SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
_X_ Definitive proxy statement
___ Definitive additional materials
___ Soliciting material pursuant to Rule 14a-11(c) or Rule 14A-12
AMERICAN PREMIER UNDERWRITERS, INC.
(Name of Registrant as Specified in Its Charter)
Robert W. Olson
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
_X__ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
____ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
____ Fee computed on table below per Exchange Act Rules 14a
-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transactions
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: ftnt. 1
(4) Proposed maximum aggregate value of transaction:
____ Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify 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:
- -------------------
1. Set forth the amount on which the filing fee is calculated
and state how it was determined.
<PAGE>
<PAGE>
American Premier Underwriters, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Telephone (513) 579-6600
Dear Shareholder:
You are cordially invited to attend the 1994 Annual Meeting
of Shareholders of American Premier Underwriters, Inc. (formerly
named The Penn Central Corporation) to be held on Thursday, May
12, 1994, at 10:30 A.M., local time, at The Cincinnatian Hotel,
601 Vine Street, Cincinnati, Ohio.
Notice of our Annual Meeting and Proxy Statement are
attached. You are asked to read them carefully.
At the meeting there will be a report to the shareholders as
to the affairs of our Company and a discussion period during
which shareholders will have an opportunity to bring up matters
of interest concerning our Company.
Even if you plan to attend the meeting in person, we would
be grateful if you would sign and return your proxy to ensure
that your shares will be represented at the meeting if you are
unable to attend. If you do find it possible to attend the
meeting and wish to vote in person, you may withdraw your proxy
at that time.
As you will note from the enclosed proxy material, the Board
of Directors recommends that you vote FOR each of the proposals
set forth in the Proxy Statement.
Sincerely,
CARL H. LINDNER
Chairman of the Board and
Chief Executive Officer
April 7, 1994
YOUR VOTE IS IMPORTANT. PLEASE DATE, SIGN AND RETURN
PROMPTLY THE ENCLOSED PROXY FORM WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING.<PAGE>
American Premier Underwriters, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Telephone (513) 579-6600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 12, 1994
The 1994 Annual Meeting of Shareholders of American Premier
Underwriters, Inc. (formerly named The Penn Central Corporation
and hereinafter referred to as the "Company") will be held at The
Cincinnatian Hotel, 601 Vine Street, Cincinnati, Ohio on
Thursday, May 12, 1994, at 10:30 A.M., local time, to consider
and act upon the following proposals:
1. Election of 11 directors;
2. Ratification of the appointment of Deloitte & Touche,
independent certified public accountants, to audit the
consolidated financial statements of the Company for the year
1994; and
3. Such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on
April 1, 1994 are entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors,
Robert W. Olson
Secretary
April 7, 1994
<PAGE>
AMERICAN PREMIER UNDERWRITERS, INC.
PROXY STATEMENT
This Proxy Statement is being furnished at the direction of
the Board of Directors of American Premier Underwriters, Inc.
(formerly named The Penn Central Corporation and hereinafter
referred to as "American Premier" or the "Company") in connection
with the solicitation of proxies in the accompanying form from
the holders of the outstanding Common Stock of the Company for
use at the Annual Meeting of Shareholders to be held on May 12,
1994, and at any adjournments thereof. The principal executive
offices of the Company are located at One East Fourth Street,
Cincinnati, Ohio 45202. It is expected that the mailing of this
Proxy Statement and the accompanying form of proxy to
shareholders will commence on or about April 7, 1994. Prior to
that date, copies of the Company's Annual Report to Shareholders
for the year 1993 will have been mailed to all shareholders
entitled to notice of and to vote at the Annual Meeting.
OUTSTANDING VOTING SECURITIES OF THE COMPANY
Holders of record of the Common Stock of the Company at the
close of business on April 1, 1994 (the "Record Date") will be
entitled to notice of the Annual Meeting and to vote at the
Annual Meeting and at any adjournments thereof. At the Record
Date, 46,125,271 shares of Common Stock were issued and
outstanding.
Holders of Common Stock are entitled to vote cumulatively
for the election of directors, which means that each such holder
shall be entitled to as many votes as equals the number of shares
held by such holder on the Record Date multiplied by the total
number of directors to be elected at the Annual Meeting, and may
cast the whole number of such votes for any one candidate or may
distribute them among any two or more candidates. On all other
matters, holders of Common Stock are entitled to one vote per
share.
ACTION TO BE TAKEN UNDER THE PROXIES
All shares represented by a properly executed proxy will,
unless previously revoked, be voted at the Annual Meeting or any
adjournments thereof in accordance with the directions on the
proxy. Unless a contrary direction is indicated, such shares
will be voted in favor of Proposal 2. Unless a contrary direc-
tion is indicated, such shares will, except to the extent the
proxy holders exercise their discretion to cumulate votes, be
voted in favor of the 11 persons nominated for director by the
Board of Directors. Unless a contrary direction is indicated, a
properly executed proxy will give the proxy holders authority, in
their discretion, to cumulate all the votes represented by the
proxy and allocate them in favor of any one or more (which may be
less than the entire number) of the nominees if any situation
arises which, in the opinion of the proxy holders, makes such
action necessary or desirable. If a shareholder executing a
proxy desires to cumulate his votes, he may indicate his
instructions by writing them in the margin on the proxy.
The management of the Company knows of no other matter to be
presented at the meeting upon which a vote properly may be taken,
but it is intended that as to any such other matter the proxy
holders will vote in accordance with their judgment as to the
best interests of the Company. Should any nominee for election
as a director become unable to accept nomination or election,
which is not anticipated, it is intended that the proxy holders
will vote for the election in his stead of such other person as
the Board of Directors may recommend.
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES FOR DIRECTOR
The number of directors to be elected at the 1994 Annual
Meeting is 11. The 11 directors so elected will, upon such
election, constitute the entire Board of Directors.
In accordance with a By-law previously adopted by
shareholders, 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 By-law. Shareholders will be afforded a
reasonable opportunity at the 1994 Annual Meeting to nominate
candidates for the office of director. However, the By-law
requires 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.
Set forth below is certain information relating to the
persons who were nominated by the Board of Directors in March
1994 for election as directors at the 1994 Annual Meeting. The
information is based on data furnished to the Company by the
respective persons named. The new term of office for which each
nominee is a candidate runs from the 1994 Annual Meeting of
Shareholders until the Annual Meeting of Shareholders to be held
in 1995 and until his successor shall have been elected and
qualified.<PAGE>
NOMINEE FOR ELECTION AT THE ANNUAL MEETING
------------------------------------------
(LISTED IN ALPHABETICAL ORDER)
------------------------------
Positions with the Company and Principal Business
-------------------------------------------------
Affiliations During Past Five Years
-----------------------------------
NAME AND AGE
- ------------
[photo] Member of the Executive Committee and
Chairman of the Compensation Committee.
During the past five years, Mr.
Culverhouse has been a senior partner of
Culverhouse, Botts & Story, a Tampa,
Hugh F. Culverhouse Florida law firm. He is also a director
75 of Chiquita Brands International, and
Director since 1987 Time Warner, Inc.
[photo] Chairman of the Audit Committee and
member of the Nominating Committee.
Until 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 Carillon Fund,
Inc., Carillon Investment Trust,
Theodore H. Emmerich Gradison Custodial Trust, Gradison-
67 McDonald Municipal Custodial Trust and
Director since 1988 Great American Communications Company.
[photo] Member of the Nominating Committee.
During the past five years, Mr. Evans
has been Vice President and General
Counsel of American Financial
Corporation, a diversified financial
services company. Mr. Evans is also a
James E. Evans director of American Financial
48 Enterprises, Inc. and Great American
Director since 1985 Communications Company.
[photo] Senior Vice President. Mr. Hahl has
been Senior Vice President of the
Neil M. Hahl Company for more than five years. He is
45 also a director of Buckeye Management
Director since 1992 Company.
[photo] Executive Vice President - Insurance
Group. Mr. Haverland was elected
Executive Vice President-Insurance Group
of the Company in February 1991. Prior
thereto, from April 1984 to February
1991, Mr. Haverland was Executive Vice
President of Great American Holding
Corporation, a holding company
Richard M. Haverland subsidiary of American Financial
53 Corporation, a diversified financial
Director since 1991 services company.
[photo] Chairman of the Nominating Committee and
member of the Audit Committee and the
Compensation Committee. During the past
five years, Mr. Hunt has been Chairman
of the Board (since April 1990),
Thomas M. Hunt President (until April 1990) and a
70 director of Hunt Petroleum Corporation,
Director since 1982 an oil and gas production company.
[photo] Chairman of the Board and Chief
Executive Officer; Chairman of the
Executive Committee. Mr. Lindner has
been Chairman of the Board and Chief
Executive Officer of the Company for
more than five years. During the past
five years, Mr. Lindner has been
Chairman of the Board and Chief
Executive Officer of American Financial
Corporation, a diversified financial
services company. He is also a director
of American Annuity Group, Inc.,
American Financial Enterprises, Inc.,
Chiquita Brands International, Inc.,
General Cable Corporation and Great
Carl H. Lindner American Communications Company. Mr.
74 Lindner is the father of Carl H. Lindner
Director since 1982 III and S. Craig Lindner.
[photo] President and Chief Operating Officer;
Member of the Executive Committee.
Mr. Lindner was elected President and
Chief Operating Officer of the Company
in February 1992. Prior thereto, he had
served as Vice Chairman of the Board of
the Company since October 1991. During
the last five years, Mr. Lindner has
been President of Great American
Carl H. Lindner III Insurance Company, a property and
40 casualty insurance company owned by
Director since 1991 American Financial Corporation.
[photo] Member of the Audit Committee. During
the past five years, Mr. Lindner has
been Senior Executive Vice President of
American Money Management Corporation, a
subsidiary of American Financial
Corporation which provides investment
services for American Financial
Corporation and its affiliated
companies. Since March 1993, Mr.
Lindner has also been President of
American Annuity Group, Inc. Mr.
Lindner is a director of American
Annuity Group, Inc., Chiquita Brands
International, Inc., General
S. Craig Lindner Cable Corporation, Great American
39 Communications Company and Spelling
Director since 1985 Entertainment Group Inc.
[photo] Vice Chairman of the Board; Member of
the Executive Committee and the
Compensation Committee. Mr. Martinelli
was President and Chief Executive
Officer of the Company from 1982 until
1987. He is Chairman of the Board and
Chief Executive Officer of Buckeye
Management Company, a Company subsidiary
which is the sole general partner of
Buckeye Partners, L. P., a limited
partnership principally engaged in
pipeline transportation of refined
petroleum products, and is a consultant
Alfred W. Martinelli to the Company. He is also a director of
66 American Annuity Group, Inc. and
Director since 1982 Spelling Entertainment Group Inc.
[photo] Senior Vice President, General Counsel
and Secretary. Mr. Olson has been
Senior Vice President, General Counsel
Robert W. Olson and Secretary of the Company for more
48 than five years. He is also a director
Director since 1992 of DI Industries, Inc.
In December 1993, Great American Communications Company
("GACC") 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. Although
not a director or officer of GACC during 1993, Carl H. Lindner
had been Chairman of the Board and Chief Executive Officer of
GACC prior to 1993 and was again elected Chairman of the Board of
GACC in January 1994.
The following table sets forth information, as of the Record
Date, concerning the beneficial ownership of the Company's equity
securities by each director and by all directors and 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 officer owned beneficially, as of the Record Date,
more than 1% of any class of any equity security of the Company
outstanding at that date or any equity securities of any of the
Company's subsidiaries.
<TABLE>
Amount and Nature
of
Beneficial Ownership
(a)
- ------------------------
<CAPTION>
Actual or
Potential
Preference Ownership
of Common
Stock (b) Stock
(c)(d)(e)
----------
- -------------------
<S> <C> <C>
Hugh F. Culverhouse ................... -
30,819
Theodore H. Emmerich .................. -
11,219
James E. Evans ........................ -
35,819
Neil M. Hahl .......................... -
309,961
Richard M. Haverland .................. -
269,307
Thomas M. Hunt......................... -
13,819
Carl H. Lindner(f)..................... -
620,904
Carl H. Lindner III(f) ................ -
239,180
S. Craig Lindner(f) ................... -
10,819
Alfred W. Martinelli .................. 212,698
457,618
Robert W. Olson ....................... -
281,829
All directors and executive officers
as a group(f) ........................ 212,698
2,504,157
</TABLE>
(a) Unless otherwise indicated, the persons named have sole
voting and investment power over the shares reported.
(b) The shares listed for Mr. Martinelli, and for all directors
and officers as a group, constituted all of the shares of
Preference Stock outstanding at the Record Date.
(c) Includes (i) 620,904, 239,180, 288,965, 166,817, 251,954 and
1,823,841 shares of Common Stock purchasable by Messrs. C.H.
Lindner, C.H. Lindner III, Hahl, Haverland and Olson and all
directors and officers as a group, respectively, through
exercise of the vested portions of employee stock options
held by them, (ii) 446,799 shares of Common Stock obtainable
by Mr. Martinelli, and by all directors and executive
officers as a group, through conversion of the Preference
Stock held by him and (iii) 10,819 shares of Common Stock
purchasable by each of Messrs. Culverhouse, Emmerich,
Evans, Hunt, S.C. Lindner and Martinelli (64,914 shares
purchasable by all directors as a group) through exercise of
stock options granted to them as non-employee directors.
(d) The shares set forth for Mr. C.H. Lindner (which do not
include the shares referred to in note (f)) and all
directors and officers as a group constituted 1.3% and 5.2%,
respectively, of the Common Stock outstanding at the Record
Date (including shares of Common Stock presently obtainable
by them as described in note (c)).
(e) Includes 2,490 shares for Mr. Haverland and 3,485 shares for
all directors and executive officers as a group that are
held in self-directed portions of the Company employee
savings plan accounts for such individuals, who are deemed
to have investment power, but do not have voting power, with
respect to such shares.
(f) Does not include 18,666,614 shares held by American
Financial Corporation ("AFC") and its subsidiaries, which
constituted approximately 40.5% of the Common Stock
outstanding at the Record Date. Messrs. C.H. Lindner, C.H.
Lindner III, and S. Craig Lindner are principal shareholders
of AFC. See "Certain Shareholders".
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company's Board of Directors held nine meetings in 1993.
The Company's Board of Directors has four committees: Executive
Committee, Audit Committee, Compensation Committee and Nominating
Committee.
Executive Committee.
-------------------- The Executive Committee consists of
four directors: Carl H. Lindner (Chairman), Hugh F. Culverhouse,
Carl H. Lindner III and Alfred W. Martinelli. 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 met once in
1993.
Audit Committee.
---------------- The Audit Committee consists of three
directors: Theodore H. Emmerich (Chairman), Thomas M. Hunt and S.
Craig Lindner. None 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, and the management of the
investments, of the pension and savings plans of the Company and
its subsidiaries. The Audit Committee met seven times in 1993.
Compensation Committee.
----------------------- The membership and functions of the
Compensation Committee are disclosed under "Compensation -
Compensation Committee Report for 1993". The Compensation
Committee met three times in 1993.
Nominating Committee.
--------------------- The Nominating Committee consists of
three directors: Thomas M. Hunt (Chairman), Theodore H. Emmerich
and James E. Evans. The resolutions establishing the Committee
require that a majority of its members be "independent
directors," which term is defined generally to mean a director
who, at the time of his initial election is not, and for three
years prior thereto was not, (a) the beneficial owner of 10% or
more of the Company's voting stock (a "10% shareholder"), (b) a
director, officer, employee, representative, affiliate or asso-
ciate of a 10% shareholder, (c) an officer, employee,
representative, affiliate or associate (other than a director) of
the Company or any of its affiliates or associates or (d) a
person having (directly or indirectly) a material business
relationship with the Company or a 10% shareholder of the Company
or any of their respective affiliates or associates. Other than
Mr. Evans, each of the current members of the Committee was
determined by the Board of Directors to be an "independent
director". The Committee's functions generally include:
identifying, reviewing and recommending to the Board of Directors
qualified candidates to fill vacancies on the Board of Directors
and any newly-created directorships; recommending to the Board of
Directors candidates to be nominated for election to the Board of
Directors at Annual Meetings of Shareholders; and recommending to
the Board of Directors a list of directors for selection as
members of each committee of the Board of Directors. The
Committee will consider shareholder suggestions for nominees for
director. Suggestions for Committee consideration may be
submitted to the Secretary of the Company, One East Fourth
Street, Cincinnati, Ohio 45202. Suggestions received by the
Secretary's office by December 31 will be considered by the
Committee at a regular meeting the following year preceding the
mailing of proxy materials to shareholders. The Nominating
Committee met once during 1993.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE ELECTION OF THE 11 NOMINEES AS DIRECTORS.
COMPENSATION
SUMMARY OF COMPENSATION
The following table summarizes the compensation of the
Company's Chief Executive Officer and its four other most highly
compensated executive officers (such five executive officers
being herein called the "Named Executive Officers").
<PAGE>
<TABLE>
SUMMARY
COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL
COMPENSATION COMPENSATION All Other
- ------------------------------------------ ---------------
Compensa-
Securities tion
Other Annual Underlying (3)
Compensation Options Granted ($)
Salary Bonus
(1) (2)
Name and Principal Position Year ($) ($)
($) (# of Shares)
- --------------------------- ---- ------ -----
------------ --------------- ---------
<S> <C> <C> <C>
<C> <C> <C>
Carl H. Lindner 1993 $ 893,750 $1,000,000
$ - 50,000 $ 99,712
Chairman of the 1992 787,568 400,000
- 150,000 65,837
Board and Chief 1991 675,000 200,000
- 109,090 48,404
Executive Officer
Carl H. Lindner III 1993 879,167 1,000,000
- 105,000 97,201
President and Chief 1992 598,361 325,000
- 561,360 42,662
Operating Officer 1991 30,769 -
- 109,090 1,577
Richard M. Haverland 1993 652,308 1,000,000
- 125,000 91,609
Executive Vice President -- 1992 520,827 600,000
- 171,590 90,752
Insurance 1991 456,164 500,000
- 163,635 30,632
Neil M. Hahl 1993 542,372 450,000
- 25,000 62,667
Senior Vice President 1992 502,077 249,750
- 103,570 50,952
1991 401,912 157,500
- - 37,608
Robert W. Olson 1993 456,619 350,000
10,633 20,000 51,692
Senior Vice President, 1992 422,681 183,750
- 93,310 43,264
General Counsel and 1991 351,361 122,500
- - 35,156
Secretary
</TABLE> <PAGE>
(1) Paid in 1993 pursuant to a 1983 agreement obliging the
Company to pay Mr. Olson an amount related to the taxes paid
by him as a result of his exercise in 1992 of an employee
stock option granted to him in 1982.
(2) Represents grants of options to purchase Company Common
Stock, except that 1992 includes grants of options to
Messrs. Lindner, Lindner III, Haverland, Hahl and Olson to
purchase 150,000, 125,000, 62,500, 81,752 and 71,492 shares,
respectively, of the common stock of General Cable
Corporation, as described below under "Stock Options".
(3) Consists of Company contributions under the defined
contribution retirement plan (the "Retirement Plan") and
Company matching contributions under the employee savings
plan (the "Savings Plan") in which the Named Executive
Officers participate (and related accruals for their benefit
under the Company's benefit equalization plan (the
"Equalization Plan"), which generally makes up certain
reductions caused by Internal Revenue Code limitations in
the Company's contributions to the Retirement Plan and the
Savings Plan), as follows:
<TABLE>
<CAPTION>
Name Year Retirement Plan Savings Plan
---- ---- --------------- ------------
<S> <C> <C> <C>
Carl H. Lindner 1993 $99,712 -
1992 65,837 -
1991 48,404 -
Carl H. Lindner III 1993 97,201 -
1992 42,662 -
1991 1,577 -
Richard M. Haverland 1993 82,615 $8,994
1992 82,024 8,728
1991 22,157 8,475
Neil M. Hahl 1993 53,673 8,994
1992 42,224 8,728
1991 29,133 8,475
Robert W. Olson 1993 42,968 8,994
1992 34,536 8,728
1991 26,681 8,475
</TABLE>
Messrs. Hahl and Olson each have arrangements entered into
in 1987 providing that if such person's employment were
involuntarily terminated without cause at any time prior to age
65, he would receive from the Company a severance payment equal
to his then current annual salary plus his then current target
bonus opportunity under the AIC Plan (as hereafter defined), and
would be entitled to full vesting of all Company stock options
held by him (which would be exercisable for up to two years after
such termination), full vesting of his accrued benefit under all
employer-sponsored savings and retirement plans and continued
participation for up to one year in all employer-provided group
insurance plans.
Stock Options.
- -------------
The tables set forth below disclose stock options granted to,
or exercised by, the Named Executive Officers during 1993, as
well as the number and value of unexercised options held by them
at December 31, 1993.
<PAGE>
<TABLE>
OPTION
GRANTS IN 1993
<CAPTION>
Individual Grants
Potential Realizable
- ------------------------------------------------------------
Value at Assumed Annual
Number of Percent of
Rates of Stock Price
Securities Total
Appreciation for Option
Underlying Options
Term
Name Options Granted Granted to
Exercise -------------------------
(1) Employees in
Price (2) Expiration
(# of shares) 1993
($/Share) Date (3) 5% ($) 10% ($)
- ----------------------- ------------- ------------
- --------- ---------- ---------- ----------
<S> <C> <C>
<C> <C> <C> <C>
Carl H. Lindner 50,000 11.5%
$28.19 2/6/2003 $ 887,006 $2,246,959
Carl H. Lindner III 105,000 24.1
28.19 2/6/2003 1,862,713 4,718,615
Richard M. Haverland 125,000 28.7
28.19 2/3/2003 2,216,067 5,615,950
Neil M. Hahl 25,000 5.7
28.19 2/3/2003 443,213 1,123,190
Robert W. Olson 25,000 4.6
28.19 2/6/2003 354,803 898,784
</TABLE>
<PAGE>
(1) The options were granted under the Company's Stock Option
Plan (the "Stock Option Plan") and cover Company Common
Stock. They vest (become exercisable) to the extent of 20%
per year, beginning one year from the February 3, 1993 date
of grant, and become fully exercisable in the event of
death, disability or retirement or in the event of
involuntary termination of employment without cause within
one year after a change of control of the Company.
(2) Represents the fair market value of Company Common Stock on
the date of grant.
(3) Subject to earlier termination in case of termination of
employment.
(4) Represents the hypothetical future values that would be
realizable if all of the options were exercised immediately
prior to their expiration in 2003 and the market price of
Company Common Stock had appreciated in value at the annual
rate of 5% (to $45.93 per share) or 10% (to $73.13 per
share) in 2003. Such hypothetical future values have not
been discounted to their respective present values, which
are lower.
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN
1993 AND 1993 YEAR-END OPTION VALUES
<CAPTION>
Name Type of Shares Value
Number of Securities Value of Unexercised
Option Acquired Realized
Underlying Unexercised in-the-Money Options
(1) on ($)
Options at at December 31, 1993
Exercise
December 31, 1993 (2) (3)
(# of
(# of Shares) ($)
Shares)
---------------------- --------------------
Exercis- Unexer- Exercis- Unexer-
able cisable able cisable
-------- --------- --------
-------- -------- -------- --------
<S> <C> <C> <C>
<C> <C> <C> <C>
Carl H. Lindner American Premier - -
589,086 115,454 $6,824,007 $1,071,921
General Cable - -
135,000 15,000 0 0
Carl H. Lindner III American Premier - -
130,908 519,542 1,102,935 3,907,383
General Cable - -
30,000 95,000 0 0
Richard M. Haverland American Premier - -
87,272 310,453 1,044,026 2,542,533
General Cable - -
20,000 42,500 0 0
Neil M. Hahl American Premier 7,525 $100,815
268,692 90,455 2,919,012 848,464
General Cable - -
61,578 15,000 0 0
Robert W. Olson American Premier 10,032 134,402
232,681 81,091 2,494,174 761,502
General Cable - -
53,325 14,000 0 0
</TABLE>
<PAGE>
(1) The General Cable options cover shares of Common Stock of
General Cable Corporation ("General Cable"). The grant of
General Cable options, which was approved by the Company's
shareholders in 1992, was made in connection with the
Company's 1992 distribution to Company shareholders of
substantially all of the stock of General Cable.
(2) Based on the closing price of American Premier Common Stock
on the New York Stock Exchange at December 31, 1993 of
$32.38 per share.
(3) Based on the closing price of General Cable Common Stock on
the Nasdaq National Market System at December 31, 1993 of
$3.88 per share.
The Company's Stock Option Loan Program permits officers,
employees and directors who are participants in the Stock Option
Plan to borrow from the Company up to 95% of the purchase price
for the Company shares acquired upon exercise of an option (plus
any applicable withholding taxes payable upon exercise). Under
the terms of such Program, the interest rate on such loans is the
applicable federal rate for loans compounded semiannually in
effect under Section 7872 of the Internal Revenue Code as of the
date of the loan. Since January 1, 1993, loans under this
Program have been outstanding to the following executive officers
of the Company (including Robert F. Amory, Vice President-
Controller, Robert E. Gill, Vice President-Taxes, and Michael D.
Mauer, Vice President) as follows:
<TABLE>
LARGEST AMOUNT OUTSTANDING AMOUNT OUTSTANDING
ANNUAL
NAME SINCE JANUARY 1, 1993 AT RECORD DATE
INTEREST RATE
- ---- -------------------------- ------------------
- -------------
<S> <C> <C>
<C>
Neil M. Hahl $ 123,269 $123,269
3.98%
161,099 161,099
3.65
Robert W. Olson 147,513 86,158
7.06
107,221 107,221
3.98
214,770 214,770
3.65
Robert F. Amory 112,900 112,900
6.00
Robert E. Gill 12,961 12,961
3.98
103,621 103,621
4.03
Michael D. Mauer 49,500 49,500
6.00
</TABLE>
In addition, since January 1, 1993, the Company has held notes
aggregating $8,906,236 bearing interest at 9% per annum that were
delivered by Alfred W. Martinelli, a director of the Company,
during previous years when he was an executive officer of the
Company in payment of 95% of the purchase price for convertible
Preference Stock of the Company issued to him under the Company's
now-terminated Career Share Purchase Plan. All of the foregoing
loans and notes are secured by a pledge of the Company stock
purchased in connection therewith.
Defined Benefit Retirement Plan.
- -------------------------------
The Company's Retirement Income Guarantee Plan (the "RIGP")
covers those employees who were participants in the Company's
former defined benefit retirement plan when it was terminated in
1985 and replaced with the defined contribution Retirement Plan.
The RIGP is generally designed to provide such employees with an
additional retirement benefit to the extent that their benefits
under the replacement Retirement Plan are less than they would
have received if the terminated retirement plan had continued.
Estimated annual benefits under the RIGP (and related
accruals under the Equalization Plan, which generally makes up
certain reductions in such benefits caused by Internal Revenue
Code limitations) payable to participants at the normal
retirement age of 65, are illustrated in the table below.
<TABLE>
PENSION PLAN TABLE
- -----------------------------------------------------------------
- -------
<CAPTION>
Years of Service
- ------------------------------------------------
Remuneration 15 20 25 30
35
--------------------- --------- -------- --------
- ------- --------
<S> <C> <C> <C> <C>
<C>
$ 700,000...............$206,900 $275,900 $309,800
$343,800 $377,800
800,000................236,900 315,900 354,800
393,800 432,800
900,000................266,900 355,900 399,800
443,800 487,800
1,000,000................296,900 395,900 444,800
493,800 542,800
</TABLE>
The estimated benefit amounts set forth above are based on a
percentage of the highest average compensation (defined as base
salary plus annual bonus amounts) during any five years of
employment preceding retirement and are calculated under the
single life annuity form of pension. In accordance with the
RIGP's provisions, the above figures have been reduced by the
percentage equal to 1.5% for each year of service of the
estimated maximum annual benefits payable under the Social
Security Act in respect of each category. The amounts shown in
the table would be further reduced by the accrued benefit under
the former retirement plan when it was terminated, as well as by
the aggregate amount of the vested Company contributions under
the Retirement Plan and related Equalization Plan accruals (plus
or minus net investment gains or losses thereon).
Messrs. Hahl and Olson have 11 and 14 full credited years of
service with the Company, respectively, under the RIGP (and the
Equalization Plan). The other Named Executive Officers do not
participate in the RIGP. For purposes of the above table,
compensation includes base salary plus annual cash bonuses (as
reflected in the Summary Compensation Table set forth above), but
does not include extraordinary cash bonuses, deferred awards,
other forms of deferred compensation or severance pay.
Compensation Committee Report for 1993
- --------------------------------------
Set forth below is the report of the Compensation Committee
of the Company's Board of Directors with respect to executive
officer compensation for 1993.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Company's 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. For 1993, the term
"senior" executive officers included the Chairman of the Board
and Chief Executive Officer (the "CEO"), the President and Chief
Operating Officer (the "COO") and each other executive officer
whose annual base salary exceeded $350,000. The Board has
generally delegated to the CEO the authority to approve the
compensation of executive officers other than "senior" executive
officers. However, 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
executive officers.
A. COMPENSATION OF EXECUTIVE OFFICERS.
The Company's compensation system for executive officers has
three principal components: annual base salary, annual incentive
bonuses and stock option grants. Under this system, a
significant portion of an executive's compensation, in both the
short-term and the long-term, is linked to the Company's
performance.
Before making decisions regarding salaries, bonuses and
option grants for "senior" executives, the Committee's practice
is first to informally discuss such matters with the CEO and the
COO and then to solicit their formal recommendations based on
such discussions. After the Committee has acted on such matters,
its practice is to present its recommendations to the full Board
for its approval (except in the case of stock option grants,
which are not subject to Board approval). The compensation
decisions discussed in this report accorded with recommendations
made by the CEO and COO and by the Committee.
Annual Bonuses.
--------------- Annual bonuses for all executive officers
other than the CEO and COO are determined under the Company's
Annual Incentive Compensation Plan (the "AIC Plan"). Under the
AIC Plan, cash bonuses may be granted to key employees (including
executive officers) for performance during a calendar year (a
"Bonus Year"). A bonus base amount for each AIC Plan participant
is established (by the Committee in the case of "senior"
executive officers) at the beginning of a Bonus Year based on a
subjective determination of what would be appropriate in each
instance. Bonus bases are generally set at higher percentages of
annual base salaries for "senior" executive officers than for
other participants, reflecting the Committee's belief that as an
executive's level of responsibilities increases, so should the
portion of such executive's total compensation opportunity that
is performance-based and therefore "at risk." The AIC Plan bonus
that is ultimately awarded may range from 0% to 200% (or in
certain cases a lower maximum percentage) of the bonus base. For
1993, bonus bases for "senior" executive officers participating
in the AIC Plan ranged from 39% to 109% of annual base salary.
The CEO and the COO do not participate in the AIC Plan, but
are eligible for such annual bonuses as the Board, based on the
Committee's recommendation, approves. As was the case in
previous years, bonus bases were not established for 1993 for
either the CEO or the COO because the Committee believed that the
determination of the annual bonus for the Company's top two
officers should not be constrained by reference to a fixed
amount.
The annual bonuses awarded to "senior" executive officers
(including the CEO and the COO) for the 1993 Bonus Year were
approved by the Committee and the Board in February 1994. The
bonuses for the "senior" executive officers other than the CEO
and the COO were awarded under the AIC Plan and ranged from 143%
to 200% of their bonus base amounts.
The bonuses awarded to "senior" executive officers for 1993
(which are disclosed in the Summary Compensation Table included
in this Proxy Statement) were based on assessments of both
Company performance and individual performance during 1993. As
explained below under the discussion of the CEO's compensation,
after reviewing a number of objective and subjective factors, the
Committee made a qualitative judgment that the Company's
performance and accomplishments were particularly superior in
1993, as compared to 1992 and 1991. The Committee also reviewed
with the CEO and COO the individual contributions that each
"senior" executive officer, including the CEO and the COO, made
to such performance and accomplishments, focusing particularly on
the three categories of achievement discussed below under the
discussion of the CEO's compensation. The Committee concluded
that each of the "senior" executive officers made very
substantial contributions to such achievements and therefore
approved bonuses that were substantially higher than those
awarded for 1992 and 1991. In so doing, the Committee did not
specifically relate any measure of performance or any
accomplishment to the level of bonuses awarded. Nor did the
Committee assign relative weight to any specific performance
factor. Rather, the Committee members made the subjective
determination that the bonuses awarded were appropriate in view
of their qualitative judgment that 1993 represented a truly
outstanding year of achievement for the Company that was in large
part attributable to the talents and efforts of its "senior"
executives.
In 1993, Congress enacted a $1 million ceiling on tax-
deductible remuneration paid after January 1, 1994 to the five
most highly compensated executive officers of a publicly held
corporation. The limitation does not apply to remuneration
payable solely on account of the attainment of one or more
performance goals approved by a compensation committee of outside
directors and by shareholders.
As indicated above, the Committee's practice with respect to
annual bonuses is performance-based. However, the Committee does
not adhere to pre-established performance goals in determining
annual bonuses because it believes that shareholder interests are
best served when outside directors on a compensation committee
apply their considered business judgment to qualitatively
evaluate senior management's performance and accomplishments at
the end of a given year and to make compensation decisions based
on such evaluations. By using this latter approach, the
Committee believes that it retains the flexibility needed to make
the compensation decisions it deems best for the Company without
feeling obligated to award inordinately high or inordinately low
bonuses that might otherwise be called for by a pre-established
formula or system that may not have properly accommodated
unanticipated or unusual developments.
Because the Company's existing system for determining the
bonuses of its executive officers does not rely on pre-
established performance goals, compensation to the Company's
"senior" executive officers that exceeds $1 million will not be
tax-deductible. For the reasons set forth above, the Committee
believes it is not appropriate tochange the Company's annual
bonus system in order to preserve the full tax deductibility of
such compensation. The Board concurs in this belief. In this
regard, it should be noted that, because of its substantial net
operating loss carryovers, the Company's requirement to currently
pay federal income taxes is substantially eliminated.
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. Options under the Company's Stock Option Plan are
granted at exercise prices equal to the fair market value of
Company Common Stock on the date of grant and vest (become
exercisable) at the rate of 20% per year. The Committee believes
that these features provide an optionee with substantial
incentives to maximize the Company's long-term success. The
stock option tables included in this Proxy Statement, including
the table disclosing options granted in February 1993, reflect
the Committee's policy of granting options to executive officers
that are commensurate, in the Committee's subjective judgment,
with their respective positions and ability to positively impact
the Company's performance. In deciding the sizes of the stock
option grants to executive officers in 1993, the Committee took
into account the sizes and dates of previous option grants to
such executive officers.
The Committee intends to take the steps necessary to
preserve the tax deductibility of executive officer compensation
arising from the exercise of stock options that would otherwise
be lost by application of the recently enacted ceiling on such
deductibility discussed above.
Annual Base Salaries.
--------------------- The Committee's policy is to approve
annual base salaries and salary increases for "senior" executive
officers that are appropriate, in the Committee's subjective
judgment, for their respective positions and levels of
responsibilities. In February 1993, the Committee approved
relatively large increases in the COO's and the Executive Vice
President's salaries, as reflected in the Summary Compensation
Table included in this Proxy Statement, based on the Committee's
judgment that these two executives' skills and experience in the
property and casualty insurance area will be particularly
important to the success of the Company's strategy-- announced in
1992--to focus its activity in that insurance area and that their
increased salary levels commencing in early 1993 were appropriate
reflections of the greater importance of their responsibilities.
B. COMPENSATION OF THE CEO.
The annual bonus awarded for 1993 to the CEO (which is
disclosed in the Summary Compensation Table included in this
Proxy Statement) was determined on the basis described above
under "Compensation of Executive Officers--Annual Bonuses". More
specifically, the Committee evaluated the Company's
achievements, both financial and non-financial, for the year and
the CEO's contributions to those achievements. In so doing, the
Committee considered the following: First, the Company achieved
1993 financial results that the Committee believes were
exceptional. Pre-tax income from continuing operations was
$190.1 million, representing a 126% increase over 1992. This
increase included a 25% growth in operating income from the
Company's core insurance operations and $98.5 million of gains
from the sale of the Company's investments in Tejas Gas
Corporation and Buckeye Partners, L.P. Second, the Company
substantially completed its announced strategic objective of
selling its six remaining wholly-owned non-insurance operating
subsidiaries. During 1993, the Company sold Vitro Corporation
and two smaller companies for approximately $103 million and
negotiated agreements in principle for the early 1994 sale of the
other three companies. Third, through a secondary public
offering of Company common shares owned by American Financial
Corporation ("AFC"), management was able to reintroduce the
Company in the public marketplace as a specialty property and
casualty insurance company that has attracted coverage by equity
analysts from several major brokerage firms. The Committee also
concluded that the CEO's leadership, vision and decision-making
contributed substantially to these accomplishments. Overall, the
Committee made the qualitative judgment that 1993 was a
particularly outstanding year for the Company that warranted the
size of bonus awarded to the CEO.
The CEO's annual base salary was increased by 15.6% - from
$800,000 to $925,000 - in February 1993 by approval of the
Committee and the Board. Also in February 1993, the Committee
granted the CEO stock options for 50,000 shares. The Committee
concluded at that time that such salary increase and option grant
were appropriate based on its assessment of the CEO's level of
responsibilities and his ability to lead the Company into a
successful future as a specialty property and casualty insurance
group--a conclusion the Committee believes was borne out by the
Company's achievements during the balance of 1993 that followed
the salary increase and option grant.
In approving the 1993 compensation for Mr. Lindner as CEO,
the Committee and the Board took into consideration the fact that
he had significant responsibilities during 1993 as an executive
officer of other enterprises. Mr. Lindner was and continues to
be Chairman and Chief Executive Officer of AFC, which owns 40.5%
of the Company's outstanding Common Stock, and has held similar
positions in certain corporations in which AFC has substantial
equity interests. Although Mr. Lindner devoted time to matters
relating to other enterprises, the Committee believes that his
overall compensation from the Company for 1993 was appropriate
and reasonable. This judgment is based on the Committee's
conclusions that Mr. Lindner fully and effectively discharged the
responsibilities of his position with the Company to the
Company's substantial benefit.
Members of the Compensation Committee:
Hugh F. Culverhouse (Chairman)
Thomas H. Hunt
Alfred W. Martinelli
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
Alfred W. Martinelli, a member of the Compensation Committee
of the Company's Board of Directors, was also during 1993 the
Chairman of the Board and Chief Executive Officer (but not an
employee) of Buckeye Management Company ("Buckeye"), a Company
subsidiary which is the sole general partner of Buckeye Partners,
L.P., a publicly-traded limited partnership principally engaged
in pipeline transportation of refined petroleum products. Mr.
Martinelli was President and Chief Executive Officer of the
Company from 1982 to 1987. The Company loans outstanding to Mr.
Martinelli during 1993 are described above under "Stock Options".
Neil M. Hahl, Senior Vice President and a director of the
Company, was also during 1993 President and a director of
Buckeye.
Performance Graph
- -----------------
The following graph compares the yearly percentage change in
the cumulative total shareholder return on the Company Common
Stock with the cumulative total return of the Standard and Poor's
("S&P") 500 Stock Index and the S&P Property-Casualty Insurance
Index from the end of 1988 to the end of 1993. To reflect the
Company's substantial completion during 1992 and 1993 of its
strategic transition from a diversified conglomerate to a
property and casualty insurance specialist, the following graph
compares the Company's total return for the period ($164.7) to
the total return of the S&P Property-Casualty Insurance Index
($205.7) rather than to the total return of the S&P Conglomerate
Index ($184.98), the comparative index that appeared in the
Company's 1993 Proxy Statement.
[The Performance Graph assumes that $100 is invested on
December 31, 1988 in American Premier Common Stock, the S&P 500
Stock Index and S&P Property-Casualty Insurance Index, including
reinvestment of dividends, and graphically shows the performance
of such respective investments for the five year period ending
December 31, 1993, including the following data points:]
<TABLE>
PERFORMANCE GRAPH
<CAPTION>
1988 1989 1990 1991 1992
1993
----- ----- ----- ----- -----
-----
<S> <C> <C> <C> <C> <C>
<C>
American Premier
Common Stock 100.0 115.2 85.3 115.4 123.1
164.7
S&P 500 Stock
Index 100.0 131.7 127.6 166.5 179.2
197.2
S&P Property-
Casualty
Insurance Index 100.0 146.2 142.9 178.8 209.4
205.7
</TABLE>
Directors
- ---------
The fee schedule for the Company directors, paid only to
directors who are not officers or employees of the Company, is as
follows: annual fee, $37,000; attendance fee for each Board of
Directors meeting, $1,250; annual committee fee, $7,000;
attendance fee for each committee meeting, $1,000; and annual
committee chairmanship fee for the Executive Committee, $15,000,
the Audit Committee, $10,000, the Compensation Committee,
$10,000, and the Nominating Committee, $10,000. In addition,
directors not also officers or employees of the Company are
compensated $1,500 per day and reimbursed for related
out-of-pocket expenses for special services requested of them by
the Chief Executive Officer beyond the normal responsibilities of
a member of the Board of Directors or of a Board committee.
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 he reaches age
55. A director who receives a retirement benefit must agree to
provide consulting services to the Company on request for five
years following his 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 he was eligible for
a retirement benefit when he died. This death benefit will not
be available to a director who at any time during the two years
immediately preceding his 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
grants of options to each non-employee director of the Company.
During 1993, 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 $31.38 per share,
which was the fair market value of Company Common Stock on the
date of grant.
CERTAIN TRANSACTIONS
On February 10, 1994, the Company announced that it is
considering a proposal from American Financial Corporation
("AFC") for the purchase by the Company of the personal lines
insurance businesses owned by Great American Insurance Company
("Great American"), a wholly owned subsidiary of AFC, for a
proposed purchase price of approximately $380 million in cash.
Great American's personal lines businesses reported net earned
premiums of $342 million in 1993 and $322 million in 1992.
Approximately 70% of these premiums came from standard private
passenger automobile insurance, 25% from multiperil homeowners'
insurance and 5% from other lines. AFC's proposal for the sale
of the personal lines businesses to the Company would include the
transfer by Great American of an investment portfolio of
securities with a market value of approximately $450 million,
consisting principally of investment grade bonds. Great American
estimates that the generally accepted accounting principles
("GAAP") net book value of the businesses that would be
transferred at closing would be approximately $200 million. The
Board has appointed a special committee of its outside directors
to review the proposal. The special committee is empowered to
negotiate all aspects of the proposed transaction, including the
purchase price proposed by AFC. Completion of a transaction
would be subject to certain conditions, including approval by the
special committee, receipt by the Company of an appropriate
fairness opinion from an investment banking firm and any required
regulatory approvals. For information regarding AFC's ownership
of Company Common Stock, see "Certain Shareholders" below.
In 1992, the Company distributed to Company shareholders
substantially all of the common stock of General Cable
Corporation ("General Cable"). In connection with that
distribution (the "Spin-Off"), the Company retained a $255
million, 9.98% subordinated note due 2007 (the "General Cable
Note") and a $36.9 million note due June 30, 1993 bearing
interest at the prime rate (the "Short-Term Note") issued by
General Cable. AFC and its subsidiaries (other than the Company)
together own approximately 44.6% of General Cable's outstanding
stock, which was acquired by virtue of the Spin-Off. The Short-
Term Note was repaid in full, with interest, when due in 1993.
General Cable is permitted under specified circumstances to pay
interest due on the General Cable Note with additional 9.98%, 6-
year notes ("Interest Notes") in lieu of cash. On February 14,
1994, General Cable prepaid, with interest, (a) both of the
Interest Notes it had previously delivered to the Company and (b)
$13.6 million of the principal of the General Cable Note. Giving
effect to the foregoing, the largest amount of indebtedness owed
by General Cable to the Company since January 1, 1993 was $311
million. The amount of such indebtedness outstanding at the
Record Date was $253.5 million, which includes a $12.0 million
Interest Note delivered on March 31, 1994.
On December 31, 1990, the Company acquired Great American's
non-standard private passenger automobile insurance businesses
(the "NSA Group") for $335 million. Under the terms of the
acquisition, the purchase price was to be adjusted by a payment
to be made in early 1995 by the Company to Great American of up
to $40 million, or alternatively by Great American to the Company
of up to $20 million, depending on the discounted present value
of the pre-tax earnings achieved by the NSA Group during the
1991-94 period. The adjusting payment was to be accompanied by
interest thereon from December 31, 1990. In November 1993, the
Company's Board of Directors concluded, based on the NSA Group's
pre-tax earnings since the beginning of 1991, that it was highly
probable that the Company would be required to pay the maximum
purchase price adjustment of $40 million when it became due.
That being the case, the Board determined that it would be in the
Company's best interests to prepay the $40 million as soon as
practicable in order to cut off the continued accrual of interest
on the purchase price adjustment at the relatively high rate
(approximately 12.25% per annum) prescribed by the acquisition
agreement. Accordingly, in December 1993, the Company paid Great
American $40.0 million, plus $12.8 million of interest, in full
satisfaction of the purchase price adjustment.
The respective investment portfolios of the NSA Group
insurance companies and of Republic Indemnity Company of America
("Republic Indemnity"), which is the Company's workers'
compensation insurance subsidiary, are managed by American Money
Management Corporation ("AMMC"), a subsidiary of AFC, for an
aggregate annual management fee equal to 0.20% of that portion of
the aggregate value of such companies' investment portfolios
which is less than $500 million and 0.10% of that portion of such
portfolio value which exceeds $500 million. The aggregate market
value at December 31, 1993 of the Company's insurance company
portfolios managed by AMMC was approximately $1.7 billion. AMMC
also manages the Company's fixed income investment portfolio and
the fixed income portfolio of certain of the Company's pension
plans for an annual fee equal to .025% of the aggregate value of
the respective portfolios, subject to a $125,000 annual minimum
fee. The aggregate market value of these two investment
portfolios at December 31, 1993 was approximately $595 million.
Each of the foregoing fees is payable in quarterly installments
based on asset values measured as of the end of the preceding
calendar quarter. AMMC was paid an aggregate of approximately
$2.0 million under the foregoing agreements in 1993.
The Company's insurance subsidiaries received an aggregate
of approximately $91.3 million in premiums from Great American
insurance companies under various reinsurance arrangements in
1993. The Company's subsidiaries paid Great American insurance
companies an aggregate of approximately $210,000 in premiums for
1993 for general liability and other insurance coverage, and paid
approximately $1.3 million in commissions for 1993 to insurance
agencies owned by Great American.
In January 1993, Infinity Insurance Company ("Infinity"), a
member of the NSA Group, purchased certain electronic data
processing equipment, furniture, fixtures and automobiles at
their aggregate net book value of $355,500 from Stonewall
Insurance Company ("Stonewall"), a subsidiary of Great American.
The Company's subsidiaries provide various risk management
and real estate management services to AFC and its subsidiaries
and affiliates. Operating costs for services provided under
these arrangements are allocated to AFC based upon estimated
hourly rate charges for salary and fringe benefits, supplies and
rental expense in respect of the services performed. AFC and its
subsidiaries and affiliates were billed approximately $554,000 in
the aggregate for the services of such Company subsidiaries in
1993.
Prior to its sale in 1993, a Company subsidiary provided
environmental engineering and consulting services to General
Cable and Spelling Entertainment Group Inc. ("Spelling") in 1993
for which General Cable was billed approximately $454,156 and
Spelling was billed approximately $1,618,836. AFC and its
subsidiaries (other than the Company) owned 48.3% of Spelling's
outstanding stock until April 1993 when such ownership was
reduced to less than 5% of such stock.
It was determined in 1992 that the agreements governing the
Company's 1987 spin-off to its shareholders of its former
subsidiary, Sprague Technologies, Inc. ("Sprague"), obligate
Sprague to reimburse the Company for workers' compensation claim
payments which continue to be required with respect to Sprague's
operations from 1978 to 1987. The largest amount owed to the
Company since January 1, 1993 in respect of such obligation was
$2,655,400. At the Record Date, this amount had been repaid in
full. Sprague, now named American Annuity Group, Inc., became a
subsidiary of Great American on December 31, 1992.
The Company leases office space for its headquarters in The
Provident Tower building in Cincinnati, Ohio, which is owned by
AFC. Rental amounts paid or payable to AFC under the lease,
which expires in 1997, were approximately $845,000 for 1993, and
will be approximately $827,000 for each of the years 1994 through
1997. The lease agreement further provides that the Company as
lessee will pay a proportionate share of operating and tax
expense increases.
In 1993, the Company utilized the services of Provident
Travel Corporation, an AFC subsidiary which is a travel agency,
to facilitate business travel by Company employees on terms and
conditions customarily offered by commercial travel agencies in
the area.
CERTAIN SHAREHOLDERS
The following table sets forth information concerning each
person known to the Company to be the beneficial owner of more
than 5% of the Company's Common Stock. Such information has been
obtained from the Company's records and a review of statements
filed with the Securities and Exchange Commission pursuant to
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934
and received by the Company through the Record Date.
<TABLE>
Amount and
Name and address Nature of Percent
of Beneficial Owner Ownership of Class
------------------- ----------- --------
<S> <C> <C>
American Financial Corporation ("AFC") 18,666,614(b) 40.5%(c)
One East Fourth Street
Cincinnati, Ohio 45202 (a)
</TABLE>
(a) Carl H. Lindner, Chairman of the Board and Chief Executive
Officer of the Company, is the Chairman of the Board and
Chief Executive Officer of AFC. Mr. Lindner shares with AFC
voting and investment power with respect to the shares of
the Company's Common Stock owned by AFC. AFC and Carl H.
Lindner may be deemed to be controlling persons of the
Company. At the Record Date, all of the outstanding common
stock of AFC was owned by Carl H. Lindner, members of his
family and trusts for their benefit.
(b) The shares listed include shares held by subsidiaries of
AFC, but do not include 620,904 shares purchasable by Carl
H. Lindner through exercise of the vested portions of
employee stock options held by him.
(c) The percentage shown is calculated based upon the total
number of shares of Common Stock which were outstanding at
the Record Date (46,125,271 shares of Common Stock). Adding
to such outstanding shares the 1,376,672 shares set aside at
the Record Date for issuance to certain prereorganization
creditors and other claimants under the 1978 Plan of
Reorganization of the Company's predecessor would change
such percentage to 39.3%.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
DELOITTE & TOUCHE TO AUDIT THE 1994
CONSOLIDATED FINANCIAL STATEMENTS OF
THE COMPANY
The Board of Directors has, in accordance with the
recommendation of the Audit Committee, appointed Deloitte &
Touche, independent certified public accountants, to audit the
consolidated financial statements of the Company and its
subsidiaries for 1994.
The Company expects representatives of Deloitte & Touche to
attend the Annual Meeting, to be available to respond to
appropriate questions from shareholders, and to have the
opportunity to make a statement if they so desire.
The BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE TO
AUDIT THE 1994 CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY.
PROXIES
Solicitation.
------------- 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 or
by telegraph or 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 $10,500 plus out-of-pocket expenses.
Revocation.
---------- The execution of a proxy does not affect the
right to vote in person at the meeting, and a proxy may be
revoked by the person giving it prior to the exercise of the
powers conferred by it. A shareholder may revoke a proxy by
communicating in writing to the Secretary of the Company at the
address indicated above or by duly executing and delivering a
proxy bearing a later date. In addition, persons attending the
meeting in person may withdraw their proxies. Unless a proxy is
revoked or withdrawn, the shares represented thereby will be
voted or the votes withheld at the Annual Meeting or at any
adjournments thereof in the manner described in this Proxy
Statement.
QUORUM AND VOTE REQUIRED FOR APPROVAL
The presence at the Annual Meeting, in person or by proxy,
of the holders of at least a majority of the shares of the Common
Stock of the Company outstanding at the Record Date shall
constitute a quorum to consider Proposals 1 and 2. Under the
Pennsylvania Business Corporation Law (the "PBCL"), in the event
a quorum does not attend the Annual Meeting, those shareholders
who attend in person or by proxy may adjourn the meeting to such
time and place as they may determine, but those who attend the
first such adjourned meeting, although less than a quorum as
described above, shall constitute a quorum for the purpose of
electing directors. In accordance with the PBCL and the
Company's Articles and By-laws, all valid proxies will be counted
toward the presence of a quorum, notwithstanding directions
thereon to abstain from voting on one or more of the proposals to
be voted upon at the Annual Meeting, but such abstentions and
broker non-votes will not be counted in the election of directors
or in determining whether the requisite vote has been obtained
for the adoption of Proposal 2.
The 11 nominees receiving the highest number of votes shall
be elected as directors. As indicated above under "Outstanding
Voting Securities of the Company", cumulative voting is
applicable to the election of directors.
The affirmative vote of the holders of at least a majority
of the shares of Common Stock voting on the matter will be
required to adopt Proposal 2 (relating to appointment of
independent accountants). If the appointment of Deloitte &
Touche is not ratified by the requisite majority vote, the Board
of Directors will reconsider the appointment.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Proposals intended to be presented by shareholders at the
1995 Annual Meeting of Shareholders must be received by the
Company not later than December 8, 1994, in order to be
considered for inclusion in the Company's proxy statement and
form of proxy relating to that meeting. Any such proposal should
be communicated in writing to the Secretary of the Company at the
address indicated above.
By Order of the Board of
Directors,
ROBERT W. OLSON
Secretary
Cincinnati, Ohio
April 7, 1994
<PAGE>
AMERICAN PREMIER UNDERWRITERS, INC.
COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL
MEETING ON MAY 12, 1994
Registration Name and Address PROXY
The undersigned appoints Carl H. Lindner III, Neil M. Hahl and
Robert W. Olson, and each of them, attorneys and proxies, with
the power of substitution to each, to vote all shares of Common
Stock of American Premier Underwriters, Inc. (formerly named The
Penn Central Corporation and hereinafter referred to as the
"Company") that the undersigned may be entitled to vote at the
Annual Meeting of Shareholders of the Company to be held on MAY
12, 1994, at 10:30 A.M., at The Cincinnatian Hotel, 601 Vine
Street, Cincinnati, Ohio, and at their discretion to cumulate
votes in the election of directors, on the proposals set forth
below and on such other matters as may properly come before the
meeting or any adjournment thereof.
THE PROXY HOLDERS WILL VOTE THE SHARES REPRESENTED BY THIS PROXY
IN THE MANNER INDICATED BELOW. 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" EACH OF THE TWO PROPOSALS SET
FORTH BELOW. UNLESS A CONTRARY DIRECTION IS INDICATED, THE PROXY
HOLDERS WILL GIVE THE PROXY HOLDERS NAMED ABOVE 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
JUDGEMENT OF THE PROXY HOLDERS NAMED ABOVE.
The Board of Directors recommends a vote FOR each of the
following proposals
1. Election of directors:
__ FOR AUTHORITY to elect __ WITHHOLD AUTHORITY
the nominees listed below to vote for every
(except those whose names nominee listed below
have been crossed out)
HUGH F. CULVERHOUSE RICHARD M. HAVERLAND S. CRAIG LINDNER
THEODORE H. EMMERICH THOMAS M. HUNT ALFRED W. MARTINELLI
JAMES E. EVANS CARL H. LINDNER ROBERT W. OLSON
NEIL M. HAHL CARL H. LINDNER III
2. Ratification of the appointment of Deloitte & Touche to
audit the 1994 consolidated financial statements of the
Company.
__ FOR __ AGAINST __ ABSTAIN
- ----------------------------------------------------------------
DATE: ____________, 1994 SIGNATURE: ________________________
SIGNATURE: ________________________
(IF HELD JOINTLY) IMPORTANT: PLEASE
SIGN AS NAME APPEARS HEREON INDICATING,
WHERE PROPER, OFFICIAL POSITION OR
REPRESENTATIVE CAPACITY. EXECUTORS,
ADMINISTRATORS, TRUSTEES, GUARDIANS,
ATTORNEYS AND CORPORATE OFFICERS SHOULD
GIVE THEIR FULL TITLES AS SUCH. IN CASE
OF JOINT HOLDERS, ALL SHOULD SIGN.
TO VOTE YOUR SHARES, PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY FORM USING THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
