ITEM 1. BUSINESS
Fund America Investors Corporation II (the "Company") was incorporated in the State of Delaware on December 14, 1992 as a limited purpose finance corporation. The Company was established to engage in the issuance and administration of Collateralized Mortgage Obligations (the "Bonds") and Asset-Backed Certificates (the "Certificates", and together with the Bonds, the "Securities"). The Securities are issued in one or more series, from time to time, by the Company as described in the prospectus and series- related prospectus supplement of the Company's latest effective registration statement.
The Securities of each series can be issued by the Company, but typically the Company forms a separate trust to act as the issuer solely for the purpose of issuing a series. A series of Securities that include Bonds will be issued pursuant to an indenture and will represent indebtedness of the trust or issuer. A series of Securities that include Certificates will represent beneficial ownership in the related trust or issuer. The sole source of payments to Bondholders or Certificateholders within each series of Securities is produced from the related trust property. The trust property is generally comprised of mortgage loans and/or mortgage-related assets as described in each of the series' related prospectus supplements.
The Company may not, either directly or indirectly through a beneficially owned trust, engage in any business or investment activity other than to; (1) issue and sell Securities; (2) purchase, own, hold, pledge or sell collateral or other mortgage-related assets; (3) invest and maintain cash balances on an interim basis in high quality short-term investments; and (4) engage in other activities which are necessary or convenient to accomplish the foregoing and are incidental thereto.
On January 1, 2003, the Company had a total of $561 million registered and unissued Securities on its Registration Statement No. 333-33823. No Securities were issued, during the year ended December 31, 2003. From inception to date, the Company has issued nineteen series of Securities, which aggregate $2.4 billion in original issued principal. The Company does not have any further obligations in connection with the issuance of these Securities. Under accounting principles generally accepted in the United States of America, these issuances are considered to be a direct sale of the collateral.
The Company's fifth Registration Statement on Form S-3 was filed on September 30, 1998 with the Securities and Exchange Commission. The purpose of this filing was to register an additional amount of Securities and to merge the Company's Effective Registration Statement No. 333-33823, thereby increasing the total amount of Securities that can be issued by the Company. As of December 31, 2003, this Registration Statement was not effective and was subject to completion or amendment. The Company intends to file one or more further amendments to complete this Registration Statement and to bring it effective.
Pursuant to Rule 3-11 of Regulation S-X, if a registrant is an inactive entity as defined in this rule, the financial statements required by this regulation for purposes of reports pursuant to the Securities Exchange Act of 1934 may be unaudited. The Company meets all the conditions as defined for an inactive entity under this rule and accordingly has elected to file unaudited financial statements contained herein for the current year-end, December 31, 2003.
ITEM 2.
ITEM 2. PROPERTIES The Company has no material physical properties.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS None.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders during the fourth quarter of the fiscal year ended December 31, 2003.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for the Company's common stock and no dividends have been declared or paid. All of the Company's common stock is owned by a sole shareholder.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31, ----------------------------------------------- Unaudited Unaudited 2003 2002 2001 2000 1999 -------- -------- -------- -------- --------
Income Statement Data:
Revenue	 $ 25,073 $ 44,192 $ 30,008 $ 94,956 $201,155
Net(loss)income $ 14,069 $ 7,731 $ (8,072) $ 51,682 $160,561
Net(loss)income per share of common stock (1) (1) (1) (1) (1)
Balance Sheet Data:
Total assets $257,046 $285,367 $261,636 $257,353 $270,526
Shareholder's equity $255,936 $258,367 $261,636 $257,208 $270,526
(1) Not presented, as all shares of common stock are held by a sole shareholder.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. General
As of December 31, 2003, the Company has issued nineteen series of registered Pass-Through Securities aggregating $2,439,812,829 in initial amount for all the issuances. Seven series of Bonds remain outstanding on December 31, 2003. The following list consists of the outstanding series shown with the initial issuance amounts.
Series Amount Collateral - ------ ------------ -----------------------------------------------
1993-A $262,435,000 Trust consisting primarily of adjustable rate one- to four-family, first lien mortgage loans
1993-C $319,000,000 Trust consisting primarily of Federal National Mortgage Association and Federal Home Loan Mortgage Corporation Securities; private mortgage backed securities including certain residual interest securities; principal component of bonds issued by the Resolution Funding Corporation
1994-A $ 44,599,100 Trust consisting primarily of adjustable rate one- to four-family, first lien mortgage loans
1998-A $ 60,373,853 Trust consisting primarily of one Pooled Fannie Mae Certificate, two Pooled Freddie Mac Certi- ficates and one Pooled Non-Agency Certificate
1998-B $ 50,703,106 Trust consisting primarily of three Pooled Fannie Mae Certificates, one Pooled Ginnie Mae Certificate, two Pooled Freddie Mac Certi- ficates and one Pooled Non-Agency Certificate
1998-NMC1 $236,526,000 Trust assets consisting primarily of adjustable rate mortgage loans that are secured by first lien mortgages on one- to four-family residential properties
2000-1 $ 3,216,000 Trust consisting primarily of Federal National Mortgage Association and Federal Home Loan Mortgage Corporation Securities
2. Liquidity and Capital Resources
The Company expects to fund ongoing operations from its cash balances, revenues derived from the issuance of Securities, and if necessary, from loans or capital contributions from its sole shareholder. The current cash position will not adequately fund overhead costs over the next twelve months without additional revenues generated during this period. Capital funding will continue to be provided by the sole shareholder to cover operating costs on a monthly basis or until the Company generates sufficient revenue. The funding source for any additional capital costs relating to the registration of securities will be determined when the funding is required and will depend on the cash position at that time.
3. Results of Operations
The Company does not have any significant assets other than cash held for operations and capitalized deferred offering costs. Major operating activity is initiated from the issuance of Securities or the preparation in registering Securities to be issued. Costs incurred with registering Securities are capitalized until such time as the Securities are issued in an offering.
Net income may fluctuate from period to period based on the use of the Company's registered and unissued Securities and calls on outstanding issuances. The Company generally charges a flat fee on the issuance of a series of securities and a proportionate share of deferred costs associated with its registration statement.
The Company reported net income of $14,069 and $7,731 for the twelve-months ended December 31, 2003 and December 31, 2002 respectively, and the Company reported a net loss of $8,072 for the twelve-months ended December 31, 2001. Differences between the three years consist primarily of three main components of income and expense. First, the Company reported other bond income in all three years that consisted of call option fees earned. Call option income can fluctuate due to the relative composition of the series from which the call right value or income was determined. The call option income reported was $25,000, $44,166 and $30,000 for the years ended 2003, 2002, 2001, respectively. The second main difference between periods is the reduction in accounting fees reported under general and administrative expenses. As discussed below, the Company no longer has its financial statements audited as a result, expenses decreased by $9,250 from 2002 to 2003 due the reduction in accounting fees. The third main difference between the reporting years is a reduction in management fee expense of $16,500 for the 2003 year from 2002 and 2001 due to a restructure of management fees, discussed below.
Audited financial statements - Pursuant to Rule 3-11 of Regulation S-X, if a registrant is an inactive entity as defined in this rule, the financial statements required by this regulation for purposes of reports pursuant to the Securities Exchange Act of 1934 may be unaudited. The Company meets all the conditions as defined for an inactive entity under this rule and accordingly had elected to file unaudited financial statements for the years ended, December 31, 2003 and December 31, 2002. The Company paid audit fees of $0, $9,250, and $8,550 for the twelve months ended December 31, 2003, 2002 and 2001, respectively.
Management fees - For the years ended 1993 to 2002, the Company paid facilities management fees to The Chotin Group Corporation (the "Facilities Manager"), a related party, under a Management Agreement dated January 1, 1993. Under this agreement, a fixed monthly fee was paid to the Facilities Manager. The Company has adopted a new income-based fee structure that more appropriately matches the composition of its income as well as the structure of its business operations. Payment of fees under the January 1, 1993 Management Agreement ceased on December 31, 2002. The Company paid management fees of $7,500, $24,000 and $24,000 for the twelve months ended December 31, 2003, 2002 and 2001, respectively.
4. Forward Looking Statements
The statements contained in this Item 7 and Item 7A
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Securities issued by the Company are either debt securities or securities which evidence beneficial ownership interest in designated trusts established to facilitate the transfer of trust asset payments to the Bondholders who hold such debt securities or to the Certificateholders who hold such beneficial ownership interests. Assets securing payments to Bondholders or Certificateholders are pledged or sold to designated trusts and are not assets of the Company. Additionally, Bonds and Certificates that are issued either by the Company or a trust formed by the Company do not represent an ownership interest in or an obligation of the Company.
Disclosures required in this Item 7A are intended to clarify a registrant's exposures to market risk associated with activities in derivative financial instruments, other financial instruments, and derivative commodity instruments. The purpose of this section is to disclose the material effects on earnings, fair values, and cash flows that are inherent to potential market risk exposure. Potential market risk associated with Securities issued under the Company's registration statement will not have a material effect on the Company's earnings or cash flow since the Securities do not represent an interest in or an obligation of the Company. In addition, the Company has no public common equity; all common stock of the Company is held by one shareholder. Therefore, material effects of potential market risk exposure on Securities issued from the Company will not have any significant impact on the Company.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FUND AMERICA INVESTORS CORPORATION II Balance Sheets
December 31, ---------------------------- Unaudited Unaudited 2003 2002 --------- ---------
Assets Cash and cash equivalents $ 466 $ 28,796 Deferred offering costs, net 256,361 256,361 Prepaid expenses 219 210 --------- --------- Total assets $ 257,046 $ 285,367 ========= =========
Liabilities - accounts payable $ 1,110 $ - --------- ---------
Commitments and Contingencies - -
Shareholder's equity Common stock, par value $.01 per share; 1,000,000 shares authorized; 349,000 shares issued and outstanding 3,490 3,490 Additional paid-in capital 504,010 504,010 Shareholder distributions (1,904,229) (1,874,798) Retained earnings 1,652,665 1,652,665 --------- --------- Total shareholder's equity 255,936 285,367 --------- --------- Total liabilities and shareholder's equity $ 257,046 $ 285,367 ========= =========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II Statements of Operations
Year Ended December 31, ------------------------------------------ Unaudited Unaudited 2003 2002 2001 --------- --------- ---------
Revenue Other bond income $ 25,000 $ 44,166 $ 30,000 Issuance fees - - - Interest 73 26 8 --------- --------- --------- Total revenue 25,073 44,192 30,008 --------- --------- ---------
Expenses General and administrative 3,504 12,461 14,080 Disposition fees 7,500 - - Management fees - 24,000 24,000 --------- --------- --------- Total expenses 11,004 36,461 38,080 --------- --------- ---------
Net income(loss) $ 14,069 $ 7,731 $ (8,072) ========= ========= =========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II Statement of Shareholder's Equity Years Ended December 31, 2003, 2002 and 2001
Common Stock Addi- Share- ------------------ tional holder Number of Par Paid-in Distri- Retained Shares Value Capital butions Earnings Totals --------- ------- --------- --------- --------- ---------
Balances at January 1, 2001 349,000 $ 3,490 $450,510 $(1,849,798) $1,653,006 $ 257,208 Shareholder Distributions - - - (25,000) - (25,000) Capital Contribution - - 37,500 - - 37,500 Net income - - - - (8,072) (8,072) -------- ------- -------- ----------- ---------- ---------
Balances at December 31, 2001 349,000 3,490 488,010 (1,874,798) 1,644,934 261,636 Shareholder Distributions - - - - - - Capital Contribution - - 16,000 - - 16,000 Net loss - - - - 7,731 7,731 -------- ------- -------- ----------- ---------- ---------
Unaudited Balances at December 31, 2002 349,000 3,490 504,010 (1,874,798) 1,652,665 285,367 Shareholder Distributions - - - (43,500) - (43,500) Capital Contribution - - - - - - Net income - - - - 14,069 14,069 -------- ------- -------- ----------- ---------- ---------
Unaudited Balances at December 31, 2003 349,000 $ 3,490 $504,010 $(1,918,298) $1,666,734 $ 255,936 ======== ======= ======== =========== ========== =========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II Statements of Cash Flows
Year Ended December 31, ----------------------------------- Unaudited Unaudited 2003 2002 2001 -------- -------- --------
Operating activities: Net income(loss) $ 14,069 $ 7,731 $ (8,072) Adjustments to reconcile net income(loss) to net cash provided by(used in)operating activities: Changes in operating assets and liabilities: Accounts payable 1,110 - (145) Prepaid expenses (9) (6) (9) -------- -------- -------- Net cash provided by(used in) operating activities: 15,170 7,725 (8,226)
Financing activities: Capital contributions - 16,000 37,500 Shareholder distributions (43,500) - (25,000) -------- -------- -------- Net cash (used in)provided by financing activities: (43,500) 16,000 12,500 -------- -------- --------
Net increase(decrease) in cash and cash equivalents (28,330) 23,725 4,274
Cash and cash equivalents at beginning of year 28,796 5,071 797 -------- -------- -------- Cash and cash equivalents at end of year $ 466 $ 28,796 $ 5,071 ======== ======== ========
See notes to financial statements
FUND AMERICA INVESTORS CORPORATION II Notes to Financial Statements For the Years Ended December 31, 2003 unaudited, 2002 unaudited and 2001
Note 1. The Company
Fund America Investors Corporation II (the "Company") was incorporated in the State of Delaware on December 14, 1992 as a limited purpose finance corporation. The Company was established to engage in the issuance and administration of Collateralized Mortgage Obligations (the "Bonds") and Asset-Backed Certificates (the "Certificates", and together with the Bonds, the "Securities"). The Securities are issued in one or more series, from time to time, by the Company in accordance with the provisions in the prospectus and series-related prospectus supplement of the Company's latest effective registration statement.
The Securities of each series can be issued by the Company, but typically the Company forms a separate trust to act as the issuer solely for the purpose of issuing a series. A series of Securities that include Bonds will be issued pursuant to an indenture and will represent indebtedness of the trust or issuer. A series of Securities that include Certificates will represent beneficial ownership in the related trust or issuer. The sole source of payments to Bondholders or Certificateholders within each series of Securities is produced from the related trust property. The property or assets within each trust are comprised of mortgage-related assets as defined in each of the series' related prospectus supplements.
The Company will not, either directly or indirectly through a beneficially owned trust engage in any business or investment activity other than to; (1) issue and sell Securities; (2) invest cash balances on an interim basis in high quality short-term investments; (3) purchase, own, hold, pledge or sell collateral or other mortgage-related assets; (4) engage in other activities which are necessary or convenient to accomplish the foregoing and are incidental thereto.
The Company expects to fund ongoing operations from its cash balances, revenues derived from the issuance of Securities, and if necessary, from loans or capital contributions from its sole shareholder. The current cash position will not adequately fund overhead costs over the next twelve months without additional revenues generated during this period. Capital funding will continue to be provided by the sole shareholder to cover operating costs on a monthly basis or until the Company generates sufficient revenue. The funding source for any additional capital costs relating to the registration of securities will be determined when the funding is required and will depend on the cash position at that time.
Pursuant to Rule 3-11 of Regulation S-X, if a registrant is an inactive entity as defined in this rule, the financial statements required by this regulation for purposes of reports pursuant to the Securities Exchange Act of 1934 may be unaudited. The Company meets all the conditions as defined for an inactive entity under this rule and accordingly has elected to file unaudited financial statements contained herein for the current year-end, December 31, 2003.
Note 2. Summary of Significant Accounting Policies
In connection with the issuance of Securities, the Company generally will enter into a purchase agreement with the seller of the mortgage assets or the collateral. Simultaneously, the collateral is conveyed, by the Company, to the trust who issues the Securities, pursuant to a pooling and servicing agreement. Correspondingly, the purchase price for the Collateral payable to the seller is netted out from the proceeds realized from the sale of the Securities. Therefore, the Company's financial statements reflect the net result of the issuance and not the gross amounts attributable to the purchase price of the collateral and the sales proceeds from the issuance of the Securities.
Note 2. Summary of Significant Accounting Policies (continued)
Costs of registering securities are deferred. As the Securities are issued from the registered securities, costs are charged to operations. The charge is based on the ratio of bonds issued to securities registered but previously unissued.
Fees from the Security issuance transactions are recognized as revenue when the transactions close. All expenses of the transaction, including a portion of deferred offering costs, are charged to operations.
Other bond income represents fees received upon the sale of call options on CMO issuances. Such income is recognized at closing when call option rights are transferred.
For purposes of reporting cash flows, cash and cash equivalents include demand deposit accounts.
Net income per share is not presented, as all shares of common stock are held by a sole shareholder.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Statement of Financial Accounting Standards ("SFAS") No. 107 "Disclosure about Fair Value of Financial Instruments," requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet. The Company's financial instruments include: cash and cash equivalents, and accounts payable. The carrying amount of these assets and liabilities approximates their fair value.
The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If a long-lived asset is identified as impaired, the value of the asset must be reduced to its fair value. The Company's deferred offering costs are considered long-lived assets. As of December 31, 2003 and 2002, management determined that there was no impairment of the Company's long-lived assets.
SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," requires the disclosure of operating segments and the geographic location of the Company. Management considers the Company's business to presently comprise of a single operating segment, and all of the Company's operations were concentrated in Englewood, Colorado.
Note 3. Income Taxes
Under S Corporation guidelines of the Internal Revenue Code, the Company has elected to be treated substantially as a partnership for income tax purposes. As a result, the sole shareholder reports any taxable income or loss of the Company on his individual tax return. Accordingly, no provision for federal income taxes has been recorded in the financial statements.
Note 4. Related Party Transactions
The Company has engaged in related party transactions as discussed below. Accordingly, the accompanying financial statements are not necessarily indicative of the financial position that would exist or the results of operations that would have occurred if the transactions had been with unaffiliated entities.
The sole shareholder of the Company is also the sole shareholder, Chief Executive Office and Director of The Chotin Group Corporation. On January 1, 1993, the Company entered into a Management Agreement with The Chotin Group Corporation (the "Facilities Manager"). This agreement was terminated on December 31, 2002 and was replaced by a subsequent Management Agreement that changed the terms of fee provisions. Under the terms of both agreements, the Facilities Manager is required to provide facilities use and other services necessary for the Company to manage its business affairs. The management fees paid were $7,500, $24,000 and $24,000 for the twelve months ended December 31, 2003, 2002 and 2001, respectively.
Note 5. CMO Information
At December 31, 2003 and 2002, the outstanding principal balance of the issued Securities and the amount of publicly and privately issued securities were as follows:
- --------------------------------------------------------------- Total Publicly Privately Series Certificates Issued Issued - --------- ------------- ------------- ------------ 1993-A $ 22,150,769 $ 19,420,700 $ 2,730,069 1993-C 102,000,000 102,000,000 - 1994-A 1,374,220 1,197,924 176,296 1998-A 365,525 365,525 - 1998-B 3,862,457 3,862,457 - 1998-NMC1 2,744,184 2,744,184 - 2000-1 2,856,666 2,707,066 149,600 ------------- ------------- ------------ Total $ 135,353,821 $ 132,297,856 $ 3,055,965 ============= ============= ============
- --------------------------------------------------------------- Total Publicly Privately Series Certificates Issued Issued - --------- ------------- ------------- ------------ 1993-A $ 30,860,170 $ 28,130,101 $ 2,730,069 1993-B 6,436,653 3,829,549 2,607,104 1993-C 102,000,000 102,000,000 - 1994-A 1,737,792 1,515,746 222,046 1997-NMC1 3,282,868 3,282,868 - 1998-A 1,860,567 1,860,567 - 1998-B 13,782,353 13,782,353 - 1998-NMC1 8,365,851 8,365,851 - 2000-1 2,866,420 2,716,820 149,600 ------------- ------------- ------------ Total $ 171,192,674 $ 165,483,855 $ 5,708,819 ============= ============= ============
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES
Pursuant to the Securities and Exchange Commission in regards to the Sarbanes- Oxley Act Section 404, the Company is considered a "non-accelerated filer" and does not have to comply with the management report on internal controls until its first fiscal year ending on or after July 15, 2005.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Position Age - ------------------- --------------------------- -----
Steven B. Chotin Director, Chairman and Chief Executive Officer 56 M. Garrett Smith Director 42 Helen M. Dickens Director and President 50 Annel Henderson Treasurer 42 Zachary H. Pashel Vice President 31 M. Sean Rowland Vice President 38 Michael W. Shepherd Vice President 34 Jennifer M. Land Secretary 32
Steven B. Chotin, 56, has been a Director and the Chairman and Chief Executive Officer of the Company since its inception. Mr. Chotin has been Chief Executive Officer and sole shareholder of The Chotin Group Corporation, a financial service firm, since July 1984. Mr. Chotin was a director of American Southwest Financial Corporation and of American Southwest Finance Co., Inc. from 1982 to 1994.
M. Garrett Smith, 42, joined Pitkin Fuel Corporation out of Dallas, Texas in January 2001 as it's Chief Financial Officer. Previously, Mr. Smith was Chief Financial Officer at Stonebridge Technologies. Prior to Stonebridge, Mr. Smith was Executive Vice President and Chief Financial Officer of Pioneer Natural Resources Company. He also served as a Senior Vice President of Corporate Acquisitions at Pioneer. Prior to joining Pioneer, Mr. Smith was a partner with BTC Partners, a financial consultant to MESA, Inc.
Helen M. Dickens, 50, has been a Director of the Company since 1995, Vice President and Secretary of the Company since 1989. Ms. Dickens is also President of The Chotin Group Corporation. Previously, Ms. Dickens held the position of Vice President along with Chief Operations Officer at The Chotin Group Corporation. Prior to joining The Chotin Group Corporation IN 1989, Ms. Dickens served as Assistant Corporate Secretary and Assistant to the Chairman of the Board and President of Uniwest Financial Corp., a non- diversified savings and loan holding company. Ms. Dickens received a Bachelor of Science degree from Metropolitan State College with a Major in Accounting.
Annel Henderson, 42, has been the Treasurer of the Company since 2001 and the Principal Accounting Officer since 1995, and previously held the position of Controller since 1992. Mrs. Henderson has been the Treasurer of The Chotin Group Corporation since 2001. Prior to joining The Chotin Group Corporation in December of 1991, she was Accounting Manager of Community Holdings Corporation. Mrs. Henderson received a Bachelor of Science degree from the University of Phoenix with a Major in Accounting.
Zachary H Pashel, 31, was appointed Vice President as of January 1, 2004. Mr. Pashel is also Vice President of The Chotin Group. Prior to joining The Chotin Group in 2004, Mr. Pashel's employment included Deson Ventures and Greyrock Capital Partners, both groups specializing in middle market private equity and M&A advisory services. Mr. Pashel also owned and operated numerous companies in the real estate and aviation industries. Mr. Pashel concentrated on English Literature at Brandeis University.
M. Sean Rowland, 38, joined the Company as Vice President in January 2002. Mr. Rowland is also Vice President of Structured Finance for The Chotin Group Corporation, a position taken in January 2002. Prior to joining The Chotin Group, Mr. Rowland was with Stifel Nicholas & Co. and has worked in the fixed income trading market for over ten years, primarily focusing on mortgage-backed securities. He holds a Bachelor of Science degree in Economics from San Jose University.
Michael W. Shepherd, 34, became Vice President of the company in 2003. He joined The Chotin Group Corporation as the Company's General Counsel and Vice President in June of 2003. Prior to that he was a member of the corporate and securities group at the law firm of Hogan & Hartson, LLP in Denver, Colorado. Before moving to Denver, Mr. Shepherd spent several years in New York at Rogers & Wells, LLP (now Clifford Chance U.S. LLP) counseling clients in connection with mergers and acquisitions and securities transactions. Mr. Shepherd received a Bachelor of Arts degree in History from Stanford University and a Juris Doctor degree from the University of Chicago Law School.
Jennifer M. Land, 32, was appointed to Corporate Secretary of the Company in January 2003. Mrs. Land has also been employed with The Chotin Group Corporation since 1993 where she has been the Executive Administrative Assistant to the CEO. She was given the additional position of Director of Human Resources in December of 2000 and Corporate Secretary of The Chotin Group in January 2003.
Directors and Executive Officers are elected annually for a one-year term.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 2003, no executive officer had received any compensation exceeding $100,000.
The Company has not paid any compensation pursuant to plans or any other compensation arrangement. The Company paid its outside director $1,800 annually for the year ended December 31, 2002. The Company had revised the outside directors fees to $1,000 annually starting January 1, 2003. No other officers or directors receive any compensation for their services.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Amount and Nature of Title Beneficial Percent of of Class Name and Address of Beneficial Owner Ownership(1) Class - -------- ------------------------------------ ----------- --------
Common Steven B. Chotin 349,000 100% 6400 S. Fiddler's Green Circle Suite 1200 Englewood, CO 80111
(1) Amount of such shares with respect to which persons indicated have the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Securities Exchange Act of 1934: Zero.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information relating to this Item is incorporated herein by reference to Item 8, "Financial Statements and Supplementary Data" under Note 4 "Related Party Transactions."
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Qualifying under the definition of an Asset-Backed Issuer, Fund America Investors Corporation II is not required to disclose this information required under item 14.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements - Balance Sheets at December 31, 2003 and 2002, both unaudited - Statements of Operations for the Years Ended December 31, 2003 (unaudited), 2002 (unaudited) and 2001 - Statements of Shareholder's Equity for the Years Ended December 31, 2003 (unaudited), 2002 (unaudited) and 2001 - Statements of Cash Flows for the Years Ended December 31, 2003 (unaudited), 2002 (unaudited) and 2001 - Notes to Financial Statements for the Years Ended December 31, 2003 (unaudited), 2002 (unaudited) and 2001
(a)(2) Financial Statement Schedules
The financial statement schedules have been omitted because they are inapplicable.
(b) Reports on Form 8-K None
(c) Exhibits
Exhibit 31.1 - Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act
Exhibit 31.2 - Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FUND AMERICA INVESTORS CORPORATION II (Registrant)
Date: March 30, 2004 By: /s/ Helen M. Dickens --------------------------------- Helen M. Dickens President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ Steven B. Chotin Director, Chairman, Chief Executive March 30, 2004 - -------------------- Officer (Principal Executive Officer) Steven B. Chotin
/s/ Helen M. Dickens Director, President March 30, 2004 - -------------------- (Principal Financial Officer) Helen M. Dickens
/s/ Garrett Smith Director March 30, 2004 - ------------------ Garrett Smith
/s/ Annel Henderson Treasurer March 30, 2004 - ------------------- Annel Henderson
/s/ Zachary H Pashel Vice President March 30, 2004 - -------------------- Zachary H. Pashel
/s/ M. Sean Rowland Vice President March 30, 2004 - ------------------- M. Sean Rowland
/s/ Michael W Shepard Vice President March 30, 2004 - --------------------- Michael W. Shepherd
/s/ Jennifer M. Land Secretary March 30, 2004 - -------------------- Jennifer M. Land
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
Since the Company has a sole shareholder, the Company has not sent and will not send an annual report or proxy material to its shareholder.