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, 1993 No. 1-11632
AMERICAN ANNUITY GROUP, INC.
Incorporated under IRS Employer I.D.
the Laws of Delaware No. 06-1356481
250 East Fifth Street, Cincinnati, Ohio 45202
(513) 333-5300
Securities Registered Pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of Each Exchange
Title of Each Class on which Registered
<S> <C>
Common Stock, Par Value $1.00 Per Share New York
9-1/2% Senior Notes due August 15, 2001 New York
11-1/8% Senior Subordinated Notes due Febru- New York
ary 1, 2003
</TABLE>
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and need not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 1, 1994, there were 35,093,340 shares of the Registrant's
Common Stock outstanding. The aggregate market value of Common Stock held
by non-affiliates at that date was approximately $61.4 million based upon
non-affiliate holdings of 6,458,781 shares and a market price of $9.50 per
share.
Documents Incorporated by Reference: None
Documents Incorporated by Reference:
<PAGE>
PART III
ITEM 10
Directors and Executive Officers of the Registrant
The directors and executive officers of AAG are:
<TABLE>
<CAPTION>
Director or
Director or
NAME Age* Position Officer
NAME Age* Position Officer
<C> <C> Since
Since
<S> <C>
<C>
Carl H. Lindner 75 Chairman of the Board and 1987
Chief Executive Officer
S. Craig Lindner 39 Director and President 1993
Robert A. Adams 48 Director, Executive Vice 1992
President and Chief Oper-
ating Officer
A. Leon Ferge- 81 Director 1987
nson
Ronald G. Joseph 57 Director 1994
John T. Lawrence 42 Director 1994
III
William R. Mar- 65 Director 1994
tin
Alfred W. Marti- 66 Director 1987
nelli
Ronald F. Walker 56 Director 1987
John B. Berding 31 Senior Vice President - 1993
Investments
William J. Maney 44 Senior Vice President - 1993
Treasurer and Chief
Financial Officer
Mark F. Muething 34 Senior Vice President, 1993
General Counsel and
Secretary
Jeffrey S. Tate 37 Senior Vice President 1993
<FN>
* As of May 1, 1994
</TABLE>
Carl H. Lindner has been Chairman of the Board since 1987. Mr. Lindner
Carl H. Lindner
also serves as Chairman of the Board and Chief Executive Officer of AFC, a
diversified financial services company, and Chairman of the Board of the
following public companies: American Premier Underwriters, Inc. ("APZ")
(formerly The Penn Central Corporation); American Financial Enterprises,
Inc. ("AFEI"), Chiquita Brands International, Inc.; General Cable Corpora-
tion and Great American Communications Company ("GACC"). He also serves as
Chief Executive Officer or in a similar capacity with the following compa-
nies; APZ, a company engaged primarily in specialty, property and casualty
insurance businesses; AFEI, a company whose assets consist primarily of
investments in AAG, APZ and General Cable and Chiquita Brands, a leading
international marketer, processor and producer of quality fresh and pro-
cessed food products. AFC owns a substantial beneficial interest (over 20%)
in all of these companies. Mr. Lindner is the father of S. Craig Lindner.
S. Craig Lindner was elected a director of AAG on March 26, 1993. During
S. Craig Lindner
the past five years, Mr. Lindner has been Senior Executive Vice President of
<PAGE>
American Money Management Corporation ("AMM"), a subsidiary of AFC which
provides investment services for AFC and its affiliated companies, including
AAG, and he continues to serve in that position. He is also a director of
APZ, Chiquita, General Cable and GACC.
Robert A. Adams was elected a director of AAG on October 28, 1993. Mr.
Robert A. Adams
Adams was elected Executive Vice President and Chief Operating Officer of
the Company on December 31, 1992. For more than five years prior to
election as an officer of the Company, he was Senior Vice President and a
director of Great American Insurance Company ("GAI"), a whollyowned subsid-
iary of AFC engaged in the property and casualty insurance business. He
also served as Treasurer of GAI until October 1991.
A. Leon Fergenson has been a director of AAG since 1987. During the past
A. Leon Fergenson
five years, Mr. Fergenson has been a private investor and a director of
various corporations. He is also a director of Buckeye Management Company,
an APZ subsidiary which is the sole general partner of Buckeye Partners,
L.P., a limited partnership engaged principally in pipeline transportation
of petroleum products, Sequa Corporation and several mutual funds managed by
Neuberger & Berman, Inc.
Ronald G. Joseph was elected a director of AAG on March 2, 1994. During
Ronald G. Joseph
the past five years, Mr. Joseph has been President of Columbia Development,
a Cincinnati-based company which owns automobile dealerships and various
real estate development projects.
John T. Lawrence III was elected a director of AAG on March 2, 1994. Mr.
John T. Lawrence III
Lawrence has been a Senior Vice President with Kidder Peabody & Co., a
national investment banking firm, since January 1993. Prior thereto for
more than five years he was a Senior Vice President with Prudential Securi-
ties Inc. He is also a director of Spelling Entertainment Group Inc.
("Spelling").
William R. Martin was elected a director of AAG on March 2, 1994.
William R. Martin
Although currently retired, during the past five years Mr. Martin was
President of both Tominy, Inc. and M.B. Computing, Inc., which are each
privately held software development companies. Mr. Martin is also a
director of General Cable.
Alfred W. Martinelli has been a director of AAG since 1987. During the
Alfred W. Martinelli
past five years, Mr. Martinelli has been Vice Chairman of the Board of
Directors of APZ and Chairman of the Board and Chief Executive Officer of
Buckeye Management Company, an APZ subsidiary. He is also a director of
Spelling.
Ronald F. Walker has been a director of AAG since 1987. During the past
Ronald F. Walker
five years, Mr. Walker has been President and Chief Operating Officer and a
director of AFC. He was President and Chief Operating Officer of APZ from
March 1987 to February 1992, and a director of APZ from May 1982 to February
1992. In addition, he has served as President and Chief Executive Officer
and a director of General Cable since July 1, 1992. Mr. Walker is also a
director of AFEI, Chiquita and Tejas Gas Corporation.
John B. Berding was elected an officer of AAG on March 26, 1993. During
John B. Berding
the past five years, he has been an investment analyst and, since February
1992, a Vice President of AMM, and he continues to serve in that position.
William J. Maney was elected an officer of AAG effective on February 15,
William J. Maney
1993. Prior thereto for more than five years he was Vice President -
Accounting of GAI.
Mark F. Muething was elected an officer of AAG on October 28, 1993. Prior
Mark F. Muething
thereto, he was a partner (from October 1991 to October 1993) and an
associate (from August 1984 to October 1991) with Keating, Muething &
Klekamp, a Cincinnati-based law firm.
<PAGE>
Jeffrey S. Tate was elected an officer of AAG effective on February 15,
Jeffrey S. Tate
1993. Prior thereto, he served as Vice President (from May 1990 to December
1992) and Assistant Vice President (from February 1988 to May 1990) of GAI.
In December 1993, 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.
<PAGE>
ITEM 11
Executive Compensation
Compensation of Directors
Compensation of Directors
Officers of AAG do not receive any additional compensation for serving as
members of the Board of Directors or any of its committees. Directors who
are not employees of AAG receive an annual fee of $20,000 for Board member-
ship and an annual fee of $5,000 for serving as Chairman of a Board Commit-
tee. In addition, directors who are not employees of AAG are paid a fee of
$1,500 for attendance at each Board meeting, and $750 for attendance at each
committee meeting. All directors are reimbursed for expenses incurred in
attending board and committee meetings.
Compensation of Executive Officers
Compensation of Executive Officers
The following table sets forth information concerning the annual and long-
term compensation for services in all capacities to AAG and its subsidiaries
for the three years ended December 31, 1993 paid to those persons who were,
at December 31, 1993, (i) the chief executive officer, and (ii) the other
four most highly compensated executive officers of AAG. The table also sets
forth information with respect to two additional individuals who were
executive officers during the year but were not serving as such at the end
of the year.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensa- Compensa-
tion tion
Other An- All Other
Name and Principal nual
Position Compensa- Securities Compensa-
<S> tion(h) Underlying tion (i)
YearSalary Bonus <C> Options/SARs<C>
<C> <C> <C> <C>
Carl H. Lindner 1993
$100,000 -- -- -- --
Chairman of the Board 1992
$70,556 -- -- -- --
and 1991 -- -- -- -- --
Chief Executive Offi-
cer (a)
S. Craig Lindner 1993
$193,282
$304,808 $53 125,000 --
President (b) 1992 -- -- -- -- --
1991 -- -- -- -- --
Robert A. Adams 1993
$425,000
$428,123 $4,160 125,000 $30,000
Executive Vice Presi- 1992 -- -- -- -- --
dent 1991 -- -- -- -- --
and Chief Operating
Officer (c)
William J. Maney 1993
$125,202
$122,981 $4,464 35,000 $14,150
Senior Vice Presi- 1992 -- -- -- -- --
dent, 1991 -- -- -- -- --
Treasurer and Chief
Financial Officer (d)
Jeffrey S. Tate 1993
$113,085$98,693 $1,937 35,000 $13,030
Senior Vice President 1992 -- -- -- -- --
(e) 1991 -- -- -- -- --
Jovite LaBonte 1993
$325,000
$246,250 $8,222 50,000 $30,000
President and Chief 1992
$337,500
$406,250 -- -- $30,000
Executive 1991
$324,038
$206,250 -- -- $30,000
Officer, Great Ameri-
can Life
Insurance Company (f)
Augustus I. duPont 1993
$175,000 -- $6,645 -- $325,291
Vice President, Gen- 1992
$167,639
$225,000 -- -- $27,126
eral 1991
$150,000$45,000 -- 5,000 $10,219
Counsel and Secretary
(g)
<PAGE>
<FN>
(a) Carl H. Lindner was elected Chief Executive Officer of AAG on April
19, 1992, and in such capacity he is paid an annual salary of $100,0-
00. Mr. Lindner did not participate in any other compensation plans
of AAG.
(b) S. Craig Lindner was elected President of AAG on March 26, 1993.
(c) Mr. Adams was elected Executive Vice President and Chief Operating
Officer of AAG effective on December 31, 1992 in connection with the
acquisition of GALIC from GAI.
(d) Mr. Maney was elected Senior Vice President, Treasurer and Chief
Financial Officer of AAG effective on February 15, 1993.
(e) Mr. Tate was elected Senior Vice President of AAG effective on
February 15, 1993.
(f) Mr. LaBonte retired on December 31, 1993.
(g) Mr. duPont resigned his position on October 28, 1993. The 5,000
shares underlying Mr. duPont's options were granted to him pursuant
to the Company's 1987 Stock Option Plan which has been discontinued.
(h) The amounts listed under "Other Annual Compensation" include the
value of automobile and homeowners insurance coverage provided
pursuant to the Executive Insurance Program and the premiums paid for
group life coverage in excess of $50,000 per individual, respective-
ly, for each person as follows: Mr. Adams - $2,942 and $1,218, Mr.
Maney - $4,036 and $428, Mr. Tate - $1,692 and $245 and Mr. LaBonte -
$4,939 and $3,283. The amount for Mr. Lindner reflects premiums paid
for group life coverage in excess of $50,000.
(i) Amounts listed under "All Other Compensation" for each of the named
persons for 1993, other than Mr. duPont, reflect amounts contributed
by AAG to the AFC ESORP. For Mr. duPont, the amount for 1993 re-
flects severance paid upon resignation. For prior years, the amounts
reflect benefits paid to Mr. duPont pursuant to plans which were in
place prior to the acquisition of GALIC.
</TABLE>
<PAGE>
SAR grants for the year ended December 31, 1993 for the Executive Officers
named in the Summary Compensation Table are as follows:
SAR GRANTS IN 1993
SAR GRANTS IN 1993
<TABLE>
<CAPTION>
Individual Grants
Individual Grants
% of Potential Realizable
% of Potential Realizable
Total Value at
Total Value at
SARs Ex- Assumed Annual Rates
SARs Ex- Assumed Annual Rates
SARs Granted er- Expira- of Stock Price
SARs Granted er- Expira- of Stock Price
Name Granted to Em- cise tion Appreciation
Name Granted to Em- cise tion Appreciation
<S> <C> ployees or Date(c) for SAR Term (a)
ployees or Date(c) for SAR Term (a)
in Fis-Base <C>
in Fis-Base
cal Pric
cal Pric
Year e(b) 0% 5%
Year e(b) 0% 5%
<C> <C> 10%
10%
<C> <C>
<C>
Carl H. -- -- -- -- -- -- --
Lindner
S. Craig 125,000 22.7% $9.00
3/26/2003$125,000
$911,250
$2,117,175
Lindner
Robert A. 125,000 22.7% $9.00
3/26/2003$125,000
$911,250
$2,117,175
Adams
William J. 35,000 6.4% $9.00
3/26/2003 $35,000
$255,150$592,900
Maney
Jeffrey S. 35,000 6.4% $9.00
3/26/2003 $35,000
$255,150$592,900
Tate
Jovite 50,000 9.1% $9.00
12/31/1995 $50,000
$121,795$199,830
LaBonte
(d)
Augustus -- -- --
-- -- -- --
I. duPont
<FN>
(a) The Potential Realizable Value is calculated based on a market price
for the AAG Common Stock on March 26, 1993, the date of grant of the
SARs, of $10.00 per share.
(b) The closing price for AAG Common Stock on March 26, 1993, the date of
grant of the SARs, was $10.00 per share.
(c) For each of the named individuals, other than Mr. LaBonte, 20% of the
SARs became exercisable on March 26, 1994 and 20% become exercisable
on each anniversary of the date of grant thereafter.
(d) Mr. LaBonte retired on December 31, 1993. As a result, his SARs
terminate two years after such date.
</TABLE>
<PAGE>
SARs exercised during the year ended December 31, 1993 from the Executive
Officers named in the Summary Compensation Table are as follows:
AGGREGATED SAR EXERCISES IN 1993 AND
AGGREGATED SAR EXERCISES IN 1993 AND
SAR VALUES AT DECEMBER 31, 1993
SAR VALUES AT DECEMBER 31, 1993
<TABLE>
<CAPTION>
Value of
Unexercised
In-the-Mon-
Number of ey
Securities SARs at
Underlying Fiscal
Unexercised Year End
SARs at (a)
Fiscal
Year End Exercisable
/
Name Exercisable/ Unexercisab
<S> SARs Value Unexercisable le
Exercised Realized <C> <C>
<C> <C>
Carl H. -- -- -- --
Lindner
S. Craig 0 0 0/125,000 0/$125,000
Lindner
Robert A. 0 0 0/125,000 0/$125,000
Adams
William J. 0 0 0/35,000 0/$35,000
Maney
Jeffrey S. 0 0 0/35,000 0/$35,000
Tate
Jovite 0 0 50,000/0 $50,000/0
LaBonte (b)
Augustus I. -- -- -- --
duPont
<FN>
(a) The Value of Unexercised In-the-Money SARs at Fiscal Year End is
calculated based on a market price for AAG Common Stock on December
31, 1993 of $10.00 per share.
(b) Mr. LaBonte retired on December 31, 1993. As a result, his SARs
became fully vested on such date.
</TABLE>
Organization and Policy Committee Interlocks and Insider Participation.
_______________________________________________________________________
The members of the Organization and Policy Committee are Ronald F. Walker
(Chairman), Ronald G. Joseph and Alfred W. Martinelli, none of whom was
during 1993 or prior years an officer or employee of AAG or any of its
subsidiaries. Mr. Walker is President and Chief Operating Officer of AFC
which owned all of the outstanding capital stock of GALIC prior to the
acquisition of GALIC by AAG on December 31, 1992. As a result of
transactions relating to AAG's acquisition of GALIC, AFC beneficially owns
80.01% of the outstanding shares of AAG Common Stock. See "Certain
Transactions" for additional information concerning relationships between
AAG and AFC and their respective subsidiaries.
In addition, Carl H. Lindner, Chairman of the Board and Chief Executive
Officer of AAG, is Chairman of the Board and Chief Executive Officer of AFC.
AFC's Board of Directors sets the compensation which Mr. Walker receives
from AFC and its wholly-owned subsidiaries.
<PAGE>
ITEM 12
Security Ownership of Certain Beneficial Owners and Management
Principal Stockholders
Principal Stockholders
The only person known to the Company to own beneficially more than 5% of
AAG's Common Stock was AFC and its subsidiaries, One East Fourth Street,
Cincinnati, Ohio 45202, which beneficially owned 31,319,629 shares, which
represented approximately 80% of the number of shares outstanding as of
April 15, 1994.
AFC and Carl H. Lindner, the beneficial owner of 40.8% of AFC's common
stock and the Chairman of its Board of Directors and its Chief Executive
Officer, share voting and investment power with respect to the shares of AAG
Common Stock owned by AFC. AFC and Carl H. Lindner may be deemed to be
controlling persons of AAG.
Holdings of Management
Holdings of Management
Information concerning AAG's Common Stock beneficially owned by each
director and executive officer and all directors and executive officers as a
group as of April 15, 1994, is shown in the following table:
Amount and Nature of
Amount and Nature of
Beneficial
Beneficial
Name Ownership(a) Percent of Class
Name Ownership(a) Percent of Class
10,000
Robert A. Adams *
A. Leon Fergenson 3,111 *
Ronald G. Joseph 2,000 *
John T. Lawrence III 2,000 *
Carl H. Lindner 31,319,629 (b) 80%
S. Craig Lindner -- --
William S. Martin -- --
Alfred W. Martinelli 4 *
Ronald F. Walker 15,000 *
John B. Berding 1,000 *
William J. Maney 1,000 *
Mark F. Muething 2,000 *
Jeffrey S. Tate 500 *
All Directors and Executive
Officers as a Group (13
persons) 31,356,224 80.1%
[FN]
* Less than 1%
(a) Unless otherwise indicated, the persons named have sole voting and
investment power over the shares listed opposite their names.
(b) Mr. Lindner may be deemed to own beneficially the shares set forth
under "Principal Stockholders" for AFC, of which Mr. Lindner is
Chairman of the Board and Chief Executive Officer and a principal
shareholder.
<PAGE>
ITEM 13
Certain Relationships and Related Transactions
GALIC, a wholly-owned subsidiary of the Company, and AMM, a wholly-owned
subsidiary of AFC, are parties to an Investment Services Agreement pursuant
to which AMM provides investment and custodial services to GALIC with
respect to GALIC's investments in accordance with guidelines approved by
AAG's directors who are not affiliated with AFC. GALIC pays AMM an annual
fee of .10% of total invested assets, provided that such fee shall not
exceed the actual cost to AMM of providing such services, and GALIC
reimburses AMM for certain expenses. Payments made by GALIC to AMM for 1993
totalled $4.4 million.
AAG and GALIC are members of AFC's consolidated tax group. AAG and GALIC
have separate tax allocation agreements with AFC which designate how tax
payments are shared by members of the tax group. In general, both companies
compute taxes on a separate return basis. GALIC is obligated to make
payments to (or receive benefits from) AFC based on taxable income without
regard to temporary differences. In accordance with terms of AAG's inden-
tures, AAG receives GALIC's tax allocation payments for the benefit of AAG's
deductions arising from current operations. If GALIC's taxable income
(computed on a statutory accounting basis) exceeds a current period net
operating loss of AAG, the taxes payable by GALIC associated with the excess
are payable to AFC. If the AFC tax group utilizes any of AAG's net
operating losses or deductions that originated prior to 1993, AFC will pay
to AAG an amount equal to the benefit received.
During 1993, AAG incurred consolidated income tax expense of $20.0
million, which amount is recorded as a liability to AFC on AAG's year end
balance sheet. Pursuant to the tax allocation agreement, GALIC paid AAG
$53.6 million in tax allocation payments in 1993 (including $19.0 million
for 1992).
GAI leases office space in Cincinnati, Ohio from GALIC under a lease which
expires in March 2009. GAI paid rent of $1.0 million to GALIC in 1992. In
1993, AAG made rental payments of $63,000 and $250,000 to GAI and Chiquita,
respectively, for the sublease of certain office space in Cincinnati, Ohio.
In 1993, GALIC entered into a coinsurance agreement with Carillon Life
Insurance Company, a subsidiary of GAI, whereby GALIC ceded $2.6 million in
annuity reserves and transferred an equal amount of cash to Carillon.
It was determined in 1992 that the agreements governing the Company's 1987
spin-off from APZ obligate the Company to reimburse APZ for workers'
compensation claim payments which continue to be required with respect to
the Company's operations from 1978 to 1987. The largest such amount
outstanding at any one time since January 1, 1993 was $2.7 million. The
Company paid $1.0 million to APZ with respect to this liability during 1993
and the remainder of the obligation was paid in the first quarter of 1994.
In 1993, AAG paid GAI $3.2 million, reflecting the remaining liability for
the purchase of GALIC.
In connection with the GALIC purchase, GALIC's costs for state guarantee
funds are set at $1 million per year for a five-year period with respect to
insurance companies in receivership, rehabilitation, liquidation or similar
situation at December 31, 1992. For any year in which GALIC pays more than
$1 million to the various states, GAI will reimburse GALIC for the excess
assessments. For any year in which GALIC pays less than $1 million, AAG
will pay GAI the difference between $1 million and the assessed amounts.
GALIC paid $2.2 million in assessments in 1993 and, accordingly, has
recorded a receivable from GAI at December 31, 1993 of $1.2 million.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, duly authorized.
AMERICAN ANNUITY GROUP, INC.
BY:
William J. Maney
Senior Vice President, Treasurer
and Chief Financial Officer
<PAGE>
