[AMERICAN BANK INCORPORATED LOGO]
April 26, 2002
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
American Bank Incorporated (the "Company"). The Annual Meeting will be held at
The Holiday Inn West, Route 100 and Interstate 78, Fogelsville, Pennsylvania, at
9:00 a.m. (local time) on May 21, 2002.
The business to be conducted at the Annual Meeting includes the election of two
directors and the ratification of the appointment of auditors for the year
ending December 31, 2002.
The Board of Directors has determined that the matters to be considered at the
Annual Meeting are in the best interest of the Company and its stockholders. The
Board of Directors unanimously recommends a vote "FOR" each matter to be
considered.
I urge you to sign, date and return the enclosed proxy card as soon as possible
even if you plan to attend the Annual Meeting. This will not prevent you from
voting in person, but will assure that your vote is counted if you are unable to
attend the Annual Meeting.
Sincerely,
/s/ Mark W. Jaindl
Mark W. Jaindl
President and Chief Executive Officer
American Bank Incorporated
4029 West Tilghman Street
Allentown, Pennsylvania 18104
(610) 366-1800
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 21, 2002
Notice is hereby given that the Annual Meeting of American Bank
Incorporated (the "Company") will be held at The Holiday Inn West, Route 100 and
Interstate 78, Fogelsville, Pennsylvania, on May 21, 2002 at 9:00 a.m., local
time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of two Directors to the Board of Directors; and
2. The ratification of the appointment of Beard Miller Company
LLP as auditors for the year ending December 31, 2002; and
such other matters as may properly come before the Annual Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Annual Meeting.
Any action may be taken on the foregoing proposals at the Annual Meeting
on the date specified above, or on any date or dates to which the Annual Meeting
may be adjourned. Stockholders of record at the close of business on April 15,
2002 are the stockholders entitled to vote at the Annual Meeting, and any
adjournments thereof.
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE ANNUAL MEETING,
IS REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE. A PROXY GIVEN BY A STOCKHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING
WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY
BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE ANNUAL MEETING MAY REVOKE
HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE ANNUAL
MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN
YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN
ORDER TO VOTE PERSONALLY AT THE ANNUAL MEETING.
By Order of the Board of Directors
/s/ Sandra A. Berg
Sandra A. Berg, Corporate Secretary
Allentown, Pennsylvania
April 26, 2002
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
PROXY STATEMENT
American Bank Incorporated
4029 West Tilghman Street
Allentown, Pennsylvania 18104
(610) 366-1800
ANNUAL MEETING OF STOCKHOLDERS
May 21, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of American Bank Incorporated (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Annual Meeting"), which will be held at The Holiday Inn West, Route 100 and
Interstate 78, Fogelsville, Pennsylvania, on May 21, 2002, at 9:00 a.m., local
time, and all adjournments of the Annual Meeting. The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are first being mailed
to stockholders on or about April 29, 2002.
REVOCATION OF PROXIES
Stockholders who execute proxies in the form solicited hereby retain the
right to revoke them in the manner described below. Unless so revoked, the
shares represented by proxies will be voted at the Annual Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors will
be voted in accordance with the directions given thereon. Where no directions
are indicated, validly executed proxies that are returned to the Company will be
voted "FOR" the proposals set forth in this Proxy Statement for consideration at
the Annual Meeting.
Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company, Sandra A. Berg, at the address shown above, or by
delivering a duly executed proxy bearing a later date. The presence at the
Annual Meeting of any stockholder who has returned a proxy shall not revoke such
proxy unless the stockholder delivers his or her ballot in person at the Annual
Meeting or delivers a written revocation to the Secretary of the Company prior
to the voting of such proxy.
VOTING SECURITIES AND METHOD OF COUNTING VOTES
Holders of record of the Company's common stock, par value $0.10 per
share, as of the close of business on April 15, 2002 (the "Record Date") are
entitled to one vote for each share then held. As of the Record Date, the
Company had 6,012,770 shares of common stock issued and outstanding. The
presence in person or by proxy of stockholders entitled to vote a majority of
the outstanding shares of common stock is necessary to constitute a quorum at
the Annual Meeting. Abstentions will be counted as shares represented in person
or by proxy for purposes of determining that a quorum is present. Directors are
elected by a plurality of votes cast, without regard to either broker non-votes,
or proxies as to which the authority to vote for the nominees being proposed is
withheld. The affirmative vote of holders of a majority of the total votes cast
at the Annual Meeting is required for the ratification of Beard Miller Company
LLP as the Company's auditors, without regard to either broker non-votes, or
proxies as to which the authority to vote is withheld.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups who beneficially own in excess of 5% of the Company's
common stock are required to file certain reports with the Securities and
Exchange Commission (the "SEC") regarding such ownership. The following table
sets forth, as of the Record Date, the shares of common stock beneficially owned
by executive officers and Directors as a group and by each person who was the
beneficial owner of more than 5% of the Company's outstanding shares of common
stock.
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owners Ownership (1) Outstanding
Frederick J. Jaindl(2) 3,252,468 53.5%
3150 Coffeetown Road
Orefield, PA 18069
Mark W. Jaindl(2) 700,499 11.4%
1964 Diehl Court
Allentown, PA 18104
David M. Jaindl(2) 617,661 9.9%
3150 Coffeetown Road
Orefield, PA 18069
Martin F. Spiro 332,106 5.5%
1224 Main Street
Allentown, PA 18104
All directors and executive officers 5,318,907 83.0%
as a group (10 persons)
(1) Shares "beneficially owned" include shares owned by or for, among others,
the wife and/or minor children of the individual and any other relative who
has the same home as such individual, as well as other shares as to which
the individual has or shares voting or investment power, and shares that the
individual may purchase under stock option(s) exercisable within 60 days.
(2) Frederick J. Jaindl is the father of Mark W. Jaindl and David M. Jaindl.
PROPOSAL I - ELECTION OF DIRECTORS
The Board of Directors consists of seven members. The Company's bylaws
provide that approximately one-third of the directors are elected annually.
Directors of the Company are generally elected to serve for a three-year period
and until their respective successors are elected. Two directors will be elected
at the Annual Meeting to serve for a three-year period and until their
respective successors are elected. The Board of Directors has nominated Mark W.
Jaindl and Elizabeth B. Gaul to serve as directors for a three-year term. Each
individual is currently a member of the Board of Directors.
2
The table below sets forth certain information, as of April 15, 2002,
regarding members of the Company's Board of Directors. It is intended that the
proxies solicited on behalf of the Board of Directors (other than proxies in
which the vote is withheld as to the nominee) will be voted at the Annual
Meeting for the election of the nominees identified below. If a nominee is
unable to serve, the shares represented by proxies will be voted for the
election of such substitute as the Board of Directors may recommend. At this
time, the Board of Directors knows of no reason why the nominee might be unable
to serve, if elected. Except as indicated herein, there are no arrangements or
understandings between the nominee and any other person pursuant to which such
nominee was selected.
Shares
Position(s) Held With Director Current Beneficially Percent of
Name the Company or the Bank Age Since(1) Term Expires Owned(2) Class
NOMINEES
Mark W. Jaindl(3) Vice Chairman, 42 1996 2002 700,499(4) 11.4%
President and CEO
Elizabeth B. Gaul Director 57 1996 2002 171,477(5)(6) 2.8%
OTHER BOARD MEMBERS
Frederick J. Jaindl(3) Chairman 74 1996 2003 3,252,468(5)(7) 53.5%
David M. Jaindl(3) Director 45 1996 2003 617,661(5)(8) 9.9%
Arthur A. Haberberger Director 64 1996 2003
156,687(5)(9) 2.6%
Phillip S. Schwartz Director 55 1996 2004 228,852(5)(10) 3.8%
Martin F. Spiro Director 68 1996 2004 332,106(5)(6) 5.5%
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Sandra A. Berg Senior Vice President, 45 n/a n/a 11,175(11) *
Senior Operations Officer
and Secretary
Chris J. Persichetti Senior Vice President, 38 n/a n/a 11,385(12) *
Senior Loan Officer
Harry C. Birkhimer Treasurer, Vice 52 n/a n/a 12,750(13) *
President and
Chief Financial Officer
All directors and executive 5,318,907 83.0%
officers as a group (10 persons)
<FN>
* Less than 1%.
(1) Reflects initial appointment to the Board of Directors of American Bank.
(2) The shares "beneficially owned" by an individual include shares owned by or
for, among others, the wife and/or minor children of the individual and any
other relative who has the same home as such individual, as well as other
shares as to which the individual has or shares voting or investment power,
and shares that an individual may purchase under stock option(s) exercisable
within 60 days.
(3) Frederick J. Jaindl is the father of Mark W. Jaindl and David M. Jaindl.
(4) Includes 93,750 shares that can be acquired pursuant to the exercise of
options and 46,500 shares that can be acquired pursuant to warrants. Also
includes 117,434 shares and 58,719 shares that can be acquired pursuant to
warrants, as to which Mark W. Jaindl is a co-trustee.
(5) Includes 9,000 shares that can be acquired pursuant to the exercise of
options.
(6) Includes 750 shares that can be acquired pursuant to warrants.
(7) Includes 75,000 shares that can be acquired pursuant to warrants and
2,415,780 shares held by Jaindl Associates, LP, as to which Frederick J.
Jaindl is a general partner.
(8) Includes 37,500 shares that can be acquired pursuant to warrants. Also
includes 117,434 shares, and 58,719 shares that can be acquired pursuant to
warrants, as to which David Jaindl is a co-trustee.
(9) Includes 11,250 shares that can be acquired pursuant to warrants.
(10)Includes 19,875 shares that can be acquired pursuant to warrants.
(11)Includes 10,500 shares that can be acquired pursuant to the exercise of
options and 225 shares that can be acquired pursuant to warrants.
(12)Includes 9,000 shares that can be acquired pursuant to the exercise of
options and 795 shares that can be acquired pursuant to warrants.
(13)Includes 6,000 shares that can be acquired pursuant to the exercise of
options and 2,250 shares that can be acquired pursuant to warrants.
</FN>
The business experience for the past five years for each of the
Company's directors and executive officers is as follows:
Frederick J. Jaindl. Mr. Jaindl has served as Chairman of the Board
of Directors and as a director of American Bank since 1996. Mr. Jaindl is the
sole proprietor of Jaindl Turkey Farms, an agribusiness engaged in farming
3
and raising turkeys. He has been engaged in this business since 1947. He is
also President of Jaindl's, Inc., an agribusiness engaged in the processing
and selling of turkeys. Mr. Jaindl has served on the Board of Directors of
Kutztown Bank, First National Bank of Allentown and, most recently Sovereign
Bancorp, Inc. In January 1988, Mr. Jaindl joined the Sovereign Board and on
March 21, 1989, he became Chairman and served as Chairman until 1995. Mr.
Jaindl is Chairman of Jaindl Land Company, a developer of prime residential,
commercial and industrial land in eastern Pennsylvania. His other business
interests include Lehigh Ag Equipment, Inc., a John Deere sales and service
center; Schantz Orchards, a grower and seller of fruit; and Lehigh Grains, Inc.,
a grain operation.
Mark W. Jaindl. Mr. Jaindl has been the Vice Chairman, President and Chief
Executive Officer of American Bank since 1996. He has also been a director of
Massachusetts Fincorp, Inc., and its wholly owned subsidiary, Massachusetts
Co-operative Bank since May 2000 and August 2000, respectively. He served as
Chief Financial Officer of Jaindl Turkey Farms and Jaindl Land Company from May
1982 to October 1991 and again from June 1995 to October 1997. He served as a
director of Pure World, Inc., the holding company for Pure World Botanicals,
from October 1994 until October 2001. Mr. Jaindl served as a director of
Continental Information Systems, Inc. from February 2000 to December 2001.
Continental Information Systems is engaged in the sale and leasing of used
commercial aircraft and aircraft engines and the development and
commercialization of an "electronic execution portal business" for institutional
securities traders.
David M. Jaindl. Mr. Jaindl has served as a director of American Bank since
1996. Mr. Jaindl has served since 1980 as the General Manager of Jaindl Turkey
Farms, an agribusiness that has as its principal activities farming and raising
turkeys. He is also Vice President of Jaindl's, Inc., an agribusiness engaged in
the processing and selling of turkeys. Mr. Jaindl is President of Jaindl Land
Company, a developer of prime residential, commercial and industrial land in
eastern Pennsylvania. He is a partner in Schantz Orchards, a grower and seller
of fruit, and serves as a Director of Lehigh Grains, Inc., a grain operation.
Elizabeth B. Gaul. Ms. Gaul has served as a director of American Bank since
1996. Since 1990, Ms. Gaul has been employed by Arbee Limited Partnership and
Manheim Investors, Wyomissing, Berks County, Pennsylvania, which specializes in
private investments, most recently as Managing Partner and principal. She is
also Manager and a principal of Arbee Delaware Business Trust, domiciled in
Wilmington, Delaware. Ms. Gaul was previously Vice President and Assistant
Secretary of American Security Bank, N.A., a former Washington, D.C. bank that
is now part of Bank of America, with which she was affiliated for over 25 years.
She currently serves as a director of Educators Mutual Insurance Life Insurance
Company, Lancaster, Pennsylvania. Ms. Gaul is also a Board member of The
Auxiliary of the Reading Hospital and Medical Center; Breast Cancer Support
Services of Berks County and a Trustee of Charles Evans Cemetery.
Arthur A. Haberberger. Mr. Haberberger has served as a director of American
Bank since 1996. He most recently served as founder, Chief Executive Officer and
director of American Equipment Leasing Company, Inc., Reading, Pennsylvania,
until his retirement in 1999. Mr. Haberberger began his career in financial
services with Horrigan American, Inc., Reading, and served as President, Chief
Executive Officer and director from 1983 through 1996. Mr. Haberberger served as
a director of Sovereign Bancorp, Inc., from 1989 to 1994. He also served as
Chairman of and investor in American Real Estate Investment and Development
Company, Chicago, Illinois, a real estate holding company, until 1999. Mr.
Haberberger currently serves as a director of Educators Mutual Insurance Life
Insurance Company, Lancaster, Pennsylvania. He serves as Chairman of B&G Glass
Services, Inc., Reading, Pennsylvania; Chairman of and an investor in The
Business Outlet, Inc., an office furniture and systems remanufacturer and seller
in West Reading, Pennsylvania; and Chairman of and an investor in UAI Group,
Inc., an engineering firm in Reading and Lancaster, Pennsylvania and Burlington,
Vermont. Mr. Haberberger provides consulting services to a wide range of
companies, and is a private investor in diverse enterprises.
Phillip S. Schwartz. Mr. Schwartz has served as a director of American Bank
since 1996. Mr. Schwartz has been the President of Schwartz Heating & Plumbing,
Inc., which specializes in plumbing installation for new construction, since
1980. He serves on the President's Council of DeSales University. Mr. Schwartz
has been President of P & M Schwartz Corporation, a land development corporation
located in Whitehall, Pennsylvania since 1993. He also served on the PNC Bank
Regional Board from 1993 until the fall of 1996.
4
Martin F. Spiro. Mr. Spiro has served as a director of American Bank since
1996. Mr. Spiro retired in 1987 from garment manufacturing and currently is an
investor in bank and thrift stocks. From 1990 until 1994, Mr. Spiro was a
director of VSB Bancorp, Inc. in Closter, New Jersey when it was acquired by UJB
Financial. From 1990 until 1992, Mr. Spiro was a director of Flagship Financial
Corp. in Jenkintown, Pennsylvania, when it was acquired by PNC Financial.
Harry C. Birkhimer. Mr. Birkhimer has been employed by American Bank as
Vice President and Chief Financial Officer since 1999. He is a Certified Public
Accountant. From 1991 to 1998 he was Chief Financial Officer of Indiana First
Savings Bank, Indiana, Pennsylvania.
Sandra A. Berg. Ms. Berg has been employed by American Bank since 1997 as
Senior Vice President, Senior Operations Officer and Secretary. She has over 25
years of retail banking and branch management experience. From 1990 to 1997, Ms.
Berg was employed by PNC Bank, most recently as an Assistant Vice President and
Branch Manager.
Chris J. Persichetti. Mr. Persichetti has been employed by American Bank
since 1999 as Senior Vice President and Senior Loan Officer. He has 15 years of
banking experience. From 1986 to 1999, Mr. Persichetti was employed by PNC Bank,
most recently as a Vice President in the Business Banking Division.
Meetings and Committees of the Board of Directors
The business of the Company is conducted at regular and special meetings
of the full Board and its standing committees. The standing committees are the
Executive Committee and the Audit Committee. The full Board of Directors acts as
Nominating Committee for the Company. During the year ended December 31, 2001,
the Board of Directors met at 12 regular meetings. No member of the Board or any
committee thereof attended less than 75% of said meetings.
The Executive Committee consists of Directors Frederick J. Jaindl
(Chairman), Arthur A. Haberberger and Phillip S. Schwartz. The Executive
Committee meets as necessary when the Board is not in session to exercise
general control and supervision in all matters pertaining to the interests of
the Company, subject at all times to the direction of the Board of Directors.
The Executive Committee did not meet during 2001.
The Audit Committee consists of Directors Martin F. Spiro (Chairman),
Elizabeth A. Gaul and Phillip S. Schwartz. The Audit Committee examines and
approves the audit report prepared by the independent auditors of the Company,
reviews and recommends the independent auditors to be engaged by the Company,
reviews the internal accounting controls of the Company and reviews and approves
audit policies. The Audit Committee met four times during 2001.
Audit Committee Report
The Audit Committee operates under a written charter adopted by the
Board of Directors, which is included as Appendix A to this proxy statement.
Each member of the Audit Committee satisfies the definition of independent
director as established by the National Association of Securities Dealers.
Management is responsible for the Company's internal controls and
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States and to issue a report thereon. The Audit Committee's
responsibility is to monitor and oversee these processes.
As part of its ongoing activities, the Audit Committee has:
o Reviewed and discussed with management, and the independent
auditors, the Company's audited consolidated financial statements
for the fiscal year ended December 31, 2001;
o Discussed with the independent auditors the matters required to
be discussed by Statement on Auditing Standards No. 61,
Communications with Audit Committees, as amended; and
5
o Received the written disclosures and the letter from the
independent auditors required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees,
and has discussed with the independent auditors their
independence from the Company.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2001 and be filed with the SEC. In
addition, the Audit Committee recommended that the Board of Directors appoint
Beard Miller Company LLP as the Company's independent auditors for the year
ending December 31, 2002, subject to the ratification of this appointment by the
stockholders.
This report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The Audit Committee
Martin F. Spiro, Chairman
Elizabeth A. Gaul
Philip S. Schwartz
Directors' Compensation
Directors who are not employees of American Bank began receiving fees
for their services in August of 2001. Each director receives $300 for attendance
at Board meetings and $100 for attendance at Committee meetings. For the year
ended December 31, 2001, directors as a group received $11,200 in fees for their
services. Prior to August of 2001, directors received no cash compensation for
their services. Under American Bank's Non-Qualified Stock Option Plan, and
beginning in 1999, each non-employee director receives an annual option grant of
2,000 shares of common stock. At December 31, 2001, options to purchase 54,000
shares of common stock had been granted to non-employee directors at an average
exercise price of $5.36 per share, adjusted for the three-for-two stock split
declared in January 2002.
Executive Compensation
Summary Compensation Table. The following table sets forth for the three
years ended December 31, 2001, certain information as to the total remuneration
paid by the Bank to the President and Chief Executive Officer and the Executive
Vice President, and Chief Operating Officer ("Named Executive Officers"), each
of whose salary and bonuses exceeded $100,000 in 2001.
Annual Compensation Long-Term Compensation
-------------------------------------- -----------------------------------------------
Restricted Securities
Name/principal Other Annual Stock underlying All Other
position Year Salary Bonus Compensation Awards options/SARs(#)(1) Payouts Compensation
- ------------------ ---- ------ ----- ------------ ---------- ------------------ ------- ------------
Mark W. Jaindl, 2001 $162,500 $24,874 -- -- -- -- --
President and 2000 148,077 13,134 -- -- 45,750 -- --
Chief Executive 1999 120,673 15,000 -- -- 39,000 -- --
Officer
2001 109,808 17,539 -- -- -- -- --
2000 102,308 15,279 -- -- 12,750 -- --
Eric W. Valaika, 1999 94,654 10,250 -- -- 10,500 -- --
(2) Executive
Vice President
and Chief
Operating Officer
<FN>
(1) Adjusted to reflect the three-for-two stock split declared in January 2002.
(2) Mr. Valaika discontinued his employment with American Bank and American Bank
Incorporated effective March 15, 2002.
</FN>
6
Employee Benefit Plans
Non-Qualified Stock Option Plan. American Bank adopted a Non-Qualified
Stock Option Plan, which was succeeded to by the Company. The Non-Qualified
Stock Option Plan covers 390,000 shares of common stock, of which 282,000 were
granted and outstanding at December 31, 2001. Options granted under this plan
will have an option price at least equal to the fair market value of the common
stock on the date of the grant. Options available for grant at December 31,
2001, were 108,000. The weighted-average remaining contractual life of the
outstanding options at December 31, 2001, is approximately 8.6 years.
Set forth below is certain information concerning options outstanding to
the Named Executive Officers at December 31, 2001. No options were exercised by
the Named Executive Officers during 2001 and no options were granted to the
Named Executive Officers during 2001.
========================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
========================================================================================================
- ----------------------- ------------- -------------- ------------------------- -------------------------
Number of Value of
Unexercised Unexercised
Options at In-The-Money
Year-End Options at Year-End
Shares ------------------------- -------------------------
Acquired Value Exercisable/Unexercisable Exercisable/Unexercisable
Name Upon Exercise Realized (#) ($)
- ----------------------- ------------- -------------- ------------------------- -------------------------
Mark W. Jaindl 0 $0 93,750/27,000 $292,250/$0
Eric W. Valaika 0 $0 58,500/12,750 $241,805/$0
======================= ============= ============== ======================== =========================
Employee Stock Ownership Plan and Trust. American Bank has established
an employee stock ownership plan. Employees with at least one year of employment
with American Bank and who have attained age 21 are eligible to participate.
Participants in the employee stock ownership plan receive credit for vesting
purposes for each calendar year of continuous employment with American Bank in
which the employee completed 1,000 hours of service prior to the effective date
of the employee stock ownership plan. A participant is 20% vested in his/her
benefits after three years of service and in an additional 20% for each
subsequent year until a participant is 100% vested after seven years. A
participant is also 100% vested in his benefits upon normal retirement (as
defined in the employee stock ownership plan), early retirement, disability or
death. A participant who terminates employment before becoming fully vested will
forfeit his or her non-vested benefits under the employee stock ownership plan.
Benefits are payable in the form of common stock and cash or, at the election of
the participant, in common stock only or cash only, upon separation from
service. American Bank's contributions to the employee stock ownership plan are
discretionary, subject to the loan terms and tax law limits, and, therefore,
benefits payable under the employee stock ownership plan cannot be estimated.
In connection with the establishment of the employee stock ownership
plan, American Bank appointed a committee of non-employee directors to
administer the employee stock ownership plan, and to appoint a trustee. The
employee stock ownership plan trustee, subject to its fiduciary duty, must vote
all allocated shares held in the employee stock ownership plan in accordance
with the instructions of participating employees. Under the employee stock
ownership plan, nondirected shares, and shares held in the suspense account,
will be voted in a manner calculated to most accurately reflect the instructions
it has received from participants regarding the allocated stock so long as such
vote is in accordance with the provisions of ERISA.
Employment Agreements. American Bank has entered into an employment
agreement, which the Company has succeeded to, with its President and Chief
Executive Officer for a three-year term, which automatically extends by one day
for each day of the contract term. American Bank can terminate the executive's
employment for cause at any time without obligation under the agreement. If
employment is terminated without cause or following a change in control,
American Bank shall pay the executive's salary for the remaining term of the
agreement. The agreement includes restrictions on competition and
confidentiality following termination of employment.
7
Incentive Compensation
Incentive compensation bonuses paid to executive officers, other
officers, and staff are determined and paid at the sole discretion of the Board
of Directors, typically on an annual basis. Total incentive compensation bonuses
paid to all employees was $109,100, $65,000, and $51,300 for the years ended
December 31, 2001, 2000, and 1999, respectively.
Ownership Reports by Officers and Directors
The common stock of the Company is registered with the SEC pursuant to
Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act"). The
officers and directors of the Company and beneficial owners of greater than 10%
of the Company's Common Stock ("10% beneficial owners") are required to file
reports on Forms 3, 4 and 5 with the SEC disclosing beneficial ownership and
changes in beneficial ownership of the Common Stock. SEC rules require
disclosure in the Company's Proxy Statement of the failure of an officer,
director or 10% beneficial owner of the Company's common stock to file a Form 3,
4, or 5 on a timely basis. Based on the Company's review of ownership reports,
no officer, director or 10% beneficial owner of the Company failed to file
ownership reports as required for the year ended December 31, 2001
Transactions With Certain Related Persons
American Bank leases the premises for its principal office under a
five-year operating lease agreement expiring November 2002. American Bank has
the option to extend the lease agreement for five additional five-year lease
terms. American Bank is responsible for its direct or proportionate share of
real estate taxes, insurance, utilities and maintenance and repairs on the
building. The lessor is Frederick J. Jaindl, Chairman of the Board and a
principal shareholder of American Bank. The minimum lease payments due in 2002
under the original terms of the lease are $268,000.
American Bank has had, and may be expected to have in the future,
banking transactions in the ordinary course of business with its executive
officers, directors, principal stockholders, their immediate families and
affiliated companies (commonly referred to as related parties), on the same
terms, including interest rates, as those prevailing at the time for comparable
transactions with others.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has approved the engagement of
Beard Miller Company LLP as the Company's auditors for the year ending December
31, 2002, subject to the ratification of the engagement by stockholders. A
representative of Beard Miller Company LLP is expected to attend the Annual
Meeting to respond to appropriate questions and to make a statement if he so
desires.
Set forth below is certain information concerning aggregate fees billed
for professional services rendered by Beard Miller Company LLP during 2001:
Audit Fees $ 41,574
Financial Information Systems
Design and Implementation Fees $ --
All Other Fees $ 24,810
The Audit Committee has considered whether the provision of non-audit
services, which relate primarily to tax services rendered, is compatible with
maintaining Beard Miller Company LLP's independence. The Audit Committee
concluded that performing such services does not affect Beard Miller Company
LLP's independence in performing its function as auditor of the Company.
In order to ratify the selection of Beard Miller Company LLP as the
auditors for the year ending December 31, 2002 the proposal must receive at
least a majority of the votes cast, either in person or by proxy, in favor of
such
8
ratification. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF BEARD MILLER COMPANY LLP AS AUDITORS FOR THE YEAR ENDING
DECEMBER 31, 2002.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the proxy materials for next
year's Annual Meeting of Stockholders, any stockholder proposal to take action
at such meeting must be received at the Company's executive office, 4029 West
Tilghman Street, Allentown, Pennsylvania 18104, no later than December 27, 2002.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
Under the Company's Bylaws, certain procedures are provided which a
stockholder must follow to introduce an item of business at an annual meeting of
stockholders. These procedures provide, generally, that stockholders desiring to
bring a proper subject of business before the meeting, must have given timely
notice thereof in writing to the Secretary of the Corporation. To be timely a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not later than ninety (90) days prior
to the anniversary date of the mailing of proxy materials by the Company in
connection with the immediately preceding annual meeting of stockholders of the
Company. A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting, (b)
the name and address, as they appear on the Company's books, of the stockholder
proposing such business, (c) the class and number of shares of the Company which
are beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business. The chairman of an annual meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of the
Company's Bylaws, and if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Annual Meeting other than the matters described above in the Proxy Statement.
However, if any matters should properly come before the Annual Meeting, it is
intended that holders of the proxies will act as directed by a majority of the
Board of Directors, except for matters related to the conduct of the Annual
Meeting, as to which they shall act in accordance with their best judgment.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telephone without additional compensation.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 2001, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS UPON WRITTEN
OR TELEPHONIC REQUEST TO SANDRA A. BERG, CORPORATE SECRETARY, 4029 WEST TILGHMAN
STREET, ALLENTOWN, PENNSYLVANIA 18104, (610) 366-1800.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Sandra A. Berg
Sandra A. Berg
Corporate Secretary
Allentown, Pennsylvania
April 26, 2002
9
APPENDIX A
AMERICAN BANK INCORPORATED
AUDIT COMMITTEE CHARTER
Organization and Membership
There shall be a committee of the board of directors of American Bank
Incorporated known as the Audit Committee. The Audit Committee shall be composed
of directors who are independent of the management of the corporation and are
free of any relationship that, in the opinion of the board of directors, would
interfere with their exercise of independent judgment as a committee member. The
members of the committee should exhibit basic financial literacy, or should gain
such literacy within a reasonable time after appointment, to allow the members
to discharge their responsibilities hereunder. Financial literacy is signified
by the ability to read and understand fundamental financial statements.
Furthermore, at least one member of the committee should have financial
expertise, signified by past experience in finance or accounting, requisite
professional certification in accounting, or any other comparable experience or
background which results in the individual's financial sophistication, including
being or having been a CEO or other senior officer with financial oversight
responsibilities.
Statement of Policy
The Audit Committee shall provide assistance to corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the corporation, and the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the Audit Committee to
maintain free and open means of communication between and among the directors,
management, the independent auditors and the internal auditors. The audit
committee shall meet four times per year, or more frequently as circumstances
warrant.
Duties of the Audit Committee
The duties of the Audit Committee consist of the following:
a. Overseeing the internal audit function, including but not limited to:
1. reviewing and approving the audit plan, which shall include all
appropriate control and compliance matters;
2. reviewing reports of internal auditors as well as management's
response;
3. monitoring adherence to the audit plan;
4. monitoring corrective action taken by management;
5. reviewing reports issued pursuant to the Bank's Internal Loan
Review policies and monitoring corrective action; and
6. monitoring corrective actions resulting from examination reports
or external audit reports; and
7. reviewing the policies adopted by the Board of Directors
governing the Internal Audit Department and recommending
modifications thereof if indicated.
b. Recommending to the board the engagement of the independent auditor after
consideration of: the nature and quality of audit services rendered or to be
rendered; the nature of and compensation for nonaudit services rendered or
contracted for; the effect, if any, of any non-audit activities or relationships
that may bear on the objectivity or independence of the independent auditor,
and; any other relevant factors;
A-1
c. Reviewing with management and its independent auditor the scope of
services required by the audit, significant accounting policies, and audit
conclusions regarding significant accounting estimates;
d. Reviewing with management and its independent auditor their assessments
of the adequacy of internal controls and the resolution of identified material
weaknesses and reportable conditions in internal controls, including the
prevention or detection of management override or compromise of the internal
control structure;
e. Reviewing with management the institution's compliance with laws and
regulations;
f. Discussing with management both the selection and termination of the
independent auditor and any significant disagreements between the independent
auditor and management;
g. Taking other action, independent of management, whenever appropriate.
h. Through its chairman, or in the absence of the chairman another designated
member, review interim financial data and discuss with the Chief Financial
Officer (or other appropriate officer in the absence of the Chief Financial
Officer) and independent auditor, in person or by telephone conference, the
results of the auditor's review of the data prior to the filing of Form 10-Q,
and preferably prior to the public announcement of financial results.
i. Perform such other duties as assigned by law, the company's charter and
bylaws, or the board of directors.
Relationship to Internal Audit Department
The functions of the internal auditing firm is under the direction of the Audit
Committee. The internal auditing firm is hired by and reports directly to the
Audit Committee.
A-2
PROXY
AMERICAN BANK INCORPORATED
ANNUAL MEETING OF STOCKHOLDERS
May 21, 2002
The undersigned hereby appoints the official proxy committee of the
Board of Directors, with full powers of substitution, to act as attorneys and
proxies for the undersigned to vote all shares of Common Stock of the Company
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
("Annual Meeting") to be held at The Holiday Inn West, Route 100 and Interstate
78, Fogelsville, Pennsylvania on May 21, 2002, at 9:00 a.m. local time. The
official proxy committee is authorized to cast all votes to which the
undersigned is entitled as follows:
VOTE
FOR WITHHELD
(except
as marked
to the
contrary
below)
1. The election as Directors of Mark W. Jaindl
and Elizabeth B. Gaul, each to serve for a |_| |_|
three-year term.
INSTRUCTION: To withhold your vote for one or more
nominees, write the name of the nominee(s) on the
line(s) below.
______________________________
______________________________
FOR AGAINST ABSTAIN
2. The ratification of Beard Miller
Company LLP as auditors for the year |_| |_| |_|
ending December 31, 2002.
The Board of Directors recommends a vote "FOR" each of the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY, IF SIGNED AND RETURNED, WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED
ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH ANNUAL MEETING, THIS PROXY
WILL BE VOTED AS DIRECTED BY A MAJORITY OF THE BOARD OF DIRECTORS. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED
AT THE ANNUAL MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Annual Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. This proxy may also be revoked by sending written
notice to the Secretary of the Company at the address set forth on the Notice of
Annual Meeting of Stockholders, or by the filing of a later proxy prior to a
vote being taken on a particular proposal at the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to the execution of
this proxy of notice of the Annual Meeting, a proxy statement dated April 26,
2002, and audited financial statements.
Dated: _________________________ +-+ Check Box if You Plan
+-+ to Attend Annual Meeting
_______________________________ ____________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_______________________________ ____________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title.
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Please complete and date this proxy and return it promptly in
the enclosed postage-prepaid envelope.
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