-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XrONjpanlfUojjZTHsFJZvLH7rpXeseeEhNeZKW3KUK/RydrEANk6LijNkbOb98r CxYw85+0XROm+qQ86X/zXA== 0000005016-94-000029.txt : 19940513 0000005016-94-000029.hdr.sgml : 19940513 ACCESSION NUMBER: 0000005016-94-000029 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN FINANCIAL CORP CENTRAL INDEX KEY: 0000005016 STANDARD INDUSTRIAL CLASSIFICATION: 6331 IRS NUMBER: 310624874 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07361 FILM NUMBER: 94525489 BUSINESS ADDRESS: STREET 1: ONE E 4TH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135792121 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 to Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended Commission File December 31, 1993 No. 1-7361 AMERICAN FINANCIAL CORPORATION Incorporated under IRS Employer I.D. the Laws of Ohio No. 31-0624874 One East Fourth Street, Cincinnati, Ohio 45202 (513) 579-2121 Securities Registered Pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on which Registered Nonvoting Cumulative Preferred Stock: Series E, F and G Cincinnati and Pacific 9-1/2% Debentures due April 22, 1999 Cincinnati and Pacific 10% Debentures due October 20, 1999 Cincinnati and Pacific 10% Debentures Series A due October 20, 1999 Cincinnati and Pacific 12% Debentures due September 3, 1999 Cincinnati and Pacific 12% Debentures Series A due September 3, 1999 Cincinnati and Pacific 12% Debentures Series B due September 3, 1999 Cincinnati and Pacific 12-1/4% Debentures due September 15, 2003 Cincinnati and Pacific 13-1/2% Debentures due September 14, 2004 Cincinnati and Pacific 13-1/2% Debentures Series A due September 14, 2004 Cincinnati and Pacific Securities Registered Pursuant to Section 12(g) of the Act: None 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, 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 need 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. [X] As of March 1, 1994, there were 18,971,217 shares of Common Stock outstanding, all of which were privately owned. Documents Incorporated by Reference: None PART III ITEM 11 Executive Compensation Compensation The following table shows the aggregate compensation earned (in thousands) for 1993, 1992 and 1991 from AFC and its subsidiaries by AFC's Chief Executive Officer and AFC's four other most highly compensated executive officers.
Annual Compensation Long Term Name and Other Annual Stock Incentive Principal Position Year Salary Bonus Compensation (1)Options(2) Payouts (3) Other (4) Carl H. Lindner 1993 $1,649 $2,083 $200 --- --- $117 Chairman & Chief 1992 1,816 2,700 260 --- --- 114 Executive Officer 1991 1,244 1,700 158 --- --- of AFC & Subsidiaries Ronald F. Walker, 1993 801 1,250 70 --- --- 93 President & Chief 1992 1,336 2,075 81 --- $8,806 181 Operating Officer 1991 901 900 89 --- 1,046 of AFC Carl H. Lindner III, 1993 1,071 1,389 165 --- --- 88 President of GAI & 1992 1,514 1,825 171 --- 5,478 73 American Premier 1991 1,455 1,950 271 --- 4,421 S. Craig Lindner, President of AAG and 1993 1,535 2,200 74 --- --- 88 Sr. Exec. Vice President 1992 1,529 1,500 106 --- 5,478 99 of AMM 1991 1,452 2,000 83 --- 4,421 James E. Evans 1993 960 400 3 --- --- 64 Vice President & 1992 892 550 35 --- 2,264 90 General Counsel of AFC 1991 959 460 33 --- 73 ===========================================
(1) This column includes amounts for (i) personal homeowners and automobile insurance coverage, (ii) the use of corporate aircraft, automobiles and housing, and (iii) interest (in excess of 9%) paid on deferred compensation. Carl H. Ronald F. Carl H. S. Craig James E. Lindner Walker Lindner III Lindner Evans 1993 Insurance $ 10 --- $ 15 $ 19 --- Aircraft, etc. 190 $ 70 150 55 $ 3 Interest --- --- --- --- --- 1992 Insurance 11 --- 7 17 --- Aircraft, etc. 249 81 164 89 2 Interest --- --- --- --- 33 1991 Insurance 11 2 20 15 --- Aircraft, etc. 147 87 251 68 5 Interest --- --- --- --- 28 (2) No options were granted by the Registrant. For information concerning options and stock appreciation rights ("SARs") granted by subsidiaries of the Registrant to the above named individuals, see the table headed "Option/SAR Grants in 1993" below. 46 (3) The amounts in this column are payments made pursuant to exercises of Book Value Incentive Plan Units. During 1992, AFC accelerated all payments under the Plan due to named persons, paying the present value of the amounts due approximately 1/3 in cash and 2/3 in value of an AFC 12% debenture due 1999. (4) This column includes amounts for (i) directors fees, (ii) Employee Stock Ownership/Retirement Plan contributions, (iii) savings plans of subsidiaries, (iv) retirement plans of subsidiaries, and (v) term life insurance premiums. Carl H. Ronald F. Carl H. S. Craig James E. Lindner Walker Lindner III Lindner Evans 1993 Directors fees $ 19 $ 20 --- $ 57 $ 33 ESORP 30 30 $ 30 30 30 Savings Plans --- --- --- --- --- Retirement Plans 58 40 57 --- --- Term Life 10 3 1 1 1 1992 Directors fees 7 20 --- 68 59 ESORP 30 30 30 30 30 Savings Plans --- 9 --- --- --- Retirement Plans 66 120 43 --- --- Term Life 11 2 --- 1 1 The amounts of annual compensation in the above table do not include amounts paid to individuals by companies for periods during which they were not subsidiaries of AFC. Several AFC executives serve on the boards of directors and as executive officers of corporations in which AFC has a significant investment. Directors' fees, salaries, and other compensation paid by certain of those corporations (other than subsidiaries of AFC) to such AFC executives are not included in the Compensation Table. In 1993, AFC paid Keith E. Lindner salary, bonus and other compensation aggregating approximately $2.1 million and made payments in 1993 in connection with the exercise of Book Value Incentive Units amounting to $595,000. AFC conducts its business throughout the world which requires AFC executives to travel frequently. As a result, certain AFC subsidiaries operate and lease corporate aircraft. To assure security and to minimize travel time, AFC requires or encourages certain executives and their families to utilize the corporate aircraft for personal travel. AFC does not incur any significant additional costs by virtue of personal use of such aircraft by executives and reports such use as additional compensation for income tax purposes. Directors who are not also AFC officers (Richard E. Lindner) receive directors' fees at the rate of $50,000 annually plus $2,000 for each meeting of the Board. Compensation Committee Interlocks and Insider Participation Prior to September 1992, the Audit Committee, comprised of former director Charles E. Woodruff and Ronald F. Walker, recommended the compensation of the Chief Executive Officer to be received by him from AFC and certain of its wholly-owned subsidiaries. Since September 1992, the Board of Directors has determined the compensation of the Chief Executive Officer. The Executive Committee determines the compensation of other executive officers of AFC. Compensation received by the Chief Executive Officer from other public reporting subsidiaries is determined by the Boards of Directors or committees thereof of such companies. 47 The members of AFC's Board are Carl H. Lindner, Ronald F. Walker, Robert D. Lindner and Richard E. Lindner. The first three serve as the Executive Committee and are executive officers of AFC. Carl H. Lindner and Ronald F. Walker are also members of the Boards of Directors of certain of AFC's subsidiaries. Mr. Walker is a member of the Compensation/Stock Option Committee of AFEI and a similar committee of American Annuity Group, Inc. Carl H. Lindner is a member of the Boards of Directors and an executive officer of AFEI and American Annuity Group, Inc. Carl H. Lindner and Mr. Walker have had transactions with AFC and its subsidiaries which are described under Item 13 "Certain Relationships and Related Transactions". Option/SAR Information Certain executive officers of AFC also serve as executive officers of AFC subsidiaries and were granted employee stock options or SARs by such subsidiaries. Information with respect to such option/SAR grants is included in the following tables. OPTION/SAR GRANTS IN 1993
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option/SAR Term Individual Grants (4) (In Thousands) Percent of Total Options/ Options/ SARs SARs Granted Granted To Stock (1) Grantors' Exercise Covered (# of Employees Price (2) Expiration Name by Option/SAR Shares) in 1993 ($/Share) Date (3) 5% 10% Carl H. Lindner American Premier 50,000 11.5% $28.19 02/06/2003 $ 887 $2,247 General Cable 1,000 -- 3.63 06/04/2003 2 5 Ronald F. Walker -- -- -- -- -- -- -- Carl H. Lindner III American Premier 105,000 24.1% 28.19 02/06/2003 1,863 4,719 S. Craig Lindner American Annuity 125,000 22.7% 9.00 03/26/2003 911 2,117 American Premier 1,000 -- 31.38 06/04/2003 20 50 General Cable 1,000 -- 3.63 06/04/2003 2 5 James E. Evans American Premier 1,000 -- 31.38 06/04/2003 20 50
(1) The American Premier options and American Annuity SARs generally become exercisable to the extent of 20% per year, beginning one year from the date of grant. The General Cable options are fully exercisable at the date of grant. (2) For American Premier and General Cable options, exercise price represents the fair market value of the respective common stocks on the date of grant. The American Annuity SARs were granted at an initial grant price of $9.00. Thereafter, the grant price for SARs equals the average of the high and low sales prices for shares of AAG Common Stock for the ten consecutive trading days immediately preceding the date of grant. The closing market price of AAG Common Stock on March 26, 1993, (date of S. Craig Lindner's grant) was $10.00. 48 (3) The options are subject to earlier termination in case of termination of employment. (4) For options and SARs, potential realizable values represent the hypothetical future values that would be realizable if all of the options and SARs were exercised immediately prior to their respective expiration dates and the market price of common stock had appreciated in value at the annual rates indicated. Such hypothetical future values have not been discounted to their respective present values, which are lower. OPTION/SAR EXERCISES IN 1993 AND OPTION/SAR VALUES AT DECEMBER 31, 1993(1)
Value of Unexercised in-the-Money Options/SARs Number of at December 31, 1993 Unexercised (2) Stock Options/SARs ($) Covere Shares Value at December 31, 1993 d Acquir Realized (# of Shares) (In Thousands) by ed (2) Exercisable Unexercisable Exercisable UnexercisableOptionon(In / Exerci Thousand Name SAR se s) Carl H. Lindner -- -- -- -- -- -- -- Ronald F. Walker AFEI -- -- 7,500 -- $34 -- Carl H. Lindner III -- -- -- -- -- -- -- S. Craig Lindner AAG -- -- -- 125,000 -- $125 James E. Evans AFEI -- -- 107,000 8,000 629 40
(1) Option/SAR exercises and year-end values are shown only for companies which were subsidiaries at the date of exercise or at the valuation date. (2) Represents market value of the underlying Common Stock on date of exercise or December 31, 1993, minus the option/SAR exercise price. Share prices as of December 31, 1993, were as follows: AFEI - $27.00 per share (PSE) AAG - 10.00 per share (NYSE) 49 ITEM 12 Security Ownership of Certain Beneficial Owners and Management Beneficial ownership has been computed pursuant to Securities and Exchange Commission Regulation 13d-3 under the Securities Exchange Act of 1934. Under that regulation, a person is deemed to own a security beneficially if he has (or shares) the power to vote the security or to dispose of it. Moreover, a person is deemed to own a security beneficially if he has the right to acquire it within 60 days. Under these rules, more than one person may be deemed the beneficial owner of the same security. The following table sets forth information concerning those persons who beneficially own more than 5% of AFC's Common Stock, its only voting security, as of March 31, 1994: Number of Percent of Name Shares Common Stock Carl H. Lindner (A) 7,749,210 40.9% Carl H. Lindner III (B) 2,836,625 15.0% S. Craig Lindner (C) 2,701,460 14.2% Keith E. Lindner (D) 4,065,958 21.4% Lindvest, an Ohio Partnership (E) 1,533,767 8.1% (A) Includes 678,870 shares held by his wife. (B) Includes 12,500 shares held by his wife. (C) Includes 42,179 shares held by his wife individually and as custodian of their minor children. (D) Includes 920,742 shares he holds as trustee for the benefit of certain members of his family. Also included are 12,500 shares which may be acquired through the exercise of stock options which he holds and 25,000 shares which may be acquired through the exercise of stock options he holds as trustee. (E) The general partners of Lindvest are Robert D. Lindner, Jr., Jeffrey S. Lindner, A. Bradford Lindner and David C. Lindner, all of whom are sons of Robert D. Lindner. The above table does not reflect that Robert D. Lindner also owns an option to purchase 462,500 shares of AFC Common Stock which represents approximately 2.4% of AFC's Common Stock. The business address of the persons named above is One East Fourth Street, Cincinnati, Ohio 45202; the business address of Lindvest is 3955 Montgomery Road, Cincinnati, Ohio 45212. 50 The following table sets forth information concerning equity securities of AFC and certain of its affiliates beneficially owned by each of the directors and by all directors and officers as a group on March 31, 1994.
AFC AFEI AAG Common AFC Preferred StockCommon Common Stock Series E Series F Stock Stock Carl H. Lindner (A) 7,749,210 -- -- -- -- 40.9% Richard E. Lindner -- -- -- -- -- Robert D. Lindner (B) 462,500 -- -- 9,500 -- 2.4% * Ronald F. Walker (C) -- -- -- 7,500 5,000 * * All directors and officers as a group (D) 13,749,795 1,469 20,256 592,300 6,051 70.8% * * 4.3% * *Less than 1%.
(A) Includes 678,870 shares of AFC Common Stock held by his wife. Does not include shares of AFEI and AAG Common Stock beneficially owned by AFC. (B) Represents shares of AFC Common Stock and AFEI Common Stock which may be acquired upon exercise of stock options. (C) Includes 7,500 shares of AFEI Common Stock which may be acquired upon exercise of stock options. (D) Includes 733,549 shares of AFC Common, 16,312 shares of AFC Series F Preferred, 42,714 shares of AFEI Common Stock and 1,000 shares of AAG Common Stock held beneficially. Includes 462,500 shares of AFC Common Stock and 420,000 shares of AFEI Common Stock which may be acquired upon exercise of stock options. 51 ITEM 13 Certain Relationships and Related Transactions AFC and its subsidiaries have had and expect to continue to have trans- actions with AFC's directors, officers and members of their families. The financial terms (costs, interest rates, collateral, risks of collectibility and other) of these transactions are comparable to those prevailing at the time of consummation which would apply to unrelated parties, unless noted otherwise. Asset Transactions GAI and its subsidiaries had a loan outstanding since 1978 to a partnership that includes as a partner the wife of Robert C. Lintz. The loan bore interest at 9-1/2% and was secured by a first mortgage on investment property. Mrs. Lintz was contingently liable for 25% of the loan, the highest balance of which during 1993 was $2,648,000; the loan was paid off in the first quarter of 1994. In connection with the sale of investment securities in 1991 to seven employees, including all executive officers except the Lindners, AFC received three- and five-year unsecured notes bearing interest at 7%. The highest balances due from each of these officers owing more than $60,000 at any time since January 1, 1993, for the purchase of securities, and the balances due at April 1, 1994, were: Evans - ($85,000 and $85,000); Heimann ($85,000 and $-0-); and Walker ($85,000 and $-0-). In connection with the completion of GACC's plan of reorganization on December 28, 1993, AFC received 2.3 million shares of new GACC Common Stock in exchange for AFC's previous holdings of GACC stock and debt. On that same date, AFC contributed $7.5 million of new capital in GACC in exchange for $6,339,200 principal amount of 14% notes at par value and 94,837 shares of GACC Common at $12.24 per share (the anticipated value of shares to be distributed as disclosed in the bankruptcy court documents). Subsequently, on December 28, 1993, AFC sold 170,995 shares of unregistered, restricted GACC Common (including the 94,837 shares just purchased) to officers of AFC and GACC and their subsidiaries at $12.24 per share in cash and notes. This transaction included cash sales to the following AFC executive officers: Evans - 20,000 shares; Heimann - 20,000 shares; Lintz - 20,000 shares; Mischell - 10,994 shares; Runk - 20,001 shares; and Walker - 20,000 shares. The closing price of registered, unrestricted shares on this first day of trading in the new GACC shares was $16.75 per share. Liability Transactions In connection with a 1984 purchase and leaseback agreement between a former investee and a partnership in which Carl H. Lindner and his sons are partners, AFC guaranteed the principal and interest on the partnership's $23.6 million note to the former investee. In 1993, the terms of the note and guarantee were amended to eliminate the personal liability of the partnership and its partners and to release AFC from its guarantee. During 1993, AFC made principal payments aggregating $3 million on installment notes related to a "put" executed in 1989 under an agreement with certain members of the Robert D. Lindner family. The balance of the notes was $3 million at December 31, 1993. (See "Capital Subject to Put Option" in Note I of Notes to Consolidated Financial Statements). 52 At March 31, 1994, the holders of AFC's Common Stock also owned a majority of the common stock of Provident Bancorp, Inc., parent of The Provident Bank ("Provident"). In 1991, Provident assumed a $5 million loan to an AFC resort real estate subsidiary from an unrelated bank. The loan was repaid in 1994. Operations (Income/Expense) Transactions Subsidiaries of Provident make loans and provide trust, securities brokerage and other miscellaneous banking services to AFC and its subsidiaries. AFC and its subsidiaries provide various services to Provident including appraisals of real estate and personal property and security guard and insurance agency services. Provident also leases its main banking and corporate offices from AFC subsidiaries. Facilities and services provided by AFC for which charges exceeded $60,000 in 1993 were as follows: approximately $1,076,000 for the lease of Provident's main banking and corporate offices, $284,000 for travel related services, $68,000 for payroll processing services and $100,000 for security guard services. During 1993, AFC paid a Bancorp subsidiary $85,000 for securities brokerage services. In 1993, AFC and subsidiaries purchased automobiles, automobile repairs and other merchandise used in AFC's business from various businesses owned by relatives of Sandra W. Heimann for amounts aggregating approximately $159,000. During 1993, GAI leased an aircraft from a company owned by members of the Richard E. Lindner family. GAI made lease payments of $480,000 under a one-year agreement renewable at GAI's option. GAI also pays its proportionate share of actual costs incurred for personnel, fuel and other related items, based on actual usage. 53 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, duly authorized. AMERICAN FINANCIAL CORPORATION BY:s/Fred J. Runk Fred J. Runk Vice President and Treasurer Dated: April 29, 1994 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, duly authorized. AMERICAN FINANCIAL CORPORATION BY: Fred J. Runk Vice President and Treasurer Dated: April 29, 1994 -----END PRIVACY-ENHANCED MESSAGE-----