ITEM 1. BUSINESS.
THE COMPANY
The Morningstar Group Inc. ("Morningstar" or the "Company") is a national manufacturer and marketer of refrigerated specialty food products that include: (i) branded products and (ii) other specialty, dairy-based ultra-pasteurized ("UHT") and cultured products. In addition, the Company operates Velda Farms Inc. ("Velda"), a Florida-based regional dairy supplying of dairy products to a broad range of customers.
The Company was formed in 1988 to acquire several regional dairies, novelty/ice cream operations and specialty food operations. Shortly after these acquisitions, significant increases in bulk milk prices adversely affected the Company's operating performance and ability to service its highly leveraged capital structure. In 1989, Morningstar shifted its emphasis to refrigerated specialty food products by reorganizing its operations, introducing its branded product lines and commencing the divestiture of its regional dairy and novelty/ice cream operations. In March 1991, Hicks, Muse & Co. Incorporated, now Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse"), together with certain other investors, recapitalized the Company through a transaction that reduced the Company's leverage (the "Financial Restructuring"). Prior to this transaction, the Company is referred to as "Predecessor"; after this transaction, the Company is referred to as "Successor". In April 1992, the Company completed a public offering of 6,215,000 shares of common stock, consisting of 5,000,000 newly issued shares and 1,215,000 shares from existing stockholders. The net proceeds to the Company from this offering of approximately $50 million, together with the proceeds from new senior loans, were used to redeem all of the Company's outstanding 15% preferred stock and purchase $34 million in principal amount of its 13% senior subordinated debentures at a premium, reducing the Company's interest expense and eliminating the future payment of preferred stock dividends.
The Company sold its Texas novelty/ice cream operation in July 1991 and closed its Missouri novelty/ice cream operation in October 1991. The Company completed the sales of its Maryland regional dairy and ice cream operations in July 1992. The Company acquired Favorite Foods Inc. ("Favorite") on March 31, 1993. Favorite is a cultured products and ultrapasteurized processor headquartered in Fullerton, California which recorded sales of approximately $31 million during the nine months ended December 31, 1993. The results of operations for each respective period presented includes such operations only for the periods that such operations were owned or open for business, as the case may be.
On January 6, 1994, the Company announced a restructuring plan designed to sharpen its focus on the faster-growing segments of its core specialty food products business, while reorganizing its operations to increase efficiency. The plan, which resulted in a $9 million charge in the fourth quarter of 1993, includes provisions for reductions in workforce, relocation of the manufacturing for certain product lines to gain operating efficiencies, the abandonment of other product lines, and the retention of C. Dean Metropoulos to provide advisory and related services to the Company. The charge also included $1.9 million representing the excess of the book value of operating assets sold in 1991 and 1992 over their estimated realizable value. The $9 million charge includes noncash expenses of $4.4 million and future cash expenses of $4.6 million. Most of the cash expenditures will occur during 1994. Management believes this plan, which is already being implemented, will result in cost reductions in 1994 of approximately $5 million.
The Company has suspended the payment of dividends on its common stock immediately following the $.0375 per share payment to holders of record as of December 31, 1993.
The Company also announced that on January 5, 1994, it had signed a letter of intent to sell the stock of Velda for $48 million, of which $45 million is expected to be paid in cash at closing. A gain is expected on the sale. When the sale of Velda is consummated, the Company will have completed its divestiture of regional dairies and these operations will be treated as discontinued operations. There can be no assurance that this sale will be consummated or that the net proceeds will be realized.
PRODUCTS
The following table sets forth sales percentage information by product and business category.
Percent of Net Sales
(a) Combines the two months ended February 28, 1991 and the ten months ended December 31, 1991. A change of control occurred on March 1, 1991. Operations prior to that date are referred to as Predecessor and after that date are referred to as Successor.
REFRIGERATED SPECIALTY FOOD PRODUCTS
BRANDED SPECIALTY PRODUCTS
The Company's branded product business consists of four product lines: International Delight(R), Second Nature(R), Naturally Yours(TM) and Lactaid(R). In the development of its branded product lines, the Company has targeted growing market niches and developed products to meet the specific consumer demands.
International Delight. International Delight is a gourmet flavored coffee creamer that is marketed in several flavors. Beginning in 1994, International Delight will be made available in a new no fat format. International Delight was originally introduced on a regional basis in 1973 and was repackaged, reformulated and marketed as a national brand in 1989. The product is sold in half-ounce single serving, pint and quart sizes to supermarkets, foodservice outlets and convenience stores. International Delight is a non-dairy product that is manufactured using the UHT process and, as a result, has an extended shelf life. The Company encounters competition in this product line from various regional and national competitors.
Second Nature. Second Nature is a pasteurized, no fat, no cholesterol egg product. The primary ingredient of Second Nature is egg whites. The product was the first refrigerated alternative to whole eggs to provide the equivalent nutritional
value of whole eggs. Second Nature is another product that was first marketed by the Company as a national brand in 1989. Second Nature was reformulated in a no fat variety and introduced nationally during 1993 in a twin pack containing two eight-ounce containers. Second Nature is typically sold in the fresh egg section of supermarkets, encountering competition from several other national and regional competitors both in the refrigerated format and in a frozen format.
Naturally Yours. Naturally Yours no fat sour cream is the Company's newest branded product. It was introduced nationally during 1993 following a test market in the last half of 1992. Naturally Yours contains 67% less calories than full fat sour cream while delivering similar taste and texture characteristics. Naturally Yours competes with numerous national and regional competitors in the no fat sour cream category.
Lactaid. Lactaid is a line of lactose reduced and lactose free UHT fluid milks produced by the Company under a license arrangement with McNeil Consumer Products Company ("McNeil"), an affiliate of Johnson & Johnson. See "-- Intellectual Property". Lactose intolerance afflicts millions of individuals and Lactaid products bring such individuals back into the market for dairy products. Lactaid has been sold by the Company in the western two-thirds of the United States since September 1991.
OTHER SPECIALTY PRODUCTS
The Company manufactures and distributes other dairy based specialty food products, including (i) UHT products, such as whipping cream, aerosol toppings, half & half and coffee creamers, and (ii) cultured products, such as cottage cheese, sour cream, snack dips and yogurt. These products are sold under customers' brand names, and in a wide variety of food service packages as well as under the Company's own regional brand names such as Avoset(R) (creams), Bancroft(R) (cottage cheese and sour cream), Naturally Yours(R) (yogurt), Quip(R) (aerosol toppings) and Trimline(R) (cottage cheese and other low fat products). The Company sells its UHT and cultured products to food service distributors, regional dairies and retail grocery warehouses. The Company also processes several products for other national marketers including Dole(R), Carnation(R), Pepsi-Lipton(R) and Procter & Gamble(R). The Company encounters competition from several other regional UHT and cultured product manufacturers.
UHT. Certain of the Company's branded products and a number of its other specialty products are produced using the UHT process. The UHT process involves heating products to extremely high temperatures to eliminate all living organisms and then rapidly cooling the products. This process results in product shelf lives in excess of 45 days allowing these products to be shipped relatively long distances and to be distributed through warehouses.
The UHT product category includes several products such as whipping cream, half & half, heavy whipping cream, bavarian style cream, light cream, pastry topping, baker's cream, coffee cream, flavored milks and various non-dairy formulas of creams and creamers. The Company packages its UHT products in a wide variety of sizes and packages to facilitate serving the various needs of its diverse customer base. These packages include: 1/2 ounce and 3/8 ounce portion control creamers; half pint, pint, quart pure-pak containers; aerosol cans; glass bottles; metal cans; and various multi-gallon containers.
Cultured. Cultured products are derived from milk that is pasteurized, inoculated with beneficial bacterial cultures, cooled and then, in some instances, mixed with other ingredients to provide flavor. The culturing process provides unique flavor and texture characteristics and extends shelf life. The Company's cultured products carry shelf lives from 30 to 60 days allowing distribution through warehouse systems.
The cultured products category includes: cottage cheese, sour cream, snack dips and yogurt. Each of these basic products has numerous formula variations primarily related to varying levels of fat content and flavoring options. These products are generally packaged in plastic containers ranging in size from four ounces to 35 pounds.
PRODUCTION AND DISTRIBUTION
Refrigerated specialty food products are manufactured at six plants located in California (3), Wisconsin (1), Texas (1) and Maryland (1). UHT products are manufactured in each of the six plants and cultured products are manufactured in each of the plants other than Gustine, California.
The Company distributes products from its six plants to over 1,300 customers in 49 states and 16 foreign countries, principally using a dedicated fleet of leased refrigerated vehicles. The Company also uses common carriers for product distribution and certain customers pick up products at the Company's manufacturing facilities.
MARKETING AND CUSTOMERS
Branded Specialty Products. The Company develops consumer awareness of its branded products through media advertising of such products, primarily through cooperative advertising with the stores in which its branded specialty products are sold and with manufacturers of products that complement the Company's branded specialty products. The Company also utilizes coupon redemption and in-store demonstrations to develop consumer awareness.
Branded specialty products are primarily sold to grocery warehouses serving the major supermarket chains and are primarily sold through the Company's network of independent food brokers and nationwide sales force. The typical broker used by the Company generally works exclusively on commission. The broker is responsible for placing the sale of the Company's branded products, and for ensuring that the product is appropriately stocked and positioned in supermarkets.
The Company also ships its branded products internationally, currently serving Canada and test marketing branded products in several countries in the Pacific Rim.
Other Specialty Products. The Company markets its other specialty products directly to dairy companies, private label supermarket wholesalers, grocery warehouses, foodservice outlets and food manufacturers. The primary market for the Company's other specialty products is the United States. The Company also markets certain UHT products in the Pacific Rim, primarily in Hong Kong, Taiwan and Singapore.
VELDA AND OTHER
VELDA FARMS
Velda has been a leading supplier of dairy products in Florida for over 40 years. The Company estimates that, within its marketing area, Velda distributes approximately one-half of all dairy and dairy related products sold to foodservice accounts as well as serving significant shares of the convenience store market.
Velda operates two processing plants located in Miami and Winter Haven, Florida that process fluid milk, juices and ice cream. Velda's refrigerated and frozen product distribution network reaches customers throughout Florida, with the exception of the northern panhandle. With approximately 145 routes, this delivery system allows Velda to serve customers as diverse as theme parks, first class hotels, restaurants, convenience stores, supermarkets, warehouses and school systems. The Company believes that Velda's extensive distribution capabilities also are attractive to major national and regional suppliers who wish to reach a wide range of Florida consumers.
Velda's product line includes a wide assortment of refrigerated and frozen dairy products. Velda's principal product category, fluid milk, represented approximately 79% of 1993 sales. This category includes Velda's own brand of milk, Nestles' Quik(R) flavored milks and ice cream mixes for Dairy Queen(R), virtually all of which are manufactured in Velda's own facilities.
Velda has utilized its distribution strength to expand further its product line beyond fluid milk. These items include a wide variety of ice creams, cultured products, juices, butter, hard cheeses and ultra-pasteurized creams, most of which are purchased from other dairy companies. These products include Yoplait(R) yogurt, Eskimo Pie(R) novelties, Edy's(R) ice cream, Haagen-Dazs(R) ice cream and numerous other readily identifiable branded products.
DIVESTED OPERATIONS
During 1990, the Company divested Oak Farms Inc. ("Oak Farms") and Cabell's Dairy Inc. ("Cabell's") regional dairy operations located in Texas, and Adohr Farms Inc. ("Adohr") in California. During 1991, the Company divested a novelty/ice cream operation in Texas and a milk distribution location in Pennsylvania. The Company also closed a novelty operation located in Kansas City, Missouri in October 1991. During 1992, the Company divested Embassy Dairy Inc., a regional dairy in Waldorf, Maryland and East Coast Ice Cream, a novelty/ice cream operation located in Laurel, Maryland. These divested and closed operations comprise the Divested Operations referred to in the Company's disclosures.
RESEARCH AND DEVELOPMENT
The development of new products and the processes under which they are manufactured has been an important part of the Company's growing emphasis on branded specialty products. In addition to the Company's full-time research technicians, all employees, both at the operating and management levels, are encouraged to play an active role in the development of products and their manufacturing processes. The Company's senior management is closely involved in the identification and development of branded products. The Company utilizes consumer research to test new products prior to market introduction.
One of the achievements of this research and development effort was the reformulation of Second Nature to deliver the equivalent nutritional value of whole eggs and more recently reformulated to be a no fat product. In addition, the Company was the first to develop techniques that preserve the taste, quality and nutritional constitution of vegetables during pasteurization. This research effort also developed Naturally Yours(TM) no fat sour cream, a unique product that uses all dairy ingredients. The Company has recently developed a no fat version of International Delight which is currently being introduced to the market place.
INTELLECTUAL PROPERTY
General
The Company's business involves the use of patents, trademarks and trade secrets and licenses granted both to and by the Company. The Company's most important trademarks include International Delight, Second Nature, Naturally Yours, Velda Farms, Trimline, Avoset, Bancroft and the Company's star logo. The Company has also permitted third parties to use trademarks pursuant to licenses granted by the Company, typically in connection with divestitures.
Lactaid License Arrangement
Lactaid is produced under two Lactaid License Agreements (collectively the "Lactaid License") with McNeil. Under the terms of the Lactaid License, McNeil granted the Company the exclusive right to manufacture, produce and package Lactaid modified milk products in the western two-thirds of the United States and certain countries around the Pacific Rim. The Lactaid License provides for payment of a license fee to McNeil based on the volume of Lactaid modified milk products sold by the Company.
DIVESTITURES
Southern Foods Group, Inc. ("Southern Foods"), the purchaser of Oak Farms and Cabell's, entered into Supply Agreements (herein so called) with the Company in connection with such purchase. Pursuant to the terms of the Supply Agreements, Southern Foods agreed to purchase substantially all of its juice, yogurt and aerosol topping requirements from the Company for a period of four years ending in 1994. Southern Foods also agreed to purchase plastic bottling supplies from Morningstar for a three year period.
The purchasers of Adohr Farms entered into a Requirements and Distribution Agreement (herein so called) pursuant to which they agreed to purchase a minimum of 75% of their UHT and cultured products requirements from the Company for a period of seven years ending in 1997.
The purchasers of Embassy Dairy Inc. entered into an agreement pursuant to which they agreed to purchase their requirements of UHT and cultured products for a period of three years ending in 1995.
The Company has agreed to indemnify the purchasers of its divested operations with regard to certain potential liabilities arising out of the acquisition of such operations. In connection therewith, the Company has indemnified Southern Foods, the purchaser of the Oak Farms and Cabell's dairy subsidiaries, against claims related to compliance with environmental regulations and fair trade practices arising out of the prior operation of Oak Farms and Cabell's through March 2000. See Item 3 of this Form 10-K.
SUPPLIERS AND RAW MATERIALS
The Company purchases its primary raw material, bulk milk, from farm marketing cooperatives, individual farmers and other dairy companies. The supply and cost of bulk milk are influenced by many factors, including consumer demand, government regulation and seasonality. The Company has not experienced any supply shortages and expects that bulk milk will continue to be available in sufficient quantities to supply its processing requirements.
Certain other raw materials, such as juice concentrates, sweeteners, flavorings and various packaging supplies, are generally available from a wide variety of sources.
CUSTOMERS
The Company markets products to a broad range of customers including convenience stores, supermarkets, grocery warehouses, independent distributors, other dairies, and food service customers such as hotels, restaurants, nursing homes, schools, cruise ships and theme parks. The Company sells to customers nationwide and a small percentage of its products is distributed in foreign countries, primarily in Canada and the Pacific basin. No customer of the Company accounts for more than 10% of the Company's sales as of December 31, 1993.
SEASONALITY
Sales of the Company's refrigerated specialty food products exhibit modest seasonality with products such as whipping cream, aerosol toppings, sour cream and International Delight experiencing higher sales in the late fall and winter seasons. Velda's sales exhibit slightly greater seasonality with peak sales from Thanksgiving through Easter, coinciding with Florida's tourist season.
EMPLOYEES
As of December 31, 1993, the Company employed approximately 1,432 personnel of whom approximately 482 were represented by unions under collective bargaining agreements. These agreements cover employees at the following locations: Fullerton, Gustine and Tulare, California; and Madison, Wisconsin. Two of the collective bargaining agreements are due to expire within the next 12 months. The Company will from time to time be negotiating new agreements with the various unions representing these employees and it expects that it will enter into agreements with such unions which are satisfactory to the Company. The Company has had no recent work stoppages and considers its relations with its employees to be satisfactory.
GOVERNMENT REGULATION
PUBLIC HEALTH
As a manufacturer and distributor of food products, the Company is subject to the Federal Food, Drug, and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory scheme governs, among other things, the manufacturing, composition and ingredients, labeling, packaging, and safety of food. For example, the FDA regulates manufacturing practices for foods through its current good manufacturing practices regulations, specifies the "recipes," called standards of identity, for certain foods, including many of the kinds of products marketed by the Company (e.g ., ice cream,
sour cream, half & half, and yogurt), and prescribes the format and content of certain information required to appear on the labels of food products.
Additionally, the FDA is responsible for enforcement of the Public Health Service Act and regulations issued thereunder, which authorize regulatory activity necessary to prevent the introduction, transmission or spread of communicable diseases. These regulations require, for example, pasteurization of milk and milk products.
The FDA has recently proposed extensive regulations pursuant to the Nutrition Labeling and Education Act of 1990. Such regulations are expected to take effect in May, 1994. Nutritional labeling will be required on all foods that are a meaningful source of nutrition, including the Company's products, and limitations will be placed on the use of certain terms while requiring the use of other terms. The Company is currently revising labeling of its products to conform to the final regulations. The Company does not expect the cost of complying with these regulations to be material.
In addition to FDA regulation of the Company's products, the Company's advertising is subject to regulation by the Federal Trade Commission pursuant to the Federal Trade Commission Act and regulations issued thereunder.
The Company and its products are also subject to state regulation through such measures as licensing of the Company's dairy plants, enforcement by state health agencies of state standards for the Company's products, inspection of the Company's facilities, and regulation of the Company's trade practices in connection with the sale of the dairy products.
Enforcement actions for violations of federal and state regulations may include seizure and condemnation of violative products, cease and desist orders, injunctions and/or monetary penalties.
The Company maintains quality control laboratories at each of its food processing facilities to test bulk milk and other ingredients as well as finished products. In addition, the Company has developed and administers Hazard Analysis of Critical Control Point programs designed to detect hazardous levels of bacteria and other contamination that may have occurred during manufacturing. The Company believes that its facilities and practices are sufficient to maintain its compliance with applicable government regulations, although there can be no assurances in this regard.
INTERSTATE COMMERCE COMMISSION
The Company's interstate trucking services to the public in connection with its backhaul operations are subject to regulation by the Interstate Commerce Commission (the "ICC"). In order to provide backhaul services, the Company obtained a license from the ICC and must comply with certain safety and insurance requirements promulgated by the ICC on a continuing basis.
EMPLOYEE SAFETY REGULATIONS
The Company is subject to certain health and safety regulations including regulations issued pursuant to the Occupational Safety and Health Act. These regulations require the Company to comply with certain manufacturing, health and safety standards to protect its employees from accidents.
ENVIRONMENTAL REGULATIONS
The Company is subject to certain federal, state and local environmental regulations. Certain of the Company's facilities discharge biodegradable wastewater into municipal waste treatment facilities in excess of levels permitted under local regulations. In such circumstances, the Company generally pays wastewater surcharges to municipal water treatment authorities. However, such authorities may require the Company to comply with such regulations and construct pre-treatment facilities or take other action to reduce effluent discharge.
The Company maintains underground fuel storage tanks to service its vehicles. All such tanks are periodically inspected to determine compliance with applicable regulations. In connection with these inspections, the Company may, at times, need to make certain expenditures in order to maintain compliance.
Environmental compliance with federal, state or local authorities is not expected to have a material impact on the Company's capital expenditures, earnings or competitive position.
DAIRY SUPPORT PROGRAM
The minimum prices paid for grade-A bulk milk in the United States are controlled in most areas by Federal Milk Marketing Orders or state regulatory agencies. In most areas, the prices paid for bulk milk by processors are higher than these minimums due to premiums charged by suppliers and shippers. The Company has long established relationships with bulk milk suppliers, primarily milk cooperatives in each of its markets and has not experienced any shortages in its supply of fresh bulk milk.
THE PUBLIC EQUITY OFFERING
On April 24, 1992, the Company issued 5,000,000 shares of new common stock in a public offering at an issue price of $11 per share. Simultaneously 1,215,000 shares were sold to the public by certain selling stockholders. The offering provided net cash proceeds to the Company of approximately $50 million which, combined with approximately $104 million in new senior bank borrowings, was used to purchase approximately $34 million in face amount of Debentures at a cash premium of approximately $4 million, to redeem all the Company's Preferred Stock for approximately $18 million and to refinance approximately $98 million in senior debt.
ITEM 2.

ITEM 2. PROPERTIES.
The Company currently operates processing facilities in the following locations:
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The Company also has eight distribution facilities in Florida related to the Velda operations.
The Company's executive offices are located in approximately 17,604 square feet of leased office space located at 5956 Sherry Lane, Suite 1100, Dallas, Texas 75225-6522. The lease for this property expires on October 31, 2000 with a five year extension available.
The Company believes that its facilities are well maintained and adequate to meet its current needs. The Company does expect to expand the capacity of its existing facilities in order to service future growth expectations.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
FEDERAL INVESTIGATION
The Company received a target letter dated December 31, 1991, from the United States Department of Justice informing it that Morningstar is a target of a federal grand jury investigation of suspected bid-rigging and market allocation in the dairy industry in the State of Texas. The investigation relates to activities conducted in the fluid milk industry in Texas. Oak Farms and Cabell's (collectively the "Texas Dairy Subsidiaries") were formed by the Company in March 1988 in connection with the acquisition of substantially all of the assets of Southland's dairy operations. The Texas Dairy Subsidiaries conducted fluid milk operations in Texas and were sold to Southern Foods in September 1990, which merged them into its subsidiary, Schepps-Foremost, Inc.
The investigation by the Department of Justice is continuing, and the scope and time of the conspiracies that may be alleged by the government is uncertain. Based on the Company's internal investigation to date and the advice of special counsel with respect to such matters, the Company believes Morningstar should not be, and that Morningstar should ultimately be removed as, a target given that (i) all of Morningstar's Texas fluid milk operations were conducted through the Texas Dairy Subsidiaries and (ii) the Company is not aware of any evidence that any officers of Morningstar had any knowledge of or participated in such alleged wrongdoings.
The Company has agreed to indemnify purchasers of its divested operations with regard to certain potential liabilities arising out of the acquisition of such operations. In connection therewith, the Company has indemnified Southern Foods, the purchaser of the Oak Farms and Cabell's dairy subsidiaries, against claims related to compliance with environmental regulations and fair trade practices arising out of the prior operaiton of Oak Farms and Cabell's through March 2000. The Company is aware that Southern Foods may claim that the Company is obligated to indemnify Southern Foods with respect to any illegal activities which are found to occur prior to the sale of the Texas Dairy Subsidiaries to Southern Foods.
The Company cannot accurately predict the outcome of the government's investigation. However, based upon the information available to the Company at this time, the Company believes that this matter should not have a material impact on the Company's financial position or future results of operations.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the stockholders during the fourth quarter of the fiscal year.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information required by this item is included in the Registrant's Annual Report to Stockholders for the year ended December 31, 1993 on page 31 under the caption "Quarterly Financial Information" and is incorporated herein by reference.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
The information required by this item is included in the Registrant's Annual Report to Stockholders for the year ended December 31, 1993 on page 32 under the caption "Selected Financial Data" and is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information required by this item is included in the Registrant's Annual Report to Stockholders for the year ended December 31, 1993 on pages 9 through 12, under the caption "Management's Discussion and Analysis of Results of Operations and Financial Condition," and is incorporated herein by reference.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item is included in the Registrant's Annual Report to Stockholders for the year ended December 31, 1993 on pages 14 through 31, and is incorporated herein by reference.
ITEM 9.

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

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this item is included in the Registrant's definitive Proxy Statement relating to its annual meeting of stockholders to be held on May 19, 1994 under the caption "Directors and Officers".
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is included in the Registrant's definitive Proxy Statement relating to its annual meeting of stockholders to be held May 19, 1994 under the caption "Executive Management Compensation" and is incorporated herein by reference. The foregoing incorporation by reference specifically excludes the discussion under "Executive Management Compensation - -- Compensation Committee Report" and "The Morningstar Group Inc. Stock Price Performance".
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is included in the Registrant's definitive Proxy Statement relating to its annual meeting of stockholders to be held on May 19, 1994 under the caption "Voting Securities Outstanding, Security Ownership of Management and Principal Stockholders" and is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is included in the Registrant's definitive Proxy Statement under the captions "Executive Management Compensation -- Compensation Committee Interlocks and Insider Participation" and "Certain Transactions" and is incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Report. The page number, if any, listed opposite a document indicates the page number in the sequential number system in the manually signed original of this Report where such document can be found.
Page Number (1) Financial Statements
See Item 8 on page 10.
(2) Index to Financial Statement Schedules
Report of independent public accountants on financial statement schedules . . . . . . . . . . . . . . . . . . .20
Schedule V - Property, plant and equipment . . . . . . . .21
Schedule VI - Accumulated depreciation of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . .22
Schedule VIII - Allowance for doubtful accounts . . . . . .23
Schedule X - Supplementary statement of operations information . . . . . . . . . . . . . . . . . . . . . . .24
All other schedules have been omitted because they are not applicable, not required, or because the required information is shown in the consolidated financial statements or notes thereto.
(3) Exhibits required by Item 601 of Regulation S-K
Exhibit Number Description
3(a) -- Restated Certificate of Incorporation of the Company. (Incorporated by reference to Exhibit 3(a) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
3(b) -- Amended and Restated By-laws of the Company. (Incorporated by reference to Exhibit 3(b) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
4(a) -- Third Amended and Restated Stockholders' Agreement dated as of March 1, 1991, among the Company and certain stockholders of the Company. (Incorporated by reference to Exhibit 4(d) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1990.)*
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* Incorporated by reference as indicated.
Exhibit Number Description
4(b) -- Stockholders' Agreement dated as of March 1, 1991, among LTCB, NMB, HMCM, the Company and certain stockholders of the Company. (Incorporated by reference to Exhibit 4(e) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1990.)*
4(c) -- Stockholders' Agreement dated February 5, 1992 among the Company and certain stockholders. (Incorporated by reference to Exhibit 4(d) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(a) -- Dairy Products Purchase Agreement dated April 1, 1988, between Company and Southland (without exhibits). (Incorporated by reference to Exhibit 10(a) to the Registrant's Registration Statement on Form S-1, as amended, registration No. 33-21790.)*
10(b) -- Stock Purchase Agreement dated as of March 16, 1990, between the Company and Southern Foods Group, Inc. (Incorporated by reference to Exhibit (c)(1) to the Registrant's Current Report on Form 8-K dated September 6, 1990.)*
10(c) -- First Amendment to Stock Purchase Agreement dated September 6, 1990, among Southern Foods Group, Inc., the Company and Schepps-Foremost, Inc. (Incorporated by reference to Exhibit (c)(2) to the Registrant's Current Report on Form 8-K dated September 6, 1990.)*
10(d) -- Securities Purchase Agreement dated as of February 22, 1991, between the Company and HMCM. (Incorporated by reference to Exhibit (c)(2) to the Registrant's Current Report on Form 8-K dated March 1, 1991.)*
10(e) -- Stock Purchase Agreement dated as of March 1, 1991, among the Company, NMB U.S. Finance Corporation and The Long-Term Credit Bank of Japan, Ltd. (Incorporated by reference to Exhibit 10(g) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1990.)*
10(f) -- Financial Advisory Agreement dated as of March 1, 1991, between the Company and Hicks, Muse & Co. Incorporated. (Incorporated by reference to Exhibit 10(h) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1990.)*
10(g) -- Employees' Savings and Profit Sharing Plan dated April 1, 1988. (Incorporated by reference to Exhibit 10(g) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1988.)*
10(h) -- Employment Agreement dated March 1, 1991, between the Company and James A. Bach. (Incorporated by reference to Exhibit 10(k) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1990.)*
10(i) -- Employment Agreement dated March 1, 1991, between the Company and Clifford L. Marquart. (Incorporated by reference to Exhibit 10(l) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1990.)*
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* Incorporated by reference as indicated.
Exhibit Number Description
10(j) -- Employment Agreement dated March 1, 1991, between the Company and Tracy L. Noll. (Incorporated by reference to Exhibit 10(m) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1990.)*
10(k) -- Amendment No. 1 to Employment Agreement, entered into as of September 17, 1991, by and among The Morningstar Group Inc. and James A. Bach.**
10(l) -- Amendment No. 1 to Employment Agreement, entered into as of September 17, 1991, by and among The Morningstar Group Inc. and Clifford L. Marquart.**
10(m) -- Amendment No. 1 to Employment Agreement, entered into as of September 17, 1991, by and among The Morningstar Group Inc. and Tracy L. Noll.**
10(n) -- Purchase Agreement dated as of September 13, 1991, among HMCM, certain sellers (as defined), certain buyers (as defined) and the Company.**
10(o) -- MorningStar Foods, Inc. 1991 Incentive and Nonstatutory Stock Option Plan.**
10(p) -- The Morningstar Group Inc. 1992 Incentive and Nonstatutory Option Plan.**
10(q) -- Second Amended and Restated Credit Agreement dated as of May 4, 1992, among the Company, the financial institutions named therein, LTCB, as Agent, and Banque Paribas as Co-Agent. (Incorporated by reference to Exhibit 10(t) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(r) -- Licensing Agreement to produce Lactaid Brand Lactose Reduced Milk (Confidential treatment has been requested for this exhibit).**
10(s) -- Stock Purchase Agreement dated as of January 10, 1992, among Protein Capital Corporation and the Company.***
10(t) -- First Amendment to Stock Purchase Agreement, dated as of March 31, 1992 to Stock Purchase Agreement dated as of January 10, 1992, among Protein Capital Corporation and the Company.***
10(u) -- Stock Purchase Agreement dated as of March 31, 1992, among Protein Capital Corporation and the Company.***
10(v) -- Amendment No. 2 to Employment Agreement, entered into as of April 30, 1992 by and among The Morningstar Group Inc. and James A. Bach. (Incorporated by reference to Exhibit 10(dd) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)* ____________________________
* Incorporated by reference as indicated.
** Incorporated by reference to the corresponding exhibit to the Registration Statement on Form S-1 (Registration No. 33- 45805) filed by the Registrant on February 19, 1992.
*** Incorporated by reference to the corresponding exhibit to the Registration Statement on Form S-1 (Registration No. 33- 45805), as amended by the Registrant on April 8, 1992.
Exhibit Number Description
10(w) -- Amendment No. 2 to Employment Agreement, entered into as of April 30, 1992 by and among The Morningstar Group Inc. and Clifford L. Marquart. (Incorporated by reference to Exhibit 10(ee) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(x) -- Amendment No. 2 to Employment Agreement, entered into as of April 30, 1992 by and among The Morningstar Group Inc. and Tracy L. Noll. (Incorporated by reference to Exhibit 10(ff) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(y) -- Amendment No. 1 to Financial Advisory Agreement entered into as of April 30, 1992 between the Company and Hicks, Muse & Co. Incorporated. (Incorporated by reference to Exhibit 10(gg) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(z) -- Incentive Stock Option Agreement (Tenure Option) entered into as of March 1, 1991, between MorningStar Foods Inc. and James A. Bach.****
10(aa) -- Incentive Stock Option Agreement (EBITDA Option) entered into as of March 1, 1991, between MorningStar Foods Inc. and James A. Bach.****
10(bb) -- Incentive Stock Option Agreement (Tenure Option) entered into as of March 1, 1991, between MorningStar Foods Inc. and Clifford L. Marquart.****
10(cc) -- Incentive Stock Option Agreement (EBITDA Option) entered into as of March 1, 1991, between MorningStar Foods Inc. and Clifford L. Marquart.****
10(dd) -- Incentive Stock Option Agreement (Tenure Option) entered into as of March 1, 1991, between MorningStar Foods Inc. and Tracy L. Noll.****
10(ee) -- Incentive Stock Option Agreement (EBITDA Option) entered into as of March 1, 1991, between MorningStar Foods Inc. and Tracy L. Noll.****
10(ff) -- Amendment No. 1 to Incentive Stock Option Agreement (EBITDA Option) entered into as of September 12, 1991, by and among The Morningstar Group Inc. and James A. Bach.****
10(gg) -- Amendment No. 1 to Incentive Stock Option Agreement (Tenure Option) entered into as of September 12, 1991, by and among The Morningstar Group Inc. and James A. Bach.****
10(hh) -- Amendment No. 1 to Incentive Stock Option Agreement (EBITDA Option) entered into as of September 12, 1991, by and among The Morningstar Group Inc. and Clifford L. Marquart.****
____________________________
* Incorporated by reference as indicated.
**** Incorporated by reference to the corresponding exhibit to the Registration Statement on Form S-1 (Registration No 33- 45805), as amended by the Registrant on April 22, 1992.
Exhibit Number Description
10(ii) -- Amendment No. 1 to Incentive Stock Option Agreement (Tenure Option) entered into as of September 12, 1991, by and among The Morningstar Group Inc. and Clifford L. Marquart.****
10(jj) -- Amendment No. 1 to Incentive Stock Option Agreement (EBITDA Option) entered into as of September 12, 1991, by and among The Morningstar Group Inc. and Tracy L. Noll.****
10(kk) -- Amendment No. 1 to Incentive Stock Option Agreement (Tenure Option) entered into as of September 12, 1991, by and among The Morningstar Group Inc. and Tracy L. Noll.****
10(ll) -- Amendment No. 2 to Incentive Stock Option Agreement (EBITDA Option) entered into as of April 30, 1992 by and among The Morningstar Group Inc. and James A. Bach. (Incorporated by reference to Exhibit 10(tt) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(mm) -- Amendment No. 2 to Incentive Stock Option Agreement (Tenure Option) entered into as of April 30, 1992 by and among The Morningstar Group Inc. and James A. Bach. (Incorporated by reference to Exhibit 10(uu) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(nn) -- Amendment No. 2 to Incentive Stock Option Agreement (EBITDA Option) entered into as of April 30, 1992 by and among The Morningstar Group Inc. and Clifford L. Marquart. (Incorporated by reference to Exhibit 10(vv) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(oo) -- Amendment No. 2 to Incentive Stock Option Agreement (Tenure Option) entered into as of April 30, 1992 by and among The Morningstar Group Inc. and Clifford L. Marquart. (Incorporated by reference to Exhibit 10(ww) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(pp) -- Amendment No. 2 to Incentive Stock Option Agreement (EBITDA Option) entered into as of April 30, 1992 by and among The Morningstar Group Inc. and Tracy L. Noll. (Incorporated by reference to Exhibit 10(xx) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(qq) -- Amendment No. 2 to Incentive Stock Option Agreement (Tenure Option) entered into as of April 30, 1992 by and among The Morningstar Group Inc. and Tracy L. Noll. (Incorporated by reference to Exhibit 10(yy) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(rr) -- Amendment to No. 2 to Lactaid Licensing Agreement and to Distribution Agreement (confidential treatment has been requested for this exhibit).****
____________________________
* Incorporated by reference as indicated.
**** Incorporated by reference to the corresponding exhibit to the Registration Statement on Form S-1 (Registration No 33- 45805), as amended by the Registrant on April 22, 1992.
Exhibit Number Description
10(ss) -- Amendment No. 3 to Employment Agreement, entered into as of July 30, 1992 by and among The Morningstar Group Inc. and James A. Bach. (Incorporated by reference to Exhibit 10(aaa) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(tt) -- Amendment No. 3 to Employment Agreement, entered into as of July 30, 1992 by and among The Morningstar Group Inc. and Clifford L. Marquart. (Incorporated by reference to Exhibit 10(bbb) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(uu) -- Amendment No. 3 to Employment Agreement, entered into as of July 30, 1992 by and among The Morningstar Group Inc. and Tracy L. Noll. (Incorporated by reference to Exhibit 10(ccc) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(vv) -- Amendment No. 3 to Incentive Stock Option Agreement (Tenure Option) entered into as of October 1, 1992, by and among The Morningstar Group Inc. and James A. Bach. (Incorporated by reference to Exhibit 10(ddd) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(ww) -- Amendment No. 3 to Incentive Stock Option Agreement (Tenure Option) entered into as of October 1, 1992, by and among The Morningstar Group Inc. and Clifford L. Marquart. (Incorporated by reference to Exhibit 10(eee) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(xx) -- Amendment No. 3 to Incentive Stock Option Agreement (Tenure Option) entered into as of October 1, 1992, by and among The Morningstar Group Inc. and Tracy L. Noll. (Incorporated by reference to Exhibit 10(fff) to the Registrant's Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 1992.)*
10(yy) -- Letter agreement dated December 15, 1993 between The Morningstar Group and Hicks, Muse & Company, Inc.
10(zz) -- Agreement dated June 1, 1993 between McNeil Consumer Products Company, a division of McNeil - PPC, Inc. and The Morningstar Group Inc. (Confidential treatment has been requested for this exhibit). (Incorporated by reference to Exhibit 10(a) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.)*
10(aaa) -- Letter Agreement dated June 1, 1993 between McNeil Consumer Products Company, a division of McNeil - PPC, Inc. and The Morningstar Group Inc. and Avoset Food Corporation (Confidential treatment has been requested for this exhibit). (Incorporated by reference to Exhibit 10(b) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.)*
10(bbb) -- First Amendment and Waiver to the Second Amended and Restated Credit Agreement dated March 5, 1993 among The Morningstar Group Inc. and The Long-Term Credit Bank of Japan, Limited, New York Branch, Agent and Banque Paribas, Houston Agency as Co-Agent. ____________________________
* Incorporated by reference as indicated.
Exhibit Number Description
10(ccc) -- Second Amendment to the Second Amended and Restated Credit Agreement dated October 28, 1993 among The Morningstar Group Inc. and The Long-Term Credit Bank of Japan, Limited, New York Branch, Agent and Banque Paribas, Houston Agency as Co-Agent.
10(ddd) -- Waiver to the Second Amended and Restated Credit Agreement dated March 4, 1993 among The Morningstar Group Inc. and The Long-Term Credit Bank of Japan, Limited, New York Branch, Agent and Banque Paribas, Houston Agency as Co-Agent.
10(eee) -- Agreement and Plan of Merger dated February 17, 1994 by and among Engles Dairy Acquisition, Inc., Velda Farms Inc. and The Morningstar Group.
10(fff) -- Form of Dairy Products Supply Agreement by and among The Morningstar Group Inc., its named subsidiaries and Velda Farms Inc.
10(ggg) -- Letter of Resignation dated March 17, 1994 from James A. Bach, accepted and agreed to by The Morningstar Group Inc.
10(hhh) -- Waiver No. 1 to Employment Agreement entered into as of December 15, 1993 by and among The Morningstar Group Inc. and James A. Bach.
10(iii) -- Waiver No. 1 to Employment Agreement entered into as of December 15, 1993 by and among The Morningstar Group Inc. and Tracy L. Noll.
10(jjj) -- Advisory Agreement entered into as of October 1, 1993 by and among The Morningstar Group Inc. and C. Dean Metropoulos.
10(kkk) -- Stock Purchase Agreement entered into as of February 5, 1993 by and among TSC Holdings, Inc. and The Morningstar Group Inc.
10(lll) -- The Morningstar Group Inc. Employees Savings and Profit Sharing Plan, revised effective April 1, 1988.
13 -- The Morningstar Group Inc. Annual Report to Stockholders for the year ended December 31, 1993 (except for the pages and information thereof expressly incorporated by reference in this Form 10- K, the annual report is provided solely for the information of the Securities and Exchange Commission and is not to be deemed "filed" as part of the Form 10-K).
22 -- Subsidiaries. Avoset Food Corporation, Avoset International Ltd., Bancroft Dairy Inc., Bancroft Dairy Maryland Inc., Favorite Foods Inc., MSF Subsidiary Corporation, MStar Inc., Star Specialty Foods Inc., Velda Farms Inc.
(b) Reports on form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE MORNINGSTAR GROUP INC.
By /s/ C. DEAN METROPOULOS C. Dean Metropoulos (President, Chief Executive Officer and Director)
Date: March 17, 1994
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:
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of The Morningstar Group Inc.:
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements of The Morningstar Group Inc., and subsidiaries and the Predecessor Company included in the Annual Report to Stockholders incorporated by reference in this Form 10-K and have issued our report thereon dated February 11, 1994. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the Index to Financial Statement Schedules are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Dallas, Texas, February 11, 1994
SCHEDULE V
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES AND PREDECESSOR COMPANY
PROPERTY, PLANT AND EQUIPMENT (Dollars in Thousands)
___________________________________
(a) Assets held for sale were segregated and reclassified on the Company's balance sheet.
(b) The Company adopted a new basis of accounting on March 1, 1991, as the result of a change in ownership.
(c) Certain Company assets targeted for divestiture were revalued as a result of subsequent transactions.
SCHEDULE VI
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES AND PREDECESSOR COMPANY
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT (Dollars in Thousands)
_____________________________________________
(a) The Company adopted a new basis of accounting on March 1, 1991 as the result of a change in ownership.
SCHEDULE VIII
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES AND PREDECESSOR COMPANY
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Dollars in Thousands)
SCHEDULE X
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES AND PREDECESSOR COMPANY
SUPPLEMENTARY STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands)


ITEM 1. BUSINESS
General
Liberty National Bancorp, Inc. ("Liberty") is a Kentucky corporation incorporated in 1979 for the purpose of acquiring Liberty National Bank and Trust Company of Kentucky ("Liberty Bank"), which is Liberty's principal subsidiary. Liberty is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, and owns directly or indirectly 100% of ten banks as of December 31, 1993. Liberty ranks third among all bank holding companies headquartered in Kentucky with $4.9 billion of total consolidated assets at December 31, 1993. The following table lists for each of the ten bank subsidiaries that Liberty owns (the "Banks"), the primary location of its principal offices, the number of banking offices, and total assets at December 31, 1993.
Hardin County Bank and Trust, Inc., and Farmers Deposit Bank of Brandenburg were merged with Liberty National Bank and Trust Company of Hardin County in February 1994 to form Liberty National Bank and Trust Company of Central Kentucky. In April 1994, pending regulatory approval, Liberty National Bank of Madisonville will be merged with First Federal Savings Bank in Hopkinsville, Kentucky, to form Liberty National Bank and Trust Company of Western Kentucky. The Banks engage in a wide range of commercial and personal banking activities, including accepting demand and time deposits; making secured and unsecured loans to corporations, individuals and others; issuing letters of credit; renting safe deposit boxes; and other financial services for institutions and individuals. The Banks' lending services include making commercial, industrial, real estate, installment and credit card loans. The Banks participate in national and regional automated teller machine networks, which enable customers of participating banks to have access to funds in their accounts throughout the United States. Liberty Investment Services, Inc., a wholly-owned subsidiary of Liberty, offers brokerage services. The Banks provide credit life and accident and health insurance to borrowers through LNB Life Insurance Company, a wholly-owned subsidiary of Liberty Bank. Liberty Bank's Mortgage Origination, Sales and Service Group, sells and services single-family residential loans for other companies' mortgage portfolios and also services Liberty Bank's mortgage portfolio. Liberty Bank is involved in direct and leveraged lease financing, including vehicle leasing, through other wholly-owned subsidiaries. Liberty Bank also maintains a branch facility in the Cayman Islands. Liberty Bank acts as correspondent for banks throughout Kentucky and in Indiana, providing such services as check clearing, transfer of funds, loan participations, investment advice, data processing, and securities custody and clearance. The Banks provide a wide range of personal and corporate trust and trust-related services. At December 31, 1993, Liberty and its subsidiaries had 2,305 full-time equivalent employees.
Competition
The Banks actively compete on the local, regional and national levels with commercial banks, savings institutions, brokerage houses and other
financial institutions for all types of deposits, loans and trust accounts and other financial services.
Supervision and Regulation
Liberty is subject to regulation under the Bank Holding Company Act of 1956, as amended (the "Act"). Under the Act, Liberty is required to file with the Federal Reserve Board annual reports and other information regarding its business operations and the business operations of its subsidiaries. The Federal Reserve Board may also make examinations of Liberty and its subsidiaries. The Act also requires the prior approval of the Federal Reserve Board for a bank holding company to acquire or hold more than 5% voting interest in any bank, and currently restricts interstate banking activities. The Act restricts Liberty's nonbanking activities to those which are closely related to banking. The Act does not place territorial restrictions on the activities of nonbank subsidiaries of bank holding companies. Liberty's banking subsidiaries are subject to limitations with respect to intercompany loans and investments. The ability of Liberty's affiliate banks to pay dividends is restricted. See note 10 to Liberty's consolidated financial statements included in Liberty's annual report to stockholders for the year ended December 31, 1993, which is incorporated herein by reference. The subsidiary banks are subject to the provisions of the National Banking Act, are under the supervision and regulation of, and are subject to periodic examination by, one or more of the Comptroller of the Currency, the Federal Reserve Board, the Office of Thrift Supervision or the Federal Deposit Insurance Corporation ("FDIC"). Under the Act and Regulations of the Federal Reserve Board, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with the extension of credit. Liberty and its subsidiary banks are also subject to the state banking laws of each state in which such a bank is located. These state laws may restrict branching of banks to other counties within the state and acquisition or merger involving banks and bank holding companies located in other states. Kentucky permits nationwide reciprocal interstate banking acquisitions. The Financial Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") placed the savings and loan insurance fund under the control of the FDIC, created the Office of Thrift Supervision in the U.S. Treasury Department and created the Resolution Trust Corporation to act as receiver to liquidate failed thrift institutions. FIRREA further expanded the power of bank holding companies to allow for the acquisition of savings associations and to operate them as separate thrift subsidiaries. FIRREA enhanced the ability of bank holding companies to expand through thrift acquisitions beyond their present geographic interstate banking region. The tandem restrictions placed upon thrift subsidiaries of bank holding companies have been removed allowing linkage of deposit-taking activities and solicitation of deposits and loans on behalf of affiliate companies. FIRREA lead to many structural changes in competition for loans, deposits and other services, affected collateral valuation methods, and the acquisition of financial institutions. The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") requires bank regulators to take specific prompt actions with respect to insured depository institutions that do not meet minimum capital standards. FDICIA establishes five capital tiers: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," and "critically undercapitalized." An insured depository institution that is not "well capitalized" or "adequately capitalized" is prohibited from making capital distributions and may be required to submit a capital plan, restrict asset growth and limit new lines of business. Holding companies are also required to guarantee compliance by their insured depository institutions with any capital plans, subject to certain limits. Significantly and critically undercapitalized insured depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, and cessation of receipt of deposits from correspondent banks. In addition, critically undercapitalized insured depository institutions are subject to appointment of a receiver or conservator. Under FDICIA, an institution that is not well capitalized is generally prohibited from accepting or offering brokered deposits. In addition, "pass- through" insurance coverage may not be available for certain employee benefit accounts. Other provisions included the imposition of specific accounting and reporting requirements and risk-based assessments for FDIC insurance. FDICIA contains numerous other provisions, including termination of the "too big to fail" doctrine except in special cases, limitations on the FDIC's
payment of deposits at foreign branches and revised regulatory standards for, among other things, real estate lending and capital adequacy. The provisions of FDICIA are effective on a staggered basis, with some having already taken effect, while others take effect at various dates over the next few years. Since all the regulations implementing this Act have not been finalized at this time, the full effects of FDICIA on the business of Liberty and its subsidiaries cannot be measured currently. However, this comprehensive legislation may significantly increase deposit insurance premiums and the costs of regulatory compliance for the entire banking industry, including Liberty. The monetary policies of regulatory authorities, including the Federal Reserve Board, have a significant effect on the operating results of banks and bank holding companies. The nature of future monetary policies and the effect of such policies on the future business and earnings of Liberty and its subsidiary banks cannot be predicted.
The following tables set forth selected statistical information with respect to Liberty and its subsidiaries and should be read together with the consolidated financial statements of Liberty.
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL
The schedule captioned "Average Balances and Interest Rates" included on page 13 of Liberty's annual report to stockholders for the year ended December 31, 1993, which is incorporated herein by reference, shows, for each major category of interest earning asset and interest bearing liability, the average amount outstanding, the interest earned or paid on such amount and the average rate earned or paid for each of the years in the three-year period ended December 31, 1993. The schedule also shows the average rate earned on all interest earning assets and the average rate paid on all interest bearing liabilities and the net interest margin (net interest income divided by total average interest earning assets) for each of the years in the three-year period ended December 31, 1993. Nonaccrual loans outstanding were included in calculating the rate earned on loans. Total interest income includes the effects of taxable equivalent adjustments using a tax rate of 35% for 1993 and 34% for 1992 and 1991. The changes in interest income and interest expense resulting from changes in volume and changes in rates for the years ended December 31, 1993 and 1992 are shown in the schedule captioned "Analysis of Changes in Net Interest Income" included on page 6 of Liberty's annual report to stockholders for the year ended December 31, 1993, which is incorporated herein by reference. The change in interest due to both rate and volume has been allocated to change due to volume and change due to rate in proportion to the relationship of the absolute dollar amounts of the change in each. Total interest income includes the effects of taxable equivalent adjustments using a tax rate of 35% for 1993 and 34% for 1992.
INVESTMENT PORTFOLIO
The carrying value of investment securities is summarized as follows:
The maturity distribution and weighted average interest rates of investment securities (exclusive of Federal Reserve Bank, Federal Home Loan Bank and corporate stock) at December 31, 1993 are as follows:
The weighted average interest rates for each maturity category is computed by dividing annualized interest income (net of amortization of premium or accretion of discount) by the carrying value of the respective investment securities. The weighted average rates on obligations of states and political subdivisions are computed on a taxable equivalent basis using a 35% tax rate.
LOAN PORTFOLIO
The composition of loans is summarized as follows:
The following tables show the maturities of loans (excluding real estate - mortgage, consumer and lease financing categories) outstanding as of December 31, 1993 and the amounts due after one year, classified according to the sensitivity to changes in interest rates.
The following table summarizes Liberty's nonaccrual, past due and restructured loans. See note 1 to Liberty's consolidated financial statements included in Liberty's annual report to stockholders for the
year ended December 31, 1993, which is incorporated herein by reference, for a description of Liberty's policy for placing loans on nonaccrual status.
Information with respect to nonaccrual and restructured loans at December 31, 1993 is as follows:
At December 31, 1993, Liberty had $46,983,000 in loans for which payments were current, but the borrowers are currently experiencing financial difficulties. These potential problem loans are subject to continuing management attention and their classification is reviewed on a monthly basis.
SUMMARY OF LOAN LOSS EXPERIENCE
The following table summarizes average loans outstanding; changes in the allowance for loan losses arising from loans charged off and recoveries on loans previously charged off, by loan category; additions to the allowance that have been charged to expense; and other changes:
In determining the annual provision for loan losses charged to expense, senior management considers many factors. Among these are: (1) the quality of the portfolio, (2) previous loss experience, (3) the size and composition of the portfolio, and (4) an assessment of current economic conditions. Also, a quarterly analysis is performed which considers the above factors. In addition, periodic examinations and evaluations by bank regulators and external auditors are considered. An allocation of the allowance for loan losses according to the amount deemed to be reasonably necessary to provide for the possibility of losses being incurred within the following categories of loans at the dates indicated is as follows:
The ratio of loans in each category to total outstanding loans is as follows:
DEPOSITS
The average balance of deposits and average rates paid on such deposits for the years indicated is summarized as follows:
Maturities of time certificates of deposit of $100,000 or more outstanding at December 31, 1993 are summarized as follows:
RETURN ON EQUITY AND ASSETS
The following table presents various key financial ratios:
(a) Includes $0.13 per share special dividend declared December 15, 1993 and paid January 1, 1994 in order to align Liberty's current dividend schedule with the current BANC ONE CORPORATION dividend schedule. See note 2 to Liberty's consolidated financial statements included in Liberty's annual report to stockholders for the year ended December 31, 1993, which is incorporated herein by reference.
SHORT-TERM BORROWING
Federal funds purchased and securities sold under agreements to repurchase generally mature within one to thirteen days from the date of the transaction. The following table shows information relating to federal funds purchased and securities sold under agreements to repurchase.
ITEM 2.

ITEM 2. PROPERTIES
Liberty's investments in premises and equipment are through its subsidiaries. The main offices of Liberty and its principal subsidiary, Liberty Bank, are located at 416 West Jefferson Street, Louisville, Kentucky. Data processing and certain other operations of Liberty Bank are located at 1251 South Fourth Street, Louisville, Kentucky. Both buildings are owned by Investment Realty Company, a wholly-owned subsidiary of Liberty Bank, and occupied entirely by Liberty Bank. In addition, Liberty Bank currently occupies under a long-term lease approximately four floors in a 23-story office building located at One Riverfront Plaza in Louisville, Kentucky. This space is primarily used by Liberty Bank's Retail Banking Group. The Banks also lease a total of approximately 33,000 square feet in five warehouse facilities used to store records and supplies. The Banks lease 44 and own, either directly or indirectly through subsidiaries, 52 of their banking offices. Seven other banking offices are part of land lease arrangements under which the land is leased, but the building thereon is owned. Additionlly, Investment Realty Company has under long-term leases parcels of land and buildings thereon (of which the eight-story Marion E. Taylor office building is one) which are adjacent to the property on which Liberty's main office is located. These leases give Liberty control of the entire block situated between Jefferson and Liberty Streets and bounded by the Fourth Avenue Mall and Fifth Street in Louisville, Kentucky. These leased properties were acquired to fulfill current and future space requirements. Liberty Bank currently occupies all but a portion of two floors in the Marion E. Taylor office building. See note 7 and 12 to Liberty's consolidated financial statements included in Liberty's annual report to stockholders for the year ended December 31, 1993 which is incorporated herein by reference, for
additional information relating to amounts in premises and equipment, and lease commitments.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
In 1989, a jury returned a verdict against Liberty Bank for compensatory damages based on lender liability claims which totaled (net of a judgment in Liberty Bank's favor against the borrower of approximately $2.8 million under a note) approximately $4.2 million. On September 23, 1991, the trial court granted Liberty Bank's motion for a judgment notwithstanding the verdict ("JNOV") thereby overturning the judgment, and conditionally granted Liberty Bank's motion for a new trial if the JNOV was subsequently vacated or reversed on appeal. On March 19, 1993, the Kentucky Court of Appeals issued an opinion vacating the JNOV and the conditional grant of a new trial and remanded the matter to the trial court for proceedings consistent with the opinion. As previously announced, in September 1993 the Kentucky Supreme Court denied Liberty Bank's motion for discretionary review of the Kentucky Court of Appeals decision. In October 1993, Liberty paid the sum of $4,202,458 in damages and $2,007,542 for interest on that amount to settle the matter. Liberty accrued and charged to operations the settlement amount in the third quarter of 1993. All related federal court proceedings were settled at no additional expense to Liberty. See note 13 to Liberty's consolidated financial statements included in Liberty's annual report to stockholders for the year ended December 31, 1993 which is incorporated herein by reference, for additional information relating to legal proceedings.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following paragraphs set forth, for each executive officer of Liberty as of March 1, 1994, each person's name, age, position, business experience during the past five years, and the year the person first became an officer of Liberty or its predecessor. There are no family relationships among executive officers. Kathryn Ross Arterberry, age 37, is Assistant Secretary, Executive Vice President and General Counsel of Liberty Bank and Assistant Secretary and, since 1992, General Counsel of Liberty; she first became an officer of Liberty Bank in 1988, and served as Senior Vice President of Liberty Bank through 1993. John F. Barron, age 42, is Assistant Treasurer of Liberty and Senior Vice President and Assistant Comptroller of Liberty Bank: he first became an officer of Liberty Bank in 1978. Paul E. Bleuel, Jr., age 50, is Senior Vice President and Corporate Planning Officer of Liberty and Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1971. Malcolm B. Chancey, Jr., age 62, is Chairman of the Board, President and Chief Executive Officer of Liberty and Chairman of the Board and Chief Executive Officer of Liberty Bank; he first became an officer of Liberty Bank in 1968. Elisabeth Y. Clark, age 44, is Executive Vice President of Liberty Bank; she first became an officer of Liberty Bank in 1980, and served as Senior Vice President from 1984 through 1993. R. Helm Dobbins, age 42, is Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1978, and served as Senior Vice President from 1981 through 1992. Nathan B. Evans, age 42, is Senior Vice President and Director of Credit Review of Liberty and Senior Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1979. Theodore R. Frith, age 51, is Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1970. Richard R. Galaty, age 49, is Executive Vice President of Liberty Bank; he was Senior Loan Administrator of Union Bank in Los Angeles, California, from 1981 to 1989; Senior Credit Administrator of First Interstate Bancorp in Los Angeles from 1989 to 1991; and Chief Credit Officer of First Interstate Bank in Denver, Colorado, from 1991 to 1993, when he joined Liberty Bank. Terry D. Gardner, age 43, is Senior Vice President of Liberty Bank and, since 1993, Senior Vice President and Auditor of Liberty and Senior Auditor
of Liberty Bank; he first became an officer of Liberty Bank in 1987 and served as Auditor of Liberty Bank through 1993. Maria I. Gerwing, age 46, is Executive Vice President of Liberty Bank; she first became an officer of Liberty Bank in 1974, and served as Senior Vice President from 1979 through 1991. R. K. Guillaume, age 50, is Executive Vice President of Liberty and President of Liberty Bank; he first became an officer of Liberty Bank in 1968. Ronald M. Holt, age 46, has served as Executive Vice President of Liberty Bank since 1990; he served as Director and Executive Vice President of First American Trust Company in Nashville, Tennessee from 1986 until 1990, when he joined Liberty Bank. John P. Knight, Jr., age 49, is Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1969, and served as Senior Vice President from 1978 through 1991. James T. McKenzie, age 44, is Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1972, and served as Senior Vice President of Liberty Bank through 1993. Carl R. Page, age 45, is Secretary of Liberty and Liberty Bank and Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1976. Bruce W. Raque, age 41, is Assistant Treasurer and Tax Officer of Liberty and is Senior Vice President and Assistant Comptroller of Liberty Bank; he first became an officer of Liberty Bank in 1981. W. LeGrande Rives, age 53, is Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1989. Jack H. Shipman, age 57, is Executive Vice President of Liberty and Liberty Bank; he first became an officer of Liberty Bank in 1970. Hugh M. Shwab III, age 56, is Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1970. John Y. Van Bibber, age 63, is Executive Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1964. Carl E. Weigel, age 62, is Treasurer and Chief Financial Officer of Liberty, Executive Vice President and Comptroller of Liberty Bank and has served since 1990 as Cashier of Liberty Bank; he first became an officer of Liberty Bank in 1974. Russell B. Zaino, age 45, is Senior Vice President and Chief Regulations Compliance Officer of Liberty and Senior Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1976. Kevin M. Zemanski, age 35, is Credit Policy Adminstration/Consumer Compliance Officer of Liberty, served from 1988 to 1992 as Consumer Compliance Officer of Liberty, and is Senior Vice President of Liberty Bank; he first became an officer of Liberty Bank in 1986.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information captioned "Market Data" included on page 14 of Liberty's annual report to stockholders for the year ended December 31, 1993 is incorporated herein by reference.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The information captioned "Consolidated Selected Financial Data" included on page 14 of Liberty's annual report to stockholders for the year ended December 31, 1993 is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Management's Discussion and Analysis included on pages 4 through 13 of Liberty's annual report to stockholders for the year ended December 31, 1993 is incorporated herein by reference.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of Liberty and report of independent auditors included on pages 16 through 35 in Liberty's annual report to stockholders for the year ended December 31, 1993 are incorporated herein by reference:
Consolidated balance sheet
Consolidated statement of income Consolidated statement of changes in stockholders' equity Consolidated statement of cash flows Notes to consolidated financial statements Report of independent auditors
The information captioned "Quarterly Results of Operations" included on page 15 of Liberty's annual report to stockholders for the year ended December 31, 1993 is incorporated herein by reference.
ITEM 9.

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

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information appearing in the section entitled "Board of Directors and Executive Officers" in Liberty's Proxy Statement is incorporated herein by reference. In addition, information with respect to Liberty's executive officers is contained in Part I of this report.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The information appearing in the section entitled "Executive Compensation" in Liberty's Proxy Statement is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information appearing in the sections entitled "Principal Shareholders" and "Board of Directors and Executive Officers" in Liberty's Proxy Statement is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing in the section entitled "Board of Directors and Executive Officers" in Liberty's Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) List of Financial Statements filed
The following consolidated financial statements of Liberty and report of independent auditors included in Liberty's annual report to stockholders for the year ended December 31, 1993 were incorporated by reference in Part II, Item 8 of this report:
Consolidated balance sheet Consolidated statement of income Consolidated statement of changes in stockholders' equity Consolidated statement of cash flows Notes to consolidated financial statements Report of independent auditors
(a) (2) List of Financial Statement Schedules filed
Schedules to the consolidated financial statements required by Article 9 of Regulation S-X are not required under the related instructions or are inapplicable and therefore have been omitted.
(a) (3) List of Exhibits filed
(3.1) Liberty's Amended and Restated Articles of Incorporation are incorporated herein by reference to Exhibit (3) to Liberty's Quarterly Report on Form 10-Q for the quarter ended March 31, 1993.
(3.2) Liberty's Bylaws are incorporated herein by reference to Exhibit (3) (b) to Liberty's Annual Report on Form 10-K for the year ended December 31, 1988.
(4.1) Rights Agreement dated August 19, 1992, between Liberty National Bancorp, Inc., and Chemical Bank is incorporated by reference to Exhibits 4 and 10.1 to Liberty's Current Report on Form 8-K dated August 19, 1992.
(4.2) First Amendment dated as of November 2, 1993, to the Rights Agreement dated August 19, 1992, between Liberty National Bancorp, Inc., and Chemical Bank is incorporated by reference to Exhibit 4.1 to Liberty's Current Report on Form 8-K dated November 2, 1993.
(4.3) Instruments defining the rights of holders of long-term debt of Liberty and its subsidiaries are not filed as Exhibits because the amount of debt under each instrument is less than 10% of the consolidated assets of Liberty. Liberty undertakes to file these instruments with the United States Securities and Exchange Commission (the "Commission") upon request.
(10.1) Liberty National Bank and Trust Company Compensation Deferral Plan is incorporated herein by reference to Exhibit (10.1) to Liberty's Quarterly Report on Form 10-Q for the quarter ended March 31, 1993.
(10.2) Liberty National Bank and Trust Company Excess Benefit Plan is incorporated herein by reference to Exhibit (10.2) to Liberty's Quarterly Report on Form 10-Q for the quarter ended March 31, 1993.
(10.3) Liberty National Bancorp, Inc., Management Incentive Compensation Plan amended and restated as of January 1992 is incorporated herein by reference to Exhibit (10) (c) to Liberty's Annual Report on Form 10-K for the year ended December 31, 1991.
(10.4) Amendment No. 1 to Liberty National Bancorp, Inc., Management Incentive Compensation Plan, as amended and restated as of January 1992, as amended as of December 1993 is incorporated herein by reference to Exhibit 10.5 to Liberty's Form S-8 Registration Statement No. 33-52275.
(10.5) Form of Officer Compensation Continuation Agreement between Liberty and certain officers of Liberty and the Banks, as amended, is incorporated herein by reference to Exhibit (10) (e) to Liberty's Annual Report on Form 10-K for the year ended December 31, 1989.
(10.6) Credit Agreement dated as of June 18, 1992 among Liberty National Bancorp, Inc., and The Chase Manhattan Bank (National Association), as Initial Bank and Agent, is incorporated herein by reference to Exhibit (10) to Liberty's Quarterly Report on Form 10-Q for the quarter ended June 30, 1992.
(10.7) Liberty National Bancorp, Inc., 1986 Stock Option Plan As Amended and Restated as of January 10, 1990, and as further Amended February 16, 1993, is incorporated herein by reference to Exhibit (10) (f) to Liberty's Annual Report on Form 10-K for the year ended December 31, 1992.
(10.8) First Federal Savings Bank 1992 Stock Option Plan is incorporated herein by reference to Exhibit 10.1 to Liberty's Form S-8 Registration Statement No. 33-52275.
(11) Statement regarding the computation of per share earnings.
(13) Portions of the annual report to stockholders for the year ended December 31, 1993 which are expressly incorporated by reference in this filing.
(21) Subsidiaries of Liberty.
(23) Consent of Coopers & Lybrand.
(99.1) Annual report on Form 11-K for The Liberty 1992 Restated Thrift Plan for the year ended December 31, 1993, as authorized by
Rule 15d-21. Plan financial statements are filed in paper under cover of Form SE, as allowed by Rule 311 of Regulation S-T.
(99.2) Undertakings.
(b) Reports on Form 8-K
Liberty filed the following report on Form 8-K during the three month period ended December 31, 1993:
A Form 8-K dated November 2, 1993 was filed with the Commission relating to the announcement by Liberty and BANC ONE CORPORATION that they have signed an agreement for the merger of Liberty with an affiliate of BANC ONE CORPORATION.
(c) Exhibits
The exhibits listed in response to Item 14(a)(3) are filed as part of this report.
(d) Financial Statement Schedules
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Liberty has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
LIBERTY NATIONAL BANCORP, INC. (Registrant)
March 16, 1994 By: /s/ MALCOLM B. CHANCEY, JR. --------------------------- MALCOLM B. CHANCEY, JR. Chairman of the Board, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Liberty and in the capacities and on the dates indicated.
Chairman of the Board, President and Director (Principal /s/ MALCOLM B. CHANCEY, JR. Executive Officer) March 16, 1994 - --------------------------- Malcolm B. Chancey, Jr.
Executive Vice President /s/ R. K. GUILLAUME and Director March 16, 1994 - --------------------------- R. K. Guillaume
Treasurer (Principal Financial /s/ CARL E. WEIGEL and Accounting Officer) March 16, 1994 - --------------------------- Carl E. Weigel
/s/ JOHN F. BARRON Assistant Treasurer March 16, 1994 - --------------------------- John F. Barron
/s/ STANLEY S. DICKSON Director March 16, 1994 - --------------------------- Stanley S. Dickson
/s/ C. H. DISHMAN III Director March 16, 1994 - --------------------------- C. H. Dishman III
/s/ WALLACE H. DUNBAR Director March 16, 1994 - --------------------------- Wallace H. Dunbar
/s/ OWSLEY BROWN FRAZIER Director March 16, 1994 - --------------------------- Owsley Brown Frazier
/s/ GEORGE E. GANS III Director March 16, 1994 - --------------------------- George E. Gans III
Director March , 1994 - --------------------------- George N. Gill
Director March , 1994 - --------------------------- Frank B. Hower, Jr.
/s/ NANCY LAMPTON Director March 16, 1994 - --------------------------- Nancy Lampton
/s/ LEONARD E. LYLES Director March 16, 1994 - --------------------------- Leonard E. Lyles
/s/ MARTIN S. MARGULIS Director March 16, 1994 - --------------------------- Martin S. Margulis
/s/ JAMES W. MCDOWELL, JR. Director March 16, 1994 - --------------------------- James W. McDowell, Jr.
/s/ JOHN C. NICHOLS II Director March 16, 1994 - --------------------------- John C. Nichols II
/s/ GOUVERNEUR H. NIXON Director March 16, 1994 - --------------------------- Gouverneur H. Nixon
/s/ JOSEPH W. PHELPS Director March 16, 1994 - --------------------------- Joseph W. Phelps
/s/ CYRUS S. RADFORD, JR. Director March 16, 1994 - --------------------------- Cyrus S. Radford, Jr.
/s/ MAX L. SHAPIRA Director March 16, 1994 - --------------------------- Max L. Shapira
/s/ ROBERT L. TAYLOR Director March 16, 1994 - --------------------------- Robert L. Taylor EXHIBIT INDEX