SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)
          (X)ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                       EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended December 31, 1996

                                       OR

          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                         Commission file number 0-17018

                         STRATFORD AMERICAN CORPORATION
        (Exact name of small business issuer as specified in its charter)

           Arizona                                               86-0608035
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

2400 E. Arizona Biltmore Circle, Building 2, Suite 1270, Phoenix, Arizona  85016
(Address of principal executive offices)                              (Zip Code)

Issuer's  telephone  number,   including  area  code:  (602)956-7809  Securities
registered  under Section 12(b) of the Exchange Act: None Securities  registered
under Section 12(g) of the Exchange Act:
     Common Stock, $.01 Par Value
     Series "A" Preferred Stock, $.01 Par Value

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X  No
                                                                      ---   ---

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of the Regulation S-B is not contained  herein,  and no disclosure will
be contained,  to the best of  registrant's  knowledge,  in definitive  proxy or
information  statements  incorporated  by  reference in Part of III of this Form
10-KSB or any amendment to this Form 10-KSB [X]

         Issuer's revenue for its most recent fiscal year: $12,862,000.

         The aggregate  market value of the voting stock held by  non-affiliates
of the registrant,  based on the February 1997,  average bid and asked prices of
$.03 per share, is $1,861,000.

         At February 28, 1997,  84,076,806  shares of the issuer's  common stock
and no shares of its preferred stock were issued and outstanding.

         Certain portions of the registrant's definitive Proxy Statement,  which
will be filed with the Commission on or about April 30, 1997, in connection with
the Annual Meeting of Shareholders of the registrant to be held on July 9, 1997,
are incorporated by reference into Part III of this report.

Transitional Small Business Disclosure Format (check one)  Yes     No X
                                                              ---    ---
<PAGE>
                                     PART I

ITEM 1. BUSINESS
----------------

General
-------

         General  Development of Business.  Stratford American  Corporation (the
"Company"), an Arizona corporation,  has several wholly-owned subsidiaries   and
one subsidiary of which the Company owns 80%. Unless  otherwise  specified,  the
term "Company" as used herein includes the Company's subsidiaries.

         In June 1994,  the Company  established  Stratford  American Car Rental
Systems,   Inc.   ("SCRS")  to  acquire  the  assets  and  franchise  rights  of
substantially all of the Arizona operations doing business as Dollar Rent A Car.

Narrative Description of Business
---------------------------------

         The Company,  through its subsidiaries,  is engaged  principally in the
business  of leisure  and  commercial  car  rental in the State of  Arizona  and
nominal  involvement in real estate management and natural resource  exploration
and development. The Company employs 88 full-time employees.

         Dollar  Rent A Car.  In June  1994,  through  the  Company's  80% owned
subsidiary  SCRS,  the  Company  acquired  the  assets and  franchise  rights to
substantially all of the Arizona operations doing business as Dollar Rent A Car.
As  part  of  the  acquisition,  additional  funds  were  raised  by  SCRS  from
subordinated notes. The noteholders also own 20% of the outstanding common stock
of SCRS  not  owned  by the  Company.  See  Notes  3 and 12 to the  Consolidated
Financial  Statements.  The  status  of SCRS as a  franchise  is  governed  by a
franchise agreement (the "Franchise  Agreement") granted by Dollar Systems, Inc.
(the  "Franchisor").  The Franchise  Agreement grants to SCRS certain  exclusive
territories in which to operate the Dollar Rent A Car vehicle  rental  business.
These territories  include all Arizona counties except the Counties of Coconino,
Navajo and Pima. The Franchise  Agreement is in effect for a period of ten years
with an option to renew such agreement for an additional ten years provided that
SCRS has  operated its business in  compliance  with the terms of the  Franchise
Agreement.  The Franchise  Agreement  provides the Franchisor  with  significant
rights  regarding  the business and  operations of SCRS.  Specifically,  SCRS is
required to operate its franchise in accordance with certain standards contained
in the Franchise  Agreement and a referenced Dollar Rent A Car Operations Guide.
This includes certain guidelines  relating to the number of vehicles  maintained
for rental, and the amount of advertising and promotion  expenditures  required.
The  Franchisor  has the right to monitor the  operations  of SCRS,  and certain
defaults by SCRS under the Franchise  Agreement  would give the  Franchisor  the
right to terminate the franchise governed by such Franchise Agreement.  Any loss
of  the   franchise  could  have a  material  adverse  effect  on the  Company's
business,  operating results and financial  condition.  Certain license fees are
required to be paid  monthly  based on an agreed upon  percentage  structure  of
gross rental revenues, as provided for by the Franchise Agreement.  In May 1995,
an  Assistance  Agreement  between  SCRS and  Franchisor  modified  the  License
Agreement (see Note 3 to the Consolidated Financial Statements).
                                       2
<PAGE>
         SCRS rents cars,  trucks,  and  passenger  vans to business and leisure
travelers and others at 11 locations,  including all three  terminals at Phoenix
Sky Harbor International  Airport. SCRS also generates revenue from the sales of
ancillary  products  such  as  loss  damage  waivers,   supplemental   liability
insurance,  personal accident  insurance and personal effects  insurance.  Total
revenues  from the car rental  operations  accounted  for  approximately  99% of
consolidated revenue during the year ended December 31, 1996.

         SCRS has  opened  four  additional  locations  since  its  acquisition,
including  rental  counters  at both the  America  West  Arena  and the  Arizona
Biltmore Resort in Phoenix, the Radisson Resort in Scottsdale, and the Southeast
Regional Office in Mesa, Arizona.

         The  vehicle  rental  industry is very  competitive  and subject to the
pressures of both the rental rates and fleet sizes of competitors as well as the
availability  of a reasonably  priced  fleet.  In any given  location,  SCRS may
encounter competition from national, regional and local companies, many of whom,
particularly  those owned by the major vehicle rental companies,  have access to
greater  financial  resources than SCRS.  SCRS's main  competitors are The Hertz
Corporation,  Avis Inc., Alamo Rent a Car Inc., National Car Rental System Inc.,
and Budget Rent a Car  Corporation.  SCRS's  operations  are generally the sixth
largest at its Phoenix Sky Harbor Airport  locations.  There can be no assurance
the Company will be able to compete  successfully.  Any inability by the Company
to compete  successfully  would have a material  adverse effect on the Company's
business, operating results and financial condition.


         Approximately  81% of  SCRS's  revenue  is  generated  at  its  airport
facilities.  Any event which  disrupts  air travel  patterns  at SCRS's  airport
facilities for a continued  period of time could have a material  adverse effect
on SCRS's  financial  condition  and results of  operations.  These events could
include labor unrest,  airline  bankruptcies or consolidations,  the outbreak of
war or  terrorist  incidents,  natural  occurrences,  such as  earthquakes,  and
general economic conditions.

         SCRS's  rental  business is seasonal,  and  historically,  the stronger
revenue months occur from February through May. As a result, any occurrence that
disrupts travel patterns during this period could have a material adverse effect
on SCRS's annual  performance.  SCRS's weakest  revenue months are generally the
months of August, September and December.

         Sports Careers. In October 1996, the assets of the Company's subsidiary
Stratford  American  Sports  Corp.  ("SASC")  were  sold.  The stock of SASC was
subsequently   sold  in  December  1996.  SASC  has  been  accounted  for  as  a
discontinued  operation as discussed  in Note 14 to the  Consolidated  Financial
Statements.  The Company has no future  plans to  participate  in sports  career
related activities.

         Real  Estate.  The  Company's  only owned real estate  property,  owned
through a joint venture  interest,  was sold in March 1995.  Total revenues from
real estate  operations  were  insignificant  during the year ended December 31,
1996. (See Item 2 - Properties.)

         Natural  Resources.  The Company  owns,  through its  subsidiaries,  an
interest in an Alaskan gold mining prospect,  and a nominal interest in four oil
and gas wells  located in Arkansas and  Oklahoma.  Total  revenues  from natural
resource operations were insignificant during the year ended December 31, 1996.
(See Item 2 - Properties.)

                                                                               3
<PAGE>
ITEM 2. PROPERTIES
------------------

         Principal Offices.  The principal offices of the Company are located at
2400 East Arizona  Biltmore  Circle,  Building 2, Suite 1270,  Phoenix,  Arizona
85016,  telephone  (602)  956-7809.  The  premises  are  leased  at the  rate of
approximately  $99,000  per  year.  The term of the  current  lease  expires  in
September 1999. The Company believes its office space is sufficient to meet its
operational needs in the near future.

         SCRS leases a 2,500 square foot building  situated on 2.4 acres of land
for use in its Dollar Rent A Car  operations  as a service  facility and vehicle
staging area. This facility,  located at 50 S. 24th Street in Phoenix,  Arizona,
is leased at a current rate of approximately $79,000 per year. The lease expires
in May 1999 and contains a five year extension option.  SCRS also leases various
facilities for its satellite and airport  operations for Dollar Rent A Car under
leases with terms  ranging  from month to month  through ten years.  The airport
lease requires  minimum annual lease payments of $1,150,000 and a maximum of 10%
of specified airport revenues. This lease expires in October 2000.

         Real Estate  Properties.  As of March 31,  1995,  the Company no longer
owns an interest in any real estate projects,  and the Company  currently has no
plans to invest in real estate opportunities in the foreseeable future.

         Effective  March 27, 1995,  the Company,  through its 50% joint venture
interest,  sold its interest in University  Center  property,  located in Tempe,
Arizona, consisting of three office buildings with an aggregate 175,000 rentable
square feet and 8 acres of adjacent  undeveloped  land. As a result of the sale,
the underlying  indebtedness,  totaling  $17,553,000,  was completely  satisfied
through  payments  and  reductions  based on terms of an  agreement  with  First
Interstate Bank of Arizona, N.A.

         Natural Resource Properties.

         Alaska Gold Exploration.  The Company,  through Stratford American Gold
Venture  Corporation,  holds a 41.3%  interest in the "Big  Hurrah," a gold mine
prospect  located near Nome,  Alaska.  The Company's  joint venture partner with
respect to this interest is Cornwall Pacific Alaska, Inc. ("Cornwall").

         On September 16, 1988, the Company and Cornwall granted to Solomon Gold
Corporation  (formerly known as Thor Gold Alaska, Inc.) ("Solomon") an option to
acquire a 70% interest in the Big Hurrah  prospect in  consideration  of Solomon
expending $3,500,000 by December 31, 1991, on exploration and development of the
prospect.  If Solomon  exercises the option,  the interest of the Company in the
prospect  will be reduced to 12.39%.  In 1988,  Solomon  drilled 91 core samples
and, in June 1989, issued a feasibility report in which it recommended continued
exploration and mining of the prospect.  The  feasibility  report assumed a base
price of gold of $400 per ounce.

         In July 1989, Solomon invoked the force majeure clause of its option on
the basis that the price of gold  dropped to less than $375 per ounce during the
preceding  90 days.  Operations  have  been  suspended  until  the price of gold
exceeds $400 per ounce, adjusted for CPI increases, for 90 consecutive days. The
price  of gold  as of  December  31,  1996  was  $371.00  per  troy  ounce.  The
requirement for Solomon to expend $3,500,000 by December 31, 1991 is extended by
the  period  the force  majeure  clause is in  effect.  The  Company  recorded a
write-down  in  1993  for its  interest  in the Big  Hurrah.  See  Note 6 of the
Consolidated Financial Statements.

         Oil and Gas. The Company's oil and gas activities are  insignificant as
of December 31, 1996.  The Company has not served as an operator with respect to
its oil  and gas  properties,  rather  it  participates  through  minor  working
interest  ownership with only limited  management  rights. The Company currently
has no  plans  in the near  future  to  participate  in  additional  oil and gas
activities.
                                                                               4
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
-------------------------

         The Company is not currently a party to any material legal proceedings.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------

         No matter was submitted to a vote of the Company's  shareholders during
the fourth quarter ended December 31, 1996.


EXECUTIVE OFFICERS
------------------

     Name            Age               Office                   Officer Since
     ----            ---               ------                   -------------

David H. Eaton       61       Chief Executive Officer               6/88
Mel L. Shultz        46       President                             5/87
Timothy A. Laos      43       Vice President, Chief                 3/95
                              Financial Officer,
                              Treasurer and Secretary

         David H. Eaton has been the  Chairman of the Board of  Directors of the
Company since  February 29, 1988 and its Chief  Executive  Officer since June 1,
1988.  Mr. Eaton  earned his Bachelor of Arts degree in Business  Administration
and  Economics  from  Wheaton  College in 1958 and his  Doctor of  Jurisprudence
degree from Stanford University in 1961.

         Mel L.  Shultz has been a Director  and the  President  of the  Company
since May 20, 1987. Mr. Shultz was previously involved on his own behalf in real
estate development and oil and gas investment.

         Timothy A.  Laos,  C.P.A.,  became a Vice  President,  Chief  Financial
Officer,  Treasurer and Secretary of the Company effective March 1, 1995. He was
involved in public  accounting  from 1978 to 1981  including the first two years
employed by Price Waterhouse. From 1984 through 1992, Mr. Laos was the corporate
controller for Martin Oil and Gas Company,  an independent oil and gas producer.
From  1992  through  1995,  he was the  corporate  controller  for  the  Haworth
Corporation,  a local real  estate  developer.  Mr.  Laos  earned a Bachelor  of
Business  Administration  degree in accounting from the University of Arizona in
1978.
                                                                               5
<PAGE>
                                     PART II


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
----------------------------------------------------------------

Market Information
------------------

         As of December 31, 1996, the Company's  common stock,  $0.01 par value,
was listed and traded on the OTC Bulletin Board (symbol: STFA).

         The high and low sales prices for each quarter  since  January 2, 1995,
are as follows:

                     Time Period               High        Low
                     -----------               ----        ---

              1996:  First quarter             .03         .02
                     Second quarter            .08         .02
                     Third quarter             .04         .03
                     Fourth quarter            .04         .02

              1995:  First quarter             .06         .0025
                     Second quarter            .08         .02
                     Third quarter             .07         .01
                     Fourth quarter            .04         .01

         The above  information  is based on the bid price as  furnished  by the
National Quotation Bureau. The quotations reflect inter-dealer  prices,  without
retail  mark-up,   mark-down  or  commission,   and  may  not  represent  actual
transactions.

Holders
-------

         As of March 31,  1997,  the common stock of the Company is estimated to
be held beneficially by approximately 2,000 shareholders.  No preferred stock is
outstanding.

Dividends
---------

         The Company has never paid cash dividends on its common equity. Arizona
law  restricts the ability of a corporation  to pay  dividends.  These state law
restrictions  materially  limit the  Company's  ability to pay dividends and are
likely to materially limit the future payment of dividends. The Company does not
expect to pay dividends in the foreseeable future, but rather expects to use any
cash otherwise  available for distribution to satisfy debt obligations and build
business operations.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-----------------------------------------------------------------

Liquidity and Capital Resources.
--------------------------------

         In the fourth quarter,  the Company  completed the sale of its interest
in SASC,  receiving  $247,000 in net cash proceeds from the sale. See Note 14 to
the Consolidated Financial Statements for additional information.

         In December  1996,  the  Company,  through  SCRS,  was able to secure a
$3,000,000 credit line from a major bank,  including a $2,000,000 line available
for general  operational  use, and a $1,000,000 line to purchase revenue earning
vehicles.  In addition,  the Company renewed and increased its vehicle financing
from  already  existing  lines of credit from three other  major  sources.  As a
result,  the Company was able to increase its  percentage of purchased  units by
7%, to 27% of its total fleet. The Company anticipates that this increased fleet
flexibility will assist in reducing overall vehicle costs, although no assurance
can be given that any such reduction will occur.
                                                                               6
<PAGE>
         In May 1995,  the Company  entered into an  Assistance  Agreement  with
Dollar Systems, Inc. which included the conditional elimination of $1,858,000 in
debt, and an interim  reduction in franchise fees during 1995 and 1996. See Note
3 to the Consolidated Financial Statements for additional information. Effective
January 1, 1997, the Company successfully met its requirement for completing the
terms and conditions of debt elimination.

         SCRS was able to improve its  operating  results from its Dollar Rent A
Car operations  during 1996,  before corporate  overhead  expenses.  The Company
anticipates that with its recently completed  financing and with continuation of
improved Dollar Rent A Car operating  results as discussed above, it should meet
its operational cash flow needs for the remainder of 1997. However,  the vehicle
rental  business  is highly  competitive  and subject to the  pressures  of both
rental rates and fleet sizes of  competitors  as well as the  availability  of a
reasonably  priced  fleet.  As such,  these  various  factors  are  outside  the
Company's  control  and,  accordingly,  there  are  no  guarantees  that  either
profitability or adequate cash flows from operations will be achieved.

Results of Operations - Year Ended  December 31, 1996,  Compared with Year Ended
December 31, 1995

         The Company  reported a net loss of $268,000  during 1996 in comparison
to net income of  $2,826,000  in 1995.  The 1996  results  include a net gain of
$221,000  from   discontinued   operations  as  discussed  in  Note  14  to  the
Consolidated  Financial  Statements.  The 1995 results include an  extraordinary
gain of  $3,402,000  as a result of a debt  reduction as discussed in Note 15 to
the Consolidated Financial Statements. The increase in consolidated depreciation
and  amortization  is due to recognition of a complete year of  depreciation  on
revenue  earning  vehicles  during 1996. The increase in  consolidated  interest
expense is attributable to a complete year of interest  expense  incurred on the
newly  acquired  debt to finance  revenue  earning  vehicles.

         Vehicle  Rental   Activities.   Revenues  from  rental  car  activities
accounted for 99% of total revenues from  continued  operations in 1996. The 13%
increase in vehicle  rental  revenues is  primarily a result of improved  rental
business  related to the Super Bowl and Major League  Baseball  spring  training
activities  not  experienced  in the previous  year,  as well as overall  growth
experienced  in the  Phoenix  area.  Rentals  related to the Super Bowl will not
recur in the foreseeable future as the Super Bowl is not presently  scheduled to
be held in Phoenix.  SCRS recognized improved operating results before corporate
overhead expenses for 1996 compared to 1995.

         Sports Activities.  As discussed above,  Sports Careers was sold during
1996. The results from discontinued  operations  includes a loss from operations
of $53,000  attributable  to the first nine months of 1996 as compared to a loss
from operations of $8,000 for the complete year of 1995.

         Real Estate  Activities.  Real estate revenues  decreased  $23,000 from
1995 to 1996 primarily due to the  elimination of University  Center  management
fees  subsequent to its sale in March 1995.  Ongoing  management  fee revenue in
1997 will be immaterial.

Capital Requirements
--------------------

         The  Company  does not have  any  material  plans  for  future  capital
expenditures at the present time.

Impact of Inflation
-------------------

         Inflation has not had a significant  impact on the Company's results of
operations. Due to competitive pressures, the Company is not always able to pass
through modest increases in rental rates. Future inflationary increases, if any,
is a factor of which the Company must be cognizant.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------

         Certain  statements  contained  in  this  report,  including,   without
limitation,   statements   containing  the  words   "believes,"   "anticipates,"
"intends,"  "expects" and words of similar import,  constitute  "forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 and are subject to the safe harbors created thereby.  Such  forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results to be materially different from the forward-looking
statements. Such factors include, among others, the following: SCRS's ability to
maintain  the Dollar  Rent A Car  franchise,  the  Company's  ability to compete
successfully,  the risk of disruption of air travel patterns,  the fact that the
Company's  operating  results are  seasonal,  the risk that all of the foregoing
factors or other factors could cause  fluctuations in the price of the Company's
common  stock,  and other  risks  detailed  herein  and from time to time in the
Company's other filings with the Securities and Exchange Commission. Given these
uncertainties,  readers should not place undue reliance on such  forward-looking
statements.
                                                                               7
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
---------------------------------------------------

                              Index                                         Page
                              -----                                         ----

Stratford American Corporation and Subsidiaries Consolidated Financial
Statements December 31, 1996

            Independent Auditors' Report                                     9

            Consolidated Balance Sheet as of December 31, 1996              10

            Consolidated Statements of Operations for the years ended
            December 31, 1996 and 1995                                      11

            Consolidated Statements of Changes in Shareholders'
            Equity (Deficiency) for the years ended
            December 31, 1996 and 1995                                      12

            Consolidated Statements of Cash Flows for the years ended
            December 31, 1996 and 1995                                      13

            Notes to Consolidated Financial Statements                      14


All schedules are omitted as the required  information  is  inapplicable  or not
present in amounts sufficient to require submission of the schedule,  or because
the required  information is presented in the consolidated  financial statements
or notes thereto.
                                                                               8
<PAGE>
                          INDEPENDENT AUDITORS' REPORT



The Board of Directors
Stratford American Corporation


We have  audited  the  accompanying  consolidated  balance  sheet  of  Stratford
American  Corporation and  subsidiaries as of December 31, 1996, and the related
consolidated  statements of operations,  shareholders' equity (deficiency),  and
cash  flows for each of the  years in the  two-year  period  then  ended.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
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 reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Stratford American
Corporation  and  subsidiaries as of December 31, 1996, and the results of their
operations  and their  cash flows for each of the years in the  two-year  period
then ended in conformity with generally accepted accounting principles.



Phoenix, Arizona
March 18, 1996
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                December 31, 1996
<TABLE>
<S>                                                                         <C>
                                     ASSETS


Cash and cash equivalents                                                   $    173,000
Receivables:
    Trade, less allowance for doubtful accounts of $20,000                       687,000
    Mortgages                                                                    128,000
                                                                            ------------
                                                                                 815,000

Restricted cash                                                                  760,000
Revenue earning vehicles, net                                                  7,095,000
Property and equipment, net                                                      462,000
Mining interests                                                                 375,000
Other assets                                                                     512,000
Franchise rights, less accumulated amortization of $105,000                      277,000
                                                                            ------------

                                                                            $ 10,469,000
                                                                            ============


                      LIABILITIES AND SHAREHOLDERS' EQUITY


Notes payable, secured by revenue earning vehicles                          $  7,070,000
Accounts payable                                                                 975,000
Notes payable and other debt                                                   2,219,000
Accrued interest                                                                 522,000
Accrued liabilities                                                              366,000
                                                                            ------------

        Total liabilities                                                     11,152,000

Shareholders' equity (deficiency):
   Nonredeemable preferred stock, par value $.01 per share;
     authorized 50,000,000 shares, none issued
   Common stock, par value $.01 per share; authorized 100,000,000 shares;
     issued and outstanding 84,076,806 shares                                    841,000
   Additional paid-in capital                                                 25,941,000
   Retained earnings (deficit)                                               (27,454,000)
   Treasury stock, 29,500 shares at cost                                         (11,000)
                                                                            ------------

                                                                                (683,000)
                                                                            ------------

Commitments and contingencies
                                                                            ------------

                                                                            $ 10,469,000
                                                                            ============
</TABLE>
          See accompanying notes to consolidated financial statements.
                                                                              10
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     Years ended December 31, 1996 and 1995


<TABLE>
<CAPTION>

                                                               1996            1995
                                                               ----            ----
<S>                                                       <C>             <C>
REVENUES:

  Vehicle rental activities                               $ 12,691,000    $ 11,186,000
  Rental property activities                                    36,000          59,000
  Oil and gas production                                         9,000          27,000
  Interest and other income                                    126,000          87,000
                                                          ------------    ------------

                                                            12,862,000      11,359,000
                                                          ------------    ------------

EXPENSES:

  Vehicle rental operations                                 11,071,000      10,723,000
  Production costs and taxes                                     4,000           5,000
  General and administrative                                   645,000         643,000
  Depreciation, depletion and amortization                   1,013,000         263,000
  Interest                                                     565,000         293,000
                                                          ------------    ------------

                                                            13,298,000      11,927,000
                                                          ------------    ------------

LOSS FROM CONTINUING OPERATIONS                               (436,000)       (568,000)

DISCONTINUED OPERATIONS:
  Loss from operations of Sports Careers                       (53,000)         (8,000)
  Gain on disposal of Sports Careers                           221,000
                                                          ------------    ------------
    Net income (loss) from discontinued operations             168,000          (8,000)

LOSS BEFORE EXTRAORDINARY ITEM                                (268,000)       (576,000)

EXTRAORDINARY ITEM-GAIN ON
EXTINGUISHMENT OF DEBT
                                                                             3,402,000
                                                          ------------    ------------

NET INCOME (LOSS)                                         $   (268,000)   $  2,826,000
                                                          ============    ============

Income (loss) per common share:
  Loss from continuing operations                         $      (0.01)   $      (0.01)
  Income (loss) from discontinued operations                      0.01           (0.00)
                                                          ------------    ------------

  Loss before extraordinary item                                 (0.00)          (0.01)
  Extraordinary item                                                              0.04
                                                          ------------    ------------

  Net income (loss) per common share                      $      (0.00)   $       0.03
                                                          ============    ============
</TABLE>
          See accompanying notes to consolidated financial statements.
                                                                              11
<PAGE>
                STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
                     Years ended December 31, 1996 and 1995

<TABLE>
<CAPTION>
                                                                                                                  Total
                                                        Additional    Retained                                shareholders'
                               Common Stock              paid-in      earnings          Treasury Stock           equity
                           Shares         Amount         capital      (deficit)       Shares      Amount      (deficiency)
                           ------         ------         -------     ------------     ------      ------      ------------
<S>                     <C>           <C>             <C>            <C>              <C>      <C>           <C>
Balance,
  December 31, 1994     84,076,806    $    841,000    $ 25,780,000   $(30,012,000)    29,500   $  (11,000)   $ (3,402,000)
Net income                                                              2,826,000                               2,826,000
                        ----------    ------------    ------------   ------------     ------   ----------    ------------



Balance,
  December 31, 1995     84,076,806    $    841,000    $ 25,780,000   $(27,186,000)    29,500   $  (11,000)   $   (576,000)
Repurchase of
  minority interest                                        161,000                                                161,000
Net loss                                                                 (268,000)                               (268,000)
                        ----------    ------------    ------------   ------------     ------   ----------    ------------



Balance,
  December 31, 1996     84,076,806    $    841,000    $ 25,941,000   $(27,454,000)    29,500   $  (11,000)   $   (683,000)
                        ==========    ============    ============   ============     ======   ==========    ============
</TABLE>

          See accompanying notes to consolidated financial statements.
                                                                              12
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 1996 and 1995

<TABLE>
<CAPTION>
                                                                         1996          1995
                                                                         ----          ----
<S>                                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                               $  (268,000)   $ 2,826,000
    Adjustments to reconcile net income (loss) to net cash
       provided by (used for) operating activities:
       Depreciation and amortization from continuing operations       1,013,000        263,000
       Depreciation and amortization from discontinued operations        11,000         16,000
       Gain on sale of revenue earning vehicles                           8,000
       Gain on sale of discontinued operations                         (221,000)
       Extraordinary item                                                           (3,402,000)

    Changes in assets and liabilities:
       Decrease (increase) in accounts and mortgages receivable        (333,000)        43,000
       Decrease (increase) in other assets                               93,000       (174,000)
       Increase (decrease) in accounts payable                           66,000       (378,000)
       Increase (decrease) in accrued liabilities                       253,000        (90,000)
                                                                    -----------    -----------

NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES                    622,000       (896,000)
                                                                    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Addition to restricted cash                                         (21,000)      (138,000)
    Proceeds from sales of revenue earning vehicles                   4,671,000
    Proceeds from sale of joint venture property                                     1,311,000
    Proceeds, net, from sale of subsidiary                              247,000
    Purchases of property and equipment                                (170,000)       (51,000)
    Purchases of revenue earning vehicles                            (8,478,000)    (4,457,000)
                                                                    -----------    -----------

NET CASH USED FOR INVESTING ACTIVITIES                               (3,751,000)    (3,335,000)
                                                                    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from revenue earning vehicle financing                   8,460,000      4,412,000
    Payments on revenue earning vehicle financing                    (5,617,000)      (185,000)
    Proceeds from other debt                                            225,000
    Payments on other debt                                             (147,000)      (120,000)
                                                                    -----------    -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                             2,921,000      4,107,000
                                                                    -----------    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                              (208,000)      (124,000)

CASH AND CASH EQUIVALENTS, beginning of year                            381,000        505,000
                                                                    -----------    -----------

CASH AND CASH EQUIVALENTS, end of year                              $   173,000    $   381,000
                                                                    ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Interest paid during the year                                   $   376,000    $   132,000
                                                                    -----------    -----------
    Equipment acquired in exchange for long-term debt               $    65,000    $   161,000
                                                                    ===========    ===========
</TABLE>
          See accompanying notes to consolidated financial statements.
                                                                              13
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 1 - NATURE OF BUSINESS
---------------------------

Stratford  American  Corporation  (the "Company") is engaged  principally in the
business  of leisure  and  commercial  car  rental in the State of  Arizona  and
minimal activity in real estate management and natural resource  exploration and
development.


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------

Principles of Consolidation
---------------------------

The consolidated  financial  statements  include the accounts of the Company and
its subsidiaries.  All significant  intercompany  accounts and transactions have
been eliminated in consolidation.

Cash and Cash Equivalents
-------------------------

The Company considers all highly liquid investments with original  maturities of
3 months or less to be cash equivalents.  The carrying amount  approximates fair
value because of the short maturity of the financial instruments.

Restricted Cash
---------------

Restricted  cash  consists of a bank  certificate  of deposit and a vehicle loan
deposit account. The carrying amount of restricted cash approximates fair value,
as interest on the instruments are at current market rates.

Revenue Earning Vehicles
------------------------

Revenue earning vehicles are stated at cost less accumulated  depreciation.  The
straight-line  method is used to depreciate  revenue  earning  vehicles to their
estimated  residual  values  over the  anticipated  periods  of use based on the
Company's fleet plan, typically ranging from 6 to 14 months.

Property and Equipment
----------------------

Property and equipment are recorded at cost.  Depreciation  is recorded based on
the  straight-line  method over the estimated useful lives of the related assets
ranging from 3 to 7 years.  Leasehold improvements are amortized over the lesser
of the lease term or the estimated useful lives.

Mining Interests
----------------

The Company  capitalizes the  acquisition  costs and related  exploration  costs
until such time as the property to which they relate is brought into production,
is abandoned,  or impairment in value occurs.  The costs incurred to date relate
to  acquisition  and  exploration  activities and will be amortized on a unit of
production  basis  following  commencement  of  production,  written  off if the
property is abandoned, or written down to impaired value if impairment occurs.

Franchise Rights
----------------

Franchise  rights are  recorded  at cost.  Amortization  is  recorded  using the
straight-line  method over the term and renewal  option  period of the franchise
agreement (20 years).
                                                                              14
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


Income Taxes
------------

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards  No. 109  "Accounting  for Income  Taxes."  This asset and
liability  approach  requires the  recognition of deferred tax  liabilities  and
assets for the expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of assets and  liabilities.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.

Income (Loss) Per Common Share
------------------------------

Income (loss) per common share is computed using the weighted  average number of
common shares of stock outstanding  during the years presented  excluding common
shares of stock acquired by the Company. Common stock equivalents (options) have
been  excluded  from the earnings per share  computation  as the effect of their
inclusion would be anti-dilutive in 1996. In 1995, common stock equivalents have
been included  using the treasury stock method.  The weighted  average number of
common shares  outstanding during the years ended December 31, 1996 and 1995 are
84,076,806 and 85,127,306, respectively.

Recent Accounting Pronouncements
--------------------------------

In March 1995,  the Financial  Accounting  Standards  Board issued SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" ("SFAS No. 121") which requires impairment losses to be recorded
on long-lived  assets used in  operations  when  indicators  of  impairment  are
present and the  undiscounted  cash flows  estimated  to be  generated  by those
assets are less than the assets'  carrying  amount.  SFAS No. 121 also addresses
the accounting  for  long-lived  assets that are expected to be disposed of. The
Company  adopted SFAS No. 121 in the first quarter of 1996 and this adoption did
not have a material impact on the consolidated financial statements.

Prior to January 1, 1996,  the Company  accounted  for its stock  option plan in
accordance  with the provisions of Accounting  Principles  Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
As such, compensation expense would be recorded on the date of grant only if the
current market price of the underlying  stock  exceeded the exercise  price.  On
January  1,  1996,  the  Company  adopted  SFAS  No.  123,  "Accounting  for the
Stock-Based  Compensation"  ("SFAS No. 123") which permits entities to recognize
as expense over the vesting period the fair value of all  stock-based  awards on
the date of grant  Alternatively,  SFAS No. 123 also allows entities to continue
to apply the  provisions  of APB Opinion No. 25 and provide pro forma net income
and pro forma  earnings per share  disclosures  for employee stock option grants
made in 1995 and future years as if the fair-value  based method defined in SFAS
No. 123 had been  applied.  The  Company  has  elected to  continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma disclosure provisions
of SFAS No. 123. No stock  options were granted in 1995 or 1996,  thus there are
no further disclosures required under SFAS No. 123.
                                                                              15
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


Use of Estimates
----------------

Management  of the  Company  has  made a number  of  estimates  and  assumptions
relating  to the  reporting  of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities  to  prepare  these  consolidated  financial
statements in conformity with generally accepted accounting  principles.  Actual
results could differ from those estimates.

Reclassifications
-----------------

Certain  amounts  in  the  accompanying  1995  financial  statements  have  been
reclassified to conform with the 1996 presentation.


NOTE 3 - ACQUISITION OF DOLLAR RENT A CAR FRANCHISE
---------------------------------------------------

Effective June 1, 1994,  Stratford  American  Corporation,  through an 80% owned
subsidiary,  acquired the franchise rights to  substantially  all of the Arizona
operations of Dollar Rent A Car. This  transaction was consummated in accordance
with a May 19, 1994 Sale and Purchase  Agreement between Stratford  American Car
Rental Systems, Inc. ("SCRS") and The John Douglas Corporation ("JDC"),  Douglas
F. and Bette Jane  Mitchell  and John Rector,  Jr. In addition to the  franchise
rights, the acquisition included cash, accounts receivable,  equipment and other
assets  relating to the Arizona  operations of JDC as of May 31, 1994. SCRS also
assumed  the May 31,  1994 JDC  accounts  payable,  accrued  expenses  and other
current liabilities.  As such, the adjusted fair value of the related assets and
liabilities, are as follows:

                Accounts receivable                   $ 389,000
                Other current assets                     19,000
                Equipment                               108,000
                Other assets                             70,000
                Franchise rights                        381,000
                Accounts payable                       (965,000)
                Other accrued liabilities              (252,000)
                Note payable - Dollar Systems, Inc.     (42,000)
                                                      ---------

                    Net Cash Acquired                 $ 292,000
                                                      =========

Separately, a License Agreement dated May 31, 1994 was also entered into between
SCRS and Dollar Systems,  Inc., the Dollar Rent A Car  franchisor.  A $1,900,000
note payable to Dollar Systems, Inc. was executed by SCRS which required monthly
payments of $18,000  including  principal and interest at 8% and matured in June
2000. On May 16, 1995, an agreement  between SCRS and Dollar  Systems,  Inc. was
executed  which  served  to  adjust  the  previously  set  cost  of the  license
agreement.  Along with other license  concessions,  the  remaining  note payable
balance to Dollar Systems, Inc., totaling $1,858,000,  was eliminated,  provided
that the Company does not default on any obligations due to Dollar Systems, Inc.
through the end of 1996,  in which case half of the balance  would become due in
June  2000.  Effective  January  1,  1997,  the  Company  successfully  met  its
requirement for completing the terms and conditions of debt elimination.

During 1994, $1,275,000 in proceeds from 12% subordinated notes were received to
provide working capital, to pay for closing costs and to provide cash, reflected
as restricted cash in the accompanying  Consolidated  Balance Sheet, to secure a
$750,000 letter of credit issued on behalf of Dollar  Systems,  Inc. These notes
require quarterly payments of interest only and mature on May 31, 1997. In 1995,
a principal  payment of $50,000 was made to a note holder.  The note holders own
20% of the outstanding common stock of SCRS.
                                                                              16
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 4 - REVENUE EARNING VEHICLES
---------------------------------

Revenue earning vehicles consist of the following as of December 31, 1996:

                  Revenue earning vehicles                 $7,444,000
                  Less accumulated depreciation              (349,000)
                                                           ----------

                                                           $7,095,000
                                                           ==========

The Company also leases vehicles under operating lease  agreements which require
the Company to provide normal maintenance and liability coverage. The agreements
have initial terms of 6 to 9 months.  The vehicles are returned to the lessor at
the end of the lease  term.  Total  vehicle  lease  expense was  $4,009,000  and
$4,588,000 for 1996 and 1995, respectively.


NOTE 5 - PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment consist of the following as of December 31, 1996:

              Service equipment                           $  183,000
              Computer software and equipment                277,000
              Furniture and fixtures                         208,000
              Leasehold improvements                         101,000
                                                          ----------

                                                            768,000
              Accumulated depreciation and amortization    (306,000)
                                                          ---------

                                                          $ 462,000
                                                          =========

NOTE 6 - MINING INTERESTS
-------------------------

In 1985,  the Company  acquired  the right to conduct  mineral  exploration  and
development pursuant to a mining lease in Alaska through the issuance of 105,000
common shares.  In February 1990, an additional  200,000 shares of the Company's
common stock were issued in  connection  with this  acquisition.  Pursuant to an
agreement dated  September 16, 1988, the Company  assigned its 41.3% interest in
the joint venture to a wholly-owned subsidiary,  Stratford American Gold Venture
Corporation  ("SAGVC").  Under the terms of an agreement of September  16, 1988,
the Company and its joint venture  partner granted to a third party an option to
acquire a 70% interest in the  property.  Upon the third party  exercising  such
option, SAGVC will hold a 12.39% interest in the property.

This third party has not conducted  exploration  activities  since July 1989, as
permitted by the  agreement.  Activity is not  required  until the price of gold
exceeds a price in excess of $400 for a period of ninety  consecutive  days. The
Company  recorded a write-down  of $551,000 in 1993 as a result of the length of
time without  exploration  activities  and the inability of the price of gold to
exceed $400 per ounce since those activities ceased.
                                                                              17
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 7 - MORTGAGES RECEIVABLE
-----------------------------

Mortgages receivable,  secured by second deeds of trust on residential property,
bear  interest at 10.5% per annum.  Total  principal  and interest  payments are
amortized  over the  30-year  life of the  mortgages  and are  payable  in equal
monthly  installments.  The  principal  payments to be received on the mortgages
receivable are as follows:

          Year ending December 31:
                  1997                              $  5,000
                  1998                                 5,000
                  1999                                 6,000
                  2000                                 6,000
                  2001                                 7,000
                  Thereafter                          99,000
                                                    --------

                                                    $128,000
                                                    ========


NOTE 8 - NOTES PAYABLE AND LINES OF CREDIT SECURED BY REVENUE EARNING VEHICLES
------------------------------------------------------------------------------

Notes payables and lines of credit secured by revenue earning  vehicles  consist
of the following as of December 31, 1996:

         Notes payable to General Motors Corporation
            with various termination dates during 1997;
            secured by certain revenue earning vehicles;
            2% to 2.5% of principal due monthly; interest
            at 10.75% due monthly.                                 $2,115,000

         Notes payable under a $5.0 million line of credit to
            Ford Motor Credit with various termination dates
            during 1998; secured by certain revenue earning
            vehicles; 2.25% of principal due monthly; interest
            at 30-day Federal Reserve rate plus 3.25% (8.50%
            at December 31, 1996) due monthly.                      1,933,000

         Amounts under $3.65 million line of credit to Nissan
            Motors Acceptance Corporation with various
            termination dates during 1998; secured by certain
            revenue earning vehicles; 2% of principal due
            monthly; interest at prime plus 2% (10.25% at
            December 31, 1996) due monthly.                         3,022,000

         $1.0 million asset based line of credit with Imperial Bank
            of California, effective through December 11, 1998;
            secured by certain revenue earning vehicles;
            2% of principal due monthly; interest at prime plus
            1.5% (9.75% at December 31, 1996) due monthly.
                                                                   ----------

                                                                   $7,070,000
                                                                   ==========

Unused  revenue  earning  vehicle  lines of credit  at  December  31,  1996 were
approximately $4,695,000.
                                                                              18
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 9 - NOTES PAYABLE AND OTHER DEBT
-------------------------------------

Notes payable and other debt consist of the following as of December 31, 1996:

          Subordinated notes payable; due May 31,
              1997, interest due quarterly at 12%.              $1,225,000

          $2.0 million Revolving line of credit effective
             through December 11, 1998; secured by certain
             pledged common shares of SCRS; interest
             at prime plus 1.5% (9.75% at December 31, 1996)
             due monthly.                                          225,000

          Note payable; due April 1997, interest due
              quarterly commencing August 1994 at
              lender's reference rate (8.25% at December
              31, 1996); guaranteed by certain directors
              of the Company; outstanding balance
              includes estimated future interest payments
              totaling $4,500.                                     304,000

          Capital lease obligations. (Note 11)                     143,000

          Other; interest rates ranging from 10.5% to 12%,
              maturing through 2010.                               322,000
                                                                ----------

                                                                $2,219,000
                                                                ==========

Included in other is a $214,000 convertible debenture note payable to an officer
of the  Company  which is due on  demand.  Interest  accrues at the rate of 12%.
Accrued  interest at  December  31, 1996  amounts to  $144,000.  The note can be
converted,  at the holder's  election,  into 1,367,629 shares of $0.01 par value
common stock, based on the market value of the common stock on the date the note
was executed.

Under notes payable and other debt loan  provisions in effect as outlined above,
principal payments due are as follows:

           Year ending December 31:
                  1997                                 $1,800,000
                  1998                                    270,000
                  1999                                     35,000
                  2000                                     15,000
                  2001                                     13,000
                  Thereafter                               86,000
                                                       ----------

                                                       $2,219,000
                                                       ==========
                                                                              19
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS
---------------------------------------------

Statement of Financial  Accounting  Standards No. 107,  "Disclosures  about Fair
Value of Financial  Instruments",  requires that the Company disclose  estimated
fair values for its financial instruments.

The  carrying  amount of  receivables,  accounts  payable and  accrued  expenses
approximates  fair value as they are  expected to be collected or paid within 90
days of year end. The fair value of the  Company's  debt is  estimated  based on
quoted  market  prices for the same or similar  issues or on the  current  rates
offered to the Company for debt of the same remaining maturities.

Limitations

Fair  value  estimates  are made at a  specific  point in time and are  based on
relevant market information and information about the financial instrument; they
are  subjective  in nature and involve  uncertainties,  matters of judgment and,
therefore,  cannot be determined with precision.  These estimates do not reflect
any premium or discount that could result from offering for sale at one time the
Company's  entire  holdings of a particular  instrument.  Changes in assumptions
could significantly affect these estimates.

Since the fair value is estimated as of December 31, 1996, the amounts that will
actually be realized or paid at settlement or maturity of the instruments  could
be significantly different.

The estimated fair values of the Company's financial instruments are as follows:

                                                          December 31, 1996
                                                      --------------------------

                                                       Carrying
                                                        Amount        Fair Value
                                                        ------       -----------

     Cash and restricted cash                         $  933,000     $  933,000
     Mortgages receivable                                128,000        128,000
     Notes payable and other debt:
         Vehicle finance notes                         7,070,000      7,070,000
         Subordinated notes                            1,225,000      1,225,000
         Other debt                                      994,000        994,000
                                                      ----------     ----------

           Total notes payable and other debt         $9,289,000     $9,289,000
                                                      ==========     ==========
                                                                              20
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 11 - OBLIGATIONS UNDER CAPITAL LEASES
------------------------------------------

The Company has computer equipment,  telephone equipment and vehicle service and
maintenance  equipment  under  capital  lease  agreements,  which expire in 1998
through 2001.  The combined cost of the equipment is $226,000 and is included in
computer  and  service  equipment  (Note 5).  Accumulated  amortization  totaled
$56,000 as of December 31, 1996.

A summary of the present value of future  minimum  capital lease payments are as
follows:

         Year ending December 31:
                  1997                                              $ 82,000
                  1998                                                47,000
                  1999                                                22,000
                  2000                                                12,000
                  2001                                                 8,000
                                                                    --------

        Total minimum capital lease payments                         171,000

        Less amount representing interest                             28,000
                                                                    --------

        Present value of future minimum capital lease payments      $143,000
                                                                    ========


NOTE 12 - MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY
------------------------------------------------------

In June 1994, Stratford American Car Rental Systems, Inc. ("SCRS") issued common
stock equal to 20% of the outstanding  shares as consideration due under certain
loans obtained for use in the  acquisition of the Dollar Rent A Car  operations.
The Company owns 80% of the outstanding shares of SCRS.


NOTE 13 - COMMON STOCK OPTIONS
------------------------------

As of December 31, 1996,  options to purchase  6,500,000 shares of the Company's
common stock were outstanding.

An option to purchase  3,000,000 shares was granted to an officer of the Company
in 1994. In March 1997,  before the date of  expiration,  the option to purchase
all 3,000,000 shares was exercised for an aggregate exercise price of $30,000.

Options to purchase  3,500,000 shares were granted to certain Advisory Committee
members in 1992.

                                                      Exercise    Date of
                                                       price     expiration
                                                       -----     ----------

     Options granted - 1994           3,000,000         $.01     March 1997
     Options granted - 1992           3,500,000         $.05     September 1997
                                      ---------

                                      6,500,000
                                      =========

The  exercise  price was  greater  than or equal to the  market  price  when the
options were granted or extended. All options are currently exercisable.
                                       21
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 14 - SALE OF DISCONTINUED OPERATIONS
-----------------------------------------

In the fourth  quarter of 1996,  the  Company  sold its  interest  in  Stratford
American Sports Corp.  ("SASC").  Prior to the sale, the Company repurchased the
minority interest for a nominal amount,  resulting in a capital  contribution to
additional paid-in capital. The liquidation was finalized on December 30, 1996.

SASC has been accounted for as a discontinued  operation and,  accordingly,  its
results  of  operations  are  segregated  for  all  periods   presented  in  the
consolidated  financial  statements.  Revenue and related losses associated with
the discontinued operations are as follows:

                                                       Years ended December 31,
                                                       ------------------------
                                                         1996          1995
                                                         ----          ----

         Revenue                                       $841,000     $1,066,000
                                                       ========     ==========

         Income (loss) from discontinued operations    $168,000     $   (8,000)
                                                       ========     ==========

There was no  income  tax  benefit  associated  with the loss from  discontinued
operations  for the years  ended  December  31,  1996 and 1995 as the losses for
those same years served to reduce net operating loss carry forwards attributable
to SASC.


NOTE 15 - EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT
------------------------------------------------------

Effective March 27, 1995, the Company,  through a 50% owned joint venture,  sold
its interest in the University Center property,  located in Tempe, Arizona. As a
result  of the  sale,  the  underlying  indebtedness,  totaling  $17,553,000  in
principal and accrued  interest,  was completely  retired  through  payments and
reductions  based on terms of a debt  extinguishment  agreement with a bank. The
net effect of the above resulted in a gain of $3,402,000 which has been recorded
as  an  extraordinary  item  in  the  accompanying   Consolidated  Statement  of
Operations.
                                                                              22
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 16 - INCOME TAXES
----------------------

There  was no  income  tax  benefit  associated  with the loss  from  continuing
operations, the loss before extraordinary item or the extraordinary item for the
years ended December 31, 1996 and 1995. The extraordinary gain in 1995 served to
reduce net operating loss carryforwards.

The following net operating  loss and investment  tax credit  carryforwards  are
available at December 31, 1996, to offset future taxable income and income taxes
as follows:

                                                        Year
                                                      expires         Amount
                                                      -------         ------

                  Net operating loss                 2003-2010     $10,300,000
                  Investment tax credits             1997-2000         200,000

If certain  substantial  changes in the Company's  ownership should occur, there
would be an annual  limitation on the amount of the  carryforwards  which can be
utilized,  which could potentially impair the ability to utilize the full amount
of the carryforward.

There are no deferred tax assets or  liabilities  reflected in the  accompanying
Consolidated  Balance Sheet as of December 31, 1996.  The tax effect  associated
with the types of  temporary  differences  between  the tax bases of assets  and
liabilities and their financial  reporting amounts that exist as of December 31,
1996 are as follows:

                  Property and equipment, due to differences
                  in depreciation                               $  (209,000)
                  Allowance for mining interest impairment          220,000
                  Net operating loss carryforwards and
                 investment tax credits                           4,028,000
                                                                -----------
                                                                  4,039,000

                  Valuation allowance                            (4,039,000)

                  Net deferred tax asset                        $         0
                                                                ===========

The valuation allowance offsets the deferred tax asset due to the taxable losses
the Company has experienced in recent years. The valuation  allowance  decreased
by $923,000 in 1996.
                                       23
<PAGE>
                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


NOTE 17 - LEASE COMMITMENTS
---------------------------

Stratford  American Car Rental  Systems,  Inc.,  an 80% owned  subsidiary of the
Company  ("SCRS"),  leases  various  facilities  for its  satellite  and airport
operations for Dollar Rent A Car pursuant to operating leases with terms ranging
from month to month through ten years.  The Phoenix Sky Harbor Airport  location
is subject to the most  significant  lease which  requires  minimum annual lease
payments of $1,150,000 and a maximum of 10% of specified airport revenues.  SCRS
also  leases its Dollar  Rent A Car service  facility  pursuant to an  operating
lease with an option to purchase.  The lease  expires in May 1999 and contains a
five  year  extension  option.  Total  rental  expense  on  all  facilities  was
$1,720,000 in 1996 and $1,512,000 in 1995.

The aggregate  future  minimum lease  commitments  under  operating  leases with
noncancelable terms in excess of one year are as follows:

          Year ending December 31:
                  1997                            $1,352,000
                  1998                             1,331,000
                  1999                             1,258,000
                  2000                               958,000
                                                  ----------

                                 Total:           $4,899,000
                                                  ==========
                                                                              24
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-----------------------------------------------------------------------
        FINANCIAL DISCLOSURE
        --------------------

(a)        Previous independent accountants

           (i)  On February 14, 1996, Stratford American  Corporation  dismissed
                Price Waterhouse LLP as its independent accountants.

           (ii) The report of Price Waterhouse  LLP on the financial  statements
                for the fiscal year ended December 31, 1994 contained no adverse
                opinion  or  disclaimer  of  opinion  and was not  qualified  or
                modified as to uncertainty, audit scope or accounting principle.
                The report of Price  Waterhouse LLP on the financial  statements
                for the fiscal year ended December 31, 1993 contained no adverse
                opinion or disclaimer of opinion but did contain an  explanatory
                paragraph as to  uncertainty,  stating that the Registrant had a
                net  capital  deficiency,  raising  substantial  doubt about the
                Registrant's ability to continue as a going concern.

           (iii)The  Board  of  Directors,  as a  whole,  serves  as  the  Audit
                Committee. In that capacity, the Board of Directors participated
                in and approved the decision to change independent accountants.

           (iv) In  connection  with its audits for the two most  recent  fiscal
                years  and  through  February  14,  1996,  there  have  been  no
                disagreements  with  Price  Waterhouse  LLP  on  any  matter  of
                accounting   principles   or  practices,   financial   statement
                disclosure, or auditing scope or procedure,  which disagreements
                if not  resolved to the  satisfaction  of Price  Waterhouse  LLP
                would have caused them to make reference thereto in their report
                on the financial statements for such years.

           (v)  The Registrant  has received from Price  Waterhouse LLP a letter
                addressed  to the SEC stating  whether or not it agrees with the
                above  statements.  A copy of such  letter,  dated  February 15,
                1996, is filed as Exhibit 16 to this Form 8-K.

(b)        New independent accountants

           (i)  The  Registrant  engaged  KPMG  Peat  Marwick  LLP  as  its  new
                independent  accountants as of February 14, 1996. During the two
                most recent  fiscal years and through  February  14,  1996,  the
                Registrant has not consulted with KPMG Peat Marwick LLP on items
                which (1) were or  should  have  been  subject  to SAS 50 or (2)
                concerned  the subject  matter of a  disagreement  or reportable
                event with the former  auditor,  (as described in Regulation S-K
                Item 304(a)(2)).
                                                                              25
<PAGE>
                                    PART III


ITEMS 9, 10, 11 AND 12
----------------------

         The  information  called  for by Part III  (Items  9, 10, 11 and 12) is
incorporated  herein by reference from the material  included under the captions
"Elections of Directors," "Principal Shareholders," and "Executive Compensation"
in Stratford  American  Corporation's  definitive  proxy  statement (to be filed
pursuant to Regulation  14A) for its Annual Meeting of  Shareholders  to be held
July 9, 1997 (the "1997 Proxy Statement"), except that the information regarding
executive  officers called for by Item 401 of Regulation S-B is included in Part
I of this report on page 5. The 1997 Proxy  Statement is being prepared and will
be filed with the  Securities and Exchange  Commission in definitive  form on or
about April 30, 1997 and will be furnished to  shareholders  on or about June 1,
1997.


ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
-----------------------------------------------

    (a)  Financial  Statements and Financial Statement Schedules - See "Item 7 -
         Financial Statements and Supplementary Data" above.

    (b)  Reports on Form 8-K

             Report  dated  February  14,  1996 with  respect  to the  change in
             independent auditors from Price Waterhouse LLP to KPMG Peat Marwick
             LLP, including a letter from Price Waterhouse LLP.

    (c)  Exhibits - See index beginning on page 28

    (d)  Financial Statement Schedules - See "Item 7 - Financial  Statements and
         Supplementary Data."

                                                                              26
<PAGE>
         Signatures
         ----------

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                     STRATFORD AMERICAN CORPORATION



Date:    March 31, 1997              By   /s/ David H. Eaton
                                       --------------------------------------
                                       David H. Eaton, Chairman of the Board

              Pursuant to the requirements of the Securities and Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the registrant and in the capacities and on the dates indicated.



Date:    March 31, 1997             By   /s/ David H. Eaton
                                       --------------------------------------
                                       David H. Eaton, Chairman of the Board
                                       and Chief Executive Officer
                                       (Principal Executive Officer)



Date:    March 31, 1997             By   /s/ Mel L. Shultz
                                      ---------------------------------------
                                      Mel L. Shultz, President and Director



Date:    March 31, 1997             By   /s/ William G. Was, Jr.
                                      ---------------------------------------
                                      William G. Was, Jr., Director



Date:    March 31, 1997             By   /s/ Gerald J. Colangelo
                                      ---------------------------------------
                                      Gerald J. Colangelo, Director



Date:    March 31, 1997             By   /s/ Timothy A. Laos
                                      ---------------------------------------
                                      Timothy A. Laos, Chief Financial Officer
                                      (Principal Financial Officer and Principal
                                      Accounting Officer)
                                                                              27
<PAGE>
                                 EXHIBITS INDEX


Exhibits  10.55 through  10.62,  22.1 and 27.1 are the only exhibits  originally
filed with this report.  The Company hereby  incorporates  all other exhibits by
reference  pursuant to Rule 12b-32,  each of which (except  Exhibits 3.3, 10.12,
10.17 through  10.54) was filed as an exhibit to the Company's  Registration  on
Form 10 which was filed July 22,  1988,  and  amended  on  October 7, 1988,  and
December  8,  1988.  Exhibit  3.3 was  filed  with  the  Company's  Registration
Statement  on Form  S-1 on June  12,  1989,  with the  Securities  and  Exchange
Commission.  Exhibit  10.12 was filed as Exhibit  10.30 to the 10-K for the four
months ended December 31, 1988, which was filed with the Securities and Exchange
Commission  on April 11, 1989.  Exhibits  10.17 and 10.18 were filed as Exhibits
10.1 and 10.2 to the Company's Form 10-Q for the Quarterly Period Ended June 30,
1990,  which was filed on August 14,  1990,  with the  Securities  and  Exchange
Commission.  Exhibits  10.19 and 10.20 were filed as Exhibits 10.44 and 10.46 to
the Company's  Registration  on Form S-1 which was filed with the Securities and
Exchange Commission on October 1, 1990, and amended on November 8, 1990. Exhibit
10.21 was filed as Exhibit  10.3 to the  Company's  Form 10-Q for the  Quarterly
Period Ended June 30,  1991,  which was filed with the  Securities  and Exchange
Commission  on August 14, 1991.  Exhibit 10.22 was filed as Exhibit 10.44 to the
Company's Form 10-K for the year ended  December 31, 1991,  which was filed with
the Securities and Exchange Commission on April 14, 1992. Exhibits 10.23 through
10.34 were filed as Exhibits  10.1 through 10.8 and 10.12  through  10.15 to the
Company's  Form 10-Q for the  Quarterly  Period Ended June 30,  1992,  which was
filed with the Securities and Exchange  Commission on August 14, 1992.  Exhibits
10.35 and 10.36 were filed as  Exhibits  10.60 and 10.61 to the  Company's  Form
10-K for the year ended  December 31, 1992,  which was filed with the Securities
and Exchange  Commission  on April 15, 1993.  Exhibit 10.37 was filed as Exhibit
10.1 to the Company's Form 10-QSB for the Quarterly  Period Ended  September 30,
1993,  which was filed with the Securities  and Exchange  Commission on November
11, 1993. Exhibits 10.38 through 10.41 were filed as Exhibits 1 through 4 to the
Company's Form 8-K which was filed with the  Securities and Exchange  Commission
on June 14,  1994 and  amended on August 9, 1994.  Exhibit  10.39 was refiled as
Exhibit  10.2 to the  Company's  Form  10-QSB  for the  Quarterly  Period  Ended
September 30, 1994, which was filed with the Securities and Exchange  Commission
on November 15, 1994. Exhibits 10.42 and 10.43 were filed as Exhibits 1 and 2 to
the  Company's  Form 8-K  which  was  filed  with the  Securities  and  Exchange
Commission on April 11, 1995. Exhibits 10.44 through 10.48 were originally filed
with Form 10-KSB for the year ended December 31, 1994,  which was filed with the
Securities and Exchange Commission on April 14, 1995. Exhibit 10.49 was filed as
Exhibit 10.1 to the Company's  Form 10-QSB for the  Quarterly  Period Ended June
30, 1995, which was filed with the Securities and Exchange  Commission on August
14,  1995.  Exhibit  10.50 was filed as Exhibit 16.1 to the  Company's  Form 8-K
which was filed with the  Securities  and  Exchange  Commission  on February 22,
1996.  Exhibits 10.51 through 10.54 were  originally  filed with Form 10-KSB for
the year  ended  December  31,  1995,  which was filed with the  Securities  and
Exchange Commission on April 15, 1996.

 Number      Description                                                    Page
 ------      -----------                                                    ----

  3.1        Articles of Incorporation                                       N/A

  3.2        By-laws                                                         N/A

  3.3        Articles of Amendment to Articles of Incorporation              N/A

  4.1        Form of Common Stock Certificate                                N/A

  4.2        Form of Series "A" Preferred Stock Certificate                  N/A

  4.3        Article IV of the Articles of Incorporation                     N/A

  4.4        Article III of the Bylaws                                       N/A

                                                                              28
<PAGE>
 Number      Description                                                    Page
 ------      -----------                                                    ----

  10.1       Joint Venture Agreement for University Center Developers,
             date as of February 19, 1987                                    N/A

  10.2       Indemnification Agreement, dated as of May 19, 1988,
             between the Company and Mel L. Shultz                           N/A

  10.3       Schedule of Omitted Indemnification Agreements                  N/A

  10.4       Indemnification Agreement, dated as of February 19, 1988,
             relating to guarantees                                          N/A

  10.5       Indemnification Agreement, dated as of May 10, 1988,
             relating to guarantees                                          N/A

  10.6       Registration Agreement, dated as of February 19, 1988,          N/A

  10.7       Agreement, dated as of February 18, 1988, relating to
             restrictions against preferred shares                           N/A

  10.8       Trust Agreement, dated as of June 18, 1987                      N/A

  10.9       Joint Venture Agreement, dated as of July 2, 1985,
             between Night Hawk Resources Corporation and
             Cornwall Pacific Alaska, Inc.                                   N/A

  10.10      Settlement Agreement and Release, effective July 1, 1988        N/A

  10.11      Settlement Agreement, dated as of July 18, 1988                 N/A

  10.12      Judgment in Action No. CB72760, dated September 13, 1988        N/A

  10.13      Assignment of Joint Venture Interest                            N/A

  10.14      Agreement made September 13, 1988, among Golden Zone
             Zone, Inc., Cornwall Pacific Alaska, Inc., Stratford American
             Resource Corporation, and Thor Gold Alaska, Inc.                N/A

  10.15      Share Sale and Registration Agreement, dated January 31, 1989   N/A

  10.16      Purchase Agreement with Mark A. Tudi, dated November 3, 1989    N/A

  10.17      Joint Operating Agreement, dated February 1, 1988               N/A

  10.18      Promissory Note, dated March 15, 1990                           N/A

  10.19      Stratford American Corporation Convertible Debenture
             Note dated March 15, 1990                                       N/A

  10.20      Agreement, dated as of July 24, 1990, with Minco American
             Corporation                                                     N/A

  10.21      Guaranty dated June 28, 1991, from Stratford American
             Corporation to NBB Oil and Gas Partners (U.S.A.)                N/A

                                                                              29
<PAGE>
 Number      Description                                                    Page
 ------      -----------                                                    ----

  10.22      Assignment and Assumption Agreement, dated as of November 19,
             1991, between Stratford American Oil and Gas Corporation and
             SA Oil and Gas Corporation                                      N/A

  10.23      Convertible Note Agreement dated April 27, 1992 between
             Stratford American Sports Corp. and Arthur J. Martori           N/A

  10.24      Pledge Agreement dated April 27, 1992 by Stratford American
             Corporation to Arthur J. Martori                                N/A

  10.25      Stockholders' Agreement dated April 27, 1992 among Stratford
             American Sports Corp., Stratford American Corporation, and
             Arthur J. Martori                                               N/A

  10.26      Convertible Note dated April 27, 1992 by Stratford American
             Sports Corp. and Arthur J. Martori                              N/A

  10.27      Restructure Agreement dated May 19, 1992 between Stratford
             American Properties Corporation and Security Pacific
             Bank Arizona                                                    N/A

  10.28      Promissory Notes dated May 19, 1992 from Stratford American
             Properties Corporation to Security Pacific Bank Arizona         N/A

  10.29      Deed of Trust, Assignment of Rents, Security Agreement and
             Financing Statement dated May 19, 1992 by Stratford American
             Properties Corporation to Security Pacific Bank Arizona         N/A

  10.30      Continuing Guaranty dated May 19, 1992 by certain officers and
             directors of Stratford American Properties Corporation to
             Security Pacific Bank Arizona                                   N/A

  10.31      Debt Restructuring Agreement dated July 1, 1992 between
             First Interstate Bank of Arizona, N.A., University Center
             Developers, Stratford American Properties Corporation and
             Stratford American Corporation                                  N/A

  10.32      Replacement Promissory Notes A, B and C dated July 1, 1992
             by University Center Developers to First Interstate Bank
             of Arizona, N.A.                                                N/A

  10.33      Replacement Unconditional Guarantee of Payment dated July 7,
             1992 from Stratford American Properties Corporation to First
             Interstate Bank of Arizona, N.A.                                N/A

  10.34      Replacement Unconditional Guarantee of Payment dated July 7,
             1992 from Stratford American Corporation to First Interstate
             Bank of Arizona, N.A.                                           N/A

  10.35      Settlement Agreement effective April 16, 1993 between Greyhound
             Real Estate Finance Company and Stratford American Properties
             Corporation                                                     N/A

  10.36      Settlement Agreement dated April 13, 1993 among Fairfield
             Acceptance Corporation, Fairfield Communities, Inc.,
             Stratford American Corporation and Stratford American
             Properties Corporation                                          N/A

                                                                              30
<PAGE>
 Number      Description                                                    Page
 ------      -----------                                                    ----

  10.37      Master Loan Modification and Extension Agreement dated
             September 28, 1993                                              N/A


  10.38      Sale and Purchase Agreement between Stratford American Car
             Rental Systems, Inc. and The John Douglas Corporation,
             Douglas F. and Bette Jane Mitchell and John Rector, Jr.
             dated May 19, 1994                                              N/A

  10.39      License Agreement between Dollar Systems, Inc. and Stratford
             American Car Rental Systems, Inc. effective June 1, 1994        N/A

  10.40      Promissory Note between Dollar Systems, Inc. and Stratford
             American Car Rental Systems, Inc. effective June 1, 1994        N/A

  10.41      Registrant's Press Release dated June 2, 1994                   N/A

  10.42      Sale and Purchase Agreement between University Center
             Developers and St. Paul Properties, Inc. dated March 8, 1995    N/A

  10.43      Registrant's Press Release dated March 30, 1995                 N/A

  10.44      Agreement and Release dated September 1, 1994 among F. R.
             Hill, Jr., as Trustee, Stratford American Resource Corporation
             And Stratford American Corporation                              N/A

  10.45      Assignment dated September 1, 1994 from Stratford American
             Resource Corporation to F. R. Hill, Jr., as Trustee             N/A

  10.46      Assignment dated September 1, 1994 from Stratford American
             Energy Corporation to Tenison Oil Company                       N/A

  10.47      Clarification to Joint Venture Agreement for University Center
             Developers, dated as of March 10, 1995                          N/A

  10.48      Clarification and First Amendment to Joint Venture Agreement
             for University Center Developers, dated as of March 10, 1995    N/A

  10.49      Assistance Agreement between Stratford American Car Rental
             Systems, Inc. and Dollar Systems, Inc. dated May 16, 1995       N/A

  10.50      Letter of Price Waterhouse LLP dated February 15, 1996          N/A

  10.51      Guaranty from Stratford American Corporation to General
             Motors Acceptance Corporation dated August 9, 1995              N/A

  10.52      Continuing Guaranty from Stratford American Corporation
             to Ford Motor Credit Company dated July 14, 1995                N/A

  10.53      Guaranty Agreement from Stratford American Corporation
             to Nissan Motor Acceptance Corporation dated August 9, 1995     N/A

  10.54      Lease Plan Financing and Security Agreement between Stratford
             American Car Rental Systems, Inc. and Nissan Motor Acceptance
             Corporation dated August 9, 1995                                N/A

                                                                              31
<PAGE>
 Number      Description                                                    Page
 ------      -----------                                                    ----

  10.55      Credit Agreement by and among Stratford American Corporation,
             Stratford American Car Rental Systems, Inc. and Imperial Bank,
             dated December 11, 1996                                          33

  10.56      Revolving Line of Credit Note by Stratford American Corporation
             and Stratford American Car Rental Systems, Inc. to Imperial
             Bank, dated December 11, 1996                                    53

  10.57      Revolving Line of Credit Note by Stratford American Corporation
             and Stratford American Car Rental Systems, Inc. to Imperial
             Bank, dated December 11, 1996                                    57

  10.58      Security Agreement by Stratford American Corporation and
             Stratford American Car Rental Systems, Inc. to Imperial Bank,
             dated December 11, 1996                                          61

  10.59      Continuing Security Agreement by Stratford American Corporation
             and Stratford American Car Rental Systems, Inc. to Imperial Bank,
             dated December 11, 1996                                          70

  10.60      General Pledge Agreement by Stratford American Corporation
             to Imperial Bank, dated December 11, 1996                        80

  10.61      Subordination and Standstill Agreement by and among Stratford
             American Corporation, Stratford American Car Rental Systems, Inc.
             and Imperial Bank, dated December 11, 1996                       91

  10.62      Subordination Agreement by Dollar Rent A Car Systems, Inc. and
             Imperial Bank, dated December 11, 1996                           99

  11.1       Statement regarding computation of per share earnings           N/A

  22.1       Subsidiaries                                                    102

  27.1       Financial Data Schedule                                         103


Note:  Shareholders  may obtain copies of Exhibits by making written  request to
the  Secretary of the  Corporation  and paying  copying costs of $0.10 per page,
plus postage.
                                                                              32