Item 1. BUSINESS
Introduction
Leslie Building Products, Inc. (the "Company"), through its wholly-owned subsidiary Leslie-Locke, Inc. ("Leslie-Locke"), is a manufacturer and marketer of a wide variety of specialty building products for the professional and do-it-yourself remodeling and residential construction industry. Its products consist of ornamental iron security products (including doors, window guards, fencing and railings), residential ventilation products, metal and fiberglass air distribution products for the HVAC industry, skylights, a professional line of aluminum rakes, and a full line of door louvers and vision lite products for the architectural door market.
The Company's principal executive and administrative offices are located at 200 Mamaroneck Avenue, White Plains, New York, 10601; telephone number (914) 421-2545.
BUSINESS OF THE COMPANY
Leslie-Locke's categories of products consist of (i) patented do-it-yourself systems of ornamental iron railings, columns and accessories, security doors and window and door guards; (ii) ventilation devices, including exterior applied static ventilators, energy-free turbine ventilators, power attic ventilators, chimney caps, and whole-house fans; (iii) metal and fiberglass air distribution products for the HVAC industry; (iv) skylights of various types; (v) professional aluminum rakes, and (vi) door louvers, glass frames and vision lite products for architectural doors. Most of these categories of products include a wide variety of styles, sizes and colors resulting in the availability of over 2,000 different products.
Leslie-Locke markets its products primarily to leading home center chains and, to a lesser extent, to building material wholesalers, to commercial and residential builders, and to remodelers and renovators. Approximately 58% of the Company's consolidated net sales for 1996 were made by Leslie-Locke to The Home Depot, Inc., although Leslie-Locke has no long-term contracts for sales to The Home Depot. While Leslie-Locke competes with well over 100 national and regional manufacturers, management believes that none of these suppliers offers the full line of products offered by Leslie-Locke. Leslie-Locke's broad range of products makes it an important supplier to leading national retail outlets. Leslie-Locke's products are marketed by a nationwide sales force consisting of six sales personnel working exclusively for Leslie-Locke, and 155 manufacturers' representatives and distributors.
Sales of Leslie-Locke's products are somewhat seasonal in nature, resulting in approximately 60% of its sales in the six-month period from March through August. However, the wide variety of products offered by Leslie-Locke to renovators and remodelers, and to a lesser extent to builders of new construction, reduces the effects of cyclical changes experienced by businesses solely dependent upon new construction.
Raw materials utilized by Leslie-Locke, consisting of steel, aluminum, electric motors, fan blades and other components and accessories, are readily available from a number of sources. Manufacturing operations consist primarily of stamping or roll-forming component parts from purchased steel or aluminum coil, followed by painting and various assembly operations to create finished products.
Leslie-Locke's operations are subject to Federal, state and local regulatory requirements relating to the use, storage, and disposal of certain hazardous substances used in its manufacturing processes. Leslie-Locke believes that it is currently operating in compliance with applicable regulations and does not believe that costs of compliance with these laws and regulations will have a material effect upon its capital expenditures, earnings or competitive position.
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In December 1986, Leslie-Locke acquired White Metal Rolling and Stamping Corp. ("White Metal"), a manufacturer of aluminum consumer and industrial ladders. After an initial period of profitable operations, the ladder operation incurred substantial operating losses as a result of competitive market conditions, volatile raw material costs, and product liability claims which became uninsured as a result of the insolvency of several of its insurance carriers in the late 1980's. Because of these losses, White Metal's ladder manufacturing operations were discontinued as of November 1990 and its assets were sold. On September 30, 1994, White Metal filed a voluntary petition seeking liquidation under the provisions of chapter 7 of the United States Bankruptcy Code. See "Item 3. Legal Proceedings" and Note 6 of Notes to Consolidated Financial Statements.
On April 19, 1994, the Board of Directors of Drew Industries Incorporated ("Drew") approved a plan to transfer the stock of Leslie-Locke to the Company and to distribute the common stock of the Company to Drew's stockholders on a one-for-one basis (the "Spin-off"). The transfer of the stock of Leslie-Locke to the Company was effective May 10, 1994, and the Spin-off was effective July 29, 1994. Since the Spin-off, the Company has been a stand-alone company, the common stock of which is traded on the OTC-Bulletin Board (symbol: LBPI).
Pursuant to a Shared Services Agreement, the Company and Drew agreed to share certain administrative functions and employee services, such as management overview and planning, tax preparation, financial reporting, coordination of the independent audit, stockholder relations, and regulatory matters. The Company reimburses Drew for the fair market value of such services. The Agreement expires on December 31, 1997 and may be extended.
In December 1994, the Board of Directors of the Company approved a plan to restructure the Company's manufacturing facilities in order to achieve more efficient and less costly manufacturing and distribution of its products. In connection with the facilities restructuring, on January 6, 1995, the Company entered into a $7.2 million Construction and Equipment Loan Facility with Branch Banking and Trust Company. See Notes 8 and 10 of Notes to Consolidated Financial Statements for discussion of the construction and equipment loan facility and the restructuring charges taken by the Company.
Employees
The Company has no full-time employees. Pursuant to the Shared Services Agreement, certain employees of Drew perform administrative functions and employee services such as management overview and planning, tax preparation, financial reporting, coordination of the independent audit, stockholder relations, and regulatory matters. The Company reimburses Drew for the fair market value of such services.
The approximate number of persons employed full-time by Leslie-Locke at December 31, 1996 was 581. The Company believes that relations with Leslie-Locke's employees are good.
Item 2.

Item 2. PROPERTIES
Leslie-Locke leases two and owns two manufacturing and warehouse facilities consisting of an aggregate of approximately 557,000 square feet, in Compton, California (two); and Burgaw, North Carolina (two), and leases its corporate offices in Atlanta, Georgia consisting of approximately 17,000 square feet of office space. See "Recent Events" for a discussion of the Company's facilities restructuring plan.
See Note 12 of Notes to Consolidated Financial Statements with respect to the Company's lease obligations as of December 31, 1996.
(3)
Item 3.

Item 3. LEGAL PROCEEDINGS
The ladder manufacturing business formerly conducted by Leslie-Locke's subsidiary, White Metal, ceased operations in 1990. On September 30, 1994, the date White Metal filed a voluntary petition seeking liquidation under chapter 7, there were approximately 45 pending personal injury claims against White Metal in various stages of demand or litigation, alleging a variety of injuries. The initial demands made by claimants range from nominal amounts to several million dollars; however, the average settlement amount of a claim against White Metal had been in the range of $30,000. Based on actuarial studies and past experience, White Metal estimates that an additional 50-100 claims may be asserted over the next ten years. As of December 31, 1996, based on actuarial studies and past experience, White Metal's estimated future product liability was approximately $4.2 million, representing existing and future claims and associated administrative costs. Most of White Metal's product liability insurance has either expired or was provided by insurers that are now insolvent. As a result, White Metal became self-insured for a substantial portion of pending, and virtually all new, product liability claims. As a result of the chapter 7 petition, all litigation against White Metal was stayed. Under certain circumstances, the Bankruptcy Court could lift the stay and permit litigation of specific claims to proceed.
Prior to White Metal's chapter 7 petition, Leslie-Locke had been named as a defendant in one personal injury case based on allegations of White Metal's negligence in the manufacture of ladders, and an attempt was made to name Leslie-Locke as a defendant in a second case. In the second case, the claim against Leslie-Locke was dismissed by the court. The first case was settled by White Metal upon payment made by the insurer. In September 1995, Leslie-Locke was joined as a defendant in a personal injury action pending against White Metal and other defendants on the theory that Leslie-Locke is the successor of White Metal and assumed White Metal's liabilities. The case has been dormant since January 1996 as a result of the commencement of bankruptcy proceedings by another of the defendants. Because neither the Company nor Leslie-Locke are engaged in the manufacture or marketing of ladders, and because the Company and Leslie-Locke have maintained separate and distinct corporate entities, businesses, manufacturing facilities and operations from White Metal and did not assume White Metal's liabilities or succeed to its business, the Company and Leslie-Locke disclaim any liability for the obligations of White Metal. In April 1996, the Company was named as a defendant in another White Metal related personal injury case on the theory that the Company is the successor of White Metal. The Company made a motion to dismiss the action, plaintiff failed to respond, and the action against the Company was dismissed on default. There can be no assurance that in the future any claim brought against White Metal, which is asserted against the Company or Leslie-Locke, will be dismissed. Moreover, while the Company and Leslie-Locke will vigorously oppose and defend any White Metal claim asserted against them, because claims against White Metal are asserted in various jurisdictions, it is impossible to predict the outcome of any future litigation involving these matters.
On May 7, 1996, the Company and Leslie-Locke, and Drew, the former parent of Leslie-Locke, and its subsidiary, Kinro, Inc., were served with a summons and complaint in an adversary proceeding commenced by the chapter 7 trustee of White Metal. The complaint, which appears to allege several duplicate claims, seeks damages in the aggregate amount of $10.6 million plus attorneys fees, of which approximately $9.7 million is sought, jointly and severally, from the Company, Leslie-Locke, Drew and Kinro. The proceeding is based principally upon the trustee's allegations, previously disclosed by the Company, that the Company and its affiliated companies obtained tax benefits attributable to the use of White Metal's net operating losses. The trustee seeks to recover the purported value of the tax savings achieved, which appears to be approximately $7.5 million. Management believes that the trustee's allegations are without merit and have no basis in fact. In addition, the trustee alleges that White Metal made certain payments to Leslie-Locke which were preferential and are recoverable by White Metal, in the approximate amount of $2.2 million. Leslie-Locke denies liability for any such amount and is vigorously defending against the allegations. However, an estimate of potential loss, if any, cannot be made at this time. The Company believes that the defense of this proceeding will not have a material adverse impact on the Company's financial condition or results of operations.
(4)
Neither the Company nor Leslie-Locke is a party to any other legal proceedings which, in the opinion of Management, could have a material adverse effect on the Company or its consolidated financial position.
Item 4.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following tables set forth certain information with respect to the Directors and Executive Officers of the Company as of December 31, 1995.
Name Position ---- -------- Leigh J. Abrams President, Chief Executive Officer and Director of (Age 54) the Company since July 1994.
Edward W. Rose, III Chairman of the Board of Directors of the Company (Age 55) since July 1994.
Ralph C. Pepper Director since July 1994. (Age 54)
James F. Gero Director since July 1994. (Age 51)
Marshall B. Payne Director since July 1994. (Age 39)
Fredric M. Zinn Chief Financial Officer of the Company since (Age 45) July 1994.
Harvey J. Kaplan Secretary and Treasurer of the Company since (Age 62) July 1994.
LEIGH J. ABRAMS, for more than the past five years has also been President, Chief Executive Officer and a Director of Drew.
EDWARD W. ROSE, III, for more than the past five years, has been President and principal stockholder of Cardinal Investment Company, Inc., an investment firm. Mr. Rose also serves as Co-Managing General Partner of the Texas Rangers Baseball Team and as a director of the following public companies: Osprey Holding, Inc., previously engaged in selling computer software for hospitals; and ACE Cash Express, Inc. engaged in check cashing services. Mr. Rose is also Chairman of the Board of Drew.
RALPH C. PEPPER, since April 1989, has been the President of Leslie-Locke, Inc., a subsidiary of the Company. From August 1985, to April 1989, Mr. Pepper held various executive offices with Leslie-Locke, Inc.
JAMES F. GERO, since March 1992, has been Chairman and Chief Executive Officer of Sierra Technologies, Inc., a manufacturer of defense systems technologies. From July 1987 to October 1989, Mr. Gero was Chairman and Chief Executive Officer of Varo, Inc., a manufacturer of defense electronics, and from 1985 to 1987, Mr. Gero was President and Chief Executive Officer of Varo, Inc. Mr. Gero also serves as a director of the following
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public companies: Recognition Equipment, Inc., engaged in providing hardware, software and services to automate work processing systems; American Medical Electronics, Inc., engaged in manufacturing and distributing orthopedic and neurosurgical medical devices; and Spar Aerospace Ltd., engaged in space robotics, communications equipment and aerospace products and services. Mr. Gero is a Director of Drew.
MARSHALL B. PAYNE, for more than the past five years, has been Vice President of Cardinal Investment Company, Inc., an investment firm. Mr. Payne also serves as a director of the following public companies: Osprey Holding, Inc., previously engaged in selling computer software for hospitals; and ACE Cash Express, Inc., engaged in check cashing services.
FREDRIC M. ZINN, for more than the past five years, has also been Chief Financial Officer of Drew.
HARVEY J. KAPLAN, for more than the past five years, has also been Secretary and Treasurer of Drew.
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and directors, and persons who beneficially own more than ten percent of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the NASD. Officers, directors and greater than ten-percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, the Company believes that during 1996 all such filing requirements applicable to its officers and directors (the Company not being aware of any ten percent holder other than Edward W. Rose, III a Director) were complied with.
(6)
PART II
Item 5.

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Per Share Market Price Information
The Common Stock of the Company is traded on the OTC-Bulletin Board (symbol: LBPI). On February 28, 1997, there were 2,447 holders of record of the Common Stock. The Company estimates that 2,000 to 4,000 additional stockholders own shares of its Common Stock held in the name of Cede & Co. and other broker and nominee names.
The table below sets forth, for the periods indicated, the range of high and low prices per share for the Common Stock as reported by the National Association of Securities Dealers. The prices set forth below represent quotations between dealers, without adjustment for retail mark-up, mark-down or commissions, and do not necessarily represent actual transactions.
High Low ---- --- Calendar 1995 Quarter ended March 31........................... $2.00 $ 1.63 Quarter ended June 30............................ $2.25 $ 1.50 Quarter ended September 30....................... $2.44 $ 2.06 Quarter ended December 31........................ $2.38 $ 2.13
Calendar 1996 Quarter ended March 31........................... $2.25 $ 2.13 Quarter ended June 30............................ $2.38 $ 2.06 Quarter ended September 30....................... $4.25 $ 2.06 Quarter ended December 31........................ $3.63 $ 3.13
- --------- (i)The Common Stock began trading on the OTC-Bulletin Board on August 5, 1994.
The closing price per share for the common stock on February 28, 1997 was $2.50.
Dividend Information
The Company has not paid any cash dividends on its Common Stock. Future dividend policy with respect to the Common Stock will be determined by the Board of Directors of the Company in light of prevailing financial needs and earnings of the Company and other relevant factors; however, it is not anticipated that the Company will pay dividends on its Common Stock in the foreseeable future.
The Company's dividend policy is subject to restrictions contained in financing agreements relating to its secured line of credit, which provide that dividends upon the Common Stock may be payable only with the consent of the lender. See Note 8 of Notes to Consolidated Financial Statements.
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Item 6.

Item 6. SELECTED FINANCIAL DATA, Item 7.

Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
Part III of Form 10-K is incorporated by reference to the Company's Proxy Statement with respect to its Annual Meeting of Stockholders to be held on May 14, 1997.
PART IV
Item 14.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES and REPORTS ON FORM 8-K
(a) Documents Filed
(1) Financial Statements. The Consolidated Financial Statements of the Company and its subsidiaries are incorporated by reference to the Consolidated Financial Statements and Notes to Consolidated Financial Statements in the Company's Annual Report to Stockholders for the year ended December 31, 1996.
(2) Schedules.
(3) Exhibits. See "List of Exhibits" at the end of this report incorporated herein by reference.
(b) Reports on Form 8-K
No Current Reports on Form 8-K were filed during the quarter ended December 31, 1995.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
LESLIE BUILDING PRODUCTS, INC.
Date: March 24, 1997 By: /s/ Leigh J. Abrams ------------------------------- Leigh J. Abrams, President
Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and dates indicated.
Each person whose signature appears below hereby authorizes Leigh J. Abrams and Harvey J. Kaplan, or either of them, to file one or more amendments to the Annual Report on Form 10-K which amendments may make such changes in such Report as either of them deems appropriate, and each such person hereby appoints Leigh J. Abrams and Harvey J. Kaplan, or either of them, as attorneys-in-fact to execute in the name and on behalf of each such person individually, and in each capacity stated below, such amendments to such Report.
Date Signature Title - ---- --------- -----
March 24, 1997 By:/s/Leigh J. Abrams Director, President and Chief --------------------- Executive Officer (Leigh J. Abrams)
March 24, 1997 By:/s/Harvey J. Kaplan Secretary and Treasurer --------------------- (Harvey J. Kaplan)
March 24, 1997 By:/s/Fredric M. Zinn Chief Financial Officer --------------------- (Fredric M. Zinn)
March 24, 1997 By:/s/John F. Cupak Controller --------------------- (John F. Cupak)
March 24, 1997 By:/s/Edward W. Rose, III Director --------------------- (Edward W. Rose, III)
March 24, 1997 By:/s/ James F. Gero Director --------------------- (James F. Gero)
March 24, 1997 By:/s/Ralph C. Pepper Director --------------------- (Ralph C. Pepper)
March 24, 1997 By:/s/Marshall B. Payne Director --------------------- (Marshall B. Payne)
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Report of Independent Auditors
The Board of Directors Leslie Building Products, Inc.
Under date of February 26, 1997, we reported on the consolidated balance sheets of Leslie Building Products, Inc. and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1996 as contained on pages 10 through 23 in the 1996 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1996. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedule as listed in Item 14. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 11 to the consolidated financial statements, in 1995 the Company changed its method of evaluating the recoverability of goodwill.
KPMG Peat Marwick LLP
Stamford, Connecticut February 26, 1997
(10)
LESLIE BUILDING PRODUCTS, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands)
(a) Represents accounts written-off net of recoveries.
(b) Represents liquidation expenses incurred, net of recoveries, in connection with disposal of discontinued operations.
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EXHIBIT INDEX
Exhibit Sequentially Number Description Numbered Page
3. Articles of Incorporation and By-laws.
3.1 Leslie Building Products, Inc. Certificate of Incorporation, as amended.
3.2 Leslie Building Products, Inc. By-laws.
Exhibits 3.1 and 3.2 are incorporated by reference to the Exhibits bearing the same numbers indicated on the Registration Statement of Leslie Building Products, Inc. on Form 10 (Registration No. 0-24094).
10. Material Contracts.
10.1 Plan and Agreement of Distribution between the Registrant and Drew Industries Incorporated, dated July 29, 1994.
10.3 Shared Services Agreement between the Registrant and Drew Industries Incorporated, dated July 29, 1994.
10.4 Tax Matters Agreement between the Registrant and Drew Industries Incorporated, dated July 29, 1994.
10.5 1994 Stock Option Plan of the Registrant and Subsidiaries, dated July 29, 1994.
10.6(a) Pension Plan for Salaried Employees of Leslie-Locke, Inc.
10.6(b) Pension Plan for Hourly Rated Employees of Leslie-Locke, Inc.
10.7 Non-competition Agreements between Leslie-Locke Acquisition Sub., Inc. and Ralph C. Pepper and James S. Roach, respectively, dated August 28, 1985.
10.12 Asset Purchase Agreement by and between White Metal Rolling and Stamping Corp. and R.D. Werner Co., Inc., dated as of November 23, 1990.
10.13 Guaranty and Non-competition Agreement given by Drew Industries Incorporated and Leslie-Locke, Inc., in favor of R.D. Werner Co., Inc., dated as of November 23, 1990.
10.14 Lease between Leslie-Locke, Inc. and Trust Company of the West, dated December 6, 1991, as amended.
10.15 Loan Agreement between Branch Banking and Trust Company ("BBT") and Leslie-Locke, Inc. dated June 21, 1993.
10.16 $4,200,000 Promissory Note of Leslie-Locke, Inc. to BBT dated June 21, 1993.
10.17 North Carolina Deed of Trust between Leslie-Locke, Inc. and BBT dated June 21, 1993.
10.18 Loan Agreement between BBT and Leslie-Locke dated July 29, 1994.
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10.19 $6,000,000 Revolving Credit Note of Leslie-Locke, Inc. to BBT dated July 29, 1994.
10.20 Security Agreement between BBT and Leslie-Locke dated July 29, 1994.
10.21 Guaranty Agreement between BBT and the Registrant dated July 29, 1994.
10.22 Supplemental Executive Retirement Plan for Leslie-Locke, effective January 1, 1994.
10.23 Loan Agreement between BBT and Leslie-Locke dated as of January 6, 1995.
10.24 Guaranty Agreement between BBT and Registrant dated as of January 6, 1995.
10.25 Amended and Restated Loan Agreement between BBT and Leslie-Locke, Inc., dated November 29, 1995.
10.26 Amended and Restated Revolving Credit Note of Leslie-Locke, Inc. to BBT, restated November 29, 1995.
10.27 Amended and Restated Security Agreement between BBT and Leslie-Locke, Inc., dated November 29, 1995.
10.28 Amended and Restated Guaranty Agreement between BBT and the Registrant, dated November 29, 1995.
10.29 1995 Second Consolidated Amendment Agreement to Loan Agreement by and among BBT, Leslie-Locke, Inc. and Registrant, dated November 29, 1995.
10.30 1995 Third Consolidated Amendment Agreement to Loan Agreement by and among BBT, Leslie-Locke, Inc. and Registrant, dated November 29, 1995.
10.31 1996 First Consolidated Amendment Agreement to November 29, 1995 Loan Agreement by and among BBT, Leslie-Locke, Inc. and Registrant, dated February 20, 1996.
Exhibits 10.1-10.5 are incorporated by reference to the Exhibits bearing the same numbers indicated on Post- Effective Amendment No. 1 on Form 10/A, dated August 30, 1994, to the Registration Statement of Leslie Building Products, Inc. on Form 10 (Registration No. 0-24094).
Exhibits 10.6(a) and 10.6(b) are incorporated by reference to the Exhibits bearing the same numbers indicated on the Registration Statement of Leslie Building Products, Inc. on Form 10 (Registration No. 0-24094).
Exhibit 10.7 is incorporated by reference to the Exhibit included in the Current Report of Drew Industries Incorporated on Form 8-K dated September 6, 1985.
Exhibits 10.12 and 10.13 are incorporated by reference to the Exhibits bearing numbers 10.121 and 10.122, respectively, included in the Current Report of Drew Industries Incorporated on Form 8-K, dated November 28, 1990.
Exhibit 10.14 is incorporated by reference to the Exhibit bearing number 10.133 included in the Annual Report of Drew Industries Incorporated on Form 10-K for the fiscal year ended August 31, 1992.
Exhibits 10.15-10.17 are incorporated by reference to the Exhibits bearing numbers 10.136, 10.137 and 10.138, respectively, included in the Annual Report of Drew Industries Incorporated on Form 10-K for the year ended December 31, 1993.
Exhibits 10.18-10.24 are incorporated by reference to the Exhibits bearing the same numbers included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994.
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Exhibits 10.25-10.31 are incorporated by reference to the Exhibits bearing the same numbers included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995.
13. 1996 Annual Report to Stockholders.
Exhibit 13 is filed herewith.
21. Subsidiaries
Exhibit 21 is filed herewith.
23. Consent of Independent Auditors.
Exhibit 23 is filed herewith.
24. Powers of Attorney.
Powers of Attorney of persons signing this Report are included as part of this Report.
(14)


Item 1. BUSINESS
General
Union Planters Corporation (the Corporation) is a $15.2-billion multi-state bank holding company whose primary business is banking. The Corporation is the largest bank holding company headquatered in Tennessee and is one of the fifty largest bank holding companies in the United States. Union Planters National Bank (UPNB), a $6.0-billion bank headquartered in Memphis, Tennessee, is the Corporation's largest subsidiary. The principal markets of the Corporation are in Tennessee, Mississippi, Missouri, Arkansas, Louisiana, Alabama, and Kentucky. These areas are served by the Corporation's 37 banking subsidiaries and through 438 banking offices and 544 ATMs. Reference is made to the 1996 Annual Report to Shareholders for a map on the inside front cover of the report showing the areas served by the Corporation; Table 15 on page 34 which presents the Corporation's banking subsidiaries by state showing total assets, loans, deposits, and shareholders' equity; and the listing of Communities Served.
As part of the Corporation's banking services, its subsidiaries are engaged in mortgage origination and servicing; investment management and trust services; the issuance of credit and debit cards; the origination, packaging, and securitization of loans, primarily the government guaranteed portions of Small Business Administration (SBA) loans; purchasing and servicing delinquent FHA/VA government-insured/guaranteed loans from third parties and GNMA pools serviced for others; full-service and discount brokerage services; and the sale of bank-eligible insurance products and services.
CERTAIN REGULATORY CONSIDERATIONS
General
As a bank holding company, the Corporation is subject to the regulation and supervision of the Federal Reserve Board under the Bank Holding Company Act of 1956 ("BHCA"). Each of the Corporation's banking subsidiaries, including its savings bank subsidiary, is a member of the Federal Deposit Insurance Corporation (FDIC) and as such its deposits are insured by the FDIC to the maximum extent provided by law.
The Corporation's banking subsidiaries which are national banking associations, including its principal subsidiary, UPNB, are subject to supervision and examination by the Office of the Comptroller of the Currency (the Comptroller) and the FDIC. State bank subsidiaries of the Corporation which are members of the Federal Reserve System are subject to supervision and examination by the Federal Reserve Board and the state banking authorities of the states in which they are located. State bank subsidiaries which are not members of the Federal Reserve System are subject to supervision and examination by the FDIC and the state banking authorities of the states in which they are located. The Corporation's savings bank subsidiary is subject to supervision and examination by the Office of Thrift Supervision (OTS). The Corporation's banking subsidiaries are subject to various requirements and restrictions, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans and other extensions of credit that may be granted and the interest that may be charged thereon and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of the banking subsidiaries. In addition to the impact of regulation, the banking subsidiaries are affected significantly by the actions of the Federal Reserve Board as it attempts to control the money supply and credit availability in order to influence the economy.
The BHCA requires every bank holding company to obtain the prior approval of the Federal Reserve Board before (i) it may acquire direct or indirect ownership or control of any voting shares of any bank if, after such acquisition, the bank holding company would directly or indirectly own or control more than 5.0% of the voting shares of the bank; (ii) it or any of its subsidiaries, other than a bank, may acquire all or substantially all of the assets of a bank; or (iii) it may merge or consolidate with any other bank holding company.
The BHCA further provides that the Federal Reserve Board may not approve any transaction that would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any section of the United States,
or the effect of which may be substantially to lessen competition or to tend to create a monopoly in any section of the country, or that in any other manner would be in restraint of trade, unless the anticompetitive effects of the proposed transaction are clearly outweighed by the public interest in meeting the convenience and needs of the community to be served. The Federal Reserve Board is also required to consider the financial and managerial resources and future prospects of the bank holding companies and banks concerned and the convenience and needs of the community to be served. Consideration of financial resources generally focuses on capital adequacy, and consideration of convenience and needs issues includes the parties' performance under the Community Reinvestment Act of 1977, as amended (the CRA), both of which are discussed below.
The BHCA, as amended by the interstate banking provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the Interstate Banking Act), which became effective on September 29, 1995, repealed the prior statutory restrictions on interstate acquisitions of banks by bank holding companies, such that the Corporation and any other bank holding company located in Tennessee may now acquire a bank located in any other state, and a bank holding company located outside Tennessee may lawfully acquire any Tennessee-based bank, regardless of state law to the contrary, in either case subject to certain deposit-percentage and other restrictions. The Interstate Banking Act also generally provides that, after June 1, 1997, national and state-chartered banks may branch interstate through acquisitions of banks in other states. By adopting legislation prior to that date, a state has the ability either to "opt in" and accelerate the date after which interstate branching is permissible or to "opt out" and prohibit interstate branching altogether. Tennessee has "opted in."
The BHCA generally prohibits the Corporation from engaging in activities other than banking or managing or controlling banks or other permissible subsidiaries and from acquiring or retaining direct or indirect control of any company engaged in any activities other than those activities determined by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. In determining whether a particular activity is permissible, the Federal Reserve Board must consider whether the performance of such an activity reasonably can be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency that outweigh possible adverse effects such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. For example, factoring accounts receivable, acquiring or servicing loans, leasing personal property, conducting discount securities brokerage activities, performing certain data processing services, acting as agent or broker in selling credit life insurance and certain other types of insurance in connection with credit transactions, and performing certain insurance underwriting activities have all been determined by the Federal Reserve Board to be permissible activities of bank holding companies. The BHCA does not place territorial limitations on permissible nonbanking activities of bank holding companies. Despite prior approval, the Federal Reserve Board has the power to order a bank holding company or its subsidiaries to terminate any activity or to terminate its ownership or control of any subsidiaries when it has reasonable cause to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any bank subsidiary of that bank holding company.
CAPITAL
The Federal Reserve Board has adopted risk-based capital guidelines for bank holding companies. The minimum guideline for the ratio (Risk-Based Capital Ratio) of total capital (Total Capital) to risk-weighted assets (including certain off-balance-sheet activities such as standby letters of credit) is 8%. At least half of the Total Capital must be composed of Tier 1 Capital, which consists of common shareholders' equity, minority interests in the equity accounts of consolidated subsidiaries, noncumulative perpetual preferred stock and a limited amount of cumulative perpetual preferred stock, less goodwill and excluding the unrealized gain or loss, net of taxes, on available for sale securities. The remainder, which is "Tier 2 Capital," may consist of limited amounts of subordinated debt (or certain other qualifying debt issued prior to March 12, 1988), other preferred stock and a limited amount of loan loss reserves.
In addition, the Federal Reserve Board has established minimum leverage ratio guidelines for bank holding companies. These guidelines provide for a minimum ratio of Tier 1 Capital to average total assets less goodwill (the Leverage Ratio) of 3% for bank holding companies that meet certain specified criteria, including those having the highest regulatory rating. All other bank holding companies generally are required to maintain a Leverage Ratio of at least 3% (up to 5% in the case of institutions effecting acquisitions and other activities resulting in expansion). The guidelines also provide that bank holding companies experiencing internal growth or making acquisitions are expected to maintain strong capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. Furthermore, the Federal
Reserve Board has indicated that it will consider a "tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other indicia of capital strength in evaluating proposals for expansion or new activities. The Federal Reserve Board has not advised the Corporation of any specific minimum Leverage Ratio applicable to the Corporation.
The federal bank regulatory agencies maintain the Risk-Based Capital guidelines for banks and bank holding companies under continuing review. Banks are required to give explicit consideration to interest-rate risk as an element of capital adequacy by maintaining capital to compensate for such risk in an amount measured by the bank's exposure to interest-rate risk in excess of a regulatory threshold. A proposal recently issued by the Federal Reserve Board and joined in by the other bank regulatory agencies increases the amount of capital required to be carried against certain long-term derivative contracts; in addition, the proposal recognizes the effect of certain bilateral netting arrangements in reducing potential future exposure under these contracts. The Corporation's Management believes that these changes, if adopted, will not have a material effect on the Corporation's compliance with capital adequacy requirements.
Failure to meet regulatory capital requirements can subject an institution to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, and a prohibition on the taking of brokered deposits. As described below, substantial additional restrictions can be imposed upon FDIC-insured institutions that fail to meet applicable capital requirements. See "Prompt Corrective Action" discussion below.
At December 31, 1996, the Corporation's Total Risk-Based Capital Ratio was 18.32%; its Tier I Risk-Based Capital Ratio (i.e., its ratio of Tier I Capital to risk-weighted assets) was 15.29%; and its Leverage Ratio was 9.61%. In addition, each of the Corporation's banking subsidiaries satisfied the minimum capital requirements applicable to it and had the requisite capital levels to qualify as a "well-capitalized" institution under the prompt corrective action provision discussed below.
Each of the Corporation's banking subsidiaries is subject to Risk-Based and Leverage Capital Ratio requirements adopted by their respective federal regulators which are substantially similar to those adopted by the Federal Reserve Board. As of December 31, 1996, the Total and Tier I Risk-Based Capital and Leverage Ratios of UPNB, the Corporation's largest bank subsidiary, were 12.26%, 11.01%, and 6.95%, respectively. Neither the Corporation nor any of the banking subsidiaries has been advised by any federal banking agency of any specific minimum capital ratio requirement applicable to it.
PROMPT CORRECTIVE ACTION
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), and the joint regulations thereunder adopted by the federal banking agencies, require the banking regulators to take prompt corrective action in respect of depository institutions that do not meet their minimum capital requirements. FDICIA establishes five capital tiers: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," and "critically undercapitalized." Under capital regulations, a bank is defined to be well capitalized if it maintains a Leverage Ratio of at least 5%, a Tier 1 Risk-Based Capital Ratio of at least 6% and a Total Risk-Based Capital Ratio of at least 10% and is not otherwise in a "troubled condition" as determined by its appropriate federal regulatory agency. A bank is defined to be adequately capitalized if it meets all of its minimum capital requirements as described under "Capital" above. In addition, a bank will be considered "undercapitalized" if it fails to meet any minimum required measure, "significantly undercapitalized" if it is significantly below such measure, and "critically undercapitalized" if it fails to maintain a level of tangible equity equal to not less than 2% of total assets. A bank may be deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it receives an unsatisfatory examination rating.
Regardless of their capital levels, all institutions are restricted from making any capital distribution or paying any management fees that would cause the institution to fail to satisfy the minimum levels required to be considered adequately capitalized. An undercapitalized institution is: (i) subject to increased monitoring by the appropriate federal banking regulator; (ii) required to submit an acceptable capital restoration plan within 45 days; (iii) subject to asset growth limits; and (iv) required to obtain prior regulatory approval for acquisitions, branching, and new lines of business. Such capital restoration plan must include a guarantee by the institution's holding company that the institution will comply with the plan until it has been adequately capitalized on average for four consecutive quarters. Pursuant to the guarantee, the institution's holding company would be liable up to the lesser of 5% of the institution's total assets or the amount necessary to bring the institution into capital compliance as of the
date it failed to comply with its capital restoration plan. If the controlling bank holding company should fail to fulfill its obligations under the guarantee and should file (or should have filed against it) a petition under the Federal Bankruptcy Code, the appropriate federal banking regulator could have a claim as a general creditor of the bank holding company and, if the guarantee were deemed to be a commitment to maintain capital under the Federal Bankruptcy Code, the claim would be entitled to priority in such bankruptcy proceeding over third-party creditors of the bank holding company.
The regulatory agencies have discretionary authority to reclassify well-capitalized institutions as adequately capitalized or to impose on adequately capitalized institutions requirements or actions specified for undercapitalized institutions if the agency should determine after notice and an opportunity for hearing that the institution is in an unsafe or unsound condition or is engaging in an unsafe or unsound practice, which can consist of the receipt of an unsatisfactory examination rating if the deficiencies cited are not corrected. A significantly undercapitalized institution, as well as any undercapitalized institution which should fail to submit an acceptable capital restoration plan, may be subject to regulatory demands for recapitalization; broader application of restrictions on transactions with affiliates; limitations on interest rates paid on deposits, asset growth, and other activities; possible replacement of directors and officers; and restrictions on capital distributions by any bank holding company controlling the institution. Any persons controlling the institution could not receive bonuses or increases in compensation without prior regulatory approval and the institution is prohibited from making payments of principal or interest on its subordinated debt. If an institution should become critically undercapitalized, the institution would be subject to conservatorship or receivership within 90 days unless periodic determinations are made that forbearance from such action would better protect the deposit insurance fund. Unless appropriate findings and certifications are made by the appropriate federal bank regulatory agencies, a critically undercapitalized institution must be placed in receivership if it should remain critically undercapitalized on average during the calendar quarter beginning 270 days after the date it became critically undercapitalized.
COMMUNITY REINVESTMENT
All of the Corporation's banking subsidiaries are subject to the provisions of the CRA and the federal banking agencies' other implemented regulations. Under the CRA, all financial institutions have a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of their entire communities, including low-to-moderate income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. The CRA requires the federal banking agencies, in connection with their examination of a depository institution, to assess the institution's record in assessing and meeting the credit needs of the community served by that institution, including low-to-moderate income neighborhoods. The regulatory agency's assessment of the institution's record is made available to the public. Further, such assessment is required of any institution which has applied to: (i) charter a national bank; (ii) obtain deposit insurance coverage for a newly chartered institution; (iii) establish a new branch office that will accept deposits; (iv) relocate an office; or (v) merge or consolidate with, or acquire the assets or assume the liabilities of, a federally regulated financial institution. In the case of a bank holding company applying for approval to acquire a bank or bank holding company, the Federal Reserve Board will assess the records of each subsidiary depository institution of the applicant bank holding company, and such records may be the basis for denying the application. Based on their most recent CRA compliance examinations, the Corporation's subsidiary banks and thrifts all received at least a "satisfactory" CRA rating.
Since December 1993, the federal banking agencies had had under consideration a revision of their CRA regulations in order to provide clearer guidance to depository institutions on the nature and extent of their CRA obligations and the methods by which those obligations would be assessed and enforced. In response to widespread criticism of the December 1993 proposal, the agencies on September 26, 1994, issued a revised proposal which was adopted substantially as proposed on April 17, 1995. Under these new CRA regulations, which are now effective, the earlier process-based CRA assessment factors were replaced with a new evaluation system which would rate institutions based on their actual performance in meeting community credit needs. The evaluation system used to judge an institution's CRA performance consists of three tests: a lending test; an investment test; and a service test. Each of these tests will be applied by the institution's federal regulator in an assessment context that would take into account such factors as: (i) demographic data pertaining to the community, (ii) the institution's capacity and constraints, (iii) the institution's product offerings and business strategy, and (iv) data on the prior
performance of the institution and similarly situated lenders. The new lending test -- the most important of the three tests for all institutions other than wholesale and limited purpose (e.g., credit card) banks -- will be used to evaluate an institution's lending activities as measured by its home-mortgage loans, small business and farm loans, community-development loans and, at the option of the institution, its consumer loans. The institution's regulator will weigh each of these lending categories to reflect their relative importance to the institution's overall business and, in the case of community development loans, the characteristics and needs of the institution's service area and the opportunities available for this type of lending. Assessment criteria for the lending test will include: (i) geographical distribution of the institution's lending; (ii) distribution of the institution's home mortgage and consumer loans among different economic segments of the community; (iii) the number and amount of small business and small farm loans made by the institution; (iv) the number and amount of community-development loans outstanding; and (v) the institution's use of innovative or flexible lending practices to meet the needs of low-to-moderate income individuals and neighborhoods. At the election of an institution or if particular circumstances so warrant, the banking agencies will take into account in making their assessments lending by the institution's affiliates as well as community-development loans made by the lending consortia and other lenders in which the institution has invested. As part of the new regulation, all financial institutions will be required to report data on their small business and small farm loans as well as their home mortgage loans, which are currently required to be reported under the Home Mortgage Disclosure Act.
The focus of the investment test will be the degree to which the institution is helping to meet the needs of its service area through qualified investments that (i) benefit low-to-moderate income individuals and small businesses or farms, (ii) address affordable housing needs, or (iii) involve donations of branch offices to minority or women's depository institutions. Assessment of an institution's performance under the investment test will be based upon the dollar amount of the institution's qualified investments, its use of innovative or complex techniques to support community-development initiatives, and its responsiveness to credit and community-development needs. The service test will evaluate an institution's systems for delivering retail banking services, taking into account such factors as (i) the geographical distribution of the institution's branch offices and ATMs, (ii) the institution's record of opening and closing branch offices and ATMs, and (iii) the availability of alternate product-delivery systems such as home banking and loan production offices in low-to-moderate income areas. The federal regulators will also consider an institution's community-development service as part of the service test. A separate community-development test will be applied to wholesale or limited purpose financial institutions.
Smaller institutions, i.e, those having total assets of less than $250 million, will be evaluated under more streamlined criteria. In addition, a financial institution will have the option of having its CRA performance evaluated based on a strategic plan of up to five years in length that is developed in cooperation with local community groups. In order to be rated under a strategic plan, the institution will be required to obtain the prior approval of its federal regulator.
The joint agency CRA regulation provides that an institution evaluated under a given test will receive one of five ratings for that test: outstanding, high satisfactory, low satisfactory, needs to improve, or substantial noncompliance. An institution will then receive a certain number of points for its rating on each test and the points will be combined to produce an overall composite rating of either outstanding, satisfactory, needs to improve, or substantial non-compliance. Under the agencies' rating guidelines, an institution that receives an "outstanding" rating on the lending test will receive a rating of at least "satisfactory", and no institution can receive an overall rating of "satisfactory" unless it receives a rating of at least "low satisfactory" on its lending test. In addition, evidence of discriminatory or other illegal credit practices would adversely affect an institution's overall rating. Under the new regulations, an institution's CRA rating would continue to be taken into account by its regulator in considering various types of applications.
DIVIDEND RESTRICTIONS
The Corporation is a legal entity separate and distinct from its banking subsidiaries and its nonbanking subsidiaries. The Corporation's revenues (on a parent company only basis) result, in significant part, from dividends paid to the Corporation by its subsidiaries. The right of the Corporation, and consequently the rights of creditors and shareholders of the Corporation, to participate in any distribution of the assets or earnings of any subsidiary through the payment of such dividends or otherwise is necessarily subject to the prior claims of creditors of the subsidiary (including depositors, in the case of banking subsidiaries) except to the extent that claims of the Corporation in its capacity as a creditor may be recognized.
There are statutory and regulatory requirements applicable to the payment of dividends to the Corporation by its banking subsidiaries. Each national banking association subsidiary of the Corporation is required by federal law to obtain the prior approval of the Comptroller for the declaration of dividends if the total of all dividends to be declared by the board of directors of such bank in any year would exceed the total of (i) such bank's net profits (as defined and interpreted by regulation) for that year, plus (ii) the retained net profits (as defined and interpreted by regulation) for the preceding two years, less any required transfers to surplus. In addition, national banks may only pay dividends to the extent that their retained net profits (including the portion transferred to surplus) exceed statutory bad debts (as defined by regulation). The Corporation's state-chartered banking subsidiaries are subject to similar restrictions on the payment of dividends by the respective state laws under which they are organized. Furthermore, as described above under "Prompt Corrective Action," all depository institutions are prohibited from paying any dividends, making other distributions, or paying any management fees if, after such payment, the depository institution would fail to satisfy its minimum capital requirements. In accordance with the specified calculations, at January 1, 1997, approximately $86.0 million was available for distribution to the Corporation without obtaining prior regulatory approval. Future dividends will depend upon the level of earnings of the banking subsidiaries of the Corporation. It is the policy of the Federal Reserve Board that bank holding companies should pay dividends only out of current earnings. Federal banking regulators also have the authority to prohibit banks and bank holding companies from paying a dividend if they should deem such payment to be an unsafe or unsound practice.
SUPPORT OF BANKING SUBSIDIARIES
Under Federal Reserve Board policy, the Corporation is expected to act as a source of financial strength to its banking subsidiaries and, where required, to commit resources to support each of such subsidiaries. This support may be required at times when, absent such Federal Reserve Board policy, the Corporation may not be inclined to provide it. Moreover, if one of its banking subsidiaries should become undercapitalized, under FDICIA the Corporation would be required to guarantee the subsidiary bank's compliance with its capital plan in order for such plan to be accepted by the federal regulatory authority. See discussion under "Prompt Corrective Action" above.
Under the "cross guarantee" provisions of the Federal Deposit Insurance Act (the FDI Act), any FDIC-insured subsidiary of the Corporation may be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the "default" of any other commonly controlled FDIC-insured subsidiary or (ii) any assistance provided by the FDIC to any commonly controlled FDIC-insured subsidiary "in danger of default." "Default" is defined generally as the appointment of a conservator or receiver and "in danger of default" is defined generally as the existence of certain conditions indicating that a default is likely to occur in the absence of regulatory assistance.
Because it is a bank holding company, any capital loans made by the Corporation to its banking subsidiaries are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. In the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a banking subsidiary will be assumed by the bankruptcy trustee and entitled to a priority of payment over certain other creditors of the bank holding company, including the holders of its subordinated debt.
TRANSACTIONS WITH AFFILIATES
Provisions of the Federal Reserve Act impose restrictions on the type, amount and quality of transactions between "affiliates" (as defined below) of an insured bank and the insured bank (including a bank holding company and its nonbank subsidiaries). The purpose of these restrictions is to prevent misuse of the resources of the insured institution by its uninsured affiliates. An exception to most of these restrictions is provided for transactions between two insured banks that are within the same holding company where the holding company owns 80% or more of each of these banks (the sister bank exception). The restrictions also do not apply to transactions between an insured bank and its wholly owned subsidiaries. These restrictions include limitations on the purchase and sale of assets and extensions of credit by the insured bank to its holding company or its nonbank subsidiaries. An insured bank and its subsidiaries are limited in engaging in "covered transactions" with their nonbank or nonsavings-bank affiliates to the following amounts: (i) in the case of any one such affiliate, the aggregate amount of covered transactions of the insured bank and its subsidiaries may not exceed 10% of the capital stock and surplus of the insured bank and (ii) in the case of all affiliates, the aggregate amount of covered transactions of the insured bank and its subsidiaries may not exceed 20% of the capital
stock and surplus of the bank. "Covered transactions" are defined by statute to include loans or other extensions of credit as well as purchases of securities issued by an affiliate, purchases of assets (unless otherwise exempted by the Federal Reserve Board), the acceptance of securities issued by the affiliate as collateral for a loan and the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate. Further, provisions of the BHCA, as amended, prohibit a bank holding company and its subsidiaries from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property or furnishing of services. As used herein, "affiliate" means generally any company that controls the insured bank, a company which is under common control with the insured bank and a subsidiary of the insured bank.
FDIC DEPOSIT INSURANCE
Currently, certain deposits of financial institutions are separately insured under two deposit-insurance funds, both administered by the FDIC. They are the Bank Insurance Fund (the BIF) for deposits originated by banks and the Savings Association Insurance Fund (the SAIF) for deposits originated by savings associations. The targeted designated reserve ratio (DRR), i.e, the ratio of the net worth of each of the two funds to the aggregate amount of deposits insured by it, is 1.25%. Significant claims made against the two funds, especially the SAIF, have been paid over recent years due to failures of banks and savings associations. Through deposit-insurance assessments made by the FDIC, the BIF's DRR was restored to 1.25% of insured deposits in 1995; however, at September 30, 1996, approximately $4.5 billion was required to restore the SAIF's DRR to that level. On that date the Deposit Insurance Funds Act of 1996 (the Funds Act) became law. The Funds Act required the FDIC to impose a one-time assessment on SAIF-assessable deposits (including 80% of those which had been acquired by banks, i.e., so-called "Oakar" Deposits) sufficient to capitalize the SAIF at its targeted DRR of 1.25%. In response, the FDIC imposed an assessment of 65.7 basis points ($6.57 per $1,000) on SAIF-assessable deposits deemed to have been held as of March 31, 1995. Since certain of its banking subsidiaries held SAIF-assessable (including "Oakar") deposits, the Corporation incurred a SAIF-assessment expense of $22.3 million at September 30, 1996. Since the recapitalization of both the BIF and SAIF has increased their DRR's to 1.25% and since financial institution failures have dramatically decreased, in the near future financial institutions, including the Corporation, are expected to have significantly lower deposit insurance assessments than have been imposed in the recent past. Moreover, the FDIC establishes deposit insurance assessment rates based primarily upon an institution's risk to the deposit insurance funds such that the Corporation's banking subsidiaries, all of which are deemed to be "well capitalized" for regulatory purposes, should enjoy favorable rates in the event that further assessments should be necessary.
Under the Funds Act, the BIF and the SAIF would be merged on the date as of which the last savings association shall cease to exist. The SAIF was initially funded by issuance of Financing Corporation bonds (the FICO Bonds). The Funds Act provides that 20% of the interest payable on the FICO Bonds shall be assessed against BIF-assessable deposits and the remaining 80% against SAIF-assessable deposits prior to the merger of the BIF and SAIF to form the Deposit Insurance Fund (the DIF). After the merger, DIF-assessable deposits would be assessed for 100% of the FICO Bond interest, since the separate existence of the BIF and SAIF would have ceased.
BROKERED DEPOSITS
The FDIC has adopted regulations governing the receipt of brokered deposits. Under the regulations, a bank may not lawfully accept, roll over or renew brokered deposits unless (i) it is well capitalized or (ii) it is adequately capitalized and receives a waiver from the FDIC. A bank that may not receive brokered deposits also may not offer "pass-through" insurance on certain employee benefit accounts. Whether or not it has obtained such a waiver, an adequately capitalized bank may not pay an interest rate on any deposits in excess of 75 basis points over certain prevailing market rates specified by regulation. There are no such restrictions on a bank that is well capitalized. Because the Corporation's banking subsidiaries at December 31, 1996, had the requisite capital levels to qualify as well capitalized institutions, the Corporation believes the brokered deposits regulation will have no material effect on the funding or liquidity of any of its banking subsidiaries.
SAFETY AND SOUNDNESS STANDARDS
The FDI Act, as amended by the FDICIA and the Riegle Community Development and Regulatory Improvement Act of 1994, requires the federal bank regulatory agencies to prescribe standards, by regulations or guidelines, relating to the internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest-rate-risk exposure, asset growth, asset quality, earnings, stock valuation and compensation, fees and benefits and such other operational and managerial standards as the agencies may deem appropriate. The federal
bank regulatory agencies adopted, effective August 9, 1995, a set of guidelines prescribing safety and soundness standards pursuant to FDICIA, as amended. The guidelines establish general standards relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest-rate exposure, asset growth and compensation, fees and benefits. In general, the guidelines require, among other things, appropriate systems and practices to identify and manage the risks and exposures specified in the guidelines. The guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director, or principal stockholder. The federal banking agencies determined that stock valuation standards were not appropriate. In addition, the agencies adopted regulations that authorize, but do not require, an agency to order an institution that has been given notice by an agency that it is not satisfying any one or more of such safety and soundness standards to submit a compliance plan. If, after being so notified, an institution should fail to submit an acceptable compliance plan or should fail in any material respect to implement an accepted compliance plan, the agency must issue an order directing action to correct the deficiency and may issue an order di recting other actions of the types to which an undercapitalized association is subject under the "prompt correction action" provisions of FDICIA. See "Prompt Corrective Action" above. If an institution should fail to comply with such an order, the agency may seek to enforce such order in judicial proceedings and to impose civil money penalties. The federal bank regulatory agencies also proposed guidelines for asset quality earning standards.
DEPOSITOR PREFERENCE
Legislation recently enacted by Congress establishes a nationwide depositor-preference rule in the event of a bank failure. Under this arrangement all deposits and certain other claims against a bank, including the claim of the FDIC as subrogee of insured depositors, would receive payment in full before any general creditor of the bank, including the holders of its subordinated debt securities, would be entitled to any payment in the event of an insolvency or liquidation of the bank.
PROPOSED LEGISLATION
Because of concerns relating to the competitiveness and the safety and soundness of the industry, the Congress continues to consider a number of wide-ranging proposals for altering the structure, regulation, and competitive relationships of the nation's financial institutions. Among such bills are proposals to combine banks and thrifts into a unified charter, to alter the statutory separation of commercial and investment banking, and to further expand the powers of depository institutions, bank holding companies, and competitors of depository institutions. It cannot be predicted whether, or in what form, any of these proposals will be adopted or the extent to which the business of the Corporation may be affected thereby.
PERSONNEL
As of February 28, 1997, the Corporation, including all subsidiaries, had 5,236 employees (including 1,259 part-time employees).
Statistical Disclosures
The statistical information required by Item 1 may be found in the 1996 Annual Report to Shareholders (Exhibit 13 hereto) which, to the extent indicated, is hereby incorporated herein by reference, as follows:
*Unless otherwise noted
The following table presents the maturities and sensitivities of the Corporation's loans to changes in interest rates at December 31, 1996:
The following table presents maturities of certificates of deposit of $100,000 and over and other time deposits of $100,000 and over:
Item 1a.

Item 1a. Executive Officers of the Registrant
The following lists the executive officers of the Corporation. Information regarding the executive officers, their present positions held with the Corporation and its subsidiaries, their ages, and their principal occupations for the last five years are as follows:
Mr. Rawlins has been Chairman of the Board of the Corporation since April 1989, and Chairman of the Board of UPNB from January 1986 until December 1996 when he was elected Vice Chairman. He has also served as Chief Executive Officer of the Corporation and UPNB since September 1984. Mr. Rawlins was President of the Corporation from September 1984 until he was elected Chairman.
Mr. Moore has been President of the Corporation since April 1989. In April 1994, Mr. Moore was elected Chief Operating Officer of the Corporation. He is also Chairman of PSB Bancshares, Inc., and is a Vice President and Director of its subsidiary, The Peoples Savings Bank (not an affiliate bank of the Corporation), located in Clanton, Alabama. He has served on the Boards of the Corporation and UPNB since 1986.
Mr. Parker has been Executive Vice President and Chief Financial Officer of the Corporation and UPNB since March 1990. From 1987 until being elected to these positions with the Corporation, he was an Executive Vice President of UPNB and President of the Mortgage Banking Group of UPNB.
Mr. Walters was elected Senior Vice President of the Corporation in November 1990 and has been Chief Accounting Officer since February 1990. He has been Treasurer of the Corporation since 1985. He was a Vice President of the Corporation from 1975 until he was elected to his current position. Mr. Walters has been an officer of UPNB for more than twenty years and is currently a Senior Vice President.
Mr. Gurley was elected Executive Vice President of the Corporation in November 1990. He was a Vice President of the Corporation from 1980 until he was elected Executive Vice President. He has been an officer of UPNB for more than twenty years and is currently an Executive Vice President.
Item 2.

Item 2. Properties
The Corporation's corporate headquarters are located in the company-owned Union Planters Administrative Center at 7130 Goodlett Farms Parkway, Memphis, Tennessee, a two-building complex located near the center of Shelby County. In addition to being the corporate headquarters, it contains approximately 250,000 square feet of space and houses BankCards, Mortgage Servicing and Origination, Funds Management, Data Processing, Operations, Human Resources, Financial, Legal, Credit and Review, Marketing, and Alternative Investments and Insurance Products. A 126,000-square-foot addition is being made to the Administrative Center to accommodate the growth related to the recent acquisitions, primarily the Leader Financial Corporation (Leader) acquisition. The
total estimated cost of this addition, including site improvements, is $12.3 million. Certain space occupied previously by Leader will be vacated and its occupants will be moved to the new building which is expected to be more efficient than the existing space. Savings are expected from this move but the amount thereof cannot be quantified at this time.
UPNB's headquarters is located in a 70,000 square-foot company-owned building in East Memphis. In addition to its headquarters, the building also houses UPNB's Commercial Group, Trust Group, Brokerage Services, and Retail Group Administration.
As of March 1, 1997, the Corporation operated 198 banking offices in Tennessee, 115 in Mississippi, 45 in Missouri, 42 in Arkansas, 16 in Louisiana, 17 in Alabama, and 5 locations in Kentucky. The majority of these locations are owned. The subsidiaries also operate 544 twenty-four-hour automated teller locations.
There are no material encumbrances on any of the company-owned properties.
Item 3.

Item 3. Legal Proceedings
The Corporation and/or various subsidiaries are parties to various pending civil actions, all of which are being defended vigorously. Additionally, the Corporation and/or its subsidiaries are parties to various legal proceedings that have arisen in the ordinary course of business. Management is of the opinion, based upon present information including evaluations of outside counsel, that neither the Corporation's financial position, results of operations, nor liquidity will be materially affected by the ultimate resolution of pending or threatened legal proceedings.
The Corporation's five banks located in Mississippi: Union Planters Bank of Mississippi, Union Planters Bank of Southern Mississippi, Union Planters Bank of Central Mississippi, Union Planters Bank of Northeast Mississippi,N.A., and Union Planters Bank of Northwest Mississippi (UPC Banks) are defendants in various suits related to the placement of collateral protection insurance(CPI) by the UPC Banks in the 1980s and early 1990s. On September 28,1995 and October 18,1995, two purported class actions were filed in the U. S. District Court for the Southern District of Mississippi. Both actions were consolidated and identified Vivian McCaskill as the representative of a class of persons who financed personal property through the UPC Banks and were force placed with Prudential Property and Casualty Insurance Company's (Prudential) collateral protection insurance. The consolidated action names as defendants the UPC Banks, Prudential, National Underwriters of Delaware, Inc., and several Ross & Yerger entities and includes allegations that premiums were excessive and improperly calculated; coverages were improper and not disclosed; and improper payments were paid to the UPC Banks by the insurance companies, allegedly constituting violations of various state and federal laws and the common law. The relief sought in the purported class actions includes actual damages, treble damages under certain statutes, other statutory damages, and unspecified punitive damages. The CPI programs appear to have been substantially similar in many respects to CPI programs of other Mississippi banks, often with the same insurance companies. Consequently, there are at least twelve similar putative class actions pending against numerous Mississippi banks (including those against the UPC Banks), various insurance agencies and companies arising from their CPI programs. Nine individual actions filed in state and federal courts against the UPC Banks, with similar allegations, and seeking compensatory and punitive damages, are pendi ng. Other subsidiaries of the Corporation are involved in similar litigation relating to CPI on mobile home loans to Alabama borrowers. On June 8,1995, a suit was filed in Greene County, Alabama, by Jeri Lynn Plowman and other individuals against American Bankers Insurance Company of Florida, Inc., Leader Federal Savings and Loan Association of Memphis and seventeen other defendants requesting $200 million in punitive damages against each defendant (Plowman). On June 14, 1995, a counterclaim to a foreclosure suit was filed by the defendants in Leader Federal Bank v. Brown, et al (Brown) in the Circuit Court of Tuscaloosa County, Alabama, demanding judgment for compensatory damages and punitive damages of $10 million for alleged wrongdoing with respect to the CPI related to the defendant's loan. An agreement to settle Plowman and Brown was reached, and approval of the Circuit Court of Tuscaloosa County, Alabama, obtained (certifying as a class all Alabama residents whose mobile home loans were originated or assigned to Leader Federal and were charged for CPI from January 1, 1986 through October 1, 1996), in the fourth quarter of 1996, within amounts previously established. In January 1996, two individual suits were filed by Queen Ford (who was excepted from the class described above) in the Circuit Court of Greene, County Alabama, against Leader Federal Bank for Savings, a subsidiary, and an unrelated insurance company alleging wrongful placement of insurance on plaintiff's mobile home. One such case demands compensatory damages of $5,000 and punitive damages of $20 million, while the other seeks $10,000 in compensatory damages and $50 million in punitive damages. These suits remain pending.
In July 1991, UPNB was joined with nine other banks( including Leader Federal) as defendants in a civil action in the Circuit Court of Shelby County, Tennessee, which, as ultimately amended, alleged that the banks unlawfully conspired to fix the charges for checks drawn on insufficient funds and sought recovery for fees charged for deposited third-party checks which were returned uncollected. In March 1992, the state court proceeding was dismissed, which dismissal the Tennessee Court of Appeals affirmed. In 1995, the Tennessee Supreme Court reversed its earlier decision declining to review the state court action and agreed to hear plaintiffs' appeal. During the first quarter of 1997, the Tennessee Supreme Court denied plaintiff's petition and petition to rehear, thus terminating this action. A related federal court action was terminated during the first quarter of 1996.
Part II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The information required by Item 5 is included in Table 14 captioned "Selected Quarterly Data" included in the Corporation's 1996 Annual Report to Shareholders on pages 32 and 33, which information is incorporated herein by reference.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6 is included under the heading "Selected Financial Data" in the Corporation's 1996 Annual Report to Shareholders on page 4, which information is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by Item 7 is included under the heading "Management's Discussion and Analysis of Results of Operations and Financial Condition" in the Corporation's 1996 Annual Report to Shareholders on pages 5 - 35, which information is incorporated herein by reference.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 is included in the Corporation's 1996 Annual Report to Shareholders on pages 36 - 67, and in Table 14 captioned "Selected Quarterly Data" on pages 32 and 33, which pages are incorporated herein by reference.
Part III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 as to the directors of the Corporation is included under the heading "Proposal I: Election of Directors" on pages 1 - 5 and under the heading "Director Compensation" on page 6 of the definitive proxy statement of the Corporation to be used in soliciting proxies for the Annual Meeting of shareholders to be held on April 17, 1997 ("Proxy Statement"), which information is incorporated herein by reference.
The information concerning "Executive Officers of the Registrant" is included in Part I (Item 1a) of this Form 10-K in accordance with Instruction 3 to paragraph (b) of Item 401 of Regulation S-K.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 as to compensation of directors and executive officers is included under the heading "Proposal I: Election of Directors" on pages 1 - 5 and under the heading "Certain Information as to Management" on pages 12 - 20 of the Proxy Statement, which information is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 as to certain beneficial owners and management is included under the heading "Proposal I: Election of Directors" on pages 1 - 5 of the Proxy Statement, which information is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 as to transactions and relationships with certain directors and executive officers of the Corporation and their associates is included under the heading "Certain Relationships and Transactions" on page 20 of the Proxy Statement, which information is incorporated herein by reference.
Part IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) The following audited consolidated financial statements of Union Planters Corporation and Subsidiaries, included in the Corporation's 1996 Annual Report to Shareholders, are incorporated herein by reference in response to Part II, Item 8:
(a)(2) All schedules have been omitted, since the required information is either not applicable, not deemed material, or is included in the respective consolidated financial statements or in the notes thereto.
(a)(3) Exhibits:
The exhibits listed in the Exhibit Index on pages i and ii, following page 18 of this Form 10-K are filed herewith or are incorporated herein by reference.
(b) Reports on Form 8-K:
Date of Current Report Subject ---------------------- ------------------------------------- October 7, 1996 Announcing consummation of Leader Financial Corporation acquisition and completion of three other acquisitions
October 17, 1996 Press Release announcing Third Quarter
January 16, 1997 Press Release announcing Fourth Quarter 1996 and annual operating results
SIGNATURES
Pursuant to the requirements of Sections 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.
UNION PLANTERS CORPORATION
(Registrant)
By: /s/ Benjamin W. Rawlins, Jr. ---------------------------------------------------- Benjamin W. Rawlins, Jr., Chairman of the Board and Chief Executive Officer
Date March 6, 1997
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 indicated on the 6th day of March, 1997.
/s/ Benjamin W. Rawlins, Jr. /s/ Jack W. Parker - -------------------------------------- ------------------------------ Benjamin W. Rawlins, Jr. Jack W. Parker Chairman of the Board, Executive Vice President and Chief Executive Officer, Chief Financial Officer and Director
/s/ Jackson W. Moore /s/ M. Kirk Wallers - -------------------------------------- ------------------------------ Jackson W. Moore M. Kirk Walters President, Chief Operating Officer, Senior Vice President, and Director Treasurer and Chief Accounting Officer
/s/ Stanley D. Overton - -------------------------------------- ------------------------------- Albert M. Austin Stanley D. Overton Director Director
/s/ Edgar H. Bailey /s/ Dr. V. Lane Rawlins - -------------------------------------- ------------------------------- Edgar H. Bailey Dr. V. Lane Rawlins Vice Chairman of the Board and Director Director
/s/ Donald F. Schuppe - -------------------------------------- ------------------------------- Marvin E. Bruce Donald F. Schuppe Director Director
/s/ George W. Bryan - -------------------------------------- ------------------------------- George W. Bryan Mike P. Sturdivant Director Director
/s/ Robert B. Colbert, Jr. /s/ Richard A. Trippeer, Jr. - -------------------------------------- ------------------------------- Robert B. Colbert, Jr. Richard A. Trippeer, Jr. Director Director
/s/ James E. Harwood /s/ Spence L. Wilson - -------------------------------------- ------------------------------- James E. Harwood Spence L. Wilson Director Director
/s/ Parnell S. Lewis, Jr. - -------------------------------------- ------------------------------- Parnell S. Lewis, Jr. Milton J. Womack Director Director
/s/ C.J. Lowrance III - -------------------------------------- C.J. Lowrance III Director
Exhibit Index
3(a) Restated Charter of Incorporation, as most recently amended on February 20, 1997, of Union Planters Corporation (filed herewith)
3(b) Amended and Restated Bylaws, as most recently amended on February 20, 1997, of Union Planters Corporation (filed herewith)
4(a) Rights Agreement, dated January 19, 1989 between Union Planters Corporation and Union Planters National Bank, including Form of Rights Certificate (Exhibit A), and a Form Summary of Rights (Exhibit B) (incorporated by reference to Exhibit 1 to Union Planters Corporation's Registration Statement on Form 8-A dated as of January 19, 1989 and on Form 8-K filed February 1, 1989, Commission File No. 0-6919)
4(b) Indenture dated as of October 1, 1992 between Union Planters Corporation and The First National Bank of Chicago (Trustee) for $40,250,000 of 8 1/2% Subordinated Notes due 2002 (2)
4(c) Subordinated Indenture dated as of October 15, 1993 between the Corporation and The First National Bank of Chicago as Trustee (3)
4(d) Form of Subordinated Debt Security (6.25% Subordinated Notes due 2003) (4)
4(e) Form of Subordinated Debt Security (6 3/4% Subordinated Notes due 2005) (5)
4(f) All instruments defining the rights of the holders of the "Corporation-obligated Mandatorily Redeemable Capital Pass-through Securities of Subsidiary Trust holding solely a Corporation Guaranteed Related Subordinated Note issued by Union Planters Corporation," including the Indenture dated as of December 12, 1996, the First Supplemental Indenture, the Amended and Restated Declaration of Trust, the Capital Securities Guarantee Agreement and the Global Securities representing the interests of such holders, which instruments are not being filed herewith in reliance upon Item 601(b)(4)(iii)(A) of Regulation S-K and the related AGREEMENT PURSUANT TO ITEM 601(b)(4)(iii)(A) OF REGULATION S-K dated March 16, 1997 of Union Planters Corporation filed with the Commission, a copy of which is Exhibit 4(g) hereto
4(g) Copy of Registrant's AGREEMENT PURSUANT TO ITEM 601(b)(4)(iii)(A) OF REGULATION S-K dated March 16, 1997 (filed herewith)
10(a) Employment Agreement between Union Planters Corporation and Benjamin W. Rawlins, Jr., dated December 21, 1989 (incorporated by reference to Exhibit 10(a) to the Annual Report on Form 10-K dated December 31, 1992, Commission File No. 0-6919)
10(b) Employment Agreement between Union Planters Corporation and Jackson W. Moore dated December 21, 1989 (incorporated by reference to Exhibit 10(c) to the Annual Report on Form 10-K dated December 31, 1992, Commission File No. 0-6919)
10(c) Deferred Compensation Agreements between Union Planters Corporation and certain highly compensated officers (specimen copy) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K dated December 31, 1989, filed on March 26, 1990, Commission File No. 0-6919)
10(d) Union Planters Corporation 1983 Stock Incentive Plan as amended January 18, 1990 and approved by shareholders on April 20, 1990 (1)
10(e) Union Planters Corporation 1992 Stock Incentive Plan (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K dated December 31, 1992 filed on March 26, 1993, (Commission File No. 0-6919)
10(f) Deferred Compensation Agreements between Union Planters Corporation and Union Planters National Bank and certain outside directors (incorporated by reference to Exhibit 10(m) to the Annual Report on Form 10-K dated December 31, 1989 filed on March 26, 1990, Commission File No. 0-6919)
i
Exhibit Index (continued)
10(g) Executive Deferred Compensation Agreement between Union Planters Corporation and certain highly compensated officers (incorporated by reference to Exhibit 10(n) to the Annual Report on Form 10-K dated December 31, 1989 filed on March 26, 1990, Commission File No. 0-6919)
10(h) Union Planters Corporation Supplemental Executive Retirement Plan for Executive Officers (incorporated by reference to Exhibit 10 to the Quarterly Report on Form 10-Q dated March 31, 1995, Commission File No. 1-10160)
10(i) Union Planters Corporation Executive Deferred Compensation Plan for Executives dated February 23, 1996 (incorporated by reference to Exhibit 10(j) to the Annual Report on Form 10-K dated December 31, 1995 filed on March 19, 1996, Commission File No. 1-10160)
10(j) Agreement and Plan of Merger, dated as of March 8, 1996, by and between Union Planters Corporation and Leader Financial Corporation (incorporated by reference to Exhibit 2.1 to Union Planters Corporation's Current Report on Form 8-K dated March 8, 1996, filed on March 13, 1996, Commission File No. 1-10160)
10(k) Stock Option Agreement, dated March 9, 1996, issued by Leader Financial Corporation to Union Planters Corporation (incorporated by reference to Exhibit 2.2 to Union Planters Corporation's Current Report on Form 8-K dated March 8, 1996, filed on March 13, 1996, Commission File No. 1-10160)
11 Computation of Per Share Earnings (filed herewith)
13 1996 Annual Report to Security Holders (filed herewith)
21 Subsidiaries of the Registrant (filed herewith)
23 Consent of Price Waterhouse LLP (filed herewith)
27 Financial Data Schedule (for SEC use only) (filed herewith)
____________________
(1) Incorporated by reference to Exhibit 4(a) filed as part of Registration Statement No. 33-35928, filed July 23, 1990
(2) Incorporated by reference to Exhibit 4 filed as part of Registration Statement No. 33-52434, filed October 19, 1992
(3) Incorporated by reference to Exhibit 4(a) filed as part of Registration Statement No. 33-50655, filed October 21, 1993
(4) Incorporated by reference to Exhibit 4(b) filed as part of Registration Statement No. 33-50655, filed October 21, 1993
(5) Incorporated by reference to Exhibit 4(b) filed as part of Registration Statement No. 33-63791, filed October 27, 1995
ii