 | WSFS Bank Center | |
| 500 Delaware Avenue | ||
| Wilmington, Delaware 19801 | |
| 302-792-6000 | ||
| www.wsfsbank.com | ||
WSFS Bank Center
500 Delaware Avenue
Wilmington, Delaware 19801
302-792-6000
www.wsfsbank.com
UNITED STATES
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF
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Filed by a Party other than the Registrant¨o
| Preliminary Proxy Statement |
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
| Definitive Additional Materials |
| Soliciting Material Pursuant to |
WSFS FINANCIAL CORPORATION |
(Name of Registrant as Specified in its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
x | No fee required |
| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1)Title of each class of securities to which transaction applies: |
(2)Aggregate number of securities to which transaction applies: |
(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4)Proposed maximum aggregate value of transaction: |
(5)Total fee paid: |
| Fee paid previously with preliminary materials. |
| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1)Amount previously paid: | |
(2)Form, Schedule or Registration Statement No.: | |
(3)Filing Party: | |
(4)Date Filed: |
| | WSFS Bank Center | |
| 500 Delaware Avenue | ||
| Wilmington, Delaware 19801 | |
| 302-792-6000 | ||
| www.wsfsbank.com | ||
WSFS Bank Center
500 Delaware Avenue
Wilmington, Delaware 19801
302-792-6000
www.wsfsbank.com
March 25, 2009
29, 2010
The election of six directors. Two directors to hold office until the 2010 Annual Meeting of Stockholders and four directors to hold office until the 2012 Annual Meeting of Stockholders;
The ratification of the appointment of KPMG LLP as the independent registered public accountants for the fiscal year ending December 31, 2009;
An advisory (non-binding) vote on executive compensation;
| · | The election of six directors; |
| · | The ratification of the appointment of KPMG LLP as the independent registered public accountants for the fiscal year ending December 31, 2010; |
| · | The approval of amendments to the WSFS Financial Corporation 2005 Incentive Plan; |
| · | Re-approval of the material terms of performance goals for qualified performance-based awards under the WSFS Financial Corporation 2005 Incentive Plan; |
| · | An advisory (non-binding) vote on executive compensation; and |
| · | Such other matters as may properly come before the meeting or any adjournment thereof. |
The approval of amendments to the WSFS Financial Corporation Certificate of Incorporation; and
Such other matters as may properly come before the meeting or any adjournment thereof.
All stockholders of record holding shares of WSFS Financial Corporation common stock at the close of business on March 5, 200911, 2010 are entitled to vote at the meeting. This proxy statement and the enclosed proxy card were mailed to stockholders on or about March 25, 2009.
29, 2010.
Sincerely,
Marvin N. Schoenhals
Chairman
Contents
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Appendix A – Amended and Restated Certificate of Incorporation
| 1. | About the Annual Meeting | 1 |
| 2. | Matters to be Voted on at the Meeting | 6 |
| 3. | Directors and Officers of WSFS Financial Corporation and Wilmington Savings Fund Society, FSB | 9 |
| 4. | The Proposed Amendments to the 2005 Incentive Plan | 18 |
| 5. | Re-Approval of Material Terms of Performance Goals for Qualified Performance-Based Awards under the WSFS Financial Corporation 2005 Incentive Plan | 26 |
| 6. | Compensation | 31 |
| 7. | Corporate Governance | 62 |
| Committees of the Board of Directors | ||
| Executive Committee | ||
| Corporate Governance and Nominating Committee | ||
| Audit Committee and Audit Committee Report | ||
| Personnel and Compensation Committee | ||
| Trust Committee | ||
| 8. | Compensation of the Board of Directors | 72 |
| 9. | Other Information | 74 |
| Amended and Restated WSFS Financial Corporation 2005 Incentive Plan Appendix A | ||
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In order to hold the meeting, we need to have present, in person or by proxy, the holders of a majority of WSFS common stock outstanding as of March What is the purpose of the Annual Meeting?The WSFS Financial Corporation 20092010 Annual Meeting of Stockholders will be held at the Hotel duPont, Eleventh and Market Streets in Wilmington, Delaware on April 23, 200929, 2010 at 4:00 p.m. The business to be conducted at the meeting isis: (i) the election of directors, (ii) the ratification of the appointment of KPMG LLP as our independent registered public accountants, (iii) the approval of amendments to the WSFS Financial Corporation 2005 Incentive Plan, (iv) re-approval of the material terms of performance goals for qualified performance-based awards under the 2005 Incentive Plan and (v) an advisory (non-binding) vote on executive compensation and the approval of amendments to our Certificate of Incorporation.compensation. There will be six board seats up for election at this year’s meeting and we have nominated the persons currently filling those seats for reelection: Linda C. Drake, David E. Hollowell, Jennifer W. Davis, Donald W. Delson, Scott E. Reedfollowing persons: Anat M. Bird, John F. Downey, Calvert A. Morgan, Jr., Thomas P. Preston, Marvin N. Schoenhals and Claibourne D. Smith. Mrs. DrakeR. Ted Weschler. Messrs. Morgan, Preston, Schoenhals and Mr. HollowellWeschler have been nominated for one-year terms anda three-year term. Ms. Davis, Mr. Delson, Mr. Reed and Dr. Smith haveBird has been nominated for three-year terms. Eacha two-year term. Mr. Downey has been nominated for a one-year term. With the exception of Ms. Bird, each is a current director of WSFS Financial Corporation. You can find information about all of our current directors and nominee beginning on page eight.9.Why are you sending me a proxy card? What are you going to do with it?Why are you sending me a proxy card? What are you going to do with it?5, 2009,11, 2010, which was selected by the Board of Directors as the record date to determine which stockholders will receive notice of the meeting and be entitled to vote at the meeting. As of that date, there were 6,165,0997,084,903 shares of WSFS common stock outstanding. We are providing you with a proxy card so that your shares can be counted as present at the meeting and can be voted at the meeting even if you do not attend the meeting in person.
the appointment of the independent registered public accountants and for each of the other proposals to be voted on at the meeting.
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Yes. YouIf you are a registered holder of WSFS common stock, you can change your vote at any time by completing and returning a new proxy before the meeting. You may also revoke your proxy by sending a written notice to WSFS Financial Corporation, Attention: Corporate Secretary, WSFS Bank Center, 500 Delaware Avenue, Wilmington, Delaware 19801, or providing written notice in person at the meeting. If you vote by proxy and then attend the meeting, you do not need to vote again in person unless you want to change your prior vote. Attending the meeting in person will not cancel your proxy unless you vote in person at the meeting. Please note that if your shares are not registered in your own name, you will need additional documentation from your broker to vote in person at the meeting.
nominee or you may give more votes to certain nominees, even giving all 600 votes to a single nominee if you wish. You must attend the meeting and vote in person if you want to cumulate your vote for directors. Abstentions are treated as votes “cast” and therefore have the effect of a vote against the proposal.How many votes does a nominee need in order to be elected?Directors are elected by plurality vote, meaning that the nominees who receive the greatest number of votes are elected. You may vote for a nominee or you may withhold2your vote for a nominee. In a contested election, the number of seats up for election is less than the number of persons nominated for election as directors and thenominated. The winning nominees are the ones who receive more votes than the other nominees. In an uncontested election, there are enough seats up for election for all of the nominees, so all will be elected as directors regardless of the number of votes they each receive. It is our policy, however, that in an uncontested election, any directordirectors who was elected byreceive votes in favor of their election which is less than a majority of total votes in favor of their electioncast, should promptly offer to resign from the Board and request the Board to accept or reject thetheir resignation offer at the Board’s discretion. The Board’s Corporate Governance Committee will consider resignation offers and make its recommendation to the full Board. The Board will accept or reject theeach director’s resignation offer within 90 days.How many votes do I have?Each share of WSFS Financial Corporation common stock is entitled to one vote. We do, however, permit cumulative voting in the election of directors, meaning that if you have 100 shares and there are six seats up for election, you have 600 votes to distribute among the nominees as you see fit. You can distribute them equally and cast 100 votes for eachIf you give us a proxy to vote your shares at the meeting, we will distribute your votes among the nominees as we see fit. If you do not want us to use cumulative voting for your shares, you may state that on your proxy card.How many votes are required to ratify the appointment of the independent registered public accountants?To be ratified, the appointment of KPMG LLP as our independent registered public accountants must receive a majority of the votes cast on that proposal.How many votes are required to approve the amendments to the WSFS Financial Corporation 2005 Incentive Plan?To be amended, the WSFS Financial Corporation 2005 Incentive Plan must receive a favorable vote of a majority of all shares of WSFS common stock outstanding as of the March 11, 2010 record date.How many votes are required to re-approve the material terms of performance goalsfor qualified performance-based awards under the 2005 Incentive Plan?This proposal must receive a favorable vote of a majority of the votes cast on the proposal. Abstentions are treated as votes “cast” and therefore have the effect of a vote against the proposal.3What are stockholders being asked to approve regarding executive compensation?Stockholders are being asked to approve the following resolution:“Resolved, that the stockholders approve the compensation of the Company’s executives as disclosed pursuant to the compensation disclosure rulesof the Securities and Exchange Commission.”This proposal must receive a favorable vote of a majority of the votes cast on the proposal. Abstentions are treated as votes “cast” and therefore have the effect of a vote against the proposal.Is the stockholder vote on executive compensation binding on the Company?This is an advisory vote only. Neither we, nor the Board of Directors, will be bound to take action based upon the outcome. The Personnel and Compensation Committee will consider the vote of the stockholders when considering future executive compensation arrangements.How many votes are required to approve the amendments to the WSFS Financial Corporation Certificate of Incorporation?To be amended, the WSFS Financial Corporation Certificate of Incorporation must receive a favorable vote by a majority of all shares of WSFS common stock outstanding as of the March 5, 2009 record date.Will members of management and the Board of Directors be at the meeting?Yes. Our policy is that all members of the Board of Directors and all senior management officers should attend the annual meeting, and, except for Mr. Reed, allmeeting. All were present at last year’s annual meeting. We expect that all directors will attend this year.Can I ask questions at the meeting?Can I ask questions at the meeting?
Yes. We see the annual meeting as an opportunity for stockholders to have access to the Board of Directors and senior management in a public forum, and we invite stockholders to submit questions or comments in advance of the meeting. This is an important part of the process, and we have established a procedure for stockholders to send communications to the Board of Directors as well as to management.
While legal considerations and timing issues may prevent us from answering all questions or addressing all comments, we believe this dialogue is helpful in increasing communication with our stockholders.
Please send questions to: | WSFS Financial Corporation | |
| Investor Relations | ||
| WSFS Bank Center | ||
| 500 Delaware Avenue | ||
| Wilmington, Delaware 19801 | ||
| or: | stockholderrelations@wsfsbank.com |
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The
Linda C. Drake, for a one-year term
David E. Hollowell, for a one-year term
Jennifer W. Davis, for a three-year term
Donald W. Delson, for a three-year term
Scott E. Reed, for a three-year term
Claibourne D. Smith, for a three-year term
| Anat M. Bird, for a |
| · | John F. Downey, for a one-year term |
| · | Calvert A. Morgan, Jr., for a three-year term |
| · | Thomas P. Preston, for a three-year term |
| · | Marvin N. Schoenhals, for a three-year term |
| · | R. Ted Weschler, for a three-year term |
stockholder vote is not binding on the board of directors of the CPP participant, and may not be construed as overruling any decision by the participant’s board of directors.More information about all our director nominees can be found beginning on page 9.The Board of Directors recommends a vote in favor of these nominees.Proposal Number 2: Ratification of the Appointment of Independent Registered Public Accounting FirmKPMG LLP has served as our independent registered public accounting firm since 1994. The Board of Directors has appointed KPMG LLP to continue to be our independent registered public accounting firm for the current fiscal year ending December 31, 2009.2010. The Audit Committee evaluated the selection of KPMG LLP and gave a recommendation to the Board in favor of KPMG LLP. We are asking the stockholders to ratify the Board’s decision to appoint KPMG LLP for the 20092010 fiscal year.Representatives of KPMG LLP are expected to be present at the Annual Meeting to respond to appropriate questions and will have the opportunity to make a statement if they desire to do so.The Board of Directors recommends a vote in favor of the ratification of KPMG LLP as the independent registered public accounting firm.Proposal Number 3: Approval of Amendments to the WSFS Financial Corporation 2005 Incentive PlanThe WSFS Financial Corporation 2005 Incentive Plan was approved by the stockholders at our 2005 annual meeting and amended at our 2007 annual meeting. The purpose of the plan is to promote our success by linking the personal interests of WSFS Associates, officers and directors more closely to those of our stockholders. The plan also gives6WSFS Associates, officers and directors an additional incentive for outstanding performance. As of March 11, 2009, only 57,333 shares of our common stock remain available for issuance under the current plan.We are asking stockholders to approve an amendment to the 2005 Incentive Plan to increase, by 335,000, the number of shares of our common stock that may be issued to Associates, officers and directors pursuant to awards granted under the plan. The plan provides that each share issued under the plan pursuant to an award other than a stock option or stock appreciation right shall reduce the number of available shares under the plan by four shares.We are also asking stockholders to approve an amendment to the plan to permit the grant of stock options and stock appreciation rights having a minimum vesting period of four years and a maximum life of seven years after the date of the grant.More information about the plan and the proposed amendments are described beginning on page 18 under “The Proposed Amendments to the 2005 Incentive Plan.”The Board of Directors recommends a vote in favor of the amendments to the 2005 Incentive Plan.Proposal Number 4: Re-Approval of Material Terms of Performance Goals for Qualified Performance-Based Awards under the WSFS Financial Corporation 2005 Incentive PlanIn order to preserve our ability to continue to grant fully tax-deductible performance-based awards under the 2005 Incentive Plan after the Treasury Department no longer holds an interest in our shares, the material terms of the performance goals, including the list of permissible business criteria for performance objectives, under the plan must be approved by our stockholders no less often than every five years. We are asking for your re-approval of the material terms of the performance goals for qualified performance-based awards under the 2005 Incentive Plan.More information about this proposal is described beginning on page 26 under “Re-Approval of Material Terms of Performance Goals for Qualified Performance-Based Awards under the WSFS Financial Corporation 2005 Incentive Plan.”The Board of Directors recommends a vote in favor of this proposal.The American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009 includes a provision requiring Capital Purchase Program (“CPP”) participants, during the period in which any obligation arising from assistance provided under the CPP remains outstanding, to permit7a separate shareholder vote to approve the compensation of executives as disclosed pursuant to the compensation rules of the Securities and Exchange Commission. This requirement applies to any proxy, consent, or authorization for an annual or other meeting of the participant’s stockholders. Under this law, theTherefore, stockholders are being given the opportunity to vote on an advisory (non-binding) resolution at the Annual Meeting to approve the compensation of our executives as described under “Compensation Discussion and Analysis” and tabular disclosure of Named Executive Officer compensation in our 20092010 proxy statement and related material. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to endorse or not endorse our executive compensation.The purpose of our compensation policies and procedures is to attract, motivate and retain experienced, highly-qualified executives critical to our long-term success and enhancement of stockholder value. The Board of Directors believes our compensation policies and procedures achieve this objective, and therefore recommend stockholders vote “For” the proposal.Stockholders are being asked to approve the following resolution:“Resolved, that the stockholders approve the compensation of the Company’s executives as disclosed pursuant to the compensation disclosure rulesof the Securities and Exchange Commission.”This is an advisory vote only. Neither we, nor the Board of Directors, will be bound to take action based upon the outcome. The Personnel and Compensation Committee will consider the vote of the stockholders when considering future executive compensation arrangements.The Board of Directors recommends a vote in favor of the resolution approving executive compensation.Proposal Number 4: Approval of Amendment to Article Fourth, Paragraph A of our Restated Certificate of IncorporationWe are asking stockholders to approve the deletion of a portion of Article Fourth, Paragraph A of our Restated Certificate of Incorporation. It is not required by Delaware General Corporation Law and is applicable only to federal savings banks, not to Delaware Business Corporations like ours.A more detailed discussion of this amendment can be found beginning on page 14.The Board of Directors recommends a vote in favor of the amendment to Article Fourth, Paragraph A of our Restated Certificate of Incorporation.
Proposal Number 5: Approval of Amendment to Delete Article Fourth, Paragraph C and Article Sixth, Paragraph (d) of our Restated Corporation Certificate of Incorporation
We are asking stockholders to approve the deletion of Article Fourth, Paragraph C and Article Sixth, Paragraph (d) of our Restated Certificate of Incorporation. These paragraphs were only applicable for a period of five years after the conversion of Wilmington Savings Fund Society, FSB from mutual to stock form and have, by their terms, expired and are no longer applicable.
A more detailed discussion of this amendment can be found on page 15.
The Board of Directors recommends a vote in favor of these amendments to delete Article Fourth, Paragraph C and Article Sixth, Paragraph (d) of our Restated Certificate of Incorporation in their entirety.
Proposal Number 6: Approval of Amendment to Delete Article Fifth of our Restated Corporation Certificate of Incorporation
We are asking stockholders to approve the deletion of Article Fifth of our Restated Certificate of Incorporation. This article has, by its terms, expired and is no longer applicable.
A more detailed discussion of this amendment can be found on page 15.
The Board of Directors recommends a vote in favor of the amendment to delete Article Fifth of our Restated Certificate of Incorporation in its entirety.
3. Directors and Officers of WSFS Financial Corporation
Each director and nominee was selected to be a member of the Board based on his or her particular background and expertise. Immediately following the description of each person’s background is a description of the particular experience, skills and qualifications that were instrumental in the Corporate Governance and Nominating Committee’s determination that he or she should serve as our director. For additional information, see “Our Director Nomination and Selection Process” and “Diversity” beginning on page 64.
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Charles G. Cheleden
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Jennifer W. Davis
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Donald W. Delson
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John F. Downey
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Linda C. Drake
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David E. Hollowell
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Joseph R. Julian
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Dennis E. Klima
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Calvert A. Morgan, Jr.
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Thomas P. Preston
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Scott E. Reed
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Claibourne D. Smith
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Mark A. Turner
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Peggy H. Eddens
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Barbara J. Fischer
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Stephen A. Fowle
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Richard Immesberger
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Rodger Levenson
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Richard M. Wright
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Transactions with Our Insiders
In the ordinary course of its business as a bank, WSFS Bank makes loans to our directors, officers and Associates. These loans are subject to limitations and restrictions under federal banking laws and regulations and are made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with other persons. These loans do not involve more than the normal risk of collectibility or present other unfavorable features to WSFS Bank.
We carefully evaluate any circumstances, transactions or relationships that we feel could have an impact on whether the members of our Board of Directors are independent of us or our subsidiaries, including WSFS Bank, and are able to conduct their duties and responsibilities as directors without any personal interests that would interfere or conflict with those duties and responsibilities.
All of our directors other than Mr. Schoenhals, Mr. Turner and Mr. Morgan are independent. Mr. Schoenhals and Mr. Turner are Associates of WSFS Financial Corporation and WSFS Bank since 1992 and are not independenta director since 1990. His current term expires at the 2010 Annual Meeting of Stockholders. From 1990 to 2007 he also served as President and Chief Executive Officer. Mr. Schoenhals was a director of the Federal Home Loan Bank of Pittsburgh from 1997 to 2007, serving as their Chairman from 2005 to 2007. He was a member of the Brandywine Mutual Funds Board of Directors from 1995 to 2006. He currently serves as Chairman of the Board of Burris Logistics, a privately-owned distributer of frozen and dry foods. Mr. Schoenhals is a trustee and former chairman of the Delaware Public Policy Institute. He is a member and former chairman of the Delaware State Chamber of Commerce and is chairman of the Sunday Breakfast Mission. He is a member of the Delaware Business Roundtable and chairs their Education Committee. Mr. Schoenhals is also chairman of Vision 2015, a Delaware coalition that created and is implementing a plan to make Delaware public education the best in the world by virtue2015. He serves on the Board of not being outside directors.Directors of the Curry School of Education Foundation, University of Virginia. Mr. MorganSchoenhals received the Josiah Marvel Cup Award from the Delaware State Chamber of Commerce, presented annually to honor a Delawarean who has made an outstanding contribution to the state, community and society. In 2004, he was inducted into the Delaware Business Leaders Hall of Fame. Mr. Schoenhals received his undergraduate degree in business administration from the University of Michigan and a Master of Business Administration from the University of Pennsylvania Wharton School of Finance and Commerce. Mr. Schoenhals brings almost
Downingtown, PA.
4 to report the purchase of 500 shares of WSFS common stock in March 2009.
Directors: | Number of Shares (Including Exercisable Options)1 | Percentage of our Common Stock Outstanding | ||
Marvin N. Schoenhals | 130,130 |
| 2.08% |
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Charles G. Cheleden | 17,278 |
| 0.28% |
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Jennifer W. Davis | 425 |
| 0.01% |
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Donald W. Delson | 2,425 |
| 0.04% |
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John F. Downey | 15,378 |
| 0.25% |
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Linda C. Drake | 15,278 |
| 0.25% |
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David E. Hollowell | 16,618 |
| 0.27% |
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Joseph R. Julian | 75,154 |
| 1.22% |
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Dennis E. Klima | 8,228 |
| 0.13% |
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Calvert A. Morgan, Jr. | 11,878 |
| 0.19% |
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Thomas P. Preston | 17,133 |
| 0.28% |
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Scott E. Reed | 5,628 |
| 0.09% |
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Claibourne D. Smith | 14,708 |
| 0.24% |
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Mark A. Turner | 114,167 |
| 1.83% |
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Executive Officers: |
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Peggy H. Eddens | 1,385 |
| 0.02% |
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Barbara J. Fischer | 25,938 |
| 0.42% |
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Stephen A. Fowle | 13,068 |
| 0.21% |
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Richard Immesberger | 1,250 |
| 0.02% |
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Rodger Levenson | 7,379 |
| 0.12% |
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Richard M. Wright | 7,290 |
| 0.12% |
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Directors and Officers as a group (20 persons) | 500,738 |
| 7.76% |
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| Directors: | Number of Shares (Including Exercisable Options and Warrants)1 | Percentage of our Common Stock Outstanding |
| Marvin N. Schoenhals | 151,573 | 2.11% |
| Charles G. Cheleden | 19,424 | 0.27% |
| Jennifer W. Davis | 1,363 | 0.02% |
| Donald W. Delson | 2,860 | 0.04% |
| John F. Downey | 17,524 | 0.25% |
| Linda C. Drake | 16,484 | 0.23% |
| David E. Hollowell | 18,924 | 0.27% |
| Joseph R. Julian | 77,300 | 1.09% |
| Dennis E. Klima | 10,874 | 0.15% |
| Calvert A. Morgan, Jr. | 16,024 | 0.23% |
| Thomas P. Preston | 19,408 | 0.27% |
| Scott E. Reed | 7,574 | 0.11% |
| Claibourne D. Smith | 16,654 | 0.23% |
| Mark A. Turner | 130,302 | 1.81% |
| R. Ted Weschler | 1,629,310 | 22.58% |
| Executive Officers: | ||
| Peggy H. Eddens | 4,452 | 0.06% |
| Stephen A. Fowle | 20,580 | 0.29% |
| Richard Immesberger | 6,941 | 0.10% |
| Rodger Levenson | 14,837 | 0.21% |
| S. James Mazarakis | 800 | 0.01% |
| Richard M. Wright | 13,773 | 0.19% |
| Directors and Executive Officers as a group (21) | 2,196,981 | 29.16% |
| 1Includes exercisable options for each of the individuals as follows: Schoenhals: |
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Our Restated Certificate of Incorporation currently includes several outdated provisions. These provisions are outlined below.
Under Delaware law, each of these amendments to our Restated Certificate of Incorporation requires the approvalfuture awards.
| · | options to purchase shares of our common stock; |
| · | stock appreciation rights, which equal the increase in the fair market value of a share of our common stock between the date of the grant and the date the stock appreciation right is exercised; |
| · | performance awards, which are payable in cash or shares of our common stock upon the attainment of performance goals set by the Personnel and Compensation Committee; |
| · | shares of our common stock that are subject to a vesting period and subject to forfeiture in accordance with terms set by the Personnel and |
Compensation Committee; |
| · | common stock units, which represent the right to receive shares of our common stock (or an equivalent value in cash or other property) in the future, based upon the attainment of vesting and/or performance criteria set by the Personnel and Compensation Committee; |
| · | deferred stock units, which represent the right to receive shares of our common stock (or an equivalent value in cash or other property) in the future; |
| · | dividend equivalents on full-value awards, which represent a payment equal to any dividends paid on our outstanding common stock (or an equivalent value payable in stock or other property) for each share of our common stock underlying a full-value award (dividend equivalents may not be granted in conjunction with an option or stock appreciation right); |
| · | other stock-based awards in the discretion of the Personnel and Compensation Committee, including grants of shares of our common stock that are not subject to a vesting period or forfeiture; and |
| · | cash awards. |
Proposal Number 4: Amendmentunder the plan by four shares. If the proposed amendment is approved by stockholders at the 2010 annual meeting, the aggregate number of shares reserved for issuance pursuant to Article Fourth, Paragraph A
We proposeawards granted under the plan will increase by 335,000 to delete a paragraph1,197,000.
| · | grant awards |
| · | designate participants; |
| · | determine the type or types of awards to be granted to each individual and the number, terms and conditions of those awards; |
| · | establish, adopt or revise any rules and regulations as it may deem advisable to administer the plan; and |
| · | make all other decisions and determinations that may be required under the plan. |
“Except for shares issuedthe case of substitute awards granted in connection with mergers or acquisitions, such options and stock appreciation rights shall either (i) be subject to a minimum vesting period of four years (which may include graduated vesting within such four-year period), or one year if the mergervesting is based on performance criteria other than continued service, or (ii) be granted solely in exchange for foregone cash compensation. Notwithstanding the foregoing, the Personnel and Compensation Committee may permit acceleration of New Federal Savingsvesting of such options or stock appreciation rights in the event of the participant’s death, disability or retirement or the occurrence of a change in control.
| · | all of his or her outstanding options and stock appreciation rights will become fully vested and exercisable; |
| · | all time-based vesting restrictions on his or her outstanding awards will lapse; |
| · | the target payment opportunities attainable under all outstanding performance-based awards are deemed to have been fully earned as of the date of termination based upon an assumed achievement of all relevant performance goals at the “target” level (except that in the case of retirement, this treatment does not apply to award that are intended to meet the performance-based compensation exemption from Code Section 162(m)); |
| · | there will be a pro rata payment to the participant or his or her estate within 30 days after date of termination based upon the length of time within the performance period that has elapsed prior to the date of termination. |
| (a) | (b) | (c) | ||||
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||
Equity compensation plans approved by shareholders1 | 752,038 | $ | 41.89 | 105,902 | ||
Equity compensation plans not approved by shareholders2 | - | - | - | |||
| Total | 752,038 | $ | 41.89 | 105,902 | ||
This provision is not required by Delaware General Corporation Law and is a carryover provision from the regulations of the Office of Thrift Supervision (“OTS”) applicable only to federal savings banks, not to Delaware business corporations, like ours. As this provision may limitpreserve our ability to issue stockcontinue to grant fully tax-deductible performance-based awards under the 2005 Incentive Plan after the Treasury Department ceases to hold an interest in certain circumstances without stockholder approval,our shares, the material terms of the performance goals, including the list of permissible business criteria for performance objectives, under the plan must be approved by the stockholders no less often than every five years. Separate from the proposed amendment to increase the number of available shares under the 2005 Incentive Plan by 335,000 shares pursuant to Proposal Number 3, we are seeking approval to delete it in its entirety.
It is important to note that even with this amendment, we will still be required to obtain stockholder approval of most issuances of stock to our officers and directors or to establish a plan pursuant to which officers or directors may receive option or stock grants. This requirement will remain in place as long as our stock is traded on Nasdaq. Nasdaq rules provide an exceptionasking for certain grants in connection with the hiring of officers. In addition, Nasdaq would not require prior approval of private placements of our stock to directors or officers or issuances of stock in connection with acquisitions of companies in which directors or officers may own stock unless an officer or director had a 5% or greater interest in the company being acquired or, collectively, they owned 10% or moreyour re-approval of the company being acquired.
The Board of Directors believes it is in our best interest and that the Nasdaq rule still providesof our stockholders with a say in most issuances of shares to insiders while providingenable us the potential flexibility it may needto implement compensation arrangements that qualify as fully tax deductible performance-based compensation in the future.
Board Recommendation
2005 Incentive Plan. The Board of Directors recommends a vote approval. The Board of Directors in “How We Determine Annual Incentive Amounts” beginning on page 41. Considering the total mix of compensation, we believe these In addition, they are compliant with TARP limitations. Named Executive Officers 2007 2008 Mark A. Turner – President and Chief Executive Officer Mark A. Turner – President and Chief Executive Officer Marvin N. Schoenhals – Chairman of the Board Marvin N. Schoenhals – Chairman of the Board Stephen A. Fowle – Executive Vice President and Chief Financial Officer Stephen A. Fowle – Executive Vice President and Chief Financial Officer Rodger Levenson - Executive Vice President and Director of Commercial Banking Rodger Levenson - Executive Vice President and Director of Commercial Banking Barbara J. Fischer – Executive Vice President and Chief Administrative Officer Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing Section 111 of EESA was amended in its entirety with the enactment of the American Recovery and Reinvestment Act of 2009 (ARRA) on February 17, 2009. the period in which the U.S. Treasury holds its equity investment in our Company (other than any warrants previously issued). In addition, no The Committee considers various factors in evaluating executive compensation, including: consultant was less than $50,000. or 2009. Total Assets 2006 Y/E Company Name Ticker City State ($000) 1 F.N.B. Corp. FNB Hermitage PA 6,007,592 2 National Penn Bancshares, Inc. NPBC Boyertown PA 5,452,288 3 NBT Bancorp Inc. NBTB Norwich NY 5,087,572 4 S&T Bancorp, Inc. STBA Indiana PA 3,338,543 5 Harleysville National Corp. HNBC Harleysville PA 3,249,828 6 Dime Community Bancshares, Inc. DCOM Brooklyn NY 3,173,377 7 TrustCo Bank Corp NY TRST Glenville NY 3,161,187 8 U.S.B. Holding Co., Inc. UBH Orangeburg NY 2,923,247 9 Flushing Financial Corp. FFIC Lake Success NY 2,836,521 10 Sandy Spring Bancorp, Inc. SASR Olney MD 2,610,457 11 City Holding Company CHCO Charleston WV 2,507,807 12 Hudson Valley Holding Corp. HUVL Yonkers NY 2,291,734 13 Tompkins Financial Corp. TMP Ithaca NY 2,210,837 14 Union Bankshares Corp. UBSH Bowling Green VA 2,092,891 15 First Community Bancshares, Inc. FCBC Bluefield VA 2,033,698 16 Intervest Bancshares Corp. IBCA New York NY 1,971,753 17 Virginia Commerce Bancorp, Inc. VCBI Arlington VA 1,949,082 18 Univest Corp. of Pennsylvania UVSP Souderton PA 1,929,501 19 Parkvale Financial Corp. PVSA Monroeville PA 1,858,715 Average 2,983,507 25th Percentile 2,063,295 50th Percentile 2,610,457 75th Percentile 3,211,603 WSFS Financial Corp. WSFS Wilmington DE 2,997,396 Percentile Rank of WSFS Financial Corp 63% Performance Peer Group MIP. peers, ranging from 3% to 7% below the market median. Base Salary NAMED EXECUTIVE OFFICERS 2007 20081 2007 to 2008 % increase 2009 2008 to 2009 % increase Mark A. Turner – President and Chief Executive Officer $375,000 $405,000 8.0% $405,000 0% Marvin N. Schoenhals – Chairman of the Board 463,000 463,000 0% 463,000 0% Stephen A. Fowle – Executive Vice President and Chief Financial Officer 197,000 210,000 6.6% 210,000 0% Rodger Levenson – Executive Vice President and Director of Commercial Banking1 235,000 235,000 0% 235,000 0% Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 190,060 225,000 18.4% 225,000 0% 2009. 1. Return on assets (ROA) 2. Return on equity (ROE) 3. Earnings per share (EPS) growth In addition to the modifications to the performance period, we applied an additional modifier to the corporate performance goals. We believe it would be inappropriate to provide high payments for a sub-par performance year even if we significantly outperformed our peers. To protect against such a situation, we established an ROA-based modifier. Based on historically reasonable performance for the industry, the baseline ROA for the plan was set at 1.0%. If our ROA falls below 1.0% at the completion of the year, any payments otherwise due under the plan would be reduced by the percentage below the ROA baseline. ·Setting personal performance goals approval of recommendations submitted by the · Weighting the goals Weighting of Performance Criteria by NEO Named Executive Officer Bank-Wide Performance Personal Performance Mark A. Turner – President and Chief Executive Officer 100 % 0 % Marvin N. Schoenhals – Chairman of the Board 100 % 0 % Stephen A. Fowle – Executive Vice President and Chief Financial Officer 75 % 25 % Rodger Levenson – Executive Vice President and Director of Commercial Banking 75 % 25 % Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 75 % 25 % MIP Opportunity as a Percent of Base Salary Named Executive Officer Minimum Target Maximum Mark A. Turner – President and Chief Executive Officer 25 % 50 % 120 % Marvin N. Schoenhals – Chairman of the Board 25 % 50 % 120 % Stephen A. Fowle – Executive Vice President and Chief Financial Officer 17.5 % 40 % 90 % Rodger Levenson – Executive Vice President and Director of Commercial Banking 17.5 % 40 % 90 % Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 17.5 % 40 % 90 % 2008 Management Incentive Plan Company Performance Goals and Results Percentile Rank to PPG 2008 Goal Threshold (40th) Target (60th) Max (75th) Actual Results Score Return on Assets (ROA) 0.28% 0.56% 0.75% .50% 1.77 Return on Equity (ROE) 2.58% 6.16% 8.77% 7.30% 2.44 Earnings Per Share (EPS) Growth -61.11% -26.88% -1.10% -43.5% 1.51 Average 1.91 Percentile Rank 57th percentile for relative performance versus peers. Actual 2008 paid in 2009 NAMED EXECUTIVE OFFICER MIP Target Opportunity as a % of Base Salary Percent of Total Compensation # of Restricted Stock Units Value1 Mark A. Turner – President and Chief Executive Officer 50% 30% 7,611 $ 177,179 Marvin N. Schoenhals – Chairman of the Board 50% 30% 8,701 202,571 Stephen A. Fowle – Executive Vice President and Chief Financial Officer 40% 24% 2,902 67,551 Rodger Levenson – Executive Vice President and Director of Commercial Banking 40% 23% 3,054 71,092 Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 40% 24% 3,015 70,181 Equity/Long-Term Incentives Why We Offer Equity The first table shows the annual award opportunity and the long-term restricted stock award opportunity, both as a percent of salary. The actual number of shares awarded will depend upon stock price and option value at the time of grant. NAMED EXECUTIVE OFFICER Annual Restricted Stock Grant as a % of Base Salary Performance-Based Restricted Stock Grants as a % of Base Salary 1.20% ROA 1.35% ROA 1.50% ROA Mark A. Turner – President and Chief Executive Officer 40% 120% 180% 240% Marvin N. Schoenhals – Chairman of the Board 40% 120% 180% 240% Stephen A. Fowle – Executive Vice President and Chief Financial Officer 25% 80% 100% 140% Rodger Levenson – Executive Vice President and Director of Commercial Banking 25% 80% 100% 140% Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 25% 80% 100% 140% NAMED EXECUTIVE OFFICER Grant Date Estimated Future Payouts Under Equity Incentive Plan Awards1 Fair Value Threshold # Target # Maximum # Mark A. Turner, President and Chief Executive Officer 5/28/08 11,100 16,600 22,200 $ 0 Marvin N. Schoenhals, Chairman 5/28/08 11,100 16,600 22,200 0 Stephen A. Fowle, Executive Vice President and Chief Financial Officer 5/28/08 3,500 4,300 6,000 0 Rodger Levenson, Executive Vice President and Director of Commercial Banking 5/28/08 3,500 4,300 6,000 0 Richard M. Wright, Executive Vice President and Director of Retail Banking and Marketing 5/28/08 3,500 4,300 6,000 0 2010. We provide a 401(k) program that allows Associates to contribute a portion of their pre-tax earnings towards retirement savings. We offer a Company match to all Associates enrolled in our 401(k) plan as a component of total compensation and to encourage them to participate in the Plan. We match the first 5% of an Associate’s contribution Non-Qualified Deferred Compensation Named Executive Officer Number of Restricted Stock Units Mark A. Turner – President and Chief Executive Officer Marvin N. Schoenhals – Chairman of the Board Stephen A. Fowle – Executive Vice President and Chief Financial Officer 683 Rodger Levenson – Executive Vice President and Director of Commercial Banking 858 Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 438 improvements to their productivity as a Company executive. CEO expenditures must be approved by the Chairman of the Board or the Chairman of the Personnel and Compensation Committee. EVP expenditures must be approved by the CEO. Tax gross-ups are specifically prohibited under this policy. such payments on a case-by-case basis. No such non-deductible payments under Code Section 280G were paid to any current or former NEO during 2009. 2007. Name and Principal Position Year Mark A. Turner, Marvin N. Schoenhals, Stephen A. Fowle, Rodger Levenson, Richard M. Wright, 2 Represents the 2009. For Mr. Turner, of the 2 For Mr. Schoenhals, of the 3 For Mr. Fowle, of the 4 For Mr. Levenson, of the 5 For Mr. Wright, of the Option Awards Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) Mark A. Turner 24,780 $1,016,892 Marvin N. Schoenhals 7,000 350,717 Stephen A. Fowle - - Rodger Levenson - - Richard M Wright - - Termination without cause 2009. each retiree irrespective of annual increases to the cost of the medical benefit premium. We limit our increases to no more than 4% annually. We believe that it is important to have a strong, independent Board of Directors that is accountable to the stockholders. Our By-laws empower the Corporate Governance and Nominating Committee with the responsibility for identifying qualified individuals as candidates for membership in the Board of Directors. It also believes that it should have a board membership with a cross-section of thinking that is in tune with the needs of our customers and community (which includes potential future customers), as well as future opportunities. Our market is diverse, our board should strive to be equally as diverse. of the Board is responsible for, among other things, the following: It is the policy of the Audit Committee to approve all audit and non-audit services prior to the engagement of the independent registered public accounting firm to perform any All Other Fees.The aggregate fees earned by KPMG LLP for professional services rendered other than those listed under the captions “Audit Fees,” “Audit Related Fees,” and “Tax Fees” for both 2009. Trust Committee 2009. Directors Fees Earned or Paid in Cash Stock Awards Option Awards1 All Other Compensation Total Charles G. Cheleden $67,084 $23,433 $11,910 - $102,427 John F. Downey 37,334 23,433 11,910 - 72,677 Linda C. Drake 33,084 23,433 11,910 - 68,427 David E. Hollowell 49,334 23,433 12,447 - 85,214 Joseph R. Julian 40,484 23,433 11,910 - 75,827 Dennis E. Klima 49,984 23,433 11,362 - 84,779 Calvert A. Morgan, Jr.2 51,034 23,433 16,628 $149,167 240,262 Thomas P. Preston 31,784 23,433 12,073 - 67,290 Scott E. Reed 50,034 23,433 10,117 - 83,584 Claibourne D. Smith 49,984 23,433 11,910 - 85,327 The Percentage of WSFS Financial Corporation common stock outstanding Company, including this Plan.in favor“FOR” the re-approval of the material terms of performance goals for qualified performance-based awards under the 2005 Incentive Plan.As described above under “The Proposed Amendments to the 2005 Incentive Plan,” we are prohibited from deducting compensation for any NEO under Internal Revenue Code Section 162(m) to the extent such compensation exceeds $500,000 during any portion of a year in which the Treasury Department holds an interest in our shares, even if the compensation qualifies as “performance-based.” After that period ends, we will again be subject to the regular provisions of Code Section 162(m), which prevent us from claiming income tax deductions for compensation in excess of $1 million paid to certain senior executives. Compensation is exempt from this $1 million limitation if it is “qualified performance-based compensation.”Market-priced stock options and stock appreciation rights are two examples of performance-based compensation. Other types of awards, such as restricted stock, stock units, performance shares and performance units that are granted pursuant to pre-established objective performance formulas, may also qualify as fully-deductible performance-based compensation, so long as certain requirements, such as stockholder approval of the material terms of the performance goals are met. While our stockholders previously approved the 2005 Incentive Plan and its material terms at our 2005 Annual Meeting, that approval satisfied the Section 162(m) requirements only through our 2010 Annual Meeting. Therefore, we are asking for your re-approval of the material terms of the performance goals under the 2005 Incentive Plan.For purposes of Section 162(m), the material terms of the performance goals include (i) the Associates eligible to receive compensation under the 2005 Incentive Plan, (ii) a description of the business criteria on which the performance goals may be based, and26(iii) the maximum amount of compensation that can be paid to an Associate under the performance goals. Each of these aspects of the 2005 Incentive Plan is discussed below.Eligibility and ParticipationAwards may be granted under the 2005 Incentive Plan to any of our, or our affiliates’, Associates, officers or directors. Based on compensation practices, we expect that a range of 80 to 100 individuals annually will receive awards under the 2005 Incentive Plan.Performance ObjectivesThe provisions of the 2005 Incentive Plan are intended to ensure that all options and stock appreciation rights granted under the plan will qualify for the Section 162(m) performance-based exemption from Section 162(m). When granting any other award, the Personnel and Compensation Committee may designate such award as a “qualified performance-based award” intended to qualify for the Section 162(m) exemption. If an award is so designated, the Personnel and Compensation Committee must establish performance goals for such award within the time period prescribed by Section 162(m) based on one or more of the following business criteria, which may be expressed in terms of Company-wide objectives or in terms of objectives that relate to the performance of an affiliate, or a division, region, department or function within our company or our affiliate:· Revenue · Sales · Profit (net profit, gross profit, operating profit, economic profit, profit margins or other corporate profit measures) · Earnings (EBIT, EBITDA, earnings per share, or other corporate earnings measures) · Net income (before or after taxes, operating income or other income measures) · Cash (cash flow, cash generation or other cash measures) · Stock price or performance · Total stockholder return (stock price appreciation plus reinvested dividends divided by beginning share price) · Return measures (including, but not limited to, return on assets, capital, equity, or sales, and cash flow return on assets, capital, equity, or sales); · Market share · Improvements in capital structure · Expenses (expense management, expense ratio, expense efficiency ratios or other expense measures) · Business expansion or consolidation (acquisitions and divestitures) · Internal rate of return or increase in net present value · Working capital targets relating to inventory and/or accounts receivable · Planning accuracy (as measured by comparing planned results to actual results) 27Performance goals with respect to the above-listed business criteria may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to an established or specially-created performance index of our competitors or peers. Any member of an index that ceases to exist during a measurement period will be disregarded for the entire measurement period. Performance goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion).For a number of years, our company-wide performance criteria has included: Return on Average Assets, Return on Average Equity and Earnings Per Share Growth. Specific goals may differ from executive to executive.Each qualified performance-based award (other than a market-priced option or stock appreciation right) will be earned, vested and payable, as applicable, only upon the achievement of performance goals established by the Personnel and Compensation Committee based upon one or more of the above-listed qualified business criteria, together with the satisfaction of any other conditions, such as continued employment, as the committee may determine to be appropriate. However, the Personnel and Compensation Committee may provide, either in connection with the grant of an award or by amendment, that achievement of such performance goals will be waived upon the death or disability of the grantee, or in connection with our change in control. Performance periods established by the Personnel and Compensation Committee for any such qualified performance-based award may be as short as three months and may be any longer period.The Personnel and Compensation Committee may provide in any qualified performance-based award that any evaluation of performance may include or exclude any of the following events that occurs during a performance period: (a) asset write-downs or impairment charges; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) accruals for reorganization and restructuring programs; (e) extraordinary nonrecurring items as described under applicable U.S. accounting principles and/or in management's discussion and analysis of financial condition and results of operations appearing in our annual report to Article Fourth, Paragraph Astockholders for the applicable year; (f) acquisitions or divestitures; and (g) foreign exchange gains and losses. To the extent such inclusions or exclusions affect awards to our Restated Certificatecovered Associates, they will be prescribed in a form that meets the requirements of IncorporationSection 162(m) for deductibility.Any payment of a qualified performance-based award will be conditioned on the written certification of the Personnel and Compensation Committee in each case that the performance goals and any other material conditions were satisfied. Except as specifically provided above, no qualified performance-based award may be amended, nor may the Personnel and Compensation Committee exercise any discretionary authority it may otherwise have under the 2005 Incentive Plan, in any manner to deletewaive the above-described paragraph.28achievement of the applicable performance goal based on qualified business criteria or to increase the amount payable pursuant to the performance goal or the value of the award, or otherwise in a manner that would cause the award to cease to qualify for the Section 162(m) exemption.Limitations and Maximum Grants Under the 2005 Incentive PlanSubject to certain anti-dilution adjustments, a total of 862,000 shares of the Company’s common stock, have been reserved for issuance as awards under the 2005 Incentive Plan. If the stockholders approve Proposal Number 5 – Amendment3, that number will increase to Delete Article Fourth, Paragraph C and Article Sixth, Paragraph (d)We propose to delete Article Fourth, Paragraph C and Article Sixth, Paragraph (d) in their entirety as they have, by their terms, expired. Article Fourth, Paragraph C limited the beneficial ownership of greater than 10% of our outstanding common stock. Article Sixth, Paragraph (d) restricted the ability to call special meetings of stockholders1,197,000 shares. In either case, to the Boardextent that an award is canceled, terminates, expires, is forfeited or lapses for any reason, any unissued shares subject to the award will again be available for issuance pursuant to awards granted under the 2005 Incentive Plan. Shares subject to awards settled in cash will again be available for issuance pursuant to awards granted under the 2005 Incentive Plan. Stock awards other than stock options or stock appreciation rights will reduce the number of Directors. In both cases, these restrictions were only applicableshares available for issuance under the 2005 Incentive Plan by a period4-to-1 ratio.Shares issued under the 2005 Incentive Plan may be shares of 5 yearsoriginal issuance or shares held in our treasury that have been reacquired by us. The following grant limits apply under the conversion2005 Incentive Plan:· the maximum number of shares with respect to one or more options and/or stock appreciation rights that may be granted during any one calendar year to any one participant is 50,000; · the maximum aggregate grant with respect to awards of restricted stock, restricted stock units, deferred stock units, performance shares or other stock-based awards granted in any one calendar year to any one participant is 50,000 shares; · the aggregate dollar value of any performance-based cash award that may be paid to any one participant during any one calendar year is $2,000,000; and · the aggregate maximum fair market value (measured as of the grant date) of any other awards that may be granted to any one participant (less any consideration paid by the participant for such award) during any one calendar year is $2,000,000. These limits are subject to anti-dilution adjustments in the event of WSFS Bank from mutual to stock form. This conversion occurred in 1986splits, mergers, consolidations, stock dividends, recapitalizations and as such, the restrictions are no longer applicable. The rights of stockholders willsimilar transactions, but may not otherwise be affected by approval of these amendments but we believe that all extraneous provisions should be stricken from our governing documents so that aamended without stockholder can easily understand his or her rights.Board RecommendationTermination and Amendment. recommends a vote in favoror the Personnel and Compensation Committee may amend or terminate the 2005 Incentive Plan, but without stockholder approval, no such amendment may (i) materially increase the benefits accruing to participants, (ii) increase the number of shares available under the plan, (iii) increase any of the amendments to our Restated Certificatelimitations on individual grants under the plan, (iv) expand the types of Incorporation to delete Article Fourth, Paragraph C and Article Sixth, Paragraph (d) in their entirety.Proposal Number 6 – Amendment to Delete Article FifthWe propose to delete Article Fifth in its entirety as it has, by its terms, expired. Article Fifth restricted transfers of common stock or securities issued by the Companyawards that may be deemed stockgranted, (v) expand the class of participants eligible to participate in the plan, (v) extend the term of the plan, or (vi) or otherwise constitute a material29amendment to the plan. No termination or amendment of the plan may adversely affect any award previously granted under the plan without the written consent of the participant.Other ConsiderationsStockholder approval of the material terms of the 2005 Incentive Plan is only one of several requirements under Section 162(m) that must be satisfied for amounts realized under the 2005 Incentive Plan to qualify for the “performance-based” compensation exemption under Section 162(m), and submission of the material terms of the performance goals of the 2005 Incentive Plan for stockholder approval alone does not ensure that all compensation paid under the 2005 Incentive Plan will qualify as tax deductible compensation. Nothing in this proposal precludes us or the Personnel and Compensation Committee from granting awards that do not qualify as tax deductible compensation pursuant to Section 162(m).GeneralThe foregoing description addresses limited aspects of the 2005 Incentive Plan, primarily the material terms of the performance goals, including the list of permissible business criteria for performance objectives, that may apply to a periodgrant of 37 months afterperformance-based awards. Summary descriptions of other provisions of the issuanceplan can be found under “The Proposed Amendments to the 2005 Incentive Plan” above. These descriptions are qualified in their entirety by the Companyfull text of its 10% Convertible Preferred Stock, Series 1. This restriction expired in July, 1997. The rightsthe 2005 Incentive Plan. A copy of stockholders will notthe plan, as amended to date and as proposed to be affected by approvalamended pursuant to Proposal Number 3, is attached as Appendix A to this proxy statement. In addition, the 2005 Incentive Plan is available at the Securities and Exchange Commission’s website at www.sec.gov, where it is an exhibit to the electronic version of this amendment but we believeproxy statement.306. CompensationCompensation Discussion and AnalysisExecutive SummaryOur Personnel and Compensation Committee provides board oversight and guidance with respect to executive compensation and related benefits. The Committee regularly receives reports and recommendations from its independent consultants, Blanchard Chase LLC. The Committee also reviewed the analysis conducted by our Senior Risk Officer (SRO) and concluded that all extraneous provisions should be stricken form our governing documents so thatcompensation program is balanced and does not motivate imprudent risk taking. Our executive compensation program is designed to align the interests of senior management with shareholders by tying a stockholder can easily understand his or her rights.Board RecommendationThe Boardportion of Directors recommends a vote in favortheir compensation to the performance of the amendmentcompany as compared to peers. The following Compensation Discussion and Analysis provides an explanation of our Restated Certificateexecutive compensation programs.2009 – OverviewWhen deciding executive compensation during 2009, the committee anticipated another challenging year. Similar to other community banks throughout the country, we continued to feel the effects of Incorporation to delete Article Fiftha declining economy which manifested itself in its entirety.5.CompensationCompensation Discussion and AnalysisExecutive Summary2008 was the first full year in which Mark A. Turner served as Presidentincreasing credit costs, a declining stock price and CEO. Mr. Turner assumed this position asincreased regulatory requirements.In consideration of the April 2007 Shareholders’ Meeting.Marvin N. Schoenhals, who had been Chairman, President and CEO transitioned to Chairman of the Board. In addition to his full chairman duties, Mr. Schoenhals provides active leadership for our Wealth Management Group through its start-up period and other niche businesses including another start-up business, 1st Reverse Financial Services, LLC, a national reverse mortgage company, of which we hold a majority interest.In early 2009, we participated in the United States Treasury TARP Capital Purchase Program (CPP) and received a capital investment from the U.S. Treasury of $52.6 million. Participation in this program requires certain compensation restrictions oncurrent economic environment, our Named Executive Officers (NEOs) described below.There were also several changesvoluntarily offered to keep their base pay at 2008 levels and give up all perquisites for 2009, the second consecutive year they did so. This was done prior to any determination by the Personnel and Compensation Committee of salary increases, incentives and perquisites. As a result, our Personnel and Compensation Committee awarded no merit increases to our NEOs in 2009, nor did it issue cash bonuses or provide perquisites for the second consecutive year. The only variable compensation plansissued to our NEOs was restricted stock that will not fully vest as long as the Treasury continues to hold an equity investment in 2008 to incorporate pay-for-performance best practices, to remain consistent with our long-term strategy and our high-performanceus through their TARP Capital Purchase Program.Management also modified the calculation of the corporate performance goals and to further align the plans with stockholder interests. Notably, revisions were made toin our Management Incentive PlanProgram (MIP) and. This was done because we believe it would be inappropriate to provide high payments to participants for a sub-par performance year, even it we significantly outperformed our long-term equity plan which are more fully discussed later. In addition, we implemented a “one-time-only” incentive plan for 2008, the payment on which depended on attaining an earnings per share (EPS) target of $4.77. This goal was not achieved and no payments were made under that plan. Details of these plans arepeers. The modification is more fully described later.The dollar value of equity-based awards granted to NEOs has also declined significantly over the past three years, consistent with declines in the general economy, industry and bank performance, as shown in our “Summary Compensation Table” discussion on page 56.31Management has learned from this recessionary cycle and has made adjustments to help deal with the economic realities. During the year, management introduced initiatives designed to fundamentally improve our operating results through a variety of revenue enhancements and cost savings programs. While the benefits of these initiatives began to take effect in late 2009, we expect they will have more of an impact in 2010 and future years.Despite the financial and economic challenges, for the fourth year in a row we were named by Wilmington’s The News Journal as a top five “Best in Business.” In 2009, this independent survey ranked us as the #1 best place to work in the State of Delaware. In addition, independent survey results of our customers continue to score us as “world class” in service and engagement, firmly in the top ten percent of all companies surveyed by Gallup, Inc. We strongly believe we will be a better organization for having gone through, and learned from, this recessionary period.Our long-term focus over the past decade has produced a positive return to our owners. An investment of $100 in WSFS common stock in 2000 would be worth $213 at December 31, 2009. By comparison, $100 invested in the Dow Jones Total Market Index in 2000, would be worth $90 at December 31, 2009 and $100 invested in the Nasdaq Bank Index in 2000 would be worth $107 at December 31, 2009.Outlook for 2010While the economy is beginning to show signs of stabilization in some areas, we believe consumers, businesses and, therefore, our company, will continue to experience challenges in 2010. The Personnel and Compensation Committee evaluated executive compensation for 2010 with a goal of balancing our retention motivation of executive officers with our pay for performance philosophy. As a result of their evaluation, the Committee concluded it would retain the same elements of compensation for 2010 as it did for 2009. The components of executive compensation for 2010 are: base salary, bonus and long-term incentive compensation in the form of restricted stock.As a company, we pride ourselves on setting high, measurable goals, being accountable for achieving those goals and continuinghaving a “pay-for-performance”leading-edge "pay-for-performance" philosophy.Our executive incentive compensation plans (which includes our Management Incentive Plan (MIP),MIP, covering our NEOs), have alwayshave: (i) focused on measures that are traditionally important to shareholders, incorporate(ii) incorporated industry standards, (iii) not promoted inappropriate risk, and are(iv) used fundamental indicators of our performance, growth and health. These measures are Earnings Per Share (EPS) growth, Return on Average Assets (ROA) and Return on Average Equity (ROE). Our formula-based awards calculations start by comparing ourselves to a group of similarly-sized peers (all publicly-traded banks and thrifts of $1 to $5 billion in assets),asset size) and our goals are set high. For example, we only achieve “Target,”"Target," or average awards if we achieve performance at the 60th percentile of that group’s results on all three measures. “Maximum”"Maximum" awards are achieved if we reach the3275th percentile of that group’sgroup's performance. Reaching the 75th percentileon all 3 measures, ROA, ROE and EPS growth, is typically achieved by less than 10%15% of companies in thatthis peer group.In early 2008, asgroup, although in 2009 it was reached by 16% of the economy and industry headed into a difficult period, we further revampedcompanies.According to our executive incentive compensation plans. This was completed after months of analysis, discussion and deliberation with our executive management, our Personnel and Compensation Committee (the Committee) and the Committee’s outside compensation consultants, Amalfi Consulting, LLC. The changes were undertaken toour compensation plans incorporate evolving industry-recognized “best practices” in compensation and to beare consistent with our corporate strategy and long-term goals.Among many changes, we included new, They include leading-edge, pay-for-performance standards that increasingly reward executive management with restricted stock or restricted stock units (RSUs) for superior absolute performance, as indicated by reaching annual ROA tiers of 1.20%, 1.35% and 1.50% (considered high-performing levels in the industry, by historical standards). These RSUs are awarded only ifthese tiers are reached before the end of 2011, and then vest over not less than a four-year time period. Vesting over at least four years means these awards do not inure to the benefit of the NEO immediately, but over at least a four year period of time. Likewise, the cost isof such awards are spread over at least four years.years, with a provision that awards granted to NEOs will not vest fully as long as the Treasury continues to hold an equity investment in us through their Capital Purchase Program. In addition, executives’ standard annual incentives (which are granted based on how our performance compares to our peer group and individual goals) are decreased, pro-rata, to the extent our annual ROA is less than 1.0% (considered an average ROA performance for the industry, by historical standards). So for example, if our ROA was .75% in any year, incentives granted would be only 75% of the normal formulaic amount.In 2008, partly because of a deepening2009, due mostly to an extended economic recession, we recorded an ROA of 50only 2 basis points, an ROE of 7.30%,24 basis points, and EPS of $2.57. These-$0.30. While these were consistent with peer performance, they represented significant declines of 44% to 49% from our 20072008 levels, butand averaged at the 57th44th percentile of our peer group’sgroup's results. In response to this performance and the challenges we face in a deepeningcontinuing recession, the performance plans above dictated and management’s other voluntary actions resulted in, the following impact on executive compensation:1. 1.With an ROA of essentially zero in 2009, there was no grant of short-term or long-term incentive stock and no cash bonuses in accordance with our MIP plan.2. There were noA restoration of merit increases to salarysalaries for NEOs for 2009.3. 2.There are no Company-paid perquisites for the second consecutive year (2008Total compensation showed marked declines from 2008 and 2009). Any perquisites for business development2007 levels, consistent with our industry and community networking are paid out-of-pocket by the executive.3.Restricted stock that vests over at least four years was granted as the only variable compensation in 2009 for 2008 NEO performance. In the past, we have granted a combination of cash incentives and stock option incentives for the variable portion of NEO compensation. Restricted stock awards that vest over an extended period of time put more NEO compensation at risk and further align their long-term interests with those of our stockholders. In 2008, variable compensation awards for 2007 annual performance included cash bonuses and stock options (valued using Black-Scholes) and totaled $802,317 or 35% of the NEO group’s total compensation. In 2009, restricted stock awarded for 2008 annual performance had a grant date fair value of $588,574. When added to their total compensation for 2008, it represented 28% of the NEO group’s other compensation, for a decline of $213,743 or 27%.three changesactions above are: (1) reasonable, (2) consistent with pre-established pay-for-performance plans, and (3) commensurate with our 20082009 results, both in absolute terms, and in comparison to prior years’ results and incentives. Had the ROA modifier not been applied to our incentive plans, we would have computed approximately $625,000 for short-term variable compensation and approximately33$647,000 for long-term variable compensation, for a total of approximately $1,272,000 versus peers for the participants in our MIP plan.Named Executive Officers (NEOs)There was one change, shown below, to our list of NEOs from those reported in our proxy last year’s proxy.year. Due to his retirement in November 2009, Mr. Schoenhals was no longer an executive at the end of the fiscal year. He is listed, however, because he would have been included had it not been for his retirement.Named Executive Officers 2008 2009 Mark A. Turner – President and Chief Executive Officer Mark A. Turner – President and Chief Executive Officer Marvin N. Schoenhals – Chairman of the Board Marvin N. Schoenhals – Chairman of the Board Stephen A. Fowle – Executive Vice President and Chief Financial Officer Stephen A. Fowle – Executive Vice President and Chief Financial Officer Rodger Levenson - Executive Vice President and Director of Commercial Banking Rodger Levenson - Executive Vice President and Director of Commercial Banking Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing Richard M. Wright – Executive Vice President and Director of Retail Banking andMarketing Richard Immesberger – Executive Vice President, Trust and Wealth Management Executive Compensation Restrictions Under TARP GuidelinesOn January 21, 2009, our CEO, CFO and three of our most highly compensated senior executive officers (SEOs) voluntarily executed SEO Waiver Forms and SEO Letter Agreements in connection with our participation in the United States Treasury’s TARP Capital Purchase Program (CPP). By executing these documents, the SEOs waived any claims they may have as individuals against the Treasury as a result of modifications to their existing compensation arrangements that are made or will be made in order to be in compliance with Section 111 of the Emergency Economic Stabilization Act (EESA).Such modifications on executive compensation matters includebased on the provisions of EESA and the ARRA include: (i) ensuring that incentive compensation for the SEOs do not encourage unnecessary and excessive risks that threaten our value; (ii) requiring a “clawback” of any bonus or incentive compensation paid to an SEO based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate;inaccurate, (iii) limiting severance payments to SEOs to the limits under Section 280G of the Internal Revenue Service Code for terminations not related to a change in control transaction and (iv) agreeing we would not deduct for tax purposes executive compensation in excess of $500,000 in a tax year for each SEO.Section 111 of EESA was amended in its entirety with the enactment of the American RecoverySEO; and Reinvestment Act of 2009 (ARRA) on February 17, 2009. In accordance with the provisions of ARRA,(iv) agreeing that no severance payments may be made to the SEOs during34bonus, retention or incentive compensation may be paid to, or accrued for, at least the five most highly compensated employees, except for such compensation in the form of: (i) long-term restricted stock that do not fully vest during the period in which the U.S. Treasury holds its equity investment in us; (ii) has a value not greater than one-third of the total amount of annual compensation of the Associate receiving the stock; and (iii) other terms and conditions as the Treasury Secretary may determine are in the public interest. The Treasury will issue regulations to assist in complying with these new requirements under Section 111 of EESA, as amended by ARRA. The Compensation Committee may find it necessary to make certain modifications to the compensation opportunity for the NEOs after it has analyzed the restrictions and limitations under Section 111 of EESA, as amended, and applicable regulation after issuance.Compensation PhilosophyOur general compensation philosophy remained unchanged from 20072008 to 2008. 2009:· We strive to be competitive in base pay, with salaries targeted at the median of banking peers comparable to our asset size. · We structure our incentive system to provide rewards for performance without creating undue risk. · Our total compensation for expected performance levels is targeted at the median of banking peers comparable to our asset size. We structure our incentive system to provide rewards for performance. Our total compensation at expected performance levels is targeted to the median of our peers. For exceptional performance, we provide total compensation that compares to levels above the 75th percentile of our peers. For exceptional performance, we provide total compensation that compares to levels at or above the 75th percentile of our peers.Our goal is to be a high performing company, andthus we have designed our compensation package toward attracting and retaining quality individuals, and motivating and rewarding them for strong performance.The Role of the Personnel and Compensation Committee of the Board of DirectorsOur Personnel and Compensation Committee (the “Committee”) provides Board oversight and guidance with respect to the CEO and other Executives’ compensation, benefits and perquisites. The Committee’s primary responsibilities are to:· approve and report to the Board salary levels and incentive compensation payable to senior officers and other key Associates; · recommend to the Board the establishment of incentive compensation plans and programs; · recommend to the Board the adoption and administration of certain Associate benefit plans and programs; · approve and report to the Board payment of additional year-end contributions under certain of its retirement plans; · oversee our stock incentive plans; · approve and report to the Board stock incentive awards granted to our key Associates; · annually, review and recommend to the Board performance goals and objectives with respect to the compensation of the Chief Executive Officer consistent with approved compensation plans; further, recommend to the Board compensation levels for the CEO, Advisors to the Board and all Executive Vice Presidents; · engage any compensation consulting firm used by the Company to assist in the evaluation of Director, CEO, Advisors to the Board or senior executive compensation; exercise sole authority to approve the terms and fees relating to such retention; approve and report to the Board salary levels and incentive compensation payable to senior officers and other key Associates;recommend to the Board the establishment of incentive compensation plans and programs;recommend to the Board the adoption and administration of certain Associate benefit plans and programs;approve and report to the Board payment of additional year-end contributions under certain of its retirement plans;· while participating in TARP/CPP, the Committee will ensure proper administration and compliance with TARP/CPP requirements; review and approve related materials (amendments, regulatory correspondence, memos, policies, compliance, certifications, etc.) oversee our stock incentive plans;· in accordance with the requirements of ARRA, review the compensation and corporate governance standards and policies at the Company at least semi-annually to ensure that such executive compensation programs comply with applicable law and regulations and do not provide incentives to the SEOs to take unnecessary and excessive risks that threaten the value of the Company; approve and report to the Board stock incentive awards granted to our key Associates;· perform such other functions as are, from time to time, assigned by the Board. annually, review and recommend to the Board performance goals and objectives with respect to the compensation of the Chairman and Chief Executive Officer consistent with approved compensation plans; Further, recommend to the Board compensation levels for the Chairman, CEO, Advisors to the Board and all Executive Vice Presidents;engage any compensation consulting firm used by the Company to assist in the evaluation of Director, Chairman, CEO, Advisors to the Board or senior executive compensation; exercise sole authority to approve the terms and fees relating to such retention;in accordance with the requirements of ARRA, review the compensation and corporate governance standards and policies at the Company at least semi-annually to ensure that such executive compensation programs comply with applicable law and regulations and do not provide incentives to the SEOs to take unnecessary and excessive risks that threaten the value of the Company;perform such other functions as are, from time to time, assigned by the Board.the executive’s immediate level of responsibility;the experience level of the executive within his or her current discipline;· the executive’s immediate level of responsibility; the executive’s performance for both the current year and prior years;· the experience level of the executive within his or her current discipline; the executive’s potential for future development;· the executive’s performance for both the current year and prior years; the executive’s potential to add to our long-term value;· the executive’s potential for future development; · the executive's potential to add to our long-term value; the potential risks that such compensation programs may pose to the value of the company.· the potential risks that such compensation programs may pose to the value of the company. The Role of Management in Executive CompensationOur CEO provides recommendations for the Committee’s consideration and manages our compensation programs and policies. His activities include:coordinating efforts with the Compensation Committee and the Committee’s independent compensation consultant to obtain competitive market data and industry best practices;based upon data provided by the Compensation Committee, reviewing compensation programs for competitiveness and aligning compensation programs with WSFS’ strategic goals;· coordinating efforts with the Personnel and Compensation Committee and the Committee’s independent compensation consultant to obtain competitive market data and industry best practices; recommending changes on compensation programs to the Compensation Committee, where appropriate;· based upon data provided by the Personnel and Compensation Committee, reviewing compensation programs for competitiveness and aligning compensation programs with WSFS’ strategic goals; · recommending changes on compensation programs to the Personnel and Compensation Committee, where appropriate; recommending pay levels and incentive plan payments for NEOs, except for the CEO and the Chairman.· recommending pay levels and incentive plan payments for NEOs, except for the CEO. The CEO and Chairman excuse themselvesexcuses himself from all Committee discussions of theirhis compensation levels.level. In the past, this has applied to Mr. Schoenhals and Mr. Turner. As a practical matter, these individualshe may discuss the formula by which theirhis incentive compensation is structured, but dodoes not participate in decisions regarding changes to theirhis own compensation.The Role of ConsultantsIn 2008,2009, the Committee contractedworked with Amalfi ConsultingBlanchard Chase LLC, (Amalfi), an independent executive compensation consulting firm specializing in the financial services industry. During the year, Amalfi assisted theThe Committee with the following compensation-related projects: (i) the redesign and modificationsengaged Blanchard Chase to the long-termincentive plan; (ii) analysis of competitiveconduct a market pay data for various non-NEO positions, and (iii) assistance with the preparation of the 2008 Proxy. In addition to the 2008 projects, Amalfi conducted a detailed review and competitive analysis of executive compensation in the fallfourth quarter of 2007 and provided recommendations for improvements to our annual incentive plan. Amalfi consultants report2009. Blanchard Chase reports directly to the Committee. In 2008,Committee and does not provide any non- compensation related services or products to the activities of36Committee or the Bank. The Committee has worked with the same consultant since 2007 under previous firm names (Clark Consulting and Amalfi were a continuation of a prior year’s activities. From time to time,Consulting). The consultant has provided the Committee engages Amalfiwith annual updates on market competitive pay for executives and directors. We discuss our peer group and benchmarking process elsewhere in this Compensation Discussion and Analysis. In addition to perform special projects in connectionexecutive benchmark analyses, Blanchard Chase has assisted us with the executive annual and long term incentive programs, and provided guidance to the Committee on TARP restrictions and compliance. In 2009, the aggregate amount paid to our independent compensation plans. During 2008, no special projects were requested.Peer Groups & BenchmarkingApproximately every three years, the Committee engages an independent consultant to conduct a formal review of our executive compensation program. The most recent comprehensive review was conducted in late 2009 by Blanchard Chase LLC. The Committee requested this review to assess competitive compensation levels for its executives. Although there are certain limitations and restrictions applicable to our compensation programs while we are participating in the Amalfi report completed in 2007. Normally, during years in which no consultant is engaged,Treasury’s TARP program, the Committee informally reviews proxy statements of a sampling of peer group companieswanted to assess base salary levels to determine salary increases for the NEOs, since there were no increases in which to compare our executives’ compensation. Due to the unusual market conditions during 2008 a comparison of executive compensation levels was not conducted in the fall of 2008. The Committee did not change existing base pay levels for executives and focused its efforts on the design and alignment of incentive pay programs with current strategic goals.When benchmarking compensation and setting performance goals for incentive plans, the Committee has used two peer groups:The Compensation Peer Group (“CPG”) provides a targeted assessment of the compensation practices for peer companies. The CPG allows us to compare our compensation to other banks that have similar performance, size and geographic locations and helps us align base compensation, incentives and equity awards with our compensation philosophy.· The Compensation Peer Group (“CPG”) provides a targeted assessment of the compensation practices for peer companies. The CPG allows us to compare our compensation to other banks that have similar performance, size and geographic locations and helps us align base compensation, incentives and equity awards with our compensation philosophy. The Performance Peer Group (“PPG”) provides a national perspective of banks in the $1 to $5 billion asset size. We use the PPG to set appropriate bank-wide financial goals, drawing from the larger national dataset of comparably sized financial institutions.· The Performance Peer Group (“PPG”) provides a broader, national perspective of banks in the $1 to $5 billion asset size. We use the PPG to set appropriate bank-wide financial goals, drawing from the larger national dataset of comparably sized financial institutions. Further details on each of these peer groups are provided below.Compensation Peer Group (“CPG”)TheWe updated our CPG shown belowin December 2009 due to our increased asset size since our last peer group was developed in 2007 based on collaborative discussions among management, the Committee and Amalfi.2007. In addition, some of our previous peers had been acquired, failed or grown as well. The organizations comprising the final CPG provided a dataset of peers comparable to our size, performance and location and met all of the following criteria:· Located within DE, MD, NY, PA, VA, and WV; · Total Assets MRQ (most recent quarter as of 9/30/2009) between $1.9 billion and $7.1 billion. Median total assets were approximately $3.6 billion, reasonably consistent with our own asset size. Located within CT, DE, MD, NJ, NY, PA, VA, and WV;Total Assets MRQ (most recent quarter37Listed below are the companies included in our updated CPG and their assets sizes as of September 30, 2009.6/30/2007) between $1.8 billion and $6 billion. Average total assets were approximately $3 billion;Return on Average Assets (ROA) greater than 0.9%;Return on Average Equity (ROE) greater than 10.00%. Total Assets At September 30, 2009 Company Name Ticker City State ($000) 1 Northwest Bancorp, Inc. (MHC) NWSB Warren PA 7,132,041 2 First Commonwealth Financial Corp. FCF Indiana PA 6,511,439 3 WesBanco, Inc. WSBC Wheeling WV 5,561,091 4 NBT Bancorp Inc. NBTB Norwich NY 5,484,387 5 Harleysville National Corporation HNBC Harleysville PA 5,163,359 6 Beneficial Mutual Bancorp, Inc. (MHC) BNCL Philadelphia PA 4,445,067 7 S&T Bancorp, Inc. STBA Indiana PA 4,208,224 8 Flushing Financial Corporation FFIC Lake Success NY 4,176,796 9 Dime Community Bancshares, Inc. DCOM Brooklyn NY 3,907,743 10 TrustCo Bank Corp NY TRST Glenville NY 3,650,378 11 Sandy Spring Bancorp, Inc. SASR Olney MD 3,632,391 12 TowneBank TOWN Portsmouth VA 3,575,889 13 Tompkins Financial Corporation TMP Ithaca NY 3,088,039 14 Provident New York Bancorp PBNY Montebello NY 3,021,893 15 Virginia Commerce Bancorp, Inc. VCBI Arlington VA 2,734,112 16 City Holding Company CHCO Charleston WV 2,596,236 17 Union Bankshares Corporation UBSH Bowling Green VA 2,583,284 18 Hudson Valley Holding Corp. HUVL Yonkers NY 2,578,790 19 Intervest Bancshares Corporation IBCA New York NY 2,382,170 20 First Community Bancshares, Inc. FCBC Bluefield VA 2,298,341 21 Univest Corporation of Pennsylvania UVSP Souderton PA 2,117,849 22 Bancorp, Inc. TBBK Wilmington DE 2,041,034 23 Parkvale Financial Corporation PVSA Monroeville PA 1,903,314 Average 3,686,690 25th Percentile 2,581,037 50th Percentile 3,575,889 75th Percentile 4,326,646 WSFS Financial Corp. WSFS Wilmington DE 3,573,513 Percentile Rank of WSFS Financial Corp 50% We compared key performance measures to the following peers. The data provided in the table below is as of year-end 2006.Since base pay levels changed during 2008, remained unchanged for 2009 and the benchmarking of pay levels was conducted in late 2007, the Committee focused its efforts on incentive plan design improvements during 2008. The next comprehensive compensation review is scheduled for 2010, with an informal assessment to be conducted during 2009.We created a performance peer group (PPG) consisting of all publicly-traded banks and thrift institutions in a total asset range of $1 billion and $5 billion as reported by SNL Financial.HighlineFI. The top end of the asset range of the PPG for 2008 was increased from $3 billion to2009 is $5 billion to reflect the growth of WSFS from under $3 billion to over $3.4billion in 2008.billion. The PPG was comparable to our average size and performance, with an average ROA of 0.40%-0.80% and an average ROE of 3.93%-12.54% in 2008.2009. The PPG consisted of 209220 organizations throughout the United States. As noted earlier, the Committee used the PPG to set appropriate performance goals for our Management Incentive Plan.38Elements of CompensationIn the following section, we describe the elements of our NEO compensation packages. It includes a discussion of how we determine the amounts for each element, why each element is included in our NEO compensation program, and the actual payments resulting from our pay-for-performance incentive programs.Base SalaryWhy We Provide Base SalariesWe offer base salaries to provide a consistent and stable source of income to our NEOs. Base salaries also serve as a base amount for the determination of our pay-for-performance programs and serve as a significant retention and recruiting tool.How We Determine Base Salary AmountsWe establish base salaries and assess market competitiveness by comparing our executives’ qualifications, experience and responsibilities as well as their individual performance and value, with similar positions at our peers. Additional factors that play a role in setting the final base salary amount for NEOs are as follows:special circumstances related to staffing needs and market situations;· special circumstances related to staffing needs and market situations; levels of compensation provided from other compensation components.· levels of compensation provided from other compensation components. When determining base salary amounts for newly hired NEOs, we incorporate the following additional factors:the prior incumbent’s salary;the successful candidate’s salary history;· the prior incumbent’s salary; any market-based data provided by the external recruiter retained for the search;· the successful candidate’s salary history; · any market-based data provided by the external recruiter retained for the search; the salary requirements of other candidates being considered for the position who have a similar level of experience.· the salary requirements of other candidates being considered for the position who have a similar level of experience. In late 2007,2009, the analysis of base salaries conducted by AmalfiBlanchard Chase determined that our base salaries were comparable toslightly lower than the median base salary of our peers.The table below shows changes to our NEO base salaries. Increases inThere were no increases from 2008 reflected a combination of merit increases and changes to better align our2009 as the NEOs with peer medians as determined in the Amalfi compensation review. Due to the current economic climate, our NEOs have voluntarily relinquished any increases to their base salaries for 2009. In 2010, increases were awarded to recognize: (i) no salary increases having been granted in 2009, (ii) increased workload as a result of the recessionary environment, (iii) increased responsibilities assumed from the retirement of Mr. Schoenhals, and (iv) the aforementioned independent Blanchard Chase compensation review.39Base Salary NAMED EXECUTIVE
OFFICERS2008 2009 2008 to 2009 % increase 2010 2009 to 2010 % increase Mark A. Turner – President and Chief Executive Officer $405,000 $405,000 0% $450,000 11% Marvin N. Schoenhals – Chairman of the Board 463,000 385,83310% - N/A Stephen A. Fowle – Executive Vice President and Chief Financial Officer 210,000 210,000 0% 231,000 10% Rodger Levenson – Executive Vice President and Director of Commercial Banking 235,000 235,000 0% 259,000 10% Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 225,000 225,000 0% 250,000 11% Richard Immesberger – Executive Vice President, Trust and Wealth Management 225,000 225,000 0% 241,000 7% 1Increases effective March 1 2008 based on 2007 performance, exceptMr. Schoenhals’ base salary for Mr. Levenson whose increase was2009 reflects his retirement effective November 1, 2007, and Mr. Wright whose increase2009. His annualized base salary in 2009 was retroactive to January 1, 2008 as a result of his additional duties as Director of Marketing.$463,000.Annual IncentivesOur executives are eligible for an annual award under our Management Incentive Plan (MIP).MIP. We designed the MIP to reward performance based on excellence in performance on key financial metrics as compared to the PPG, defined in thePeer Groups & Benchmarkingsection presented earlier, and each executive’s performance in meeting benchmarks related to the contribution to his or her area of responsibility. The Committee also retains the discretion to increase or decrease the awards under the MIP to take into consideration special performance events or other performance-based circumstances. No annual incentive awards were granted in 2009.In addition to the incentive payments determined under the MIP, the Committee has the discretion to grant other awards to NEOs for extraordinary performance-based achievements. The Board did not exercise this discretion in 2008.Why We Provide Annual IncentivesOur compensation program includes an annual performance-based award. The objective is to compensate executives based on achievement of bank-wide and individual goals related to building franchise value and shareholder value. The award is intended to reward short-term performance, typically annually, in line with our long-term goals and to motivate the executive to achieve outstanding results.How We Determine Annual Incentive AmountsThe structure of our annual incentive plan includes: setting Company goals; setting personal performance goals; weighting the goals; providing incentive opportunities to NEOs; and measuring actual performance and calculating incentive awards.·Setting Company goalsEach year the Committee reviews our metrics and establishes company-wide targets on the chosen metrics. In selecting the metrics, the Committee considers our short-term and long-term business strategy, the current business environment and the interests of the shareholders. The following metrics of our performance were chosen for 20082010 and remain consistent with those selected in 2007.2009.Each was weighted evenly in our 2009 incentive plan.In 2008, the Committee changed the way it compared our performance to peers. In 2007, the Committee used 2006 PPG performance data to set the goals for 2007. For many years, this one-year lag approach had not been an issue because the peer performance had been relatively consistent from year to year. In 2007, and to a lesser extent in 2006, the lag presented difficulties in fairly assessing our performance because of the sharp and notable decline in the economic environment and its impact on bank performance metrics. As a result, payments to our executives significantly decreased for 2007, which were paid in 2008. In an improving environment, the reverse would be true. In response to this weakness, the Committee redesigned theThe plan for 2008 to incorporateincorporates a contemporaneous measurement period that compares our 2008current year performance to the 2008current year performance of our peers. The availability of financial and other performance data is available shortly after the year-end and provides us the ability to assess performance on a real-time, comparable basis. If the economic environment changes during the year, either positively or negatively, a contemporaneous measurement comparison provides a much fairer approach to comparing our performance to peers.Under our 20082009 MIP, the “threshold” level for each goal was set at the 40th percentile of the 20082009 PPG performance; the “target” level for each goal was set at the 60th percentile and the “maximum” level for each goal was set at the 75th percentile. Although the comparison was modified to be contemporaneous, theThe expectation levels remained the same as in prior years.the previous year. Setting the “target” at the 60th percentile of peer performance is a clear reflection of the high performance expectations placed upon our NEOs. In 2008,2009, the achievement of “Maximum” in all three performance criteria was accomplished by only 13%16% of the organizations in the PPG in 2008.PPG. Therefore, on a contemporaneous measurement basis, we continue to expect a “maximum” incentive award will be achieved only if we are anexceptionallyhigh-performing company compared to peers. The tableIn 2009, the PPG ROA performance levels were -0.40% for “threshold,” 0.32% for “target” and 0.63% for “maximum.” Our 2009 ROA performance result was 0.02%, which was between the “threshold” and “target” PPG levels. Additionally, as described41above, our potential payment is modified by the percentage of which our ROA falls below illustrates how the plan is intended to work.1% baseline. As a result of this modifier, our calculation resulted in a payment of zero.2008 Year-End ROAPerformance Peer Group (PPG) ResultsROAThreshold (40th percentile)0.28%Target (60th percentile)0.56%Maximum (75th percentile)0.75%Results(Achieved between Threshold and Target)0.50%Payment with ROA ModifierTarget amount calculated at 50%In prior years, we evaluatedWe evaluate any unusual, one-time items greater than $1$2 million, after tax, and considered adjustments for the purposes of calculating earnings for the MIP. Beginning in 2008, we increased this threshold. Our “quality of earnings” review now takes into considerationevaluates any unusual, itemone-time items greater than $2 million, after tax, that impacts cash equity or earnings.earnings and considers them for adjustments for the purposes of calculating earnings for the MIP. The modification requires consideration in the “quality of earnings” for any unusual items affecting franchise value, but did not necessarily impact earnings (i.e. material deferred revenue or deferred costs, items with no tax impact, and any adjustments directly to equity). Any “quality of earnings” evaluation will be made with a strong bias towards ensuring the impact to reported earnings is not done for the purpose of achieving earnings targets as defined under the annual incentive plan.At the beginning of the year, each NEO who reports to the CEO develops personal performance goals for the year consistent with the budget and strategic plan and submits them to the CEO for review, amendment and approval. Through aan iterative, collaborative effort, these NEOs and CEO agree to the final individual performance goals.In general, personal performance goals are established using four categories: Customer, Associate, Financial and Operational. All or some of the four categories may apply to each NEO depending upon each person’s area of responsibility and its impact on our strategic plan.Under the MIP, the Committee measures the performance of the CEO and Chairman solely on Company-wide goals. However, the Board establishes individual performance expectations in addition to those associated with the MIP for these two NEOs.the CEO. These performance expectations are established by the Committee after a review, discussion andCEO and Chairman.CEO. When annual salary adjustments are being considered, the Committee assesses the NEO performance compared to these performance expectations.TheThe Committee believes the more senior the rank of the executive, the more responsibility that executive has for Company-wide performance. As a result, for the more senior executives, Company-wide performance measurement criteria play a larger role in determining the amount of incentive award the more senior the executive.awards. Personal and business unit performance goals play a larger role in determining the amount of the incentive award for less senior ranked executives. Adjustments in the weighting of goals were made beginning with the 2008 plan year to better align executives with their respective level of authority, decision making and impact on results. The weighting of the bank-wide performance percentage for EVPs was increased to 75% in 2009, reflecting their increased role in strategic matters.42The table below shows the weighting of performance measurement criteria for each NEO.Weighting of Performance Criteria by NEO Named Executive Officer Bank-WidePerformancePersonalPerformanceMark A. Turner – President and Chief Executive Officer 100% 0% Marvin N. Schoenhals – Chairman of the Board N/A N/A Stephen A. Fowle – Executive Vice President and Chief Financial Officer 75% 25% Rodger Levenson – Executive Vice President and Director of Commercial Banking 75% 25% Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 75% 25% Richard Immesberger – Executive Vice President, Trust and Wealth Management 75% 25% MIP awards are calculated using the percentage allocations shown above. For example, the MIP awardsaward for Mr. Turner and Mr. Schoenhals areis based entirely on Company-wide financial performance. Although they havehe has personal performance goals, it is the company metrics that affect theirhis MIP awards.award. The Personnel and Compensation Committee has ultimate discretion in final award payouts to our NEOs.·Providing incentive opportunities to NEOsThe table below shows NEO incentive opportunities under the MIP. When setting MIP goals, the Committee took into consideration the opportunity levels for similar positions within the Compensation Peer Group (CPG) companies along with our philosophy of linking pay to performance. If we meet our performance criteria and the NEOs achieve their personal performance criteria and our ROA is at least 1.0%, we would provide awards as shown in the table. While targetsLevels for the CEOTarget, Threshold and Chairman remainMaximum for all NEOs remained identical to 2007, in 2008 target levels for EVPs were increased by 5%, from 35% to 40%. No changes were made to thresholds or maximum payments for any NEO.levels. The modification of target levels for EVPs was intended to address the increases in responsibilities of theseexecutives. While these changes could have the effect of increasing incentive awards,committee believes that the higher the alignment of performance weightings with corporate goals and the more objectivity that exists in plan administration, should ensurethe more likely that incentive payments will be commensurate with an overall improvement in our performance.43MIP Opportunity as a Percent of Base Salary Named Executive Officer Minimum Target Maximum Mark A. Turner – Presidentand Chief Executive Officer25% 50% 120% Marvin N. Schoenhals – Chairman of the Board N/A N/A N/A Stephen A. Fowle – Executive Vice President and Chief Financial Officer 17.5% 40% 90% Rodger Levenson – Executive Vice President and Director of Commercial Banking 17.5% 40% 90% Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 17.5% 40% 90% Richard Immesberger – Executive Vice President, Trust and Wealth Management 17.5% 40% 90% Timing of MIP Annual Awards and IRS Section 409A RequirementsThe timing of payment of annual awards occurs no later than March 15th of the year following the performance period. This timing provides ample opportunity for the finalization of year-end performance results as well as maintaining compliance with respect to the short-term deferral exception under Section 409A requirements of the Internal Revenue Service code. In addition, we made modifications, where necessary, to all plan documents to be in compliance with Section 409A prior to December 31, 2008.2009.Measuring actual performance and calculating incentive paymentsThe table below shows our 20082009 targeted goals as compared to the 20082009 performance of our Performance Peer Group (PPG). The formula is computed by assigning a value of 1 for Threshold, 2 for Target and 3 for Maximum. Our performance is compared to the MIP goals and a numerical value is interpolated. For example, if our ROA performance was exactly half-way between the Threshold goal (a value of 1) and Target goal (a value of 2), our ROA would receive a score of 1.5.2009 Management Incentive Plan Company Performance Goals and Results 2009 Management Incentive Plan Company Performance Goals and Results Percentile Rank to PPG 2009 Threshold (40th)Target (60th)Max (75th)Actual Results Score -0.40% 0.32% 0.63% 0.02% 1.59 -3.64% 2.51% 6.12% 0.24% 1.63 -81.18% 97.14% 261.81% -111.67% 0.00 Average 1.07 Percentile Rank 44thFor the purposes of our MIP, our Return on Assets was 0.50%0.02% in 2008,2009, which ranked in the 5448th percentile of peers; Our Return on Equity was 7.30%0.24% in 2008,2009, which ranked in the 66h48th percentile; and our growth of Earnings Per Share was -43.50%–111.67% in 2008,2009, which ranked in the 5035thpercentile. On average, these three metrics ranked us in the 5744th percentile.44The MIP awards were based on financial information available to the Personnel and Compensation Committee at the time the recommendation and approval was made.Since 20082009 was a very difficult year for us and for the entire banking industry, all performance measures declined. But, we compared well to 2008 industry performance measures.declined by a significant degree. The total value of awards to NEOs under the MIP was $588,574$0 for 2008.our 2009 performance. This compares to $802,317a value of $587,773 in awards for 2007. As a result, total MIP incentive awards to NEOs were 27% lower forour 2008 than awards granted for 2007.performance paid in 2009. The decline was the result of us not achieving our targets, which was directly related to the economic downturn affecting the financial services industry, particularly in credit costs.Also, NEO achievement of some personal performance goals was impacted by the overall credit downturn in the financial services industry. For example, the deteriorating credit environment required additional provisions for loan losses in 2008.2009. This negatively affected NEO personal performance that was tied to budgeted goals.The CEO reviewed our 20082009 performance and the NEO personal performance levels using the criteria described above. He presentedrecommended the Committee make no incentive recommendations to the Committeeawards or payments based on that review. The table below shows the actual payments approved by the Committee for each NEO under the MIP. The Committeeagreed and did not make any discretionary adjustments to the recommended amounts.1Value is based on a grant date fair value of $23.28 on February 25, 2009 and vest over at least four years.Mr. Wright received a retroactive base salary increase as he acted as a transitional leader for all of 2008 during the time we were conducting a search for an executive to head our marketing department. In January 2009, we decided to end the search and asked Mr. Wright to more permanently assume that responsibility. His 2009 MIP goals will also reflect his additional responsibilities.Limited, One-Time Annual Incentive Opportunity for 2008The modification of the performance period used for the annual incentive plan was undertaken to improve fairness in the original incentive plan design. Along with this modification, the Committee approved a one-time incentive opportunity for all MIP plan participants during 2008. Under this one-time arrangement, an EPS target of $4.77 was set at the beginning of 2008. This target was considered to be an appropriate and reasonably challenging goal in a difficult environment and represented an increase of 5% from 2007 reported EPS. Shares of our stock were to be awarded as payment under this plan. Upon attainment of the target, the CEO and Chairman were to receive 1,030 shares and EVPs were to receive 486 shares. The plan had no threshold and was capped at the specified share amounts. At the end of 2008, the EPS target was not achieved and no shares were awarded under this one-time arrangement.Our equity-based compensation plan is the primary method by which we provide long-term incentives to our executives. In the past, we typically made awards and provided incentives to our NEOs in the form of stock options annually, but other forms of equity compensation were available for award under our plan. In 2008 was the first year in whichand 2009 we provided restricted stock.stock awards.We offer equity awards as a performance incentive to encourage ownership of our Common Stock to our executives and to further align the interests of management with those of our stockholders. Equity awards also provide value by attracting, motivating and retaining executives and provide appropriate and meaningful rewards to NEOs for our long-term success.How We Determine Equity Award LevelsIn March of 2008, the Committee, with Amalfi’s assistance, designed a formal performance-based, long-term incentive plan. The following discussion provides details on the design of theour performance-based, long-term incentive plan, along with award levels for 2008.2009.·Long-Term Incentive (LTI) Plan DesignOur annual restricted stock award program delivers equity awards at the 40th percentile of market levels as long as the minimum level ROA of 1.0% is achieved annually. Restricted stock awards will be reduced in a proportional manner, identical to the methodology used for the annual incentive plan, if the minimum level of ROA is not met in a given year. Restricted stock awarded in 2008 have2009 had a five-year life and a minimum of45a four-year vesting schedule. As a resultBecause of our participation in the TARP, the Treasury requires that full vesting may not occur until their equity interest has been repaid to the Treasury. As a result, the finalfull vesting tranche will occur at the later of the end of the fourth year or the repayment of the Treasury’s equity interest.In addition, under the LTI plan, restricted stock (or performance shares) are granted at the beginning of a four-year performance period, but not actually earned until performance goals are met. In the example presented below, the 2008 and 2009 grant of restricted shares will be earned at the end of 2011 or at an earlier year-end, butonly ifwe achieve certain ROA goals. Once earned, restricted stock awards will then have a minimum four-year vesting period to aid in retention, subject to the Treasury’s vesting restrictions mentioned above.Compensation expense is recognized only when the performance condition is considered probable. If we fail to achieve the ROA performance goals, any compensation expenses associated with the restricted stock awards will be reversed and the awards will not vest.
Three levels of restricted stock awards can be earned based upon ROA performance achievement: Maximum 1, Maximum 2 and Maximum 3. We use a cliff vesting approach so that defined ROA levels must be achieved by the end of 2011 to earn one of these award levels. If performance is below the Maximum 1 level by the end of 2011, the restricted stock award will not be earned during this initial performance period. If, by 2011, we achieve an ROA of 1.50%, the participants will earn the maximum award of restricted stock. If we achieve any of these ROA goals prior to 2011, the awards may be earned in the year in which the ROA goal was met. The table below provides the ROA goals used to determine the vesting of the restricted stock award. The Committee set the ROA goals at historically high-performance levels with the Maximum 1, Maximum 2, and Maximum 3 goals approximately equal to the 70th, 80th, and 90th percentile of the Peer Performance Group’s (PPG’s) 2006 performance results.2011 Goal Maximum 1 ROA Maximum 2 ROA Maximum 3 ROA ROA 1.20% 1.35% 1.50% 46· Award Levels Provided Under the LTI PlanAs noted earlier, we will award annual restricted stock grants (and/or options when available to us) targeting the 40th percentile of peers as long as we maintain an ROA of 1.0%. This award level provides the CEO and Chairman with awards at approximately 40% of base salary and EVPs with awards at approximately 25% of base salary as long as our ROA is greater than 1.0%.Under the multi-year restricted stock awards, both the earnings potential and goal targets are set higher. If we achieve the Maximum 1 level of performance (or 1.20% ROA), the CEO and Chairman will earn approximately 120% of base salary in restricted stock. An EVP will earn approximately 80% of base salary in restricted stock. The two tables below show the award opportunity levels for all NEOs under the new LTI plan. Mr. Schoenhals no longer participates in this long-term incentive plan.Equity Award Opportunity under the Long-Term Incentive PlanThe following table shows theNAMED EXECUTIVE OFFICER Annual Restricted Stock Grant as a % of Base Salary Performance-Based Restricted Stock Grants as a % of Base Salary 1.20%ROA1.35%ROA1.50%ROAMark A. Turner – Presidentand Chief Executive Officer40% 120% 180% 240% Marvin N. Schoenhals – Chairman of the Board N/A N/A N/A N/A Stephen A. Fowle – Executive Vice President and Chief Financial Officer 25% 80% 100% 140% Rodger Levenson – Executive Vice President and Director of Commercial Banking 25% 80% 100% 140% Richard M. Wright – Executive Vice President and Director of Retail Banking and Marketing 25% 80% 100% 140% Richard Immesberger – Executive Vice President, Trust and Wealth Management 25% 80% 100% 140% Based on our performance, there were no restricted stock awards granted in 2008,2009 as incentives under the long-term plan, representing an award opportunity for each NEO, subject to designated performance criteria.Due to the performance vesting provision on the long-term restricted stock awards, the possibility exists that some or none of these restricted stock awards will vest at the end of the designated performance period. Awards vary in size based on performance achievement.plan.47GRANTS OF PLAN-BASED AWARDS1Should the minimum performance fail to be achieved, no awards will vest, participants will receive no shares and no compensation cost will be recognized. At December 31, 2008, the achievement of the performance criteria was not deemed to be probable. As a result no compensation expense was recognized in 2008 for these awards.The Committee has the discretionary authority to approve awards for outstanding performance and other specific events. The Committee did not exercise this discretionary authority in March 2009.Timing and Pricing of Equity AwardsThe Committee now awards restricted stock grants at the February meeting of the Personnel and Compensation Committee. Grants may be recommended during other times of the year for special circumstances, such as the hiring of a new executive, but are subject to Committee approval. The grant date is established when the Committee approves the grant and all key terms have been established. The fair value of our restricted stock awards is set as the market closing price on the day before the Committee meets.Benefits· 401(k) Employer Contribution 401(k) Employer Contributiondollar-for-dollardollar-for-dollar up to IRS limitations. In addition, the Board may authorize a discretionary profit sharing contribution to all eligible Associates reflecting overall financial performance. In 2008,2009, the Board authorized a discretionary contribution equaling 1.5%0.25% of annual compensation for eligible participants. In recent years the amount had beenhas ranged from 1.5% to 2%.Other Deferred Compensation for NEOs· Other Deferred Compensation for NEOs Unlike some members of our peer group, we do not offer SERPs or deferred compensation plans. In consideration of that, the Committee approvedgenerally approves additional restricted stock grants to certain highly compensated executives, including the NEOs, to compensate them for, among other things, contribution limitations to qualified retirement plans imposed by the IRS. In prior years, options were awarded. The supplemental equity awards shown in the table below are in addition to theany equity awards provided in the table above. These supplemental equity awards are formulaic and are not incentive-based.To calculate the supplemental equity awards, we add the deferral shortfall (the maximum deferral without applying the IRS compensation limit, minus the IRS limit for 2008, which was $230,000) to the lost Company contribution opportunity (base salary minus $230,000), and divide the sum by the closing price of our stock as of February 25, 2009. The following table shows the number and value of restricted stock grants used in 2009 to replace the retirement shortfall for each of our NEOs during 2008.4820082009 Supplemental Equity Awards (Formulaic)12,4192,738Richard Immesberger – Executive Vice President, Trust and Wealth Management - 1The grant date fair values of these awards were: For Mr. Turner, $56,625; for Mr. Schoenhals, $64,095; for Mr. Fowle, $16,000; for Mr. Levenson, $20,075; and for Mr. Wright, $10,250.An additional benefit of using equity to provide supplemental retirement benefits to our executives is the resulting increase in stock ownership provided to these key Associates. This further strengthens the alignment of executive goals with the interests of our shareholders and theirthe four-year vesting schedule acts as a retention tool.
Development AllowancePerquisitesPerquisites are granted to NEOs for specific reasons, and are identified either by the Committee or by the CEO and recommended to the Committee. In past years, perquisites have included club memberships, including country clubs, which are provided to assist in business development and to maintain competitiveness of overall compensation. Perquisites have also included benefits such as personal financial consulting.As a result of the challenging economic environment, to reduce overall corporate expenses and set the tone for such spending, the NEOs voluntarily relinquished their annual perquisites for both 2008 and 2009. These benefits couldFor 2010, a renamed and generally reduced development allowance is being provided of up to $20,000 per year for the CEO and up to $10,000 per year for Executive Vice Presidents.Allowable expenses under the Development Allowance Policy include items that would improve the executive’s networking and business development prospects, personal health, time management and general well-being in a way that can reasonably be reinstatedexpected to result in 2010.Unrelated to the above perquisites, executives who are recruited from outside our market may be reimbursed for costs associated with their transitional relocation.Total CompensationThe charts below show the components of total NEO compensation. Consistent with our pay-for-performance philosophy, only a significant portion of their totalour 2009 NEO compensation package is attributable to incentive components. The incentive categories (below) includewas in the full valueform of incentives. 2009 incentives were the result of restricted stock unit awards madeissued in lieu of cash bonuses andearned by NEOs in lieu of stock options. The value of the restricted stock units used in the graphs below, was computed by multiplying the number of units times our closing stock price on day prior to the grant date. Other compensation includes a company match for 401(k) contributions and awards described inOther Deferred Compensation for NEOsabove.2008.Compared to the Compensation Peer Group, the average direct compensation and total compensation of our five NEOs is in line with the 50th percentile (median) and well below the 75th percentile. Although the comparison was initially completed in late 2007, we anticipate, under current market conditions, our competitive standing on executive pay remains similar to the prior year.Employment AgreementsWe do not have employment agreements for our NEOs. There is, however, a formal severance policy which, until the enactment of the American Recovery and Reinvestment Act of 2009 (ARRA), would have provided payments to NEOs if their employment iswas terminated without cause or following a change of control. ARRA, signed into law on February 17, 2009, prohibits severance payments from being made to SEOs during the period in which the Treasury holds an equity interest in participating institutions. As a result, our severance policy has been suspended until we no longer participate in the Treasury’s TARP. Further details concerning Employment Agreements are provided under the“Potential Payments Upon Termination or Change in ControlSection..”Tax Considerations Related to Our Executive CompensationSection 162(m) of the Internal Revenue Code of 1986, as amended (Code Section 162(m)) provides that certain compensation paid in excess of $1 million to the Chief Executive Officer or to any of the other three most highly compensated NEOs of a public company will not be deductible for federal income tax purposes unless such compensation is paid in accordance with one of the listed exceptions described in Code Section 162(m). Generally, we structure our compensation programs so that compensation expense will be tax deductible. The deductibility of some types of compensation payments, however, can depend upon numerous factors, including plan design, the timing of the vesting of compensation awards or the exercise of previously granted rights. Interpretations of, and changes in, applicable tax laws and regulations, as well as other factors beyond our control, also can affect deductibility of certain compensation. As a result of these various factors, and in order that the Committee retains flexibility in awarding compensation, there may be situations when compensation paid will not be tax deductible in accordance with Code Section 162(m). Further, during such period that the U.S. Treasury holds its investment in us under the CPP program, the Section 162(m) limitations are set at $500,000 for the SEOs, and the compensation attributable to restricted stock and other “performance-based” compensation is includable in this $500,000 limitation in accordance with applicable U.S. Treasury regulations.Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (Code Sections 280G and 4999) limit our ability to take a tax deduction for certain compensation that could be paid to NEOs resulting from a change in control transaction affecting us. In the event we pay any “excess parachute payments” as it is defined under Code Section 280G, we would have compensation payments that are not tax deductible and executives would have excise taxes due on the receipt of such “excess parachute payments.” The Committee considers the adverse tax liabilities imposed by Code Sections 280G and 4999, as well as other competitive factors when it structures certain compensation to our NEOs. We do not anticipate that any payments to be made related to a possible future change in control transaction will result in non-deductible payments under Section 280G of the Code; however, the Committee has the authority to approve2008.50See “Restrictions and Limitations applicable to Executive Compensation Restrictionsduring Periods that the United States Treasury Department holds an Equity Investment in our Shareson page 1824 for a discussion of additional tax considerations related to our participation in the Treasury’s CPPCPP.Other Executive Compensation PoliciesThe Board adopted an Ethics Policy, the provisions of which prohibit NEOs from using inside information to buy or sell our securities for a financial gain. To further ensure adherence to this policy, guidelines have been established for company-imposed trading blackout periods. Our outside regulatory counsel and the Chief Financial Officer offer direction to NEOs on compliance with this policy. The policy requires all NEOs to provide an annual certification of their understanding and intent to comply with the policy.Non-Executive Compensation PoliciesThe Personnel and Compensation Committee has reviewed whether any Associate incentive compensation plans create or encourage risks that threaten our safety and soundness. This included consideration of whether or not we are compensating any Associates on short-term results that threaten or ignore long-term value or encourage the manipulation of earnings.In addition to the MIP plan described above, our non-senior executive Associates may be eligible to participate in one or more of the compensation plans described below:Middle Management Incentive Program (MMIP)The two primary components of this plan are our ROA and the Customer Engagement score (CE11). This plan was modified in 2008 to allow for greater discretion in individual awards versus a percentage of salary as determined by the participant’s grade. Managers allocate the MMIP pool to reward their Associates based on merit and individual contributions. The following criteria within the MMIP plan assists in discouraging unnecessary and excessive risk-taking or manipulation of earnings:· An ROA factor reduces the amount of the incentive payouts. If our ROA is less than 1%, there is no score given for that component of the MMIP bonus calculation. · The incentive payouts are capped at 13% of an Associate’s annual salary. · The CE11 factor is determined based upon the results of an independent customer satisfaction survey. This factor is not impacted by our earnings. In addition to the above cash incentive plan, management is also eligible to receive non-cash compensation in the form of stock options. The determination of stock option awards is based upon an ROA modifier and a target award as a percentage of base salary. This allows for incentive compensation to be determined based upon an appropriate balance between both our short-term and long-term performance. Currently, our stock awards have a four-year vesting schedule which further links managers to our long-term success.51Associate Service Bonus PlanThe two primary components of this plan are our ROA and the Customer Engagement score (CE11). Specific payouts are established by management based on reaching specific ROA andCE11 scores. The following criteria assist in discouraging unnecessary and excessive risk-taking or manipulation of earnings:· An ROA factor reduces the amount of incentive payouts. If our ROA is less than 1%, there is no score given for that component of the Associate Service Bonus Plan calculation. · The incentive payouts are capped at $1,500 per Associate. · The CE11 factor is determined based upon the results of an independent customer satisfaction survey. This factor is not impacted by our earnings. Commercial Incentive Plan (CIP)The CIP Plan is designed to provide a performance-based, semi-annual bonus for selected Associates working in our Commercial Lending Division. The objective of the plan is to compensate participants for performance that equals or exceeds goals related to the Commercial Division’s budget. The criteria for payment are based on specific targets set in advance and based on measurable objectives with two components: (1) division performance, and (2) personal/team performance. Division performance measures are established during the annual budgeting process, and are communicated to CIP participants following approval by our Board of Directors at the beginning of the calendar year.Any commercial loan incentive plan will inherently have credit, interest rate and liquidity risk. The CIP includes factors for profitability (i.e., ROA), quantitative factors (i.e., fee income, deposit balances) and referrals. There are several factors, however, that will reduce the incentive payout calculation, such as risk management scores, loan delinquencies, charge-off ratios, and problem loans. These factors help to reduce the risk of encouraging a focus on short-term financial results. In addition, the total CIP payment pool is capped at a maximum of 30% of the aggregate salaries of all participants in the plan. Also, individual incentive payouts are capped depending on the Associate’s position within the Commercial Division. Currently, the maximum individual incentive payouts range between 10% and 65% of a participant’s annual salary. These incentive opportunities were also deemed as competitive and reasonable by our outside compensation consultant.It should be noted that there were no incentive payouts made under the CIP Plan during 2009.Retail Incentive PlanThe Retail Incentive Plan (RIP) includes numerous individual plans for the Retail Banking Division including Associates working in the following departments: Direct Bank, Telephone Customer Service (TCS), and Customer Overdraft Specialist (COS). The primary factors in the incentive calculations are:· Product sales - Sales include deposit and loan originations. While we have concluded there is no inherent risk with incentives on deposit products, the loan component initially has some credit and interest rate risk. These risks are significantly reduced because retail Associates do not underwrite loans. In addition, the incentive criteria are based on both historical and new loan balances originated by each branch office. · Cross-sell and Referrals - These incentive criteria do not impose any significant risk. 52· For participants working in TCS and COS, there are specific metrics related to individual performance and call abandon rates. These criteria do not impose any significant risks to us. Reverse Mortgage Incentive PlanThe primary metric for this plan is new loan originations. This criterion does not have credit risk since the loans are underwritten, funded and purchased by third party. While the reverse mortgage product may have some inherent reputation risk, the metrics for the incentive calculation are not impacted by this risk.Small Business Incentive PlanThe metrics for the Small Business Incentive Plan include: new loan originations, new deposit balances and referrals. There is minimal risk for new deposit and referrals. For the new loan origination metric, potentially, there is some credit and interest rate risk. These risks have largely been mitigated because Small Business Relationship Managers do not underwrite the loans. In addition, the new loan metric has a cost of funds and a fee component, which helps ensure that only profitable loans are paid an incentive.Mortgage Originator Incentive PlanThe primary metric for this plan is new loan originations. This criterion has credit risk, but is mitigated because our mortgage loan originators do not underwrite loans.Item Processing Incentive PlanThis plan rewards individuals for their efforts in processing our daily deposited checks by employing a production incentive. Individual incentive payouts are earned monthly and are based on the participant’s performance in processing the checks rapidly and accurately. These metrics do not have an inherent risk to us.Cash Connect Incentive PlansCash Connect has three primary incentive plans for their Associates. These plans are:· President’s Plan – The Cash Connect President’s Plan is under an evergreen employment contract, that provides for an annual incentive payout, which was signed prior to 2009. This incentive plan is based on net income, return on average assets, a Retail Banking rating and an Internal Audit rating. The Internal Audit rating has an override impact that can significantly produce or eliminate an incentive payout. The payout percentages for meeting the target or maximum thresholds under this plan result in higher incentive payout percentages than that of other of our Executive Vice Presidents which reflects the lower salary and greater risks (and therefore the greater potential rewards) required for this position. The incentive payout under this plan is capped at 120% of Cash Connect President’s annual salary. Our CEO, along with the Personnel and Compensation Committee, approves the final incentive payout under this plan.· Cash Connect Associate Yearly Bonus - This incentive plan is based on five performance metrics: sales quotas and operational integrity measures including: timely processing of cash orders, timely preparation of vault cash and merchant 53invoices, no cash vault settlements outstanding more than thirty days and no cash order differences outstanding more than ninety days. · Sales and Marketing Divisional Performance - There are six components included in this quarterly incentive plan: return on assets, return on equity, pre-tax net income, vault cash growth, outstanding vault cash times total budgeted blended bailment rate and net growth of our branded ATMs. In addition to the above incentive plans, Cash Connect has several other immaterial incentive plans that have minimal incentive payouts.Wealth Management Incentive PlanThis plan creates an incentive for our Associates to generate referrals to our Trust and Wealth Management Division for the purpose of generating trust, investment management and retirement plan business. Referrals must result in closed business that generates fee income from trust, advisory, or the Bank’s 401(k) accounts. Associates are paid 10% of the first year’s fee income over four quarters. This plan was developed to comply with federal, state and regulatory guidelines as a result of the inherent fiduciary risk associated with the plan. It should be noted that the Associates who receive incentives under this plan have no authority to decide whether to accept the fiduciary relationship.WSFS Investment Group (WIG) Incentive PlanThis plan is a compensation structure for our financial advisors to generate new business for WSFS Investment Group. While payment is contingent on the sale of an investment product, the plan does has a provision that if a customer cancels a product (i.e., annuities) within a specified time, the financial advisor’s commission is reduced by the amount the advisor was previously paid for the account. For products sold through Invest Financial Corporation, a suitability review is performed to ensure that the product sold is appropriate for the consumer based upon various factors.Cypress Capital ManagementCypress Capital Management does not have a formal incentive plan. Each year, incentive awards are determined at the discretion of the President of Cypress Capital Management. The incentive payments are based on Cypress Capital Management’s profits and individual Associate performance for the year. Utilization of a formal plan would reduce the subjectivity involved in the calculation of the incentive payments and reduce the risk of possible abuse. The President of Cypress Capital Management has an employment contract under which he is eligible to receive incentive payments. The incentive payments made to participants are reviewed with our management and are not material to our financial statements.54SummaryOur CEO, our Human Capital Management Department and the Personnel and Compensation Committee, with advice from its consultants, have reviewed all components of each NEO’s compensation, including base salary and incentive compensation. We have determined that the compensation packages awarded to our NEOs are consistent with our goals to provide compensation that is competitive with the compensation offered by our peers, to drive our financial performance without undue risk and to align the interests of our NEOs with those of our shareholders.Accordingly, we believe our compensation programs are reasonable, competitive, not excessive and do not encourage our executives or any of our Associates to take unnecessary risks that would threaten the value of our financial institution.Personnel and Compensation Committee ReportThe Committee has reviewed and discussed with management the Compensation Discussion and Analysis to be included in our 20082010 Shareholder Meeting Proxy Statement filed pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Proxy”). Based on the reviews and discussions referred to above, the Committee recommends to the Board that the Compensation Discussion and Analysis referred to above be included in our Proxy.The Personnel and Compensation Committee
certifies that (i) it has reviewed with senior risk officers the SEO compensation plans and has made all reasonable efforts to ensure that these plans do not encourage SEOs to take unnecessary and excessive risks that threaten the our value, (ii) it has reviewed with senior risk officers the Associate compensation plans and has made all reasonable efforts to limit any unnecessary risks these plans pose to us; and (iii) it has reviewed the Associate compensation plans to eliminate any features of these plans that would encourage the manipulation of our reported earnings to enhance the compensation of any Associate.Claibourne D. Smith, PhD, ChairmanLinda C. DrakeDavid E. HollowellThomas P. PrestonPersonnel and Compensation CommitteeClaibourne D. Smith, PhD, Chairman Jennifer W. DavisLinda C. Drake David E. HollowellDennis E. Klima Thomas P. PrestonCompensation of ExecutivesIn accordance with the requirements of the United States Securities and Exchange Commission, which regulates the disclosures made by public companies such as us, the individuals whose compensation is discussed in this section are (1) Mark A. Turner because he served as our Principal Executive Officer during 2008,2009, (2) Stephen A. Fowle because he served as our Principal Financial Officer during 2008,2009, (3) Marvin N. Schoenhals, while he was not serving as an executive at the end of the fiscal year, he would have otherwise have been included, (4) Rodger Levensonand(5)Levenson (5) Richard M. Wright and (6) Richard Immesberger because their total compensation placed them in the group of the three highest paid executives for 20082009 other than the principal executive and principal financial officers. As a group, we also refer to these executives as our Named Executive Officers (NEOs) in this Proxy. The following is information about the compensation of our NEOs.55The information for these executives is organized according to the type of compensation. First, we show overall total compensation, including salaries, bonuses, stock awards, option awards and certain other compensation, such as the matching contribution made to 401(k) plan investments, supplemental compensation, club dues and automobile allowances. Then, we explain in more detail the particular types of compensation these executives have received and could receive if they are terminated.Summary Compensation TableThe following table summarizestables summarize the compensation of each NEO for the years ended December 31, 2009, 2008 2007 and 2006.Included in the disclosure of 2009 “stock awards” in the Summary Compensation Table below, is the aggregate grant date fair value of restricted stock awards granted in 2009 in lieu of cash bonuses earned in 2008 as follows: Mr. Turner, $176,206; Mr. Schoenhals, $201,442; Mr. Fowle, $67,163; Mr. Levenson, $70,701 and Mr. Wright, $72,261.The amount listed under “stock awards” for 2009 in the Summary Compensation Table below also includes the aggregate grant date fair value of restricted stock units granted in 2009 in lieu of benefits earned under other deferred compensation plans for 2008 as follows: Mr. Turner, $35,386; Mr. Schoenhals, $39,390; Mr. Fowle, $15,900; Mr. Levenson, $19,974 and Mr. Wright, $10,197. These awards are formulaic and are not incentive-based. See “Other Deferred Compensation for NEOs” on page 48 for additional information.In 2010, we granted restricted stock units in lieu of benefits earned under other deferred compensation plans for 2009 with an aggregate grant date fair value as follows: Mr. Turner, $52,660; Mr. Schoenhals, $43,263; Mr. Fowle, $15,011; Mr. Levenson, $18,764, Mr. Wright, $11,746 and Mr. Immesberger, $17,238. These awards are formulaic and are not incentive-based. The 2010 awards will be reflected in the Summary Compensation Table for 2010. See “Other Deferred Compensation for NEOs” on page 48 for additional information.We are required by SEC proxy disclosure rules to include stock award values as compensation for the year in which the awards were granted rather than the year in which the executives’ performance is attributable. If the value of such awards were included in the year in which the NEOs performance is attributable, then “total compensation” for such years would be as follows:Name Total Compensation by Year 2009 2008 2007 Mark A. Turner $ 469,910 $ 623,092 $ 733,770 Marvin N. Schoenhals 467,596 715,332 873,425 Stephen A. Fowle 235,539 302,396 356,848 Rodger Levenson 266,014 337,176 403,263 Richard M. Wright 245,665 328,536 310,805 Richard Immesberger 302,245 203,088 - 56We believe the above matching of compensation to the year associated with the NEOs’ actual performance efforts related to stock and stock unit awards more accurately depicts the trend of compensation levels for our NEOs and reinforces our commitment to a philosophy of pay-for performance. The foregoing information is not intended to be a substitute for the Summary Compensation Table, as required by the SEC rules, which is shown below.Summary Compensation TableSalary1($)Bonus($)Stock Awards12($)Option Awards2($)All OtherCompensation3($)Total($)
President and Chief Executive Officer2009200820072006$405,000400,000356,866262,000$00110,000148,000$211,592000$ 88,92880,745112,1600156,190$ 12,25011,500110,71427,420$500,428658,325549,580 411,500733,770
Chairman2009200820072006385,833463,000459,333437,50000135,000236,000240,83200041,994279,541339,77000194,679 38,50011,50084,41368,630516,494958,2871,081,900665,165474,500873,425
Chief Financial Officer2009200820072006210,000207,833196,367186,0000 072,00080,00083,06300042,75134,09335,1910055,782 10,52811,50032,69930,427262,084335,159331,618303,591219,333356,848
Director of Commercial Banking2009200820072006235,000235,000226,25035,0480054,00040,00090,67600058,80937,9941,9070069,728 12,25011,50053,2851,000305,309371,52977,955337,926 246,500403,263
Director of Commercial Banking and Marketing2009200820072006221,669225,000186,716130,7690050,00080,00082,45800043,85925,0528,62109,57862,83912,25011,50011,2500280,359273,018219,390316,377246,078310,805Richard Immesberger,
Trust and Wealth Management200920082007225,00081,923-025,000-00-090,165-60,0076,000-285,007203,088-1Incentive awards1 The amounts shown as salaries in this table may be different from the amounts shown in the form of restricted stock units were awarded in 2009 for 2008 performance. The grant date fair values of these awards were: For Mr. Turner, $233,084; for Mr. Schoenhals, $266,666; for Mr. Fowle,Base Salary table on page 40 because this table represents the amount actually paid during a year and the Base Salary table represents year-end base salary level.$83,551; for Mr. Levenson, $91,167; and for Mr. Wright, $80,431. No similar awards were made for 2007 or 2006 performance.compensation cost recognized by us in connection with options to purchase sharesaggregate fair value of our common stockawards on the date they were granted to the individual, regardless of the year of grant and calculated in accordance with SFAS 123R for financial statement purposes. For more information concerning the assumptions used for these calculations, please see Note 13 to our 2008 Consolidated Financial Statements.33 In 2008,2009, All Other Compensation represents contributions made by us into the 401(k) plans of our NEOs. As a resultFor Mr. Schoenhals, it also includes consulting fees of the challenging economic environment, to reduce overall corporate$26,250 in 2009. For Mr. Immesberger, it also includes $47,757 of relocation expenses and to set the tone(grossed up for such spending, the NEOs voluntarily gave up their annual perquisitestaxes) in 2008 and 2009. These benefits could be reinstated in 2010.57As a result of the challenging economic environment, to reduce overall corporate expenses and to set the tone for such spending, the NEOs voluntarily gave up their annual perquisites in 2008 and 2009. Similar, but reduced benefits were reinstated in 2010.Grants of Restricted StockAs a performance incentive, to encourage ownership of Common Stock and to further align the interests of management and stockholders, the Committee grants restricted stock awards to the CEO and Executive Management.Grant of Plan-Based AwardsUnder our 2005 Incentive Plan, we issued incentive and non-qualified option grants to one NEO in 2008 for performance in 2007. Mr. Wright received a grant of 1,000 stock options on February 27, 2008. The options have an exercise price of $48.95 which is equal to the closing stock price of WSFS Common Stock at the grant date. The grants vest equally over four years and expire on the fifth anniversary of the grant date. This award was made prior to our participation in the Treasury’s TARP and is considered compensation for 2007. The Black-Scholes option-pricing model was used to determine the grant-date fair-value of these options. See Note 13 to our 2008 Consolidated Financial Statements for a detailed discussion of how we value option awards.The number of shares granted to executives under the planour 2005 Incentive Plan is based on a calculation related to the executive’s base salary and may be adjusted by the Committee. The Committee made no awards or adjustments in 2010 for 2009 for 2008 performance. In addition, theThe CEO and executives received restricted stock unit grants to compensate them for, among other things, the limitations imposed by Internal Revenue Service Code on highly compensated executives with regard to tax-qualified defined contribution plans, specifically our 401(k) plan.No options were re-priced, nor were any modifications made to any outstanding option during 2008.Grants of Plan-Based AwardsName GrantDateAll OtherStock Awards:Number of Shares of Stock or Units (#)Grant Date Fair Value of Stock AwardsMark A. Turner 2/25/092/25/097,569 (1)1,520 (2)$ 176,206 (1)35,386 (2)Marvin N. Schoenhals 2/25/092/25/098,653 (1)1,692 (2)201,442 (1)39,390 (2)Stephen A. Fowle 2/25/092/25/092,885 (1)683 (2)67,163 (1)15,900 (2)Rodger Levenson 2/25/092/25/093,037 (1)858 (2)70,701 (1)19,974 (2)Richard M. Wright 2/25/092/25/093,104 (1)438 (2)72,261 (1)10,197 (2)Richard Immesberger - - - (1) Restricted Stock Awards granted in 2009 in lieu of a cash bonus earned in 2008. (2) Restricted Stock Units awarded in 2009 in lieu of benefits earned under other deferred compensation plans. 58Outstanding Equity Awards Value at Fiscal Year-End TableThe following table shows the number and exercise price of all unexercised options held by Named Executive Officers as of December 31, 2008.2009. The awards are listed in order of grant date. The shorter option expiration dates of more recent grants are due to a change in our policy of granting options with a ten-year exercise term to a five-year exercise term. At December 31, 2008, no stock awards had been granted to Named Executive Officers, therefore none are shown in the table.Outstanding Equity Awards at Fiscal Year-EndOption Awards Stock Awards Number of Securities UnderlyingUnexercised Options(#)ExercisableNumber of Securities Underlying Unexercised Options(#)Unexercisable Option Exercise Price($)Option Expiration Date Number of Shares or Units of Stock That Have Not Vested(#)Market Value of Shares or Units of Stock That Have Not Vested($)Mark A. Turner 114,300 1,70021,00010,00012,900 7,700 5,950 8,700 5,137 7,000--------1,713 7,000$10.8114.8817.2017.3533.4043.7058.7563.6765.2053.3911/16/1011/16/1012/19/1102/28/1212/19/1212/18/1312/16/1412/15/1012/13/1112/12/129,109 $235,689 Marvin N. Schoenhals 2 1,1609,20024,98016,80012,650 9,500 13,100 9,975 8,725----- - - 3,3258,725$10.8114.8817.2033.4043.7058.7563.6765.2053.3911/16/1011/16/1012/19/1112/19/1212/18/1312/16/1412/15/1012/13/1112/12/1210,367 268,239 Stephen A. Fowle 32,4003,000 6002,8502,500 600 - 2009502,500$60.0063.6762.7865.2053.3901/03/1512/15/1002/22/1112/13/1112/12/12 3,577 92,552 Rodger Levenson 4 8,362 3,125 2,788 3,125$65.2053.3912/13/1112/12/123,906 101,065 Richard M. Wright 52,175 2,250 500 2,150250725750500 2,150 750$63.2665.2069.0053.3948.9503/27/1112/13/1102/21/1212/12/1202/27/133,548 91,802 Richard Immesberger61,750 -5,2505,180$58.0023.2809/25/1302/25/14- - 59NameOption AwardsNumber of Securities UnderlyingUnexercised Options(#)ExercisableNumber of Securities Underlying Unexercised Options(#)UnexercisableOption Exercise Price($)Option Expiration DateMark A. Turner 114,3001,70021,00010,00012,9007,7004,7606,5253,4253,500------1,1902,1753,42510,500$10.8114.8817.2017.3533.4043.7058.7563.6765.2053.3911/16/1011/16/1012/19/1102/28/1212/19/1212/18/1312/16/1412/15/1012/13/1112/12/12Marvin N. Schoenhals 21,1609,20024,98016,80012,6507,6009,8256,6504,362-----1,9003,2756,65013,088$10.8114.8817.2033.4043.7058.7563.6765.2053.3911/16/1011/16/1012/19/1112/19/1212/18/1312/16/1412/15/1012/13/1112/12/12Stephen A. Fowle 31,8002,2504001,9001,2501,2007504001,9003,750$60.0063.6762.7865.2053.3901/03/1512/15/1002/22/1112/13/1112/12/12Rodger Levenson 45,5751,5625,5754,688$65.2053.3912/13/1112/12/12Richard M. Wright 51,4501,5002501,075-1,4501,5007503,2251,000$63.2665.2069.0053.3948.9503/27/1112/13/1102/21/1212/12/1202/27/1311,190 unvested options expiring on 12/16/14, all 1,190 vest on 12/16/09; of the 2,175 unvested options expiring on 12/15/10, all 2,175 vest on 12/15/09; of the 3,4251,713 unvested options expiring on 12/13/11, 1,712 vest on 12/13/09 and 1,713all vest on 12/13/10; of the 10,5007,000 unvested options expiring on 12/12/12, 3,500 vest on 12/12/09, 3,500 vest on 12/12/10 and 3,500 vest on 12/12/11.1,900 unvested options expiring on 12/16/14, all 1,900 vest on 12/16/09; of the 3,275 unvested options expiring on 12/15/10, all 3,275 vest on 12/15/09; of the 6,6503,325 unvested options expiring on 12/13/11, 3,325 vest on 12/13/09 and 3,325all vest on 12/13/10; of the 13,0888,725 unvested options expiring on 12/12/12, 4,363 vest on 12/12/09, 4,362 vest on 12/12/10 and 4,363 vest on 12/12/11.1,200600 unvested options expiring on 1/3/15, 600 vest on 1/3/09 and 600all vest on 1/3/10; of the 750 unvested options expiring on 12/15/10, all 750 vest on 12/15/09; of the 400200 unvested options expiring on 2/22/11, 200 vest on 2/22/09 and 200all vest on 2/22/10; of the 1,900950 unvested options expiring on 12/13/11, 950 vest on 12/13/09 and 950all vest on 12/13/10; of the 3,7502,500 options expiring on 12/12/12, 1,250 vest on 12/12/09, 1,250 vest on 12/12/10 and 1,250 vest on 12/12/11.5,5752,788 unvested options expiring on 12/13/11, 2,787 vest on 12/13/09 and 2,788all vest on 12/13/10; of the 4,6883,125 unvested options expiring on 12/12/12, 1,563 vest on 12/12/09, 1,562 vest on 12/12/10 and 1,563 vest on 12/12/11.1,450725 unvested options expiring on 3/27/11, 725all vest on 3/27/09 and 725 vest on 3/27/10; of the 1,500 unvested options expiring on 12/13/11, 750 vest on 12/13/09 and 750 vest on 12/13/10; of the 750 unvested options expiring on 2/21/12, 25012/13/11, all vest on 12/13/10; of the 500 unvested options expiring on 2/21/09,12, 250 vest on 2/21/10 and 250 vest on 2/21/11; of the 3,2252,150 unvested options expiring on 12/12/12, 1,075 vest on 12/12/09, 1,075 vest on 12/12/10 and 1,075 vest on 12/12/11; of the 1,000750 unvested options expiring on 2/27/13, 250 vest on 2/27/09, 250 vest on 2/27/10, 250 vest on 2/27/11 and 250 vest on 2/27/12.6 For Mr. Immesberger, of the 5,250 unvested options expiring on 9/25/13, 1,750 vest on 9/25/10, 1,750 vest on 9/25/11 and 1,750 vest on 9/25/12; of the 5,180 unvested options expiring on 2/25/14, 1,295 vest on 2/25/10, 1,295 vest on 2/25/11, 1,295 vest on 2/25/12 and 1,295 on 2/25/13. Exercises of Options and Vesting of Shares During 2008The following table shows the number of2009There were no options exercised by the officersNEOs during the fiscal year ended December 31, 2008. Since no officer received stock awards during 2008, no vesting of stock awards is shown.Mr. Turner exercised options in 2008 that were granted in 1999 and 2000. Mr. Schoenhals exercised options in 2008 that were granted in 2000. The exercises occurred before the enactment of EESA, ARRA or the creation of TARP or CPP.Option Exercises and Stock VestedEmployment Agreements and Severance PolicyNone of our Named Executive Officers are covered by a formal employment agreement. However, we have a severance policy which, until the enactment of the American Recovery and Reinvestment Act of 2009 (ARRA), would have provided for payments to our Chief ExecutiveOfficer and Executive Vice Presidents if their employment was terminated without cause or following our change of control. ARRA, signed into law on February 17, 2009, prohibits severance payments from being made to SEOs during the period in which the Treasury holds an equity interest in participating institutions. As a result, our severance policy has been suspended until the Treasury no longer holds an equity interest in us.When the abovepreviously mentioned policy suspension is lifted, an executive covered by this policy who is terminated without cause is provided a minimum of six months severance and six months of professional level outplacement. If the executive does not find new employment within six months after termination, severance pay and professional outplacement would continue for another six months, or until the executive found employment, whichever occurs first. If the executive finds another job at a lower rate of pay than previously paid by us, then we would make up the difference until the second six-month period ends. Medical and dental benefits would continue at the general Associate rate through the severance period.Change in controlWhen the abovepreviously mentioned policy suspension is lifted, an executive covered by this policy who is terminated without cause within one year following a change in control or who is offered a position that is not within 25 miles of his or her work-site nor at his or her WSFS salary and incentive opportunity immediately before the change in control, would receive 24 months base salary. Twelve months of executive level outplacement would be offered and medical and dental benefits would continue at the general Associate rate through the 24-month period.When the above mentioned policy suspension is lifted, it is not anticipated that any severance payments resulting from a change in control will cause such payments to be non-deductible as an “excess parachute payment” as defined by Internal Revenue Code Sections 280G and 4999. The Committee does retain the authority to approve non-deductible severance payments associated with a change in control on a case-by-case basis.60While he was an officer, Mr. Schoenhals iswas not included in the severance policy and doesdid not have a severance agreement with us.Potential Payments Upon Termination or Change in ControlAs a result of the restrictions imposed by ARRA, there are no payments that executives could potentially receive upon termination of their employment or a change of control at December 31, 2008.Retirement PlansWe do not maintain a tax-qualified non-contributory retirement plan (pension plan). However, we do provide continuation of medical benefits to Associates who retire, should they elect to participate in the benefit. We provide supplemental contributions toward retiree continuing medical coverage costs. For 2008,2009, our contribution towards this supplement was capped at $2,400$2,496 per retiree, but may have been less based on length of service at time of retirement of616. Committees7. Corporate GovernanceDirector IndependenceWe carefully evaluate any circumstances, transactions or relationships that we feel could have an impact on whether the members of our Board of Directors are independent of us or our subsidiaries, including WSFS Bank, and are able to conduct their duties and responsibilities as directors without any personal interests that would interfere or conflict with those duties and responsibilities.Other than Mr. Schoenhals, Mr. Turner and Mr. Morgan, all our directors are independent. Mr. Schoenhals is not an independent director because he was an executive of the Company until November 2009 and currently is compensated as a consultant. Mr. Turner is not an independent director because he is an executive of the Company. Mr. Morgan is not an independent director because, until November 2009, he was also retained to serve as a Special Advisor. More information about Mr. Schoenhals’ and Mr. Morgan’s compensation can be found on page 73.Board Leadership StructureThe leadership of our Board of Directors is comprised of: (i) our Chairman, (ii) our Vice Chairman and Lead Director and (iii) our President and Chief Executive Officer.Marvin N. Schoenhals has been our Chairman of the Board since 1992. He continues in this role because of DirectorsThere are five main committeeshis substantial institutional knowledge, leadership qualities, business acumen and standing in the community. Until his retirement in November 2009, Mr. Schoenhals was also an Executive and full-time Associate. Upon his retirement, Mr. Schoenhals became a consultant to us. A more detailed description of Mr. Schoenhals’ consulting role can be found on page 73.The responsibilities of the Chairman include:· Chairing Board meetings; · Recommending committee memberships; · Assessing effectiveness of Board committees; · Member of Executive Committee and ex officio member of selected other committees; · Chairing Kent County and Sussex County Advisory Boards; · Providing advice and counsel to CEO and executive management. Charles G. Cheleden has been our Vice Chairman since 1992 and our Lead Director since 2004. He is an outside and independent director designated by our Board of Directors:Directors to lead the Executive Committee,Board in fulfilling its duties effectively, efficiently and independent of management.Specifically, the Corporate Governance and Nominating Committee, the Audit Committee, the Personnel and Compensation Committee and the Trust Committee.Executive CommitteeMarvin N. SchoenhalsLead Director is responsible, in cooperation with the Chairman of the Board for certain functions as follows:62Enhance Board Effectiveness:· Ensure the Board works as a cohesive team under his or her leadership; · Ensure the board has adequate resources, especially by way of full, timely and relevant information to support its decision-making requirements; · Ensure a process is in place to monitor legislation and best practices which relate to the responsibilities of the board; · Regularly assess the effectiveness of the Board and its committees; · Ensure that new directors receive adequate orientation on their roles and responsibilities, the Company’s organization, business and the industry; · Meet with Board members to determine their continued commitment to the Board and their interest in continuing to serve on the Board of Directors; · Ensure that Board members receive continuing education both from within the Company and from outside sources; and · Encourage Board members to refer new business opportunities to the Bank. Manage the Board:· Provide input to the CEO on preparation of agendas for Board and committee meetings; · Ensure the effectiveness of Board committees; · Ensure that independent directors have adequate opportunity to meet to discuss issues without management present and provide feedback to management; · Help resolve any conflicts; · Chair Board meetings when Chairman is not in attendance; · Review Board minutes for accuracy; · Conduct or oversee Board self-evaluations; · Ensure delegated committee functions are carried out and report to Board, e.g. CEO performance assessment, CEO and Board succession planning and strategic planning; · Ensure some rotation on committee assignments, especially Chairs; · Exercise authority to call meetings of the independent directors; · Ensure that appropriate committee members have input to the proxy related to their committees; and · Be available, as requested, for consultation and direct communication with major shareholders. Mark A. Turner has been our President and Chief Executive Committee. Officer since 2007.The other membersresponsibilities of the Committee are Charles G. Cheleden, David E. Hollowell, Dennis E. Klima, Calvert A. Morgan, Jr.President and Mark A. Turner. The Committee is required to meet monthly, or more frequently if necessary, and met 33 times during 2008. This Committee exercises the powers of the Board of Directors between meetings of the full Board and its primary activity has been to review those loan applications that need Board approval.Another important part of the Executive Committee’s role is to review and approve transactions with insiders. Under the Bank’s written policy, the Executive Committee reviews and approves all insider loans or lending relationships. Any loan granted to an insider in excess of $500,000 requires pre-approval by the Board of Directors, with the interested party (if a director) abstaining from participating directly or indirectly in the voting. All loans granted to insiders, regardless of the amount, are reported to the Board of Directors.Corporate Governance and Nominating CommitteeCharles G. Cheleden is the Chairman of the Corporate Governance and Nominating Committee. The other members of the Committee are Linda C. Drake, Dennis E. Klima, Thomas P. Preston, Scott E. Reed and Claibourne D. Smith. The Committee met three times during 2008. A copy of the Corporate Governance and Nominating Committee Charter can be found on the investor relations page of our website www.wsfsbank.com (select “Investor Relations” on the menu found under “About WSFS” and click on “Governance Documents”).The Corporate Governance and Nominating Committee does the following:· Having general power over the strategic planning, management and oversight of the administration and operation of the Corporation’s business, and general supervisory power and authority over its policies and affairs; · Ensuring all orders and resolutions of the Board of Directors and any committee are carried into effect; · With Chairman and Lead Director, helping set Board agendas and provides input for committee meeting agendas. Makes recommendations to the full Board of Directors regarding corporate governance guidelines and policies.Assists the Board of Directors in finding individuals who are qualified to serve as directors and provides its recommendations to the full Board of Directors when the Board selects its nominees for each annual meeting.Leads the Board in an annual review of the Board’s performance.Advises the Board on the assignment of the directors to serve on the various committees of the Board.ReviewsOur Director Nomination and approves any transactions that directors or employees (including their family members and members of their households) have with WSFS Financial Corporation and itssubsidiaries, including WSFS Bank. See Review and Approval of Transactions with Insiders below.The Committee solicits recommendations from the officers and directors as well as considers and evaluates any candidates recommended by the shareholders. There is no difference in the manner in which the Committee evaluates persons recommended by directors or officers versus those recommended by stockholders in selecting Board nominees. To date, it has not been our practice to pay fees to any third party to identify, evaluate or assist in identifying or evaluating potential nominees for the Board of Directors.DiversityThe Board desires thattakes a broad and thoughtful view of diversity. It believes its membership should be geographically diverse, therefore, potential directors should enhance the Board’s statewide and regional representation. The Board also desires that its membership reflect not only a diversity of gender and racial diversity withethnicity, but also be inclusive of other factors such as age, religion, national origin, a broad range of experience, knowledge and judgment in a variety of business and professional sectors. The Board desires that its membership also be geographically appropriate and diverse. Potential directors, therefore, may enhance the Board’s statewide and regional representation. As a commitment to this diversification, the Board believes potentialmost directors should be knowledgeable about the business activities and market areas in which we and our subsidiaries engage. A candidate’s breadth of knowledge and experience should also enable that person to make a meaningful contribution to the governance of a complex, multi-billion dollar financial institution.To be considered in the Committee’s selection of Board nominees, recommendations from stockholders must be received by the Corporation in writing not less than 120 days prior to the anniversary date of the mailing date of the proxy statement for the previous year’s annual meeting. Recommendations should identify the stockholder making the recommendation and for each person the stockholder proposes to recommend as a nominee to the Board (1) the name, age, business address of such person; (2) the principal occupation or employment of such person; (3) the Class and number of shares of our Voting Stock (as defined in our Bylaws) which are beneficially owned by such stockholder on the date of such notice; and (4) any other information required to be included in such notice as described in our BylawsBy-Laws or disclosed in solicitations of proxies with respect to nominees for election of directors described in the Securities Exchange Act of 1934.Stock Ownership and Retention GuidelinesOur By-Laws require each of our directors to be a stockholder and own a minimum amount of our common stock as determined from time to time by the Board. This guideline is designed to64encourage our directors to increase and maintain their equity stake in us, and thereby to more closely link their interests with those of our shareholders.In June 2009, the Board established a guideline that each director own 4,000 shares of vested common stock. Members of the board have until June 2014, or five years after assuming his or her position, to accumulate the minimum ownership amount. In addition, the Board established a guideline for executive management such that the CEO should own 35,000 shares of vested common stock and all Executive Vice Presidents own 10,000 shares of vested common stock, each to be accumulated by the later of June 2014 or five years after assuming his or her position.Succession PlanningThe Personnel and Compensation Committee and full Board has reviewed, evaluated and provided governance comments and advice for our Executive Management (including CEO) talent, leadership development and succession planning program, and plans to do so at least annually.Attendance at Board and Committee Meetings, Annual MeetingDuring the year ended December 31, 2009, the Board of Directors held 15 meetings. None of the directors attended less than 75% of the total of: (a) meetings of the Board of Directors and (b) meetings of the committees on which they served during the year. All directors are required to attend the Annual Meeting of Shareholders except for absences due to causes beyond their reasonable control.Transactions with Our InsidersIn the ordinary course of its business as a bank, WSFS Bank makes loans to our directors, officers and Associates. These loans are subject to limitations and restrictions under federal banking laws and regulations and are made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with other persons. These loans do not involve more than the normal risk of collectability or present other unfavorable features to WSFS Bank.Board Role in Risk OversightThe Board of Directors is responsible for the oversight of the management of our risk exposures to prevent or minimize the impact of a financial crisis. The Board is actively involved in the strategic planning process with executive management where there is a comprehensive discussion of our appetite for risk, including a discussion of choices and alternatives. In the end, the Board has concluded that the risk implicit in our strategic plan is appropriate and that expected risks are commensurate with the expected rewards. The Board has also concluded that management has implemented an appropriate system to manage this risk. The risk management system is designed to inform the Board of the material risks and has created an appropriate enterprise-wide culture of risk awareness.Each Board committee has risk oversight responsibilities. In particular, the Audit Committee65Periodic review of the reports issued by management’s Enterprise Risk Management (ERM) Committee. This committee is chaired by our Senior Auditor, who reports directly to the Audit Committee;· Review the annual company risk assessment · Review, with management, the quarterly and annual financial statements including major issues regarding accounting and auditing principles and practices; · Review the adequacy of internal controls; · Review analyses prepared by management and the independent auditor of significant financial reporting issues and judgments made in connection with the preparation of our financial statements; · Periodically review, with management, our major financial risk exposures and the steps management has taken to monitor and control such exposures; · Monitor the independence of the public accounting firm; · Ensure committee members have unrestricted access to the independent accountants to review and discuss financial or other matters; · Review and approve the audit plan of the independent accountants and our internal audit department: · Evaluate the effectiveness of both the internal and external audit effort through regular meetings with each respective group; · Determine that no management restrictions are being placed upon either the internal or external auditors; · Review the adequacy of internal controls and management’s handling of identified Sarbanes-Oxley material inadequacies and reportable conditions in the internal controls over financial reporting, and compliance with laws and regulations; · Evaluate the adequacy of the internal accounting control systems and monitor management’s response and actions to correct any noted deficiencies; · Review reports issued by outside consultants regarding internal control; · Review quarterly reports issued by the Loan Review Department including reports issued by outside consultants regarding such items as risk assessment, credit quality and credit administration; · Establish procedures for the receipt, retention and treatment of complaints regarding accounting, internal control or auditing matters, including procedures for the confidential, anonymous submission by Associates of concerns regarding questionable accounting, internal control or auditing matters; · Ensure that members of the Committee have the expertise required by regulation; · Ensure that the Committee has the authority to engage independent counsel and other advisors, as it determines necessary to carry out its duties; · Review all regulatory reports, including examination reports and SEC comment letters and monitor management’s response; · Review and approve, each year, the Information Data Security Policy. The Chairman of the Audit Committee provides regular reports to the Board of Directors as to the adequacy of our risk management. In addition, senior managers from each of our risk areas provide regular reports to the Board. These areas include: Investments, Accounting, Auditing,66Credit, Human Resource Management, Operations and Technology, Trust and Wealth Management and Retail Operations.In addition, the Personnel and Compensation Committee, which oversees the executive compensation programs, reviews and approves a semi-annual report on executive compensation and Associate incentive compensation plans provided by our risk officers. The purpose of the review is to: (1) determine that senior executive officer compensation plans do not encourage those executive officers to take actions that pose an unnecessary and excessive risk that would threaten the our value, and (2) determine that Associate incentive compensation plans do not unnecessarily expose us to risks or encourage the manipulation of reported earnings to enhance the compensation of Associates. During 2009, the Committee accepted these reports provided by our risk officers which concluded our plans do not expose us to such risks and would unlikely to have a material adverse effect on the company.Board CommitteesThere are five main committees of the Board of Directors: the Executive Committee, the Corporate Governance and Nominating Committee, the Audit Committee, the Personnel and Compensation Committee and the Trust Committee.Executive CommitteeMark A. Turner is the Chairman of the Executive Committee. The other members of the Committee are Charles G. Cheleden, Donald W. Delson, David E. Hollowell, Dennis E. Klima, Calvert A. Morgan, Jr. and Marvin N. Schoenhals. The Committee is required to meet monthly, or more frequently if necessary, and met 30 times during 2009. This Committee exercises the powers of the Board of Directors between meetings of the full Board and its primary activity has been to review those loan applications that need Board approval and review credit quality reports.Another important part of the Executive Committee’s role is to review and approve transactions with insiders. Under the Bank’s written policy, the Executive Committee reviews and approves all insider loans or lending relationships. Any loan granted to an insider in excess of $500,000 requires pre-approval by the Board of Directors, with the interested party (if a director) abstaining from participating directly or indirectly in the voting. All loans granted to insiders, regardless of the amount, are reported to the Board of Directors.Corporate Governance and Nominating CommitteeThomas P. Preston is the Chairman of the Corporate Governance and Nominating Committee. The other members of the Committee are Charles G. Cheleden, Linda C. Drake, Dennis E. Klima, Scott E. Reed and Claibourne D. Smith. The Committee met four times during 2009. A copy of the Corporate Governance and Nominating Committee Charter can be found on the investor relations page of our website www.wsfsbank.com (select “Investor Relations” on the menu found under “About WSFS” and click on “Governance Documents”).The Corporate Governance and Nominating Committee does the following:· Makes recommendations to the full Board of Directors regarding corporate governance guidelines and policies. 67· Assists the Board of Directors in finding individuals who are qualified to serve as directors and provides its recommendations to the full Board of Directors when the Board selects its nominees for each annual meeting. · Leads the Board in an annual review of the Board’s performance. · Advises the Board on the assignment of the directors to serve on the various committees of the Board. Audit CommitteeScott E. Reed is Chairman of the Audit Committee. The other members of the Committee are Jennifer W. Davis, John F. Downey, Joseph R. Julian and Claibourne D. Smith. Mr. Reed has the qualifications to serve as the Committee’s financial expert. Each member of the Audit Committee is “independent” as defined in the listing standards of the Nasdaq Stock Market. The Committee met eight11 times during 2008.2009. A copy of the Audit Committee Charter can be found on the investor relations page of our website www.wsfsbank.com (select “Investor Relations” on the menu found under “About WSFS” and click on “Governance Documents”“Corporate Conduct”).The Audit Committee does the following:The Audit Committee does· Oversees the following:audit program and reviews our consolidated financial statements, including major issues regarding accounting and auditing principles and practices as well as the adequacy of internal controls that could significantly affect our financial statements.· Reviews the examination reports from federal regulatory agencies as well as reports from the internal auditors and from the independent registered public accounting firm. Oversees the audit program and reviews our consolidated financial statements, including major issues regarding accounting and auditing principles and practices as well as the adequacy of internal controls that could significantly affect our financial statements.Reviews the examination reports from federal regulatory agencies as well as reports from the internal auditors and from the independent registered public accounting firm.· Meets quarterly with the internal Loan Review Department as well as the head of the Audit Department and representatives of the independent registered public accounting firm, with and without representatives of management present, to review accounting and auditing matters, and to review financial statements prior to their public release. · Provides oversight to our regulatory compliance activities and our compliance officer who reports directly to our Senior Auditor. · Reviews the annual risk assessment and other reports issued regarding company risk management activities. · Meets annually to review our internal control risk analysis and associated audit plan. · Approves the selection of the independent registered public accounting firm and recommends their appointment to the full Board of Directors. The members of our Audit Committee also serve as members of the Bank’s Trust Audit initiatives.DepartmentCommittee which provides oversight to our Trust and representatives of the independent registered public accounting firm, with and without representatives ofWealth management present, to review accounting and auditing matters, and to review financial statements prior to their public release.Meets annually to review our risk analysis and associated audit plan.Approves the selection of the independent registered public accounting firm and recommends their appointment to the full Board of Directors.service. Under certain circumstances, management is authorizedservice, subject to spend up tothe following operating procedures: Each year in connection with the execution of the audit engagement letter, the Audit Committee pre-approves a retainer for additional services that are either audit or audit-related in nature. These additional services do not exceed 5% of the approved annual audit fee as approvedamount. For any additional audit or audit-related services to be provided by the Audit Committeeindependent registered public accounting firm that were not pre-approved in accordance with this procedure, and for which the Engagement Letter, without obtaining any prior approval. Fees ranging from 5%fees are expected to not exceed 10% of the approved annual audit fee, require the pre-approval of the Chairman of the Audit Committee. Fees thatCommittee can provide pre-approval of the services. For any additional68services where the fees are expected to exceed 10% of the approved annual audit fee, require the pre-approval of the fullentire Audit Committee is required. In addition, a retainer for tax consulting services is pre-approved by the Audit Committee. Any tax consulting services exceeding the retainer amount are approved in accordance with the above procedure. All additional fees paid to the independent registered public accounting firm are reported to the Audit Committee in a timely manner.In connection with the audit of the 20082009 financial statements, we entered into engagement letters with KPMG LLP that set the terms by which KPMG performed services for us. Those agreements are subject to alternative dispute resolution procedures and exclusions of punitive damages.All of the services listed below for 20082009 were approved by the Audit Committee prior to the service being rendered.rendered as described in the operating procedures above. The Audit Committee has determined that the non-audit services performed during 20082009 were compatible with maintaining the independent registered public accounting firm’s independence.Audit Fees.The aggregate fees earned by KPMG LLP for professional services rendered for the audit of our consolidated financial statements and for the review of the consolidated financial statements included in our quarterly reports on Form 10-Q for the fiscal years ended December 31, 2009 and 2008 were $700,800 and 2007 were $737,760 and $646,800,$762,375, respectively.Audit Related Fees.The aggregate fees earned by KPMG LLP for audits of the subsidiaries’ financial statements, due diligence activities on proposed transactions, and research and consultation on financial accounting and reporting matters for the years ended December 31, 2009 and 2008 were $273,185 and 2007 were $44,500, and $48,400, respectively.Tax Fees.The aggregate fees earned by KPMG LLP for professional services rendered for tax compliance, tax advice and tax planning for the years ended December 31, 2009 and 2008 were $39,955 and 2007 were $54,425, and $61,647, respectively.the years ended December 31, 20082009 and 2007,2008, were $0.The Audit Committee has prepared the following report for inclusion in this proxy statement:As part of its ongoing activities, the Audit Committee has:· Reviewed and discussed with management our audited consolidated financial statements for the fiscal year ended December 31, 2009; · Discussed with the independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 61, Communications with Audit Committees, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and · Received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Reviewed and discussed with management our audited consolidated financial statements for the fiscal year ended December 31, 2008;Discussed with the independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 61, Communications with Audit Committees, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T; andReceived the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered accounting firm’s independence, and has discussed with the independent registered public accounting firm their independence.Oversight Board regarding the independent registered accounting firm’s independence, and has discussed with the independent registered public accounting firm their independence. 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.The Audit Committee, comprised of Scott E. Reed, Jennifer W. Davis, John F. Downey, Joseph R. Julian and Claibourne D. Smith, has provided this report.Personnel and Compensation CommitteeClaibourne D. Smith is the Chairman of the Personnel and Compensation Committee. The other members of the Committee are Linda C. Drake, David E. Hollowell, Dennis E. Klima and Thomas P. Preston and Dennis E. Klima.Preston. The Committee met sixfive times during 2008.2009. A copy of the Personnel and Compensation Committee Charter can be found on the investor relations page of our websitewww.wsfsbank.com(select (select “Investor Relations” on the menu found under “About WSFS” and click on “Governance Documents”).The Personnel and Compensation Committee does the following:Oversees the executive compensation programs and recommends to the full Board of Directors for its approval the compensation and benefits of the senior management officers.Approves guidelines for the salary and benefits of other officers and Associates.· Oversees the executive compensation programs and recommends to the full Board of Directors for its approval the compensation and benefits of the senior management officers. · Approves guidelines for the salary and benefits of other officers and Associates. Oversees the administration of option plans and incentive plans and makes recommendations to the Board of Directors for awards under such plans.· Oversees the administration of option plans and incentive plans and makes recommendations to the Board of Directors for awards under such plans. · Annually reviews the CEO and Executive Management succession plans and makes recommendations to the Board of Directors for approval of such plans. Compensation Committee Interlocks and Insider ParticipationNo member of our Personnel and Compensation Committee is, or formerly was, an officer or Associate of ours. During 2008,2009, none of our executive officers served on the Personnel and Compensation Committee (or equivalent), or the Board of Directors, of another entity whose executive officer or officers served on our Personnel and Compensation Committee or Board.The Trust Committee is comprised of members of both the WSFS Bank Board and of management. It provides oversight to Wilmington Advisors,Trust and Wealth Management, the trust division of the Bank. Calvert A. Morgan, Jr. is the Chairman and the other members of the Committee are Charles G. Cheleden, Donald W. Delson, Linda C. Drake, Scott E. Reed, Marvin N. Schoenhals and Mark A. Turner. The Committee met four times during 2008.2009. A copy of the Trust Committee Charter can be found on the investor relations page of our websitewww.wsfsbank.com(select (select “Investor Relations” on the menu found under “About WSFS” and click on “Governance Documents”).The Trust Committee does the following:· Oversees the Trust and Wealth Management Division in providing trust administration and investment management services; Oversees Wilmington Advisors in providing trust administration and investment management services;Adopts appropriate policies and procedures to be observed in offering such services;Enforces sound risk management practices calculated to minimize risk of loss to the Bank and its customers; and· Adopts appropriate policies and procedures to be observed in offering such services; · Ensures compliance with regulations; · Ensures sound risk management practices as it applies to trust and investment management activities; and · Reports to the Board on the activity of the Trust and Wealth Management Division in the conduct of its business. Reports to the Board on the activity of Wilmington Advisors in the conduct of its business.Stock Ownership and Retention GuidelinesOur By-Laws require that each of our directors be a stockholder and own a minimum amount of our common stock as determined from time to time by the Board. The Board has established a guideline that the minimum amount of stock owned, plus retention of stock grants should be approximately 2,200 shares after three years of directorship. This guideline is under review and is expected to increase.This guideline is designed to encourage our directors to increase and maintain their equity stake in us, and thereby to more closely link their interests with those of our shareholders.7.8. Compensation of the Board of DirectorsOur non-Associate directors received the following base compensation for 2008:2009 totaling approximately $70,000 as follows:An annual retainer of $23,334, paid in cash,600 shares of WSFS Financial Corporation common stock.· An annual retainer of $46,667, paid in cash, · 1,000 shares of WSFS Financial Corporation common stock. 1,110 options to purchase shares of WSFS Financial Corporation common stock under our 2005 Incentive Plan.During the year ended December 31, 2008, the Board of Directors held eight meetings. None of the directors attended less than 75% of the total of: (a) meetings of the Board of Directors and (b) meetings of the committees on which they served during the year. We pay a fee for committee service, and during 2008,2009, each director received $650 for each committee meeting attended. Directors do not receive a fee for regularly scheduled meetings of the Board of Directors, but receive a fee of $750$650 for special meetings of the Board. Directors who served on the Audit Committee each received an additional annual retainer of $10,000 during 2008.Directors who chaired board committees during 20082009 received an additional annual retainer. The Audit Committee chair received $5,000, the Corporate Governance and Nominating Committee chair received $3,000, the Personnel and Compensation Committee chair received $3,000$5,000 and the Trust Committee chair received $3,000.At Mr. Weschler’s request, and in accordance with his company’s policies, the Board has excluded him from receiving compensation as a director.Director Compensation TableThe compensation paid to directors during 20082009 is summarized in the following table. The assumptions used in valuing the stock and option awards are detailed in Note 13 to the consolidated financial statements contained in our 20082009 Annual Report. Mr. Schoenhals and Mr. Turner areis not shown in this table because they arehe was compensated as officersan officer and dodid not receive any director compensation. Ms. Davis and Mr. Delson are not shownSchoenhals received board fees after his retirement as an officer in this table because they were not appointed untilNovember 2009. DirectorsFeesEarned or Paid in Cash StockAwards1 OptionAwards AllOtherCompensation Total Marvin N. Schoenhals2$26,250 $ 0 - $26,250 $ 52,500 Charles G. Cheleden 89,317 23,399 - - 112,716 Jennifer W. Davis 57,890 21,544 - 79,434 Donald W. Delson 55,773 21,544 - 77,317 John F. Downey 69,417 23,399 - - 92,816 Linda C. Drake 57,817 23,399 - - 81,216 David E. Hollowell 67,017 23,399 - - 90,416 Joseph R. Julian 68,767 23,399 - - 92,166 Dennis E. Klima 73,067 23,399 - - 96,466 Calvert A. Morgan, Jr.3 74,617 23,399 - 125,833 223,849 Thomas P. Preston 59,417 23,399 - - 82,816 Scott E. Reed 79,617 23,399 - - 103,016 Claibourne D. Smith 80,267 23,399 - - 103,666 R. Ted Weschler4- - - - - 721grant dateaggregate fair value of each director’s 2008 equitythe award was $23.10. Amounts shownon the date of grant, computed in this column represent compensation expense.2 Mr. Schoenhals’ Other Compensation is for consulting services. Prior to his retirement, he was also paid a salary as an executive through October 2009. See our “Summary Compensation Table” on 57.Mr.3 Mr. Morgan’s Other Compensation includes $114,167$95,833 for consulting services, $29,000$25,000 for an incentive bonus and $6,000$5,000 for an expense allowance.4 At Mr. Weschler’s request, and in accordance with Peninsula’s policies, he is excluded from receiving compensation as a Director.Compensation of Mr.Cheleden as the Lead DirectorThe Lead Director is an outside and independent director designated by our Board of Directors to lead the Board in fulfilling its duties effectively, efficiently and independent of management. Charles G. Cheleden currently serves as our Lead Director, and during 2008,Director. During 2009, he was compensated $1,500 per month for serving in that role in addition to his other compensation as a director.The responsibilitiesCompensation of Mr. Schoenhals as ConsultantMarvin N. Schoenhals is our Chairman of the Lead Director include:Enhancing Board effectiveness by ensuringBoard. In November 2009, Mr. Schoenhals retired as an executive of the Board has adequate trainingcompany. Because of his substantial institutional knowledge, leadership qualities, business acumen and resources to carry out its duties.Managingstanding in the Board by:oproviding input on Board and committee meeting agendas;oconsulting with the Chairman on effectiveness of Board committees;oensuring that the Board has adequate opportunities to discuss issues without management’s presence;ochairing Board meetings in the absence of the Chairman;oensuring that committee functions are carried out and reported to the Board;ocalling meetings of the independent directors as necessary;omeeting with each board member annually to discuss their interest in continuing to serve on the Board;oidentifying possible candidates for retirement from the Board, and with the approval of the Board, coordinating retirement plans with exiting Board members.Acting as a liaison betweencommunity, the Board of Directors managementengaged him to serve as a consultant beginning in November 2009. In this new role, he continues to be involved in business development, networking and major stockholders. This includes communicating to management, as appropriate, to discusscommunity relations. He also coordinates the resultsactivities of private discussions among independent directors to resolve conflictsour advisory boards and beingis available for consultationAssociate mentoring. As a consultant, Mr. Schoenhals receives an annual base consulting fee of $157,500. As Chairman, he receives a retainer of $157,500, is eligible for equity awards, but will not receive meeting fees.From January through October 2009, Mr. Schoenhals received a base salary of $385,833. In November and direct communication with major shareholders.December 2009, Mr. Schoenhals received consulting fees of $26,250 and a board retainer of $26,250.Compensation of Mr. Morgan as Special AdvisorCalvert A. Morgan, Jr. is a member of our Board of Directors and servesDirectors. Until November 2009, he also served in a consulting capacity as Special Advisor. In this role, Mr. Morgan performs such duties as requested by the Board and the Chairman to assist in improving corporate performance. He is compensated for his services as Special Advisor in addition to his other compensation as a director. but has since retired from that activity.During 2008,2009, Mr. Morgan received an annuala base consulting fee of $115,000,$95,833, with the opportunity to earn a supplemental payment ranging from 0%of up to 100% of the base fee. The precise amount of thea supplemental payment is determined at the discretion of the Personnel and Compensation Committee, based on our results for the year, loan and deposit growth, and the Committee’s subjective assessment of Mr. Morgan’s overall contribution to those results. Consistent with incentives paid to our Executives, Mr. Morgan earned no supplemental payment for 2009. Mr. Morgan earned a supplemental payment of $25,000 for 2008, which was paid in 2009 and received a supplemental payment of $29,000 for 2007 paid during 2008. As part of the terms of his consulting engagement with us, Mr. Morgan is also entitledcontinues to a separation paymentreceive the standard Board of up to $22,000, based on the length of his engagement.Director retainer and committee attendance fees.738. 9. Other InformationLarge StockholdersStockholders who own 5% or more of the outstanding common stock of a publicly traded company are required to report that information to the Securities and Exchange Commission (the SEC). The following table lists the stockholder who has reported to the SEC that they own 5% or more of our outstanding Common Stock. The number of shares is the number most recently reported to the SEC by the stockholder. The percentage is based on the number of shares of our Common Stock outstanding as of March 5, 2009,11, 2010, the record date set for the 20092010 Annual Meeting of Stockholders.Name and Address of OwnerNumber ofShares1Barclays Global Investors, NA.245 Freemont StreetNaples, FL 34108367,653 shares5.96%The Vanguard Group, Inc.3Peninsula Capital Advisors LLC.2100 Vanguard BoulevardMalvern, PA 19355404B East Main StreetCharlottesville, VA 22902311,0341,629,310 shares5.05%22.58%BlackRock, Inc.340 East 52nd StreetNew York, NY 10022475,333 shares 6.71% 1In accordance with Rule 13d-3 under the Exchange Act, for the purposes of this table, a person is deemed to be the beneficial owner of any shares of Common Stock if he or she has or shares voting and/or investment power with respect to such Common Stock or has a right to acquire beneficial ownership at any time within 60 days from the Record Date. As used herein, “voting power”"voting power" is the power to vote or direct the voting of shares and “investment power”"investment power" is the power to dispose or direct the disposition of shares. Except as otherwise noted, ownership is direct, and the named individuals and groups exercise sole voting and investment power over the shares of the Common Stock.2 According to the Statement on Form 4 by R. Ted Weschler, Peninsula Capital Advisors, LLC and Peninsula Capital Appreciation, LLC on December 28, 2009. Shares include right to acquire beneficial ownership of 129,310 shares through the exercise of warrants.3 According to the Statement on Schedule 13G of Barclays Global Investors, NA filedBlackRock, Inc. on February 6, 2009.January 29, 2010.3 According74APPENDIX AAs approved by Shareholders on April 28, 2005 and amended by the Committee on December 31, 2008.Draft dated March 12, 2010, to the Statement on Schedule 13Gshow proposed 2010 amendmentsAMENDED AND RESTATED WSFS FINANCIAL CORPORATION2005 INCENTIVE PLANA-1A-1. AMENDED AND RESTATED WSFS FINANCIAL CORPORATION2005 Incentive PLANTable of The Vanguard Group, Inc. filed on February 13, 2009.ContentsA-2ARTICLE I PURPOSE5 1.1 General5 ARTICLE 2 DEFINITIONS5 2.1 Definitions5 ARTICLE 3 EFFECTIVE TERM OF PLAN10 3.1 Effective Date10 3.2 Term of plan10 ARTICLE 4 ADMINISTRATION10 4.1 Committee10 4.2 Actions and Interpretations by the Committee10 4.3 Authority of Committee11 ARTICLE 5 SHARES SUBJECT TO THE PLAN12 5.1 Number of Shares12 5.2 Share Counting12 5.3 Stock Distributed12 5.4 Limitations on Awards12 ARTICLE 6 Eligibility12 6.1 General12 ARTICLE 7 STOCK OPTIONS12 7.1 General12 7.2 Incentive Stock Options13 ARTICLE 8 STOCK APPRECIATION AWARDS14 8.1 Grant of Stock Appreciation Awards14 ARTICLE 9 PERFORMANCE AWARDS15 9.1 Grant of Performance Awards15 9.2 Performance Goals15 9.3 Right to Payment15 9.4 Other Terms15 ARTICLE 10 RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS15 10.1 Grant of Restricted Stock and Restricted Stock Units16 10.2 Issuance and Restriction16 10.3 Forfeiture16 10.4 Delivery of Restricted Stock16 ARTICLE 11 DEFERRED STOCK UNITS16 11.1 Grant of Deferred Stock Units16 ARTICLE 12 DIVIDEND EQUIVALENTS16 12.1 Grant of Dividend Equivalents16 ARTICLE 13 STOCK OR OTHER STOCK-BASED AWARDS16 13.1 Grant of Stock or Other Stock-Based Awards16 ARTICLE 14 PROVISIONS APPLICABLE TO AWARDS17 14.1 Award Certificates17 14.2 Term of Awards17 14.3 Form of Payment of Awards17 14.4 Limits on Transfer17 14.5 Beneficiaries17 14.6 Stock Trading Restrictions17 14.7 Acceleration upon Death or Disability17 14.8 Acceleration upon Retirement17 14.9 Acceleration upon a Change in Control17 14.10 Acceleration for Any Other Reason17 14.11 Effect of Acceleration19 14.12 Qualified Performance-Based Awards19 14.13 Termination of Employment20 14.14 Forfeiture Events21 ARTICLE 15 CHANGES IN CAPITAL STRUCTURE21 15.1 Mandatory Adjustments21 15.2 Discretionary Adjustments21 15.3 General21 ARTICLE 16 AMENDMENT, MODIFICATION AND TERMINATION21 16.1 Amendments, Modification and Termination21 16.2 Awards Previously Granted22 ARTICLE 17 GENERAL PROVISIONS22 17.1 No Rights to Awards; Non-Uniform Determinations22 17.2 No Stockholder Rights22 17.3 Withholding22 17.4 No Right to Continued Service23 17.5 Unfunded Status of Awards23 17.6 Relationship to Other Benefits23 A-317.7 Expenses23 17.8 Titles and Headings23 17.9 Gender and Number23 17.10 Fractional Shares23 17.11 Government and Other Regulation23 17.12 Governing Law24 17.13 Additional Provisions24 17.14 No Limitations on Rights of Company24 17.15 Indemnification24 17.16 Special Provisions Related to Section 409A of the Code24 A-4AMENDED AND RESTATED WSFS FINANCIAL CORPORATION2005 INCENTIVE PLANARTICLE 1PURPOSEAPPENDIX A1.1. GENERALSet forth below is the text. The purpose of the Amended and Restated Certificate of IncorporationWSFS Financial Corporation 2005 Incentive Plan (the “Plan”) is to promote the success, and enhance the value, of WSFS Financial Corporation as amended through(the “Company”), by linking the datepersonal interests of this Proxy Statement. We have struck through the text that would be deleted if Proposals 5, 6Associates, officers and 7 are approved.RESTATED CERTIFICATE OF INCORPORATIONOFWSFS FINANCIAL CORPORATIONWSFS Financial Corporation, a corporation organized and existing under the lawsdirectors of the StateCompany or any Affiliate (as defined below) to those of Delaware (the “Corporation”), hereby certifies as follows:1.Company stockholders and by providing such persons with an incentive for outstanding performance. The namePlan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Associates, officers and directors upon whose judgment, interest, and special effort the successful conduct of the CorporationCompany’s operation is WSFS Financial Corporation. The Corporation was originally incorporated underlargely dependent. Accordingly, the name Star States Corporation, andPlan permits the original Certificategrant of Incorporation of the Corporation was filed with the Secretary of the State of Delaware on March 31, 1988.2. This Restated Certificate of Incorporation was duly adopted by the Board of Directors in accordance with Section 245 of the General Corporation Law of the State of Delaware. The Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as heretofore amended or supplemented, and there is no discrepancy between those provisions and the provisions of the Restated Certificate of Incorporation, except for the Restated Certificate’s omission of the provision of the original Certificate of Incorporation that named the incorporator.3.The effective date of this Restated Certificate of Incorporation is May 31, 1993.4.The Certificate of Incorporation of the Corporation is hereby restated as follows:FIRST: The name of the corporation is WSFS Financial Corporation (hereinafter sometimes referred to as the “Corporation”).SECOND: The address of the registered office of the Corporation in the State of Delaware is 838 North Market Street, in the city of Wilmington, County of New Castle. The Corporation shall be its own registered agent at that address.THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law.FOURTH:A. The total number of shares of all classes of stock which the Corporation shall have authority to issue is twenty-seven million five hundred thousand (27,500,000), consisting of(a) seven million five hundred thousand (7,500,000) shares of Preferred Stock, par value one cent ($.01) per share (the “Preferred Stock”); and(b) twenty million (20,000,000) shares of Common Stock, par value one cent ($.01) per share (the “Common Stock”).Except for shares issued in connection with the merger of New Federal Savings and Loan Association, FSB with and into Wilmington Savings Fund Society, FSB, no shares of capital stock of any class or series (including shares issuable upon conversion, exchange, or exercise of other securities) shall be issued, directly or indirectly, to officers, directors, or controlling persons of the Corporation other than as part of a general public offering or as qualifying shares to a director, unless their issuance or the plan under which they would be issued has been approved by a vote of the holders of a majority of the total votes eligible to be cast at a meeting of stockholders.B. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware (such certificate being hereinafter referred to as a “Preferred Stock Designation”), to establishincentive awards from time to time the number of shares to be included in each such series,selected Associates, officers and to fix the designation, powers, preferences, and rightsdirectors of the shares of each such seriesCompany and any qualifications, limitationsits Affiliates.ARTICLE 2DEFINITIONS2.1. DEFINITIONS. When a word or restrictions thereof. The number of authorized shares of Preferred Stock mayphrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be increasedgiven the meaning ascribed to it in this Section or decreased (but not below the number of shares thereof then outstanding)in Section 1.1 unless a clearly different meaning is required by the affirmative vote ofcontext. The following words and phrases shall have the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock,following meanings:(a) “Affiliate” means (i) any Subsidiary or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.C.1. For a period of five (5) years from the date of the conversion of Wilmington Savings Fund Society, FSB, to a capital stock savings bank, notwithstanding any other provision of this Certificate of Incorporation, in no event shall any record owner of any outstanding Common Stock which is beneficially owned, directlyParent, or indirectly, by a person who, as of any record date for the determination of stockholders entitled to vote on any matter, beneficially owns in excess of ten percent (10%) of the then-outstanding shares of Common Stock (the “Limit”), be entitled, or permitted to any vote in respect of the shares held in excess of the Limit. The number of votes which may be cast by any record owner by virtue of the provisions hereof in respect of Common Stock beneficially owned by such person owning shares in excess of the Limit shall be a number equal to the total number of votes which a single record owner of all Common stock owned by such person would be entitled to cast, multiplied by a fraction, the numerator of which is the number of shares of such class or series beneficially owned by such person and owned of record by such record owner and the denominator of which is the total number of shares of Common Stock beneficially owned by such person owning shares in excess of the Limit.2.The following definitions shall apply to this Section C of this Article FOURTH:(a) An “affiliate” of a specified person shall mean a person(ii) an entity that directly or indirectly through one or more intermediaries controls, or is controlled by or is under common control with, the Company, as determined by the Committee. The term Affiliate shall include the Bank.(b) “Associate” means any person specified.employed by the Company, the Bank or an Affiliate.(b)A person shall be a “beneficial owner” of any Common Stock:(1)(c) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Deferred Stock Unit Award, Performance Award, Dividend Equivalent Award, or Other Stock-Based Award, Performance-Based Cash Awards, or any other right or interest relating to Stock or cash, granted to a Participant under the Plan.(d) “Award Certificate” means a written document, in such form as the Committee prescribes from time to time, setting forth the terms and conditions of an Award. Award Certificates may be in the form of individual award agreements or certificates or a program document describing the terms and provisions of an Awards or series of Awards under the Plan.(e) “Bank” means Wilmington Savings Fund Society, Federal Savings Bank.(f) “Board” means the Board of Directors of the Company.(g) “Cause” as a reason for a Participant’s termination of employment shall have the meaning assigned such term in the employment, severance or similar agreement, if any, between such Participant and the Company or an Affiliate, provided, however that if there is no such employment, severance or similar agreement in which such person orterm is defined, and unless otherwise defined in the applicable Award Certificate, “Cause” shall mean any of its affiliates beneficially owns, directlythe following acts by the Participant, as determined by the Board: personal dishonesty, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, prolonged absence from duty without the consent of the Company, intentionally engaging in any activity that is in conflict with or indirectly, withinadverse to the meaningbusiness or other interests of the Company, or willful misconduct, misfeasance or malfeasance of duty which is reasonably determined by the Board to be detrimental to the Company.A-5(h) “Change in Control” means and includes the occurrence of any one of the following events:(i) individuals who, on the Effective Date, constitute the Board of Directors of the Company (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board, provided that any person becoming a director after the Effective Date and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or(ii) any person becomes a “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of either (A) 25% or more of the then-outstanding shares of common stock of the Company (“Company Common Stock”) or (B) securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of directors (the “Company Voting Securities”); provided, however, that for purposes of this subsection (ii), the following acquisitions of Company Common Stock or Company Voting Securities Exchange Actshall not constitute a Change in Control: (w) an acquisition directly from the Company, (x) an acquisition by the Company or a Subsidiary of 1934, as in effect on January 1, 1988;the Company, (y) an acquisition by any employee benefit plan (or related trust) sponsored or(2) which such person maintained by the Company or any Subsidiary of its affiliates has (i) the right to acquire (whether such right is exercisable immediatelyCompany, or only after the passageof time),(z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or(iii) the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or a Subsidiary (a “Reorganization”), or the sale or other disposition of all or substantially all of the Company’s assets (a “Sale”) or the acquisition of assets or stock of another corporation (an “Acquisition”), unless immediately following such Reorganization, Sale or Acquisition: (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company Common Stock and outstanding Company Voting Securities immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Reorganization, Sale or Acquisition (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Corporation”) in substantially the same proportions as their ownership, immediately prior to such Reorganization, Sale or Acquisition, of the outstanding Company Common Stock and the outstanding Company Voting Securities, as the case may be, and (B) no person (other than (x) the Company or any Subsidiary of the Company, (y) the Surviving Corporation or its ultimate parent corporation, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing is the beneficial owner, directly or indirectly, of 25% or more of the total common stock or 25% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Corporation, and (C) at least a majority of the members of the board of directors of the Surviving Corporation were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement arrangementproviding for such Reorganization, Sale or understandingAcquisition (any Reorganization, Sale or uponAcquisition which satisfies all of the exercise of conversion rights, exchange rights, warrants, or options or otherwise, or (ii) sole or shared voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship or otherwise (but neither such person nor any such affiliatecriteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or(iv) approval by the beneficial ownerstockholders of any voting shares solely by reasonthe Company of a revocable proxy granted for a particular meetingcomplete liquidation or dissolution of stockholders, pursuant to a public solicitation of proxies for such meeting, and with respect to which shares neither such person nor any such affiliate is otherwise deemed the beneficial owner); orCompany.(3) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its affiliates act as a partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement or understanding forA-6Notwithstanding the purpose of acquiring, holding, voting (other than solely by reason of a revocable proxy described in part (2) of this subparagraph (b)) or disposing of any shares of capital stock of this Corporation; provided, however, that (1) no director or officer of this Corporation (or any affiliate of any such director or officer) shall, solely by reason of any or all of such directors or officers acting in their capacities as such, be deemed,foregoing, for any purposes hereof, to beneficially own any Common Stock beneficially owned by any other such director or officer (or any affiliate thereof), and (2) neither any employee stock ownership or similarAwards that constitute a nonqualified deferred compensation plan within the meaning of this Corporation or any subsidiarySection 409A(d) of this Corporation nor any trustee with respect thereto (or any affiliatethe Code, Change of such trustee) shall, solely by reason of such capacity of such trustee, be deemed, for any purposes hereof, to beneficially own any Common Stock held under any such plan. For purposes of computing the percentage beneficial ownership of Common Stock of a person, the outstanding Common Stock shall include shares deemed owned by such person through application of this subparagraph but shall not include any other Common Stock which may be issuable by this Corporation pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise. For all other purposes, the outstanding Common Stock shall include only Common Stock then outstanding and shall not include any Common Stock which may be issuable by this Corporation pursuant to any agreement, or upon the exercise of conversion rights, warrants or options, or otherwise.(c) A “person” shall mean any individual, firm, corporation, or other entity.3. The Board of DirectorsControl shall have the power to construe and apply the provisions of this Section and to make all determinations necessarysame meaning as set forth in any regulations, revenue procedure or desirable to implement such provisions, including but not limited to matters with respect to (1) the number of shares of Common Stock beneficially owned by any person, (2) whether a person is an affiliate of another, (3) whether a person has an agreement, arrangement, or understanding with another as to the matters referred to in the definition of beneficial ownership, (4) the application of any other definition or operative provision of the Section to the given facts, or (5) any other matter relating to the applicability or effect of this Section.4. The Board of Directors shall have the right to demand that any person who is reasonably believed to beneficially own Common Stock in excess of the Limit (or holds of record Common Stock beneficially owned by any person in excess of the Limit) supply the Corporation with complete information as to (1) the record owner(s) of all shares beneficially owned by such person who isreasonably believed to own shares in excess of the Limit, and (2) any other factual matter relating to the applicability or effect of this Section as may reasonably be requested of such person.5. Except as otherwise provided by law or expressly provided in this Section C, the presence, in person or by proxy, of the holders of record of shares of capital stock of the Corporation entitling the holders thereof to cast a majority of the votes (after giving effect, if required, to the provisions of this Section) entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote shall constitute a quorum at all meetings of the stockholders, and every reference in this Certificate of Incorporation to a majority or other proportion of capital stock (or the holders thereof) for purposes of determining any quorum requirement or any requirement for stockholder consent or approval shall be deemed to refer to such majority or other proportion of the votes (or the holders thereof) then entitled to be cast in respect of such capital stock.6. Any constructions, applications, or determinations made by the Board of Directors, pursuant to this Section in good faith and on the basis of such information and assistance as was then reasonably available for such purpose shall be conclusive and binding upon the Corporation and its stockholders.7. In the event any provision (or portion thereof) of this Section C shall be found to be invalid, prohibited or unenforceable for any reason, the remaining provisions (or portions thereof) of this Section shall remain in full force and effect, and shall be construed as if such invalid, prohibited or unenforceable provision had been stricken herefrom or otherwise rendered inapplicable, it being the intent of this Corporation and its stockholders that each such remaining provision (or portion thereof) of this Section C remain, to the fullest extent permitted by law, applicable and enforceable as to all stockholders, including stockholders owning an amount of stock over the Limit, notwithstanding any such finding.FIFTH:A. No Common Stockrevenue rulings issued by the Corporation or securities issued by the Corporation entitling the holder thereof to acquire shares of Common Stock or any securitiesSecretary of the Corporation which may otherwise be deemed “stock” as the term is defined in Section 382 ofUnited States Treasury applicable to such plans.(i) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and regulations thereunder (collectively, “Section 382”) (such securities collectively referredincludes a reference to hereinafter solelythe underlying final regulations.(j) “Committee” means the committee of the Board described in Article 4.(k) “Company” means WSFS Financial Corporation, a Delaware corporation or any successor corporation.(l) “Continuous Status as a Participant” means the absence of any interruption or termination of service as an Associate, officer or director of the Company or any Affiliate, as applicable; provided, however, that for purposes of this Articlean Incentive Stock Option “Continuous Status as “Stock”) may be transferred bya Participant” means the absence of any person (the “Initial Transferor”) in any mannerinterruption or to any extent to any other person if such other person is or would become by reasontermination of service as a common law employee of the transfer a beneficial owner of more than 4.5% of the Stock outstanding (a “Prohibited Transferee”),Company or any Parent or Subsidiary, as such ownership is determined under Section 382. For purposes of this provision, transfers to a Prohibited Transferee shall include transfers directly or through trusts, estates, corporations or partnerships, and attribution through such entities shall be determinedapplicable, pursuant to Section 382.B. Transfers made in violation of Section A of this Articleapplicable tax regulations. Continuous Status as a Participant shall not be effective to transfer ownershipconsidered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Company, in the case of transfers between payroll locations of the Stock subject thereto (“Prohibited Stock”) andCompany or between the initial Transferee shall continue to be treated asCompany, an Affiliate or a successor, or in the ownercase of such Prohibited Stocka Outside Director’s performance of services in an emeritus or advisory capacity. Notwithstanding the foregoing, for all corporate purposes.C. Uponany Awards that constitute a nonqualified deferred compensation plan within the transfermeaning of Prohibited Stock, the Corporation shall I have thirty days from discovery of such prohibited transfer to demand the transferSection 409A (d) of the Prohibited Stock fromCode, Continuous Status as a Participant shall mean the Prohibited Transferee to the Corporation or its agent. Further, the Corporation or its agent shall demand the transferabsence of any distributions received on such Prohibited Stock by the Prohibited Transferee. Discovery shall be deemed to have been made pursuant to provisions of Section 382 regarding discovery of ownership changes. If a Prohibited Transferee shall refuse“separation from service” or fail upon demand by the Corporation to transfer suchProhibited Stock and distributions received thereon, the Corporation shall take all necessary action at law or in equity to compel such transfersimilar concept as soon as possible. Upon transfer by the Prohibited Transferee of the Prohibited Stock, together with distributions received thereon, the Corporation shall sell such Prohibited Stock as soon as practicable thereafter in an arm’s length transaction and in a manner consistent with the restriction set forth in this Article. Proceeds from such sale shall be remitted to the Prohibited Transferee in an amount not to exceed the amount paidany regulations, revenue procedure or revenue rulings issued by the Prohibited TransfereeSecretary of the United States Treasury applicable to such plans.(m) “Covered Employee” means a covered employee as defined in Code Section 162(m) (3).(n) “Disability” or “Disabled” has the same meaning as provided in the long-term disability plan or policy maintained by the Company or if applicable, most recently maintained, by the Company or if applicable, an Affiliate, for the Participant, whether or not such Prohibited StockParticipant actually receives disability benefits under such plan or policy. If no long-term disability plan or policy was ever maintained on behalf of the Participant or if the transferdetermination of Disability relates to an Incentive Stock Option, or a Stock Appreciation Right issued in tandem with an Incentive Stock Option, Disability means Permanent and Total Disability as defined in Section 22(e)(3) of the Code. In the event of a dispute, the determination of whether a Participant is Disabled will be made in violation of this Article was by gift, inheritance or similar transfer, the fair market value of such shares at the time of receipt by the Prohibited Transferee. For purposesCommittee and may be supported by the advice of a physician competent in the area to which such Disability relates. Notwithstanding the foregoing, for any Awards that constitute a nonqualified deferred compensation plan within the meaning of Section 409A(d) of the foregoing, fair market value per shareCode, Disability shall nothave the same meaning as set forth in any regulations, revenue procedure or revenue rulings issued by the Secretary of the United States Treasury applicable to such plans.(o) “Deferred Stock Unit” means a right granted to a Participant under Article 11.(p) “Dividend Equivalent” means a right granted to a Participant under Article 12.(q) “Effective Date” has the meaning assigned such term in Section 3.1.(r) “Eligible Participant” means an Associate, officer or director of the Company or any Affiliate.(s) “Exchange” means any national securities exchange on which the Stock may from time to time be less than: (1)listed or traded.(t) “Fair Market Value”, on any date, means (i) if the Stock is listed on a securitiesA-7exchange, the average of the highesthigh and lowest selling price atlow sales prices on the timeprincipal such exchange on such date or, in the absence of receipt or if there were noreported sales on such date, thenthe average of the high and low sales prices on the immediately preceding date on which sales were reported, or (ii) if the Stock is not less thanlisted on a securities exchange, the mean between the bid and asked price onprices as quoted by Nasdaq for such trading date, ifor, in the Prohibited Stock is listed on a national securities exchange or the NASDAQ National Market System on such date; (2) the mean between theabsence of bid and asked price on such date or, if there is no bid and asked priceprices on such date, then on the next prior business day on which there was a bid and asked price; provided that if it is determined that the fair market value is not properly reflected by such Nasdaq quotations, Fair Market Value will be determined by such other method as the Committee determines in good faith to be reasonable.(u) “Full Value Award” means an Award other than in the form of an Option or SAR, and which is settled by the issuance of Stock.(v) “Good Reason” has the meaning assigned such term in the employment, severance or similar agreement, if any, between a Participant and the Company or an Affiliate, provided, however that if there is no such employment, severance or similar agreement in which such term is defined, and unless otherwise defined in the applicable Award Certificate, “Good Reason” shall mean any of the following acts by the Company or an Affiliate, without the consent of the Participant (in each case, other than an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or the Affiliate promptly after receipt of notice thereof given by the Participant): (i) the assignment to the Participant of duties materially inconsistent with, or a material diminution in, the Participant’s position, authority, duties or responsibilities as in effect immediately prior to a Change in Control, (ii) a reduction by the Company or an Affiliate in the Participant’s base salary, (iii) the Company or an Affiliate requiring the Participant, without his or her consent, to be based at any office or location more than 35 miles from the location at which the Participant was stationed immediately prior to a Change in Control, or (iv) the continuing material breach by the Company or an Affiliate of any employment agreement between the Participant and the Company or an Affiliate after the expiration of any applicable period for cure.(w) “Grant Date” of an Award means the first date on which all necessary corporate action has been taken to approve the grant of the Award as provided in the Plan, or such later date as is determined and specified as part of that authorization process. Notice of the grant shall be provided to the grantee within a reasonable time after the Grant Date.(x) “Incentive Stock Option” means an Option that is intended to be an incentive stock option and meets the requirements of Section 422 of the Code or any successor provision thereto.(y) “Nonstatutory Stock Option” means an Option that is not an Incentive Stock Option.(z) “Option” means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option.(aa) “Other Stock-Based Award” means a right, granted to a Participant under Article 13, that relates to or is valued by reference to Stock or other Awards relating to Stock.(bb) “Outside Director” means a director of the Company who is not an employee of the Company or an Affiliate.(cc) “Parent” means a corporation, limited liability company, partnership or other entity which owns or beneficially owns a majority of the outstanding voting stock or voting power of the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Parent shall have the meaning set forth in Section 424(e) of the Code.(dd) “Participant” means a person who, as an Associate, officer or director of the Company or any Affiliate, has been granted an Award under the Plan; provided that in the case of the death of a Participant, the term “Participant” refers to a beneficiary designated pursuant to Section 14.5 or the legal guardian or other legal representative acting in a fiduciary capacity on behalf of the Participant underA-8applicable state law and court supervision.(ee) “Performance Award” means Performance Shares, Performance Units or Performance-Based Cash Awards granted pursuant to Article 9.(ff) “Performance-Based Cash Award” means a right granted to a Participant under Article 9 to a cash award to be paid upon achievement of such performance goals as the Committee establishes with regard to such Award.(gg) “Performance Share” means any right granted to a Participant under Article 9 to a unit to be valued by reference to a designated number of Shares to be paid upon achievement of such performance goals as the Committee establishes with regard to such Performance Share.(hh) “Performance Unit” means a right granted to a Participant under Article 9 to a unit valued by reference to a designated amount of cash or property other than Shares, to be paid to the Participant upon achievement of such performance goals as the Committee establishes with regard to such Performance Unit.(ii) “Person” means any individual, entity or group, within the meaning of Section 3(a) (9) of the 1934 Act and as used in Section 13(d) (3) or 14(d)(2) of the 1934 Act.(jj) “Plan” means the Amended and Restated WSFS Financial Corporation 2005 Incentive Plan, as amended from time to time.(kk) “Qualified Performance-Based Award” means an Award that is either (i) intended to qualify for the Section 162(m) Exemption and is made subject to performance goals based on Qualified Business Criteria as set forth in Section 14.12, or (ii) an Option or SAR having an exercise price equal to or greater than the Fair Market Value of the underlying Stock as of the Grant Date.(ll) “Qualified Business Criteria” means one or more of the Business Criteria listed in Section 14.12(b) upon which performance goals for certain Qualified Performance-Based Awards may be established by the Committee.(mm) “Restricted Stock Award” means Stock granted to a Participant under Article 10 that is subject to certain restrictions and to risk of forfeiture.(nn) “Restricted Stock Unit Award” means the right granted to a Participant under Article 10 to receive shares of Stock (or the equivalent value in cash or other property if the ProhibitedCommittee so provides) in the future, which right is subject to certain restrictions and to risk of forfeiture.(oo) “Retirement” in the case of an Associate Participant, means the Participant’s termination of employment with the Company or an Affiliate with the Committee’s approval after attaining any normal or early retirement age specified in any pension, profit sharing or other retirement program sponsored by the Company, or, in the event of the inapplicability thereof with respect to the Participant in question, as determined by the Committee in its reasonable judgment. “Retirement” in the case of an Outside Director means retirement of the director in accordance with the provisions of the Company’s bylaws as in effect from time to time or the failure to be re-elected or re-nominated as a director.(pp) “Section 162(m) Exemption” means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m) (4) (C) of the Code or any successor provision thereto.(qq) “Shares” means shares of the Company’s Stock. If there has been an adjustment or substitution pursuant to Article 15, the term “Shares” shall also include any shares of stock or other securities that are substituted for Shares or into which Shares are adjusted pursuant to Article 15.A-9(rr) “Stock” means the $0.01 par value common stock of the Company and such other securities of the Company as may be substituted for Stock pursuant to Article 15.(ss) “Stock Appreciation Right” or “SAR” means a right granted to a Participant under Article 8 to receive a payment equal to the difference between the Fair Market Value of a Share as of the date of exercise of the SAR over the base price of the SAR, all as determined pursuant to Article 8.(tt) “Subsidiary” means any corporation, limited liability company, partnership or other entity of which a majority of the outstanding voting stock or voting power is tradedbeneficially owned directly or indirectly by the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Subsidiary shall have the meaning set forth in Section 424(f) of the Code.(uu) “1933 Act” means the Securities Act of 1933, as amended from time to time.(vv) “1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.ARTICLE 3EFFECTIVE TERM OF PLAN3.1. EFFECTIVE DATE. The Plan originally became effective on April 28, 2005, the date it was approved by the stockholders of the Company (the “Effective Date”).3.2. TERMINATION OF PLAN. Unless earlier terminated as provided herein, the Plan shall continue in effect until the tenth anniversary of the Effective Date or, if the shareholders approve an amendment to the Plan that increases the number of Shares subject to the Plan, the tenth anniversary of the date of such approval. The termination of the Plan on such date shall not affect the validity of any Award outstanding on the date of termination, which shall continue to be governed by the applicable terms and conditions of the Plan.ARTICLE 4ADMINISTRATION4.1. COMMITTEE. The Plan shall be administered by a Committee appointed by the Board (which Committee shall consist of at least two directors) or, at the discretion of the Board from time to time, the Plan may be administered by the Board. It is intended that at least two of the directors appointed to serve on the Committee shall be “non-employee directors” (within the meaning of Rule 16b-3 promulgated under the 1934 Act) and “outside directors” (within the meaning of Code Section 162(m)) and that any such members of the Committee who do not so qualify shall abstain from participating in any decision to make or administer Awards that are made to Eligible Participants who at the time of consideration for such Award (i) are persons subject to the short-swing profit rules of Section 16 of the 1934 Act, or (ii) are reasonably anticipated to become Covered Employees during the term of the Award. However, the mere fact that a Committee member shall fail to qualify under either of the foregoing requirements or shall fail to abstain from such action shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. The members of the Committee shall be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. The Board may reserve to itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator of the Plan for any and all purposes. To the extent the Board has reserved any authority and responsibility or during any time that the Board is acting as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board. To the extent any action of the Board under the Plan conflicts with actions taken by the Committee, the actions of the Board shall control.4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations, not inconsistent with the Plan, as the Committee may deem appropriate. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Certificate and allA-10decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other Associate of the Company or any Affiliate, the Company’s or an Affiliate’s independent certified public accountants, Company counsel or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.4.3. AUTHORITY OF COMMITTEE. Except as provided below, the Committee has the exclusive power, authority and discretion to:(a) Grant Awards; (b) Designate Participants; (c) Determine the type or types of Awards to be granted to each Participant;(d) Determine the number of Awards to be granted and the number of Shares or dollar amount to which an Award will relate;(e) Determine the terms and conditions of any Award granted under the Plan, including but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, based in each case on such considerations as the Committee in its sole discretion determines;(f) Determine whether, to what extent, and under what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;(g) Prescribe the form of each Award Certificate, which need not be identical for each Participant;(h) Decide all other matters that must be determined in connection with an Award;(i) Establish, adopt or revise any rules, regulations, guidelines or procedures as it may deem necessary or advisable to administer the Plan;(j) Make all other decisions and determinations that may be required under the Plan or as the Committee deems necessary or advisable to administer the Plan;(k) Amend the Plan or any Award Certificate as provided herein; and(l) Adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of non-U.S. jurisdictions in which the Company or any Affiliate may operate, in order to assure the viability of the benefits of Awards granted to participants located in such other jurisdictions and to meet the objectives of the Plan.Notwithstanding the foregoing, grants of Awards to Outside Directors hereunder shall be made only in accordance with the terms, conditions and parameters of a plan, program or policy for the compensation of Outside Directors as in effect from time to time, and the Committee may not make discretionary grants hereunder to Outside Directors.Notwithstanding the above, the Board may, by resolution, expressly delegate to a special committee, consisting of one or more directors who are also officers of the Company, the authority, within specified parameters, to (i) designate Associates to be recipients of Awards under the Plan, and (ii) to determine the number of such Awards to be received by any such Associates; except that such delegation of duties and responsibilities to officers of the Company may not be made with respect to grants of Awards to Eligible Participants who as of the Grant DateA-11are persons subject to the short-swing profit rules of Section 16 of the 1934 Act, or who as of the Grant Date are reasonably anticipated to be become Covered Employees during the term of the Award. The acts of such delegates shall be treated hereunder as acts of the Committee and such delegates shall report to the Committee regarding the delegated duties and responsibilities and any Awards so granted.ARTICLE 5SHARES SUBJECT TO THE PLAN5.1. NUMBER OF SHARES. Subject to adjustment as provided in Article 15, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the Plan shall be 1,162,000; provided, however, that each Share issued under the Plan pursuant to a Full Value Award shall reduce the number of available Shares by four (4) shares. 5.2. SHARE COUNTING.(a)To the extent that an Award is canceled, terminates, expires, is forfeited or lapses for any reason, any unissued Shares subject to the Award will again be available for issuance pursuant to Awards granted under the Plan.(b)Shares subject to Awards settled in cash will again be available for issuance pursuant to Awards granted under the Plan.5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.5.4. LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Article 15), the maximum number of Shares with respect to one or more Options and/or SARs that may be granted during any one calendar year under the Plan to any one Participant shall be 50,000; the maximum aggregate grant with respect to Awards of Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance Shares or other Stock-Based Awards granted in any one calendar year to any one Participant shall be 50,000 Shares; the aggregate dollar value of any Performance-Based Cash Award that may be paid to any one Participant during any one calendar year under the Plan shall be $2,000,000; and the aggregate maximum fair market value (measured as of the Grant Date) of any other Awards that may be granted to any one Participant (less any consideration paid by the Participant for such Award) during any one calendar year under the Plan shall be $2,000,000.ARTICLE 6ELIGIBILITY6.1. GENERAL. Awards may be granted only to Eligible Participants; except that Incentive Stock Options may be granted only to Eligible Participants who are common law employees of the Company or a Parent or Subsidiary as defined in Section 424(e) and (f) of the Code.ARTICLE 7STOCK OPTIONS7.1. GENERAL. The Committee is authorized to grant Options to Participants on the following terms and conditions:(a) EXERCISE PRICE. The exercise price per Share under an Option shall be determined by the Committee, but shall not be less than the Fair Market Value as of the Grant Date.(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, subject to Section 7.1(d). The Committee shall also determine the performance or other conditions, if any, that must be satisfied before all or part ofA-12an Option may be exercised or vested. The Committee may waive any exercise or vesting provisions at any time in whole or in part based upon factors as the Committee may determine in its sole discretion so that the Option becomes exercisable or vested at an earlier date. The Committee may permit an arrangement whereby receipt of Stock upon exercise of an Option is delayed until a specified future date.(c) PAYMENT. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation, cash, Shares, or other property (including “cashless exercise” arrangements), and the methods by which Shares shall be delivered or deemed to be delivered to Participants; provided, however, that if Shares are used to pay the exercise price of an Option, such Shares must have been held by the Participant for at least such period of time, if any, as necessary to avoid the recognition of an expense under generally accepted accounting principles as a result of the exercise of the Option.(d) EXERCISE TERM. Except for Nonstatutory Options granted to Participants resident outside of the United States, no Option granted under the Plan may be exercisable for more than seven years from the Grant Date.(f) MINIMUM VESTING REQUIREMENTS. Options granted under the Plan shall either (i) be subject to a minimum vesting period of four years (which may include graduated vesting within such four-year period), or one year if the vesting is based on performance criteria other than continued service, or (ii) be granted solely in exchange for foregone cash compensation. Notwithstanding the foregoing, the Committee may permit acceleration of vesting of such Options in the event of the Participant’s death, Disability or Retirement or the occurrence of a Change in Control.7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options granted under the Plan must comply with the following additional rules:(a) LAPSE OF OPTION. Subject to any earlier termination provision contained in the Award Certificate, an Incentive Stock Option shall lapse upon the earliest of the following circumstances; provided, however, that the Committee may, prior to the lapse of the Incentive Stock Option under the circumstances described in subsections (3), (4) or (5) below, provide in writing that the Option will extend until a later date, but if an Option is so extended and is exercised after the dates specified in subsections (3) and (4) below, it will automatically become a Nonstatutory Stock Option:(1) The expiration date set forth in the Award Certificate.(2) The tenth anniversary of the Grant Date.(3) Three months after termination of the Participant’s Continuous Status as a Participant for any reason other than the Participant’s Disability or death.(4) One year after the Participant’s Continuous Status as a Participant by reason of the Participant’s Disability.(5) One year after the termination of the Participant’s death if the Participant dies while employed, or during the three-month period described in paragraph (3) or during the one-year period described in paragraph (4) and before the Option otherwise lapses.Unless the exercisability of the Incentive Stock Option is accelerated as provided in Article 14, if a Participant exercises an Option after termination of employment, the Option may be exercised only with respect to the Shares that were otherwise vested on the Participant’s termination of employment. Upon the Participant’s death, any exercisable Incentive Stock Options may be exercised by the Participant’s beneficiary, determined in accordance with Section 14.5.(b) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value (determined as of the Grant Date) of all Shares with respect to which Incentive Stock Options are first exercisable by aA-13 Participant in any calendar year may not exceed $100,000.00.(c) TEN PERCENT OWNERS. No Incentive Stock Option shall be granted to any individual who, at the Grant Date, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary unless the exercise price per share of such Option is at least 110% of the Fair Market Value per Share at the Grant Date and the Option expires no later than five years after the Grant Date.(d) EXPIRATION OF AUTHORITY TO GRANT INCENTIVE STOCK OPTIONS. No Incentive Stock Option may be granted pursuant to the Plan after the day immediately prior to the tenth anniversary of the date the Plan was adopted by the Board, or the termination of the Plan, if earlier.(e) RIGHT TO EXERCISE. During a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant or, in the case of the Participant’s Disability, by the Participant’s guardian or legal representative.(f) ELIGIBLE GRANTEES. The Committee may not grant an Incentive Stock Option to a person who is not at the Grant Date a common law employee of the Company or a Parent or Subsidiary.ARTICLE 8STOCK APPRECIATION RIGHTS8.1. GRANT OF STOCK APPRECIATION RIGHTS. The Committee is authorized to grant Stock Appreciation Rights to Participants on the following terms and conditions:(a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right, the Participant to whom it is granted has the right to receive the excess, if any, of:(1) The Fair Market Value of one Share on the date of exercise; over(2) The base price of the Stock Appreciation Right as determined by the Committee, which shall not be less than the Fair Market Value on the Grant Date.(c) EXERCISE TERM. Except for Awards granted to Participants resident outside of the United States, no Stock Appreciation Right may be exercisable for more than seven years after the Grant Date.(d) MINIMUM VESTING REQUIREMENTS. Stock Appreciation Rights granted under the Plan shall either (i) be subject to a minimum vesting period of four years (which may include graduated vesting within such four-year period), or one year if the vesting is based on performance criteria other than continued service, or (ii) be granted solely in exchange for foregone cash compensation. Notwithstanding the foregoing, the Committee may permit acceleration of vesting of such Stock Appreciation Rights in the event of the Participant’s death, Disability or Retirement or the occurrence of a Change in Control.(b) OTHER TERMS. All awards of Stock Appreciation Rights shall be evidenced by an Award Certificate. Subject to the limitations of this Article 8, the terms, methods of exercise, methods of settlement, form of consideration payable in settlement, and any other terms and conditions of any Stock Appreciation Right shall be determined by the Committee at the time of the grant of the Award and shall be reflected in the Award Certificate.A-14ARTICLE 9PERFORMANCE AWARDS9.1. GRANT OF PERFORMANCE AWARDS.The Committee is authorized to grant Performance Shares, Performance Units or Performance-Based Cash Awards to Participants on such terms and conditions as may be selected by the Committee. The Committee shall have the complete discretion to determine the number of Performance Awards granted to each Participant, subject to Section 5.4, and to designate the provisions of such Performance Awards as provided in Section 4.3. All Performance Awards shall be evidenced by an Award Certificate or a written program established by the Committee, pursuant to which Performance Awards are awarded under the Plan under uniform terms, conditions and restrictions set forth in such written program.9.2. PERFORMANCE GOALS. The Committee may establish performance goals for Performance Awards which may be based on any criteria selected by the Committee. Such performance goals may be described in terms of Company-wide objectives or in terms of objectives that relate to the performance of the Participant, an Affiliate or a division, region, department or function within the Company or an Affiliate. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or an Affiliate conducts its business, or other events or circumstances render performance goals to be unsuitable, the Committee may modify such performance goals in whole or in part, as the Committee deems appropriate. If a Participant is promoted, demoted or transferred to a different business unit or function during a performance period, the Committee may determine that the performance goals or performance period are no longer appropriate and may (i) adjust, change or eliminate the performance goals or the applicable performance period as it deems appropriate to make such goals and period comparable to the initial goals and period, or (ii) make a cash payment to the participant in amount determined by the Committee. The foregoing two sentences shall not apply with respect to a Performance Award that is intended to be a Qualified Performance-Based Award if the recipient of such award (a) was a Covered Employee on the date of the modification, adjustment, change or elimination of the performance goals or performance period, or (b) in the reasonable judgment of the Committee, may be a Covered Employee on the date the Performance Award is expected to be paid.9.3. RIGHT TO PAYMENT. The grant of a Performance Share to a Participant will entitle the Participant to receive at a specified later time a specified number of Shares, or the equivalent cash value, if the performance goals established by the Committee are achieved and the other terms and conditions thereof are satisfied. The grant of a Performance Unit to a Participant will entitle the Participant to receive at a specified later time a specified dollar value in cash or other property, including Shares, variable under conditions specified in the Award, if the performance goals in the Award are achieved and the other terms and conditions thereof are satisfied. The grant of a Performance-Based Cash Award to a Participant will entitle the Participant to receive at a specified later time a specified dollar value in cash variable under conditions specified in the Award, if the performance goals in the Award are achieved and the other terms and conditions thereof are satisfied. The Committee shall set performance goals and other terms or conditions to payment of the Performance Awards in its discretion which, depending on the extent to which they are met, will determine the value of the Performance Awards that will be paid to the Participant.9.4. OTHER TERMS. Performance Awards may be payable in cash, Stock, or other property, and have such other terms and conditions as determined by the Committee and reflected in the Award Certificate. For purposes of determining the number of Shares to be used in payment of a Performance Award denominated in cash but payable in whole or in part in Shares or Restricted Stock, the number of Shares to be so paid will be determined by dividing the cash value of the Award to be so paid by the Fair Market Value of a Share on the date of determination by the Committee of the amount of the payment under the Award, or, if the Committee so directs, the date immediately preceding the date the Award is paid.ARTICLE 10RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS10.1. GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The Committee is authorized to make Awards of Restricted Stock or Restricted Stock Units to Participants in such amounts and subject to such terms and conditions as may be selected by the Committee. An Award of Restricted Stock or Restricted Stock Units shall be evidenced by an Award Certificate setting forth the terms, conditions, and restrictions applicable to the Award.A-1510.2. ISSUANCE AND RESTRICTIONS. Restricted Stock or Restricted Stock Units shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee determines at the time of the grant of the Award or thereafter. Except as otherwise provided in an Award Certificate or any special Plan document governing an Award, the Participant shall have all of the rights of a stockholder with respect to the Restricted Stock, and the Participant shall have none of the rights of a stockholder with respect to Restricted Stock Units until such time as Shares of Stock are paid in settlement of the Restricted Stock Units.10.3. FORFEITURE. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of Continuous Status as a Participant during the applicable restriction period or upon failure to satisfy a performance goal during the applicable restriction period, Restricted Stock or Restricted Stock Units that are at that time subject to restrictions shall be forfeited; provided, however, that the Committee may provide in any Award Certificate that restrictions or forfeiture conditions relating to Restricted Stock or Restricted Stock Units will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock or Restricted Stock Units.10.4. DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be delivered to the Participant at the time of grant either by book-entry registration or by delivering to the Participant, or a custodian or escrow agent (including, without limitation, the Company or one or more of its Associates) designated by the Committee, a stock certificate or certificates registered in the name of the Participant. If physical certificates representing shares of Restricted Stock are registered in the name of the Participant, such certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.ARTICLE 11DEFERRED STOCK UNITS11.1. GRANT OF DEFERRED STOCK UNITS . The Committee is authorized to grant Deferred Stock Units to Participants subject to such terms and conditions as may be selected by the Committee. Deferred Stock Units shall entitle the Participant to receive Shares of Stock (or the equivalent value in cash or other property if so determined by the Committee) at a future time as determined by the Committee, or as determined by the Participant within guidelines established by the Committee in the case of voluntary deferral elections. An Award of Deferred Stock Units shall be evidenced by an Award Certificate setting forth the terms and conditions applicable to the Award.ARTICLE 12DIVIDEND EQUIVALENTS12.1. GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend Equivalents to Participants subject to such terms and conditions as may be selected by the Committee. Dividend Equivalents shall entitle the Participant to receive payments equal to dividends with respect to all or a portion of the number of Shares subject to an Award, as determined by the Committee. The Committee may provide that Dividend Equivalents be paid or distributed when accrued or be deemed to have been reinvested in additional Shares, or otherwise reinvested.ARTICLE 13STOCK OR OTHER STOCK-BASED AWARDS13.1. GRANT OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that are payable in, valued in whole or in part by reference to, orA-16otherwise based on or related to Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation Shares awarded purely as a “bonus” and not subject to any restrictions or conditions, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, and Awards valued by reference to book value of Shares or the value of securities of or the performance of specified Parents or Subsidiaries. The Committee shall determine the terms and conditions of such Awards.ARTICLE 14PROVISIONS APPLICABLE TO AWARDS14.1. AWARD CERTIFICATES. Each Award shall be evidenced by an Award Certificate. Each Award Certificate shall include such provisions, not inconsistent with the Plan, as may be specified by the Committee.14.2. TERM OF AWARD. The term of each Award shall be for the period as determined by the Committee, provided that in no event shall the term of any Stock Option or Stock Appreciation Right exceed a period of seven years from its Grant Date (or, if Section 7.2(c) applies, five years from its Grant Date).14.3. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any applicable law or Award Certificate, payments or transfers to be made by the Company or an Affiliate on the grant or exercise of an Award may be made in such form as the Committee determines at or after the Grant Date, including without limitation, cash, Stock, other Awards, or other property, or any combination, and may be made in a single payment or transfer, or in installments, in each case determined in accordance with rules adopted by, and at the discretion of, the Committee.14.4. LIMITS ON TRANSFER. No right or interest of a Participant in any unexercised or restricted Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than the Company or an Affiliate. No unexercised or restricted Award shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution or, except in the case of an Incentive Stock Option, pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if such Section applied to an Award under the Plan; provided, however, that the Committee may (but need not) permit other transfers where the Committee concludes that such transferability (i) does not result in accelerated taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, state or federal tax or securities laws applicable to transferable Awards.14.5. BENEFICIARIES. Notwithstanding Section 14.4, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all terms and conditions of the Plan and any Award Certificate applicable to the Participant, except to the extent the Plan and Award Certificate otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, payment shall be made to the Participant’s estate. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.14.6. STOCK TRADING RESTRICTIONS . All Stock issuable under the Plan is subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the NASDAQ National Market System;Stock is listed, quoted, or (3)traded. The Committee may place legends on any Stock certificate or issue instructions to the transfer agent to reference restrictions applicable to the Stock.14.7. ACCELERATION UPON DEATH OR DISABILITY. Except as determined byotherwise provided in the BoardAward Certificate, upon the Participant’s death or Disability during his or her Continuous Status as a Participant, (i) all of Directors.D. Any salesuch Participant’s outstanding Options, SARs, and other Awards in the nature of Prohibited Stock by a Prohibited Transferee received in violationrights that may be exercised shall become fully exercisable, (ii) all time-based vesting restrictions on the Participant’s outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under all of this Articlesuch Participant’s outstanding performance-based Awards shall be deemed to have been made solelyfully earned as agentof the date of termination based upon an assumed achievement of all relevant performance goals at the “target” level and there shall be a prorata payout to the Participant or his or her estate within thirty (30) days following the date of termination based upon the length of time within the performance period that has elapsed prior to the date of termination. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(b), the excess Options shall be deemed to be Nonstatutory Stock Options.14.8. ACCELERATION UPON RETIREMENT. Except as otherwise provided in the Award Certificate, upon the Participant’s Retirement, (i) all of such Participant’s outstanding Options, SARs, and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) all time-based vesting restrictions on the Participant’s outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under all of such Participant’s outstanding performance-based Awards that are not intended to be Qualified Performance-Based Awards under Section 14.12(b)) shall be deemed to have been fully earned as of the date of termination based upon an assumed achievement of all relevant performance goals at the “target” level and there shall be a prorata payout to the Participant within thirty (30) days following the date of Retirement based upon an assumed achievement of all relevant targeted performance goals and upon the length of time within the performance period that has elapsed prior to the date of Retirement. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate; provided, however, that any Awards in the nature of rights that may be exercised shall remain exercisable until the earlier of (i) the original expiration of the Award, or (ii) the first anniversary of the Participant’s Retirement. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(b), the excess Options shall be deemed to be Nonstatutory Stock Options.A-17As consideration for the Corporation,accelerated vesting and extended exercise period of Options and SARs provided in this Section 14.8, an Associate must agree in writing that he or she will not compete with the Corporation shall demandCompany anywhere within the State of Delaware and within an area that is fifty miles from the borders of the Prohibited TransfereeState of Delaware for a period of three years following the proceedsdate on which the Associate exercises his or her last Option or SAR. In the event that the Associate breaches the agreement to not compete with the Company, the Associate shall pay as liquidated damages to the Company all income the Associate has realized from such sale togetherthe exercise of any Options or SARs that would have otherwise been forfeited but for the provisions of this Section 14.8. For purpose of this Section 14.8 “compete with distributions received from such Prohibited Stock. Such demandthe Company” means to either directly or indirectly, own, manage, control, be employed by, participate in, or be connected in any manner with any business or entity which is a financial institution.14.9. ACCELERATION UPON A CHANGE IN CONTROL. Except as otherwise provided in the Award Certificate, if a Participant’s employment is terminated without Cause or the Participant resigns for Good Reason within two years after the effective date of a Change in Control, then (i) all of that Participant’s outstanding Options, SARs and other Awards in the nature of rights that may be exercised shall become fully exercisable, and (ii) all time-based vesting restrictions on his or her outstanding Awards shall lapse. Except as otherwise provided in the Award Certificate, upon the occurrence of a Change in Control, the target payout opportunities attainable under all outstanding performance-based Awards shall be madedeemed to have been fully earned as of the effective date of the Change in Control based upon an assumed achievement of all relevant performance goals at the “target” level and there shall be pro rata payout to Participants within thirty (30) days following the effective date of discovery (asthe Change in Control based upon the length of time within the performance period that term ishas elapsed prior to the Change in Control.14.10. ACCELERATION FOR ANY OTHER REASON. Regardless of whether an event has occurred as described in Section C14.7, 14.8 or 14.9 above, and subject to Section 14.12 as to Qualified Performance-Based Awards, the Committee may in its sole discretion at any time determine that all or a portion of a Participant’s Options, SARs, and other Awards in the nature of rights that may be exercised shall become fully or partially exercisable, that all or a part of the restrictions on all or a portion of the outstanding Awards shall lapse, and/or that any performance-based criteria with respect to any Awards shall be deemed to be wholly or partially satisfied, in each case, as of such date as the Committee may, in its sole discretion, declare. The Committee may discriminate among Participants and among Awards granted to a Participant in exercising its discretion pursuant to this Article)Section 14.10. Notwithstanding anything in the Plan, including this Section 14.10, the Committee may not accelerate the payment of any Award if such acceleration would violate Section 409A (a) (3) of the Code.14.11. EFFECT OF ACCELERATION. If an Award is accelerated under Section 14.7, 14.8, 14.9 or Section 14.10, the Committee may, in its sole discretion, provide (i) that the Award will expire after a designated period of time after such acceleration to the extent not then exercised, (ii) that the Award will be settled in cash rather than Stock, (iii) that the Award will be assumed by another party to a transaction giving rise to the acceleration or otherwise be equitably converted or substituted in connection with such transaction, (iv) that the Award may be settled by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Stock, as of a specified date associated with the transaction, over the exercise price of the Award, or (v) any combination of the foregoing. The Committee’s determination need not be uniform and may be different for different Participants whether or not such Participants are similarly situated. To the extent that such acceleration causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(b), the excess Options shall be deemed to be Nonstatutory Stock Options.A-1814.12. QUALIFIED PERFORMANCE-BASED AWARDS.(a) The provisions of the Plan are intended to ensure that all Options and Stock Appreciation Rights granted hereunder to any Covered Employee shall qualify for the Section 162(m) Exemption.(b) When granting any other Award, the Committee may designate such Award as a Qualified Performance-Based Award, based upon a determination that the recipient is or may be a Covered Employee with respect to such Award, and the Committee wishes such Award to qualify for the Section 162(m) Exemption. If an Award is so designated, the Committee shall establish performance goals for such Award within the time period prescribed by Section 162(m) of the Code based on one or more of the following Qualified Business Criteria, which may be expressed in terms of Company-wide objectives or in terms of objectives that relate to the performance of an Affiliate or a division, region, department or function within the Company or an Affiliate:- Revenue - Sales - Profit (net profit, gross profit, operating profit, economic profit, profit margins or other corporate profit measures) - Earnings (EBIT, EBITDA, earnings per share, or other corporate earnings measures) - Net income (before or after taxes, operating income or other income measures) - Cash (cash flow, cash generation or other cash measures) - Stock price or performance - Total stockholder return (stock price appreciation plus reinvested dividends divided by beginning share price) - Return measures (including, but not limited to, return on assets, capital, equity, or sales, and cash flow return on assets, capital, equity, or sales); - Market share - Improvements in capital structure - Expenses (expense management, expense ratio, expense efficiency ratios or other expense measures) - Business expansion or consolidation (acquisitions and divestitures) - Internal rate of return or increase in net present value - Working capital targets relating to inventory and/or accounts receivable - Planning accuracy (as measured by comparing planned results to actual results) A-19In the event that applicable tax and/or securities laws change to permit Board or Committee discretion to alter the governing Qualified Business Criteria without obtaining stockholder approval of such changes, the Board or Committee shall have sole discretion to make such changes without obtaining stockholder approval.(c) Each Qualified Performance-Based Award (other than a market-priced Option or SAR) shall be earned, vested and payable (as applicable) only upon the achievement of performance goals established by the CorporationCommittee based upon one or more of the transferQualified Business Criteria, together with the satisfaction of any other conditions, such as continued employment, as the Committee may determine to be appropriate; provided, however, that the Committee may provide, either in connection with the grant thereof or by amendment thereafter, that achievement of such performance goals will be waived upon (i) the death or Disability of the Prohibited Stock toParticipant, (ii) the Prohibited Transferee. Ifoccurrence of a Change in Control, or (iii) upon termination of the Prohibited Transferee shall refuseParticipant’s employment without Cause or fail upon demandfor Good Reason in connection with a Change in Control. Performance periods established by the Corporation to surrenderCommittee for any such proceedsQualified Performance-Based Award may be as short as three months and distributions,may be any longer period.(d) The Committee may provide in any Qualified Performance-Based Award that any evaluation of performance may include or exclude any of the Corporation shall take all necessary action at law following events that occurs during a performance period: (a) asset write-downs or impairment charges; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) accruals for reorganization and restructuring programs; (e) extraordinary nonrecurring items as described in then-applicable accounting principles and/or in equitymanagement’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to compelstockholders for the transferapplicable year; (f) acquisitions or divestitures; and (g) foreign exchange gains and losses. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of such proceedsCode Section 162(m) for deductibility.(e) Any payment of a Qualified Performance-Based Award granted with performance goals pursuant to subsection (c) above shall be conditioned on the written certification of the Committee in each case that the performance goals and distributions. The Corporation,any other material conditions were satisfied. Except as specifically provided in subsection (c), no Qualified Performance-Based Award may be amended, nor may the Committee exercise any discretionary authority it may otherwise have under the Plan with respect to a Qualified Performance-Based Award under the Plan, in any manner to waive the achievement of the applicable performance goal based on Qualified Business Criteria or to increase the amount payable pursuant thereto or the value thereof, or otherwise in a manner that would cause the Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption.(f) Section 5.4 sets forth the maximum number of Shares or dollar value that may be granted in any calendar year to a Participant in designated forms of Qualified Performance-Based Awards.14.13. TERMINATION OF EMPLOYMENT. Whether military, government or other service or other leave of absence shall constitute a termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A Participant’s Continuous Status as a Participant shall not be deemed to terminate (i) in a circumstance in which a Participant transfers from the Company to an Affiliate, transfers from an Affiliate to the Company, or transfers from one Affiliate to another Affiliate, or (ii) in the discretion of the Committee as specified at or prior to such occurrence, in the case of a spin-off, sale or disposition of the Participant’s employer from the Company or any Affiliate. To the extent that this provision causes Incentive Stock Options to extend beyond three months from the date a Participant is deemed to be a common law employee of theA-20Company, a Parent or Subsidiary for purposes of Sections 424(e) and 424(f) of the Code, the Options held by such Participant shall be deemed to be Nonstatutory Stock Options.14.14. FORFEITURE EVENTS. The Committee may specify in an Award Certificate that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events shall include, but shall not be limited to, termination of employment for cause, violation of material Company or Affiliate policies, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company or any Affiliate.ARTICLE 15CHANGES IN CAPITAL STRUCTURE15.1. MANDATORY ADJUSTMENTS. In the event of a nonreciprocal transaction between the Company and its stockholders that causes the per-share value of the Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend), the authorization limits under Section 5.1 and 5.4 shall be adjusted proportionately, and the Committee shall make demandsuch adjustments to the Plan and Awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. Action by the Committee may include: (i) adjustment of the number and kind of shares that may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards or the measure to be used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments that the Committee determines to be equitable. Notwithstanding the foregoing, the Committee shall not make any adjustments to outstanding Options or SARs that would constitute a modification or substitution of the stock right under Treas. Reg. Sections 1.409A-1(b)(5)(v) that would be treated as the grant of a new stock right or change in the form of payment for purposes of Code Section 409A. Without limiting the foregoing, in the event of a subdivision of the outstanding Stock (stock-split), a declaration of a dividend payable in Shares, or a combination or consolidation of the outstanding Stock into a lesser number of Shares, the authorization limits under Section 5.1 and 5.4 shall automatically be adjusted proportionately, and the Shares then subject to each Award shall automatically, without the necessity for any additional action by the Committee, be adjusted proportionately without any change in the aggregate purchase price therefor.15.2 DISCRETIONARY ADJUSTMENTS. Upon the occurrence or in anticipation of any corporate event or transaction involving the Company (including, without limitation, any merger, reorganization, recapitalization, combination or exchange of shares, or any transaction described in Section 15.1), the Committee may, in its sole discretion, provide (i) that Awards will be settled in cash rather than Stock, (ii) that Awards will become immediately vested and exercisable and will expire after a designated period of time to the extent not then exercised, (iii) that Awards will be assumed by another party to a transaction or otherwise be equitably converted or substituted in connection with such transaction, (iv) that outstanding Awards may be settled by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Stock, as of a specified date associated with the transaction, over the exercise or base price of the Award, (v) that performance targets and performance periods for Performance Awards will be modified, consistent with Code Section 162(m) where applicable, or (vi) any combination of the foregoing. The Committee’s determination need not be uniform and may be different for different Participants whether or not such Participants are similarly situated.15.3 GENERAL. Any discretionary adjustments made pursuant to this Article 15 shall be subject to the provisions of Section 16.2. To the extent that any adjustments made pursuant to this Article 15 cause Incentive Stock Options to cease to qualify as Incentive Stock Options, such Options shall be deemed to be Nonstatutory Stock Options.A-21ARTICLE 16AMENDMENT, MODIFICATION AND TERMINATION16.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without stockholder approval; provided, however, that if an amendment to the Plan would, in the reasonable opinion of the Board or the Committee, either (i) materially increase the benefits accruing to Participants, (ii) materially increase the number of Shares available under the Plan, (iii) expand the types of awards under the Plan, (iv) materially expand the class of participants eligible to participate in the Plan, (v) materially extend the term of the Plan, or (vi) otherwise constitute a material change requiring stockholder approval under applicable laws, policies or regulations or the applicable listing or other requirements of an Exchange, then such amendment shall be subject to stockholder approval; and provided, further, that the Board or Committee may condition any other amendment or modification on the approval of stockholders of the Company for any reason, including by reason of such proceeds in the amount netapproval being necessary or deemed advisable to (i) permit Awards made hereunder to be exempt from liability under Section 16(b) of the amount which1934 Act, (ii) to comply with the Prohibited Transfereelisting or other requirements of an Exchange, or (iii) to satisfy any other tax, securities or other applicable laws, policies or regulations.16.2. AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the Committee may amend, modify or terminate any outstanding Award without approval of the Participant; provided, however:(a) Subject to the terms of the applicable Award Certificate, such amendment, modification or termination shall not, without the Participant’s consent, reduce or diminish the value of such Award determined as if the Award had been exercised, vested, cashed in or otherwise settled on the date of such amendment or termination (with the per-share value of an Option or Stock Appreciation Right for this purpose being calculated as the excess, if any, of the Fair Market Value as of the date of such amendment or termination over the exercise or base price of such Award);(b) The original term of an Option or SAR may not be extended without the prior approval of the stockholders of the Company;(c) Except as otherwise provided in Article 15, the exercise price of an Option or base price of a SAR may not be reduced, directly or indirectly, without the prior approval of the stockholders of the Company; and(d) No termination, amendment, or modification of the Plan shall adversely affect any Award previously granted under the Plan, without the written consent of the Participant affected thereby. An outstanding Award shall not be deemed to be “adversely affected” by a Plan amendment if such amendment would not reduce or diminish the value of such Award determined as if the Award had been exercised, vested, cashed in or otherwise settled on the date of such amendment (with the per-share value of an Option or Stock Appreciation Right for this purpose being calculated as the excess, if any, of the Fair Market Value as of the date of such amendment over the exercise or base price of such Award).ARTICLE 17GENERAL PROVISIONS17.1. NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. No Participant or any Eligible Participant shall have received fromany claim to be granted any Award under the Corporation hadPlan. Neither the Corporation rather thanCompany, its Affiliates nor the Prohibited Transferee sold such Prohibited Stock.E. Any proceeds receivedCommittee is obligated to treat Participants or Eligible Participants uniformly, and determinations made under the Plan may be made by the CorporationCommittee selectively among Eligible Participants who receive, or its agentare eligible to receive, Awards (whether or not such Eligible Participants are similarly situated).17.2. NO STOCKHOLDER RIGHTS. No Award gives a Participant any of the rights of a stockholder of the Company unless and until Shares are in fact issued to such person in connection with such Award. 17.3. WITHHOLDING. The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required byA-22law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of the salePlan. If Shares are surrendered to the Company to satisfy withholding obligations in excess of the Prohibited Stock, whetherminimum withholding obligation, such Shares must have been held by the Corporation or its agent or byParticipant as fully vested shares for such period of time, if any, as necessary to avoid the Prohibited Transferee, andrecognition of an expense under generally accepted accounting principles. The Company shall have the distributions received on such Prohibited Stock, shall be transferredauthority to require a Participant to remit cash to the Initial Transferor, less any amounts remitted to or retained byCompany in lieu of the Prohibited Transferee as otherwise describedsurrender of Shares for tax withholding obligations if the surrender of Shares in this Article. If such Initial Transferor cannot be determined by the Corporation within ninety days after receipt by the Corporationsatisfaction of such proceeds and distributions,withholding obligations would result in the CorporationCompany’s recognition of expense under generally accepted accounting principles. With respect to withholding required upon any taxable event under the Plan, the Committee may, at the time the Award is granted or its agent may paythereafter, require or permit that any such amounts duewithholding requirement be satisfied, in whole or in part, by withholding from the Initial Transferor intoAward Shares having a court or governmental agency, if applicable law permits, and otherwise must irrevocably transfer such amounts to a charity designated by the Corporation. In no event shall amounts due to such Initial Transferor inure to the benefit of the Corporation or its agent, but such amounts may be used to reimburse the agent, if any, for reasonable expenses incurred in attempting to identify the Initial Transferor.F. The Board of Directors is expressly empowered to waive application of this Article to any specific transaction, provided that such waiver is by resolution of the Board duly considered and approved by at least a majority of the Board of Directors prior to any such transfer of stock described within this Article.G. This Article shall have no applicability and shall be of no force and effect, notwithstanding notations to the contraryFair Market Value on any certificates evidencing ownership of any securities of the Corporation, after thirty seven months from the date of issuance of the Corporation’s 10% Convertible Preferred Stock, Series I.SIXTH:The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:(a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In additionwithholding equal to the powers and authority expressly conferred upon them by Statute or by this Certificate of Incorporation or the By-laws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.(b) The directors of the Corporation needminimum amount (and not be elected by written ballot unless the By-laws so provide.(c) Subject to the rights of holders of any class or series of Preferred Stock, any actiongreater amount) required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consentwithheld for tax purposes, all in writing byaccordance with such stockholders.(d) For a period of five (5) years following the date of the conversion of Wilmington Savings Fund Society, F.S.B., to a capital stock savings bank, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption) (the “Whole Board”). Thereafter, special meetings may be called by such person or personsprocedures as the By-laws may specify,Committee establishes.17.4. NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan, any Award Certificate or by the Board of Directors as provided above.SEVENTH:A. The number of directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board. The directors shall be divided into three classes, with the tern of office of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of stockholders one (1) year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two (2) years thereafter. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election.B. At all elections of directors of the corporation commencing with the 1992 annual meeting of stockholders, a holder of stock of any classother document or series then entitled to vote in such election shall be entitled to as many votes as shall equal the number of votes which (except for this provision as to cumulative voting) such holder would be entitled to cast for the election of directorsstatement made with respect to histhe Plan, shall interfere with or hershareslimit in any way the right of stock multipliedthe Company or any Affiliate to terminate any Participant’s employment or status as an officer or director at any time, nor confer upon any Participant any right to continue as an Associate, officer or director of the Company or any Affiliate, whether for the duration of a Participant’s Award or otherwise.17.5. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Certificate shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate. This Plan is not intended to be subject to ERISA.17.6. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Affiliate unless provided otherwise in such other plan.17.7. EXPENSES. The expenses of administering the Plan shall be borne by the numberCompany and its Affiliates.17.8. TITLES AND HEADINGS. The titles and headings of directors to be electedthe Sections in the electionPlan are for convenience of reference only, and in which his class or series is entitled to vote, and a stockholder may cast allthe event of such votes for a single director or may distribute them amongany conflict, the number to be voted for, or for any two (2) or more of them, as heor shemay see fit.C. Subject to the rightstext of the holders ofPlan, rather than such titles or headings, shall control.17. 9. GENDER AND NUMBER. Except where otherwise indicated by the context, any series of Preferred Stock then outstanding,masculine term used herein also shall include the feminine; the plural shall include the singular and unless the Board of Directors otherwise determines, newly created directorships resulting from any increasesingular shall include the plural.17.10. FRACTIONAL SHARES. No fractional Shares shall be issued and the Committee shall determine, in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the directors then in office, though less than a quorum, and directors so chosen shall holdoffice for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.D. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporationits discretion, whether cash shall be given in the manner provided in the Bylawslieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.17.11. GOVERNMENT AND OTHER REGULATIONS.(a) Notwithstanding any other provision of the Corporation.E. SubjectPlan, no Participant who acquires Shares pursuant to the rightsPlan may, during any period of time that such Participant is an affiliate of the holdersCompany (within the meaning of the rules and regulations of the Securities and Exchange Commission under the 1933 Act), sell such Shares, unless such offer and sale is made (i) pursuant to an effective registration statement under the 1933 Act, which is current and includes the Shares to be sold, or (ii) pursuant to an appropriate exemption from the registration requirement of the 1933 Act, such as that set forth in Rule 144 promulgated under the 1933 Act.A-23(b) Notwithstanding any seriesother provision of Preferred Stock then outstanding, any director, or the entire Board of Directors, may he removed from officePlan, if at any time but onlythe Committee shall determine that the registration, listing or qualification of the Shares covered by an Award upon any Exchange or under any foreign, federal, state or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such Award or the purchase or receipt of Shares thereunder, no Shares may be purchased, delivered or received pursuant to such Award unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any condition not acceptable to the Committee. Any Participant receiving or purchasing Shares pursuant to an Award shall make such representations and agreements and furnish such information as the Committee may request to assure compliance with the foregoing or any other applicable legal requirements. The Company shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to the Committee’s determination that all related requirements have been fulfilled. The Company shall in no event be obligated to register any securities pursuant to the 1933 Act or applicable state or foreign law or to take any other action in order to cause the issuance and onlydelivery of such certificates to comply with any such law, regulation or requirement.17.12. GOVERNING LAW. To the extent not governed by federal law, the Plan and all Award Certificates shall be construed in accordance with and governed by the affirmative votelaws of the holdersState of a majorityDelaware.17.13 ADDITIONAL PROVISIONS. Each Award Certificate may contain such other terms and conditions as the Committee may determine; provided that such other terms and conditions are not inconsistent with the provisions of the votingPlan.17.14. NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall not in any way affect the right or power of the Company to make adjustments, reclassification or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. The Plan shall not restrict the authority of the then-outstanding sharesCompany, for proper corporate purposes, to grant or assume awards, other than under the Plan, to or with respect to any person. If the Committee so directs, the Company may issue or transfer Shares to an Affiliate, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Affiliate will transfer such Shares to a Participant in accordance with the terms of capital stock ofan Award granted to such Participant and specified by the Corporation entitled to vote generally in the election of directors (after giving effectCommittee pursuant to the provisions of Article FOURTH of this Certificate of Incorporation (“Article FOURTH”)),voting together as a single class.EIGHTH:The Board of Directors is expressly empowered to adopt, amend or repeal By-laws of the Corporation. Any adoption, amendment or repeal of the By-laws of the Corporation by the Board of Directors shall require the approval of a majority of the Whole Board. The stockholders shall also have power to adopt, amend or repeal the By-laws of the Corporation; provided, however, that any such alteration, amendment or repeal must be approved by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (after giving effect to the provisions of Article FOURTH), voting together as a single class.Plan.NINTH:17.15. INDEMNIFICATIONThe Board of Directors of the Corporation, when evaluating any offer of another person to (A) make a tender or exchange offer for any equity security of the Corporation, (B) merge or consolidate the Corporation with another corporation or entity or (C) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation, may, in connection with the exercise of its judgment in determining what is in the best interest of the Corporation and its stockholders, give due consideration to all relevant factors, including, without limitation, the social and economic effect of acceptance of such offer on the Corporation’s present and future customers and employees and those of its subsidiaries; on the communities in which the Corporation and its subsidiaries operate or are located; on the ability of the Corporation to fulfill its corporate objectives as a bank holding company; and on the ability of its subsidiary bank to fulfill the objectives of a federally-chartered stock form savings bank under applicable statutes and regulations.TENTH:A.. Each person who wasis or is madeshall have been a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reasonmember of the fact that heCommittee, or she is or was a directorof the Board, or an officer of the Corporation or is orCompany to whom authority was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including servicedelegated in accordance with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent,Article 4 shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same existsCompany against and from any loss, cost, liability, or expense that may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxesimposed upon or penalties and amounts paid insettlement) reasonably incurred by him or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section C hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemniteeher in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a proceeding (or part thereof) initiatedparty or in which he or she may be involved by such indemnitee only if such proceeding (or part thereof) was authorized byreason of any action taken or failure to act under the Board of Directors of the Corporation. For all purposes of this Article TENTH, the directors of Wilmington Savings Fund Society, FSB,Plan and against and from any and all officers thereof (as elected or appointed in the manner provided in the by-laws of Wilmington Savings Fund Society, FSB) shall be deemed to be serving at the request of the Corporation as such directors and officers.B. The right to indemnification conferred in Section A of this Article shall include the right to beamounts paid by him or her in settlement thereof, with the Corporation the expenses incurredCompany’s approval, or paid by him or her in defendingsatisfaction of any judgment in any such action, suit, or proceeding in advance ofagainst him or her, provided he or she shall give the Company an opportunity, at its final disposition (hereinafter an “advancement of expenses”); provided, however, that, ifown expense, to handle and defend the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee insame before he or she undertakes to handle and defend it on his or her capacityown behalf, unless such loss, cost, liability, or expense is a result of his or her own willful misconduct or except as a director or officer (and not in any other capacity in which service was or is renderedexpressly provided by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporationstatute. The foregoing right of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to he indemnified for such expenses under this Section or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections A and B of this Article shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators.C. If a claim under Section A or B of this Article is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its board of directors, independent legal counsel, or its stockholders) that the indemnitee has not meet such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking. the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article or otherwise shall be on the Corporation.D. The rights to indemnification and to the advancement of expenses conferred in this Article shall not be exclusive of any other rightrights of indemnification to which such persons may be entitled under the Company’s charter or bylaws, as a matter of law, or otherwise, or any personpower that the Company may have to indemnify them or hereafter acquirehold them harmless.17.16. SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.(a) General. It is intended that the payments and benefits provided underany statute, the Corporation’s certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise.E. The Corporation may maintain insurance, at its expense, to protect itselfPlan and any director, officer, employeeAward shall either be exempt from the application of, or agentcomply with, the requirements of Section 409A of the CorporationCode. The Plan and all Award Certificates shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or another corporation, partnership, joint venture, trustany Award is not warranted or guaranteed. Neither theA-24Company, its Affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other enterprise againstmonetary amounts owed by any expense, liabilityParticipant or loss, whetherother taxpayer as a result of the Plan or notany Award.(b) Definitional Restrictions. Notwithstanding anything in the Corporation would havePlan or in any Award Certificate to the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.F. The Corporation may,contrary, to the extent authorizedthat any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable, or a different form of payment (e.g., lump sum or installment) would be effected, under the Plan or any Award Certificate by reason of the occurrence of a Change in Control, or the Participant’s Disability or separation from timeservice, such amount or benefit will not be payable or distributable to timethe Participant, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control, Disability or separation from service meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Award upon a Change in Control, Disability or separation from service, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the next earliest payment or distribution date or event specified in the Award Certificate that is permissible under Section 409A. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.(c) Six-Month Delay in Certain Circumstances. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Plan or any Award Certificate by reason of a Participant’s separation from service during a period in which the Participant is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):(i) the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately following the Participant’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Participant’s separation from service (or, if the Participant dies during such period, within 30 days after the Participant's death) (in either case, the “Required Delay Period”); and(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.For purposes of this Plan, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in such final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board of Directors, grant rights to indemnification and to the advancement of expenses toor any employee or agentcommittee of the Corporation to the fullest extent of the provisions of this ArticleBoard, which shall be applied consistently with respect to the indemnification and advancement of expenses of directors and officersall nonqualified deferred compensation arrangements of the Corporation.ELEVENTH:(d) A directorGrants to Employees of Affiliates. Eligible Participants who are service providers to an Affiliate may be granted Options or SARs under this Corporation shall not be personally liable toPlan only if the Corporation or its stockholders for monetary damages for breachAffiliate qualifies as an “eligible issuer of fiduciary duty as a director, except for liability (i) for any breachservice recipient stock” within the meaning of §1.409A-1(b)(5)(iii)(E) of the director’s dutyfinal regulations under Code Section 409A.(e) Fair Market Value of loyaltyUnlisted Stock. If at any time the Stock ceases to bet listed on a securities exchange, the Corporation or its stockholders, (ii)Fair Market Value of the Stock as of any given date shall, for acts or omissions notpurposes of the Plan and any Award, be determined by such method as the Committee determines in good faith or which involve intentional misconduct or a knowing violation of law, (iii) underto be reasonable and in compliance with Section 174409A of the Delaware General Corporation Law,Code.(f) Design Limits on Options and SARs. Notwithstanding anything in this Plan or (iv)any Award Certificate, no Option or Stock Appreciation Right granted under this Plan shall (i) provide for DividendA-25Equivalents or (ii) have any transaction fromfeature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the Option or Stock Appreciation Right.(g) Timing of Distribution of Dividend Equivalents. Unless otherwise provided in the applicable Award Certificate, and Dividend Equivalents granted with respect to an Award hereunder (other than Options or SARs, which shall have no Dividend Equivalents) will be paid or distributed no later than the 15th day of the 3rd month following the later of (i) the calendar year in which the director derivedcorresponding dividends were paid to stockholders, or (ii) the first calendar year in which the Participant’s right to such Dividends Equivalents is no longer subject to a substantial risk of forfeiture.(h) Anti-Acceleration Rules. Notwithstanding anything in the Plan, the Committee may not accelerate the payment of any Award if such acceleration would violate Section 409A (a) (3) of the Code.(i) Installment Payments. If, pursuant to an improper personal benefit. IfAward, a Participant is entitled to a series of installment payments, such Participant’s right to the Delaware Generalseries of installment payments shall be treated as a right to a series of separate payments and not to a single payment. For purposes of the preceding sentence, the term “series of installment payments” has the meaning provided in Treas. Reg. Section 1.409A-2(b)(2)(iii) (or any successor thereto).*****************The foregoing is hereby acknowledged as being the WSFS Financial Corporation Law is amended after approval2005 Incentive Plan as originally adopted by the Board on February 23, 2005 and approved by the stockholders of this Article to authorize corporate action further eliminating or limitingat the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.Any repeal or modification of the foregoing paragraph2005 Annual Meeting. The plan was amended by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.TWELFTH:The Corporation reserves2007 Annual Meeting to increase the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner prescribedshares available for grant, and thereafter was amended and restated by the laws ofBoard for Section 409A compliance and other purposes on December 31, 2008 and by the State of DelawarePersonnel and all rights conferred upon stockholders are granted subject to this reservation.IN WITNESS WHEREOF, the Board of Directors of the Corporation has caused this Restated Certificate of Incorporation to be signed by its President and Chief Executive Officer and attested by its Secretary, thisCompensation Committee on February 24,th day of May, 1993.WSFS Financial Corporation
2010./s/ Marvin N. Schoenhals_________Marvin N. SchoenhalsATTEST:_________________________SecretaryThis Proxy is Solicited on Behalf of the Board of DirectorsWSFS FINANCIAL CORPORATIONfor the2009 Annual Meeting of StockholdersThe undersigned hereby appoints Marvin N. Schoenhals and Mark A. Turner, or either of them, with full power of substitution, to act as attorneys and proxies for the undersigned and to vote all shares of Common Stock of WSFS Financial Corporation which the undersigned is entitled to vote, at the Annual Meeting of Stockholders to be held on April 23, 2009 at 4:00 p.m., or at any adjournments thereof, as follows: By: s/s Stephen A. Fowle, SecretaryA-26xPlease mark yourvotes as in thisexample.The Board of Directors recommends a voteFORall nominees and items listed below.WITHHOLD AUTHORITYto vote for allFORnominees listed at rightNominees:1.Election of o oFor a three year term expiring in 2012:Directors:Jennifer W. Davis
Donald W. DelsonScott E. ReedClaiborne D. SmithFor a one year term expiring in 2010:
Linda C. DrakeDavid E. Hollowell(To withhold authority to vote any individual nominee writethe nominee’s name on the line provided below).2.Ratification of the appointment of KPMG, LLP as independent auditors for the fiscal year ending December 31, 2009FORAGAINSTABSTAIN o o o3.Advisory (non-binding) vote to approve the compensation of the Company’s executivesFORAGAINSTABSTAIN o o o4.Approval of amendment to Article Fourth, Paragraph A of Restated Certificate of IncorporationFORAGAINSTABSTAIN o o o5.Approval of amendment to delete Article Fourth, Paragraph C and Article Sixth, paragraph (d) of Restated Certificate of IncorporationFORAGAINSTABSTAIN o o o6.Approval of amendment to delete Article Fifth of Restated Certificate of Incorporation
FORAGAINSTABSTAIN o o oThe proxy is revocable and, when properly executed will be voted in the manner directed hereby by the undersigned. If no directions are made, this proxy will be voted FOR each of the nominees and the other proposals. The undersigned, by executing and delivering this proxy, revokes the authority given with respect to any earlier dated proxy submitted by the undersigned.Unless contrary direction is given, the right is reserved in the sole discretion of the Board of Directors to distribute votes among some or all of the above nominees in a manner other than equally so as to elect as directors the maximum possible number of such nominees.In their discretion the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting.The undersigned acknowledges receipt of the Notice of Annual Meeting of Stockholders, a Proxy Statement and Annual Report of WSFS Financial Corporation.Please sign exactly as name appears hereon. If signing as attorney, executor, administrator, trustee or guardian, please indicate the capacity in which you are acting. Proxies executed by corporations should be signed by a duly authorized officer.SIGNATURE(S) _________________________________________Date ____________________PLEASE MARK, SIGN, DATE AND RETURN THIS CARDPROMPTLY USING THE ENCLOSED ENVELOPE.
