-----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, Nj4vlamWsN4FunlUZA9c8nXmRr+9CzKb8YlpZDS6bxcAKPZlaJR5yC+Kr+NclJ54 1fIT/6cmSV9lt+HiaWlEYQ== 0000083402-97-000002.txt : 19970129 0000083402-97-000002.hdr.sgml : 19970129 ACCESSION NUMBER: 0000083402-97-000002 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19970128 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RESOURCE AMERICA INC CENTRAL INDEX KEY: 0000083402 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 720654145 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-04408 FILM NUMBER: 97512536 BUSINESS ADDRESS: STREET 1: 1521 LOCUST STREET CITY: PHILADELPHIA STATE: PA ZIP: 19102 BUSINESS PHONE: 2155465005 MAIL ADDRESS: STREET 1: 2876 SOUTH ARLINGTON ROAD CITY: AKRON STATE: OH ZIP: 44312 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCE EXPLORATION INC DATE OF NAME CHANGE: 19890214 FORMER COMPANY: FORMER CONFORMED NAME: SMTR CORP DATE OF NAME CHANGE: 19700522 10-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 0-4408 ------ RESOURCE AMERICA, INC. (Exact name of registrant as specified in its charter) DELAWARE 72-0654145 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1521 LOCUST STREET PHILADELPHIA, PENNSYLVANIA 19102 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (215) 546-5005 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Title of each class Common Stock, par value $.01 per share -------------------------------------- Name of each exchange on which registered: The Company's Common Stock trades on the NASDAQ National Market System under the symbol "REXI" ----------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by nonaffiliates of the registrant, based upon the closing price of such stock on December 20, 1996 was approximately $51,881,974. The number of outstanding shares of the registrant's Common Stock on December 20, 1996 was 3,550,928. AMENDMENT TO ANNUAL REPORT ON FORM 10-K The following information is being filed to amend the Annual Report on Form 10-K filed with the Securities and Exchange Commission by Resource America, Inc. (the "Company") on December 30, 1996. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS OF THE REGISTRANT Information is set forth below regarding the principal occupation of each of the directors of the Company. There are no family relationships among the nominees and directors of the Company; however, Mr. Daniel G. Cohen, a Vice President of the Company, is the son of Mr. Edward E. Cohen, Chairman of the Board of Directors, Chief Executive Officer and President of the Company. Year in Which Service Term to expire as at Names of Directors, Principal Director Annual Occupation, and Other Information Began Meeting - -------------------------------------------------------------------------------- MICHAEL L. STAINES, 47, Senior Vice President and Secretary of the Company since 1989. 1989 1997 (a) JOHN S. WHITE, 56, Chairman of the Board and Chief Executive Officer of DCC Securities Corporation (a securities brokerage firm) since 1990. 1993 1997 (a) Year in Which Service Term to expire as at Names of Directors, Principal Director Annual Occupation, and Other Information Began Meeting - ------------------------------------------------------------------------------- CARLOS C. CAMPBELL, 58, President of C.C. Campbell and Company (a management consulting firm). Vice Chairman of the Board of Directors of Computer Dynamics, Inc. (a computer services corporation) since 1992. Director of Sensys, Inc. (a telecommunication/asset management corporation) since 1994. 1990 1999 EDWARD E. COHEN, 57, Chairman of the Board since 1990, Chief Executive Officer since 1988 and President since 1995, of the Company. Chairman of the Board and director of Bryn Mawr Resources, Inc. Director and Chairman of the Executive Committee of JeffBanks, Inc. (a bank holding company). Principal of Ledgewood Law Firm, P.C. from 1991 to 1994 (b). 1988 1999 (a) JOHN R. HART, 36, Chief Executive Officer of Quaker Holdings, Ltd. (an investment firm) since 1991. President and Director of Physicians Insurance Company of Ohio ("PICO") since 1995 and 1993, respectively. 1994 1998 (a) Messrs. Staines and White have been renominated by the Nominating Committee of the Board of Directors for election as directors at the 1997 Annual Meeting of Stockholders. (b) Bryn Mawr Resources, Inc. is a privately owned company which holds 16.43% of the Company's Common Stock. See "Security Ownership of Certain Beneficial Owners and Management." Year in Which Service Term to expire as at Names of Directors, Principal Director Annual Occupation, and Other Information Began Meeting - -------------------------------------------------------------------------------- ANDREW M. LUBIN, 49, President, Delaware Financial Group, Inc. (a private investment firm) since 1984. 1994 1998 ALAN D. SCHREIBER, MD, 54, Founder and Chief Scientific Officer of CorBec Pharmaceuticals, Inc. since 1993. Professor of Medicine and Assistant Dean for Research and Research Training at the University of Pennsylvania School of Medicine since 1973. 1994 1998 NAMES OF OTHER EXECUTIVE OFFICERS, PRINCIPAL OCCUPATION, AND OTHER INFORMATION - -------------------------------------------------------------------------------- DANIEL G. COHEN, 27, Vice President - Financial Services of the Company. Prior to joining the Company in November 1995, Mr. Cohen was principally engaged in graduate studies at the University of Pennsylvania, following his graduation from the University of Chicago in 1991. Mr. Cohen is the son of Edward E. Cohen. FREDDIE M. KOTEK, 40, Senior Vice President of the Company since 1995. Executive Vice President of Resource Properties, Inc. (a wholly owned subsidiary of the Company) since 1993. First Vice President of Royal Alliance Associates from 1991 to 1993. NANCY J. MCGURK, 40, Vice President - Finance of the Company since 1992. Treasurer and Chief Accounting Officer of the Company since 1989. SCOTT F. SCHAEFFER, 34, Senior Vice President of the Company since 1995. Vice President -Real Estate of the Company and President of Resource Properties, Inc. (a wholly owned subsidiary of the Company) since 1992. Vice President of the Dover Group, Ltd. (a real estate investment company) from 1985 to 1992. OTHER SIGNIFICANT EMPLOYEES --------------------------- The following sets forth certain information regarding other significant employees of the Company: ABRAHAM BERNSTEIN, 63, Chairman, Chief Executive Officer and President of Fidelity Leasing, Inc. ("FLI"), a subsidiary of the Company. From 1982 to 1993, he was the President and Chief Executive Officer of Tokai Financial Services, Inc., the equipment leasing subsidiary of Tokai Bank of Japan. From 1993 to 1995, the contractual period during which Mr. Bernstein's restrictive covenant with Tokai was in effect, Mr. Bernstein was a Managing Director of the Rittenhouse Consulting Group (a financial consulting company). CRIT DEMENT, 43, Executive Vice President of FLI. Prior thereto, from 1983 through 1996 he was Vice President - Marketing and Leasing Associate - Senior Account Representative for Tokai Financial Services, Inc. JOSEPH T. ELLIS, JR., 35, Director of Vendor Services for FLI. Prior thereto, from 1985 through February 1996, he held various marketing and sales positions with Tokai Financial Services, Inc., most recently as the Director of Program Management and Strategic Market Development. JEFFREY C. SIMMONS, 38, Vice President - Exploration and Production of the Company since 1994. Director of Well Services of the Company from 1988 to 1994. ITEM 11. EXECUTIVE COMPENSATION EXECUTIVE OFFICERS The following tables set forth certain information concerning the compensation paid or accrued during each of the last three fiscal years by the Company and its subsidiaries to the Company's Chief Executive Officer and each of the Company's other most highly compensated executive officers whose aggregate salary and bonus (including amounts of salary and bonus foregone to receive non-cash compensation) exceeded $100,000.
Summary Compensation Table Annual Compensation Long-Term Compensation - ------------------------------------------------------------------------------------------------------------------------ Restricted Securities Stock Underlying LTIP All Name and Principal Position Year Salary Bonus Other Award(1) Options(2) Payouts(3) Other(4) - ------------------------------------------------------------------------------------------------------------------------ Edward E. Cohen 1996 $250,000 $135,000 $0 $31,990 95,506 $0 $9,607 Chairman, President & 1995 210,000 130,000 0 $19,824 0 0 0 Chief Executive Officer 1994 97,500 59,000 0 13,966 0 0 0 Freddie M. Kotek 1996 145,000 30,000 0 31,990 39,326 0 5,600 Senior Vice President 1995 145,000 45,000 0 19,824 0 0 3,760 Scott F. Schaeffer 1996 145,000 50,000 0 31,990 22,472 0 3,963 Senior Vice President 1995 145,000 45,000 0 19,824 0 0 3,058 Michael L. Staines 1996 120,000 12,500 0 28,420 11,236 0 0 Senior Vice President & 1995 112,500 7,500 0 16,023 0 0 0 Secretary 1994 105,000 0 0 9,368 0 0 0
(1) Reflects shares awarded under the Company's Employee Stock Ownership Plan, valued at the closing price of the Company's Common Stock at September 30 of each year ($12.75, $8.40 and $5.50 per share for fiscal years 1996, 1995, and 1994, respectively. For purposes of this table, all shares are assumed to be fully vested. Messrs. Cohen and Staines were 100% vested as of September 30, 1996. Shares awarded to Messrs. Schaeffer and Kotek were vested 40% and 20%, respectively, as of such date and will vest an additional 20% on each future September 30 until fully vested on September 30, 1999 and 2000, respectively. At September 30, 1996 and in aggregate, the number of restricted shares awarded and the value of such awarded restricted shares are: Edward E. Cohen, 20,089 shares at a value of $119,333; Freddie M. Kotek, 5,170 shares at a value of $51,814; Scott F. Schaeffer, 7,047 shares at a value of $60,665; Michael L. Staines, 13,624 shares at a value of $83,989. Cash dividends have been and will continue to be, as and when authorized by the Company's Board of Directors, paid on the restricted shares. (2) At September 30, 1996, Messrs. Cohen, Kotek, Schaeffer and Staines held options to purchase 179,776 shares, 39,326 shares, 50,562 shares and 39,326 shares, respectively of the Company's common stock. (3) Except for the Company's Employee Stock Ownership Plan, the stock option plans and the 401(k) plan, reported elsewhere in this table, the Company does not have long-term incentive plans or pension or profit-sharing plans. (4) All such amounts are matching payments made by the Company under the Company's 401(k) plan. OPTION/SAR GRANTS IN LAST FISCAL YEAR (1996)
Number of Percent of Total Potential Realizable Securities Options/SARs Value at Assumed Underlying Granted to Exercise Rates of Stock Price Name and Options/SARs Employees in Price Expiration Appreciation for Principal Position Granted(1) Fiscal Year(2) ($/Sh) Date Option Term - ------------------------------------------------------------------------------------------------------ @5% @10% --------- --------- Edward E. Cohen 95,506 47.2% 9.01 12/18/2000 137,852 399,219 Chairman & Chief Executive Officer Freddie M. Kotek 39,326 19.4% 8.19 12/18/2005 202,504 513,185 Senior Vice President Scott F. Schaeffer 22,472 11.1% 8.19 12/18/2005 115,717 293,249 Senior Vice President Michael L. Staines 11,236 5.6% 8.19 12/18/2005 57,858 146,624 Senior Vice President & Secretary
(1) Options expire ten years from the date of issuance and are granted at an exercise price of the market value of the underlying common stock of the Company on the date of grant, except for those options awarded to Mr. E. Cohen which have a five year term and an exercise price of 110% of the fair market value at the date of grant. Options vest at a rate of 25% of the option shares on each anniversary date of grant beginning with the second anniversary. (2) The options do not carry any stock appreciation rights ("SARs"). AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Value of Number of Unexercised Unexercised in-the-Money Options at Options at Shares FY-End FY-End Acquired Value Exercisable/ Exercisable/ Name and Principal Position on Exercise Realized Unexercisable Unexercisable(1) - --------------------------------------------------------------------------------------- Edward E. Cohen 0 $ 0 63,203/116,573 $613,701/240,280 Chairman & Chief Executive Officer Freddie M. Kotek 0 0 0/39,326 0/179,327 Senior Vice President Scott F. Schaeffer 0 0 21,068/29,494 210,464/172,627 Senior Vice President Michael L. Staines 0 0 21,068/18,258 210,464/121,391 Senior Vice President & Secretary
(1) Value is calculated by subtracting the total exercise price from the fair market value of the securities underlying the options at September 30, 1996 During the first quarter of fiscal 1996, the Company issued incentive stock options to the following persons in the following amounts: Mr. E. Cohen - 95,506 shares; Mr. Staines - 11,236 shares; Mr. Kotek - 39,326 shares; Mr. Schaeffer - - 22,472 shares; Mr. D. Cohen - 11,236 shares and Ms. McGurk - 11,236 shares. Twenty-five percent of the options become exercisable on December 18, 1996, with additional 25% amounts becoming exercisable on each December 18 thereafter through December 18, 1999 when all such options are exercisable. The options expire in 2005 and are exercisable at a price of $8.19 per share (the market price at the date of grant) except that Mr. E. Cohen's options expire in 2000 and are exercisable at a price of $9.01 per share. Employment Agreements In March 1996, the Company through its wholly owned subsidiary FLI entered into an employment arrangement with Abraham Bernstein. Under terms of the arrangement, Mr. Bernstein has assumed the positions of Chairman, Chief Executive Officer and President of FLI for a three year term and is responsible for developing the Company's small ticket business. Mr. Bernstein receives a base salary of $150,000 per year and is eligible for bonuses based on the performance of FLI. In addition, Mr. Bernstein has received options to purchase ten percent (10%) of the common stock of FLI, such options vesting 25% per year beginning in March 1997 (becoming fully vested in the event of a "change in control" of the Company) and expiring in March 2005. Under certain circumstances and after March 5, 2001, Mr. Bernstein may require that FLI buy, for cash, a predetermined number of the FLI shares subject to Mr. Bernstein's options at a price equal to ten times FLI's after-tax earnings per share for the fiscal year immediately prior to the giving of notice by Mr. Bernstein of his exercise of this right. Obligations of FLI to repurchase shares in any year in excess of $500,000 (including amounts deferred from prior years) may deferred to the following year. PERFORMANCE GRAPH The following graph compares the cumulative total stockholder return on the common stock of Resource America, Inc. with the cumulative total return of two other stock market indices: the NASDAQ United States Composite (National Market System only) and the NASDAQ Financial. COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* ------------------------------------------------ Resource Nasdaq U.S. Nasdaq September 30 America, Inc. composite Financial ------------ ------------- ----------- --------- 1991 100 100 100 1992 52.2 112.1 135.0 1993 55.7 146.8 185.1 1994 84.3 148.0 195.0 1995 135.1 204.4 246.8 1996 236.7 242.6 305.8 * Total return for each of the last five fiscal years ending September 30. Assumes $100 was invested on October 1, 1991 in the Company's common stock or in the indicated index and that cash dividends were reinvested as received. COMPENSATION COMMITTEE of the BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION -------------------------------- The Compensation Committee of the Board of Directors (the "Committee") is responsible for setting and administering compensation programs for the Company's executives, including the following: * set policies with respect to compensation for executives; * set pay levels for all named executive officers; * administration of the Company's Key Employee Stock Option plans and making appropriate awards of options; and * monitoring and determining such other compensation matters as may be assigned to the Committee by the board of Directors The Committee is comprised of three non-employee directors: Mr. Carlos C. Campbell, Dr. Alan D. Schreiber and Mr. John S. White. The Company's compensation philosophy and objectives are driven by the desire to * compensate and reward executives for their contribution to the historical success of the Company; and * provide suitable compensation packages to attract, motivate and retain talented executives in a very competitive environment. The executive compensation program is designed to reward performance that is directly relevant to the Company's short-term and long-term success and goals and as such is structured in three components: base salary, annual bonuses, and long term incentives. BASE SALARY Base salaries for executive officers are determined in part by pay practices in unaffiliated companies and the Committee's assessment of individual performance relative to responsibilities and objectives for each executive. Base salaries are not intended to compensate individuals for extraordinary performance or for above average Company performance. BONUS PLAN Executives are eligible to receive annual bonuses which are generally based on the overall Company performance during the preceding year and that individual's specific contribution to that performance. The Company does not have a defined bonus pool; however, during the past two years the Company's practice has been to limit the pool to no more than ten percent (10%) of the reported net income of the Company for the preceding year. Allocation of the amount available for annual bonus payment is at the discretion of the Committee. No formula performance measures were utilized in establishing the amount of the bonus awards; however the Committee considers individual contribution to the overall performance of the Company and performance relative to expectations. LONG TERM INCENTIVES GENERAL Long term incentives are designed to focus executives on the long term goals and performance of the Company and to provide a reward directly tied to stockholder return - the performance of the Company's common stock. The particular plans are intended to encourage the participants to strive to achieve the long term success of the Company and to remain with the Company in order to fully benefit from the plans. STOCK OPTIONS Stock options are issued periodically to key employees at an exercise price of no less than the then current market price of the Company's common stock, have a ten (10) year life and vest to the executive at twenty-five percent (25%) of the amount awarded on each anniversary of their issuance. Options awarded to Mr. Edward E. Cohen, as a result of his greater than five percent (5%) effective interest in the Company, have been issued with an exercise price of one-hundred ten percent (110%) of market price and with a five (5) year life. Allocation of available options is again at the discretion of the Committee and is determined by the potential contribution to, or impact upon, the overall performance of the Company by the executive. EMPLOYEE STOCK OWNERSHIP PLAN In 1989 the Company established the Resource America, Inc. Employee Stock Ownership Plan for the benefit of all qualified employees. All such employees, including named executives, are allocated shares from an available pool each year in proportion to their relative compensation. While the allocations from this plan are determined solely by a predetermined and required formula in accordance with ERISA, the intent was, and remains, to reward all employees, including executives, based on the long term success of the Company as measured by the stockholder return. SAVINGS PLAN The Resource America, Inc. Savings Investment Plan, under Section 401(k) of the Internal Revenue Code, offers eligible employees the opportunity to make long-term investments on a regular basis through salary contributions, which are supplemented by matching Company contributions in the form of cash or Company common stock. During fiscal 1996 the Company matched employee contributions 50% in cash or 100% in Company common stock. While participation in this plan is at the discretion of the qualified employee, the intent again was, and remains, to reward all employees, including executives, based on the long term success of the Company as measured by the stockholder return. CHIEF EXECUTIVE OFFICER - ----------------------- In evaluating the performance and setting the total compensation package for the Chief Executive Officer, Mr. Edward E. Cohen (who also holds the titles of Chairman and President), the Committee meets without that individual being present. In fiscal 1996 the Committee took particular note of the continued growth in revenues ($11.6 million in fiscal 1995 as compared to $8.2 million in fiscal 1994) and profitability ($2.7 million in fiscal 1995 as compared to $1.3 million in fiscal 1994) of the Company. The effectiveness of the leadership provided by Mr. Cohen has allowed the Company to change its focus from its historic energy activities to niche finance opportunities, specifically in real estate asset acquisition and resolution and equipment leasing, where the Company can take advantage of its specialized skills to generate attractive returns which ultimately are measured in the appreciation of the Company's common stock. This transformation has been substantially realized. As such, the Committee awarded Mr. Cohen an annual salary of $250,000, a bonus of $135,000 and five-year options on 95,506 shares of the Company's common stock at an exercise price of $9.01 per share (110% of the then current market price). This report has been provided by the Compensation Committee of the Board of Directors of Resource America, Inc. Carlos C. Campbell, Chairman Alan D. Schreiber, M.D. John S. White ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the number and percentage of shares of Common Stock owned, as of January 24, 1997, by (a) each person who, to the knowledge of the Company, is the beneficial owner of 5% or more of the outstanding shares of Common Stock, (b) each of the Company's present directors, (c) each of the Company's executive officers, and (d) all of the Company's present executive officers and directors as a group. This information is reported in accordance with the beneficial ownership rules of the Commission under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days. Shares of Common Stock issuable pursuant to options or warrants are deemed to be outstanding for purposes of computing the percentage of the person or group holding such options or warrants but are not deemed to be outstanding for purposes of computing the percentage of any other person. See notes (3), (4), (5) and (6) below, for information concerning outstanding options and warrants. Common Stock ------------------------------------------- Amount Percent of Beneficial Owner Owned Class - ------------------ ---------- ----------- Directors - --------- Carlos C. Campbell 25 * Edward E. Cohen 692,476 (1)(2)(3)(4) 19.04% John R. Hart 983,150 (5) 21.68% Andrew M. Lubin 280 * Alan D. Schreiber, M.D. 5,370 * Michael L. Staines 37,878 (2)(3)(6) 1.06% John S. White 0 * Executive Officers - ------------------ Daniel G. Cohen 2,909 (2)(4) * Freddie M. Kotek 15,803 (2)(3)(4) * Nancy J. McGurk 20,366 (2)(3)(4) * Scott F. Schaeffer 34,083 (2)(3)(4) * All present officers 1,792,340 (1)(2)(3) 38.21% and directors as a group (4)(5)(6) (11 persons) Other owners of 5% or More of Outstanding Shares(7) - ----------------------------- Physicians Insurance Company of Ohio(5) 983,150 21.68% Bryn Mawr Resources(1) 583,430 16.43% Kramer Spellman L.P. 401,500 11.31% Bay Pond Partners, L.P. 283,500 7.98% * Less than 1% (1) Includes the 583,430 shares of Common Stock beneficially owned by Bryn Mawr Resources, Inc. ("Bryn Mawr") and held of record by BMR Holdings, Inc., a subsidiary of Bryn Mawr. Bryn Mawr has filed Schedule 13D with the Commission concerning its ownership of the Company's Common Stock. Mr. Edward E. Cohen is an officer, director and principal shareholder of Bryn Mawr. (2) Includes shares issuable on exercise of options granted in 1993 and 1995 under the 1989 Key Employee Stock Option Plan of: Mr. E. Cohen - 87,079 shares, Mr. Schaeffer - 26,685 shares, Mr. Staines - 15,449 shares, Mr. Kotek - 9,831 shares, Ms. McGurk - 7,022 shares and Mr. D. Cohen - 2,809 shares. (3) Includes shares allocated under the 1989 Employee Stock Ownership Trust in the amounts of: Mr. E. Cohen - 20,089 shares; Mr. Staines - 13,624 shares; Mr. Schaeffer - 7,047 shares; Mr. Kotek - 5,170 shares and Ms. McGurk - 8,960 shares. (4) Includes shares allocated under the Resource Exploration, Inc. Employee Savings Plan in the amount of: Mr. E. Cohen - 1,877 shares; Mr. Kotek - 802 shares; Ms. McGurk - 4,213 shares, Mr. Schaeffer - 179 shares and Mr. D. Cohen - 100 shares, as to which each has voting power. (5) Represents shares issuable pursuant to warrants exercisable by PICO, of which Mr. Hart is an officer and director, such warrants were issued in conjuction with financing provided by PICO. See Item 13. (6) Includes 8,427 shares issuable on exercise of options granted to Mr. Staines in 1993 under the 1984 Key Employee Stock Option Plan. (7) The address for PICO is 13515 Yarmouth Drive N.W., Pickerington, Ohio 43147; the address for Bryn Mawr Resources is 1521 Locust Street, Fourth Floor, Philadelphia, Pennsylvania 19102; the address for Kramer Spellman L.P. is 2050 Center Avenue, Suite 300, Fort Lee, New Jersey 07024; the address for Bay Pond Partners, L.P. is 75 State Street, Boston, Massachusetts, 02109. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Until April 1996, Mr. E. Cohen was of counsel to Ledgewood Law Firm, P.C., a law firm which provides legal services to the Company. Such firm was paid $402,000 during fiscal 1996 for legal services, primarily related to the purchase and restructuring of real estate mortgages. The Company holds commercial real estate loans of borrowers whose underlying properties are managed by Brandywine Construction & Management Inc. ("BCMI"). The Company has advanced funds to certain of these borrowers for improvements on their properties which have been performed by BCMI. In five instances, the President of BCMI has also acted as the general partner of the borrower. Mr. E. Cohen is Chairman of the Board of Directors and a minority shareholder (approximately 8%) of BCMI. BCMI has agreed to subordinate its management fees to receipt by the Company of minimum required debt service payments under the loans held by the Company. The Company also maintains normal banking and borrowing relationships with Jefferson Bank, a subsidiary of JeffBanks, Inc. Mr. E. Cohen and his spouse are officers and directors of JeffBanks, Inc. (and his spouse is Chairman and Chief Executive Officer of Jefferson Bank and JeffBanks, Inc.), and are principal shareholders thereof. The Company borrowed $2.5 million from Jefferson Bank in the first quarter of fiscal 1995 under terms which the Company believes were no less favorable to it than those available from independent third parties. The loan was repaid within fiscal 1995. The Company anticipates that it may effect other borrowings in the future from Jefferson Bank; it anticipates that any such borrowings will be on terms similar to those which could be obtained by an unrelated borrower. In December, 1994, the Company acquired a loan with a face amount of $3,000,000 from California Federal Bank, FSB, at a cost of $1,671,695. The loan is secured by a property owned by a borrower whose general partner is the President of BCMI. Mr. E. Cohen is a limited partner in such partnership. The borrower refinanced the Company's loan in September 1995, applying $1,975,000 of the proceeds to the repayment of the Company's loan. As a result, the Company obtained a gain on its investment of $303,305, while maintaining a continuing interest in the loan of approximately $1 million. In August 1994, the Company acquired from third parties a loan, in the original principal amount of $3,550,000 (and with a then-outstanding balance of $4,388,644), for an investment of $1,612,674. The borrower is a limited partnership of which Mr. Lubin, a director of the Company, is currently the general partner. Mr. Lubin assumed such position after the Company's acquisition of the loan. Previously, the general partner had been the President of BCMI. The borrower subsequently refinanced the loan with another third party, and repaid the Company $934,300, leaving the Company with a net investment of $419,039. In April 1996, the Company provided $114,948 of financing to a partnership controlled by the President of BCMI for the purchase by such partnership of a property owned, through foreclosure, by Jefferson Bank. After first mortgage financing, the Company had a net investment of $109,206. The Company leases its executive offices in Philadelphia from a partnership of which Mr. Schaeffer is the general partner and Mr. Cohen is a limited partner. The Company has obtained material amounts of financing from PICO by the issuance, in May 1994, of an $8 million principal amount 9.5% Senior Note and by the sale, in fiscal years 1995 and 1996, of $12 million of participations in the Company's portfolio loans, respectively. Mr. Hart, a director of the Company, is an executive officer and director of PICO. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. RESOURCE AMERICA, INC. (Registrant) By: /s/ Edward E. Cohen ---------------------- January 28, 1997 President Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of January 28, 1997. Signature Title --------- ----- /s/ Edward E. Cohen Chairman of the Board and President of ----------------------- Resource America, Inc. Edward E. Cohen /s/ Michael L. Staines Senior Vice President, Secretary, and ----------------------- Director of Resource America, Inc. Michael L. Staines /s/ Carlos C. Campbell Director of Resource America, Inc. ----------------------- Carlos C. Campbell /s/ John R. Hart Director of Resource America, Inc. ----------------------- John R. Hart /s/ Andrew M. Lubin Director of Resource America, Inc. ----------------------- Andrew M. Lubin /s/ Alan D. Schreiber Director of Resource America, Inc. ----------------------- Alan D. Schreiber /s/ John S. White Director of Resource America, Inc. ----------------------- John S. White /s/ Nancy J. McGurk Vice President - Finance and Treasurer ----------------------- (Chief Accounting Officer) of Resource Nancy J. McGurk America, Inc. -----END PRIVACY-ENHANCED MESSAGE-----