Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1996
Commission file number 33-11459
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
____________________________________________________________________
(Exact name of registrant as specified in its Articles of
Incorporation)
DELAWARE 43-1432378
___________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
201 Progress Parkway
Maryland Heights, Missouri 63043
___________________________________________________________________
(Address and principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
________________________
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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.
YES X NO
____ ____
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of filing date:
COMMON STOCK, $1.00 Par Value - 500 Shares
The Registrant meets the conditions set forth in General
Instruction J(1)(a) and (b) of Form 10-K and is therefore filing
this form with the reduced disclosure format.
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
TABLE OF CONTENTS
PART I Page
Item 1. Business............................... 3
Item 2. Properties............................. 3
Item 3. Legal Proceedings...................... 3
Item 4. Submission of Matters to a Vote
of Security Holder.................... 3
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters........... 4
Item 6. Selected Financial Data................ 4
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 4
Item 8. Financial Statements and Supplementary
Data.................................. 5
Item 9. Change in and Disagreements with Accountants
on Accounting and Financial Disclosure... 10
PART III
Item 10.Directors and Executive Officers of the
Registrant................................ 11
Item 11.Executive Compensation.................... 11
Item 12.Security Ownership of Certain Beneficial Owners and
Management............................... 11
Item 13.Certain Relationships and Related
Transactions.............................. 11
PART IV
Item 14.Exhibits, Financial Statement Schedules and
Reports on Form 8-K.......................... 12
SIGNATURES........................................... 13
INDEX TO EXHIBITS.................................... 14
PART I
Item 1. BUSINESS
Cornerstone Mortgage Investment Group II, Inc. (the"Company") was
incorporated in the state of Delaware on December22, 1986, as a
wholly owned, limited purpose subsidiary of Edward
D. Jones & Co., L.P. ("EDJ"), a Missouri limited partnership.
The Company was organized for the purpose of investing
in collateral to be purchased with the proceeds of Mortgage-Backed
Securities collateralized by such collateral. EDJ organized the
Company and currently owns all the issued and outstanding capital
stock of the Company. The Company does not intend to engage in any
business or investment activities other than issuing and selling
Mortgage-Backed Securities and acquiring, owning, holding and
assigning collateral and investing cash balances on an interim
basis in high quality, short-term securities some or all of which
may be purchased from or through EDJ. Article 3 of the Company's
Certificate of Incorporation limits the Company's business and
investment activities to the above purposes and to any activities
incidental and necessary or convenient for such purposes. Article
7 of the Company's Certificate of Incorporation prohibits the
Company, without the consent of the trustee under any indenture
pursuant to which Mortgage-Backed Securities are issued, from (1)
dissolving or liquidating, in whole or in part; (2) merging or
consolidating with another corporation other than a corporation
wholly owned, directly or indirectly, by EDJ or (3) amending
Articles 3 or 7 of the Company's Certificate of Incorporation.
Item 2. PROPERTIES
The Company has no physical properties appropriate for
description herein.
Item 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Omitted pursuant to General Instruction J(2)(c) of Form 10-K.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
As of filing date, all outstanding shares of the
Company's common stock are owned by EDJ and are not traded
on any stock exchange or in the over-the-counter market.
Item 6. SELECTED FINANCIAL DATA
Omitted pursuant to General Instruction J(2)(c) of Form 10-
K.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Cornerstone II has not issued Mortgage-Backed Securities
since 1991. Cornerstone II's operations are directed toward
maintenance of outstanding issues.
Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements and Supplementary Financial
Data
Page No.
Report of Independent Public Accountants........ 6
Balance Sheet as of December 31, 1996 and 1995.. 7
Notes to Balance Sheet.......................... 8
All schedules are omitted because they are not required,
inapplicable or the information is included in the balance sheet or
notes thereto.
Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Cornerstone Mortgage Investment Group II, Inc.:
We have audited the accompanying balance sheet of Cornerstone
Mortgage Investment Group II, Inc. (a Delaware corporation and
wholly owned subsidiary of Edward D. Jones & Co., L.P.) as of
December 31, 1996 and 1995. This financial statement is the
responsibility of the Company's management. Our responsibility is
to express an opinion on this financial statement based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
balance sheet is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the balance sheet referred to above presents
fairly, in all material respects, the financial position of
Cornerstone Mortgage Investment Group II, Inc. as of December 31,
1996 and 1995, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
February 21, 1997
Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
BALANCE SHEET
AS OF DECEMBER 31, 1996 AND 1995
1996 1995
__________ __________
ASSETS
CASH $ 500 $ 500
========== ==========
STOCKHOLDER'S EQUITY
COMMON STOCK - $1.00 par value, 150,000
shares authorized,500 issued and
outstanding $ 500 $ 500
========== ==========
The accompanying notes are an integral
part of this balance sheet.
Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
NOTES TO BALANCE SHEET
DECEMBER 31, 1996 AND 1995
1. GENERAL
Cornerstone Mortgage Investment Group II, Inc. (``Cornerstone II'')
is a Delaware corporation and a wholly owned subsidiary of Edward
D. Jones & Co., L.P. ("EDJ''), a Missouri limited partnership.
Cornerstone II was incorporated on December 22, 1986, for the
limited purpose of structuring and selling mortgage-backed
securities (the ''Certificates''), which are backed by Government
National Mortgage Association (GNMA), Federal Home Loan Mortgage
Corporation (FHLMC) and Federal National Mortgage Association
(FNMA) Securities (collectively the ``Collateral'').
All costs related to the organization of Cornerstone II have been
absorbed by EDJ. In addition, EDJ has paid all offering expenses
and assumed all future revenues and expenses in connection with
prior security transactions. Due to the absence of revenue or
expense generating transactions, no income statement is presented.
The balance of stockholder's equity consists solely of common stock
issued on December 30, 1986; therefore, no statement of
stockholder's equity is presented. All funds were obtained from
capital transactions. Therefore, no statement of cash flows is
presented.
2. SECURITY TRANSACTIONS
Cornerstone II last offered mortgage-backed securities in 1991; no
securities were issued during 1996, 1995 or 1994.
Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
Since Cornerstone II has surrendered control of the future economic
benefit in the collateral, these transactions have been accounted
for as sales and both the Certificates and the Collateral have been
eliminated from Cornerstone II's balance sheet.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone Mortgage Investment Group
II, Inc. are $99,014,500 and $99,431,599 as of December 31, 1996.
Item 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There was no change of accountants or disagreement with
accountants on any matter of accounting principles or financial
disclosure.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Omitted pursuant to General Instruction J(2)(c) of Form 10-
K.
Item 11. EXECUTIVE COMPENSATION
Omitted pursuant to General Instruction J(2)(c) of Form 10-
K.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Omitted pursuant to General Instruction J(2)(c) of Form 10-
K.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Omitted pursuant to General Instruction J(2)(c) of Form 10-
K.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
a. The following documents are filed as part of this report:
1. Financial Statements:
Report of Independent Public Accountants
Balance Sheet as of December 31, 1996 and 1995
Notes to Balance Sheet
2. Financial Statement Schedules:
All schedules are omitted because they are not
required, inapplicable, or the information is included in
the balance sheet or notes thereto.
3. Exhibits:
Certificate of Incorporation of the Company, as
amended (incorporated by reference to Exhibit 3(a) to
Registration Statement on Form S-11, as amended, File No.
33-11459).
Bylaws of the Company as amended (incorporated by
reference to Exhibit 3(b) to Registration Statement on
Form S-11, as amended, File No. 33-11459).
Deposit Agreement dated as of February 20, 1987,
between the Company, as Depositor, and Boatmen's Trust
Company of St. Louis, as Custodian (incorporated by
reference to Exhibit 2 to the Current Report on Form 8-K
filed on March 6, 1987).
Trust Agreement dated as of February 20, 1987, between
the Company, as Depositor, and Boatmen's Trust Company of
St. Louis, as Trustee (incorporated by reference to
Exhibit 3 to the Current Report on Form 8-K filed on
March 6, 1987).
Trust Agreement dated as of February 20, 1987, between
the Company, as Depositor, and Boatmen's Trust Company of
St. Louis, as Trustee (incorporated by reference to
Exhibit 4 to the Current Report on Form 8-K filed on
March 6, 1987).
b. No reports on Form 8-K were filed in the fourth quarter of
1996.
c. Exhibits filed as part of this report are included in Item
(14)(a)(3) above.
d. Financial Statement Schedules required by Regulation S-X are
included as described in Part II Item 8 above.
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, on this 26th day of March, 1997.
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
(Registrant)
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.
/s/ John C. Heisler Chairman of the Board,
John C. Heisler Chief Financial Officer,
Chief Accounting
Officer and Director March 26, 1997
/s/ Philip R. Schwab President, Chief
Philip R. Schwab Executive Officer
and Director March 26, 1997
/s/ John Beuerlein Secretary and Director March 26, 1997
John Beuerlein
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit Page
3.1 Certificate of Incorporation of the
Company, as amended (incorporated by
reference to Exhibit 3(a) to Registration
Statement on Form S-11, as amended,
File No.
33-11459).............................. *
3.2 Bylaws of the Company as amended
(incorporated by reference to Exhibit 3(b)
to Registration Statement on Form S-11,
as amended, File No. 33-11459).......... *
4.1 Deposit Agreement dated as of February 20,
1987, between the Company, as Depositor,
and Boatmen's Trust Company of St. Louis,
as Custodian (incorporated by reference
to Exhibit 2 to the Current Report on Form
8-K filed on March 6, 1987)............. *
4.2 Trust Agreement dated as of February 20,
1987, between the Company, as Depositor,
and Boatmen's Trust Company of St. Louis,
as Trustee (incorporated by reference to
Exhibit 3 to the Current Report on Form
8-K filed on March 6, 1987).............. *
4.3 Trust Agreement dated as of February 20,
1987, between the Company, as Depositor,
and Boatmen's Trust Company of St. Louis,
as Trustee (incorporated by reference to
Exhibit 4 to the Current Report on Form
8-K filed on March 6, 1987).............. *
______________________
*Incorporated by reference
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, on this 26th day of March, 1997.
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
(Registrant)
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.
________________________ Chairman of the Board,
John C. Heisler Chief Financial Officer,
Chief Accounting
Officer and Director March 26, 1997
________________________ President, Chief
Philip R. Schwab Executive Officer
and Director March 26, 1997
________________________ Secretary and Director March 26, 1997
John Beuerlein
10
11