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, 2003, 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
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
incorporation or organization) identification 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, 2003: $0.00.
The number of shares outstanding of the Registrant's $0.01 par value common
stock, as of March 30, 2004 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, 2003, the Company had a total of $561 million registered and
unissued Securities on its Registration Statement No. 333-33823. No
Securities were issued, during the year ended December 31, 2003. 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, 2003, 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, 2003.
ITEM 2. PROPERTIES The Company has no material physical properties.
ITEM 3. LEGAL PROCEEDINGS None.
Page 2
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, 2003.
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 Unaudited
2003 2002 2001 2000 1999
-------- -------- -------- -------- --------
Income Statement Data:
Revenue $ 25,073 $ 44,192 $ 30,008 $ 94,956 $201,155
Net(loss)income $ 14,069 $ 7,731 $ (8,072) $ 51,682 $160,561
Net(loss)income per
share of common stock (1) (1) (1) (1) (1)
Balance Sheet Data:
Total assets $257,046 $285,367 $261,636 $257,353 $270,526
Shareholder's equity $255,936 $258,367 $261,636 $257,208 $270,526
(1) Not presented, as all shares of common stock are held by a sole
shareholder.
Page 3
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
1. General
As of December 31, 2003, the Company has issued nineteen series of registered
Pass-Through Securities aggregating $2,439,812,829 in initial amount for all
the issuances. Seven series of Bonds remain outstanding on December 31,
2003. 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-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
1998-A $ 60,373,853 Trust consisting primarily of one Pooled Fannie
Mae Certificate, two Pooled Freddie Mac Certi-
ficates and one Pooled Non-Agency Certificate
1998-B $ 50,703,106 Trust consisting primarily of three Pooled
Fannie Mae Certificates, one Pooled Ginnie Mae
Certificate, two Pooled Freddie Mac Certi-
ficates 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 not adequately fund overhead costs over the next twelve months
without additional revenues generated during this period. Capital funding
will continue to be provided by the sole shareholder to cover operating costs
on a monthly basis or until the Company generates sufficient revenue. The
funding source for any 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.
Page 4
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 and calls on outstanding
issuances. The Company generally charges a flat fee on the issuance of a
series of securities and a proportionate share of deferred costs associated
with its registration statement.
The Company reported net income of $14,069 and $7,731 for the twelve-months
ended December 31, 2003 and December 31, 2002 respectively, and the Company
reported a net loss of $8,072 for the twelve-months ended December 31, 2001.
Differences between the three years consist primarily of three main
components of income and expense. First, the Company reported other bond
income in all three years that consisted of call option fees earned. Call
option income can fluctuate due to the relative composition of the series
from which the call right value or income was determined. The call option
income reported was $25,000, $44,166 and $30,000 for the years ended 2003,
2002, 2001, respectively. The second main difference between periods is the
reduction in accounting fees reported under general and administrative
expenses. As discussed below, the Company no longer has its financial
statements audited as a result, expenses decreased by $9,250 from 2002 to
2003 due the reduction in accounting fees. The third main difference between
the reporting years is a reduction in management fee expense of $16,500 for
the 2003 year from 2002 and 2001 due to a restructure of management fees,
discussed below.
Audited financial statements - 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 had elected to file unaudited financial statements for the years
ended, December 31, 2003 and December 31, 2002. The Company paid audit fees
of $0, $9,250, and $8,550 for the twelve months ended December 31, 2003,
2002 and 2001, respectively.
Management fees - For the years ended 1993 to 2002, the Company paid
facilities management fees to The Chotin Group Corporation (the "Facilities
Manager"), a related party, under a Management Agreement dated January 1,
1993. Under this agreement, a fixed monthly fee was paid to the Facilities
Manager. The Company has adopted a new income-based fee structure that more
appropriately matches the composition of its income as well as the structure
of its business operations. Payment of fees under the January 1, 1993
Management Agreement ceased on December 31, 2002. The Company paid
management fees of $7,500, $24,000 and $24,000 for the twelve months ended
December 31, 2003, 2002 and 2001, respectively.
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.
Page 5
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.
Page 6
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FUND AMERICA INVESTORS CORPORATION II
Balance Sheets
December 31,
----------------------------
Unaudited Unaudited
2003 2002
--------- ---------
Assets
Cash and cash equivalents $ 466 $ 28,796
Deferred offering costs, net 256,361 256,361
Prepaid expenses 219 210
--------- ---------
Total assets $ 257,046 $ 285,367
========= =========
Liabilities - accounts payable $ 1,110 $ -
--------- ---------
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 504,010 504,010
Shareholder distributions (1,904,229) (1,874,798)
Retained earnings 1,652,665 1,652,665
--------- ---------
Total shareholder's equity 255,936 285,367
--------- ---------
Total liabilities and
shareholder's equity $ 257,046 $ 285,367
========= =========
See notes to financial statements
Page 7
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
Year Ended December 31,
------------------------------------------
Unaudited Unaudited
2003 2002 2001
--------- --------- ---------
Revenue
Other bond income $ 25,000 $ 44,166 $ 30,000
Issuance fees - - -
Interest 73 26 8
--------- --------- ---------
Total revenue 25,073 44,192 30,008
--------- --------- ---------
Expenses
General and administrative 3,504 12,461 14,080
Disposition fees 7,500 - -
Management fees - 24,000 24,000
--------- --------- ---------
Total expenses 11,004 36,461 38,080
--------- --------- ---------
Net income(loss) $ 14,069 $ 7,731 $ (8,072)
========= ========= =========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II
Statement of Shareholder's Equity
Years Ended December 31, 2003, 2002 and 2001
Common Stock Addi- Share-
------------------ tional holder
Number of Par Paid-in Distri- Retained
Shares Value Capital butions Earnings Totals
--------- ------- --------- --------- --------- ---------
Balances at
January 1,
2001 349,000 $ 3,490 $450,510 $(1,849,798) $1,653,006 $ 257,208
Shareholder
Distributions - - - (25,000) - (25,000)
Capital
Contribution - - 37,500 - - 37,500
Net income - - - - (8,072) (8,072)
-------- ------- -------- ----------- ---------- ---------
Balances at
December 31,
2001 349,000 3,490 488,010 (1,874,798) 1,644,934 261,636
Shareholder
Distributions - - - - - -
Capital
Contribution - - 16,000 - - 16,000
Net loss - - - - 7,731 7,731
-------- ------- -------- ----------- ---------- ---------
Unaudited Balances at
December 31,
2002 349,000 3,490 504,010 (1,874,798) 1,652,665 285,367
Shareholder
Distributions - - - (43,500) - (43,500)
Capital
Contribution - - - - - -
Net income - - - - 14,069 14,069
-------- ------- -------- ----------- ---------- ---------
Unaudited Balances at
December 31,
2003 349,000 $ 3,490 $504,010 $(1,918,298) $1,666,734 $ 255,936
======== ======= ======== =========== ========== =========
See notes to financial statements
Page 9
FUND AMERICA INVESTORS CORPORATION II
Statements of Cash Flows
Year Ended December 31,
-----------------------------------
Unaudited Unaudited
2003 2002 2001
-------- -------- --------
Operating activities:
Net income(loss) $ 14,069 $ 7,731 $ (8,072)
Adjustments to reconcile
net income(loss) to net cash provided
by(used in)operating activities:
Changes in operating
assets and liabilities:
Accounts payable 1,110 - (145)
Prepaid expenses (9) (6) (9)
-------- -------- --------
Net cash provided by(used in)
operating activities: 15,170 7,725 (8,226)
Financing activities:
Capital contributions - 16,000 37,500
Shareholder distributions (43,500) - (25,000)
-------- -------- --------
Net cash (used in)provided by
financing activities: (43,500) 16,000 12,500
-------- -------- --------
Net increase(decrease) in cash
and cash equivalents (28,330) 23,725 4,274
Cash and cash equivalents
at beginning of year 28,796 5,071 797
-------- -------- --------
Cash and cash equivalents
at end of year $ 466 $ 28,796 $ 5,071
======== ======== ========
See notes to financial statements
Page 10
FUND AMERICA INVESTORS CORPORATION II
Notes to Financial Statements
For the Years Ended December 31, 2003 unaudited,
2002 unaudited and 2001
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 not adequately fund overhead costs over the next twelve months
without additional revenues generated during this period. Capital funding
will continue to be provided by the sole shareholder to cover operating costs
on a monthly basis or until the Company generates sufficient revenue. The
funding source for any 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, 2003.
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.
Page 11
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.
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, 2003 and
2002, 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.
Page 12
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 Office 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 was terminated on
December 31, 2002 and was replaced by a subsequent Management Agreement that
changed the terms of fee provisions. Under the terms of both agreements, 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 were $7,500, $24,000 and $24,000 for the twelve months ended
December 31, 2003, 2002 and 2001, respectively.
Note 5. CMO Information
At December 31, 2003 and 2002, the outstanding principal balance of the
issued Securities and the amount of publicly and privately issued securities
were as follows:
2003
- ---------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
- --------- ------------- ------------- ------------
1993-A $ 22,150,769 $ 19,420,700 $ 2,730,069
1993-C 102,000,000 102,000,000 -
1994-A 1,374,220 1,197,924 176,296
1998-A 365,525 365,525 -
1998-B 3,862,457 3,862,457 -
1998-NMC1 2,744,184 2,744,184 -
2000-1 2,856,666 2,707,066 149,600
------------- ------------- ------------
Total $ 135,353,821 $ 132,297,856 $ 3,055,965
============= ============= ============
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 102,000,000 102,000,000 -
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 $ 171,192,674 $ 165,483,855 $ 5,708,819
============= ============= ============
Page 13
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Pursuant to the Securities and Exchange Commission in regards to the Sarbanes-
Oxley Act Section 404, the Company is considered a "non-accelerated filer" and
does not have to comply with the management report on internal controls until
its first fiscal year ending on or after July 15, 2005.
Page 14
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Position Age
- ------------------- --------------------------- -----
Steven B. Chotin Director, Chairman and
Chief Executive Officer 56
M. Garrett Smith Director 42
Helen M. Dickens Director and President 50
Annel Henderson Treasurer 42
Zachary H. Pashel Vice President 31
M. Sean Rowland Vice President 38
Michael W. Shepherd Vice President 34
Jennifer M. Land Secretary 32
Steven B. Chotin, 56, 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.
M. Garrett Smith, 42, 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, 50, has been a Director of the Company since 1995, Vice
President and Secretary of the Company since 1989. Ms. Dickens is also
President of The Chotin Group Corporation. Previously, Ms. Dickens held the
position of Vice President along with Chief Operations Officer at The Chotin
Group Corporation. Prior to joining The Chotin Group Corporation IN 1989,
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.
Annel Henderson, 42, 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. Prior to joining The Chotin Group
Corporation in December of 1991, 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.
Zachary H Pashel, 31, was appointed Vice President as of January 1, 2004.
Mr. Pashel is also Vice President of The Chotin Group. Prior to joining The
Chotin Group in 2004, Mr. Pashel's employment included Deson Ventures and
Greyrock Capital Partners, both groups specializing in middle market private
equity and M&A advisory services. Mr. Pashel also owned and operated
numerous companies in the real estate and aviation industries. Mr. Pashel
concentrated on English Literature at Brandeis University.
Page 15
M. Sean Rowland, 38, 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.
Michael W. Shepherd, 34, became Vice President of the company in 2003. He
joined The Chotin Group Corporation as the Company's General Counsel and
Vice President in June of 2003. Prior to that he was a member of the
corporate and securities group at the law firm of Hogan & Hartson, LLP in
Denver, Colorado. Before moving to Denver, Mr. Shepherd spent several years
in New York at Rogers & Wells, LLP (now Clifford Chance U.S. LLP) counseling
clients in connection with mergers and acquisitions and securities
transactions. Mr. Shepherd received a Bachelor of Arts degree in History
from Stanford University and a Juris Doctor degree from the University of
Chicago Law School.
Jennifer M. Land, 32, 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, 2003, 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 year ended December 31, 2002. The Company had 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.
Page 16
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."
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Qualifying under the definition of an Asset-Backed Issuer, Fund America
Investors Corporation II is not required to disclose this information
required under item 14.
Page 17
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a)(1) Financial Statements
- Balance Sheets at December 31, 2003 and 2002, both unaudited
- Statements of Operations for the Years Ended December 31,
2003 (unaudited), 2002 (unaudited) and 2001
- Statements of Shareholder's Equity for the Years Ended
December 31, 2003 (unaudited), 2002 (unaudited) and 2001
- Statements of Cash Flows for the Years Ended December 31,
2003 (unaudited), 2002 (unaudited) and 2001
- Notes to Financial Statements for the Years Ended December 31,
2003 (unaudited), 2002 (unaudited) and 2001
(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 31.1 - Certification by the Chief Executive Officer
pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act
Exhibit 31.2 - Certification by the Chief Financial Officer
pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act
Page 18
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 30, 2004 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 30, 2004
- -------------------- Officer (Principal Executive Officer)
Steven B. Chotin
/s/ Helen M. Dickens Director, President March 30, 2004
- -------------------- (Principal Financial Officer)
Helen M. Dickens
/s/ Garrett Smith Director March 30, 2004
- ------------------
Garrett Smith
/s/ Annel Henderson Treasurer March 30, 2004
- -------------------
Annel Henderson
/s/ Zachary H Pashel Vice President March 30, 2004
- --------------------
Zachary H. Pashel
/s/ M. Sean Rowland Vice President March 30, 2004
- -------------------
M. Sean Rowland
/s/ Michael W Shepard Vice President March 30, 2004
- ---------------------
Michael W. Shepherd
/s/ Jennifer M. Land Secretary March 30, 2004
- --------------------
Jennifer M. Land
Page 19
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.
Page 20