U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
- --
OF 1934.
For the fiscal year ended DECEMBER 31, 1997
OR
___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from _______________________ to
______________________
Commission file number 0-18819
MONACO FINANCE, INC.
--------------------
(Name of small business issuer in its charter)
Colorado 84-1088131
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(State or other jurisdiction of (IRS
incorporation or organization) Employer
Identification No.)
370 17th Street, Suite 5060
Denver, Colorado 80202
- ---------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (303) 592-9411
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:
Name of Each Exchange
Title of Each Class on Which Registered
- ------------------- -------------------
None
- ------------------- -------------------
- ------------------- -------------------
<PAGE>
SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:
Class A Common Stock, $.01 Par Value
-------------------------------------------
Title of Class
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $12,638,907.
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days:
As of February 27, 1998: Approximately $4,716,540.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of March 30, 1998, there
were 8,014,631 shares of Class A Common Stock, $.01 par value and 1,273,715
shares of Class B Common Stock, $.01 par value, outstanding.
Transitional Small Business Disclosure Format: [ ] Yes [X] No
DOCUMENTS INCORPORATED BY REFERENCE
None.
Total number of pages: 21
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH THE SECTION 16(A) OF THE EXCHANGE ACT.
<TABLE>
<CAPTION>
The executive officers and directors of the Company are as follows:
<S> <C> <C>
Name . . . . . . . . . . . . . . . . . . . . . . . . . . Age Position
- -------------------------------------------------------- --- -------------------------------------------------
Morris Ginsburg. . . . . . . . . . . . . . . . . . . . . 67 Chairman of the Board, President, Chief Executive
Officer, Principal Financial and Accounting Officer
and Director
Irwin L. Sandler . . . . . . . . . . . . . . . . . . . . 52 Executive Vice President, Secretary/Treasurer
and Director
Bill C. Bradley. . . . . . . . . . . . . . . . . . . . . 66 Director
John R. Sloan. . . . . . . . . . . . . . . . . . . . . . 50 Director
Bobby L. Hashaway. . . . . . . . . . . . . . . . . . . . 43 Director
Robert D. Womack . . . . . . . . . . . . . . . . . . . . 55 Director
William P. Clark, Jr.. . . . . . . . . . . . . . . . . . 62 Director
Leonard M. Snyder. . . . . . . . . . . . . . . . . . . . 50 Director
Vann R. Martin . . . . . . . . . . . . . . . . . . . . . 43 Senior Vice President
Mark Gengozian . . . . . . . . . . . . . . . . . . . . . 46 Vice President
<FN>
</TABLE>
There are no family relationships among any of the executive officers or
directors of the Company. Pursuant to the Option Agreement (see "Item 12.
Certain Relationships and Related Transactions - Pacific USA Transactions -
Change in Voting Control"), (i) Consumer Finance Holdings, Inc. ("CFH"), a
wholly-owned subsidiary of Pacific USA Holdings Corp. ("Pacific USA"), agreed
to vote or cause to be voted certain shares of the Company's capital stock,
including the Option Shares (as defined in the Option Agreement), to maintain
Messrs. Ginsburg and Sandler as directors of the Company, and (ii) Messrs.
Ginsburg and Sandler agreed to use their best efforts to provide CFH with the
right to designate four directors to the Company's board or such larger number
as shall then be sufficient to provide CFH with effective control of the
board. In addition, so long as not less than 1,500,000 shares of Preferred
Stock are issued and outstanding, holders of the Preferred Stock have the
right to elect one director of the Company. As of the date hereof, the board
consists of eight members, four of which have been appointed by CFH (Messrs.
Bradley, Sloan, Hashaway and Womack). Mr. Clark has been appointed by First CF
Corp., an indirect wholly-owned subsidiary of Pacific USA and the record owner
of all of the Preferred Stock.
Morris Ginsburg - Mr. Ginsburg, a co-founder of the Company, has been
Chairman of the Board, President and Chief Executive Officer of the Company
since June 1, 1988. From 1955 to 1979, Mr. Ginsburg was chairman of the board,
president, chief executive officer and owner of Bluhill American, a producer
of condiments for the food service industry. Mr. Ginsburg sold Bluhill to the
Kellogg Company in 1979 and served as a director of Fearn International, a
division of Kellogg, from 1979 through 1983. In 1983, Mr. Ginsburg repurchased
Bluhill from Kellogg and shortly thereafter resold it to Dean Foods. In 1981,
Mr. Ginsburg formed Container Industries, Inc., a food container company in
Denver, Colorado for which he serves as chairman of the board. Since 1984, Mr.
Ginsburg has been president, chief executive officer and owner of Ginsburg
Investments, an asset lending company.
Irwin L. Sandler - Mr. Sandler, a co-founder of the Company, has been
Executive Vice President of the Company since April 1, 1993, and Senior Vice
President, Secretary, Treasurer and a Director of the Company since June 1,
1988. Since 1972, Mr. Sandler has been in the private practice of law in
Denver, Colorado emphasizing securities, corporate, contract and general
business law. From 1982 through 1985, Mr. Sandler served as president and a
director of a publicly held company engaged in both oil and gas exploration
and the investment banking business.
Bill C. Bradley - Mr. Bradley has been a Director of the Company since
April 1998. He has been the chief executive officer and a director of Pacific
USA Holdings Corp. since 1991 and is responsible for developing its investment
and operating strategies and plans. From 1968 to 1991 he was a partner of KPMG
Peat Marwick where he served on its board of directors. From 1980 to 1991 he
was responsible for its management consulting practice in the southwest region
of the United States.
John R. Sloan - Mr. Sloan has been a Director of the Company since April
1998. He joined Pacific USA Holdings Corp. in October 1997 as its chief
operating officer From 1993 to 1997, Mr. Sloan served as president and chief
executive officer of J. Sloan & Co., a venture capital firm he founded to
invest in developmental stage companies. From 1989 to January 1995, Mr. Sloan
was a director of Lamonts Apparel, Inc., a public company engaged in the
retail clothing business. In January 1995, Lamonts filed a voluntary petition
under Chapter 11 of the Bankruptcy Code and its plan of reorganization became
effective in January 1998. He served as president and chief executive officer
of The Thompson Company from 1978 to 1992. The Thompson Company is a private
investment company engaged in leveraged buyouts, real estate and venture
capital investments. Mr. Sloan is a certified public accountant.
Bobby L. Hashaway - Mr. Hashaway has been a Director of the Company since
April 1998. Since 1992, he has been the executive vice president and chief
financial officer of Pacific Southwest Bank. From 1975 to 1992, he was
associated with Bank One, Texas, N.A., Dallas, Texas, with the final position
held being that of senior vice president - corporate planning. Mr. Hashaway is
a certified public accountant.
Robert D. Womack - Mr. Womack has been a Director of the Company since
April 1998. Since 1996, he has been the executive vice president and chief
financial officer of Pacific Consumer Funding, LLC ("PCF"), a company owned by
Pacific Southwest Bank and Stone Pine Pacific, LLC, and engaged in the
business of acquisitions, strategic investments and financing for companies
providing credit in the sub-prime finance markets. From 1990 to 1995, Mr.
Womack held several executive positions with American General Corporation,
Houston, Texas, a diversified financial services company. From 1971 to 1978
and again from 1987 to 1990, he was associated with KPMG Peat Marwick LLP, in
areas including tax consulting for mergers, acquisitions and cross-border
transactions. Mr. Womack is a certified public accountant.
William P. Clark, Jr. - Mr. Clark has been a Director of the Company
since April 1998 and has been a director of Pacific Southwest Bank since 1993.
Since 1974, he has been the president, chief executive officer, a director and
a majority shareholder of Lockhart Motor Company, which owns and operates a
Ford-Lincoln-Mercury dealership in Lockhart, Texas. In 1992 and 1993 he served
on the board of directors of the Texas Automobile Dealers Association. From
1969 to 1989 he served on the board of directors of Lockhart State Bank. Mr.
Clark is active in numerous civic and community service associations.
Leonard M. Snyder - Mr. Snyder has been a Director of the Company since
April 1998. Since 1995, Mr. Snyder has engaged in marketing, management and
financial consulting. From 1987 to October 1994, he was chairman of the board
and chief executive officer of Lamonts Apparel, Inc., a public company engaged
in the chain store apparel business. In January 1995, Lamonts filed a
voluntary petition under Chapter 11 of the Bankruptcy Code and its plan of
reorganization became effective in January 1998. Since April, 1998, Mr. Snyder
has been a director of One Price Clothing Stores, Inc., a public company
engaged in the women's retail clothing business. From 1979 to 1987 he was
employed by Allied Stores Corporation, a department store chain. The final
position he held with Allied was that of corporate vice president and
executive group manager for all Midwestern United States stores. Mr. Snyder
received a master's degree in business administration in 1973 and a bachelor's
degree in marketing in 1969 from the University of Arizona.
Vann R. Martin - Mr. Martin has been Senior Vice President of the Company
since February 1998. From August 1997 to February 1998, he served as Executive
Vice President of Marketing and Operations for Search Financial Services, Inc.
From 1984 to February 1998, he was involved with a program which provided
automobile financing for marginal risk customers From 1984 through 1993, the
program was owned and operated by First Jackson Savings Bank of Jackson,
Mississippi, where the last position held by Mr. Martin was Senior Vice
President. In 1993, the program was purchased by MS Financial, of which Mr.
Martin became President and Chief Operating Officer. In July 1997, that
company was acquired by Search Financial Services, Inc. From 1978 through
1984, Mr. Martin served in various financial and credit management positions
with Capital Bank of Louisiana and Ford Motor Credit Company.
Mark Gengozian - Mr. Gengozian has been Vice President, Information
Systems Director of the Company since August 1995. His previous work
experience as vice president, MIS Director and consultant include directing
major systems conversions with Capital Associates International, Inc. (April
1990 to August 1995), US WEST Financial Services (January 1989 to April 1990),
Citicorp, N.A. (July 1987 to January 1989), Security Pacific Leasing (July
1987 to January 1989) and Great Western Financial (July 1987 to January 1989).
Mr. Gengozian's twenty-two years of experience encompass software, hardware,
communications and network expertise on most computer systems.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Act") and the
rules thereunder require the Company's executive officers and directors, and
any persons who own more than ten percent of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of Forms 3, Forms 4 and Forms 5
received by it, or written representations from a reporting person that no
Form 5 is required for that person, the Company believes that, during the last
fiscal year, all Section 16(a) filing requirements applicable to its executive
officers, directors and ten-percent or more beneficial owners, were complied
with.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 1997, the Board of Directors
held two meetings and took action by unanimous written consent on eight
occasions. Significant matters were informally discussed among the directors
before the consents were signed. During 1997, no incumbent director attended
fewer than 75% of the aggregate of the total number of board meetings held
while he was a director and the total number of committee meetings of which he
was a member.
The Board of Directors has appointed a Stock Option Committee and an
Audit Committee but does not currently have standing nominating or
compensation committees. The Company's executive committee, which has broad
powers to act on behalf of the Company, consists of Messrs. Ginsburg and
Sandler. The executive committee meets informally on a regular basis.
The current members of the Stock Option Committee and the Audit Committee
are Leonard M. Snyder and William P. Clark, Jr. The Stock Option Committee was
established on June 30, 1992, and held no meetings in 1997. However, it took
action by unanimous written consent on two occasions in 1997. The Stock Option
Committee administers and interprets the Company's 1992 Stock Option Plan and
has authority to determine which persons shall be granted options under the
Company's 1992 Stock Option Plan and the terms and conditions of the stock
options granted. The Audit Committee was recently established and has held no
meetings. Previously, the full Board of Directors performed the functions of
an audit committee.
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth certain information concerning cash
compensation paid to the Company's Chief Executive Officer and any other
executive officer whose total annual compensation exceeded $100,000 for the
fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
------------
Annual
Compensation Awards
------------ -----------
Securities
Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation Options (#)
- ---------------------------- ------------ ----------- ------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Morris Ginsburg. . . . . . . 1997 $ 208,086 $ 6,317 $ 8,104 112,500(1)
President and. . . . . . . . 1996 $ 200,000 $37,891 $ 8,750 50,000(1)
Chief Executive Officer. . . 1995 $ 200,000 $37,891 $ 6,790 0
Irwin L. Sandler . . . . . . 1997 $ 160,330 $ 4,737 $ 10,134 112,500(1)
Executive Vice President,. . 1996 $ 150,000 $27,410 $ 10,632 50,000(1)
Secretary and Treasurer. . . 1995 $ 150,000 $28,418 $ 9,373 0
Michael Feinstein(2) . . . . 1997 $ 100,000 $ 2,499 $ 5,711 50,000(1)
Senior Vice President. . . . 1996 $ 100,000 $14,993 $ 7,579 10,000(1)
Chief Financial Officer. . . 1995 $ 48,333 $ 0 $ 0 0
Mark Gengozian . . . . . . . 1997 $ 105,500 $ 1,222 $ 2,000 80,000(1)
Vice President . . . . . . . 1996 $ 96,875 $ 9,045 $ 0 15,000(1)
1995 $ 36,939 $ 0 $ 0 0
_____________________
<FN>
(1) Options to purchase Class A Common Stock of the Company.
(2) Mr. Feinstein is no longer employed by the Company effective April 1998.
</TABLE>
<PAGE>
The Company granted the following stock options to its named executive
officers during the fiscal year ended December 31, 1997:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<S> <C> <C> <C> <C>
Percent of
Number of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise Expiration
Name . . . . . . . . . . . . . . . . . . . . . . . . Granted (#) Fiscal Year Price Date
- ---------------------------------------------------- ------------- ------------- --------- ---------------
Morris Ginsburg, . . . . . . . . . . . . . . . . . . 112,500 16% $ 0.531 August 25, 2007
President and Chief Executive Officer
Irwin L. Sandler,. . . . . . . . . . . . . . . . . . 112,500 16% $ 0.531 August 25, 2007
Executive Vice President, Secretary and Treasurer
Michael Feinstein, . . . . . . . . . . . . . . . . . 50,000 7% $ 0.531 August 25, 2007
Senior Vice President and Chief Financial Officer(1)
Mark Gengozian,. . . . . . . . . . . . . . . . . . . 80,000 12% $ 0.531 August 25, 2007
Vice President
_____________________
<FN>
(1) Mr. Feinstein is no longer employed by the Company effective April 1998.
</TABLE>
The following table sets forth the individual stock option exercises by
the named executive officers in and during the fiscal year ended December 31,
1997, and the stock option values at the end of such fiscal year.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Value of Unexercised
Unexercised Options In-The-Money Options
at FY-End (#) at FY-End ($)
-------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares
Acquired on Value
Name . . . . . . . . . Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- -------------------- ---------------------- ----------- ------------- ------------ --------------
Morris Ginsburg. . . . 0 $ 0 281,250 56,250 $ 12,319 $ 12,319
Irwin L. Sandler . . . 0 $ 0 281,250 56,250 $ 12,319 $ 12,319
Mark Gengozian . . . . 100 $ 113 54,900 40,000 $ 8,738 $ 8,760
Michael Feinstein(1) . 0 $ 0 26,667 33,333 $ 3,650 $ 7,300
_____________________
<FN>
(1) Mr. Feinstein is no longer employed by the Company effective April 1998.
</TABLE>
The Company's executive compensation is currently not affected by the
limitations on the deductibility of executive compensation amounts in excess
of $1,000,000 imposed by Section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"). However, in the future the Company intends to take
any actions it deems necessary with respect to executive compensation in
consideration of Section 162(m) of the Code.
EMPLOYMENT AGREEMENTS
On December 4, 1997, the Company entered into Executive Employment
Agreements with Messrs. Ginsburg and Sandler (the "Executives") whereby Mr.
Ginsburg is employed as president and chairman of the board and Mr. Sandler is
employed as executive vice president. He also presently serves as corporate
secretary and treasurer. The employment agreements each have a term of three
years, beginning December 4, 1997. The employment agreements provide for
annual base salaries for Messrs. Ginsburg and Sandler of $310,000 and
$290,000, respectively, and the same fringe benefits as are provided to other
executive level employees from time to time. Benefits include, without
limitation, the right to participate in stock option grants.
The employment agreements contain confidentiality, non-competition and
non-solicitation covenants by the Executives which apply for a period of two
years following expiration of the Executive's employment for any reason other
than death. As consideration for these covenants, the Company agreed to pay
each Executive the sum of $300,000 in two equal installments without interest,
with the first installment due on the first anniversary date of the
commencement of the two-year period and the second installment due on the
second anniversary date thereof.
DIRECTOR COMPENSATION
Directors are currently not paid fees for attending meetings of the Board
of Directors or committees thereof. However, they are reimbursed for actual
travel and other expenses incurred in attending such meetings. The Company
intends to compensate outside directors for attendance at board and committee
meetings in the form of cash and/or stock options, awards, appreciation rights
or other equity incentives or compensation. As of the date hereof, the amount
or method of determining any such compensation has not been established.
As members of the Stock Option Committee, Messrs. Snyder and Clark will
be eligible to participate in the Company's 1992 Stock Option Plan. The
Company's 1992 Stock Option Plan provides that options for the purchase of
5,000 shares of Class A Common Stock shall be granted automatically each year
immediately following the annual meeting of the Company's shareholders to each
director who is a member of the Stock Option Committee on such date. The
options shall be fully exercisable six months following the date of grant and
shall be exercisable for ten years after the date of grant. The exercise price
of such options shall equal the closing bid price of the stock as quoted on
the Nasdaq Stock Market on the date of grant.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information as of April 16, 1998, with
respect to the beneficial ownership of shares of Class A Common Stock and
Class B Common Stock of the Company by (a) each person known by the Company to
be the beneficial owner of more than five percent of the outstanding shares of
Class A and Class B Common Stock; (b) each executive officer and director; and
(c) all executive officers and directors as a group. Except as noted below,
each person has sole voting and investment power over the shares indicated:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF % OF COMMON STOCK
NAME AND ADDRESS BENEFICIAL OWNERSHIP(1) OWNERSHIP % OF VOTING POWER
OF BENEFICIAL OWNER CLASS A CLASS B COMBINED(2) CLASS B COMBINED(3)
- ---------------------------------------- --------------------- ------------------ ------------------ -------- -------------
<S> <C> <C> <C> <C> <C>
Morris Ginsburg. . . . . . . . . . . . . 283,950(4) 580,000(5) 9.0% 45.5% *(6)
370 17th Street
Denver, CO 80202
Irwin L. Sandler . . . . . . . . . . . . 283,320(7) 250,000(5) 5.6% 19.6% *(6)
370 17th Street
Denver, CO 80202
Bill C. Bradley. . . . . . . . . . . . . 3,527,881(8) 1,273,715(8) 45.7% 100.0% 51.8%
5999 Summerside Dr., Suite 112
Dallas, TX 75252
John R. Sloan. . . . . . . . . . . . . . -- -- -- -- --
5999 Summerside Dr., Suite 112
Dallas, TX 75252
Bobby L. Hashaway. . . . . . . . . . . . 2,027,881(9) -- 19.3% - 6.9%
18524 Bay Pines Lane
Dallas, TX 75287
Robert D. Womack . . . . . . . . . . . . -- -- -- -- --
17103 Preston Road, Suite 100
Dallas, TX 75248
William P. Clark, Jr.. . . . . . . . . . 2,027,881(10) -- 19.3% - 6.9%
P.O. Box 208
Lockhart, TX 78644
Leonard M. Snyder. . . . . . . . . . . . -- -- -- -- --
6260 N. Desert Moon Loop
Tucson, AZ 85750
Vann R. Martin . . . . . . . . . . . . . 10,000 -- * -- *
370 17th Street
Denver, CO 80202
Mark Gengozian . . . . . . . . . . . . . 55,000(11) -- * -- *
370 17th Street
Denver, CO 80202
Michael Feinstein. . . . . . . . . . . . 26,667(12) -- * -- *
370 17th Street
Denver, CO 80202
Pacific USA Holdings Corp. . . . . . . . 3,527,881(13) 1,273,715(13) 45.7% 100.0% 51.8%
Pacific Electric Wire & Cable Co., Ltd.
Consumer Finance Holdings, Inc.
5999 Summerside Drive, #106
Dallas, TX 75252
Black Diamond Advisors, Inc. . . . . . . 1,716,667(14) -- 15.6% -- --
230 Park Avenue
New York, NY 10169
Heller Financial, Inc. . . . . . . . . . 392,717(15) -- 4.1% -- --
500 West Monroe Street
Chicago, IL 60661
Bud Karsh. . . . . . . . . . . . . . . . -- 443,715(5) --(5) 34.9%(6) --(5)
10000 E. Yale #60
Denver, CO 80231
All executive officers and directors . . 4,160,151 1,273,715 48.8% 100.0% 51.8%
as a group (10 persons)
<FN>
* Represents less than one percent.
(1) Shares are considered beneficially owned, for purposes of this table, only if held by the person indicated, or if such
person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the
power to vote, to direct the voting of and/or to dispose of or to direct the disposition of, such security, or if the person has
the right to acquire beneficial ownership within 60 days, unless otherwise indicated. All shares are owned of record unless
otherwise indicated.
(2) Includes all shares of Class A Common Stock and Class B Common Stock outstanding and assumes exercise of all outstanding
options and warrants and conversion of all outstanding debentures beneficially owned by the indicated person.
(3) Includes all shares of Class A Common Stock and Class B Common Stock outstanding. Each share of Class A Common Stock has
one vote per share while each share of Class B Common Stock has three votes per share. The Class B Common Stock may be converted
into Class A Common Stock on a share for share basis at the option of the holder thereof, and shall automatically be converted
in the event of its sale or transfer (whether by sale, assignment, gift, bequest, appointment or otherwise) or upon death of the
holder. Excluded, however, from the automatic conversion are transfers of the Class B Common Stock for estate planning purposes
to or for the benefit of the original holder or members of his immediate family, provided that the original holder retains both
voting and investment power over the stock so transferred.
(4) Includes options to purchase 50,000 shares of Class A Common Stock at $2.125 per share, exercisable at any time until
January 3, 2002; options to purchase 125,000 shares of Class A Common Stock at $3.00 per share, exercisable at any time prior to
June 30, 2002; options to purchase 50,000 shares of Class A Common Stock at $1.875 per share exercisable at any time prior to
July 29, 2006; and options to purchase 56,250 shares of Class A Common Stock at $0.531 per share exercisable at any time prior
to August 25, 2007. Excludes 7,500 shares of Class A Common Stock owned by the spouse of Mr. Ginsburg as to which he disclaims
beneficial ownership.
(5) Messrs. Ginsburg, Sandler (through a family partnership of which he is sole general partner) and Karsh own 580,000,
250,000 and 443,715 shares, respectively, of Class B Common Stock. Messrs. Ginsburg and Sandler have granted an option to CFH to
purchase all of their shares of Class B Common Stock exercisable until December 4, 2000.
(6) Messrs. Ginsburg, Sandler and Karsh entered into an Agreement Among Certain Shareholders of Monaco Finance, Inc., dated
April 9, 1992, in which Mr. Karsh appointed Messrs. Ginsburg and Sandler as his proxy and attorney-in-fact to each vote 50% of
his Class B Common Stock. On December 4, 1997, Messrs. Ginsburg and Sandler transferred their voting rights with respect to
these shares to Pacific USA, which, since it has sole voting power over those shares, may be deemed to be the beneficial owner
thereof. Mr. Karsh also may be deemed to be the beneficial owner of these shares since he retains sole dispositive power with
respect thereto.
(7) Includes options to purchase 50,000 shares of Class A Common Stock at $2.125 per share, exercisable at any time until
January 3, 2002; options to purchase 125,000 shares of Class A Common Stock at $3.00 per share, exercisable at any time prior to
June 30, 2002; options to purchase 50,000 shares of Class A Common Stock at $1.875 per share, exercisable at any time prior to
July 29, 2006; and options to purchase 56,250 shares of Class A Common Stock at $0.531 per share exercisable at any time prior
to August 25, 2007. Of the remaining shares listed for Irwin L. Sandler, 2,070 shares were purchased by Mr. Sandler through the
custodial account of his Keogh Plan. Mr. Sandler may be deemed the beneficial owner of these shares.
(8) As a director of Pacific USA, Mr. Bradley may be deemed to share voting and/or investment power with respect to the
following shares: 1,500,000 shares of Class A Common Stock owned of record by CFH; 811,152 shares of Class A Common Stock owned
of record by First CF Corp.; and 1,216,729 shares of Class A Common Stock issuable upon full conversion of the Preferred Stock
owned by First CF Corp. In addition, Mr. Bradley may be deemed to be the beneficial owner of 1,273,715 shares of Class B Common
Stock as to which CFH has sole voting power. CFH also owns an option to purchase the 830,000 shares of Class B Common Stock
owned by Messrs. Ginsburg and Sandler exercisable until December 4, 2000.
(9) As a director of First CF Corp., Mr. Hashaway may be deemed to share voting and/or investment power over 811,152 shares
of Class A Common Stock and 1,216,729 shares of Class A Common Stock issuable upon full conversion of the Preferred Stock owned
by that company.
(10) As a director of Pacific Southwest Bank, Mr. Clark may be deemed to share voting and/or investment power over 811,152
shares of Class A Common Stock and 1,216,729 shares of Class A Common Stock issuable upon full conversion of the Preferred Stock
owned by First CF Corp., a wholly-owned subsidiary of that bank.
(11) Includes options to purchase 15,000 shares of Class A Common Stock at $1.875 per share any time prior to July 29, 2006;
and options to purchase 39,900 shares of Class A Common Stock at $0.531 per share exercisable at any time prior to August 25,
2007.
(12) Includes options to purchase 10,000 shares of Class A Common Stock at $1.875 per share exercisable for three months
following his termination date; and options to purchase 16,667 shares of Class A Common Stock at $0.531 per share exercisable
for three months following his termination date. Mr. Feinstein is no longer employed by the Company effective April 1998.
(13) The information contained in the table, in this footnote and elsewhere herein is derived from a Schedule 13D dated
March 16, 1998, filed by Pacific USA, Pacific Electric Wire & Cable Co., Ltd. and CFH with the Securities and Exchange
Commission with respect to an Option Agreement. See "Item 12. Certain Relationships and Related Transactions - Pacific USA
Transactions - Change in Voting Control." Pacific USA is a wholly-owned subsidiary of Pacific Electric Wire & Cable Co., Ltd.
("Pacific Electric"). CFH and First CF Corp. are direct and indirect wholly-owned subsidiaries of Pacific USA. Accordingly,
Pacific Electric and Pacific USA may be deemed to be the beneficial owners of all of the shares referred to in Note (8) above.
(14) The information contained in the table and in this footnote is derived from a Schedule 13D dated June 28, 1996, filed
by Black Diamond Advisors, Inc. ("BDA") and others with the Securities and Exchange Commission with respect to the issuance by
the Company on January 9, 1996, of $5 million in principal amount of 12% Convertible Subordinated Senior Notes due 2001
("Convertible Notes"), convertible at any time into approximately 1,250,000 shares of the Company's Class A Common Stock at a
conversion price of $4.00 per share. Concurrently, the Company agreed to issue up to an additional $5 million in principal
amount of Convertible Notes (the "Additional Notes") at a conversion price of $3.00 per share. If the Additional Notes had been
issued on December 31, 1996, the Additional Notes would have been convertible into 1,666,667 shares of Class A Common Stock (the
"Additional Shares"). In the Schedule 13D, BDA claims that it is the beneficial owner of the Additional Shares. The Company
expresses no opinion with respect to this position. In addition, certain of the purchasers of the Notes have entered into a
profit-sharing agreement with BDA. Also, BDA has the right to purchase the Notes (and in one case the shares of Class A Common
Stock issuable upon conversion of the Notes) under certain circumstances not presently applicable.
Includes 50,000 shares of Class A Common Stock issuable upon conversion of Convertible Notes owned of record by BDA and
1,666,667 Additional Shares assuming all of the Additional Notes are issued and the conversion price of the Additional Notes is
$3.00 per share. Stephen H. Deckoff and James E. Walker III each is an officer, director and 50% shareholder of BDA. Each of
Messrs. Deckoff and Walker disclaims beneficial ownership of the shares of Class A Common Stock beneficially owned by BDA.
212,500 shares of Class A Common Stock are issuable upon conversion of Convertible Notes owned of record by BDC Partners I,
L.P. ("BDC Partners I"). Messrs. Deckoff and Walker and James J. Zenni are the only members of Black Diamond Capital Management
LL.C. ("BDCM"), the sole general partner of BDC Partners I. Accordingly, BDCM and each of Messrs. Deckoff, Walker and Zenni may
be deemed to be the beneficial owner of all shares of Class A Common Stock beneficially owned by BDC Partners I. Also, Messrs.
Deckoff, Walker and Zenni beneficially own an additional 62,500, 62,500 and 50,000 shares, respectively, of Class A Common
Stock.
(15) Heller Financial, Inc. is the owner of Convertible Notes convertible into 750,000 shares of Class A Common Stock, or
approximately 8.1% of the Company's outstanding common stock. However, pursuant to the terms of the Indenture, if a holder of
Notes is subject to federal banking regulations with respect to the ownership of common stock, then the Notes held by such
holder are only convertible to such extent as would permit such holder to own at any one time no more common stock of the
Company than would constitute 4.9% of the outstanding capital stock of the Company. Such restrictions do not apply to any
transferee of the holder if such transferee is not subject to such federal banking regulations and such transfer would not
otherwise cause such holder to be otherwise in violation of federal banking regulations. Heller Financial, Inc. has advised the
Company that it is subject to such federal banking regulations and, accordingly, may be deemed to beneficially own only up to
4.9% of the Company's Class A Common Stock.
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
PACIFIC USA TRANSACTIONS
CONVERSION OF LOAN. On November 1, 1996, Pacific USA made a secured loan
of $3,000,000 to the Company which was scheduled to mature on November 16,
1998. On April 25, 1997, CFH and the holder of the note evidencing the
$3,000,000 loan converted the principal balance of the loan into 1,500,000
shares of Class A Common Stock valued at $2.00 per share. The closing bid
price of the Class A Common Stock on the Nasdaq Stock Market on that date was
$2.00 per share. CFH is a holding company engaged in consumer finance. As a
result of the conversion, Pacific USA, Pacific Electric Wire & Cable Co., Ltd.
("Pacific Electric"), and CFH acquired beneficial ownership of 1,500,000
shares of Class A Common Stock. Pacific USA is a 100% owned subsidiary of
Pacific Electric. Concurrently, Pacific USA granted a proxy to vote 750,000
shares of Class A Common Stock to Morris Ginsburg, and a proxy to vote 750,000
shares of Class A Common Stock to Irwin Sandler.
CHANGE IN VOTING CONTROL. As of April 16, 1998, Pacific USA had direct
and indirect voting power over approximately 28.8% of the outstanding shares
of Class A Common Stock and 100% of the outstanding shares of Class B Common
Stock, or approximately 51.8% of the total combined voting power of the
outstanding shares of Common Stock. In addition, as of April 16, 1998, Pacific
USA had direct and indirect voting power over 100% of the outstanding shares
of Preferred Stock.
On or about December 4, 1997 (the "Effective Date"), CFH and Morris
Ginsburg, Sandler Family Partners, Ltd., and Irwin L. Sandler (collectively
the "Shareholders") entered into an Option Agreement. Pursuant to the Option
Agreement, the Shareholders granted a three-year option to CFH (the "Call
Option") to purchase all, but not less than all, of the 830,000 shares of
Class B Common Stock owned by the Shareholders (the "Option Shares") at a
purchase price of $4.00 per share. Concurrently, CFH granted to each
Shareholder an option (the "Put Option") to sell that portion of the Option
Shares held by each Shareholder at a price of $4.00 per share. The Put Option
is exercisable with respect to 50% of the Option Shares during the 30-day
period following the second anniversary of the Effective Date and 50% during
the 30-day period following the third anniversary of the Effective Date. In
the event that CFH or any of its affiliates exercises the Call Option, and
within 180 days after closing thereof, sells or agrees to sell any portion of
the Option Shares to a person who is not an affiliate of CFH for a price
greater than $4.00 per share, the seller shall be obligated to pay the
Shareholders 50% of such excess. The Shareholders agreed not to pledge, sell
or otherwise transfer the Option Shares at any time during the term of the
Call Option except to the extent of exercise of the Put Option. The obligation
of CFH under the Put Option is secured by funds in a segregated bank account.
Pursuant to the Option Agreement, each Shareholder granted CFH the right
to vote all Option Shares and to direct the exercise of all consensual or
other voting rights with respect to any additional shares of the Company's
capital stock as to which any Shareholder holds a proxy granted by a third
party, subject to any fiduciary duty owed to the grantor of any such proxy.
The Shareholders retain all other incidents of ownership with respect to the
Option Shares, including, but not limited to, the right to receive dividends.
The Option Agreement further provides that CFH shall vote or cause to be
voted shares of the Company's capital stock, including the Option Shares, to
maintain Messrs. Ginsburg and Sandler as directors of the Company. The
Shareholders agreed to use their best efforts to provide CFH with the right to
designate four directors to the Company's board or such larger number as shall
then be sufficient to provide CFH with effective control of the board. In
April 1998, the number of members of the Board of Directors was expanded from
four to eight, two of the then directors resigned and the current members of
the board were appointed. Concurrently with execution of the Option Agreement,
Messrs. Ginsburg and Sandler entered into Executive Employment Agreements with
the Company. See "Item 10. Executive Compensation - Employment Agreements."
Prior and subsequent to the Effective Date, management of the Company and
representatives of Pacific USA and its affiliates engaged in extended
negotiations and investigations which resulted in the execution of the Asset
Purchase Agreement on or about January 8, 1998. Following approval at a
special meeting of shareholders of the Company held March 4, 1998, and
pursuant to the terms of the Asset Purchase Agreement, 2,433,457 shares of the
Company's 8% Cumulative Convertible Preferred Stock, Series 1998-1 (the
"Preferred Stock") valued at $2.00 per share and 811,152 shares of the
Company's Class A Common Stock, also valued at $2.00 per share, were issued to
affiliates of Pacific USA. Each share of Preferred Stock is convertible at any
time into one-half share of Class A Common Stock, or an aggregate of up to
1,216,729 shares of Class A Common Stock. Thus, the effective cost of the
Class A Common Stock issuable upon conversion of the Preferred Stock will be
$4.00 per share. The Company may become obligated to issue additional shares
of Class A Common Stock to affiliates of Pacific USA depending upon
satisfaction of certain conditions described herein.
Pacific USA is the beneficial owner of 2,311,152 outstanding shares of
Class A Common Stock. As a result of the Option Agreement, it was granted the
power to vote the 830,000 shares of Class B Common Stock owned by the
Shareholders and a limited power to direct the voting of shares subject to
proxies held by the Shareholders. As of April 16, 1998, 8,014,631 shares of
Class A Common Stock were issued and outstanding and 1,273,715 shares of Class
B Common Stock were issued and outstanding. The Class A Common Stock has one
vote per share while the Class B Common Stock has three votes per share.
Accordingly, Pacific USA controls approximately 51.8% of the combined total
voting power of the Class A and Class B Common Stock. Upon exercise of either
the Put Option or the Call Option, the shares of Class B Common Stock
purchased by CFH will automatically convert into the same number of shares of
Class A Common Stock thereby reducing the voting power of Pacific USA with
respect to the Common Stock Pacific USA also is the beneficial owner of all of
the outstanding shares of Preferred Stock.
ASSET PURCHASE AGREEMENT. The Company entered into an Amended and
Restated Asset Purchase Agreement dated as of January 8, 1998 (the "Asset
Purchase Agreement"), with Pacific USA and certain of its wholly-owned or
partially-owned subsidiaries - Pacific Southwest Bank ("PSB"), NAFCO Holding
Company, L.L.C. ("NAFCO"), Advantage Funding Group, Inc. ("Advantage"), and
PCF Service, LLC - providing for, among other things, the purchase by the
Company of sub-prime automobile loans from NAFCO and Advantage having an
unpaid principal balance of approximately $81,115,233 for a purchase price of
$77,870,623 of which $73,003,709 was paid in cash. Financing was provided by
Daiwa Finance Corporation which also is entitled to receive warrants for the
purchase of 250,000 shares of Class A Common Stock. The Asset Purchase
Agreement amended and restated a similar agreement dated on or about September
30, 1997.
The Company's credit and risk departments screened the loans acquired
from NAFCO and Advantage. The credit department reviewed certain of the loan
files and verified, on a selected basis, information concerning the borrower,
the vehicle, as well as the contract terms. The credit department also matched
information contained in actual files with data transmitted to the Company
electronically. The function of the risk department is to use the Company's
proprietary risk analysis system to project cash flows from pools of loans to
determine estimated yield considering the purchase price, net of any discount;
coupon interest rate; estimated frequency and severity of defaults; and
estimated pre-payments. These investigations enabled the Company to establish
the terms for purchase of the contracts which management believes will satisfy
the Company's yield parameters and assisted in obtaining the financing
provided by Daiwa Finance Corporation In addition, Daiwa performed an
independent review of the loan portfolio.
The balance of the purchase price, $4,866,914, was paid by the issuance
on or about March 9, 1998, of 2,433,457 shares of the Company's 8% Cumulative
Convertible Preferred Stock, Series 1998-1 (the "Preferred Stock") valued at
$2.00 per share. So long as not less than 1,500,000 shares of Preferred Stock
are issued and outstanding, the holders of the Preferred Stock, voting
separately as a class, are entitled to elect one member of the Company's Board
of Directors. Holders of the Preferred Stock otherwise have no voting rights
except as may be required by the laws of the State of Colorado and except with
respect to any amendment to the Company's Articles of Incorporation which
would change any of the rights or preferences enjoyed by such stock
The holders of the Preferred Stock are entitled to receive when, as and
if declared by the Board of Directors, out of any funds of the Company legally
available for that purpose, cumulative dividends from the date of issuance at
the rate of 8% ($.16) per share of Preferred Stock per year, payable quarterly
in shares of the Company's Preferred Stock valued at $2.00 per share (or in
cash if no preferred shares are available for that purpose). Dividends on the
Preferred Stock are cumulative whether or not the Company is legally able to
pay such dividends in whole or in part. No dividends (other than those payable
solely in common stock) may be paid with respect to the common stock of the
Company unless all accumulated and unpaid dividends on the Preferred Stock
shall have been declared and paid.
The Preferred Stock may be converted in whole or in part at any time and
from time to time into shares of Class A Common Stock at the rate of one share
of Class A Common Stock for each two shares of Preferred Stock so converted
(the "Conversion Ratio") In the event the closing price of the Class A Common
Stock on the Nasdaq Stock Market shall equal or exceed $6.00 per share on each
trading day during any period of 60 consecutive calendar days, all of the
Preferred Stock shall be automatically converted into shares of Class A Common
Stock at the Conversion Ratio. The Conversion Ratio shall be proportionately
adjusted as appropriate to reflect the effect of stock splits or combinations.
Upon liquidation, dissolution or winding up of the Company, the holders
of the Preferred Stock then issued and outstanding shall be entitled to
receive an amount equal to $2.00 per share of Preferred Stock plus any
accumulated but unpaid dividends before any payment or distribution of the
assets of the Company is made to or set apart for the holders of Common Stock.
The Company entered into a Registration Rights Agreement with each of
NAFCO, Advantage and PSB (the "RRA Holders") whereby each has the right under
certain circumstances to require that the Company register the shares of Class
A Common Stock ("Registrable Securities") owned by it for public resale (a
"demand" registration). In addition, if the Company determines to proceed with
the preparation and filing of a registration statement that would permit the
inclusion of the Registrable Securities, it is obligated to give written
notice thereof to each RRA Holder which has 30 days thereafter in which to
determine whether it wants all or any portion of its Registrable Securities to
be included in that registration statement (a "piggyback" registration). Also,
the Company has agreed to file a short form registration statement on Form S-3
upon demand by an RRA Holder so long as the reasonably anticipated aggregate
price to the public would exceed $1,000,000 and the Company is entitled to use
that short form registration. The RRA Holders are entitled to an unlimited
number of such registrations. The Company is obligated to pay all expenses
incurred in connection with the first demand registration and each piggyback
and Form S-3 registration excluding underwriters' discounts and commissions.
Each RRA Holder is obligated to pay all expenses incurred in connection with
its second demand registration.
The Company also agreed to make and keep public information available
within the meaning of Rule 144 under the Securities Act of 1933 and to use its
best efforts to timely file all reports required to be filed by it with the
Securities and Exchange Commission. The purpose of these covenants is to
enable the RRA Holders to sell shares of Class A Common Stock under Rule 144.
After a one-year holding period has been satisfied, that rule allows sales by
any single holder of the Company's common stock of up to 1% of the Company's
issued and outstanding Class A Common Stock during any 90-day period.
In connection with any registration of the Registrable Securities, the
Company and the selling RRA Holder have agreed to indemnify the other and the
other's affiliates for certain claims, costs and expenses with respect to such
registration. The registration rights may be transferred by each RRA Holder to
any person who acquires all its Registrable Securities or to any affiliate of
an RRA Holder.
As required by the Asset Purchase Agreement, PSB entered into a Loan Loss
Reimbursement Agreement whereby it agreed to reimburse the Company for up to
15% of any losses incurred by the Company in connection with the loans
acquired from NAFCO and Advantage. In consideration therefor, the Company paid
PSB an amount equal to 2% of the principal amount of the acquired loans in the
form of 811,152 shares of the Company's Class A Common Stock valued at $2.00
per share.
Also, the Company may be obligated to make additional payments to NAFCO
based on the performance of certain other assets acquired from NAFCO and the
results of operations, if any, with loan originators previously associated
with NAFCO. If there are any pre-tax earnings associated with these assets
and/or operations for calendar years 1998 and 1999, the Company is obligated
to pay NAFCO amounts equal to two times such pre-tax earnings in the form of
shares of the Company's Class A Common Stock valued at the average daily
closing price of such stock on the Nasdaq Stock Market for the last ten days
of such calendar year. The number of shares of Class A Common Stock which the
Company may be required to issue to NAFCO pursuant to these agreements cannot
be determined at present.
AUTO DEALERSHIP LEASE
Effective March 24, 1994, the Company entered into a triple net lease
(the "Lease") with GSC Ltd. Liability Company, a Colorado limited liability
company ("GSC"), pursuant to which the Company agreed to lease from GSC real
property at 890-894 S. Havana, Aurora, Colorado, including two buildings
located thereon with total square footage of approximately 13,375 square feet,
to be used by the Company as an automobile dealership lot. The Lease will
expire on March 23, 2001, unless sooner terminated or extended pursuant to the
terms of the Lease. In September 1995, the Company amended the lease to
include additional property (vacant land) resulting in an increase in the base
rent payable under the Lease from $12,750 per month to $13,738 per month. The
monthly rent increases to $14,238 for year three; $15,238 for year four;
$16,238 for year five; and $16,738 for years six and seven. Messrs. Sandler,
Caukin and Ginsburg, each a present or former director or executive officer of
the Company, are members of GSC. The Lease was approved by the disinterested
members of the Board of Directors. In the opinion of management, the terms of
the Lease are no less favorable to the Company than the terms which the
Company could have received from nonaffiliated third parties. Effective June
1, 1996, the Company entered into a sublease agreement on the property at 890
S. Havana, Aurora, Colorado, for the entire lease term at an amount
approximately equal to the Company's obligation.
SHAREHOLDER AGREEMENTS
A Buy-Sell Agreement dated May 14, 1993, by and among the Company, Morris
Ginsburg and Sandler Family Partners, Ltd. (the "Partnership"), provides that
(i) the Company has the obligation to purchase the shares of the Company's
common stock owned by Mr. Ginsburg or the Partnership upon the death of Mr.
Ginsburg or Irwin L. Sandler, General Partner of the Partnership,
respectively, to the extent of proceeds from insurance policies acquired by
the Company on their lives; (ii) the Company shall maintain insurance policies
in the amount of $2,000,000 each on the lives of Messrs. Ginsburg and Sandler
for the purpose of acquiring shares pursuant to the Buy-Sell Agreement; (iii)
the purchase price for any shares purchased shall be the greater of book value
or 80% of the average of the daily closing prices of the stock for the 30
consecutive trading days commencing 45 trading days prior to the date of death
of the insured; (iv) each of Mr. Ginsburg and the Partnership grant a first
right to the Company to acquire any shares which he or it may desire to sell
other than through Rule 144 under the Securities Act of 1933. In the event the
Company does not purchase any or all of the shares pursuant to such right, the
other shareholder has the option to acquire such shares; and (v) Messrs.
Ginsburg and Sandler appoint each other, upon the incapacity of either of
them, as his true and lawful attorney-in-fact and agent to vote the shares of
common stock of the Company beneficially owned by him and to exercise all
rights with respect thereto The parties to the Buy-Sell Agreement have agreed
that the purchase rights and obligations under the Option Agreement shall
supersede the purchase and right of first refusal provisions contained in the
Buy-Sell Agreement during the term of the Option Agreement described herein
under "Pacific USA Transactions - Change in Voting Control."
In an Agreement Among Certain Shareholders of Monaco Finance, Inc. dated
April 9, 1992, Milton Karsh appointed Morris Ginsburg and Irwin L. Sandler,
both of whom are officers and directors of the Company, as his proxy and
attorney-in-fact to each vote 50% of the Company's Class B Common Stock owned
by him. See "Item 11. Security Ownership of Certain Beneficial Owners and
Management." Such rights have been transferred to Pacific USA subject to any
fiduciary duties owed to third parties. See "Pacific USA Transactions - Change
in Voting Control."
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
MONACO FINANCE, INC.
(Registrant)
April 28, 1998 /s/ Morris Ginsburg
---------------------
Morris Ginsburg, President,
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
Registrant and in the capacities and on the dates indicated.
April 28, 1998 /s/ Morris Ginsburg
---------------------
Morris Ginsburg, President,
Chief Executive Officer, Principal
Financial and Accounting Officer
and Director
April 27, 1998 /s/ Irwin L. Sandler
-----------------------
Irwin L. Sandler
Executive Vice President,
Secretary/Treasurer and
Director
April 22, 1998 /s/ Bill C. Bradley
----------------------
Bill C. Bradley
Director
April 27, 1998 /s/ John R. Sloan
--------------------
John R. Sloan
Director
April 28, 1998 /s/ Bobby L. Hashaway
------------------------
Bobby L. Hashaway
Director
April 23, 1998 /s/ Robert D. Womack
-----------------------
Robert D. Womack
Director
April 23, 1998 /s/ William P. Clark, Jr.
-----------------------------
William P. Clark, Jr.
Director
April 22, 1998 /s/ Leonard M. Snyder
------------------------
Leonard M. Snyder
Director
