AMERICAN FINANCIAL GROUP, INC. NON-EMPLOYEE DIRECTORS COMPENSATION PLAN (Amended and Restated as of February 23, 2012)

 

 

This Amended and Restated Non-Employee Directors Compensation Plan (“Plan”) of American Financial Group, Inc. (the “Company”) amends and restates the Non-Employee Directors’ Compensation Plan (as amended and restated as of January 1, 2011).  The purpose of the Plan is to provide compensation to the Company’s non-employee directors, the only participants in the Plan, to be paid through cash and through the issuance of shares of the Company’s common stock (“Common Stock”).

 

Directors who are not employees of the Company or of a Company subsidiary are paid an annual retainer (“Board Retainer”), an additional annual Board Committee retainer, including additional amounts paid for service as Chairman of a Board committee (“Committee Retainer”) and an attendance fee for each Board or Committee meeting attended (“Meeting Fees”), in cash in amounts established, from time to time, by the Board of Directors.  The amounts established by the Board of Directors for the retainers and fees shall be set forth on the attached Schedule 1.  Directors who are not employees of the Company or of a Company subsidiary also receive a restricted stock grant at a stock grant value (the “Stock Grant Value”) as determined below.  The Board Retainer, Committee Retainer, Meeting Fees and Stock Grant Value in effect as of the date of this Plan are set forth on Schedule 1.

 

1.	PAYMENT OF COMPENSATION TO NON-EMPLOYEE DIRECTORS.

 

a.           Retainers and Meeting Fees in Cash.  The Board Retainer and Committee Retainer (if applicable) shall be paid by the Company in cash, quarterly in arrears, as soon as practicable following the end of each calendar quarter.  The Meeting Fees accrued during each calendar quarter, if any, shall be paid by the Company at the end of such quarter in cash, together with the applicable quarterly retainers.  The amount of the Board Retainer and Committee Retainer may be changed by the Board of Directors from time to time without shareholder approval.

 

b.           Restricted Stock Grant.  On or about June 1 of each year during which a non-employee director is a member of the Company’s Board of Directors, such non-employee director shall receive a restricted stock grant payable in shares of Common Stock.  The number of shares of Common Stock to be issued to each non-employee director pursuant to this Section shall be determined by dividing the Stock Grant Value by the per share Fair Market Value of the Common Stock (as defined in Section 2 below) for the trading day immediately preceding June 1 of the applicable year; the resulting number shall then be rounded up to the nearest share.  The Board of Directors may change the Stock Grant Value to be granted to non-employee directors pursuant to this Section from time to time, or may determine that a fixed number of shares be granted in lieu of using the “Stock Grant Value” method described above, in each case without shareholder approval.

 

 

The “Fair Market Value” of a share of Common Stock shall be the average of the high and low sales prices of the shares on the New York Stock Exchange (“NYSE”) Composite Tape (the “NYSE Tape”) (or the principal market in which the Common Stock is traded, if the shares are not listed on that NYSE on such date (the “Principal Market”)).

 

3.	RESTRICTIONS.

 

a.           Restrictive Legend and Holding Period.  In order to address certain provisions of the Federal securities laws, including Section 16(b) of the Securities Exchange Act of 1934, all certificates representing shares of Common Stock issued pursuant to the Plan shall bear the following restrictive legend which will prevent the recipient from disposing of such shares for six months from the date of issuance:

 

 

When the legend requirement imposed by this Section shall terminate, the Company (at its expense) shall issue a replacement certificate representing such shares without the legend.

 

b.           Stock Ownership Guidelines.  It shall be the objective of each non-employee director to beneficially own, not later than three years after receiving his or her first annual restricted stock award contemplated by Section 1(b) of this Plan (the “Share Ownership Target Date”), a minimum number of shares of Common Stock, the market value of which shall be equal to six times the then-current annual Board Retainer (the “Share Ownership Target”).  After a non-employee director’s Share Ownership Target Date, such non-employee director shall thereafter endeavor to meet or exceed the Share Ownership Target.  The market value for purposes of this Section for any date shall be the highest sales price of the shares during the last twenty-four months, as reported on the NYSE Tape or the Principal Market, as the case may be.

 

c.           Additional Transfer Restrictions.  No non-employee director may dispose of any shares received as an annual restricted stock award contemplated by Section 1(b) of this Plan until such time as all shares of Common Stock beneficially owned by such non-employee director reaches the Share Ownership Target.  Thereafter, no non-employee director shall dispose of any shares received as an annual restricted stock award contemplated by Section 1(b) of this Plan such that such non-employee director’s direct or indirect ownership of shares of Common Stock would be less that the Share Ownership Target.

 

 

4.	NO RIGHT TO CONTINUANCE AS A DIRECTOR

 

Neither the action of the Company in establishing the Plan nor the issuance of Common Stock under this Plan shall be deemed to create any obligation on the part of the Board of Directors to nominate any non-employee director for reelection by the Company’s shareholders or to be evidence of any agreement or understanding, express or implied, that the non-employee director has a right to continue as a director for any period of time or at any particular rate of compensation.

 

5.	SHARES SUBJECT TO THE PLAN.

 

Three Hundred Twenty Five Thousand (325,000) shares of Common Stock are authorized for issuance under the Plan in accordance with the provisions hereof.  The Company shall at all times during the term of the Plan retain as authorized and unissued Common Stock at least the number of shares from time to time required under the provisions of the Plan, or otherwise assure itself of its ability to perform its obligations under this Plan.  In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, rights offering, or any other change in the corporate structure, capitalization or Common Stock of the Company, the Board of Directors shall make such adjustments as are appropriate to the maximum number and kind of shares of Common Stock that may be issued under the Plan.

 

6.	EFFECTIVE DATE AND EXPIRATION OF PLAN.

 

Pursuant to New York Stock Exchange Rule 303A.08, the Plan is subject to approval by a majority of the votes cast at the next annual meeting of shareholders of the Company by the holders of shares of Common Stock entitled to vote thereon, and, if so approved, shall be effective beginning on the first day of the calendar quarter immediately following such vote (the “Effective Date”).  Unless earlier terminated by the Board of Directors pursuant to Section 8, the Plan shall terminate on the tenth anniversary of the Effective Date.  No shares of Common Stock shall be issued pursuant to the Plan after its termination date.

 

7.	PAYMENT IN EVENT OF DEATH.

 

If a non-employee director dies, any portion of his or her compensation pursuant to the Plan then unpaid shall be paid to the beneficiaries of the director named in the most recent beneficiary designation filed with the Secretary of the Company.  In the absence of such a designation, such compensation shall be paid to, or as directed by, the director’s personal representative, in one or more installments as the non-employee director may have elected in writing.

 

8.	AMENDMENT, SUSPENSION AND TERMINATION OF PLAN.

 

The Board of Directors may suspend or terminate the Plan or any portion of it at any time, and may amend it from time to time in such respects as the Board may deem advisable in order that any awards hereunder shall conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no such amendment shall, without the further approval with the affirmative vote of shareholders entitled to cast at least a majority of the total number of votes represented at a meeting of shareholders of the Company, increase the number of shares of Common Stock which may be issued under the Plan, materially modify the requirements as to eligibility for participating in the Plan, or extend the termination date of the Plan.

 

 

 

 

 

Annual Board Retainer	$40,000
Annual Compensation and Corporate Governance Committee Retainer for non-Chair Member1	$6,000
Annual Audit Committee Retainer for non-Chair Member1	$12,000
Annual Audit Committee Chair Retainer1	$30,000
Annual Retainer for Chair of Committees (including Special Committee) other than Audit Committee1	$12,000
Attendance Fee per Board Meeting	$1,750
Attendance Fee per Committee (including Special Committee) Meeting2	$1,250
Stock Grant Value	$100,000

 

 

 

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