-----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, EMwMTsiQ2SMqRAGVxKQuwmTV3jRg/oaBYGbhoU8DTr7VnMOssrbAGmRsBIrcC/fe USgC/tXNownQ8OCm1qHsFw== 0000943523-95-000018.txt : 19950502 0000943523-95-000018.hdr.sgml : 19950502 ACCESSION NUMBER: 0000943523-95-000018 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950501 SROS: CSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN FINANCIAL CORP CENTRAL INDEX KEY: 0000005016 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 310624874 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-07361 FILM NUMBER: 95533362 BUSINESS ADDRESS: STREET 1: ONE E 4TH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135792121 10-K405/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, 1994 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 ---------------------------------------------------------------------- This Form 10-K/A provides information required by Items 11, 12 & 13 of Form 10-K. ---------------------------------------------------------------------- PART III ITEM 11 Executive Compensation Compensation The following table shows the aggregate compensation earned (in thousands) for 1994, 1993 and 1992 from AFC and its subsidiaries by AFC's Chief Executive Officer and AFC's four other most highly compensated executive officers.
Annual Compensation ------------------------ Other Annual Long Term Other Name and Compensa- Stock Incentive Compen- Principal Position Year Salary Bonus tion(1) Options(2) Payouts(3) sation(4) Carl H. Lindner 1994 $1,129 $2,050 $143 --- --- $ 40 Chairman & Chief 1993 1,649 2,083 200 --- --- 117 Executive Officer 1992 1,816 2,700 260 --- --- 114 of AFC & Subsidiaries Ronald F. Walker 1994 1,067 1,575 30 --- --- 53 President & Chief 1993 801 1,250 70 --- --- 93 Operating Officer 1992 1,336 2,075 81 --- $8,806 181 of AFC Carl H. Lindner III 1994 529 784 13 --- --- 31 President of GAI & 1993 1,071 1,389 165 --- --- 88 American Premier 1992 1,514 1,825 171 --- 5,478 73 S. Craig Lindner 1994 1,570 1,350 106 --- --- 31 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 James E. Evans 1994 1,019 850 1 --- --- 31 Vice President & 1993 960 400 3 --- --- 64 General Counsel of AFC 1992 892 550 35 --- 2,264 90 =========================================== -48- (1) This column includes amounts for (i) personal homeowners and automobile insurance coverage, (ii) the use of corporate aircraft, automobiles and housing, and (iii) excess interest paid on deferred compensation. Carl H. Ronald F. Carl H. S. Craig James E. Lindner Walker Lindner III Lindner Evans 1994 Insurance $ 10 --- $ 13 --- --- Aircraft, etc. 133 $ 30 --- $106 $ 1 1993 Insurance 10 --- 15 19 --- Aircraft, etc. 190 70 150 55 3 1992 Insurance 11 --- 7 17 --- Aircraft, etc. 249 81 164 89 2 Interest --- --- --- --- 33 (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 1994" below. (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. -49- (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 1994 Directors fees --- $ 20 --- --- --- ESORP $ 30 30 $ 30 $ 30 $ 30 Savings Plans --- --- --- --- --- Retirement Plans --- --- --- --- --- Term Life 10 3 1 1 1 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
-50- 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 1994, AFC paid Keith E. Lindner salary, bonus and other compensation aggregating approximately $2,199,000 and made payments in 1994 in connection with the exercise of Book Value Incentive Units amounting to $666,000. 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 $2,000 for each meeting of the Board. Compensation Committee Interlocks and Insider Participation Prior to September 1992, the Audit Committee, comprised of former director Charles E. Woodruff and Ronald F. Walker, recommended the compensation of the Chief Executive Officer to be received by him from AFC and certain of its wholly-owned subsidiaries. Since September 1992, the Board of Directors has determined the compensation of the Chief Executive Officer. The Executive Committee determines the compensation of other executive officers of AFC. Compensation received by the Chief Executive Officer from other public reporting subsidiaries is determined by the Boards of Directors or committees thereof of such companies. The members of AFC's Board are Carl H. Lindner, Ronald F. Walker, Robert D. Lindner and Richard E. Lindner. The first three serve as the Executive Committee and are executive officers of AFC. Carl H. Lindner and Ronald F. Walker are also members of the Boards of Directors of certain of AFC's subsidiaries. Mr. Walker is a member of the Compensation/Stock Option Committee of AFEI and a similar committee of American Annuity Group, Inc. Carl H. Lindner is a member of the Boards of Directors and an executive officer of AFEI and American Annuity Group, Inc. Certain directors have had transactions with AFC and its subsidiaries which are described under Item 13 "Certain Relationships and Related Transactions". -51- Option/SAR Information Certain executive officers of AFC also serve as executive officers of AFC subsidiaries and were granted employee stock options or SARs by such subsidiaries. Information with respect to such option/SAR grants to individuals named in the compensation table is included below.
OPTION/SAR GRANTS IN 1994 Individual Grants Options/ Percent SARs of Total Granted Options/ Stock (1) SARs Exercise Covered (# of Granted Price (2) Expiration Name by Option/SAR Shares) in 1994 ($/Share) Date(3) Carl H. Lindner -- -- -- -- -- Ronald F. Walker American Annuity 10,000 1.5% $9.62 03/02/2004 Carl H. Lindner III -- -- -- -- -- S. Craig Lindner American Annuity 175,000 26.8% 9.62 03/02/2004 James E. Evans -- -- -- -- -- Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option/SAR Term (4) 5% 10% Carl H. Lindner -- -- Ronald F. Walker $ 56,427 $ 146,834 Carl H. Lindner III -- -- S. Craig Lindner 987,472 2,569,585 James E. Evans -- -- -52- (1) The American Annuity SARs generally become exercisable to the extent of 20% per year, beginning one year from the date of grant. (2) The American Annuity SARs are granted at a grant price equal to the average of the means between the high and low sales prices for shares of AAG Common Stock for the ten consecutive trading days immediately preceding the date of grant. (3) The SARs 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 1994 AND OPTION/SAR VALUES AT DECEMBER 31, 1994(1) Value of Unexercised Stock Number of in-the-Money Options/SARs Covered Shares Unexercised Options/SARs at December 31, 1994 by Acquired Value at December 31, 1994 (2) Option/ on Realized (# of Shares) ($) Name SAR Exercise (2) Exercisable Unexercisable Exercisable Unexercisable Carl H. Lindner -- -- -- -- -- -- -- Ronald F. Walker AAG -- -- -- 10,000 -- $ 0 AFEI -- -- 7,500 -- $ 5,625 -- Carl H. Lindner III -- -- -- -- -- -- -- S. Craig Lindner AAG -- -- 25,000 275,000 15,500 62,000 James E. Evans AFEI -- -- 115,000 -- 237,500 -- (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, 1994, minus the option/SAR exercise price. Share prices as of December 31, 1994, were as follows: AFEI - $23.25 per share (PSE) AAG - 9.62 per share (NYSE)
-53- ITEM 12 Security Ownership of Certain Beneficial Owners and Management On April 3, 1995, AFC was merged with a newly formed subsidiary of American Premier Group, Inc. ("APG"), another new company formed to own 100% of the common stock of both AFC and American Premier Underwriters, Inc. ("American Premier"). In the transaction, Carl H. Lindner and members of his family, who owned 100% of the common stock of AFC, exchanged their AFC Common Stock for approximately 55% of APG voting common stock. Holders of AFC Series F and G Preferred Stock were granted voting rights equal to approximately 21% of the total voting power of AFC shareholders immediately prior to the merger. As of April 15, 1995, the only persons known to own beneficially more than five percent of any class of outstanding voting securities of AFC are:
Amount and Name and Address of Nature of Percent Beneficial Owner Title of Class Ownership Of Class American Premier Group Common Stock 19,733,717 100% One East Fourth Street Cincinnati, Ohio 45202 American Financial Corp. Series F Preferred 8,375,724 Employee Stock Ownership/ Series G Preferred 76,900 Retirement Plan 8,452,624 59.9% One East Fourth Street Cincinnati, Ohio 45202
-54- The following table sets forth information concerning equity securities of AFC and the affiliates shown beneficially owned by each of the directors and by all directors and executive officers as a group on April 15, 1995.
APG AFC Preferred Stock Common Series E Series F Series G Stock Carl H. Lindner (A) -- -- -- 11,775,349 22.7% Richard E. Lindner -- -- -- -- Robert D. Lindner (B) -- 138,422 -- 663,828 1.0% 1.3% Ronald F. Walker (C) -- -- -- 9,524 * All directors and executive officers as a group (D) 900 162,501 51 22,252,913 * 1.2% * 42.5% *Less than 1%. AAG AFEI Chiquita Citicasters Common Common Common Common Stock Stock Stock Stock Carl H. Lindner (A) -- -- 39,368 1,557,468 * 17.4% Richard E. Lindner -- -- -- -- Robert D. Lindner (B) -- 10,000 -- -- * Ronald F. Walker (C) 15,000 7,500 38,730 20,000 * * * * All directors and executive officers as a group (D) 43,919 577,300 322,481 1,773,385 * 4.2% * 19.8% *Less than 1%. -55- (A) Does not include shares beneficially owned by AFC or APG. Includes 652,722 shares of APG and 37,200 shares of Chiquita Common Stock which may be acquired upon exercise of stock options and 101,317 shares of Citicasters Common Stock held by a charitable foundation over which Mr. Lindner shares voting and/or dispositive power. Includes 974,385 shares held by his spouse and 153 shares held in his account under the American Premier 401(k) Retirement and Savings Plan, over which he has investment power but not the power to vote. (B) Represents shares of AFEI Common Stock which may be acquired upon exercise of stock options. (C) Includes 7,500 shares of AFEI and 38,730 shares of Chiquita Common Stock which may be acquired upon exercise of stock options. (D) Includes 1,003,630 shares of APG, 407,500 shares of AFEI and 240,360 shares of Chiquita Common Stock which may be acquired upon exercise of stock options. Also includes 1,435,904 shares of APG Common Stock held in various trusts, over which the officers do not have investment or voting powers and 884 shares of APG Common Stock held in an account under the American Premier 401(k) Retirement and Savings Plan, over which the officer has investment power but not the power to vote.
ITEM 13 Certain Relationships and Related Transactions AFC and its subsidiaries have had and expect to continue to have transactions 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 1994 was $568,000; the loan was paid off in the first quarter of 1994. -56- 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 balance due from Mr. Evans, the sole officer owing more than $60,000 at any time since January 1, 1994, was $85,000; the balance was paid in April 1995. Liability Transactions During 1994, AFC made final 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. (See "Capital Subject to Put Option" in Note I of Notes to Consolidated Financial Statements). At April 15, 1995, AFC, the Carl Lindner family, and trusts for their benefit, beneficially owned approximately 49% 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 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 1994 were as follows: approximately $1,233,000 for the lease of Provident's main banking and corporate offices, and $100,000 for security guard services. At April 15, 1995, AFC and the Lindner family owned a majority of the common stock of Citicasters Inc. Facilities and services provided by AFC for which charges exceeded $60,000 in 1994 were as follows: approximately $232,000 for the lease of Citicasters' corporate headquarters, $944,000 for insurance coverage, and $674,000 for travel related services. In 1994, 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 $158,000. During 1994, GAI leased an aircraft from a company owned by members of the Richard E. Lindner family. GAI made lease payments of $328,000 under a one-year agreement renewable at each party's option. GAI also pays its proportionate share of actual costs incurred for personnel, fuel and other related items, based on actual usage. -57- In 1994, AFC paid United Dairy Farmers, Inc. approximately $190,000 for gift certificates given to employees of AFC and affiliates as holiday gifts. Robert D. Lindner is principal owner of United Dairy Farmers. 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 Fred J. Runk Vice President and Treasurer Dated: April 28, 1995 -58- -----END PRIVACY-ENHANCED MESSAGE-----