UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 2002, or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ____________ to
_______________
Commission File No.: 33-73748
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FUND AMERICA INVESTORS CORPORATION II
-------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1218906
----------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer identification
incorporation or organization) number)
6400 S. Fiddler's Green Circle, Suite 1200B, Englewood, Colorado 80111
-----------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number including area code: (303) 290-6025
---------------
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. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer.
[ ] Yes [X] No
State the aggregate market value of the voting stock held by non-affiliates of
the registrant: As of December 31, 2002: $0.00.
The number of shares outstanding of the Registrant's $0.01 par value common
stock, as of March 28, 2003 was 349,000 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
ITEM 1. BUSINESS
Fund America Investors Corporation II (the "Company") was incorporated
in the State of Delaware on December 14, 1992 as a limited purpose finance
corporation. The Company was established to engage in the issuance and
administration of Collateralized Mortgage Obligations (the "Bonds") and Asset-
Backed Certificates (the "Certificates", and together with the Bonds, the
"Securities"). The Securities are issued in one or more series, from time to
time, by the Company as described in the prospectus and series-related
prospectus supplement of the Company's latest effective registration statement.
The Securities of each series can be issued by the Company, but typically the
Company forms a separate trust to act as the issuer solely for the purpose of
issuing a series. A series of Securities that include Bonds will be issued
pursuant to an indenture and will represent indebtedness of the trust or
issuer. A series of Securities that include Certificates will represent
beneficial ownership in the related trust or issuer. The sole source of
payments to Bondholders or Certificateholders within each series of Securities
is produced from the related trust property. The trust property is generally
comprised of mortgage loans and/or mortgage-related assets as described in each
of the series' related prospectus supplements.
The Company may not, either directly or indirectly through a beneficially owned
trust, engage in any business or investment activity other than to; (1) issue
and sell Securities; (2) purchase, own, hold, pledge or sell collateral or other
mortgage-related assets; (3) invest and maintain cash balances on an interim
basis in high quality short-term investments; and (4) engage in other activities
which are necessary or convenient to accomplish the foregoing and are incidental
thereto.
On January 1, 2002, the Company had a total of $561 million registered and
unissued Securities on its Registration Statement No. 333-33823. During the
year ended December 31, 2002, no Securities were issued. From inception to
date, the Company has issued nineteen series of Securities which aggregate
$2.4 billion in original issued principal. The Company does not have any
further obligations in connection with the issuance of these Securities.
Under accounting principles generally accepted in the United States of
America, these issuances are considered to be a direct sale of the
collateral.
The Company's fifth Registration Statement on Form S-3 was filed on September
30, 1998 with the Securities and Exchange Commission. The purpose of this
filing was to register an additional amount of Securities and to merge the
Company's Effective Registration Statement No. 333-33823, thereby increasing
the total amount of Securities that can be issued by the Company. As of
December 31, 2002, this Registration Statement was not effective and was
subject to completion or amendment. The Company intends to file one or more
further amendments to complete this Registration Statement and to bring it
effective.
Pursuant to Rule 3-11 of Regulation S-X, if a registrant is an inactive entity
as defined in this rule, the financial statements required by this regulation
for purposes of reports pursuant to the Securities Exchange Act of 1934 may be
unaudited. The Company meets all the conditions as defined for an inactive
entity under this rule and accordingly has elected to file unaudited financial
statements contained herein for the current year-end, December 31, 2002.
ITEM 2. PROPERTIES The Company has no material physical properties.
ITEM 3. LEGAL PROCEEDINGS None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders during the fourth quarter of
the fiscal year ended December 31, 2002.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no established public trading market for the Company's common stock and
no dividends have been declared or paid. All of the Company's common stock is
owned by a sole shareholder.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31,
----------------------------------------------------
Unaudited
2002 2001 2000 1999 1998
-------- -------- -------- -------- --------
Income Statement Data:
Revenue $ 44,192 $ 30,008 $ 94,956 $201,155 $370,890
Net(loss)income $ 7,731 $ (8,072) $ 51,682 $160,561 $196,084
Net(loss)income per
Share of common stock (1) (1) (1) (1) (1)
Balance Sheet Data:
Total assets $285,367 $261,636 $257,353 $270,526 $475,180
Shareholder's
Equity $258,367 $261,636 $257,208 $270,526 $474,965
(1) Not presented, as all shares of common stock are held by a sole
shareholder.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
1. General
As of December 31, 2002, the Company has issued nineteen series of
registered Pass-Through Securities aggregating $2,439,812,829 in initial
amount for all the issuances. Nine series of Bonds remain outstanding on
December 31, 2002. The following list consists of the outstanding series
shown with the initial issuance amounts.
Series Amount Collateral
- ------ ------------ -------------------------------------------------
1993-A $262,435,000 Trust consisting primarily of adjustable rate one-
to four-family, first lien mortgage loans
1993-B $ 77,409,000 Trust consisting primarily of adjustable rate one-
to four-family, first lien mortgage loans
1993-C $319,000,000 Trust consisting primarily of Federal National
Mortgage Association and Federal Home Loan
Mortgage Corporation Securities; private mortgage
backed securities including certain residual
interest securities; principal component of bonds
issued by the Resolution Funding Corporation
1994-A $ 44,599,100 Trust consisting primarily of adjustable rate one-
to four-family, first lien mortgage loans
1997-NMC1 $121,765,000 Trust assets consisting primarily of adjustable
rate mortgage loans that are secured by first
lien mortgages on one- to four-family residential
property
1998-A $ 60,373,853 Trust consisting primarily of one Pooled Fannie
Mae Certificate, two Pooled Freddie Mac
Certificates and one Pooled Non-Agency
Certificate
1998-B $ 50,703,106 Trust consisting primarily of three Pooled Fannie
Mae Certificates, one Pooled Ginnie Mae Certi-
ficate, two Pooled Freddie Mac Certificates and
one Pooled Non-Agency Certificate
1998-NMC1 $236,526,000 Trust assets consisting primarily of adjustable
rate mortgage loans that are secured by first
lien mortgages on one- to four-family residential
properties
2000-1 $ 3,216,000 Trust consisting primarily of Federal National
Mortgage Association and Federal Home Loan Mortgage
Corporation Securities
2. Liquidity and Capital Resources
The Company expects to fund ongoing operations from its cash balances,
revenues derived from the issuance of Securities, and if necessary, from
loans or capital contributions from its sole shareholder. The current cash
position will adequately fund overhead costs over the next twelve months.
Capital funding has and will continue to be provided by the sole shareholder
to cover any additional unanticipated costs on a monthly basis until the
Company generates sufficient revenue. The funding source for additional
capital costs relating to the registration of securities will be determined
when the funding is required and will depend on the cash position at that
time.
3. Results of Operations
The Company does not have any significant assets other than cash held for
operations and capitalized deferred offering costs. Major operating
activity is initiated from the issuance of Securities or the preparation in
registering Securities to be issued. Costs incurred with registering
Securities are capitalized until such time as the Securities are issued in
an offering.
Net income may fluctuate from period to period based on the use of the
Company's registered and unissued Securities. The Company generally charges
the issuer of a series of Securities a flat fee and a proportionate share of
deferred costs associated with its registration statement.
The Company reported net income for the year ended December 31, 2002 of
$7,731 compared to net loss of $8,072 for the year ended December 31, 2001
and net income of $51,682 for the year ended December 31, 2000. The Company
reported a net income for the year ended December 31, 2002 versus a net loss
for the year ended December 31, 2001 because the call option income in the
amount of $44,166 earned on the sale of the call rights to Fund America
Investors Corporation II Series 1993-J in 2002 exceeded normal operating
expenses. In 2001, normal operating expenses exceeded the call option
income in the amount of $30,000 received on the sale of Fund America
Investors Corporation II, Series 1993-E call rights. The income reported
for December 31, 2000 was the result of net issuance fees earned of $69,895
and call option income of $18,000 received when the call rights on Fund
America Investors Corporation II, Series 1993-H were sold. Other variables
affecting comparable results of operations are typically the number of
securitizations completed and/or impairments of assets.
4. Forward Looking Statements
The statements contained in this Item 7 and Item 7A that are not historical
facts, including, but not limited to, statements that can be identified by
the use of forward-looking terminology such as "may," "will," "expect,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology, are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
and involve a number of risks and uncertainties. The actual results of the
future events described in such forward-looking statements could differ
materially from those stated in such forward-looking statements. Among the
factors that could cause actual results to differ materially are: the
market for mortgage-backed securities, competition, government regulation
and possible future litigation.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Securities issued by the Company are either debt securities or securities
which evidence beneficial ownership interest in designated trusts
established to facilitate the transfer of trust asset payments to the
Bondholders who hold such debt securities or to the Certificateholders who
hold such beneficial ownership interests. Assets securing payments to
Bondholders or Certificateholders are pledged or sold to designated trusts
and are not assets of the Company. Additionally, Bonds and Certificates
that are issued either by the Company or a trust formed by the Company do
not represent an ownership interest in or an obligation of the Company.
Disclosures required in this Item 7A are intended to clarify a registrant's
exposures to market risk associated with activities in derivative financial
instruments, other financial instruments, and derivative commodity
instruments. The purpose of this section is to disclose the material effects
on earnings, fair values, and cash flows that are inherent to potential
market risk exposure. Potential market risk associated with Securities
issued under the Company's registration statement will not have a material
effect on the Company's earnings or cash flow since the Securities do not
represent an interest in or an obligation of the Company. In addition, the
Company has no public common equity; all common stock of the Company is held
by one shareholder. Therefore, material effects of potential market risk
exposure on Securities issued from the Company will not have any significant
impact on the Company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
FUND AMERICA INVESTORS CORPORATION II
Balance Sheets
December 31,
--------------------------
Unaudited
2002 2001
--------- ---------
Assets
Cash and cash equivalents $ 28,796 $ 5,071
Deferred offering costs, net 256,361 256,361
Prepaid expenses 210 204
--------- ---------
Total assets $ 285,367 $ 261,636
========= =========
Liabilities - accounts payable $ - $ -
Commitments and Contingencies
Shareholder's equity
Common stock, par value $.01
per share; 1,000,000 shares
authorized; 349,000 shares
issued and outstanding 3,490 3,490
Additional paid-in capital 504,010 488,010
Shareholder distributions (1,874,798) (1,874,798)
Retained earnings 1,652,665 1,644,934
--------- ---------
Total shareholder's equity 285,367 261,636
--------- ---------
Total liabilities and
shareholder's equity $ 285,367 $ 261,636
========= =========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
Year Ended December 31,
---------------------------------
Unaudited
2002 2001 2000
--------- --------- ---------
Revenue
Other bond income $ 44,166 $ 30,000 $ 18,000
Issuance fees - - 76,253
Interest 26 8 703
--------- --------- ---------
Total revenue 44,192 30,008 94,956
--------- --------- ---------
Expenses
Amortization of deferred
offering costs - - 1,253
General and administrative 12,461 14,080 18,021
Management fees 24,000 24,000 24,000
--------- --------- ---------
Total expenses 36,461 38,080 43,274
--------- --------- ---------
Net income(loss) $ 7,731 $ (8,072) $ 51,682
========= ========= =========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II
Statements of Shareholder's Equity
Years Ended December 31, 2002, 2001 and 2000
Common Stock Addi- Share-
-------------- tional holder
Number of Par Paid in Distrib- Retained
Shares Value Capital utions Earnings Totals
-------- -------- -------- ------------ ---------- ---------
Balances at
January
1, 2000 349,000 $3,490 $445,510 $(1,779,798) $1,601,324 $270,526
Shareholder
distribution - - - (70,000) - (70,000)
Capital
contribution - - 5,000 - - 5,000
Net income - - - - 51,682 51,682
------- ------ -------- ---------- ---------- --------
Balances at
December
31, 2000 349,000 3,490 450,510 (1,849,798) 1,653,006 257,208
Shareholder
distribution - - - (25,000) - (25,000)
Capital
contribution - - 37,500 - - 37,500
Net loss - - - - (8,072) (8,072)
------- ------ -------- ---------- --------- --------
Balances at
December
31, 2001 349,000 3,490 488,010 (1,874,798) 1,644,934 261,636
Capital
contribution - - 16,000 - - 16,000
Net income - - - - 7,731 7,731
------- ------ -------- ---------- ---------- --------
Unaudited
Balances at
December
31, 2002 349,000 $3,490 $504,010 $(1,874,798) $1,652,665 $285,367
======= ====== ======== ========== ========== ========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II
Statements of Cash Flows
Year Ended December 31,
--------------------------------------------
Unaudited
2002 2001 2000
---------- ---------- ----------
Operating activities:
Net income(loss) $ 7,731 $ (8,072) $ 51,682
Adjustments to reconcile net
income(loss) to
Net cash provided by(used in)
operating activities:
Amortization of
deferred offering costs - - 1,253
Changes in operating
assets and liabilities:
Accounts payable - (145) 145
Prepaid expenses (6) (9) (8)
--------- --------- ---------
Net cash provided by(used in
operating activities: 7,725 (8,226) 53,072
Investing activities:
Additions to deferred
offering costs - - (2,788)
Financing activities:
Capital contributions 16,000 37,500 5,000
Shareholder distributions - (25,000) (70,000)
--------- --------- ---------
Net cash provided by(used in)
financing activities: 16,000 12,500 (65,000)
--------- --------- ---------
Net increase(decrease)in cash
and cash equivalents 23,725 4,274 (14,716)
Cash and cash equivalents
at beginning of year 5,071 797 15,513
--------- --------- ---------
Cash and cash equivalents
at end of year $ 28,796 $ 5,071 $ 797
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II
Notes to Financial Statements
For the Years Ended December 31, 2002 unaudited, 2001 and 2000
Note 1. The Company
Fund America Investors Corporation II (the "Company") was incorporated in
the State of Delaware on December 14, 1992 as a limited purpose finance
corporation. The Company was established to engage in the issuance and
administration of Collateralized Mortgage Obligations (the "Bonds") and
Asset-Backed Certificates (the "Certificates", and together with the
Bonds, the "Securities"). The Securities are issued in one or more
series, from time to time, by the Company in accordance with the
provisions in the prospectus and series-related prospectus supplement of
the Company's latest effective registration statement.
The Securities of each series can be issued by the Company, but typically
the Company forms a separate trust to act as the issuer solely for the
purpose of issuing a series. A series of Securities that include Bonds
will be issued pursuant to an indenture and will represent indebtedness of
the trust or issuer. A series of Securities that include Certificates
will represent beneficial ownership in the related trust or issuer. The
sole source of payments to Bondholders or Certificateholders within each
series of Securities is produced from the related trust property. The
property or assets within each trust are comprised of mortgage-related
assets as defined in each of the series' related prospectus supplements.
The Company will not, either directly or indirectly through a beneficially
owned trust engage in any business or investment activity other than to;
(1) issue and sell Securities; (2) invest cash balances on an interim
basis in high quality short-term investments; (3) purchase, own, hold,
pledge or sell collateral or other mortgage-related assets; (4) engage in
other activities which are necessary or convenient to accomplish the
foregoing and are incidental thereto.
The Company expects to fund ongoing operations from its cash balances,
revenues derived from the issuance of Securities, and if necessary, from
loans or capital contributions from its sole shareholder. The current cash
position will adequately fund overhead costs over the next twelve months.
Capital funding has and will continue to be provided by the sole
shareholder to cover additional unanticipated costs on a monthly basis
until the Company generates sufficient revenue. The funding source for
additional capital costs relating to the registration of securities will
be determined when the funding is required and will depend on the cash
position at that time.
Pursuant to Rule 3-11 of Regulation S-X, if a registrant is an inactive
entity as defined in this rule, the financial statements required by this
regulation for purposes of reports pursuant to the Securities Exchange Act
of 1934 may be unaudited. The Company meets all the conditions as defined
for an inactive entity under this rule and accordingly has elected to file
unaudited financial statements contained herein for the current year-end,
December 31, 2002.
Note 2. Summary of Significant Accounting Policies
In connection with the issuance of Securities, the Company generally will
enter into a purchase agreement with the seller of the mortgage assets or
the collateral. Simultaneously, the collateral is conveyed, by the
Company, to the trust who issues the Securities, pursuant to a pooling and
servicing agreement. Correspondingly, the purchase price for the
Collateral payable to the seller is netted out from the proceeds realized
from the sale of the Securities. Therefore, the Company's financial
statements reflect the net result of the issuance and not the gross
amounts attributable to the purchase price of the collateral and the sales
proceeds from the issuance of the Securities.
Note 2. Summary of Significant Accounting Policies (continued)
Costs of registering securities are deferred. As the Securities are
issued from the registered securities, costs are charged to operations.
The charge is based on the ratio of bonds issued to securities registered
but previously unissued.
Fees from the Security issuance transactions are recognized as revenue
when the transactions close. All expenses of the transaction, including a
portion of deferred offering costs, are charged to operations.
Other bond income represents fees received upon the sale of call options
on CMO issuances. Such income is recognized at closing when call option
rights are transferred.
For purposes of reporting cash flows, cash and cash equivalents include
demand deposit accounts.
Net income per share is not presented, as all shares of common stock are
held by a sole shareholder.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported
amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Certain reclassifications have been made in the 2000 financial statements
to conform to the classifications used in 2001. These reclassifications
had no effect on the Company's financial position or net income.
Statement of Financial Accounting Standards ("SFAS") No. 107 "Disclosure
about Fair Value of Financial Instruments," requires disclosure of fair
value information about financial instruments, whether or not recognized
in the balance sheet. The Company's financial instruments include: cash
and cash equivalents, and accounts payable. The carrying amount of these
assets and liabilities approximates their fair value.
The Company evaluates long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. If a long-lived asset is identified as impaired, the
value of the asset must be reduced to its fair value. The Company's
deferred offering costs are considered long-lived assets. As of December
31, 2002 and 2001, management determined that there was no impairment of
the Company's long-lived assets.
SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information," requires the disclosure of operating segments and the
geographic location of the Company. Management considers the Company's
business to presently comprise of a single operating segment, and all of
the Company's operations were concentrated in Englewood, Colorado.
Note 3. Income Taxes
Under S Corporation guidelines of the Internal Revenue Code, the Company
has elected to be treated substantially as a partnership for income tax
purposes. As a result, the sole shareholder reports any taxable income or
loss of the Company on his individual tax return. Accordingly, no
provision for federal income taxes has been recorded in the financial
statements.
Note 4. Related Party Transactions
The Company has engaged in related party transactions as discussed below.
Accordingly, the accompanying financial statements are not necessarily
indicative of the financial position that would exist or the results of
operations that would have occurred if the transactions had been with
unaffiliated entities.
The sole shareholder of the Company is also the sole shareholder, Chief
Executive Officer and Director of The Chotin Group Corporation. On
January 1, 1993, the Company entered into a Management Agreement with The
Chotin Group Corporation (the "Facilities Manager"). This agreement
remains in force until written termination of the agreement is presented
by either party. As of December 31, 2002, no such notice of termination
has been given or received by the Company. Under the terms of the
agreement, the Facilities Manager is required to provide facilities use
and other services necessary for the Company to manage its business
affairs. The management fees paid during each of the three years ended
December 31, 2002 were $24,000.
Note 5. CMO Information
At December 31, 2002 and 2001, the outstanding principal balance of the issued
Securities and the amount of publicly and privately issued securities were as
follows:
2002
- ------------------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
- ---------- ------------ ------------ -----------
1993-A $ 30,860,170 $ 28,130,101 $ 2,730,069
1993-B 6,436,653 3,829,549 2,607,104
1993-C 96,246,180 96,246,180 -
1994-A 1,737,792 1,515,746 222,046
1997-NMC1 3,282,868 3,282,868 -
1998-A 1,860,567 1,860,567 -
1998-B 13,782,353 13,782,353 -
1998-NMC1 8,365,851 8,365,851 -
2000-1 2,866,420 2,716,820 149,600
------------ ------------ -----------
Total $165,438,854 $159,730,035 $ 5,708,819
============ ============ ===========
2001
- ------------------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
- --------- ------------ ------------ -----------
1993-A $ 42,451,771 $ 39,428,564 $ 3,023,207
1993-B 7,899,830 4,986,472 2,913,358
1993-C 121,024,878 121,024,878 -
1993-J 6,012,789 5,683,621 329,168
1994-A 2,396,262 2,091,653 304,609
1997-NMC1 6,925,270 6,925,270 -
1998-A 6,238,859 6,238,859 -
1998-B 34,174,347 34,174,347 -
1998-NMC1 18,578,864 18,578,864 -
2000-1 2,876,320 2,726,720 149,600
------------ ------------ -----------
Total $248,579,190 $241,859,248 $ 6,719,942
============ ============ ===========
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Position Age
- ----------------- ---------------------------------------------- -----
Steven B. Chotin Director, Chairman and Chief Executive Officer 55
M. Garrett Smith Director 41
Helen M. Dickens Director and President 49
John L. Keane Vice President 52
Annel Henderson Treasurer 41
M. Sean Rowland Vice President 37
Jennifer M. Land Secretary 31
Steven B. Chotin, 55, has been a Director and the Chairman and Chief Executive
Officer of the Company since its inception. Mr. Chotin has been Chief
Executive Officer and sole shareholder of The Chotin Group Corporation, a
financial service firm, since July 1984. Mr. Chotin was a director of American
Southwest Financial Corporation and of American Southwest Finance Co., Inc.
from 1982 to 1994. Mr. Chotin may be deemed to be a "promoter" within the
meaning of Rule 405 under the Securities Act of 1933, as amended (the "Act").
M. Garrett Smith, 41, joined Pitkin Fuel Corporation out of Dallas, Texas in
January 2001 as it's Chief Financial Officer. Previously, Mr. Smith was Chief
Financial Officer at Stonebridge Technologies. Prior to Stonebridge, Mr. Smith
was Executive Vice President and Chief Financial Officer of Pioneer Natural
Resources Company. He also served as a Senior Vice President of Corporate
Acquisitions at Pioneer. Prior to joining Pioneer, Mr. Smith was a partner
with BTC Partners, a financial consultant to MESA, Inc.
Helen M. Dickens, 49, has been a Director of the Company since 1995, Vice
President and Secretary of the Company since 1989. Ms. Dickens is also
President and Chief Operations Officer of The Chotin Group Corporation.
Previously, Ms. Dickens held the position of Vice President along with Chief
Operations Officer at The Chotin Group Corporation, positions she has held
since 1989. Prior to joining The Chotin Group Corporation, Ms. Dickens served
as Assistant Corporate Secretary and Assistant to the Chairman of the Board and
President of Uniwest Financial Corp., a non-diversified savings and loan
holding company. Ms. Dickens received a Bachelor of Science degree from
Metropolitan State College with a Major in Accounting.
John L. Keane, 52, was appointed Vice President of the Company January 1, 2003.
Mr. Keane has also been with The Chotin Group Corporation since 1994, where he
has been the Executive Vice President since 2000. Prior to joining The Chotin
Group in 1992 and 1993 Mr. Keane was the owner and President of JK Business
Consulting, Inc., and from 1974 to 1992 he was employed by and a shareholder in
the certified public accounting firm of Lehman, Butterwick and Company, P.C.
Mr. Keane received a Bachelor of Science degree from Regis College (now
University) with a Major in Accounting, and a Juris Doctor degree from the
University of Denver College of Law.
Annel Henderson, 41, has been the Treasurer of the Company since 2001 and the
Principal Accounting Officer since 1995, and previously held the position of
Controller since 1992. Mrs. Henderson has been the Treasurer of The Chotin
Group Corporation since 2001 and had previously been the Controller, a position
held since 1992. Prior to 1992, she was Accounting Manager of Community
Holdings Corporation. Mrs. Henderson received a Bachelor of Science degree
from the University of Phoenix with a Major in Accounting.
M. Sean Rowland, 37, joined the Company as Vice President in January 2002. Mr.
Rowland is also Vice President of Structured Finance for The Chotin Group
Corporation, a position taken in January 2002. Prior to joining The Chotin
Group, Mr. Rowland was with Stifel Nicholas & Co. and has worked in the fixed
income trading market for over ten years, primarily focusing on mortgage-backed
securities. He holds a Bachelor of Science degree in Economics from San Jose
University.
Jennifer M. Land, 31, was appointed to Corporate Secretary of the Company in
January 2003. Mrs. Land has also been employed with The Chotin Group
Corporation since 1993 where she has been the Executive Administrative
Assistant to the CEO. She was given the additional position of Director of
Human Resources in December of 2000 and Corporate Secretary of The Chotin Group
in January 2003.
Directors and Executive Officers are elected annually for a one-year term.
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 2002, no executive officer had received any compensation
exceeding $100,000.
The Company has not paid any compensation pursuant to plans or any other
compensation arrangement. The Company paid its outside director $1,800
annually for the years ended December 31, 2002 and 2001. The Company has
revised the outside directors fees to $1,000 annually starting January 1,2003.
No other officers or directors receive any compensation for their services.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Amount and
Nature Of
Title Beneficial Percent of
of Class Name and Address of Beneficial Owner Ownership(1) Class
- -------- ------------------------------------ ----------- ----------
Common Steven B. Chotin 349,000 100%
6400 S. Fiddler's Green Circle
Suite 1200
Englewood, CO 80111
(1) Amount of such shares with respect to which persons indicated have the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under
the Securities Exchange Act of 1934: Zero.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information relating to this Item is incorporated herein by reference to
Item 8, "Financial Statements and Supplementary Data" under Note 4 "Related
Party Transactions."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
( a )(1) Financial Statements
- Balance Sheets at December 31, 2002 (unaudited) and 2001
- Statements of Operations for the Years Ended December 31,
2002 (unaudited), 2001 and 2000
- - Statements of Shareholder's Equity for the Years Ended
December 31, 2002(unaudited), 2001 and 2000
- - Statements of Cash Flows for the Years Ended December 31,
2002 (unaudited), 2001 and 2000
- - Notes to Financial Statements for the Years Ended December
31, 2002 (unaudited), 2001 and 2000
( a )(2) Financial Statement Schedules
The financial statement schedules have been omitted because they
are inapplicable.
( b ) Reports on Form 8-K
None
( c ) Exhibits
Exhibit 99.1 - CEO and CFO Certification of Annual Financial
Statements
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.
FUND AMERICA INVESTORS CORPORATION II
(Registrant)
Date: March 28, 2003 By: /s/ Helen M. Dickens
-------------------- ----------------------------------
Helen M. Dickens
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.
/s/ Steven B. Chotin Director, Chairman, Chief Executive March 28, 2003
- -------------------- Officer (Principal Executive Officer)
Steven B. Chotin
/s/ Helen M. Dickens Director, President
- -------------------- (Principal Financial Officer) March 28, 2003
Helen M. Dickens
/s/ Garrett Smith Director March 28, 2003
- --------------------
Garrett Smith
/s/ John L. Keane Vice President March 28, 2003
- --------------------
John L. Keane
/s/ Annel Henderson Treasurer (Principal Accounting Officer) March 28, 2003
- --------------------
Annel Henderson
/s/ M. Sean Rowland Vice President March 28, 2003
- --------------------
M. Sean Rowland
/s/ Jennifer M. Land Secretary March 28, 2003
- --------------------
Jennifer M. Land
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT
TO SECTION 12 OF THE ACT.
Since the Company has a sole shareholder, the Company has not sent and will not
send an annual report or proxy material to its shareholder.
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.
FUND AMERICA INVESTORS CORPORATION II
(Registrant)
Date: March 28, 2003 By:
-------------------- ----------------------------------
Helen M. Dickens
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.
Director, Chairman, Chief Executive March 28, 2003
- -------------------- Officer (Principal Executive Officer)
Steven B. Chotin
Director, President
- -------------------- (Principal Financial Officer) March 28, 2003
Helen M. Dickens
Director March 28, 2003
- --------------------
Garrett Smith
Vice President March 28, 2003
- --------------------
John L. Keane
Treasurer (Principal Accounting Officer) March 28, 2003
- --------------------
Annel Henderson
Vice President March 28, 2003
- --------------------
M. Sean Rowland
Secretary March 28, 2003
- --------------------
Jennifer M. Land
CERTIFICATIONS
I, Steven B. Chotin, certify that:
1. I have reviewed this annual report on Form 10-K of Fund America
Investors Corporation II;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 28, 2003
/s/ Steven B. Chotin
- ---------------------------
Steven B. Chotin
Chairman and Chief Executive Officer
I, Helen M. Dickens, certify that:
1. I have reviewed this annual report on Form 10-K of Fund America
Investors Corporation II;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 28, 2003
/s/ Helen M. Dickens
- --------------------------
Helen M. Dickens
Chief Financial Officer