<PAGE> 1
PROSPECTUS
SUBMICRON SYSTEMS CORPORATION
3,375,020 SHARES OF COMMON STOCK
This Prospectus relates to 55,320 shares of Common Stock,
$.0001 par value (the "Common Stock"), of SubMicron Systems Corporation (the
"Company") issuable upon conversion of the Company's 9% Convertible Subordinated
Notes (the "9% Notes"), 39,000 shares of Common Stock issuable upon the exercise
of warrants (the "Investor Warrants"), that were issued with the 9% Notes,
2,605,700 shares of Common Stock issuable upon conversion of the Company's
Series A Convertible Non-Redeemable Preferred Stock (the "Preferred Stock"),
100,000 shares of Common Stock issuable upon the exercise of warrants (the
"Commonwealth Warrants" and, together with the Investor Warrants, the
"Warrants"), that were issued to Commonwealth Associates in connection with
certain investment advisory services, and 575,000 shares of Common Stock held by
one of the Selling Stockholders. See "The Selling Stockholders." The shares
covered by this Prospectus may be sold by the Selling Stockholders from time to
time through the public securities markets or through negotiated transactions.
The Company will not receive any of the proceeds from the sale of the Common
Stock by the Selling Stockholders. Proceeds from the exercise, if any, of the
Warrants will be added to the Company's working capital.
SEE "RISK FACTORS" COMMENCING ON PAGE 4 FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
The Common Stock is included in the Nasdaq National
Market under the symbol "SUBM." The last reported sale price of the Common Stock
on the Nasdaq National Market on May 8, 1997 was $2.75 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES 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 May 9, 1997
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
---------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 7 World Trade Center, New
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such materials can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Electronic filings made through the Electronic Data Gathering,
Analysis and Retrieval System ("EDGAR") are publicly available through the
Commission's Web Site (http://www.sec.gov).
The Company has filed with the Commission a Registration
Statement on Form S-3 under the Securities Act of 1933, as amended, with respect
to the securities offered hereby. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement and exhibits filed or incorporated by reference as part thereof.
Statements contained in this Prospectus concerning the provisions of certain
documents are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies of
all or any part of the Registration Statement, including exhibits thereto, may
be obtained, upon payment of prescribed fees, at the offices of the Commission
set forth above.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act are incorporated into this Registration
Statement by reference:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.
(b) The description of the Company's shares of Common
Stock contained in its Registration Statement on Form 8-A dated September 4,
1991, including all amendments and reports filed for the purpose of updating
such description.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this Registration
Statement and prior to the termination of the offering hereby, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part hereof.
The Company will provide without charge to each person to whom
a Prospectus is delivered, upon the written or oral request of any such person,
a copy of any or all of the documents incorporated herein by reference, other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that is incorporated into the
Prospectus. Such requests should be directed to R. G. Holmes, Chief Financial
Officer, SubMicron Systems Corporation, 6620 Grant Way, Allentown, Pennsylvania
18106; telephone number (610) 391-9200.
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RISK FACTORS
Investment in the Company's securities involve certain
elements of risk. Investors should carefully consider the following factors,
among others, relating to the Company.
Recent Losses; Quarterly Fluctuations. The Company reported a
net loss of $20,109,000 for 1996, which included net losses in the second, third
and fourth quarters of 1996 of $197,000, $16,138,000 and $5,224,000
respectively. Certain factors impacting the Company's recent results are
described in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996. Although the Company was profitable for 1995 as a whole, the
Company recognized losses during the second and third quarters of 1995 of
$2,048,000 and $341,000, respectively. These fluctuations, which are likely to
continue, are a result of several factors, including in particular, the
fluctuations in the semiconductor market, the relatively high price of the
Company's products in relation to quarterly sales, the high costs of certain
customized orders, the lead time required to manufacture such products and the
Company's accounting method of recognizing revenue from a system sale at the
time of title transfer, which ordinarily occurs at the time of shipment.
Consequently, delays in the shipment of even one or two systems could have a
significant impact on the results of operations for a particular quarter.
Accordingly, quarterly results are likely to fluctuate and the results for any
fiscal quarter may not be indicative of results for future fiscal quarters.
In addition, the Company will record a one-time noncash
extraordinary debt extinguishment charge in the first quarter of 1997, estimated
to be approximately $900,000 (net of taxes), relating to the issuance by the
Company of its 8% Convertible Subordinated Notes due March 2002 (the "8% Notes")
and the Preferred Stock to certain holders of the 9% Notes, in retirement of the
9% Notes and Investor Warrants held by such persons.
Significant Capital Requirements. In recent years, the Company
has been substantially dependent upon borrowings to finance its operations. The
Company currently has a $30.0 million credit facility with a banking group. As
of December 31, 1996, the Company was not in compliance with certain
requirements of the credit facility, at which date $28.1 million was
outstanding. The banking group has agreed not to accelerate the due date of the
credit facility prior to its maturity date of August 18, 1997, assuming the
Company's continued compliance with the terms of a new agreement entered into on
March 31, 1997. Borrowings under the new agreement may not exceed $28.1 million.
Management's estimates of the cash requirements to fund operating, investing and
financing activities in 1997 will require replacement of the funds currently
available under the credit facility. Without the availability of a sufficient
credit facility, the Company is susceptible to severe cash shortages which may
impact its ability to operate.
The Company is exploring alternative lending and other
financial arrangements such as equity financing and strategic partnering
agreements to provide for the Company's working capital and cash requirements.
There can be no assurance, however, that any such arrangements will be available
on acceptable terms or at all. In addition, management has instituted programs
designed to reduce costs and improve performance. Further, management is
considering selling non-strategic assets to generate liquidity. There can be no
assurance
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however, that such programs, actions and arrangements will be consummated or, if
consummated, will provide the working capital and cash required. In addition,
unless converted, the Company will be required to repay in December 1997 up to
$650,000 of any 9% Notes that remain outstanding as of such date.
Product Concentration. Approximately 60% of the Company's net
sales during 1996 were from sales of its automated wet stations. Should sales of
automated wet stations decline, the Company's results of operations would be
materially adversely affected. The ability of the Company to diversify its
operations through the modification and enhancement of its existing system or
through the introduction of new products is dependent upon the success of the
Company's continuing research and development activities. No assurance can be
given that the Company will be successful in its development efforts or that any
new products or improvements will achieve sustained market acceptance.
Customer Concentration. Sales of the Company's products to one
customer accounted for 13% of the Company's total sales for 1996 and sales to a
different customer accounted for 11% of the Company's total sales in 1995.
Accounts receivable due from three customers represented 34% of consolidated
receivables as of December 31, 1996. There is no indication that customer
concentration will decrease in the foreseeable future. In the event any of these
or other significant customers cancel or delay orders or are unable to make
payment, the Company's operating results and financial condition could be
materially adversely affected.
Competition and Technological Change. The development of
semiconductor manufacturing equipment is characterized by rapidly advancing
technology, and the Company encounters intense competition in the development
and marketing of its products, particularly from several major Japanese
companies. Many of the Company's competitors have substantially greater
financial resources than the Company. The future success of the Company will
depend in large part upon its ability to keep pace with advancing semiconductor
manufacturing technology and industry standards. In this regard, rapid changes
have occurred, and are likely to continue to occur, as semiconductor devices
become more sophisticated. To remain competitive, the Company will have to
demonstrate its ability to produce sufficiently sophisticated and reliable
manufacturing equipment at competitive prices. There can be no assurance that
the Company's products or development efforts will not be rendered obsolete by
research efforts and technological advances made by others.
Fluctuations in the Semiconductor Market. The semiconductor
industry is subject to short-term market fluctuations and is susceptible to
periodic downturns or shipment delays, which often have an exaggerated effect on
manufacturers of semiconductor production equipment. Although the Company has
historically targeted its products to advanced future generation manufacturers
which, generally, have been less sensitive to short-term market fluctuations,
the Company has experienced a softening of demand which has lead to reduced
sales and pricing pressures. Future operations of the Company may, therefore, be
dependent in large part on the level of market demand for advanced integrated
circuit devices, particularly more sophisticated devices, and the resulting
capital expenditures of semiconductor manufacturing companies purchasing
fabrication products.
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Lack of Patent Protection. Although the Company has certain
patents and has applied for other patents with respect to certain of its
products, there can be no assurance that all of the Company's proprietary
technology will be effectively protected by patents. Despite the protection
provided by such patents, it may be possible for competitors to copy one or more
aspects of the Company's products or obtain information that the Company regards
as proprietary. Furthermore, there can be no assurance that others will not
independently develop products similar to those sold by the Company. Although
the Company believes that the products sold by it do not infringe upon the
patents or violate proprietary rights of others, it is possible that such an
infringement or violation may occur. In the event the products sold by the
Company are deemed to infringe upon the patents or proprietary rights of others,
the Company could be required to modify its products or obtain a license for the
manufacture or sale of such products. There can be no assurance that, in such an
event, the Company would be able to do so in a timely manner, upon acceptable
terms and conditions, or at all, and the failure to do any of the foregoing
could have a material adverse effect upon the Company. In addition, the Company
could become liable for damages in the event its products were deemed to
infringe upon the patents or proprietary rights of others, which could also have
a material adverse effect on the Company. Moreover, there can be no assurance
that the Company will have the financial or other resources necessary to enforce
or defend a patent infringement or a proprietary rights violation action.
Security Interests; Restrictive Covenants. The Company has
granted security interests with respect to substantially all of its assets to
secure its indebtedness under its current credit facility. In the event of a
default due to non-compliance with the covenants under the credit facility and
the secured lender exercises its rights thereunder, such secured lender could
declare the Company's indebtedness to be immediately due and payable and
foreclose on the assets securing the defaulted indebtedness. Moreover, to the
extent that substantially all of the Company's assets continue to be pledged to
secure outstanding indebtedness, such assets will not be available to secure
additional indebtedness.
Reliance on Key Executives and Employees. The ability of the
Company to compete successfully in the future depends in large part on its
ability to recruit and maintain qualified executives and a technically competent
research and development staff. Competition for qualified executives and
research and development employees is intense. There can be no assurance that
the Company will be able to retain existing employees or that it will be able to
find, attract and retain qualified personnel on acceptable terms.
Control by Certain Stockholders. At March 31, 1997, David F.
Levy and James S. Molinaro, directors and executive officers of the Company,
beneficially owned shares with approximately 23% of the total voting power of
the Company's Common Stock and Preferred Stock. Accordingly, Messrs. Levy and
Molinaro are able to have substantial influence in the election of the Company's
Board of Directors and thereby the policies of the Company. Messrs. Levy and
Molinaro have entered into an agreement that provides for all of their shares of
Common Stock to be voted at their joint direction. In the event that Messrs.
Levy and Molinaro are unable to agree on how to vote their shares, they are to
appoint a special voting trustee to break the deadlock. If Messrs. Levy and
Molinaro are unable to agree on the designation of a special voting trustee, the
shares subject to the agreement will be voted in accordance with the vote of the
majority of shares of Common Stock not subject to the agreement.
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Shares Eligible for Future Sale. At March 31, 1997, the
Company had outstanding a total of 16,890,014 shares of Common Stock and
outstanding warrants, options and convertible securities entitling the holders
thereof to purchase or acquire an aggregate of 5,122,551 additional shares of
Common Stock. In addition, the 8% Notes may be, subject to certain conditions,
convertible into 2,349,197 shares of Common Stock. All outstanding shares are,
and all shares issuable upon the exercise of options and warrants (and the
conversion of any Preferred Stock or 9% Notes) will be, available for resale in
the public market without restriction (other than, as to the shares underlying
the Preferred Stock, 9% Notes and Warrants, a prospectus delivery requirement),
with the exception of an aggregate of 4,591,938 outstanding shares held by
affiliates of the Company and 1,122,750 shares issuable upon the exercise of
options or warrants held by such affiliates. In addition, if the 8% Notes become
convertible, the Company has undertaken to cause the 2,349,197 shares of Common
Stock issuable upon conversion to be available for resale in the public market
without restriction before January 31, 1998. If the outstanding options and
warrants are exercised, or the convertible securities are converted, the
stockholders of the Company will be subject to additional dilution.
Under Rule 144 promulgated under the Act, affiliates of the
Company are permitted to sell, every three months, in ordinary brokerage
transactions or in transactions directly with a market maker an amount equal to
the greater of one percent of the Company's outstanding Common Stock or the
average weekly trading volume during the four calendar weeks prior to the sale.
The sale of any substantial number of these shares could have
an adverse effect on the future market price of the Common Stock.
No Dividends. The Company does not anticipate paying any cash
dividends in the foreseeable future as earnings, if any, will be retained to
finance the Company's operations and to expand its business. Moreover, under the
Company's credit facility, the Company is restricted in its ability to declare
dividends.
Potential Anti-Takeover Effects of Delaware Law; Classified
Board; Possible Issuance of Additional Preferred Stock. Certain provisions of
Delaware law could delay or impede the removal of incumbent directors and could
make more difficult a merger, tender offer or proxy contest involving the
Company, even if such events could be beneficial to the interests of
stockholders. Such provisions could limit the price that certain investors might
be willing to pay in the future for shares of Common Stock. In addition, the
Company's Certificate of Incorporation provides that the Company's Board of
Directors is to be composed of three classes, with staggered three-year terms,
each class to contain as nearly as possible one-third of the whole number of
members of the Company's Board. The Company's stock option plans each provide
for immediate vesting of all then outstanding options upon the occurrence of a
"change of control" of the Company (as defined therein). The existence of a
classified board, as well as these option vesting provisions, may reduce the
Company's vulnerability to takeovers by other corporations or persons which, in
the judgment of the Company's Board, may not be in the best interests of the
Company's stockholders. However, the effect of a classified board and such
accelerated option vesting provisions may also serve to entrench the Company's
Board. Moreover, in addition to the shares of Preferred Stock outstanding,
shares of preferred stock may be issued by the Company's Board without
stockholder approval on such terms as the
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Company's Board may determine. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
such preferred stock that are or may be issued. Although the ability to issue
preferred stock may provide flexibility in connection with possible acquisitions
and other corporate purposes, such issuance may make it more difficult for a
third party to acquire, or may discourage a third party from acquiring, a
majority of the voting stock of the Company. The Company has no current plans to
issue any additional shares of preferred stock beyond the Preferred Stock being
acquired by the Buyers.
Forward Looking Statements. This Prospectus contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Exchange Act, and is subject to
the safe-harbor created by such sections. Such forward-looking statements
concern the Company's operations, economic performance and financial condition,
including in particular sales and the Company's financing arrangements. Such
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general economic
and business conditions; changes in customer preferences; competition; changes
in technology; changes in business strategy; the indebtedness of the Company;
quality of management, business abilities and judgment of the Company's
personnel; the availability, terms and deployment of capital; and various other
factors referenced in this Prospectus. The forward-looking statements are made
as of the date of this Prospectus, and the Company assumes no obligation to
update the forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking statements.
USE OF PROCEEDS
The Investor Warrants are exercisable at $14 per share and the
Commonwealth Warrants are exercisable at $10.375 per share, in each case subject
to adjustment upon certain changes in capitalization. If all of the Warrants are
exercised, the Company will receive proceeds of $1,583,500. The Proceeds from
any exercises of the Warrants will be added to the Company's working capital.
SELLING STOCKHOLDERS
The following table lists the names of the persons whose
shares of Common Stock are covered by this Prospectus (the "Selling
Stockholders"), and for each, the number of shares of Common Stock beneficially
owned at the commencement of this offering, the number of shares being offered
for sale and the number of shares to be owned after the offering.
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<TABLE>
<CAPTION>
No. of Shares
Owned at No. of Shares
Selling Commencement No. of Shares Owned After
Stockholder of Offering Being Offered Offering
- ----------- ----------- ------------- --------
<S> <C> <C> <C>
Henry Benach 53,250(1) 53,250 0
Home Associates 53,250(1) 53,250 0
Del Mintz 106,500(1) 106,500 0
Burton N. Lichten 14,200(1) 14,200 0
Robert L. Priddy 426,000(1) 426,000 0
Gallagher Trust(2) 355,000(1) 355,000 0
Michael and Shannon Acks 28,400(1) 28,400 0
Timothy P. Flynn 355,000(1) 355,000 0
Lewis H. and Peggy S. Jordan 284,000(1) 284,000 0
JF Shea Co., Inc. 284,000(1) 284,000 0
Michael S. Falk 37,200(3) 37,200 0
Shirley O'Neall 14,200(1) 14,200 0
John H. Robinson Trust 14,200(1) 14,200 0
Ronald B. Booth(4) 14,200(1) 14,200 0
Mitchell H. and Dorothea M.
Allee 28,400(1) 28,400 0
Sheldon Family Limited
Partnership 28,400(1) 28,400 0
Edward Jankowski 14,511(5) 14,511 0
S. Marcus Finkle 35,500(1) 35,500 0
David S. Lawi 7,100(1) 7,100 0
William C. Clement 14,511(5) 14,511 0
Gerald B. Cramer 42,600(1) 42,600 0
A.C. Israel Enterprises, Inc. 42,600(1) 42,600 0
Edward J. Rosenthal 21,300(1) 21,300 0
LAD Equity Partners 42,600(1) 42,600 0
CRIM Partners, L.P. 163,300(1) 163,300 0
CRIM Retirement Partners, L.P. 120,700(1) 120,700 0
CRIM Madison Partners, L.P. 21,300(1) 21,300 0
Salvatore Trupiano 7,100(1) 7,100 0
Jeffrey P. and Deborah F. Bash 14,200(1) 14,200 0
Barry W. Ridings(4) 78,200(6) 14,200 64,000
Rochester Fund Series 65,298(7) 65,298 0
Commonwealth Associates 54,865(8) 54,865 0
Alvin Mirman 15,000(8) 15,000 0
Keith Rosenbloom 5,135(8) 5,135 0
Robert O'Sullivan 1,000(8) 1,000 0
Beth Lipman 1,000(8) 1,000 0
Allan Berman 575,000 575,000 0
Total 3,431,020 3,375,020 64,000
========= ========= ======
</TABLE>
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(1) Represents shares issuable upon conversion of Preferred Stock.
(2) Maurice S. Gallagher, Jr., a trustee of the Gallagher Trust, is a
director of the Company.
(3) Includes 14,200 shares issuable upon conversion of Preferred Stock and
23,000 shares issuable upon exercise of the Commonwealth Warrants.
(4) Messrs. Booth and Ridings are directors of the Company.
(5) Includes 8,511 shares issuable upon conversion of 9% Notes and 6,000
shares issuable upon exercise of Investor Warrants.
(6) Includes 14,200 shares issuable upon conversion of Preferred Stock and
options to purchase 8,000 shares of Common Stock.
(7) Includes 38,298 shares issuable upon conversion of 9% Notes and 27,000
shares issuable upon exercise of Investor Warrants.
(8) Represents shares issuable upon exercise of the Commonwealth Warrants.
PLAN OF DISTRIBUTION
The sale of the shares of Common Stock covered by this
Prospectus by the Selling Stockholders may be effected from time to time in one
or more transactions in the over-the-counter market, in negotiated transactions
or a combination of such methods of sale, at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market prices or
at negotiated prices. The Selling Stockholders may effect such transactions by
selling the shares directly to purchasers or to or through broker-dealers which
may act as agents or principals. Such broker-dealers may receive compensation in
the form of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or the purchasers of the shares for whom broker-dealers may act
as agent or to whom they may sell as principals or both (which compensation as
to a particular broker-dealer may be less than or in excess of customary
commissions). Under certain circumstances, the Selling Stockholders and any
broker-dealers that act in connection with the sales of the shares may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act
of 1933, and any commissions received by them and any profit on the sale of the
shares as principals may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933.
The Company will not receive any of the proceeds from the sale
of the shares of Common Stock offered hereby.
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LEGAL MATTERS
Cozen and O'Connor, Philadelphia, Pennsylvania, counsel to the
Company, has rendered its opinion that the shares of Common Stock offered hereby
are legally issued, fully paid and non-assessable. Richard J. Busis, a senior
member of Cozen and O'Connor, is a director of the Company.
EXPERTS
The consolidated balance sheets of SubMicron Systems
Corporation as of December 31, 1995, the related consolidated statements of
operations, stockholders' equity and cash flows for the year then ended, and the
related schedules as of December 31, 1995, incorporated by reference in this
Prospectus, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said reports. The consolidated financial statements of
SubMicron Systems Corporation and the related schedule appearing in SubMicron
Systems Corporation's Annual Report (Form 10-K) for the year ended December 31,
1996, have been audited by Ernst & Young LLP, independent auditors, to the
extent indicated in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements and related
schedule are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
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