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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 19, 2001
AMERICAN FINANCIAL HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-27399 06-1555700
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(State or other Jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
102 West Main Street, New Britain, Connecticut 06051
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(Address of principal executive offices)
(860) 832-4000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
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Mr. William E. Solberg, currently President and Chief Executive Officer of
American Bank of Connecticut ("American Bank"), and American Savings Bank
("American Savings"), a Connecticut-chartered savings bank, and subsidiary of
American Financial Holdings, Inc. ("American Financial"), have agreed on the
proposed terms of Mr. Solberg's employment with American Financial and American
Savings following the completion of the proposed merger of American Savings and
American Bank. The proposed employment terms, which were set forth in a November
16, 2001 letter from American Savings Chief Executive Officer Robert T. Kenney
to Mr. Solberg, were acknowledged by Mr. Solberg and will be reflected in a
three-year employment agreement that the parties anticipate will be executed
prior to the closing of the merger, which, subject to American Bank's
stockholder approval and other customary conditions, is currently expected to
occur in mid-January 2002.
Under the proposal, Mr. Solberg would serve as a senior executive officer
of American Financial and American Savings with an initial base salary of
$250,000. He will also participate in American Savings' incentive compensation
and other executive compensation programs. In consideration of his continuing
employment after the merger closes, Mr. Solberg would receive a retention bonus
of $1.0 million. In addition, Mr. Solberg would be awarded stock options
covering 100,000 shares of American Financial common stock and 50,000 shares of
restricted American Financial common stock, all on terms consistent with awards
previously made to other senior American Financial officers.
Under the proposal, Mr. Solberg would receive compensation of $2.0 million
if his employment is terminated, other than for cause, prior to January 31,
2003. Such compensation will be in consideration of Mr. Solberg's acceptance of
certain noncompetition restrictions. The proposal also includes specific terms
relating to Mr. Solberg's ongoing role with American Financial and American
Savings. If Mr. Solberg is appointed President and Chief Operating Officer prior
to January 31, 2003, he would receive an additional incentive bonus of $500,000
and his base salary will be increased to $300,000. If Mr. Solberg is not
appointed as President and Chief Operating Officer by January 31, 2003, he will
be entitled to terminate his employment and receive a $2.5 million severance
payment, reduced by the then value of any vested stock options or vested shares
of restricted stock. Additionally, if under the proposed terms Mr. Solberg is
not appointed as Chief Executive Officer by January 31, 2005, he may terminate
his employment and receive the payments due over the remaining term of his
contract and have all of his remaining stock options and shares of restricted
stock accelerate.
As noted above, the final terms of the agreement between the two parties
will be reflected in an employment agreement, subject to the completion of the
merger, and which will be subsequently filed with the Securities and Exchange
Commission by American Financial.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 6, 2001 By: /s/ Robert T. Kenney
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Robert T. Kenney
Chairman, President and Chief Executive
Officer