<PAGE>
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-
12
AMERICAN FINANCIAL GROUP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
Title of each class of securities to which transaction
applies:
Aggregate number of securities to which transaction
applies:
Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined)
Proposed maximum aggregate value of transaction:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identity the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
AMERICAN FINANCIAL GROUP, INC.
One East Fourth Street
Cincinnati, Ohio 45202
Notice of Annual Meeting of Shareholders
and Proxy Statement
To be Held on May 19, 1999
Dear Shareholder:
We invite you to attend our Annual Meeting of Shareholders
on Wednesday, May 19, 1999, in Cincinnati, Ohio. At the meeting,
you will hear a report on our operations and have an opportunity
to meet your directors and executives.
This booklet includes the formal notice of the meeting and
the proxy statement. The proxy statement tells you more about
the agenda and procedures for the meeting. It also describes how
your Board of Directors operates and provides information about
the director candidates.
Even if you own only a few shares of common stock, we want
your shares to be represented at the meeting. I urge you to
complete, sign, date and return your proxy card promptly.
Our proxy statement has a new look this year. We hope that
you find it easy to read and understand.
Sincerely,
Carl H. Lindner
Carl H. Lindner
Chairman of the Board and
Chief Executive Officer
Cincinnati, Ohio
April 16, 1999
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF AMERICAN FINANCIAL GROUP, INC.
Date: Wednesday, May 19, 1999
Time: 10:30 a.m. Eastern Daylight Savings Time
Place: The Cincinnatian Hotel
Second Floor _ Filson Room
601 Vine Street
Cincinnati, Ohio
Purpose: Election of Directors
Approval of an Amendment to the
AFG Stock Option Plan
Conduct other business if
properly raised
Record Date: March 31, 1999 - Only shareholders
of record at the close of business
on that date are entitled to
receive notice of and to vote at
the meeting.
Mailing Date: The approximate mailing date of
this proxy statement and accompany-
ing proxy form is April 16, 1999.
Your vote is important. Please complete, sign, date and
return your proxy card, which is the bottom portion
of the enclosed perforated form.
<PAGE>
Table Of Contents
Page
GENERAL INFORMATION 1
ELECTION OF DIRECTORS 2
APPROVAL OF AN AMENDMENT TO THE STOCK OPTION PLAN 2
PRINCIPAL SHAREHOLDERS 4
MANAGEMENT 5
COMPENSATION 8
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS 14
INDEPENDENT AUDITORS 15
NOMINATIONS AND SHAREHOLDER PROPOSALS 15
REQUESTS FOR FORM 10-K 15
<PAGE>
GENERAL INFORMATION
Record Date; Shares Outstanding
As of March 31, 1999, the record date for determining
shareholders entitled to notice of and to vote at the meeting,
the Company had outstanding 58,612,176 shares of common stock,
excluding 18,666,614 shares beneficially owned by American
Financial Corporation ("AFC") and 1,367,075 shares held by
American Premier Underwriters, Inc., each a subsidiary of
AFG. Under Ohio law, shares held by subsidiaries are not
entitled to vote and are therefore not considered to be
outstanding for purposes of the meeting. Each share of
outstanding common stock is entitled to one vote on each matter
to be presented at the meeting. Abstentions (including
instructions to withhold authority to vote for one or more
nominees) and broker non-votes are counted for purposes of
determining a quorum but will not be cast with respect to any
item voted on at the meeting. As a result, abstentions and
broker non-votes will have no effect on the outcome of any matter
voted on at the meeting.
Cumulative Voting
Shareholders have cumulative voting rights in the election
of directors and one vote per share on all other matters.
Cumulative voting allows a shareholder to multiply the number of
shares owned on the record date by the number of directors to be
elected and to cast the total for one nominee or distribute the
votes among the nominees as the shareholder desires. Nominees
who receive the greatest number of votes will be elected. In
order to invoke cumulative voting, notice of cumulative voting
must be given in writing to an executive officer of the Company
not less than 48 hours before the time fixed for the holding of
the meeting.
Proxies
If a choice is specified on a properly executed proxy form,
the shares will be voted accordingly. If a proxy form is signed
without a preference indicated, those shares will be voted "FOR"
the election of the eight nominees proposed by the Board of
Directors and "FOR" the proposed amendment to the AFG Stock
Option Plan. The authority solicited by this Proxy Statement
includes
<PAGE>
discretionary authority to cumulate votes in the election of
directors. If any other matters properly come before the meeting
or any adjournment thereof, each properly executed proxy form
will be voted in the discretion of the proxies named therein.
Shareholders may vote in person or by proxy at the meeting.
Proxies given may be revoked at any time by filing with the
Company either a written revocation or a duly executed proxy
bearing a later date, or shareholders may revoke their proxies by
appearing at the meeting and voting in person.
Solicitation of proxies is being made by management at the
direction of the Company's Board of Directors, without additional
compensation, through the mail, in person, by facsimile or by
telephone. The cost will be borne by the Company. In addition,
the Company will request brokers and other custodians, nominees
and fiduciaries to forward proxy soliciting material to the
beneficial owners of shares held of record by such persons, and
the Company will reimburse them for their expenses in so doing.
The Company has also retained Morrow & Co., Inc. to aid in the
solicitation of proxies for a fee estimated at $4,000 plus out of
pocket expenses.
Adjournment and Other Matters
Approval of a motion for adjournment or other matters
brought before the meeting requires the affirmative vote of a
majority of the shares voting at the meeting. Management knows
of no other matters to be presented at the meeting other than
those stated in this document.
<PAGE>
PROPOSALS
Proposal No. 1 ELECTION OF DIRECTORS
The Board of Directors has nominated eight directors to hold
office until the next annual meeting of Shareholders and until
their successors are elected and qualified. If any of the
nominees should become unable to serve as a director, the proxies
will be voted for any substitute nominee designated by the Board
of Directors but, in any event, no proxy may be voted for more
than eight nominees. The eight nominees who receive the greatest
number of votes will be elected.
The nominees for election to the Board of Directors are:
Carl H. Lindner Theodore H. Emmerich
Keith E. Lindner James E. Evans
Carl H. Lindner III Thomas M. Hunt
S. Craig Lindner William R. Martin
All of these nominees were elected directors at the last
annual meeting of shareholders of the Company held on May 28,
1998. See "Management" and "Compensation" below for information
concerning the background, securities holdings, remuneration and
other matters relating to the nominees.
The Board of Directors recommends that shareholders vote FOR
the election of these eight nominees as directors.
Proposal No. 2 APPROVAL OF AN AMENDMENT TO THE
AMERICAN FINANCIAL GROUP, INC. STOCK OPTION PLAN
On March 23, 1999, the Board of Directors amended the
Company's stock option plan, subject to shareholder approval at
the annual meeting, to increase the maximum number of shares of
common stock which may be purchased upon exercise of options
under the plan from 13,237,613 to 15,500,000 (in each case,
subject to anti-dilution provisions).
<PAGE>
As of the record date, and since the inception of the stock
option plan in 1980, 13,181,376 shares of common stock had been
issued, or were reserved for issuance, upon exercise of stock
options previously granted. At the record date, only 56,237
shares remained available for grant. The Board of Directors
believes that the amendment is necessary to permit the continued
use of stock option grants as an important component of AFG's
executive compensation system.
The following summary of the stock option plan is not
intended to be exhaustive and does not describe state or local
tax consequences.
The plan provides for the granting of two types of options _
incentive stock options which are qualified under the Internal
Revenue Code for special tax treatment and non-qualified stock
options, which are not. While the decision whether to grant an
incentive stock option or a non-qualified stock option is at the
discretion of the Compensation Committee, it is presently
expected that a majority of option recipients will be granted
incentive stock options. All options granted to non-employee
directors of AFG are non-qualified stock options.
No income is realized by the optionee at the time a non-
qualified stock option is granted. Upon exercise, ordinary
income is generally realized by the optionee in an amount equal
to the difference between the option price (the amount paid for
the shares) and the fair market value of the shares on the date
of exercise, and the optionee's employer receives a tax deduction
in the same amount. Upon disposition, appreciation or
depreciation after the date of exercise is treated as either
short-term or long-term capital gain or loss, as the case may be.
Income is not recognized by the optionee upon the grant or
exercise of an incentive stock option. If shares of common stock
are issued to an optionee pursuant to the exercise of an
incentive stock option, and if no disqualifying disposition
(discussed below) of such shares is made by such optionee within
two years after the date of grant or within one year after the
exercise of such shares by such optionee, then upon sale of such
shares, any amount realized in excess of the option price will be
<PAGE>
taxed to such optionee as long-term capital gain and any loss
sustained will be a long-term capital loss, and no deduction will
be allowed to the optionee's employer. The exercise of an
incentive stock option will give rise to alternative minimum
taxable income to the optionee to the extent of the excess of the
fair market value of the shares exercised over the option price
unless there has been a disqualifying disposition in the year
exercised.
A disqualifying disposition occurs if shares of common stock
acquired upon the exercise of an incentive stock option are
disposed of prior to the expiration of either holding period
described above; generally (a) the optionee will realize ordinary
income in the year of disposition in an amount equal to the
excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized on the disposition of
the shares) over the option price thereof, and (b) the optionee's
employer will be entitled to deduct such amount. Any further
gain or loss realized by the participant will be taxed as short-
term or long-term capital gain or loss, as the case may be, and
will not result in any deduction by the employer.
Subject to exceptions for disability or death, an incentive
stock option will not be eligible for the incentive stock option
tax treatment described above if it is exercised more than three
months following the termination of employment. If an incentive
stock option is exercised at a time when it is no longer eligible
for incentive stock option tax treatment, the option is treated
as a non-qualified stock option.
Both types of employee stock options generally become
exercisable upon the first anniversary of the date of grant to
the extent of twenty percent of the total shares covered by the
option with an additional twenty percent of the total shares
covered by the option becoming exercisable on each succeeding
anniversary. This right of exercise is cumulative and may be
exercisable in whole or in part. The term of each option is
generally ten years. Incentive stock options may not be granted
for terms of more than ten years.
<PAGE>
Upon the exercise of an option, the underlying shares of
common stock must be paid for in full, either by check payable to
the Company or by delivery of common stock having a fair market
value equal to the exercise price, or in any combination thereof.
The employee must pay to the Company an amount equal to any tax
which the Company is required to withhold under any federal,
state or local tax laws. Payment of the exercise price or
withholding amount may be satisfied with respect to the exercise
of any option by making an election to either have the Company
withhold from the shares otherwise to be delivered such number of
shares of the Company which have a fair market value equal to the
exercise price and/or the amount of the withholding requirement
or deliver to the Company sufficient shares of common stock
having a fair market value equal to the exercise price or the
withholding requirement.
The directors appointed to the Committee which administers
the stock option plan are Messrs. Emmerich, Hunt and Martin.
Other than members of the Committee, all 10,000 employees and
directors of the Company and its subsidiaries are eligible to be
considered for the grant of options, although it is expected that
the majority of options will be granted to less than five percent
of those persons.
Approval of the Plan amendments requires the affirmative
vote of the majority of the shares voting at the meeting in
person or by proxy.
The Board of Directors recommends that shareholders vote FOR
the proposal to approve the amendments to American Financial
Group, Inc. Stock Option Plan.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following shareholders are the only persons known by the
Company to own beneficially 5% or more of its outstanding common
stock as of March 31, 1999:
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
------------------------------------------
Name and Address Obtainable
of Common Stock upon Exercise Percent
Beneficial Owner Held (a) of Options (b) Total of Class(c)
----------------- ------------ -------------- ----- -----------
<C> <S> <S> <S> <S>
Carl H. Lindner
One East Fourth Street 3,406,041 (d) - 3,406,041 5.8%
Cincinnati, Ohio 45202
Carl H. Lindner III
One East Fourth Street 5,387,213 (e) 422,545 5,809,758 9.8%
Cincinnati, Ohio 45202
S. Craig Lindner
One East Fourth Street 5,387,213 (f) 344,908 5,732,121 9.7%
Cincinnati, Ohio 45202
Keith E. Lindner
250 East Fifth Street 5,386,653 (g) 342,545 5,729,188 9.7%
Cincinnati, Ohio 45202
Paul V. Muething, Trustee
One East Fourth Street 5,192,201 (h) - 5,192,201 8.9%
Cincinnati, Ohio 45202
The American Financial
Group, Inc. Retirement 7,402,282 - 7,402,282 12.6%
and Savings Plan (i)
One East Fourth Street
Cincinnati, Ohio 45202
</TABLE>
(a) Unless otherwise noted, the holder has sole voting and
dispositive power with respect to the shares listed.
<PAGE>
(b) Represents shares of common stock which may be acquired
within 60 days of March 31, 1999 through the exercise of
options granted under the Company's Stock Option Plan. The
Lindner family members listed above hold options (both
vested and unvested) to purchase the following numbers of
shares of common stock:
Carl H. Lindner 0
Keith E. Lindner 534,545
Carl H. Lindner III 534,545
S. Craig Lindner 534,545
(c) The percentages of outstanding shares of common stock
beneficially owned (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934) by Carl H. Lindner III,
S. Craig Lindner and Keith E. Lindner are 7.4%, 7.0% and
10.6%, respectively, after attributing the shares held in
various trusts for the benefit of the minor children of S.
Craig Lindner and Carl H. Lindner III (for which Keith E.
Lindner acts as trustee with voting and dispositive power)
to Keith E. Lindner.
(d) Includes 3,354,182 shares held by his spouse, but excludes
6,359,065 shares held in two trusts for the benefit of his
family for which third parties act as trustees with voting
and dispositive power. Also excludes 85,591 shares held in
a charitable foundation over which Mr. Lindner has sole
voting and dispositive power but no pecuniary interest.
(e) Includes 19,088 shares held by his spouse individually or in
a trust over which she has voting and dispositive power and
650,744 shares which are held in various trusts for the
benefit of his minor children for which Keith E. Lindner
acts as trustee with voting and dispositive power.
(f) Includes 71,425 shares held by his spouse as custodian for
their minor children or in a trust over which she has voting
and dispositive power and 775,714 shares which are held in
various trusts for the benefit of their minor children for
which Keith E. Lindner acts as trustee with voting and
dispositive power.
<PAGE>
(g) Includes 341 shares held in a trust over which his spouse
has voting and dispositive power and excludes 1,426,458
shares (described in footnotes (e) and (f) above) which are
held in various trusts for the benefit of the minor children
of his brothers, Carl H. Lindner III and S. Craig Lindner,
over which Keith E. Lindner has sole voting and dispositive
power but no pecuniary interest.
(h) Includes 5,191,976 shares (of the 6,359,065 shares
referenced in footnote (d) above) which are held in a trust
for the benefit of the family of Carl H. Lindner over which
Mr. Muething has sole voting and dispositive power as
trustee but no pecuniary interest.
(i) The members of the Administrative Plan Committee of the
American Financial Group, Inc. Retirement and Savings Plan
(the "RASP") direct the voting of the securities held by the
RASP. Both of the members of such Committee are executives
of the Company.
Carl H. Lindner, S. Craig Lindner, Carl H. Lindner III,
Keith E. Lindner and trusts for their benefit (collectively, the
"Lindner Family") were the beneficial owners of approximately 45%
of the Company's common stock at March 31, 1999. The Lindner
Family may be deemed to be controlling persons of the Company.
<PAGE>
MANAGEMENT
The directors, nominees and executive officers of the
Company are:
Director or
Age* Position Executive Since
---- ------------------------------- ----------------
Carl H. Lindner 79 Chairman of the Board and 1959
Chief Executive Officer
S. Craig Lindner 44 Co-President and a Director 1979
Keith E. Lindner 39 Co-President and a Director 1981
Carl H. Lindner III 45 Co-President and a Director 1980
Theodore H. Emmerich 72 Director 1988
James E. Evans 53 Senior Vice President and
General Counsel and a Director 1976
Thomas M. Hunt 75 Director 1982
William R. Martin 70 Director 1994
Keith A. Jensen 48 Senior Vice President 1999
Thomas E. Mischell 51 Senior Vice President - Taxes 1985
Fred J. Runk 56 Senior Vice President and Treasurer 1978
*As of March 31, 1999
Carl H. Lindner (Chairman of the Executive Committee) Mr.
Lindner is the Chairman of the Board and Chief Executive Officer
of the Company. During the past five years, Mr. Lindner has also
been Chairman of the Board and Chief Executive Officer of AFC, a
diversified financial services company which became a subsidiary
of the Company as a result of a transaction occurring in April
1995. He is Chairman of the Board of Directors of American
Annuity Group, Inc. and Chiquita Brands International, Inc. Mr.
Lindner is the father of Carl H. Lindner III, S. Craig Lindner
and Keith E. Lindner.
S. Craig Lindner (Member of the Executive Committee) Since
March 1996, Mr. Lindner has served as Co-President and a director
of the Company. For over five years, Mr. Lindner has been
President of American Annuity Group, an 83%-owned subsidiary of
AFC that markets tax-deferred annuities principally to employees
<PAGE>
of educational institutions and offers life and health insurance
products. Mr. Lindner is also President of American Money
Management Corporation, a subsidiary which provides investment
services for the Company and its affiliated companies. Mr.
Lindner is also a director of American Annuity Group and AFC.
Keith E. Lindner (Member of the Executive Committee) Since
March 1996, Mr. Lindner has served as Co-President and a director
of the Company. In March 1997, Mr. Lindner was named Vice
Chairman of the Board of Directors of Chiquita Brands
International, a worldwide marketer and producer of bananas and
other food products in which the Company has a 37% ownership
interest. For more than five years prior to that time, Mr.
Lindner had been President and Chief Operating Officer and a
director of Chiquita. Mr. Lindner is also a director of AFC.
Carl H. Lindner III (Member of the Executive Committee) Mr.
Lindner was President of the Company from February 1992 until he
became Co-President in March 1996. For approximately ten years,
Mr. Lindner has been principally responsible for the Company's
property and casualty insurance operations. Mr. Lindner is also a
director of AFC.
Theodore H. Emmerich (Chairman of the Audit Committee;
Member of the Compensation Committee) Prior to his retirement in
1986, Mr. Emmerich was managing partner of the Cincinnati office
of the independent accounting firm of Ernst & Whinney. He is
also a director of AFC, Carillon Fund, Inc., Carillon Investment
Trust, Gradison Custodial Trust, Gradison-McDonald Municipal
Custodial Trust, Gradison-McDonald Cash Reserve Trust and Summit
Investment Trust.
James E. Evans Since April 1995, Mr. Evans has served as
Senior Vice President and General Counsel of the Company. For
more than five years, he has also been Vice President and General
Counsel of AFC. Mr. Evans is also a director of AFC.
Thomas M. Hunt (Member of the Compensation Committee)
During the past five years, Mr. Hunt has been Chairman of the
Board of Hunt Petroleum Corporation, an oil and gas production
company. He is also a director of AFC.
<PAGE>
William R. Martin (Chairman of the Compensation Committee;
Member of the Audit Committee) During the past five years, Mr.
Martin has been Chairman of the Board of MB Computing, Inc., a
computer software and services company. Mr. Martin is also a
director of American Annuity Group and AFC.
Keith A. Jensen Mr. Jensen was named a Senior Vice
President of the Company in February 1999. Since February 1997,
he has also been Senior Vice President of American Annuity Group.
For more than five years prior thereto he was a partner with
Deloitte & Touche LLP, an independent accounting firm.
Thomas E. Mischell is Senior Vice President - Taxes of the
Company. He has served as a Vice President of AFC for over five
years.
Fred J. Runk is Senior Vice President and Treasurer of the
Company. He has served as Vice President and Treasurer of AFC
for more than five years.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires AFG's officers,
directors and persons who own more than ten percent of AFG's
common stock to file reports of ownership with the Securities and
Exchange Commission and to furnish AFG with copies of these
reports. The Company believes that all filing requirements were
met during 1998.
<PAGE>
Securities Ownership
The following table sets forth information, as of March 31,
1999, concerning the beneficial ownership of equity securities of
the Company and its subsidiaries by each director, nominee for
director, the executive officers named in the Summary
Compensation Table (see "Compensation" below) and by all
directors and executive officers as a group. Such information is
based on data furnished by the persons named. Except as set
forth in the following table, no director or executive officer
beneficially owned 1% or more of any class of equity security of
the Company or any of its subsidiaries outstanding at March 31,
1999.
Amount and Nature of Beneficial
Ownership (a) (b)
Shares of Common Stock
Name of Shares of Common Obtainable on Exercise
Beneficial Owner Stock Held of Options (c)
- ----------------------- ------------------ ----------------------
Carl H. Lindner (d) 3,406,041 (e) -
Carl H. Lindner III (d) 5,387,213 (f) 422,545
S. Craig Lindner (d) 5,387,213 (g) 344,908
Keith E. Lindner (d) 5,386,653 (h) 342,545
Theodore H. Emmerich 10,924 10,364
James E. Evans 112,518 110,000
Thomas M. Hunt 10,135 10,364
William R. Martin 35,669 9,000
All directors and
executive officers 20,043,445 1,369,726
as a group
(11 persons) (d)
(a) Unless otherwise indicated, the persons named have sole
voting and dispositive power over the shares reported.
<PAGE>
(b) Does not include the following ownership interests in
subsidiaries of the Company: Messrs. Emmerich, Evans, Hunt,
S.C. Lindner and Martin, and all directors and executive
officers as a group beneficially own 1,561; 19,638; 382;
69,008; 13,575 and 144,576 shares, respectively, of the
common stock of American Annuity Group and Mr. Martin and
all directors and executive officers as a group beneficially
own 40,126 (1.4%) and 60,505 shares (2.1%), respectively, of
the preferred stock of AFC. Also excludes the following
ownership of Chiquita common stock: Messrs. Emmerich, Evans,
C.H. Lindner and K.E. Lindner, and all directors and
executive officers as a group beneficially own 1,000; 3,835;
2,125,943; 15,748 and 2,355,302 (3.6%) shares, respectively.
(c) Consists of shares of common stock purchasable within 60
days of March 31, 1999 through the exercise of the vested
portion of stock options granted under the Company's Stock
Option Plan.
(d) The shares set forth for Carl H. Lindner, Carl H. Lindner
III, S.C. Lindner and Keith E. Lindner and all directors
and officers as a group constituted 5.8%, 9.8%, 9.7%, 9.7%
and 35.7%, respectively, of the common stock outstanding at
March 31, 1999. For information as to the percentage of
outstanding shares beneficially owned (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934) by
such Lindner family members, see "Principal Shareholders."
(e) Includes 3,354,182 shares held by his spouse. Excludes
6,359,065 shares held in trusts for the benefit of his
family for which third parties serve as trustee. Also
excludes 85,591 shares held in a charitable foundation over
which Mr. Lindner has sole voting and dispositive power but
no pecuniary interest.
(f) Includes 19,088 shares held by his spouse individually or in
a trust over which she has voting and dispositive power and
650,744 shares which are held in various trusts for the
benefit of his minor children for which Keith E. Lindner
acts as trustee with voting and dispositive power.
<PAGE>
(g) Includes 71,425 shares held by his spouse as custodian for
their minor children or in a trust over which she has voting
and dispositive power and 775,714 shares which are held in
various trusts for the benefit of their minor children for
which Keith E. Lindner acts as trustee with voting and
dispositive power.
(h) Includes 341 shares held in a trust over which his spouse
has voting and dispositive power and excludes 1,426,458
shares (described in footnotes (e) and (f) above) which are
held in various trusts for the benefit of the minor children
of his brothers, Carl H. Lindner III and S. Craig Lindner,
over which Keith E. Lindner has sole voting and dispositive
power but no pecuniary interest.
COMPENSATION
The following table summarizes the aggregate cash
compensation for 1998, 1997 and 1996 of the Company's Chairman of
the Board and Chief Executive Officer and its four other most
highly compensated executive officers during 1998 (the "Named
Executive Officers"). Such compensation includes amounts paid by
AFG and its subsidiaries and certain affiliates during the years
indicated.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
Annual Long Term
Compensation Compensation
----------------------------- -------------
Name Other Securities All
and Annual Underlying Other
Principal Position Year Salary (a) Bonus (b) Compensa- Options Compensa-
tions(c) Granted tion
(# of Shares) (d)
- ------------------------ ------ ---------- --------- -------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Carl H. Lindner 1998 $968,000 $697,000 $190,000 --- $73,000
Chairman of the 1997 957,000 370,000 107,000 --- 75,000
Board and Chief 1996 913,000 900,000 156,000 --- 118,400
Executive Officer
Keith E. Lindner 1998 968,000 697,000 22,000 40,000 47,000
Co-President 1997 957,000 370,000 14,000 50,000 31,000
1996 917,000 900,000 28,000 --- 31,000
Carl H. Lindner III 1998 968,000 697,000 128,000 40,000 34,000
Co-President 1997 957,000 370,000 117,000 50,000 34,000
1996 917,000 900,000 174,000 --- 60,500
S. Craig Lindner 1998 968,000 697,000 184,000 40,000 33,000
Co-President 1997 957,000 370,000 132,000 50,000 34,000
1996 917,000 900,000 137,000 --- 32,000
James E. Evans 1998 968,000 670,000 4,000 35,000 787,000
Senior Vice President 1997 957,000 350,000 2,000 30,000 260,000
and General Counsel 1996 917,000 639,000 14,000 --- 49,500
</TABLE>
(a) This column includes salary paid by Chiquita to Carl H.
Lindner of $100,000 in 1998, and $200,000 in 1997 and 1996,
and to Keith E. Lindner of $100,000 in 1998, $381,000 in
1997 and $900,000 in 1996.
(b) Bonuses are for the year shown, regardless of when paid.
Approximately one-fourth of the bonuses for each individual
were paid in shares of AFG common stock.
<PAGE>
(c) This column includes amounts for personal homeowners and
automobile insurance coverage, and the use of corporate
aircraft and automobile service as follows.
Name Year Insurance Aircraft &
Automobile
------------------- ---- --------- ----------
Carl H. Lindner 1998 $16,000 $174,000
1997 19,000 88,000
1996 16,000 140,000
Keith E. Lindner 1998 11,000 11,000
1997 6,000 8,000
1996 12,000 16,000
Carl H. Lindner III 1998 28,000 100,000
1997 23,000 94,000
1996 19,000 155,000
S. Craig Lindner 1998 43,000 141,000
1997 26,000 106,000
1996 23,000 114,000
James E. Evans 1998 -- 4,000
1997 -- 2,000
1996 -- 14,000
(d) Includes Company or subsidiary contributions or allocations
under the (i) defined contribution retirement plans and (ii)
employee savings plan in which the following Named Executive
Officers participate (and related accruals for their benefit
under the Company's benefit equalization plan which
generally makes up certain reductions caused by Internal
Revenue Code limitations in the Company's contributions to
certain of the Company's retirement plans) and Company paid
group life insurance as set forth below. For Mr. Evans
only, this column also includes a special 1998 cash bonus of
$750,000.
<PAGE>
<TABLE>
AFG
Auxiliary Retirement Savings Directors' Term
Name Year RASP Plan Plan Fees Life
- ---------------- ----- --------- ---------- ------- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Carl H. Lindner 1998 $20,400 $9,600 -- $15,000 $28,000
1997 30,000 -- $2,000 15,000 28,000
1996 21,400 $55,000 4,500 14,500 23,000
Keith E. Lindner 1998 20,400 9,600 16,000 -- 1,000
1997 30,000 -- -- -- 1,000
1996 30,000 -- -- -- 1,000
Carl H. Lindner 1998 20,400 9,600 2,000 -- 2,000
III
1997 30,000 -- 2,000 -- 2,000
1996 30,000 28,500 -- -- 2,000
S. Craig Lindner 1998 20,400 9,600 2,000 -- 1,000
1997 30,000 -- 2,000 -- 2,000
1996 30,000 -- -- -- 2,000
James E. Evans 1998 20,400 9,600 2,000 -- 5,000
1997 30,000 -- 2,000 -- 5,000
1996 30,000 -- -- 14,500 5,000
</TABLE>
<PAGE>
Stock Options
The tables set forth below disclose stock options granted
to, or exercised by, the Named Executive Officers during 1998,
and the number and value of unexercised options held by them at
December 31, 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1998
-------------------------------------------------------------------------------
Individual Grants Potential Realizable
------------------------------------------------- ---------------------
Number of Percent Exercise Value at Assumed
Securities of Price Annual Rates of Stock
Underlying Total per Share Price
Options Options (fair market Appreciation for
Granted value Option
to at date Term (b)
Granted (a) Employees of grant) Expira-
Name Company (# of shares) in 1998 tion Date 5% 10%
- -----------------------------------------------------------------------------------------
<C> <S> <S> <S> <S> <S> <S> <S>
Carl H. Lindner - - - - - - -
Keith E. Lindner AFG 40,000 8.6% $42.06 3/20/08 $1,058,052 $2,681,312
S. Craig Lindner AFG 40,000 8.6% $42.06 3/20/08 $1,058,052 $2,681,312
Carl H. Lindner III AFG 40,000 8.6% $42.06 3/20/08 $1,058,052 $2,681,312
James E. Evans AFG 35,000 7.5% $42.06 3/20/08 $925,796 $2,346,148
- --------------------
Stock Appreciation for All AFG
Shareholders _ 58,612,176 shares (c) $1,953,104,235 $4,331,586,337
</TABLE>
(a) The options were granted under the Company's Stock Option
Plan and cover Company common stock. They vest (become
exercisable) to the extent of 20% per year, beginning one
year from the respective dates of grant, and become fully
exercisable in the event of death or disability or in the
event of involuntary termination of employment without cause
within one year after a change of control of the Company.
<PAGE>
(b) Represents the hypothetical future values that would be
realizable if all of the options were exercised immediately
prior to their expiration in 2008 and assuming that the
market price of the Company's common stock had appreciated
in value through the year 2008 at the annual rate of 5% (to
$68.51 per share) or 10% (to $109.09 per share). Such
hypothetical future values have not been discounted to their
respective present values, which are lower.
(c) On March 31, 1999, the closing price of AFG common stock on
the New York Stock Exchange was $35.1875. The gain shown
for All Shareholders is based on that share price increasing
to the same prices shown for the above options at the option
expiration dates (to $68.51 and $109.09 per share).
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1998 AND 1998 YEAR-END OPTION VALUES
---------------------------------------------------------------------
Number of Securities
Shares Underlying Value of
Acquired Unexercised Options Unexercised
on at Year End In-the-Money
Exercise Options
(# of Value at Year End (a)
Name Company Shares) Real- Exercisable Unexercis- Exercis- Unexercis-
ized able able able
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Carl H. Linder AFG - - 51,818 - $1,009,273 -
Carl H. Lindner AFG 5,455 $51,626 404,545 80,000 $7,913,930 $312,800
III
S. Craig Lindner AFG 5,455 $66,927 249,272 235,273 $4,821,552 $3,404,286
Keith E. Lindner AFG 5,455 $50,281 244,545 240,000 $4,729,791 $3,498,400
James E. Evans AFG - - 97,000 119,000 $1,292,300 $1,036,900
</TABLE>
(a) The value of unexercised in-the-money options is calculated
based on the closing market price on December 31, 1998 for
the Company's common stock on the New York Stock Exchange
of $43.875 per share.
<PAGE>
Compensation Committee Report
The Compensation Committee of the Board of Directors
consists of three directors, none of whom is an employee of the
Company or any of its subsidiaries. The Committee's functions
include reviewing and making recommendations to the Board of
Directors with respect to the compensation of the Company's
senior executive officers, as defined from time to time by the
Board. The term senior executive officers currently includes the
Chairman of the Board and Chief Executive Officer (the "CEO"),
the Co-Presidents and each other executive officer whose annual
base salary exceeds $500,000. The Compensation Committee has the
exclusive authority to grant stock options under the Company's
Stock Option Plan to employees of the Company and its
subsidiaries, including senior executive officers.
Compensation of Executive Officers. The Company's
compensation policy for all executive officers of the Company has
three principal components: annual base salary, annual incentive
bonuses and stock option grants. Before decisions were made
regarding 1998 compensation for senior executives, the Committee
had discussions with senior executives to solicit their thoughts
regarding compensation. Based in part on such discussions as
well as the Committee's review of the Company's financial results
for the preceding year, the Committee deliberated, formed its
recommendations, and presented its determinations regarding
salary and bonus to the full Board for its review and approval.
The compensation decisions discussed in this report conformed
with recommendations made by the Committee, the CEO and the Co-
Presidents.
Annual Base Salaries. The Committee approved annual base
salaries and salary increases for senior executive officers that
were appropriate, in the Committee's subjective judgment, for
their respective positions and levels of responsibilities. In
April 1998, the Committee approved the 1998 salaries of the CEO,
the Co-Presidents and the other senior executive officers, noting
that such salaries would be at the same rates in 1998 as in the
latter part of 1997.
<PAGE>
Annual Bonuses. As in 1996 and 1997, the Committee
developed an annual bonus plan for the CEO, the Co-Presidents and
the senior executive officers that would make a substantial
portion of their total compensation dependent on the Company's
performance, including achievement of pre-established earnings
per share targets.
The annual bonus plan for 1998 made 50% of each
participant's annual bonus dependent on the Company attaining
certain earnings per share targets. The other 50% is based on
the Company's overall performance, as subjectively determined by
the Committee with respect to each senior executive officer
participating in the annual bonus plan. A significant aspect of
the 1998 annual bonus plan is that it provided that 25% of any
bonuses be paid in common stock. As in the grant of stock
options discussed below, the Committee believes that payment of a
substantial portion of annual bonuses in common stock align
further the interests of the Company's senior executives with
those of its shareholders. The Committee also selected the
senior executive officers whose 1998 bonus would be subject to
this plan, including the CEO, the Co-Presidents and the Senior
Vice Presidents. The Committee recommended to the Board the
earnings per share targets.
Under the 1998 annual bonus plan, the bonus target amount
for the CEO and each of the Co-Presidents was the same as in 1997
($925,000), with 0% to 175% of $462,500 (50% of $925,000) to be
paid depending on the Company achieving certain 1998 earnings per
share allocable to insurance operations (the "EPS Component") and
0% to 175% of $462,500 to be paid based on the Company's overall
performance, as subjectively determined by the Committee (the
"Company Performance Component"). The earnings per share target
which would result in the payment of 100% of the EPS Component
bonus was set by the Committee at $2.92. In recommending the
1998 annual bonus plan to the Board for adoption in April 1998,
the Committee noted that no bonus should be paid under the plan
if 1998 earnings per share from insurance operations are less
than $2.19 (75% of the 1998 EPS target). The Company's 1998
earnings per share from insurance operations were $2.56 per
share, 88% of the target amount. The Committee used a straight
line interpolation method to determine what percentage of the EPS
Component bonus should be paid. This resulted in approximately
51% of the bonus target amount attributable to the EPS Component
($234,500) being paid to the CEO and Co-Presidents.
<PAGE>
The Committee then evaluated the Company's performance
during 1998. The Committee considered a number of factors, with
no relative weight being given to any specific factor. In
determining that each of the CEO and the Co-Presidents should
receive $462,500 (100% of the target amount under the Company
Performance Component), the Committee concluded that a number of
1998 developments enhanced the value and operations of the
Company. These included the upgrade by a major rating agency of
the Company's debt rating and financial strength rating, the sale
of the commercial lines division (which enables the Company to
focus on growth potential in other areas in which it has a
significant market position and expertise) and the funeral
services division, the negotiation of strategic acquisitions and
the maintenance of the Company's debt-to-capital ratio in a range
desirable for investment grade companies. Somewhat offsetting
these positive developments, the Committee noted that the price
of the Company's common stock had not increased appreciably
during 1998. The Board adopted all of the Committee's
recommendations with respect to the determination of amounts paid
under the annual bonus plan for 1998. Under the 1998 Plan, 25%
of the bonus payment was paid in common stock.
The annual base salary and bonuses received by the CEO and
the Co-Presidents from the Company and its affiliates are
virtually identical because the Committee views them as working
as a management team whose skills and areas of expertise
complement each other.
Stock Option Grants. Stock options represent an important
part of the Company's performance-based compensation system. The
Committee believes that Company shareholders' interests are well
served by aligning the Company's senior executives' interests
with those of its shareholders through the grant of stock options
in addition to paying a portion of any annual bonus in common
stock. Options under the Company's Stock Option Plan are granted
at exercise prices equal to the fair market value of common stock
<PAGE>
on the date of grant and vest at the rate of 20% per year. The
Committee believes that these features provide an optionee with
substantial incentive to maximize the Company's long-term
success. Options for 40,000 shares were granted to the Co-
Presidents and additional options were granted to the other
senior executives of the Company in 1998. In considering option
grants to the Co-Presidents, the Committee noted that each Co-
President received 8.6% of the total options granted in 1998 and
that their share ownership of the Company is greater than that
percentage. No options were granted to the CEO in 1998.
Members of the Compensation Committee: William R. Martin, Chairman
Theodore H. Emmerich
Thomas M. Hunt
Certain Transactions
AFG and its subsidiaries have had and expect to continue to
have transactions with AFG's directors, officers, principal
shareholders, their affiliates and members of their families.
AFG believes that the financial terms of these transactions are
comparable to those that would apply to unrelated parties and are
fair to AFG.
Members of the Lindner Family are the principal owners of
Provident Financial Group, Inc. ("Provident"). AFC provides
security guard and surveillance services at the main office of
Provident for which Provident paid $100,000 in 1998. Provident
leases its main banking and corporate office from AFG for which
Provident paid rent of $2,284,000 in 1998. A subsidiary of
Provident leases equipment to subsidiaries of AFG for which
Provident was paid an aggregate of $524,000 during 1998. A
subsidiary of AFG provided payroll processing services to
Provident in 1998 for which Provident paid $64,000.
During 1998, AFG paid $144,000 for coupons redeemable for
ice cream from United Dairy Farmers, Inc. as gifts for employees
at the Company Christmas party. UDF is owned by one of Carl H.
Lindner's brothers and his family.
<PAGE>
In July 1997, Carl H. Lindner and a subsidiary of AFG
purchased 51% and 49%, respectively, of common stock of a newly
incorporated entity formed to acquire the assets of a company
engaged in the production of ethanol. The AFG subsidiary
invested $4.9 million and Mr. Lindner invested $5.1 million; the
asset purchase was completed in December 1997. Certain AFG
subsidiaries have entered into a credit facility under which the
ethanol producer may borrow up to $10 million at a rate of prime
plus 3% per annum. There were no borrowings outstanding under
this facility in 1998. In September 1998, the ethanol producer
borrowed $4 million from an AFG subsidiary under a subordinated
note bearing interest at the rate of 14% and paid a $6.3 million
capital distribution to its shareholders, including $3.1 million
to an AFG subsidiary and $3.2 million to Mr. Lindner.
During 1998, the law firm of Keating, Muething & Klekamp,
P.L.L. provided legal services to AFG and its subsidiaries, for
which it was paid $876,000. This law firm leases its offices
from an AFG subsidiary, for which the AFG subsidiary was paid
rent of $1,387,500 in 1998. Paul V. Muething is a partner in the
firm. See "Principal Shareholders."
An AFG subsidiary is the lender under a credit agreement
with American Heritage Holding Corporation, a Florida-based home
builder which is 49% owned by AFG and 11% owned by a brother of
Carl H. Lindner. The homebuilder may borrow up to $8 million at
13% per annum, with interest deferred and added to principal.
The highest outstanding balance owed to the AFG subsidiary during
1998 and the balance at year-end was $6.1 million.
<PAGE>
Performance Graph
The following graph compares the cumulative total
shareholder return on the Company's common stock with the
cumulative total return of the Standard & Poor's ("S&P") 400
Midcap Index and the S&P Property-Casualty Insurance Index.
(Assumes $100 invested on December 31, 1993 in American Premier
Underwriters Inc. common stock (as the predecessor to AFG) and
the two indexes, including reinvestment of dividends.)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
AFG Common Stock $100 $82.79 $100.79 $128.17 $140.44 $156.83
S&P 400 Midcap Index $100 $96.42 $126.25 $150.49 $199.03 $237.05
S&P Property-Casualty $100 $104.90 $142.02 $172.58 $251.04 $233.59
Insurance Index
</TABLE>
Directors' Compensation
Pursuant to the Non-Employee Directors' Compensation Plan
(the "Directors' Plan"), all directors who are not officers or
employees of the Company are paid the following fees: an annual
retainer of $40,000; an additional annual retainer of $12,000 for
each Board Committee on which the non-employee director serves;
and an attendance fee of $1,000 for each Board or Committee
meeting attended. Non-employee directors who become directors
during the year receive a pro rata portion of these annual
retainers. The retainers and fees to be paid under the
Directors' Plan are reviewed by the Board of Directors from time
to time and are subject to change at its discretion.
In order to align further the interests of the Company's non-
employee directors with the interests of shareholders, the
Directors' Plan provides that a minimum of 50% of such directors'
annual retainers are paid through the issuance of shares of AFG
common stock.
<PAGE>
The Board of Directors has a program under which a retiring
Company director (other than an officer or employee of the
Company or any of its subsidiaries) will, if he has met certain
eligibility requirements, receive upon his retirement (in a lump
sum or, at his election, in deferred payments) an amount equal to
five times the then current annual director's fee. For purposes
of this program, retirement means resignation as a Company
director or not being nominated for reelection by shareholders as
a Company director. To be eligible for the retirement benefit, a
person must have served as a Company director for at least four
years while not an officer or employee of the Company or any of
its subsidiaries. In addition, a Company director will not
become eligible for the retirement benefit until reaching age 55.
A director who receives a retirement benefit must provide
consulting services to the Company on request for five years
following retirement without further compensation (except
reimbursement for expenses). Under the program, a death benefit
equal to the retirement benefit will be paid (in lieu of any
retirement benefit under the program) to the designated
beneficiary or legal representative of any person who dies while
serving as a Company director, whether or not eligible for a
retirement benefit at time of death. This death benefit will not
be available to a director who at any time during the two years
immediately preceding death was an officer or employee of the
Company or any of its subsidiaries.
In addition to providing for the grant of stock options to
key employees, the Stock Option Plan provides for automatic
annual grants of options to each non-employee director of the
Company. During 1998, each non-employee director was granted an
option under the foregoing provisions of the Stock Option Plan to
purchase 1,000 shares at an exercise price of $45.19 per share on
June 1, 1998, the exercise price being the fair market value of
the Company's common stock on the date of grant.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company's Board of Directors held three meetings and
took action in writing three times in 1998. The Company's Board
of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. There is no Nominating Committee.
<PAGE>
Executive Committee: The Executive Committee consists of
Carl H. Lindner (Chairman), Carl H. Lindner III, S. Craig Lindner
and Keith E. Lindner. The Committee's functions include
analyzing the future development of the business affairs and
operations of the Company, including further expansion of
businesses in which the Company is engaged and acquisitions and
dispositions of businesses. With certain exceptions, the
Executive Committee is generally authorized to exercise the
powers of the Board of Directors between meetings of the Board of
Directors. The Executive Committee consulted among themselves
informally many times throughout the year and took action in
writing on thirteen occasions in 1998.
Audit Committee. The Audit Committee consists of Theodore
H. Emmerich (Chairman) and William R. Martin. Neither is an
officer or employee of the Company or any of its subsidiaries.
The Committee's functions include recommending to the Board of
Directors the engagement of independent accounting firms to audit
the financial statements of the Company and its subsidiaries and
to provide other audit-related services and recommending the
terms of such firms' engagements; reviewing the engagement of
independent accounting firms to provide non-audit services,
including the terms of their engagements; reviewing the adequacy
and implementation of the Company's internal audit function;
reviewing the policies, procedures and principles of the
management of the Company for purposes of conformity to the
standards required by the Foreign Corrupt Practices Act;
establishing procedures designed to provide and encourage timely
access to the Committee by the independent accounting firms
engaged by the Company, its internal audit department and its
principal financial officers; and conducting such investigations
relating to the Company's financial affairs as the Committee or
the Board of Directors deems desirable. The Committee's
functions also include supervising, reviewing and reporting to
the Board of Directors on the performance of management
committees of the Company responsible for the administration of
the employee benefit plans of the Company and its subsidiaries.
The Audit Committee met four times in 1998.
Compensation Committee The Compensation Committee consists
of William R. Martin (Chairman), Theodore H. Emmerich and Thomas
M. Hunt. The functions of the Compensation Committee are
discussed under "Compensation - Compensation Committee Report."
<PAGE>
The Compensation Committee met one time and took action in
writing on nine occasions in 1998.
INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP served as the
Company's independent auditors for the fiscal year ended December
31, 1998. Representatives of that firm will attend the meeting
and will be given the opportunity to comment, if they so desire,
and to respond to appropriate questions that may be asked by
shareholders. No auditor has yet been selected for the current
year because it is generally the practice of the Company not to
select independent auditors prior to the annual shareholders
meeting.
NOMINATIONS AND SHAREHOLDER PROPOSALS
In accordance with the Company's Code of Regulations (the
"Regulations"), the only candidates eligible for election at a
meeting of shareholders are candidates nominated by or at the
direction of the Board of Directors and candidates nominated at
the meeting by a shareholder who has complied with the procedures
set forth in the Regulations. Shareholders will be afforded a
reasonable opportunity at the meeting to nominate candidates for
the office of director. However, the Regulations require that a
shareholder wishing to nominate a director candidate must have
first given the Secretary of the Company at least five and not
more than thirty days prior written notice setting forth or
accompanied by (a) the name and residence of the shareholder and
of each nominee specified in the notice, (b) a representation
that the shareholder was a holder of record of the Company's
voting stock and intended to appear, in person or by proxy, at
the meeting to nominate the persons specified in the notice and
(c) the consent of each such nominee to serve as director if so
elected.
The Proxy Form used by AFG for the annual meeting typically
grants authority to management's proxies to vote in their
discretion on any matters that come before the meeting as to
which adequate notice has not been received. In order for a
notice to be deemed adequate for the 2000 annual meeting, it must
be received by March 12, 2000. In order for a proposal to be
considered for inclusion in AFG's proxy statement for that
meeting, it must be received by December 31, 1999.
<PAGE>
REQUESTS FOR FORM 10-K
The Company will send, upon written request, without charge,
a copy of the Company's most current Annual Report on Form 10-K
to any shareholder who writes to Fred J. Runk, Senior Vice
President and Treasurer, American Financial Group, Inc., One East
Fourth Street, Cincinnati, Ohio 45202.
<PAGE>
AMERICAN FINANCIAL GROUP, INC.
Proxy for Annual Meeting
Registration Name and Address
The undersigned hereby appoints James C. Kennedy and Karl J.
Grafe, and each of them, proxies of the undersigned, each with
the power of substitution, to vote all shares of Common Stock or
Series J. Preferred (collectively, "Voting Stock") of the Company
that the undersigned would be entitled to vote at the Annual
Meeting of Shareholders of American Financial Group, Inc. to be
held on May 19, 1999 at 10:30 a.m., and at their discretion to
cumulate votes in the election of directors (f cumulative voting
is invoked by a shareholder through proper notice to the
Company), and on the proposal to approve amendments to the AFG
Stock Option Plan and on such other matters as may properly come
before the meeting or any adjournment thereof.
The Board of Directors recommends a vote FOR the following Propo
sals:
1. Proposal to Elect Directors
/ / FOR AUTHORITY to elect the / / WITHHOLD AUTHORITY to
nominees listed below (except vote for every nominee
those whose names have been listed below
crossed out)
Carl H. Lindner Carl H. Lindner III S. Craig Lindner
Keith E. Lindner Theodore H. Emmerich James E. Evans
Thomas M. Hunt William R. Martin
2. Proposal to approve amendments to the AFG Stock Option Plan
/ / FOR / / AGAINST / / ABSTAIN
DATE: ___________________, 1999 SIGNATURE:
_____________________________
SIGNATURE:
_____________________________
(if held jointly) Important:
Please sign exactly as name
appears hereon indicating,
where proper, official
position or representative
capacity. In case of joint
holders, all should sign.
The named proxy holders will vote the shares represented by this
proxy in the manner indicated. Unless a contrary direction is
indicated, the proxy holders will, except to the extent they
exercise their discretion to cumulate votes in the election of
directors, vote such shares "FOR" the proposals. If cumulative
voting is invoked by a shareholder through proper notice to the
Company, unless a contrary direction is indicated, this proxy
will give the proxy holders authority, in their discretion, to
cumulate all votes to which the undersigned is entitled in
respect of the shares represented by this proxy and allocate them
in favor of any one or more of the nominees for director if any
situation arises which, in the opinion of the proxy holders,
makes such action necessary or desirable. If any further matters
properly come before the meeting, such shares shall be voted on
such matters in accordance with the best judgment of the proxy
holders.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
