ITEM 1. Business
HOME BENEFICIAL CORPORATION
Home Beneficial Corporation ("the Corporation") was incorporated in Virginia on March 5, 1970, for the purpose of becoming a holding company for Home Beneficial Life Insurance Company ("the Life Company"), which originated in 1899. On December 31, 1970, pursuant to a Plan of Reorganization proposed by the Board of Directors and approved by the stockholders of the Life Company, the Corporation acquired all of the issued and outstanding capital stock of the Life Company by merger of the Life Company into a wholly-owned subsidiary of the Corporation, the name of which was immediately changed to Home Beneficial Life Insurance Company. At the present time, the Life Company, which is engaged in the life and accident and health insurance business, is the major subsidiary of the Corporation.
There was no material change in the nature of business done by the Corporation during 1994.
BUSINESS OF THE LIFE COMPANY
The Life Company sells group life insurance and substantially all of the forms of ordinary insurance, including universal life, whole life, term, and annuities, together with accidental death and disability riders. The Life Company's business is concentrated in six Mid-Atlantic states and the District of Columbia, and its products are marketed through its own sales force of approximately 1,150 full-time personnel assigned to some 47 district offices located in principal cities and towns. In addition to the agency force, there were some 236 supervisory, administrative, clerical and other personnel employed in the home office.
The following table sets forth the geographic distribution of direct business premiums received during 1994:
Premiums Jurisdiction (In 000's)
Delaware $ 2,582 District of Columbia 2,971 Maryland 15,774 North Carolina 9,947 Tennessee 22,186 Virginia 40,246 West Virginia 1,190
The maximum amount of ordinary individual insurance presently retained by the Life Company without reinsurance is $200,000 plus an additional $75,000 coverage for accidental death. This maximum is scaled down according to the age and physical classification of the insured. The total amount of life insurance in force at December 31, 1994 reinsured by the Life Company with other companies aggregated $97 million representing less than 1% of the Life Company's life insurance in force on that date. The Life Company participates in several group life insurance programs as a reinsurer and also assumes reinsurance on a facultative (individual risk) basis from two other life insurance companies. Life insurance assumed relates principally to group life and represented approximately 17% of premium income and 55% of life insurance in force for 1994. Claims incurred under these group life insurance programs approximate the related premium income, and no significant assets or liabilities are required in the balance sheet. A contingent liability exists on insurance ceded to the reinsurer since the Life Company would be liable in the event that the reinsurer is unable to meet obligations assumed by it under the reinsurance agreement.
Accident and health insurance premiums accounted for less than 8% of premium income for 1994. A significant proportion of the accident and health premium is attributable to medical benefit coverage provided for the Life Company's employees and their dependents under its Protection and Retirement Plan. The Life Company offers no health insurance coverage other than to its own employees. The Life Company writes individual accident policies with death and dismemberment benefits. These policies accounted for approximately 30% of total accident and health premiums for 1994.
The Life Company, as a legal reserve company, is required by the various laws of the states in which it is licensed to transact business to carry as liabilities aggregate policy reserves which are considered adequate to meet its obligations on insurance policies in force. Such required reserves are considered statutory reserves because the methods and assumptions used in their calculation are explicitly prescribed by the laws of the various states. The liabilities shown herein for all policies issued since 1948 are based on guidelines prescribed by the American Institute of Certified Public Accountants and have been calculated in accordance with generally accepted accounting principles. Such liabilities are calculated by the use of assumptions as to mortality rates, interest rates, withdrawal rates and expense rates in effect at the time the gross premiums were calculated. Liabilities on paid-up policies include a liability for future maintenance expenses which the Life Company expects to incur. See Revenues, Benefits, Claims and Expenses, Note 1 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference from pages 11 and 12 of the 1994 Annual Report to Stockholders, for additional information relating to the Life Company's reserves.
The investment of the Life Company's funds and assets is determined by an Investment Committee. Generally, investments made must meet requirements established by the applicable investment statutes of the Commonwealth of Virginia governing the nature and quality of investments which may be made by life insurance companies.
The following table shows investments of the Life Company at December 31, 1994. Fixed maturities (bonds, notes and redeemable preferred stocks) and equity securities (nonredeemable preferred and common stocks) are stated at their estimated fair value; mortgage loans on real estate are stated at cost adjusted where appropriate for amortization of premium or discount; short-term investments are at cost; and policy loans are stated at unpaid balances.
Asset Value Amount Percent (000's) of Total Fixed Maturities: Bonds and notes: United States government and govern- ment agencies and authorities $ 29,679 2.6% States, municipalities and political subdivisions 284,437 24.8 Foreign government 25,317 2.2 Public utilities 242,799 21.2 All other corporate 109,745 9.6 Total fixed maturities 691,977 60.4
Equity Securities $ 24,230 2.1 Mortgage loans 338,458 29.6 Policy loans 53,426 4.7 Short-term investments 31,880 2.8 Other 5,168 .4 $1,145,139 100.0%
There were no principal and interest payments past due on fixed maturities at December 31, 1994.
The Life Company's mortgage portfolio consists of approximately 2400 conventional first mortgages on a wide range of residential and commercial properties located primarily in those Mid-Atlantic states in which the Life Company conducts its insurance business. At December 31, 1994 the aggregate carrying value of mortgage loans was $338,458,261, broken down by category as follows:
Residential $168,476,605 Commercial 169,981,656
Commercial loans include loans on apartments, shopping centers, office buildings and warehouses. Generally, commercial loans range from $250,000 to $3,500,000 in principal amount. The Life Company also makes some mortgage loans to churches. Every property is inspected by a staff underwriter prior to the issuance of a loan commitment. On commercial loans of more than $250,000, the property is inspected every two years after the loan is closed as long as the balance exceeds $250,000.
The Life Company's mortgage lending business is heavily concentrated in the states of Virginia and North Carolina. At December 31, 1994, approximately 76% of the Life Company's mortgages, constituting approxi- mately 74% of the total book value of the Life Company's mortgage port- folio, were on residential or commercial properties located in the State of Virginia. Additionally, at the same date approximately 14% of the Life Company's mortgages, constituting approximately 12% of the total book value of the Life Company's mortgage portfolio, were on properties in North Carolina. The relatively high percentage of mortgage loans made in these two states reflects the geographical concentration of the Life Company's insurance business activities in the same two states. Although the Life Company's mortgage loan portfolio is heavily concentrated in Virginia and North Carolina, the economies of those states are diversified, and the Life Company does not believe its mortgage loan portfolio reflects undue risk from the large percentage of its loans originated in those two states.
Although the economic downturn during 1990 and 1991 was characterized by troubled real estate loans in the portfolios of many financial institutions operating in the Life Company's market, the Life Company's mortgage loan portfolio has not reflected the widely-publicized experience of other financial institutions. The Life Company presently holds two real estate parcels acquired through foreclosure with a carrying value in the financial statements of $650,000. Mortgage loans whose terms have been restructured over the past five years are immaterial, and no mortgage loans were in foreclosure proceedings at December 31, 1994. Except as indicated below, there were no mortgage loans otherwise not performing in accordance with the contractual terms.
At December 31, 1994, the aging schedule for delinquent mortgage loans in terms of past due days was as follows:
Past due days 30-60 60-90 Over 90 Total
Principal $5,547,6691 $1,863,551 $ -0- $7,411,220 Percent of total mortgage loans 1.6% .6% - 2.2%
130-60 days past due includes a substantial amount of loan payments that have been received by the Life Company's brokers after their December, 1994 cut-off reporting date to the Life Company. These amounts will be included in their next remittance report.
The Life Company believes the quality of its loan portfolio is attributable to its relatively stringent underwriting standards which have been in force for many years. At the present time, and for a number of years, the Life Company's lending policies have restricted mortgage loans to a maximum loan to value ratio of 75%, based on the lower of cost or appraisal, except for purchase money mortgages and insured or guaranteed mortgages. The Life Company's policy is to place mortgage loans on non-accrual status where any mortgage payment is 90 days or more past due.
During the period 1986-1994, the Life Company experienced only five foreclosures on real estate loans, one in each of the years 1986, 1989 and 1990, two in 1992 and none in 1993 and 1994. The total of the unpaid principal balances of loans in these five foreclosures was $986,477. The Life Company disposed of three properties acquired in foreclosure proceedings prior to 1994 without loss. The Corporation does not provide a provision for loan losses in its financial statements. Based upon the de minimis loss experience of the mortgage loan portfolio over many years and the continuing satisfactory performance of its portfolio, the Corporation's management does not feel that a provision is required.
See Investment Operations, Note 2 of Notes to Consolidated Financial Statements, which is incorporated herein by reference from pages 12, 13, and 14 of the 1994 Annual Report to Stockholders, and Schedule I included in Part IV elsewhere herein, for additional information concerning the Corporation's consolidated investment portfolio.
The Life Company, in common with other insurance companies, is subject to regulation and supervision in each of the states in which it does business. Such regulation is primarily for the benefit of the policy- holders of the Life Company rather than the stockholders. Although the extent of such regulation varies from state to state, in general, the insurance laws of the respective states delegate broad administrative powers to supervisory agencies. These powers relate to the granting and revocation of licenses to transact business, the licensing of agents, the approval of the forms of policies used, reserve requirements, and the type and concentration of investments permitted. In addition, the supervisory agencies have power over the form and content of required financial statements and reports, including requirements regarding accounting practices to be employed in the presentation of such statements and reports. Certain of the required accounting practices vary from generally accepted accounting principles. See Notes 1 and 7 of the Notes to Consolidated Financial Statements, which Notes are incorporated herein by reference from pages 11, 12 and 17 of the 1994 Annual Report to Stockholders.
Several jurisdictions in which the Life Company does business including its domiciliary state of Virginia, have enacted legislation providing for specific regulation of the relationship between licensed insurers and their holding companies and among affiliated members of a holding company group. These statutes vary in substance from state to state, but generally speaking, vest administrative control in the insurance regulatory authority. Among the provisions found in these statutes are provisions for the filing of registration statements by insurers which are members of a holding company group, provisions that the holding company will be subject to reporting requirements and to visitation by the insurance regulatory authorities, standards as to transactions between insurers and their holding companies or between members of a holding company group, and control over the payment of extraordinary dividends. See Stockholders' Equity and Restrictions, Note 7 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference from page 17 of the 1994 Annual Report to Stockholders for additional information concerning transactions between the Life Company and its affiliates.
The life insurance business is intensely competitive and the Life Company competes with many other companies, both stock and mutual, in the states in which it is licensed. The American Council of Life Insurance in its "1994 Fact Book", estimates that of the 1,886 life insurance companies doing business in the United States at mid-year 1993, 1,777 were stock companies.
According to figures reported in the September 1994 issue of Best's Review, Life/Health Edition, calculated on a statutory accounting basis, the Life Company ranks in the top 11% of all life insurance companies in the United States based on total admitted assets as of December 31, 1993.
No material portion of the business of the Life Company is dependent upon a single customer or a very few customers. The group life insurance sold by the Life Company consists largely of reinsurance participations described on page 4.
The Corporation's only industry segment is the business of the Life Company, and its operations have contributed over 98% of the total consolidated revenues and income before income taxes for each of the past three years.
Neither the Corporation nor any of its subsidiaries engage in material operations outside of the United States, or derives material business from customers outside the United States.
ITEM 2.

ITEM 2. Properties
The principal office of the Corporation is located at 3901 West Broad Street, Richmond, Virginia 23230, which also serves as the home office premises of the Life Company. The home office building, which contains approximately 110,000 square feet of office space, was originally completed in 1950 with a 30,000 square foot addition completed in 1990. The building is used solely for company purposes.
The Life Company presently leases space for 54 district and detached offices in Delaware, Maryland, the District of Columbia, West Virginia, Virginia, Tennessee and North Carolina. The termination dates on these leases range from 1995 to 2003; all of the longer term leases being for district office purposes. The maximum annual rent paid under any lease is $28,775. The annualized rent under all leases in effect on December 31, 1994 was approximately $760,000.
ITEM 3.

ITEM 3. Legal Proceedings
As of the date of this report, neither the Corporation nor any of its subsidiaries was a party to any material pending legal proceedings.
ITEM 4.

ITEM 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Corporation's security holders during the fourth quarter of its fiscal year ended December 31, 1994.
PART II
ITEM 5.

ITEM 5. Market for the Registrant's Common Equity and Related Stockholder Matters
Incorporated herein by reference from the 1994 Annual Report to Stockholders, page 21.
ITEM 6.

ITEM 6. Selected Consolidated Financial Data
Incorporated herein by reference from the 1994 Annual Report to Stockholders, page 22.
ITEM 7.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Incorporated herein by reference from the 1994 Annual Report to Stockholders, pages 19 and 20.
ITEM 8.

ITEM 8. Financial Statements and Supplementary Data
Consolidated financial statements of the Corporation at December 31, 1994 and 1993 and for each of the three years in the period ended December 31, 1994 and the auditor's report thereon and the Corporation's unaudited quarterly financial data for the two year period ended December 31, 1994 are incorporated herein by reference from the 1994 Annual Report to Stockholders, pages 6 through 18 and 21.
ITEM 9.

ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
None.
PART III
ITEM 10.

ITEM 10. Directors and Executive Officers of the Registrant
(a) and (b) The following table gives the name and age of each of the directors (all of whom, except C. M. Glenn, Jr., L. W. Richardson, and Dianne N. Collins are executive officers of the Corporation and the Life Company) and their positions and offices with the Corporation and the Life Company and the dates first elected to those positions with the Corporation.
Position and Offices with the Corporation and the Life Company and Date Elected to Name Age Corporation Officer Position
Dianne N. Collins 49 Director of the Life Company and the Corporation and Community Volunteer
H. D. Garnett 52 Vice President (since 1979), Controller (since 1974) and a director of the Corporation and the Life Company
C. M. Glenn, Jr. 78 Retired Vice President-Treasurer and a director of the Corporation and the Life Company
W. G. Hancock 44 Counsel (since 1984) and a director of the Corporation and the Life Company
G. T. Richardson 42 Vice President (since 1983) and a director of the Corporation and the Life Company
L. W. Richardson 75 Retired Vice President and a director of the Corporation and the Life Company
J. M. Wiltshire, Jr. 69 Vice President (since 1972), Counsel (since 1982), Secretary (since 1994) and a director of the Corporation and the Life Company
R. W. Wiltshire 73 Chairman of the Board (since 1983) and a director of the Corporation and the Life Company
R. W. Wiltshire, Jr. 49 President (since 1988), Chief Executive Officer (since 1992) and a director of the Corporation and the Life Company
W. B. Wiltshire 46 Vice President (since 1983) and a director of the Corporation and the Life Company
Mrs. Collins was first elected to the Board of Directors of the Corporation on February 15, 1994, Messrs. Garnett, Hancock, G. T. Richardson, and W. B. Wiltshire were first elected to the Board in 1983, and Messrs. R. W. Wiltshire, Jr. and J. M. Wiltshire, Jr. were first elected to the Board in 1976 and 1971, respectively, all to fill then existing vacancies on the Board. The remaining persons named in the foregoing table have served as directors of the Corporation since its organization in 1970.
All of the above persons serve one year terms as both executive officers and directors, or in the case of Messrs. Glenn and Richardson and Mrs. Collins, as directors only, which expire April 4, 1995. There are no executive officers of the Corporation who are not directors.
(c) Not applicable.
(d) C. M. Glenn, Jr. is the uncle of W. G. Hancock. L. W. Richardson is the father of G. T. Richardson and the first cousin of R. W. Wiltshire. R. W. Wiltshire is the father of R. W. Wiltshire, Jr. and W. B. Wiltshire and the first cousin of J. M. Wiltshire, Jr.
(e)(1) Except as set forth below, each of the persons named in (a) and (b) above has been principally employed by the Corporation and the Life Company in the present position for more than the past five years. Dianne N. Collins has been a Trustee of the 1984 Voting Trust described in Item 12 below since January 4, 1994 and a volunteer in the Richmond, Virginia community for more than the past five years. C. M. Glenn, Jr. and L. W. Richardson retired at the end of 1986 and 1987, respectively, each having served in the office shown for more than five years immediately prior to his retirement. W. G. Hancock has been a partner of the law firm of Mays & Valentine, Richmond, Virginia since 1981 specializing in real estate and mortgage lending, insurance company regulation and general business matters. He was designated as Counsel to the Corporation and the Life Company effective June 13, 1984. J. M. Wiltshire, Jr. was elected to the additional office of Secretary of the Corporation and Life Company effective January 18, 1994. Effective April 7, 1992, R. W. Wiltshire, Jr. was elected Chief Executive Officer of the Life Company and the Corporation to succeed R. W. Wiltshire who had served in that office for more than five years immediately prior thereto. Prior to his election as Chief Executive Officer, R. W. Wiltshire, Jr. was responsible for the general management of the operations of the Corporation and the Life Company. R. W. Wiltshire retired as an employee and salaried officer of the Corporation and the Life Company effective September 6, 1993.
(e)(2) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) The Corporation's directors and executive officers are required to file reports with the Securities and Exchange Commission (the "Commission") concerning their initial ownership of shares of the Corporation's Class A and Class B Common Stock and any subsequent changes in that ownership, and the Corporation traditionally has assisted its directors and executive officers in the filing of these reports. In making these reports, the Corporation has relied on written representations of its directors and executive officers and copies of the reports that they have filed with the Commission. The Corporation believes that these filing requirements were satisfied in 1994.
ITEM 11.

ITEM 11. Executive Compensation
(a) and (b) Summary Compensation Table
The following Summary Compensation Table sets forth certain information concerning cash compensation paid to or contributed for the benefit of the five individuals named below for services rendered to the Corporation and its subsidiaries as executive officers during each of the three years in the period ended December 31, 1994.
SUMMARY COMPENSATION TABLE
Name and Principal Annual All Other Position (1) Year Compensation-Salary (2) Compensation(3)
R. W. Wiltshire, Jr. 1994 $139,312 $4,179 President and Chief 1993 118,512 3,555 Executive Officer(4) 1992 108,528 2,171
J. M. Wiltshire, Jr. 1994 132,134 3,964 Vice President, 1993 125,434 3,763 Secretary and 1992 121,201 2,424 Counsel
H. D. Garnett 1994 119,122 3,574 Vice President and 1993 112,422 3,373 Controller 1992 107,937 2,159
W. B. Wiltshire 1994 117,294 3,519 Vice President 1993 105,403 3,162 1992 99,986 2,000
G. T. Richardson 1994 117,074 3,512 Vice President 1993 105,174 -- 1992 98,991 1,980
(1) Offices shown are of both the Corporation and the Life Company. (2) The amounts shown include employee contributions to the Thrift Plan. (3) All of the amounts shown reflect matching contributions by the Corporation and the Life Company to the Thrift Plan. The Thrift Plan is a defined contribution plan available to substantially all salaried employees. Participants may make thrift contributions to the plan in any whole percentage of 2-14% of their compensation, and the Corporation and the Life Company will make a matching contribution to the plan in an amount equal to three-fourths of the first 4% of each eligible employee's compensation so contributed for the year. All matching amounts shown for each executive officer are fully vested. Benefits under the Thrift Plan are payable at death, retirement or other termination of employment (or at January of the calendar year of age 70 1/2, if earlier). (4) Effective April 7, 1992, R. W. Wiltshire, Jr. was elected Chief Executive Officer of the Corporation and the Life Company.
(c) Not applicable
(d) Not applicable
(e) Not applicable
(f) Pension and Postretirement Medical Benefits Plans
The Corporation's Retirement Plan, a defined benefit pension plan, covers substantially all employees of the Corporation and the Life Company with the requisite length of service, which was reduced from six months to two months of service commencing January 1, 1995. The Plan provides a retirement annuity, payable by the Life Company as the insurer under the Plan, to each employee who is credited with five years of service, who attains his normal retirement age (which is age 65 or, if the employee becomes a participant at or after age 60, his fifth anniversary of becoming a participant) while employed by the Corporation or the Life Company, or who is totally and permanently disabled while an employee. The retirement annuity is earned in the form of a single life annuity for the life of the employee, commencing at the employee's normal retirement age, and is equal to the sum of retirement annuity credits earned by the employee for each calendar year he is credited with a year of service. Retirement annuity benefits under the plan can be paid as early as age 55 if the employee retires with at least ten years of service (or at disability retirement, if earlier) and must be paid starting in January of the calendar year the employee reaches age 70 1/2, even though he has not then retired. The annuity is payable monthly and is subject to actuarial reduction in the event the employee commences to receive his retirement annuity prior to his normal retirement age (other than as a result of disability retirement) or receives his retirement annuity in a joint and survivor rather than a single life annuity form of payment. A survivor annuity benefit is provided to the employee's spouse in certain cases if the employee dies before his retirement annuity payments begin.
The annual annuity credit for years after 1988 is equal to 2% of the first $10,000 of the employee's compensation for the year, plus 2.5% of the employee's compensation for the year in excess of $10,000. Once an employee is credited with 35 years of service, whether before or after 1989, the annual annuity credit after 1988 becomes 2.5% of the employee's compensation for the year. Prior to 1989, several different benefit formulas were applied, and employees who were participants before 1989 will retain their annuity credits as determined through December 31, 1988 based on those earlier formulas. Covered compensation for purposes of the Plan is aggregate cash compensation up to $150,000 per year for years after 1993 ($200,000 per year for 1992 and 1993), as adjusted from time to time under the Internal Revenue Code of 1986, as amended, which in the case of each executive officer is identical to the amount shown as salary in the Summary Compensation Table appearing in Item 11(a) and (b). The estimated annual benefits payable under the Plan for each of the individuals listed in the Summary Compensation Table are as follows: R. W. Wiltshire, Jr. - $85,790, J. M. Wiltshire, Jr. - $44,552, , H. D. Garnett - $71,137, W. B. Wiltshire - $83,372, and G. T. Richardson - $92,032. The benefits as shown are estimated on the basis that the persons named will continue to receive, until the end of the calendar year in which they reach age 65 or, if already age 65, until the end of the current calendar year, salaries at the same rates in effect during 1994 and will then retire and elect a single life rather than a joint and survivor annuity form of payment.
Amounts payable under the Plan are not subject to deduction for social security benefits under the Federal Social Security Act.
In addition to the Corporation's defined benefit pension plan, the Corporation has a postretirement medical benefits plan consisting of defined benefit medical coverage for pre-1993 retirees and defined contribution medical coverage for post-1992 retirees who were active employees on December 31, 1992. The pre-1993 retiree program covers all employees who had retired under the Corporation's pension plan as of December 31, 1992. The post-1992 retiree program covers all full time active employees as of December 31, 1992 who retire under the Corporation's pension plan thereafter. Employees who joined the Corporation after December 31, 1992 are not eligible for participation in either program under the postretirement medical benefits plan.
The pre-1993 retiree program reimburses its participants for actual covered costs subject to specified deductibles and coinsurance. The pre- 1993 retiree program is contributory and participant contribution requirements may be increased from time to time and benefits may be modified or terminated by the Corporation. The post-1992 retiree program is noncontributory and reimburses its participants for the cost of health insurance and other health care coverage premiums up to a maximum benefit amount (stated in terms of health care spending credits) determined in accordance with the plan based on years of service as of December 31, 1992. The unused maximum benefit amount, initially determined as of December 31, 1992, is increased thereafter only for interest from January 1, 1993 until it is fully expended.
All current salaried executive officers of the Corporation, upon their retirement, will be covered under the post-1992 retiree program. The spending account credit balances determined as of December 31, 1994 (without interest to be credited thereafter) for each of them are as follows: R. W. Wiltshire, Jr. - $28,058, J. M. Wiltshire, Jr. - $30,796, H. D. Garnett - $26,005, W. B. Wiltshire - $28,743 and G. T. Richardson -$26,005.
The Corporation is self insured with respect to benefits under the postretirement medical benefits plan.
(g) Compensation of Directors
All directors of the Corporation (other than Messrs. Glenn, L. W. Richardson, R. W. Wiltshire, Hancock and Mrs. Collins) are salaried executive officers. Messrs. Glenn, L. W. Richardson and R. W. Wiltshire have retired as salaried executive officers of the Corporation and the Life Company. Upon his retirement on December 31, 1986 after more than 48 years of service, Mr. Glenn was asked to serve at the pleasure of the Board of Directors as a Consultant to the Corporation and its subsidiaries for which he receives $30,000 per year in addition to his normal retirement benefit of $26,495 under the Corporation's Retirement Plan. Under the terms of the contract, Mr. Glenn has agreed to perform such services of a consulting and advisory nature as may be requested of him from time to time by the Chairman of the Board of the Corporation. Messrs. Richardson and Wiltshire retired on December 31, 1987, and September 6, 1993, respectively, and in consideration of their past services to the Corporation and the Life Company over a continuous period of more than 42 years in the case of Mr. Richardson and 47 years in the case of Mr. Wiltshire, the Corporation agreed to pay Mr. Richardson $30,000 per year and Mr. Wiltshire $90,000 per year in addition to their respective pension benefits of $34,109 and $55,002 under the Retirement Plan. The Corporation's agreements with each of Messrs. Glenn, Richardson and Wiltshire provide that they will not compete with the Corporation or its subsidiaries, directly or indirectly, on a full time or a part time or on a consulting or advisory basis. Messrs. Glenn and Richardson also are participants in the pre-1993 retiree program under the Corporation's postretirement medical benefits plan. Mr. Wiltshire is a participant in the post-1992 retiree program under the plan and has a spending account credit balance as of December 31, 1994, after reimbursement to him of premiums paid subsequent to his retirement, of $42,591. (See "Pension and Postretirement Medical Benefits Plan" in Item 11(f)). Mr. Hancock is a partner in the law firm of Mays & Valentine. The amount of legal fees paid to that firm by the Corporation and its subsidiaries and affiliates in 1994, including amounts for legal services provided by Mr. Hancock, did not exceed 5% of the firm's gross revenues for its last fiscal year. No director of the Corporation receives any additional compensation in the form of directors' fees or otherwise for attendance at meetings of the Board or committees thereof, or other services performed solely in his or her capacity as a director.
(h) Employment Contracts and Termination of Employment and Change-in- Control Arrangements
(1) Not applicable
(2) Not applicable
(i) Not applicable
(j) Board of Director Interlocks and Insider Participation
The Corporation has no formal compensation committee, and all final decisions as to executive officer compensation are made by the entire Board of Directors. All members of the Board of Directors, except Mrs. Collins, are present or retired officers of the Corporation. Messrs. R. W. Wiltshire, Jr., J. M. Wiltshire, Jr., Garnett, W. B. Wiltshire, and G. T. Richardson are salaried executive officers of the Corporation. R. W. Wiltshire has retired as an employee of the Corporation and now serves as an unsalaried executive officer in the capacity of Chairman of the Board. Messrs. Glenn and L. W. Richardson are retired executive officers of the Corporation. Mr. Hancock is an unsalaried executive officer of the Corporation and a partner in the law firm of Mays & Valentine which is general counsel to the Corporation.
ITEM 12.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management
(a) and (b) As of March 10, 1995, 5,401,024 shares of Class A Common Stock of the Corporation, constituting 63.7% of the 8,476,576 shares then outstanding, were held by trustees under a voting trust agreement dated as of May 1, 1984, which, by virtue of a voting trust extension agreement dated as of May 1, 1987, continues in force until May 11, 1997 (1984 Voting Trust). The Voting Trustees, each of whom is a director of the Corporation and the Life Company are R. W. Wiltshire, L. W. Richardson, R. W. Wiltshire, Jr., G. T. Richardson, and Dianne N. Collins (as the current successor to M. D. Nunnally, Jr. one of the original Voting Trustees, who died several years ago) (together, the Trustees). Their mailing address is 3901 West Broad Street, Richmond, Virginia 23230. The Trustees are given exclusive voting power of the Class A Common Stock subject to the 1984 Voting Trust, but must vote or execute consents in accordance with the instructions of the holders of voting trust certificates with respect to any action submitted to a vote of the holders of Class A Common Stock as to which a majority of the Trustees then in office favor an affirmative vote, where such action, if approved by the holders of Class A Common Stock in accordance with and to the extent required by law and the Corporation's Articles of Incorporation, would result in: (a) the increase or decrease of the authorized number of shares of Class A Common Stock; (b) an exchange, reclassification, or cancellation of all or part of the shares of Class A Common Stock; (c) an exchange, or right of exchange, of all or any part of the shares of another class into the shares of Class A Common Stock; (d) any change that may be adverse to the designations, preferences, limitations, voting rights or relative to other rights of any nature of the shares of Class A Common Stock; (e) any change of the shares of Class A Common Stock into a different number of shares of the same class or into the same or a different number of shares, either with or without par value, of other classes of stock; (f) the creation of a new class of stock, or change of a class with subordinate and inferior rights into a class having rights and preferences prior and superior to shares of Class A Common Stock, or any increase of the rights and preferences of any class having rights and preferences prior or superior to shares of Class A Common Stock; (g) any limitation or denial of preemptive rights of shares of Class A Common Stock; (h) the sale, lease, exchange, mortgage, pledge or other disposition of all, or substantially all, the property and assets of the Corporation; (i) the merger or consolidation of the Corporation with or into any other corporation, or of any other corporation with or into the Corporation; or (j) the dissolution of the Corporation. If a majority of the Trustees shall oppose any such matter, the Trustees need not solicit, obtain or follow directions from the holders of the voting trust certificates, and such majority of Trustees opposing any such proposal are authorized and empowered to vote all the shares of Class A Common Stock held by the Trustees under the 1984 Voting Trust against such proposal. A majority vote of the Trustees controls actions to be taken by them; they may vote in person or by proxy to another Trustee with or without direction how to vote. They may vote for themselves as directors and officers of the Corporation and fix their compensation provided it be commensurate with the duties and responsibilities of the office or position held. They may name successor trustees in event of death, resignation, removal from the Commonwealth of Virginia or incapacity of any Trustee. They receive no compensation for their services as Trustees. In the event that by virtue of a stock dividend, stock split, reclassification of stock or subscription, the Trustees receive further Class A Common Stock, it is to be held by them subject to all of the provisions of the 1984 Voting Trust. In the event that as a result of any merger, consolidation, sale of assets or property, exchange or other cause, the shares of Class A Common Stock of the Corporation held by the Trustees should be converted into and become shares of another corporation, the 1984 Voting Trust shall be terminated automatically unless the amount of voting stock in such other corporation received as a result of the conversion would thereafter represent more than one-third of the issued and outstanding voting stock of such other corporation if it has no class of stock registered under the Securities Exchange Act of 1934, or more than one-twentieth of the issued and outstanding voting stock of such other corporation if it has a class of stock so registered, in either of which cases the 1984 Voting Trust shall continue in force according to its terms.
Class B Common Stock, which has no vote on most matters, is publicly traded in the over-the-counter market and is not subject to the 1984 Voting Trust.
Due to the substantial number of shares of Class A Common Stock held subject to the 1984 Voting Trust, the Trustees individually and collectively may be deemed to be "control persons" of the Corporation under rules and regulations of the Securities and Exchange Commission.
As of March 10, 1995, the Trustees under the 1984 Voting Trust beneficially owned, directly or indirectly, voting trust certificates evidencing an aggregate of 827,646 shares of Class A Common Stock subject thereto, as well as another 270,673 shares of Class A Common Stock that are not subject to the 1984 Voting Trust.
The following table shows as of March 10, 1995, the beneficial owner- ship of all Class A and Class B Common Stock by each director of the Corporation, and the beneficial ownership of the Corporation's Class A Common Stock by any other person or entity known to the Corporation to own more than 5% of the outstanding shares of such class. The Corporation has no executive officers who are not directors. The amounts shown for Class A Common Stock include beneficial ownership evidenced by voting trust certificates of the 1984 Voting Trust, but exclude Class A shares held by the Trustees thereunder.
Directors
Amount Title of Beneficially Percent of Name of Director Class Owned(1) Class(2)
Dianne N. Collins Class A 13,536(3)(4)(5) * Class B 7,264(4) * H. D. Garnett Class A - - Class B 2,600 (6) * C. M. Glenn, Jr. Class A 327,826 (5)(7)(8)(9) 3.87 Class B 80,711 (7)(8)(9) * W. G. Hancock Class A 89,560 (9)(10)(11) 1.06 Class B 4 * G. T. Richardson Class A 52,784 (3)(5) * Class B 10,274 * L. W. Richardson Class A 262,161 (3)(5)(9)(12) 3.09 Class B 89,179 (9)(12) * J. M. Wiltshire, Jr. Class A - - Class B 6,000 * R. W. Wiltshire Class A 741,492 (3)(5)(9)(13) 8.75 Class B 47,920 (13) * R. W. Wiltshire, Jr. Class A 28,346 (3)(5)(13) * Class B 41,443 (9)(13) * W. B. Wiltshire Class A 28,186 (5)(13) * Class B 30,550 (9)(13) *
5% Class A Stockholders (Other Than Directors and Trustees) Amount Name and Address of Beneficially Percent of 5% Class A Stockholder Owned (1) Class
Dixie Company 2,561,336 (5)(14) 30.22 Richmond, Virginia
Doris G. Hancock 449,574 (8)(15) 5.30 Richmond, Virginia
Estate of Mary Morton Parsons 1,174,427 (5)(16) 13.85 Richmond, Virginia
George L. Richardson 599,680 (5) 7.07 Richmond, Virginia
(1) Beneficial ownership has been determined in accordance with Rule 13d- 3 under the Securities Exchange Act of 1934. (2) Where an asterisk is shown, the percentage is less than 1%. (3) 5,401,024 shares of Class A Common Stock constituting 63.7% of the 8,476,576 shares outstanding are held by R. W. Wiltshire, L. W. Richardson, R. W. Wiltshire, Jr., G. T. Richardson and Dianne N. Collins, as Trustees under the 1984 Voting Trust. (4) All of the voting trust certificates for Class A shares and the Class B shares are held of record by Dixie Company and may be acquired by Mrs. Collins pursuant to her power to revoke an inter vivos trust. Such voting trust certificates are also included in the table for Dixie Company.
(5) Some portion or all of the Class A shares shown for each of the indicated directors or stockholders are subject to the 1984 Voting Trust, and their beneficial ownership as to those shares is evidenced by voting trust certificates that have been issued to them thereunder. The number of Class A shares deposited in the 1984 Voting Trust by each of them is as follows: Dianne N. Collins - 13,536; C. M. Glenn, Jr. - 150,164; G. T. Richardson - 22,510; L. W. Richardson - 250,708; R. W. Wiltshire - 539,016; R. W. Wiltshire, Jr. - 1,876; W. B. Wiltshire - 1,728; Dixie Company - 2,423,800; Estate of Mary Morton Parsons - 1,174,427; and George L. Richardson - 404,600. (6) All of the Class B shares shown for Mr. Garnett are owned jointly with his wife. (7) Includes 165,520 shares of Class A (of which 90,000 shares are evidenced by voting trust certificates of the 1984 Voting Trust) and 23,280 shares of Class B Common Stock held in trust by Crestar Bank as trustee for the benefit of Mr. Glenn during his lifetime, with remainder to his issue. (8) Includes 80,822 shares of Class A and, in the case of Mr. Glenn, 3,644 shares of Class B Common Stock, held by Mr. Glenn and his sister, Doris G. Hancock, and another sister, as trustees under the will of Hazel C. Glenn for the benefit of his daughter. (9) Includes an aggregate of 7,560 shares of Class A (of which 2,696 shares are evidenced by voting trust certificates of the 1984 Voting Trust) and 12,750 shares of Class B Common Stock held by directors as trustees or custodians for the benefit of children (that are not described in other footnotes to this table), or by their wives, and with respect to which beneficial ownership is or will be disclaimed by individual directors in ownership reports filed with the Securities and Exchange Commission. (10) The ownership shown for Mr. Hancock excludes 188,800 shares of Class A Common Stock held in trust by Crestar Bank for the benefit of his mother, Doris G. Hancock, with remainder to Mrs. Hancock's issue, in which Mr. Hancock has a vested one-third beneficial interest subject to partial divestment upon any further children of Mrs. Hancock. (11) Includes 2,400 shares of Class A Common Stock held by Mr. Hancock and his brother and sister as trustees under inter vivos trusts created by their mother for the benefit of her six grandchildren, three of whom are children of Mr. Hancock. (12) Includes 25,538 shares of Class A Common Stock evidenced by voting trust certificates of the 1984 Voting Trust and 36,912 shares of Class B Common Stock held by Mr. Richardson, as trustee with sole voting and shared investment power, for the benefit of a member of his immediate family. (13) 141,804 shares of Class A Common Stock, voting trust certificates for 94,976 shares of Class A Common Stock subject to the 1984 Voting Trust and 660 shares of Class B Common Stock are held by the Estate of Essie Lee Wiltshire for the life of R. W. Wiltshire with a vested remainder interest in the children of R. W. Wiltshire. R. W. Wiltshire is the sole executor of the Estate of Essie Lee Wiltshire. During the life of R. W. Wiltshire the income from the foregoing shares is paid to the children of R. W. Wiltshire. In addition, R. W. Wiltshire has a life estate in voting trust certificates evidencing 403,264 shares of Class A Common Stock subject to the 1984 Voting Trust and 47,260 shares of Class B Common Stock, with remainder to the children of R. W. Wiltshire. R. W. Wiltshire, Jr. and W. B. Wiltshire have vested one-fourth beneficial interests in all the foregoing shares, subject to partial divestment upon any further children of R. W. Wiltshire. The ownership shown includes such shares for R. W. Wiltshire and excludes all such shares for R. W. Wiltshire, Jr. and W. B. Wiltshire. Both R. W. Wiltshire, Jr. and W. B. Wiltshire also have the same vested one-fourth remainder interests subject to partial divestment in another 140,836 shares of Class B Common Stock in which various children and grandchildren of R. W. Wiltshire residing in other households have an interest for his life. The ownership shown for R. W. Wiltshire, R. W. Wiltshire, Jr. and W. B. Wiltshire does not reflect any of such shares, except in the case of R. W. Wiltshire, Jr. for 26,445 shares held by him as custodian for his minor children and another 8,764 shares held for his own benefit and in the case of W. B. Wiltshire for 17,630 shares held by him as custodian for his minor children and another 8,764 shares held for his own benefit.
(14) Dixie Company is the nominee of Jefferson National Bank which holds 137,536 Class A shares and voting trust certificates for another 2,423,800 Class A shares in a number of fiduciary accounts that it administers (including voting trust certificates for 13,536 Class A shares previously reported in the table for Mrs. Collins). (15) Includes 188,800 shares of Class A Common Stock held in trust by Crestar Bank as trustee for the benefit of Mrs. Hancock during her lifetime with remainder to her issue. Also includes 18,205 Class A shares held by Mrs. Hancock's husband. (16) Clinton Webb and NationsBank of Virginia, N.A. are the co-executors of the Estate of Mary Morton Parsons.
As of March 10, 1995, executive officers and directors of the Corporation as a group beneficially owned 1,543,891 shares or 18.2% of the Class A (including beneficial ownership evidenced by voting trust certificates of, but exclusive of shares held by the Trustees under, the 1984 Voting Trust) and 315,945 shares or 3.5% of the Class B Common Stock of the Corporation, respectively.
(c) The Corporation has no knowledge of any contractual arrangement which may at a subsequent date result in a change of control of the Corporation, except that the 1984 Voting Trust is scheduled to expire on May 11, 1997. Upon its expiration, the shares of Class A Common Stock of the Corporation now held by the Trustees under the 1984 Voting Trust will be held by persons presently holding voting trust certificates representing those shares.
ITEM 13.

ITEM 13. Certain Relationships and Related Transactions
(a) Not applicable.
(b) W. G. Hancock is a partner in the law firm of Mays & Valentine which provided legal services as general counsel to the Corporation and its subsidiaries and affiliates during 1994, and is expected to serve in the same capacity in 1995. The amount of legal fees paid to that firm by the Corporation and its subsidiaries and affiliates for 1994 did not exceed 5% of the firm's gross revenues for its last full fiscal year.
(c) Not applicable.
(d) Not applicable.
Part IV
ITEM 14.

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. and 2. Financial Statements and Financial Statement Schedules
The financial statements and financial statement schedules listed in the accompanying Index to Financial Statements and Financial Statement Schedules on page 23 are filed as part of this annual report.
3. Exhibits
The exhibits listed in the accompanying Index to Exhibits are filed as part of this annual report.
(b) Reports on Form 8-K
None
HOME BENEFICIAL CORPORATION and Financial Statement Schedules (Item 14(a))
All other schedules are omitted since the required information is not present, or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and notes thereto.
The consolidated financial statements and supplementary information listed in the above index, which are included in the Annual Report to Stockholders for Home Beneficial Corporation for the year ended December 31, 1994, are incorporated herein by reference.
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report(Form 10-K) of Home Beneficial Corporation of our report dated February 10, 1995, included in the 1994 Annual Report to Stockholders of Home Beneficial Corporation.
Our audits also included the financial statement schedules of Home Beneficial Corporation listed in Item 14(a). These schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
ERNST & YOUNG LLP
Richmond, Virginia February 10, 1995
(*) See Notes 6 and 7 to Consolidated Financial Statements
(*) Short-term investments, which consist of investments with maturities of 30 days or less, are considered cash equivalents
SIGNATURES
Pursuant to the requirements of Section 12 or 15(d) of the Securities Exchange Act of 1934 the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
HOME BENEFICIAL CORPORATION Registrant
By: H. D. Garnett Vice President and Controller, 3/21/95
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
R. W. Wiltshire Chairman of the Board and Director, 3/21/95
C. M. Glenn, Jr. Retired Vice President, Treasurer and Director, 3/21/95
L. W. Richardson Retired Vice President and Director, 3/21/95
R. W. Wiltshire, Jr. President, Chief Executive Officer and Director, 3/21/95
J. M. Wiltshire, Jr. Vice President, Counsel, Secretary and Director, 3/21/95
W. B. Wiltshire Vice President and Director, 3/21/95
H. D. Garnett Vice President, Controller and Director, 3/21/95
G. T. Richardson Vice President and Director, 3/21/95
W. G. Hancock Counsel and Director, 3/21/95
Dianne N. Collins Director, 3/21/95


Item 1.Business
Salomon Inc ("the Company") was incorporated in 1960 under the laws of the State of Delaware. At December 31, 1994, its full time equivalent number of employees was 9,077. Information concerning the business of Salomon Inc under the following captions in Exhibit 13, "Salomon Inc 1994 Annual Report Financial Information," is deemed part of this Annual Report on Form 10-K and is hereby incorporated herein by reference:
Salomon Inc - Overview of 1994 (on pages 14 through 19)
Salomon Brothers - Description of Business (on pages 21 through 22)
Phibro Division - Description of Business (on page 27)
Phibro USA - Description of Business (on pages 28 through 30)
Note 1 Revenues by Business Unit (on pages 67 through 70)
Note 2 Industry Segment and Geographic Data (on pages 71 through 72)
Note 10 Net Capital (on page 78)
Item 2.

Item 2.Properties
Since 1991, the Company's headquarters has been Seven World Trade Center, located in lower Manhattan, New York. In 1993, a subsidiary of Salomon Brothers purchased two long-term leasehold interests in property located in London that was previously leased on a short-term basis. Salomon Brothers' 132,000-square-foot operational support facility in Tampa, Florida was completed and became fully operational in 1992. The Tampa facility provides clearing and operational support services primarily for Salomon Brothers' New York-based sales, trading and investment banking activities.
Further information concerning the Company's properties under the following captions in Exhibit 13, "Salomon Inc 1994 Annual Report Financial Information," is deemed part of this Annual Report on Form 10-K and is hereby incorporated herein by reference:
Phibro Division - Description of Business (on page 27)
Phibro USA - Description of Business (on pages 28 through 30)
Note 4 Property, Plant and Equipment (on page 73)
Item 3.

Item 3. Legal Proceedings
On August 9, 1991, the Company announced that it had uncovered irregularities by certain employees of its indirect wholly owned subsidiary
Salomon Brothers Inc ("SBI") in connection with certain auctions of U.S. Treasury securities. During the 1991 third quarter the Company recorded a pretax charge of $200 million to establish a reserve for estimated monetary damages, settlement costs, fines, penalties, legal expenses and other related costs expected to be incurred in connection with the private actions and investigations by certain U.S. governmental authorities, state agencies and self-regulatory authorities arising out of this matter. In a settlement with U.S. governmental authorities announced on May 20, 1992, the Company and SBI consented to various sanctions including the payment of $190 million, the establishment of an additional $100 million private civil claims fund, the issuance of an injunction and the adoption of an administrative order, and in connection with this matter SBI was also temporarily suspended from dealing directly with the Federal Reserve Bank and from executing customer transactions in Treasury auctions. As a result of the settlement, the Company recorded an additional pretax charge of $185 million in the 1992 second quarter. The settlement did not resolve the Antitrust Division of the U.S. Department of Justice's charges concerning possible collusion by primary dealers and others in bidding at U.S. Treasury auctions. In January and February of 1993, the Company and SBI made payments of approximately $4 million to settle claims with 42 states and the District of Columbia arising out of the U.S. Treasury auction and related matters.
Over 50 private actions were commenced against the Company, SBI or certain present and former directors, officers and employees of the Company or SBI with respect to the U.S. Treasury auction and related matters. These actions can be grouped into three categories: securities litigation (brought on behalf of purchasers of the Company's securities), Treasury litigation (brought on behalf of purchasers of U.S. Treasury securities) and derivative litigation.
Forty-two of the actions were class and derivative actions which were consolidated for pre-trial or discovery purposes into three actions in the United States District Court for the Southern District of New York (the "Southern District of New York") before The Honorable Robert P. Patterson, Jr. Amended consolidated complaints were filed in each of the three consolidated groups of class actions.
The securities litigation and Treasury litigation (with the exception of the Three Crown action discussed below) are the subject of settlement agreements. In June 1994, the court approved settlement of the consolidated securities action and the Company has paid $54.5 million to the plaintiff class out of the $100 million private civil claims fund described above. The court also awarded plaintiffs' attorneys' fees and expenses in the amount of $9.6 million, which has been paid by the Company. In July 1994, the court approved settlement of the consolidated Treasury litigation and the Company and SBI have paid $66 million to the plaintiff class. Plaintiffs' attorneys' fees and expenses related to claims against the Company awarded by the court were included in this amount. The Company and SBI expect that almost two-thirds of this payment will be reimbursed to the Company out of the $100 million private civil claims fund. The settlements described above have exhausted all but a relatively small portion of the fund.
Plaintiffs in Three Crown Limited Partnership, et al. v. Salomon Brothers Inc, et al., 92 Civ. 3142, opted out of the Treasury litigation settlement and have continued actively to pursue claims against SBI and other defendants. This action, which is pending in the Southern District of New York, alleges, among other things, that SBI and one of its former employees violated provisions of the Federal securities laws, the Racketeer Influenced and Corrupt Organization Act ("RICO") and the antitrust laws, in some instances in collusion with others, by repeatedly purchasing quantities of U.S. Treasury securities in excess of Federal regulatory limits and manipulating the market in U.S. Treasury securities. The action seeks compensatory damages of approximately $25 million and trebling of that amount pursuant to the antitrust and RICO laws, as well as costs, interest and other relief.
In re Salomon Inc Shareholders' Derivative Litigation, 91 Civ. 5500 (S.D.N.Y., consolidated August 30, 1991), consolidated for all pre-trial purposes 16 actions which asserted derivative claims purportedly on behalf of the Company against members of the Company's Board of Directors and others. The actions claim, among other things, that SBI employees violated U.S. Treasury and Federal Reserve Board regulations governing the purchase of U.S. Treasury securities at auctions by repeatedly purchasing quantities of U.S. Treasury securities in excess of Federal regulatory limits and submitting bids for those securities in the names of persons who had not authorized such bids. The claims, as originally filed, further asserted that the director defendants breached their fiduciary obligations to the Company by engaging in or recklessly disregarding these allegedly illegal practices, thereby exposing the Company to potential liabilities and adverse business consequences. The actions seek to require the individual defendants to recompense the Company for all damages caused by them, to return compensation received by them and to pay punitive damages, as well as costs, interest and other relief. The Company moved to dismiss the complaint on the grounds that plaintiffs had failed to make a demand on the Company's Board of Directors. In January 1994, the derivative plaintiffs amended their complaint, among other things, to dismiss without prejudice their complaint against all defendants other than those who ceased to be officers or directors of the Company following the announcement of irregularities in August 1991.
On September 28, 1994, the United States District Court of the Southern District of New York granted the motion of the individual defendants to stay trial of the action and compel arbitration, subject to determination by the New York Stock Exchange as to whether the claims are arbitrable and whether the New York Stock Exchange would exercise jurisdiction over the claims. The New York Stock Exchange declined to exercise jurisdiction on December 22, 1994. Individual defendants have appealed that decision to the New York Stock Exchange Board. The determination of the motion by the Board is currently pending.
A New York Stock Exchange arbitration panel on May 13, 1994 denied in their entirety the employment-related compensation claims for John Gutfreund who sought to recover $55.3 million. On August 12, 1994, Mr. Gutfreund filed a petition in the Supreme Court of New York for New York County seeking to vacate the arbitration panel's decision and require a new arbitration. On December 31, 1994, the Court dismissed Mr. Gutfreund's petition and confirmed the arbitration panel's decision denying Mr. Gutfreund's claims. Mr. Gutfreund has appealed the decision.
As part of the May 1992 settlement of the U.S. Treasury auction matters with the U.S. governmental authorities, the Company and SBI consented to an injunction against violating
certain record keeping and anti-fraud provisions of the Federal securities laws based on allegations that transactions in certain securities during 1984 and 1986 were pre-arranged to accelerate the recognition of losses for Federal income tax purposes. In connection with audits of the Company's Federal income tax returns, the Internal Revenue Service indicated it was contemplating claims for civil penalties in connection with such transactions during 1984 and 1986. The transactions as to which penalties were contemplated were apparently effected solely by employees who have left the Company and were in violation of Company policy. The principal impact of such transactions was deferral of taxes. Promptly after it discovered the transactions, the Company informed the Internal Revenue Service and paid the taxes due and interest. The Company and the Internal Revenue Service have entered into a settlement agreement that resolves the scope of claims for civil penalties, which civil penalties shall be payable by the Company to the Internal Revenue Service in an amount to be determined in accordance with the terms of the settlement agreement.
SBI has been named as a defendant in a purported class action brought in May 1988 in the Delaware Chancery Court for New Castle County (Shields and Van De Walle v. L.F. Rothchild, Unterberg, Towbin Holdings, Inc., et al.). The defendants include L.F. Rothchild, Unterberg, Towbin Holdings, Inc. ("Holdings"), certain of its officers and directors, certain selling shareholders and controlling persons and the lead underwriters for Holdings' March 1986 public offering of 7,676,325 shares of Common Stock at $20.50 per share. Plaintiffs purport to represent a class of all persons who purchased stock pursuant to that offer. Together with Shearson Lehman Brothers Incorporated and L.F. Rothchild Incorporated ("L.F. Rothchild"), SBI acted as one of the lead underwriters with a participation of 1,074,441 shares. In general, the complaint alleges that the prospectus prepared in connection with the offering contained untrue statements of material fact and omitted to state material facts in violation of the Federal securities laws. The complaint seeks, among other things, compensation and punitive damages in unspecified amounts as well as the costs of the action. Both Holdings and L.F. Rothchild have been reorganized in bankruptcy proceedings and SBI no longer has any outstanding claims for indemnity or contribution against them. In February 1990, the court determined that the action should be stayed as to all defendants pending resolution of a class proof of claim filed by the Shields and Van De Walle plaintiffs in the Holdings bankruptcy proceeding that alleges the same claims contained in the Shields and Van De Walle complaint. That proof of claim was withdrawn, and with the completion of the reorganization of Holdings, the stay has been lifted and pre-trial proceedings have resumed.
In September 1992, Harris Trust and Savings Bank (as trustee for Ameritech Pension Trust ("APT")), Ameritech Corporation, and an officer of Ameritech filed suit against SBI and Salomon Brothers Realty Corporation ("SBRC") in the United States District Court for the Northern District of
Illinois. The second amended complaint alleges that three purchases by APT from Salomon of participation interests in net cash flow or resale proceeds of three portfolios of motels owned by Motels of American, Inc. ("MOA"), as well as a fourth purchase by APT of a similar participation interest with respect to a portfolio of motels owned by Best Inns, Inc. ("Best"), violated the Employee Retirement Income Security Act ("ERISA"), and that the purchase of the participation interests for the third MOA portfolio and for the Best portfolio violated RICO and state law. SBI had acquired the participation interests in transactions in which it purchased as principal mortgage notes issued by MOA and Best to finance purchases of motel portfolios; 95% of three such interests and 100% of one such interest were sold to APT for purchase prices aggregating approximately $20.9 million. Plaintiffs' second amended complaint seeks (i) a judgment on the ERISA claims in the amount
of the purchase prices of the four participation interests (approximately $20.9 million), for rescission and for disgorgement of profits, as well as other relief, and (ii) a judgment on the claims brought under RICO and state law in the amount of $12.3 million, with damages trebled to $37 million on the RICO claims and punitive damages in excess of $37 million on certain of the state law claims as well as other relief. SBI and SBRC answered the second amended complaint in part, moved to dismiss in part and asserted counterclaims against plaintiff Ameritech Corp. On August 16, 1993 the court (i) dismissed the RICO claims as well as plaintiffs' claims for breach of contract and unjust enrichment; (ii) denied SBI's motion to dismiss one of the ERISA claims (which alleges that SBI participated in a fiduciary's breach); and (iii) denied Ameritech's motion to dismiss SBI's counterclaims. Discovery with respect to the remaining claims is ongoing. Each of the Department of Labor and the Internal Revenue Service had advised SBI that it was reviewing the transactions in which APT acquired such participation interests. The Department of Labor, however, has advised Salomon that its investigation has been concluded. With respect to the Internal Revenue Service investigation, SBI and Salomon Brothers Realty Corp. have consented to extensions of time for the assessment of excise taxes which may be claimed to be due with respect to the transactions for the year 1987.
Golder, Thoma, Cressey Fund III Limited Partnership, et al. v. Salomon Brothers Inc., is a lawsuit brought by Golder, Thoma, Cressey Fund III Limited Partnership and three individuals purporting to represent eleven members of senior management of Health Care and Retirement Corporation of America ("HCRA"), in the Circuit Court of Cook County, Illinois on July 10, 1992 against SBI in connection with SBI's performance in providing financial advisory services for the proposed acquisition by the plaintiffs of HCRA in 1991. An amended complaint was filed on November 14, 1994 that added Salomon Brothers Realty Corp. as a defendant and certain lower-level members of management of HRCA as plaintiffs. The lawsuit asserts claims for negligence, breach of fiduciary duty, negligent misrepresentation and breach of contract. Plaintiffs seek to recover damages purported to exceed $190 million due to their alleged inability to complete the acquisition at an advantageous price, $6 million of alleged fees and expenses, punitive damages and attorneys' fees, as well as costs and other relief. Discovery is ongoing in this case.
Between May 1994 and the present, SBI, along with a number of other broker-dealers, was named as a defendant in approximately 25 federal court lawsuits and one state court lawsuit, principally alleging that companies that make markets in securities traded on Nasdaq violated the federal antitrust laws by conspiring to maintain a minimum spread of $.25 between the price bid and the price asked for certain securities. The federal lawsuits were consolidated for pretrial purposes in the Southern District of New York in the fall of 1994 under the caption In re Nasdaq Market-Makers Antitrust Litigation, United States District Court, Southern District of New York No. 94-CIV-3996 (RWS); M.D.L. No. 1023. The state court suit, Lawrence A. Abel v. Merrill Lynch & Co., Inc. et al., Superior Court of San Diego No. 677313, has been stayed.
In the federal suits, the plaintiffs purport to represent the class of persons who bought what they currently estimate to be approximately 1650 securities on Nasdaq between May 1, 1989 and May 27, 1994. They seek unspecified monetary damages, which would be trebled under the antitrust laws. The plaintiffs also seek injunctive relief, as well as attorneys' fees and the costs of the action. (The state case, brought under California law, seeks similar relief.) Plaintiffs filed a consolidated amended complaint on December 16, 1994. Defendants filed a motion to dismiss that complaint on February 2, 1995. A hearing on the motion is scheduled
for April 26, 1995. By order of the court, discovery, other than third party discovery, is stayed pending that hearing.
The Antitrust Division of the Department of Justice is conducting an industry-wide investigation into the Nasdaq market. It has issued civil investigative demands to Salomon seeking interrogatory responses and the production of documents relating to Salomon's role as a market maker in Nasdaq stocks. The Securities and Exchange Commission is also conducting an industry-wide investigation of various Nasdaq market practices. SBI has received various subpoenas for documents relating to the Nasdaq market as part of the Securities and Exchange Commission investigation.
During 1994, a number of customers of SBI's Private Investment Department in Hong Kong asserted claims against SBI arising primarily from alleged inappropriate sales practices with respect to transactions involving principally collateralized mortgage obligations. Certain of these customers have filed for arbitrations of these claims with the National Association of Securities Dealers, Inc. and the American Arbitration Association. Salomon has resolved almost all of these asserted claims, the cost of which was reflected in 1994 results. Salomon announced the closing of the Private Investment Department in early 1995.
Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), under certain circumstances, a potentially responsible party ("PRP"), may be held jointly and severally liable, without regard to fault, for response costs at a CERCLA site. A PRP's ultimate cost at a site generally depends on its involvement with the site and the nature and extent of contamination, the remedy selected, the role of other PRPs in creating the alleged contamination and the availability of contribution from
those PRPs, as well as any insurance or indemnification agreements which may apply. In most cases, both the resolution of the complex issues involved and any necessary remediation expenditures occur over a number of years.
In 1988, a subsidiary of Salomon Inc, The S.W. Shattuck Chemical Company, Inc. ("Shattuck"), along with over 350 industrial, municipal and other entities, was named by the federal Environmental Protection Agency ("EPA") as a PRP subject to liability under CERCLA at a site, Section 6 of the Lowry Landfill in Arapaho County, Colorado ("Lowry"), owned by the city and county of Denver ("Denver"). Shattuck was named a PRP based on disposal of its wastes at Lowry. Along with several other waste generator PRPs, Shattuck entered into two Administrative Consent Orders with the EPA pursuant to which certain site investigations and studies were conducted. In March 1994, EPA selected a remedy for Lowry, estimated to cost approximately $94 million. In December 1991, Denver filed suit under CERCLA and state common law in the United States District Court for the District of Colorado against Salomon Inc, Shattuck and 38 other PRPs seeking a declaration of their liability for, and recovery of, response costs expended and to be incurred at Lowry. In February 1992, Waste Management of Colorado, Inc. and Chemical Waste Management Inc., both PRPs at Lowry, commenced a similar action in the same court against Salomon Inc and Shattuck. In May 1993, the Company and Shattuck settled both actions with the plaintiffs. Under the settlement and based on current EPA estimates, the Company's ultimate share of remediation costs is not expected to exceed $13 million of which approximately 60% has been paid into a trust fund.
In August 1992, the EPA issued a Unilateral Administrative Order ("the Order") for remedial design/remedial action to be performed by Shattuck under CERCLA at a site
(Bannock Street), which includes property owned by, and a metal processing plant previously operated by, Shattuck in Denver, Colorado. The Order provides that, in the course of performing the remedial design/remedial action, Shattuck shall demonstrate financial assurance in an amount not less that $26.6 million. Effective August 31, 1992, Shattuck served notice to EPA of its intent to comply with the Order. Shattuck has performed significant remediation activities at the site in accordance with the Order. In May 1994, Denver issued a Cease and Desist Order ("CD Order") to Shattuck to stop work under the Order. In August 1994, EPA filed suit in the Federal District Court in Colorado seeking to set aside the CD Order. Pending resolution of this suit, Shattuck is complying with the CD Order. EPA has also demanded payment by Shattuck of past response costs purportedly relating to the site alleged to be approximately $3 million. The extent of Shattuck's liability for these costs cannot be determined at this time, because Shattuck is actively contesting the factual and legal bases for EPA's claim.
In May 1993, the National Zinc site in Bartlesville, Oklahoma was proposed for listing as a superfund site on EPA's National Priorities List under CERCLA. Final listing remains subject to EPA's determination. In May 1993, both Salomon Inc and a current subsidiary received notices from EPA of designation as PRPs with respect to National Zinc. The National Zinc site was defined by EPA to
include a smelter facility which had been owned by a former subsidiary of the Company and an eight square mile area surrounding such facility. The Company and its current subsidiary have formally opposed the PRP designations. In October 1993, the Company received notice from EPA of a planned removal response by EPA at the National Zinc site estimated by EPA to cost approximately $15.2 million. The Company and two other parties were designated by EPA as PRPs with respect to this removal action. In November 1993, EPA notified the Company and the same two other PRPs of its intent to conduct a remedial investigation, feasibility study and remedial design ("RI/FS/RD") for the site on a schedule which would result in selecting a remedy by December 1994, and offered the PRPs the opportunity to do this work. EPA also stated its willingness to consider a State Delegation Pilot Project whereunder PRPs, including the Company, could conduct the RI/FS/RD pursuant to an Administrative Order of Consent with the State of Oklahoma, with limited oversight by EPA. In February 1994, EPA issued to the Company and two other PRPs a Unilateral Administrative Order ("UAO") with respect to the removal action described above. The Company and one other PRP served notice to EPA of their intention to comply with the UAO. In April 1994, the Company, one other PRP and the City of Bartlesville entered into a Consent Agreement and Final Order ("CAFO") with the Oklahoma Department of Environmental Quality ("ODEQ") to conduct the RI/FS/RD. The work required under the UAO and the CAFO has been timely completed to date. The Company estimates that its cost to perform the removal action pursuant to the UAO and to participate in performing the RI/FS/RD will be approximately $7.5 million. In December 1994, ODEQ issued a Record of Decision selecting a remedy for Operable Unit 1, relating to protection of human health, covering the area at the National Zinc site surrounding the smelter facility. The selected remedy is estimated to cost approximately $24.3 million. Under the terms of the CAFO, the Company and the other PRPs have agreed to negotiate with ODEQ in good faith regarding what role, if any, they will have in the implementation of the selected remedy. While the Company and the other PRPs have advised ODEQ that they are preparing to initiate such negotiations, the Company's future costs, if any, related to implementation of the selected remedy at the site cannot be determined at this time.
In February 1994, Horseheads Industries, Inc. D/B/A Zinc Corporation of America ("ZCA"), the current owner of the smelter facility at the National Zinc site, filed suit in the United States District Court for the Northern District of Oklahoma against the Company, St. Joe Minerals Company ("St. Joe"), Fluor Corporation ("Fluor") and Cyprus Amax Minerals Company ("Cyprus") alleging that the defendants are liable to it for response costs incurred in connection with the smelter facility under CERCLA because of the release of hazardous substances during periods of ownership or operation by them or their affiliates or predecessors in interest. In August 1994, a settlement agreement was entered into between ZCA, Fluor/St. Joe and the Company (but not Cyprus), providing for an allocation as between the settling parties as to both past and future response costs. With respect to future remediation (the determination and implementation of which is expected to take several years) and the costs thereof, the settlement agreement established a management committee comprised of representatives of the settling parties to oversee study and clean-up of the facility and the costs associated therewith. Pursuant to the settlement, the Company and Fluor have taken over ZCA's role in the litigation including defense
of ZCA against a pending counterclaim of Cyprus, and pursuit of claims against Cyprus. The Company's future costs related to the remediation of the smelter facility cannot be determined at this time, because the timing, nature and extent of any such remediation are still under study.
In March 1990, Salomon Inc and a subsidiary were notified by the Tennessee Department of Health and Environment ("TDHE") that they were responsible for remedial costs under the Tennessee Hazardous Waste Management Act, as prior owners and operators, at Roane Alloys, a ferro-alloy plant in Rockwood, Tennessee. In 1992, Salomon Inc's subsidiary, together with another prior owner and the current owner of the site, received a determination from the TDHE selecting a site remediation plan under which management believes that Salomon Inc's and the subsidiary's costs will total approximately $1 million. Remediation activities have been substantially completed at the site.
In addition to the matters discussed above, liability under CERCLA is currently asserted against Salomon Inc and/or its subsidiaries by EPA relating to the following sites: Erda, Utah (Micronutrients International) and Granite City, Illinois (NL/Taracorp). Additionally, a subsidiary has been named as a third-party defendant in a suit filed by the EPA in the United States District Court for the Western District of Pennsylvania to recover response costs allegedly expended at a CERCLA site in Pulaski, Pennsylvania (Metcoa). In each case, Salomon Inc, or the subsidiary, has been identified as a PRP based upon the alleged shipment of relatively small volumes of material to the site, and management believes that Salomon Inc's, or the subsidiary's share of remediation costs will be immaterial.
In July 1994, a lawsuit was filed in the Federal Court in Texas against Phibro Energy USA, Inc., ("Phibro USA") a subsidiary of the Company, by the Friends of the Earth, Inc. The action is a citizen's suit brought under Section 505 of the Federal Water Pollution Control Act alleging violations by Phibro USA of the monitoring, record keeping and discharge limitations of its Houston refinery wastewater discharge permit during the period from September 1989 to the date of the suit. Subsequent to the filing of this lawsuit, the EPA filed an Administrative Complaint against Phibro USA, alleging substantially the same violations under the Clean Water Act and implementing regulations. Phibro USA has settled the EPA's claim. The extent of Phibro USA's liability with respect to the claim alleged in the lawsuit cannot be determined at this time.
In June 1994, the Company's subsidiary, Philipp Brothers, Inc., received from the Attorney General of Texas a Notice of Potential Liability, under the Texas Solid Waste Disposal Act and CERCLA, with respect to the Industrial Road/Industrial Metals Site (the "Site") in Corpus Christi, Texas. The State of Texas (the "State") has estimated that complete remediation of the Site and post-closure care will cost approximately $7.2 million. The State has claimed that Philipp Brothers, Inc.'s share of such cost is approximately $487,000. Philipp Brothers, Inc. has advised the State that it has been incorrectly identified as a PRP at the Site. The extent of Philipp Brothers, Inc.'s liability with respect to the State's claim cannot be determined at this time.
In addition, other legal proceedings are pending against or involve the Company and its subsidiaries. Based on information currently available and established reserves, the Company believes the ultimate resolution of pending legal proceedings will not result in any material adverse impact on the Company's consolidated financial condition; however, such resolution could have a material adverse impact on operating results in future periods depending in part on the results for such periods.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of 1994.
Executive Officers of the Registrant
Name and Age Office ------------ ------ Jerome H. Bailey (42) Chief Financial Officer since June 1993; previously employed at Morgan Stanley in various executive capacities for more than five years
Robert E. Denham (49)* Chairman and Chief Executive Officer since June 1992; previously General Counsel from September 1991; previously a partner in the law firm of Munger, Tolles & Olson, Los Angeles, California, for more than four years
Gedale B. Horowitz (62)* Executive Vice President since 1981
John G. Macfarlane (40) Treasurer since 1989; Treasurer of Salomon Brothers Inc since 1989; previously employed by Salomon Brothers Inc in various executive capacities from 1979
Kenneth K. Marshall (52) Acting Controller since March 1, 1995; employed by Salomon Brothers Inc since October 1993; previously employed by Coopers & Lybrand in various executive capacities for more than five years
Deryck C. Maughan (47)* Executive Vice President since May 1993; Chairman and Chief Executive Officer of Salomon Brothers Inc since May 1992; previously Chief Operating Officer of Salomon Brothers Inc from August 1991; Vice Chairman of Salomon Brothers Inc from January 1991 to August 1991; Chairman of Salomon Brothers Asia Limited from 1986 to 1991
Robert H. Mundheim (62) Executive Vice President and General Counsel since December 1993; General Counsel since September 1992; previously co-chairman of the law firm Fried, Frank, Harris, Shriver and Jacobson, New York, from March
1990 after having served as Dean of the University of Pennsylvania Law School for more than seven years
* Also a Director of Salomon Inc
Officers of the Registrant are elected annually at the May meeting of the Company's Board of Directors that follows the Annual Meeting of Stockholders.
PART II
Item 5.

Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
Information concerning the market for the Registrant's common equity and related stockholder matters in Exhibit 13, "Salomon Inc 1994 Annual Report Financial Information," under the caption "Common Stock Data" on page 95, is deemed part of this Annual Report on Form 10-K and is hereby incorporated herein by reference.
Item 6.

Item 6. Selected Financial Data
Selected financial data in Exhibit 13, "Salomon Inc 1994 Annual Report Financial Information," under the caption "Five Year Summary of Selected Financial Information" on page 96, is deemed part of this Annual Report on Form 10-K and is hereby incorporated herein by reference.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations contained under the following captions in Exhibit 13, "Salomon Inc 1994 Annual Report Financial Information," is deemed part of this Annual Report on Form 10-K and is hereby incorporated herein by reference:
Financial Highlights (page 1) Overview of 1994 (on pages 14 through 19) Segment Information (on pages 20 through 31) Derivative Instruments (on pages 32 through 36) Capital and Liquidity Management (on pages 37 through 44) Risk Management (on pages 45 through 53)
Item 8.

Item 8. Financial Statements and Supplementary Data
The Consolidated Financial Statements of the Company and subsidiaries, together with the Summary of Options and Contractual Commitments, the Summary of Accounting Policies, the Notes to Consolidated Financial Statements and the Report of Independent Public Accountants, contained in Exhibit 13, "Salomon Inc 1994 Annual Report Financial Information" on pages 56 through 93, and the information appearing under the caption "Selected Quarterly Financial Data (Unaudited)" on page 94 of such Exhibit are deemed part of this Annual Report on Form 10-K and are hereby incorporated herein by reference.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no changes in or disagreements with accountants reportable herein.
PART III
Item 10.

Item 10. Directors and Executive Officers of the Registrant
(a) Directors -
Information concerning directors of the Registrant is contained under the caption "Election of Directors" in the Proxy Statement for the 1995 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
(b) Executive Officers -
Information concerning executive officers of the Registrant is presented in Part I of this Annual Report on Form 10-K.
Item 11.

Item 11. Executive Compensation
Information concerning executive compensation is contained under the captions "Election of Directors - Executive Compensation" and "Election of Directors - Board of Directors' Role, Meetings, Committees and Fees" in the Proxy Statement for the 1995 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning security ownership of certain beneficial owners and management is contained under the caption "Election of Directors - Information as to Certain Stockholdings" in the Proxy Statement for the 1995 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
Item 13.

Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related transactions is contained under the caption "Election of Directors - Certain Transactions" in the Proxy Statement for the 1995 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements and Schedules
(1) Financial Statements
The Consolidated Financial Statements of the Company and subsidiaries, together with the Summary of Accounting Policies, the Notes to Consolidated Financial Statements and the Report of Independent Public Accountants, dated February 26, 1995, are contained in Exhibit 13, "Salomon Inc 1994 Annual Report Financial Information," and are hereby incorporated herein by reference.
(2) Schedules
(Schedules are omitted because the required information either is not applicable or is included in the financial statements or the notes thereto.)
(3) Exhibits
3.a Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibits 3 to Quarterly Reports on Form 10-Q for the quarters ended June 30, 1987 and June 30, 1986, Exhibit 4(a) to Registration Statement Number 2-84733 on Form S-3 filed June 30, 1983, Exhibit 4 to Quarterly Report on Form 10-Q for the quarter ended September 30, 1987, Exhibit A to Exhibit 1 to Registration Statement on Form 8-A filed February 11, 1988, Exhibit 3 to Current Report on Form 8-K dated June 13, 1991, and Exhibit 4(a) to Current Report on Form 8-K dated February 22, 1993)
3.b* By-laws of the Company, as amended February 26, 1995
4.a Certificate of Incorporation of the Company. See Exhibit 3(a) above.
4.b Rights Agreement dated as of February 8, 1988 between Salomon Brothers Inc and Morgan Shareholders Services Trust Company and related letter dated February 9, 1988 from Berkshire Hathaway Inc. (incorporated by reference to Exhibit 28 to Annual Report on Form 10-K for the year ended December 31, 1987)
Item 14. (continued)
(c) Exhibits (continued)
4.c First Amendment dated December 7, 1988 to Rights Agreement dated as of February 8, 1988 between Salomon Inc and Morgan Shareholder Services Trust Company (incorporated by reference to Exhibit 28 to Annual Report on Form 10-K for the year ended December 31, 1988)
4.d Contract dated September 27, 1987 between Berkshire Hathaway Inc. and Salomon Inc and letter dated September 28, 1987 amending said contract (incorporated by reference to Exhibit 10(c) to Annual Report on Form 10-K for the year ended December 31, 1987)
4.e The Company agrees to furnish the Securities and Exchange Commission upon its request a copy of any instrument which defines the rights of holders of long-term debt of the Company and its consolidated subsidiaries that does not exceed 10 percent of the total consolidated assets of the Company.
10.a Lease between 7 World Trade Center Company and Salomon Inc dated November 23, 1988 (incorporated by reference to Exhibit 10(a) to the Annual Report on Form 10-K, as amended, for the year ended December 31, 1991)
10.b Foundation Agreement for the creation of the Joint Enterprise "White Nights" between Varyeganneftegaz Production Association, Phibro Energy Production, Inc. and Anglo-Suisse (U.S.S.R.) L.P. dated November 1, 1990 (incorporated by reference to Exhibit 10(b) to the Annual Report on Form 10-K, as amended, for the year ended December 31, 1991)
10.c Charter of the Joint Enterprise "White Nights" (incorporated by reference to Exhibit 10(c) to the Annual Report on Form 10-K, as amended, for the year ended December 31, 1991)
10.d Non-Qualified Stock Option Plan of 1984 (incorporated by reference to Exhibit A to the Proxy Statement for the 1988 Annual Meeting of the Stockholders)
12.a* Calculation of Ratio of Earnings to Fixed Charges
12.b* Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends
13* Salomon Inc 1994 Annual Report Financial Information (furnished for the information of the Securities and Exchange Commission and not deemed "filed" as part of this Report except for those portions which are expressly incorporated by reference)
21* Subsidiaries of the Registrant
23* Consent of Independent Public Accountants
24* Powers of Attorney
27* Financial Data Schedule
Item 14. (continued)
(c) Exhibits (continued)
99.a Copies of the settlement documents relating to the resolution of certain governmental investigations with respect to the U.S. Treasury auction and related matters (incorporated by reference to Exhibit 28(a) to the Annual Report on Form 10-K for the year ended December 31, 1992)
99.b Copies of the amended consolidated complaints filed in connection with In re Salomon Inc Securities Litigation, In re Salomon Brothers Treasury Litigation and In re Salomon Inc Shareholders' Derivative Litigation (incorporated by reference to Exhibit 28(b) to the Annual Report on Form 10-K for the year ended December 31, 1992)
99.c Summaries of the complaints filed against the Company, SBI and certain present and former directors, officers and employees of the Company and
SBI in the six individual actions named in Item 3 with respect to the U.S. Treasury auction and related matters (incorporated by reference to Exhibit 28(c) to the Annual Report on Form 10-K for the year ended December 31, 1992)
99.d Copies of the six complaints summarized in Exhibit 28(c) which were filed against the Company, SBI or certain present and former directors, officers and employees of the Company and SBI with respect to the U.S. Treasury auction and related matters (incorporated by reference to Exhibit 28(c) to the Company's Annual Report on Form 10-K, as amended, for the year ended December 31, 1991; Exhibit 28(h) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1991; Exhibit 28(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1992; Exhibit 28(a) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1992; Exhibit 28(f) to the Company's Current Report on Form 8-K dated September 16, 1991 and Exhibits 28(b) and (c) to the Company's Current Report on Form 8-K dated July 28, 1992).
* Filed herewith
Item 14. (continued)
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated February 2, 1995, reporting under Item 5 ("Other Events:") and Item 7 ("Financial Statements, Pro Forma Financial Information and Exhibits") the issuance of a press release.
The Company filed a Current Report on Form 8-K dated February 27, 1995, reporting under Item 5 ("Other Events:") and Item 7 ("Financial Statements, Pro Forma Financial Information and Exhibits") the issuance of a press release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 30th day of March, 1995.
SALOMON INC By /s/ Arnold S. Olshin (Registrant) (Secretary)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Robert E. Denham Chief Executive Officer March 30, 1995 and Director
Jerome H. Bailey Chief Financial Officer March 30, 1995 and Chief Accounting Officer
Dwayne O. Andreas* Director March 30, 1995
Warren E. Buffett* Director March 30, 1995
Claire M. Fagin* Director March 30, 1995
Gedale B. Horowitz* Director March 30, 1995
Deryck C. Maughan* Director March 30, 1995
William F. May* Director March 30, 1995
Charles T. Munger* Director March 30, 1995
Louis A. Simpson* Director March 30, 1995
Robert G. Zeller* Director March 30, 1995
*The undersigned, by signing his or her name hereto, does hereby sign this report on behalf of each of the above-indicated directors of the Registrant pursuant to powers of attorney, executed on behalf of each such director, on the 30th day of March, 1995.
By /s/ Arnold S. Olshin (Attorney-In-Fact)
SALOMON INC FORM 10-K EXHIBIT INDEX
Certain exhibits to this Form 10-K have been incorporated by reference in Part IV Item 14. The following exhibits are being filed herewith:
Exhibit Number Description -------------- ----------- 3.b By-Laws
12.a Calculation of Ratio of Earnings to Fixed Charges
12.b Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends
13 Salomon Inc 1994 Annual Report Financial Information
21 Subsidiaries of the Registrant
23 Consent of Independent Public Accountants
24 Powers of Attorney
27 Financial Data Schedule