ITEM 1. BUSINESS
General
Gleason Corporation was incorporated in the State of Delaware in 1984 and in May of 1984, by virtue of a merger, became a holding company which owns all the outstanding stock of The Gleason Works. The Gleason Works was incorporated in New York State in 1903 as successor to the businesses of two corporations and has, with its predecessors, been in business since 1865. As used herein, unless the context otherwise indicates, "Company" includes Gleason Corporation and its subsidiaries and divisions.
In 1995, the Company acquired certain assets and technology of Hurth Maschinen und Werkzeuge GmbH, a Munich, Germany-based leader in the design and production of cylindrical gear machinery and tooling. Further information regarding the acquisition is presented in Note 2 of the Notes to the Consolidated Financial Statements in the Company's Annual Report to Stockholders for the year ended December 31, 1996, which is incorporated herein by reference.
In 1989, the Company announced that its Components Group, which consisted of four businesses that manufacture industrial products including powder metal parts, metal stampings and precision plastic parts, was for sale. In December 1991, the Company sold Pennsylvania Pressed Metals, Inc., the largest of its four Components Group operations. In 1992, the Company sold two of the three remaining businesses, Alliance Precision Plastics and Alliance Carolina Tool and Mold. In 1994, the Company ceased operations at the last remaining Components Group business, Alliance Metal Stamping and Fabricating, and sold the machinery and equipment located at this division's facility. Further information regarding discontinued operations is presented in Note 3 of the Notes to the Consolidated Financial Statements in the Company's Annual Report to Stockholders for the year ended December 31, 1996, which is incorporated herein by reference.
Description of Business
The Company operates in one business segment engaged in the design, manufacture and sale of gear production machinery and equipment. The Company has manufacturing operations in Rochester, New York, Munich, Germany, and Plymouth, England. In 1996, the Company began the establishment of a manufacturing facility at its operation in Bangalore, India. The Company sold its former Belgian manufacturing operation to a new company owned by former employees of the Company in the fourth quarter of 1993. The successor company serves as a contract manufacturer for some of the Company's products.
Foreign and domestic operations, export sales and major customer financial information is presented in Note 14 of the Notes to the Consolidated Financial Statements in the Company's Annual Report to Stockholders for the year ended December 31, 1996, which is incorporated herein by reference.
Products
Bevel Gear Products
The Company believes it is the world leader in the technology, design, application and methods of production of hypoid and other bevel gears, and in the manufacture of machines for the production of these gears.
Hypoid and other bevel gears are used to transmit mechanical power at an angle, such as from the drive shaft to the rear-driven axle of an automobile. The gears produced by Gleason machines are used in drive trains of automobiles, sport utility vehicles, trucks, buses, aircraft, marine, agricultural and construction machinery, and must meet a wide range of complex specifications which are determined by the function required of a particular gear set.
The Company sells over 30 models of machines for the production and testing of hypoid and other bevel gears. Some of these machines can produce gears as small as 1/4 of an inch in diameter, weighing only 1/2 ounce, while others can produce gears as large as 36 inches in diameter, weighing more than 1,000 pounds. The latest design of
these machines incorporates full computer numerical controls (CNC) which contribute to improved quality and productivity.
In December 1989, the Company sold its first PHOENIX (Registered Trademark) gear production machine. This line of machines incorporates state-of-the-art, full CNC design for the production of spiral bevel and hypoid gears. CNC machine features include the elimination of manual set- ups, permitting a significant reduction in the overall cost of manufacturing spiral bevel and hypoid gears. PHOENIX products now account for the vast majority of bevel gear machine sales.
The Company designs and produces tooling, including cutting tools and workholding equipment, principally for use on its bevel gear production machines. Other products include spare parts, service, and gear design software.
Cylindrical Gear Products
The Company also manufactures machines for the production of spur and helical gears up to 20 inches in diameter. Spur and helical or cylindrical gears are used for the straight-line or parallel transmission of mechanical power. This type of gearing has a broad range of applications, such as the main drive axles of passenger cars with front-wheel-drive and transverse mounted engines, automotive transmissions, speed reducers, pumps and gear motors.
In 1993, the Company began making shipments of its first PHOENIX machine for cylindrical gear production. This machine, the 125GH gear hobber has significantly increased the Company's sales in this market.
The acquisition of Hurth in 1995 added complementary product lines which strengthen the Company's position in the cylindrical gear equipment market. Hurth has been a leader in the technology and production processes for shaving and fine finishing of cylindrical gears. Similar to the Company's other gear equipment, the Company offers tooling, spare parts and field service for its cylindrical gear machines.
Marketing
The Company's sales and service functions in North America and Europe are performed directly by employees of the Company. Sales in other territories are generally handled by independent foreign machinery dealers.
In 1994, the Company acquired a 20 percent interest in OGA Corporation, its exclusive sales and service representative in Japan and Taiwan, in order to strengthen its presence and enhance growth in that region.
Overseas markets are important to the Company. The percentage of sales outside the United States was 73 percent and 65 percent in 1996 and 1995, respectively. The majority of overseas sales were to European and Asian customers. Sales to overseas markets in 1996 were higher as a percentage of total sales primarily due to higher shipments to the Asia-Pacific region and the full year addition of Hurth sales which were more heavily concentrated outside the U.S.
The domestic and foreign automotive and truck industries accounted for approximately 76 percent and 74 percent of sales in 1996 and 1995, respectively.
The Company has no contracts or subcontracts with U.S. government agencies that are significant.
Competition
The Company believes that it produces the largest number and greatest variety of machines for the manufacture of bevel and hypoid gears. However, it does have competition from other producers of such machinery, particularly foreign producers, as well as from producers of equipment for the production of bevel and hypoid gears by processes other than machining, such as forging and sintered powder metal processes.
The Company faces greater competition from manufacturers of spur and helical gear equipment. Competition is primarily from Japanese and German companies.
Backlog
Backlog (unshipped orders), is an important measure of short- term business activity. Because of the nature of the industry, backlog is subject to fluctuation. As of December 31, 1996 backlog totaled $122.8 million compared to $124.5 million as of December 31, 1995. The Company expects substantially all of the December 31, 1996 backlog to be shipped by the end of 1997.
Research and Development
Amounts expended for research and development are presented in the Consolidated Statements of Operations in the Company's Annual Report to Stockholders for the year ended December 31, 1996, which is incorporated herein by reference.
Patents
The Company owns a substantial number of United States and foreign patents and patent applications. The Company is not significantly dependent upon any one patent or group of patents for its business.
Employees
At December 31, 1996, the Company had 1,543 employees. Many employees possess a high degree of engineering, technical and mechanical skills. Employee relations are considered good. With the exception of government-mandated Workers Council representation in Germany, the Company's employees are not represented by any collective bargaining agent.
Other Information
The Company is not significantly dependent on any one source for raw materials essential to its business.
The Company is not aware of any federal, state or local provisions which have been enacted or adopted regarding discharge of material into the environment, compliance with which might have a material effect on the consolidated capital expenditures, earnings or competitive position of the Company. The Company makes expenditures for environmental control equipment on an ongoing basis in its efforts to comply with applicable environmental regulations.
ITEM 2.

ITEM 2. PROPERTIES
The Company's corporate office is located in Rochester, New York and its manufacturing operations are conducted at plants in Rochester, Munich, Germany and Plymouth, England. In 1996, the Company began the establishment of a manufacturing facility at its operation in Bangalore, India. The activity at this location was not material to overall operations in 1996.
A table of the major facilities and products manufactured is displayed below:
Plant Principal Location Square Footage Products
Owned Facilities
Rochester, New York 721,400 Gear production machines, workholding equipment and cutting tools
Plymouth, England 106,000 Cutting tools
Leased Facilities
Munich, Germany 248,000 Cylindrical gear production machines and tooling
The Munich facility is being leased for a term ending in 2001. The Company owns approximately 250 acres of undeveloped land in Monroe County, New York and leases office space in various locations around the world. The Company retained ownership of the land and buildings of Alliance Precision Plastics and Alliance Carolina Tool and Mold, which were sold in 1992, and leased these properties to the new owners of these businesses. In March of 1997, the Company sold the Alliance Carolina Tool and Mold property to the lessee. In 1995, the Company sold the land and building of its former Alliance Metal Stamping and Fabricating division.
The Company's plants consist of well-lighted, well-maintained buildings and provide good working conditions. Production machinery and equipment are generally owned by the Company and suited to its manufacturing requirements.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
Neither the Company nor any of its subsidiaries is a party to any material pending legal proceedings required to be disclosed under this item.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Information regarding the market for the Company's Common Stock and related stockholder matters presented in the Company's Annual Report to Stockholders for the year ended December 31, 1996 is incorporated herein by reference.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The selected financial data presented in the Five Year Review in the Company's Annual Report to Stockholders for the year ended December 31, 1996 is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion of Financial Condition and Results of Operations is presented in the Company's Annual Report to Stockholders for the year ended December 31, 1996 and is incorporated herein by reference.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements and supplementary data of the Company and its subsidiaries presented in the Company's Annual Report to Stockholders for the year ended December 31, 1996 are incorporated herein by reference:
Consolidated Statements of Operations - Years ended December 31, 1996, 1995 and 1994.
Consolidated Balance Sheets - December 31, 1996 and 1995.
Consolidated Statements of Cash Flows - Years ended December 31, 1996, 1995 and 1994.
Consolidated Statements of Stockholders' Equity - Years ended December 31, 1996, 1995 and 1994.
Notes to Consolidated Financial Statements - December 31, 1996.
Quarterly Results of Operations.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain information required to be furnished by Items 401 and 405 of Regulation S-K are described in a definitive proxy statement which will be filed with the Securities and Exchange Commission pursuant to Regulation 14-A within 120 days after the close of the fiscal year ended December 31, 1996, which information is incorporated herein by reference. Additional information required to be furnished by Item 401 of Regulation S-K is as follows:
List of Executive Officers of the Registrant
EXECUTIVE OFFICER POSITIONS AND NAME AGE SINCE OFFICES HELD
James S. 62 1966 Chairman and President since Gleason January 1985.
David J. 42 1992 Executive Vice President since Burns August 1995; Vice President - Machine Products Group from November 1992 to July 1995; General Manager - Standard Products Group from February 1991 to October 1992.
John B. 55 1986 Vice President - Administration Kodweis and Human Resources since 1992.
Ralph E. 63 1989 Vice President, Secretary Harper & Treasurer since August 1993; Vice President, Secretary & Corporate Counsel since 1992.
EXECUTIVE OFFICER POSITIONS AND NAME AGE SINCE OFFICES HELD
John J. 36 1993 Vice President - Finance since Perrotti August 1995; Vice President - Controller from August 1993 to July 1995; Controller from 1992 to July 1993.
John W. 34 1995 Controller since August 1995; Pysnack Director of Accounting and Reporting from January 1995 to July 1995; Finance Manager from October 1991 to December 1994.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The information required to be furnished by Item 402 of Regulation S-K is included in a definitive proxy statement which will be filed with the Securities and Exchange Commission pursuant to Regulation 14-A within 120 days after the end of the fiscal year ended December 31, 1996, which information is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Certain information regarding security ownership of certain beneficial owners and management required to be furnished by Item 403 of Regulation S-K is included in a definitive proxy statement which will be filed with the Securities and Exchange Commission pursuant to Regulation 14-A within 120 days after the end of the fiscal year ended December 31, 1996, which information is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding relationships is included in a definitive proxy statement which will be filed with the Securities and Exchange Commission pursuant to Regulation 14-A within 120 days after the end of the fiscal year ended December 31, 1996, 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 is a list of the consolidated financial statements of the Company and its subsidiaries and Report of Independent Auditors presented in its Annual Report to Stockholders for the year ended December 31, 1996 which are incorporated herein by reference:
Consolidated Statements of Operations - Years ended December 31, 1996, 1995 and 1994.
Consolidated Balance Sheets - December 31, 1996 and 1995.
Consolidated Statements of Cash Flows - Years ended December 31, 1996, 1995 and 1994.
Consolidated Statements of Stockholders' Equity - Years ended December 31, 1996, 1995 and 1994.
Notes to Consolidated Financial Statements - December 31, 1996.
Report of Independent Auditors.
(2) All schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
(3) Exhibits required to be listed including exhibits incorporated by reference under this Item and filed as exhibits under (c) of this Item 14 pursuant to Item 601 Table I of Regulation S-K are as follows:
(3) Articles of Incorporation and By-Laws.
(a) The Restated Certificate of Incorporation of Gleason Corporation, as filed with the Delaware Secretary of State on May 5, 1987, is incorporated by reference to Exhibit A of the Registrant's Form 10-Q for the quarter ended March 31, 1987.
(b) The Certificate of Amendment of the Certificate of Incorporation of Gleason Corporation as filed with the Delaware Secretary of State on May 8, 1996 is incorporated by reference to Exhibit 3 of the Registrants Form 10-Q for the quarter ended March 31, 1996.
(c) By-laws, as amended, are incorporated by reference to Exhibit 3(b) of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1991.
(4) Instruments defining the rights of security holders, including indentures.
(a) See 3(a), 3(b) and 3(c) above.
(b) Gleason Corporation Preferred Stock Purchase Rights Agreement, dated as of June 8, 1989, as amended, is incorporated by reference to the Registrant's Form 8-A Registration Statement dated June 8, 1989, Form 8 Amendment No. 1, dated March 2, 1990, and Form 8 Amendment No. 2, dated February 6, 1992.
(10) Material contracts.
(a) The Company's 1992 Stock Plan, as amended, is filed as an exhibit to this Form 10-K. Refer to the Index to Exhibits.
(b) Loan Agreement between Gleason Corporation and Chase Manhattan Bank, N.A. and NBD Bank, dated September 29, 1995 is incorporated by reference to Exhibit 6(a) of Gleason Form 10-Q, file number 1-8782, for the quarter ended September 30, 1995.
(c) Gleason Corporation Annual Management Incentive Compensation Plan is incorporated by reference to Exhibit 10(a) of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1994.
(d) Gleason Corporation Supplemental Retirement Plan, as restated, is incorporated by reference to Exhibit 10(c) of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1993.
(e) Executive Agreement between the Company and its executive officers (for which there are identical agreements for those officers listed in Part III, Item 10 of this Form 10-K) is incorporated by reference to Exhibit 10(c) of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1991.
(f) The Company's 1981 Stock Plan, as amended January 23, 1990, is incorporated by reference to Exhibit I of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1989.
(g) Trust Agreement for Gleason Corporation executive agreements and Supplemental Retirement Plan is incorporated by reference to Exhibit L of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31,1989.
(h) Gleason Corporation Plan for Deferral of Directors Fees is incorporated by reference to Exhibit J of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1988.
(i) Gleason Corporation Executive Life Insurance Program is incorporated by reference to Exhibit L of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1987.
(j) Gleason Corporation Long Term Disability Plan is incorporated by reference to Exhibit I of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1986.
(k) Gleason Corporation 1986 Deferred Compensation Plan is incorporated by reference to Exhibit J of Gleason Corporation Form 10-K, file number 1-8782, for the year ended December 31, 1986.
(11) Computation of Per Share Earnings. Refer to the Index to Exhibits.
(13) Annual Report to Stockholders of the registrant for the year ended December 31, 1996 expressly incorporated by reference into this Report. Refer to the Index to Exhibits.
(21) Subsidiaries of the registrant. Refer to the Index to Exhibits.
(23) Consent of Independent Auditors. Refer to the Index to Exhibits.
(24) Power of Attorney. Refer to the Index to Exhibits.
(27) Financial Data Schedules. Refer to the Index to Exhibits.
(b) Reports on Form 8-K filed in the fourth quarter of 1996: None.
(c) and (d) Exhibits required by Item 601 of Regulation S-K and required by Article 5 of Regulation S-X under Item 8 are filed as exhibits to this Report on Form 10-K.
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.
Gleason Corporation Registrant
James S. Gleason James S. Gleason Chairman and President
John J. Perrotti John J. Perrotti Vice President - Finance
John W. Pysnack John W. Pysnack Controller
Date: March 27, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the following named directors has personally authorized the signing of this report on their behalf by the Attorney in Fact named below.
Martin L. Anderson ) Julian W. Atwater ) Robert W. Bjork ) J. David Cartwright ) Directors James S. Gleason ) John W. Guffey, Jr. ) Donald D. Lennox ) Robert A. Sherman )
By: Ralph E. Harper Ralph E. Harper Attorney in Fact
Date: March 27, 1997
GLEASON CORPORATION AND SUBSIDIARIES INDEX TO EXHIBITS
Certain exhibits to this report on Form 10-K have been incorporated by reference. For a list of these exhibits, see Item 14 hereof.
The following exhibits are being filed herewith:
Exhibit No.
(10) Gleason Corporation 1992 Stock Plan as amended
(11) Computation of Per Share Earnings
(13) Portions of the Annual Report to Stockholders of the Registrant for the year ended December 31, 1996 expressly incorporated by reference into the Form 10-K.
(21) Subsidiaries of the Registrant
(23) Consents of Experts and Counsel
(a) Consent of Ernst & Young LLP, Independent Auditors
(24) Power of Attorney
(27) Financial Data Schedules


ITEM 1. BUSINESS.
General. Murray Income Properties II, Ltd. (the "Partnership") was formed December 23, 1985 under the Texas Uniform Limited Partnership Act to acquire recently constructed income-producing shopping centers located in growth markets. As of November, 1989, the Partnership became governed by the Texas Revised Limited Partnership Act. The General Partners of the Partnership are Murray Realty Investors IX, Inc., a Texas corporation, and Crozier Partners IX, Ltd., a Texas limited partnership.
In September 1986, the Partnership acquired a 15% interest in Tower Place Joint Venture, which owns Tower Place Festival Shopping Center ("Tower Place"). The remaining 85% interest in the joint venture is owned by Murray Income Properties I, Ltd., a publicly-registered real estate limited partnership, the general partners of which are affiliates of the General Partners. The Partnership also acquired Paddock Place Shopping Center ("Paddock Place") on December 17, 1986, Germantown Collection Shopping Center ("Germantown") on February 9, 1988, and 1202 Industrial Place (an office/warehouse facility) on February 26, 1988. All acquisitions were paid for in cash. For a more detailed description of the joint venture interest and the properties acquired by the Partnership, see "Item 2.

ITEM 2. PROPERTIES.
The Partnership owns a 15% interest in Tower Place Joint Venture which owns the property described below:
Location Description of Property -------- -----------------------
Pineville (Charlotte), Tower Place Festival Shopping Center North Carolina A 114,562 square foot shopping center situated on 10.777 acres. At December 31, 1996, Tower Place was 100% leased at an average annual lease rate of $13.13. Lease rates range from $8.00 to $16.00 per square foot.
The Partnership also owns the properties described below:
Nashville, Tennessee Paddock Place Shopping Center A 68,629 square foot shopping center situated on 4.66 acres. At December 31, 1996, Paddock Place was 100% leased at an average annual lease rate of $13.34. Lease rates range from $9.50 to $18.00 per square foot.
Germantown (Memphis), Germantown Collection Shopping Center Tennessee A 55,730 square foot shopping center situated on 11.4 acres. At December 31, 1996, Germantown was 95% leased at an average annual lease rate of $15.25. Lease rates range from $12.00 to $19.79 per square foot.
Grand Prairie, Texas 1202 Industrial Place An office/warehouse facility containing 14,040 square feet of office space and 158,760 square feet of warehouse space situated on 8.6 acres. At December 31, 1996, 1202 Industrial Place was 100% leased at an average annual lease rate of $2.16. Lease rates range from $2.10 to $2.30 per square foot.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
There are no material legal proceedings to which the General Partners or the Partnership is a party or to which any of the Partnership's properties are subject.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth quarter of the year covered by this report through the solicitation of proxies or otherwise.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS.
A public market for Interests does not exist and is not likely to develop. Consequently, a Limited Partner may not be able to liquidate its investment in the event of emergency or for any other reason, and Interests may not be readily accepted as collateral for a loan. Further, the transfer of Interests is subject to certain limitations. For a description of such limitations, see Article XIII of the Agreement of Limited Partnership as contained in the Prospectus dated February 20, 1986 filed as part of Amendment No. 1 to Registrant's Form S-11 Registration Statement (File No. 33- 2394) attached hereto as Exhibit 99b.
As of December 31, 1996, there were 2,335 record holders, owning an aggregate of 314,687 Interests.
The Partnership made its initial Cash Distribution from Operations following the quarter ended November 30, 1986, the first complete quarter subsequent to the acceptance of subscriptions for the minimum number of Interests offered, and has continued to make distributions after each subsequent quarter. See "Item 6.

ITEM 6. SELECTED FINANCIAL DATA.
* Based on limited partnership interests outstanding at year-end and net earnings or distributions allocated to the Limited Partners.
The above selected financial data should be read in conjunction with the financial statements and related notes appearing in Item 8 of this report.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
As of December 31, 1996, the Partnership had cash, cash equivalents and certificates of deposit of $1,817,330, which included $1,786,967 invested in certificates of deposit and other money market instruments. Such amounts represent cash generated from operations and working capital reserves. The increase in cash and cash equivalents from December 31, 1995 to December 31, 1996 is primarily due to an increase in the net cash flow generated from the operations of the Partnership's properties.
Rental income from leases is accrued using the straight line method over the related lease terms. At December 31, 1996 and December 31, 1995, there were $211,854 and $239,622, respectively, of accounts receivable related to such accruals. Accounts receivable also consist of tenant receivables, receivables for rents collected (but not yet remitted to the Partnership by the property management companies managing the properties), and interest receivable on short-term investments. The decrease in accounts receivable of $60,241 (exclusive of bad debts and recoveries) from December 31, 1995 to December 31, 1996 is primarily due to decreases in receivables for rent collected (but not yet remitted by the property management companies) at Germantown, receivables related to the accruals described above at Germantown and 1202 Industrial Place, and tenant receivables at Paddock Place.
Other assets consist primarily of deferred leasing costs. The increase in other assets of $83,571 is primarily due to an increase (exclusive of amortization) in leasing commissions.
During the year ended December 31, 1996, the Partnership made Cash Distributions from Operations totaling $1,926,636. Subsequent to December 31, 1996, the Partnership made a Cash Distribution from Operations of $461,590, which related to the three months ended December 31, 1996. The funds distributed were derived from the net cash flow generated from operations of the Partnership's properties and from interest earned, net of administrative expenses, on funds invested in short-term money market instruments and certificates of deposit.
Future liquidity is currently expected to result from cash generated from the operations of the Partnership's properties (which could be affected negatively in the event of weakened occupancies and/or rental rates), interest earned on funds invested in short-term money market instruments and certificates of deposit, and ultimately through the sale of the Partnership's properties.
Market conditions remained stable, or improved slightly, in all of the markets in which the Partnership owns property. Average occupancy increased at both Tower Place and Paddock Place and remained 100% at 1202 Industrial Place. Average occupancy at Germantown decreased from 100% in 1995 to 99% in 1996. The average annual lease rate at December 31, 1996 increased at all four properties compared to the average lease rate at year-end 1995. Germantown and Paddock Place continue to benefit from restrictive zoning and the lack of available land for retail development in their submarkets in Germantown (Memphis) and Nashville, respectively. Although there has been a significant amount of retail development in both of these cities, it has occurred in areas which are not in close proximity to the Partnership's properties and, therefore, should not have a material impact on the performance of Germantown and Paddock Place. Although the Charlotte market has remained strong during 1996, there has been continued development of both neighborhood and larger power shopping centers, some of which have been built within close proximity to Tower Place. Thus far the new development has not adversely impacted occupancy or rental rates at Tower Place. The Dallas-Fort Worth industrial market also remained very strong in 1996, reflecting the healthy job growth that this area experienced last year. This employment growth creates a need for real estate facilities and, in fact, published reports project that approximately seven million square feet of industrial space was absorbed in Dallas-Fort Worth in 1996. This has spurred an increase in new development which could eventually have a negative impact on occupancy and rental rates.
Results of Operations
Rental income increased $136,010 (5%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995. Rental income increased $19,420 (1%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994. The following information details the rental income generated, bad debt expense incurred, and average occupancy for the years ended December 31, 1996, 1995, and 1994.
Rental income at Paddock Place increased $121,586 (11%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995, primarily due to an increase in rental rates, an increase in percentage rent received from J. Alexander's Restaurant and the receipt of a $40,000 fee as consideration for the termination of the Waldenbooks' lease. Rental income decreased $23,850 (2%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994, primarily due to a decrease in the reimbursement of real estate taxes partially offset by an increase in percentage rent received from J. Alexander's Restaurant.
Paddock Place averaged 97% occupancy for the year ended December 31, 1996, a two percent increase over the previous year. Three new leases totalling 4,560 square feet were signed with the tenants taking occupancy in 1996. In March the Partnership terminated the lease of a furniture store who occupied 5,222 square feet and whose lease was to expire in August. A new 41 month lease was signed with a furniture store who took occupancy immediately upon the termination of the prior lease. Two tenants who occupy 1,781 square feet renewed their leases for five years and one tenant who occupies 4,600 square feet renewed its lease for three years. One tenant who occupied 1,330 square feet vacated its space prior to expiration of its lease. This tenant has continued to pay rent. Another tenant who occupied 2,616 square feet also vacated its space prior to the expiration of its lease and has subsequently filed bankruptcy. As of December 31, 1996, Paddock Place was 100% occupied.
Rental income at Germantown increased $7,790 (1%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995 due to an increase in rental rates and an increase in tenant reimbursements for common area maintenance costs. Rental income at Germantown increased $22,254 (2%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994 due to an increase in percentage rents received from two tenants and an increase in the reimbursement of insurance costs.
Occupancy at Germantown averaged 99% for the year ended December 31, 1996, a one percent decrease from the previous year. One new lease for 1,024 square feet was signed and this tenant took occupancy during 1996. One tenant who occupied 642 square feet vacated its space upon expiration of its lease. This space was subsequently leased and the new tenant took occupancy in February.
Three tenants who occupy 3,534 square feet renewed their leases for three years. Another tenant who occupies 1,100 square feet renewed its lease for 29 months. One tenant who occupied 2,691 square feet vacated its space upon expiration of its lease. As of December 31, 1996, Germantown was 95% occupied.
Rental income at 1202 Industrial Place increased $6,634 (1%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995 primarily due to an increase in tenant reimbursements for insurance costs. Rental income at 1202 Industrial Place increased $21,016 (5%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994 primarily due to an increase in the reimbursement of real estate taxes and common area maintenance costs.
Occupancy at 1202 Industrial Place averaged 100% for the year ended December 31, 1996, unchanged from the previous year. As of December 31, 1996, 1202 Industrial Place was 100% occupied.
"Equity in earnings of joint venture" represents the Partnership's 15% interest in the earnings of Tower Place Joint Venture. Rental income at Tower Place increased $118,175 (7%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995 primarily due to an increase in rental rates along with an increase in percentage rent received from J&K Cafeterias and an increase in tenant reimbursements for common area maintenance costs, offset by lower tenant reimbursements for real estate taxes and insurance costs. Tower Place's total operating expenses increased with increases in repair and maintenance costs, property management fees, and landscaping costs offset by decreases in leasing and promotion costs, insurance and real estate taxes. Rental income at Tower Place increased $71,160 (5%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994 with increases in rental income and increases in reimbursements for real estate taxes and insurance costs. The following information details the rental income generated, bad debt expense incurred, and average occupancy for the years ended December 31, 1996, 1995, and 1994:
The Partnership's share of income from the joint venture increased $16,840 (15%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995 for the reasons stated above. The Partnership's share of income from the joint venture increased $5,700 (5%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994 for the reasons stated above.
Tower Place averaged 97% occupancy in 1996, a one percent increase over the previous year. One tenant who occupied 1,260 square feet vacated its space prior to the expiration of its lease. During the year seven new leases totalling 14,209 square feet were signed and these tenants took occupancy during 1996. Three tenants totalling 8,687 square feet renewed their leases for three years and one tenant who occupies 2,100 square feet renewed its lease for one year. As of December 31, 1996, Tower Place was 100% occupied.
Depreciation is provided over the estimated useful lives of the respective assets using the straight line method. The estimated useful lives of the building and improvements range from three to twenty-five years.
Property operating expenses consist primarily of utility costs, repair and maintenance costs, leasing and promotion costs, real estate taxes, insurance and property management fees. Total property operating expenses increased $75,745 (11%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995. The increase is due to higher repair and maintenance costs, utilities costs, snow removal costs, landscaping costs, property management fees, insurance costs, and real estate taxes. Property operating expenses at Germantown increased $19,409 (7%) primarily because of increases in parking lot repair and maintenance costs, landscaping costs and utilities. Property operating expenses at Paddock Place increased $20,827 (8%) primarily because of increases in utilities, snow removal costs and property management fees. Property operating expenses at 1202 Industrial Place increased $35,509 (27%) primarily because of increases in utilities, parking lot repair and maintenance costs, insurance and real estate taxes.
Total property operating expenses increased $8,646 (1%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994. The increase was due to higher repair and maintenance costs and insurance costs. These increases were offset by lower utility costs, landscaping costs, legal fees and real estate taxes.
General and administrative expenses incurred are related to legal and accounting costs, rent, investor services costs, salaries and benefits and various other costs required for the administration of the Partnership. General and administrative expenses increased $45,622 (17%) for the year ended December 31, 1996 as compared to the year ended December 31, 1995. The Partnership became subject to electronic filing requirements with the Securities and Exchange Commission during the year ended December 31, 1995. Costs associated with filing the 1995 Form 10-K and quarterly Form 10-Q's for 1996 caused the Partnership's compliance costs to increase. Also, legal costs increased because of due diligence performed on and negotiations held with limited partners who wanted to acquire the Partnership's investor list in order to solicit the partners to purchase their interests. The Partnership also incurred additional printing and postage costs to respond to all limited partners regarding these solicitations. General and administrative expenses decreased $8,389 (3%) for the year ended December 31, 1995 as compared to the year ended December 31, 1994, primarily as a result of lower amortization of organization costs.
Bad debt expense (recoveries), remained flat for the year ended December 31, 1996 as compared to the year ended December 31, 1995 with each of the Partnership's properties experiencing fewer collection problems. Also, the Partnership has been able to recover $4,549 in previously reserved tenant receivables at Paddock Place. Bad debt expense remained flat for the year ended December 31, 1995 as compared to the year ended December 31, 1994 with each of the Partnership's properties experiencing fewer collection problems.
The effect of inflation on the results of operations for the years ended December 31, 1996, 1995 and 1994 was not significant.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following financial statements are filed as a part of this report:
INDEPENDENT AUDITORS' REPORT
The Partners Murray Income Properties II, Ltd.:
We have audited the accompanying balance sheets of Murray Income Properties II, Ltd. (a limited partnership) as of December 31, 1996 and 1995, and the related statements of earnings, changes in partners' equity and cash flows for each of the years in the three-year period ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Murray Income Properties II, Ltd. as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Dallas, Texas February 20, 1997
MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
See accompanying notes to financial statements.
MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF EARNINGS
See accompanying notes to financial statements.
MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
See accompanying notes to financial statements.
MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
See accompanying notes to financial statements.
MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1996
1. ORGANIZATION AND BASIS OF ACCOUNTING
The Partnership was formed December 23, 1985 by filing a Certificate and Agreement of Limited Partnership with the Secretary of State of the State of Texas. The Partnership Agreement authorized the issuance of up to 500,000 limited partnership interests at a price of $100 each, of which 314,687 limited partnership interests were issued. Proceeds from the sale of limited partnership interests, net of related selling commissions, dealer-manager fees and other offering costs, are recorded as contributed capital.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Rental income is recognized as earned under the leases. Accordingly, the Partnership accrues rental income for the full period of occupancy using the straight line method over the related terms. At December 31, 1996 and 1995, there were $211,854 and $239,622, respectively, of accounts receivable related to such accruals.
Other assets consist primarily of deferred leasing costs which are amortized using the straight line method over the lives of the related leases.
Depreciation is provided over the estimated useful lives of the respective assets using the straight line method. The estimated useful lives of the buildings and improvements range from three to twenty-five years.
Effective January 1, 1995 the Partnership implemented Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," (SFAS 121) which establishes the method of accounting for rental property when circumstances indicate that the carrying amount of an asset may not be recoverable. The Partnership periodically reevaluates the propriety of the carrying amounts of investment properties to determine whether current events and circumstances warrant an adjustment to such carrying amounts. Such evaluations are performed utilizing annual appraisals performed by independent appraisers as well as internally developed estimates of expected undiscounted future cash flows. In the event the carrying value of an individual property exceeds expected future undiscounted cash flows, the property is written down to the most recently appraised value. Since inception of the Partnership, none of the Partnership's properties have required write downs.
No provision for income taxes has been made as the liabilities for such taxes are those of the individual Partners rather than the Partnership. The Partnership files its tax return on the accrual basis used for Federal income tax purposes.
15 (Continued) MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
Earnings and cash distributions per limited partnership interest are based upon the limited partnership interests outstanding at year-end and the net earnings and cash distributions allocated to the Limited Partners in accordance with the terms of the Partnership Agreement, as amended.
Certificates of deposit are held at commercial banks and are stated at cost, which approximates market. For purposes of reporting cash flows, the Partnership considers all certificates of deposit and highly liquid debt instruments with original maturities of three months or less to be cash equivalents.
The following information relates to estimated fair values of the Partnership's financial instruments as of December 31, 1996 and 1995. For cash and cash equivalents, certificates of deposit, accounts and notes receivable, accounts payable, accrued property taxes payable, and security deposits, the carrying amounts approximate fair value because of the short maturity of these instruments.
2. PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits or losses of the Partnership and cash distributions are generally allocated 98% to the Limited Partners and 2% to the General Partners, except that all depreciation shall be allocated to those Limited Partners subject to Federal income taxes. Cash Distributions from the sale or refinancing of a property are allocated as follows:
(a) First, all Cash Distributions from Sales or Refinancings shall be allocated 99% to the Limited Partners and 1% to the Non-corporate General Partner until the Limited Partners have been returned their Original Invested Capital from Cash Distributions from Sales or Refinancings, plus their Preferred Return from either Cash Distributions from Operations or Cash Distributions from Sales or Refinancings.
(b) Next, all Cash Distributions from Sales or Refinancings shall be allocated 99% to the General Partners and 1% to the Non-corporate General Partner in an amount equal to any unpaid Cash Distributions from Operations subordinated to the Limited Partners' 7% non-cumulative annual return. Such 99% shall be allocated 62 1/2% to the Non-corporate General Partner and 37 1/2% to the Corporate General Partner.
(c) Next, all Cash Distributions from Sales or Refinancings shall be allocated 1% to the Non-corporate General Partner and 99% to the Limited Partners and the General Partners. Such 99% will be allocated 85% to the Limited Partners and 15% to the General Partners. Such 15% shall be allocated 62 1/2% to the Non-corporate General Partner and 37 1/2% to the Corporate General Partner.
16 (Continued) MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
3. INVESTMENT PROPERTIES
The Partnership owns and operates Paddock Place Shopping Center in Nashville, Tennessee, Germantown Collection Shopping Center located in Germantown (Memphis), Tennessee and 1202 Industrial Place (an office/warehouse facility) located in Grand Prairie, Texas.
Operating leases with tenants range in terms from thirty-three months to fifteen years. Fixed minimum future rentals under existing leases at December 31, 1996 are as follows:
Rental income includes $507,503, $475,490, and $472,225 in 1996, 1995, and 1994, respectively, related to reimbursements from tenants for common area maintenance costs, real estate taxes and insurance costs.
During 1990, the Partnership reached a settlement with a tenant which provided for the receipt of $245,000 in settlement of all past due rent and a modification of future rental obligations. In connection with this settlement, $32,491 and $38,989 at December 31, 1996 and 1995, respectively, is classified as deferred income and recognized on a straight line basis over the remaining term of the lease.
4. INVESTMENT IN JOINT VENTURE
The Partnership owns a 15% interest in Tower Place Joint Venture, a joint venture that owns and operates Tower Place Festival Shopping Center located in Pineville (Charlotte), North Carolina. The Partnership accounts for the joint venture using the equity method. The remaining 85% interest in the joint venture is owned by Murray Income Properties I, Ltd. ("MIP I"), an affiliated real estate limited partnership. The Tower Place Joint Venture Agreement provides that the Partnership will share profits, losses, and cash distributions according to the Partnership's 15% ownership interest in the joint venture.
(Continued) MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
Summarized financial information for the joint venture is as follows:
5. TRANSACTIONS WITH AFFILIATES
Murray Realty Investors IX, Inc. ("MRI IX"), the Corporate General Partner, entered into a property management agreement with the Partnership for the management of 1202 Industrial Place, effective January 1, 1996. Pursuant to this agreement, MRI IX earned property management fees in the amount of $14,411 during the year ended December 31, 1996.
(Continued) MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
6. RECONCILIATION OF FINANCIAL STATEMENT NET EARNINGS AND PARTNERS' EQUITY TO FEDERAL INCOME TAX BASIS NET EARNINGS AND PARTNERS' EQUITY
Reconciliation of financial statement net earnings to Federal income tax basis net earnings is as follows:
Reconciliation of financial statement partners' equity to Federal income tax basis partners' equity is as follows:
Because many types of transactions are susceptible to varying interpretations under Federal and state income tax laws and regulations, the amounts reported above may be subject to change at a later date upon final determination by the taxing authorities.
7. BUSINESS AND CREDIT CONCENTRATION
As previously noted, the Partnership's properties are located in Nashville and Memphis, Tennessee, and Grand Prairie, Texas.
The Partnership had no outstanding receivable balances at December 31, 1996 or 1995, which, individually, exceeded 5% of the Partnership's total assets.
Rental income from a major customer was approximately $257,000 for each of the years ended 1996, 1995, and 1994, respectively.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP.
Murray Realty Investors IX, Inc., a Texas corporation, and Crozier Partners IX, Ltd., a Texas limited partnership, are the General Partners of the Partnership. The Limited Partners voting a majority of the Interests may, without the consent of the General Partners, remove a General Partner and elect a successor General Partner.
The Partnership Agreement provides that the Partnership will have an Investment Committee consisting initially of three members, appointed by Murray Realty Investors IX, Inc. (the "Corporate General Partner"). A person appointed to the Investment Committee may be removed by the Corporate General Partner, but the Corporate General Partner must name a replacement. The acquisition, sale, financing or refinancing of a Partnership property must be approved by a majority of the members of the Investment Committee. The members of the Investment Committee currently are Messrs. Jack E. Crozier, Mitchell L. Armstrong and W. Brent Buck. Murray Realty Investors IX, Inc. is owned 60% by Mr. Armstrong and 40% by Mr. Buck. The following is a brief description of Jack E. Crozier, a general partner of Crozier Partners IX, Ltd., a General Partner, and the directors and executive officers of the Corporate General Partner:
Crozier Partners IX, Ltd, General Partner
Jack E. Crozier, 68, General Partner. From 1954 through July 1989, Mr. Crozier was affiliated with Murray Financial Corporation and various of its affiliates. From 1977 through 1988, he was President of Murray Financial Corporation, and from 1982 until June 1989, he also served as President of Murray Savings Association, a principal affiliate of Murray Financial Corporation. He served as President or Director of various other subsidiaries of Murray Financial Corporation which were engaged in real estate finance, development and management. He also served as the general partner in a number of publicly registered limited partnerships, and a number of non-registered limited partnerships, all of which had real estate as their principal assets. Since June 1989, he has remained as a partner or limited partner in several real estate oriented limited partnerships. He is a consultant to several companies.
Murray Realty Investors IX, Inc., Corporate General Partner
The directors and executive officers of Murray Realty Investors IX, Inc., are:
Mitchell L. Armstrong, 46, President and Director. Mr. Armstrong became President of Murray Realty Investors IX, Inc. on November 15, 1989. From September 1984 to that date, he was Senior Vice President - Product Development of Murray Realty Investors, Inc., and Murray Property Investors and Vice President - Tax for Murray Properties Company. From November 1988 to November 15, 1989, he also served as Secretary to these companies. From August 1983 to September 1984, he was Executive Vice President of Dover Realty Investors. From September 1980 to August 1983, he was with Murray Properties Company, in charge of tax planning and reporting. From July 1972 to August 1980, he was with the international accounting firm of Deloitte Haskins & Sells (now Deloitte & Touche). Mr. Armstrong is a Certified Public Accountant and a Certified Financial Planner and holds a Bachelor of Business Administration degree with high honors in Accounting from Texas Tech University. He is a member of the American Institute of Certified Public Accountants, and a member of the Institute of Certified Financial Planners.
W. Brent Buck, 41, Executive Vice President and Director. Mr. Buck became Executive Vice President of Murray Realty Investors IX, Inc., on November 15, 1989. From September 1981 to November 15, 1989, Mr. Buck served in various capacities for Murray Properties Company and certain subsidiaries. His primary responsibilities included property acquisitions and asset management. He was
responsible for initially identifying and negotiating the purchase of all properties in the Partnership. Since their acquisition to the present time, he has continued to oversee the management of all properties of the Partnership. Mr. Buck holds a Master of Business Administration degree in Finance and a Bachelor of Public Administration degree in Urban Administration from the University of Mississippi. He also holds a Texas real estate salesman license, a Mississippi broker's license, and is a member of the International Council of Shopping Centers.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
Pursuant to an amendment to the Partnership Agreement effective November 15, 1989, Murray Income Properties II, Ltd. is reimbursed by Murray Income Properties I, Ltd. for forty-seven percent (47%) of executive compensation incurred in the management of the two partnerships. Murray Income Properties I, Ltd. is a real estate limited partnership the general partners of which are affiliates of the General Partners. The following table presents Murray Income Properties II, Ltd.'s share of executive compensation.
* Offices held in Murray Realty Investors IX, Inc., the Corporate General Partner.
** The amounts reflected under the heading "All Other Compensation" represents the Partnership's share of the full premium cost of term insurance that will benefit the executive.
The Partnership and Murray Income Properties I, Ltd. entered into severance agreements with Mr. Armstrong and Mr. Buck effective September 16, 1996. Pursuant to these agreements, upon the occurrence of specified events, the Partnership will be obligated for fifty three (53%) of any benefits paid pursuant to the agreements to either Mr. Armstrong or Mr. Buck. The agreement with Mr. Armstrong provides for a benefit amount equal to the value of the aggregate of one month of his highest monthly salary paid at any time during the twelve months prior to his termination multiplied by fifteen (15), plus the current monthly cost of such health, disability and life benefits (including spousal or similar coverage and coverage for children) which he was receiving or entitled to receive immediately prior to termination multiplied by eighteen (18). The agreement with Mr. Buck provides for a benefit amount equal to the value of the aggregate of one month of his highest monthly salary paid at any time during the twelve months prior to his termination multiplied by twelve (12), plus the current monthly cost of such health, disability and life benefits (including spousal or similar coverage and coverage for children) which he was receiving or entitled to receive immediately prior to termination multiplied by fourteen (14).
The Partnership has not paid and does not propose to pay any bonuses or deferred compensation, compensation pursuant to retirement or other plans, or other compensation to the officers, directors or partners of the General Partners other than described in the above table or the above paragraph. In addition, there are no restricted stock awards, options or stock appreciation rights, or any other long term incentive payouts.
During the operational and liquidation stages of this Partnership, the General Partners and their affiliates receive various fees and distributions. For information on these types of remuneration, reference is made to the section entitled "Management Compensation" as contained in the Prospectus dated February 20, 1986 filed as part of Amendment No. 1 to Registrant's Form S-11 Registration Statement (File No. 33-2394) attached hereto as Exhibit 99d. See "Item 13. Certain Relationships and Related Transactions" for information on the fees and other compensation or reimbursements paid to the General Partners or their Affiliates during the year ended December 31, 1996.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
No person (including any "group" as that term is used in Section 13 (d)(3) of the Securities Exchange Act of 1934) is known to the Partnership to be the beneficial owner of more than five percent of the outstanding voting Interests as of December 31, 1996.
The following table presents certain information regarding the number of Interests owned, directly or indirectly, by (i) a general partner of a General Partner and executive officers and directors of a General Partner and (ii) a general partner of a General Partner and executive officers and directors of a General Partner as a group as of December 31, 1996:
(1) The total of 377 Interests listed above includes 126 Interests owned beneficially and of record by First Trust Corporation, Trustee for the benefit of Mitchell L. Armstrong IRA; 195 Interests owned by Murray Realty Investors IX, Inc., a corporation in which Mr. Armstrong is an officer, director, and substantial owner; and 56 Interests owned by Crozier Partners IX, Ltd., a partnership in which Mr. Armstrong is a limited partner.
(2) The total of 251 Interests listed above includes 195 Interests owned by Murray Realty Investors IX, Inc., a corporation in which Mr. Buck is an officer, director and substantial owner; and 56 Interests owned by Crozier Partners IX, Ltd., a partnership in which Mr. Buck is a limited partner.
(3) The total of 736 interests listed above includes 272 Interests owned by Crozier Partners IX, Ltd., a partnership in which Mr. Crozier is a general partner and 464 Interests owned by Mrs. Irma Crozier as her separate property.
No arrangements are known to the Partnership which may result in a change of control of the Partnership.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the year ended December 31, 1996 the Partnership was reimbursed by Murray Income Properties I, Ltd., ("MIP I") for forty seven percent (47%) of the costs associated with the management of the Partnership and MIP I. MIP I is a publicly-registered real estate limited partnership, the general partners of which are affiliates of the General Partners. The reimbursement has been accounted for as a reduction of general and administrative expenses. Murray Realty Investors IX, Inc. ("MRI IX"), the Corporate General Partner, entered into a property management agreement with the Partnership for the management of 1202 Industrial Place, effective January 1, 1996. Pursuant to this agreement, MRI IX earned property management fees in the amount of $14,411 during the year ended December 31, 1996.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements - See Index to Financial Statements in Item 8 of this Form 10-K.
2. Financial Statement Schedules with Independent Auditors' Report Thereon:
(i) Valuation and Qualifying Accounts (Schedule II) - Years ended December 31, 1996, 1995, and 1994.
(ii) Real Estate and Accumulated Depreciation (Schedule III) - December 31, 1996.
All other schedules have been omitted because they are not required or the required information is shown in the financial statements or notes thereto.
(b) Reports on Form 8-K filed during the last quarter of the year:
None
(c) Exhibits:
3a Agreement of Limited Partnership of Murray Income Properties II, Ltd. Reference is made to Exhibit A of the Prospectus dated February 20, 1986 contained in Amendment No. 1 to Partnership's Form S-11 Registration Statements filed with the Securities and Exchange Commission on February 13, 1986. (File No. 33-2294)
3b Amended and Restated Certificate and Agreement of Limited Partnership dated as of November 15, 1989. Reference is made to Exhibit 3b to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1989. (File No. 0-17183)
3c Amended and Restated Certificate and Agreement of Limited Partnership dated as of January 10, 1990. Reference is made to Exhibit 3c to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1989. (File No. 0-17183)
10a Form of Joint Venture Agreement between the Partnership and Murray Income Properties II, Ltd. Reference is made to Exhibit 10h to Post-Effective Amendment No. 1 to Partnership's Form S-11 Registration Statements, filed with the Securities and Exchange Commission on July 29, 1989. (File No. 33-2394)
10b Lease Agreement with General Cinema to lease certain premises as described within the Lease Agreement dated July 23, 1985 at Tower Place Festival Shopping Center. Reference is made to Exhibit 10q to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1989. (File No. 0-17183)
10c Lease Agreement with Rafferty's Inc. to lease certain premises as described within the Lease Agreement dated August 12, 1985 at Paddock Place Shopping Center. Reference is made to Exhibit 10r to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1989. (File No. 0-17183)
10d Lease Agreement with Chili's Inc. to lease certain premises as described within the Lease Agreement dated May 19, 1988 at Germantown Collection Shopping Center.
Reference is made to Exhibit 10t to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1989. (File No. 0-17183)
10e Settlement and Release Agreement with Rafferty's Inc. and Mid-South Management Group, Inc., dated December 1, 1990. Reference is made to Exhibit 10u to the 1990 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1991. (File No. 0-17183)
10f Management Agreement with Murray Realty Investors IX, Inc. for management and operation services described in the Management Agreement dated January 1, 1996 at 1202 Industrial Place. Reference is made to Exhibit 10a to the Form 10-Q for the Quarter ended March 31, 1996 filed with the Securities and Exchange Commission on May 13, 1996. (File No. 0-17183)
10g Data Processing System Use Agreement between Murray Income Properties II, Ltd. and The Mavricc Management Systems, Inc., dated September 1, 1996. Filed herewith.
10h Management Agreement with CK Charlotte Overhead Limited Partnership for management and operation services described in the Management Agreement dated November 21, 1996 at Tower Place Festival Shopping Center. Filed herewith.
10i Management Agreement with Trammell Crow SE, Inc. for management and operation services described in the Management Agreement dated August 8, 1990 (as extended pursuant to the Modification to Management Agreement dated February 20, 1996) at Germantown Collection Shopping Center. Filed herewith.
10j Management Agreement with Brookside Commercial Services for management and operation services described in the Management Agreement dated March 1, 1991 (as extended pursuant to the Extension of Property Management Agreement dated February 22, 1996 at Paddock Place Shopping Center. Filed herewith.
10k Lease Agreement with Calidad Foods, Inc. to lease certain premises as described within the Lease Agreement dated October 19, 1992, at 1202 Industrial Place (an office/warehouse facility). Reference is made to Exhibit 10v to the Form 10-Q for the Quarter ended September 30, 1992 filed with the Securities and Exchange Commission on November 13, 1992. (File No. 0-17183)
10l Lease Agreement with Pierce Family Partnership to lease certain premises as described within the Lease Agreement dated October 23, 1992, at 1202 Industrial Place (an office/warehouse facility). Reference is made to Exhibit 10x to the Form 10-Q for the Quarter ended September 30, 1992 filed with the Securities and Exchange Commission on November 13, 1992. (File No. 0-17183)
10m Amendment to Lease Agreement with Calidad Foods, Inc. dated December 28, 1992 at 1202 Industrial Place (an office/warehouse facility). Reference is made to Exhibit 10n to the 1992 Annual Report on Form 10- K filed with the Securities and Exchange Commission on March 19, 1993. (File No. 0-17183)
10n Lease Agreement with Brown Group Retail, Inc. to lease certain premises as described within the Lease Agreement dated November 9, 1993 at Tower Place Festival Shopping Center. Reference is made to Exhibit 10p to the 1993 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 1994. (File No. 0-17183)
10o Lease Agreement with Care Management Enterprises, Inc. to lease certain premises as described within the Lease Agreement dated November 16, 1995 at 1202 Industrial
Place (an office/warehouse facility). Reference is made to Exhibit 10p to the 1995 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 22, 1996. (File No. 0-14105)
10p Severance Agreement by and among Murray Income Properties I, Ltd. and Murray Income Properties II, Ltd. and Mitchell L. Armstrong dated September 16, 1996. Reference is made to Exhibit 10a to the 1996 3rd Quarter Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 1996. (File No. 0-14105)
10q Severance Agreement by and among Murray Income Properties I, Ltd. and Murray Income Properties II, Ltd. and W. Brent Buck dated September 16, 1996. Reference is made to Exhibit 10a to the 1996 3rd Quarter Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 1996. (File No. 0-14105)
27 Financial Data Schedule. Filed herewith.
99a Glossary as contained in the Prospectus dated February 20, 1986 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement (File No. 33-2394). Filed herewith.
99b Article XIII of the Agreement of Limited Partnership as contained in the Prospectus dated February 20, 1986 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement (File No. 33- 2394). Filed herewith.
99c Amendment number nine to the Agreement of Limited Partnership contained in the Proxy Statement dated October 11, 1989. Filed herewith.
99d Management Compensation as contained in the Prospectus dated February 20, 1986 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement (File No. 33-2394). Filed herewith.
(d) Financial Statement Schedules with Independent Auditors' Report Thereon:
(i) Valuation and Qualifying Accounts (Schedule II) - Years ended December 31, 1996, 1995, and 1994.
(ii) Real Estate and Accumulated Depreciation (Schedule III) - December 31, 1996.
All other schedules have been omitted because they are not required or the required information is shown in the financial statements or notes thereto.
INDEPENDENT AUDITORS' REPORT
The Partners Murray Income Properties II, Ltd.:
Under date of February 20, 1997, we reported on the balance sheets of Murray Income Properties II, Ltd. (a limited partnership) as of December 31, 1996 and 1995, and the related statements of earnings, changes in partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1996, as contained in Item 8 of this annual report on Form 10-K. In connection with our audits of the aforementioned financial statements, we also audited the related financial statement schedules as listed in Item 14(a)2 of this annual report on Form 10-K. These financial statement schedules are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Dallas, Texas February 20, 1997
Schedule II
MURRAY INCOME PROPERTIES II, LTD. (A LIMITED PARTNERSHIP)
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
Deductions are primarily for writeoffs of accounts receivable deemed uncollectible by management.
MURRAY INCOME PROPERTIES II, LTD. Schedule III (a limited partnership)
Real Estate and Accumulated Depreciation
December 31, 1996
NOTES: (A) The initial cost to the Partnership represents the original purchase price of the properties. (B) Reconciliation of real estate owned for 1996, 1995 and 1994:
(C) Reconciliation of accumulated depreciation for 1996, 1995 and 1994:
(D) The aggregate cost of real estate at December 31, 1996 for Federal income tax purposes is $24,074,272.
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.
MURRAY INCOME PROPERTIES II, LTD.
By: Crozier Partners IX, Ltd. A General Partner
Dated: March 19, 1997 By: /s/ Jack E. Crozier ------------------------------ Jack E. Crozier A General Partner
By: Murray Realty Investors IX, Inc. a General Partner
Dated: March 19, 1997 By: /s/ Mitchell Armstrong ------------------------------ Mitchell Armstrong 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.
Murray Realty Investors IX, Inc. A General Partner
Dated: March 19, 1997 By: /s/ Brent Buck ---------------------------------- Brent Buck Executive Vice President Director
Dated: March 19, 1997 By: /s/ Mitchell Armstrong ---------------------------------- Mitchell Armstrong Chief Executive Officer Chief Financial Officer Director
INDEX TO EXHIBITS


Item 1. BUSINESS
American Woodmark Corporation manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. The Company was formed in 1980 by the four principal managers of the Boise Cascade Cabinet Division through a leveraged buyout of that division. The Company was operated privately until 1986 when it became a public company through a Common Stock offering.
The Company currently offers framed stock cabinets in almost 100 different cabinet lines, ranging in price from relatively inexpensive to medium priced styles. Styles vary by design and color from natural wood finishes to low-pressure laminate surfaces. The entire product offering includes thirty-three door designs and five colors. Stock cabinets consist of a common box with standard interior components and an oak, cherry or maple front frame.
The Company's products are sold under the brand names of American Woodmark(R), Crestwood(R), Timberlake(TM), Scots Pride(TM), and Coventry and Case(TM) cabinets.
American Woodmark's products are sold on a national basis via three market channels: independent dealer/distributors, home centers, and major builders. It is estimated that 60% of sales during the fiscal year ended April 30, 1996 were to the remodeling market and 40% to the new home market. Products are distributed to each market channel directly from the Company's three assembly plants and through a logistics network consisting of four service centers located in key areas throughout the United States.
The primary raw materials used by the Company are oak and maple lumber, paint, particle board, manufactured components, and hardware. The Company currently purchases paint from one supplier; however, other sources are available. Oak and maple lumber, particle board, manufactured components, and hardware are purchased from more than one source and are readily available.
The Company operates in a highly fragmented industry which is composed of several thousand local, regional and national manufacturers. The Company believes that no other company in the industry has more than a 15% share of the market. The Company also believes that American Woodmark is one of the five largest manufacturers of kitchen cabinets in the United States.
The Company's business has historically been subjected to seasonal influences, with higher sales typically realized in the second and fourth fiscal quarters. General economic forces and changes in the Company's customer mix have reduced seasonal fluctuations in the Company's revenue over the past few years.
In the fiscal year ended April 30, 1996, the Company had two customers, Builders Square, Inc., a subsidiary of K-mart Corporation, and The Home Depot, who each accounted for in excess of 10% of the Company's sales.
At April 30, 1996, the Company had 2,164 employees. Approximately 30% of its employees are represented by labor unions. Management believes its employee relations are excellent.
Item 2.

Item 2. PROPERTIES
The Company leases its Corporate Office which is located in Winchester, Virginia. In addition, the Company leases one and owns six manufacturing facilities located primarily in the eastern United States. The Company also leases four service centers located throughout the United States which support the distribution of products to each market channel.
Item 3.

Item 3. LEGAL PROCEEDINGS
The Company is involved in various suits and claims in the normal course of business. Included therein are claims against the Company pending before the Equal Employment Opportunity Commission. Although management believes that such claims are without merit and intends to vigorously contest them, the ultimate outcome of these matters cannot be determined at this time. In the opinion of management, after consultation with counsel, the ultimate liabilities and losses, if any, that may result from suits and claims involving the Company will not have a material adverse effect on the Company's results of operations or financial position.
The Company is voluntarily participating with a group of companies which is cleaning up a waste facility site at the direction of a state environmental authority. The Company is also involved in other matters under the direction of state environmental authorities.
The Company records liabilities for all probable and reasonably estimable loss contingencies on an undiscounted basis. For loss contingencies related to environmental matters, liabilities are based on the Company's proportional share of the contamination obligation of a site since management believes it "probable" that the other parties, which are financially solvent, will fulfill their
proportional contamination obligations. There are no probable insurance or other indemnification receivables recorded. The Company has accrued for all known environmental remediation costs which are probable and can be reasonably estimated, and such amounts are not material. Due to factors such as the continuing evolution of environmental laws and regulatory requirements, technological changes, and the allocation of costs among potentially responsible parties, estimation of future remediation costs is necessarily imprecise. It is possible that the ultimate cost, which cannot be determined at this time, could exceed the Company's recorded liability. As a result, charges to income for environmental liabilities could have a material effect on results of operations in a particular quarter or year as assessments and remediation efforts proceed. However, management is not aware of any matters which would be expected to have a material adverse effect on the Company's results of operations or financial position.
Item 4.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth quarter of fiscal 1996.
PART II
Item 5.

Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS MATTERS
"Market Information" in the American Woodmark Corporation's 1996 Annual Report to Stockholders ("1996 Annual Report") is incorporated herein by reference.
The Company's primary loan agreement prohibits the payment of cash dividends. The Company has not paid cash dividends on its Common Stock since its inception.
Item 6.

Item 6. SELECTED FINANCIAL DATA
"Five Year Selected Financial Information" in the 1996 Annual Report is incorporated herein by reference.
Item 7.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis" in the 1996 Annual Report is incorporated herein by reference.
Item 8.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements, "Quarterly Results of Operations," and the Report of Ernst & Young LLP, Independent Auditors, in the 1996 Annual Report are incorporated herein by reference.
Item 9.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information concerning the directors and nominees for directorships, see the information under the caption "Election of Directors" in the Registrant's Proxy Statement ("Proxy Statement") for the Annual Meeting of Stockholders to be held on August 20, 1996, which information is incorporated herein by reference.
The executive officers of the Registrant as of April 30, 1996 are as follows:
Name Age Position Held During Past Five Years ---------------------- --- -------------------------------------
William F. Brandt, Jr. 50 Chairman and Chief Executive Officer since November, 1995 Chairman and President 1980-1995
James J. Gosa 48 President and Chief Operating Officer since November, 1995 Executive Vice President 1993-1995 Vice President, Sales and Marketing 1991-1993 Vice President, Marketing and Branch Operations Thomas Somerville Co. 1985-1991 Director since 1995
Kent B. Guichard 40 Vice President, Finance and Chief Financial Officer since November 1995 Vice President, Finance 1993-1995 Vice President & Controller, AM Graphics Division, AM International 1991-1993 Controller, Aircraft Wheel and Brake Operations, BF Goodrich Company 1989-
David L. Blount 48 Vice President, Manufacturing since May, 1995 Vice President, Component Manufacturing 1994-1995 Vice President, Manufacturing 1983-1994
For information concerning Item 405, disclosure of delinquent filers, see the information under the caption, "Election of Directors" in the Proxy Statement, which information is incorporated herein by reference.
Item 11.

Item 11. EXECUTIVE COMPENSATION
The "Compensation of Executive Officers" segment in the Proxy Statement is incorporated herein by reference.
Item 12.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The "Principal Shareholders of the Company" segment in the Proxy Statement is incorporated herein by reference.
Item 13.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the caption "Certain Transactions" in the Proxy Statement is incorporated herein by reference.
Item 14.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following Financial Statements of American Woodmark Corporation are incorporated by reference in Item 8:
Balance Sheet - April 30, 1996 and 1995
Statement of Income and Retained Earnings - for each of the years in the three-year period ended April 30, 1996
Statement of Cash Flows - for each of the years in the three-year period ended April 30, 1996
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
(a) 2. Financial Statement Schedules
The following Financial Statement schedule is included in a separate section of this report:
Schedule Page -------------------------------------- ---- II. Valuation and qualifying accounts S-1
All other schedules for which provisions are made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
(a) 3. Exhibits
Exhibit No. Description - ----------- --------------------------------------------------------------
3.1 - Articles of Incorporation as amended effective August 12, 1987 (3)
3.2 (a) - Bylaws (1)
3.2 (b) - Amendment to Bylaws on June 22, 1994 (7)
4 - Amended and Restated Stockholders' Agreement (1)
9 - Voting Trust Agreement (1)
10.1 (a) - Amended and Restated Loan Agreement between the Company and NationsBank of North Carolina as of March 23, 1992 (5)
10.1 (b) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of September 8, 1992 (6)
10.1 (c) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of June 25, 1993 (6)
10.1 (d) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of March 15, 1993 (6)
10.1 (e) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of August 31, 1993 (7)
10.1 (f) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of March 15, 1994 (7)
10.1 (g) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of July 27, 1994 (8)
10.2 (a) - Security Agreement between the Company and NationsBank of North Carolina as of March 23, 1992 (5)
10.2 (b) - Amendment to Security Agreement as of August 31, 1993 (7)
10.3 (a) - Bond Purchase Agreement Sale - Orange, Virginia (1)
10.3 (b) - Bond Purchase Agreement and Agreement of Sale - Orange, Virginia (1)
10.3 (c) - Bond Purchase Agreement and Agreement of Sale - The Industrial Development Authority of the County of Mohave, Arizona (2)
10.3 (d) - Bond Purchase Agreement and Agreement of Sales - Stephens County Development Authority (3)
10.3 (e) - Amendment of Bond Purchase Agreement and Agreement of Sale - Orange, Virginia (4)
10.3 (f) - Loan Agreement between the Company and the County Commission of Hardy County, West Virginia as of December 1, 1991, relating to bond financing (5)
10.3 (g) - Promissory Note between the Company and County Commission of Hardy County, West Virginia as of December 18, 1991 (5)
10.3 (h) - Reimbursement Agreement between the Company and NationsBank as of December 1, 1991 (5)
10.3 (i) - Amendment to Reimbursement Agreements as of June 15, 1992 (5)
10.4 (a) - Credit Line Deed of Trust and Security Agreement - Orange and Clarke Counties, Virginia, as amended (1)
10.4 (b) - Deed of Trust and Security Agreement - Hardy County, West Virginia, as amended (1)
10.5 (a) - Loan Agreement between the Company and the West Virginia Economic Development Authority and the Hardy County Rural Development Authority (1)
10.5 (b) - Security Agreement between the Company and the West Virginia Economic Development Authority (1)
10.5 (c) - Deed of Trust - Hardy County, West Virginia (1)
10.6 (a) - Lease between the Company and Amwood Associates (1)
10.6 (b) - Lease between the Company and the West Virginia Industrial and Trade Jobs Development Corporation (3)
10.6 (c) - Lease between the Company and the West Virginia Industrial and Trade Jobs Development Corporation (3)
10.6 (d) - Amendment to Deed of Lease between the Company and West Virginia Economic Development Authority as of March 30, 1992 (5)
10.7 (a) - 1986 Employee Stock Option Plan (1)
10.7 (b) - Form of Option Agreement and Stock Purchase Agreement (1)
10.7 (c) - 1990 Non-Employee Directors Stock Option Plan (7)
10.7 (d) - 1995 Non-Employee Directors Stock Option Plan
10.8 - 1996 Incentive Plan
11 - Computation of Earnings Per Share
13 - 1996 Annual Report to Stockholders
23 - Consent of Ernst & Young LLP, Independent Auditors
27 - Financial Data Schedule
(b) Reports on Form 8-K
None.
- -------------------------------------------------------------------------------
(1) - Incorporated by reference to exhibits filed with Form S-1, No. 33-6245.
(2) - Incorporated by reference to exhibits filed with the 1987 Form 10-K.
(3) - Incorporated by reference to exhibits filed with the 1988 Form 10-K.
(4) - Incorporated by reference to exhibits filed with the 1989 Form 10-K.
(5) - Incorporated by reference to exhibits filed with the 1992 Form 10-K.
(6) - Incorporated by reference to exhibits filed with the 1993 Form 10-K.
(7) - Incorporated by reference to exhibits filed with the 1994 Form 10-K.
(8) - Incorporated by reference to exhibits filed with the 1995 Form 10-K.
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.
American Woodmark Corporation (Registrant)
/s/ WILLIAM F. BRANDT, JR. William F. Brandt, Jr. Chief Executive Officer Chairman of the Board
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/ JAMES J. GOSA /s/ JOHN T. GERLACH James. J. Gosa John T. Gerlach President and Chief Operating Director Officer Director
/s/ KENT B. GUICHARD /s/ RICHARD A. GRABER Kent B. Guichard Richard A. Graber Vice President, Finance and Director Chief Financial Officer
/s/ DANIEL T. CARROLL /s/ DONALD P. MATHIAS Daniel T. Carroll Donald P. Mathias Director Director
/s/ MARTHA M. DALLY /s/ C. ANTHONY WAINWRIGHT Martha M. Dally C. Anthony Wainwright Director Director
Schedule II - Valuation and Qualifying Accounts
AMERICAN WOODMARK CORPORATION
(In Thousands)
Additions Balance at Charged to Balance Beginning Cost and Deduc- at End Description(a) of Period Expenses tions of Period - --------------------------- ---------- ---------- ------ ---------
Year ended April 30, 1996:
Allowance for doubtful accounts $ 243 $ 620 $ (234)(b) $ 629
Reserve for cash discounts $ 240 $2,977(c) $(2,967)(d) $ 250
Reserve for sales returns and allowances $ 698 $3,489(c) $(3,560) $ 627
Year ended April 30, 1995:
Allowance for doubtful accounts $ 313 $ 40 $ (110)(b) $ 243
Reserve for cash discounts $ 225 $2,811(c) $(2,796)(d) $ 240
Reserve for sales returns and allowances $ 679 $3,865(c) $(3,846) $ 698
Year ended April 30, 1994:
Allowance for doubtful accounts $ 818 $ 234 $ (739)(b) $ 313
Reserve for cash discounts $ 240 $2,393(c) $(2,408)(d) $ 225
Reserve for sales returns and allowances $ 903 $3,792(c) $(4,016) $ 679
(a) All reserves relate to accounts receivable. (b) Principally write-offs, net of collections. (c) Reduction of gross sales. (d) Cash discounts granted.
S-1
In accordance with Securities and Exchange Commission requirements, the Company will furnish copies of all exhibits to its Form 10-K, not contained herein upon receipt of a written request and payment of $.10 (10 cents) per page to:
Mr. Kent Guichard Vice President, Finance and Chief Financial Officer American Woodmark Corporation P.O. Box 1980 Winchester, Virginia 22604-8090