[AMERICAN BANK INCORPORATED LOGO]
March 31, 2003
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
American Bank Incorporated (the "Company"), which will be held at The Holiday
Inn West, Route 100 and Interstate 78, Fogelsville, Pennsylvania, at 9:00 a.m.
(local time) on April 29, 2003.
The business to be conducted at the Annual Meeting includes the election of
three directors and the ratification of the appointment of auditors for the year
ending December 31, 2003.
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 April 29, 2003
Notice is hereby given that the Annual Meeting of Stockholders of
American Bank Incorporated (the "Company") will be held at The Holiday Inn West,
Route 100 and Interstate 78, Fogelsville, Pennsylvania, on April 29, 2003 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 three Directors to the Board of Directors;
2. The ratification of the appointment of Beard Miller Company
LLP as auditors for the year ending December 31, 2003; 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
March 17, 2003 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
March 31, 2003
- --------------------------------------------------------------------------------
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
April 29, 2003
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 April 29, 2003, 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 March 31, 2003.
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 March 17, 2003 (the "Record Date") are
entitled to one vote for each share then held. As of the Record Date, the
Company had 6,100,109 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) 3,678,921 55.7%
3150 Coffeetown Road
Orefield, PA 18069
Mark W. Jaindl(2) 991,497 15.1%
1964 Diehl Court
Allentown, PA 18104
David M. Jaindl(2) 826,570 12.9%
3150 Coffeetown Road
Orefield, PA 18069
Martin F. Spiro 399,151 6.5%
1224 Main Street
Allentown, PA 18104
(1) Shares "beneficially owned" include shares owned by or for, among others,
the spouse 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 continuing 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. Three
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 Frederick J. Jaindl, David M. Jaindl and John C. Long to serve as
directors for a three-year term. Each individual is currently a member of the
Board of Directors.
The table below sets forth certain information, as of March 17, 2003,
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.
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POSITION(S) SHARES
HELD WITH THE COMPANY DIRECTOR CURRENT BENEFICIALLY PERCENT OF
NAME OR AMERICAN BANK AGE SINCE(1) TERM EXPIRES OWNED(2) CLASS
- -----------------------------------------------------------------------------------------------------------------------
NOMINEES
Frederick J. Jaindl(3) Chairman 75 1996 2003 3,678,921(4)(5) 55.7%
David M. Jaindl(3) Director 46 1996 2003 826,570(4)(6) 12.9%
John C. Long Director 38 2003 2003 2,000 *
OTHER BOARD MEMBERS
Phillip S. Schwartz Director 57 1996 2004 250,852(4)(7) 4.1%
Martin F. Spiro Director 69 1996 2004 399,151(4)(8) 6.5%
Mark W. Jaindl(3) Vice Chairman, 43 1996 2005 991,497(9) 15.1%
President and CEO
Elizabeth B. Gaul Director 59 1996 2005 217,332(4)(10) 4.1%
Arthur A. Haberberger(11) Director 65 1996 2003 147,687(12) 2.4%
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Sandra A. Berg Senior Vice President, 46 n/a n/a 11,175(13) *
Senior Operations Officer
and Secretary
Chris J. Persichetti Senior Vice President, 40 n/a n/a 11,385(14) *
Senior Loan Officer
Harry C. Birkhimer Treasurer, Vice 54 n/a n/a 12,750(15) *
President and
Chief Financial Officer
Robert W. Turner Vice President,
Director of Technology 41 n/a n/a -0- *
All directors and executive 6,248,464 84.2%
officers as a group (12 persons)
- -------------------------
* Less than 1%.
(1) Reflects initial appointment to the Board of Directors of the Company or
American Bank.
(2) Includes shares owned by or for, among others, the spouse 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 12,000 shares that can be acquired pursuant to the exercise of
options.
(5) Includes 75,000 shares that can be acquired pursuant to the exercise of
warrants, 2,415,780 shares held by Jaindl Associates, LP, as to which
Frederick J. Jaindl is a general partner and 423,453 shares that can be
acquired pursuant to the conversion of trust preferred securities.
(6) Includes 37,500 shares that can be acquired pursuant to the exercise of
warrants and 78,707 shares that can be acquired pursuant to conversion of
trust preferred securities. Also includes 117,434 shares, and 58,719 shares
that can be acquired pursuant to the exercise of warrants, as to which
David M. Jaindl is a co-trustee. Also includes 127,208 shares that can be
acquired pursuant to the conversion of trust preferred securities as to
which David M. Jaindl is a co-trustee.
(7) Includes 19,875 shares that can be acquired pursuant to the exercise of
warrants and 19,000 shares that can be acquired pursuant to conversion of
trust preferred securities.
(8) Includes 65,000 shares that can be acquired pursuant to conversion of trust
preferred securities.
(9) Includes 93,750 shares that can be acquired pursuant to the exercise of
options, 46,500 shares that can be acquired pursuant to the exercise of
warrants and 105,000 shares that can be acquired pursuant to conversion of
trust preferred securities. Also includes 117,746 shares and 58,873 shares
that can be acquired pursuant to the exercise of warrants, as to which Mark
W. Jaindl is a co-trustee. Also includes 153,532 shares that can be
acquired pursuant to conversion of trust preferred securities as to which
Mark W. Jaindl is a co-trustee.
(10) Includes 750 shares that can be acquired pursuant to the exercise of
warrants and 42,855 shares that can be acquired pursuant to conversion of
trust preferred securities.
(11) Mr. Haberberger has elected to retire from the Board of Directors at the
expiration of his current term, which expires at the Annual Meeting.
(12) Includes 3,000 shares that can be acquired pursuant to the exercise of
options and 4,250 shares that can be acquired pursuant to the exercise of
warrants. Also includes 6,000 shares than can acquired pursuant to the
conversion of trust preferred securities.
(13) Includes 10,500 shares that can be acquired pursuant to the exercise of
options and 225 shares that can be acquired pursuant to the exercise of
warrants.
(14) Includes 9,000 shares that can be acquired pursuant to the exercise of
options and 795 shares that can be acquired pursuant to the exercise of
warrants.
(15) Includes 6,000 shares that can be acquired pursuant to the exercise of
options and 2,250 shares that can be acquired pursuant to the exercise of
warrants.
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The business experience for the past five years for each of the
Company's continuing directors and executive officers is as follows:
FREDERICK J. JAINDL. Mr. Jaindl has served as Chairman of the Board and
as a director of American Bank (the "Bank") since 1996 and of the Company since
its formation in 2001. Mr. Jaindl is the sole proprietor of Jaindl Turkey Farms,
an agribusiness engaged in farming 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 the Bank since 1996 and of the Company since its
formation in 2001. He was a director of Massachusetts Fincorp, Inc., and its
wholly owned subsidiary, Massachusetts Co-operative Bank from May 2000 and
August 2000, respectively to August 2002. 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.
DAVID M. JAINDL. Mr. Jaindl has served as a director of the Bank since
1996 and of the Company since its formation in 2001. 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 the Bank since
1996 and of the Company since its formation in 2001. 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 served as a director of
Educators Mutual Insurance Life Insurance Company, Lancaster, Pennsylvania until
2002. 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.
JOHN C. LONG. Mr. Long has served as a director of the Company since
March 2003. Mr. Long has been a Vice President and Treasurer of Arrow
International, Inc., Reading, Berks County, Pennsylvania, a manufacturer of
medical devices, since 1995. Mr. Long is a Certified Public Accountant and holds
a Master of Business Administration degree from Columbia University, New York,
New York. Mr. Long has been designated as the "Financial Expert" of the
Company's Board of Directors.
PHILLIP S. SCHWARTZ. Mr. Schwartz has served as a director of the Bank
since 1996 and of the Company since its formation in 2001. 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.
MARTIN F. SPIRO. Mr. Spiro has served as a director of the Bank since
1996 and of the Company since its formation in 2001. Mr. Spiro retired in 1987
from garment manufacturing and currently is an investor in bank and thrift
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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 the Bank as Vice
President and Chief Financial Officer since 1999, and has served as Vice
President and Treasurer of the Company since its formation in 2001. 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 the Bank since 1997, most
recently as Senior Vice President, Senior Operations Officer and Secretary, and
serves as Vice President and Secretary of the Company. 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 the 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.
ROBERT W. TURNER. Mr. Turner has been employed by the Bank since 2001
as Vice President and Director of Technology. From 2000 to 2001, Mr. Turner was
a Senior Systems Engineer with Guardian Life Insurance Company. From 1995 to
2000, he was a Project Manager in the Construction and Mining Group of
Ingersoll-Rand Company.
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,
2002, 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 2002.
The Audit Committee consists of Directors Martin F. Spiro (Chairman),
Elizabeth A. Gaul, John C. Long and Phillip S. Schwartz. The Audit Committee
examines and approves the audit report prepared by the independent auditors of
the Company, reviews and appoints the independent auditors of the Company,
reviews the internal accounting controls of the Company and reviews and approves
audit policies. The Audit Committee met three times during 2002.
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. Mr.
Long has been designated as the Financial Expert on the Audit Committee.
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, 2002;
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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
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, 2002 and be filed with the SEC. In
addition, the Audit Committee determined to engage Beard Miller Company LLP as
the Company's independent auditors for the year ending December 31, 2003,
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
John C. Long
Philip S. Schwartz
DIRECTORS' COMPENSATION
Each non-employee director received $300 for attendance at Board
meetings and $100 for attendance at Committee meetings through September 30,
2002. Effective October 1, 2002, each Director receives $10,000 per year for
attendance at Board and Committee meetings. For the year ended December 31,
2002, directors as a group received $41,200 in fees for their services. Under
the Company's Non-Qualified Stock Option Plan, and beginning in 1999, each
non-employee director received an annual option grant of 2,000 shares of common
stock. Option grants to Directors were discontinued in 2002. At December 31,
2002, options to purchase 72,000 shares of common stock had been granted to
non-employee directors at an average exercise price of $5.58 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, 2002, certain information as to the total
remuneration paid by the Bank to the President and Chief Executive Officer and
the Senior Vice President and Senior Lending officer ("Named Executive
Officers"), each of whose salary and bonuses exceeded $100,000 in 2002.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- --------------------------------------
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS(#)(1) PAYOUTS COMPENSATION
- ------------------------------------------------------------------------------------------------------------------------------------
Mark W. Jaindl, 2002 $ 175,000 $ 24,874 -- -- 30,000 -- --
President and Chief 2001 162,500 18,134 -- -- -- -- --
Executive Officer 2000 148,077 15,000 -- -- 45,750 -- --
Chris J. Persichetti, 2002 $ 76,000 26,149 -- -- 1,500 -- --
Senior Vice President 2001 72,500 13,086 -- -- -- -- --
Senior Lending Officer 2000 70,000 13,208 -- -- 4,500 -- --
- -----------------
(1) Adjusted to reflect the three-for-two stock split declared in January 2002.
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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 395,000 shares of common stock, of which 265,250 were
granted and outstanding at December 31, 2002. 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,
2002, were 71,250. The weighted-average remaining contractual life of the
outstanding options at December 31, 2002, is approximately 7.3 years.
Set forth in the table that follows is information relating to options
granted under the Non-Qualified Stock Option Plan to the Named Executive
Officers during the year ended December 31, 2002.
====================================================================================================================
OPTION GRANTS IN LAST FISCAL YEAR
====================================================================================================================
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------------------------------------
PERCENT OF TOTAL EXERCISE
OPTIONS GRANTED OR BASE
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION GRANT DATE PRESENT
NAME GRANTED 2002 ($)(1) DATE VALUE ($)(2)
- --------------------------------------------------------------------------------------------------------------------
Mark W. Jaindl 30,000 82.2 7.67 1/10/12 80,700
- --------------------------------------------------------------------------------------------------------------------
Chris J. Persichetti 1,500 4.1 7.67 1/10/12 4,035
====================================================================================================================
- --------------------------
(1) The exercise price of the options is equal to the fair market value of the
underlying shares on the date of the award.
(2) Based on a grant date present value of $2.69 per share derived using the
Black-Scholes option pricing model with the following assumptions:
volatility of 31%; risk free rate of return of 5.00%; dividend yield of -0-;
and a 10-year option life.
Set forth in the table that follows is certain information concerning
options outstanding to the Named Executive Officers at December 31, 2002. No
options were exercised by the Named Executive Officers during 2002.
====================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
====================================================================================================================
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
YEAR-END YEAR-END(1)
-----------------------------------------------------
SHARES ACQUIRED VALUE EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME UPON EXERCISE REALIZED (#) ($)
- --------------------------------------------------------------------------------------------------------------------
Mark W. Jaindl 0 $0 93,750/57,000 $424,688/$36,680
- --------------------------------------------------------------------------------------------------------------------
Chris J. Persichetti 0 $0 9,000/6,000 $51,390/$2,065
====================================================================================================================
- ---------------------------
(1) Equals the difference between the aggregate exercise price of such options
and the aggregate fair market value of the shares of Common Stock that
would be received upon exercise, assuming such exercise occurred on
December 31, 2002, at which date the last trade price of the Common Stock
as quoted on the Nasdaq SmallCap Market was $9.49.
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
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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 AGREEMENT. American Bank has entered into an employment
agreement 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.
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 $89,500, $109,100, and $65,000 for the years ended
December 31, 2002, 2001, and 2000, respectively.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
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, 2002.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
American Bank leases the premises for its principal office under a
five-year operating lease agreement expiring November 2007. American Bank has
the option to extend the lease agreement for four 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 stockholder of American Bank Incorporated. The minimum lease payments
due in 2003 under the original terms of the lease are $303,000.
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.
8
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PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Audit Committee of the Company has approved the engagement of Beard
Miller Company LLP as the Company's auditors for the year ending December 31,
2003, 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 2002:
Audit Fees $ 49,473
Financial Information Systems
Design and Implementation Fees $ --
All Other Fees $ 26,067
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, 2003 the proposal must receive at
least a majority of the votes cast, either in person or by proxy, in favor of
such ratification. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF BEARD MILLER COMPANY LLP AS AUDITORS FOR THE YEAR ENDING
DECEMBER 31, 2003.
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 1, 2003.
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.
9
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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, 2002, 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
March 31, 2003
10
PROXY
AMERICAN BANK INCORPORATED
ANNUAL MEETING OF STOCKHOLDERS
APRIL 29, 2003
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 April 29, 2003, 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)
<s> <c> <c> <c>
1. The election as Directors of Frederick J. Jaindl, David
M. Jaindl and John C. Long, 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
--- ------- -------
<s> <c> <c> <c> <c>
2. The ratification of Beard Miller Company LLP as
auditors for the year ending December 31, 2003. [ ] [ ] [ ]
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.
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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 March 31,
2003, and audited financial statements.
Dated: _________________________ [ ] Check Box if You Plan
to Attend Annual Meeting
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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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