-----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, mrcv8UZ9dBHNh9surrIkNp8Dm1OT/jzLmFsSymJxJa33cLxkfS2GCB+0JmtQ0dUW lsS4x9JK8lyBgbf17qgiQw== 0000943719-95-000003.txt : 19950414 0000943719-95-000003.hdr.sgml : 19950414 ACCESSION NUMBER: 0000943719-95-000003 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950411 SROS: PSE SUBJECT COMPANY: 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: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-08115 FILM NUMBER: 95528163 BUSINESS ADDRESS: STREET 1: ONE E 4TH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135792121 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AFC ESORP PLAN CENTRAL INDEX KEY: 0000943719 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: ONE EAST FOURTH STREET STREET 2: SUITE 919 CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135792540 MAIL ADDRESS: STREET 1: ONE EAST FOURTH STREET STREET 2: SUITE 919 CITY: CINCINNATI STATE: OH ZIP: 45202 SC 13D 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 American Financial Corporation (Name of Issuer) Series F and Series G Preferred Stock (Title of Class of Securities) Series F - 026087809 Series G - 026087874 (CUSIP Number) James E. Evans, Esq. One East Fourth Street Cincinnati, Ohio 45202 (513) 579-2536 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) See Item 3 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with this statement [ X ]. Page 1 of 84 Pages CUSIP NO. 026087809 13D Page 2 of 84 Pages 026087874 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS The Administrative Plan Committee of The American Financial Corporation Employee Stock Ownership/ Retirement Plan 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* N/A 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Ohio 7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: SOLE VOTING POWER 8,452,624 Preferred Shares (See Item 5) 8 SHARED VOTING POWER - - - 9 SOLE DISPOSITIVE POWER 8,452,624 Preferred Shares (See Item 5) 10 SHARED DISPOSITIVE POWER - - - 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,452,624 Preferred Shares (See Item 5) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 59.9% (See Item 5) 14 TYPE OF REPORTING PERSON* OO This Statement is filed on behalf of the Administrative Plan Committee (the "Plan Committee") of The American Financial Corporation Employee Stock Ownership/Retirement Plan (the "AFC ESORP") (the Plan Committee is sometimes referred to herein as the "Reporting Person"). Item 1. Security and Issuer. This Statement relates to shares of $1.00 par, Series F Voting Cumulative Preferred Stock and $1.00 par, Series G Voting Cumulative Preferred Stock (collectively, the "AFC Preferred Stock") of American Financial Corporation, an Ohio corporation ("AFC"). The principal executive offices of AFC are located at One East Fourth Street, Cincinnati, Ohio 45202. American Financial Corporation ("AFC") is a holding company operating through wholly-owned and majority-owned subsidiaries and other companies in which it beneficially owns significant equity interests. These companies operate in a variety of financial businesses, primarily property and casualty insurance and including annuities and portfolio investing. In non- financial areas, these companies have substantial operations in the food products industry, and radio and television station operations. All of the outstanding common stock of AFC is owned by American Premier Group, Inc. ("American Premier"). Item 2. Identity and Background. The Administrative Plan Committee of The American Financial Corporation Employee Stock Ownership/Retirement Plan is composed of Sandra W. Heimann and Ronald F. Walker. Sandra W. Heimann's principal occupation is as a Vice President of AFC. Ronald F. Walker's principal occupation is as an executive of AFC. He is presently a director of AFC. Ms. Heimann's business address is One East Fourth Street, Cincinnati, Ohio 45202. Mr. Walker's business address is 580 Walnut Street, Cincinnati, Ohio 45202. None of the persons listed above have during the last five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. - 3 - Item 3. Source and Amount of Funds or Other Consideration. The shares of AFC Preferred Stock to which this Statement relates were granted voting rights immediately before a transaction involving the acquisition of AFC by American Premier, as a result of which on April 3, 1995, American Premier became the owner of all of the outstanding common stock of both AFC and American Premier Underwriters, Inc. (the "Acquisition"). Following the Acquisition, the Preferred Stock represented approximately 21% of the total voting power of AFC. Item 4. Purpose of Transaction. The Reporting Person considers the beneficial ownership of AFC Preferred Stock as an investment by the AFC ESORP in the ordinary course of its business. From time to time the AFC ESORP may acquire additional shares of AFC Preferred Stock or dispose of all or some of the shares of AFC Preferred Stock which it beneficially owns. The AFC ESORP has in the past, and expects to continue to, make distributions of AFC Preferred Stock to its participants, as well as repurchase such shares at current market prices. Except as set forth in this Item 4, the Reporting Person presently has no plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. As of March 31, 1995, the Reporting Person beneficially owned an aggregate of 8,452,624 shares (or approximately 59.9%) of the outstanding AFC Preferred Stock as follows: Number of Shares of Percent Holder Series F Series G Interest AFC ESORP 8,375,724 76,900 59.9% Between March 6, 1995 and March 31, 1995, the AFC ESORP distributed 1,143,270 shares of AFC Series F to its participants and purchased 331,608 of these shares at prices ranging from $16.125 to $16.875 per share. Neither AFC nor American Premier has any ownership in, or voting control over, the assets of the AFC ESORP, including the AFC Preferred Stock held thereby. Except as set forth in this Item 5, to the best knowledge and belief of the undersigned, no transactions involving American Premier Common Stock have been effected during the past 60 days by the Reporting Persons. - 4 - - 5 - Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Please see the American Financial Corporation Employee Stock Ownership/Retirement Plan Trust Agreement Amended and Restated as of January 1, 1994 and American Financial Corporation Employee Stock Ownership/Retirement Plan Amended and Restated as of January 1, 1994 which are attached as Exhibits. Item 7. Material to be filed as Exhibits. (1) Powers of Attorney executed in connection with filings under the Securities Exchange Act of 1934, as amended. (2) American Financial Corporation Employee Stock ownership/Retirement Plan Trust Agreement Amended and Restated as of January 1, 1994. (3) American Financial Corporation Employee Stock Ownership/Retirement Plan Amended and Restated as of January 1, 1994. After reasonable inquiry and to the best knowledge and belief of the undersigned, it is hereby certified that the information set forth in this statement is true, complete and correct. Dated: April 11, 1995 THE ADMINISTRATIVE PLAN COMMITTEE OF THE AMERICAN FINANCIAL CORPORATION EMPLOYEE STOCK OWNERSHIP/RETIREMENT PLAN By: Sandra W. Heiman Sandra W. Heiman, Member THE ADMINISTRATIVE PLAN COMMITTEE OF THE AMERICAN FINANCIAL CORPORATION EMPLOYEE STOCK OWNERSHIP/RETIREMENT PLAN By: Ronald F. Walker Ronald F. Walker, Member (AFC.13D) - 6 - Exhibit 1 POWER OF ATTORNEY I, Sandra W. Heimann, do hereby appoint James E. Evans and James C. Kennedy, or either of them, as my true and lawful attorneys-in-fact to sign on my behalf individually and as a member of the The Administrative Plan Committee of The American Financial Corporation Employee Stock Ownership/Retirement Plan (the "Plan Committee") and to file with the Securities and Exchange Commission any schedules or other filings or amendments thereto made by me or on behalf of the Plan Committee pursuant to Sections 13(d), 13(f), 13(g), and 14(d) of the Securities and Exchange Act of 1934, as amended. IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati, Ohio as of the 4th day of April, 1995. /s/ Sandra W. Heimann Sandra W. Heimann - 7 - Exhibit 1 POWER OF ATTORNEY I, Ronald F. Walker, do hereby appoint James E. Evans and James C. Kennedy, or either of them, as my true and lawful attorneys-in-fact to sign on my behalf individually and as a member of the The Administrative Plan Committee of The American Financial Corporation Employee Stock Ownership/Retirement Plan (the "Plan Committee") and to file with the Securities and Exchange Commission any schedules or other filings or amendments thereto made by me or on behalf of the Plan Committee pursuant to Sections 13(d), 13(f), 13(g), and 14(d) of the Securities and Exchange Act of 1934, as amended. IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati, Ohio as of the 4th day of April, 1995. /s/ Ronald F. Walker Ronald F. Walker - 8 - Exhibit 2 AMERICAN FINANCIAL CORPORATION EMPLOYEE STOCK OWNERSHIP/RETIREMENT PLAN TRUST AGREEMENT AMENDED AND RESTATED AS OF JANUARY 1, 1994 - 9 - THIS TRUST AGREEMENT made and entered into this ___ day of ________, 1994 by and between AMERICAN FINANCIAL CORPORATION, an Ohio corporation (hereinafter referred to as "Employer"), and PNC BANK, OHIO, NATIONAL ASSOCIATION (hereinafter referred to as "Trustee"); W I T N E S S E T H: The Employer desires to amend and restate the American Financial Corporation Employee Stock Ownership/Retirement Plan Trust Agreement; Accordingly, the Employer and the Trustee hereby amend and restate the AMERICAN FINANCIAL CORPORATION EMPLOYEE STOCK OWNERSHIP/RETIREMENT PLAN TRUST as follows: ARTICLE 1 TRUST ASSETS 1.1 The Employer shall pay or cause to pay "Employer Contributions" to the Trustee from time to time in accordance with the Plan. The assets transferred to the Trustee from Employer Contributions hereinafter made and all investments thereof, together with all accumulations, accruals, earnings and income with respect thereto, shall be held by the Trustee in trust hereunder as the Trust assets. The Trust assets shall be received by the Trustee and allocated between separate trust funds, as provided in Article 2 pursuant to written instructions to the Trustee from the Committee. The Trustee shall not be responsible for the administration of the Plan, maintaining any records of Participants' Accounts under the Plan, or the - 10 - computation of or collection of Employer Contributions, but shall hold, invest, reinvest, manage, administer and distribute the Trust assets, as provided herein, for the exclusive benefit of the Participants, retired Participants and their Beneficiaries. ARTICLE 2 INVESTMENTS 2.1 The Trustee shall invest and reinvest the Trust assets without distinction between principal and income in accordance with the terms of the Plan and this Trust Agreement. 2.2 Employer Contributions which are specified by the Committee shall be invested in Employer Securities as soon as it is practicable after the receipt of any said Employer Contributions; provided, however, that if, in the judgment of the Trustee, any purchase by the Trustee of Employer Securities might be in violation of applicable federal securities laws and the rules and regulations thereunder, the Trustee may invest all or any part of funds otherwise specified to be invested in Employer Securities in either securities issued or guaranteed by the United States of America or any agency thereof or in short-term commercial paper until such time as in the opinion of the Trustee a purchase by it of Employer Securities would not be in violation of such laws and such rules and regulations, at which time the Trustee shall invest such funds in Employer Securities. The Trustee, in its sole judgment, may invest up to 100% of Employer Contributions in Employer Securities. Pending investment or payment of expenses or benefits, the Trustee may hold any portion - 11 - of the Trust assets in cash without liability for interest or may make investments in securities issued or guaranteed by the United States of America or any agency thereof or in short-term commercial paper. 2.3 Dividends, interest and other distributions of securities, property or cash received by the Trustee on or with respect to investments of any separate trust funds shall be reinvested in the same separate trust fund. Any securities received by the Trustee as a stock split or dividend or as a result of a reorganization or other recapitalization of the Employer shall be allocated as of each accounting date in the same manner as the stock to which it is attributable is then allocated. In the event any rights, warrants or options are issued on Employer Securities held in the Trust, the Trustee shall exercise them for the acquisition of additional Employer Securities to the extent that cash is then available. Any Employer Securities acquired in this fashion shall be treated as Employer Securities bought by the Trustee for the net price paid. Any rights, warrants or options on Employer Securities which cannot be exercised for lack of cash may be sold by the Trustee and the proceeds treated as a current cash dividend received on Employer Securities. 2.4 The Trustee shall also, as directed by the Committee, place funds in savings accounts or certificates of deposit issued by any bank (including that of the Trustee) or savings and loan association, invest in stocks, shares and obligations of corporations or of unincorporated associations or trusts or - 12 - investment companies or in any kind of investment fund (including the common trust funds or collective investment funds maintained by the Trustee or any of its affiliates and investment management companies for which the Trustee or its affiliates receive compensation for providing investment advisory, custody or transfer agency functions), mutual fund or common trust fund, or in realty or personalty, including purchase and leaseback transactions, interest in oil or other depletable natural resources and in other kinds of investments which are legal and prudent investments for trustees. 2.5 The Committee shall assume responsibility and be liable for the making of prudent investments to the extent prescribed in this Article and as is more particularly set forth in the Plan. Investments directed by the Committee shall not be in conflict with the "Prohibited Transactions" provisions of the Code. The Trustee shall also, pursuant to directions received from the Committee, purchase such securities or other property, including shares of stock of any classification issued by the Employer, or shall sell such securities or other property held as part of the Trust assets. The Trustee shall have no obligation whatsoever to seek or request any such direction from the Committee, nor shall the Trustee have any power or authority to dispose of any securities or property acquired pursuant to such direction, unless directed by the Committee. - 13 - ARTICLE 3 POWER AND AUTHORITY OF THE TRUSTEE 3.1 In extension and not in limitation of the powers given to the Trustee by law or by other provisions of this Trust Agreement, or the Plan, the Trustee shall have the following powers with respect to the Trust Fund to the extent that such powers or the exercise thereof do not adversely affect the qualification of the Plan or the tax-exempt status of this Trust under the Code or violate any of the provisions of ERISA; (a) To retain, manage, operate, repair, develop, preserve, improve, mortgage or lease for any period any real property held by the Trustee upon such terms and conditions as the Trustee deems proper, either alone or by joining with others, using other Trust assets for any such purposes if deemed advisable; to modify, extend, renew or otherwise adjust any or all of the provisions of any such mortgage or lease, including the waiver of rentals, if by it deemed advisable; and to make provisions for the amortization of the investment and/or depreciation of the value of such property, as the Trustee may deem advisable; (b) To make, execute, acknowledge and deliver any and all deeds, leases, assignments and instruments; (c) To borrow or raise money from itself or any other person, firm or corporation for the purposes of the Trust Fund to the extent that the Trustee shall deem desirable to acquire Employer Securities or any other property authorized by this Trust Agreement to pay expenses - 14 - of the Trust or to finance or repay indebtedness which was incurred to acquire Employer Securities or other property or to pay expenses of the Trust. The Trustee shall give its note, as Trustee, with such interest and security for the loan as may be appropriate or necessary; (d) To vote any stocks, bonds or other securities held in the Trust, or otherwise consent to or request any action on the part of the issuer in person or by proxy; provided, however, that the Trustee shall vote Employer Stock as prescribed in accordance with the provisions of Article 4 hereof; (e) To give general or specific proxies or powers of attorney with or without powers of substitution; (f) To participate in reorganizations, recapitalizations, consolidations, mergers and similar transactions with respect to Employer Stock or any other securities; (g) To deposit such Employer Stock or other securities in any voting trust or with any protective or like committee or with a trustee or with depositories designated thereby; (h) To exercise any options, subscription rights or conversion privileges; (i) To sue, defend, compromise, arbitrate or settle any suit or legal proceeding or any claim due it or on which it is liable; - 15 - (j) To retain, acquire or otherwise deal in any of its own capital stock if it is so expressly directed by the Committee or in any stock for which it is registrar, transfer agent and the like; (k) To contract or otherwise enter into transactions between itself as Trustee and as bank, between itself as Trustee and the Employer, its subsidiaries and affiliates, or any of them, or between itself as Trustee and any other institution for which it then, theretofore or thereafter may be acting as Trustee; (l) To retain any of the Trust assets in cash or deposit with itself as a bank or otherwise without liability for the payment of interest thereon or in property returning no income or slight income, so long as the Trustee deems this to be advisable for the Trust; (m) To employ the services of any investment or brokerage firm to assist in the purchasing or selling of any assets held hereunder or to otherwise aid in the administration of the Plan; (n) To exercise any of the powers of an owner with respect to such Employer Securities or other property comprising the Trust assets. The Employer may authorize the Trustee to act on any matter or class of matters with respect to which direction or other instruction to the Trustee by the Employer is called for hereunder without specific direction or other instruction from the Committee; - 16 - (o) To employ or consult with such legal counsel (which may be counsel for the Employer), accountants, brokers, custodians and other agents as it shall deem advisable; and to deposit any or all of the Trust assets with any agent to be held by such agent for the Trustee upon the terms and conditions as the agent and the Trustee agree; and to pay reasonable expenses and compensation for all of such services; (p) To sell, transfer, mortgage, pledge, lease or otherwise dispose of, or grant options with respect to any securities or other property in the Trust at public or private sale; (q) Perform all acts, take all such proceedings, and exorcise all such rights and privileges, whether or not expressly authorized herein, which it may deem necessary or proper for the proper administration and protection of the Trust assets. Each and all of the foregoing powers may be exercised without court order or other legal formality. No one dealing with the Trustee need inquire concerning the validity or propriety of anything that is done or need see to the application of any moneys paid or property transferred to or upon the order of the Trustee. - 17 - ARTICLE 4 VOTING EMPLOYER STOCK 4.1 In the event voting Employer Stock is held in the Trust, the Committee shall determine whether such voting Employer Stock is Participant-Voted Stock or Committee-Voted Stock pursuant to Article 11 of the Plan. ARTICLE 5 NOMINEES 5.1 The Trustee may register any securities or other property held by it under its own name or in the name of its nominees with or without the addition of words indicating that such securities are held in a fiduciary capacity, and may hold any securities in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the Trust. ARTICLE 6 RECORDS 6.1 The Trustee shall keep accurate and detailed accounts of all investments, receipts and disbursements and other transactions hereunder, and all accounts, books and records relating thereto shall be open to inspection by any person designated by the Committee or the Employer at all reasonable times. The Trustee shall maintain such records, make such computations, except as concerns Employer Contributions, and perform such ministerial duties as the Committee may from time to time request. - 18 - ARTICLE 7 REPORTS 7.1 Within 60 days after the end of each December 31 or the removal or resignation of the Trustee, and as of any other date specified by the Committee, the Trustee shall file a report with the Committee. This report shall show all purchases, sales, receipts, disbursements and other transactions effected by the Trustee during the year or period for which the report is filed and shall contain an exact description, the cost as shown on the Trustee's books, and where readily ascertainable, the market value of the end of such period, of every item held in the Trust and the amount and nature of every obligation owed by the Trust. The Trustee may rely without liability upon the valuation of Employer Securities as determined by the Committee. The Trustee shall be forever released and discharged from all liability for all acts set forth in such report, except for actual fraud, unless within 90 days after the date of such report the Committee notifies the Trustee of its objection or objections to any matter set forth therein. ARTICLE 8 DISTRIBUTIONS 8.1 The Trustee shall make distributions from the Trust at such times and in such numbers of shares of Employer Securities and amounts of cash to or for the benefit of the person entitled thereto under the Plan as the Committee directs in writing. Any undistributed part of a Participant's Capital Accumulation shall be retained in the Trust until the Committee - 19 - directs its distribution. Where distribution is directed in Employer Securities, the Trustee shall cause an appropriate certificate to be issued to the person entitled thereto and mailed to the address furnished it by the Committee; provided, however, that the Trustee shall comply with the provisions of the Plan and the regulations of the Committee relating to repurchase of such stock by the Trust or by the Employer. Any portion of a Participant's Capital Accumulation to be distributed in cash shall be paid by the Trustee mailing its check to the same person at the same address. ARTICLE 9 SIGNATURES 9.1 All communications required hereunder from the Employer or the Committee to the Trustee shall be in writing signed by an officer of the Employer or a person authorized by the Committee to sign on its behalf. The Committee shall authorize one or more individuals to sign on its behalf all communications required hereunder between the Committee and the Trustee. The Employer and the Committee shall at all times keep the Trustee advised of the names and specimen signatures of all members of the Committee and the individuals authorized to sign on behalf of the Committee. The Trustee shall be fully protected in relying on any such communication and shall not be required to verify the accuracy or validity thereof unless it has reasonable grounds to doubt the authenticity of any signature. If after request the Trustee does not receive instructions from the - 20 - Committee on any matter in which instructions are required hereunder, subject to the provisions of Article 4 hereof, the Trustee shall act or refrain from acting as it may determine. ARTICLE 10 EXPENSES 10.1 The Trustee and the Committee may employ suitable agents and counsel who may be counsel for the Employer. The expenses incurred by the Trustee and the Committee in the perfor- mance of their duties hereunder and all other proper charges, expenses, and disbursements of the Trustee or the Committee, including the Trustee's compensation, shall be charged to and paid out of the Trust assets. Normal brokerage charges, commissions and taxes and other costs incident to the purchase and sale of securities which are included in the cost of securities purchased or charged against the proceeds in the case of sales, shall be paid by or charged against the separate trust fund that contains or contained the subject security. The Trustee shall be entitled to compensation as may be agreed upon in writing from time to time between the Committee and the Trustee. ARTICLE 11 LIABILITY OF TRUSTEE 11.1 The Trustee shall not be liable for any expense or liability hereunder unless due to or arising from its fraud, dishonesty, negligence or misconduct. Except as thus provided, - 21 - the Trustee shall not be liable for the making, retention or sale of any investment or reinvestment made by it, as herein provided, nor for any loss to or diminution of the Trust assets, nor for any action it takes or refrains from taking which it deems in good faith to be in the best interest of the Trust or which it takes or refrains from taking at the direction of the Committee or Employer. The Trustee shall not be required to pay interest on any part of the Trust assets which are held uninvested pursuant to the Committee's direction. 11.2 Neither the Trustee nor any other person shall be under any duty to question any direction received from the Committee or to review any securities or other property or to make any suggestions to the Committee in connection therewith; and the Trustee shall as promptly as possible comply with any direction given by the Committee hereunder. The Trustee shall not be liable in any manner and for any reason for the making or retention of any investment pursuant to such directions, nor shall the Trustee be liable for its failure to invest any or all of the Trust assets in the absence of such written directions. 11.3 The Trustee shall discharge its duties solely in the interest of the Participants and their Beneficiaries and for the exclusive purpose of providing benefits to Participants and their Beneficiaries and defraying reasonable expenses of administering the Plan. The Trustee shall act with care, skill, prudence and diligence under the circumstances any prudent man acting in a like capacity and familiar with such matters would use in conducting an enterprise of like character and like aims, in - 22 - accordance with the Plan and the terms and provisions of this Trust Agreement, insofar as such documents and instruments are consistent with their standards. The Trustee may from time to time consult with counsel, who may be counsel for the Employer, and the Employer shall indemnify the Trustee from any and all liabilities, losses, damages and expenses which the Trustee may suffer as a result of acting upon advice of counsel with respect to legal questions. ARTICLE 12 AMENDMENT AND TERMINATION 12.1 The Trust may be amended or terminated any time, by an instrument in writing, authorized by the Board of Directors of the Employer and signed by an officer of the Employer, duly executed and acknowledged and delivered to the Trustee in whole or in part, in accordance with the express provisions of the Plan. The Employer shall have the right, in said manner, to amend this Trust Agreement retroactively to its effective date in order initially to meet the requirements of Section 401(a) of the Code, and to terminate this Trust Agreement in the event of failure of the Internal Revenue Service, after initial application to determine that the Plan and the Trust meet the requirements of Section 401(a) of the Code. In no event, however, shall the duties, powers or liabilities of the Trustee hereunder be changed without its prior written consent. 12.2 It is intended that this Trust and the Plan constitute a qualified trust under Section 401(a) of the Code. - 23 - In the event the Plan and Trust do not receive the initial approval of the Internal Revenue Service, then the Plan shall be terminated at such date not later than 90 days after the date on which the Internal Revenue Service has failed to approve the Plan, and the assets, together with any income received or accrued thereon and less any benefits, obligations and expenses, will be distributed promptly to the Employer or Participants in this Plan in accordance with this provision and in such manner as the Committee may direct. ARTICLE 13 IRREVOCABILITY 13.1 Subject to the provisions of Article 12, this Trust is declared to be irrevocable and at no time shall any part of the Trust assets revert to or be recoverable by the Employer or be used for or be diverted to purposes other than for the exclusive benefit of Participants or retired or terminated Participants and their Beneficiaries. However, the Employer may by notice in writing to the Trustee direct that all or part of the Trust assets be transferred to a successor trustee or trustees under a trust instrument which is for the exclusive benefit of such Participants and their Beneficiaries and meets the requirements of Section 401(a) of the Code, and thereupon the Trust assets or any part thereof, together with any outstanding loans and accrued interest attributable thereto shall be paid over, transferred or assigned to said trustee or trustees free from the trust created hereunder; provided, however, that no part - 24 - of the Trust assets may be used to pay premiums or contributions of the Employer under any other plan maintained by it for the benefit of its Employees. ARTICLE 14 RESIGNATION OR REMOVAL OF TRUSTEE 14.1 The Trustee or any one of the individual trustees may resign at any time upon 30 days' written notice to the Employer. The Trustee or any one of the individual trustees may be removed at any time by the Employer upon 30 days' written notice to the Trustee. Upon the receipt of instructions or directions from the Employer or the Committee given within a reasonable time, under the circumstances then prevailing, after the receipt of such instructions or directions, and notwith- standing any other provisions hereof, in that event the Trustee shall have no liability to the Employer, or any person interested herein, for failure to comply with such instructions or directions. Upon resignation or removal of the Trustee, the Employer shall appoint a successor trustee. The successor trustee shall have the same powers and duties as are conferred upon the Trustee hereunder, and the Trustee shall assign, transfer and pay over to such successor trustee all the moneys, securities and other property then constituting the Trust assets, together with such records or copies thereof as may be necessary to the successor trustee. 14.2 The Trustee shall not be required to make any transfer under this Article 14 or the preceding Article 13 to a - 25 - successor trustee or trustees unless and until it has been indemnified to its satisfaction against any expenses and liabili- ties both with respect to such transfer and with respect to any of its acts as Trustee prior to such transfer (except such expenses or liabilities due to or arising from its fraud, dishonesty, negligence or misconduct). ARTICLE 15 ACCEPTANCE 15.1 The Trustee hereby accepts this Trust and agrees to hold the Trust assets existing on the date of this Trust Agreement and all additions and accretions thereto subject to all the terms and conditions of this Trust Agreement which shall be governed by and construed under the laws of the jurisdiction within which the Trustee is located. In the event any provisions of this Trust Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Trust Agreement but shall be fully severable, and the Trust Agreement shall be construed and enforced as if the illegal or invalid provision had never been inserted herein. ARTICLE 16 DEFINITION 16.1 The definitions of certain words in the Plan shall apply to this Trust Agreement wherever applicable. Masculine pronouns refer to women as well as to men, and the singular includes the plural. - 26 - ARTICLE 17 MISCELLANEOUS 17.1 The Employer shall furnish to the Trustee, and the Trustee shall furnish to the Employer such information relevant to the Trust as may be required under the Code and ERISA. The Trustee shall keep such records as may be required of it under the Code and ERISA. 17.2 The Employer shall fulfill any obligations imposed on the Employer or the Trustee, or both, by ERISA. In addition, the Participants shall be given any reports required by ERISA. To the extent that the Trustee must assume any such obligations, it may charge a reasonable fee for its services, including expenses, apart from its normal fee. IN WITNESS WHEREOF, the Employer and the Trustee have executed this Trust Agreement on the day and year first above written in Cincinnati, Hamilton County, Ohio. WITNESSES: AMERICAN FINANCIAL CORPORATION BY: PNC BANK, OHIO, National Association BY: - 27 - Exhibit 3 AMERICAN FINANCIAL CORPORATION EMPLOYEE STOCK OWNERSHIP/RETIREMENT PLAN AMENDED AND RESTATED AS OF JANUARY 1, 1994 - 28 - ARTICLE 1 NATURE OF PLAN The principal purpose of the Employee Stock Ownership/ Retirement Plan ("Plan") is to help Employees, during their years of employment, accumulate a substantial economic interest in American Financial Corporation (the "Company"). Contributions to the Plan will be invested primarily in Employer Securities. These contributions (together with the earnings throughout) will not be taxed to an Employee until they are distributed. The original Effective Date of the Plan was December 1, 1975. The terms and provisions of this Plan were amended and restated as of January 1, 1984. This Plan is further amended and restated effective as of January 1, 1994 except as otherwise stated. The Company will submit the Plan to the Internal Revenue Service for approval. Although the Plan is designed to invest primarily in Employ- er Securities, the Trustee is authorized to invest in other types of assets such as stocks, bonds, certificates of deposit, and mutual funds. The Plan is administered by a Committee appointed by Company's Board of Directors. This Committee is one of the "Named Fiduciaries" as that term is defined in ERISA. The duties of the Committee are set out in greater detail elsewhere in the Plan. The Plan, as adopted, does not permit or allow voluntary contributions by Employees. - 29 - ARTICLE 2 DEFINITIONS In the Plan, unless the context clearly implies otherwise, the singular includes the plural, the masculine includes the feminine, and the following words have the following meanings: Account . . . . . . . . . . One of several records maintained to record a Participant's interest in the Plan. Age . . . . . . . . . . . . Age, in years, of an Employee as of the last anniversary of the Employee's date of birth. Anniversary Date . . . . . The "Anniversary Date" of the Plan shall mean the 31st day of December of each year. Annual Addition . . . . . . Subject to any other applicable provisions hereof, in respect of any Participant, Annual Addition shall mean the sum (for any taxable year of an Employer) of: (a) All Employer Contributions allocated to a Participant's Ac- count under this Plan or any other Defined Contribution Plan of an Employer. With respect to any Plan Year in which no more than 1/3 of the Employer Contributions that are deductible under Section 404(a)(9) of the Code are allocated to highly compensated employees (within the meaning of Section 414(q) of the Code), forfeitures of Employer Stock acquired with the proceeds of a loan described in Article 11 and Employer Contributions that are deductible under Section 404(a)(9)- (B) of the Code and are charged against the Participant's Account shall be disregarded for purposes of this Paragraph; (b) Participant contributions made to any other Defined Contribution Plan of an Employer; - 30 - (c) All forfeitures allocated to said Participant's Account in re- spect of said taxable year; (d) Amounts allocated, after March 31, 1984, to an individual medical benefit account (as defined in Section 415(l)(2) of the Code) included as part of a pension or annuity plan maintained by an Em- ployer; and (e) Contributions paid or accrued after December 31, 1985, for tax- able years ending after December 31, 1985, attributable to post-retirement medical benefits allocated to the separate account of a Participant who is a key em- ployee that has been established under Section 419A(d)(3) of the Code for a welfare benefit fund (as defined in Section 419(e) of the Code) maintained by an Employer. Provided, that the Employee contri- butions mentioned above shall be determined without regard to any Rollover Contributions from any Individual Retirement Account, and from any funds received directly or indirectly from a qualified Trust of another employer. Beneficiary . . . . . . . . One or more recipients designated to receive payments in accordance with the terms of the Trust on the death of a Participant. The term "Participant or the Participant's Beneficiary" shall not confer any rights other than to a Participant during the Participant's lifetime. Capital Accumulation . . . The amount of the distribution to which a Participant becomes enti- tled upon termination of participa- tion. Code . . . . . . . . . . . The Internal Revenue Code of 1986 as the same now exists or is here- after revised or amended. - 31 - Committee . . . . . . . . . The Committee appointed by the Board of Directors of the Company to administer the Plan and give instructions to the Trustee. Company . . . . . . . . . . The term "Company" means American Financial Corporation. Compensation Limit . . . . The term "Compensation Limit" shall mean the maximum amount of Compen- sation taken into account under the Plan for any Plan Year as set forth in Section 401(a)(17) of the Code and as may be adjusted by the Sec- retary of Treasury to reflect increases in the cost of living. For purposes of this Section, the rules of Code Section 414(q)(6) of the Code shall apply, except in applying such rules, the term "fam- ily" shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the end of the year. If, as a result of the application of such rules, the adjusted Compensation Limit is exceeded, then the limitation shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section prior to the application of this limita- tion. In addition to other applicable limitations set forth in the Plan, and notwithstanding any other pro- vision of the Plan to the contrary, for Plan Years beginning on or after January 1, 1994, the annual Compensation of each Employee taken into account under the Plan shall not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit is $150,- 000, as adjusted by the Commission- er for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. The cost of living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, - 32 - over which Compensation is deter- mined (determination period) begin- ning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied by a fraction, the nu- merator of which is the number of months in the determination period, and the denominator of which is 12. For Plan Years beginning on or after January 1, 1994, any refer- ence in this Plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93 annual compensation limit set forth in this provision. If Compensation for any prior de- termination period is taken into account in determining an Employe- e's benefits accruing in the cur- rent Plan Year, the Compensation for that prior determination period is subject to the OBRA '93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the first Plan Year begin- ning on or after January 1, 1994, the OBRA '93 annual compensation limit is $150,000. Covered Compensation . . . The term "Covered Compensation" (or "Compensation") shall mean a Participant's wages for the Plan Year within the meaning of Section 3401(a) of the Code (for purposes of income tax withholding at the source) but determined without re- gard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2) of the Code). The de- termination of Compensation shall be made by including amounts which are contributed by an Employer pursuant to a salary reduction - 33 - agreement and which are not includ- able in the gross income of the Participant under Sections 125, 402(e)(3), 402(h), 403(b) or 457 of the Code and Employee contributions described in Section 414(h)(2) of the Code that are treated as Em- ployee contributions. Direct Rollover . . . . . . The term "Direct Rollover" shall mean a payment by the Plan to the Eligible Retirement Plan specified by the Distributee. Disability . . . . . . . . The term "Disability" or "Totally and Permanently Disabled" shall mean a physical or mental condition arising after an Employee has be- come a Participant and which pro- hibits a Participant from engaging in any occupation or employment for remuneration or profit, except for the purpose of rehabilitation not incompatible with a finding of total and permanent disability. The determination as to whether a Participant is Totally and Perma- nently Disabled shall be made (A) - on medical evidence by a licensed physician designated by the Commit- tee, (B) on evidence that the Par- ticipant is eligible for disability benefits under any long-term dis- ability plan sponsored by an Em- ployer, or (C) on evidence that the Participant is eligible for total and permanent disability benefits under the Social Security Act in effect at the date of disability. Distributee . . . . . . . . The term "Distributee" shall mean an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as de- fined in Section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse. - 34 - Effective Date of Plan . . The "Effective Date" for purposes of the original adoption of this Plan is December 1, 1975. The Effective Date of any provision of this Plan required to comply with the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986, the Omnibus Budget Recon- ciliation Act of 1987, the Techni- cal and Miscellaneous Revenue Act of 1988, and the Omnibus Budget Reconciliation Act of 1989 is Janu- ary 1, 1989. Otherwise, the Effec- tive Date of this amendment and restatement is January 1, 1994. Eligible Retirement Plan . The term "Eligible Retirement Plan" shall mean an individual retirement account described in Section 408(a) of the Code, an individual retire- ment annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust de- scribed in Section 401(a) of the Code, that accepts the Distributee- 's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the sur- viving spouse, an Eligible Retire- ment Plan is an individual retire- ment account or individual retire- ment annuity. Eligible Rollover Distribution . . . . . . The term "Eligible Rollover Distri- bution" shall mean any distribution of all or any portion of the bal- ance to the credit of the Distribu- tee, except that an Eligible Roll- over Distribution does not include: any distribution that is one of a series of substantially equal peri- odic payments (not less frequently than annually) made for the life (or life expectancy) of the Dis- tributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more; any distribution to the ex- tent such distribution is required - 35 - under Section 401(a)(9) of the Code; and the portion of any dis- tribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with re- spect to employer securities.) Employee . . . . . . . . . Any person who is a salaried or hourly paid employee of an Employ- er. Employer . . . . . . . . . The Company and/or any other corpo- ration which is at least 50% owned or controlled by the Company which has been designated by such other corporation's Board of Directors as an Employer participating in the Plan and which has accepted such designation and agreed to be bound by the terms of the Plan. Employer Account . . . . . A Participant's Account which is credited with shares of Employer Stock, forfeitures or other assets attributable to such Participant's Employer Contributions under this Plan. Employer Contributions . . Contributions made to a Parti- cipant's Employer Account by an Employer. The amount of the con- tributions to be made each year by an Employer under the provisions of Article 6 hereof shall be deter- mined by the Board of Directors of an Employer and such determination shall be final and conclusive upon all persons. Employer Securities . . . . Employer Stock (as hereinafter de- fined), preferred stock, convert- ible debentures, other securities of an Employer convertible into Employer Stock; or any other secu- rities which are deemed to be "qua- lifying employer securities" as that term is defined under the provisions of ERISA. Employer Stock . . . . . . Shares of common stock issued by an Employer which are readily tradable on an established securities mar- ket. If there is no common stock which is readily tradable on an - 36 - established securities market, the term Employer Stock shall mean the common stock issued by an Employer having a combination of voting power and dividend rights equal to or in excess of (A) that class of common stock of an Employer having the greatest voting power, and (B) the class of common stock of an Employer having the greatest divi- dend rights. ERISA . . . . . . . . . . . The Employee Retirement Income Security Act of 1974, as amended. Hour of Service . . . . . . (A) Each hour for which an Employ- ee is either directly or indirectly paid, or entitled to payment, by an Employer for the performance of Service. These hours shall be credited to such Employee for the compensation period or periods in which such duties are performed; and (B) Each hour for which an Employ- ee is either directly or indirectly paid, or entitled to payment, by an Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship is ter- minated) due to vacation, holiday, illness, incapacity (including dis- ability), layoff, jury duty, mili- tary duty, or leave of absence. Hours under this paragraph shall be calculated and credited pursuant to Section 2530.200b-2(b) and (c) of the Department of Labor Regulations which are incorporated herein by this reference. An Employee shall not be credited during any year with more than 501 Hours of Service for any single continuous period during which the Employee performs no duties; and (C) Each hour for which back-pay, irrespective of mitigation of dam- ages, is either awarded or agreed to by an Employer. Hours under this paragraph shall be calculated - 37 - and credited pursuant to Section 2530.200b-2(b) and (c) of the De- partment of Labor Regulations. The same hours of service shall not be credited under both subparagraph (A) or (B) as the case might be, and under this subparagraph (C). These hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement, or payment is made. In addition, no more than 501 Hours of Service shall be credited for a period of time during which the Employee did not or would not have performed duties during any year. (D) Hours of Service shall also include service with an Employer as a non-Participant in the Plan, ser- vice as a member of a class of em- ployees excluded from the Plan, service as a leased employee under Section 414(n) of the Code, or ser- vice as an employee of a related employer. If an Employer maintains the plan of a predecessor employer, service for such predecessor em- ployer shall be treated as service for an Employer. If an Employer does not maintain the plan of a predecessor employer, service with the predecessor employer shall be treated as service for an Employer to the extent prescribed by Trea- sury Regulations promulgated under Section 414(a)(2) of the Code. Inactive Participant . . . Any Employee or former Employee of an Employer who has an interest in the Plan but who has no Covered Compensation. OBRA '93 . . . . . . . . . The Omnibus Budget Reconciliation Act of 1993. - 38 - One Year Break in Service . . . . . . . . The term "One Year Break in Ser- vice" (or "Break in Service") shall mean any Year of Vesting Service during which an Employee (or if applicable a Participant) does not complete more than 500 Hours of Service with an Employer, utilizing the same computation period as set forth elsewhere herein. Participant . . . . . . . . Any Employee who meets the eligi- bility requirements for participa- tion in the Plan, in accordance with the provisions of Article 3. Plan . . . . . . . . . . . The American Financial Corporation Employee Stock Ownership/Retirement Plan which incudes the Plan and Trust Agreement. Plan Year . . . . . . . . . The 12 consecutive month period of each year commencing January 1 and ending December 31. Profits . . . . . . . . . . For any Plan Year the net income or profits of an Employer for such year, without any deductions for taxes based upon its income or con- tributions to the Trust, and the accumulated net earnings or profits of an Employer, as an Employer shall determine upon the basis of its books of account in accordance with its regular accounting prac- tices. Semi-Annual Entry Dates . . Each January 1st and each July 1st of each Plan Year shall be deemed an entry date into the Plan. Service . . . . . . . . . . Service shall mean employment as an Employee. Service shall not be broken and shall be credited for: (A) Absence due to vacation, tem- porary sickness, or temporary inju- ry; - 39 - (B) Leaves of absence duly granted by an Employer with all Employees and Participants under similar cir- cumstances being treated in a uni- form and non-discriminatory manner; (C) Service in the Armed Forces of the United States or any of its allies during any war or state of emergency in which the United States shall be engaged, or in the Armed Forces of the United States while any form of law requiring compulsory military service shall be in effect and when such law shall be applicable to an Employee or Participant, provided that in either case the Employee or Partic- ipant shall have directly entered into such Armed Forces and shall not have re-enlisted after the date of first entering, and shall have made application for employment within the time prescribed by law; (D) During such absences under the conditions stated in paragraphs (A), (B) and (C), the Employee shall be conclusively deemed to be working at a rate equal to the number of hours such Employee works during a normally scheduled work week. (E) Except as otherwise provided for herein, and for purposes of vesting hereof, services rendered on behalf of a corporation, which together with an Employer, are mem- bers of a controlled group of cor- porations (as defined in Section 414(b) of the Code), to- gether with any other trades or businesses which are under common control (as defined in Sec- tion 414(c) of the Code), shall be treated as being employed by a single employer; provided that ser- vices performed for a sole propri- etor or a partnership will not be taken into consideration for any purposes hereunder. - 40 - (F) Solely for purposes of deter- mining whether a One Year Break in Service for participation and vest- ing purposes has occurred in a com- putation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be deter- mined, eight Hours of Service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement of a child with the individual in con- nection with the adoption of such child by such individual, or (4) f- or purposes of caring for such child for a period beginning imme- diately following such birth or placement. The Hours of Service credited under this paragraph shall be credited (a) in the computation period in which the absence begins if the crediting is necessary to prevent a One Year Break in Service in that period, or (b) in all other cases, in the following computation period. The total number of Hours of Service required to be treated as completed for any period shall not exceed 501 hours. Trust . . . . . . . . . . . The Trust created by the Trust Ag- reement entered into between the Company and the Trustee. Trust Agreement . . . . . . The Agreement between the Company and the Trustee or any successor Trustee establishing the Trust and specifying the duties of the Trust- ee. - 41 - Trustee . . . . . . . . . . The institution or individuals des- ignated as Trustee or Trustees by the Board of Directors of the Com- pany and any successor Trustee or Trustees chosen by the Board of Directors of the Company which agrees to act by executing the Trust Agreement. Valuation Date . . . . . . The last business day of the Plan Year and/or any other dates deter- mined by the Committee for the valuation of Plan assets. If any such date falls on a Sunday or holiday, the preceding business date shall be the Valuation Date. Year of Eligibility Service . . . . . . . . . . The total of 12 month periods com- mencing on the Employee's original date of employment and ending on the anniversary of the Employee's original date of employment coin- ciding with or immediately preced- ing the calculation date during which the Employee worked at least 1,000 Hours of Service. Year of Vesting Service . . Each Plan Year during which the Employee completes at least 1,000 Hours of Service. ARTICLE 3 EMPLOYEE ELIGIBILITY REQUIREMENTS (A) Participation. Except as provided in (B) below, any Employee who is 21 years of age or older and who has completed one Year of Eligibility Service as of January 1, 1994 shall be eligible to participate in the Plan as of that date. Every other present or future Employee who has attained the age of 21 years and who has completed one Year of Eligibility Service after January 1, 1994 shall be eligible to participate in the Plan as of the next succeeding July 1 or January 1. The participation of - 42 - any Employee under this Plan shall be limited to the extent that contributions made on the Employee's behalf under any other qualified employee benefit plans by the Employee's Employer do not exceed the limitations on benefits and contributions for qualified plans, as set forth in the Code. (B) Exclusions From Participation. The following persons shall not be eligible to participate in the Plan: (1) any independent contractor or self-employed per- son; (2) any Employee who is a non-resident alien deriving no earned income from an Employer which constitutes income from sources within the United States; (3) any Employee who is in a unit of Employees covered by a collective bargaining agreement to which retirement benefits were the subject of good faith bargaining (as determined by the Secretary of Labor) between Employee representatives and an Employer, unless there is an agreement making the Plan available to eligible Employees in such unit; and (4) any Leased Employee as defined in Section 414(n)(2) of the Code. (C) Participation Upon Reemployment-Nonforfeitable Benefit. A former Participant shall become a Participant immediately upon the former Participant's return to the employ of an Employer if such former Participant has a nonforfeitable right to all or any portion of such Participant's Account balance derived from Employer Contributions at the time of termination. - 43 - (D) Participation Upon Reemployment-Forfeitable Benefit. A former Participant who terminated on or after January 1, 1985, and did not have a nonforfeitable right to any portion of the former Participant's Account balance derived from Employer Contributions at the time of termination, shall be considered a new Employee, for eligibility purposes, if the number of consecu- tive One Year Breaks in Service equal or exceed the greater of (1) five or (2) the aggregate number of Years of Eligibility Service before such Break in Service. If such former Participan- t's Years of Eligibility Service prior to termination exceeds the number of consecutive One Year Breaks in Service after such termination, or if the number of consecutive One Year Breaks is less than five, such Participant shall participate immediately. Provided, however, if the former Participant terminated prior to January 1, 1985, this Article 3(D) shall apply to such Partici- pant without regard to the five year requirement. (E) Ineligibility While Employed. In the event a Partici- pant becomes ineligible to participate because the Participant is no longer a member of an eligible class of Employees, but has not incurred a Break in Service, such Employee shall participate immediately upon the return to any eligible class of Employees. If such Participant incurs a Break in Service, eligibility shall be determined pursuant to the immediately preceding paragraphs. (F) Ineligible Employee Becomes Eligible. In the event an Employee, who is not a member of the eligible class of Employees, becomes a member of the eligible class, such Employee shall participate immediately if such Employee has satisfied the - 44 - Service requirements and would have previously become a Partici- pant had the Participant been in the eligible class. ARTICLE 4 PARTICIPATION AND VESTING (A) Vesting. For all active Employees on or after January 1, 1989, a Participant's interest in the Participant's Employer Account shall become vested and nonforfeitable to the extent of the following percentages based upon full Years of Vesting Service with an Employer: Years of Service Percentage Vested Percentage Forfeited Fewer than 5 years 0% 100% At least 5 years 100% 0% (B) Prior Vesting Schedules. For all active Employees on or after January 1, 1989, a Participant's interest in the Parti- cipant's Employer Account shall be determined in accordance with the vesting provisions in effect for such Participant immediately prior to termination of employment. (C) Breaks in Service. In computing full Years of Vesting Service hereunder, any Participant who has a One Year Break in Service shall not receive credit for Years of Vesting Service prior to such break until the Participant has completed one full Year of Vesting Service after such Participant's return. In addition, Years of Vesting Service by any Participant after any five consecutive One Year Breaks in Service shall not be taken into account for purposes of determining the nonforfeitable percentage of a Participant's accrued interest derived from - 45 - Employer Contributions which accrued before such five consecutive One Year Breaks in Service. Provided, however, if a Participant separated from Service prior to January 1, 1985, the prior sentence shall apply after such Participant has incurred any One Year Break in Service. Further, when computing full Years of Vesting Service hereunder, an Employer shall establish and maintain a separate account for each Participant who has incurred five consecutive One Year Breaks in Service and has subsequently returned to the employment of an Employer. The purpose of maintaining such separate accounts will be to insure that said Participant is properly allocated Employer Contributions made to the Participant's Account to determine the nonforfeitable percentage of such Participant's accrued interest in accordance with the above. (D) Nonvested Participant. In the case of a nonvested Participant, Years of Vesting Service before any period of consecutive One Year Breaks in Service shall not be required to be taken into account if the number of consecutive One Year Breaks in Service within such period equals or exceeds the greater of (1) five or (2) the aggregate number of Years of Vesting Service before such Break in Service. (E) Inactive Participants. Participation in the Plan will continue until a Participant terminates employment as provided for in Article 7. Once participation ceases, such Participant will be an Inactive Participant for as long as the Participant - 46 - has an interest in the Plan that has not been distributed to the Participant or for the Participant's benefit. (F) Forfeitures. A forfeiture of the non-vested portion of a Participant's Employer Account shall occur on the last day of the Plan Year in which a Participant incurs five consecutive One Year Breaks in Service. All forfeitures shall be allocated in accordance with Article 6(D). ARTICLE 5 CAPITAL ACCUMULATION When a Participant's participation in the Plan ceases, such Participant becomes entitled to all final balances in the Parti- cipant's Account in accordance with the provisions of the Plan. The total amount to which the Participant is entitled is called the Capital Accumulation. ARTICLE 6 EMPLOYER CONTRIBUTIONS (A) Amount of Employer Contributions. For each Plan Year, each Employer may contribute an amount or amounts to the Plan as shall be determined in the discretion of its respective Board of Directors. Any amount or amounts contributed hereunder may be made notwithstanding the fact that an Employer may not have Profits; provided, however, that Employer Contributions, in the aggregate, for each Plan Year shall never be less than any amount required to enable the Trust to discharge its current obligations to repay any loan described in Article 11, if any. - 47 - Notwithstanding any provisions contained herein to the contrary, the sum of the Annual Addition to any Participant's Account and the Annual Addition to the account of the same Employee as a Participant in any other Defined Contribution Plan of an Employer shall not exceed the lesser of (1) $30,000, or, if greater, 1/4 of the dollar limitation in effect under Section 415(b)(1)(A) of the Code; or (2) 25% of the Participant's Compen- sation for the Limitation Year. In the event an individual is a Participant in both a Defined Benefit Plan and a Defined Contribution Plan maintained by the same Employer, the sum of the Defined Benefit Plan Frac- tion and the Defined Contribution Plan Fraction for any year may not exceed 1.0 in any Limitation Year. Notwithstanding the foregoing, a reduction in the Annual Addition shall not be required if the Defined Benefit Plan provides for a reduction of benefits that prevents the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction from exceed- ing 1.0. The Defined Benefit Plan Fraction referred to above is a fraction -- the numerator of which is the sum of the Participant's projected annual benefit under all Defined Benefit Plans (whether or not terminated) maintained by an Employer determined as of the close of the Limitation Year, and the denominator of which is the lesser of (a) 1.25 times the dollar limitation of Section 415(b)(1)(A) of the Code in effect for the Limitation Year as adjusted under Section 415(d)(1)(A), or (b) 1.4 times the Participant's average Compensation for the - 48 - three consecutive years that produces the highest average. Notwithstanding the above, if the Participant was a Participant as of the first day of the first Limitation Year beginning after December 31, 1986, in one or more Defined Benefit Plans main- tained by an Employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125% of the sum of the annual benefits under such plans which the Participant had accrued as of the close of the last Limitation Year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the Plan after May 5, 1986. The preceding sentence applies only if the Defined Benefit Plans individually and in the aggregate satisfied the requirements of Section 415 of the Code for all Limitation Years beginning before January 1, 1987. The Defined Contribution Plan Fraction referred to above is a fraction, the numerator of which is the sum of the Annual Additions to the Participant's Account under all Defined Contri- bution Plans maintained by an Employer (whether or not terminat- ed) as of the close of the Limitation Year, and the denominator of which is the sum of the lesser of the following amounts determined for such year and for each prior Year of Vesting Service with an Employer: (i) 1.25 times the dollar limitation in effect under Section 415(c)(1)(A) of the Code for such year, as adjusted under Section 415(d)(1)(B) (determined without regard to Section 415(c)(6) of the Code), or (ii) 1.4 times the amount which may be taken into account under Section 415(c)(1)(B) of the Code. If the Participant was a Participant as of the end of the first day of the first Limitation Year beginning after December - 49 - 31, 1986, in one or more Defined Contribution Plans maintained by an Employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted if the sum of this fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment, an amount equal to the product of (i) the excess of the sum of the fractions over 1.0 times (ii) the denominator of this fraction, will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last Limitation Year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the Plan made after May 5, 1986, but using the Section 415 of the Code limitation applicable to the first Limitation Year beginning on or after January 1, 1987. "Projected Annual Benefit" means the annual benefit to which a Participant would be entitled under the terms of the Defined Benefit Plan, if the Participant continued employment until the Participant reaches age 60 (or the current date, if later) and the Participant's Compensation for the Limitation Year and all other relevant factors used to determine such benefit remain constant until the Participant reaches age 60 (or the current date, if later). If, in any Limitation Year, the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction exceeds 1.0, the rate of benefit accruals under the Defined Contribution Plan will be reduced so that the sum of the fractions equals 1.0. - 50 - (B) Payment to Trust. Employer Contributions by each Employer will be paid to the Trust as each Employer's Board of Directors may from time to time determine on or before the due date for filing an Employer's federal income tax return for each Plan Year, including any extensions of such due date. Contribu- tions may be paid in cash or in securities, or other properties or shares having an equivalent value, or any combination thereof, as an Employer's Board of Directors may determine. To the extent that the Trust has cash obligations payable in one year from the date the Employer Contribution is due, such Employer Contribution shall be paid in cash. (C) Investment of Employer Contributions. Employer Contri- butions and/or any other assets received by the Trustee attribut- able to Employer Contributions under the Plan (including divi- dends) shall be used to invest primarily in Employer Securities from either holders of outstanding stock or from an Employer (by direct issuance thereof) or both. The Committee shall have control over and shall determine the time or the price at which Employer Securities may be purchased, the amount of Employer Securities to be purchased or the selection of the broker or dealer through or from whom they are to be purchased; provided that all purchases of Employer Securities will be accomplished at prices which do not exceed their fair market value. Employer Contributions and/or other assets received by the Trustee may also be used to satisfy any outstanding obligations of the Trust. Purchases of Employer Securities will be allocated (as hereinaf- ter provided) to Participants' Employer Accounts. - 51 - (D) Allocations to Participant's Employer Account. (1) A Participant's Employer Account will be credited with Employer Contributions, forfeitures and the Net Income (or loss) of the Trust in accordance with the following: (a) Employer Contributions and forfeitures for each Plan Year shall be allocated as of each Anniversary Date for which such contributions are made among those Participants who are employed on the last day of the Plan Year and who have 1,000 or more Hours of Service for such Plan Year; provided, however, a Participant in the first year of participation in the Plan who entered the Plan on July 1 of such year shall receive an allocation if such Participant has 501 Hours of Service for the Plan Year. Participants who died, retired or became disabled during the Plan Year shall be deemed to have been employed on the last day of the Plan Year. All Employer Contributions and for- feitures shall be allocated to a Participant's Employer Account in the same proportion as such Participant's partic- ipating Covered Compensation for such Plan Year bears to the total participating Covered Compensation of all Participants for such Plan Year. (b) Notwithstanding any other provision of the Plan, if the Plan would otherwise fail to meet the require- ments of Sections 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) of the Code and the Regulations thereunder because Employer Contributions would not be allocated to a sufficient number - 52 - or percentage of Participants for a Plan Year, then the following rules shall apply: (i) The group of Participants eligible to receive an allocation of Employer Contributions and forfeitures for the Plan Year shall be expanded to include the minimum number of Participants who would not otherwise be eligible as are necessary to satisfy the applicable test specified above. The specific Participants who shall become eligible under the terms of this paragraph shall be those who are actively employed on the last day of the Plan Year and, when compared to similarly situated Participants, have completed the greatest number of Hours of Service in the Plan Year. (ii) If after application of Paragraph (i) above, the applicable test is still not satisfied, then the group of Participants eligible to receive an allo- cation of Employer Contributions and forfeitures for the Plan Year shall be further expanded to include the minimum number of Participants who are not actively employed on the last day of the Plan Year as are neces- sary to satisfy the applicable test. The specific Participants who shall become eligible to share shall be those Participants, when compared to similarly situated Participants, who have completed the greatest number of Hours of Service in the Plan Year before terminating employment. - 53 - (iii) Nothing in this Section shall permit the reduction of a Participant's accrued bene- fit. Therefore, any amounts that have previously been allocated to Participants may not be reallocated to satisfy these requirements. In such event, an Employer shall make an additional contribution equal to the amount such affected Participants would have received had they been included in the allocations, even if it exceeds the amount which would be deductible under Section 404 of the Code. Any adjustment to the alloca- tions pursuant to this paragraph shall be considered a retroactive amendment adopted by the last day of the Plan Year. (iv) Notwithstanding the foregoing, for any Plan Year the Plan is a Top Heavy Plan beginning after December 31, 1992, if the Plan would fail to satisfy Section 410(b) of the Code if the coverage tests were applied by treating those Participants whose only allocation would otherwise be provided under the top heavy formula as if they were not currently benefiting under the Plan, then, for purposes of this Section, such Participants shall be treated as not benefiting and shall therefore be eligible to be included in the expanded class of Participants who will share in the allocation provided under the Plan's non-top heavy formula. - 54 - (c) Net Income (or loss) of the Trust -- The Net Income (or loss) of the Trust will be determined as of each Valuation Date. The Net Income (or loss) of the Trust which is attributable to assets held in a Participant's Employer Account will be allocated to such Participant's Employer Account in the ratio which the balance of such Employer Account on the Valuation Date bears to the sum of such balances for all Participants as of the same date. The Net Income (or loss) includes the increase (or decrease) in the fair market value of assets of the Trust, interest, divi- dends, other income and expenses since the preceding Valuation Date. It does not include the interest paid on any loan pursuant to Article 11 used by the Trust to purchase Employer Stock. (2) Equitable Allocation -- If the Committee deter- mines in making any valuation, allocation or adjustment to any Account under the provisions of the Plan that the strict applica- tion of the provisions of the Plan will not produce an equitable and nondiscriminating allocation among the Accounts of the Participants, it may modify any procedure specified in the Plan for the purpose of achieving an equitable and non-discriminatory allocation in accordance with the general concepts of the Plan; provided, however, that any such modification shall not be inconsistent with the provisions of Section 401(a) of the Code. - 55 - (3) A Participant's Account will be credited in the manner, wherever and whenever applicable, set forth in Arti- cle 6(D)(1) or 6(D)(2) above. (4) If an Employer does not maintain any other quali- fied plan, the amount of the Annual Addition which may be allo- cated under this Plan to the Participant's Account as of any Allocation Date shall not exceed the maximum permissible amount (based upon that Participant's Compensation up to such Allocation Date) reduced by the sum of any allocations of Annual Additions made to a Participant's Account under this Plan as of any preced- ing Allocation Date within the Limitation Year. If the Annual Addition under this Plan on behalf of a Participant is to be reduced as of any Allocation Date as a result of the above paragraph, such reduction shall be effected by proportionately reducing Employer Contributions and forfei- tures (if any) to be allocated under this Plan on behalf of such Participant as of such Allocation Date. If as a result of the allocation of forfeitures, or reasonable error in estimating a Participant's Compensation, or under other limited facts and circumstances which the Commis- sioner of the Internal Revenue Service finds justify, the alloca- tion of such Annual Addition is reduced, such reduction shall be treated as follows: (a) The amount of such reduction consisting of Employ- ee contributions shall be paid to the Employee as soon as administratively feasible. - 56 - (b) The amount of such reduction consisting of Employ- er Contributions and forfeitures shall be allocated and reallocated to other Participants' Accounts in accordance with the Plan formula for allocating Employer Contributions and forfeitures to the extent that such allocations do not cause the additions to any such other Participants' Accounts to exceed the lesser of the maximum permissible amount or any other limitation provided in said Plan. (c) To the extent that the reductions described in Article 6(D)(4)(b) above cannot be allocated to other Par- ticipants' Accounts, such reduction shall be allocated to a Suspense Account as forfeitures and held therein until the next succeeding date on which forfeitures can be applied under this Plan. In the event of termination of this Plan, the Suspense Account shall revert to an Employer to the extent it may not then be allocated to any Participant's Account, because of the limitations of Section 415 of the Code. Notwithstanding any other provision of this Article 6(D)(4), an Employer shall not contribute any amount that would cause an allocation to the Suspense Account as of the date the contribu- tion is allocated. If the contribution is made prior to the date as of which it is to be allocated, then such contribution shall not exceed an amount that would cause an allocation to the Suspense Account if the date of contribution was an allocation date. - 57 - ARTICLE 7 DISTRIBUTIONS OF EMPLOYER CONTRIBUTIONS (A) Full Vesting at Age 60, Total Disability or Death. A Participant who is employed by an Employer at the time the Participant attains age 60 years, dies or becomes Totally and Permanently Disabled shall become 100% vested to the amounts credited to such Participant's Employer Account. (B) Vesting and Forfeitures Upon Other Termination. A Participant who (1) terminates employment for any reason other than as stated in Article 7(A) above, and (2) incurs five consec- utive One Year Breaks in Service shall become entitled to the vested portion of such Participant's Employer Account as deter- mined by the vesting schedule set forth in Article 4 and the balance of the Participant's Employer Account shall be forfeited in accordance with Article 5(F). (C) Time of Distribution. The vested portion of a Participant's Employer Account shall be distributed within 60 days after the close of the Plan Year in which such Participant: (1) dies, (2) becomes Totally and Permanently Disabled, or (3) attains age 60 and terminates employment. (D) Permitted Distribution. Notwithstanding the provisions of Article 7(B) above, the vested portion of the Employer Account ("Vested Account") of any former Participant who terminated employment with an Employer prior to age 60 for a reason other than death or Total and Permanent Disability shall be distributed in accordance with the following: - 58 - (1) If the value of the Vested Account is less than $3,500, it shall be distributed during the first calendar quarter of the year after such former Participant has incurred five consecutive One Year Breaks in Service. (2) If the value of the Vested Account has ever been $3,500 or more, it shall be distributed during the first calendar quarter of any year after such former Participant has incurred five consecutive One Year Breaks in Service provided such Partic- ipant requests distribution in writing on or before December 1 of the prior year. (3) In any event, distribution shall occur not later than the first calendar quarter of the year after such former Participant has attained age 60. (E) Account Balances of Terminated Employees. The Employer Account for any terminated Employee shall be allocated all earnings and gains in accordance with Article 6(D)(1)(c). (F) Distributions to Participants While Still Employed. Distributions to a Participant while still employed for reasons of hardship or any other purpose are not permitted. (G) Valuation. A Participant's Employer Account will be valued as of the Valuation Date coinciding with or immediately following the date of death, Total and Permanent Disability, or termination of employment. All distributions hereunder shall be made not later than one year after the date of death, Total and Permanent Disability, or any other event described herein. (H) Distributions. Distributions of a Participant's Employer Account may be made in one of the following ways: - 59 - (1) By payment in a single lump sum. Distribution of amounts from a Participant's Employer Account will be made entirely in Employer Securities as determined by the Committee, and the value of any fractional securities will be paid in cash. (2) For distributions after December 31, 1992, by an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Roll- over. (I) Prior Distribution Designation. Notwithstanding the preceding, a distribution on behalf of any Participant or Benefi- ciary may be made in accordance with a signed distribution designation executed prior to January 1, 1984 in accordance with the provisions of Section 242 of the Tax Equity and Fiscal Responsibility Act of 1982. (J) Distribution Requirements. The forms of distribution shall be subject to the following requirements: (1) General Commencement of Payment Rules. In the event of retirement, death, or Total and Permanent Disability of a Participant, payment of a Participant's benefit shall, subject to the limitations set forth below, commence not later than 60 days after the close of the Plan Year in which such retirement, death or Total and Permanent Disability occurred. In the event of any other termination of employment, payment of a Participant- 's benefit shall, subject to the limitations set forth below, commence not later than 60 days after the close of the Plan Year in which the Participant incurs a Break in Service. Notwith- standing the foregoing, if a former Participant attains the age - 60 - for retirement, dies or becomes Totally and Permanently Disabled after terminating employment with an Employer, payment of that Participant's benefits shall, subject to the limitations set forth below, commence not later than 60 days after the close of the Plan Year in which such age is attained or such death or Total and Permanent Disability occurred. (2) How Long Distributions May Be Delayed. Notwith- standing any provisions to the contrary, the distribution of a Participant's benefits shall comply with Section 401(a)(9) of the Code and the Regulations thereunder (including Regulation 1.401(a)(9)-2, the provisions of which are incorporated herein by reference). A Participant's benefits shall be distributed to such Participant not later than April 1st of the calendar year following the later of (a) the calendar year in which the Partic- ipant attains age 70 1/2 or (b) the calendar year in which the Participant retires, provided, however, that this clause (b) not apply in the case of a Participant who is a "5% owner" at any time during the five Plan Year period ending in the calendar year in which the Participant attains age 70 1/2. Notwithstanding the foregoing, clause (b) above shall not apply to any Participant unless the Participant had attained age 70 1/2 before January 1, 1988 and was not a "5% owner" at any time during the Plan Year ending with or within the calendar year in which the Participant attained age 66 1/2 or any subsequent Plan Year. (3) Additional Limitations After Death of Participant. If the Participant dies before distribution of any of the Parti- cipant's benefits has begun, then the entire interest of the - 61 - Participant will be distributed within five years after the Participant's death. If the designated Beneficiary is the surviving spouse of the Participant, then the distributions under this subsection will not be required earlier than the date on which the Participant would have attained age 70 1/2. (4) Death Distribution Provisions. Upon the death of the Participant, the following distribution provisions shall take effect: (a) If the Participant dies after distribution of the Participant's interest has commenced, the remaining portion of such interest will continue to be distributed at least as rapidly as under the method of distribution being used prior to the Participant's death. (b) If the Participant dies before distribution of the Participant's interest commences, the Participant's entire interest will be distributed no later than five years after the Participant's death. (K) Rollover Contributions. The Plan shall not accept a transfer of assets from a plan described in Section 401(a)(11)(B) of the Code which will result in its being a direct or indirect transferee under Section 401(a)(11)(B) of the Code. (L) Put Option. If the Employer Stock purchased under this Article is not publicly traded when said securities are distrib- uted to a Participant, such Participant shall be entitled to a "put option" described as follows: The put option shall permit the Participant to sell such Employer Stock to an Employer at any time during two option - 62 - periods, at the fair market value of such shares. The first put option period shall be for at least 60 days beginning on the date of distribution. The second put option period shall be for at least 60 days beginning after the new determination of the fair market value of Employer Stock by the Committee (and notice to the Participant) in the following Plan Year. (M) Sale Options of Participants or Beneficiaries. (1) Option to Offer Securities. Any Participant, former Participant or Beneficiary who receives Employer Securities as benefits under this Plan may offer within 60 days after receipt of such securities, to sell the securi- ties to the Trustee or to the Company, or the Employer issuing such Employer Securities, under the terms and provi- sions of this Paragraph. (2) Terms of Option. The offer to sell the securities shall be made to the Trustee who shall inform the person offering the securities in writing, within 30 days after receipt of the offer, whether the offer is accepted or rejected. Any securities offered may be purchased by either the Trustee or the Company. Any securities purchased by the Trustee or by the Company shall be paid for in full at the purchase price specified in paragraph (3) below, in cash, at the closing upon surrender of the certificate or certifi- cates for the securities sold. The closing shall take place at a time and place fixed by the Trustee or the Company within a reasonable period after notice of acceptance of the offer. - 63 - (3) Purchase Price of Securities. The purchase price to be paid for any securities purchased pursuant to this Section shall be the value of the securities of an Employer as determined by the Committee. In determining such value, the Committee shall evaluate the securities at their current fair market value and may deduct any expenses incidental to the handling and transfer of said securities. Notwithstand- ing the foregoing, if any Participant receives a bona fide offer from a third party which meets or exceeds the value of the Employer securities, as determined by the Committee, and if said Participant offers to sell such securities to the Trustee (or the Company) the Participant shall submit a copy of such bona fide offer in writing to the Trustee which shall have a period of 30 days after receipt thereof to notify such Participant whether such offer is accepted or rejected; provided, however, that should such offer be accepted, the Trustee (or the Company) shall offer a price not less than that offered to the Participant by such third party. ARTICLE 8 GENERAL DISTRIBUTION PROVISIONS (A) Authority to Distribute. The Trustee will make distri- bution only after having received instructions from the Commit- tee. (B) Designation of Beneficiary. Distribution will be made to a Participant if living and, if not, to the Participant's - 64 - Beneficiary. If a Participant has no Beneficiary then living, or if the Participant's designation of a Beneficiary is not effec- tive, distribution will be made to the Participant's surviving spouse or, if none, equally to the Participant's surviving children or, if none, to the executor or administrator of the Participant's estate. Notwithstanding the provisions of this Article 8, if the Participant is married and the Participant's spouse has not consented to another Beneficiary pursuant to regulations established by the Committee, then such Participant's benefits shall be distributed to the Participant's spouse. (C) Distribution to Beneficiary. To insure that distribu- tion is made to the individual or individuals of a Participant's choice, the Participant should designate this Beneficiary upon becoming a Participant and keep such designation current by filing a new written designation with the Committee when desiring to change the Beneficiary. If the Committee determines that a person entitled to any distribution is physically unable or mentally incompetent to handle such distribution, it may direct the Trustee to apply such distribution for such person's benefit. (D) Assignment of Benefit. A Participant is not entitled as a matter of right to any payment, withdrawal or distribution under the Plan during participation; nor may the Participant's interest in the Plan as a Participant, or after participation has ended, or that of a Participant's Beneficiary, be assigned by voluntary or involuntary assignment or by operation of law. - 65 - ARTICLE 9 DIVERSIFICATION OF ACCOUNT (A) General Rule. If the Trustee borrows funds pursuant to Article 11, any Participant who has completed at least ten years of participation in the Plan and who has attained age 55 may elect within 90 days after the close of each Plan Year in the five Plan Year period beginning with the Plan Year in which the Participant attains age 55 (or, if later, beginning with the Plan Year in which the Participant completes ten years of participa- tion) to direct the Trustee as to the investment of at least 25% of the portion of such Participant's Employer Account (to the extent such 25% portion exceeds the amount to which a prior election under this paragraph applies). In the case of the election year in which the Participant can make the last elec- tion, the preceding sentence shall be applied by substituting "50%" for "25%". The Participant's direction (1) shall be provided to the Committee in writing; and (2) shall be effective no later than 180 days after the close of the Plan Year to which the direction applies. (B) Investment Options. The Plan may meet the requirements of paragraph (A) by offering at least three investment options (other than Stock) to each Participant making the election described in paragraph (A). (C) Distribution in Lieu of Investment Options. In lieu of providing investment options, the Plan may meet the requirements of paragraph (A) by distributing (notwithstanding Section 409(d) of the Code) the portion of the Participant's Employer Account - 66 - that is covered by the election within 90 days after the last day of the period during which the election can be made. Such distribution shall be subject to such requirements of the Plan concerning put options as would otherwise apply to a distribution of Employer Stock from the Plan. This paragraph (C) shall apply notwithstanding any other provision of the Plan other than such provisions as require the consent of the Participant to a distri- bution with a present value in excess of $3,500. If the Partici- pant does not consent, such amount shall be retained in this Plan. ARTICLE 10 VOTING EMPLOYER STOCK In the event voting Employer Stock is held in the Trust, the Committee shall determine whether such voting Employer Stock is Participant-Voted Stock or Committee-Voted Stock. If the Trustee borrows funds pursuant to Article 11, at the time such voting Employer Stock is released from the pledge and allocated to a Participant's Account, such voting Employer Stock shall be considered Participant-Voted Stock. Any voting Employer Stock still held under the pledge and all other voting Employer Stock held in the Trust shall be considered Committee-Voted Stock. (A) Committee-Voted Stock. The Committee shall instruct the Trust how to vote the Committee-Voted Stock held in the Trust. If the Trustee does not receive such instruction, then the Committee-Voted Stock shall not be voted. - 67 - (B) Participant-Voted Stock. Each Participant shall be entitled to vote the Participant-Voted Stock allocated to such Participant's Account. Accordingly, when a proxy statement for an annual or special meeting of the shareholders of Participant- Voted Stock is finalized, all Participants shall receive such proxy statement and a form for the Participant to instruct the Trustee how to vote such Participant-Voted Stock. The Partici- pant then shall complete the form and return it to the Trustee. Upon receipt of such instructions, the Trustee will vote the Participant-Voted Stock in accordance with each Participant's instructions. If within five days prior to such shareholder meeting, the Trustee does not receive instructions from any Participant, the Trustee shall vote such Participant's Partici- pant-Voted Stock in accordance with instructions received from the Committee. If the Trustee does not receive instructions from the Committee, then the Participant-Voted Stock shall not be voted. ARTICLE 11 SPECIFIC AUTHORIZATION TO BORROW FUNDS The Plan is intended to operate as an employee stock owner- ship plan as defined in Section 4975 of the Code in the event and to the extent the Trustee borrows funds pursuant to this Article 11. The Trustee is specifically authorized to borrow and pur- chase Employer Stock. Any loan or loans to the Trust or Trustee hereunder must contain the following provisions: (A) the loan must be a term loan for a specific period not to exceed 15 years - 68 - and at a reasonable rate of interest; (B) any collateral pledged to the creditor by the Trust shall consist only of the assets purchased with the borrowed funds or the Employer Stock used as collateral on a prior loan that is being repaid with the proceeds of the current loan (although in addition to such collateral, the Company may guarantee repayment of the loan); (C) under the terms of the loan, the creditor shall have no recourse against the Trust, except with respect to such collateral given for the loan and earnings attributable thereto, and contributions made hereun- der (other than contributions of stock) to meet obligations under the loan and earnings attributable to the investment of such contributions; (D) the loan shall be repaid only from Employer Contributions to the Trust and from amounts earned on Trust investments; (E) there must be sufficient Employer Contributions to the Trust in an amount to enable the Trust to pay each in- stallment of principal and interest on the loan on or before the date such installment is due, even if no tax benefit results from such Employer Contributions; and (F) upon the payment of any portion of the balance due on the loan, the assets originally pledged as collateral for such portion shall be released from encumbrance. The allocation of any Employer Stock released hereunder shall be in accordance with Treasury Regulation Section 54.4975-7(b)(8). - 69 - ARTICLE 12 ANNUAL STATEMENT As soon as practicable after each Anniversary Date, a Participant will receive a written statement showing as of the Anniversary Date the status of such Participant's Account at the end of the preceding year, including the cost attributable to a Participant's respective Account of all Employer Securities in such Account. ARTICLE 13 ADMINISTRATION (A) Committee. The Plan will be administered by a Commit- tee composed of not fewer than two nor more than ten individuals appointed by the Board of Directors of the Company to serve at its pleasure and without compensation. Each and every vacancy which may arise in the Committee by reason of resignation, death, removal or otherwise shall be filled by the Company. Any member of the Committee may resign of the member's own accord by deliv- ering a written resignation to the Company, with said resignation to be effective upon receipt thereof. Committee action may be by vote of two or more members at a meeting or in writing without the necessity of a meeting. Minutes of each meeting shall be kept. (B) Authority of Committee. The Committee shall be respon- sible for the administration of the Plan. The Committee shall have all such powers as may be necessary to carry out the provi- sions hereof and may, from time to time, establish rules for the - 70 - administration of the Plan and the transaction of the Plan's business. In making any such determination or rule, the Commit- tee shall pursue uniform policies as from time to time estab- lished by the Committee and shall not discriminate in favor of or against any Participant. The Committee shall have the exclusive right to make any finding of fact necessary or appropriate for any purpose under the Plan including, but not limited to, the determination of the eligibility for and the amount of any benefit payable under the Plan. The Committee shall have the exclusive right to interpret the terms and provisions of the Plan and to determine any and all questions arising under the Plan or in connection with the administration thereof, including, without limitation, the right to remedy or resolve possible ambiguities, inconsistencies, or omissions, by general rule or particular decision. The Committee shall make, or cause to be made, all reports or other filings necessary to meet both the reporting and disclosure requirements and other filing requirements of ERISA which are the responsibility of "plan administrators" under ERISA. To the extent permitted by law, all findings of fact, determinations, interpretations, and decisions of the Committee shall be conclusive and binding upon all persons having or claiming to have any interest or right under the Plan. (C) Trustees. Any one or more members of the Committee shall have the right to serve as a trustee or trustees while a member of the Committee. The Committee will give instructions to the Trustee on all matters within its discretion as provided in the Trust Agreement. The Committee is empowered to employ on - 71 - behalf of the Plan, and to direct the Trustee to employ on behalf of the Trust, brokers, investment advisers, custodians, accoun- tants, legal counsel, and other agents to assist it in the performance of its duties under the Plan. All costs and expenses of administering the Plan and any expenses of the Trustee shall be paid by the Trustee out of the Trust assets. The Company shall indemnify each member of the Committee against any personal liability or expense, except for the member's own gross negli- gence or willful misconduct. (D) Reasonable Care. The Committee shall discharge its duties and powers hereunder with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and like aims. ARTICLE 14 CREDIT FOR SERVICE WITH AFFILIATES In the event that any Employee is transferred from any participating Employer to another participating Employer, then any and all benefits which the Employee may have under this Plan, including without limitation Years of Vesting or Eligibility Service, shall be transferred to the transferee corporation in the same manner and under the same terms and conditions as if no transfer had occurred. Any and all matters pertaining to the transfer of a Participant's Employer Account for administration by the transferee corporation shall be accomplished in a manner - 72 - determined in the sole discretion of the Committee but applied on a uniform and non-discriminatory basis. ARTICLE 15 INALIENABILITY OF BENEFITS None of the benefits under the Plan are subject to the claims of creditors of Participants, or the Beneficiaries, and will not be subject to attachment, garnishment, or any other legal process whatsoever. Neither a Participant, a retired Participant, a Disabled Participant, nor a Participant's Beneficiaries may assign, sell, borrow on, or otherwise encumber any of the Partic- ipant's beneficial interest in the Plan and Trust Fund; nor shall any such benefits be in any manner liable for or subject to the deeds, contracts, liabilities, engagements or torts of any Participant, retired Participant, Disabled Participant, or Beneficiary who shall become bankrupt or attempt to anticipate, sell, alienate, transfer, pledge, assign, encumber or charge any benefit specifically provided for herein. The provisions of this Article 15 shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant pursuant to a domestic relations order, unless such order is determined to be a qualified domestic relations order, as defined in Section 414(p) of the Code, or any domestic rela- tions order entered before January 1, 1985. - 73 - ARTICLE 16 AMENDMENT AND TERMINATION (A) Right to Amend or Terminate. The Plan may be amended or terminated at any time by written amendment authorized by the Board of Directors of the Company and signed by an officer of the Company. The Company shall have the right, in said manner, to amend this Plan retroactively to its effective date in order initially to meet the requirements of Section 401(a) of the Code. No amendment shall retroactively reduce the rights of Partici- pants nor permit any part of the Trust assets to be diverted or used for any purpose other than for the exclusive benefit of the Participants and their Beneficiaries. If any amendment changes the vesting schedule in Article 4 of the Plan, any Participant with three or more years of service may, by filing a written request with the Committee within 60 days after the Participant has received notice of such amendment, elect to have such Partic- ipant's vested percentage computed under the vesting schedule in effect prior to the amendment. No amendment to the Plan shall decrease a Participant's balance or eliminate an optional form of distribution. (B) Withdrawal by an Employer. Any Employer may, by action of its respective Board of Directors, terminate participation in the Plan. (C) Termination. If the Plan is terminated, participation will end on the last date on which the net assets of the Trust are finally determined. Further, upon the termination or partial termination of the Plan or upon the complete discontinuance of - 74 - contributions by the Company, a Participant's entire interest in the Plan shall be nonforfeitable. Upon final termination of the Trust, the Committee may direct the Trustee to distribute all assets of the Trust, in the form of Employer Securities after payment of all obligations properly chargeable against the Trust, to the Participants, former Participants and Beneficiaries, in accordance with the value of the units credited to their respec- tive Employer Accounts as of the effective date of termination. (D) Distribution of Assets. Notwithstanding the foregoing, in the event of any termination or discontinuance hereunder, the Company (or the Committee) may, in its sole and absolute discre- tion, direct the Trustee, or any other person holding the assets of the Plan, to maintain (or distribute) the assets of the Trust, after payment of all obligations properly chargeable against the Trust, and after allocation of the respective units to the Participants, former Participants and Beneficiaries. Such assets shall be held, maintained and distributed in the manner provided for elsewhere herein as if the Plan had not been terminated. (E) IRS Approval. It is intended that this Plan and the Trust constitute a qualified trust under Section 401(a) of the Code. In the event the Plan and Trust do not receive the initial approval of the Internal Revenue Service, then the Plan shall be terminated at such date not later than 90 days after the date on which the Internal Revenue Service has failed to approve the Plan, as the Board of Directors may specify, and the assets, together with any income received or accrued thereon and less any benefits, obligations and expenses, will be distributed promptly - 75 - to the Company or Participants in this Plan in accordance with this provision and in such manner as the Committee may direct. ARTICLE 17 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS This Plan and Trust shall not be merged or consolidated with, nor shall any assets or liabilities be transferred to, any other plan unless the benefits payable to each Participant, if the other plan was terminated immediately after such action, would be equal to or greater than the benefits to which the Participant would have been entitled if this Plan had been terminated immediately before such action. ARTICLE 18 PARTICIPANT'S RIGHTS Except as may be specifically provided by law, neither the establishment of the Plan and Trust hereby created, nor any modification thereof, nor the creation of any fund or account, nor the payment of any benefits shall be construed as giving to any Participant or other person any legal or equitable right against any Employer, or any officer or Employee thereof, or the Trustee, except as herein provided. All Capital Accumulations will be paid only from the Trust assets and neither any Employer nor the Committee nor the Trustee nor any officer or director of any Employer shall have any duty or liability to furnish the Trust with any funds, securities or other assets, except as expressly provided in the Plan. - 76 - ARTICLE 19 MISCELLANEOUS (A) Additional Powers of the Committee. The Committee may promulgate any and all rules, procedures, or other conditions necessary to effectuate and accomplish the purposes set forth herein and may direct the Trustee or any other interested persons as to the manner and procedure necessary to comply with the provisions hereof. (B) Claims Procedure. Should any claim by a Participant (or Beneficiary) for benefits hereunder be denied, an Employer shall provide adequate written notice to such Participant (or Beneficiary) setting forth, in a manner calculated to be under- stood by said Participant (or Beneficiary), the specific reasons for such denial, specific references to pertinent Plan provi- sions, a description of any additional material or information necessary for the claimant to perfect such Participant's claim, an explanation of why such material or information is needed, and an explanation of the Plan's review procedure. The Committee's obligation hereunder shall be satisfied by sending such notice by United States first-class mail to the last-known address of such Participant (or Beneficiary). Each Participant (or Beneficiary) whose claim is denied shall be afforded a reasonable opportunity for a full and fair review of the decision to deny such claim by the Committee upon delivering the request for such review in writing to the Committee within 60 days following receipt of notice of the denial. Any Participant (or Beneficiary) request- ing a review of the denial of a claim shall have the right to be - 77 - represented by counsel, to review pertinent documents relating to the denial, and to submit issues and comments in writing. Within 60 days after the receipt of such request for review, the Commit- tee shall review or reconsider the claim of such Participant (or Beneficiary) and shall give written notice to such Participant (or Beneficiary) of its decision. (C) Construction of Plan and Trust Agreement. (1) This Plan shall be governed by and construed under the laws of the State of Ohio and accompanying Trust Agreement under the laws of the jurisdiction within which the Trustee is located. In the event of a conflict between the Plan and Trust Agreement, the law of the Trustee's jurisdiction shall control as to the acts and authority of the Trustee and any interpretations of the Trust Agreement. (2) The Plan is intended to operate as a profit sharing plan unless and to the extent the Trustee borrows funds pursuant to Article 11. In the event and to the extent the Trustee borrows funds pursuant to Article 11, that portion of the Plan shall operate as an Employee Stock Ownership Plan under Section 4975 of the Code. (D) Rule Against Perpetuities. If the continued existence of the Trust beyond a certain period would cause it to fail by operation of law, it shall continue for the maximum period permitted and shall then terminate with distribution of assets as provided in Article 8. (E) Limitation Year. The Company hereby adopts as its Limitation Year under Section 415 of the Code, as amended, its - 78 - fiscal year. All Compensation paid to any Employee or Partici- pant of the Plan with respect to any Limitation Year shall be the amount paid for any fiscal year in which an Employer is on a cash basis or the amount accrued for any such fiscal year in which an Employer is on an accrual basis. (F) Use of Independent Appraiser. All valuations of Employer Securities which are not readily tradable on an estab- lished securities market shall be made by an independent apprais- er. ARTICLE 20 TOP HEAVY RULES Provisions of this Article 20 shall be effective in any Plan Year after December 31, 1983, in which the Plan is determined to be a Top Heavy Plan. (A) Definitions. As used in this Article 20, the following terms shall have the following meanings: (1) The term "Key Employee" shall mean any Employee or former Employee (and the Beneficiaries of such Employee) who at any time during the determination period (which shall mean the current Plan Year and the preceding four Plan Years) was an officer of an Employer if such individual's annual Compensation exceeded 150% of the dollar limitation under Section 415(b)(1)(A) of the Code; one of the ten Employees who is both an owner (or considered an owner under Section 318 of the Code) and whose Compensation exceeded the limitation under Section 415(c)(1)(A) of the Code, including - 79 - cost of living increases; a 5% owner of an Employer; or a 1% owner of an Employer who has annual Compensation of more than $150,000. The determination period is one Plan Year containing the Determination Date and the four preceding Plan Years. The term "Determination Date" shall mean for any Plan Year subsequent to the first Plan Year, the last day of the preceding Plan Year, and for the first Plan Year, the last day of that year. If two or more plans constitute an aggregation group in accordance with Section 416(g)(2) of the Code, the plans shall be aggregated by adding together the results for each Plan as of the Determination Dates for such Plans that fall within the same calendar year. The determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the regulations thereunder. (2) The term "Permissive Aggregation Group" shall mean the Required Aggregation Group of plans plus any other plan or plans of an Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Sections 401(a)(4) and 410 of the Code. (3) The term "Required Aggregation Group" shall mean (a) each qualified plan of an Employer in which at least one Key Employee participates, (b) any other qualified plan of an Employer which enables a plan described in (a) to meet the requirements of Sections 401(a)(4) or 410 of the Code and (c) any plan of an Employer which terminated during the - 80 - five-year period ending on the Determination Date if such terminated plan would have been included in the required Aggregation Group if it had not been terminated. (B) The Determination of Top Heavy. The Plan shall be a Top Heavy Plan for the Plan Year if as of the last day of the preceding Plan Year: (1) The value of the Employer Accounts (but not in- cluding any allocations to be made as of such last day of the Plan Year except contributions actually made on or before such date and allocated pursuant to Article 6) of all Participants who are Key Employees exceeds 60% of the value of the sum of Employer Accounts (as calculated above) of all Participants (the "60% test"); or (2) The Plan is part of a Required Aggregation Group and the Required Aggregation Group is Top Heavy. However, and notwithstanding the "60% test", the Plan shall not be a Top Heavy Plan for any Plan Year in which the Plan is part of a Required or Permissive Aggregation Group which is not Top Heavy. (C) Minimum Contribution. For any Plan Year in which the Plan is a Top Heavy Plan, an Employer shall contribute to each Participant's Employer Account (regardless of the number of Hours of Service of such Participant) an amount equal to the lesser of: (1) 3% of such Participant's Covered Compensation; or (2) The largest percent an Employer actually contrib- utes to Employer Accounts of Participants who are Key Em- ployees (as defined in Section 416(i) of the Code). - 81 - Any amounts contributed by an Employer which exceed the minimum contribution hereunder shall be allocated in accordance with Article 6, but considering the amounts contributed pursuant to this Article 20(C). (D) Minimum Vesting. If the Plan is a Top Heavy Plan, a Participant's vested percentage in such Participant's Employer Account shall not be less than the percentage determined in accordance with the following table, notwithstanding the provi- sions of Article 4. Years of Service Percentage Vested Percentage Forfeited Less than 3 years 0% 100% 3 years or more 100% 0% (E) Compensation Limitation. For any Plan Year beginning prior to January 1, 1989 in which the Plan is a Top Heavy Plan, the term "Covered Compensation" of any Participant taken into account under this Plan shall not exceed the first $200,000 of such Compensation (as increased from time to time by the Code). (F) Maximum Benefits. For any Plan Year in which the Plan is a Top Heavy Plan, Article 6(A) shall be read by substituting the number "1.00" for the number "1.25" whenever it appears in such paragraph, except such substitution shall not have the effect of reducing any benefit accrued under a Defined Benefit Plan prior to the first day of the Plan Year in which this provision becomes applicable. (G) Minimum Benefits for Two Plans. In the event a non- Key Employee is a Participant in both this Plan and a Defined Benefit Plan, the minimum contribution required under this - 82 - Article 20(C) shall be 5% instead of 3% of Covered Compensation. To record the adoption of this Amended and Restated Plan, the Company has caused its appropriate officers to affix its corporate name this day of , 1994. AMERICAN FINANCIAL CORPORATION By: - 83 - ADOPTION OF THE AMERICAN FINANCIAL CORPORATION EMPLOYEE STOCK OWNERSHIP/RETIREMENT PLAN (Amended and Restated as of January 1, 1994) The undersigned do hereby adopt the American Financial Corporation Employee Stock Ownership/Retirement Plan as amended and restated as of January 1, 1994. AMERICAN CUSTOM INSURANCE GREAT AMERICAN INSURANCE COMPANY SERVICES HOLDING COMPANY BY:____________________________ BY:___________________________ ITS:___________________________ ITS:__________________________ Date:__________________________ Date:_________________________ AMERICAN EMPIRE SURPLUS LINES GRIZZLY GOLF CENTER, INC. INSURANCE COMPANY BY:____________________________ BY:___________________________ ITS:___________________________ ITS:__________________________ Date:__________________________ Date:_________________________ AMERICAN FINANCIAL CORPORATION MID-CONTINENT CASUALTY COMPANY BY:____________________________ BY:___________________________ ITS:___________________________ ITS:__________________________ Date:__________________________ Date:_________________________ AMERICAN MONEY MANAGEMENT PROVIDENT TRAVEL CORPORATION CORPORATION BY:____________________________ BY:___________________________ ITS:___________________________ ITS:__________________________ Date:__________________________ Date:_________________________ BROTHERS PROPERTY CORPORATION STONEWALL INSURANCE COMPANY BY:____________________________ BY:___________________________ ITS:___________________________ ITS:__________________________ Date:__________________________ Date:_________________________ DEMPSEY & SIDERS AGENCY, INC. STONEWALL UNDERWRITERS, INC. BY:____________________________ BY:___________________________ ITS:___________________________ ITS:__________________________ Date:__________________________ Date:_________________________ - 84 - FIDELITY ENVIRONMENTAL INSURANCE COMPANY BY:____________________________ ITS:___________________________ Date:__________________________ -----END PRIVACY-ENHANCED MESSAGE-----