SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from to
Commission File Number 0-5562
HOME BENEFICIAL CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0884714
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
3901 West Broad Street, Richmond, Virginia 23230
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 804-358-843l
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
None on which registered
Securities registered pursuant to Section 12(g) of the Act:
CLASS B COMMON STOCK
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The Registrant's Class A Voting Common Stock is closely held and is not
publicly traded. The aggregate market value of Class B Non-Voting Common
Stock held by nonaffiliates of the Registrant was $203,443,363 as of March
11, 1994.
Number of shares outstanding of each of the Registrant's classes of common
stock as of March 11, 1994:
Class Shares
Class A Common Stock 8,476,576
$.3125 Par Value
Class B Common Stock 9,462,482
$.3125 Par Value
Documents Incorporated by Reference
Part I and Part II of this Form 10-K incorporate certain information by
reference from the Registrant's Annual Report to Stockholders for the year
ended December 31, 1993.
TABLE OF CONTENTS
PART I
PAGE
ITEM 1. Business
HOME BENEFICIAL CORPORATION .................................... 4
BUSINESS OF THE LIFE COMPANY
General .................................................... 4
Life Insurance Underwriting ................................ 5
Accident and Health Insurance .............................. 5
Assets and Investment Policy ............................... 5
Reserves ................................................... 6
Reinsurance ................................................ 7
Territory Served and Regulation ............................ 7
Competition ................................................ 11
Dependence Upon Single or a Few Customers .................. 11
Agency Force and Employees ................................. 11
Industry Segment and Other Information ..................... 11
Foreign Business ........................................... 11
ITEM 2. Properties ................................................ 12
ITEM 3. Legal Proceedings ......................................... 12
ITEM 4. Submission of Matters to a Vote of Security Holders ....... 12
PART II
PAGE
ITEM 5. Market for the Registrants' Common Equity and
Related Stockholder Matters ................................... 13
ITEM 6. Selected Consolidated Financial Data .......................... 13
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................... 13
ITEM 8. Financial Statements and Supplementary Data ................... 13
ITEM 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosures ......................................... 13
PART III
ITEM 10. Directors and Executive Officers of the Registrant ............ 14
ITEM 11. Executive Compensation ........................................ 16
ITEM 12. Security Ownership of Certain Beneficial Owners and Management. 20
ITEM 13. Certain Relationships and Related Transactions ................ 25
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 26
SIGNATURES ............................................................. 34
PART I
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 1993.
BUSINESS OF THE LIFE COMPANY
General
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. Prior to December 1, 1979, the Life Company also sold weekly
premium industrial life insurance, and this line was replaced by a new
ordinary line which provides the policyowners more flexibility in
selecting the mode of payment which best suits their life style.
Prior to 1960, the Life Company, as primary insurer, had group life
insurance in force only for the group insurance issued on the lives of
its own employees. Since January 1, 1960, the Life Company has written
or reinsured regular group insurance which, as of December 31, 1993,
represented approximately 99% of the $5.5 billion group life insurance
then in force. Group life insurance in force is subject to wide
fluctuation due to varying increases and decreases in the number of
employees and coverage per employee under the various group reinsurance
programs in which the Life Company participates.
Life Insurance Underwriting
Underwriting policy for ordinary applications requires medical exami-
nations above certain prescribed maximum amounts which are graduated
according to the age of the applicant; the maximum non-medical limit for
ages 0 to 30 is $100,000, with lesser amounts at higher ages. Medical
examinations are generally required for all applicants over age 56. The
Life Company accepts certain substandard risks for which it charges a
higher premium.
Accident and Health Insurance
The Life Company currently writes individual accident policies with
accidental death and dismemberment benefits. The accident policies
accounted for approximately 32% of total accident and health premiums for
1993.
The individual accident coverage presently offered by the Life
Company provides for lump-sum benefits for accidents occurring before age
70. The Life Company offers no major medical coverage other than to its
own employees.
A significant proportion of the Life Company's group accident and
health insurance is attributable to medical expense benefit coverage
provided for its own employees and their dependents under the Life
Company's Protection and Retirement Plan. In recent years, the Life
Company has increased the cost to its employees for the dependents'
medical expense benefit coverage provided by the Plan.
Assets and Investment Policy
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, 1993. Fixed maturities (bonds, notes and redeemable preferred
stocks), mortgage loans on real estate, and short-term investments are
stated at cost adjusted where appropriate for amortization of premium or
discount; equity securities (nonredeemable preferred and common stocks)
are stated at market 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 $ 26,851 2.4%
States, municipalities and political
subdivisions 249,926 21.9
Foreign government 24,818 2.2
Public utilities 256,163 22.4
All other corporate 137,483 12.0
Certificates of deposit 9,442 .8
Redeemable preferred stocks 1,000 .1
Total fixed maturities 705,683 61.8
Equity Securities:
Nonredeemable preferred stocks 817 .1
Common stocks 26,464 2.3
Mortgage loans 316,372 27.7
Policy loans 52,738 4.6
Short-term investments 33,947 3.0
Other 5,721 .5
$1,141,742 100.0%
The Life Company's mortgage portfolio consists of approximately 2600
conventional first mortgages on a wide range of residential, commercial
and industrial properties located primarily in those mid-Atlantic states
in which the Life Company conducts its insurance business. At December
31, 1993, the aggregate carrying value of mortgage loans was
$316,371,747, broken down by category as follows:
Residential $171,972,307
Commercial 144,399,440
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
under-writer 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. As of
December 31, 1993, approximately 1% of the Life Company's mortgages,
constituting less than 1% of the aggregate mortgage portfolio book value,
consisted of government insured or guaranteed mortgages.
The Life Company's mortgage lending business is heavily concentrated
in the states of Virginia and North Carolina. At December 31, 1993,
approximately 73% of the Life Company's mortgages, constituting approxi-
mately 73% 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 17% of the
Life Company's mortgages, constituting approximately 15% 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 have become
increasingly diversified since World War II, 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 $665,000. No mortgage
loans were in foreclosure proceedings at December 31, 1993. Except as
indicated below, there were no mortgage loans otherwise not performing in
accordance with the contractual terms; there were no mortgage loans whose
terms had been restructured; nor, is the Life Company aware of any
potential problem loans.
At December 31, 1993, 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 $6,794,9981 $443,537 $ -0- $7,238,535
Percent of total
mortgage loans 2.2% .1% - 2.3%
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,
1993 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 1986-1993, 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. 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 1993 without loss. The respective market value of
properties acquired in 1992 exceeds foreclosed balances, and the Life
Company anticipates that they will be disposed of timely 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.
In 1993 the Life Company had net investment income from interest and
dividends of $85.5 million constituting 42% of total Life Company
revenues excluding realized investment gains. The Life Company's return
on invested assets after investment expenses, but before federal taxes,
was 7.77% for 1993 compared to 8.47% for 1992, both figures having been
based on net investment income and investment balances determined in
accordance with generally accepted accounting principles.
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 1993 Annual Report to Stockholders, and Schedule I included
in Part IV elsewhere herein, for additional information concerning the
Corporation's consolidated investment portfolio.
Reserves
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 in 1948 and subsequently 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 page 11 of the 1993 Annual Report to Stockholders for
additional information relating to the Life Company's reserves.
Reinsurance
The Life Company, as do many other companies engaged in selling
insurance, reinsures with other companies portions of the individual life
insurance policies it has underwritten. The primary purpose of
reinsurance is to enable an insurance company to write a policy in an
amount larger than the risk it is willing to assume for itself. 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.
The maximum amount of ordinary insurance presently retained by the
Life Company without reinsurance is $150,000 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, 1993 reinsured by the Life
Company with other companies aggregated $100 million representing 1% of
the Life Company's life insurance in force on that date.
The Life Company acts as a reinsurer on an automatic basis to the
extent of its participation in several group life insurance programs.
Group life reinsurance does not have a material impact on the Life
Company's profitability. The Life Company also assumes reinsurance on a
facultative basis on a yearly renewable ordinary term plan from two other
life companies.
As of December 31, 1993, life insurance assumed represented approxi-
mately 55% of life insurance in force and 17% of life premium income.
Territory Served and Regulation
The Life Company writes insurance in six states and the District of
Columbia. The following table sets forth the geographic distribution of
premiums received (direct business only) during 1993 as well as the year
in which the Life Company began writing insurance in each state:
Premiums Year
Received Operations
Jurisdiction (000's) (1) Commenced
Delaware $ 2,653 1940
District of Columbia 3,103 1913
Maryland 16,359 1923
North Carolina 9,886 1949
Tennessee 22,120 1925
Virginia 40,937 1899
West Virginia 1,219 1960
(1) Gross cash premiums received, before premiums on
reinsurance ceded or assumed.
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. 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 1993 Annual Report to Stockholders.
The Life Company is also required under these laws to file detailed
annual reports with the supervisory agencies in each of the states in
which it does business. Its business and accounts are also subject to
examination by such agencies. Under the laws of Virginia and procedures
established by the National Association of Insurance Commissioners, the
Life Company is examined periodically by one or more of the state
supervisory agencies and is required to have an annual independent audit
performed by a qualified certified public accountant. Under Virginia
law, the Life Company must be examined at least every five years. The
most recently completed examination, covering the years 1989 through
1991, was conducted by insurance department representatives from the
state of Virginia. Such regulation is primarily for the benefit of the
policyholders of the Life Company rather than the stockholders.
Several jurisdictions in which the Life Company does business includ-
ing 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 1993 Annual Report to Stockholders for
additional information concerning transactions between the Life Company
and its affiliates.
Competition
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 "1993 Fact Book", estimates that of the 2,065 life companies doing
business in the United States at the beginning of 1993, approximately
1,948 were stock companies.
According to figures reported in the July 1993 issue of Best's
Review, Life/Health Edition, calculated on a statutory accounting basis,
the Life Company ranks in the top 10% of all stock companies in the
United States based on total admitted assets as of December 31, 1992.
Dependence Upon Single or a Few Customers
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 under "Business of the Life Company -- Reinsurance" above.
Agency Force and Employees
The Life Company offers its insurance through its own agency force
and at December 31, 1993, the agency force consisted of approximately
1,150 full-time personnel assigned to some 47 districts and 13 smaller
offices located in principal cities and towns.
In addition to its agency force, at the end of 1993 there were some
270 supervisory, administrative, clerical and other personnel employed in
the home office. The Life Company's employees are not represented by
labor unions and the Life Company considers its relations with its agents
and other personnel to be good.
Industry Segment and Other Information
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.
Foreign Business
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. 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 60 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 1994 to 2003; all of the longer term leases being for
district office purposes. The maximum annual rent paid under any lease
is $25,550. The annualized rent under all leases in effect on December
31, 1993 was approximately $795,000.
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. 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,
1993.
PART II
ITEM 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
Incorporated herein by reference from the 1993 Annual Report to
Stockholders, page 21.
ITEM 6. Selected Consolidated Financial Data
Incorporated herein by reference from the 1993 Annual Report to
Stockholders, page 22.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Incorporated herein by reference from the 1993 Annual Report to
Stockholders, pages 4, 5, 19 and 20.
ITEM 8. Financial Statements and Supplementary Data
Consolidated financial statements of the Corporation at December 31,
1993 and 1992 and for each of the three years in the period ended
December 31, 1993 and the auditor's report thereon and the Corporation's
unaudited quarterly financial data for the two year period ended December
31, 1993 are incorporated herein by reference from the 1993 Annual Report
to Stock-holders, pages 6 through 18 and 21.
ITEM 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosures
None.
PART III
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 48 Director of the Life Company and the
Corporation and Community Volunteer
H. D. Garnett 51 Vice President (since 1979), Controller
(since 1974) and a director of the
Corporation and the Life Company
C. M. Glenn, Jr. 77 Retired Vice President-Treasurer and a
director of the Corporation and the
Life Company
W. G. Hancock 43 Counsel (since 1984) and a director of
the Corporation and the Life Company
G. T. Richardson 41 Vice President (since 1983) and a director
of the Corporation and the Life Company
L. W. Richardson 74 Retired Vice President and a director of
the Corporation and the Life Company
J. M. Wiltshire, Jr. 68 Vice President (since 1972), Counsel
(since 1982), Secretary (since 1994)
and a director of the Corporation
and the Life Company
R. W. Wiltshire 72 Chairman of the Board (since 1983) and a
director of the Corporation and the Life
Company
R. W. Wiltshire, Jr. 48 President (since 1988), Chief Executive
Officer (since 1992) and a director of
the Corporation and the Life Company
W. B. Wiltshire 45 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 5, 1994. 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 or a comparable 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. R. W.
Wiltshire, Jr. was elected President of the Life Company and Corporation
in 1988. Effective April 7, 1992, he 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
representation 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 1993 with the
following exception. Three family trusts of which W. G. Hancock is one
of the trustees inadvertently filed their initial reports of ownership
eight days late. These family trust holdings, however, were included in
individual reports which were timely filed by Mr. Hancock in his
individual capacity.
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 six 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, 1993.
SUMMARY COMPENSATION TABLE
Name and Principal Annual All Other
Position (1) Year Compensation-Salary (2) Compensation(3)
R. W. Wiltshire 1993 $121,275 $33,688(5)
Chairman of the 1992 178,070 3,561
Board(4)(5) 1991 168,105 3,362
J. M. Wiltshire, Jr. 1993 125,434 3,763
Vice President and 1992 121,201 2,424
Counsel 1991 112,309 2,246
R. W. Wiltshire, Jr. 1993 118,512 3,555
President and Chief 1992 108,528 2,171
Executive Officer(4) 1991 99,302 1,986
H. D. Garnett 1993 112,422 3,373
Vice President and 1992 107,937 2,159
Controller 1991 99,294 1,986
W. B. Wiltshire 1993 105,403 3,162
Vice President 1992 99,986 2,000
1991 91,413 1,828
G. T. Richardson 1993 105,174 -
Vice President 1992 98,991 1,980
1991 90,902 1,833
(1) Offices shown are of both the Corporation and the Life Company.
(2) The amounts shown include pre-tax employee contributions to the
Thrift Plan.
(3) All of the amounts shown (except the 1993 figure for R. W.
Wiltshire) 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 thrift contributions 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 to succeed
R. W. Wiltshire who served in that office during the rest of the
three year period shown.
(5) Effective September 6, 1993, R. W. Wiltshire retired from active
service as an employee and salaried officer of the Corporation and
the Life Company. The amount shown for Mr. Wiltshire includes a
matching contribution to the Thrift Plan of $3,638 for the period
prior to his retirement, as well as $30,000 paid to him under a
supplemental compensation agreement for the period from September 6
through December 31, 1993 and a $50 cash Christmas gift payable to
all retirees. See "Compensation of Directors" below for additional
information regarding the supplemental compensation agreement with
Mr. Wiltshire.
(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 six months of service. 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 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 $200,000 per year
(decreasing to $150,000 per year in 1994), 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, other than R. W.
Wiltshire, are as follows: J. M. Wiltshire, Jr. - $41,131, R. W.
Wiltshire, Jr. - $76,950, H. D. Garnett - $68,792, W. B. Wiltshire -
$77,427, and G. T. Richardson - $84,892. 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 1993 and will then retire and elect a
single life rather than a joint and survivor annuity form of payment. R.
W. Wiltshire retired as an employee and salaried officer of the
Corporation and the Life Company effective September 6, 1993 and is
entitled to an annual benefit of $55,002 under the Plan.
Amounts payable under the Plan are not subject to deduction for
social security benefits under the Federal Social Security Act.
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 noncontrib-utory 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.
R. W. Wiltshire, who retired on September 6, 1993, is a participant
in the post-1992 retiree program and has a spending account credit
balance as of December 31, 1993, after reimbursement to him for premiums
paid subsequent to his retirement, of $42,723. All current salaried
executive officers of the Corporation, upon their retirement, will also
be covered under the post-1992 retiree program. The spending account
credit balances determined as of December 31, 1993 (without interest to
be credited thereafter) for each of them are as follows: J. M.
Wiltshire, Jr. - $28,943, R. W. Wiltshire, Jr. - $26,370, H. D. Garnett-
$24,441, W. B. Wiltshire - $27,014 and G. T. Richardson - $24,441
The Corporation is self insured with respect to benefits under the
post-retirement medical benefits plan.
(g) Compensation of Directors
All directors of the Corporation (other than Messrs. Glenn, L. W.
Richardson, R. W. Wiltshire and 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 considera-tion 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. 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 1993, 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) See Item 10(g) above for a description of the Corporation's
supplemental compensation agreement with R. W. Wiltshire effective
upon his retirement as a salaried executive officer on September 6,
1993
(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. J.
M. Wiltshire, Jr., R. W. Wiltshire, Jr., Garnett, W. B. Wiltshire, and G.
T. Richardson are salaried executive officers of the Corporation. R. W.
Wiltshire retired as an employee of the Corporation on September 6, 1993
and thereafter continued to serve 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. Security Ownership of Certain Beneficial Owners and Management
(a) and (b) As of March 11, 1994, 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
collective-ly may be deemed to be "control persons" of the Corporation
under rules and regulations of the Securities and Exchange Commission.
As of March 11, 1994, 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 165,281 shares of Class A Common Stock that
are not subject to the 1984 Voting Trust.
The following table shows as of March 11, 1994, the beneficial owner-
ship of all Class A and Class B Common Stock by each director of the
Corpo-ration, 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 307,826 (5)(7)(8)(9) 3.63
Class B 100,711 (7)(8)(9) 1.06
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 636,100 (3)(5)(9)(13) 7.50
Class B 153,312 (9)(13) 1.62
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 499,100 (5) 5.89
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 6,216 shares of Class A (of which 2,696
shares are evidenced by voting trust certificates of the 1984 Voting
Trust) and 14,094 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) 55,500 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 86,964 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 11, 1994, executive officers and directors of the
Corporation as a group beneficially owned 1,418,499 shares or 16.7%
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 441,337 shares or 4.7% 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 per-sons presently holding voting trust certificates
representing those shares.
ITEM 13. Certain Relationships and Related Transactions
(a) On May 10, 1993, the Corporation repurchased 365,838 shares of its
Class B Common Stock from the Estate of Mary Morton Parsons at a price of
$9,008,761 or $24.625 per share. At the time of the repurchase, the
Estate of Mary Morton Parsons was the beneficial owner of more than 5% of
the Corporation's outstanding Class A Common Stock.
In the case of the above purchase, the price paid by the Corporation was
below the then applicable bid price for the Corporation's Class B Common
Stock in the over-the-counter market. Prior to the purchase, the Board
of Directors determined that reacquisition of the shares was in the best
interest of the Corporation and its stockholders when compared with
alternative investments available to the Corporation. Immediately upon
their reacquisition, all of the shares became authorized but unissued
shares under Virginia law.
(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 1993, and is expected to serve in the
same capacity in 1994. The amount of legal fees paid to that firm by the
Corporation and its subsidiaries and affiliates for 1993 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. 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 27 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
Index to Financial Statements
and Financial Statement Schedules
(Item 14(a))
Annual
Form Report to
10-K Stockholders
Consolidated Financial Statements:
Report of Ernst & Young, Independent Auditors 18
Consolidated Balance Sheet at December 31, 1993 and 1992 6-7
Consolidated Statement of Income for each of the three
years in the period ended December 31, 1993 8
Consolidated Statement of Retained Earnings for each of
the three years in the period ended December 31, 1993 9
Consolidated Statement of Cash Flows for each of the
three years in the period ended December 31, 1993 10
Notes to Consolidated Financial Statements 11-17
Supplementary information--
Quarterly financial information (unaudited) 21
Financial Statement Schedules:
I - Summary of investments - other than investments
in related parties at December 31, 1993
(Consolidated) 29
III - Condensed Financial Information of Registrant
(Parent Company):
Balance Sheet at December 31, 1993 and 1992 30
Statement of Income for each of the three years
in the period ended December 31, 1993 31
Statement of Cash Flows for each of the three
years in the period ended December 31, 1993 32
VI - Reinsurance for each of the three years in the
period ended December 31, 1993 (Consolidated) 33
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,
1993, are incorporated herein by reference.
CONSENT OF ERNST & YOUNG, 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, 1994,
included in the 1993 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
Richmond, Virginia
February 10, 1994
Schedule I
HOME BENEFICIAL CORPORATION
(CONSOLIDATED)
SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES
At December 31, 1993
Column A Column B Column C Column D
Amount at
which shown in
Type of Investment Cost Value balance sheet
Fixed maturities:
Bonds and notes:
United States Government and
government agencies and
authorities $ 26,851,211 $ 32,086,409 $ 26,851,211
States, municipalities and
political subdivisions 249,926,041 260,177,698 249,926,041
Foreign governments 24,818,059 26,310,376 24,818,059
Public utilities 256,162,592 263,484,437 256,162,592
All other corporate 137,483,053 145,228,209 137,483,053
Certificates of deposit 9,442,430 9,613,442 9,442,430
Redeemable preferred stocks 1,000,000 1,065,625 1,000,000
Total fixed maturities 705,683,386 $737,966,196 705,683,386
Equity securities:
Common stocks:
Public utilities 1,460,765 $ 4,546,073 4,546,073
Banks, trust and insurance
companies 923,311 6,648,557 6,648,557
Industrial, miscellaneous and
other 3,773,750 15,269,243 15,269,243
Nonredeemable preferred stocks 764,963 817,258 817,258
Total equity securities 6,922,789 $27,281,131 27,281,131
Mortgage loans on real estate 316,371,747 316,371,747
Policy loans 52,738,134 52,738,134
Other long-term investments 6,360,115 6,360,115
Short-term investments 35,506,190 35,506,190
Total investments $1,123,582,361 $1,143,940,703
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEET
December 31, 1993 and 1992
1993 1992
ASSETS
Cash and cash equivalents $ 1,580,496 $ 389,175
Investment in subsidiaries, at equity 466,132,836 454,360,284
Other assets 5,628,327 5,726,206
$473,341,659 $460,475,665
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ 79,267 $ 34,269
Stockholders' equity (*)
Capital stock:
Class A Common Stock, voting, $.3125 par
value 12,800,000 shares authorized;
8,476,576 issued at December 31, 1993
and December 31, 1992 2,648,930 2,648,930
Class B Common Stock, non-voting,
$.3125 par value, 19,200,000 shares
authorized; 9,462,482 issued at
December 31, 1993 and 10,050,320
issued at December 31, 1992 2,957,025 3,140,725
Total capital stock 5,605,955 5,789,655
Net unrealized gains on equity securities of
subsidiaries less deferred income taxes 14,258,342 15,894,829
Retained earnings 453,398,095 438,756,912
Total stockholders' equity 473,262,392 460,441,396
$473,341,659 $460,475,665
(*) See Notes 6 and 7 to Consolidated Financial Statements
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENT OF INCOME
Years Ended December 31, 1993, 1992 and 1991
1993 1992 1991
Revenues:
Dividends from subsidiaries $29,216,000 $14,944,000 $23,296,000
Other investment income 1,005,362 944,528 1,009,074
Total Revenues 30,221,362 15,888,528 24,305,074
Expenses:
Operating and administrative 915,949 877,593 785,663
Income before income taxes and
equity in undistributed income
of subsidiaries 29,305,413 15,010,935 23,519,411
Income taxes - current 50,000 25,000 100,000
Income before equity in undistributed
income of subsidiaries 29,255,413 14,985,935 23,419,411
Equity in undistributed income
of subsidiaries 13,359,040 2,047,551 23,942,474
Net income $42,614,453 $17,033,486 $47,361,885
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENT OF CASH FLOWS
Years Ended December 31, 1993, 1992 and 1991
Increase (Decrease) in Cash and Cash Equivalents (*)
1993 1992 1991
Operating Activities:
Net income $ 42,614,453 $ 17,033,486 $ 47,361,885
Adjustments to reconcile net
income to net cash provided
from operating activities:
Undistributed net income
of subsidiaries (13,359,040) (2,047,551) (23,942,474)
Dividends declared, but not
paid by subsidiary - - (3,584,000)
Dividends paid by subsidiary
declared prior year - 3,584,000 -
Other 92,878 13,801 92,467
Net cash provided by
operating activities 29,348,291 18,583,736 19,927,878
Financing activities:
Purchase of Common Stock (14,142,511) (4,252,500) (7,892,780)
Cash dividends to stockholders (14,014,459) (14,152,261) (13,017,426)
Net cash used in financing
activities (28,156,970) (18,404,761) (20,910,206)
Increase (Decrease) in cash and cash
equivalents 1,191,321 178,975 (982,328)
Cash and cash equivalents, beginning
of year 389,175 210,200 1,192,528
Cash and cash equivalents, end of year $ 1,580,496 $ 389,175 $ 210,200
(*) Short-term investments, which consist of investments with maturities of 30
days or less, are considered cash equivalents.
Schedule VI
HOME BENEFICIAL CORPORATION
(CONSOLIDATED)
REINSURANCE
Years Ended December 31, 1993, 1992 and 1991
Column A Column B Column C Column D Column E Column F
% of
Ceded Assumed amount
Gross to other from other Net assumed
amount companies companies amount to net
1993:
Life insurance
in force $4,622,917,075 $101,565,145 $5,467,245,347 $9,988,597,277 54.7%
Premiums:
Life insurance $88,754,881 $452,023 $18,788,760 $107,091,618 17.5%
Accident and
health insurance 8,482,576 2,916 797,843 9,277,503 8.6
Total premiums $97,237,457 $454,939 $19,586,603 $116,369,121 16.8%
1992:
Life insurance
in force $4,640,207,175 $ 99,371,137 $5,250,622,272 $9,791,458,310 53.6%
Premiums:
Life insurance $88,409,010 $383,224 $19,624,622 $107,650,408 18.2%
Accident and
health insurance 9,284,564 2,713 1,014,008 10,295,859 9.8
Total premiums $97,693,574 $385,937 $20,638,630 $117,946,267 17.5%
1991:
Life insurance
in force $4,428,517,391 $111,785,557 $2,231,173,148 $6,547,904,982 34.1%
Premiums:
Life insurance $87,163,298 $442,029 $6,998,782 $93,720,051 7.5%
Accident and
health insurance 9,478,160 2,734 297,145 9,772,571 3.0
Total premiums $96,641,458 $444,763 $7,295,927 $103,492,622 7.0%
SIGNATURES
Pursuant to the requirements of Section 13 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: /s/ H. D. Garnett
H.D. Garnett, Vice President and Controller, March 22, 1994
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:
/s/ R. W. Wiltshire
R.W. Wiltshire, Chairman of the Board & Director, March 22, 1994
/s/ C. M. Glenn, Jr.
C.M. Glenn, Jr., Retired Vice President, Treasurer & Director, March 22, 1994
/s/ L. W. Richardson
L.W. Richardson, Retired Vice President & Director, March 22, 1994
/s/ R. W. Wiltshire, Jr.
R.W. Wiltshire, Jr., President, Chief Executive Officer & Director, March 22,
1994
/s/ J. M. Wiltshire, Jr.
J.M. Wiltshire, Jr., Vice President, Counsel, Secretary & Director, March 22,
1994
/s/ W. B. Wiltshire
W.B. Wiltshire, Vice President & Director, March 22, 1994
/s/ H. D. Garnett
H.D. Garnett, Vice President, Controller & Director, March 22, 1994
/s/ G. T. Richardson
G.T. Richardson, Vice President & Director, March 22, 1994
/s/ W. G. Hancock
W.G. Hancock, Counsel & Director, March 22, 1994
/s/ Dianne N. Collins
Dianne N. Collins, Director, March 22, 1994
HOME BENEFICIAL CORPORATION
Index to Exhibits
(Items 14(c))
Sequential
Page Number
EXHIBITS
2 - Plan of acquisition, reorganization, arrangement, liquidation or
succession - Not applicable -
3(a) - Restated Articles of Incorporation 59-62
(b) - Bylaws incorporated herein by reference from December 31, 1992
Form 10-K -
4 - Instruments defining the rights of security holders, including
indentures - See Article III of the Restated Articles of Incorporation
filed as Exhibit 3(a) hereto -
9 - Voting Trust Agreement dated May 1, 1984, effective May 31, 1984,
and Voting Trust Extension Agreement dated May 1, 1987, effective
May 11, 1987 incorporated herein by reference from December 31, 1992
Form 10-K -
10 - Material Contracts - Consulting and compensation agreements with C. M.
Glenn, Jr. and L. W. Richardson who are present Directors of the
Corporation incorporated herein by reference from December 31, 1992
Form 10-K. Supplemental Compensation Agreement with R. W. Wiltshire,
Chairman of the Board of Directors of the Corporation incorporated
herein by reference from September 30, 1993 Form 10-Q -
11 - Statement reference computation of per share earnings - Not applicable -
12 - Statement reference computation of ratios - Not applicable -
13 - Annual Report to Security Holders
With the exception of the information incorporated by reference into
Items 1, 5, 6, 7 and 8 of this Form 10-K, the 1993 Annual Report to
Stockholders is not deemed filed as part of this report 36-58
16 - Letter reference change in certifying accountant - Not applicable -
18 - Letter reference change in accounting principles - Not applicable -
21 - Subsidiaries of the Registrant incorporated herein by reference from
December 31, 1989 Form 10-K -
22 - Published report regarding matters submitted to vote of security
holders - Not applicable -
23 - Consents of experts and counsel 28
24 - Power of Attorney - Not applicable -
28 - Information from reports furnished to state insurance regulatory
authorities - Not applicable -
99 - Additional exhibits - Not applicable -