Report of the Board of Directors, BFC Homes, Inc.

                  The Board of Directors of the Bible Fellowship Church Home Inc., held four regular business meetings, one special meeting and numerous committee meetings during the year. Bert N. Brosius served as Chairman, Robert W. Smock as Vice-Chairman, Robert H. Zentz as Secretary and Charles Hersh as Treasurer.

                  The Board membership is divided into five committees: Building, Finance, Public Relations, Personnel and Long-Range. James A. Beil served as President of the Bible Fellowship Church Homes, Inc., David J. Smock as Administrator of Fellowship Manor, Craig Porterfield as the Director of Fellowship Home and James Roth as Director of Research and Public Relations.

                  This past year has been a year of stabilization at Fellowship Manor and Fellowship Home. The financial situation is slowly improving and the employee turnover has also decreased which has resulted in improved employee behavior and positive patient care outcomes. The patient occupancy has been excellent and at times has produced a slight waiting list.

                  The Board of Directors and the Administration addressed the following major concerns and issues this past year:

                  1. Resolved the property tax exemption issue with the Whitehall Township officials and the Lehigh County solicitors. This issue was settled out of court in our favor and will provide an annual savings of approximately $45,000.

                  2. Developed preliminary architectural plans to begin the process of implementing the Fellowship Court apartment project. It is the desire of the Board of Directors to begin marketing the Court Apartments in early 1991.

                  3. Developed and implemented various fund raising activities to help maintain the financial viability of Fellowship Community. The results of these activities did not meet goal projections, however the contributions that did materialize helped prevent the need to draw additional monies from our line of credit and assisted in minimizing a negative financial statement.

                  4. The Board of Directors and Administration also studied various management systems to more adequately address the complexity of administering and financing a multiple agency corporation. The Board of Directors unanimously approved to recommend to the 107th Annual Conference a corporate name change, various by-law changes and a transfer of property. These changes will enhance the Bible Fellowship Church Home, Inc. position to negotiate financial issues, and more adequately identify the various ministries of the Church Home. This will provide more efficiencies in managing a growing complex corporation and minimize the legal implication of managing a health care institution to the Bible Fellowship Church.

                  The Board of Directors and Administration request your support and prayer as we address the following goals for the next year:

                  1. Maintain financial viability

                  2. Initiate fund raising activities to repay our line of credit and to obtain start-up money for the Court Apartment project.

                  3. Complete construction of the Chapel/Convocation area in the Manor.

                  4. Begin marketing and construction of the Court Apartments.

                  5. Continue to provide a caring, well trained staff to assure that the Bible Fellowship Church tradition is exemplified throughout Fellowship Community.

                  The Board of Directors wish to express its appreciation to James A. Beil, David J. Smock, Craig Porterfield and James Roth for their leadership and dedication. We praise God for their steadfast determination and wisdom. The Board of Directors request your faithful and earnest prayers as we seek His guidance in developing strategies to provide new programs, seek new patients and residents and to achieve financial stability. We also request your cooperation and support as we seek financial assistance from the members and friends of the BFC.

                  This coming year will be a challenging year for Fellowship Community as we begin expanding our services and looking to Him for wisdom and guidance.

                  The Board of Directors of the Bible Fellowship Church Home recommends the following to be adopted by the 107th Annual Conference:

1.                                 WHEREAS, the Board of the Bible Fellowship Church Home has for many years carried out the expressed purpose of providing a Home for the aging and infirm, and

WHEREAS, the program of this Board has expanded in its function and provisions of care, and, whereas, this Board is of the opinion that the present name of Board of Directors of the Bible Fellowship Church Home no longer fully expresses the present purpose and function of its ministry, therefore, be it

RESOLVED, that the name be changed from Board of Directors of the Bible Fellowship Church Home to Board of Directors of the Bible Fellowship Church Social Ministries Inc., and further

RESOLVED, that by the rule of exception, this Board be allowed to use this new name effective immediately.

2.                                 RESOLVED, that the Board of Directors of Bible Fellowship Church Social Ministries, Inc. be authorized to formulate new By-laws reflecting the new name and to restate the purpose, and, further,

RESOLVED, that the by-laws shall state that the corporation is formed on a non-membership basis.

3.                                 RESOLVED, that the Board of Bible Fellowship Church Social Ministries, Inc. obtain necessary legal counsel in order to restate the Articles of Incorporation and submit such restatement to the proper Commonwealth authorities.

4.                                 WHEREAS, the Board of Directors of Bible Fellowship Church Social Ministries, Inc. (formerly Board of Directors of Bible Fellowship Church Home) has operated and maintained property for many years in order to carry out its purpose(s) and ministry, and

WHEREAS, said Board has never held title to the property, and

WHEREAS, said Board is now engaged in a ministry of care with a 121 bed Skilled Nursing Facility and a 30 bed Personal Care Facility which present the possibility of severe liability suits which can be instituted against the Church as title is now construed, and

WHEREAS, said Board encounters difficulties when arranging financing agreements; therefore be it

RESOLVED, that the Board of Directors of the Bible Fellowship Church is hereby authorized to make a title transfer of the property in the name of Board of Bible Fellowship Church Social Ministries Inc. and, further

RESOLVED, that the By-laws shall contain an article declaring that upon dissolution or termination of the Bible Fellowship Church Social Ministries Corporation, the proceeds of all assets insofar as feasible shall go to the Bible Fellowship Church, and further

5.                                 RESOLVED, that the Faith & Order be amended at first reading: Board of Directors of the Bible Fellowship Church Social Ministries, Inc.

Election. The Board shall be composed of 13 persons, consisting of the President, a member by virtue of his office, and 12 other persons elected for a term of three years in the following classes:

Class I:Two ministers and two lay persons

Class II:Two ministers and two lay persons

Class III:Two ministers and two lay persons

                  Duties.

                  1.               The Board of Directors of the Bible Fellowship Church Social Ministries, Inc. shall be responsible to establish and maintain a ministry of care for the aging and infirm and to engage in such other forms of ministry of care and charitable work as determined by the Directors of the Corporation.

                  2.               The general business and affairs of the Bible Fellowship Church Social Ministries, Inc. shall be managed and conducted by its Board of Directors acting as a Board, or through its properly authorized officers in accordance with the by-laws of the Bible Fellowship Church Social Ministries, Inc. Management of its corporate business and affairs shall be in accordance with and subject to the Faith and Order of the Bible Fellowship Church.

                  3.               The general conduct of the Bible Fellowship Church Social Ministries, Inc. shall be under the immediate supervision and control of a President elected to serve at the pleasure of the Board. The President shall be reviewed annually by this Board of Directors.

                  4.               The Board of Directors of the Bible Fellowship Church Social Ministries, Inc. shall make a written report of its activities to the Annual Conference of the Bible Fellowship Church.

                  5.               The following shall be placed in the by-laws of the Bible Fellowship Church Social Ministries, Inc. as an article of said by-laws:

ARTICLE

Assets

                  Notwithstanding any other provisions of the bylaws:

Section 1

                  The sale or transfer of any of the real property of Bible Fellowship Church Social Ministries, Inc., whether now owned or hereafter acquired, shall not be permitted without the prior approval of the Bible Fellowship Church Annual Conference or the Board of Directors of the Bible Fellowship Church.

Section 2

                  This entire Article and any subsequent amendments must be placed in the Bible Fellowship Church Faith and Order, subject to the Bible Fellowship Church’s rules governing amendments to the Faith and Order of the Bible Fellowship Church.

Board of Directors of Bible Fellowship Church Home Inc.: Bert N. Brosius, LeRoy S. Heller, Charles Hersh, James G. Koch, John F. Moran, Keith E. Plows, Robert W. Smock, John W. Trauch, Robert H. Zentz