As filed with the Securities and Exchange Commission on October 28, 1996
Registration No. 333-
- --------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
Incorporated AMERICAN FINANCIAL GROUP, INC. I.R.S. Employer
Under the Laws ONE EAST FOURTH STREET Identification No.
of Ohio CINCINNATI, OHIO 45202 31-1422526
AMERICAN FINANCIAL GROUP, INC.
RETIREMENT AND SAVINGS PLAN
------------------------------------------
James C. Kennedy, Esq.
Deputy General Counsel & Secretary
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2538
(Agent for Service of Process)
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities To Be Price Offering Registration
To Be Registered Registered (1) Per Share (2) Price (2) Fee(3)
- -----------------------------------------------------------------------------------------------
Common Stock, 500,000 $34.5625 $17,281,250 $5,960.00
par value $1.00 Shares
per share
(1) This Registration Statement is filed for up to 500,000 shares
issuable pursuant to the American Financial Group Retirement and
Savings Plan.
(2) Estimated solely for purposes of calculating the registration fee.
(3) The registration fee has been calculated pursuant to Rule 457(h)
based on the average of the high and low prices of the Common Stock
as reported on the New York Stock Exchange on October 22, 1996 of
$34.5625 per share.
</TABLE>
Page 1 of 48 Pages
Exhibit Index on Page 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3.Incorporation of Documents by Reference
The following documents filed by American Financial Group, Inc. (the
"Company" or "Registrant") with the Securities and Exchange Commission are
incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 and June 30, 1996;
3. The Company's Current Reports on Form 8-K dated February 12,
1996, September 20, 1996 and October 21, 1996; and
4. The description of the Company's Common Stock contained in the
Registration Statement on Form 8-B filed on April 17, 1995
under the Securities Exchange Act of 1934.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
Common Stock offered has been sold or which deregisters all Common Stock then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing such
documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The legality of the Common Stock offered hereby will be passed upon
for the Company by Karl J. Grafe, Esq., Assistant General Counsel and
Assistant Secretary of the Company. Mr. Grafe beneficially owns 485 shares
of the Company's Common Stock.
Item 6. Indemnification of Directors and Officers
Ohio Revised Code Section 1701.13(E), allows indemnification by the
Registrant to any person made or threatened to be made a party to any
proceedings, other than a proceeding by or in the right of the Registrant, by
reason of the fact that such person is or was a director, officer, employee
or agent of the Registrant, against expenses, including judgment and fines,
if such person acted in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the Registrant and, with respect
to criminal actions, in which such person had no reasonable cause to believe
that such conduct was unlawful. Similar provisions apply to actions brought
by or in the right of the Registrant, except that no indemnification shall be
made in such cases when the person shall have been adjudged to be liable for
negligence or misconduct to the Registrant unless deemed otherwise by the
court. Indemnifications are to be made by a majority vote of a quorum of
disinterested directors or the written opinion of independent counsel or by
the shareholders or by the court. The Registrant's Code of Regulations
extends such indemnification.
- 2 -
<PAGE>
The Registrant maintains, at its expense, Directors and Officers
Liability and Company Reimbursement Liability Insurance. The Directors and
Officers Liability portion of such policy covers all directors and officers
of the Registrant and of the companies which are, directly or indirectly,
more than 50% owned by the Registrant. The policy provides for payment on
behalf of the directors and officers, up to the policy limits and after
expenditure of a specified deductible, all Loss (as defined) from claims made
against them during the policy period for defined wrongful acts, which
include errors, misstatements or misleading statements, acts or omissions and
neglect or breach of duty by directors and officers in the discharge of their
individual or collective duties as such. The insurance includes the cost of
investigations and defenses, appeals and bonds and statements and judgments,
but not fines or penalties imposed by law. The insurance does not cover any
claim arising out of acts alleged to have been committed prior to October 24,
1978. The insurer limit of liability under the policy is $50,000,000 in the
aggregate for all losses each year subject to certain individual and
aggregate deductibles. The policy contains various exclusions and reporting
requirements.
The Registrant also has entered into indemnification agreements with
its executive officers and directors providing for indemnification against
certain liabilities to the fullest extent provided by Ohio law.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
4 American Financial Group Retirement and Savings Plan
5 Opinion of Karl J. Grafe, Esq.
23.1 Consent of Karl J. Grafe, Esq. (contained on Exhibit 5).
23.2 Consent of Independent Auditor
23.3 Consent of Independent Auditor
24 Powers of Attorney (contained on the signature page).
Item 9. Undertakings
9.1 The undersigned Registrant hereby undertakes to file during
any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933, (ii) to reflect
in the prospectus any facts or events arising after the effective date of
this Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if) the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement; provided, however, that (i)
and (ii) shall not apply if the information required to be included in a post-
effective amendment is
- 3 -
<PAGE>
contained in periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement.
9.2 The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
9.3 The undersigned Registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
9.4 The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
9.5 Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit, or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
- 4 -
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Cincinnati, Ohio, on October 28, 1996.
AMERICAN FINANCIAL GROUP, INC.
By: Carl H. Lindner
-----------------------------------
Carl H. Lindner
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities as of the dates indicated. Persons whose names are marked with an
asterisk (*) below hereby designate James C. Kennedy or Karl J. Grafe as
their attorneys-in-fact to sign all amendments, including any post-effective
amendments, to this Registration Statement.
Signature Capacity Date
*Carl H. Lindner Chairman of the Board and Chief October 28, 1996
--------------------- Executive Officer (Principal
Carl H. Lindner Executive Officer)
*Carl H. Lindner III Director October 28, 1996
---------------------
*S. Craig Lindner Director October 28, 1996
---------------------
S. Craig Lindner
*Keith E. Lindner Director October 28, 1996
---------------------
Keith E. Lindner
*James E. Evans Director October 28, 1996
---------------------
James E. Evans
*Thomas M. Hunt Director October 28, 1996
---------------------
Thomas M. Hunt
*William R. Martin Director October 28, 1996
---------------------
William R. Martin
Fred J. Runk Senior Vice President and October 28, 1996
--------------------- Treasurer (Principal Accounting
Fred J. Runk Officer and Principal Financial
Officer)
- 5 -
<PAGE>
EXHIBIT 4
AMERICAN FINANCIAL GROUP
RETIREMENT AND SAVINGS PLAN
This document describes the American Financial Group Retirement and
Savings Plan (the "AFG RASP" or the "RASP"). The AFG RASP offers a tax
advantaged means by which eligible employees of American Financial Group,
Inc. (the "Company" or "AFG") and its participating subsidiaries may
accumulate capital on a regular and long-term basis for their retirement
income needs.
This Prospectus relates to 500,000 shares of the Company's Common
Stock, $1.00 par value (the "AFG Common Stock"), which may be purchased by
the Trustee under the RASP. AFG Common Stock may be purchased for the RASP's
AFG Common Stock Fund. AFG Common Stock is registered on the New York Stock
Exchange.
Additional information regarding the AFG RASP and its administrators
may be obtained by contacting the Company or the Plan Administrator at the
Company's principal executive offices, One East Fourth Street, Cincinnati,
Ohio 45202, attention: Human Resources. The Company's telephone number is
(513) 579-2121.
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.
This document is also the Summary Plan Description of the Plan
under the Employee Retirement Income Security Act of 1974, as amended.
Dated January 1, 1997
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<PAGE>
I. GENERAL INFORMATION
The AFG RASP was established by the Company, effective January 1,
1997, to offer you and other employees a way to develop personal savings for
retirement and to provide an opportunity to make various investments for
retirement, including investment in AFG Common Stock. The AFG RASP is a
consolidation of the following plans:
- American Financial Corporation Employee Stock
Ownership/Retirement Plan ("AFC ESORP");
- American Financial Corporation 401(k) Retirement Savings Plan
("AFC 401(k) Plan");
- American Premier Employee Stock Ownership Retirement Plan
("APU ESORP");
- American Premier Retirement and Savings Plan ("Staff RASP");
- American Premier Group Retirement and Savings Plan ("Group
RASP");
- Profit Sharing Retirement Plan and Trust of Leader National
Corporation ("Leader Plan"); and
- Transport Companies Employees' Profit Sharing and Retirement
Plan ("Transport Plan").
These plans are sometimes collectively referred to in this document
as the "Consolidated Plans".
The AFG RASP is designed to qualify as a contributory profit sharing
plan under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986
(the "Code"). This permits you to defer receipt of, and income taxes on, a
portion of cash compensation by having it contributed to the RASP. See the
Section on Tax Effects of Participation in the Plan. The AFG RASP is a
"defined
- 7 -
<PAGE>
contribution" type of plan under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). See the Section on Rights under ERISA.
This document does not describe completely all of the provisions of
the RASP. In the case of any conflict or apparent conflict between the
following description of the RASP and the full text of the AFG RASP, the Plan
Document will control. Copies of the Plan Document are available from the
Plan Administrator, and will be provided to you upon written request.
II. ADMINISTRATION
A. Employers
Employees of the Company and certain of its subsidiaries may
participate in the AFG RASP. The Company and each of these subsidiaries are
sometimes referred to as an "Employer." A complete list of Employers
participating in the AFG RASP may be obtained by written request to the
Company, and is also available for inspection at the Company, at the address
given on the cover of this document.
The Company's IRS Employer Identification Number is 31-1422526 and
the Plan Identification Number is 001.
B. Plan Administrator
The Plan Administrator is:
Administrative Plan Committee
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2121
The AFG RASP is administered by a committee (the "Administrative Plan
Committee" or the "Plan Administrator"). The members of the committee are
selected from time to time by
- 8 -
<PAGE>
the Company's Board of Directors. The Administrative Plan Committee may
adopt rules and regulations necessary to carry out and administer the AFG
RASP and has full power and authority to construe and interpret the Plan
Document. Under the AFG RASP, decisions and determinations of the
Administrative Plan Committee are final and binding on all parties to the
extent permitted by law.
The Administrative Plan Committee, in its capacity as a fiduciary of
the AFG RASP, has general authority and discretion to manage and control the
assets of the AFG RASP and to direct the Trustee as to their investment and
reinvestment to the extent that such decisions are not participant directed.
The Administrative Plan Committee is also responsible to select and review
the performance of (and change, if necessary,) the investment funds available
under the RASP. See the Section on Investment of Contributions.
C. Plan Trustee
The current trustee of the AFG RASP is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-
0001 (the "Trustee"). The Board of Directors of the Company may remove the
Trustee and appoint a successor trustee at any time. The Trustee manages the
assets of the AFG RASP and, in general, deals with these assets as directed
by the Administrative Plan Committee for the retirement account and matching
account and as directed by each participant for all other accounts.
D. Plan Records
The AFG RASP operates on, and all of its records are kept on, a
calendar year basis beginning January 1 and ending December 31 of each year
(a "Plan Year").
- 9 -
<PAGE>
E. Service of Process
The agent for service of process for the AFG RASP is:
Corporate Secretary
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Service of process may also be made on the Trustee or any member of
the Administrative Plan Committee.
III. ELIGIBILITY REQUIREMENTS
A. Participants in Consolidated Plans
If you were a participant in any of the Consolidated Plans on
December 31, 1996, you will continue as a participant in the AFG RASP as of
January 1, 1997. You must still be employed by the Company or a
participating subsidiary of the Company on January 1, 1997 to continue as a
participant. If you are an employee who was eligible as a participant only
in the 401(k) portion of the Group RASP, you will continue as a participant
in the AFG RASP for purposes of 401(k) savings only and will become eligible
for the retirement account contribution as described below.
B. Other Participants
Participants on January 1, 1997. Subject to the exceptions below, if
you (i) were not a participant in any of the Consolidated Plans, (ii) have
completed one year of service (or for purposes of 401(k) savings and
matching contributions, 90 days of service) as of January 1,1997, and (iii)
are employed by the Company or a participating subsidiary of the Company on
that date, you will be eligible to participate on January 1, 1997.
Eligibility for 401(k) Savings and Matching Contributions. Subject
to the exceptions below, you will become eligible to participate in the AFG
RASP for 401(k) savings and matching
- 10 -
<PAGE>
contributions as soon as administratively feasible after completing 90 days
of service with the Company or a participating subsidiary of the Company (and
you are still employed on that date).
Eligibility for Retirement Account Contributions. Subject to the
exceptions below, you will become eligible to participate in the AFG RASP
for retirement account contributions on the
January 1 or July 1 after completing one year of service with the Company or
a participating subsidiary of the Company (and you are still employed on
that date).
Notwithstanding the above, if you were hired on or before December
31, 1996 and you were a participant from the Republic Plan, you will become
eligible to participate in the RASP for retirement account contributions on
the first January 1, April 1, July 1 or October 1 after completing one year
of service with the Company or a participating subsidiary.
Eligibility for Rollover Contributions. Subject to the exceptions
below, you will be eligible to make a rollover contribution before meeting
the service requirements, if you would otherwise be eligible to participate
in the RASP.
Service. "Service" is determined in completed years and days, with
each consecutive 12- month period beginning on your date of hire and
anniversaries thereof constituting one year of service. In addition, each
consecutive 90 day period beginning on your date of hire are considered 90
days of service for purposes of making 401(k) contributions. Periods of
employment with an Employer or a subsidiary, including periods during which
you were considered eligible under the Consolidated Plans prior to January 1,
1997, will be recognized as service for the AFG RASP.
Excluded Employees. You are not eligible to participate in the AFG
RASP if:
- you are included in a unit of employees covered by a
collective bargaining agreement if retirement benefits were
the subject of good faith bargaining between the employee
representatives and the Employer;
- 11 -
<PAGE>
- you are not a United States citizen or resident alien;
- you are a "leased employee" (as defined in the Plan Document);
- you are self-employed; or
- you are covered by another qualified retirement plan sponsored
by the Company or a subsidiary of the Company.
IV. ENROLLMENT AND PARTICIPATION IN THE PLAN
If you are an eligible employee, you will become a participant in the
AFG RASP and may begin making 401(k) contributions by following the election
procedures set forth in the Section below on 401(k) Contributions. Even if
you do not make 401(k) contributions, you will automatically be eligible to
receive an Employer contribution to the retirement account upon eligibility
to participate in the AFG RASP (as described above by completing a year of
service).
You may continue participation in the AFG RASP until you terminate
employment with all Employers. If you are a former employee (including a
former participant from any of the Consolidated Plans), you will continue as
a Member of the RASP for as long as you maintain an account. If you transfer
to a non-participating Employer, you will not be eligible to receive any
further Employer contributions, make salary deferrals or receive a
distribution from the AFG RASP, as long as you are in active service.
V. CONTRIBUTIONS AND ACCOUNTS
A. Employer Contributions
General. All retirement account contributions made on or after
January 1, 1997 are required to be invested primarily in the AFG Retirement
Fund. The AFG Retirement Fund is invested in AFG securities unless the
Trustee is otherwise directed by the
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<PAGE>
Administrative Plan Committee (See the Section below on the AFG Retirement
Fund). All matching contributions to the 401(k) savings account made on or
after January 1, 1997, are required to be invested in the AFG Common Stock
Fund.
Employer Retirement Account Contributions. The Company may, in the
discretion of its Board of Directors, have each Employer make a retirement
account contribution for any Plan Year. The contribution, if any, may be
made in cash, in AFG Common Stock or other AFG securities. The contribution
may only be made on your behalf if you are actively employed by the Employer
on the last day of that Plan Year. If you die, retire or become disabled
during the Plan Year, you are deemed to have been employed on the last day of
the Plan Year. The retirement account contribution is allocated to you in
proportion to your covered compensation (as described below in the Section on
Participant Contributions).
Matching Contributions. The Company may, in the discretion of its
Board of Directors, have each Employer make a matching contribution. The
contribution, if any, may be made in cash or in AFG Common Stock for any
Plan Year. This contribution may be made on your behalf if you made 401(k)
contributions during the Plan Year, and you are actively employed by the
Employer on the last day of that Plan Year. If you die, retire or become
disabled during the Plan Year, you are deemed to have been employed on the
last day of the Plan Year. Matching contributions will be allocated to your
matching account based on the amount of 401(k) contributions made by you and
your covered compensation.
B. Participant Contributions
401(k) Contributions. You may direct the Employer to make
contributions from your covered compensation directly as a 401(k)
contribution on a pre-tax basis. Payment of your 401(k) contribution is
made by payroll deduction with the deducted amounts contributed by the
Employer to the AFG RASP on your behalf. Amounts you defer may receive a
matching contribution (see the Section above on Matching Contributions).
- 13 -
<PAGE>
- Election Procedure. At any time throughout the year
after meeting the eligibility requirements, you may elect to
make pre-tax contributions to your 401(k) savings account.
This election may be changed or stopped at any time. The Plan
Administrator may make rules and procedures regarding this
election and any changes.
- Contribution Limit. You may make 401(k) contributions of any
percent of your covered compensation in whole percentages up
to 13%. Federal law imposes annual limits on the amounts that
may be deferred and these limits may be changed each year as
required by law or as determined by the Company.
- Covered Compensation. The term "covered
compensation" means the amount paid to you for services
rendered as regular salary and/or hourly wages including
overtime and bonuses, but expense account allowances,
settlement payments, per diem payments, deferred compensation
arrangements and long-term incentive bonus pay are not
included. Any elective deferrals under the AFG RASP or another
plan qualified under Sections 401(k), 125 or 402(h) or other
similar types of plans of the Employer are included as covered
compensation. Covered compensation does not include amounts
paid before you are an eligible participant. The maximum
amount of covered compensation on which contributions may be
based is limited by law and is subject to adjustment by the
Secretary of the Treasury for increases in the cost of living.
- Change in Rate of Contributions. You may change the rate of
your 401(k) savings by calling AFG In-Touch at 1-800-458-2387.
Any such change will be effective as soon as administratively
feasible and will only apply to covered compensation not yet
earned as of the date of the change.
- 14 -
<PAGE>
- Termination of Contributions. You may discontinue making
401(k) contributions to the AFG RASP by calling AFG In-Touch
at 1-800-458-2387. If you stop making 401(k) contributions,
you may begin making contributions again only after calling
AFG In-Touch. If you stop making contributions, your existing
accounts will remain invested as directed by you and will be
held for you under the RASP.
- After-Tax Contributions. After-tax contributions to the RASP
are not permitted. However, if you are a participant from the
Staff RASP or the Group RASP, you may have had amounts
transferred from such plan to your after-tax account in the
AFG RASP.
- Rollover Contributions. If you are a participant, or an
employee who has not yet satisfied the Plan's eligibility
requirements, but will otherwise be covered by the AFG RASP,
you may make a rollover contribution in cash or AFG Common
Stock to the RASP with the consent of the Plan Administrator
and Trustee (which will be granted in a nondiscriminatory
manner).
C. Participant Accounts
You may have the following accounts:
Retirement Account to which retirement account contributions are
allocated. Included in this account are the amounts transferred for
participants from the AFC ESORP, the APU ESORP and the Transport Plan. You
cannot direct the investment of funds in this account.
401(k) Savings Account to which your 401(k) contributions are
allocated. You direct the investment of funds in this account.
- 15 -
<PAGE>
Matching Account to which Employer matching contributions are
allocated. You cannot direct the investment of the funds in this account
since they are all invested in the AFG Common Stock Fund. However, if you
are a participant from the Staff RASP, the Group RASP or the Leader Plan, you
may direct a portion of the matching contributions made for you before
January 1, 1997.
Rollover Account to which rollover contributions are allocated.
Rollover contributions may be made by you if you are a participant or an
employee who has not yet satisfied the eligibility requirements, but who
would otherwise be eligible to be covered by the AFG RASP. You direct the
investment of funds in this account.
Prior Profit Sharing Account to which prior profit sharing accounts
are transferred for you if you were a participant in the Staff RASP, the
Group RASP, or the Leader Plan. No future contributions will be made to
this account. You direct the investment of funds in this account in the same
way as in your prior plan as of December 31, 1996.
After-Tax Account to which after-tax contributions are transferred
for you if you were a participant in the Staff RASP or the Group RASP and had
made after-tax contributions. No future after-tax contributions are
permitted to be made to this account. You direct the investment of funds in
this account.
Retirement Rollover Account to which the retirement rollover accounts
are transferred for you if you were a participant in the Staff RASP or the
Group RASP. No future contributions will be made to this account. You
direct the investment of funds in this account.
Your accounts also have allocated to them the proportionate share of
earnings (or losses) and appreciation (or depreciation) of the investment
funds in which such contributions are invested. See the Section on
Investment of Contributions.
- 16 -
<PAGE>
You will receive a written statement of the value and status of your
accounts under the AFG RASP once each calendar quarter during each Plan
Year.
D. Limitations on Contributions to the Plan
Federal tax laws limit 401(k) savings and Employer contributions as
follows:
401(k) Contributions. Your 401(k) savings cannot exceed limits set
by federal law in any calendar year. (See the Section above on 401(k)
Contributions.)
Federal tax laws also establish formulas for determining the maximum
percentage of compensation which may be contributed to the AFG RASP by all
participants who are "highly compensated employees". Amounts contributed in
excess of the limitation are refunded. In addition, the Company may limit
the amount a highly compensated employee may contribute during the year in
order to meet these limits.
Overall Limitations on Contributions to the Plan. Your annual 401(k)
savings, Employer contributions (including matching contributions and
retirement contributions) and forfeitures are limited by federal law. Any
excess 401(k) savings are returned to you; any excess Employer contributions
or forfeitures are used to reduce contributions for the next Plan Year.
VI. INVESTMENT OF CONTRIBUTIONS
A. Responsibility for Selection of Investment Options
You are responsible for allocating among the various investment funds
the amounts in those accounts which you are entitled to direct. Neither the
Trustee, the Plan Administrator nor any officer or employee of the Company or
other Employer may advise you as to the manner in which your accounts should
be invested. The fact that an investment fund is available under the AFG
RASP should not be construed as a recommendation for investment in that
investment fund.
- 17 -
<PAGE>
You should keep in mind that the investment alternatives of the AFG
RASP are subject to normal market risks. The proceeds realized from the
investments depend on the prevailing market price at a particular time, which
may be more or less than the amount invested.
B. Investment of Participant Contributions
Participant contributions to the AFG RASP may be invested by the
participant in any one or more of the following investment funds selected
from time to time by the Plan Administrator:
U.S. Treasury Fund of America
Objective: Seeks to protect your savings and provide
regular income and liquidity (the ability
to convert assets to cash).
About the Fund: The fund invests solely in short-term U.S.
Treasury securities maturing in one year or
less. These are direct obligations of the
U.S. government and therefore backed by the
government's "full faith and credit" pledge
to repay investors. To you, that means
repayment of principal and interest is
guaranteed by the U.S. government.
Risk vs. Return: This fund is best described as
conservative. Although there is little
risk of the participant losing savings by
investing in this fund, there is little
growth opportunity and higher risk that the
investment will not sufficiently outpace
inflation.
Bond Fund of America
Objective: Seeks to maximize current income (from the
interest payments made on its bonds) while
maintaining liquidity and preserving the
participant's savings.
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About the Fund: The fund invests in a combination of high-
grade corporate bonds, U.S. Treasury bonds
and asset-backed securities. At times, non-
U.S. bonds and other lower-rated securities
may also be part of the portfolio. Since
the fund invests in more than one type of
security, it has the opportunity to seek out
the best values (generating the highest
returns) in the bond market without risking
principal.
Risk vs. Return: While still a conservative investment
choice, the Bond Fund of America is actively
managed to offer higher returns than short-
term bonds. Because it includes different
types of bonds, this fund is subject to some
price swings. The risk may be offset by the
greater growth potential and the moderately
high income it provides.
American Balanced Fund
Objective: Seeks to protect your savings and provide
both high current returns and long-term
growth opportunity.
About the Fund: The fund invests over 50% of its assets in
U.S. company stocks in key sectors of the
economy, health, energy, banking, utilities
and telecommunications. The remainder of
the assets are invested in high-grade
corporate and government bonds, convertible
securities and cash equivalents.
Risk vs. Return: With its mix of asset classes, this fund is
well diversified. It's investment strategy
offers moderately higher returns and a long-
term growth opportunity than the first two
funds.
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<PAGE>
Seven Seas 500 Index
Objective: To provide investors with income and growth,
the fund invests exclusively in stocks. It
seeks to replicate the performance of the
Standard and Poor's 500 Composite Stock
Price Index, the most popular benchmark of
stock market performance.
About the Fund: The fund attempts to mirror the performance
of the stock market as a whole by investing
in the 500 stocks held in the index. These
represent each major sector of the U.S.
economy , from consumer services to
technology to financial services.
Risk vs. Return: In the short term, this fund's value will
fluctuate more than the Balanced Fund.
However, since only a small portion of the
fund's total assets is invested in a single
stock, extreme price swings in any one stock
are minimized by the overall performance of
all stocks in the fund.
Fidelity Advisor Growth Fund
Objective: Seeks to provide investors with long-term
capital appreciation.
About the Fund: The fund invests in common stock, preferred
stock and securities convertible to common
stock of U.S. and international companies
with above-average growth in sales and
earnings. In addition to investing in
company stocks, the fund also invests in
opportunities such as debt securities.
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<PAGE>
Risk vs. Return: The fund offers the opportunity for long-term
gains. Since it bears the risk that the
companies in which it invests will not
perform as well as expected, there is no
guarantee of a positive return or that you
will not lose any principal.
MFS Emerging Growth Fund
Objective: Like the Fidelity Advisor Growth Fund, this
fund seeks to provide long-term capital
appreciation.
About the Fund: The fund invests mostly in common stocks of
start-up, small- and medium- sized companies
in a variety of industries. The fund
chooses companies with projected growth of
at least 20% a year. In addition, the fund
may invest up to 25% of its assets in
foreign securities.
Risk vs. Return: This fund's investment strategy is
aggressive, it takes chances on companies
with relatively short track records. These
shares may experience more dramatic swings
in short-term value. In the long-term, such
aggressive funds tend to outperform more
conservative investments, but this is not
guaranteed. For investors willing to take
on more risk, this fund offers high
potential for long-term growth.
Templeton Foreign Fund
Objective: This fund seeks to provide long-term capital
growth and does not emphasize short-term
growth or income.
About the Fund: Templeton invests exclusively in stocks and
bonds of governments and companies outside
the U.S. The general strategy focuses on
investing in companies and governments of
emerging countries, where investment
managers expect the most growth.
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<PAGE>
Risk vs. Return: This fund is best considered an aggressive
and risky mutual fund. Since this fund
invests in securities denominated in foreign
currencies, the short-term value of this
fund may have more dramatic swings than a
fund denominated in U.S. dollars. The value
of some foreign currencies in dollar terms
may fluctuate more over short periods of
time. Investments in securities traded in
these markets are made in local currencies,
the performance of which is linked to the
economic and political stability of that
country.
AFG Common Stock Fund
Objective: To allow participants to share in the
success and growth of AFG by owning shares
in AFG. It offers potential for capital
appreciation (through market price
increases), and investment income (through
dividends).
About the Fund: The fund invests solely in AFG Common Stock,
except for temporary investments of
available cash held pending investment.
Cash dividends paid in respect of shares
held by the Fund, and earnings on temporary
cash investments of the Fund, less expenses,
are invested in additional shares of Common
Stock and are credited proportionately to
your account in the Fund. Similarly, Common
Stock received by the Trustee by reason of a
stock dividend, stock split or similar
transaction is credited proportionately to
each account in the Fund. The
Administrative Plan Committee will direct
the Trustee on the voting of all shares of
Common Stock allocated to your account.
Interests in
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<PAGE>
AFG Common Stock Fund are valued
upon the closing price of the Capital Stock
on the New York Stock Exchange on the most
recent trading date coinciding with or
preceding the valuation date.
Risk vs. Return: Because it invests in only one company's
stock, this fund has the highest risk of the
investment options in the AFG RASP. It is
not a mutual fund and offers no built-in
diversification or liquidity.
In addition, some participants may have part of their account
invested in the Confederation Life Fund. This fund has been frozen since
1994. No future contributions or loan repayments may be directed to this
fund, nor can existing account balances be invested in this fund.
Participants cannot transfer, withdraw (either while in-service or as a final
distribution) or borrow from this fund. This fund cannot be used as
collateral for a loan.
C. Investment of Employer Contributions
All contributions to the retirement account may be made either in
cash, in AFG Common Stock, or other AFG securities and will be allocated to
the AFG Retirement Fund unless otherwise directed by the Administrative Plan
Committee. The AFG Retirement Fund invests in securities of AFG and other
subsidiaries, except for temporary investments of available cash held pending
investment. All contributions to the matching account may be made either in
cash or in AFG Common Stock and will be allocated to the AFG Common Stock
Fund described above in the Section on Investment of Participant
Contributions.
Cash dividends paid in respect of shares held by the AFG Retirement
Fund and earnings on temporary cash investments of the Fund less expenses,
are invested in additional shares of AFG securities and are credited
proportionately to your account in the Fund. Similarly, stock received by
the Trustee by reason of a stock dividend, stock split or similar transaction
is credited
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<PAGE>
proportionately to each account in the Fund. The Administrative Plan
Committee will direct the Trustee on the voting of all shares of stock
allocated to your account. Interests in the AFG Retirement Fund are valued
upon the closing price of the Stock on the applicable Stock Exchange on the
most recent trading date coinciding with or preceding the valuation date.
D. Diversification
If you have attained the age of 55 and are fully vested, you have the
right to diversify a portion of the assets in your retirement account
invested in the AFG Retirement Fund and your matching account invested in the
AFG Common Stock Fund in the year after you turn age 55. During the first
four years of the diversification period, you may elect to direct the
investment of up to a total of 25% of the AFG Retirement Fund held in your
retirement account and the AFG Common Stock Fund held in your matching
account. In the fifth year, you may elect to direct the investment of up to
an overall total of 50% of that amount. If you elect to diversify, the
applicable percentage of the AFG Retirement Fund and the AFG Common Stock
Fund (on a pro rata basis) is transferred as you direct. The earnings on any
amount you elect to diversify will automatically be reinvested as you
directed. In addition, the total dollar amount you may diversify may
increase each year because of earnings attributed to the AFG Retirement Fund
and the AFG Common Stock Fund.
For example, assume you had a total account balance of $50,000. This
includes $25,000 in the AFG Retirement Fund, $10,000 in the AFG Common Stock
Fund attributable to matching contributions and $15,000 invested in other
funds. In the year after you reach age 55, you may diversify up to 25% of
your AFG Retirement Fund ($25,000) and AFG Common Stock Fund ($10,000). That
would amount to $8,750 (25% of $35,000) being available to direct to the
other investment funds. If you chose not to diversify the entire 25% in the
first year, you could still choose to do so until the fourth year. In the
fifth year, you could diversify an additional 25% (or another $8,750) from
those two funds for a total of 50% diversification. Please note this example
does not reflect additional amounts that may be diversified each year because
of earnings from the funds.
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<PAGE>
E. Changes in Investments
You may change the investment of future contributions and/or transfer
prior contributions among Investment Funds by calling AFG In-Touch. The
change in investment decision becomes effective as soon as practicable after
such notice is given. You may change the investment of future contributions
as of any day of the calendar quarter. You may only elect to transfer prior
contributions already invested once each calendar quarter. Except as
previously noted, you may not transfer assets allocated to your Retirement
Account and Matching Account (See the Section above on Diversification).
F. Management of the Funds
The Trustee, the Plan Administrator and any Investment Managers
appointed by the Plan Administrator manage the investment funds for the sole
and exclusive benefit of you and all the participants. Neither the Company
nor any other Employer has any right, title or interest in contributions to
the Plan, although any excess or other contributions made by a mistake of
fact by an Employer may be returned to the Employer. Each investment fund
may be charged any fees, commissions or other expenses associated with the
investment transactions of the investment fund. No charges are incurred if
and when securities are purchased from the Company for the AFG Common Stock
Fund and the AFG Retirement Fund. The Plan Administrator may, in its
discretion, change any investment fund at any time.
The Plan Administrator may, in its discretion and at any time, change
the investment guidelines for any investment fund, appoint or change any
Investment Manager selected for a fund, or change any investment fund or any
mutual fund. In addition, the Plan Administrator may restrict transfers to
and from the AFG Common Stock Fund, the AFG Retirement Fund, or any fund
consisting of a guaranteed investment contract.
VII. VESTING UNDER THE PLAN
Any amounts transferred from the Consolidated Plans that were fully
vested before the consolidation will continue to be fully vested and
nonforfeitable.
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<PAGE>
You become vested in your retirement account and prior profit sharing
account in accordance with the following schedule:
Years of Service Vested Percentage
Less than 5 years 0%
5 years or more 100%
You become vested in your matching account in accordance with the
following schedule:
Years of Service Vested Percentage
1 year but less than 2 years 25%
2 years but less than 3 years 50%
3 years but less than 4 years 75%
4 years or more 100%
You become automatically vested in the full value of your retirement
account, matching account and prior profit sharing account upon the
occurrence of any of the following:
- attainment of age 60 (the normal retirement age under
the AFG RASP);
- total disability or death while an active employee;
- complete discontinuation of Employers' contributions to
or termination of the AFG RASP; or
- attainment of age 55 with 5 years of service (early
retirement age) if you were a participant in the Staff RASP or
the Group RASP on or before January 1, 1997 (you will be fully
vested in your retirement account and matching account).
Notwithstanding the above, if you were a participant in the Leader
Plan as of December 31, 1996, you will always be fully vested in your
retirement account, matching account and prior profit sharing account. If
your prior profit sharing account was transferred from the Group RASP, it
will always be fully vested.
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<PAGE>
If you were an employee of American Premier as of December 31, 1996
who would have become a participant in the Staff RASP or the Republic Plan
which was merged into the APU ESORP, you will become vested in your
retirement account in accordance with the following schedule:
Years of Service Vested Percentage
Less than 3 years 0%
3 years but less than 4 years 20%
4 years but less than 5 years 40%
5 years or more 100%
Service is determined from your date of hire. You will receive
credit for a year of service for each 12 consecutive month period you work.
Please note that you are always fully vested and have a
nonforfeitable interest in the full value of the following accounts:
- 401(k) savings account (your pre-tax contribution);
- after-tax account;
- retirement rollover account; and
- rollover account.
VIII. DISTRIBUTIONS WHILE STILL EMPLOYED
A. In-service Withdrawals
General. You may only request one in-service withdrawal every six
months during any calendar year and such withdrawals must come from the
accounts in the order set out below.
Regular Withdrawal. By calling AFG In-Touch, you may request, for
any reason, an in-service withdrawal in cash from your after-tax account (if
any) and your rollover account. In
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<PAGE>
addition, if you were a participant of the Staff RASP or the Group RASP, you
can withdraw from your vested matching account from the prior plan, excluding
contributions made in the last 24 months.
Age 59 1/2 Withdrawal. By calling AFG In-Touch, if you are age 59
1/2, you may request an in-service withdrawal of the amount available under a
regular withdrawal plus the value in your 401(k) account. In addition, if
you were a participant of the Staff RASP or the Group RASP, you can withdraw
the remaining vested balance in your matching account from the prior plan.
If you were a participant in the Leader Plan, you can also withdraw the
vested balance in your matching account from the prior plan. An age 59 1/2
withdrawal can be paid in cash or AFG Common Stock (to the extent invested in
the AFG Common Stock Fund), as you elect.
Amounts withdrawn are subject to income tax and may be subject to an
additional excise tax if you are not age 59 1/2.
B. Loans From Plan
You, or an employee who has made a rollover contribution, may, with
the approval of the Plan Administrator, borrow amounts (not less than $1,000)
from any of your accounts except your retirement account, prior profit
sharing account, and retirement rollover account. The Plan Administrator may
require that a request for a loan be submitted within a certain time period
prior to such date. Each loan will be made as soon as administratively
possible after such request. You may not have any more than two outstanding
loans at any time (however, all existing loans will be transferred from the
Consolidated Plans to the AFG RASP regardless of the number).
Loans are made in accordance with the participant loan program, as
set forth in a separate written document which identifies the person(s)
authorized to administer the program and specifies the procedure for loan
applications, the basis on which loans are approved or denied, limitations on
the types and amount of loans, the procedure for determining a reasonable
rate of
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<PAGE>
interest, the types of collateral which may secure a loan and the events
constituting a loan default. A copy of the loan package may be obtained by
calling AFG In-Touch. The loan program may be modified or amended from time
to time, and the Plan Administrator may establish other rules relating to
loans. Each loan, however, is subject to the following principal conditions:
1. The term of the loan may not exceed 54 months (120 months in
the case of a loan used for the purchase or construction of
your principal residence) and shall be due and payable upon
your termination of employment;
2. The loan must bear a reasonable rate of interest;
3. The loan must be evidenced by a promissory note and secured by
your account;
4. Loans must be repaid in level payments over the term of the
loan, and made only through payroll withholding; however, the
Plan Administrator may allow prepayment of the entire balance
by other means;
5. If a loan is secured by your account that is subject to a
qualified joint and survivor annuity form of benefit, you and
your spouse (if any) must consent to the loan and the amount
of security; and
6. The maximum amount of the loan is the lesser of:
a. $50,000 reduced by the highest outstanding loan
balance in the preceding twelve-month period;
b. 50% of the total value of the 401(k), matching,
rollover, after-tax, retirement rollover and Staff
RASP profit-sharing accounts; or
c. the value of the after-tax, rollover, 401(k) and
vested matching accounts.
7. Loans may not be used to purchase securities or to maintain, reduce
or retire another debt originally used to purchase securities.
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<PAGE>
To the extent that your loan is unpaid at the time of distribution from your
accounts, the unpaid loan amount will not be part of the distributed amount,
but will be taxed to you as if it had been distributed.
C. Hardship Withdrawals
Under certain limited circumstances and with the approval of the Plan
Administrator, you may withdraw amounts from your after-tax account, rollover
account (but not your retirement rollover account), 401(k) savings account
(but not the income earned on 401(k) savings after December 31, 1988) and the
vested portion of your matching account, less the outstanding balance of all
loans made to you. To assure that savings will be used for long-term needs,
such as retirement, and to conform to federal law, the Plan limits the
availability of these withdrawals.
Hardship withdrawals may only be made (a) in the event of an
immediate and heavy financial need and (b) if the withdrawal is necessary to
satisfy that need because the expenses cannot be paid for out of liquid
assets or current cash flow or otherwise reasonably financed. An immediate
and heavy financial need is limited (under IRS regulations) to the following
situations:
- purchase of your primary residence;
- post-secondary education for a person in your immediate
family for the next 12 month period;
- expenses previously incurred by you, your spouse or
any dependents because of medical expenses or necessary for
those persons to obtain medical care; and
- funds needed to prevent eviction from or foreclosure on
your primary residence.
Your request for a hardship withdrawal will be deemed necessary to
satisfy the financial need if all of the following requirements are met:
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- the withdrawal does not exceed the amount necessary to
satisfy the need (including anticipated federal taxes
resulting from the distribution); and
- you have obtained all other available distributions and
nontaxable loans under the AFG RASP.
In addition, the following restrictions will be applied after your
hardship withdrawal if any portion of the withdrawal is paid from your 401(k)
savings account:
- your 401(k) savings will be suspended for 12 months
after receipt of the withdrawal; and
- your 401(k) savings in the Plan Year following the year
of the hardship withdrawal may not exceed the difference
between the maximum amount that may be deferred for that plan
year and the amount of your 401(k) savings in the year of the
withdrawal.
The Plan Administrator reviews each withdrawal request and decides if
it meets these requirements. Hardship withdrawals are subject to income tax
and may also be subject to an additional 10% penalty tax if the distribution
occurs before age 59 1/2. No hardship withdrawal may be less than $1,000 or
exceed the balance of your after-tax account, rollover account, vested
matching account and 401(k) savings account.
D. Assignment of Benefits
Your interest in the AFG RASP may not be sold, transferred, assigned,
pledged, garnished or encumbered in any way, and any attempt to do so is
void, except in the case of a court order granted under certain domestic
relations laws and participant loans (see section above on Loans from Plan).
IX. DISTRIBUTIONS AFTER EMPLOYMENT ENDS
A. Distributions Upon Retirement, Death, Disability or
Termination of Employment
Upon your retirement or after age 60 (or, if you were a participant
in the Staff RASP or the Group RASP on or before
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<PAGE>
January 1, 1997, age 55 with 5 years of service) or your total disability or
death, the full value of all of your accounts is distributed to you upon your
request, or to your beneficiary in the case of your death. If your
employment terminates for any other reason, you may receive the full value of
your 401(k) savings, after-tax contributions, retirement rollover and
rollover contributions accounts (if any) plus the vested portion of your
retirement account, matching account and prior profit sharing account.
B. Commencement of Distributions
Generally, distributions from your 401(k) savings, matching, after-
tax, prior profit sharing, retirement rollover and rollover accounts will
begin as soon as practicable after your termination of employment. However,
distributions from your retirement account (except amounts if you were a
participant from the Republic portion of the APU ESORP) may only be made
after you have had five consecutive one-year periods of severance. A one-
year period of severance occurs when you are not employed for a 12-
consecutive month period. You may elect to defer distribution no later than
your 65th birthday.
C. Forms of Distributions
Distributions from the AFG RASP are paid as follows:
- 401(k) savings account, matching account
(before January 1, 1997), prior profit sharing
account, rollover account, after-tax account, and
retirement rollover account will be paid in either:
- a single lump sum in cash
or in AFG Common Stock to the extent invested
in the AFG Common Stock Fund; or
- by a direct rollover to an individual
retirement account or annuity (an "IRA") or to another
qualified plan that accepts rollovers.
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<PAGE>
- Retirement account and matching account (amounts after
January 1, 1997), will be paid in:
- the form of AFG Common Stock, to the
extent invested in the AFG Retirement Fund or AFG
Common Stock Fund (except a participant from the APU
ESORP may elect a distribution from those accounts for
amounts prior to January 1, 1997 in a single lump sum
in cash); or
- by a direct rollover to an individual
retirement account or annuity (an "IRA") or to another
qualified plan that accepts rollovers.
In addition, if you were a participant in the Staff RASP, the Group
RASP (excluding the participants from Republic) or the Leader Plan (prior to
July 1, 1988) you may elect to receive distribution of your accounts
transferred from such plans as follows:
- If you are married on the date your benefits are to
commence, you may elect distribution of your benefits in the
form of a qualified joint and survivor annuity and if you are
not married, you may elect distribution in the form of a
single life annuity option.
A qualified joint and survivor annuity provides payments to
you for life and, after your death, provides payments to your
surviving spouse for life. For this purpose, your spouse is
entitled to benefits only if he or she is your spouse when
benefits began; if you remarry subsequent to the time when
benefits begin, your new spouse is not covered. The amount of
each annuity payment to your surviving spouse is 50% of the
amount of each annuity payment during the joint lives of you
and your spouse.
If you elect a qualified joint and survivor annuity but then
change your mind, you may waive the qualified joint and
survivor annuity during a 90-day election period ending on the
date your benefit payments
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<PAGE>
commence. During the election period, you may revoke a
waiver. A waiver will not be effective unless your spouse
gives notarized consent in accordance with the plan
requirements, or you establish that you are not married. If
you are married and wish to take a single life annuity
contract, you will be required to follow this waiver
procedure.
If you die before the distribution of your benefits, your
spouse may receive a qualified preretirement survivor annuity.
This type of annuity provides payments for the remainder of
your spouse's life.
- If you were such a participant, you may elect
distribution in the form of a single life annuity option, a
joint and survivor annuity option or installment method
(either 60, 120 or 240 months); provided, however, no benefits
will be payable over a period exceeding the life of your
beneficiary.
If you are a participant for whom a retirement rollover account was
established, you may elect to have all or a part of your accounts transferred
from the Group RASP and the Staff RASP (in multiples of 10%) and transferred
to and paid from the American Premier Underwriters, Inc. Retirement Income
Guarantee Plan in accordance with the terms of that plan (if the plan accepts
such a transfer).
Finally, if you were a participant in the Leader Plan or the
Transport Plan, you also may elect to receive distribution of your accounts
under that plan as of December 31, 1996, in the form of substantially equal
annual, quarterly or monthly installments over a period not to exceed your
(or your beneficiary's) life expectancy. If you were a participant in the
Transport Plan, the period also may be over a period not to exceed the joint
life expectancy of you and your spouse.
D. Valuation of Accounts for Distribution
For purposes of any distribution from the AFG RASP, your accounts are
valued as of the most recent Valuation Date (each business day of the Plan
Year) coinciding with or preceding the payment.
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E. Procedure for Designating a Beneficiary
Your surviving spouse will automatically be your beneficiary unless
your spouse consents in writing to the designation of another beneficiary or
beneficiaries. Such written approval must be witnessed by a notary public.
If you are not married or if you are married and you have received
spousal consent, you may designate, on a form provided by the Plan
Administrator, the beneficiary or beneficiaries to receive your interest in
the AFG RASP in the event of your death. The beneficiary or beneficiaries
may be changed by you during your lifetime. If you are unmarried and you
fail to designate a beneficiary, or if all your designated beneficiaries
predecease or die simultaneously with you, distribution will be made to your
estate. You can obtain designation of beneficiary forms by calling AFG In-
Touch.
X. FORFEITURES AND REINSTATEMENT
If your employment terminates and you are not (and do not become)
fully vested in the value of your accounts, you will be entitled to receive a
distribution of the vested portion of your accounts (subject to the
provisions described in the Section above in Distributions After Employment
Ends) and the remainder will be treated as a forfeiture. If you forfeit a
portion of your accounts and are later reemployed by an Employer, or any
nonparticipating subsidiary of the Company, prior to incurring five consecu
tive one-year periods of severance, the portion forfeited will be restored if
you repay to the AFG RASP the full amount of the distribution.
XI. SPECIAL RULES FOR SECTION 16 PARTICIPANTS
If you are a participant who is subject to the requirements of
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as a result of your relationship with the Company ("Section 16
participants") you are restricted as described below:
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Rules promulgated under Section 16 establish exemptions from the
short-swing profit recovery provision described above. Under one of these
exemptions, Section 16 participants may generally acquire or dispose of an
issuer's equity securities under company-sponsored "tax-conditioned plans."
The AFG RASP qualifies as a tax-conditioned plan. Accordingly, Section 16
participants may generally acquire or dispose of Company Common Stock under
the AFG RASP to the same extent as participants who are not under Section 16.
However, Section 16 participants are restricted in their ability to conduct
what are known as "discretionary transactions." Discretionary transactions
are transactions by Section 16 participants under an employee benefit plan
involving voluntary fund switches or voluntary cash withdrawals relating to
an issuer equity securities fund. For a discretionary transaction to be
exempt from Section 16 liability, it must be effected by an election made at
least six-months following the date of the Section 16 participant's most-
recent "opposite-way" election under any plan of the Company. "Same-way"
elections, however, are not subject to this six-month condition, nor are non-
plan elections taken into consideration.
With respect to the Plan, Section 16(b) of the Exchange Act generally
provides that if a Section 16 participant makes any purchase and sale, or
sale and purchase, of shares for his or her AFG Common Stock Fund and/or his
or her AFG Retirement Fund within a six month period, all profit resulting
from the transactions must be turned over to the Company. Although the
acquisition of shares from the AFG Common Stock Fund and/or the AFG
Retirement Fund pursuant to the AFG RASP and the distribution of any of those
shares to a Section 16 participant are exempt from Section 16(b), the
subsequent sale of the shares will constitute a "sale" for purposes of that
Section.
XII. COSTS OF THE PLAN
The costs associated with operating the AFG RASP are allocated
proportionately to and paid out of each of the investment funds, unless the
Company elects to pay these expenses.
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XIII. TAX EFFECTS
A. Contributions
For purposes of calculating federal income taxes, you may exclude
from your taxable income the 401(k) savings made by you in the year in which
such contributions are made. Employer contributions and earnings allocated
to your accounts will have no effect on your federal tax liability until you
receive a distribution from the AFG RASP.
All your 401(k) savings, retirement contributions, and matching
contributions to the Plan are deductible by the Employer up to the
limitations of the Federal tax laws. As previously mentioned, the AFG RASP
is designed to qualify as a contributory profit sharing plan under Sections
401(a) and 401(k) of the Code.
B. Distributions
Upon distribution from the Plan, if you have participated in the AFG
RASP for five years or more and attained age 59 1/2, you may elect to have the
distribution of the entire amount in the AFG RASP taxed under a special five-
year averaging method. If you meet the five-year participation requirement
and attained age 50 before January 1, 1986, you may elect to have the
distribution of the entire amount in the Plan taxed under a special five-year
averaging method or under a special ten-year averaging method (using 1986 tax
rates). These averaging methods afford special tax treatment and reduce your
income taxes by treating all or part of the distribution as if it had been
received over a five-year or ten-year period. These averaging methods may be
used only once. These rules will not be effective for tax years beginning
after December 31, 1999. However, the prior transition rules for certain
individuals are still in effect if you attained age 50 before January 1,
1986.
You may transfer all or part of the distribution from the AFG RASP
to another qualified plan or to an individual retirement account or annuity
("IRA") within 60 calendar days after you receive the distribution. The
transferred portion of the
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distribution is then not taxable until it is distributed from the IRA or
qualified plan. However, if you roll a distribution over into an IRA, as
opposed to another qualified plan, you will not be eligible to qualify for
the special five-year (or ten-year, if applicable) averaging method when
withdrawing your benefits from the IRA at a later date.
If you do not elect the special five-year or ten-year averaging
method and do not rollover all of the distribution of your entire amount in
the AFG RASP, the amount distributed to you will be subject to ordinary
income tax. In addition, the distribution may be subject to an additional
10% tax, if it was not made as a result of (i) death, (ii) disability, (iii)
separation of service after age 55 or (iv) an in-service distribution after
age 59 1/2.
C. Individual Retirement Account Deductions
As a result of the Tax Reform Act of 1986, if you are an "eligible
participant" in the AFG RASP, you cannot make a full $2,000 deductible
contribution to an IRA unless your adjusted gross income is $25,000 or less
if you are single, or $40,000 or less if you are married. Allowable IRA
contributions are phased out for a single participant with adjusted gross
income between $25,000 and $35,000 and for a married participant with
adjusted gross income between $40,000 and $50,000. To the extent you cannot
make a deductible IRA contribution, you may make a nondeductible IRA
contribution, the earnings on which will be tax-deferred.
XIV. PROCEDURE FOR MAKING A CLAIM FOR BENEFITS
In order to present a complaint regarding the nonpayment of a RASP
benefit or a portion thereof, you or your beneficiary must file such claim by
mailing or delivering a written statement to the Plan Administrator. Upon
receipt of the claim, you will receive a written acknowledgment.
If a claim for benefits is denied, either in whole or in part, you or
your beneficiary must be furnished a written notice of the denial together
with an explanation of the specific reason
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or reasons why the claim was denied and the steps which can be taken to
perfect the claim. This notice must be given within a reasonable time not to
exceed 90 days, unless special circumstances require an extension.
You or your beneficiary, may request a review of the denied claim
within 60 days of receipt of the written notice that the claim was denied by
making written application for review to the Plan Administrator. If you do
not receive a written denial within 60 days, you may consider this a denial
and proceed with this process. You may also review the pertinent documents
and submit comments in writing as well as be represented by counsel at the
participant's expense.
A decision must, in turn, be made by the Plan Administrator within 60
days after receipt of the request for review, unless special circumstances
exist, but in no event later than 120 days after receipt of the request. The
decision must be set forth in writing and include reasons and references to
those Plan provisions on which it is based.
XV. NOTICES AND CORRESPONDENCE
You should direct all requests for forms and information to AFG In-
Touch at 1-800-458-2387. All notices and other correspondence to the Plan
Administrator should be sent to the attention of the Administrative Plan
Committee, American Financial Group, Inc., One East Fourth Street,
Cincinnati, Ohio 45202; telephone (513) 579-2121.
XVI. AMENDMENT AND TERMINATION OF PLAN
Although the AFG RASP has no termination date and may continue
indefinitely, the AFG RASP may be amended, modified or terminated at any time
by a written amendment of the Board of Directors of the Company and signed by
an officer of the Company. Any amendment, modification or termination may be
done without the consent of any other Employer. Further, with the consent of
the Company, any Employer may withdraw from the AFG RASP. No amendment to
the AFG RASP, however, may operate directly or indirectly to give any
Employer any interest in the assets of the
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AFG RASP, to permit those assets to be used for purposes other than the
exclusive benefit of you and the other participants or to deprive you or any
other participant of your vested interest in the AFG RASP at that time.
If the AFG RASP is terminated, all of your accounts will become fully
vested. The Company may direct either (i) that benefits be distributed in one
lump sum payment after the Internal Revenue Service determines that the
termination does not adversely affect the AFG RASP's qualification or (ii)
that the trust continue and benefits be distributed at the same time and in
the same manner as if the AFG RASP had not terminated (but without any
additional contributions).
If an Employer is dissolved, liquidated or adjudged bankrupt, the AFG
RASP will automatically terminate with respect to that Employer. The AFG
RASP will also terminate upon the merger, consolidation or reorganization of
an Employer or the sale of substantially all of its assets, unless the
successor or purchasing entity, whichever is the case, agrees to be
substituted for the Employer and to assume all of the Employer's obligations
under the AFG RASP.
XVII. TOP HEAVY RULES
Federal tax laws require that, in the event the Plan should become
"top heavy" (which occurs if the sum of the account balances of key employees
for any Plan Year exceeds 60% of all account balances), 100% vesting must
occur after three years of service and a minimum contribution must be made to
the AFG RASP equal to the lesser of 3% of compensation or the highest
percentage contributed for key employees. The rules are very complex. It is
unlikely the Plan will become top heavy, but if it does, AFG will let you
know.
XVIII. ESOP PROVISIONS
The terms of the AFG RASP permit the RASP to borrow funds on behalf
of the AFG RASP (referred to as an ESOP if borrowing is done) for the
exclusive benefit of you and other participants. In the event the AFG RASP
makes any such loans (called "ESOP
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Loans"), certain provisions of the RASP will become effective for your
benefit. These special rules include a requirement that the assets of the AFG
RASP be invested primarily in Employer equity securities (that is, the AFG
Retirement Fund described above in the Section called Investment of
Contribution) and other requirements regarding distributions and investments.
More information about this is available in the Plan Document.
XIX. RIGHTS UNDER ERISA
The terms of the AFG RASP are designed to comply with ERISA. The AFG
RASP is subject to many of the provisions of Title I and II of ERISA,
including those dealing with reporting, disclosure, participation, vesting
and fiduciary responsibilities. As a "defined contribution" "individual
account" plan, the AFG RASP is not subject to the minimum funding provisions
of Title I and Title II of ERISA or the plan termination insurance provisions
of Title IV of ERISA. Therefore, the benefits under the AFG RASP are not
insured by the Pension Benefit Guaranty Corporation.
Neither the Company, its officers, employees or members of the Board
of Directors, nor the Trustee or any other Plan fiduciary, may guarantee in
any manner the payment of benefits under the AFG RASP, or warrant or
represent that the market value of any securities held in the investment
funds under the AFG RASP will increase or will not decrease.
You and the other participants in the Plan are entitled to certain
rights and protections under ERISA. ERISA provides that all participants are
entitled to:
(a) Examine, without charge, at the Plan Administrator's office
and at other specified locations, all Plan Documents,
including copies of all documents filed by the Plan with the
U. S. Department of Labor, such as detailed annual reports and
Plan descriptions.
(b) Obtain copies of all Plan Documents and other Plan information
on written request to the Plan Administrator. The Plan
Administrator may make a reasonable charge for copies.
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(c) Receive a summary of the Plan's annual financial report. The
Plan Administrator is required by law to furnish each
participant with a copy of this summary annual report.
(d) Obtain a statement once a year setting forth the value of the
participant's accounts under the Plan and whether the
participant is vested in any portion of Employer matching
contributions.
In addition to creating rights for Plan participants, ERISA imposes
duties on those people who are responsible for the operation of the Plan.
Those who operate the Plan, called "fiduciaries," have a duty to do so
prudently and in the interest of Plan participants and beneficiaries.
No one may prevent a participant from obtaining a benefit or
exercising a right under ERISA by firing or otherwise discriminating against
a participant in any manner.
If a claim for a benefit is denied, in whole or in part, you must
receive a written explanation of the reason for the denial. In addition, you
have the right to have the Plan Administrator review and reconsider a claim.
Under ERISA, there are steps a participant may take to enforce the
above rights. For instance, if you request materials from the Plan and do
not receive them within 30 days, you may file suit in a federal court. In
such a case, the court may require the Plan Administrator to provide the
materials and pay you up to $100 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control of
the Plan Administrator. A participant who has a claim for benefits denied or
ignored, in whole or in part, may file suit in a state or federal court. You
may seek assistance from the U. S. Department of Labor or may file suit in a
federal court if you are discriminated against or if it should happen that
Plan fiduciaries misuse the Plan's money.
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The court will decide who should pay court costs and legal fees in
such a proceeding. If you are successful, the court may order the person
sued to pay these costs and fees. If you lose, the court may order you to
pay these costs and fees, for example, if it finds the claim to be frivolous.
A participant who has questions about the Plan should contact the
Plan Administrator. A participant who has questions about this statement or
about rights under ERISA should contact the nearest area office of the U. S.
Department of Labor-Management Services Administration, Department of Labor.
XX. RESTRICTIONS ON RESALE OF AFG STOCK
If you are a participant who is an "affiliate" of the Company, shares
of the Company's Common Stock or any other securities of AFG or a subsidiary
of AFG received from the RASP may not be resold unless you comply with
Commission Rule 144 or otherwise comply with the Securities Act of 1933. An
affiliate is generally described as a person who, directly or indirectly,
possesses the power to direct the policies and management of the Company,
whether through the ownership of stock, by contract or otherwise. Directors
and Executive Officers of AFG and principal AFG shareholders are affiliates.
XXI. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated by
reference herein:
(a) The Company's Annual Reports for the year ended December 31,
1995 filed on Form 10-K, as amended;
(b) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since January 1, 1996; and
(c) The descriptions of the securities offered hereby contained in
the following documents, as they may have been amended from
time to time, filed by the Company:
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(i) Common Stock -- Registration Statement on Form 8-B
filed on April 17, 1995 under the Exchange Act.
In addition, all documents subsequently filed by the Company and the
AFG RASP pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of filing of such documents.
The Company will provide you without charge, a copy of any document
(not including exhibits) incorporated by reference as well as a copy of any
other document required to be delivered pursuant to Rule 428(b) of the
Securities Act of 1933, as amended (including the Company's Annual Report,
proxy statements and all other reports and communications distributed to the
Company's security holders generally) or any Form 11-K filed by any of the
Consolidated Plans. A request, which may be oral or written, for such
documents should be addressed to the Company at the address and telephone
number given on the cover of this document.
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TABLE OF CONTENTS
Page
I. GENERAL INFORMATION 1
II. ADMINISTRATION 1
III. ELIGIBILITY REQUIREMENTS 3
IV. ENROLLMENT AND PARTICIPATION IN THE PLAN 4
V. CONTRIBUTIONS AND ACCOUNTS 5
VI. INVESTMENT OF CONTRIBUTIONS 8
VIII. DISTRIBUTIONS WHILE STILL EMPLOYED 15
IX. DISTRIBUTIONS AFTER EMPLOYMENT ENDS 19
X. FORFEITURES AND REINSTATEMENT 22
XI. SPECIAL RULES FOR SECTION 16 PARTICIPANTS 22
XII. COSTS OF THE PLAN 23
XIII. TAX EFFECTS 23
XIV. PROCEDURE FOR MAKING A CLAIM FOR BENEFITS 24
XV. NOTICES AND CORRESPONDENCE 25
XVI. AMENDMENT AND TERMINATION OF PLAN 25
XVII. TOP HEAVY RULES 25
XVIII. ESOP PROVISIONS 26
XIX. RIGHTS UNDER ERISA 26
XX. RESTRICTIONS ON RESALE OF AFG STOCK 27
XXI. INCORPORATION OF DOCUMENTS BY REFERENCE 28
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EXHIBIT 5
October 28, 1996
Direct Dial: (513) 579-2540
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Dear Sir or Madam:
I have acted as counsel to American Financial Group, Inc., an Ohio
corporation (the "Company") in connection with the preparation of a
Registration Statement on Form S-8 filed by the Company with the Securities
and Exchange Commission. The Registration Statement relates to the issuance
and sale of up to 500,000 shares of Common Stock, $1.00 par value, of the
Company pursuant to the American Financial Group Retirement and Savings Plan
(the "Plan").
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
such documents as I have deemed necessary or appropriate as a basis for the
opinions set forth below including (i) the Registration Statement, (ii) the
Restated and Amended Articles of Incorporation and Code of Regulations of the
Company, each as amended to the date hereof, and (iii) resolutions of the
Board of Directors of the Company relating to the approval of the Plan,
issuance of shares of Common Stock pursuant to the Plan and the filing of the
Registration Statement.
Based upon and subject to the foregoing, I am of the opinion that,
when (i) the Registration Statement has become effective under the Securities
Act of 1933 and (ii) the shares of Common Stock, when issued as contemplated
by the Plan, will constitute duly issued, fully paid and non-assessable
shares of Common Stock of the Company.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
Karl J. Grafe
----------------------------
Karl J. Grafe
Assistant General Counsel and
Assistant Secretary
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) and related Prospectus pertaining to the American Financial Group
Savings and Retirement Plan for the registration of 500,000 shares of its
common stock of our report dated March 15, 1996, with respect to the
consolidated financial statements and schedules of American Financial Group,
Inc. included in its Annual Report (Form 10-K) for the year ended December
31, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Cincinnati, Ohio
October 28, 1996
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EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of American Financial Group, Inc., for the registration of 500,000
shares of its common stock of (a) the report of Deloitte & Touche LLP dated
February 15, 1995 (March 23, 1995 with respect to the acquisition of American
Financial Corporation as discussed in Note 2 to the financial statements)
relating to the consolidated financial statements of American Premier
Underwriters, Inc. and (b) the report of Deloitte & Touche dated February 18,
1994 relating to the consolidated financial statements of General Cable
Corporation, both appearing in the American Financial Corporation Annual
Report on Form 10-K for the year ended December 31, 1994.
DELOITTE & TOUCHE LLP
Cincinnati, Ohio
October 28, 1996
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