SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended Commission File
December 31, 1996 No. 1-8013
AMERICAN FINANCIAL ENTERPRISES, INC.
Incorporated under IRS Employer I.D.
the Laws of Connecticut No. 31-0996797
One East Fourth Street, Cincinnati, Ohio 45202
(513) 579-2172
This Form 10-K/A provides information required by
Items 10, 11, 12 & 13 of Form 10-K.
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The directors and executive officers of American Financial
Enterprises, Inc. ("AFEI") are:
<TABLE>
<CAPTION>
Director or
Officer
Name Age* Position Since
- ------------------ ---- ----------------------------------- -----------
<S) <C> <C> <C>
Carl H. Lindner 77 Chairman of the Board and President 1980
Julius S. Anreder 63 Director 1980
James E. Evans 51 Director, Vice President and
General Counsel 1980
Robert D. Lindner 76 Director 1980
Thomas E. Mischell 49 Vice President 1986
Fred J. Runk 54 Director, Vice President
and Treasurer 1980
Ronald F. Walker 58 Director 1980
*As of March 31, 1997
</TABLE>
Carl H. Lindner has been Chairman of the Board and Chief Executive
Officer of AFG for more than five years. During the past five years, Mr.
Lindner has also been Chairman of the Board and Chief Executive Officer of
AFC and APU, diversified financial services companies which became
subsidiaries of AFG as a result of Mergers occurring in April 1995. He is
also Chairman of the Board of Directors of American Annuity Group, Inc.
("AAG") and Chiquita Brands International, Inc. ("Chiquita").
Julius S. Anreder is a partner of Oscar Gruss & Son, the controlling
shareholder of Oscar Gruss & Son, Inc., a New York based member firm of the
New York Stock Exchange. Mr. Anreder has served as Vice President of Oscar
Gruss & Son, Inc. for more than five years.
James E. Evans is Senior Vice President and General Counsel of AFG.
He has served as Vice President and General Counsel of AFEI and AFC for more
than five years. Mr. Evans is also a director of AFG, AFC and APU.
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<PAGE>
Robert D. Lindner, for more than five years, has served as Chairman of
the Board of United Dairy Farmers, Inc. which, among other things, is engaged
through subsidiaries in dairy processing and the operation of convenience
stores.
Thomas E. Mischell is Senior Vice President-Taxes of AFG. He has
served as a Vice President of AFEI and AFC for over five years.
Fred J. Runk is Senior Vice President and Treasurer of AFG. He has
served as Vice President and Treasurer of AFEI and AFC for more than five
years. He is also a director of Chiquita.
Ronald F. Walker served as President and Chief Operating Officer of
AFC for more than five years prior to his resignation from that position in
April 1995. He is currently Vice Chairman of Great American Insurance
Company, an AFC subsidiary, and serves on the board of directors of AAG,
Chiquita and Tejas Gas Company.
Carl H. Lindner and Robert D. Lindner are brothers.
In December 1993, Great American Communications Company, which
subsequently changed its name to Citicasters Inc., completed a comprehensive
financial restructuring that included a prepackaged plan of reorganization
filed in November of that year under Chapter 11 of the Bankruptcy Code.
Messrs. Carl H. Lindner, Mischell and Runk had been executive officers of
that company within two years before its bankruptcy reorganization.
In April 1997, Neil M. Hahl was appointed to AFEI's Board of
Directors. He is President of The Weitling Group, a Cincinnati based
business consulting firm and, for more than five years prior to his
resignation in May 1996, was a Senior Vice President of AFG. He is also a
director of Buckeye Management Company.
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<PAGE>
ITEM 11. Executive Compensation.
Summary Compensation Table
The following table sets forth the aggregate cash compensation for
1996, 1995 and 1994 of AFEI's Chief Executive Officer and its other executive
officers who earned more than $100,000 in 1996.
<TABLE>
<CAPTION>
Name and Principal Position Year Annual Compensation
Salary
- ------------------------------------- ------ --------------------
<S> <C> <C>
Carl H. Lindner 1996 $150,000
Chairman of the Board and 1995 $183,700
President 1994 $254,800
James E. Evans 1996 $142,700
Vice President and General 1995 $142,700
Counsel 1994 $142,700
Fred J. Runk 1996 $132,500
Vice President and Treasurer 1995 $132,500
1994 $132,500
</TABLE>
No bonuses, personal benefits or other non-cash compensation were paid
to the executive officers during 1996, 1995 or 1994.
Each director who is not also a salaried officer is paid $20,000
annually. The Board of Directors has adopted a program which provides for
payments to be made to unaffiliated directors upon their leaving the Board.
The only present director who would be entitled to receive such payments is
Mr. Anreder. Under that program, directors who have served the Company at
least three years are entitled to payments equal to base directors' fees in
effect during the last calendar year such person served as a director
multiplied by the number of years of service, subject to a maximum of five
years. Payments are to be made in equal annual installments.
Compensation Committee Interlocks and Insider Participation
Ronald F. Walker is an executive of an AFG subsidiary. AFG's Board of
Directors sets the compensation which Carl H. Lindner and Mr. Walker receive
from AFG and its subsidiaries.
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<PAGE>
Stock Options
AFEI directors and employees currently have outstanding options to
purchase 102,500 shares at $22.50 per share, 165,000 shares at $19.875 per
share and 165,000 shares at $22.00 per share. The stock option agreements
covering certain options were amended in March 1996 to extend the expiration
date by one year. No options have been granted or exercised in the last
three years by directors or executive officers of AFEI.
The following table discloses certain stock option information for the
executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
1996 Option Exercises and Year End Option Values
Value of Unexercised
Number of Securities In-the-Money Options at
Underlying Unexercised Year End (a) -
Options at Year End - Exercisable/
Exercisable/ Unexercisable
Options Value Unexercisable
Name Exercised Realized
- ----------------- -------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
Carl H. Lindner -0- -0- 0 / 0 0 / 0
James E. Evans -0- -0- 115,000 / 0 $812,500 / 0
Fred J. Runk -0- -0- 85,000 / 0 $571,875 / 0
(a) The value of unexercised in-the-money options is calculated based on
the closing market price for AFEI Common Stock on December 31, 1996
of $28.25 per share.
</TABLE>
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<PAGE>
ITEM 12. Security Ownership of Certain Beneficial Owners and
Management.
Principal Shareholders
The following shareholders are the only persons known by the Company
to own beneficially five percent or more of its outstanding Common Stock as
of March 31, 1997:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and address of Beneficial Owner Beneficial Ownership Class
<S> <C> <C>
American Financial Group, Inc.
One East Fourth Street 10,981,429 (a) 82.6%
Cincinnati, Ohio 45202
Regina Gruss
33 Riverside Drive 986,472 (b) 7.4%
New York, New York 10023
</TABLE>
(a) Carl H. Lindner, Carl H. Lindner III, S. Craig Lindner, Keith E.
Lindner and trusts for their benefit (collectively the "Lindner
Family"), the beneficial owners of approximately 45% of the common
stock of AFG, share with AFG voting and dispositive power with
respect to the shares of AFEI Common Stock owned by AFG. AFG and the
Lindner Family may be deemed to be controlling persons of AFEI.
(b) Mrs. Gruss is a director of a charitable and educational foundation
which beneficially owns an additional 145,616 shares. Mrs. Gruss
disclaims beneficial ownership with respect to all of the shares held
in the foundation.
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<PAGE>
Holdings of Management
Information concerning AFEI's Common Stock beneficially owned by each
director and the directors and executive officers as a group as of March 31,
1997, is shown in the following table:
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
-----------------------------------------------------------
Shares Exercisable Percent of
Owned Options (b) Total Class
----------- ------------- ------ -----------
<S> <C> <C> <C> <C>
Carl H. Lindner (a) -0- -0- -0- -
Julius S. Anreder 4,744 10,000 14,744 *
James E. Evans 1,000 115,000 116,000 *
Robert D. Lindner -0- 10,000 10,000 *
Fred J. Runk 3,194 85,000 88,194 *
Ronald F. Walker -0- 7,500 7,500 *
All directors and executive
officers as a group
(7 persons, including the
above) 8,938 302,500 311,438 2.3%
*Less than 1%
</TABLE>
(a) Does not include shares owned by AFG.
(b) Represents shares which may be acquired upon exercise of stock
options.
Certain of the Company's executive officers and directors beneficially
own AFG and AFC equity securities. At March 31, 1997, such beneficial
ownership included:
(1) AFG Common Stock: Carl H. Lindner - 5,557,020 (9.6%);
Julius S. Anreder - 4,542; James E. Evans - 78,507; Robert D.
Lindner - 649,119 (1.1%); Fred J. Runk - 127,433; Ronald F.
Walker - 128,352; and all directors and executive officers as
a group, 6,594,429 shares (11.3%);
(2) AFC Series F Preferred Stock: Robert D. Lindner -
122,400; Fred J. Runk - 4,283; and all directors and executive
officers as a group, 140,474 shares; and
(3) AFC Series G Preferred Stock: Fred J. Runk - 153 shares
and all directors and executive officers as a group - 2,253
shares.
The foregoing amounts represent less than one percent of the
outstanding shares of the class of equity securities presented, unless
otherwise shown.
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<PAGE>
ITEM 13. Certain Relationships and Related Transactions.
AFEI's Certificate of Incorporation provides that AFEI may not
purchase, sell or lease any property or services to or from AFC unless such a
transaction has been approved by those directors who are not affiliated with
AFC. Where required, AFEI has received approval from Mr. Anreder, the
director of AFEI who is not affiliated with AFC.
AFC provides certain investment services to AFEI. AFEI was charged
$200,000 for these services in 1996. In addition, AFC provides the following
services to AFEI: preparation of financial reports, accounting, legal,
treasury, data processing and tax services. AFEI was charged $120,000 for
these services in 1996. Charges with respect to these transactions are at
amounts below or comparable to those which would be paid to unrelated
parties.
As a result of AFC's ownership of AFEI exceeding 80%, AFEI is a member
of AFC's tax group and files consolidated federal income tax returns with
AFC. AFEI's tax agreement with AFC calls for payments to (or benefits from)
AFC based on book taxable income without regard to temporary differences
between book and tax return income. During 1996, AFEI recorded a provision
of $25.1 million for income taxes under its tax agreement with AFC.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN FINANCIAL ENTERPRISES,INC.
April 30, 1997 By: Fred J. Runk
Fred J. Runk
Vice President and Treasurer
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