glen Cove Center. A loss of $68,000 was recorded in 1994 on the sale of the
securities. In 1993, the Company sold its GNMA mortgage-backed securities in
order to realize the gain on those investments in the amount of $447,000.
Total expenses increased in 1994 by $207,000, or 8%, from $2,707,000 in 1993 to
$2,914,000, mostly due to the acquisition of the Glen Cove Center.
Interest expense increased $177,000 reflecting the issuance of an unsecured loan
payable in January, 1994, related to the acquisition of the Glen Cove Center.
This loan was converted into a secured mortgage note in June, 1994.
Depreciation and amortization increased $53,000 and operating expense increased
$205,000 reflecting the acquisition of the Glen Cove Center.
Consolidation expense decreased $282,000 on a net basis in 1994, due to the
termination of the proposed merger in the fourth quarter of 1993.
COMPARISON OF YEAR ENDED DECEMBER 31, 1993 TO YEAR ENDED DECEMBER 31, 1992
Net income for 1993 increased $157,000, or 12%, as compared to 1992 due
primarily to the following factors: an increase in rental revenue of $69,000; a
decrease in interest and dividends of $287,000; an increase in gain on the sale
of mortgage-backed securities of $447,000; an increase in depreciation and
amortization of $110,000; a decrease in consolidation expense of $139,000; and
an increase in general and administrative expense of $86,000.
Rental revenue for 1993 increased $69,000, or 2%, primarily due to improved
occupancy rates at the Company's properties. The average occupancy rate of net
rentable square feet in 1993 and 1992 at Mira Loma was 92% and 90%,
respectively, and at the Northport Buildings it was 87% and 83%, respectively,
offsetting a decrease in the average occupancy rate at the Shores to 83% for
1993 compared to 90% for 1992.
M A N A G E M E N T ' S D I S C U S S I O N A N D A N A L Y S I S
Interest and dividend income decreased $287,000, or 48%, primarily due to the
sale of the Company's GNMA mortgage-backed securities in January, 1993, and the
subsequent reinvestment of the proceeds in FNMA and FHLMC mortgaged-backed
securities, which earned a lower yield. The Company sold the mortgage-backed
securities in order to realize the gain on those investments in the amount of
$447,000.
Total expenses increased in 1993 by $78,000, or 3%, from $2,629,000 in 1992 to
$2,707,000. The increase in total expenses is attributable to the following
factors: an increase in depreciation and amortization of $110,000, or 12%; an
increase in operating expenses of $17,000, or 2%; an increase in related party
expenses of $4,000, or 2%; a decrease in consolidation expense, net, of
$139,000, or 33%; and an increase in general and administrative expense of
$86,000, or 65%.
Depreciation and amortization increased $110,000 in 1993, reflecting tenant
improvements and leasing commissions, which were incurred late in 1992 and in
1993.
Consolidation expense, net, decreased $139,000 on a net basis due to the
termination of the proposed merger.
General and administrative expense increased $86,000 due to the acquisition of
directors and officers insurance coverage in 1993, and non-recurring costs
associated with listing the Company's stock on the American Stock Exchange.
The Company's Board of Directors (including all of its Independent Directors)
have determined, after review, that the compensation paid to CPMC in 1994, as
well as the reimbursements made by the Company to the Advisor reflected in Note
2 to the accompanying financial statements are fair and reasonable to the
Company. No advisory fee was paid to the Advisor in 1992, 1993 or 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of capital for the acquisition of properties was
the proceeds from the initial public offering of its stock. The Company
completed its property acquisition phase in 1994 and no further acquisitions are
anticipated. The Company's funds from operations have been its principal source
of capital for property improvements, leasing costs and the payment of quarterly
dividends. At December 31, 1994, the Company's cash reserves, including
mortgage-backed securities, aggregated $1,505,000. The Company's investment in
mortgage-backed securities consists of GNMA, adjustable rate pass-through
certificates in which payments of principal and interest are guaranteed by GNMA.
However, changes in market interest rates may cause the security's market value
to fluctuate, which could result in a gain or loss to the Company if the
securities are sold before maturity.
During 1994, the Company borrowed $2 million in order to purchase the Glen Cove
Center. Otherwise, the Company's properties are owned free of any indebtedness.
Interest on the note accrues at a variable rate of 1.5% in excess of the Union
Bank Reference Rate. Monthly installments of principal and interest are due
beginning August 1, 1994, and continuing until maturity of the note on May 1,
1999. Principal installments are payable in the amount of $3,700 per month. The
note may be prepaid in whole or in part at any time without penalty.
For the foreseeable future, management believes that the Company's current
sources of capital will continue to be adequate to meet both its operating
requirements and the payment of dividends.
Net cash flow provided by operating activities for the years ended December 31,
1994, 1993 and 1992 was $2,670,000, $2,023,000 and $1,837,000, respectively. The
trend generally reflects FREIF's improving profitability, which is also
indicated by trends in net income and Funds from Operations. Net cash flow
provided by operating activities was impacted in 1992 and 1993 by consolidation
expenses and greater free rent and leasing commissions compared to 1994. Also
see "Results of Operations" above.
M A N A G E M E N T ' S D I S C U S S I O N A N D A N A L Y S I S
Funds from Operations for the years ended December 31, 1994, 1993 and 1992 were
$2,688,000, $2,500,000 and $2,233,000, respectively. The primary differences
between the periods relate to the changes in net income as discussed under
"Results of Operations". The Company believes that Funds from Operations is
helpful in understanding a property portfolio in that such calculation reflects
income from operating activities and the properties' ability to support general
operating expenses and interest expense before the impact of certain activities,
such as gains and losses from property sales and changes in the accounts
receivable and accounts payable. However, it does not measure whether income is
sufficient to fund all of the Company's cash needs including principal
amortization, capital improvements and distributions to shareholders. Funds from
Operations should not be considered an alternative to net income, or any other
GAAP measurement of performance, as an indicator of the Company's operating
performance or as an alternative to cash flows from operating, investing or
financing activities as a measure of liquidity. As defined by the National
Association of Real Estate Investment Trusts, Funds from Operations is net
income (computed in accordance with GAAP), excluding gains or losses from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustment for unconsolidated joint ventures.
IMPACT OF INFLATION
The Company's management believes that inflation may have a positive effect on
the Company's property portfolio, but this effect generally will not be fully
realized until such properties are sold or exchanged. On some leases, the
Company collects overage rents based on increased sales and increased base
rentals as a result of cost of living adjustments. The Company's policy of
negotiating leases which incorporate operating expense "pass-through" provisions
is intended to protect the Company against increased operating costs resulting
from inflation.
DIVIDENDS
Dividends are declared quarterly at the discretion of the Board of Directors.
The Company's present dividend policy is to at least annually evaluate the
current dividend rate in light of anticipated tenant turnover over the next two
or three years, the estimated level of associated improvements and leasing
commissions, planned capital expenditures, any debt service requirements and the
Company's other working capital requirements. After balancing these
considerations, and considering the Company's earnings and cash flow, the level
of its liquid reserves and other relevant factors, the Company seeks to
establish a dividend rate which:
i) provides a stable dividend which is sustainable despite short
term fluctuations in property cash flows;
ii) maximizes the amount of cash flow paid out as dividends
consistent with the above listed objective; and
iii) complies with the Internal Revenue Code requirement that a REIT
annually pay out as dividends not less than 95% of its taxable
income.
During the years ended December 31, 1994 and 1993, the Company declared
dividends totaling $2,000,000, or $.50 per share each year.Because depreciation
is a non-cash expense, cash flow will typically be greater than earnings from
operations and net earnings. Therefore, quarterly distributions will
consistently be higher than quarterly earnings resulting in a return of capital
on a GAAP basis.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
FRANKLIN REAL ESTATE INCOME FUND
(Company)
Date: JANUARY 9, 1996 By: S/ DAVID P. GOSS
------------------------------- -----------------
David P. Goss
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company, and in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
s/David P. Goss Chief Executive Officer January 9, 1996
- ---------------------------- -----------------------
David P. Goss
s/Egon H. Kraus Director1 January 9, 1996
- ---------------------------- -----------------------
Egon H. Kraus
s/Frank W. T. LaHaye Director1 January 9, 1996
- ---------------------------- -----------------------
Frank W. T. LaHaye
1 Independent Director
