-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DzZcYmPb6TVt2YbmJVQgIqgKfW23QXjfuP/jRIReVEwYFcVusNqG9tH840VeDd5o XyBojX49phxL6nR5e/SycA== 0000780118-97-000009.txt : 19970520 0000780118-97-000009.hdr.sgml : 19970520 ACCESSION NUMBER: 0000780118-97-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMWEST INSURANCE GROUP INC CENTRAL INDEX KEY: 0000780118 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 952672141 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09580 FILM NUMBER: 97609500 BUSINESS ADDRESS: STREET 1: 6320 CANOGA AVE STE 300 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8187041111 MAIL ADDRESS: STREET 1: 6320 CANOGA AVENUE SUITE 300 STREET 2: PO BOX 4500 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 EX-27 1 FDS --
7 1,000 U.S. DOLLARS 3-MOS DEC-31-1996 JAN-1-1997 MAR-31-1997 1 101,274 0 0 12,742 0 0 118,098 459 8,480 16,213 173,562 39,022 32,294 0 0 12,500 0 0 34 50,228 173,562 21,446 1,681 637 0 7,068 10,821 2,903 2,571 786 1,785 0 0 0 1,785 0.53 0.53 42,009 4,604 2,769 2,292 8,068 39,022 0
10-Q 2 FORM 10-Q QUARTERLY FILING FOR AIG UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 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 number: 1-9580 AMWEST INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 95-2672141 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6320 Canoga Avenue, Suite 300 Woodland Hills, California 91367 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (818) 704-1111 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . As of May 13, 1997, 3,367,127 shares of common stock, $.01 par value, were outstanding. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES INDEX Part I. FINANCIAL INFORMATION: Item 1 Consolidated Statements of Operations for the three months ended March 31, 1997 and 1996 3 Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 4 Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 6 Notes to Interim Consolidated Financial Statements 8 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II. OTHER INFORMATION: Item 1 Legal Proceedings 13 Item 2 Changes in Securities 13 Item 3 Defaults Upon Senior Securities 13 Item 4 Submission of Matters to a Vote of Security Ho1ders 13 Item 5 Other Information 13 Item 6 Exhibits and Reports on Form 8-K 13 PART I - FINANCIAL INFORMATION Item 1 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share data)
Three months ended March 31, 1997 1996 Underwriting revenues: Premiums written $ 21,610 $ 23,208 Premiums ceded (1,149) (2,743) --------------------- --------------------- Net premiums written 20,461 20,465 Change in unearned premiums: Direct 1,644 1,519 Ceded (659) (149) --------------------- --------------------- Net premiums earned 21,446 21,835 --------------------- --------------------- Underwriting expenses: Losses and loss adjustment expenses 6,653 10,463 Reinsurance (recoveries) refunds 415 (392) --------------------- --------------------- Net losses and loss adjustment expenses 7,068 10,071 Policy acquisition costs 10,821 9,487 General operating costs 2,903 3,828 --------------------- --------------------- Total underwriting expenses 20,792 23,386 --------------------- --------------------- Underwriting income (loss) 654 (1,551) Interest expense (401) (594) Merger expense - (710) Net investment income 1,681 1,807 Net realized investment gains 637 1,025 Commissions and fees - 143 --------------------- --------------------- Income before income taxes 2,571 120 Provision for income taxes: Current 524 76 Deferred 262 (42) --------------------- --------------------- Total provision for income taxes 786 34 --------------------- --------------------- Net income $ 1,785 $ 86 ===================== ===================== Earnings per common share: ===================== ===================== Net income $ 0.53 $ 0.03 ===================== ===================== Weighted average number of common shares outstanding 3,357 3,343
See accompanying notes to interim consolidated financial statements. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
ASSETS March 31, December 31, 1997 1996 --------------------- --------------------- (unaudited) Investments, available-for-sale: Fixedmaturities, at market value (amortized cost of $102,019 and $101,799 at March 31, 1997 and December 31, 1996, respectively) $ 101,274 $ 102,494 Common equity securities, at market value (cost of $6,981 and $7,217 at March 31, 1997 and December 31, 1996, respectively) 9,147 9,779 Preferred equity securities, at market value (cost of $3,473 and $3,971 at March 31, 1997 and December 31, 1996, respectively) 3,595 4,253 Other invested assets (cost of $2,500 and $2,667 at March 31, 1997 and December 31, 1996, respectively) 2,871 2,849 Short-term investments 1,211 890 --------------------- --------------------- Total investments 118,098 120,265 Cash and cash equivalents 459 6,434 Accrued investment income 1,422 1,399 Agents balances and premiums receivable (less allowance for doubtful accounts of $446 at March 31, 1997 and December 31, 1996) 11,846 10,882 Reinsurance recoverable: Paid loss and loss adjustment expenses 2,347 2,749 Unpaid loss and loss adjustment expenses 6,133 6,443 Ceded unearned premiums 1,190 1,849 Deferred policy acquisition costs 16,213 16,101 Furniture, equipment and improvements, net 4,513 4,747 Current Federal income taxes 1,485 2,802 Other assets 9,856 7,747 --------------------- --------------------- Total assets $ 173,562 $ 181,418 ===================== =====================
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (Dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31, 1997 1996 -------------------- --------------------- (unaudited) Liabilities: Unpaid losses and loss adjustment expenses $ 39,022 $ 42,009 Unearned premiums 32,294 33,939 Funds held as collateral 27,191 29,928 Deferred Federal income taxes 1,377 1,842 Bank indebtedness 12,500 12,500 Amounts due to reinsurers 612 345 Other liabilities 10,304 10,923 -------------------- --------------------- Total liabilities 123,300 131,486 Stockholders' equity: Preferred stock, $.01 par value, 1,000,000 shares authorized; issued and outstanding: none - - Common stock, $.01 par value, 10,000,000 shares authorized, issued and outstanding: 3,351,752 at March 31, 1997 and 3,326,002 at December 31, 1996 34 33 Additional paid-in capital 17,052 16,827 Net unrealized appreciation of investments carried at market, net of income taxes 1,144 2,456 Retained earnings 32,032 30,616 -------------------- --------------------- Total stockholders' equity 50,262 49,932 -------------------- --------------------- Total liabilities and stockholders' equity $ 173,562 $ 181,418 ==================== =====================
See accompanying notes to interim consolidated financial statements. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands)
Three months ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 1,785 $ 86 Adjustments to reconcile net income to cash provided by operating activities: Change in agents' balances and premiums receivable and unearned premiums (2,608) (3,667) Change in accrued investment income (22) 53 Change in unpaid losses and loss adjustment expenses (2,987) 2,656 Change in reinsurance recoverable on paid and unpaid losses and loss adjustment expenses and ceded unearned premiums 1,311 (165) Change in amounts due to reinsurers 326 340 Change in other assets and other liabilities (2,727) 3,005 Change in income taxes, net 1,556 (553) Change in deferred policy acquisition costs (112) 194 Net realized (gain) on sale of investments (637) (1,152) Net realized loss on sale of fixed assets 1 1 Provision for depreciation and amortization 346 330 --------------------- --------------------- Net cash provided (used) by operating activities (3,768) 1,128 Cash flows from investing activities: Cash received from investments sold, matured, called or repaid: Investments available-for-sale 13,058 22,420 Cash paid for investments acquired: Investments available-for-sale (12,244) (15,313) Amortization of discount on bonds (26) 37 Capital expenditures, net (113) (720) --------------------- --------------------- Net cash provided by investing activities 675 6,424 Cash flows from financing activities: Proceeds from issuance of common stock 226 246 Change in funds held as collateral (2,738) (5,372) Dividends paid (369) (261) --------------------- --------------------- Net cash (used) by financing activities (2,881) (5,387) --------------------- --------------------- Net increase (decrease) in cash and cash equivalents (5,974) 2,165 Cash and cash equivalents at beginning of period 6,433 5,232 --------------------- --------------------- Cash and cash equivalents at end of period $ 459 $ 7,397 ===================== ===================== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 401 $ 594 Income taxes 44 564 Cash received during the period on: Investments sold prior to maturity $ 10,171 $ 22,120 Investments held to maturity 2,887 300
See accompanying notes to interim consolidated financial statements. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Notes to Interim Consolidated Financial Statements (unaudited) (1) Basis of Presentation The interim consolidated financial statements presented herein are unaudited and, in the opinion of management, reflect all adjustments necessary for a fair presentation of results for such periods. All such adjustments are of a normal, recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Premiums written decreased 7% from $23,208,000 for the three months ended March 31, 1996 to $21,610,000 for the three months ended March 31, 1997. The decrease in premiums written is primarily attributable to a $1,981,000 decrease in premiums written for the contract performance product line for the surety operations as well as a $1,353,365 decrease in premiums written for the private passenger automobile program in the State of Arizona which is attributable to the significant rate increases effective May 1, 1996 for the program. These decreases were partially affected by increase writings in both Commercial Surety and Court Bond production. Net premiums earned decreased 2% from $21,835,000 for the three months ended March 31, 1996 to $21,446,000 for the three months ended March 31, 1997. The Company generally earns premiums ratably over the assigned bond terms for the surety operations and the policy term for the specialty property and casualty operations. Net losses and loss adjustment expenses decreased 30% from $10,071,000 for the three months ended March 31, 1996 to $7,068,000 for the three months ended March 31, 1997. The loss ratio for the surety operations improved to a loss and loss expense ratio of 25% for the three months ended March 31, 1997 from 38% for the three months ended March 31, 1996. The improved loss ratio is reflective of decreased loss severity in the contract performance and payment product line. The loss ratio for the specialty property and casualty operations also improved to 58% for the three months ended March 31, 1997 from 74% for the first three months ended March 31, 1996. The decrease in the loss ratio is primarily attributable to improved results on business written under the Arizona private passenger automobile program together with profitable results from the Company's California transportation business. Policy acquisition costs increased as a percentage of net premiums earned from 43%, or $9,487,000 to 50%, or $10,821,000 for the three months ended March 31, 1996 and 1997, respectively. This increase is prmarily attributable to increased writings in the Court Division during the second half of 1996 and the first quarter of 1997, which product line has higher acquisition costs and historically more attractive loss experience. General operating costs decreased as a percentage of net premiums earned from 18%, or $3,828,000 for the three months ended March 31, 1996 to 14%, or $2,903,000 for the three months ended March 31, 1997. The improvement in the general and administrative expense ratio is reflective of operational efficiencies associated with the merger with Condor Services, Inc. which was consumated on March 14, 1996. Underwriting results were a loss of $1,551,000 for the three months ended March 31, 1996 and a gain of $654,000 for the three months ended March 31, 1997. The combined ratio was 107% for the three months ended March 31, 1996 as compared to 97% for the three months ended March 31, 1997, due to a combination of the factors cited above. Interest expense decreased 32% from $594,000 for the three months ended March 31, 1996 to $401,000 for the three months ended March 31, 1997. This decrease is attributable to a decrease in the interest rate on the bank indebtedness from an average 7.5% for the three months ended March 31, 1996 to an average rate of 7.1% for the three months ended March 31, 1997 and a decrease in average funds held as collateral from $34,964,000 for the three months ended March 31, 1996 to $28,560,000 for the three months ended March 31, 1997. Collateral rates are adjusted at various times throughout the year in accordance with general market conditions. Net investment income decreased 7% from $1,807,000 for the three months ended March 31, 1996 to $1,681,000 for the three months ended March 31, 1997. The decrease is primarily due to a decrease in the amount of invested assets from $123,495,000 at March 31, 1996 to $118,098,000 at March 31, 1997. Net realized investment gains decreased from $1,025,000 for the three months ended March 31, 1996 to $637,000 for the three months ended March 31, 1997. The investments sold during the three months ended March 31, 1997 were primarily equity securities and certain fixed income investments including mortgage-backed and municipal bond securities. Income before income taxes increased from $120,000 for the three months ended March 31, 1996 to $2,571,000 for the three months ended March 31, 1997 due to the factors outlined above. The effective tax rate was 28% for the three months ended March 31, 1996 as compared to an effective rate of 31% for the three months ended March 31, 1997. The primary reason for the variance from the corporate income tax rate of 34% is tax advantaged income received on a portion of the Company's investment portfolio. Net income increased from $86,000 for the three months ended March 31, 1996 to $1,785,000 for the three months ended March 31, 1997 due to the factors outlined above. Liquidity and Capital Resources As of March 31, 1997, the Company held total cash and cash equivalents and invested assets of $118,557,000. This amount includes an aggregate of $27,191,000 in funds held as collateral which is shown as a liability on the Company's consolidated balance sheets. As of March 31, 1997, the Company's invested assets consisted of $101,274,000 in fixed maturities, held at market value, $9,147,000 in common equity securities, $3,595,000 in preferred equity securities, $2,871,000 in other invested assets and $1,211,000 in short-term investments, including certificates of deposit with original maturities less than one year. Because the Company depends primarily on dividends from its insurance subsidiaries for its net cash flow requirements, absent other sources of cash flow, the Company cannot pay dividends materially in excess of the amount of dividends that could be paid by the insurance subsidiaries to the Company. The respective domicilary state of each of the insurance subsidiaries regulates, through the Office of the Insurance Commissioner, the amount of dividends which can be paid by a domestic insurance company utilizing various formula methodology. On August 6, 1993, the Company entered into a revolving credit agreement with Union Bank for $12,500,000 which refinanced the 1988 Loan. The loan was amended on April 24, 1995 and again on July 10, 1996 to increase the amount available under the revolving line of credit from $12,500,000 to $15,000,000. The loan has a variable rate based upon fluctuations in the London Interbank Offered Rate (LIBOR) with amortizing credit line reduction each September 30, ultimately maturing on September 30, 2001. On September 30, 1997, the revolving credit line is scheduled to be reduced to $12,000,000. The interest rate at March 31, 1997 was 7.1%. The credit agreement contains certain financial covenants with respect to capital expenditures, business acquisitions, liquidity ratio, leverage ratio, tangible net worth, net profit and dividend payments. The Company is a party to a lease with Trillium/Woodland Hills regarding its corporate headquarters. During 1996, th Company signed a definitive agreement to terminate the Company's lease at its Corporate headquarters prior to its scheduled termination in August 1998. The Company's lease at its current headquarters will now terminate on June 30, 1997. On January 26, 1996, the Company entered into a lease agreement for new home office space in the City of Calabasas, California. The expected occupancy date for this office space is June 1997. The lease term is for a period of 15 years and contains provisions for scheduled lease charges. The Company's minimum commitment with respect to this lease in 1997 is approximately $515,000. The Company also has the option to purchase this new home office building and land three years into the lease period at a predetermined rate for the building, with the value of land based on then existing market rates. Other than the Company's obligations with respect to funds held as collateral and the Company's obligation to pay claims as they arise, the Company's commitments to pay principal and interest on the bank debt and lease expenses as noted above, the Company has no significant cash commitments. The Company believes that its cash flows from operations and other present sources of capital are sufficient to sustain its needs for at least the remainder of 1997. The Company generated $1,128,000 in cash from operating activities for the three months March 31, 1996 as compared to using $3,768,000 for the three months ended March 31, 1997. The Company generated $6,424,000 in cash for investing activities for the three months ended March 31, 1996 as compared to generating $675,000 for the three months ended March 31, 1997. The Company used $5,387,000 in cash from financing activities for the three months ended March 31, 1996 as compared to using $2,881,000 for the three months ended March 31, 1997. The table on the next page shows, for the periods indicated, the gross premiums written, net premiums earned, net losses and loss adjustment expenses and loss ratios for the Company's specialty property and casualty operations and surety operations. The surety operations are detailed by the Company's three major types of bonds: TABLE 1 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES SUMMARY OF PREMIUMS AND LOSSES BY PRODUCT LINE (Dollars in thousands)
Three months ended Year ended March 31, December 31, Type of Bond 1997 1996 1996 1995 ------------ ---- ---- ---- ---- Specialty Property and Casualty Operations Gross premiums written $ 5,872 $ 7,317 $ 25,172 $ 24,101 Net premiums earned 5,373 4,934 22,421 17,872 Net losses and loss adjustment expenses 3,131 3,634 18,830 13,131 Loss ratio 58% 74% 84% 73% Expense ratio 35% 38% 34% 41% Combined ratio 97% 112% 118% 114% Surety Operations Contract performance Gross premiums written $ 9,619 $ 11,600 $ 49,782 $ 54,039 Net premiums earned 10,934 12,042 46,158 49,736 Net losses and loss adjustment expenses 3,470 5,639 24,430 20,044 Loss ratio 32% 47% 53% 40% Court Gross premiums written $ 3,492 $ 2,584 $ 14,408 $ 8,571 Net premiums earned 3,253 2,677 13,054 8,749 Net losses and loss adjustment expenses 270 549 1,357 467 Loss ratio 8% 21% 10% 5% Commercial Surety Gross premiums written $ 2,627 $ 1,707 $ 7,980 $ 7,472 Net premiums earned 1,886 2,182 6,250 8,813 Net losses and loss adjustment expenses 196 249 2,031 1,623 Loss ratio 10% 11% 32% 18% Total Surety Gross premiums written $ 15,738 $ 15,891 $ 72,170 $ 70,082 Net premiums earned 16,073 16,901 65,462 67,298 Net losses and loss adjustment expenses 3,936 6,437 27,818 22,134 Loss ratio 25% 38% 42% 33% Expense ratio 74% 68% 69% 70% Combined ratio 98% 106% 111% 103%
PART II - OTHER INFORMATION AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Items 1-5: LEGAL PROCEEDINGS, CHANGE IN SECURITIES, DEFAULTS UPON SENIOR SECURITIES, SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS, OTHER INFORMATION None Item 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See the Exhibit Index on page 15. (b) Reports on Form 8-K There were no reports filed on Form 8-K during the three months ended March 31, 1997. SIGNATURES Pursuant to the requirements 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. AMWEST INSURANCE GROUP, INC. Date: May 13, 1997 by: /s/ JOHN E. SAVAGE --------------------------- John E. Savage President, Co-Chief Executive Officer and Chief Operating Officer (Principal Executive Officer) by: /s/ STEVEN R. KAY --------------------------- Steven R. Kay Senior Vice-President, Chief Financial Officer, Treasurer and Director (Principal Financial and Principal Accounting Officer) AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES EXHIBIT INDEX Exhibit Number Description Location 2 Plan of acquisition, reorganization, arrangement, liquidation or succession ............................ None 4 Instruments defining the rights of securityholders, including indentures ................................. Not required 11 Statement re computation of per share earnings ....... Page 16 15 Letter re unaudited interim financial information .... None 18 Letter re change in accounting principles ............ None 19 Previously unfiled documents ......................... None 20 Report furnished to security holders ................. None 23 Published report regarding matters submitted to vote of security holders .................................. None 24 Consents of experts and counsel ...................... None 25 Power of attorney .................................... None 28 Additional exhibits .................................. None EX-11 3 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Primary (2) Fully diluted (3) earnings per share earnings per share 1996 1995 1996 1995 Average shares outstanding for the three month period ending March 31, ........................................................ 3,334,037 3,297,521 3,334,037 3,297,521 Incremental shares resulting from conversion of common stock equivalents: Options to purchase shares of common stock at an exercise price of $6.14 - $15.675 (407,785 and 358,880 options at March 31, 1997 and 1996, respectively) (1)....................................................... 23,105 45,897 23,105 45,897 --------- --------- --------- --------- Total incremental shares resulting from conversion of common stock equivalents at March 31, ........................................................ 23,105 45,897 23,105 45,897 --------- --------- --------- --------- Total shares and incremental shares resulting from conversion of common stock equivalents at March 31, ............................................................................ 3,357,142 3,343,418 3,357,142 3,343,418 ========= ========= ========= ========= Percentage of incremental shares resulting from conversion of common stock equivalents at March 31, ............................................................................ 0.69% 1.37% 0.69% 1.37% ========= ========= ========= =========
EXHIBIT 11, (continued) AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (1) Outstanding options and warrants to purchase common stock. Options to purchase shares of common stock as of March 31, 1997 and 1996, respectively: March 31, 1997 March 31, 1996 -------------- -------------- Grant price: $6.14 3,025 3,025 Grant price: $6.82 - 1,650 Grant price: $8.375 15,375 32,250 Grant price: $9.00 5,550 6,450 Grant price: $9.10 4,785 5,005 Grant price: $9.213 - 8,500 Grant price: $9.875 10,500 10,500 Grant price: $9.90 - 1,650 Grant price: $10.375 3,000 3,000 Grant price: $10.50 4,850 5,850 Grant price: $10.625 12,750 12,750 Grant price: $10.75 25,500 27,000 Grant price: $11.125 12,000 13,000 Grant price: $11.55 1,650 1,650 Grant price: $11.825 10,000 10,000 Grant price: $12.50 17,500 - Grant price: $12.75 4,000 4,000 Grant price: $13.375 95,700 - Grant price: $13.875 64,200 68,700 Grant price: $14.02 1,650 1,650 Grant price: $14.25 108,250 126,250 Grant price: $14.875 7,500 7,500 Grant price: $15.675 - 8,500 ------------- ------------- 407,785 358,880 ============= ============= (2) Calculation of incremental shares resulting from conversion of common stock equivalents, using the Treasury Stock Method for calculating primary earnings per share, is based on the average of the closing prices, for the three months ended March 31, 1997 and 1996, as reported on the American Stock Exchange. (3) Calculation of incremental shares resulting from conversion of common stock equivalents, using the Treasury Stock Method for calculating fully diluted earnings per share, is based on the greater of the average ending ask price or the closing ask price on March 31, 1997 and 1996, as reported on the American Stock Exchange. -----END PRIVACY-ENHANCED MESSAGE-----