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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, 1997, 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]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: As of December 31, 1997: $0.00.
The number of shares outstanding of the Registrant's $0.01 par value common
stock, as of March 27, 1998 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 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 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 Bonds; (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 securities; and (4) engage in
other activities which are necessary or convenient to accomplish the foregoing
and are incidental thereto.
At the beginning of 1997, $533 million registered and unissued Securities
remained on the Company's Registration Statement No. 33-73748. During 1997,
the Company filed its fourth Registration Statement No. 333-33823, on Form
S-3 with the Securities and Exchange Commission.
Registration Statement No. 333-33823, submitted on August 15, 1997, registered
$1 million in Securities to be offered on a delayed or continuous basis.
Amendment No. 1 to Form S-3, Registration Statement No. 333-33823 was filed
on October 28, 1997. This amendment increased the amount of Securities being
registered by $500 million.
Registration Statement No. 333-33823 was declared effective by the Commission on
October 30, 1997, and pursuant to rule 429 of the Act, the prospectus included
therein is a combined prospectus relating also to Registration Statement
No. 33-73748. The total unissued and remaining securities at December 31, 1997
is $933 million.
To date, the Company has issued fifteen series of Bonds for an aggregate
initial principal amount of $2.1 billion. In 1996 and prior years, the
Company issued an aggregate of $2 billion in initial principal amount of
Bonds. During 1997, one bond series was issued for an initial principal
amount of $122 million. The Company does not have any further obligations
in connection with the issuance of these Bonds. Under generally accepted
accounting principles, such issuances are considered to be a direct sale
of the Collateral.
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, 1997.
Page 2
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,
----------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- ---------
Income Statement Data:
Revenue $132,196 $199,448 $ 26,538 $ 788,133 $5,346,907
Net income(loss) $24,035 $42,165 ($94,766) $ 102,519 $1,170,444
Net income(loss)
Per share of
common stock (1) (1) (1) (1) (1)
Balance Sheet Data:
Total assets $475,280 $442,444 $440,373 $1,871,994 $2,423,218
Shareholder's equity $466,479 $442,444 $440,279 $1,722,245 $1,619,726
(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
To date, the Company has issued fifteen series of registered Pass-Through
Certificates aggregating $2,088,993,870 in initial amount of all the
issuances. As of December 31, 1997, eleven series of Bonds remain out-
standing. The following list consists of only those 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 of FNMA and FHLMC Securities;
private mortgage backed securities including certain
residual interest securities; principal component of
bonds issued by the Resolution Funding Corporation
("RFCO Strips")
1993-E $190,145,165 Trust consisting primarily of adjustable rate one-
to- four family, first lien mortgage loans
1993-F $ 50,845,601 Trust consisting primarily of Fixed-rate, closed-
end, simple interest, residential first and second
mortgage loans and deed of trust loans
1993-H $ 45,634,831 Trust consisting primarily of adjustable rate one-
to-four family, first lien mortgage loans
1993-J $150,069,158 Trust consisting primarily of adjustable rate one-
to-four family, first lien mortgage loans
1993-K $ 88,010,000 Trust consisting of FNMA and FHLMC Securities;
private mortgage backed securities
1994-A $ 44,599,100 Trust consisting primarily of adjustable rate one-
to-four family, first lien mortgage loans
1996-A $295,315,915 Trust consisting of adjustable rate, conventional
first lien mortgage loans and fixed rate, second
lien mortgage loans
1997-NMC1 $121,765,000 Trust assets consisting of adjustable rate mortgage
loans that are secured by first lien mortgages on
one-to four family residential property.
Page 4
ITEM 7. CONTINUED
2. The Year 2000 Issue
With the year 2000 approaching, potential computer failures and errors may
occur due to problems with the computerized recognition of date codes. The
Company is currently in the process of assessing systems to address this
issue, and to determine the extent that any problem may pose to operations
of the Company. All operations are essentially driven by the issuance of
securities. The Company has identified three areas of potential concern
including the registration of securities, the issuance of securities, and
administrative operations.
The preparation, filing, and follow-up of the registration and issuance
processes are typically hired out to firms that specialize in these services.
The potential limitations of critical systems relied upon from retained third
parties for the registration and issuance of securities will not be known
until further investigation and inquiries have been finished.
To determine external vulnerability with out-sourced providers, communications
will be initiated by May 1998. There can be no guarantee that the systems of
other companies on which the Company's systems rely will be timely converted
and would not have an adverse effect on the Company's operations. Furthermore,
no guarantee can be made for third party suppliers remediation of their own
Year 2000 compliance.
The third area includes administrative systems that are supported by The
Chotin Group Corporation (TCG), a related party. TCG provides the Company
with office facilities and administrative functions. Current status of TCG's
systems will be provided along with a detailed compliance plan for remediation
of systems that require updating or upgrading. A status report should be
received by June 1998.
Without a reasonably complete assessment of systems that could be vulnerable
to problems, the Company does not have reasonable basis to conclude that the
Year 2000 compliance issue will not likely have an operational impact on the
Company. In addition, without a reasonably conclusive basis, reported finan-
cial information will not necessarily be an indication of future operating
results or future financial condition. However, due to the fact that all
systems are hired out, the Company does not expect to incur any direct cost
that would materially affect its financial condition.
3. Liquidity and Capital Resources
The Company expects to fund ongoing operations from working capital and
revenues derived from the issuance of Securities. Management's expectations
are that the activity of issuing Securities will increase in volume for 1998
and on. The Company's remaining and unissued-registered securities are
anticipated to be utilized by an affiliated mortgage company under common
control and other third party issuers.
Page 5
ITEM 7. CONTINUED
4. 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 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.
Typically, periods reporting net income are the result of issuance fees earned
by the Company for the use of its shelf registration. Conversely, in periods
reflecting net losses, no issuance fees were earned and the loss is the result
of fixed general and administrative expenses.
An evaluation of long-lived assets at December 31, 1997 resulted in impairment
of the Company's deferred offering costs. It was determined that costs in
excess of the currently accepted market pass-through costs should be charged
to net income. The net impairment charged to operations in 1997 was $18,503.
The Company reported net income for the year ended December 31, 1997 of $24,035
compared to net income of $42,165 for the year ended December 31, 1996 and net
loss of $94,766 for the year ended December 31, 1995. In both 1997 and 1996,
issuance fees were earned, however in 1997, results of operations were reduced
by the impairment of $18,503. In 1995, the Company did not generate any
issuance fees and reported a net operating loss as a result.
Page 6
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Fund America Investors Corporation II
Englewood, Colorado 80111
We have audited the accompanying balance sheets of Fund America Investors
Corporation II as of December 31, 1997 and 1996, and the related statements
of operations, shareholder's equity, and cash flows for each of the three
years in the period ended December 31, 1997. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements 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 financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and signifi-
cant 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, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1997 and
1996, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
February 27, 1998
Page 7
FUND AMERICA INVESTORS CORPORATION II
Balance Sheets
December 31,
-----------------------
1997 1996
-------- --------
Assets
Cash and cash
equivalents (Note 2) $110,311 $190,574
Deferred offering costs,
net (Note 2) 364,797 251,124
Deferred organization costs, net - 583
Prepaid expenses 172 163
-------- --------
Total assets $475,280 $442,444
======== ========
Liabilities - Accounts payable $ 8,801 $ -
-------- --------
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
Retained earnings 462,989 438,954
------- -------
Total shareholder's equity 466,479 442,444
------- -------
Total liabilities and
shareholder's equity $475,280 $442,444
======== ========
See notes to financial statements
Page 8
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
Year Ended December 31,
-------------------------------
1997 1996 1995
-------- -------- --------
Revenue
Pass-through certificate
issuance fees $125,995 $193,335 $ -
Interest 6,201 6,113 26,538
-------- -------- --------
Total revenue 132,196 199,448 26,538
-------- -------- --------
Expenses
Amortization of deferred
offering costs 50,995 119,900 45,719
Pass-through certificate
issuance expenses - - 7,140
General and administrative 14,663 13,383 44,445
Management fees (Note 4) 24,000 24,000 24,000
Impairment of long-lived
assets (Note 2) 18,503 - -
------- ------- -------
Total expenses 108,161 157,283 121,304
------- -------- --------
Net Income(loss) $ 24,035 $ 42,165 $(94,766)
======== ======== ========
See notes to financial statements
Page 9
FUND AMERICA INVESTORS CORPORATION II
Statements of Shareholder's Equity
Years ended December 31, 1997, 1996 and 1995
Common Stock Additional Share-
Number of Par Paid-in Retained holder's
Shares Value Capital Earnings Equity-Net
-------- ------ -------- ---------- ----------
Balance at
January 1, 1995 349,000 $3,490 $445,510 $1,273,245 $1,722,245
Shareholder
distributions - - (445,510) (741,690) (1,187,200)
Net loss - - - (94,766) (94,766)
------- ------ --------- --------- ----------
Balance at
December 31, 1995 349,000 3,490 - 436,789 440,279
Shareholder
Distributions - - - (40,000) (40,000)
Net income - - - 42,165 42,165
------- ------ -------- --------- ----------
Balance at
December 31, 1996 349,000 3,490 - 438,954 442,444
Net income - - - 24,035 24,035
------- ------ -------- --------- ---------
Balance at
December 31, 1997 349,000 $3,490 $ - $ 462,989 $ 466,479
======= ====== ======== ========= =========
See notes to financial statements
Page 10
FUND AMERICA INVESTORS CORPORATION II
STATEMENTS OF CASH FLOWS
Year ended December 31,
----------------------------------
1997 1996 1995
------ ------ ------
Net cash flows from operating
activities:
Net income (loss) $ 24,035 $ 42,165 $ (94,766)
Adjustments to reconcile
net income(loss) to net cash
from operating activities:
Amortization of deferred
offering costs 50,995 119,900 45,719
Amortization of
organization costs 583 635 635
Impairment of deferred
offering costs 18,503 - -
Changes in operating assets
and liabilities:
Accrued interest receivable - - 285
Accounts payable 8,801 (94) (109,081)
Prepaid expenses (9) (163) -
-------- -------- --------
Net cash provided by (used in)
operating activities: 102,908 162,443 (157,208)
Cash flows provided by
(used in) investing
activities:
Additions to deferred
offering costs (183,171) (14,185) (8,042)
Recovery of deferred
offering costs from issuer - 41,866 -
-------- ------- -------
Net cash provided by
(used in) investing activities (183,171) 27,681 (8,042)
Cash flows used in financing
activities -
Shareholder distributions - (40,000) (1,187,200)
-------- ------- ---------
Net increase (decrease)
in cash and cash equivalents (80,263) 150,124 (1,352,450)
Cash and cash equivalents
at beginning of year 190,574 40,450 1,392,900
-------- -------- ----------
Cash and cash equivalents
at end of year $110,311 $190,574 $ 40,450
======== ======== ==========
See notes to financial statements
Page 11
FUND AMERICA INVESTORS CORPORATION II
Notes to Financial Statements
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 prospec-
tus 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 Bonds; (2) invest cash balances on an interim basis in high
quality short-term securities; (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.
Note 2. Summary of Significant Accounting Policies
In connection with the issuance of Bonds, the Company generally will enter into
a purchase agreement ("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 ("Pooling Agreement"). Correspondingly, the purchase price
for the Collateral payable to the seller is netted out from the proceeds
realized from the sale of the Bonds. 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 Bonds.
Costs of registering securities are deferred. As the Bonds 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 Bond 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.
For purposes of reporting cash flows, cash and cash equivalents include demand
deposit accounts.
Page 12
Certain organizational costs incurred by the Company have been deferred and
have been charged to operations over a five-year period.
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 generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of 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.
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.
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of" requires companies to evaluate
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 under this pronouncement. An evaluation of long-lived
assets at December 31, 1997 resulted in impairment of the Company's deferred
offering costs. It was determined that costs in excess of the currently
accepted market pass-through costs should be charged to net income. The net
impairment charged to operations in 1997 was $18,503.
Effective January 1, 1997, the Company adopted the provisions of SFAS No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", as it relates to securitization of mortgage
loans, mortgage backed securities and other mortgage collateral. There was
no effect on the financial position or results of operations of the Company
as a result of SFAS No. 125. The Company does not expect SFAS No. 125 to
change the accounting of issuances for future securitizations, to the extent
such issuances are structured similarly to past transactions.
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 various 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, President
and Director of The Chotin Group Corporation and Fund America Management
Corporation ("FAMC"). On January 1, 1993, the Company entered into a Man-
agement 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, 1997, no such notice of term-
ination 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, 1997
were $24,000.
Page 13
At January 1, 1997, FAMC was performing duties under a pooling agreement
as certificate administrator on one bond issuance, FAIC II series 1993-K,
for the Company. On October 31, 1997 under the provisions of the second
amendment to pooling agreement, the Company and State Street Bank and Trust
Company, Trustee for FAIC II Series 1993-K, accepted FAMC's resignation as
certificate administrator.
The mortgage loans in Series 1997-NMC1, issued in 1997, were originated or
acquired by National Mortgage Corporation ("NMC") an affiliate of the Company.
In addition to NMC's participation as the seller of the mortgage loans in
this series, NMC is servicing the mortgage loans and is the holder, through
a wholly owned subsidiary, of the residual interest that represents all of
the beneficial ownership interest in Fund America Investors Trust 1997-NMC1.
Note 5. CMO Information
At December 31, 1997 and 1996, the outstanding principal balance of the
Certificates and the amount of publicly and privately issued securities
were as follows:
1997
--------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
------ ------------ ------------ ----------
1993-A $120,745,478 $115,889,343 $4,856,135
1993-B 25,768,640 21,813,103 3,955,537
1993-C 215,317,630 215,317,630 -
1993-E 65,943,839 59,705,590 6,238,249
1993-F 11,181,845 11,181,845 -
1993-H 11,653,426 11,596,528 56,898
1993-J 40,643,162 38,738,284 1,904,878
1993-K 10,000 - 10,000
1994-A 10,284,418 9,045,889 1,238,529
1996-A 151,877,854 151,877,854 -
1997-NMC1 114,983,630 114,983,630 -
------------ ------------ -----------
Total $768,409,922 $750,149,696 $18,260,226
------------ ------------ -----------
1996
------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
------ ------------ ------------ ----------
1993-A $145,836,532 $139,958,774 $5,877,758
1993-B 35,102,904 30,759,839 4,343,065
1993-C 226,780,034 226,780,034 -
1993-E 91,332,184 83,415,455 7,916,729
1993-F 17,371,076 17,371,076 -
1993-H 16,073,840 15,617,753 456,087
1993-J 59,447,223 56,515,835 2,931,388
1993-K 10,000 - 10,000
1994-A 15,721,585 14,490,388 1,231,197
1996-A 238,030,751 238,030,751 -
------------ ------------ -----------
Total $845,706,129 $822,939,905 $22,766,224
============ ============ ===========
Page 14
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, Chief Executive Officer
and President 50
Howard J. Glicksman Director, Vice President and Assistant
Secretary 52
M. Garrett Smith Director 36
Helen M. Dickens Director, Vice President and Secretary 44
Kenneth S. Birnbaum Vice President 53
Annel Henderson Controller, Principal Accounting Officer 36
Steven B. Chotin, 50, has been a Director and the Chairman, Chief Executive
Officer and President of the Company since its inception. Mr. Chotin has
been President 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 1992 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").
Howard J. Glicksman, 52, has been a Director of the Company since 1995,
Vice President since 1993 and Assistant Secretary since 1992. Mr. Glicksman
has been Vice President since 1993, Assistant Secretary and General Counsel
since 1989 of The Chotin Group Corporation. Prior to joining The Chotin Group
Corporation, Mr. Glicksman was a partner in the Denver, Colorado law firm of
Glicksman, Woodrow & Shaner. He currently holds bar and association member-
ships in Colorado and New York.
M. Garrett Smith, 36, is currently Executive Vice President and Chief Financial
Officer of Pioneer Natural Resources Company, a Dallas-based company. Mr. Smith
has been associated with Pioneer's top financial group for eight years, most
recently serving as Senior Vice President - Corporate Acquisitions. Previously,
Mr. Smith was a partner with BTC Partners, a financial consultant to MESA, Inc.
Helen M. Dickens, 44, has been a Director of the Company since 1995, Vice
President and Secretary of the Company since 1992. Ms. Dickens is also Vice
President and Chief Operations Officer of The Chotin Group Corporation,
positions she has held since 1989. Prior to joining The Chotin Group,
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 company.
Kenneth S. Birnbaum, 53, has been Vice President of the Company since 1993.
Mr. Birnbaum is Vice President of The Chotin Group Corporation, a position he
has held since 1990. He is also the Manager of The Chotin Group Corporation's
Washington, D.C., office. Prior to joining The Chotin Group Corporation, Mr.
Birnbaum was General Counsel of Bracy Williams & Company, a government affairs
firm specializing in advising corporations on federal, financial, energy and
transportation-related legislative and administrative matters. He is currently
a member of the bar of the District of Columbia.
Annel Henderson, 36, has been the Controller of the Company since 1992 and the
Principal Accounting Officer since 1995. Mrs. Henderson has been the Controller
of The Chotin Group Corporation since 1992. Prior to 1992, she was Accounting
Manager of Community Holdings Corporation.
Directors and Executive Officers are elected annually for a one-year term.
Page 15
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 1997, 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 pays its outside director a monthly fee
of $150.00. 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 in
Item 8, "Financial Statements and Supplementary Data" under Note 4 "Related
Party Transactions."
Page 16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON
FORM 8-K
( a )(1) Financial Statements
- Independent Auditors' Report
- Balance Sheets at December 31, 1997 and 1996
- Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995
- Statements of Shareholder's Equity for the Years
Ended December 31, 1997, 1996 and 1995
- Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995
- Notes to Financial Statements
( a )(2) Financial Statement Schedules
The financial statement schedules have been omitted because
they are inapplicable.
( b ) Reports on Form 8-K
Form 8-K filing reported the issuance of Fund America Investors
Trust 1997-NMC1 and attached various schedules on October 14, 1997.
( c ) Exhibits
Exhibit 27. Financial Data Schedule
Page 17
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 27, 1998 By: /s/ Helen M. Dickens
---------------------------
Helen M. Dickens
Vice 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 March 27, 1998
----------------- Executive Officer and President
Steven B. Chotin (Principal Executive Officer)
/s/ Helen M. Dickens Director, Vice President and March 27, 1998
----------------- Treasurer (Principal Financial Officer)
Helen M. Dickens
/s/ Howard J. Glicksman Director, Vice President and March 27, 1998
------------------- Assistant Secretary
Howard J. Glicksman
/s/ M. Garrett Smith Director March 27, 1998
--------------------
M. Garrett Smith
/s/ Kenneth S. Birnbaum Vice President March 27, 1998
-------------------
Kenneth S. Birnbaum
/s/ Annel Henderson Principal Accounting Officer March 27, 1998
-------------------
Annel Henderson
Page 18
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 19